Tender Inviting Authority Best Judge Of Tender Requirements: Madras High Court

A single-judge bench of Justice M Dhandapani held that the court cannot interfere in the administrative decision of the award of tender, when the process of inviting tenders and evaluating them has not suffered from the vice of arbitrariness and unreasonableness.

"The touchstone on which the tender awarding process should be looked at is only on the basis of arbitrariness and unreasonableness in the award of the tender. So long as arbitrariness and unreasonableness have not formed the basis of the tender scrutiny committee taking a decision, courts would not be justified in substituting its views to that of the tender inviting authority", the court observed while iterating that if the above principle is not followed, every award of tender will be prone to litigation by those who have been not chosen for the tender, defeating the purpose of tender evaluation committee.

In the case before the High Court, Brandmidas Hospitality and Aviation Services Private Limited alleged that the Airports Authority of India had rejected its technical bid unilaterally by violating the principles of natural justice.

Background

E-tenders were invited by Airports Authority of India for the operation of Sale Kiosk and Smoking Lounge at Chennai Airport under a two bid system including i) Technical Bid and ii) Financial Bid. Though Brandmidas participated in the two step tender process, the technical bid of the petitioner was rejected by Airports Authority on the ground that that the details furnished by the petitioner were incomplete. According to the petitioner, it was not even granted an opportunity to provide an explanation and its financial bid which was this highest among the total two bidders was turned down, violating the competitive spirit of tender process and causing a huge loss to the exchequer. The petitioner, therefore, approached the court for quashing the rejection or floating a fresh E-tender.

The respondent counsel submitted that 'no due certificate' pertaining to certain airports, which were provided in the bid submitted by the petitioner and the statement in the affidavit were incorrect. The respondent counsel also submitted that the bidders were granted an opportunity to rectify the faults. However, the petitioner resubmitted some documents by reiterating the previous submissions and not producing the requisite contracts with other airports and mandatory declaration in Annexure G. The petitioner has even misrepresented the details about commencement of the operation at Goa Airport, alleged the respondent counsel.

Since the tender process has been uniformly followed by the respondent authority, mere lack of competition due to external factors at the opening of financial bid won't negate the administrative action, it was submitted.

Court's Findings

Relying on Uflex Ltd. v. Government of T.N. & Ors. LL 2021 SC 465 wherein the apex court had stressed on the limited scope for tender jurisdiction, the High Court observed that judicial review must not be whimsical or for an ulterior purpose.

In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd.( 2016), with respect to tender process, the court had noted that 'interference is permissible only if the decision- making process is arbitrary or irrational to an extent that no responsible authority, acting reasonably and in accordance with law, could have reached such a decision.' Concurring with the above observation as well as the judgment in Silippi Constructions Contractors v. Union of India & Anr (2019), Madras High Court noted that the qualitative analysis made by the tender evaluation team will be the best judge of tenders received. The court cannot unnecessarily place impediments on the awarding of contracts by the Government and the Public Sector in the absence of arbitrariness, unreasonableness, mala fides or bias in the tender process.

Coming back to the case, after perusing the documents, the court reached conclusion that the petitioner has not even met the duty of filling up the tender form completely.

"…In such a backdrop, when it is the categorical stand of the 1st respondent that the petitioner has not provided the material particulars by either filling up the annexures or annexing relevant documents, to hold that the petitioner has not committed any error in submitting the requisite documents, would be nothing but stepping into the shoes of the tender evaluating authority by substituting the Court's view to that of the 1st respondent", the court observed.

The petitioner had earlier made a submission that they could not receive the 'no due certificates' from certain airports even after requests were made and that the Airports Authority of India could have obtained the same easily. Regarding this line of argument, the court observed as follows:

"It is to be pointed out that when certain documents are mandated as necessary documents, which should accompany the tender, non-furnishing of the said documents would definitely invalidate the tender. Though it is contended that the said documents are within the reach of the 1st respondent, however, it is to be pointed out that when there are deficiencies in the documents, which are attached with the tender, the tender evaluation committee was right in rejecting the bid submitted by the petitioner and the same cannot be interfered by assuming that the said deficiencies/mistakes or omissions are trivial in nature."

After making the above observations, the court concluded that the authority best to judge the interpretation of documents would be the one who floated it. Accordingly, the writ petition challenging the tender process was dismissed by the court.

Case Title: M/s.Brandmidas Hospitality & Aviation Services (P) Ltd. v. Airports Authority of India & Anr.

Case No: W.P. No.35845/ 2019

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