Tendering Authority Must Preserve Fairness Of Process When Re-Evaluating Bidder's Eligibility, Can't Simply Reiterate Selection: Calcutta High Court

The Court said the dispute, in this second round of litigation between the parties, is whether the Institute justified the decision of awarding the tender to another bidder without due regard to the eligibility criteria in the tender documents. The petitioner argued that another bidder was selected despite failing the required criteria.

Justice Bhattacharya said reliance on JSS Hospital documents is misplaced as the fact of it having 800 beds would appear from a document downloaded from the JSS Hospital website.

"This document can by no means be treated as evidence of the private respondent executing and successfully completing the work of mechanised cleaning services for a Hospital with 500+ beds. The document also shows that the critical and emergency care facility has 260 beds which further lends to the ambiguity of whether the private respondent actually performed similar work for JSS Hospital with 500+ beds in one single contract," said the court.

The bench further said reliance on such document would also be contrary to the object of the tender conditions that required the eligible bidders to furnish proof of having performed similar work for a hospital with 500+ beds and also having successfully completed the said work.

"Second, reliance on the downloaded document also amounts to an admission that the private respondent did not furnish the required documents at the relevant stage of the tender. This would be corroborated from the statements made by the private respondent in the supplementary affidavit filed in the earlier round of litigation," said the court.

The court quashed the impugned decision, while ruling that it does not stand the test of transparency which is expected in tender matters.

On the point of balance of convenience, the Court noted that the contractor, who was awarded the contract, started work at the institute in February 2020. However, it said the tender itself contemplated that the second ranked bidder - which is the petitioner in this matter, shall be kept in reserve and may step in if the first ranked bidder withdraws or fails to deposit the bank guarantee or meet the other obligations. 

"The tender conditions also provide that an agreement / work order issued to the preferred bidder will be terminated on a material misrepresentation or false information given by the preferred bidder. The tender conditions hence provide that the second ranked bidder will take the position of the first ranked bidder on the happening of certain events," said the court.

The court further said the passage of time between the filing of the earlier writ petition and the impugned order cannot be held against the petitioners if the Institute has not satisfied the expected standard of re-evaluation.

"The petitioners cannot be at the receiving end or be made to suffer the effect of a work order which has wrongly been issued to the private respondent in disregard of the tender conditions. In other words, an illegality cannot be permitted to continue on the defence of balance of convenience," it added.

The bench further noted that High Courts exercising power under Article 226 can issue a writ of mandamus or in the nature of a mandamus or necessary directions where they come to a view that a public authority has failed to exercise discretion conferred upon it by a statute, a rule or a policy decision.

"The High Court in its writ jurisdiction can intervene in cases where the discretion has been exercised by taking into account irrelevant considerations or by ignoring relevant considerations in a manner which is not consonant with the object for which discretion has been conferred on the authority. The object of issuing of a mandamus is to compel the performance of an act by an authority which comes within the fold of Article 226 and to prevent miscarriage of justice. The ultimate rationale of a 226 jurisdiction is to secure justice for those whose rights under Part III of the Constitution have been infringed by an authority amenable to writ jurisdiction. This Court takes inspiration from the words of Justice D.P. Madon in Comptroller and AuditorGeneral of India, Gian Prakash, New Delhi vs. K.S. Jagannathan; (1986) 2 SCC 679."

Deeming the instant case to be fit for interference with the discretion exercised by the tendering authority, the court directed it to immediately take steps to terminate the contract with the private respondent and award the remaining time of the tender to the next eligible bidder.

"The Institute shall consider the findings in the judgment dated 21st September, 2022 and deal with the same and take the required steps by 1.1.2023," it added.

The court rejected the prayer for stay on the operation of the judgement. Chittaranjan National Cancer Institute has now filed an appeal against the single bench decision. 

Case: Reliable Facility Services Private Limited & Anr. v. Chittaranjan National Cancer Institute & Ors., WPA 25725 of 2022

Date: 23.12.2022

Citation: 2022 LiveLaw (Cal) 377