M/S Dhiraj Gupta vs. Union Of INDIA And Ors.

Held

The Court held that the decision of the respondent to reject the petitioner's tender was not arbitrary. The petitioner's claim of having placed a purchase order for 25 cranes was not substantiated by an unconditional commitment. The vendor, M/s Tata Motors, clarified that the document was a Proforma Invoice and no payment had been made, meaning no purchase had materialized. Furthermore, the purchase orders submitted by the petitioner were conditional upon the issuance of a Letter of Award from Delhi Police. The Court found that the authorities had made a reasonable assessment based on their inquiry and the petitioner's conditional commitment. The petitioner's reliance on Clause 1.29 was deemed of little consequence in light of the failure to demonstrate an unconditional commitment to purchase the requisite vehicles. Therefore, the rejection of the offer did not suffer from arbitrariness.

Facts

The petitioner, M/s Dhiraj Gupta, participated in a tender process initiated by the Deputy Commissioner of Police for hiring cranes. The tender conditions stipulated that bidders must offer a minimum of 30% of the total requirement of cranes. The petitioner's bid was rejected at the technical evaluation stage. The petitioner claimed to have placed an order for 25 cranes with M/s Tata Motors Ltd. and provided a purchase order and cheques as proof. The respondent authorities, however, made an inquiry with M/s Tata Motors. The vendor responded that the document provided by the petitioner was a Proforma Invoice (quotation) and no payment had been made, hence no purchase had materialized. The purchase orders submitted by the petitioner were also found to be conditional upon the issuance of a Letter of Award from Delhi Police.

Key Issues

1. Whether the rejection of the petitioner's bid at the technical evaluation stage by the respondent authorities was arbitrary and unjustified, particularly concerning the requirement to offer a minimum number of cranes as stipulated in the tender conditions. Petitioner's contention: The petitioner argued that they had placed a firm order for 25 cranes with M/s Tata Motors Ltd. and had issued cheques as proof of commitment. They asserted that the tender conditions were tailor-made to favor a third party. They also relied on Clause 1.29 of the tender, which pertains to the delivery of equipment, to argue that the presentation of vehicles arises later in the process. Respondent's contention: The respondent authorities argued that their inquiry with the vendor revealed that the petitioner had not made an unconditional commitment to purchase the required number of cranes. The vendor clarified that the document provided was a Proforma Invoice and no payment had been received, thus no sale had occurred. The purchase orders were conditional.