Arya Omnitalk Wireless Solutions PVT. LTD. vs. Maharashtra State Road Transport Corporation, Through The Managing Director And Ors.

Held

The Court held that the Petitioner's contention that sub-clause 8 of clause 7.2 of the tender condition was breached could not be accepted. The Court found that the MSRTC's approach was neither unconscionable nor arbitrary in accepting the lowest bid of Respondent No. 2. It reasoned that the original tender condition regarding the CAPEX cost limit needed to be read in conjunction with the corrigendum, which mandated bidders to account for GST. The Court noted that the introduction of GST during the tendering process justified negotiations with the L-1 bidder to ensure the bid was more beneficial to MSRTC. The Court also referred to a Government circular permitting negotiations in light of GST implementation. The Court concluded that MSRTC acted in accordance with the tender conditions, as read with the corrigendum, and that the negotiations and acceptance of a further discount by Respondent No. 2 during negotiations did not constitute a reason to cancel their bid. Therefore, the petition was rejected.

Facts

The Maharashtra State Road Transport Corporation (MSRTC) issued a tender for a Vehicle Tracking System and Passenger Information System. Arya Omnitalk Wireless Solutions Pvt. Ltd. (Petitioner) was a bidder, and Rosmerta Autotech Pvt. Ltd. (Respondent No. 2) was the successful lowest bidder (L-1). The Petitioner sought to quash the award of the tender to Respondent No. 2, alleging that Respondent No. 2's bid violated a tender condition (sub-clause 8 of paragraph 7.2) which stipulated that CAPEX cost should not exceed 50% of the total cost (CAPEX + OPEX). The Petitioner contended that Respondent No. 2's bid, when considering GST, exceeded this limit. MSRTC argued that the introduction of GST after the tender notice necessitated negotiations with the L-1 bidder to adjust tax components, as the original bids were based on pre-GST indirect taxes.

Key Issues

1. Whether the award of the tender to Respondent No. 2 by MSRTC is liable to be quashed and set aside for allegedly violating sub-clause (8) of paragraph 7.2 of the tender conditions, which limits CAPEX cost to 50% of the total cost. Petitioner's arguments: The Petitioner argued that Respondent No. 2's bid, after accounting for GST, exceeded the 50% CAPEX limit, rendering it non-responsive. They contended that MSRTC should not have entered into negotiations with Respondent No. 2 when its bid was fundamentally contrary to this condition. Respondents' arguments: MSRTC argued that the introduction of GST after the tender notice meant that the original bids, based on pre-GST taxes, needed readjustment. They contended that Respondent No. 2's original CAPEX cost was below 50% of the total cost and that negotiations were permissible to accommodate the new GST regime, citing a Government Circular dated 19 August 2017. Respondent No. 2 submitted that the negotiated price was within permissible parameters after GST implementation and that a corrigendum allowed for such adjustments.