Suraj Enterprises vs. Nashik Municipal Corporation And Anr

Held

The Court held that the decision-making process adopted by the Additional Commissioner of the Nashik Municipal Corporation in declaring Respondent No.2 technically qualified was neither fair nor reasonable. The Tender Committee, after scrutinizing documents including work orders, concluded that Respondent No.2's turnover from spraying and fogging activities amounted to Rs. 60,03,384/-, thus not meeting the Rs. 4.50 Crores requirement. While a Chartered Accountant's certificate suggested a turnover of Rs. 5.64 Crores, the Committee's conclusion was based on direct evaluation of submitted documents. The Additional Commissioner's decision, based solely on a new Chartered Accountant certificate and without mentioning the Corporation's own Chartered Accountant's opinion or providing reasons as required by paragraph 4.4.3.1(c) of the Procurement Manual, was found to be flawed. The Court found that the justification provided in the Affidavit-in-Reply could not cure the deficiency in the Additional Commissioner's original decision-making process. Therefore, any decision based on such an unfair and unreasonable process cannot be sustained. The Writ Petition was allowed, and the decision declaring Respondent No.2 technically qualified was quashed. Respondent No.1 was directed to reissue the tender and process it expeditiously.

Facts

The Petitioner, M/s. Suraj Enterprises, challenged an order by the Nashik Municipal Corporation (Respondent No.1) that declared Respondent No.2, M/s. S and R Pest Control Services, technically qualified for a tender. The tender was for spraying and fogging activities for Vector Borne Diseases. The Petitioner alleged that Respondent No.2 did not meet Tender Condition No. 6, which required a Chartered Accountant certificate showing a turnover of over Rs. 4.50 Crores from spraying and fogging in the last three years. The Petitioner claimed Respondent No.2's actual turnover for this period was significantly less and primarily from rodent, termite, and cockroach control, not mosquito control. The Tender Committee initially found Respondent No.2 ineligible, but the Additional Commissioner overruled this based on a new Chartered Accountant certificate.

Key Issues

1. Whether Respondent No.2 fulfilled Tender Condition No. 6, requiring a turnover of more than Rs. 4.50 Crores from spraying and fogging activities in the last three years, as per Section 226 of the Constitution of India and principles of fair tender process. Petitioner's arguments: Respondent No.2's submitted work orders aggregated to only Rs. 60,03,384/-, and most were for rodent, termite, and cockroach control, not mosquito control or spraying/fogging. The Tender Committee, comprising experts, correctly found Respondent No.2 ineligible. The Additional Commissioner improperly overruled the Tender Committee's expert opinion by relying solely on a new Chartered Accountant certificate, effectively sitting in appeal and reassessing the issue, which is impermissible. The process was unfair and lacked transparency. Revenue/State's arguments: Respondent No.1 relied on clause 4.4.3.1(c) of the Procurement Manual, which allows the Purchase Officer to proceed even if less than three tenderers are technically eligible, provided feasible grounds are recorded. The Affidavit-in-Reply provided justification for declaring Respondent No.2 technically qualified.