M/S Tanor Engineering And Anr vs. The State Of Assam And 4 Ors.

Facts

The petitioner, M/s Tanor Engineering, challenged the rejection of its technical bid for a Performance-Based Maintenance Contract (PBMC) for certain sections of NH-15 and NH-515, issued by the Chief Engineer, PWD (NH Works), Assam. The bid was rejected on three grounds: insufficient Air Compressors, failure to show a committed work where the petitioner was L1, and incomplete disclosure of a large delayed contract where the petitioner was a sub-contractor. The petitioner argued that it had provided sufficient proof of having two Air Compressors, that the L1 status was not yet confirmed by a Letter of Acceptance, and that as a sub-contractor who had completed its portion of the delayed work, disclosure in Annexure-VIII was not required. The respondents are the State of Assam and its departments, along with the fifth respondent who was the successful bidder.

Held

The Court held that the second and third grounds for disqualifying the petitioner's technical bid were arbitrary and liable to be set aside. Regarding the second ground, the Court accepted the petitioner's submission that without a Letter of Acceptance (LoA) or intimation of L1 status, the work was not a committed work in the context of Clause 4.2 of the RFP. For the third ground, the Court found that Annexure-VIII pertains to the contractor or joint venture, not sub-contractors who have completed their portion of the work. The petitioner's sub-contract work was certified as completed, and a previous writ petition had recorded this completion. Therefore, the petitioner was not bound to submit details of the principal contractor's uncompleted work. The Court noted that the first ground for disqualification (Air Compressors) was not explicitly decided upon, and consequently, the matter was remanded back to the State respondents to decide if this single ground was sufficient for disqualification. The Court cited N.G. Projects Ltd. Vs. Vinod Kumar Jain and Ors. for the principle that courts should refrain from interfering with tender evaluation unless there is total arbitrariness or malafide, but in this instance, it found arbitrariness in two grounds.

Key Issues

1. Whether the petitioner adequately demonstrated possession of two Air Compressors as required by Clause 1.1(A) of Appendix to Instructions to Bidders (ITB), considering the tax invoice for '1 set' which included a tractor-mounted compressor, and if the rejection was arbitrary without seeking clarification, as argued by the petitioner, versus the respondents' view that only one compressor was documented. 2. Whether the petitioner's failure to list its L1 status for another job in the committed work format (Annexure-VI) was a valid ground for rejection, given the petitioner's argument that no Letter of Acceptance (LoA) was issued, and thus it was not a committed work in the stipulated sense, as against the respondents' reliance on Clause 4.2 of the RFP. 3. Whether the petitioner was obligated to disclose a delayed contract exceeding Rs. 300 Crore in Annexure-VIII, where the petitioner acted as a sub-contractor and had completed its portion of the work, as contended by the petitioner, versus the respondents' position that the delay in the principal contractor's work necessitated disclosure under Clause 4.1(j)(1) and Annexure-VIII of the RFP.