Sipl Infracon vs. The Union Of INDIA And 6 Ors.

Held

The Court held that Clause 3.2E of the Notice Inviting Tender (NIT) provided exemptions to startups from the prior experience and financial turnover criteria (Clause 3.2A(a) and (b)) but did not exempt them from the requirement of being a registered contractor with any Government/Semi-Government Department/NHPC as stipulated in Clause 3.2A(c). The Petitioner was asked to provide the certificate required under Clause 3.2A(c) via an email dated October 13, 2022. The Petitioner submitted a certification as a Class 1 contractor of its proprietorship firm, M/s SIPL INFRACON, and not as the startup partnership firm, M/s SIPL INFRACON. The initial responsiveness finding on November 29, 2022, was considered an error. This error was rectified on December 10, 2022, after giving the Petitioner a further opportunity to produce the required certification. The Court found that the exercise of power by the Respondent Authorities in rejecting the Petitioner's technical bid was not arbitrary, unreasonable, or contrary to the NIT. The Court also noted that the decision regarding Respondent No. 7, which was found techno-commercially responsive after rectification, did not warrant interference. Therefore, the writ petition was dismissed.

Facts

The Petitioner, SIPL INFRACON, a partnership firm registered as a startup, challenged the rejection of its technical bid for a river bank protection work tender issued by NHPC Ltd. (Respondent No. 2). The tender required bidders to meet certain financial turnover and prior experience criteria (Clause 3.2A(a) and (b)), be registered contractors (Clause 3.2A(c)), and submit PAN, GST, and EPF registration numbers (Clause 3.2B(i)). Clause 3.2E exempted startups from prior experience and turnover criteria, subject to quality and technical specifications, but not from the contractor registration requirement. The Petitioner submitted its bid as a startup partnership firm. The Tender Evaluation Committee initially found the Petitioner responsive, but later, on December 10, 2022, rejected its technical bid after an opportunity to submit a certificate under Clause 3.2A(c). The Petitioner argued this rejection was arbitrary and unreasonable.

Key Issues

1. Whether the rejection of the Petitioner's technical bid by the Tender Evaluation Committee, based on the report dated December 10, 2022, was arbitrary, unreasonable, or contrary to the Notice Inviting Tender (NIT), particularly concerning Clause 3.2A(c) and Clause 3.2E of the NIT? Petitioner's Arguments: The Petitioner contended that as a startup partnership firm, it was entitled to exemptions under Clause 3.2E from the prior experience and financial turnover criteria (Clause 3.2A(a) and (b)). It argued that the rejection of its technical bid was arbitrary and unreasonable, as it had participated as a startup and the authorities had initially found it responsive. The Petitioner sought a direction to accept its technical bid and for consequential reliefs. Respondents' Arguments: The Respondents argued that Clause 3.2E, while exempting startups from prior experience and turnover, did not exempt them from the requirement of being a registered contractor under Clause 3.2A(c). They submitted that the Petitioner had submitted a certificate for its proprietorship firm, not for the startup partnership firm, and that the rejection was a rectification of an earlier error after providing an opportunity to the Petitioner. The Respondents also argued that the Petitioner's claim of being a proprietorship firm with due qualifications was inconsistent with its claim of being a startup partnership firm seeking exemptions.