Sis Limited vs. Bangalore Metro Rail Corporation Limited

Held

The Court held that the rejection of the petitioner's bid was neither arbitrary nor discriminatory. It found that Clause 6.3(4)(iii) of the tender document clearly stipulated that bids quoting unrealistic prices for devices would be rejected. The Court noted that the petitioner quoted Rs.49/- per device, while providing purchase orders for devices at rates ranging from Rs.2,369/- to Rs.3,614/-. In contrast, Respondent No. 2 quoted Rs.1,865/- per device with invoices reflecting rates between Rs.1,017/- and Rs.1,865/-. The Tender Evaluation Committee reasonably concluded that the petitioner's price was unrealistic. The Court also held that the petitioner's participation in the tender process without objection, and its subsequent challenge only after bid rejection, indicated an acceptance of the process and its terms, invoking the doctrines of waiver, acquiescence, and estoppel. The petitioner failed to demonstrate prejudice from the lack of a personal hearing or any procedural irregularity. The judgments cited by the petitioner were distinguished as they did not involve specific clauses for rejection based on unrealistic pricing. Therefore, the Court concluded that Respondent No. 1 acted within its rights and in accordance with the tender terms.

Facts

The petitioner, SIS Limited, filed multiple writ petitions challenging the rejection of its bid for providing security and allied services for various sections of the Bangalore Metro Rail Corporation Limited (BMRCL). The rejection was based on the petitioner quoting an 'unrealistic price' for Hand-Held Metal Detectors (HHMDs). The petitioner argued that its price was not unrealistic and that it was not given an opportunity to be heard, violating principles of natural justice and Article 14 of the Constitution. It also contended that the tender process was not conducted under the Karnataka Transparency in Public Procurement Act, 1999 (KTPP Act), rendering the award to Respondent No. 2 (Wisdom Security Services) illegal. The respondents argued that Clause 6.3(4)(iii) of the tender document permitted rejection of bids with unrealistic prices, which the petitioner had agreed to by participating in the tender. They also asserted that the KTPP Act provisions were complied with and the petitioner was estopped from challenging the process after participating without protest.

Key Issues

1. Whether the rejection of the petitioner's bid for quoting an unrealistic price for Hand-Held Metal Detectors (HHMDs) was arbitrary and discriminatory, violating Article 14 of the Constitution and principles of natural justice, particularly in light of the petitioner not being afforded an opportunity to be heard? 2. Whether the tender process, as conducted by Respondent No. 1, lacked legal authority because it was allegedly not floated under the provisions of the Karnataka Transparency in Public Procurement Act, 1999 (KTPP Act)? Petitioner's arguments: The petitioner contended that its quoted price was not unrealistic, especially when compared to the prices it had previously paid for similar devices. It argued that the rejection was arbitrary and discriminatory, and the lack of a hearing violated natural justice. Furthermore, the petitioner asserted that the entire tender process was invalid as it did not adhere to the KTPP Act, and therefore, the award to Respondent No. 2 was without legal basis. Respondents' arguments: The respondents argued that Clause 6.3(4)(iii) of the tender document explicitly allowed for the rejection of bids quoting unrealistic prices, and the petitioner's bid fell into this category. They contended that the petitioner, by participating in the tender process and accepting its terms without protest, was estopped from challenging the legality of the process later. The respondents also claimed compliance with the KTPP Act and denied any procedural irregularities.