Ferro Concrete Construction (INDIA) PVT. LTD. vs. Tungabhadra Board

Facts

The petitioner, Ferro Concrete Construction (India) Pvt. Ltd., filed a writ petition challenging the rejection of its technical bid for Tender Nos. 92/2022-23 and 93/2022-23, issued by the Tungabhadra Board (Respondent No. 1) and the Superintending Engineer, Irrigation Branch (Respondent No. 2). These tenders were for dam body grouting and related works on the Tungabhadra Dam's right flank. The petitioner alleged bias and arbitrariness in the rejection, claiming its technical bid was rejected on January 17, 2023, without proper reasons. Respondents 1 and 2 contended that the petitioner's submitted work certificate did not match the tender requirements, justifying the rejection and the subsequent award of the contract to Respondent No. 3. Respondent No. 3 also denied the petitioner's allegations and supported the respondents' decision.

Held

The Court held that the rejection of the petitioner's technical bid was arbitrary, lacked qualitative evaluation by experts, and was actuated by malafides, intended to favour Respondent No. 3. The Court found that Respondent No. 3 did not possess the requisite expertise and experience in dam maintenance and rehabilitation projects, unlike the petitioner, which had already been awarded a similar project for the same dam's left flank. The Court relied on Supreme Court judgments in New Horizons Limited and Raunaq International Limited, emphasizing the importance of past experience and present resources for large work contracts requiring specific skills, particularly for dam projects. The Court concluded that the decision suffered from illegality, irrationality, and procedural impropriety. Consequently, the impugned orders rejecting the petitioner's technical bid and awarding the tender to Respondent No. 3 were set aside. The Court directed the respondents to redo the entire tender process in accordance with the law and the observations made in the judgment.

Key Issues

1. Whether the rejection of the petitioner's technical bid by Respondent No. 2, based on a perceived mismatch in the description of a submitted work certificate, was arbitrary and vitiated by bias, contrary to the principles of fair tender evaluation? (Question of law and fact, turning on principles of administrative law and tender evaluation criteria). Petitioner's Arguments: - The petitioner argued that its technical bid was rejected arbitrarily and without assigning proper reasons. It contended that it had uploaded all requisite documents demonstrating its eligibility and pre-qualification. The petitioner alleged malafides and favoritism in the evaluation process, asserting that the entire bidding process was vitiated. Respondents' Arguments: - Respondents 1 and 2 argued that the tender evaluation committee found a variance in the description of items in the petitioner's submitted document compared to the tender requirements, justifying the rejection. They maintained that the tender process was strictly adhered to and documents were meticulously examined transparently. Respondent No. 3 supported this, stating the petitioner did not meet prequalification criteria and that its own bid was verified by concerned authorities.