Utkal Suppliers, Ganjam vs. State Of Odisha

Held

The Court held that the writ petition lacked merit and was dismissed. The Court considered the principles of judicial review in tender matters, emphasizing that courts should intervene only when a decision is mala fide, arbitrary, irrational, or affects public interest. The Court noted that the petitioner had participated in the tender process, including a pre-bid meeting where a corrigendum was issued. The revenue argued that the petitioner had quoted a price in violation of clause-3 of the TOR read with Form-F2, which was a valid ground for rejection. The Court found that the petitioner had not demonstrated any illegality, arbitrariness, or mala fide on the part of the authorities. The Court also noted the revenue's contention that the financial bid evaluation was not yet approved, suggesting the petition might be premature. Relying on established precedents regarding judicial restraint in commercial transactions and tender processes, the Court concluded that interference was not warranted. No costs were awarded.

Facts

The petitioner, Utkal Suppliers, filed a writ petition challenging the rejection of its financial bid for the supply of diet to DHH, Sambalpur. The Chief District Medical & Public Health Officer-cum-District Mission Director, NHM, Sambalpur, issued a Request for Proposal (RFP) for this service. The petitioner qualified in the technical bid along with two other parties, including Opposite Party No. 3. During the financial bid opening on July 17, 2020, the petitioner was found to be the lowest bidder. However, its bid was rejected based on clause-3 of Section-3 of the Terms of Reference (TOR), and the contract was awarded to Opposite Party No. 3. The petitioner alleged malafides and a change in tender conditions after the process began. The revenue contended that the writ petition was premature as the financial bid evaluation was not approved, and the petitioner had violated a condition regarding quoting prices less than 3% of the approved government rate.

Key Issues

1. Whether the rejection of the petitioner's financial bid, despite being the lowest bidder, was arbitrary and illegal, particularly in light of clause-3 of Section-3 of the Terms of Reference (TOR) and a subsequent corrigendum? 2. Whether the change of tender conditions through a corrigendum issued on June 12, 2020, after the initial RFP, was permissible and whether the petitioner was duly notified? 3. Whether the writ petition was premature, as the financial bid evaluation had not received final approval from the competent authority? Petitioner's arguments: The petitioner argued that as the lowest tenderer, its bid should not have been rejected. It contended that invoking clause-3 of the TOR was improper after it had qualified technically and participated in the financial bid. The petitioner alleged that changing tender conditions after the process began was impermissible and that a corrigendum issued on June 12, 2020, was done behind its back to disqualify it. It also alleged mala fide intentions in selecting Opposite Party No. 3 and noted that its Earnest Money Deposit (EMD) had not been refunded. Revenue's arguments: The revenue argued that the writ petition was premature as the financial bid evaluation was awaiting approval. It asserted that the petitioner had violated a tender condition by quoting a price less than 3% of the approved government rate, providing a valid reason for rejection. The revenue also contended that the corrigendum was issued after a pre-bid meeting attended by the petitioner, making it aware of the changes, and that the petitioner could not challenge the process after participating and being unsuccessful. The revenue also questioned the source of the petitioner's financial evaluation report (Annexure-3).