Bvg INDIA Limited vs. The State Of Andhra Pradesh

Held

The Court held that the tender inviting authority, as per Clause 6.18 of the tender document, reserved the right to accept or reject any bid, annul the bidding process, and reject all bids at any time prior to the award of the contract, without incurring liability or being obligated to inform the affected bidders of the grounds for their action. This power was deemed uninhibited and exercisable without assigning reasons, unless malafides or perversity were established. The Court found no malafides in the cancellation of the second tender notification. The argument regarding post-tender negotiations was considered formidable only if the contract had been awarded to M/s. Vsoft Technologies Pvt. Ltd., which was not the case, as the entire bid process was cancelled and a fresh notification was issued. The Court also found that G.O.Ms.No.79, mandating reverse tendering, was applicable as the contract had not been concluded, and the respondents were justified in cancelling the existing tender to comply with this G.O. The Court noted that the petitioner's contention regarding being unable to participate in the third tender due to portal issues was outside the scope of the present writ petition. Therefore, the Court found no merit in the petitioner's case to warrant judicial review.

Facts

The petitioner, a limited company providing facility services, sought a writ of mandamus to declare the cancellation of a tender notification (No.6.1A/APMSIDC/2020-21 dated 06.08.2020) by the 2nd respondent illegal and to direct the award of the tender to them as the L1 bidder. They also sought to quash a subsequent Request for Proposal (RFP) tender notification (No.13.5A/APMSIDC/2020-21 dated 29.10.2020) for the same purpose. The petitioner alleged irregularities in the initial tender process, including the consideration of technically unqualified bidders and post-tender negotiations with a lower-ranked bidder (M/s. Vsoft Technologies Pvt. Ltd.). The respondents contended they had the right to cancel the tender process at any stage, citing G.O.Ms.No.79 as the primary reason for cancellation, which mandated reverse tendering for procurements above Rs.1.00 Cr.

Key Issues

1. Whether the cancellation of tender notification No.6.1A/APMSIDC/2020-21 dated 06.08.2020 by the 2nd respondent was illegal, arbitrary, and against the provisions of law, particularly in light of alleged post-tender negotiations with M/s. Vsoft Technologies Pvt. Ltd. and the subsequent issuance of RFP tender No.13.5A/APMSIDC/2020-21 dated 29.10.2020. Petitioner's arguments: The petitioner argued that the respondents acted arbitrarily by cancelling the tender after allegedly engaging in post-tender negotiations with M/s. Vsoft Technologies Pvt. Ltd., which violated CVC guidelines. They contended that the respondents' actions deprived them of the opportunity to secure the contract. They also raised concerns about the validity of the subsequent RFP tender. Respondents' arguments: The respondents argued that they possessed an "uninhibited" right to cancel any tender process at any time prior to the award of the contract, as stipulated in Clause 6.18 of the tender document. They asserted that the cancellation of the second tender was primarily due to the issuance of G.O.Ms.No.79, which mandated reverse tendering, and that there was no malice or arbitrariness in their actions. They also argued that G.O.Ms.No.79, even if issued after the tender was floated, was applicable as the contract had not been concluded.