Ms Dev Prabha Construction PVT LTD Through Its Authorized Signatory Vikash Kumar Singh vs. The Bharat Coking Coal Limited Through Its Chairman Cum Managing Director

Held

The Court held that the cancellation of the tender by BCCL was not erroneous. It agreed with the respondent's submission that the Notice Inviting Tender (NIT) is an invitation to offer and does not confer an absolute right upon the bidders. The Court found no error in the decision-making process. It noted that Clause 34 of the ITB, concerning the revocation of the tender process, was discretionary. The Court also relied on the clarification from the National Informatics Centre (NIC), an expert body, regarding a technical error in the system that influenced the outcome of the bidding. Based on this expert opinion, the decision to cancel the tender under Clause 35 of the NIT, rather than resorting to Clause 34, was deemed justified and not an error in the decision-making process. The Court also found no mala fide on the part of the respondent authority. The learned Single Judge's decision to uphold the tender cancellation was affirmed, and the appeal was dismissed. The Court did not expressly leave any issue undecided.

Facts

M/s Dev Prabha Construction Pvt. Ltd. (the appellant) was the highest bidder (L-1) in a tender process initiated by Bharat Coking Coal Limited (BCCL) for coal transportation. The tender, initially invited on January 28, 2020, with an estimated cost of Rs. 153,36,29,906, involved a reverse auction process. The appellant, after being declared L-1, offered further rebates, bringing its final quoted price to Rs. 162,90,34,128. However, BCCL, through an order dated June 17, 2020, cancelled the tender, citing technical reasons. The appellant challenged this cancellation order before the High Court, which was dismissed by a learned Single Judge. This intra-court appeal was filed against the Single Judge's order.

Key Issues

1. Whether the cancellation of the tender by BCCL was arbitrary and contrary to the terms and conditions of the Notice Inviting Tender (NIT), specifically Clause 34 (revocation of tender process) and Clause 35 (cancellation of tender)? Petitioner's arguments: The petitioner contended that having been declared L-1 after a transparent process, they were entitled to the contract. They argued that the cancellation was based on a mere mistake or technical error in the reverse bidding process, and BCCL should have resorted to Clause 34 of the ITB (Instructions to Bidders) for revocation at an earlier stage, not cancellation under Clause 35. They also alleged that the bid of M/s Om Sharda Logistics Pvt. Ltd. was defective due to an incorrect GST rate (5% instead of 12%) and should not have been included in the reverse auction. The petitioner argued that the tender process was fair and reasonable and should not have been arbitrarily aborted. Respondent's arguments: BCCL argued that a Notice Inviting Tender is an invitation to offer, and participation does not create an inherent right. They contended that they retained the option to cancel the tender. They also submitted that the National Informatics Centre (NIC), as an expert body, clarified an error in the technical system that led to the petitioner being declared L-1, justifying the decision to cancel the tender under Clause 35.