National Management Training Institute vs. State Of Maharashtra

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CP/255/2023HC BombayGSTCNR HCBM01025480202306 February 2025Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SMT. JUSTICE BHARATI DANGRE10 pages

AI SummaryDismissed

Facts

The Petitioner, M/s. Food Safety Services, challenged the rejection of its technical bid for a tender floated by the Directorate of Primary Education (Respondent No. 2) for training cooks and helpers under the Mid-Day Meal Scheme. The tender required bidders to submit various documents, including GSTR 1 and GSTR 3B, audited balance sheets, and CA turnover certificates. The Petitioner's bid was rejected on March 29, 2023, with the reason cited being the absence of UDIN on each page of the submitted documents. The Petitioner contended that this was not a stipulated requirement and that Respondent No. 3, Shree Analytical Testing and Research Laboratory, whose bid was accepted, suffered from a conflict of interest and lacked necessary experience. The Petitioner had previously filed a writ petition before the Nagpur Bench, which was dismissed on jurisdictional grounds on May 3, 2023. Subsequently, a work order was issued to Respondent No. 3 on May 4, 2023. A contempt petition was also filed alleging disobedience of a previous order dated April 25, 2023, in a related writ petition.

Held

The Court held that the writ court should refrain from interfering with the decision-making process of the tendering authority, especially when the work has already been accomplished and payments disbursed. The Court noted that its scope of judicial review is limited to examining the decision-making process for arbitrariness, irrationality, unreasonableness, bias, or malafides, none of which were found to be present. The Petitioner's challenge based on the alleged infraction of clause 4.4.3.1 of the Government Resolution was also dismissed, as the clause pertains to the minimum number of bidders required for a tender to be competent. In this case, five bids were received, but only one qualified technically. The Court found no willful breach of the order dated April 25, 2023, in the contempt petition, based on the affidavits filed by the Respondents. Therefore, the Writ Petition was disposed of, leaving it open for the Petitioner to seek compensation from the appropriate forum, and the Contempt Petition was dismissed.

Key Issues

1. Whether the rejection of the Petitioner's technical bid was arbitrary and without proper justification, violating the tender conditions and principles of natural justice? 2. Whether Respondent No. 3's technical bid was wrongly accepted due to a conflict of interest and lack of State-level experience, as alleged by the Petitioner? 3. Whether the Respondents acted in undue haste in issuing the work order to Respondent No. 3 immediately after the dismissal of the Petitioner's earlier writ petition? 4. Whether the Respondents willfully breached the order dated April 25, 2023, warranting contempt proceedings? Petitioner's Arguments: The Petitioner argued that the rejection of its bid was improper as no reasons were disclosed initially and the stated reason (lack of UDIN on each page) was not a mandatory requirement of the tender. It was contended that Respondent No. 3 had a conflict of interest as it was both a mid-day meal caterer and a testing agency involved in the same scheme, and its technical bid was flawed. The Petitioner also highlighted the undue haste in issuing the work order post-dismissal of its earlier petition. Reliance was placed on the Government Resolution dated December 1, 2016, regarding office procedures for procurement. Respondents' Arguments: The State Authorities argued that the Petitioner failed to qualify the technical criteria, and its bid was rejected accordingly. They contended that since the work has been awarded and implemented by Respondent No. 3, the Petitioner's remedy lies in claiming damages for alleged breach of tender terms or violation of rules. They relied on a previous judgment of the High Court in WP No. 5420/2023, which declined interference in a similar tender process. Regarding the contempt petition, the Respondents denied any deliberate or willful breach of the court's order.

Sections Cited

Section 4.4.3.1

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

17-CP-255-2023.doc rajshree IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6137 OF 2023 M/s.Food Safety Services ] .. Petitioner vs. State of Maharashtra & Ors. ] .. Respondents ALONGWITH CONTEMPT PETITION NO.255 OF 2023 IN WRIT PETITION NO.5420 OF 2023 National Management Training Institute ] .. Petitioner vs. State of Maharashtra & O Rs. ] .. Respondents Mr.Aseem Naphade i/b Law Loyals for the Petitioner in CP No.255/2023. Mr.Aseem Naphade a/w Ms.Kausar Banatwala and Ms.Neuty Thakkar i/b Mr.Tushar Goradia for the Petitioner in WP No.6137/2023. Mr.R.M. Pethe for Respondent No.1-PMC. Mr.O.A. Chandurkar, Addl. GP a/w Mr.M.M. Pabale, AGP for Respondent No.1 and 2 in CP No.255/2023 and for Respondent No.1 in WP No.6137/2023. Mr.Aditya Chauhan a/w Mr.Aayu Saxena i/b FF and Associates for Respondent No.3 in WP No.6137/2023. CORAM : ALOK ARADHE, CJ. & BHARATI DANGRE, J. DATE : 06th FEBRUARY, 2025. 1/10 17-CP-255-2023.doc ORDER (PER BHARATI DANGRE, J) :- 1. The Petitioner, a Proprietor Firm is engaged in the business of food safety sector in Central India and it is its claim that it is a recognized fourth rank holder and Training Partner under the FosTac Training, which is intended to train and audit services of Food Business Operators , by working in close association with Food Safety and Standards Authority of India (FSSAI) and multiple State Departments. It is also the claim of the Petitioner that it had participated in the capacity building of stake holders involved in PM Poshan Scheme and Mid-Day Meal Scheme. 2. Respondent No.2- Directorate of Primary Education floated a Tender inviting Training Partners to provide training to the cooks and helpers under the Mid-Day Meal Scheme , being run under the aegis of the Central Government and being implemented through the State of Maharashtra through Directorate of Primary Education, Maharashtra State. The Scheme aimed to provide mid-day meal for students form Class I to VIII standards and since cooks and helpers in the Scheme are required to handle food, they are governed by the legislative mechanism under the Food Safety Standard Act, 2006, and, therefore, a Tender was floated on 02/03/2023 inviting the Training Partners to submit their bids for training them under the Pradhan Mantri Poshan Shakti Nirman Yojana. The Tender notice clearly stipulated the scope of the work and the State being divided into 8 divisions, rates were fixed for the training to be offered per cook. The notice inviting Tender in Clause 7 set out the documents to be furnished alongwith the bid which included the Food Safety Training 2/10 17-CP-255-2023.doc and Certification (FosTac) as well as the audited Balance-sheet for previous three years alongwith GSTR 1 and GSTR 3B. It was also necessary to furnish the CA Turnover Certificate for last three financial years alongwith valid UDIN and also the Income-Tax Returns. 3. The Petitioner submitted its bid pursuant to the Tender Notice alongwith necessary presentation and requisite documents. The Tender Summary Report in relation to the Tender Notice was uploaded on the website of the Government on 29/03/2023 at 2.35 p.m., which reflected that the technical bids of four bidders including the Petitioner was rejected, whereas, the bid of Shree Analytical Testing and Research Laboratory (Respondent No.3) came to be accepted. 4. It is the grievance of the Petitioner that rejection of his Technical Bid is highly improper as no reasons were disclosed, while rejecting the same and, therefore, the Petitioner has raised a challenge to the technical Summary Report dated 29/03/2023. The Petition contain a specific averment to the effect that Respondent No.3 whose technical bid was validated, in fact, suffered from various lacunas and it is specifically pleaded in the Petition that Respondent No.3 lacks State level experience and while admitting its technical bid, Respondent No.2 overlooked that there was conflict of interest resulting in several complaints being made against Respondent No.3 by the Bidders whose technical bids were rejected, as well as by the Members of Legislative Assembly from Wardha and Nagpur. The conflict of interest is projected by submitting that Respondent No.3 in its bid, to get better scoring, as per tender criteria had disclosed that it was holding top 10 ranking under the FosTac, but this information was not true. 3/10 17-CP-255-2023.doc In any case, in short, the grievance of the Petitioner is that the technical bid of Respondent No.3 was wrongly accepted as it is evident that Respondent no.3 inasmuch as the FDI License attached in the bid, disclosed that it is a Mid-day meal caterer i.e. supply of food to the Mid-day meal Scheme and as a testing agency it is also associated with Mid-day meal Scheme for many years and now it is desirous of becoming a Training Partner in the same Scheme. It is, therefore, urged that upon the Contract being awarded in its favour, it shall be Respondent No.3, who shall cook food,teach itself how to cook food, test the food cooked and train by itself. 5. On 28/03/2023, the Petitioner received notice from Respondent No.2 informing that the technical bid finalisation meeting will be held on 29/03/2023 and zoom meeting was attended by the Petitioner and it was informed by Respondent No.2 that its bid was rejected as per Clause 7 of the Tender Notice, as the documents submitted by the Petitioner did not have UDIN on each page. Alleging that this was not the requirement as per the Tender conditions, the Petitioner alongwith the other bidders raised an objection, however, in complete ignorance of the same, the bids of four bidders were rejected retaining only one bid that is of Respondent No.3. The aforesaid action of Respondents constrained the Petitioner to approach High Court of Judicature at Bombay, Bench at Nagpur by filing Writ Petition No.2108/2023 and upon being listed before the Court on 31/03/2023, Respondent No.2 was restrained from issuing work order, if not already issued. The Respondent filed reply and raised objection about jurisdiction of the Bench in entertaining the Petition, as cause of action did not fall within its territorial jurisdiction and as a consequence of this, on 4/10 17-CP-255-2023.doc 03/05/2023 the Nagpur Bench of Bombay High Court dismissed the Writ Petition by holding that no cause of action has arisen within its jurisdiction, but reserved the liberty to approach the Principal Seat. The grievance of the Petitioner is, that immediately after the Petition was dismissed, in a due haste, the work order came to be issued in favour of Respondent No.3 on 04/05/2023 and the Petitioner raised one of the prominent ground of the undue haste being exhibited at the end of Respondent/Authorities. 6. We have heard the learned counsel Mr. Aseem Naphade for the Petitioner and Mr.R.M. Pethe for Pune Municipal Corporation. Mr.O.A. Chandurkar, Addl. GP represented the State Authorities, whereas, Mr.Aditya Chauhan represented Respondent No.3. We have heard the Writ Petition filed by the Petitioner M/s.Food Safety Services, through its Proprietor, alongwith the Contempt Petition filed by National Management Training Institute, alleging disobedience of the order dated 25/04/2023 passed in WP No.5420/2023, when its technical bid in the same tender process was held to be non responsive, by holding Respondent No.3 as the only eligible bidder. The order dated 25/04/2023 placed at Annexure B to the Contempt Petition specifically record that the objections raised by the Petitioner qua the Tender of Respondent No.3 ought to have been attended to, but the Court cannot seat in Appeal over the decision taken by the Respondents. However, directing the Respondent/ State Authorities to follow the executive instructions in the shape of Government Resolution issued from time to time and also to consider the feasibility and rates quoted by the eligible tenderers and to take a decision whether to proceed with the tender process or to issue a fresh tender, the Writ Petition was disposed off. 5/10 17-CP-255-2023.doc It is worth to note that this order was passed on 25/04/2023 before the work order in favour of Respondent No.3 was issued on 04/05/2023, but after the interim order was passed by the Nagpur Bench in WP No.2108/2023. 7. The learned counsel Mr. Naphade, in support of the Contempt Petition as well as Writ Petition has placed reliance upon the Government Resolution dated 01/12/2016 in form of Revised Manual of Office Procedures for Procurement by Government Departments and according to him the procedure prescribed therein is mandatory, as all the administrative departments were directed to issue aforesaid instructions for implementation of the procured policy. Placing reliance upon Clause 4.4.3.1 of the said Resolution, Mr. Naphade would urge that there is a clear violation of the said clause, which reads thus :- “4.4.3.1 Extension for the tender period: ……… If following situation arises while implementing the tender process, the steps mentioned below should be taken : a) If three or more tenders technically qualified, the purchase department can go ahead. b) If two tenders become technicallly qualifies, the actual purchase price and the estimated price decided earlier has a difference of (-) 20% to (+) 10%, the purchasing department has liberty to accept the same. If such price do not come under the price band then there should be re-tender. c) If no tender is received or a single tender technically qualifies, then there should be retender. For a atender value of below Rs.Ten (10) lakhs, only one time extension should be given.” 8. It is the submission of Mr. Naphade that from the technical summary report, it is evident that pursuant to the Tender Notice issued by Respondent No.2, five bids were received out of which, four were 6/10 17-CP-255-2023.doc rejected on technical ground and only one bid of Respondent No.3 was taken up for consideration and ultimately the work order was awarded in its favour. It is his submission, that in such situation, Respondent No.2 was required to issue fresh Tender notice, but instead of doing so, it issued work order in favour of Respondent No.3. 9. By relying upon the decision delivered in WP No.5420/2023 in case of National Management Training Institute vs. State of Maharashtra & Ors. Dated 25/04/2023, it is his submission that the Government Resolution which is in form of executive instructions, ought to be followed, but there was no adherence to the same and no regard was paid to the observations of the Division Bench in Para 9 of

the said order. In addition, it also submission of Mr. Naphade that rejection of the technical bid of the Petitioner is also erroneous since the index of its bid clearly indicate that audited balance-sheet for the financial year 2021- 2022 was annexed therewith and it even indicated the UDIN being 23185882 BGYVGZ5254. By referring to the Affidavit in Reply filed by Respondent No.2, Mr. Naphade would submit that there is no denial of the Petitioner’s assertion in the Petition that Audited balance-sheets were duly submitted with the UDIN.

10.

The Additional Government Pleader representing Respondent Nos.1 and 2 would rely upon the Affidavit filed, traversing the pleading in the Petition and he would submit that the Petitioner was one of the bidders in the Expression of Interest (EOI), but it could not qualify the technical criteria and, therefore, its bid was rejected and as of now when the work is awarded to Respondent No.3, who has already 7/10

17-CP-255-2023.doc implemented the work, the only remedy available to the Petitioner is to claim damages for the alleged breach of the terms of the Tender or the alleged violation of the Rules formulated governing the tender process. Reliance is placed upon the decision delivered by this Court in WP No.5420/2023 filed by National Management Training Institute vs. State of Maharashtra & Others, which had refused to entertain the objection pressed and no interference was shown in the tender process. The learned Additional Government Pleader has placed before us a Chart reflecting the districts in which the training was imparted in furtherance of the work order issued in favour of Respondent No.3 and this include 35 districts and we are informed that training is provided to 132909 cooks/helpers under the Mid-day Meal Scheme and a sum of Rs.7,24,69,800/- is disbursed in favour of Respondent No.3. 11. In the wake of the aforesaid development, which is brought to our notice, we understand the futility of entertaining the challenge in the Petition as the work allotted to Respondent No.3 is already accomplished and the payment is already disbursed in its favour. The rejection of the technical bid of the Petitioner was on the ground that it did not comply with the requisite conditions and it being a well settled position in law that the writ court shall refrain itself from imposing its decision over the decision of the Tendering Authority, as to whether or not to accept the bid, since this Court do not possess any expertise to examine the niceties of the terms and conditions in the wake of several activities being carried out by the State. In N.J. Projects Ltd. vs. Vinod Kumar Jain & Ors.1 the Apex Court observed thus : 1 (2022)6 SCC 127 8/10

17-CP-255-2023.doc “23.

In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.”

12.

It being a settled position that it is not the decision of the Tendering Authority, which is subject to examination in exercise of the powers of judicial review, but the limited scope available is to examine the decision making process. The scope of judicial review of an administrative action in a manner relating to tender/award of contract is very minimal and exercise of the power of judicial review is permitted only when it is intended to prevent arbitrariness, irrationality, unreasonableness or the action is actuated with bias and malafides. We do not find any such element present, which would warrant our interference . The only ground on which the Petitioner has called in question, the decision making process of Respondent No.2 is infraction of clause 4.4.3. 1. When we adverted our attention to the said clause, even this challenge must fall as the said clause contemplate that minimum three bidders are required to make the tender competent and if less than three bidders take part, extension of one week should be granted on two occasions, but not thereafter. 9/10

17-CP-255-2023.doc

13.

In this case, there were five bids received, of which only one has technically qualified and considering the nature of the project, the work was allotted in favour of the said bidder, who has now even accomplished the task assigned to it. In the wake of aforesaid circumstances, Writ Petition before us at this point of time do not deserve any consideration, and leaving it open to the Petitioner to seek compensation by approaching the appropriate forum, we deem it appropriate to dispose of the Writ Petition.

14.

As far as Contempt Petition, alleging disobedience of the order passed by the Division Bench of this Court on 25/04/2023 is concerned, we have perused the Affidavit filed on behalf of Respondent Nos.1 and 2 and on its reading we are unable to be persuaded by the fact that there is deliberate or willful breach of the directions issued by this Court on 25.04.2023. For this reason, we decline to entertain the Contempt Petition and drop the proceedings. (BHARATI DANGRE, J.) (CHIEF JUSTICE) 10/10

Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.