M/S United Air Express, Through Its Partner Mr. Dinesh Kumar Sonthalia vs. Steel Authority Of INDIA Limited, Through Is Chairman

Facts

The petitioner, M/s United Air Express, filed a writ petition challenging the rejection of its bid offer by Steel Authority of India Limited (SAIL) for the "Comprehensive Outsourcing Services – MRD" work at its Bokaro Steel Plant. SAIL initially found the petitioner technically ineligible via emails dated March 11, 21, and 26, 2026, citing a lack of required experience in excavating slag pits and processing slag in a single work order with self-attestation. Despite the petitioner submitting a work completion certificate from Tata Steel Limited, SAIL maintained its decision and formally rejected the bid on March 31, 2026. A reverse auction was subsequently held on April 1, 2026, where FSNL Private Limited was declared L1. The petitioner sought to set aside SAIL's decisions, the reverse auction outcome, and requested a fresh reverse auction with its participation.

Held

The Court held that the petitioner's bid was rightly rejected as technically ineligible. The Court found no merit in the petitioner's argument that the bid invitation did not require experience in a single work order, stating that the decision-making process was fair and transparent and not arbitrary or unreasonable. The Court referred to precedents like Kimberley Club Pvt. Ltd. and Afcons Infrastructure, emphasizing that courts exercising judicial review do not sit in appeal over the tendering authority's decisions unless they are de hors the terms of the NIT or patently arbitrary. The Court found no evidence of mala fides or perversity in SAIL's interpretation of the tender documents. Regarding the discrimination claim, the Court found it difficult to hold, on a prima facie basis, that the eligibility conditions for other plants were identical or that the scope of works was similar. The Court concluded that the impugned decision was not perverse, mala fide, discriminatory, or actuated by undue favouritism, and therefore, there was no scope for interference. The petition was dismissed.

Key Issues

1. Whether the petitioner was technically ineligible for the bid invitation on the grounds that it did not possess the required experience in excavating slag pits and processing slag in a single work order, as contended by SAIL? The petitioner argued that the bid invitation did not explicitly require experience in a single work order and that its experience, gained through two work orders for a single project for Tata Steel Limited, satisfied the criteria. The petitioner also argued that even a single work order it submitted (No. 3000139124/102) for excavation and processing of slag had a value significantly exceeding the requirement. The petitioner further contended that SAIL had deemed it eligible for similar bids at its Burnpur and Durgapur plants, alleging discriminatory treatment and violation of Article 14 of the Constitution. SAIL argued that its interpretation of the bid invitation terms was correct and that the petitioner's experience did not meet the stipulated criteria. SAIL also contended that the eligibility criteria for different plants might not be identical and that the court should defer to the tendering authority's interpretation.