Larsen And Toubro Limited vs. The State Of Bihar And Ors

Held

The Court held that the PSCL authorities did not err in allowing the removal of discrepancies in the bids. It reasoned that the parties involved, including the Petitioner, Respondent No. 4, and the employer (PSCL), all interpreted the RFP provisions to allow for the removal of discrepancies. The Petitioner itself availed of an opportunity to correct a discrepancy in its bid (quantity of mounting structure with junction boxes), indicating that the Petitioner also considered Clause 2.21 to be illustrative rather than exhaustive. The Court found that the scheme of the RFP permitted corrections of discrepancies for both parties. Furthermore, the Court noted that the correction resulted in the selection of the lowest bidder, and the accepted rate was above the project cost, thus acting in furtherance of public interest. The Court also observed that the Petitioner made no specific allegations of mala fide. Therefore, the Court found no reason to interfere with the discretion exercised by the authorities in rejecting the Petitioner's price proposal.

Facts

Larsen and Toubro Limited (Petitioner) filed a writ petition challenging the rejection of its price proposal for a contract to implement integrated smart solutions at Patna, awarded to M/s Tata Projects Ltd. (Respondent No. 4). The Petitioner and Respondent No. 4, along with three others, submitted bids. All bidders qualified technically. The Petitioner's initial total price bid was INR 474.0851623.80 Crores, while Respondent No. 4's was INR 483.7172863.52 Crores. The Petitioner contended that Respondent No. 4's higher bid should have been rejected as 'unresponsive' and that Respondent No. 4 was improperly allowed to revise its bid, making it lower than the Petitioner's. The Petitioner argued this constituted an unfair process and a violation of CVC guidelines and Clause 2.21 of the Request for Proposal (RFP).

Key Issues

1. Whether the Patna Smart City Limited (PSCL) authorities acted arbitrarily and unfairly by allowing Respondent No. 4 to revise its total price bid after submission, contrary to the RFP and CVC guidelines, thereby prejudicing the Petitioner? Petitioner's arguments: The Petitioner argued that Respondent No. 4's initial higher bid should have been declared unresponsive. Allowing Respondent No. 4 to revise its bid post-submission, especially when it resulted in a lower price, constituted an unfair process and violated Clause 2.21 of the RFP, which limits the scope of corrections. They also cited CVC guidelines against post-tender negotiations. The Petitioner contended that Clause 2.21 (a), (b), and (c) were exhaustive, and Respondent No. 4's correction fell outside these parameters. Revenue/State's arguments: The judgment does not explicitly record arguments from the State or Respondent No. 4 regarding this specific issue. However, the Court's reasoning implies that the authorities acted within their discretion as per the RFP.