Shambhu Prasad And Associates Through Its Proprietor Shambhu Prasad vs. The State Of Bihar And Ors

Held

The Court held that the petitioner's writ application was frivolous and dismissed it. The Court found that the petitioner admitted to not fulfilling the essential conditions stipulated in the tender document, which included requirements for firm description, competency, capacity certificates, TIN/VAT/Service Tax, three years of experience, and audited turnover. The Court noted that the petitioner challenged the tender conditions belatedly, almost a year after the work was awarded to the private respondents, and after admitting their inability to meet the tender requirements. The Court also addressed a discrepancy regarding the technical bid opening date, finding the petitioner's claim that it was opened a day prior to the stipulated date to be incorrect, as the bid was opened on the correct date in the presence of all bidders, including the petitioner's representative. The Court, while considering imposing costs for frivolous litigation, refrained from doing so.

Facts

The petitioner, Shambhu Prasad and Associates, a firm of Chartered Accountants, filed a writ petition challenging the tender process initiated by the Bihar Horticulture Development Society for selecting Chartered Accountant firms. The petitioner was disqualified at the technical bid stage. The petitioner argued that they were not given an opportunity to rectify shortcomings in their bid. The State and private respondents contended that the petitioner participated knowing the tender conditions, which included requirements for firm description, competency, capacity certificates, TIN/VAT/Service Tax, three years of experience, and audited turnover. The petitioner admitted not fulfilling these conditions. The petition was filed approximately one year after the tender was finalized in favour of respondents 6 and 7, who were already working. The Court noted a discrepancy regarding the date of opening of the technical bid, which the petitioner's counsel admitted might have been a mistake.

Key Issues

1. Whether the rejection of the petitioner's bid at the technical stage without an opportunity to rectify shortcomings was arbitrary and illegal, violating principles of natural justice, particularly in light of the tender conditions requiring specific documentation like firm description, competency, capacity certificates, TIN/VAT/Service Tax, three years of experience, and audited turnover? Petitioner's Argument: The petitioner argued that their bid was rejected without being given a chance to correct any deficiencies, which amounts to a violation of natural justice. They contended that the tender process itself was flawed. Revenue/State's Argument: The State and private respondents argued that the petitioner was aware of the tender conditions and failed to comply with them. They further submitted that the petitioner participated in the tender process, was aware of their disqualification at the technical stage, and challenged the tender process belatedly, approximately one year after the finalization of the tender and commencement of work by the selected firms.