M/S Shri Buildcon Builders And Developers vs. Central Mine Planning And Design Institute Limited (Cmpdi)

Facts

The petitioner, M/s Shri Buildcon Builders And Developers, participated in a tender floated by Central Mine Planning And Design Institute Limited (CMPDI) for the construction of a sports complex. The Notice Inviting Tender (NIT) stipulated that the estimated cost was inclusive of GST and required bidders to submit relevant GST documents. The petitioner, quoting Rs. 2,10,98,725.50 including GST, was the L1 bidder. However, M/s SD JV quoted Rs. 1,99,83,837.71 without GST and incorrectly selected the 'GST Unregistered Category'. The e-procurement system mechanically identified SD JV as L1. The petitioner represented this discrepancy to CMPDI. Subsequently, the Tender Committee recommended rejecting SD JV's bid due to incorrect GST category selection and recommended cancelling the entire tender, as there was no provision to award to the L2 bidder. The petitioner protested the cancellation and the subsequent fresh tender.

Held

The Court held that the cancellation of the tender process and the issuance of a fresh tender were justified. The Court reasoned that it was not a case where the petitioner's candidature was rejected, but rather the entire tender process was cancelled due to a system-generated fault leading to an erroneous L1 bidder. The respondents discovered an error in the scrutiny of the documents submitted by the bidder declared L1. In such circumstances, the respondents were fully justified in cancelling the entire tender process and issuing a second call for tenders. The Court cited judgments like Jagdish Mandal v. State of Orissa and Central Coalfields Limited vs. SLL-SML (Joint Venture Consortium) to emphasize judicial restraint in interfering with administrative decisions in tender matters, provided the process is not mala fide, arbitrary, or irrational. The Court noted that the petitioner was at liberty to participate in the fresh NIT if they fulfilled its terms and conditions. No issue regarding the specific GST provisions or rules was expressly left undecided, but the court's decision implicitly upheld the respondents' right to cancel the tender based on their interpretation of the NIT and the discovered error.

Key Issues

1. Whether the cancellation of the tender and the subsequent fresh tender by CMPDI, despite the petitioner being the L1 bidder, is arbitrary and irrational, violating principles of fairness and Article 14 of the Constitution? 2. Whether the Tender Committee's recommendation to cancel the tender, instead of awarding it to the L2 bidder (petitioner), was justified given the identified discrepancies in the L1 bid? Petitioner's arguments: The petitioner argued that they were the rightful L1 bidder as per the NIT's terms, which required bids to be inclusive of GST. They contended that SD JV's bid was invalid due to quoting without GST and selecting the wrong GST category, making their mechanical L1 status incorrect. The petitioner relied on the principle that tender processes must be fair and transparent, citing judgments like Jagdish Mandal v. State of Orissa and Mihan India Ltd. vs. GMR Airports Ltd. They asserted that the cancellation was arbitrary and irrational, as the NIT did not preclude awarding to the L2 bidder in such circumstances. Respondents' arguments: The respondents, relying on Central Coalfields Limited vs. SLL-SML (Joint Venture Consortium), argued that the decision of the employer regarding the essentiality of NIT terms should be respected. They contended that if an error was found in the scrutiny of the L1 bidder's documents, cancelling the tender and issuing a fresh NIT was a justified administrative action, especially if no favoritism was shown. They maintained that the cancellation was not arbitrary, as the petitioner could participate in the new tender.