Digdarshi Women Group vs. State Of Chhattisgarh

Facts

The petitioner, Digdarshi Women Group, challenged the cancellation of tender proceedings by the Municipal Corporation, Bilaspur. Two writ petitions were filed concerning System Tender No. 64880 (NIT No. 1012) and System Tender No. 64896 (NIT No. 18), both for the supply of labourers and supervisors. The petitioner participated in the tender, was technically qualified, and quoted the lowest price. However, the tender was cancelled after a complaint was received alleging a relative of the petitioner was working within the Municipal Corporation. The petitioner contended that the cancellation was arbitrary and that the alleged relative was engaged through a placement agency, not directly employed. The Municipal Corporation argued that the cancellation was due to unavoidable circumstances and that the petitioner's previous contract had been terminated due to unsatisfactory services.

Held

The Court held that while the grounds taken for rejecting the petitioner's bid were not correct, it would not interfere with the Municipal Corporation's action of cancelling the entire tender proceedings and calling for fresh tenders. The Court reasoned that the Municipal Corporation had pleaded in its additional return that it had issued several notices to the petitioner regarding unsatisfactory services in an earlier contract, which led to its termination, and these pleadings were not controverted by the petitioner. Therefore, the Court restrained itself from exercising its extraordinary jurisdiction under Article 226 of the Constitution of India to interfere with the action and proceedings of the Municipal Corporation. However, considering that the petitioner would be eligible to participate in fresh tender proceedings, the Court directed the Municipal Corporation to provide an opportunity to the petitioner to participate in the fresh tender by extending the dates for submission and opening of bids through a corrigendum. The Court also imposed a cost of Rs. 10,000/- on the Municipal Corporation for its conduct in the tender proceedings.

Key Issues

1. Whether the cancellation of the tender proceedings by the Municipal Corporation, Bilaspur, for System Tender No. 64880 (NIT No. 1012) and System Tender No. 64896 (NIT No. 18) was arbitrary and unjustified, thereby warranting interference by this Court under Article 226 of the Constitution of India? Petitioner's Arguments: - The cancellation of the tender proceedings was arbitrary and occurred after the price bids were opened, revealing the petitioner as the lowest bidder. - The reason for cancellation, based on a complaint about a relative working in the Municipal Corporation, was unfounded as the relative was engaged through a placement agency. - The bids were opened on a date different from the scheduled date without proper notification. - The Municipal Corporation's action of cancelling the tender after opening price bids prejudiced the petitioner's chances in any subsequent tender. Respondents' Arguments: - The cancellation of the tender proceedings was due to unavoidable circumstances. - The Municipal Corporation had issued several notices to the petitioner regarding unsatisfactory services in a previous contract, which led to its termination. - The Court should not interfere in tender and contract matters unless there is a clear case of illegality, irrationality, or procedural impropriety, keeping in mind public interest.