Loadstar Equipment LTD vs. Container Corporation Of INDIA LTD.

Facts

The Petitioner, Loadstar Equipment Ltd., filed a writ petition challenging the technical disqualification from a tender floated by Container Corporation of India Ltd. (CONCOR) for the supply of 20 forklifts. The tender, with an estimated cost of Rs. 38,11,40,000, required bidders to meet specific qualification criteria, including experience in supplying similar items and a minimum turnover. CONCOR issued a corrigendum adding Clause 2.1(b) regarding financial turnover. The Petitioner and Respondent No. 2 were the only bidders. CONCOR sought additional documents from the Petitioner to rectify discrepancies, including issues with company name, work experience certificates, and local content certificates. The Petitioner submitted replies and documents. CONCOR subsequently disqualified the Petitioner via a communication dated 18.04.2023.

Held

The Court held that the disqualification of the Petitioner was arbitrary and violative of Article 14 of the Constitution of India. The Court found that Clause 2.1(a) of the NIT required the bidder to be a manufacturer or an authorized dealer with experience of supplying similar items. The Petitioner, being the manufacturer, had submitted a work experience certificate from M/s Arcelor Mittal Nippon Steel India Limited, which demonstrated their experience. The reason provided by CONCOR that the certificate was issued in favour of the supplier and not the manufacturer, despite the Petitioner being the manufacturer, was deemed unacceptable. The Court reasoned that a cumulative reading of Clauses 2.1, 5.4, and Annexures-10 & 11 of the NIT indicated that the manufacturer had to show successful installation of a machine, which the Petitioner had established. Furthermore, during the hearing, the Court directed CONCOR to open the Petitioner's financial bid, and it was revealed that the Petitioner was the lowest bidder. Consequently, the writ petition was allowed, and CONCOR was directed to proceed in accordance with the law.

Key Issues

1. Whether the disqualification of the Petitioner on the ground that the work experience certificate was issued in favour of the supplier (Petitioner) and not the manufacturer, despite the Petitioner being the manufacturer, is arbitrary and violative of Article 14 of the Constitution of India, particularly in light of Clause 2.1(a) of the NIT which requires the bidder to be a manufacturer or an authorized dealer with experience of supplying similar items? Petitioner's arguments: The Petitioner contended that they are the manufacturer and the work experience certificate issued by M/s Arcelor Mittal Nippon Steel India Limited clearly establishes their experience in supplying similar items, fulfilling the criteria. They argued that the disqualification based on the certificate being in favour of the supplier rather than the manufacturer, when the Petitioner is indeed the manufacturer, is an arbitrary interpretation of the tender conditions and against the principles of fairness and natural justice. They relied on the Apex Court's pronouncements on arbitrariness and the State's obligation to act fairly. Revenue/State's arguments: The Respondent (CONCOR) argued that the work experience certificate was issued in favour of the supplier and therefore could not inure in favour of the manufacturer. The judgment does not record specific arguments from the Revenue/State beyond this point.