Germanium Technologies Limited vs. Indian Oil Corporation LTD & Anr.

Held

The Court held that the Petitioner's anxiety was ill-founded and premature. The amount quoted by Respondent No. 2 did not violate the provisions of the Minimum Wages Act, 1948. The Court found no evidence to support the Petitioner's allegation of collusion between Respondent No. 2 and the L-2 bidder, noting that reverse bidding is a transparent process. The Court also referenced Apex Court judgments in Raunaq International Ltd. v. I.V.R. Construction Ltd. and Air India Ltd. v. Cochin International Airport Ltd., emphasizing that judicial intervention in contractual matters should be exercised with caution and only in furtherance of public interest, and that the award of a contract is essentially a commercial transaction where price is not always the sole criterion. The Court found Respondent No. 2 to be an astute entrepreneur who provided the best possible bid. Therefore, the Court was not inclined to interfere with the Impugned Tender or cancel the Letter of Acceptance. No specific issue was left undecided.

Facts

Germanium Technologies Limited (Petitioner) filed a writ petition challenging Tender No. HCC/L-12/PT-95/2020-21 and the subsequent Letter of Acceptance dated 17.03.2021 issued by Indian Oil Corporation Limited (Respondent No. 1) to M/s Cyfuture India Pvt. Ltd. (Respondent No. 2). The tender was for setting up call centres. In the reverse bidding process, Respondent No. 2 emerged as the lowest bidder with a bid of Rs. 14,97,44,280/- (including GST), while the Petitioner bid Rs. 19,81,74,250/- (including GST). The Petitioner alleged that Respondent No. 2's bid price was below the minimum wages mandated by the Minimum Wages Act, 1948, and contravened clauses 8.14 and 8.16 of the tender, which require compliance with statutes and labour laws. The Petitioner also alleged collusion between Respondent No. 2 and the L-2 bidder.

Key Issues

1. Whether the bid submitted by Respondent No. 2 contravenes Clauses 8.14 and 8.16 of the Impugned Tender and the Minimum Wages Act, 1948, thereby vitiating the award of the tender to Respondent No. 2? (Question of law and mixed fact and law, turning on Clauses 8.14, 8.16 of the Tender and the Minimum Wages Act, 1948). Petitioner's arguments: The bid price of Respondent No. 2 is so low that it necessitates violation of the Minimum Wages Act, 1948, and other labour laws, which is contrary to Clauses 8.14 and 8.16 of the tender. The Petitioner also alleged collusion between Respondent No. 2 and the L-2 bidder to manipulate the reverse bidding process. Respondent No. 1's arguments: The Court lacks jurisdiction as per Clause 8.10 of the tender, which vests jurisdiction in Mumbai courts. The petition is premature as no illegality has occurred. The tender process has checks and balances, and the responsibility for statutory compliance rests with the successful tenderer. Respondent No. 2 confirmed in writing to abide by all terms, including disbursing salaries as per the Minimum Wages Act. Respondent No. 2's arguments: The Court lacks jurisdiction as per Clauses 8.10 and 10.5 of the tender. The bid breakdown submitted by Respondent No. 2 demonstrates compliance with all statutory obligations. Clause 8.6 allows Respondent No. 1 to terminate the contract if a tenderer is found lacking.