M/S Offshore Infrastructures Limited vs. State Of Chhattisgarh

Facts

M/s Offshore Infrastructures Limited (Petitioner) filed a writ petition challenging Clause 1.3(b) of Notice Inviting Tender (NIT) No. 01/SAC/2026-27 dated 13.05.2026, issued by the Engineer-in-Chief, Water Resources Department, Chhattisgarh. This clause required an average annual turnover of not less than two times the estimated project cost. The Petitioner was disqualified based on this clause and for not filing Annexure XI in the prescribed format. The Petitioner also questioned the rejection of objections during the Pre-Bid Conference and the subsequent declaration of Dilip Buildcon Limited (Respondent No. 5) as the L-1 bidder. The estimated project cost was ₹2,54,986.22 Lakhs (exclusive of GST). The Petitioner sought quashing of the NIT clause, disqualification of Respondent No. 5, and consideration of its technical bid.

Held

The Court held that the Petitioner failed to make out a case for interference under Article 226. Regarding Issue 1, the Court found that the Petitioner could not demonstrate arbitrariness, irrationality, or violation of constitutional mandates in Clause 1.3(b), stating that the employer is the best judge of its requirements and judicial review is limited to the decision-making process, not commercial wisdom. The Petitioner's participation without protest in the tender process, including not attending the Pre-Bid Conference, weakened its challenge. The Court also noted that the Petitioner had altered the prescribed format of Annexure XI, which was a mandatory requirement with a caution against deviation, leading to disqualification. On Issue 4, the Court held that the challenge to Respondent No. 5's eligibility was not persuasive, as the Tender Evaluation Committee had examined the experience certificates and found Respondent No. 5 technically qualified. The Court emphasized that in the absence of demonstrable perversity or patent illegality, it would not sit in appeal over the expert committee's technical assessment. The Court cited several Supreme Court judgments, including Banshidhar Construction Pvt. Ltd., Tata Cellular, and Afcons Infrastructure, to reinforce that courts should not rewrite tender conditions or substitute their commercial and technical assessments for those of the employer. The Petitioner's grievance was seen as an attempt to rewrite tender conditions and substitute the court's judgment for the employer's, which is impermissible. The writ petition was dismissed.

Key Issues

1. Whether Clause 1.3(b) of the NIT, prescribing an average annual turnover of not less than two times the estimated project cost, is arbitrary, irrational, unreasonable, and violative of Articles 14 and 19(1)(g) of the Constitution of India? The Petitioner argued that this condition was excessively high and restrictive, hindering fair competition. The State contended that such conditions are within the employer's commercial wisdom and necessary for ensuring the capability of bidders for large-scale projects. 2. Whether the rejection of objections raised against Clause 1.3(b) during the Pre-Bid Conference, without assigning reasons, was arbitrary and violative of principles of fairness and transparency? The Petitioner argued that the lack of reasoned rejection demonstrated arbitrariness. The State did not record specific arguments on this point, but the overall defense implied adherence to tender procedures. 3. Whether the Petitioner's technical bid was wrongly disqualified on multiple grounds, including non-compliance with Clause 1.3(b) and the format of Annexure XI? The Petitioner contended that its disqualification was a consequence of an arbitrary eligibility condition and that its Annexure XI submission should have been accepted. The State argued that the disqualification was based on express tender conditions, including the format of Annexure XI, and that the Petitioner had altered it. 4. Whether Respondent No. 5 was ineligible and should have been disqualified? The Petitioner alleged non-compliance by Respondent No. 5 with tender conditions. The State argued that the Tender Evaluation Committee, as an expert body, had assessed Respondent No. 5's technical qualifications and found them compliant, and that judicial review should not substitute this assessment.