M/S Piyush Construction vs. South Eastern Coalfields Limited

Facts

The petitioner, M/s Piyush Construction, filed a writ petition challenging its technical disqualification for a tender floated by South Eastern Coalfields Limited (SECL) for constructing a parking yard. The petitioner was declared ineligible for opening its price bid due to alleged discrepancies in its financial turnover certificates. The tender required an average annual financial turnover of at least 30% of the estimated cost. The petitioner submitted its bid with Chartered Accountant certificates for FYs 2020-21, 2021-22, and 2022-23, and provisional figures for FY 2023-24 in the Bid Submission Confirmation (BSC). While other bidders were given an opportunity to rectify deficiencies, the petitioner was initially not informed. Subsequently, the petitioner was granted time to upload the final turnover certificate for FY 2023-24, which it did. However, the Tender Committee declared the petitioner technically ineligible, leading to respondent No. 4 being declared L-1. The petitioner argued the action was arbitrary and discriminatory, as similar certificates were accepted previously, and even without FY 2023-24 turnover, it met the criteria.

Held

The Court held that the decision of the Tender Committee was a plausible and reasoned administrative determination taken in accordance with the Notice Inviting Tender (NIT) and did not suffer from arbitrariness, irrationality, or procedural impropriety. The Court applied the settled principles of judicial review in tender matters, emphasizing that courts should not interfere unless the decision-making process is arbitrary, irrational, mala fide, or in violation of statutory provisions. The Court found that the eligibility criterion under Clause 8(B) of the NIT required accurate declaration of financial turnover in the Bid Submission Confirmation (BSC), supported by consistent confirmatory documents. The petitioner's declaration in the BSC for FY 2023-24 was inconsistent with the subsequently uploaded turnover certificate. The Court reasoned that in an e-procurement system, the online declaration forms an integral and binding part of the bid, and confirmatory documents are meant to substantiate, not materially alter, essential particulars. Accepting inconsistent documents would amount to permitting post-bid modification of a material term, which is impermissible and compromises the competitive process. The argument that the petitioner met the threshold even without FY 2023-24 turnover was rejected, as voluntarily incorporated figures in the BSC are subject to verification. The Court noted that the Tender Committee had deliberated, obtained legal opinion, and that the petitioner failed to demonstrate bias or malafides. The plea of discrimination based on past acceptance of similar documents was also dismissed, citing the principle that there is no estoppel against tender conditions. Therefore, the writ petition was dismissed.

Key Issues

1. Whether the Tender Committee's decision to declare the petitioner technically ineligible for the tender suffers from arbitrariness, mala fides, procedural impropriety, or patent illegality, warranting interference under Article 226 of the Constitution of India, particularly concerning Clause 8(B) of the Notice Inviting Tender (NIT) regarding financial turnover criteria? Petitioner's Arguments: - The disqualification was arbitrary, discriminatory, and violated the terms of the NIT and principles of natural justice. - Other bidders were given opportunities to rectify deficiencies, but the petitioner was not initially informed. - Even excluding the turnover for FY 2023-24, the petitioner met the minimum average turnover requirement. - Similar turnover certificates had been accepted by SECL in previous tenders. - There was no specific condition in the NIT mandating disqualification for discrepancies between the BSC declaration and confirmatory documents. Respondents' Arguments: - The Tender Committee's decision was a reasoned administrative determination made in accordance with the NIT and after obtaining legal opinion. - The online declaration in the BSC is an integral and binding part of the bid, and confirmatory documents cannot materially alter essential particulars. - Allowing inconsistent documents would permit post-bid modification of material terms, compromising the integrity of the process. - Discrepancies in financial credentials are not minor defects and essential tender conditions must be strictly complied with. - There is no concept of estoppel against tender conditions, and each tender process is independent. - Judicial review in tender matters is limited to the decision-making process, not the merits of the decision, and interference is only permissible if the decision is arbitrary, irrational, mala fide, or in violation of statutory provisions.