M/S Anil Nathani vs. The State Of Chhattisgarh

Facts

The petitioner, M/s Anil Nathani, challenged the disqualification of its bids for a street-light installation tender issued by the Executive Engineer, Bilaspur Municipal Corporation. The petitioner participated in three calls of the tender. After the first two calls were cancelled or the petitioner's bid was declared "Non-Responsive," a third call was issued with altered eligibility conditions. The petitioner submitted a bid with fresh rental agreements and documentation. However, it was declared "Not Qualified" on the grounds of not providing ownership documents for leased machinery and certain staff documents, which the petitioner claimed were not required by the tender. The petitioner alleged that the private respondent, who was awarded the contract, had similar or more serious deficiencies but was qualified, indicating bias. The petitioner sought to set aside the disqualification order and have its bid reconsidered.

Held

The Court held that there were no grounds to interfere with the tender process or the respondent-authority's decision. The record indicated that the petitioner failed to furnish mandatory documents for the verification of major equipment, specifically RC books, purchase bills, or GST invoices of the machinery owners, as required by Clause 3 of the clarification letter dated 22.08.2025 and Annexures-5 and 10. The Court found the petitioner's contention that these documents were unnecessary to be untenable, as the tender conditions mandated proof of ownership even for leased or hired machinery. Consequently, the respondent-authority acted within the scope of the tender conditions in declaring the petitioner "Not Qualified" vide order dated 03.10.2025. Furthermore, the Court noted that the work order had been issued, work had commenced, and no mala fides or arbitrariness was established to warrant judicial interference in commercial tenders. The Court relied on Supreme Court judgments in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd. and N.G. Projects Ltd. v. Vinod Kumar Jain, emphasizing that courts should refrain from imposing their decisions over the employer's decision in tender evaluations unless there is total arbitrariness or mala fide, and that the decision-making process should be examined for compliance with tender conditions.

Key Issues

1. Whether the disqualification of the petitioner's bid by the respondent authority was arbitrary and unreasonable, violating Article 14 of the Constitution and principles of fairness and transparency in tender processes, particularly concerning the requirement for ownership documents of leased machinery and staff documents? (Question of law and fact, turning on the interpretation of tender conditions and principles of administrative law). Petitioner's arguments: The petitioner argued that its bid was rejected on untenable grounds, that the required documents for leased machinery and staff were not part of the tender requirements, and that it was the lowest bidder (L1). The petitioner contended that the private respondent, despite similar or more serious deficiencies, was qualified, demonstrating bias and arbitrariness. The petitioner relied on the principles of fairness and transparency and Article 14. Respondents' arguments: The respondents (Municipal Corporation) argued that the work order had already been issued and work commenced. They contended that Clause 3 of the clarification letter dated 22.08.2025 clearly required bidders to furnish attested ownership/lease/hire agreements for major equipment as per Annexures-5 and 10. Therefore, the petitioner's bid was rightly rejected for failing to submit RC books, purchase bills, or GST invoices of equipment owners, which were essential for verifying mandatory equipment, even for rented machinery. They argued the petition deserved dismissal.