Lupin Gases Private Limited vs. Union Of INDIA

Facts

The petitioner, Lupin Gases Private Limited, participated in an e-tender floated by South Eastern Central Railway (SECR) for the supply of Dissolved Acetylene Gas. The petitioner qualified for the financial bid and was declared L-1. Following this, the petitioner was invited for negotiations, and subsequently, SECR issued a counter-offer with reduced quantities and prices, exclusive of GST. The petitioner could not accept this counter-offer. Without issuing any notice or providing an opportunity for hearing to the petitioner, SECR issued a fresh e-tender for the same item. The petitioner filed a writ petition challenging this fresh tender, seeking its quashing and requesting consideration of their negotiated rates from the previous tender.

Held

The Court held that the issuance of the impugned fresh e-tender No. 08241051A dated 21.10.2024, without any notice, information, and opportunity of hearing to the petitioner Company, is bad in law. The Court reasoned that the petitioner had participated in the tender, was declared L-1, and was subsequently called for negotiation. The comparison of the petitioner's rates with the 2023 purchase order was deemed baseless and irrelevant due to changed market conditions. Forcing the L-1 bidder to accept an unconditional counter-offer, failing which it was presumed they were not interested, was considered a clear violation of Article 14 and 19(1)(g) of the Constitution. Relying on the Supreme Court's judgment in Ramana Dayaram Shetty, the Court quashed the fresh e-tender. The respondents were directed to consider the petitioner's offer/negotiated rates for the procurement of Dissolved Acetylene Gas pursuant to the previous tender. The writ petition was allowed to this extent.

Key Issues

1. Whether the issuance of a fresh e-tender by SECR (respondent) for the same item, without providing notice or an opportunity of hearing to the L-1 bidder (petitioner), is illegal and arbitrary, violating principles of natural justice and constitutional provisions (Article 14, 16, and 19(1)(g))? Petitioner's Arguments: - The action of issuing a fresh tender without notice to the L-1 bidder is illegal, arbitrary, and in violation of professed norms, Railway Board circulars, and constitutional rights. - Declaring the petitioner as L-1 and inviting them for negotiation implies a deemed acceptance of their offer. Floating a new tender without rejecting the original offer is contrary to contractual jurisprudence. - The subsequent tender being for a higher quantity than the counter-offer, while the scope of work remained the same, is also a violation of legal principles. - Reliance was placed on the Supreme Court judgment in Ramana Dayaram Shetty Vs. International Airport Authority of India. Respondents' Arguments: - After evaluating the financial bid, the Tender Committee found the petitioner's quoted price to be significantly higher (16-18%) than the last purchase order in 2023. - Negotiations resulted in a negligible reduction (0.36%) in the basic rate by the petitioner. - The Tender Committee discussed the rates further.