M/S Bachchi Devi Mishra vs. Steel Authority Of INDIA LTD

Facts

The petitioner, M/s Bachchi Devi Mishra, filed a writ petition challenging an order (Annexure P-1) issued by Steel Authority of India Ltd. (SAIL). The petitioner participated in a tender floated by SAIL for cleaning drains in Bhilai Township. The tender process involved reverse auction. The petitioner claimed that the price bid opening was not properly communicated, and they were surprised to receive a work order. Upon reviewing other bidders' price bids, the petitioner alleged that all bidders quoted the same rate. The petitioner requested cancellation of the work order. In response, SAIL issued Annexure P-1, proposing forfeiture of the Earnest Money Deposit (EMD), re-tendering the work on a risk and cost basis, and barring the petitioner from future tenders for one year. The petitioner argued that Annexure P-1 was illegal. SAIL contended that the petitioner's claim of identical rates was incorrect, providing details of bids submitted through an agency called 'mjunction', where the petitioner was the L-1 bidder by quoting 'at par' (0.00%) while others quoted above the fixed rate.

Held

The Court held that the petitioner's submission that all bidders quoted the same rate was incorrect. Based on the documents presented by the respondents, including the explanation from the 'mjunction' agency and Annexure R-6, it was established that the petitioner quoted a rate 'at par' (0.00%), while other bidders quoted significantly higher percentages above the fixed rates. The Court found that the respondents' proposed action, as detailed in Annexure P-1, was in accordance with Clause 20.1 of the 'Instructions to Bidders' within the NIT. This clause clearly stipulates that if the L-1 bidder backs out, the EMD will be forfeited, the tenderer will be kept under hold for up to one year, and barred from participating in future tenders, including open tenders. The Court found no error in the issuance of the notice proposing these actions. Therefore, the Court found no merit in the writ petition.

Key Issues

1. Whether the petitioner's contention that all bidders quoted the same rate is correct, and if so, what is the implication for the L-1 determination? (Mixed question of fact and law, turning on the interpretation of tender documents and bid submissions). 2. Whether the proposed action by the respondents, as communicated in Annexure P-1, is arbitrary and illegal, considering the petitioner's objection and the tender conditions? (Question of law, turning on the interpretation of Clause 20.1 of the Instructions to Bidders). Petitioner's arguments: The petitioner argued that the order Annexure P-1 is per se illegal. They contended that they were forced to accept the work order despite discovering that other bidders had quoted the same rate, raising questions about the basis of their selection as L-1. They sought the quashing of Annexure P-1. Respondents' arguments: The respondents argued that the petitioner's submission about all bidders quoting the same rate is incorrect. They presented evidence showing that the petitioner quoted 'at par' (0.00%), while other bidders quoted rates significantly above the fixed price. They relied on Clause 20.1 of the Notice Inviting Tender (NIT) which outlines actions to be taken if the L-1 bidder backs out, asserting no arbitrariness in their proposed action.