Shakti Jan Sudhar Samiti And Ors. vs. Govt. Of N.C.T. Of Delhi And Ors.

Held

The Court held that the challenge to the NIT's eligibility criteria lacked merit. It found that while the NIT had increased the financial threshold for eligibility and the requirements for similar works performed, these increases were not per se arbitrary or discriminatory. The Court reasoned that tender conditions are generally not subject to judicial review unless patently unreasonable or arbitrary. DUSIB's justification for the increased thresholds was the radical change in the service model, including increased facilities, use of mechanized technology, and prescribed personnel standards. The Court considered these factors to be valid reasons for commensurate financial and experience requirements. Regarding the CVC guidelines, the Court opined that they were illustrative and not conclusive, particularly for services related to public welfare. The Court concluded that the drafting of eligibility conditions, even if they tended to minimize the petitioners' chances, did not automatically result in arbitrariness given the context of public welfare services.

Facts

The petitioners, non-Government organizations (NGOs), challenged the eligibility criteria in a Notice Inviting Tender (NIT) issued by the Delhi Urban Shelter Improvement Board (DUSIB) for toilet cleaning services in Jan Suvidha complexes. The NIT proposed significant changes, including making the service free for users, introducing a fixed staff-to-toilet ratio, and mandating mechanical cleaning. The petitioners contended that the revised eligibility conditions, particularly regarding prior experience in similar works and minimum financial turnover, were unreasonably high, designed to exclude existing NGOs and favour specific companies. They also pointed to changes in clauses related to EPF/ESI contributions and GST reimbursement, which altered the estimated cost of the work.

Key Issues

1. Whether the eligibility criteria, specifically the increased financial turnover and experience requirements in the NIT dated 14/15.05.2018, are arbitrary and designed to stifle competition, thereby violating principles of fairness and potentially the CVC guidelines? (Question of law and mixed fact and law, concerning tender conditions). Petitioner's arguments: The petitioners argued that the revised eligibility criteria, including the increased financial turnover and minimum work experience thresholds, were unrealistic and intended to eliminate competition and exclude existing NGOs who were performing satisfactorily. They relied on CVC guidelines emphasizing that eligibility criteria should not be unrealistic and should allow for proper competition. They also argued that the changes in clauses related to EPF/ESI and GST reimbursement altered the estimated cost, impacting the financial eligibility calculations. Respondent's (DUSIB) arguments: DUSIB contended that the NIT introduced a new scheme with significant changes, including free user charges, a fixed staff-to-toilet ratio, and the use of mechanical cleaning. These changes justified the increased financial thresholds and experience requirements. DUSIB argued that the conditions were designed to ensure capability for the new service model and that consortiums could also participate. They submitted that the CVC guidelines were illustrative and not determinative, especially for welfare services.