M/S. J.K.Trade And Commerce vs. National Thermal Power Corporation LTD. (Ntpc LTD.) And 2 Ors

Held

The Court held that the closure and annulment of the bidding process by NTPC were not arbitrary. While the initial communication dated November 5, 2019, did not provide reasons for closing the tender, the respondent NTPC, in its counter affidavit, clearly explained the reasons for not awarding the contract and annulling the process. These reasons were recorded by the tender committee on October 25, 2019, which was prior to the impugned communications. The Court found that the disclosure of reasons in the counter affidavit cured the lack of disclosure at the time of the initial communication. The Court distinguished the present case from precedents like Sampad Samal and The Vice Chairman & Managing Director, City and Industrial Development Corporation of Maharashtra Limited, finding them inapplicable. Therefore, the Court concluded that the contentions advanced by the petitioner were without merit and the reliefs sought were unsustainable. The writ petition was dismissed.

Facts

The petitioner, M/s J.K. Trade and Commerce, participated in a bidding process initiated by National Thermal Power Corporation Ltd. (NTPC) for the construction of a school building. The petitioner emerged as the lowest bidder (L-1) after technical and financial evaluations. Subsequently, NTPC issued a letter on November 5, 2019, informing the petitioner that the bidding process had been closed and returned the Earnest Money Deposit. Following a representation by the petitioner, NTPC issued another letter on December 5, 2019, stating that the bidding process had been annulled as per Clause 12.0 of the Invitation For Bids (IFB). The petitioner filed a writ petition challenging these decisions, seeking directions to settle the contract in its favor.

Key Issues

1. Whether the closure and annulment of the bidding process by NTPC, after the petitioner emerged as the lowest bidder, was arbitrary and without justification, thereby violating the petitioner's rights? Petitioner's Arguments: - The petitioner argued that it had qualified at both technical and financial stages and emerged as the L-1 bidder, making it the successful bidder. - The closure and annulment of the bidding process via communications dated November 5, 2019, and December 5, 2019, using Clause 12.0 of the Bidding Document, were arbitrary actions. - The petitioner relied on the principle that after emerging as a successful bidder, the tendering authority cannot arbitrarily close or annul the process. Revenue/State's Arguments: - The respondent NTPC argued that while the initial communication did not state reasons, the counter affidavit provided the justification for the annulment. - The reasons for cancellation were recorded by the tender committee on October 25, 2019, prior to the impugned communications. - The respondent cited the case of Sampad Samal to argue that rejection without reason can be justified if there are proper grounds, which were later disclosed. - The respondent distinguished the case from The Vice Chairman & Managing Director, City and Industrial Development Corporation of Maharashtra Limited, stating that no contractual relationship had been formed in this instance.