M/S Nad And Associates And Anr vs. The Union Of INDIA And 5 Ors

Held

The Court held that the petitioner's challenge to the LoA dated 12.10.2021 was not sustainable. The Court noted that the petitioner firm had participated in the process leading to the LoA by submitting its quotation in response to a Notice Inviting Quotation dated 05.10.2021, and had lost out to respondent no. 6 due to a higher quoted rate. Therefore, the petitioner could not challenge the LoA after participating and failing in that process. Regarding the Railway Board Circular dated 05.03.2009, the Court found that the term 'experienced contractors/agencies' was not qualified with 'Railways'. The Court also observed that the LoA was awarded to respondent no. 6 at a lower quoted offer compared to the petitioner's offer, and that checks and balances were incorporated in the circular. The Court further held that the petitioner's contention regarding a subsequent award of work for another 6 months could not be entertained as the details of this award were not brought on record. Consequently, the Court found no arbitrariness, irrationality, or mala fide on the part of the respondent Railway authorities in discharging the first tender and initiating the second tender, and dismissed the writ petition.

Facts

The petitioners, M/s NAD & Associates and its partner Sri Paras Didwania, filed a writ petition challenging the discharge of a tender process initiated by the North East Frontier (N.F.) Railway. The first Notice Inviting Tender (NIT) dated 22.07.2021, for GST return filing and related services for 3 years, saw the petitioner firm emerge as the sole eligible bidder. Subsequently, the N.F. Railway issued a Letter of Acceptance (LoA) dated 12.10.2021 to respondent no. 6 for the same work for a period of 2 months, and then issued a second NIT dated 08.10.2021 with modified eligibility criteria. The petitioners alleged that these actions were taken to accommodate respondent no. 6, who they claimed did not meet the original eligibility criteria.

Key Issues

1. Whether the discharge of the tender process initiated by the 1st NIT and the subsequent issuance of the 2nd NIT with changed eligibility criteria were arbitrary, irrational, or mala fide, particularly in light of the petitioner firm being the sole eligible bidder in the first tender and the alleged accommodation of respondent no. 6. (Section 4 of the tender document regarding eligibility criteria was central to this issue). 2. Whether the Letter of Acceptance (LoA) dated 12.10.2021, awarding the work to respondent no. 6 for 2 months, was in violation of Railway Board Circular dated 05.03.2009 and whether respondent no. 6 met the experience criteria. Petitioner's Arguments: The petitioner argued that the cancellation of the first tender and the issuance of the second NIT with altered eligibility conditions were designed to benefit respondent no. 6, who was disqualified in the first tender. They also contended that the LoA to respondent no. 6 violated a Railway Board Circular as respondent no. 6 lacked the requisite experience with Railways, and that the work was awarded for a short period without a proper tender process. The petitioner also raised a contention about a subsequent award of work to respondent no. 6 for another 6 months during the pendency of the writ petition. Revenue's Arguments: The N.F. Railway authorities argued that the petitioner had participated in the process leading to the LoA by submitting a quotation and therefore could not challenge it. They contended that the eligibility criteria in the circular did not specifically require experience with Railways, and that the LoA was awarded after considering quotations, with respondent no. 6 offering a lower rate. They also argued that a subsequent award of work, not brought on record with details, could not be set aside.