J.P. Drags vs. State Of Chhattisgarh

Held

The Court held that the process adopted and the decision taken by the respondent authorities suffered from arbitrariness and were intended to favor respondent No. 3, which did not fulfill the eligibility criteria. The Court found the allotment of the tender to respondent No. 3 unsustainable under the law and accordingly set it aside. The Court noted that the petitioner had not prayed for the award of the contract to itself but had sought a direction to invite fresh tenders. Therefore, the Court directed the respondent authorities to invite tenders afresh. The Court relied on principles of judicial review in contractual matters, emphasizing that interference is permissible when there is arbitrariness, irrationality, malafides, or bias, citing Supreme Court judgments like Uflex Ltd. v. State of T.N. and Michigan Rubber (India) Ltd. v. State of Karnataka.

Facts

The petitioner, J.P. Drags, challenged the decision of the respondent authorities to declare respondent No. 3, Kaviraa Solution, as the successful L-1 bidder in a tender floated for the supply of motorized battery-operated tricycles for Persons with Disabilities in Chhattisgarh. The petitioner was the L-3 bidder. The petitioner contended that respondent No. 3 failed to meet mandatory pre-qualification criteria outlined in the Request For Empanelment (RFE) guidelines, specifically regarding average annual turnover, experience in supplying similar tricycles to government departments for at least three years, and having local service centers within Chhattisgarh. The tender was floated by the Directorate of Social Welfare, Government of Chhattisgarh.

Key Issues

1. Whether respondent No. 3 fulfilled the mandatory pre-qualification criteria stipulated in Clause 2 of the RFE, specifically concerning (a) average annual turnover, (b) experience in supplying motorized battery-operated tricycles to government departments for at least three years, and (c) possession of local service centers within Chhattisgarh, thereby rendering its bid valid? Petitioner's Arguments: The petitioner argued that respondent No. 3 did not meet the mandatory criteria. Regarding turnover, the petitioner pointed to alleged discrepancies between certificates issued by respondent No. 3's Chartered Accountant and another entity (Mahila Arthik Vikas Mahamandal). Concerning experience, the petitioner asserted that respondent No. 3 only supplied tricycles in 2020 and 2021, failing the three-year requirement. The petitioner also claimed respondent No. 3 lacked valid documentation for local service centers. Respondents' Arguments: The judgment does not explicitly record arguments made by respondent No. 3. Respondents No. 1 and 2 (State of Chhattisgarh and Joint Director) likely defended their decision to accept respondent No. 3's bid, potentially arguing that the criteria were met or that the court should not interfere in contractual matters.