Everest Facility Management Services PVT. LTD. vs. Indian Institue Of Management Raipur

Held

The Court held that the action of the respondent authorities did not suffer from mala fides or arbitrariness. It noted that no specific evidence of favoritism was presented by the petitioner. The Court found that the Tender Committee's decision was based on a report of high dissatisfaction with the petitioner's performance under the existing contract, including non-compliance with statutory requirements. Citing Supreme Court judgments, the Court emphasized that authorities are best positioned to select the most suitable bidder based on past performance. The Court concluded that the past experience with the petitioner provided a valid basis for their decision. Therefore, the Court found no grounds for exercising the power of judicial review, stating that the writ petition lacked merit.

Facts

The petitioner, Everest Facility Management Services Pvt. Ltd., challenged the rejection of its technical bid by the Tender Committee of the Indian Institute of Management (IIM) Raipur. The tender was for 'housekeeping & facility management' services. The petitioner had previously held contracts with IIM Raipur since 2014. The Tender Committee disqualified the petitioner, citing 'poor quality of service offered by the petitioner during existing contract in comparison with the past two years and high-level dissatisfaction on several parameters of performance including non-compliance of statutory requirements.' The petitioner argued that it was disqualified without an opportunity to be heard or a show-cause notice, constituting a breach of natural justice. The respondents contended that the petitioner admitted irregularities in its reply to notices and that disqualification from a tender is not blacklisting.

Key Issues

1. Whether the rejection of the petitioner's technical bid by the Tender Committee, without issuing a show-cause notice and affording an opportunity of personal hearing, violates the principles of natural justice, particularly in light of the petitioner's past performance being cited as the reason for disqualification? 2. Whether the decision of the Tender Committee to disqualify the petitioner is arbitrary, mala fide, or based on irrational considerations, thereby warranting judicial review? Petitioner's Arguments: The petitioner argued that the disqualification was akin to blacklisting without following the principles of natural justice, which mandates a show-cause notice and an opportunity for a personal hearing. They contended that the allegations of poor service and non-compliance were false and baseless, and the disqualification was a targeted action to deprive them of participation. Reliance was placed on judgments concerning natural justice and arbitrary administrative actions. Respondents' Arguments: The respondents argued that the petitioner had admitted irregularities in its replies to notices, thus the principles of natural justice were not violated. They asserted that disqualification from a specific tender is not blacklisting and that the Tender Committee had cogent reasons based on the petitioner's past unsatisfactory performance, including worker wage issues and GST irregularities. They relied on Supreme Court judgments emphasizing judicial restraint in contractual matters and the authority's discretion in selecting tenderers based on past performance.