M/S Trg Industries PVT LTD Th Naresh Gupta vs. Public Works (P.W.D.)

Held

The Court held that the decision of the official respondents dated December 24, 2022, was not only non-compliant with the mandatory terms and conditions of the ITB but was also irrational, arbitrary, and unfair, violating Article 14 of the Constitution. While acknowledging that respondent No. 5 was found to be the lowest bidder and the petitioner the second lowest, with a substantial difference in bids, the Court prioritized public interest and safeguarding the public exchequer. Despite being inclined to allow the petition and quash the impugned decision, the Court decided against awarding the contract to the petitioner due to potential detriment to the public exchequer. Instead, the Court quashed the impugned decision and directed the respondents to issue a fresh e-NIT for the subject work, inviting bids from eligible bidders and concluding the process strictly in accordance with the contract terms and legal position. The Court emphasized the need to issue the fresh e-NIT and conclude the process without further delay, considering the execution of the work was already delayed.

Facts

The petitioner, M/S TRG Industries Pvt. Ltd., challenged a revised technical evaluation report issued by the official respondents (PMGSY authorities) on December 24, 2022. This report changed the status of respondent No. 5 from 'non-responsive' to 'responsive' for a road up-gradation project. Initially, respondent No. 5 was disqualified because its joint venture partner's annual turnover certificate lacked a Unique Document Identification Number (UDIN), a mandatory requirement. However, after respondent No. 5 submitted a representation, the Technical Evaluation Committee reconsidered and declared it responsive, citing a one-year turnover certificate with a UDIN that met the qualifying criteria. The petitioner argued this change was arbitrary and violated tender conditions, leading to a legitimate expectation of securing the contract.

Key Issues

1. Whether the decision of the Technical Evaluation Committee to change the status of respondent No. 5 from 'non-responsive' to 'responsive' was arbitrary, unfair, and in violation of the mandatory terms and conditions of the e-NIT, specifically clause 4.4 B(a) III(a) of the Instructions to Bidders (ITB) concerning the UDIN requirement on turnover certificates? Petitioner's arguments: The petitioner contended that the revised decision was arbitrary and unfair, violating the mandatory terms of the e-NIT. They argued that the initial disqualification was correct as the turnover certificate lacked the mandatory UDIN. The publication of the initial technical evaluation summary created a legitimate expectation for the petitioner to win the contract. They relied on the mandatory nature of the UDIN requirement as stipulated in the Standard Bidding Document (SBD). Revenue/State's arguments: The official respondents argued that upon reconsideration of respondent No. 5's complaint, it was found that a one-year turnover certificate with a UDIN was on record and met the qualifying criteria. They asserted that the decision of the expert committee was bona fide, fair, and free from arbitrariness. Respondent No. 5 argued that the initial decision was contrary to the SBD and that bearing a UDIN on all five years' turnover certificates was not a mandatory condition, thus the waiver of this 'directory' condition by the committee was not subject to interference. They also invoked principles of judicial restraint in tender matters.