Ravi Industries Through Authorised Signatory Sagar Behl S/O Subhash Behl vs. Gujarat Rural Industries Marketing Corporation LTD Thru. Managing Director

Held

The Court held that the eligibility criteria introduced by way of corrigendum were neither arbitrary nor unreasonable. The Court reasoned that the nature of the work, which involved handling solid waste for Urban Local Bodies (ULBs) of Gujarat, necessitated suppliers with proven experience in similar nature of work. The court cited Supreme Court decisions emphasizing the limited scope of judicial review in tender processes and the discretion of the employer to set eligibility criteria. The court found that the condition had a direct nexus with the purchase of vehicles for solid waste management and was not imposed with a view to favor any particular bidder. The argument that the petitioner was the largest manufacturer of tractors was deemed irrelevant if they did not meet the specific criteria for the intended use. The court also noted that the authority had considered suggestions to broaden eligibility by including indirect manufacturers and suppliers, demonstrating an attempt to address concerns. The court concluded that the condition was in consonance with guidelines issued by the CVC and was reasonable. The tender process had already attained finality with L-1 and L-2 bidders starting supplies, further dissuading interference. Therefore, the writ applications were dismissed.

Facts

The petitioner, Ravi Industries, a bicycle manufacturer since 1967, filed a writ petition challenging a corrigendum introduced by Gujarat Rural Industries Marketing Corporation Ltd. (GRIMCO) to a tender for the purchase of 2,60,000 bicycles. The corrigendum, issued on March 5, 2019, and subsequently modified on March 27 and March 29, 2019, introduced an eligibility criterion requiring a minimum actual production of 500,000 bicycles per annum for each of the three preceding accounting years (2015-16, 2016-17, 2017-18), with proof to be submitted via ER-1 or similar excise returns. The petitioner argued this clause was arbitrary, illogical, and designed to eliminate them from the bidding process, as their production capacity, though sufficient, did not meet the specific actual production requirement. The tender closing date was April 1, 2019, and the petitioner had submitted their bid.

Key Issues

1. Whether the eligibility criteria introduced by way of corrigendum to the tender document, specifically the requirement of minimum actual production of 500,000 bicycles per annum for each of the three preceding accounting years, is arbitrary, unreasonable, and against public interest, thereby violating the principles of fair competition and the doctrine of the 'level playing field'? (Question of law and mixed fact and law) Petitioner's arguments: - The added clause is arbitrary and illogical, designed to eliminate the petitioner from the race. - Production capacity, not actual production, should be the relevant criterion, as the petitioner's capacity exceeds the requirement and can meet the demand. - The corrigendum was introduced with an oblique motive to favor specific parties and restrict competition, leading to the government paying more for bicycles. - The clause is against public policy and discriminatory. - If the clause is removed, the petitioner is confident of becoming the L1 bidder, making its expungement in public interest. - A similar tender in 2016-17 did not have such an eligibility clause. - Reliance was placed on a Government circular dated 07.12.2016. Respondent's arguments: - The respondent did not explicitly record arguments in the provided text, but the court's reasoning implies they defended the eligibility criteria as reasonable and necessary for the nature of the work.