P.Savarimuthu vs. The Commissioner

Held

The Court held that the petitioner lacked the locus standi to challenge the tender notification as he had not participated in the tender process. Citing the Delhi High Court's decision in Primatel Fibcom Ltd. vs. Indian Oil Corporation Ltd., the Court stated that a party who has not participated in a tender process does not acquire any right and cannot raise grievances. Furthermore, the Court referred to Supreme Court judgments in Michigan Rubber Limited vs. State of Karnataka and Balaji Ventures Pvt.Ltd., vs. Maharashtra State Power Generation, which emphasize that pre-conditions and qualifications in tenders are to ensure the contractor's capacity and resources. The Court also cited TATA motors vs. Brihan Mumbai Electric Supply and Transport Undertakings and Air India Ltd. v. Cochin International Airport Ltd., reiterating that tender evaluations are commercial functions and courts should interfere only in cases of overwhelming public interest, arbitrariness, irrationality, bias, mala fides, or perversity. The Court found no materials to suggest that the conditions were imposed with malice or misuse of statutory powers, concluding that the conditions were reasonable for assessing tenderer capacity. Therefore, the Court held that the petitioner had not made out a prima facie case for interference with the tender notification and dismissed the writ petition.

Facts

The petitioner, P. Savarimuthu, filed a writ petition challenging a tender notification dated July 11, 2024, issued by the Dindigul District Co-operative Milk Producers Union Ltd. (the third respondent) for appointing agents to sell milk and milk products in Dindigul District for a period of three years. The tender process involved a technical bid and a price bid, with a minimum of 70 marks required for technical bid qualification. The petitioner, who had been operating in two routes (Natham-Sendurai and Vedasandur-Vadamadurai) on a temporary basis for the past three years, was deemed ineligible to participate due to the pre-conditions set in the tender. The petitioner argued that these conditions, particularly those related to experience, financial capacity, infrastructure, cold storage, handling volumes, and the number of retailers, were designed to exclude new participants and rural area dealers, making the process non-transparent and predetermined. The respondents contended that the petitioner lacked locus standi as he did not participate in the tender process and that the conditions were imposed to ensure the capacity and resources of the tenderers.

Key Issues

1. Whether the petitioner, who did not participate in the tender process, has the locus standi to challenge the tender notification and its conditions? (Question of law) 2. Whether the conditions stipulated in the tender notification, specifically those relating to experience, financial capacity, infrastructure, cold storage, volume handling, and number of retailers, are arbitrary, unreasonable, or designed to exclude certain categories of bidders, thereby vitiating the transparency and fairness of the tender process? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the tender conditions, especially the high marks awarded for previous exclusive wholesale experience (20 marks), financial capacity (20 marks), own vehicles (20 marks), cold storage (10 marks), volumes handled (10 marks), and number of retailers (20 marks), were restrictive. He contended that these criteria favored established dealers, particularly those in urban areas, and effectively excluded new entrants and rural dealers. The petitioner also pointed to the deletion of a condition allowing 30 days to arrange cold storage, which was then made a pre-condition, as evidence of predetermination. He relied on the principle that tender conditions should not be arbitrary or unreasonable. Respondents' Arguments: The respondents argued that the petitioner lacked locus standi as he had not applied for the tender, citing precedents like Primatel Fibcom Ltd. vs. Indian Oil Corporation Ltd. They asserted that the conditions were imposed based on a committee report to assess the capacity and resources of tenderers and were not introduced with malice or misuse of power. They further argued that the petitioner was attempting to achieve indirectly what he could not achieve directly by avoiding the tender process. They relied on Supreme Court judgments in Michigan Rubber Limited vs. State of Karnataka, Balaji Ventures Pvt.Ltd., vs. Maharashtra State Power Generation, TATA motors vs. Brihan Mumbai Electric Supply and Transport Undertakings, and Air India Ltd. v. Cochin International Airport Ltd., emphasizing that courts should exercise restraint in contractual matters involving public interest and that tender conditions are best judged by the authority floating the tender.