In W.P.(C) 14808/2022-DEL HC- Matters relating to tenders or awards of contract are essentially commercial in nature, and if decision in relation to same is bona fide and in public interest, then Courts must not exercise their powers under Article 226: Delhi HC
Justices Satish Chandra Sharma & Subramonium Prasad [05-12-2022]

Read Order: PRAGATI ENGINEERS v. GOVERNMENT OF NCT DELHI THROUGH EXECUTIVE ENGINEER SOUTH ELECT DIVISION & ORS 

Mansimran Kaur

New Delhi, December 7, 2022: Reaffirming that the author of the tender is the best interpreter of the tendering document, the Delhi High Court has opined that it is only in cases of illegality, procedural irregularity, mala fides or manifest arbitrariness that Courts may exercise its jurisdiction under Article 226 of the Constitution and interfere in the contractual matter.

The Division bench of Justice Satish Chandra Sharma and Justice Subramonium Prasad dismissed the instant writ petition preferred  under Article 226 of the Constitution seeking quashing of communication issued by Government of NCT Delhi (GNCTD), i.e.  the first respondent , whereby the bid of the petitioner for a Tender for Supply, Installation, Testing and Commissioning (SITC) of Audio Video Conferencing System at VWDC, Saket Court Complex, New Delhi, was rejected. 

The Division Bench was of the view that it failed to find any reason to intervene in the tendering process and substitute the tendering authority's opinion with its own.

It was stated that the tender in question was floated by the first respondent on September 20 2022 with the last date and time of submission of technical bid, original Earnest Deposit Money.  It was stated that the petitioner, on perusing the technical specifications, was of the view that the specifications were tailored to suit a specific tenderer and that other Original Equipment Manufacturers would not qualify. 

Accordingly, the petitioner, vide letter dated September 23, 2022 highlighted the irregularities in the tender document and stated that the specification should be in accordance with the Central Vigilance Commission (CVC) guidelines in order to allow for better competition. The letter further noted that Indian makers for tendered items should also be considered under the Make in India Policy.

Another letter dated September 24, 2022  was issued by the petitioner to the first Respondent, reiterating the contents of letter dated September 23, 2022 and requesting to add equivalent makes for better competition as well as to extend the due date of the tender for further 7 working days from the date of amendment. the Ministry of Commerce and Industry forwarded the grievances of the petitioner to Chief Secretary, Delhi Government, and requested for the terms of the tender document to be reviewed in furtherance of the objective to promote Indian manufacturers. Consequently, an amended tender was floated. .

It was further stated that the first respondent however did not carry out any amendments with regard to the technical specifications or inclusion of Indian makers. The amendment was solely limited to the extension of the bid submission date and the bid opening date. 

Therefore, the petitioner yet again intimated to the first respondent  that the catalogues of Sennheiser had been cut and pasted in the tender document and that other manufacturers did not comply with the specification. A detailed representation was also submitted by the petitioner to the Chief Commissioner, Central Vigilance Commission, New Delhi, on the aspect that the tender benefitted a single entity.

However, the first respondent rejected the bid of the Petitioner on the grounds that the Petitioner had not submitted the authorised certificate from Original Equipment Manufacturer (OEM). Aggrieved by the same, the Petitioner has approached this Court by way of the instant petition.

Having arrived at the inference that the petitioner had erred in its submission of bid documents and that its disqualification was justified, the Bench noted that it was to analysise the law pertaining to judicial review of tender matter. 

“The jurisprudence that has evolved over the past two decades dictates that in matters pertaining to commercial contracts, there ought to be minimal interference with the States decisions. It is only in cases of illegality, procedural irregularity, mala fides, or manifest arbitrariness that Courts may exercise their jurisdiction under Article 226 of the Constitution of India and interfere in the contractual matter”, the Court further observed. 

At this stage reference was placed on the judgments in N.G. Projects Limited v. Vinod Kumar Jain and Ors. and Tata Cellular v. Union of India. The Court thus observed that it was clear from the foregoing analysis that considerable latitude of administrative discretion is exercised by the State in the award of government contracts by the process of inviting tender. 

Though this discretion of the State is subject to judicial review, however, this review is limited to the analysis if such exercise of the discretion is illegal or arbitrary, the Court opined. 

 What must primarily be borne in mind that matters relating to tenders or award of contract are essentially commercial in nature, and if a decision communicated in relation to the same is bona fide and is in public interest, then Courts must not, in exercise their power under Article 226, the Court further remarked. 

Noting that it was a matter of a disgruntled bidder who had failed to qualify for the financial bid on the ground of not fulfilling the essential requirements as enumerated in the bid document, the Court failed to find any reason to intervene in the tendering process and substitute the tendering authority's opinion with its own. Thus, the writ petition was dismissed.