Vaibhav Enterprises vs Municipal Corporation Of Greater Mumbai And Others

Devendra Kumar Upadhyaya, CJ

Heard.

By means of this writ petition, the Petitioner which is a partnership firm, challenges the eligibility criteria in Section 2, clause 1.1. under the caption: “Technical Capacity” in respect of e-tender No.Dy.SG/22/MC/II dated 15th May 2023 issued inviting bids for maintenance of various Gardens, Play Grounds, Recreation Grounds, Open Spaces, Traffic Islands, Central Medians etc. in Zone II of Respondent No.1 Municipal Corporation of Greater Mumbai (for short “MCGM”). Further prayer made in the writ petition is that Respondents be directed to modify the impugned tender condition and period of 3 years be substituted by 7 years period of experience of having executed work of similar nature during last 7 years.

It has been argued by the learned Counsel for the Petitioner that by inserting the impugned condition in the eligibility criteria of the tender in question, whereby only 3 years’ experience is required instead of 7 years, is arbitrary and not lawful for the reason that it is a deviation from the prescription of experience in similar nature of work as mentioned in clause 1.1.1 of the Standard Bid Document. It has also been submitted by the learned Counsel for the Petitioner that putting such a condition will be disadvantageous to the Corporation.

Learned Counsel representing the Petitioner has further argued that objection to the aforesaid effect was taken by the Petitioner at the time of pre-bid meeting, however by means of an e-mail dated 2nd June 2023 the Petitioner has been informed that its request could not be considered, without mentioning any reason therefor. Further submission is that the prescriptions in the Standard Bid Document are to be followed by the Corporation and any deviation therefrom is erroneous and hence cannot be permitted to be sustained.

Learned Counsel representing the Petitioner has further argued that in the tender issued in the year 2020 as also in the year 2021, the eligibility criteria of having experience of similar nature of work was formulated as 7 years. Our attention has been drawn to clause 1.1 of the eligibility criteria in the tender issued in the year 2020, wherein it was prescribed that the tenderer should have satisfactorily executed the work of similar nature during last 7 years. Attention of the Court has also been drawn to clause 1.3 of the eligibility criteria mentioned in the tender conditions in the tender issued in the year 2021 where it was stated that for assessing the “Technical Capacity”, the tenderer should have satisfactorily executed the work of similar nature during last 7 years. The submission is that, however, in the tender in question issued on 15th May 2023, the criteria in respect of experience as mentioned in clause 1.1 is that the tenderer in its own name, should have satisfactorily executed the work of similar nature during last 3 years.

Learned Counsel representing the Petitioner has referred to the Standard Bid Document, in clause 1.1 whereof the requirement is 7 years’ experience of having executed the work of similar nature. Thus, it is stated by the learned Counsel for the Petitioner that in the year 2020 and 2021, the eligibility regarding experience as given in the Standard Bid Document was followed, however it is only in the tender notice dated 15th May 2023 that the criteria has been changed from 7 years to 3 years’ experience without any basis or rationale. In view of this, the submission is that the impugned criteria being unreasonable, ought to be quashed while allowing the writ petition.

The prayers made in the writ petition have been vehemently opposed by Ms. Dhruti Kapadia, learned Counsel representing the Respondents. She has submitted that it is well settled principle of law that the tender floating authority should be given larger room of play in determining the tender conditions for the reason that tender floating authority is the best judge of the nature of work required to be executed by the successful bidder and, accordingly, it is the best judge also to determine the eligibility criteria. It has further been argued that in fact, the tender conditions cannot be permitted to be altered at the asking of any tenderer or bidder. The submission, thus, is that prayer for substituting the criteria of tender conditions to the liking of the Petitioner cannot be granted and any interference by this Court in this will be impermissible in exercise of its jurisdiction under Article 226 of the Constitution of India.

Having heard learned Counsel for the respective parties and perused the records available before us of this writ petition, what we find is that it is apparent that the prayer of the Petitioner is to the effect that instead of 7 years’ experience, the eligibility of having 3 years’ experience should be prescribed. Floating tender inviting bids from the eligible bidders for execution of some work is an offer and hence it exclusively lies in the realm of a contract. As is well settled, no tenderer can have any say in determination or prescription of tender conditions and any challenge to tender conditions prescribed by the tender floating authority must fail unless it is found to be manifestly unreasonable, arbitrary, MALA FIDE or tailor made.

Hon’ble Supreme Court in the case of Agmatel India Pvt. Ltd. Vs. Resoursys Telecom and Others (2022) 5 SCC 362 has clearly held that in the matter of contracts where the State or its instrumentality is a party, the process of interpretation of terms and conditions of the tender has to be essentially left to the author of the tender document and an occasion for interference by Court would arise only if such prescription of the terms of tender fails to satisfy the test of reasonableness, rationality, bias or procedural impropriety.

The Hon’ble Supreme Court, in the case of Agmatel India Pvt. Ltd. (supra) relied on the decision of the Apex Court in the case of Silppi Constructions Contractors Vs. Union of India (2020) 16 SCC 489 and held that it must be realized that the authority floating the tender is the best judge of its requirements and, therefore, Court’s interference should be minimal.

Having regard to the limitation of this Court in exercise of its jurisdiction under Article 226 of the Constitution of India in interfering with the tender conditions, what we find is that, as to whether for fulfilling the eligibility, the criteria should be of 3 years’ experience or 7 years’, has to be the prerogative of Respondent No.1 for the reason that the Respondent – Corporation being the best judge of the work which the successful tenderer will be required to execute, should be given the maximum play in determining the tender conditions. It is not for the prospective tenderer or bidder to insist on a particular criteria in relation to experience of having executed the work of similar nature. As to who will be suitable to execute the work pursuant to the tender floated by Respondent No.1, is a decision which should be left to the tender floating authority and the tenderer or bidder, in our considered opinion, cannot have any say in the matter unless the tender condition is absolutely arbitrary or unreasonable or is infested with any malice or has been set out to favour any individual tenderer.

Learned Counsel for the Petitioner has utterly failed to establish as to how having 3 years’ experience for executing the work can be said to be a condition which is arbitrary or irrational. Allegation of any malice or MALA FIDE could not be established by the petitioner in this matter. Accordingly, in view of absence of any MALA FIDE or the impugned tender condition being arbitrary or unreasonable, we are of the considered opinion that the impugned tender condition does not suffer from any irregularity or illegality so as to call for any interference by the Court in this petition.

Resultantly, the writ petition fails, which is hereby dismissed.

At this juncture, learned Counsel for the Petitioner prays that a direction may be issued that in peculiar facts and circumstances of the case, the earnest money deposit may be ordered to be refunded to the Petitioner.

We are afraid we cannot issue any such direction for the reason that such prayer needs to be considered in terms of the conditions of the tender. However, we permit the Petitioner to make an appropriate application seeking refund of the earnest money deposit and in case any such application is made, the same shall be considered and decided by the appropriate authority of the Respondent – Corporation, strictly in accordance with law, expeditiously.

There will be no order as to costs.