It is well settled that the tendering authority must comply with its own terms and conditions, states Delhi High Court

 

By observing that the order dated February 19, 2021 was a blacklisting order against the third respondent and the same was hidden deliberately. Thus, the act of the third respondent was a clear act of deliberate suppression, in pursuance of the same the Delhi High Court disposed of the present petition. 

A Division Bench of Acting Chief Justice, Mr. Vipin Singh and Justice Jasmeet Singh allowed the present writ petition instituted by the petitioner questioning the act of the first respondent of declaring the third respondent as the L1 bidder even when he was clearly not qualifying the tender in question. 

The petitioner preferred the present petition seeking directions to the first respondent to cancel the bids of the third respondent and consequently for awarding the tender to the petitioner on account of being the L1 bidder. 

 

The Factual matrix of the case was such that the petitioner was a company involved in the business of logistics and transportation of goods across India by Rail and Road. The first respondent was Rites Ltd., a government of India Enterprise that was directly under the control of Indian Railways - the second respondent in the present case.  The first respondent called for engagement of freight forwarder for transportation of export project via e- tender dated August 30, 2021. 

The petitioner participated in the said tender and thereafter claimed that the first respondent opened the commercial bid in an erroneous manner and subsequently the technical bids, in relation to which the third respondent was declared as the L1 bidder and the petitioner was declared as the L2 bidder. 

The petitioner contended that the third respondent was eligible to be disqualified, as they were banned by the Ministry of Defence through letter dated March 4, 2021 for an year and by PSU M/s Food Corporation of India, Vijayawada vide the banning order dated March 30, 2021 for a period of 5 years.

It was further alleged by the petitioner that to be a successful bidder in the said e-tender, the third respondent did not reveal the banning orders intentionally and submitted a false positive declaration as per clause 2 of the tender document. It was further alleged that the first respondent even being apprised of the misdeclaration cleared the technical bid in the name of the third respondent. 

Aggrieved by the same, the petitioner instituted the writ petitioner to assail the same. 

The prime contention of the petitioner centred around the language of the tender declaration form, read with clause 2 (b) in the disqualification criteria. As , in the declaration form it was stated that the third respondent needs to inform if any of his contracts have been terminated , or banned or suspended. 

After giving an anxious consideration to the submissions and relevant documents, the Court dealt with the question as to whether the third respondent furnished false and self- serving undertakings in the declaration form and if the answer of the same was positive, then whether furnishing the correct information would have resulted in its disqualification as per clause 2 of the qualification criteria. 

To deal with the same, the Court took into account the declaration form as well as the clauses stated under the tender document. In view of the same, the Court observed that the third respondent that the order dated February 19, 2021 was a blacklisting order against the third respondent and the same was hidden deliberately. The act of the third respondent was clear  of suppression and of furnishing the false statements, the Court noted. 

It was further submitted by the Court that simple reading of Clause 2 and the declaration form vividly brings out that the express intention of the tendering authority was to require the bidder to disclose any existing suspension/banning order in context of any other government/ PSU tender. It was clear that all the bidders were bound to comply with the same. Even if we were to ignore the status of all other tenders – which were awarded to the third respondent, and give them the benefit of the doubt, however, the order dated July 30, 2021 clearly debars the third respondent   from participating in any tenders floated by the Food Corporation of India, which was not disclosed by third respondent. 

 

Reliance was placed by the Court in the cases, Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd., Central Coalfields Ltd. v. SLL-SML. 

Additionally, the Court observed that the interpretation as sought by the third respondent will certainly exhaust the purpose of the declaration format and clause (2) stated in the tender document. At the outset, the Court observed that it is well settled that the tendering authority must comply with its own terms and conditions. It could have not proceeded to award the contract to the third respondent, the Court noted. 

The next issue that was dealt by the Court was pertaining to deciding the costs that should be imposed on the first respondent and the damages that the third respondent shall suffer on account of breaching the terms and conditions of the tender. 

By placing reliance on the cases, Dwaraka Das V. State of Madhya Pradesh & Another, and Subhash Projects and Marketing Ltd. Vs. West Bengal Power Development Corporation Ltd. And Ors, the Court observed that since the contract value was of 125 crores, thus it was reasonable to expect out of the third

respondent to make, at least, 10% as profits. i.e., about 12.50 crores and the said amount would partly to the petitioner, and mainly ploughed back into the society, the Court stated. 

 

In view of the same, the Court disposed of the present writ petition. 

Case name:  CJDARCL LOGISTICS LTD v. RITES LTD AND OTHERS 

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