HC: No bidder can insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided

 

Read Judgment ;

 

The Division Bench of the Delhi High Court in the case of M/S Cosmo Enterprise vs Union of India & Anr. consisting of ACJ Vipin Sanghi and Justice Sachin Datta reiterated that no bidder can insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided.

Facts

These petitions were directed against the disqualification of the petitioner pursuant to the tender issued by the respondents for manufacturing and supply of certain items to the railways. The petitioner participated in the tender as a “Micro-Enterprise” under the Micro and Small Enterprise Act, 2006 (“MSME Act, 2006”). The only document furnished by the petitioner to establish its status as “micro enterprise” was a “Certificate of Commencement of Production”, which was not found by the respondents as sufficient to establish that the petitioner had a valid and subsisting registration as a micro enterprise as on the date of submission of its bid.

In the counter affidavit filed on behalf of the concerned respondent, it was explained that although the bid submitted by the petitioner was initially accepted, when the documents of the petitioner were being checked, it was noticed that the “UDYAM AAKANKSHA” number mentioned in “New Certificate of Commencement of Production” had lapsed.

Procedural History

The learned counsel for the petitioner sought to explain that the reference to the Udyam Aakanksha number in its certificate had no bearing on its status as a micro enterprise, since it had a different purpose. During hearing, the petitioner also sought to rely upon further documents to establish its status as a duly registered micro enterprise.

So, the aforesaid Udyog Aadhar Memorandum Certificate issued by Ministry of Micro, Small and Medium Enterprises was never submitted by the petitioner to the respondents as part of its bid, even though Clause 3.1 of the instructions to bidders clearly contemplated submission of such documents.

Observations of the Court 

The Bench concurred with the findings of the learned CGSC that the certificate only establishes that the petitioner has commenced commercial production as per the details contained in the said certificate. The certificate itself stated that it is based on information supplied by the petitioner itself, so it cannot be equated with a valid and subsisting registration certificate conferring upon the petitioner the status of a subsisting MSE. Therefore, the petitioner could not have possibly been allowed to participate as an MSE and could not claim a right to participate in the e-reverse auction process.

It was pointed out that the petitioner could have qualified for e-reverse auction irrespective of being a non-MSE, if its quoted rate fell within the range of rates quoted by lowest 50% bidders, which did not happen.

Relying on Meerut Development Authority vs Association of Management Studies and Anr., it was reiterated that:

 

“The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.”

It was further noted that the respondents could not have inferred and assumed on the basis of the certificate submitted by the petitioner, that it continued to have a valid registration as a micro-enterprise under the MSME Act. 

The Bench reiterated that the petitioner’s bid was liable to be assessed based on materials/documents placed on record before the tendering authorities by the petitioner itself during the tender process, and not with reference to any fresh documents/materials which are now sought to be belatedly produced and relied upon. So, these writ petitions were dismissed.

Case: M/S Cosmo Enterprise vs Union of India & Anr.

Citation: W.P.(C) 8939/2022 and W.P.(C) 9458/2022

 

Bench: ACJ Vipin Sanghi, Justice Sachin Datta

Decided on: 3^rd June 2022

 

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(With input from news agency language)

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