Tendering Authority Is Best Judge To Decide T&C Of Tender, Judicial Interference Permissible Only When Terms Are Arbitrary: Calcutta HC

The Calcutta High Court bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) has held that tender issuing authority is the best judge to decide terms and conditions of a tender. Such terms and conditions cannot be tinkered with by the Judicial Authority unless they are found to be arbitrary or whimsical. Brief Facts: A writ petition was filed by the Appellant seeking a writ of mandamus to set aside, rescind or modify the e-tender issued on September 18, 2024 for supplying Shrimp Seed in South 24 Parganas under the Monoculture Vannamei Shrimp Scheme. The above petition was dismissed by the court on the ground that the Appellant had no right to question the tender terms as the tendering authority is the best judge to decide the terms and conditions of the tender. The scope of judicial review is very limited in such matters. The e-tender consists of two bids system namely technical bid and financial bid. It was mentioned that the bidders will be selected on the basis of eligibility criteria, technical evaluation and financial evaluation. The time schedule of the e-tender was also mentioned of which the bid submission closing date would be relevant to the case on hand which was fixed as 30.10.2024 at 5:00 PM. The Eligibility criteria required shrimp seed producers or hatchery owners with a CAA registration themselves or through their authorised agents/suppliers with certification from a CAA registered hatchery from where seed to be procured having capacity to fulfill all the criteria up to the mark of satisfaction of Tender Evaluation Committee. Work credential was stipulated wherein the intending tenderers/bidders should produce credentials for supply of shrimp seed of minimum value of 30% in single work of the estimated amount put to tender during the last five years prior to the date of issue of e-tender. The second condition was that the intending tenderers/bidders should produce credentials of two numbers of completed works for supply of shrimp seeds of the minimum value of 20% of the estimated amount put to tender during the last five years prior to the date of issue of the e-tender notice. It is an admitted fact that the appellant/writ petitioner did not satisfy the work credentials condition as stipulated in clause (b) of the notice inviting tender. Contentions: The Appellant submitted that work credentials condition has been so drafted so as to benefit three participants and it is a clear case of cartelization and to create a monopoly which is violative of Article 14 and 19(1)(g) of the Constitution of India and Section 3(3) of the Competition Act, 2002. It was also argued that the respondent in whose favour the tender was awarded, had it been awarded a couple of days later the certificate which was issued to satisfy the eligibility criteria would have expired and they would have not been qualified to be selected. Therefore, the impugned tender notification had to be rescinded. Per contra, the Respondent submitted that the writ petition was filed belatedly much after the bid submission closing date which was fixed as 30.10.2024. It was further submitted that there is no question of cartelization but the tenders were invited district wise as a part of centralisation of tender process which was pursuant to an audit para by the Principal Accountant General, West Bengal and centralisation of a tender process is at the discretion of the state and the same cannot be questioned by the appellant writ petitioner. Observations: The court noted that the Supreme Court in Michigan Rubber (India) Limited Versus State of Karnataka and Others (2002) held that fixation of value of the tender is entirely within the purview of the executive and the court hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. While applying the above ratio to the facts of the present case, the court rejected the contention of the Appellant that the tender value was set above one crore to favor select bidders and encourage cartelization. The Appellant had previously participated in the tender issued by the State Fisheries Department in May 2023. Given the narrow margin between the amounts of previous tender in which the Appellant participated and the present tender, no valid case for interference is made out. The court further noted that the observations made by the Principal Accountant General pointing out the loss to the Government Exchequer on account of fragmented/split procurement process block wise had to be avoided and precisely for such reason, the notice inviting tender which were impugned in the writ petition have been centralised and tenders have been invited district wise. This decision of the tender inviting authority or that of the state cannot be held to be arbitrarily or irrational for this...

Tendering Authority Is Best Judge To Decide T&C Of Tender, Judicial Interference Permissible Only When Terms Are Arbitrary: Calcutta HC

Mohd Malik Chauhan

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