Delhi High Court Upholds UIDAI Decision To Diqualify 'Abnormally Low' Financial Bid From Tender For Aadhaar Audit & Quality Check

The Delhi High Court has refused to interfere with UIDAI's decision to reject the lowest financial bid submitted by Writer Business Services Pvt. Ltd for audit and quality check of Aadhar applications.

The company has been executing previous contracts with Unique Identification Authority of India for the very same task, for the last six years.

However, this time, the division bench of Chief Justice DK Upadhyaya and Justice Tushar Rao Gedela observed that the bid was so “abnormally low” that none of the other bidders were ready to match the quote. It observed,

“The subject RFP (Request for Proposal) is not a tender process where only one bidder was to be declared as L-1; rather, it envisaged multiple service providers, one out of whom would be declared as L-1, with the mandate that the bidders at L-2, L-3 and L-4 were required to match with the “rate per packet” or “discovered rate” as quoted by L-1 for both the packets.

None of the other remaining bidders from L-2 downwards, agreed to match with the “rate per packet” of Packet-1 as quoted by the petitioner. If that were so, we have no doubt whatsoever that the RFP and the tender process would have got frustrated which would be clearly contrary to the public interest. We are acutely conscious of the fact that the purpose of the Aadhaar Authority in notifying the subject RFP would surely have been defeated and frustrated.”

UIDAI had rejected Petitioner's bid, stating that its bid was lower than that of L-2 by almost Rs.200 Crores.

The Petitioner-company however argued that the Aadhaar Authority did not have any authority to disqualify its bid on the basis of it being “abnormally low”. It contended that sub-clauses (i) to (viii) of Clause 2.1.19(1) of the RFP referred to various reasons to disqualify a bidder, and there was no reference to disqualification on the basis of an “abnormally low” bid.

UIDAI on the other hand claimed that Petitioner substantially failed to demonstrate its capability to deliver the contract at the offered price, which was “abnormally low” as compared to the estimated value of the contract.

The High Court agreed with the Petitioner that it is technically qualified to execute such projects. However, on commercial side, the Court said that the Financial Evaluation Committee (FEC) had no choice other than to reject the financial/commercial bid of the petitioner in the interest of the tender process as also in public interest.

“We have arrived at such an opinion predicated on the inference that in case no other bidder would be able to match the price of the petitioner i.e. the “rate per packet” particularly Packet-1, the entire tender process shall be rendered nugatory and frustrated. Thus, the decision of the Aadhaar Authority appears to have been taken in the interest of the project and paramount public interest,” the Court said.

It also reiterated that FEC are a committee consisting of experts on the subject which is highly technical and the Court cannot supplant its view on the body. As such, it dismissed the plea.

Appearance: For the Petitioner: Mr. Sandeep Sethi, Senior Advocate with Mr. Achyuth Ajith Kumar, Mr. Shyam Gopal, Mr. Sumer Seth and Ms. Riya Kumar, Advocates For the Respondent: Mr. Darpan Wadhwa, Senior Advocate with Ms. Shraddha Deshmukh, Mr. Utkarsh, Mr. Sanchit Singh, Ms. Divita Vyas, Mr. Rakesh Kumar (SPC) and Mr. Sunil, Advocates

Case title: Writer Business Services Pvt. Ltd v. UIDAI

Citation: 2025 LiveLaw (Del) 1353

Case no.: W.P.(C) 909/2024

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