Tender; Seth Industrial Corporation Vs. State [Rajasthan High Court, 07-10-2016]

Tender – Cancellation of – the earlier tender was cancelled by the respondents and a new tender has been issued, wherein condition regarding turnover is different from the condition of turnover of the earlier tender. It is not the case, where the respondents have changed the condition of turnover during the tender process or the terms and conditions of the tender document are not clear. In such circumstances, no case for interference is made out in this writ petition and the same is hereby dismissed.

Tender


IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

CIVIL WRIT (CW) No. 9992 of 2016

PETITIONER: Seth Industrial Corporation, 80-A, Industrial Estate, Ludhiana – 141 003 (Punjab) through Rajneesh Sehgal, Dy. General Manager (Sales & Marketing) VERSUS RESPONDENTS 1. State of Rajasthan through Secretary Secondary Education, Jaipur. 2. Directorate, Secondary Education, Government of Rajasthan, Lalgarh Palace, Bikaner, Rajasthan. Date of Order : 7th October 2016 HON’BLE MR. VIJAY BISHNOI,J. MR VIKAS BALIA ] MR VARUN SINGHVI, ] for petitioner MR S.S. LADRECHA -AAG assisted by Mr. VIKAS CHOUDHARY, for the State

ORDER

This writ petition has been filed by the petitioner-partnership firm while claiming followingreliefs:

“i issue a writ, order or direction in the nature of prohibition restraining the Respondent from in any manner whatsoever proceeding with the tender process pursuant to the Tender Document dated 12.08.2016; (Annex-1). “ii issue a writ, order or direction in the nature of certiorari quashing the eligibility criteria for turnover prescribed in the Tender Document dated 12.08.2016 at Section V, Serial Number 2 insofar as it requires a bidder to have an net sales turnover of Rupees 200 crores in each of the last three financial years; and “iii issue any other writ, order or direction that this Hon’ble Court may deem fit to grant in the interests of justice, equity and good conscience.”

Brief facts of the case are that respondent No.2-Directorate, Secondary Education, Government of Rajasthan issued Tender Document dated 08.06.2016 (Annexure-P/2) on 17.06.2016 for procurement of approximate three lac complete ladies cycles. The petitioner along with other bidders submitted its tender document. Later on, the respondent NO.2 cancelled the Tender (Annexure- P/2) and intimated the same to the participating bidders by way of e-mail dated 10.08.2016. Immediately thereafter on 12.08.2016, the respondent No.2 issued a fresh Tender (Annexure- P/1).

The main grievance raised by the petitioner in this writ petition is regarding the crierion of turnover for the bidders provided in the Tender Document dated 12.08.2016 (Annexure-P/1).

It is contended by the petitioner that in the Tender Document dated 08.06.2016 (Annexure- P/2), the criterion regarding the turnover was that “tender should have a turnover of Rs.200,00 Crores in each year of last three Financial year (2013-14, 2014-15 and 2015-16)”. However, in the Tender Document dated 12.08.2016 (Annexure-P/1), the criterion has been changed and it would be “net sales turnover of Rs.200.00 Crores in each year of last three Financial year”.

The petitioner has claimed in the writ petition that the said criterion of turnover in the Tender Document dated 12.08.2016 (Annexure-P/1) is introduced only with intention to exclude the petitioner from participating in bidding. It is also contended that respondent No.2 has now inserted and restrictive condition in the eligibility criteria that effectively restrains and curtails participation of interested bidders who are otherwise eligible in terms of capacity and competence to supply the tendered quantity of bicycles.

It is also contended that the condition of having sales turnover of Rupees 200 Crores in each of the last three financial year is extremely harsh and disproportionate and on account of such stringent disproportionate and arbitrary eligibility criterion, number of interested bidders are being excluded and only selected few bidders will be eligible to place their bids before the respondent.

It is further contended that there is no reason or justification for fixing the criterion of net sales turnover of Rs. 200 crores in each of the last three financial year and the actions of the respondent suffer from complete non-application of mind and are not guided by any reason or rationale.

It is also contended by the petitioner that it has successfully supplied bicycles to the respondents in past on various occasions and successfully bidding for supplies of bicycles to the respondents for the past several years and supplied almost five lac bicycles to the respondents in pursuance of three work orders.

Reply to the writ petition has been filed by the respondents, wherein it is contended that the project of providing cycles to the girls is an ambitious project in State of Rajasthan in furtherance of their objective of encouraging education amongst the girls. It is further contended in the reply that it is important to ensure timely supply of three lac cycles to the girls and in view of that the respondents have decided that such manufacturers having net sales turnover of Rs.200 crores and more are fit for timely supply of such huge number of cycles. It is contended by the learned counsel for the respondents that as a matter of policy, the respondents have decided to introduce the criterion that a tenderer should have net sales of turnover of Rs. 200 crores in each of the last three financial years and the said policy decision of the State is in the interest of public at large and, therefore, is not liable to be interfered with by the Court while exercising powers underArticle 226 of the Constitution of India.

The allegations of malafides, bias and discrimination are denied by the respondents. It has also been contended that in the earlier years, the petitioner was awarded work orders for supplying bicycles but it failed to supply the same within stipulated time and on account of that it was saddled with heavy penalties. It is also contended that the petitioner came out with a case that terms and conditions of the Tender Document (Annexure-P/1) are not suitable to it and this fact itself shows that the purpose of filing this writ petition is this that the tender should be awarded to it.

Rejoinder to the reply has been filed on behalf of the petitioner, wherein essentially it is alleged that new criterion of turnover in the Tender Document (Annexure-P/1) is introduced only with intention to oust the petitioner from the tender process.

Learned counsel for the petitioner has argued that as per the provisions of section 4 of the Rajasthan Transparency in Public Procurement Act, 2012 (for short ‘the Act of 2012’ hereinafter), the procuring entity shall have the responsibility and accountability to provide fair and equitable treatment to bidders and to promote competition, however, with the introduction of the stringent condition regarding the turnover in the tender document (Annexure-P1), the respondents are not providing equitable treatment to the petitioner and are limiting the scope of competition.

It is further argued by the learned counsel for the petitioner that the respondent No.2 cancelled the earlier Tender- Annexure-P/2 without giving any justifiable reason and, therefore, the said action of the respondent No.2 of cancelling the tender is illegal. Learned counsel for the petitioner has further argued that the respondents are not permitted to provide restrictive or tailored specifications, which can discourage the competition. It is also argued that the Hon’ble Supreme Court in catena of decisions has clearly held that actions of the State should not only be fair and legitimate but should be without any bias.

Learned counsel for the petitioner while placing reliance on decisions of Hon’ble Supreme Court in