No Bidder Can Claim Fundamental Right To Carry On Business With Government: Allahabad HC Refuses To Interfere Citing Restrictive Nature Of Tender Cases

A Division Bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar held, “Wherever, there is a challenge of award of the tender, the Court only has to see whether the decision making process had any error or the authorities have exceeded their jurisdiction or has violated the principles of natural justice. In this case, there is nothing on record to show that the State or its instrumentalities have acted unreasonably, whimsically or with ulterior motive. There was no error in the decision making process neither the authorities have exceeded the jurisdiction nor there was any violation of natural justice.”

The Court further held, “If the State or its instrumentalities acts fairly in the tenders proceedings and thereafter award the contract, in that case, interference by the Court is very restrictive as no bidder can claim fundamental right to carry on business with the Government.”

Bids were submitted online using the "Prahari" software. Petitioner's bid, initially "responsive," was later deemed "non-responsive" due to objections raised by competitors about document authenticity. Allegations of an engineer's improper involvement and document deletion were made. Despite reevaluation, petitioner's bid stayed "non-responsive," and their financial bid was not opened.

Senior Advocate Anoop Trivedi appeared for the Appellant and Advocate Manish Goyal appeared for the Respondents.

The petitioner's counsel argued that the decision of the Tender Evaluating Committee was arbitrary and had changed the initial "responsive" status of the petitioner's bid for malafide reasons. The respondents, represented by their counsel, contended that the petitioner's bid was legitimately declared "non-responsive" based on the evaluation of objections raised by other bidders. They emphasized that the allegations of malfeasance were baseless and the decision-making process was transparent.

The Court noted that the petitioner claimed they were initially declared "responsive" but later deemed "non-responsive." However, objections were raised against their bid, leading to a detailed evaluation. The Tender Evaluating Committee found the petitioner's bid "non-responsive" on twelve counts. The petitioner's representation resulted in only one count being reconsidered, and their bid remained "non-responsive" on eleven counts. The petitioner's claim of being "responsive" was deemed incorrect by the Court.

The Court noted that petitioner had alleged that the department, in collusion with a respondent, deleted their uploaded documents. This claim was proven baseless as the number of uploaded documents remained the same, and no tampering was evidenced. The use of the Prahari App was stated to be transparent and tamper-proof.

The Court found no merit of the contention of the petitioner who accused respondent no. 9 of illegal actions favoring another bidder after being promoted. The Court found that the valuation process was detailed, and the decisions were based on objective criteria.

The Court emphasized the limited scope of judicial review in tender matters. The Court said, “The Hon’ble Supreme Court in the number of decisions, has laid down parameters wherein, the High Court should not interfere in the tender matters unless the same is absolutely mala fide and the decision taken by the State is arbitrary. It has also laid down that the terms of invitation to the tender is not opened for judicial scrutiny because the violation of tender is in the realm of contract.”

The Court highlighted that the petitioner failed to establish arbitrariness, malafide, or any procedural violations. The allegations against State Authorities favoring a specific bidder were dismissed as baseless. The Court held, “In the instant case, since the petitioner has utterly failed to make out a case of arbitrariness, malafide or the decision was intended to favour someone or the decisions suffered from any perversity, even the allegations made against the State Authorities of favouring a particular bidder has been found to be baseless and contrary to record. Hence, there is no merit in the writ petition.”

Consequently, the petition was dismissed.

Cause Title: M/S Jai Hanuman Construction Jagdish Saran v. State of U.P. & Ors., [2023:AHC:196856-DB]

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