The Division Bench of the Delhi High Court in the case of Delhi Electrical Contractor Welfare Association vs BSES Yamuna Power Ltd &Anr.consisting of Chief Justice Satish Chandra Sharmaand Justice Subramonium Prasadobserved thatthe jurisdiction of Courts to interfere with conditions restricting the tender to the contractors/vendors having a higher turnover only comes into play when the condition is completely arbitrary and reasonable.
Facts
This Writ Petition was filed by the petitioner under Article 226 seeking issuance of a necessary writ, order or direction to quash the Notice Inviting Tender (“the NIT”) issued by BSES Yamuna Power Limited (“Respondent No.1/BYPL”), and the NIT issued by BSES Rajdhani Power Limited (“Respondent No.2/BRPL”) (the “impugned NITs”),which imposed a commercial requirement on bidders by increasing the minimum annual average turnover from Rs.2 to 5 Crores in 2017-2021 to Rs.70 Crores or above in the preceding three financial years, in order for them to participate in the Impugned NITs (“said Condition”). Since all the members of the petitioner were ineligible to participate in the Impugned NITs due to the said condition, the Petitioner filed thispetition.
Contentions Made
Plaintiff: The increase in the financial criteria is irrational, arbitraryand hence, violative of Article 14. It artificially excludesa large number of eligible vendors (i.e., the members of the petitioner) who have provided identical services to the Respondents for over 20 years.
Respondent: An organization having an average turnover of Rs.70 Crores would have the capacity to cater to the high value and extensive volume of work. Limited financial wherewithal of a vendor has the potential to create hurdles in case there is a need of additional workforce.The methodology adopted in the Impugned NITswould encourage technological advancements, deployment of well-trained workforce, skill upgradation and would also enable BSES DISCOMS to keep abreast with the market trends to provide the best services to its consumers and increase reliability of supply by engaging fewer vendors resulting in optimum interface and interaction related to the distribution network.
Observations of the Court
The Bench noted that Courts are slow in interfering in the tender issuance process under Article 226. A narrow scope for interference has been carved out to prevent arbitrariness, irrationality, unreasonableness,and favouritism in the administrative actions of the State.
Reliance was placed on Tata Cellular v. Union of India,Michigan Rubber (India) Ltd. v. State of Karnataka and the recent judgment of the Apex Court in Uflex Ltd. v. State of T.N. to reiterate that Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical:
“In every tender there are certain qualifying parameters whether it be technology or turnover. The Court cannot sit over in judgment on what should be the turnover required for an entity to participate.”
Judgment
The Bench set aside the impugned judgment since enough evidence was not provided to justify the delay. So, it was requested that the NCDRC should reconsider the respondents’ plea for condoning the delay and, as a result, determine the application de novo and fresh.
Case:Delhi Electrical Contractor Welfare Associationvs BSES Yamuna Power Ltd &Anr.
Citation: W.P.(C) 9662/2022
Bench: Satish Chandra Sharma, C.J., Subramonium Prasad, J
Decided on: 13th July 2022
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