Case Note & Summary
The petitioner, GTI Infotel Private Limited, an MSE entity, challenged the entire tender process of respondent No.1, Hindustan Petroleum Corporation Limited, for a Track and Trace system. The petitioner submitted its bid on 20 July 2023, participated in a reverse auction, and emerged as the lowest bidder (L-1) with a bid of Rs. 27,29,52,112/-. However, after the reverse auction, respondent No.1 requested a price reduction due to closure of its Rampur plant, which the petitioner accepted. Subsequently, the petitioner discovered that respondent No.3's bid price had been modified to match its own, and later revised further to Rs. 26,18,01,112/-, raising suspicions of manipulation. The petitioner also alleged that respondent No.1 failed to follow the MSE policy. The court examined the facts and found that the petitioner had not opted for the MSE purchase preference on the GeM portal, and thus was correctly treated as a non-MSE bidder. The court held that there was no violation of tender conditions or MSE policy, and the bid price modifications were within the system's framework. The court dismissed the writ petition, finding no grounds for interference under Article 226.
Headnote
A) Public Procurement - Tender Process - MSE Policy - The court examined whether the tender process violated the MSE policy. The petitioner, an MSE, failed to select the MSE purchase preference option on the GeM portal, and thus was not entitled to MSE preferential treatment. The court held that the system's classification of the petitioner as a non-MSE bidder was correct and that respondent No.1's invocation of clause 8 of the tender terms was justified. (Paras 1-10)
B) Public Procurement - Reverse Auction - Bid Price Modification - The court considered allegations of manipulation in the reverse auction and bid price modifications of respondent No.3. The court found no evidence of procedural irregularity or favoritism, as the modifications were within the system's framework and the petitioner's bid remained L-1 at the conclusion of the reverse auction. (Paras 5-10)
C) Constitutional Law - Judicial Review - Tender Matters - The court reiterated the limited scope of judicial review under Article 226 in tender matters, emphasizing that courts should not interfere unless there is arbitrariness, mala fides, or violation of statutory provisions. The court found no such grounds in the present case. (Para 1)
Issue of Consideration
Whether the tender process was vitiated by violations of tender conditions and public procurement policies, specifically the Micro and Small Enterprises (MSE) policy, and whether the petitioner was entitled to MSE preferential treatment despite not opting for the MSE purchase preference on the GeM portal.
Final Decision
The writ petition was dismissed. The court held that there was no violation of tender conditions or MSE policy, and no procedural irregularity in the reverse auction or bid price modifications. The petitioner's failure to opt for MSE purchase preference disentitled it to preferential treatment.
Law Points
- Public procurement
- Tender process
- MSE policy
- Reverse auction
- Bid price modification
- Judicial review of tender
- Article 226
- Government e-Marketplace (GeM)
- Make in India (MII) category
- MSE purchase preference
Case Details
2024 LawText (BOM) (10) 2504
Writ Petition No.1508 of 2024
Devendra Kumar Upadhyaya, CJ, Amit Borkar, J
Mr. Zal Andhyarujina, Senior Advocate with Ms. Ishani Khanvilkar, Mr. Abhinandan Waghmare, & Mr. Yogendra Singh for the petitioner. Mr. Zubin Behramkamdin, Senior Advocate with Mr. Vijay Purohit, Mr. Pratik Jhaveri and Mr. Samkit Jain i/by P & A Law Officers for respondent No.1–HPCL. Mr. J.S. Saluja for respondent No.2. Mr. Ashish Kamat, Senior Advocate with Mr. Pradeep Mane and Mr. Huzan Bhumgara i/by Desai & Diwanji for respondent No.3.
GTI Infotel Private Limited
Hindustan Petroleum Corporation Ltd., Union of India, Value Chain Solutions (India) Private Limited
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Nature of Litigation
Writ petition under Article 226 challenging the entire tender process and allotment of work by respondent No.1.
Remedy Sought
The petitioner sought to quash the tender process and the consequent allotment of work, alleging violations of tender conditions and MSE policy.
Filing Reason
The petitioner alleged that the tender process was vitiated by violations of tender conditions and public procurement policies, specifically the MSE policy, and that respondent No.3's bid price was manipulated to favor it.
Issues
Whether the tender process violated the MSE policy and tender conditions.
Whether the bid price modifications of respondent No.3 were indicative of manipulation and favoritism.
Whether the petitioner was entitled to MSE preferential treatment despite not opting for the MSE purchase preference on the GeM portal.
Submissions/Arguments
The petitioner argued that it was an MSE and should have been given preferential treatment under the MSE policy, and that the modification of respondent No.3's bid price was irregular and indicative of favoritism.
Respondent No.1 contended that the petitioner failed to opt for the MSE purchase preference on the GeM portal, and thus was correctly treated as a non-MSE bidder. It also argued that the bid price modifications were within the system's framework and no manipulation occurred.
Respondent No.3 supported respondent No.1's submissions and denied any wrongdoing.
Ratio Decidendi
In public procurement, a bidder must strictly comply with the tender conditions, including opting for applicable preferences on the GeM portal. Failure to do so disentitles the bidder to preferential treatment. Courts will not interfere in tender matters under Article 226 unless there is arbitrariness, mala fides, or violation of statutory provisions.
Judgment Excerpts
The petitioner contends that the process has been vitiated by violations of tender conditions, and public procurement policies, specifically the Micro and Small Enterprises (MSE) policy aimed at providing preferential treatment to MSEs, which, according to the petitioner, has not been followed in its spirit or in letter.
Respondent No.1 claimed that the petitioner's failure to exercise this option rendered them ineligible for the MSE preference and that the system had duly recognized this distinction, which resulted in the evaluation of the petitioner’s bid as a non-MSE bidder.
Procedural History
The writ petition was filed on an unspecified date, challenging the tender process initiated on 30 May 2023. The reverse auction concluded on 26 October 2023, and the petitioner was declared L-1. After subsequent communications and bid price modifications, the petitioner made representations and filed the present petition. The court reserved judgment on 16 October 2024 and pronounced it on 25 October 2024.
Acts & Sections
- Constitution of India: Article 226
