Case Note & Summary
The petitioner, Tara Chand Infralogistic Solutions Limited, challenged the rejection of its techno-commercial bid submitted in response to a Notice Inviting Tender (NIT) issued by the Steel Authority of India Limited (SAIL) for procurement of services. The tender required the bidder to possess land measuring 12.5 acres with specified infrastructure. The petitioner acquired such land on lease via a registered lease deed dated 03-01-2024. However, the landowner had availed a crop loan of Rs.1.6 Lakhs from Bank of India under the Kisan Cash Credit (KCC) scheme, creating an encumbrance on the land. The petitioner submitted its bid on 04-01-2024. Subsequently, the respondents sought additional documents, including an affidavit that the property was free from encumbrance. The petitioner responded on 07-02-2024, acknowledging the inadvertent encumbrance and offering to settle the outstanding dues. Despite this, respondent No.4 rejected the bid via email on 15-02-2024 solely on the ground of encumbrance. The court found that the encumbrance was not created by the petitioner but by the landowner, and the petitioner had expressed willingness to clear the dues. The rejection was held to be arbitrary and without affording any opportunity of hearing. The court quashed the rejection order and directed the respondents to reconsider the petitioner's bid in accordance with law, after giving a reasonable opportunity of hearing. The writ petition was allowed.
Headnote
A) Tender Law - Arbitrariness - Rejection of Bid - Encumbrance on Leased Land - The petitioner's bid was rejected on the ground that the leased land was encumbered due to a crop loan availed by the landowner. The court held that the rejection was arbitrary as the encumbrance was not created by the petitioner and the petitioner had offered to settle the dues. The court directed reconsideration of the bid. (Paras 2-10) B) Tender Law - Natural Justice - Opportunity of Hearing - The respondents did not provide any opportunity to the petitioner to explain the encumbrance before rejecting the bid. The court held that such rejection without hearing is violative of principles of natural justice. (Paras 8-10)
Issue of Consideration
Whether the rejection of the petitioner's techno-commercial bid on the ground of encumbrance over the leased land was arbitrary and violative of principles of natural justice.
Final Decision
The court allowed the writ petition, quashed the rejection order dated 15-02-2024, and directed the respondents to reconsider the petitioner's bid in accordance with law after giving a reasonable opportunity of hearing.
Law Points
- Tender law
- Arbitrariness
- Encumbrance
- Leasehold property
- Reasonable opportunity
