Case Note & Summary
The case involves two writ petitions challenging the decision of the Buldhana District Co-operative Agricultural Rural Multipurpose Development Bank Ltd. (the Bank), a society registered under the Maharashtra Co-operative Societies Act, 1960, to unilaterally reduce the upset price in a tender process for sale of its property. The Bank issued a tender notice on 30th April 2019 for sale of property admeasuring approximately 4046.86 sq.mtrs. with an upset price of Rs. 1,10,00,000. The petitioners, Jitendra N. Jain and Dwarka Bahuuddeshiya Gramin Vikas Foundation, submitted their tenders. However, before opening the tenders, the Bank reduced the upset price to Rs. 88,00,000 without issuing a fresh tender notice. The petitioners challenged this reduction as arbitrary and violative of principles of natural justice. The court framed the issue whether the tendering authority can unilaterally reduce the upset price after issuance of tender notice. The petitioners argued that the reduction was illegal and that the Bank should have invited fresh tenders. The respondents contended that the reduction was permissible under the Maharashtra Co-operative Societies Act and Rules. The court analyzed the provisions of the Act, particularly Sections 107 and 164, and held that the upset price is a material term of the tender and cannot be altered unilaterally without giving all prospective bidders an opportunity to participate. The court quashed the decision to reduce the upset price and directed the Bank to proceed with the original tender process or issue a fresh tender notice. The judgment emphasizes the importance of transparency and fairness in tender processes.
Headnote
A) Tender Law - Upset Price - Unilateral Reduction - Maharashtra Co-operative Societies Act, 1960, Sections 107, 164 - The tendering authority cannot unilaterally reduce the upset price after issuance of tender notice without inviting fresh tenders, as it violates the principle of level playing field and fairness in tender process - Held that the reduction of upset price from Rs. 1,10,00,000 to Rs. 88,00,000 without fresh tender was arbitrary and illegal (Paras 1, 14-15).
Issue of Consideration
Whether it is open for the tendering authority to unilaterally reduce the upset price quoted in the tender notice?
Final Decision
The court allowed the writ petitions, quashed the decision to reduce the upset price, and directed the Bank to proceed with the original tender process or issue a fresh tender notice. Rule made absolute.
Law Points
- Tender law
- Upset price
- Unilateral reduction
- Maharashtra Co-operative Societies Act
- 1960
- Section 107
- Section 164
- Principles of natural justice
- Level playing field
