Case Note & Summary
The petitioner, Relcon Infraprojects Ltd., a construction company, challenged its disqualification from a tender floated by the Life Insurance Corporation of India (LIC) for the redevelopment of a residential building called 'Jeevan Jyot' at Malabar Hill, Mumbai. The tender was issued on 15th June 2021. LIC disqualified the petitioner by communications dated 14th December 2021 and 14th January 2022, citing Clause 3(i)(b) of the tender conditions, which disqualified bidders who had been blacklisted for substandard or delayed work in the previous five years. The basis for LIC's decision was that the petitioner had been blacklisted by the Municipal Corporation of Greater Mumbai (MCGM) in an unrelated contract. The petitioner argued that the blacklisting by MCGM was not for substandard or delayed work but for non-payment of wages, and that the blacklisting period had ended before the date of the NIT (15th June 2021). The court examined Clause 3(i)(b) and found that it specifically required the blacklisting to be for 'substandard or delayed work' and to be 'operative' at the time of the NIT. The MCGM blacklisting was for a different reason and had expired. The court held that LIC's interpretation of the clause was erroneous and that the disqualification was arbitrary and irrational. The court allowed the writ petition, quashed the disqualification orders, and directed LIC to consider the petitioner's bid in accordance with the tender conditions. The court also noted that it would not ordinarily interfere in tender matters but could do so when the decision was based on a misinterpretation of the tender conditions.
Headnote
A) Tender Law - Disqualification - Interpretation of Tender Conditions - Clause 3(i)(b) of LIC Tender - The clause disqualified bidders who had been blacklisted for substandard or delayed work in the previous five years. The petitioner was blacklisted by MCGM for a different reason (non-payment of wages) and the blacklisting period ended before the NIT date. The court held that the disqualification was not attracted as the blacklisting was not for substandard or delayed work and was not operative at the relevant time. (Paras 4-10) B) Tender Law - Writ Jurisdiction - Interference in Tender Matters - The court held that while it would not ordinarily interfere in tender matters, it could do so if the decision was arbitrary, irrational, or based on a misinterpretation of tender conditions. Here, LIC's decision was based on a misreading of Clause 3(i)(b) and was therefore arbitrary. (Paras 11-14) C) Tender Law - Blacklisting - Relevance of Blacklisting by Other Entities - The court held that a blacklisting by another entity (MCGM) does not automatically disqualify a bidder under a different tender unless the tender conditions specifically incorporate such blacklisting. The LIC tender did not have a general blacklisting clause; it only disqualified for specific reasons. (Paras 7-10)
Issue of Consideration
Whether the disqualification of the petitioner from participating in a tender floated by LIC on the ground of blacklisting by MCGM in an unrelated contract was valid under Clause 3(i)(b) of the tender conditions.
Final Decision
The court allowed the writ petition, quashed the impugned orders dated 14th December 2021 and 14th January 2022, and directed LIC to consider the petitioner's bid in accordance with the tender conditions.
Law Points
- Tender disqualification must be strictly construed
- Blacklisting by another entity not automatically a disqualification unless specifically covered by tender conditions
- Tender conditions must be interpreted as they stand without addition or substitution
- Writ court can interfere if decision is arbitrary or irrational
