Case Note & Summary
The Petitioner, Unistone Panels Pvt. Ltd., and its director Lalit Mittal, filed a Writ Petition under Article 226 of the Constitution of India challenging the decision of Respondent No.1, Maharashtra State Road Transport Corporation (MSRTC), to reject their bid for 50% business in a tender for Fire Resistant Grade Printed Aluminum Composite Panel Sheets for interior panelling of MS buses. The tender was issued on 22nd January 2019. The Petitioner was the L-2 bidder, and Respondent No.2, Keybond Industries LLP, was the L-1 bidder. The tender conditions allowed the L-2 bidder to match the L-1 price if the L-1 bidder was awarded the contract. However, the L-1 bidder withdrew its bid. The Petitioner claimed that it had matched the L-1 price and should be awarded the contract. MSRTC rejected the Petitioner's bid, stating that the condition for price matching did not arise as the L-1 bidder had withdrawn. The Petitioner sought a Writ of Certiorari to quash the rejection and the award of the contract to Respondent No.2, and a Writ of Mandamus directing MSRTC to award the contract to the Petitioner. The court held that the decision of MSRTC was not arbitrary. The tender conditions clearly stated that the L-2 bidder could match the L-1 price only if the L-1 bidder was awarded the contract. Since the L-1 bidder withdrew, the condition precedent was not satisfied. The court noted that MSRTC had the discretion to re-tender or take other steps. The petition was dismissed, and the rule was discharged.
Headnote
A) Tender Law - Judicial Review - Article 226 - Scope of Interference - The court examined whether the rejection of the Petitioner's bid by MSRTC was arbitrary. Held that in contractual matters, the court's interference under Article 226 is limited to cases of arbitrariness, mala fides, or violation of statutory provisions. The decision to reject the bid was based on the tender conditions and was not arbitrary. (Paras 1-22) B) Tender Law - L-1 Price Matching - Condition Precedent - The tender conditions required the L-2 bidder to match the L-1 price only if the L-1 bidder was awarded the contract. Since the L-1 bidder withdrew, the condition for price matching did not arise. The Petitioner's claim that it had matched the price was irrelevant. (Paras 10-15) C) Tender Law - Withdrawal of L-1 Bid - Effect on L-2 - The withdrawal of the L-1 bidder did not automatically entitle the L-2 bidder to the contract. The tender conditions provided for re-tendering or other options. MSRTC's decision to reject the L-2 bid was within its discretion and not arbitrary. (Paras 16-20)
Issue of Consideration
Whether the decision of Respondent No.1 (MSRTC) to reject the Petitioner's bid for 50% business after the L-1 bidder withdrew was arbitrary and violative of Article 14 of the Constitution of India.
Final Decision
The Writ Petition is dismissed. Rule discharged. No order as to costs.
Law Points
- Tender law
- Judicial review of contractual decisions
- Article 226
- L-1 price matching
- Withdrawal of L-1 bid
- Arbitrariness
- Public interest
