Case Note & Summary
The Petitioner, Saj Enterprises, filed a writ petition under Article 226 of the Constitution of India challenging the financial eligibility criteria contained in a tender notice dated 20 January 2014 issued by the Municipal Corporation of Greater Bombay (MCGM) for the operation and maintenance of dewatering pumps. The Petitioner contended that the criteria requiring 90% of average annual turnover of estimated cost during the last three years in each group and work experience of 40% of quantity of pumps in each group during the last five years were arbitrary, unreasonable, and intended to deprive persons like the Petitioner from participating. The Petitioner also alleged that the conditions were suddenly changed to support a particular party. The Respondents filed an affidavit stating that the Petitioner had participated in the tender, submitted bids for six groups, and fulfilled the pre-qualification criteria in five groups. The court noted that the tender was to be opened on 12 February 2014 and that no ad-interim order had been passed. The court held that the Corporation is entitled to fix suitable conditions based on its experience and requirements, and such criteria cannot be tested at the instance of the Petitioner at this stage unless shown to be contrary to law or policy. The court further held that mere allegations of mala fides are insufficient without material evidence, especially when the Respondents denied the averments. The court observed that the concept of inviting tender implies that no person is forced to participate; if a bidder does not accept the terms, they may choose not to bid. The Petitioner having participated and fulfilled the pre-qualification criteria in five groups could not later challenge the conditions. The court dismissed the petition with no order as to costs.
Headnote
A) Tender Law - Eligibility Criteria - Judicial Review - The court held that the Municipal Corporation is entitled to fix eligibility criteria based on its experience and requirements, and such criteria cannot be interfered with at the instance of a bidder unless shown to be arbitrary, mala fide, or contrary to law. Mere allegations of mala fides are insufficient without supporting material. (Paras 4-5) B) Tender Law - Participation by Acceptance of Terms - The court observed that no person is forced to participate in a tender process; if a bidder does not accept the terms and conditions, they are free not to bid. The Petitioner having participated and fulfilled pre-qualification criteria in five groups cannot later challenge the conditions. (Paras 3, 5)
Issue of Consideration
Whether the financial eligibility criteria in the tender notice issued by the Municipal Corporation of Greater Bombay for operation and maintenance of dewatering pumps are arbitrary, unreasonable, and intended to deprive the Petitioner from participating in the tender process.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Tender conditions fixed by public authority are not open to challenge unless arbitrary
- mala fide
- or contrary to law
- mere allegations of mala fides are insufficient without material evidence
- eligibility criteria based on experience and turnover are within the authority's discretion.
