Case Note & Summary
The petitioners, Prakash Engineers & Infraprojects (P) Limited and Bitcon India Infrastructure Developers (P) Limited, challenged the rejection of their tenders by the Municipal Corporation of Greater Mumbai (MCGM) for asphalting of roads. The Corporation had floated an e-tender on 30.08.2014 for 14 works. Clause 3.2.3(vi)(c) required the tenderer to own an asphalt plant with a capacity of 18 MT per hour with valid registration of the Municipal Corporation. The petitioners submitted their bids, but the Corporation rejected them on the ground that the asphalt plant registration was not in the name of the petitioner but in the name of another entity. The petitioners argued that the clause only required valid registration of the plant, not that the registration be in the tenderer's name. They also contended that they were not given any opportunity to explain or cure the deficiency. The court held that the interpretation by the Corporation was hypertechnical and not warranted by the language of the clause. Moreover, the rejection without giving an opportunity of hearing violated principles of natural justice. The court set aside the rejection and directed the Corporation to reconsider the tenders after giving the petitioners a hearing. The petitions were allowed.
Headnote
A) Administrative Law - Natural Justice - Tender Rejection - Opportunity of Hearing - Tenderers were not given any opportunity to explain or cure the alleged deficiency regarding registration of asphalt plant - Held that principles of natural justice require that before rejecting a tender on technical grounds, the tenderer must be given a chance to be heard (Paras 8-10). B) Contract Law - Tender Conditions - Interpretation - Clause 3.2.3(vi)(c) required tenderer to own an asphalt plant with valid registration of Municipal Corporation - The clause did not require that the registration be in the name of the tenderer; it only required valid registration of the plant - Held that the Corporation's interpretation was hypertechnical and not warranted (Paras 7-8). C) Constitutional Law - Article 226 - Writ Jurisdiction - Tender Matters - Scope of Judicial Review - Court can interfere if decision-making process is arbitrary or violative of natural justice - Held that the rejection was arbitrary and set aside (Paras 9-10).
Issue of Consideration
Whether the rejection of tenders by the Municipal Corporation on the ground that the asphalt plant registration was not in the name of the tenderer was valid, and whether the tenderers were entitled to an opportunity of hearing before rejection.
Final Decision
The court allowed the petitions, set aside the impugned communications rejecting the tenders, and directed the Corporation to reconsider the tenders after giving the petitioners an opportunity of hearing.
Law Points
- Natural justice
- tender rejection
- opportunity of hearing
- substantial compliance
- interpretation of tender conditions
