Case Note & Summary
The petitioner, Larsen & Toubro Limited, challenged the award of a tender by Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) for the supply of 20 lakh LT AC single-phase static energy meters. The tender was awarded to respondent nos. 3 to 5 (Himachal Energy Pvt. Ltd., Genus Power Infrastructure Pvt. Ltd., and M/s Genus Innovation Pvt. Ltd.) on 2 September 2015. The petitioner alleged that the evaluation process was arbitrary and that its meters were wrongly rejected despite being technically compliant. The court examined the tender conditions, which required sample meters to be tested at NABL laboratories and MSEDCL's IT section. The petitioner's samples were initially tested and found non-compliant on certain parameters; a retest was conducted at the same NABL laboratory, which confirmed the non-compliance. The court held that the decision to retest at the same laboratory was not arbitrary, as the laboratory was accredited and the process was fair. The court also noted that the petitioner had not demonstrated any mala fides or violation of the tender conditions. The petition was dismissed, upholding the award of the contract to the respondents.
Headnote
A) Constitutional Law - Judicial Review of Tender Matters - Scope of Interference - The court's power to interfere in tender matters is limited to cases of arbitrariness, mala fides, or violation of statutory provisions; it does not sit as a court of appeal over technical evaluations. (Paras 1-17)
B) Contract Law - Tender Conditions - Level Playing Field - The tender conditions requiring sample meters to be tested at NABL laboratories and the IT section of MSEDCL were uniformly applied; no discrimination was established against the petitioner. (Paras 3-10)
C) Administrative Law - Retesting - Discretion of Tenderer - The decision to conduct retesting of meters at the same NABL laboratory was within the discretion of MSEDCL and not arbitrary, as the laboratory was accredited and the process was transparent. (Paras 11-15)
D) Evidence - Technical Evaluation - Expert Opinion - The court deferred to the technical expertise of the tender evaluation committee, which found the petitioner's meters non-compliant on certain parameters; no mala fides were shown. (Paras 16-17)
Issue of Consideration
Whether the award of contract by MSEDCL to respondent nos.3 to 5 was arbitrary, discriminatory, or contrary to the tender conditions, warranting interference under Article 226 of the Constitution of India.
Final Decision
The writ petition is dismissed. The court upheld the award of the contract to respondent nos. 3 to 5, finding no arbitrariness or violation of tender conditions.
Law Points
- Tender evaluation
- Judicial review
- Arbitrariness
- Level playing field
- Technical compliance
- Retesting
- NABL laboratory
- Post-tender correspondence
Case Details
WRIT PETITION NO.2323 OF 2015
M.S. Sanklecha, G.S. Kulkarni
Mr. Aspi Chinoy, Senior Counsel with Mr. Chetan Kapadia with Mr. Sanchin Chandarana and Mr. Pritish Shetty i/b. M/s. M.K. Ambalal & Co., for the Petitioner; Mr. M.P. Jadhav, AGP for Respondent no.1; Mr. G.R. Joshi, Senior Counsel with Ms. S. Surve with Mr. Saurabh Pakale and Mr. Amy Jaiswal i/b. Little & Co., for Respondent No.2; Mr. Anupam Dighe with Mr. Vishal Jathar and Mr. Kiran Padalkar i/b. India Law Alliance, for Respondent No.3; Mr. Ghanshyam Upadhyay i/b. Law Juris, for Respondent Nos.4 and 5; Mr. V.P. Vaidya i/b. Mr. Mahendra Agavekar, for Respondent no.6
State of Maharashtra & Others; Maharashtra State Electricity Distribution Co. Ltd.; Himachal Energy Pvt. Ltd.; Genus Power Infrastructure Pvt. Ltd.; M/s. Genus Innovation Pvt. Ltd.; Institute of Design Electrical Measuring Instruments
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging the award of a tender for supply of electricity meters.
Remedy Sought
The petitioner sought to quash the letter of award dated 2 September 2015 issued to respondent nos. 3 to 5, and sought directions for retesting of meters and re-tendering.
Filing Reason
The petitioner alleged that the evaluation process was arbitrary and that its meters were wrongly rejected despite being technically compliant.
Issues
Whether the award of contract by MSEDCL to respondent nos. 3 to 5 was arbitrary, discriminatory, or contrary to the tender conditions.
Whether the court should interfere under Article 226 of the Constitution of India in the tender evaluation process.
Submissions/Arguments
Petitioner argued that its meters were technically compliant and that the rejection was arbitrary; also that retesting should have been done at a different NABL laboratory.
Respondent no. 2 (MSEDCL) argued that the evaluation was fair and transparent, and that the petitioner's meters failed the technical tests.
Ratio Decidendi
The court's power to interfere in tender matters is limited to cases of arbitrariness, mala fides, or violation of statutory provisions. The evaluation process was fair and transparent, and the decision to retest at the same NABL laboratory was not arbitrary.
Judgment Excerpts
This petition under Article 226 of the Constitution of India arises out of a tender floated by respondent no.2 – the Maharashtra State Electricity Distribution Company Ltd. for procurement of what is described as 'LT AC Single Phase 5-30 AMPS Static Energy Meters with IR Port'.
The petitioner impugns the letter of Award of the contract dated 2nd September, 2015 issued by respondent no.2 in favour of respondent nos.3 to 5.
Procedural History
The tender was issued on 7 August 2014. The petitioner submitted its bid. After evaluation, the contract was awarded to respondent nos. 3 to 5 on 2 September 2015. The petitioner filed the present writ petition challenging the award.
Acts & Sections
- Constitution of India: Article 226
