Case Note & Summary
The petitioner, M/s B. Ganga Transport and Sai Trade Link Joint Venture, challenged a communication dated 7.9.2015 from respondent no. 2 (General Manager, Western Coalfields Limited) stating that the petitioner had not submitted a certificate of availability of credit from its banker as required by the Notice Inviting Tenders (NIT) dated 13th June 2015. The petitioner had instead submitted a certificate from a qualified Chartered Accountant dated 13th April 2015, which had been accepted in two previous tender processes (dated 16.03.2015 and 18.05.2015) as sufficient evidence of working capital adequacy. The petitioner argued that the condition for a Banker's Certificate was not an essential condition of the tender and that the respondents' insistence on it was arbitrary and contrary to past practice. The respondents contended that the NIT required a Banker's Certificate and that the petitioner's failure to submit it rendered its bid non-responsive. The court, after hearing both sides, noted that the condition was not essential and that the respondents had accepted a Chartered Accountant's certificate in earlier tenders. The court held that the respondents could not suddenly insist on a Banker's Certificate without justification, especially when the petitioner's financial capacity was not in doubt. The court quashed the communication dated 7.9.2015 and directed the respondents to consider the petitioner's bid on the basis of the Chartered Accountant's certificate already submitted. The court also directed that the tender process be completed within four weeks.
Headnote
A) Tender Law - Essential vs. Non-Essential Conditions - Past Practice - The court considered whether a condition requiring a Banker's Certificate for proof of working capital was essential or could be relaxed based on past practice where a Chartered Accountant's certificate was accepted - Held that the condition was not essential and the respondents' insistence on the Banker's Certificate was arbitrary, especially when the petitioner had submitted a Chartered Accountant's certificate which was accepted in earlier tenders (Paras 5-7).
Issue of Consideration
Whether the insistence on a Banker's Certificate of credit availability, when a Chartered Accountant's certificate was accepted in previous tenders and the condition was not essential, is arbitrary and liable to be set aside.
Final Decision
The court allowed the writ petition, quashed the communication dated 7.9.2015, and directed the respondents to consider the petitioner's bid on the basis of the Chartered Accountant's certificate already submitted. The tender process was directed to be completed within four weeks.
Law Points
- Tender conditions
- essential vs. non-essential conditions
- past practice
- estoppel
- judicial review of tender process
