Case Note & Summary
The petitioner, M/s. Mahendra Realtors and Infrastructure Pvt. Ltd., filed a writ petition challenging the action of the Mumbai Municipal Corporation in treating its bid for tender No. 7100058905 as nonresponsive. The tender was for interior and allied work at the New R Central Municipal Ward Office. The Corporation rejected the bid on the ground that the petitioner's name was not removed from blacklisting by the Maharashtra State Police Housing and Welfare Corporation Limited (Police Housing Corporation) as of the last date of submission, i.e., 27/11/2015. The petitioner also challenged the consequential order dated 29/01/2016 informing them of the rejection. The petitioner had initially also challenged another tender (No. 7100052390) but later confined the petition to tender No. 7100058905. The Court examined the tender conditions and found that the requirement was only a declaration regarding blacklisting by the Corporation itself, not by other entities. The Court noted that the petitioner had been blacklisted by the Police Housing Corporation but was subsequently removed from the blacklist. The Court held that the Corporation's action was arbitrary and violative of natural justice as the petitioner was not given a hearing. The Court also observed that the rejection was disproportionate since the petitioner's bid was the lowest and the blacklisting was by a different authority. The Court allowed the petition, quashed the order dated 29/01/2016, and directed the Corporation to consider the petitioner's bid as responsive and proceed with the tender process.
Headnote
A) Tender Law - Bid Responsiveness - Blacklisting by Third Party - The Municipal Corporation rejected the petitioner's bid as nonresponsive because the petitioner was blacklisted by the Police Housing Corporation, a separate entity, at the time of bid submission. The Court held that the blacklisting by another entity cannot be a ground to treat the bid as nonresponsive unless the tender conditions expressly require clearance from all government entities. The Court found that the tender conditions only required a declaration regarding blacklisting by the Corporation itself, not by other entities. (Paras 2-10) B) Tender Law - Natural Justice - Opportunity of Hearing - The Court observed that the petitioner was not given an opportunity to explain the blacklisting before the bid was rejected. The Court held that principles of natural justice require that a bidder be heard before being disqualified on grounds of blacklisting, especially when the blacklisting was by a different authority and the petitioner had subsequently been removed from the blacklist. (Paras 11-15) C) Tender Law - Proportionality - Disproportionate Action - The Court noted that the petitioner's bid was the lowest and the rejection was based on a technicality. The Court held that the action of the Corporation was disproportionate as the petitioner had already been removed from the blacklist by the Police Housing Corporation after the bid submission date, and the Corporation did not consider this subsequent development. (Paras 16-20)
Issue of Consideration
Whether the Municipal Corporation was justified in treating the petitioner's bid as nonresponsive on the ground that the petitioner's name was not removed from blacklisting by the Police Housing Corporation at the time of bid submission, and whether the consequential order dated 29/01/2016 is sustainable.
Final Decision
The Court allowed the petition, quashed the order dated 29/01/2016, and directed the Municipal Corporation to consider the petitioner's bid as responsive and proceed with the tender process.
Law Points
- Tender law
- Blacklisting
- Nonresponsive bid
- Natural justice
- Proportionality
