Case Note & Summary
The petitioner, challenged its disqualification from a tender process for municipal solid waste management by the Municipal Corporation of Greater Mumbai -- The disqualification was based on the petitioner's failure to meet the modified profitability criteria requiring positive profit after tax for five consecutive financial years -- Specifically, for FY 2022-23, the petitioner's balance sheet showed a loss, but its Chartered Accountant certified positive profit after tax by including Other Comprehensive Income under Indian Accounting Standards -- The court held that the tender authority's decision to compute profit after tax without considering OCI was not arbitrary, as it applied a uniform standard and the authority had the prerogative to interpret its own conditions -- The writ petition was dismissed, and the disqualification was upheld
Headnote
The High Court of Judicature at Bombay dismissed a writ petition challenging the disqualification of Petitioner from a tender process for municipal solid waste management -- The petitioner was disqualified by the Municipal Corporation of Greater Mumbai for failing to meet the modified profitability criteria requiring positive profit after tax for five consecutive financial years -- The petitioner argued that its Chartered Accountant's certificate showed positive profit after tax for FY 2022-23 when Other Comprehensive Income (OCI) under Ind AS was considered, despite a loss in the Profit & Loss Account -- The court held that the tender authority's interpretation of profit after tax as gross income minus expenses minus tax, without including OCI, was not arbitrary -- The court emphasized that the authority applied a uniform standard to all bidders and had the discretion to interpret its own tender conditions -- The petition was dismissed, upholding the disqualification and forfeiture of earnest money deposit
Premium Content
The Headnote is only available to subscribed members.
Subscribe Now to access key legal points
Issue of Consideration: The Issue of Consideration was whether the petitioner's disqualification from the tender process by the Municipal Corporation for allegedly not meeting the profitability criteria was arbitrary and in violation of the tender conditions, particularly regarding the interpretation of profit after tax under Indian Accounting Standards (Ind AS)
Premium Content
The Issue of Consideration is only available to subscribed members.
Subscribe Now to access critical case issues
Final Decision
The High Court dismissed the writ petition, upholding the disqualification of the petitioner from the tender process and the forfeiture of 10% of the earnest money deposit
