Case Note & Summary
The petitioner, B. D. Bansal and Co., a proprietorship firm, filed a Writ Petition under Article 226 of the Constitution of India before the High Court of Judicature at Bombay challenging the cancellation of a tender issued by Brihan Mumbai Electric Supply and Transport Undertaking (BEST) for the procurement of 25 double-decker buses. The petitioner was the sole bidder and claimed that the cancellation was arbitrary and illegal. The court noted that the tender conditions required the bidder to have a manufacturing unit in India and to submit certain documents. The petitioner's bid was based on a chassis manufactured by a third party, but the authorization from that third party was not clear. The court found that the cancellation was justified as there was lack of transparency and the petitioner failed to comply with the tender conditions. The court also considered an intervention application by Ashwin Wadhwa, who supported the cancellation. The court dismissed the writ petition and the notice of motion, and directed BEST to issue a fresh tender. The court held that the decision to cancel the tender was a commercial decision taken in public interest and not arbitrary, and that the court's interference in tender matters is limited to cases of arbitrariness, mala fides, or violation of statutory provisions.
Headnote
A) Tender Law - Cancellation of Tender - Transparency and Level Playing Field - The court examined whether the cancellation of a tender by BEST was arbitrary. Held that the tender conditions required the bidder to have a manufacturing unit in India, and the petitioner's bid was based on a chassis manufactured by a third party without proper authorization, leading to lack of transparency. The court upheld the cancellation and directed fresh tender (Paras 1-15). B) Public Procurement - Judicial Review - Scope of Interference - The court reiterated that in matters of tender, the court's interference is limited to cases of arbitrariness, mala fides, or violation of statutory provisions. Held that the decision to cancel the tender was a commercial decision taken in public interest and not arbitrary (Paras 10-15).
Issue of Consideration
Whether the cancellation of a tender by BEST for procurement of 25 double-decker buses was arbitrary and illegal, and whether the petitioner was entitled to be awarded the contract.
Final Decision
The High Court dismissed the Writ Petition and the Notice of Motion, and directed BEST to issue a fresh tender for the procurement of 25 double-decker buses.
Law Points
- Tender law
- Public procurement
- Transparency
- Level playing field
- Cancellation of tender
- Judicial review of administrative action
- Writ jurisdiction under Article 226
