Case Note & Summary
The petitioner, Ganesh Benzoplast Limited, a public limited company, filed a writ petition challenging the decision of the respondent no.1, Mormugao Port Trust, rejecting its technical bid in an e-tender process for allotment of three plots on lease. The petitioner had previously taken on lease another plot from the Port Trust, which was terminated due to a dispute, leading to a suit filed by the petitioner. The suit was dismissed by the trial court, and the petitioner appealed in First Appeal No.114/2009 before the High Court, which was admitted and an interim order was passed protecting the petitioner's occupation subject to deposit of Rs.60 lakhs per annum, which the petitioner complied with. Subsequently, the petitioner submitted a bid for leasehold rights of three other plots and paid the requisite amount. However, the petitioner was not called for opening of financial bids and later learned that its bid was rejected. The respondents invoked clause 3.5.(i)(f) of the tender conditions, which provided that a bidder should not have any litigation with the Port Trust. The petitioner argued that the rejection was arbitrary and without application of mind, as the litigation pertained to a different plot and the petitioner was in lawful possession under an interim order. The court agreed, holding that the rejection was arbitrary and violative of natural justice, and set aside the decision, directing the respondents to consider the petitioner's bid in accordance with law.
Headnote
A) Administrative Law - Tender Process - Rejection of Bid - Natural Justice - The rejection of a technical bid on the ground of pending litigation between the bidder and the tendering authority, without affording an opportunity of hearing, is arbitrary and violative of principles of natural justice. The court held that the tender condition invoked did not apply to the petitioner's case as the litigation was not in relation to the subject plots but a different plot, and the petitioner was in lawful possession under an interim order. (Paras 4-10)
B) Contract Law - Tender Conditions - Interpretation - Clause 3.5.(i)(f) - The condition that a bidder should not have any litigation with the Port Trust must be interpreted strictly and cannot be used to disqualify a bidder where the litigation pertains to a different plot and the bidder is complying with interim orders. The court held that the rejection was without application of mind and set aside the decision. (Paras 5-10)
Issue of Consideration
Whether the rejection of the petitioner's technical bid by the respondent no.1 (Mormugao Port Trust) on the ground that the petitioner had a pending litigation with the Port Trust was arbitrary and violative of natural justice, and whether the tender condition clause 3.5.(i)(f) was correctly invoked.
Final Decision
The court allowed the petition, quashed the decision of the respondent no.1 rejecting the petitioner's technical bid, and directed the respondents to consider the petitioner's bid in accordance with law.
Law Points
- Natural justice
- Arbitrariness in tender process
- Interpretation of tender conditions
- Right to participate in tender
- Judicial review of administrative action
Case Details
Writ Petition No. 380 of 2017
F. M. Reis, Nutan D. Sardessai
Mr. S. S. Kantak (Senior Advocate) with Mr. Ethelwald Olimpio Mendes for petitioner; Mr. Y. V. Nadkarni for respondent no.1; Mr. S. G. Desai (Senior Advocate) with Mr. P. Rao and Ms. A. Lobo for respondent no.2
Ganesh Benzoplast Limited
Mormugao Port Trust, Aegis Logistics Limited
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Nature of Litigation
Writ petition challenging rejection of technical bid in e-tender process for allotment of plots on lease by Mormugao Port Trust.
Remedy Sought
Petitioner sought quashing of the decision rejecting its technical bid and direction to consider its bid in accordance with law.
Filing Reason
Petitioner's technical bid was rejected by respondent no.1 on the ground of pending litigation between the petitioner and the Port Trust, which the petitioner contended was arbitrary and without application of mind.
Previous Decisions
A suit filed by the petitioner against respondent no.1 regarding termination of lease of another plot was dismissed by the trial court; the appeal (First Appeal No.114/2009) was admitted and an interim order was passed protecting the petitioner's occupation subject to deposit of Rs.60 lakhs per annum.
Issues
Whether the rejection of the petitioner's technical bid by the respondent no.1 on the ground of pending litigation was arbitrary and violative of natural justice.
Whether the tender condition clause 3.5.(i)(f) was correctly invoked to disqualify the petitioner.
Submissions/Arguments
Petitioner argued that the rejection was arbitrary and without application of mind as the litigation pertained to a different plot and the petitioner was in lawful possession under an interim order.
Respondents argued that the tender condition clause 3.5.(i)(f) disqualified bidders having any litigation with the Port Trust.
Ratio Decidendi
The rejection of a technical bid on the ground of pending litigation between the bidder and the tendering authority, without affording an opportunity of hearing and without considering that the litigation pertains to a different subject matter and the bidder is in lawful possession under an interim order, is arbitrary and violative of principles of natural justice. Tender conditions must be interpreted strictly and cannot be applied mechanically to disqualify a bidder.
Judgment Excerpts
The above petition takes exception to the decision taken by the respondent no.1 rejecting the technical bid of the petitioner/e-tender process for allotment of plots belonging to the respondent no.1.
The learned Senior Counsel further submits that the respondents have invoked clause 3.5.(i)(f) of the tender conditions which inter alia provides that the bidder should not have any litigation with the Port Trust.
The rejection of the bid of the petitioner is arbitrary and without application of mind.
Procedural History
The petitioner filed a suit against respondent no.1 regarding termination of lease of another plot, which was dismissed by the trial court. The petitioner appealed in First Appeal No.114/2009, which was admitted and an interim order was passed. Subsequently, the petitioner participated in an e-tender for lease of three plots, submitted a bid, and paid the requisite amount. The petitioner's technical bid was rejected by respondent no.1, leading to the filing of the present writ petition.
Acts & Sections
- Major Port Trust Act, 1963:
