Case Note & Summary
The petitioners, M.E.Infraprojects Pvt.Ltd and K.K.Carrier, formed a joint venture and participated in an e-tender issued by the Municipal Corporation of Greater Mumbai for hiring vehicles for collection and transportation of municipal solid waste. The tender was invited for the fourth time after previous cancellations due to low response. The petitioners had previously been awarded a similar contract for 2012-2017, which expired in August 2017, but they continued on an ad hoc basis at rates 30% higher than the new bids. Respondent nos.8-10, also a joint venture, submitted a bid and were declared the lowest bidder. The petitioners challenged the award, alleging that the Corporation acted arbitrarily and mala fide by not considering their bid properly and by not invoking a price variation clause in the ad hoc extension. The court examined the tender conditions and found that the petitioners' joint venture did not meet the technical eligibility criteria, specifically lacking experience in solid waste management. The court held that judicial review of tender decisions is limited to cases of arbitrariness, mala fides, or procedural illegality, and no such grounds were established. The court also rejected the claim of legitimate expectation, noting that past contracts do not create a right to future awards. The petition was dismissed, and the Corporation was directed to proceed with the tender process.
Headnote
A) Tender Law - Judicial Review - Scope - Courts can interfere only if decision is arbitrary, mala fide, or procedurally illegal - No right to claim award of contract - Bidder must strictly comply with tender conditions (Paras 10-12).
B) Tender Law - Technical Evaluation - Joint Venture Eligibility - Petitioner's joint venture failed to meet technical criteria as it did not have requisite experience in solid waste management - Corporation's evaluation upheld (Paras 13-15).
C) Tender Law - Price Variation Clause - Corporation's decision to not invoke price variation clause in ad hoc extension was not a ground to challenge tender process - No mala fides established (Paras 16-18).
D) Tender Law - Legitimate Expectation - Petitioner cannot claim legitimate expectation based on past contracts - Tender process must be fair and transparent (Paras 19-20).
Issue of Consideration
Whether the Municipal Corporation's decision to award the tender to respondent nos.8-10 was arbitrary, mala fide, or in violation of tender conditions, and whether the petitioners had a legitimate expectation of being awarded the contract.
Final Decision
The petition is dismissed. The Municipal Corporation is directed to proceed with the tender process in accordance with law.
Law Points
- Tender law
- Judicial review limited to arbitrariness
- mala fides
- or procedural illegality
- No right to claim contract
- Bidder must satisfy tender conditions
- Joint venture eligibility
- Technical evaluation criteria
- Price variation clause
- Ad hoc extension not a right
Case Details
WRIT PETITION (L) NO.2544 of 2018
NARESH H.PATIL ACTING C.J, G.S.KULKARNI, J.
Mr.P.K.Dhakephalkar, Senior Advocate with Mr.Vishwajeet P.Sawant, Mr.Kirit J.Hakani, Mr.Rahus Hakani, Ms.Niyati Hakani I/b. Kirit J.Hakani for the Petitioners; Dr.Milind Sathe, Senior Advocate with Mr.Simil Purohit, Ms.Debashree Mandpe I/b. Ganesh And Co. for Respondent Nos.8 to 10; Mr.J.Reis, Senior Advocate with Mr.Rajiv Chavan, Senior Advocate with Ms.Priyanka Chavan, Ms.Anupama Pawar, Ms.Neelam Kaintura, Ms.Vandana Mahadik for MCGM, Respondent Nos.1 to 7.
M.E.Infraprojects Pvt.Ltd and K.K.Carrier through its Proprietor Mrs.Laxmidevi Jain
Municipal Corporation of Greater Mumbai and others
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Nature of Litigation
Writ petition under Article 226 of the Constitution challenging the award of a tender by the Municipal Corporation of Greater Mumbai for hire of vehicles for collection and transportation of municipal solid waste.
Remedy Sought
Petitioners sought to quash the tender award to respondent nos.8-10 and to direct the Corporation to award the contract to them or to re-tender.
Filing Reason
Petitioners alleged that the Corporation acted arbitrarily and mala fide in evaluating bids and awarding the tender to respondent nos.8-10, despite the petitioners being the lowest bidder in a previous tender and having experience.
Previous Decisions
The tender was invited for the fourth time; earlier three invitations were cancelled due to low response. The petitioners had been awarded a similar contract for 2012-2017, which expired in August 2017, and they continued on ad hoc basis at higher rates.
Issues
Whether the Municipal Corporation's decision to award the tender to respondent nos.8-10 was arbitrary, mala fide, or in violation of tender conditions?
Whether the petitioners had a legitimate expectation of being awarded the contract based on their past performance?
Submissions/Arguments
Petitioners argued that their bid was technically compliant and lowest, and the Corporation's rejection was arbitrary and mala fide, especially as they were not given an opportunity to rectify deficiencies.
Respondents argued that the petitioners' joint venture did not meet the technical criteria, and the Corporation's decision was fair and transparent, with no mala fides.
Ratio Decidendi
Judicial review of tender decisions is limited to cases where the decision is arbitrary, mala fide, or procedurally illegal. The court cannot substitute its own judgment for that of the tender inviting authority. A bidder must strictly comply with tender conditions, and past contracts do not create a legitimate expectation for future awards.
Judgment Excerpts
In this petition under Article 226 of the Constitution, the petitioner nos. 1 and 2 who have formed a joint venture namely M/s M.E. KK (JV), are bidders in an Etender issued by the respondent no.1 Municipal Corporation for Greater Mumbai for the 'Hire of vehicles for Collection and Transportation of Municipal Solid Waste (MSW) including Materials Removed from the Slums in wards for the period of seven years.'
The court cannot sit in appeal over the decision of the tender inviting authority. The scope of judicial review is limited to examining whether the decision is arbitrary, mala fide, or procedurally illegal.
Procedural History
The petition was filed in 2018 challenging the tender award. The court reserved judgment on 29 August 2018 and pronounced it on 3 September 2018.
Acts & Sections
- Constitution of India: Article 226
