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Pre-eligibility criterion cannot be satisfied prior to participation in the tender bid: Calcutta High Court

The petition arose from discrepancies faced by the petitioner in matter related to the tender bidding process; before the High Court bench of Sabyasachi Bhattacharya J., who opined that the eligibility criteria cannot be applied if at all there has been no participation in the auction at all. The matter arose out of bidding for plant and machinery in Devsaria Iron & Steel Co. Private Limited and another Vs. The State of West Bengal and others [WPA No.6792 of 2021].

The petitioners have challenged an e-auction floated by the respondent authorities, through respondent no.4, on February 12, 2021 for sale of decommissioned plant and machinery and items of COGP/DPL and Unit-6, Durgapur Projects Limited. The grievance of the petitioners revolved around alterations in the terms of the original auction catalogue on February 10, 2021, whereas the last date for submitting pre-bid security of Rs.1.5 crore was February 11, 2021. It was also noted for the petitioners that the said alterations, modifying the post-bid conditions and relaxing those, were substantial in nature. Since the petitioners could not participate in the auction sale due to the prohibitive post-bid conditions, it adversely affected the interests of the petitioners. If the alterations were made sufficiently before and/or contained in the original conditions, the petitioners would have participated in the auction.

It was argued through the case law of Meerut Development Authority and Ors. Vs. Association of Management Studies and Ors., reported at (2009) 6 SCC 171 that, by way of judicial review, courts can examine whether the decision-making process was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.

The bench however was not convinced with the ratio laid down in Meerut Development (supra); that the methods to be adopted for disposal of public property must be fair and transparent, providing an opportunity to all the interested persons to participate in the process, in the present case there was no lack of transparency in the methods in view of sufficient opportunity of inspection and prior queries having been provided. The petitioners willingly chose not to participate in the tender.

The determinant standards for all who participated were the same, as per the conditions as those stood prior to the impugned alterations
There arose no question of any pre-eligibility criterion being satisfied prior to participation in the bid. Only participants in the tender could invoke Article 14 of the Constitution of India against successful bidders, if at all, since the other participants in the tender process were on a similar footing as the successful bidder, to whom the post-bid relaxation applied.

The court took the view that the relaxation of post-bid conditions is well within the discretion of the tender-issuing authority. Thus, in the absence of any arbitrariness, mala fides or violation of Article 14 of the Constitution of India and/or any prima facie material to show that the tender terms were altered in a tailor-made manner to suit the convenience of any particular person, even adhering to the principles laid down in the judgments cited by the petitioners, there was no scope for judicial interference in the impugned e-auction.

The court rendered the judgment that, “Thus, the ratio laid down in the judgments cited by the petitioners is not applicable to the present case at all. In view of the above observations, there is no occasion for judicial interference under Article 226 of the Constitution of India to interdict and/or set aside the tender impugned in the present writ petition.”

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