Delhi High Court Rejects the Recalling of Tender Process, says there is Malafide Competition Between the Bidders

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The Delhi High Court dismissed a petition contesting malafide intention in the bidding process of South Delhi Municipal Corporation (SDMC). The Division Bench of Justice Vipin Sanghi and Justice Rajnish Bhatnagar heard the matter.

Facts of the Case

The Respondent issued a Notice Inviting Tender (NIT) for regular allotment of a parking space on 16.03.2020. The original date for submission of tender was on 08.04.2020. However, the date for submission of tender and deposit of Earnest Money Deposit (EMD) was extended given the Covid-19 Pandemic. The said extension was till 27.04.2020, 05:00 p.m.

The bidders had to submit their bids in two parts, i.e. Technical Bid and the Financial Bid. The petitioner bade for said tender. He received intimation on 12.05.2020 of his bid’s rejection on technical grounds. On the same day, the petitioner communicated to the Respondent that his regular staff responsible for uploading tender documents was unavailable due to the lockdown. He had engaged services of inexperienced persons to upload the set of documents. The temporary staff failed to upload the correct documents. He claimed that he had submitted the correct documents with the Respondent. The Respondent even made sure that the petitioner’s bid is processed. He did not receive any response to the said communication.

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The petitioner has preferred the present writ petition to seek the following reliefs:

a) To set aside the disqualification letter dated 12.05.2020 issued by the Respondent.

b) To set aside the E-Auction process held on 13.05.2020.

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c) To direct the Respondent to fix a fresh date for E-Auction.

d) To direct the Respondent to accept the physical, technical bid documents submitted by the petitioner.

e) To direct the Respondent to allow the petitioner to take part in fresh E-auction.

Arguments by the Petitioner

The Learned senior counsel claims that the conduct of the Respondent is mala fide. The technical bids opened on 28.04.2020. The Respondent informed the petitioner on 12.05.2020 that his technical bid is rejected. It was one-day before the opening of the financial bid on 13.05.2020. He submitted that the respondents could have communicated the rejection of the technical bid earlier. The petitioner could have availed his right to approach the Court before the opening of the financial bids. The counsel further submitted that the Respondent permitted the petitioner to rectify his documents. In such a case, the Respondent should have opened the financial bid of the petitioner.

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The counsel placed his reliance on an order passed in the case of the same petitioner decided on 28.11.2019. This Court held that the deficiency in the petitioner’s bid in the previously decided case did not suffice to reject the technical bid. The petitioner did not submit a signed copy of the site plan. He later submitted an affidavit that he had inspected the site at the time of the making of his bid. He submitted that the position is similar in the present case as well.

Advocate Uppal also submitted that he is willing to make functional the loss that the Respondent may suffer for the delay in the tender process.

Arguments by the Respondent

Advocate Richa Dhawan, counsel for the SDMC, points out that successful bidders have already received offer letters. They have also received three months of advance payments. She submitted that the petitioner had not uploaded the requisite documents. Furthermore, the fact that the petitioner submitted documents of an earlier tender process dated 20.02.2020 was also highlighted. Thus, the Respondent was justified in rejecting the technical bid of the petitioner.

She stated that in their communication dated 12.05.2020, the Respondent informed the petitioner about the rejection of his technical bid. She submitted that once the bidding process is over, it is not open to the petitioner to seek to interfere by offering higher rates. The counsel also contended that if the technical bid is rejected, it makes no difference whether said rejection’s communication was after 28.04.2020, or on 12.05.2020. The relevant part is that the rejection’s communication was before the opening of the Financial Bids. The claim made by the petitioner that he was permitted to re-submit the correct documents even after 28.04.2020 cannot be accepted. There is no record issued by the SDMC, which permits the petitioner to re-submit the documents.

The petitioner submitted some documents after 28.04.2020, which was received by the Respondent, not following the respondents extended the time for the petitioner. She also said that the reliance placed by the petitioner on order passed 28.11.2019 is not apposite in the facts of the present case. That was the case where the petitioner had not submitted the signed copy of the site plan. However, he had sworn the affidavit which served the same purpose. Hence, the same cannot be the excuse of the petitioner in the present case.

Court’s Decision

The Court rejected the reliance on the order by the petitioner dated 28.11.2019. It also observed that there is no reason to recall the tender process upon the petitioner offering higher rates. Finally, the Court held that the petitioner was underqualified. Hence, his financial bid has not been looked into at all. The Court observed that if such submissions are accepted, it will hit at the very foundation of the bidding process. It would make it uncertain for the bidders to take in any bidding process part severely undermining the public interest.

The Court did not find any merit in this petition. The Court ordered the parties to bear their costs.


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