Facts of the Case

The respondents issued a tender notification dated 18.09.2022 inviting applications from eligible persons for taking shops in the Regulated Market Committee commercial complex at Ramanathapuram on rent.

The petitioner submitted bids for Shop Nos.1, 3, 5 and 6, claiming to be the highest bidder. However, his tender applications were rejected on the ground that he failed to enclose the mandatory documents prescribed under the tender schedule, including proof relating to business eligibility, GST particulars, and other supporting documents.

Aggrieved by the rejection and the selection list dated 30.09.2022, the petitioner approached the Madras High Court seeking quashing of the selection list and a direction to consider his bid as the highest bidder.

 

Issues Involved

  1. Whether a bidder can challenge rejection of his tender for failure to submit mandatory documents.
  2. Whether conditions contained in the tender schedule but not specifically mentioned in the tender notification can still be enforced.
  3. Whether the High Court should interfere with tender decisions under Article 226 when the bidder has not complied with the prescribed conditions.

 

Petitioner's Arguments

  • The petitioner contended that he had quoted the highest bid for the shops.
  • It was argued that the respondents wrongly rejected his applications.
  • According to the petitioner, the additional documentation requirements were not expressly stated in the tender notification and therefore could not subsequently be insisted upon.
  • He sought consideration of his bid despite the rejection.

 

Respondents' Arguments

  • The respondents submitted that the tender schedule clearly prescribed mandatory documents to be enclosed with every bid.
  • The petitioner admittedly failed to furnish those documents.
  • They relied upon an earlier judgment of the High Court holding that once a bidder accepts the tender document and participates in the tender process, the bidder cannot subsequently challenge the tender conditions.
  • It was further submitted that prescribing eligibility conditions is the exclusive domain of the tendering authority and courts ordinarily should not interfere.

 

Court Order / Findings

The Madras High Court dismissed the writ petition and upheld the rejection of the petitioner's tender.

The Court held that:

  • The petitioner admittedly failed to submit the mandatory documents required under the tender conditions.
  • Once a bidder accepts the tender document and participates in the bidding process, the bidder is bound by all its terms and conditions.
  • A participant cannot challenge the validity or applicability of tender conditions after participating in the tender.
  • Determination of tender eligibility conditions is primarily within the authority of the tendering authority.
  • Judicial review under Article 226 is limited and does not permit interference where rejection is based upon non-compliance with mandatory tender conditions.

Accordingly, the writ petition was dismissed and the connected miscellaneous petitions were closed.

 

Important Clarification

This judgment reiterates the settled legal principle that:

  • Mandatory tender conditions must be strictly complied with.
  • Submission of the highest financial bid alone does not create any enforceable right if the bidder is otherwise ineligible.
  • Courts ordinarily will not relax mandatory eligibility requirements.
  • Tender participants are deemed to have accepted every condition contained in the tender document once they submit their bids.
  • Judicial review in contractual and tender matters is confined to examining arbitrariness, mala fides, or illegality and not to rewriting tender conditions.

 

Sections / Provisions Involved

  • Article 226 of the Constitution of India
  • Tender Conditions issued by the Department of Agricultural Marketing and Agri Business
  • Principles governing Judicial Review in Tender Matters

Link to download the order -

https://mytaxexpert.co.in/uploads/1782968405_113compressed.pdf

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