Facts of the Case

The petitioner, M/s Aroon Food Services Pvt. Ltd., participated in a tender floated by the Airports Authority of India (AAI) for the Master Concession to Design, Fit-Out, Finance, Develop, Market, Operate, Maintain and Manage Food & Beverage Outlets at the New Domestic Terminal Building (T1), Biju Patnaik International Airport, Bhubaneswar.

The bid consisted of technical and financial components. During technical evaluation, AAI identified certain deficiencies and issued a shortfall notice requiring the petitioner to furnish the missing documents. After considering the documents submitted, AAI rejected the petitioner's technical bid on the ground that mandatory tender requirements remained unfulfilled. Consequently, the contract was awarded to another technically qualified bidder.

The petitioner challenged the rejection of its technical bid and the consequential award of the contract before the Orissa High Court.

Issues Involved

  1. Whether the Airports Authority of India was justified in rejecting the petitioner's technical bid for non-compliance with mandatory tender conditions.
  2. Whether the deficiencies pointed out by the petitioner were merely technical or constituted material deviations from the Request for Proposal (RFP).
  3. Whether the High Court should interfere with the tender evaluation process in exercise of its writ jurisdiction under Articles 226 and 227 of the Constitution.

Petitioner’s Arguments

  • The petitioner contended that the rejection of its technical bid was arbitrary, unreasonable and violative of Article 14 of the Constitution.
  • It argued that the certificate relating to affiliate details under Technical Form-4 was not applicable to its case.
  • It submitted that there was no requirement to furnish additional equipment details in the manner alleged by the authorities.
  • It further contended that the brand-related information was marked "Not Applicable" and therefore supporting documents were not required.
  • The petitioner alleged that the rejection of three bidders resulted in only one technically qualified bidder, thereby raising doubts about the fairness and competitiveness of the tender process.

Respondent’s Arguments

The Airports Authority of India submitted that:

  • The petitioner failed to comply with several mandatory conditions even after receiving a shortfall notice.
  • Mandatory documents relating to affiliate certification, proposed equipment list, brand details and supporting documentary evidence were not furnished in accordance with the RFP.
  • Documents submitted outside the prescribed portal or beyond the prescribed procedure could not be considered.
  • Tender conditions were mandatory and applied equally to all bidders.
  • Judicial review in contractual matters is limited, particularly where the tendering authority has acted fairly and strictly in accordance with the tender conditions.

Court Findings

The Orissa High Court observed that:

  • Tender conditions constituted the governing framework of the bidding process and every bidder was required to comply with them strictly.
  • The petitioner had been granted an opportunity through the shortfall notice to remove deficiencies.
  • Despite such opportunity, the petitioner failed to furnish several mandatory documents prescribed under the RFP.
  • The deficiencies related to substantive eligibility requirements and were not mere procedural or technical irregularities.
  • Judicial review in tender matters is confined to examining arbitrariness, mala fides or illegality and not to substituting the Court's opinion for that of the tender evaluation committee.
  • Since the Airports Authority acted strictly in accordance with the tender conditions, there was no ground for interference under Articles 226 and 227 of the Constitution.

Court Order / Decision

The Orissa High Court upheld the decision of the Airports Authority of India rejecting the petitioner's technical bid and declined to interfere with the award of the contract to the successful bidder.

Accordingly, the writ petition was dismissed and the tender process was sustained.

Important Clarification

This judgment reiterates that:

  • Courts ordinarily do not interfere with tender evaluation unless the decision is arbitrary, mala fide or contrary to law.
  • Mandatory tender conditions must be complied with strictly.
  • A bidder cannot seek relaxation of essential eligibility requirements after submission of bids.
  • Opportunities granted through shortfall notices do not permit alteration or substitution of mandatory requirements beyond the framework of the RFP.
  • Judicial review is limited to examining the decision-making process and not the commercial wisdom of the tendering authority.

Important Case Laws Referred

  • Poddar Steel Corporation v. Ganesh Engineering Works
  • Rashmi Metaliks Ltd. v. Kolkata Metropolitan Development Authority
  • Montecarlo Ltd. v. NTPC Ltd.
  • Caretel Infotech Ltd. v. Hindustan Petroleum Corporation Ltd.
  • Silppi Constructions Contractors v. Union of India
  • Meerut Development Authority v. Association of Management Studies
  • Directorate of Education v. Educomp Datamatics Ltd.
  • Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd.
  • Bharat Coking Coal Ltd. v. AMR Dev Prabha
  • Galaxy Transport Agencies v. New J.K. Roadways


Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785391696_2319compressed.pdf

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