Facts of the Case

This is a public tender/contract law dispute, not a GST case — a valid GST registration was simply one of several standard eligibility documents (along with PAN and Professional Tax returns) required by the tender. Kolkata Municipal Corporation (KMC) floated a tender for supply of liquid chlorine (estimated value about Rs. 4.22 crore) for FY 2023-24. The appellants (Rishikesh Chem and another) and Respondent No. 9 both participated; Respondent No. 9 quoted the lowest price and emerged as L1 bidder. The appellants challenged the tender before a Single Judge, contending that the eligibility criterion of “similar nature of work” had been changed this year from “supply of any water treatment chemical” (as in the previous two years) to “supply of any materials,” allegedly to favour Respondent No. 9, which lacked chlorine-supply experience. The Single Judge dismissed the writ petition, and the appellants appealed to the Division Bench.

Issues Involved

  1. Whether KMC's widening of the “similar nature of work” eligibility criterion was arbitrary or tailor-made to favour a particular bidder.
  2. Whether the appellants, having participated in the tender without objecting to its terms, could challenge those terms after losing.
  3. The permissible scope of judicial review in tender/contract matters under Article 226.

Petitioner's Arguments

  • In previous years' tenders, “similar nature of work” was limited to supply of water-treatment chemicals; this year's expanded definition (supply of any materials) was changed specifically to favour Respondent No. 9, which had no experience supplying chlorine.
  • The scheduled pre-bid meeting never took place, depriving the appellants of an opportunity to raise this objection earlier.

Respondent's Arguments

  • KMC submitted that widening the eligibility criterion allowed greater competition, resulting in a lower price and a saving of about Rs. 80 lakh of public money; chlorine suppliers require no special expertise beyond sourcing from manufacturers and delivering the product.
  • Respondent No. 9 argued the appellants participated with full knowledge of the criteria and could not challenge them only after losing.

Court Order / Findings

  • The Division Bench held that judicial review of tender terms is extremely limited; courts do not sit in appeal over a tendering authority's commercial judgment absent arbitrariness, mala fides, or a criterion tailor-made to eliminate other bidders.
  • Widening the field of eligible suppliers to increase competition and reduce cost was a legitimate exercise of KMC's discretion, not arbitrary or irrational.
  • The appellants' failure to object to the eligibility criteria before participating, and their attempt to challenge them only after losing, weighed against interference.
  • The appeal (MAT 722 of 2023) was dismissed, affirming the Single Judge's dismissal of the writ petition, with no order as to costs.

Important Clarification

This ruling has nothing to do with GST law — the GST registration requirement was uncontested and merely part of KMC's standard tender-eligibility documentation. The judgment is a tender/contract-law precedent on the limited scope of judicial review of eligibility criteria in government tenders.

Sections Involved

  • Constitution of India — Article 226 (limited scope of judicial review in tender matters)

Decision – In Favour of

Decided against the appellants. The appeal was dismissed, and KMC's tender process — including the widened eligibility criteria — was upheld.

Case Details

Court: High Court at Calcutta, Constitutional Writ Jurisdiction (Appellate Side)
Case No.: MAT 722 of 2023 with IA CAN 1 of 2023
Coram: Justice Arijit Banerjee and Justice Apurba Sinha Ray
Date of Judgment: 1 May 2023 (CAV on 26 April 2023)

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