Facts of the Case

This is a government-tender/contract-law dispute; the petitioner's GST certificate is mentioned only once, among several documents submitted to support a corporate name change, and the case involves no question of GST law. Loadstar Equipment Ltd. (formerly a private limited company) bid for a Container Corporation of India (CONCOR) tender for design, manufacture, supply and commissioning of 20 forklifts of 35-tonne capacity, valued at Rs. 38.11 crore. Only two bidders participated. After the technical bids were opened, CONCOR raised several queries about discrepancies — including a work-experience certificate issued to a third-party supplier rather than the petitioner directly — and, after the petitioner responded, rejected the petitioner's bid as technically disqualified by a communication dated 18 April 2023, without assigning reasons. The petitioner challenged this disqualification before the Delhi High Court.

Issues Involved

  1. Whether CONCOR's rejection of the petitioner's technical bid, principally on the ground that a work-experience certificate was issued in favour of a third-party supplier (who had since withdrawn from the tender) rather than the petitioner-manufacturer directly, was arbitrary.
  2. The scope of judicial review available under Article 226 in tender disputes.

Petitioner's Arguments

  • The petitioner had the requisite experience and had previously supplied the specified machines; the disqualification reason given was completely arbitrary.
  • The supplier relied upon for the work-experience certificate had withdrawn from the tender before the last date, so this was not a case of both a manufacturer and its dealer relying on the same certificate to double-count experience.

Respondent's Arguments

  • The purported experience certificate was only a purchase order executed by a supplier that was not itself a listed company, and so did not meet the tender's Clause 2.1(a) eligibility requirement.
  • The certificate from APL Apollo Steel Pipes, relied on by the petitioner, had actually been issued in favour of the supplier (M/s Excellent Engineering), not the petitioner-manufacturer, and so could not be counted towards the petitioner's own eligibility.

Court Order / Findings

  • The Court examined the tender clauses (2.1(a), 5.4, and Annexures 10 and 11) and found that they required the manufacturer to demonstrate it had successfully supplied and commissioned the machine — which the certificate from APL Apollo Steel Pipes did establish, showing the petitioner's machine had in fact been supplied and installed via the (now withdrawn) supplier.
  • Relying on City and Industrial Development Corporation of Maharashtra vs Shishir Realty (2021), the Court reiterated that while judicial review of tender decisions is limited, courts must intervene where State action is arbitrary or unreasonable, since Article 14 demands fairness even in contractual matters.
  • It held that CONCOR's reason for rejecting the certificate — that it was issued in the supplier's name rather than the petitioner's — could not be sustained, since the document itself established the petitioner's compliance with the eligibility criteria.
  • Having earlier directed CONCOR to open the petitioner's financial bid during the hearing, the Court noted the petitioner was in fact the lowest bidder.
  • The writ petition was allowed, and CONCOR was directed to proceed with the tender in accordance with law (implicitly treating the petitioner as technically qualified).

Important Clarification

This is a tender/contract-law ruling on arbitrary rejection of a technical bid — it decides no question of GST law, notwithstanding the incidental reference to the petitioner's GST certificate as one of several documents submitted in connection with its corporate name change.

Sections Involved

  • Constitution of India — Article 14 and Article 226
  • CONCOR's Notice Inviting Tender (NIT) — Clauses 2.1(a), 2.1(b) and 5.4

Decision – In Favour of

Decided in favour of the petitioner; the disqualification was quashed and CONCOR directed to proceed with the tender treating the petitioner as qualified. Not a GST ruling.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: W.P.(C) 5040/2023 & CM APPL. 19721/2023
Coram: Hon'ble the Chief Justice Satish Chandra Sharma & Hon'ble Mr. Justice Subramonium Prasad
Date of Decision: 4 July 2023

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