Delhi High Court: A Bench comprising of S. Ravindra Bhatt and Yogesh Khanna, JJ. upheld the grant of tender to an Israel based system integrator (second respondent herein), for procurement of stabilized Remote Control Guns, the end user being the Indian Navy and Indian Coast guard.

The petitioner, a U.K. based system integrator that had participated in the tender process but failed to be the lowest bidder, contended that the respondent company’s bid should not be considered successful because it lacked Congressional sanction from the country of origin, that is, the United States. This was therefore in violation of the Request for Proposal with respect to the procurement and hence the bid was to be disqualified. It was further added that authorizations received by the US Government were limited to testing of the equipment in Israel and that the export wasn’t permitted. In the event of this bid being successful, the petitioner stated that it would impeach upon the national security and would hamper the reputation of the Indian Government.

Union of India in its submissions pointed out that the complaint had been filed in the event of the petitioner’s failure to procure the tender. It was made clear that both the bids had qualified Technical Evaluations, Field Trials and Staff Evaluations and assessments of Commercial Negotiation Committee and Technical Oversight Committee. Also, the US Government had permitted export of guns for testing in Israel and had also exported manuals and other maintenance documents involving Transfer of Technology to the Indian Government.

The Court concluded that the position in the US with respect to such authorizations is a two step process, one at the trial stage and one after the contract is awarded, which did not imply violation of conditions in the subject tender. Therefore, the petition was dismissed and the award of tender to the respondent company was upheld. [Emdigital Limited v. Union of India, 2017 SCC OnLine Del 8939, decided on 03-07-2017]

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