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Chhattisgarh High Court: A Division Bench of P.R. Ramchandra Menon and Parth Prateem Sahu JJ., dismissed the petition applying the principle of judicial restraint in administrative matters.

The facts of the case are such that petitioner is an enterprise registered under the Micro, Small and Medium Enterprise (Development) Act, 2006, engaged in manufacturing of ‘Ferro Vanadium’ since 1996. Respondent floated tender for purchase of Ferro Vanadium dated 27-6-2019. Petitioner submitted bid and upon conclusion of tender proceeding, the petitioner was declared as successful bidder vide Letter of Acceptance (LoA) dated 9-9-2019 for supply of 120 MT of Ferro Vanadium to various subsidiaries/steel plants of the Steel Authority of India (for short ‘SAIL’). Pursuant to the LoA, respondent BSP placed purchase to be supplied partially by 3-12-2019 and remaining by 15-2-2020. The petitioner failed to complete the second phase of supply within the scheduled period having a backlog of supply. Respondent floated another tender dated 30-6-2020, last date of submission of bid initially being fixed as 14-7-2020, which was extended till 25-7-2020. Petitioner in view of Clause 2 (c) of the RFQ was not eligible to participate in the tender proceeding, hence the petitioner requested respondent BSP vide email dated 11-7-2020 to grant extension of delivery period so that the petitioner may become eligible to submit its bid in RFQ dated 30-6-2020. Petitioner made several efforts including approaching the Chief Executive Officer of respondent BSP vide email dated 22-7-2020. Petitioner submitted its bid on 13-7-2020. Respondent BSP has issued an amended purchase order in favour of petitioner to enable it to clear its previous backlog of 13.5MT of Ferro Vanadium, to which the petitioner complied. Thereafter on 6-8-2020, the petitioner requested respondent BSP to consider its bid and to allow the petitioner to participate in the reverse auction. This email was replied by the respondent BSP vide email dated 12-8-2020 in which it is mentioned that petitioner’s bid was not found suitable as the petitioner could not qualify eligibility criteria as mentioned in Clause 2 (c) of the RFQ. This made the petitioner filed this writ petition.

Counsel for the petitioner Rishabh Garg submitted that due to unprecedented global pandemic ‘Covid-19’ the petitioner could not be able to procure raw material from the international market. It was further submitted that the action of respondent authorities in sitting over the application submitted by petitioner for extension of the delivery period since 22-6-2020 for about 45 days is an arbitrary exercise of powers. He submitted that act of non-issuing order of extension of the delivery period has deprived the petitioner of competing in a tender proceeding which is violative to Article 19 (1) (g) of the Constitution of India.

Counsel for the respondent Ashish Surana submitted that tender issuing authority/body is different than the authority/body which places purchase order and having discretion and authority for granting an extension of delivery /supply period of the period, as mentioned in the purchase order issued by it. It was further submitted that the period was expired much prior to the declaration of lock-down in the country due to pandemic Covid-19 i.e. on 12-2-2020 itself, whereas lock-down has been declared only on 24-3-2020. It was also submitted that petitioner has been sitting on his rights time and again inspite of remedy being available and petitioners being fully aware of the provisions in the tender document.

The Court relied on judgment titled Sterling Computers Limited v. M&N Publications Ltd., (1993) 1 SCC 445 which observed:

“While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process the courts can certain examine whether ‘decision making process’ was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.”

The Court observed that in the tender proceedings while exercising the powers of judicial review under Article 226 of the Constitution of India the Court is having very limited jurisdiction to interfere with the tender proceeding. It is to be seen whether the ‘decision-making process’ is correct or not.

After perusing the facts, submissions and observations laid above, the Court held that tender notification dated 30.6.2020 for procurement of Ferro Vanadium has been issued by the Central Procurement Agency of the SAIL, the petitioner could not meet out the eligibility criteria in terms of Clause 2 (c) as he was having more than 10% of backlog of supply of Ferro Vanadium of earlier purchase order given to him by SAIL, which is the basis of rejection of petitioner’s bid. There is no challenge to Clause 2 (c) of NIT on any grounds.

In view of the above, the petition stands dismissed and disposed off.[RR Ferro Alloys (P) Ltd. v. Bhilai Steel Plant, 2020 SCC OnLine Chh 406, decided on 19-10-2020]


Arunima Bose, Editorial Assistant has put this story together