In M/s Frontline (NCR) Business Solutions Pvt. Ltd. vs. Lalit Narayan Mithila University through its Registrar, Rameshwar Nagar, Darbhanga, Bihar & Ors. (2025), Patna High Court's Division Bench of Chief Justice P. B. Bajanthri and Justice Alok Kumar Sinha delivered a 28-page long judgment dated September 24, 2025, wherein, it "reiterated that the scope of judicial review in contractual and tender matters is limited to examining the decision-making process and not to re-appreciate the merits of the decision. In absence of any demonstrable illegality, perversity, or mala fide, this Court finds no reason to interfere with the administrative discretion exercised by the competent authority. Accordingly, the writ petition, being devoid of merit, is liable to be dismissed." The judgment was authored by Justice Sinha. There was only one judgement delivered on September 2025 by the High Court.
The petitioner in the present writ application had prayed for issuance of a rule NISI in the nature of writ of mandamus commanding the respondents to disclose all the relevant documents including the bid documents submitted by respondent no. 4 being one of the bidder who has been declared successful bidder after opening of the price bid as ‘L1’ in violation of the terms and conditions of the tender documents/ Notice Inviting Tender (NIT). It prayed for issuance of a rule NISI in the nature of writ of mandamus directing the respondents to disclose the decision of the tender committee declaring the respondent no. 4 after opening of the financial bid as ‘L1’. It sought issuance of a rule NISI in the nature of writ of certiorari to quash and cancel the decision of the tender committee dated August 6, 2025 by which the respondent no. 4 was been declared as ‘L1’. It also prayed for issuance of a writ of mandamus directing the respondents to consider the matter afresh and to direct that the work should be awarded to the bidder who has submitted the bid complying all the provisions of NIT.”
The petitioner's counsel submitted that the petitioner was a company incorporated under the provisions of the Companies Act. It approached the High Court under Article 226 of the Constitution, being aggrieved by the decision of the Tender Evaluation Committee dated August 6, 2025, whereby Samanta Security and Services Pvt. Ltd, the respondent no. 4 was declared as the successful bidder (L1) in complete violation of the mandatory terms and conditions of the Notice Inviting Tender (NIT). It contended that the tender in question was issued by Vice-Chancellor, Lalit Narayan Mithila University through its Registrar, Rameshwar Nagar, Darbhanga, Bihar, respondent no. 2 and Registrar, Lalit Narayan Mithila University Rameshwar Nagar, Darbhanga, Bihar, the respondent no. 3 vide advertisement no. EST/01/25 for “Hiring of agency for providing Security and Housekeeping service for the L.N. Mithila University, Darbhanga.” The counsel pointed out that the tender invited as per section III Special Conditions of Contract, the intending bidders were required to comply besides other terms and conditions of the NIT, one of the terms & conditions which forms part of Section no. III of the Special Conditions of Contract.
The petitioner’s counsel submitted that three bidders, including the petitioner and respondent no. 4, were found technically qualified and, accordingly, their financial bids were opened on August 6, 2025. However, despite the categorical stipulation in the tender conditions, respondent no. 4 quoted less than the minimum rate prescribed for EPF and, more significantly, quoted “NIL” in the Bonus column. The petitioner, on the other hand, quoted Bonus @ 8.33% and EPF @ 13% in strict compliance with the prescribed format. It was contended that, had respondent no. 4 quoted the statutory minimums as mandated, it would have stood relegated to the position of ‘L3’ and could not have been declared successful. Therefore, the counsel for the petitioner submitted that the quotation of ‘NIL’ in respect of statutory dues such as EPF and Bonus cannot be regarded as a clerical error but amounts to a material non-compliance of the tender conditions as well as a breach of statutory obligations under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Payment of Bonus Act, 1965, and the Minimum Wages Act. He urged that the acceptance of such a non-compliant bid by the respondents resulted in conferring an unfair advantage upon respondent no. 4, thereby violating the doctrine of level playing field in public procurement, which flows from Article 14 of the Constitution. He also submitted that immediately upon declaration of the result on August 6, 2025, the petitioner submitted a detailed representation on August 6, 2025 before respondent no. 3 highlighting the illegality and arbitrariness in the decision of the Tender Committee. Another technically qualified bidder, namely Elitefalcons Pvt. Ltd., also lodged a representation on August 7, 2025 raising identical grievances. However, both representations were neither considered nor replied to, thereby demonstrating clear bias and favoritism extended to respondent no. The inaction of the respondents in not responding to the objections filed by the unsuccessful bidders was asserted to be violative of the principles of natural justice, particularly the right to a fair hearing.
The petitioner's counsel also submitted that the tender, unlike in the past eight years where the engagement of security services was initially for two years extendable for one more year, was awarded for a period of four years, extendable for two further years on satisfactory performance. Such a departure from past practice, reinforced the suspicion that the impugned tender has been tailored to favour respondent no. 4 and to secure its engagement for an unusually long term of six years, thereby excluding fair competition for a significant duration. Therefore, he argued that the impugned action of the respondents in awarding the contract to respondent no. 4, despite its non-compliance with mandatory statutory requirements, was arbitrary, unreasonable, and malafide, and was liable to be interfered with by the High Court in the exercise of its writ jurisdiction. It was urged that the action of the respondents not only undermined the statutory labour law protections available to the workmen who were to be engaged under the contract but also had serious financial implications involving public funds.
The Division Bench grappled with the following issues in questions:
1. Whether the present writ petition can be entertained, particularly when it has been instituted after the declaration of the result of the financial bid?
2. Whether respondent no. 4 has complied with the mandatory tender conditions in relation to statutory contributions towards Bonus, Employees’ State Insurance (ESI), House Rent Allowance (HRA), and other allied components, or whether such deviations, if any, would entail disqualification?
3. Whether Condition No. 3 of the Special Provisions, which mandates that statutory wages and deductions should be quoted strictly as per norms, is required to be interpreted in consonance with the governing legislations such as the Payment of Bonus Act, 1965, the Employees’ State Insurance Act, 1948, and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952?
4. Whether the decision of the University in declaring respondent no. 4 as the lowest bidder (L-1) and awarding the contract in its favour suffers from arbitrariness, mala fides, or violation of Article 14 of the Constitution of India, thereby warranting interference by this Court in exercise of its writ jurisdiction?
With regard to the first question the Division Bench drew on Supreme Court's decisions in Jagdish Mandal vs. State of Orissa reported in (2007) 14 SCC 517 and in State of U.P. vs. Sudhir Kumar Singh reported in (2020) 10 SCC 492. In the former, it held that it was impermissible except in cases of patent illegality or mala fides, which must be specifically pleaded and proved. Mere dissatisfaction of an unsuccessful bidder is no ground to disturb a concluded contract. In the latter it reiterated that a concluded contract cannot be lightly disturbed by writ proceedings unless prejudice caused by a patent illegality is clearly established. Justice Sinha observed: "this Court is of the opinion that the writ petition, having been instituted after the declaration of the financial bid and there is a subsequent execution of agreement dated 30.08.2025, and thus, cannot be entertained at this stage. The challenge is belated, seeks to unsettle a concluded contract, and does not warrant interference."
As to the second question, Justice Sinha observed:"this Court finds that respondent no. 4 has complied with the mandatory tender requirements concerning Bonus, ESI, EPF, and allied components. The deviations alleged by the petitioner are either immaterial or misconceived, and do not warrant disqualification and the objection raised by the petitioner is without merit."
With regard to the third question, Justice Sinha observed:"the Court finds that respondent no. 4’s financial bid fully complies with Condition No. (iii) of the Special Provisions. The entries correctly reflect statutory requirements under the Bonus Act, ESI Act, and EPF Act while adhering to the prescribed format for evaluation purposes. No deviation or non-compliance arises, and consequently, the bid of respondent no. 4
cannot be disqualified on this ground."
As to the fourth question, Justice Sinha relied on Supreme Court's decisions in Tata Cellular vs. Union of India, (1994) 6 SCC 651, in Central Coalfieds Limited vs. Sll-Sml (Joint Venture Consortium) CIVIL APPEAL NO. 8004 OF 2016 and in Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. reported in (2016) 16 SCC 818. In the former the Court laid down that judicial review in tender matters is limited to examining the decision-making process and not the merits of the decision itself. The second decision one was based on the decision in the former. The third decision reiterated that in the terms of invitation to tender are in the contractual domain, and the employer’s interpretation is to be accorded deference unless it is patently unreasonable.
Justice Sinha concluded in the penultimate paragraph that "the University’s decision in declaring respondent no. 4 as the lowest bidder and awarding the contract in its favour is neither arbitrary nor mala fide. The decision is rational, legally sustainable, and in accordance with both the terms of the NIT and the statutory framework governing the statutory components of the bid. Consequently, no interference under Article 226 of the Constitution is warranted on this ground."
No comments:
Post a Comment