Non-Party In Tender Process Have No Locus To Challenge Award Of Tender: Delhi HC
The Delhi High Court reiterated that a non-party in a tender process does not have any locus to challenge the tender award since such a party does not acquire any right in the tender.
The Bench dismissed a petition filed by Primatel Fibcom Ltd. (petitioner) challenging the award of Tender by the Indian Oil Corporation Limited (IOCL) to Commtel Networks Pvt. Ltd. (Commtel), alleging a violation of the tender document.
A Division Bench of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora observed, “The Petitioner herein admittedly did not participate in the bidding process and elected to remain outside the said process. The fact that Petitioner was the intended supplier of SDH equipment of Respondent No. 4 would not give any locus to the Petitioner to challenge the tender process and maintain these proceedings. The issuance of a Commitment Letter dated 02nd June, 2023 by the Petitioner to Respondent No. 4 does not make it a ‘bidder’ in the tender process.”
Advocate Rohit Gandhi represented the petitioner, while Sr. Advocates Raman Kapur and Rajeev Virmani appeared for the respondents.
The petitioner sought the cancellation of the awarded tender by IOCL to Commtel. They requested action against Commtel and Tejas Network Limited (Tejas) for allegedly violating a clause of the tender. They demanded that IOCL adhere strictly to the prescribed procedures for bidding and awarding contracts and sought a directive to resolve their complaint filed.
The key argument by the petitioner was that Commtel and Tejas had a conflict of interest that should have disqualified them under Clause 5.1.6, which prevented “cartelization” and ensured “fair competition.”
The Court stated that the petitioner did not have any locus standi, as they were not direct participants in the tender process but were associated through another company.
The Bench referred to the decision of the Supreme Court in NHAI v. Gwalior-Jhansi Expressway Limited (2018) where it was held that only the entities who participate in the tender process pursuant to a tender notice can be allowed to make grievances about the non-fulfilment or breach of any of the terms and conditions of the tender documents concerned.
“In view of the aforesaid judgment of the Supreme Court, it is clear that a party which has not participated in a tender process does not have any locus to challenge the award of the Tender and cannot be heard to make any grievances as such a party does not acquire any right in the tender,” the Court remarked.
Consequently, the Court held, “In view of the findings above on lack of locus standi, we are refraining from adjudicating on the issue of territorial jurisdiction.”
Accordingly, the High Court dismissed the petition.
Cause Title: Primatel Fibcom Ltd v. Indian Oil Corporation Limited & Ors. (Neutral Citation: 2024:DHC:4657-DB)
Appearance:
Petitioner: Advocates Rohit Gandhi, Hargun Singh, Navdeep Kumar, Akshita Nigam and Nikita Sharma
Respondents: Sr. Advocates Raman Kapur and Rajeev Virmani; Advocates Amit Meharm, Tannishtha Singh, Sambhav, Tushar A. John and Arjun Maheshwari