Bidder Cannot Be Disqualified Merely For Delayed Settlement Of Bank Transaction Due To Reasons Beyond Its Control: Delhi HC

The Delhi High Court observed that a bidder cannot be disqualified merely for delayed settlement of the bank transaction due to reasons beyond its

In that context, the Bench of Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora and Justice observed that, "The delayed settlement of the bank transaction by the intermediary Standard Chartered Bank, New York on 20th October, 2023 was beyond the control of the Petitioner herein. The use of mechanism of SWIFT was necessitated as payment had to be made in USD whereas, the Petitioner’s bank account was in INR"

Senior Counsel Saurabh Kripal, along with others, appeared for the petitioner, while ASG Chetan Sharma, along with others, appeared for the respondents.

The petitioner, a Railway Infrastructure provider, filed a writ petition challenging the rejection of its technical bid by IRCON International Limited (Respondent No.1) in a tender for a project in Sri Lanka. The rejection was based on the alleged non-credit of Earnest Money Deposit (EMD) and Tender Cost within the specified time. The petitioner contended that it had made timely electronic bank transfers and uploaded proof of payment. The rejection letter, dated December 20, 2023, was deemed arbitrary and illegal.

The respondent argued that the rejection was in line with the tender conditions, emphasizing the need for EMD and Tender Cost to be received before the deadline. Respondent No.2, declared as the L1 bidder, supported the rejection, asserting that the petitioner failed to deposit the EMD and Tender Cost in USD, as required.

The petitioner's claim of discrimination was based on the fact that all bidders, except Respondent No.2, were disqualified for the same reason.

On perusing the relevant clauses of the agreement, the Court took the considered view that the impugned letter of the Respondent No. 1 disqualifying the Petitioner and M/s Shivakriti International Ltd. is contrary to the clauses of the NIT and therefore, illegal.

Accordingly, the petition was allowed, and it was directed that, "The Respondent No. 1 is directed to provisionally qualify the Petitioner and M/s Shivakriti International Ltd. and open their Financial Bids within three days and award work to the lowest eligible bidder. The Petitioner is restrained from proceeding with award of Tender in favour of Respondent No. 2 on the basis that it is the sole qualified bidder."

Appearances:

Petitioner: Senior Counsel Saurabh Kripal, Counsels Kumar Anuraj Singh, Zain A Khan, Ahsas Puri, Anish Ahlawat

Respondents: ASG Chetan Sharma, Counsels Chandan Kumar, Amit Gupta, Vinay Yadav, Vikramaditya Singh, Kamlesh Ojha, Judhveer Singh Chauhan

Cause Title: SS Rail Works Pvt. Ltd. vs Ircon International Pvt. Ltd.

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