Bidders Participating In Tender Process Have No Other Right Except The Right To Equality & Fair Treatment In Matter Of Evaluation Of Competitive Bids: SC
The Supreme Court has held that the bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids.
The Court allowed the appeal filed by the Indore Vikas Praadhikaran (IDA/Appellant), setting aside the judgment of the Madhya Pradesh High Court, which had directed the allotment of land to Shri Humad Jain Samaj Trust (Trust/Respondent), the highest bidder in a public auction.
The Bench of Justice Bela M. Trivedi and Justice Satish Chandra Sharma observed, "In the absence of allotment letter and acceptance of highest bid, no relief could have been granted in favour of respondent No.1 as there was no concluded contract in the matter and the decision taken by the Tender Evaluation Committee to generate more revenues could not have been interfered with in the manner and method as has been done by the Division Bench of the High Court of Madhya Pradesh at Indore Bench. The bidder has no right in the matter of bid except of fair treatment and cannot insist for further negotiation as has been done in the present case.”
Senior Advocate Balbir Singh represented the Appellants, while AOR Rakesh Dahiya appeared for the Respondents.
A tender process was initiated by the IDA through a Notice Inviting Tender (NIT) for leasing out a plot of land measuring. The Trust emerged as the highest bidder.
Subsequently, the IDA's Tender Committee discovered that property tax arrears of Rs. 1.25 crores on the land had not been factored into the base price. The Committee recommended rejecting all bids and issuing a fresh NIT with a revised reserve price which was approved by the IDA Board. The Trust was informed of the rejection of its bid and its earnest money was refunded. A second NIT was issued, but the Respondent did not participate.
Aggrieved by the issuance of the second NIT, the Respondent filed a Petition challenging IDA's decision. The Single Bench of the High Court dismissed the Petition, holding that the highest bidder did not acquire a vested right to the land. However, the Division Bench, in its Order set aside the Single Bench decision and directed the IDA to allot the land to the Respondent if it agreed to pay the revised rate.
The Supreme Court held that in the absence of an allotment letter and acceptance of the highest bid, “no relief could have been granted in favour of respondent No.1 as there was no concluded contract in the matter and the decision taken by the Tender Evaluation Committee to generate more revenues could not have been interfered with in the manner and method as has been done by the Division Bench of the High Court of Madhya Pradesh at Indore Bench.”
The Court referred to its decision in Haryana Urban Development Authority v. Orchid Infrastructure Developers Pvt. Ltd. (2017) wherein it was held, “The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.”
Consequently, the Court held, “The terms and conditions of NIT, particularly condition No. 6, empowers the IDA to accept or reject any or all bids. In the present case, the bid was rejected for valid and cogent reasons and, therefore, the order passed by the Division Bench of the High Court of Madhya Pradesh is set aside.”
Accordingly, the Supreme Court allowed the Appeal.
Cause Title: Indore Vikas Praadhikaran (IDA) & Anr. v. Shri Humud Jain Samaj Trust & Anr.
Appearance:
Appellants: Senior Advocate Balbir Singh; AOR Vanshaja Shukla
Respondents: AOR Rakesh Dahiya and Pashupathi Nath Razdan
