In a significant ruling, the Patna High Court dismissed a writ petition challenging a three-year debarment order issued by the North Bihar Power Distribution Company Limited (NBPDCL). The Court held that quoting the price in the wrong unit in a public tender constituted a substantial error and not a minor typographical mistake, thereby justifying the penalty under the tender rules.
Simplified Explanation of the Judgment
The petitioner, a proprietorship firm, had participated in a tender floated by NBPDCL for supplying DPC aluminium winding wire. The tender required bidders to quote prices per metric ton, but the petitioner erroneously quoted prices per kilogram in the designated Annexure-3 of the bid documents.
This discrepancy was noticed during bid evaluation. The petitioner attempted to clarify through letters that their quoted price per kilogram should be treated accordingly, and even submitted a revised computation converting the per kilogram price to a per metric ton rate. However, NBPDCL treated this as a modification of the bid post-submission, which is barred under Clause 1.10(d) of the tender document. Consequently, the company was blacklisted for three years from participating in future NBPDCL tenders.
The petitioner had earlier challenged the blacklisting in CWJC No. 14888 of 2021, leading the High Court to remand the matter for reconsideration. The Court had observed that the action of NBPDCL seemed hypertechnical and had asked the authority to provide a fair hearing.
However, upon reconsideration, NBPDCL upheld its previous decision and issued a fresh blacklisting order dated 26.12.2022. The petitioner then filed the present writ, challenging the revised order.
The Court, after hearing both sides, held that quoting price per kilogram instead of the required metric ton was not a minor or curable error. It further held that the attempt to revise the bid amount after submission amounted to an impermissible modification under Clause 1.10(d) of the tender terms. The clause explicitly states that any modification or withdrawal of bid during the bid validity period invites a suspension ranging from 3 to 5 years.
The Court found no merit in the petitioner’s argument that the error was typographical. It also rejected the plea that since the petitioner would not have won the bid even after correction, the blacklisting was unnecessary. The judges clarified that the procedural sanctity of bidding must be maintained to ensure fairness and transparency in public procurement.
While the Court noted that the blacklisting order lacked clarity in describing mala fide intent, it nonetheless upheld the order due to the admitted violation of tender terms. The Court also refused to reduce the three-year suspension, noting that it was the minimum punishment prescribed under the clause.
Significance or Implication of the Judgment
This judgment reinforces the principle that adherence to tender instructions is crucial in public procurement processes. Even seemingly minor mistakes, if they alter the fundamental terms of a bid, can lead to harsh consequences like blacklisting.
The ruling serves as a warning to suppliers, contractors, and vendors to exercise utmost diligence while participating in tenders, especially those involving technical compliance. Government authorities are also encouraged to ensure clarity and proportionality in their punitive orders to avoid allegations of arbitrariness.
Legal Issue(s) Decided and the Court’s Decision with reasoning
- Whether quoting price in kilograms instead of metric tons is a typographical error or a substantial deviation?
- Court’s Finding: It is a substantial error that affects the integrity of the bid and cannot be treated as a mere typographical mistake.
- Whether the clarification by the petitioner amounts to modification of the bid?
- Court’s Finding: Yes. Attempting to convert the unit after submission constitutes modification, which is barred under Clause 1.10(d) of the tender document.
- Whether the penalty of three years’ blacklisting is excessive?
- Court’s Finding: No. The penalty is the minimum prescribed under the tender rules and is not open to judicial reduction unless the rule itself is challenged.
- Whether Clause 1.10(d) is arbitrary or disproportionate?
- Court’s Finding: The clause was not challenged in this case. Thus, its validity was presumed and applied as written.
Judgments Referred by Parties
- CWJC No. 2991 of 2019 – Aarpee Infra Projects Pvt. Ltd. v. State of Bihar
- Supreme Infrastructure India Ltd. v. Rail Vikas Nigam Ltd.
Case Title
M/s Balaji Enterprises v. North Bihar Power Distribution Company Ltd. & Ors.
Case Number
Civil Writ Jurisdiction Case No. 810 of 2023
Coram and Names of Judges
Hon’ble Mr. Justice P. B. Bajanthri
Hon’ble Mr. Justice Arun Kumar Jha
Names of Advocates and who they appeared for
- For the Petitioner(s): Mr. S.D. Sanjay, Sr. Advocate; Mrs. Parul Prasad, Advocate; Ms. Sushmita Mishra, Advocate
- For the Respondent(s): Mr. Vinay Kirti Singh, Sr. Advocate; Mr. Vijay Kumar Verma, Advocate; Mr. Akhileshwar Singh, Advocate
Link to Judgment
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