Court emphasizes the importance of timely challenges to tender conditions, citing delay and non-participation as grounds for dismissal
In a significant ruling on public procurement, the Delhi High Court has dismissed the writ petition filed by M/s Utkarsh Enterprises and others challenging the tender conditions set by the Directorate of Education, Government of NCT of Delhi. The petitioners sought to quash the bids and issue fresh procurement directives for outdoor gym and sports equipment intended for schools and sports centers under the government's control.
The petitioners, registered Micro, Small, and Medium Enterprises (MSMEs) and GeM portal sellers, claimed the tender conditions were exclusionary, arbitrary, and inconsistent with the GeM framework. Their primary grievances included the requirement for sample submissions, denial of MSME relaxations, and a mandate for a fully functional office and warehouse in Delhi/NCR for three years.
The Court, led by Justices Anil Kshetarpal and Amit Mahajan, underscored the limited scope of judicial review in tender matters, which is confined to examining arbitrariness, irrationality, or illegality. The judgment emphasized that procurement conditions are generally set by the procuring authority and judicial interference is warranted only if conditions are manifestly arbitrary or discriminatory.
The Court noted the petitioners filed their challenge two to three months after the tender publication. Given the substantial progress in the procurement process and the petitioners' non-participation in certain tenders, the Court found that these factors weighed against judicial interference. Additionally, the Court considered public interest in timely completion of procurement, particularly for equipment intended for school children, as a significant factor in its decision.
While the Court acknowledged the potential exclusionary nature of certain tender conditions, it refrained from rendering a final view on their validity, leaving these questions open for examination in appropriate future cases. Ultimately, the petition was dismissed on grounds of delay, laches, and non-participation by the petitioners.
Bottom line:-
Public procurement - A writ petition challenging tender conditions must be filed promptly. Delay, non-participation, and advanced stage of the procurement process may disentitle relief, especially when the conditions are neither arbitrary nor lacking in rational nexus.
Statutory provision(s): Article 226 of the Constitution of India
M/s Utkarsh Enterprises v. Union of India, (Delhi)(DB) : Law Finder Doc id # 2890663
