Delhi High Court Upholds UIDAI's Decision to Disqualify "Abnormally Low" Bid in Tender Process
Court emphasizes public interest, affirms tendering authority's discretion in bid evaluation despite procedural lapses.
In a significant judgment, the Delhi High Court dismissed a petition filed by Writer Business Services Pvt. Ltd, challenging the disqualification of its bid as "abnormally low" in a tender process initiated by the Unique Identification Authority of India (UIDAI). The Division Bench, consisting of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela, ruled that the decision to disqualify the petitioner was justified in the larger public interest, despite procedural errors, as no other bidder was willing to match the petitioner's proposed rate.
The case revolved around a Request for Proposal (RFP) issued by UIDAI for Quality Check and Audit Work related to Aadhaar enrolment and data updates. Writer Business Services Pvt. Ltd, which had previously executed similar contracts for UIDAI, emerged as the lowest bidder (L-1) with an "abnormally low" quote for one packet of the tender, raising concerns about its feasibility.
The court noted that while judicial review in tender matters is permissible, interference is limited to cases where decision-making is found to be mala fide, arbitrary, or unreasonable. It emphasized the importance of public interest and the larger objectives of the tender process, stating that the court should be cautious in intervening.
The court examined the tendering authority's process and concluded that procedural lapses did occur, but the overall decision was aligned with public interest. Despite the petitioner's technical qualifications and past performance, the court held that UIDAI's decision to reject the bid was necessary to prevent frustration of the tender process, as other bidders were unwilling to match the rates quoted by the petitioner.
The judgment underscores the discretion afforded to expert committees in evaluating bids, highlighting that courts should not supplant the views of technical or financial evaluation committees with their own, especially in highly technical matters. The court also referenced several precedents from the Supreme Court and other cases to support its decision, reiterating the limited scope of judicial review in contractual matters.
The decision is expected to have significant implications for future tender processes, reinforcing the importance of balanced evaluation criteria and adherence to procedural fairness while safeguarding public interest.
Bottom Line:
Tender Process - Disqualification of the lowest bidder due to "abnormally low" bid - Scope of judicial review in tender matters - The court held that the decision of the tendering authority to disqualify the petitioner's financial/commercial bid was justified in the larger public interest, despite procedural lapses, as no other bidder was willing to match the "rate per packet" quoted by the petitioner.
Statutory provision(s): Article 226 of the Constitution of India, Aadhaar Act, 2016, Clauses 2.4.3 and 2.4.4 of the RFP, General Financial Rules, Clause 7.5.7 of the Procurement Manual.
