Court Orders Cancellation of Work Order, Blacklisting of L2 Bidder, and Compensation to L1 Bidder for Arbitrary Rejection
In a significant judgment, the Tripura High Court has declared the award of a government tender to the second-lowest bidder (L2) as arbitrary and illegal, highlighting biases and violations of constitutional principles. The court's decision underscores the importance of fairness and transparency in public contract awards, citing the rejection of the lowest bidder's (L1) tender without valid grounds as a breach of Article 14 of the Constitution of India.
The case, titled "Abu Sufian v. State of Tripura," involved a tender process for construction works related to embankment strengthening in the Unakoti District, Tripura. The petitioner, Abu Sufian, a Class-1(A) contractor, submitted a bid significantly lower than the L2 bidder, M/s S.N. Bhattacharjee & Sons. Despite offering a lower quote, the L1 bidder's tender was rejected on grounds deemed arbitrary by the court. The decision to award the contract to the L2 bidder, at a higher cost, was found to be influenced by bias and favoritism.
The court, comprising Chief Justice M.S. Ramachandra Rao and Justice Biswajit Palit, examined the procedural improprieties and the absence of justifiable reasons for the petitioner's disqualification. The rejection was primarily based on the petitioner's Class-1(A) contractor registration from Assam, which was arbitrarily deemed non-responsive despite being valid and genuine.
The court observed that the authorities acted in a biased manner, favoring the L2 bidder, who not only quoted a higher price but also failed to complete the work within the stipulated timeframe. The court noted that multiple extensions were granted to the L2 bidder, indicating a lack of efficiency and further exacerbating the financial loss to the public exchequer.
Highlighting the principles of fairness and non-arbitrariness under Article 14, the court directed the cancellation of the work order issued to the L2 bidder and ordered the blacklisting of the firm for a year. The authorities were also instructed to pay Rs. 50,000 in costs to the petitioner, acknowledging the financial and reputational damage caused by the arbitrary rejection.
This judgment serves as a critical reminder of the judiciary's role in ensuring transparency and accountability in public procurement processes, reinforcing the need for government entities to adhere to constitutional principles in decision-making.
Bottom Line:
Award of tender to L2 bidder instead of L1 bidder - Arbitrary rejection of L1 bidder's tender without valid grounds violates Article 14 of the Constitution of India. Bias, favoritism, and mala fide action by authorities render the decision illegal.
Statutory provision(s):
Articles 14, 19, and 21 of the Constitution of India.
Abu Sufian v. State of Tripura, (Tripura)(DB) : Law Finder Doc id # 2867983
