Summary
The Supreme Court set aside BCCL's rejection of the appellant's technical bid and the award of a coal mining contract to Respondent No. 8, holding that the bid was wrongly rejected because the power of attorney was notarised a day after the bid documents were signed, while Respondent No. 8's bid, which lacked the audited annual reports mandated by Clause 10 of the NIT, was accepted and allowed to be cured after the technical bids were opened; the decision was arbitrary, discriminatory and violated Article 14.
Issues
- Whether BCCL was justified in rejecting the appellant's technical bid because the bid documents were signed on 13.11.2023 while the power of attorney dated 07.11.2023 was notarised on 14.11.2023.
- Whether BCCL could accept the technical bid of Respondent No. 8, which did not include the audited annual reports required by Clause 10 of the NIT, and call for them after the technical bids were opened.
- Whether the Court should decline to interfere because the project is a large infrastructure project and an agreement had already been signed with the successful bidder's SPV.
Provisions considered
- Section 2, Powers of Attorney Act, 1882An instrument executed by the donee under the authority of the donor is as effectual as if executed by the donor. The power of attorney was validly executed in favour of the signatory and notarised before submission, so the appellant's bid was duly authorised. (¶ 19)
- Article 14, Constitution of IndiaPublic authorities awarding contracts must act fairly, transparently and without arbitrariness or favouritism; BCCL's unequal treatment of the two bidders was held arbitrary and discriminatory. (¶¶ 21, 25, 27, 29)
- Clause 10 (with Clauses 2.1.6 and 2.2.5 of the Instructions to Bidders), Notice Inviting Tender dated 16.08.2023 (BCCL)Required self-certified and notarised scanned copies of qualification documents, including audited annual reports for three years and a power of attorney in the prescribed format, with the bid. Read as mandatory for financial capacity but not requiring notarisation of the POA before the bid was signed. (¶¶ 13, 14, 15, 18)
Held
- Submission of scanned audited annual reports for three financial years to show financial capacity was a mandatory qualification requirement under Clause 10 of the NIT read with Clause 2.2.5 of the RFB. (¶ 15)
- Respondent No. 8 did not upload its audited annual reports by the bid deadline and furnished them only on 17.04.2024 after the technical bids were opened; its bid deserved rejection at the threshold, and the plea that only 'shortfall documents' were called for was rejected. (¶¶ 16, 17, 18)
- The NIT did not require the power of attorney to be notarised before the bid documents were signed; since the POA was in the prescribed format and notarised before the bid was submitted within time, the signatory had authority and the appellant's bid complied with Clause 10. (¶¶ 18, 19)
- Rejecting the appellant's bid on an extraneous ground while accepting the non-compliant bid of Respondent No. 8 and letting it cure the defect after the technical bids were opened was arbitrary and illegal. (¶ 20)
- Courts do not sit in appeal over contract awards and review only the decision-making process, but decisions of public authorities must be free from arbitrariness, bias and mala fides; an employer may deviate from an essential tender term only if the deviation applies to all bidders. (¶¶ 21, 23, 24, 25, 26, 27, 28)
- That the project was a mega infrastructure project and an agreement had been signed with Respondent No. 8's SPV did not prevent interference once the decision was found grossly arbitrary, discriminatory and violative of Article 14. (¶ 29)
Result
Appeal allowed; BCCL's decision dated 06.05.2024 rejecting the appellant's technical bid and declaring Respondent No. 8 the successful bidder set aside along with all actions and agreements made under it; BCCL free to start a fresh tender process in accordance with law.