Summary
The Court sustained the hologram-label tender and set aside the High Court’s direction for a fresh process. Limited participation and repeated commercial success did not establish that conditions were tailored to favoured bidders; expert assessment, corrigenda and the tender’s security purpose supported the process. Preference-share investment without control supplied no disqualification under its terms. MSME preference required eligibility to bid. Treating the writ litigation as commercial, the Court awarded quantified costs to Uflex and the State, payable equally by the unsuccessful challengers within four weeks.
Issues
- Whether the tender conditions and bidder relationships justified judicial interference on grounds of favouritism or restricted competition.
- Whether MSME purchase preference displaced qualifying tender conditions.
- Whether realistic costs should follow the outcome of this commercial tender litigation.
Provisions considered
- Articles 14 and 226, Constitution of IndiaTender review remained confined to legality, rationality, fairness and the decision-making process rather than appellate substitution of technical or commercial choices. (¶¶ 1, 2, 3, 4, 5, 6, 7, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50)
- Section 2(aa) and provisos to Section 10(2), Tamil Nadu Transparency in Tenders Act, 1998Domestic-enterprise purchase preference did not remove the need to qualify under the tender conditions; it did not oblige participation by an ineligible partnership. (¶¶ 20, 30, 31, 45, 46)
Held
- Constitutional review prevented arbitrariness, irrationality, bias and mala fides, but did not make the Court an appellate authority on technical specifications, turnover requirements or commercial expediency. The tendering authority retained latitude within those legal limits, particularly for security features intended to deter counterfeit liquor. (¶¶ 1, 2, 3, 4, 5, 6, 7, 40, 41, 42, 43)
- The corrigendum addressed the challenged identification technology and admitted LLPs. Three bidders satisfied technical specifications, although one failed further eligibility requirements; fewer ultimately eligible bidders did not by itself establish deliberate tailoring. Similar specifications elsewhere had produced different successful suppliers. The record did not justify setting aside this process. (¶¶ 14, 15, 19, 34, 35, 37, 39, 44, 45, 47, 48)
- The challengers’ non-participation and eligibility position mattered. Purchase preference for qualifying domestic enterprises did not exempt them from the tender’s requirements or require admission of partnerships. Investment through preference shares without controlling interest also furnished no disqualification under this NIT; the asserted corporate linkages did not justify lifting the veil in this tender dispute. (¶¶ 23, 28, 29, 30, 31, 45, 46, 49)
- The appeals were allowed and the Division Bench order set aside. In this commercial litigation, realistic and proportionate costs should ordinarily follow the event, notwithstanding the writ form. After reviewing bills and adjusting the Advocate-on-Record component, the Court awarded Rs.23,25,750 to Uflex and Rs.7,58,000 to the State. Kumbhat and Alpha were to pay those costs in equal shares within four weeks. (¶¶ 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60)
Result
Appeals allowed; direction to retender set aside. Costs of Rs.23,25,750 to Uflex and Rs.7,58,000 to the State payable by Kumbhat and Alpha in equal shares within four weeks.