Article 226 Powers Cannot Be Contracted Out: Calcutta High Court Asserts Jurisdiction in Railway Tender Dispute

The High Court of Calcutta, under Justice Sabyasachi Bhattacharyya, has dismissed a writ petition by MRT Signals Limited challenging the rejection of its technical bid for a railway signaling project. The ruling reaffirms the court’s jurisdiction despite a forum selection clause, emphasizes the inapplicability of last-minute tender amendments, and underscores the critical need for strict adherence to bid submission requirements.

The High Court confirmed its jurisdiction to hear the case under Article 226 of the Constitution, despite a forum selection clause designating Bhopal courts. “The provisions under Article 226 cannot be contracted out by selecting one of the two competent forums as there cannot be an estoppel against any provision of Constitutional law,” the court observed. The reception of the rejection notice in Kolkata, affecting the petitioners’ business, was deemed sufficient for the court to assume jurisdiction (Paras 4, 6-7, 22-39).

The petitioners argued that Amendment No. 5, which made them eligible to bid, should be applicable. However, the court noted the Ministry of Railways’ notification prohibiting amendments within fifteen days of the bid submission deadline. “The corrigendum came into effect barely five days before the bid submission closing date, clearly falling within the excluded zone,” Justice Bhattacharyya ruled, thereby deeming the amendment inapplicable (Paras 9, 41-49).

A key issue was the non-uploading of Appendix-IB with the technical bid, leading to its rejection as non-responsive. The court upheld the tender authority’s decision, emphasizing that Appendix-IB’s submission with the technical bid was mandatory. “Submission of Appendix-IB along with the technical bid is a sine qua non for eligibility at the technical stage,” the court concluded, affirming the bid rejection on these grounds (Paras 10-15, 51-57).

Justice Bhattacharyya stated, “The decision-making process of the respondents was perfectly in tune with the terms and conditions of the tender document and the principles of Natural Justice,” highlighting the meticulous adherence to procedural requirements by the tendering authorities.

Conclusion: The dismissal of the writ petition by the High Court of Calcutta underscores the judiciary’s commitment to uphold the integrity of the tendering process. By affirming the rejection of the technical bid based on non-compliance with specified requirements and inapplicability of last-minute amendments, the judgment reinforces the necessity for bidders to strictly adhere to all stipulated criteria. This ruling is expected to influence future tender processes, emphasizing the importance of compliance and timely submissions.

Date of Decision:24^th May 2024

MRT Signals Limited and another vs. Union of India and others