‘Factual Disputes Alone Cannot Derail Tender Process,’ Rules Allahabad High Court in Maha Kumbh Supply Case

Allahabad High Court has dismissed writ petitions challenging the tender process for the supply of sal wood sleepers and edgings for the 2025 Maha Kumbh Mela in Prayagraj. The judgment, delivered by a bench comprising Justices Shekhar B. Saraf and Manjive Shukla, concluded that the tender process was free from arbitrariness and bias, despite claims by unsuccessful bidders of non-compliance with tender conditions. The court emphasized that the government’s discretion in tender matters, particularly regarding technical requirements and inspections, was exercised fairly.

Two entities, Dynamic Infracon Pvt. Ltd. and M/s Bengal Wood & Allied Products, filed writ petitions under Article 226 of the Constitution of India challenging the tender process initiated by the Public Works Department (PWD) of Uttar Pradesh. The tender, issued in May 2024, sought suppliers for sal wood sleepers and edgings for constructing pontoon bridges at the upcoming Maha Kumbh Mela in 2025. After submitting bids, the petitioners were found unsuccessful in the financial bidding stage, with contracts awarded to the lowest bidders.

The petitioners contested the award, alleging that the successful bidders, led by Dhoramnath Traders (L1), did not meet the eligibility criteria, specifically regarding stock requirements. They also claimed that the mandatory physical inspection of stocks was not conducted as stipulated in the tender document, making the entire process arbitrary.

The petitioners contended that the lead member of the L1 consortium, Dhoramnath Traders, did not possess the required 51% of the minimum 1000 cubic meters of sal wood stock, as mandated by the bid document. The petitioners cited a report dated June 24, 2024, from the Assistant Range Officer, Raipur, showing that the lead member had only 386.878 cubic meters of stock. However, the court found that the respondents had submitted evidence, including a June 7, 2024 certification from the Assistant Forest Range Officer, indicating a total stock of 1,131.97 cubic meters, thereby meeting the eligibility criteria.

"The factual disputes raised cannot lead to interference by this Court in a tender process, especially when documentary evidence has been submitted to counter the claims," the bench stated.

A key contention was the failure to conduct a physical inspection of the stock, as required under clause 6(g) of the tender document. The petitioners argued that this was a mandatory provision, and non-compliance rendered the process invalid. The court, however, interpreted the clause alongside clause 6(h), which provided discretion to the purchase committee to decide whether a physical inspection was necessary. The court noted that the committee had uniformly waived the requirement for all bidders, removing any claim of arbitrariness.

"Upon a conjoint reading of the clauses, it is clear that the physical inspection was discretionary, and the authorities did not carry out inspections for any of the bidders. Thus, no bias or malafide action can be imputed," the court observed.

The court relied on settled principles of judicial restraint in tender matters, citing Supreme Court precedents that emphasized minimal interference unless the decision-making process is demonstrably arbitrary, discriminatory, or biased. "Courts do not sit as appellate bodies in tender processes and should refrain from interfering unless there is a clear case of malafide or irrationality," the court stated, quoting Tata Cellular v. Union of India.

The court further referenced Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) and Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., which affirm that tender conditions and their interpretation lie primarily within the domain of the contracting authority.

In dismissing the writ petitions, the Allahabad High Court upheld the tender awards for the Maha Kumbh Mela, ruling that the state authorities acted within their discretion and followed a fair and transparent process. The court’s judgment reinforces the principle that unless there is clear evidence of arbitrariness or bias, courts should avoid interfering in government tender decisions. This decision may have implications for future challenges to public procurement processes, emphasizing the limited scope of judicial review in such matters.

Date of Decision: September 6, 2024

Dynamic Infracon Pvt. Ltd. v. State of Uttar Pradesh & Others