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Issues: (i) whether the Court could interfere with the tender condition requiring deposit of earnest money and the exemption granted to Government organisations and public sector undertakings; (ii) whether the appellants were entitled to have the contract considered merely on the basis of the higher bid notwithstanding the licensing requirement.
Issue (i): whether the Court could interfere with the tender condition requiring deposit of earnest money and the exemption granted to Government organisations and public sector undertakings.
Analysis: The tender condition requiring earnest money was part of the invitation to tender and lay in the realm of contract. Such terms are ordinarily not open to judicial scrutiny unless shown to be wholly arbitrary, discriminatory or actuated by malice. The exemption for Government organisations and public sector undertakings was held to rest on a rational basis, as such entities form a separate class and are ordinarily presumed to be financially sound and serious bidders. Even if the exemption were questioned, the proper consequence would be to examine that exemption, not to rewrite the tender condition itself by permitting a different mode or delayed deposit of earnest money.
Conclusion: Interference with the earnest money condition was not justified, and the interim direction relaxing the tender requirement was erroneous.
Issue (ii): whether the appellants were entitled to have the contract considered merely on the basis of the higher bid notwithstanding the licensing requirement.
Analysis: The awarding of a power-trading contract was not to be determined by price alone. Possession of the requisite licence under the applicable regulatory framework was mandatory for trading the volume of power in question. Since the appellant did not possess the necessary licence category for the quantity involved, it could not claim a right to the contract merely because its bid was higher in monetary terms.
Conclusion: The appellants were not entitled to the award of the contract.
Final Conclusion: The challenge to the tender conditions and the claim for award of the contract both failed, and the appeals were dismissed with costs.
Ratio Decidendi: Terms of a tender are not open to judicial alteration unless they are shown to be arbitrary, discriminatory or mala fide, and a bidder cannot insist on award of a contract where it lacks the mandatory licence required for the subject transaction.
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