Court sets aside contract award due to irregularities in tender process, orders fresh procurement.

The Court found irregularities in the tender process, including non-responsiveness of the winning bid and incorrect addition of charges. Consequently, the Court set aside the contract award to respondent No. 2, citing arbitrariness in the decision-making process. The Court directed a fresh tender for the procurement of videoscopes, allowing both parties to participate. The writ petition was allowed, and applications for stay were disposed of.

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Issues Involved:
1. Validity of the award of the contract to respondent No. 2.
2. Compliance with tender conditions and procedures.
3. Calculation of the lowest bidder (L-1).
4. Non-responsiveness of the bid due to incomplete submission.
5. Addition of notional landing charges.

Detailed Analysis:

1. Validity of the Award of the Contract to Respondent No. 2:
The petitioner challenged the award of the contract to respondent No. 2, arguing that the price quoted by the petitioner was lower than that of respondent No. 2, resulting in a loss of Rs. 61.30 lakhs to the Government Exchequer. The petitioner sought the setting aside of the impugned order awarding the contract to respondent No. 2 and requested the original records pertaining to the contract to be placed before the Court.

2. Compliance with Tender Conditions and Procedures:
The petitioner contended that respondent No. 2's bid was non-responsive due to the omission of the custom duty amount in the price schedule, which should have led to its rejection. The tender conditions required all columns of the tender form to be filled, and incomplete forms were liable to be rejected. The Court agreed with this contention, stating that leaving the column of custom duty blank rendered the bid incomplete and non-responsive.

3. Calculation of the Lowest Bidder (L-1):
The methodology for determining the lowest bidder (L-1) was based on the net cash outflow from the purchaser in the first seven years after commissioning, as per Clause 2.29.2 of the tender conditions. The net cash outflow was calculated by adding the contract price of the system and the sum of discounted annual maintenance charges (CCAMC) for five years. The Court found that respondent No. 1 had incorrectly added 1% notional landing charges to the petitioner's bid, contrary to the Supreme Court's decision in M/s Wipro Ltd. and the Department of Revenue's circular. This incorrect addition affected the determination of the L-1 bidder.

4. Non-responsiveness of the Bid Due to Incomplete Submission:
The Court held that respondent No. 2's bid was non-responsive due to the blank column for custom duty, which violated the tender conditions requiring all columns to be filled. The Court emphasized that allowing such ambiguities in bids would undermine the fairness and transparency of the tender process.

5. Addition of Notional Landing Charges:
The Court found that respondent No. 1 had wrongly added 1% notional landing charges to the petitioner's bid, contrary to the Supreme Court's decision and the Department of Revenue's circular. This addition was illegal and affected the determination of the L-1 bidder. The Court noted that if notional landing charges were to be added, they should have been added to respondent No. 2's bid as well, given that respondent No. 2 had subsequently imported the videoscopes.

Conclusion:
The Court concluded that there was complete arbitrariness in the decision-making process by which the tender was awarded to respondent No. 2. The Court quashed and set aside the Letter of Award dated 12.11.2018 issued in favor of respondent No. 2. The official respondent was given the liberty to advertise a fresh tender for the procurement of the videoscopes, with both parties being free to participate in the new tender if advertised.

Orders:
The writ petition was allowed, and the applications for stay were disposed of accordingly.

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