2020 (2) TMI 1246 - SC - Indian Laws

Supreme Court grants interim relief in videoscope tender challenge: Department allowed to procure with deduction pending hearing

Commissioner, Directorate of Logistics Versus M/s. Almighty Techserv, Proprietor Mr. Manish Dalmia & Another

The Supreme Court granted interim relief in a case involving a challenge to a tender award for videoscopes by the CBEC. The Court permitted the Department ... Legality of Award of Tender - case of High Court is that the tender of the writ petitioner should have been treated as the lowest tender and the loss caused to the Government is roughly about 63 lakhs - HELD THAT:- At this stage, we are only dealing with the issue of interim relief. We are not going into the merits of the case which will require detailed hearing. We, however, cannot lose sight of the fact that the tender in question was floated in the year 2018. The High Court has cancelled the tender and ordered retender - The tender has not been awarded in favour of M/s. Almighty Techserv. Fresh tendering may lead to long delay in procuring all these videoscopes which are urgently required by customs authority to scan the imported goods. If a fresh tender for supply of videoscopes is floated we are not even sure whether the Government will gain or lose in monetary terms. The public interest requires that the Government be permitted to procure the videoscopes from M/s. ASVA Power Systems India Pvt. Ltd. and the Department is permitted to do so. Interim Relief granted. Issues:Challenge to tender award, Urgent requirement of videoscopes, Interpretation of bid prices, Public interest in procurement process, Interim relief granted.Analysis:The Supreme Court addressed the challenge to the award of a tender for the supply, installation, and maintenance of videoscopes by the Central Board of Excise and Customs (CBEC). The High Court had held the award to be illegal, favoring the unsuccessful bidder, estimating a loss of approximately 63 lakhs to the Government. The Department, as well as the successful bidder, challenged this decision. The primary issue before the Supreme Court was to determine interim relief while not delving into the merits of the case.The Department argued the urgent need for the 74 videoscopes and contended that the High Court's judgment was incorrect. They emphasized that the equipment was already imported and ready for installation, urging for a stay on the High Court's order. On the other hand, the successful bidder's counsel supported the Department's arguments, asserting that their bid was the lowest, inclusive of all customs charges. They criticized the High Court's stance on landing charges. Conversely, the unsuccessful bidder's counsel defended the High Court's judgment, alleging false statements by the successful bidder and opposing any discretionary relief.The Supreme Court acknowledged the urgency of the situation, considering the tender was floated in 2018 and fresh tendering could cause significant delays in acquiring the videoscopes crucial for customs operations. In the interest of public welfare, the Court permitted the Department to procure the videoscopes from the successful bidder, albeit with a deduction of 63 lakhs from the payment. The Court reserved the decision on this deduction for a detailed hearing during the final proceedings. However, if the successful bidder insisted on full payment immediately, the Department would have to float a fresh tender, emphasizing the importance of public interest in the procurement process.Ultimately, the Supreme Court granted interim relief, allowing the Department to proceed with the procurement from the successful bidder under specified conditions. This decision balanced the urgent need for equipment, the legal challenges surrounding the tender award, and the potential financial implications for the Government, highlighting the Court's commitment to upholding public interest and ensuring a fair procurement process.