Court upholds SAIL's bid rejection in mining tender challenge

The Court dismissed the petition challenging the rejection of the Petitioner's bid by SAIL for a mining tender. It held that SAIL's decision to exclude Deferred Tax Liability from the net worth calculation was not arbitrary. The Court emphasized limited judicial intervention in tender matters and found no arbitrariness in SAIL's actions. Consequently, the Court ruled in favor of SAIL, concluding that the rejection was not arbitrary and did not justify interference under Article 226 of the Constitution of India.

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Issues Involved:

1. Rejection of Petitioner's bid by SAIL.
2. Compliance with financial criteria of NIT.
3. Inclusion of Deferred Tax Liability in Net Worth calculation.
4. Judicial interference in tender decisions.

Summary:

1. Rejection of Petitioner's bid by SAIL:
The Petitioner challenged the rejection of its bid by the Steel Authority of India (SAIL) for a tender related to the development and operation of mines. The bid was rejected via a letter dated 10.05.2023, prompting the Petitioner to file a writ petition.

2. Compliance with financial criteria of NIT:
The Petitioner submitted its bid on 12.09.2022, declaring a net worth of Rs. 400.69 crores, supported by a statutory auditor's certificate. However, SAIL identified discrepancies in the net worth calculation, noting a difference between the Petitioner's stated net worth and the audited financial statements. SAIL sought clarifications, which the Petitioner provided, including expert opinions supporting the inclusion of Deferred Tax Liability in the net worth.

3. Inclusion of Deferred Tax Liability in Net Worth calculation:
The Petitioner argued that Deferred Tax Liability should be included in the net worth calculation, referencing Clause 3.28 of the NIT and Section 2(57) of the Companies Act, 2013. They also cited Supreme Court judgments and Income Tax provisions to support their stance. However, the Court noted that the balance sheet and net worth calculation are separate exercises and that Deferred Tax Liability should not be included in net worth calculation.

4. Judicial interference in tender decisions:
The Court emphasized that judicial intervention in tender matters is limited and should only occur in cases of arbitrariness, bias, or perversity. The Court deferred to the tendering authority's expertise and found no arbitrariness in SAIL's decision to exclude Deferred Tax Liability from the net worth calculation. The Court concluded that the Petitioner failed to demonstrate how SAIL's decision was perverse or arbitrary.

Conclusion:
The Court dismissed the petition, ruling that SAIL's rejection of the Petitioner's bid was not arbitrary and did not warrant interference under Article 226 of the Constitution of India.

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