Bidder estopped from challenging tender conditions after participating and failing to meet audited financial document requirements

The MP HC dismissed a petition challenging rejection of a technical bid for submitting unaudited balance sheet and profit loss account for 2017-18. The petitioner participated in the NIT without objection but challenged the mandatory audited financial documents requirement only after disqualification. The HC held that petitioner was estopped from challenging NIT conditions after participating and failing. The court emphasized that writ petitions under Article 226 are not maintainable for contract enforcement, citing Supreme Court precedent in Surjeet Singh Sahni. The bid disqualification required no judicial interference.

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Issues Involved:
1. Rejection of Technical Bid
2. Estoppel Against Challenging Bid Conditions
3. Scope of Judicial Review in Contractual Matters

Summary:

1. Rejection of Technical Bid:
This petition under Article 226 of the Constitution of India challenges the order dated 20/06/2023, where the technical bid submitted by the petitioner was rejected. The petitioner argued that the mandatory criteria for the tender, which required enclosing audited balance sheets and profit & loss accounts for the last five financial years, was unfair. The petitioner's turnover for the financial year 2017-18 was less than Rupees One Crore, and thus, audited financial statements were not mandatory under Section 44AB of the Income Tax Act.

2. Estoppel Against Challenging Bid Conditions:
The court held that the petitioner, having participated in the NIT without objection and only challenging the conditions after being disqualified, is estopped from questioning the bid conditions. The Supreme Court precedents, such as D. Sarojakumari Vs. R. Helen Thilakom and others, and Ashok Kumar and Another Vs. State of Bihar and Others, establish that candidates who participate in a selection process cannot later challenge the conditions if they are unsuccessful.

3. Scope of Judicial Review in Contractual Matters:
The court emphasized that the Income Tax Act operates in a different field and does not bar the submission of audited balance sheets if turnover is less than Rupees One Crore. The requirement for audited financial statements in the NIT aims to prevent the submission of bogus documents and is within the respondents' prerogative. Citing Uflex Limited Vs. Government of Tamil Nadu and others, the court noted that judicial review in contractual matters is limited and should not interfere with the administrative decision unless it is arbitrary or irrational. The court also referenced Tata Cellular Vs. Union of India, affirming that the terms of the tender are not open to judicial scrutiny as they fall within the realm of contract.

Conclusion:
The petition was dismissed, with the court holding that the petitioner is estopped from challenging the conditions of the NIT and that the disqualification of the bid does not warrant judicial interference.

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