BVG India Limited's technical bid rejection overturned for violating NIT Clause 2.2 requirements

The Patna HC set aside the rejection of BVG India Limited's technical bid, finding it contrary to NIT Clause 2.2 which did not require internal audited balance sheet materials. The court also set aside the contract award to M/s Pashupatinath Distributors Private Limited, determining they failed to meet turnover and experience criteria under Clauses 2.2 and 2.3. The HC found the tendering authority's actions arbitrary and violative of Article 14, directing fresh technical evaluation of remaining bidders including BVG India Limited and Ziqitza Healthcare Limited within two months. The petition was allowed with interim arrangements continuing.

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1. ISSUES PRESENTED and CONSIDERED

The judgment addresses the following core legal questions:

• Whether the writ petition filed by BVG India Limited and others is maintainable.
• Whether the petition filed by M/s Ziqitza Healthcare Limited is maintainable on the grounds of delay.
• Whether the rejection of the bid application of BVG India Limited and others was justified.
• Whether the bid application of M/s Pashupatinath Distributors Private Limited met the eligibility criteria under Clauses 2.2 and 2.3 of the NIT.
• Whether M/s Ziqitza Healthcare Limited should be declared as L1 if M/s Pashupatinath Distributors Private Limited's bid is found to be non-compliant.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Maintainability of BVG India Limited's Writ Petition

• Legal Framework: The petitioners argued that the consortium agreement was valid for questioning the disqualification.
• Court's Reasoning: The court found no defect in the affidavit or Vakalatnama and held the petition maintainable.
• Conclusion: The preliminary objection regarding maintainability was rejected.

Issue 2: Maintainability of M/s Ziqitza Healthcare Limited's Petition

• Legal Framework: The respondents argued delay in filing the petition.
• Court's Reasoning: The court accepted the explanation for the delay, noting the ongoing proceedings involving BVG India Limited.
• Conclusion: The preliminary objection regarding delay was rejected.

Issue 3: Rejection of BVG India Limited's Bid

• Legal Framework: Clause 2.2 of the NIT and the requirement for audited balance sheets.
• Court's Reasoning: The court found that the requirement for notes in the audited balance sheet was not explicitly stated in the NIT.
• Conclusion: The rejection of the bid was deemed arbitrary and set aside.

Issue 4: Eligibility of M/s Pashupatinath Distributors Private Limited

• Legal Framework: Clauses 2.2 and 2.3 of the NIT regarding turnover and experience.
• Court's Reasoning: The court found discrepancies in the turnover and experience claims of the fourth respondent.
• Conclusion: The bid was found non-compliant, and the award of the contract was set aside.

Issue 5: Declaration of M/s Ziqitza Healthcare Limited as L1

• Legal Framework: The principle of awarding the contract to the next eligible bidder.
• Court's Reasoning: The court did not automatically declare M/s Ziqitza as L1 but directed a reevaluation of bids.
• Conclusion: The court directed a reevaluation of the remaining bids.

3. SIGNIFICANT HOLDINGS

• Core Principles Established: The court emphasized the need for transparency and fairness in the tender process, as well as adherence to the stated criteria in the NIT.
• Final Determinations: The court set aside the rejection of BVG India Limited's bid and the award of the contract to M/s Pashupatinath Distributors Private Limited, directing a reevaluation of the bids.
• Verbatim Quotes: "The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted."

The court's decision underscores the importance of following the tender process's rules and ensuring that all bidders are evaluated fairly and transparently. The judgment mandates a reevaluation of the bids to ensure compliance with the eligibility criteria outlined in the NIT.

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