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Litigation history cannot be attributed to be an essential condition for acceptance of tender

In M.E. Infraprojects Pvt. Ltd. Vs. Municipal Corporation of Greater Mumbai, the petitioner objected to the Municipal Corporation's decision to accept the tender of Respondents 8 to 10, when they had not disclosed the litigations history of last five years as required in the tender condition.

The Bombay High Court agreeing with the decision of the Corporation held that disclosure of all litigation history is not an essential condition for the tender. It is merely ancillary or subsidiary to the main tender conditions. Prescribing such a condition, calling upon a bidder to provide litigation history is aimed to enable the municipal corporation to take a decision on the acceptability of a tender/bid by examining issues prejudicial to the interest of the municipal corporation, in the context of the tender. There can be no other purpose for prescribing such a condition. It also cannot be countenanced, that by prescribing such a condition, the municipal corporation would expect a bidder to disclose litigation history which is totally non-germane and/or of no relevance to the tender. 

The High Court decided that the municipal corporation has rightly concluded that, the litigation/proceedings, which are pointed out by the Petitioners, not been disclosed by Respondent no. 9 on behalf of Respondent no. 8 to 10, have no relation to the tender in question or anything to do with the past performance, when the tender of Respondent nos. 8 to 10 was eligible technically and commercially, on all the other aspects of the tender conditions. The essential conditions of the tender are required to be strictly complied. The condition in question, of the bidder requiring to submit the litigation history for the past five years, is not an essential condition. 

The Court would necessarily examine the decision making process to ascertain whether the process adopted or decision made by the authority is malafide or arbitrary and irrational or is such that no responsible authority acting reasonably and in accordance with relevant law could have reached, and whether the decision is against public interest. In Central Coalfields Limited, the Supreme Court referring to the decisions in Tata Cellular vs. Union of India and Jagdish Mandal vs. State of Orissa, held that, if an administrative decision, even a deviation in the terms of the notice inviting tender, if it is not arbitrary, irrational, unreasonable, malafide or biased the Courts will not judicially review the decision taken. Also the courts would not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. 

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