Delhi High Court: In a petition filed under Article 226 of the Constitution for the cancellation of the Award of tender awarded by Indian Oil Corporation Limited (‘Indian Oil’) (Respondent 1) to Commtel Networks Pvt. Ltd. (Respondent 2) among other prayers, the Division Bench of Manmohan, ACJ.* and Manmeet Pritam Singh Arora, J. held that the petition was barred by delay and laches while reiterating that a party which has not participated in a tender process does not have any locus to challenge the award of the tender.
Background
The petitioner was a registered company engaged in the business of manufacturing and marketing of telecommunication and networking equipment. He was stated to be one of the only two Indian Original Equipment Manufacturers (‘OEM’) of Synchronous Digital Hierarchy (‘SDH’) equipment.
Through the present petition, the petitioner sought the cancellation of the award of tender awarded by Indian Oil to Commtel Networks and a direction to Indian Oil to take action against Commtel Networks and Respondent 3 for the violation of Clause 5.1.6 of the tender.
The petitioner, through this petition, also sought directions to Indian Oil for strictly adhering to the prescribed procedures for bidding and awarding contracts as delineated in the terms of the tender and for deciding the complaint filed by the petitioner on 23-10-2023 in a time-bound manner.
Indian Oil issued a tender dated 16-02-2023 for developing an oil pipeline project in Gujarat, Rajasthan, and Haryana. After respondent 4 submitted its bid on 05-05-2023, it requested the petitioner to issue a commitment certificate during the evaluation of the technical bid for onward submission to Indian Oil.
Even though respondent 4 qualified in the technical bid, it was rejected in the financial bid and the tender was awarded to Commtel Networks. It was stated that the facts evidenced that if Respondent 4 had been successful, the petitioner would have been the direct beneficiary of the tender award.
Upon review of the tender summary report, the petitioner learned that Commtel Networks was the distributor of respondent 3 and that they were directly related to each other. The petitioner stated that both the respondents could not have simultaneously submitted separate bids for the tender since it negated clause 5.1.6 of the tender which stipulated that if two bidders have a conflict of interest, which substantially affects the fair competition, the said bidder shall not be eligible to bid for the tender.
The petitioner made a representation to Indian Oil on 23-10-2023 and even though the vigilance department sought details of the alleged contravention, nothing concrete was being done which is why the present petition was filed by the petitioner.
Analysis and Decision
The Court noted that the first question to be decided in the dispute was whether the petitioner could maintain independent proceedings against Indian Oil for impugning the tender award in favour of Commtel Networks. The Court answered this negatively while relying upon NHAI v. Gwalior-Jhansi Expressway Ltd., 2018 (8) SCC 243.
The Court stated that the petitioner did not participate in the bidding process and elected to remain outside the said process, and the fact that the petitioner was the intended supplier of SDH equipment of respondent 4 would not give any locus to the petitioner to challenge the tender process or to maintain the proceedings.
Further, the Court stated that the issuance of a commitment letter by the petitioner to respondent 4 would not make it a ‘bidder’ in the tender process. The Court also stated that given the decision by the Supreme Court, it was clear that a party that had not participated in a tender process did not have any locus to challenge the tender award and could not be heard to make any grievances since the party did not acquire any right in the tender.
The Court stated that the petitioner was aware that respondent 4 stood disqualified in September 2023 and that the tender was to be awarded to Commtel Networks which is why the present petition was barred by delay and laches.
Thus, the Court found the petition to be without merit and dismissed the same accordingly.
[Primatel Fibcom Ltd. v. Indian Oil Corporation Ltd., 2024 SCC OnLine Del 4278, Decided on 01-06-2024]
*Judgment authored by- Acting Chief Justice Manmohan
Advocates who appeared in this case :
For Petitioner — Advocate Rohit Gandhi, Advocate Hargun Singh, Advocate Navdeep Kumar, Advocate Akshita Nigam, Advocate Nikita Sharma
For Respondents — Sr. Advocate Raman Kapur, Advocate Amit Meharm, Advocate Tannishtha Singh, Advocate Sambhav, Sr. Advocate Rajeev Virmani, Advocate Tushar A. John, Advocate Arjun Maheshwari
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