Featured image for Supreme Court Judgment dated 17-02-2016 in case of petitioner name State of Uttar Pradesh vs M/S. Al Faheem Meetex Private
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Supreme Court Orders Fresh Bidding for Meerut Slaughterhouse Project

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The case of State of Uttar Pradesh & Another vs. M/S. Al Faheem Meetex Private Ltd. involves a legal dispute over the bidding process for constructing, maintaining, and operating a modern slaughterhouse in Meerut under the Public-Private Partnership (PPP) Model. The Supreme Court examined whether the decision of the Bid Evaluation Committee (BEC) to cancel the earlier selection process and call for fresh tenders was legally justified.

Background of the Case

The government of Uttar Pradesh planned to construct a modern slaughterhouse in Meerut as part of a broader initiative to improve hygiene and compliance with environmental regulations. The origin of this plan can be traced back to the Supreme Court’s earlier judgment in Nagar Nigam, Meerut v. Al Faheem Meat Exports Pvt. Ltd., which directed the modernization of slaughterhouses.

Following this direction, the state government issued Policy Guidelines on August 6, 2008, allowing urban local bodies to implement the project under the PPP model through a public auction/tender process. The government constituted the Bid Evaluation Committee (BEC) to oversee the selection of a private developer for the project.

Bidding Process and Dispute

The Nagar Nigam, Meerut, published a Request for Qualification (RFQ) notice on May 26, 2010, inviting tenders for the project on a Build-Operate-Transfer (BOT) basis. The estimated project cost was Rs. 101.76 crores, and the implementation period was set at 24 months.

After the first round of bidding, the consultant found deficiencies in all submissions and recommended inviting fresh bids. The second RFQ notice was issued on June 29, 2010, which resulted in five applications, with four being shortlisted for the final bidding stage. The Request for Proposal (RFP) was issued on July 29, 2010, and three companies submitted their bids:

  • Figro Rifico Ilana Ltd., Ghaziabad
  • M/s. Hind Agro Industries Ltd.
  • M/s. Al Faheem Meat Exports Pvt. Ltd. (Respondent No. 1)

During the BEC meeting on September 8, 2010, it was found that the bid from Figro Rifico Ilana Ltd. was incomplete. The remaining two companies offered different concession periods:

  • M/s. Hind Agro Industries Ltd. – 19 years
  • M/s. Al Faheem Meat Exports Pvt. Ltd. – 12 years

Since Al Faheem Meat Exports Pvt. Ltd. offered the lowest concession period, the BEC selected it as the preferred developer.

Cancellation of Selection and Call for Fresh Tenders

Before forwarding the recommendation for final approval, the Finance Department of Uttar Pradesh raised concerns:

  • Only two valid bids were received, whereas Financial Rule 21 required at least three bids for a competitive process.
  • Since the Nagar Nigam is a separate constitutional entity, clarification was needed on the competent authority for final approval.
  • The low number of bids indicated possible deficiencies in the tendering process.

Based on these concerns, the BEC held another meeting on November 22, 2010, where it:

  • Cancelled the earlier selection of Al Faheem Meat Exports Pvt. Ltd.
  • Ordered fresh tenders for the project.
  • Scheduled a new pre-bid meeting for December 7, 2010, with a deadline of December 15, 2010.

High Court’s Decision

Aggrieved by the cancellation, Al Faheem Meat Exports Pvt. Ltd. filed Civil Misc. Writ Petition No. 71568 of 2010 before the Allahabad High Court. The High Court:

  • Quashed the BEC’s decision dated November 22, 2010.
  • Held that once BEC had selected the respondent, it could not revisit its decision without due process.
  • Ordered the state to resume proceedings from the stage of selection on September 8, 2010.

Supreme Court’s Analysis

1. Authority of the Bid Evaluation Committee

The Supreme Court ruled that:

  • BEC’s role was merely recommendatory, and final approval rested with the competent authority.
  • The BEC had the power to review its own decision before forwarding recommendations for final approval.
  • The Finance Department’s objections were valid and warranted reconsideration.

2. Financial Rule 21 and Number of Bids

The Court found:

  • Financial Rule 21 requires at least three bids for ensuring competition.
  • Since only two bids were valid, the selection process did not meet procedural requirements.
  • Re-tendering was necessary to ensure transparency.

3. No Vested Right in the Bidder

The Court emphasized:

  • A bidder does not gain an enforceable right until the competent authority finalizes the selection.
  • Since the state had not approved the recommendation, the respondent had no grounds to challenge the cancellation.

Final Judgment

The Supreme Court allowed the appeal and ruled:

  • The High Court’s order was set aside.
  • The decision of the BEC to cancel the earlier selection and invite fresh bids was upheld.
  • The state government was directed to initiate a fresh tendering process with wide publicity.

Impact of the Judgment

The ruling reaffirms key principles:

  • Bid evaluation committees have the authority to review recommendations before final approval.
  • Financial rules requiring a minimum number of bids must be followed for transparency.
  • Award of government contracts must comply with competitive bidding norms.

Conclusion

The Supreme Court’s decision in State of Uttar Pradesh vs. M/S. Al Faheem Meetex Pvt. Ltd. ensures transparency in the public bidding process. The ruling affirms that no bidder can claim selection as a right until final approval, protecting public funds and maintaining fair competition.

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Download Judgment: State of Uttar Prade vs MS. Al Faheem Meete Supreme Court of India Judgment Dated 17-02-2016-1741852666247.pdf

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