Tender Disqualification Overturned: Supreme Court Upholds Authority’s Decision
The case of M/s Agmatel India Pvt. Ltd. vs. M/s Resoursys Telecom & Ors. revolves around a legal dispute over a tender process for the procurement of tablets for school children. The Supreme Court of India had to determine whether the Delhi High Court had erred in interfering with the decision of the tender-inviting authority, Navodaya Vidyalaya Samiti (NVS), which had disqualified Resoursys Telecom’s bid based on technical specifications.
Background of the Case
The dispute originated when NVS issued a Notice Inviting Tender (NIT) for the supply of 68,940 tablets. The tender required bidders to meet an experience and past performance criterion, specifically stating that the bidder or its OEM should have supplied ‘same or similar category products’ for 60% of the bid quantity in at least one of the last three financial years.
Resoursys Telecom submitted its bid but was disqualified by NVS for failing to meet the past performance requirement. The primary contention was whether ‘smartphones’ could be considered as ‘similar category products’ to ‘tablets.’ The High Court ruled in favor of Resoursys Telecom, stating that NVS had arbitrarily excluded smartphones from the category of similar products. This decision was challenged before the Supreme Court.
Arguments by the Petitioner (Agmatel India Pvt. Ltd. & NVS)
- The petitioners argued that NVS was the best judge to determine the eligibility of bidders and that the court should not interfere in the technical evaluation of tenders.
- They contended that the past performance requirement explicitly referred to ‘tablets’ and not ‘smartphones.’
- The classification of tablets and smartphones as different product categories on the Government e-Marketplace (GeM) portal and by customs authorities supported the view that these were distinct products.
- Resoursys Telecom had only supplied 37,141 tablets in one of the last three years, which was 10.20% short of the required 60% threshold.
- Interpreting the tender document otherwise would set a wrong precedent, allowing bidders to manipulate eligibility criteria.
Arguments by the Respondent (Resoursys Telecom)
- Resoursys Telecom argued that ‘smartphones’ and ‘tablets’ are interchangeable in various government tenders and should be considered as similar category products.
- It highlighted that several state governments and PSUs had treated smartphones and tablets under the same category in previous tenders.
- The rejection of their bid was arbitrary and restrictive, reducing competition and violating the principles of fair play.
- The High Court was correct in holding that NVS should not have applied a restrictive interpretation of the term ‘same or similar category products.’
Observations of the Supreme Court
The Supreme Court carefully analyzed the arguments and ruled in favor of the petitioners, setting aside the High Court’s order. The court emphasized:
“The author of the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings.”
The Supreme Court further stated:
“Even if the High Court’s interpretation was plausible, it did not justify interfering with the decision of NVS, which was neither irrational nor arbitrary.”
The Court also highlighted that:
- The interpretation of ‘similar category products’ must align with the tender document’s intent.
- The classification of smartphones and tablets as distinct categories by government procurement portals and customs authorities reinforced NVS’s decision.
- The High Court overstepped by engaging in an unnecessary semantic analysis and substituting its own view over that of the tender-inviting authority.
Final Judgment
The Supreme Court allowed the appeals filed by NVS and Agmatel India Pvt. Ltd., holding that the decision to disqualify Resoursys Telecom was justified. It ruled:
“The High Court’s interference was unwarranted. The tender process must be evaluated by experts, and judicial review should not substitute the decision of the tender authority unless it is arbitrary or mala fide.”
Accordingly, the Supreme Court reinstated the NVS decision, confirming that smartphones and tablets are not interchangeable for past performance criteria in the given tender.
Petitioner Name: M/s Agmatel India Pvt. Ltd..Respondent Name: M/s Resoursys Telecom & Ors..Judgment By: Justice Dinesh Maheshwari, Justice Vikram Nath.Place Of Incident: New Delhi.Judgment Date: 31-01-2022.
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