Bombay High Court dismisses plea challenging “No-Blacklister” condition

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Bombay High Court dismissed the petition by BVG India Ltd., challenging a restrictive tender condition against Navi Mumbai Municipal Corporation.

A division bench of Chief Justice Dipankar Datta and Justice GS Kulkarni held that a tender condition prohibiting contractors afresh participation in lieu of previous termination would not constitute blacklisting.

It also ruled that the civic body has the authority to impose such a condition under ‘terms of invitation to tender’ and it is neither arbitrary nor illegal.

The Court held,

“It is also settled that the terms of the invitation to tender” cannot be open to judicial scrutiny as an invitation to tender is in the realm of contract”.

“To provide for such a condition as a pre-qualification criterion is a commercial decision taken by the Corporation… The Court would not have any expertise either to question the commercial efficacy or the commercial wisdom vested with the Corporation to stipulate such condition qua the tender in question”.

The Court further maintained that BVG’s claim of blacklisting on the implied condition was erroneous. It remarked that neither the condition was exclusive for BVG nor were they debarred from participating in other tenders of the corporation.

Senior Advocate VA Thorat, representing the BVG, argued for the qualification criterion to be declared illegal as it prohibits the petitioner from participating afresh and that the petitioner stood blacklisted without a proper hearing.

Advocate Sandeep Marne, representing NMMC, contended that the imposed condition wasn’t illegal or arbitrary as the corporation was well within its right to impose a condition which is in the best interest of itself.

The bench held,

“The concern of the Court in exercising such powers would be to prevent any arbitrariness, discrimination, malafides in the tender process, so as to ensure adherence of fairness in the State action”.

“It is not the function of the Court to act as a super board, or with the zeal of a pedantic school master substituting its judgment for that of the administration. The duty of the Court is to confine itself to the question of legality of the tender process on the touchstone of Article 14 of the Constitution”.

Bharat Vikas Group (BVG) was assigned a contract of Merchandised Housekeeping and Multipurpose (Patient Care) Services for a term of five year. It included three general hospitals and three maternity and child care centres. However, they received a show cause notice within ten month and their contract was terminated after a detailed hearing.

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