HAFFKINE BIO-PHARMACEUTICAL CORPORATION LTD., GOVERNMENT OF MAHARASHTRA UNDERTAKING THROUGH MANAGER versus M/S. NIRLAC CHEMICALS THROUGH ITS MANAGER & ORS.

Citation: [2017] 8 S.C.R. 450 · Decided: 27-07-2017 · Supreme Court of India · Bench: MADAN B. LOKUR · Disposal: Disposed off
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Judgment (excerpt)

[2017] 8 S.C.R. 450 
A 
HAFFKINE BIO-PHARMACEUTICAL CORPORATION LTD., 
A GOVERNMENT OF MAHARASHTRA UNDERTAKING 
THROUGH MANAGER 
v. 
MIS. NIRLAC CHEMICALS THROUGH ITS MANAGER & 
B 
ORS. 
c 
(Civil Appeal No. 9836 of 2017) 
JULY27,2017 
[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.J 
Tender: 
Validity of tender - Challenged by unsuccessful bidder - On 
the ground that technical-cum-commercial bid was not opened in 
the presence of its representatives - High Court set aside the award 
of tender - On appeal, held: Opening of the the tender of the 
D 
successful bidder in absence of the challenging bidder, is in violation 
of Central Vigilance Commission Guidelines - However, since the 
unsuccessful bidder did not fulfill all the tender conditions, its tender 
was also not technically qualified - Jn the interest of justice, the 
tendering company is restrained from purchasing any further, from 
E the successful bidder and is further directed to place order with the 
unsuccessful bidder in respect of the pending orders - The tendering 
company is permitted to float fresh tender as e-tender with clear 
and unambiguous terms and conditions - Contract. 
F 
Disposing of the appeals, the Court 
HELD: 1. A bare reading of the Central Vigilance 
Commission (CVC) guidelines clearly shows that the tender must 
be opened in the presence of the bidders or representatives of 
the bidders who are present at the time when the bid is opened. 
The High Court, after going through the entire record, came to 
G the conclusion that the bid of the successful bidder had not been 
opened in the presence of the representatives of unsuccessful 
bidder. In fact, this was admitted by the appellant before the 
High Court. Even before this Court, no record could be produced 
to show that the bid of the successful bidder was opened in the 
presence of the representatives of the unsuccessful bidder. In 
H 
450 
HAFFKINE BIO-PHARMACEUTICAL CORP. LTQ. v. NIRLAC 
451 
CHEMICALS THR ITS MANAGER · 
this view of the matter, the entire tender opening process is ·A 
vitiated since the CVC guidelines have not been followed. [Paras 
9, 10)[457-B-C, Er 
2. Opening of the tender without showing the documents 
is also meaningless. When. a technical bid is .opened, it is the 
right of the rival bidders to see whether the documents attached B 
by a bidder meet the technical requirements or liot. This can 
only .be done if the documents attached to the bid are shown to 
the other side. [Para 10)(457-FJ' 
3. The case of the unsuccessful bidder is that till 22.06.2016 
they were not aware of the rejection of their bid. This assertion c 
is patently false. The comparative analysis chart prepared by the 
appellant was admittedly shown to the representatives of the 
unsuccessful bidder on the evening of 12.02.2016 itself. This is 
also apparent from the facts that on 12.02.2016, the unsuccessful 
bidder sent a letter to the tendering Company protesting against 
the rejection of their bid. In this letter they have mentioned that D 
at about 5.45 p,m., a comparative analysis sheet was shown to 
the representatives ·of the unsuccessful bidder. They have listed 
out several conditions of the tender bid. With regard to 7 points, 
they have objected that they bad given all the requisite information 
and their bid had been wrongly rejected. They have given detailed E 
reasons for the same; Therefore,. it cannot be said that the 
unsuccessful bidder was not aware of the fact that their bid had 
not been found to be technically qualified. [Para 11)1457-G-H; 
458-F-G) 
4. It is not correct to say that the unsuccessful bidder should 
F 
be compensated for the loss suffered by it. A party can only claim 
restitution when its bid is technically qualified and wrongly 
rejected. The High Court erred in holding that the unsuccessful 
bidder satisfied all the tender conditions. Condition 'j' of the 
Tender Notice clearly postulates that the bidder should be able 
to generate business for the tendering Company for sale of G 
minimum 70 million doses. It may be correct that there is no 
mention of any buy back arrangement but it is apparent that the · 
tendering Company wanted that the person supplying the bulk 
drug should also generate business for sale of 70 million doses 
H 
452 
SUPREME COURT REPORTS 
[2017] 8 S.C.R. 
A of the finished product. This is the only interpretation which can 
be given to condition 'j'. Since the unsuccessful bidder did not 
fulfil this condition, its tender was not f
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