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Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 6978 of 2016)Decided 26 Jul 2016
Civil Appeal No. 6978 of 2016
Justice Dipak Misra · Justice Rohinton Fali Nariman

Background

The Gujarat Transport Department floated a tender for manpower services (data entry operators, electricians, supervisors, etc.) at RTO check-posts, requiring bidders' quoted price to cover at least the government-calculated minimum wage figure. Both the appellant and Respondent No. 1 initially bid below the Labour Department's minimum-wage calculation and were disqualified in favour of a third bidder, but the Gujarat High Court quashed that award and ordered all three bidders be given the minimum-wage figure to resubmit. When Respondent No. 1 was later given a revised (lower) minimum-wage figure that the Government had not formally disclosed to the parties, it wrote offering to match that undisclosed figure rather than submitting a fresh conforming bid, and the High Court accepted this as effectively matching the tender terms and awarded it the contract, which the appellant then challenged in the Supreme Court.

Decision Breakdown

The Supreme Court held that Respondent No. 1's informal letter offering to "accept" whatever minimum-wage figure the government arrived at was not the same as actually quoting a conforming bid under the tender's strict terms, and that treating it as a matching bid would effectively create a new contract the parties themselves never made: courts cannot rewrite commercial bids this way. Citing established precedent (including Jagdish Mandal and Michigan Rubber), the Court reiterated that judicial review in tender matters exists only to check for mala fides or irrationality, not to second-guess commercial outcomes or protect a disappointed bidder's private interest at the cost of delay and litigation. Although the Government of Gujarat was partly at fault for failing to disclose a revised minimum-wage figure, the Court declined to restart the year-long-delayed tender process, since Respondent No. 1 had repeatedly failed to comply with the tender's strict bidding terms and there was no finding of mala fide in the Labour Department's wage calculation. The Court therefore set aside the High Court's judgment and allowed the Government to finalize the tender in favour of the appellant, with the appeal allowed and no order as to costs.

Lesson Learnt

In government tenders, courts will not treat an informal letter of willingness to "accept" a yet-to-be-finalized figure as equivalent to submitting a compliant bid, and judicial review of tender decisions is reserved for cases of bad faith or irrational conduct, not for rewriting commercial terms in a bidder's favour.

Official source (sci.gov.in)View Judgment (PDF)

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