In a significant legal development, the Bombay High Court has invalidated specific tender conditions imposed by the Nashik Municipal Corporation (NMC) for road sweeping and cleaning contracts. The court found these conditions to be arbitrary and discriminatory, necessitating a revision to ensure fairness and inclusivity in the bidding process.
Background of the Case
The case arose when M/s. Watergrace Products challenged the NMC’s tender stipulations, particularly the requirement for bidders to possess a net worth of ₹100 crore. The petitioner argued that such a condition favored large operators and excluded smaller entities with relevant experience but lesser financial standing.
Court’s Findings
A division bench comprising Chief Justice Alok Aradhe and Justice Bharati Dangre presided over the matter. Upon reviewing the arguments, the court observed that the tender primarily involved the provision of manpower and basic cleaning materials, without necessitating substantial operational or capital expenditure. Consequently, the imposition of a Rs.100 crore net worth requirement was deemed excessive and unjustified.
The court further noted that the estimated cost of the tender was ₹176 crore over five years, averaging approximately Rs.35 crore annually. In this context, mandating a minimum net worth of Rs.100 crore as of March 31, 2024, appeared arbitrary and disproportionate.
NMC’s Justification and Court’s Response
Representing the NMC, Senior Advocate Ashutosh Kumbhakoni contended that maintaining public hygiene, especially during significant events like the Nashik Kumbh Mela scheduled for 2027, required reliable contractors with substantial financial backing. He highlighted that during the Kumbh Mela, the city anticipates a daily influx of approximately 1.5 million visitors, necessitating stringent cleanliness and sanitation measures.
However, the court found this justification lacking a factual basis. It pointed out that while the NMC plans to issue a separate tender specifically for the Kumbh Mela, the possibility of the current contractor handling duties during the event did not warrant the stringent net worth requirement. The court emphasized that such apprehensions could not serve as a valid reason for imposing the contested conditions.
Implications and Next Steps
This ruling mandates the NMC to reassess and modify its tender conditions, particularly those related to financial net worth and work experience, to foster a more equitable bidding environment. The decision underscores the judiciary’s role in ensuring that public procurement processes remain fair, transparent, and non-discriminatory.
As Nashik prepares for the 2027 Kumbh Mela, attracting an estimated 5 crore devotees, the NMC faces the challenge of balancing the need for capable contractors with the imperative of maintaining inclusive and fair tendering practices. This judgment serves as a reminder that while large-scale events demand robust infrastructure and services, procurement norms must not unjustly exclude qualified entities capable of delivering the required services.
In conclusion, the Bombay High Court’s decision calls for municipal bodies to craft tender conditions that are proportionate, justified, and inclusive, ensuring that all capable service providers have a fair opportunity to contribute to public projects.
