No fundamental right to carry on business with State; Signing declaration form not a necessary condition to award tender: Kerala High Court

The Kerala High Court recently held that signing of declaration form with accurate Goods and Service Tax details is not a necessary condition for awarding tender and dismissed a petition challenging the award of tender by Kerala Minerals and Metals Ltd. (KMML) to a party who had not signed such declaration (Shyam Raj P v. State of Kerala)..Single judge Justice PB Suresh Kumar dismissed the petition stating that tenderer may be permitted to cure trivial defects. "The scheme of the tender notice is that if the tender submitted by a tenderer is complete in all respects, the second respondent may permit the tenderer to cure the trivial defects, if any, in the tender, in its discretion. In other words, affixing signatures on all pages of the tender document uploaded cannot be said to be an essential condition of the tender in a case of this nature, the non-compliance of which would warrant rejection of the tender at the threshold."Pertinently, the Court reiterated that no person can claim any fundamental right to carry on business with State or its instrumentality as per the judgement of the Supreme Court in Michigan Rubber (India) Ltd. v. State of Karnataka."If the State or its instrumentality acts reasonably, fairly and in public interest in awarding a contract, interference by Court is very restrictive since no person can claim any fundamental right to carry on business with State or its instrumentality," the judgment said. .The petition was filed by the proprietor of Skillderz Developers, a participant in the tender invited by KMML, challenging the award of said tender to one of the respondents, who allegedly submitted their quote without signing the declaration form. Moreover, they also quoted the wrong GST rate at 9 percent as opposed to the 18 percent rate that was prevailing at the time. .Advocate Renjith B Marar, appearing for the petitioner contended that upon receiving the unsigned declaration form, the tender inviting authority should have outright rejected the quote on that stage of technical bid itself and ought not to have considered their financial bid at all..However, the Counsel for KMML informed the Court that upon noticing that the declaration form hadn't been signed, KMML gave the respondent bidder a chance to cure the defect and accordingly, he uploaded a fresh document that was signed as required.Moreover, he submitted that as per the judgement of the Kerala High Court in Birla International Marketing Corporation v. State of Kerala, 2000 the omission on the part of the respondent in putting his signature in the declaration form cannot be said to be a fatal one, warranting rejection of the tender at the threshold. .The respondent bidder also submitted that the wrong GST was quoted only inadvertently and moreover even if GST is applied at 18%, the rate quoted by him would be far less than the rate quoted by the petitioner..Upon a close reading of the document inviting the tender, the Court observed that there is no provision in the tender notice to the effect that the omission to put signature of the tenderer in one or two pages of the tender document would result in rejection of the tender;the provision in the tender notice is that if the rate of applicable taxes is shown incorrectly in the tender document, the financial burden arising from the same shall be borne by the tenderer..The Court also distinguished between essential conditions of eligibility and ancillary/subsidiary conditions in so far as tender notice is concerned."In the first case, the authority issuing the tender may be required to enforce them rigidly, but in the latter case, it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition, in appropriate cases [see Poddar Steel Corporation v. Ganesh Engineering Works]. The question to be examined in cases of the instant nature therefore, is whether the condition, non-compliance of which is alleged, is an essential term of the tender," the Court stated..Accordingly, the Court opined that affixing signatures on all pages of the tender document uploaded cannot be said to be an essential condition of the tender in a case of this nature, the non-compliance of which would warrant rejection of the tender at the threshold..It clarified that the view taken by it is also for the reason that if the State or its instrumentality acts reasonably, fairly and in public interest in awarding a contract, interference by Court is very restrictive since no person can claim any fundamental right to carry on business with State or its instrumentality as per the judgement of the Supreme Court in Michigan Rubber (India) Ltd. v. State of Karnataka..Therefore, the Court dismissed the petition.[Read Judgement]