19 June 2025 Civil Writ Petition >> Civil & Consumer Law   |   Lease >> Property & Real Estate  

This petition of Vast Media Network Pvt. Ltd. Through its Director Abhijit Rane, Maharashtra v/s The State of Maharashtra, Through its Principal Secretary, Mumbai & Others., concerns the cancellation of a tender process for leasing 16 warehouses and a Central Store Office for 30 years. The Petitioner is challenging the non-allotment of the Central Store Office to them, despite their financial bid being identical to Respondent No. 4. The core of the Petitioner's grievance is the application of a preference clause in the tender, which, in their view, should only apply to warehouses and not the Central Store Office.

Initially, the Petitioner held the lease for the Central Store Office for five years (2013-2018) with extensions. A subsequent tender for an 11-month license for the Central Store Office was canceled, leading to a new tender notice on July 24, 2024, for 16 warehouses and the Central Store Office for a 30-year lease. The Petitioner bid only for the Central Store Office, while Respondent No. 4 bid for eight warehouses and the Central Store Office. Both quoted the same rate of Rs. 75 per square foot per month for the Central Store Office.

Respondent No. 4 was awarded the Central Store Office lease due to a preference clause (Clause 4(IV)) favoring bidders applying for a higher number of warehouses. The Petitioner argued that this clause was misapplied, citing several reasons:

• The scrutiny sheet incorrectly indicated the Petitioner bid for warehouses when they only bid for the Central Store Office.
• The stated reason for the Petitioner's bid rejection differed between the scrutiny sheet and the affidavit-in-reply, suggesting non-application of mind.
• Most importantly, the tender document itself draws a clear distinction between "warehouses" and "Central Store Office." The Petitioner contended that Clause 4(IV) specifically uses the word "warehouses" and not "premises," indicating it should only apply to warehouse allotments.

Respondents 1-3 and Respondent No. 4 countered that a composite tender was issued, and no distinction should be made between warehouses and the Central Store Office for the application of the preference clause. They argued that the tendering authority's interpretation was final and aimed to allot leases to a minimum number of entities.

The Court found significant merit in the Petitioner's arguments. It noted that the tender document clearly distinguished between the 16 warehouses and the Central Store Office. The Court emphasized that if the tendering authority intended Clause 4(IV) to apply to the Central Store Office, it should have used the term "premises" instead of "warehouses."

Considering that both the Petitioner and Respondent No. 4 submitted identical financial bids, the Court concluded that the application of Clause 4(IV) to the Central Store Office was arbitrary, irrational, and contrary to the tender conditions. Citing previous judgments, the Court suggested that in such a scenario, renegotiations should have been initiated to secure a better rate for the public property.

Therefore, the Court set aside the allotment of the Central Store Office to Respondent No. 4 and restored the tender process solely for the Central Store Office. It directed Respondent Nos. 1-3 to invite both the Petitioner and Respondent No. 4 for renegotiations to determine who would offer a higher rate. Respondent No. 4 was allowed to retain possession until a new decision was made.