The petitioner had a successful track record, having previously provided security services to Respondent No.1 in multiple zones, including Bhopal, Jaipur, and Delhi. On March 1, 2023, Respondent No.1 issued a Request for Proposal (RFP) for the empanelment of private security agencies, outlining specific financial eligibility criteria. The petitioner submitted its bid, fulfilling both technical and financial qualifications, as verified by a satisfactory site inspection.

However, the situation took a turn when discrepancies were noted regarding the petitioner’s financial turnover for the fiscal year 2019-20. An amount of Rs. 15,35,001 was highlighted as a mismatch between the turnover certificate provided by the petitioner’s Chartered Accountant and the audited financial statements.

Despite the petitioner’s attempts to clarify this discrepancy, including obtaining a certificate from its Chartered Accountant explaining the reclassification of income, Respondent No.1 issued a disqualification notice on August 22, 2023. The petitioner responded by lodging grievances and ultimately filed a writ petition seeking to quash the disqualification and compel the opening of its financial bid.

During the court hearings, the petitioner’s counsel, Mr. Sandeep Parikh, argued that the disqualification was arbitrary and lacked proper justification. He emphasized that the core issue was a minor financial mismatch that did not affect the petitioner’s overall eligibility, given its substantial turnover exceeding Rs. 341 crores.

On the other hand, Ms. Akshya Puturan, representing Respondent No.1, contended that the disqualification was warranted based on the mismatch identified during the financial document verification stage.

Upon reviewing the case, the court found that Respondent No.1 had not sufficiently substantiated the reasons for the petitioner’s disqualification. The court noted that the sole basis for disqualification was a vague statement regarding financial verification, without specifying how the petitioner failed to meet the financial eligibility criteria.

The ruling pointed out that even if the petitioner’s certificate clarifying the financial discrepancies had not been submitted with the initial bid, the substantial turnover was never disputed. The court criticized Respondent No.1 for acting with a complete lack of diligence and for the arbitrary nature of its decision-making.

Ultimately, the court ruled in favor of the petitioner, ordering that the disqualification be quashed and the financial bid be opened for consideration. The ruling emphasized the importance of fair evaluation processes in public tenders, reinforcing the principle that minor discrepancies should not overshadow the overall qualifications of bidders.

This case serves as a pivotal reminder of the complexities and challenges in public procurement processes. It highlights the necessity for transparency, clear communication, and reasonable standards of evaluation to ensure that capable service providers are not unjustly excluded from tender opportunities.

As the legal landscape continues to evolve, stakeholders in public procurement are encouraged to pay closer attention to the nuances of documentation and the critical importance of maintaining an open dialogue throughout the tender evaluation process. The court’s decision not only reinstates the petitioner’s eligibility but also sets a precedent for future tender evaluations, advocating for fairness and justice in public contracts.