Montecarlo Ltd. v. National High Speed Rail Corporation Ltd.

The Cyber Blog IndiaCase Summary

Role of digital signature in the bidding process and the mandatory requirement of physical signature

Montecarlo Ltd. v. National High Speed Rail Corporation Ltd.
(2021) 283 DLT 486 (DB)
In the High Court of Delhi
WP(C) 5127/2021
Before Justice Vipin Sanghi and Justice Jasmeet Singh
Decided on August 23, 2021

Relevancy of the Case: Role of digital signature in the bidding process and the mandatory requirement of physical signature

Statutes and Provisions Involved

  • The Constitution of India, 1950 (Article 226)
  • The Information Technology Act, 2000 (Section 3, 4, 5, 6)

Relevant Facts of the Case

  • The respondent issued a tender notice calling for bids for the Mumbai-Ahmedabad High-Speed Rail construction project. The present petitioner, along with five other bidders, bid for the project.
  • The respondent rejected the petitioner’s technical bid due to material deviations; they did not qualify for stage 1 of the evaluation.
  • The petitioner inquired about the rejection, and the respondent stated that the bid was deemed non-responsive. It noted that the authorised signatory on the petitioner’s behalf did not sign Form CON 1.0 (history of non-performing contract) and Form CON 2.0 (pending litigation).
  • The petitioner has filed the present petition because the respondents have acted discriminatorily while handling their bid.

Prominent Arguments by the Advocates

  • The petitioner’s counsel argued that the respondent had not adhered to the mentioned procedure; in case of non-conformity, they had to clarify it with the petitioner as per the mentioned clause. According to Clause 29.1 of Instruction to Bidders (ITB), the respondent must clarify from the petitioners in case of any serious and material omissions and deviations. The petitioner duly stamped the forms, but the authorised signatory did not sign them. However, the electronic bid submitted online was digitally signed with the knowledge and approval of the petitioner. According to Clause 33, non-signing of forms does not lead to material deviation.
  • The respondent’s counsel argued that the bidder must sign all required forms. The petitioner has not submitted physically signed CON 1.0 and CON 2.0 forms. The counsel argued that the scope of judicial scrutiny in tender matters is limited. The court must leave such issues to the commercial wisdom of the tender floating authority. The constitutional courts should only be concerned with the lawfulness of the decision and not its soundness.

Opinion of the Bench

  • The tender floating authority is obliged to act transparently while distributing State largess. Thus, such scrutiny by the courts concerning the soundness of the tender floating authority’s decision is essential in the public interest.
  • Whenever the bid of a bidder is rejected for whatever reasons, the reasons are bound to be conveyed to the bidder so he may avail of his remedies.
  • The respondent has discriminated against the petitioners as the other bidder’s bids were not disqualified because essential terms were not fulfilled. Still, the petitioner’s bid was rejected only because a physical signature was missing on two forms.

Final Decision

  • The bench allowed the writ petition, ordering the respondents to proceed in accordance with law qua the tender process by further examining its bid.

Aditi Mangesh Sawant, an undergraduate student at NMIMS Kirit P Mehta School of Law, Mumbai, and Adyasha Sahoo, an undergraduate student at the Institute of Law, Nirma University Ahmedabad, prepared this case summary during their internship with The Cyber Blog India in January/February 2024.