Bombay High Court
Gammon India Ltd. And Ors. vs Brihanmumbai Municipal Corporation ... on 20 July, 2000
Equivalent citations: 2001(1)BOMCR483
Author: B.P. Singh
Bench: B.P. Singh, S. Radhakrishnan
JUDGMENT B.P. Singh, C.J.
1. The petitioners herein have, by this writ petition, challenged the action on the part of respondent No. 1-Municipal Corporation purporting to reject and exclude as non-responsive the petitioners' tender for the work in question, which involves the construction and completion of approximately 5.6 Kms. and 6.35 Kms. long, reinforced concrete-lined tunnels of 3 metres finished diameter from Bhandup Complex to Malad Hill Reservoir and from Malad Hill Reservoir to Charkop Via Liberty Garden, using the same two full face rock tunnel boring machines.
2. Petitioner No. 1 claims to be a company incorporated under the Companies Act, 1956 and engaged in the business of construction, building activities and other allied specialised works, having to its credit successful completion of several prestigious projects. Petitioner No. 2 is a German company which has extensive experience, and has developed expertise, in civil construction work including boring tunnels and other allied activities. Petitioners No. 1 and 2 have formed a consortium for the tender in question called "Gammon Dywidag Jala Vitaran Consortium". Petitioner No. 3 is a Director of petitioner No. 1, and represents Petitioners Nos. 1 and 2 for the purposes of the consortium.
3. Respondent No. 1 herein is the Brihanmumbai Municipal Corporation while respondent No. 2 is the Municipal Commissioner. Respondent No. 3 is an officer of respondent No. 1 in-charge of Water Supply Schemes in the city of Bombay. The 4th respondents are a limited company whose tender has been accepted by respondent No. 1-Corporation and in whose favour the contract has been awarded notwithstanding the fact that its bid is higher than that of the petitioners by Rs. 32 lacs.
4. At the threshold, we may notice that the tender of the petitioners has been excluded on the ground of it being non-responsive, since the tunnel boring machines owned and possessed by the petitioners and intended to be used by them, as declared by them, is not of the requisite specification for boring a tunnel of 3.6 meter diameter.
5. A few facts, which are not in dispute, may first be noticed:---
By its invitation for bids (IFB) dated 12th August 1999, respondent No. 1-Corporation invited sealed bids on item rate basis for construction and completion of the aforesaid reinforced concrete lined tunnels of 3 metres finished diameter. Clause 2 of the IFB reads as follows:---
"2. The Municipal Commissioner for and on behalf of BMC invites sealed bids on item rate basis for construction and completion of approximately 5.6 Kms and 6.35 Kms long, reinforced concrete-lined tunnels of 3 metres finished diameter, from Bhandup Complex to Malad Hill Reservoir (MHR) and from MHR to Charkop Via Liberty Garden (LG) respectively, using the same two full face rock tunnel boring machines including construction of shafts about 50-80 metres deep using controlled blasting technique, and allied works within Brihanmumbai limits. The bidding is kept open to all the contracting firms, who meet the eligibility requirements and fulfill the qualifying criteria stipulated in the bid document. It may specifically be noted that the tunnel boring and subsequent construction activities will have to be initially commenced at both the end shafts of Bhandup-Malad tunnel simultaneously with the use of two TBMs and subsequently at LG and Charkop shafts of Malad-Charkop tunnel to meet the contract period requirement."
Clause 1.2 of the tender documents prescribes Location of Works as follows:---
"1.2 Location of Works The works include construction of above two rock tunnels, 3.6m bored diameter and concrete lined to 3m finished diameter each and about 5.6 Km and 6.35 Km long respectively between the end shafts. Each tunnel is to be bored using the same two modern full face rock tunnel boring machines (TBMs) simultaneously. The TBMS shall be first deployed at the end shafts of the B-M tunnel for simultaneous working. On completion of boring of the B-M tunnel, the two TBMS shall be dismantled, taken out of the tunnel, refurbished and installed in the LG and Charkop shafts of the M-C tunnel for simultaneous operation. As per the construction schedule, BMC intends to commission the B-M tunnel first within 48 months from the date of receipt of order of commencement of works and the M-C tunnel within 72 months from the date of receipt of order of commencement of works. Hence, the above sequence of utilisation of TBMs is to be strictly followed."
Clause 1.3 relates to the Scope of Work and 1.3(f) thereof provided as follows:---
"1.3(f) Boring of following tunnels of 3.6m bored diameter by two modern full face rock TBMs simultaneously including communication facilities, safety measures, lighting, ventilation, dewatering, wet/dry mucking and its disposal.
Order of Boring Tunnel Length(Appr) From Shafts
(i) First Bhandup-Malad 5.6Km. Bhandup & Malad
(ii) Second Malad-Charkop 6.35Km. Charkop and Liberty
Garden"
Clause 4.1.1 provided as under:---
"4.1.1 Scope of Work
This specification covers construction of tunnels from Bhandup Complex to Malad Hill Reservoir (MHR) and further upto Charkop Via Liberty Garden (LG) along with working shafts at Bhandup Complex, MHR, Charkop and LG and allied works. The shafts, Tunnel Boring Machines (TBMs) assembly areas and the tail tunnels are to be made by drilling and controlled blasting. The tunnels proper shall be bored by the same two TBMs as mentioned in Clauses 1.2 and 1.3. The work shall be executed in accordance with the best modern practices.
Clause 4.3.2 provided as follows:---
"4.3.2 The tunnels shall be excavated using the same two modern full face TBMs suitable for excavation of rock of all types encountered in the geotechnical investigation. Outline details of the TBMs and mode of transport to the sites shall be submitted by the tenderer alongwith the tender.
The TBMs shall include provision for forward probing at the face or on the sides of the excavated tunnels to check rock quality and location of likely places where water ingress could occur. They shall also include provision for pregrouting of rock in advance of excavating the tunnels to seal water bearing fissures or to improve the strength of the rock mass and provision for installing rock bolts or dowels within 10m of the excavated face. Tunnel excavation without forward probing shall not be permitted to be carried out.
The contractor shall submit full details of the TBMs, the backup train and all ancillary equipment to the Engineer at least 6 weeks before the same is ready for shipping. The contractor shall be solely responsible for ensuring that all equipment provided by him is suitable for the purpose of carrying out the works as mentioned in clauses 1.2 and 1.3 and any other. The TBMs shall be capable of excavating the tunnels of the required size to the line and levels shown on the Specification Drawings at the rate of at least 2.0m per hour so as to achieve a progress of minimum 350 metres per months in each section of the tunnels. All the equipment shall be capable of dealing with poor ground conditions over local areas and water inflow at the face.
In case the contractor proposes to use TBMs which have previously been used on other projects, the same shall be refurbished before they are transported to the sites. If the refurbishing is carried out by an organisation other than the original designer or manufacturer of the TBMs, the contractor shall arrange for an independent inspection and certification by the original designer or manufacturer to confirm that all refurbishing and adaptation can be accepted as being suitable for all the conditions that could be expected at the tunnels. After this initial refurbishing, the residual life of the TBMs each shall not be less than 1.5 times length of the tunnels to be excavated by each TBM."
Clause 4.14(c) dealing with Excavation of Shafts and Tunnels provided as follows:--
"4.14.1(c) Any excavation carried out over and above the minimum excavation line in the tunnels for the facility of erection, dismantling of TBMs or for any other facility required by the contractor for construction work will not be paid for separately and it is deemed that the extra cost towards excavation, concrete backfilling with the same grade concrete as in lining and other related expenses are included in relevant items of work. Only specified excavation carried out by drilling and blasting method as directed by the Engineer shall be paid for under the provisions of clause 4.10.6."
In instructions to bidders (ITB), clause 5.4(a) and (d) provided thus---
"5.4(a) availability (either owned or leased or by procurement of key construction equipment for this work as detailed in Schedule H, Volume-III;
(d) that the residual life of each TBM is not less than 1.5 times length of the tunnels to be excavated, as certified by the original designer or manufacturer;"
Clause 28.2 of the ITB provided as follows:---
" 28.2 The Employer will determine the substantial responsiveness of each bid to the bid documents. For purposes of this clause, a substantially responsive bid is one which conforms to all the terms, conditions and specifications of the bid documents without material deviations. The Employer's determination of a bid's responsiveness will be based on the contents of the bid itself without recourse to extrinsic evidence. Conditional bids will not be accepted."
6. It appears that the project is a World Bank aided project, and in line with the recommendations of the task force set up by the Government of India for World Bank aided projects, the tender document has been prepared by an independent consultant, the Tata Consulting Engineers, and the tenders were evaluated by the said Tata Consulting Engineers, who prepared a tender evaluation report after verifying the eligibility of bidders as per ITB and after determining the substantial responsiveness of eligible bids in accordance with ITB.
7. It is the case of the petitioners that they, being eligible, submitted their tender and they were the lowest bidder for the tender work, their bid being Rs. 32 lacs lower than the next lowest bid submitted by the 4th respondents. According to the petitioners, the tender document does not specify that only tunnel boring machines of 3.6 meter diameter can be used. Though the specifications refer to the tunnel having a diameter of 3.6 metres and concrete lined to 3 metres finished diameter, it also provides that 3.6 metres diameter is the outside limit upto which the contractor will be paid, even if the actual excavation exceeds/falls outside this limit. The tender also provides that any extra excavation/enlargement will be filled back with concrete of the same class as specified for the lining without any extra payment being made by the respondents for such filling. Since the tender work is an item rate contract and payment for excavation and concrete lining in the bill of quantities, is on the basis of running meters and not on the basis of volume/quantities of rock excavated, or the quantities/volume of rock bored, or the quantity of concrete poured, the extra excavation caused by using a bigger tunnel boring machine, and consequent additional filling/concrete lining, will be at the petitioners' cost and will not result in any additional burden to the respondent-Corporation. The petitioners were expected to provide at their own cost a concrete lining of thickness of 0.525 metre instead of the normal 0.3 metre concrete lining. It is, therefore, their case that the mere fact that one of the TBMs was capable of boring a tunnel of 4.05 metre diameter, could not be said to be a material variation so as to render their offer non-responsive.
8. It is the case of the petitioners that while the petitioners' consortium were the lowest tenderers, offering to complete the work for a sum of Rs. 149.49 crores, the tender of Hindustan Construction Co., respondent No. 4, was higher at Rs. 149.79 crores. The bids of others were even higher.
9. On making inquiries with the respondent-Corporation/authorities, the petitioners were orally/informed that the petitioners' tender may be treated as non-responsive because one of the TBMs which the petitioners had indicated would be used, had an excavation diameter of 4.05 metres as against the finished tunnel size of 3 metres with 0.6 metres concrete lining. The petitioners explained the correct position to the respondents, pointing out that what was asked for in the tender was the work to be done for construction of rock tunnel of 3.6 metres bored diameter and concrete lined to 3 metres finished diameter. Therefore, the size of the TBM was not relevant and what was relevant was only the final size of the tunnel, which the contractor was supposed to deliver. The petitioners learnt from the newspapers on 19th June 2000 that the respondent-Corporation had decided to reject the petitioners' tender and award the tender work to respondent No. 4, M/s. Hindustan Construction Company, the second lowest tenderer, and that the proposal was likely to be put up before the Standing Committee on 21st June 2000 and that respondent No. 2 has sought the approval of the Tender Committee for award of the contract to respondent No. 4.
10. The petitioners have produced as Exhibit 'H' to the petition, the proposal/report of the Municipal Commissioner to the Standing Committee. From the report, it appears that the consultants, M/s. Tata Consulting Engineers, did not consider the lowest quoted offer of the petitioners for the reasons given in Annexure '1' to the said report. It further discloses that so far as respondent No. 4 was concerned, they had one 3.6 metres dia tunnel boring machine in their possession and had proposed to procure one more TBM of Robbins make of the required diameter as per the bid document. From Annexure '1', it appears that the reason given by the Consulting Engineers for considering the tender of the petitioners as non-responsive is as follows:
"1. Serious non-conformity in respect of size of TBM offered (4.05m) which is a material deviation and hence the offer is non-responsive.
2. TBM of 3.6m. dia only has been specified as it meets the technical requirement of 3m. finished dia tunnel. Minimum possible excavation has been specified for the job since any higher size of excavation will have time and cost implications in higher muck removal, higher concrete lining quantities, extra dewatering due to higher possible seepage, higher grouting etc."
On 11th July 2000, the Standing Committee approved the recommendation/report of respondent No. 2 to award the contract to respondent No. 4.
11. The decision of the Standing Committee to award the contract to respondent No. 4 has been challenged on the ground that the same was arbitrary and discriminatory, since it amounted to exclusion of a qualified bidder from consideration even though its bid was the lowest. It is submitted that the exclusion of the petitioners' tender on the ground of its being non-responsive on the basis that a TBM of 3.6 metre dia only has been specified as it meets the technical requirement of 3 metre dia tunnel, is clearly erroneous inasmuch as the tender document did not stipulate that the tunnel boring machines should be of a particular type or diameter. Therefore, the only stated basis for exclusion/rejection of the petitioners' tender is ex-facie arbitrary, patently incorrect and vitiated. Although the technical specifications refers to the tunnels having a bored diameter of 3.6 metres, that dimension/stipulation is for the purpose of defining the minimum excavation line/the payment line i.e. the extent to which payment shall be made by the respondent-Corporation. A TBM of more than 3.6 metre diameter can also meet the technical requirement of 3 metre finished diameter. Excavation would result in the contractor having to fill in the additional thickness of concrete lining at his own cost to ensure a finished diametre of 3 metres.
It is further submitted that the conclusion recorded in the recommendation of the 2nd respondent that higher excavation will have time and cost implications in higher muck removal, higher concrete lining quantities, extra dewatering due to higher possible seepage, higher grouting etc., was patently erroneous. The petitioners have expressly undertaken to carry out the contract work (utilising extra excavation upto 4.05 metres diameter in certain sections) within the stipulated time-frame and by no extra cost to the respondent-Corporation. In fact, the tender expressly contemplates extra excavation by the tenderer and stipulates that no extra payment would be made for such excess excavation or the consequent additional concrete filling that would be required to achieve the stipulated finished diameter of 3 metres. Moreover, the TBM having a higher diameter will also have a higher capacity to remove excavated muck, etc.
12. An affidavit in reply has been filed on behalf of the respondent-Corporation in which it is stated that the decision to award the contract to respondent No. 4 has been taken after taking into consideration the report of M/s. Tata Consulting Engineers, who were appointed as consultants for the project. The replying respondents have accepted the recommendations made by the consultants and, therefore, there is no question of any arbitrariness/illegality on the part of the replying respondents. The bids were opened on 21st January 2000, and the tenders were evaluated by M/s. Tata Consulting Engineers who prepared the tender evaluation report. The recommendation made by the said consultants along with tender documents were studied by the concerned authorities of the replying-respondents and all the relevant documents were placed before the Tender Committee. The Tender Committee, in its meeting held on 2nd May 2000, unanimously agreed with the recommendation of the consultants that the offer of respondent No. 4 is the lowest evaluated responsive offer. Thereafter, the Municipal Commissioner forwarded to the Standing Committee draft letter on 25th June 2000, giving the terms and conditions of the tender, the evaluation of tenders and the recommendations. The Standing Committee considered the proposal in its meeting held on 11th July 2000 and by a letter dated 13th July 2000, respondent No. 4 was informed about the awarding of the contract in their favour. It is further explained that the tender documents of the petitioners indicated that in the portion of tunnel work to be handled by Gammon India Ltd., petitioner No. 1, the bored diameter of the tunnel would be 3.6 metres as required by the bid document. It further indicated that the portion to be excavated by petitioner No. 2, the bored diameter will be 4.05 metres as against 3.6 metres specified by the respondents. This did not comply with the requirements specified by the replying-respondents for boring a tunnel of 3.6 metres diameter, and it amounted to a serious non-conformity and material deviation from terms, conditions, specifications and drawings of the bid.
13. The replying respondents have further stated that they had made a provision for special advance for procurement of TBMs as TBMs are the main equipment required for this contract. Though the size of the TBM is not specified, the respondent-Corporation had clearly stipulated the size of the tunnel which is required to be bored by the tenderer. The very fact that the respondent-Corporation has mentioned the size of the tunnel which is to be bored clearly means that the tenderer has to use a machine which is compatible to bore the tunnel of the required size. The respondents were, therefore, justified in considering the tender offered by the petitioners as non-responsive.
14. Dealing with the submission of the petitioners that respondent No. 4 had only one tunnel boring machine of the required size, it was submitted that respondent No. 4 had offered to procure another tunnel boring machine required for boring the tunnel of the required size which is permissible under the tender conditions. In any event, these are matters which were considered by an independent agency of repute appointed by the replying respondents to prepare the tender documents and to evaluate the tenders after considering all the contract stipulations. The said agency treated the offer of the petitioners to be non-responsive as there is a serious non-conformity in respect of the size of the boring machine which is a material deviation from the terms and conditions of the tender. This is, therefore, a case which does not call for any interference from this Court in exercise of writ jurisdiction.
15. Respondent No. 4 who has been awarded the contract has also filed affidavit in reply and justified the action of the Corporation. It is stated that the bid of the replying-respondent has been approved after a detailed scrutiny at least by four bodies. The consultants viz., M/s. Tata Consulting Engineers, found the offer of the replying-respondent to be responsive and not that of the petitioners. Thereafter, the Tender Committee unanimously recommended the replying-respondents offer for acceptance as it was the lowest evaluated offer. The Municipal Commissioner also made a recommendation on the same lines and finally, the Standing Committee of the respondent-Corporation also found its tender to be the lowest and suitable.
16. Reliance placed by the petitioners on the technical specifications in support of their case has been termed as misconceived and without any basis in law. The project requires two TBMs to be utilised for the boring of each of the tunnels. The TBMs have to start boring simultaneously, one from each end of the tunnel. The boring would culminate in a meeting of the two TBMs around the center of the tunnel. Thus, by the very nature of the said project, the two TBMs would have to be of definite specification and diameter since the entirety of the tunnel would have to be of a uniform specification and diameter. Moreover, the boring and excavation would have to be kept to the minimum extent possible. Clause 1.2 of the Technical Specifications in terms provided that each tunnel is to be bored by using the same two modern full face rock tunnel boring machines simultaneously. The provisions of the Technical Specifications thus indicate that the bored diameter of 3.6 metres is the basis of the Technical Specifications developed by Tata Consulting Engineers.
Referring to Clause 4.14.1(c) as well as 2.2.499, it is submitted that these clauses do not in any manner permit the contractor to excavate and bore a tunnel of greater than 3.6 metres in diameter. Clause 4.14.1(c) only permits excavation over and above the minimum excavation line for the facility of erection, dismantling of TBMs or for any other facility required by the contractor, and not an excavation that increases the very bore of the tunnel. Similarly, Clause 2.2.499 applies not to the excavation of the bore of the tunnel but only to excavation of trenches.
17. Respondent No. 4 has also challenged the eligibility of the petitioners on various counts, but it is not necessary for us to go into those questions as the petitioners have not been found to be ineligible to make a bid, and, therefore, the tender has been rejected only on the ground of it being non-responsive. Respondent No. 4 has, however, submitted that the boring of a tunnel of greater than 3.6 metres diameter will have definite technical consequences, many of which may have been taken into account whilst providing for the Technical Specifications of the project. It is submitted that a tunnel boring of a higher diameter would have an impact on the stability of the surrounding rocks strata and there is no material to suggest that the greater instability produced would be compensated for merely by having thicker concrete lining. The Technical Specifications laid down in the tender documents were no doubt determined after a detailed geological survey and analysis by the consultants. Secondly, boring of a greater diameter also increases the aggregate area through which water can seep into the tunnel prior to its being lined with concrete. Since the said tunnel passess through the populated area of Mumbai City with existing old/new structures, increases in the seepage of water due to a greater bore diameter would also increase the risk of damage to the tunnels as well as the instability of the surrounding rocks strata. Respondent No. 4 has also sought to explain that the tunnel with larger bore may cost more in terms of money to the respondent-Corporation.
18. Having considered the submissions urged before us, we are of the considered view that no interference by this Court is called for. As noticed by us, the tender document was prepared by an expert body and the tenders were also evaluated by the same expert body which has the approval of the Tender Committee, the Municipal Commissioner and the Standing Committee of the Municipal Corporation. Counsel for the respondents are justified in placing reliance on the decision of the Supreme Court in the case of Raunaq International Ltd. v. I.V.R. Construction Ltd. & others, , and submitting that this is not a case wherein mala fide has been alleged against any person. Nor is there any allegation of any collateral motive for awarding the contract to respondent No. 4. The only ground of challenge is that the tender submitted by the petitioners has been held to be non-responsive by the expert body. In the absence of any allegation of malice, and in view of the reasons given by an expert body, there is no justification for interference by this Court. Relying upon the observations made in the aforesaid judgement, it is submitted that when an evaluation committee of experts is appointed to evaluate the offers, the expert committees special knowledge plays a decisive role in deciding which is the best offer. The award of the contract is essentially a commercial transaction, and even if the contract is awarded by a public body or the State, the considerations which are paramount are commercial considerations.
19. On a considerations of the terms and conditions, the specifications, etc., it appears that the work on the tunnel has to begin from two ends simultaneously, and for this, two boring machines have to be employed. Apparently, if the two boring machines having different bore diameters are employed, the tunnel would not be of uniform specification and diameter. Moreover, the works included construction of two rock tunnels, 3.6 metre bored diameter and concrete lined to 3 metre finished diameter. It is, therefore, apparent that the contractor had to employ TBMs which could bore the tunnels of the required diameter of 3.6 metres. In fact, it is clarified that each tunnel is to be bored using "the same two modern full face rock tunnel boring machines simultaneously." It, therefore, appears to us that not only two TBMs were to be used simultaneously, but the contractor has to use the same two modern full face rock tunnel boring machines. It, therefore, follows that the two machines to be employed on both the sides must be of the same dimension. The specifications required the boring of tunnels of 3.6 metre bored diameter and, therefore, the petitioners are not justified in saying that it did not make a difference if they bored one of the tunnels of a larger diameter and then reduced the same by concrete lining so as to give three metre finished diameter tunnel. Respondent No. 4 has given technical reasons why this could not be permitted. We are not in a position to test the correctness of the consequences that may follow if a larger tunnel is bored, that is, more than 3.6 metres diameter, but the consultants, an expert body, must be presumed to be aware of such consequences. The said expert body having considered all aspects of the matter and having come to the conclusion that the tender of the petitioners was not responsive, we find no reason to interfere with the conclusions reached by it and approved by the other bodies culminating in the approval granted by the Standing Committee of the respondent Corporation. There is not even an allegation that the consultants did not act fairly. Nor is there any allegation that any of the other bodies which considered the recommendation of the consultants had reasons to act unfairly against the petitioners and were inclined to show a favour to respondent No. 4.
20. Counsel for the petitioners submitted before us that if they were so informed, the petitioners could have also procured another TBM, capable of excavating a tunnel of 3.6 metres diameter. Moreover, even the existing 4.05 metres TBM could have been suitably modified to meet the requirements.
21. It is not possible for us to entertain this argument at this stage. It was open to the petitioners to offer to procure another TBM of the requisite dimension as was done by respondent No. 4. In fact, the respondent-Corporation had even made a provision for special advance for procurement of the TBMs. Rather than doing so, the petitioners insisted on their utilising the TBMs which they owned and possessed. Even if one of the TBMs in their possession was capable of being modified for excavating a tunnel of 3.6 metres diameter, such a statement is not to be found anywhere in the tender submitted by them. The respondent-Corporation, therefore, could not take into consideration these matters, when the tender of the petitioners was evaluated by the consultants, or even later. Moreover, the leasing of another TMB may have significant financial implications, and it may be that if the petitioners had to take a TMB on lease, their tender may not have been the same as it was. In the absence of an offer in their tender to procure a TBM, such a submission cannot be entertained at this stage.
22. Having considered all aspects of the matter, we are not in a position to say that the decision taken by the Municipal Corporation, based on the advice of experts, is either arbitrary or perverse. There being no allegation of mala fides against the consultants or against any member of the Committees that subsequently considered the recommendation of the consultants, there appears to be no reason justifying interference by this Court in exercise of writ jurisdiction. These are the reasons for which we dismissed the writ petition preferred by the petitioners by our order dated 20th July 2000.