Gujarat High Court
Shree Balaji Transport Service vs Food Corporation Of India on 11 January, 2017
Author: Harsha Devani
Bench: Harsha Devani, A.S. Supehia
C/SCA/20721/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 20721 of 2016
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SHREE BALAJI TRANSPORT SERVICE....Petitioner(s)
Versus
FOOD CORPORATION OF INDIA, GUJARAT REGION & 1....Respondent(s)
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Appearance:
MRS SANGEETA PAHWA, ADVOCATE for THAKKAR AND PAHWA
ADVOCATES, ADVOCATE for the Petitioner(s) No. 1
MR JAL S. UNWALLA, CAVEATOR for the Respondent(s) No. 1
MR PS CHAMPANERI, ADVOCATE for the Respondent(s) No. 2
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CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MR.JUSTICE A.S. SUPEHIA
Date : 11/01/2017
ORAL ORDER
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 3.12.2016 passed by the first respondent Food Corporation of India, whereby the technical bid of the petitioner has been rejected and a decision has been taken to award the contract to the second respondent herein.
2. The first respondent Food Corporation of India floated the tender bearing No. S&C/13(12)/2016-Veraval on 28.9.2016 for appointment of Handling and Transportation Contractor for loading/unloading/handling and transport of food grains and allied material, etc. in and around (Veraval) for a period of two Page 1 of 13 HC-NIC Page 1 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER years. In terms of the price bid of the tender rates, for transporting food grains, bags, etc. was Rs.733.10 per 10 MT. Because of certain technical errors, the said tender was required to be scrapped by the respondent Corporation. By a notice dated 18.10.2016, the said tender came to be scrapped with immediate effect, which came to be notified in the newspapers on 20.10.2016. It appears that on 20.10.2016, a new tender bearing No. S&C/13(14)/2016-Veraval came to be uploaded by the first respondent with certain changes. It is the case of the petitioner that the new tender had the same terms and conditions as contained in the old tender and that the technical bid for both the tenders was the same. However, in the price bid of the new tender, the rates for transporting food grains, bags, etc. was increased to Rs.773.10 from Rs.733.10 per 10 MT. In terms of the new tender, the date of opening of on-line submission of bids was 20.10.2016 and the last date and time for on-line submission was 11.11.2016 upto 11.00 hours. The date and time of opening the technical bid was 11.11.2016 at 11:30 hours and the date and time for opening of price bid of technically qualified bidders was to be notified subsequently.
3. It is the case of the petitioner that pursuant to the new tender, the petitioner deposited Earnest Money Deposit of Rs.6.50 lakhs along with Rs.525/- towards tender fee and made on-line submission of its bid on 10.11.2016. The petitioner submitted price bid quoting the number of the new tender and its price bid was 184% higher than the actual rates given in the schedule of rates for services. The petitioner submitted the price bid pertaining to the new tender, however, due to inadvertence the documents which were submitted along with Page 2 of 13 HC-NIC Page 2 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER the price bid, such as tender submission undertaking etc. pertained to the old tender, that is, Tender No. S&C/13(12)/2016-Veraval. On 11.11.2016, the technical bids of all the bidders including that of the petitioner were opened. Subsequently, by the impugned communication/e-mail dated 3.12.2016, the first respondent informed the petitioner that its technical bid was rejected on the ground that the petitioner had uploaded a scrapped tender. The petitioner was also informed that the amount of EMD deposited by it shall be refunded. Being aggrieved, the petitioner has filed the present petition seeking the relief noted hereinabove.
4. In response to the averments made in the petition, on behalf of the first respondent Corporation an affidavit in reply has been filed inter alia stating that the terms and conditions of the technical bid in the new and old tender remained the same except the date of the tender to remain open for acceptance (that is the validity of the bid submitted) got changed, which hold utmost prominence. As per the technical bid of the new tender, the tender offer was to remain open for acceptance upto 26.12.2016 whereas, as per the technical bid of the old/scrapped tender, the tender offer was to remain open for acceptance upto 05.12.2016. It is the case of the respondent Corporation that as per clause No.2 of the terms and conditions of the tender, the tenderer was to access the tender document on the website and was to download the tender form in the nature of PDF file from the website of the Food Corporation of India and after filling them with the relevant information, the tenderer was to submit the complete tender document by scanning the said documents on the website given in the said clause No.2 It has been averred in Page 3 of 13 HC-NIC Page 3 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER the affidavit in reply that if appendix-I to the tender document is seen, in clause 3C of the letter/undertaking given by the petitioner to the FCI, the petitioner had agreed to keep the offer of the tender open for acceptance only upto 5.12.2016 and not upto 26.12.2016 as required by the Corporation in the new tender document. Thus, not only has the petitioner downloaded the wrong tender form, but he has written wrong information and date in his own handwriting and therefore, it cannot be said that there was inadvertence on the part of the petitioner in submitting scrapped tender (technical bid). It has also been averred that the petitioner was required to download the new form of the new tender No.S & C/13(14)/2016-Veraval and ought to have submitted the technical bid of the said new tender instead of submitting the technical bid of the old/scrapped tender. Further, under clause (d) of clause (8), there is a specific term and condition mentioned in the tender document that if the tender does not comply with the instructions the same shall be summarily rejected. It has also been stated that in sub-clause (h) of clause 8, it has been clearly stated that no opportunity will be given to the tenderer to alter, modify or withdraw any offer at any stage after submission of the tender. Thus, in view thereof, no opportunity could have been given to the petitioner to alter or modify his technical bid.
5. Mrs. Sangeeta Pahwa, learned advocate for the petitioner, submitted that the impugned decision of the first respondent of rejecting the petitioner's bid on the ground that the petitioner along with the price bid had attached the tender submission undertaking and copy of tender relating to old tender, that is, Tender No. S&C/13(12)/2016-Veraval is illegal Page 4 of 13 HC-NIC Page 4 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER and arbitrary, inasmuch as such defect was merely a technical defect and substantial justice could not be denied to the petitioner on the ground of a technical defect which could otherwise be cured. It was pointed out that the petitioner had quoted the price bid with reference to the new tender, however, due to inadvertence, the technical bid of the old tender was scanned and uploaded pursuant to the tender notice in question. It was submitted that moreover, except for the fact that in the new tender document, the rates have been revised, there is no other difference in the two tender documents. It was pointed out that the offer as per the undertaking given by the petitioner was open till 5.12.2016 and that the technical bids were opened prior to 5.12.2016 and hence, it was always open for the respondent to accept the technical bid of the petitioner and the petitioner could have extended the offer in the undertaking to 26.12.2016. It was pointed out that the price bid submitted by the petitioner relates to the tender in question and that the petitioner fulfills all the essential eligibility conditions and hence, its tender could not have been rejected. It was emphatically argued that, in all, there were five bids, out of which, four bids have been rejected and the second respondent is the only bidder who is stated to have qualified and, therefore, there is no healthy competition, inasmuch as, the sole bid which has qualified technically, is being accepted by the first respondent. It was submitted that the petitioner has filled in the tender at 184%, whereas the second respondent has quoted its bid at 199%. Thus, there is a difference of 15% in the price bids which comes to Rs.48.75 lakhs at 15% of estimated value of the contract which is Rs.325 lakhs. Thus, if the tender of the petitioner were to be accepted, the first respondent would Page 5 of 13 HC-NIC Page 5 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER stand to gain Rs.48.75 lakhs, which is also in the public interest. It was urged that, therefore, the petitioner ought to be permitted to rectify its mistake and its tender ought to be considered along with the tender of the second respondent. It was, accordingly, urged that the petition deserves to be allowed in terms of the relief prayed for.
6. Vehemently opposing the petition, Mr. Jal Unwalla, learned advocate for the first respondent, submitted that the tender which has been filled up by the petitioner is not a valid tender and hence, the question is not whether the tender of the petitioner suffers from a technical or substantial defect, the question is whether the petitioner's tender can be said to be a valid tender. It was submitted that the petitioner having scanned and uploaded the wrong tender, the question that arises is, whether the petitioner can come before the court and request that a writ be issued to consider his filling a tender which is no longer in existence; and whether this can be termed to be a mere technicality or is a defect which goes to the root of the matter; and whether the action of the first respondent can be said to fall within the three categories laid down by the Supreme Court for interference by the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India, namely, whether the action of the respondent is manifestly arbitrary; done with a view to favour somebody; or that the process adopted or decision is mala fide. It was submitted that in the facts of the present case, the first respondent has gone strictly by the language of the new tender. Under the circumstances, the petitioner is not entitled to ask for a relief calling upon the first respondent to consider the language of the old tender which is no longer in existence.
Page 6 of 13HC-NIC Page 6 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER 6.1 In support of his submissions, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Montecarlo Ltd. v. NTPC Ltd., 2016 SCC OnLine SC 1149, for the proposition that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. In exercise of power of judicial review, the court should pose to itself the question whether the process adopted or decision made by the authority is mala fide or intended to favour someone or whether the process adopted or decision made is so arbitrary and irrational that the judicial conscience cannot countenance. It was submitted that even in case of a valid tender, the court has held that the existence of judicial review is limited and that having regard to the facts and circumstances of the present case, wherein the tender submitted by the petitioner is not a valid one, powers of judicial review under Article 226 of the Constitution of India may not be exercised.
6.2 It was further submitted that the price bids have already been opened and the matter is at the stage of accepting the tender of the successful bidder and that at this stage, the court may not interfere.
7. Mr. P. S. Champaneri, learned advocate for the second respondent reiterated the contents of the affidavit-in-reply filed on behalf of the second respondent. It was further submitted that the present petition involves disputed questions of fact Page 7 of 13 HC-NIC Page 7 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER and this court in exercise of powers under Article 226 of the Constitution of India would not embark upon any inquiry into such disputed questions of fact and that the petition being devoid of merits, therefore, deserves to be dismissed.
8. In rejoinder, Mrs. Pahwa, learned advocate for the petitioner, submitted that the petitioner had initially downloaded the first tender, namely, Tender No. S&C/13(12)/2016-Veraval, which later on came to be scrapped. However, while filling in the new tender, namely, Tender No. S&C/13(14)/2016-Veraval, on account of inadvertence, the petitioner had uploaded a scanned copy of the scrapped tender. It was submitted that the last date for opening the technical bid was 11.11.2016 and on 4.12.2016, the second respondent was declared to be a successful bidder. Thus, from 11.11.2016 to 4.12.2016, which comes to twenty four days, the first respondent could have informed the petitioner to cure the technical defect. It was submitted that in these circumstances, the decision of the first respondent Corporation is arbitrary, inasmuch as, the price bid which was uploaded by the petitioner in eprocure.gov.in website was for the new tender. Therefore, the first respondent Corporation was wholly aware that the old tender had been uploaded by mistake. It was submitted that considering the rates which have been filled in by the petitioner on account of which the first respondent would earn Rs.48 lakhs more, which is also in the public interest, the respondent Corporation was not justified in not considering the bid of the petitioner.
9. In rejoinder, Mr. Champaneri, learned advocate for the second respondent, submitted that permitting the petitioner to Page 8 of 13 HC-NIC Page 8 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER correct the tender would amount to extending the time for submission of tender, which is not permissible in law.
10. In the backdrop of the facts and contentions noted hereinabove, the sole question that arises for consideration is as to whether the tender submitted by the petitioner can be said to be a valid tender and if that is so, whether the defect in the tender submitted by the petitioner is a technical defect or a defect of substantial character warranting rejection of its technical bid.
11. The facts are not in dispute. The initial tender which was issued by the respondent Corporation bearing No. S&C/13(12)/2016-Veraval came to be scrapped on 18.10.2016 and a fresh tender came to be issued on 20.10.2016 bearing No. S&C/13(14)/2016-Veraval. It is also an admitted position that the petitioner submitted an on-line bid pursuant to the new tender issued by the first respondent, however, while submitting the technical bid, the petitioner scanned the old tender bearing No. S&C/13(12)/2016-Veraval and submitted the same; however, while the technical bid which has been uploaded by the petitioner related to the old tender, the price bid was in relation to the new tender. In view of the fact that the petitioner had submitted a scrapped tender, the first respondent Corporation has rejected the same. While it has been contended on behalf of the petitioner that the defect is merely technical in nature, on behalf of the respondents, it has been submitted that the tender which has been filed is not a valid tender and hence, cannot be taken into consideration.
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12. Undisputedly, the tender process in question relates to Tender No. S&C/13(14)/2016-Veraval and not the Tender No. S&C/13(12)/2016-Veraval. In terms of the tender process, the technical bid was to be opened on 11.11.2016 and the date and time of opening the price bids of the technically qualified tenderers were to be notified subsequently. Therefore, as on the date of opening of the technical bids, the first respondent would examine only those technical bids submitted by the concerned bidders and was not required to look at the price bids at that stage. In the facts of the present case, the petitioner has submitted a technical bid in relation to the scrapped tender and not in relation to the tender in question. Therefore, the tender which was submitted by the petitioner itself was not a valid tender, inasmuch as it did not relate to the tender in question bearing No. S&C/13(14)/2016-Veraval. When the tender submitted by the petitioner itself is not a valid one, it goes to the root of the matter, inasmuch as, the first respondent cannot be expected to or permitted to accept an invalid tender. The fact that the price bid is in terms of the new tender is of no avail to the petitioner, inasmuch as, the question of opening the price bid of the petitioner would not arise till the petitioner crosses the stage of being technically qualified and for the purpose of being technically qualified, the technical bid of the petitioner has to be in order. In the facts of the present case, the technical bid of the petitioner not being in relation to the tender in question, it cannot be said that the first respondent Corporation acted mala fide or arbitrarily or with a view to favour any party while rejecting the technical bid of the petitioner.
13. Moreover, the record of the case reveals that the Page 10 of 13 HC-NIC Page 10 of 13 Created On Sat Aug 12 04:44:36 IST 2017 C/SCA/20721/2016 ORDER petitioner had submitted a forwarding letter to the respondents which is dated 28.9.2016 in relation to the scrapped tender agreeing to keep the offer open for acceptance upto and inclusive of 5.12.2016, whereas in terms of the new tender, the petitioner was required to keep the offer open uptil 26.12.2016. Admittedly, along with the technical bid even the forwarding letter keeping the offer open for acceptance is limited only to 5.12.2016 and not to the date as stipulated in the fresh tender.
14. On behalf of the petitioner, reliance has been placed upon the decision of the Supreme Court in the case of Poddar Steel Corporation v. Ganesh Engineering Works, 1991 (3) SCC 273, for the proposition that the requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case, the authority issuing the tender may be required to enforce them rigidly. In the other cases 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.
15. In the opinion of this court, the question as to whether or not the petitioner has complied with the essential conditions of eligibility or not would come into question provided the tender submitted by the petitioner is a valid tender. The fact that the technical bid has been filed in respect of an invalid tender, the question of going into whether or not the essential conditions of eligibility are satisfied or not, would not arise.
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16. It has been submitted on behalf of the petitioner that between the date of opening of the technical bids and the opening of the price bids there was ample time for the respondent Corporation to permit the petitioner to rectify the defect in the tender. Indubitably, the technical bid submitted by the petitioner was in respect of the scrapped tender. It is an admitted position that all the tenders were to be submitted online and in terms of the tender notice the last date and time of opening of technical bid was 11.11.2016 at 11:30 hours. Since this is an online process, it cannot be gainsaid that the site for uploading the tender would no longer be open after the stipulated time and hence, it would not be possible to a party to upload a tender after the stipulated time limit. The submission of the petitioner that it ought to have been permitted to rectify the defect has to be examined in the light of the above factual position. Since the technical bid was to be opened only after the time limit for submitting tender bids, by the time the technical bids are opened, the site for uploading tenders would have closed. The defect in the present case is of submitting an invalid/wrong tender. Such defect could be rectified only by submitting a valid tender. However, in view of the fact that tenders could be uploaded only within the time stipulated, that is, 11.11.2016 till 11:00 hours, even if the petitioner were permitted to rectify the defect it would not be possible, as no tender would be accepted after the stipulated time limit. The contention that the petitioner ought to have been permitted to cure the technical defect, therefore, does not merit acceptance inasmuch as in the facts and circumstances, of the case it would not be possible to cure the defect in question.
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17. In the above backdrop, this court is of the opinion that the submission of the scrapped/old tender pursuant to the tender notice in question, would amount to the petitioner not having submitted a valid tender. The defect in question, therefore, cannot be said to be a technical defect which can be permitted to be cured by the respondent Corporation. Besides, having regard to the facts and circumstances of the case, it cannot be said that the action of the first respondent in rejecting the technical bid of the petitioner suffers from any legal infirmity within the parameters laid down by the Supreme Court in the above referred decisions. Under the circumstances, no case has been made out so as to warrant interference. The petition, therefore, fails and is, accordingly, dismissed. Notice is discharged with no order as to costs.
18. At this stage, the learned advocate for the petitioner has prayed that this order be stayed for a period of four weeks so as to enable the petitioner to avail of the remedy before the higher forum. The request has been considered and declined.
(HARSHA DEVANI, J.) (A. S. SUPEHIA, J.) zgs Page 13 of 13 HC-NIC Page 13 of 13 Created On Sat Aug 12 04:44:36 IST 2017