Jharkhand High Court
Amr - Dev Prabha vs The Union Of India Through The Secretary on 12 April, 2018
Bench: Aparesh Kumar Singh, Ratnaker Bhengra
1
IN THE HIGHT COURT OF JHARKHAND AT RANCHI
L.P.A. No. 466 of 2017
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AMR - DEV PRABHA --- --- --- Appellant
Versus
1. The Union of India through the Secretary, Ministry of Coal
2. The Central Vigilance Commission through its Commissioner
3. The Bharat Coking Coal Limited through its Chairman cum Managing Director
4. The Chairman cum Managing Director, Bharat Coking Coal Limited
5. The General Manager, Contract Management and Sales, Bharat Coking Coal Ltd.
6. M/s C1 India Pvt. Limited, Noida through its Chairman
7. The Chairman, M/s C1 India Pvt. Limited, Noida
8. M/s R.K. Transport Co., Durg, Chhatisgarh --- --- --- Respondents
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Coram: Hon'ble Mr. Justice Aparesh Kumar Singh
Hon'ble Mr. Justice Ratnaker Bhengra
For the Appellant: M/s Ajit Kumar Sinha, Sr. Advocate, Mohini Priya,
Kumar Sundaram, Advocates
For the Resp - UOI: Mr. Madan Prasad, CGC
For the Resp - BCCL: Mr. Anoop Kr. Mehta, Amit Kr. Sinha, Advocates
For the Resp Nos. 6&7: Mr. Sharad Kaushal, Advocate
For the Resp No. 8: M/s Ratan Kr. Singh, Anurag Vijay, Advocates
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Reserved on: 15/03/2018 Pronounced on: 12/04/2018
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Aparesh Kumar Singh, J: The appellant had questioned the award of work under NIT No. BCCL/GM (CMC)/e-Tender/F-HEMM-0S/2015/312 dated 09.03.2015 to the Respondent No.8 as being arbitrary, unreasonable and malafide with an intent to favour him. He accordingly sought quashing of the Letter of Acceptance dated 30.05.2015 issued in favour of the Respondent No. 8 and approached the Writ Court.
2. Learned Single Judge on a conspectus of things, in the ultimate analysis, came to the conclusion that public interest did not suffer as the bid offered by the Respondent No. 8 was much higher than the petitioner and held that the impugned action of M/s BCCL or C1 India Private Limited was not unreasonable, arbitrary or unfair. Learned Single Judge also did not find infirmity in the action of the Respondent BCCL in condoning the delay in acceptance of the Performance Guarantee even after expiry of 28 days from the date of receipt of Letter of Acceptance on the representation of the Respondent No. 8 in view of Clause 4.3 of the terms and conditions of the contract which gave discretion to the CMD, BCCL to permit the successful agency to submit performance security up to an extended period. The writ petitioner being aggrieved by the impugned judgment dated 16.08.2017, has preferred the present Letters Patent Appeal.
23. Learned Senior Counsel Mr. Ajit Kumar Sinha, representing the appellant, has during the course of his elaborate submissions, questioned the legality and correctness of the view taken by the Learned Single Judge. In the process, the relevant terms and conditions of the NIT dated 09.03.2015 have been placed for our consideration. Clause 9 relating to the terms of 'Bid Opening', have been read over along with 'Business Rules for Reverse Auction' prescribed as per Clause 9(vi). Clause 8 which provides for Independent External Monitor, has also been referred to as being relevant to the material in controversy. Learned Senior Counsel has also placed the documents at Annexure-3 being the screenshots which showed different stages of the reverse auction process and depict the appellant as L-1 at 13:03:58 hrs. One of the screenshot also shows the time remaining as 01 second at 13:03:46 hrs i.e. before the close of 30 minutes period of the lowest bid submitted by the petitioner, with no other better bid submitted by any other bidders. This, according to him, was in conformity with the clause 9(ix). He has further placed e-mails of Respondent No. 8 (Annexure-34) sent at 13.36 PM and 13.22 pm. He has asserted that no other bidders had actually complained of interruption in the bid process. On complaint being made by the petitioner, one of the Independent External Monitor (IEM) gave a clear opinion that there was no system failure as alleged and resumption of reverse auction was not a fair decision. He had also heard the representative of M/s BCCL and taken note of replies from other tenderer that they did not experience any system failure during the auction. He has expressed serious doubts about the transparency in the decision making process. The other Independent External Monitor Mr. L.C. Singhi, IAS (Retd) however gave a contrary opinion.
4. Learned counsel further pointed out that despite the interim order dated 04.11.2015, passed by the Learned Single Judge to produce all the relevant documents in original, C-1 India Private Limited and BCCL rushed to a third agency CERT-In, which is a body created by the Ministry of Information and Technology. CERT-In gave a clear opinion that though, during the crucial period between 12.50 hrs to 13.05 hrs, the bandwidth available to the bidders was very low and web access logs shows that all the bidders had faced problem in connecting to the server running the web application which could be due to dual fiber cable cut as reported by M/s Tata Communication Limited and also evident from various graph provided by them, but the service provider C1 Indian Private Limited was well connected to the server running web application throughout the reverse auction process including the crucial period. It further opined that even after receiving the complaint, M/s C1 India Private Limited did not pause the Reverse Auction Application running on the server which led to closure of the reverse auction bidding process during the crucial period.
3CERT-In did not find any external interference, manipulation and interruption in the Reverse e-auction Bidding Application running on the virtual server. Learned Senior Counsel has relied upon this opinion to reinforce his submission that the Reverse Auction Bid Process did not suffer on account of any technical glitch at the end of the service provider C-1 India Private Limited and ended with the appellant being declared successful lowest bidder at 13:03:58 hrs. Therefore, action of the service provider and BCCL in resuming the reverse auction process from 2.30 pm was in clear violation of Clause 9 (ix), (xii) and (xiii) of the NIT. It stipulated that the Reverse Auction would stop in case the particular bid remains unresponded for 30 minutes between 11.00 hrs to 18.00 hrs on the second day. That the service provider or the BCCL will not be responsible for disruption of connectivity or any failure at the bidder's end. It further provided that in case of any technological or system failure at the service provider's end, bid will be paused and it will get extended for the period system remained down. He submits that the bid process was never paused and therefore, ended up successfully in favour of the lowest bid of the appellant. Learned Senior Counsel has also pointed out to the logs enclosed with Analysis Report submitted by C1 that after resumption, the Respondent No. 8 logged in the system of the service provider with different I.D. and password other than one with which it earlier participated. This was in breach of the terms of the Business Rules for Reverse Auction. It provided that only Single Log of same User id and password is permitted at a time. All other bids were submitted by the respective bidders with the same user I.D. and password. After making elaborate reference to these terms and conditions of the NIT and relevant documents on record, learned Senior Counsel has made the following submissions:
That, the parties are bound by the terms and conditions of the contract and no derogation thereof to the advantage of one and disadvantage to the other bidders could have been made by the BCCL or service provider. As per the terms and conditions of the NIT, the service provider or aggrieved bidders or the BCCL could have made reference regarding any complaints to Independent External Monitor only but could not have approached the third agency i.e. CERT-In. However, even the CERT-In report affirms the apprehension of the appellant that reverse bid process was vitiated in order to favour the Respondent No. 8 by resuming the bid process at 2.30 pm, even though the appellant has been declared as successful L-1 bidder. The role of service provider had ended up at the close of auction and he had become functus officio. He has relied upon the following judgments in support of his submissions:
i. (2009) 5 SCC 313 para-28 and 32 [Bank of India & another vs. K. Mohandas and others and analogous cases] ii. (2013) 5 SCC 470 para-23 and 30 [Rajasthan State Industrial Development 4 And Investment Corporation and another vs. Diamond & Gem Development Corporation Limited and another] iii. (2007) 14 SCC 517 para-22 [Jagdish Mandal Vs. State of Orissa & others] iv. (2008) 8 SCC 92 para-26 and 27 [State Bank of India & others vs. S.N. Goyal] v. (2008) 2 SCC 507 para-24 [Ajay Mohan & others Vs. H.N. Rai & others] Learned Senior Counsel submits that the entire efforts in such a public auction should be to fetch maximum price. He has relied upon the judgment rendered by the Apex Court in the case of Ram and Shyam Company Vs. State of Haryana and others (1985) 3 SCC 267 and Manoj I Naik and Associates Vs. Official Liquidator (2015) 3 SCC 112. On the basis of these submissions, finding of the Learned Single Judge has been assailed. He submits that even during the course of hearing in the present appeal also, an offer was made by the appellant which is Rs. 455 crores lower other than the amount offered. The Respondent BCCL were asked to take instruction and file reply. Despite being a huge difference in the offer of the appellant, the BCCL chose to ignore it. As a matter of fact, it proceeded to issue the Letter of Intent in favour of the Respondent No. 8 on 23.11.2017 which amounted to overreaching the orders passed by this Court.
5. The Respondent No. 8, represented by the learned counsel Mr. Ratan Kumar Singh, has countered the arguments of the appellant at length. The thrust of his argument is that the appellant has acquiesced in the process of auction and participated in the bid after its resumption at 2.30 pm by offering 12 bids. He made no objection on the return of earnest money on 15.06.2015 being the unsuccessful bidder. He also did not raise any grievance even when Letter of Acceptance was issued in favour of the Respondent No. 8, the successful bidder, on 30.05.2015. The writ petition was filed after much delay on 10.08.2015 whereas the successful bidder was required to submit the price break up within two hours of being declared L-1 and submit the original documents within five days, as per clause 9(ix) and clause 10 of the NIT. The case of the appellant revolves around the allegation of malafide. However, not a single person has been impleaded by name to substantiate this charge. E-mails exchanged between the service provider at 12.59 pm on 05.05.2015 with M/s TATA Communication Limited, the mail sent by M/s TATA Communication Ltd at 2.11 pm on the same day to C-1 India Private Limited and e-mail of the Respondent No. 8 to C-1 India Private Limited at 13:22 hrs testify that there was a technical glitch in the system. M/s TATA Communication Ltd. accepted through its e-mail that the services were affected due to dual fiber cut in their intra-city networks between 12.55 pm to 13.05 pm. One path was affected due to cable cut at 10.00 km from Concord during private civil work and other path was affected due to faulty patch cord between 5 Management System and equipment in Sector 62 POP, NOIDA. It regretted the inconvenience caused and communicated that all services observed were up after replacing faulty patch cord by their network team. The graph enclosed to the Annexure-35 e-mail dated 05.05.2015 sent at 2.11 PM by TATA Communication.com shows interruption during the said period. After correction of the glitch, all the bidders were communicated through e-mail by C-1 India Private Limited starting from 2.30 PM to 2.36 pm about the resumption of bid process and also through telephone. All the bidders participated after resumption including the appellant. The first bid after resumption was placed by M/s Dhansar Engineering Company Private Limited and not by the Respondent No. 8. The bid time was extended beyond 18:00 hrs on 05.5.2015 i.e. 2nd day, for the period the system remained down. The price difference in the lowest bid of the Respondent No. 8 with that of the next bidder i.e. the appellant, the next lowest bid during the extended period, was Rs. 170 crores. If the difference is compared to the bid submitted by the appellant at 12.33 hrs before interruption, it was in the range of more than Rs. 300 crores. All these contemporaneous documents including the report of CERT-In undisputedly show that there was indeed a technical problem which affected the Reverse Bidding Process and caused interruption. He submits that Mr. L.C. Singhi, the other Independent External Monitor, examined the complaint made by the appellant comprehensively and came to the correct opinion that there was no unfairness in the bid process. He examined the submission of the complainant, BCCL and the service provider with the documents submitted by them. He also observed that though, screenshots submitted by the complainant showing auction closed at 13:03:58 hrs, were not fabricated, but they do not indicate true picture of the auction process. He also noted that if the complainant claims to be L-1 at the end of the process, he did not stake any claim immediately thereafter. There was no protest from the side of the complainant when the resumption of auction was notified at about 14.30 hrs. No communication was made either by the appellant about the L-1 status with BCCL or with the service provider immediately after 13:03:47 hrs when the auction process was allegedly closed. The IEM observed that it was equally surprising that after the reverse auction resumed at 14.30 hrs on 05.05.2015, the complainant / appellant herein actively participated in the bid process. Learned counsel has also placed various sub clauses of Clause 9; 'Bid Opening' in support of his submission. According to him, in terms of clause-9(ix), C1 India Private Limited communicated to the Respondent No. 8 that he has been declared as L-1 bidder at 19.32 hrs on 05.05.2014 itself (Annexure-9). The Respondent No. 8 also sent his reply at 21:08:26 hrs on the same day vide Annexure-10. C1 also communicated the lowest quoted price of the Respondent No. 8 as a successful bidder 6 to BCCL on 05.05.2015. In reply to the contention that C1 India Pvt. Ltd. has approached CERT-In on its own, Learned counsel for the Respondent No. 8 has placed the communication at Annexure-44 series which are reminders dated 05.12.2015, 17.12.2015 and 25.12.2015 by BCCL to C1 India Private Limited. It is pointed out that it was BCCL who had approached CERT-In vide letter dated 17.11.2015.
6. CERT-In is widely recognized as Indian Computer Emergency Response Team. It is constituted under the Department of Information and Technology, Ministry of Communication and Information and Technology, Government of India by the Notification published in the Extraordinary Gazette. It deals with the different types of cyber security incidences in the country and offers support depending upon the types and severity of the incident, affected entity and the resources available with CERT-In at that time. It is headed by a Director General and functions on 24 hours basis having its website www.cert-in-org.in. It is the highly specialized agency of the Ministry of Communication and Technology with unimpeachable status to inquire into any such cyber security incident within the country. Therefore, no fault can be found with the Respondent BCCL after it had approached CERT-In to examine the Reverse Auction Bid Process, whether it was affected by any system glitch or by external manipulation, fabrication, etc.? The entire logs submitted by the C1 India Private Limited of all the bidders and also of the service provider, have been carefully examined. CERT-In's Report clearly shows that there was no external interference, manipulation or interruption to the Reverse Auction Bid Application running on the virtual server. However, the analysis of the web access logs of the bidders showed that during the crucial period 12.50 hrs. to 13:05 hrs available for the bidders, all the bidders had faced problem in connecting with the server running with the web application which was due to dual fiber cable cut as was reported by M/s TATA Communication Ltd. Connectivity problem was severe for the Madhucon Project Limited, M/s R.K. Transport Company (Respondent No. 8), M/s Dhansar Engineering Private Ltd, Ambey Mining Private Ltd while for the others such as M/s Monte Carlo Ltd. M/s AMR-DEV Prabha, the appellant herein and PLR Projects Ltd., the problem faced was intermittent. Learned counsel has also answered the issue relating to login on the part of the Respondent No. 8 through a different I.D. and Password after resumption of the bid process by referring to the same conditions under the Business Rules of Reverse Bid Process. He submits that it only stipulated that at a time only single login of the same user with the same password would be permitted. It may happen that a bidder may access the server of the service provider through another I.P. Address, to which there is no restriction.
77. Learned counsel for the Respondent No. 8 submits that the entire reverse auction bid process, if seen in totality, is not vitiated on any grounds of arbitrariness, unreasonableness or malafide. In such matters, Courts should maintain caution and restraint in exercising the powers of judicial review. It should not substitute its decision with that of the employer. It should not interfere even if there is procedural aberration and error in the assessment made. If the entire action judged in totality, does not suffer from arbitrariness or malafide in order to favour someone,deference must be given to the opinion of the experts in the field.When the employer has, after due consideration of all the relevant factors, arrive at a balanced decision with full application of mind, it is not appropriate for the Court to interfere so long as the view taken by the experts or the authority competent to take a final decision, is a decisive view. In this case, the appellant apart from referring to one or the other reports of the Independent External Monitor or that of CERT-In, has not come forward with the report of any recognized expert in the field to create doubts about the purity of the reverse auction process.
He submits that the conduct of the appellant disentitled him from seeking any discretionary relief from this Court under Article 226 of Constitution of India. There is a huge delay in invoking the jurisdiction of the Writ Court after finalization of the auction process which is fatal to the challenge. He placed reliance upon the judgment rendered by the Hon'ble Supreme Court in the case of M/s G.J. Fernandez vs. State of Karnataka and others[AIR1990 SC 958], para 14 to 16]. He has also placed reliance on the case of Ramana Dayaram Shetty vs. The International Airport Authority of India and others [AIR 1979 SC 1628 para-36], State of M.P. and others Vs. Nandlal Jaiswal and others [(1986) 4 SCC 566 para-24, 34 and 39]. Learned counsel submits that in the entire body of the writ petition, the petitioner failed to make any mention that he had submitted 12 bids after resumption of the bidding process and participated in it. The writ petition is liable to the dismissed on the principles of suppresio very suggestio falsi. Reliance has been placed on the judgment of the Apex Court in the case of Mahanagar Telephone Nigam Limited Vs. State of Maharashtra and others [(2013) 9 SCC 92 para-22 thereof on the parameters and the principles under which the power of judicial review is exercised. He has also relied upon the case of Air India Ltd. Vs. Cochin International Airport Ltd and others [(2000) 2 SCC 617], Jagdish Mandal Vs. State of Orissa and others[(2007) 14 SCC 517, para-22 and in the case of Siemens Aktiengeselischaft and Siemens Limited vs. Delhi Metro Rail Corporation Limited and others [AIR 2014 SC 1483] where the Apex Court summarized these principles. Paragraph-17, 18, 21, 22, 27, 29 and 30 of the Report have been relied upon in support. Based on these 8 submissions, he submits that the appeal deserves to be dismissed. That the findings rendered by the Learned Single Judge are well considered after taking into account all issues on facts and law involved in the case. He further submits that the Respondent No. 8 has made considerable progress in the execution of the work after the award of LOI and, any interference by this Court may adversely impact larger public interest.
8. Learned counsel for the Respondent Nos. 3 to 5 BCCL has placed the 3rd supplementary counter affidavit filed in the writ petition (Annexure-48 to the Memo of Appeal) and submitted that it contains the stand of the said Respondent. It states that BCCL in order to maintain transparency and fairness in the Reverse Auction Process, appointed C-1 India Private Limited as service provider to provide electronic tendering with or without Electronic Reverse Auction as per the scope of the work detailed in the NIT. C-1 India Private Limited is one of the leading Company in India providing electronic procurement and sourcing solutions on a turn key basis. As per the NIT, C-1 India Private Limited had full authority and power to restart or resume the Reverse Auction Process without seeking any permission from anybody including the BCCL and extend the time of said Reverse Auction Process to the extent of the period it is interrupted and disrupted. BCCL had absolutely no power and control as well as authorization to either restart or stop the Reverse Auction Process or interfere in it in any manner. Reverse Auction Process ran smoothly on the first scheduled date i.e. 04.05.2015. However, on 05.05.2015, it was affected from 12.55 hrs. to 13.05 hrs. due to dual fiber cut which was later on rectified and consequently, time for Reverse Auction Process came to be extended for 1:27 hrs. beyond the scheduled time of 18.00 hrs, as per Clause 9(xiii) of the NIT. C-1 India Private Limited had received calls from the participating bidders about facing problem in submitting their bids between 12.55 hrs to 13.00 hrs. Consequently, it sent an e-mail on 05.05.2015 at 12.59 hrs. to TATA Communication Ltd. (TCL) mentioning "My Link is down". Servers of BCCL were hosted at the data center of TCL. Clause 22 of Section 4 of the NIT, mandates C- 1 India Private Limited to host the servers of BCCL at a secure data center.
9. In the meantime, the Respondent No. 8 sent an e-mail on the same day on 05.05.2015 at 13.22 hrs and 13.36 hrs. to C-1 India Private Limited and M/s BCCL, complaining that at about 1.00 PM, the Reverse Auction Process suddenly stopped when the last time left was 13 minutes. After that, time did not reduce and when they again logged in, the site was not working for some ten minutes and after that when it was opened, auction was showing closed. As such, some technical fault had been caused from the service provider and auction should be started immediately. TCL sent an e-mail to C-1 India Private Limited at 2:11 pm confirming that the service was affected from 12.55 PM to 13.05 pm due to dual fiber cut in their intra-city network.
9However, all services to be up after replacing the faulty patch cord by their network team. The TCL also prepared Server Monitoring Report containing latency graph from 12.00 hrs. to 15.00 hrs on 05.05.2015 at 18.:30:08 hors. It clearly showed interruption due to which services were affected. C-1 India Private Limited had resumed the bidding at 14:30 hrs. after receipt of the aforesaid e-mail. The resumption was duly communicated to all participating bidders by sending them individual e- mails including the petitioner. Thereafter, it sent an e-mail at 15:02 hrs to the Respondent BCCL, informing them about the unexpected occurrence at Auction Server due to which, auction got interrupted at 1.03 PM and got closed. In consultation with CMD Office, it resumed the auction at 2.30 PM and informed all the participants. Remaining time between the closure time of the auction and resumption time of auction would be provided if the auction will reach in the extended time past 6.00 pm. Petitioner actively participated after resumption including during the extended time of 1:27 hrs and the last bid of the petitioner was received at 19:26:24:533 hrs. Petitioner submitted as many as 12 bids after resumption and 08 bids during the extended time without any protest or demure. The Reverse Auction Process concluded at 19:27 hrs on 05.05.2015 and the Respondent No. 8 was declared as L-1. LOA was issued in his favour on 30.05.2015 by the Respondent BCCL. BCCL duly returned the earnest money deposited to the unsuccessful bidders including the petitioner in terms of Clause 14.3 and 23.4 of ITB- Instruction to Bidders. The Bank Guarantee dated 10.04.2015 for Rs. 1.00 crore was returned to the petitioner by letter dated 15.06.2015 through speed post. Petitioner did not raise any objection or lodged any protest against it.
10. Learned counsel for BCCL further states that during the pendency of the writ petition, C-1 India Private Limited wrote on 07.10.2015 to BCCL in connection with discussions during Independent External Monitors (IEM) held on 22.09.2015 at BCCL Kolkata Office. The said letter deals with the chronological records of the auction event. In the meantime, upon complaint of the petitioner, both IEMs gave their individual reports which differed from each other and were placed before the CMD, BCCL. M/s BCCL requested the STQC Directorate (Standardization, Testing and Quality) to conduct an audit in respect of Reverse Auction event of the Server of C-1 India Private Limited and submit a report about the interruption and resumption of Reverse Auction Process. However, STQ expressed its inability, considering the extremely technical nature of the subject and conveyed that it requires investigation by an independent body having high expertise in such matters. Thereafter, Director General, CERT-In was requested by the Respondent BCCL to submit a report about the actual occurrence of the interruption and resumption of the Reverse Auction 10 Process through letter dated 17.11.2015. BCCL also wrote letter to C-1 India Private Limited on 20.11.2015 to further probe the matter and prepare a detailed report. Three reminders were sent on 05.12.2015, 17.12.2015 and 25.12.2015 to C-1 India Private Limited for compliance of its request. A reminder was also sent to the Director General, CERT-In for compliance of the request on 25.12.2015. The Director General, CERT-In, Government of India Ministry of Communication and Information Technology through its letter dated 28.12.2015, sent its report in connection with the investigation of the incident with an enclosure 'Incident Analysis Report' to M/s BCCL. Investigation was conducted by Shri Omveer Singh, Scientist 'F' CERT-In.
11. Mr. Mehta, learned counsel for the BCCL has also referred to 'Incident Analysis Report' with specific reference to the 'Conclusion'. C-1 India Private Limited also submitted a report to M/s BCCL vide e-mail dated 30.12.2015. Based on the aforesaid statements, learned counsel Mr. Mehta submitted that BCCL had no role whatsoever to play in the event of interruption or disruption in the Reverse Auction Process caused by any technical default. The service provider had full authority and power under the NIT to restart or resume the Reverse Auction Process without permission from anybody including the BCCL and also to extend the time for the period it was interrupted. The e-mail of C-1 India Private Limited with regard to the interruption, was sent to BCCL at 15.02 hrs on 05.05.2015 and was in the nature of mere communication for their records as Reverse Auction Process had already resumed at 2.30 pm by then. Evidently, there was no requirement of consulting or seeking permission from anybody including BCCL. No officer of the BCCL had ever granted any permission to C-1 India Private Limited or anyone for resumption of e- auction at any given point of time.
12. Learned counsel for the BCCL submits that in the entire sequence of events, petitioner never raised any protest or objection, which amounted to waiver on the part of the petitioner. Moreover, participation of the petitioner in the Reverse Auction Process after resumption and even after return of EMD, also proves its acquiescence in the entire exercise.
13. Learned counsel for the Respondent Nos. 6 and 7 C-1 India Private Limited has referred to its counter affidavit filed in the writ petition which is at Annexure-49 to the Memo of Appeal and submits that it contains the stand on their behalf. The credentials of C-1 India Private Limited have been detailed therein. C-1 India Private Limited has prestigious clients such as Government of Andhra Pradesh, DGS & D, Ministry of Commerce, Govt. of India, BHEL, Government of National Capital Territory of Delhi, etc. It has also earned several awards in recognition to its leadership and performance in the field.
11Learned counsel for the C-1 India Private Limited has further submitted that bidders had faced problem in connecting to data center i.e. virtual server. C-1 India Private Limited was well connected with the server through leased line as also certified by CERT-In. Therefore, system did not pause automatically as there was no problem at their end. CERT-In report reveals that there was poor bandwidth for the bidders in connecting with the service provider during crucial period from 12.50 hrs. to 13.05 hrs. The bandwidth available to the bidders were very slow and all bidders had faced problem in connecting to the server running web application due to dual fiber cable cut, as reported by M/s TCL and also evident from the graph provided by them. In respect of three of the bidders including Respondent No. 8., problem was severe, while the other three including the petitioner had faced some problem intermittently. However, C-1 India Private Limited did not pause their Reverse Auction Application as it was awaiting confirmation from the service provider M/s TCL. In the meantime, the Reverse Auction Process got automatically closed after expiry of schedule 30 minutes from the last bid at 12:33:47 hrs. The Data Center is a facility equipped with controlled power, high bandwidth, cooling system, physical security and access control. A larger number of servers are hosted in a Data Center, powered by high speed networking infrastructure, storage system along with a storage network. At about 12.59 pm on 05.05.2015, C-1 India Private Limited communicated to TCL about the failed link. TCL informed C-1 India that link has been affected due to private civil work in Sector 6 POP, Noida. After confirmation of the rectification of technical fault from Data Center of TCL, C-1 India Private Limited decided to resume e-auction and communicated to all the bidders to provide for extension of time of 01 hours 27 minutes past 6.00 PM i.e. the scheduled closing time in terms of Clause- 9(xiii) of the NIT. Petitioner actively participated in the Reverse Auction Process after resumption and submitted 12 bids, out of which, 08 bids were submitted in the extended period without any protest. Its last bid was submitted at 19:26:24:533 hrs. The petitioner having participated and lost, has approached the Writ Court after long delay. Therefore, it is not entitled for relief as there is no illegality in the process.
14. Learned Senior Counsel for the appellant in his reply, sought to address the specific contentions urged on behalf of the Respondent No. 8, BCCL and C-1 India Private Limited. He submits that allegations of concealment of fact in the writ petition relating to its participation after resumption, is wholly incorrect. Statements made at paragraph-38 of the writ petition and paragraph-33 of the Memo of Appeal has been referred to in support. He has further countered the allegations of delay upon the petitioner in laying challenge to the entire process. He submits that after conclusion of the Reverse Auction Process on 05.05.2015, Letters of Acceptance (LOA) was issued 12 on 30.05.2015. In terms of Clause 4.2 of the General Terms and Conditions of the Contract, successful bidder was required to submit Performance Security within 28 days in the nature of a Bank Guarantee which the Respondent No. 8 failed to do. It did not even make an application for extension in terms of clause 4.3 thereof. However, BCCL without any request on the part of the Respondent No. 8, again requested it on 30.07.2015 to submit its Performance Guarantee. The writ petitioner had also been in touch with the BCCL authority and after expiry of 28 days period from the date of issuance of LOA on 30.05.2015, it was under the impression that the work could not be allotted to the Respondent No. 8 on having failed to submit Performance Guarantee. After issuance of request letter on 30.07.2015, petitioner realized that BCCL authorities were becoming indulgent with the Respondent No. 8 in order to allot work to it. It was then that the cause of action arose for the writ petitioner to approach this Court. Writ petition was accordingly filed on 10.08.2015 and even by 18.08.2015, Performance Security was not submitted by the Respondent No. 8 when the interim order was passed by the Learned Single Judge, restraining the Respondent BCCL from executing the Agreement with the Respondent No. 8. Therefore, there was no delay on the part of the writ petitioner in approaching this Court. Reference is also made to the interim order dated 09.09.2015, wherein, on the one hand, learned Senior Counsel representing the Respondent BCCL, informed the Court that the decision to extend the time for furnishing Bank Guarantee, had not yet been taken, while on the other hand, on the very day, BCCL had taken such a decision. It had in fact, concealed this fact from their Senior Counsel and the Writ Court as well.
15. Learned counsel submits that the petitioner had submitted its last bid during the extended period at 19:26:24:533 hrs and within 21 second thereof, Respondent No. 8 had submitted its last bid at 19:26:45 hrs. The Reverse Auction Process was closed at 19:27 hrs within 15 seconds thereafter. In this context, extension of 01 hour and only 27 minutes beyond the scheduled closure time at 6.00 pm, assume immense significance. He submits that it is the consistent case of the Respondent BCCL, Respondent No. 8 and C-1 India Private Limited, based upon the report of CERT-In as well, that the Reverse Auction Process was affected between 12.55 pm to 1.05 pm. Therefore, even assuming such interruption due to technical reasons, extension of 01 hour and 35 minutes should have been granted instead of 01 hour and 27 minutes. In order to bring home this point, he has also made reference to the letter dated 07.10.2015 (Annexure-39) written by C-1 India Private Limited to BCCL. In the said letter, C-1 India Private Limited has, despite making reference to the communication of TCL relating to disruption between 12:55 hrs. to 13:05 hrs., concluded that 13 disruption was between 13.03 PM to 14.30 PM and justified the extension of 01 hour 27 minutes after the scheduled close of the process at 18:00 hrs on 15.05.2015.
16. Learned counsel for the appellant has also referred to the order dated 04.11.2015 passed by the Learned Single Judge, wherein the stand of the BCCL in its counter affidavit have been mentioned that the Reverse Bid had paused at 13:03 hrs. However, in complete defiance of the direction, BCCL instead of submitting all the documents before the Court, approached CERT-In for investigation and report on the entire bidding process during the period 12.55 pm to 1.05 pm despite the fact that CERT-In was not the agency conceived under the Integrity Pact under the NIT. He submits that as per Clause 22 of the NIT, the helpdesk of C-1 India Private Limited at BCCL clearly mentioned the name of one Ujjwal Mitra, but surprisingly, the e-mail sent at 12.59 pm on the part of C-1 India Private Limited was by one Kundan Jha. He has further pointed out to the Analysis Report submitted by C-1 India Private Limited containing the logs of the bidders which showed login by Respondent No. 8 at 2.29 pm on 05.05.2015 even before the auction process got resumed at 2.30 pm. He submits that all these instances clearly indicate that there was something seriously amiss in the entire Reverse Auction Process. On the allegations relating to acquiescence, he submitted that the return of EMD which contains the Bank Guarantee was of not much consequence as it was valid only up to September 2015. Learned Senior Counsel has submitted that the third supplementary counter affidavit on behalf of BCCL is contradictory to the first and second affidavit filed before the Writ Court. Statements recorded in the order dated 04.11.2015 on the basis of the affidavit of BCCL, have been contradicted by BCCL itself in its third affidavit where it has completely changed its line in tune with that of the Respondent No. 8 and C-1 India Private Limited. If the resumption was undertaken at 2.30 pm, the Respondent service provider or the BCCL never cancelled the auction declaring the petitioner as last bidder before resuming the process. He has referred to the undertaking required to be submitted in the Process Compliance Form; Form-2 under Annexure-M, as per which, every bidder has to respect the display on the screen about the conclusion of the process. He submits that none of IEMs have doubted the screenshots showing the petitioner as L-1. Learned counsel has further submitted that rest of the bidders other than the Respondent No. 8, have categorically denied having faced any interruption in the bid process before the Independent External Monitors. Learned counsel while summarizing his arguments, submitted that the entire Reverse Auction Bid Process clearly shows that it deviated from the terms and conditions of the NIT. The decision taken by the service provider on the part of the BCCL was an abuse of power conferred upon it. The entire exercise smacks of arbitrariness, unreasonableness and 14 lack of transparency. In support of his submission, reliance has been placed on the judgment rendered by the Apex Court in the case of Tata Cellular Vs. Union of India[(1994) 6 SCC 651, para-77 to 81 and 90 to 94. He submits that in such matters, it is well within the power of the Court to direct investigation into the action of the Respondent authorities and C-1 India Private Limited. Appellant had proposed to reduce its offer by Rs. 455 crores before this Court during pendency of the appeal which has also been taken note of in the interim order dated 18.09.2017. However, BCCL not only refused to accept the offer, but also proceeded to issue work order in favour of the Respondent No. 8 on 23.11.2017 during pendency of the appeal. Appellant has challenged the same in I.A. No. 7597/2017 and also sought restraint through I.A. No. 9286/2017 upon the Respondent BCCL from getting the work executed through the Respondent No. 8. However, the Respondent BCCL has proceeded to execute the agreement with the Respondent No. 8 in the month of March 2018.
Discussion:
17. Under NIT No. BCCL/GM (CMC)/e-Tender/F-HEMM-0S/2015/312 dated 09.03.2015, online bids were invited from qualified and eligible bidder for the following scope of work:
"Hiring of HEMM (Heavy Earth Moving Machine) for removal of OB (Over Burden), extraction and transportation of coal with fire fighting from XIV, XIII, XI/XII, XI, IX/X, VIIIA, V/VI/VII/VIII, IV(T), IV(B), III, II, I(T) and I(B) at Patch-DE (Mega Project) of Dhansar - Ena Colliery of Kusunda Area along with crushing of coal by portable crusher (hereinafter to be referred as 'Project') with an estimated value of Rs. 1694,84,38,224/- (Annexure-2 to the Memo of Appeal)."
18. Interested bidders were required to submit the Earnest Money / Bid Security of Rs. 1,00,00,000/-. Digitally signed and encrypted tenders are invited under Two Part System followed by reverse auction on-line on the e-tendering portal of Bharat Coking Coal Limited https://bccl.eproc.in from the reputed and experienced contractors. Since the bidders including the writ petitioner / appellant and the Respondent No. 8 qualified in the technical bid, the controversy raised in the writ petition relates to the 2nd part i.e. Reverse Auction Bidding Process. Therefore, it is considered proper to refer to the relevant provisions of the NIT and the Rules of Business thereunder which deals with this issue. Relevant terms and conditions of the NIT, as also relied by the learned counsel for the parties, are being quoted hereunder:
"8. General Instructions For Submission of Bid:
i. All the bids are to be submitted online in the e-tendering portal of Bharat Coking Coal Limited https://bccl.eproc.in. No bid shall be accepted offline. ii. The bidder shall refer the download section of home page of e-tendering portal https://bccl.eproc.in for online registration and online bidding and may further seek assistance from the help desk team (details are available in the portal). iii. The bidder should register in the e-tendering portal of Bharat Coking Coal Limited https://bccl.eproc.in with Digital Signature Certificate (DSC) of minimum class-II type (with signing & encryption certificate) issued from any 15 agency authorized by Controller of Certifying Authority (CCA), Govt. of India which can be traced up to the chain of trust to the root certificate of CCA. The Joint Venture / consortium has to enroll as a separate bidder in its own name and style.
iv. The bidders must accept unconditionally the User Portal Agreement and Integrity Pact online.
v. The information will be provided by the last bidder by filling up relevant data in the subsequent steps during online bid submission.
vi. It is the bidder's responsibility to comply with the system requirement i.e. hardware, software and internet connectivity at bidder's premises to access the e- tender website. Under any circumstances, BCCL shall not be liable to the bidder for any direct/indirect loss or damages incurred by them arising out of incorrect use of the e-tender system or internet connectivity failures. vii. Price Bid is to be submitted by the bidder online.
9. BID OPENING:
i. After receipt of "EMD" as stated in Clause 3 & 7A of NIT and other documents as stated in Clause 7A of NIT and on acceptance of these documents in accordance with the requirement of NIT, the Part-I bid will be decrypted and opened online on the scheduled date and after the pre-scheduled time by the Bid Openers. Thereafter, the Part-I bid shall be evaluated by the system based on the information furnished by the bidders on-line in accordance with clauses 7&7 of NIT.
ii. The Price-bid of the bidders qualified in Part-1 (Techno-Commercial) bid will only be decrypted and opened online, on the scheduled date and after the pre- scheduled time by the Bid Openers. The bidder will have to quote rate against all the tendered items online, and bid value of each bidder will be determined automatically by the system.
iii. The bidder will get the updated status / information / instructions online only. It
will be the bidder's responsibility to check the updated
status/information/instructions. No separate communication will be required in this regard.
iv. After opening of price bid the system will evaluate each bid by multiplying the quantity with the unit rate quoted for the respective items. The overall quoted lowest price along with the details of rate and amount of each item will be displayed by the system without disclosing the name of the bidder during Reverse Auction. The date of Reverse Auction will be communicated to the bidders. v. Reverse auction will be carried out as per the terms and conditions of Annexure-
M. The bidder must comply with the requirements of Annexure-M. vi. Eligible Bidders will be given a Business Rule Document (BRD) which will be comprised of following points.
a) Business Rules for Reverse Auction
b) Terms & Conditions of Reverse Auction
(c) Items Description (Form-1)
d) Process Compliance Statement (Form-1)
e) Price bid Breakup (Form-III)
f) Contact Information vii. Bidders have to email /Fax a scanned copy of the Process Compliance Form (Form II of Annexure-M) in the prescribed format. Without this form the Bidder will not be eligible to participate in the event.
viii. The lowest bidder has to email a scanned copy of the duly signed filed-in prescribed format for Price Bid Breakup (Form-III of Annexure-M) to service provider within 2 Hours of the conclusion of the Auction. Any variation between the on-line bid value and signed document will be considered as sabotaging the auction process and will invite disqualification of vender to conduct business with BHARAT COKING COAL LIMITED as per prevailing procedure.
ix. By default 11.00 hrs. of the scheduled date of Reverse Auction will be the start time of Reverse Auction. The Reverse Auction will remain open for 4 hours i.e. from 11.00 hrs to 15.00 hrs. on the scheduled date. However, the bidding time will go on extending automatically after 15.00 hrs. in the slab of 30 minutes each from latest bid time, if the latest response in the bidding is submitted within last 30 minutes of scheduled extended closing time of bidding. The Reverse Auction will be paused on 18.00 hours for the first day. The Reverse Auction will again be 16 continued on the 2nd day from 11.00 hrs. as per the norms followed after 15.00 hrs. on the first day of the Reverse Auction. The process of Reverse Auction will finally stop sharp at 18.00 hrs on the 2nd day.
The Reverse Auction will also stop in case the particular bid remains unresponded for continuous 30 minutes time between 15.00 hrs. to 18.00 hrs. in the 1st day and 11.00 hrs. to 18.00 hrs in the 2nd day.
x. The rate and price shown after opening of tender (vide point no. iv above) will be the base rate / price for start of the Reverse Auction. System will not accept price higher than the base price in Reverse Auction. Only the tenderers declared qualified by the system for this tender shall be eligible for participation in the Reverse Auction Process.
xi. The participating bidders will be given option to reduce their rates in the Reverse Auction below the base price. However, any reduction less than the followings in overall quoted price of the work will not be accepted by the system." xii.
SLAB FOR REVERSE AUCTION
Estimated Value of Tender Minimum reduction in overall Quoted
Price in Reverse Auction
Rs. 1694,84,38,224/- Rs. 2,00,000,00/-
An amount equal to the exceeding the above shall only be accepted by the system. Also the system will not accept the rate / amount higher than the base price and the system will not accept same overall amounts for two or more bidders in the Reverse Auction.
xii. The Service Provider of e-Tendering will take all necessary steps to ensure smooth uninterrupted functioning of system at their end. Bidders are advised to ensure stable connectivity at their end. Service Provider or BCCL will not be responsible for any disruption of connectivity or any failure at bidders end. xiii. Manual extension of bidding time will not be allowed at the request of bidder.
In case there is any technological failure at service provider's end the bidding will be paused and it will get extended for the period the system remained down.
xiv. After completion of reverse bidding on line, the L-1 bidder emerged out of reverse bidding process will have to produce the documents as per clause 7(B)."
20. Integrity Pact:
The bidders must accept the integrity Pact online. The format of integrity pact is at Annexure-H of tender document, as per clause 20 of the Instructions to Bidders.
As per clause 4 of General Terms and Conditions (Conditions of Contract), Performance Security shall consist of two parts, (a) Performance Security to be submitted at the award of work and (b) Retention money to be recovered from running bills. Performance Security should be submitted within 28 days of receipt of Letters of Acceptance (LOA) by the successful bidders in the form prescribed thereunder.
Clause 4.3 provides inter-alia as follows:
"Failure of successful bidder to comply with the requirement as contained under Clause 4.3 relating to security deposit, would constitute sufficient ground for cancellation of the award of work and forfeiture of the security. However, if the contractor fails to submit the Performance Security within 28 days of receipt of LOA due to some reasons or otherwise and if the management takes it to be reasonable this period of within 28 days of receipt of LOA, may be waived and the agency can be allowed to submit the Performance Security up to an extended period as deemed fit with the approval of CMD, BCCL."
Clause-14 of Instructions to Bidders provides for revocation of the tender process and is quoted hereunder:
"Revocation of Tender Process: The online evaluation of tender must be performed by the Evaluator with utmost care and diligence. The Evaluator of tender must ensure that the decision of Tender Committee is correctly uploaded on the e-Tendering portal. However, there may be situation when the decision of Tender Committee may have to be changed subsequently on account of a Court's verdict. Also, there may be circumstances when 17 online evaluation of tender is not done correctly due to mistake by the Evaluator or due to technical error in the system, which may lead to cancellation of tender. In order to avoid the cancellation of tender in such cases, the tender process needs be reverted back to appropriate stage (Technical-bid Opening or Price-bid Opening stage) to comply with the Court's verdict or to rectify the error committed by the Evaluator. This provision in the e- Tendering system has been introduced with an objective to abide by the Court's verdict or to ensure that the tender process should not suffer due to mistake committed by an individual or due to any technical error in the system.
Revocation of Tender process back to technical-bid opening stage or Price-bid opening stage from an advanced stage shall be done under the following circumstances:
1. To comply with the directives of Hon'ble Court of Law.
2. If the Evaluator makes a mistake in online evaluation of tender, which is not in line with the Tender Committee decision.
3. If there is an error in the online evaluation of tender due to technical error in the system.
However revocation of tender process will be under the discretion of the BCCL Management."
Business Rules for Reverse Auction and Terms and Conditions of Reverse Auction are extracted hereunder:
BUSINESS RULES FOR REVERSE AUCTION "Against this NIT for the subject item with detailed scope of work as per our specification, M/s BHARAT COKING COAL LIMITED will conduct "ONLINE REVERSE AUCTION PROCEDURE' i.e. ONLINE BIDDING on INTERNET.
1. M/s BHARAT COKING COAL LIMITED have engaged the service of a service provider who will conduct the Reverse Auction and provide all necessary training without any cost and assistance before commencement of on line bidding on internet.
2. For the proposed reverse auction, technically acceptable bidders only shall be eligible to participate.
3. Business rules like event date & time, etc. will be communicated.
4. Bidders have to email /Fax a scanned copy of the Process Compliance Form (Form II) in the prescribed format. Without this form, the Bidder will not be eligible to participate in the event.
5. The lowest bidder has to email a scanned copy of the duly signed filled-in prescribed format for Price Bid Breakup (Form III) to service provider within 2 Hours of the conclusion of the Auction. Any variation between the on-line bid value and signed document will be considered as sabotaging the auction process and will invite disqualification of vender to conduct business with BHARAT COKING COAL LIMITED as per prevailing procedure.
6. Only Single Log of same User id and password is permitted at a time.
7. Auto Extension of Bidding Time: Initial time of Reverse auction will be 11:00 to 15:00 hours. If a bidder places a bid in the last 30 minutes of closing of the Reverse Auction and if that bid gets accepted, then the auction's duration shall get extended automatically for another 30 minutes, for the entire auction (i.e. for all the items in the auction), from the time that bid comes in. please note that the auto-extension will take place only if a bid comes in those last 30 minutes and if that bid gets accepted. If the bid does not get accepted, the auto-extension will not take place even if that bid might have come in the last 30 minutes. In case, there is no bid in the last 30 minutes of closing of Reverse Auction, the auction will get closed automatically without any extension. However, this extension process will continue up to 18.00 Hours on the 1st day of bidding day. The reverse bidding will again be continued on the 2nd day from 11:00 hrs as per the norms followed after 15:00 hrs. On the first day of the reverse bidding, the process of reverse bidding will finally stop sharp at 18:00 hrs. On the 2nd day, No auto Extension will be given after 18:00 hrs. of second day of bidding.
8. Failure of power and internet malfunctioning at the premises of Bidders during the Reverse auction cannot be the cause for not participating in the reverse auction. On account of this, the time for the auction cannot be extended and neither M/s BHARAT COKING COAL LIMITED nor M/s C1 India Pvt. Ltd. is responsible for such eventualities.
Terms & Conditions of Reverse Auction.
"BHARAT COKING COAL LIMITED shall finalize the award of the item against this Tender through reverse auction mode. M/s BHARAT COKING COAL LIMITED has made arrangement with M/s C1 India Pvt. Ltd who shall be authorized service provider of M/s 18 BHARAT COKING COAL LIMITED for the same. Please go through the guidelines given below.
1. Online reverse auction shall be conducted by M/s C1 India Pvt. Ltd. on pre-specified data, while the Bidders shall be quoting from their own offices / place of their choice.
2. Starting Bid/Bid Decrement: The opening price of the RA (Reverse Auction) and the bid decrement value shall be available to the bidders before start of the auction and same shall be displayed on the auction website.
3. At the end of the reverse auction, bidder has to provide a detail break up for his lowest offer as per Form-III.
4. Opening Price and Bid Decrement: opening price (OP) (base price) and bid decrement shall be visible to the all Bidders before start of the reverse Auction. You will be required to start bidding after announcement of Opening Price and decrement amount. Also, please note that the Start Price of reverse auction is open to all the participating bidders. Any bidder can start bidding in the online reverse auction, from lesser than the auction's start price minimum by one decrement.
5. Your bid will be taken as an offer. Bids once made during reverse auction, cannot be cancelled / withdrawn and you shall be bound to honour your bid to execute the work as mentioned above at your final bid price. Should you back out and not honour as per the rates quoted, M/s BHARAT COKING COAL LIMITED will take appropriate action including forfeit of EMD and Blacklisting / debarring of all future tenders / auctions of BCCL for a period of at least one year. That is why please be careful during the online bidding.
6. All bids made from your Login ID will be deemed to have been made by your company and in case of any misuse of your User Id and Password, M/s C1 India Pvt. Ltd. can't be held responsible for that.
7. Bidders will be able to see the L1 Bid only after submitting the one valid bid. During the bidding bidders will be able to view the following details on the screen. a. Item description b. Auction Start Time & End Time.
c. Opening Price & Bid Decrement value d. Market rate Price.
e. Bid Placed by you f. Whether your bid is L1 or not g. In case of your being L1 Bid "an Icon of hammer would come in front of Bid Value.
8. At the end of the Reverse Auction, M/s BHARAT COKING COAL LIMITED will decide upon the winner, who will be L1 Bidders as emerge from the process of online Reverse Auction. BHARAT COKING COAL LIMITED's decision on award of Contract shall be final and binding on all the Bidders.
9. M/s BHARAT COKING COAL LIMITED shall be at liberty to cancel the reverse auction process / tender at any time, before ordering, without assigning any reason.
10. Neither Service Provider (C1 India Pvt. Ltd.) nor M/s BHARAT COKING COAL LIMITED shall have any liability to bidders for any interruption or delay in access to the site irrespective of the cause."
19. The Reverse Auction Bidding Process commenced on 04.05.2015 and concluded at 6.00 pm on the 1st day without any glitch or complain by any of the bidders. It again resumed on the 2nd day at the scheduled time. The writ petitioner submitted a bid at 12:33:47 hrs. The Reverse Auction Bidding Process closed at 13:03:47 automatically after 30 minutes of the last bid of the writ petitioner as no other bid was submitted within 30 minutes, as per Clause 9(ix) of the NIT referred to hereinabove. The writ petitioner took a screenshot at 13:03:46 hrs. which showed 'time remaining' as 00:00:01 hrs. The writ petitioner took another screen shot at 13:03:58 hrs. which showed 'Auction closed !!!!!. It further discloses the Bid History Details and Auction Price Details showing bidder's name i.e. the writ petitioner, currency (Rs.), Bid date 05.05.2015 at 12:33:47 PM and the Bid Amount Rs.
1923454553620.00000000, rank-1 (Annexure-4 and 4/1 to the Memo of Appeal). These screenshots are not disputed by the Independent External Monitors (IEM) Mr. L.C. Chaturvedi and Mr. L.C. Singhi, IAS (Retd.). One of IEMs Mr. L.C. Singhi at para-31 of his report observed that these screenshots are certainly not fabricated, but they do not indicate the true picture of the auction process. The Independent Analysis Report of CERT-In contained in letter dated 28.12.2015 (Annexure-46 to the Memo of Appeal) also has, in its Critical Observation and Conclusions, observed that M/s C1 India Private Limited did not pause running of the Reverse Auction Bidding Application which resulted in the start of the Reverse Auction closure process automatically at 13:03:47 hrs. i.e. automatically scheduled after 30 minutes of the last bid at 12:33:47 hrs. by M/s AMR DEV Prabha Consortium i.e. the writ petitioner.
20. It appears that in the meantime, one Mr. Kundan Jha (mail to: Kundan .jha @C1 India.com sent an email on 05.05.2015 at 12.59 pm to corp.
[email protected] stating "My Link is Down". Respondent No. 8 sent an email on 05.05.2015 to C1 India Pvt. Ltd with a copy to BCCL at 13:22 hrs., stating "the Reverse Auction Process of the bccl tender no. 312 suddenly stopped at about 1.00 pm and when the last time left was 13 minutes. After that, the time did not reduced and after that, we again login, the site was not working for some ten minutes and after that, when it was opened, the auction was showing as closed. As such, some technical fault has been caused from service provider and they should restart the auction immediately." Thereafter M/s C1 India Pvt. Ltd received an email from Tata Communication Ltd. on 05.05.2015 at 2.11 PM, stating that "their services were affected due to dual fiber cut in their intra city network from 12.55 PM to 13.05 PM. One path was affected due to cable cut 10 KM from Concord during private civil work and another path was affected due to faulty patch cord between Fiber Management System and equipment in Sector 62 POP, Noida. All services to be up after replacing the faulty patch cord by the network team at Sector 62 POP, Noida. We regret the inconvenience" (Annexure-35 to the Memo of Appeal). The latency graph from 12.00 to 15.00 hrs on 05.05.2015 created on the same day at 18.30 hrs. was also enclosed to the report at Annexure-35 of TCL. Learned counsel for the Respondent No. 8 and BCCL has made reference to the interruption at 13.00 hrs. as shown from the graph. Learned Senior Counsel for the appellant has raised doubt about the same as it was created at 18:30:08 hrs on 5th May 2015 much after the interruption.
21. At this stage, I do not wish to make any comments on this contention as the report of CERT-In to be discussed at a later stage which deals with this subject, has not been disputed by the learned counsel for all the parties.
2022. Pursuant to the email at 2.11 pm on 05.05.2015, C1 India Pvt. Ltd claims to have intimated all the bidders of the time of resumption of the Reverse Auction Bidding Process at 2.30 pm through email. It also communicated the bidders that the remaining time between the closure time of auction and resuming time of auction will be provided if the auction will reach in the extended time. Emails to one [email protected] at 2.30 pm, to R.K. Transport (Respondent No. 8) at 2.17 pm, hytenders @madhucon.com at 2.32 pm, [email protected] at 2.17 pm, [email protected] at 2.34 pm, [email protected] at 2.35 pm, [email protected] at 2.36 pm and again to [email protected] at 14.38:38 hours have been enclosed as Annexure-36 series to the Memo of Appeal. They are Annexure-Q to the 3rd supplementary counter affidavit of the Respondents 3 to 5 filed on 11.01.2016 in the writ petition in compliance of the orders dated 04.11.2015 and 01.12.2015 passed by the Learned Single Judge. By these orders, the Respondent BCCL was directed to produce all communications and disclose the methods adopted for e-auction to prima facie satisfy the Court on the issue of fair and transparent procedure adopted for e-auction. Learned Single Judge had directed that the affidavit should also disclose whether after interruption at 13.03 PM, any officer of the BCCL had granted permission for resumption of e-auction and whether, M/s BCCL alone can start the system after it got stopped.
23. Taking the sequence of events on 05th May 2015 further, it appears that the auction process was resumed at 2.30 pm. However, it is pertinent to mention here that the Analysis Report prepared by C1 India Pvt. Ltd. for BCCL shows that one of the bidder Dhansar Engineering Company Pvt. Ltd. had logged on 05.05.2015 at 2.29 pm with the bidder's name decopl. Another bidder R.K. Transport Company with the bidder name rktransport@2015 (Respondent No. 8) had also logged at 2.29 pm on the same date. These web access logs are contained in the report of C1 India Pvt. Ltd., which is enclosed as Annexure-47 to the Memo of Appeal being Annexure-AB to the 3rd Supplementary counter affidavit of Respondents 3 to 5 BCCL filed in the writ petition. The Web Access Logs further shows that Bidder Ambey Mining Private Limited with the bidder name ampl2015 was logged till 1.03 pm on 05.05.2015. The writ petitioner AMR DEV Prabha Consortium with bidder name amrdevprabha was logged till 1.03 pm, M/s Dhansar Engineering Company Pvt. Ltd with the bidder name decopl was logged till 12.49 pm, Madhucon Projects Limited with the bidder name madhuconhyd was logged till 12.49 pm and Monte Carlo Limited with the bidder name mclms_2014 was logged till 1.04 pm.
24. BCCL was informed at 15:02 hrs by C1 India Pvt. Ltd as regards interruption in the Reverse Auction Bidding Process and subsequent resumption of auction process 21 at 2.30 PM (Annexure-37 to the Memo of Appeal and Annexure-R to the same 3rd supplementary counter affidavit of the Respondent BCCL filed in the writ petition. Reverse Auction Bidding Process continued after the scheduled close of time at 18.00 hrs on the 2nd day i.e. 05.05.2015. The last bid submitted by the writ petitioner / appellant was at 19:26:24:533 hrs. The last bid submitted by the Respondent No. 8 was at 19:26:45 hrs. The bid closed at 19:27 hrs as 1:27 hrs was the extension time granted by the service provider C1 India Private Limited. 01 hour 27 minutes was calculated from the time the auction stood closed at 1.03 pm and resumed at 2.30 PM. It is pertinent to point out that C1 India Pvt. Ltd and M/s BCCL through its 3 rd Supplementary Counter Affidavit filed in the writ petition, made a categorical statement that Reverse Auction Bidding Process was affected from 12.55 hrs to 13.05 hrs due to dual fiber cut which was later on rectified. Consequently, time for Reverse Auction Process came to be extended for 1:27 hrs beyond the scheduled time at 18.00 hrs, as per Clause 9(ix) of the NIT, as per the statement made at para-10 of the 3rd Supplementary counter affidavit. Para-14 of the same affidavit quotes the email at 2.11 pm (14:11) hrs sent by M/s TCL to C1 India Pvt. Ltd on 05.05.2015 confirming that the services towards conduct of Reverse Auction Process was affected between 12.55 hrs. to 13.05 hrs, indicating the reasons therein, as also referred to in the foregoing paragraphs. As noticed above, there was a gap of 21 seconds between the last bid submitted by the writ petitioner and that of the Respondent No. 8 at 19:26:45 hrs, 14 seconds thereafter, the bids came to be closed at 19:27 hrs. It is also true that the writ petitioner submitted 12 bids after resumption at 2.30 pm and 08 bids during the extended time. The last bid of the Respondent No. 8 was of Rs. 170 crores less than that of the writ petitioner.
25. The writ petitioner admittedly did not protest to the resumption of the Reverse Auction Process at 2.30 pm. It did not file any breakup of L-1 bid shown on the screen at 13:03:58 hrs in terms of Clause 9(viii). It also did not lodge any objection on return of EMD by letter dated 15.06.2015. After close of the auction, Respondent No. 8 was declared L-1. It was communicated by C1 India Pvt. Ltd. Letters of Acceptance were issued in his favour on 30.05.2015 by BCCL requiring him to submit Performance Guarantee in terms of Clause 4.2 within 28 days of the General Terms and Conditions. Respondent No. 8 did not furnish Performance Guarantee within the period of 28 days. BCCL through letter dated 30.07.2015 requested Respondent No. 8 to submit the Performance Guarantee. Thereafter, writ petition was filed on 10.08.2015 inter alia, seeking a direction upon the Respondent BCCL, i. to award the work as the tender process had already concluded on 05.05.2015 at 13:03:58 hrs in favour of the petitioner as successful L-1 bidder, 22 ii. it also sought a direction upon the Respondent to show as to how Clause 9 of the NIT were relaxed in favour of the Respondent No. 8 after auction process had closed at 13:03:58 hrs, iii. it also sought quashing of Letters of Acceptance dated 30.05.2015 wherein, the work was sought to be awarded in favour of the Respondent No. 8.
iv. The writ petitioner also prayed for a direction upon the Respondent Union of India and Central Vigilance Commission to undertake an inquiry and take corrective steps.
27. When the matter was taken up on 18.08.2015, Learned Single Judge restrained BCCL from executing any Agreement with the Respondent No. 8. Notices were also issued upon the Respondent No. 8. On 09.09.2015 Learned Senior Counsel representing the BCCL informed the Court that the decision of extension of time for furnishing Bank Guarantee to the Respondent No. 8 was yet to be taken. Learned counsel for the Respondent No. 8 however stated that Bank Guarantee has, in fact, been furnished to the General Manager, BCCL on 27.08.2015. Interim order was continued. Court was also informed that the petitioner had lodged a complaint with IEMs. When the matter was taken up on 16.10.2015, a show-cause notice was issued upon the Chairman cum Managing Director, BCCL and General Manager, Contract Management and Sales, BCCL to answer as to why a proceeding under the Contempt of Court's Act be not initiated against them. The Learned Single Judge referred to the interim order dated 18.08.2015, restraining the Respondent BCCL from executing any Agreement with the Respondent No. 8 and the statements made by one Mr. S.K. Das, representative of M/s BCCL in the Court on the said date. Thereafter on 04.11.2015 a direction was issued by the Learned Writ Court upon the Respondent BCCL to produce all communications and disclose the methods adopted for e-auction to prima facie satisfy the Court on the issue of fair and transparent procedure adopted for e- auction. BCCL was also directed to disclose, whether after interruption at 13.03 pm, any officer of BCCL had granted permission for resumption of e-auction, and whether BCCL alone could start the same after it got stopped. The Learned Single Judge took note of the counter affidavit of the Respondent BCCL where it was averred that Reverse Auction Bidding Process was paused at 13:03 hrs on 05.05.2015 due to system failure of service provider. It also disclosed that email was sent at 15:02 PM, wheras e-auction had resumed at 2.30 pm. It further stated that information was given to BCCL that auction got interrupted at 1.03 pm and got closed and the service provider was in consultation with the CMD Office. Learned Single Judge found the counter affidavit filed on behalf of Respondent No. 8 at variance with the stand taken by the Respondent BCCL in its counter affidavit. Learned Single Judge also made reference to the report of Independent External Monitors Mr. Naresh Chaturvedi, IAS (Retd) and Mr. L.C. Singhi, IAS (Retd.) while passing the directions to BCCL on 23 04.11.2015. Respondent C1 India Pvt. Ltd. who had appeared by that time, was also granted time to file response.
28. By order dated 01.12.2015, four weeks further time was allowed for filing necessary affidavit in terms of order dated 04.11.2015 on the I.A. No. 6528/2015 by the BCCL. BCCL thereafter filed its 3rd supplementary counter affidavit on 11.01.2016 in the writ petition. Learned counsel representing the Respondents 3 to 5 BCCL in this appeal, during the course of his submission, has relied upon the contents of the 3rd supplementary counter affidavit as containing the stand of the Respondent BCCL, taken note of in the foregoing paragraphs.
29. In terms of Integrity Pact, the matter was referred to two Independent External Monitors on the complaint of the writ petitioner. Mr. Naresh Chaturvedi, I.A.S (Retd.) one of the IEMs, found merit in the complaint lodged by AMR DEV Prabha Consortium and observed that resumption of Reverse Auction Process was not a fair decision vide his report dated 23.09.2015. The other IEM Mr. L.C. Singhi, IAS (Retd) came to the conclusion that C1 India Pvt. Ltd could prove the interruption caused in the system during the auction process. As such, the resumption of Reverse Auction on 05.05.2015 appeared to be in order and in accordance with the procedure, as specified in the NIT. The complainant could not prove that the auction process was smoothly conducted and the auction process ought to have been declared as closed at 13:03:47 hrs and that the last bid submitted at 12:33:47 ought to have been treated as L-1. As a matter of fact, complainant's own conduct disapproved each and every allegation and every claim. The complaint petition was found to be devoid of merit, as per the report dated 13.10.2015.
30. It is apparent from the records that the Learned Single Judge, by order dated 04.11.2015, directed BCCL to produce all communications and disclose the methods adopted for e-auction. However, BCCL instead of submitting these documents and communications before the Court, referred the matter on 17.11.2015 to M/s CERT-In, a body constituted by the Department of Information and Technology, Government of India to conduct forensic analysis of the cyber security incident. CERT-In submitted 'Incident Analysis Report' to BCCL through letter dated 28.12.2015. As per its report, C1 India Pvt. Ltd was requested to provide Block Diagram of Reverse Auction Application, Application Logs and IIS Web Server Access Logs to investigate the reported incident for the crucial period from 12:50 hrs. to 13:05 hrs. It states that Analysis of the Web Server, Access Logs for Reverse e-Auction Web Application was based on web server logs, as provided by C1 India Pvt. Ltd. Analysis of web server access logs of every bidder and C1 India Pvt. Ltd was conducted by Mr. 24 Omveer Singh, Scientist 'F', CERT-In. The Critical Observations and the Conclusions made therein are quoted hereunder:
"Critical Observations:
During the crucial period of the dual optical fiber cut, the bandwidth available to the bidders was extremely low, but it was never zero and this was the reason that the bidders were not able to submit their bids during this period. Same is also evident from the graphics provided by M/s Tata Communications Ltd.
M/s BCCL has reported to M/s C1 India Pvt. Ltd that the bidders have complained that they are not able to submit their bids. However, M/s C1 India Pvt. Ltd did not pause the running of the Reverse Auction Bidding application, which resulted in the start of the reverse auction closure process automatically at 13:03:47 Hrs. i.e. automatically scheduled after 30 minutes of the last bid at 12:33:47 hrs. by M/s Amar Dev Prabha Consortium.
Conclusion:
By the aforesaid analysis following is evident:
1. During the crucial period, i.e. from 12:50 Hrs to13:05 Hrs the bandwidth available to the bidders was very low and web access logs shows that all the bidders had faced problem in connecting to the server running the web application, which could be due to dual fiber cable cut as reported by M/s Tata Communications Ltd and also evident from the various graph provided by them. However, it was noticed after the analysis of the web access logs that the webserver connectivity problem was severe for (i) M/s Madhucon Projects Ltd, (ii) M/s R.K. Transport Co. and (iii) M/s Dhansar Eng. Co. Pvt. Ltd while for the other three, namely (i) M/s Montecarlo Ltd., (ii) M/s Amar Dev Prabha Consortium, and
(iii) M/s Ambey Mining Pvt. Ltd. faced the same problem intermittently.
2. The service provider M/s C1 India Pvt. Ltd was well connected to the server running the web application throughout the reverse auction process including the crucial period, i.e. from 12:50 Hrs. to 13:05 Hrs., since they were connected to the data centre running the server through lease line. So, they did not face any difficulty at all to connect to the server. However, even after receiving the complaint from BCCL about the problem faced by the bidders in submitting their bids, M/s C1 India Pvt. Ltd did not pause the Reverse Auction Application running on the server, which led to closure of the reverse auction bidding process during the crucial period.
3. By careful examination and analysis of the logs, as provided to CERT-In by M/s C1 India Pvt. Ltd., CERT-In could not find any external interference, manipulation or interruption to the Reverse e-Auction Bidding Application running on the virtual server."
31. Learned Single Judge on consideration of these materials on record and the submissions of the parties, dismissed the writ petition, inter-alia holding as follows:
i. That the entire tender process was held in fair and transparent manner and the Respondent BCCL had given a level playing field to all the participants. ii. Resumption of tender process was not contrary to the terms and conditions of the NIT as there was indeed a system failure which affected the Respondent No. 8 as well as some other bidders.
iii. After correction, all bidders including the petitioner fully participated in the extended bid process.
iv. The final bid offered by the Respondent No. 8 was much higher than what was offered by the petitioner.
v. Petitioner did not raise any grievance or objection at the time of resumption of auction process and duly participated in the same having submitted 12 bids including 08 bids which were submitted by him during the extended period.
32. The legality and correctness of the view of the Learned Single Judge is under question in appeal.
2533. Learned counsel for the appellant and the Respondent No. 8 both have relied upon the decisions of the Apex Court on the exercise of powers of judicial review. The principles governing judicial review of administrative decisions are now fairly well settled by a long line of decisions rendered by the Apex Court, since the decision in the case of Ramana Dayaram Shetty vs. The International Airport Authority of India and others [(1979) 3 SCC 489]. It is one of the earliest case in which Apex Court judicially reviewed the process of allotment of contracts by an instrumentality of the State and declared that such process was amenable to judicial review. One may profitably refer to the ratio rendered by the Apex Court in the case of Ramana Dayaram Shetty Vs. International Airport Authority of India [(1979) 3 SCC 489]. The opinion of the Hon'ble Supreme contained at Paragraphs-10 and 21 is quoted hereunder:
10. Now, there can be no doubt that what para (1) of the notice prescribed was a condition of eligibility which was required to be satisfied by every person submitting a tender. The condition of eligibility was that the person submitting a tender must be conducting or running a registered IInd Class hotel or restaurant and he must have at least 5 years' experience as such and if he did not satisfy this condition of eligibility, his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by Respondent 1 and since the Respondents 4 did not satisfy this standard or norm, it was not competent to Respondent 1 to entertain the tender of Respondents 4. It is a well-settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurter in Viteralli v.
Saton where the learned Judge said:
"An executive agency must be rigorously held to the standards by which it professes its action to be judged .... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed .... This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword."
21. This rule also flows directly from the doctrine of equality embodied in Article 14. It is now well-settled as a result of the decisions of this Court in E.P. Royappa v. State of Tamil Nadu and Maneka Gandhi v. Union of India that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory: it must not be guided by any extraneous or irrelevant considerations, because that would be denial of equality. The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Article 14 and it must characterise every State action, whether it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory. This principle was recognised and applied by a Bench of this Court presided over by Ray, C.J., in Erusian Equipment and 26 Chemicals Ltd. v. State of West Bengal where the learned Chief Justice pointed out that ..................... (emphasis supplied)"
In several subsequent decisions it was followed and applied to varied situations. Reliance may also be placed upon the judgment rendered by the Apex Court in the case of Tata Cellular versus Union of India [(1994) 6 SCC 651]. Opinion of the Hon'ble Supreme Court contained at paragraph-77, 80 and 81 is quoted hereunder:
"77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
80. At this stage, The Supreme Court Practice, 1993, Vol. 1, pp. 849-850, may be quoted:
"4. Wednesbury principle.-- A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn, per Lord Greene, M.R.)"
81. Two other facets of irrationality may be mentioned.
(1) It is open to the court to review the decision-maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v. Secretary of State for Environment, the Secretary of State referred to a number of factors which led him to the conclusion that a non-resident's bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. The Divisional Court analysed the factors which led the Secretary of State to that conclusion and, having done so, set it aside. Donaldson, L.J. said that he could not see on what basis the Secretary of State had reached his conclusion.
(2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On this basis in R. v. Barnet London Borough Council, ex p Johnson the condition imposed by a 27 local authority prohibiting participation by those affiliated with political parties at events to be held in the authority's parks was struck down."
In the case of Tata Cellular (supra), the Apex Court reviewed the law on the subject comprehensively and reiterated that judicial review would apply even to exercise of contractual powers by the Government and Government instrumentalities in order to prevent arbitrariness or favouritism. The principles governing judicial review were then formulated in the following words at para 94 of the Report:
(1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
In the case of Jagdish Mandal vs. State of Orissa and others [(2007) 14 SCC
517)], the Apex Court while dealing with the exercise of power of judicial review in matters relating to tenders and award of contracts, observed that judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether the choice or decision is made "lawfully" and not to check whether it is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The observations made by the Apex Court in the case of Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation 28 Ltd. & another [(2016) 16 SCC 818] at para-15 of the Report also apply to the case at hand and aptly quoted again:
"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."(Emphasis supplied)
34. The precedence on the point including those relied upon by the learned counsel for the appellant and the Respondent No. 8 have been comprehensively discussed by the Apex Court in the case of Siemens Aktiengeselischaft and Siemens Limited vs. Delhi Metro Rail Corporation Limited and others [(2014) 11 SCC 288, paragraph-18 to 23].
35. I would like to examine the issue in the light of the challenge made keeping in mind these well settled principles of law laid down by the Apex Court on the exercise of power of judicial review. The present matter relates to award of a work under an instrumentality of the State i.e. BCCL for an estimated value of Rs. 1694.84 crores through online process of reverse auction bidding. The bidders were required to accept unconditionally the User Portal Agreement online, as per Clause-G of the NIT. Bidders were also required to accept the Integrity Pact online, as per Clause-H of tender document. Bidders had to ensure that there should not be any discrepancy between online submission of information and uploading of scanned copy of the documents. Under Clause-8(vi) of the General Instructions for submission of Bid, it was the bidder's responsibility to comply with the system requirement i.e. hardware, software and internet connectivity at bidder's premises to access the e-tender website. Under no circumstances, BCCL would be liable to the bidders for any direct / indirect loss or damages incurred by them arising out of incorrect use of the e-tender system or internet connectivity failures. Price bids were to be submitted by the bidders online. After opening of the Price Bid viz. Clause 9(iv), the system would evaluate each bid by multiplying the quantity with the unit rate quoted for the respective items. The overall quoted lowest price along with the details of rate and amount of each item will be displayed by the system "without disclosing the name of the bidder during Reverse Auction". The lowest bidder had to email a scanned copy of the duly signed filled in prescribed form for Price Bid Breakup (Form-III of Annexure-M) to the service provider within two hours of the conclusion of the auction. The Reverse Auction would stop in case particular bid remains unresponded for continuous 30 minutes between 15:00 hrs. to 18:00 hrs. in the 1 st day and 11:00 hrs to 18:00 hrs in the 2 nd 29 day, as per Clause 9(ix) of the NIT. There was no issue in relation to the bidding process on the 1st day on 04.05.2015. On the 2nd day, the Reverse Auction was to continue from 11:00 hrs and finally stop at 18:00 hrs. Service provider for e-tendering was required to take all necessary steps to ensure smooth and uninterrupted functioning of the same at their end. Bidders were advised to ensure stable connectivity at their end. Service provider or BCCL could not be responsible for any disruption of connectivity or any failure at bidder's end, as per Clause 9(xii). Manual extension of bidding time would not be allowed at the request of the bidder. In case there is any technological or system failure at service provider's end, the bidding will be paused and it will be extended for the period the system remained down. At the end of the bidding, bidder emerging as L-1 will have to produce documents as per Clause- 7(b). If L-1 bidder fails to produce the original documents within a period of five days after the day of Reverse Auction, it would be liable for cancellation of bid / contract and forfeiture of EMD or Performance Security and also for delisting. The General terms and conditions of the NIT, quoted above, provide for revocation of tender process. The online evaluation of tender must be performed by the Evaluator with utmost care and diligence. It further provided that there may be circumstances when online evaluation of tender is not done correctly due to mistake of Evaluator or due to technical error in the system, in that case, it may lead to cancellation of the tender. In order to avoid the cancellation of tender in such cases, the tender process needs to be reverted back to appropriate stage (Technical-bid Opening or Price-bid Opening stage) to comply with the Court's verdict or to rectify the error committed by the Evaluator. This provision in the e-Tendering system has been introduced with an objective to abide by the Court's verdict or to ensure that the tender process should not suffer due to mistake committed by an individual or due to any technical error in the system. Revocation of Tender process back to technical-bid opening stage or Price-bid opening stage from an advanced stage shall be done under the following circumstances:
1. To comply with the directives of Hon'ble Court of Law.
2. If the Evaluator makes a mistake in online evaluation of tender, which is not in line with the Tender Committee decision.
3. If there is an error in the online evaluation of tender due to technical error in the system.
However revocation of tender process will be under the discretion of the BCCL Management.
36. The salient terms of the NIT, quoted in the earlier paragraph and discussed hereinabove, unambiguously show that Reverse Auction Bidding Process should be absolutely secure and pure. The system would be paused only in case of technological or system failure at the service provider's end and would got extended 30 for the period the system remained down. No manual extension of bidding time will be allowed at the request of the bidder, nor service provider or BCCL will be responsible for any disruption of connectivity or any failure at the bidder's end. It is evident from the records that the system was not paused at 12:55 hrs or thereafter till the scheduled close of time on expiry of 30 minutes period from last bid submitted at 12:33:47 hrs till 1:03:58 hrs. It automatically got stopped at a scheduled closure, as reflected from the screenshot taken at 13:03:47 hrs showing the writ petitioner as L-1 and the bid amount quoted by it i.e. Rs. 23454553620.00000000. The date and time of the bid submitted by the appellant before automatic close at the end of 30 minutes period was 05.05.2015 at 12:33:47 hrs. CERT-In's report shows that BCCL had reported to C1 India Pvt. Ltd that bidders have complained that they are not able to submit their bids; C1 India Pvt. Ltd. did not pause running of the Reverse Auction Bidding application which resulted in the start of the Reverse Auction Closure Process automatically at 13:03:47 hrs after 30 minutes of the last bid of the writ petitioner. The conclusion recorded by the CERT-In in its Incident 'Analysis Report' dated 28.12.2015 however showed that during the crucial period from 12.50 hrs to 13:05 hrs, bandwidth available to the bidders was very low and web access logs showed that all the bidders had faced problem in connecting to the server running the web application, which could be due to dual fiber cut, as reported by M/s TCL and also evident from the various graph provided them. Web connectivity problem was severe for three of the bidders including M/s Madhucon Projects Ltd., M/s R.K. Transport Co. (Respondnet No. 8) and M/s Dhansar Engineering Co., while for the other three including the writ petitioner, problem was faced intermittently. Service provider C1 India Pvt. Ltd. was well connected to the server running web application throughout the auction process including crucial period from 12:50 hrs to 13:05 hrs since it was well connected with the server through leased line. It did not face any difficulty at all to connect the server. However, even after receiving complaint from the BCCL about the problem faced by the bidders in submitting their bids, C1 India Pvt. Ltd did not pause the Reverse Auction application running on the server which lead to closure of the bidding process during crucial period. CERT-In opined that it did not find any external interference, manipulation or interruption to the Reverse e-Auction Bidding Application running on virtual server.
37. The aforesaid expert opinion leads to two inferences, (i) that service provider was well connected to the server during the crucial period while bidders faced very low bandwidth problem between 12:50 hrs to 13:05 hrs. As per Clause 9(xii), the service provider would not be responsible for any disruption of connectivity or any failure at the bidders' end. But as per Clause 9(xiii), in case of any technological or 31 system failure at service provider's end, the bidding had to be paused and got extended for the period the system remained down. The service provider C1 India Pvt. Ltd failed to pause the system, though it has accepted a technological glitch in the system between 12:55 hrs. to 13:05 hrs i.e. the crucial time. (ii) If the service provider treated the complaint of the bidders as low availability of bandwidth at their end, there was no reason to pause the system. However, it is the accepted case of the Respondent BCCL, C1 India Pvt. Ltd as also the Respondent No. 8 that there was a technological glitch or failure which interrupted the Reverse Auction Bidding Process. In that case, failure to pause the system on the part of the service provider C1 India Pvt. Ltd amounted to a serious lapse in abiding by the terms and conditions of the NIT which led to one of the bidders being shown as L-1 at the scheduled close of the bidding on the expiry of 30 minutes of its last bid at 12:33:47 hrs.
38. On the one hand, it is to be noted that apart from the email sent by C1 India Pvt. Ltd through one Kundan Jha to M/s Tata Communication Ltd. at 12:59 hrs on 05.05.2015 showing "my link is down", however no other call detail or email prior to 12:59 hrs have been brought on record on the part of the service provider to substantiate the submission that it had received complaints from the bidders that they were not able to submit their bids. The Reverse Auction Bidding Process was restored at 2.30 M after receipt of email about rectification of the defect at 2.11 pm on 05.05.2015. While Respondent service provider C1 India Pvt. Ltd has stated that information of resumption of the bidding process at 2.30 pm was sent to all the bidders, emails enclosed to 3rd supplementary counter affidavit of BCCL to the writ petition, referred to earlier, shows that the first email was sent at 2.17 pm to [email protected] and M/s R.K. Transport (Respondent No. 8), but emails were sent to other bidders only starting from 2.30 pm up to 2.36 pm. At the same time, the Analysis Report submitted by C1 India Pvt. Ltd, also enclosed to the 3 rd supplementary counter affidavit of BCCL, shows that two such bidders namely, Dhansar Engineering Company Private Limited and R.K. Transport had already logged in at 2.29 pm before resumption. Logs of each bidders submitted by C1 India Pvt. Ltd. shows that the bidding process had resumed at 2.30 pm before the information was sent to the other bidders.
39. Here again, the service provider did not adhere to the letter and spirit of the conditions of the NIT in order to preserve the sanctity of the bidding process. It is also to be taken note of that the bid amount of the writ petitioner was declared as L-1 at 13:03:58 hrs. which also came to the notice of other bidders as the auction had been closed. In the Reverse Auction Bidding Process, bidders name were not to be disclosed, as per Clause 9(iv). If the service provider was of the opinion that the 32 bidding process was interrupted from 12.55 pm and declaration of the writ petitioner as L-1 had no sanctity or meaning in the eye of law, then at the time of resumption of the Reverse Auction Process at 2.30 pm, all the bidders should have been placed at a level playing field. The declaration of the writ petitioner as L-1 bidder was required to be declared as null and void. In that case, BCCL had to take a decision in terms of the provisions of 'Revocation of Tender Process', also quoted above, to revert back to appropriate stage i.e. Price-bid Opening stage, if not Technical Bid Opening stage in order to avoid cancellation of tender. Such a decision was required to be taken by the BCCL in the circumstances when online evaluation of tender was not done correctly due to mistake by the Evaluator or due to technical error in the system.
40. In this context, it is proper to extract the observation made by the Hon'ble Supreme Court in the case of Ramana Dayaram Shetty vs. The International Airport Authority of India and others [(1979) 3 SCC 489 at para-10 of the Report which has since been consistently followed.
"10. ........................... It is a well-settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them......................" (Emphasis supplied)."
In the case of Sterling Computers Ltd. Vs. M & N Publications Limited & others, (1993) 1 SCC 445 at para-19, the Apex Court has made the following observations:
"19. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract. But, once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of Article 14 of the Constitution, the courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters and any interference by court amounts to encroachment on the exclusive right of the executive to take such decision."
The principle that if the thing is required to be done in certain way is to be done so in that manner and no other manner, applies to contract as well. In the case of Central Coalfields Limited and another vs. SLL-SML (Joint Venture Consortium) and others [(2016) 8 SCC 622], the observation made by the Apex Court at para-52 of the Report is reproduced hereunder:
"52. There is a wholesome principle that the courts have been following for a very long time and which was articulated in Nazir Ahmad v. King Emperor "...where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden."33
There is no valid reason to give up this salutary principle or not to apply it mutatis mutandis to bid documents. This principle deserves to be applied in contractual disputes, particularly in commercial contracts or bids leading up to commercial contracts, where there is stiff competition. It must follow from the application of the principle laid down in Nazir Ahmad that if the employer prescribes a particular format of the bank guarantee to be furnished, then a bidder ought to submit the bank guarantee in that particular format only and not in any other format. However, as mentioned above, there is no inflexibility in this regard and an employer could deviate from the terms of the bid document but only within the parameters mentioned above."
[See: Tata Cellular Vs. Union of India (1994) 6 SCC 651, Para-77 & 81 and B.S.N. Joshi and Sons Vs. Nair Coal Services Ltd. (2006) 11 SCC 548 para-66 & 67].
40. If the Reverse Auction Bidding Process was resumed at 2.30 pm and all the bidders including the writ petitioner started participating in it, the argument raised against the writ petitioner of failing to submit the breakup (Price Bid Breakup- Form- III of Annexure-M) under Clause 9(viii) within two hours of the conclusion of the auction, can't be putforth. The conduct of the writ petitioner in participating in the Reverse Auction Process after its resumption as an act of acquiescence, can't be treated as an excuse on the part of service provider and BCCL in not maintaining the sanctity of the Reverse Auction Bidding Process in its letter and spirit, as per the terms of the NIT. Public interest required that integrity and sanctity of the entire process of reverse auction for award of a work of such a huge value was scrupulously preserved.
41. Let us move on to the next related aspect on the proportionate extension of time after resumption of Reverse Bidding Process at 2.30 pm. The service provider treated the time between 1:03 hrs till 2.30 pm as the period within which the system remained down and proportionately extended the period of closure of the process for 1:27 hrs beyond 18:00 hrs on 05.05.2015 on the 2nd day. It is once again pertinent to mention here that during the extended time, the last bid of the writ petitioner was submitted at 19:26:24 hrs while the last bid of the Respondent No. 8 was submitted at 19:26:45 hrs i.e. 21 seconds thereafter. The system was closed exactly at 19:27 hrs i.e. 14 seconds after the last bid of the Respondent No. 8. If, as per the consistent case of the service provider and BCCL as also the Respondent No. 8 based upon the report of CERT-In, the technical glitch or technological error in the system occurred between 12:55 hrs to 13:05 hrs., and that the declaration of the writ petitioner as L-1 at 1:03 hrs had no meaning in the eye of law, then the proportionate time to be extended after resumption of the Reverse Auction Bidding Process and after the scheduled close of bidding process at 18:00 hrs should have been 1:35 hrs counted from 12:55 hrs to 2.30 pm. The way in which the bidding was going on neck to neck even till 19:26:45 hrs, it 34 could be reasonably expected that any more bids could have been made with a still lower price in the left over time of about 08 minutes after the last bid submitted by the Respondent No. 8 at 19:26:45 hrs. It could have been crucial to fetch a competitive price in the interest of exchequer and served the larger public interest. Therefore, comparison of the last two bids quoted by the writ petitioner and the Respondent No. 8 alone would not convey a complete true picture whether the Reverse Auction Bidding Process has been able to fetch the lowest price or not?
42. It can't be lost sight of that the entire details of technological glitch and the web logs came to be available only after the Respondent BCCL filed CERT-In's report and logs provided by C1 India Pvt. Ltd. through its 3 rd supplementary counter affidavit on 11.01.2016 in the writ petition. None of the bidders could be presumed to have known as to whether these decisions taken at the level of service provider were correct and in strict adherence to the terms and conditions of NIT based upon proper technical evaluation of the technological interruption caused to the system during the crucial period between 12:55 hrs to 13:05 hrs. That is why, responsibility on the service provider and M/s BCCL to maintain integrity of the Reverse Auction Bidding Process, was huge and enormous. These facts lend support to the opinion that the service provider failed to maintain sanctity of the Reverse Auction Bidding Process. It committed serious illegality in not adhering to the salient terms and conditions of the NIT in such a secure online bidding process. Failure to pause the system due to technical glitch in the system at the appropriate time, resumption of the Reverse Auction Bidding Process at 2.30 pm without prior information to the bidders except two including the Respondent No. 8 not only creates a cloud of doubt on their actions but also indicates procedural impropriety and arbitrariness in the decision making process. Writ petitioner may be accused of delay in laying challenge to the decision of BCCL and service provider, but it could not absolve the employer and the service provider to maintain integrity of the Reverse Auction Bidding Process in the first place.
43. The sequence of events after declaration of the Respondent No. 8 as lowest bidder, also reflects upon the conduct of the BCCL. The proceeding of the writ court shows that there was a restraint on the BCCL vide interim order dated 18.08.2015 from entering into a contract with the Respondent No. 8 as it had failed to submit its Performance Guarantee even after the extension granted by BCCL on 30.07.2015 and failure of the Respondent No. 8 earlier to submit it within 28 days of issuance of LoA on 30.05.2015. Apart from that, despite specific directions by the Learned Single Judge vide interim order dated 04.11.2015 upon the BCCL to produce all communications and disclose the methods adopted for e-auction to prima facie 35 satisfy the court on the issues of fair and transparent procedure adopted for e-auction, instead of submitting all the documents before the Court where the matter was subjudice, it chose to approach CERT-In, a body constituted by the Department of Information and Technology, Government of India on its own. CERT-In's report furnished on 28.12.2015 have been elaborately discussed hereinabove and accepted by all the parties. The preceding discussions on the legality, procedural fairness and requirement of non-arbitrariness in the decision making process is based on the expert opinion rendered by CERT-In. There is indeed no quarrel with the proposition advanced by the learned counsel for the Respondent No. 8 that the Court should not interfere with the view taken by the experts. Deference can be given to the opinion given by the experts if the entire action, judged in totality, does not suffer from arbitrariness in order to favour someone. Even if, other experts have expressed doubt about the sustainability of the report, court will not sit in the judgment over different opinion of experts, if the decision ultimately taken by the employer show full application of mind. The Apex Court in a latest judgment dated 27.03.2018 rendered in Civil Appeal No. 3330/2018 and analogous cases at para-49 and 50 of the Report held that the High Court could not ordinarily interfere with the judgment of the expert consultant on the issues of technical qualifications of a bidder under the scope of judicial review. It is not open to the court to independently evaluate the technical bids and financial bids of the parties as an appellate authority for coming to its conclusion, unless thresholds of mala fides, intention to favour someone or bias, arbitrariness or perversity are met. Where a decision is taken purely on public interest, the Court ordinarily should exercise judicial restraint.
44. In this case, the decision of the service provider does not show full application of mind, taking into account the very opinion of expert CERT-In. If the opinion of the expert recognized a technical glitch between 12:55 hrs to 13:05 hrs on the 2 nd day of the Reverse Auction Bidding Process, either the system had to be paused by the service provider the moment it noticed the glitch or if the system automatically closed at the expiry of 30 minutes declaring the writ petitioner as L-1 despite the technical glitch, the said decision had to be scrapped so that all the bidders were at the level playing field when Reverse Auction Bidding Process was restored. The decision making process was structured and the tender conditions did not provide for relaxation of such a term. Even otherwise, BCCL completely abdicated its responsibility in taking a decision in terms of the Clause 14 of Instruction to Bidders and Revocation of Tender Process to revert back to the price bid opening stage in order to avoid cancellation of tender due to the technical error in the system. If this was not done, it was not only a failure on the part of the service provider but also the BCCL in not 36 strictly adhering to the terms and conditions of the NIT. This was not a mere aberration, but amounted to arbitrariness and lack of fair play in action which affected the integrity of the process as a whole. In such circumstances, I am unable to agree with the opinion of the Learned Single Judge that the entire tender process was held in fair and transparent manner and the Respondent BCCL had given a level playing field to all the participants. I am also unable to accept that the resumption of tender process was not contrary to the terms and conditions of the NIT, even if there was a system failure. I do not feel persuaded to concur with the findings of the Learned Single Judge that since the final bid offered by the Respondent No. 8 was much higher (sic lower) than the petitioner, decision to award the contract was in public interest, which should not be interfered in the exercise of power of judicial review. A mere difference in the prices offered by the two tenderers may or may not be decisive whether any public interest is involved in intervening in such a commercial transaction. The dispute is not purely between two bidders. In the opinion of this Court, the larger issue of public interest is involved in the matter as the sanctity and integrity of the entire Reverse Auction Bidding Process appears to have been vitiated. [See: (1999) 1 SCC 492 para-11 (Raunaq International Limited Vs. I.V.R. Construction Limited]. The end result cannot justify the means if the sanctity of the decision making process was vitiated on account of the reasons discussed hereinabove. More importantly, the faith in the integrity of the Reverse Auction Process should not be shaken, keeping in mind the larger public interest. Therefore, I am of the considered view that the impugned action of the service provider and BCCL not only suffers from illegality and arbitrariness but also lack of fairness and transparency which affected the integrity of the reverse auction process. The service provider C1 India Pvt. Ltd. and the Employer BCCL should have acted in a much more responsible manner considering the nature of bidding process and the huge value of the work to be awarded. BCCL is not right in forsaking its responsibility in the entire decision making process as found during the discussions above.
45. Considerable time has elapsed after the Reverse Auction Bidding Process was concluded on 05.05.2015. However, Respondent BCCL was restrained by the Learned Single Judge from executing any contract with the Respondent No. 8 by interim order dated 18.08.2015 which continued till the impugned judgment was rendered by the Learned Single Judge on 16.08.2017. Respondent BCCL have issued work order upon the Respondent No. 8 only on 23.11.2017. It further appears from the order dated 18.09.2017 passed in the present LPA by a Coordinate Bench of this court that the appellant on his part had sought to further reduce its offer to less than Rs. 455 crores and what is alleged to have been accepted by the Respondent BCCL. However, 37 BCCL has refused to accept the reduced offer of the appellant. In the totality of the circumstances, it appears that due to efflux of time since the NIT was issued on 09.03.2015, not only the work remained unexecuted for considerable period as the agreement between BCCL and Respondent No. 8 was entered in March 2018 pursuant to issuance of LOI on 23.11.2017, but the value of the work may also have been considerably altered by now. Thus, I am of the view that a fresh auction may be undertaken for award of the work, if necessary, by suitably revising the terms of the NIT as per the present nature of work, so that maximum revenue is earned to the public exchequer. In that light, this Court does not find merit in the prayer of the writ petitioner that the work should be allotted to it in place of Respondent No. 8.
46. As an upshot of the detailed reasons and discussions made hereinabove, the award of work to the Respondent No. 8 pursuant to issuance of Letter of Acceptance on 30.05.2015, cannot be sustained in the eye of law and is accordingly quashed. All consequential actions taken by the Respondent BCCL pursuant to the award of work and Agreement, if any, entered during pendency of this proceeding, also cannot be sustained and are declared as invalid. The impugned judgment dated 16.08.2017 passed by the Learned Single Judge is hereby set aside. I am also of the opinion that an inquiry should be conducted by the Chief Vigilance Commissioner into the entire matter relating to the Reverse Auction Process in order to arrive at a finding whether there were deliberate acts and omissions on the part of the authorities of BCCL and the service provider C1 India Pvt. Ltd and whether it was actuated with oblique motives? Letters Patent Appeal stands allowed in the aforesaid terms.
(Aparesh Kumar Singh, J) (Ratnaker Bhengra, J) Ranjeet/N.A.F.R.