Calcutta High Court
Beml Limited & Anr vs Kolkata Metro Railway Corporation Ltd. ... on 17 March, 2010
Author: Dipankar Datta
Bench: Dipankar Datta
1
G.A. 188 of 2010
W.P. 1259 of 2009
IN THE HIGH COURT AT KOLKATA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Present : The Hon'ble Justice Dipankar Datta
BEML Limited & anr.
...Petitioners
Versus
Kolkata Metro Railway Corporation Ltd. & anr.
...Respondents
For the petitioners : Mr. A.K. Mitra
Mr. Pratap Chatterjee
Mr. A.Roy
Mr. A. Sarkar
For respondents : Mr. Kishore Dutta
Mrs. Sumita Shaw
Hearing concluded on : 5.3.2010
Judgment on : 17.3.2010
With a view to shortlist "Passenger Rolling Stock Design & Manufacturing Companies" through a pre-qualification process for the design, manufacture, supply, testing and commissioning of electric multiple units and training of personnel for the Kolkata Metro Railway Project (hereafter the project), Kolkata Metro Railway Corporation Ltd. (hereafter KMRCL) had issued Pre- qualification Tender Notification (Revised) (hereafter the notification) dated 25.3.2009. The notification provided that KMRCL would appoint "General Consultant" for assisting it in evaluating the tenders. Indian as well as international companies, either by themselves or as a joint venture/consortium were invited to complete the pre-qualification enquiry documents in 2 proforma format. The applicants were required to have a good financial standing and performance record, requisite experience and capacity in the fields for which the notification was issued. The notification envisaged a three-tier process. Those applicants succeeding in the pre- qualification stage would be entitled to have the tender documents for submission of technical bid and financial bid.
It appears from the counter affidavit filed by KMRCL that the proposal for construction of East- West Metro Corridor Project from Howrah Maidan to Salt Lake, Sector V, Kolkata for the present with scope for future extension from Dasnagar to other neighbouring areas of Howrah was approved by a study cabinet in its meeting held on 14.6.2007 pursuant whereto the project was conceived with target date of completion being October, 2014. The project cost would be borne by the Japan International Corporation Agency (hereafter JICA), the Central Government and the State Government in the ratio of 45:25:30 respectively.
BEML Ltd., the first petitioner (hereafter BEML) submitted its pre-qualification tender application on 24.4.2009. Seven other consortium/joint venture/sole manufacturers also expressed interest. The General Consultant upon consideration of applications filed by the 8 (eight) applicants shortlisted 5 (five) of them. The same was approved by the Chief Engineer Level Committee constituted by KMRCL on 15.5.2009 and its decision was placed before JICA on 25.5.2009. An objection was raised in respect of the 5th shortlisted consortia i.e. M/s. Alstom, India & France. The observation of JICA was again placed before the General Consultant. On 29.5.2009, the objection was accepted and the General Consultant ultimately short-listed 4 (four) consortia. The Chief Engineer Level Committee on 3.6.2009 accepted the decision of the General Consultant whereafter the Board Level Committee of KMRCL approved it. The same was again placed before JICA on 16.6.2009 and obtained its approval. On 29.6.2009, the Chairman of KMRCL approved it whereafter the Board of Directors of KMRCL ultimately approved the decision on 27.8.2009. This resulted in issuance of notice dated 15.7.2009 disclosing the names of the 4 (four) shortlisted consortia. BEML was not short-listed.
It is claimed by BEML that after receipt of communication dated 29.7.2009 which records why it was not found qualified to participate in the technical and financial bids and that it had secured 3 102 marks against minimum requirement of 135 marks, it had sought for a review of its application. On being called by KMRCL, a presentation was duly made by it on 17.9.2009 before the Managing Director of KMRCL. It was contended on behalf of BEML that it had the necessary credentials to execute the work and, therefore, should not have been disqualified. A second presentation was made by it on 27.11.2009. KMRCL did not respond favourably. Feeling aggrieved by the decision taken by KMRCL to disqualify it, BEML presented this petition dated 15.12.2009 praying for, inter alia, the following relief :
"a) a writ of Mandamus commanding the respondents, their men, agents and/or servants to forthwith withdraw, recall, and/or cancel the letter dated 15th of July, 2009 being annexure P-3 or any similar intimation and to forebear from giving any effect thereto or in acting in terms thereof.
b) A writ of Mandamus do issue commanding the respondent authorities to forthwith issue invitation for tender in respect of tender No.1 RS-PQ (revised) dated 25th of March, 2009 to the petitioner No.1;
c) In the alternative a writ of Mandamus do issue commanding the respondent authorities to recall and/or cancel and/or rescind the entire tender process in respect of tender no.1 RS- PQ (revised) dated 25th of March, 2009;
d) A writ of prohibition prohibiting the respondent authorities from dealing with and/or issuing invitation for tender on any third party in terms of its purported evaluation mentioned in the letter dated 15th of July, 2009 or otherwise;
e) A writ of Certiorari do issue commanding the respondents to forthwith transmit the letter dated 15th July, 2009 being annexure "P-4" the entire documents pertaining to tender No.1RS-PQ (revised) dated 25th of March, 2009 before this Hon'ble Court so that the same may be quashed and conscionable justice be done."
Annexures "P-3" and "P-4" referred to in the prayer clauses extracted supra are the said notice dated 15.7.2009 and note dated 29.7.2009 respectively.
I have heard Mr. Mitra, learned senior advocate, duly assisted by Mr. Chatterjee, learned senior advocate and Mr. Roy, learned advocate in support of the petition. I have also heard Mr. Dutta, learned advocate for KMRCL. Upon hearing the parties and on perusal of the materials placed on record, I have no hesitation to hold that no case for interference has been made out. Before dealing with arguments advanced on behalf of BEML to have the decision of KMRCL to disqualify it set aside, I consider it proper to give my decision on the point raised by Mr. Dutta in respect of the application filed by BEML.
He had invited my attention to clause 1.11 (page 63 of the petition) under the heading "Introduction" forming part of the instructions to applicants. Clause 1.11 reads as follows : 4
"1.11- Interested designers and manufacturers of passenger rolling stock and vehicle systems, Indian and international, may apply for pre- qualification as sole-contractor or as joint venture, partnership or consortium (group) with members complying with the criterion given in Pre-Qualification Tender Notification (para 1.6). It may be noted that no member would be permitted to tender for the same contract in their own name and also time as part of another joint venture partnership or consortium".
BEML in the petition has averred that it had an agreement with Hyundai Rotem Company (hereafter ROTEM) and thereunder "bought the standard gauge and broad gauge metro technology from .........wayback in June, 2004 by paying .........and such information has been furnished as part of the tender including therein a copy of the ToT agreement dated 11.6.2004".
It has further been claimed that the experience of ROTEM in manufacturing cars and the turn over criteria is that of BEML and consequently BEML "cannot be treated to have no experience for the pre-qualification tender following the international practices in this aspect".
The memorandum of agreement dated 11.6.2004 referred to above between BEML and ROTEM (at page 161 of the petition) however provides in clause 1 as follows :
"1.1 ROTEM will offer technology and technical assistance to BEML to manufacture and supply Broad Gauge and Standard Gauge EMU metro coaches, and as regards aluminum EMU it shall be discussed and agreed separately when business prospects arise. 1.2 ROTEM may also consider providing technology and technical assistance to BEML for steel wheel light Rail Vehicles and High Speed Passenger Coaches. 1.3 For the avoidance of doubt, any and all standard and broad gauge EMUs or Light Rail Vehicles or High Speed Passanger coaches produced by BEML after the date executing this AGREEMENT as described in Clauses 1.1 and 1.2 shall be hereinafter referred to as "PRODUCTS".
1.4 Based on the customer requirements and competiveness of each PARTY, BEML or ROTEM or BEML-ROTEM consortium, as the case may be, will tender to the customers in India for a selected and agreed project for the PRODUCTS.
1.5 ROTEM and BEML will discuss and finalize detailed scope of work and scope of technical assistance for each project. However, both PARTIES basically agree to the following guidelines for the scope of work :
Basic scope of ROTEM Design, Development and Engineering Supply of all components, parts and material sourced from South Korea and outside India, and however such supply will be discused for each project. Supply of components having ethical aggregates proprietary in nature/made of special material as may be decided mutually between the PARTIES on project to project basis. Manufacture of prototype of EMU and other products including a certain number of completely finished EMU and/or Semi-knocked-Down(SKD) EMU to be agreed.5
Basic Scope of BEML Manufacture and supply of all components, part and material sourced in India. Manufacture of components, equipment and parts using sub-components/equipment/parts and materials supplied from ROTEM.
Manufacture of sales production EMUs and other products to be agreed for its scope. To start with the indigenous content manufactured/sourced by BEML will be minimum 30% of total scope. The indigenous content will be gradually increased based on experience gained by BEML and development of aggregates indigenously. 1.6 The technical information and know how to be transferred will be agreed and defined later in detail on project to project basis.
1.7 BEML agrees that ROTEM shall supply ROTEM's propulsion equipments for the PRODUCTS on a case to case basis wherever applicable subject to the requirements of customers/projects."
Referring to documents annexed to its counter affidavit, it was the contention of KMRCL that ROTEM had applied to participate in the tender process as part of a consortium with Marubeni Corporation of Japan, and that BEML participated separately at the stage of pre-qualification without adhering to the memorandum of agreement; and, therefore, no wrong was committed in disqualifying BEML.
Paragraph 1.4 extracted supra is crucial for a decision on this point. The terms thereof would suggest that BEML and ROTEM agreed that they would not be competitors in respect of a particular project for the products of BEML. That BEML and ROTEM were competitors in the process admits of no doubt. This is contrary to their own agreement. That apart, there is no agreement between BEML and ROTEM that the said project has been selected by them wherefor BEML as a sole bidder would tender to the customers in India. In the absence of such agreement, the possibility of a charge by ROTEM in future that BEML had violated the terms of the agreement cannot be ruled out. Having regard to the fact that under the agreement 'Design Development and Engineering' is basically within the scope of ROTEM, any dispute or difference arising between BEML and ROTEM in the event of BEML's ultimate selection might have the effect of impeding progress and thereby delaying the project. Having regard to the magnitude of the project and considering the importance and desirability of completing it well within time for the greater benefit of the people of Kolkata, permitting BEML to participate in the process, in my view, would not at all be conducive to public interest. On this ground alone, I am satisfied that BEML can claim no right to participate in the tender.
6Mr. Chatterjee in course of submission had traced the history of BEML supplying 220 (two hundred twenty) broad gauge metro cars and 40 (forty) standard gauge metro cars as well as 8 (eight) electric multiple units to Delhi Metro Rail Corporation Ltd. as well as qualifying the test for supply of electric multiple units to Bangalore Metro Rail Corporation Ltd. I, however, do not consider that mere selection of BEML for supplying metro cars and electric multiple units to the other like Corporations of the country is by itself sufficient reason for BEML to be short-listed by KMRCL. Every tender notification contains eligibility criteria, some imperative, which a prospective bidder must satisfy if it intends to participate. BEML might have been selected having regard to the eligibility criteria contained in the tender notifications issued by Delhi and Bangalore Metro Railway Corporations but that by itself would not qualify it for being short-listed unless of course the experts in the field are satisfied. The contention is misconceived and thus stands rejected.
The next contention I propose to deal with is the one raised by Mr. Mitra in course of reply. According to him, the rigidity in respect of interpretation of the tender conditions to be followed in respect of the main tender ought not to be applied at the pre-qualification stage. According to him, BEML has not been fairly treated.
I regret, the contention has not impressed me at all. BEML duly understood the procedure that was to be adopted at the pre-qualification stage. Shortlisting would be dependent on a marking system as indicated in the notification. The minimum requirement of securing 135 marks had not been satisfied by BEML; it secured 102 marks. It is well-settled that a particular procedure having been prescribed, any deviation therefrom would amount to a fraud on public and therefore KMRCL would have invited criticism if it had not insisted on rigid application of the terms and conditions forming part of the notification.
It was then contended that the decision not to shortlist BEML has been influenced by JICA. The involvement of JICA and its interdiction at various stages of the process makes it crystal clear that there has been no independent application of mind on the part of KMRCL and that benefiting Japanese applicants has been the object at the cost of Indian applicants. 7 I do not consider this contention worth consideration for a simple reason. JICA is not a party before me and, therefore, leveling allegations against it and urging the Court to grant relief in exercise of writ powers appears not to be proper on the part of BEML.
Next it has been contended that the entire process is actuated by malafides. Regard being had to the fact that BEML was not intimated of it not being shortlisted immediately after 14.5.2009 when the General Consultant shortlisted five applicants, the process of shortlisting had not attained finality; had it been so, there is no satisfactory explanation as to why BEML had been called upon to make presentations, once in September and then again in November, 2008. BEML's contention that even after KMRCL's disqualification it was called upon to make powerpoint presentations, has been opposed by KMRCL by contending that it had never, on its own, called upon BEML to make those presentations. In fact, it has no power of review under the notification.
BEML has averred in paragraphs 17 and 22 of the petition that KMRCL had called upon it to make presentations. Although in the counter affidavit KMRCL has come up with the usual evasive denial and has pleaded that it does not admit any statement not borne out from the records, I am not inclined to accept the contention advanced on behalf of BEML in course of argument that the powerpoint presentations were made on the invitation of KMRCL. As it is, no document has been annexed to the petition in support of such contention. In view of the decision reported in (1988) 4 SCC 534 : Bharat Singh vs. State of Haryana, BEML was required to annex relevant documents to the petition in support of its pleadings. I thus refuse to believe that on KMRCL's invitation, BEML made the presentations despite being disqualified. That apart, paragraph 17 speaks of "after much persuasion" which is a pointer to the fact that BEML itself had been successful in persuading KMRCL to give it an audience. However, nothing turns on the presentations made by BEML because once a decision has been taken not to shortlist BEML, such decision ordinarily could not have been altered and no worthy case has been made out for which a direction may issue upon KMRCL to consider the issue of shortlisting BEML afresh.
Another grievance that has been voiced before me is that the reasons for not short-listing BEML (at pages 107-108 of the writ petition) are arbitrary and perverse.
8I do not consider the contention to be well-founded. The issue of BEML's eligibility has been looked into objectively by persons who are experts in their respective fields. If the view taken by the experts is reasonable on the basis of the materials before them, most certainly while exercising the power of judicial review, I shall not venture to hold that the view is not a possible view and thereby substitute my own view for it. It is settled law that a decision taken by experts can be interfered with only on limited grounds like illegality or patent material irregularity in the procedure vitiating the selection or proved malafides affecting the selection. I have considered the reasons assigned and tested its legality, validity and propriety based on the authority of the decision reported in (1994) 6 SCC 651 : Tata Cellular vs. Union of India and I do not feel persuaded to be ad idem either with Mr. Mitra or Mr. Chatterjee that any kind of interference is warranted. The decision making process leading to the ultimate decision does not suffer from any of the vices which would entitle the Writ Court to interfere.
Much has been argued on the point of financial stability of BEML. Along with the notification was issued a pre-qualification questionnaire. Question 17(c) called upon the applicants to disclose their annual financial turn over (for rolling stock only) for the 5 years preceding 31.3.2008. Documents annexed to the writ petition do not reveal what BEML disclosed as against question no.17(c). In paragraph 32 of the petition it has given the figures of turnover. The point has been countered by KMRCL in paragraph 29 of its counter-affidavit by pleading as follows :
" I say in this connection that whatever submission the petitioner no.1 has made against question no.17(c) (page No.91) has only been considered for evaluation of Average Annual Turnover by the petitioner No.1. Submission now being made by the petitioner are afterthought and without any basis".
The columns meant to be filled up by BEML while answering question 17(c) appear to be blank (at pg. 91 of the writ petition). A comparative analysis of the figures given in paragraph 32 of the petition with the figures given in paragraph 26 of the counter affidavit do seem to suggest that BEML has disclosed fudged figures in paragraph 32 of the petition. I could have considered the issue of financial stability of BEML if only copy of the questionnaire duly filled in by BEML and submitted before KMRCL had been annexed to the petition. I am thus disabled to return a finding 9 on this aspect. I must hold that BEML must blame itself for this without blaming KMRCL of subjecting it to unfair treatment.
The marking system was also subjected to severe criticism. Inability of KMRCL to disclose markings under different heads in respect of BEML was contended to be an attempt on the part of KMRCL to withhold facts from the Court. It is no doubt true that under the notification KMRCL was not obliged to disclose or discuss any aspect of the evaluation process. However the issue of disqualification of BEML having reached Court, KMRCL in all fairness ought to have placed the same on record to avoid any charge of not being transparent in its dealings. Be that as it may, mere omission on the part of KMRCL is not considered sufficient ground to grant relief to BEML, as prayed for. Marking under different heads is in the realm of assessment of relative merits of candidates effected by the General Consultant. Merely on the basis of the suspicion expressed by BEML that it was deliberately under marked, it cannot be held that the process of assessment stood vitiated. Assessment, as noticed above, was effected and scrutinized at various levels. It is not within the domain of the Court of Writ to embark on a detailed enquiry in relation to the process of marking, which is the exclusive field of an appellate authority. One has also to keep in mind the fact that neither the members of the Committees constituted by KMRCL are parties nor is there any whisper in the petition about any personal bias of such members against BEML. Having regard to the facts of the present case it would be beyond my power to sit as a Court of appeal over the assessment made and as a consequence the challenge to assessment on merits of BEML cannot be countenanced.
I further have no doubt in my mind that the plea that has been advanced on behalf of BEML to the effect that value of the steel materials received free from the Railways should be added to the conversion figure in order to correctly ascertain the total turnover of coaches/wagons in monetary value must be rejected as an afterthought in the absence of any such indication in the documents submitted before KMRCL.
The decisions cited by Mr. Dutta reported in (2006) 11 SCC 548 : B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd., (laying down the law that essential condition regarding eligibility must be strictly construed, (2009) 6 SCC 171 : Meerut Development Authority vs. Assn. of Management 10 Studies, ruling that bidders have the right only to fair treatment in the matter of evaluation of their tenders and that all participants are to be treated alike and AIR 1990 SC 958 : G.J. Fernandez vs. State of Karnataka, declaring that if the tendering authority interprets a standard in a bonafide manner, Court should not substitute it even if it can be read differently have full application on the facts of this case and prevents me to consider granting any relief to BEML. Unfortunate it is that the only Indian applicant stands excluded from the zone of consideration but sentiment ought not to influence my decision.
Since the writ petition does not call for any interference, it stands dismissed. In view of the above, G.A. No.188 of 2010 also stands dismissed. However, in the circumstances, parties shall bear their own costs.
Urgent photostat certified copy of the judgment and order shall be given to the applicants within four days from date of putting in requisites therefor.
(DIPANKAR DATTA, J.)