Orissa High Court
Afr M/S Jyotin Kumar Sahoo vs Chief Administrative Officer on 17 August, 2022
Author: B.R.Sarangi
Bench: B.R.Sarangi
ORISSA HIGH COURT: CUTTACK
W.P.(C) No. 27805 OF 2021
In the matter of an application under Articles 226 and 227
of the Constitution of India.
---------------
AFR M/s Jyotin Kumar Sahoo ..... Petitioner
-Versus-
Chief Administrative Officer, East Coast Railway and others ..... Opp. Parties For Petitioner : M/s. Soumya Ranjan Mohanty, D. Acharya and A. Mishra, Advocates.
For Opp. Parties : Mr. P.K. Parhi, Assistant Solicitor General of India along with Mr. Debasis Tripathy, Central Government Counsel.
[O.Ps. 1 to 8] Mr. Satya Smruti Mohanty, Swayanjit Rout and Nishit Agarwal, Advocate.
[O.P.No.9] P R E S E N T:
THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR. JUSTICE SANJAY KUMAR MISHRA Date of hearing: 11.08.2022: Date of judgment: 17.08.2022 // 2 // DR. B.R. SARANGI, J. The Petitioner, which is a Proprietorship Firm and is a Working Contractor of the East Coast Railway, being represented through its Proprietor, has filed this Writ Application seeking to quash Annexure-4, dated 17.08.2021, by which the offer submitted by the Petitioner has been considered as non-compliant and bypassed, in view of non-submission of undertaking regarding "not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in Tender on the date of opening of the bids", which was mandatory to be submitted in the Tender offer.
2 The factual matrix of the case, in a nutshell, is that the East Coast Railway, through Opposite Party No.6, floated an E-Tender Notice for the work "Modification of power line crossings (33 KV/ 11 KV/ LT) between Sonepur to Boudh Railway Station in connection with new line between Khurda Road-Bolangir Project" calling upon the eligible bidders to participate. Pursuant to such E-Tender Notice, the Petitioner participated in the Tender process by // 3 // filing its bid satisfying the credentials prescribed in Clause-11 of the Tender document. In the event of non- compliance of the conditions stipulated in Clause-11, the bid of the tenderer was to be rejected, as per Clause-12 of the Tender Call Notice. Amongst the nine number of bidders participated in the Tender process, the Petitioner was ranked as L4. Since L1 to L3 bidders were ousted from the Tender process for technical reason and the Petitioner was next in the line being L4 to qualify in the biding process and the contract ought to have been settled in his favour, but due to non-compliance of the provisions contained in Clause-14, its offer was considered as non- compliant and bypassed, as it had not submitted the undertaking regarding not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in the Tender on the date of opening of the bid, which is mandatory to be submitted in the Tender offer. Hence, this Writ Petition.
// 4 //
3. Mr. Somya Ranjan Mohanty, learned Counsel appearing for the Petitioner, vehemently contended that compliance of Clause-14 of the Tender Call Notice is not mandatory one. According to him, the Petitioner has got all the Tender credentials as per Clause-11. Clause-12 of the Tender Conditions clearly specifies that non compliance with any of the conditions set forth "therein above", is liable to result in the Tender being rejected. It is further contended that "therein above" means the Clauses mentioned from Clause-1 to Clause-11. If any of the conditions, as stipulated from Clause-1 to 11, has not been satisfied or complied with, the Tender has to be rejected. The Petitioner, having complied with such conditions, its Technical Bid was opened and found to be qualified. Thereafter, the Price Bid was also opened and the Petitioner was ranked L4. But due to non-compliance of Clause-14, which is not mandatory, rather, it is ancillary to the bid, the offer submitted by the Petitioner was considered as non-compliant and bypassed, which is arbitrary, unreasonable and contrary to the provisions of // 5 // law as well as Tender Conditions. It is further contended that in the Tender document nowhere it is stipulated that due to non-compliance of Clause-14 and non-submission of the undertaking will entail rejection of the offer of a Tenderer, whereas Clause-14 clearly prescribes that concealment/ wrong information shall make the contract liable for determination under Clause-62 of the General Conditions of Contract. Even though the Petitioner had filed its representation on 12.08.2021 under Annexure-3 specifically taking a stand that the Petitioner has not been blacklisted or debarred and non-submission of such undertaking was merely a result of inadvertent mistake while filing the bid, but the same was rejected vide Annexure-4, dated 17.08.2021, which cannot sustain in the eye of law.
3.1 It is further contended that in the Tender Call Notice, there are mainly two types of conditions, i.e. essential and non-essential. Clause-11 of the Tender Document deals with essential conditions and for non-
// 6 // compliance of the same, as per Clause-12 the bid is liable to be rejected. The conditions contained in Clause-14 of the Tender Document are non-essential, meaning thereby, are merely ancillary and subsidiary in nature to the main object to be achieved in the Tender. Thereby, nowhere in the Tender Document, it is mentioned that non- submission of undertaking of not being blacklisted or debarred will result in rejection or disqualification of the bid. Thereby, the action of the Authorities holding that the offer of the Petitioner has been considered as non- compliant and bypassed, vide letter dated 17.08.2021 under Annexure-4, is perse unfair, illegal, arbitrary, discriminatory, abridges the legitimate expectation and also infringes the statutory and fundamental rights of the Petitioner as guaranteed under Articles 14, 19 and 21 of the Constitution of India.
To substantiate his contention, learned Counsel for the Petitioner has relied upon the judgments of the apex Court as well of this Court in the cases of Hukam Chand Shyam Lal v. Union of India, AIR 1976 SC 789:
// 7 // (1976) 2 SCC 128; Harinarayan G. Bajaj v. Rajesh Meghani, (2005) 10 SCC 660; Poddar Steel Corporation v. Ganesh Engineering Works, AIR 1991 SC 1579 :
(1991) 3 SCC 273 and Krushna Chandra Sahoo v. Bank of India, AIR 2009 Ori 35.
4. Mr. P.K. Parhi, learned Assistant Solicitor General of India appearing along with Mr. Debasis Tripathy, learned Central Government Counsel for Opposite Parties No.1 to 8, emphatically submitted that Clause-14 of Chapter-2 of the annexed document is a mandatory document. Therefore, for sole Proprietorship Firm an undertaking was to be submitted that it is not blacklisted or debarred by Railway or any other Ministry/Department of Govt. of India from participation in Tender on the date of opening of the bid, either in individual capacity or as a member of Partnership Firm or JV in which it was/is a Partner/Member. Concealment/ wrong information in regard to above shall make the Contract liable for determination under Clause-62 of the // 8 // General Conditions of Contract. In the Tender Document, at Sl. No.3 of Commercial Compliance, it is provided that the Tenderers shall have to submit the undertaking, as provided under Clause-14 of Chapter-2 of the annexed Document, and under Clause-3.1(iii) of the Tender Document, the Tenderers have been advised to check whether all other mandatory documents have been uploaded, without which the Tender offer is to be summarily rejected or is liable to be rejected. Therefore, the undertaking as per Clause-14, being a mandatory document to be uploaded by the Tenderer, having not been submitted, amounts to non-compliance of Clause 3.1 (iii) of Chapter-2. Therefore, the offer submitted by the Petitioner has been considered as non-compliant and bypassed. Thereby, no illegality or irregularity has been committed by the Authorities by declaring so. 4.1 It is further contended that along with the Tender, the Tenderer had to submit necessary financial credentials as 'Annexure-C' duly filled in, singed by the // 9 // Tenderer so also verified and singed by the Chartered Accountant to qualify the financial eligibility criteria. Annexure-C submitted by the Petitioner is not countersigned by the Chartered Accountant and thus, the offer was technically non-compliant. 4.2 It is also further contended that the particular Tender is a Single Packet Tender as per Railway Board's Letter No. 94/CE-I/CT/4/Pt.17 dated 13.08.2022. In Railway tendering process, Tender with advertised value of less than Rs.10 Crore is invited as a Single Packet Tender and with value more than Rs.10 Crore, is invited as Two Packet Tender. The advertised value of the instant Tender is Rs.5 Crore 67 Lakhs. Therefore, it is a Single Packet Tender. As such, in the Single Packet Tender, there is no separate Technical and Financial Bid. The Financial Offer, along with Technical portion of the bid, is opened simultaneously. The tabulation is made as per offered rate of the Tenderers and marked as LI, L2, L3 etc., as per offered rate in increasing order. The Tender Committee // 10 // scrutinizes and verifies the submitted documents/ credentials to check the fulfillment of technical eligibility criteria and other mandatory criteria of the offers and financial offers of technically qualified bidders are scrutinized/adjudged to rate the reasonability of the offered rate. In this particular case, L1 to L5 Tenderers were rejected due to non-fulfillment of one or more qualifying/eligibility criteria. It is further contended that the Petitioner, being L4 Tenderer, its offer was considered as non-complaint and bypassed, due to non submission of undertaking under Annexure-14 and submission of incomplete document under Annexure-C, i.e. "Compliance of Eligibility Criteria by the Tenderer regarding contractual payments received". It is further contended that nowhere it is mentioned in the Tender document that non-submission of the above undertaking will not lead to rejecting the offer of the Tenderer. On the contrary, it has been mentioned under the said Clause-14 that concealment/ wrong information in regard to above shall make the contract liable for determination under Clause-62 of the General // 11 // Conditions of Contract. Thereby, no illegality or irregularity has been committed by the Authority in passing the order impugned, and the said decision of the Authority requires no interference by this Court in exercise of Power under Judicial Review under Article 226 of the Constitution of India.
To substantiate his contention, learned Assistant Solicitor General of India has relied upon the judgments of the apex Court as well as of this Court in the cases of M/s Agmatel India Pvt. Ltd v. M/s Resoursys Telecom, 2022 (2) SCALE 554; N.G. Projects Limited v. Vinod Kumar Jain, AIR 2022 SC 1531 and RKD-CMRGS Joint Venture v. Indian Port Rail & Ropeway Corporation Ltd, 2020 (III) ILR-CUT 32.
5. Mr. Satya Smruti Mohanty, learned Counsel appearing for Opposite Party No.9, while stepping into the shoes of the contentions advanced by Mr. P.K. Parhi, learned Assistant Solicitor General of India appearing for Opposite Party Nos. 1 to 8, contended that Opposite Party // 12 // No.9 has been ranked as L6 and has qualified all requirements for the bid and after the rightful rejection of the bid of L1 to L5, including the Petitioner, Opposite Party No.9 stands eligible for the bid, as per the provisions laid down in the Tender document and the reports generated by Opposite Party Nos. 1 to 8. He further contended that rejection of the bid of the Petitioner was for non- compliance of Clause-4.1 of the Tender Form (Second Sheet) and Clause-14 of the Tender document, which states that it is mandatory for any Sole Proprietorship Firm to submit an undertaking declaring that he has not been blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in the Tender. Since the Petitioner failed to submit that undertaking, in view of Clause-12, since there was non- compliance of the Tender document, the bid of the Petitioner has been rightly rejected. Clause-11(ii) of the Tender document makes it clear that it is mandatory for the Bidders to submit the audited Balance Sheet duly certified by the Chartered Account, which has not been // 13 // complied with by the Petitioner, as is evident from Annexure-F/1, which has been placed on record at running Page-131. The said document does not contain the signature of the Chartered Accountant, thereby making the document un-verified and not eligible to meet the requirement in terms of Clause-11 (ii) of the Tender Document. It is further contended that as per Clause-3.1 of the Tender Form (second sheet), the Tenderer is required to check whether the details submitted in the required format was duly signed by the Tenderer and Chartered Accountant and whether all other mandatory documents were uploaded, without which the Tender offer is to be summarily rejected. A perusal of the checklist provided in E-Tender Document, under the heading 'Compliance', more particularly under the sub-heading "Commercial-Compliance", clearly states at Sl. No.3 that submission of the undertaking of not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in the Tender, is mandatory, and at Sl. No.5 that the audited Balance Sheet // 14 // to be duly certified by the Chartered Accountant, is also mandatory. Both the aforesaid documents, being mandatory, were not furnished by the Petitioner. This fact was duly noted by the Tender Committee in their Report placed on record at Page-141/142. Therefore, in view of Clause-12, the documents furnished by the Petitioner, having not in compliance to the Tender document, rightfully the Tender of the Petitioner has been rejected. Thereby, no illegality or irregularity has been committed by Opposite Party Nos. 1 to 8 in rejecting the bid of the Petitioner so as to call for interference by this Court at this stage.
To substantiate his contention, learned Counsel appearing for Opposite Party No.9 has placed reliance on the cases of Central Coalfields Limited v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622 and National High Speed Rail Corporation v. Montecarlo Limited, (2022) 6 SCC 401.
// 15 //
6. This Court heard Mr. Soumya Ranjan Mohanty, learned Counsel appearing for the Petitioner; Mr. P.K. Parhi, learned Assistant Solicitor General appearing along with Mr. Debasis Tripathy, learned Central Government Counsel for Opposite Party Nos. 1 to 8, and Mr. Satya Smruti Mohanty, learned Counsel appearing for Opposite Party No.9, by hybrid mode, and perused the record. Pleadings having been exchanged between the parties, with the consent of learned Counsel for the parties, this Writ Petition is being disposed of finally at the stage of admission.
7. The New Line Project between Khurda and Bolangir of East Coast Railway is a Project of National Interest. It was being executed jointly by State of Odisha and Ministry of Railways in cost sharing basis. The Sections between Khurda and Mahipur in one side and between Bolangir and Bichhupali in another side have been completed and passenger services have been started. The Civil Engineering Works are in full swing in entire // 16 // remaining section, i.e., from Bichhupali- Mahipur Section. The track formation work in Boudh-Tel River Section is hindered due to presence of non-modified existing power line crossings in that section. Civil Engineering Work could be started only after modification of the Power-line crossing at those locations. The Project is required to be completed for provision of legitimate facility to the common people of Odisha in the new Railway alignment of Khurda- Bolangir Section. The progress of the work in the Section is regularly discussed in Pro-Active Governance And Timely Implementation (PRAGATI) and Project Monitoring Group (PMG) meeting. State Government and Central Government Authorities are monitoring the progress of the Project on regular frequency for timely completion of the Project. All the major infrastructure Projects in India are deliberated in the National Infrastructure Pipeline (NIP) portal of India. Railway Board, vide letter dated 30.09.2021, instructed East Coast Railway to upload monthly data on the portal for monitoring the progress of the Project by Prime Minister Office, Ministry of Finance // 17 // and Ministry of Railways. Khurda Road-Bolangir New Broad Gauge Line Project appears at Project ID No.705358. Therefore, to expedite the work and complete the same timely, steps have been taken by Opposite Party Nos. 1 to 8 by floating E-Tender Documents by the East Coast Railway through Opposite Party No.6, inviting bid from the eligible Bidders for the work "Modification of Power line crossings (33 KV/ 11 KV/ LT) between Sonepur to Boudh Railway Station in connection with new line between Khurda Road-Bolangir Project". In response to such E-Tender Notice, nine Bidders, including the Petitioner and Opposite Party No.9, participated in the Bid. Opposite Party No.9, being L6, his bid has been accepted, though the Petitioner was L4, its offer was treated as non- compliant and therefore bypassed. The reason for non- acceptance of the offer submitted by the Petitioner being L4 is well justified, as has been revealed from the documents placed on record by the parties.
// 18 //
8. For a just and proper adjudication of the case, it is profitable to mention, Annexure-I deals with Tender Form (Second Sheet), wherein Clause-1 deals with Instruction to Tenderers and Conditions of Tender, whereas Clause-2 deals with Drawings for the Work. Clause-3 and Clause-4.2 read as follows:-
"3. The Tenderer (s) shall quote his/their rates as a percentage above or below the Schedule of Rates of East Coast Railway as applicable to Engineer Department (Construction) except where he/they are required to quote item rates and must tender for all the items shown in the Schedule of approximate quantities attached. The quantities shown in the attached Schedule are given as a guide and are approximate only and are subject to variation according to the needs of the Railway. The Railway does no guarantee work under each item of the Schedule. The tenderer(s) shall quote rates/rebates only at specified place in Tender Form supplied by Railway. Any revision of rates/rebates submitted (quoted) through a separate letter whether enclosed with the bid (Tender Form) or submitted separately or mentioned elsewhere in the document other than specified place shall be summarily ignored and will not be considered.
3.1 In addition to check list given in E-Tender Document under 'Compliance' the tenderer should check once more on important items as under:
(i) Whether the tender offer is accompanied by Power of Attorney and it is accepted by Power of Attorney holder.
(ii) Whether the details submitted in required format duly signed by tenderer and Chartered Accountant as in Annexure-C, G & GI.
// 19 //
(iii) Whether all other mandatory documents uploaded without which tender offer is to be summarily rejected or is liable to be rejected.
xxx xxx xxx
4.2 While submitting offers the tenderer(s)
generally commit mistakes in submitting the mandatory documents like Certificates regarding contracting experiences, Audited Balance Sheet duly certified by the Chartered Accountant, Certificate in respect to true and factually of documents, information in connection with evaluation of bid capacity, Power of Attorney, submission of tenders by authorized signatory , JV submitting his/their offer and accordingly upload all the mandatory documents and other relevant documents as per the formats annexed in the tenderer document.
The tender shall be finalized based on submitted documents & no post tender correspondence shall be entertained. However, if any clarification is required, the Railway at its discretion may sought such clarification from the Tenderers.
The Railway's request for clarification and the response of the contractor shall be in writing. No change in substance of the Bid shall be sought, offered or permitted except required clarification needed by Railway during evaluation. If the Bidder does not provide clarification of its Bid by the date and time set in the Railway's request for clarification then his /their offer(s) shall be dealt based on available information with Railways interpretation only."
8.1 Clasue-10 deals with Eligibility Criteria and Clause-10.1 deals with Technical Eligibility Criteria. Clause-10.2 deals with Financial Eligibility Criteria, // 20 // Clause-10.3 deals with Bid Capacity. Clause-11, which deals with Tender Credentials, reads as follows:-
"11. Tenderer Credentials:-
Documents testifying tenderer previous experience and financial status should be produced along with the tender.
Tenderer(s) who is /are not borne on the approved list of the Contractors of East Coast Railway shall submit along with his /their tender:
(i) Certificates and testimonials regarding contracting experience for the type of job for which tender is invited with list of works carried out in the past.
(ii) Certificates which may be an attested Certificate from the client, Audited Balance Sheet duly certified by the Chartered Accountant etc regarding contractual payments received in the past.
(iii) The list of personnel/organization on hand and proposed to be engaged for the tendered work.
Similarly list of Plant & Machinery available on hand proposed to be inducted and hired for the tendered work.
(iv) A copy of certificate stating that they are not liable to be disqualified and all their statements/documents submitted along with bid are true and factual. Standard format of the certificate to be submitted by the bidder is enclosed as Annexure-III, Chapter-2. Non submission of a copy of certificate by the bidder shall result in summarily rejection of his/their bid. It shall be mandatorily incumbent upon the tenderer to identify state and submit the supporting documents duly self-attested by which they/he are/is qualifying the Qualifying Criteria mentioned in the Tender Document.
// 21 //
(v) The Railway reserves the right to verify all statements, information and documents submitted by the bidder in his tender offer, and the bidder shall, when so required by the Railway, make available all such information, evidence and documents as may be necessary for such verification. Any such verification or lack of such verification, by the railway shall not be relieve the bidder of its obligation or liabilities hereunder nor will it affect any rights of the Railway there under.
(vi) (a) In case of any information submitted by tenderer is found to be false forged or incorrect at any time during process for evaluation of tenderers, it shall be lead to forfeiture of the tender Earnest Money Deposit besides banning for a period of up to five years.
(vii) (b) In case of any information submitted by tenderer is found to be false forged or incorrect after the award of contract, the contract shall be terminated. Earnest Money Deposit (EMD), Performance Guarantee and Security Deposit available with the railway shall be forfeited. In addition, other dues of the contractor, if any, under this contract shall be forfeited and agency shall be banned for doing business for a period of up to five years." 8.2 Clause-12 stipulates that "Non-compliance with any of the Conditions set forth therein above is liable to result in the tender being rejected".
// 22 // 8.3 Clause-14 deals with documents to be submitted along with Tender. Clause-14 (ii) reads as follows:-
"14. Documents to be submitted along with tender:-
(i) xxx xxx xxx
(ii) Following documents shall be submitted by the tenderer:
a) Sole Proprietorship Firm:
i. An undertaking that he is not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in tender on the date of opening of bids, either in individual capacity or as a member of the partnership firm or JV in which he was /is a partner/member. Concealment /wrong information in regard to above shall make the contract liable for determination under Clause 62 of the General Condition of Contracts.
ii. All other documents in terms of explanatory notes in clause 10 above."
9. In view of the Railway Board letter dated 13.08.2022, the Tender with advertised value of less than Rs.10 Crore, is to be invited as a "Single Packet Tender"
and with value of more than Rs.10 Crore is to be invited as "Two Packet Tender". Admittedly, the advertised value of the instant Tender, being Rs.5 Crore 67 Lakhs, it is a // 23 // Single Packet Tender. There is no separate Technical and Financial Bid to be opened. Rather, both Technical and Financial Offer are to be opened simultaneously. The tabulation has to be made as per offered rate of the Tenderers and marked as L1, L2, L3 etc., as per offered rate in increasing order. Accordingly, the Tender Committee has to scrutinize and verify the submitted documents/ credentials to check the fulfillment of technical eligibility criteria and other mandatory criteria of the offers, and financial offers of technically qualified bidders have to be scrutinized/adjudged for the rate reasonability of offered rate.
10. In the Indian Railways E-Procurement System, which has been annexed as Annexure-B/1, while evaluating the bids submitted by the Bidders, it has been specifically mentioned in Clause-1, under NIT Header, that Bidding Type is Normal Tender, Tender Type-Open and Bidding System-Single Packet System. The date and time of uploading Tender was mentioned as 19/05/2021 16.55.
// 24 // Under Clause-5, the heading is "Compliance" and under that heading 'Check List' was provided and then provided 'Commercial-Compliance'. At Sl. Nos.3 and 5 of the 'Commercial-Compliance', it has been provided as follows:-
Sl. No. 3 Please submit details of the constitution of the Firm (Proprietary Firm or Partnership Firm)/HUF/ Company Registered under Companies Act-
2013/ Limited Liability Partnership Firm registered under LLP Act- Yes No Allowed 2008/Joint venture (Mandat (JV)/Registered Society & ory) Registered Trust etc along with duly filled up Annexure-A, Chapter -7 of the Annexed Document and also enclose the supporting documents such as copy of Partnership Deed, Power of Attorney, PAN Card, Memorandum of Articles of Association, Authorisation, Certificate of Incorporation, Certificate of Registration Deem of Formation, Memorandum of Understanding, JV Agreement.(For details please refer Clause 14,15&17 of Annexure-I & Chapter -2 of Annexed Document). In reference to // 25 // Clause 14, Chapter-2 of Annexed Document submit an under taking regarding not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in tender on the date of opening of bids. Concealment/wrong information in regard to above shall make the contract liable for determination under Clause 62 of the General Conditions of Contract.
5 Please submit the
certificates regarding
contractual payments
received along with duly
filled up Annexure-C,
Chapter -7 of Annexed
Document, to this effect
which may be an attested
Certificate from the Yes No Allowed
concerned (Mandat
department/client or ory)
Audited Balance Sheet
duly certified by the
Chartered Accountant/
Certificate from Chartered
Accountant duly
supported by Audited
Balance Sheet. Client
Certificate from other than
Govt. Organisation should
be duly supported by
Form 16A/26AS
generated through
TRACES of Income Tax
Department of India. Non-
compliance with this
condition liable to result in
the tender being rejected.
// 26 //
11. Under Clause-3.1 of Annexure-I, i.e., Tender Form (Second Sheet), it has been provided that in addition to Check List given in E-Tender Document under 'Compliance', the Tenderer should check once more on important items, namely, whether all other mandatory documents uploaded without which Tender offer is to be summarily rejected or is liable to be rejected. Therefore, Clause-14 (ii) (a) requires the Sole Proprietorship Firm to provide an undertaking that it is not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in Tender on the date of opening of the bid, either in individual capacity or as a Member of Partnership Firm or JV in which he was/is a Partner/Member. Concealment/ wrong information in regard to above shall make the contract liable for determination under Clause-62 of the General Conditions of Contract. Further, Clauses-4.1 and 4.2 require the Tenderer to submit the documents and, as such, the Tenderer should go through the documents very carefully before submitting his or their offer and accordingly, upload // 27 // all the mandatory documents and other relevant documents as per the formats annexed to the Tender Document. It is also specifically mentioned that the Tender shall be finalized based on submitted document and no post Tender correspondence shall be entertained. However, if any clarification is required, the Railway at its discretion may sought such clarification from the Tenderers. Therefore, the submission of undertaking being mandatory, for non-compliance thereof, the offer submitted by the Petitioner is considered as non-compliant and bypassed.
12. As required under Clause-11 (ii) of Annexure-I, the documents ought to have been duly countersigned by the Chartered Accountant. However, though the document has been signed by the Tenderer, but the same has not been verified and counter signed by the Chartered Accountant along with seal, which is made available on record under Annexure-F/1, at Page-131 of the brief. Thereby, Clause-11 (ii) of the Tender Document has not // 28 // been complied with. Much reliance has been placed on the decision of the Tender Committee, where under Clause-6.4 at Page-141, the case of the Petitioner has been considered. Under Sl. Nos. 4 and 6, it has been stated as follows:-
"6.4. M/s. Jyotin Kumar Sahoo.
4. Please submitted details of Proprietorship form at the constitution of the Firm F/1074,GST (Proprietary Firm or Registration Partnership Certificate at F/ 1070-
Firm)/HUF/Company 1072
Registered under Company
PAN Card at F/1133
Act-2013/Limited Liability
Partnership Firm registered
under LLP Act-2008/Joint
Venture (JV)/Registered
Society/Registered Trust
etc. vide Annexure-
A,Chapter-7 of the Annexed
Document and also enclose
the supporting documents
such as copy of Partnership
Deed, Power of Attorney,
PAN Card , Memorandum of
Article/Articles of
Association Authorization,
Certification of Undertaking not
Incorporation, Certificate of submitting regarding
Registration, Deem of not blacklisting/not
Formation, Memorandum of debarring of the firm
Understanding, JV by Railways or any
Agreement, Undertaking other Ministry
// 29 //
regarding not blacklisting /Department of Govt.
/not debarring of the firm of India/any state
by Railways or any other Govt. on the date of
Ministry/Department of opening etc. as
Govt. of India / any State applicable as per the
Govt. on the date of opening tender conditions.
etc. as applicable as per the This is one of the tender conditions. mandatory condition which the tenderer failed to submit.
6 Please submit the certificate Submitting Annexure-
as per Annexure-C, Chapter C without certified by
-7 of Annexed Document CA, at
which may be an attested F/1130,regarding
Certificate from the client, contractual payments
Audited Balance Sheet duly received from 2018-
certified by the Chartered 19,2019-20,2020-21
Accountant etc. regarding and current financial
contractual payment year. Also submitted
received. Non-compliance Audited balance sheet
with this condition liable to at F/1100-1108. result in the tender being rejected.
13. Though at Page-143 of the brief, it has been mentioned that the Petitioner has completed one similar work each costing more than the amount equal to 60% of advertised value of the Tender work under Sl. No.1 and hence, fulfils the technical eligibility criteria and also fulfils the financial eligibility criteria laid down for the instant // 30 // Tender, but the Technical Committee has come to a finding to the following effect.
"In view of above discussion T.C has noted that the tenderer has failed to submit the undertaking regarding not blacklisting/not debarring of the firm by Railways or any other Ministry/Department of Govt. of India /any State Govt. on the date of opening etc. as applicable as per the tender conditions. This is one of the mandatory conditions. Hence the offer is considered as invalid due to non compliance of mandatory documents & the offer is passed over."
14. Therefore, the Technical Committee, on analyzing the documents filed by the Petitioner, has come to a finding that though the Petitioner qualified in Technical as well as Financial Bid, but the offer made by him is non-compliant and, therefore, he has been bypassed, as mentioned above. Not only in the case of the Petitioner such a disqualification has been recorded, but in case of M/s Sarala Engineering Works, which is one of the Bidders, its Tender has also been rejected on the similar ground, though it fulfills the technical and financial eligibility criteria laid down in the instant Tender, with the following observation:-
// 31 // "In view of the above, T.C. has noted that the tenderer has not submitted undertaking regarding not/blacklisting/not debarring of the firm by Railways or any other Ministry / Department of Govt. of India/ any state Govt. on the date of opening etc. as applicable as per the tender condition. This is one of the mandatory conditions which the tenderer failed to submit. Thus the tenderer is found ineligible. Hence the offer is passed over."
15. In view of the aforesaid reasons, if the Bid of the Petitioner has been rejected by the Tender Committee on the ground of non-compliance of the Tender conditions, by thoroughly analyzing and scrutinizing each of the conditions mentioned in the Tender Document, as discussed above, by holding that the offer made by the Petitioner is non-compliant and, therefore, bypassed. Hence, it cannot be held that the Authorities have acted arbitrarily, unreasonably and contrary to the provisions of law.
16. The Petitioner heavily relied upon the legal maxim "expressio unius est exclusion alterius" which means to express one is to exclude others. This Principle has been thoroughly misconstrued and, as such, the // 32 // Petitioner cannot take shelter of such expression when it could not satisfy the requirement of the Tender Document itself.
17. Much reliance has been placed in the case of Hukam Chand Shyam Lal (supra), wherein the apex Court, relying upon the judgment of Taylor v Taylor, (1875) LR I Ch D 426, which was subsequently followed by Lord Roche in Nazir Ahmad v. King Emperor, AIR 1936 PC 253(2), observed that where power is required to be exercised by a certain Authority in a certain way, it should be exercised in that manner or not at all, and all other modes of performance are necessarily forbidden. This Principal has no assistance to the Petitioner. Rather, it supports the case of the Opposite Parties, as has been discussed above.
18. In Harinarayan G. Bajaj (supra), the apex Court discussed about the Principle that Rule gives the Defaulters' Committee limited powers to call in and realize
(i) security deposits (ii) margin money (iii) other amounts // 33 // lying to the credit of the defaulting member and (vi) securities deposited by the Defaulting Member. The Defaulting Committee has also the right to recover all moneys, securities and other assets, due, payable or deliverable to the defaulters by any other Trading Member. By expressly providing for these powers in the Committee, it would follow that other powers are excluded on the Principle "expressio unius est exclusio alterius". As has been already stated earlier, this Principal has no application to the present case.
19. Similarly, the decision in the case of Krushna Chandra Sahoo (supra), as relied upon by the Petitioner, has no application to the present case.
20. Much reliance has been placed by the learned Counsel for the Petitioner on Poddar Steel Corporation (supra), stating that Clause-14 of the Tender Document, being merely an ancillary/subsidiary condition with the main object sought to be achieved under the Tender document, non-compliance of the requirement made // 34 // thereunder cannot stand on the way of the Petitioner to be awarded with the Work. This contention cannot be taken into consideration, as Clause-14 itself is a mandatory requirement, in terms of Clasues-3.1 and 4.2 of the Tender Document. Therefore, it cannot be said that these are the essential conditions, which can be given less weighatage. Thereby, the reliance placed on the judgment mentioned supra, wherein it has been held that the requirement in a Tender Notice can be classified into two categories, such as those which lay down the essential conditions of eligibility, and the other which are merely ancillary or subsidiary with the main object to be achieved by the condition, and that in the first case the Authority issuing the Tender may be required to enforce them rigidly and in the other case it must be open to the Authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate case, cannot have any application to the present Petitioner.
// 35 //
21. In M/s. Agmatel India Pvt. Ltd. (supra), the apex Court at Paragraphs 16 and 17 of the judgment observed as follows:-
"16. The scope of judicial review in contractual matters, and particularly in relation to the process of interpretation of tender document, has been the subject matter of discussion in various decisions of this Court. We need not multiply the authorities on the subject, as suffice it would be refer to the 3-Judge Bench decision of this Court in Galaxy Transport Agency (supra) wherein, among others, the said decision in Afcons Infrastructure Limited (supra) has also been considered; and this Court has disapproved the interference by the High Court in the interpretation by the tender inviting authority of the eligibility term relating to the category of vehicles required to be held by the bidders, in the tender floated for supply of vehicles for the carriage of troops and equipment. This Court referred to various decisions on the subject and stated the legal principles as follows: -
"14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818, this Court held:
"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 // 36 // 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." (page 825) (emphasis supplied)
15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha 2020 SCC OnLine SC 335, under the heading "Deference to authority's interpretation", this Court stated:
"51. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes.
52. In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818)
53. The High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL's interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a // 37 // finding that the appellant committed illegality." (emphasis supplied)
16. Further, in the recent judgment in Silppi Constructions Contractors v. Union of India, 2019 SCC OnLine SC 1133, this Court held as follows:
"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
(emphasis supplied)
17. In accordance with these judgments and noting that the interpretation of the tendering authority in this case cannot be said to be a perverse one, the Division Bench ought not to have interfered with it by giving its own interpretation and not giving proper credence to the word "both" appearing in Condition No. 31 of the N.I.T. For this reason, the Division Bench's conclusion that JK Roadways was wrongly declared to be ineligible, is set aside."
// 38 //
22. In N.G. Projects Limited (supra), the apex Court at Paragraph-23 of the judgment observed as follows:-
"23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present- day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work."
23. In RKD-CMRGS Joint Venture (supra), this Court at Paragraph-30 of the judgment held as follows:-
"30. In the fact situation obtaining in the case, decision of the opposite party in respect of the technical bid of the petitioner as non- responsive can // 39 // neither be said to be mala fide or intended to favour someone. It cannot be termed to be so arbitrary or irrational which no responsible body of person acting under law could have arrived at. It is settled proposition of law that when power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. If as per conditions of the NIT, bid security in the case of tender submitted by JV was required to be given wholly either by the JV or the lead partner, the bidder ought to submit bid accordingly and not in any other manner. It is trite that words used in the tender documents as conditions for acceptability of technical bid have to be construed in the way the Employer has used them while formulating such terms and conditions. Whether a particular condition is essential or not is a decision to be taken by the Employer. The tender inviting authorities have to be given free hands in the matter of interpretation of conditions of the tender. No words in the tender documents can be treated surplusage or superfluous or redundant. Their decision has to be respected by the court unless it is shown to be ex- facie arbitrary, outrageous, and highly unreasonable. If non-submission of a compliant bid security as per mandatory conditions of the terms of the NIT, results in tender of the bidder being rendered non- responsive, the court cannot substitute the opinion of the Employer by its own unless interpretation of such condition by the tender inviting authority suffers from mala fides or perversity."
24. In Montecarlo (supra), the apex Court at Paragraphs- 34, 35 and 48 of the judgment observed as follows:-
"34. Even otherwise it is required to be noted that once a conscious decision was taken by the JICC and JICA, who can be said to be the author of the terms and conditions of the tender document, taking a view // 40 // and stand that the Bid submitted by the original writ petitioner suffers from material deviation and the said decision was taken after considering the relevant clauses of the ITB, thereafter it was not open for the High Court to interfere with such a conscious decision in exercise of powers under Article 226 of the Constitution of India and take a view that the Bid submitted by the original writ petitioner was in substantial compliance.
35. As observed hereinabove, there are as such no allegations of mala fides and/or favouritism at all. Therefore, the High Court has erred in holding that the Bid submitted by the original writ petitioner was in substantial compliance. Whether the Bid submitted by a Bidder suffers from any material deviation and/or any substantial deviation should be left to the author of the Bid document and normally, the High Courts, in exercise of the powers under Article 226 of the Constitution of India, should not interfere with the same unless such a decision is found to be mala fide and/or there are allegations of favouritism and/or such a decision is arbitrary.
xxx xxx xxx
48. Even while entertaining the writ petition and/or granting the stay which ultimately may delay the execution of the Mega projects, it must be remembered that it may seriously impede the execution of the projects of public importance and disables the State and/or its agencies/ instrumentalities from discharging the constitutional and legal obligation towards the citizens. Therefore, the High Courts should be extremely careful and circumspect in exercise of its discretion while entertaining such petitions and/or while granting stay in such matters. Even in a case where the High Court is of the prima facie opinion that the decision is as such perverse and/or arbitrary and/or suffers from mala fides and/or favouritism, while entertaining such writ petition and/or pass any appropriate interim order, High Court may put to the writ petitioner's notice that in case the petitioner loses and there is a delay in execution of the project due to // 41 // such proceedings initiated by him/it, he/they may be saddled with the damages caused for delay in execution of such projects, which may be due to such frivolous litigations initiated by him/it. With these words of caution and advise, we rest the matter there and leave it to the wisdom of the concerned Court(s), which ultimately may look to the larger public interest and the national interest involved."
25. In Central Coalfields Ltd. (supra), the apex Court at Paragraphs-43, 48, 49 and 54 of the judgment observed as follows:-
"43. Continuing in the vein of accepting the inherent authority of an employer to deviate from the terms and conditions of an NIT, and re-introducing the privilege-of-participation principle and the level playing field concept, this Court laid emphasis on the decision making process, particularly in respect of a commercial contract. One of the more significant cases on the subject is the three-judge decision in Tata Cellular v. Union of India6 which gave importance to the lawfulness of a decision and not its soundness. If an administrative decision, such as a (1994) 6 SCC 651 deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the Courts will not judicially review the decision taken. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. This was quite clearly stated by this Court (following Tata Cellular) in Jagdish Mandal v. State of Orissa7 in the following words:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice // 42 // or decision 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 tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and (2007) 14 SCC 517 succour to thousands and millions and may increase the project cost manifold."
This Court then laid down the questions that ought to be asked in such a situation. It was said in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517:-
"22......... Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say:
"the decision is such that no responsible authority // 43 // acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226."
xxx xxx xxx
48. Therefore, whether a term of the NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot.
49. Again, looked at from the point of view of the employer if the Courts take over the decision-making function of the employer and make a distinction between essential and non-essential terms contrary to the intention of the employer and thereby re-write the arrangement, it could lead to all sorts of problems including the one that we are grappling with. For example, the GTC that we are concerned with specifically states in Clause 15.2 that "Any Bid not accompanied by an acceptable Bid Security/EMD shall be rejected by the employer as non-responsive." Surely, CCL ex facie intended this term to be mandatory, yet the High Court held that the bank guarantee in a format not prescribed by it ought to be accepted since that requirement was a non-essential term of the GTC. From the point of view of CCL the GTC has been impermissibly re-written by the High Court.
xxx xxx xxx
// 44 //
54. In this context, and in the present times, it is important to note that the World Bank has ranked India extremely low in matters relating to enforcement of contracts and ease of doing business. Out of 189 countries worldwide, India is ranked 178 in the matter of enforcement of contracts and 130 in the matter of ease of doing business11. One of the possible reasons for this extremely low ranking given to our country is the failure of all parties concerned in strictly adhering to the terms of documents such as the NIT and the GTC. In so far as the present case is concerned, the NIT was floated on 5th August, 2015 and one year later, we are still struggling with the issue of acceptance of a bank guarantee for a contract of about Rs. 2000 crores - certainly not a small sum."
26. In view of the fact and law, as discussed above, this Court is of the considered view that the communication made to the Petitioner vide Annexure-4, dated 17.08.2021, holding that "the Petitioner has not submitted undertaking regarding not blacklisted or debarred by Railways or any other Ministry/Department of Govt. of India from participation in Tender on the date of opening of the bids, which is mandatory document to be submitted in the Tender offer and, as such, the offer has been considered as non-complaint and bypassed", is well justified. Thus, this Court is not inclined to interfere with the same.
// 45 //
27. In the result, the Writ Petition merits no consideration and the same stands dismissed. There shall be no order as to costs.
..............................
DR. B.R. SARANGI,
JUDGE
S.K. MISHRA, J. I agree.
..............................
S. K. MISHRA,
JUDGE
Orissa High Court, Cuttack
The 17th August, 2022, Arun/GDS