Gauhati High Court
Page No.# 1/35 vs The State Of Assam And 5 Ors on 4 February, 2025
Author: Devashis Baruah
Bench: Devashis Baruah
Page No.# 1/35
GAHC010152202024
2025:GAU-AS:1131
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/3832/2024
MAHALAXMI ENTERPRISES
H.NO. 2, CHITRABAN PATH, KALYANI NAGAR, KAHILIPARA, GUWAHATI-
781029 REPRESENTED THROUGH ITS PROPRIETOR, SURYA SAIKIA, AGED
ABOUT 40 YEARS, S/O- ANIL SAIKIA, C/O MAHALAXMI ENTERPRISES
VERSUS
THE STATE OF ASSAM AND 5 ORS
REPRESENTED BY THE PRINCIPAL SECRETARY TO THE GOVERNMENT OF
ASSAM, ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT, DISPUR,
GUWAHATI- 781006
2:THE COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF
ASSAM
ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT
DISPUR
GUWAHATI- 781006
3:THE DIRECTOR OF ANIMAL HUSBANDRY AND VETERINARY
DEPARTMENT
CHENIKUTHI
GUWAHATI- 781003
KAMRUP (METROPOLITAN)
ASSAM
4:M/S BIOCARE ASSOCIATES
HOUSE NO. 12
H.M. DAS ROAD
REHABARI
GUWAHATI- 781008
ASSAM
Page No.# 2/35
5:M/S RAJA ENTERPRISES
PANJABARI
BOTAHGULI
GPS ROAD
H/NO. 211
NEAR GANESH MANDIR
GUWAHATI- 781037
ASSAM
6:M/S SUNRISE TRADERS
RUKMININAGAR
GUWAHATI- 78100
For the Petitioner(s) : Mr. D. Das, Senior Advocate
Mr. B. Gogoi, Advocate
For the Respondent(s) : Ms. M.M. Kataky, Standing Counsel
Date of Hearing : 04.02.2025
Date of Judgment : 04.02.2025
BEFORE
HONOURABLE MR. JUSTICE DEVASHIS BARUAH
JUDGMENT AND ORDER (ORAL)
The decision to cancel the tender process and to go ahead with the fresh tender process is the subject matter of consideration before this Court in the present writ petition.
2. Heard Mr. D Das, the learned Senior Counsel assisted by Mr. B Gogoi, the learned counsel appearing on behalf of the petitioner and Ms. M.M. Kataky, the learned Standing Counsel appearing on behalf of the Animal Husbandry and Veterinary Department of the Government of Assam.
3. None has appeared on behalf of the private respondent Nos. 4, 5 and 6, although due notice was affected upon them.
4. The facts leading to the filing of the instant writ petition are narrated infra.
The Director of Animal Husbandry and Veterinary Department floated an Page No.# 3/35 e-Tender dated 13.02.2024 in the GeM portal for procuring 367 Nos. of Ice Lined Refrigerators (ILR). The said notice inviting tender stipulated that the last date for submission of the tender was on 05.03.2024 by 12 P.M. and the date and time for bid opening was on the same date at 12.30 P.M. It was also mentioned that the time allowed for technical clarification during the technical evaluation was 2(two) days and the evaluation method prescribed was very formal "Total Value-wise Evaluation"
5. Before further narrating on the aspect of the tender process, it would be relevant to take note of that the said tender process was initiated on a sponsored scheme of the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying. This aspect of the matter is clear from the communication dated 28.03.2022 issued by the Joint Secretary of the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying. In the said communication, it was categorically mentioned that a guidance document had been prepared for model infrastructure specifications so as to enable their procurement for optimal utilization within the budget sanctioned. It was also mentioned that eventually based on the requirement at various levels- districts, blocks, villages, States/UTs may strategize procurement and placement of these equipments. The advisory enclosed to the said communication as an Annexure specifically dealt with the Ice Lined Refrigerators (ILR) of the size and its description. The commercial terms were also mentioned in the said advisory. In terms with Clause 1.6 of the commercial terms, it was mentioned that the cold chain products may be tested at ISO-17025 accredited laboratories.
6. In the backdrop of the above, it is now relevant to take note of the tender conditions. To the said tender conditions, there is a Specific Additional Terms Page No.# 4/35 and Conditions wherein the technical specifications of the Ice Lined Refrigerators (ILR) have been duly mentioned. Further to that, the eligibility for participating in the bid/tender had also been mentioned in the Specific Additional Terms and Conditions. Amongst the various conditions for eligibility for participating in the bid/tender, it was mentioned that the cold chain products may be tested at ISO-17025 accredited laboratories which was in tune with the advisory issued by the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying. This Court further finds it relevant to take note of the Check List which was a part of the Specific Additional Terms and Conditions. The Check List was both for Original Equipment Manufacturer (OEM) as well as for authorized dealers/agents/distributors etc. In Clause 6 of the Checklist for Original Equipment Manufacturer (OEM), the Product Tested Certificate at ISO-17025 approved laboratories / WHO PQS Code was mentioned. Similarly in the case for authorized dealers/agents/distributors etc. at Sl.No.7, the Product Tested Certificate at ISO-17025 approved laboratories /WHO PQS Code was mentioned.
7. Before further proceeding, this Court further finds it relevant to again refer to the communication dated 28.03.2022 issued by the Joint Secretary of the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying, wherein it was categorically mentioned that any deviation from the specifications so given to the enclosed document i.e. the Annexure referred to above, would require prior approval from the Department along with proper justification.
8. The records further reveals that pursuant to the notice inviting tender being issued, there were certain requests made by the prospective bidders as Page No.# 5/35 regards the specification of the product. It is further seen from the records that during the period from 13.02.2024 to 16.02.2024, some of the bidders submitted request when the e-Tender window was kept open as per the norms seeking change of the product testing certificate criteria from ISO-17025 approved laboratories to WHO-PQS prequalified with valid PQS Code.
9. The record further reveals that on 02.03.2024, on the basis of the said request submitted, a remark was made in the GeM portal wherein it was mentioned "product compliance is modified to WHO-PQS prequalified with valid PQS Code standards for ILR." A question however arises as to whether this remark so made would amount to modification of the eligibility conditions which this Court will deal with at the later stage of the instant judgment.
10. Be that as it may, 10 (ten) bidders duly submitted their bids on or before 05.03.2024. Immediately thereafter, on 08.03.2024 the petitioner had also issued a communication to the effect that this modification of the terms, thereby making compliance with WHO-PQS Code mandatory requires issuance of a corrigendum. Be that as it may, the Respondent Authorities in spite of receipt of the said communication proceeded with the tender process and on 13.03.2024, the technical bid was evaluated and upon such evaluation it was found that out of the 10 bidders, 4 were technically qualified including the writ petitioner.
11. The Court has also perused the records as produced by Ms. M.M. Kataky, the learned Standing Counsel of the Animal Husbandry and Veterinary Department wherein the comparative statement is a part of the records. It is seen from the said comparative statement that bidders namely Criticare Systems, Krish Biomedicals, Leisure Lane, Narang Scientific Works Private Page No.# 6/35 Limited and the Engineering Science Apparatus Workshop did not submit the EMD of Rs.12,46,000/- in the manner provided in the NIT. It is also seen that another bidder, namely M/S. Agam Pharmaceuticals did not submit the document pertaining to certification by the manufacturer as regards compliance with IEC 60335-1 and IEC 60335-2 and 24 from the WHO certified labs. In addition to that, it is also seen that except 3 other bidders who have been held to be responsive, all other bidders did not submit the product tested certificate at WHO-PQS Code including the petitioner. Be that as it may, in the technical evaluation carried out on 13.03.2024, the petitioner along with the 3 bidders namely M/S. Bio Care Associates, M/S. Raja Enterprise and Sunrise Trader were held to be technically responsive and thereupon the financial bids were to be open.
12. The records so produced further reveal that the financial bid was opened on 15.03.2024 and the petitioner herein was found to be the lowest bidder. It is further seen that pursuant thereto a representation was filed by a stranger to the bidding process wherein it was mentioned that as per the representation on the GeM, the technical specification of the standards was modified to the WHO- PQS prequalified with valid PQS Code. It was further mentioned that in the technical evaluation of the Assam Animal Husbandry bid, the petitioner herein was qualified though Rockwell Ice Lined Refrigerator was not listed in the WHO- PQS website neither it had a valid PQS Code. It was further mentioned that the act of deciding that the petitioner was technically responsive was without proper certification being checked and therefore requested for intervention so that the compliance related to technical specification of the Ice Line Refrigerator (ILR) is ensured for the tender.
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13. The above stated communication which was sent by one Shri Mayank Singh on behalf of Tata Voltas Limited was forwarded to the Director, Animal Husbandry and Veterinary to examine the issue and submit a detailed report. On the basis thereof, a detailed report was submitted by the In-charge/Director cum CEO of the Animal Husbandry and Veterinary Department. It was mentioned that as per the extant requirement of the ATC technical specification, the petitioner should have been listed as non responsive. It was further mentioned that after thread bare discussion, the participants of the meeting realized that due to an oversight by considering the WHO-PQS E003 Code optional (original specification as per the bid document) which was made mandatory later on, the Technical Evaluation Committee recommended the petitioner as responsive instead of non responsive and the same was uploaded in the GeM portal which led to selection of the petitioner as the L1 bidder.
14. The records so produced further reveal that thereafter also there were various other complaints being made. It is very relevant to take note of a document issued by the Rockwell Industries Ltd., who were the OEM of the petitioner dated 15.06.2024 addressed to the Director of Animal Husbandry and Veterinary wherein it was categorically mentioned that the Ice Line Refrigerators (ILR) of Rockwell Industries Ltd. are fully compliant with the World Health Organization, WHO/PQS/E003/RF03.5 product specification and its verification protocol E003/RF03-VP.4. It was further mentioned that the products of Rockwell Industries ensures that the Ice Line Refrigerators (ILR) meet the highest standards of performance, quality and safety. It was also mentioned that Rockwell Industries Limited have not undertaken the process to get the ILRs enlisted in the WHO/PQS catalogue as their export to the UNICEF sponsored procurement countries is negligible. It was further mentioned that Page No.# 8/35 M/s. Voltas had submitted its bids through M/S. Biocare Associates who is the L2 bidder. The Model No. VLS 504 AC (Vesfrost make) quoted by M/s Biocare Associates is also not listed in the WHO PQS catalogue and it is not sure as to whether it is in compliance with WHO PQS protocol E003/RF03-VP.4.
15. On 22.07.2024, all the technically responsive bidders were asked to attend the meeting which was scheduled on 25.07.2024 at 11:00 A.M. in the Office of the Principal Secretary to the Government of Assam, Animal Husbandry and Veterinary Department. On the very date, the following decision was taken as recorded in the minutes of the meeting:
1. The procedure of the bidding process of the Ice Lined Refrigerator (ILR) was vitiated within the department.
2. Appropriate internal action to be initiated to avoid such occurrence in future.
3. Non serious bidders vitiating the tender process to be debarred from participating after carefully studying their pass track record.
16. In view of the said decision taken on 25.07.2024, it was decided that the entire bid process would be cancelled and to move for fresh tenders. Being aggrieved, the present writ petition was filed on 29.07.2024.
17. The records of the present writ proceedings reveal that this Court vide an order dated 31.07.2024 while issuing notice directed maintenance of status quo in relation to the e-Tender notice dated 13.02.2024. The interim order thereupon has been continuing since then till date.
Page No.# 9/35
18. The records reveal that an affidavit-in-opposition was filed by the respondent Nos. 1, 2 and 3. In the said affidavit-in-opposition, the facts which are apparent from the records as already mentioned herein above have been detailed out. In addition to that, the affidavit-in-opposition discloses the reason as to why the Respondent Authorities seeks to annul the earlier tender process and to go ahead with the fresh tender.
19. It was mentioned in the affidavit-in-opposition that the request made by the bidders during the specified 4 (four) days w.e.f. 13.02.2024 to 16.02.2024 when the e-Tender window was open as per the norm seeking change of the product testing certification criteria from ISO-17025 approved laboratories to WHO- PQS prequalified with valid PQS Code was accepted and the product compliance was amended from ISO-17025 to WHO-PQS pre qualified with valid PQS Code standard for ILR and uploaded under the remark column. It was mentioned that the requirement of the WHO-PQS certification for refrigerator became mandatory after the amendment. All the bidders thereafter submitted the bids online including the petitioner. It was further mentioned that the petitioner's representation dated 08.03.2024 was considered which dealt with reverting the WHO-PQS E003 Code to optional again wherein the party had claimed their product compliant to this standard. It was also mentioned that later on it was found that in the WHO-PQS website, the quoted product of Rockwell Industries Ltd. was not enlisted with a valid WHO-PQS Code. Further to that, letters were issued on 11.03.2024 to the other 3(three) technically responsive bidders namely M/S Bio Care Associates, M/S. Raja Enterprise and Sunrise Trader by seeking their consent to modify WHO-PQS E003 Code from mandatory to optional again. These 3 (three) bidders had Manufacturer's Authorization Certificate from Tata Voltas Limited to take part in the bidding Page No.# 10/35 process with a valid WHO-PQS E003 Code and these 3 (three) bidders gave consent to alter the WHO-PQS E003 Code to optional again. On the basis thereof, the Tender Committee decided to re-evaluate the technical bid on the basis of the representation received from the petitioner and the 3 (three) consent letters received from the other 3 (three) responsive bidders. The Respondents further stated that it was decided that the technical specification of a mandatory WHO-PQS E003 Code would be made optional in order to have a wider participation. However, to do so, the Tender Committee faced a difficulty as the Technical Bids were already opened and therefore no information could be uploaded in the GeM portal, thereby changing the previous WHO-PQS E003 Code mandatory to optional. Further to that, it was also mentioned that as per the basic tender rule after opening of the technical bid, no modification/alteration is allowed in any of the terms and conditions of the tender regarding requisite qualifying specifications.
20. In the said affidavit-in-opposition, a preliminary objection was also taken as regards the challenge made in the writ petition on the basis of Sub-Clause 1 (Evaluation of bids) of Clause 5 of the General Terms and Conditions and it was stated therein that the petitioner herein being one of the bidders, could not have challenged the decision to cancel/withdraw the invitation to bid or to annul the bidding process at any time prior to the award of the contract. It was also mentioned that no rights of the petitioner were affected inasmuch as they would again get a chance to participate in the fresh tender to be issued and accordingly it has been submitted that the writ petition ought to be dismissed.
21. To the said affidavit-in-opposition; an affidavit-in-reply was filed by the petitioner on 28.10.2024 thereby reiterating its stand made in the writ petition Page No.# 11/35 and denying to the contents of the affidavit-in-opposition. On the question of Sub-Clause 1 of Clause 5 of the General Terms and Conditions, it was stated that though the Director had the power to withdraw the bid or annul the bidding process at any time prior to the award of the contract without assigning any reason, the said discretionary power is to be exercised on genuine and bona fide grounds and not arbitrarily and illegally without any substantial grounds, more particularly, when it was under the aegis of the Director, the entire tender process was initiated and concluded by opening the financial bid by holding the petitioner as a valid L1 bidder in terms with the Terms and Conditions prescribed in the NIT.
22. The records of the present writ proceedings reveal that the writ petition was taken up for hearing on 28.11.2024. During the course of hearing, this Court put a specific query upon the learned counsel appearing on behalf of the petitioner as regards any document relating to the Central Government sponsoring the procurement as well as the guidelines of the GeM.
23. Subsequent thereto, an additional affidavit was filed by the petitioner on 07.01.2025, thereby bringing on record the General Terms And Conditions on GeM4.0 (Version 1.13) dated 29.11.2023 as well as the General Financial Rules, 2017 as updated up to 31.07.2024. These documents were brought on record to show as to how a modification to a bidding document can be made and what are the requisite formalities to be carried out. This aspect of the matter assumes importance taking into account that the Respondent Authorities specific stand is that by way of making a clarification in the remarks column, the certification of the product which touches on the eligibility condition of the bidding document was modified from optional to mandatory.
Page No.# 12/35
24. The records of the writ proceedings further reveal that an additional affidavit-in-opposition was filed by the Respondent Nos. 1, 2 and 3 wherein reference was made to Rule 173 (iii) (a) of the General Financial Rules, 2017 wherein it is mentioned that if any modification is made to the bidding document or any clarification is issued, the same shall be published or communicated in the same manner as the publication or communication of the initial bidding document was made. It was mentioned that the said Rule did not specify the requirement of publication in the form of a corrigendum. It was further mentioned that after the publication of the NIT in the GeM portal, 5 (five) representations were submitted by prospective bidders before submission of any bid seeking WHO-PQS Code standard of ILR instead of ISO-17025 standard and accordingly, the Competent Authority considered and accepted the prayer and uploaded its decision on 02.03.2024 in the GeM, 3 (three) days before the last date of submission of the tender (last date was 05.03.2024). It was mentioned that on the said basis the "modification" was published/communicated as per Rule 173 (iii) (a) of the General Financial Rules, 2017 in the same manner as the bid publication and sufficient time of 3 (three) days was also given to the interested bidders as required under Rule 173(iii)(b) of the General Financial Rules, 2017. It was averred that extension of time beyond 05.03.2024 was not considered and accepted necessary as no one submitted bid before 02.03.2024 and withdrawal for modification of the already submitted bid was not required. It was further mentioned that in the "Instructions for GeM Portal Online Bid Submission", the issuance of corrigendum was not mandatory as could be implied from the very, the phrases "they may download", "these tenders can be moved" and "in case there is any corrigendum issued to the tender document." It was reiterated that the bid of Page No.# 13/35 the petitioner should have been listed as technically non-responsive but wrongfully shown as technically responsive and therefore there was no other option but to cancel the tender process as decided in the meeting held on 25.07.2024 as per Sub-Clause 1 (Evaluation of the Bids) of Clause 5 (General Terms and Conditions). In addition to that, there is a further reiteration of the statements so made in the affidavit-in-opposition.
25. In the backdrop of the pleadings and the contents of the records so produced so delineated, this Court finds it relevant to take note of the submissions made by the learned counsels appearing on behalf of the parties.
SUBMISSIONS ON BEHALF OF THE PETITIONER
26. Mr. D. Das, the learned Senior Counsel appearing on behalf of the petitioner submitted that the action on the part of the Respondent Authorities to cancel the bidding process after finding that the petitioner is the lowest bidder and to go ahead with a fresh bidding process seeking the same terms which was initially there in the notice inviting tender is nothing but an illegal and arbitrary reaction on the part of the Respondent Authorities and for vested interest. He submitted that the said actions are in violation to Article 14 of the Constitution of India inasmuch as though the Respondent Authorities have the power to cancel the tender process before awarding of the tender, but the same should be done so in a fair and a reasonable manner and not in the manner in which it has been done. The learned Senior Counsel further referred to the judgment of the Supreme Court in the case of Subodh Kumar Singh Rathour vs The Chief Executive Officer reported in (2024) SCC OnLine SC 1682 to support his contentions.
Page No.# 14/35
27. In addition to that, the learned Senior Counsel also submitted that the petitioner being the lowest bidder has a legitimate expectation to be awarded the tender being the lowest bidder. He submitted that the doctrine of legitimate expectation in public law is founded on the principle of fairness and non- arbitrariness in the Government dealings with the individuals. It also recognizes that a Public Authority promise of past conduct will give rise to a legitimate expectation. The learned Senior Counsel relied upon the judgment of the Supreme Court in the case of Sivanandan C.T. and Others Vs. High Court of Kerela and Others reported in (2024) 3 SCC 799 wherein it was held that a promise made by a Public Authority will give rise to a legitimate expectation that it will adhere to its assurance.
28. The learned Senior Counsel therefore submitted that in the instant case it would be seen that the eligibility criteria initially as set out by the sponsoring authority is ISO-17025. The tender document categorically mandates the specification to be in compliance with ISO 17025/WHO-PQS Code. The same on the face of it appears to be optional. On 02.03.2024 on the basis of certain requests being made, a remark was made in the GeM portal, thereby making the WHO-PQS E003 Code as mandatory. He submitted to make an optional term mandatory would amount to modification of the terms and conditions of the tender and in that regard the requirement is to publish or communicate such modification or clarification in the same manner as the publication or communication of the initial bidding document was made. In that regard, he referred to the General Financial Rule, 2017 and more particularly, Rule 173(iii)
(a). He further submitted that Sub-Clause (b) of Rule 173 (iii) further stipulates that in the case of a clarification or modification, the Procuring Authority shall, before the last date for submission of the bid, extend such time limit if in its Page No.# 15/35 opinion, more time is required by the bidders to take into account the clarification or modification as the case may be while submitting the bids. The learned Senior Counsel submitted that no such extension was granted. Even in the records also nothing would be seen that there was any application of mind in that regard.
29. The learned Senior Counsel further referred to the Assam Public Procurement Act, 2017 (for short, "the Act of 2017") and more particularly to Section 3 of the Act of 2017 wherein the provisions of the said Act was made applicable to all procuring entities referred to in Sub-Section (2) of Section 3 of the Act of 2017. The learned Senior Counsel submitted that in terms of Sub- Section 2(a) of Section 3 of the Act of 2017, any department of the State Government or its attached or Subordinate Office will come within the ambit of the term "procuring entity". The learned Senior Counsel submitted while referring to the provision of Section 22(3) of the Act of 2017 that all requests for clarification and responses thereto shall be intimated to the bidders and where applicable shall be published on the State Public Procurement Portal. The provision of Sub-Section (4) of Section 22 of the Act of 2017 was referred to the effect that a procuring entity may hold the pre-bid conference to clarify doubts of potential bidders in respect of the particular procurement and the record of such conference shall be intimated to all bidders and where applicable shall be published on the State Public Procurement Portal. In addition to that, the learned Senior Counsel has also referred to Section 23 of the Act of 2017 as to what procedure is required to be followed in case any modification is required to be made to the bidding document thereby affecting the terms contained in the bidding document. He submitted that in terms of Sub-Section (1) of Section 23 of the Act of 2017, the procuring entity shall publish such modifications or Page No.# 16/35 clarification in the same manner as the publication of the initial bid with proof documents. The learned Senior Counsel therefore submitted that this provision of Section 23(1) of the Act of 2017 is pari materia to Rule 173 (iii)(a) of the General Financial Rules, 2017.
30. The learned Senior Counsel further referred to the Assam Public Procurement Rules, 2020 (for short, "the Rules of 2020") and more particularly to Rule 22 of the Rules of 2020. In that regard, specific reference was made to Rule 22(3) and submitted that the date, time and place of the pre-bid conference shall be indicated in the bidding documents and the bidder shall be asked to submit written queries in advance to the conference. The learned Senior Counsel therefore submitted that as stated in the affidavit-in-opposition from 13.02.2024 to 16.02.2024, the bidders were permitted to submit their written queries in advance of the conference. He further submitted that after the pre bid conference if it is considered to revise the techno commercial requirements the same has to be done by issuance of a formal corrigendum and shared with all bidders who purchase or have purchased the big documents. Such corrigendum shall be published on the State Public Procurement Portal along with the records or minutes of the pre-bid conference. He therefore submitted that without there being a corrigendum, there cannot be an amendment to the Terms and Conditions affecting the eligibility merely on the basis of inserting the same in the remarks portal of the GeM.
SUBMISSION ON BEHALF OF THE RESPONDENT AUTHORITIES
31. Ms. M.M. Kataky, the learned Standing Counsel appearing on behalf of the Animal Husbandry and Veterinary Department submitted that the instant writ Page No.# 17/35 petition is not maintainable, taking into account paragraph 4 of Clause 5(1) of the Specific Additional Terms and Conditions of the Notice Inviting Tender whereby an absolute discretion has been conferred upon the Director cum CEO, LHDCP, AHVD, Assam to cancel or withdraw the invitation to bid or annul the bidding process at any time prior to the award of the contract without assigning any reason for such decision. The learned Standing Counsel further submitted that such decision cannot be put into question by the bidder and as such, as the petitioner herein was a bidder, the petitioner could not have challenged the decision to withdraw/cancel the tender process, more so taking into account that the petitioner was duly heard in the meeting held on 25.07.2024.
32. The learned Standing Counsel on merits submitted that by way of inserting the remark on 02.03.2024 in the GeM portal, the eligibility condition pertaining to the compliance with WHO-PQS Code was made mandatory. However, in spite of that while evaluating the tender of both the petitioner as well as the other bidders, the petitioner was held to be responsive though the petitioner did not submit any certificate pertaining to WHO-PQS Code compliance. The learned Standing Counsel further submitted that after having held that the petitioner's Bid was technically compliant and the petitioner was found to be the lowest bidder, there were various complaints submitted. An inquiry was conducted and it was found that the petitioner could not have been held technically responsive, taking into account that the WHO-PQS Code was made mandatory and the petitioner products were not enlisted in the catalogue of the WHO-PQS.
33. The learned Standing Counsel submitted that subsequently these complaints were withdrawn and the complainants have agreed to make the Page No.# 18/35 criteria of certification in terms with ISO-17025 approved laboratories/WHO-PQS Code as optional, which were the original eligibility criteria. Taking into account the same, the Government had also taken a decision that if the ISO-17025 certification is taken, there would be larger participation and as such decided to again revert back to the original certification criteria. However, taking into account that the technical bid had already been opened, there was no possibility of changing the said conditions to optional after it was made mandatory by inserting the remarks that the certification of WHO-PQS Code to be mandatory. It is under such circumstances, in the best interest a decision was taken on 25.07.2024 for the purpose of canceling the earlier bid process and going for fresh tender.
34. The learned Standing Counsel further submitted that there are no allegation(s) of mala fide in the writ petition against any of the officials of the Animal Husbandry and Veterinary Department. She further submitted that the action so taken was in the best interest of the Government, taking into account that the Government is the custodian of the public resources and finances and as such, since no mala fide was alleged, the question of interfering with the decision making process ought not to be made. In that regard, the learned Standing Counsel has referred to the decision of the Supreme Court in the case of South Delhi Municipal Corporation Vs. Ravinder Kumar and another reported in (2015) 15 SCC 545 wherein the Supreme Court had categorically observed that the Government being the guardian of public finances, it has the right to refuse the lowest or any other tender bid or bids submitted by a bidder provided its decision is neither arbitrary nor unreasonable as it amounts to violation of Article 14 of the Constitution of India.
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35. The learned Standing Counsel further submitted that the action of the Respondent Department was taken in the best interest of the department, taking into account that if the terms are changed post the opening of the technical bid it would result in causing unfairness upon other bidders and which is also not permissible as per the policy of the GeM and as such, the decision of the Respondent Department to cancel the tender process and go for a fresh tender cannot be said to be arbitrary or unreasonable requiring any interference for exercise of the powers of judicial review.
THIS COURT'S QUERY
36. Before proceedings on the analysis and determination of the dispute before this Court, it is relevant to take note of certain queries made by this Court which have a vital relevance to the adjudication of the dispute (A). Whether the fresh tender which was proposed to be initiated contains the un-amended criteria of certification which is certification in terms with ISO- 17025 approved laboratories/WHO-PQS Code as optional?
The learned Standing Counsel stated that the proposed tender process would contain the un-amended criteria of certification which is certification in terms with ISO-17025 approved laboratories/WHO-PQS Code as optional.
(B). Whether there was any corrigendum issued for changing the certification criteria from certification in terms with ISO-17025 approved laboratories/WHO- PQS Code as optional to certification in terms with WHO-PQS code being made mandatory?
Page No.# 20/35 The learned Standing Counsel stated that there was no corrigendum issued. However by inserting the certification of WHO-PQS as mandatory in the remarks column before the closing of the bid process, the Terms were changed from optional to mandatory.
(C). Whether the products offered by the bidders who have been held to be technically responsive including the petitioner are envisaged to be procured in the fresh tender process?
The learned Standing Counsel submitted that the products of same specification and certification are envisaged to be procured in the proposed tender process.
(D). Did the Tender Committee carry out any investigation that the rates quoted by the Bidders were excessive?
The learned Standing Counsel submitted that the reason for cancellation was not that the bidders had quoted excessive rates.
(E). As the Tender in question was issued on 13.02.2024 and the bids were submitted on or before 05.03.2024 and a firm price have been quoted by the Tenderers, was it not likely that if a tender is again floated after one year i.e. in the year 2025, the rates may go up?
The learned Standing Counsel with all fairness submitted that she would not be able to answer the said query.
ANALYSIS AND DETERMINATION
37. From the pleadings, the records produced and the submissions made by Page No.# 21/35 the learned counsels for the parties, the followings points for determination arises from consideration (A). Whether there was any modification to the Criteria for certification on the basis of inserting in the remark column on 02.03.2024 that the certification required "product compliance is modified to WHO-PQS prequalified with valid PQS Code standards for ILR."?
(B). Whether the decision to annul the tender process and go for fresh tender was in public interest and not arbitrary, unreasonable and irrational?
(C). Whether the petitioner could have assailed the decision to annul the tender process in view of paragraph 4 of Clause 5(1) of the Specific Additional Terms and Conditions of the Notice Inviting Tender?
(D). To what relief(s) the parties to the instant proceedings are entitled to?
FIRST POINT FOR DETERMINATION
38. The materials on record categorically show that the sponsoring authority i.e. the Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying, Government of India had issued a communication dated 28.02.2022 enclosing the guidance relating for model infrastructure specifications so as to enable the procurement for optimal utilization within the sanctioned budget. The Enclosure dealt with various products including the Ice Lined Refrigerators. The commercial terms were common for all the products. Clause 1.6 of the Commercial terms specifically stated that the cold chain products may be tested at ISO-17025 accredited Page No.# 22/35 laboratories. The said enclosure does not mention anything as regards the testing at WHO-PQS accredited laboratories insofar as Ice Lined Refrigerators. It is further relevant to take note that it was specifically mentioned in the communication dated 28.02.2022 that any deviation from the specifications so given to the enclosed document i.e. the Annexure referred to above, would require prior approval from the Department along with proper justification.
39. It is further seen from the Notice Inviting Tender, more particularly, the Specific Additional Terms and Conditions which includes the eligibility for participating in the bid/tender that the cold chain products may be tested at ISO-17025 accredited laboratories. It is however relevant to mention that in the checklist to be submitted by the tenderers in case of both the OEM as well as the authorized dealers/agents/distributors, it has been mentioned that the product tested certificate at ISO-17025 approved laboratories/WHO-PQS Code is required, meaning thereby that the certification in terms with ISO-17025 approved laboratories and WHO-PQS Code were made optional.
40. It is further apparent from a perusal of the affidavit-in-opposition filed by the Respondents that during the period from 13.02.2024 to 16.02.2024 certain requests were made by the prospective bidders stating inter alia that there are no standards mentioned for test certificates for ISO-17025 and therefore requested to revise this as WHO-PQS pre qualified with valid PQS Code. It was further mentioned in the request that in view of ambiguity for not having standards for the products as only ISO-17025 approved laboratory certificates are required, it would lead to local manufacturers participating by taking advantage of the unclear specifications which in turn would hamper the performance and safety of the vaccines. It was also mentioned in the said Page No.# 23/35 requests that the States of Haryana, Chhattisgarh and Tamil Nadu have clearly mentioned to be tested and certified as per WHO-PQS standards with a valid PQS Code. On the basis of such requests being made, a remark was made in the GeM portal to the effect that the product compliance modified to WHO-PQS pre qualified with valid PQS Code standards for ILR.
41. It is the specific case of the Respondents that by this insertion of the remark in the GeM portal it amounts to modification of the Terms and Conditions of the tender documents. The petitioner's counsel on the other hand submitted otherwise. To ascertain the said, this Court finds it relevant to take note of certain provisions of the General Terms and Conditions of the GeM dated 29.11.2023. In the said General Terms and Conditions the buyer's responsibilities on the GeM portal have been stipulated. Clause i being relevant is reproduced herein under:
"i. The Buyers are responsible to ensure that the procurement done by them are in compliance of General Financial Rules and / or Rules Governing Public Procurement in respect of their organization, all GeM terms and conditions and other procurement Policies/ Guidelines notified by the government from time to time, including timely payments as per GeM terms and conditions."
42. From a perusal of the above mentioned clause, it would be seen that the buyers, as in the instant case, the Animal and Husbandry and Veterinary Department would be responsible to ensure that the procurement is carried out by them in compliance with the General Financial Rules and/or Rules governing the public procurement in respect of their own organization. The Respondents have in their additional affidavit-in-opposition have also admitted that the Page No.# 24/35 General Financial Rules, 2017 are applicable. Besides taking note of Section 3(2) of the Act of 2017, the Respondent Department is also required to abide by the provisions of the Act of 2017 and the Rules of 2020.
43. Rule 173 of the General Financial Rules of 2017 deals with transparency, competition, fairness and elimination of arbitrariness in the procurement process. The said Rule 173 specifically deals as to how the modification to a bidding document can be done. Clause (iii) of Rule 173 of the General Financial Rules of 2017 being relevant is reproduced herein under:
"(iii) Modification to bidding document:
(a) In case any modification is made to the bidding document or any clarification is issued which materially affects the terms contained in the bidding document, the procuring entity shall publish or communicate such modification or clarification in the same manner as the publication or communication of the initial bidding document was made.
(b) In case a clarification or modification is issued to the bidding document the procuring entity shall, before the last date for submission of bids, extend such time limit, if, in its opinion more time is required by bidders to take into account the clarification or modification, as the case may be, while submitting their bids.
(c) Any bidder who has submitted his bid in response to the original invitation shall have the opportunity to modify or re-
submit it, as the case may be, or withdraw such bid in case the modification to bidding document materially affect the essential terms of the procurement, within the period initially allotted or Page No.# 25/35 such extended time as may be allowed for submission of bids, after the modifications are made to the bidding document by the procuring entity.
Provided that the bid last submitted or the bid as modified by the bidder shall be considered for evaluation."
44. From the above quoted Clause (iii) of Rule 173 of the General Financial Rules of 2017, it is seen that in terms with Sub-Clause (a) in case there is any modification made to the bidding document or any clarification issued which materially affected the terms, conditions contained in the bidding document, the procuring entity shall publish or communicate such modification or clarification in the same manner as the publication or communication of the initial bidding document was made. Sub Clause (b) relates to extension of time in the circumstances if clarification or modification is issued to the bidding document. It obligates the procuring entity, before the last date for submission of the bid, to extend such time limit if in its opinion more time is required by the bidders to take into account the clarification or modification as the case may be while submitting their bids. Sub-Clause (c) further stipulates that in case a bidder who has submitted his bid in response to the original invitation shall have the opportunity to modify or resubmit it as the case may be or withdraw such bid in case the modification to the bidding document materially affects the essential terms of the procurement within the period initially allotted or such extended period as may be allowed for submission of the bids after the modifications are made to the bidding document by the procuring entity.
45. This Court further finds it relevant to take note of Rule 173(xii) of the General Financial Rules, 2017 which stipulates as under:
Page No.# 26/35 "(xii) Bids received should be evaluated in terms of the conditions already incorporated in the bidding documents; No new condition which was not incorporated in the bidding documents should be brought in for evaluation of the bids. Determination of a bid's responsiveness should be based on the contents of the bid itself without recourse to extrinsic evidence."
46. From a perusal of the above quoted Sub-Rule, it would be seen that the bids received should be evaluated in terms of the conditions already incorporated in the bidding document and no new conditions which were not incorporated in the bidding documents should be brought in for evaluation of the bids and the determination of the bids responsiveness should be based on the contents of the bid itself without recourse to extrinsic evidence. The said Sub Rule (xii) is very pertinent and read along with Sub Rule (iii) of Rule 173 of the General Financial Rules,2017 makes it clear that the Rules of the game which was pronounced by the initial bidding document is to be followed and can only be modified in the same way by which the initial bidding document was made i.e. by way of publication in the GeM portal. The question arises as to whether putting an endorsement in the remark column of the GeM portal thereby making a term mandatory which was otherwise optional can be said to be publication in the same manner in which the initial bidding document was published.
47. This Court further finds it relevant to take note of the Act of 2017, which mandates similar provisions as contained in Rule 173(iii) of the General Financial Rules,2017 and more particularly, Section 23(1) of the Act of 2017, whereby the procuring entity is obligated when any modification is made to the bidding documents or any clarification is issued which materially affects the terms contained in the bidding documents, to publish such modification or clarification Page No.# 27/35 in the same manner as the publication of the initial bidding document. Section 23 of the Act of 2017 is reproduced herein below:
"23. Changes to bidding documents.-
(1) In case any modification is made to the bidding documents or any clarification is issued which materially affects the terms contained in-the bidding documents, the procuring entity shall publish such modification or clarification in the same manner as the publication of the initial bidding documents.
(2) In case a clarification or modification is issued to the bidding documents, the procuring entity may, prior to the last date for submission of bids, extend such time limit in order to allow the bidder's sufficient time to take into account the clarification or modification, as the case may be, while submitting their bids.
(3)Any bidder who has submitted his bid in response to the original invitation shall have the opportunity to modify or re- submit it, as the case may be, within the period of time originally allotted or such extended time as may be allowed for submission of bids, when changes are made to the bidding documents by the procuring entity.
Provided that the bid last submitted or the bid as modified by the bidder shall be considered for evaluation."
48. This Court further takes note of the Rules of 2020 and, more particularly, to Rule 22. The said Rule has significance to the instant dispute for which the same is reproduced herein under:
"22. Pre-bid clarification:-
Page No.# 28/35 (1)Subject to the provisions contained in Section 22 of the Act, the responses of the procuring entities to bidders seeking clarifications on the bidding documents in terms of section 22 of the Act shall be communicated to the bidders in writing and, at the same time, such requests for clarification shall be uploaded along with the response thereto in the State Public Procurement Portal. Communication to the bidders should be done in writing or by e-mail.
(2)In cases of turnkey contracts or facilities of a special nature or procurement of sophisticated and costly equipment; large works and complex consultancy assignments, a suitable provision shall be kept in the bidding documents for one or more rounds of pre-bid conference for clarifying issues or doubts, if any, about the specifications, technical or commercial details of the work, consultancy, plant, equipment and machinery projected in the bidding document, etc. (3)The date, time and place of the pre-bid conference shall be indicated in the bidding document. Bidders shall be asked to submit written queries in advance of the conference. After the conference, the techno-commercial requirements may be revised if considered, necessary by way of issue of a formal corrigendum and shared with all the bidders who purchase or have purchased the bid documents. Such corrigendum shall be published on the State Public Procurement Portal along with the records or minutes of the pre-bid conference."
49. A perusal of the above quoted Sub-Rule (1) of Rule 22 of the Rules of 2020 is very pertinent in as much as it appears that the said Sub Rule is in respect to request for clarifications made and such request for clarifications along with the reply being uploaded in the State Public Procurement Portal. In the present case, during the period from 13.02.2024 to 16.02.2024, request were made by the various bidders for change of the certification criteria of Page No.# 29/35 WHO-PQS being made mandatory. On such request, the Reply was uploaded in the GeM portal thereby making the certification criteria of WHO-PQS mandatory from optional. But it is necessary to take note that Sub Rule (1) of Rule 22 of the Rules of 2020 is only in respect to clarifications. In respect to revision or modification of the techno commercial requirements, the relevant provision is Sub Rule (3) of Rule 22 of the Rules of 2020 or in other words if there is a modification to the terms of the tender conditions including those as regards eligibility, Rule 22(3) of the Rules of 2020 would be applicable. In the instant case it would be seen that the criteria for certification which was an eligibility condition was made mandatory from optional. The requirement as per the Rule 22(3) of the Rules of 2020 is that necessary formal corrigendum was required to be issued and shared with all the bidders who purchase or have purchased the bid document and such corrigendum was required to be published on the GeM portal along with the records or minutes of the pre-bid conference. However, admittedly the same was not done. In the opinion of this Court upon a conjoint reading of the General Terms and Conditions of the GeM dated 29.11.2023; Rules 173 (iii) and (xii) of the General Financial Rules, 2017; Section 23 of the Act of 2017 and Rule 22 of the Rules of 2020, as above quoted, the change so sought to be made to the criteria for certification from ISO -17025/ WHO - PQS to certification of WHO - PQS only could not have been made by way of insertion in the remark column. The modification of the said criteria as was in the original bid document could have only been made by issuance of a Formal Corrigendum which was required to be published in the same manner in which the Original Bid Document was published.
50. In view of the above, this Court determines the First Point for determination holding inter alia that there was no modification to the Criteria for Page No.# 30/35 certification on the basis of inserting in the remark column on 02.03.2024 that the certification required "product compliance is modified to WHO-PQS prequalified with valid PQS Code standards for ILR." In other words, the original terms of certification as published in the Original Bid Document i.e. the Product Tested Certificate at ISO-17025 approved laboratories / WHO PQS Code continued to hold the field. This aspect of the matter is also apparent from the understanding of the Technical Tender Committee who held on 11.03.2024 that the certification criteria of the Product Tested Certificate at ISO-17025 approved laboratories / WHO PQS Code as optional and on the basis of such understanding proceeded to hold that the Petitioner's bid was technically responsive along with three others.
SECOND POINT FOR DETERMINATION
51. This Court while deciding the First point for determination had come to a finding that the original terms of certification as published in the Original Bid Document i.e. the Product Tested Certificate at ISO-17025 approved laboratories / WHO PQS Code continued to hold the field. The reason assigned by the Respondent authorities to cancel the tender process and proceed with a fresh tender is on the basis that by inserting in the remark column on 02.03.2024 that the certification required "product compliance is modified to WHO-PQS prequalified with valid PQS Code standards for ILR", the certification of WHO- PQS was mandatory and after the technical bid was opened it could not have been made optional for which the tender process was sought to be annulled with a decision to go for fresh tender. The very edifice on which the said decision was made on 25.07.2024 stands eroded in view of the decision of this Court holding that the original criteria for certification still holds the field.
Page No.# 31/35 Therefore, the resultant effect on the impugned decision is that the impugned decision is based on non-existent materials or for that matter suffers from malice in law and based on extraneous considerations.
52. This Court is aware that normally the Court should not interfere with the decision of the Tendering authority to cancel or annul a tender and go for fresh tender process. However, there is an exception to such normal rule. It is trite that if the decision making process is vitiated by arbitrariness, unreasonableness, irrationality and/or extraneous consideration, the writ Court is obligated under law to set right the wrong.
53. It is a settled principle of law that in order to ascertain whether the actions on the part of the Respondent State is arbitrary or not one needs to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, the performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. In the instant case, it would be seen that the Respondent Authorities for reasons best known did not issue a corrigendum as required under law when it sought to modify the criteria for certification from optional to mandatory. Not only that, the Technical Tender committee of their Respondent Authorities also resolved that the certification criteria was optional on 11.03.2024 and thereupon on 13.03.2024 held that the Petitioner was technically responsive. It would have been understandable and reasonable had the Respondent Authorities thought that as they want WHO-PQS certification mandatory in the fresh tender process so they want to annul the earlier tender Page No.# 32/35 process and go ahead with the fresh tender process by incorporating the mandatory certification. Rather it is otherwise. The Respondent Authorities now wants to annul the earlier tender process and go ahead with a fresh tender by having the optional certification which as held above still holds the field. The impugned decision dated 25.07.2024, on the part of the respondent authorities to annul the tender process and go ahead with the fresh tender process incorporating the same optional certification therefore smacks of arbitrariness and hence vitiated.
54. The Supreme Court in the case of Subodh Kumar Singh Rathour (supra) observed that every State action must be informed by reason and it follows that an action informed by reason, is arbitrary. It was observed that Rule of law contemplates governance by laws and not by humor, whims or caprices of the men to whom the governance is entrusted for the time being. The question whether the public authority acted bona fide would be gauged from the impugned action and attending circumstances. The authority is required to justify the action assailed on the touchstone of justness, fairness and reasonableness. Test of reasonableness is more strict. The actions and decisions which touch the common man have to be tested on the touch stone of fairness and justice. It was further observed that what is not fair and just is unreasonable. And what is unreasonable is arbitrary and an arbitrary action is ultra vires. The Supreme Court further observed that any action or decision does not become bona fide and in good faith merely because no personal gain or benefit to the person exercising discretion has been established. An action is mala fide, when such an action is contrary to the purpose for which it was authorized to be exercised. It was observed that dishonesty in discharge of duty vitiates the very action without anything more. The Supreme Court in the said Page No.# 33/35 Judgment deduced that an action is bad even without proof of motive of dishonesty; if the authority is found to have acted contrary to reason.
55. The proposition of law as enunciated in the case of Subodh Kumar Singh Rathour (supra) if applied to the present facts would show that the actions on the part of the Respondent Authorities to annul the Tender process so initiated vide the Notice Inviting tender dated 13.02.2024 is without any justification and based on materials which do not exist. This Court further finds it relevant to reiterate that on 11.03.2024, admittedly the Technical Tender Committee had arrived at a decision that the Certification criteria shall be optional which is seen from the affidavit in opposition filed by the Respondents. The records produced also show that the Technical Tender Committee, taking into account that the certification criteria to be optional had held that the petitioner along with the three other bidders to be technically responsive. The Price Bid was opened on 15.03.2024 wherein the petitioner was found to be the lowest bidder. It is only subsequent thereto some stranger raised complaints as regards the technical competence of the petitioner. The records further show that the Respondents now propose to de-novo conduct a fresh tender process by cancelling the earlier tender process on the same terms and conditions. The reasons so assigned under no circumstances be said to have any basis as already held herein above. Under such circumstances, the impugned actions on the part of the Respondent Authorities to cancel the Tender process and to go for fresh tender is on the face of it arbitrary, unreasonable, irrational and also suffers from malice in law.
56. The above answers the Second point for determination.
THIRD POINT FOR DETERMINATION Page No.# 34/35
57. The third point for determination relates to whether the Petitioner could have assailed the decision to annul the tender process in view of paragraph 4 of Clause 5(1) of the Specific Additional Terms And Conditions of the Notice Inviting Tender. From the analysis made herein above, it would be apparent that the impugned actions on the part of the Respondent Authorities to annul the Tender process and go for fresh tender is arbitrary, unreasonable, irrational and suffers from malice in law. It is well settled that when an action of the State is arbitrary, unreasonable, irrational and suffers from malice in law, the said actions violates the mandate of Article 14 of the Constitution. This Court which is empowered by the Constitution to exercise the powers of high prerogative writs cannot turn a blind eye when the actions on the part of the Respondent Authorities conflicts with the mandate of Article 14 of the Constitution. Additionally, this Court further finds it relevant to take note that Section 28 of the Indian Contract Act, 1872 stipulates that any agreement that restricts an aggrieved party from enforcing his rights to approach a relevant court or tribunal in case of a breach of contract, or limits the time within which he may do so, is a void agreement.
In view of the above, this Court is of the opinion that there is no bar on the part of the Petitioner to challenge the impugned actions in view of paragraph 4 of Clause 5(1) of the Specific Additional Terms and Conditions of the Notice Inviting Tender.
FOURTH POINT FOR DETERMINATION
58. This Court disposes of the Writ Petition with the following observations and directions:
Page No.# 35/35 (A). There was no modification to the Criteria for certification on the basis of inserting in the remark column on 02.03.2024 that the certification required "product compliance is modified to WHO-PQS prequalified with valid PQS Code standards for ILR." In other words, the original terms of certification as published in the Original Bid Document i.e. the Product Tested Certificate at ISO-17025 approved laboratories / WHO PQS Code continued to hold the field.
(B). The impugned actions on the part of the Respondent Authorities to cancel the Tender process and to go for fresh tender as resolved in the Minutes of the Meeting dated 25.07.2024 is on the face of it arbitrary, unreasonable, irrational and also suffers from malice in law.
(C). The decision of the Respondent Authorities to cancel the Tender process initiated on the basis of the Notice Inviting Tender dated 13.02.2024 and go ahead with a fresh tender process as resolved in the Minutes of the Meeting dated 25.07.2024 is interfered with and accordingly the Impugned Minutes of the Meeting dated 25.07.2024 is set aside and quashed.
(D). The Respondent Authorities are directed to bring the Tender Process initiated vide the Notice Inviting Tender dated 13.02.2024 to its logical conclusion as per the terms of the Notice Inviting Tender dated 13.02.2024.
(E). There shall be no order for costs.
JUDGE Comparing Assistant