M/S.Zoom Developers Pvt.Ltd vs State Of Kerala on 4 December, 2008

[Cites 32, Cited by 5]

Kerala High Court

M/S.Zoom Developers Pvt.Ltd vs State Of Kerala on 4 December, 2008

The primary question involved in this Writ Appeal is whether the respondents action in rejecting the tender document submitted by the Appellant for construction of the International Deepwater Seaport and Container Transshipment terminal at Vizhinjam, Kerala' is justified or not?

2. The appellant had approached this Court in Writ Petition (C) No. 15570 of 2008. The learned single judge vide judgment dated 03.7.2008 has dismissed the writ petition. That judgment is under challenge in this appeal.

3. RELEVANT FACTS:-

To appreciate the contentions raised in this proceedings, it is appropriate to set out the facts as stated in the memorandum of Writ Petition, counter affidavits and other documents submitted before the Court.

4. Pleadings in the memorandum of Writ Petition:-

The averments in the memorandum of Writ Petition is that as per Exhibit P1, the 2nd respondent on behalf of the 1st respondent, invited 'Request for Proposal' (RFP) to develop a 'Deepwater Seaport and Container WA No.1460/08 2 Transshipment Terminal at Vizhinjam, Kerala' (the Project). Qualification Criteria for prospective bidders is submitted as Exhibit P2. Date for submission of bid was fixed as 31.01.2008 by Exhibit P3. The RFP issued to the petitioner is produced as Exhibit P4, wherein the details of the project and procedure for bidding are detailed. The RFP submitted by the petitioner's consortium is produced as Exhibit P5, wherein it is stated that said Consortium's lead member is Zoom Developers, and its members are Portia Management Services and Peter Frankel and Partners. Exhibit P6 is the statement of qualification submitted by the petitioner and Exhibit P7 is its technical proposal. Including the petitioner, five Consortium submitted RFP before the due date and time. Lead members of the other Consortium are:-

1. Apollo Enterprises Ltd., Isle of Man, UK

2. Nagarjuna Construction Co. Ltd, Hydrabad, India

3. Videocon Industries Ltd. Mumbai, India and

4. Lanco Kondapalli Power Pvt. Ltd., Hydrabad, India.

5. The 3rd respondent - Advisor to Respondents 1 and 2, on 3.3.2008 issued Exhibit P9 letter to the petitioner with reference to the bid, inter alia pointing out, that, i. The power of attorney for nomination of Lead Members needs to be stamped in accordance with law;

ii. In the Consortium Agreement, the signatures of Mr. Peter Martin of Peter WA No.1460/08 3 Frankel and Partners and Mr. Minoo Pardiwala of Zoom Developers have not been notarized;

iii. The Consortium Agreement needs to be stamped in accordance with law; iv. It needs to be mentioned more expressly in the consortium Agreement that the Lead Member shall hold a minimum equity of 26% in the SPC; v. Portia Management Services has singed Consortium Agreement on behalf of Peel Ports Limited, but Peel Ports Limited is not a Member of Consortium;

vi. Necessary documentations from the various consortium Members authorizing the signatories of the different documents have not been submitted along with the Bid. Petitioner was also requested therein to submit the Annual Reports of all the three parties of the consortium ie; of Zoom Developers, Portia Management Services (its own) and Peter Frankel & Partners.

They are further requested therein to collect the original documents for taking necessary action to meet the above requirements and also requested to resubmit the necessary documents with ten days.

6. The petitioner, vide Exhibit P10, sought extension of time till 24.03.2008 for complying with Exhibit P9 and also sought time to execute a 'fresh agreement'.

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7. The petitioner vide Exhibits P11, P12, P12(a), P12(b), P13 and P14, responded to 3rd respondent with reference to Exhibit P9 and furnished some details / documents. As evident from Exhibit P15, the 3rd respondent again asked the petitioner to get the old Power of Attorney and the Consortium Agreement stamped in accordance with law. To comply this, they sought time till 04.04.2008. Vide Exhibit P16 and vide Exhibit P17, time was granted as a last chance. Petitioner swiftly acted in terms with Exhibit P15 as evident from Exhibits P18, P19, P20 and P21. Further correspondence were there between petitioner and 3rd respondent as per Exhibits P 22 and P23. It is averred that on 15.05.2008, the petitioner from Exhibit P24 news paper item learnt that the respondents have selected the 4th respondent as the 'successful bidder'. Thereafter, when they contacted the Minister for Ports, it is asserted that they were informed, that, the bid of petitioner was not considered for the reason that they "changed Consortium Partners". It is further averred that the financial bid submitted by the petitioner was more competitive and that the action of respondents 1 to 3 are illegal and arbitrary.

8. In the Writ Petition filed, petitioner had sought for a declaration, to declare that the stand taken by the respondents treating the proposal submitted by the petitioner's consortium as non responsive is arbitrary and illegal and violation of Article 14 and 19(1)(g) of the Constitution of India and to direct the respondents to open the technical bid and financial bid WA No.1460/08 5 submitted by the petitioner and to award the tender for the consortium which has submitted the most competitive bid.

9. When the Writ Petition came up for consideration on 03.6.2008, the learned single judge had directed the State Government 'to place on record the report of the High Level Committee and the 3rd respondent was directed to place on record its evaluation report regarding the petitioner's bid'. These directions were complied with and the necessary documents were produced before the Court.

10. Pleadings in the counter affidavit filed by 2nd respondent:

In the counter affidavit filed, it is stated, that, in response to Exhibit R2(a), 33 firms had obtained the RFP documents and out of them only 5 firms submitted the RFP. It is stated that the Bidders were required to submit their proposals in four covers. The outer cover shall contain covering letter, details of bidder, power of attorney for lead member of consortium, consortium agreement entered among the members of the consortium, legal opinion that the consortium agreement is valid, current litigation status, proposal security of Rs. 50 million in the form of Bank guarantee and the amendments sought to draft license agreement, if any. Cover 1 is the 'Statement of Qualification', Cover 2 is the 'Technical Proposal' and Cover 3, the 'Financial Proposal'. It is further stated that the evaluation was done in three stages - 1st Stage is evaluation of Outer Cover and Cover 1 to check the responsiveness of bids and WA No.1460/08 6 evaluation of qualifications vis.a.vis the stipulated qualification criteria.

2nd Stage is evaluation of the technical proposal of only those bidders who meet the 'qualification criteria' and 3rd Stage is evaluation of the Financial Proposal of Technically qualified bidders who score minimum 70 points out of 100 points in the technical evaluation. As stated above, only five bids were received. These bids (Outer Envelope and Envelope 1) were opened on 31.01.2008 at 17.00 hours by the Bid Opening Committee constituted vide GO. (Rt) 49/08/F&PD dated 23.01.2008 in the presence of bidders' representatives. All the five bidders have submitted valid Proposal Security of Rs.50.00 million in form of Bank guarantees, Consortium Agreements and other documents as per the RFP and found the said firms are prima facie qualified. Minutes of the Bid Opening Committee is produced as Ext.R2 (b). The bids were accepted for further scrutiny. The Bid Evaluation Committee ("EC" for short) constituted as per GO (Rt) 112/08/F&PD dated 19.02.2008, met on 25.02.2008, 13.03.2008, 08.04.2008, 06.05.2008, 07.05.2008 and on 14.05.2008.

11. The bids submitted by all the bidders were considered at the meeting of EC dated 25.02.2008 and in its R2(d) minutes, it is observed with regard to the petitioner's bid, that, i. Power of Attorney Agreement needs to be stamped in accordance with law; ii. The Consortium Agreement needs to be stamped in accordance with law; WA No.1460/08 7 iii. It has not been expressly mentioned in the consortium agreement that the Lead member shall hold a minimum equity of 26% in the SPC as per the requirements of the RFP;

iv. Portia Management Services has signed Consortium Agreement on behalf of Peel Ports Ltd but Peel Ports Ltd is not a member of the Consortium.

12. A copy of the points considered in respect of the petitioner is submitted as Exhibit R2(c) wherein it is inter alia noted that, i. Power of Attorney submitted by the petitioner has not been executed on stamp paper;

ii. Consortium agreement is not submitted on stamp paper and iii. the petitioner sought two amendments to the draft license agreement.

In the said meeting, additional information regarding Annual Reports were sought and also found that the financial statement of lead member was not submitted. Ten days time was granted to the petitioner for submission of details. It is stated that the petitioner sought extension of time till 24.03.2008 and then to 04.04.2008 for furnishing clarification. Since the bidding process was getting delayed, an ultimatum was issued to the petitioner on 27.03.2008 cautioning them to complete the formalities before 04.04.2008.

13. In the EC meeting held on 08.04.2008, petitioner's documents were evaluated and the 3rd respondent submitted its observations along with a note requesting to obtain consideration of law department on the WA No.1460/08 8 following aspects:-

1. Original Consortium Agreement is submitted without notary attestation for the signatures of Mr. Peter Martin of M/s Peter Frankel and Partners and Mr. Minoo Pardiwala of M/s Zoom Developers;

2. Consortium Agreement was not stamped in India;

3. Consortium Agreement contain anomalies such as --

i. not mentioned expressly that Lead Member shall hold a minimum equity of 26% in the SPC (instead of in the consortium). The amendment to RFP for minimum equity stake of the Lead Member to be 26% in the SPC instead of 26% in the consortium in the SPC was issued in 01.01.2008 while the consortium agreement was entered in October 2007.

ii. Portia Management Services had signed consortium Agreement on behalf of Peel Ports, but Peel ports Ltd is not a member of the consortium (Portia Management Services is a subsidiary of Peel Ports ltd, but need to be authorized by Peel Ports Ltd).

4. Accordingly, we had pointed the above discrepancy to the Bidder together with the stipulations in RFP;

5. Towards clarifications to above, the Bidder furnished a Consortium Agreement dated 11.03.2008 drawing reference to Consortium Agreement dated 04.10.2007 submitted with the original bid documents and also superseding the same towards complying with the provisions of RFP.

14. Copy of the minutes of EC on 08.04.2008 is produced as Exhibit R2(e) and with reference to the bid submitted by the petitioner it is noted that the responsiveness of its bid needs to be ascertained keeping in view WA No.1460/08 9 of the agreement dated 04.10.2007 and in this circumstance EC thought it appropriate to obtain the opinion of Law Secretary before opening their technical bid. It was also decided to open the bids submitted by the Consortiums lead by Nagarjuna Construction Co. Ltd, Hydrabad, Videocon Industries Ltd. Mumbai, India and Lanco Kondapalli Power Pvt. Ltd., Hydrabad, India who submitted the responsive bids and met the stipulated Qualification Criteria.

15. The Evaluation Committee, again met on 06.05.2008 and a copy of the minutes is produced as Exhibit R2(f). In this meeting, Law Secretary also attended as a special invitee for the purpose of discussing the responsiveness of the bid submitted by the petitioner. Opinion of the Law secretary is as follows;

"2.2.1. Certain defects pointed out (by) the Legal consultants in the original consortium agreement with reference to Notary attestation and stamping requirements have since been reported to be rectified. The same may be confirmed.

2.2.2. It is informed that the consortium agreement was entered into between the parties in October 2007. The amendments to the RFP has been issued only in January 2008 (fixing 26% of the minimum equity stake for the lead member in the SPC instead of 26% of the consortium in the SPC). Hence it is reported that consortium agreement dated 04.10.2007 submitted by the bidder has been superseded by a new consortium agreement dated 11.03.2008 so as to comply with the stipulations in the RFP.

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Opinion The amendment made in the RFP can be carried out in the original consortium agreement executed in October 2007 itself by making suitable modifications to the deed through a supplemental agreement executed in October 2007 would not be lost. Now the consortium agreement dated 04.10.2007 is a non-entity. At the same time Consortium Agreement dated 11.03.2008 cannot be taken as submitted along with the bid proposal.

2.2.3. Attention is invited to the consortium agreement dated 04.10.2007 wherein M/s Portia Management Services has signed as a party on behalf of M/s Peel Ports Ltd. It is reported that M/s Peel Ports is not a member of the consortium. But it is has been clarified that M/s Portia Management Services is a subsidiary of Peel Ports Ltd. However, no such authorization is found in this regard.

2.2.4. Now in the new consortium agreement executed on 11.03.2008 the party to the consortium ie M/s Peel Ports Ltd has disappeared. M/s Portia Management Services has come in the picture as a party to the consortium agreement. Since such a change has been made after submission of the original bid documents as a participating consortium in the Bid Process it has not been explained under whose authority such a change in the consortium has been made.

2.2.5. As per eligibility criteria for the Bidder as specified in the RFP (cl.3.5) it has been stated that all members of the shall be jointly and severally liable for the execution of the project in accordance with the terms of WA No.1460/08 11 the License Agreement and a statement to this effect shall be included in the Consortium Agreement. But instead of incorporating such a clause in the consortium agreement, it has been mentioned therein that the members of the consortium shall be jointly and severally responsible at every stage of the implementation of the project (cl. 7). It may be noted that 'liability' is different from 'responsibility'. "

In view of this legal opinion of Law Secretary, Evaluation Committee unanimously concluded that the bid submitted by the petitioners is non responsive in terms of RFP provision.

16. Pleadings in the reply affidavit filed by petitioner:

In the reply affidavit filed by the petitioner it is averred at the outset that the 'Law Secretary has been invited as a special invitee by the respondents in the meeting held on 08.04.2008 and 06.05.2008 and based on his opinion the evaluation committee which till that time found the petitioner to be qualified as per the RFP unanimously changed their opinion'.

17. In response to para 2.2.2. of Exhibit R2(f), it is averred that the consortium agreement is permitted to be submitted by the bidders in own format and the law secretary himself opined that amendment could be carried out by way of a supplementary deed; that had the 3rd respondent made any suggestion to the effect of change in percentage of equity, suitable modifications could have been made earlier; that the 3rd respondent was fully satisfied with the new consortium agreement as vide Exhibit P15, they asked WA No.1460/08 12 the petitioner to get the new agreement stamped in accordance with law; that it is factually wrong on the part of law secretary to note that 'in view of the supersession of the earlier consortium agreement for the new consortium agreement the consortium agreement dated 04.10.2007 is a non-entity' as he earlier approved the same as a supplementary agreement that complied with the provisions of law; that it is specifically admitted by the EC in cl.4.2(a) that all the bidders furnished the information "as asked for and within time" and thus they have admitted that all the documents were submitted in time.

18. In response to para 2.2.3. of Exhibit R2(f), it is stated that at no point of time was any authorization sought from petitioner regarding the fact that M/s Portia Management Services is a subsidiary of Peel ports Ltd; that a perusal of Exhibits P11 and P12(a) would make it clear that Portia Management Services is a part of Peel Ports Group and EC dated 25.03.2008 also confirms as per minutes of the meeting that Peel Ports Ltd is not a member of Consortium; that no clarification is sought from the petitioner with reference to the relationship between Portia Management Services and Peel ports; that Exhibit P9 was not taken note of or not considered by the Law Secretary before forming his opinion.

19. In response to para 2.2.4. of Exhibit R2(f), it is stated that the observation to the effect that Portia Management Services has come into picture as a party to the consortium agreement after the submission of bid WA No.1460/08 13 documents is not correct; that in the cover letter dated 31.01.2008 submitted by the petitioner it is specifically stated that Portia Management Services is shown as a consortium member and in the column (f) which deals with ownership the answer given is "wholly owned subsidiary of Peel Ports Ltd UK" and similarly in column 2 regarding brief description of the company it has been stated that "Portia Management Services is the international arm of Peel Ports"; that the reference in consortium agreement that 'Portia Management Services on behalf of Peel Ports Ltd' is only intended that the Portia Management Services is part of Peel Ports and the certificates annexed would show that the supporting documents are that of the Portia Management Services; that right from beginning it was M/s Portia Management Services which was the consortium member and not Peel Ports.

20. In response to para 2.2.5. of Exhibit R2(f), it is stated that the Law Secretary adopted a hyper-technical approach while drawing distinction between the words "liability" and "responsibility".

21. It is also stated in the reply that the fact that respondents proceeded with other three bids would show that they are not interested to consider the bid of petitioner; that the petitioner's case was taken up for consideration only on 06.05.2008 by which time the EC has already considered the technical bid of the other three consortium and had issued notice to them that their financial bid would be opened on 14.05.2008; that as per cl 21.3 of WA No.1460/08 14 Ext. P4 it has been clearly stated that the time and date of opening the financial proposals shall be informed to the eligible bidders giving minimum 7 days prior notice and therefore the meeting held on 06.05.2008 was an empty formality; that the entire bid evaluation process was completed with undue haste, since the Government wanted to include the awarding of Vizhinjam Project as their achievement since the 2nd anniversary of LDF government was on 16.05.2008 and this was highlighted as the Ministry's biggest achievement.

22. Additional Respondent:

As per Order in IA 7587/2008, Portia Management Services Ltd was impleaded as Addl. 5th Respondent and they have also filed statement and reply essentially supporting the contentions of the Petitioner.

23. JUDGMENT OF THE LEARNED SINGLE JUDGE:

The learned single judge, as evident from para 14 of the judgment, considers the correctness or otherwise of the opinion of the law secretary and proceeded to decide the case. The three points considered by the law secretary viz; i. Consortium Agreement dated 04.10.2007 was signed by the M/s Portia Management Services on behalf of M/s Peel Ports Ltd without any authorization; ii. new Consortium Agreement dated 11.03.2008 was singed by M/s Peel Ports Ltd and M/s Portia Management Services has disappeared. This change of member was made after submission of original bid without any authority and iii. Instead of making the joint and several 'liability' clause in the WA No.1460/08 15 Consortium Agreement, only a 'responsibility' clause was included by the petitioner's consortium.

24. The court has elaborately considered the jurisprudential difference between the terminologies 'liability' and 'responsibility' in paragraphs 15 to 26 and approves the opinion of law secretary after finding that petitioner's consortium is not permitted to make such changes in the agreement against cl. 3.5 of Section IV of RFP. It is also noted that there is fundamental difference between the words 'liability' and 'responsibility'. After considering the judgments in WB State Electricity Board v. Patel Engineering Co, 2001 (2) SCC 451, Tata Cellular v. Union of India AIR 1996 SC 11 and Air India Ltd. v. Cochin International Airport Ltd. 2000 (2) SCC 617, it is found that judicial interference in this case is not warranted and as such the action of EC cannot be interfered with. In paragraphs 27 to 29, the Court essentially considers the aspect relating to the change of parties in the new Agreement after submission of bid and found that it is not permissible in the context of the RFP and that the expression 'acting on behalf' does not permit substitution of parties. Opinion of Law Secretary was approved in this regard and also on these reasonings, the writ petition was dismissed.

25. RELEVANT PROVISIONS IN THE RFP:

For a better understanding of the issue in hand, it is necessary to recapitulate the relevant provisions in RFP.

WA No.1460/08 16 Section I: Invitation for Bids Clause 6: The selection shall be by way of a three stage bid evaluation process. All bidders shall furnish their proposals furnishing their qualification details, technical and financial particulars/proposals as per the instructions in Section IV of the RFP. These shall be evaluated based on the criteria set out in Section II and IV of the RPF.

Section III: Scope of the Project Definitions:

"Bidder" shall mean Applicant who has been issued RFP, to submit a Detailed Proposal.

"Consortium" shall mean a group of Firms formed pursuant to the Consortium Agreement entered into by them for the purpose of submitting the Proposal and participate in the Bidding process and in the event of being successful, to implement the License Agreement through a Special Purpose Company to be formed and incorporated by them under the Companies Act, 1956.

"Consortium Agreement" shall mean an agreement to be entered into amongst the Lead Member and the remaining Members of the Consortium recording the terms of their consortium arrangement and joint venture for the purpose of submitting the Proposal, participate in Bidding process and provide for implementation of the terms of the License Agreement as provided herein. WA No.1460/08 17

"Lead member" shall mean in case of a Consortium, the Firm nominated to act as Lead Applicant at the RFP stage, which meets the Qualification Criteria and qualifies thereby and which shall continue to be the leader and be authorized as such for bidding and implementation.

"Member" shall mean any firm other than the Lead Member, which is part of the Consortium bidding at the RFP stage for the Project.

"Project" shall mean designing, financing, building, owning, operating and maintaining of a green field modern, all weather, deepwater port and container transshipment hub at Vizhinjam in Thiruvananthapuram District, Kerala, India, within focus on International Container Transshipment, during the License period and transferring to the Licensor thereafter.

"Proposal or Detailed Proposal" shall mean the Proposal submitted by the Bidder in response to the RFP including clarification and/or amendments to RFP, if any.

"Special Purpose Company or SPC" shall mean the Company to be set up under the Companies Act, 1956, by the Licensee for the purpose of implementing the Project, such SPC's shareholders being the members of the Consortium selected as Successful Bidder in respect of the Project.

"Sponsor" shall mean Vizhinjam International Seaport Ltd., which has been designated as the Nodal Agency by the GoK/Licensor for implementing the Project.

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"Successful Bidder" shall mean such Bidder, who after evaluation of its qualification, technical and financial criteria in the proposal received in response to this RFP, is assessed accordingly by the Licensor and such other parties as laid out herein, and declared as the Highest Evaluated Bidder, pursuant to which the Letter of Intent (LOI) in relation to the project issued by the Sponsor/Licensor is accepted by such party, paid the upfront Project Development Fee and submitted the Performance Security Bank Guarantee. Section IV: Instruction to Bidders Eligible Bidders:

3.1 : Only those applicants who have been provided with the RPF documents and meet the Qualification Criteria laid down by Sponsor (given in Section II of RFP) would qualify as eligible bidders.

The Statement of Qualification submitted by the Bidders as part of the Proposal shall be evaluated by the Sponsor and further evaluation of their Bids will be subject to the Bidders meeting the Qualification Criteria laid down herein.

3.2 Evidence of Qualification: Sponsor shall have the right to seek such information as may be required and necessary from the Bidders to ensure their continued eligibility. Bidders shall provide evidence of their continued eligibility vis a vis the Qualification Criteria in such a manner that meets the requirements of the Sponsor. Bidders may note that they WA No.1460/08 19 may be disqualified in the event of the sponsor determining at any stage of the Bidding Process that the Bidder would be unable to fulfill the requirement of the Project or may fail to continue to meet/satisfy the Qualification criteria. Sponsor may, seek such supplementary information or documentation regarding qualifications as may be necessary from the Bidders at any time, which would have to be furnished by the Bidders within the time frame stipulated by the sponsor. 3.3 Updated Information: All information to be submitted in relation to the RFP and the Project by the Bidders shall be updated to the date of its submission, or as close to that date as is reasonably possible, given the nature of the information requested, unless a specific date has been mentioned therein.

3.4 The Lead Member, if indicated by the Applicant, can be changed with prior written consent of sponsor only in the event of the substituted Lead Member satisfying the Qualification Criteria laid down for the Lead Member. Any change of the Lead Member without such written permission may result in disqualification of the Bidder. Sponsor may, as its sole discretion, permit the change to take effect in the event of the Bidder demonstrating its continued eligibility to fulfill the Qualification Criteria to the satisfaction of the Sponsor. The Applicant is free to select the other Members of the Consortium and finalize the shareholders of WA No.1460/08 20 the Consortium before the Submission of the Proposal provided the Lead Member and other Members satisfy the Qualification Criteria for the Consortium as a whole, unless otherwise mentioned in RFP documents. 3.5 All members of the Consortium shall be jointly and severally liable for the execution of the Project, in accordance with the terms of the License Agreement and a statement to this effect shall be included in the Consortium/Share Holder's Agreement.

3.6 The evaluation of the Bidder's Proposal would be based solely on the proven details and data furnished by the Bidder as part of its Detailed Proposal.

3.7 Sponsor's decision regarding selection of License from the various Bidders' proposal received shall be final and binding on all parties therein, and Sponsor would not be entitled to inform any Bidder/s the reasons for its decision.

4. Additional requirements where bidder is a consortium 4.1 In case the Bidder is a Consortium, the Bidder has to comply with the following additional requirements:

a. The proposal shall include all the information as required under Para 13 for Lead member and each Member.

b. The proposal shall be signed by and be legally binding on all the Members of the Consortium.

WA No.1460/08 21 c. The proposal shall include a Power of Attorney signed by all members in favor of the Lead Member, duly authorizing the Lead member to act on behalf of the Bidder Consortium in respect of all matters relating thereto.

d. The Lead Member shall be authorized by all the Members to incur liabilities and receive instructions for and on behalf of any and all Members.

e. A copy of the Consortium Agreement entered into by and among the members of the Consortium and the Lead Member shall be submitted with the Proposal. The Consortium Agreement shall be specific to this Proposal and clearly allocate responsibilities and duties between the Members and the Lead Member, including percentage of shareholding. Notwithstanding this, the Consortium Members shall be jointly and severally liable to Licensor for implementation of the Project.

8. Clarification of RFP:

8.1 In the event of Bidder requiring any clarifications, etc. in respect of the RFP documents, the Bidder may bring such clarifications to the notice of the Sponsor in writing.

8.2 Bidder is requested to bring to the attention of the Sponsor any WA No.1460/08 22 anomalies or ambiguities in any Section of the RFP not later than thirty (30) days from the date of issue of RFP, in the format provided in Annexure 2. The Bidder is required to state the anomaly/ambiguity along with his understanding of the same. Such clarifications could relate to the process, documentations or any other issue of RFP. To the extent that such issues are not brought to the attention of the Sponsor within the time frame stipulated above, the contents of the RFP as interpreted by the Sponsor shall prevail.

8.3 Modification: Any modification of the RFP which may become necessary as a result of the deliberations/discussions subsequent to comments/clarifications sent by the bidders shall be made by the Sponsors separately by way of an Amendment as mentioned in Para 9.

9. Amendment to RFP Documents:

9.1 At any time prior to the deadline for submission of Proposals, Sponsor may in response to any clarifications, query, question, doubt etc. of the Bidder, or at its own initiative, issue Amendments to the RFP. Any amendments thus issued shall be part of the RFP.

13: Contents of the Proposal 13.2 Basic Information Section: The Bidder is required to furnish detailed information in respect of all its Consortium members, like WA No.1460/08 23 country of incorporation, address of the registered office and Indian office (if any), contact person along with his designation and phone/fax/e mail address, names of the present Board of Directors, key management personnel and major shareholders, etc. as also the proposed roles and responsibilities of the various members in this Project. the format for furnishing the above information be given at Annexure 4 [to be submitted by the Bidder as P2].

13.4 In case of consortium, members of the consortium shall enter into a Consortium Agreement for the purpose of submitting the proposal. The Consortium Agreement shall contain, inter-alia, the following provisions:

a. commitment to form a Special Purpose Company, to undertake the Project in case it is awarded to the Consortium. b. outline of the proposed roles and responsibilities of each Consortium member at various stages.

c. joint and several liability of the Consortium Members for implementation of the Project.

d. commitment of the minimum equity stake of the Lead Member and which should not be less than the threshold limit as specified in para 4.1 e. willingness of the Consortium to carry out all the responsibilities as Licensee in compliance with all terms and conditions of the WA No.1460/08 24 License Agreement to be entered into with the Licensor, in the event of the Bidder being selected as the Licensee. The Consortium Agreement entered into among the Members of the Consortium should be specific to this project and should contain the above requirements, failing which the proposal shall be treated as non-responsive. The Bidder is free to submit the Consortium Agreement in its own format. (Annexure 6) (to be submitted by the Bidder as P4). The consortium shall obtain a legal opinion by a lawyer/law firm of national/international standing that the Consortium Agreement is valid and binding and has all the required approvals to submit the Proposal. the Bidder is required to submit the legal opinion in its own format (Annexure 7) (to be submitted by the Bidder as P5).

All pertinent information that may adversely affect the performance or the responsibilities of any Consortium member, such as ongoing litigation, financial distress or any other such matter must be disclosed in the formate given at Annexure 8 (to be submitted by the Bidder as P5). 13.8 Deviations The Bidder shall not be allowed any deviation and/or deficiencies in the Bidder's full compliance with the requirement of the RFP.

14. Bidders Responsibility:

14.1. The Bidder is expected to examine carefully the contents of all the WA No.1460/08 25 documents provided. Failure to comply with the requirements of RFP will be at the Bidders own risk.

21. Opening of Proposal by Sponsor:

21.1 The Outer Cover and Cover-1 (Statement of Qualification) of all the bidders who submitted the proposals shall be opened in the presence of the designated representatives of the Bidders who choose to attend the proposal opening on the time and date specified in the Letter of invitation in the office of the Sponsor. Bidder's representative may attend the opening and shall sign a register as proof of their attendance. Bidders' names and any such other details as the Sponsor may consider appropriate, will be announced by the Sponsor at the time of opening of the outer cover and Cover.1 (Statement of Qualification). In the event any bid is found without proposal security in the outer cover, Cover 1, Cover 2 and Cover 3 of the bidder will be returned unopened. 21.2 The Cover - 2 (Technical Proposal) of only those bidders who have passed the Qualification Criteria shall be opened and evaluated. 21.3 The Cover - 3 (Financial Proposal) of only those bidders who become eligible after the evaluation of technical proposal shall be opened. The time and date of opening of financial proposals shall be informed to the eligible bidders, giving minimum 7 days prior notice, to enable them attend the bid opening.

WA No.1460/08 26 22 Examination of Proposals:

22.1 Non Responsive Proposals: The Sponsor will examine the Proposals to determine whether they are complete, whether the documents have been properly signed and whether the Proposals are generally in order. Any proposals found to be non-responsive, inter alia, for the following reasons:

   a.    received after the Proposal Due Date.

   b.    not signed, sealed and marked as stipulated in para 15.16.

   c.    does not contain the information, payment and documents (in formats

         specified if any), as requested in the RFP.

   d.    does not mention the Proposal Validity Period as set out in Para 17.

   e.    inconsistencies between the Proposal and the supporting documents.

will be rejected by the Sponsor and not included for further consideration.

22.2: Detailed Examination: The Sponsor will carry out a further examination of the Proposals in order to determine whether the Proposal submitted by the Bidder is substantially responsive to the requirement set forth in the Proposal. In order to reach such a determination, the Sponsor will examine the information supplied by the Bidders and other requirements in the Proposal, taking into account, inter alia, the following factors:

   a.    Overall completeness and compliance.

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   b.    Any deviations to the requirements stipulated in the Proposal.

   c.    Any other relevant technical factors that the Sponsor deems necessary

or prudent to take into consideration including interpretations of the Bidder, which are different from that of the Sponsor.

d. Any factor which affects in any substantial way, the scope, quality or performance of the project.

   e.    Any factor which is inconsistent with the RFP.

   f.    Any factor which would affect unfairly the competitive position of

other Bidders presenting substantially responsive bids. The Sponsor reserves the right to reject any Proposal which in its opinion is non-responsive and no request for modification or withdrawal shall be entertained by the Sponsor in respect of such Proposals.

23. Clarifications on Proposals:

23.1 The Sponsor, may at its discretion, call for clarification and/or presentation from any or all Bidders, or conduct clarification meeting(s) with any or all Bidders to clarify its Proposal.

27.1 The Sponsor/GOK reserves the right to accept or reject any or all Proposals, and to annul the proposal process and reject all Proposals at any time prior to nomination as Licensee, without thereby incurring any kind of liability, direct or indirect, to the affected Bidder(s). The Sponsor/GOK would be under no obligation to inform the affected WA No.1460/08 28 Bidder (s) of grounds for the Sponsor's/GOK's action.

26. PROCEEDINGS IN THE WRIT APPEAL:

Affidavit filed by the Law Secretary:

After production of the file pertaining to the legal opinion given by the Law Secretary, a direction was issued to the Law Secretary by this Court to explain the circumstance in which he participated in the EC meetings on 08.04.2008 and 06.05.2008 and also to explain as to why an advice was given in spite of the fact that it was not an inter-departmental reference for legal advice as contemplated in para 112 of the Kerala Secretariat Office Manual.

27. The Law secretary, in the affidavit, has stated that he attended the meeting on the request of the Chief Secretary over telephone as a Special Invitee; In the meeting held on 8.4.2008, informed the EC that since the documents are voluminous, a detailed examination of the documents are required; that upon his opinion, the EC decided to evaluate the Qualification Criteria of the appellant and opening of their Technical Bid after receiving opinion; that after receiving documents the file was sent to his subordinates for scrutiny and the Deputy Secretary (Law) drafted the opinion; that the Additional Secretary (Law) noted in the file that an 'off the record advice / gist of points' may be furnished to the Chief Secretary as the request cannot be taken as an inter-departmental reference for legal advice as contemplated in para 112 of the Kerala Secretariat Office Manual; that he approved the advice WA No.1460/08 29 of Additional Secretary and that opinion was furnished to the Chief Secretary;

that since the request of opinion in the instant case was not a routine reference through file, the advice was not given under signature and seal; that an 'off the record advice' was given for consideration of the meeting of the Committee; that as per rules, request for advice from Head of Departments or Government bodies is to be routed through the concerned Administrative Department; that nothing in the Secretariat Manual prohibit giving advice even in the absence of a reference from an Administrative Department; that it is usual for the Minister / Chief Secretary requests for an advice on a legal point for the purpose of Committees of this nature; that in response to Annexure 2 letter dated 05.05.2008, he participated in EC meeting on 06.05.2008 as a Special invitee and that the Committee after discussions at length ultimately concluded that the Bid submitted by the Consortium led by the appellant is non responsive in terms of RFP.

28. SUBMISSION ADVANCED BEFORE COURT IN WRIT APPEAL:

Heard Sri. M.K Damodaran (Sr. Advocate) assisted by Sri. Santhosh Mathew on behalf of Appellant, Sri. C.P Sudhakara Prasad, learned Advocate General, assisted by Sri. T. B Hood (Government Pleader) on behalf of 1st respondent, Sri. Gopala Krishna Kurup on behalf of 2nd respondent, Sri. V Chitambaresh (Sr. Advocate) assisted by Sri. Jacob Sebastian on behalf of 3rd WA No.1460/08 30 respondent, Sri. Rajeev Nayyar (Sr. Advocate) assisted by Sri. Paul Abraham Vakkanal on behalf of 4th respondent and Sri. Gilbert George Correya on behalf of 5th respondent.

29. Arguments of the learned counsel for the appellant:-

The learned Senior Counsel for appellant, Sri.Damodaran, submits, that, the impugned judgment is liable to be set aside as it is against the principles of natural justice; that the Court ought not to have dismissed the Writ petition based on the reasonings stated therein whereby the opinion of law secretary is approved; that non-consideration of the technical and financial proposal of the appellant is unjustified, arbitrary and illegal; that the appellant is unjustifiably excluded from the zone of consideration; that the entire exercise by respondents 1 and 2 was done in a clandestine manner to bestow undue favour on the fourth respondent; that a strategically and economically significant multi-crore project is awarded to a bidder whose bid is eight times less favorable than that of the Appellant at a loss of about Rs. 332 crore to the public exchequer; that the authorities cited by the learned single judge is not applicable to the facts of the case and are irrelevant; that opinion of law secretary is vitiated by mala fides; that at no point of time the advisers or the EC pointed out that the use of expression 'liability' instead of 'responsibility' is to be incorporated in the agreement whereas in the case of other bidders, such suggestions were not made; that right from the beginning of bidding process, WA No.1460/08 31 Portia Management Services was a party to the bid; that it was made very clear that Portia was the subsidiary of Peel Ports; that the change in new agreement was made in compliance of Exhibit P9; that the opinion of Law Secretary vitiated the entire process of decision making by the EC and he ought not to have been permitted to participate in EC meeting as a Special Invitee; that the respondent acted in a cunning manner so as to exclude the consideration of appellant's bid and therefore it is prayed to allow the Writ Appeal.

30. Arguments advanced by the learned Advocate General:

The learned Advocate General would submit, that, as per Clause 3.4 of RFP Vol.I, only the lead member of a consortium can be changed with prior written consent of the Sponsor. The said clause further elaborated that applicant is free to select the other members of the consortium and finalise the shareholders of the consortium before the submission of proposal. RFP does not permit change of consortium member after the submission of the proposal.

31. It is submitted, that, the appellant along with their proposal submitted the Consortium Agreement dated 4.10.2007. In the said Consortium Agreement, Portia Management Services Ltd. signed on behalf of Peel Ports Ltd.. The phrase, "on behalf of" connotes an agency, which brings about the relationship of principal and agent. It means that Portia signed the consortium agreement as an agent of Peel Ports Ltd.

WA No.1460/08 32

32. It is further submitted that, on 05.1.2008, the RFP was amended. The amendment to RFP was with regard to minimum equity stake of the lead member in the Special Purpose Company to be formed. Since the appellant's consortium agreement was executed prior to the amendment of RFP, in the Consortium Agreement it was not stated that the lead member shall hold a minimum equity of 26% in the Special Purpose Company. To meet the above requirement and the notarization of signatures as also the stamping of Consortium Agreement, the appellant, vide Ext.P9, was requested to collect the original consortium agreement. In the fresh consortium agreement dated 11.3.2008, Portia Management Services Ltd. signed the agreement on its own behalf. In the original consortium agreement, Portia signed on behalf of Peel Ports Ltd., and was an agent of Peel Ports. In the fresh consortium agreement, the words "on behalf of Peel Ports Ltd." were deleted and Portia signed the consortium agreement as a member of the Consortium. Hence there was a change in the consortium membership, which is impermissible as per Clause 3.4 of RFP Vol.I. This is an incurable fatal defect.

33. It is further submitted that, in the Statement of Qualification form, the appellant had shown the financial details of MHDC (taken over by Peel Ports) and also the financial details of Peel Ports. If Peel Ports were not the Consortium Member, their financial statements need not have been submitted along with the bid.

WA No.1460/08 33

According to the appellant, Portia is the subsidiary of Peel Ports and hence the financial details of Peel Ports was submitted. Even assuming that Portia is a subsidiary of Peel Ports and was the Consortium member as per the original agreement, this contention is without any basis. A company being an artificial person having separate legal entity cannot rely on the financials of its holding company to meet the qualification criteria in a bidding process. But for the financial statement of Peel Ports, the Consortium led by the appellant would not have met the financial qualification criteria as on the date of submission of the bid, i.e. on 31.1.2008.

It may be relevant in this regard to state that the Balance Sheet and Profit and Loss Account of the appellant for the year ending 30.9.2007 was adopted only on 20.3.2008; much after the last date for submission of bid. According to the appellant, Portia has always been the member of the Consortium and not the Peel Ports Ltd. But the supporting documents produced to meet the qualification criteria were that of Peel Ports Ltd.. Instead of Peel Ports accounts, if the accounts of the Portia were submitted (if Portia is Consortium member as claimed by the appellant) along with the bid, the appellant would not have passed the financial qualification criteria and on that sole ground itself their bid is liable to be declared as non-responsive.

34. It is submitted that, a reading of the original as well as the fresh consortium agreements would demonstrate beyond any doubt that there WA No.1460/08 34 has been a change in the membership of the Consortium led by the appellant after the submission of the bid on 31.1.2008. In view of Clause 3.4 of RFP Vol.1, change of consortium members after submission of the bid is impermissible. There was inconsistency between the proposal and the supporting documents which is a ground under Clause 22.1(e) of the RFP Vol.I to declare a bid non-responsive.

35. It is further submitted that, the appellant has stated that the words "on behalf of Peel Ports" was deleted as required by the Advisor. The Advisor has not required the appellant to declare the words "on behalf of Peel Ports". The Advisor, vide Ext.P9 letter, brought to the notice of the appellant that Portia Management Services has signed the consortium agreement on behalf of Peel Ports Ltd. but the Peel Ports Ltd is not a member of the Consortium. It was further observed in Ext.P9 letter, that necessary documentations from various consortium members authorising the signatories of different documents have not been submitted along with the bid. It is therefore clear that the appellant was never directed to delete the words "on behalf of Peel Ports" in the original consortium agreement. Only defects were required to be cured. Instead of producing the document from the Peel Ports Ltd. authorising Portia to sign the consortium agreement, the appellant produced resolution of Portia itself and to match it with the consortium agreement, the words "on behalf of Peel Ports" was omitted in the fresh WA No.1460/08 35 consortium agreement.

Clause 3.5 of RFP Volume I says that all members of consortium shall be jointly and severally liable for the execution of the Project in accordance with the terms of the Licence Agreement and a statement to this effect shall be included in the Consortium/Shareholder's agreement. Clause 4.1 (e) provides that the consortium agreement shall be specific to this proposal and clearly allocate responsibilities and duties between the members and lead member, including percentage of shareholding. The said Clause further provides that notwithstanding this, the consortium members shall be jointly and severally liable to Licensor for implementation of the Project. The learned Advocate General invites our attention to clause 13.4 of RFP Vol.I, which reads as follows:

"13.4: In case of consortium, members of the consortium shall enter into Consortium agreement for the purpose of submitting the Proposal. The consortium agreement shall contain inter alia, the following provisions:-

   a)     xxx

    b)    Outline of the proposed roles and responsibilities of each

          consortium member at various stages.

    c)    Joint and several liability of the consortium members for

          implementation of the Project.

    d)    xxx

    e)    xxx

WA No.1460/08                             36

The Consortium agreement entered into among the members of the Consortium should be specific to this Project and should contain the above requirements, failing which the proposal shall be treated as non-responsive.

36. It is then submitted that the requirement of incorporating the joint and several liability clause in the consortium agreement has been stated with emphasis in various clauses of RFP. This was an essential condition as per RFP documents. Whether a condition is essential or collateral is to be ascertained with reference to the consequence of non-compliance thereof. If non-fulfilment of the requirement results in the rejection of tender, it would be an essential condition. (2002) 6 SCC 315, Paragraph 6. The consequence of non-incorporation of joint and several liability clause was also stated in Clause 13.4 of RFP Vol.I. Bidders were sufficiently warned that the failure to incorporate joint and several liability clause in consortium agreement would result in treating the proposal as non-responsive. Hence it was an essential requirement in the consortium agreement. It is not in dispute that the original as well as the fresh consortium agreements submitted by the appellant did not contain a statement to the effect that the members of the Consortium shall be jointly and severally liable to Licensor for the implementation of the Project.

37. It is further submitted that, it was the duty of the appellant to ensure that the documents it had submitted complies with the requirement of RFP. In three different clauses of RFP Vol.I, it was clearly mentioned that the WA No.1460/08 37 consortium agreement should contain a statement to the effect that the members of the consortium shall jointly and severally liable for the implementation of the project. Consequence of non-incorporation of such a statement in the consortium agreement was also stated in clause 13.4 of RFP Vol.1.

38. It is further stated that, paragraph 8 of RFP Volume 1, Section 1 warns the bidders that, failure to comply with the requirement of RFP and submission of proposal shall be at the bidders own risk. In paragraph 9 of the RFP Volume I, Section 1, the bidders were required to carefully review the contents of RFP; seek necessary clarifications, if any; and raise questions about ambiguities and concerns. Clause 14 of RFP Vol.I Section IV, requests the bidders to examine carefully the contents of all the documents provided and states that failure to comply with the requirement of RFP will be at the bidder's own risk Therefore, the responsibility of making the bid complaint with RFP provisions solely rests with the bidders.

The Sponsor, of course, can call for clarification from the bidders. But neither the Sponsor nor does the Licensor owe any duty or responsibility to the bidder to point out the vital defects in the documents it had submitted. In an international tender of this nature, where the bidders have the assistance of legal experts, they are expected to comply with the essential requirements of RFP. The degree of care required in such bidding is greater WA No.1460/08 38 than in ordinary local bids for small works (2001) 2 SCC 451, Para 23, 24 and

31. The Supreme Court had held in (1990) 2 SCC 488 Para15 that, the party issuing the tender has the right to punctiliously and rigidly enforce them.

39. Learned Advocate General points out that, according to the appellant, examination of the proposal should have been undertaken by the Sponsor and not by the Evaluation Committee. This contention, which has no foundation in the pleadings, is raised referring to Clause 22 of RFP Vol.I, Section IV.

40. It is also stated that the licensor is not powerless to evaluate the proposals submitted by the bidders. The Licensor's power can be traced to paragraph 5 of RFP Volume 1, Section I. The Government being the Licensor, constituted Bid Evaluation Committee to evaluate the proposals. The Committee was constituted as per a Government Order, on a request from the Sponsor. The Senior Officers of the Sponsor were members of the Bid Evaluation Committee. The ultimate authority to take a decision in the matter of awarding contract to the successful bidder is the Government of Kerala. The Government can therefore constitute various committees to facilitate the decision making process. In a multi tire decision making process, the Government which has to take the final decision, can constitute any number of Committees even if the same is not specified in the RFP. It is relevant in this regard to refer (2006) 10 SCC 1, Para 14, 24 and 25, wherein the WA No.1460/08 39 Honourable Supreme Court has negatived a similar approach.

41. It is further stated that the Sponsor has invited proposals on behalf of the Government of Kerala. Government designated the Sponsor as the Nodal Agency for the implementation of the Project. Sponsor was therefore an agent or delegate of the Government. Delegation of power does not amount to denudation of the delegator's authority. Whatever, the agent/delegate can do, can be done by the Principal/Delegator also. Therefore, there was nothing wrong in the Bid Evaluation Committee, constituted by the Government on the request of the Sponsor, examining the proposals. The report of the Bid Evaluation Committee was only in the nature of a recommendation. The same would have been the position had the bids were evaluated by the Sponsor. The Government is not bound by the recommendation. The Government may fully accept or reject the recommendation. The report is an input for taking a final decision by the Government. The Council of Ministers, which is the highest decision making body in the executive hierarchy, took the final decision.

42. Learned Advocate General further points out that the Project Advisor got the legal aspects of the documents submitted by the bidders examined by their legal consultant, M/s.Universal Legal, Bangalore. The advice tendered by Universal Legal is quoted at para 2.4 of the minutes of the Bid Evaluation Committee meeting held on 25.2.2008. After the submission WA No.1460/08 40 of bids, the appellant submitted fresh consortium agreement dated 11.3.2008 and the consortium led by Nagarjuna submitted a joint venture agreement dated 7.3.2008. The original consortium agreement of the appellant was returned to meet the requirement of 26% equity stake in the Special Purpose Company and the notarization of signatures as also the stamping of consortium agreement. In the Memorandum of Understanding submitted by Nagarjuna, it was stated that the same would have validity till the rejection of the proposal submitted by the Consortium or entering into a joint venture agreement upon the Project being awarded to the consortium. So the MoU was returned to Nagarjuna.

43. The learned Advocate General would further submit that, both the appellant and Nagarjuna submitted fresh consortium agreement and joint venture agreement executed in March, 2008, i.e. after M/s.Universal Legal tendered their advice on the legal aspects of the documents. No other bidders had submitted fresh consortium agreements after the submission of the bid on 31.1.2008. The fresh consortium agreement and joint venture agreement submitted by the appellant and Nagarjuna were given by the Project Advisors to their legal consultant, M/s.Universal Legal, which on 4.4.2008 gave an opinion.

44. It is stated that the Project Advisor, IL & FS prepared the note for Evaluation Committee meeting on 8.4.2008. Along with the note for WA No.1460/08 41 the Bid Evaluation Committee meeting on 8.4.2008,. the Advisor annexed the summary of the points for consideration of the Law Department. For easy reference, Para 4.4 of the note prepared by the Advisor is reproduced below:

"4.4. A summary of the clarification required in the original bids and clarifications/additional information furnished by Bidders in annexed. Also annexed is a summary of points for legal consideration, which have been vetted by a legal Consultant"

The first annexure referred above is at Page 497, 498 and 499 of Vol.II of Writ Appeal Paper Book. The second annexure, which is the legal points for consideration of the Law Department, is at Page 506 and 507. The second annexure should have been arranged in continuation of page No.499. In the Government file, produced before this court, and in the report submitted before the learned Single Judge, the second annexure was arranged as a continuation of the first annexure. The change in the pagination was done by the appellant.

45. It is further stated that, in the points for legal consideration of the Law Department, prepared by the Project Advisor, A(5) refers to the fresh consortium agreement of the appellant dated 11.3.2008 and B(4) refers the fresh Joint Venture Agreement dated 7.3.2008 submitted by Nagarjuna. In Clause (C) also, reference to these documents are made.

46. Learned Advocate General further points out that on receiving the note for the Bid Evaluation meeting on 8.4.2008, the Chief WA No.1460/08 42 Secretary, who is the Chairman of the Bid Evaluation Committee, requested the Law Secretary to be present in the Bid Evaluation Committee. The Chief Secretary informed the Law Secretary that a formal request in this regard would be made by the Sponsor. The Law Secretary thereafter received Annexure I letter produced along with his affidavit. Accordingly, the Law Secretary attended the meeting on 8.4.2008 as a Special Invitee.

47. The learned Advocate General also states that the fresh consortium agreement dated 11.3.2008 was placed before the Bid Evaluation Committee for the first time on 8.4.2008 . Even before the discussion with the Law Secretary in the meeting, the Committee at Para 2.1 (iv)(2) noted that the Portia signed fresh consortium agreement instead of "on behalf of Peel Ports Ltd." as mentioned in the original consortium agreement. The Committee thereafter discussed the JV agreement dated 7.3.2008 submitted by Nagarjuna. The Committee then noted that the responsiveness of the bid submitted by the appellant needs to be ascertained keeping in view of the Consortium Agreement dated 11.3.2008 which prevails over and supercedes the original consortium agreement dated 4.10.2007 submitted along with the bid. The Committee after taking note of the opinion of M./s. Universal Legal sought the views of Law Secretary. Since the documents to be verified were voluminous, the Law Secretary sought time for a detailed examination to ascertain whether the documents submitted would comply with the provisions of law and RFP WA No.1460/08 43 documents.

As submitted earlier, the Bid Evaluation Committee, was not discharging any statutory or quasi judicial functions. The duty of the Committee was to facilitate an administrative decision making process. It may not be legally permissible for a statutory or quasi judicial body to invite a person who is not a member of that body. But a committee of this nature constituted to assist the government, which is the final authority can invite or take advice from experts in the respective field to arrive at a correct decision.

48. It is further stated that, the bid evaluation committee was constituted by the Government. The Law Department's participation in the process of evaluation was taken note of by the Government as evidenced by Annexure 3 Government Order produced along with the affidavit of the Law Secretary. Therefore, the Law Secretary's participation in the Bid Evaluation Committee in any case stands ratified. In support of this contention, the learned Advocate General relies on the following decisions:

1. (1989) 3 SCC 132, Para 26, 27, and 28.

2. (2003) 4 SCC 239, para 42.

49. Learned Advocate General also points out that the entire process of bid evaluation had culminated in the Government issuing G.O.(Ms) No.28/08/F & PD dated 24.5.2008 approving the proposal submitted by the consortium led by the 4th respondent. Copy of the said Government Order was WA No.1460/08 44 handed over by the learned Advocate General to the counsel for the appellant when the case came up for consideration in the last week of May, 2008. In a note dated 30.5.2008, filed at the original stage, the learned counsel for the appellant admitted that he had received a copy of the Government Order. But the appellant has not amended the writ petition to challenge the final decision taken by the Government. As submitted earlier, the decision of the Bid Evaluation Committee was only recommendatory in nature. The final decision was taken by the Council of Ministers. The decision of the Council of Ministers was followed by the Government Order. In the absence of any challenge against the Government Order, the petitioner cannot seek any relief.

50. Learned Advocate General further points out that the recording of reasons in an order or decision serves two purposes. One is to enable the person affected by an order to know the reasons for passing such an order. The second is to enable the appellate authority or the court exercising judicial review to ascertain the reasons for passing an order. As per Clause 27 of RFP Vol.I, the Sponsor/GoK is not under any obligation to inform the affected bidder of the grounds for the Sponsor/GoK's action. Therefore, the bidder has no right to know the reasons for the rejection.

51. It is further submitted that a reading of the entire report of the Bid Evaluation Committee discloses the reasons for treating the appellant's bid non responsive. Even if an administrative decision does not ex facie WA No.1460/08 45 disclose the reasons, the decision can be sustained by explaining the reasons with the help of records available on file. The same principles may not apply to statutory or quasi judicial decisions. In aid of this submission, the learned Advocate General relies on the following decisions:

1. (1991) 3 SCC 38, para 8, 9 and 10.

2. 1991 (Supp) (1) SCC 161, para 6.

3. (1991) 1 SCC 212, para 13.

4. (1995) Suppl (1) SCC 434, Para 12.

5. 1992 (1) KLJ398, Para 8

6. AIR 2006 Mad. 45, para 4 and 5.

52. As regards the scope of Judicial Review in Contractual matters, learned Advocate General submits that, selection of a bidder by Government for execution of a Project is essentially an administrative action. Principles relating to the scope of judicial review of administrative decisions and exercise of contractual powers by government bodies have been considered in detail in Tata Cellular vs. Union of India. The Honourable Supreme Court held that judicial review is concerned with the decision making process. In para 93, it was held that the duty of the Court is to confine itself to the question of legality. In para 113 of the said judgment, the Hon'ble Supreme Court has summarised the principles relating to the scope of judicial review in contractual matters. (AIR 1996 SC 11).

WA No.1460/08 46

In Air India Ltd. vs. Cochin International Airports Ltd. (2000) 2 SCC 617, para 7, the Apex Court, after a review of the various judgments on the point, held that even when some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not on making out a legal point. The court further observed that the court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to the conclusion that overwhelming public interest requires interference, the court should intervene. A similar view was expressed by the Hon'ble Supreme Court in AIR 1999 SC 393, Para 11. In that judgment, the Apex Court observed that, it is important to bear in mind that by Court intervention, the proposed project may be considerably delayed and therefore, unless the Court is satisfied that there is substantial amount of public interest or the transaction is entered into mala fide, the Court should not intervene under Article 226 in disputes between two rival tenderers. In (2005) 6 SCC 138, Para 12, the Court held that modern trend points to judicial restraint in reviewing administrative actions. In para 15, it was held even when some defect is found in the decision making process, Court must exercise its discretionary power with great caution.

WA No.1460/08 47

53. Learned Advocate General also relies on the decisions of the Apex Court reported in (2006) 11 SCC 548 - Paras 56 & 69; 2001 (2) SCC 451, para 23, 24, and 31: and (1990) 2 SCC 488, which are stated to be relevant in deciding the present case.

54. Learned Advocate General would submit that the allegation regarding mala fides is pale and not sufficiently pleaded; that the appellant was given sufficient opportunity and time to produce documents; that the change of consortium member after the submission of the bid is not permissible; that the submission of fresh consortium agreement on 11.03.2008 ie; after the due date for submission of RFP is not permissible; that joint and several liability clause in the RFP is very relevant and without agreeing for the 'liability' it is not permissible for parties in the consortium to proceed with the bid; that the joint liability clause is an essential clause; that it is the duty of appellant to incorporate to check the requirements in terms with the RFP documents and at a later stage they cannot turn around and say that they were not put to notice in this regard; that the government is free to constitute as many number of committees as necessary for the purpose of evaluation of bid; that the participation of Law Secretary in the EC meeting cannot be found fault with and the EC is competent to seek opinion from law secretary; that as per the clause in RFP, the sponsor is under no obligation to assign reason for rejection of bid and as such the bidder is having no right to know the reasons for WA No.1460/08 48 rejection; that the decision of EC being an administrative decision, the reasons could be assigned later with the aid of files; that the scope of judicial review in the instant case is very limited and therefore the Writ Appeal is only liable to be dismissed.

55. Arguments of learned Senior Counsel for 4th respondent:

Sri.Rajiv Nayyar, learned Senior Counsel for the 4th respondent would submit that, the Evaluation Committee was the sole authority to complete the selection process and finalize the successful bidder. The sponsor of the Project, under the various provisions of the bid documents, had the right to accept or reject the proposals which were found to be non-responsive. The external agency engaged by the Sponsor viz., IL&FS, was engaged to assist the Sponsor of the Project in the selection process, and the Sponsor in turn placed all materials before the Bid Evaluation Committee for finalisation of selection process. The advice of IL&FS was not at all binding on the Bid Evaluation Committee or the Sponsor. IL&FS had a limited role in the bid process, which was only to assist the Licensor/Sponsor in selection process.

56. It is further submitted, that, in pursuance of the constitution of the High Empowered Evaluation Committee, at the meeting held on 25th February, 2008, clarifications/additional information were sought for from the bidders. This is in tune with Clause 23.1 of the RFP empowering the Sponsors WA No.1460/08 49 to call for clarification/information from any bidder. From time to time, time was extended for the eligible bidders to furnish the information and answer the clarifications sought for an in the case of Zoom, the appellant herein and Apollo, time was finally extended till April 8th 2008. In so far as other three bidders are concerned, namely, NCC, Videocon Industries and the 4th respondent, all information being forthcoming, they were held to be pre-qualified at the meeting of the Evaluation Committee held on 8th April 2008. Since Apollo did not furnish the requisite information, no further consideration of the bid was made but insofar as the Appellant is concerned, its bid was evaluated on 6th May, 2008 and was found to be non-responsive. It is also pointed out that the Bid Evaluation Committee for a more transparent evaluation of the bid of the appellant had also sought the advice of the Law Department of Kerala.

57. It is further argued by the learned Senior Counsel Sri.Rajiv Nayyar, that, the appellant's consortium agreement dated 11th March, 2008 and 10th March, 2008 along with other documents, were examined by the Evaluation Committee in the light of the advice of the Law Department on 6th May, 2008 and it was found to be non-responsive on two heads; (i) failure of the appellant Consortium to provide in the Consortium Agreement, the joint and several liability of the consortium members for implementation of the project; (ii) change in the member of the consortium without the WA No.1460/08 50 consent/approval of the Sponsor.

58. It is pointed out that, in so far as the first ground for rejection is concerned, the holistic reading of clauses 3.5 and 4, clause 13.4 and a reference to the Consortium Agreements dated 4th October, 2007 and 11th March, 2008 would ex facie make the Appellant non-responsive. In fact, the RFP at various places makes it incumbent in cases where consortium is found that each of the members should assume joint and several liability for implementation of the project. In fact, the Consortium Agreement furnished by the appellant postulates to the contrary by providing that, "none of the parties would incur any liability on behalf of the others". The use of the words, "jointly and severally responsible" in the two consortium agreements was done so conscious of the restriction/impediment in the consortium agreement stipulating that none of the parties would incur any liability on behalf of the others. To elaborate the first ground of rejection further, the appellant failed to fulfil the mandatory conditions of the RFP in respect of incorporation of "joint and several liability of the consortium members to the Sponsors" as stipulated.

59. Learned Senior Counsel further urged, that, the clauses termed under 'mandatory' denote that, the same shall be strictly adhered with and no deviation from the same is permitted. When such mandatory clauses are incorporated in the RFP, the bidders have no choice except to follow the same. WA No.1460/08 51 Further the said mandatory clauses as mentioned above are simple, clear and without any ambiguity. In case of any ambiguity of the clauses of the RFP, opportunity is provided to the intending bidders to seek clarifications on the same and as no clarifications are sought by any of the bidders including the appellant herein on the above clauses, it is deemed that the same are understood and accepted by all the bidders and any deviation from the same shall be treated as non fulfilment of the mandatory clauses by the bidders and as such, non-responsive. But the appellant, contrary to the mandatory clauses, as stated above, incorporated the words "jointly and severally responsible" in both the consortium agreements dated 04.10.2007 and 10.3.2008. On a plain reading of the consortium agreements submitted by the appellant both on 4th October, 2007 and 11th Mach, 2008, it can be seen that the appellant Consortium was never intending to bind themselves to be held liable to the Project Sponsor or to the State of Kerala towards the execution of the Project at hand.

60. It is also argued, that, the contention of the appellant that M/s.Apollo Consortium was given opportunity to include the words jointly and severally liable in their agreement is absolutely false and misleading as it was clearly understood that the said consortium submitted the bid including the words "jointly liable" but omitted to include the word "several". Hence the contention of the appellant that a fellow bidder was given leverage to include the word "liable" is absolutely wrong and incorrect. The learned Single Judge WA No.1460/08 52 has also verified all the consortium agreements submitted by the other four bidders and upon verification, was satisfied that other than the appellant, all others have mentioned the word "liable" in their agreements. So much so, the appellant cannot now harp on the point saying that they should have been given an opportunity, when none of the others were given an opportunity to add the word "liable" into their agreements. The contention of the appellant that the advisor or the Sponsor or the Bid Evaluation Committee were under the opinion that the usage of "responsible" instead of the word "liable" was found to be substantial compliance of the terms of the RFP, is wrong. Neither the Sponsor nor the State nor the Bid Evaluation committee were ever given the opinion that the use of the word "responsible" instead of the word "liable" would be substantial compliance of the RFP conditions. The "liability" of the members of the Consortium is to the Sponsor and the "responsibility" is only among the members of the Consortium, as rightly held by the learned Single Judge. Learned Senior Counsel further submitted that the Government and the Project Sponsor and the Bid Evaluation Committee only followed the correct procedures/rules and regulations and conditions in the RFP, and nothing arbitrary was done by them.

61. As regards the second ground for disqualification, the learned Senior Counsel pointed out that the Appellant itself intended that the Consortium Agreement dated 11th March, 2008 should prevail over the WA No.1460/08 53 October, 2007 Agreement, whereas in the October 2007 Agreement, Portia signed the Consortium Agreement on behalf of Peel Ports Ltd. and also submitted the profit and loss accounts and the balance sheet of Peel Ports Ltd. In the new Consortium Agreement dated 11th March 2008, Portia described itself to be a member of the Consortium in its own right and submitted its own financial information in support thereof. This obviously means that Portia intended itself to be considered as such. This was obviously not in accordance with the RFP because clause 3.4 puts an embargo on any change in the members of the Consortium after the submission of the bid. The only restricted right of change permitted by the RFP is in the change of a lead member among the Consortium members with prior written consent of the Sponsor, but it is not permitted to change a member of the consortium even with the consent of the Sponsor. To elaborate the second ground or rejection, the appellant has projected M/s.Peel Ports Ltd. as the consortium member, which is very clear from the consortium agreement dated 4.10.2007, which clearly states, that, "Portia Management Services Ltd. on behalf of Peel Ports Ltd". This can only mean that Portia Management Services acted on behalf of Peel Ports and the appellant never projected Portia Management Services as the consortium member. Further this Consortium Agreement could not have been held to be a valid one due to the reason that, though Portia signed on behalf of Peel Ports Ltd., they were never authorised to do so. The appellant did not submit any WA No.1460/08 54 documentary proof to the Sponsor that Portia is authorised to sign on behalf of M/s.Peel Ports Ltd. The explanation given by the appellant to say that Portia was the "International Arm of Peel Ports Ltd." is also not convincing or relevant in the present context as no document was produced to prove Portia as the international arm of Peel Ports Ltd. Merely contending that it is an international arm of an organisation does not, by itself, mean an authorisation to sign for and/or on behalf of that organisation. Further, the intention of Portia to project M/s.Peel Ports is also clear from the fact that the financials of Peel Ports were produced along with the initial bid proposals. Signing without authority and producing financial statements without proper authority does not divulge a genuine intention, and in the best interest of the State, the State and the Sponsor thought it fit to reject such a bidder at the pre-qualification stage itself, which was also upheld by the learned Single Judge.

62. It is further argued by the learned Senior Counsel Sri.Rajiv Nayyar that, the contention of the appellant that the third respondent, IL&FS was satisfied with the contents of the revised consortium agreement, dated 11.3.2008 is incorrect and the IL&FS has also limited role in the process as an advisor and facilitator to collect required information from the intending bidders and place such information furnished by the bidders before the Sponsor who in turn places the same for evaluation before the Bid Evaluation Committee. As such the contention of the appellant that the consortium WA No.1460/08 55 agreement, dated 11.3.2008, was accepted by IL&FS is incorrect. Further, IL&FS never asked for any documents to be produced by the appellant as seen from the contents of Ext.P9.

63. Learned Senior Counsel further states that, in a contractual matter, when a tenderer is disqualified by the expert committee, such a decision cannot be interfered with unless the decision making process is vitiated, which has been rightly held so, by the learned Single Judge. It is a well settled proposition that the court will not interfere with the merit of the decision of the expert body, but will only review the decision making process. The learned Single Judge was perfectly justified in not interfering with the decision of the Bid Evaluation Committee and the Sponsor to disqualify the petitioner in the pre-qualification stage. Further, the learned Single Judge rightly observed that the financial bid of a tenderer, who is so disqualified in the pre-qualification stage is not required to be opened in exercise of judicial review, bypassing the disqualification made by the expert committee.

64. It is further pointed out by the learned Senior Counsel that the decision of the Bid Evaluation Committee in the meeting held on 6th May, 2008 holding the appellant to be non-responsive is well founded as would be borne from the narration of the infirmities in its bid as detailed above. In the minutes of the meeting of 6th May, 2008, namely Clause 2.3 (at page 514 of Vol.II - WA), the Evaluation Committee independently came to the conclusion WA No.1460/08 56 that the bid of the Appellant was not responsive. Of course, due regard was given to the advice of the law department, which was in consonance with its own view.

65. It is further urged that the terms and conditions of the RFP do not impose any obligation on the Sponsor to inform the bidders about their decision in treating any bid as non-responsive. Elaborate reasons or any further justification was to be done by the Evaluation Committee since the process of finalising the tender at best is only an administrative decision and as such the decision need not be reasoned. In support of this contention, the learned Senior Counsel relies on the following decisions:

1. Kumari Srilekha Vidyarthi vs. State of U.P. and Ors.(1991) 1 SCC 212

2. National Institute of Mental Health & Neuro Sciences vs. Dr.K.Raman & Ors, 1992 (Supp) 2 SCC 481.

3. S.N.Mukherjee vs. Union of India, (1990) 4 SCC 594.

4. Union of India & Ors. vs. E.G.Nambudiri (1991) 3 SCC 38.

5. Sarat Kumar Dash & Ors. vs. Biswajit Patnaik & Ors. 1995 (Supp) 1 SCC

434.

66. The learned Senior Counsel further submits that it is also settled that writs should not be issued by the Courts of Law simply as a matter of course to satisfy an empty formality. To support this contention, the learned Senior Counsel relies on the following decisions:

WA No.1460/08 57

1. S.I. Kapoor vs. Jagmohan & Ors. (1980) 4 SCC 379.

2. Divisional Manager, Plantation Division, Andaman Nicobar Islands vs. Munnu Barrrick and Ors. (2005) 2 SCC 237.

67. As regards the scope for interference, it is submitted, in the case of tender, is very restricted or limited. In aid of this submission, the learned counsel relies on the following decisions.

1. Tata Cellular vs. Union of India & Ors. (1994) 6 SCC 651

2. Air India Ltd. vs. Cochin International Airport and Ors. (2000) 2 SCC 617.

3. Reliance Airport Developers vs. AAI & Ors (2006) 10 SCC 1.

4. W.B.State Electricity Board vs. Patel Engineering - (2001) 2 SCC 451.

68. Arguments of learned Senior Counsel for 3rd respondent:-

Sri.Chithambaresh, learned Senior Counsel for the 3rd respondent would submit that in the absence of necessary averments in the writ petition and also proper prayer, that presence of averments confining the relief and limiting the scope of adjudication, this court while considering the writ appeal filed by the appellant should not permit the appellant to urge any other ground other than what was contended in the writ petition and further in the absence of prayer to quash the decision dated 6.5.2008 of the Bid Evaluation Committee, it may not be proper for the court, at this stage, to entertain the request of the appellant. Failure to amend the writ petition even after production of documents by the State in the Court, is fatal to the appellant. It is also WA No.1460/08 58 contended that the bid evaluation committee need not assign any reason while rejecting the bid as non responsive and lastly the presence of the Law Secretary in the meeting of the bid evaluation committee is also irrelevant for the purpose of deciding the issues raised in the Writ Appeal.

69. Arguments of learned counsel for 2nd respondent:-

Sri.Gopalakrishna Kurup, learned counsel for the 2nd respondent adopts the arguments canvassed by learned Advocate General and also takes us through the affidavit filed by the 2nd respondent in the writ petition.

DISCUSSION

70. Having regard to the arguments canvassed, the following issues would arise for our consideration. They are:-

I. What should be the approach of Court in a matter of this nature? II. Whether the decision making process adopted by the Bid Evaluation Committee, whereby the appellant's bid is found non responsive is correct or not? If so, whether the appellant was discriminated and justifiably excluded from the zone of consideration? III. Is the judgment of the learned single judge sustainable? IV. Whether failure to give reasons by the administrative authority amounts to denial of justice.

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71. Point No I. What should be the approach of Court in a matter of this nature?

While judicially reviewing an administrative decision that involves of a tender process or contract of this nature, the Courts are not very much concerned about the merits of the decision, but concerned with the process of decision making. Law in this regard is well settled and need not be reiterated. Development of law in this regard from the celebrated decision of Supreme Court in R D Shetty v. International Airport Authority AIR 1976 SC 1628 is steady and unambiguous. If the decision making is vitiated by any reason, then the Courts will interfere. (See Tata Cellular v. Union of India AIR 1996 SC 11 (paragraph 113); Air India Ltd. v. Cochin International Airport Ltd. (2000)2SCC 617 (paragraph 7) and B.S.N Joshi & Sons Ltd v. Nair Coal Services Ltd & Others (2006) 11 SCC 548 (paragraph 66); See also Reliance Energy Ltd & Anr MSRDC Ltd (2007) 8 SCC 1; Reliance Airport Developers Pvt. Ltd v. Airport Authority of India (2006) 10 SCC 1; M P Jain and S N Jain, Principles of Administrative Law, 4th Ed (2005 Reprint) Chapter XXII).

72. Point No II.

Whether the decision making process adopted by the Bid Evaluation Committee whereby the appellant's bid is found non-responsive is correct or not? If so, whether the appellant was discriminated and justifiably excluded from the zone of consideration?

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As per the provisions of RFP, the proposed bidder has to submit its Proposal constituting an Outer Cover (covering letter, details of bidder, power of attorney, consortium agreement, 50 million bank guarantee etc), Cover 1 (statement of qualification), Cover 2 (technical proposal) and Cover 3 (financial proposal). Evaluation is carried out in three stages and in the 1st stage, only Outer Cover and Cover 1 will be opened and evaluated. Only bidders who qualifies this stage will be considered at the Cover 2 stage. Similarly, the financial proposal of only those bidders who secured a minimum of 70 out of 100 marks in technical evaluation will be opened. Outer Cover of all the five bidders were opened on 31.01.2008 by the 'Bid Opening Committee' constituted by the 1st respondent and found that all the 'five bidders have submitted valid Proposal Security of Rs. 50 million in the form of bank guarantee, Consortium Agreement and other documents as per RFP. Accordingly the committee opened the Cover 1 and contents were read out'. At this stage, representatives of 2nd and 3rd respondents were present.

73. The Bid Evaluation Committee (EC) constituted by the 1st respondent for the purpose of evaluating the bid, met on 25.02.2008 and found that all the five bidders need to furnish some more details / information / documents and accordingly intimated the bidders. The EC further noted opinion of M/s Universal Legal, Bangalore . 'legal advisers of the Project' and directed all the bidders to submit the additional details / information / WA No.1460/08 61 documents within ten days. With regard to the appellant's bid it is noted that 'power of attorney as well as consortium agreement is not duly stamped, it is not specifically mentioned that lead member will hold 26% equity in SPC and M/s Peel Ports is not a member of the consortium. Meanwhile on 03.03.2008, the 3rd respondent - Adviser to the Project, issued Exhibit P9 letter to the appellant asking them to furnish some documents / clarifications in additional to the points sought by EC. In fact the 3rd respondent also participated in the EC meetings. In response to Exhibit P9, the appellant issued Exhibit P10 reply essentially pointing out that - "As you are aware our consortium agreement was executed on 4th October 2007 and thereafter several modifications were made to the bid document. We are now required to execute a fresh agreement incorporating these amendments along with supporting documents..." Subsequently the appellant submitted the fresh agreement and other documents. New Consortium Agreement was executed on 11.03.2008.

74. In the 2nd EC meeting on 13.03.2008, it is noted that three Consortium submitted the additional documents and two other Consortium(s) including the appellant sought further time to submit the documents and accordingly time was granted. Vide Exhibit P15 letter dated 19.03.2008, the 3rd respondent asked the appellant 'to get the new consortium agreement needs to be stamped in accordance with law and all pages need to be signed by all members. In order to obtain signatures of all the members (some of them are WA No.1460/08 62 abroad), appellant vide Exhibit P16 dated 20.03.2008 sought time till 04.04.2008. In reply, Exhibit P17 dated 27.03.2008 was issued by the 3rd respondent granting a last chance to appellant and cautioned them that in the event of their failure to submit the documents and / or to fulfill the requirements in accordance with the requirements of RFP, and in accordance with law, the Government of Kerala reserves the right to proceed with the bid evaluation process based on the submissions made by the company. Subsequently on 02.04.2008, the appellant submitted all the documents. on 04.04.2008, legal advisers of the Project furnished their opinion stating that "further the consortium lead by Zoom Developers Ltd has submitted a fresh consortium agreement dated 11.03.2008 drawing reference to and superseding the Consortium Agreement submitted earlier with the original bid documents, towards complying with the provisions of RFP. In our view, the JV / Consortium Agreement submitted as above, by the Bidders, based on the request for the same pursuant to the decision of the Evaluation committee, complies with the requirements of RFP and appears to be in accordance with law. The Evaluation Committee may consider the submissions in the light of above."

75. The 3rd EC meeting held on 08.04.2008 considered the documents submitted by the appellant along with the above referred legal opinion and arrived at the conclusion that "Portia Services themselves have WA No.1460/08 63 signed the 'Consortium Agreement' instead of 'on behalf of Peel Ports Ltd' as mentioned in the original consortium agreement" and therefore decided to seek the opinion of Law Secretary on this point. In the said meeting, it was further decided to open the technical bid of the three qualified bidders. Accordingly the opinion of law Secretary was sought. Opinion of law secretary is extracted above and according to it, two major defects were pointed out with regard to the bid submitted by the appellant: 1. The new consortium agreement dated 11.03.2008 cannot be treated as part of original proposal as it is entered into by new members (Portia Management Services signed it without the authorisation of Peel Ports) and 2. There is no provision in the Consortium Agreement to the effect that there will be joint and several 'liability' for the members in executing the project and the appellant only used the expression 'responsibility' that is different.

76. In the 4th EC meeting held on 06.05.2008, after deliberating the opinion of Law secretary it was concluded that the bid submitted by the appellant is 'non-responsive'.

77. Whether the EC should have taken a decision based on the opinion of Law Secretary?

It is necessary to note that decision of EC, especially with regard to the responsiveness of the bid submitted by the appellant was taken based on the opinion of the law Secretary. In fact, according to the affidavit filed by the WA No.1460/08 64 Law Secretary himself, he participated in the meeting pursuant to a 'telephonic request' from chief Secretary. It is further admitted that the so called opinion is only "an unsigned and unsealed, off the record advice / gist of points." Even according to the law secretary himself, the same is not a valid legal opinion stricto sensu as it is not sought or furnished in obedience with Paragraph 112 of the Kerala Secretariat Office Manual or other relevant Rules. As per the relevant Rules, the opinion of the law department could be sought only in proper channel ie; the request shall be routed through the concerned Administrative Department. In the present case, the 2nd respondent could have sought opinion from the Law department through the department of Ports (the concerned administrative department) and admittedly the advice of Law Secretary is not obtained in accordance with this procedure. In para 3, Chapter IV of the Kerala Law Department Manual it is stated that, "A reference to the Law department for their opinion on any legal matter may be made by any Department of the Secretariat. The Heads of Department should not directly refer any matter for the opinion of the law department. They should address the Administrative department concerned and the Administrative Department after examining the question shall forward their remarks to the Law Department. If any reference is received direct from the Head of Department it shall be returned to him for forwarding it to the concerned Administrative Department". Similarly the other provisions in Ch. IV of the WA No.1460/08 65 Manual is also not followed in this case. The law department Manual details the discipline / procedure to be followed while seeking advice of law department. Since it is an advice of the concerned department of the Government, the same has to follow all the procedural requirements stipulated in this regard and in obtaining such advice if procedural formalities stipulated in law is not followed, it cannot be treated as a valid legal advice. The jurisprudential accuracy of the opinion is not the matter for concern but the procedure by which the same is obtained. Therefore the so called 'unsigned and unsealed, off the record advice / gist of points' furnished by the Law Secretary before the EC cannot be treated as a valid legal advice from the law department and as such the reliance of the EC on the same is not proper. Such advice could at the most be treated as an opinion from an expert. Again, the legal opinion could vary from person to person and even luminaries may differ in their opinion on the same set of facts or law. In such circumstance, a competent authority is expected to follow the opinion obtained from the permissive sources through proper channels. As revealed from the files, instead of independently considering the opinion of Law Secretary, the EC blindly followed the same and arrived at the conclusion that the bid submitted by the appellant is non responsive in the presence of Law Secretary himself.

78. In the instant case, the 3rd EC meeting, discussed the legal opinion given by the legal advisers of the Project. In the said opinion, it is WA No.1460/08 66 specifically noted that the changes were made in accordance with the advice of the earlier suggestions / recommendations of EC and the same is in accordance with law. The opinion given by the legal advisers of the Project was followed by the EC in the case of other bidders. In this circumstance, taking a decision to obtain legal opinion except according to the procedure and permitting themselves to be influenced by such 'unsigned and unsealed, off the record advice / gist of points' is not permissible. Learned author H.W.R Wade in Administrative Law, 8th Ed. Ch. 11, pp 315.6 has opined that "...One aspect of this principle is the rule that the participation of non members in the deliberations or decisions of a collective body may invalidate its acts...". In page 318 it is opined that "...The valid exercise of a discretion requires a genuine application of the mind and a conscious choice by the correct authority ... A public body which blindly rubber stamps its officers' recommendation will therefore be acting unlawfully...". It is also necessary to note that 'there can be no objection to a public body obtaining advice and consulting suitable persons, but it is vital that it should genuinely keep the decision in its own hand' (p 318). Here a perusal of the minutes of the 4th meeting of EC, it could be revealed that the EC without deliberating on the opinion of Law Secretary blindly followed it in his presence and proceeded to conclude that the proposal submitted by the Appellant is non-responsive and rejected its bid. In this context, it is appropriate to note that "...there must always be a difference between seeking WA No.1460/08 67 advice and then genuinely exercising one's own discretion, on the other hand, acting obediently or automatically under someone else's advice or directions"

(Wade supra p 327). The effect then is that the discretion conferred by the Parliament (licensor, in this case) is exercised, at least in part, by wrong authority, and the resulting decision is ultra vires and void". (See also Anoj Abraham v. STAT & Anr 2006 (4) KLT 691, Shreyaskumar Accha v. Director State Lotteries 2005 (1) KLT 841 and Chandran v. Union of India 2003 (2) KLT 567). Therefore the EC ought not to have taken a decision on the responsiveness of the bid submitted by the appellant based on the 'unsigned and unsealed . off the record advice / gist of points' furnished by the Law Secretary and therefore, that the decision making process adopted by the EC in its 4th meeting cannot be approved being vitiated by irrelevant considerations (dictation by outsider) and is only liable to be judicially reviewed.

79. Consequence of the decision of the EC on appellant:

Appellant is deprived of equal treatment / excluded from the zone of consideration / denied a level playing field.

In Reliance Energy Ltd v. MSRDC Ltd. (2007) 8 SCC 1, Hon'ble Supreme Court while dealing with a similar case ruled:

"36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise exercise of public WA No.1460/08 68 power in a democracy. Article 14 of the Constitution embodies the principle of 'non discrimiantion'. However it is not a free standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to 'right to life'. It includes 'opportunity'. In our view, as held in latest judgment of the Constitution Bench of nine Judges in I.R Coelho v. State of T.N (2007) 2 SCC 1, Articles 21 / 14 are the heart of the chapter on fundamental rights. They cover various aspects of life. 'Level playing field' is an important concept while construing Article 19 (1)(g) of the Constitution. It is entitled to invoke the said doctrine of 'level playing field'. We may clarify that this doctrine is, however subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of 'level playing field' is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. this is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. 'Globalisation', in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of 'globalisation'. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of 'level playing field' embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to principle of 'equality' should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be WA No.1460/08 69 mentioned in the matter of implementation of the aforesaid doctrine of 'level playing field'. According to Lord Goldsmith, commitment to the 'rule of law' is the heart of parliamentary democracy. One of the important elements of the 'rule of law' is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of 'reasonableness', then such an act or decision would be unconstitutional."

M P Jain and S N Jain, Principles of Administrative Law, 4th Ed (2005 Reprint) page 855:

"...Although the petitioner had no right to claim that his tender be accepted, yet he did have a right to have his tender 'fairly and properly' considered by the concerned authority ...equal opportunities must be given to citizens and they must not be discriminated against in the matter of making their offer for such contracts and of having the same considered ... there cannot be any discrimination at the threshold or at the time of entry in the field of consideration on merits..."

80. Whether there is change of parties in the two consortium agreements?

It is necessary to note that as per the scheme of RFP, the bidders at the stage of submission of Proposal need to furnish the names of the lead member and other members in the Consortium. At this stage, it is specifically mentioned by the appellant in Exhibit P5, that the second member of the WA No.1460/08 70 consortium is "Portia Management Services Ltd". While furnishing 'Details of Bidders' in P5, against the column Consortium Member it is again mentioned 'Portia Management Services Ltd' and against the column 'Brief Description of Company' it is mentioned that - 'Portia Management Services Ltd is the international arm of Peel Ports Ltd'. Whereas in the Consortium Agreement (pages 151 to 155 of Paper Book) it is mentioned that M/s Portia Management Services is signing on behalf of M/s Peel Ports Ltd. Later, when the Sponsors /Advisers pointed out this anomaly, the appellant executed a fresh agreement whereby arraying M/s Portia Management Ltd as a party within the stipulated time. Apart from pointing out this anomaly, the appellants were never asked to obtain any authorization from Peel Ports at any point of time. It could also be concluded that right from beginning it is Portia Management Services Ltd is the consortium member and not M/s Peel Ports. In fact in response to Exhibit P9 letter issued by the advisers after 1st EC meeting wherein it is stated that "in this regard you are requested to depute your authorized representative to our office in Bangalore within five days from the date of this communication to collect the original power of attorney and consortium agreement for taking necessary action to meet the above requirements", the appellant issued Exhibit P10 mentioning that they will be executing a 'fresh agreement'. Such fresh agreement, could only be treated as a response to the anomaly pointed out by the respondents 1 to 3. The subsequent agreement dated 11.03.2008, in effect is WA No.1460/08 71 only a clarification for the doubts expressed by the EC / Advisers. After obtaining it within the stipulated time, it cannot be said that the same is furnished in violation of RFP. It is only curing a defect / anomaly and by obtaining such clarification no other bidder is prejudiced. It will certainly relate back to the original date of submission. Since it is obtained within the extended time, the respondents 1 and 2 also cannot be prejudiced. Moreover, the Adviser approved the revised consortium agreement and even the legal advisers also endorsed the same. Hence it is not justifiable to exclude the appellant from the zone of consideration at the 2nd and 3rd stage of bid evaluation on the reason that a new party was added at a later stage. Therefore the procedures adopted by the EC in this regard is bad.

81. 'Liability' v. 'Responsibility':

In RFP Vol 1, Section IV, paragraph 3:5, it is provided that "All members of the consortium shall be jointly and severally liable for the execution of the Project in accordance with the terms of the License Agreement and a statement to this effect shall be included in the Consortium / Share Holder's Agreement." In cl. (c) of paragraph 4:1 it is provided that, "...the consortium agreement shall be specific to this proposal and clearly allocate responsibilities and duties between the members and the lead member, including the percentage of shareholding. Notwithstanding this, the Consortium Members shall be jointly and severally liable to Licensor for implementation of WA No.1460/08 72 the Project." Similarly in paragraph 13:4, it is provided that "In case of consortium, members of the consortium agreement for the purpose of submitting the proposal, the consortium agreement shall contain, inter alia, the following provisions: (a)... (b). Outline the proposed roles and responsibilities of each consortium member at various stages. (c). joint and several liability of the Consortium Members for implementation of the Project.

(d)... (e)... The consortium agreement entered into among the members of the consortium should be specific this project and should contain the above requirements, failing which the proposal shall be treated as non responsive.

The bidder is free to submit the Consortium Agreement in its own format..." A conjoint analysis of the above provision will lead to the conclusion that all that what the RFP contemplates is a commitment from the part of bidders (consortium members) to the effect that they will be jointly and severally liable for the completion of the project, in the event being selected as successful bidder and such a provision will be there in the License Agreement that will be entered between the licensor and licensee. The commitment for 'joint and several liability' can be expressed in "the Consortium Agreement in its own format." Moreover, it is necessary to note that the JV agreement submitted along with the proposal at the time of bid evaluation stage will not make any difference, as the license agreement is yet to be entered between the licensor and the licensee (successful bidder). At the most the said clause in the JV WA No.1460/08 73 agreement could be treated as a commitment or assurance on the part of consortium members to abide by a 'liability' clause, at the time of entering of project license agreement, if its bid is ultimately found successful.

82. In the 1st EC meeting on 25.02.2008, it is not pointed out that in the appellant's JV agreement is bad for non inclusion of "several and joint liability" clause. Whereas a similar anomaly was pointed out by the EC the case of another bidder - M/s Appolo Consortium. When such a defect was pointed out to one of the bidders, it is not appropriate to refuse to point out such defect and later finding fault with the appellant on the same point. Had a clarification in this regard was sought at the appropriate time, it is submitted by the appellant on record, that they would have made necessary changes in this regard. Again, this is a curable defect of minor nature and cannot be treated as a reason to exclude the appellant from the zone of consideration.

83. Point No III.

Is the judgment of the learned single judge sustainable? A reading of the judgment by the learned single judge would reveal that instead of judging the decision making process adopted by the EC, the learned Judge has delved into the merits of the decision and found the views adopted by the Law Secretary endorsed by EC need not be interfered. This approach is not permissible while reviewing an administrative decision of a body like EC. As already pointed, the decision of EC to invite the WA No.1460/08 74 Law Secretary and to oblige themselves to that decision is bad and not sustainable. therefore the decision of learned single judge also cannot be sustained.

84. Point No..IV.

Whether the administrative decision should be reasoned? The incidental issue that requires to be considered is whether EC was obliged to give reasons while rejecting the bid submitted by the appellant. The learned Senior Counsel Sri.Rajiv Nayyar would submit that the administrative decisions need not be reasoned. The reliance is placed on Kumari Srilekha Vidyarthi's case (1991) 1 SCC 212, wherein it is observed that the expression, "at any time" merely means the termination may be made even during the subsistence of the term of appointment and "without assigning any cause" means without communicating any cause to the appointee whose appointment is terminated. However, without assigning any cause is not to be equated with "without existence of any cause". It merely means that the reason for which the termination is made need not be assigned or communicated to the appointee. It was held in Liberty Oil Mills vs. Union of India that the expression "without assigning any reason" implies that the decision has to be communicated, but reasons for the decision need not have to be stated; but the reasons must exist, otherwise, the decision would be arbitrary.

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85. Our attention is invited to the decision of the Apex Court in National Institute of Mental Health and Neuro Sciences vs. Kalyan Raman, 1992 Supp (2) SCC 481. We failed to understand how that decision would help the respondent in the facts and circumstances of this case.

86. In Union of India vs. E.G.Nambudiri, (1991) 3 SCC 38, the court has stated, that, "Ordinarily, courts and tribunals, adjudicating rights of parties, are required to act judicially and to record reasons. Where an administrative authority is required to act judicially, it is also under an obligation to record reasons. But every administrative authority is not under any legal obligation to record reasons for its decision, although, it is always desirable to record reasons to avoid any suspicion. Where a statute requires an authority though acting administratively to record reasons, it is mandatory for the authority to pass speaking orders and in the absence of reasons the order would be rendered illegal. But in the absence of any statutory or administrative requirement to record reasons, the order of the administrative authority is not rendered illegal for absence of reasons. If any challenge is made to the validity of an order on the ground of it being arbitrary or mala fide, it is always open to the authority concerned to place reasons before the court which may have persuaded it to pass the orders. Such reasons must already exist on records as it is not permissible to the authority to support the order by reasons not contained in the records. Reasons are not necessary to be communicated to the WA No.1460/08 76 Government servant. If the statutory rules require communication of reasons, the same must be communicated, but in the absence of any such provision absence of communication of reasons do not affect the validity of the order".

87. In Sarat Kumar Dash and others vs. Biswajit Patnaik and Others, 1995 Supp (1) SCC 434, the court has stated, that, "The reasons are links between the maker of the order or the author of the decision and the order itself. The record is called to consider whether he has given due consideration to the facts placed before him before he arrives at the decision. Therefore, the reasons in the order or found from the record bridges the link between the maker of the order and the order itself or decision. Therefore, the natural justice is not a rigid nor an inflexible rule. It should be applied to a given fact situation, depending upon the background of the statutory provisions, nature of the right which may be affected and the consequences that may entail.

88. The learned Advocate General would submit that even if an administrative decision does not ex facie disclose the reasons, the decision can be sustained by explaining the reasons with the help of records available on file, though the same principle may not apply to statutory or quasi judicial decisions. To buttress this argument, learned Advocate General relies on the observations made in the case of Union of India vs. E.G.Nambudiri, (1991) 3 SCC 38, Paras 8, 9 and 10; Income Tax Officer vs. Biju Patnaik, 1991 Supp WA No.1460/08 77 (1) SCC 161 Para 6); Shrilekha Vidyarthi vs. State of U.P., (1991) 1 SCC 212 (Para 13); Sarat Kumar Dash vs. Biswajit Patnaik, 1995 Supp (1) SCC 434 (Para 12); Choice Trading Corporation Pvt. Ltd. vs. GCDA 1992 (1) KLJ 398 (Para 8) and M.Vasudevan vs. CEO, Chennai Metropolitan Devpt. Authority, AIR 2006 Mad. 45 (Para 4 and 5).

89. The recent trend of the Apex Court appears to be different. It is appropos at this stage to refer to the decisions relied by the learned Senior Counsel Sri.Damodaran, for the appellant. The fist in the series, is the case of Nagarjuna Constructions Company Ltd. vs. Govt. of Andhra Pradesh (Civil Appeal Nos.1438 of 2004 dated 20.10.2008 Para 31, 36 and 39) "31. The obligation to act fairly on the part of the administrative authorities were evolved to ensure the rule of law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the quasi judicial authorities are bound to observe. It is true that the distinction between a quasi judicial and the administrative action has become thin, as pointed out by this court as far back as 1970 in A.K.Kraipak vs. Union of India. Even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi judicial action. If the High Court cannot sit as an Appellate Authority over the decisions and orders of quasi judicial authorities, it follows equally that it cannot do so in the case of administrative authorities. In the matter of administrative action, it is well WA No.1460/08 78 known, more than one choice is available to the administrative authorities; they have a certain amount of discretion available to them. They have a "right to choose between more than one possible course of action on which there is room for reasonable people to hold differing opinions as to which is to be preferred"(as per Lord Diplock in Secy. of the State for Education and Science v. Metropolitan Borough Council of Tameside, 1976 (3) All.E.R. 665 at pp.695f). The court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the court intervene.

The Court has further observed:

36. The principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice.

39. Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and WA No.1460/08 79 circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. Expression 'civil consequences' emcompasses infraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life.".

90. In Dev Dutt vs. Union of India, (2008) 8 SCC 725, the Apex Court has observed:-

"24. What is natural justice? The rules of natural justice are not codified nor are they unvarying in all situations, rather they are flexible. They may, however, be summarised in one word: fairness. In other words, what they require is fairness by the authority concerned. Of course, what is fair would depend on the situation and context.

25. Lord Esher M.R. in Voinet v, Barrett (1885) 55 LJQB 39 (CA) observed: "Natural justice is the natural sense of what is right and wrong".

xxx xxx xxx

28. Thus, in A.K.Kraipak vs. Union of India, (1969) 2 SCC 262, a Constitution Bench of this Court held: (SCC p.272, para 20):

"20. ....The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely: (1) no one shall be a judge of his own case WA No.1460/08 80 (nemo debet esse judex propria causa) and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter, a third rule was envisaged and that is that quasi judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years, many more subsidiary rules came to be added to the rules of natural justice."

The aforesaid decision was followed by this court in K.I.Shepherd v. Union of India (1987) 4 SCC 431. It was held in this decision that even administrative acts have to be in accordance with natural justice if they have civil consequences. It was also held that natural justice has various facets and acting fairly is one of them.".

91. In Rajesh Kumar vs. Dy.C.I.T. and others, 2007 2 SCC 181, the Apex Court has stated:

"20. Principles of natural justice are based on basic pillars:

(i) Nobody shall be condemned unheard (audi alteram partem)

(ii)Nobody shall be a judge of his own cause (Nemo debet esse judex in propria sua causa)

21. Duty to assign reasons is, however, a judge-made law.

there is dispute as to whether it comprises of a third pillar of natural justice. (See S.N.Mukherjee v. Union of India (1990) 4 SCC 594 and Reliance Industries Ltd. v. Designated Authority (2006) 10 SCC 368.

WA No.1460/08 81

xxx xxx xxx

23. We however, need not dilate on the said question being not very necessary for the purpose of this case. But it is beyond any cavil that ordinarily unless excluded by operation of a statute, the superior courts while exercising power of judicial review shall proceed on the basis that assignment of reasons is imperative in character. When an authority, be it administrative or quasi judicial adjudicates on a dispute and if its order is appealable or subject to judicial review, it would be necessary to spell out the reasons therefor. While applying the principles of natural justice, however, the court must also bear in mind the theory of useless formality and the prejudice doctrine.

xxx xxx xxx

48. In any event, when civil consequences ensue, there is hardly any distinction between an administrative order and a quasi judicial order. There might have been difference of opinions at one point of time, but it is now well settled that a thin demarcated line between an administrative order and quasi judicial order now stands obliterated (See A.K.Kraipak v. Union of India (supra) and Chandra Bhavan Boarding and Lodging v. State of Mysore (1969) 3 SCC 84, and S.L.Kapoor v. Jagmohan (1980) 4 SCC 379.".

92. In State of West Bengal vs. Alpana Roy, (2005) 8 SCC 296, the Supreme Court has observed:

"8. Even in respect of administrative orders Lord Denning, M.R. in Breen v. Amalgamated Engg. Union (1971) WA No.1460/08 82 1 All.E.R. 1148 (p.1154) observed: "The giving of reasons is one of the fundamentals of good administration." In Alexander Machinery (Dudley) Ltd. v. Crabtree, 1974 ICR 120 (NIRC), it was observed: "Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision taker to the controversy in question and the decision or conclusion arrived at". Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudicating the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the statutory requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The "inscrutable face of the sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance.".

93. In the present case, after obtaining the "opinion" of the Law Secretary on the tender document submitted by the Appellant, the EC met on 6.5.2008. After deliberation, the EC entirely relying on the "opinion" of the Law Secretary without giving any reasons whatsoever has rejected the tender WA No.1460/08 83 document, stating that the tender document is non-responsive/non-admissible in terms of the RFP provisions. The only reason assigned by the EC is as under:

"The Committee perused the above opinion, submission of the Bidder vis-a-vis the relevant stipulations of the RFP documents and discussed at length these with the Law Secretary to ascertain the admissibility/responsiveness of the bid. The Committee, including the Special Invitee, unanimously concluded that the bid submitted by the Consortium led by Zoom Developers, is non-responsive/non-admissible, in terms of the RFP provisions.".

94. Can this be called a reasoned order, was our question to the learned counsel appearing for the parties. The learned Advocate General would tell us, firstly, since the orders passed by EC is in the nature of administrative order, the EC need not have to assign any reasons whatsoever in view of Clause 27 of RFP. Alternatively, the learned Advocate General would contend, that the reading of the entire report of the EC discloses the reasons for treating the tender document submitted by the appellant as non-responsive and even otherwise also, if the administrative decision does not disclose the WA No.1460/08 84 reasons, the same can be sustained by explaining the reasons with the help of available records. The learned Senior Counsel, Sri.Rajiv Nayyar, who appeared for the contesting respondent in his own indomitable style would tell us that, it is difficult to answer an inconvenient question, but at the same time, in view of certain observations made by the Apex Court, there is no necessity for a body which is only discharging administrative function, to assign detailed reasons while rejecting the bid submitted by a tenderer. The learned Senior Counsel would submit that, the Law Secretary was very much present in the meeting held on 6.5.2008 and after due deliberation and discussion with the Law Secretary, the EC has opined that the bid submitted by the appellant is non-responsive and therefore, it is an affirmation of the "opinion" of the Law Secretary and therefore, no other reasons be assigned by the EC while rejecting the bid submitted by the appellant.

95. In our view, the answer to this issue would have been little more difficult, if not for the views expressed by the Apex Court in the recent decision rendered. In Nagarjuna Construction Company Ltd. case, the Apex Court has observed that the old distinction between a judicial act and administrative act has withered away. Even the administrative order which involve civil consequences must be consistent with the rules of natural justice. Expression "civil consequences" encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and WA No.1460/08 85 non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life. In Alpana Roy's case, the Apex Court has observed that giving of reasons is one of the fundamentals of good administration. In our view, these views of the Apex Court is binding on us under Article 141 of the Constitution of India and therefore, it is well-nigh impossible to accept the preliminary submission made by the learned Advocate General. Secondly, we have carefully perused the entire records produced by the learned Advocate General to find whether the records would disclose any reason for the EC to reject the tender document submitted by the Appellant unceremoniously. We only find from the records the various stages where the appellant was asked to improve, correct and clarify the tender documents submitted by it. These records would only disclose, if we say so, bluntly, the bureaucratic approach while deciding an important issue of this nature. The learned Advocate General would tell us that in view of the Clause 27 of the RFP, no reason need be assigned and communicated to the bidder of the grounds of rejection of its bid document. Firstly, this type of clauses in the RFP could have been accepted, under a rule in a State which is governed by Monarchy and not in a country which believes in a democracy and democratic principles. Assuming for the sake of argument that the administrative authority while deciding issues of this nature need not communicate the reasons for rejection of the bid of an participant, the records maintained by the administrative authority should WA No.1460/08 86 disclose to a forum, the reasons which weighed in its mind, when its action is questioned before a Superior Forum. If the reasons are not forthcoming after careful scrutiny of the records, the superior forum would definitely have to tell the administrative authority, that you can't be above the law and you can't act the way you desire. In view of this discussion, our conclusion is, the decision of the EC is a non-reasoned order and the same cannot be sustained.

96 We are not considering the issue, that the decision to treat the appellant's bid as non-responsive is vitiated by mala fides, since there is no specific averment is made either in the writ petition or in the writ appeal by the appellant.

97. We are also not deciding the issue, whether this court can issue futile writs, since we have no intention to remit the matter to EC for reconsideration of the issue once over again, in view of what has been observed by us in the course of our order.

98. In the result, we pass the following:

O R D E R

1. The decision of EC in its 4th meeting held on 06.05.2008, whereby the bid submitted by the appellant is declared as 'non-responsive' is set aside and further we declare that the outer cover and cover 1 submitted by the appellant is responsive.

WA No.1460/08 87

2. We declare that the Technical and Financial proposals submitted by the appellant are liable to be considered within fifteen days from today.

3. The order passed by the Sponsor/Licensor in GO (Ms) No 28/08/F&PD dated 24.05.2008 is kept in abeyance and further we direct them to cancel the same, if the technical and financial proposal submitted by the appellant is found better than that of 4th respondent.

4. There will be no order as to costs.

5. All pending interlocutory applications shall stand closed.

Ordered accordingly.

Sd/-

H.L.DATTU, CHIEF JUSTICE.

Sd/-

A.K. BASHEER, JUDGE.

DK.

(True copy)

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