Orissa High Court
Advent Envirocare Technology Pvt vs Steel Authority Of India Limited And ... on 3 May, 2021
Author: B.P. Routray
Bench: B. P. Routray
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.32198 of 2020
Advent Envirocare Technology Pvt. .... Petitioner
Ltd.
Mr.S.K. Acharya, Advocate
-versus-
Steel Authority of India Limited and .... Opposite Parties
others
Mr. B. Dasmohapatra, Advocate for O.P. Nos.1 to 5
Mr.S.P. Sarangi, Advocate for O.P. No.6
CORAM:
THE CHIEF JUSTICE
JUSTICE B. P. ROUTRAY
ORDER
03.05.2021 Order No. B.P. Routray,J.
06. 1. This matter is taken up by video conferencing mode.
2. The rejection of technical bid of the Petitioner has been challenged in the present writ petition.
3. The Steel Authority of India Ltd. (SAIL) in Rourkela Steel Plant (RSP), Opposite Party Nos.1 to 5, issued Notice Inviting Tender (NIT) dated 22nd February, 2020 inviting bids for 'upgradation of effluent treatment plant of CO and CCD area with Zero Liquid Discharge Concept (PKG-01) at RSP'. The date of tender submission was 19th March, 2020 which was the date of opening of the tender also. The said date was extended in view of COVID pandemic to 26th June, 2020. The Petitioner submitted its bid on 19th June, 2020. As per the Invitation for Bids (IFB) in the Page 1 of 14 said Tender Call Notice (TCN), it was mentioned that the bid will consists of three part s, viz., Part-I- "Bid Security", Part-II-
"Integrity Pact, Eligibility Criteria Fulfilment and Techno- Commercial Bid", Part-III-"Price Bid". The eligibility criteria set out in the TCN is as follows:
"Eligibility Criteria The bidder should fulfil the following eligibility criteria:
1. The bidder (sole or consortium) should have carried out:
Design/Engineering, equipment supply, erection/ supervision of erection, commissioning/ supervision of commissioning of:
(a) At least one Effluent/ Industrial waste water treatment plant of minimum 80 Cu.m/h capacity consisting of physical, chemical and biological treatment facilities in an integrated steel plant/ petroleum refinery/ petrochemical plant/ fertilizer plant in a single project.
and
(b) One system consisting of Ultra-filtration followed by RO or Membrance Bio Reactor followed by RO for a minimum capacity of 50 m3/h industrial waste water recycle.
All the above facilities must have been commissioned in last 10 years as on date of NIT.
Copies of following documents shall be submitted by the bidder in support of the above:
(i) Work order or any other letter of award of work or Contract Document or Purchase Order issued by the client.
(ii) Commissioning Certificate or Performance Certificate or Completion Certificate or Final Acceptance Certificate issued by the client."Page 2 of 14
The copies of documents required to be supplied inter alia by the bidders in support of their experience were as follows:
"(i) Work order or any other letter of award of work or Contract Document or Purchase Order issued by the client.
(ii)"Commissioning Certificate" or "Performance Certificate" or "Completion Certificate" or "Final Acceptance Certificate" issued by the client."
In addition to the above as per the Clause 5.0 of the IFB, it consists of the Instructions to Bidders (ITB). Clause 37.3 of the ITB specifies as follows:
"37.3 If at any point of time, it was found by the Employer that the bidder has furnished false information, the employer may reject the bid."
4. The Petitioner, along with its bid, inter alia submitted the copies of Commissioning Certificate dated 12th February, 2018 (Annexure-19) and Integrity Cold Test (ICT) Certificates (Annexures-5 & 6) issued by Tata Steel Limited, Jajpur (Opposite Party No.6).
5. After Techno-Commercial Evaluation, Opposite Parties rejected the offer of the Petitioner on the ground that the Certificate dated 12th February, 2018 (Annexure-19) is not found genuine on verification. This is the subject matter of challenge by the Petitioner stating that the same is illegal and malafide.
6. It is contended by Mr. Acharya that, the Petitioner has experience of more than 25 years having successfully completed many projects and the Certificate dated 12th February, 2018 Page 3 of 14 cannot be discarded by Tata Steel Limited merely issuing a disclaimer advertisement published in the newspapers without a valid decree of the competent court of law. It is also submitted that, since the Petitioner raised a reference against Tata Steel Limited in the MSME facilitation Council, Gandhinagar, such a declaration has been issued by Tata Steel Limited in some national newspapers. Apart from the Certificate dated 12th February, 2018 in case the same is not relied upon, then also ICT Certificates under Annexures-5 and 6 sufficiently fulfil the criteria required for the tender in question.
7. Opposite Party Nos.1 to 5 have filed their counter jointly refuting the claim of the Petitioner. It is stated that the bid conditions include that, the bidder should have carried out Design/Engineering, Equipment Supply, Erection/Supervision of Erection, Commissioning/Supervision of Commissioning of at least one effluent/industrial waste water treatment plant of minimum 80 Cu.m. per hectare capacity consisting of physical, chemical and biological treatment facilities in an integrated steel plant/ petroleum refinery/ petrochemical plant/ fertilizer plant in a single project and one system consisting of ultra-filtration by RO or Membrance Bio Reactor followed by RO for a minimum capacity of 50 Cu.m. per hectare industrial waste water recycle within last 10 years as on the date of NIT, and the participants are required to submit document along with bid paper in support of the same. Since the Petitioner submitted a document under Annexure-19 (Certificate dated 12th February, 2018) which was not genuine, his credibility was under question and enough to Page 4 of 14 reject his offer. It is further stated that the authenticity of the Certificate dated 12th February, 2018 was verified from Tata Steel Limited, Opposite Party No.6, who denied the same as a genuine one. It is further submitted that out of four offers made pursuant to the NIT including the Petitioner, only two were found Techno- Commercially suitable to participate in the reverse action and accordingly, M/s.Effwa Infra & Research Pvt. Ltd. became the L- 1 which has been issued with the LOA on 11th January, 2021.
8. Mr. Dasmohapatra, learned counsel appearing for the Opposite Party Nos.1 to 5 submits that since the Commissioning Certificate dated 12th February, 2018 submitted by the Petitioner was not found to be a genuine one, its offer was rejected by the Opposite Parties in Techno-Commercial evaluation. It is also submitted that the document of ICT under Annexures-5 & 6 cannot be treated as the Commissioning Certificate. The requirement is to submit the Commissioning Certificate or Performance Certificate or Completion Certificate, and the Integrated Cold Test (ICT) Certificate is not as per the requirement of successful completion of the project.
9. Although Tata Steel Limited, Opposite Party No.6 has entered appearance, it has not filed any reply.
10. We have considered the submissions made by the parties and perused the records.
Page 5 of 1411. The impugned rejection order dated 3rd November, 2020 under Annexure-1 reveals that in the process of verification of the authenticity of the Certificate dated 12th February, 2018, Tata Steel Limited has replied to Opposite Party Nos.1 to 5 that they have published a disclaimer advertisement in the national newspapers, viz., Hindustan Times, The Economic Times and The Indian Express with the text "Notice issued in public interest". The same contains as follows:
"In recent past, Tata Steel Limited has come to know of an alleged certificate dated February 12, 2018 issued in favour of M/s. Advent Envirocare Technology Pvt. Ltd.
NOTICE is hereby given that the certificate dated February 12, 2018, allegedly issued by Tata Steel Limited in favour of M/s. Advent Envirocare Technology Pvt. Ltd. (having it's office at A-1, 8 Floor, Safal Profitare Corporate Road, Prahaladnagar, Ahmedabad - 380015), purportedly signed by Mr. A S A Rao in the capacity of Project Manager certifying the successful completion and satisfactory operation with respect to below mentioned contracts, is an unauthorized letter:
(i) Contract for Design, Manufacture, Supply of Indigenous plant, machinery and equipment with auxiliaries and commissioning items including Civil for Augmentation of waste water treatment plant at coke plant for Batteries 10 and 11 at Tata Steel Limited, Jamsehdpur on EPC mode vide LOA Ref: CPED/CPP/COB#10 & 11/BOD/2011 dt. August 27, 2011.
(ii) Contract for Design, Manufacture, Supply, Erection and Commissioning of Biochemical and Dephenolisation (BOD) Plant for Coke-ovens 1, 2, 3 and 4 at our Kalinganagar project on EPC mode Page 6 of 14 vide LOA Ref: KPO/PROC/COBP/LOI/292 dt.
August 9, 2011 and
(iii) Contract for Supply, Erection, Testing and Commissioning including Civil and Structural Works of Central Effluent Treatment Plant (CETP) for our Kalinganagar project on EPC mode vide LOA Ref: KPO/PROC/UTL/CETP/LOA/225 dt.
September 10, 2013.
There is no internal reference number of this letter in our Document Management System. Mr. A S A Rao was not involved as Project Manager in the execution of any of the above contracts on February 12, 2018 and was never authorized to issue any letter on behalf of Tata Steel limited in respect of these projects. It is put in public knowledge that the contents of the certificate are not genuine and not in any way verified by Tata Steel Limited. Any person dealing with M/s. Advent Envirocare Technology Pvt. Ltd., on the basis of the alleged certificate or in any way relying on the aforesaid certificate shall do so at his own risk and responsibility."
12. It is seen that the Opposite Parties have rejected the offer of the Petitioner as not suitable in view of the aforesaid disclaimer notice issued by Tata Steel Limited.
13. Admittedly the Petitioner has not challenged such action of Tata Steel Limited in issuing the disclaimer notice. The contention of the Petitioner that this disclaimer notice of Tata Steel Limited issued in the newspapers is not sufficient to disqualify it in the technical bid, is not found by us to be convincing. The reason is that the said Certificate dated 12th February, 2018 issued by Tata Steel Limited was the only one enclosed by the Petitioner with its bid to subsrtantiate its claim of Page 7 of 14 fulfilling the experience criteria. With that certificate being disowned by Tata Steel Limited as not genuine, the Petitioner's case is entirely without merit. A certificate purportedly issued by an authority or company, when declared by it to not be genuine by publishing a declaration to that effect in the public domain is sufficient to treat such certificate as not genuine. No declaration in that respect by any competent court of law is required. Rather the onus is on the Petitioner which asserts the same to be genuine to get the declaration to the contrary invalidated by a competent court of law. Thus we do not see any invalidity attaching to the decision of the Opposite Parties technically disqualifying the Petitioner.
14. The second contention of the Petitioner that the ICT Certificates under Annexures-5 & 6 issued in favour of the Petitioner are sufficient to satisfy the experience criteria in his favour, is also not found acceptable. In the case of Galaxy Transport Agencies, Contractors, Traders, Transports and Suppliers vs. New J.K.Roadways, Fleet Owners and Transport Contractors, 2020 SCC OnLine SC 1035, it has been observed by the Supreme Court that the expert evaluation of a particular tender, particularly when it comes to technically evaluation, is not to be second guessed by a writ court. The relevant observations in the said case are reproduced below:
"14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review Page 8 of 14 proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., 2016 (16) SCC 818, this Court held:
"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."
xxx xxx xxx
16. Further, in the recent judgment in Silppi Constructions Contractors v. Union of India, 2019 SCC Online SC 1133, this Court held as follows:
"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent Page 9 of 14 arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
xxx xxx xxx
18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, this Court noted:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost Page 10 of 14 of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
Page 11 of 1419. Similarly, in Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272, this Court stated as follows:
"26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third- party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by Page 12 of 14 the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints."
15. In the present case the Certificate dated 9th May, 2016 (Annexure-5) and Certificate dated 24th November, 2015 (Annexure-6) do not indicate anything regarding completion of the project/plant by the Petitioner in any manner. Rather Annexure-6 reveals that the plant is under commissioning. Thus the contention of the Petitioner that the said certificates satisfy the experience criteria of completion of project/plant are not found acceptable.
16. Apart from the above, it is also worth mentioning that the Petitioner did not choose to implead the successful bidder, namely, M/s.Effwa Infra & Research Pvt. Ltd., who is a necessary party to the present case.
17. For the aforementioned reasons, the writ petition is dismissed being devoid of merit. No order as to costs.
18. As the restrictions due to resurgence of COVID-19 situation are continuing, learned counsel for the parties may utilize a printout of the order available in the High Court's website, at par with certified copy, subject to attestation by the concerned Page 13 of 14 advocate, in the manner prescribed vide Court's Notice No.4587, dated 25th March, 2020 as modified by Court's Notice No.4798, dated 15th April, 2021.
(Dr. S. Muralidhar) Chief Justice ( B.P. Routray) Judge B.K. Barik Page 14 of 14