Patna High Court
Jmc Projects (India) Limited vs State Of Bihar on 11 August, 2022
Author: Mohit Kumar Shah
Bench: Mohit Kumar Shah
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.208 of 2020
======================================================
JMC Projects (India) Limited having its Reg. Office at A- 104, Shapath-4,
Opp. Karnavati Club, S.G. Road, Ahmedabad, Gujarat- 380015, through its
Authorized Signatory Mr. Hem Nath Mishra.
... ... Petitioner
Versus
1. State of Bihar through the Secretary, Health Department, 1st Floor, Vikas
Bhawan, Bailey Road, Patna- 800015.
2. Bihar Medical Services and Infrastructure Corporation Limited through the
Chief General Manager, 4th Floor, BSBCCL Building, Hospital Road,
Shastri Nagar, Patna- 800023 through Tendering Authority C.G.M.
(Projects).
3. Shapoorji Pallonji And Company Private Limited, A Company registered
under the Companies Act, 1956 having its Registered office at S.P. Centre,
41/44, Minoo Desai Marg, Colaba, Mumbai-400005, Maharashtra, India,
having its branch office at P.S. Srijan Corporate Park, Tower 1-7th Floor,
Plot G-2, Block-GP, Sector-V, Salt Lake-Kolkata-700091 and local office at
202, 2nd Floor, Block-C, Shanti Lok Apartment, Mazer Gali, Piler No. 75,
P.S. Shanti Nagar, Bihar-801118 through its Mananger, Business
Development Utpal Raj S/o Raj Bindu Prasad age about 29 years, Male
resident of Manoj Kumar Nata Tola P.S. Kazi Mohammadpur, Muzaffarpur.
... ... Respondents
======================================================
with
Civil Writ Jurisdiction Case No. 211 of 2020
======================================================
JMC Projects (India) Limited having its Reg. Office at A-104, Shapath-4,
Opp. Karnavati Club, S.G. Road, Ahmedabad, Gujarat- 380015, through its
Authorized Signatory Mr. Hem Nath Mishra.
... ... Petitioner
Versus
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
2/172
1. State of Bihar through the Secretary, Health Department, 1st Floor, Vikas
Bhawan, Bailey Road, Patna- 800015.
2. Bihar Medical Services and Infrastructure Corporation Limited through the
Chief General Manager, 4th Floor, BSBCCL Building, Hospital Road,
Shastri Nagar, Patna- 800023, through Tendering Authority C.G.M.
(Projects).
3. Larsen & Turbo (L&T) Limited, L&T Construction, having its Registered
Office at Mount Poonamllee Road, Manapakkam, Chennai through its
Authorized Representative & Manager (Business Development) namely, Mr.
Rajesh Kumar, aged about 31 years (Male), son of Ramesh Kumar, resident
of near Purani Maszid, Ishopur, P.S.-Phulwari, District-Patna.
... ... Respondents
======================================================
Appearance :
(In Civil Writ Jurisdiction Case No. 208 of 2020)
For the Petitioner/s : Mr. Vikash Mishra, Advocate
Mr. Anjani Kumar Jha, Advocate
For the Respondent No.2: Mr. Lalit Kishore, Advocate General
Mr. Vikash Kumar, (SC-11)
For the Respondent No.3: Mr. Mrigank Mouli, Sr. Advocate
Mr. Venkatesh Kirti , Advocate
(In Civil Writ Jurisdiction Case No. 211 of 2020)
For the Petitioner/s : Mr. Vikash Mishra, Advocate
Mr. Anjani Kumar Jha, Advocate
For the Respondent No.2: Mr. Lalit Kishore, Advocate General
Mr. Vikash Kumar, (SC-11)
For the Respondent No.3: Mr. Chitranjan Sinha, Sr. Advocate
Mr. Aditya Shankar Prasad, Advocate
Mr. Sanchay Shrivastava , Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
CAV JUDGMENT
Date : 11-08-2022
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
3/172
Regard being had to the commonality of the
controversy in both the aforesaid writ petitions, it
was thought apposite to hear them analogously
and accordingly, they were heard together with the
consent of the parties and are being disposed of by
the present singular order.
2. The aforesaid two writ petitions have been
filed for declaring that the petitioner qualifies the
criteria laid down in Clause 4.5(A)(b) and 4.5(D) of
the Instruction to Bidders contained in the Notice
Inviting Tender dated 10.6.2019 and consequently,
hold that the technical bid submitted by the
petitioner qua the aforesaid two cases is
responsive in terms of Clause 25.1 of the
Instruction to Bidders contained in the NIT dated
10.6.2019, floated by the Respondent No. 2 i.e. the Bihar Medical Services and Infrastructure Corporation Ltd. (hereinafter referred to as the "BMSICL"). The petitioner of the aforesaid two cases has further prayed for quashing the minutes / proceedings of the meeting of the Technical Tender Committee of the Respondent No. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 4/172 2 dated 03.01.2020 whereby and whereunder the technical bid of the petitioner has been rejected. Consequently, it has been prayed that the Respondent No. 2 be directed to consider the financial bid submitted by the petitioner for construction of Government Medical College and Hospital at Begusarai and Buxar, respectively. Facts of the Case
3. The brief facts of the case, according to the petitioner, are that a Notice Inviting Tender bearing NIT No. BNSICL/Infra/22/219 dated 10.06.2019 was issued by the Respondent No. 2, inviting tender through the e-procurement process from firms / contractors of repute, specialized in civil works, for construction of Medical Colleges and Hospitals with earthquake resistant structure in the districts of Vaishali, Begusarai, Sitamarhi, Jamui, Buxar and Madhubani in the State of Bihar. The last date for submission of the bid mentioned in the NIT was 29.07.2019 and the date / time and place for opening the tender was fixed as 31.7.2019 at 3:30 pm. at the office of the Respondent No. 2, Patna High Court CWJC No.208 of 2020 dt.11-08-2022 5/172 however, the same was extended from time to time vide various corrigendum, which is not in dispute. The petitioner had participated in the NIT and submitted its technical bid on 18.11.2019 for construction of Government Medical College and Hospital Campus at Begusarai, as far as the first case is concerned and for construction of Government Medical College and Hospital Campus in the District of Buxar, as far as the second case is concerned. The petitioner had also furnished the earnest money through bank guarantees dated 05.11.2019. It is the case of the petitioner of both the aforesaid cases that although the petitioner qualifies on all counts in terms of the Instruction to Bidders and had therefore participated in the bidding process, however, the Technical Tender Committee, in its meeting held on 13.12.2019, has held the bid of the petitioner to be non-responsive for both the tenders pertaining to the construction of Government Medical College and Hospital at Begusarai and Buxar, by holding that the petitioner was not qualifying the criteria laid down in Clause Patna High Court CWJC No.208 of 2020 dt.11-08-2022 6/172 4.5(A)(b) of the Instruction to Bidders. Thus, the Technical Tender Committee in paragraphs no. 2.4 and 5.5 of its minutes of meeting dated 13.12.2019 had recommended for rejection of the technical bid of the petitioner noting that there is an apparent dichotomy between two certificates, dated 27.06.2017 and 31.10.2018, issued by HSCC (India) Ltd., certifying the work done by the petitioner pertaining to construction of Hospital / OPD and other associated works of Kalpana Chawla Government Medical College at Karnal, Haryana (hereinafter referred to as the "KCGMC") and therefore, it is doubtful that the work of KCGMC project was completed by the petitioner in the financial year 2016-2017.
4. At this juncture, it would be relevant to reproduce paragraph no. 2.4 (pertaining to the bid of the petitioner in connection with construction of Government Medical College and Hospital Campus, Begusarai) and paragraph no. 5.5 (pertaining to the bid of the petitioner in connection with construction of Government Medical College and Patna High Court CWJC No.208 of 2020 dt.11-08-2022 7/172 Hospital Campus, Buxar) of the minutes of meeting dated 13.12.2019 of the Technical Tender Committee of the Respondent No. 2 herein below:-
"2.4. JMC Projects India Ltd., A-104, Shapath 4, Opp. Karnavati Club, S. G. Highway, Ahmedabad, 380015:-
I. mDr fufonknkrk }kjk viyksM fd, x, leku izd`fr ds dk;Z vuqHko izek.k i= esa dYiuk pkoyk xoesaV esfMdy dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks izek.k i= lefiZr fd;k x;kA nksuska DGM (Civil), HSCC (India) Ltd., }kjk dze"k% fnukad 27@06@2017 ,oa 31@10@2018 dks gLrk{kfjr gSA fnukad 27@06@2017 dks fuxZr izek.k i= esa mi;qZDr of.kZr dk;Z dks 20@01@2017 dks substantially complete vafdr fd;k x;k gS] tcfd fnukad 31@10@2018 dks fuxZr izek.k i= esa bl dk;Z dks 20@01@2017 dks complete crk;k x;k gSA II. nksuksa vuqHko izek.k i=ksa esa vafdr dk;Z ds ,d gh fnu vyx&vyx HkkSfrd iw.kZrk fLFkfr n'kkZ;k x;k gS] tks ijLij fojks/kkHkk"kh gS ,oa blls bl ifj;kstuk dk foRrh; o"kZ 2016&2017 esa iw.kZ gksus ij i;kZIr lansg gS] QyLo:i fufonknkrk fufonk nLrkost dh dafMdk 4.5(A)(b) esas of.kZr leku izd`fr ds dk;Z vuqHko dh vgrkZ iwjh ugha djrs gSA mi;qZDr rF;ksa ds vkyksd es mDr fufonknkrk dh fufonk dks Non Responsive ,oa rduhdh :i ls vlQy ik;k Patna High Court CWJC No.208 of 2020 dt.11-08-2022 8/172 x;k ,oa foRrh; fufonk ugha [kksyus dh vuq'kalk dh tkrh gSA
5.5 JMC Projects India Ltd., A-104, Shapath 4, Opp. Karnavati Club, S.G.Highway, Ahmedabad, 380015:-
mDr fufonknkrk }kjk viyksM fd, x, leku izd`fr ds dk;Z vuqHko izek.k i= esa dYiuk pkoyk xoesaV esfMdy dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks izek.k i= lefiZr fd;k x;k gS ,oa nksuska DGM (Civil), HSCC (India) Ltd., }kjk dze"k% fnukad 27@06@2017 ,oa 31@10@2018 dks gLrk{kfjr gSA fnukad 27@06@2017 dks fuxZr izek.k i= esa mi;qZDr of.kZr dk;Z dks 20@01@2017 dks substantially complete vafdr fd;k x;k gS] tcfd fnukad 31@10@2018 dks fuxZr izek.k i= esa bl dk;Z dks 20@01@2017 dks complete crk;k x;k gSA nksuksa vuqHko izek.k i=ksa esa vafdr dk;Z ds ,d gh fnu vyx&vyx HkkSfrd iw.kZrk fLFkfr n'kkZ;k x;k gS] tks ijLij fojks/kkHkk"kh gS ,oa blls bl ifj;kstuk dk foRrh; o"kZ 2016&2017 esa iw.kZ gksus ij i;kZIr lansg gS] QyLo:i fufonknkrk fufonk nLrkost dh dafMdk 4.5(A)(b) esas of.kZr leku izd`fr ds dk;Z vuqHko dh vgrkZ iwjh ugha djrs gSA mi;qZDr rF;ksa ds vkyksd es mDr fufonknkrk dh fufonk dks Non Responsive ,oa rduhdh :i ls vlQy ik;k x;k ,oa foRrh; fufonk ugha [kksyus dh vuq'kalk dh tkrh gSA
5. The petitioner, in response to the aforesaid observation of the Technical Tender Committee of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 9/172 the Respondent No. 2 dated 13.12.2019, had filed a representation dated 18.12.2019 whereby and whereunder it was clarified that the work towards construction of KCGMC was completed by the petitioner before 20.1.2017 and the expression "substantially completed" used in the certificate dated 27.6.2017 was used since this certificate was issued during the pendency of the Defect Liability Period even otherwise as per Clause 27 of the SCC of the HSCC Project, the certificate of final completion was to be issued only after expiry of the Defect Liability Period, which expired on 26.6.2018, hence, a certificate of final completion in terms of Clause 27(b) was issued on 31.10.2018, certifying that the project was completed on 20.1.2017.
6. It is the further case of the petitioner of the aforesaid two cases that the representations of the petitioner dated 18.12.2019 appears to have been dealt with by the Technical Tender Committee of the Respondent No. 2 in its meeting held on 03.01.2020 and again, the technical bids of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 10/172 petitioner, pertaining to construction of Government Medical College and Hospital at Begusarai and Buxar, were held to be non- responsive. The finding of the Technical Tender Committee concerning the petitioner can be found in paragraph nos. 2.5 (pertaining to the bid of the petitioner in connection with construction of Government Medical College and Hospital, Begusarai) and 5.4 (pertaining to the bid of the petitioner in connection with construction of Government Medical College and Hospital, Buxar) of the minutes of the meeting dated 03.01.2020, which are reproduced herein below:-
"2.5. JMC Projects India Ltd., A-104, Shapath 4, Opp. Karnavati Club, S. G. Highway, Ahmedabad, 380015:-
mDr fufonknkrk dh fufonk nLrkost dh leh{kk ds mijakr rduhdh fufonk lfefr dh cSBd fnukad 13@12@2019 esa leku izd`fr ds vLirky fuekZ.k ds vuqHko izek.k i= esa dfri; =qfV ds vk/kkj ij rduhdh fufonk lfefr }kjk non- responsive ,oa rduhdh :i ls vlQy ekurs gq, foRrh; fufonk ugha [kksyus dh vuq'kalk dh xbZ FkhA rduhd fufonk lfefr dh mi;qZDr vuq'kalk ds fo:} mDr fufonknkrk us vius i=kad&JMC/I&P/T-16/Buxar/760/19-20] fnukad 18@12@2019 }kjk vH;kosnu lefiZr fd;k gS ¼vuqyXud&7½ Patna High Court CWJC No.208 of 2020 dt.11-08-2022 11/172 fd ,oa crk;k x;k gSa fd muds }kjk dYiuk pkoyk xoesasZV esfMdy dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks izek.k i= lefiZr fd;k x;k gS] ftlesa ,d gh frfFk esa nks izdkj ds iw.kZrk dk fooj.k vafdr djus dk eq[; dkj.k Defect liability period gSA fufonknkrk }kjk ;g Hkh crk;k x;k gS fd "Two certificates is Governed by the contractual clauses and factually both the certificates are consistent with each other"
I. fufonknkrk ds mi;qZDr vkifRr ds QyLo:Ik bl fuxe }kjk bls HSCC (India) Ltd. ls lR;kfir djkus dk fu.kZ; fy;k x;k ¼vuqyXud&8½ ,oa bl fuxe ds i=kad 5780] fnukad 26@12@2019 ds ek/;e ls DGM Civil HSCC (India) Ltd. dks i= Hkstk x;k gS] ftldk mRrj vHkh rd vizkIr gSA II. mDr fufonknkrk ds fo+:} bl dk;Z ds vU; fufonknkrk Shapoorji Pallonji Ltd. us vius i=kad SP/CAL/3000/2019/426] fnukad 13@12@2019 }kjk ;g ifjokn lefiZr fd;k gS fd "JMC Projects do not meet the eligib- ility criteria 4.5D of NIT having made loss in 4 out of last 7 financial years as below:-
2013-14-Loss of Rs. 1061 Lakhs 2014-15-Loss of Rs. 2429 Lakhs 2015-16-Loss of Rs. 6941 Lakhs 2016-17-Loss of Rs. 4185 Lakhs III. mDr fufonknkrk ds fo+:} bl dk;Z ds vU; fufonknkrk Larsen & Toubro us vius i=kad L&T/B&F/ CB&A/Health/BMSICL/2019-007] fnukad 22@12@2019 } kjk ;g ifjokn lefiZr fd;k gS fd "Whereas M/s JMC projects Pvt. Ltd. has incurred losses in the F.Y. 14, 15, 16 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 12/172 & F.Y. 17 which is more than 2 financial years in the last 7 financial years. The copy of the audited financial results submitted by M/s JMC project to BSE/NSE is enclosed for your reference."
IV. M/s JMC Projects (India) Ltd. ds Audited Profit and Loss statement ds fo:} izkIr ifjokn ds vkyksd esa mDr fufonknkrk dh foxr 7 o"kksZ ds Financial state- ment dh tkap Independent Tax Consultant, Sunil Shyama and Associates (Chartered Accounts) ls djkbZ xbZ] ftlesa muds }kjk Ministry of Corporate Af- fairs (MCA) dh osclkbZV ls MkmuyksM dh xbZ ftldk fooj.k fuEuor~ gS%& Types of Financial Year (Rs. In Cr.) Financial Particulars State-
ment 2018- 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 19 Profit after Tax (As per 18.33 22.97 29.85 43.37 58.25 106.12 142.13 tender document) Stand-
alone Profit after Tax (As per 30 44 58 106 143 ROC Record) From Bid-
Consoli-
der web- 8.5 -10.61 -24.29 -66.33 -41.85 26.85 76.64 dated site V. Sunil Shyama and Associates (Chartered Accounts) us ;g Hkh earO; fn;k gS fd "with respect to analysis of con- solidated financial statement of JMC Project (India) Ltd., Ahmedabad regarding its profitability, earning per share (EPS) and tax implication should be considered on the ba- sis of consolidated financial results and not standalone fi- nancial statement. As per AS-21 (Accounting standard) Patna High Court CWJC No.208 of 2020 dt.11-08-2022 13/172 consolidated financial result includes financial of sub- sidiary company, associate enterprises and joint venture of the company. It is mandatory as per MCA and SEBI guidelines and investment loss under income tax act." ¼vuqyXud&9½ Tax Consultant Sunil Shyama and Associate ls izkIr earO; ds vkyksd esa ;g ik;k x;k fd JMC Projects foRrh; o"kZ 2013&14 ls 2016&17 rd yxkrkj 4 o"kksZ rd Loss ess jgs gSa] QyLo:Ik os fufonk nLrkost dh vko';d Qualifying Criteria dafMdk 4-5 D dks iwjk ugha djrs gSA KkrO; gS fd fufonknkrk }kjk fufonk ds lkFk lefiZr Profit and Loss account esa Loss ugha fn[kk;k x;k Fkk] QyLo:Ik mUgsa fufonk nLrkost dh dafMdk 4-8 ds vkyksd esa Misleading in- formation lefiZr djus dk nks"kh Hkh ik;k x;kA VI. mi;qZDl rF;ksa ds vkyksd esa JMC Project (India) Ltd. dks rduhdh :i ls Non Responsive ,oa vlQy ekurs gq, foRrh; fcM ugha [kksyus dk fu.kZ; fy;k x;kA mDr ds vkyksd esa bl dk;Z esa Hkkx fy, dqy 5 fufonknkrkvksa esa ls rhu rduhdh :i ls lQy fufonknkrkvksa dh foRrh; fufonk [kksyus dk fu.kZ; fy;k x;kA 5.4. JMC Projects India Ltd., A-104, Shapath 4, Opp. Karnavati Club, S. G. Highway, Ahmedabad, 380015:-
mDr fufonknkrk dh fufonk nLrkost dh leh{kk ds mijakr rduhdh fufonk lfefr dh cSBd fnukad 13@12@2019 esa leku izd`fr ds vLirky fuekZ.k ds vuqHko izek.k i= esa dfri; =qfV ds vk/kkj ij rduhdh fufonk lfefr }kjk Non Responsive ,oa rduhdh :i ls vlQy ekurs gq, foRrh; fufonk ugha [kksyus dh vuq'kalk dh xbZ FkhA rduhdh fufonk lfefr dh mi;qZDr vuq'kalk ds fo:} mDr fufonknkrk us vius i=kad&JMC/I&P/T-16/Buxar/760/ 19- 20] fnukad 18@12@2019 }kjk vH;kosnu lefiZr fd;k gS Patna High Court CWJC No.208 of 2020 dt.11-08-2022 14/172 fd ,oa crk;k x;k gSa fd muds }kjk dYiuk pkoyk xoesasZV esfMdy dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks izek.k i= lefiZr fd;k x;k gS] ftlesa ,d gh frfFk esa nks izdkj ds iw.kZrk dk fooj.k vafdr djus dk eq[; dkj.k Defect liability period gSA fufonknkrk }kjk ;g Hkh crk;k x;k gS fd "Two certificates is Governed by the contractual clauses and factually both the certificates are consistent with each other"
fufonknkrk ds mi;qZDr vkifRr ds QyLo:Ik bl fuxe }kjk bls HSCC (India) Ltd. ls lR;kfir djkus dk fu.kZ; fy;k x;k ,oa bl fuxe ds i=kad 5780] fnukad 26@12@2019 ds ek/;e ls DGM Civil HSCC (India) Ltd. dks i= Hkstk x;k gS] ftldk mRrj vHkh rd vizkIr gSA mDr fufonknkrk ds fo+:} bl dk;Z ds vU; fufonknkrk Shapoorji Pallonji & Company Pvt. Ltd. us vius i=kad SP/CAL/3000/2019/426] fnukad 13@12@2019 }kjk ;g ifjokn lefiZr fd;k gS fd "JMC Projects do not meet the eligibility criteria 4.5D of NIT having made loss in 4 out of last 7 financial years as below:-
2013-14-Loss of Rs. 1061 Lakhs 2014-15-Loss of Rs. 2429 Lakhs 2015-16-Loss of Rs. 6941 Lakhs 2016-17-Loss of Rs. 4185 Lakhs mDr fufonknkrk ds fo+:} bl dk;Z ds vU; fufonknkrk Larsen & Toubro us vius i=kad L&T/B&F/ CB&A/Health/BMSICL/2019-007] fnukad 22@12@2019 }kjk ;g ifjokn lefiZr fd;k gS fd "Whereas M/s JMC projects Pvt. Ltd. has incurred losses in the F.Y. 14, 15, 16 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 15/172 & F.Y. 17 which is more than 2 financial years in the last 7 financial years. The copy of the audited financial results submitted by M/s JMC project to BSE/NSE is enclosed for your reference."
M/s JMC Projects (India) Ltd. ds Audited Profit and Loss statement ds fo:} izkIr ifjokn ds vkyksd esa mDr fufonknkrk dh foxr 7 o"kksZ ds Financial statement dh tkap Independent Tax Auditor ls djkbZ xbZ] ftlesa muds }kjk Ministry of Corporate Af- fairs (MCA) dh osclkbZV ls MkmuyksM dh xbZ ftldk fooj.k fuEuor~ gS%& Financial Year (Rs. In Cr.) Types of Financial Particulars Statement 2012- 2013- 2014- 2015- 2016-
2017-18 2018-19
13 14 15 16 17
Profit after
Tax (As per
18.33 22.97 29.85 43.37 58.25 106.12 142.13
tender
document)
Standalone
Profit after
Tax (As per
30 44 58 106 143
ROC
Record)
From
Consoli-
Bidder 8.5 -10.61 -24.29 -66.33 -41.85 26.85 76.64
dated
website
Sunil Shyama and Associates (Chartered Accounts)
us ;g Hkh earO; fn;k gS fd "with respect to analysis of con- solidated financial statement of JMC Project (India) Ltd., Ahmedabad regarding its profitability, earning per share (EPS) and tax implication should be considered on the ba- sis of consolidated financial results and not standalone fi- nancial statement. As per AS-21 (Accounting standard) consolidated financial result includes financial of sub- Patna High Court CWJC No.208 of 2020 dt.11-08-2022 16/172 sidiary company, associate enterprises and joint venture of the company. It is mandatory as per MCA and SEBI guidelines & investment loss under income tax act." Tax Consultant Sunil Shyama and Associate izkIr earO; ds vkyksd esa ;g ik;k x;k fd JMC Projects foRrh; o"kZ 2013&14 ls 2016&17 rd yxkrkj 4 o"kksZ rd Loss ess jgs gSa] QyLo:Ik os fufonk nLrkost dh vko';d Qualifying Criteria dafMdk 4-5D dks iwjk ugha djrs gSA lkFk gh mUgsa fufonk nLrkost dh dafMdk 4-8 ds vkyksd esa Misleading information lefiZr djus dk nks"kh Hkh ik;k x;kA mi;qZDl rF;ksa ds vkyksd esa JMC Project (India) Ltd. dks rduhdh :i ls Non Responsive ,oa vlQy ekurs gq, foRrh; fcM ugha [kksyus dk fu.kZ; fy;k x;kA Contentions of the Ld. Counsel for the petitioner
7. The learned counsel for the petitioner has submitted that the ground furnished by the Technical Tender Committee in its minutes / proceedings of the meeting of the Technical Tender Committee of the Respondent No. 2 dated 13.12.2019 (Annexure-7 to the writ petition) or for that matter the one dated 03.01.2020 (Annexure- 14 to the writ petition), to hold the petitioner non- responsive, to the effect that two certificates issued by HSCC (India) Ltd. are contradictory in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 17/172 nature, is not correct inasmuch as both the certificates are complementary to each other and the Respondent No. 2 has wrongly concluded that the petitioner ought to be disqualified being not eligible under Clause 4.5(A)(b) of the Instruction to Bidders. In this regard, it is submitted that the petitioner had clearly stated in its letter dated 18.12.2019 and explained the reasons as to why HSCC India Ltd. has used the expression "substantially completed" on 20.1.2017 in the certificate dated 27.6.2017 whereas in the certificate dated 31.10.2018, it has been acknowledged that the work was completed on 20.1.2017. In this connection, it is submitted that the petitioner had satisfactorily completed the construction work of the hospital/OPD and other associated works of KCGMC during the last seven years and in order to establish the same, the petitioner submitted two certificates with the Respondent No. 2. The first certificate dated 27.6.2017 issued by HSCC certified that the petitioner has substantially completed the work Patna High Court CWJC No.208 of 2020 dt.11-08-2022 18/172 towards the construction of KCGMC on 20.01.2017, while the certificate dated 31.10.2018, issued by HSCC certified that the petitioner has completed the work towards the construction of KCGMC on 20.01.2017. It is also submitted that even otherwise the Technical Tender Committee has wrongly taken the financial year 2016-17 to be the cut-off year for the qualification of a bidder in term of Clause 4.5(A)(b). It is stated that the work towards construction of KCGMC was completed by the petitioner before 20.01.2017 and the expression "substantially completed" used in certificate dated 27.6.2017 was used since this certificate was issued during the pendency of the Defect Liability Period (in short referred to as "DLP"). Even otherwise in terms of Clause 27 of the SCC of the HSCC project, the certificate of final completion was only to be issued after the expiry of the DLP. The DLP in the KCGMC Project expired on 26.06.2018 and as such a certificate of final completion in terms of Clause 27(b) was issued on 31.10.2018 certifying that the project was Patna High Court CWJC No.208 of 2020 dt.11-08-2022 19/172 completed on 20.1.2017. Therefore, there was no scope of confusion or any contradiction or any dichotomy in the two certificates. It is thus the case of the petitioner that the aforesaid ground for non-suiting the petitioner is firstly non-est in the eyes of law and secondly, even after the petitioner had clarified about the same, the Technical Tender Committee of the Respondent No. 2 had not responded to the said clarification at the time of evaluating the technical bid of the petitioner and others in its meeting held on 03.01.2020 and had again reiterated the said ground i.e. regarding the petitioner not fulfilling the criteria laid down in Clause 4.5(A)(b) of the Instruction to Bidders, for the purposes of holding the bid of the petitioner to be non-responsive. It is therefore, submitted that the aforesaid ground for declaring the bid of the petitioner to be non-responsive is illegal, arbitrary and fit to be set aside.
8. The Ld. Counsel for the petitioner has further submitted that as far as the minutes / proceedings of the meeting of the Technical Tender Committee Patna High Court CWJC No.208 of 2020 dt.11-08-2022 20/172 of the Respondent No. 2 dated 03.01.2020 (Annexure-14 to the writ petition) is concerned, it would depict that the decision to reject the bid of the petitioner has been taken on the basis of a purported inquiry, stated to have been conducted by the Respondent No. 2, on the basis of alleged representations received from the rival bidders of the petitioner and a purported opinion obtained from a Chartered Accountant, none of which were ever put to the petitioner during the process of evaluation of its bid, hence there has been gross violation of the terms and conditions of the NIT and the principles of the natural justice. It is also submitted that the alleged reasons for rejection of the bid of the petitioner, as set out in the minutes dated 03.01.2020, are based not only on an incorrect appreciation of facts and applicable legal provisions, but are also manifestly arbitrary, unreasonable, discriminatory and violative of the constitutional rights of the petitioner. It is next submitted that there is no requirement under the NIT or in law, for a bidder to furnish consolidated Patna High Court CWJC No.208 of 2020 dt.11-08-2022 21/172 financial statements and or financial statements of its subsidiaries for the purpose of demonstrating eligibility to bid under the NIT, however, on the contrary, the clear requirement is to provide standalone financial statement/balance sheet inasmuch as it has been clearly stipulated in Clause 4.5(D) read with 4.3(f) of the NIT that the audited report / reports of the financial standing of the bidder are required for verifying the eligibility criterion prescribed in Clause 4.5(D) of the NIT. It is contended that the petitioner has duly submitted its standalone financial statements for the required period to establish its eligibility under Clause 4.5 of the NIT and Respondent No. 2 is required to consider only the standalone financial statements in order to evaluate the eligibility of the petitioner under Clause 4.5(D). Thus, apparently the petitioner has not concealed or misrepresented any information, or provided any false/misleading information to the Respondent No. 2 with regard to its financial statements, or otherwise. It is stated that the petitioner being a listed company, its Patna High Court CWJC No.208 of 2020 dt.11-08-2022 22/172 consolidated financial statements are not only available on its website but also on the record of the Ministry of Corporate Affairs and thus is in public domain, hence, the petitioner could not have ever gained by furnishing such alleged misleading information.
9. The Ld. Counsel for the petitioner has also contended that a plain reading of Clause 4.5(D) read with Clause 4.3(f) and other provisions of the NIT would show that the petitioner was required to furnish its standalone financial balance sheet to establish that it is not in losses in more than 2 years in the past 7 years, however, the said clauses, in no manner, require the petitioner to submit/furnish its consolidated balance sheet. Thus, invocation of Clause 4.8 is wholly illegal, misconceived and clearly smacks of malafide to oust the petitioner to ultimately favour already declared technically qualified bidders. It is next contended that the contention of the Respondent No. 2 that the petitioner has "incurred losses"
during four consecutive financial years namely Patna High Court CWJC No.208 of 2020 dt.11-08-2022 23/172 financial years 2013-14 to 2016-17 is completely incorrect and baseless, inasmuch as the same ignores the fact that the petitioner company is a different and distinct legal entity from its subsidiary companies, and the profits and/or losses of its subsidiaries cannot be conflated along with those of the petitioner for the purpose of evaluating eligibility to bid under the NIT.
It is also contended that the opinion purportedly sought by the Respondent No. 2 is nothing but a nefarious design to justify the impugned predetermined decision of rejecting the technical bid of the petitioner, taken pursuant to the conclusion of the technical bid meeting on 13.12.2019. The said opinion merely states that the Earnings Per Share (EPS) and "tax implication"
in respect of the petitioner should be considered on the basis of consolidated financial results and not standalone financial statement, and it is not clear as to in what context the said opinion has been rendered. As regards, Accounting Standard AS-21 and MCA / SEBI Guidelines and provisions of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 24/172 Income Tax Act, 1961 with regard to reporting of investment loss etc., it is submitted that the same only pertains to reporting requirements mandated by law under Section 129 of the Companies Act, 2013 and cannot be stretched to mean that profitability of a 'Bidder' under the NIT is required to be determined on the basis of its consolidated financial statement. It is stated that Earnings Per Share and tax implication of a company are determined on the basis of its standalone financial statements alone, and financial statements of its subsidiaries/ associates have no role to play in this respect.
10. The learned counsel for the petitioner has also relied on Section 129(1) read with Section 129(2) and 129(3) of the Companies Act, which is reproduced herein below:-
"SECTION 129. FINANCIAL STATEMENT (1) The financial statements shall give a true and fair view of the state of affairs of the company or companies, comply with the accounting standards notified under section Patna High Court CWJC No.208 of 2020 dt.11-08-2022 25/172 133 and shall be in the form or forms as may be provided for different class or classes of companies in Schedule III:
Provided that the items contained in such financial statements shall be in accordance with the accounting standards;
Provided further that nothing contained in this sub-section shall apply to any insurance or banking company or any company engaged in the generation or supply of electricity, or to any other class of company for which a form of financial statement has been specified in or under the Act governing such class of company;
Provided also that the financial statements shall not be treated as not disclosing a true and fair view of the state of affairs of the company, merely by reason of the fact that they do not disclose--
(a) in the case of an insurance company, any matters which are not required to be disclosed by the Insurance Act, 1938 (4 of 1938), or the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 26/172
(b) in the case of a banking company, any matters which are not required to be disclosed by the Banking Regulation Act, 1949 (10 of 1949);
(c) in the case of a company engaged in the generation or supply of electricity, any matters which are not required to be disclosed by the Electricity Act, 2003 (36 of 2003);
(d) in the case of a company governed by any other law for the time being in force, any matters which are not required to be disclosed by that law.
(2) At every annual general meeting of a company, the Board of Directors of the company shall lay before such meeting financial statements for the financial year. (3) Where a company has one or more subsidiaries or associate companies, it shall, in addition to financial statements provided under sub-section (2), prepare a consolidated financial statement of the company and of all the subsidiaries and associate companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which shall also be laid before the annual general meeting of the company Patna High Court CWJC No.208 of 2020 dt.11-08-2022 27/172 along with the laying of its financial statement under sub-section (2):
Provided that the company shall also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiary or subsidiaries and associate company or companies in such form as may be prescribed.
Provided further that the Central Government may provide for the consolidation of accounts of companies in such manner as may be prescribed."
It is stated, by referring to Section 129(1) read with Section 129(2) of the Companies Act, 2013, that the standalone financial statement/ standalone balance sheet of the petitioner company as prepared and filed is considered as its balance sheet and consolidated balance sheet is not considered as the balance sheet of the petitioner company. Preparation and filing of the consolidated financial statement is in addition to the standalone financial statement, hence the provisions of Section 129(3) of the Companies Act, Patna High Court CWJC No.208 of 2020 dt.11-08-2022 28/172 2013 can, in no manner, be interpreted so as to mean that the Respondent No. 2 is entitled to consider the consolidated financial statements of the petitioner (as opposed to its standalone financial statements) in order to evaluate and determine eligibility of the petitioner under Clause 4.5(D) of the NIT. It is stated that it is a well settled legal position, settled by a catena of judicial precedents, that a company is a separate and distinct legal entity from its subsidiaries having independent corporate personality. Reference has also been made to Section 19 of the Companies Act, which substantively bars a subsidiary company from holding shares in its holding company either by itself or through its nominees, and furthermore bars a holding company from allotting or transferring its shares to any of its subsidiary companies, and expressly declares any such allotment or transfer of shares of a company to its subsidiary company to be void. Thus, it is submitted that the clear legislative intent is to maintain separate operational identity of a holding Patna High Court CWJC No.208 of 2020 dt.11-08-2022 29/172 company and its subsidiaries and thereby preserve the respective shareholders' control over them. It is also submitted that Section 129 of the Companies Act, 2013 is merely a compliance requirement & an extension of Section 212 of the Companies Act, 1956 for providing information about the group of companies. In this regard, the learned counsel for the petitioner has referred to a judgment rendered by the Hon'ble Apex Court in the case of State of Kerala vs. Zoom Developers (P) Ltd. & Others, reported in (2009) 4 SCC 563, paragraph no. 31 whereof is reproduced herein below:-
"31. At this stage, one must keep in mind that Section 212 of the Companies Act, 1956 makes it obligatory on behalf of the holding company to annex to its balance sheet the balance sheet and P&L account and other financial particulars of its subsidiary. Section 212 requires the legal relationship of holding company and subsidiary company to be disclosed to all its members."
11. It is thus submitted that it is a settled principle of law that the legal relationship between a holding Patna High Court CWJC No.208 of 2020 dt.11-08-2022 30/172 company and its subsidiary (ies) is that they are two separate legal persons and the holding company does not own the assets of the subsidiary company, and in law, the management of the business of the subsidiary also vests in its board of directors, as such, the only right of the holding company as a shareholder is to get dividend as and when declared, to participate in liquidation proceeds and to vote at the meeting of shareholders of the subsidiary. In this connection reliance is placed by the Ld. Counsel for the petitioner on a judgment rendered by the Hon'ble Supreme Court in the case of Vodafone International Holding B.V. Vs. Union of India (UOI) and Ors., reported in 2012 (6) SCC 613 wherein it has been held that under the provisions of the Income Tax Act as applicable to companies, the liability of a company (such as the petitioner) to pay income tax, is determined on the basis of its standalone financial statements alone, the financial statements of its subsidiaries in this regard are not to be considered and the subsidiary Patna High Court CWJC No.208 of 2020 dt.11-08-2022 31/172 companies of a company (if any), are independently assessed to tax on the basis of their respective standalone financial statements and their liability for payment of income tax is determined as such. It would be apt to reproduce paras no. 72, 101, 254 & 259 of the aforesaid Judgement rendered in the case of Vodafone International Holdings BV (Supra), herein below:-
"72. The approach of both the corporate and tax laws, particularly in the matter of corporate taxation, generally is founded on the abovementioned separate entity principle i.e. treat a company as a separate person. The Income Tax Act, 1961, in the matter of corporate taxation, is founded on the principle of the independence of companies and other entities subject to income tax. Companies and other entities are viewed as economic entities with legal independence vis-à-vis their shareholders/participants. It is fairly well accepted that a subsidiary and its parent are totally distinct taxpayers. Consequently, the entities subject to income tax are taxed on profits derived by them on stand-alone basis, irrespective of their actual degree of economic independence and regardless of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 32/172 whether profits are reserved or distributed to the shareholders/participants. Furthermore, shareholders/participants that are subject to (personal or corporate) income tax, are generally taxed on profits derived in consideration of their shareholding/ participations, such as capital gains. Nowadays, it is fairly well settled that for tax treaty purposes a subsidiary and its parent are also totally separate and distinct taxpayers.
101. A company is a separate legal persona and the fact that all its shares are owned by one person or by the parent company has nothing to do with its separate legal existence. If the owned company is wound up, the liquidator, and not its parent company, would get hold of the assets of the subsidiary. In none of the authorities have the assets of the subsidiary been held to be those of the parent unless it is acting as an agent. Thus, even though a subsidiary may normally comply with the request of a parent company it is not just a puppet of the parent company. The difference is between having power or having a persuasive position. Though it may be advantageous for parent and subsidiary companies to work as a group, each subsidiary will look to see whether there are Patna High Court CWJC No.208 of 2020 dt.11-08-2022 33/172 separate commercial interests which should be guarded.
Holding company and subsidiary com- pany
254. The Companies Act in India and all over the world have statutorily recognised subsidiary company as a separate legal entity. Section 2(47) of the Companies Act, 1956 defines "subsidiary company" or "subsidiary", a subsidiary company within the meaning of Section 4 of the Act. For the purpose of the Companies Act, a company shall be subject to the provisions of sub- section (3) of Section 4, be deemed to be subsidiary of another, subject to certain conditions, which includes holding of share capital in excess of 50% controlling the composition of the Board of Directors and gaining status of a subsidiary with respect to the third company by the holding company's subsidisation of the third company.
259. The US Supreme Court in United States v. Bestfoods [141 L Ed 2d 43 : 524 US 51 (1998)] explained that it is a general principle of corporate law and legal systems that a parent corporation is not liable for the acts of its subsidiary, but the Court went on to explain that corporate veil can be pierced Patna High Court CWJC No.208 of 2020 dt.11-08-2022 34/172 and the parent company can be held liable for the conduct of its subsidiary, if the corporal form is misused to accomplish certain wrongful purposes, when the parent company is directly a participant in the wrong complained of. Mere ownership, parental control, management, etc. of a subsidiary is not sufficient to pierce the status of their relationship and, to hold parent company liable. In Adams v. Cape Industries Plc. [1990 Ch 433 : (1990) 2 WLR 657 : (1991) 1 All ER 929 (CA)] , the Court of Appeal emphasised that it is appropriate to pierce the corporate veil where special circumstances exist indicating that it is mere facade concealing true facts."
Reference has also been made to Section 198 of the Companies Act, according to which, the calculation of profits of a company for the purpose of Section 197, is required to be made on the basis of its standalone financial statements alone and the financial statements of its subsidiaries (if any) have no material bearing or relevance for the purpose of such determination, which is also evident from the express and unequivocal provisions of Sub-Sections 3, 4 and 5 of Section Patna High Court CWJC No.208 of 2020 dt.11-08-2022 35/172 198 of the Companies Act, 2013. Thus, it is the case of the petitioner that it has posted net profits in the preceding five consecutive financial years in its standalone financial statements, it has been independently assessed to income tax and has duly paid the same on the basis of its income as per its standalone financial statements while its subsidiaries have been independently assessed for their respective income tax liabilities, as per law. Even as per Clause 4.2(i) of the NIT, a bidder is required to establish solvency to the extent of only 10% of the contract value of work and in this regard a certificate from the banker is required by the Respondent No. 2. This Certificate has been duly furnished by the petitioner along with its bid. Thus, the profitability/financial capability or solvency of the subsidiary(ies) of a bidder have absolutely no nexus or connection with the object of the tender to ensure that a bidder is financially capable of executing the works. As such, it is only the standalone financial statements of the petitioner which are required to be referred to for Patna High Court CWJC No.208 of 2020 dt.11-08-2022 36/172 determining eligibility under the provisions of Clause 4.5D of the NIT.
12. It is next contended by the Ld. Counsel for the petitioner that the decision of the Technical Tender Committee of the Respondent No. 2 to disqualify the petitioner on the basis of its consolidated financial statements amounts to amending / modifying the tender conditions after the bidding process has started and technical bids have been opened and evaluated, thereby changing the rules of the game midway, by a process, which is impermissible in law. Reference in this regard has made to a judgment rendered by the Hon'ble Apex Court in the case of Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Ors., reported in (2000) 5 SCC 287, paragraphs no. 11 and 12 whereof are reproduced herein below:-
"11. Broadly stated, the courts would not in- terfere with the matter of administrative ac- tion or changes made therein, unless the Gov- ernment's action is arbitrary or discriminatory Patna High Court CWJC No.208 of 2020 dt.11-08-2022 37/172 or the policy adopted has no nexus with the object it seeks to achieve or is mala fide.
12. If we bear these principles in mind, the High Court is justified in setting aside the award of contract in favour of Monarch Infra- structure (P) Ltd. because it had not fulfilled the conditions relating to clause 6(a) of the Tender Notice but the same was deleted sub- sequent to the last date of acceptance of the tenders. If that is so, the arguments advanced on behalf of Konark Infrastructure (P) Ltd. in regard to the allegation of mala fides of the Commissioner of the Municipal Corporation in showing special favour to Monarch Infrastruc- ture (P) Ltd. or the other contentions raised in the High Court and reiterated before us are in- significant because the High Court had set aside the award made in favour of Monarch Infrastructure (P) Ltd. The only question there- fore remaining is whether any contract should have been awarded in favour of Konark Infra- structure (P) Ltd. The High Court had taken the view that if a term of the tender having been deleted after the players entered into the arena it is like changing the rules of the game after it had begun and, therefore, if the Government or the Municipal Corporation was free to alter the conditions fresh process of tender was the only alternative permissible. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 38/172 Therefore, we find that the course adopted by the High Court in the circumstances is justi- fied because by reason of deletion of a partic- ular condition a wider net will be permissible and a larger participation or more attractive bids could be offered."
13. The Ld. counsel for the petitioner has next submitted that the petitioner has successfully executed and completed several works/projects cumulatively worth than Rs. 10,000 Crores, between the years 2010 to 2019 including a construction project of Additional Office Complex for the Hon'ble Supreme Court having total value of work executed of Rs. 440 crores which was completed in the month of September 2019, regardless of the fact that the subsidiaries of the petitioner had posted losses from financial years 2013-14 to 2016-2017. The petitioner is stated to have also completed the construction of 2 All India Institute of Medial Sciences & Hospitals, namely, AIIMS, Rishikesh and AIIMS Bhopal and a full- fledged hospital i.e. Kalpana Chawla Medical College, Karnal, on its own and the said hospitals Patna High Court CWJC No.208 of 2020 dt.11-08-2022 39/172 have been handed over to the requisite authorities as also the same are operational as on date. Thus, despite posting of losses during the period 2013-14 to 2016-17 by certain subsidiaries, the petitioner has successfully executed and completed works/projects worth more than Rs. 2000 crores in each of the said years, details whereof are as under:-
Financial Years 2013-14 2014-15 2015-16 2016-17 Total Income/ value of works 2,662.8 2,413.1 2,409.0 2,342.7 executed (in crore) It is also submitted that EPS as a metric for evaluating the financials of a company, is not relevant for the purposes of evaluating eligibility to bid under the NIT, or capability of executing the works sought to be tendered there under. EPS, at best can only be a parameter/tool for an investor to decide whether to invest or remain invested in a company. It is evident from the financial statements, credit rating and work experience credentials of the petitioner (as detailed in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 40/172 Annexure-15) that it is not only qualified and eligible to bid for the works under the NIT, but also capable of successfully executing the same. A bare perusal of the NIT/ITB shows that the tender conditions stipulate that the bidder and the bidder alone should fulfil the eligibility criteria and the credentials of the bidder alone are to be considered. Any consideration of credentials of a subsidiary, which is not a "Bidder" under the NIT, is completely arbitrary, unreasonable and extraneous to the provisions of the NIT as also completely contrary to the settled principles of law. In this regard, the Ld. counsel for the petitioner has referred to the following judgments:-
(i) Core Projects and Technologies Ltd. vs. The State of Bihar & Ors., reported in 2011 (59) BLJR 183 :: (2010) SCC Online Pat 916;
(ii) M/s Pratap Technocrats Pvt. Ltd. vs. M/s Bharat Sanchar Nigam Ltd., reported in 2017 SCC Online Del 8747;
(iii) Rohde & Schwarz Gmbh & Co. KG vs. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 41/172 Airport Authority of India & Anr., reported in MANU/DE/5017/2013.
Thus, it is the contention of the learned counsel for the petitioner that since the petitioner company has posted net profits in the preceding five consecutive financial years in its standalone financial statements and has been duly paying income tax on the basis of its income as per its standalone financial statements, while its subsidiaries are independently assessed for their respective income tax liabilities, the petitioner definitely fulfils the eligibility criteria laid down under the provisions of Clause 4.5(D) of the Instruction to Bidders.
14. The learned counsel for the petitioner has also contended that the principles of natural justice have not been followed inasmuch as no opportunity was granted to the petitioner before rejecting the technical bid of the petitioner of the aforesaid two cases either vide the minutes of meeting of the Technical Tender Committee of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 42/172 Respondent No. 2 dated 13.12.2019 or vide the minutes of meeting dated 03.01.2020. It is further submitted that in the first case, the Respondent No. 3 i.e. Shapoorji Pallonji & Company Pvt. Ltd. and in the second case, the Respondent No. 3 i.e. Larsen & Toubro Ltd. had made complaints, leading to the same being reflected in the minutes of meeting of the Technical Tender Committee of the Respondent No. 2 dated 03.01.2020, as also forming the basis for rejection of the technical bid of the petitioner qua the aforesaid two cases, however, the complaint petitions were neither supplied to the petitioner nor any response was sought from it, which is in violation of Clause 22.4
(ii) of the NIT, which provides that after receipt of confirmation of the bid security, the bidder will be asked in writing to clarify or modify his technical bid, if necessary, with respect to any rectifiable defects. It is submitted that the decision of the Technical Tender Committee of the Respondent no. 2, as contained in the minutes of meeting dated 03.01.2020, also shows that an opinion was Patna High Court CWJC No.208 of 2020 dt.11-08-2022 43/172 purportedly sought for from one Sunil Shyama and Associates (Chartered Accounts) with regard to the analysis of the consolidated financial statement of the petitioner regarding its profitability, earning per share and tax implication vis-a-vis the financial statement of the standalone petitioner company / its consolidated financial results including the finances of its subsidiary company, associate enterprises and joint venture companies, but a copy of the said opinion was neither given to the petitioner nor any response of the petitioner was sought thereon, although rejection of the technical bid of the petitioner is based on the said opinion of the Chartered Accountant. It is thus submitted that any action, which has a civil consequence, must be preceded by compliance of the principles of natural justice and moreover, any action of public body should be fair, non-arbitrary and judicially sound i.e. within the four corners of law and should not be malafide, taken with a view to suit the private respondents. It is stated that every action of the State/ Executive Authority must be subject to the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 44/172 rule of law and informed by reason and matter of entering into contract is also subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination. Reference, in this regard, has been made to a judgment rendered by the Ho'ble Apex Court in the case of Mahabir Auto Stores & Others Vs. Indian Oil Corporation & Others, reported in (1990) 3 SCC 752, paragraphs no. 12, 13 and 18 to 20 whereof are reproduced herein below:-
"12. It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this Court in Radha Krishna Agarwal v. State of Bihar [(1977) 3 SCC 457]. It appears to us, at the outset, that in the facts and circumstances of the case, the respondent company IOC is an organ of the State or an instrumentality of the State as Patna High Court CWJC No.208 of 2020 dt.11-08-2022 45/172 contemplated under Article 12 of the Constitution. The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contracts with individual parties. Article 14 of the Constitution would be applicable to those exercises of power. Therefore, the action of State organ under Article 14 can be checked. See Radha Krishna Agarwal v. State of Bihar [(1977) 3 SCC 457], but Article 14 of the Constitution cannot and has not been construed as a charter for judicial review of State action after the contract has been entered into, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. In a situation of this nature certain activities of the respondent company which constituted State under Article 12 of the Constitution may be in certain circumstances subject to Article 14 of the Constitution in entering or not entering into contracts and must be reasonable and taken only upon lawful and relevant consideration; it depends upon facts and circumstances of a particular transaction whether hearing is necessary and reasons have to be stated. In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 46/172 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. In this connection reference may be made to E.P. Royappa v. State of Tamil Nadu [(1974) 4 SCC 3], Maneka Gandhi v. Union of India [(1978) 1 SCC 248], Ajay Hasia v. Khalid Mujib Sehravardi [(1981) 1 SCC 722], R.D. Shetty v.
International Airport Authority of India [(1979) 3 SCC 489] and also Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay [(1989) 3 SCC 293]. It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair Patna High Court CWJC No.208 of 2020 dt.11-08-2022 47/172 play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case.
13. The existence of the power of judicial review however depends upon the nature and right involved in the facts and circumstances of the particular case. It is well settled that there can be "malice in law". Existence of such "malice in law" is part of the critical apparatus of a particular action in administrative law. Indeed "malice in law" is part of the dimension of the rule of relevance and reason as well as the rule of fair play in action.
18. Having considered the facts and circumstances of the case and the nature of the contentions and the dealing between the parties and in view of the present state of law, Patna High Court CWJC No.208 of 2020 dt.11-08-2022 48/172 we are of the opinion that decision of the State/public authority under Article 298 of the Constitution, is an administrative decision and can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India on any of the grounds available in public law field. It appears to us that in respect of corporation like IOC when without informing the parties concerned, as in the case of the appellant- firm herein on alleged change of policy and on that basis action to seek to bring to an end to course of transaction over 18 years involving large amounts of money is not fair action, especially in view of the monopolistic nature of the power of the respondent in this field. Therefore, it is necessary to reiterate that even in the field of public law, the relevant persons concerned or to be affected, should be taken into confidence. Whether and in what circumstances that confidence should be taken into consideration cannot be laid down on any strait-jacket basis. It depends on the nature of the right involved and nature of the power sought to be exercised in a particular situation. It is true that there is discrimination between power and right but whether the State or the instrumentality of a State has the right to function in public field or private field Patna High Court CWJC No.208 of 2020 dt.11-08-2022 49/172 is a matter which, in our opinion, depends upon the facts and circumstances of the situation, but such exercise of power cannot be dealt with by the State or the instrumentality of the State without informing and taking into confidence, the party whose rights and powers are affected or sought to be affected, into confidence. In such situations most often people feel aggrieved by exclusion of knowledge if not taken into confidence.
19. Such transaction should continue as an administrative decision with the organ of the State. It may be contractual or statutory but in a situation of transaction between the parties for nearly two decades, such procedure should be followed which will be reasonable, fair and just, that is, the process which normally be accepted (sic is expected) to be followed by an organ of the State and that process must be conscious and all those affected should be taken into confidence.
20. Having regard to the nature of the transaction, we are of the opinion that it would be appropriate to state that in cases where the instrumentality of the state enters the contractual field, it should be governed by the incidence of the contract. It is true that it may not be necessary to give reasons but, in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 50/172 our opinion, in the field of this nature fairness must be there to the parties concerned, and having regard to the large number or the long period and the nature of the dealings between the parties, the appellant should have been taken into confidence. Equality and fairness at least demands this much from an instrumentality of the State dealing with a right of the State not to treat the contract as subsisting. We must, however, evolve such process which will work.
15. The learned counsel for the petitioner has thus submitted that the action taken by the Respondent No. 2, pursuant to the purported representation of the rival bidders, smacks of malafide inasmuch as the Respondent No. 2 had no occasion to consider the same after the evaluation of bids had already been concluded on 13.12.2019, pursuant to which the Technical Evaluation Committee of the Respondent No. 2 had recommended rejection of the bid of the petitioner vide minutes of meeting dated 13.2.2019 on the ground of non-fulfilment of work experience criteria set out in Clause 4.5(A)(b) of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 51/172 Instruction to Bidders.
16. The learned counsel for the petitioner has also submitted that the impugned order is not in consonance with the tender conditions. In this connection, the learned counsel for the petitioner has taken this Court to the various Clauses of Instruction to Bidders as also its appendixes. The learned counsel for the petitioner has also referred to Clauses 3, 4 and 5 of the Instruction to Bidders, which are reproduced herein below:-
"3 Eligible Bidders 3.1 This Invitation for Bids is open to all bidders.
3.2 All bidders shall provide in Section 2, Forms of Bid and Qualification Information, a statement that the Bidder is neither associated, nor has been associated, directly or indirectly, with the Consultant; Engineer-in- Charge or any other entity that has prepared the design, specifications, and other documents for the Project or being proposed as Project Manager for the Contract or involved in supervision of the contract. A firm that has been engaged by the Employer to Patna High Court CWJC No.208 of 2020 dt.11-08-2022 52/172 provide consulting services for the preparation or supervision of the works, and any of its affiliates shall not be eligible to bid.
3.3 Bidders shall not be under a declaration of ineligibility for delay, failure or corrupt and fraudulent practices by any of the State Govt. or Central Govt. or Public Undertaking or any Autonomous Body.
4. Qualification of the Bidder
4.1 All bidders shall provide in Section 2, Forms of Bid and Qualification Information, a preliminary description of the proposed work method and schedule, including drawings and charts indicating miles stones to complete the project on time.
4.2 All bidders shall also furnish the following information in Section 2.
(i) Evidence of access to or availability of credit facilities (minimum 10% of estimated cost) certified by the bankers.
(ii) Undertaking that bidder would be able to invest a minimum of cost upto 25% of the contract value of work, during implementation of contract.
(iii) Proposals, if any, for sub contracting of elements of work, costing more than Patna High Court CWJC No.208 of 2020 dt.11-08-2022 53/172 10% of the bid amount. (for all contracts over Rs. 5 crore)
(iv) Power of attorney, if any.
4.3 If the Employer has not undertaken prequalification of potential bidders, all bidders shall include the following information and documents with their bids in Section 2:
(a) copies of original documents defining the constitution or legal status, place of registration, and principal place of business; written power of attorney of the signatory of the Bid to commit the Bidder.
(b) total monetary value of construction work performed for each of the last five years;
(c) experience in works of a similar nature and size for each of the last five years, and details of works underway or contractually committed; and clients who may be contacted for further information on those contracts;
(d) major items of construction equipment proposed to carry out the Contract or evidence of arrangement; of possessing them on hire/ lease/ buying as defined therein;
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 54/172
(e) qualifications and experience of key site management and technical personnel proposed for contract;
(f) reports on the financial standing of the Bidder, such as profit and loss statements and auditor's reports for the past five years;
(g) evidence of access to line(s) of credit and availability of other financial resources facilities (10% of contract value), certified by the Bankers (Not more than 3 months old)
(h) Undertaking that the bidder will be able to invest minimum cash up to 25% of contract value of work, during implementation of work.
(i) authority to seek references from the Bidder's bankers;
(j) information regarding any litigation, current or during the last five years, in which the Bidder is involved, the parties concerned and dispute amount;
(k) proposals for subcontracting components of the Works amounting to more than 10% of the Bid Price (for each, the qualifications and experience of the identified sub-contractor in the relevant Patna High Court CWJC No.208 of 2020 dt.11-08-2022 55/172 field should be annexed); (for all contracts over Rs. 5 Crore)
(l) the proposed methodology and programme of construction, backed with equipment planning and deployment, duly supported with broad calculations and quality control procedures proposed to be adopted, justifying their capability of execution and completion of the work as per technical specifications within the stipulated period of completion as per milestones Bids from Joint ventures are acceptable. (For work costing Rs. Ten crore or more) See JV norms at Pg. no. 32 to 39.
4.5 (A) To qualify for award of the contract, each bidder in its name should have in the last five years as referred to in Appendix:-
(a) Achieved in any one year a minimum annual financial turnover (in all classes of civil engineering construction works only) volume of construction work of at least the amount equal to the 50 % (fifty percent) estimated cost of works for which bid has been invited. The turn over will be indexed at the rate of 10% for a year. Certificate from statutory auditor is required to verify Patna High Court CWJC No.208 of 2020 dt.11-08-2022 56/172 the turnover from civil engineering construction work.
(b). The contracting Firm/Agency/JV should have "Satisfactorily Completed" in India as a prime contractor during the last seven years ending last day of the month previous to the month of date of tender i.e. 31 July, 2019 construction of:-
i. At least one hospital or composite hospital campus having College/Hostel/ Residential Building (including civil works along with services like plumbing, electrical, HVAC etc.) having total cost not less than 40% of the estimated value (i.e. Rs. 175.20 Cr.) of the project put to tender.
"Or"
At least one hospital or composite hospital campus having College/Hostel/Residential Building (including civil works along with services like plumbing, electrical, HVAC etc.) having total built up not less than 40% of the project (i.e. 45322 Sqm) put to tender.
And ii. Three works of similar nature in India each costing not less than 40% (forty percent) of the estimated cost of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 57/172 this project.
"Or"
Two works of similar nature in India each costing not less than 60% (sixty percent) of the estimated cost of this project.
"Or"
One work of similar nature in India each costing not less than 80% (eighty percent) of the estimated cost of this project.
I. "Similar Nature" shall means:- Con- struction of:-
I. Dental College/Medical College & Hos- pital Building 'or' II. Institutional Building more than 15 mtr in height 'or' III.Educational Building more than 15 mtr in height 'or' IV. Residential Building more than 15 mtr in height On composite basis i.e. civil works along with associated MEP services like plumbing, electrical HVAC Etc. for Central/State Govt./ PSU/Private Sector.
The completion certificate shall be issued by employer not below the rank of Executive Engineer or Project Manager. In case of private client the completion Patna High Court CWJC No.208 of 2020 dt.11-08-2022 58/172 certificate issued by employer should be certified by CA and supported with TDS certificate. The bidders shall have to also submit good quality digital photographs of the completed projects.
(c) executed in any one year, the minimum quantities of the following items of work as indicated in Appendix to ITB.
(i) Cement concrete (including RCC and PCC):- Cum
(ii) Brick Work:-cum
(iii)Flooring (Vitrified/ Mosaic/Marble/ Kota/Ceramic):- Sqm.
(usually 80% of the expected peak rate of construction)
(d) The contractor or his identified sub- contractor should possess required valid electrical license for executing the building electrification works and should have executed similar electrical works for a minimum amount as indicated in Appendix in any one year. In case bidder is not possession of such license, the bidder must enter into a tie-up arrangement with such license holder having requisite experience. Such tie-up must be duly notarized.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 59/172 The contractor or his identified sub- contractor should possess required valid license for executing the water supply/sanitary engineering works and should have executed similar water supply/sanitary engineering works for a minimum amount as indicated in Appendix in any one year. In case bidder is not in possession of such license, the bidder must enter into a tie-up arrangement with such license holder having requisite experience. Such tie-up must be duly notarized.
B. Each bidder should further demonstrate :
(a) availability (either owned or leased or by procurement against mobilization advances) of the following key and critical equipment for this work:
Based on the studies, carried out by the Engineer the minimum suggested major equipment to attain the completion of works in accordance with the prescribed construction schedule are shown in the Annexure-I. Availability of the testing equipment required for establishing field laboratory to perform mandatory tests e.g. those stated in Appendix to ITB.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 60/172 The bidders should, however, undertake their own studies and furnish with their bid, a detailed construction planning and methodology supported with layout and necessary drawings and calculations (detailed) as stated in clause 4.3(1) above to allow the employer to review their proposals. The numbers, types and capacities of each plant/equipment shall be shown in the proposals along with the cycle time for each operation for the given production capacity to match the requirements.
(b) availability for this work of personnel with adequate experience as required; as per Annexure-II.
(c) liquid assets and/or availability of credit facilities of no less than amount indicated in Appendix (Credit lines/letter of credit/certificates from Banks for meeting the funds requirement etc.-
usually the equivalent of the estimated cash flow for 3 months in peak construction period.) C. To qualify for a package of contracts made up of this and other contracts for which bids are invited in the IFB, the bidder must demonstrate having experience and resources Patna High Court CWJC No.208 of 2020 dt.11-08-2022 61/172 sufficient to meet the aggregate of the qualifying criteria for the individual contracts. D. That do not have incurred any loss in more than two years during the immediate last seven consecutive financial years ending 31.03.2019. The statement should be duly certified by the chartered accountant. Bidder should submit the audited Profit & Loss Account to verify the same.
4.6 Sub-contractors' experience and resources shall not be taken into account in determining the bidder's compliance with the qualifying criteria except to the extent stated in 4.5(A) above.
4.7 Bidders who meet the minimum qualification criteria will be qualified only if their available bid capacity is more than the total bid value. The available bid capacity will be calculated as under :
Assessed Available Bid capacity=(A*N*3 - B) Where A = Maximum value of civil engineering works executed in any one year during the last five years (updated to the price level of the year indicated in Appendix) taking into account the completed as well as works in progress. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 62/172 N = Number of years prescribed for completion of the works for which bids are invited.
B = Value (updated to the price level of the year indicated in Appendix) of existing commitments and on-going works to be completed during the next three years (period of completion of the works for which bids are invited) Note : The statements showing the value of existing commitments and on-going works as well as the stipulated period of completion remaining for each of the works listed should be either countersigned by the Engineer in charge, not below the rank of an Executive Engineer or equivalent or duly notarized by the bidder.
4.8 Even though the bidders meet the above qualifying criteria, they are subject to be disqualified if they have: -
- made misleading or false representations in the forms, statements and attachments submitted in proof of the qualification requirements; and/or
- have record of poor performance such as abandoning the works, not properly completing the contract, inordinate delays in completion, litigation history, or financial failures etc; and/or Patna High Court CWJC No.208 of 2020 dt.11-08-2022 63/172
- participated in the previous bidding for the same work and had quoted unreasonably high bid prices and could not furnish rational justification to the employer.
5. One Bid per Bidder 5.1 Each bidder shall submit only one bid for any work or one package or group. A bidder who submits or participates in more than one Bid for a package or group (other than as a subcontractor or in cases of alternatives that have been permitted or requested) will cause all the proposals with the Bidder's participation to be disqualified." It is thus submitted that a bare perusal of the aforesaid clauses 3, 4 and 5 of the Instruction to Bidders would show that the NIT has been floated by the Respondent No. 2 only for a bidder, who will participate in the NIT on standalone basis on the strength of its own Financial Credentials and its own work experience. It is also stated that the Instruction to Bidder uses the expression bidder and the expression subsidiary does not even picture in the Instruction to Bidder. Thus, using the financial credentials of a subsidiary, which is not a Patna High Court CWJC No.208 of 2020 dt.11-08-2022 64/172 bidder under the NIT, is completely arbitrary and extraneous to the provisions of the NIT and would amount to adding / sub-planting the word "subsidiary" in Clause 4.5(D) while interpreting the same, which is clearly impermissible in law. Thus, it is submitted that the Respondent No. 2 is bound to adhere to the aforesaid criteria, limiting the expression bidder in the NIT/ITB and it cannot be unilaterally deviated from, more so at the stage of evaluation of bid after invitation to bidders. In this connection, reliance has been placed on a judgment rendered by the Hon'ble Apex Court in the case of West Bengal State Electricity Board vs. Patel Engineering Co. Ltd. & Others., reported in (2001) 2 SCC 451. It is also contended that tender conditions must be scrupulously followed and the tender conditions cannot be modified or changed in any manner after bid has been opened and whatever procedure, tendering authority proposes to follow in accepting the tender, must be clearly stated in the tender notice. In this connection, the learned Patna High Court CWJC No.208 of 2020 dt.11-08-2022 65/172 counsel for the petitioner has referred to the judgments rendered in the cases of Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation & Ors, reported in (2000) 5 SCC 287, Dutta Associates Pvt. Ltd. vs. Indo Merchantiles Pvt. Ltd. & Others., reported in (1997) 1 SCC 53 and the one rendered in the case of Green Polytubes Pvt. Ltd. vs. State of Bihar & Ors., reported in MANU/BH/ 0011/2002.
17. The learned counsel for the petitioner has also referred to some well-settled principles of law to buttress its case. It has been firstly stated that discretion of tendering authority in accepting offer in contracts, ought to be done within the four corners of requirements of law especially Article 14 of the Constitution of India. In this connection, the learned counsel for the petitioner has referred to a judgment rendered by the Hon'ble Apex Court in the case of Union of India & Ors. vs. Dinesh Engineering Corporation & Anr., reported in (2001) 8 SCC 491, paragraph no. 16 whereof is Patna High Court CWJC No.208 of 2020 dt.11-08-2022 66/172 reproduced herein below:-
"16. But then as has been held by this Court in the very same judgment that a public authority even in contractual matters should not have unfettered discretion and in contracts having commercial element even though some extra discretion is to be conceded in such authorities, they are bound to follow the norms recognised by courts while dealing with public property. This requirement is necessary to avoid unreasonable and arbitrary decisions being taken by public authorities whose actions are amenable to judicial review. Therefore, merely because the authority has certain elbow room available for use of discretion in accepting offer in contracts, the same will have to be done within the four corners of the requirements of law, especially Article 14 of the Constitution. In the instant case, we have noticed that apart from rejecting the offer of the writ petitioner arbitrarily, the writ petitioner has now been virtually debarred from competing with EDC in the supply of spare parts to be used in the governors by the Railways, ever since the year 1992, and during all this while, we are told the Railways are making purchases without any tender on a proprietary basis only from EDC which, in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 67/172 our opinion, is in flagrant violation of the constitutional mandate of Article 14. We are also of the opinion that the so-called policy of the Board creating monopoly of EDC suffers from the vice of non-application of mind, hence, it has to be quashed as has been done by the High Court."
18. The learned counsel for the petitioner has next submitted that object of the tender is plurality of players so that the choice can be made of the most competitive bidder. In this connection, the learned counsel for the petitioner has relied upon a judgment rendered in the case of Sumitomo Chemical India Pvt. Ltd. vs. HLL Lifecare Ltd. reported in 2002 SCC Online Del 500. It is also contended that right to life under Article 21 includes right to opportunity. Thus, it is submitted that doctrine of level playing field is an important concept while construing Article 19 (1)(g) of the Constitution of India, which confers fundamental right to carry on business to a company, hence, it is entitled to invoke the said doctrine of level playing field. It is stated that it is equally a well- settled law that the principle of judicial review Patna High Court CWJC No.208 of 2020 dt.11-08-2022 68/172 cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest and grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In this connection, the learned counsel for the petitioner has referred to a judgment rendered by the Hon'ble Apex Court in the case of Reliance Energy Ltd. & Anr. vs. Maharashtra State Road Development Corpn. Ltd.& Others, reported in (2007) 8 SCC 1, paragraphs no. 36, 38 and 39 whereof are reproduced herein below:-
"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 of public power in a democracy. Article 14 of the Constitution embodies the principle of "non- discrimination". However, it is not a free- standing provision. It has to be read in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 69/172 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 the 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 this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, 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 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 70/172 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 the principle of "equality" should not be read as a standalone 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 mentioned in the matter of implementation of the aforestated 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.
38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This "legal certainty"
is an important aspect of the rule of law. If there is vagueness or subjectivity in the said Patna High Court CWJC No.208 of 2020 dt.11-08-2022 71/172 norms it may result in unequal and discriminatory treatment. It may violate doctrine of "level playing field".
39. In Reliance Airport Developers (P) Ltd. v. Airports Authority of India [(2006) 10 SCC 1] the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms.
Those norms may be legal norms or accounting norms. As long as the norms are clear and properly understood by the decision-maker and the bidders and other stakeholders, uncertainty and thereby breach Patna High Court CWJC No.208 of 2020 dt.11-08-2022 72/172 of the rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above "certainty" is an important aspect of the rule of law.
In Reliance Airport Developers [(2006) 10 SCC 1] the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks at different stages. Objectivity was thus provided."
19. Thus, it is the submission of the learned counsel for the petitioner of the aforesaid two cases that the minutes of meeting of the Technical Tender Committee of the Respondent No. 2 dated 13.12.2019 and 03.01.2020 whereby and whereunder the technical bid of the petitioner of the aforesaid two cases has been held to be non- Patna High Court CWJC No.208 of 2020 dt.11-08-2022 73/172 responsive, be quashed and consequently, the Respondent No. 2 be directed to consider the financial bid submitted by the petitioner, taking into account the fact that the petitioner fulfils the eligibility criteria mentioned in Clause 4.5(A)(b) and Clause 4.5(D) of the Instruction to Bidders as also its technical bid is responsive in terms of the tender conditions.
Contentions of the Ld. Senior Counsel for the respondent No. 2 in both the aforesaid two cases
20. Per contra, the learned Senior Counsel appearing for the Respondent No. 2, Sri Lalit Kishore, Advocate General, has submitted that it is the duty of the Respondent No. 2 to ensure that the bidder is sound from all corners. It is stated that the participating bidders, namely, Shapoorji Pallonji and Company Pvt. Ltd. & Larsen and Toubro Ltd., had submitted a written representation against the petitioner i.e M/s JMC Projects (India) Ltd., stating therein that the said company has suppressed facts by not submitting consolidated Patna High Court CWJC No.208 of 2020 dt.11-08-2022 74/172 profit/loss statement in which they have incurred losses in the F.Y. 2013-14, 2014-15, 2015-16 and 2016-17, which is more than two financial years in the last seven financial years, hence, the petitioner does not fulfill the conditions laid in Clause 4.5D of the tender documents. It is stated that after receipt of the representation from the participating bidders, the tender technical committee thoroughly examined the financial statement of the petitioner company wherein it was found that the petitioner company has submitted its standalone financial statements showing that it had earned profit during the relevant period. The tender technical committee got the consolidated financial statement of the petitioner company downloaded from the website of the Registrar of Companies, Ministry of Corporate Affairs (MCA), Govt. of India and found that the company had incurred losses during four consecutive years i.e F.Y. 2013-14, 2014-15, 2015-16 and 2016-17, as outlined in paragraph No. 2.5 (IV) of the tender technical committee's proceedings dated 03.01.2020. It is Patna High Court CWJC No.208 of 2020 dt.11-08-2022 75/172 further submitted that an opinion regarding the technical eligibility qualification status of the petitioner company was taken from an independent Chartered Accountant namely Sunil Shyama and Associates, who gave his opinion in the following terms:-
"With respect to analysis of consolidated financial status of JMC Projects (India) Ltd., Ahmedabad regarding its profitability, earning per share (EPS) and Tax implication should be considered on the basis of consolidated financial results and not standalone financial statement. As per AS-21 (Accounting Standard) consolidated financial result includes financial of subsidiary company, associate enterprises and joint venture of the company. It is mandatory as per MCA and SEBI guidelines and investment loss under Income Tax Act."
It is thus submitted that the aforesaid opinion makes it explicitly clear that the petitioner company fails to fulfill the technical eligibility criteria as laid in Clause 4.5 (D) of the tender documents. The learned Senior Counsel for the Respondent No. 2 has also referred to Section 129 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 76/172 of the Companies Act, 2013 and has submitted that all the listed and unlisted companies, having one or more subsidiaries, including associate companies and joint ventures must compulsorily prepare the consolidated financial statements and the said concept of Consolidated Financial Statement was brought with an objective of achieving the true and fair view of reporting the position of the company for the financial year, since the consolidated financial statements are generally considered as primary financial statements from an economic entity perspective, whereas the standalone financial statement projects only the position of the company in its individual performance and does not provide the true and fair view to the shareholders about the overall performance of the company with its subsidiaries. The learned Senior Counsel for the Respondent No. 2 has also referred to Accounting Standard-110 whereby and whereunder consolidated financial statement is required to be mandatorily compiled in preparation of financial Patna High Court CWJC No.208 of 2020 dt.11-08-2022 77/172 statement and accounting policies. It is stated that the petitioner has 4 (four) 100% subsidiaries and has associates with 49.57 % holding, hence, in the case of holding company, the financial health can only be derived after consolidation of financial statements of the subsidiaries and associates. Besides, if holding company is bearing fruits of good days then it has also to bear the wrath of bad days. In is stated that the fact is that the Technical Tender Committee had analyzed the standalone financial statements and consolidated financial statements of the petitioner, whereafter it was observed that the standalone EPS was positive and EPS derived on the basis of consolidated financial statement was negative from the financial year 2013-14 to 2016-17. In such view of the matter, the Technical Tender Committee thought it proper to take a look at the consolidated financial statements of the petitioner company before taking any decision with regard to the holding company. It is also submitted that one of the participating bidders namely Shapoorji Pallorji and Patna High Court CWJC No.208 of 2020 dt.11-08-2022 78/172 Company Pvt. Ltd. had submitted a written representation against the petitioner company M/s JMC Projects (India) Ltd., stating therein that the petitioner company has suppressed facts inasmuch as it has not submitted details regarding its existing commitment and ongoing works. After receipt of the representation from the participating bidder, details of existing commitment and ongoing works, uploaded by the petitioner company on the website of Bombay Stock Exchange, was thoroughly examined and it was found that the petitioner company has itself declared the details of the projects awarded to it via press release but the same were not uploaded by the petitioner company in their tender documents submitted to BMSICL, which is a mandatory criteria as per the provisions laid down in Clause 4.7 of the tender document, obviously with a deliberate intention to conceal its bid capacity. It is also submitted that details of several projects have not been furnished by the petitioner company, which are worth approximately Rs. 4346 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 79/172 crores and would seriously affect the bid capacity of the petitioner company. In such view of the matter, considering the provision contained in Clause 4.8 of the Instruction to Bidders, the bid of the petitioner has rightly been rejected inasmuch as the petitioner company has made misleading / false representation by not submitting the details of existing commitment and ongoing works. It is next submitted that the petitioner company was awarded the work of construction of AIIMS, Bhopal, which was required to be completed within two years, but the same has not yet been completed. Similarly, the petitioner is yet to complete the construction work of AIIMS, Rishikesh and has not adhered to the timeline within which the said project was required to be completed.
Thus, it is submitted that since the petitioner company is running in loss and is not having a healthy financial condition, it has not been able to complete two of the Government of India's prestigious projects, even after a lapse of over nine years though the same were required to be Patna High Court CWJC No.208 of 2020 dt.11-08-2022 80/172 completed within two years, the Respondent No. 2 is of the firm belief that if the present project is handed over to the petitioner company, the same shall not be completed within the designated time period, hence, would adversely effect the delivery of health services to the people of the State.
21. It is further contended by the learned Senior Counsel for the Respondent No. 2 that the Technical Tender Committee in its meeting held on 03.01.2020, after cautious, serious and judicious consideration of the facts and evidences pertaining to the matter in question, came to the conclusion that the petitioner company has incurred losses during four consecutive financial years i.e. FY 2013-14, 2014-15, 2015-16 and 2016-17 respectively and has thus failed to fulfill the conditions / eligibility criteria as laid down in Clause 4.5 (D) of the tender document. Thus the Technical tender Committee rejected the technical bid of the petitioner company and decided not to open the financial bid of the said company. It is also submitted that recently, the Central Public Patna High Court CWJC No.208 of 2020 dt.11-08-2022 81/172 Works Department (CPWD), New Delhi has issued an Office Memorandum vide No. DG/SOP/5 (issued by the Authority of Director General, CPWD) dated 10.1.2020, whereby modification has been made in the initial criteria for eligibility in the SOP. As per the new provision laid by CPWD, the balance sheet in case of Private / Public Ltd. company means, both its standalone finance statement as also the consolidated financial statement and as far as financial information to be furnished in Form-A regarding eligibility is concerned, the profit/loss, both as per standalone financial statement as also consolidated financial statement, is required to be furnished. It is thus evidently clear that as per the new provisions laid down by CPWD, the petitioner company has been in loss for 4 consecutive financial years i.e. 2013-14 to 2016-17, hence has failed to fulfill the eligibility criteria.
22. The learned Senior Counsel for the Respondent No. 2 has next contended that the petitioner has not challenged the minutes of meeting of the Technical Tender Committee of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 82/172 Respondent No. 2 dated 13.12.2019, hence, the petitioner is estopped from raising any grievance. It is also submitted that there has been no violation of the principles of natural justice inasmuch as the representation filed by the petitioner, against the decision of the Technical Tender Committee contained in its minutes dated 13.12.2019, has been duly considered and thereafter, the Technical Tender Committee has held the petitioner to be non-responsive vide its decision contained in its minutes of meeting dated 03.01.2020. The learned Senior Counsel for the Respondent No. 2 has further submitted that in a writ jurisdiction under Article 226 of the Constitution of India, administrative decisions ought not to be interfered with merely on account of disagreement with the decision making process or decision of the authorities and since 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, a writ court should rely on Patna High Court CWJC No.208 of 2020 dt.11-08-2022 83/172 the understanding of the owner / employer of a project and appreciate the terms and conditions of the tender documents, but unless there is malafide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions, the decision-making process or the decision itself should not be interfered with. In this regard, the learned Senior Counsel for the Respondent No. 2 has relied on a judgment rendered by the Hon'ble Apex Court in the case of Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corpn. Ltd., reported in (2016) 16 SCC 818, paragraphs no. 11 to 15 whereof are reproduced herein below:-
"11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) [Central Coalfields Ltd. v. SLL- SML (Joint Venture Consortium), (2016) 8 SCC 622 : (2016) 4 SCC (Civ) 106 : (2016) 8 Scale 99] it was held by this Court, relying on a host of decisions that the decision-making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is Patna High Court CWJC No.208 of 2020 dt.11-08-2022 84/172 permissible only if the decision-making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision-making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us.
12. In Dwarkadas Marfatia and Sons v. Port of Bombay [Dwarkadas Marfatia and Sons v. Port of Bombay, (1989) 3 SCC 293] it was held that the constitutional courts are concerned with the decision-making process. Tata Cellular v. Union of India [Tata Cellular v. Union of India, (1994) 6 SCC 651] went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional courts can interfere if the decision is perverse. However, the constitutional courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. This was Patna High Court CWJC No.208 of 2020 dt.11-08-2022 85/172 confirmed in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] as mentioned in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622.
13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.
14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v.
International Airport Authority of India [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous -- they must be given meaning and their necessary significance. In this context, the use of the word "metro" in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 86/172
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."
23. The learned Senior Counsel for the Respondent No. 2 has also submitted that judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. It is thus submitted that certain principles have been laid down by the Hon'ble Apex Court with regard to inherent limitations in exercise of the power of the judicial review by the constitutional courts in the case of Tata Cellular Patna High Court CWJC No.208 of 2020 dt.11-08-2022 87/172 vs. Union of India, reported in (1994) 6 SCC 651, paragraphs no. 70, 74, 75 and 94 whereof are reproduced herein below:-
"70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial Patna High Court CWJC No.208 of 2020 dt.11-08-2022 88/172 review is made, but the decision-making process itself.
75. In Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141, 154] Lord Brightman said:
"Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made.
*** Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power."
In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms:
"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions Patna High Court CWJC No.208 of 2020 dt.11-08-2022 89/172 properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160)."
In R. v. Panel on Take-overs and Mergers, ex p Datafin plc [(1987) 1 All ER 564] , Sir John Donaldson, M.R. commented:
"An application for judicial review is not an appeal."
In Lonrho plc v. Secretary of State for Trade and Industry [(1989) 2 All ER 609] , Lord Keith said:
"Judicial review is a protection and not a weapon."
It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin, Re [(1983) 2 All ER 864], Lord Fraser observed that:
"Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made.... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer."
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 90/172
94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to
tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 91/172 the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-
administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose
heavy administrative burden on the
administration and lead to increased and unbudgeted expenditure."
Contentions of the Ld. Senior Counsel for the respondent No. 3 in Civil Writ Jurisdiction Case No. 208 of 2020
24. The learned counsel for the Respondent No. 3 (first case), Mr. Mrigank Mauli, assisted by Mr. Vankatesh Kriti, Advocate, has submitted that the tender evaluation committee of the Respondent No. 2 had met on 13.12.2019 and held the bid of the petitioner to be non-responsive while that of the Respondent No. 3 had been held to have Patna High Court CWJC No.208 of 2020 dt.11-08-2022 92/172 qualified against all the works for which it had applied. The learned counsel for the Respondent No. 3 has supported the reason set out in the minutes of meeting dated 13.12.2019 for declaring the petitioner to be non-responsive regarding the petitioner having submitted two different completion status pertaining to the construction of Kalpana Chawla Government Medical College, Karnal. It is also submitted that the petitioner does not fulfill the eligibility criteria under Clause 4.5(A)
(b)(i)(ii), Clause 4.5(D) and Clause 4.7, hence, the Respondent No. 3 had requested the Respondent No. 2 to consider this aspect of the matter and for that purpose, it had filed a representation dated 13.12.2019. Upon a query made by the Respondent No. 2, the Respondent No. 3 had filed a letter dated 31.12.2019, furnishing a detailed list of the ongoing projects of the petitioner company, which were not included by the petitioner while calculating the available bid capacity under Clause 4.7 of the NIT. It is stated that by concealing the list of ongoing works for the purposes of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 93/172 calculation of bid capacity, the petitioner has proportionately increased its bid capacity illegally. Thereafter, the meeting of the Technical Evaluation Committee was again conducted on 03.01.2020 to discuss and pass order on the objection/ clarification filed by the bidders on the aforesaid decision dated 13.12.2019, whereafter the Respondent No. 2, after consulting an independent Tax Consultant, had declared the petitioner to be non-responsive under Clause 4.5(D) stating that the petitioner had incurred losses in four financial years, which is more than two financial years during the immediate last seven consecutive financial years ending 31.03.2019. It is also stated that though the petitioner was required to submit the consolidated profit and loss financial statement under Clause 4.5(D) of the NIT but the petitioner company did not do so inasmuch as it had suffered losses in the financial years 2013-14 to 2016-17, which is more than two financial years in the last seven financial years i.e. contrary to the requirement under Clause 4.5(D) of the NIT. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 94/172 Reference has also been made to Section 129(3) of the Companies Act, 2013, which mandates preparation of consolidated financial statement of the company where there is one or more subsidiaries / associated companies. It is next stated that the petitioner company has four wholly owned subsidiaries company and is also having its associate company, therefore, the petitioner was / is mandatorily required to comply with the Accounting Standard-110 and ought to have submitted the consolidated financial statement as per the companies (Indian Accounting Standard) Rules, 2015, as far as presentation and preparation of consolidated financial statements are concerned. Reference has also been made to the circular issued by the Central Public Works Department dated 10.1.2020, which requires a bidder to submit both standalone and consolidated financial statements and the same is applicable and valid for all tenders, which have been invited but not finalized.
25. The learned counsel for the Respondent No. 3 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 95/172 has also raised the issue regarding grounds available for the purposes of judicial review and matters relating to award of contracts. It is contended that modern trend points to judicial restraint in administrative action inasmuch as the Court is concerned primarily, as to whether there has been any infirmity in the decision making process since the Court does not have the expertise to correct the administrative action and moreover, quashing of the administrative decisions may lead to imposition of heavy administrative burden on the administration and may also lead to increase in unbudgeted expenditure. It is also submitted that a writ court is not required to interfere with the decision making process in cases where the process adopted or decision made by the authority is not mala fide or not intended to favor someone or is not arbitrary and irrational. In this regard, the learned counsel for the Respondent No. 3 has referred to a judgment rendered by the Hon'ble Apex Court in the case of Jagdish Mandal vs. State of Orissa, reported in (2007) 14 SCC Patna High Court CWJC No.208 of 2020 dt.11-08-2022 96/172 517, paragraph nos. 22 whereof is reproduced herein below:-
"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 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 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 97/172 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. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 98/172 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."
26. The learned counsel for the Respondent No. 3 has also argued regarding the requisites for the purposes of testing the issue of malafide and the issue of irrationality. It is stated that interference in the decision making process is not called for only on account of error in assessment, procedural aberration and prejudice to a tenderer so long as the decision relating to award of contract is bona fide and in public interest. It is submitted that a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional court to interfere. Reference in this connection has been made to a judgment rendered in the case of Silppi Constructions Contractors vs. Union of India, reported in (2020) 16 SCC 489. The learned counsel for the Respondent No. 3 has also referred Patna High Court CWJC No.208 of 2020 dt.11-08-2022 99/172 to a Judgment rendered by the Hon'ble Apex Court in the case of Bharat Coking Coal Ltd. & Others vs. AMR Dev Prabha & Others, reported in (2020) 16 SCC 759, with regard to the well-settled law that before a constitutional court interferes with the decision making process or the decision itself, it should come to a conclusion that such decision / decision making process has been attended with malafides, intention to favour someone, arbitrariness, irrationality or perversity.
27. The learned counsel for the Respondent No. 3 has further contended that the petitioner has failed to challenge the original decision of the Technical Tender Committee of the Respondent No. 2 dated 13.12.2019 and has only challenged the consequential order dated 3.1.2020, hence, on this ground alone, the present writ petition is fit to be dismissed. It is stated that the order dated 13.12.2019 ended with inviting objections to the decisions of the Technical Tender Committee and the same was directed to be placed again before Patna High Court CWJC No.208 of 2020 dt.11-08-2022 100/172 the Technical Tender Committee for consideration of the objections. It said-" mij of.kZr fufonk ls lEcaf/kr fdlh izdkj ds vH;kosnu@vkifRr izkIr gksus ij iqu% rdfudh lfefr ds le{k yk;k tk;. It is thus apparent that what was being considered on 03.01.2020 were the "vH;kosnu@vkifRr"
on the decision of the Technical Tender Committee dated 13.12.2019 and not the entire tender once again. This is further apparent from the opening lines of the minutes of meeting of the Technical Tender Committee dated 3.1.2020. It states "fufonk lfefr dh cSBd fnukad 13.12.2019 esa dfri; fu.kZ; fy, x,".
This makes it clear that the orders passed in the meeting of Technical Tender Committee dated 13.12.2019 were not "recommendations" but "decision" [fu.kZ;]. Further, the meeting dated 3.1.2020 was only for considering the objections on the decisions arrived at in the meeting dated 13.12.2019 which included rejection of the bid of the petitioner for not fulfilling the condition stipulated in Clause 4.5(A)(b) and the Technical Tender Committee did not change its decision taken on 13.12.2019 vis-à-vis the petitioner and it Patna High Court CWJC No.208 of 2020 dt.11-08-2022 101/172 also found its bid to be additionally non-responsive on account of not fulfilling the condition stipulated in Clause 4.5D. Thus it was/ is imperative for the petitioner to have challenged the order dated 13.12.2019 and not only the consequential order dated 03.01.2020. There is also no merger of administrative order and in absence of challenge to the original order dated 13.12.2019, there can be no challenge to the consequential order dated 3.1.2020 and the writ application is fit to be dismissed for this reason alone.
28. It is next submitted by the learned counsel for the Respondent No. 3 that the entire argument of the petitioner is focused on the minutes of meeting dated 3.1.2020 and the additional ground of rejection of its bid i.e. being non-responsive to Clause 4.5(D) of the Instruction to Bidders. Nonetheless, the said argument is being made only with a view to sideline the issue relating to non- fulfillment of the condition prescribed in Clause 4.5(A)(b) of the Instruction to Bidders, which the petitioner has failed to fulfill and for which its bid Patna High Court CWJC No.208 of 2020 dt.11-08-2022 102/172 has been rejected by the minutes of meeting dated 13.12.2019, which has not been challenged by the petitioner till date. It is submitted that in compliance of Clause 4.5(A)(b)(i), the petitioner had furnished three certificates of completion i.e. one pertaining to completion certificate of AIIMS, Bhopal, the other relating to completion certificate of AIIMS, Rishikesh and the third relating to completion certificate of Kalpana Chawla Government Medical College, Karnal, Haryana. As per Clause 4.5(A)(b)(ii), the condition was that the bidder must have "satisfactory completion" in India as a prime contractor during the last seven years ending last day of the month previous to the month of date of tender i.e. 31 July, 2019 construction of:-
Three works of similar nature in India each costing not less than 40% (forty percent) of the estimated cost of this project.
"Or"
Two works of similar nature in India each costing not less than 60% (sixty percent) of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 103/172 the estimated cost of this project.
"Or"
One work of similar nature in India each costing not less than 80% (eighty percent) of the estimated cost of this project.
It is stated that for Clause 4.5(A)(b)(ii), petitioner furnished 7 certificates and none fulfilled the requirement of Clause 4.5(A)(b)(ii), inasmuch as 3 certificates were issued for works that were completed in the month of December, 2011, June, 2012 and July, 2011 thus were beyond the 7 year period preceding base date of 31.7.2019, whereas 2 of the projects for which certificate were issued did not fulfill the requirement of 40% of the contract value, while 2 certificates showed that the work was not of "similar nature" as the composite work of HVAC and plumbing, electrical was not part of the project. Thus, it is apparent that the petitioner did not fulfill the requirement of Clause 4.5(A)(b) and its bid was non-responsive to the clauses of the tender.
29. Now coming to the issue regarding fulfillment Patna High Court CWJC No.208 of 2020 dt.11-08-2022 104/172 of the requirement of Clause 4.5(D) of the Instruction to Bidders by the petitioner, the learned counsel for the Respondent No. 3 has submitted that once the technical evaluation committee invited objections from various persons on its decision dated 13.12.2019, the Respondent No. 3 had raised its objection on 13.12.2019 to the bid proposal of the petitioner stating that the Petitioner has several wholly owned subsidiaries and on a consolidated basis had suffered losses for the past 4 consecutive years i.e loss of Rs 1061 lakhs in the FY 2013-14, loss of Rs 2429 lakhs in the FY 2014-15, loss of Rs 6941 lakhs in the FY 2015-16 and loss of Rs. 4185 lakhs in the FY 2016- 17, however it had claimed no loss on the basis of standalone balance sheet, as such it did not fulfill the requirement of Clause 4.5D. It is contended that a stand-alone balance-sheet of the parent/ holding company will never give the right picture of the financial liabilities unless one looks at the consolidated balance-sheet. Even though the subsidiaries are separate legal entities from their Patna High Court CWJC No.208 of 2020 dt.11-08-2022 105/172 holding company yet the two need to be considered as single economic entity and consolidated balance sheet is the accounting relationship between the holding company and its subsidiaries which show the status of the entire business enterprise. Shares in subsidiary companies are held as assets on the books of the holding company and can be issued as a collateral to raise fund. It is also submitted that the new Companies Act, 2013 was introduced on the basis of the report of Dr. Jamshed J. Irani Committee. One of the major concerns of the Irani Committee was to bring about transparency in the accounting linkages between the Holding and its Subsidiary companies. The committee encountered siphoning of funds from one company to another including to and from subsidiaries and to control the misuse, it sought "adequate disclosure obligations as to utilization of the funds raised or loans and advances given by the company to another entity. Strict disclosure and compliance norms in respect of holding and subsidiary company were Patna High Court CWJC No.208 of 2020 dt.11-08-2022 106/172 prescribed. Mandatory Disclosure norms were also prescribed and failure to disclose the details of transactions between the Holding company and subsidiaries was recommended to be Visited with penalty. The committee noticed diversion of fund through subsidiaries and it was noticed by the committee that self regulation was not working and thus was of the opinion that necessary checks and balances were required to be put in place as a statutory mandate. The Committee recommended mandatory consolidation of financial statements of subsidiaries with those of holding Company.
30. It is next submitted that Companies (Accounting Standard) Rules, 2006 was Gazetted on 07/12/2006 by Notification GSR 739(E). AS-21 deals with procedure for preparing "Consolidated Financial Statement". The objective of the AS-21 is self-revealing inasmuch as these statements are intended to present financial information about a parent and its subsidiary(ies) as a single economic entity to show the economic resources controlled by the group. The argument of the petitioner that Patna High Court CWJC No.208 of 2020 dt.11-08-2022 107/172 JMC is a separate entity from its subsidy is an argument to skirt around the purpose of the clause 4.5D. There can be no quarrel with the proposition that Holding company is a separate legal entity from its Subsidiaries but when it comes to looking at the financial strength and economic resources at the disposal of a legal entity then the true mirror is the consolidated balance sheet. It is apparent that though the Petitioner is not in loss in any of the past seven years on a standalone basis but the moment the balance-sheet of the subsidiaries are consolidated with that of the Petitioner it is continuously in loss from 2013-14 to 2016-17. This shows the deep financial linkages between the Petitioner and its subsidiaries. It is submitted that the argument of the Petitioner that as there is no specific requirement of furnishing the Consolidated return, the tendering authority was under
obligation to look into stand-alone returns and not consolidated balance sheet is a facile argument.
Silence of the tender document does not mean that the tendering authority cannot look into Patna High Court CWJC No.208 of 2020 dt.11-08-2022 108/172 consolidated balance-sheet. Thus the doctrine of separate entity cannot be used to hoodwink the tendering authority into allotting a tender to an entity which is, admittedly, bleeding on account of subsidiaries and in the context of the purpose of Clause 4.5D of the tender document the relevant Balance-Sheet is the "Consolidated" Balance sheet and not standalone balance sheet. There is nothing wrong in the action of the Technical Tender Committee to look into the Consolidated Balance sheet especially when there is admission on the part of Petitioner that it has suffered losses on consolidated basis.
31. The learned counsel for the Respondent No. 3 has also submitted that the petitioner has withheld information about seven of its ongoing projects worth Rs. 7517 crores, which will definitely materially affect the bid capacity of the petitioner, hence, the petitioner is required to be disqualified on this ground alone as also on the ground of furnishing misleading and false information as per the mandate of Clause 4.8 of Instruction to Patna High Court CWJC No.208 of 2020 dt.11-08-2022 109/172 Bidders. It is submitted that the petitioner has admitted that it did withhold information and has explained that the same is bona fide and inadvertent mistake. Thus, it is submitted that since the petitioner has admitted supplying misleading statements, its bid has rightly been rejected vide the minutes of meeting dated 3.1.2020 under Clause 4.8 of the Instruction to Bidders.
32. The learned counsel for the Respondent No. 3 has also submitted that Clause 4.5(D) and 4.5(A)
(b) of the Instruction to Bidders are mandatory conditions, being essential terms of eligibility and there can no argument of their substantial compliance. The conditions have to be met in toto and strictly and there can be no relaxation of the terms of essential qualification. In this regard, the learned counsel for the Respondent no. 3 has referred to a judgment rendered by the Hon'ble Apex Court in case of Vidarbha Irrigation Development Corporation vs. Anoj Kumar Garwala, reported in 2019 SCC Online SC 89, Patna High Court CWJC No.208 of 2020 dt.11-08-2022 110/172 paragraphs no. 15 to 17 whereof are reproduced herein below:-
"15. The law on the subject is well settled. In Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd., (2016) 8 SCC 446, this Court held:
"14. The law is settled that an essential condition of a tender has to be strictly complied with. In Poddar Steel Corpn. v. Ganesh Engg. Works [Poddar Steel Corpn. v. Ganesh Engg.
Works, (1991) 3 SCC 273] this Court held as under: (SCC p. 276, para 6) "6. ... The requirements in a tender notice can be classified into two categories--those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases."
15. Similarly in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. [B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548] this Court held as under: (SCC pp. 571-72, para 66) "(i) if there are essential conditions, the same must be adhered to;
(ii) if there is no power of general relaxation, ordinarily the same shall Patna High Court CWJC No.208 of 2020 dt.11-08-2022 111/172 not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with; ..."
16. We also agree with the contention of Shri Raval that the writ jurisdiction cannot be utilised to make a fresh bargain between parties."
16. However, learned counsel appearing on behalf of the appellant strongly relied Patna High Court CWJC No.208 of 2020 dt.11-08-2022 112/172 upon Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, and paragraphs 14 and 15 in particular, which state:
"14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous -- they must be given meaning and their necessary significance. In this context, the use of the word "metro" in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.
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."
17. It is clear even on a reading of this Patna High Court CWJC No.208 of 2020 dt.11-08-2022 113/172 judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court."
Thus, it is submitted that the argument of the petitioner regarding substantially complete certificates of the AIIMS, Rishikesh, AIIMS Bhopal and that of Kalpana Chawla Medical Hospital, Karnal, is fit to be rejected inasmuch as any attempt to relax the conditions would imply reading such clauses into the tender document, which are not there. There cannot be any implied terms in a tender and the essential conditions have to be read strictly.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 114/172
33. Now coming to the next argument advanced by the petitioner regarding violation of principles of natural justice, the learned counsel for the Respondent No. 3 has submitted that the earlier concept that non-observance of natural justice was said to be prejudice in itself to the person affected, and proof of prejudice and independent proof of denial of natural justice, was held to be unnecessary, has undergone a complete change and the Hon'ble Apex Court has held that natural justice is a tool to rectify injustice, if any, caused to a party. Courts apply it where a party has actually been prejudiced, not where natural justice would be an empty formality i.e where a party does not dispute facts against it and is deemed to be borne by estoppels, acquiescence or waiver or where only one conclusion is possible, the court would not insist on futile exercise of natural justice. It has been held that it is for the court to assess the likelihood of prejudice. In this regard, the Ld. counsel has referred to a judgment rendered by the Hon'ble Apex Court in the case of State of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 115/172 U.P. vs. Sudhir Kumar Singh, reported in 2020 SCC Online SC 847, paragraphs no. 29 to 31, 33, 34, 35, 39(3), 39(4) to 39(5) whereof are reproduced herein below:-
"29. Equally, the prejudice that is caused, apart from natural justice itself being denied, cannot be said to be present in a case in which there are admitted facts. Thus, in K.L. Tripathi v. State Bank of India (1984) 1 SCC 43, the Court held:
"29. We are of the opinion that Mr. Garg is right that the rules of natural justice as we have set out hereinbefore implied an opportunity to the delinquent officer to give evidence in respect of the charges or to deny the charges against him. Secondly, he submitted that even if the rules had no statutory force and even if the party had bound himself by the contract, as he had accepted the Staff Rule, there cannot be any contract with a Statutory Corporation which is violative of the principles of natural justice in matters of domestic enquiry involving termination of service of an employee. We are in agreement with the basic submission of Mr. Garg in this respect, but we find that the relevant rules which we have set out hereinbefore have been complied with even if the rules are read that requirements of natural justice were implied in the said rules or even if such basic principles of natural justice were implied, there has been no violation of the principles of natural justice in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 116/172 respect of the order passed in this case. In respect of an order involving adverse or penal consequences against an officer or an employee of Statutory Corporations like the State Bank of India, there must be an investigation into the charges consistent with the requirements of the situation in accordance with the principles of natural justice as far as these were applicable to a particular situation. So whether a particular principle of natural justice has been violated or not has to be judged in the background of the nature of charges, the nature of the investigation conducted in the background of any statutory or relevant rules governing such enquiries. Here the infraction of the natural justice complained of was that he was not given an opportunity to rebut the materials gathered in his absence. As has been observed in On Justice by J.R. Lucas, the principles of natural justice basically, if we may say so, emanate from the actual phrase "audi alteram partem" which was first formulated by St. Augustine (De Duabus Animabus, XIV, 22 J.P. Migne, PL. 42,
110).
xxx xxx xxx
32. The basic concept is fair play in action administrative, judicial or quasi- judicial. The concept of fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute, right of cross-examination must inevitably form part of fair play in action but where there is no lis regarding the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 117/172 facts but certain explanation of the circumstances there is no requirement of cross-examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to a party aggrieved by an order, by absence of any formal opportunity of cross-
examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version or the credibility of the statement.
33. The party who does not want to controvert the veracity of the evidence from record or testimony gathered behind his back cannot expect to succeed in any subsequent demand that there was no opportunity of cross-
examination specially when it was not asked for and there was no dispute about the veracity of the statements. Where there is no dispute as to the facts, or the weight to be attached on disputed facts but only an explanation of the acts, absence of opportunity to cross-
examination does not create any prejudice in such cases."
(emphasis supplied)
31. In the five-Judge Bench decision in Managing Director, ECIL v. B. Karnakumar (1993) 4 SCC 727, this Court, after discussing the constitutional requirement of a report being furnished under Article 311(2), held thus:
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 118/172 "30. Hence the incidental questions raised above may be answered as follows:
xxx xxx xxx [v] The next question to be answered is what is the effect on the order of punishment when the report of the enquiry officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non-furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty Patna High Court CWJC No.208 of 2020 dt.11-08-2022 119/172 and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an "unnatural expansion of natural justice" which in itself is antithetical to justice.
31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court/Tribunal and give the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present.
The courts should avoid resorting to short cuts. Since it is the Courts/Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Court/Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment."
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 120/172 (emphasis supplied)
33. What is important to note is that it is the Court or Tribunal which must determine whether or not prejudice has been caused, and not the authority on an ex parte appraisal of the facts. This has been well-explained in a later judgment, namely Dharampal Satyapal Ltd. v. Dy. Comm. Of Central Excise, Gauhati (2015) 8 SCC 519, in which, after setting out a number of judgments, this Court concluded:
"38. But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straitjacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances. For example, the courts have held that it would be sufficient to allow a person to make a representation and oral hearing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only full-fledged oral hearing but even cross-examination of witnesses is treated as a necessary concomitant of the principles of natural justice. Likewise, in service matters relating to major punishment by way of disciplinary Patna High Court CWJC No.208 of 2020 dt.11-08-2022 121/172 action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post-decisional hearing is held to be permissible. Further, the courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on.
39. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasising that the principles of natural justice cannot be applied in straitjacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason-- perhaps because the evidence against the individual is thought to be utterly compelling--it is felt that a fair hearing "would make no difference"--meaning that a hearing would not change the ultimate conclusion reached by the decision-maker--then no legal duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in Malloch v. Aberdeen Corpn. [1971] 1 WLR 1578], who said that : (WLR p. 1595) "... A breach of procedure ... cannot give Patna High Court CWJC No.208 of 2020 dt.11-08-2022 122/172 [rise to] a remedy in the courts, unless behind it there is something of substance which has been lost by the failure. The court does not act in vain."
Relying on these comments, Brandon L.J. opined in Cinnamond v. British Airports Authority [[1980] 1 WLR 582] that : (WLR p. 593) "... no one can complain of not being given an opportunity to make representations if such an opportunity would have availed him nothing."
In such situations, fair procedures appear to serve no purpose since the "right" result can be secured without according such treatment to the individual.
xxx xxx xxx
45. Keeping in view the aforesaid principles in mind, even when we find that there is an infraction of principles of natural justice, we have to address a further question as to whether any purpose would be served in remitting the case to the authority to make fresh demand of amount recoverable, only after issuing notice to show cause to the appellant. In the facts of the present case, we find that such an exercise would be totally futile having regard to the law laid down by this Court in R.C. Tobacco [(2005) 7 SCC 725]."
(emphasis supplied)
34. In State Bank of Patiala v. S.K. Sharma (1996) 3 SCC 364, a Division Bench of this Court distinguished between "adequate Patna High Court CWJC No.208 of 2020 dt.11-08-2022 123/172 opportunity" & "no opportunity at all", & held that the "prejudice" exception operates more especially in the latter case. This judgment also speaks of procedural and substantive provisions of law which embody the principles of natural justice which, when infracted, must lead to prejudice being caused to the litigant in order to afford him relief............... xxx xxx xxx
35. In M.C. Mehta v. Union of India (1999) 6 SCC 237, the expression "admitted and indisputable facts" laid down in Jagmohan (supra), as also the interesting divergence of legal opinion on whether it is necessary to show "slight proof" or "real likelihood" of prejudice, or the fact that it is an "open and shut case", were all discussed in great detail as follows:
"16. Courts are not infrequently faced with a dilemma between breach of the rules of natural justice and the Court's discretion to refuse relief even though the rules of natural justice have been breached, on the ground that no real prejudice is caused to the affected party.
xxx xxx xxx
23. We do not propose to express any opinion on the correctness or otherwise of the "useless formality" theory and leave the matter for decision in an appropriate case, inasmuch as, in the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 124/172 case before us, "admitted and indisputable" facts show that grant of a writ will be in vain as pointed out by Chinnappa Reddy, J."
39. An analysis of the aforesaid judgments thus reveals:
(1) Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.
(2) Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest.
(3) No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-
challenge or non-denial or admission of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 125/172 facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice.
(4) In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person.
(5) The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-observance of natural justice."
34. It is next submitted by the Ld. Counsel for the respondent No. 3 that the petitioner has also not disputed and in fact has admitted the following facts:-
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 126/172
(i) That it has filed standalone balance sheet.
(ii)That it has suffered losses for 4 consecutive years on consolidated basis and is profitable on standalone basis only.
(iii) The certificates issued by AIIMS Bhopal;
AIIMS Rishikesh show "substantial Completion" and not full completion.
(iv) Two different certificates with different remarks for the same date have been issued by HCC regarding Kalpana Chawla Government Medical College.
(v) That petitioner has withheld information with regard to on going work worth Rs. 3203 crores [though the complaint was for withholding information of work worth Rs. 7517 crores]
(vi) There has been delay on the part of the petitioner in execution of projects in the past. Thus it is apparent that the petitioner is not challenging the veracity of the facts but is only seeking an opportunity to explain the facts as such the Petitioner cannot claim that it has been prejudiced. When facts are admitted, an enquiry would be an empty formality. Even the principle of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 127/172 estoppel will apply here, therefore, even after the furnishing of the report, since no different consequence would follow, it would be a pervasion of justice to permit an opportunity of hearing to the petitioner. It is only if the Court/ Tribunal finds that the furnishing of an opportunity of hearing would have made a difference to the result, then the order should be set aside. In the present case the only clause that allows an opportunity to the bidder, post opening of technical bids, is clause 22.4(ii) and that too postulates correction of "rectifiable defects". Under no other circumstances there is any other condition that permits a right to bidder to be heard. In this connection, the learned counsel for the Respondent No. 3 has referred to the following judgments rendered by the Hon'ble Apex Court:-
(i) Jagdish Mandal vs. State of Orissa And Others (2007) 14 SCC 517;
(ii) State of Gujarat & Ors. vs. Meghji Pethraj Shah Charitable Trust & Ors. (1994) 3 SCC 552;
Patna High Court CWJC No.208 of 2020 dt.11-08-2022 128/172
(iii) Assistant Excise Commissioner & Ors. vs. Issac Pater & Ors. (1994) 4 SCC 104;
(iv) Purvankara Projects Ltd vs. Hotel Venus International & Ors (2007) 10 SCC 33.
35. The learned counsel for the Respondent No. 3 has also submitted that it is a well-settled law that tenderer /bidder has no other right except the right to equality and fair treatment in matters of evaluation of competitive bids. In matters of administrative orders the claim to the rule of audi alteram partem is qualified. Further the test laid down for Judicial Review in tender matters, in so far as arbitrariness is concerned, is that the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached. Hence, it is for the Court to see if the decision arrived at by the authorities is such that no responsible authority acting reasonably would have arrived at. It is stated that the decision of the Technical Tender Committee does not involve either a penal, civil or stigmatic consequence, hence principles of natural justice Patna High Court CWJC No.208 of 2020 dt.11-08-2022 129/172 will not be attracted. Reference in this regard has been made to the following judgments rendered by the Hon'ble Apex Court:-
(i) J.R. Vohra vs. India Export House Pvt. Ltd. & Anr. Para 10 (1985) 1 SCC 712 para 10
(ii) Jagdish Rai Mongha vs. State of Punjab & Ors. AIR 1983 P&H 33 Paras 20 to 27 & 30
(iii) Andhra Steel Corporation Ltd. vs. A.P. State Electricity Board & Ors. paras no. 13, 14 & 15.
36. The learned counsel for the Respondent No. 3 has also submitted that in the present case, the following issues of public interest are involved:-
(i) Should work be given to a bidder with doubtful financial health and a company which has heavily invested in loss making subsidiaries to an extent that it is affecting its own balance sheet, which has the further consequence of delay in execution of work and inter alia leading to price escalation, in violation of Clause 4.5D.
(ii) Should work be given to someone, as a Patna High Court CWJC No.208 of 2020 dt.11-08-2022 130/172 matter of public policy, who has admittedly and deliberately tried to withhold information about seven of its ongoing projects worth Rs.
7517 crores, which will definitely materially affect the bid capacity of the petitioner under Clause 4.7.
(iii) should work be given to someone who has failed to complete even one single government hospital within time and has no credential to show except "substantially complete" certificates.
(iv) Not one certificate has been provided by the petitioner that fulfills the requirement of Clause 4.5(A)(b)(i) and Clause 4.5(A)(b)(ii). Thus, it is submitted that since the present case involves huge public interest, this Court is entitled to look into materials beyond what has been quoted in the impugned minutes of meeting dated 03.01.2020 of the Technical Tender Committee of the Respondent No. 2.
37. The learned counsel for the Respondent No. 3 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 131/172 has also relied on the judgments rendered by the Hon'ble Apex Court in the case of Afcon Infrastructures Ltd. vs. Nagpur Metro Rail Corporation Ltd. & Anrs., reported in (2016) 16 SCC 818 as also the one rendered in the case of Siemens Public Communication Networks (P) Ltd. vs. Union of India & Others, reported in (2008) 16 SCC 215, to submit that where two views are possible with regard to decision of the tender evaluation authority and no mala fide or arbitrariness is shown, the writ court ought not to interfere with the decision of the administrative authority in inviting the tender and interpretation given by it to a tender document, unless it is shown that the said understanding is marked by perversity or malafide. It is also submitted that the tender issuing authority is the best judge to appreciate and understand the requirement of their documents, as such, bidders expertise and technical capacity can be best judged by the experts. In this connection, reference has been made to the judgment rendered by the Hon'ble Patna High Court CWJC No.208 of 2020 dt.11-08-2022 132/172 Apex Court in the case of Galaxy Transport Agencies, Contactors, Traders, Transports and Suppliers vs. New J.K. Roadways, Fleet Owners and Transport Contractors and Others, reported in 2020 SCC Online SC 1035.
Thus, in nutshell, the learned counsel for the Respondent No. 3 has submitted that the writ court would not interfere only for the reason that a legal point has been made out or that the court is in disagreement with the decision of the authority. Interference is called for only if alleged malafide and arbitrariness is proved. Even then the courts should restrain itself from interfering unless it can be shown that a substantial or overwhelming public interest is affected. Further, it is stated that the petitioner has miserably failed to conclusively plead and prove the allegation of arbitrariness or legal malafide.
Contentions of the Ld. Senior Counsel for the respondent No. 3 in Civil Writ Jurisdiction Case No. 211 of 2020
38. The Ld. Senior Counsel for the Respondent Patna High Court CWJC No.208 of 2020 dt.11-08-2022 133/172 No. 3 (Larson & Turbo Ltd.) of the second Case, Sri Chitranjan Sinha, assisted by Sri Aditya Prasad, Advocate, has fully endorsed and adopted the views expressed and the arguments advanced by the learned Senior Advocate, Sri Lalit Kishore, Advocate General, appearing for the Respondent No. 2 as also by the learned counsel appearing for the Respondent No. 3 in the first case, Sri Mrigank Mauli, Sr. Advocate, however, has submitted that the writ courts should observe restraint on administrative action and it should only review the manner in which the decision has been taken and if the decision relating to award of contract is bonafide 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. In this regard, the Ld. Sr. Counsel for the Respondent No. 3 has referred to a judgment rendered by the Hon'ble Apex Court in the case of Consortium of Titagarh Firema Adler S.P.A.-Titagarh Wagons Ltd. vs. Nagpur Metro Rail Corpn. Ltd., (2017) Patna High Court CWJC No.208 of 2020 dt.11-08-2022 134/172 7 SCC 486, paragraphs no. 30 and 31 whereof are reproduced herein below:-
"30. Before we proceed to deal with the concept of single entity and the discretion used by the 1st respondent, we intend to deal with role of the court when the eligibility criteria is required to be scanned and perceived by the court. In Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272, the Court referred to Tata Cellular wherein certain principles, namely, the modern trend pointing to judicial restraint on administrative action; the role of the court is only to review the manner in which the decision has been taken; the lack of expertise on the part of the court to correct the administrative decision; the conferment of freedom of contract on the government which recognises a fair play in the joints as a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere, were laid down. It was also stated in the said case that the administrative decision must not only be tested by the application of Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] principle of reasonableness but also must be free from arbitrariness not Patna High Court CWJC No.208 of 2020 dt.11-08-2022 135/172 affected by bias or actuated by mala fides. The two-Judge Bench took note of the fact that in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, it has been held that, 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 decisions in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548 and Michigan Rubber (India) Ltd., (2012)
8 SCC 216 have been referred to. The Court quoted a passage from Afcons Infrastructure Ltd. [(2016) 16 SCC 818] wherein the principle that interpretation placed to appreciate the tender requirements and to interpret the documents by owner or employer unless mala fide or perverse in understanding or appreciation is reflected, the constitutional courts should not interfere. It has also been observed in the said case that 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 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 136/172 interpretation given. After referring to the said authority, it has been ruled thus:
"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 & sometimes third-party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise & 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 Patna High Court CWJC No.208 of 2020 dt.11-08-2022 137/172 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 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."
31. In T.N. Generation and Distribution Corpn. Ltd. v. CSEPDI--Trishe Consortium, (2017) 4 SCC 318, the Court, after referring to Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 and taking note of the complex fiscal evaluation and other aspects, held:
"36. ... At this juncture we are obliged to say that in a complex fiscal evaluation the Court has to apply the doctrine of restraint. Several aspects, clauses, contingencies, etc. have to be factored. These calculations are best left to experts and those who have knowledge and skills in the field. The financial computation involved, the capacity and efficiency of the bidder & the perception of feasibility of completion of the project have to be left to the wisdom of the financial experts and consultants. The Patna High Court CWJC No.208 of 2020 dt.11-08-2022 138/172 courts cannot really enter into the said realm in exercise of power of judicial review. We cannot sit in appeal over the financial consultant's assessment. Suffice it to say, it is neither ex facie erroneous nor can we perceive as flawed for being perverse or absurd."
Thus, it is the submission of the learned Senior Counsel for the Respondent No. 3 of the second case that the petitioner has failed to comply the eligibility conditions mentioned in Clause 4.5(A)(b) and 4.5(D) of the Instruction to Bidders and moreover, is required to be declared non-responsive on account of submissions of false and misleading information as per Clause 4.8 of the Instruction to Bidders, thus, it is submitted that the present writ petition is devoid of any merit, hence, is fit to be dismissed.
Rejoinder of the Ld. Counsel for the Petitioner
39. In reply, the learned counsel for the petitioner of the aforesaid two cases has submitted that the prayer (a) made in paragraph no. 1 of the writ petitions in question would show that the petitioner has prayed to declare that it complies Patna High Court CWJC No.208 of 2020 dt.11-08-2022 139/172 with the eligibility criteria mentioned in Clause 4.5(A) (b) of the Instruction to Bidders, hence, there is no need to challenge the minutes of meeting dated 13.12.2019 of the Technical Tender Committee of the Respondent No. 2. As far as the issue relating to consideration of the purported representations/ complaints of the private respondents is concerned, it is stated that there was no occasion for considering the same after conclusion of the meeting of the bid evaluation committee on 13.12.2019 and in fact, there is no stipulation in the entire NIT/ITB to the said effect. As regards, fulfilling the eligibility criteria stipulated in Clause 4.5(D) of the Instruction to Bidders is concerned, it has been submitted that the petitioner has not concealed or misrepresented any information and since it is a listed company; its consolidated financial statements are not only available on its website, but also on the record of the Ministry of Corporate Affairs. It is reiterated that losses of subsidiaries and / or associates companies are not losses of the holding company. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 140/172 As regards, compliance of Section 4.7 of the Instruction of Bidders is concerned, it is submitted that there is no whisper in the impugned minutes of meeting about non-providing of details of several ongoing projects and the same has clearly been alleged by way of an afterthought. It is submitted that it is a well-settled law that public orders, publicly made, in exercise of a statutory authority cannot be construed in light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind or what he intended to do. It is also submitted that the respondent No. 2 never bothered to seek any explanation from the petitioner in relation to the allegation made by the private respondents before arriving at a purported conclusion that the petitioner has not disclosed information as required under clause 4.7 of the NIT. It has also been submitted that in order to qualify the eligibility criterion prescribed in Clause 4.7 of the NIT, the petitioner's available bid capacity should be more than the total bid value, which the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 141/172 petitioner fulfills even if additional projects worth Rs. 4346 crores of ongoing projects are taken into consideration. The petitioner has furnished a list of existing commitments and ongoing works with details in support of eligibility criterion prescribed in Clause 4.7 of the NIT along with its bid documents. In terms of the said list the petitioner has disclosed existing commitments and ongoing works/ projects worth of Rs. 8560.95 crores and based thereon the available bid capacity was calculated and stated to be Rs. 26194.71 crores. It has been explained on behalf of the petitioner, without prejudice to its rights and contentions, that due to continuous extension of the NIT/bid and lack of proper communication between the head office officials of the petitioner and the East India officials who had filled the bid along with the said list, certain ongoing projects worth Rs. 3203 crores could not be included in the list of ongoing projects. It is submitted that non-inclusion of additional projects worth Rs. 3203 crores in no manner affects the qualification prescribed in Patna High Court CWJC No.208 of 2020 dt.11-08-2022 142/172 Clause 4.7 of the NIT, therefore, the said non- inclusion by no stretch of imagination can be construed to be any false or misleading information as stated in Clause 4.8 of the NIT.
40. The learned counsel for the petitioner has further submitted that the issue raised in the counter affidavit by the Respondent No. 2 with regard to purported delay in completion of other projects by the petitioner do not find mention in the impugned minutes of meeting of the Technical Tender Committee of the Respondent No. 2 dated 13.12.2019 and 03.01.2020 and the same has also not formed the basis of rejection of the technical bid of the petitioner, as such, this Hon'ble Court should not consider the said allegation. In this regard, it is submitted that while the construction of the projects for AIIMS, Bhopal was to be completed within a period of two years, the same was delayed for reasons not attributable to the petitioner and the said project stands satisfactorily completed which is evident from the virtual completion certificate dt. 16.10.2019. As regards Patna High Court CWJC No.208 of 2020 dt.11-08-2022 143/172 delay in completion of AIIMS, Rishikesh, project, it is submitted that while the construction was to be completed within a period of two years, the same was also delayed for reasons not attributable to the petitioner, nonetheless, the said project now stands satisfactorily completed. In any case, it is stated that the certificate dt. 16.11.2017 issued by the Superintending Engineer in respect of the works for AIIMS Bhopal and the certificate dated 31.12.2017 issued in respect of the works for AIIMS Rishikesh, clearly state that the said works and defect rectification is in progress. Without prejudice to the aforesaid, it is submitted that the purported delay in the execution of the aforesaid projects (AIIMS Bhopal and AIIMS Rishikesh) cannot form the basis of rejection of the bid of the petitioner, & it is clear that Respondent no. 2 is raising the said ground as an afterthought, in a blatant attempt to mislead this Hon'ble Court.
41. As regards the office memorandum dated 10.01.2020 issued by the CPWD, it has been submitted that the same has got no bearing on the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 144/172 matter in hand since the eligibility criteria of the CPWD works manual, wherein the aforesaid modification has been introduced is not applicable to the works under the NIT in the present matter and moreover, the Respondent No. 2 cannot retrospectively modify the terms and conditions of the NIT i.e. after the impugned rejection of the bid of the petitioner on 13.12.2019 / 03.01.2020.
42. Lastly, the Ld. counsel for the petitioner has submitted that the Court cannot look into subsequent materials brought on record by way of counter affidavit to support the decision already taken and thus has to confine itself to the facts and reasons given in the impugned order. Reference has been made to a judgment rendered by the Hon'ble Apex Court in the case of Mohinder Singh Gill vs. The Chief Election Commissioner, reported in (1978) 1 SCC 405 at page 417.
43. Thus, it is submitted that considering the facts and circumstances of the case, the impugned Patna High Court CWJC No.208 of 2020 dt.11-08-2022 145/172 decision of the Technical Tender Committee, as contained in its minutes of meeting dt. 13.12.2019 /3.1.2020, qua the petitioner, is bad in law as also on facts, hence is required to be set aside.
Determination
44. I have heard the learned counsel for the parties and perused the voluminous records of the aforesaid two writ petitions as also the various judgments / authorities cited and relied upon by the learned counsel for the parties. The petitioner of the aforesaid two cases, by way of the present writ petition, has sought a declaration to the effect that it qualifies the criteria laid down in Clause 4.5(A)(b) and Clause 4.5(D) of the instruction to bidders, contained in the notice inviting tender dated 10.06.2019 and consequently, has sought quashing of the minutes of meeting of the Technical Tender Committee of the Respondent No. 2 dated 03.01.2020 qua the petitioner herein whereby and whereunder the technical bids of the petitioner for construction of Government Medical Patna High Court CWJC No.208 of 2020 dt.11-08-2022 146/172 College and Hospital at Begusarai and Buxar, respectively have been rejected. As far as Clause 4.5 (A)(b) of the instruction to bidders, contained in the NIT dated 10.06.2019 is concerned, the same lays down the eligibility criteria required to be fulfilled by the bidder to the effect that it should have satisfactorily completed in India as a prime contractor during the last seven years ending the last day of the month previous to the month of date of tender i.e. 31.7.2019, construction of at least one hospital or composite hospital campus having College/ Hospital/ Residential Building, having total cost not less than 40% of the estimated value of the project put to tender i.e. Rs. 175.20 crores and should have also satisfactorily completed construction of three works of similar nature in India each costing not less than 40% of the estimated cost of the project in question or two works of similar nature in India each costing not less than 60% of the estimated cost of the project or one work of similar nature in India each costing not less than 80% of the estimated cost of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 147/172 project in question. In this regard, though the petitioner is stated to have submitted certificates of completion, issued by HSCC (India) Ltd., regarding the work done by the petitioner pertaining to construction of Hospital/OPD and other associated works of Kalpana Chawla Government Medical College at Karnal, Haryana, however, two certificates dated 27.06.2017 and 31.10.2018 were submitted and while the one dated 27.06.2017 had certified that the petitioner has substantially completed the work as on 20.01.2017, the other certificate dated 31.10.2018 has certified that the work has been completed on 20.01.2017, resulting in the Technical Tender Committee of the Respondent No. 2 finding an apparent dichotomy in between the said two certificates dated 27.06.2017 and 31.10.2018, leading to the bid of the petitioner being held to be non-responsive vide the minutes of meeting dated 13.12.2019 on the ground that the petitioner has failed to qualify the criteria laid down in Clause 4.5(A)(b) of the instruction to bidders. Patna High Court CWJC No.208 of 2020 dt.11-08-2022 148/172
45. The learned counsel for the petitioner has sought to explain the aforesaid aspect of the matter by submitting that the petitioner had filed a representation dated 18.12.2019, in response to the aforesaid observation of the Technical Tender Committee of the Respondent No. 2 dated 13.12.2019, clarifying that the work towards construction of KCGMC was completed by the petitioner before 20.01.2017 and the expression "substantially completed" used in the certificate dated 27.06.2017 was used since this certificate was issued during the pendency of the Defect Liability Period, even otherwise as per Clause 27 of the SCC of the HSCC Project, the certificate of final completion was to be issued only after expiry of the Defect Liability Period, which expired on 26.06.2018, hence, a certificate of final completion in terms of Clause 27(b) was issued on 31.10.2018, certifying that the project was completed on 20.1.2017.
46. As regards the aforesaid issue, this Court finds that benefit of doubt can be granted to the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 149/172 petitioner herein and it cannot be said that the petitioner had not completed the work of Kalpana Chawla Government Medical College at Karnal during the last seven years ending last day of the month previous to the month of the date of tender i.e. 31.7.2019 inasmuch as even the second certificate dated 31.10.2018, issued by the HSCC (India) Ltd., certifying that the petitioner has completed the said project on 20.1.2017 is prior to 31.07.2019. Thus, this Court is of the view that the decision of the Technical Tender Committee of the Respondent No. 2, as reflected from the minutes of meeting dated 13.12.2019 to hold the bid of the petitioner to be non-responsive, is not correct.
47. However, there is another aspect of the matter inasmuch as the second part of Clause 4.5(A)(b) requires a bidder to have satisfactorily completed construction of one/two/three works of similar nature in India each costing not less than 40%/60%/80% respectively of the estimated cost of the project and it appears from the records that the petitioner had furnished two more completion Patna High Court CWJC No.208 of 2020 dt.11-08-2022 150/172 certificates pertaining to AIIMS Bhopal and AIIMS Rishikesh, however, it is an admitted fact that both the said projects were not completed within time and were grossly delayed, which has in fact been sought to be explained by the petitioner before this Court, however, no cogent reasons have been furnished for the undue delay caused by the petitioner in completing the said projects. In fact, the Respondent No. 3 of the first case has though pointed out that for Clause 4.5(A)(b)(ii), the petitioner furnished 7 certificates but the fact is that none fulfilled the requirement of Clause 4.5(A)
(b)(ii), inasmuch as 3 certificates were issued for works that were completed in the month of December, 2011, June, 2012 and July, 2011, thus were beyond the 7 year period preceding base date of 31.07.2019, whereas 2 of the projects for which certificate were issued did not fulfill the requirement of 40% of the contract value, while 2 certificates showed that the work was not of "similar nature" as the composite work of HVAC and plumbing, electrical was not part of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 151/172 project. This aspect of the matter has not been seriously controverted by the petitioner, thus, it is apparent that the petitioner did not fulfill the requirement of Clause 4.5(A)(b), hence its bid was/is non-responsive. Thus, this Court is of the view that the petitioner having not qualified the eligibility condition/criteria prescribed in Clause 4.5(A)(b) of the instruction to bidders, contained in the NIT dated 10.06.2019, cannot be regarded to be a successful bidder, hence has to be held non- responsive, consequently, its technical bid is required to be rejected on this ground alone.
48. Now coming to the next issue regarding the Technical Tender Committee of the Respondent No. 2, having held that the petitioner does not qualify Clause 4.5(D) of the NIT, vide its minutes of meeting dated 03.01.2020, it is the contention of the Ld. Counsel for the petitioner that the alleged reasons for rejection of the bid of the petitioner are based not only on an incorrect appreciation of facts and applicable legal provisions, but are also manifestly arbitrary and unreasonable inasmuch as Patna High Court CWJC No.208 of 2020 dt.11-08-2022 152/172 there is no requirement under the NIT or in law, for a bidder to furnish consolidated financial statements and / or financial statements of its subsidiaries for the purpose of demonstrating eligibility to bid under the NIT and the only requirement is to provide standalone financial statement / balance-sheet, hence, it is the assertion of the Ld. Counsel for the petitioner that the petitioner has not concealed or misrepresented any information or provided any false / misleading information to the Respondent No. 2. It is also the submission of the Ld. Counsel for the petitioner that a plain reading of Clause 4.5(D) read with Clause 4.3(f) and other provisions of the NIT would show that the petitioner was required to furnish its standalone financial balance sheet to establish that it is not in losses in more than 2 years in the past 7 years, however, the said clauses, in no manner, require the petitioner to submit/furnish its consolidated balance sheet, hence invocation of Clause 4.8 is wholly illegal, misconceived and clearly smacks of malafide to oust the petitioner Patna High Court CWJC No.208 of 2020 dt.11-08-2022 153/172 with a view to ultimately favor the already declared technically qualified bidders. It has also been submitted that it is wrong on the part of the Respondent No. 2 to say that the petitioner has "incurred losses" during four consecutive financial years namely financial years 2013-14 to 2016-17, inasmuch as the same ignores the fact that the petitioner company is a different and distinct legal entity from its subsidiary companies, and the profits and/or losses of its subsidiaries cannot be conflated along with those of the petitioner for the purpose of evaluating eligibility to bid under the NIT.
49. This Court finds that Clause 4.5(D) of the NIT stipulates that a bidder should not have incurred any loss in more than two years during the immediate last seven consecutive financial years ending 31.03.2019. The issue for consideration, in this regard, is that while it is the contention of the petitioner that taking into account its standalone financial statement/ balance-sheet, it has not incurred any loss in the immediate last seven Patna High Court CWJC No.208 of 2020 dt.11-08-2022 154/172 consecutive financial years ending 31.03.2019, on the contrary it is the allegation of the Respondent No. 2 that a bare perusal of the consolidated financial statement of the petitioner company would show that it had incurred losses during four consecutive years out of the last seven years i.e. during FY 2013-2014, FY 2014-2015, FY 2015-2016 and FY 2016-2017, which has been suppressed by the petitioner. The respondent No.2 is stated to have sought opinion from an independent Chartered Accountant, whereupon it had opined as follows:- "with respect to analysis of consolidated financial status of JMC Projects (India) Ltd., Ahmedabad regarding its profitability, earning per share (EPS) and Tax implication should be considered on the basis of consolidated financial results and not standalone financial statement. As per AS-21 (Accounting Standard) consolidated financial result includes financial of subsidiary company, associate enterprises and joint venture of the company. It is mandatory as per MCA and SEBI guidelines and investment loss under Income Patna High Court CWJC No.208 of 2020 dt.11-08-2022 155/172 Tax Act". Thus the Ld. Sr. Counsel for the respondent No.2 has submitted that the petitioner company fails to fulfill the technical eligibility criteria as laid in Clause 4.5 (D) of the tender documents.
50. With respect to the aforesaid issue regarding qualifying the criteria laid down in Clause 4.5 (D) of the NIT, this Court finds that reference has been made by the learned counsel for the petitioner to Section 129 of the Companies Act, 2013, which also stipulates that all the listed and unlisted companies, having one or more subsidiaries, including associate companies and joint ventures must compulsorily prepare the consolidated financial statements and the said concept of Consolidated Financial Statement was brought with an objective of achieving the true and fair view of reporting the position of the company for the financial year, since the consolidated financial statements are generally considered as primary financial statements from an economic entity perspective, whereas the standalone financial Patna High Court CWJC No.208 of 2020 dt.11-08-2022 156/172 statement projects only the position of the company in its individual performance and does not provide the true and fair view to the shareholders about the overall performance of the company with its subsidiaries. In fact Accounting Standard-110 also provides that consolidated financial statement is required to be mandatorily compiled in preparation of financial statement and accounting policies. The petitioner is stated to be having 4 (four) 100% subsidiaries and has associates with 49.57 % holding, hence, in the case of holding company, the financial health can only be derived after consolidation of financial statements of the subsidiaries and associates. This Court also finds that the Technical Tender Committee of the respondent No. 2 had analyzed the standalone financial statements and consolidated financial statements of the petitioner, whereafter it was of the view that the standalone EPS was positive and EPS derived on the basis of consolidated financial statement was negative from the financial year 2013-14 to 2016-17. Thus, Patna High Court CWJC No.208 of 2020 dt.11-08-2022 157/172 this Court is of the view that the employer i.e the respondent No.2 in the present case, is duty bound to ensure that the bidder is sound from all corners, hence, if the Respondent No. 2 has considered the financial health of the petitioner company in totality along with its subsidiaries, in order to satisfy itself with regard to the right picture of the financial liabilities of the petitioner company, there is nothing wrong in it and in fact, the Respondent No. 2 has in the process found out that the petitioner company is in a bad shape on account of its subsidiaries, which poorly reflects on the financial health of the petitioner company, hence, the Technical Tender Committee has rightly held that the petitioner does not fulfill / qualify Clause 4.5(D) of the NIT dated 10.6.2019. Thus the decision of the Technical Tender Committee of the Respondent No. 2 to hold the petitioner guilty for submitting misleading / false information, in light of Clause 4.8 of the instruction to bidders, cannot be faulted with, consequently this Court finds that the bid of the petitioner has rightly been rejected Patna High Court CWJC No.208 of 2020 dt.11-08-2022 158/172 by the Technical Tender Committee of the Respondent No. 2 on this ground as well.
51. The reliance of the Ld. Counsel for the petitioner on the judgment rendered by the Hon'ble Apex Court in the case of Zoom Developers (P) Ltd. & Others (supra) is of no help to the petitioner inasmuch as paragraph no. 31 thereof also makes it obligatory on behalf of the holding company to annex to its balance-sheet, the balance-sheet and profit and loss account and other financial particulars of its subsidiary as per Section 212 of the Companies Act, 1956, which the petitioner company has failed to do, while submitting its bid. As far as reliance has been made on the judgment rendered by the Hon'ble Apex Court in the case of Vodafone International Holding B.V. (supra) is concerned, the same is also of no help to the petitioner inasmuch as there is no dispute to the proposition of law that the liability of a company to pay income tax is determined on the basis of its standalone financial statements alone, however, the concern Patna High Court CWJC No.208 of 2020 dt.11-08-2022 159/172 in the present case is about the financial health of the petitioner company, which can only be determined by considering the consolidated financial statements. As far as the judgment, rendered by the Hon'ble Apex Court in the case of Monarch Infrastructure (P) Ltd. (supra) is concerned, this Court finds that the law laid down in the said judgment is in fact against the petitioner inasmuch as the Hon'ble Apex Court has held that the authority calling the tenders is the best judge to decide whether the conditions, which can be prescribed, are better than what were prescribed earlier. This Court finds that in the present case, neither any tender condition has been modified nor amended, whereas on the contrary, the employer of the project in question i.e. the Respondent No. 2 has given its interpretation to the tender documents according to its understanding. In fact, the Hon'ble Apex Court in the case of Afcon Infrastructures Ltd. (supra) has clearly held that administrative decisions ought not to be interfered with merely on Patna High Court CWJC No.208 of 2020 dt.11-08-2022 160/172 account of disagreement with the decision making process or decision of the authorities and since 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, a writ court should rely on the understanding of the owner / employer of a project and appreciate the terms and conditions of the tender documents, but unless there is malafide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions, the decision-making process or the decision itself should not be interfered with.
52. The next issue raised by the petitioner is regarding the Technical Tender Committee having rejected the bid of the petitioner vide minutes of meeting dated 03.01.2020, on the basis of a purported enquiry stated to have been conducted by the Respondent No. 2, upon representations received from the rival bidders of the petitioner as well as based on a purported opinion obtained from a Chartered Accountant, none of which were Patna High Court CWJC No.208 of 2020 dt.11-08-2022 161/172 ever put to the petitioner during the process of evaluation of its bid, resulting in gross violation of the principles of natural justice. In this regard, this Court finds that firstly, there is no provision in the entire NIT including the instruction to bidders, providing for an opportunity of hearing to the bidder in question, before rejection of its bid and the only clause that allows an opportunity to the bidder, post opening of technical bids, is Clause 22.4 (ii) of the NIT and that too, postulates correction of "rectifiable defects" only. Thus, there is no prescription in the NIT that permits a right to the bidder to be heard. Secondly, no prejudice has been caused to the petitioner inasmuch as it has not disputed the factual allegations levelled against it, either by the rival bidders or by the respondent No.2, hence, insistence on futile exercise of natural justice would be an empty formality. Reference in this regard be had to a judgment rendered by the Hon'ble Apex Court in the case of Sudhir Kumar Singh (supra). This Court would also refer to the judgments rendered Patna High Court CWJC No.208 of 2020 dt.11-08-2022 162/172 by the Hon'ble Apex Court in the case of Jagdish Mandal (supra), Meghji Pethraj Shah Charitable Trust & Ors. (supra) and the one rendered in the case of Purvankara Projects Ltd. (supra). At this juncture, this Court would also gainfully refer to the well-settled law that tenderer/bidder has no other right except the right to equality and fair treatment in matters of evaluation of competitive bids. Further, the test laid down for Judicial Review in tender matters, in so far as arbitrariness is concerned, is that the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached. Hence, it is to be seen, as to whether the decision arrived at by the authorities is such that no responsible authority acting reasonably would have arrived at. In fact, the decision of the Technical Tender Committee does not involve either a penal, civil or stigmatic consequence, hence principles of natural justice will not be attracted. Reference in this regard is made to the judgments rendered by the Hon'ble Patna High Court CWJC No.208 of 2020 dt.11-08-2022 163/172 Apex Court in the case of J.R. Vohra (Supra), Jagdish Rai Mongha (Supra) and the one rendered in the case of Andhra Steel Corporation Ltd. (Supra). Consequently, this Court holds that there has been no violation of the principles of natural justice in the present case.
53. As regards reference made by the learned counsel for the petitioner to the judgment rendered by the Hon'ble Apex Court in the case of Mahabir Auto Stores & Others (supra), this Court finds that the same is clearly distinguishable in the facts and circumstances of the case inasmuch as the Hon'ble Apex Court was dealing with a case wherein the transaction between the parties were carrying on for nearly two decades and the Indian Oil Corporation had allegedly changed its policy and on that basis, had sought to bring an end to the dealings and transactions between the parties.
54. Moreover, the present case is not a case where the action of the Respondent No. 2 is not fair Patna High Court CWJC No.208 of 2020 dt.11-08-2022 164/172 or is arbitrary or is not judicially sound, hence, the decision making process of the Respondent No. 2 does not require any interference. This Court also finds that the decision making process of the Respondent No. 2 is neither mala fide nor is intended to favor anyone and the normal rules of the game, as provided for in the NIT dated 10.6.2019 have been strictly followed by the Respondent No. 2, thus, the decision of the Respondent No. 2, rejecting the technical bid of the petitioner, does not require any interference, especially in view of the well-settled law to the effect that the principles of judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision making process itself and further in light of the inherent limitations laid down by the Hon'ble Apex Court in exercise of the power of judicial review by the Constitutional Courts to the effect that judicial restraint should be maintained in administrative action, the Court should not sit as a Court of Patna High Court CWJC No.208 of 2020 dt.11-08-2022 165/172 appeal but should merely review the manner in which the decision was made since the Court does not have the expertise to correct the administrative decision and permitting the review of the administrative decision would be permitting, substituting its own decision, without the necessary expertise, which itself may be fallible and moreover, if the decision relating to award of contract is bona fide and is in public interest, Courts should not exercise power of judicial review and should not interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Reference in this connection be had to the judgment rendered by the Hon'ble Apex Court in the case of Consortium of Titagarh Firema Adler S.P.A.-Titagarh Wagons Ltd. (supra) and the one rendered in the case of Tata Cellular (supra). Reference be also had to the judgments rendered by the Hon'ble Apex Court in the case of Silppi Constructions Contractors (supra), Bharat Coking Coal Ltd. (supra), Vidarbha Irrigation Development Corporation Patna High Court CWJC No.208 of 2020 dt.11-08-2022 166/172 (supra) and the one rendered in the case of Siemens Public Communication Networks (P) Ltd. (supra).
55. It would be apt to refer to a recent judgment rendered by the Hon'ble Apex Court in the case of N.G. Projects Limited Vs. Vinod Kumar Jain & Ors., reported in 2022 SCC OnLine SC 336, paragraph Nos. 17, 23 and 25 to 27, whereof are reproduced herein below:-
"17. Therefore, the position of law with regard to the interpretation of terms of the contract is that the question as to whether a term of the contract is essential or not is to be viewed from the perspective of the employer and by the employer. Applying the aforesaid position of law to the present case, it has been the contention of respondent No. 1 that the format for bank guarantee was not followed strictly by the State and that the relaxation given was not uniform, in that respondent No. 1 was singled out. The said contention has found favour with the Courts below.
23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the Patna High Court CWJC No.208 of 2020 dt.11-08-2022 167/172 employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision- making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to Patna High Court CWJC No.208 of 2020 dt.11-08-2022 168/172 work.
25. In view thereof, we find that the action of the respondent in setting aside the letter of acceptance granted to the appellant suffers from manifest illegality and cannot be sustained. Consequently, the appeal is disposed of with a direction to the respondent State to allow the appellant to resume and complete the work by excluding the period spent in the stay of execution of the contract.
26. A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no- one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.
27. We also find that multiple layers of exercise of jurisdiction also delay the final adjudication challenging the grant of tender. Therefore, it would be open to the High Courts or the Hon'ble Chief Justice to entrust these petitions to a Division Bench of the High Court, which would avoid at least hearing by Patna High Court CWJC No.208 of 2020 dt.11-08-2022 169/172 one of the forums."
56. This Court is conscious of the later judgment dated 18.05.2022, rendered by the Hon'ble Apex Court in Civil Appeal No. 4140 of 2022 [Special Leave Petition (C) NO. 7150 of 2022], in the case of Jai Bholenath Construction Vs. The Chief Executive Officer, Zilla Parishad, Nanded & Ors., however, the ratio of the said case is not applicable in the present case inasmuch as in the said case, the Respondent No. 4 therein had been declared eligible in flagrant violation of principles of natural justice and all fairness in the process of determining the eligibility of the tenderers and the bid of the said Respondent No. 4 was accepted when at the time of opening of technical bids, the said respondent was disqualified, thus it was held that the manner in which the bid had been accepted, shows arbitrary exercise of power.
57. Now coming to the end, this Court finds that serious allegations have been levelled against the petitioner of having suppressed details regarding Patna High Court CWJC No.208 of 2020 dt.11-08-2022 170/172 existing commitments and ongoing works inasmuch as the Respondent No. 2, after receipt of the representation from the participating bidders, had thoroughly examined details of existing commitment and ongoing works, uploaded by the petitioner company on the website of Bombay Stock Exchange, and it was found that the petitioner company has itself declared the details of the projects awarded to it via press release but the same were not uploaded by the petitioner company in their tender documents submitted to the respondent No. 2, which is a mandatory criteria as per the provisions laid down in Clause 4.7 of the tender document, obviously with a deliberate intention to conceal its bid capacity. The respondent No. 2 has also alleged that details of several projects have not been furnished by the petitioner company, which are worth approximately Rs. 4346 crores. This aspect of the matter has not been seriously contested by the petitioner and in fact the petitioner has admitted that due to continuous extension of the NIT/bid and Patna High Court CWJC No.208 of 2020 dt.11-08-2022 171/172 lack of proper communication between the head office officials of the petitioner and the East India officials who had filled the bid along with the said list, certain ongoing projects worth Rs. 3203 crores could not be included in the list of ongoing projects. Therefore, this Court finds that the bid of the petitioner has rightly been rejected, in light of Clause 4.8 of the Instruction to Bidders, inasmuch as the petitioner company has provided false/ misleading information since it has not submitted the correct details of existing commitment and ongoing works.
58. Having regard to the facts and circumstances of the aforesaid two cases and for the reasons mentioned hereinabove, this Court finds that the petitioner has miserably failed to make out any case so as to warrant any interference in the decision of the Technical Tender Committee of the Respondent No. 2 contained in its minutes of meeting dated 13.12.2019 and 03.01.2020, qua the petitioner herein, hence, both the aforesaid Patna High Court CWJC No.208 of 2020 dt.11-08-2022 172/172 writ petitions stand dismissed, being devoid of any merit.
(Mohit Kumar Shah, J) Ajay/-
AFR/NAFR AFR CAV DATE 24.07.2021 Uploading Date 11.08.2022 Transmission Date NA