Bombay High Court
Ashok Leyland Limited vs Maharashtra State Road Transport ... on 28 June, 2024
Digitally signed
2024:BHC-OS:9463-DB
MULEY
by MULEY
SHUBHAM
PRAVINRAO
SHUBHAM Date:
PRAVINRAO 2024.07.01
10:46:13
+0530
1 WP(L)-27456-23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION LODGING NO.27456 OF 2023
Ashok Leyland Limited ]
A company having its office address at ]
Thane One, 11th Floor, Dil Complex, ]
Ghodbunder Road, Near Cinemax ]
Mall, Majiwada, Thane (West) - 400610 ]
and having its registered office ]
address at : No.1, Sardar Patel Road, ]
Guindy, Chennai - 600 032. ]..... Petitioner.
V/s.
1] Maharashtra State Road Transport ]
Corporation, a body corporate ]
constituted under Road Transport ]
Corporation Act, 1950 ]
Having its central office address at ]
Maharashtra Vahatuk Bhavan, Dr. ]
Anandrao Nair Marg, Mumbai Central ]
Mumbai - 400 008 ]
]
2] General Manager (ME) ]
Maharashtra State Road Transport ]
Corporation, Having its address at ]
Mechanical Engineering Department, ]
Dr. Anandrao Nair Marg, Mumbai ]
Central, Mumbai - 400 008 ]..... Respondents.
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Dr. Veerendra Tulzapurkar, Senior Advocate i/by Mr. Shailendra
S. Kanetkar for the Petitioner.
Mr. S. C. Naidu a/w Mr. Nitesh Bhutekar, Mr. Aniket Nangore and
Mr. Abhishek T. Ingale for the Respondents.
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CORAM : DEVENDRA KUMAR UPADHYAYA, CJ. &
ARIF S. DOCTOR, J.
Reserved on : 19th April 2024
Pronounced on : 28th June 2024
JUDGMENT (PER ARIF S. DOCTOR, J.)
1. The Petitioner has in the captioned Writ Petition sought the following reliefs, viz.
"a. Declare that email dated 30 th August 2023 (Exhibit "A"
hereto) and any actions, orders or steps consequential thereto are unconstitutional, ultra vires, non-est, illegal and bad in law;
b. Declare that letter dated 30th August 2023 bearing reference no. ST/ME/VEH/EMD/2692 (Exhibit "B" hereto) and any actions, orders or steps consequential thereto are unconstitutional, ultra vires, non-est, illegal and bad in law; c. Issue a writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order of direction calling for the record and proceedings relating to the passing of the email dated 30th August 2023 and letter dated 30th August 2023 bearing reference no. ST/ME/VEH/EMD/2692 and after examining the legality and propriety or otherwise thereof, be pleased to set aside and quash the same.
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d. Issue a writ of mandamus, or a writ in the nature of mandamus, or any other appropriate writ or order directing Respondents to cancel email dated 30th August 2023 and letter dated 30th August 2023 bearing reference no. ST/ME/VEH/EMD/2692 and reinstate the Petitioner in the Tender process and retain the earnest money deposit of the Petitioner;
e. Issue a writ of mandamus, or a writ in the nature of mandamus, or any other appropriate writ or order directing Respondents to reinstate the Petitioner with the clarified bid amount as quoted vide its letters dated 09 th March 2023 and 21st April 2023;"
Dr. Tulzapurkar Learned Senior Counsel appearing on behalf of the Petitioner however at the outset submitted that the Petitioner is confining itself to only prayer clause (b) and is not pressing for any of the other reliefs prayed for in view of events which have transpired subsequently.
2. Before adverting to the rival contentions, it is useful to set out the facts giving rise to the challenge in the present Writ Petition, which shorn of unnecessary details, are as follows:-
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i. On 29th November 2022, Respondent No. 1 through
Respondent No. 2 had floated an e-tender for the procurement of 2000 diesel chassis with a five-year comprehensive annual engine maintenance contract ("CAMC"). The tender floated was thus a comprehensive one since the same was for the supply of 2000 diesel chassis as also for CAMC. Thus independent bids had to be submitted by the bidders for the diesel chassis as also CAMC. Annexure 'J' to the said tender provided for manner in which the commercial bids were to be submitted. Clause 6 of Annexure 'J' is relevant since the same inter alia sets out the details of CAMC and reads thus;
6 Period of 5 years / 60 Months/ 1825 days from the date of registration of each
CAMC bus. Guaranteed Kilometers for each year
Year Days/Months Guaranteed kms
Specification - BDY-385/1- BDY-385/2-
11 Mtr
DIESEL
11 Mtr
DIESEL
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1st Year 365 days/12 100000 Kms 100000 Kms
months
2nd Year 365 days/12 98000 Kms 98000 Kms
months
3rd Year 365 days/12 96000 Kms 96000 Kms
months
4th Year 365 days/12 94000 Kms 94000 Kms
months
5th Year 365 days/12 92000 Kms 92000 Kms
months
If bus travels more than guaranteed kilometers in one year, than rate per kilometers as per following formula will be paid to chassis manufacturer. No deductions if actual kilometers will be less than guaranteed kilometers. Calculation of guaranteed Kilometers for one year will be counted after completion of 365 days/12 months. No cumulative calculation of kilometers for next year. Monthly progressive kilometers record of each bus verified and approved by divisional statistical officer of MSRTC will be considered for CAMC kilometers record.
Rate per Km for extra kilometers = Per year quoted rate / guaranteed kms as per above chart ii. Subsequently, pursuant to a pre bid meeting held on 3 rd January 2023, Respondent No. 2 issued a corrigendum on 17th January 2023 by which various clarifications and amendments to the said tender document were made. One of the amendments issued by way of the said corrigendum was in respect of clause 6 of Annexure J. The said amendment inter alia provided as follows viz.
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6 Period of 5 years/60 months/1825 days from the date of registration of each CAMC bus. Guaranteed Kilometers for each year. For convenience of billing CAMC period of all vehicles registered in a month will start from the 1st day of next month. e.g. If total 30 vehicles are registered in the month of October 2023 on various date till 30/10/2023 then CAMC period for all such vehicles will start from 1 st November 2023. However chassis manufacturer will maintain all vehicles from the date of registration;
Year Days/Months Guaranteed kms
1st Year 365 days/12 months 100000 Kms
2nd Year 365 days/12 months 98000 Kms
3rd Year 365 days/12 months 96000 Kms
4th Year 365 days/12 months 94000 Kms
5th Year 365 days/12 months 92000 Kms
Rate of CAMC per Kms = Rate fixed for one bus for that particular year in purchase order / guaranteed kms for that particular year mentioned in the above chart.
Monthly rate of CAMC = Rate fixed for one bus for that particular year in purchase order / 12 (i.e. Months in a year) Per km rate of CAMC for one year (365 days) will be stable irrespective of kms performed by the vehicle No deductions if actual kilometers will be less than guaranteed kilometers. Calculation of guaranteed Kilometers for one year will be counter after completion of 365 days/12 months of each bus. No cumulative calculation of kilometers for next year. Vehicle wise daily gross kilometers (Effective Kms + dead kms) is recorded in the vehicle master register maintained at depot. Initially this km data finalized by concern Depot Manager at depot level will be the base for preparation of monthly invoice. However divisional statistical officer will verify vehicle wise kms data and confirm gross kms of each vehicle in each month. The vehicle wise monthly kms data finalized by divisional statistical officer will be the final base data shubham 6 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 7 WP(L)-27456-23.doc for CAMC billing and necessary adjustment will be made in the next month bill accordingly.
iii. The Petitioner thereafter on 24 th January 2023 paid a sum of Rs.1,18,000/- towards tender fees and a sum of Rs.5 crore towards EMD. On 28th February 2023 submitted both its technical and commercial bids. The commercial bid required the bidders to submit independent bids/quotations in respect of the chassis and the CAMC. The Petitioner in its commercial bid in respect of the CAMC quoted an amount of Rs. 1.53 per kilometer and not an annual lumpsum amount.
iv. The bids were then opened on 9 th March 2023 at which time the Petitioner was found to be the lowest in terms of price quoted for the chassis as also the CAMC. On the opening of the commercial bids of the other two bidders the Petitioner become aware that the other two bidders had submitted their commercial bids for CAMC charges on a yearly lumpsum basis and not on a per kilometer basis.
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The Petitioner therefore vide a letter of the same date i.e. 9th March 2023 requested Respondent No. 2 to permit the Petitioner to also submit its bid/quotation for CAMC on an annual lumpsum basis by multiplying the amount of Rs. 1.53 quoted per kilometer into the total number of kilometers mentioned in Annexure 'J'. The Petitioner in the said letter inter alia set out as follows, viz.
"At the time of financial bid opening by MSRTC dated 09 March 2023, we noticed that other bidders have quoted their CAMC rates as lumpsum rates for every year basis guaranteed kms, while we have offered our CAMC rates for every year at Rs. Per KM Per chassis.
We interpreted BOQ to quote CAMC charges for every year as per KM rate in Rs. INR, as guaranteed KMS was not mentioned in BOQ table. Also as per clause 6 of Annexure "J" under corrigendum 2, it was mentioned that "Per km rate of CAMC for one year (365 days) will be stable irrespective of kms performed by the vehicle" and hence we quoted per KM rate in BoQ.
We request MSRTC to kindly note the same and our CAMC rates also needs to be converted to lumpsum yearly rates for final competitive rate assessment by MSRTC as shown in Table 1 below.
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We request MSRTC to kindly consider our submission for Financial bid assessment.
Table 1 : Our CAMC quoted rate in per KM converted to Lumpsum yearly rates CAMC Rates of Ashok As Quoted by us in Guaranteed Our CAMC Yearly lump sum Leyland quoted in Rs. Per Per KM kms rates km Converted to Yearly charges Basic Total Basic rate of Total amount rate of amount unit chassis incl. Taxes of unit incl. (Rs.) unit chassis chassis Taxes of (Rs.) (Rs.) unit chassis (Rs.) First Year CAMC charges 1.53 1.81 100000 kms 1,53,000.00 1,81,000.00 Second Year CAMC charges 1.53 1.81 98000 kms 1,49,940..00 1,77,380.00 Third Year CAMC charges 1.53 1.81 96000 kms 1,46,880.00 1,73,760.00 Fourth Year CAMC charges 1.53 1.80 94000 kms 1,43,820.00 1,70,140.00 Fifth Year CAMC charges 1.53 1.80 92000 kms 1,40,760.00 1,66,520.00 v. Respondent No. 2 however in response by a letter dated 12th April, 2023 did not accede to the Petitioner's request and inter alia called upon the Petitioner to confirm the rates quoted by the Petitioner in the BoQ submitted by the shubham 9 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 10 WP(L)-27456-23.doc Petitioner along with the Petitioner's commercial bid for CAMC.
vi. The Petitioner thereafter once again vide a letter dated 21 st April 2023 addressed to Respondent No.2 reiterated what was stated in the Petitioner's letter of 9 th March 2023. The Petitioner further clarified that the letter dated 9 th March 2023 did not in any manner seek to change the price quoted by the Petitioner but only sought to convert the same to an annual lumpsum amount by multiplying the amount of Rs. 1.53 per kilometer into the number of guaranteed kilometers provided for in the tender so as to convert the same into an annual lumpsum amount in the same manner that had been done by the other bidders and nothing more.
vii. Respondent No.2 thereafter vide a letter dated 18 th August 2023 inter alia stated that it was clear from the terms and conditions of the tender that the bidders were required to quote rates of CAMC based on per chassis per year basis shubham 10 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 11 WP(L)-27456-23.doc and not per chassis per kilometer basis and hence once gave the Petitioner a last opportunity to the to confirm the rates quoted by the Petitioner in the BoQ in respect of CAMC before 28th August 2023. Respondent No. 2 put the Petitioner to notice that failing to do so would render the EMD deposited by the Petitioner liable to be forfeited. viii. The Petitioner once again vide a letter dated 27 th August 2023 reiterated its stand taken in earlier letters and requested Respondent No.2 to grant a personal hearing to clarify the said issue. There was however no response to this letter and it was in this backdrop that Respondent No.2 issued an email dated 30th August 2023 to the Petitioner informing the Petitioner that the Petitioners bid for the subject tender had been rejected "on account of the non- acceptance of the prices quoted in the BOQ in the line of the terms and conditions of the tender" as also a letter of the same date i.e. 30th August 2023 informing the Petitioner that the EMD amount of Rs.5 crore of the shubham 11 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 12 WP(L)-27456-23.doc Petitioner had also been forfeited " for not honoring the terms and conditions of the tender".
ix. It is not in dispute that Respondent No. 1 thereafter on 4 th September 2023 cancelled the entire tender "for administrative reasons/issues" and thereafter issued a fresh tender on 21st November 2023. The fresh tender was for the procurement of 2200 buses instead of 2000 buses. It is further not in dispute that the Petitioner has infact participated in the fresh tender and has been declared as L-
1. Submissions of Dr. Tulzapurkar, on behalf of the Petitioner.
3. Dr. Tulzapurkar, Learned Senior Counsel submitted that the Respondents had in forfeiting the Petitioner's EMD acted in a totally arbitrary, illegal and malafide manner. He submitted that a plain reading of the said corrigendum made it clear that the rate in respect of the CAMC was to be on either a per kilometer basis or on a monthly basis. He submitted that it was shubham 12 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 13 WP(L)-27456-23.doc thus that the Petitioner submitted its commercial bid for CAMC on a per kilometer basis and not computed the same on an annual lumpsum basis as done by the other bidders. He submitted that it was ex facie absurd for the Respondents to accept that the Petitioner could have ever quoted an amount of Rs.1.53 as being CAMC per chassis on an annual lumpsum basis. He thus submitted that there could be no manner of doubt that the amount of Rs.1.53 quoted as CAMC charges was therefore clearly on the basis of the amount of Rs.1.53 per guaranteed kilometer and not Rs. 1.53 on an annual lumpsum basis.
4. Dr. Tulzapurkar then submitted that it was only on 9th March 2023 when the bids were opened that the Petitioner become aware that the other two bidders had submitted their respective commercial bids for CAMC on an annual lumpsum basis and not on a per kilometer basis. He submitted that it was thus the Petitioner requested Respondent No. 2 to permit the Petitioner to do the same in order to maintain parity amongst all bidders. He took pains to point out that the Petitioner was not in shubham 13 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 14 WP(L)-27456-23.doc any manner seeking to revise the amount of Rs. 1.53 per km quoted by the Petitioner but was merely seeking to convert the same to a composite annual lumpsum amount as had been done by the other bidders. He took pains to point out that even if the Petitioner were to compute the amount on an annual lumpsum amount or conversely if the CAMC charges quoted by the other two bidders were converted into a per kilometer basis, the Petitioner's bid would still be the lowest by far.
5. Dr. Tulzapurkar then submitted that the Petitioner- Company was a well-established and reputed company who were in the business of manufacturing commercial vehicles for more than 50 years. He pointed out that it was thus impossible for any reasonable bidder in the industry much less the Petitioner to bid an amount as low as Rs.1.53 as CAMC on a lumpsum annual basis or for that matter even for the Respondents to have construed the Petitioner's bid of Rs. 1.53 as being the annual lumpsum amount for CAMC. He submitted that these facts alone made manifest that the amount of Rs.1.53 indicated in the BOQ shubham 14 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 15 WP(L)-27456-23.doc could only have been on a per kilometer basis and not an annual lumpsum basis. He thus submitted that the Respondents' conduct in rejecting the Petitioner's bid and forfeiting the EMD amount without so much considering the request/representation sought for by the Petitioner was plainly arbitrary, unfair and in violation of Articles 14 and 19(1)(g) of the Constitution of India.
6. Dr. Tulzapurkar then submitted that the Respondents' action of forfeiting the EMD was also not in accordance with the terms of the tender. In support of his contention he invited our attention to clause 5.41 of the tender and pointed out that the same specifically provided for instances in which the EMD could be forfeited by Respondent No. 1. He invited our attention to 1 5.4) The Earnest Money Deposit may be forfeited:-
a. If the Tenderer withdraws its tender during the period of tender validity specified in the Tender Form. b. If Tenderer fails to accept the letter of intent / offer/ purchase order / tender conditions for Rate Contract within the specified time limit.
c. If tenderer do not submit contract agreement, Security deposit as per condition mentioned in tender document.
d. If any other conditions do not fulfill which are mentioned in tender document. e. Withdraws or modify or impairs or derogates from the bid in any respect within the period of its bid f. If it comes to notice that, the information/documents furnished in its bid is false, misleading or forged. g. Fails to furnish requisite performance security/PBG within stipulated time required as per tender condition.
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the letter dated 30th August, 2023 and pointed out that the sole reason given therein by the Respondents for forfeiting the EMD i.e. that the Petitioner had failed to honour the terms and conditions of the tender was not a ground under clause 5.4 on which the EMD could be forfeited by the Respondents.
7. Dr. Tulzapurkar then pointed out that clause 5.4 (b) which provided that the EMD could be forfeited if the tenderer failed to accept the letter of intent/offer/purchase order/tender conditions for rate contract within a specified time limit had to be read with the clause 9.12 of the tender document. He thus submitted that it was incumbent upon the Respondents to have notified the Petitioner in writing that the Petitioner's bid had been accepted which he submitted had not been done. He thus submitted that the Respondent No.1 (a) not having issued any letter of intent/offer/purchase order to the Petitioner and (b) not having notified the award of tender in favour of the Petitioner could not be heard to say that a contract had been entered into
2 9.1) Notification of Award:- MSRTC will notify the successful Bidder in writing, that its tender has been accepted. MSRTC will request the Bidder to confirm his acceptance in writing. Also Successful Bidder will be requested to submit Security Deposit and Contract agreement. The notification of award will constitute the formation of the contract. No comunication will be made with other tenderers.
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and/or that the Petitioner had committed any breach or violation of the terms of the tender. He submitted that Respondent No. 1 had only declared Petitioner as L-1 and nothing more.
8. Dr. Tulzapurkar then reiterated that it was only on account of the fact that the Respondents had, absent any provision in the tender document and/or corrigendum permitted the other bidders to submit their bids for CAMC on an annual lump sum basis that the Petitioner had sought parity with the other bidders. He submitted it was only for this limited purpose that the Petitioner had made the various representations dated 9th March 2023, 21st April 2023 and 27th August 2023 to the Respondents and nothing more. He submitted that the Respondents had not only failed to consider the Petitioner's request/representations but had also not given any reason for not doing so. He thus submitted that the Respondents had acted in a completely arbitrary, unreasonable, and unfair manner in dealing with the Petitioner during the course of the tender process.
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9. Dr. Tulzapurkar thus submitted that the Respondents conduct in forfeiting the EMD was entirely malafide. He submitted that the only reason given by the Respondents for forfeiting the EMD was that the Petitioner had not honored the terms & conditions of tender and nothing else. He reiterated that this contention was totally false and untenable since (a) no letter of intent and/or notification of award had been made by Respondent No. 1 in favour of the Petitioner (b) the Petitioner had at no time failed to honour any of the terms of the tender and (c) the Respondents themselves had not acted as per the terms of the tender by not issuing any letter of intent/ offer/purchase order to the Petitioner, much less any notification of award (d) that there was thus no concluded contract between the Petitioner and Respondent No. 1 at any point of time. He reiterated that all that the Petitioner had sought was parity with the other bidders to submit their bids for CAMC on an annual lumpsum basis and nothing more. He submitted that Respondent No. 1 itself not having acted in accordance with the terms of the tender could therefore never have forfeited the Petitioner's EMD shubham 18 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 19 WP(L)-27456-23.doc in the manner which had been so done. He submitted that the Respondent No.1 in forfeiting the Petitioner's EMD had unjustly enriched itself and thus, this conduct of the Petitioner was clearly malafide.
10. Dr. Tulzapurkar then pointed out that the Respondents had cancelled the entire tender not for any fault and/or shortcoming on the part of the Petitioner but had done so admittedly for administrative reasons. He submitted that Respondent No. 1 had thereafter floated a fresh tender for the supply of 2200 chassis unlike the present tender which was for 2000 chassis. He thus submitted that in these circumstances the Respondents were wholly unjustified in forfeiting the Petitioner's EMD and unjustly enriching themselves. It was thus Dr. Tulzapurkar submitted that the Petitioner was entitled to return of the EMD which the Respondents had forfeited. Submissions of Mr. Naidu, on behalf of the Respondents.
11. Per contra, Mr. Naidu, submitted that the Respondents were entirely justified in both rejecting the Petitioner's bid as shubham 19 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 20 WP(L)-27456-23.doc also in forfeiting the Petitioner's EMD amount.
12. He first invited our attention to clause 3.73 of the tender document and pointed out that the same made adequately clear that it was incumbent upon the Petitioner to have read all the instructions and terms and conditions of the tender document carefully. He pointed out that by virtue of the said clause the Respondents had a right to reject the bids which were incomplete or contained false, misleading and invalid information. Basis this he submitted that the Petitioner having incorrectly construed and/or interpreted the tender document by submitted the CAMC bid on a per kilometer basis instead of on an annual lumpsum basis would necessarily have to bear the consequences for the same.
3 3.7) Rejection due to incomplete information/Waive any infirmity:-
The tenderers are requested to read all instructions, forms, terms and conditions, specifications and other information mentioned in the tender documents carefully. Failure to furnish all information required or submission of a tender not substantially responsive to the tendering documents in every respect will be at the Tenderer's risk and may result in rejection of tender. MSRTC reserves the right to waive any infirmity in any one or all tenders and to reject one or all tenders so received on due date with/without assigning any reasons for such rejection. In case of incomplete/false/misleading/invalid/partial submission of any document with the tender may not be entertained and tender may be rejected.
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13. He then invited our attention to clauses 6.8 4 and 6.105 of the tender document under the caption "preparation and submission of tender documents" and pointed out that the same made expressly clear that the commercial bid for CAMC was to be submitted on an annual lumpsum basis and not a per kilometer basis or monthly basis as suggested by the Petitioner.
From the said clauses, he pointed out that it was manifestly clear that (i) the prices for CAMC were to be quoted as per BOQ (item rate schedule) in the format given in Annexure-E to the tender document (ii) corrections on the prices were not to be allowed in normal course and (iii) in case of any correction in prices the same were to be approved by the Tender Committee. He took pains to point out that even the format at Annexure 'E' nowhere stated that the CAMC price was to be quoted on a per kilometer basis. He thus submitted that what the Petitioner was seeking was infact a correction to the bid submitted by the 4 6.8) Commercial tender : The prices shall be quoted as per BOQ (Item rate schedule) filled in all respect. BOQ - Item rate schedule duly filled in all respect. The format of BOQ is given at Annexure "E" for information only.
5 6.10) Corrections are not allowed. However, any correction OR over writing is required then authorized person should sign the figures and those only will be considered if approved by Tender Committee.
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Petitioner which could not be done / permitted at such an advanced stage of the tender.
14. Mr. Naidu then invited our attention to clause 6 in Annexure J of the tender as modified by the corrigendum and pointed out that the same merely contained the terms and conditions of CAMC, the duration of CAMC and specified that there would not be any deductions to the CAMC if the actual kilometers travelled were less than the number of guaranteed kilometers mentioned therein. He thus submitted that the said corrigendum did not in any manner provide the manner in which the commercial bid was to be submitted i.e. on a per kilometer basis or on an annual lumpsum basis. He pointed out that the reference to per kilometer calculations therein were in regard to the extra kilometers i.e. those done over and above the guaranteed kilometers and not those for which the commercial bid for CAMC was to be submitted.
15. Mr. Naidu then invited our attention to clause 8 of the tender document titled "AWARD OF CONTRACT CRITERIA" and shubham 22 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 23 WP(L)-27456-23.doc pointed out that as per clause 8.1 thereof, the bids of only those bidders who had accepted all the terms and conditions mentioned in the tender document would be accepted. He submitted that since the Petitioner had failed to confirm its bid submitted in respect of CAMC the question of issuing any letter of award did not arise. He further pointed out that both clause 8.76 and 8.97 of the tender document also made specific that the CAMC rate was to be "rate per year per chassis". He thus submitted that there was no manner of doubt that the tender document made clear that the commercial bid for CAMC was to be submitted on an annual basis and not on a per kilometer basis as suggested by the Petitioner. He further pointed out that as per clause 8.9 the final competitive rate would be decided as per the Respondents' formula stipulated in clause 8.9 and that the Respondents were not bound to select the lowest bidder. 6 8.7) MSRTC will purchase chassis with CAMC for 5 years. The basic CAMS rate per year per chassis to be quoted in BOQ/Commercial Tender. The terms and Conditions of CAMC is mentioned at Annexure `J". The business will be allotted to only those sources that are ready to match their rates (with CAMC) with L-1 rate. MSRTC will decide gradation on the Total rate (Net rate of Chassis + Basic Rate of CAMC per chassis for 5 years) as per formula mentioned at point number 8.9. 7 8.9) Final competitive rate will be decided by the following formula:-
Chassis Rate (including GST) + CAMC CHARGES (including GST) for maintenance of Engine and Exhaust system per chassis per year for 5 years.
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16. Mr. Naidu also invited our attention to clause 11 of the tender document to submit that all commercial offers of the bidders were to be unconditional fixed basic price which was exclusive of GST. He pointed out that no upward price revision in price was allowed during contractual period, and that the bidders were to submit their respective bids after taking into consideration that the delivery was to be anywhere in the State of Maharashtra. It was thus he submitted that the Petitioner's contention that the commercial bid for CAMC was to be quoted on a per kilometer basis was entirely untenable and without any merit.
17. Mr. Naidu then submitted that the tender document itself made explicit that the notification of award would itself constitute formation of a contract and hence the Petitioner after participation was bound to confirm the price of bid, only after which a notification of award could be issued to the Petitioner.
He submitted that since the Petitioner had failed to confirm the bid, no notification of award etc. could be issued to the shubham 24 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 25 WP(L)-27456-23.doc Petitioner. He further pointed out that the tender could only be awarded to the two lowest bidders in case L-2 was willing to match the bid of L-1. He submitted that in the facts of the present case no such occasion arose since the rate difference between L-1 and L-2 was of more than 20% and the tender document in clause 8.10 mandated that in case the rate difference between L-1 and L-2 was of more than 20%, all the business was to be alloted to L-1.
18. He then submitted that since the Petitioner had refused to confirm the price quoted in the commercial bid, the Respondents had resultantly suffered huge losses. It was thus that the Respondents on 4th September 2023 cancelled the tender in view of the rejection of the Petitioner's bid on account of the Petitioner's non-acceptance of the bid quoted by the Petitioner. He submitted that as a consequence of this the State of Maharashtra could not release the funds allocated to the said tender and the State of Maharashtra had been deprived of 2000 buses for which the tender had been issued.
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19. Mr. Naidu submitted that given the conduct of the Petitioner, Respondent No. 1 was well entitled in terms of clause 5.4 (b)8 of the tender document to forfeit the Petitioner's EMD since the Petitioner had refused to confirm the price bid submitted by the Petitioner. He submitted that considering the facts of the present case, the conduct of the Respondents in forfeiting the EMD amount could not be faulted with. He thus submitted that the Respondents' decision to forfeit the EMD was fair, just and reasonable and was not liable to be interfered with.
20. Mr. Naidu then without prejudice to the aforesaid contention submitted that the scope for interference by the Court in matters of public tender was extremely limited. In support of his contention he placed reliance on the judgments of the Hon'ble Supreme Court in Tata Cellular Vs. Union of India9, Silppi Construction Contractors Vs. Union of India 10, N. G. 8 If Tenderer fails to accept the letter of intent/offer/purchase order/tender conditions for Rate Contract within the specified time limit.
9 (1994) 6 SCC 651
10 (2020) 16 SCC 489
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Projects Ltd. Vs. Vinod Kumar Jain & Ors. 11 and Tata Motors Limited Vs. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) & ors.12 to submit that absent any clear case of arbitrariness, unreasonableness or malafides it was not open for the Court to interfere with the decision of statutory authority.
21. He additionally submitted that the issue in the present case was one regarding the interpretation of the terms of the tender. He pointed out that the Petitioner would thus have to lead evidence etc. to prove their contentions. He pointed out that clause 23 of the tender document specifically provided for a dispute resolution mechanism and therefore the Petitioner had an alternate remedy which the Petitioner had chosen not to avail of. In support of his contention that in such a fact scenario the Courts would be loath to interfere in matters of tender he placed reliance upon the judgment of the Hon'ble Supreme Court in the case of M.P. Power Management Company Ltd. Vs. SKY Power Southeast Solar India Private Ltd. & ) Ors. 13 from which he 11 (2022) 6 SCC 127 12 2023 SCC OnLine SC 671 13 (2023) 2 SCC 703 shubham 27 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 28 WP(L)-27456-23.doc pointed out that the Court in its jurisdiction under Article 226 of the Constitution should not interfere if an alternate remedy is available to the parties.
22. Basis the above he submitted that the Petition be dismissed.
23. After having heard Learned Counsel for the Parties and considered their rival contentions we find that the Petition deserves to be allowed for the following reasons, viz. A. First, the sole reason/justification given by the Respondents in the letter dated 30th August 2023 for forfeiting of the Petitioner's EMD was that the Petitioner had failed to honour the terms and conditions of the tender. The said letter however makes no specific mention of which terms and conditions the Petitioner had failed to honour. In this regard, we must note that a plain reading of clause 5.4(b) of the tender makes clear that, Respondent shubham 28 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 29 WP(L)-27456-23.doc No. 1 was required to first issue a letter of intent/offer/purchase order to the Petitioner which the Petitioner was required to accept in a time bound manner. We find that the Respondents instead of doing so have, pursuant to the representations made by the Petitioner, called upon the Petitioner to confirm the price quoted for CAMC after having already declared the Petitioner as L-1. The Respondents have also admittedly not issued a notification of award in favour of the Petitioner. Thus, clearly the Respondents have not themselves acted strictly as per the terms of the tender. Thus, in our view, in this fact scenario, it is entirely untenable for the Respondents to contend that the Petitioner had failed to adhere to the terms of the tender.
B. Second, it is an admitted position that the Respondents cancelled the tender "for administrative reasons" and then have floated a fresh tender the scope of which is broader than what was contemplated in the tender in question.
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Thus, clearly therefore, the cancellation of the tender could not be attributed and has infact not been attributed to the Petitioner's conduct in any manner. Given this, we find that it would be wholly inequitable for the Respondents in such a fact scenario to retain the EMD amount. We must also note here that clause 5.4 itself uses the word 'may' hence leaving it to the discretion of the Respondents as to whether to forfeit the EMD or not. It goes without saying that such discretion has to be exercised in a fair, transparent, and reasonable manner and not in an unfair, perverse, or obdurate manner. In the overall facts of the present case, we have no hesitation in holding that the Respondents have not exercised their discretion in fair and reasonable manner since the Respondents have (i) themselves not acted strictly as per the tender (ii) rather than rejecting the Petitioner's bid accepted the unreasonably low amount i.e. 1.53 Rs for CAMC and declared the Petitioner as L-1(ii) have not adequately dealt with the Petitioner's representations (iii) admittedly shubham 30 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 31 WP(L)-27456-23.doc cancelled the tender solely due to administrative reasons and (iv) floated a fresh tender larger in scope than the one in which the Petitioner was declared L-1 and (v) that it is not even the Respondent's case that the Petitioner had acted in a malafide manner by deliberately quoting a very low amount in respect of CAMC charges only to secure position of L-1 or being declared as L-1.
C. We are conscious of the very limited scope of judicial intervention in matters of public tender. However, it is well settled that where the tendering authority fails to act in a reasonable and fair manner and fails to exercise the same prudence as a common man in business as noted by the Hon'ble Supreme Court in the case of Tata Cellular (supra), the Courts can interfere under Article 226 of the Constitution of India. In the facts of the present case, we for the reasons already noted above, unhesitatingly find that the Respondents have not only failed to act in a fair and reasonable manner but have infact acted in an unfair, shubham 31 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 32 WP(L)-27456-23.doc unreasonable and obdurate manner. It is thus that we deem it fit to exercise our jurisdiction under Article 226 of the Constitution of India.
D. Also, the Respondents' contention of the Petitioner having an alternate remedy in terms of clause 23 of the tender document is an untenable one since, admittedly no notification of award was issued by the Respondents to the Petitioner. Even that apart, given that we have found that the Respondents have acted in an unfair, unreasonable and obdurate manner the question of the Petitioner being relegated to any alternate remedy does not arise. Hence, the judgment in the case of M.P. Power Management Company Ltd. (supra) relied upon by the Respondents would be of no assistance to the Respondents. E. We must also note that the Respondents' reliance on clause 3.7 of the tender is wholly misplaced. Clause 3.7 of the tender speaks of the consequences of (i) bidders not submitting all the requisite information or (ii) bidders shubham 32 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 33 WP(L)-27456-23.doc submitting incomplete/false and/or misleading information. This is admittedly not the case of the Respondents. It is clear that what the Petitioner had sought for by various letters was infact in the nature of a clarification and nothing more. The Petitioner had done so immediately on the day the bids were opened. Hence in our view, even assuming there was inadvertence on the part of the Petitioner in submitting its CAMC bid, to hold the Petitioner liable for forfeiture of the EMD on account of such inadvertence, in our view would, be unduly harsh and unreasonable and arbitrary especially when the Respondents have failed to deal with the Petitioners explanation on merits as also failed to hold that the Petitioner had acted in a malafide manner by submitting an unreasonably low bid.
24. It is thus, for the aforesaid reasons, that we allow the Petition in terms of prayer clause (b). We make it clear that the prayer clause (b) is allowed only to the extent for refund of EMD shubham 33 of 34 ::: Uploaded on - 01/07/2024 ::: Downloaded on - 15/07/2024 05:20:59 ::: 34 WP(L)-27456-23.doc to the Petitioner deposited with the Respondents and nothing more.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE)
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