Punjab-Haryana High Court
Utsav Safety Systems (P) Ltd vs State Of Punjab And Others on 11 September, 2012
Bench: Ajay Kumar Mittal, G.S. Sandhawalia
CWP No. 2186 of 2011 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP No. 2186 of 2011
DATE OF DECISION: September 11, 2012
Utsav Safety Systems (P) Ltd. .........PETITIONER(S)
VERSUS
State of Punjab and others ......RESPONDENT(S)
CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE G.S. SANDHAWALIA
Present: Mr. Sanjiv Bansal, Advocate,
with Mr. R. Kartikya, Advocate,
for the petitioner.
Ms. Rita Kohli, Addl. A.G., Punjab.
Mr. Chetan Mittal, Sr. Advocate,
with Mr. Aman Bahri, Advocate,
for respondents no. 3 to 5.
G.S. SANDHAWALIA, J.
1. The present writ petition has been filed under Articles 226 and
227 of the Constitution of India for issuance of a writ in the nature of
certiorari quashing the letter of intent issued in favour of respondent no. 3-
M/s. Agros Impex (I) Pvt. Ltd. vide reference no. 49139 dated 21.10.2011
(Annexure P-8) and also the concession agreement dated 21.11.2011
executed between the respondents, whereby the bid of respondent no. 3
for establishing and creating complete infrastructure to manufacture and
provide and fix High Security Registration Plates (hereinafter referred to as
HSRPs) has been accepted for the State of Punjab in spite of the fact that
the third respondent was not qualifying the eligibility condition provided in
the tender document and also for quashing the entire proceedings
culminating into the issuance of letter of intent and execution of concession
CWP No. 2186 of 2011 2
agreement in pursuance to the request for proposal (RFP) dated
15.09.2011 and for a direction to reconsider the entire matter before giving
effect to the letter of intent and concession agreement.
2. The pleaded case of the petitioner is that it is a company
incorporated under the Companies Act, 1956 having its registered office at
Delhi and the authorized representative has been duly authorized by the
Board of Directors to file the present writ petition. The State of Punjab had
issued a request for a proposal of HSRPs for motor vehicles on
15.09.2011 and bids were invited for selection of eligible manufacturers
and vendors having type approval and requisite manufacturing capacity to
produce, distribute and affix the HSRPs. The document was in two parts
and was to be accompanied with earnest money deposit of `25,00,000
which was to be opened on 07.10.2011. After opening the pre-qualification
bids and technical bids, the successful bidders were to give technical
presentations and financial bids were to be opened thereafter. The
petitioner responded to the RFP as the petitioner answered all the eligibility
and qualifying conditions contained in it. The petitioner was already
successful in obtaining similar tenders in the States of Madhya Pradesh,
Himachal Pradesh and Uttrakhand. In all, six bidders, including the
petitioner responded to the RFP and submitted their bids and meeting of
the Evaluation Committee took place on 07.10.2011 to open the bids
received by the respondent-State for implementation of HSRPs. In the said
meeting, the consultants namely M/s. Pricewaterhouse/Coopers engaged
by the State were asked to prepare a report for evaluation of the bids.
Thereafter, another meeting was held by the Bidder Evaluation Committee
on 17.10.2011 and the project consultant submitted the bid assessment
report and the Committee agreed with the findings contained in the report.
It was decided that field visits to verify the manufacturing facility of the
CWP No. 2186 of 2011 3
bidders be carried out expeditiously and simple testing also be undertaken
and that the financial bids be opened on 18.10.2011. The financial bids
were accordingly opened on 18.10.2011 and all the six bidders were held
to have qualified the stage of technical processing and project consultant
was directed to carry out due diligence of the financial bids and submit the
report.
3. Another meeting was held on 20.10.2011 wherein, the report
submitted by the project consultant with respect to the financial bids of the
bidders was considered and the Bid Evaluation Committee took note of the
two letters submitted by the All India Motor Vehicles Security Association
dated 15.10.2011 and 17.10.2011 and directed the project consultants to
offer their comments on the said Letter of the Association. The Committee,
in spite of the letter dated 17.10.2011, which was sent by the Association of
Registration Plates Manufacturers of India (Regd.), of which the petitioner
was also one of the members, rejected the allegations that proper
verification of the manufacturing capacity of M/s. Agros Impex (I) Pvt. Ltd.
which was the pre-requisite of the eligibility criteria, had not been done.
M/s. Agros Impex (I) Pvt. Ltd. had no manufacturing plant of the HSRPs
installed at the given address and the Transport Commissioner of
Jharkhand had recommended filing of criminal complaint against M/s.
Agros Impex (I) Pvt. Ltd. but in spite of that, Punjab Transport Department
was favouring M/s. Agros Impex (I) Pvt. Ltd. In spite of this, the
respondent-State had chosen to proceed ahead with the tendering process
without first enquiring into the allegations against M/s. Agros Impex (I) Pvt.
Ltd. It was accordingly pleaded that serious allegations were brushed
aside by the project consultants by stating that none of the bidders had
raised any complaint, therefore, there was no truth in the allegations
contained in the complaint made by the Association. Accordingly, the Bid
CWP No. 2186 of 2011 4
Evaluation Committee accepted the bid of the third respondent-M/s. Agros
Impex (I) Pvt. Ltd., which was found to be lowest and decided to accept the
offer and issued letter of intent in favour of the third respondent. The
minutes of the meeting were thereafter placed before the High Powered
Committee on 21.10.2011 which approved the proceedings of the Bid
Evaluation Committee. In pursuance of the said decision of the High
Powered Committee, the letter of intent was issued on 21.10.2011 to
respondent no. 3 and a formal agreement was to be signed within 15 days
of the issuance of letter of intent subject to the submission of performance
bank guarantee as per the request for proposal. It was accordingly
pleaded that as per the financial bids opened by the Bid Evaluation
Committee, the petitioner was L-2. The third respondent furnished the
bank guarantee dated 02.11.2011 vide letter dated 04.11.2011 for a sum of
`1 crore and thereafter, the State entered into a concession agreement
with respondents no. 3 to 5 on 21.11.2011. The petitioner made an
application under the Right to Information Act, 2005 on 28.11.2011 and
15.12.2011 and was supplied the information in pursuance of the
application.
4. The Association had again submitted a complaint on
05.01.2012 that an ineligible company had been favoured with award of the
contract without proper verification and submitted newspaper cuttings with
respect to the State of Jharkhand wherein, it had been reported that after
verification, it was found that the third respondent did not possess any
manufacturing plant at the given address and even a police report was
recommended to be filed against the third respondent. The Association
had also submitted a complaint to the State of Jharkhand, which had,
through its Transport Commissioner, directed an inquiry and a report had
been submitted on 12.12.2011 whereby, an inspection had been carried
CWP No. 2186 of 2011 5
out of the manufacturing unit of the third respondent on 09.12.2011 and it
was found that the manufacturing unit was owned and possessed by M/s.
Crane Bel International Private Ltd. and the sign board of respondent no. 3
had only been put up to misrepresent the facts. It was found that the third
respondent had not been issued the factory license and no
machinery/equipment had been installed for manufacturing of HSRPs and
there was no electricity connection in the name of the third respondent and
in fact the third respondent was not in existence. The State of Jharkhand
had also sought a clarification from the District Industries Centre,
Ghaziabad to verify the existence of the third respondent at the address of
the manufacturing unit and as per communication dated 26.12.2011, it was
mentioned that at E-07, Kavi Nagar, Industrial Area, Ghaziabad
(hereinafter referred to as the 'Ghaziabad Unit'), there is no industry in the
name of M/s. Agros Impex (I) Pvt. Ltd. and it was the premises of M/s.
Crane Bel International Private Ltd. The Transport Commissioner of the
State of Jharkand had also issued communication dated 02.12.2011
requiring the third respondent to respond to the facts stated in the inquiry
report and the third respondent had responded on 03.12.2011 admitting
that the factory license was still not issued to it and sincere efforts have
been made to get it at the earliest. The letter of intent issued by the State
of Punjab was made the basis for responding to the said communication.
The Punjab State had got conducted an inspection with reference to the
complaints made by the Association and the inspection report was
submitted on 13.01.2012 which revealed that there was no factory license
issued in favour of the third respondent and old, discarded machinery was
lying in the premises and the machinery relevant for manufacturing the
HSRPs was not available at the site. Upon receipt of the inspection report,
the State Transport Commissioner had forwarded the said inspection
CWP No. 2186 of 2011 6
report to the project consultants vide communication dated 20.01.2012 and
they had been asked to advise as to whether the inspection report was
contrary to the conditions of RFP document or violating any provision of
law.
5. Accordingly, it was pleaded that a fraud had been played by
the third respondent in securing the said tender in spite of being ineligible
for the same, the third respondent has been given a clean chit to proceed
further in the matter and to execute the contract and to start the supplies
and installation. It was also pleaded that the claim of the third respondent
was that it had set up a manufacturing plant in the year 2003 and was
ready in all respects for manufacturing HSRPs since June, 2003 and the
three partners of the joint venture possessed registration plate
manufacturing equipment and it had set up the manufacturing facility at
Ghaziabad unit but on inspection by the State, it was found there was no
valid factory license nor any running production line for the manufacturing
of HSRPs. Thus, a fraud had been played and the project consultants had
brushed aside the allegations on superfluous grounds to benefit
respondent no. 3 and the letter of intent was accordingly issued and the
execution of the concession agreement was vitiated. Had the State verified
the genuineness of the documents alongwith the tender form, the private
respondents would not have been allotted the tender on the ground of
misrepresentation and accordingly Clause 2.2.1 (29) was violated and
similarly Clause 2.24 of the RPF had been violated as the performance
bank guarantee was to be submitted within 15 days of the receipt of the
letter of intent dated 21.10.2011 but the concession agreement was
executed on 21.11.2011 beyond the period of 15 days.
6. The respondent-State, in its reply, took the plea that directions
have been issued in CWP No. 510 of 2005 titled Maninderjit Singh Bitta
CWP No. 2186 of 2011 7
vs. Union of India to follow Rule 50 of the Central Motor Vehicles Rules,
1989 (hereinafter referred as 'CMV Rules') and to introduce a new scheme
regulating issuance and fixation of HSRPs and a High Powered Committee
under the chairmanship of the Chief Secretary had been constituted for
selection of a suitable vendor for this project. A sub committee had been
formed under the chairmanship of Secretary, Transport for completion of
bid process and submit recommendations to the High Powered Committee.
In compliance with the invitation for bids dated 07.10.2011 by open
advertisement, six firms submitted their bids by 07.10.2011 and the
petitioner-firm was one of them. Respondent no. 3-M/s. Agros Impex (I)
Pvt. Ltd. was found to be the lowest bidder and the petitioner was not
selected as a successful bidder as the rates quoted by them were higher
then the selected bidder. In the meeting held on 17.10.2011, it was not
decided that field visits to verify the manufacturing facility of the bidders will
be carried out expeditiously and simple testing was also to be conducted.
That as per the documents submitted by respondent no. 3, the firm fulfilled
all the qualification criteria framed in the RPF document and the
representation dated 17.10.2011 made by the Association was discussed
under the chairmanship of Chief Secretary on 21.10.2011 and it was
decided in principle that the Association was misquoting the judgment of
the Apex Court and influencing the whole HSRP bid evaluation process in
Punjab and the Committee had decided to ignore these letters.
Respondent no. 3 was selected as suitable vendor as the rates quoted by
this firm were lowest than the others. It was admitted that the inspection of
the factory of respondent no. 3 was conducted and it was brought to the
notice of the department vide letter dated 05.01.2012 that HSRP Blank
manufacturing plant as mentioned in the bid document was commissioned
in the year 2003 but due to the fact that the project was not started due to
CWP No. 2186 of 2011 8
various controversies, the same was dismantled in the year 2005 to protect
it from dust, moisture etc. and the contract was given after the completion
of all necessary formalities as required under the RFP. Respondent no. 3
had set up an ultra modern State of the Art Technology which was
inspected on 02.01.2012 at Plot No. A-30, Block B1 Extension, Mohan Co-
operative Industrial Area, Mathura Road, New Delhi (hereinafter referred to
as "Mathura Road Unit"). The concession agreement was executed on
21.11.2011 beyond the period of 15 days as required under Clause 2.25 of
the RPF but since the bank guarantee of `1 crore was submitted by
respondent no. 3, the same was to be confirmed from the issuing branch of
Bank of India, Kanpur, (Uttar Pradesh) and the same could not be
confirmed within the stipulated period and due to this, the concession
agreement was executed on 21.11.2011 after the confirmation of the bank
guarantee by the concerned branch. As per clause 4.15, the actual
manufacturing of the HSRP should have been started within four months
and not within two months and accordingly, the said action was justified.
7. In the written statement filed by respondents no. 3 to 5, it was
pleaded that the petitioner having participated in the bidding process, could
not challenge the same since it had not been declared the successful
bidder. There was no illegality in the opening of the bid or the bidding
process and the petitioner had no locus standi to file the present petition
and it was liable to be dismissed with exemplary costs. The illegal
activities of the petitioner were highlighted and reference was made to its
involvement in criminal cases in various cities including Goa and Jaipur
and FIR No. 319 dated 17.09.2009 lodged at police station Margoa, Goa.
Reference was also made to letter dated 08.10.2009 written by the
Government of India, Ministry of Road Transport and Highways to the
Principal Secretaries/Secretaries/Commissioners (Transport) of all the
CWP No. 2186 of 2011 9
States/UTs highlighting illegal activities and modus operandi of the
petitioner-Company. The website of the petitioner was falsely claiming it to
be the only manufacturer of the number of plates in India as per
Government of India specifications. Therefore, the petitioner stood
disqualified in terms of the provisions of clause 2.2.5 of RFP and was guilty
of indulging in corrupt and fraudulent practices in terms of the provisions of
clause 2.26 of RFP. The letters of the Association dated 15.10.2011 and
17.10.2011 sent by the Association were not liable to be considered by the
State as the said Association was not eligible to participate in the bidding
process in the absence of 'Type Approval' in its name, which was the
criteria for being eligible in participating in the bid. It was alleged that the
Association had been primarily trying to stall the implementation of HSRP
projects in States and create confusion despite repeated orders of the
Hon'ble Apex Court. The respondents were successful bidders in the
States of Assam, Jharkhand and Gujarat for similar projects. Even for the
State of Bihar, they were successful bidders and the State Government
had illegally terminated the contract which was under challenge before the
Patna High Court which had declined to grant relief to the respondents and
the respondents were moving the Hon'ble Apex Court. The allegations
made by the petitioners had been found to be false by the State of
Jharkhand, who after being satisfied about their eligibility, had accepted the
commercial offer vide Letter of Intent dated 12.03.2012 and executed the
contract on 30.04.2012 for implementation of the HSRP project. The
location for the respondents' factory for purposes of HSRP was E-7, Kavi
Nagar Industrial Area, Ghaziabad which was a family owned factory
premises and housed the factory premises of Crane Bel also. M/s Crane
Bel International and M/s. Agros Impex (I) Pvt. Ltd. were owned by the
same family and the factory license was issued in the name of Crane Bel
CWP No. 2186 of 2011 10
and the CMD had also issued consent letter that the property of E-7, Kavi
Nagar Industrial Area, Ghaziabad was a family owned property and M/s.
Agros Impex (I) Pvt. Ltd. could set up a production line at the same
premises. Certificate of the common Directors among Crane Bel and M/s.
Agros Impex (I) Pvt. Ltd. was appended. Accordingly, it was pleaded that
respondent no. 3 also had a 'State of the Art' computerized manufacturing
plant at their second factory location at the Mathura Road Unit, New Delhi
and the factory license was confirmed and it was valid till 31.03.2013. The
production was in full swing and supplies had already commenced for the
States of Assam, Punjab and Jharkhand. Reference was also made to the
order of the Hon'ble Apex Court dated 08.12.2011 wherein, it has been
directed that no High Court should pass any interim orders cancelling or
staying the tender process in relation to the implementation of the scheme.
8. On merits, it was pleaded that the petitioner itself was
disqualified and guilty of corrupt and fraudulent practices under Clauses
2.2.5 and 2.26 of RPF. It was further pleaded that the Apex Court, in its
order dated 30.11.2004, had upheld the criteria laid down by the State and
it did not amount to laying down guidelines for evaluation criteria to select
vendor/manufacturer of HSRP and the State was competent to finalize the
evaluation criteria based on guidelines suggested by Ministry of Road
Transport and Highway, Government of India. The bidders had never
raised any reservation with respect to the qualifying criteria in their bid
documents and at this belated stage, such request for change could not be
entertained by the petitioner who had participated in the bidding process
and its members were trying to interfere in the bidding process. It was
pleaded that after obtaining the opinion of the consultants, the Committee
was unanimous in its views that the letters be ignored as the Association
was trying to influence the bid evaluation process and the joint venture of
CWP No. 2186 of 2011 11
respondents no. 3, 4 and 5 was accepted rightly, being the lowest. The
'Type Approval Certificate' dated 19.06.2003, issued by the Government of
India, Ministry of Defence, Vehicles Research & Development
Establishment, Ahmednagar showed that the manufacturing process was
at the Ghaziabad Unit which was extended for the new plant at the Mathura
Road Unit, New Delhi on 30.01.2012. That the Transport Secretary,
Jharkhand was informed that the Ghaziabad Unit was a family owned
organisation and had been authorized by Ashok Kumar Gupta to be used
for the manufacturing of HSRP since 2003. Accordingly, it was pleaded
that the Ghaziabad unit was always available with the respondents No.3 to
5 and the state of Art manufacturing facility was also available at Mathura
Road Unit, New Delhi. It was pleaded that the petitioner had kept silent
and instead had projected a dummy complainant in the form of association
to derail the entire bidding process with the sole intention that the bid of the
respondents No.3 to 5 be not accepted. The respondents No.3 to 5 having
been the lowest tenderers, had been rightly awarded the bid vide letter of
intent dated 21.10.2011 and concession agreement was entered into on
21.11.2011. The respondent has the capability of manufacturing from its
factory for the purpose of HSRPs at the Ghaziabad Unit which was a family
owned factory premises and also used as the premises of Crane Bel also.
The second manufacturing unit existed at the Mathura Road, New Delhi
and in spite of the allegations, the State of Jharkhand had issued letter of
intent in favour of the respondents. It was denied that any
recommendation was made to lodge a police case. Accordingly, it was
pleaded that the location of the respondents No.3 to 5 factory for the
purpose of HSRPs were both at Ghaziabad and also at the Mathura Road,
New Delhi. The respondents No.3 to 5 had, vide communication dated
05.01.2012, brought to the notice of the Department that the manufacturing
CWP No. 2186 of 2011 12
plant had been commissioned in the year 2003 at Ghaziabad but due to
litigation all over India, the said plant was dismantled in the year 2005 to
protect it from dust, moisture etc. as there was lack of business
opportunities in HSRPs and the plant was duly packed and stored to avoid
damage to the equipment and to preserve the same from dust, rust and
humidity. The respondents had commissioned the new plant after the
orders of the Apex Court and have since manufactured and delivered the
HSRPs to customers in Punjab, Assam and Jharkhand. The photographs
showing affixation of HSRPs on a car in Punjab was relied upon. It was
pleaded that once the production and delivery of HSRPs has been started,
all the allegations of the petitioner regarding manufacturing facility etc. are
bound to be rejected as per CMV Rules the respondents could not have
commenced production before getting confirmed orders from any State
Transport Authority. The factory license for the HSRPs can only be availed
upon commencement of production and after other statutory clearances
like environment/pollution control. In view of the two plants, the
respondents had sufficient capacity and capability to successfully
discharge its obligation under the tender. It was pleaded that no
manufacturing of HSRPs was permitted by the Government but the
petitioner has openly flouted all norms and sold HSRPs in Goa, Jaipur and
other cities and the respondents had implemented the project successfully
and started delivery of HSRPs in the Sate of Punjab, Assam and
Jharkhand. The department inspected the unit at Mathura Road on
02.01.2012 and the respondents No.3 to 5 possessed adequate
manufacturing facilities to deliver the tender. The Bid Evaluation
Committee had accepted the respondents' No.3 to 5 bid after following the
RPF guidelines and the present writ was only to harass them.
9. It was also pleaded that the entire implementation of scheme
CWP No. 2186 of 2011 13
laid down by the Hon'ble Apex Court and the respective State
Governments was sought to be jeopardized by the petitioner and no
special treatment was accorded by the Department to them. The
performance guarantee of `1 crore dated 02.11.2011 was submitted well
within 15 days of the issuance of letter of intent and the respondents No.3
to 5 executed the contract immediately on receiving the information from
respondent no. 1 and respondent no. 2 on the contract having been
received duly vetted from the Finance and Legal Departments of the
Government of Punjab.
10. The State of Punjab also filed two additional affidavits dated
31.05.2012 and 04.07.2012 in pursuance of the orders of this Court. It was
pleaded that a notification dated 27.04.2012 had been issued by the State
and it was specified that in case of new vehicles, the scheme shall come
into force on or before 30.04.2012 and the task of implementing the
scheme shall come into force on or before 15.06.2012. The department
had complied with the directions of the Apex Court given vide order dated
07.02.2012. As per information given by respondent no. 3, it had deployed
70 employees in the office of the District Transport Offices and Zone level
to undertake this function of affixation of HSRPs and the company had set
up five zones and the requisite machinery had been installed at these
zones. The owners of the vehicles had to apply to the registering authority
for the affixation of HSRPs and then the concerned registering authority
would direct the bidder company to affix such plate on the vehicle. The
concerned vehicle owner is to be given a time of four days to come and get
the registration plate affixed. The company had already supplied 1,260
HSRPs and out of these, 333 plates had been affixed on the vehicles. The
respondent-company had been issued show cause notice since work to
implement the scheme was very slow. Thereafter, as per affidavit dated
CWP No. 2186 of 2011 14
04.07.2012, it was specified that 29,222 HSRPs had been supplied and out
of these 5,019 plates had been affixed on vehicles and the District
Transport Officers had been directed to ensure that no new vehicle shall be
registered without affixing HSRPs. So far as the old vehicles were
concerned, the work relating to affixation of such registration plates had
also been started. The reply submitted by the respondent was considered
and it was found satisfactory and the company was directed to assure that
in future, it will continue all obligations as laid down in the concessionaire
agreement dated 21.11.2011. Respondent no. 3 also submitted an
affidavit dated 04.06.2012 wherein, it was deposed that the State Transport
Department had inspected the unit at Mathura road and the plant was fully
operational and functional and that the plant at Ghaziabad had been
proposed to be shifted to Gujarat as respondent no. 3 had won the bid for
HSRP for the State of Gujarat also and that the supply of HSRPs could
continue from the old Ghaziabad plant in case the State insisted. The plant
at New Delhi was a state of art manufacturing plant which was imported by
respondents from Netherland at a cost of approximately `5 crores. Vide
letter dated 21.01.2012, the State Commissioner had been informed that
except for the dependencies on the department and other authorities for
space at DTO's and integration of its software with VAHAN (State
Government Software through which respondent no. 3 is to receive
authorized requests for issuance of HSRP's), it was ready for
implementation of the project. Similarly, a letter was addressed on
21.03.2012 that various dependencies were yet to be resolved and
necessary action was required at the Transport Department's end for the
project to start. The factory at the Mathura Unit had a capacity to produce
about 60 blank plates per minute and respondents no. 3 to 5 have already
manufactured blank plates in excess of 2,80,000 in the said premises and
CWP No. 2186 of 2011 15
2,70,000 blank plates had been moved into the State of Punjab and the
first batch was moved on 15.04.2012 within the time limit fixed by the
Hon'ble Apex Court. Vide letter dated 20.04.2012, respondent no. 3 had
re-emphasized to the department of its 100% readiness to roll out the
project in the State at all the 5 Zonal DTO's and the duly authorized date
was made available by the State Transport Department only on 26.04.2012
and the duly embossed HSRPs had been made available for affixation on
30.04.2012 within four days as required under the agreement. Accordingly,
the show cause notice was wrongly issued by the State since the
respondents could not be blamed for the alleged delay as the project was
to be implemented with due vigilance of the State Government in issuing
valid authorizations and customers coming present with their vehicles for
affixation.
11. Counsel for the petitioner has raised threefold submissions
namely:-
(i) that the eligibility of the manufacturing process on a strength of
particular address was not there at the spot and a new
manufacturing unit was added subsequently;
(ii)that the letter of intent had provided that the agreement was to be
executed within 15 days but the same was done only a month later
and, therefore, the agreement should not have been entered into
with respondent no. 3.
(iii)The special purpose vehicle which was to be formed as a
consortium and there was no such consortium and the agreement
dated 21.11.2011 was with the State of Punjab by three separate
companies namely M/s. Agros Impex (I) Pvt. Ltd., M/s. Frost
International Ltd. and M/s. Trinity Engineering Services.
12. Regarding the first submission, it has been submitted that an
CWP No. 2186 of 2011 16
impression had been given that the manufacturing plant was in place since
the year 2003 as per Annexure VIII and that there was a joint venture
company of M/s. Agros Impex (I) Pvt. Ltd., M/s. Frost International Ltd. and
M/s. Trinity Engineering Services and the plant was ready in all respects for
manufacturing since 2003. As per Annexure IX, the address of the
manufacturing facility was Ghaziabad and a letter dated 05.10.2011 to the
State Transport Commissioner had been addressed that the joint venture
company would provide key personnel, the details of which were given in
the said letter. Accordingly, it is submitted that as per Clause 2.2.1 at Sr.
No. 3, the bidder was to be a manufacturer or a vendor dealing in the
HSRPs and registered as a company under the Companies Act, 1956 and
the manufacturing facility had to be inspected by the team constituted by
Department of Transport, Punjab and the work appraisal had to be
conducted at the location of the main unit. The area of the land,
production capacity details and make of unit installed and the date on
which it had became operational alongwith necessary approval and factory
licenses, details of technology being used and system characteristics, plan
for inter-connectivity and networking and turnover from registration plates
business had to be provided. As per clause 2.2.5, there was a
disqualification whereby, bidder was subject to disqualification in case any
misrepresentation and false statement had been made in the forms,
statements and attachments. Accordingly, reliance had been placed on
letter of the Managing Director of the District Industrial Centre, Ghaziabad
dated 26.09.2011 to contend that M/s. Crane Bel International Private Ltd.
was functioning from the plot at Ghaziabad and no unit as M/s. Agros
Impex (I) Pvt. Ltd. was functioning from the said premises. Similarly,
reference was also made to the letter dated 03.12.2011 addressed to the
Transport Commissioner, Jharkhand whereby, respondent no. 3 had
CWP No. 2186 of 2011 17
himself written that the manufacturing line was commissioned in the year
2003 for producing samples required for tenders, but due to lack of
business opportunities in HSRPs, mainly due to numerous litigations in
various High Courts and Supreme Court, the same was dismantled. That
as per the CMV Rules, the factory license for HSRPs could be availed only
upon commencement of production and after other statutory clearances
and production could not be commenced before getting a confirmed order
from any State Transport Authority and that the second plant was
commissioned only on 15.12.2011 at the Mathura Road, New Delhi.
Reference was also made to the inspection conducted on 12.01.2012 to
contend that M/s. Crane Bel International Private Ltd. had a license at the
plant at Ghaziabad and M/s. Agros Impex (I) Pvt. Ltd. did not have a valid
factory license to start a factory at the said address. Reference was
accordingly made to the State's reply where there was reference about the
plant at Mathura Road, New Delhi and the letter of respondent no. 3 itself
dated 05.01.2012 wherein, a request had been made for shifting the plant
to Gujarat and supply from the new plant at New Delhi. Similarly, reference
was made to the written statement of the private respondents in which, a
plea has been taken that there were common Directors among Crane Bel
and M/s. Agros Impex (I) Pvt. Ltd. which was a family concern as held out
by respondent no. 3 vide letter dated 02.03.2012. The provisional license
was valid only till 31.03.2012 and was for the Mathura Road unit. Reliance
was placed upon the show cause notice issued by the State of Jharkhand
for cancellation of the said contract. Reference was also made to
paragraph no. 23 of the writ petition to contend that the project consultants
had been requested to advise whether the inspection report was contrary
to the conditions of the RFP and that the State was silent on the issue as to
the inspection report of 02.01.2012 and it had not been placed on record.
CWP No. 2186 of 2011 18
Reference was also made to the non-performance of the contract with the
State of Bihar and the termination of the agreement by the State Transport
Commissioner. It was accordingly contended that as per Clause 17 of
Section 1 of RFP, "Prime Manufacturer" means individual/firm or the
corporate entity engaged in carrying out the manufacturing activity of the
High Security Registration Plates and since respondent no. 3 had supplied
false information, therefore, under Clause 1.5.6, the tender was liable for
rejection on the ground that there was no manufacturing unit at the
specified address. Accordingly, it was submitted that as per Clause 29 of
2.2.1, the pre-qualification condition was that every thing should have been
installed and the premises should have been inspected by the Department
of Transport, Punjab. That as per the Motor Vehicles (New High Security
Registration Places) Order, 2001, the manufacturer was to have a
certificate from the Central Road Research Institute or any other testing
agencies authorized by the Central Government under Rule 126 of the
CMV Rules and the claim of respondent no. 3 that it was a ready plant was
wrong and rather it had been misrepresenting that all the three members
had a ready plant.
13. On the other hand, counsel for the State referred to Clause IV
of 2.2.1 to point out that the requirement was Type Approval Certificate (in
short, the 'TAC') of the manufacturer from an agency authorized by the
Government of India to supply HSRPs. The said certificate was to be duly
attested by the Gazetted Officer and the original was to be produced at the
time of opening of the qualification bid and in case it was liable to be
renewed, the renewal certificate was to be made available at the time of
signing of the contract. The undertaking was to be given as per Annexure
IX specifying that it would deploy all equipments required for
implementation of the project as per technical specifications laid down and
CWP No. 2186 of 2011 19
a certificate of commencement by a qualified chartered engineer on which
the authorities may conduct technical verification and subsequent
verification as per bid terms. Similarly a declaration of capability was to be
given as per Annexure XI wherein, the address of the manufacturing facility
was to be given. The undertaking as per Annexure XIII was that the whole
system was to be operationalized in the entire state within 60 days from the
date of signing of the contract. The infrastructure was to be made
operational within the period stipulated in the RFP document. The
manufacturing facility was liable to be inspected by the team constituted by
the department and a work appraisal would be conducted as per the points
mentioned in the criteria. The delay by the successful bidder in the
performance of its contractual obligations was to be dealt with in
accordance with the time schedule as specified by the department as per
Clause 4.14 and as per Clause 4.15, the requisite infrastructure to be kept
ready and actual manufacturing of HSRPs was to be within two months of
the signing of the contract. The penalties could run upto Rs.5,000 per day
for 30 days, Rs.10,000 per day from 31 to 120 days and Rs.50,000 per day
from 121 days onwards. Reference was made to the minutes of the
Evaluation Committee meeting held on 07.10.2011 wherein, six bids had
been received and the original of TACs had been produced by all the
bidders except one and photocopies were retained as part of the meeting
and originals were returned back. The consultants were asked to prepare
the report for evaluation of bids and on 17.10.2011, another meeting was
held when the consultants submitted the bid assessment report for
implementation of the HSRPs scheme in Punjab and the Committee
discussed the findings of the report submitted by the project consultants
and agreed to the same. The Committee also decided in order to expedite
the selection of bidders to undertake sample testing and field visits during
CWP No. 2186 of 2011 20
the conformity of production certificate for the successful bidder and to
open the financial bid on 18.10.2011 in the office of the State Transport
Commissioner. Accordingly, on 18.10.2011, the consultants opened the
financial bids which was shared with all bidders and videographed and the
consultants were asked to carry out due diligence on the financial bids
submitted by the bidders and submit the report. That on 20.10.2011, the
Bid Evaluation Committee, took note of the two letters submitted by All
India Motor Vehicles Security Association dated 15.10.2011 and
14.10.2011 and the consultants were requested to give their comments on
these letters. The consultants had given the opinion that the Hon'ble Apex
Court had upheld the criteria in its order dated 30.11.2001 and it did not
amount to laying down of guidelines for evaluation criteria to select vendors
and manufacturers for HSRPs implementation in the country. It was also
opined that there was a cartel of manufacturers who were unsuccessful in
influencing the bidding process in Punjab. The price of HSRPs was
approximately 30% of the price in West Bengal and 60% of the price in the
neighbouring State of Haryana. None of the bidders had any reservations
with respect to the qualifying criteria mentioned in the RFP and accordingly
Committee was of the opinion that the letters should be ignored and
recommended accepting offers of M/s. Agros Impex (I) Pvt. Ltd.
(respondent no. 3) with a weighted price of Rs.128.53 per complete set of
HSRP and issuance of letter of intent to M/s. Agros Impex (I) Pvt. Ltd.
That on 21.10.2011, a meeting of a High Powered Committee was
held under the chairmanship of the Chief Secretary and the
committee decided to accept the offer of M/s. Agros Impex (I) Pvt.
Ltd. being the lowest L-1 bidder after taking into account the earlier
meetings held of the Bid Evaluation Committee.
14. That a letter dated 20.01.2012 had also been issued to
CWP No. 2186 of 2011 21
the consultants that an inspection report had been submitted by the
Deputy Controller (F & A) and Service Engineer and whether the
inspection note was contrary to the conditions of the RFP document
and violating any provision of law. A reference was made that the
concession agreement was executed on 21.11.2011, beyond the
period of 15 days only on the account that the bank guarantee worth
Rs.1,00,00,000 submitted by respondent no. 3 was to be confirmed
from the issuing branch of Bank of India, Kanpur, Uttar Pradesh and
the same was not confirmed within the stipulated period due to
which, there was a delay in the execution of the concession
agreement which was finally executed on 21.11.2011 after the
confirmation of the bank guarantee. A similar reference was made to
the letters of the Government of India sent by the Joint Secretary to
the Ministry of Road and Transport wherein, the allegations that the
petitioner-Utsav Safety Systems (P) Ltd. was manufacturing look
alike number plates of HSRP in the name of the Anti Theft
Registration Plates (ATRP) and the market was flooded with such
plates and an FIR had also been registered against Sh. Ravi Somani
of Utsav Safety Systems (P) Ltd. and its local dealer by the State
police of Goa. It was further submitted that any order passed by this
Court would be amounting to interference in the orders of the Apex
Court.
15. Similar submissions were made by respondent no. 3
wherein, it was also submitted that the requirement was of Type
Approval Certificate and a proper declaration had been given as
provided in Annexures IX, XI and XIII and there was a procedure
CWP No. 2186 of 2011 22
wherein in case of delay, penalties could be imposed. The affixation
of HSRPs were to be started in at least 75% of the registering
authorities within 4 months and the requisite infrastructure was to be
ready and actual manufacturing was to take place within two months
from the signing of the contract. Accordingly, it was submitted that
as per Appendix 30, details of which were not placed on record the
plant was commissioned on the date of the award and reference was
made to a letter dated 05.10.2011 wherein, it was mentioned that the
plant had been commissioned but the unit would be operational from
the date of order from any State authority. A reference was made to
the certificate dated 19.06.2003 issued to respondent no. 3 under the
provisions of the CMV Rules by the Vehicles Research and
Development Establishment, Ahmednager wherein, the address was
of the Kavi Nagar, Industrial Area, Ghaziabad and the said certificate
was further extended for the new plant at the Mathura Road, New
Delhi. Reference was also made to the minutes of the meeting held
on 20.10.2011 when the Committee gave an opinion that all the 6
bidders had not raised any reservation with respect to the qualifying
criteria mentioned in the RFP in their respective bid documents. It
was also pointed out that attempts were being made by the All India
Motor Vehicles Security Association to derail the awarding of the
contract. That the State of Jharkhand had issued a letter of intent for
implementation to the private respondent on 18.03.2012 and as per
the CMV Rules until there was a confirmed order from any State
Transport Authority, the manufacturers could not commence
production. Accordingly, reference was also made to letter dated
CWP No. 2186 of 2011 23
03.12.2011, which the private respondents have addressed to the
Transport Commissioner, State of Jharkhand. It was argued that
there was no requirement of any manufacturing plant at that point
and the necessity was only of the TAC. Reference was made to the
orders of the Hon'ble Apex Court wherein, time had been granted till
30.04.2012 to the State of Punjab to implement the scheme as way
of last and final opportunity in the order dated 08.12.2011. It was
further pointed out that vide order dated 07.02.2012, the Hon'ble
Apex Court had directed that the State of Punjab should complete
the implementation of the scheme till 30.03.2012 and in the larger
interest of national security, the matter had to be decided. It was
also mentioned that the representatives of the State had inspected
the factory on 02.01.2012 and the State Transport Commissioner
had been informed that another plant had been set up at the Mathura
Road whereas the plant at Ghaziabad had been dismantled in the
year 2005 to protect it from dust and moisture. The Motor Vehicles
(New High Security Registration Plates) Order, 2001 was referred to
show that Rule 4 thereof provided the requirement clause of TAC
and similarly the amendment to the Order of 2001 on 16.09.2011
was also referred to wherein, (xv) to (xix) had been added and it was
the manufacturer/supplier which had been discussed.
16. The matter has to be adjudicated upon keeping in mind
the above submissions made and taking into account the pleadings
and the history of the introduction of HSRP plates. It is to be noticed
that Rule 50 of the CMV Rules deals with the form and manner of
display of registration marks on the motor vehicles. The Motor
CWP No. 2186 of 2011 24
Vehicles (New High Security Registration Plates) Order, 2001, which
came into force on 22.08.2001 and was amended on 16.10.2001
whereby, a manufacturer or supplier of registration plates are to
comply with various specifications including having a certificate from
the Central Road Research Institute, New Delhi or any one of the
testing agencies authorized by the Central Government under Rule
126 of the CMV Rules. The registration plate is to conform to various
specifications in accordance with Rule 50 of the Central Motor
Vehicles Act, 1989 alongwith the Order of 2001 and the colour of the
plates was also specified. As per clause (v) of Clause 4 of the 2001
Order , the vendor or the manufacturer or the supplier for whom the
TAC had been issued by the test agencies, had also to be identified
by two alphabets on the registration plate itself. The said clauses
were challenged in Association of Registration Plates vs. Union
of India and others, AIR 2005 SC 1354. Some of the conditions
imposed in the notice inviting tenders by various State Governments
for supply of HSRPs were also the subject matter of challenge since
there was a condition that there should have been a minimum annual
turnover equivalent to Indian rupees of 50 crores in the immediately
preceding year and of a foreign collaboration. The ground for
challenge was that a monopoly was being created in favour of a
single private operator who would get business of `4,000-5,000
crores. Due to difference of opinion between the two Hon'ble Judges
regarding the terms and conditions of the notice inviting tender, the
matter was referred to a larger Bench. Eventually, on 30.11.2004,
the said rule and the condition imposed were upheld in Association
CWP No. 2186 of 2011 25
of Registration Plates's case Vs. Union of India AIR 2005 SC 469
by placing reliance upon Rule 50 of the CMV Rules and by holding
that the source of power lay with the Central Government. The
relevant portion of Rule 50 is reproduced as under:-
"Rule 50- Form and manner of display of
registration marks on the motor vehicles - (1) On or after
commencement of this rule, the registration mark referred
to in sub-section (6) of Section 41 shall be displayed both
at the front and at the rear of all motor vehicles clearly
and legibly in the form of security license plate of the
following specifications, namely: -
(i) the plate shall be a solid unit made of 1.0 mm
aluminium conforming to DIN 1745/DIN 1783 or
ISO 7591. Border edges and corners of the plate
shall be rounded to avoid injuries to the extent of
approx. 10 mm and the plates must have an
embossed border. The plate shall be suitable for hot
stamping and reflective sheet has to be guaranteed
for imperishable nature for minimum five years. The
fast colouring of legend and border to be done by
hot stamping;
(ii) the plate should bear the letters "IND" in blue
colour on the extreme left center of the plate. The
letter should be one fourth of the size of letters
mentioned in rule 51 and should be buried into the
foil or applied by hot stamping and should be
CWP No. 2186 of 2011 26
integral part of the plate;
(iii) each plate shall be protected against counterfeiting
by applying chromium-based hologram, applied by
hot stamping. Stickers and adhesive labels are not
permitted. The plate shall bear a permanent
consecutive identification number of minimum seven
digits, to be laser branded into a reflective sheeting
and hot stamping film shall bear a verification
inscription;
(iv) apart from the registration marks on the front and
rear, the third registration mark in the form of self
destructive type, chromium based hologram sticker
shall be affixed on the left hand top side of the
windshield of the vehicle. The registration details
such as registration number, registering authority,
etc., shall be printed on the sticker. The third
registration mark shall be issued by the registering
authorities/approved dealers of the license plates
manufacturer along with the regular registration
marks, and thereafter if such sticker is destroyed it
shall be issued by the license plate manufacturer or
his dealer;
(v) the plate shall be fastened with non-removable/non-
reusable snap lock fitting system on rear of the
vehicle at the premises of the registering authority;
The licence plates with all the above specifications
CWP No. 2186 of 2011 27
and the specified registrations for a vehicle shall be
issued by the registering authority or approved the
licence plates manufacturers or their dealers. The
Central Road Research Institute, New Delhi or any
of the agency authorized by the Central Government
shall approve the license plates manufacturers to the
above specification;
(vi) the size of the plate for different categories of
vehicles shall be as follows:-
For two and three wheelers 200 x 100 mm
For light motor vehicles and Passenger cars 340 x
200 mm/ 500 x 120 mm
For medium commercial vehicles Heavy commercial
vehicles and Trailer/combination 340 x 200 mm
Provided that this sub-rule shall apply to already
registered vehicles two years from the date of
commencement: Provided further that the size of the
registration plates for agricultural tractors shall be
as follows:-
Front - 285 x 45 mm
Rear - 200 x 100 mm 2 to 6. ......................................"
17. Thereafter, a writ petition was filed in the Hon'ble Apex
Court seeking directions that nothing concrete had been done
regarding the implementation of Rule 50. The Hon'ble Apex Court,
while noticing the notifications dated 22.08.2011 and 16.10.2001,
noticed that the intending manufacturer must obtain TAC from one of
CWP No. 2186 of 2011 28
the notified agencies and submit samples which are to be certified to
be technically fulfilling the requirements of the Rule. Accordingly,
directions were issued in Maninderjit Singh Bitta Vs. Union of India
(2008) 7 SCC 328 to the State Government to take necessary
decision within a period of six months keeping in view the directions
already issued. Thereafter, some of the State Governments had
modified the terms of the notice inviting tenders and done away with
the mandatory foreign collaborator. Writs were filed challenging the
said decision which were dismissed by the Single Bench of the
Calcutta High Court and affirmed by the Division Bench and similarly
by the Orissa High Court. The said issue was finally decided by the
Apex Court in Shimnit Utsch India Private Limited and another
vs. West Bengal Transport Infrastructure Development
Corporation Limited and others, (2010) 6 SCC 303. The Hon'ble
Apex Court, after taking into consideration the earlier judgments,
repelled the submissions made by the petitioners that merely by the
acquisition of TAC, would not mean that the manufacturers are
commercially competent to manufacture HSRPs. It was noticed that
the Government had the discretion to adopt a different policy and
change its policy and due to the lapse of time, there had been a
substantial increase in the number of persons having TAC from the
approved institutes who were eligible and, therefore, the Government
had the right to alter and modify the conditions in the notice inviting
tenders. It was accordingly held that by virtue of lapse of time, the
price in the HSRP had come down and it had never been laid down
as an absolute proposition that a manufacturer of HSRP must have
CWP No. 2186 of 2011 29
foreign experience and a particular financial capacity. Thereafter,
vide orders passed on 08.12.2011 in Maninderjit Singh Bitta' Vs.
Union of India (2012) 1 SCC 707, the Apex Court had directed that no
High Court should pass any order staying or cancelling the
implementation of the scheme. The observations regarding State of
Punjab were noted and it was ordered as under:-
"26. The State of Punjab has invited the bids,
financial evaluation has been done and bids were opened
on 18th October, 2011. No affidavit has been filed but it
has been stated that the process of awarding of the
contract shall be concluded by 15th January, 2012 and the
scheme shall be implemented in the entire State by 30th
April, 2012. Time, as prayed for, is granted by way of last
and final opportunity."
18. Certain other directions were also made and one of the
directions issued was that to ensure proper implementation, no High
Court would pass any interim orders regarding the tender process
pertaining to the said scheme. The relevant direction passed by the
Apex Court reads as under:-
"6. In the interest of justice and to ensure
proper implementation of the judgments and
directions of this Court, as contained in its various
orders, in regard to manufacturing and affixation
of the HSRP, it is imperative for this Court to
direct that it will be in the fitness of things and
even the judicial proprietary would demand that
CWP No. 2186 of 2011 30
no High Court should pass any interim orders
cancelling or staying the tender process in relation
to implementation of the scheme. While so
directing, we grant liberty to the parties to make a
mention before this Court after they have instituted
their petitions, if any, before the High Court and
interim orders have been declined in furtherance
to the observations aforemade."
19. Thereafter, in continuation of the earlier order, the said
directions, on 07.02.2012, were modified to the extent that High
Court had liberty to deal with the issues which were to be decided
expeditiously keeping in mind the larger interest of the national
security. The relevant paragraph reads as under:-
"21. All the files that had been summoned by this Court
for ensuring the complete implementation of the scheme
shall now revert back to the respective courts for their
disposal in accordance with law. Some of the learned
counsel appearing for the parties before us had argued
that because of certain directions passed by the Courts
concerned in these ongoing cases, the concerned States
may not be able to finally implement the scheme within the
time bound schedule. We request the concerned High
Courts to deal with such matters on priority keeping in
view the afore-stated directions and orders. We further
given liberty to the parties whose petitions are pending
before this Court to make a mention before the concerned
CWP No. 2186 of 2011 31
Bench for expeditious disposal. We have no doubt in our
mind that such request of the petitioners would be
examined on its own merits by the Hon'ble Judges in the
larger interest of national security."
20. The primary contention of the counsel that there was
concealment on the part of respondent no. 3 while responding to the
request for proposal and, therefore, the contract should not have
been entered into by the State of Punjab cannot be accepted. The
history of the introduction of HSRPs and the litigation which had
ensured has already been mentioned from paragraphs no. 14 and 15
above. Clause nos. 3 and 4 of 2.2.1 of the RFP document read as
under:-
Sr. Eligibility Criteria Supporting
No. Documents
3 The Bidder must be a manufacturer or vendor Copy of Certificate
dealing in High Security Registration Plates of registration.
registered as a company under the Companies
Act, 1956.
Agreement of the
Bids from Joint Venture/ Consortium members of joint
(JV/C) are also acceptable & in that case atleast venture/consortiu
one of the members of the Joint m
Venture/Consortium has to fulfill the criteria.
In case of vendor,
Authorization
Letter from the
manufacturer of
High Security
Registration
Places.
CWP No. 2186 of 2011 32
Sr. Eligibility Criteria Supporting
No. Documents
4 The Bidder/Member of Joint Venture/Consortium Copy of Type
should submit copy of Type approval certificate, Approval
duly attested by a Gazetted officer, for each size certificate.
& type of High Security Registration Plate &
fixtures from agencies authorized by Govt. of
India to supply the High Security Registration
Plates, stickers, snap locks. (Original shall be
produced at the time of opening of qualification
bid). In case the certificate is due for renewal,
the bidder/JV/Consortium should ensure that the
renewed certificate is made available at the time
of signing of contract. In case the same is not
provided, the Transport department may
consider the award of contract to the next
successful bidder.
21. The reading of the above said clauses goes on to show
that respondent no. 3 was a manufacturer of HSRP and a copy of the
TAC duly attested by the Gazetted Officer had to be submitted from
the agencies authorized by the Government of India. The original
was to be produced at the time of opening of the qualification bid. A
perusal of the minutes of the meeting dated 07.10.2011 goes on to
show that the original of the TAC was produced by all the bidders
except one and the photocopies were retained as part of the meeting
and the originals were returned back. That as per Annexures VIII, IX,
XI, XIII the following declarations were to be given:-
"ANNEXURE VIII: Structure and Organization
1 The Bidder/ Member is
(a) a Company incorporated under
Indian Co.s Act -------------------------------
(b) a joint venture/consortium(if yes, give
complete information in
respect of each member)
CWP No. 2186 of 2011 33
1 The Bidder/ Member is
Attach the Organization Chart showing the
structure of the organization including the --------------------------------
name of the Directors and position of
2 officers.
For how many years has your organization
been in business of similar works? What
were your fields when your organization was
established? Whether any new fields were
added in your organization? And if so,
3 when?
Give details of your Registration Plate
testing laboratory, if any (include full range
of equipments available; 'make', year and
functional conditions details etc. including
present status indicating their availability --------------------------------
4 for the contract (s) being applied for)
Give details of your experience in using
decentralized Registration Plate ---------------------------------
manufacturing equipment and quality
5 control systems that you would adopt.
Give details of your experience in ---------------------------------
manufacturing/supply of 3rd Registration
Plate. (include your method statement for
6 this item).
Give details of your experience in snap lock
system for Registration Plates (include your
7 method statement for this item).
(Authorized signatory)
Name:
Designation:
Company Seal:"
"ANNEXURE IX: Equipment Capabilities
UNDERTAKING
I, (name of authorized signatory), do hereby solemnly
affirm that:
1. Our Company/ Joint Venture/ Consortium i.e.
M/s. ______________ will deploy all equipments
required for implementation of the project as per
technical specifications laid down in the said
Notification for implementation of High Security
Registration Plates project in Punjab.
2. I shall submit, within 7 (seven) days of
commencement of our commercial production, a
certificate of Commencement by a qualified
Chartered Engineer on which the authorities may
CWP No. 2186 of 2011 34
conduct Technical verification and subsequent
verifications as per the Bid terms."
Annexure XI: Declaration of Capabilities
I, (name of authorized signatory), do hereby solemnly
affirm and declare that:
1. Our Company/ Joint Venture/ Consortium i.e.
M/s. _______________ has the High Security
Registration Plates manufacturing facility in the
territory of India. The address of the said facility is
given below:
a. Name:
b. Street:
c. District:
d. PINCODE
e. State
f. Mobile/ Telephone/ Fax/ email"
ANNEXURE XIII: Undertaking for infrastructure
UNDERTAKING
I, (name of authorized signatory), do hereby solemnly
affirm and undertake that should our Company/ Joint
Venture/ Consortium i.e. M/s. ________________ be
the successful bidder, we will
1. Operationalise the whole integrated system,
offices, facilities etc in the entire state within 60
days from the date of signing of the contract.
2. Establish infrastructure required and necessary
for carrying out the work as prescribed under
the scope of the bid document shall be made
operational within the period as stipulated in
the RFP document."
Respondent no. 3, in compliance thereto, submitted the
following undertakings:-
Structure and Organization as per Annexure VIII
CWP No. 2186 of 2011 35
1 The Bidder is A joint Venture company
(a) a company incorporated under Yes
Indian Company's Act. Joint Venture with:
Lead Member: Agros Impex (I) Pvt. Ltd.,
(b) a joint venture/consortium (If yes, Member 2: Frost International Ltd.,
give complete information in respect of
each partner/member) Member 3: Trinity Engineering Services
LCC.
Complete details provided in Appendix
3A, 3B, 3C, 4A, 4B, 4C and Appendix 5.
Attach the Organization Chart showing Organization Charts attached at;
the structure of the organization
including the name of the Directors and
position of Officer Appendix 19A : Agros
Appendix 19B : Frost
Appendix 19C : Trinity
List of Directors given in
Appendix 9A : Agros
Appendix 9B : Frost
2 Appendix 9C : Trinity
For how many years has your
organization been in business of similar
works? What were your fields when your
organization was established? Manufacturing plant set up in 2003.
Whether any new fields were added in Other details provided in Appendix 9-A
3 your organization? And if so, when? AgrosProfile.
Give details of your Registration Plate The testing of our manufactured
testing laboratory, if any 9include full Registration Plates would be outsourced
range of equipments available; "make", to VRDE as they are certified testing
year and functional conditions details agencies MORTH of Govt. of India for
etc. HSRP.
including present status indicating their Plant ready in all respects for
availability for the contract (s) being manufacturing HSRP since June 2003.
4 applied for)
Give details of your experience in using Details provided in Understanding of
decentralized Registration Plate Project.
manufacturing equipment and quality
5 control systems that you would adopt.
Give details of your experience in Details provided in Understanding of
manufacturing/supply of 3rd Registration Project.
Plate. (Include your method statement
6 for this item).
Give details of your experience in snap Details provided in Understanding of
lock system for Registration Plates Project.
(include your method statement for this
7 item.)
CWP No. 2186 of 2011 36
Name of the Lead Member: AgrosImpex (I) Pvt. Ltd.
Vinod Agarwal
Signed by Authorized Officer of the Bidder(s)
Manager Director
Title of Officer
Joint Biding of
M/s. Agros Impex (I) Pvt. Ltd.
Frost International Ltd. & Trinity Engineering Services, LLC
Name of Bidder (s)
05th October 2011
Date"
UNDERTAKING as per Annexure IX
I, Vinod Agarwal, do hereby solemnly affirm that:
1. Our Company/ JointVenture/ Consortium i.e.
M/s. M/s. Agros Impex (I) Pvt. Ltd., Frost
International Ltd. And Trinity Engineering
Services LCC will deploy all equipments
required for implementation of the project as
per technical specifications laid down in the
said Notification for implementation of High
Security Registration Plates project in
Punjab.
2. I shall submit, within 7 (Seven) days of
commencement of our commercial
production, a certificate of Commencement
by a qualified Chartered Engineer on which
the authorities may conduct Technical
verification and subsequent verifications as
per the Bid terms."
Declaration of Capabilities as per Annexure XI
I, Vinod Agarwal, do hereby solemnly affirm and
declare that:
1. Our Company/ Joint Venture/
Consortium i.e. M/s. Agros Impex (I) Pvt. Ltd.
has the High Security Registration Plates
manufacturing facility in the territory of India.
The address of the said facility is given below:
a. Name: M/s. Agros Impex (I) Pvt. Ltd.
b. Street: E-7, Kavi Nagar Industrial Area.
c. District: Ghaziabad
CWP No. 2186 of 2011 37
d. Pincode: 201002
e. State: (U.P.) India
f. Mobile/ Tgelephone/ Fax/ email: +919811312378/
011-26525958/ 011-26861291/ [email protected]
Name of the Lead Member: Agros Impex (I) Pvt.
Ltd."
Undertaking as per Annexure XIII
I, Vinod Agarwal, do hereby solemnly affirm and
undertake that should our Company/ Joint Venture/
Consortium i.e. M/s. Agros Impex (I) Pvt. Ltd be the
successful bidder, we will
1. Operationalise the whole integrated system,
offices, facilities etc in the entire state within 60 days
from the date of signing of the contract.
2. Establish infrastructure required and necessary
for carrying out the work as prescribed under the
scope of the bid document shall be made operational
within the period as stipulated in the RFP document.
Name of the Lead Member: Agros Impex (I) Pvt.
Ltd."
Current Contract commitments/ works in progress in
India
Name of the Bidder: Agros IMPEX (I) PVT LTD
All individual Bidder should provide information on
their current commitments on all contracts that have
been awarded, or for which a letter of intent or
acceptance has been received, or for contracts
approaching completion, but for which an
unqualified, full completion certificate has yet to be
issued.
S. Name of Contract Name and Contract Value of Estimated
No. Contract No. & Address of volume outstanding completion
Location Date Client per year work date
and nature (including
of the work Tel./ Fax
No.)
1 2 3 4 5 6 7
1 NA NA NA NA NA NA
2 NA NA NA NA NA NA
CWP No. 2186 of 2011 38
"NA" - the HSRP is yet to be implemented in any
state.
Agros- is involved in the e-Passport project for
Govt. of India, details cannot be provided as the
project is under National Security.
a. Agroshas yet to execute a contract for HIGH
SECURITY REGISTRATION PLATES AS
DEFINED IN AMENDED RULE 50 OF CMVR
1989 with any State Government in India.
Agroshas submitted its Bid for Orissa State which
is under evaluation process.
b. As on date, only two/ three very small State
Governments i.e. Mizoran/ Sikkim, Goa (under
Scam) in India have implemented this project
which has been implemented by one group of
companies at exorbitant prices.
Name of the Lead Member: Agors Impex (I) Pvt.
Ltd."
22. As per clause 29 of 2.2.1, the manufacturing facility could
be inspected by the team and a work appraisal could be conducted.
However, the said clause could not be held to be mandatory in view
of the fact that until a confirmed order was received from any State
Registering Authority, the manufacturer could not commence
production. The provisions of Motor Vehicles (New High Security
Registration Plates) Order, 2001 read as under:-
"THE MOTOR VEHICLES (NEW HIGH SECURITY
REGISTRATION PLATES) ORDER, 2001
[22nd August, 2001]
Whereas the Central Government is of the
opinion that it is necessary and expedient in the
public interest to notify certain standards in respect
of the new system of high security registration plates
for motor vehicles and the process used by a
manufacturer or vendor for manufacturing or
supplying such plates with reference to the
amendments made in the Central Motor Vehicles
CWP No. 2186 of 2011 39
Rules, 1989 by the Central Motor Vehicles (1st
Amendment) Rules, 2001, it, therefore, in exercise of
the powers conferred by the sub-section (3) of section
109 of the Motor Vehicles Act, 1988 (59 of 1988)
makes the following order to specify such standards,
namely:-
ORDER
1. This Order may be called as the Motor Vehicles (New High Security Registration Plates) Order, 2001.
2. It shall come into force on the 28th day of September, 2001 in case of new registered vehicles from that date and in case of already registered vehicles, two years from the date of publication of this Order in the Official Gazette.
3. Application.- This Order shall apply to motor vehicles as defined in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
4. A manufacturer or supplier of new high security registration plates shall comply with the following specifications, namely:-
(i) The manufacturer or supplier shall have a certificate from the Central Road Research Institute, New Delhi or any one of the testing agencies authorised by the Central Government under rule 126 of the Central Motor Vehicles Rules, 1989.
(ii) The registration plate shall conform to the specifications spelt out in rule 50 of the Central Motor Vehicles Rules, 1989;
and shall conform to [DIN 74069-175 and ISO 7591-1982, as amended from time to time till such time as the corresponding BIS specifications are notified]. The Registration Plate has to be guaranteed for imperishable nature for a minimum of five years.
[(iia) The size of the registration plate for different categories of vehicles shall be in accordance with clause (vi) to sub-
rule (1) of rule 50 of the Central Motor CWP No. 2186 of 2011 40 Vehicles Rules, 1989. However, in case of motorcycles, the size of the plate may be used 285 X 45 mm.]
(iii) The background colour of the letters in the High Security Registration Plates shall be the same as per the colour scheme prescribed in the Notification of the Government of India in the Ministry of Road Transport and Highways No. G.S.R. 221(E) dated 28.3.2001 namely in black colour on yellow background in case of transport vehicles and in black colour on white background in other cases. The letters of registration mark shall be in English and the figures shall be in Arabic numerals, and the letters and numerals shall be embossed and hot stamped.
[(iv) To protect against counterfeiting, a chromium-based hologram of the size 20 mm x 20 mm is to be applied by hot stamping on the top left-hand corner of the plate in both front and rear plates.
The hologram shall contain CHAKRA in blue colour as given in the Annexure annexed to this Order.]
(v) The permanent identification number of minimum 7 digits is to be laser branded into reflective sheeting on the bottom left-hand side of the registration plate with the numeral size being 2.5 mm.
[Provided that the permanent consecutive identification number in Arabic numbers shall be preceded by two alphabets representing the name of the vendor or the manufacturer or the supplier, as the case may be, for whom the type approval certificate is issued by the test agencies:
Provided further that test agencies specified in column (2) of the Table below shall use the alphabets specified in column (3) of the said Table as under:
TABLE S. No. Name of CWP No. 2186 of 2011 41 the Test Agency Alphabets (1) (2) (3)
1. Automotive Research Association of A to H of India, Pune
2. Central Road Research Institute, I to P New Delhi
3. Vehicles Research Development Q to S Establishment, Ahmednagar Provided also that the height of the digits shall be 5mm for the front and rear registration plates and shall be 2.5 m for the third registration plate, which shall be in the form of a sticker.]
(vi) The hot stamping film to be applied on the letters/numerals of the licence number shall bear the inscription "INDIA". [The letters"INDIA" shall be in blue colour with the font size of 10 (Ten) in Type Arial Bold script at 45 degrees inclination with sequential lines being the mirror image of the other.]
(vii) The third registration plate in the form of a self based hologram sticker shall be of the size of 100 mm x 60 mm is to be affixed on the inner side of left hand corner of windshield of the vehicle. The details on the sticker shall be (i) name of registering authority, (ii) registration number of the vehicle, (iii) laser branded permanent identification number, (v) engine number, (v) chassis number of the vehicle. On the bottom of the right corner of the sticker, the chromium based hologram shall be applied but of a smaller size of 10 mm x 10 mm. In the said sticker the registration number of the vehicle shall be in the centre with a letter size of 10 mm in height. The name of registering authority would be on top part of sticker in letter size of 5 mm, while, laser branded permanent identification number, then engine number followed by chassis number shall come in the bottom left side of the sticker with numeral size being 2.5 mm CWP No. 2186 of 2011 42 in the each case. A depiction of the sticker is given in the sketch as specified in the Annexure annexed to this Order.
[The sticker should be essentially a diffraction foil firm with high reflective index and shall have the chromium based hologram embedded.]
(viii) The registration plate fitted in the rear of the vehicle shall be fastened with non- removable/ non-reusable snap lock system. For that sake of better security, at least two such snap locks shall be fitted.
(ix) No high security plate shall be affixed outside the premises of the registering authority.
(x) The manufacturer or the vendor selected by the State Transport Department for supply of such registration plates may be for the State as a whole or for any region of the State.
[(xa) The State Government or Union Territory Administration shall ensure that any person who has been.-
(a) convicted of a cognizable offence by any court of law with imprisonment for a term exceeding one year; or
(b) imposed a penalty of rupees one crore or more for violation of the provisions of the Foreign Regulation Act, 1973 (46 of 1973) (since replealed) or the Foreign Exchange Management Act, 1999 (42 of 1999);
or
(c) detained under the National Security Act, 1980 (65 of 1980) or the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985);
or
(d) adjudged guilty by the Stock Exchange Board of India or any other such Financial Regulatory Boards or Tribunals or Agencies; or CWP No. 2186 of 2011 43
(e) found to be associated in any manner with an organized crime syndicate or its associate or with any Association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 (37 of 1967) or any other law for the time being in force; or
(f) found to be connected with activities prejudicial to the National Security, is not considered for selection as manufacturer or vendor for supply of High Security Registration Plates.
(xb) The person or firm selected for any State or any region of the State shall not change the ownership of the firm without prior permission of the State Government or Union Territory Administration.
(xc) The State Government or Union Territory Administration shall take necessary action to ensure compliance with the provisions of clause (xa), as so inserted, and complete the implementation of rule 50 of the Central Motor Vehicles Rules, 1989 on or before the 31st day of October, 2006 for the newly registered vehicles and within a period of two years thereafter for already registered vehicles.
Provided that before cancelling the selection of or disqualifying a manufacturer or vendor, the State government or Union Territory Administration shall give such manufacturer or vendor, as the case may be, a reasonable opportunity to represent against such action and communicate in writing the reasons for such cancellation or disqualification.]
(xi) The registration plate will be supplied to the motor vehicle owners by the vendor against the authorization by the Road Transport Officer or any officer designated for the purpose by the State Transport Department.
CWP No. 2186 of 2011 44
(xii) The replacement for any existing registration plate may be made by the concerned transport authority only after ensuring that the old plate has been surrendered and destroyed.
(xiii)A proper record of the registration plates issued by the manufacturer or vendor, authorised by the State Government, should be maintained on a daily basis and got tallied periodically with the records of the Transport Office.
(xiv)Periodic audit shall be carried out by concerned testing agency to ensure compliance of the requirements of the high security registration plate.
In para no. 4 of these Rules, after clause (xiv), the following clauses were inserted on 16.09.2011:-
(xv)The approved manufacturer or supplier shall maintain complete record of all the security features in their possession which shall be audited by the concerned testing agencies.
(xvi)Various security features of security license plates shall be used only by the approved manufacturer or supplier authorised by the States or the Union Territory Administration for fitment of these plates on motor vehicles.
(xvii)The approved manufacturer or supplier shall exercise complete control over all the security features in its possession and shall be responsible for the use of any of the security feature on registration plate in the open market either by himself or by any other person on his behalf.
(xviii)The approved manufacturer or supplier shall not be authorised to sell incomplete plates or the security features separately to anyone.
(xix)The type approval certificate issued to the vendor shall be liable for suspension or cancellation by the CWP No. 2186 of 2011 45 Government for failure to comply with these provisions."
23. Respondent no. 3, on 05.10.2011, had in Appendix 30, given the following information:-
To State Transport Commissioner Transport Department, Punjab Chandigarh.
Ref.: Supply of High Security Registration Plates in State of Punjab on BOO basis.
Sir, The details of manufacturing facilities are as under:-
SI. Details Required Details provided No. Location of main Unit E-7, Kavi Nagar Industrial Area, 1 Ghaziabad - 2001002 (U.P.) India 2 Area of land 40500 sq ft 3 Production Capacity Provided in Appendix 9A Details and make of Provided in Appendix 29 4 equipments installed Date by which the unit Plant commissioned, The date we became operational are awarded with a order from any 5 state authority Copies of necessary Enclosed approvals and factory 6 Licenses Details of technology being Provided in Appendix 10 used and system 7 characteristics Plan for Interconnectivity Provided in ANNEXURE XVII 8 and networking Turns over in registration "NA" as this project has been plate business in the last implemented only in three small three years states, manufacturing and supplies of HSRPs can be affected ONLY to State Transport Departments, hence till such time TAC holders are legally banned from manufacturing 9 and sales.
Name of the Lead Member: AgrosImpex (I) Pvt. Ltd." CWP No. 2186 of 2011 46
24. In view of the clauses in the tender, the State could impose penalties in case of delay in implementation of the scheme and as per the clause (xv) of the order of 2001, before cancelling or disqualifying a manufacturer, notice had to be issued to him and the firm selected cannot change the ownership of the firm without the prior permission of the State Government. The Apex Court in Shimnit Utsch's case (supra) has held that the State has to ensure that fly by night operators should be eliminated and the Government has a right to get the most competent person. The following observations made in para no. 53 would be relevant:-
"53. In Assn. Of Registration Plates this Court while dealing with the challenge to the conditions with regard to experience in foreign countries and prescribed minimum turnover from that business observed that these conditions have been framed in NIT to ensure that the manufacturer selected would be technically and financially competent to fulfil the contractual obligations and to eliminate fly-by-night operators and that the insistence of the State to search for an experienced manufacturer with sound financial and technical capacity cannot be misunderstood. While maintaining the State Government's right to get the right and most competent person, it was held that in the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring the supply of HSRP, greater latitude is required to be conceded to the State authorities and unless the action of the tendering authority is found to be malicious and CWP No. 2186 of 2011 47 a misuse of statutory powers, tender conditions are unassailable."
25. The reading of the undertakings goes on to show that after commercial production had commenced, certificate of commencement had to be furnished by a qualified Chartered Engineer and the authorities were thereafter to conduct technical verification and subsequent verification as per bid terms. As per Annexure IX, the address of the manufacturing facility had to be given and as per Annexure XIII, the successful company was to operationalize the whole integrated system in the entire State within 60 days from the signing of the contract and establish infrastructure required and necessary for carrying out the work as prescribed under the scope of the bid document within the period as stipulated in the RFP document. Thus, the actual commencement of production was to take place only on the signing of the contract and it was only the infrastructure which had to be in place and ready to be put into action as and when a concluded contract came to place and the successful tenderer would start working on the order. In Clause 4.4, a time schedule was also provided and penalties could be levied for delays in performance. The said relevant clauses read as under:-
"4.14 DELAYS IN THE PERFORMANCE 4.14.1 Performance of the Contract shall be made by the successful bidder in accordance with the time schedule as specified by the Department.
4.14.2 A delay by the successful bidder in the performance of its contractual obligations shall render the successful bidder liable to any or all of the following sanctions:CWP No. 2186 of 2011 48
i) Forfeiture of its performance guarantee.
ii) Imposition of Service Level Agreement; and/or
iii) Termination of the Contract for default 4.15. Service Levels The time is the essence of the contract. High Security Registration Plates are to be affixed on the motor vehicles in the State as notified by Ministry of Road Transport and Highways, Govt. of India.
S.No Service/ Item Time Penalty
. Allowed
1 Required Within 2 * Rs. 5000/-
infrastructure to be months per day per
ready & actual from location for
manufacturing of signing of first 30 days
HSRP contract delay
* Rs.
10,000/- per
day per
location
from 31 to
120 days
delay
*
Rs.15,000/-
per day per
location
from 121
days
onwards
2 Affixation of HSRP Within 4 Contract
has to be started in months may be
atleast 75% of RAs terminated
within by the
Department
26. Respondent no. 3, in Annexure VIII, has specifically given the detail that the manufacturing plant had been set up in the year 2003 and was ready in all respects and the testing of manufacturing CWP No. 2186 of 2011 49 registration plates was to be outsourced to VRDE as they were the certified testing agencies of the Government of India for HSRPs.
27. As per Annexure XIV, reproduced above, respondent no.
3 had clearly mentioned that the full completion certificate is yet to be issued and M/s. Agros Impex (I) Pvt. Ltd. had yet to execute the contract for HSRPs, as defined in the amended Rule 50 of CMV Rules and that it had submitted its bid for Orrisa State which was under valuation process and only State of Mizoram, Sikkim and Goa had implemented this project which had further been implemented by one group of companies at exorbitant prices. That as per sub rule (v) of Rule 50, only such manufactures who have been authorized by the Central Road Research Institute, New Delhi or any agency authorized by the Central Government, could issue the license plates and respondent no. 3 was one such manufacturer who had been given a license, as mentioned above by VRDE. Merely, because respondent no. 3 has set up another plant at Mathura Road, New Delhi and its TAC dated 19.06.2003 has been extended to the said plant, would not be a ground to hold that there has been any concealment or that it is not in a position to cater to the contract. After the grant of the contract and the signing of the agreement, the respondent itself had written vide letter dated 05.01.2012 that the plant had been dismantled in the year 2005 to protect it from dust and moisture and it would only take two weeks to commission the plant and the supply can be made from the new plant at New Delhi and there was proposal to shift the plant from Ghaziabad to Gujarat. The State Government has also issued a letter to the M/s. Pricewaterhouse/Coopers on 20.01.2012 regarding the inspection report of the Deputy Controller (F & A) and Service Engineer and asked them to submit their report. The consultants, vide letter dated 15.02.2012, which has been placed on record had noted that respondent CWP No. 2186 of 2011 50 no. 3 had submitted letters of intent for the States of Gujarat and Assam and that as per Appendix 30 of the bid document, in clarification they had mentioned that the plant would be commissioned from the date they are awarded any order from any state authority and had opined that the State Legal Department could check the legal implications, if any, on the findings of the inspection report. Regarding the inspection of the premises, it was noticed by the consultants that a decision had been taken on 17.10.2011 to undertake sample testing and field visits during conformity of production certificates for the successful bidder and mentioned that M/s. Crane Bel International Private Ltd. had supplied one fully automatic complete unit for blank production of manufacturing HSRPs. Therefore, from the above terms and conditions, it would be clear that the requirement was to have a unit which had the requisite TAC issued by the competent authority and in view of the statutory bar, the said manufacturing unit could not be in place till an effective order had been received from any State Transport Authority.
28. The submission of the counsel that manufacturing process had to be in operation at Ghaziabad, cannot be accepted in view of the above peculiar facts and circumstances, since respondent no. 3 had no confirmed order from any State transport authority and in its undertakings, reproduced above, it has been specifically clarified that the Bid Evaluation Committee had decided that testing of samples would be conducted during the conformity of production. In such facts and circumstances, the Bid Evaluation Committee and the petitioner was also well aware of the said condition at that stage since the contract had not been awarded but it had been decided on 17.10.2011.
"D. The committee took note of the clarification provided by CRRI, vide email dated 14th October 2011, regarding testing of samples during CWP No. 2186 of 2011 51 the bid evaluation process and conducting field visits to the manufacturing facility of the bidder. In order to expedite the selection of bidder the committee decided to undertake sample testing and field visit during the Conformity of Production certificate for the successful bidder."
29. Thereafter, the Bid Evaluation Committee, on 20.10.2011, had noticed that a cartel of manufacturers and suppliers was trying to interfere in the bid process in a blatant manner and ignored the letter issued by the associations keeping in mind that the Apex Court was monitoring the HSRPs implementation. It is also noticed that none of the six bidders had raised any reservations with respect to the qualifying criteria in the RFP and there could be no change in the qualifying criteria which was reasonable, fair and non-discriminatory.
30. The second submission of the counsel that the letter of intent was signed after the period of 15 days and, therefore, the agreement should not have been executed and was in violation of the RFP, is also meritless. The State has given the reasons for the delay which occurred and has justified that the bank guarantee of `1 crore furnished by respondent no. 3 had been submitted on 04.11.2011 since the said guarantee was issued from the bank at Kanpur and had to be confirmed. The said deviation of clause 2.25 is of no significance since the delay has taken part on behalf of the State and not on behalf of respondent no. 3, who had furnished the bank guarantee within the prescribed period. The law regarding the granting of contracts and awarding tenders has been settled by the Hon'ble Apex Court time and again. The Hon'ble Apex Court has held that the entering into contract is a commercial decision by the State and the Government should have a freedom of contract. The CWP No. 2186 of 2011 52 capability of the person to deliver the services has to be taken into consideration and the Court is not to decide, as a Court of Appeal but to merely review the manner in which the contract was given. The petitioner had a right to bid for the said contract but it had no such absolute right of allotment. It further having taken a chance and being well aware of the conditions of the Statute, now cannot turn around and say that the private respondent had no manufacturing unit and thus was ineligible once the TAC had already been issued. The principles laid down by the Apex Court in Raunaq International Ltd. v. I.V.R. Construction Ltd, (1999) 1 SCC 492 read as under:-
"(1) the price at which the other side is willing to do the work;
(2) whether the goods or services offered are of the requisite specifications;
(3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important.
(4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality;
(5) past experience of the tenderer and whether he has successfully completed similar work earlier;
(6)time which will be taken to deliver the goods or services; and often (7)the ability of the tenderer to take follow-up action, rectify defects or to give post-contract services."
31. In Tata Cellular vs. Union of India, (1994) 6 SCC 651, the scope of interference in awarding of government contracts and tenders was laid down and it was held that there has to be a fair play in the choice and CWP No. 2186 of 2011 53 quashing the decision may impose heavy administrative burden. The six guidelines laid down read as under:-
"(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 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"
(emphasis in original)
32. In the present case, as noticed, the matter has been under constant scrutiny of Apex Court and at one stage, the Apex Court had also restrained the High Courts to interfere in the tender process in order to CWP No. 2186 of 2011 54 ensure that there was no delay in the implementation of the said scheme which was pending since 2001. The Apex Court, recently in Civil Appeal No. 5898 of 2012, M/s. Michigan Rubber (India) Ltd. vs. The State of Karnataka and others decided on 17.08.2012, held that the Court should interfere under Articles 226 and 227 of the Constitution of India only where the process adopted or the decision taken is mala fide and where public interest is affected.
33. In the present case, there is no such allegation of mala fides and rather public interest would be adversely affected in case this Court interferes in the process of the awarding of the contract on the grounds as mentioned above. The record shows that there has been no violation of Article 14 of the Constitution of India and the Government has acted in conformity of statutory conditions in the matter of formulating the policy by which it had called for HSRPs tenders and transparent policy had been adopted and the petitioner had participated in the said tendering process and was in the race till the very end and only lost out at the stage of the financial bid. In our opinion the petitioner is not justified in challenging the award of contract in favour of respondent no. 3.
34. The third submission of the counsel regarding the issue of special purpose vehicle and whether the private respondent had set up the same and entered into an agreement with the State without setting up the said vehicle, shall not detain us any longer since it was pointed out by the counsel for the respondents that no such pleadings have been put forth in the writ petition and in the absence of the same, the counsel for the petitioner is precluded from arguing on the said ground. The learned counsel for the petitioner accepted CWP No. 2186 of 2011 55 the same and had restricted his submissions to the first two arguments, which have been answered against him.
35. The petitioner cannot be permitted to make a mountain out of a mole hill in order to secure business rivalries over respondent no. 3 and it would not be in public interest to permit such protection of private interest. The Apex Court, in Jagdish Mandal vs. State of Orissa and others, (2007) 14 SCC 517, has held as under:-
"12. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides.
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 Page 0102 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 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 CWP No. 2186 of 2011 56 may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.'
ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing 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."
36. Resultantly, this Court is of the opinion that no false information has been furnished by respondent no. 3 which would entail disqualification and cancellation of the contract which has been validly defended by the State and it is in the larger interest of the national security that the scheme is implemented at the earliest. Accordingly, the writ petition is dismissed.
(G.S. Sandhawalia) Judge (Ajay Kumar Mittal) Judge 11.09.2012 shivani/sailesh Refer to the Reporter