Bombay High Court
Prithvi Outdoor Publicity Llp And 4 Ors vs Maharashtra State Road Transport ... on 14 March, 2022
Bench: G.S. Patel, Madhav J. Jamdar
16-OSWPL-1902-2021(1).DOC
Dusane
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.1902 OF 2021
Prithvi Outdoor Publicity LLP & Ors ...Petitioners
Versus
Maharashtra State Road Transport Corporation & ...Respondents
Ors
Dr Birendra Saraf, Senior Advocate, with Rohan Savant, Monisha
Mane Bhangale and Warisha Parkar i/b Parinam Law
Associates for the Petitioners.
Mr Mukesh Vashi, Senior Advocate, i/b Nitesh V Bhutekar for
Respondent Nos. 1 to 3.
Mr Amit Shastri, AGP, for State-Respondent No.4.
Mr Muthahar Khan, i/b Rajesh O Gupta for Respondent No.6.
CORAM G.S. Patel &
Madhav J. Jamdar, JJ.
DATED: 14th March 2022 PC:-
1. The Petitioners are directed to remove all the prefies before the names of the newly added Respondents. The amendment is to be carried out forthwith in Court with need of reverifcation.
2. Heard.
3. Petitioner No.1 is a limited liability partnership engaged in advertising. The other Petitioners are its partners. Respondent No.1 Page 1 of 12 14th March 2022 16-OSWPL-1902-2021(1).DOC is the Maharashtra State Road Transport Corporation ("MSRTC"). Respondents 2 and 3 are its functionaries. Respondent No.4 is the State of Maharashtra. There is some mistake in the original numbering of the parties. Two tenderers have been joined as Respondent 6 and 7, namely Pro-Active In & Out Advertising Private Limited and Ad Impact.
4. The Petitioners challenge a decision of 18th January 2021 of MSRTC rejecting the Petitioners' tender bid. This is refected in what is called a tender summary report at Eihibit 'K' at pages 370 to 372. The Petitioners say that the only reason given for rejecting the frst Petitioner's technical bid was that some documents were submitted in the name of 'Prithvi Associates'. Prithvi Associates was converted to an LLP called Prithvi Outdoor Publicity LLP on 3rd July 2013 vide a Limited Liability Partnership Agreement of that date. The submission is that the entity is the same. All assets of Prithvi Associates were moved to Prithvi Outdoor Publicity LLP.
5. The tender in question is of 21st October 2020 for the appointment of an agency for securing and displaying advertisements on or in MSRTC's buses. This is to be for a fve-year period. This was an e-tender on the Maharashtra Government website. Various documents were required including a notarised non-blacklisting letter on Rs.500/- stamp paper. This will have some consequence. On 7th December 2020, Petitioner No.1, the LLP, submitted its bid. Many of its documents were in the name of the LLP. Some of the documents were in the previous name of Prithvi Page 2 of 12 14th March 2022 16-OSWPL-1902-2021(1).DOC Associates. According to the Petitioners, they had submitted documents showing the conversion.
6. A frst corrigendum was issued on 23rd November 2020 following some queries from bidders. The initial tender opening date of 25th November 2020 was eitended to 7th December 2020. The technical bid opening date was postponed to 9th December 2020. On 8th December 2020, the frst Petitioner submitted physical copies of its bid and bid documents. These had been submitted electronically within time.
7. Then, according to the Petitioners, they discovered details in respect of other bidders which showed that they were disqualifed. According to the Petitioners, some tenderers had submitted multiple bids, prohibited under Clause 5(vi). The tender itself said that multiple bids of this kind would result in a debarment.
8. The petition contains, even before amendment, an objection to another frm called Rakesh Advertising, not joined as a party Respondent to this petition because Rakesh Advertising was later disqualifed.
9. After some meetings in January 2020, the Petitioners submitted clarifcations on 12th January 2021. According to the Petitioners, they answered all queries. On 18th January 2021, the Petitioners came across the impugned summary tender rejection document. This is a short document at Eihibit 'K' page 370. We reproduce the body of this document.
Page 3 of 1214th March 2022 16-OSWPL-1902-2021(1).DOC "You are informed that your bid for the above tender has been rejected during Technical evaluation by the duly constituted committee for the reason Document submitted in the name of M/s Prithvi Associates".
10. Anneied to this document is a chart on the neit page. Two tenderers, the Petitioner and Rakesh Advertising were both rejected at the technical stage. The reason given for rejecting the Petitioners' tender was that the documents were submitted in the name of Prithvi Associates. We pause here for a moment before proceeding to the neit ground.
11. The conversion from Prithvi Associates to the LLP is not a recent development. The tender was of late October 2020. The Petitioners' bid is of 7th December 2020. The conversion to the LLP is of seven years earlier. It may well be that some of the documents that the Petitioners submitted were in the name of the previous frm and only a few were in the name of the LLP. We do not believe it is the function of the Writ Court to go into a microscopic eiamination of the documents and enter into areas of disputed questions of fact. Specifcally, we do not see any scope for a Writ Court to evaluate, independently of the tendering authority, the correctness or otherwise of the documents. It is all very well for the Petitioners to tell this Court that some documents were in its earlier name and therefore all requirements was satisfed. But that is the eiclusive preserve of the tendering authority. Unless it is shown that the decision-making process is somehow faulty, we decline to substitute the decision itself merely because another view may be possible (and even this is not demonstrated), simply because the Page 4 of 12 14th March 2022 16-OSWPL-1902-2021(1).DOC Petitioners are unable to show which of the documents, though in the name of the previous frm, were still compliant. The Petition does not proceed on the basis of the correctness of any particular document at all. It simply asks us to hold that because there was a change in name, everything submitted by the Petitioners must aiiomatically be held to be tender-compliant.
12. In any case, not only is there no decision which we are aware or which is cited before us to the efect that a Writ Court is duty- bound -- or even allowed -- to eiamine such minute questions of fact, but the entire argument proceeds on a hypothesis that some documents in the name of Prithvi Associates dating from before the conversion to an LLP were immaterial. This is not established. In any case, even if that an attempt was made to establish it, it would frst have to be shown that it is the province of a Writ Court to get into what is undoubtedly a question of appreciating evidence on record and disputed questions of fact.
13. There is another dimension to this. This relates to the undertaking that was required by the tender and what was actually furnished by the Petitioners. We accept at the forefront that an inconsistency in the form of the submitted undertaking is not the stated reason for the rejection. But the stated reason has an undeniable connection to that undertaking. We fnd the undertaking required in Clause 5(viii) of the tender at page 44:
"5.(viii) If any time the tenderer has been blacklisted in Government/Semi Government Institution for tender cartelization then the tenderer would be blacklisted and debarred from the tender and future tenders."Page 5 of 12
14th March 2022 16-OSWPL-1902-2021(1).DOC (Emphasis added)
14. At page 45, there is a table listing documents that are required and stating whether these are compulsory or additional. Item 6 of this table reads thus:
Sr. List of Documents Compulsory/ No. Additional 6 Copy of undertaking duly notarized Compulsory stating that his/their/her frm and directors are not blacklisted in MSRTC/ Government/ Semi-Government Institutions/Any STU along with the declaration stating that the bidder have not any pending arrears or dues of the Corporation at the time of bid submission on Rs.500/- stamp paper.
15. Now the actual undertaking submitted by the Petitioners is to be found at page 244. It reads:
"As per the requirement in the tender for appointment of an Agency for Securing & Displaying advertisements on/in Maharashtra State Road Transport Corporation Buses, we hereby declare that as on date we have not been blacklisted/ debarred by MSRTC/Government/Semi-Government Institutions/Any STU nor any pending arrears or dues with the MSRT Corporation."
16. On any fair reading of this tender, the undertaking given by the Petitioner is that as on the date of the undertaking, the Petitioner had not been blacklisted/debarred by MSRTC, etc. But what Clause 5(viii) required was a statement and an undertaking whether the tenderer had at any time been blacklisted and that too Page 6 of 12 14th March 2022 16-OSWPL-1902-2021(1).DOC for tender cartelization. Item 6 of the table also required an undertaking duly notarized that the frm "are not blacklisted".
17. Dr Saraf's submission for the Petitioners is that Clause 5(viii) should be read down so as to ignore the words "for tender cartelization" and that the opening words "if any time" must be read reasonably to mean at the time of the tender. The reason he is compelled to make this submission is that, in the past, the Petitioner was in fact blacklisted for a period of fve years; and that blacklisting was precisely for cartelization. Now a blacklisting for cartelization (or for fnancial misdealing, fraud etc) is conceptually very diferent from a blacklisting that is the result of substandard performance, poor quality of work etc. Cartelization is a species of fraud, not sub- standard workmanship. It is an attempt to gain an undue advantage in obtaining a Government tender. All blacklisting is serious; but blacklisting for fraud of this kind must surely be construed and accepted as being eitremely serious. There is no question then of removing the words "if any time" or "for tender cartelization" from the tender contract.
18. The argument that blacklisting cannot be forever, and that the Petitioner has 'served out its sentence' is not one we can accept. The tender requirement is to assess whether there has been a blacklisting at any time for a particular cause, viz., cartelization. It is not cited as a reason for rejection per se or in and of itself, and rightly so. But it is undoubtedly a factor. What is more important, however, is the attempt by the Petitioner to distort the required undertaking and to re-phrase it unilaterally in a manner that suits its purpose.
Page 7 of 1214th March 2022 16-OSWPL-1902-2021(1).DOC
19. Dr Saraf attempts to boost his argument by showing that the undertaking given by Respondent Nos. 6 and 7 is equally faulty. But the fact that another tenderer has submitted a faulty undertaking does not mean that the Petitioner's undertaking is correct. What is important here is both the form and the substance. The requirement is that a tenderer must not at any time have been blacklisted, not generally, but for cartelization. This is what Clause 5(viii) clearly forbids. The tabulation at page 45 is merely setting out the form. It is not the substantive requirement.
20. We said earlier that the bid rejection at Eihibit 'K' has a neius with this requirement. We believe it does. The cartelization blacklisting was one that was sufered by the Petitioner from 2008 to 2013. The onset of that cartelization blacklisting was in the name of the original partnership frm, Prithvi Associates. Now the undertaking at page 244 in the name of the LLP is carefully worded to say that as on the date of the tender or the date of the undertaking "we" have not been blacklisted -- meaning the LLP, and as on the current date, ignoring all past records. The reason that this becomes important is that MSRTC must clearly evaluate all bidders fully on merits. It cannot wipe out or eface past records. The tender does not allow that. Even if the Petitioners' bid is the highest, there is no requirement that the highest bidder must always succeed irrespective of all other factors.1
21. According to the Petitioners, they submitted a clarifcation on 5th January 2021 mentioning the blacklisting. Clearly, this was not 1 See: State of Punjab v Mehar Din, 2022 SCC OnLine SC 250; Judgment dated 2nd March 2022.
Page 8 of 1214th March 2022 16-OSWPL-1902-2021(1).DOC submitted with the tender but came much later. The covering letter of 5th January 2021 at page 405 does not in fact mention the word cartelization at all. This is separately anneied to the Afdavit in Rejoinder at page 408 in Eihibit B-1. The 5th January 2021 letter is also anneied at Eihibit H at page 358 of the petition. The letter carries over to the neit page but does not indicate that they were any enclosures to it such as the original blacklisting document at Eihibit B-1 issued by BEST of 28th May 2015. That certifcation in any case came pursuant to a High Court order of 1st February 2010 in Writ Petition No.2807 of 2008.
22. It is entirely possible that the tender of Respondent Nos. 6 and 7 may also be vulnerable. We have nothing to say in that regard. It is not for us to evaluate rival tenders.
23. We must reject and repel Dr Saraf's submission that this Court should interpret the terms and conditions of the tender document. It is by now far to well settled to warrant repetition that interpretation is fundamentally the province of the tendering authority.
24. Dr Saraf invites our attention to the decision of the Supreme Court in State of Punjab v Bandeep Singh & Ors2 for the proposition that every decision of an administrative or eiecutive nature should be a composite and self-sustaining one. It should contain all the reasons that prevailed on the ofcial taking into decision to arrive at its conclusion. The authority cannot add to those reasons at a later 2 (2016) 1 SCC 724.
Page 9 of 1214th March 2022 16-OSWPL-1902-2021(1).DOC stage. This was also in the conteit of a Government contract or tender. Indeed in this very judgment, we fnd support for precisely our view on cartelization in paragraph 8, which reads thus:
"8. In the impugned judgment, the High Court has rightly concluded that no sustainable justifcation and rationalisation was recorded in writing at the relevant time for ordering the re-auction of only the two subject properties. However, we should not be understood to have opined that the Government is bound in every case to accept the highest bid above the reserve price. Needless to say, the presence of cartelization or "pooling" could be a reason for the cancellation of an auction process. In addition, a challenge on the ground that the property has fetched too low a bid when compared to the prevailing market price, would also be valid and permissible provided this approach has been uniformly adhered to. In the case at hand, however, while the latter was ostensibly the reason behind the decision for conducting a fresh auction, no evidence has been placed on the record to support this contention. The highest bids, marginally above the reserve price, have been accepted in the selfsame auction. The factual scenario before us is clearly within the mischief which was frowned upon in Mohinder Singh Gill. We, therefore, uphold the impugned judgment for all the reasons contained therein. The assailed action of the appellant is not substantiated in the noting, which ought at least to have been conveyed to the respondents."
25. Then reliance is placed on the decision of the Supreme Court in Rashmi Metaliks Ltd & Anr v Kolkata Metropolitan Development Authority & Ors.3 In paragraph 14, the Supreme Court considered the argument that "at the material time there was 3 (2013) 10 SCC 95.
Page 10 of 1214th March 2022 16-OSWPL-1902-2021(1).DOC no blacklisting or delisting of the appellant" and that in those circumstances it was not relevant to make any disclosure in that regard. But in that case the tendering authority had not adverted to this ground. We believe the present case stands on a diferent footing. The very wording of Clause 5(viii), as we have seen, speaks of a disclosure for a blacklisting for a specifc purpose, i.e. cartelization.
26. But this clause does not in and of itself mean that a tenderer is permanently blacklisted. That is not the case here and in fact that is not the stated reason for the rejection at all. The point however is that the factum of this blacklisting was attempted to be concealed by the Petitioners at the time of submission of the bid. Should such a Petitioner get a benefcial order from this Court? We do not believe it should. We would be entirely remiss in our duties in the Writ Court, if we permitted this kind of conduct by parties who approached this Court.
27. Lastly, the fact that BEST and even MSRTC may have previously granted contracts to the Petitioners does not carry the matter any further. Perhaps BEST and MSRTC were wrong and were wrong more than once; but multiple wrongs will not make one right. Nor can there be said to be any kind of estoppel running against BEST and MSRTC.
28. The Petition is rejected. In the facts and circumstance of the case, there will be no order as to costs.
Page 11 of 1214th March 2022 16-OSWPL-1902-2021(1).DOC
29. The additional afdavit of the Petitioners is not taken on record, since it was fled only this week end without leave of this Court.
30. The previous ad-interim order has continued and, in our view quite needlessly for far too long since 20th January 2021. We are dealing with a public authority and, more importantly, matters of revenue generation for that public authority. The Petitioner, notably, does not make any ofer to deposit any amount as security for any loss that may be sufered by MSRTC by a continuance of the stay. Indeed, Dr Saraf's instructions are that the Petitioners cannot (or will not) deposit or furnish any security. The Petitioners' own bid was of 36 Crores. No part of this is ofered as a deposit. The application for a continuation of the stay is rejected.
31. We clarify that in this order we have not thought it necessary to consider whether Respondent Nos. 6 and 7 are or are not disqualifed for the reasons the Petitioners say or otherwise. Undoubtedly MSRTC will follow the terms of the tender eiactly.
32. For statistical purposes, all ofce objections are to be removed and the Petition is to be fnally numbered within one week.
(Madhav J. Jamdar, J) (G. S. Patel, J) BHALCHANDRA GOPAL DUSANE Digitally signed by BHALCHANDRA GOPAL DUSANE Date: 2022.03.16 15:00:34 +0530 Page 12 of 12 14th March 2022