M/S. Rkd-Cmrgs Joint Venture vs Indian Port Rail & Ropeway Corporation on 19 August, 2020

[Cites 18, Cited by 0]

Orissa High Court

M/S. Rkd-Cmrgs Joint Venture vs Indian Port Rail & Ropeway Corporation on 19 August, 2020

Equivalent citations: AIR 2021 (NOC) 490 (ORI.), AIRONLINE 2020 ORI 166

This writ petition has been filed by M/s. RKD-CMRGS Joint Venture and M/s. CMRGS Infrastructure Projects Ltd. challenging the order of the opposite party-Indian Port Rail & Ropeway Corporation Ltd. rejecting the tender of the petitioner during technical evaluation, with a further prayer that the same be -2- set aside and bid of the petitioner be declared as technically responsive.

2. The facts in brief are that opposite party no.1-Indian Port Rail & Ropeway Corporation Ltd. invited tender on 11.2.2020 for the work of "A road-cum-flyover crossing the BOT rail track to have unobstructed access to the MCHP areas." The approximate cost of the tender/work was 28.92 crores. The bidders were required to submit the tender in cover one and cover two. The cover one should contain the technical bid and the cover two should contain the price bid. As per the said tender call notice, 18.3.2020 was fixed as the last date of submission of the bid. However, the opposite party no.1 vide various corrigendum and addendum extended it to different dates and the last date of submission of the bid was finally fixed as 24.6.2020 and the date of opening of the bid was fixed as 25.6.2020. Both the petitioner no.2 and M/s. RKD Infrastructure Pvt. Ltd.-two companies incorporated under the Companies Act, entered into a Memorandum of Understanding to participate in the bidding process as a Joint Venture in response to tender notice issued by the opposite party no.1. Bid submitted by the petitioner no.1 Joint Venture was rejected during technical evaluation due to non-submission of bid security in conformity with clause 19.7 of the Instruction for Bidder (for short- ITB).

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3. We have heard Mr. Ashok Mohanty, learned Senior Counsel for the petitioner and Mr. Partha Mukherjee, learned counsel for the opposite party Indian Port Rail & Ropeway Corporation Ltd.

4. Sri Ashok Mohanty, learned Senior Counsel appearing for the petitioner submitted that the opposite party has illegally rejected the technical bid of the petitioner on misinterpretation of clause 19.7 of the Instruction to Bidders (for short 'ITB') of the Bidding Documents. Even this clause stipulates that if the bid is submitted by the JV, the bid security should be in the name of Joint Venture and if the joint venture has not been legally constituted at the time of bidding, the bid security should be in the name of its partners. It is argued that the petitioner rightly submitted the bid security in two parts in conformity with clause-4 read with clause-19.7 of ITB, 51% via online transfer in the name of M/s. RKD Constructions Pvt. Ltd (lead partner) and balance 49% by way of exemption certificate in respect of petitioner no.2, which was registered with NSIC as MSME. The reason of rejection given by the opposite party is ambiguous, vague and contradictory, besides being contrary to tender conditions. Clause-19.3 of the ITB states that if any bid is not accompanied by an enforceable and compliant bid security, as required in accordance with ITB 19.1, it shall be summarily rejected by the Employer as non- responsive. In fact, the bid of the petitioner was accepted as technically qualified, which is evident from communication dated 15th July, 2020 (under Annexure-8 series at page-120). In fact, -4- tendering authorities even opened the price bid of the petitioners which is evident from the financial bid evaluation sheet at page-123. It is only thereafter that opposite party decided to reject the price bid of the petitioners.

5. Learned Senior Counsel submitted that the petitioner has not participated in the tender process as JV and therefore, the first part of Clause 19.7 of ITB is not applicable to them. Reliance is placed on Clause-4 of the Instructions to Bidder (ITB) which states that Bidder may be a natural person, private entity, government- owned entity, or any combination of them, with a formal intent to enter into an agreement or under an existing agreement in the form of a Joint Venture (JV). In case of Joint Venture, the JV shall not have more than two (2) partners; and shall submit MOU or Joint Venture Agreement, on Proforma given in Section 4. In case a Joint Venture is the successful bidder, the Joint Venture Agreement should be entered into by the Joint Venture partners. The duly signed Joint Venture Agreement should be submitted along with the Performance Security to the employer within 28 days after notification of the award of contract. While the first part of the clause 19.7 relates to an already formed Joint Venture, the second part relates to a situation where the Joint Venture has not been legally constituted at the time of bidding. It is not even the case of the opposite party that the petitioner at any point of time has submitted any Joint Venture agreement for participating in the tender. In that view of the matter, evaluation of -5- the tender of the petitioner on the premise of an already formed joint venture is beyond the tender terms and conditions. Relying on Clause-8 of MOU (Annexure-1 given in Form JV/4) which is captioned as 'Guarantees and Bonds', learned Senior Counsel argued that it provided that if Joint Venture has not been legally constituted at the time of bidding, the Bid Security shall be submitted in the name of all future partners through which Joint Venture is intended to be formed. It is contended that M/s. RKD Infrastructure Private Limited having 51% stake holder, the lead partner in the said proposed joint venture, has furnished the requisite cost of the bidding document and bid security proportionate to its participation as agreed in the MOU. M/s. CMRGS Infrastructure Projects Private Limited-petitioner no.2, having 49% participation in the proposed JV, was to bear its proportionate portion of the cost of the bidding document and bid security. Since the petitioner no.2 is a duly registered MSME unit, as per the "Public Procurement Policy for Micro and Small Enterprises Order, 2012", made applicable to the present tender, it is exempted from payment of bid security and tender cost. The petitioner no.2 has availed such exemption as per the tender conditions by uploading its MSME certificate and other relevant documents in accordance to the clause 19.3 of the tender condition.

6. Mr. Ashok Mohanty, learned Senior Counsel in order to explain the concept of 'joint venture' has relied on the decision of the -6- Supreme Court in New Horizons Limited Vs. Union of India, reported in (1995)1 SCC 478. Reliance is also placed on the judgment of the Supreme Court in Ramana Dayaram Shetty v. International Airport Authority of India, reported in (1979)3 SCC 489 to argue that the Supreme Court in that case held that the court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable. Reliance has also been placed on the judgment in the case of Central Coalfields Ltd. Vs. SLL-SML (Joint Venture Consortium), reported in (2016) 8 SCC 622, holding that the terms of NIT cannot be ignored as being redundant or superfluous. They must be given due meaning and the necessary significance.

7. Per contra, Sri Partha Mukherjee, learned counsel for the opposite party has submitted that as per clause 19.7 of the ITB, if the Bid is submitted by the JV, then Bid Security is required to be submitted either in the name of Joint Venture and if the joint venture has not been legally constituted at the time of bidding, the Bid Security shall be in the name of the lead partner of the JV. In the present case, the petitioner no.1 has applied for the tender in the name of the joint venture, which fact is categorically mentioned in paragraph-2 of the memorandum of writ petition. In paragraph-5 of the writ petition, the petitioner further admits that the petitioner no.2 submitted the bid on behalf of the joint venture. Referring to -7- Annexure-1 of the writ petition, it is argued that petitioner submitted the Memorandum of Understanding duly signed by two partners of the Joint Venture to the authorities. In clause-3 of the said MOU, it has been admitted that M/s. RKD Infrastructure Pvt. Ltd. shall be the lead member of the JV for all intents and purposes. Further at Annexure-3 dated 23.6.2020 at page-88 of the paper book, the petitioner after examining the bid documents accepted on Form PS 1 all the terms and conditions of the bid document and issued letter of acceptance to opposite party no.1. In the letter dated 2.7.2020 on Form JV/1 at page 90, M/s. RKD Infrastructure Pvt. Ltd. has categorically confirmed that "their company has formed a joint venture with opposite party no.2 by name of RKD CMRGS JV" "for the purposes associated with IFB" and in the same letter, further admitted that M/s. RKD Infrastructure Pvt. Ltd. will act as lead partner. Neither the Joint Venture nor the lead partner submitted the entire Bid Security. Only 51% of the bid security was paid by M/s. RKD Infrastructure Pvt. Ltd. and for the balance 49%, petitioner no.2 submitted an exemption certificate granted by NSIC. Even if the clause-8 of the MOU Annexure-1 is considered, neither the JV nor the lead partner has submitted the entire bid security. The tender evaluation committee on the opening of the technical bid found that neither the joint venture made the entire deposit of Bid Security nor the lead partner M/s. RKD Infrastructure Pvt. Ltd. made the entire deposit, nor even any certificate of exemption of the JV was uploaded. Therefore, the bid of the petitioner was rejected being technically not -8- qualified. Referring to the judgment of the Privy Council in Nazir Ahmed vrs. Kind Emperor reported in AIR 1936 PC 253(2), learned counsel argued that when a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.

8. Learned counsel for the opposite party argued that the second ground taken by the petitioner about the reasons of rejection not being intimated to them, is also without any substance. Clause 26.1 of ITB makes it very clear that any information relating to evaluation and examination and rejection shall not be disclosed to the bidders or any other person unless the contract is awarded and communicated to bidders. As regards the third ground taken by the petitioner that initially their technical bid was accepted but subsequently the bid was rejected, learned counsel for the opposite party argued that the copy of the document under Annexure-8 at page 120 is an auto generated mail from the Government e- procurement system. That portal is being maintained by the Government of India e-tender department and the opposite party has no role to play in that. The email message in document Annexure-8 might have been generated from the said portal due to a technical glitch. But the opposite party has clarified this aspect in their affidavit annexing the correct document whereby the technical bid evaluation committee uploaded the result "Bid Opening Summary" on the website on the same day i.e. 17th July, 2020 at 11.15 A.M. in which status of the Bid of the petitioner has been clearly mentioned -9- as "Not Admitted". Bid of the present petitioners was thus technically not qualified. A mail was also sent to the petitioner on the same day wherein it has been clearly mentioned that their bid was not accepted.

9. Mr. Partha Mukherji, learned counsel submitted that Supreme Court has consistently held that superior courts should not interfere in matters of tenders unless substantial public interest is involved or the transaction is mala fide. In support of this argument, reliance is placed on judgment of the Supreme Court in Raunaq International Ltd. vs. I.V.R. Construction Ltd., (1999) 1 SCC 492. In Air India Limited Vs. Cochin International Airport Ltd., (2000) 2 SCC 617, the Apex Court stressed the need that courts must proceed with great caution while exercising their discretionary powers and should exercise these powers only in furtherance of public interest and not merely on making out a legal point. In B.S.N. Joshi & Sons Ltd., vs. Nair Coal Services Ltd., 2006(11) SCC 549, it was held that it is not always necessary that a contract be awarded to the lowest tenderer. It must be kept in mind that the employer is the best judge therefore the same ordinarily being within its domain. Therefore, the court's interference in such mattes should be minimal. Reliance was also placed on judgment of the Supreme Court in Jagdish Mandal vs. State of Orissa, 2007 (14) SCC 517 wherein it was held that the power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to -10- decide contractual disputes. Lastly, relying on judgment of the Supreme Court in Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd., 2016 (16) SCC 818, learned counsel argued that a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a Constitutional Court to interfere.

10. We have given our anxious consideration to rival submissions, studied the cited judgments and examined the material on record.

11. What is undeniable and which is also the categorical case set up by the petitioners in para-2 of the memorandum of the writ petition is that petitioner no.1 is joint venture of two companies namely, petitioner no.2-M/s. CMRGS Infrastructure Projects Ltd and another M/s. RKD Constructions Pvt. Ltd., both incorporated under the Companies Act with the Registrar of Companies, Odisha. Both are engaged in the business of executing various civil construction works. These two companies have entered into a memorandum of understanding for joint venture participation in the present tender process as per conditions of the tender. Petitioner no.2 has been given power of attorney by the Joint Venture to submit the tender and do all necessary acts in relation thereto. The petitioners are represented through the deponent, who is the Managing Director of petitioner no.2 Company and authorized signatory on behalf of the petitioner no.1- joint venture and a citizen of India. Memorandum of Understanding -11- for JV between the lead partner M/s. RKD Infrastructure Pvt. Ltd and petitioner no.2-M/s. CMRGS Infrastructure Projects Ltd. has been placed on record at Annexure-1 series. Clause-2 of the MOU clearly states that the parties have studied the documents and have agreed to participate in submitting a bid jointly in the name of RKD - CMRGS(JV). Clause-3 of the MOU states that M/s. RKD Infrastructure Private Limited shall be the lead member of the JV for all intents and purpose and shall represent the Joint Venture in its dealing with the Employer. Clause-4 states that share of the lead partner would be 51%.

12. Before adverting to merits of the case, we deem it appropriate to remind ourselves of the position of law with regard to scope of jurisdiction of this Court in the matter of award of contracts by the Government and its instrumentalities. The Supreme Court in the celebrated judgment in Tata Cellular Vs. Union of India, (1994) 6 SCC 651, delineated the scope of interference by the Constitutional Courts in the matter of Government Contracts/Tenders by observing that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. There are however inherent limitations in exercise of that power of judicial review. Government is always the guardian of the finances of the State and it is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government, but the principles -12- laid down in Article 14 of the Constitution have to be kept in view while accepting or rejecting a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation and the right to choose cannot be considered to be an arbitrary power. The judicial power of review is exercised to rein in any unbridled executive process. The Supreme Court held that it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The power of judicial review is not an appeal from the decision and therefore, the Court cannot substitute its decision since the Court does not have the necessary expertise to review. Apart from the fact that the Court is hardly equipped to do so, it would not be desirable either. However, where the selection or rejection is arbitrary, certainly the Court would interfere. But it is not the function of a Judge to act as a superboard, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator.

13. In Air India Ltd. Vs. Cochin International Airport Ltd. & Ors., (2000) 2 SCC 617, while relying on its several earlier decisions on the law relating to award of contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government, the Supreme Court observed as under:

"7. ..................... The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial -13- considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene."

14. The Supreme Court in Jagdish Mandal Vs. State of Orissa & Others, (2007) 14 SCC 517, has also dealt with the scope of interference in contractual matters by the Constitutional Courts and held that while invoking power of judicial review in matters relating to tenders /contracts, certain special features should be borne in mind that evaluation of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, the courts will not interfere by exercising power of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private -14- interest at the cost of public interest, or to decide contractual disputes. Tenderer or contractor with a grievance can always seek damages in a civil court. Interference in tender or contractual matters in exercise of power of judicial review is permissible only if :

(i) the process adopted or decision made is mala fide or intended to favour someone, or (ii) the same is so arbitrary and irrational that no responsible authority acting under law could have arrived at it, or (iii) it affected the public interest. The purpose and scope of judicial review is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides, its purpose is to check whether the choice or decision is made "lawfully" and not to check whether the choice or decision is "sound".

15. The Supreme Court, in the case of Siemens Public Communication Networks Pvt. Ltd. & Anr. Vs. Union of India & Ors., (2008) 16 SCC 215 while dealing with the scope of judicial review of the constitutional courts, held that in matters of highly technical nature, a high degree of care, precision and strict adherence to requirements of bid is necessary. Decision making process of Government or its instrumentality should exclude remotest possibility of discrimination, arbitrariness and favoritism. It should be transparent, fair, bona fide and in public interest. However, the Supreme Court clearly held therein that it is not possible to rewrite entries in bid document and read into the bid document, terms that did not exist therein, nor is it permissible to improve upon the bid -15- originally made by a bidder. Power of judicial review can only be exercised when the decision making process is so arbitrary or irrational that no responsible authority acting reasonably or lawfully could have taken such decision, but if it is bona fide and in public interest, court will not interfere with the same in exercise of power of judicial review even if there is a procedural lacuna. Principles of equity and natural justice do not operate in the field of such commercial transactions.

16. The Supreme Court in the case of Meerut Development Authority Vs. Association of Management Studies & Anr., (2009) 6 SCC 171, held that the tender is an offer, which invites and is communicated to notify acceptance. It must be an unconditional, must be in the proper form, and the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to a judicial scrutiny because the invitation to tender is in the realm of contract. Only a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. The bidders have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tender in a transparent manner and free from hidden agenda. The authority has the right not to accept the highest bid and even to prefer a tender -16- other than the highest bidder, if there exist good and sufficient reasons. The action taken by the authorities in awarding contracts can be judged and tested in the light of Article 14 of the Constitution of India and the Court cannot examine details of the terms of the contract entered into by public bodies or State. The Court has inherent limitations on the scope of any such enquiry.

17. Adverting now to merits of the case in hand, while the petitioner relies on Clause-4.1 of ITB and clause-8 of the MOU, the argument of the opposite party is that bid security has not been submitted according to clause 19.3 and 19.7 and therefore the tender of the petitioner was rejected as technically non-responsive. In order to better appreciate the rival arguments, Clauses 4.1, 19.3 and clause 19.7 of the ITB and clause-8 of the MOU are reproduced hereunder:-

"4.Eligible Bidders:

4.1 Bidder may be natural person, private entity, government-owned entity, or any combination of them with a formal intent to enter into an agreement or under an existing agreement in the form of a Joint Venture (JV).

The bidder must ensure the following:

(a) In case of Single Entity:

Submit Power of Attorney authorizing the signatory of the bid to commit the bidder.

(b) In case of Joint Venture:

(i) The JV shall not have more than two (2) partners;

(ii) Submit MOU or Joint Venture Agreement, as Proforma given in Section 4.

(iii) The JV shall nominate a Representative through Power of Attorney (Form given in Section 4) who shall have the -17- authority to conduct all business for and on behalf of any and all the parties of the JV during the bidding process and, in the event the JV is awarded the Contract, during contract execution.

(iv) Submit Power of Attorney by individual partners to lead partners as per form given in Section 4.

(v) In case a Joint Venture is the successful bidder, the Joint Venture Agreement should be entered by the Joint Venture partners. The duly signed Joint Venture Agreement should be submitted along with the Performance Security to the employer after notification of the award of contract within 28 days.

19.3 Any bid not accompanied by an enforceable and compliant bid security, as required in accordance with ITB 19.1, shall be summarily rejected by the Employer as non-responsive. No exemption under any circumstances shall be considered for non- submission of bid security by the bidder."

19.7. The Bid Security of a JV shall be in the name of the JV that submits the bid. If the JV has not been legally constituted at the time of bidding, the Bid Security shall be in the names of lead partner of the JV.

Clause-8. Guarantees and Bonds.

The Bid Security of a JV shall be in the name of the JV that submits the bid. If the JV has not been legally constituted at the time of bidding, the Bid Security shall be in the names of all future partners through which JV is intended to be formed."

18. According to Clause 4.1, bidder may be a natural person, private entity, government-owned entity, or any combination of them, -18- with a formal intent to enter into an agreement or under an existing agreement in the form of a Joint Venture. Sub-clause (b)(i) of Clause 4.1 provides that the JV shall not have more than two(2) partners and its Sub-clause (b) (ii) further provides that JV shall submit MOU or Joint Venture Agreement, as per Proforma given in Section 4. Clause 4.1 (b)(iv) requires the JV to submit the Power of Attorney by individual partners to lead partners as per form given in Section-4 of the bid documents. Clause 4.1(v) provides that in case a Joint Venture is the successful bidder, duly signed Joint Venture Agreement should be submitted along with the Performance Security to the employer within 28 days after notification of the award of contract. It would therefore be clear from Clause 4.1 that it is not necessary that JV agreement should be submitted in advance for "any combination of them with a formal intent to enter into an agreement or under an existing agreement in the form of a Joint Venture".

19. There is thus no warrant on language of Clause 4.1 supra for the interpretation that the MOU (as per Proforma given in Section

4) entered into by the M/s. RKD Infrastructure Pvt. Ltd. and petitioner no.2 could not be taken as an existing arrangement in the form of Joint Venture. In any case, the MOU of JV at Annexure-1 would suffice the formal intent of parties to enter into an agreement to form a Joint Venture. As per clause-3 of the MOU, the parties agreed to nominate Sri Chitta Ranjan Swain as leader duly authorized to sign and submit all the documents and subsequent clarifications, if -19- any, to the Employer. He signed the Price Bid in the capacity of authorized signatory of the Joint Venture. In Form :PS 2 dated 23.6.2020 at page-89 of the paper book, the bid documents have been duly signed by Sri Chitta Ranjan Swain on behalf of the JV, under the seal and signature of RKD-CMRCS. In Form No. JV/1 at page-90, duly signed by Managing Director of M/s. RKD Infrastructure Ltd., it has been categorically stated that "we wish to confirm that our company has formed a Joint Venture by name of RKD CMRGS JV with for the purposes associated with IFB referred to above.". Further it has been stated in paragraph-2 of the said letter that "in this group we act as leader and, for the purposes of applying for qualification, represent the Joint Venture." On form JV/1 at page-92, proforma letter of participation from each partner of Joint Venture(JV) has been given. On form FIN-2 at page 93 Annual Construction Turnover for the last 5 years of the lead partner of JV-RKD Infrastructure Pvt. Ltd. has been given. There are many more such documents on record which substantiate an agreement between these two companies to form a Joint Venture. In the face of all this overwhelming documentation, there is no scope for the argument that there was no formal intent of the parties to enter into an agreement to form a Joint Venture.

20. Analysis of various documents on record substantiates intention of the parties to participate in the bidding process as a Joint Venture. Examined from the perspective of all the aforesaid -20- documents, the argument of the petitioner that they have participated in the bidding process only individually and separately and not as a Joint Venture and therefore, Clause 19.7 is not applicable to them, is liable to be rejected. Moreover, the petitioner no.1 M/s. RKD-CMRGS Joint Venture in the present writ petition is none other than the Joint Venture and petitioner no.2 is its partner M/s. CMRGS Infrastructure Private Limited, lead partner M/s. RKD Infrastructure Pvt. Ltd., having not joined the present petition as a writ petitioner.

21. In the case of Central Coalfields Limited & Anr. Vs. SLL-SML (Joint Venture Consortium) & Anr., (2016) 8 SCC 622, the Supreme Court while dealing with the matter of Government Contract/tenders, held that the Court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable. The deviation from terms and conditions of NIT is permissible so long as level playing field is maintained and it does not result in any arbitrariness or discrimination. Whether a term of NIT is essential or not is a decision taken by the employer, which should be respected, and soundness of that decision cannot be questioned by the Court. Applying the principle that "where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all". It was held that if the employer prescribes a particular format of the bank guarantee to be furnished, then a bidder ought to submit -21- the bank guarantee in that format only and not in any other format. It is not for the employer or court to scrutinize every bank guarantee to determine whether it is stricter than the prescribed formant or less rigorous and the goalposts cannot be re-arranged or asked to be re- arranged during the bidding process to affect the right of some or deny a privilege to some. Rejecting the argument of the respondents therein that the Central Coalfields Ltd. has deviated from the terms of the NIT and GTCs with regard to submission of bank guarantee in the prescribed format on the ground that this was non-essential, the Supreme Court held as under:

"28. The first and the foremost aspect of the case that must be appreciated is that, as mentioned above, JVC was certainly not computer illiterate. Like every bidder, it was required to have a Digital Signature Certificate which clearly indicates that any bidder (including JVC) had some degree of comfort with e-tenders and the use of computers for bidding in an e- tender. It is this familiarity that enabled JVC to access the "incorrect" format of a bank guarantee. Under these circumstances, it is extremely odd that JVC was not able to access the correct and prescribed format of the bank guarantee. The excuse given by JVC that NIT was vague and that it was not clear which was the prescribed format of the bank guarantee appears to be nothing but a bogey. A simple reading of the GTC and the terms of the bank guarantee would have been enough to indicate the correct prescribed format and the "incorrect" format."

22. The Supreme Court in the case of G.J. Fernandez v. State of Karnataka, (1990) 2 SCC 488, relying on its earlier decision in Ramana Dayaram Shetty (supra) categorically held that "the party issuing the tender (the employer) has the right to punctiliously and rigidly" enforce the terms of the tender. If a party -22- approaches a court for an order restraining the employer from strict enforcement of the terms of the tender, the court would decline to do so. It was also reaffirmed that the employer could deviate from the terms and conditions of the tender if the "changes affected all intending applicants alike and were not objectionable".

23. In Montecarlo Ltd. Vs. National Thermal Power Corporation Ltd., (2016) 15 SCC 272, the appellant participated in the tender process pursuant to the NIT issued by respondent and as the appellant did not meet with technical qualifications prescribed, his bid was treated non-responsive. The appellant approached the High Court challenging action of respondent, but the High Court declined to interfere. The Supreme Court held that judicial review of decision making process is permissible only if it suffers from arbitrariness or mala fides or procedure adopted is to favour one. But if decision is taken according to language of tender document or decision sub-serves purpose of tender, then courts must exercise principle of restraint. Technical evaluation or comparison by courts would be impermissible. Principles of interpretation of tender documents involving technical works and projects requiring special skills are different from interpretation of contractual instruments relating to other branches of law. It was held that the tender inviting authorities should be allowed to carry out the purpose and there has to be free hand in exercising discretion. Tender inviting authorities have discretion to enter into contract under some special -23- circumstances and there has to be judicial restraint in administrative action. The courts do not have expertise to correct administrative decisions and if courts are permitted to review such decisions then courts are substituting their own view without there being necessary expertise, which may be fallible. If decision is bona fide and is in public interest, courts would not interfere even if there is procedural aberration or error in assessment or prejudice to tenderer.

24. The Supreme Court in AFCONS Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. & Anr., (2016) 16 SCC 818, relying on its various earlier decisions reiterated the well settled principle of law that decision in accepting or rejecting bid should not be interfered with, unless the decision making process suffers from mala fides or is intended to favour someone. Interference is also permissible if the decision is arbitrary or irrational, or is such that no responsible authority acting reasonably and in accordance with law could have reached such a decision. Further, perversity of a decision making process or decision and not merely faulty or erroneous or incorrect, is one of grounds for interference by courts. Constitutional courts are expected to exercise restraint in interfering with administrative decision and ought not to substitute their view for that of administrative authority. Constitutional courts must defer to this understanding and appreciation of tender documents unless there are mala fides or perversity in understanding or appreciation or in application of terms of tender conditions. Different interpretation -24- given by authority which is not acceptable to court is no ground for constitutional courts to interfere with interpretation of authority unless it is proved to be perverse or mala fide or intended to favour a particular bidder. Relying on the decision of the Ramana Dayaram Shetty (supra), in paragraphs 14 and 15 of the report, the Supreme Court clearly observed as under:

"14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous -- they must be given meaning and their necessary significance. In this context, the use of the word "metro" in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.

15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given".

25. The Supreme Court in JSW Infrastructure Ltd. & Anr. Vs. Kakinada Seaports Limited & Ors., (2017) 4 SCC 170, has held that the words used in the NIT cannot be treated to be surplusage or superfluous or redundant. They must be given some meaning and weightage and courts should be inclined to suppose that every word is intended to have some effect or be of some use. Rejecting words as insensible should be last resort of judicial -25- interpretation and as far as possible, courts should avoid construction which would render words used by author of document meaningless and futile or reduce or silence any part of document and make it altogether inapplicable. If interpretation of tender documents adopted by tender inviting authority suffers from mala fide or perversity then only courts can interpret documents. Interpretation given by tender inviting authority not acceptable to courts is no reason for interfering with interpretation adopted by the authority.

26. In the instant case, the tender condition as per Clause 19.3 of the ITB, provides as under:

"19.3. Any bid not accompanied by an enforceable and compliant bid security, as required in accordance with ITB 19.1, shall be summarily rejected by the Employer as non-responsive. No exemption under any circumstances shall be considered for non-submission of bid security by the bidder."

According to above quoted clause, the bid must be accompanied by enforceable and compliant bid security in accordance with clause 19.1 of the ITB. Clause 19.1 specifically provides that the Bidder is required to furnish as part of its bid, a bid security in original form and for the said amount of Indian rupees as specified in the BDS.

Clause 19.2 provides that the bid security shall be, at the Bidders option, in any of the following forms (a) A Cashiers or Banker's certified cheque or Bank draft drawn on a Scheduled/nationalized Bank in India in favour of "Indian Port Rail and Ropeway Corporation Limited" payable at Mumbai; or (b) An unconditional bank guarantees using the Form given in Section 4: Bidding Forms. The bank guarantee shall be from a bank having minimum net worth of over INR 500 million from the -26- specified banks. Conjoint reading of all the sub-clauses of Clause 19, including clause 19.3 makes it mandatory for every bidder to submit the bid with enforceable and compliant bid security and failure to do so would make the bid liable to be summarily rejected as non-responsive.

27. The contention of the learned Senior Counsel appearing on behalf of the petitioner is that the bid of the petitioner was initially accepted as technically qualified, as is evident from the communication sent to him by email dated 15th July, 2020 at page 120 under Annexure-8 series stating that "you are informed that your bid for the above tender has been accepted during Technical evaluation by the duly constituted committee and the financial bid opening of the tender has been fixed on July 17, 2020 11.00 A.M.". Thereafter, the opposite party could not have rejected the technical bid on 17th July, 2020. However, this has been clarified by the opposite party stating that the said email dated 15.07.2020 under Annexure-8 at page 120 is an auto generated mail from the Government e-procurement portal being maintained by the Government of India e-tender Department and that the opposite party has no role to play therein. The said email might have been generated due to a technical glitch. It is further clarified that the technical bid evaluation committee uploaded the result "Bid Opening Summary" on the website on the same day i.e. 17th July, 2020 at 11.15 A.M. On a careful consideration of the documents at Annexure-8, the explanation of the opposite party merits acceptance, because in the last part of the email -27- communication dated 15-Jul-2020, on which the petitioner is relying, there is a Note at the bottom, which reads as under:-

"Note: This is an auto generated mail from the e-procurement system. Please do not reply to this e-mail id."

28. A similar argument was considered by the Division Bench of this Court in the case of M/s. GDCL- KRISHNA-TCPL JV. Vs. State of Odisha & Others, reported in 2017 SCC Online Ori 654, and the same has been rejected by observing as follows:

"19. The technical bids from all the bidders were downloaded from the website by the authorized officer of the Board on 01.08.2016 for verification and evaluation. The process of verification of documents electronically downloaded from the website was to be done manually and so is the process in case of evaluation of technical bids. The process of verification and evaluation was running concurrently and the bidders were communicated from time to time after 01.08.2016 for providing various clarifications to complete the manual process of verification as well as evaluation of technical bid. The evaluation committee sat twice on 30.08.2016 and 19.09.2016 to finalize the list of eligible bidders based on the date available in the technical bid and additional information provided by the bidders between the period 01.08.2016 and 19.09.2016. Two processes were completed on 19.09.2016, i.e., completion of verification of authenticity of all the technical bid documents submitted by all the bidders with the additional documents provided during the above period and completion of evaluation process and issued all minutes of evaluation committee held on 19.09.2016. Therefore, all the technical bids were clear by allowing all of them as "admitted". At the first instance, the process of admission was carried out in the system in respect of all the bidders. Then, the result of evaluation was uploaded in the programme website. The whole process was completed in about an hour or so. In case of each operation, a programme generated e-mail and is automatically sent to all the bidders for their information. Therefore, the contention raised that on 19.09.2016 at 5.43 p.m. the bid has been admitted and on the very same day, i.e., on 19.09.2016 at 7.06 p.m. the petitioner JV has been communicated that the tender has been rejected during the technical evaluation, no infirmity can be found for such communication. More particularly, as per clause-3.1.9 of RFP after the communication of the result, there is no -28- provision to communicate the bidder with regard to any query or clarification in case of failure of bidder to qualify."

(emphasis added) [para 19 of the original judgment]

29. In the instant case also, clause 26.1 of the ITB categorically provides that any information relating to evaluation and examination and rejection shall not be disclosed to the bidders or any other person unless the contract is awarded and communicated to bidders. Therefore, if an auto generated email has been sent to the petitioner due to glitch in the system, it cannot be said that the technical bid of the petitioner was accepted by the Technical Bid Evaluation Committee. The result of the four bidders was uploaded in the system at 11.15 A.M. on 17th July, 2020, wherein the bid of the other three bidders found to be technically responsive, whereas bid of the petitioner was shown as "Not Admitted". An email was also sent to the petitioner on the same day under Annexure-9 series at 11.17 A.M. on 17th July, 2020 at page 122 of the petition, wherein it is clearly mentioned that "It is to inform you that your bid 173880 has been opened and updated summary by the duly constituted committee. Your bid has been Not Admitted by the committee and for further information you are asked to get in touch with the Tender Inviting Authority (TIA)". (emphasis supplied)

30. In the fact situation obtaining in the case, decision of the opposite party in respect of the technical bid of the petitioner as non- responsive can neither be said to be mala fide or intended to favour -29- someone. It cannot be termed to be so arbitrary or irrational which no responsible body of person acting under law could have arrived at. It is settled proposition of law that when power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. If as per conditions of the NIT, bid security in the case of tender submitted by JV was required to be given wholly either by the JV or the lead partner, the bidder ought to submit bid accordingly and not in any other manner. It is trite that words used in the tender documents as conditions for acceptability of technical bid have to be construed in the way the Employer has used them while formulating such terms and conditions. Whether a particular condition is essential or not is a decision to be taken by the Employer. The tender inviting authorities have to be given free hands in the matter of interpretation of conditions of the tender. No words in the tender documents can be treated surplusage or superfluous or redundant. Their decision has to be respected by the court unless it is shown to be ex-facie arbitrary, outrageous, and highly unreasonable. If non-submission of a compliant bid security as per mandatory conditions of the terms of the NIT, results in tender of the bidder being rendered non-responsive, the court cannot substitute the opinion of the Employer by its own unless interpretation of such condition by the tender inviting authority suffers from mala fides or perversity.

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31. In view of foregoing discussions, the writ petition being devoid of merit, is liable to be dismissed and is accordingly dismissed.

There shall be no order as to costs.

      (DR. A.K.MISHRA)                              (MOHAMMAD RAFIQ)
         JUDGE                                        CHIEF JUSTICE




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