Calcutta High Court (Appellete Side)
Ardeshir B. Cursetjee & Sons Ltd. & Ors vs The West Bengal Power Development ... on 5 July, 2017
Author: Subrata Talukdar
Bench: Subrata Talukdar
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
PRESENT:
The Hon'ble Mr. Justice Subrata Talukdar
W.P. 27449(W) of 2015
Ardeshir B. Cursetjee & Sons Ltd. & Ors.
-Vs-
The West Bengal Power Development Corporation Ltd.
& Ors.
For the Petitioners : Mr. Partha Sarathi Sengupta
Mr. Debdatt Sen
Mr. Soumik Kanti Chakraborty
Mr. Rishav Dutt
Mr. Suman Bhahma
For the Respondent No.1 : Mr. Jishnu Chowdhury
Mr. Arif Ali
Mr. Sandip Dasgupta
Mr. Ravitez Chilumuri
For the Respondent No.4 : Mr. Tilak Bose
Mr. Amitesh P. Roy
Heard on : 28/04/2017
Judgement on : 05/07/2017
Subrata Talukdar, J.:
At issue in this writ petition is the e-tender notice dated 6th August, 2015 invited on behalf of the respondents/the West Bengal Power Development Corporation Ltd. (for short WBPDCL) for undertaking the job of maintaining the desired channel to ensure steady supply of water by dredging of the river Rupnarayan around the Dolphin Mouth of the Intake Pump House of Kolaghat Thermal Power Station, Mecheda, Paschim Medinipur.
The writ petitioner No.1/company, also represented by its Director/writ petitioner No.2, (for short WP-I and WP-II) have been the existing contractors for the dredging job as aforesaid for the past 8 years. The writ petitioners are aggrieved by the award of the e-tender in favour of the respondent No.4/Tebma Marine Pvt. Ltd. (for short only R4 or the R4/company) inspite of the alleged fact that R4 failed to meet the specific condition of the tender which, being No.2(viii) reads as follows:-
"The entire dredger must be owned by the bidder."
It is submitted by Mr. Partha Sarathi Sengupta, Ld. Senior Counsel for the writ petitioners, that although R4 did not own the two dredgers mandatory for participating in the contract, nonetheless the contract was awarded to R4. Mr. Sengupta particularly relies upon a communication dated 22nd of February, 2016 issued by WBPDCL in favour of R4 which, inter alia, states that R4 should forthwith furnish the details of its ownership of the two dredgers deployed to facilitate the clearance of its bills.
On the basis of the above noted correspondence dated 22nd February, 2016, which has been the subject matter of intense exchanges between Ld. Counsel for the parties at the hearing, Mr. Sengupta argues that R4 was granted the contract notwithstanding the lack of transparency in establishing its ownership of the dredgers in issue.
Mr. Sengupta points out that the Minutes of the pre-bid meeting between WBPDCL and the interested bidders would show that the query arose at the meeting by the representatives of R4 as to whether the ownership of the dredgers is a mandatory condition. Such query was answered in the affirmative by the representatives of WBPDCL. However, since R4 could not establish ownership of the dredgers prior to grant of the work order in its favour at the end of 2015 and, the dredgers subsequently shown by R4 also did not match up to the Special Conditions of Contract of which, Clause 2.6 provides for deployment of dredgers with a minimum total capacity of 650 cum of solid/hr and individual capacity of dredgers shall not be less than 150 cum of solid/hr at mean working condition, the award of the contract to R4 was patently illegal.
The pleadings relied upon by Mr. Sengupta, inter alia, allege that R4 submitted fabricated documents in support of the ownership of the dredgers in order to mislead WBPDCL to award the contract in its favour. The several pleadings, as referred to above, making particular mention of the invoices dated 31st March, 2003 and 23rd March, 2006 as compared to recent invoices of 2015 presented in this lis by the petitioners, demonstrate that R4 was not the owner of the dredgers at the time of the opening of the technical bid on 28th November, 2015.
Mr. Sengupta further points out that the hurry in awarding the contract in favour of R4 is evident from the fact that the technical bid was downloaded on the website of WBPDCL after 11 pm on 28th November, 2015 and, the next morning itself, i.e. 29th November, 2015, the financial bid was opened.
The financial bid rated the offer of R4 at Rs. 2 crores and odd approximately below the offer of WP-I and, accordingly, the tender stood awarded in favour of R4.
Mr. Sengupta submits that it is impermissible for an authority such as WBPDCL to tweak a public tender in favour of R4 and, the award of the contract ought to have been rescinded. Inspite of due diligence shown by the petitioners by approaching the Hon'ble Vacation Bench of this Court in November, 2015 itself, the award of the tender was not stayed since the Hon'ble Court was informed that the work order had already been issued on the 16th of October, 2015 in favour of R4.
However, on obtaining the correspondence dated 22nd of February, 2016 (supra) calling upon R4 to submit documents in support of the ownership of the dredgers, the writ petitioners mentioned this matter for early disposal considering that the entire period of the contract would stand concluded at the end of two years from the date of its issue in November, 2015.
Mr. Jishnu Chowdhury, Ld. Counsel for WBPDCL, urges this Court to take a pragmatic view of the contract conditions. Relying on several documents connected to the contract negotiations, Mr. Chowdhury points out that it was never a term of the contract that the ownership of the dredgers is required to be proved at the threshold itself. Mr. Chowdhury argues that with the progress of the contract work and, at a time when the bills of R4 became due and payable, WBPDCL rightly called upon R4 to furnish documents in support of its ownership of the dredgers. Mr. Chowdhury argues that since the issue connected to the ownership of the dredgers was brought to the notice of WBPDCL by the writ petitioners, R4, being the successful tenderer was called upon to submit the necessary documents in support of the eligibility criteria as already claimed by it during the bidding process.
R4 responded to the queries raised by WBPDCL by submitting the registration certificate of the two dredgers as well as an affidavit by its Executive Officer to the effect that R4 is the lawful owner of the dredging machines and undertakes to be liable for facing any civil and/or criminal action in the event such action is instituted.
Relying on the decision In Re: Tata Cellular reported in 1994 (6) SCC 651, Mr. Chowdhury makes the point that none of the conditions which make a contract liable to be struck down are satisfied in the facts of the present case.
Ld. Counsel for WBPDCL further submits that the price quoted by R4 was well below the rate quoted on behalf of WP1 and, therefore, a substantial amount stood saved from the public exchequer. Furthermore, WP-I was holding a monopoly over the contract work for the past 8 years and, therefore, the decision to award the tender in favour of R4 has created an environment of healthy competition.
Relying on the principal argument that the Notice Inviting Tender (NIT) does not require ownership documents to be submitted along with the bid, Mr. Chowdhury points out that the mandatory conditions connected to the bid were duly complied with by R4 by submitting details through a Proforma VI as also the registration certificate of the dredgers from Kolkata Port Trust (KPT). Ultimately R4 acted in terms of the undertaking on affidavit of its Executive Officer and submitted the required documents of ownership facilitating not only the smooth payment of bills but also the contracted work which has now successfully run its major course. Therefore, Mr. Chowdhury submits that in public interest this Court should not interfere with the decision making process.
Appearing on behalf of R4, Mr. Tilak Bose, Ld. Senior Counsel relies upon the decision In Re: J. Fernandez reported in 1990 (2) SCC 488 to make the point that unless there is a spectacular infraction of the conditions of the NIT, a Writ Court should not normally interfere in a decision which purely lies within the realm of the expert administrative body.
Mr. Bose argues that the NIT was simply in the form of a notice and, merely outlined the essential conditions which were necessary to be an eligible tenderer in the eyes of WBPDCL. Since the minimum eligibility of R4 was found to be in order, as also qua WP-I, WBPDCL proceeded to finalise the financial bid where R4 emerged as the lowest bidder(L1). Accordingly, reading the financial bid of R4 along with its technical eligibility, additionally acquired from the execution of several similar works with other authorities, WBPDCL came to the finding that R4 deserved to execute the work at a rate beneficial to the public exchequer.
Describing the communication dated 22nd February, 2016 (supra) as a leverage employed by the writ petitioners to gain advantage in this lis, Mr. Bose reiterates the stand taken by Mr. Chowdhury that, as the tender progressed beyond its basic eligibility criteria, R4 demonstrated to the complete satisfaction of WBPDCL its compliance with all tender norms.
Mr. Bose questions the availability of the documents relied upon by the writ petitioners in support of their case, on the ground that such documents are purely intended to be inter se communication between WBPDCL and R4. Under the e-tender system such communication is not in the public domain and, therefore, has been questionably obtained and used by the writ petitioners for the purpose of promoting its monopoly thus far over the contracted job. In any view of the matter, at this stage, with the work having been executed for nearly 20 out of the 24 months of the contract period, no relief can either be claimed or extended in favour of writ petitioners.
Having heard the parties and carefully considering the materials placed, this Court arrives at the following findings:-
A) That the Clause in the NIT seeking ownership of the dredgers by the participating bidders contained a purpose. The purpose, to the mind of this Court, relates to the avoidance of a situation where a dredger not fully owned or, under the control of the successful tenderer, is likely to be diverted and/or impounded at the behest of its actual owner. Such apprehended action on behalf of the actual owner of the dredgers in issue is likely to precipitate a grave situation whereby the clear flow of the water channel to the intake pump of Kolaghat Thermal Power Station stands to be compromised leading to adverse effects on the power station itself. Therefore, in order to ensure regularity and control over the contracted work, WBPDCL, in its wisdom, imposed the condition of ownership of the two dredgers.
B) Along with the condition of the ownership of the two dredgers this Court also finds that the Special Conditions of Contract, being Clause 2.6, requiring the dredgers to be of a minimum total capacity also had a purpose. The dredging capacity directly influenced the scope of the contracted work and, therefore again has a direct impact on the viability of the operation at the Kolaghat Thermal Power Station. C) From the Original Records on the issue as seen from File No. COPRJ14210025 produced before this Court at the hearing on demand by Ld. Counsel for WBPDCL, the following notings, among others, on a chronological basis hold relevance for the present discussion:-
¾ "The following committee may be approved for evaluating the technical bids of the Dredging contract of DTPS. (1) SL S.K. Basak Chairperson (2) SL P. Ghosh DGM (Civil) (3) SL Debasish Bhattacharya D6M(MLC) (4) SL D. N. Chatterjee Consultant (FLA)/SL D. Adya DGM (FLA) Indranil Dutto 22/9/15 The technical bids have been evaluated by the Committee and proposes the bidders, M/s. Tebma Marine Pvt. Ltd. and M/s. Ardeshir B. Cursetyee & Sons Ltd., as qualified whereas M/s. Safeway Dredging Enterprises is not qualified.
The Committee Report is placed with the file for kind perusal and obtaining approval for opening of price of bids of qualified bidders.
Enclo: As above. Sd/-
Indranil Dutto 28/09/2015
28/09/2015
(1) A Committee as approved by CMD (Pg 4) have evaluated the technically qualified bidders to be two i.e. Tebma & Ardeshir. Their signed report is placed in file but give pages are not numbered, it is marked as 'Seen' by u/s.
(2) It was an e Tender & based on price submitted, Tebma Mardeshir's price of 10.69 cr appears to be L1 - as it was on total cost basis, it must be made clear that such price includes applicable taxes. This needs to be classified so that no issues arise later.
(3) It is noted that the L1 Party had raised minutes of issues with requests to not conform to conditions specified. It is suggested that prior to issue of order, de4clasation is taken confirming acceptance & withdrawal of their objections. (4) Particular attention is invited & it is suggested to physically verify"
a) The entire dredger must be owned by the bidder - this needs to be eveclued so that no future issues arise.
b) Party (L1) has proposed two 400mu/hr capacity dredgers owned actually have such capacity may be ensured prior to issuing order.
c) Commission from any other resell shall not be accepted - this may be verified.
As this is a contract of significant importance the technical team may see if 400mu/hr capacity dredger can work is pond Area etc. This is suggested as measure of abundant caution from F & A as well as Audit Perspective in the interest of the Co. Ps. Many papers notesheets are Xerox copy.
Sd/-
30/9/2015 Director/F 7 A/RA Pl clarify the points raised by GM (F & A)- above, which are very partinant, particulars 3 (a), (b) & (c) above. Indranit Dutto 30/9/2015 GM (Civil) Please clarify from the agency.
Sd/-
01/10/2015 ¾ In response to the quarries send to the bidder via e-mail on dated 30.09.2015. M/s. Tebma Marine Pvt. Ltd. replied through their letter ref. No. TMPL/TDR/WBPDCL/NIT/Camp at dt. 01.10.2015. as per the letter.
i) The agency confirmed the rate quoted by them are inclusive of all taxes.
ii) The party confirmed their acceptance of all clauses of the tender document, classification of pre-bid meeting and all the addendum/corrigendum issued.
iii) Regarding ownership of the dredger, the render had enclosed two invoices of the dredger viz. MISC/033/2003 dt. 31.03.2003 and MISC /002/2006 dt. 23.03.2006 per Tuskar 1350 dredger which were buit in Tebma Shipyard Ltd. Chennai. The party also give an undertaking regarding mobilisation and operation of those dredger as per their letter with ref no. TMPL/TDR/WBPDCL/NIT/Camp 02 dt. 04.10.2015
iv) The nature of deposit in the river is "predominantly silt with trees of clay and sand" (ref clause no. B) 1) vi) of scope of work and terms and conditions). As per the proforma-4 of the party dredge pump at the dredger is BP 3530 of damen make and from the discharge vs capacity curve of the pump (considering curve marked A, B per fine to medium sand) the output capacity is 400 cum/hr of sold for discharging at a distance 400-500.
v) The agency also confirmed that the dredgers are not covested type and can work freely at channel and pond area of river Rupnarayan at KTPS.
This is placed before GM (Civil) for his valued opinion and further necessary action please.
Enclo:
a) Photocopy of e-mail to the party on dt. 30.09.2015.
b) Letter of M/s Tebma Marine Pvt Ltd. with ref. No. TMPL/TDR/WBPDCL/NIT/camp dt. 01.01.2015.
c) Invoices 1) MISC/033/2003 dt.31.03.2003 for CSD 1350 dredger.
2) MISC 002/2006 dt. 23.03. 2006 for Taskar 1350 dredger.
d) Undertaking of Tebma with ref. No. TNPL/TDR/WBPDCL/NIT camp 02 dt. 04.10.2015.
e) Discharge vs capacity pump curve for BP 3530 of Damen make.
Sd/-
05/10/2015
1) It is clean that ____is inclusive of service tax.
2) Party has withdrawn all its pre-bid objections/regrets in wining.
3) Regarding ownership and actual capacity, competent authority may decide since:
4) a) The invoices as produced for the 2 dredgers are of 2003/2006 & their current capacity is expected to be much below the 400m3/hr as stated.
b) Current ownership is not established. A vessel/dredger as proposed must have a unique name/number & legislation at the place wherever it is deployed now.
Purely accepting written assurance of bidder is a matter to be decided by competent authority in terms of acceptability &due diligence.
All other technical aspects of suitability, u/s is not competent to comment on & user dept is presumed to have taken due case to verify.
Sd/-
06/10/2015 Director (F & A/RA) ¾ I agree with the views of GM(F & A);
Credentials of the two proposed dredgers to be placed at DTPS has not be furnished by M/s. Tebma;
It is not known whether dredgers are working conditions or not;
They have not further any detail where these two dredgers were last deployed & utilisation certificate from respective users & copy of such w/orders.
Further, they have been furnished any physical demo regarding guarantee performance of 650M3/hr discharging capacity which is very essential.
Under the above circumstances the matter is placed before CMD for further guidance for placement of order on Tebma Marine (P) Ltd. the L1 bidder.
Sd/-
06/10CMD ¾ Seen, a committee is hereby purred with CVO as head and GM (Civil) and GM (m & C) as members to look into the issue and tender an opinion must nearly within 15/05/2015. It reqd: CVO/committee can invite opinion from other eng. Wings of WBPDCL if reqd.
Sd/-
9/10/15 CVO ¾ Technical report submitted herewith jointly signed by GM (Civil) & GM (M & C).
The report covers all the allegations made by A.B.C. & Sons Ltd.
As per the report, the allegations have not been substantiated.
So, go ahead may be given to place order with L1 bidder.
However, before issuing the order, an understanding may be taken from L1 Bidder to the effect that the machines are owned by them and they are aware of legal consequence if that ownership status is found false in future. Further, I like to add that since dredging is not our core job, in future we may hand over this type of jobs to some govt agencies having expertise in this filed like Port Trust Deptt. Of Fisheries Govt of WB. This way we may avoid tender formalities & consequent issues.
Sd/-
13/10/15 D) The above noted discussion brings to the surface the report of the Technical Committee constituted with the CVO, GM (Civil) and GM (MNC) as its members, on the eligibility of R4 to be technically qualified for the contract. The report of the Technical Committee reads as follows:-
"Report submitted by the committee:
Sub: Technical Qualification of M/s. Tebma Marine Private Limited Ref: NIT no.: WBPDCL/CORP/NIT/E1028/15-16 dated 06.08.2015.
The item wise compliances regarding the allegations made by M/s. Ardeshier B Cursetjee & Sons Limited are narrated as follows:
Letter no. ABC/FIN/15-16/1060 dated 01/10/2015. Query no 1 9a): M/s. Tebma Marine has made a false claim of a much higher dredge capacity of qualification criteria of 650 cum/hr.
Answer: capacity is checked with respect to the curves of pump BP 3530 (capacity vs distance of MAMEN make and found it satisfies the requirement.
Query no 1 (b): The criteria cannot be met with the dredgers that are being offered by Tebma that merely consume 70 ltrs of diesel per hour.
Answer: The clarification and relation between criteria and fuel consumption is irrelevant and not clear form the query of the party.
Query No 2: The bidder shall own at least two cutter suction dredgers.
Answer: It is evident from the documents submitted by the party they own 2 nos of cutter suction dredgers as per their invoice enclosed.
Query No 3: The dredge pump has been replaced with BP 3530 which cannot increase the Dredge output from 280 cum/hr to 400 cum/hr without increasing the power at shaft and engine HP.
• Answer: From the curve of BP 3530 Dredge Pump (capacity vs power) it is observed that for 400 cum/hr capacity the power consumption is 140KW. Again the catalogue of Crawl Cat 1350 reflects the power at shaft is 45KW. Considering both (Pumping and cutting) the total power is (140+45) KW = 185 KW. Considering 80% efficiency of the equipment the power consumption comes in the tune of (0.8X350) KW+ 280 KW which is greater than as required 185KW. It seems in both cases (cutting & pumping) the Dredging machine can cater our requirement.
• The Crawl Cat Dredger which is proposed to be deployed will be fitted with BP 3530 pump of power of 350KW i.e. 470HP engine which is more than sufficient as explained in the previous point.
Query No 4, 5 & 6 of the complaint.
Answer: The committee is concerned with the condition of the present tender and hence unable to form an opinion regarding the point no 4, 5 & 6 of the complaint. Letter no. ABC/FIN/15-16/1061 dated 07/10/2015. Query No 1 of falsification of documents. Answer: It is considered as a typographical mistake in the statement stated as 2011/2012. As per the invoices the party own 2 dredgers for which the invoices are dated 23/03/2006 & 31/03/2006 which indicates that dredgers are less than 20 years old as specified in NIT."
E) It therefore transpires to the mind of this Court that the Technical Committee accepted the invoices submitted by R4 dated 23rd March, 2006 and 31st March, 2003 as proof of its ownership and, also for further proof of the fact that the dredgers were less than 20 years old. The technical committee was also satisfied that the qualification criterion of 650 cum/hr of the dredging machines could be met by R4 by deployment of machines with dredging capacity of 400 cum/hr using a smaller engine of 350 cum. This conclusion is arrived at by the Technical Committee by comparing the dredging capacity with the curves of pump BP 3530 and, therefore, in the opinion of this Court, not on the basis of any actual demonstration.
F) This Court further finds from the affidavit of R4 the following pleadings:-
"13. The Petitioner seems to have raised lot of disputes with regard to certain invoices which through inadvertence were submitted along with the tender papers. Such invoices pertain to Tebma Shipyard Ltd. Such invoices were submitted through inadvertence and were not requisite documents as per the tender conditions. At one point of time Tebma Shipyards Limited and Respondent No. 4 were under the control of the same promoters. The accounts of the Respondent No. 4 and Tebma Shipyards Limited were prepared as if the two companies were sister concerns. P:rior to 2007 the construction of dredgers was done by Tebma Shipyard Ltd. and thereafter sold to the Respondent No. 4. The consideration of sale of such Dredgers was shared between the promoters which are common to both Tebma Shipyards Ltd. and the Respondent No.4. This is no longer the case. The Respondent No. 4 is not responsible for the preparation of accounts and returns of Tebma Shipyards Ltd. and is only concerned with its own books of accounts at least since the year 2007 onwards.
14. T he Petitioners seems to have raised further dispute with regard to two such invoices of Tebma Shipyards Limited which again I respectfully submit that the invoices were submitted through inadvertence and are wholly irrelevant for the purpose of tender. In any event, since the said documents at page 287 of the writ petition, namely invoice dated 31 March, 2003 has been submitted, although through inadvertence by the Respondent No. 4, the same not being an essential tender document, I state hereinbelow explanation with regard to such document:-
i) The consideration sum reflected in such invoice is Rs. 2, 18, 40, 000/- (Rupees Two Crores Eighteen Lakhs and Forty Thousand).
ii) The exact amount is reflected in the Bank Book for Canara Bank for the year 2002-03.
iii) The payment of the exact amount is shown to be made to Tebma Shipyards Limited by way of 5 cheque payments. A copy of the screenshots capturing the five cheques payments made in this regard in the year 2002-2003 are annexed hereto and collectively marked as Annexure 'C'.
iv) The purchase was done on 31 March, 2003 and as such the same is reflected on the balance sheet for the next year i.e. 2002-03. v) The balance-sheet of 2014-15 also reflects such sum. Baseless allegations have been raised with regard to C-
Form mentioned in the said notice and it has been alleged that number of such C-form is forged and fabricated. For the satisfaction of the writ petitioner, although the Respondent No. 4 is not obliged to do so under the terms and conditions of the tender, the C-Form certificate issued in the name of Tebma Shipyards Limited which has also been countersigned by the purchaser, namely the Respondent No. 4 is annexed hereto and marked as Annexure 'D'. The number mentioned in such C-form is PJT 03/01/3082/2002-03 dated 29.03.2003."
G) This Court is now required to notice of the exigencies behind R4 notarising an affidavit through its Executive Director on 16th October, 2015 on the basis of a stamp paper dated 6th February, 2015 to the effect that R4 shall be liable to civil or criminal action in the event its statement as the lawful owner of the dredging machines is found to be false. H) This Court also notices, at the same time, the anxiety of WBPDCL in issuing the letter dated 22nd February, 2016 for ascertaining the factum of ownership of the two dredgers by R4.
In the considered view of this Court the Technical Committee as well as the authorities responsible for the notings in File No. COPRJ14210025 (supra) proceeded to act on the basis of the invoices declared by R4 dated 31st March, 2003 and 23rd of March, 2006 for accepting ownership. The Technical Committee also proceeded to accept the lower eligibility criterion of 400 cum/hr notwithstanding the advertised eligibility of 650 cum/hr only upon an assessment of the curve pump charts submitted on behalf of R4.
This Court further finds that through pleadings on oath as evident from its affidavit-on-opposition, R4 has declared the two invoices dated 31st March, 2003 and 23rd March, 2006 as having been submitted through inadvertence. Before this Court a legal camouflage is now being drawn both by WBPDCL and R4 that it could not have been a strict term of the contract that ownership is required to be satisfied at the threshold stage of the technical bid and, both WBPDCL as well as R4 are well entitled to carry forward the process of cross checking the necessary particulars connected to the tender as and when the bills are raised and compliance ushered into the knowledge of WBPDCL.
I) With reference to the above discussion, this Court must notice the salutary observations of the Hon'ble Apex Court connected to Government contracts which must carry an element of legal certainty. Although it is not the task of a Court to prescribe the tender conditions which may well lie within the administrative sphere, the Courts are not restrained from exercising judicial scrutiny to prevent arbitrariness or favouritism. To the mind of this Court the record of discussion as noted in File No. COPRJ14210025 (supra) read with the conjoint legal stand adopted by WBPDCL and R4, lead to the conclusion that notwithstanding any pragmatic adjustments to the tender which WBPDCL may be entitled to carry out, the acceptance of the bid of R4 by WBPDCL on the basis of indefinite documents or, documents submitted by 'inadvertence' deprived the public tendering process of its key element of legal certainty intended to create a playing field fair to all.
Reliance on the above noted point can be had from the observations In Re: Meerut Development Authority vs. Association of Management Studies & Anr. reported in 2009 (6) SCC 171 at Paragraphs 27 & 28 and, In Re:
Reliance Energy Ltd. & Anr. vs. Maharashtra State Road Development Corporation Ltd. & Ors. reported in 2007 (8) SCC 1 at Paragraphs 38 & 39. Both the observations are set forth below:-
2009 (6) SCC 171 "27. The bidders participating in the tender process 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 tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except of the abovestated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.
28. It is so well settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process."
2007 (8) SCC 1 "38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This "legal certainty" is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of "level playing field".
39. In the case of Reliance Airport Developers (P) Ltd. v.
Airports Authority of India and others -(2006) 10 SCC 1, the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision- making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms. Those norms may be legal norms or accounting norms. As long as the norms are clear and properly understood by the decision-maker and the bidders and other stakeholders, uncertainty and thereby breach of rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above "certainty" is an important aspect of rule of law. In the case of Reliance Airport Developers (supra), the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks had different stages. Objectivity was thus provided." J) This Court is of the further view that the tender conditions of the NIT as well as the Special Conditions of Contract are not meant to be diluted or, flexibly treated at the stage of progress of the contracted work since, such tender conditions relating to the ownership and capacity of the dredgers, for the reasons as discussed above, directly impact the viability of the desired water channel connected to a vital power plant. To the mind of this Court the ownership and capacity of the dredgers could not be the subject matter of clarification at later stages after the tender work stood formally awarded in favour of R4.
In fact this Court notices that the very premise on which the technical committee proceeded to accept the ownership of R4 qua the dredgers, stood withdrawn by R4 claiming that the invoices in issue were submitted through 'inadvertence'. The additional clarification submitted by R4 that it shall be liable to civil and criminal action, if found to be declaring falsely, speaks volumes towards R4' awareness of the initial lacunas in its technical bid.
K) With reference to the above noted discussion the observations of the Hon'ble Apex Court as reported in 1991 (3) SCC 273 in the matter of Poddar Steel Corporation vs. Ganesh Engineering Works & Ors. at Paragraph 6 may be usefully relied upon.
"6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank the clause no. 6 of the tender notice was not obeyed literally, but the question is as to whether the said non- compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories-those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in GJ Fernandez v. State of Karnataka 7 Ors., [1990] 2 SCC 488 a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India & Ors., [1979] 3 SCC 489 but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses, the present case belongs."
L) This Court also finds that the issue of not submitting a document or, alternatively doing so, 'inadvertently' was noticed In Re: Glodyne Technoserve Ltd. vs. State of Madhya Pradesh & Ors. reported in 2011 (5) SCC 103 at Paragraphs 13, 14, 15, 25, 34, 35, 36, 37, 38, 45, 46 and
47.
"13. It was urged by learned Counsel that this is not a case of a tenderer not having a valid certification, as required, but a case of not filing it with the bid documents, despite having the same. Mr. Salve urged that in view of Clause 9 of Section 7.1.1, the Appellant's bid documents had been wrongly rejected at the Technical Bid stage, without even considering the Financial Bid which had been submitted by it.
14. In addition to the above, Mr. Salve submitted that after the Financial Bids, except that of the Appellant, were opened, the Appellant came to learn that its offer was about 200 crores less than the second-lowest tenderer to whom the contract was ultimately given and that by awarding the contract to the second lowest tenderer, the State of Madhya Pradesh was incurring a loss of such a huge amount.
15. Mr. Salve urged that the aforesaid position would be further strengthened from Section 3 of the Request for Proposal which contained the pre-qualification (eligibility) criteria relating to technical, operational, functional and other requirements. Mr. Salve submitted that Clause 3 of Section 3.1 provides that the bidder/one partner in the consortium must possess a valid certification in the Capability Maturity Model, which condition had been duly satisfied, and that all the partners of the consortium (in case of consortium) should have an active (valid at least till June, 2010) ISO 9001:2000 certification, at the time of submission of the bid. Mr. Salve submitted that all those documents to be submitted as qualifying documents, included the Quality Certificate and ISO 9001:2000 certificate, and if the said condition is read with the conditions contained in Clause 9 of Section 7.1.1 of the RFP, it would be seen that the requirement of a valid ISO 9001:2000 certification on the date of submission of the Bid documents was duly satisfied in the Appellant's case.
25. Appearing for the State of Madhya Pradesh, the learned Attorney General submitted that primarily four issues fall for the determination in the present case, namely,
(i) What is the relevance of Section 7 of the Request For Proposal as far as this Court case is concerned?
(ii) Does this case involve a mere mistake and is such a mistake fatal as far as the Appellant's bid documents are concerned?
(iii) What is the significance of Shri Navin Prakash's attempts to obtain clarification about the Appellant having a valid ISO 9001 Certificate on the date of submission of bid documents? and
(iv) Even assuming that the Appellant possessed a valid ISO 9001 Certification, was the same produced before the Respondents?
34. In support of his aforesaid submission, the learned Attorney General firstly referred to the decision of a Three-Judge bench of this Court in Siemens Public Communication Network Pvt. Ltd. vs. Union of India & Ors. [(2008) 16 SCC 215], wherein while considering the decision making process of the Government or its instrumentality in awarding contracts, it was held that such process should exclude the remotest possibility of discrimination, arbitrariness and favouritism and the same should be transparent, fair, bona fide and in public interest. It was also held that it is not possible to re-write entries in bid documents and read into the bid documents terms that did not exist therein.
35. Reference was also made to another decision of this Court in Ram Gajadhar Nishad vs. State of U.P.[(1990) 2 SCC 486], wherein it was held that the effect of non- compliance of a mandatory condition in a Tender notice was fatal and the fact that the Appellant's Tender was not opened, accordingly, did not call for interference under Article 136 of the Constitution.
36. The learned Attorney General lastly referred to the decision in Sorath Builders vs. Shreejikrupa Buildcon Ltd. & Anr. [(2009) 11 SCC 9], where similar views had been expressed in relation to the acceptance of the lowest bid by the Respondent No.2 University, despite the fact that such bidder had failed to furnish pre-qualification documents within the specified time. This Court held that the judgment of the High Court setting aside the decision of the University was improper as the said tenderer was itself to blame as it was late in submitting the required documents by three days and the Respondent No.2 University was justified in not opening the tender submitted by it.
37.This Court observed that the lowest tenderer could not make any grievance as the lapse was due to his own fault. This Court noticed that of the three bidders who had responded to the tender notice, one stood disqualified at the threshold and the lowest tenderer stood disqualified for having filed the requisite documents three days late. In effect, the Appellant in the said case ultimately turned out to be sole bidder and his bid was accepted, being the lowest among all the eligible bids.
38. Referring to the decision in the Tata Cellular case (supra), cited on behalf of the Appellant Company, the learned Attorney General pointed out that the said case was not a case of omission, but of breach of the mandatory condition of filing certain documents which were required to be filed.
45. Having considered the submissions made on behalf of the respective parties, we are inclined to accept the submissions made by the Attorney General that the introduction of the Corrigendum completely changed the provision in the Bidder's Response Form relating to submission of the Quality Certificate in the form of an active ISO 9001:2000 certification. In any event, the appellant's contention based on clause 9 of Section 7.1.1 of the RFP as it stood prior to corrigendum is misconceived. The said clause 9 specifically provided:
".....A copy of the Quality certificate or documentation of the Quality policy needs to be provided along with the bid document. In case the certificate is due for renewal, the bidder should ensure that the renewed certificate is made available at the time of signing of contract. In case the same is not provided, the Department may consider negotiating the award of contract with the L2 bidder."
46. The above provision obliges a tenderer to produce along with the bid document a copy of the Quality certificate which is valid and active on the date of submission of the bid and it does not enable a bidder to withhold the copy of such Quality Certificate. Where the Quality certificate will be expiring shortly and is due for renewal, the bidder is also obliged to produce the renewed certificate at the time of signing of the contract. The appellant claimed to have a valid and active ISO 9001:2000 certificate at the time of submission of the bid, but did not produce a copy of the said certificate along with the bid document.
47. The submissions made on behalf of the Appellant proceeds on the basis that it was entitled, almost as a matter of right, not to submit the documents required to be submitted along with the bid documents on the supposition that, even if such documents were valid and active, they could be submitted at the time of signing of the Memorandum of Understanding. The Appellant had a valid and active ISO 9001:2000 certification which it did not submit along with the Bid documents, may be due to inadvertence, but whether such explanation was to be accepted or not lay within the discretionary powers of the authority inviting the bids. The decision taken to reject the Technical Bid of the Appellant cannot be said to be perverse or arbitrary. We need not refer to the decisions cited by the learned Attorney General or the Appellant in this regard, as the principles enunciated therein are well- established."
In the backdrop of the above discussion, this Court, while noticing the discretionary power of the tendering authority, viz. WBPDCL to undertake a clarificatory exercise post acceptance of the technical bid, at the same time, is of the view that such discretion cannot be exercised in a manner as to deprive the tendering process of legal certainty connected to a key viability content of the work tendered.
At the same time this Court must also comment on whether the above noted clarificatory exercise, as evident from the file notings read with the pleadings on affidavit, carries the element of joint or, sole culpability of both or, one of the major players, viz. WBPDCL and R4, connected to the vulnerabilities of their position(s) qua the tendering process. While undoubtedly WBPDCL is entitled to remove cartelisation/monopoly contractorship, such exercise of discretion must conform to the norms of legal certainty entitled to be enjoyed by each of the tender participants.
Accordingly, this Court directs that, since from the Minutes of the discussion/file notings of WBPDCL it transpires that the e-tender was tailored to conform to Central Vigilance Commission (CVC) guidelines, let all the records of the tender be forthwith transferred by WBPDCL to the CVC for identifying wilful culpability, if any and, fixing responsibility on the part of the dealing officials of WBPDCL and the representatives of R4, if found. The CVC shall make an enquiry into the matter within a period of three months from the date of communication of this order and, shall be also entitled to initiate appropriate consequential civil or criminal action in addition to future advisories to the public authorities in charge of the tender(s).
CVC shall file a Status Report on the enquiry as directed above at the end of three months from the date of communication of this order to the Court. Registry is directed to retain the Status Report furnished by CVC with the present record.
This order shall not however interrupt the balance tender work in public interest.
Let the photocopies of the files handed over by Ld. Counsel of WBPDCL being File No. COPRJ14210025 and File No. KTPS/DGM(C)/KTCVI21010001 be carefully prepared and retained with the present record in a sealed cover. Let the original files be handed back to Ld. Counsel for WBPDCL on proper acknowledgement/receipt thereof for complying with the Court' directions as recorded above.
Registry to communicate this order to the CVC. WP 27449(W) of 2015 stands accordingly disposed of. Urgent Xerox certified photocopies of this judgment, if applied for, be given to the parties upon compliance of all requisite formalities.
(Subrata Talukdar, J.)