Bombay High Court
A2Z Maintenance & Engineering vs Maharashtra State Electricity on 28 July, 2010
Author: D.D.Sinha
Bench: D.D. Sinha, Mridula Bhatkar
This Order is modified/corrected by Speaking to Minutes Order
1 wp3859.10
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE
WRIT PETITION NO.3859 OF 2010
A2Z Maintenance & Engineering
Services Limited
A company incorporated under
the Companies Act, 1956
having its registered office at
O-116, First Floor, Shopping Mall,
Arjun Marg, DLF City Phase-I
Gurgaon. ig : Petitioner
V/s.
1. Maharashtra State Electricity
Distribution Company Limited
Prakashgad, Plot No.G-9
Anant Kanekar Marg
Bandra (E), Mumbai
Through Chairman and Managing Director.
2. Spanco Limited
B-22, Krishna Bhuvan,
B.S.Deoshi Marg, Deonar,
Mumbai--400 088. : Respondents
....
Mr.Janak Dwarkadas, Senior Advocate, with Mr.Y.S.Jahagirdar, Senior
Advocate, Mr.S.R.Nargolkar, Mr.Zal Andhyarjuna, Mr.Satis Mukharjee,
Mr.Makarand Karnik and Mr.Vikrant Nagi, Mr.Sagar Divekar, Mr.Arun
Gaur i/b.Trilegal for the petitioner.
Mr.R.Dada, Senior Advocate, with Mr.Anurag , Mr.Chirag Modi,
Mr.Vivek Shetty and Mr.Rishikesh Soni i/b. DSK Legal for respondent
no.1.
Mr.Arif Bookwala, Senior Advocate, with Mr.Milind Sathe, Ms Jyoti
Singh and Ms Rema Jachak i/b. Dhir & Dhir Asso. for intervenor-
respondent no.2.
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CORAM : D.D. SINHA AND
MRS.MRIDULA BHATKAR,JJ.
Date of Reserving ) : 25.06.2010
the Judgement. )
Date of Pronouncing ) : 28.07.2010
the Judgement. )
JUDGEMENT (Per D.D.Sinha, J.)
Rule, returnable forthwith.
The learned counsel for the respective respondents waive service.
Heard the petition finally on merits by consent of the parties.
2. The circumstances which have given rise to the filing of this petition in a nutshell are as follows:-
The respondent no.1 in the month of January 2010 issued Request for Proposal (RFP) for appointment of distribution franchisees for the distribution area division of Aurangabad and Nagpur, being Bid Specification No.DF-2/2009-10 and DF-3/2009-10, respectively. The petitioner purchased both RFP documents from the respondent no.1. The petitioner sent various pre-bid queries on the bid documents to the respondent no.1 by their letter dated 14.2.2010. The same was duly ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order
3 wp3859.10 responded by the respondent no.1 by an e-mail dated 22.3.2010 addressed to Mr.Ashish Sahay. The respondent no.1 sent a formal invitation to the petitioner on 18.2.2010 to attend the pre-bid meeting which was scheduled on 20.2.2010. The pre-bid meeting held on 20.2.2010 by the respondent no.1 was attended by the petitioner's representative Mr.Ashish Sahay.
3. Pursuant to RFP issued by the respondent no.1, the petitioner submitted its bids for both Aurangabad and and Nagpur on 7.4.2010. Six bidders, including the petitioner, submitted their bids for Aurangabad and 11 bidders, including the petitioner, submitted their bids for Nagpur. In the bids submitted by the petitioner, Mr.Lakshmi Narasimhan was designated as the authorised signatory for the petitioner for the bid proceedings through the power of attorney according to the format prescribed in exh.6 of RFP. Apart from this, Mr.Narasimhan signed all supporting documents submitted with the bids.
4. On 27.4.2010, the respondent sent an e-mail to Mr.Ashish Sahay forwarding a copy of the letter dated 27.4.2010 by which the respondent no.1 rejected the petitioner's bid on the ground that the power of attorney submitted by the petitioner along with the bid was not notarised. An e-mail was sent at about 6.45 p.m. on 27.4.2010 which did not come to ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 4 wp3859.10 the notice of the petitioner on 27.4.2010.
5. Till 27.4.2010 the respondent no.1 not informed/intimated the petitioner about the date on which the financial bid would be open, even though RFP has stated that technical and financial bid would be opened in the presence of the representative of the bidder. The petitioner became aware that the financial bid may be opened on 28.4.2010. The petitioner sent his representative to the respondent no.1's office on 28.4.2010. On 28.4.2010 the representative was informed that the financial proposals/bids would be opened on 28.4.2010. The respondent no.1 in their letters Prin.Con./DF/402/12904 and Prin.Co./DF/403/12905 both dated 27.4.2010 to the petitioner's representative which stated that as the power of attorney submitted by the petitioner was not notarised, the bid of the petitioner was declared as non-responsive and disqualified the technical bid of the petitioner on this ground. The petitioner being aggrieved by the decision of the respondent no.1 dated 27.4.2010 whereby the technical bid of the petitioner was rejected, invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution by filing the present Writ Petition impugning the communication dated 27.4.2010 whereby the petitioner was informed about the rejection of its bids.
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6. Mr.Dwarkadas, the learned Senior Advocate appearing for the petitioner, has submitted that the rejection of the bid of the petitioner on the ground that the power of attorney submitted by the petitioner was not notarised is illegal and unwarranted as the requirement to notarise the power of attorney is a non-essential and/or ancillary condition of the tender. It is submitted that the relevant clauses of the tender document which deals with this aspect were clause 5.1.1 read with clause 5.1.1.10.
It is contended that under these clauses, if the proposal did not contain the applicable power of attorney as laid down in exh.6 of the RFP, the bid was deemed to be non-responsive. It is the case of the petitioner that the power of attorney submitted by the petitioner on 7.4.2010 was in the required format (but was not notarised). Mr.Dwarkadas, the learned Senior Advocate further contended that the other bidder was M/s.GTL Limited (Aurangabad) whose technical bid which was accepted by the respondent no.1, in fact, had submitted only a photocopy of the required power of attorney and such a photocopy (whether duly notarised or not) was not in compliance with the requirements of clause 5.1.1.10 as well as the format at exh.6 of the RFP. The learned Senior Advocate for the petitioner has submitted that despite such a deviation, in the case of M/s.GTL Limited, the respondent no.1 permitted a relaxation in respect of the requirement for the power of attorney as stated in clause 5.1.1 read with clause 5.1.1.10 as well as the format at exh.6 of the RFP. The ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 6 wp3859.10 learned Senior Advocate for the petitioner has submitted that despite such deviation, in the case of M/s.GTL Limited, the respondent no.1 permitted a relaxation in respect of the requirement for the original power of attorney in terms of the tender document, though declined to do so with regard to the power of attorney submitted by the petitioner. It is contended that the very fact that relaxation was permitted in respect of M/s.GTL Limited's bid in respect of the requirement of the power of attorney as provided for in the tender, makes it apparent that the requirement for the power of attorney as stated in clause 5.1.1 read with clause 5.1.1.10 read with the format in exh.6 was a non-essential and/or a collateral and/or ancillary and/or subsidiary requirement with regard to the main object sought to be achieved by the condition. Mr.Dwarkadas, the learned Senior Advocate, has contended that when a relaxation is exercised in favour of one bidder, the same principle and criteria must be applied in the case of other bidders. In order to substantiate this contention, reliance was placed on the decision of B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. [(2006) 11 SCC 548].
7. The learned Senior Advocate appearing for the petitioner has submitted that it is also well-settled that whether a condition is essential or collateral could be ascertained by reference to the consequence of non-
compliance thereof. If non-fulfilment of the requirement results in ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 7 wp3859.10 rejection of the tender, it would be an essential part of the tender, otherwise it would merely be a collateral term. In order to substantiate this contention, reliance was placed on the judgement of the apex Court in the case of Kanhaiya Lal Agarwal v. Union of India & Ors. [(2002) 6 SCC 315. Mr.Dwarkadas, the learned Senior Advocate has further submitted that if the bid submitted by the bidder substantially complies with the purport and object for which the essential conditions were laid down in the tender document, such bid should not be rejected or disqualified for non-compliance/a deviation with regard to a non-essential and/or ancillary condition. The learned Senior Advocate appearing for the petitioner has submitted that the respondent no.1 was fully aware of the fact that the requirement of notarisation of the power of attorney was a non-essential and/or ancillary condition. This is apparent from the handwritten office note dated 16.4.2010 which is reflected in the affidavit-in-rejoinder dated 13.5.2010 of the respondent no.1 which reads thus:-
"GTL Ltd. has submitted notarized copy of duly executed and notarized Power of attorney. Hence original can be asked. This bid may be considered if the original is produced. The documents submitted by A to Z is a power of attorney ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order
8 wp3859.10 executed but not notarized. It is not as per Exhibit
6. Hence there is non-compliance of the term. It is not the very important term to reject the tender itself. We can ask the tenderer to submit another copy of power of attorney duly notarized. If submitted it can be considered."
The learned Senior Advocate for the petitioner, therefore, contended that the Chief Legal Advisor's note in his response to a query made in the Office Note dated 16.4.2010 (exh.`2' to the affidavit-in-rejoinder) which specifically requested him to examine the deviation in the power of attorney submitted by M/s.GTL Ltd. and the petitioner. The said office note also bears another note made by the Company Secretary and Director (Finance) which is at page 374 of the affidavit-in-rejoinder and reads as under:-
"The documents are historical in nature and the(y) can be obtained to ensure competition. Hence, as proposed above the bids may be considered on submission of original documents."
The learned senior Advocate for the petitioner, therefore, contended that it ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 9 wp3859.10 is evident that the Chief Legal Advisor, the Company Secretary and Director (Finance) were all of the view that the bids ought to be considered upon the submission of duly complied documents. It is contended that the reasons given for accepting M/s.GTL Limited's bid and rejecting the petitioner's in the resolution passed by the Board dated 23.4.2010 on the ground that the former was "minor deviation" and the latter a "major deviation" has no basis whatsoever in law and shows that the Board applied different criteria while evaluating the bids of the petitioner as well as M/s.GTL Ltd., though the deviation was in respect of non-essential eligibility condition alleged to have been committed by both.
8. The learned senior Advocate for the petitioner further submitted that the respondent no.1 failed to appreciate that clause 5.1.1 provides that the bid may be deemed non-responsive in the event that the condition, inter alia, in clause 5.1.1.10 is not met. This is, however, in marked contrast to other provisions submitted in clause 6.5.1.3 which reads thus:-
"Bids, which are not accompanied by the above fee receipt, shall be rejected by MSEDCL as non-
responsive."::: Downloaded on - 09/06/2013 16:12:42 :::
This Order is modified/corrected by Speaking to Minutes Order 10 wp3859.10 And clause 6.15.2 of the tender document reads thus:
"Strict adherence to formats, wherever specified, is required. Non-adherence to formats may be a ground for declaring the Proposal non-responsive."
It is contended that in the instant case, the powers of attorney submitted by the petitioner as well as the respondent no.1 even if it is assumed for the sake of argument were not as per the specified format, the action of the respondent no.1 in only rejecting the technical bid of the petitioner is discriminatory, illegal and against the settled principles of law and, therefore, unsustainable in law.
9. Mr.Dwarkadas, the learned Senior Advocate, has submitted that the action of the respondent no.1 in rejecting the bid of the petitioner is mala fide which is evident from the following facts and circumstances:-
(i) The petitioner's bid was submitted on 7.4.2010 along with a demand draft for Rs.2 crores.
(ii)The power of attorney (not notarised) but otherwise in every manner complied with the requirement of the tender was enclosed with the bid on 7.4.2010.::: Downloaded on - 09/06/2013 16:12:42 :::
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(iii)Between 7.4.2010 and 27.4.2010, the respondent no.1 raised no query/objection with regard to the petitioner's bid, though the so-
called discrepancy with regard to the petitioner's power of attorney had already been noted, as is evident from the abovementioned notes dated 13.4.2010 and 16.4.2010, as stated above. (Reference is already made in the above referred paragraph).
(iv)The recommendations of the Chief Legal Advisor of the respondent no.1 was never acted upon. The communication on 27.4.2010 rejecting the bid was sent at 6.37/6.45 p.m. i.e. after office hours, deliberately to preclude the petitioner from rectifying the so-called deficiency in respect of the power of attorney which was not notarised.
(v) It is contended that failure to notarise the power of attorney does not, in any manner, denude the authority conferred by the power of attorney. In order to substantiate this contention, reliance is placed on the decision of the apex Court in the case of Grafitek International v. K.K. Kaura & Ors. [96 (2002) Delhi Law Times 385].
10. Mr.Dwarkadas, the learned Senior Advocate for the petitioner, has submitted that the petitioner has denied the case of the respondent no.1 that its representative Mr.Ashish Sahay informed the respondent ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 12 wp3859.10 no.1's representative that he will immediately get two power of attorney from Aurangabad and Nagpur divisions notarised, back dated and would submit the same. In fact, in paragraph 12 of the affidavit-in-rejoinder, the deponent has stated that "when the petitioner had come to know about the rejection of the petitioner's bid on the ground of non-notarization of the power of attorney, it had requested for an opportunity to rectify the defect.
It is denied that the petitioner proposes to backdate any document as alleged or at all. The petitioner only sought to get the spare set of the power of attorney that had been prepared for the bid (which was also not notarized as per the format) to be duly notarised and submitted to the respondent." It is contended that the true copy of the Register of Notary Public clearly shows that the power of attorney submitted by the petitioner was presented for notarisation on 28.4.2010. It is contended that there was no question of back-dating any power of attorney and, in fact, the same had been duly notarised on 28.4.2010.
11. It is contended that the issue raised by the respondent no.1 of so-
called back-dating is totally unfounded and to see to somehow justify its unwarranted rejection of the petitioner's bid.
12. Mr.Dwarkadas, the learned senior Advocate for the petitioner, has submitted that the respondent no.1 has gone to absurd lengths to seek to ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 13 wp3859.10 justify its illegal and unwarranted rejection. This is apparent from the submission made by the respondent no.1 in the affidavit-in-reply that the act of the petitioner in submitting a non-notarised power of attorney "might be a strategic move to keep the option open for backtracking from the offer, if it does not suit the business interest of the petitioner." It is contended that the said submission of the respondent no.1 is absurd in view of the fact that the petitioner submitted a demand draft for Rs.2 crores along with its bid which would have been forfeited in the event of any default on the part of the petitioner.
13. Mr.Dwarkadas, the learned senior Advocate, further contended that the respondent no.1 has not denied the fact that the petitioner was the highest bidder by a considerable margin of Rs.102.68 crores for Aurangabad and Rs.8 crores for Nagpur. The respondent's argument during the hearing of the matter that these margins were not substantial in view of the huge outlays involved in the proposed contracts is liable to be rejected on the ground that the same is against the public interest.
14. Mr.Dwarkadas, the learned senior Advocate, therefore, submitted that the action of the respondent no.1 in rejecting the technical bid of the petitioner is illegal, arbitrary and based on ulterior and extraneous consideration and, therefore, liable to be set aside and the petition ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 14 wp3859.10 deserves to be allowed.
15. Mr.Rafiq Dada, the learned senior Advocate appearing for the respondent no.1, has submitted that the respondent no.1 issued RFP in January 2010 for appointment of distribution franchisee for distribution areas of Aurangabad and Nagpur. The last date of submission of the bid document was 7.4.2010. The petitioner's bid was rejected by a unanimous decision of the Board of the respondent no.1 dated 23.4.2010 and communicated on 27.4.2010. The financial bid was opened at 3.00 p.m. on 28.4.2010. The successful bidder declared by the respondent no.1 are M/s.GTL Ltd. for Aurangabad and Spanco Limited for Nagpur.
16. The learned Senior Advocate for the respondent no.1 has contended that the bids of the petitioner were rejected because the petitioner had not submitted notarised power of attorney and also the power of attorney was not executed in the format prescribed in exh.6 to the RFP and also the power of attorney was not attested by the executant. It is contended that notarisation of the power of attorney is an essential and mandatory term of the tender and, therefore, if the power of attorney is not notarised, then the signature of the attorney is not attested nor verified by the Notary Public. Hence, the petitioner who has signed all the pages of the bid document is not authorised by the petitioner and in the absence thereof, ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order 15 wp3859.10 the entire bid of the petitioner becomes invalid. It is contended that the entire bid document on behalf of the petitioner was signed by Mr.R. Lakshmi Narasimhan, whose signature is neither attested nor verified or confirmed by the Notary Public or by the executant. Mr.Lakshmi Narasimhan has not accepted the power of attorney. Mr.Dada, the learned Senior Advocate, has submitted that the petitioner's authorised representative in whose favour the power of attorney was executed as per the RFP was required to sign each and every page of the bid document and also there were several important documents which were to be signed by the authorised representative. It is, therefore, contended that it was essential as well as mandatory for the power of attorney to be notarised and also the same was required to be executed in the form as provided in exh.6 of the bid document. In the absence of duly notarised power of attorney, the bid of the petitioner is invalid. On the other hand, in the circumstances of the present case, the bids submitted by the petitioner, for the reasons stated hereinabove, could not be treated to be a valid bid.
17. The learned counsel for the respondent no.1 further submitted that the Board of Directors of the respondent no.1 company had in the meeting of the Board of Directors deliberated on the aspect of non-submission of notarised power of attorney by the petitioner and after due deliberation and discussion, decided to reject the bid of the petitioner as non-
::: Downloaded on - 09/06/2013 16:12:42 :::This Order is modified/corrected by Speaking to Minutes Order 16 wp3859.10 responsive. The relevant part of the minutes of the Board is reproduced below:-
"4. As regards A2Z, the opinion of the CLA was that the Power of Attorney submitted was not notarized and hence the same was non-compliance as per Exhibit 6 of the RFP.
The Board discussed the issue and further noted that a Power of Attorney, notarized by a Notary Public, was required to be submitted along with the technical bid as per exhibit 6 of RFP. Non- compliance of the same was a major deviation and would have legal/financial repercussion.
The Board noted that in the absence of a notarized Power of Attorney the party is free to backtrack on the submissions made in the bid document jeopardising the complete process.
The Board then opined that as this requirement could not be waived off and obtaining a fresh/revised notarized document at this stage (which cannot be prior to the date of bid submission) would be considered as illegal and also deprive the rights of the other eligible bidders, the bid of A2Z be considered as non responsive in respect of the compliance of the said clause and be ::: Downloaded on - 09/06/2013 16:12:42 ::: This Order is modified/corrected by Speaking to Minutes Order
17 wp3859.10 rejected."
18. Mr.Dada, the learned Senior Advocate, has contended that the Board of Directors of the respondent no.1-company after detailed discussions and deliberations, considered the failure of the petitioner to submit notarised power of attorney as non-compliance of terms and conditions of RFP and, therefore, rejected the bid of the petitioner. The decision of the Board of Directors is proper and reasonable and not at all arbitrary or unfair. In order to substantiate this contention, reliance is placed upon the recent judgement of this Court in the case of Coastal Marine Construction and Engineering Ltd. v. ONGC & Anr. in Writ Petition No.41 of 2010 dated 18.2.2010. The relevant part of the judgement relied upon by the respondent no.1 is as follows:-
15. While examining the merits of the petitioner's case, we will have to remind ourselves that while judicially reviewing an administrative action, we are concerned with the decision making process of the administrative authority and not the ultimate decision. In the case of Tata Cellular (supra), the apex Court has observed thus:-::: Downloaded on - 09/06/2013 16:12:42 :::
This Order is modified/corrected by Speaking to Minutes Order 18 wp3859.10 "77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii)Irrationality, namely, Wednesbury unreason- ableness.
(iii) Procedural impropriety."::: Downloaded on - 09/06/2013 16:12:42 :::
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19. It is contended that the Supreme Court in the case of Tata Cellular v. Union of India [(1994) 6 SCC 651] has laid down that the duty of the Court is to confine itself to the question of legality and its concern should be (i) whether a decision-making authority exceeded its powers; (ii) committed an error of law; (iii) committed a breach of the rules of natural justice; (iv) reached a decision which no reasonable tribunal would have reached or; (v) abused its powers. And it is not for the Court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. The Court is concerned with the manner in which those decisions have been taken. It is further contended that the apex Court in paragraph 94 of the decision in the case of Tata Cellular has observed thus:-
"94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order
20 wp3859.10 which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
The counsel for the respondent no.1, therefore, contended that the decision making process undertaken by the respondent no.1 was just, fair and was in conformity with the terms and conditions of the tender ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 21 wp3859.10 document and, therefore, the decision taken by the respondent no.1 rejecting the bids of the petitioner cannot be the subject-matter of judicial review in view of the law declared by the Supreme Court in the case of Tata Cellular (supra).
20. It is the case of the respondent no.1 that the power of attorney submitted by the petitioner was required to be notarised and submitted in the format as per exh.6 of RFP. It is an admitted position that the power of attorney submitted by the petitioner was not notarised and also was not in the format provided in exh.6 of RFP. The respondent no.1, therefore, was justified in holding that the petitioner did not comply with the essential and mandatory conditions of tender document and the said decision is sustainable in law and the decision of the respondent no.1 in rejecting the bid of the petitioner is proper, valid and not vitiated or affected by any illegality, irrationality and impropriety.
21. Mr.Dada, the learned Senior Advocate, has submitted that it was the case of the petitioner before this Court that since the power of attorney submitted by GTL was only a copy and as GTL was given an opportunity to submit the original power of attorney, the petitioner also should have been given an opportunity to submit notarised power of attorney. It is contended that the case of the petitioner was that by not accepting or ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 22 wp3859.10 allowing the petitioner to submit notarised power of attorney, the respondent no.1 has acted in an unfair, discriminatory and arbitrary manner. Mr.Dada, the learned Senior Advocate for the respondent no.1 has submitted that M/s.GTL has submitted attested true copy of the power of attorney which was notarised and also the original power of attorney which was duly notarised. Therefore, the original power of attorney submitted by GTL was in existence and it was notarised prior to the date of submission of the bid and, therefore, the respondent no.1 decided to ask M/s.GTL to submit the original power of attorney which was notarised. It was contended that since the power of attorney in case of GTL was a historical document and was in existence on the date of submission of tender, the same was called for by the respondent no.1. In contrast to this, as far as the petitioner is concerned, the power of attorney duly notarised was not in existence on the date of closing of the bid and hence, the same could not be accepted as the same would be a new document and tendered after the closing of the bid.
22. Mr.Dada, the learned Senior Advocate has submitted that the petitioner's representative Mr.Ashish Sahay approached on 28.4.2010 at 11.30 a.m. The respondent's principal Consultant Mr.Devashish Chatterjee and made inquiries about the bid submitted by the petitioner. Mr.Ashish Sahay was informed that the petitioner's bid was rejected as the same was ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 23 wp3859.10 found to be non-responsive due to non-submission of notarised power of attorney. Thereupon, the said Ashish Sahay informed Mr.Devashish Chatterjee that he will immediately get the two powers of attorney for Aurangabad and Nagpur divisions notarised back dated and submit the same to Mr.Devashish Chatterjee and he should consider these documents as submitted back dated and open the financial bids of the petitioner for the Aurangabad and Nagpur divisions. The learned counsel for the respondent no.1 has further contended that Mr.Devashish Chatterjee was shocked and surprised by the conduct of the said Mr.Ashish Sahay and informed him that he cannot accept back dated notarised powers of attorney from the petitioner at this stage since the date of submission of the document was already expired on 7.4.2010 and it would be illegal to replace/change documents originally submitted by the bidder at this stage of the bidding process. It is the case of the respondent no.1 that Mr.Ashish Sahay repeatedly requested Mr.Devashish Chatterjee to accept the powers of attorney as if the same were submitted by the petitioner along with the petitioner's original bids. However, Mr.Chatterjee firmly refused to oblige Mr.Ashish Sahay. It is contended that the petitioner has not denied these facts placed on record by the respondent no.1 and also not filed any affidavit of Mr.Ashish Sahay. The petitioner has on 28.4.2010 at about 15.50 hrs. faxed copies of notarised power of attorney along with the petitioner's letter dated 28.4.2010. The said letter was ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 24 wp3859.10 received after opening of the price bid of the other bidders and, therefore, could not be considered by the respondent no.1. The learned counsel for the respondent no.1 has submitted that although the power of attorney was submitted by the petitioner on 28.4.2010, the date mentioned on the power of attorney is 5.4.2010 which in turn was notarised by Advocate Mr.Ashok Bharadwaj, Gurgaon, Haryana, without putting the date of notarisation on the power of attorney. It was contended that the petitioner had acted with mala fide intention of back dating the documents and sought to portray as if the powers of attorney were notarised on 5.4.2010 and form part of the bids submitted by the petitioner on 7.4.2010. It is contended that there was no reason for the petitioner not to submit the power of attorney duly notarised if the same were notarised on 5.4.2010.
23. Mr.Dada, the learned counsel for the respondent no.1, has contended that the power of attorney faxed with the letter dated 28.4.2010 were different from the powers of attorney submitted along with the bid.
The inspection of these documents including the entry made in the Register of the Notary would clearly show that the Notary Public, in collusion with the petitioner created sr. nos.986(A) and 986(B) dated 28.4.2010. The learned Senior Counsel for the respondent no.1 has submitted that the description of the power of attorney has not been given by the Notary in a chronological order along with the earlier documents ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 25 wp3859.10 notarised by him and he has sought to squeeze in the description of the power of attorney document in the left-hand side column of the concerned page which was not the column for description of the document for obvious reason that entry of the power of attorney has been squeezed in by the Notary Public. Mr.Dada, learned Senior Counsel, therefore, contended that the petitioner fabricated and fraudulently created document which he tried to submit to the respondent no.1 during the process of the tender in order to support its false and bogus case. Since the petitioner did not approach this Court with clean hands, he is not entitled to any of the reliefs claimed by him in the petition.
24. Mr.Dada, the learned Senior Advocate, has submitted that the notes prepared by the Principal Consultant Mr.Devashish Chatterjee, internal comments of the Chief Legal Advisor and internal comments of the Director (Finance) are the internal documents of the respondent no.1 which have been produced by the petitioner in an unauthorised manner. It is not the cased of the petitioner that he has received these documents after applying under the Right to Information Act.
25. The learned Senior Advocate for the respondent no.1 has submitted that the decision in the case of Grafitek International v.
K.K.Kaura & Ors. (supra) was delivered by the Supreme Court in ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 26 wp3859.10 absolutely different set of facts than the one involved in the present case and, therefore, it has no application to the present case. In the said case, a suit was instituted without notarisation of the power of attorney which was subsequently ratified by the plaintiff before the summons for judgement was served upon the defendants and that no substantial pleading has commenced between the parties. On the other hand, the Delhi High Court has categorically held that the importance of notarisation of the power of attorney cannot be undermined and that it raises a presumption as to the authenticity of the document. Hence, the said judgement, in fact, supports the decision of the respondent no.1 in rejecting the bids of the petitioner for non-submission of notarised power of attorney in the format as provided in exh.6 of the tender document.
26. The learned Senior Advocate for the respondent no.1 has submitted that the case of the petitioner that the respondent no.1 was partial towards other bidders is completely baseless. In fact, minor deviations were considered in case of all the bidders, including the petitioner. The petitioner along with their bid document did not submit the original purchase receipts of their bid documents which was one of the conditions of the bids was waived by the respondent no.1 as the respondent no.1 found that the tender fee receipt submitted by the petitioner was matching with the records of the respondent no.1. The petitioner even failed to ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 27 wp3859.10 submit the certification of commencement of business pursuant to section 149(3) of the Companies Act, 1956, which was waived by the respondent no.1 as the respondent no.1 discovered that the petitioner had commenced its business as a private limited company.
27. The learned Senior Advocate for the respondent no.1 has submitted that insofar as the petitioner's bid being the highest cannot improve the case of the petitioner as the petitioner had no locus standi to submit the bid document without the notarised power of attorney in the format as provided in exh.6 of the tender document. It is further submitted that the contention of the learned Senior Advocate for the petitioner that the State Government would lose Rs.100 or odd crores if the respondent no.1 does not accept the bids of the petitioner is absurd as the contract for appointing distribution franchisee is related with essential service like distribution of electricity to all the residents which involve approx. 24 lakhs and 11.75 lakhs residents of Nagpur and Aurangabad, respectively.
In addition to that, it also involves a revenue of Rs.550 crores per annum and Rs.731 crores per annum for these cities, respectively. It is, therefore, contended that the petition suffers from lack of merit and is liable to be dismissed with costs.
28. Considered the contentions canvassed by Mr.Dwarkadas, the ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 28 wp3859.10 learned Senior Advocate for the petitioner, as well as Mr.Dada, the learned Senior Advocate for the respondent no.1 as also Mr.Bookwala, the learned Senior Advocate for the intervenor respondent no.2, who has adopted the argument advanced by Mr.Dada. In the instant case, the bids submitted by the petitioner were rejected by the respondent no.1 since the same were not in conformity with the terms and conditions of clause 5.1.1 read with clause 5.1.1.10 which reads thus:-
"5.1.1 The bids submitted by Bidders shall be initially examined to establish "Reponsiveness". A Bid may be deemed "Non-Responsive" if it does not satisfy any of the following conditions:
5.1.1.10 If the response does not contain the applicable Power of Attorney as laid down in Exhibit 6 of the RFP."
Clause 5 of the tender document deals with evaluation of bids. Clause 5.1 connotes responsiveness of bids and clause 5.1.1 contemplates that the bid submitted by the bidder shall be initially examined to ascertain whether those are or are not in conformity with the conditions mentioned in sub-
clauses of clause 5. If the bid/s does not satisfy any of the conditions ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 29 wp3859.10 mentioned in the sub-clauses of clause 5, then as per clause 5.1.1, it may be deemed to be "non-responsive".
29. Sub-clause 5.1.1.10 stipulates that if the response/bid does not contain the applicable power of attorney as laid down in exh.6 of RFP, then in view of clause 5.1.1, it will be deemed to be non-responsive.
30. In the present case, the power of attorney submitted by the petitioner was not notarised and was also not in the exact format provided in exh.6 of RFP and, therefore, the Board of the respondent no.1, in view of clause 5.1.1, declared the bids submitted by the petitioner as "non-
responsive" and disqualified both the technical bids of the petitioner. It is not in dispute that the decision to declare the bids of the petitioner as "non-responsive" was taken by the respondent no.1's Board on 23.5.2010 solely on the above referred ground and communicated the said decision to the petitioner on 27.5.2010.
31. Similarly, it is not in dispute that M/s.GTL has submitted attested true copy of the power of attorney which was notarised along with the bid which was not in conformity with the said condition, however, it was not declared as non-responsive for want of original power of attorney duly notarised. It is also not in dispute that the respondent no.1 decided to ask ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 30 wp3859.10 M/s.GTL to submit the original power of attorney duly notarised and permitted to rectify these defects. M/s.GTL submitted the original power of attorney duly notarised and rectified the said deficiency.
32. On the back drop of the above referred facts and circumstances, the following questions fall for our consideration:-
(i) Whether the conditions stipulated in clause 5.1.1 read with clause 5.1.1.10 in the tender document are essential conditions of eligibility and non-compliance of which would result in disqualifying the bids.
(ii)Whether the act of the respondent no.1 allowing/permitting M/s.GTL to rectify the deficiency in respect of notarised power of attorney which was not consistent with the tender conditions stipulated in clause 5.1.1 read with clause 5.1.1.10 suffers from the vice of arbitrariness and is violative of Article 14 of the Constitution since the benefit of the said relaxation was not extended to the petitioner.
33. So far as the first question is concerned, the observations made by the apex Court in the case of B.S.N. Joshi & Sons Ltd. (supra) in paragraphs 60, 61, 66 and 69 are relevant in this regard which read thus:-
::: Downloaded on - 09/06/2013 16:12:43 :::This Order is modified/corrected by Speaking to Minutes Order 31 wp3859.10 "60. Strong reliance has been placed by Mr.Tankha on G.J. Fernandez v. State of Karnataka wherein this Court observed: (SCC p.
501, para 15) "15. Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them. Thus, if a party does not strictly comply with the requirements of para III, V or VI of the NIT, it is open to the KPC to decline to consider the party for the contract and if a party comes to court saying that the KPC should be stopped from doing so, the court will decline relief. The second consequence, indicated by this Court in earlier decisions, is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. For example, in this very case, the KPC made some changes in the time-frame originally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxations in other ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 32 wp3859.10 directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed."
(Emphasis supplied) No such case of prejudice was made out by the respondent before the High Court or before us."
Similarly, in paragraph 61, the apex Court has observed thus:-
"61. Law on the similar term has been laid down in Poddar Steel Corpn. v. Ganesh Engg. Works in the following terms: (SCC p. 276, para 6) "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 clause 6 of the tender notice was not obeyed literally, but the ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order
33 wp3859.10 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 with the condition in appropriate cases."
34. The apex Court in paragraph 66 of the said judgement recorded its finding in this regard, keeping in view the new principles of judicial review which were developed and summarised them by observing thus:-
"66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarised as ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 34 wp3859.10 under:
(i) if there are essential conditions, the same must be adhered to;
(ii)if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
(iii)if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;
(iv)the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order
35 wp3859.10 in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;
(vi)the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;
(vii)where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint."
35. The observations made by the apex Court in paragraph 67 which are relevant read thus:-
(Relevant observations). "67. Law operating in the field is no longer res integra. The application of law, however, would depend upon the facts and circumstances of each case."
36. The observations made by the apex Court in paragraph 69 are also relevant for the issues in question and read thus:-
"69. While saying so, however, we would like to ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 36 wp3859.10 observe that having regard to the fact that huge public money is involved, a public sector undertaking in view of the principles of good corporate governance may accept such tenders which are economically beneficial to it. It may be true that essential terms of the contract were required to be fulfilled. If a party failed and/or neglected to comply with the requisite conditions which were essential for consideration of its case by the employer, it cannot supply the details at a later stage or quote a lower rate upon ascertaining the rate quoted by others. Whether an employer has power of relaxation must be found out not only from the terms of the notice inviting tender but also the general practice prevailing in India. For the said purpose, the court may consider the practice prevailing in the past. Keeping in view a particular object, if in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf.
Once such a power is exercised, one of the questions which would arise for consideration by the superior courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 37 wp3859.10 themselves in exercise of their discretionary jurisdiction."
37. The above referred observations made by the apex Court in the cases of B.S.N.Joshi & Sons Ltd., Kanhaiya Lal Agarwal, Coastal Marine Construction and Engineering Ltd., and Tata Cellular (supra) clearly demonstrate that the conditions in the tender notice/document generally can be classified into two categories, viz., essential conditions of eligibility and ancillary conditions, which are primarily for the purpose of achieving the main object of the tender work. It also demonstrates that the authority floating the tender must insist upon compliance of essential conditions of eligibility and is not entitled to deviate from the essential conditions of eligibility. However, in case of ancillary or subsidiary conditions, it is open for the authority to deviate therefrom in a given case and for justifiable reasons. It is also clear that essential conditions of eligibility need to be scrupulously complied with by the bidder unless there is a specific power to relax or waive such eligibility condition mentioned in the document of tender or under the rules. However, in the absence thereof, adherence to such essential conditions of eligibility mentioned in the document of tender must be followed to serve the public interest.
::: Downloaded on - 09/06/2013 16:12:43 :::This Order is modified/corrected by Speaking to Minutes Order 38 wp3859.10
38. Similarly, the law declared by the apex Court further shows that lowest or highest bid is a relevant criterion while awarding public works to the contractor, but not the only criterion and mode of execution of work of the project must also ensure that the public interest is best served.
39. It is well-settled that whenever the condition of the tender document requires an act to be done in a particular manner and lays down the consequences in case of failure to comply with such requirement shall result in disqualifying such tender, such condition is an essential eligibility condition and compliance thereof is mandatory. However, substantial compliance may suffice to satisfy the requirement of ancillary conditions of tender. It is equally true that right to choose a bidder is always with an authority and the Court does not sit in appeal on the decision taken by the authority. However, if the authority exercises such power for any collateral purpose, exercise of that power can be struck down by the Court. Similarly, it is also equally well-settled that the principles of judicial review would apply to exercise of contractual powers by the Government bodies in order to prevent arbitrariness or favouritism. The decision taken by the State while accepting bids and awarding contract must be free from arbitrariness and should not be affected by bias and actuated by mala fides.
::: Downloaded on - 09/06/2013 16:12:43 :::This Order is modified/corrected by Speaking to Minutes Order 39 wp3859.10
40. The apex Court has clearly held that the law operating in the field is no longer res integra and the application thereof, however, would depend upon the facts and circumstances of each case. Hence, it will be appropriate now to consider the facts and circumstances of the present case in the context of the law declared by the apex Court on the subject.
41. In the instant case, clause 5.1.1 contemplates that the bids submitted by the bidders shall be initially examined to establish "responsiveness" and the bid may be deemed "non-responsive" if it does not satisfy the conditions mentioned in the sub-clauses of clause 5.1. In the case on hand, the relevant sub-clause is clause 5.1.1.10 which stipulates that if the response does not contain the applicable power of attorney as laid down in exh.6 of the RFP, in that event, in view of clause 5.1.1, such bid would be deemed to be non-responsive. In the instant case, the respondent no.1 issued RFP (Request for Proposal) in the month of January 2010 for appointment of distribution franchisee for distribution areas i.e. Aurangabad and Nagpur. The last date of submission of the bid document was 7.4.2010. The petitioner and M/s.GTL Ltd., submitted bids against both the RFPs., within the stipulated period. The respondent no.1 while scrutinising the bids, found that both these bids were not in conformity with condition no.5.1.1.10, however, the bid of M/s.GTL Ltd., though was not in conformity with the said condition, was permitted to ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 40 wp3859.10 rectify the said defect by the respondent no.1 by relaxing the said condition, however, such opportunity was not given to the petitioner to rectify the defect. It is, therefore, necessary to consider whether the act of the respondent no.1 is arbitrary, discriminatory and violative of Article 14 of the Constitution.
42. In the instant case, it is not in dispute that the bids were opened on 23.4.2010, and the bid of the petitioner was rejected only on the ground that it was not in conformity with clause 5.1.1.10. However, the communication was issued by the respondent no.1 to the petitioner only on 27.4.2010 and as per the petitioner, the said communication was through e-mail, was received by Mr.Ashish Sahay on 27.4.2010 at about 6.45 p.m. The respondent no.1 opened the financial bid of other bidders on 28.4.2010. The case of the petitioner is that when the bid of the petitioner was rejected on 23.4.2010, the respondent no.1 ought to have granted opportunity to the petitioner to produce the applicable power of attorney as per the said clause of the tender documents within time, which was given to M/s.GTL Ltd. It is the case of the petitioner that the action of the respondent no.1 is wholly arbitrary and discriminatory.
43. In the instant case, it is not in dispute that the respondent no.1 did not declare the bid of M/s.GTL Ltd. as "non-responsive" in spite of ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 41 wp3859.10 the deeming provision stipulated in clause 5.1.1, though it did not contain the applicable power of attorney as per clause 5.1.1.10. This act of the respondent no.1 would show that sub-clause 5.1.1.10 was not the essential condition of eligibility and failure to comply with the same would result in disqualifying the bid. If the said condition would have been an essential eligibility condition, in that event, in view of the law declared by the apex Court in this regard and in view of clause 5.1.1, the bids submitted by the petitioner as well as M/s.GTL Ltd., would be deemed to be non-responsive, since both the bids did not contain applicable power of attorney as per the said clause. On the other hand, the act of the respondent no.1 permitting M/s.GTL Ltd., to rectify the deficiency and not disqualifying the bid of M/s.GTL Ltd. on this count clearly demonstrates that the said condition was only an ancillary or subsidiary condition and, therefore, the respondent no.1 relaxed the same in case of M/s.GTL Ltd. However, the petitioner was not given the opportunity to rectify the deficiency in this regard. The question is whether the deviation/relaxation permitted in case of the bid of M/s.GTL Ltd., should have been given to the petitioner in order to avoid vice of Article 14?
44. It is the case of the respondent no.1 that M/s.GTL Ltd. submitted the attested true copy of the power of attorney which was notarised. The original power of attorney was in existence and it was also notarised prior ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 42 wp3859.10 to the last date of submission of bid and, therefore, the respondent no.1 decided to ask M/s.GTL Ltd. to submit the original power of attorney which was notarised. It is the stand of the respondent no.1 that since the power of attorney in the case of M/s.GTL Ltd. was a historical document and was in existence on the date of submission of the bid, the same was called for by the respondent no.1, whereas insofar as the petitioner is concerned, the power of attorney duly notarised was not in existence on the date of closing of the bid and, hence, the same could not be accepted nor the petitioner could be permitted to submit the requisite power of attorney duly notarised since the same would be a new document and tendered after the last date of submission of the bid.
45. In the instant case, it is not in dispute that the Chief Legal Advisor, the Company Secretary and Director (Finance) of the respondent no.1 were of the view that M/s.GTL Ltd. had submitted notarised copy of the duly executed power of attorney and, therefore, the original can be asked and the bid may be considered if the original is produced.
Similarly, it was also opined that the power of attorney, though executed but not notarised and was also not as per exh.6 submitted by the petitioner should not result in rejecting the tender submitted by the petitioner and the petitioner may be asked to submit another copy of the power of attorney duly notarised and if submitted, it can be considered. It is no ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 43 wp3859.10 doubt true that the opinion expressed by the Chief Legal Advisor, Company Secretary and Director (Finance) may not be, ip so facto, binding on the respondent no.1. However, the said opinion/advice given by these experts carries weightage and cannot be brushed aside by the respondent no.1 in a casual manner without any justification. The opinion expressed by these experts clearly demonstrates that condition no.5.1.1.10 was subsidiary or ancillary condition of tender and, therefore, the respondent no.1 has relaxed the same in case of M/s.GTL Ltd.
46. In the instant case, it is not at all in dispute that the power of attorney submitted by the petitioner as well as the respondent no.1 were not in conformity with clause 5.1.1.10 of the tender documents. Both these bids were evaluated and scrutinised by the Board members of the respondent no.1. The opinion expressed by the Board reflected in the note shows that the respondent no.1 could ask the petitioner to submit another copy of the power of attorney duly notarised and M/s.GTL Ltd., could also be asked to produce duly executed original notarised power of attorney since failure to comply with the condition stipulated in clause 5.1.1.10 of the tender document did not warrant rejection of the tender itself under clause 5.1.1. The Board, therefore, expressed that if the deficiencies are rectified by the petitioner as well as M/s.GTL Ltd., as per the requirement of clause 5.1.1.10, then their bids could be considered. In ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 44 wp3859.10 the instant case, the respondent no.1 has asked M/s.GTL Ltd. to submit the original power of attorney duly notarised as per clause 5.1.1.10, however did not give the same opportunity to the petitioner to rectify the said deficiency.
47. In the instant case, though clause 5.1.1 read with clause 5.1.1.10 of the tender document renders the bids submitted by the petitioner as well as M/s.GTL Ltd. non-responsive, in the absence of requisite power of attorney as required by the said condition, however, the respondent no.
1 made a deviation in this regard in relation to the bid of M/s.GTL Ltd., which clearly demonstrates that the respondent no.1 did have the power of relaxation and the said power, in fact, has been exercised by the respondent no.1 in case of M/s.GTL Ltd. It is well-settled that if there is no general power of relaxation, ordinarily, the same shall not be exercised by the authorities and the principle of strict compliance will be applied to comply with such conditions fully. However, if a deviation is made in respect of any of the bidders, in that event, it is evident that the authorities have a general power of relaxation and, therefore, it is obligatory on the part of the authorities to grant such benefit to all the bidders. If the authority has a general power of relaxation and if it is exercised in respect of one bidder, the authority is estopped from taking a defence that it is justified in not exercising the said power of relaxation in respect of other ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 45 wp3859.10 bidders because of some reasons. Either the authority has a power of relaxation or it does not have primarily depends upon the nature of condition of the tender document. However, once such power of relaxation is exercised in relation to one tender, the other bidders cannot be deprived of such relaxation only because the authority feels that way, based on some reasons. If the authority has a power of relaxation of condition, the benefit of such relaxation of condition must be given to all the bidders and cannot be restricted only in respect of one bidder, in order to avoid the vice of Article 14.
48. It is no doubt true that the power of judicial review of administrative order, the Court is concerned with the decision making process and cannot substitute the decision since it does not sit as an appellate Court. However, the decision making process must be just, fair, transparent and free from arbitrariness and should not be discriminatory.
If the decision making process results in arbitrariness and is not in conformity with Article 14 of the Constitution, in that event, this Court undoubtedly is entitled to set aside such decision which is based on the decision making process which is arbitrary and discriminatory. The decision rendered in the case of Tata Cellular (supra), the apex Court has held that the Court is concerned with the manner in which decisions are taken by the authorities and also stated the grounds upon which the ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 46 wp3859.10 administrative action is subject to control by judicial review. Those grounds are classified into three parts, viz., illegality, irrationality and procedural impropriety. The law declared by the apex Court in Tata Cellular permits judicial review of administrative action if the decision makers acted against the established principles of law while taking the decision. If the decision making process is arbitrary or discriminatory, undoubtedly, it would violate the mandate of Article 14 of the Constitution and, therefore, the decision taken would be unsustainable in law and the Court will be justified in setting aside the same while exercising the power of judicial review in this regard.
49. The conduct of the petitioner on 28.4.2010 as highlighted by the respondent no.1, in our view, has no nexus with the action of the respondent no.1 in rejecting the bid of the petitioner, as well as the issue involved in the present Writ Petition, apart from the fact that it has nothing to do with the decision making process undertaken by the respondent no.1 which has resulted in a decision whereby the bid of the petitioner came to be rejected. In the instant case, the bid submitted by the petitioner as well as AM/s.GTL Ltd. did comply with the conditions stipulated in clause 5.1.1.10 of the tender document and since the respondent no.1 exercised power of relaxation in favour of M/s.GTL Ltd., and permitted to rectify the deficiency, not to extend the same relaxation ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 47 wp3859.10 in respect of the bids of the petitioner, in our view, renders the decision making process undertaken by the respondent no.1 arbitrary and discriminatory and the decision taken by the respondent no.1, therefore, cannot be sustained in law being violative of Article 14 of the Constitution.
50. So far as the conduct of the petitioner on 28.4.2010 as demonstrated by the respondent no.1 to show that the petitioner has not approached this Court with clean hands and, therefore, the petition needs to be dismissed on this count is concerned, we would like to express that public authorities dealing with public contract are required to act in a fair and transparent manner, its actions should be in conformity with law and procedure applicable in this regard and must be free from arbitrariness and should not result in violation of Article 14 of the Constitution. The duty cast on the public authority is fundamental in nature and any deviation therefrom would not only render the action of such public authority arbitrary, but would also affect the public interest. In the instant case, for the reasons stated hereinabove, we have no hesitation to hold that the decision making process undertaken by the respondent no.1 suffers from the vice of arbitrariness and discrimination and the same is violative of Article 14 of the Constitution and, therefore, cannot be sustained in law. The respondent no.1 has made various allegations in ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 48 wp3859.10 respect of the conduct of the petitioner on 28.4.2010 which are denied by the petitioner. It is a disputed question of fact and since it is not connected with the action of the respondent no.1 in rejecting the bids of the petitioner, we don't think that the petition deserves to be dismissed on this count.
51. Similarly, for the reasons stated hereinabove, it is not necessary for this Court to consider the issue whether the power of attorney submitted by the petitioner could have been treated by the respondent no.1 as valid power of attorney as per clause 5.1.1.10 of the tender document, in view of the decision of the Delhi High Court in Grafitek International v.
K.K. Kaura & Ors. [96 (2002) Delhi Law Times 385]. Since we have already held that even if the power of attorney submitted by the petitioner though was not in conformity with the said clause, it was necessary for the respondent no.1 to permit the petitioner to rectify the said deficiency in view of the power of relaxation of the said condition was exercised by the respondent no.1 in favour of M/s.GTL Ltd.
52. For the reasons stated hereinabove, we answer question nos.(i) and (ii) mentioned in paragraph 33 by observing thus:-
The condition mentioned in clause 5.1.1.10 in the tender ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 49 wp3859.10 document is not the essential condition of eligibility, non-compliance of which would disqualify the bids submitted by the petitioner, since the said condition of the tender being an ancillary and subsidiary condition of the tender. Similarly, the respondent no.1 by relaxing the said condition permitted M/s.GTL Ltd., to rectify the defect, the petitioner was also legally entitled to get the benefit of the said relaxation. The action of the respondent no.1 permitting only M/s.GTL Ltd. to rectify the deficiency by relaxing the said condition and not extending the benefit of relaxation in respect of the petitioner, undoubtedly, renders the action of the respondent no.1 arbitrary, discriminatory and violative of Article 14 of the Constitution and, therefore, cannot be sustained in law.
53. It is well-settled that tenderers have a right to be considered and do not have fundamental right to carry on business with the Government.
Similarly, public authorities dealing with the contract are required to act in a just, fair and transparent manner and their action must be free from the vice of arbitrariness and must be in conformity with the provisions of Article 14 of the Constitution. In the instant case, for the reasons stated hereinabove, we have no hesitation to hold that the action of the respondent no.1 in rejecting the bids of the petitioner is arbitrary as well as discriminatory and the same being violative of Article 14 of the Constitution is liable to be quashed and set aside. It is not in dispute that ::: Downloaded on - 09/06/2013 16:12:43 ::: This Order is modified/corrected by Speaking to Minutes Order 50 wp3859.10 the respondent no.1 has not issued any Work Order by appointing distribution franchisee for distribution areas i.e. Aurangabad and Nagpur till this date. Similarly, in the present petition, the petitioner is challenging the action of the respondent no.1 in rejecting the technical bids of the petitioner and is not seeking any relief either against the respondent no.2 or intervenor and, therefore, in the facts and circumstances of the present case and for the reasons stated hereinabove, it will be appropriate to pass the following order:-
ORDER
(i) The impugned letters bearing Ref. No.Prin.Con./DF/402/12904 dated 27.4.2010 and Ref.No.Prin.Con./DF/403/12905 dated 27.4.2010 issued by the respondent no.1 are hereby quashed and set aside. The respondent no.1 is directed to permit the petitioner to submit applicable power of attorney as per condition no.5.1.1.10 as provided in the format provided in exh.6 within a period of three weeks from the date of communication of this judgment. If the petitioner submits the requisite power of attorney, the financial bid of the petitioner under Bid Specification No.DF-2/2009-10 -
January 2010 and DF-3/2009-10 be opened and be evaluated in accordance with the tender conditions, and take appropriate decision, in accordance with law and procedure applicable in this regard.
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(ii)Writ Petition is allowed. Rule is made absolute in the above terms.
No order as to costs.
(D.D. SINHA, J.) (MRS.MRIDULA BHATKAR,J.) ::: Downloaded on - 09/06/2013 16:12:43 :::