Orissa High Court
Ms Gdcl Krishna Tcpl Jv vs State Of Odisha And Others on 21 September, 2017
Author: Vineet Saran
Bench: Vineet Saran
HIGH COURT OF ORISSA : CUTTACK
W.P.(C) NO. 19955 OF 2016
In the matter of an application under Article 226 of the
Constitution of India.
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M/s GDCL - KRISHNA - TCPL JV ........ Petitioner
AFR
-Versus-
State of Odisha and others ......... Opp. Parties
For petitioner : Mr. R.K. Rath, Senior Counsel,
along with M/s B.P. Das, S.N. Das,
D. Mohanty and J.P. Behera,
Advocates.
For opp. parties : Mr. S.P. Mishra,
Advocate General, along with
Mr. Ramesh Sahoo, Advocate
[O.Ps. No.2 and 3)
Mr. B.P. Pradhan,
Addl. Government Advocate
[O.P. No.1)
Mr. J. Pal, Advocate
[O.P. No.4)
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2
PRESENT:
THE HONOURABLE THE CHIEF JUSTICE MR. VINEET SARAN
AND
THE HONOURABLE DR. JUSTICE B.R. SARANGI
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Date of hearing: 13.09.2017 : Date of Judgment: 21.09.2017
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DR. B.R. SARANGI, J. M/s. Gannon Dunkerley and Company Limited
(GDCL), as lead partner, along with M/s. Krishna
Contractors (KRISHNA) and M/s. Technocraft Construction
Private Limited (TPCL) constituted a joint venture "M/s GDCL
- KRISHNA - TCPL JV", petitioner herein, for the purpose of
bidding and execution of the work, which was pursuant to
joint venture agreement dated 27.06.2016.
2. The Orissa Water Supply & Sewerage Board
(OWSSB), a Government of Odisha undertaking, on behalf of
the Department of Housing and Urban Development,
Government of Odisha issued a notice inviting bids on
national competitive bidding through e-procurement Bid
Identification No. OWSSB-14/2015-16 dated 22.03.2016
with Request For Proposal (RFP) for the work "construction of
3
sewerage system of Bhubaneswar sewerage district-II" under
EPC (Engineering, Procurement and Construction) contract
basis. The said notice indicated that the complete bid
document would be available from e-procurement portal of
the State Government from 26.03.2016 (11 hrs. IST) to
22.06.2016(17.00 hrs. IST). The bid was to be submitted online only and if submitted by any other mode, the same was not to be entertained. However, bid security, document fee, power of attorney and joint bidding agreement would be submitted physically by the bidder before the schedule date and time indicated in the RFP and subsequent corrigendum issued from time to time.
3. Pursuant to the notice inviting bid, the petitioner JV downloaded the RFP from the official website of opposite party no.1 and obtained the tender documents, along with all other conditions, which contains extensive instructions and procedure of tender allotment for the intending participants in the tender process. The methods of ascertaining the technical capacity of the bidders, amongst other conditions, were also specifically provided in the tender 4 documents. The petitioner JV, along with others, participated in the said tender process. However, after submission of the bid by the petitioner JV, opposite party no.2- OWSSB on 10.08.2016 wrote a letter to the leading partner of the petitioner JV intimating therein that some of the details were missing in the bid documents and requested to furnish such missing details/documents within seven days from the date of receipt of the said letter. In compliance thereto, the petitioner JV replied on 16.08.2016 and annexed all the documents required to the full satisfaction of opposite party no.2.
4. On 30.08.2016, opposite party no.2- OWSSB wrote a letter to the lead partner of petitioner JV with a clarification that as per clause 2.1.17 of RFP, in the event the bid due date fell within 3 months of the closing of the latest financial year of a bidder, it would ignore such financial year for the purpose of its bid and furnish all its information and certification with reference to the 5 (five) years or 1 (one) year, as the case may be, preceding its latest financial year. 5 Since bid due date as per RFP issued vide bid identification number, referred to above, was 26.06.2016, in Annexure-VI (information required to evaluate the bid capacity under clause), the Year 1 (one) was shown as 2014-15 and accordingly up-dation factors were provided. It was also further intimated that the bidders are required to consider 2015-16 as Year 1 and submit the information in the prescribed format duly signed by the statutory auditor for further evaluation of the bids. In response to the same, the petitioner JV replied on 05.09.2016 and submitted the requisite updated details in the prescribed format considering the year 2015-16 as Year 1 along with revised information for payment received for construction work during the last five financial years in the prescribed format and other supporting individual certificates of projects from statutory auditors for payments received during last five financial years.
5. The petitioner JV was intimated by opposite party no.2-OWSSB via e-mail on 19.09.2016 at 5.43 p.m. 6 that the bid submitted by the petitioner JV has been "admitted" by the Committee, and was further asked to get in touch with the Tender Inviting Authority for further information. But pursuant to another e-mail, which was sent at 7.06 pm on the very same day, i.e., on 19.09.2016 it was intimated to the petitioner JV that its bid has been rejected during technical evaluation for the reasons that it has failed to comply with the technical capacity, as sought for by opposite party no.2-OWSSB. The price bid was opened on 21.09.2016, in which opposite party no.-4 M/s. Laxmi Construction has been declared as lowest tenderer (L-1), though it has quoted higher price than that of the petitioner JV. Hence this application.
6. Mr. R.K. Rath, learned Senior Counsel appearing along with Mr. B.P. Das, learned counsel for the petitioner JV contended that as per clause-2.2.2.2 (i) and clause- 2.2.2.4 (i) of RFP, the lead partner should have received a sum of at least 60% of Rs.314.25 crores, i.e., Rs.188.55 crores and other two partners should have 7 received at least 30% of Rs.314.25 crores, i.e., 94.275 crores each in the preceding five financial years. As per the bid submitted by the petitioner JV, the lead partner has received a sum of Rs.530.51 crores with M/s Krishna Contractors having received a sum of Rs.143.65 crores and M/s Technocraft Construction Pvt. Ltd. received a sum of Rs.350.71 crores in the preceding five financial years from financial year 2011-12 to 2015-16, but opposite parties no.2 and 3 have rejected the bid of the petitioner JV at the technical evaluation stage on the ground that the petitioner JV do not qualify the technical capacity, which is illegal, arbitrary and violative of Article 14 and Article 19(1)(g) of the Constitution of India. It is further contended that as per the terms and conditions of the tender, as stipulated in the RFP, having been complied with and duly acknowledged by opposite parties no.2 and 3 on 17.08.2016, rejection of the bid of the petitioner JV due to non-compliance of the technical capacity of M/s. Krishna Contractors on the basis of the gross miscalculation is absolutely misconceived one 8 and, as such, cannot sustain in the eye of law. So also the consideration of the bid submitted by opposite party no.4 quoting higher price than that of the petitioner JV and declaring him as L-1 and eligible/ successful bidder also cannot sustain and should be quashed.
6.1 It is further contended that the rejection of the technical bid of the petitioner JV on the ground that M/s. Krishna Contractors does not meet at least 30% of the total technical capacity amounting to Rs.94.275 crores, for which it was disqualified in the technical bid, cannot sustain in view of the fact that on self-calculation pursuant to Annexure-13 at page 149 of the brief the total receipt during last five financial years (technical capacity) was Rs.143.53 crores, which is more than required amount of Rs.94.275 crores, which is much more than the requirement. Therefore, on the basis of erroneous calculation of the technical capacity of M/s. Krishna Contractors and on misinterpretation of relevant clauses of the RFP, the petitioner JV has been ousted from tender process. 9 6.2 It is further contended that the order dated 19.09.2016 rejecting the technical evaluation, being without assigning reasons, should be set aside. As such, the explanation given in the counter affidavit in support of such rejection, in order to justify the action of opposite parties no.2 and 3, cannot be accepted. Consequentially, the order of rejection so passed by the authority has to be quashed. In order to substantiate his contention, he has relied upon State of Punjab v. Bandeep Singh, (2016) 1 SCC 724; M/s. Shree Ganesh Construction v. State of Orissa, 2016(II) OLR 237; Reliance Energy Ltd v. Maharashtra State Road Development Corporation Ltd., (2007) 8 SCC 1; Central Bank of India v. Virudhunagar Steel Rolling Mills Ltd., AIR 2016 SC 191; Bank of India v. K. Mohandas, (2009) 5 SCC 313; Peacock Ply Wood (P) Ltd. v. Oriental Insurance Co. Ltd., (2006) 12 SCC 673; Radha Sundar Dutta v. Mohd. Jahadur Rahim, AIR 1959 SC 24; Sadaram Suryanarayana v. Kalla Surya Kantham, AIR 10 2011 SC 294; and M/s. Essel Mining and Industries Ltd. v. State of Odisha, AIR 2017 Orissa 74.
7. Mr. S.P. Mishra, learned Advocate General appearing along with Mr. R. Sahoo, learned counsel for opposite parties no.2 and 3 raised a preliminary objection with regard to maintainability of the writ petition due to non- joinder of proper parties. It is contended that as per clause- 2.2.2.2 (i) and clause-2.2.2.3 the lead member of the JV shall meet at least 60% requirement of technical capacity and each of other JV members shall meet at least 30% requirement, meaning thereby the lead member shall have to meet at least 60% of technical capacity of Rs.314.25 crores, i.e., Rs.188.55 crores and each of other JV members shall meet at least 30% requirement of technical capacity of Rs.314.25 crores, i.e., Rs.94.275 crores say Rs.94.28 crores. As per clause 2.2.2.6 (ii) of RFP, the project shall be considered as an "eligible project" under categories 3 and 4 provided that the bidder should have received payments from its client for construction works executed, fully or 11 partially, during the last five financial years amounting to but not less than Rs.12.60 crores. Though the lead partner and M/s. Technocraft Construction Pvt. Ltd. are meeting the requirement of technical capacities, but M/s. Krishna Contractors was not meeting the required technical capacity from its list of projects as claimed in the writ petition. 7.1 For the purpose of calculating technical capacity of M/s. Krishna Contractors, all the projects (Project Code "A" to "O"-15 nos.) including the non-eligible projects, i.e., projects against which the payment received is less than Rs.12.60 crores as specified in clause 2.2.2.6 (ii) of the RFP. The five financial years, such as 2011-12 to 2015- 16, instead of 2010-11 to 2014-15 have been taken into consideration, even though the accounts of M/s. Krishna Contractors alone was found to be not audited for the year 2015-16 as certified by the Statutory auditor as per the undertaking provided by them. It is further contended that on the basis of letter issued on 17.08.2016 by opposite party no.3 to the lead partner stating that M/s. Krishna 12 Contractors is having technical capacity of Rs.100.94 crores against the requirement of Rs.129.30 crores for the work of Bhubaneswar Sewerage District-I has been erroneously arrived at (financial figures taken wrongly from the certificates produced by the bidder during calculation) during the initial period of evaluation which was subsequently corrected as per actual and the revised technical capacity was found to be Rs. Nil. On conjoint reading of the technical and financial capacity as per clause- 2.2.2.2, 2.2.2.4 and 2.2.2.6(ii) of the tender conditions, the requirement having not been satisfied, opposite parties no.2 and 3 were justified in rejecting the technical bid of the petitioner JV.
7.2 It is further contended that even though the petitioner JV was given opportunity pursuant to letter dated 30.08.2016 and in response to the same the petitioner JV filed documents on 05.09.2016, but in terms of clause 2.2.2.8 (ii) the petitioner JV did not submit the audited annual reports in respect of M/s. Krishna Contractors for 13 the financial year 2015-16 and in lieu thereof it had submitted provisional balance-sheet which was not taken into consideration by the Board during the time of technical evaluation. Thereby, no illegality or irregularity was committed in such calculation so as to warrant any interference by this Court in exercise of power under Article 226 of the Constitution of India, and as such the power of judicial review of this Court is limited so far as contract matters are concerned. More particularly, as per clause- 2.2.2.6 (ii) of the RFP, for a project to qualify as an "eligible project", the sum total of payment received during five financial years immediately preceding the bid due date shall not be less than Rs.12.60 crores, and as per clause-2.2.2.8(i) and (ii) of the RFP, each of the preceding five financial years from the bid due date shall be considered as valid, if and only if, each of such financial years is supported with audited annual reports duly certified by the statutory auditor of the company. Only under such condition, the payment received during that valid financial year for an 14 "eligible project" shall be taken towards determination of the minimum monetary threshold, i.e., Rs.12.60 crores. 7.3 M/s. Krishna Contractors had furnished 15 number of projects against project code from 'A' to 'O', but as per details provided project-wise in each case where in case of each of the 10 projects, the sum total receipt of the payment in the five financial years including the financial year 2015-16 are below the minimum threshold requirement of Rs. 12.60 crores. Therefore, no illegality or irregularity has been committed by opposite parties no.2 and 3 in rejecting the technical bid of the petitioner JV. Accordingly, the action of the authority does not call for any interference by this Court.
7.4 It has been further contended that on proper technical as well as price evaluation opposite party no.4, having been found L-1, has been selected, and therefore such selection cannot be interfered with. In order to justify his contention he has relied upon Afcons Infracture Ltd. v. 15 Nagpur Metro Rail Corporation Ltd., AIR 2016 SC 4305 :
2016 Supreme (SC) 716; Central Coalfields Lt. v. SLL-SML (Joint Venture Consortium), 2016(8) SCALE 99; Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517; Chandra Sekhar Swain v. State of Odisha, 2017 (I) OLR 666; and Pramod Kumar Sahu v. State of Orissa, 2016(II) OLR 819.
8. Mr. B.P. Pradhan, learned Additional Government Advocate appearing for the State opposite party no.1 has adopted the contentions raised by learned Advocate General.
9. Mr. J. Pal, learned counsel appearing for opposite party no.4 contended that there is no pleading that the clauses of the contract are contrary to each other and as such having accepted the conditions of contract and participated in the proceeding subsequently having not come out successful, the petitioner cannot and could not turn around and say that the conditions of the contract are contrary to each other.
169.1 It is further contended that on the basis of the parameter fixed in the notice inviting tender and RFP, same being equal for each of the participants, the petitioner JV cannot and could not have raised such objection, having not come out successful in the technical bid, which is not permissible. Therefore, at its instance the writ petition cannot sustain and is liable to be dismissed. 9.2 It has been specifically contended that there is no justifiable reason to interfere with the process of selection made pursuant to the conditions stipulated in the tender documents, particularly when no allegation of mala fide or bias has been raised in the writ petition.
10. For the purpose of just and proper adjudication of the case, relevant provisions of the RFP contained in the notice inviting bids dated 22.03.2016 are extracted below:-
"1.3 Schedule of Bidding Process The authority shall endeavour to adhere to the following schedule:17
Sl. Event Description Date
No.
1 Invitation of RFP (NIT) 26.03.2016, 11.00 hrs. IST
2 Last date for receiving 19.04.2016, 17.00 hrs. IST
queries
3 Pre-BID meeting at venue 23.04.2016, 11.00 hrs. IST
2.11.4(i)
4 Authority response to 30.04.2016, 17.00 hrs. IST
queries latest by
5 Last date of request for BID 22.06.2016 17.00 hrs. IST
Document
6 Bid Due Date 23.06.2016, 17.00 hrs. IST
7 Physical Submission of Bid Up to 27.06.2016, 17.00
Security/POA etc. hrs IST
8 Opening of Technical BIDs 28.06.2016 at 11.30 hrs.
IST
9 Declaration of eligible/ [within 40 days from BID
qualified bidders Due Date]
10 Opening of Financial BID [within 50 days from BID
Due Date]
11 Letter of Award (LOA) [within 90 days from BID
Due Date]
12 Validity of BID [120 days from BID Due
Date]
13 Signing of Agreement [within 15 days of award
of LOA]
2.1.15 In case the Bidder is a Joint Venture, it
shall comply with the following
additional requirements:
Xx xx xx
(c) Members of the Joint Venture shall
nominate one member as the lead member
(the "Lead Member"). Lead Member shall
meet at least 60% requirement of Technical and Financial Capacity required as per Clause 2.2.2.2(i) & 2.2.2.3. The nomination(s) shall be supported by a Power of Attorney, as per the format at Appendix- III, signed by all the other Members of the Joint Venture. Other Member(s) shall meet at 18 least 30% requirement of Technical and Financial Capacity required as per Clause 2.2.2.2(i) & 2.2.2.3;
Xx xx xx
2.2 Eligibility and qualification
requirement of Bidder
XX XX XX
2.2.2.2 Technical Capacity
(i) For demonstrating technical capacity and
experience (the "Technical Capacity"), the Bidder shall, over the past 5 (five) financial years preceding the Bid Due Date, have received payments for construction of Eligible Projects (s), or has undertaken construction works by itself in a PPP project, such that the sum total thereof is more than Rs.314.25 crore (Rupees Three Hundred fourteen Crore Twenty five Lakh) (the "Threshold Technical Capacity").
(ii) Provided that at least one similar work of 50% of Estimated Project Cost [Rs.62.85 crore (Rupees Sixty two Crores Eighty five lakh)] shall have been completed from the Eligible Projects in Category 1 and/or Category 3 specified in Clause 2.2.2.5. For this purpose, a project shall be considered to be completed, if more than 90% of the value of work has been completed and such completed value of work is equal to or more than 50% of the estimated project cost.
2.2.2.3 Financial Capacity : The Bidder shall have a minimum Net Worth (the "Financial Capacity") of Rs.12.60 crores (Rupees Twelve Crore Sixty Lakh) only at the close of the preceding financial year.
192.2.2.4 In case of a joint venture:
(i) The Threshold Technical Capacity of Financial Capacity of all the Members of Joint Venture would be taken into account for satisfying the above conditions of eligibility. Further, Lead Member shall meet at least 60% requirement of Technical and Financial Capacity required as per Clause 2.2.2.2(i) and 2.2.2.3 and each of other JV members shall meet at least 30% requirement of Technical and Financial capacity as per Clause 2.2.2.2(i) and 2.2.2.3. For avoidance of doubt it is further clarified that the Joint Venture must collectively and individually satisfy the above qualification criteria.
(ii) For requirement of 2.2.2.2 (ii), one similar work of 50% of Estimated Project Cost should have been completed from the Eligible Projects in Category 1 and/or Category 3 specified in clause 2.2.2.5 individually by any of the JV members as a single work.
2.2.2.5. Categories and factors for evaluation of Technical Capacity:
(i) Subject to the provisions of Clause 2.2.2 the following categories of experience would qualify as Technical Capacity and eligible experience (the "Eligible Experience") in relation to eligible projects as stipulated in Clauses 2.2.2.6 (i) & (ii) (the "Eligible Projects"). In case the Bidder has experience across different categories, the experience for each category would be computed as per weight of following factors to arrive at its aggregated Eligible Experience:20
Category Project/Construction experience on Factors Eligible Projects 1 Project in Sewerage sector that 1 qualify under Clause 2.2.2.6(i) 2 Project in core sector that qualify 0.50 under Clause 2.2.2.6(i) 3 Construction of Sewerage sector 1 that qualify under Clause 2.2.2.6
(ii) 4 Construction in core sector that 0.50 qualify under Clause 2.2.2.6 (ii)
(ii) Deleted.
(iii) For the purpose of this RFP:
a) Sewerage sector would be deemed to include Wastewater Treatment Plant/Sewage Treatment Plant, Sewage Pumping Stations, Sewer line and appurtenances & associated civil, electrical, mechanical & instrumentation components.
b) Core sector would be deemed to include water supply projects, highways, expressways, bridges, tunnels, airfields, ports, airports, railways, metro rail, industrial parks/estates, logistic parks, irrigation, and real estate development.
2.2.2.6 Eligible Experience on Eligible Projects in respect of each category:
Xx xx xx
(ii) For a project to qualify as an Eligible Project
under Categories 3 and 4, the Bidder should have received payments from its client(s) for construction works executed, fully or partially, during the 5 (five) financial years immediately preceding the Bid Due Date, and only the amounts (gross) actually received, during such 5 (five) financial years shall qualify for purposes of computing the 21 Experience Score, However, receipts of less than Rs.12.60 crore (Rupees Twelve Crore Sixty Lakh) shall not be reckoned as receipts for Eligible Projects. For the avoidance of doubt, construction works shall not include supply of goods or equipment except when such goods or equipment form part of turn-
key construction contract/EPC contract for the project. Further, the cost of land shall not be included hereunder.
Xx xx xx
2.2.2.7 Submission in. support of Technical
Capacity.
(i) The Bidder should furnish the details of
Eligible Experience for the last 5 (five) financial years immediately preceding the Bid Due Date.
(ii) The Bidder must provide the necessary information relating to Technical Capacity as per format at Annex-II of Appendix-IA.
(iii) The Bidder should furnish the required Project-specific information and evidence in support of its claim of Technical Capacity, as per format at Annex-IV of Appendix-IA, 2.2.2.8 Submission in support of Financial capacity.
(i) The Technical Bid must be-accompanied by the Audited Annual Reports of the Bidder (of each Member in case of a Joint Venture) for the last 5 (five) financial years, preceding the year in which the bid is-submitted,
(ii) In case the annual accounts for the latest financial year are not audited and therefore the Bidder cannot make it available, the Bidder shall give an undertaking to this effect and the statutory auditor shall certify the same. In such a case, the Bidder shall 22 provide the Audited Annual Reports for 5 (five) years preceding the year for which the Audited Annual Report is not being provided.
(iii) The Bidder must establish the minimum Net Worth specified in Clause 2.2.2.3, and provide details as per format at Annex-III of Appendix-IA.
xx xx xx But subsequently, the opposite parties no. 2 and 3 has extended the bid due date and issued four separate corrigendum extending time for four times.
On 09.05.2016, in Corrigendum-III, RFP was amendment to the following effect:
"i. Clause 1.3 Schedule of Bidding Process, Page-
10, Section-1 : The schedule in respect of Sl. 1 to 8 is modified as below.
Sl. Event Description Date
No.
4 Authority's response to 10.05.2016
queries latest by
5 Last date for request of Bid 04.07.2016 17.00 hrs.
document IST
6 Bid due date 04.07.2016 17.00 hrs.
IST
7 Physical submission of Bid 05.07.2016 11.00 hrs.
security/POA etc. IST to
08.07.2016 17.00 hrs
IST
8 Opening of Technical Bids 11.07.2016 11.30 hrs.
IST"
23
On 28.06.2016 in Corrigendum -IX, the said bid was modified by extending time which is as follows:
"i. Clause 1.3, Schedule of Bidding Process, Page-
10, Section- 1: The schedule in respect of Sl. no. is modified.
Sl. Event Description Date
No
5 Last date for request of Bid 12.07.2016 17.00 hrs.
document IST
6 Bid due date 12.07.2016 17.00 hrs.
IST
7 Physical submission of Bid 13.07.2016 11.00 hrs.
security/POA etc. IST to
15.07.2016 17.00 hrs
IST
8 Opening of Technical Bids 16.07.2016 12.30 hrs.
IST"
On 01.07.2016 in Corrigendum -X, the said bid was modified by extending time which is as follows:
"Corrigendum IX, Page1, Clause 1.3, Schedule of Bidding Process (Page-10, Section 1 of RFP),
(ii) : The bidding schedule in respect of the following serial nos. is modified as below.
Sl. Event Description Date
No.
5 Last date for request of Bid 20.07.2016 17.00 hrs.
document IST
6 Bid due date 20.07.2016 17.00 hrs.
IST
7 Physical submission of Bid 21.07.2016 11.00 hrs.
security/POA etc. IST to
23.07.2016 17.00 hrs
IST
8 Opening of Technical Bids 25.07.2016 12.30 hrs.
IST"
24
On 19.07.2016 in Corrigendum -XII, the said bid was also modified by extending time which is as follows:
"i. Corrigendum X, Page 1, Sl. No. 3, Clause 1.3, Schedule of Bidding Process (Page-10, Section 1 of FFP), (ii) : The bidding schedule in respect of Sl. No. 5 to 8 is modified as below.
Sl. Event Description Date
No.
5 Last date for request of Bid 27.07.2016 17.00
document hrs. IST
6 Bid due date 27.07.2016 17.00
hrs. IST
7 Physical submission of Bid 28.07.2016 11.00
security/POA etc. hrs. IST to
30.07.2016 17.00 hrs
IST
8 Opening of Technical Bids 01.08.2016 11.30
hrs. IST"
11. Before delving into the merits of the case, it is necessary to consider the preliminary objection raised by Mr. S.P. Mishra, learned Advocate General with regard to maintainability of the writ petition due to non-joinder of parties. In paragraph-7 of the writ petition, the petitioner JV has categorically stated as follows:
"That it is pertinent to mention here that pursuant to the instruction contained in the Request For Proposal under Annexure-2 series, the petitioner JV participated in the tender process after complying with all the statutory requirements along with five other tenders namely M/s Laxmi Construction, present opposite party no.4, M/s UEM 25 India Pvt. Ltd., M/s Simplex Infrastructure Ltd., VA TECH Wabag Ltd., and Triveni Engineering and Industries Ltd."
From the above pleadings made in the writ petition it is evident that besides the petitioner JV, five other tenderers also participated in the tender process, but except L-1 bidder, M/s Laxmi Construction, no other tenderers have been made as parties to the proceeding.
In Afcons Infrastructure Ltd. (supra) the view of the High Court, that the eligible bidders were not entitled to be either impleaded in the petition filed in the High Court by the ineligible bidder or were not entitled to be heard, was negated by the apex Court and it was held that in order to avoid such situation that it would be more appropriate for the constitutional Courts to insist on all eligible bidders being made parties to the proceedings filed by an unsuccessful or ineligible bidder. In view of such finding arrived at by the apex Court, due to non-impletion of the other bidders, the writ petition suffers from non-joinder of parties.
26
12. Mr. R.K. Rath, learned Senior Counsel for the petitioner argued with vehemence that once the bid was "admitted" on 19.09.2016 at 5.43 p.m. by the committee, on the same day, i.e., on 19.09.2016 at 7.06 p.m., a communication was made that bid of the petitioner JV has been rejected during technical evaluation by the committee without assigning any reason. To answer such contention, it is worthwhile to mention that in the RFP certain essential conditions have been incorporated to ensure that the bidder selected would be technically and financially competent to fulfill the contractual obligations. The said conditions have been incorporated looking at the magnitude of the job which requires huge investment both quantitatively and qualitatively. Condition requiring past experience of a bidder for a similar nature of work has been incorporated with a view to invite experienced hands well equipped both financially and technically who can perform the work efficiently and effectively. Past credentials of the tenderer helps the principal to make a prognosis regarding the ability 27 of the tenderer to execute the work in question. Since M/s Krishna Contactors, one of the constituent members of the petitioner JV, has failed to fulfill the eligibility criteria as per the tender conditions, the technical bid of the petitioner JV has been rejected.
13. The petitioner JV has relied upon the letter dated 17.08.2016 to establish the eligibility of its constituent member M/s Krishna Contractors which was issued to the petitioner JV on the basis of a wrong calculation. When the letter dated 30.8.2016 was issued, the petitioner JV should have responded to the said letter in right perspective. In response to the letter dated 30.8.2016, the petitioner replied on 05.09.2016 and, as such, by the time the technical bid was opened, the petitioner was aware of the fact that in what way it has caused deficiency and is not satisfying the requirement of the condition stipulated in the RFP. A bare perusal of the documents filed by M/s Krishna Contractors in support of their eligibility would establish that the technical and financial capacity of M/s Krishna Contractors 28 is not meeting the requirements under clause-2.2.2.2, 2.2.2.4 and 2.2.2.6 (ii) of the tender conditions. More particularly, the petitioner has not approached this Court with a clean hand, meaning thereby a bare reading of clause- 2.2.2.(i) and 2.2.2.4 (i) of the RFP would suggest that lead partner should have to meet at least 60% of Rs.314.25 crores, i.e., Rs.188.55 crores and other two partners should have to meet at least 30% of Rs.314.25 crores, i.e., Rs.94.275 crores each in the preceding five financial years. This fact was made known to the petitioner JV very well because to that extent pleadings have been made in paragraph-1, which reads as follows:
"..................... Therefore, a bare reading of Clause 2.2.2.2 (i) and Clause 2.2.2.4 (i) of RFP would suggest that in the present case, the lead partner should have received a sum of at least 60% of Rs.314.25 Crores, i.e., Rs.188.55 Crores and other two partners should have received at least 30% of Rs.314.25 Crores, i.e., 94.275 Crores each in the preceding 5 financial years."
(Emphasis supplied) Similarly, in ground-D of paragraph-24 of the writ petition, it has been pleaded as follows:
"a bare reading of Clause 2.2.2.2 (i) and Clause 2.2.2.4
(i) of RFP would suggest that in the present case, the 29 lead partner should have received a sum of at least 60% of Rs.314.25 Crores, i.e., Rs.188.55 Crores and other two partners should have received at least 30% of Rs.314.25 Crores, i.e., 94.275 Crores each in the preceding 5 financial years."
(Emphasis supplied)
14. It is further contended that as per the bid submitted by the petitioner JV, the lead partner has received a sum of Rs.530.51 crores, M/s Krishna Contractors has received a sum of Rs.143.50 crores and M/s Technocraft Constructions has received a sum of Rs.350.71 crores in five preceding financial years, i.e., 2011-12 to 2015-16, which are much higher than the minimum requirement of Rs.94.275 crores, and as such the tender submitted by the petitioner JV could not have been rejected. It is admitted on behalf of the petitioner JV that out of three partners excluding the lead partner to satisfy 60% of Rs.314.25 crores, i.e., Rs.188.55 crores and two others should have at least 30% of requirement of technical capacity of Rs.314.25 crores, i.e., Rs.94.275 crores each in preceding five financial year, but one of the partners of the JV, viz., M/s Krishna Contractors having not satisfied such requirement, the 30 committee has rejected the technical bid submitted by the petitioner JV.
As per clause-2.2.2.2., the bidder must have received payments of construction of eligible projects or has undertaken construction works by itself in a PPP project over the past five financial years preceding the bid due date, such that the sum total thereof is more than Rs.314.25 crores, i.e., threshold technical capacity. As per clause-2.2.2.3, the bidder shall have a minimum net worth of Rs.12.60 crores at the close of the preceding financial year. In case, the bidder is a joint venture, as per clause-2.2.2.4, the threshold technical capacity and financial capacity of all the members of joint venture would be taken into account for satisfying the above conditions of eligibility. The lead partner shall meet at least 60% requirement of technical and financial capacity required as per clause-2.2.2.2.(i) and 2.2.2.3 and each of other JV members shall meet at least 30% requirement of technical and financial capacity as per clause-2.2.2.2.(i) and 2.2.2.3.
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15. In view of the provisions contained in clause- 2.1.15.(c) each other joint venture members shall meet at least 30% requirement of technical and financial capacity. Though the lead partner satisfies the requirement, so far as one of the members of the JV, viz., M/s Krishna Contractors does not satisfy the requirement of technical capacity of 30% of Rs.314.25 crores, i.e., Rs.94.275 crores say Rs.94.28 crores. As per clause 2.2.2.6 (ii) of the RFP, the project shall be considered as eligible project under categories 3 and 4 provided the bidder should have received payments from its client for construction works executed, fully or partially, during the five financial years amounting to but not less than Rs.12.60 crores. In the case of M/s Krishna Contractors, the petitioner JV for the purpose of calculating technical capacity had considered all the projects (Project Code A to O-15 nos.) including the non-eligible projects, i.e., project against which the payment received is less than Rs.12.60 crores as specified in RFP clause-2.2.2.6.(ii). The petitioner JV had also considered the five financial years as 32 2011-12 to 2015-16 instead of 2010-11 to 2014-15 even though its annual accounts were found to be not audited for the year 2015-16 as certified by the statutory auditor and also as per the undertaking provided by it.
16. As per clause-2.2.2.4 of the RFP, in case of joint venture it was further clarified that the joint venture must collectively and individually satisfy the qualification criteria as per clause-2.2.2.2(i). During the initial period of evaluation, a letter was issued by opposite party no.3 to the lead partner on 17.08.2016 stating that M/s Krishna Contractors having technical capacity of Rs.100.94 crores against the requirement of Rs.129.30 crores for the work of Bhubaneswar Sewerage District-I and not for this tender, i.e., for the work of Bhubaneswar Sewerage District-II, the amount of Rs.100.94 crores was erroneously arrived at (financial figures taken wrongly from the certificates produced by the bidder during calculation) and the same was subsequently corrected as per actual and the revised technical capacity was found to be Rs.Nil. On cumulative 33 reading of clauses-2.2.2.2, 2.2.2.4 and 2.2.2.6.(ii) of the tender condition, the tender submitted by the petitioner JV having not satisfied such condition, the same has been rejected rightly.
17. As per the conditions stipulated in the tender document, the petitioner JV has understood the provisions contained in clause-2.2.2.2 of the RFP and accordingly the petitioner JV is responsible to submit the necessary documents in order to prove its eligibility. More particularly, when a correspondence was made on 30.08.2016, in compliance of the same the petitioner JV has submitted the documents on 05.09.2016, the same has been taken into consideration by the tender committee. As per clause-2.1.17, which provides that in the event the bid due date falls within three months of the closing of the latest financial year of a bidder, it shall ignore such financial year for the purpose of the bid and furnish all its information and certification with reference to five years or one year, as the case may be, preceding its latest financial year.
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18. In clause-2.2.2.8(i) and (ii) of the RFP it is provided that the technical bid must be accompanied by the audited annual reports of the bidder (if each member in case of JV for the last five financial years preceding the year in which the bid is submitted). Further it is provided that in the event the annual accounts for the latest financial year are not audited and therefore the bidder cannot make it available, the bider shall give an undertaking to this effect and the statutory auditor shall certify the same. In such a case, the bidder shall provide the audited annual reports of five years, preceding the year for which the audited annual report is not being provided. Therefore, the cumulative effect of all these conditions make it clear that if the bidder due date falls after three months of the closing of the latest financial year of the bid, then the said financial year shall be taken into consideration for evaluating the technical and financial capacity of a bidder. However, for the latest financial year of the bid if the bidder is unable to provide the audited annual reports, then the bidder should give audited annual reports 35 of five years preceding the year for which audited certificate cannot be provided. Since the bid due date was extended as per the corrigendum issued up to 27.07.2016, therefore the year 2015-16 was treated as 1(one) financial year and the petitioner JV was accordingly informed vide letter dated 30.08.2016 clarifying the situation that it should provide the audited annual reports for the year 2015-16 and in the event the bidder is only to submit audited annual report for the year 2015-16 then the bidder was to provide a certificate of statutory auditor for the financial year 2015-16 and to provide audited annual reports for five years preceding the said financial year. Even though the petitioner JV was clarified by letter dated 30.08.2016, but it did not submit the audited annual report in respect of one of its joint venture member, viz., M/s Krishna Contractors in terms of clause- 2.2.2.8(ii) of the tender conditions for the financial year 2015- 16, but submitted the provisional balance sheet of M/s Krishna Contractors which was not taken into consideration by the Board during the time of technical evaluation. 36
19. The technical bids from all the bidders were downloaded from the website by the authorized officer of the Board on 01.08.2016 for verification and evaluation. The process of verification of documents electronically downloaded from the website was to be done manually and so is the process in case of evaluation of technical bids. The process of verification and evaluation was running concurrently and the bidders were communicated from time to time after 01.08.2016 for providing various clarifications to complete the manual process of verification as well as evaluation of technical bid. The evaluation committee sat twice on 30.08.2016 and 19.09.2016 to finalize the list of eligible bidders based on the date available in the technical bid and additional information provided by the bidders between the period 01.08.2016 and 19.09.2016. Two processes were completed on 19.09.2016, i.e., completion of verification of authenticity of all the technical bid documents submitted by all the bidders with the additional documents provided during the above period and completion of 37 evaluation process and issued all minutes of evaluation committee held on 19.09.2016. Therefore, all the technical bids were clear by allowing all of them as "admitted". At the first instance, the process of admission was carried out in the system in respect of all the bidders. Then, the result of evaluation was uploaded in the programme website. The whole process was completed in about an hour or so. In case of each operation, a programme generated e-mail and is automatically sent to all the bidders for their information. Therefore, the contention raised that on 19.09.2016 at 5.43 p.m. the bid has been admitted and on the very same day, i.e., on 19.09.2016 at 7.06 p.m. the petitioner JV has been communicated that the tender has been rejected during the technical evaluation, no infirmity can be found for such communication. More particularly, as per clause-3.1.9 of RFP after the communication of the result, there is no provision to communicate the bidder with regard to any query or clarification in case of failure of bidder to qualify. 38
20. From the document at Annexure-13 the evaluation of technical capacity done by the petitioner JV, which is self created document at page 149 of the brief, the petitioner has furnished 15 number of projects against project Code 'A' to 'O' under categories 3 and 4 separately in Annexure-IV of RFP. Similarly, opposite parties no.2 and 3 on the basis of the materials provided for preparing the statement, which has been filed as Annexure-F/3 at page 205 of the brief and is similar to Annexure-13, it is observed that the petitioner has provided details of the projects where in case of each of the ten projects the sum total receipt of payment in the five financial years including the financial year 2015-16 are below the minimum threshold requirement of Rs.12.60 crores. Therefore, the projects under project Code 'A', 'F', 'G', 'I', 'J', 'K', 'L', 'M', 'N' and 'O' are ineligible projects. In case of project Code 'B', instead of providing details of the single project, five projects have been combined together and the payment receipt details in the preceding five financial years including the year 2015-16 has been 39 provided. Therefore, the information so provided has not been taken into consideration as valid, since it does not comply with the definition of an "eligible project", as mentioned in clause- 2.2.2.6 of the RFP. In the said particular case, five distinct works having separate contracts and commenced in different years have been clubbed together, consequentially the same cannot be taken into consideration as per the provisions contained in the RFP. In case of project Code 'E' and 'H', payment receipt of five years have been provided against the financial years 2015-16, 2014-15, 1013-14, 1012-13 and 2011-12 totaling to Rs.12.83 crores and Rs.14.51 crores respectively. But the payment received during the financial 2015-16 has not been considered due to the fact that the same year has not been supported by the annual audit report. It has been admitted by the petitioner JV in its letter dated 05.09.2016 in reply to the letter dated 30.08.2016 that the only two projects having project Code 'C' and 'D', for which the total payment received during the last five financial years (excluding the year 2015- 40
16) was Rs.12.92 crores and Rs.15.87 crores, which is more than the threshold capacity of Rs.12.60 crores. Hence, these two projects were considered as eligible projects satisfying the RFP clause- 2.2.2.6 (ii). The two eligible projects, i.e., project Code 'C' and 'D' shall then be taken for calculation of the technical capacity. Total payment received in case of each of the above project shall then be multiplied with the updation factor prescribed in case of each financial year starting from the year 2015-16 to 2011-12, as provided in the table as per Annexure-VI. After applying the updation factor, the value for the project having project Code 'C' and 'D' is arrived at Rs.13.11 crores and Rs.17.23 crores. Therefore, total of these two values comes to Rs.30.34 croes which is the technical capacity of one of the members of the petitioner JV, viz., M/s Krishna Contractors which is much below the required technical capacity of Rs. 94.28 crores.
21. Mr. R.K. Rath, learned Senior Counsel appearing for the petitioner JV strenuously urged that in case there is ambiguity in the terms of tender, the document 41 would be read against the author of it. Such contention has been raised for the first time in course of hearing and there is no pleading to that extent available on record. Apart from the same, if there was any ambiguity in the terms of the tender, the petitioner JV never objected to such condition before rejection of its tender and as such, no material has been produced before this Court to substantiate such contention. Therefore, reliance placed on Virudhunagar Steel Rolling Mills Ltd. (supra) and K. Mohandas (supra) have no application to the present context.
22. Further the contention raised that the tender terms must indicate with legal certainty, norms and benchmarks and if there is vagueness or subjectivity in the said norms, then it may result in unequal and discriminatory treatment. On perusal of the conditions of the tender documents, this Court does not find any such infirmity or vagueness on such conditions so as to result in unequal and discriminatory treatment. More particularly, the terms and conditions mentioned in the tender paper are equal for all 42 who participated in the tender process. With eyes wide open, when the petitioner JV has participated in the proceeding, because it could not come out successful, cannot subsequently take such plea which is not permissible and more so, no material has been produced to that extent before this Court to substantiate such contention. Therefore, reliance placed on Reliance Energy Ltd. (surpa) cannot have any application to the present context.
23. Much emphasis has been laid by Mr. R.K. Rath, learned Senior Counsel appearing for the petitioner JV on the question that when there is conflict between two clauses and it is not possible to give effect to all of them, then it is the earlier clause that must override the later clause. The principle so laid down by the apex Court in Sadaram Suryanarayana (supra) there is no dispute on that score, but the petitioner JV has not pointed out any such conflict between two clauses and, more so, when the petitioner JV participated in the tender process without any prior objection 43 and after its tender being rejected, it is estopped to make such contention subsequently.
24. The additional ground cannot be supplemented through filing of affidavit and the order should speak for itself. This position of law is well settled in plethora of decisions of the apex Court as well of this Court. The present case is absolutely distinguishable in view of the fact that the petitioner JV having admitted in its pleading, to satisfy the requirement with regard to eligibility criteria, stating that each of the joint venture, apart from the lead partner, has to satisfy 30% of the requirement and admittedly one of the petitioner JV, M/s. Krishna Contractors having not satisfied the same and on that score, if the bid has been rejected, this Court does not find any infirmity in the order of rejection and as such, the rejection order dated 19.09.2016 so passed and communicated to the petitioner JV is wholly and fully justified.
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25. As regards the ratio decided in M/s. Essel Mining and Industries Ltd. (supra) to the extent that reasons being a necessary concomitant to passing an order, absence of the same makes the order void, is a well known principle. But the reasons having made known to the petitioner JV and having not satisfied the minimum requirement, as per the clauses stipulated in the RFP and on that score, the technical bid has been rejected.
26. The reliance placed on Central Coalfields Limited (supra), the apex Court has categorically stated that power of judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. When the power of judicial review is invoked in matters relating to tenders or award of contracts certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of control is bona fide and is in public 45 interest, Court will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. This view has also been taken by the apex Court in Tata Cellular v. Union of India, (1994) 6 SCC 651: AIR 1996 SC 11 and affirmed in Jagdish Mandal (supra). Therefore, this Court is of the considered view that the judgment of the apex Court is squarely applicable to the present context.
27. Mr. R.K. Rath, learned Senior Counsel placed much reliance on the letter dated 17.08.2016 of opposite party no.3 wherein it has been stated that M/s. Krishna Contractors Ltd. was having technical capacity of Rs.100.94 crores against the requirement of Rs.129.30 crores, for the work of Bhubaneswar Sewerage District-I and not for the work of Bhubaneswar Sewerage District-II. For the work Bhubaneswar District-I, the amount of Rs.100.94 crore was 46 erroneously arrived at (Financial figures taken wrongly from the certificates produced by the Bidder during calculation) during the initial period of evaluation and this was subsequently corrected as per actual and revised technical capacity was found to be Rs. Nil.
28. In view of the judgment of the apex Court in Chandra Sekhar Swain (supra) and Pramod Kumar Sahu (supra) wherein this Court held that if an unconscious, ignorance and forgetfulness of a facts has been taken into consideration and subsequently, it has been detected that a wrong has been committed, the authority has got right to rectify the same, if the mistake has been rectified, no benefit can be granted to the petitioner JV for such wrong mentioned in letter dated 17.08.2016. As such, the benefit cannot be admissible to the petitioner JV. Consequentially, for rejection of the technical bid of the petitioner JV as made by order dated 19.09.2016 no fault can be found with the authority concerned.
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29. Considering the factual and legal aspects, as discussed above, this Court is of the considered opinion that the writ petition merits no consideration and is thus dismissed. No order to cost.
Sd/-
(VINEET SARAN) CHIEF JUSTICE Sd/-
(DR. B.R. SARANGI) JUDGE Orissa High Court, Cuttack The 21st September, 2017, GDS/Alok/Ashok/Ajaya True Copy P.A.