Bombay High Court
Bhaskar Industries Limited Through Its ... vs Maharashtra State Electricity ... on 27 August, 2007
Equivalent citations: 2008(1)BOMCR353, 2008(1)CTLJ194(BOM)
Author: A.H. Joshi
Bench: A.H. Joshi, R.C. Chavan
JUDGMENT A.H. Joshi, J.
1. Rule. Rule is made returnable forthwith. As the pleadings are complete, petition is heard finally.
2. The petitioner Nos. 1 and 3 are Limited Companies, while the petitioner No. 2 is an individual.
3. The petitioner No. 1 purchased the tender document on 21st April, 2007.
4. Petitioners claim that they formed the consortium on 30th April, 2007.
5. Admittedly, the tender, subject matter, is only a second exercise as far as the respondent is concerned after the experience at Bhiwandi, and naturally, first exercise for the petitioners as well.
6. The parties are concurring on the fact that there was a pre-bid meeting between the competitors and officers of the respondent.
7. After said pre-bid meeting, the respondent altered the profile of tender document and entered a new clause titled "5.3.9". The said Clause 5.3.9 reads as follows:
5.3.9 A bid must be submitted by a Bidding Company in its individual capacity only. Bids cannot be submitted through special purpose vehicle. Bids cannot be submitted by Bidding Consoritiums.
[quoted from page 90 of the Writ Petition Paper-Book].
It is also seen that corrections, essential and incidental to addition of Clause 5.3.9 were also made in various places in tender document.
8. It is admitted that the tender document incorporating changes and consequential modifications has been issued to petitioners and all others who had purchased the tender document earlier. Last date fixed earlier for furnishing bids was extended for enabling new and more bidders to enter the field.
9. The petitioners' grievance is as regards infusion of a new Clause 5.3.9, which, in turn, results in exclusion of those business organizations falling under the title "Bidder Consortium or consortium". According to the petitioners, since the tender document was purchased by the petitioners and they had formed the consortium on 30th April, 2007, the alteration in the conditions of tender and issue of a fresh tender document excluding them to enter the fray, has resulted in:
[1] restricting the competition, [2] the competition being reserved for the Companies or Firms or Proprietors bigger in size bidding in their own name and without any consortium, small players are excluded and denied the opportunity to participate in public bidding called by an Organization which is a 'State', [3] this change amounts to a change in the terms of bid or qualifications of bidder after the bidding has commenced, [4] public interest has come under peril and has not been taken care of, and [5] the alteration of conditions and exclusion of consortium bidders results in denial to them the fundamental right available under Clause 19[1][g] of the Constitution of India, and all these acts of modifying the tender conditions without assigning reasons therefor result into violation of a guarantee of fairness in public action under Article 14 of the Constitution of India.
10. According to the petitioners, the tender document itself defines that the very act of issuance of a tender document would mean commencement of the bid process. For this purpose, the petitioners have relied upon Clause 4.1.3 as found in page No. 46 of the document, which continues to be in the same form even in the amended tender document.
11. The petition has been opposed on various grounds, inter alia:
[a] that the tender document was purchased by the petitioner No. 1 and, therefore, it should not be transferred or negotiated in favour of any consortium, and, therefore, petitioner No. 1 has no locus standi to challenge the change, while other petitioners have no cause of action.
[b] By way of precautionary measure, the respondent wanted to avoid any contingency of a failure in performance of contract and any chaotic situation emerging therefrom and, therefore, wanted to deal with only such entrepreneurs who, on their own balance-sheet, could demonstrate their strength and would be able to sustain the responsibility.
[c] Though apparently, excluding consortium would result in reducing competing and restricting the class of the businessmen entering the bid fray, in fact, more bidders have entered by purchasing the tender documents and furnishing bids.
[d] The tender document was purchased on 21st April, 2007, consortium was formed on 30th April, 2007, the tender conditions were altered before 11th June, 2007, those were communicated to the petitioner No. 1 through letter dated 12th June, 2007, and the petitioners submitted a representation on 20th June, 2007, but did not take any further action. The issue was not pursued thereafter and at the fag end, i.e., on 20th August, 2007, when the tender process had reached almost finality, namely when on 27th August, 2007, the tenders were to be opened, the petitioners woke up late and rushed to this Court on last hours only showing bare anxiety or other undisclosed objects of the petitioners, rather than sincerity in pursuing the cause. Hence the petitioners are not bona fide pursers of lis, and also lack diligence.
[e] There is nothing on record to suggest that the interest of Company and public is not safeguarded, or has come in risk. Any conclusion to this effect is unfounded and premature, apart that it is baseless.
[f] According to the respondent, from none of the alleged illegalities or lapses on grounds urged by the petitioners, it has been demonstrated that any of the rights either emerging from fundamental rights, or from the doctrine of 'promissory estoppel' or 'a reasonable expectation' etc., is violated and, therefore, the petition is not maintainable.
[g] It is a clear case of change in the conditions, however, it does not amount to change in the conditions when the parties have furnished their bid and that after change is done, date fixed for furnishing the bids is extended and more bidders are permitted to enter the field. The change was done well in time before the bids were received and it did not, in any manner, amount to condonation of any of the conditions as to eligibility of the tenderers.
[h] It is absolutely a matter of Executive decision, which is taken after due deliberations that the respondent wanted to act reasonably and cautiously and, therefore, it was decided to proceed by excluding consortium.
12. Learned Advocate Mr. R.V. Thakur placed reliance on following Judgments:
[a] Rasbihari Panda etc. v. State of Orissa , [b] Monarch Infrastructure [P] Ltd. v. Commissioner Ulhasnagar Municipal Corporation and Ors. , [c] W. B. State Electricity Board v. Patel Engineering Co. Ltd., and Anr. [2001] 2 SCC 451, and [d] Union of India and Ors. v. Dinesh Engineering Corporation and Anr. ,
13. These judgments are relied to urge that:
[a] public interest ought to be primarily considered which is a dominating factor;
[b] exclusion of a consortium ought to have been avoided while changing of bid conditions after the bidding process has commenced, and [c] while the Courts should not sit in judicial review of every tender condition, alteration thereof in an arbitrary manner is always subject to judicial review.
14. While opposing the petition, learned Senior Advocate Mr. K.H. Deshpande relied upon the Judgments in cases of [1] Tata Cellular v. Union of India [1994] 6 SCC 651, and [2] Global Energy Ltd., and Anr. v. Adani Exports Ltd. and Ors. , to urge that the Court would not interfere with the terms of tender notice unless it was shown to be either arbitrary or discriminatory, or actuated by malice. Analysis and conclusions:
15. It reveals from submissions that though it is urged that excluding the offerers, who are consortium, would result in restricting the competition and would hamper the public interest, at this stage, it is revealed to be a speculative submission.
16. Consortium is not the only form of entrepreneur, whether legally recognized or otherwise, which can participate in bidding. On the other hand, different forms of business organizations, such as Companies, Partnership or Proprietory concerns can always bid.
17. It is certain that those who in their individual capacity find themselves short of eligibility on the basis of their balance-sheet, to sustain the scrutiny, which was to be undertaken by the respondent-Company, may have impelled them to come together for forming a consortium and participate in the bidding. This fact by itself, and certainly suggests that neither of them, taken in isolation, is willing or eligible to participate.
18. Exclusion of consortium by itself cannot be considered to be a matter of violation of fundamental rights of those who do not stand on their individual status for being eligible to furnish the bid, to be so eligible when joined together, when the employer, who has invited the offers, does, as a matter of policy, decide that the offers by consortium need not be invited. Moreover, present is hardly a second occasion in Maharashtra of tendering of this type and this is one step towards devising and perfecting the modalities.
19. It would be extremely hard to believe and accept that exclusion of a consortium from bidding would by itself amount to denial to the citizens a reasonable, equal and fair opportunity in the matter of bidding.
20. No mala fides are alleged attracting any further and deeper scrutiny of the grievance represented through this petition.
21. If, at this stage, Court interferes, it would lead to a result that Court is usurping the functions of the employer to choose and decide upon the modalities as to how the tender process should be, which certainly is not the function of the Court.
22. The allegation that the public interest has come under peril is a statement made without any details and without providing the details of material on which it is made. It is, thus, a speculative averment and has its extremely limited impact for its cognizance, and this apprehension is, therefore, rejected being wholly unsupported and premature.
23. With these findings and conclusions, we find that the petition does not call for interference. Petition is accordingly dismissed. Rule is discharged with costs.