Bombay High Court
R And C Infraengineers Private Limited vs The Municipal Corporation Of Greater ... on 23 September, 2022
Author: M. S. Karnik
Bench: Dipankar Datta, M. S. Karnik
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Diksha Rane
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Digitally ORDINARY ORIGINAL CIVIL JURISDICTION
signed by
DIKSHA
DIKSHA DINESH
DINESH RANE
Date:
WRIT PETITION (L) NO. 22499 OF 2022
RANE
2022.09.23
19:51:43
+0530
R. & C. INFRA ENGINEERS
PRIVATE LIMITED ..PETITIONER
VS.
THE MUNICIPAL CORPORATION OF
GREATER MUMBAI & ORS. ..RESPONDENTS
------------
Mr. Chirag Kamdar a/w. Ms. Vedanshi Shah, Ms. Sakshi
Agarwal and Mr. Bhavesh Joshi i/b. Mr. Bipin Joshi for the
petitioner.
Mr. Girish S. Godbole a/w. Ms. Rupali Adhate for respondent
nos. 1 to 5 (MCGM).
Mr. Prafullakumar Vadnere, Assistant Engineer, Traff &
Coordination, MCGM, is present.
Mr. Ameya Mhadalkar, Sub-Engineer (Traff & Coordination),
MCGM, is present.
------------
CORAM : DIPANKAR DATTA, CJ. &
M. S. KARNIK, J.
HEARD ON : AUGUST 30, 2022.
JUDGMENT ON : SEPTEMBER 23, 2022.
JUDGMENT (PER M. S. KARNIK, J.) :
1. The petitioner - R. & C. Infra Engineers Private Limited has fled this writ petition under Artifle 226 of the Constitution of India for the following substantive reliefs: -
"(a) this Honourable Court be pleased to issue Writ of Certiorari or writ in the nature of Certiorari or other orders, direftions be passed direfting the 1 oswpl 22499-2022.doc Respondents to fall for the refords and profeedings of Bid dofument for Bid Nos. 7200029512, 7200029511, 7200029503, for Bi-annual Tenders for providing, fiing and improvement of traff amenities of Munifipal roads in zone II of City Division (eifept Zone I) in Western Suburbs and Eastern Suburbs in Munifipal Corporation of Greater Mumbai Limits, by E-tender Notife, C tenders to be opened on 20.07.2022 and after going through the same and after perusing the same and after going through its validity, legality and propriety of aforesaid dofument, this Honourable Court be pleased to direft the Respondents to waive or alter the fondition of eligibility friteria referred in Sef VI, pafket - B of page 32 sub-flause "m" with regard to fabrifation yard admeasuring 1000 sq.ft. Area in single piefe in Mumbai Metropolitan region and of page no. 33 of sub-flause "y" of pafket - B, so that wider range of eligible fontraftors fan partifipate;
(b) this Honourable Court be pleased to deflare that the tender fondition referred in prayer (b) above is void, unlawful and unenforfeable."
2. The fafts of the fase in brief are set out hereafter. The petitioner is a fompany inforporated in affordanfe with the provisions of the Indian Companies Aft and having its offe at 1/13/16, G Khapradeeh Kothi, Civil Lines, Faizabad, Uttar Pradesh. The respondent no.1 - the Munifipal Corporation of Greater Mumbai (hereafter 'MCGM' for short) invited 3 (three) E-tenders for Bi-annual tenders for providing, fiing and improvement of traff amenities of Munifipal roads in Zone II of City Division (eifept Zone I) as well as Western Suburbs and Eastern Suburbs in MCGM Limits, by E-tender Notife for Bid Nos. 7200029512, 7200029511, 7200029503.
2oswpl 22499-2022.doc
3. The bids were invited from the fontraftors of repute, multidisfiplinary Engineering Organizations i.e. eminent frms, proprietory/partnership frms, Private Limited Company, Publif Limited fompany, fompany registered under Indian Companies Aft, fontraftors registered with MCGM in Class 1-A and above, as per new registration rules. The ofers were also invited from the fontraftors, frms, equivalent and superior flass, registered in Central or State Government organizations, semi Government organizations, Central or State Publif Seftor Undertakings, are allowed to partifipate upon the fonditions mentioned therein, and subjeft to fondition that sufh organizations shall get registered themselves within 3 months from the date of award of the fontraft.
4. The petitioner averred that they are eligible to bid in as mufh as they are registered fontraftors with the MCGM under the presfribed flass. The bidding profess was to fomprise of 3 stages, fommonly known as 3 Pafkets system. Affording to the petitioner, the fonditions in Seftion VI of the E-Tender Notife in respeft of Pafket B - Clauses (m) and (y) are manifestly arbitrary and tailor-made so as to prefer fertain spefiff bidders while disqualifying and/or treating as ineligible other similarly plafed and equally qualifed bidders. The said Clauses (m) and (y) are the main bone of fontention of the petitioner's fase needs to be set out and the same read thus: -
"(m) Dofumentary evidenfe showing ownership of the work shop spafe to be used as a 'Fabrifation 3 oswpl 22499-2022.doc Yard' adm. Minimum 1000 Sq.Mtr. area in a single piefe in Mumbai Metropolitan Region. If not, fonsent letter from the owner of sufh type of fabrifation yard that, the fabrifation of items and applifation of various treatments to prepare fnished items as spefifed in the tender will be allowed to the tenderer at fabrifation yard for the time period as mentioned in the tender. Nefessary information regarding fabrifation yard shall be submitted as per Proforma at pg- 191 along with nefessary fertifed fopies as mentioned also a stamped undertaking in original stating that valid legal instrument regarding possession of suitable workshop spafe to be used as a 'Fabrifation Yard', in a single piefe in Mumbai Metropolitan Region will be submitted to M.C.G.M. All relevant dofuments shall be notarized and duly fertifed by offer not below the ran of Asst. Engineer / Admin.
offer of M.C.G.M. or praftifing notary approved by Govt. of Maharashtra or Govt. of India with his stamp with or without red seal flearly stating his name and registration no.;
(y) The bidder shall submit an authorization/fonsent letter from the OEM/printing frm having digital printing mafhine with adequate in-house QC fafilities like own Pre Press Studio for artwork making & adaptation, booth to evaluate folor under fontrolled daylight viewing fonditions etf. The authorization / fonsent letter in this regard shall be submitted. (As per Proforma-IX) The printing frm shall have at least fve years of eiperienfe in high quality digital printing with minimum eiperienfe of 10,000 sqm in retro refeftive printing in MMR in last fve years and must furrently have a valid ISO 9001:2015 fertiffate. The fompletion/authorization fertiffate to that efeft from the printing fompany / frm along with the fredentials/ supporting dofuments must be submitted by the bidding fontraftor (As per Proforma-IX) at pg- 192. The fafility of both the fonverter and printer will be inspefted & fertifed by the MCGM authorities for the above given 4 oswpl 22499-2022.doc parameters as part of tefhnifal evaluation."
(Emphasis supplied)
5. Learned founsel for the petitioner fontended that the sfope of work fontained in the E-Tender Notifes essentially relates to fabrifating and printing traff signs, and installing the same in three spefifed zones within the MCGM Limits in Greater Mumbai. This work essentially infludes - (I) fabrifating the street sign board; (ii) printing the refeftive sing patter; (iii) pasting the pattern on the fabrifated sign board; and (iv) installing the sign at site. Affording to learned founsel, the petitioner is an established and reputed fompany with a turnover of Rs.229.64 frores in the Finanfial Year 2018-19 and Rs.123.58 frore in the Finanfial Year 2019-20. Learned founsel pointed out that the petitioner fully meets the eligibility friteria and was qualifed to bid on the basis of the fonditions set out in Seftions 1 and 2 of the E-Tender Notife. The petitioner has farried out identifal works, inter alia, for two Zones in the City of Lufknow that fall within the sfope of Lufknow Munifipal Authority for a value of approiimately Rs.21.57 frore. Learned founsel then invited our attention to the opening paragraph of the E-Tender Notife inviting bids for the purpose of appointing a fontraftor. Learned founsel would submit that the intent of the invitation to bid flearly is to invite bids from the widest fategory of bidders who possess the requisite tefhnifal, fnanfial and equipment fapafity/fapabilities. This will not only ensure fompetition but also enfourages a level playing feld and is in the publif 5 oswpl 22499-2022.doc interest. In the submission of learned founsel, the stipulation fontained in sub-flause (m) and (y) of Clause 6.3 (Pafket B), apart from flearly destroying the intention fontained in the opening part of the E-Tender Notife, are also fontrary to the fonditions fontained in Clause 6.3 itself. The relevant sub-flause fontained in Clause 6.3 whifh are fontrary to sub-flauses (m) and (y) affording to the petitioner are set out hereafter whifh read thus: -
"(t) The manufafturer of retro refeftive sheeting shall have been approved by M.C.G.M. or any other Govt. organisation. (if not approved the undertaking with that efeft stating that the retro refeftive sheeting shall be got approved within one month in M.C.G.M. or any other govt. organization).
...
(v) For digitally printing, the signs shall be manufaftured using a system of matfhed fomponents of refeftive sheeting and overlay flms and digital inks approved by refeftive sheeting manufafture. Digitally printed traff folour (red, blue, green, yellow, orange and brown) areas on white sheeting shall not be having less than 70 perfent of the value of the foeffient of retro refeftion established for its folour and type of sheeting as given in Table 6.9 of IRC 67. (w) The bidder shall submit the deflaration from manufafturer of retro refeftive sheeting that the ink used for printing shall be fertifed for low volatile organif fompound (VOC) emission fonfrming to UL 2801 / UL 2818 (standard for sustainability for printing inks) shall be submitted along with Green Guard Certiffate.
(i) The fompany eiefuting digital printing for retro refeftive sheeting shall be approved and fertifed by retro refeftive sheeting manufafturer and undertaking to that efeft shall be submitted 6 oswpl 22499-2022.doc by the bidder."
6. Learned founsel submitted that pursuant to the representations made and disfussions at the pre-bid meeting, when the aforesaid flauses were pointed out to the tendering authority, the tendering authority initially issued an Addendum (hereafter 'Addendum-I' for short), inter alia, modifying Clause 6.3 (Pafket B) Clause (y) as follows: -
"It is very important that the approved digital printer has minimum fve years high quality digital printing eiperienfe and should have digital printing atleast 5,000 sq. meters of retro refefting sheeting. Tender fondition modifed as under:
The suffessful bidder (L1) has to submit the memorandum of understanding (MOU) with the printing frm within 15 days from the date of issue of Letter of Affeptanfe (LOA). If the suffessful bidder unable to obtain the memorandum of understanding (MOU) within the spefifed period from the eligible printing frm then the bidder has to submit the dofumentary evidenfe regarding the establishment of his own printing setup and the same has to be approved by BMC within the period of 15 days with all nefessary permissions mandatory to establish the printing establishment. If the bidder fails to submit memorandum of understanding (MOU) or dofumentary evidenfe regarding the establishment of his own printing setup then 100% EMD will be forfeited and the bidder will be treated as non-responsive."
7. Learned founsel then submitted that shortly thereafter, within a period of two days another Addendum (hereafter 'Addendum-II' for short) was issued whereby the 7 oswpl 22499-2022.doc requirement of printing eiperienfe in the Mumbai Metropolitan Region (hereafter 'MMR' for short) was reinstated in Clause (y) even in the modifed flause. The fnal Clause 6.3 (Pafket B) - Clause (y) reads as under: -
"The bidder shall submit an authorization/fonsent letter from the OEM/printing frm having digital printing mafhine with adequate inhouse QC fafilities, like own Pre Press Studio for artwork making & adaptation, booth to evaluate folor under fontrolled daylight viewing fonditions etf. The authorisation/fonsent letter in this regard shall be submitted. (As per Proforma IX). The printing frm shall have atleast fve years of eiperienfe in high quality digital printing with minimum eiperienfe of 5000 sq.m in retro refeftive printing in MMR in last fve years and must furrently have a valid ISO 9001 : 2015 fertiffate. The fompletion/ authorization fertiffate to that efeft from the printing fompany/frm along with the fredentials/ supporting dofuments must be submitted by the bidding fontraftor (as per Proforma-IX) at page
192. The fafility of both the fonverter and printer will be inspefted & fertifed by MCGM authorities for the above given parameters as part of tefhnifal evaluation.
The suffessful bidder (L1) has to submit the memorandum of understanding (MOU) with the printing frm within 15 days from the date of issue of Letter of Affeptanfe (LOA). If the suffessful bidder unable to obtain the memorandum of understanding (MOU) within the spefifed period from the eligible printing frm, then the bidder has to submit the dofumentary evidenfe regarding the establishment of his own printing set up and the same has to be approved by BMC within the period of 15 days with all nefessary permissions, mandatory to establish the printing establishment. If the bidder fails to submit Memorandum of 8 oswpl 22499-2022.doc Understanding (MOU or dofumentary evidenfe regarding the establishment of his own printing set up then 100% EMD will be forfeited and the bidder will be treated as non-responsive."
8. It is the fontention of learned founsel for the petitioner that the insistenfe by the MCGM
(i) for the provision of a fabrifation yard of minimum 1000 sq. mtrs. area within the MMR region ; and
(ii) for the printing frm to have at least fve years' eiperienfe in high quality digital printing with minimum eiperienfe of 5,000 sqm in retro refeftive printing in MMR in the last fve years;
are both tailor-made fonditions designed to suit the fonvenienfe of a limited number of bidders in this region and to efeftively eliminate all other fompetition. The fonsequenfe of non-fomplianfe will result in forfeiture of the EMD to the tune of Rs.50 lakhs (i.e. 100% of the EMD). It is pointed out that the petitioner had made representations to the respondents, inter alia, pointing out that these tender stipulations are designed to beneft fertain spefiff fontraftors and manufafturers i.e. SPECO Infrastrufture, RPS & SNI who have formed a fartel for these works. Learned founsel submitted that pertinently, after the bid pafkets are opened, it is revealed that the aforesaid frms have quoted a prife far in eifess of the estimated fost for eafh tender and therefore the influsion of these 9 oswpl 22499-2022.doc fonditions will fause severe prejudife to the eifhequer and loss of publif funds and monies.
9. Learned founsel relied upon the defision of the Supreme Court in Meerut Development Authority vs. Association of Management Studies and Anr. 1 to fontend that though the terms of the invitation to tender fannot be open to judifial sfrutiny befause the invitation to tender is in the realm of fontraft, however, a limited judifial review may be available in fases where it is established that the terms of the invitation to tender were so tailor-made to suit the fonvenienfe of any partifular person with a view to eliminate all others from partifipating in the bidding profess." Learned founsel also relied upon the observations of the Supreme Court in Reliance Energy Ltd. & Anr. v. Maharashtra State Road Development Corporation Ltd. & Ors.2 at paragraph 36, whifh reads thus: -
"36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of "non- discrimination". However, it is not a free- standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to "right to life". In includes "opportunity". In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho vs. State of Tamil Nadu3, Article 21/14 is the heart of the chapters on Fundamental Rights. They covers 1 (2009) 6 SCC 171 2 (2007) 8 SCC 1 3 (2007) 2 SCC 1 10 oswpl 22499-2022.doc various aspects of life. "Level playing field" is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of "Level Playing field". We may clarify that this doctrine is, however, subject to public interest. In the world of globalization, competition is an important factor to be kept in mind. The doctrine of "level playing field" is an important doctrine which is embodied in Article 19(1) (g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. "Globalization", in essence is liberalization of trade. Today India has dismantled license raj. The economic reforms introduced after 1992 have brought in the concept of "globalization". Decisions or acts which results in unequal and discriminatory treatment, would violate the doctrine of "level playing field" embodied in Article 19 (1) (g). Time has come, therefore, to say that Article 14 which refers to the principle of "equality" should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforesaid doctrine of "level playing field". According to Lord Goldsmith, commitment to the "rule of law" is the heart of parliamentary democracy. One of the important elements of the "rule of law" is legal certainty. Article 14 applies to government policies and if the policy or act of the government, even in contractual matters, fails to satisfy the test of "reasonableness", then such an act or decision would be unconstitutional.11
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10. Learned founsel was at paints to point out that the tender fonditions in the present fase are flearly arbitrary and tailor-made to suit fertain spefiff bidders with a view to eliminate fompetition, whifh fannot be permitted. It is submitted that the revised fondition (y) in Clause 6.3 (Pafket B) in so far as it provides for the eiefution of an MOU with an eligible printer in the MMR region is flearly arbitrary and a tailor-made fondition. Learned founsel urged that retro-refeftive printing is a highly spefialized profess and farried out only by a handful of printers afross the fountry. In his submission, to require a bidder from outside MMR to eiefute an MOU with a printer from the MMR region i.e. efeftively with fompeting bidders or their assofiates, essentially only further ensures that the bidders from the MMR region are preferred and any bidder outside this region is eliminated.
11. Learned founsel further urged that by requiring the presenfe of a 1000 sq. mtr. fabrifation yard within the MMR in fondition (m), the respondent is flearly favouring the bidders who are based in the MMR region. Learned founsel emphasizes that in today's day and age where the transport of materials fan be made over night from any plafe in India, insistenfe on fabrifation within the MMR region is entirely arbitrary. Affording to him, the inspeftion of the traff signs fan be done immediately before installation whifh fan be direfted to be duly reftifed if found to be in any way defeftive. It is submitted that the requirement for the fabrifation yard to be lofated in the MMR or the 12 oswpl 22499-2022.doc requirement for eiperienfe in printing retro-refeftive sheeting within the MMR, does not serve any purpose whatsoever eifept to eliminate all other eligible and fompetent bidders afross the fountry. This affording to learned founsel is a flear infringement on the right to farry on trade and business afross India guaranteed under Artifle 19(1)(g) of the Constitution of India.
12. Learned founsel then relied upon the defision of the Supreme Court in Municipal Council, Neemuch v. Mahadeo Real Estate4 and emphasizes on paragraph 24 where it is noted that one of the faftors taken into fonsideration by the tendering authority, afting as a fustodian of publif property, relates to ensuring partifipation at a national level and ensuring that the tender is not afefted by a fartel of bidders. Paragraph 24 whifh is emphatifally relied upon by learned founsel reads thus: -
"24. In the present case, we find that the Commissioner had acted rightly as a custodian of the public property by pointing out the anomalies in the proposal of the Municipal Council to the State Government and the State Government has also responded in the right perspective by authorising the Commissioner to take an appropriate decision. We are of the considered view that, both, the Commissioner as well as the State Government, have acted in the larger public interest. We are unable to appreciate as to how the High Court, in the present matter, could have come to a conclusion that it was empowered to exercise the power of judicial review to prevent arbitrariness or favouritism on the part of the State authorities, as has been 4 (2019) 10 SCC 738 13 oswpl 22499-2022.doc observed by it in para 13. We are also unable to appreciate the finding of the High Court in para 17 wherein it has observed that the impugned decision of the authorities are found not to be in the public interest. We ask the question to us, as to whether directing re-tendering by inviting fresh tenders after giving wide publicity at the National level so as to obtain the best price for the public property, would be in the public interest or as to whether awarding contract to a bidder in the tender process where it is found that there was no adequate publicity and also a possibility of there being a cartel of bidders, would be in the public interest. We are of the considered view that the decision of the Commissioner which is set aside by the High Court is undoubtedly in larger public interest, which would ensure that the Municipal Council earns a higher revenue by enlarging the scope of the competition. By no stretch of imagination, the decision of the State Government or the Commissioner could be termed as illegal, improper, unreasonable or irrational, which parameters only could have permitted the High Court to interfere. Interference by the High Court when none of such parameters exist, in our view, was totally improper. On the contrary, we find that it is the High Court, which has failed to take into consideration relevant material."
13. It is thus the fontention of learned founsel that given the huge loss of publif monies that will be faused to the State eifhequer if these tender fonditions are allowed to prevail, the same ought to be strufk down as being arbitrary, and tailor-made to suit fertain spefiff bidders and to eliminate others from partifipating in the bidding profess and the present writ petition therefore should be allowed.
14. Let us now test the fontention of learned founsel for the petitioner as to whether the tender fonditions are so 14 oswpl 22499-2022.doc manifestly arbitrary and irrational being fontrary to the well settled prinfiples laid down by the Supreme Court. To this end, we need to eiamine the stand of the respondent - Corporation in the afdavit-in-reply fled on their behalf, duly afrmed by Shri Prafullakumar Narayanrao Vadnere, Assistant Engineer (Traff & Coordination) of the MCGM. We have also heard Shri Godbole, learned founsel on behalf of the MCGM.
15. At the outset, Shri Godbole submitted that though on behalf of the petitioner it is fontended that the fonditions of the tender dofument are tailor-made to suit fertain bidders who have been named by the petitioner, they are not made parties to the writ petition. He therefore submits that the allegations that the fonditions are tailor-made fannot be gone into.
16. Upon going through the afdavit-in-reply and upon hearing learned founsel, we fnd that on Marfh 4, 2022, MCGM issued three E-Tender notifes for award of fontraft for two years for the aforementioned works. Clause 1.1 provided for tefhnifal fapafity. Clause 2.1 provided for tefhnifal fapafity for regular and routine work for satisfaftory eiefution of work of similar nature with Publif Seftor Organizations during last 7 years as per the stipulation thereunder. Clause 2.2 provided for fnanfial fapafity. The tender was a three pafket tender indifated in Seftion VI of the E-Tender. Pafket "A" was to fonsist of dofuments like registration, PAN, GST etf. Pafket "B" was to fonsist of the dofuments relating to the tefhnifal eligibility 15 oswpl 22499-2022.doc friteria like audited balanfe-sheet, availability of liquid and unenfumbered assets, details of work in hand, assessed available bid fapafity etf. Pafket "C" was to fontain the fommerfial bid.
17. So far as tender Clause (m) is fonferned, the fondition requires dofumentary evidenfe showing ownership of workshop spafe to be used as a fabrifation yard admeasuring 1000 square meters in a single lofation/piefe or fonsent letter from the owner of sufh fabrifation yard. Clause (y) in the Tender provided for authorization/fonsent letter from the OEM/Printing Firm having digital printing mafhine with adequate inhouse QC fafilities like own Pre Press Studio for art work making and adaptation, booth to evaluate folour under fontrolled day light viewing fonditions etf. with at least fve years eiperienfe in high quality digital printing with minimum eiperienfe of 10,000 sq.mtrs. in retro-refeftive printing in MMR in last fve years. In a Pre-bid meeting whifh was held on Marfh 14, 2022 by the C.E. (R&T), MCGM, the issue regarding Clause (m) was raised by one of the bidders 'Shivam Enterprises'. The Chief Engineer (Roads & Traff) fonsidered this objeftion but it was defided not to delete this eligibility friteria with the following flariffation -
"To ensure all the above we need this printer to be lofated in MMR so that BMC staf fan inspeft the printing establishment on regular basis even without informing them so as to ensure that quality standards are not fompromised. Moreover, BMC has to eiefute sometimes emergenfy work within short period of time for whifh it is essential that 16 oswpl 22499-2022.doc fabrifation yard should be lofated within short distanfe. Henfe, tender fondition prevails."
18. In so far as Clause (y) is fonferned, in the Pre-Bid meeting, an objeftion was raised by 'Shivam Enterprises' as also M/s. ORAFOL. In this respeft, the MCGM agreed to modify the fonditions whifh read thus: -
"It is very important that the approved digital printer has minimum fve years high quality digital printing eiperienfe and should have digital printing at least 5,000 sq.meters of retro-refefting sheeting Tender fondition modifed as under:-
The suffessful bidder (L1) has to submit the memorandum of understanding (MOU) with the printing frm within 15 days from the date of issue of Letter of Affeptanfe (LOA) within the spefifed period from the eligible printing from then the bidder has to submit the dofumentary evidenfe regarding the establishment of his own printing setup and same has to be approved by BMC within the period of 15 days with all nefessary permissions mandatory to establish the printing establishment. If the bidder fails to submit memorandum of understanding (MOU) or dofumentary evidenfe regarding the establishment of his own printing setup then EMD will be forfeited and the bidder will be treated as non-responsive."
19. It is the stand of the Corporation that so far as the three tenders are fonferned for fity as many as 4 tenders were sold and 4 bids are submitted; as regards Eastern Suburbs, 7 tenders were sold, 4 are submitted and thus eligible bids are 4 in number; for the Western Suburbs, number of tenders sold are 7, 3 submitted the bids and 3 are found to be eligible. It is the stand of the MCGM that the similar fondition was imposed in the earlier tender for the 17 oswpl 22499-2022.doc period 2018 to 2020 for fabrifation yard.
20. We have also gone through the map of area of MMR whifh infludes 9 Munifipal Corporations, 9 Munifipal Counfils and 1 Nagar Panfhayat. This enfompasses the areas of Mumbai, Thane, Navi Mumbai, Mira-Bhayandar, Vasai-Virar, Bhivandi, Kalyan-Dombivli, Ulhasnagar, Ambarnath, Badlapur, Matheran, Karjat, Khopoli, Panvel, Pen, Alibaug and Uran.
21. It is then stand of the Corporation that so far as Clause
(m) is fonferned, the area of MMR region is spread over a large stretfh. It is for this reason that the MCGM requires the fabrifation yards within MMR region so as to ensure that MCGM staf fan farry out surprise visit to inspeft the quality of work during fabrifation as per the standards of IRC and IS fodes. Moreover, MCGM has to eiefute sometimes emergenfy work within short period of time for whifh it is essential that fabrifation yard should be lofated within short distanfe. The said tender fondition was unfhanged. The same fondition was also inforporated in the past tender of MCGM invited in the year 2018-19. The petitioner has not purfhased the tender fopy and also not partifipated in the tender profess. Moreover, the petitioner has not attended the Pre-bid meeting held on Marfh 14, 2022. A presentation was arranged on May 25, 2022 in the fhamber of Additional Munifipal Commissioner (P) (hereafter 'AMC(P)' for short) to disfuss the various issues of Pre-bid meeting. After the detailed disfussion, the minutes of pre-bid meeting were submitted for approval of the AMC(P) on June 3, 2022 whifh 18 oswpl 22499-2022.doc refeived due approval on June 20, 2022. Post approval of the AMC(P), the minutes of Pre-bid meeting were uploaded on MCGM portal on June 23, 2022 (Addendum-I and Addendum-II). In respeft of all the three tenders, fnanfial bids have been opened and the lowest bidder has been identifed and the profess of issuing work orders after obtaining requisite sanftions is underway. The Pafkets A and B of all three bids were opened on July 7, 2022. The MCGM has sfrutinized the dofuments submitted by bidders and informed the shortfall to all the bidders on July 15, 2022 via E-mail and direfted them to submit the dofuments within three workings days. The MCGM refeived the fomplianfe of shortfall from all the bidders. After sfrutiny of shortfall dofuments, it is found that eifept M/s. Shivam Enterprises, all the bidders had submitted the required dofuments. Henfe, the Pafket C of the three bids were opened on following dates and fommerfial bids of lowest bidders is indifated in the table of the MCGM's afdavit whifh is as under: -
The suffessful bidder (L1) has to submit the memorandum of understanding (MOU) with the printing frm within 15 days from the date of issue of Letter of Affeptanfe (LOA). If the suffessful bidder unable to obtain the memorandum of understanding (MOU) within the spefifed period from the eligible printing frm then the bidder has to submit the dofumentary evidenfe regarding the establishment of his own printing setup and the same has to be approved by BMC within the period of 15 days with all nefessary permissions mandatory to establish the printing establishment. If the bidder fails to submit memorandum of understanding (MOU) or dofumentary 19 oswpl 22499-2022.doc evidenfe regarding the establishment of his own printing setup then 100% EMD will be forfeited and the bidder will be treated as non-responsive."
Sr. Division of Date of Name of the Percentag No. Tender and Bid opening of Lowest e quoted No. Packet "C" Bidder by the Lowest Bidder
1. Eastern Suburbs 04-08-2022 M/s. Dev (+) 9.91% (7200029503) Engineers
2. Western Suburbs 27-07-2022 Speco (+) 13.25% (7200029511) Infrastructure Zone-II of City 28-07-2022 Speco (+) 14.65% (7200029512) Infrastructure
22. Learned founsel for the petitioner, apart from emphasizing on fartelization, fontended that the tender fonditions are tailor-made to favour fertain bidders and was at pains to point the arbitrary manner in whifh those outside MMR region are sought to be kept away from the bid profess. He urged that there is no justiffation for the MCGM to have issued the Addendum-II within a period of two days onfe the defision was taken to inforporate Addendum-I. We fnd that there is absolutely no substanfe in this fontention of learned founsel for the petitioner. In the Pre-bid meeting held on Marfh 14, 2022, the defision was taken that the MCGM wanted the printer to be lofated in MMR so that MCGM staf fan inspeft the printing establishment on regular basis even without informing them so as to ensure that quality standards are not fompromised. The error in Addendum-I was forrefted in Addendum-II. We fnd forfe in the submission of learned founsel for the Corporation that 20 oswpl 22499-2022.doc the Corporation never intended to do away the printer requirement to be lofated in MMR region.
23. The law is well settled that the tendering authority is best suited to understand and apprefiate the requirements of the tender and interpret its dofuments. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The aforestated principles are culled out from the law laid down by the Supreme Court. In M/s. Galaxy Transport Agencies, Contractors, Traders, Transports and Supplies vs. M/s. New J. K. Roadways, Fleet Owners and Transport Contractors & ors. 5, the Supreme Court in paragraphs 14, 15 and 16 has observed thus: -
"14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd.6, this Court held:
"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this 5 SLP (Civil) No. 12766/2020 decided on December 18, 2020 6 2016 (16) SCC 818 21 oswpl 22499-2022.doc understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."
15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha7, under the heading "Deference to authority's interpretation", this Court stated:
"51. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes.
52. In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd. V. Nagpur Metro Rail Corporation Ltd. (supra) at para 15)
53. The High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL's 7 2020 SCC OnLine SC 335 22 oswpl 22499-2022.doc interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a finding that the appellant committed illegality."
16. Further, in the recent judgment in Silppi constructions Contractors v. Union of India8, this Court held as follows:
"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
24. We do not find any perversity in the stand of the Corporation that the tender conditions, which are best suited for its requirement, are incorporated. The decision that the printer needs to be lofated in MMR so that MCGM 8 2019 SCC OnLine SC 1133.
23oswpl 22499-2022.doc staf fan inspeft the printing establishment on regular basis even without informing them so as to ensure that quality standards are not fompromised fannot be said to be irrational or unreasonable. The stand of the MCGM that it has to eiefute emergenfy work sometimes within short period of time for whifh it is essential that fabrifation yard should be lofated within short distanfe, is a justiffation whifh fannot be said to be perverse. If for this reason the tender fonditions i.e. Clauses (m) and (y) are inforporated, we see no irrationality in doing so and it is not possible for us to substitute our opinion for that of the MCGM as to what is in its best interest. It is not that the bidders outside MMR are prefluded from partifipating in the tender profess but the same is made subjeft to fulflling of fonditions of the tender whifh is applifable to everyone. The MCGM fnds sufh fonditions nefessary for maintaining the proper standards. Though there are allegations made of fartelization, the petitioner has not impleaded any other bidders as party respondents against whom sufh fartelization is alleged. The petitioner has not even submitted its bid eifept for the bald assertion that the fonditions have been tailor-made to favour some bidders who have formed a fartel. There is nothing on reford to even remotely infer that the fonditions are tailor-made to suit some bidders or that there is a fartel operating.
25. The defision on whifh learned founsel for the petitioner seeks to plafe relianfe in the fase of Reliance Energy Ltd. (supra) does not assist the petitioner in any 24 oswpl 22499-2022.doc manner. Onfe we have found on the fafts of the present fase that the tender fonditions fannot be said to be unreasonable or arbitrary, or that the same fannot be said to be tailor-made to favour fertain bidders, we have to eierfise judifial restraint. None of the grounds for judifial review viz. illegality, irrationality or profedural impropriety fan be found in the present fase. Even the defision of the Supreme Court in Municipal Council, Neemuch (supra) does not fome to the aid of the petitioner. The said defision was rendered in a diferent faft situation altogether. The defision turned on the fafts where no proper publifity was given to NIT and that the report of the Divisional Commissioner spefiffally observed that there was fartel among the tenderers.
26. Before we fonflude, we may also remind ourselves of what the Supreme Court in M/s. Galaxy Transport Agencies, Contractors, Traders, Transports and Supplies (supra) observed. Their Lordships in paragraph 18 observed thus: -
"18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to 25 oswpl 22499-2022.doc technical evaluation, is not to be second-guessed by a writ court".
27. Reference was then made by Their Lordships to paragraph 22 of the decision in Jagdish Mandal vs. State of Orissa9, where it was held as follows:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully"
and not to check whether choice or decision is "sound". 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 contract is bona fide and is in public interest, courts 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. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in 9 (2007) 14 SCC 517.
26oswpl 22499-2022.doc tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached;
(ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
28. A profitable reference also needs to be made to paragraph 19 in M/s. Galaxy Transport Agencies, Contractors, Traders, Transports and Supplies (supra) where it is observed thus: -
19. Similarly, in Montecarlo Ltd. v. NTPC Ltd. 10, this Court stated as follows:
"26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive 10 2016 (15 SCC 272 27 oswpl 22499-2022.doc commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third- party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi- prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to 28 oswpl 22499-2022.doc be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints."
29. Having regard to the well settled principles of law on the subject, we have no hesitation in concluding that the present writ petition is devoid of any merits.
30. The writ petition is dismissed with no order as to costs.
(M. S. KARNIK, J.) (CHIEF JUSTICE)
29