Rajasthan High Court - Jaipur
Project Director Ruidp And Ors vs Ms Ramky Infrastrucutre Ltd And Anr on 29 March, 2019
Bench: Mohammad Rafiq, Goverdhan Bardhar
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Special Appeal (Writ) No.804/2018
With
D.B. Civil Misc. Stay Application No.10067/2018
In
S.B. Civil Writ Petition No.17954/2017
1. The Project Director, RUIDP, AVS Building, Jawahar Circle,
Jln Marg, Jaipur Rajasthan
2. The Tender Inviting Authority, RUIDP, AVS Building,
Jawahar Circle, JLN Marg, Jaipur Rajasthan
3. State Of Rajasthan Through The Secretary, Urban
Development And Housing Department, Secretariat,
Janpath, C-Scheme, Jaipur Raj.
----Appellants
Versus
1. M/s. Ramky Infrastructure Ltd., Ramky Grandious, 10Th
Floor, Sy. No. /136/2 And4, Gachibowli, Hyderabad 500
032 Through Its Authorised Signatory Mr. G. Sudhakar, G-
2, 239, Padmawati Colony B, Nirman Nagar, Jaipur Raj.
2. M/s. Dinesh Chandra R Agrawal, Infracon Pvt. Ltd., 401-
403, The Grand Mall, Opposite State Bank Zonal Office,
Sm Road, Ambavadi, Ahmedabad Guj.
----Respondents
Connected With
D.B. Special Appeal (Writ) No.724/2018
In
S.B. Civil Writ Petition No.17954/2017
M/s. Dinesh Chandra R. Agarwal, Infracon Pvt Ltd., 401-403, The
Grand Mall, Opp. State Bank Zonal Office, S.m. Road, Ambavadi,
Ahemedabad Guj. 3800115.
----Appellant
Versus
1. M/s. Ramky Infrastructure Ltd., Ramky Grandious, 10Th
Floor, Sy. No. 136/2 And 4, Gachibowli, Hyderaad-500032
Through Its Authorised Signatory Mr. G. Sudhakar, G-2,
239, Padmawati Colony-B, Nirman Nagar, Jaipur.
2. State Of Rajasthan, Through Secretary, Urban
(Downloaded on 06/06/2021 at 06:35:23 AM)
(2 of 34) [SAW-804/2018]
Development And Housing Department, Secretariat,
Janpath, C-Scheme, Jaipur.
3. The Project Director, RUIDP, Avs Building, Jawahar Circle,
Jln Marg, Jaipur.
4. The Tender Inviting Authority, Ruidp, Avs Building,
Jawahar Circle, Jln Marg, Jaipur Raj.
----Respondents
For Appellant(s) : Shri Anil Mehta, Additional Advocate
General with Dr. Prakash Chandra Jain
for appellant RUIDP in SAW
No.8042018
Shri K.K. Sharma, Senior Advocate,
assisted by Ms. Ashish Joshi, for
appellant M/s. Dineshchandra R.
Agarwal, Infracon Pvt. Ltd., in SAW
No.724/2018
For Respondent(s) : Shri G.S. Bapna, Senior Advocate,
assisted by Shri Sameer Jain, for
respondent Ramky in SAW
No.804/2018
Shri R.B. Mathur for respondent
Ramky in SAW No.724/2018 Shri Anil Mehta, Additional Advocate General, for respondent State in SAW No.724/2018 Shri Prakash Chandra Jain for respondent RUIDP in SAW No.724/2018 HON'BLE MR. JUSTICE MOHAMMAD RAFIQ HON'BLE MR. JUSTICE GOVERDHAN BARDHAR Judgment //Reportable// Per Hon'ble Mr. Justice Mohammad Rafiq:
29/03/2019 This judgment will decide two appeals, both of which seek to challenge the judgment dated 22.05.2018 by which the writ petition filed by the respondent-writ-petitioner M/s. Ramky Infrastructure Ltd. (for short, 'the writ-petitioner'), has been allowed holding the action of the appellant - Rajasthan Urban (Downloaded on 06/06/2021 at 06:35:23 AM) (3 of 34) [SAW-804/2018] Infrastructure Development Project (for short, 'the appellant-
RUIDP') in declaring the technical bid of the writ-petitioner as non-
responsive, illegal and unjustified and directing the appellants to open the financial bid of the writ-petitioner and take a decision relating to award of contract.
Facts giving rise to these appeals are that the appellant-
RUIDP in SAW No.804/2018 floated a bid for procurement of design and construction of work of providing sewer network with house sewer connections, trench-less sewer, design and construction of sewage treatment plant, sewage pumping station, power generation unit at STP & allied works and operation & maintenance services of the entire system for 10 years in Kota City (Part Area). Last date for submission of the bid documents was 22.08.2017 and the date for submitting the original documents and opening of technical bid was 23.08.2017. Total six bids were received. The appellant-RUDIP issued a letter on 06.09.2017 to all the six bidders requiring them to submit certain clarifications in regard to their bid documents as per Clause 27.1 of Section-1 of the Bidding Document latest by 11.09.2017. The respondent-writ-petitioner M/s. Ramky Infrastructure Ltd. was required to provide clarification on the following points:-
1. The bidder has not submitted the mobilization and construction schedule. Bidder to submit the same.
2. MOA with Sub contractor M/s. Gypsum Structural India Pvt. Ltd., Delhi for the work of "Providing, laying, jointing, testing and commissioning of sewer pipeline by micro tunneling"is not notarized,. Bidder to submit Notarized copy of MOA.
3. Financial Statements for the FY ended 31-3-17 have not been submitted. The Bidder is requested to provide (Downloaded on 06/06/2021 at 06:35:23 AM) (4 of 34) [SAW-804/2018] audited copy of financial statements for FY 2016-17 for the purpose of financial evaluation.
4. FIN 6 - The calculations have to be redone with the Turnover for 2016-17 and Affidavit needs to be resubmitted.
5. The Revolving line of Credit submitted by the Bidder is requested to resubmit the letter from Bank strictly as per format in the bid document and unconditional.
6. The certificate of fund based and non fund based credit facility provided by SBI is conditional. Bidder to provide unconditional letters from the Bank for credit facilities.
The writ-petitioner M/s. Ramky Infrastructure Ltd. submitted clarification on 11.09.2017 in respect of Item No.1 to 4 and sought time upto 15.09.2017 for submitting clarification in respect of Item No.5 and 6. The Technical Evaluation Committee (for short, 'the TEC') on 20.09.2017 considered the bid document as per Clause 30 and declared the writ-petitioner and one more bidder-M/s. Gammon-Technofab JV, non-responsive as FIN-5 furnished by them was not in format and was conditional one. The decision of the TEC was uploaded on its website on 25.09.2017 at 10:56 AM and time of 3:00 PM was fixed for opening the financial bid. Similar clarification was sought from M/s. Dineshchandra R. Agarwal, Infracon Pvt. Ltd., the appellant in SAW No.724/2018, vide letter dated 06.09.2017, who submitted the reply along-with the supporting documents on 08.09.2017 at eProc website. In the financial bid that was opened on 25.09.2017, it having quoted Rs.656,94,99,913.00 was found to be the lowest bidder. Vide letter dated 03.10.2017, the appellant - M/s. Dineshchandra R. Agarwal, Infracon Pvt. Ltd., was called for negotiation on (Downloaded on 06/06/2021 at 06:35:23 AM) (5 of 34) [SAW-804/2018] 04.10.2017. After negotiation, the said appellant, vide letter dated 09.10.2017, offered a discount of 1% over the quoted price. The final offer thus stood at Rs.650,38,04913.97.
The writ-petitioner however submitted a letter on 25.09.2017 of the Punjab National Bank (for shot, 'the PNB') for revolving line of credit. According to the appellant-RUIDP, since the time to submit the clarification was upto 11.09.2017 and that the writ-petitioner requested for extension of time only upto 15.09.2017, the aforesaid clarification letter of PNB submitted beyond that date after decision of the TEC was therefore not considered. The writ-petitioner M/s. Ramky challenged action of the appellant-RUIDP declaring its technical bid as non-responsive in writ petition, which has been allowed by the learned Single Judge by the impugned judgment.
Heard learned counsel for the parties.
Shri Anil Mehta and Shri P.C. Jain, learned counsel for the appellant-RUIDP, submitted that as per Clause 2.3.1 of Section-3 of the Tender conditions, the bidder was required to submit its latest audited financial balance sheet of Financial Year 2016-17 and in case the said balance-sheet is not audited, then audited balance of Financial Year 2015-16 was to be submitted. The writ- petitioner was asked to submit a clarification vide letter dated 06.09.2017, in point no.3 of which it was required to submit audited copy of the financial statement of 2016-17 for the purpose of financial evaluation. Point No.4 was in reference to FIN-6, i.e., for recalculation of bidding capacity with the turn-over of 2016-17. It is submitted that the bidding capacity requirement is altogether (Downloaded on 06/06/2021 at 06:35:23 AM) (6 of 34) [SAW-804/2018] a different condition of the bidding document and has no relevancy, as far as controversy involved in this case is concerned. However, the writ-petitioner has tried to mislead the court by referring to the Fin-6 and documents page no.139 of the reply to the writ petition filed by the State of Rajasthan, which are in respect of bidding capacity and not in relation to available financial resources. Both these issues are separate and distinct.
Shri Anil Mehta, learned Additional Advocate General, further submitted that at serial no.2, the writ-petitioner itself has shown fund based credit facility as zero. At serial no.3, the writ-petitioner has shown non-fund based unutilized credit line of Rs.25 crore. At serial no.4, it has shown revolving line of credit of Rs.270 crore and has tried to demonstrate that its available financial resource is Rs.209.21 as against required Rs.205.77 crore, which meets financial resource criteria. The non-fund credit line of the writ- petitioner was taken as Rs.102.885 crore, instead of Rs.25 crore, however, Rs.270 crore shown towards revolving line of credit was not considered, being conditional by SBI and not as per format prescribed for revolving line of credit, i.e., Fin-5. This format was mandatory. The words used therein are as "Willing to consider providing" whereas the requirement was "willing to provide". Even the certificate has been issued at specific request of the company without any risk and responsibility on the part of the SBI or its officials. Further the required subject is "letter of assurance for revolving line of credit facility", which is missing in the letter issued by the SBI. In para 2 of format of letter, it is stated that the Bank must be willing to provide assured revolving line of credit whereas the said statement is missing in the letter of the SBI. (Downloaded on 06/06/2021 at 06:35:23 AM)
(7 of 34) [SAW-804/2018] Hence the document of the SBI was rightly ignored and rejected by the employer. The writ-petitioner has virtually admitted this non-conformity and therefore filed certificate of another Bank on 25.09.2017. It is submitted that the entire writ petition is based on the certificate issued by the Punjab National Bank submitted on 25.09.2017, whereas the clarification sought from the writ- petitioner required him to resubmit the letter of the same Bank, i.e., the State Bank of India. It did not allow substitution of another letter from a different bank. Learned Single Judge failed to appreciate that non-consideration of the letter of SBI for revolving line of credit on Fin-5 was never challenged in writ petition. Even otherwise the PNB certificate for revolving line of credit on Fin-5 was submitted after the due date when the bid of the writ-petitioner had already been rejected and could not be considered.
It is submitted that Clauses 2.3.1 and 2.3.3 of Section-III are mandatory and cannot be relaxed. As per Clause 27.1 and 27.2 of the bidding document, the employer has discretion to ask for clarification from bidder for the purposes of proper examination, evaluation and comparison of the technical and price bids. However, the bidder cannot submit a clarification of its own. In the present case, an opportunity was given to all the bidders for clarification of their bids as required latest by 11.09.2017. However, the writ-petitioner and one M/s. Gammon-Technofab JV failed to comply mandatory financial requirements of the bidding documents. In pursuance of the clarification, the TEC on 20.09.2017 considered all documents and as per Clause 30 found two of the bidders, i.e., the writ-petitioner and M/s. Gammon- (Downloaded on 06/06/2021 at 06:35:23 AM)
(8 of 34) [SAW-804/2018] Technofab JV as non-responsive. It is submitted that Clause 31 of the bidding document, relied by the writ-petitioner, is an exception to Clause 30. Clause 31 provides that in case a bidder is substantially responsive, the employer can waive non-conformities that do not constitute material deviation, reservation or omission and as per Clause 31.2, the bidder may be asked to submit such answer or documents within the reasonable period of time to rectify the non-material and non-conformities requirements. It also provides that failure of the bidder to comply the request may result in rejection of its bid. But non- conformities in the present case cannot be said to be non-material.
Learned Additional Advocate General submitted that the argument of the writ-petitioner, though not pleaded, that bidder TCPL also submitted conditional revolving line of credit and has been declared responsive is without any substance. It is submitted that the bidder TPL-TCPL JV requested to ignore its revolving line of credit given in Fin-5 and the same was not considered, because on the basis of other financial resources, the bidder TPL-TCPL JV in partnership of 75-25 independently met the financial resources requirement. It is submitted that one more bidder M/s. Gommon- Technofab JV submitted conditional revolving line of credit on Fin- 5 and could not meet the financial resources requirement. It was also declared technically non-responsive along with the writ- petitioner. It is also submitted that as per Section 3 of the Rajasthan Transparency in Public Procurement Act, 2012 (for short, 'the RTPP Act'), the present contract is excluded out of the purview of the said Act. Specific arguments in this behalf have not been addressed in the rejoinder by the writ-petitioner. (Downloaded on 06/06/2021 at 06:35:23 AM)
(9 of 34) [SAW-804/2018] It is argued that as per clause no.2.3.3 of Section-III, it is mandatory condition that a bidder must demonstrate access to or availability of financial resources, which includes working capital, line of credit or revolving line of credit, etc., using Fin-3, to meet financial resource requirement as per Fin-4. But Fin-4 submitted by the writ-petitioner shows that even as per calculation of the writ-petitioner himself, the requirement of financial resource is 205.77 crore. As per addendum Annexure-RR/2 at page 24 of the affidavit filed by the writ-petitioner, out of 205.77 crore worked out as per Fin-4 by it, maximum 50% non-fund based un-utilized from Bank can be considered upto 102.885 crore. The writ- petitioner submitted Fin-3, which is based on their wrongful interpretation of the bidding document and also based on the audited amount of Financial Year 2015-16, instead of audited balance-sheet of 2016-17. The writ-petitioner has submitted in column 1 of Fin-3 that its working capital is Rs.-85.79 crore {sign (-) is minus}, whereas working capital based on audited balance- sheet of 2016-17 comes to Rs.-453.406 crore. Financial capability of the writ-petitioner is thus not substantiated either way.
Shri Anil Mehta, learned Additional Advocate General, submitted that the working capital is to be determined as Current Assets - Current Liability from the latest audited balance-sheet as mentioned in the 'NOTE' of Form FIN-3 (page no.136). The perusal of the financial data for previous years submitted by the writ- petitioner M/s. Ramky Infrastructure Ltd., annexed as RA/2, Page No.14 in the affidavit filed by the State Government, for the financial year 2016-17, show that its Current Assets (A) is Rs.198071.92 and Current Liabilities (B) is Rs.243412.54 (Downloaded on 06/06/2021 at 06:35:23 AM) (10 of 34) [SAW-804/2018] therefore, the working capital (A-B) comes out to be Rs.-45340.62. The writ-petitioner has wrongly mentioned working capital as Rs.-85.79 in form Fin-3 in column no.1 on the basis of the audited balance-sheet of 2015-16. The total available financial resources (Fin-3) with the writ- petitioner based on certificate of SBI was Rs.3505.21 millions or Rs.350.52 crore. But the total financial resources requirement for the project was Rs.205.77 crores (Fin-4), which is not disputed as the writ-petitioner in Form Fin-1 has himself mentioned that. Thus, the balance, i.e., financial resources available (Fin-3) and financial resources requirement (Fin-4) is -5562.91 millions or -556.29 crore, therefore, there is a shortfall of Rs.556.29 crore. The State Government has submitted such calculation at Annex.RA/3 at page no.15 of the affidavit. Even assuming that SBI's revolving line of credit is considered and Rs.270 crore is added to the financial resources, then also Fin-3 becomes Rs.-805.21 crore and balance becomes Rs.-286.29 crore. Therefore, in any case, the technical bid of the writ-petitioner was liable to be rejected.
Learned Additional Advocate General in support of his arguments, relied on the judgments of the Supreme Court in Bakshi Security and Personal Services Private Limited Vs. Devkishan Computers Private Limited and Others - (2016) 8 SCC 446, Montecarlo Ltd. Vs. N.T.P.C. - (2016) 15 SCC 272, Goldyne Technoserve Limited Vs. State of Madhya Pradesh - (2011) 5 SCC 103, Municipal Corporation, Ujjain Vs. B.V.G. India Limited and Others - (2018) 5 SCC 462, Central Coalfields Ltd. Vs. SLL-SML (Joint Venture Consortium) & Others - (2016) 8 SCC 622, Sorath Builders Vs. Shreejikrupa Buildcon Limited - (2009) 11 SCC 9 and (Downloaded on 06/06/2021 at 06:35:23 AM) (11 of 34) [SAW-804/2018] West Bengal State Electricity Board Vs. Patel Engineering - (2000) 1 SCC 451.
Shri K.K. Sharma, learned senior counsel appearing on behalf of appellant M/s. Dineshchandra R. Agarwal Infracon Pvt. Ltd. in SAW No.724/2018, submitted that all the bidders except the writ-petitioner and one more, had submitted their clarification and removed the deficiencies by 11.09.2017. The meeting of the TEC was held on 20.09.2017 for evaluating the responsiveness of the technical bids of all the bidders as per Clause 30 of the bidding documents. The TEC in its decision noted that clarification on point no.1 to 4 had been complied but point no.5 and 6 had not been complied. The TEC noted that the writ-petitioner had filed the latest audited balance-sheet of FY 2016-17. The technical bid of the writ-petitioner was rejected on two grounds, namely, (i) the working capital of the writ-petitioner was negative and (ii) letter of assurance of SBI submitted by the writ-petitioner for revolving line of credit was not as per the format and was conditional one and further that for fund based and non-fund based credit were not unconditional. It is submitted that the TEC considered the aforementioned deficiencies as material deviations as per Clause 3 and on that basis, the technical bid of the writ-petitioner was rejected. Out of total 6 bidders, the writ-petitioner as well as M/s. Gammon-Technofab were declared as technically disqualified and remaining four bidders including appellant M/s. Dineshchandra R. Agarwal, Infracon Pvt. Ltd., were declared technically qualified. After the evaluation of the technical bids on 20.09.2017, the writ- petitioner delivered a letter in the office of the appellant-RUIDP along-with the bank certificates from PNB, whereas the original (Downloaded on 06/06/2021 at 06:35:23 AM) (12 of 34) [SAW-804/2018] certificate was from SBI. The letter though mentioned the date as 23.09.2017, however, it was actually delivered on 25.09.2017, which is admitted by the writ-petitioner in para 4 of the writ petition. It is submitted that as per the conditions of bidding document as well as the clarification letter dated 06.09.2017, the documents were to be submitted within the stipulated time online at the eProc website.
Learned senior counsel submitted that even though the writ- petitioner challenged the rejection of its technical bid on the ground of violation of the provisions of the RTPP Act, but no specific reference was made to any particular section thereof in the writ petition for which the violation was alleged. Neither any ground of mala fide was taken in the writ petition nor challenge was made to the acceptance of the technical bid of the appellant. The only argument raised in the writ petition was that TEC had acted illegally in not considering the certificate of PNB and that the deficiency pointed out by letter dated 06.09.2017 was not material and was only an omission, which had been cured on time. The writ-petitioner also submitted that if its bid had been accepted, then it would have been lowest bidder.
Learned senior counsel argued that the writ-petitioner, during pendency of this special appeal, attempted to plead new grounds which were neither mentioned in the writ petition nor were raised orally before the learned Single Judge. The writ- petitioner in the application filed under Order 41 Rule 27 of the CPC stated that the bank certificates submitted by the appellant were also not unconditional and the same ought to have been (Downloaded on 06/06/2021 at 06:35:23 AM) (13 of 34) [SAW-804/2018] rejected by the TEC. The State Government filed an affidavit in SAW no.804/2018 wherein it was specifically mentioned that the certificates submitted by the appellant herein with regard to revolving line of credit as well as fund and non-fund based facility duly fulfilled the financial resources requirement. The writ- petitioner in order to conceal the true facts from this Court only produced four certificates submitted by the appellant herein whereas the appellant had also additionally submitted letters dated 04.08.2017 from Indusind Bank as well as Dena Bank for the fund based and non-fund based credit facilities, which were not conditional and fulfilled the financial resources requirement of the employer. Further, the appellant had submitted assured revolving line of credit issued by the Allahabad Bank dated 03.08.2017. Apart from the aforesaid, the State Government further clarified that even otherwise, the financial resources which were available with the writ-petitioner were negative even if the certificates submitted by the writ-petitioner after the deadline were to be considered. Therefore, the appellant could not have been declared technically qualified.
Learned senior counsel submitted that the argument of the writ-petitioner that issue of conditional certificate of revolving line of credit issued by the SBI in its own format should not affect it as the Bank would be responsible for it and not the petitioner, is wholly misconceived. In case it was only an issue of certificate being not in the format, then it would not have taken the writ- petitioner much time to get the same rectified or corrected from the SBI. It is apparent that SBI did not deliberately correct/rectify the certificates as per the format for the reason that SBI was not (Downloaded on 06/06/2021 at 06:35:23 AM) (14 of 34) [SAW-804/2018] willing to give assured revolving line of credit. The writ-petitioner had to therefore get the certificates from another bank, i.e., PNB on 23.09.2017. It is submitted that the writ-petitioner for rectification of mistake could only have resubmitted the document from the same bank and could not have replaced it by getting it from a different bank. Moreover, the documents submitted beyond the prescribed time period could not be considered by the procuring entity for the reason that time line prescribed under the bidding document has to be strictly followed. If any such relaxation is granted, then the same will become a never ending process. The writ-petitioner has not made any allegation of mala fides against the employer or any of its functionaries for unduly favouring the appellant herein of bias, arbitrariness, irrationality or perversity. The ratio of Tata Cellular Vs. Union of India - (1994) 6 SCC 651, has been misapplied by the learned Single Judge.
Shri K.K. Sharma, learned senior counsel, submitted that the writ-petitioner has been making wrong statements before this court that the difference in the financial bid of the writ-petitioner and appellant is more than 15 crore. The financial bid of the writ- petitioner is Rs.656,25,90,043 (Annex.RR/4, page no.29) whereas the financial bid of the appellant after negotiation is Rs.650,38,04,913.87 (Annex R4/2 page 58, reply of appellant). Thus, there is hardly a difference of around Rs.58,785,130/-. It is argued that the Supreme Court in umpteen number of cases held that merely because the price offered by the bidder is less does not mean that public interest lies in awarding the contract to the (Downloaded on 06/06/2021 at 06:35:23 AM) (15 of 34) [SAW-804/2018] lowest bidder. The bid has to be accepted not only on the basis of the outcome of financial bid but also based on technical bid.
Shri K.K. Sharma, learned senior counsel, refuted the allegation of discrimination that bid of appellant M/s. Dinesh Chandra R Agrawal was considered on the basis of audited balance-sheet for 2015-16, whereas in the case of the writ- petitioner, the audited balance-sheet for 2016-17 was required. Since the writ-petitioner was a listed company, as per Regulation 33(3)(d) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (for short, the SEBI Regulations'), it was under obligation to submit the annual audited standalone financial results within sixty days from the end of the financial year.
Shri K.K. Sharma, learned senior counsel, to buttress his submissions, relied on the judgments of the Supreme Court in Vidarbha Irrigation Development Corporation Vs. Anejkumar Garwala - 2019 SCC Online SC 89, Central Coalfields Limited and Another Vs. SLL-SML (Joint Venture Consortium) & Another - (2016) 8 SCC 622, Goldyne Technoserve Ltd. Vs. State of Madhya Pradesh - (2011) 5 SCC 103, Sorath Builders Vs. Shreejikrupa Buildcon Ltd. & Another - (2009) 11 SCC 9, Municipal Corporation, Ujjain & Another Vs. B.V.G. India Limited & Another - (2018) 5 SCC 462, BSN Joshi & Sons Ltd. Vs. Nair Coal Services Ltd. - (2006) 11 SCC 548, W.B. Stae Electricity Board Vs. Patel Engineering Co. Ltd. & Another - (2001) 2 SCC 451, Asia Foundation & Construction Ltd. Vs. Trafalgar House (Downloaded on 06/06/2021 at 06:35:23 AM) (16 of 34) [SAW-804/2018] Construction Ltd. & Another - (1997) 1 SCC 738 and Air India Ltd. Vs. Cochin International Airport Ltd. & Others - (2000) 2 SCC 617, Afcons Infrastructure Limited Vs. Nagpur Metro Rail Corporation Limited - 2016 (0) AIJEL-SC 59146 and Municipal Corporation, Ujjain & Another Vs. B.V.G. India Limited and Others - (2018) 5 SCC 462.
Per contra, Shri G.S. Bapna, learned senior counsel, assisted by Shri Sameer Jain, learned counsel, appearing on behalf of the writ-petitioner M/s. Ramky Infrastructure Ltd. and others, submitted that the respondent is a public limited company incorporated in the year 1994 having international and national operations in civil, infrastructure, real estate and sewerage/water treatment projects. The present turnover of the respondent is approximately 1500 crores of rupees. The respondent has more than 100 infrastructure projects to its account out of which, as illustrated in Annexre-1 to the Writ Petition, few of the projects are performed in Rajasthan and duly completed. The writ petitioner is also doing water supply project 130 MLD at Kota whereby drinking water supply and O&M was awarded by UIT and PHED amounting to Rs.150 crores and the O&M portion has commenced with effect from 2013. Therefore, it is well conversant with the topography of Kota. The preamble and Sections 3 and 4 of the RTPP Act mandate that all the public procurement by the State should be made with the object of ensuring transparency, fair and equitable treatment of bidders, promoting competition, enhancing efficiency and economy and safeguarding integrity in the procurement process to enhance public confidence and faith of bidders. Proviso to Section 3 of the RTPP Act shall apply to all the (Downloaded on 06/06/2021 at 06:35:23 AM) (17 of 34) [SAW-804/2018] procuring entities which include RUIDP. The proviso to Section 3(3) is not applicable in the present case as the ADB contract nowhere bars the applicability of the RTPP Act, rather in para no.2.43 at page no.219 of reply to the Writ Petition filed by the State, it is categorically admitted that the applicable laws will be considered in the contract. The ADB also accepts the applicable laws. As per the Indian Contract Act, 1872, any contract opposed to law of the country is unlawful and consequential agreement/contract is void.
Learned senior counsel submitted that the State Government in its reply has categorically stated that the documents were called for from the bidders after preliminary evaluation of bids. If the conditions were material, then no opportunity could have been given to furnish documents and the bids had to be treated as non- responsive at the very first instance and should have been rejected straightaway. The arguments raised by the appellant that bidding documents were not evaluated and compared, is contrary to the minutes of the meeting. As per the financial requirement/historical performance and Fin-1, the net-worth of the bidder was required and not the working capital. The difference between working capital and net-worth is that working capital constitutes capital assets - (minus) capital liability, whereas net-worth constitutes total assets - (minus) total liability. Total assets and total liability include current assets and current liabilities, as one of its component, which was always positive. Filing of the balance-sheet of 2016-17 as per para 2.3.1 of the Bidding Document was optional and was to be submitted only if the same was available. The writ-petitioner is a listed company (Downloaded on 06/06/2021 at 06:35:23 AM) (18 of 34) [SAW-804/2018] and as per provisions of Section 102(2)(A), 137, 143, 145, 146 of the Companies Act, 2013, as amended, it has to first adopt, approve the financial statements, i.e., balance-sheet and profit & loss account in the Annual General Meeting and thereafter they take the shape of final accounts and only thereafter the same can be submitted before the statutory agencies and can be recognized. In this regard, attention is invited to Section 143(2) of the Companies Act wherein it is written that the auditors shall make the report to the members of the company on the accounts examined by him and every financial statements, which are required by or under this Act, are to be laid before the company in General Meeting and the report shall take into account provisions of this Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of this Act or Rules. The relevant provisions of the Act of 2013 go to show that the balance-sheet and financial statements prior to the AGM date, i.e., 29.09.2017 were not eligible to be submitted along with the bid. The submissions of the document on being required by the employer were uncalled for and beyond the scope of bid referred supra. Therefore, reliance upon financial stratement of 2015-16 by the writ-petitioner was correct and in conformity with the bid requirement. Further the requirement of 2016-17 was qua Fin-6 and not with other documents.
It is further argued that as stated in the Fin-5, it was a sample form to be issued by the external agency wherein assurance was to be given by the reputed Bank. The format given by SBI in the last paragraph assured for maintaining the revolving (Downloaded on 06/06/2021 at 06:35:23 AM) (19 of 34) [SAW-804/2018] line of credit and the risk and responsibility clause was added by the Bank on its own. But this constituted non-material deviation otherwise the bid could have been rejected at the very first instance rather than asking for clarification. Once substantial condition of the contract are met, the procedural conditions should be considered with liberal attitude because they can be cured later on. Reliance in this regard is placed on judgment of the Calcutta High Court in ABB Limited & Ors. Vs. West Bengal State Electricity Board & Ors. - MANU/WB/00702005, wherein it was held that mistake committed by banker while issuing bank guarantee should not unnecessarily penalize the bidder and his participation in the tender should not be affected thereby. The writ-petitioner also submitted one of their consortium Banker certificate, i.e., PNB, a Government of India undertaking, on the same set of financial statements. Learned senior counsel submitted that it is a settled position of law as held by the Supreme Court in Mohinder Singh Gill Vs. Chief Election Commissioner - (1978) 1 SCC 405, that subsequent reasons or explanations at the appeal stage should not be given any consideration and in the present matter, all the pleas raised by the appellants qua the working capital and balance-sheet 2016-17 are afterthought and new plea.
It is submitted that the appellants have bypassed the provisions of the RTPP Act and curtailed the right of appeal of the writ-petitioner under Section 38 of the RTPP Act. In spite of the provisions of Section 3 of the RTPP Act, as per their own declaration, the provisions are not applicable to the present bid contrary to the ADB documents itself in the bid size of 550 crores. (Downloaded on 06/06/2021 at 06:35:23 AM)
(20 of 34) [SAW-804/2018] Secondly, in spite of upper cap imposed by the documents in Fin-4 of 50 crores and in the addendum 50% of the said limit, they have granted Rs.94.79 crores to the competitor which is contrary to the tender conditions. In spite of interim order, the appellant-RUIDP bargained with the M/s. Dineshchandra R. Agrawal to bridge the gap of Rs.15 crores between the bids of writ-petitioner and the appellant. The bid price of writ-petitioner was Rs.656.25 crores and the price of M/s. Dinesh was Rs.669.94 crores. That for Dinesh P Agarwal of Gujarat, balance-sheet of 2015-16 was required and analyzed whereas balance-sheet for 2016-17 was intentionally called from the writ-petitioner, which is contrary to the provisions of the RTPP Act and did not provide level playing field and parity to the writ petitioner. Further, as required under Clause 31 and Rule 61 of the Rules, no reasonable time was given to submit the document and the price bid was opened immediately the very next working day of rejection of technical bid, bypassing provisions of Section 38 of the RTPP Act of appeal and Rule 63 of the Rules of 2013.
Learned senior counsel, in support of his arguments, has relied on ABB Limited & Ors. Vs. West Bengal State Electricity Board & Ors. - MANU/WB/00702005.
We have bestowed our anxious consideration to rival submissions and examined the material on record. We may at the outset make it clear that we shall examine the correctness of the impugned judgment on the basis of whatever material was placed in the writ petition and what was argued before the learned Single Judge. The writ petitioner and the appellants have filed certain new documents and on that basis, they want to raise such arguments which were not canvassed before the learned Single Judge. We (Downloaded on 06/06/2021 at 06:35:23 AM) (21 of 34) [SAW-804/2018] however do not wish to entertain any such argument and therefore shall eschew them from consideration.
Before we proceed to examine the rival submissions with reference to the findings recorded by the learned Single Judge in the impugned judgment, we deem it appropriate to refer to the decided case law on the scope of interference by the constitutional courts in the contractual matters. It is trite that the tender is in the realm of contract or commercial function where the procuring entity is free to set the terms of the tender. The procuring entity is the best judge in deciding the requirements of the tender. In Tata Cellular, supra, the Supreme Court considered certain principles, namely; the modern trend points to judicial restraint on administrative action; the role of the court is only to review the manner in which the decision has been taken; the lack of expertise on the part of the Court to correct the administrative decision; the conferment of freedom of contract on the government which recognises a fair play in the joints as a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. It was held that the administrative decision must not only be tested by the application of Wednesbury principle of reasonableness but also must be free from arbitrariness, not affected by bias or actuated by mala fides.
The Supreme Court in recently delivered judgment in Municipal Corporation, Ujjain, supra, after referring to judgment in Tata Cellular, supra, held that there are inherent limitations in exercise of the power of judicial review by the constitutional courts. The Government is the guardian of the (Downloaded on 06/06/2021 at 06:35:23 AM) (22 of 34) [SAW-804/2018] finances of the State. It is expected to protect the financial interest of the State. There can be no question of infringement of Article 14 of the Constitution of India if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down. The Supreme Court in para 9 and 10 of the Report held as under:
"9.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. However, there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down.
10. The modern trend points to judicial restraint in administrative action. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision without the necessary expertise which itself may be fallible. The Government must have freedom of contract. In order words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or a quasi-administrative sphere. However, the decision must not only be tested by the application of the Wednesbury [Associated Provincial Picture Houses v. Wednesbury Corpn., (1948) 1KB 223 (CA)] principle of reasonableness, but must also be free from arbitrariness and not affected by bias or actuated by mala fides."(Downloaded on 06/06/2021 at 06:35:23 AM)
(23 of 34) [SAW-804/2018] In Afcons Infrastructure Limited, supra, the Supreme Court held that the constitutional courts should not interfere with the interpretation of the documents by owner or employer to appreciate the tender requirements unless mala fide or perversity in their understanding or appreciation is reflected. It was observed in that case that it is possible that the owner or employer of a project may give an interpretation to the bidding documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.
The Supreme Court in Montecarlo Limited (supra) while dealing with the scope of interference by the courts in such matters held in para 26 as under:
"26.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. 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 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."
In Cellular Operators Association of India and Others Vs. Union of India & Others, (2003) 3 SCC 186, the Supreme Court held that where legal issues are intertwined with those involving determination of policy and a plethora of technical issues, courts of law have to be very wary and must exercise their (Downloaded on 06/06/2021 at 06:35:23 AM) (24 of 34) [SAW-804/2018] jurisdiction with circumspection for they must not transgress into the realm of policy-making, unless the policy is inconsistent with the Constitution and the laws. In Jagdish Mandal Vs. State of Orissa & Others, (2007) 14 SCC 517, the Supreme Court held that if the decision relating to award of contract is bona fide and is in public interest, the 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. In Census Commissioner Vs. R. Krishnamurthy, (2015) 2 SCC 796, the Supreme Court held that it is not within the domain of the courts to embark upon an enquiry as to whether a particular policy is wise and acceptable or whether a better policy could be evolved and the courts can only interfere if the policy framed is absolutely capricious or not informed by reasons or totally arbitrary and founded on ipse dixit offending the basic requirement of Article 14 of the Constitution.
In Michigan Rubber (India) Limited Vs. State of Karnataka & Others, (2012) 8 SCC 216, the Supreme Court on consideration of number of precedents in the matter held that the action of the State in awarding contract is amenable to judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited unless the action of the tendering authority is found to be malacious and a misuse of its statutory powers and greater latitude is required to be conceded to the State authorities in the (Downloaded on 06/06/2021 at 06:35:23 AM) (25 of 34) [SAW-804/2018] matter of formulating conditions of a bidding document and awarding a contract. Certain pre-conditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work, held the Supreme Court.
Coming now to the merits of the case in hand, the writ- petitioner was required to submit the document relating to credit facilities in forms Fin-3 to Fin-5. The Fin-3 stated that the certificate shall be unconditional. However, the writ-petitioner submitted certificate from the State Bank of India, which was, besides being conditional, was not on the format given in Fin-5. This certificate was issued with the condition that it is "without any risk and responsibility and guarantee on the part of the State Bank of India or its officials." The writ-petitioner was therefore given opportunity to cure the deficiency and was sent the letter dated 06.09.2017 asking it to cure the deficiency by 11.09.2017, but it sought time upto 15.09.2017. Yet it failed to remove the deficiency within the time prayed for. The TEC met on 20.09.2017 and finalized the evaluation of technical bid and in doing so, it found the bid of the writ-petitioner non-responsive as the conditions of tender required rejection of the bid if the documents in accordance with ITB-16 were not submitted. Learned Single Judge while ignoring the relevant clauses in the bid document proceeded to hold that it was not material deviation as per the requirements specified with the bid documents and further held that if the bid was accepted, it would not have in any manner affected in any substantial way the scope and quality or performance of the work and the employer ought to have (Downloaded on 06/06/2021 at 06:35:23 AM) (26 of 34) [SAW-804/2018] examined the case of the writ-petitioner and allowed rectification of such non-material non-confirmities. We find that Clause 29.2 of the bid document has been completely ignored by the learned Single Judge, which provided that the employer shall confirm that the documents and information, namely, (a) letter of technical bid,
(b) written confirmation of authorization to commit the bidder, (c) bid security or bid security declaration, if applicable; and (d) technical proposal in accordance with ITB 16, have been provided in the technical bid, and further mandated that "If any of these documents or information is missing, the offer shall be rejected."
Moreover, the ITB-16 clearly provides that bidder shall furnish as part of technical bid information as stipulated in Section 4 (bidding forms) to demonstrate the adequacy of the bidder's proposal to meet the work requirements and the completion time. Section 4 contains various forms including for furnishing information with regard to financial resources in Fin-3 to Fin-6. Fin-3 shows that the certificate from banks to be issued on its letter-head shall be unconditional. The sample form for assured revolving line of credit facility was prescribed in Form Fin-5. The Financial Resources Requirement mentioned under Clause 2.3.3 of the bid document, required the bidder to submit the revolving line of credit. The form Fin-3 regarding availability of financial resources, at its bottom under the heading of 'Note', has clearly mentioned that revolving line of credit must be unconditional. The format for submitting the assured revolving line of credit is provided under Form Fin-5 for the purpose of ensuring that revolving line of credit issued by the Bank is not only assured but is also unconditional. Thus, the writ-petitioner was obliged to (Downloaded on 06/06/2021 at 06:35:23 AM) (27 of 34) [SAW-804/2018] furnish unconditional certificate from the Banker with regard to the credit facilities as provided in Fin-3 and Fin-5. Appellant- RUIDP by letter dated 06.09.2017 provided opportunity to the writ-petitioner to cure this defect by 11.09.2017. Though the writ- petitioner sought time upto 15.09.2017, yet it failed to furnish any unconditional letter from the Banker till the evaluation made by the Technical Bid Committee and thus the unconditional certificates were missing from the technical bid, which made it mandatory under Clause 29.2 to reject the bid. The submission of certificate of another Banker after 20.09.2017, subsequent to declaring its technical bid as non-responsive, was clearly of no consequence. Instructions to Bidders, which deals with the clarification of bids, specifically provides under Clause 27.2 that "If a bidder does not provide clarifications of its bid by the date and time set in the Employer's request for clarification, its bid may be rejected." The late submission of documents, i.e., beyond the time prescribed, was rightly rejected as under Clause 27 Section-I. In our view, the learned Single Judge has erred in ignoring Clause 29.2 while applying Clause 30.2. A harmonious reading of these two Clauses would reveal that a bid in which the documents as required by ITB-16, and those prescribed under Section 4 are missing shall have to be rejected. This would be treated as material omission as defined in Clause (c) of Clause 28.1. The bid became clearly non-responsive as according to Clause 29.2 this omission is bound to result in rejection of the bid. Learned Single Judge was therefore not justified in holding that further opportunity to cure the deficiency should have been given. In doing so, learned Single Judge overlooked the fact that firstly it (Downloaded on 06/06/2021 at 06:35:23 AM) (28 of 34) [SAW-804/2018] was a material non-conformity and secondly, reasonable time to cure deficiency was provided. Consideration of the letter of assurance of the PNB would have resulted in substantial addition to the bid document, and would have amounted to permitting the bidder to subsequently make a non-responsive bid responsive by correction of material deviation/omission, which opportunity was not available to others. If done, this would have vitiated the entire bidding process as a person, who does not have the assurances making him financially capable by the time of the last date for submission of the bid, may be able to secure such assurances later on to cure the ineligibility.
The omission/deviation in relation to financial capability of the bidder, directly and substantially, related to performance of the work and bidder's obligations under the proposed contract. It cannot be described as material non-conformity. Learned Single Judge has erred in observing that even though the condition was imposed with regard to the revolving credit facility of Rs.270 crores but it was not related in any manner to the credit facility being provided. In taking that view, the learned Single Judge failed to appreciate that the revolving credit facility was not a sanctioned existing facility, but was an assurance by the Banker to provide such facility in the event of award of contract as would be evident from the language of the document Fin-5. This document should have stated that the bank is willing to consider providing to writ-petitioner a sum upto Rs.270 crores as working capital credit facility for executing the work, should the bidder be awarded the contract based on its tendered prices. The next clause states that the certificate may be taken into consideration during evaluation (Downloaded on 06/06/2021 at 06:35:23 AM) (29 of 34) [SAW-804/2018] of financial capabilities and further assured that we (the Banker) intend to continue to provide the working capital credit facilities until such times as the works are completed and taken over by the employer. These clauses are specifically provided in Fin-5, which is the prescribed format. Letter of the State Bank of India provided by the writ-petitioner clearly shows that while on the one hand, the Banker gives an assurance but on the other hand, it clearly puts a condition mentioning that the certificate is without any risk and responsibility on the part of State Bank of India or its officials. The condition negates the assurance contained in the certificate and thus cannot be taken as fulfillment of the requirement of the bid document. This cannot be considered to be non-material deviation as it reduces the financial capability of the bidder by not less than Rs.270 crores.
The argument of the writ-petitioner that the financial requirements condition was not mandatory and was non-material non-conformity, is misconceived. Technical bid of the writ- petitioner was declared non-responsive by the TEC on the ground that its working capital was negative, which is evident from the minutes of the meeting of the TEC dated 20.09.2017. Section 3 provides for 'Evaluation and Qualification Criteria of the bidding document'. Clause 2.3 deals with the Financial Requirements of the bidder. Clause 2.3.1 deals with the Historical Financial Performance and 2.3.3 deals with the Financial Resources Requirement and the bidding Forms are provided under Section-4. The bidder was required to submit the Form Fin-3, which deals with the availability of the financial resources. Fin-3 was amended by an addendum by which S.No.3 relating to non-fund based (Downloaded on 06/06/2021 at 06:35:23 AM) (30 of 34) [SAW-804/2018] credit line was amended to "50% of total financial resources requirement". The total financial resources was to be calculated being sum of (i) working Capital, (ii) fund based unutilized credit line, (iii) non-fund based unutilized credit line and (iv) assured revolving line of credit. In Column under criteria, the requirement was for submitting the audited financial statements for last five years, i.e., 2012-13 to 2016-17 and only in case financial statements are not audited for the financial year 2016-17, then for the financial year 2015-16. Under the column of compliance requirement, it was mentioned 'must meet requirement'. Argument of discrimination raised by the writ-petitioner that the appellant was not required to submit balance-sheet of 2016-17 does not hold any ground because no such argument was raised before the learned Single Judge. Clause 5.4 of Form Fin-1 clearly mentions that the bidder has to show available financial resources from latest audited balance-sheet as on 31 st March. Appellant M/s. Dineshchandra R. Agrawal has produced latest audited balance- sheet of 2015-16, whereas the writ-petitioner despite having the latest balance-sheet of 2016-17 did not submit the same and produced the same only when required. The writ-petitioner is a listed company and as per Clause 33(3)(d) of the SEBI Regulations it was under obligation to submit "annual audited standalone financial results for the financial year, within sixty days from the end of the financial year along with the audit report". Therefore, the argument of the writ-petitioner to the contrary with reference to certain provisions of the Companies Act, is liable to be rejected.
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(31 of 34) [SAW-804/2018] The Supreme Court in Vidarbha Irrigation Development Corporation Vs. M/s. Anoj Kumar Garwala - 2019 SCC OnLine SC 89, wherein the bidder, who quoted lowest bid, was declared technically disqualified, held that tender conditions must be strictly complied with. The Supreme Court in that case did not consider the corrected bank guarantee. In para 17 of the report, their Lordships held as under:-
"17. It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court."
Similarly, in Central Coalfields Ltd., supra, the Supreme Court upheld the decision of the procuring entity in rejecting the bank guarantee which was not in proper format. In G.J. Fernandez Vs. State of Karnataka - (1990) 2 SCC 488, which was followed in Central Coalfields Ltd., supra, the Supreme Court reaffirmed both the principles laid down in Ramana Dayaram Shetty Vs. International Airport Authority of India
- (1979) 3 SCC 489. It was reaffirmed that the party issuing the tender (the employer) "has the right to punctiliously and rigidly"
enforce the terms of the tender. If a party approaches a court for an order restraining the employer from strict enforcement of the terms of the tender, the court would decline to do so. It was also reaffirmed that the employer could deviate from the terms and (Downloaded on 06/06/2021 at 06:35:23 AM) (32 of 34) [SAW-804/2018] conditions of the tender if the "changes affected all intending applicants alike and were not objectionable". Therefore, the Supreme Court in Central Coalfields Ltd., supra, held that deviation from the terms and conditions is permissible so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination. In para 47 and 48 of the judgment in Central Coalfields Ltd., supra, their Lordships held as under:-
"47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty, supra, the terms of NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular, supra, there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision "that no responsible authority acting reasonably and in accordance with relevant law could have reached" as held in Jagdish Mandal, supra, followed in Michigan Rubber, supra.
48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty, supra, However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot."
In Goldyne Technoserve Ltd., supra, the Supreme Court rejected the ISO certificate which was not submitted along with (Downloaded on 06/06/2021 at 06:35:23 AM) (33 of 34) [SAW-804/2018] the technical bid despite the fact that the certificate was available and held that the decision of the procuring entity in rejecting the bid was not perverse.
In Sorath Builders, supra, also the reasonableness of the tender conditions were not in question. The tender notice provided for online submission of price bid within seven days of date of well-advertised tender notice. However, pre-qualification documents required to be received physically one day before price bidding closed. The Supreme Court therein held the said requirement to be not an unreasonable/arbitrary. The bid of the respondent before the Supreme Court was lowest but since he submitted the pre-qualification documents with delay of three days, it was held that the terms and conditions of the tender are required to be adhered to strictly. The Supreme Court further held that the disqualified bidder cannot be considered only from the point of view of saving public money as that would not justify going through the tender process again. It was held that the bidder was negligent and was not sincere in submitting the documents within time schedule and, therefore, the documents received after deadline cannot be considered as the terms and conditions of the tender are to be strictly adhered to.
In the light of the above discussion, we are not persuaded to uphold the view taken by the learned Single Judge. Learned Single Judge has, in our view, erred in holding that the bid was illegally rejected and was not justified in declaring technical bid of the writ- petitioner responsive and in further directing to open its final bid. Both the appeals therefore deserve to succeed and are accordingly (Downloaded on 06/06/2021 at 06:35:23 AM) (34 of 34) [SAW-804/2018] allowed. The impugned judgment dated 22.05.2018 is set-aside. Consequently, the writ petition is dismissed. There shall be no order as to costs. This also disposes of stay application(s).
Registry to place a copy of this judgment in connected file.
(GOVERDHAN BARDHAR),J (MOHAMMAD RAFIQ),J
//Jaiman//
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