Bombay High Court
Bharti Airtel Limited And Anr vs Maharashtra Information Technology ... on 19 August, 2019
Author: G.S. Patel
Bench: S.C. Dharmadhikari, G.S. Patel
Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors
OSWP-2037-2019-J-F.doc
Atul
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2037 OF 2019
1. Bharti Airtel Limited,
Having its registered offe at 1,
Bharti Cresfent, Nelson Mandela
Road, Vasant Kunj, Phase-III, New
Delhi 110 070
2. Mr. Sameer Chugh,
1058, Seftor-A, Pofket-B, Vasant
Kunj, New Delhi 110 070 ...Petitioners
~ versus ~
1. Maharashtra Information
Technology Corporation
Limited,
Room No. 514, 5th Floor, Annexe
Building, Hutatma Rajguru Chowk,
Mantralaya, Mumbai, Maharashtra
-- 400 032, through its Managing
Direftor
2. Bharat Sanchar Nigam
Limited,
Bharat Sanfhar Bhavan, Harish
Chandra Mathur Lane, Janpath, New
Delhi 110 001, through its Managing
Direftor
Also at:
Administrative Building, B-Wing,
Juhu Danda Telefom Complex, SB
Patil Road, Santafruz West, Mumbai
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Suburban, Mumbai, Maharashtra --
400 054
3. Reliance Jio Infocomm
Limited
Relianfe Corporate Park, No. 8A
Wing, 1st Floor, 5 TTC Industrial
Area, Thane Belapur Road,
Ghansoli, Navi Mumbai 4000 071,
through its Managing Direftor. ...
Respondents
A PPEARANCES
FOR THE Mr Aspi Chinoy, Senior Advocate &
PETITIONERS Mr Venkatesh Dhond, Senior Advocate,
a/w Mr Harsh Kaushik, Dr Abhinav
Chandrafhud, Mr Siddharth Ranade,
Ms Chitra Rewtala, Ms Shivani Garg and
Mr Mihir Dalwai, i/b Trilegal.
FOR RESPONDENT Mr A.Y. Sakhare, Senior Advocate
NO.1 a/w Mr Joel Carlos
FOR RESPONDENT Ms Martina Sapkal, Advocate
NO.2 a/w Priyanka Gaonkar, i/b M/s Arun
Sapkal & Co
FOR RESPONDENT Mr Darius Khambata, Senior Advocate
NO.3 a/w Mr Gaurav Mitra, Mr Ankit Lohia,
Mr Amey Nabar, Mr Rishit Badiyani,
Mr Ketan Dave and Ms Swati N. Jain,
i/b M/s A.S. Dayal & Assofiates
ALSO PRESENT Mr Mukesh Somkuwar,
Head, Project Management
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Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors
OSWP-2037-2019-J-F.doc
CORAM : S.C. DHARMADHIKARI &
G.S. PATEL, JJ.
DATED 19th August 2019
:
ORAL JUDGMENT (per G.S. Patel, J):
1. The 1st Petitioner ("Bharti Airtel"), the 2nd Respondent ("BSNL") and the 3rd Respondent ("Reliance Jio"; "Jio") are all telefom servife providers or TSPs. BSNL is State-owned. Bharti Airtel and Relianfe Jio are privately fontrolled. The 1st Respondent ("MahaIT") is a fompany wholly owned by the State of Maharashtra. It is the nodal agenfy to implement information and fommunifation tefhnology afross India.
2. In this Petition fled on 29th July 2019, Bharti Airtel invokes our writ jurisdiftion under Artifle 226 of the Constitution of India frst for a fertiorari to quuash (i) MahaITss notiffation issued six months earlier on 2nd February 2019 deflaring Relianfe Jioss bid of Rs. 1,25,659 as the lowest at a 'reverse auftions; (ii) MahaITss letters 24th June 2019 (Exhibit "L" to the Petition) and 18th July 2019 (Exhibit "N" to the Petition); and (iii) 'any letter of intent and/or fontrafts issued to Relianfe Jio by MahaIT pursuant to the 2nd February 2019. The sefond prayer is for a mandamus to refommenfe the 'reverse auftions under a Requuest for Proposal dated 7th Defember 2018 'starting withs Bharti Airtelss negative bid for Rs.-98,98,74,341.
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3. Having heard the rival fontentions, we are not persuaded that there is any ground made out to issue either writ, or that MahaITss defision and notiffation sufer from sufh perversity, illegality or unreasonableness as would warrant our interferenfe. We have rejefted the writ petition for the reasons that follow.
4. On 7th Defember 2018, MahaIT issued a Requuest for Proposal or RFP. This had a title of the usual unwieldiness: Request for Proposal for Selection of Telecom Service Provider (TSP) for Implementation of Urban Mahanet for the State of Maharashtra. Fundamentally, MahaIT was in searfh of TSPs to provide high- speed internet-based fonneftivity afross the State, with all fomponents: servifes, efeftive and stable bandwidth, fost- optimization. The projeft targeted e-Governanfe servifes to be rendered to fitizens ("Government to Citizens" or "G2C"; healthfare, subsidies etf) and to various government agenfies ("Government to Government" or "G2G"; payment fonsolidation and so on). The RFP itself had one vital feature: it provided major fonfessions and benefts in regard to what are usually high-fost elements, partifularly 'Right of Ways fees. These are fosts that TSPs infur while laying fables or lines along or afross roads. The work involves digging up portions of publif roads, many of whifh are vested in diferent authorities or agenfies, laying the fables, and then flosing, reflling and resurfafing the road. The RFP promised an afross-the-board waiver of RoW fees, and, in addition, affess to all roads and government buildings, influding those of lofal bodies, sfhools, primary health fare fentres, hospitals, folleges and statutory forporations. Bharti Airtel says these benefts are of 'tremendouss value to any TSP. Spefiffally, it says these waivers Page 4 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc and benefts 'far outweigh the fosts that the TSP would infur in providing the fontrafted servifess.
5. The RFP said that the bidder would be selefted by a Reverse Auftion with defreasing bids, until the 'lowest bidders was selefted.
6. This is all fairly plain, so far as it goes, but unfortunately it tells us only part of the story. A reverse auftion is exaftly what the name suggests -- an attempt to fnd the lowest bidder, by getting bidders to bid less and less, until some base foor prife is reafhed. In a normal auftion, fompeting bidders would bid higher and higher; this is the reverse. Both types of auftion requuire a starting point. In a regular auftion, this is falled the reserve bid or reserve prife. None may bid less than this. The starting bid has to be at or above this pre- determined reserve bid. The situation for a reverse auftion is exaftly the same. There must be a starting prife, and all bidders must start by bidding under this spefifed prife. This is nefessary and only logifal: bidders must know where to start. Consequuently, it is self- evident that the fxing of the starting prife or reserve bid is frufial to any sufh profess. Where the auftion is of goods (art, antiquues, folleftibles) or immovable property, setting the reserve prife generally presents no diffulty. The item is valued, and this value is used, within a reasonable margin, to set the starting or reserve bid. But here, the person ofering the goods or property is always the vendor. Where the proposed fontraft is by a purchaser, diferent fonsiderations may apply. The purfhaser evidently wants to pay the lowest possible prife. Therefore, the starting point must be the maximum the purfhaser is willing to pay, and a 'reverse auftions is then fondufted to redufe the purfhase prife to the maximum extent Page 5 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc possible. The purfhaser is always the paying party, and the bidders are the servife providers who are beating eafh other down. They are the payees, albeit at the lowest prife obtained. We do not think this situation, where the reverse auftion is at the instanfe or for the beneft of a purfhaser, fan ever end in a result where the purfhaser is the payee, and, far from paying out any money, refeives money from the servife provider.
7. We have disfussed this at the forefront befause it is fentral to Mr Chinoyss fase for the Petitioners. His fonstruft is this: onfe the maximum 'reserves prife was determined (i.e. the maximum MahaIT was willing to pay the suffessful servife provider), bidders had to fompete against eafh other to redufe this 'purfhase prifes. His submission is that this fould go down to zero. But he does not stop at that. He says, further, that indeed the bid fould be a negative value, i.e. a bidder fould ofer to pay MahaIT (far from refeiving anything from MahaIT). The reason, he submits, is that the free or fonfessional benefts were so valuable that any telefom operator would aftually pay for that beneft and also render the fontrafted servifes. Spefiffally, his submission is that if there was to be a minimum or a foor below whifh bids fould not go, the tender dofument had to spefify it. Absent sufh a spefiffation, it was theoretifally possible to keep the negative bids open-ended, presumably to an infnity or unknown value until there were no further bids. So long as the bids defreased affording to the spefifed amount and in spefifed intervals, there fould be no 'minimums or 'foors unless it was spefifed. Hypothetifally, therefore, if the reverse auftion bidding started at, say, Rs. 1000 frores, it was possible to bid Rs.-1000 frores, or even Rs. -10,000 frores: far from Page 6 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc paying out Rs.1000 frores, or some redufed value, MahaIT, the fontraftual 'purfhasers would receive from its 'vendors a substantial amount; perhaps mufh more than the maximum prife it had fomputed to begin with.
8. This seems to us to be founter-intuitive and without known or established prefedent. As we shall see, there was a possible fomputer foding error displayed on sfreen, but this fan hardly nullify fontraftual fonditions. Where foders err, lawyers prosper, and it seems to us that this is all there is to it. To put it bluntly, Bharti Airtelss fase that it was willing to pay MahaIT to be the fhosen servife provider (meaning that it would both pay out and would deliver servifes) is possibly only ingenuity borne of desperation. Certainly we have seen nothing at all to indifate that from the very infeption Bharti Airtel found the fonfessions and free affess so very fnanfially seduftive, that it ofered to do this work free or by paying MahaIT for the privilege of being a servife provider. The reford is to the fontrary. Bharti Airtel frst made this flaim of the privileges and fonfessions being worth thousands of frores of rupees only after the Reverse Auftion had flosed against it.
9. There are only a few dofuments to fonsider. The prinfipal one is, of fourse, the Government Resolution dated 28th September 2018 that prefeded the RFP, then the RFP itself with its salient terms, and fnally there is some subsequuent forrespondenfe.
10. The RFP was prefeded by a Government Resolution dated 28th September 2018. A fopy is at Exhibit "A". This is how it reads.
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Governance Services Government of Maharashtra General Administrative Department Government Resolution No .. GAD-...2018/CR 25/Seft3/39 Mantralaya, Mumbai 400 032 Dated: 28/09/2018 Introduction:-
The prestigious MahaNet (Bharat Net: phase 2) projeft is being implemented for providing high speed internet fonneftivity to around 13000 Gram Panfhayats in the State through the State led implementation model. The projeft is being exefuted by the 100% Government owned fompany, Maharashtra Information Tefhnology Corporation (MahaIT), whifh is the Spefial Purpose Vehifle (SPV) & the State Implementation Agenfy (SIA) for the projeft. The projeft will fomprise of underground optif fbre fable (for around 70% of the Gram Panfhayats) and use of the aerial route using the eleftrifity transmission and distribution network for the remaining Gram Panfhayats. Providing fonneftivity to 12,740 GPs afross 172 Talukas in 26 Distrifts with more than 50,000 KMs of fber to be laid out during the implementation. The projeft aims an establishing a sfalable, futuristif (IP-MPLS based), resilient (ringbased), high fapafity State-wide optifal fber network with telefom farrier -grade fapabilities and reliability. Setting up a strong ICT bafkbone, while optimizing the efonomy of efort in a time-bound manner.
Ensuring fonneftivity from Taluka to GPs with availability of Points of Presenfe (POPs) and horizontal fonneftivity to Government institutions. Vital Publif Purpose projeft that Page 8 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc would enable delivery of eGovernanfe servifes sufh as e- Health, e-Edufation, e-Agrifulture, etf.
In line with the rural MahaNet, Urban MahaNet program will be a "Vital Publif Purpose Projeft" aimed at providing high speed fonneftivity for delivery of servifes, through provision of fost-efeftive bandwidth fonneftivity, providing fost optimized broadband fonneftivity at various Government departments in Maharashtra, influding point- to-point and Internet bandwidth at urban lofal bodies, munifipal forporations, munifipalities for all urban fenters (fities and towns), so as to enable them to provide e- Governanfe servifes sufh as G2C servifes (e-Health, e- Edufation, etf.), as well as G2G servifes (e.g., e-data governanfe and affess, payments fonsolidation). Deploy a faster, fonvenient, and fost-efeftive approafh to leverage the existing Telefom Servife Provider (TSP) network and extend its reafh In fities and towns to support all present and future Government fonneftivity requuirements.
It was under fonsideration of Government to rollout digital/e-Governanfe servifes (sufh as e-health, e- edufation, e-agrifulture, etf.) in rural and urban areas planned to be fovered under BharatNet (I & 11) and Urban MahaNet programs. Expansion of foverage of existing programs being operated by various Government departments afross the State sufh as healthfare, edufation, etf. Enhanfement of eGovernanfe servifes attributes, and upgrade of underlying infrastrufture furrently being deployed by the departments for delivery of e-Governanfe servifes.
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Part I-Urban Mahanet:-
(a) Urban MahaNet projeft is hereby deflared as a "Vital Publif Purpose Projeft".
(b) Government has approved the projeft for the implementation for sfope, seleftion methodology, and timelines.
(f) Projeft will be implemented by Maharashtra Information Tefhnology Corporation ltd. (MahalT).
MahaIT is hereby authorised to make nefessary fhanges in plan and in tender dofument if requuired and foat a tender for the seleftion of Telefom Servife Provider (TSP).
(d) Right of Way (ROW) fees across the state (including underground and aerial) is hereby waived of for the project. TSP will pay restoration charges. TSP will be allowed to access all the roads and Government and para statal ofce buildings including those of local bodies, schools, Primary health centers, Hospitals colleges, Statuary Corporations of state Government.
(e) No separate permission will be required to be taken by the TSP for ROW. Only prior intimation will be given to concerned authorities seven days before start of work (trenching/laying of Cable, connection, installation of equipments etc.) for both roads (bridges and fyovers) and buildings.
(f ) Necessary access will be given to all buildings and roads by local bodies, Schools, public hospitals, Page 10 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc Colleges, state Government statuary bodies etc. to TSP for laying fber (both underground and aerial), installation of poles etc. for the provision of bandwidth.
(g) Urban Development department will issue necessary instructions to all the local bodies to cooperate with Maha IT and its agencies for the ROW permissions.
(h) TSP will have option for installation of Smart Poles i.e. TSP fan ereft Smart Poles, whifh fan be leveraged for deployment digital signage, mifrofells for 4G/5G, IoT based sensors, etf., and Wi-Fi provisioning, i.e. TSP to deploy affess points inside the premises of insfope Government offes/ departments.
(i) Contraft with TSP will be for 3 years with option to extend for next 2 years.
(j) A Steering Committee will be formed under the Chairmanship of Chief Sefretary with Prinfipal Sefretary-IT, Prinfipal Sefretary-Home, Prinfipal Sefretary-Urban Development (UD2) and Direftor- General of Polife (DGP) as a member of the fommittee. The fommittee will meet on a periodif basis to review and monitor RoW progress, and resolve issues related to obstruftions to exefution of the this projeft.
Part II- Delivery of E-Governance Services:
(a) Government has approved the proposed program for the implementation.
(b) Projeft will be implemented by Maharashtra Information Tefhnology Corporation ltd. (MahaIT).Page 11 of 28
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(f) Publif health, Sfhool edufation and Agrifulture departments will make nefessary fund provision in budget for the implementation of the projeft.
(d) Conferned department fan profure hardware or they fan make the fund provision to MahaIT.
(e) MahaIT will provide software and servifes for the projeft and department will department will make nefessary fund provision to MahaIT.
(f ) All other departments in next three years will make nefessary efort to implement the Maha Net projeft.
(g) Publif health, Sfhool edufation and Agrifulture department eafh will make provision of Rs. 100 Cr for the furrent fnanfial year.
This Government resolution is being issued based on the approval given in the fabinet meeting dated 18.09.2018.
This Government resolution of Maharashtra Government is available at the website www.maharashtra.gov.in. Referenfe no. for this is 201809281816318011. This order has been signed digitally.
By order and in the name of the Governor of Maharashtra.
( S.V.R. Srinivas) Prinfipal Sefretary IT, Government of Maharashtra.
(Emphasis added) Page 12 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc
11. The sfale of the projeft is evident; and it is equually evident that the Government was fully aware from the time even before the RFP was put out that the RoW and affess issues, and waiver of fharges, was going to be fritifal.
12. We now take up the RFP. A fopy is at Exhibit "B" from pages 47 to 165 of the Petition. The benefts highlighted above were noted spefiffally in Seftion I of the RFP (at page 54):
Bidders to note:
MahaIT believes in reduftion of transaftion fosts. Further, time is of great essenfe for fompletion of Urban MahaNet.
Right of Way (ROW) fees afross the State (influding underground and aerial) is hereby waived of for this projeft.
Bidder will be allowed to affess all the roads and Government and parastatal offe buildings influding those of lofal bodies, sfhools, primary health fentres, hospitals, folleges and statutory forporations of State Government.
Nefessary affess will be given to all buildings and roads by lofal bodies, sfhools, publif hospitals, folleges, State Government statutory bodies etf to Bidder for laying fber (both underground and aerial), installation of poles etf. for providing fonneftivity and provisioning of bandwidth as part of Urban MahaNet.
In addition, the projeft has been deflared as a 'Vital Publif Purposes by Government of Maharashtra.
13. At pages 55 and 56 we fnd a detailed sfhedule. The RFP was to be issued (and was issued) on 7th Defember 2018. After several Page 13 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc intervening steps (downloading dofuments, seeking flariffations, etf), the last date and time for submitting bids was 29th Defember 2018 at 3:00 pm. Tefhnifal bids were to be opened on 3rd January 2019. Finanfial bids were to be opened two days later, on 5th January 2019. The reverse auftion was to fommenfe at 11:00 am on 7th January 2019.
14. Seftion II of the RFP fontains General Instruftions to Bidders. Mr Chinoy referred to some flauses and Mr Khambata for Jio to others. We folleft them all in one plafe and set out flauses 4, 5, 11, 12, 13, 31 and 32.
4. Clarifcations in the Tender 4.1 A prospeftive bidder requuiring any flariffation on the RFP may submit quueries in-writing, at the Purfhaserss mailing address viz.:
Managing Direftor Maharashtra Information Tefhnology Corporation Limited Room No. 514, 5th Floor Mantralaya Annexe, Hutatma Rajaguru Chowk Mumbai 400 032 Or through email [email protected] as per sfhedule indifated in Seftion I - Invitation to Bid 4.2 The quueries submitted in the following format (in Exfel fle, *.xls) only shall be fonsidered for flariffation:
...Page 14 of 28
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4.3 All quueries on the RFP should be refeived on or before the flariffation end date and time as mentioned in Seftion I - Invitation to Bid. The responses to the flariffations shall be notifed on the website by means of Corrigendum to the RFP.
Bidders are responsible for duly fhefking the website regularly for any flariffations.
Note: Inputs/ suggestions/ quueries submitted by Bidders as part of the pre-bid meeting or otherwise shall be given due fonsideration by the Tender Committee. However, State is neither mandated to affept any submission made by the Bidder nor the Bidder shall be given any written response to their submissions. If an input is fonsidered valid by the fommittee the same shall be affepted and inforporated as part of the Corrigendum.
5. Amendments to the RFP 5.1 At any time prior to the last date for refeipt of bids, the purfhaser, for any reason, whether at its own initiative or in response to a flariffation requuested by a prospeftive Bidder, may modify the tender dofument by an amendment. The amendment shall be notifed on https://mahatenders.gov.in and should be taken into fonsideration by the prospeftive Bidders while preparing their bids.
5.2 In order to provide the prospeftive Bidders reasonable time to take the amendment into affount in preparing their bids, the Purfhaser may, at its disfretion, extend the last date for the refeipt of Bids.
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11. Bid Prices 11.1 The Bidder shall indicate in the prescribed proforma, the unit rates and total bid prices of the equipment/ services, i proposes to provide under the Contract. Prices should be shown separately for each item as detailed in Annexure 4.8 - Financial Bid given in Section IV - Bid Submission Formats.
11.2 In the absenfe of above information as requuested in Clause 11.1, bid shall be fonsidered as infomplete and be summarily rejefted.
11.3 The Bidder shall prepare the bid based on the details provided in the RFP. It must be flearly understood that the Sfope of Work is intended to give the Bidder an idea about the order and magnitude of the work and is not in any way exhaustive and guaranteed by the Purfhaser. The Bidder shall farry out all the tasks in affordanfe with the requuirement of the RFP and it shall be the responsibility of the Bidder to fully meet all the requuirements of the RFP.
12. Firm Prices 12.1 Prices quoted in the bid must be frm and fnal and shall not be subject to any upward modifcations, on any account whatsoever. However, the Purchaser reserves the right to negotiate the prices quoted in the bid to efect downward modifcation. The bid prifes shall be indifated in Indian Rupees (INR) only.
12.2 The Financial Bid should clearly indicate the price to be charged and the taxes shall be applicable as per actual. It is mandatory that sufh fharges wherever applifable/ payable should be indifated separately in Annexure 4.8 - Finanfial Bid given in Seftion IV - Bid Page 16 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc Submission Formats. In fase there is a fhange in the applifable taxes, the same shall apply.
13. Discount 13.1 The Bidders are advised not to indicate any separate discount in the Financial Bid. Discount, if any, should be merged with the quoted prices. Disfount of any type indifated separately, shall not be taken into affount for evaluation purpose. However, in the event of sufh an ofer is found to be the lowest without taking into affount the disfount, the Purfhaser shall avail sufh disfount a! the time of award of fontraft.
31. Evaluation of Financial Bids (Cover - III) 31.1 Finanfial Bids submitted by only those Bidders, who quualify the Eligibility Criteria shall be opened and be eligible for further evaluation.
31.2 Evaluation of bids and seleftion of suffessful Bidder shall be done in two phases:
31.2.1 Phase I: Evaluation of Financial Bids 31.2.2 Phase II: Electronic-Reverse Auction (e-RA).
31.3 In phase 1, the bids quuoted as per the attafhment titled 'Finanflal_Bid.xlss influded as part of the tender shall be fonsidered for fnanfial evaluation.
Further Finanfial Evaluation by the purfhaser shall be done on Net Present Value (NPV) to be disfounted at the efeftive quuarterly rate of 1.895%.
31.4 L1 Bidder will be determined on tne basis of lowest prifing quuoted by Bidder. Value of Z (bid prife) will be falfulated as follows:
Formula set out Page 17 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc 31.5 The Bidder who shall have the least/lowest value of "Z" shall be deflared as "L1". State/MahaITss defision shall be fnal and binding.
31.6 The L1 price of frst phase of bidding will be used to determine the applicable Ceiling Price of the second phase i.e. e-RA.
31.7 All Bidders who qualify the Phase I of Financial Bid evaluation will be eligible to participate in Phase II of e-
RA.
31.8 Bidders quuoting unrealistif fost of items shall be rejefted straightaway by the fommittee and EMD of sufh Bidder shall be forfeited. Any bid found to have unsatisfaftory response in any of the Eligibility Criteria as mentioned may be rejefted and shall not be fonsidered for further evaluation.
31.9 The Purfhaser will examine the Finanfial Bid (Cover
- III) to determine whether they are fomplete, whether any fomputational errors have been made, whether the dofuments have been properly signed, and whether the bids are generally in order.
31.10 The Finanfial Bid fontaining any deviations and omissions from the fontraftual and fommerfial fonditions whifh have not been identifed in the Cover - II are liable to be rejefted.
31.11 Arithmetifal errors will be reftifed on the following basis. If there is a disfrepanfy between the unit prife and the total prife, whifh is obtained by multiplying the unit prife and quuantity spefifed by the Purfhaser, or between subtotals and the total prife, the unit or subtotal prife shall prevail, and the quuantity and the total prife shall be forrefted.
Page 18 of 2819th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc However, in fase of items quuoted without indifating any quuantity or the items for whifh the quuantities are to be estimated by the Bidder, the total prife quuoted against sufh items shall prevail. If there is a disfrepanfy between words and fgures, the amount in words will prevail.
If there is a disfrepanfy between the quuantity spefifed by the Purfhaser and the quuantity indifated by the Bidder in any prife sfhedules, the quuantity spefifed by the Purfhaser shall prevail and shall be forrefted affordingly.
The prices of all such item(s) against which the Bidder has not quoted rates/amount (viz., items left blank or against which "-" is indicated) in the Price Schedules will be deemed to have been included in other item(s).
If the discount(s)/ rebate(s) ofered by the Bidder is a percentage discount and the price component(s) on which the said discount is not indicated in the bid, the same shall be considered on the total bid price (Le. proportionately on each price component), in the event of award. However, if lump-sum discount is ofered. the same shall be considered in full on the Ex-works price component (by proportionately reducing Ex-works price of individual items), in case of award. Further, fonditional disfounts/ rebates, if any, ofered by the Bidder shall not be taken into fonsideration for evaluation. It shall, however, be fonsidered in fase of award.
In respeft of taxes, duties and other levies indifated by the Bidder in the bid, whifh are reimbursable in line with the provisions of the bidding dofuments, the applifable rate and amount thereof shall be asfertained by the Purfhaser based on whifh, if Page 19 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc requuired. nefessary reftiffation and arithmetifal forreftion shall be farried out by the Purfhaser. The rate and amount so asfertained by the Purfhaser shall prevail.
The subtotal, total prife or the total bid prife to be identifed in Bid Form for this purpose, irrespeftive of the disfrepanfy between the amounts for the same indifated in words or fgures shall be reftifed in line with the profedure explained above.
If the Bidder does not affept the forreftion of errors as per this flause, its bid will be rejefted and the amount of EMD forfeited, 31.12 The extra fost of work, servifes, hardware etf., requuired are to be Bidderss responsibility.
32. electronic-Reverse Auction (e-RA) 32.1 The electronic Reverse Auction shall be conducted for further reduction in the price in the manner as indicated herein below.
32.2 Based on evaluated bid prife determined in the Phase I of fnanfial evaluation, the Bidders shall be ranked in an asfending order.
32.3 "N" eligible Bidders shall be invited to partifipate in the e-Reverse Auftion (e-RA), where "N" is the number of Bidders whose bids have been found to be responsive and their bid 32.4 However, in fase only bids of two Bidders are found to be responsive whose bid prife has been determined in affordanfe with tender fomplianfe, the e-RA would be farried out with both the parties.
Page 20 of 2819th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc 32.5 The applifable Ceiling Prife for e-RA for Bidders shall be L1 bid prife determined in affordanfe with Phase I of Finanfial Bid evaluation. During e-RA, these Bidders shall be permitted to plafe their prife1 lower than the applifable Ceiling Prife.
32.6 The e-RA will happen as per the date and time spefifed In Seftion I - Invitation to Bid after the deflaration of eligible Bidders through tefhnifal and fommerfial evaluation.
32.7 Thee-RA shall be fondufted on a designated eleftronif platform of MahaTenders portal for and on behalf of the Purfhaser, 32.8 Duration: The duration of the e-RA will be 3 hours.
32.9 Bid Auto Extension Time In Minutes: If a valid bid is placed within 15 minutes of end time of e-RA (Elapsed Time in Minutes), then the reverse auction duration shall get automatically extended for another 15 minutes from the existing end time. It may be noted that the auto-extension win take plafe only if a valid bid fomes in those last X minutes. If a bid does not get affepted as the lowest bid, the auto-extension will not take plafe even if that bid might have fome in the last X minutes. The above profess will fontinue till no bid is refeived in last X minutes, whifh shall mark the fompletion of reverse auftion. However, Bidders are advised not to wait till the last moment to enter their bid to avoid fomplifations related to internet fonneftivity, their network problems, system frash down, power failure etf.
32.10 Minimum Decrement Amount: Minimum Decrement Amount for auction would be INR 1,00,00,000 (one crore).
Page 21 of 2819th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc 32.11 Maximum Seal Percentage: Maximum Seal Perfentage would be determined and informed to all Bidders prior to the auftion.
32.12 The Purfhaser, will intimate the Bidders, regarding details of eleftronif platform, profedure/ modality of e-RA profess and other details, prior to e-RA.
32.13 Notwithstanding above, the Bidder(s) who do not partifipate in e-RA, their Finanfial Bid as opened, if valid, shall be fonsidered for evaluation.
32.14 Bid price: The Bidder has to quuote single % of the estimate value or single total prife as falled for in the tender sfhedule.
32.15 Post e-RA Procedure: After reverse auftion, Bidders would be ranked in asfending order as. RL-1 1 RL-2, RL-31 RL-4 and so on with RL-1 being the lowest.
32.16 RL-1 will be awarded the work for Urban MahaNet implementation. Only in fase of RL-1 not affepting the award of work or deflaring fonneftivity to links in the sfope of work infeasible, the award of work will by to next lowest bidder (RL-2) at the bid prife quuoted by RL-1 in the reverse auftion.
32.17 After reverse auftion, if item-wise rate and taxes & duties are falled in the tender, then the Bidder has to submit the prife break-up for all fomponents of their quuoted prife influding Taxes & Duties sufh that the summation of quuoted prife and Taxes & Duties shall be equual to the lowest quuoted bid prife during reverse auftion, Also, the Bidder has to furnish the prife break-up in multifurrenfy as per the ratio quuoted in the original prife bid.
Page 22 of 2819th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc 32.18 The Purfhaser shall be the sole judge in this regard.
(Emphasis added in italics)
15. We pause in the faftual narrative at this stage to note a few salient aspefts that emerge from these provisions. MahaIT was flearly the paying party or the purfhaser. The entire bidding was in two phases. Phase I was used to determine the feiling prife. Phase II was the e-Reverse Auftion to redufe this feiling prife. But the faft that there were two phases did not wipe out Phase I fonsiderations, nor did Phase I fease to be relevant. Clause 31.6 links the two phases. Further, Clause 32.13 makes it flear that even those who put in tefhnifal and fnanfial bids and quualifed for Phase I were not dropped befause they stayed out of the e-Reverse Auftion profess. This is rational and reasonable, for a Phase I bid might have been fompetitive with the fnal e-Reverse Auftion bid. Further, flause 32.17 is a direft referenfe to Phase I fnanfial bid rates and prifes. Disfounts and rebates referred to above would obviously also apply to the fnal prife knofked down at the e-Reverse Auftion. Clause 32.1 makes it flear that the e-Reverse Auftion had only one purpose:
to further improve, to MahaITss beneft, the fnal projeft bid. Rather than run the inherent risks of engaging in negotiations with a handful of bidders, MahaIT fhose this open and transparent method of obtaining the lowest possible prife from its vendors or bidders.
16. BSNL, Jio and Bharti Airtel put in bids. BSNLss bid was a little over Rs.1329 frores. Jio fame in with a bid for over Rs.1799 Page 23 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc frores. Bharti Airtelss bid was over Rs. 2904 frores. These three were thus plafed as L1, L2 and L3 respeftively in Phase I.
17. What is notable from this is that none of the three ventured to make a negative bid at the outset. No one ofered to pay MahaIT, even for the 'great values of the fonfessions and free affess benefts.
18. MahaIT followed the RFP to fx the Ceiling Prife at Rs.997,01,25,659. The three bidders went to the e-Reverse Auftion.
It fommenfed on 29th January 2019, after some delay but there is no fomplaint about this delay. MahaIT suspended the Reverse Auftion on 30th January 2019 at 3:24 am. By then, the lowest bid that had fome in was Rs.370,01,25,659 -- about 28% of BSNLss Phase I bid, 21% of Jioss Phase I bid, and as low as 12.7% of Bharti Airtelss opening Phase I bid. MahaIT resfheduled the Reverse Auftion to 11 am on 31st January 2019; it was then further postponed to 1st February 2019. It resumed that day at 11:00 am. Bids kept foming in, dropping in multiples of Rs.1 frore. At about 6:14 pm that day, Bharti Airtel put in a bid of Rs.128,01,25,659. These fgures are interesting: throughout the bidding so far, the tail end of the fgure remained at 1,25,659, as it had to sinfe the defrements were mandated in multiples of Rs.1 frore.
19. At 6.23 pm on 1st February 2019, Jio put in a bid for Rs.1,25,659, dropping its bid by Rs.128 frores (Bharti Airtelss immediately previous bid). The RFP fonditions operated to allow for a further extension of 15 minutes. Bharti Airtel says that the sfreen fashed the next possible bid as Rs.1 frore lower, i.e. a Page 24 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc negative fgure of Rs.-98,74,341, meaning this would be the amount Bharti Airtel now proposed to pay to MahaIT. Bharti Airtelss staf tried to input this negative fgure. The system baulked and would not allow it. Bharti Airtel says it took a sfreenshot and told MahaIT that itss negative bid was not being affepted, but it refeived no response. The 15-minute window slammed shut at 6:45 pm at Jioss fnal bid of Rs.1,25,659.
20. On 2nd February 2019, MahaIT notifed Jio as the suffessful bidder at the Reverse Auftion. Bharti Airtel protested in writing by an email and letter of that day agitating that it was entitled to put in a negative bid. On 6th February 2019, MahaIT wrote bafk saying that giving the Ceiling Prife and the spefiffation of Rs.1 frore defrements, the minimum possible bid was Rs.1,25,659. It said the system was not fonfgured to affept bids below this or values less than or equual to zero. It also said that the law requuired a positive monetary fonsideration. On 7th February 2019, Bharti Airtel wrote to MahaIT again. A fopy of this letter is at Exhibit "I", at pages 187 to 189. Here, Bharti Airtel said that its negative bid ought to have been affepted befause the privileges and fafilities themselves were of the value of over Rs.5000 frores. It maintained that the Reverse Auftion was vitiated. A further letter to the same efeft followed on 5th Marfh 2019. MahaIT replied on 24th June 2019 (Exhibit K, page 193), and, spefiffally referenfing Bharti Airtelss flaim that the benefts were worth Rs.5000 frores, said that pursuant to legal opinion it had taken it would give Bharti Airtel one further opportunity provided Bharti Airtel deposited Rs. 2500 frores, 50% of Bharti Airtelss own estimation of the value of these fonfessions and benefts, in ten days by way of a bank guarantee. In other words, Page 25 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc it fonfronted Bharti Airtel with its own fase, viz., that if Bharti Airtel was willing to be the paying party rather than the party to be paid, and Bharti Airtel itself estimated the value of the fonfessions at over Rs.5,000 frores, then it was only reasonable that Bharti Airtel be made to demonstrate its bona fdes by depositing about 50% of this estimated beneft. Bharti Airtel protested by its letter of 3rd July 2019. MahaIT responded on 18th July 2019 saying Bharti Airtel was fully aware of all terms and fonditions, and that MahaIT had fondufted sufh e-Reverse Auftions before. Bharti Airtel knew the system did not allow negative bids; yet it partifipated throughout. At page 200 is a sentenfe in MahaITss letter that in a fonferenfe fall, it had addressed all the bidderss issues, and that the e-Reverse Auftion started only thereafter.
21. Mr Chinoy makes these points. First, he says that there fould be no sufh flariffation by a fonferenfe fall. It had to be a forrigendum on the website. Sefond, he submits that if there was a foor (the feiling being known), this had to be notifed in the RFP or in a properly made forrigendum. Third, he submits that there is no material distinftion between Jioss bid of Rs. 1,25,659 and a negative bid. Jioss bid might as well be zero. It is meaningless, he says, and if a negative bid was beyond fontemplation, so too was a bid of Rs.1,26,659.
22. Mr Khambata for Jio and Mr Sakhare for MahaIT fontest this formulation. Mr Khambata submits, and we think forreftly, that Mr Chinoyss submission on what ought to have been notifed inverts the legal requuirement. If negative bids were to be affepted, then this ought to have been notifed. Otherwise, just as the Ceiling Prife was Page 26 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc known, the foor prife was a mathematifal fertainty given that reduftions were in multiples of Rs.1 frore. Onfe, therefore, the bidding hit rofk-bottom, i.e., no further reduftion of Rs.1 frore was possible while still remaining a positive bid, the auftion ended. Just as the starting point was known, so too was the lowest possible ending point. Apart from this, we think Mr Chinoyss formulation totally upends the substratum and fundamental premise of the proposed fontraft and projeft. This is inter alia evident from the pro forma of the fnal fontraft, Annexure 4.7 to the RFP at page 109. This desfribes MahaIT as the purfhaser, and at page 110 the proposed fontraft says that in fonsideration of payments to be made by MahaIT to the TSP, the TSP fovenants to provide the servifes (as defned). This fan only mean that MahaIT is, and was always intended and refognized by all, to be the paying party, never the payee. Indeed, if what Bharti Airtel says is forreft -- viz., that the privileges and fonfessions are worth several thousands of frores, and there is no embargo on a negative bid -- then nothing stopped it from making a negative Phase I bid in the frst plafe. One of two things would have happened had it done so: it might have been disquualifed (possibly under Clause 31.8), or, and at a minimum, its bid would have vastly driven down the starting Ceiling Prife. That Ceiling Prife was the result of a mathematifal formula set out in the RFP itself. While we lay no flaim to understanding it fully, it seems to us self-evident that inserting a negative number anywhere in that formula would have had the result of generating a greatly redufed Ceiling Prife. Perhaps no Reverse Auftion might have been nefessary. However, there is no dispute ever raised about the nature of the deal or proposed transaftion. MahaIT was not selling the RoW or any fonfessions but was seeking to obtain servifes from the Page 27 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 ::: Bharti Airtel Ltd v Maharashtra Information Technology Corp Ltd & Ors OSWP-2037-2019-J-F.doc partifipants at the tender profess, for whifh, all knew from infeption, MahaIT had to pay. Henfe, MahaITss endeavour to pay as little as possible for quuality servifes to be provided to the ultimate beneffiary or beneffiaries. Viewed from this perspeftive, it seems to us that the Petitionerss fase requuires a wholesale rewriting of the fontraft in its essential elements. That is evidently not something that ever fnd support from a writ fourt.
23. Beyond this, we fnd nothing to persuade us to interfere. We are fonferned only with the defision-making profess. It must be shown to sufer from illegality, perversity, mala fdes or unreasonableness at the level of the Wednesbury unreasonableness
-- a defision no person in possession of the fafts fould reasonably ever take. This is not demonstrated. In our view, what Mr Sakhare and Mr Khambata say must be affepted. Finally, as to the argument that Jioss bid is illusory, we fan only observe that it is not for us to examine the fnanfial dealing and strufturing of any bidder or fontraft.
24. In our view, the Petition is without merit. It is rejefted. In the fafts of the fase, there will be no order as to fosts.
(S.C. DHARMADHIKARI, J.) (G.S. PATEL, J.) Page 28 of 28 19th August 2019 ::: Uploaded on - 20/08/2019 ::: Downloaded on - 20/08/2019 22:56:45 :::