Patna High Court - Orders
United India Insurance Company Ltd. vs The State Of Bihar & Ors on 21 April, 2014
Author: Ramesh Kumar Datta
Bench: Ramesh Kumar Datta
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.17628 of 2013
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United India Insurance Company Limited, a Government of India
subsidiary, registered under the Companies Act, 1956 having its registered
office at 24, Whites Road, Chenni- 600014 and having having their regional
office at Chanakya Tower, 3rd Floor, R-Block, Patna-800001 through Mr.
A.K.Sekhri, Chief Regional Manager of Patna regional office.
.... .... Petitioner
Versus
1. The State of Bihar through the Chief Secretary, Old Secretariat, Patna
2. The Principal Secretary, Department of Labour Resources, Government
of Bihar, Vikas Bhawan, Patna- 800 001
3. Directorate General of Labour Welfare, Ministry of Labour and
Employment, Government of India
4. ICICI Lombard General Insurance Company, ICICI Lombard House,
414, Veer Savarkar marg, near Siddhi Vinayak Temple, Prabhadevi,
Mumbai- 400025
5. National Insurance Company Limited, 3, Middleton Street, P.O. Box
No. 5229, Kolkatta 700 071, having its Regional office at 4th Floor,
Sone Bhawan, Birchand Patel Marg, Patna- 800001
.... .... Respondents
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Appearance :
For the Petitioner/s : Mr. Y.V.Giri, Sr.Advocate with M/S
Sanjeev Kumar & Alok Kumar, Advocates
For the State : Mr. Manoj Kumar Ambastha, GP 14 with
Mr.Subodh Kumar, AC to GP 14
For Respondent No.4 : Mr.Durgesh Kumar Singh, Advocate
For Respondent No.5 : Mr.S.K.Giri, Advocate
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CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA
ORAL ORDER
3 21-04-2014Heard learned counsel for the petitioner-United India Insurance Company Limited and learned counsels for the respondent State of Bihar as also respondent No.4 and for respondent No.5.
The writ application has been filed seeking a direction on the respondents to open the financial bid of the petitioner and consider the same before declaring the successful bidder with respect to four out of six districts for which the tender was floated Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 2 and also for restraining the respondent Nos. 1, 2 & 3 from awarding the contract of the said districts for health insurance under the Scheme to Respondent No.4.
The petitioner along with others filed the tender application with respect to the tender floated for implementing the Rashtriya Swasthya Bima Yojana (Health Insurance Scheme) in six districts, namely, Saharsa, Bhagalpur, Jamui, Lakhisarai, Nawadah and Patna. The said Scheme is a Central Government Scheme for the benefit of economically weaker sections of society. The Department of Labour Resources, Government of Bihar has been set up as the State Nodal Agency for implementing the Scheme and accordingly the tender was floated by the Labour Department. As many as 12 Insurance Companies filed their proposal in response to the tender in all the six districts and the technical bids were opened at 1 P.M. on 16.8.2013. The Technical Bid Committee finding some discrepancies in the bid documents of five Insurance Companies, including the petitioner, disqualified them and their proposals were kept pending for the final decision of respondent No.1. So far as the petitioner is concerned, it had not filed soft copies of the technical and financial bids and declarations in Annexures-C and D had also not been signed by the authorized signatory. So far as the respondent No.4 is concerned, apart from not submitting the soft copies it had not Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 3 filled up Annexure-F and the same was left blank which is contrary to the requirement under the tender conditions. The requirement of submitting soft copy was waived with respect to all the tenderers who had not so filed.
The representative of the petitioner, who was present during the opening of the technical bid and was the authorized signatory who had signed the tender documents, made a prayer that he may be permitted to sign the Annexure-C and Annexure-D which were in the nature of certain undertakings, if selected as the successful bidder, regarding agreement to all the terms and conditions of the tender and to using the services of only those third party Administrators, Smart Card service providers and similar agencies that fulfil the criteria specified in the tender documents. The respondents, however, did not permit to do so. A written representation had been filed by the petitioner in this regard which was also subsequently rejected by letter dated 26.8.2013 of the Executive Director, Bihar State Labour Welfare Samiti. It is pointed out that earlier also the petitioner pursuant to an earlier tender had emerged as the successful bidder for Bhagalpur and Saharsa districts but on allegations of delay, etc. the said agreement was cancelled and the petitioner had been debarred from participating in future tenders. However, by order dated 11.6.2013 of the Deputy Director General, Ministry of Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 4 Labour and Employment, Government of India as the Chairman of the National Grievance Redressal Committee it was held that the petitioner cannot be disqualified for future tenders in two districts just because of the delay in starting of enrolment in these districts as the State Nodal Agency was equally at fault for this delay in the starting of the scheme in Bhagalpur and Saharsa districts.
It is the stand of respondent No.5, National Insurance Company, that after the Technical Bid Committee had closed its proceedings and financial bid had been opened of as many as three tenderers, the officer was summoned by the higher authorities, namely, respondent No.2, the Principal Secretary, Department of Labour Resources and was directed that the defects in the technical bid of respondent No.4 may be ignored after obtaining No Objection Certificate from the participating tenderers and it be allowed to participate in the tender. Accordingly, No Objection Certificate was obtained from the representatives of the tenderers, excluding that of the petitioner who had by that stage of proceedings left the place. It is also the stand of respondent No.5 that the officers of the companies, including that of the National Insurance Company, were compelled to sign No Objection with regard to ICICI Lombard General Insurance Company Ltd. in the financial bid despite protest and the further stand is that the representative of the said Insurance Company was also not Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 5 authorized to sign any such objection. However, after opening the financial bid of respondent No.4 also ultimately in two districts, namely, Patna and Saharsa, the National Insurance Company was found to be the lowest bidder whereas in the remaining districts the respondent No.4 was found to be the lowest bidder. The challenge of the petitioner is confined only to the selection of respondent No.4 with respect to the four districts and the writ application is, accordingly, confined only with regard to the selection which has taken place in the four districts of Jamui, Bhagalpur, Nawadah and Lakhisarai where the petitioner claims that respondent No.4 has been wrongly selected by relaxing the norms and adopting unprecedented procedure and further by illegally keeping out the petitioner from the said process. The petitioner also claims that its quotations in the financial bid were lower and more competitive which has resulted in loss of Rs. 5.3 crores to the State Exchequer.
In support of his stand regarding illegal action of respondents in the tender process, learned counsel for the petitioner relies upon certain provisions of the tender documents as contained in „Part-II-Instructions to Bidders‟; Clause 3.4, Clause 4.3 and Clause 6.1 which have been relied upon by the petitioner as also by the respondents are quoted below :
"3.4 Formats and Submission of the Bid a. The Bidder shall submit the following Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 6 documents as part of its Technical Bid:
i. The Technical Bid in the format set out in Annexure A. ii. Self certified copies (Self certified copy by Insurance Companies‟ authorized signatory) of the registration granted by the IRDA for carrying on general insurance (including health insurance) business in India as Annexure B. iii. The undertaking by the bidder regarding agreement to all the terms and conditions of RSBY as provided in this tender as per Annexure C. iv. The undertaking by the Bidder to use the services of only those Third Party Administrators, Smart Card Service Providers and similar agencies that fulfil the criteria specified in the Tender Documents, in the format set out in Annexure D. v. Information regarding the Bidder‟s previous experience for last 12 months/policy year in implementing the RSBY (if any), in the format set out at Annexure E. In the same format, the Bidder should provide a brief write-up of its experience in implementing the RSBY, including the following items:
Coordination with the State Government Enrolment of Beneficiary Empanelment of Health Care Providers Service Delivery to the Beneficiary Settlement of claims Experience with TPA/Smart card vendor vi. List of medical or surgical procedures or interventions in addition to those set out in Appendix 3 (if any) with Package Rates, in the format specified in Annexure F. vii. The Certificate from the Bidder‟s Chief Underwriter/appointed actuary stating that due diligence has been done in calculation of rates as per actuarial calculations, in the format set out in Annexure G. Note: If the Bidder does not have previous experience in implementing the RSBY and/or if the Bidder is not proposing any additional Package Rates, then the Bidder shall submit Annexure D and/or Annexure E without any details and stating „Nil‟. 4.3 General Points for Bid Submission b. The Bidder shall submit one original hard copy and one soft copy (in a CD/DVD/Pendrive) of the Technical Bid and original hard copy (ies) and soft copy (ies) of the Financial Bid in the respective envelope.Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 7
c. The Bid shall contain no alterations, omissions or additions, unless such alterations, omissions or additions are signed by the authorized signatory or the Bidder.
d. The Bidder should attach clearly marked and referenced continuation sheets if the space provided in the prescribed forms in the Annexures is insufficient. Alternatively, the Bidder may format the prescribed forms making due provision for incorporation of the requested information, but without changing the contents of such prescribed formats.
e. Any interlineations, erasures, or overwriting will be valid only if they are signed by the authorized signatory of the Bidder.
xxxxxxxxxxxxxxxx 6.1 Technical Bid Evaluation a. The Technical Bids will first be evaluated for responsiveness to the Tender Documents. If any Technical Bid is found : (i) not to be complete in all respects; (ii) not in the prescribed formats or (iii) to contain material alterations, conditions, deviations or omissions, then such Technical Bid will be deemed to be substantially non-responsive.
b. A substantially non-responsive Technical Bid shall be liable to be rejected, unless the State Nodal Agency elects to seek clarifications from the Bidder or to construe information submitted by the Bidder in the manner that the State Nodal Agency deems fit.
c. The State Nodal Agency will evaluate only those Technical Bids that are found to be substantially responsive, to determine whether such Bidders are eligible and meet the Qualification Criteria, in accordance with the requirements set out at Clause 1.
d. In order to determine whether the Bidder is eligible and meets the Qualification Criteria, the State Nodal Agency will examine the documentary evidence of the Bidder‟s qualifications submitted by the Bidder and any additional information which the State Nodal Agency receives from the Bidder upon request by the State Nodal Agency. For evaluation of the Technical Bids, the State Nodal Agency will apply the evaluation criteria set out at Appendix 16.
e. After completion of the evaluation of the Technical Bids, the State Nodal Agency will notify the Eligible Bidders of the date of opening of the Financial Bids. Such notification may be issued on the date of Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 8 issuance of the opening of the Technical Bids, in which case the Financial Bids may be opened either on the same day or the next working day. The Financial Bids of those Bidders who are not declared as Eligible Bidders will be returned to them unopened."
On the basis of the said provisions it is submitted by learned counsel for the petitioner that only a substantially non- responsive technical bid is liable to be rejected under Clause 6.1(b) of the tender conditions although it is clearly provided that even in such a situation the State Nodal Agency may elect to seek clarifications from the Bidder or to construe information submitted by the bidder in the manner that the State Nodal Agency deems fit and further under sub-Clause (c) the State Nodal Agency was required to see whether such bidders are eligible and meet the qualification criteria in accordance with the requirements set out in Clause 1 of the instructions contained in the tender documents; the Nodal Agency was also required to examine the documentary evidence of the Bidder‟s qualifications submitted by the bidder and any additional information which the State Nodal Agency receives from the bidder upon request by the State Nodal Agency. It is thus submitted by learned counsel that essentially what was required by the State Nodal Agency was to see whether the qualification criteria was possessed by the bidder. It is urged by learned counsel that the rejection of the technical bid of the petitioner is not on the ground of not meeting such criteria, rather Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 9 it is only on the technical plea that Annexures C and D to the application documents had not been signed by the authorized representative of the petitioner. It is the stand of learned counsel for the petitioner that non-signing of such documents which are only in the nature of certain undertakings could not be said to be such essential condition of the tender process so as to go to the root of the matter and the same was in fact a rectifiable defect which could have been permitted to be removed, more so when the authorized representative of the petitioner was very much present at the time of opening of the tender.
Learned counsel further submits that as a matter of fact the petitioner in his application, as contained in Annexure A form of technical bid of the tender document, had already in paragraph 10 given agreement and undertaking to abide by all the conditions of the tender documents including all Addenda, Annexures and Appendices and the said document was duly signed by the authorized signatory, Dr. Sanjay Kumar Roy, Regional Manager of the petitioner Company. It is thus submitted that the Annexures C and D even if they did not contain the signature of the Regional Manager Dr.Sanjay Kumar Roy, the same could not be considered a serious non-compliance as the said undertaking in fact was superfluous in terms of paragraph 10 of Annexure A form of technical bid. That, according to learned counsel for the petitioner, Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 10 was all the more reason why permission should have been given to the petitioner‟s authorized representative to sign the same at the time of opening of technical bid in view of the general undertaking given with regard to the Addenda, Annexures and Appendices already in the application at Annexure A. I may here notice a controversy at the initial stage. Such controversy was raised by the petitioner before the respondents and which was also taken at the time of filing of the writ application that the authorized representative had in fact put his initials on Annexures C and D, but subsequently upon the production of the technical bid document of the petitioner before this Court which was also shown to learned counsel for the petitioner, it is evident from the said document Annexure C and D that the same did not contain the signature or even initials of the Regional Manager, the authorized signatory of the petitioner.
Learned counsel however submits that in terms of the law laid down by the Apex Court and this Court, no consequence having been assigned with regard to non-signing of the undertakings contained in Annexures C and D, the same should be treated as directory and not mandatory and ought to have been permitted to be rectified by the petitioner.
In support of the aforesaid stand learned counsel for the petitioner relies upon a decision of the Apex Court in the case of Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 11 B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others :
(2006)11 SCC 548, in paragraphs 66 & 69 of which it has been held as follows :
"66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under :
(i) if there are essential conditions, they must be adhered to;
(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;
(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;
(vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint.
69. While saying so, however, we would like to observe that having regard to the fact that huge public money is Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 12 involved, a public sector undertaking in view of the principles of good corporate governance may accept such tenders which are economically beneficial to it. It may be true that essential terms of the contract were required to be fulfilled. If a party failed and/or neglected to comply with the requisite conditions which were essential for consideration of its case by the employer, it cannot supply the details at a later stage or quote a lower rate upon ascertaining the rate quoted by others. Whether an employer has power of relaxation must be found out not only from the terms of the notice inviting tender but also the general practice prevailing in India. For the said purpose, the court may consider the practice prevailing in the past. Keeping in view a particular object, if in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Once such a power is exercised, one of the questions which would arise for consideration by the superior courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain themselves in exercise of their discretionary jurisdiction."
Learned counsel further relies upon a decision of the Supreme Court in the case of M/s. Poddar Steel Corporation vs. M/s. Ganesh Engineering Works & Ors. : (1991) 3 SCC 273, in paragraphs 6 & 8 of which it has been laid down as follows :
"6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank clause no.6 of the tender notice was not obeyed literally, but the question is as to whether the said non- compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 13 classified into two categories- those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in C.J. Fernandez vs. State of Karnataka & Ors: 1990 (2) SCC 488, a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty vs. International Airport Authority of India & Ors. :1979 (3) SCC 489, but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However, it remains to be seen as to which of the two clauses, the present case belongs.
8. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank. In this situation it is not correct to hold that the diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6, specially when it was in its interest not to reject the said bid which was the highest. We, therefore, set aside the impugned judgment and dismiss the writ petition of the respondent 1 filed before the High Court. The appeal is accordingly allowed with costs throughout."Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 14
Learned counsel also relies upon a decision of this Court dated 21.2.2013 in CWJC No.443 of 2013 (M/s. Hari Om Constructions vs. The State of Bihar & Ors.) wherein it has been held as follows :
"With respect to the Certificate issued by the Bank, I find some force in the submission of learned counsel for the petitioner. It is true that the requirement is that the technical bid should be substantially responsive to the requirements of the bidding documents. Further it has been clearly provided that at the stage of technical bid with respect to rectifiable defects, the bidder will be asked in writing (usually within 10 days of opening of the Technical Bid) to clarify or modify his technical bid, if necessary, with respect to any rectifiable defects but the same has not been specified at all in the S.B.D. and neither of the learned counsels for the respondents has been able to show any provision of SBD which specifies the rectifiable defects. From a perusal of the format and the Bank Certificate filed by the petitioner, I find that the Bank Certificate issued to the petitioner is not so much a conditional document as it is sought to be made out as the conditional word used in the Bank Certificate is in the nature of precaution used by the Bank while issuing the certificate mentioning the factual position that there is no confirmation of sanction of the loan limit which would be subject to the fulfillment of the terms and conditions adhered to by the Bank. It is evident from the format of the Bank Certificate under SBD that there is no specific commitment stated in the said Certificate that the overdraft/credit facility has already been granted rather it is only averred that the Bank shall be able to provide the same to the extent mentioned in the certificate to meet their working capital requirements for executing the contract in question. Thus, even with the Bank Certificate under the format, it cannot be said that there is commitment by the Bank to provide the working capital requirement for executing the contract in question. However, in my view there being a provision for rectification of certificate during the consideration of the technical bid, the petitioner should have been provided an opportunity of rectifying the Bank Certificate."Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 15
Learned counsel also relies upon a decision of the Apex Court in the case of Reliance Energy Ltd. and another vs. Maharashtra State Road Development Corporation Ltd. and others : (2007) 8 SCC 1, paragraphs 36, 38 and 39 of which are quoted below :
"36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of "non-discrimination". However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to "right to life". It includes "opportunity".
In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N., Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. "Level playing field" is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of "level playing field". We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of "level playing field" is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. "Globalisation", in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of "globalisation". Decisions or acts which result in unequal and discriminatory treatment, would violate Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 16 the doctrine of "level playing field" embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of "equality" should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of "level playing field". According to Lord Goldsmith, commitment to the "rule of law" is the heart of parliamentary democracy. One of the important elements of the "rule of law" is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of "reasonableness", then such an act or decision would be unconstitutional.
38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This "legal certainty" is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of "level playing field".
39. In Reliance Airport Developers (P) Ltd. v. Airports Authority of India the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms. Those norms may be legal Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 17 norms or accounting norms. As long as the norms are clear and properly understood by the decision- maker and the bidders and other stakeholders, uncertainty and thereby breach of the rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above "certainty" is an important aspect of the rule of law. In Reliance Airport Developers the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks at different stages. Objectivity was thus provided."
Learned counsel further relies upon a decision of the Supreme Court in the case of Tata Cellular vs. Union of India :
(1994) 6 SCC 651, in paragraphs 77, 80, 81 and 83 of which it has been held as follows :
" 77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 18 only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury
unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
80. At this stage, The Supreme Court Practice, 1993, Vol. 1, pp. 849-850, may be quoted:
"4. Wednesbury principle.-- A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn, per Lord Greene, M.R.)"
81. Two other facets of irrationality may be mentioned.
(1) It is open to the court to review the decision-maker‟s evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 19 of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v.
Secretary of State for Environment, the Secretary of State referred to a number of factors which led him to the conclusion that a non-
resident‟s bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. The Divisional Court analysed the factors which led the Secretary of State to that conclusion and, having done so, set it aside. Donaldson, L.J. said that he could not see on what basis the Secretary of State had reached his conclusion.
(2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On this basis in R. v. Barnet London Borough Council, ex p Johnson the condition imposed by a local authority prohibiting participation by those affiliated with political parties at events to be held in the authority‟s parks was struck down.
83. A modern comprehensive statement about judicial review by Lord Denning is very apposite; it is perhaps worthwhile noting that he stresses the supervisory nature of the jurisdiction:
"Parliament often entrusts the decision of a matter to a specified person or body, without providing for any appeal. It may be a judicial decision, or a quasi-judicial decision, or an administrative decision. Sometimes Parliament says its decision is to be final. At other times it says nothing about it. In all these cases the courts will not themselves take the place of the body to whom Parliament has entrusted the decision. The courts will not themselves embark on a rehearing of the matter. See Healey v. Minister of Health. But nevertheless, the courts will, if called upon, act in a supervisory capacity. They will see that the decision-making body acts fairly. See H.K. (an infant), Re, and R. Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 20 v. Gaming Board for Great Britain, ex p Benaim and Khaida. The courts will ensure that the body acts in accordance with the law. If a question arises on the interpretation of words, the courts will decide it by declaring what is the correct interpretation. See Punton v. Ministry of Pensions and National Insurance. And if the decision-making body has gone wrong in its interpretation they can set its order aside. See Ashbridge Investments Ltd. v. Minister of Housing and Local Government. (I know of some expressions to the contrary but they are not correct). If the decision-making body is influenced by considerations which ought not to influence it; or fails to take into account matters which it ought to take into account, the court will interfere. See Padfield v. Minister of Agriculture, Fisheries and Food. If the decision- making body comes to its decision on no evidence or comes to an unreasonable finding -- so unreasonable that a reasonable person would not have come to it -- then again the courts will interfere. See Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. If the decision-making body goes outside its powers or misconstrues the extent of its powers, then, too the courts can interfere. See Anisminic Ltd. v. Foreign Compensation Commission. And, of course, if the body acts in bad faith or for an ulterior object, which is not authorised by law, its decision will be set aside. See Sydney Municipal Council v. Campbell. In exercising these powers, the courts will take into account any reasons which the body may give for its decisions. If it gives no reasons -- in a case when it may reasonably be expected to do so, the courts may infer that it has no good reason for reaching its conclusion, and act accordingly. See Padfield case (as AC pp. 1007, 1061)""
The other key of submission of learned counsel for the petitioner is that respondent No.4 having failed to fill up the essential Annexure F to the tender application the same could not Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 21 have been waived by the respondents and the procedure adopted in that regard was totally unacceptable. Apart from the fact that no No Objection was given by the petitioner‟s representative it is submitted that it has come on the record that the so-called No Objection of the other participants was taken under compulsion that too when such representatives were not authorized to give such No Objection.
It is further submitted by learned counsel that respondent No.4 was not eligible and could not have been considered on the basis of any such relaxation of essential condition due to non- filling up of Annexure-F. Learned counsel further submits that even on a consideration of public interest this Court ought to intervene as the petitioner‟s bid was lower than that of respondent No.4 and permit the petitioner to participate in the financial bid process the failure of which has resulted in substantial loss of Rs.5.3 crores to the State and the Central Government funds due to the lower offer price with quality of service.
Lastly it is submitted by learned counsel for the petitioner that the respondents have acted with deliberate malice against the petitioner considering the action taken by them against it earlier which has been set aside by the National Grievance Redressal Committee subsequently.
Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 22
Learned counsel for the State, on the other hand, has sought to support the action of the respondents by relying upon the statements made in the counter affidavit. It is submitted that the technical bid of the petitioner was found to be substantially non- responsive as the authorized representative of the petitioner did not sign the Annexures C and D. In terms of Clause 3.4 of the tender documents such substantially non-responsive technical bid was liable to be rejected in accordance with paragraph-6 of the tender documents and financial bid of the bidder was therefore not to be considered.
It is contended that the Technical Bid Committee has rightly held that the deficiency with regard to non-submission of Annexure-F which provided for list of medical or surgical procedures or interventions in addition to those set out in Appendix 3 (if any) was a rectifiable minor/common defect and therefore with due consent of all the representatives of the bidders present there the technical bids of all such bidders were declared responsive. It is further submitted that none of the bidders raised any objection on the procedure followed by the evaluation committee and therefore the technical bids of all the 11 insurance companies except the petitioner company were declared qualified and for the said reason the financial bid of the petitioner was not opened.
Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 23
Learned counsel thus submits that the bidding process was done in a most transparent manner and hence there is no procedural irregularity or illegality and the petitioner was rightly disqualified for having submitted unsigned Annexures C and D. Learned counsel for respondent No.4, apart from adopting the submissions of learned counsel for the State, submits that the provisions of Clause 3.4 a. vi. regarding filling up of Annexure-F could not be considered to be mandatory as it is clearly provided in the said clause read with the Annexure-F that it was open to the tenderer to write the word „No‟ for providing such additional service and writing of „No‟ would not deprive such tenderer from consideration his bid. In such circumstances it is urged by learned counsel that a mere non-filling could not be held to disqualify and accordingly the Technical Bid Committee rightly took the decision to consider the respondent No.4‟s technical bid as substantially responsive and permitted the respondent No.4‟s financial bid to be opened, that too, after obtaining NOC from the other bidders.
I have considered the rival submissions of learned counsels for the parties. The first important issue to be considered is as to whether the rejection of the technical bid of the petitioner can be held to be valid. It is evident from Annexures C and D that they merely provide for certain undertakings to be given which Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 24 undertakings may themselves be relevant in order to bind the tenderer to the said conditions but the same is a general condition and not an essential qualification per se for the tenderer to be eligible for carrying out the work under which the tender has been floated. It is no ones case that the petitioner is not qualified to do so. The law on this point has now been settled by a large number of decisions, some of which have been cited by learned counsel for the petitioner, that an authority inviting tender is not bound to give effect to every term mentioned in the notice in meticulous detail and is entitled to waive a technical irregularity of little or no significance.
It has also been held that in all tender process the requirements can be broadly categorized as those which lay down essential conditions of eligibility and the others which are merely ancillary or subsidiary to the main object. In the case of essential condition of eligibility the authority issuing the tender would be required to enforce it rigidly while with respect to other ancillary or subsidiary condition it is open to the authority to deviate from and not to insist upon a strict literal compliance of such condition in appropriate cases.
Evidently the requirement of signing undertaking in form C and D cannot be considered an essential condition of eligibility rather the essential condition is the qualification as laid Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 25 down in Clause 1 of the tender documents as instruction to bidders. The giving of undertakings in Annexures C and D are definitely ancillary and subsidiary conditions and thus the same may not have been enforced by the respondents with the same strictness. While the respondents ought to have insisted on the said condition being fulfilled before the financial bid would be opened, it was an extreme action on their part to have declared the petitioner as disqualified, although it is not disputed that the petitioner‟s authorized representative was present at the time of opening of the technical bid and willing to sign; more so when the respondents have themselves relaxed the condition regarding filling up of Annexure-F with regard to the respondent No.4.
Moreover, as rightly pointed out by learned counsel for the petitioner, paragraph-10 of Annexure-A of the technical bid application is also an undertaking to abide by the terms and conditions of the tender and thus it can be considered as a wide undertaking that would substantially and effectively cover both Annexures C and D undertakings also. In the said circumstances, it was all the more incumbent upon the respondents to have permitted the petitioner‟s authorized representative signatory to have signed upon Annexures C and D when the technical bid was opened and thereafter taken the petitioner‟s financial bid into consideration.
Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 26
The said procedure, insisting upon the matter in respect of letter of the tender documents in respect of the petitioner, becomes all the more glaring considering the fact that non-filling up form Annexure F by respondent No.4 has been ignored by them and his financial bid had been permitted to be opened. So far as the question of obtaining "No Objection" of the representatives of other tenders is concerned, this Court considers the said action to be contrary to the norms of the tender process and the same may give rise to the serious adverse consequences and malpractices having debilitating impact upon the tender process. Whether a condition of tender is to be relaxed or not is a matter to be considered on the basis of the law laid down by the Apex Court and this Court in a series of decisions and the same really pertains to the power to relax a non-essential condition. It certainly does not depend upon the other bidders agreeing or not agreeing to the same, as the right to relax a non-essential condition may be generally presumed but an essential condition cannot be relaxed even if all the other tenderers express their no objection to it. Moreover, the question of authority of the representative of a tenderer to grant such relaxation would also be open to question, as has been raised in the present matter also by some of the tenderers.
So far as the nature of Annexure F is concerned, in my Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 27 view, it would stand on a similar footing as Annexures C and D and it cannot be considered to be an essential condition since it was open to the tenderer not to provide any additional service by writing the same in the said Annexure to that extent without incurring any disqualification. Thus the contention of learned counsel for the petitioner is not accepted that it was a mandatory document.
I am further of the view that in the present matter the petitioner company is an old established public sector insurance company which having earlier successfully competed for the scheme in Bhagalpur and Saharsa that was later on cancelled by the respondents with a direction to debar it, which debarment has been removed by the National Grievance Redressal Committee, and thus there may be some force in the submission of learned counsel for the petitioner that the respondents have been discriminatory in their treatment toward it.
Further considering the alleged loss of Rs. 5.3 crores to the Government Exchequer public interest also demands that the petitioner ought to have been allowed to participate in the tender process at the financial bid taking an overall view of the matter.
In the light of the aforesaid discussions, the writ application is allowed. The decision of the respondents to reject the technical bid of the petitioner is set aside and they are directed Patna High Court CWJC No.17628 of 2013 (3) dt.21-04-2014 28 to open the financial bid of the petitioner and thereafter finally decide the tenders in accordance with law after permitting the authorized signatory of the petitioner to sign on Annexures C and D of the technical bid document.
(Ramesh Kumar Datta, J) spal/-