Meghalaya High Court
Benson Medical Equipments India Pvt Ltd vs North Eastern Indira Gandhi Regional ... on 6 October, 2017
1
WA No.40/2017
Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS
IN THE HIGH COURT OF MEGHALAYA AT
SHILONG
: JUDGMENT :
WA No. 40 of 2017 Benson Medical Equipments (India) Pvt. Ltd. ... Appellant
-Versus-
North Eastern Indira Gandhi Regional Institute of Health and Medical Sciences (NEIGRIHMS) and Ors.
... Respondents
Date of Judgment : 6th October 2017
PRESENT
HON'BLE SHRI JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE HON'BLE SHRI JUSTICE S.R. SEN Shri Deepam Borah, for the appellant Shri K. Paul, for the respondents BY THE COURT: (per Hon'ble the Chief Justice) Preliminary This intra-court appeal is directed against the order 07.07.2017 as passed in WP (C) No.294 of 2016, whereby the learned Single Judge of this Court has dismissed the writ petition filed by the petitioner/appellant against the action of the respondents in rejecting its bid in the Online Open Tender Enquiry dated 25.08.2015 for "Supply, Installation and Commissioning of Gas Pipeline and Manifold System". The petitioner/appellant, while submitting its bid in response to the Tender Enquiry aforesaid, claimed exemption from Earnest Money Deposit [„EMD‟] on the basis of the Government Purchase Certificate dated 24.09.2015, as issued by the National Small Industries Corporation Limited [„NSIC‟] in its favour. However, the petitioner/appellant‟s claim for such an exemption was declined by the respondents essentially for the reason that the items mentioned at Serial Number 5.3, 14 and 15 in the 2 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS Bill of Quantities [„BOQ‟] of the Tender Enquiry were not listed in the "stores details" of the said NSIC certificate dated 24.09.2015. The petitioner/appellant‟s challenge to the action of the respondents has not been accepted by the learned Single Judge with reference to the Division Bench decision of the Hon‟ble Delhi High Court in the case of M/s Opaque Infrastructure Pvt. Ltd. [WP (C) No.1344 of 2015 decided on 26.03.2015] and with the finding that the petitioner/appellant was not entitled to seek exemption from EMD for want of the said items in the NSIC Certificate. Aggrieved, the petitioner/appellant has preferred this intra-court appeal.
In order to address the issues raised in this appeal, appropriate it would be to take note of the relevant background aspects in a little detail. THE RELEVANT BACKGROUND ASPECTS The Director, North Eastern Indira Gandhi Regional Institute of Health and Medical Sciences, Shillong [„NEIGRIHMS‟] issued the Notice Inviting Tenders [„NIT‟] by way of the Online Open Tender Enquiry No. NEIGR/S&P/OT/E-33/2015-16 dated 25.08.2015 for procurement of stores/items, broadly termed as "Centralised Medical Gas Manifold System and Manifold". The requisite quantity was stated as "Composite Turnkey Requirement" and EMD for the bids was fixed at Rs.30 lakhs with the following stipulations and instructions:-
"SECTION 1: NOTICE INVITING TENDERS (NIT) Online tenders, in two-bid system, are invited by Director, NEIGRIHMS, Shillong for procurement of stores/items for the Institute, as per enclosed specification and related terms and conditions.
Sl. Name of Equipment Quantity Manufacturer/ Earnest Money
No Company Deposit (EMD)
Centralized Medical Composite Rs.30,00,000.00
1. Gas Manifold turnkey (Rupees Thirty
System and requirement Lakh only)
Manifold
3
WA No.40/2017
Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS E-Bids are invited, for and on behalf of Director NEIGRIHMS, Shillong from established, reputed and experienced manufacturers or their authorized representatives for the Supply, Installation & Commissioning of Gas Pipe Line and Manifold System (including operation for 10 yrs.) as per the enclosed Technical Specifications.
Bidders are invited to study the tender document and terms & conditions carefully. Submission of tender shall be deemed to have been done after careful study and examination of the tender document with full understanding of its implications.
The scope of work shall include Supply, Installation, Commissioning & Satisfactory Demonstration. This will also include testing, packing, transportation, scheduling of transportation, transit insurance, delivery at sites, unloading, storage, job site storage, insurance, installation any other services associated with the delivery of the equipment and materials providing warranty of services and operation and maintenance of other related equipment/items required for complete installation. The successful bidder will assume full responsibility of the complete system until final acceptance.
It will be imperative on each bidder to fully acquaint himself with all the local conditions and factors which would have any effect on the performance of the System. No request for the change of price, or time, schedule of delivery of stores shall be entertained after the purchaser on account of any local condition or factor accepts the offer.
The bidders are required to have a survey including a site visit before furnishing the bids. They have to apply for permission in this regard to the Director, NEIGRIHMS. The Director, NEIGRIHMS, will give such permission in writing, but the expenses, in connection with the visit and surveys shall be borne by the bidders themselves."
As noticed above, the tenderers were otherwise required to deposit earnest money to the tune of Rs.30 lakhs. However, an exemption was provided from such EMD in Clause 19.2 of the General Instructions to Tenderers [„GIT‟] in the following terms:-
"19. 2 The tenderers who are currently registered and, also, will continue to remain registered during the tender validity period with Directorate General of Supplies & Disposals or with National Small Industries Corporation, New Delhi for the specific goods as per tender enquiry specification shall be eligible for exemption from EMD. Vague stipulations in the Registration Certificate such as "to customers‟ specification" etc. will not be acceptable for exemption from furnishing of earnest money. In case the tenderer falls in these categories, it should furnish copy of its valid registration details (with DGS&D or NSIC, as the case may be)."
(underlining supplied) The expression "Goods" was also defined in Clause 1.2 (iv) of GIT as under:-
"(iv) "Goods" means the articles, material, commodities, livestock, furniture, fixtures, raw material, spares, instruments, machinery, equipment, medical 4 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS equipment, industrial plant etc. which the supplier is required to supply to the purchaser under the contract."
The expression "Turnkey" has its own bearing in the present matter. Apart from the aforesaid General Instructions (GIT), the tender documents also provided for special and additional conditions of contract, wherein the meaning and purport of the expression "Turnkey" was specified as under:-
"Turnkey:
1. RCC Building as per CPWD specifications in the allocated area, as per Plan diagram shall have to be constructed with earth cutting, foundation works, complete RCC works, complete doors and Windows, grill works, flooring, parapet walls, chajjas, internal and exterior painting with certified plastic paints, with complete finishing as required by Engineer In charge with Electrical, Carpentry and plumbing works for keeping the gas cylinders, manifold room, foundation, fencing, etc. (To be constructed by the Vendor/bidder).
2. Making holes in the slab, walls, Removing false ceiling & placing back, if any, etc. will be the responsibility of the vendor and the same will be made good by him. Related malba will be removed by the contractor and will be disposed in the dumping yard as decided by the Engineer In-charge.
3. Other related electric work, if any, for making the manifold functional will be executed by the vendor.
4. All civil/electrical work will be carried out as per CPWD specifications."
As indicated at the outset, the claim of the petitioner/appellant for EMD exemption was declined by the respondents on the ground that its NSIC certificate was not covering BOQ items No. 5.3, 14 and 15. A perusal of the description of BOQ items in the tender documents makes out that the work being of Medical Gas Pipeline, Modular Operation Theatre, Maintenance of Medical Gas System and the connected matters, the description was divided in 15 segments. At Serial Number 1 to 4, the stores/items related with Oxygen System, Carbon Dioxide System and Compressed Air Supply System were described. The BOQ item No.5 related to Vacuum (Suction) Supply System and one of the reasons for rejection of the appellant‟s claim for EMD exemption had been want of the 5 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS equipments mentioned at item number 5.3 of BOQ. For its relevance, entire of BOQ item number 5 could be taken note of as under:-
"5. Vacuum (Suction) Supply System Supply, Installation, testing & commissioning it shall be medical vacuum system complete package unit as per NFPA99/BSEN standards. The vacuum pump station should be stalk mounted with 4 identical pumps of approx 150 cfm capacity each 5.1 (Total capacity of the complete system should be minimum 600cfm) oil sealed rotary vein air cooled vacuum pumps with online starter and pump Complete protection filters and having motor, complete with unit base plate, belt guards, V-belts, motor and starter, ball valves, silencers, copper piping, interconnection, common vertical receiver of suitable capacity and other required accessories and fitting etc complete in all respect as per NFPA99 standard/ EN standards. The system should complete as required with all accessories as per technical specification.
5.2 Supply, Installation, testing & commissioning of Bacteria filter for the above vacuum system Complete complete with all accessories etc. as required unit according to technical specification.
5.3 Supply, Installation, testing & commissioning of Complete Electrical Control Panel for the vacuum system unit complete with single phase preventers, starters, controls, voltmeter, ammeters, gauges, hour meter, fuses, switchgears, MCCB and main switch etc. The system should be complete as required with all accessories as per technical specification."
Thereafter, at Serial Numbers 6 to 13, different items relating to Area Control Unit, Terminal Outlets, Modular Bed Head Panels etc. etc., were stated, which are not relevant for the present purpose. However, items No.14 and 15 have also formed the basis of rejection of the petitioner‟s claim of EMD exemption, which had been of „Operation and Maintenance of Medical Gas System‟ and of „Complete Civil Works and Other Accessories‟ respectively and read as under:-
Operation and maintenance of Medical Gas system at NEIGRIHMS The man power cost towards engagement of the 14 professionals should quoted/offered in the price Lumpsum bid on lumpsum basis for ten years of operation and the same shall be taken for the propose of tender/price Evaluation. The bills towards 6 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS engagement of manpower shall be claimed by the bidder with the requisite supporting documents on half yearly basis.
15 Complete Civil works and other accessories Lumpsum required for the MGPS project All Gas outlets/Suction Outlets/Adopters must be covered under warranty/CMC for the period of next 10 years."
The appellant‟s claim for EMD exemption was based on the NSIC Government Purchase Enlistment Certificate dated 24.09.2015, wherein the stores details were stated as under:-
"NSIC ISO 9001: 2008 THE NATIONAL SMALL INDUSTRIES CORPORATION LIMITED (A Government of India Enterprise) Sl. No. 44426 Branch Office: C-60&64, Flatted Factory Complex, Jhandewalan, New Dehli-
110055
Ph: 011-23515243 Fax: 011-47597201
Email: [email protected] Website: www.nsic.co.in STORE DETAILS (Valid from 24/09/2015 to 23/09/2017) ANNEXURE TO GOVERNMENT PURCHASES ENLISTMENT CERTIFICATE NO. NSIC/GP/JHA/2015/0016000 D.T. 24/09/2015 ISSUED TO M/s. Benson Medical Equipments (India) Pvt. Ltd., DELHI. Plot No. 495, Udyog Vihar, Phase-V, GURGAON, HARYANA-122016 Sl. Store(s)/ Specification(s) Qualitative Quantitative No. Service(s) Capacity Capacity Name P.M.P.S.
1. SITC of medical As per As per 10000 Nos.
gases and HTM/NFPA/ISO Hospitals
vaccum pipeline requirements
system on
turnkey basis
from source
equipments to
the gas
outlets/terminal
points including
oxygen flow
meters suction
units etc. wall
mount/ceiling
bed head units
and pendants
2. SITC of modular As per As per 2000 Nos.
operation HTM/NFPA/ISO Hospitals
theatres on requirements
turnkey basis
including its
walls, laminar
flow, surgeon
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WA No.40/2017
Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS control panel, electrical wiring, X-ray view screen, OT Light, OT table, OT pendants, false ceiling, lighting, flooring, sub-structure etc.
3. SITC of all types CE/UL/ISO As per 1000 Nos.
of medical Hospitals
equipments, requirements
consumable,
CSSD
Sd/-
Authorised Signatory
M/s. Benson Medical Equipments (India) Pvt. Ltd. "Authenticity of the certificate can be checked through the web portal:
www.nsicspronline.com"
The evaluation of techno-commercial bids in this matter was carried out by the tender committee of the respondents on 27.11.2015; and the appellant was held ineligible with the following evaluation and assessment:-
"Date:27/11/2015 Evaluation of Techno-Commercial Bid in respect of Centralised Medical Gas Manifold system with turnkey work and accessories for NEIGRIHMS, Shillong against Open Advertised E-tender No. NEIGR/S&P/0T-E-33/2015- 16 with closing on 14:00 hrs of 02/11/2015.
1. M/s Benson Medical Equipments (India) Pvt. Ltd, A-184, Meera Bagh, Paschim Vihar, New Delhi-110087 have offered stores against BOQ Sl. No. 1.1, 1.2, 1.3, 2.1, 2.2, 2.2, 3.1, 4.1, 5.1, 5.2, 6, 6.1 (a) (b) (c), 6.2 (a) (b) (c), 7.1, 7.2, 7.3, 8, 9, 10, 11, 12 and 13 ; which are indicated to be "imported"
with country of origin as "USA/Canada", with documentary evidence of manufacturer authorization certificate (Section XIV), as per bidding document issued by the respective manufacturers 1) Tri-Tech Medical inc; 35401 Avon Commerce Parkway, Avon OH44011 AND 2) Mueller Industries inc Suite 150, 8285 Tournament Drive Memphis, TN-38125.
2. Further, the Committee noted that bidder offered stores against BOQ Sl. 5.3 which are indicated to be "indigenous" with country of origin as "India". The store i.e. "Electrical Control panel for the vacuum system with single phase preventers, starters, controls, voltmeter, ammeters, gauges, hour meter, fuses, switchgears, MCCB and main switches etc" are not listed, in the enlisted stores details of the National Small Industries Corporation Limited (NSIC) enlistment certificate No. NSIC/GP/JHA/2015/0016000 dated:
24/09/2015, issued to M/s Benson Medical Equipments (India) Pvt. Ltd, Delhi.
3. The Committee also noted that offered stores against BOQ Sl. No. 14 and Sl. No. 15 are not listed in the "Stores details" of the NSIC Government Purchase enlistment certificate. It may also be mentioned here that BOQ 8 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS item Sl. No. 15, which indicates "complete civil works and other accessories with the project" ; is not indicated under Public Procurement Policy for Micro and Small Enterprises (MSEs) Order,2012.
4. The Committee noted that Stores at para 2 above, not being listed in the "Stores details" of the NSIC Government Purchase enlistment certificate; would render the bidder as "In-eligible" to avail various facilities extended to the SSI units, under Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012.
5. The Earnest Money Deposit for the respective tender being called on the lump sum basis, with estimated values of all the individual stores/BOQ items and in view of reasons indicated in the above paras, the offer of M/s Benson Medical Equipments (India) Pvt. Ltd, A-184, Meera Bagh, Paschim Vihar, New Delhi-110087, is not considered eligible. The aforesaid decision was uploaded on the website by the respondents on 31.05.2016 in the form of Tender Summary Report. Aggrieved by the decision so taken by the Tender Committee of the respondents, the appellant got served a lawyer‟s notice dated 16.06.2016 seeking admission of its bid for further consideration while maintaining its entitlement of exemption from EMD. The notice so sent on behalf of the appellant was replied by the respondents through their lawyer on 02.07.2016, essentially with the repeated assertion that the appellant‟s bid was rightly considered ineligible because BOQ item Nos. 14 and 15 were not included in the NSIC Certificate. The relevant contents of the reply dated 02.07.2016, as sent on behalf of the respondents could be noticed as under:-
"7. It is clear and transparent that NSIC Certificate No. NSIC/GP/JHA/2015/0016000 dated:24.09.2015, in the items under store(s)/Service(s) does not include 14) Provision of Manpower and engagement of professionals for a period of 10 years and cost thereof 15) Civil Works as per CPWD norms including building and associated works. These are included in the Schedule of Stores and Services listed from Sl. 1 to Sl.15 of the bidding/tender documents, for IFB no: NEIGR/S&P/OT/E- 33/2015-16, dated 24/08/2015. Therefore, the above not being mentioned in the store details of the NSIC Certificate No. NSIC/GP/JHA/2015/0016000 dated 24.09.2015 would render your client M/s Benson Medical Equipments India (Pvt.) ltd, Delhi, bid as "in-eligible" for availing the benefits, including exemption from the payment of EMD, in the instant case.
8. The Institute uploaded the final commercial report in the form of Tender Summary Report after proper verification of fact/documents on 31st May 2016. The Commercial evaluation report of the tender Committee held on 27/11/2015, forms a part of this Tender Summary Report, which was uploaded on 31/5/2016, for perusal of all concerned and ensuring optimum transparency.9 WA No.40/2017
Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS The Tender Summary Report, with details in Annexure "A", detailed with the reasoning in Para:3 and Para:4, which reflects that NSIC Certificate No NSIC/GP/JHA/2015/0016000 dated:24.09.2015, in the items under store(s)/Service(s) does not include 14) Provision of Manpower and engagement of professionals for a period of 10 years and cost thereof 15) Civil Works as per CPWD norms including building and associated works. These are included in the Schedule of Stores and Services listed from Sl.1 to Sl.15 of the bidding/tender documents, for IFB no: NEIGR/S&P/OT/E- 33/2015-16, dated 24/08/2015.
It is therefore, in total harmony with regard to the applicable law and there are no malafide action on the part of the Institute. The objective of the Institute to process through e-procurement mode is to have the responsibility and accountability to bring economy and transparency in this procurement process. It was ensured to have fair, transparent, reasonable procedure to ensure procurement at reasonable cost with consistent quality, to attain the objective of public procurement.
9. The Institute before finalisation and uploading of the final commercial report in the form of Tender Summary Report (finalised/uploaded on 31/5/2016) had communicated with the Nodal Ministry/Office of Development Commissioner, Ministry of Micro, Small, Medium Enterprise, Government of India in respect of the Public Procurement Policy for MSEs of for verification and clarification vide communication Reference No. NEIGR/S&P/38/2015 dated: 13.01.2015. The respective authority had mentioned that the public procurement policy is applicable only to central ministries/departments/PSU and not to the autonomous bodies of the Central Government.
10. The Tender Summary Report further lays out as per Annexure "A"
para‟s 3 and 4, that "The Committee also noted that the offered stores against BOQ Sl. No.14 and Sl. No.15 are not listed in the Stores details of the NSIC Government Purchase enlistment certificate. It may also be mentioned here that BOQ Item Sl.No.15, which indicate complete civil works and other accessories with the project; is not indicated under Public Procurement Policy for Micro and Small Enterprises (MSEs) Order 2012." Further, "The Committee noted that Stores at para 2 above, not being listed in the Stores details of the NSIC Government Purchase enlistment Certificate; would render the bidder as in-eligible to available various facilities extended to the SSI units under Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012".
In view of reasons stated in Annexure "A" of the Tender Summary Report (Finalised/Uploaded on procurement portal on 31/5/2016) and clarification of NSIC with regard to "eligibility for the benefits as stated in the notification for the items mentioned in the store details of NSIC Certificate No. NSIC/GP/JHA/2015/0016000 dated:24/09/2015", the bid of M/s Benson Medical Equipments India (Pvt.) ltd, Delhi is considered non-responsive.
11. In respect of your communication received at our end (i.e. on 17/6/2016) more than a fortnight after the finalisation/uploading and communication to your Client, in respect of the Tender Summary Report of the Commercial evaluation; is examinable. The Institute had already proceeded ahead, in further processing of tender in due course of time, with the consent of the competent authority.
12. Further, as all actions has been taken by the officers of the Institute in their official capacity it entails no personal liability and as such in discharge of their official functions, you are requested to refrain from issuing any empty threats in this regard and further put to notice that the Institute 10 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS reserves its right to initiate appropriate legal action against your client in this regard."
SUBMISSIONS BEFORE THE SINGLE JUDGE AND THE ORDER IMPUGNED Being aggrieved by the decision of the respondents, the petitioner/appellant preferred the writ petition leading to this appeal. It was submitted on behalf of the appellant before the learned Single Judge that the respondents sent an email to NSIC on 24.11.2015 in a rather questionable manner while seeking clarification as to whether the appellant was eligible for exemption from payment of EMD in the light of its NSIC Certificate and the Public Procurement Policy for Micro and Small Enterprises („MSE‟) Order, 2012, as notified by the Government of India. According to the appellant, such a communication by the respondents was uncalled for but then, even in response thereof, the NSIC sent a reply email dated 30.11.2015, clarifying that as per the Policy, all registered MSE units supplying goods and services were, inter alia, eligible for the benefit of exemption from payment of earnest money as mentioned in Clause 10 of the said policy; and that the appellant was a Micro, Small and Medium Enterprises (MSME) unit, validly registered under the service category and was eligible for the benefits stated in the policy, including exemption from the payment of EMD. It was also contended before the learned Single Judge on behalf of the petitioner/appellant that it was nowhere mentioned in the Tender document that in order to claim exemption from payment of EMD amount of Rs. 30 lakhs, the ancillary BOQ items No. 14 and 15 were to be mentioned along with the main items in the NSIC certificate. It was argued that the action of the respondents in rejecting the bid of the appellant was in complete disregard of the law applicable that tender conditions could not be altered selectively to exclude or benefit one or 11 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS some of the tenderers. It was also contended that the respondents had disregarded the advice of the NSIC that the appellant was eligible for the benefits stated in the Policy of 2012. It was further contended that the decision making process in the present case stood vitiated by malafide and for consideration of irrelevant factors.
The respondents contested the writ petition, inter alia, with the submissions that in response to the open tender, six bidders participated; and the tender committee observed that bid of one of the tenderers M/s Atlas Copco India Ltd., Pune was commercially non-responsive due to non-submission of tender fee of Rs. 1000/- and EMD of Rs. 30 lakhs within the stipulated time. It was further submitted that the appellant sought exemption from EMD by submitting NSIC enlistment certificate dated 24.09.2015 but the committee found that the appellant was ineligible to avail the facilities extended to Micro, Small & Medium Enterprises as the NSIC Certificate of the appellant under stores/services did not include the indigenous stores against BOQ item No. 5.3; provision of manpower and engagement of professionals for a period of 10 years against BOQ item No. 14; and Civil Works as per CPWD norms including building associated works against BOQ item No. 15.
It was also submitted on behalf of the respondents that under the Government of India Notification dated 16.01.2009 and Office Memorandum dated 05.02.2009, in case of change of products and that of services or addition in products or services, the enterprises who had already filed Entrepreneurs Memorandum were required to inform DIC of the same in writing within three months of the change. According to the respondents, the acknowledgement of Entrepreneur Memorandum Part-II No. 060182103515, dated 17.08.2015 as digitally signed by the Joint 12 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS Director, DIC, Gurgaon, Haryana and certified by the Director of the appellant company only included Operation and Examination Tables, Adjustable Beds-Hospital, Hospital furniture and Steel Tables in the items of the manufacturer/types of services rendered by the appellant. Thus, the respondents urged that Entrepreneur Memorandum Part-II of the appellant did not cover all the items of work as per BOQ description covered by the subject tender; and there were no additional documents in the appellant‟s Memorandum Part-II to show that all the specified goods as per the Tender Enquiry specifications were included in the items of the manufacturer/type of service to be rendered by the appellant. The respondents also relied upon the Division Bench decision of the Delhi High Court in the case of M/s Opaque Infrastructure Pvt. Ltd. (supra). The learned Single Judge took note of the aforesaid tender conditions, BOQ descriptions, contents of NSIC certificate in question and the decision in M/s Opaque Infrastructure Pvt. Ltd. (supra) and then, proceeded to reject the contentions of the petitioner/appellant while observing as under:-
"26. The NSIC Enlistment Certificate dated 24th September, 2015 of the petitioner clearly reveals that it does not include provisions of manpower and engagement of professionals for a period of 10 years and cost of civil works as per CPWD norms including building and associated works, as per the tender enquiry. According to the respondents, these not being mentioned in the store details of the NSIC certificate, rendered the petitioner ineligible for availing the benefits including exemption from payment of EMD.
27. A perusal of the tender condition quoted hereinabove clearly stipulates that the tenderers who were registered for the specified goods as per tender enquiry specification shall be eligible for exemption from EMD. Thus, the tender document itself stipulated that the NSIC certificate must cover the items/specifications tendered.
28. The tender being multiple item composite tender comprises of different, schedule of stores and services listed from Sl. No. 1 to 15 as per the Bill of Quantities and price bids cost of all individual schedules in totality shall be taken for the purpose of price evaluation. The petitioner not being enlisted for three of the Schedule of Stores and Services listed from Sl. No. 1 to 15 as per the Bill of Quantities in the NSIC enlistment certificate, was not eligible to seek exemption from submission of EMD. The petitioner‟s NSIC 13 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS Enlistment Certificate does not list the stores/services included in the tender enquiry specifications like provision of Manpower and engagement of professionals for a period of 10 years and cost of civil works as per CPWD norms including building and associated works, as per the tender enquiry specification. The Committee which evaluated the bids also noted that the stores i.e. electrical control panel for the vacuum system with single phase preventers, starters, controls, voltmeter, ammeters, gauges, hour meter, fuses, switchgears, MCCD and main switches etc., which are important stores/services and part of the tendered specifications, were not listed in the enlisted stores details of the NSIC Certificate issued to the petitioner.
29. Division Bench of Delhi High Court in M/S Opaque Infrastructure Pvt Ltd vs Union of India & Anr.‟s case (supra) considered an identical issue. It was held as under:
"20. The petitioner submitted the bid being aware of the tender conditions and as such the petitioner should have ensured that if the petitioner was claiming exemption from payment of Earnest Money Deposit then the certificate submitted by it should conform to the tender conditions. The petitioner, having not submitted either the Earnest Money Deposit or a valid certificate qualifying for an exemption, cannot be permitted raised to a grievance of rejection of the bid.
21. There is no merit in the contention of the counsel for the petitioner that the respondents could not have qualified the NSIC certificate by making it restricted to the items covered by the tender and NSIC certificate should have been treated as valid for all items. The tender document itself stipulated that the certificate must cover the items tendered. The petitioner, being aware of the said tender conditions participated in the tender and having participated in the tender, cannot challenge or impugn the tender condition. The petitioner having participated in the tender process can only expect equality and fair treatment in the matter of evaluation of competitive bids. The petitioner cannot be permitted to challenge the terms and conditions of the tender after he had participated in the same.
22. Since the petitioner neither submitted the EMD nor a valid certificate as required by the tender conditions, the bid of the petitioner was clearly non-responsive. The respondent No. 2, in our view, has rightly rejected the technical bid of the petitioner."
30. Having considered the facts and circumstances of the case and Judgment in the case of „M/S Opaque Infrastructure Pvt Ltd' (supra), I do not find any merit in the petition. The same deserves to be dismissed and the same is accordingly dismissed."
Questioning the order aforesaid, learned counsel for the appellant has vehemently argued that the learned Single Judge has dismissed the writ petition on entirely irrelevant considerations while overlooking the relevant factual aspects of the present case. Learned counsel would argue that the certificate issued by the NSIC in favour of the appellant was a comprehensive one, covering all the specified goods required to be 14 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS supplied in relation to the work in question and hence, the appellant could not have been held ineligible to seek exemption from EMD. In regard to the suggestion by the respondents about want of availability of goods specified in BOQ item number 5.3, learned counsel for the appellant would submit that such an item formed part of the principal item number 5 i.e., "Vacuum Supply System"; and when Supply, Installation, Testing and Commissioning of Vacuum Supply System itself has been certified by NSIC, there arise no question of any doubt on the capability of the appellant to supply each and every item/component/ingredient of the Vacuum Supply System. Learned counsel has also argued that the contentions on the part of the respondents are rather of supplying the reason other than that formed the basis of decision against the appellant; and NEIGRIHMS, being the agency and instrumentality of the Government, is not entitled to supply any reason other than that contained in the evaluation report dated 27.11.2015.
Learned counsel has particularly referred to the scope of work; the meaning of expression "turnkey" and the qualification criteria as stated in the tender documents and has argued that when the NSIC certificate in favour of the appellant covered all the specified items and the capacity of the appellant to execute the work on turnkey basis, the appellant could not have been held ineligible to seek exemption from EMD. Learned counsel for the appellant has referred to and relied upon the decisions of the Hon‟ble Supreme Court in Tata Cellular v. Union of India: (1994) 6 SCC 651; and Mohinder Singh Gill and another v. Chief Election Commissioner, New Delhi and others: AIR 1978 SC 851 and of this Court in Agnes Kharshiing v. Union of India and 15 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS Others (2017) 1 GLT 609; and Power Carrier (India) Private Limited v. GM Lanong and Another: (2017) 1 GLT 612.
Per contra, learned counsel for the respondents has particularly referred to paragraphs 70 and 71 of the decision in Tata Cellular (Supra) and has argued that the right to refuse the tender being available with the respondents and there being nothing of arbitrariness or unreasonableness on their part, no case for interference is made out. Learned counsel has further referred to the pleadings of the parties and has particularly argued that the acknowledgement of the Entrepreneur Memorandum Part-II did not include all the specified goods as per the tender specifications and hence, the same cannot be taken as included in the certificate relied upon by the appellant. The learned counsel has also referred to the submissions in the rejoinder affidavit where the petitioner/appellant stated that the other items were not stated in the Entrepreneur Memorandum Part-II only due to lack of space or columns for indicating the items. Such an explanation, according to the learned counsel, being entirely baseless, the items in question cannot be considered included in the appellant‟s certificate and hence, the appellant remains ineligible. Learned counsel has also argued that even if two views are possible in the matter and one of them is taken by the respondents without any otherwise intent, no case for interference in the writ jurisdiction is made out. Learned counsel for the respondents has further argued that the petition is inordinately delayed and looking to the nature of project, such delay itself is fatal to the case of the appellant. It may be pointed out that, looking to the contentions on behalf of the respondents as regards want of specified goods in Entrepreneur Memorandum Part-II, we had queried learned counsel for the appellant if 16 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS he could place for perusal a copy of the application said to have been made by the appellant to the NSIC for obtaining the certificate in question but the learned counsel submitted that such a copy was not retained by the appellant and he was unable to produce the same for perusal. We have given anxious consideration to the submissions made and have perused the material placed on record.
APPLICABLE LEGAL PRINCIPLES It is more than settled that when an action relating to the matter of contract is questioned in the Constitutional Court, the power of judicial review is exercised only to examine if the process does not suffer from illegality or irrationality (Wednesbury unreasonableness) and procedural impropriety. Such a State action, relating to the award of contract, has to be fair, reasonable, non-discriminatory, transparent, non-capricious, unbiased without favouritism and has to be in pursuit of promotion of healthy competition and equitable treatment. These principles, as per the settled decisions, are inherent in the very conception of Article 14 of the Constitution of India. The scope of judicial review in such matters has been summed up in Tata Cellular (Supra) in the following:
"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".
The principles of Wednesbury reasonableness, emanating from the decision in Associated Provincial Picture Houses Ltd. v. Wednesbury 17 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS Corporation: (1947) 2 ALL ER 680, as referred the Hon‟ble Supreme Court may also be noticed as under:-
"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."
In the case of Agnes Kharshiing (supra), the Social Welfare Department of the Government of Meghalaya had issued a notice inviting tenders „for supply of Ready to Eat Micronutrient Fortified Energy Dense Food Suitable for Children (0-6 Years), Pregnant and Nursing Mothers to Different ICDS Projects in the State‟. However, several shortcomings in the said NIT was found, giving rise to the questions on the fairness, unreasonableness and transparency of the process. It was, inter alia, found that the NIT was lacking in material particulars on (a) total value of the work; (b) the items to be supplied; and (c) the project/s for which the supplies were to be made. It was also found that the contract was likely to be of high valuation but e-procurement process was not resorted to. It was also not clear as to why only the persons having experience of supply of food products under the Supplementary Nutrition Programme under the ICDS in the North Eastern States were allowed to offer their bids; and participation was not open to all the eligible persons. On the questions being raised in the matter, the State Government realised the basic flaws in the tender process and before adjudication by the Court, took a decision to withdraw the NIT and also tendered apology to the public at large.
In the circumstances of the case, this Court disposed of the said matter but while imposing nominal cost on the State for having taken up 18 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS the process in a questionable manner giving rise to serious questions of unreasonableness and irrationality. As regards the matter of intent, this Court indicated that on the facts and the surrounding factors, even constructive malice could be inferred. This Court, inter alia, referred to several decisions of the Hon‟ble Supreme Court including that in Tata Cellular (supra) and observed as under:
"While we appreciate that after our making serious observations, the authorities concerned have seen the reasons and have not only taken the decision to cancel the tender process, but specific apology has been made to the public on behalf of the Government. However, it has been stated in the affidavit that omissions were not intentional, willful or deliberate. In this regard, we are impelled to observe that when a tender process is questioned in the Court, the power of judicial review is exercised by the Court only in respect of the decision making process; and the process is examined essentially on the touchstones of reasonableness, rationality, want of arbitrariness and, of course, public interest, as observed by the Hon‟ble Supreme Court in Sterling Computers Limited: (1993) 1 SCC 445, Tata Cellular: (1994) 6 SCC 651 and Jagdish Mandal: (2007) 14 SCC 517. Further, as observed by the Hon‟ble Supreme Court in Special Reference No.1 of 2012: (2012) 10 SCC 1, the State action, to escape the wrath of Article 14 of the Constitution, has to be fair, reasonable, transparent, non-capricious and unbiased; and has to be in pursuit of promotion of healthy competition and equitable treatment. In order to examine if the particular process answers to all the aforesaid fundamental requirements or not, the facts and surrounding factors are examined by the Court; and when such faults and shortcomings are found as indicated in this order hereinbefore, the intentions become questionable; and constructive malice could always be inferred."
IRRATIONALITY AND UNREASONABLENESS IN THE IMPUGNED ACTION Having examined the instant matter in its totality with reference to the principles aforesaid, we are clearly of the view that the impugned action suffers from such irrationality and unreasonableness that the same cannot be endorsed; and in the circumstances of the case, it appears just and proper that the decision taken by the respondents qua the appellant be revisited by them.
The suggestion on behalf of the respondents about the alleged delay in filing the petition has only been noted to be rejected. It is apparent on the face of the record that even after the evaluation dated 27.11.2015, the report was uploaded by the respondents only on 31.05.2016. The 19 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS petitioner/appellant got served notice through lawyer on 16.06.2016 and the respondents sent its reply through their lawyer on 02.07.2016. The petitioner/appellant has pointed out in the petition that thereafter, the Ministry of Health and Family Welfare, New Delhi was approached, who expressed inability to intervene and thereafter, the writ petition was filed on 26.09.2016. In the totality of circumstances of the case, it cannot be said that the petition suffered from any such delay or laches that the case of the appellant be not considered on merits.
As regards merits of the case, the first and foremost reason, wherefor we find the action of the respondents to be wholly unreasonable is that BOQ items No. 14 and 15 were at all referred to and relied upon by them to find faults or shortcomings in the NSIC certificate possessed by the appellant without examining the relevant stipulations in the tender documents. As noticed, as per GIT Clause 19.2, exemption from earnest money deposit was available to the tenderers, who would continue to remain registered during the tender validity period with the Directorate General of Supply and Disposal or with NSIC for the "specific goods" as per tender enquiry specification. The expression "Goods" had been defined in Sub-clause (iv) of Clause 1.2 of GIT to mean articles, material, commodities, livestock, furniture, fixtures, raw materials, spares, instruments, machinery, equipment, medical equipment, industrial plant etc., which a supplier would be required to supply to the purchaser under the contract. Such specific goods were otherwise indicated in BOQ items No. 1 to 13, viz., Oxygen system; Carbon dioxide System; Compressed Air System; Vacuum (Suction) Supply System; Area Control Unit; Terminal Outlets etc. etc.; and several equipments/articles were mentioned in the description relating to such items. 20 WA No.40/2017
Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS However, BOQ item No. 14 had been of manpower costs towards engagement of professionals for a period of 10 years. It sounds rather intriguing that the said item No. 14 of BOQ was at all referred by the tender committee of the respondents as being one of the items wanting in the NSIC certificate. As noticed, the expression „Goods‟ had distinctly been defined in Sub-clause (iv) of Clause 1.2 GIT to mean the articles, materials, commodities etc. and it is difficult to appreciate that manpower costs towards engagement of professionals for maintenance and operation were at all conceived by any authority to be included in the term "goods" for the purpose of NSIC certificate. Obviously, the reference to BOQ item No. 14 had been a matter of irrationality and unreasonableness. Not only that such an unconceivable proposition was stated in a rather obscure manner in the evaluation note dated 27.11.2015, but even in reply to the notice, such a proposition was reiterated and emphasized by the respondents and the same stand has been taken before this Court too. When the decision making by the respondents has taken its shape from such an unreasonableness with reference to BOQ item No. 14, we are clearly of the view that the entire decision is vitiated and needs to be revisited.
Similarly, item No. 15 of BOQ was not of supply of any specified goods but was of complete „civil works‟ and other accessories required.
"Civil work" had not been defined in the GIT but in a comprehension of the project, it could only mean all such works which are required to be carried out for installation and operation of the medical gas system. Such works are found mentioned in the definition of „turnkey‟ as occurring in the tender condition of contract i.e., RCC buildings as per CPWD 21 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS specifications, complete RCC works - doors, windows, making holes in the slab, walls, removing and replacing wall/ceilings etc. etc. In the context of the tender in question, co-relating the civil work with „goods‟ for the purpose of Clause 19.2 ibid. again gives rise to the questions of rationality and reasonableness. It appears that looking to the nature of the tender enquiry, where supply of specified goods and the civil works and even providing of manpower for 10 years were clubbed together, the appellant took care to obtain the certificate from NSIC in comprehensive terms, which stated the stores/services as "SITC of medical gases and vacuum pipeline system on turnkey basis" and "SITC of modular operation theatres on turnkey basis". The expression SITC referred to the wholesome task/service of supplying, installing, testing and commissioning on turnkey basis, as defined by the respondents themselves. Obviously, these crucial expressions and stipulations in the certificate have been ignored by the respondents.
For what has been discussed hereinabove, we are clearly of the view that before finding shortcomings in the NSIC certificate in question with reference to BOQ items No. 14 and 15, the respondents have not examined the relevant details and have not considered as to how the components of such items could be referred to the description of "specific goods" for the purpose of EMD exemption under Clause 19.2 of the GIT?
Coming now to the question of BOQ item No. 5.3, in our view, even in regard to this item, the approach of the respondents had been rather unsure, ambiguous and obscure. As noticed, the tender committee in paragraph 3 of its Evaluation Report dated 27.11.2015 essentially relied upon BOQ item Nos. 14 and 15 to treat the petitioner ineligible.
Thereafter, in paragraph 4, the Committee made a cursory noting that the 22 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS stores as referred in BOQ Sl. No. 5.3 were not listed in "stores detail of NSIC certificate". Interestingly, only a cursory reference was made to this item in paragraph 10 of the reply dated 02.07.2016. Though the respondents have alleged that the appellant‟s Entrepreneur Memorandum Part-II did not contain all the specified goods and the appellant has also not placed on record a copy of its application seeking NSIC certificate in question but in any case, as noticed above, the appellant‟s NSIC certificate in comprehensive terms stated "SITC of medical gases and vacuum pipeline system on turnkey basis" and "SITC of modular operation theatres on turnkey basis". In our view, the respondents were obliged to examine as to whether such comprehensive descriptions in the certificate were not covering whole of the items specified in BOQ Sl. No. 5 i.e., of vacuum (suction) supply system.
The discussion aforesaid leads to the result that the respondents have not examined the case of the appellant in its correct perspective and the rejection of the petitioner‟s claim for exemption from EMD needs to be revisited. The learned Single Judge has rejected the case of the appellant only with reference to the decision in Opaque Infrastructure (Supra) but in our view, the said decision has no application to the facts of the present case because therein, the certificate of the tenderer was not carrying even the very basic goods that were supposed to be supplied for High Mast Signage, whereas in the present case, the nature of work is entirely different and the tender requirements are also entirely different.
We may, however, hasten to observe that we do not propose to directly hold the petitioner eligible but, having regard to the circumstances, consider it proper that in this matter of contract, the respondents themselves should re-examine the certificate submitted by 23 WA No.40/2017 Benson Medical Equipments (India) Pvt. Ltd. v. NEIGRIHMS the petitioner with reference to the stipulations in the tender documents and then should take a considered decision by way of a speaking order.
In the interest of justice, it is of course provided that for the purpose of taking such a decision, the respondents shall take the certificate issued by the NSIC in favour of the appellant as subsisting and the decision would be taken with regard to the position as was obtaining on 27.11.2015.
CONCLUSION With the observations and requirements aforesaid, this appeal is allowed to the extent indicated; the impugned order dated 07.07.2017 as passed in WP(C) No. 294 of 2016 is set aside and the respondents are directed to revisit the decision in relation to the claim of the appellant for exemption from Earnest Money Deposit and then, proceed with the matter in accordance with law.
No costs.
JUDGE CHIEF JUSTICE Lam/Sylvana