Gujarat High Court
Ve Commercial Vehicles Ltd. vs State Of Gujarat on 4 May, 2021
Author: R.M.Chhaya
Bench: R.M.Chhaya, R.P.Dholaria
C/SCA/13411/2020 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13411 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
In
R/SPECIAL CIVIL APPLICATION NO. 13411 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE R.M.CHHAYA sd/
and
HONOURABLE MR. JUSTICE R.P.DHOLARIA sd/
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1 Whether Reporters of Local Papers may be allowed to see NO
the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law as NO
to the interpretation of the Constitution of India or any
order made thereunder ?
=============================================
VE COMMERCIAL VEHICLES LTD.
Versus
STATE OF GUJARAT & 1 other(s)
=============================================
Appearance:
Mr. R.S. Sanjanwala, Senior Advocate with Ms. Garima Malhotra with Mr.
Maharshi Patel with MS SHIRALI M PATEL(11069) for the Petitioner(s) No. 1
MR HS MUNSHAW(495) for the Respondent(s) No. 2
Mr. Tirthraj Pandya, AGP for the Respondent(s) No. 1
=============================================
CORAM: HONOURABLE MR. JUSTICE R.M.CHHAYA
and
HONOURABLE MR. JUSTICE R.P.DHOLARIA
Date : 04/05/2021
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE R.M.CHHAYA)
1. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for following reliefs:
"a. Your Lordship may be pleased to issue an order / directions/ writ of certiorari or writ of similar nature quashing the Tender Page 1 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT bearing no.GEM/2020/B/788564 dated 11th September 2020 floated by the Respondent no,.2;
b. Your Lordship may be pleased to issue an order / directions/ writ of mandamus directing the Respondent no.2 to modify the technical specifications of the Tender bearing no. GEM/2020/B/788564 dated 11th September 2020 to the extent that Petitioner can participate in the tender process; c. In the alternative, Your Lordship may be pleased to issue an order / direction / writ of mandamus directing the Respondent no.2 to float a fresh tender in terms of the technical specifications laid down in Tender bearing no.
th GEM/2020/B/712747 dated 17 July 2020;
d. Pending, admission and final hearing of this petition, this Hon'ble Court may be pleased to pass a direction restraining the Respondent no.2 from proceeding any further and / or taking any action/ decision with respect to Tender bearing No. GEM/2020/B/788564 dated 11th September 2020:
2. The following facts emerge from the record of the petition. 2.1. That the respondent no.2 i.e. Gujarat State Transport Corporation made a proposal before the Port and Transport Department of the State of Gujarat for purchase of 1000 Bus chassis of 10 mtrs length on 13.07.2020 at estimated cost of Rs.261 crores which includes component of chassis as well as body building cost with labour and GST. The Ports and Transport Department of State of Gujarat sanctioned said proposal sent by the ST Corporation by a communication dated 16.7.2020. The respondent no.2 floated Tender under Number GEM/2020/B712747 on 17.7.2020 for Automotive Chassis for State Road Transport Vehicles (1000 buses ). The said tender bid document provided as under:
Bid Document Bid Details Page 2 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT Bid End Date /Time 04/08/20 12:00 AM Bid Opening Date / Time 04/08/20 Bid Life Cycle (From Publish Date) 90 (Days) Bid offer Validity (From End Date) 65 (Days) Ministry / State Name Gujarat Department Name Ports And Transport Department Gujarat Organization Name Gujarat State Road Transport Corporation Office Name Central Office Total Quantity 1000 Item Category Automotive Chassis for State Road Transport Vehicles Bidder Turnover (last 3 years) 8800 Lakh (s) OEM Average Turnover (Last 3 years) 17600 Lakh (s) MSE Exemption for years of No Experience and Turnover Startup Exemption for years of No Experience and Turnover Document required for seller Past Performance Certificate (Requested in ATC) OEM Annual Turnover In case any bidder is seeking exemption from Experience/ Turnover Criteria, the supporting documents to prove his eligibility for exemption must be uploaded for evaluation by the buyer Past Performance 10.00% Bid to RA enabled Yes Inspection Required No Estimated Bid Value 1760000000 EMD Detail Advisory Bank State Bank of India EMD Percentage (%) 0.5 EMD Account 8800000 ePBG Detail Advisory Bank State Bank of India Page 3 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT ePBG percentage (%) 10 Duration of ePBG required (Months) 24 The facts further reveal that date of submission which was originally of 4.8.2020 was extended to 11.08.2020, 21.08.2020, 31.08.2020 and lastly on 09.09.2020. The Technical Specifications as per the said tender prescribed that tender is only meant for Chassis Manufacturer and the same should comply with BSVI Emission norms and number of cylinders 4/6. It also inter alia prescribed that it should be Engine Exhaust System which combination of Exhaust Gas Recirculation and Selective Catalytic Reduction. As a matter of fact, the said tender provided that splitting of the order shall not be allowed. A prebid meeting was convened by the respondent no.2 and the petitioner was also informed by Email on 27.07.2020 and said prebid meeting was held on 29.07.2020 wherein three bidders, including the petitioner, TATA Motors Ltd and M/s. Ashok Leyland Ltd participated. The record indicates that all three proposed bidders raised certain queries and objections. The issues which were raised by the three proposed bidders including the petitioner in the meeting held on 29.07.2020 was placed by the respondent no.2 before the Technical Specification Committee consisting of 8 members in its meeting held on 13.08.2020. The Committee after deliberation recommended purchase of Bus Chassis with 10 mtrs length with 4/6 cylinders and accordingly the respondent no.2 gave reply to all three proposed bidders who attended the prebid meeting and had raised objection no bid was received till 8.9.2020. On 8.9.2020 respondent no.2 cancelled the first tender one day before the last Page 4 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT date of submission. The record indicates that again matter was placed before the Technical Specification Committee in its meeting held on 09.09.2020, wherein the Technical Specification Committee recommended to purchase only 6 Cylinder Bus Chassis.
That on 11.09.2020, respondent no.2 floated a fresh tender under number GM/2020/B/788564 and in the said tender specifications as per the recommendation of the Technical Specification Committee and reverse auction came to be disabled and splitting of order in the ratio of 80:20 came to be allowed and Engine Exhaust System was changed only SCR instead of combination of SCR and EGR and number of cylinders were changed from 4/6 to 6 only. By corrigendum dated 14.09.2020, it was further provided that offer for chassis with 6 Cylinder Engine with BSVI Emission norms will only be considered. The record indicates that as the respondent no.2 in the second tender provided Chassis with for 6 Cylinder Engine only, the petitioner made representations to the respondent no.1 and 2 as to how first tender was cancelled without any reason just two days before the submission on 11.09.2020, 16.09.2020, 17.09.2020, 22.09.2020 and 28.09.2020. It further reveals from the record that the technical bids of the tender were opened on 1.10.2020 where the bid of Ashok Leyland Ltd and TATA Motors Ltd were found to be eligible. The bids so received was forwarded to the High Level Purchase Committee which was held on 27.10.2020 and ultimately Committee recommended to place order of 800 Chassis with M/s. Ashok Leyland Ltd and 200 Chassis from Tata Motors Ltd on condition that Tata Motors Ltd agrees to match price of Ashok Leyland Ltd. As per the record, Tata Motors agreed to match price of Ashok Leyland on 10.11.2020 and the proposal Page 5 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT was sent to the State Government for its approval. The State Government gave its approval on 7.2.2021 and ultimately purchase orders were given to both the bidders on 8.2.2021. Being aggrieved by the decision of the respondent no.2 in canceling first tender, the petition came to be filed on 26.10.2020. It is predominantly alleged that first tender dated 17.07.2020 came to be cancelled in arbitrary, unreasonable, mala fide, arbitrary and discriminatory which has caused prejudice to the petitioner and according to the petitioner it has deprived the petitioner of its legal rights to participate in the tender process for its benefit. It is alleged by the petitioner second tender is in violation of principles of Article 14 of the Constitution of India and that be grave fairness in action by the State with non arbitrariness being the essence of providing a level playing field and such action is malicious and misuse of the statutory power by the respondent no.2 by altering the technical specification in such a manner that instead of the three Original Equipment Manufacturers only two can participate and thereby it has given undue advantage to Tata Motors Ltd and Ashok Leyland Limited. It is contended in the petition that second tender has been floated by the respondent no.2 without appreciating the relevant date and facts which causes prejudice to the economic welfare of the respondent no.1. It is contended by the petitioner that second tender does not provide a level playing field and out of three only two original equipment manufacturer can compete and participate in the tender process and petitioner is deliberately ousted from the tender process. It is contended that the petitioner was part of the prebid stage of the first tender and would have successfully met the requirements or specifications set out under the first tender. It Page 6 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT is also contended that change in the specifications in the second tender, could not be performed or met with by the petitioner on account of technical limitations. It is alleged that such action is violative of Article 14 of the Constitution of India and the same is evidently intended to favour TATA Motors Ltd and Ashok Leyland Ltd at the cost of the petitioner suffering huge losses. It is also contended that the modification in the technical specification is arbitrary, unreasonable and discriminatory in all possible aspects as the first tender particularly allowed chassis with 4 and 6 Cylinder Engines, however the corrigendum of 14.09.2020 without any reasonable cause only allowed parties that could offer the supply of chassis with 6 Cylinder Engines. It is contended that the respondent no.2 failed to provide any reason whatsoever to substantiate the alterations in the technical specifications and second tender as well as corrigendum issued on 14.09.2020 did not include in reasoning for floating a fresh tender and / or issuance of the corrigendum. It is also contended that though the petitioner raised objection to the modification and also pointed out lacuna in the modification, however respondent no.2 has conveniently chose not to deal with issue and did not venture a reply to the letters. It is also contended that respondent no.2 was liable to formulate the preconditions or qualification for tenders and has ensured that contractor has the capacity and the resources to successfully execute the work however in complete disregard with such principle, respondent no.2 framed the technical specifications only after considering the capacity and resources of TATA Motors Ltd and Ashok Leyland Ltd and not the petitioner. It is contended that respondent no.2 is responsible for misuse of its statutory powers and that the Page 7 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT respondent no.2 has clearly acted in malicious manner by first floating the first tender and working on the prebid stage with the petitioner and the petitioner was made to wait for two months to submit its bid and respondent no.2 ultimately chose to withdraw or cancel the tender at the very last minute and acted in a malicious manner. It is also submitted that second tender is against the public interest. It is further contended that the performance and durability of the engine mainly depends on the power and torque instead of the number of Cylinders. It is contended that there are numerous benefits of using BSVI 4 Cylinders Engine over BSVI 6 Cylinder engine. It is also contended that because of the action of the respondent no.2 in altering technical specifications in the second tender, the petitioner has suffered loss and striped off the petitioner of its rights to participate in the tender and even the letters which were written and even though the petitioner participated in the prebid meeting of the first tender, the same has led to irreparable damages to the petitioner including loss of revenue and loss of goodwill. On the aforesaid facts and grounds raised in the petition, the above mentioned prayers have been prayed for.
3. The ST Corporation has also filed an affidavit in reply dated 24.11.2020. It is contended by the ST Corporation that it is State Road Transport Corporation duly constituted under the Road Transport Act, 1950 and is under administrative control and supervision of the Government of Gujarat. It is submitted by ST Corporation that as per its policy in all 1239 buses with builtup of 10 meter long chassis are required to be scrapped and therefore, a Page 8 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT decision is taken to purchase 1000 Bus Chassis having length of 10 meter to replace the outgoing Buses to see that the inconvenience and hardship is not caused to the public at large. It is contended by ST Corporation that w.e.f 1.4.2020 emission norms came to be changed and accordingly respondent no.2 was required to purchase only the vehicle having BSVI emission norms. It is contended by the ST Corporation that Government of Gujarat has sanctioned an amount of Rs.387 crores for purchase of 1000 new bus chassis having length of 10 meters vide order dated 16.7.2020. The respondent has further stated that TATA Motors Ltd, Ashok Leyland Ltd and the petitioner are the manufacturers of Chassis having length of 10 meters as well as 12 meters and respondent no.2 has stated that prior to 201011 only two manufacturer of such Chassis were there. The respondent no.2 has also further contended that emission norms have been changed from time to time during the last 10 years from BS II to BS VI. The ST Corporation has further submitted that petitioner was manufacturing bus chassis having length of 10 meters till 201920 as per the emission norms with 6 Cylinders Engine and has now stopped manufacturing bus chassis having 6 Cylinders Engine on introduction of BSVI norms w.e.f 1.4.2020 and the petitioner is now manufacturing only 4 Cylinders Bus Chassis having length of 10 meters. It is also contended by the ST Corporation that during the last 10 years, the petitioner has either not participated in tender process and / or has quoted much higher price resulting into non acceptance of tender. The respondent no.2 has also relied upon the chart of the same. According to the respondent no.2, Transport Corporation has never purchased Bus Chassis having Page 9 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT length of 10 meters with 4 Cylinders Engine. It is also contended that in all 73 State Road Transport Corporations in the country bus chassis having length of 10 meters with 6 Cylinder Engines only have been purchased. The respondent no.2 has further submitted that only three manufacturer of bus chassis having 10 meters with BSVI emission norms are there in the country as under:
(1). M/s. Tata Motors Ltd.
(a). 6 Cylinder Cummins Engine (American Make)
(b). 4 Cylinder TML Make (India Make).
(2). M/s. Ashok Leyland Ltd.
6 Cylinder HSeris Make (Japan Make) (3). M/s. VE Commercial Ltd.
4 Cylinder VECE Engine (Germany Make).
3.1. Reiterating the tender process initiated by the respondent no.2, it is further contended by respondent no.2 that virtual prebid meeting was held on 29.07.2020 and the representatives of the petitioner as well as Tata Motors and Ashok Leyland were present and the General Manager (Administration), Financial Adviser, Chief Mechanical Engineer and Controller of Purchase were present in the said meeting. The respondent no.2 further contended that all the three manufacturers submitted their written submissions and also after discussion, the respondent no.2 further pointed out that purchase of the said Chassis with 4 Cylinder Engine with extended warranty of three years instead of two years while M/s. Ashok Leyland Ltd insisted that Corporation should not deviate from its tradition of purchasing Bus Chassis having only 6 Cylinders, however the petitioner did not make any representation Page 10 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT in writing about the purchase of Bus Chassis with 4 Cylinder Engine and its representation was on other aspects. The respondent no. 2 further submitted that thereafter Corrigendum was published o 1.9.2020 on GEM Portal which was in pursuance to the decision take by the Technical Specification Committee which met on 13.08.2020. It is further submitted that tenders were to be supplied by interested party on or before 09.09.2020, however till 8.9.2020 not a single tender was received and therefore, the respondent no.2 thought it fit to cancel the tender process. The respondent no.2 further submitted that Technical Specification Committee met again on 09.09.2020 which was attended by 6 members, which consisting of following members:
(1). Additional Chief Secretary, Ports and Transport Department. (2). Secretary, Finance Department.
(3). Secretary, Energy and Petro Chemicals Department. (4). Chairman of Gujarat State Road Transport Corporation. (5). Vice Chairman and Managing Director of Gujarat State Road Transport Corporation, Member Secretary. (6). Professor of L. D. Engineering College as Technical Member.
The decision of the Purchase Committee was routed upto the Hon'ble Minster of Transport wherein it was suggested that the order should be split in the ratio of 80:20 to have more competitive rates as against the suggestion of 65:35 after such approval tender came to be published on 11.09.2020 and in response to the same Tata Motors Ltd as well as Ashok Leyland Ltd submitted their tenders within the stipulated time i.e. 1.10.2020 while petitioner who is not manufacturing 10 meters long Bus Chassis with 6 Page 11 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT Cylinder Engine BSIV norms and therefore did not participate as it was not eligible to compete. It is further contended by ST Corporation that petitioner entered into correspondences at different levels however considering the policy decision it was not possible to accede to the request of the petitioner to change the conditions and allow it to participate with required emission norms with 4 Cylinders Engine. It is submitted that the technical bids were opened on 1.10.2020 and both the tenderers were found eligible wherein the price of the Ashok Leyland Limited was Rs.16,60,000/ per Bus Chassis while of M/s Tata Motors Limited offer at Rs.17,92,000/ per Bus Chassis. The respondent no.2 submitted bid so received with the High Level Purchase Committee which was headed by Additional Chief Secretary to the Government of Gujarat, Port and Transport Department with entire record. The High Level Purchase Committee met on 27.10.2020 and after negotiation M/s. Ashok Leyland Limited was agreed to reduced its offer to Rs.16,58,000/ per Bus Chassis and thereupon committee recommended to place an order of 800 Bus Chassis with it. He also further recommended that an order of 200 Bus Chassis be placed with Tata Motors Limited provided it agrees to match the price of M/s. Ashok Leyland Limited. The recommendations so made by the Committee were placed before the State Government for its approval wherein decision shall be taken and final orders would be passed by the Hon'ble Chief Minister of Government of Gujarat. It is contended by the respondent no.2 that policy of the Gujarat State Road Transport Corporation is transparent, fair and just and that injustice is caused in the entire process. It is contended that the respondent no.2 Corporation as well as rest of State Road Page 12 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT Transport Corporations in India are purchasing Bus Chassis having length of 10 meters with 6 Cylinder Engine only and in fact the petitioner has also supplied the similar buses with same norms to respondent no.2 Corporation in past. The ST Corporation has further contended that the petitioner is not manufacturing 10 meters Bus Chassis with BSVI Emission norms, which have come into force w.e.f. 1.4.2020 and is now objecting to the entire process to serve its purpose. It is contended by ST Corporation that State Corporation has decided to follow its well settled practice after conscious decision and report of the High Level Purchase Committee. It is contended that it is always for the buyer to decide norms to meet with its requirements and it is a fact that procedure is neither improper nor biased. It is contended by the ST Corporation that the decision of cancellation of first tender and then change of norms and publication of second tender cannot be termed as arbitrary or discriminatory or biased only because the petitioner is not eligible to participate in tender process. It is contended that the issues were examined by Technical Specification Committee of Experts constituted by Gujarat State Road Transport Corporation as well as High Level Purchase Committee headed by Additional Chief Secretary to the Government of Gujarat duly constituted by it. It is further contended that file is to be ultimately approved by the Hon'ble Chief Minister of the State of Gujarat and therefore, it is submitted that contentions raised by the petitioner are without any substance. It is submitted that as far as Gujarat State Road Transport Corporation is concerned, its tender of high amount purchase are always finalized and published only on GEM Portal, New Delhi. It is Page 13 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT submitted that as per one of the conditions of GEM Portal, it is open to Gujarat State Road Transport Corporation to cancel the tender process and therefore, cancellation of first tender process cannot be questioned by petitioner only because it is not suitable to it. It is submitted that the appropriate decision is taken in the interest of Gujarat State Road Transport Corporation which is plying its buses throughout the State of Gujarat as well as in other States. It is further submitted that the respondent no.2 Corporation has taken due care to get lowest available price from L1 party has also matched with the said price unconditionally. It is submitted that the petitioner who is not eligible to participate in tender process considering the technical specifications has no right to challenge other conditions, more particularly, relating to Reverse Action and Split orders. It is submitted that even those two issues were examined at the High Level and even Hon'ble Transport Minister has also suggested and ordered split order in the ratio of 80:20 as provided to fetch competitive rate. It is also submitted that the respondent no.2 Corporation is in urgent requirement of 1000 new Bus Chassis having length of 10 meters owing to a decision to scrap 1239 10 meter long buses. It is also contended that 1000 new Buses are to be built up by respondent no.2 in its workshop and it has been decided to procure parts and material from different agencies and even orders are also placed for it. In view of the aforesaid, it is prayed that no interim relief be granted and petition be dismissed. In support of the contentions raised in the affidavit in reply, respondent no.2 also relied upon relevant document.
3.2. The respondent no.2 Corporation has also filed a further Page 14 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT affidavit in reply dated 09.12.2020. It is further contended by respondent no.2 that there is a vast technical difference in the 10 meter long bus chassis having four Cylinder Engine and six Cylinder Engine. The respondent no.2 has further contended that it is having fleet of 6873 buses built up on 10 meter long Bus Chassis or 12 meter long Bus Chassis and all are having Six Cylinder Engines. It is further contended by the respondent no.2 that all the 73 Road Transport Corporations of the Country are purchasing and using 10 meter long or 12 meter long Bus Chassis having only Six Cylinders. It is further contended that recently Orrisa State Road Transport Corporation and West Bengal Road Transport Corporation have floated tenders for procurement of similar Chassis of BS VI Emission norms demanding six Cylinder Engine only. It is further contended by respondent no.2 that there is vast technical difference in its Bus Chassis having Four Cylinder Engine and Six Cylinder Engine. The said technical and other aspects were examined by the Technical Specification Committee of respondent no.2 and thereafter permission of State Government was obtained for fresh tender with new specifications and a fresh tender was floated on 11.09.2020 for purchase of 10 meter long Bus Chassis with Six Cylinder Engine only. It is further contended that buses built on 10 meter long Chassis will be having 52 seats and the total weight of a bus would be of 9 to 9.5 tonnes and therefore, Six Cylinder Engine is desirable. It is further stated that road conditions as well as geographic and topographic conditions of remote, rural and hilly areas demand Chassis with Six Cylinder Engines. It is further contended that respondent no.2 has all the powers and authority to decide the technical and commercial Page 15 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT aspects for purchase of Bus Chassis and also the powers to cancel the tender. It is therefore, submitted that cancellation of first bid on 08.09.2020 is within its power and in the interest of administration and public at large. It is contended that as per the various judgments of the Hon'ble Supreme Court that the Government has interest in selecting the best and tender process can be interfered only when the same is arbitrary, discriminatory or biased and not open to interfere merely because the Court feels that some other terms would have been more preferable. It is further contended that purchase of Bus Chassis is a highly technical matter and respondent no.2 - Corporation as well as State Government have considered the past experience as well as its requirements and other aspects while issuing fresh tender. It is further submitted that the Government of Gujarat has constituted High Level Purchase Committee consisting of 6 members which is headed by the Additional Chief Secretary, Ports and Transport Department. It is submitted that post of Chairman of ST Corporation is vacant and therefore, present committee consisting of five members. It is further submitted that deponent in his capacity as controller of Purchase, Gujarat State Road Transport Corporation, Ahmedabad attended the meeting of High Level Purchase committee held on 27.10.2020 wherein the four members were present except Secretary, Energy and Petrochemicals Department and after thorough examination of all aspects took appropriate decision unanimously.
4.0. The petitioner has filed rejoinder dated 11.12.2020 denying the contentions raised by the respondent no.2 in its two affidavits.
Page 16 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021C/SCA/13411/2020 JUDGMENT Denying the contentions so raised and reiterating the contentions raised in the petition and it is contended that affidavit in reply does not raise any valid ground for consideration of this Court. It is contended that action of the respondent no.2 should at least meet with criteria of Wednesbury principles. The respondent no.2 Corporation has filed surrejoinder dated 17.12.2020 and has denied the contentions raised by the petitioner in the petitioner as well as rejoinder affidavit and has narrated the procedure followed. It is contended by the respondent no.2 that it has purchased 1019 of 10 meter long bus Chassis with 6 Cylinders Engine in the year 201112 with BS3 norms and that 858 Buses were put on road after bodybuilding in the month of August 2012 and later on few more buses were to be on road. It is submitted that technical problems were noticed and there were problems about fuel efficiency and therefore, letter was addressed to the petitioner on 15.7.2013 wherein it is stated that even there were incidents of buses catching fire from engine bonnet portion and same were intimated to the petitioner. It is further stated that respondent no.2 has also purchased ready made Mini buses built up on 9 meter long Bus Chassis with 4 Cylinder Engine between 2010 to 2018. It is further stated that in all 699 mini Buses are purchased from the petitioner company and there are in all 6 incidents wherein failure of front IBeam are noticed for which respondent no.2 has addressed a letters dated 21.2.2018 and 26.06.2020. It is further submitted that the problems of crackage in Chassis of Mini Buses with 4 Cylinder Engine supplied by the petitioner are also noticed and the petitioner has been informed about the same vide communication dated 10/11.12.2020. According to the respondent Page 17 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT no.2, Bus Chassis having length of 9 meter with 4 Cylinder Engine are also not performing satisfactory and that there are technical defects which may result serious accidents. It is therefore, submitted that contentions raised by the petitioner in the memo of writ petition as well affidavit in rejoinder are without any justification.
5.0. The respondent no.2 has filed further affidavit in sur rejoinder dated 18.1.2021. It is contended that State of Gujarat has passed orders on 7.1.2021 permitting Gujarat State Road Transport Corporation to purchase bus Chassis having length of 10 meter with 6 Cylinders from M/s. Ashok Leyland Limited and M/s Tata Motors Limited and accordingly the purchase order has been given on 8.1.2021 to supply of in all 800 Diesel Chassis Bus BS VI 10 meter and 200 Diesel BS VI 10 meters. It is further submitted by respondent no.2 that M/s. Ashok Leyland Limited has already offered proto type Diesel Chassis BS VI 10 meter for inspection and accordingly it has been inspected by technical team of Central Institute of Road Transport, Pune on 18.1.2021. It is further submitted that M/s. Tata Motors Limited has offered its proto type Diesel Chassis BS VI 10 meter in the first week of February 2021 and after inspection by the competent authority and compliance of the terms and conditions mentioned in the purchase order, both the companies will start regular supply as per the schedule. It is therefore, contended that petition be dismissed.
6.0. Heard Mr. R.S.Sanjanwala, learned Senior Advocate with Ms. Garima Malhotra, learned advocate, Mr. Maharshi Patel, Page 18 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT learned advocate assisted by Ms. S.M. Patel, learned advocate for the petitioner, Mr. Tirthraj Pandya, learned Assistant Government Pleader for the respondent State and Mr. H.S. Munshaw, learned advocate for the respondent no.2 Corporation. The petitioner as well as respondent no.2 have also submitted their written submissions , which are taken on record and same is also made basis of this judgment and order. Learned advocates for the respective parties were heard extensively for final disposal. Hence, Rule returnable forthwith. Mr. Pandya, learned AGP waives service of notice of Rule on behalf of the respondent no.1 and Mr. H.S. Munshaw, learned advocate waives service of notice of Rule on behalf of the respondent no.2.
7.0. Mr. Sanjanwala, learned Senior Advocate has taken this Court to the factual matrix based upon important list of dates and events submitted by the petitioner and has reiterated the contentions raised in the written statement filed by the petitioner. Ms. Sanjanwala, learned Senior Advocate for the petitioner contended that action of the respondent no.2 Corporation to cancel the first tender one day before the last date of submission and the decision to alter Technical Specifications within 48 hours by way of floating second tender is arbitrary, unreasonable and intended to favour two out of three original Equipment Manufacturers. It was submitted by Mr. Sanjanwala, learned Senior Advocate that on 13.08.2020 the Technical Specification Committee strongly recommended purchase of Bus Chassis with 10 meters length with 4 or 6 Cylinder engines, however subsequently material changes have been made in second tender on basis of the recommendation Page 19 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT of Ashok Leyland Limited with a intention to see that only two Original Equipment Manufacturer stay in the fray and petitioner cannot meet with the said requirement. It is further contended that first tender was cancelled by the respondent no.2 without any reason and the reason put forward by the respondent no.2 is nothing but premonition that it would not receive a bid until 09.09.2020. It is contended that wednesbury principles of fairness and reasonableness presupposes that respondent ought awaited the last date of submission i.e. 09.09.2020 and that such cancellation is arbitrary, illegal, unreasonable,irrational and untenable in law. It was reiterated that minutes of the High Level Purchase Committee meeting held on 27.07.2020 clearly reveals that decision to abort first tender was taken at the instance of Tata Motors pursuant to its letter dated 3.9.2020 addressed to the Hon'ble Chief Minister. It is also contended that consequent modifications made in the second tender which ascribed to all the recommendations in the second tender made by Ashok Leyland during the prebid clarification meeting of the First Tender and same leaved no room of doubt that the cancellation of first tender and making material changes in the specifications of the second tender was intended to favour the other two Original Equipment Manufacturer i.e. Ashok Leyland and Tata Motors Limited and thus entire action and decision making process of the respondent no.2 and its authorities is arbitrary, unfair and unreasonable. The petitioner has relied upon the comparative table for the two tenders, which read thus;
Sr Specification Value as per Value as per current Remarks
.N previous tender tender (Tender No.
o (Tender No. GEM/2020/B/7885
GEM/2020/B/7127 64)
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C/SCA/13411/2020 JUDGMENT
4)
1 Number of 4nos. & 6nos. Both Only 6 Nos. As
Cylinder recommended
by Ashok
Leyland in its
Prebid
Clarification
Pg.43 @
Sr.no.2
2 Engine Exhaust SCR (Selective SCR (Selective
System Catalytic Catalytic
Reduction), Both Reduction)
EGR & SCR
3 Overall length 10815.0, 11187.0, 10815.0, 11187.0 11460.0 length
11460.0 specification
removed in the
second tender
which is the
length of
Petitioner's
model
4 Overall width 2473.0, 2540.0, 2473.0, 2580.0 2540.0 width
2580.0 specification
removed in the
second tender
which is the
length of
Petitioner's
model
5 overall Height 1890.0, 2728.0, 1890.0, 2832.0 2728.0 height
2832.0 pecification
removed in the
second tender
which is the
length of
Petitioner's
model
6 Reverse Auction Enabled Disabled As
recommended
by Ashok
Leyland in its
Prebid
clarification
pg.44 @2r.11
7 Splitting of Not allowed Allowed in the As
Page 21 of 43
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C/SCA/13411/2020 JUDGMENT
Order ratio 80:20 recommended
by Ashok
Leyland in its
prebid
Clarification
Pg 44@ Sr.13
It is contended that there is change of specification only to oust the petitioner and even the splitting of bid in the ratio was not allowed in the first tender. It is also contended that bias in the respondent no.2 action of changing the technical specification is evident from the fact that under the second tender issued on 09.09.2020, respondent no.2 did not only specify that only BSVI Cylinders have to be purchased but under the overall length, width and height dimensions mentioned in the second tender specifically mentioned exact dimensions of the models manufactured by Tata Motors Limited and Ashok Leyland Limited. It is contended that even if any third party manufacturer could offer Bus Chassis of Six Cylinder Engine, it would not have been able to participate in the bid if the dimensions of its product did not exactly match the dimensions mentioned in the second tender. It is therefore alleged that second tender was tailor made for Tata Motors Limited and Ashok Leyland Limited and the change in technical specifications was unjustified. It is therefore contended that second tender with altered specification is in violation of principles of Article 14 of the Constitution of India viz. fairness in action by the State within non arbitrariness being the essence of providing a level playing field. It is further contended that modification in technical specifications carried out in callous and causal manner without evaluation of technical parameters and thereby making the entire decision making process arbitrary, irrational and unreasonable. It is also Page 22 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT contended that meeting dated 09.09.2020 and 27.10.2020 suffers from the vice of procedural impropriety The very essence of the second tender is illegal, petition requires consideration and prayers as prayed for deserves to be granted. Mr. Sanjanwala, learned Senior Advocate fore the petitioner has relied upon the following judgments:
(1). Reliance Energy Limited and Anr vs. Maharashtra State Road Development Corporation Limited reported in (2007) 8 SCC 1. (2). Michigan Rubber Ltd vs. The State of Karnataka reported in (2012) 8 SCC 216.
(3). Union of India vs. Dinesh Engineering reported in (2001) 8 SCC 491.
8.0. Mr. Munshaw, learned advocate for the respondent no.2 relying upon the written argument has submitted that respondent no.2 has fleet of 8155 buses on road at present out of which 1330 are mini buses, 5800 10 mtrs long buses and 1025 12 mtr long buses. It is submitted as per the policy 1239 buses built up on 10 mtrs long bus chassis are required to be scrapped in the year 2020 and accordingly decision to purchase 1000 bus chassis having length of 10 mtrs to replace the outgoing buses to taken up by Gujarat State Road Transport Corporation and proposal was sent to the State Government on 13.7.2020. Relying upon the factual matrix as stated in the affidavit in reply filed by the respondent no.2, Ms. Munshaw contended that Tata Motors Limited, Ashok Leyland Limited and petitioner are manufacture of bus chassis having length of 10 mtr as well as 12 mtr. It is further contended that the petitioner is supplying bus chassis having length of 10 mtrs Page 23 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT as well as 12 mtrs since 201011 as and when found suitable and competitive to it. It is contended that most importantly uptil now petitioner was manufacturing bus chassis having length of 10 mtrs with 6 cylinder engines of BSII and BSIV norms, however the petitioner has stopped manufacturing bus chassis having 10 mtrs length with 6 cylinders engines on introduction of BSVI norms w.e.f. 1.4.2020 and now petitioner is insisting for purchases of bus chassis with 4 Cylinder engines having length of 10 mtrs by respondent no.2. It was noted that respondent has never purchased the bus chassis having length of 10 mtrs with 4 cylinders engines since 1.5.1960. It is also contended that all the 73 State Road Transport Corporation of the country are also purchasing bus chassis having length of 10 mtr with 6 cylinder engines only. It is also contended that recently Orissa State Road Transport Corporation and West Bengal Road Transport Corporation have floated tenders for purchase of bus chassis having length of 10 mtrs with 6 Cylinder engines only. It is further contended that pursuant to the sanction by the respondent no.1 specifications were prepared for purchase of bus chassis having length of 10 mtrs with new norms known as GSVI there are three manufactures manufacturing bus chassis having length of 10 mtrs with BSVI Emission norms in the country i.e. (1).M/s. Tata Motors Ltd.(a).6 Cylinder Cummins Engine (American Make) (b) 4 Cylinder TML Make (India Make). (2). M/s. Ashok Leyland Ltd. 6 Cylinder HSeris Make (Japan Make). (3).M/s. VE Commercial Ltd. 4 Cylinder VECE Engine (Germany Make). It was further contended that tender was prepared and published on 17.7.2020 inviting offers for bus chassis having length of 10 mtrs with 4 cylinder engines / 6 cylinders Page 24 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT engines satisfying BSVI norms. It is contended that prebid meeting was held on 29.07.2020 and all the three manufactures submitted their written submissions. It is contended that the petitioner did not make any representation in writing about purchase of bus chassis with 4 cylinder engines and it was on other aspects. It is further contended that respondent no.2 issued a corrigendum on 1.9.2020 on gem portal and made it clear that bus chassis having length of 10 mtrs with 4/6 cylinder engines would be purchased with any of three makes i.e. Tata Cumins with 6 Cylinder engines (American Make) (2) M/s. Ashok Leyland ltd 6 Cylinder H series (Japan Make) (3) M/s. VE Commercial Ltd 4 Cylinder VECE Engines (Germany make). It is further submitted that TML make (India make) model with 4 cylinder engines of M/s Tata Motors Limited was discarded. It is submitted that a decision in this regard was made by 8 members Committee of Gujarat State Road Transport Corporation on 13.08.2020.
8.1. It is contended by Mr. Munshaw that the last date of submission of tender was 09.09.2020 but not a single tender was received till 8.9.2020 and it was though it fit to cancel the tender. It is contended that general terms and conditions of the tender empowers the respondent no.2 to decide the technical and commercial aspects for purchase of bus chassis, cancel the tender as well as to split the tender and therefore, impugned decision of cancellation of tender is as per the competence of the authority and there is no illegality or arbitrariness. It is contended that thereafter Technical Specification Committee of respondent no.2 again met on 09.09.2020 and was attended by six members including a representative from Regional Transport Office, Ahmedabad as well Page 25 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT as Associate Professor of LD Engineering College and a decision was taken to purchase 10 mtrs long bus chassis with 6 cylinders engine only considering various aspects. It is submitted that the reasoning makes it clear that the Corporation has always purchased bus chassis of 10 mtr length with 6 cylinder engine only and the performance is satisfactory. It is submitted that the respondent no.2 has no experience of bus chassis with 10 mtr long having 4 cylinder engines. It is submitted that in case of purchase of bus chassis with 4 cylinder engines there would be a problem about inventory and purchase of qualitative spare parts. It is contended that the draft of new tender with changed specifications was prepared and sent to respondent no.1 and was considered at the level of Hon'ble Minister of Transport and it was suggested that the purchase order should be split in the ratio of 80:20 to make it more competitive as against the ratio of 65:35 proposed by Gujarat State Road Transport Corporation. It is further contended that M/s. Tata Motors and M/s. Ashok Leyland submitted tenders within the time limit while the petitioner did not submit the tender as it is not manufacturing 10 Mtrs long bus Chassis with 6 Cylinder Engines having BSVI norms. It is contended that technical bids were opened on 1.10.2020 and price bids were opened on 09.10.2020 and M/s. Ashok Leyland Limited quoted Rs.16,80,000/ per bus chassis while M/s. Tata Motors Limited quoted Rs.17,92,000/ per bus Chassis. It is further contended that High Level Purchaser Committee headed by Additional Chief Secretary of Ports and Transport Department, State of Gujarat met on 27.10.2020 and negotiated with the representative of M/s. Ashok Leyland Limited and it agreed to reduce its offer to Rs.16,58,000/ per bus Chassis Page 26 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT and a decision to recommend purchase of 800 bus chassis from M/s. Ashok Leyland Limited was taken and it was also decided to recommend to place on order of 200 bus chassis with Tata Motors Ltd if it agrees to match the price of Ashok Leyland Ltd. It is further submitted by Shri Munshaw that the Committee unanimously took the said decision to put forward its recommendations before the State Government after considering all the factual and technical aspects at length. It is contended that M/s. Ashok Leyland Limited has given in writing that a price of Rs.16,58,000/ per bus chassis having length of 10 mtrs is the lowest price and under no circumstances the prices would be reduced then the said price of Rs.16,58,000/. It is further contended that the Tata Motors Limited has agreed to supply 200 bus chassis having length of 10 mts at the price of Rs.16,58,000/ agreed upon by M/s. Ashok Leyland Limited by way of matching the price unconditionally. It is submitted that absence of one of the members would not vitiate the decision of the committee as the meeting was attended by remaining four members and there was a Coram and unanimous decision was taken. It is further submitted that State Government is the final authority for taking an ultimate decision and not Gujarat State Road Transport Corporation. It is further submitted that there is a vast technical difference in bus chassis having length of 10 mtrs having 4 Cylinder engines and 6 Cylinder engines. It is further submitted that considering the vast technical difference and additional benefits of 6 Cylinders Engines it was thought it fit by Technical Specification Committee of respondent no.2 to suggest purchase of 10 mtrs long bus chassis with 6 Cylinder Engines with BS IV norms and a proposal of fresh tendering with new Page 27 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT specifications and as draft of fresh tender was sent to the State Government and on its sanction a fresh tender was floated on 11.09.2020. It is contended that bus body of 52 seats is to be built up and the total weight inclusive of passengers per bus would be 9 to 9.5 MT and therefore 6 Cylinder Engine is desirable. It is contended that the buses of respondent no.2 are plied throughout the State of Gujarat as well as other States like Rajasthan, Madhya Pradesh and Maharashtra and considering the road conditions geographic and topographic conditions, rural remote and hilly areas it is necessary that the buses be built up on chassis with 6 Cylinders Engines as being done since 1960. It is further contended that the respondent no.2 as a buyer has all the power and authority to decide the terms and conditions for purchase of bus chassis having 10 mtrs length after careful consideration of various technical aspects, past experience, investment and availability of inventory, technical know how of mechanics etc. It is contended by Munshaw that the petitioner has no right to thrust upon its decision and 10 mtr long bus chassis with 4 Cylinder Engine on respondent no.2, a public sector undertaking providing transportation facility to a common man. It is further contended that the decision of respondent no.2 to purchase 10 mtrs long bus chassis with 6 Cylinder Engine is supported by facts and material on record as well as technical and commercial aspects and the decision is just and legal and the tendering process is transparent, just and legal. It is contended that the entire purchase is through a long channel and ultimate decision is to be taken by the State Government. It is further submitted that Hon'ble Apex Court as well as this Court have held that the Government has an interest in Page 28 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT selecting the best and its tender process can be interfered only when the same is arbitrary, discriminatory or bias and not open to interfere merely because the Court feels that some other terms would have been more preferable. In support of his above submission, Mr. Munshaw, learned advocate for the respondent no.2 has relied upon the following judgments of the Hon'ble Apex Court.
(1). Tata Cellular vs. Union of India reported in (1994) 6 SCC
651. (2). Directorate of Education and ors vs. Educomp Datamatics Ltd and ors reported in (2004) 4 SCC 19.
9.0. Mr. Tirthraj Pandya, learned Assistant Government Pleader has adopted the arguments of Mr. Munshaw, learned advocate for the respondent no.2.
10. Mr. Sanjanwala, learned Senior Advocate for the petitioner has in rejoinder submitted that fairness in action is required to be shown by the respondent no.2 by providing level playing field. It was contended that respondent no.2 by altering technical specification has created a situation whereby instead of three Original Equipment Manufacturers only two i.e. Tata Motors Limited and Ashok Leyland Limited and instead of providing equal opportunity to participate the tender, only the first two entities could participate in the same and it was alleged the respondent acted arbitrarily. It was contended that even the condition to remove reverse auction and make provision for splitting of the tender in the ratio of 80:20 is without any justification or reasoning. It was contended by Mr. Sanjawala that no reasons have been ascribed as to why such material changes were made Page 29 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT unilaterally, unreasonably and without there being an ulterior motive to favour Ashok Leyland. It was contended that the respondent no.2 has provided no other justification or reasoning for the aforementioned cancellation of first tender and only justification which has been mentioned is erroneous and incomprehensible. It was reiterated that first tender came to be cancelled at the instance of Tata Motors Limited and second tender has been floated ascribing to all the recommendations of M/s. Ashok Leyland. It was contended that respondent as a public authority in contractual matters should not have unfettered discretion and in contracts having commercial element have to exercise extra discretion to follow the norms recognized by the Courts while dealing with the public property. It was contended that action of the respondent no.2 is violative of Article 14 of the Constitution of India. Reiterating the contentions raised, it was contended that whole tender process is mala fide in law and on facts. It was contended that criteria has been manipulated solely to consider Ashok Leyland and Tata Motors Limited and exclude the petitioner herein. Relying upon the decision in the case of Michigan Rubber Ltd (supra), it was contended that terms of tender set by the Government in their undertakings are intended to favour someone, the same shall be arbitrary, discriminatory and mala fide or actuated by bias. It was contended that load bearing capacity of any bus is directly related to his power and torque and petitioner model of chassis with four Cylinders Engine provides that same amount of power and torque as the Chassis with six Cylinder Engine. It is submitted that no response has been provided on the petitioner's original submission that a four cylinder engine, would Page 30 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT provide better fuel efficiency, lesser noise, weight components, would require lesser maintenance and there would be an ease of serviceability as opposed to exclusive six cylinder engine. It is submitted that similarly combined SCR and EGR technology saves operational expenses per kilometer. On the aforesaid, it was contended that actions and decisions of the respondents being arbitrary, unfair and unreasonable, same warrant interference of this Court by way of judicial review.
11. No other and further submissions / grounds / contentions have been raised by the learned advocates for the respective parties.
12. Upon examining the contentions raised by the learned counsel for the petitioner that first tender was cancelled one day before the last day of submission, it clearly appears from the facts of the case that on the date on which the respondent Corporation took a conscious decision not to go ahead with the first tender, no bid was received. It is not the case of the petitioner that petitioner had submitted its bid and thereafter the first tender came to be withdrawn / cancelled. Even considering the provisions of the Indian Contract Act, no party including the petitioner has been prejudiced. Further contention on the said aspect as contended by the learned counsel for the petitioner is examined that, after cancellation of the first tender, second tender with altered technical specification was floated within 48 hours, the same in facts of this case, cannot be termed as arbitrary, unreasonable and only with a view to or intention to favour two out of three original Equipment Manufacturers. It deserves to be noted that technical specification Page 31 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT in the first tender was of 4 cylinder buses with emission of BS VI norms. It is for the author of the tender to decide what should be the technical specification as per the requirement of the author of the tender. Only because while issuing the first tender, Technical Specification Committee had recommended to purchase of Bus Chassis with 10 mtrs length with 4/6 cylinders engine would not mean that respondent corporation has to go for 4 cylinder bus instead of 6.
It is matter of record that in India there are only three original equipment manufactures including petitioner. It is also matter of record that petitioner himself use to manufacture 10mtrs length with 6 cylinder bus however, because of change in emission standard by the Central Government, the petitioner cease to manufacture 6 cylinder bus. The change of specification cannot be termed as arbitrary, unreasonable or untenable. The record shows that before the last date of first tender was over, the respondent authority thought it fit to cancel the same and again the Technical Specification Committee examined the said issue and opined and decided that instead of 10 mtrs 4 cylinder bus 6 cylinder bus should be preferred. The record also shows that the said aspect was examined by the High Level Purchase Committee and upto the highest level in the Government regime and therefore, it cannot be said that as the respondent had premonition that it would not receive a bid until 09.09.2020, the first tender deserves to be dropped / canceled. It is reiterated that it is for the author of the tender to decide the Technical Specification.
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13. The contention raised by the learned counsel for the petitioner that the decision taken by the respondent Corporation does not satisfy the Wednesbury principle of fairness and reasonableness, deserves to be negatived. When as author of the tender, respondent no.2 though it fit to reexamine the Technical Specification, the same cannot be termed as arbitrary, illegal, unreasonable, irrational and untenable in law. In opinion of this Court, therefore, it cannot be said that the respondent Corporation ought to have awaited till last date of submission of first tender i.e. on 9.9.2020. Even considering the chart which is relied upon by the learned counsel for the petitioner while comparing the technical specification of the 4 cylinder bus and 6 cylinder bus, in opinion of this Court, it is for the respondent Corporation as an authority to prescribe the same.
14. Emission standard BS VI is sina qua non for public vehicle moreso in case of public transport. The respondent Corporation is a State Transport Corporation which has to take into consideration availability of best vehicles to confer the needs of Public Transport wherein safety is a vital consideration. As contended by the respondent No.2 Corporation even the technical specifications were examined and it was found that 6 cylinder engine bus is far better than 4 cylinder bus. It is also come on record which is not denied by the petitioner that in similar situation, the State Corporation throughout the India 6 cylinder buses are there. Therefore, the contention raised by the petitioner that change in specification is only with a with to oust the petitioner from competition and that such alterations are made as tailor made for Tata Motors Limited Page 33 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT and Ashok Leyland Limited deserves to be negatived. The record on the contrary shows that the petitioner itself was manufacturing 6 cylinder buses when emission standard was BS II & IV. As there is change in emission standards which now prescribes necessity of having BS VI cylinder, the petitioner has not developed its capacity to manufacture such vehicle and only because the petitioner cannot manufacture 6 cylinder engine with BS VI Standard, it cannot be said that technical specifications are tailor made.
15. The contention raised by the learned counsel for the petitioner that second tender with altered specification is in violation of principles of Article 14 of the Constitution of India is unfair, deserves to be negatived outright. The other contentions raised that there is procedure impropriety in the meeting dated 9.9.2020 and 27.10.2020 also deserves to be negatived. With a limited power of judicial review of this Court, having examined the record of this petition, it cannot be said that method and manner of evaluation of technical parameters have been made in callous and casual manner. As can be seen from the record though the State Transport Corporation is separate entity as per rules of business, the purchase of 1000 Bus chassis having length of 10 mtrs was examined right upto the highest level in the State of Gujarat. The record shows that the petitioner as well as other two companies i.e. Tata Motors Limited and Ashok Leyland Limited are manufacturing bus chassis having length of 10 mtrs as well as 12 mtrs. It is matter of fact that the emission standard undergo change at the behest of Union of India and same are to be adhered to by the respondent corporation as a State Transport Corporation. As is indicative from Page 34 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT the record of the petition and the emission standards were BS II and BS IV, the petitioner itself was manufacturing bus chassis having length of 10 mtr with 6 cylinder engine. BS VI standards have been made effect from 1.4.2020 and therefore adherence to the same is mandatory. It is matter of record which is not even denied by the petitioner that after BS VI norms came into effect from 1.4.2020, the petitioner has ceased to manufacture 10 mtrs length chassis with 6 cylinder engine. As contended by the respondent Corporation which is not denied by the petitioner that 70 State Road Transport Corporation in India purchased and used bus chassis having length of 10 mtrs with 6 cylinder only. The record on the contrary show that even at the stage of first tender prebid meeting was held and objections were taken by three bidders including petitioner and even before receipt of any offer respondent no.2 Corporation took a conscious decision to cancel/ withdrawn the first tender. The record indicates that the same was reexamined upto the highest level by the High Level Purchase Committee headed by the Additional Chief Secretary, State of Gujarat and thereafter decision is taken to opt for chassis having length of 10 mtrs with 6 cylinder instead of 4 cylinder. As can be seen from the record of the petition, it cannot be said that the decision taken by the respondent Corporation to opt for chassis having length of 10 mtrs with 6 cylinder with BS VI norms by second tender is in any way arbitrary, illegal, unreasonable,irrational and untenable. Only because the petitioner does not possess and / or did not prefer to manufacture 6 cylinder engine it cannot be said that the change in technical specification was unreasonable. The action taken by the respondent no.2 Page 35 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT Corporation is to adhere to the BS VI norms and it cannot be said that the respondent no.2 has not acted in fairness. Only because the petitioner is not in a position to comply with the technical specification, it cannot be gainsaid that the respondent no.2 has not provided level playing field. The record shows that in past when the requirements were BS II and BS IV standards, the petitioner himself has supplied 6 cylinder engine chassis to the respondent no.2 Corporation itself. The manner in which the procedure has been followed by the respondent Corporation as far as second tender is concerned, cannot be termed as mala fide in law and on facts or violative of Article 14 of the Constitution of India. Fuel efficiency is not only consideration for State Transport bus. As stated above, in majority of the States, State Transport Corporations have opted for 6 cylinder and therefore, it cannot be said that the decision and technical specification in the second tender is in any manner unreasonable, arbitrary and illegal. On fact also, this Court finds that no illegality is committed. Even other contention that meeting was not attended by one of the member would not take case of the petitioner any further.
16. In totality of the facts, therefore, it cannot be said that the decision taken by the respondent Corporation and the process of the second tender is in any manner illegal or that it vitiates any of the basis parameters of the tender. The respondent Corporation as a buyer / author has all the power or authority to decide terms and conditions for purchase of bus Chassis having length of 10 meter and it cannot be said that the decision taken by the respondent Corporation is in any manner arbitrary discriminatory and bias. In Page 36 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT facts of this case, on the contrary, the respondent Corporation has come out with a clear and properly understood norms in the second tender. It cannot be said that other specifications as contended by the petitioner that it should be 4 cylinder would have been better and therefore, the decision taken by the respondent Corporation is arbitrary, discriminatory and mala fide and in facts of this case it cannot be said that it is actuated by bias. In facts of this case, therefore, ratio laid by the Hon'ble Supreme Court in the case of Reliance Energy Limited and Anr (supra), would not be applicable to the facts on hand. No ground for interfering by way of limited judicial review under Article 226 of the Constitution of India is made out by the petitioner. As held by the Hon'ble Supreme Court in the case of Air India limited vs. Cochin International Air Port Limited, the State can chose its own method to arrive at a decision and it can fix its own terms and inviting the tender and same is not open to judicial scrutiny. As held by the Hon'ble Supreme Court in the case of Tata Cellula (supra), in facts of this case and having examined the process undertaken by the respondent no.2 Corporation, it cannot be said that the decision and / or action is violative of Article 14 of the Constitution of India. Consequently, therefore contention raised by the petitioner deserves to be negatived.
17. Reference be made to the judgment of the Hon'ble Supreme Court in the case of Municipal Corporation, Ujjain and Another vs. BVG India Limited and Ors reported in (2018) 5 SCC 462. Para 9, 10, 14,15, 20, 22, 44 and 45 read as under:
"9. The principles which have to be applied in judicial review of Page 37 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by this Court in Tata Cellular v. Union of India, (1994) 6 SCC 651, wherein this Court observed that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down.
10.The modern trend points to judicial restraint in administrative action. The Court does not sit as a Court of Appeal but merely reviews the manner in which the decision was made. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision without the necessary expertise which itself may be fallible. The government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or a quasiadministrative sphere. However, the decision must not only be tested by the application of the Wednesbury principle of reasonableness, but must also be free from arbitrariness and not affected by bias or actuated by mala fides. (See the judgment in the case of Master Merin Services (P) Ltd. v. Metcalfe & Hodgkinson (2005) 6 SCC 138).
14.The judicial review of administrative action is intended to prevent arbitrariness. The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; if the process adopted or decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference under Article 226.Page 38 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021
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15.It is well settled that the award of contract, whether it is by a private party or by a public body or by the State, is essentially a commercial transaction. In arriving at a commercial decision, the considerations which are of paramount importance are commercial considerations. These would include, inter alia, the price at which the party is willing to work; whether the goods or services offered are of the requisite specifications; and whether the person tendering the bid has the ability to deliver the goods or services as per the specifications. It is also by now well settled that the authorities/State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation.
20.In Karnataka State Industrial Investment & Development Corporation Limited v. Cavalet India Ltd. & Ors. (2005) 4 SCC 456, this court after taking into consideration various questions on various subjects laid down the following legal principles, viz. (I)The High Court while exercising its jurisdiction under Article 226 of the Constitution does not sit as an appellate authority over the acts and deeds of the Financial Corporation and seek to correct them. The doctrine of fairness does not convert the writ courts into appellate authorities over administrative authorities.
(ii)In a matter between the Corporation and its debtor, a writ court has no say except in two situations:
a There is a statutory violation on the part of the Corporation, or b Where the Corporation acts unfairly I.e. unreasonably.
(iii)In commercial matters, the courts should not risk their judgments for the judgments of the bodies to which that task is assigned.
(iv)Unless the action of the Financial Corporation is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however, more prudent, commercial or businesslike it may be, for the decision of the Financial Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable.
(v)In the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold and this could be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer.
(vi)Public auction is not the only mode to secure the best price by inviting maximum public participation, tender and negotiation could also be adopted.Page 39 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021
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(vii)The Financial Corporation is always expected to try and realise the maximum sale price by selling the assets by following a procedure which is transparent and acceptable, after due publicity, wherever possible and if any reason is indicated or cause shown for the default, the same has to be considered in its proper perspective and a conscious decision has to be taken as to whether action under Section 29 of the Act is called for.
Thereafter, the modalities for disposal of the seized unit have to be worked out.
(viii) Fairness cannot be a oneway street.The fairness required of the Financial Corporations cannot be carried to the extent of disabling them from recovering what is due to them. While not insisting upon the borrower to honour the commitments undertaken by him, the Financial Corporation alone cannot be shackled hand and foot in the name of fairness.
(ix)Reasonableness is to be tested against the dominant consideration to secure the best price.
22.In Tata Cellular (supra), this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, by observing in para 94 thus:
(1)The modern trend points to judicial restraint in administrative action. (2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3)The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiation through several tiers. More often than not, such decisions are made qualitatively by experts.
(5)The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasiadministrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.Page 40 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021
C/SCA/13411/2020 JUDGMENT (6). Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. In that very judgment, this Court proceeded to observe that there are inherent limitations in the exercise of the power of judicial review of contractual powers.
This Court observed that the duty to act fairly will vary in extent, depending upon the nature of the cases to which the said principle is sought to be applied. The State has the right to refuse the lowest or any other tender, provided that it tries to get the best person or the best quotation.
44.As rightly contended by respondent no. 3, a statutory authority granting licences should have the latitude to select the best offer on the terms and conditions prescribed. The technical expert in his report categorically stated that, All the above aspects demand high level of Technicalities and Expertise rather than just depending on lowest financial price quote for a material transport. As clarified earlier, the power of judicial review can be exercised only if there is unreasonableness, irrationality or arbitrariness and in order to avoid bias and mala fides. This Court in Afcons Infrastructure (supra) held the same in the following manner:
13.In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision.
45.Evaluating tenders and awarding contracts are essentially commercial transactions/contracts. If the decision relating to award of contract is in public interest, the Courts will not, in exercise of the power of judicial review, interfere even if a procedural aberration or error in awarding the contract is made out. The power of judicial review will not be permitted to be invoked to protect private interest by ignoring public interest. Attempts by unsuccessful bidders with an artificial grievance and to get the purpose defeated by approaching the Court on some technical and procedural lapses, should be handled by Courts with firmness. The exercise of the power of judicial review should be avoided if there is no irrationality or arbitrariness. In the matter on hand, we do not find any illegality, arbitrariness, irrationality or unreasonableness on the part of the expert body while in action. So also, we do not find any bias or mala fides either on the part of the corporation or on the part of the Page 41 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021 C/SCA/13411/2020 JUDGMENT technical expert while taking the decision. Moreover, the decision is taken keeping in mind the public interest and the work experience of the successful bidder.
The principle laid down in this judgment would apply to the present case. What can be examined by this Court under Article 226 of the Constitution of India is whether the decision taken is lawful or not and not its soundness.
18. The contention that even from the point of view of economic welfare, respondent no.2 should have opted for 4 cylinder instead of 6 cylinder buses also deserves negatived. As stated earlier what is paramount to be considered is the suitability coupled with the public safety. It appears from the record that experience of respondent no.2 shows that 6 cylinder buses are more desirable. In view of the same, it cannot be said that the decision taken by the respondent no.2 to opt for 10 meters Bus Chassis with BSVI norms, cannot be termed as decision being against the public interest. Evaluating the terms and conditions of tender, it is purely commercial aspect and same is to be left to the wisdom of the respondent. The scope of judicial review in tender matters is very very limited and in facts of this case, having come to the conclusion that the decision taken by the respondent no.2 beyond condition prescribed in the second tender is not arbitrary, illegal, unreasonable and irrational, no interference is called for.
19. In view of the above, no interference is called for. Petition is liable to be dismissed and is hereby dismissed. Rule is discharged.
Page 42 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021C/SCA/13411/2020 JUDGMENT In view of the dismissal of Special Civil Application, no order in Civil Application and is accordingly dismissed. No costs sd/ (R.M.CHHAYA, J) sd/ (R.P.DHOLARIA, J) KAUSHIK J. RATHOD Page 43 of 43 Downloaded on : Thu May 06 21:08:08 IST 2021