Andhra HC (Pre-Telangana)
Tera Software Ltd. vs Director Of School Education, ... on 19 February, 2002
Equivalent citations: 2002(2)ALD688
ORDER P.S. Narayana, J.
1. The writ petition is filed for issuance of an appropriate writ, order or direction more in the nature of mandamus questioning the action of the 1st respondent in not rejecting the bid of the 3rd respondent under Clause 8(a) read with Clause 17(b) and Clause 29 of the bid documents and further declare the action of the 1st respondent in treating the 3rd respondent as L1 responsive bidder, vide tender Notice No. 242/SCERT/Computer Cell/D5/2001, dated 16-6-2001 and issue a consequential direction to the 1st respondent to consider the bid of the petitioner and treat the same as LI and pass such other suitable orders.
2. In WPMP No. 31416 of 2001 on 5-12-2001, interim direction not to finalise the bids for Group-G tender notice until further orders had been granted and in view of the urgency involved as explained by all the Counsel on record, the matter is taken up for final hearing.
3. The facts in brief, which had paved the way for the writ petitioner to invoke the jurisdiction of this Court under Article 226 of the Constitution of India, are as under:
It is stated that the petitioner-Company was incorporated under Indian Companies Act initially as a Private Limited Company for the purpose of developing software and imparting training in the field of hardware and the Company was recognised as one of the pioneer industry in development of software field and was also appreciated by other foreign organisations and the Company was converted into a Limited Company and it was incorporated with the Registrar of Companies on 15-12-1999. It was also stated that the 1st respondent invited tenders, vide Notice No. 242/SCERT/Computer Cell/ D5/2001, dated 16-6-2001 for leasing of computer hardware, software and connected accessories and provision for computer education in 1000 schools throughout the State of Andhra Pradesh and the last date for submission of bids was 15-7-2001 which was subsequently changed to 18-10-2001 upto 3 p.m., and technical bids were to be opened on the same day at 5 p.m. The bid is in two stages i.e., technical bid and commercial bid. The 1st respondent after opening of the technical bids, evaluates the same with reference to technical qualifications required to be met as per the specifications in the bid document and those who are evaluated to be qualified are informed about the same on the date of opening of the financial bids. It is further averred that the State is divided into eight groups, Groups A to H, District-wise and each bidder has to file a separate bid for whichever group he intends to bid. A period conference was held on 9-7-2001 for issuing clarification of bid conditions and to carry out amendments to bid conditions wherever necessary. The 1st respondent issued an amendment to bid document giving certain clarifications and making certain amendments to the price tender form of the commercial bid. The bid document apart from dividing the State into eight groups also categorises the schools within each group depending upon the strength of the students and a bidder has to quote its price for all the categories of schools included in each group. It is also further stated that Clause 8(a) of the bid document contemplates that all particulars must be furnished as asked for in the prescribed technical and commercial bids in the bid documents and under Clause 17 (b), the tenders with incomplete information are liable to for rejection. As per Clause 29, the total of Column 1 and Column 2 in the commercial bid (Price Tender Form) will alone be considered for commercial rate evaluation purpose. Pursuant to the pre-bid conference, as already stated supra, certain clarifications and amendments were issued and no clarifications or amendments to any of the clauses mentioned supra were issued and however Price Tender Form was amended obliging the bidders to quote their prices 'without tax' and 'with tax' per unit as well as half yearly instalment for all the units put together. It is also stated it is clear from a combined reading of the various clauses mentioned supra that any bid with incomplete particulars is liable for rejection and the 1st respondent has no option but to reject the same and any deviation from the conditions in the bid document would be arbitrary and the bid document does not give any such option to the 1st respondent. It was further stated that the tax component and the particulars quoted by each bidder was sought to be separated as the sales tax structure varies from State to State and it was essential for the 1st respondent to know the tax component of the price offered by each of the bidders. It was further stated that the petitioner was found technically qualified and was invited to attend the opening of the commercial hid on 18-10-2001 and the petitioner had to bid only for Group-G and had filled up the Price Tender Form furnishing all particulars including with tax and without tax and at the time of opening of commercial bid it was found that the 3rd respondent had not filled in the column 'without tax' both for unit as well as total half yearly instalments for all the units. The petitioner had bid for the supply of goods without taxes at Rs3,46,70,55l/- and with tax at Rs3,64,56,085/-, whereas the 3rd respondent had quoted with taxes at Rs. 3,59,99,150/- and thus the difference between the petitioner and 3rd respondent after addition of taxes will come to about Rs. 5 lakhs and odd. It is further stated that after opening of the commercial bid the petitioner came to know that the 1st respondent is considering the bid of the 3rd respondent and sent a representation protesting against the same on 19-10-2001, followed by letter dated 31-10-2001 and another letter dated 16-11-2001 and it is further stated that the Vice-President, Operations, met the 1st respondent on 1-11-2001 and the 1st respondent informed him that while considering the bid of the 3rd respondent, the lowest of the sales tax quoted by any one of the bidders for any one of the groups i.e., all groups, will be taken into consideration for calculating the price of the 3rd respondent and decide as to who is the L1 bidder and the said assurance of the 1st respondent is reflected in the letter of the petitioner dated 16-11-2001, which had not been denied. It is further stated that the petitioner filed WP No. 23782/2001 seeking the relief of a writ of mandamus declaring the action of the respondents in calling for negotiations to finalisation of the tender No. 242/SCERT/Computer Cell/ D5/2001 as illegal, arbitrary and the same is violative of the terms and conditions of the tender document and principles of natural justice without considering the representation dated 19-10-2001 with reference to No. TSI/Let/ 878 of the petitioner-Company. It stated that Notice Before Admission was ordered on 26-10-2001 and the 1st respondent filed a counter-affidavit which was served on the Counsel for the writ petitioner on 27-11-2001 wherein it was stated that a decision was taken by State Level Committee to treat the 3rd respondent as the lowest bidder and a copy of the minutes of the meeting of the State Level Committee was enclosed to the counter-affidavit. A reading of the minutes of the meeting would clearly indicate that a final decision has been taken to treat the 3rd respondent as L1 ignoring the tender conditions and also contrary to the recommendations of the State Level Committee as reflected in the minutes which reads : "the prices quoted before taxes will be taken into account for comparison of bids". Since the 3rd respondent had not quoted his price before taxes and hence the comparison of the price quoted by the petitioner with the price of 3rd respondent does not arise at all. It further stated that while considering the bids by State or its instrumentalities, the bid conditions shall not be deviated and must be strictly adhered to and if the 1st respondent had followed the said principle, the bid of the 3rd respondent should have been rejected without any consideration as was done in the case of NIIT who had bid for Group-E without mentioning the price of Category-F, however, giving the total price. It is further stated that the action of the 1st respondent is obviously intended to benefit the 3rd respondent and the same is clear from the fact that the bid of NIIT was rejected on a technical ground on which a clarification could have been obtained from the said Company, while the bid of the 3rd respondent was considered deviating from the bid conditions. This obviously would result in undue favour being conferred on the 3rd respondent by relaxing the bid conditions and hence the said action is arbitrary, illegal and it is also stated that the petitioner is advised to file a fresh writ petition in view of the contentions raised in the counter-affidavit in the prior writ petition and in view of the limited relief prayed for in the prior writ petition.
4. The 1st respondent had filed a counter-affidavit with the following allegations. It was stated that there are no grounds warranting interference under Article 226 of the Constitution of India and the allegations are denied except those specifically admitted in the counter-affidavit. It was further averred in the counter-affidavit that a tender was called by the Director of School Education, vide Tender Notice No. 242/SCERT/Computer Cell/DS/2001, dated 16-6-2001 for leasing of computer hardware and software and connected accessories and provision of computer education in 1000 Government schools through out the State of Andlira Pradesh. For this purpose the 23 Districts are divided into 8 different groups from A to H. Each bidder has to file a separate bid for each group. The petitioner, M/s. Tera Software Limited have filed their bid for Group-G. As per the original tender document, Clause 8(a) reads as." All particulars must be furnished as asked for in the prescribed technical and commercial bid in the bid document", which is general condition. Also the Clause 17(b) of the original bid document which reads as "Tenders with incomplete information are liable for rejection", is also a general condition mentioned in all bid documents so that the bidders furnish complete information in the bid documents. In this connection, it may be stated that any information not furnished in the bid, which is fatal for evaluation of bids and not curable is considered as sufficient ground for rejection of bids. For example, M/s. NIIT, a bidder in Group-E, has not quoted the prices at all for Category-F, hence, their bid was not considered for this group. Generally, non-submission of any information which is not fatal for the evaluation of the tender process and which can be inferred from the information available in the bid submitted by the bidder or which can be obtained from the bidder separately and deficiency of such information is relaxed and the bid is considered for evaluation. In the original tender document, the commercial bid format given at page 60 of the tender document, was for furnishing the 'Lease rental for computer hardware, software and accessories including installation, testing and commissioning (Co.1) (Excluding Sales tax, if any)' and 'Service fee for provision of computer education (Excluding sales tax, if any) (Col.2)'. Below the format a note was affixed stating that 'For the purpose of tender evaluation, rate quoted (i.e., Total of col. 1 and col.2 alone shall be reckoned.' Subsequently, as averred by the petitioner, the original bid document was amended after discussions with the bidders held during the pre-bid conference held on 9-7-2001 and the commercial bid format was modified and a new format was furnished in the amended document (Annexure II) as shown below:
Price Tender Form Table-I Type of school Category Half yearly instalments per unit No. of units Total half years instalments Without tax with tax Without tax with tax Day Schools A Above 400 Students B 250-400 Students C Below 250 Resi-dential School D Above 400 Students E 200-400 Students F Below 200 Students Grand total in figures Grand total in words In the revised format, there is no mention of the Clause stating that 'For the purpose of tender evaluation, rate quoted (i.e., Total of Col. 1 and Col.2 alone shall be reckoned'. It was further clarified in the amended document that 'In the event of any contradiction between the clarification/ amendments the original bid document issued to the bidder, the provision in the clarification/amendment shall prevail.' Hence, the amended commercial bid format prevails over the old commercial bid format.
5. The idea of separating basic cost and taxes etc., was to identify the quantum of tax proposed by bidder and to see whether it is correctly indicated or not as per the rules and regulations of taxation. It is submitted that in Group-G, total four bidders have filed the bids viz., M/s. APTECH, NIIT, Pioneer Online and M/s. Tera Software Limited (the petitioner). The prices quoted by these bidders in this Group are as follows:
Without Taxes With taxes M/s. APTECH Not furnished 3,59.99,150/-
M/S. NIIT 3,75,89,470/-
4,23,42,495/-
M/s. Pioneer 4.63,97,794/-
4,87,17,732/-
M/s. Tera Software 3,46,70,551/-
3,64,56,085/-
The bifurcation of prices without taxes and with taxes has been asked in the tender mainly to know the tax percentage quoted by various bidders and to see if taxes have been calculated correctly as per the rules of Taxation. The representation dated 19-10-2001 was examined and discussed by the State Level Committee constituted for the purpose of finalisation of tenders in the meeting held on 13-11-2001. The committee was of the view that any information not furnished in the bid, which can be collected/inferred from the contents of the bid, can be collected and the bid can be evaluated. Generally, in such cases, the deficiency in information is loaded against the bidder concerned in such a way that the same shall be most disadvantageous to the bidder. The committee after examination of the representation dated 19-10-2001 received from the petitioner, decided that the tender of M/s. APTECH, who quoted their price with taxes, may be evaluated by subtracting the lowest percentage of tax quoted in Group-G i.e., 5.0% to arrive at the price before taxes. After this exercise was done, the prices quoted in Group-G, before taxes, is arrived at as follows:
Without Taxes With taxes M/s. APTECH 3,42,894,05/-
3,59,99,150/-
M/s. NIIT 3.75,89,470/-
4,23,42,495/-
M/s. Pioneer 4,63.97,794/-
4,87,17,732/-
M/s. Tera Software 3,46,70,551/-
3,64,56,085/-
Therefore, as can be seen from the above, after subtracting 5.0% taxes i.e., the lowest percentage of taxes quoted among the bidders in Group-G, from the price quoted by M/s. APTECH with taxes i. e., Rs. 3,59,99,150/-, the price before taxes comes to Rs. 3,42, 84,905/-, which is still the lowest in Group-G, before taxes. The difference between M/s. APTECH and M/s. Tera Software (before tax) is of Rs. 3.85 lakhs for 6 months. And the difference between APTECH over Tera Software with taxes (out flow of funds) over entire contract period of 5 years is Rs. 45.69 lakhs. Hence, the committee decided to call M/s. APTECH, lowest in the group before taxes and after taxes, for further discussions/ negotiations for Group-G. It is factually incorrect to state that the 1st respondent herein had given any assurance to the petitioner regarding the procedure to be adopted for evaluation of tender submitted by M/s. APTECH, the 3rd respondent. No such assurance was given to the petitioner by the 1st respondent. The State Level Committee, which met on 13-11-2001, had examined the representation of the petitioner and recommended on the procedure to be followed in evaluation of the bid of the 3rd respondent, for Group-G and also recommended that the 3rd respondent herein stands L1, as far as comparison of prices with taxes and without taxes (after deducting the lowest percentage of taxes quoted in Group-G), is concerned and to call the 3rd respondent for further discussions/ negotiations.
6. It is erroneous to say that bid conditions were deviated in considering the bid of the 3rd respondent. The case of M/s. NIIT referred to by the petitioner pertains to non-submission of prices for one of the categories in Group-E i.e., Category-F, which is a material deviation, hence their bid was not considered for that group. Whereas, the bid of 3rd respondent was considered for the reason that they have given prices of all categories in Group-G and their bid is complete in all respects except for the break-up of 'prices without taxes' and 'prices with taxes'. Ultimately, the contract(s) will be awarded on the basis of the group total with taxes only. The break-up of prices without taxes and with taxes was asked in the bid primarily to ascertain the rate of taxes taken into account by each bidder, hence not considered by the committee to be a material deviation. It is incorrect to say that the action of the 1st respondent has resulted in conferring any undue favour to the 3rd respondent. The 3rd respondent is clearly L1 in Group Total of Group-G i.e., Rs. 3,59,99,150/- on the basis of which the committee decided to conduct further discussions/negotiations, which is Rs. 4.56 lakhs higher for the half-yearly payment and will result in a loss of Rs. 45.69 lakhs to Government Exchequer over the entire contract period of 5 years. It is submitted that the petitioner has not referred to all the relevant clauses contained in the tender document. The following are some of the relevant clauses contained in the tender documents. The tender notice empowers the department to amend or cancel the tender without assigning any notice or reasons. The petitioners having agreed to all the terms and conditions of the tender, now cannot contend that the department has unilaterally taken action to consider the case of the third respondent. It is submitted that Chapter 7 of the Tender details prescribed the eligibility criteria to be fulfilled by all the tenderers. It is not the case of the petitioner that the respondent No. 3 has not fulfilled the eligibility criteria prescribed by the department. If the respondent No. 3 has failed to fulfil these eligibility criteria, certainly the department will not entertain tender submitted by the third respondent. These are the essential conditions contained in the said clauses. Apart from that the other information which sought to be required by the department are not so essentials to disqualify the tender of the third respondent, such as by not quoting the rate of tax separately. Clause 4(c) of the General Terms and Conditions also speaks that the commercial bid as prescribed should be filled in original for consolidated rate per school per 5 years contract period. The bid must be unconditional and in the format given in the tender document. The petitioner has filed his tender with condition stating that tax quoted by him are variable as per the Government notifications. Hence, the tax as applicable from time to time will be charged. This is the conditional offer and on that ground alone the tender submitted by the petitioner is liable to be rejected. From the above terms and conditions of the bid documents, the commercial bid is only for consolidated rate and not to be bifurcated such as with tax, without tax. It is submitted that the information which determine clauses from the tender about the tax and without tax is only for the purpose of knowing the percentage of tax i.e., to be collected by the various State Governments. It has no relevance in awarding the contract to any particular tenderer. The department is concerned only with the total figure including the tax. The contract has to be awarded to the lowest tenderer whose quotation refers including the tax etc. It is for the contractor or to the Government and this department is concerned with the consolidated figure. Hence even if any tenderer fails to quote rate of tax, it will not vitiate his tender, tender document and if he fulfils all other relevant criteria prescribed by the department, his tender will be considered, if it is lowest one and in the interests of the department. The entire contentions of the petitioner that the department has deviated from its own prescribed formats by it, the third respondent has not filled the columns of without tax as per the terms and conditions of the tender and tender document and the same is liable to be rejected etc., are untenable and it does not stand to the legal scrutiny. It is submitted that the third respondent has completed his bid document by giving all relevant information and in Envelop-B i.e., commercial bid document, he has quoted the total figure, which includes the tax. As already submitted this department has is concerned about the total figure quoted by the tenderer and it has no relevance, ultimately to come to the conclusion if the taxation rate is not quoted. While mere non-quoting of taxation amount, it will not have fatal effect. Admittedly, the total figure quoted by the petitioner is more than the figure quoted by the 3rd respondent and the department will be benefited by more than 45 lakhs for a period of 5 years on the basis of the rates quoted by the 3rd respondent. There is no prejudice caused to the petitioner and the deviation which is permissible by the subsequent amendments and the petitioner was aware about the change in the proforma. The original commercial bid document proforma i.e., Envelope-B also did not contain the rates of sales tax. The note beneath it includes that for the purpose of tender evaluation, the total col. 1 and 2 alone shall be reckoned. Thus the intention of the department is very clear that the total amount of all the columns will be alone taken into consideration, but not the individual columns. Subsequently, the said Envelope-B of the commercial bid document was amended with a different proforma, which speaks that the tenderer has to quote the rates without tax and with tax. Even assuming that if any tenderer fails to quote the column of without tax and gives the figure with tax, the ultimate decision will be taken only on basis of that the tax goes. The department is no way concerned with the payment of the tax and it is for the contractor to pay any tax etc. Thus the Government has to see what is total rate of contract and if the tenderer quotes lowest rate, the Government will further negotiate with him. It is submitted that Clause 7(a) of the general terms and conditions and Chapter 3 which is equal to Clause 8(a) of general Terms and Conditions of Technical bid speaks that all the particulars must be furnished as asked for in the Technical bid in the bid document. The 3rd respondent has furnished all the particulars and he has further stated that the rate quoted by him is inclusive of all taxes. Clause 8(a), clearly states that the tenderers have to quote a rate both in words and figures and it is not the case of the petitioner that the 3rd respondent has not quoted the rate clearly. With regard to the rejection of the tender, Clause 8(d) clearly says that special information as required by the technical bid must be furnished. Hence the bid is liable to be rejected. The said Clause will apply only for a technical bid, but not for commercial bid.
7. It is submitted that because of nonquoting of tax of by the 3rd respondent, it will not vitiate the commercial bid submitted by him and it will not give any right in favour of the' petitioner. The department can infer and can cover the rate of tax which are prevailing in various States. It is submitted that Chapter 6, prescribes the format of the contract and term No. 2 of the said contact requires the total consolidated amount to be quoted and that the rate is confirmed and is not subject to any enhancement. Term No. 3 is important and clearly indicates the intention of the department. It speaks as follows:
"Rate for the contract period as detailed in this contract includes excise duty as well as tax, service tax, surcharges, freight etc"
Condition No. 17(b) which says that the tenders with incomplete information are liable to be rejected. The said condition is general one and it will have not bearing on the commercial bid i.e., Envelope-B format to be filled by the tenderer. Condition No. 19 of the General Terms and Conditions, empowers the contractor to negotiate for further reduction of the rates. Basing upon the said terms and conditions, this respondent has called the 3rd respondent for further negotiations and there is no illegality or irregularity. The petitioner has not pleaded any mala fides or attributed any favouritism by the Department in favour of the 3rd respondent, which are essential in the tender/contract cases. In the absence of any mala fides or illegalities, or irregularities and when there was no prejudice caused to the petitioner, this Hon'ble Court may not interfere with the decision taken by this respondent which is in accordance with law.
8. The 3rd respondent also filed a counter-affidavit stating that the petitioner has no locus standi to file the writ petition. It is stated that admittedly the petitioner participated in the tender process as a consortium of Companies to satisfy the eligibility criterion as per general terms and conditions of the bid agreement which among other things prescribes that the bidder should have (a) at least 3 years experience in delivering computer education, (b) trained at least 2,500 students, (c) at least 10 training centers in the State, (d) at least 50 instructors under their control holding educational qualifications in Computer Science from any recognized University or Institutions and (e) required financial resources to undertake the contract. It is stated that the writ petitioner alone does not satisfy the eligibility criteria and for the said purpose have formed a consortium of Companies consisting of the writ petitioner, M/s. Everonn India Limited, Gemini Communications Limited and SISICMTES. When the tender is submitted on behalf of the consortium, this petitioner alone is not competent to file this WP as if it had submitted individual bid in respect of the tender notice which is the subject-matter of the writ petition and hence the writ petition is liable to be dismissed for non-joinder of necessary parties. It is also further stated that without prejudice to the said Contention it is respectably submitted that as per Condition No. 28 of the Special Terms and conditions and information to bidders, the bidder shall sign with the seal on every page of the tender document. Subsequently when amendments and clarifications were issued to the bid pursuant to the pre-bid conference held on 9-7-2001, a note was appended under the heading "important note" stating that the bidder should sign and put office seal on all pages of amendments/ clarifications and the said condition is essential condition to be fulfilled for consideration of the bid. It is reliably learnt that the petitioner did not subscribe signature and the seal on each page of the bid document and as such the tender is liable to be rejected in limini for not complying with necessary tender conditions and thus the petitioner who has filed an invalid bid has no locus standi to file the present writ petition. It was also further stated that this writ petition is premature. Admittedly the tender process is in mid way and the tender is yet to be awarded in favour of the successful bidder. It is also open to the respondents 1 and 2 either to go ahead with the process of finalisation or it may resort to other actions as is permissible in law. The petitioner is not entitled to invoke the remedy of judicial review under Article 226 of the Constitution of India at the intermediary stage of evaluation and thus the writ petition is liable to be rejected in limini as the condition requisite for such review are not available at this stage. It is submitted that as per Condition 5 of Chapter IV, (Special Terms and Conditions to the Bid) the bidder is obligated to quote the rate for 5 years contract period and further the tenderer is obligated to submit a declaration stating that the commercial bid was submitted without any conditions. This respondent learnt and believe the same to be true that the writ petitioner had quoted its price with a rider that the subsequent increase in taxes is to account of the respondents 1 and 2. This is contrary to the terms of the Bid Document and amounts to a conditional bid and is liable to be rejected. It is further submitted that the 3rd respondent is a Company incorporated under the provisions of the Companies Act in the year 1986. The 3rd respondent Company is a pioneer in imparting computer education in India and also abroad and it had 2350 Computer Education Centres spread over 40 countries across the Globe. The 3rd respondent company trained about 20 lakh students in computer education and is the first company in Asia to obtain Certification of ISO 9001 for education support services. The 3rd respondent Company executed similar projects of providing computer education in Government Schools in the State of Gujarat and is executing similar projects in the States of Tamilnadu and Karnataka. in fact the 3rd respondent-Company is executing the pilot project of providing computer education in 23 identified schools, one in each of the Districts of the Andhra Pradesh pursuant to which the present tender notification was issued to provide such facilities in other Government Schools in the State of Andhra Pradesh. The 3rd respondent is providing computer education to its employees and it has trained about 10,000 State Government employees. The 3rd respondent company's total turnover is of Rs. 577 crores during the financial year 2000-2001 and the turnover relating to the computer education is about Rs. 352 crores which demonstrates that the 3rd respondent is a company primarily engaged in imparting computer education and is not a company set-up for the purpose of participating in the tender, like any other consortium companies which work together for the purpose of executing a contract.
9. In paragraphs 5 to 14 of the counter-affidavit of the 3rd respondent also several other facts had been narrated in detail. It is stated that it is suffice to state all tenders were called with an avowed object of imparting computer education at school level with a view to equip the students in computer education and the said object cannot be defeated by resorting to technicalities as is sought to be projected by the writ petitioner. It is further stated that Clause 8(a) of the bid document states that all the particulars shall be furnished as asked in technical and commercial bid documents and similarly Clause 17(b) speaks of rejection of tender documents with incomplete information. It is also true that commercial price of the bid form was amended after the pre-bid conference wherein the columns have been provided. It is evident from a reading of the bid document that the tender was for the purpose of providing computer education to the students and for the said purpose, the bid should be a rate contract and lease by way of delivery of computer hardware, software, accessories, installation, maintenance of hardware and software and provide computer training to the students and teachers by employing the computer professionals. There is no element of sale involved, but in is only placing of equipment and providing education with the instructors. Thus there is no element of tax involved as such in the transaction. Viewed in the said angle, the columns providing for the tenderer to specify the bid amount with taxes is redundant and it is the ultimate bid together with taxes that is the basis for evaluation of tender and this is evident from the form of contract which has to be executed by the bidder who was awarded the contract which also forms part of the bid document. Thus there is no obligation on the bidder to specify the bid amount with taxes and without taxes, since there is no element of tax involved and unless it is shown that the transaction involves a tax component, it cannot be inferred and further it is clear from the tender document that the bid should be a consolidated bid inclusive of all charges and in view of the fact that the bid as a composite bid, what is required is the bid amount for determination as to which of the bidder is the lowest. Thus reference to sales-tax is irrelevant. Assuming that the tenderer shall quote the price with taxes and without taxes, it will not in any way invalidate the bid as the said columns are not meant for evaluation purpose, but are only to know the claims of tax by the participating bidders and hence it is not an essential condition as is sought to be projected by the writ petitioner. It is also further stated that the respondent-Company had quoted the bid amount which is inclusive of all taxes and other levies and it is the lowest. It is further stated that it is only the total cost obtained pursuant to the bids that is determinative of the lowest bid and the contention that the difference between the petitioner and the 3rd respondent after taxes is Rs. 5 lakhs and odd is incorrect and over the contract period the difference works out to Rs. 45.69 lakhs. It is further stated that there is no deviation from any of the bid conditions and the bid of the 3rd respondent is strictly in accordance with the bid terms. The 3rd respondent did not amend its bid to detriment of other bidders and had submitted all the information that is required for evaluation of the bid and since there is no obligation of payment of taxes separately, the 3rd respondent had submitted the comprehensive and composite bid and it would be deemed as inclusive bid and the contentions of the petitioner contra are liable to be rejected, The analogy sought to be drawn by making reference to the bid of NIIT is totally without any substance for the reason that NIIT did not quote any amount in its bid and in such circumstances the said tender was rejected. There cannot be any comparison between the case of NIIT and the 3rd respondent. It is further stated that the petitioner had not stated whether it had withdrawn the earlier case or not and similarly it is not stated whether such withdrawal was with liberty to file a fresh writ petition and the petitioner is called upon to satisfy that the present writ petition is not bad on the principles of res judicata.
10. After counter-affidavits are filed by the respective parties, reply affidavits also were filed wherein the stand taken in the main affidavit in support of the writ petition had been repeated and reiterated and it was specifically stated that the bid document specifically requires every bidder to quote the price with and without tax separately in separate columns meant for the same and the said format was introduced by the 1st and the 2nd respondents by way of amendments to the bid conditions after the pre-bid conference. Hence it is not open to the 1st respondent to contend that it can consider a bid submitted by a bidder even without such information and it is relevant to note that no right is reserved in the employer i.e., the 1st respondent to relax the bid conditions or to seek information, which is not furnished by a bidder, which ought to have been done by it and further even assuming that the 1st respondent has such an inherent right, no such information was sought from the 3rd respondent and the tax component of the price quoted by the 3rd respondent is sought to be arrived at on some ad hoc basis for which there are no rules or guidelines in the bid document. It was further stated that it is an admitted fact that for various groups included in the tender a number of bids have been received and each bidder has quoted its own percentage as the tax component of the price varies from 1.5 to 11.5% and it shows that each bidder had calculated the tax component separately depending on various factors and perceptions and there is no uniformity and in such a case, the 1st respondent cannot contend that it will take the lowest tax component in the bids received for Group-G and give the benefit of deduction in the price quoted by the 3rd respondent. It was also stated that it is not stated that in the counter-affidavit filed by respondents 1 and 2 as to how the said objective is achieved by the action of the 1 st respondent in giving a deduction of a particular percentage of tax to the price quoted by the 3rd respondent and such an objective could have been achieved if there were to be uniform tax structure for all the components through out the country and that precisely is the reason as to why the different bidders have quoted different percentage as the tax components of the prices offered by them. It is further stated that the contention of the 1st respondent that the quoting of prices with taxes and without taxes is not an essential condition in the bid document and the bid document is absolutely erroneous and the said condition was incorporated and a separate format was prescribed after a pre-bid conference and the same indicates that the 1st respondent thought that furnishing of such information by the bidders is essential for evaluation of their bids and it was also stated that when certain conditions had been specified in the bid document there cannot be any deviation at all and hence the tender of the 3rd respondent should have been rejected on that ground. It was also specifically stated that the petitioner had purchased the bid document in its name and had bid for the work in its name though on behalf of consortium of companies and formation of consortium is permitted under the bid conditions and hence the writ petition is maintainable. The allegation that the petitioner had not signed and affixed its seal on each page of the bid document also is denied. At any rate the bid of the petitioner is considered as valid by the employer and hence it is not open to the 3rd respondent to take such a plea and the further contention that the writ petition is premature also is untenable. It is further stated that the offer made by the petitioner would not amount to a conditional offer and the bid cannot be rejected on such a ground and at any rate the bid of the petitioner had not been rejected and had been considered and hence the said plea cannot be taken by the 3rd respondent. It is further stated that once the petitioner is found technically qualified after its technical bid is evaluated it becomes irrelevant whether the petitioner in order to qualify itself is participating as a consortium or what is the turn-over of the petitioner or the 3rd respondent and all the bids of the technically qualified bidders shall be evaluated in terms of the bid conditions alone and all other criteria are totally irrelevant. It is further stated that if the 3rd respondent is of the opinion that there is no element of tax involved in the transaction it should have stated so in the bid document. If the bid of the 3rd respondent is taken into consideration and if no deduction is given to the taxes, the bid of the petitioner will be the lowest and the petitioner is entitled to be called for negotiations. It is not for the 3rd respondent to state whether the bidder is obligated to specify the bid amount with or without taxes inasmuch as the bid document requires that each bidder shall quote the price with and without taxes separately and specific columns are provided for the said purpose and it is relevant to not that the amendments to the bid documents were issued specifically incorporating the said provision and separate columns were also provided to enable the bidders to furnish relevant information after a pre-bid conference and this itself indicates that it was mandatory on the part of every bidder to give the necessary information and quote their price with and without taxes. All other allegations made in the counter-affidavit of the 3rd respondent also had been denied specifically taking a stand that in the facts and circumstances of the case, the very tender of the 3rd respondent is liable to be rejected for non-compliance of the mandatory provisions.
11. Heard Sri C.V. Mohan Reddy, the learned Counsel representing the writ petitioner and Sri Srinivas, the learned Government Pleader for School Education and also Sri B. Adinarayana Rao, the learned Counsel representing the 3rd respondent and perused the respective pleadings of the parties and also the material available on record. The learned Counsel for the writ petitioner Sri C. V. Mohan Reddy at the outset had submitted that WP No. 23782 of 2001 had been already withdrawn. The learned Counsel also had taken me through the affidavit filed in support of the writ petition, the counter-affidavits filed by the respective parties and also the reply affidavits filed by him in this regard. The learned Counsel also had drawn my attention to the minutes dated 13-11-2001 and also Condition No. 8(a) of the Technical Bid (Envelope-A), the general tender terms and conditions and also Condition No. 17(b). The learned Counsel had drawn my attention in Condition No. 29 and the special terms and conditions and information to the bidder. The learned Counsel also had drawn my attention to the commercial bid (Envelope-B), Price Tender Form to be returned in original along with tender and also the columns specified therein and the note appended thereto which is prior to the amendment and also the said Commercial bid (Envelope-B) Price Tender Form to be returned to original along with the tender subsequent to the amendment and also the columns provided therein. It was further submitted that the 3rd respondent had not quoted the column 'without tax' and the same being mandatory, the tender of the 3rd respondent is liable to be rejected on this ground since incomplete information was furnished by the 3rd respondent. The learned Counsel also had pointed out the stand taken that no element of tax is involved, cannot be accepted. The learned Counsel also had drawn my attention to different portions of the counter-affidavits filed by the 1st respondent. The learned Counsel further submitted that inasmuch as these conditions are mandatory in nature, the omission on the part of the tenderer to fill up such a column should necessarily result in the rejection of the tender form and calling such a party to negotiations is illegal and unsustainable. The learned Counsel further contended that the tenderers and the authorities are bound by the terms and conditions and a bid not in accordance with the bid conditions cannot be accepted at all and any infraction or violation of any such conditions should necessarily result in rejection of the tender and calling such a party for negotiations will definitely be arbitrary action hit by Article 14 of the Constitution of India and also a matter involving illegality in the decision making process which is definitely amenable to judicial review under Article 226 of the Constitution of India. The learned Counsel had pointed out that the object and purpose of introducing such columns is clear which will definitely point towards the mandatory nature of the conditions. The learned Counsel further submitted that the consortium of Companies will be only for technical qualifications but since the writ petitioner is a legal entity, which had presented the tender form, the writ petitioner can definitely maintain the writ petition and this objection is totally unsustainble. The learned Counsel also made elaborate submissions on the expressions "may" and "shall" and the interpretation thereof and contended that essential conditions had been violated in the present case and the fact that this is an essential condition is also amply supported by the Price Tender Form, Table-II whereunder under Categories, D, E, F etc., in column No. 2 Taxes and other levies had been specified. Thus, notwithstanding the consolidated amount, the omission on the part of the 3rd respondent to fill up the column 'without tax' must result in rejection of the tender form. The learned Counsel also had contended that with a view to help the 3rd respondent tin's arbitrary action had been perpetrated which can be taken as malice in law. The learned Counsel also had placed strong reliance on Tata Cellular v. Union of India, , W.B. State Electricity Board v. Patel Engineering Company, (2001) 2 SCC 451.
12. Sri Srinivas, the learned Government Pleader for School Education while making elaborate submissions had taken me into the details how the contract had been divided into eight groups and the participation of tenderers in relation to Group-G and all other factual aspects relating thereto. The learned Counsel had maintained that in the facts and circumstances of the case, the non-quoting of the column 'without tax' cannot be considered to be mandatory since it is not an essential condition. The learned Counsel also had pointed out that the condition specifying liable for rejection is a general condition and the department may reject a tender only when it feels that without essential particulars a tender was filed and the column 'without tax' will not go to the root of the matter and hence it cannot be said to be an essential condition and hence taking all the facts into consideration, including the fact that the bid document of the 3rd respondent was the lowest tender, the authorities had rightly called for negotiations in this regard. The learned Counsel also would maintain that the department is not paying sales-tax or other levies and the column 'without tax' had been introduced only for limited purpose of having further negotiations and the total amount quoted by any of the tenderer, if it is found to be less, he will be treated as L1 and in the light of the same and inasmuch as the department is concerned with the total contract rate only, the column 'without tax' will definitely fall into insignificance. The learned Counsel also had drawn my attention to the eligibility criteria, condition Nos.4(c), 7(a), 7(d) and 9 and also the agreement and had pointed out condition Nos. 5,9 and 29 and also the formats prior to amendment and subsequent thereto and had contended that Clause 29 is of no avail in view of the deletion of note in the subsequent amended format. The learned Counsel also had stressed on the expression "consolidated rate" and had contended that the Government is more concerned with the consolidated figure and further it being a commercial transaction, the Government is more interested in taking several facts into consideration, including the financial advantage or disadvantage. The learned Counsel also had contended that what is complained is the breach of a term or a condition by an omission on the part of the 3rd respondent and not a case of mala fides or favoritism. Hence it cannot be said that the action of the authorities is either arbitrary or unreasonable so as to fall within the parameters of judicial review under Article 226 of the Constitution of India. Even otherwise, the learned Counsel would maintain that in matters of this nature, unless public interest is involved, normally the Court should decline to interfere and further no prejudice is caused to the writ petitioner. The learned Counsel also had placed reliance on Bajaj Electricals Limited v. State of A.P., , Srinivasa Constructions Limited. Hyderabad v. Bharat Heavy Electricals Limited, New Delhi and Ors. , centre for Public Interest Litigation and another v. Union of India and Ors. , Monarch Infrastructure (P) Limited v. Commissioner, Ulhasnagar Municipal Corporation and Ors. , Raunaq International Limited v. IVR Construction Limited and Ors. .
13. Sri B. Adinarayana Rao, the learned Counsel representing the 3rd respondent had submitted that the tender is at the intermediary stage and even the lowest tenderer also can be rejected and in this view of the matter, the mere fact that the 3rd respondent is called for negotiations will not give any right on the part of the writ petitioner to maintain the present writ petition and it is definitely a premature one. The learned Counsel further submitted that it is not doubt true that a consortium can file tender since the writ petitioner as such does not satisfy the eligibility, but however all the persons of the consortium should join the writ petition, being aggrieved of the action and the collective right of the consortium of Companies cannot be agitated by one of them and in this view of the matter, the writ petition is bad for non-joinder of necessary parties as petitioners and is liable to be dismissed on this ground alone. The learned Counsel further contended that the bid of the petitioner itself is a conditional bid and further had pointed out the non-compliance of several essential conditions even by the writ petitioner. The learned Counsel also had contended that the omission on the part of the 3rd respondent in filling up the column 'without tax' cannot be said to be an infraction of any mandatory or essential condition and Condition No. 29 at the best may apply to the format prior to the amendment and not subsequent to the amendment. The learned Counsel also would further contend that the tender document has to be read as a whole and the consolidated figure alone is relevant and hence the column relating to 'without tax' will not be very relevant except for the purpose of further negotiations. The learned Counsel also had taken me in detail through several portions of the counter-affidavit of the 1st respondent, in particular, paragraph 7. It was also further contended that when a dispute of this nature has to be decided by the Court, what is to be looked into primarily is the concept of reasonableness or unreasonableness and in matters of these commercial contracts unless an element of public interest is involved and unless it is totally an arbitrary action or unreasonable one in the standard of an ordinary, reasonable and prudent man, the Court should be very slow and must be reluctant to interfere with such matters. It was further submitted that in the realm of commercial contracts vis-a-vis the State action, the scope and ambit of judicial review is very limited to the extent of seeing the legality or illegality of the decision making process and nothing more. It was further submitted that in the light of the facts and circumstances, absolutely there is no arbitrariness or unreasonableness in calling the 3rd respondent for further negotiations and hence in any view of the matter, the writ petitioner is not entitled to any of the reliefs prayed for. The learned Counsel also had placed strong reliance on the decision (7) referred supra and also AIR India Limited v. Cochin International Airport Limited, , in this regard.
14. The factual matrix is simple and plain though the respective pleadings of the parties are very elaborate, narrating several details. The Counsel representing the writ petitioner and also the 3rd respondent had advanced elaborate arguments on the aspect of maintainability of the writ petition by the writ petitioner - one of the persons of the consortium. It appears that the consortium of Companies is for the purpose of satisfying eligibility criterion relating to the technical qualifications and inasmuch as the 1st respondent was satisfied with the compliance of the eligibility criterion, the tender submitted by the writ petitioner also was taken into consideration. The writ petitioner is aggrieved of the action of the respondents 1 and 2 in calling the 3rd respondent for negotiations instead of rejecting the tender for non-compliance of certain alleged necessary and essential conditions. It is no doubt true that all the Companies of the consortium are not impleaded as parties and the writ petition is filed by the Company which had submitted the tender form. According to the writ petitioner Company, which had submitted the tender form after fulfilling all the conditions and furnishing all the particulars, it had been deprived of the opportunity by the action of the 1st respondent who had called the 3rd respondent for negotiations who had not furnished the complete particulars which are mandatory in nature and which according to the writ petitioner, must necessarily result in the very rejection of the said tender. In the light of the respective contentions of the parties, it is to be seen whether the writ petition as framed by an individual Company, a member of the consortium, can be maintained.
15. In Law of Writs, 2nd edition, by me, while dealing with the aspect of locus standi at page 3291 had stated:
"The term "locus standi" can be understood as legal capacity to challenge an act, an order or a decision. This is one of the most vexed questions of administrative law. Where a party who has no locus standi files a petition, it need not be heard on merits. The concept of "locus standi" is being liberalised and the scope of the concept is being expanded day to day".
If the march of law on the concept of locus standi and the maintainability of the writ petition, of the recent times is carefully observed, the traditional view has been well liberalised. In the Discipline of Law, Lord Denning had recorded his view in the following terms:
"in administrative law the question of locus standi is the most vexed question of all. I must confess that whenever an ordinary citizen comes to the Court of appeal and complains that this or that Government Department or this or that legal authority or this or that Trade Union is abusing or misusing its power I always like to hear what he has to say."
In Vinoy Kumar v. State of U.P., , the Apex Court observed:
"Generally speaking, a person shall have no locus standi to file a writ petition if he is not personally affected by the impugned order or his persona! rights have neither been directly or substantially invaded nor is there any imminent danger of such rights being invaded or his acquired interests have been violated ignoring the applicable rules. The relief under Article 226 of the Constitution is based on the existence of a right in favour of the person invoking the jurisdiction. The exception to the general rule is only in cases where the writ applied for is a writ of habeas-corpus or quo warranto or filed in public interest. It is a matter of prudence, that the Court confines the exercise of writ jurisdiction to cases where legal wrong or legal injuries caused to a particular person or his fundamental rights are violated, and not to entertain cases of individual wrong or injury at the instance of third party where there is effective legal aid organisation which can take care of such cases."
When a person is aggrieved of an action and complains of the infringement of a legal right or fundamental right, such a person definitely will fall within the meaning of aggrieved person so as to maintain a writ petition. In the present case, the writ petitioner is raising a question of the alleged arbitrary action on the part of the authorities in calling the 3rd respondent for negotiations despite the fact that the essential particulars which are mandatory had not been furnished in full by the 3rd respondent, the consequence of which should be the very rejection of the tender itself and in this view of the matter, it cannot be said that the writ petitioner is not an aggrieved person. It may be that the other Companies in the consortium also could have jointed as co-writ petitioners along with the writ petitioner, but however, on the mere non-impleading of such parties it cannot be said that the writ petition has to be thrown out at the threshold on this ground when a serious question had been raised by the writ petitioner relating to the infringement of his legal right to be called for negotiations in preference to the 3rd respondent whose tender is liable to be rejected, according to the writ petitioner Company, for non-compliance of certain mandatory conditions by omitting to fill up all the columns which the 3rd respondent is expected to do in law and also as per the terms and conditions of the tender and hence I have no hesitation in rejecting the contention of the 3rd respondent that the writ petition has to be thrown out only on this ground.
16. The other contention which had been advanced by the 3rd respondent is that even otherwise, the writ petition is premature and it is at the stage of calling for negotiations and merely because the 3rd respondent is called for negotiations that does not mean that ultimately the contract is going to be awarded to the 3rd respondent since the authorities are at liberty not to grant the contract even in favour of the 3rd respondent and in this view of the matter, the writ petition is premature. It is pertinent to note that the writ petitioner had questioned the action of the authorities in calling the 3rd respondent for negotiations and the said action is attacked on the ground that it is arbitrary, illegal, unreasonable and also violative of Article 14 of the Constitution of India. What is questioned in the present writ petition is the very decision making process in the course of which the main grievance of the writ petitioner is that the authorities instead of rejecting the tender of the 3rd respondent for non-filling the column 'without tax' had taken the same into consideration and had invited him for negotiations and this action of the authorities which forms part and parcel of the decision making process is arbitrary, illegal and unreasonable and hence the writ petitioner is not much concerned with the latter part of the decision which the authorities are likely to take at a future point of time and hence in the facts and circumstances of the case, it cannot be said that the writ petition at this stage is a premature one and hence I am inclined to reject the said contention raised by the 3rd respondent in this regard.
17. In the light of the view expressed by me above that the writ petitioner can maintain the writ petition, now I proceed to deal with the merits of the case. As already stated supra all the factual details had been well narrated in the respective pleadings which had been dealt with by me supra. The subject-matter of the present writ petition falls within, the realm of contract. The main grievance of the writ petitioner is that the 1st respondent should have rejected the bid of the 3rd respondent under Clause 8(a), read with Clause 17(b) and Clause 29 of the bid document and instead treating the 3rd respondent as L1 responsive bidder, vide tender Notice No. 242/SCERT/Computer CelI/D5/2001, dated 16-6-2001 as not legal and for a direction to the 1st respondent to consider the bid of the petitioner and treat the same as L1 and pass such other orders. Clause 8 deals with details to be furnished. Clause 8(a) of the general terms and conditions specifies that all particulars must be furnished as asked for in the prescribed technical and commercial bid in the bid document. Likewise, Clause 17 of the technical bid (Envelope-A) General terms and conditions, deals with acceptance and withdrawal and 17(b) specifies that tenders with incomplete information are liable for rejection. Clause 29 of the Special terms and conditions and information to the bidder, specifies as follows:
"Total of Col (1) and Col (2) in the Commercial bid (Price Tender Form) will alone be considered for the Commercial rate evaluation purposes."
The Commercial Bid (Envelope-B) Price Tender Form, prior to amendment, contains four columns and a notice appended stating that for the purpose of tender evaluation rate quoted (i.e., total of Col. (1) and Col. (2) alone shall be reckoned. In the changed format of the Commercial Bid (Envelope-B), Price Tender Form, after amendment, half yearly instalments per unit, without tax and with tax, are shown and the note appended in the original format which stood prior to amendment had been deleted and it was simply stated "As indicated in Price Tender Form, Table II" The main grievance of the writ petitioner is that at the time of opening of the commercial bids it was found that the 3rd respondent had not filled up the column 'without tax' both for unit as well as total half yearly instalments for all the units and this being mandatory, the 1st respondent should have rejected the tender instead of calling him for negotiations. According to the writ petitioner, these are all essential conditions, mandatory in nature and the furnishing of information is incomplete information and hence the bid of the 3rd respondent should have been rejected on that ground. When the petitioner came to know that the 1st respondent is considering the bid of the 3rd respondent, the petitioner sent a representation protesting against the same on 19-10-2001 followed by another letter dated 31-10-2001 and another letter on 16-11-2001 and also the Vice-President, Operations, of the petitioner-Company met the 1st respondent on 1-11-2001 and the 1st respondent informed him that while considering the bid of the 3rd respondent, the lowest of sales tax quoted by any one of the bidders for any one of the groups i.e., all groups, will be taken into consideration for calculating the price of the 3rd respondent and decide as to who is the L1 bidder. The writ petitioner in the affidavit had narrated several details to substantiate his contention that the omission on the part of the 3rd respondent to fill up the column 'without tax' is really serious and fatal which must result in the rejection of the tender as such. It is also no doubt stated that the action of the. 1st respondent is obviously intended to benefit the 3rd respondent and the same is clear form the fact that the bid of NIIT was rejected on a technical ground, but the bid of the 3rd respondent was considered deviating from the bid conditions. Of course, no specific mala fides had been alleged in this regard. At paragraph 4 of the counter-affidavit, the 1st respondent specifically stated that, for example M/s. NIIT, a bidder in Group-E, has not quoted the prices at all for Category-F, hence their bid was not considered for this group and generally non-submission of any information which is not fatal for the evaluation of the tender process and which can be inferred from the information available in the bid submitted by the bidder or which can be obtained from the bidder separately and deficiency of such information is relaxed and the bid is considered for evaluation. At paragraph 8 of the counter-affidavit, it was specifically stated that the representation dated 19-10-2001 was examined and discussed by the State Level-Committee constituted for the purpose of finalisation of tenders in the meeting held on 13-11-2001. It may be appropriate to extract the minutes of the meeting of the State Level Committee on introduction of computer education in 1000 schools held at 3-00 p.m., on 13-11-2001 at IT Conference Hall, A.P., Secretariat, Hyderabad, which are as follows:-
"At the outset, MD, APTS, appraised the committee on the opening of commercial bids of all the 9 bidders, who participated in the tender and the prices quoted by the respective bidders. The committee after perusal of the comparative statement of the prices quoted by the bidders, categorywise, group-wise, made the following recommendations:
1. The prices quoted before taxes will be taken into account for comparison of bids.
2. The lowest bidder in each group may be called and further negotiations may be held.
The committee also noted the representations received from M/s. Tera Software Limited dated 19-10-2001, 31-10-2001 and Lr. dated 19-10-2001 of M/s. Everonn India Limited, on the following issues:
(A) M/s. APTECH, who quoted for Group-G, has not furnished bifurcation of amount without taxes and with taxes as required in the bid.
(B) M/s. NIIT, has not mentioned the price for Category F in Group-E. The committee examined the above-mentioned representations and decided as follows:
(A) M/s. APTECH, who has quoted their price inclusive of taxes, is L1 among all bidders in the group. The committee decided that the lowest of the percentage of taxes (%) quoted by other bidders in the group, which will be most disadvantageous to M/s. APTECH, may be subtracted from the price quoted by M/s. APTECH and comparison may be made. Accordingly, after subtracting the lowest % of the taxes quoted in the group i.e., 5.0% quoted by M/s. Pioneer Online Limited, from the total price quoted by M/s. APTECH, the net price without taxes comes to Rs,3,42,849,05/-. The committee noted that after this exercise also, M/s. APTECH remains L1 in Group-G at a total price of Rs. 3,42,84,905/-. Hence, the committee decided that M/s. APTECH, may be called for further negotiations in Group-G. (B) The bid of M/s. NIIT, who has not furnished the price under Category-F in Group-E, may be rejected for that group.
Even from the minutes of the meeting it is clear that the reason for rejecting the bid of M/s. NIIT had been well explained and hence the rejection of the bid of M/s. NIIT cannot be rejected as a serious ground for the purpose of substantiating the contention of the writ petitioner that the bid of the 3rd respondent also should have been rejected by the 1st respondent since they do not stand on the same footing. It is pertinent to note that Clause 4(c) of the General Terms and Conditions specifies that the commercial bid as prescribed should be filled in original for consolidated rate per school for 5 years contract period and the bid must be unconditional and in the format given in the tender document and the petitioner has filed his tender with conditions stating that taxes quoted by him are valuable as per the Government notifications and hence the tax as applicable from time to time will be charged and this is conditional offer made by the writ petitioner. At paragraphs 14 and 15 of the counter-affidavit of the 1st respondent, it was stated as follows:
"The entire contentions of the petitioner that the department has deviated from its own prescribed formats by it, the third respondent has not filled the columns of without tax as per the terms and conditions of the tender and tender document and the same is liable to be rejected etc., are untenable and it does not stand to the legal scrutiny. It is submitted that the third respondent has completed his bid document by giving all relevant information and in Envelope-B i.e., commercial bid document, he has quoted the total figure which includes the tax. As already submitted about this department has concerned about the total figure quoted by the tenderer and it has no relevance, ultimately to come to the conclusion if ihe taxation rate is not quoted. While mere non-quoting of taxation amount, it will not have fatal effect. Admittedly the total figure quoted by the petitioner is more than the figure quoted by the third respondent and the department will be benefited by more than 45 lakhs for a period of 5 years on the basis of the rates quoted by the third respondent. There is no prejudice caused to the petitioner and the deviation which is permissible by the subsequent amendments and the petitioner will aware about the change in the proforma. The original commercial bid document proforma i.e., Envelope-B also did not contain the rates of sales tax. The note beneath it indicates that for the purpose of tender evaluation, the total of col. 1 and col. 2 atone shall be reckoned. Thus the intention of the department, is very clear that the total amount of all the columns will be alone taken into consideration, but not the individual columns. Subsequently, the said envelope-B of the commercial bid document was amended with a different proforma, which speaks that the tender has to quote the rates without tax and with tax. Even assuming that if any tenderer fails to quote the column of without tax and gives the figure with tax, the ultimate decision will be taken only on the basis of that the tax goes. The department is no way concerned with the payment of the tax and it is for the contractor to pay any tax etc. Thus the Government has to see that what is total rate of contract and if the tenderer quotes lowest rate, the Government will further negotiate with him.
It is submitted that Clause 7(a) of the General Terms and Conditions and Chapter 3 which is equal to Clause 8(a) of general terms and conditions of technical bid speaks that all the particulars must be furnished as asked for in the Technical bid in the bid document. The third respondent has furnished all the particulars and he has further stated that the rate quoted by him is inclusive of all taxes. Clause 8(a) clearly states that the tenderers has to quote a rate both in words and figures and it is not the case of the petitioner that the third respondent has not quoted the rate clearly. With regard to the rejection of the tender, Clause 8(d) says that special information as required by the technical bid must be furnished. Hence the bid is liable to be rejected. The said Clause will apply only for a technical bid, but not for commercial bid."
it was specifically stated that the 3rd respondent is clearly the L1 in the group total of Group G i.e., at Rs. 3,59,99,150/-, on the basis of which the committee decided to conduct discussions/negotiations with them and the group total of the petitioner in Group G is Rs. 3,64,56,085/-, which is Rs. 4.50 lakhs higher for the half yearly payment and will result in a loss of Rs. 45.69 lakhs to Government Exchequer for the entire contract period of five years. It is this ground of omission to fill up the column 'without tax' by 3rd respondent that is being well magnified by the writ petitioner as a ground for rejection of the tender. From the counter-affidavit of the 1st respondent it is clear that the department is concerned only with the total figure including the tax and contract has to be awarded to the lowest tenderer whose quotation refers 'including the tax' and the department is concerned only with the consolidated figure and hence even if the tenderer fails to quote the rate of tax it will not vitiate his tender. As can be seen from the records, the 1st respondent appears to have been predominantly guided by the fact of derivation of benefit to the public exchequer, which is in fact in public interest. The learned Counsel for the writ petitioner had drawn my attention to paragraph 9 of the counter-affidavit of the 1st respondent and also paragraph-? of the counter-affidavit of the 3rd respondent in particular and also the minutes dated 13-11-2001 and had contended that even the minutes appear to be contrary to the averments made in the counter-affidavit of the 1st respondent. The 3rd respondent also had taken a specific stand that it is clear from the tender documents that the bid should be a consolidated bid, inclusive of all taxes, duties, charges, levies, insurance, installation and commissioning charges and in view of the fact that the bid is a composite bid, what is relevant is the bid amount for determination as to which of the bidder is the lowest and thus reference to sales-tax is irrelevant and assuming that the tenderer shall quote the price 'with tax' and 'without lax', it will not in any way invalidate the bid as the said columns are not meant for evaluation purpose, but are meant only to know about the claims of tax by the participating bidders and the same is not an essential condition as is sought to be projected by the petitioner. It is needless to point out that the Government is more interested in the public exchequer and in protecting the public interest in the commercial contracts and if the Government feels that the essential particulars had not been furnished in a tender, the tender will be rejected. As can be seen from the specific stand taken by the 1st respondent, the column 'without tax' had been introduced only for limited purpose and the total amount quoted by any tenderer alone will be taken into consideration and if the quotation is less, he will be treated as L1 and he will be called for negotiations and hence the column 'without tax' in this background falls into insignificance. No doubt my attention was drawn by the learned Counsel for the writ petitioner to the other columns of the format and had made a serious attempt to convince that from these columns it is clear that the filling of the column 'without tax' in the format also is to be treated as mandatory in the light of the same.
18. Condition No. 4(c) of the General Terms and Conditions specifies as follows:
"The commercial bid as prescribed should be filled in original for a consolidated rate per school for 5 years contract period and sealed in a separate cover. The commercial bid should be superscribed as "Commercial Bid-Envelope B....................Group" (The name of the group bid for to be written). Tender No. ................ The bid must be unconditional and in the format given in the tender document."
In view of the deletion of the note in the format, Clause 29 which is applicable to the unamended format cannot be extended in the case of amended format and even if the formats prior to amendment and subsequent thereto are carefully compared, it cannot be said that the column 'without tax' can be termed as an essential condition, going to the very root of the matter. This view of mine can be well supported from different conditions like 4(b), 7(a), 7(d), 5, 33 and 19 and from a reading of different terms and conditions of the tender, it is clear that what is to be quoted is the consolidated rate and the Government is predominantly concerned with the said aspect. It is no doubt true that when a format is prescribed it is always desirable to fill up all the columns. But as far as the Government is concerned, while taking a decision whether a tender is liable for rejection out-right or to be considered, the mere omission to fill up certain columns which will not have major impact or which may not be essential for the purpose of evaluating a tender in the decision making process, may not be of serious consequence. It is in this limited area where judicial review is permissible under Article 226 of the Constitution of India. No doubt several contentions had been advanced to show that for the defects in the tender form submitted even by the writ petitioner, it should have been rejected. But at this distant point of time and inasmuch as the writ petitioner was also found to be eligible, I am not inclined to discuss this aspect in detail in the writ petition filed by the petitioner seeking the reliefs.
19. In the decision referred (supra), at page 622, it was held by the Apex Court as follows:
"Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision making process itself. It is thus different from an appeal. When hearing an appeal, the Court is concerned with the merits of the decision under appeal. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Apart from the fact that the Court is hardly equipped to do so, it would not be desirable either. Where the selection or rejection is arbitrary, certainly the Court would interfere. It is not the function of a Judge to act as a super board, or with the zeal of a pedantic, school master substituting its judgment for that of the administrator.
The duty of the Court is thus to confine itself to the question of legality. Its concern should be:
(1) Whether a decision-making authority exceeded its powers?
(2) committed an error of law:
(3) committed a breach of the rules of natural justice, (4) reached a decision which no reasonable tribunal would have reached or, (5) abused its powers.
Therefore, it is not for the Court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality: This means the decision maker must understand correctly the law that regulates his decision making power and/ must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at. The decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it."
In the decision referred (supra), at page 291, it was held by the Apex Court as follows:
"There have been several decisions rendered by this Court on the question of tender process, the award of contract and evolved several principles in regard to the same. Ultimately what prevails with the Courts in these matters is that while public interest is paramount there should be no arbitrariness in the matter of award of contract and all participants in the tender process should be treated alike. We may sum up the legal position thus: (i) The Government is free to enter into any contract with citizens but the Court may interfere where it acts arbitrarily or contrary to public interest; (ii) The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly situate; (iii) It is open to the Government to reject even the highest bid at a tender where such rejection is not arbitrary or unreasonable or such rejection is in public interest for valid and good reasons."
Strong reliance was placed on the decision referred (supra), wherein it was held that rules and instructions must be complied with scrupulously in order to avoid discrimination, arbitrariness and favouristism which are contrary to rule of law and constitutional values and relaxation by State or its agencies of a rule or condition in favour of a particular bidder was held not permissible unless expressly provided for in the rules. In the decision referred (supra), at page 26, the Apex Court held:
"The duty of the Court is to confine itself to the question of legality. Its concern should be:
1. whether a decision-making authority exceeded its powers?
2. committed an error of law.
3. committed a breach of the rules of natural justice.
4. reached a decision which no reasonable tribunal would have reached, or
5. abused its powers."
In the decision referred (supra), at page 804, the Apex Court held:
"...........The award of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the other tender conditions permit such a relaxation. It may not accept offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene."
Strong reliance also was placed on the decisions (3), (4) and (7) referred supra.
20. From the catena of case law discussed above and the principles laid down therein, it is clear that even while upholding the decision making process, the Court is expected to exercise the discretionary power under Article 226 with great caution and to exercise the same only in furtherance of public interest and not merely for making out a legal point and the Court is expected to keep the larger public interest in mind in order to decide whether its intervention is called for or not. In the light of this legal position, now it is to be appreciated whether the present case is one amenable for interference under Article 226 of the Constitution of India.
21. It is no doubt true that in the case of considering tenders and awarding contracts, the Government and the instrumentalities of State are expected to act reasonably and not irrationally. In the decision making process in the present case, the defect as I can put it which is pointed out by the writ petitioner is the omission on the part of the 3rd respondent in filling up the column 'without tax'. As already discussed above, a specific stand had been taken by the 1st respondent why the 3rd respondent was called for negotiations and how it is beneficial to the public exchequer and how the public interest will be protected in the instant case. It is also pertinent to note that what is relevant is the consolidated rate and the terms "consolidated rate" and "bid amount" had been specifically referred to in several of the clauses which makes the non-filling of the column 'without tax' to fall into insignificance. The agreement also does not deal with the columns 'with tax' or 'without tax'. All the terms and conditions read as a whole point out and suggest that the stand taken by the 1st respondent in the counter-affidavit is well founded and a justifiable one and in the facts and circumstances of the case, the decision was taken in public interest bona fide as explained by the 1st respondent. It is also pertinent to note that there is no arbitrariness or unreasonableness involved and no prejudice is caused to the writ petitioner and his only grievance is that if on the technical objection raised by him, the tender of the 3rd respondent is not considered, it may be that the writ petitioner may stand to a chance. It is needless to mention that it is again for the 1st respondent to take a decision whether to accept or reject and ultimately it may result in calling for tenders afresh again also, if the circumstances warrant the Government to take such a decision. In the instant case, though the contract is a commercial contract, it is a contract more concerned with the Schools and introducing computer education in the said schools and it is needless to point out that it is a contract involving very high public interest and while taking a decision relating to awarding of such a contract, the Government is expected to be more careful and cautious taking all the facts and circumstances into consideration, including the financial involvement and saving of the public money. Hence, I have no hesitation in holding that the serious objection raised by the writ petitioner that the omission to fill up the column 'without tax' by the 3rd respondent is so fatal so as to result in the very rejection of the tender, cannot be accepted since such an action cannot be said to be either arbitrary or unreasonable in the facts and circumstances of the case, and on the contrary a decision was taken in this regard keeping in view the public interest and also the public exchequer and hence I am not inclined to exercise my discretion in favour of the writ petitioner under Article 226 of the Constitution of India.
22. For the foregoing reasons, there are no merits in the writ petition and the writ petition is accordingly dismissed, with costs.