Bombay High Court
Next Gen Agro vs Nab Foundation Fully Owned Subsidiary ... on 13 May, 2024
Bench: Sandeep V. Marne, Neela Gokhale
2024:BHC-OS:8256-DB
6_wpl_16068_2024_fc.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (LODGING) NO.16068 OF 2024
Next Gen Agro, a registered
partnership Firm through its partner-
Maroti Wankhede. ...Petitioner
Versus
1. NAB Foundation (fully owned
subsidiary of NABARD through its
Chief Executive Officer and Ors. ...Respondents
...
Ms Renuka Sirpurkar with Ms Mohini Rehpade, Mr. Vijay Singh, Mr.
Karan Gajara o/b. M/s. Desai Legal for the Petitioner.
Mr. S.P. Bharti for Respondent No.1.
Mr. Swapnil Bangur i/b. Ms Sonia Redkar for Respondent No.3.
CORAM : SANDEEP V. MARNE &
DR. NEELA GOKHALE, JJ.
(VACATION COURT) DATED : 13 MAY 2024.
PC:
1. By this petition, the Petitioner challenges rejection of its technical bid in the tender process initiated by Respondent No.1 for supply, installation of PUSA-STFR Meter Kit and onsite training for Digitally signed by MEGHA setting up 1000 mini soil testing labs in 1000 identified schools.
MEGHA SHREEDHAR
SHREEDHAR PARAB
PARAB Date:
2024.05.14
17:41:29
+0530
Megha 1/9
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2. Petitioner is aggrieved by action of Respondent No. 1 declaring it ineligible in the tender process qua the condition of existence for at least three years as on 31 December 2023. It contends that the cut off date for deciding the eligibility criteria of firm's existence ought to have been considered as 31 March 2024, as turnover of the bidders for FY 2023-24 is permitted to be considered. It contends that if criteria of firm's existence for 3 years as on 31 March 2024 is applied, Petitioner qualifies all tender conditions. Petitioner is also aggrieved by the scoring pattern introduced by Respondent No.1 for evaluation of bidders.
3. NAB Foundation (Respondent No. 1) is fully owned subsidiary of National Bank for Agriculture and Rural Development (NABARD). It floated tender inviting bids for 'Supply, Installation of PUSA-STFR Meter Kit and on-site training under School Soil Health Programme of Ministry of Agriculture and Farmer Welfare (MoA and FW) for setting up of 1000 mini soil testing labs in 1000 identified schools'.
4. The Petitioner is a Micro, Small and Medium enterprise set up through a partnership firm on 1 April 2021. It claims specialisation in digital soil testing lab and is a certified technology license holder of PUSA- STFR Meter licensed by Indian Council of Agricultural Research. One of the tender conditions required that "the bidder may be a sole proprietary concern, partnership firm or a company and Megha 2/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 ::: 6_wpl_16068_2024_fc.docx should be in existence at least five years as on 31 December 2023". The said tender condition was relaxed by way of a Corrigendum issued in pursuance of pre-bid meeting held on 10 April 2024. As per the Corrigendum it was provided that "the bidder should be in existence for at least three years". It appears that Respondent No.1 considered existence of Petitioner from 28 July 2021, which is the date of registration of Petitioner-Firm and held it ineligible for not having been in existence for three years as on 31 December 2023. The Petitioner is aggrieved by rejection of its technical bid and has filed the present petition.
5. We have heard Ms. Renuka Sirpurkar, the learned counsel appearing for Petitioner. She would submit that the tender conditions are tailor made to suit Respondent No.3. That implementation of tender process is arbitrary as technical and financial bids are opened on same date i.e. on 24 April 2024 thereby leaving no scope for disqualified bidders to raise any objection. That the revised tender conditions as per the Corrigendum required bidder to be in existence for three years and the condition did not specify any cut-off date. That in the light of non-specification of any cut-off date in the Corrigendum, the same is required to be treated as 31 March 2024. According to Ms Sirpurkar, the cut-off date for existence of the firm must be counted as on 31 March 2024 in the light of permissibility to prove sales turnover till 2023-2024. That if more stringent condition of proving sales Megha 3/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 ::: 6_wpl_16068_2024_fc.docx turnover was pushed to 2023-2024, there is no logic in retaining the old cut-off date for determining existence of the Firm as on 31 December 2023. Ms Sirpurkar would invite our attention to the Deed of Partnership, which shows the Firm having been come into existence from 1 April 2021. That therefore, Petitioner fulfilled the criteria of being in existence for three years as on 31 March 2024. Ms Sirpurkar would also demonstrate as to how the scoring pattern adopted by Respondent No.1 is not just arbitrary but is designed with the objective of favouring Respondent No.3. She would therefore submit that the entire tender process is required to be set aside directing Respondent No.1 to consider Petitioner's bid for financial evaluation.
6. Per contra, Mr. Bharti, the learned counsel appearing for Respondent No.1 would oppose the petition. He would submit that the tender process has already been finalized and the work order has been issued to Respondent No.3 on 30 April 2024. He would rely upon the date of registration of Petitioner's Partnership Firm as 28 July 2021 to demonstrate that even if cut-off date of 31 March 2024 was to be applied, Petitioner could not prove existence for three years. He would submit that in any case, the bid of Petitioner of Rs.69,000/- per unit was higher than the lowest quote of Rs.59,800/- of Respondent No.3.
Mr. Bharti would therefore pray for dismissal of the petition.
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7. Mr. Bangar, the learned counsel appearing for Respondent No.3/successful bidder would also oppose the petition submitting that the financial bid of Respondent No.3 of Rs.59,800/- per unit is way lower than Petitioner's bid of Rs.69,000/- per unit.
8. Rival contentions of the parties now fall for our consideration.
9. Petitioner is essentially aggrieved by the tender condition, which required existence of Firm of the bidder for a specified period as on 31 December 2023. Essentially the tender condition required that the bidder must be in existence at least for five years as on 31 December 2023. The condition of five years was later relaxed to three years by Corrigendum issued after pre-bid meeting held on 3 April 2024. No doubt, the Corrigendum did not specify any cut-off date for determining existence of the bidder. The relevant clause of the Corrigendum is as under:-
Reference in NIT Clarification Pre-Qualification criteria (Annexure II) Point No. 3 The bidder may be a sole proprietary The bidder should be in concern, partnership firm or a existence for atleast 3 company and should be in existence at years least for 5 years as on 31-12-2023
10. However, it is the contention of Respondent No.1 that what is done by the Corrigendum is only relaxation of number of years from 5 Megha 5/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 ::: 6_wpl_16068_2024_fc.docx to 3, without altering the cut-off date of 31 December 2023. This is the interpretation placed on tender condition by the tendering authority. By now, it is well settled law that Courts cannot interfere with the conditions of tender and that the Tendering Authority is the best Judge to specify a particular eligibility criteria in the tender document. It is also equally well settled law that in the event of any ambiguity in the tender conditions, the interpretation placed by the Tendering Authority shall prevail. It would be necessary to make reference to few judgments in this regard.
11. In Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & Anr. (2016) 16 SCC 818 the Apex Court held that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It was held as under:
15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitu-
tional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the under- standing or appreciation or in the application of the terms of the ten- der conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not accept- able to the constitutional courts but that by itself is not a reason for in- terfering with the interpretation given."
(emphasis supplied) Megha 6/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 ::: 6_wpl_16068_2024_fc.docx
12. Again, in Silppi Constructions Contractors v. Union of India and Ors 2019 SCC OnLine SC 1133 the Apex Court held as under:
20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelm-
ing public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unrea- sonable; the court does not sit like a court of appeal over the appropri- ate authority; the court must realize that the authority floating the ten- der is the best judge of its requirements and, therefore, the court's in- terference should be minimal. The authority which floats the contract or tender and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind, we shall deal with the present case."
(emphasis supplied)
13. In Michigan Rubber (India) Ltd. v. State of Karnataka , (2012) 8 SCC 216 the Apex Court has summarized the contours of scope of judicial review in tender matters after considering its various judgments. It is held as under:
23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consider- ation the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is Megha 7/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 ::: 6_wpl_16068_2024_fc.docx proved to be arbitrary or unreasonable. If the Government acts in con-
formity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in pub- lic interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.
(emphasis supplied)
14. We are therefore unable to accept Petitioner's interpretation that existence of Firm as on 31 March 2024 could be considered in absence of a specific stipulation to that effect either in the tender document or in the Corrigendum. Corrigendum merely reduced the period of existence of Firms from 5 years to 3 years, without effecting any change in the cut-off date. Even if Petitioner's interpretation of determining its existence as on 31 March 2024 is accepted, still Petitioner does not fulfill the eligibility criteria. In the technical bid, Petitioner itself has made a declaration that its date of registration is 28 July 2021. The Partnership Deed appears to have been executed on 11 June 2021 and declaration of effective date of 1 April 2021 in that Deed would become irrelevant in view of specific declaration given by Petitioner that the Partnership was registered on 28 July 2021. Respondent No. 1 has Megha 8/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 ::: 6_wpl_16068_2024_fc.docx taken the date of registration of Firm for determining its existence and not the date which is declared in the Deed. Thus, seen from any angle, it appears that the Petitioner could not prove its existence for three years either as on 31 December 2023 or even on 1 April 2024. The decision of the Tendering Authority in disqualifying the Petitioner's bid therefore does not suffer from any serious infirmity.
15. Even otherwise, Petitioner's financial bid, as declared in the Petition is for Rs.69,000/- per unit whereas the lowest bid of Respondent No.3 is of Rs.59,800 per unit. There is substantial difference between the rates quoted by Petitioner and Respondent No.3. Respondent No.3 has already been awarded Work Order on 30 April 2024. Therefore, even on this ground no interference can be made in the impugned decision of the Respondent No.1.
16. The Writ Petition being devoid of merits, is dismissed with no order as to costs.
[DR. NEELA GOKHALE, J.] [SANDEEP V. MARNE, J.] Megha 9/9 ::: Uploaded on - 14/05/2024 ::: Downloaded on - 14/05/2024 20:53:58 :::