Bombay High Court
Amit Dinkar Humbe vs Shri. Kalyan Daulatrao Nalge, Engg And ... on 3 September, 2024
Author: Amit Borkar
Bench: Amit Borkar
2024:BHC-AS:35703-DB
9-wp11889-2024-F.doc
VRJ
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.11889 OF 2024
Shri Kalyan Daulatrao Nalge,
Engg. & Contractor (Regd.)
Through Its Authorised
Representative Sonu Kumar Singh ... Petitioner
V/s.
The State of Maharashtra, Through
Ministry of Urban Development
& Ors. ... Respondents
WITH
INTERIM APPLICATION (ST.) NO.24861 OF 2024
IN
WRIT PETITION NO.11889 OF 2024
Amit Dinkar Humbe ... Applicant
In the matter between
Shri Kalyan Daulatrao Nalge,
Engg, & Contractor (Regd.)
Through Its Authorised
Representative Sonu Kumar Singh ... Petitioner
V/s.
The State of Maharashtra, Through
Ministry of Urban Development
& Ors. ... Respondents
Mr. Atul Damle, Senior Advocate a/w Ms. Payal Vardhan
with Kinnari Raut i/by Anand Kulkarni for petitioner.
Mr. Rhishikesh M. Pethe for respondent Nos.2 & 3.
Mr. P. P. Kakade, Government Pleader with Mr. O. A.
Chandurkar, Additional Government Pleader with Ms. G. R.
Raghuwanshi, AGP for State - respondent No.1.
1
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9-wp11889-2024-F.doc
CORAM : DEVENDRA KUMAR UPADHYAYA, CJ &
AMIT BORKAR, J.
DATED : SEPTEMBER 3, 2024
ORAL ORDER: (PER AMIT BORKAR, J.)
1. Challenge in this petition, instituted under Article 226 of the Constitution of India, has been made to tender Condition No.2.3.2 of Request for Proposal (RFP) floated by respondent No.2 for the Work of Scientifically Processing Existing Legacy Waste (MSW) through the process of bioremediation/biomining.
2. The impugned condition in the RFP is as follows:
"2.3 Minimum Qualification Requirement - Technical
1. ..............
2. Experience in Disposal of RDF Contractor must have dispatched minimum 2 lakh MT of RDF/SCF produced from legacy waste in cement factory/Power Plants for final disposal as per CPHEEO guidelines in preceding seven years prior to bid due date.
Records depicting scientific disposal/sale of finished products-Certificate from cement factory/Power Plants along with NABL lab reports, Tax invoices raised by bidder to consumer and payment records from consumer to bidder.
A consistent history of litigation or arbitration awards against 2 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc the Applicant may result in disqualification."
3. The impugned condition is a pre-qualification criterion that mandates tenderers to possess experience in dispatching a minimum of 2 lakh metric tonnes (MT) of Refuse-Derived Fuel (RDF) or Solid Combustible Fraction (SCF), produced from legacy waste, to cement factories or power plants for final disposal in accordance with the CPHEEO guidelines within the seven years preceding the bid due date.
4. The relevant facts necessary for the adjudication of the issue raised in this petition are as follows:
5. The Pune Municipal Corporation issued a Request for Proposal (RFP) for the scientific processing of existing legacy waste (Municipal Solid Waste) through bioremediation/biomining at Uruli Devachi/Phursungi, Pune. As per the RFP, the estimated cost of the project for Phase I is Rs. 84.4 crore. Clause 2.1 of the RFP required all bidders to submit the information and documents specified therein. The minimum technical qualifications are outlined in Clause 2.3. Clause 2.3.1 which pertain to the experience in the project, allowing the bidder to select only one criterion out of TQ1, TQ2, or TQ3, with mixing of criteria prohibited to meet the 3 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc minimum qualifications. Clause 2.3.2, which is impugned in this petition, is extracted above. Clause 2.4 stipulates that even if the bidders meet the aforementioned qualifying criteria, they may still be disqualified if they have made misleading or false representations in their bid submissions, have a history of work abandonment, have consistently engaged in litigation, or have adverse arbitration awards against them. Clause 2.5 pertains to the minimum financial requirements, which necessitate a positive net worth in any three of the last five years and an annual financial turnover exceeding Rs. 33,76,00,000/- in the last three financial years.
6. Clause 2.6 stipulates that only those bids that conform to the minimum technical qualifications and the terms and conditions outlined in the bid document will be considered responsive.
7. A total of 20 bidders participated in the tender process. A pre-bid meeting was held on 22 July 2024, where 14 out of the 20 bidders, including the petitioner, raised queries concerning Clause 2.3.2 and suggested various amendments to the tender document.
8. In response to the pre-bid meeting, respondent No. 3 4 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc submitted a report on 26 July 2024, recommending that Clause 2.3.2, regarding the RDF disposal experience requirement, should neither be removed nor modified. respondent No. 2, after considering the report submitted by respondent No. 3, approved the recommendation via Resolution No. 6/345 on 2 August 2024.
9. The last date for the submission of the online bid was extended to 13 August 2024, with the physical submission deadline set for 19 August 2024. Given that the bid opening was scheduled for 14 August 2024, the petitioner challenged Condition No. 2.3.2 by filing the present writ petition on 10 August 2024.
10. Respondent No. 2 contested the petition by filing an affidavit-in-reply, contending that Pune, being an urban city, faces a significant challenge with large quantities of Municipal Solid Waste (MSW). According to the Solid Waste Management Rules, 2016, legacy waste is processed using biomining and bioremediation, resulting in its broad segregation into recyclables, bio-soil, construction and demolition waste, inert material, and RDF. While the disposal of recyclables, construction and demolition waste, and bio-soil 5 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc can be managed within the city, RDF poses a disposal challenge due to its nature. RDF is only disposed of as fuel in cement factories or power plants, the nearest of which are located 350 kilometers from Pune. Bidders must therefore transport RDF to these facilities at their own expense. Scientific disposal of RDF is mandated under the Central Public Health and Environmental Engineering Organisation (CPHEEO) guidelines. To prevent unscientific disposal of RDF, which could lead to air and groundwater pollution, RDF must be disposed of in facilities approved by the Central or State Pollution Control Board. The utilization of RDF in power plants and cement kilns reduces the use of natural fossil fuels, thereby protecting the environment. Hence, the pre- qualification criterion for RDF disposal, requiring that the contractor have prior experience in RDF disposal in accordance with relevant rules, justifies the inclusion of Condition No. 2.3.2.
11. Mr. Damle, learned Senior Advocate, submitted that, although all other tender conditions were prepared pursuant to guidelines issued by the Ministry of Housing and Urban Affairs, Government of India but for Clause No. 2.3.2 these 6 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc guidelines do not have any corresponding clause. He argued that the inclusion of Clause No. 2.3.2 favours a select few bidders, which would ultimately burden the public exchequer. He contended that Clause No. 2.3.2 is arbitrary and lacks any correlation with the scope of work, thereby violating Article 14 of the Constitution of India. Therefore, the impugned clause should be quashed.
12. Mr. Pethe, learned Advocate for respondent No. 2, opposed the relief sought in the writ petition, denying the petitioner's allegations that Condition No. 2.3.2 suffers from arbitrariness or irrationality. He argued that, given the CPHEEO guidelines for the scientific disposal of RDF, the condition is necessary to prevent unscientific disposal and the resultant environmental harm. Since RDF produced during the biomining of legacy waste is utilized in power plants and cement kilns, the pre-qualification criterion ensures that the bidder has adhered to these criteria in prior projects. He therefore urged the Court to dismiss the writ petition summarily.
13. The scope of interference by this Court under Article 226 of the Constitution of India in tender matters has been 7 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc reiterated by the Supreme Court in its recent judgment in Subodh Kumar Singh Rathour v. The Chief Executive Officer & Ors., reported in 2024 SCC OnLine 1682. The Supreme Court emphasized that, in matters concerning the modalities of the contract, such as the required work, execution methods, material quality, timeframe, supervision standards, and other aspects impacting the tender's purpose, the Court usually refrains from interference. It was further held that judicial review in tender matters is confined to preventing arbitrariness and ensuring that public authorities do not abuse their powers, even in contractual matters. Paragraph No. 57 of the said judgment is relevant and is reproduced hereunder:
"57. It is needless to state that in matters concerning specific modalities of the contract -- such as required work, execution methods, material quality, timeframe, supervision standards, and other aspects impacting the tender's purpose -- the Court usually refrains from interference. State authorities, like private individuals, have a consensual element in contract formation. The stipulations or terms in the underlying contract purpose are part of the consensual aspect, which need not be entertained by the Courts in writ jurisdiction, and the parties may be relegated to ordinary private law remedy. Judicial review does not extend to fixing contract stipulations but ensures that the public authorities act within their authority to prevent arbitrariness."
14. Having noted the principle enunciated by the Supreme 8 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc Court in the aforementioned judgment concerning the scope of interference in tender conditions under Article 226, we now proceed to examine whether the impugned Condition No. 2.3.2 is so irrational and arbitrary as to vitiate the entire tender process, and whether interference in this petition would serve the public interest.
15. The tender Condition No. 2.3.2 emphasizes the contractor's experience in handling and processing large quantities of RDF from legacy waste. This is significant because the bioremediation of legacy waste often results in the production of RDF, which must be disposed of in an environmentally sustainable manner. The condition ensures that the contractor not only has experience in the bioremediation process but also in managing the end-product, ensuring its proper disposal or utilization, such as in cement kilns. By requiring the contractor to have dispatched 2 lakh MT of RDF, the tender aims to ensure that the contractor possesses the capacity to handle large volumes of waste, process it effectively, and manage the logistics of RDF disposal or utilization. This requirement is intended to ensure that only contractors with proven large-scale operational capabilities 9 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc and an established supply chain for RDF disposal are considered, thereby reducing the risk of project failure. The condition also ensures that the contractor has adhered to environmental norms and standards in the past, particularly in the context of RDF production and utilization. Cement factories often require RDF that meets specific quality standards for use as an alternative fuel, which implies that the contractor has maintained high environmental and quality standards in their previous work.
16. The disposal of legacy waste and the production of RDF are of significant public interest, particularly in terms of environmental sustainability. The tender condition aims to ensure that the contractor can contribute to sustainable waste management practices by successfully converting legacy waste into RDF and utilizing it in an eco-friendly manner. The condition appears to be rationally connected to the overall objective of the project, which includes not only the bioremediation of legacy waste but also the responsible disposal of by-products like RDF. The nexus between the tender condition and the scope of work lies in ensuring that the contractor has the necessary experience, capacity, and 10 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc compliance history to manage the entire process of legacy waste bioremediation, including the critical aspect of RDF disposal, which is integral to the project's environmental and operational success.
17. An entity issuing an invitation to bid is entitled to prescribe appropriate conditions for qualification or eligibility. These eligibility conditions are designed to ensure that a bidder is capable of fulfilling the contractual obligations that would arise upon the award of the contract. Such criteria may include requirements related to the technical competence of the prospective bidder, the financial stability of the bidder, and the bidder's experience in executing projects of a similar scale.
18. As observed by the Supreme Court, judicial review of tender conditions is limited in scope. The Court may intervene in exceptional circumstances where it is demonstrated that a tender condition has been crafted with the intent to create a monopoly in favour of a particular bidder. Similarly, an applicant may challenge the legality of a tender condition on the ground that it is wholly arbitrary or it constitutes a misuse of statutory power conferred upon the tender-issuing 11 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc authority.
19. Ultimately, the test is whether the tender condition is arbitrary or lacks a rational nexus with the objective of securing the efficient and expeditious completion of the contract. In the present case, there is evidently a nexus between Condition No. 2.3.2 and the nature of the work to be performed by the successful bidder.
20. The next contention advanced on behalf of the petitioner is premised on the guidelines framed by the Ministry of Housing and Urban Affairs (MHUA). According to the petitioner, except for Condition No. 2.3.2, all other conditions prescribed in the MHUA guidelines have been incorporated by respondent No. 2 as tender conditions. However, the petitioner has failed to present any evidence on record to demonstrate that the MHUA guidelines possess statutory force or are binding upon respondent No. 2. In the absence of such evidence, the tender condition, which has been shown to have a rational basis as indicated earlier, cannot be characterized as arbitrary or unfair.
21. The petitioner contends that Condition No. 2.3.2 has been incorporated to benefit three or four bidders; however, in 12 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 ::: 9-wp11889-2024-F.doc the absence of any specific pleadings or evidence on record to substantiate this assertion, the unsubstantiated claim that the condition is tailor-made cannot be accepted.
22. Therefore, in our considered opinion, the impugned tender Condition No. 2.3.2 is neither irrational nor arbitrary, and it is not in the public interest to interfere with the present petition.
23. Consequently, the writ petition stands dismissed. There shall be no order as to costs.
24. The interim application, if any, accordingly stands disposed of.
(AMIT BORKAR, J.) (CHIEF JUSTICE) 13 ::: Uploaded on - 05/09/2024 ::: Downloaded on - 05/09/2024 23:07:13 :::