Delhi High Court
Vrg Energy India Pvt. Ltd. Avni Traders vs Union Of India And Anr. on 14 September, 2021
Author: Jasmeet Singh
Bench: Vipin Sanghi, Jasmeet Singh
$~ 19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on 02.09.2021
Pronounced on: 14.09.2021
+ W.P.(C) 5750/2021 & CM APPL. 18034-18035/2021
VRG ENERGY INDIA PVT. LTD.-AVNI TRADERS (Consortium)
... Petitioner
Through: Mr. Rohit Rathi, Adv.
versus
UNION OF INDIA AND ANR. ..... Respondents
Through: Mr. Vikram Jetly, CGSC for R-1.
Mr. Samdarshi Sanjay, Adv. with Mr. Prakash Jha
GM Legal & Mr. Kumar Saurabh, AGM (SCM),
Mr. Nikhil Bhandari AM (SCM) for Respondent,
Energy Efficiency Services Ltd.
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
HON'BLE MR. JUSTICE JASMEET SINGH
JUDGMENT
: JASMEET SINGH, J
1) The writ petition has been filed seeking the following substantive prayer:
a. "Quash and set aside the impugned communication dated 20.05.2021 issued by the Respondent No.2 insofar it fails to include the Petitioner in the 'Envelop Name: Price Bid;
b. Quash and set aside the impugned e-mail communication dated 21.05.2021 issued by Respondent No.2 to the Petitioner.
c. ...
d. Stay further process with respect to Open Tender NIT/Bid Doc. No.
EESL/06/2020-21/KUSUM/WPS/1-10 HP/ Off Grid/202101032 dated 14.01.2021 issued by the Respondent No.2;
e. Direct the Respondent to provide reason(s) for rejection of Technical Qualification bid of the Petitioner;
f. Pass any such other order / directions as this Hon'ble Court deems fit and proper in the facts and circumstances of the case;
Signature Not VerifiedW.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 1 of 12 Signing Date:15.09.2021 18:34:00
2) The Petitioner is stated to be one of India's leading solar company with a vision to harness and connect the power of Sun. The Petitioner was established in the year 2011 and is indulged in manufacturing, supplying and exporting the solar systems to both corporate and residential clients.
3) The respondent No. 2 is Energy Efficiency Services Limited (EESL) and is a Super Energy Service Company (ESCO), which enables consumers, industries and governments to effectively manage their energy needs through energy efficient technologies. EESL was founded in 2009, promoted by Ministry of Power, Government of India as a Joint Venture of four reputed public-sector undertakings namely a) NTPC Limited, b) Power Finance Corporation Limited, c) REC Limited and d) POWERGRID Corporation of India Limited.
4) On 14.01.2021, respondent No. 2 invited Detailed Invitation for Bids (IFB) for design, manufacture, supply transport, installation, testing and commissioning of Off Grid Solar Photovoltaic Water Pumping Systems of 1-10 HP in Selected States on PAN India basis, including complete system warranty and its repair and maintenance for 5 Years under MNRE KUSUM scheme Component-B.
5) Respondent invited e-bids from eligible bidders for the aforesaid work under Single-stage Three-envelope bidding process through E- tendering.
6) Pursuant to the IFB dated 14.01.2021, petitioner submitted its bid with the relevant documents vide the E-tendering process, as per the format prescribed by the respondent. The Respondent issued the Envelope receipt on 18.02.2021 and duly acknowledged the documents.
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7) On 03.03.2021, the Technical Qualification bids were opened by Respondent No.2 and the petitioner's bid was rejected, insofar the petitioner was not included in the 'Envelope Name: Price Bid'. Vide communication dated 20.05.2021, the petitioner got to know that his technical bid had been rejected.
8) Aggrieved by the said communication, the petitioner on the same date i.e. 20.05.2021 addressed a communication to Respondent No. 2 requesting Respondent No.2 to inform the reasons for Petitioner's disqualification. Subsequent to the said communication, respondent No.2 on 21.05.2021 vide an auto- generated response, informed the petitioner that the petitioner's bid was found to be non-responsive upon technical evaluation.
9) The Petitioner on 21.05.2021 addressed another communication seeking the basis of which petitioner's bids was declared non- responsive. Since no reply was received, the petitioner has filed the aforesaid writ petition.
10) When the matter came up before this Court on 02.06.2021, this Court directed the respondent to disclose the reasons for holding the petitioner's bid to be non-responsive (within 2 weeks). This Court further directed the tender in question not to be finalised till the next date of hearing.
11) Pursuant to our order of 02.06.2021, the respondent has filed a counter-
affidavit and the reason for rejection has been stated in Para B (x) which reads as under:
"(x) It is submitted that at the stage of Technical Evaluation, the Bid of the Petitioner was found non-responsive, since the Bidder has participated in 11 Clusters (States) the requirement of cumulative turnover was Rs. 274 Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 3 of 12 Signing Date:15.09.2021 18:34:00 crores approximately. The bidder is of MSE category and was given relaxations to have one fourth of the annual cumulative turnover in accordance to Clause 2.4 of section 2 of RFP at page 15 to 17 of ANNEXURE-R/1 being the Bid Document. Still Bidder could not qualify for consideration as its ATO was less than the minimum required. So due to this fact the Technical Bid of the Petitioner was rejected. Reference RFP Document: "(Page No 16) Participating Bidder should have average annual Turnover (ATO) as per table 2 at page No 201 and 202 for any three years out of the last four financial years. As note, it is mentioned that the combined ATO for all the states applied by the bidder shall be considered for evaluation." True copy of the entire Tender Documents pertaining to the Bid in question is appended hereto as ANNEXURE-R/1."
12) Even though the counter affidavit is cryptic on detailed reasons for rejection and says "any three years out of the last four financial years,"
shall be taken for the ATO, the learned counsel for the respondent during argument has stated that the Respondent has taken the average for the year 2017-18, 2018-19 and 2019-20 which comes to 52 crores (approx.) and does not cross the required Average Annual Turnover (ATO) of 68.51 crores (approx.). Hence the rejection.
13) We have heard the learned counsel for the parties and gone through the documents before us. It will be relevant to reproduce the Qualification Requirement Annexure-II which reads as under:
"Annexure II QUALIFYING REQUIREMENT (QR) In addition to the satisfactory fulfilment of-requirements stipulated under section ITB, the following shall also apply:
Sr. No. Criteria Documents to be submitted Particulars in brief
(A) (B) (C) of the Documents
submitted by the
Bidder on
Covering Letter
(D)
1. .....
2. .....
Signature Not Verified
W.P.(C) 5750/2021
Digitally Signed By:AMIT
ARORA
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3. Duly authorised copy of
audited annual report/
Bidders should have Balance Sheet for any three M/s
Average Annual financial years out of last 2016-17:
Turnover (ATO) as per four years (i.e. 2016-17, 2017-18:
Table 2 below for any 3 2017-18, 2018-19 and 2018-19:
years out of the last 4 2019-20) is to be submitted 2019-20
years i.e. 2016-17, 2017- by respondent along with 2018, 2018-2019 and CA certificate. Refer Format-1 in 2019- 2020. Annexure-III Turnover means operating income.
Profitability means: Profit after tax.
(emphasis supplied)
14) The document to establish attainment of this Qualification Requirement was to be as per Format 1 in Annexure-III which reads as under:
"ANNEXURE-III Format 1 Information on Average Annual Turnover [To be printed on the Letterhead of the bidder including full postal address, telephone, faxes and e-mail address] Annual Turnover Data for the last 3 years Year Net Worth (in Annual Turnover (in INR) INR) 2019-20 2018-19 2017-18 2016-17 Annual Average (This format should be certified by the practicing CA's of the Bidder)"
15) Since the Petitioner is a Joint Venture, the cumulative Average Annual Turnover for both the entities namely, M/S, AVNI TRADERS as well Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 5 of 12 Signing Date:15.09.2021 18:34:00 as VRG ENERGY INDIA PVT. LTD is to be considered. This is not disputed by the Respondent. The certificates submitted by the Petitioner in compliance to Annexure- III Format 1 read as under:
ANNEXURE-III FORMAT-1 As per books of accounts and balance sheets produced before us by the proprietor of M/S, AVNI TRADERS having registered office at C2/102, Aishwarya Chamber, G.E. Road, Telibandha Raipur, Chattisgarh - 492001, we hereby certify the Average Annual Turnover & Net Worth of the Firm as mentioned below:-
• Information on Average Annual Turnover
Annual turnover date for the last 4 years:
Year Net Worth (INR) Annual Turnover
(INR)
FY: 2019-2020 29,78,15,555/- 29,48,98,737/-
FY: 2018-2019 28,12,93,549/- 56,07,36,610/-
FY: 2017-2018 22,63,04,122/- 51,40,38,156/-
FY: 2016-2017 16,58,96,535/- 43,66,67,236/-
ANNUAL AVERAGE (Last Three Years) 45,67,57,834/-
VRG ENERGY INDIA PVT. LTD.
(ISO 9001:2015 & ISO 14001:2015 Certified) Plot No. G/2832, 2nd Gate, Road J. Opp. Jyoti CNC Automatic Ltd.
Metoda G.I.D.C. Rajkot, (Gujrat) Ph. : 2827-287510/ 19 ANNEXURE-III FORMAT-I • Information on Average Annual Turnover Annual turnover date for last 3 years:
Year Net Worth (INR) Annual Turnover
(INR)
FY: 2019-2020 591.30 Lacs 4987.04 Lacs
FY: 2018-2019 452.43 Lacs 3002.89 Lacs
FY: 2017-2018 340.08 Lacs 3138.65 Lacs
FY: 2016-2017 200.86 Lacs 1821.28 Lacs
ANNUAL AVERAGE 3237.46 Lacs
Signature Not Verified
W.P.(C) 5750/2021
Digitally Signed By:AMIT
ARORA
Page 6 of 12
Signing Date:15.09.2021
18:34:00
16) Learned counsel for the Respondent has made a feeble attempt to argue that since "Annual Turnover Data for the Last 3 Years" has been mentioned in Format 1 of Annexure III, the Petitioner was required to only give and the Respondent was required to only consider the Annual Turnover Data for the last 3 years namely 2019-20, 2018-19 and 2017- 18.
17) We have had the occasion to deal with the said clauses of the IFB in a similar petition viz. Gautam Solar Pvt. Ltd. v. Energy Efficiency Services Limited, W.P.(C) No. 8076/2021, decided on 12.08.2021, we have rejected the above submission by holding as follows:
"16. A bare perusal of the Row 3 of the Table in Annexure II, read in conjunction with Annexure- III, Format 1, clearly demonstrates that the bidder - to be qualified, had to demonstrate the requisite Average Annual Turnover, by taking into consideration the Turnover of "any 3 years out of the last 4 years i.e. 2016-17, 2017-18, 2018-19 and 2019- 20". If the intention of the Respondent was to consider the data of only the last the 3 years i.e. 2017-18, 2018-19 and 2019-20, then there was no need for the Respondent to mention "any 3 years out of the last 4 years i.e. 2016-17, 2017-18, 2018-19 and 2019-20" in Annexure II of the Qualifying Requirements. The substantive provision/clause on Qualifying Requirements is the one contained in Annexure III extracted above. It refers to Format 1 in Annexure III. Therefore, even if there is any conflict or ambiguity between what is stated in the Qualifying Requirements, and what is stated in the Format 1 in Annexure III, it is the Qualifying Requirements, which would rule, and not what is stated in the tabulation in Format 1 in Annexure III. It is also pertinent to note that even Format 1 in Annexure III permits the Bidders to provide the Annual Turnover data for four years i..e 2016-17, 2017-18, 2018-19 and 2019-20. This is in consonance with the Qualification Requirements contained in Annexure II. The mere use of the words "Annual Turnover Data for the last 3 years" in Format I is neither here, nor there. The same has to be read and understood as referring to the data of three financial years which the bidder seeks to rely upon to claim eligibility in terms of the Qualifying Requirements.
17. Since the Format I in Annexure III, provided four rows to provide the turnover data for the four years aforesaid, no fault can be found with Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 7 of 12 Signing Date:15.09.2021 18:34:00 the bidder for providing the turnover data for all the four years. It does not follow that this action of the bidder gives an option, or an opportunity, to the respondent to disqualify the bidder by ignoring the Turnover figures of the year which, if taken into consideration, would qualify the bidder.
18. Had it been the intention of the Respondent to consider the turnover data of the last 3 years only, the word „any‟ would not have been used in the Qualifying Requirements. The year 2016-17 would not have been specifically mentioned either. The said word cannot be rendered redundant. There is absolutely no ambiguity in the relevant clause in the Qualifying Requirements. It clearly permits the bidder to calculate the Average Annual Turnover by considering the Annual Turnover for "any"
three years out of the four years specifically mentioned i.e. 2016-17, 2017-18, 2018-19 and 2019-20. The words "any" and the mention of four years, including the year 2016-17 would have to be ignored from the Qualifying Requirements, if the interpretation of the respondents were to be accepted. Even Format 1 in Annexure III provides one row for each 2016-17, 2017-18, 2018-19 and 2019-20. If only the last three years Turnover data were relevant, and if only those figures could be considered, there was no purpose of calling for or providing space in the said tabulation to provide the turnover data for 2016-17. An interpretation which gives meaning to the words used in the Tender Document has to be preferred over one which renders its substantive terms redundant. Where the plain English reading conveys a particular meaning, it is not open to Respondent to ignore the words to convey a different meaning.
19. In Central Coalfields Limited & Anr. V. SLL-SML (Joint Venture Consortium) & Ors.(2016) 8 SCC 622 "33. In Ramana Dayaram Shetty v. International Airport Authority of India this Court held that the words used in a document are not superfluous or redundant but must be given some meaning and weightage:
7..It is a well-settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the Court should not be prompt to ascribe superfluity to the language of a document "and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use." To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. The court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable."Signature Not Verified
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18) In the present case, the interpretation as sought by the Respondent would make the word 'any', a surplusage, which cannot be the intention of the document. The whole purpose of the issuing Rules/instructions is to ensure their enforcement lest the Rule of law should be a casualty
19) Moreover, in W.B. SEB v. Patel Engg. Co. Ltd., (2001) 2 SCC 451, the Apex Court emphasised on maintaining sanctity and integrity of process of tender/bid and also award of a contract and observed ".........adherence to the instructions cannot be given a go-bye by branding it as a pedantic approach otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the Rule of law and our Constitutional values. The very purpose of issuing Rules/instructions is to ensure their enforcement lest the Rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the Rules, it has to be done strictly in compliance with the Rules."
20) Further it is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 9 of 12 Signing Date:15.09.2021 18:34:00 Standards on pain of invalidation of an act in violation of them. The Apex Court in Ramana Dayaram Shetty v. The International Airport Authority of India & Ors., (1979) 3 SCC 489, applying this rule held that "Now, there can be no doubt that what paragraph (1) of the notice prescribed was a condition of eligibility which was required to be satisfied by every person submitting a tender. The condition of eligibility was that the person submitting a tender must be conducting or running a registered 2nd class hotel or restaurant and he must have at least 5 years' experience as such and if he did not satisfy this condition of eligibility his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by the 1 st respondent and since the 4th respondents did not satisfy this standard or norm, it was not competent to the 1st respondent to entertain the tender of the 4th respondents. It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those Standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr Justice Frankfurter in Viteralli v. Seton(l) where the learned Judge said:
"An executive agency must be rigorously held to the standards by which it professes its action to be judged. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirement that bind such agency, that procedure must be scrupulously observed. This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword."
21) If the respondent had any other intention in mind, the wording of the Annexure should have been different from the one framed herein.
22) We would also rely on the Doctrine of 'verba chartarum fortius accipiuntur contra proferentem.' The respondent in the present case was the master of drafting the terms of the tender. If the respondent had any other intention in mind, the wordings of the Annexures should have been different as framed herein.
23) As observed in Industrial Promotion & Investment Corporation of Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 10 of 12 Signing Date:15.09.2021 18:34:00 Orissa Ltd. v. New India Assurance Co. Ltd. And Anr, (2016) 15 SCC 315:
"10. ..The Common Law rule of construction "verba chartarum fortius accipiuntur contra proferentem" means that ambiguity in the wording of the policy is to be resolved against the party who prepared it. MacGillivray on Insurance Law deals with the rule of contra proferentem as follows:
"The contra proferentem rule of construction arises only where there is a wording employed by those drafting the clause which leaves the court unable to decide by ordinary principles of interpretation which of two meanings is the right one. "One must not use the rule to create the ambiguity - one must find the ambiguity first." The words should receive their ordinary and natural meaning unless that is displaced by a real ambiguity either appearing on the face of the policy or, possibly, by extrinsic evidence of surrounding circumstances....""
24) The said principle of 'verba chartarum fortius accipiuntur contra proferentem' has also been applied by the Supreme Court in the case of Bank of India and Anr. v. K. Mohandas and Ors, (2009) 5 SCC 313 wherein the court observed thus:
"32. The fundamental position is that it is the banks who were responsible for formulation of the terms in the contractual Scheme that the optees of voluntary retirement under that Scheme will be eligible to pension under the Pension Regulations, 1995, and, therefore, they bear the risk of lack of clarity, if any. It is a well-known principle of construction of a contract that if the terms applied by one party are unclear, an interpretation against that party is preferred (verba chartarum fortius accipiuntur contra proferentem)."
25) In this view of the matter, in terms of Column 3 of Qualifying Requirements, the Petitioner was entitled to take the cumulative average ATO of any of the 3 years out of the last 4 years i.e. 2016-17, 2017-2018, 2018-2019 and 2019- 2020, which suited it best. However, since the Petitioner participated as a Joint Venture, the ATO of both the members of the Joint Venture should relate to the same financial years. If the ATO of both the Joint Venture parties are cumulatively taken, for Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 11 of 12 Signing Date:15.09.2021 18:34:00 the years 2016-17, 2017-18, 2018-19, the Petitioner crosses the threshold limit of 68.51 crores.
26) Consequently, we quash the communication dated 20.05.2021 declaring the Petitioner to be technically disqualified, and direct the Respondent to recalculate the Average Annual Turnover of the Petitioner, and assess its responsiveness in Technical evaluation.
27) With these observations, the above Writ Petition is allowed.
JASMEET SINGH, J VIPIN SANGHI, J SEPTEMBER 14, 2021/ 'ms' Signature Not Verified W.P.(C) 5750/2021 Digitally Signed By:AMIT ARORA Page 12 of 12 Signing Date:15.09.2021 18:34:00