Andhra Pradesh High Court - Amravati
M/S Kpc Projects Ltd, vs East Coast Railway, on 3 December, 2024
THE HON'BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA
WRIT PETITION No.17150 OF 2024
ORDER:-
1. This writ petition is filed claiming the following relief:
"...To issue an order, direction or writ, more so in the nature of Writ of Mandamus
a) Declare the action of the Respondent No.1 in disqualifying the technical bid of the petitioner vide online rejection dated 31.07.2024 in relation to Tender Notice CPMGSUWATENGG2023012, dated 29.12.2023 as being arbitrary, illegal and violative of the petitioner's rights under Article 14 and 19 of the Constitution of India.
b) Set aside the Disqualification order dated 31.07.2024 of the Technical Bid of the Petitioner issued by Respondent No.1.
c) Direct the Respondent No.1 to conduct the tender process strictly in accordance with the terms and procedure stipulated in Tender Notice CPMGSUWATENGG2023012, dated 29.12.2023.
and to pass such other order or orders..."
2. The case of the petitioner is as follows:
3. The Petitioner's Company is a company incorporated under the Companies Act, 1956 and is a Class 1 contractor primarily engaged in infrastructure development activities across India. The Petitioner Company is reputed in building mega housings, iconic buildings, IT Parks, Industrial Structures, Hospitals, Railways, Airports, Monumental Statutes, National and State Highways and other infrastructural developments through General Contracts, EPC & BOT including all services on turnkey basis. 2
NV,J WP No.17150_2024
4. The Petitioner was the successful bidder of tenders called by Respondent No.2 with respect to similar works for upgradation of railway stations and is presently working on the redevelopment of Gwalior Railway Station, Madhya Pradesh. Although not a successful LI bidder, the Petitioner had participated in the tender process of redevelopment of Durg, Katpadi & Secunderabad stations and its technical bids were not rejected.
5. While so, Respondent No.1 issued RFP No.CPMGSUWATENGG 2023012 dated 29.12.2023 inviting bids for major upgradation of Vishakapatnam Railway Station, Vishakapatnam, Andhra Pradesh on EPC Mode. The Estimated project cost is Rs.433,56,19,990/-(Rupees Four Hundred Thirty Three Crore Fifty Six Lakhs Nineteen Thousand Nine Hundred and Ninety only) and the construction period was around 30 months. Pursuant to the tender notice of Respondent No.1, the petitioner herein submitted its bid document in compliance with the terms and conditions of the tender notice dated 29.12.2023.
6. To the utter surprise of the petitioner, the petitioner's bid was rejected at the technical bid opening stage. Rejecting the technical bid of the petitioner vide online rejection/ disqualification order dated 31.07.2024 is contrary to the true spirit of the terms and conditions of the tender document dated 29.12.2023. The said order of rejection dated 31.07.2024 was assailed in this writ petition.
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NV,J WP No.17150_2024
7. On the other hand learned Deputy Solicitor General of India filed vacate petition / counter affidavit on behalf of Respondent No.1, wherein it is stated that the writ petition filed by the petitioner is devoid of any merit and the same does not disclose any infringement of statutory or constitutional right of the petitioner. The documents brought on record with the writ petition themselves demonstrate that the Respondents have acted in accordance with the established public guidelines and it is the petitioner's company, which has been negligent in its conduct. The subject matter of the writ petition pertains to the work of the major upgradation of the Visakhapatnam Railway Station and the Respondents being the instrumentalities of the State cannot take any risk by loosely interpreting the contractual requirements mentioned in the concerned tender documents.
8. The salient terms of the tender governing the aforesaid activities amongst others are referred to herein below:
a. Technical Capacity as per Clause 2.2.2.1 of RFP b. Commercial Compliance:-
i. Appendix-V (Bid Security) as per Clause of 2.20 of RFP. ii. Annexure -III to Appendix -IA (Financial Capacity of the bidder) as per clause 2.2.2.2, 2.2.2.5(ii) and 2.2.2.4 of RFP. iii. Appendix IB (Letter Comprising the Financial Bid) as per clause 2.1.4 of RFP.
iv. Annexure-VII of Appendix-IA 4 NV,J WP No.17150_2024 c. Technical Compliance:
I. Annexure II To Appendix IA (Technical Capacity of the Bidder), as per Clause 2.2.2.1, 2.2.2.3 and 2.2.2.6 of RFP. II. Annexure IV To Appendix IA (Details of Eligible Projects), As per Clause 2.2.2.1, 2.2.2.3 and 2.2.2.6 of RFP. III. Annexure V To Appendix IA- (Statement of Legal Capacity), as per Clause 2.11.1 of RFP.
iv. Annexure I to Appendix IA (Details of Bidder), as per Clause 2.11.1 of RFP.
v. Appendix -IA (Letter Comprising The Technical Bid), as per Clause 2.1.4 of RFP.
vi. Appendix-II (Format For Power Of Attorney For Signing of Bid) as per Clause 2.1.5 of RFP.
vii. Appendix-III (Format For Power Of Attorney For Lead Member Of Consortium/Joint Venture), as per Clause 2.1.6 of RFP.
viii. Appendix IV (Format For Joint Bidding Agreement for Consortium/ Joint Venture), as per Clause 2.1.11 of RFP. ix. Appendix VI- Format For Affidavit To Be Uploaded By Bidder along With The Bid), as per Clause 3.1.6.1 of RFP.
9. It is further stated that the petitioner is purportedly aggrieved by the reasoned decision dated 31.07.2024 of the Respondents, wherein the petitioner has admittedly not submitted the complete Appendix-IA of Annexure-VII of the RFP. It however remains fact that in the tender document itself, through numerous provisions the prospective bidders where categorically appraised and had been put into warning that failure to submit 5 NV,J WP No.17150_2024 or all of the requisite documents, certificates and undertakings shall entail disqualification of their bids. It is further stated that bare perusal of the following contractual clause would unambiguously manifest that the submission of the complete signed copies of aforesaid admittedly incomplete Appendix-IA of Annexure-VII of the RFP was a mandatory prerequisite for qualifying in the technical bid and any departure from the same must result into disqualification of the bid.
A) Few of the clauses of the tender document which mandates submission of complete documentation and Information by the bidders are as follows:
i. As per Clause 2.10.1: The bidder shall provide all the Information sought under RFP. The authority will evaluate those bids that are received online in the required formats and complete in all respects. ii. Clause 2.11.1: The bidder shall first upload all the project details including technical capacity, financial capacity, net worth details, turn over details and all other details required in this RFP for technical qualification.
iii. Clause 2.2.2.5 : The Bidder shall enclose with its Technical Bid, to be submitted as per the format at Appendix- IA, complete with its Annexes...
iv. Clause 1.1.6 : The Authority shall receive Bids pursuant to this RFP in accordance with the terms set forth in this RFP and other documents to be provided by the Authority pursuant to this RFP, as modified, altered, amended and clarified from time to time by the Authority (collectively the "Bidding Documents"), and all Bids shall be prepared and submitted in accordance with such terms on oг before the Bid Due Date as specified in the KIT a provided in Clause 1.1.2 for submission of Bids (the "Bid Due Date"). v.Clause 3.1.6.1(g): Technical Bid contains all the information (complete in all respects);6
NV,J WP No.17150_2024 B) Few of the clauses of the tender document which elucidates that the petitioner has failed to submit mandatory certificates which are Imbibed in the admittedly not submitted Appendix-IA of Annexure-
VII of RFP.
i. Certificate regarding compliance :
A certificate shall be taken from bidders in the tender documents regarding their compliance with this Order. If such certificate given by a bidder whose bid is accepted is found to be false, this would be a ground for immediate termination and further legal action in accordance with law.
II. Model Certificate for Tenders:
"I have read the clause regarding restrictions on procurement from a bidder of a country which shares a land border with India; I hereby certify that this bidder is not from such a country and is eligible to be considered."
C) Few of the clauses of the tender document are cited herein below which demonstrate rights of the respondents to reject the bids of the petitioner or any other bidder without even assigning any reason, though in the instant case the Respondents have cited cogent reasons to reject the bid of the petitioner. i. DISCLAIMER :
The issue of this RFP does not imply that the Authority is bound to select the Bidder or Contractor, as the case may be, for the Project and the Authority reserves the right to reject all or any of the Bids without assigning any reason whatsoever.
ii. Clause 2.1.7: Any condition or qualification or any other stipulation contained in the Bid shall render the Bid liable to rejection as a non- responsive Bid.
iii. Clause 3.1.6.2 : The Authority reserves the right to reject any Technical Bid which is non-responsive and по request for modification, substitution alteration, or withdrawal shall be entertained by the Authority in respect of such Bid. iv. 2.16 Rejection of Bids :
2.16.1: Notwithstanding anything contained in this RFP, the Authority reserves the right to reject any Bid and to annul the 7 NV,J WP No.17150_2024 Bidding Process and reject all Bids at any time without any liability or any obligation for such acceptance, rejection or annulment, and without assigning any reasons thereof. In the event that the Authority rejects or annuls all the Bids, it may, in its discretion, invite all eligible Bidders to submit fresh Bids hereunder. 2.16.2: The Authority reserves the right not to proceed with the Bidding Process at any time, without notice or liability, and to reject any Bid without assigning any reasons.
D) Few of the clauses of the tender document are cited herein below which demonstrate the fact that the petitioner itself has unconditionally and unambiguously agreed to the rights of the respondents to reject the bids of the petitioner or any other bidder without even assigning any reason, though in the instant case the respondents have cited cogent reasons to reject the bid of the petitioner.
1. Appendix-IA :
1. Sl. No. 5: I/ We acknowledge the right of the Authority to reject our Bid without assigning any reason or otherwise and hereby waive, to the fullest extent permitted by applicable law, our right to challenge the same on any account whatsoever.
10. It is further stated that no cause of action has arisen and the respondent has not infringed any right of the petitioner that may warrant intervention of this Hon'ble Court. The Respondent humbly submits that the point No. 2, 5, 17 and 23 of the Letter comprising the technical bid (Appendix IA) and at point No. 2 & 3 of Appendix-VI that the rejection of the Bid of the Petitioner is just and bonafide and in compliance to the Bid document and terms and conditions laid down therein.
11. It is further stated that the respondents have demonstrated their fairness, reasonableness and transparent decision making process in its conduct as well as in the written objection. This Hon'ble Court should 8 NV,J WP No.17150_2024 respectfully exercise restraint from interfering into policy matters of the State wherein certain certificates, including those contained in Annexure VII of the Appendix IA of the RFP has been made part of mandatory submissions by bidders. The petitioner should not be granted any leave to amend and/or alter the petition or adduce new documents.
12. Learned senior counsel appearing for the petitioner submits that the technical bid of the petitioner is rejected, the same is contrary to the terms and conditions as mentioned herewith. He further submits that the subject requirement of compliance by the petitioner as canvassed by the Respondents is not a mandatory clause, even though the petitioner complied with the requirements of submission of Annexure-VII of Appendix 1A. As per Clause 2.11 i.e. Documents comprising Technical and Financial Bid, whereas the Clause 2.11.1 deals with all the documents to be submitted for technical bid. Out of which, the documents enumerated in Annexure VII is not mentioned as a mandatory documents. More so, the Clause 3.1 deals with Evaluation of Technical Bids, in which clause 3.1.3 and clause 3.1.4 speaks that:
3.1.3. If any information furnished by the Bidder is found to be incomplete, or contained in formats other than those specified herein, the Authority may, in its sole discretion, exclude the relevant information for consideration of eligibility and Qualification of the Bidder.
3.1.4. To facilitate evaluation of Technical Bids, the Authority may, at its sole discretion, seek clarifications in writing from any Bidder regarding its Technical Bid. Such clarification(s) shall be provided 9 NV,J WP No.17150_2024 within the time specified by the Authority for this purpose. Any request for clarification(s) and all clarification(s) in response thereto shall be in writing. The Bids will be examined and evaluated in accordance with the provisions set out in this Section 3. The Authority will subsequently flag issues, if any with the data updated by the Bidders.
13. Further, clause 3.1.6 deals with a Test of responsiveness, wherein it is stated under Clause 3.1.6.1(a), that Technical Bid is received online as per the format at Appendix-1A including Annexure I, II, III, IV, V and Appendix-VI.
Therefore, as per the Test of responsiveness, Annexure VII is not a mandatory document. Even as per the Technical Compliance, Annexure VII is not mentioned as a mandatory document. Further, point No.7 of the Commercial Compliance speaks about the Tenderer must submit Mandatory certificate as per Annexure VII i.e. Instructions for bidders from a country that shares a land border with India. Admittedly, the petitioner is an Indian National, as such, point No.7 of the Commercial Compliance is not a mandatory procedure on part of the petitioner.
14. Learned senior counsel also reiterates that as per clause 2.1.4 the bid shall be submitted as per Appendix 1A and 1B i.e. technical bid as per Appendix 1A and financial bid as per Appendix 1B. He further affirms that as per clause 2.2.2.5, the bidder shall enclose its technical bid as per Appendix-1A. Accordingly, the petitioner submitted all the required documents in compliance of the technical bid as per the clauses as stated above. Therefore, the rejection of the bid of the petitioner for the reason of 10 NV,J WP No.17150_2024 incomplete document referred to Annexure-VII of Appendix-1A which is only an invented one and it is not a mandatory document for consideration of technical bid, it is not at all required as per clauses 2.11 and 2.11.1 and as per clauses 3.1.3 and 3.1.4, even as per test of responsiveness as per clause 3.1.6.1.
15. Learned senior counsel further submits that the petitioner executed a letter in compliance of the technical bid as per Appendix 1A declaring all the compliances, as such, it is nothing but Appendix 1A including Annexure VII. Therefore, the subject rejection of the technical bid of the petitioner is contrary to Articles 14 and 19 of the Constitution of India and also arbitrary and illegal, for the reasons best known to the Respondents, for which the learned senior counsel relied upon the legal propositions laid down by the Hon'ble Apex Court in Kanhaiya Lal Agarawal vs. Union of India and Others1, Poddar Steel Corporation vs. Ganesh Engineering Works and Others2, Maa Binda Express Carrier and Other vs. North East Frontier Railway and Others3 and Mumbai International Airport Private Limited vs. Regency Convention Centre and Hotels Private Limited and others 4. 1 (2002) 6 SCC 315 2 (1991) 3 SCC 273 3 (2014) 3 SCC 760 4 (2010) 7 SCC 417 11 NV,J WP No.17150_2024 In similar circumstances this Court also held in W.P.No.42187 of 2022 that any rejection is not in compliance of essential conditions is unsustainable.
16. Learned Deputy Solicitor General of India submits that the present writ petition is liable to be rejected since there is no infringement of any statutory rights or constitutional rights guaranteed on the part of the petitioner. Further the petitioner in his entire affidavit neither pleaded any illegality, malice nor arbitrariness or highhandedness on the part of the Respondents. He further submits that in the evaluation of the tender process, even technical issues cannot be assessed and in the absence of any arbitrariness or illegality, there cannot be a judicial review under extraordinary jurisdiction under Article 226 of the Constitution of India.
17. Learned counsel further submits that the Respondents have treated all the bidders in a similar manner without any departure from what has to be mandated in terms of the tender. Accordingly, five technical bids including the petitioner rejected by the Respondents for respective failures in submission of required documents and also enumerated cogent reasons for such rejection. The technical bid of the petitioner herein was rejected due to the submission of incomplete documents and records as per annexure VII of Appendix 1A. He further submits and denied that the reliance placed by the petitioner upon clauses 2.2.2.1, 2.2.2.3, 2.2.2.4 and 2.2.2.5 of the RFP (tender documents) is misplaced. He further observed that the petitioner 12 NV,J WP No.17150_2024 ignored the mandatory nature of submission of Annexure VII of Appendix 1A of the RFP (tender) is expressed at point No.7 of the Commercial Compliance. The Point No.7 of the commercial compliance specifically mandated as per annexure 1A of the RFP documents. As such, the contention of the petitioner itself is not a mandatory document, cannot be considered.
18. Learned counsel further submits that the bid of the petitioner has been rejected for the non-submission of Annexure VII of Appendix 1A which is in violation of Point No.7 of commercial compliance of check list and Clause 2.1.4. Therefore, the rejection of the technical bid of the petitioner is reasoned one. He further reiterates that the reliance of the petitioner upon clause 2.6.2 is misplaced and clause 2.16 deals with the Rejection of Bids in which clause 2.16.1 states that the Respondents are empowered or reserves the right to reject any Bid and to annul the Bidding Process and reject all Bids at any time without any liability or any obligation. For more understanding as extracted here under:
2.16 Rejection of Bids 2.16.1 Notwithstanding anything contained in this RFP, the Authority reserves the right to reject any Bid and to annul the Bidding Process and reject all Bids at any time without any liability or any obligation for such acceptance, rejection or annulment, and 13 NV,J WP No.17150_2024 without assigning any reasons thereof. In the event that the Authority rejects or annuls all the Bids, it may, in its discretion, invite all eligible Bidders to submit fresh Bids hereunder.
19. Learned counsel further submits that the reliance of the petitioner upon clause 2.11.1, 3.1.3, 3.1.5, 3.1.6.1 of RFP are misplaced. He further submits that no cause of action has arisen and there is no infringement of any right of the petitioner that either the Fundamental Right or the Constitutional Right by any action or omission of the Respondents, for which, learned counsel for the Respondents relied upon the ratio laid down by the Hon'ble Apex Court in Tata Cellular vs. Union of India, wherein it was held that judicial review of Government contracts was permissible in order to prevent arbitrariness or favourtism. The principles enunciated in this case are i. The modem trend points to judicial restraint in administrative action ii. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
iii. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the Invitation to tender cannot be 14 NV,J WP No.17150_2024 open to judicial scrutiny because the invitation to tender is in the realm of contract.
iv. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not such decisions are made qualitatively by experts v. The Government must have freedom of contract in other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but 1 (1994) 6 SCC 651 must be free from arbitrariness not affected by bias or actuated by mala fides. vi. Quashing decisions may impose heavy administration burden on the administration and lead to increased and unbudgeted expenditure.
20. Learned counsel for the Respondents further relied upon the ratio laid down by the Hon'ble Supreme Court in Jagdish Mandal vs. State of Orissa, wherein it was held as follows:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made 15 NV,J WP No.17150_2024 "lawfully" and not to check whether choice or decision is "sound"
When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are functions, essentially commercial functions."
21. Learned counsel for the Respondents also relied upon the ratio laid down by the Hon'ble Apex Court in Silppi Contractors vs. Union of India, dated 21.06.2019, wherein it is observed as under:
The essence of the law laid down In the judgments referred to above is the exercise of restraint and caution, the need for overwhelming 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 unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference 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 16 NV,J WP No.17150_2024 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.
22. Heard Sri Dammalapati Srinivas, learned senior counsel representing Sri Vimal Varma Vasireddy, learned counsel for the petitioner and Sri Pasala Ponna Rao, learned Deputy Solicitor General of India and also perused the material placed on record.
23. On perusal of the entire material on record and having regard to the submissions made by both counsels, the issue to be determined here is "whether the rejection of the technical bid of the petitioner for submission of incomplete documents of Annexure-VII of Appendix 1A is valid or not ?"
24. In the process of determination of said issue it is relevant to extract few clauses as quoted by learned senior counsel for the petitioner as under:
2.11 Documents comprising Technical and Financial Bid 2.11.1. The Bidder shall first upload all the project details including Technical Capacity. Financial Capacity, Net Worth details, turnover details and all other details required in this RFP for technical qualification. The Bidder shall ensure that all the details are updated as on the due date of submission of this Bid. 17
NV,J WP No.17150_2024 The Bidder shall then apply for the RFP by submitting the documents mentioned below along with the supporting documents which shall comprise of the Technical Bid on the e- Procurement Portal.
Technical Bid
(a) Appendix-IA (Letter comprising the Technical Bid) including Annexure I-V and supporting certificates/documents. 3.1 Evaluation of Technical Bids 3.1.3 If any information furnished by the Bidder is found to be incomplete, or contained in formats other than those specified herein the Authority may, in its sole discretion exclude the relevant information for consideration of eligibility and Qualification of the Bidder 3.1.4 To facilitate evaluation of Technical Bids, the Authority may, at its sole discretion, seek clarifications in writing from any Bidder regarding its Technical Bid. Such clarification(s) shall be provided within the time specified by the Authority for this purpose. Any request for clarification(s) and all clarification(s) in response thereto shall be in writing. The Bids will be examined and evaluated in accordance with the provisions set out in this Section 3. The Authority will subsequently flag issues, if any with the data updated by the Bidders.
3.1.6 Tests of responsiveness 3.1.6.1 As a first step towards evaluation of Technical Bids, the Authority shall determine whether each Technical Bid is responsive 18 NV,J WP No.17150_2024 to the requirements of this RFP A Technical Bid shall be considered responsive only if:
(a) Technical Bid is received online as per the format at Appendix-
IA including Annexure I, II, III, IV, V and Appendix-VI;
(f) Technical Bid is accompanied by Affidavit as specified in 2.11.1.
25. As per the technical compliance, the checklist does not requires submission of Annexure VII of Appendix 1A. Even as per terms of commercial compliance that the point No.7 is mandated from a bidder of another country which shares a land border from the community but not for the bidder of own country. In compliance of the same, the petitioner also submitted a declaration as envisaged under the tender document under Annexure VII of Appendix 1A .
26. The contention of the learned counsel for the petitioner that since annexure VII of Appendix 1A is a non-essential tender condition and as such the technical bid of the petitioner cannot be rejected by invoking an ancillary condition against the petitioner is a merit submission and liable to be considered, for the reason, the Respondents did not stress anything about the eligibility criteria of the petitioner in respect of any mandated terms of tender notice, except invoking the ancillary condition.
27. On perusal of the RFP as marked above, it is clear and categorical, the RFP / tender notice classified the terms/requirements in two categories i.e. 19 NV,J WP No.17150_2024 essentials conditions of eligibility and other conditions are ancillary or subsidiary to achieve or to understand the main object of essential conditions. As per the Clause 2.11.1(a) it is clearly demonstrates the requirement of documents for technical bid are enumerated at Appendix-IA including Annexure I to V and supporting certificates / documents. Nowhere, the essential documents are contemplated for technical bid at Annexure VII of Appendix 1A. The other clauses as extracted above indicates Annexure VII is only ancillary and subsidiary one but not an essential condition for eligibility of technical bid.
28. The contention of learned Deputy Solicitor General of India that the Annexure VII and Appendix 1A is mandatory as per commercial compliances as per check list at Sl.No.7, is not at all applicable to the petitioner which is extracted as under:
Sl.No. Description Confirmation Remarks Documents Required Allowed uploading
7. The Tenderer must No No Allowed submit Mandatory Certificate as per Annexure-VII (Mandatory) (instructions for bidders from a country which shares a land border with India as per clause APPENDIX-IA) 20 NV,J WP No.17150_2024
29. The core contention of the learned senior counsel for the petitioner that since the order of rejection of the technical bid of the petitioner basing upon ancillary condition is contrary to the jurisdiction laid down by the Hon'ble Apex Court as well this Court is in accordance with law and sustainable, in view of the legal principles laid down by the Hon'ble Apex Court as well as this Court as extracted herein under.
30. In Kanhaiya Lal Agarwal vs. Union of India and Others (1 supra), the Hon'ble Apex Court observed as under:
6. It is settled law that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to consequence of non-compliance thereto.
If non-fulfilment of the requirement results in rejection of the tender, then it would be essential part of the tender otherwise it is only a collateral term. This legal position has been well explained in G.J. Fernandez vs. State of Karnataka5.
31. In Poddar Steel Corporation vs. Ganesh Engineering Works and Others(2 supra), the Hon ble Apex Court held as follows: 5
(1990) 2 SCC 488 21 NV,J WP No.17150_2024 As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous details and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories-
those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases.
32. In Maa Binda Express Carrier and Another vs. North-East Frontier Railway and Others(3 supra), the Hon'ble Apex Court observed as under:
All that participating bidders are entitled to is a fair, equal and non- discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well-settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor 22 NV,J WP No.17150_2024 made to benefit any particular tenderer or class of tenderers. So also the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process.
33. In Mumbai International Airport Private Limited vs. Regency Convention Centre and Hotels Private Limited and Others (4 supra), the Hon'ble Supreme Court held as follows:
15. A necessary arty' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a necessary party' is not impleaded, the suit itself is liable to be dismissed. A proper party' is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance. 23
NV,J WP No.17150_2024
34. This Court in W.P.No.42187 of 2022, dated 05.07.2023, observed as under:
5. Learned senior counsel for the petitioner in elaboration to what has been stated in the affidavit contended that, having vast experience in the said field, the petitioner participated in the tenders issued by the 2nd respondent with al required supporting documents as per the tender conditions, but unfortunately the petitioner's technical bid was rejected on 12.12.2022 by duly mentioning that it is technically unsustamable and the board resolution has not been signed by authorized directors as per the submitted MOA/AOA The said proceedings it. 12.12.2022 is placed on record and has drawn the attention of this Court to the same.
7. The learned senior counsel further submitted that, the petitioner's price bid is 7% less than the lowest bidder and if the petitioner's bid is considered, public money of INR 2 crores will be saved and the authorities did not look into these aspects while rejecting the petitioner's tender
11. The petitioner has submitted the tender on 10.10.2022, the petitioner's commercial tender has been rejected on the ground that, the board resolution has not been signed by the authorized 24 NV,J WP No.17150_2024 director as per the submitted MOA/AOA and stated that the petitioner's bid is technically unsustainable. it is not the case of the respondent that the petitioner is not having technical qualification/criteria. The relevant clause involved in the present case is that 14(ii)(e) (iii) which reads as follows:
"A copy of authorization/power of attorney issued by company (backed by the resolution of Board of Directors) in favor of the individual to sign the tender on behalf of the company and create liability against the company".
On perusal of the said documents it clearly shows that the said Sri Anantapurguggilla Ravindranath Reddy is the director of the petitioner's company and the person who has signed on the resolution. It is not the case of the 2nd respondent that the petitioner is lacking tender credentials or eligibility criteria. If the petitioner is not having tender credentials, his tender can be rejected as per clause 12 of the tender condition and in the present case such is not the situation. As stated supra, the reasons for rejecting the petitioners bid atmost falls under clause 14(ii)(e)(iii). If at all the respondents have any doubt in this regard they can seek clarification about the same from the petitioner as per clause 5(e) which reads as follows.
25
NV,J WP No.17150_2024 "to assist in the examination, evaluation, comparison and pre- qualification of tender the railway may, at its discretion ask any bidder for clarification of its bid and any clarification submitted by a bidder that is not in response to a request by the railway shall not be entertained or considered and the railway request for clarification and the response of the bidder in this regard shall be in writing".
12. As such, the order impugned is unsustainable. Taking the submissions of learned counsel for the petitioner into consideration, and judgments referred supra, this Court is of the opinion that the petitioner has made out point for consideration warranting the interference of this Court, as such this Writ Petition is liable to be allowed.
35. In view of the foregoing discussion and on perusal of the settled proposition of law as extracted above, the impugned action of rejection of the technical bid of the petitioner on the basis of ancillary conditions is contrary to the law and also contrary to the mandated terms of the tender document. Hence, the impugned rejection is lacks merit, unjustified, unsustainable and liable to be set aside.
36. As far as the claim of the implead petitioner that it became L1 and it was selected as successful bidder cannot be accepted in view of the clear and categorical admission of the learned Standing Counsel for the official Respondents that pursuant to the interim direction of this Court the selection process of tender and declaration of the successful bidder is not finalized. 26
NV,J WP No.17150_2024 Therefore, the claim of the implead petitioner that it was selected as successful bidder is liable to be rejected. Hence rejected.
37. In view of the foregoing reasons as stated above the writ petition is allowed and the impugned proceedings / order of disqualification issued by Respondent No.1 vide online rejection dated 31.07.2024 is hereby set aside.
38. However, the Respondents are at liberty to proceed further by considering the financial bid of the petitioner along with others who qualified for technical bid, as if the petitioner also qualified and finalized the tenders as per the terms of the tender document and in accordance with law.
39. Further, the Respondents are also at liberty to proceed further afresh in accordance with law. There shall be no order as to costs. Consequently, miscellaneous applications pending if any, shall stand closed.
______________________________________ JUSTICE VENKATESWARLU NIMMAGADDA 3rd December, 2024 Note: Issue CC by 06.12.2024 B/o.
Knr 27 NV,J WP No.17150_2024 HON'BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION No.17150 of 2024 3rd December, 2024 knr