Madras High Court
Psa Ennore Pte. Ltd vs Union Of India on 11 December, 2009
Author: D.Murugesan
Bench: Chief Justice, D.Murugesan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.12.2009 CORAM THE HONOURABLE MR.H.L.GOKHALE, THE CHIEF JUSTICE and THE HONOURABLE MR.JUSTICE D.MURUGESAN W.P.Nos.13964, 14387, 14605 & 16027 of 2009 PSA Ennore Pte. Ltd. 460 Alexandra Road #38-00 PSA Building Singapore 11996 represented by Kenny Low Kwan How Petitioner in its authorised signatory .. W.P.No.13964 of 2009 Sical Infra Assets Limited (SIAL) A company incorporated under the provisions of the Companies Act, 1956 and having its Registered Office at "South India House" 73, Armenian Street, Chennai 600 001 represented by its Authorised Signatory Petitioner in Mr.S.R.Ramakrishnan .. W.P.No.14387 of 2009 DP World Limited represented by its Authorised Signatory Mr.Kevin D'Souza Registered Office at P.O.Box 17000 Dubai 1st Petitioner in United Arab Emirates .. W.P.No.14605 of 2009 IDFC Projects Ltd Naman Chambers C-32, "G" Bloc Bandra Kurla Complex 2nd Petitioner in Bandra East, Mumbai 400 051 .. W.P.No.14605 of 2009 South India Corporation Limited Rani Seethai Hall No.603, Anna Salai Chennai 600 006 Petitioner in rep.by its Director RM.Palaniappan .. W.P.No.16027 of 2009 versus Union of India represented by its Secretary Ministry of Shipping, Road Transport and Highways Transport Bhavan 1, Parliament Street 1st respondent in New Delhi 110 001 .. W.P.No.16027 of 2009 Ennore Port Limited represented by its Chairman Sole Respondent in and Managing Director W.P.No.13964 of 2009 & No.23, Rajaji Salai, First Floor 2nd respondent in Chennai 600 001 .. W.P.No.16027 of 2009 Ennore Port Limited represented by its Chairman P.T.Lee Chengalvaraya Naicker Maaligai First Floor 23, Rajaji Salai 1st respondent in W.P.Nos. Chennai 600 001 .. 14387 & 14605 of 2009 The Director (Operations) Ennore Port Limied P.T.Lee Chengalvaraya Naicker Maaligai First Floor, 23, Rajaji Salai 2nd respondent in W.P.Nos. Chennai 600 001 .. 14387 & 14605 of 2009 SBI Capital Markets Limited Circle Top House, Ground Floor Aparna Complex No.16, College Lane 3rd respondent in Chennai 600 006 .. W.P.No.14387 of 2009 W.P.No.13964 of 2009 filed under Article 226 of the Constitution of India for the issue of a Writ of Certiorarified Mandamus calling for the records and quash the communication of the respondent dated July 10, 2009 in not short listing the petitioner for the bid stage, quashing the list of prequalified applicants if any released by the respondent and to consequently direct the respondent to consider the application made by the petitioner Consortium and shortlist the Consortium for the RFP bid stage for the development of the container terminal at Ennore Port. W.P.No.14387 of 2009 filed under Article 226 of the Constitution of India for the issue of a Writ of Certiorarified Mandamus calling for the records of the 2nd respondent culminating in the impugned order dated 10.7.09 bearing Ref.No.EPL/OP/12.6/054 and quash the same and direct the respondents to adhere to the evaluation process under clause 2(D) and the criteria for evaluation of clause 3 as laid down in Tender-Request for Qualification No.EPL/BOT-4/2008 for development of container terminal on Build, Operate and Transfer (BOT) basis and award scores to the petitioner in accordance with law before short listing the applicants for submitting the Request for Proposal (RFP) for the above project. W.P.No.14605 of 2009 filed under Article 226 of the Constitution of India for the issue of a Writ of Certiorarified Mandamus calling for the records of the first respondent relating to the letter No.EPL/OP/12.6/054 dated 10th July, 2009 and quash the same in not short listing the petitioner for the Bid Stage and consequently direct the first respondent to short list the petitioner consortium for the RFQ Bid Stage for development of Container Terminal at Ennore Port. W.P.No.16027 of 2009 filed under Article 226 of the Constitution of India for the issue of a Writ of Certiorarified Mandamus calling for the records of the second respondent in its order in Ref.EPL/OP/12.6/054 dated 10.7.2009 and set aside the same as being arbitrary, illegal and contrary to the express terms of request for Qualification document dated March 2006 and bearing No.EPL/BOT-4/2008 issued by the second respondent and consequently direct the second respondent to treat the petitioners consortium as having satisfied the threshold technical capabilities required and consider them for shortlisting. For Petitioners : Mr.Arvind P.Datar Senior Counsel for Mr. Sivam Sivanandharaj for the petitioner in W.P.No.13964 of 2009 Mrs.Nalini Chidambaram Senior Counsel for M/s C.Uma for the petitioner in W.P.No.14387 of 2009 Mr.A.L.Somayaji Senior Counsel for Mr.V.Perumal for the petitioner in W.P.No.14605 of 2009 Mr.Rahul Balaji for M/s Sathish Parasaran for the petitioner in W.P.No.16027 of 2009 For Respondents : Mr.M.Ravindran Additional Solicitor General of India assisted by M/s Krishna Ravindran for M/s Authority Limited ORDER
D.MURUGESAN, J.
Ennore Port Limited (hereinafter referred to as "the Ennore Port") is one of the 12 major ports under the Ministry of Shipping, Road Transport and Highways, Government of India. It issued advertisements on 7.3.2008 in "The Economic Times, Mumbai Edition" and in "The Hindu, Chennai Edition" calling for bids for the proposed development of a container terminal at Ennore Port in Tamil Nadu on the Build, Operate, Transfer (BOT) basis. The bid was for selection of a developer to "design, engineer, finance, construct, operate, maintain, market, provide project facilities and services" of a container terminal with a quay length of 1000 metres and an estimated capacity of 1.50 million TEU on BOT basis for a concession period of 30 years at an indicative capital project cost of Rs.1300 crores. As per clause 1.2.1, the Ennore Port adopts a two-stage process (collectively referred to as the "Bidding Process") for selection of the bidder for award of the project. The first stage (Qualification Stage) of the process involves qualification of interested parties / consortia who make an application in accordance with the Request for Qualification document (RFQ). At the end of the said stage, the Ennore Port will announce a shortlist of five suitable pre-qualified applicants who shall be eligible for participation in the second stage of the bidding process comprising the Request for Proposals (RFP). A set of procedure is prescribed by way of instructions to the applicants. Clause 2(A) relates to general eligibility norms. Clause 2.2.1 relates to the eligibility of applicants. Clause 2.2.2 relates to the eligibility for pre-qualification shortlisting in technical capacity and financial capacity. The nature of documents to be submitted is prescribed under instruction 2(B). Clause 3 relates to the criteria for evaluation including the technical capacity and financial capacity. Only those applicants who are pre-qualified and shortlisted by the Ennore Port shall be invited to submit their bids for the project.
2. Accordingly, the intending bidders submitted their applications for consideration by the Ennore Port for the purpose of Request for Qualification and for shortlisting. The RFQ documents were opened on 20.5.2008 and the scores obtained by 22 applicants on the basis of self assessment were announced. The writ petitioners were not shortlisted and, therefore, they were not made entitled for consideration at the bid stage regarding the technical capacity / financial capacity in respect of the project in accordance with the RFP document, and a decision to this effect was communicated to the petitioners by the communication dated 30.6.2008, which was questioned by each of the petitioners in separate writ petitions. The learned single Judge, by orders dated 21.1.2009 & 21.4.2009, rendered a finding that even in Government contracts there should not be arbitrariness and the reasons for refusal to shortlist the petitioners should have been communicated to each of the petitioners and failure of the same would amount to non-application of mind. Though the learned Judge found that the Ennore Port is obliged to assign reasons for refusal of the tenders of the applicants in not shortlisting them for the next stage of bid, he did not hold against the Ennore Port on the above issue for the reasons stated in the counter affidavits. However, the learned Judge found that the Ennore Port was not justified in refusing to exercise its discretion in seeking clarification from the applicants as required under clause 2.20.1 of the RFQ document. In the absence of such clarification, the applications ought not to have been rejected in terms of clause 2.20.2 of the RFQ document. With the above observations, the learned Judge remitted the matter to the Ennore Port to make fresh evaluation after seeking clarification from the petitioners. After the above orders, with various reasons, the Ennore Port once again refused to shortlist the petitioners and communicated the decision with reasons. Hence they have approached this Court by way of the present writ petitions.
3. Before we delve upon to the challenges made, we may refer to the law on the limitations of the authority while considering the applications and the scope of judicial review in the matters relating to the award of Government contract. Regarding the limitations of the authority while considering the RFQ document, we may refer to the following judgment of the Apex Court. In Poddar Steel Corporation v. Ganesh Engineering Works and others, (1991) 3 SCC 273, the Apex Court has held that "except some minor deviations, the authorities must strictly adhere to the tender conditions and must enforce them with rigidity."
4. Regarding the scope of judicial review in Government contract, we may refer to the following judgments of the Apex Court. Before that, we may also refer to the following judgment of the King's Bench. In Associated Provincial Picture Houses Limited Vs. Wednesbury Corporation, (1948 (1) KB 223), the principle known as Wednesbury principle of reasonableness is explained. In that case it was held that a decision of public Authority is liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings if the decision is such that no Authority properly directing itself on the relevant law and acting reasonably could have reached it.
5. In Sterling Computers Limited v. M/s M & N Publications Limited and Others, (1993) 1 SCC 445, the Apex Court has held that "though the public authorities have some discretion in the contracts having commercial element, the discretion is not absolute and must be governed by some norms and procedures in public interest and for public good. The Court can intervene in the decision-making process of public authorities, if such decision is influenced by extraneous/irrelevant consideration which would ultimately vitiate the decision even if it is without bias."
6. In Tata Cellular Vs. Union of India, (1994) 6 SCC 651, the Apex Court has laid down the following principles:-
(1) The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made.
(3) 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 open to judicial scrutiny because the invitation to tender is in the realm of contract. 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.
(5) 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 must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. In the very same judgment, the Apex Court has also held that the duty of the Court is to confine itself to the question of legality and 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.
Again in the very same judgment, the Apex Court has also laid down two other facets of irrationality, and they are as follows:-
(1) It is open to the Court to review the decision-makers evaluation of the facts. The Court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way cannot be upheld.
(2) A decision would be regarded as unreasonable if it is partial and unequal in its operation as between different classes.
7. In New Horizons Limited Vs. Union of India, (1995) 1 SCC 478, after referring to the decision in Tata Cellular case, the Apex court has held that the Courts cannot review the conditions of tender. It was also held that the State, in exercise of its various functions, is governed by the mandate of Article 14 of the Constitution, which excludes arbitrariness in State action, and requires the State to act fairly and reasonably. It was further held that the decision of the Court therefore insist that while dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and be in conformity with the standards or norms which are not arbitrary, irrational or irrelevant.
8. In Air India Limited Vs. Cochin International Airport Limited, (2000) 2 SCC 617, the Apex Court has held that "while the State can choose its own method in fixing the conditions, it should comply with the norms, standard and procedure and the decision should be on the basis of overall view of the transaction after weighing various relevant factors and having regard to commercial viability." The Apex Court further observed in paragraph-7 as follows:
"7....The award of a 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 paramount are commercial considerations. The State can choose it 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 tender conditions permit such a relaxation. It may not accept the 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."
9. In Union of India and others v. Dinesh Engineering Corporation and another, (2001) 8 SCC 491, the Apex Court has again reiterated the law that in the event the decision of the authorities amounts to arbitrariness, the power of judicial review would be still available.
10. In Directorate of Education and others v. Educomp Datamatics Ltd. and Others, (2004) 4 SCC 19, the Apex Court has held that the Courts can scrutinise the award of the contracts by the Government or its agencies in exercise of their powers of judicial review to prevent arbitrariness or favouritism.
11. In Association of Registration Plates v. Union of India and others, (2005) 1 SCC 679, the Apex Court has reiterated the law as follows:
"Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the Government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated against, to the detriment of public interest. Undisputedly, the legal position which has been firmly established from various decisions of the Supreme Court is that government contracts are highly valuable assets and the court should be prepared to enforce standards of fairness on the Government in its dealings with tenderers and contractors.
In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. 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. Unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, tender conditions are unassailable."
12. In Global Energy Ltd. and another Vs. M/s Adani Exports Ltd. and others, AIR 2005 SC 2653, the Apex Court has held as follows:-
The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court.
13. In Jayrajbhai Jayantibhai Patel v. Anilbhai Nathubhai Patel and others, (2006) 8 SCC 200, the Apex Court has held as follows:-
"Having regard to it all, it is manifest that the power of judicial review may not be exercised unless the administrative decision is illogical or suffers from procedural impropriety or it shocks the conscience of the court in the sense that it is in defiance of logic or moral standards but no standardised formula, universally applicable to all cases, can be evolved. Each case has to be considered on its own facts, depending upon the Authority that exercises the power, the source, the nature or scope of power and the indelible effects it generates in the operation of law or affects the individual or society. Though judicial restraint, albeit self-recognised, is the order of the day, yet an administrative decision or action which is based on wholly irrelevant considerations or material; or excludes from consideration the relevant material; or it is so absurd that no reasonable person could have arrived at it on the given material, may be struck down. In other words, when a court is satisfied that there is an abuse or misuse of power, and its jurisdiction is invoked, it is incumbent on the court to intervene. It is nevertheless, trite that the scope of judicial review is limited to the deficiency in the decision-making process and not the decision."
14. In Noble Resources Limited v. State of Orissa and another, (2006) 10 SCC 236, the Apex Court has held that the contractual matters are not beyond the realm of judicial review. However, its application may be limited to an extent of scrutinising the decision-making process and in that event, it is always open to the court to review the evaluation of facts by the decision-maker.
15. In Reliance Energy Ltd., and another v. Maharashtra State Road Development Corporation Ltd., and others, (2007) 8 SCC 1, the Apex Court has held that judicial review is intended only to prevent arbitrariness in contractual matters.
16. In Puravankara Projects Ltd., v. Hotel Venus International and others, (2007) 10 SCC 33, the Apex Court has held that "in essence the tender terms being contractual, it is the privilege of the Government which invites its tenders and courts do not have jurisdiction to judge as to how the tender terms should be framed." The Apex Court also went on to add that "just as the principles of natural justice ensure fair decision where function is quasi-judicial, the doctrine of fairness is evolved to ensure fair action when the function is administrative."
17. In Jagdish Mandal v. State of Orissa and others, (2007) 14 SCC 517, the Apex Court, after referring to all the judgments on the issue, has ultimately held in paragraph-22 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 "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 essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the Authority is mala fide or intended to favour someone;
or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected."
18. Recently the Apex Court in Meerut Development Authority v. Association of Management Studies and another, (2009) 6 SCC 171, while considering the nature of rights of a bidder participating in the tender process, has held as follows:-
"26. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.
27. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.
28. It is so well settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process.
29. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favouritism."
19. An analysis of the various judgments would show the following settled position of law, which are relevant for the purpose of disposal of these writ petitions:
(1) The authorities must strictly adhere to the tender conditions and must enforce them with rigidity, except some minor deviations.
(2) The Court can intervene in the decision-making process of the public authorities, only if such decision is influenced by extraneous/irrelevant consideration; arbitrariness, unfairness, favouritism, abuse of power, error of law and other reasons indicated in the aforesaid judgments.
Having laid down the law, the Apex Court has also cautioned that there must be a judicial restraint in administrative action and the power of judicial review must be exercised only if it is so warranted on the given facts of the case. As the scope of judicial review depends upon the facts of each case, we now propose to consider the grievance of the respective writ petitioners hereunder.
W.P.No.13964 of 2009:
20. The petitioner is PSA Ennore Pte. Ltd., a company incorporated under the laws of Singapore and having its registered office at Singapore. The petitioner is represented by its authorised signatory Mr.Kenny Low Kwan How. According to the petitioner, it is a wholly owned subsidiary of PSA India Pte. Ltd., which in turn is a wholly owned subsidiary of PSA International Pte. Ltd. and is a part of the PSA group. Their principal business is the provision of integrated container terminal services including multi-purpose terminal services. PSA group has operations in 28 ports in 16 countries across Asia, Europe and America and a global capacity of 111 million TEUs and over 66 kilometres of quay length. PSA International Pte.Ltd., has been voted Best Global Container Terminal Operator for the consecutive years since 2005. PSA International Pte.Ltd., handled 58.9 million TEUs of containers worldwide in the year 2007.
21. Pursuant to the advertisement, the petitioner together with ABG Infralogistics Limited and Schelde Container Terminal Noord N.V., formed a consortium and submitted its application relating to the RFQ document. The petitioner is the lead member of the consortium. ABG Infralogistics Limited and Schelde Container Terminal Noord N.V., are the technical and financial members of the consortium. The applicant claimed to have submitted the documents consisting of self evaluation in respect of the eligibility criteria which are divided into (a) Technical Capacity and (b) Financial Capacity for the purpose of evaluation. By a communication dated 30.6.2008, the Ennore Port informed the petitioner that the consortium has not been shortlisted for the bidding stage. That was questioned by the petitioner in W.P.No.16957 of 2008. That writ petition was allowed and the matter was remitted back to Ennore Port for obtaining the clarification from the petitioner before a decision is taken to shortlist. That order was passed on 21.1.2009. According to the petitioner, in spite of the order, the Ennore Port did not seek for such clarification which necessitated the petitioner to issue reminder on 18.3.2009. Only thereafter, the Ennore Port by its letter dated 26.3.2009 sought certain details relating to the shareholding and the directorship of the petitioner as well as those of Temasek Holdings (Private) Limited (Temasek) and certain other entities in the PSA group. That letter was responded by the petitioner and informations were also submitted in their letter dated 2.4.2009. The petitioner has also sought for an enquiry as to the alleged conflict of interest between the petitioner and Neptune Orient Lines Limited (NOL). Without affording such opportunity of personal hearing in the enquiry, by the impugned communication dated 10.7.2009, the petitioner was informed that the consortium was not shortlisted for the bid stage of the project. The above order is questioned in this writ petition.
22. Mr.Arvind P.Datar, learned senior counsel appearing for the petitioner would submit that the finding relating to the conflict of interest is perverse and illusory. The first ground, namely, that Temasek holds a shareholding in the petitioner as well as in NOL is contrary to the express observations in the prior judgment that the mere existence of such a shareholding could not result in the existence of a conflict of interest. The second ground, namely, Mr.Kua Hong Pak, a board member of PSA International is also a board member of Temasek and Mr.Simon Israel, a board member of NOL, is also a board member of Temasek and that the finding that these directors are common to the petitioner and NOL is also perverse and contrary to the materials on record. After receipt of the impugned order, the petitioner also wrote a letter on 12.7.2009 pointing out the above defects and called upon the Ennore Port to withdraw its decision. There was no response to the said letter necessitating the petitioner to approach this Court. The learned senior counsel would submit that Temasek is a sovereign wealth fund with global investments and does not interfere with the management of the companies in which it holds investments. The Ennore Port should have appreciated that Temasek was therefore entitled to the same exception that had been created with respect to certain categories of financial capacities in the RFQ document. The impugned order was passed mechanically and without application of mind. He would also submit that the earlier finding of the learned single Judge that there was no conflict of interest has not been considered and the same ground is again restated in the impugned order. Failure to give a further opportunity also would vitiate the order. In support of the above submissions, the learned senior counsel would refer to clause 2.2.1(c)(v) of the RFQ document and particularly to clause 2.2.1(c), which states that an applicant shall not have a conflict of interest that affects the bidding process and any application found to have a conflict of interest shall be disqualified. On the facts and circumstances of this case, the said clause is not applicable, since there is no direct relationship between the consortium in which PSA Ennore Pte.Ltd., is a lead member and the consortium in which Mundra Ports and Special Economic Zone Limited is the lead member and there is no common third party to both the applicants. He would also submit that the consortium does not have any directors as it is not an incorporated company and therefore there are no common directors insofar as the applicant is concerned. Though Temasek and PSA International have a common director namely, Mr.Kua Hong Pak, he is not a director in PSA Ennore Pte.Ltd, which is a constituent of the petitioner consortium. Likewise, though Mr.Simon Israel is a director in Temasek and NOL, he is not a director in any of the constituent companies that form part of the consortium in which PSA Ennore Pte.Ltd., is the lead member. There cannot be any assumptions that the director in a holding company to have information pertaining to the bid submitted by the applicant where the subsidiary is only one constituent. He would also submit that clause 2.2.1 is not in any event applicable to pre-evaluation stage. It is not in dispute that though the petitioner has been ranked in serial no.8 on the basis of the technical score obtained by it, some of the applicants who were ranked below the petitioner had been shortlisted exhibiting unfairness and arbitrariness. Hence for all the reasons, the impugned order is liable to be set aside.
23. We have heard Mr.M.Ravindran, learned Additional Solicitor General appearing for the Ennore Port on the above submissions.
24. The sum and substance of the contentions of the learned senior counsel for the petitioner are as follows:-
(i) The earlier order in W.P.No.16957 of 2008 holding that there was no conflict of interest has become final and the Ennore Port cannot refuse to shortlist the petitioner on the very same ground.
(ii) In any event, on the given facts and circumstances of the case, there is no conflict of interest warranting the Ennore Port to invoke clause 2.2.1(c).
(iii) In any case, clause 2.2.1(c) of the RFQ document is not applicable to the petitioner, as the said clause has been omitted in clause 3.1.1 relating to eligibility criteria. In any event, it can only be made applicable after the evaluation and not before.
(iv) The Ennore Port should have given an opportunity of personal hearing as it was asked, and there was a delay in even asking for the clarification.
25. We have already referred to the law laid down by the Apex Court as to the scope of judicial review and keeping in mind also the underlying principles that the Ennore Port should scrupulously follow the Government of India guidelines relating to RFQ document and that any deviation is not permissible, the above contentions must be considered. At the stage of shortlisting the applicants for bidding process, the Ennore Port cannot make a detailed enquiry into each and every minute details furnished by the applicant and all that is required is only fairness in the decision-making process. Only in the event the decision-making process results in unfairness or arbitrariness, the Court should interfere in exercise of the power of judicial review.
26. As far as the first contention is concerned, the following finding of the learned Judge is extensively relied upon by the learned senior counsel for the petitioner. The said portion of the order reads as under:-
"25.3. The discussions and the reasonings which have been arrived at by me in those writ petitions are applicable to these writ petitions also. Both the (petitioner) and (NOL) are on the same footing. It is averred by the petitioner that while it is true that Temasek Holdings Private Limited holds the entire share holdings of PSA International Private Limited, in turn PSA International Private Limited holds the entire shareholdings of the petitioner, this mere fact does not translate into involvement in the governance of the petitioner by Temasek. Temasek, it is averred, is a Corporation owned by Government of Singapore and is in the nature of a financial investor with holdings and interest world wide. The day to day affairs of the petitioner and other entities in which Temasek has direct or indirect shareholdings are managed and governed by independent boards free of interference from Temasek.
25.4. In those circumstances, it is possible that both the listed entities themselves may not aware of each others shareholding. In such circumstances, it would have been fair had the Ennore Port Limited ascertained the facts from the applicants including the petitioner and provided them opportunity whether a conflict of interest in fact is existed between the applicants.
25.5. Thus, summing up the matter in issue, I am to hold as follows:
(i) The failure to seek clarification from the petitioner in respect of conflict of interest which has been set forth for rejecting the claim of the petitioner to the next stage of bid, in spite of the clarification sought for by the petitioner before submitting the application is totally unjust;
(ii) The claim of the petitioner that it is not having conflict of interest....could not have been considered by the SBI capitals which has evaluated the applications since at the time of evaluation, the points raised by the petitioner regarding its shareholdings, independent entity without common Directors etc., were not available for evaluation;
(iii) Even as per the language employed in clause 2.2.1(c), the conflict of interest should affect the bidding process. It is nowhere stated that the conflict of interest....affected the bidding process. Sub clauses (i) to (vi) to clause 2.2.1(c) could not be construed as rules in statutes which should be given a strict meaning and implications. The said clause has to be construed and interpreted in a manner which will give a commercial sense and meaning so as to ultimately achieve the object of incorporating the said clause viz., 2.2.1(c) viz., the two bidders should not be so connected where there is a possibility of cartelisation or monopoly. Since the said clause had been introduced with the object of preventing the development of cartelisation or monopoly, the said clause all the more shall be viewed with commercial sense that the ultimate object for which the said clause had been incorporated."
27. A careful reading of the above order would show that the learned Judge, on consideration of the facts that were available on that date, found that it was possible that both the listed entitities themselves may not be aware of each other's shareholding and in the circumstances, it would have been better had the Ennore Port ascertained the facts from the applicant and provided an opportunity to explain whether a conflict of interest in fact had ever existed. By the said observation, it cannot be held that a definite finding was rendered by the learned Judge holding that there was no conflict of interest in the case of the petitioner. The learned Judge has in fact found that the question of conflict of interest could not have been considered in the absence of clarification regarding the shareholding, independent entity without common directors etc. Hence the contention that the issue regarding conflict of interest came to be finally decided in the earlier writ petition and that the Ennore Port cannot once again go into the said question has no merits and accordingly is rejected.
28. As far as the second contention is concerned, we may refer to the relevant clause in the RFQ document. Clause 2.2.1(c) of the RFQ document reads as under:-
"2.2.1(c). An applicant shall not have a conflict of interest (the "Conflict of Interest") that affects the Bidding Process. Any application found to have a conflict of interest shall be disqualified. An applicant may be considered to have a conflict of interest that affect that Bidding Process, if:
(i) to (v) ......"
By that clause, two things are required. Firstly, an applicant should not have any conflict of interest that affects the bidding process and if the applicant is found to have conflict of interest, such applicant shall be disqualified.
29. In both the PSA Ennore Pte.Ltd., and the consortium led by Mundra Ports and Special Economic Zone Limited, the Temasek Holdings Private Ltd., holds shareholdings. It holds 100% shareholdings in PSA Ennore Pte.Ltd., and 67.76% in Neptune Orient Lines Limited as on the application due date which are common shareholding. Secondly, there is one director each in the board of the above mentioned two companies. Mr.Kua Hong Pak, a board member of PSA International, is also a board member of Temasek and Mr.Simon Israel, a board member of NOL, is also a board member of Temasek. Therefore, Temasek is having representation in both PSA International and NOL boards through common directors. PSA International and NOL therefore are related to each other through common third party, namely, Temasek. The question as to the existence of conflict of interest between the petitioner consortium and the consortium led by Mundra Ports and Special Economic Zone Limited should be arrived at only on the available materials, as it relates to factual aspects. As already pointed out, a detailed enquiry is not necessary while the evaluation is being made. We may also point out that such a detailed enquiry is also not contemplated under the conditions of RFQ document and in the event such a detailed enquiry is allowed, the same will frustrate the consideration of various applications in matters involving huge investments. Such exercise of holding a detailed enquiry would be outside the scope of the RFQ document also.
30. In terms of clause 2.2.1(c) of the RFQ document, all that the Ennore Port should consider as to the existence of conflict of interest that affects the bidding process. According to Ennore Port, in view of the above two aspects relating to conflict of interest, the bidding process would be affected. In view of the common shareholdings and common directors, there is a possibility of loss of confidentiality in the bidding process. This reasoning in the decision-making process cannot be construed to be either arbitrary or unfair. After all, in contractual matters, the confidentiality to be maintained by the applicant consortium while making the bids is of utmost importance, and that could be the reason for the Ennore Port to refuse to shortlist the petitioner in the event there appears to be a conflict of interest. Hence the said contention is liable to be rejected and accordingly the same is rejected.
31. The third contention relates to the non-application of clause 2.2.1(c) of the RFQ document on the ground that clause 3.1.1 does not refer to clause 2.2.1 relating to the eligibility criteria and in the absence of the said clause, the disqualification may arise only after evaluation and not before. This contention is totally on misconception. The scheme of the bid, as could be seen from clause 1.2.1 of the RFQ document, prescribes two stages of bidding process. The first stage being qualification stage where the applicants are shortlisted. Clause 2.2.2 of the RFQ document prescribes the eligibility criteria for pre-qualification and shortlisting and such eligibility criteria are (i) Technical Capacity and (ii) Financial Capacity. Hence technical capacity is one of the foremost eligibility criteria for pre-qualification and shortlisting. Clause 2.2.1(c) would apply at the stage when the applicants are shorlisted. That clause makes it very clear that the applicant shall not have a conflict of interest that affects the bidding process and the Ennore Port should necessarily disqualify such applicant in the event it finds a conflict of interest that affects the bidding process. Therefore the submission that clause 2.2.1(c) is not applicable at the shortlisting stage cannot be accepted. It is true that the evaluation parameters contained in clause 3.1.1 do not refer to clause 2.2.1 of the RFQ document. In our opinion, clause 2.2.1 is an independent clause by itself relating to the eligibility of the applicant for pre-qualification and that is the first stage of consideration of the applications. Unless the applicant satisfies the said clause, it cannot be shortlisted. Hence the contention that a non-inclusion of clause 2.2.1 in clause 3.1.1 of RFQ document would amount to exclusion of the said clause even for consideration at the pre-qualification stage, cannot be accepted.
32. The last contention is that the Ennore Port has not given an opportunity of personal hearing to the petitioner as requested in the letter dated 2.4.2009 and there was a delay in seeking for clarification. The clauses in the RFQ document do not contemplate any such personal hearing to be afforded to the applicants and in the event such personal hearing is afforded, that would amount to an act which is not permissible under the RFQ document. So far as the delay is concerned, it is to be mentioned that after the order in W.P.No.16957 of 2008 on 21.1.2009, one of the petitioners viz., D.P.World Ltd., and IDFC Projects Ltd., filed W.P.No.4684 of 2009 and obtained an interim injunction restraining the Ennore Port from proceeding further with the bidding process. Therefore, the Ennore Port could not proceed to seek for clarification and nevertheless such a clarification was sought by its letter dated 26.3.2009. Therefore the contention relating to the failure on the part of Ennore Port to afford a personal hearing and as well there was a delay in seeking for clarification cannot be accepted. Accordingly, the said contention is also rejected.
33. One more argument was also advanced as to the subsequent withdrawal of the application by Mundra Ports and Special Economic Zone Limited, which was reported in the leading newspapers in the issue dated 27.9.2009. Hence the conflict of interest put forth by the Ennore Port does not survive. In our opinion, the said argument is also untenable. The question of conflict of interest should be considered with reference to the RFQ document filed as on the due date. The subsequent event will not in any way advance the case of the petitioner in contending that there was no conflict of interest. In fact, by a communication dated 21.7.2009, the petitioner was informed by the Ennore Port that the withdrawal of the application by the consortium led by Mundra Ports and Special Economic Zone Limited was not acceptable, in view of clause 2.16.1 of the RFQ document. Further, the subsequent withdrawal can also indicate that there was a conflict of interest as suggested by the Ennore Port. Hence the said contention is also rejected.
34. For all the above reasons, we find no merit in any of the contentions made by the learned senior counsel for the petitioner in challenging the impugned order.
W.P.No.14387 of 2009:
35. The petitioner is Sical Infra Assets Limited (hereinafter referred to as "the SIAL"), a company incorporated under the provisions of the Companies Act, and the petition has been filed by its authorised signatory. SIAL formed a consortium with Macquaire Capital (Singapore) Pte., Ltd., and submitted its application dated 19.5.2008 with reference to the RFQ document. SIAL held 51 percent of equity in the consortium and it is a lead member. Macquaire Capital held 49 percent of equity in the consortium and it is a consortium member. Among the scores obtained by 22 applicants, SIAL was ranked at serial no.6 on the basis of the technical score obtained by it. As per clause 3.5.1 of the RFQ document, the credentials of eligible applicants shall be measured in terms of their experience score. However, SIAL was not shortlisted for the next stage of bid process i.e., Request for Proposals (RFP). Later SIAL came to know that the Authority shortlisted six applicants as pre-qualified and those applicants are not on the basis of the experience score obtained by them. In fact at least four companies, namely, Group Maritime TCB SL, Vedanta Sterlite Industries Ltd., NYK Lines India Ltd., and L& T Ltd., who obtained lesser technical score, were shortlisted. Hence SIAL sent a representation on 3.7.2008, but there was no response. Hence it filed W.P.No.17744 of 2008 questioning the order dated 30.6.2008 in refusing to shortlist SIAL. That writ petition was allowed with a direction for re-consideration since there was no clarification obtained from SIAL before refusing to shortlist.
36. Thereafter, SIAL requested the Ennore Port in its letter dated 2.3.2009 for submitting the clarifications on the rejection. Accordingly, by letter dated 26.3.2009, certain clarifications were sought for by the Ennore Port and those clarifications were submitted on 3.4.2009. In spite of such clarification, SIAL was not shortlisted and the same was communicated by the Ennore Port in its letter dated 10.7.2009, which is questioned in the writ petition.
37. We have heard Mrs.Nalini Chidambaram, learned senior counsel for the petitioner and Mr.M.Ravindran, learned Additional Solicitor General of India for the Ennore Port.
38. The order of rejection was mainly on the ground that SIAL's technical score from Categories 1 & 3 projects is less than Rs.162.50 crores (one fourth of Threshold Technical Capability) which is required as per clause 2.2.2A(iii) of the RFQ document. That clause relates to technical capacity. By that clause, an applicant, for demonstrating technical capacity and experience over the past five financial years preceding the application due date, should have collected and appropriated revenues of BOT/BOLT/BOO/BOOT or other similar PPP projects that qualify as eligible projects, and that the sum total of the above should be more than Rs.650 crores. Provided that at least one fourth of the Threshold Technical Capability shall be from the eligible projects in Category-1 or Category-3 specified in clause 3.2.1. Clause 3.2.1 is one of the criterion for evaluation. It relates to technical capacity for purposes of evaluation. In respect of Category-1, the applicant should have a project experience on eligible projects in port sector that qualify under clause 3.2.3 and in Category-3, the applicant should have construction experience on eligible projects in port sector that qualify under clause 3.2.4. As per clause 3.2.3(c), the capital cost of the project should be more than Rs.65 crores for Categories 1 and 2. Under clause 3.2.4, the applicant should have paid for execution of its works or received payments from its clients for works executed, fully or partially, during the five financial years immediately preceding the application due date and the payments actually made or received shall qualify for purposes of computing the experience score and the payments made or received in respect of projects having a capital cost of less than Rs.65 crores shall not be reckoned as payments for eligible projects.
39. It is the specific stand of the Ennore Port that SIAL claimed experience from totally 17 projects. Out of them, five projects were by the lead member and twelve projects were by its consortium member. However, under Category-1, SIAL claimed experience only from seven projects i.e., four by the lead member and three by its consortium member. The experience score claimed by the consortium member from the two projects out of the three projects under Category-1 are from the projects whose capital cost is less than Rs.65 crores, which is against clause 3.2.3(c) of the RFQ document. In the third project, though the capital cost is more than Rs.65 crores, it is not supported by Statutory Auditor's Certificates apart from not submitting the Articles of Association of its associates which is claiming experience. As far as the Auditor's Certificates are concerned, such certificates were produced with the signatures of auditors, as could be seen from the documents filed by SIAL at page 45(1a) and page 52(1b) of the RFQ document.
40. As far as the experience score is concerned, it is sought to be explained that it has an experience score of 748.71 and 360.44 adding upto 1109.15. Even after the revenues of appropriation from BOT/PPP project under Category-1A & 1B, still SIAL has admittedly more than Rs.650 crores i.e., Rs.832.62 crores. The stand of SIAL is sought to be explained by the Ennore Port that as per clause 3.2.3 of the RFQ document for the purpose a project to be considered to be an eligible project to qualify under Categories-1 & 2, such project should have been implemented on BOT/BOLT/BOO/BOOT or other similar PPP basis. The entity claiming experience should have held in the company owning the eligible project a minimum of 26% equity during the period for which eligible experience is being claimed and the capital cost of the project should be more than Rs.65 crores and that the entity claiming experience shall, during the past five financial years preceding the application due date, have (i) commissioned the construction work of the project and paid for it and/or (ii) collected and appropriated the revenues of such project after commencement of commercial operation. These conditions have not been complied with by SIAL. To support the said statement, it can be also noted that the consortium member though claimed experience in three projects, in project code 2j, the project cost is less than Rs.65 crores, which is against clause 3.2.3(b) of the RFQ document. Similarly, in respect of the project code 2k, the project cost is less than Rs.65 crores. Insofar as the project code 2l, though the project cost is more than Rs.65 crores, the Statutory Auditor's Certificate is incomplete and unsigned as required under the formats in Sl.Nos.13 / 14 of Appendix-I, Annexure-IV of the RFQ document. Even when a clarification was sought, SIAL did not produce the Statutory Auditor's Certificate with signature, though it is argued that it is an international practice that the auditors do not sign in the certificate. As far as the RFQ document is concerned, the applicant should submit the auditor's certificate duly signed. Therefore in view of the non-compliance of the conditions relating to the RFQ document in respect of the two projects 2j and 2k, we do not find any arbitrariness or unfairness on the part of the Ennore Port in not shortlisting SIAL on the ground that it did not have the project cost as required under clause 3.2.3(b) of the RFQ document.
41. The next question to be considered is whether for non-compliance of the production of Statutory Auditor's Certificates as per the format in Sl.Nos.13 / 14 of Appendix-I, Annexure-IV of RFQ document, the Ennore Port was justified in refusing to shortlist the petitioner. We may point out that in terms of clause 2.2.4(i) & (ii), such certificates are required from the Statutory Auditors with the names of the authorised signatory, designation, title of the project of the company and other details. In terms of clause 3.3.3, the applicant should furnish the required information and the evidence in support of its claim of technical capacity as per the formats in Sl.No.13 / 14 of Appendix-I, Annexure-IV of the RFQ document. Appendix-I, Annexure-IV relates to the details of eligible projects, which also contains instructions. In terms of Sl.No. 13, if the applicant is claiming experience under Categories 1 & 2, it should provide a certificate from the statutory auditor in the following format:
"Certificate from the Statutory Auditor regarding BOT projects This is to certify that .......(name of the Applicant) is / was an equity shareholder in ...........(title of the project company) and holds / held Rs......cr of equity (which constitutes ....% of the total paid up and subscribed equity capital) of the project company from .....(date) to .....(date). The project was completed and commissioned on ......(date of commissioning of the project).
We further certify that the total estimated cost of the project as on date of commissioning was Rs....cr., of which Rs......cr. of capital expenditure was incurred during the past five financial years as per year-wise details noted below:
.....
We also certify that the annual revenues collected and appropriated by the Applicant during the past five financial years were Rs......cr. as per year-wise details noted below:
.....
Authorised Signatory Name:
Designation: Signature of the Authorised Signatory & date"
In terms of Sl.No.14, if the applicant is claiming experience under Categories 3 & 4, it should provide a certificate from the statutory auditors or the clients in the following format:
"Certificate from the Summory Auditor / Client regarding construction works This is to certify that .......(name of the Applicant) was engaged by.........(title of the project company) to execute.........(name of the project) for...........(nature of project). The construction of the project commenced on............(date) and the project was commissioned on..........(date). It is certified that.........(name of the Applicant) received Rs.....cr. by way of payment for the aforesaid construction.
We further certify that the total estimated cost of construction of the project is Rs......cr., of which Rs.....cr. was paid to the Applicant by the project company during the past five financial years as per year-wise details noted below:
.....
(It is further certified that the payments indicated above are restricted to the share of the Applicant who undertook these works as a partner or a member of joint venture / consortium).
Authorised Signatory Name:
Designation: Signature of the Authorised Signatory & date"
By an amendment, a revised RFQ for pre-qualification was prescribed by the Ministry of Finance in its Office Memorandum dated 18.5.2009. It is clarified that in case duly certified audited annual financial statements containing explicitly the requisite details are provided, a separate certification by statutory authority or auditors would not be necessary in respect of clause 2.2.4(i). In jurisdictions that do not have statutory auditors, the firm of auditors which audits the annual accounts of the applicant may provide the certificates required under the RFQ. By the above clarification also, it is made clear that the applicant must submit duly certified audited annual financial statements containing explicitly the requisite details as required under Appendix-I, Annexure-IV. Only when such details are furnished, the requirement of a separate certification by statutory auditors under clause 2.2.4(i) would not be necessary. However, this clarification would not be applicable to clause 2.2.4(ii) relating to the certificate from the statutory auditors specifying the net worth of the applicant as at the close of the preceding financial year and also specifying the methodology adopted for calculating such net worth. How far the clarification would advance the case of the petitioner in not producing the auditor's certificate should be considered on the basis of the documents furnished. It is seen that though in respect of project code 2l, the capital cost was shown to be more than Rs.65 crores, firstly, that was not shown in the format prescribed as per Appendix-I, Annexure-IV, which is mandatory. Secondly, the requirement of submission of Articles of Association of the petitioner's associates which is claiming experience as required under clause 2.13.3 was not furnished. In the absence of the above details, it cannot be now contended that clause 2.2.4(i) was complied with. So far as clause 2.2.4(ii) is concerned, the details were not only not furnished in the format prescribed, but also the details required thereunder were not furnished. As far as project code 1c, the auditor's certificate certifying the total project cost is not final, as it stated that the total project cost was arrived only "in the opinion of the management". In the circumstances, the Ennore Port found that the petitioner did not have at least one fourth of the Threshold Technical Capacity from Category-1 or Category-3 by having experience in the eligible projects whose sum total is less than Rs.650 crores as required under clause 2.2.2(A) of the RFQ document. Hence the rejection by the Ennore Port to shortlist the petitioner for non-compliance of Sl.Nos.13 / 14 of Appendix-I, Annexure-IV of RFQ is supported by valid reasons and cannot be interfered with, as the Ennore Port could consider only such of those certificates submitted from the statutory auditor in the format prescribed with all the details required thereunder and if no such certificate is produced, that application stands to summary rejection.
42. We have already noted that the judicial review in contractual matters is very limited only in certain areas like arbitrariness and unfairness. The grounds on which SIAL was not shortlisted cannot be, in our considered view, termed to be either unfair or arbitrary and they are on the basis of the documents presented by SIAL. The minute details as to the claim of the applicants and the reasons for rejection by the Ennore Port may not be available for the Court in matters of Government contract, as in the event the Courts go into the minute details, it would frustrate the very terms and conditions of the contract, as the consideration of which entirely vests with the Ennore Port. It is also to be noted that when once the terms and conditions are stipulated, the Ennore Port shall scrupulously follow the same and any deviation from such terms and conditions would also be liable for judicial review. On the facts of this case, we do not find any interference is called for to the order questioned in this writ petition.
W.P.No.14605 of 2009:
43. The first petitioner in W.P.No.14605 of 2009 is DP World Limited, a company incorporated with the Registrar of Companies of the Dubai International Finance Centre under the Companies Law with its headquarters at Dubai. The first petitioner claims that it is the lead company in the consortium and it also claims that it is the third largest port operator in the world with vast experience in the field. The second petitioner, namely, IDFC Projects Ltd., is a company registered under the Indian Companies Act with its registered office at Mumbai. The petition is filed by the Power of Attorney holder of the first petitioner with the following averments. Pursuant to the notification, the petitioners submitted their application dated 15.5.2008 for pre-qualification with reference to the RFQ document. After the RFQ documents were opened, the first petitioner consortium was ranked at serial no.10. Though the Ennore Port could shortlist upto five pre-qualified applicants for participation in the bid stage, it also reserved its right to extend the number of shortlisted pre-qualified applicants to six. On the ground that several other applicants had been discriminated and they filed writ petitions which were disposed of on 21.1.2009 remitting the matter to the Ennore Port for re-consideration after seeking clarification from those applicants, the petitioners also filed W.P.No.4684 of 2009 for a similar relief, which was also granted by an order dated 21.4.2009. Accordingly, Ennore Port in its letter dated 7.5.2009 sought certain clarifications from the consortium. Such clarifications were given by the consortium in their letter dated 14.5.2009. In spite of the above, the petitioners consortium was not shortlisted and a decision to the said effect was also communicated by the letter dated 10.7.2009, which is impugned in the writ petition.
44. Mr.A.L.Somayaji, learned senior counsel appearing for the petitioners would make the following submissions:
(i) Inasmuch as the ranking of the applicants based on the experience score was already announced, the Ennore Port should not have refused to shortlist the applicants in the order of ranking. The act of Ennore Port in shortlisting the applicants who have obtained lesser experience score is unreasonable.
(ii) The first petitioner consortium has mentioned that the local jurisdiction of the countries where the Statutory Auditor's Certificates are issued do not specify the requirement of signing in the partner's name, and has provided the names and designations of the contact persons regarding the Statutory Auditor's Certificate issued in respect of the project codes viz., 1b, 1e, 1i, 1j, 1k, 1l, 1m, 1n, 1p, 1q, 1r, 1s, 1t & 1u, the Ennore Port did not shortlist the petitioners consortium on the ground that the Statutory Auditor's Certificate did not provide the names, designations and signatures of the authorised signatories, as required under the formats prescribed in Sl.Nos.13 / 14 of Appendix-I, Annexure-IV of the RFQ document. Having regard to the practice adopted in the local jurisdiction of the countries, the Ennore Port should not have refused to shortlist the petitioners as per the said formats.
(iii) In respect of project codes viz., 1f, 1g & 1o, the Ennore Port should have accepted the duration of equity as referred to in the annual report of Peninsular and Oriental Steel Navigation Company, as the same is in compliance of clause 2.2.9 of the RFQ document.
45. We have also heard Mr.M.Ravindran, learned Additional Solicitor General of India on the above contentions.
46. As far as the contention relating to the failure on the part of the Ennore Port to select the first five or six applicants on the basis of the ranking given with reference to the experience score obtained by them is concerned, it must be pointed out that the said ranking was given only on self-assessment and not on the basis of an evaluation. When the self-assessment is not acceptable to the Ennore Port on the basis of the documents furnished by the applicants, the ranking is made on the basis of evaluation and the exclusion of such of those applicants who were not eligible for shortlisting cannot be found fault with. Hence the contention that the ranking assigned on the basis of self-assessment must be the criteria for shortlisting cannot be accepted.
47. As far as the second contention is concerned, we may once again point out that the Ennore Port must strictly adhere to the tender conditions and must enforce them with rigidity, except some minor deviations. This law is settled by the Apex Court long back in the judgment in Poddar Steel Corporation v. Ganesh Engineering Works and others case (1991) 3 SCC 273, as any deviation from the conditions would amount to arbitrary exercise. We have already discussed the terms of clause 3.3.3 and the formats prescribed under Appendix-I, Annexure-IV of RFQ document and the subsequent amendment to clause 2.2.4(i) in the earlier portion of the order in respect of the petitioner in W.P.No.14387 of 2009 and rejected a similar challenge. From the materials placed before us, it is seen that even as per the clarification to the amended guidelines, the petitioners have not furnished the statutory auditor's certificate in relation to the certification of shareholding, capital expenditure and gross revenues. By the communication dated 22.4.2008, they have only given the contact person's name as Mohammad Taufiq and it has no authenticity. Similarly, another certificate dated 28.4.2008 also did not have the authenticity relating to financial statement. Moreover, these certificates are not in the formats prescribed. It must be also noted that the certificate dated 16.4.2008 (at page 65 of the typedset) and the certificates dated 28.4.2008 (at pages 96 & 102 of the typedset) which are furnished as per the format with details have been accepted by the Ennore Port. As far as the financial statement relating to the preceding five financial years which is required in the format and the statutory auditor's certificate as prescribed under clause 2.2.4(i), it is not in dispute that the petitioners consortium had not complied with the requisite in Appendix-I, Annexure-IV of RFQ document. Therefore, very rightly, the Ennore Port has rejected the application and refused to shortlist the petitioners. This reasoning cannot be considered to be one for interference in judicial review. Hence the second contention of the learned senior counsel is liable to be rejected and accordingly the same is rejected.
48. In respect of project codes 1b & 1u, the only report of the Peninsular and Oriential Steam Navigation Company did not provide for the title of the project, total estimated cost of the project as on the date of commission, year-wise capital expenditure incurred during the past five financial years, the annual revenues collected and appropriated during the past five financial years. When the clarification was sought, the petitioners had only stated that those particulars are referable to the annual report of the Peninsular and Oriental Steam Navigation Company and this ground is relied upon by the Ennore Port for the first time. In our considered opinion, this reasoning is not available to the Ennore Port, as it is sought to be put against the petitioners for the first time without there being a specific clarification asked for. Be that as it may, for the reasons for non-compliance of Sl.Nos.13 / 14 of Appendix-I, Annexure-IV of the RFQ document, the failure to shortlist the applicants cannot be interfered with, as the said decision cannot be considered to be without any justifiable reason. The effect of non-compliance of the above has also been discussed by us in the earlier portion of the order in W.P.No.14387 of 2009. Therefore, the said reason cannot be considered to be anyone of the reasons where judicial review is permissible. For all the above reasons, the challenge to the impugned order must fail.
W.P.No.16027 of 2009:
49. The petitioner is South India Corporation Limited, Chennai and the petition is filed by its Director. According to the petitioner, it submitted its RFQ document by forming a consortium with Portia Management Services Limited. The petitioner was not shortlisted and therefore it filed W.P.No.23795 of 2008, which was remitted back to the Ennore Port for re-consideration after seeking clarification. Accordingly, clarifications were sought and the same were submitted by the communication dated 2.4.2009. Nevertheless, by the impugned communication, the petitioner was informed that it was not shortlisted. Hence the petitioner is constrained to file this writ petition.
50. Mr.Rahul Balaji, learned counsel appearing for the petitioner would submit that the prime ground on which the RFQ document was rejected is that a separate auditor's certificate was not furnished. The learned single Judge in paragraph 22.6 had observed that in view of the furnishing of the audited balance sheet, a separate auditor's certificate is not necessary. Hence the rejection on the very same ground is arbitrary and without application of mind.
51. We have heard Mr.M.Ravindran, learned Additional Solicitor General of India on the above submission.
52. As far as the requirement of an auditor's certificate in terms of clause 2.2.4(i) of the RFQ document is concerned, we have already discussed in the earlier portion of the order in respect of the other petitioner and rejected such a challenge.
53. The Ennore Port has not accepted the clarification submitted by the petitioner in respect of project codes 1b & 1l on the ground that the informations regarding the title of the project company, total estimated cost of the project as on the date of commissioning, year-wise capital expenditure incurred during the past financial years, equity shareholding of the entity claiming experience in the project of the company, duration of the equity shareholding from the entity claiming experience in the project company and the annual revenues collected and appropriated during the past financial years were not furnished. These informations were not in the format amounting to non-compliance of Sl.Nos.13 / 14 of Appendix-I, Annexure-IV of the RFQ document. In the absence of the above details, the Ennore Port could not ascertain and consider the technical score as well as the experience score from the project codes 1b & 1l. Similarly, in respect of project code 1m, the petitioner did not furnish the above particulars in the prescribed format. In view of the above reasons and considering the other documents, the technical score of the petitioner was found to be less than the Threshold Technical Capability required and therefore the petitioner was not shortlisted. These reasons, in our view, cannot be considered to be either unreasonable or unfair. Hence we are not inclined to interfere with the impugned order of the Ennore Port in not shortlisting the petitioner.
54. For all the foregoing discussions and conclusions, we find no merit in the challenge to the impugned orders. Accordingly, all the writ petitions are dismissed. Consequently, M.P.Nos.1, 2 & 3 are also dismissed. No costs.
ss To
1. The Secretary to Union of India Ministry of Shipping, Road Transport and Highways Transport Bhavan No.1, Parliament Street New Delhi 110 001
2. The Chairman and Managing Director Ennore Port Limited P.T.Chengalvaraya Naicker Maaligai No.23, Rajaji Salai, First Floor Chennai 600 001
3. The Director (Operations) Ennore Port Limied P.T.Lee Chengalvaraya Naicker Maaligai First Floor, 23, Rajaji Salai Chennai 600 001