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M/s. RDS Projects Ltd., New Delhi v/s Hll Infra Tech Services Ltd., Represented By Its Chief Engineer (Design), Thiruvananthapuram & Others

    WP(C). No. 8714 of 2021
    Decided On, 10 August 2021
    At, High Court of Kerala
    For the Petitioner: Joseph Kodianthara, Sr. Advocate, P. Reshma, Advocate. For the Respondents: R1, M.U. Vijayalakshmi, G. Shrikumar, K. Jaju Babu, Sr. Advocates, Kum. T.S. Athira, Aneesh Paul, Advocates, Deepa Narayanan, Sr. GP.

Judgment Text
This Writ petition has been filed seeking the following reliefs:

“(i) to call for the records relating to Exhibit P3 and quash the technical qualification of the 3rd Respondent under Exhibit P1 tender, by issue of Writ in the nature of certiorari or any other appropriate Writ, order or direction.

(ii) issue a Writ in the nature of mandamus or other appropriate Writ, order or direction declaring that the petitioner's financial bid alone can be considered pursuant to the proceedings under Exhibit P1 tender.

(iii) issue a Writ in the nature of mandamus, or other appropriate Writ, order or direction declaring that the 3rd Respondent is not eligible to participate in the tender as per Exhibit P1 NIT.”

2. The 1st Respondent issued Exhibit P1 notice inviting tender on 12.1.2021, for "Construction of Konni Government Medical College, Teaching Hospital and Allied Buildings in Pathanamthitta District – Phase II". The 1st Respondent is a subsidiary of M/s.HLL Lifecare Ltd, which is a Government of India Enterprise. The estimated cost of the project is Rs.214,79,02,388/- and the work is to be completed within 24 months. The last date for submission of the tender as per Exhibit P1 was 1.2.2021 and the date for opening the technical bid was 2.2.2021. The dates were extended by a few days. The petitioner and the 3rd Respondent participated in the tender process. The technical bids were opened on 11.2.2021. The evaluation summary of the technical bid is produced as Exhibit P3, which shows that the petitioner, the 3rd Respondent and M/s Cherian Varkey Construction Company participated during the evaluation and that the petitioner and the 3rd Respondent were found to be technically qualified bidders. The financial bids were opened on 20.2.2021. The Writ petition was filed on 31.3.2021. According to the petitioner, the 3rd Respondent is not technically qualified and the financial bid submitted by the petitioner, who alone was technically qualified, should be considered for the further process in the tender.

3. Heard Sri Joseph Kodianthara, Senior Advocate, assisted by Reshma P., on behalf of the petitioner, Sri Jaju Babu, Senior Advocate, instructed by Smt.M.U.Vijayalakshmi, on behalf of the 1st Respondent, Sri G.Shrikumar, Senior Advocate, instructed by Sri.Aneesh Paul, on behalf of the 3rd Respondent and the Government pleader on behalf of the 2nd Respondent.

4. The main contention of the petitioner is that the tender is for a very large work involving a huge cost and as such, there should have been strict adherence with the qualifications of the tenderers as notified in the tender notification. It is submitted that the technical qualification specified in clause 1.4.1 of Exhibit P1 is that the tenderer should have experience, of having successfully completed during the last 7 years ending the last day of the month previous to the one in which applications are invited, three similar works each costing not less than an amount equal to 40% of the estimated cost put to tender (Or) two similar works each costing not less than an amount equal to 60% of estimated cost put to tender (Or) one similar work costing not less than an amount equal to 80% of estimated cost put to tender. As per sub clause (d) of clause 1.4.1, "Similar work" shall mean one work of construction of multistoried RCC framed structure having minimum 7 storeys above ground level, including finishing works, internal water supply, sanitary installations, firefighting works, internal and external electrical installation, lift, HVAC etc. all composite, executed under one agreement. Clause 2.3.17 dealing with evaluation of bids, says that the 1st Respondent would examine and evaluate responsive bids, as per the criteria set out in the document at Section IV Evaluation Process. It further says that the 1st Respondent reserves the right to reject any bid, if at any time, a material misrepresentation is made or uncovered. In clause 2.3.18, it is stated that the evaluation of technical bid submitted by the bidders shall be undertaken based only on details submitted therein and that the bidders shall not be allowed to submit on their own, additional information or material subsequent to the date of submission and that such material/information, if submitted, will be disregarded. It further says that the evaluation committee, if it so desires, reserves the right to seek a clarification from the bidders on the information provided in the technical package and that no change/addition in the information or substance of the bid shall be sought, offered or permitted. In clause 4.2 of Section IV of Exhibit P1 dealing with evaluation process, it is stated that bidders qualifying in Stage 1 will be considered for further evaluation and the technical bids shall be evaluated as per the eligibility criteria detailed in clause 1.4.1. It is further stated that if the bidder does not meet with the minimum eligibility criteria as detailed in 1.4.1, his bid will be rejected and will not be considered for further stages of evaluation. It is also stated that the financial bid of only those bidders who are technically qualified shall be opened.

5. Sri Joseph Kodianthara, Senior counsel appearing for the petitioner, submitted that going by the eligibility criterion, the monetary equivalent of 40%, 60% and 80% of the estimated PAC will be Rs.85.92 crores, Rs.128.87 crores and Rs.171.83 crores respectively. Referring to Exhibit P5, which shows the details of the works that are said to have been completed by the 3rd Respondent during the past 7 years, it is submitted that only items 2 and 3 in the list satisfy the requirements in the tender notice, but not item 1. According the Senior Counsel, the date of completion stated in Ext.P5 with regard to item 1 is a misrepresentation. In order to show there is a misrepresentation, the Counsel relies on Exhibit P10 document, which is said to be the details submitted by the 3rd Respondent with respect to another tender process, also initiated by the 1st Respondent. The dates of completion with regard to the same work are shown as 29.3.2014 and 16.9.2013 in Exhibit P5 and P10 respectively. It is hence contended that even though the 1st Respondent had knowledge about the two dates of completion stated by the 3rd respondent, they chose to accept the date which is stated in Exhibit P5 to find that the 3rd Respondent is technically qualified. It is pointed out by the Senior Counsel that the work referred to as item 1, cannot be considered as a work which comes within the meaning of the definition of "similar work" contained in clause 1.4.1 sub-clause (d), since it involves two separate agreements, dated 3.3.2009 and 14.8.2013. The work relating to the agreement dated 3.3.2009 is a work which is to be completed in 18 months, i.e. by 3.10.2010. The work covered by Exhibit P7 was to be completed within 5 months from 24.8.2013. The Senior Counsel contended that though the work covered by Exhibit P6 valued at Rs.171.82 crores was completed on 16.9.2013, Exhibit P5 treats the works covered by Exhibits P6 and P7 as a composite work, which started on 3.3.2009 and was completed on 29.3.2014. This, according to the Counsel, amounts to a misrepresentation, made for the purpose of making it appear that the 3rd Respondent is technically qualified. The contention of the Senior Counsel is that even though the 3rd Respondent might have carried out similar works, they do not have the required experience of carrying out similar works of the value of 40% of the estimated PAC within 7 years prior to January, 2021, since item 1 in Ext.P5 was actually completed on 16.9.2013. It is further submitted that the 3rd Respondent also cannot take refuge under the eligibility requirement of 80% of estimated PAC, since the value of the work would then be the consolidated value under 2 agreements. In answer to the contention in the counter affidavit filed by the 1st Respondent that there is a delay in approaching the Court and that the petitioner had an alternate remedy of approaching the Independent External Monitor ('IEM', for short), it is contended that the above remedy was not an efficacious one and since the term of the IEM was to end soon, there was no possibility of exhausting the said remedy. It is also submitted that the very fact that the 1st Respondent had approached the NBCC on 26.2.2021 for clarification regarding the bid submitted by the 3rd respondent, would show that they had doubts regarding the qualification of the 3rd respondent. It is submitted that going by the tender conditions, the 1st respondent was to get the clarification from the bidder rather than from NBCC and admittedly no such clarification was sought for from the 3rd respondent.

6. On the question regarding the power of Court to interfere in matters relating to tender, the Counsel referred to the decisions of the Hon'ble Supreme Court in B.S.N.Joshi & sons Ltd. v. Nair Coal Services Ltd and others, reported in (2006)11 SCC 548 and Central Coalfields Limited and another v. SLL-SML (Joint Venture Consortium) and others reported in (2016)8 SCC 622 to contend that as far as technical qualification is concerned, the same should be treated as rigid and the employer cannot apply different yardsticks as among the bidders. It is submitted that the condition cannot be relaxed after the tender process began. The Counsel further contends that when the mistake is not corrected even after the same was pointed out through Exhibits P10 and P12, it has to be treated as a wilful mistake and in such cases, this Court is fully justified in exercising its jurisdiction under Article 226 of the Constitution of India. The Senior Counsel also relied on paragraph 12 of the decision of the apex Court in Monarch Infrastructure (P) Ltd v. Commissioner, Ulhasnagar Municipal Corporation and Others reported in (2000) 5 SCC 287 in support of the contention that rules of the game cannot be changed after it had began.

7. Sri.Jaju Babu, Senior counsel appearing for the 1st respondent submits that this is a case where the petitioner missed the bus and that they were sitting on the fence waiting for the financial bid to be opened to find out where they stood in the bid. It is pointed out that the petitioner knew as early as on 20.2.2021 that their bid was much higher than that of the 3rd Respondent. The petitioner was also aware of the fact that the 3rd Respondent was declared to be technically qualified on 11.2.2021. It is further pointed out that the petitioner was also a participant in the tender process to which Exhibit P10 relates and though they had all the details concerning Ext.P10 even on 11.2.2021, they did not raise any objection to the 3rd Respondent being declared as qualified at the technical evaluation stage. It is pointed out that till the financial bid was opened, there was no objection. Even thereafter, till the completion of the term of the IEM appointed from the CVC panel on 31.2.2021, the petitioner did not raise any dispute. The Writ petition was filed just prior to the issuance of the work order. It is hence submitted that the delay in approaching the Court, in such circumstances, has to be held to be fatal. Regarding the contention that the 1st respondent had approached NBCC for clarification, it is submitted that Exhibit P1 clearly provides for such cross-checking and that alone has been done. It is stated that on such cross-checking, the employer confirmed the correctness of Exhibit P5 and hence the 1st respondent cannot be faulted for completing the tender process, relying on Exhibit P5. It is pointed out that the entire bid documents submitted by the participating tenderers were available for viewing to the petitioner, and hence the submission that he did not have the necessary details to move this Court is without any basis. The Counsel points out that the difference in the financial bids of the petitioner and the 3rd Respondent is more than Rs.6.6 crores and as such the 1st Respondent has selected the 3rd respondent on financial merit. The Senior counsel relies on the decisions of the apex Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., reported in 2016 (4) KLT 6 at paragraphs 13 to 15, Montecarlo Limited v. National Thermal Power Corporation Limited reported in (2016)15 SCC 272 at paragraph 26, Municipal Corporation, Ujjain and another v. BVG India Limited and others, reported in (2018) 5 SCC 462 at paragraphs 63 and 64 and a decision of a Division Bench of this Court in Pushkarraj Constructions Pvt.Ltd (M/s) and others v. Silppi Constructions and Contractors and Others reported in 2019 (3) KHC 566 at paragraph 20, to submit that this Court would interfere only in exceptional situations and where the public interest requires, and this is a case where there is no such public interest involved in choosing the petitioner over the 3rd Respondent. The counsel also relied on the judgment of the Hon'ble Supreme Court in Bharat Coking Coal Ltd. And others v. AMR Dev Prabha and others reported in 2020 (5) KHC SN 3 to submit that judicial review in matters of tender is available only as against the decision making process and not the decision as such and that the person seeking relief should satisfy the Court that the right that is sought is one in public law and not merely contractual.

8. Sri G.Shrikumar, Senior counsel appearing on behalf of the 3rd respondent submits that the Writ petitioner has not questioned the integrity of the 1st respondent. It is further submitted that the work shown as Item 1 in Ext.P5, though executed in two agreements, is the composite work relating to the construction of the 300 bedded ESIC Hospital, including all internal services, external electrical, Fire Fighting etc. and there cannot in fact be a fictional separation of the work into two different works, merely for the fact that two agreements were executed. The submission is that the completion of the work is overlapping and the entire work can be treated to have been completed only on 29.3.2014. The Senior Counsel relies on the judgments of the Hon'ble Supreme Court in Jagdish Mandal v. State of Orissa reported in (2007) 14 SCC 517 and The Silppi Constructions Contractors v. Union of India and others reported in (2020) 16 SCC 489. The Senior Counsel also points out that there was total transparency since the details of the works completed were included in the bid documents in Form T2 and the petitioner was aware of the details relating to the 3rd respondent even at the time of technical evaluation.

9. I will first consider the judgments cited on behalf of the petitioner. In B.S.N.Joshi (supra), the apex Court referred to the decision in Poddar Steel Corporation v. Ganesh Engineering Works reported in (1991) 3 SCC 273, wherein it was held that the requirements in a tender notice can be classified into 2 categories – those which laid down the essential conditions of eligibility and the others which are merely ancillary or subsidiary to the main object to be achieved by the condition. The Apex Court cautiously said that in the case of essential conditions, the authority issuing the tender may be required to enforce them rigidly and that regarding the other conditions, it was open to the authority to deviate from and not to insist on the strict literal compliance. Finally in paragraph 66 of the judgment, the Apex Court summarised the principles culled out from several decisions and stated that if there are essential conditions, the same must be adhered to and that if there is no power of general relaxation, ordinarily, the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully. But in the very same paragraph, the Court also held that where the decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint. In Central Coalfields (supra), the Hon'ble Supreme Court referred to the decision in G.J.Fernandes vs State of Karnataka reported in (1990)2 SCC 488, wherein it was held that the party issuing the tender has the right to punctiliously and rigidly enforce the terms of the tender. The Court also reaffirmed that the employer could deviate from the terms and conditions of the tender if the changes affected all intending applicants alike and were not objectionable. It was held that deviation from terms and conditions is permissible so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination. In paragraph 47 of the judgment, the Hon'ble Supreme Court held that the result of the discussions is that the acceptance or rejection of a bid or a bidder is a matter that should be looked at, not only from the point of view of the unsuccessful party but also from the point of view of the employer. The Court observed that the terms of the notice inviting tender cannot be ignored as being redundant or superfluous and that they should be given a meaning and the necessary significance. In paragraph 12 of the judgment in Monarch (supra) referred to by the Senior Counsel, the Hon'ble Supreme Court confirmed the decision of the High Court in setting aside the award of contract in favour of the Appellant before the Court, on the ground that the Appellant did not fulfill a condition in the tender notice, which was deleted subsequent to the last date of acceptance of the tenders. The High Court therein had taken the view that since a term of the tender was deleted after all the players entered into the arena, it was like changing the rules of the game after it had begun and therefore the Government or the Municipal Corporation was free to alter the conditions and a fresh process of tender was the only alternative permissible. This view was upheld by the Hon'ble Supreme Court, finding that there is justification since larger participation and more attractive bids can result because of the deletion of the condition.

10. Coming to the judgments referred to by the counsel for the 1st Respondent, in Afons (supra), the Hon'ble Supreme Court observed that the author of the tender documents being the owner or the employer of a project, is the best person to understand and appreciate its requirements and interpret its documents. It was held that the Constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions or that it was intended to favour one of the bidders. In Monte Carlo (supra), the Hon'ble Supreme Court concurred with the decision in Afcons (supra) and observed that the bidders expertise and technical capability and capacity must be assessed by the experts. The Court further held that exercise of the power of judicial review would be called for if the approach made is arbitrary or mala fide or the procedure adopted is meant to favour one of the bidders. It was held that technical evaluation or comparison by the Court would be impermissible. In Municipal corporation, Ujjain(supra), the Hon'ble Supreme Court held that in the absence of mala fides, arbitrariness or perversity in the action and where the order of the authority is not intended to favour someone, the Constitutional Court will not interfere in the decision making process or the decision. In Silppi Constructions (supra), the Division Bench of this Court laid down the broad principles of judicial review in contractual matters. This Court held that interference with the decisions taken by the tendering authority should be only in exceptional cases where it is found that the decision taken is pursuant to an unfair procedure adopted, or where the decision is unreasonable in that, it is one that no authority acting reasonably and in accordance with the relevant law would have reached or where the decision is mala fide or intended to favour some one. In Bharat Coking (supra), the Hon'ble Supreme Court held that judicial review in tenders has to be regarding the decision making process and that the person who is approaching the Writ Court must satisfy the court that the relief that is being sought is one in public law and not merely contractual. It was also held that the public interest should be demonstrated before the remedy is sought.

11. Regarding the decisions relied on by the counsel for the 3rd respondent, in Jagdish Mandal (supra), the Hon'ble Supreme Court held that evaluating tenders and awarding contracts are essentially commercial functions and the principles of equity and natural justice stay at a distance. The Court held that if the decision relating to award of contract is bona fide and is in public interest, judicial review is not attracted even if a procedural aberration or error in assessment or prejudice to a tenderer is made out. The Court categorically held that 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 dispute. The Hon'ble Supreme Court in Silppi Constructions (supra), affirmed the decision of the Division Bench of this Court and after referring to the earlier decisions of the Apex Court, held in paragraph 20 as follows:

"20. 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 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."

12. In the light of the legal position that is evident from the decisions discussed above, I am of the considered view that the petitioner is not entitled to succeed in this Writ petition. It is evident from the pleadings and the documents produced in the case that there is no public interest involved, which would justify interference with the decision of the employer to accept the bid submitted by the 3rd respondent and accepting the bid of the petitioner. The only contention of the petitioner is that item 1 in Ext.P5 is not a similar work as defined and does not qualify as a work completed within the cut-off period of 7 years. The said contention is built on the basis of a document, which was produced by the 3rd respondent in response to another tender process, which was floated by the 1st respondent. The petitioner h

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as no contention that Exhibit P5 is not genuine or that it was not issued by the employer. It is to be noted that Exhibit P5 was issued much before the present tender was floated and at that point of time, there was no requirement either for the employer or for the 3rd respondent to have mis-stated the date of completion of the work. Moreover, since the author of Exhibit P5 has confirmed its genuineness, the 1st respondent cannot be faulted for relying on the said document for the purpose of evaluating the technical qualification of the 3rd respondent. Moreover, it can be seen from the nature of the work, which is involved in item 1 of Exhibit P5, that the 2 agreements on the basis of which the work was carried out relate to the construction of a hospital building, including internal services, external electrical, firefighting and the execution of paramedical services, including balance civil work of 300 bedded hospital at Jaipur. Even though there are 2 agreements, the work is a composite work of the hospital at Jaipur. In the above circumstances, the contention put forward on the basis of the definition of the term 'similar work' by itself is not sufficient justification for this Court to exercise its jurisdiction under Article 226. The petitioner has not demonstrated any public interest nor do they have a case of mala fides on the part of the person issuing the tender. There is also nothing on record to show that the rules of the game were changed for the purpose of awarding the work to the 3rd Respondent. It is also in evidence that the petitioner who knew about Exhibit P10, even on the day on which the 3rd respondent and the petitioner were declared to be technically qualified, did not choose to challenge the technical qualification of the 3rd respondent before the financial bid was opened, 9 days later. The Writ petition was filed more than a month later at a time when the work order was to be issued to the 3rd respondent. It is also in evidence that the financial bid submitted by the petitioner is more than Rs.6.6 crores, than that of the 3rd respondent. Since there is no overwhelming public interest justifying judicial intervention and there is no arbitrariness, unreasonableness, bias, mala fides, irrationality or perversity involved, this Court will not be justified in interfering in any manner with the procedure adopted by the 1st respondent in finalising the tender regarding the work involved. The writ petition fails and is dismissed. The parties will bear their respective costs. All pending interlocutory applications are closed.