Sabyasachi Bhattacharyya, J.
1. At the outset, it may be noted that counsel for the petitioners and respondent nos. 3 to 5, apart from arguing orally, submit succinct notes of arguments, which effort is appreciated by this court.
2. The petitioners' case is that the petitioner no. 1, a joint venture consortium, had participated in a tender issued by the ECL authorities, that is, respondent no. 3, on February 26, 2020 inter alia for the works of extraction, transportation, removal and re-handling of coal.
3. As per the Notice Inviting Tender (NIT), the estimated contract value of the tender was Rs.1,17,95,10,500/- and the earnest value payable with the bid was Rs.21,06,300/-. The contract period of completion was 255 days.
4. It is argued on behalf of the petitioners that, although petitioner no. 1 was eligible on all accounts in terms of stipulations laid in Clause 8 of the NIT as well as the petitioners deposited earnest money and produced documents in respect of previous similar work having been done by the petitioner no. 1, the petitioner no. 1 was disqualified from the tender process. It is argued that the total work experience uploaded by the petitioner no. 1 was worth Rs.26,50,73,868/-, which was more than the required credentials of 65 per cent of the annualized estimated value of work, aggregating to about Rs.16,85,01,500/-.
5. Such previous work, according to the petitioners, was corroborated by a certificate issued by the ECL (respondent no.3) itself dated March 17, 2019, which showed that the petitioner no.1 did 40 per cent of the work, worth Rs.22,29,25,799.70 p. The said document alone substantiated sufficiently the petitioners' eligibility in the impugned tender process. That apart, another credential issued by the respondent no. 3 itself, dated February 29, 2020 for work of a similar nature amounting to Rs.4,12,93,011/- was also uploaded, taking the total work experience to Rs.26,50,73,868/-.
6. Subsequently, petitioner no. 1 succeeded in the financial bid and was the L1 bidder and further succeeded in the reverse auction thereafter, thus, becoming entitled to the award of contract under the impugned NIT.
7. However, the petitioners subsequently learnt that respondent no. 3 had discarded the work experience certificate furnished by the petitioner and disqualified the petitioner no. 1 by invoking Clause 3.5 (ii) of the Instructions to Bidders, as annexed at page-53 to the writ petition (which was a part and parcel of the NIT), alleging that the petitioner no.1 had failed to perform two contracts in the Jambad OCP of the Kajoria Area and in the Parasea OCP of the Kunustoria Area.
8. Learned counsel for the petitioners submits that the work experience certificate submitted by the petitioner no. 1 could not have been rejected on the basis of subsequent internal communication, made behind the petitioner's back, once such certificate was granted by the respondent no. 3 itself and after the petitioner no. 1 was accepted as the successful bidder.
9. Apart from urging the Natural Justice Principle of audi alteram partem and equity, the petitioners also alleged that the performance certificates, as mentioned above, could not be brushed aside and revisited subsequent to the success of the petitioner no. 1 in the tender process.
10. That apart, the alleged incomplete performance of the petitioner no. 1 in the earlier work was entirely due to the delay occasioned by the ECL itself, the excavation being interrupted by water logging and other unavoidable reasons. After having certified satisfactory performance, a contrary report ought not to have been considered behind the back of the petitioner, thereby making the tender process opaque.
11. The petitioners rely on two purported testimonials dated September 4, 2019, as annexed to the petitioners' supplementary affidavit dated July 30, 2020. The petitioners also rely on certain documents annexed to their supplementary affidavit dated August 6, 2020, which apparently show that the ECL authorities could not provide the petitioners with the land to carry out the said work in respect of Jambad OCP.
12. As such, the petitioner no. 1 was re-awarded the previous work despite a penalty having been imposed on the petitioner no. 1 for the alleged delay, which was paid by the petitioner no. 1 to avoid controversy, although the petitioner no. 1 being not at fault for such delay.
13. Learned counsel for the petitioners submits further that the petitioner no. 1 could not suffer from double jeopardy, both having to pay monetary penalty for the delay and being precluded from the present contract, thereby putting at risk the future prospects of the petitioner no. 1 as well in respect of other contracts.
14. That apart, it is argued, the present tender was ultimately awarded to respondent no. 6 though another subsidiary of the Coal India Limited (respondent no.1) than the ECL had banned respondent no. 6 from further work. That apart, the decision to award the present contract to the respondent no. 6 instead of the petitioner no. 1 would entail an expenditure over Rs. 3 crore additionally.
15. Hence, it is argued that the tender process was conducted in a mala fide and arbitrary manner, tainted with patent partiality in favour of the respondent no. 6, who was initially the L3 bidder.
16. It is further alleged by the petitioners that the letter of acceptance issued in favour of the respondent no. 6 and the subsequent contract awarded in terms of the impugned tender to the said respondent ought to be quashed and set aside.
17. Learned counsel appearing for the respondent nos. 3 to 5 argues that, by paying the penalty for delay in the earlier work, petitioner no. 1 had acquiesced to its fault for such delay. Such defect in performance was a legitimate ground for disqualification even of an otherwise eligible bidder as per the impugned NIT. As per Clause 3.5 of the Instructions to Bidders, in particular sub-clause (ii), record of poor performance such as abandoning work, not having properly completed the contract or having caused inordinate delay in completion of work etc. were valid grounds on which the petitioner no. 1 was disqualified in the present case.
18. Clause 9 of the NIT, which stipulates the work experience for eligibility of a bidder, is to be read with Clause 3.5 of the Instructions to Bidders.
19. Learned counsel for the respondent nos. 3 to 5 next argues that, contrary to the arguments advanced by the petitioners, the respondent no. 6 was not debarred from being selected as a successful bidder, despite having been banned by any other subsidiary of Coal India Limited than the ECL. For such proposition, a banning policy, as decided in a purported board meeting of the respondent no. 1 dated November 8, 2014, annexed to the written notes of arguments and relied on at the time of arguments, is produced by the arguing respondents.
20. Moreover, it is argued that the pith and substance of Clause 17 of the impugned NIT is that respondent no. 3 does not bind itself to accept the lowest bidder and reserves the right to reject any or all of the bidders without assigning any reason whatsoever and/or to split up the work between the two or more tenderers or accept the tender in part or in its entirety.
21. That apart, a report was filed by the Independent External Monitors (IEMs), as annexed to the written arguments and relied on at the time of oral arguments, which is supposed to prove that the tender committee's decision to disqualify the bid of petitioner no. 1 was revisited and examined by Independent External Monitors. Hence, all questions of bias or partiality are eliminated. Such report gives extensive reasons for the decision, thus cancelling out any allegation of bias.
22. Moreover, the petitioners, as per counsel of respondent nos. 3 to 5, failed to make out mala fides or arbitrariness on the part of the respondent no. 3 in conducting the tender process. It is further argued that the respondent no. 3 was the author of the NIT and, as per settled law, the best judge for interpretation of the terms of the NIT.
23. Lastly, it is argued that, in the meantime, a new contract has already been awarded in terms of the impugned tender to the respondent no. 6, who stood as the next successful bidder after the elimination of the petitioner no.1 (L1) and the L2 and that work has already been commenced by the awardee. It is submitted that the private respondent no. 6 has already removed 96,000 cum overburden in the month of August, 2020 after valid disqualification of the petitioner no. 1 and the L2 and the award of contract to respondent no. 6 on July 23, 2020, preceded by a letter of acceptance dated July 9, 2020 and issuance of a work order in favour of the respondent no. 6 on July 21, 2020.
24. As such, respondent nos. 3 to 5 argue that the court ought not to interfere merely because some inconvenience has been caused to the petitioner no. 1, one of the bidders, despite no mala fides, arbitrariness or partiality on the part of the respondents having been shown by the petitioners from the entire records.
25. The pivotal terms of the impugned NIT for the purpose of deciding the present case are contained in Clauses 9, sub-clause A and 17 of the NIT. That apart, Clause 3.5 of the Instructions to Bidders is also germane for the said purpose.
26. The aforesaid clauses are set out below:
“NIT dated February 26, 2020:
9. Eligibility Criteria:
A. Work Experience:
The bidder must have in its name or proportionate share as a member of JV/Consortium, experience of having successfully executed (includes completed/ongoing) works of similar nature valuing 65% of the annualized estimated value of the work put to tender (for period of completion over 1 year) / 65% of the estimated cost of the work (for completion period up to one year) put to Tender in any year (consecutive 365 days) during last 7 (Seven) years ending last day of month previous to the one in which bid applications are invited.
NOTE:- As estimate has been prepared excluding GST, Value of experience of successfully executed work of similar nature shall be considered excluding GST.
Definition of Similar works: - Excavation, loading and transportation of OB/Soil/Shale/Coal/minerals extracted by mechanized means.
For wok experience bidders required to submit Satisfactory Work Completion Certificate issued by the employer against the Experience of similar work containing all the information as sought on-line. Work order, BOQ and/or TDS may be sought during clarification or along with deficient documents.
Works of similar nature to be suitably framed by Tender inviting authority of ECL based on its own necessity.
For substantiating past experience, the bidder should submit the work order, certificate (issued by work executing authority) of actual work already executed including value and period. TDS certificate may be sought during clarification.
“Annualized Value” of the work shall be calculated as the “Estimated Cost/Period of completion in days x 365”
For Updation, cost of previous executed works shall be given a simple weightage of 5% per year to bring them at current price level. The year can be considered as suitable consecutive 365 days till the last day of month previous to one in which bid has been invited. Updation will be considered for full or part of the year considering 365 days in a year till the last day of month previous to one in which bid has been invited.
In respect of the above eligibility criteria the bidders are required to furnish the following information on-line:
i) Start date of the year for which work experience of bidder is to be considered for eligibility.
ii) Start date & end date of each qualifying experience (similar nature).
iii) Work Order Number / Agreement Number of each experience
iv) Name & Address of Employer/Work Order issuing authority of each experience.
v) Percentage (%) share of each experience (100% in case of an individual/proprietorship firm or a partner in a partnership firm and the actual % of share in case of a Joint Venture/Consortium)
vi) Executed Value of work against each experience.
vii) In case the bidder is a Joint Venture/Consortium, the work experience of any one, two or three of the individual partners of JV/Consortium or the JV/Consortium itself may be furnished as the work experience of the bidder.
17. The Company does not bind itself to accept the lowest tender and reserves the right to reject any or all the tenders without assigning any reasons whatsoever and to split up the work between two or more tenderer or accept the tender in part and not in its entirety.
Instructions to Bidders:
3.5 Even though the bidders meet the above qualifying criteria, they are subject to be disqualified:
(i) if they have made misleading or false representations in the forms, statements and attachments submitted as proof of the qualification requirements.
(ii) if they have record of poor performance such as abandoning the works, not properly completing the contract, inordinate delays in completion or financial failures etc. “
27. It is evident from Clause 9 of the NIT that the definition of similar works incorporated in the required work experience, as one of the eligibility criteria, mentions that the bidders were required to submit Satisfactory Work Completion Certificate issued by the employer against similar work experience. The term “Satisfactory” indicates that the necessary work experience would not only be quantitatively (65 percent of the estimated cost) but also qualitatively satisfactory.
28. Clause 17, on the other hand, releases the company from the liability to accept the lowest tender and reserves the right of the company (ECL) even to reject any or all the tenders without assigning any reasons whatsoever.
29. These are primarily the two clauses, which carve out exceptions to the general eligibility criteria as stipulated in Clauses 8 and 9 of the NIT.
30. Read in conjunction with Clause 3.5(ii) of the Instructions to Bidders, it is evident that even though the bidders meet the qualifying criteria, they were subject to be disqualified if they had record or poor performance such as abandoning the works, not properly completing the contract, inordinate delays in completion, etc. Thus, even if, subsequent to the bid, the respondent no. 3 found out evidence of the conditions stipulated in Clause 3.5, as mentioned above, the concerned bidder could be disqualified.
31. In the present case, sufficient reasons were provided in the decision of the tender committee disqualifying the petitioner no. 1, as well as the detailed report of the IEMs (Independent External Monitors) which corroborated in substance the disqualification of petitioner no. 1.
32. The conditions stipulated in Clause 3.5 of the Instructions to Bidders, read in conjunction with Clause 17 of the NIT as well as the definition of "similar works" as given in Clause 9A of the NIT, make it abundantly clear that, even after acceptance of the bid and prior to awarding the contract to the initially successful bidder, it was within the rights of respondent no. 3, the employer, to disqualify all or any of the tenderers on the ground as specified in Clause 3.5 as aforesaid, which was bolstered by the power given to the company (respondent no. 3) reserving its right to reject any or all the tenders even without assigning any reasons, further qualifying that the condition that the company did not bind itself to accept the lowest tender.
33. In the event of disqualification upon subsequent enquiry, no further hearing or prior notice to the disqualified bidder is contemplated within the periphery of either the NIT or the Instructions to Bidders. In the event of disqualification, rather, the eligibility criteria would be affected at their very root and a previously eligible bidder might turn out to be disqualified, consequentially ineligible for award of the contract pursuant to the tender.
34. In the present case, the writ court cannot delve into the nitty-gritties of the decision of the authors of the impugned tender, more so in view of the same having been confirmed by the Independent External Monitors, who lend an aura of credibility to the decision.
35. Hence, since both the tender committee and the IEMs, in their decision and report respectively, came to the occlusion that the Work Completion Certificate submitted by the petitioner no. 1 for the previous work done by it was not satisfactory in terms of Clause 3.5(ii) of the Instructions to Bidders, the company was not bound to accept the lowest tender offered by the petitioner no. 1, since it has reserved its right to reject such tender.
36. In such view of the matter, a factual enquiry and a detailed examination of the evidence and materials on record, to test the veracity and legality of the decision to disqualify petitioner no. 1, is beyond the scope of the present writ petition.
37. It is well-settled that a tender process cannot be set aside merely due to the inconvenience of one of the bidders but had to pass through the tests stipulated in Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited and another reported at (2016) 16 SCC 818.
38. The said judgment was relied on by both the contesting parties. The crux of the judgment is found in paragraphs 13 to 15 thereof, which are quoted here in below:
“13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.
14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India [ (1979) 3 SCC 489] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous — they must be given meaning and their necessary significance. In this context, the use of the word “metro” in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.
15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. 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. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.
…. …. …. …. ….”
39. The Supreme Court, in the said judgment, clarifies that a mere disagreement with the decision-making process or the decision of the administrative authority is not reason enough for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before such interference, if at all. It was further laid down that it was possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that, by itself, could not be a reason for interfering with the interpretation given.
40. As such, the tests and boundaries of interference in a tender process or decision have been clearly laid down in the said reported judgment.
41. In the present case, no instance of mala fides, favouritism, arbitrariness, irrationality or perversity has been established by the petitioners. Rather, the
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decision to disqualify the petitioner no. 1 was confirmed by an independent external body of monitors, thereby curtailing any presumption of bias or favouritism. 42. That apart, the respondent no. 3 had sufficient leeway within the four corners of the NIT itself, read with the Instructions to Bidders, which was an integral part of the NIT, to disqualify even the successful bidder (in the present case, the petitioner no.1) even at a subsequent stage after acceptance of bids, upon sufficient enquiry into the matter. In the present case, since the previous work experience relating to the respondent no. 3 itself was discarded on the ground of sufficiency and incompleteness and since the delay on the part of the petitioner no. 1 in the earlier work was acquiesced to by petitioner no. 1 itself by not challenging the penalty but paying the same, there was no bar in disqualifying petitioner no.1, as done in the case at hand. 43. In such view of the matter, petitioner no. 1 was considered ineligible in accordance with the provisions of the NIT and allied documents. It is too late in the day for the petitioners to challenge the previous imposition of penalty, on the basis of the delay occasioned by petitioner no. 1 in the earlier project, which was the basis of the alleged work experience of petitioner no. 1. Negation of the said basis not only renders the petitioner no. 1 ineligible as far as work experience is concerned, even the stipulation of having done 65 percent of the annualized estimated value of the work was nullified and the amount of previous work experience of petitioner no. 1 dropped below the eligibility mark. 44. Mere inconvenience of the petitioner no. 1 in future tenders cannot be a ground to set aside the impugned tender process, particularly in view of the project being of public interest and since a substantial portion of the work under the tender has already been undertaken by the awardee of the contract post-disqualification of the petitioner no. 1 (L1) and the L2. 45. Hence, WPA No. 5950 of 2020 is dismissed on contest, without any order as to costs. 46. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.