[CASE NUMBER] ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 21712 of 2016 [ENTITY] Petitioner(s) Versus [ENTITY] & 2 Respondent(s) Appearance: MR [ENTITY], SENIOR COUNSEL with [ENTITY], ADVOCATE for the Petitioner(s) No. 1 [ENTITY], ADVOCATE for the Respondent(s) No. 3 MR [ENTITY], ADVOCATE for the Respondent(s) No. 1 MR [ENTITY], ADVOCATE for the Respondent(s) No. 3 MRS [ENTITY], ADVOCATE for the Respondent(s) No. 3 MS [ENTITY], ADVOCATE for the Respondent(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 2 CORAM: HONOURABLE MR.JUSTICE [ENTITY] and HONOURABLE MR.JUSTICE [ENTITY] Date : 21/02/2017 ORAL ORDER
(PER : HONOURABLE MR.JUSTICE [ENTITY])
1. In this petition under [SECTION] and [SECTION] of the [ACT], the petitioner has prayed as under:-
"10. The petitioner, therefore, prays that:
(A) The Honourable Court be pleased to issue writ of certiorari or mandamus or any other appropriate writ, order or direction, directing the respondent-[ENTITY] to disqualify the aforesaid illegally prequalified bidders and to issue a work order in favour of the present petitioner if he is qualified technically for the tender ID No.226205 tender Notice No.19/2016-17 for the construction of MIG Housing at FP HC-NIC Page 1 of 9 Created On Sat Aug 12 06:52:13 IST 2017 163 and 191 of TPS 6 Kudasan in GUDA area;
(B) Pending hearing and final disposal of the present petition, the Honourable Court be pleased to stay the illegal action of the respondent authority to gave this tender to any other bidder of the said tender work for the construction of MIG Housing at FP 163 and 191 of TPS 6 Kudasan in GUDA area, in the interest;"
2. The petitioner is a private limited company registered under the [ACT] and challenge is made in this petition to the arbitrary and illegal action of the [ENTITY] (GUDA) of its tender dated 7.9.2016 for the purpose of construction of MIG Housing at Village-Kudasan, in GUDA area. It is the case of the petitioner that initially there were five bidders, who filed their on-line documents and bid for this tender and after undertaking preliminary exercise of scrutinizing the tender, the respondent found that one bidder viz. P.R.Patel & Company is not qualified in the pre- qualification stage and other four are pre-qualified including the present petitioner.
2.1 One of the basic grievance of the petitioner is that eight additional conditions were downloaded and, particularly additional condition no.3 provided that in tender no one may submit FDR/ Bank Guarantee/ Narmada Bond as earnest money/security deposit and wherever a reference is made to earnest money/security deposit vis-a-vis FDR/Bank guarantee / Narmada Bond it is to be treated as cancelled and bidders have to submit earnest money/security deposit only through the Pay Order/ Demand Draft/ Banker's Cheque of the Nationalized Bank or Government or Scheduled Bank. It is the case of the petitioner that except the petitioner all other bidders have filed their offers with FDRs and not with either HC-NIC Page 2 of 9 Created On Sat Aug 12 06:52:13 IST 2017 Pay Order or Demand Draft or Banker's Cheque as per condition no.3 of additional conditions. The petitioner had drawn the attention of the authority by addressing a letter on 13.10.2016 and also on 21.11.2016 to take appropriate action against bidders to disqualify them in view of non-compliance of above mandatory condition. Even show cause notice was given on 5.12.2016 and as the grievances were not redressed, the petitioner has filed writ petition before this Court.
3. By raising a very basic contention, Shri [ENTITY], learned Senior Counsel for the petitioner would contend that as per Clause 10.4.1 of earnest money deposit provided was Rs.75,51,103/- i.e. 1% of the estimated cost put to tender for construction of MIG Housing in the form of FDR/Demand Draft with a validity period of not less than six months issued by nationalized or a Government of Gujarat approved bank and the contract was to submit Demand Draft of tender fees, EMD in the form of Demand Draft/FDR of nationalized bank of Government of Gujarat approved bank having validity upto six months.
3.1 According to Shri [ENTITY], learned Senior Counsel the petitioner is the only bidder, who fulfills additional condition no.3 and exercise undertaken by respondent authority of qualifying other bidders including private respondent no.3, M/s.Shanti Constructions Pvt. Ltd. is only with a view to oust the petitioner from the fray and such action of the respondent authority would amount to committing breach of tender conditions and being unjust, unreasonable, arbitrary and discriminatory deserves to be quashed and set aside. By inviting our attention to the purpose viz. the construction of HC-NIC Page 3 of 9 Created On Sat Aug 12 06:52:13 IST 2017 MIG housing, it is submitted that simply because in affidavit-in- reply it is stated that by mistake committed additional conditions were downloaded is not a ground to justify the action of respondent. The explanation rendered by the deponent, in fact, render the whole procedure nugatory and to provide fair and equal opportunity to all, fresh tender bid is to be invited so that it may be applied uniformly to all bidders. Decision in the case of [PRECEDENT], has been relied and in paragraph 60 thereof, another decision in the case of [PRECEDENT] is referred to wherein it is observed that the law relating to award of contract by the State and Public Sector Corporation was reviewed in [PRECEDENT] and it was held in that case that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. In the facts of this case, additional conditions, particularly condition no.3, forming part of the tender appear in vernacular is completely contrary to Clause 10.4.1 of the tender document. Under the circumstances, the petition deserves to be allowed by granting prayer made therein.
4. Per contra, Ms.[ENTITY], learned advocate appearing for the respondent nos.1 and 2 heavily relied on the affidavit-in-reply dated 6.2.2017 and it is submitted that the HC-NIC Page 4 of 9 Created On Sat Aug 12 06:52:13 IST 2017 petition suffer from vice of non-disclosure of certain material facts, as in response to the letters addressed by the petitioner, the respondent authority replied on 2.12.2016 and informed it that upon opening of financial bid it was found that rates quoted by the petitioner is 6.66% higher than the estimated rate and it was further informed that the price quoted by the lowest tenderer is 8.86% lower than the estimated rate, which is affordable and acceptable to the State and it will be beneficiary to the tune of Rs.11,79,93,105.25 ps. It is also submitted that initially the tender was uploaded on the website on 7.9.2016 inviting on-line percentage rate tenders (two bid system) from the prospective, experienced bidders possessing eligibility criteria mentioned in the tender document. It is also submitted that the petitioner ought to have remained present in the pre-bid meeting, if any confusion had arisen based upon downloading of additional conditions in vernacular while bid was open and further the mistake viz., the last page containing additional conditions in vernacular which was uploaded along with tender document was a result of inadvertent mistake inasmuch as there was no additional attachment to the tender document and ultimately it was not an essential change of the conditions originally prescribed. It is submitted that what is required to be seen is an amount of earnest money/security to be received by the authority inviting tender and not the mode of presentation. By relying on basic tender document and communication addressed to the petitioner and decision taken by the highest authority of GUDA in presence of bidders, it is submitted that procedure is fair, transparent and non-arbitrary and deserves no interference and the petition deserves to be rejected.
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5. Having heard learned counsel appearing for the parties, perusal of the record of the case and particularly contentions raised on the basis of the additional conditions attached with tender document and condition no.3 providing cancellation of mode of receiving earnest money and security deposit by FDR/ Bank Guarantee/ Narmada Bond and such earnest money and security deposit to be furnished by the bidders of any nationalized bank/government or scheduled bank by way of Pay Order/ Demand Draft/ Banker's Cheque, for which categorical statement on oath is made by the competent authority that last page containing additional conditions in vernacular which was uploaded with the tender document, was a result of an inadvertent mistake inasmuch as there was no additional attachment to the tender document. Besides condition nos.1.4, 1.7 and 1.10 of Section 1 of [ACT], the requirement is submission of EMD in the form of Demand Draft/ FDR of nationalized/scheduled bank and by no stretch of imagination it can be said that interest of public exchequer is in any manner jeopardized or that such an exercise is undertaken only with a view to oust the petitioner from participating in the process. Both the modes of acceptance of earnest money/security deposit covered by way of FDR/Narmada Bond/ Bank Guarantee and even by payment by Pay Order/Demand Drafts/ Banker's Cheque of nationalized bank or government or scheduled bank, ultimately, provided for fulfillment of the conditions viz. the security deposit so that further process of tender can be undertaken and in case of breach of any of the conditions of [ACT], appropriate action can be taken as provided therein, which may include even forfeiting such earnest money or security deposit. By considering the basic tender document, condition nos.1.4, 1.7, HC-NIC Page 6 of 9 Created On Sat Aug 12 06:52:13 IST 2017 1.10 and 10.4.1 and even additional conditions issued, though by inadvertence, in no way neither any of the rights of the petitioner is jeopardized nor it is ousted from the process any further. Therefore, we find that decision in the case of M/s.[PRECEDENT] (supra) is of no help to the petitioner. Paragraph 60 of the aforesaid decision is reproduced hereunder:-
"60. Recently, in [PRECEDENT], upon noticing a large number of decisions, this Court stated "15. The law relating to award of contract by the State and public sector corporations was reviewed in [PRECEDENT] and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that 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 powers under [SECTION] 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 interfere."
(Emphasis supplied) HC-NIC Page 7 of 9 Created On Sat Aug 12 06:52:13 IST 2017 5.1 The principles culled out by the Apex Court in paragraph 68 of the aforesaid decision reads as under:-
"68. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under :
i) If there are essential conditions, the same must be adhered to;
ii) 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;
iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing
iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction
v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with."
(Emphasis supplied)
6. Aforesaid finding, on the contrary supports the case of the respondents viz. when a decision is taken by appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merit and found ultimately that successful bidders substantially complied with HC-NIC Page 8 of 9 Created On Sat Aug 12 06:52:13 IST 2017 the purport and object for which essentially conditions were laid down, the same may not ordinarily be interfered with. In view of above, the petition being devoid of merits is hereby rejected. Notice is discharged. No costs.
([ENTITY], J.) ([ENTITY], J.) *malek HC-NIC Page 9 of 9 Created On Sat Aug 12 06:52:13 IST 2017