THE HIGH COURT OF SIKKIM = GANGTOK (Civil Extra-Ordinary Jurisdiction) WP(C) No.27 of 2010 Ffu M/s. Prasad and Company (Project Works) Ltd., having its registered office at Hyderabad, P.O. Begumpet, Andhra Pradesh represented by and throiJgh the Manger of the Company. Mr. Renukuntla Shobanbabu, S/o Late R. Narendar, R/o Flat No.204, Siri Peal House, J. J. Nagar, Alwal, Hyderabad. versus The State of Sikkim Service through the Secretary, Buildings & Housing Department, Government of Sikkim, Gangtok, East Sikkim. 2. The chief Engineer, Buildings & Housing Department, Government of Sikkim, Gangtok, East Sikkim, 4. ... Petitioners M/s. Civil Engineers Enterprises Pvt. Ltd., Kolkata, represented by and through Managing Director having address at: 11, Shakespeare Sarani, Kolkata -700 071, M/s, Consolidated Construction Consertium Ltd,, Chennai represented by and through its g,a!nadgiT#kD5:::::,r€.a[Y+?gc:iodnr;,SSM;[a:pore, Chennai - 600 004. M/s. Mackintosh Bur.n Ltd., Kolkata, represented by and through its Managing Director having address at: DD-18/8, Sector 1, Salt Lake, Kolkata - 700 064. 6. Tender Evaluation committee, represented by and through the Secretary, Buildings & Housing Department, Government of Sikkim, Gangtok, East Sikkim. For Petitioners ... Respondents : Mr. A. Moulik, SeniorAdvocate with Mr. N. G. Sherpa, Ms. K. D. Bhutia and Mr. Manish Kr. Jain, Advocates. ForRespondentsNo.1,2&6 : Mr. J. 8. Pradhan, Additional Advocate General with Mri S. K. Chettri, Assistant Government Advocate. For Respondent No.3 : Mr. Bhaskar Raj Pradhan, Senior Advocate with Ms. Yangchen Doma Gyatso, Mrs. Pema Yeshey Bhutia, Mr. Karma Tshering Bhutia and Mr. Y, Sharma, Advocates. For Respondents No.4 & 5 : None present. BEFORE : HON'BLE MR. JUSTICE P. D. DINAKARAN, CHIEF JUSTICE. HON'BLE MR. JUSTICE S. P. WANGDI, JUDGE. Last date of hearing : 10-08-2010 DATE OF JUDGMENT : 19108-2010 I ue £ M E J± I Wangdi, J. By this writ petition, the petitioners have sought to assail the tender process by which the respondent no.3 was declared as the Firm having scored the highest points in the consolidated score of Technical and Financial Bids and found eligible to be awarded with the contract work, namely, Drawing, Design and Execution of 575 bedded Multi-Specialty Hospital at Sichey (Sochyagang), Gangtok, Sikkim, as being illegal, unconstitutional and in violation of the terms and conditions laid dovin in the Notice Inviting Tender (in short "NIT"). q7 i___ -_- .._ _ --- 2. The essential facts material for the adjudication of the case are that the petitioner no.1 is a Public Limited Company registered under the Indian Companies Act, 1956, having its registered office at Hyderabad, P.O. Begumpet, Andhra -Pradesh and the petitioner no.2 is the Manager and the Constituted Attorney of the petitioner no,1 and is a citizen Of India. It has been stated that petitioner no.1 is one of the largest Indian Construction Company having engaged in large scale construction projects as well as large scale drawing, designing and execution of projects and has an enviable record of carrying out turnkey projects with an average annual turnover of Rs.400 crores in the last 5 years. Respondents no.3, 4 and 5 are also Construction Companies like the petitioner no.1. These respondents and the petitioner no.1 had taken part in the tender process with regard to the aforesaid work in response to a NIT floated by the respondent no.1, State of Sikkim, through the respondent no.2, who is the Chief Engineer, Buildings & Housing Department, Government of Sikkim. Respondent no.6 is the Tender Evaluation Committee to carry out the tender process with regard to the work in question. 3. As per the petitioners, while clause 4 prescribed the Specific Project Experience (minimum criteria) for selection of firms, clause 8 laid down the Bid Evaluation Procedure and clauses 12.1 to 12.6 provided for the procedure and the modalities for holding negotiation with the successful tenderer declared as such after evaluation of the final score. We may not allude to the details W of the terms and conditions of these clauses for the moment. But suffice it to say that the evaluation criteria prescribed for selection of firms in terms of clause 4 of the NIT would be quality and cost based selection method and that evaluation will be made in 3 Stages, i.e., Stages I, 11 and Ill. Stage I, prescribing essential eligibility criteria as required under clause 2 of the NIT, Stage 11 being the.Evaluation of Technical Bid and Stage Ill the Evaluation of Financial Bid. It is stated that the petitioner no.1 having fulfilled the essential eligibility criteria prescribed under clause 2 of the NIT, purchased the tender documents on payment of necessary fees and submitted it in the manner prescribed in the tender forms in three separate sealed covers, Part I whereof related to Expression of Interest (EOI), Part 11 the Technical Bid and part Ill the Financial Bid as required under clause 3 of the tender documents along with the prescribed earnest money in the form of a Bank Guarantee. On evaluation of the participating firms at the Stage I, i.e,, Expression of Interest (EOI), the respondents no,3, 4 and 5 were declared as having qualified for the next 11 & Ill Stages, i.e., Technical and Financial Bids and declared the petitioner no.1 and one M/s. Larsen & Toubro, Kolkata, as disqualified. When requests made by the petitioners orally and through a legal notice dated 06- 05-2010 for reconsideration of the case of the petitioners were not responded to, they filed a WP(C) no.21 of 2010 before this Court in which it succeeded in getting a favourable Order dated 12-05-2010 by which the State-respondents were compelled to qualify them in the Expression of Interest (EOI) Stage and consequently were permitted to participate at Stages 11 and Ill, i.e., Technical and Financial Bids respectively. It is stated that while the Technical Bid ' of the respondents no.3, 4 and 5 had already been opened that of the petitioners were opened only after this Court passed the Order dated 12-05-2010 and that since the petitioners were not informed about the date and time of opening of its Technical Bid by the State-respondents, objections could not be raised against the legality and correctness of the Evaluation of the Technical Bids submitted by the respondents no.3, 4 and 5. It is further alleged that the State-respondents did not disclose the marks secured by the Bidders. It was only later that the petitioners were served with a sealed letter conveying to them the marks secured by them in the Technical Bid and the Financial Bid, following which the marks secured by all the contractors after the Technical Bid and the Financial Bid were declared ranking them as L-1, L-2, L-3, L-4, L-5 as required under clause 12 of the tender documents. 4. The petitioners have also challenged the evaluation procedure followed by the Tender Evaluation Committee, respondent no.6, on various grounds which shall be alluded to later, but it will be adequate to mention that the petitioners claim to have complied with all the requirements prescribed by the State-respondents for the purpose of evaluation of all the profiles relevant in terms thereof. It has been alleged by the petitioners that the respondents no.3, 4 and 5 ought not to have been permitted to participate in the tender process as they did not fulfil even the essential criteria as revealed from their Master Data available online in the Ministry of Corporate Affairs, Government of India Website. By a letter dated 18-05-2010, filed as Annexure 14 to the writ petition, the writ petitioners had lodged a protest by placing on record such information pertaining to the respondents no.3, 4 and 5, In spite of this, it is alleged that the State- respondents proceeded on with the tender process and declared the results. 5. It has further been alleged that the State-respondents cry did not adhere to the schedule of event:s of the t:ender works published in their website and the piece-meal manner in which the results of the Technical Bid and the Financial Bid were declared, has given the petitioners sufficient reasons to suspect manipulation of the result of the Technical Bid. It was, therefore, alleged that the entire tender process was illegal, vitiated by factual malice, arbitrariness and unreasonable. It was further alleged that the respondents no.3, 4 and 5 had been given undue advantage in the tender process and although none of t:hem had fulfilled the essential criteria for participating therein, and that unequal and discriminatory treatment have been meted out to the petitioner no.1 by the State-respondents with regard to the allocation and allot:ment of marks in the Technical Bid also. In the above premises, the petitioners have sought for a wr/.f of mandamus to declare that the respondents no.3, 4 and 5 did not fulfil the essential pre-qualifications criteria as contained in the NIT and thus to declare the petitioners as having secured the highest score and thereby entitled to be graded as L-1 and, consequently for a S c3.p direction upon the State-respondents to award the work to the petitioners. 6. Before going into the merits of the case, it would be essential to record certain significant incidents that took place with regard to the matter in //.s preceding the filing of the present writ petition and during its pendency. As disclosed by the petitioners, WP(C) no.21 of 2010 was filed by them before this Court on 12-04-2010 when the petitioner no.1 was declared as disqualified at the Stage I, i.e., Expression of Interest (EOI), on the sole ground that such disqualification was erroneous as it had fulfilled the requisite essential criteria prescribed under clause 2 and sub-clauses thereunder. It had been prayed in the writ petition, t.nter a//.a, that impugned notice dated 04-05-2010 filed as Annexure P8 thereto declaring the petitioner company as having disqualified be quashed and that the petitioner be treated as qualified for the purpose of the said project. It is of relevance to note that the said Annexure P8 being the result sheet dated 04-05-2010 put up on the Notice Board in the Office Premises of the respondent no.2, contained the names of all those declared as qualified and those as not. 8. This Court takes I.udicial notice of the fact being a matter of record that on 12-05-2010 when WP(C) no.21 of 2010 was admitted for hearing by one of us sitting singly (Wangdi, J.) the learned senior counsel on behalf of the petitioners sought for a prayer either for stay of the operation of the notice Annexure P8 or in the alternative for a direction upon the State-respondents to consider the Technical Bid as well as the Financial Bid submitted by them. 9. Upon hearing the parties and considering the entire car records, the Court held prt.rna fac/.e that the petitioners appeared to have fulfilled the necessary eligibility criteria and, therefore, directed the State-respondents to consider permitting the petitioners to participate in the tender process on reconsideration of the Expression of Interest (EOI) submitted by them making it clear that the findings reflected in the Order should not be construed as expression of opinion on the merits of the case. On 22-07-2010 when the case came up for hearing, it was submitted on behalf of the petitioners that since they had been permitted to participate in the tender proceedings in pursuance of the Order of the Court dated 12-05-2010 their grievances stood fully redressed and, therefore, the writ petition would not survive having been rendered infructuous, and as such they be permitted to withdraw the writ petition. Upon this, the learned Additional Advocate General submitted that he would have no objection to such withdrawal if it is placed on recorc! that the participation of the petitioner in the tender process was subject to the outcome of the writ petition, t:hat being the underlying substance of the Order dated 12-05-2010 and that the counter-affidavit filed on behalf of the State-respondents be taken on record. Under such circumstances, the writ petition was allowed to be withdrawn and was dismissed as withdrawn by Order dated 22-07-2010. fi7 ]0. When the present writ petition was moved on 07-06- 2010 before one of us (Wangdi, J.), it was stated by Mr, J. 8. Pradhan, learned Additional Advocate General, at the outset by placing before this Court Minutes of the Meeting of the Tender Evaluation Committee held on 24-05-2010, that in that meeting attended also by the petitioners, it was decided that the final result giving the consolidated score of Technical and Financial Bids in respect of each of the qualified firms would be given only after conclusion of the departmental enquiry being held into the complaint Annexure P14 lodged by the petitioners. Annexure P14 contained the very allegations of ineligibility of the respondents no.3, 4 and 5 canvassed in the writ petition. Since disposal of Annexure P14, therefore, would deal with the foundational grievance contained in the present writ petition, it was directed that the departmental enquiry should be disposed of expeditiously in accordance with law, making it clear that until that is done no work order shall be issued without the leave of the Court. The reasons for imposition of this restriction upon the State- respondents were (i) to expedite disposal of the writ petition and (ii) to enable the State-respondents in ascertaining the veracity of the allegations made against the respondents no.3, 4, and 5, lest the work in question in which immense public interest was involved being a Multi-Specialty Hospital, should fall in the hands of incompetent and ineligible persons. In terms of the aforesaid Order, an affidavit was filed by the State-respondents registered as CMAppl. No.55 of 2010 by which the State-respondents have fi7 10 placed on record as Annexure Al the findings of the Tender Evaluation Committee on the objection Annexure P14 of the petitioners. ]]. We have examined Annexure Al and find that it contains elaborate and detailed findings on every allegation made against each of the respondents being respondents no.3, 4 and 5. Based thereupon, it appears that the Tender Evaluation Committee has come to a conclusion that the decision to qualify those Companies for participating in the tender process did not call for any review/reconsideration thereby rejecting the objection Annexure P14 submitted by the petitioners. It may be noted that out of respondents no.3, 4 and 5 against whom the allegations have been made, only respondent no.3 has chosen to appear before us and contest the writ petition. Under such circumstances, it would not be relevant to deal with matters pertaining to the respondents no.4 and 5. ® ]2. Since this court was of the view that the finding of the Tender Evaluation Committee on the complaint Annexure P14 dealt with the root of the mat:t:er in /t.s in the writ petition, this Court did not deem it necessary to call for a counter-affidavit from t:he State- respondents and, therefore, proceeded to hear the matter on the basis of the materials that was available before us and also upon the counter-affidavit filed on behalf of the respondent no.3. 11 13. Mr. A. Moulik, learned senior counsel on behalf of the petitioners sought for time to file a reply to the affidavit of the State-respondents placing on record the findings of the Tender Evaluation Committee on the complaint Annexure P14, but as we were of the view that no purpose would be served in allowing any response as it would be inappropriate in law for us to delve into the merits of the findings arrived at by the Tender Evaluation Committee, the prayer was rejected and proceeded to hear the matter. However, before doing so, we made it clear that while disposing of writ petition based on the findings of the Tender Evaluation Committee that liberty would be given to the petitioner no.1 to approach this Court afresh to assail the findings of the Tender Evaluation Committee if they were so advised and that in the event we proceeded to hear the matter on merits such option may not be available to them, On instructions received from the petitioners, Mr. A. Moulik conveyed to us the instructions of the petitioners to go ahead with the hearing of the case in its merits. ]4. Commencing his argument on the merits of the case, Mr. Moulik most strenuously argued that the entire tender process could not be sustained as ineligible persons particularly the respondent no.3, who failed to fulfil the essential conditions, were allowed to participate and that the findings of the Tender Evaluation Committee could not be sustained as the decision- making process in arriving at such finding was vitiated for violation of the principles of natural justice, in as much as, the petitioners were not given an opportunity of personal hearing by the Tender 12 Evaluation Committee. It was submitted that the entire process of evaluation of the bids in all the three Stages was erroneous having ignored all relevant considerations and that respondent no.3 was given an undue advantage in the face on the glaring fact that it had failed to qualify even the terms and conditions laid down in the pre-bid meeting. It was urged that the State-respondents failed to adhere even to the standards and norms laid down by it in the pre-bid meeting held in terms of clause 7 of the tender documents. Under such circumstances, the decision declaring the respondent no.3 as t:he highest scorer and graded as L-1 could not be sustained and was liable to be quashed and set aside. 15. Mr. J. 8. Pradhan, learned Additional Advocate General appearing on behalf of the State-respondents no.1, 2 and 6, submitted that the very foundation of the writ petition that the respondent no.3 did not fulfil the essential criteria contained in clause 2 and sub-clauses thereunder having found by the Tender Evaluation Committee to be incorrect, the writ petition did not survive any more .and was liable to be dismissed. It was further submitted by him that the petitioners did not possess the necessary /ocus sfar]c//. to bring the present writ petition having participated in the tender process willingly with the full knowledge Qf the alleged ineligibility of the respondent no.3 and, that they are now estopped from raising such plea after having failed to be the successful in the bid, It was further submitted that the petitioners were permitted to participate in the tender proceedings post-EOI Stage only in due deference to the Order of this Court in WP(C) 13 no.21 of 2010 and such participation was subject to the outcome of the writ petition. The writ petition having been wit:hdrawn without any liberty, all actions taken in pursuance of the said Order ceased to have any effect with the.consequence that the petitioner no.1 stood disqualified having failed to fulfil the essential criteria under clause 2 and sub-clauses thereunder. The present writ petition having been brought post-Stages 11 and Ill, i.e., the Technical and Financial Bids, cannot be sustained as the participation of the petitioners in those two Stages was rendered non est and a nugatory in the eyes of law. The learned Additional Advocate General submitted that the work in question was construction of a Multi-Specialty Hospital for the benefit of t:he people of the State and, therefore, immense public interest was involved. Time being the essence of the contract and there being an urgent need for establishment of such hospital which also involved huge expenditure from the Public Exchequer, the State could not be held at ransom by a person who was seeking for a private relief against a rival contender on grounds that were quite erroneous and mis- construed. The complaint lodged by him against the respondent no.3 and others having been duly considered by the competent Expert Committee and disposed of by a comprehensive finding that has belied such allegations, the writ petition deserved to be dismissed. ]6. Mr. a. R. Pradhan, learned senior counsel representing the contesting respondent no.3 submitted that the writ petition could not be sustained since the petitioners had failed to raise the ae 14 objections in WP(C) no.21 of 2010 despite t:he knowledge of the fact that the petitioner no.3 had been declared qualified. Even assuming that the facts alleged against the respondent no.3 had come to the knowledge of the petitioners subsequent to the filing of the said writ petition it was incumbent upon the petitioners to have incorporated them duly impleading the respondents no.3, 4 and 5 as parties in that writ petition by way of an amendment, but instead of doing so, they chose to withdraw the writ petition without seeking any liberty. As per Mr. Pradhan, it was now not permissible for the petitioners to agitate those issues in the present writ petition' ]7. Having considered the pleadings contained in the writ petition, the affidavit filed on behalf of the State-respondents and the counter-affidavit of the respondent no.3 and also upon hearing the rival contentions placed by the learned counsels representing the various parties, we proceed to give our findings as under, ]8. In order to deal with various contentions raised by the petitioners, it would be essential to reproduce the relevant clauses of the NIT and the tender documents referred t:o by the petitioners in the writ petition which are set out as under:- clauses under NIT 2. Eligibility criteria for shortlisting of Firms based on EXDression Of Interest /Eon 2.1 The intending firms should have successfully completed at least one similar type of project on turn-key basis within last 5 years including drawing, ie 15 designing, and execution of multidisciplinary services under one contract of total value, not less than Rs.50 crores. Such credentials would have to be supported by appropriate documents. 2.2 The average yearly turnover of the firm should not be less than Rs.25 crores during the past 5 years. Such financial details should have been drawn up by a reputed Chartered Accountant. 4. Evaluation criteria for selection of Firm 4.1 The selection of the firm will be Quality and Cost Based Selection (QCBS) method and the evaluation will be made in three stages as under: 4,2 Staael /Evaluation of Eon The Expression of Interest (EOI) of all the intending firms will be evaluated for shortlisting by the Department, based on the above mentioned eligibility criteria. The result of Stage I would be conveyed to the participating firms on 23/4/2010. 4.3 Staae Il rEvaluation of Technical Bid) Technical bids of only those shortlisted firms, who qualify in Stage I, will be evaluated by the Department based on be criteria as mentioned in the Bid document. Each technical bid will receive a score. A proposal shall be rejected if it does not achieve the minimum technical marks of 750 out of a maximum of 1000 points. The weightage of the Technical Bid IT) shall be 60 percent. The results of Stage 11 would be conveyed to the participating -firms on 27/4/2010. 4.4 Staae IH fEvaluation of Financial Bid) Financial Bids of those firms who qualify in Stage 11 will be evaluated as under: The proposal with the lowest financial bid will be awarded a financial score of 100 points. Financial score of other proposals shall be inversely proportional to their quoted price as indicated in the tender document. The weightage of the Financial Bid shall be 40 percent. The results of Stage Ill would be conveyed to the participating firms on 29/4/2010. 16 6. The tenders will be opened as per the schedule given at Clause 3 in presence of the tenderers who wishes to be there. 7. Successful firms who will meet the minimum qualifying marks in the technical bids as indicated in the tender documents will be intimated and financial bids of only technically qualified firms will be opened in their presence. 10. Applications from Joint Venture / Association of Firms are not acceptable." Clauses under tender document "4.0 Part-I Expression Of Interest (EOI) - Specific Project Experience (Minimum criteria) for selection of firms. 4.1 The intending firms should have successfully completed drawing, design & exeoution of at least one similar building project in the recent past (i.e. within last 5 years) with Civil Contract costing