1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1454 OF 2009 WITH CHAMBER SUMMONS NO. 266 OF 2009 IN WRIT PETITION NO.1454 OF 2009 W.P. NO. 1454 OF 2009 1. Infrastructure Leasing & Financial ) Services Ltd., a company incorporated ) under the provisions of Companies Act, ) 1956 having their office at The IL&FS ) Financial Centre, Bandra Kurla Complex, ) Bandra (East), Mumbai – 400 051. ) 2. Mr. Ram Walase, ) Senior Vice-President of Petitioner No.1, ) having his office at The IL&FS Financial ) Centre, Bandra Kurla Complex, ) Bandra (East), Mumbai – 400 051. ).. Petitioners Versus 1. State of Maharashtra, ) 2. Superintending Engineer, ) Mumbai PWD Circle, 25, Marzban Road, ) Fort, Mumbai – 400 001. ).. Respondents -- 2 WITH CHAMBER SUMMONS NO. 266 OF 2009 IN WRIT PETITION NO.1454 OF 2009 1. Infrastructure Leasing & Financial ) Services Ltd., a company incorporated ) under the provisions of Companies Act, ) 1956 having their office at The IL&FS ) Financial Centre, Bandra Kurla Complex, ) Bandra (East), Mumbai – 400 051. ) 2. Mr. Ram Walase, ) Senior Vice-President of Petitioner No.1, ) having his office at The IL&FS Financial ) Centre, Bandra Kurla Complex, ) Bandra (East), Mumbai – 400 051. ).. Petitioners Versus 1. State of Maharashtra, ) 2. Superintending Engineer, ) Mumbai PWD Circle, 25, Marzban Road, ) Fort, Mumbai – 400 001. ).. Respondents And D.B. Reality Pvt. Ltd., ) a Company incorporated under the ) provisions of Companies Act, 1956, ) having their office at DB House, ) Gen A.K. Vaidya Marg, Goregaon (E), ) Mumbai – 400 063. ).. Interveners -- 3 Shri Aspi Chinoy, Sr. Advocate with Shri V.R. Dhond i/by Negandhi, Shaha and Himayatullah for the Petitioners. Shri R.M. Kadam, Advocate General along with Shri N.P. Pandit, AGP for the State. Shri I.M. Chagla and Shri Janak Dwarkadas, Sr. Advocates, with Shri Chirag Balsara i/by RMG Law Associates for the Interveners. -- CORAM : SWATANTER KUMAR, C.J. & A.M.KHANWILKAR, J JUDGMENT RESERVED ON : 13TH AUGUST, 2009 JUDGMENT PRONOUNCED ON : 20TH AUGUST, 2009 JUDGMENT: ( PER SWATANTER KUMAR, CJ.) Heard. Rule. Rule made returnable forthwith. By consent of the parties, taken up for hearing and final disposal. 2. The Petitioners approach this Court under Article 226 of the Constitution of India seeking for a direction to the Respondents to open the bid submitted by the Petitioners for the work of Development of Government buildings in Mantralaya Precinct, Mumbai, through private participation” and consider the same on 4 merits in accordance with law. It was also prayed that the endorsement made by the Respondents on the bid of the Petitioners as “Late Bid” received at 15.02 hours be quashed and the Respondents be restrained from proceeding with the tender process. However, after the institution of the present Writ Petition, it was communicated to the Petitioners by the Respondents by their letter dated 3rd August, 2009 that they had taken a decision to reject the Petitioners' bid as having been received late and Petitioners by way of amendment prayed for quashing of the decision to reject the Petitioners’ bid as having been received late conveyed by letter dated 3rd August, 2009. 3. Necessary facts are that the State of Maharashtra in January, 2009 floated tender for the work of “Development of Government buildings in Mantralaya precinct, Mumbai through Private Participation”. The bids were to be received upto 19th January, 2009 upto 3.00 p.m. However, this time-table was changed and the date fixed for receipt of the said tender was altered to 14th July, 2009 which again was postponed to 28th July, 2009 upto 3.00 p.m. According to the Petitioners, they have prepared their bid document well in time and Petitioner No.2 attended the office of the 5 Respondent/State on 28th July, 2009 in the afternoon. Two senior officers of the Petitioners were to submit the tender as it was of very high profile nature. The Petitioners had started well in time so as to reach the office of the Respondents much before the time, however, there was a traffic jam at Haji Ali and Worli which was caused by New Era School Rasta Roko at Pedder Road and the entire traffic had come to a halt. Despite this, they were able to reach before 3.00 p.m. and at about 2.55 p.m., they were standing in a queue. It is further averred by the Petitioners that one person was ahead of Petitioner No.2 who submitted the bid to the concerned officer/clerk at the office of Respondent No.2. This bid was received from that person at about 14.56 hours. This entry was seen by Petitioner No. 2. Petitioner No.2 thereupon immediately presented the bid and the same was received by the said person. While the receiving clerk was examining the bid box, some persons, who appeared to be the Respondents' representatives and other tenderers, rushed towards the table inside the ‘receiving area’ and shouted that “time is up, do not accept the bid”. The receiving clerk told them not to disturb him and tried to pacify them. After pacifying the persons raising slogans, the Clerk, who received the bid and issued acknowledgment for receipt of the bid, put the time as 3.02 p.m. A Copy of this 6 acknowledgment is annexed to the Writ Petition at Exhibit-E. The Petitioners protested the same immediately at that time and even submitted a letter raising a protest against the remark made on the acknowledgment slip. 4. It is also averred in the Writ Petition that when they went to deliver the letter on 28th July, 2009 itself, they noticed that there were two wall clocks in the receiving area, one which was for the internal area where the clerk was sitting and the other was at the main door of the office. The clock in the receiving area was 2 to 3 minutes faster and the person there informed that the bid would be received as per the office clock. In these circumstances, the entry made by the receiving clerk was erroneous, factually incorrect and was an attempt to oust the Petitioners from the bid process. As no response was received to the letter dated 28th July, 2009, on 31st July, 2009 itself, the Petitioners along with the newspaper cuttings and other documents lodged a detailed protest with the Respondents. On 31st July, 2009 the Petitioners were informed that an inquiry into the events leading to the making of the disputed endorsement would be held and the Petitioners were invited to put forward their version before a Committee constituted for that purpose on 1st August, 2009. 7 Accordingly, they appeared before the Committee and recorded the relevant facts and submitted that the endorsement was ex facie erroneous. Despite this fact, the Respondents issued a letter dated 3rd August, 2009 communicating to the Petitioners that their tender was treated as late bid and were called upon to take back the said tender document vide letter Exhibit-I. This Letter dated 3rd August, 2009 Exhibit -I has been challenged by the Petitioners in the present Writ Petition on the grounds as already noticed above. 5. The Superintending Engineer, Mumbai PWD Circle, Mumbai, filed an affidavit-in-reply in which not much dispute is raised about the facts but they have specifically stated that the tender of the Petitioners was submitted at 3.02 p.m. according to the watch in front of the tender receiving clerk. Before that, M/s. D.B. Reality Private Limited had submitted a sealed cover at 2.55 p.m. while another tender purchaser i.e. India Bulls Real Estate Limited submitted its tender at 2.56 p.m. on 28th July, 2009 itself. As the two other tenders were submitted in time, no objection was raised before acceptance of the tender. After accepting the tender of the Petitioners at 3.02 p.m., a remark of “late bid” was made as the same was beyond the prescribed time of 3.00 p.m. It is also stated in this affidavit that a 8 Committee was constituted to inquire into the said incident. As certain important facts have been stated in the said affidavit, it is useful to refer to following averments from it. “6. ..... I say that, the 2 parties who had objected to the receipt of the Petitioners bid gave their objection in writing and the Petitioner also gave a letter alleging stating that he had submitted the tender at 2.57 p.m. And not a 3.02 p.m. Hereto annexed and marked Exhibit E and F & G respectively are the copies of the said objection letters of the first 2 parties and Petitioners letter. 7. I say that the deadline can only be extended before the deadline ends by issuing a corrigendum before the deadline and not thereafter. The said corrigendum is to be issued to all tender purchasers. Thus, if the deadline for submitting the tenders has to be now further extended, the same cannot be done now and the entire tender process will have to be started afresh and will only delay the project further. 8. I say that, in view of this dispute, on 29th July, 2009, I formed a Fact Finding committee consisting of 2 Deputy Engineers, one Divisional Accountant and one Executive Engineer to inquire into the above incident and the Committee thereafter called the 3 parties at 12 noon on 1st August, 2009 and all the 3 parties remained present. One of the Objectioner/Bidder and the Petitioner submitted their submission in writing whilst the other Objectioner/Bidder made oral submission and subsequently submitted his objection in writing on 3rd August, 2009 in the morning. I say that, the statement of the Tender Receiving Clerk was also recorded, who confirmed 9 that the Petitioner had submitted his tender only at 3.02 p.m. And he had accordingly mentioned the time on the counterfoil as well as on the tender. The Committee specifically asked the Petitioner to produce any evidence which the Petitioner could in support of his contention that he had submitted the tender at 2.57 p.m. However, the Petitioner could not and did not produce any evidence. The Committee accordingly then resolved and made a report that in the absence of any other evidence and in view of the statement of the tender receiving clerk who is a responsible Government servant and also in view of the statement of the other 2 Objectioners/Bidders who had recorded their objections then and there itself by remaining present and by confirming that the Petitioner had submitted his bid document only after 3 p.m. The Petitioners bid was in fact submitted after 3 p.m. 9. I say that, in view of the above report, I accordingly informed the Petitioner on 3rd August, 2009 that his tender had been submitted after stipulated time of 3 p.m. and was therefore treated as late bid and would have to be returned to him and the Petitioner should therefore take back his tender. 10. I say that there is hardly any time taken or required for the purpose of issuing an acknowledgment and the same in any event take less than a minute, as only the time and the name of the party is required to be put on the 2 counterfoils one of which is issued to the party. This is clear from the fact that the first 2 tenders were received within the span of 1 minute each namely 2.55 p.m. And 2.56 p.m. Had the Petitioner submitted his tender at 2.57 p.m. The same would have been acknowledged as received at that time. Thus it is clear and evident that the Petitioner has indeed submitted his tender beyond the stipulated deadline.” 10 6. One Shri Vijay R. More, Senior Clerk, working in the office of the Superintending Engineer, Mumbai, who infact was the receiving Clerk, has also filed his affidavit wherein he has stated that the representatives of the Petitioners came to the Circle Office to submit their tender at 3.02 p.m. as per the office clock, which he received at 3.02 p.m. He along with his affidavit has annexed the copy of the report Exhibit-A which, according to his affidavit, was submitted to the Superintending Engineers. 7. We may also notice that chamber summons bearing No. 266 of 2009 has been taken out by the Intervenor - D.B. Reality Pvt. Ltd. which has also submitted its tender. In the affidavit in support of the said Chamber Summons, on behalf of D.B. Reality Pvt. Ltd., it has been stated that the bid of the Intervener was accepted at 14.55 hours whereas the tender of India Bulls Real Estate Ltd. was accepted at 14.56 hours. The tender of the Petitioners was not accepted as the Petitioners' representatives entered the tender submission room after 15.00 hours. This chamber summons was heard along with the Writ Petition and the Applicants were granted liberty to address the Court on the matter in issue. 11 8. It is not in dispute before us that there were three tenderers who had come to deposit their respective bids on 28th July, 2009. The Intervenor viz. M/s. D.B. Reality Pvt. Ltd., M/s. India Bull Pvt. Ltd. and the Petitioners. The other two had submitted their bids at 2.55 p.m. and 2.57 p.m. on that date, while the Petitioners' bid is stated to have been received at 3.02 p.m. Thus, there was the remark by the Clerk as “Late Bid.” As is evident, the controversy in the present case therefore falls in a very narrow compass. 9. It would be essential to notice the conditions relating to the submission of the bid and its effect. The said terms and conditions have been relied upon by the parties before us as the very genesis of the controversy would be controlled with reference to these terms which can usefully be reproduced here. As per the tender programme declared by the Respondents, the cost of the project was 813.13 crores and was required to be completed within 48 months. The tender documents were to be sold between 12th June, 2009 to 6th July, 2009 and the bids were to be submitted at the given date which was extended from time to time and finally it was to be submitted by 28th July, 2009 by 3.00 p.m. Clause (9) of the Instructions to Bidders (ITB) grants liberty to the Employer to modify 12 the bid document at any time prior to the deadline for submission of bid for any reason, whether at his own initiative or in response to a clarification requested by a prospective bidder by issuance of an addendum. It further requires that the addendum will be sent in writing to all prospective bidders who have purchased the bid document, for incorporation in the bid and will be binding on the bidders. Clause 17 thereof contemplates that the bidder shall submit 2 sets of bid documents duly signed in a sealed cover out of 3 sets supplied to the bidder with financial offer in a prescribed form separately in Envelope -II. The documents to be contained in Envelope -I and Envelop -II have been specified in the ITB. 10. Clause 18 deals with the deadline for submission of bids. It reads as under: - “18. The bid shall be received by the Superintending Engineer at the address mentioned therein not later than as prescribed (As per Contract Data in Volume-II). The Employer may at his discretion extend the deadline for submission of bid issuing an addendum in accordance with Clause -9 of ITB, in which case, all rights and obligations of the Employer and bidders previously subjected to the original deadline shall therefore be subjected to new deadline as extended.” 13 11. Clause 19 has some bearing on “Late Bid” which is reproduced hereunder. “19. Bid submitted after the deadline for submission will either not be received or it received inadvertently, will not be opened and shall be returned unopened to the bidder.” 12. It is well settled principle of interpretation of clauses of a contract that they should be interpreted with the rule of plain construction while giving effect to the intent of the parties as well as ensuring that the object of the contract stated in the terms and conditions is also achieved. The rule of practical construction can safely be applied for understanding such terms. The use of discretion should satisfy both the ingredients i.e. Fairness and transparency. Exercise of such discretionary power should be in consonance with the specified terms and conditions which are binding on all the concerned. It was contended that the above noticed terms and conditions cannot be strictly construed so as to produce results which will frustrate the cause of contract. The question of receiving tender by the Superintending Engineer could be 14 interpreted so as to include such other persons authorised on his behalf and the practical interpretation would require such an approach to be adopted. It is therefore desirable to construe these terms in somewhat liberal manner insofar as it furthers cause of the contract, fair competition as well as public purpose. It is also a settled principle that the terms of contract may be strictly read and natural meaning should be given to it and no outside aid should be sought unless the meaning is ambiguous. Strict reading of terms should be understood in its correct perspective and these principles need be kept in mind while reading the terms and conditions inviting tender and the purpose for which they have been stated. ( Ref: United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, (2004) 8 SCC 644). 13. The above two clauses require that the bid has to be received by the Superintending Engineer at the address mentioned not later than as prescribed. This deadline can be extended at the discretion of the Employer. A bid which is submitted late will not be received or if received inadvertently will be returned to the bidder without being opened. The terms and conditions of the contract therefore contemplate that the bid document should have been 15 received by the Superintending Engineer within time and ought not to have been received at all beyond time and returned if received inadvertently. If neither of these conditions have been satisfied in the present case, it was open to the Respondents to decline to receive the bid of the Petitioners. The need for returning the bid document would only arise if it was received inadvertently. In the present case, the bid has not been received inadvertently but was received after due thinking and deliberation and as per the affidavit of the Respondents after the competent authority had expressed its opinion the bid document was offered to be returned. We are aware that even if the terms and conditions of the tender document provide for receiving of bid by a designated officer, somebody else on his behalf could receive it and it may not be enforced as a condition mandatory in character but at the same time, the fact of the matter is that the Superintending Engineer would be the competent authority to take decisions in this regard. It is not even the case of the Respondents before us that the bid documents were not received by the Respondents or that they were received by mistake or inadvertently. Certainly these two aspects may not lead to an illegality or irregularity which will invalidate the tender process but certainly these are the matters of some concern. 16 14. It is one thing to say that it be received inadvertently and another thing that the same be received with remark or be not accepted at all as contemplated under the terms of Clause (19) of the Instructions to Bidders (ITB). This exercise of discretion itself indicates the intent and meaning given and understood by the Respondents themselves of these two clauses. The surrounding circumstances thus would have a bearing on the controversy in question. In the case of State Bank of India & Anr. v. Mula Sahakari Sakhar Karkhana Ltd., (2006)6 SCC 293, the Supreme Court held as under:- “23. The document in question is a commercial document. It does not on its face contain any ambiguity. The High Court itself said that ex facie the document appears to be a contract of indemnity. Surrounding circumstances are relevant for construction of a document only if any ambiguity exists therein and not otherwise. xxx xxx xxx 32. It is one thing to say that the nature of a transaction would be judged by the terms and conditions together with the surrounding and/or attending circumstances in a case where the document suffers from some ambiguities 17 but it is another thing to say that the court will take recourse to such a course, although no such ambiguity exists.” 15. Now we would examine the factual matrix of the case. It is a settled principle of law that the petitioners will have to stand on their own legs before the Court. But at the same time, we cannot overlook the fact that the Petitioners before us have approached the Court under Article 226 of the Constitution of India which is an extra ordinary but equitable jurisdiction. Justitia non novit patrem nec matrem; solam veritatem spectat justitia meaning that justice knows not father nor mother; justice looks at truth alone. It will be for the Court to examine the truthfulness of the allegations rather than deciding the case on allegations which are not substantiated by one party or the other. Res judicata pro veritate accipitur meaning that a matter adjudged is accepted for truth. 16. The Supreme Court in the case of Ajay Krishan Shinghal & Ors. v. Union of India & Ors., (1996)10 SCC 721 clearly held that there is a presumption in favour of official acts. The acts which are done in the normal course of business of the Government can safely be relied upon by the Court unless contrary is shown. The Courts 18 have even gone to the extent of holding that the allegations of misuse of power cannot be easily relied upon as presumption is always in favour of an act being legal and it should not be readily inferred to the contrary. This view was reiterated by the Supreme Court in Municipal Corporation of Delhi v. Qimat Rai Gupta & Ors., (2007)7 SCC 309. 17. In the light of these principles while referring to the case of the Petitioners we would preferably rely more on the affidavits and enquiry conducted by the Respondents themselves. It is not in dispute before us that the Superintending Engineer had directed an inquiry into the matter in which the statement of the receiving clerk has been recorded and the report has been prepared. The said report is placed before us to which we would shortly refer in some detail. 18. According to the Petitioners he had reached the office premises before 3.00 p.m. and was in a queue and in fact he saw the entry being made for receiving the bid of India Bulls Real Estate Limited at 2.57 p.m. on 28th July, 2009, and had offered his bid to the clerk before 3.00 p.m. but erroneously, incorrectly and contrary to 19 the true facts, time of 3.02 p.m. was noticed on the acknowledgment receipt which is violative of Articles 14, 19(1)(g) and 300A of the Constitution of India. It will be appropriate for the Court to preferably believe the affidavit of the official Respondents wherever the facts are in dispute between the parties. As far as the Petitioners and the private Respondents are concerned, they are interested parties and would be out to cause prejudice to each other but what has been done by the official Respondents would have a presumption of correctness as well as would reflect the correct state of affairs. In the affidavit filed by the Senior Clerk Shri Vijay R. More, report is annexed which was submitted to the Executive Engineer. In this report, it has been averred