Reportable IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.(C) No.6416 of 2007 DATE OF HEARING: 06.12.2007 DATE OF DECISION : 18.01.2008 IN THE MATTER OF : SMS Infrastructure Limited ....... Petitioner. Thru. Mr. Neeraj Kishan Kaul, Sr. Advocate with Mr. Sachin Datta and Mr.Manik Dogra, Advocates. - Versus - New Delhi Municipal Council ....... Respondent. Thru. Mr.A.S.Chandhiok and Mr.V.P.Singh, Sr. Advocates with Ms.Anjana Gosain and Ms.Kanika Agnihotri, Advocates. CORAM :- THE HON'BLE MR.JUSTICE A.K.SIKRI THE HON'BLE MR.JUSTICE VIPIN SANGHI 1. Whether Reporters of Local papers may be allowed to see the Judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in the Digest? A.K. SIKRI, J. The respondent-NDMC has floated tenders for developing “Multi Level Parking-cum-Commercial Complex” at Baba Kharak Singh CWP No.6416/07. 1 Of 36 Marg, New Delhi. Bids from eligible persons are invited thereby. These bids are in the form of “Request for Proposal” (RFP). Liberty is given to the bidders to opt for “Fully Automatic Parking System” or “Semi Automatic Parking System” or “Manual System”. The main purpose of the project is to achieve maximum "Net Equivalent Car Space” (ECS). RFP envisages proposal evaluation in three stages. In stage one the proposal is to be first checked for responsiveness with the requirement of the RFP with reference to “other submissions of the proposal” submitted by the bidders. In the second stage technical evaluation of the bids is to be undertaken. This evaluation is to be done only in respect of those bidders whose “other submissions” qua stage one are found to meet the requirements of the RFP i.e. stage one is found to be responsive in terms of the requirement under Clause 1.2.1 of the bid documents. In case technical submissions are found to meet the requirements of RFP, the bidders’ proposal would be evaluated at stage three, namely, `Techno Commercial’ . Based on the basis of this process of evaluation, the bidder who emerges triumphant is to be awarded the contract. The petitioner herein is one of the aspirants for this contract and, therefore, it submitted its bid. However, the petitioner is knocked out at stage two as according to NDMC it is found that petitioner’s bid is not CWP No.6416/07. 2 Of 36 responsiveness with the requirement of RFP. The submission of the petitioner is that its bid was in accordance with the tender conditions and satisfy the technical parameters and evaluation criteria set out in the RFP documents issued by the respondent and, therefore, the action of the respondent in not allowing the petitioner to stage two by not even opening its techno commercial bid is arbitrary. We may point out at this stage itself that as per the evaluation standard and norms fixed for stage two, evaluation benchmark score of 75 marks was fixed for moving on to stage three evaluation. According to the respondent the petitioner has not been able to achieve this benchmark. In order to appreciate the controversy, basic facts and the relevant provisions of the RFP need mention with some elaboration. We, therefore, propose to do this exercise in the first instance: (i) In December, 2006 request for Proposal (RFP) document was issued by the respondent for Project to Develop Multilevel Parking cum Commercial Complex at Baba Kharag Singh Marg on a Build Operate and Transfer (BOT) basis. The very purpose of the Project was to achieve maximum "Net Equivalent Car Space" (ECS), subject to satisfaction of the minimum CWP No.6416/07. 3 Of 36 technical criteria. The bidders have been left free to opt for a "Fully Automatic Parking System" or a "Semi Automatic Parking System" or a Manual Parking System. The Tender Conditions did not accord any preference/extra weightage to either system. The said Request for Proposal document envisaged 'proposal evaluation' in three stages as set out in Sections 1.25, 1.26 and 1.27 thereof, which are reproduced hereunder: 1.25 Proposal Evaluation: Stage I- Other submissions 1.25.1 In Stage I evaluation, the Part I(A) - Other Submissions of the Proposal would first be checked for responsiveness with the requirements of the RFP. 1.25.2 The Stage II evaluation, the Part I(B) - Technical Submissions of a Bidder shall be taken up only after the contents of the Other Submissions are found to meet the requirements of this RFP. i.e., the Part I (A) submission is found to be responsive in terms of the requirements under Clause 1.21 1.25.3 NDMC reserves the right to reject the Proposal of a Bidder without opening the Part I(B) and Part II Submissions if, in its opinion, the contents of Part I(A) - Other submissions are not substantially responsive with the requirements of this RFP. 1.26 Proposal Evaluation: Stage II - Technical Submissions CWP No.6416/07. 4 Of 36 1.26.1 In Stage II of the evaluation process, Part I(B) Submissions of all the Bidders who pass the Part I(A) evaluation would be evaluated. 1.26.2 In Stage II, the Part I(B) - Technical Submissions of the proposal would first be checked for responsiveness with the requirements of the RFP. 1.26.3 In case the Proposal is found to be responsive in terms of the requirements under Clause 1.21, the Technical Submission of the Bidder would be evaluated in accordance with the conditions set out in Section 2 (Evaluation Methodology) of this RFP document. 1.26.4 NDMC would have the right to review the Part I(B) Technical Proposals and seek clarifications where necessary. 1.26.5 NDMC may request the Bidder to make a visual presentation on the Project Proposal. No marks or extra weightage shall be assigned to the presentation. NDMC reserves the right to call for presentations from any/all of the Bidders. 1.26.6 The evaluation of the Techno-Commercial Bid (i.e., the Part II of submission vide Clause 1.16) would be taken up only after the contents of the Part 1(B) - Technical Submissions are found to meet the requirements of this RFP. NDMC reserves the right to reject the Proposal of a Bidder without opening the Part II Submissions if, in its opinion, the contents of the Technical Submissions are not substantially responsive with the requirements of this RFP. CWP No.6416/07. 5 Of 36 1.27 Proposal Evaluation: Stage III - Techno-commercial Bid. 1.27.1 The Part II submissions, viz., Techno-Commercial Bid of all the Bidders who pass the Part I(B) evaluation, for particular project, will be opened in the presence of the Bidders' representatives who choose to attend. The Bidders' representatives who are present shall be re3quired to sign and record their attendance. The time and date of opening of Part II Submissions shall be informed to the Bidders in advance. 1.27.2 The Techno-Commercial Bid would be evaluated and ranked on the basis of the evaluation criteria set out in Section 2. The Bidder obtaining the highest rank after evaluation of the Techno-Commercial Bid, shall, subject to terms and conditions set out under Section 2 be declared as the Preferred Bidder. Clause 2 of the RFP sets out the evaluation methodology for the purpose of stage II Evaluation. In terms thereof, marks are to be assigned to the various bidders and a benchmark/score of 75 marks was fixed for moving on to the Stage III Evaluation. The relevant sub-clauses of Clause 2 of the RFP are reproduced hereunder: “2. Evaluation Methodology 2.1 Guidelines for submission on Project proposal The Bidder would be required to furnish the following as part of their Project Proposal (Part I(B) - Technical Submission) XXX XXX XXX XXX XXX XXX XXX XXX CWP No.6416/07. 6 Of 36 2.3 Evaluation of Technical Submission The Bidder's Technical Submission would be evaluated to check the adequacy and appropriateness of the proposed technology for the Project purposes and its conformance to the Construction Requirements and O & M Requirements (as set out in the Draft Concession Agreement - between Schedules 2, 2 and 4 and development control norms and fixed design parameters as set out in Schedule 1 of the Draft Concession Agreement). 2.4 For this purpose, the Technical Submission would be scored on the basis of rating of various parameters such as the following: S. No. Evaluation Criteria Score 1 Project Appreciation, Layout and Design Evaluation Parameters include, inter alia (a) Design Configuration - Conceptual planning & Architectural layouts of the facilities (b) Traffic Management Plans - Safety and Circulation Plans (c) Contingency Plans - Disaster management plans (d) Design Attractiveness - Environment friendliness, Aesthetics 20 2. Technology Section Evaluation Parameters include, inter alia (a) Adequacy and Appropriateness of chosen technology (b) Testimonials on - safety & Time proven- ness in operations (c) Technology management & know-how transfer arrangements (d) Overall Conformance to stipulated (technical) requirements 30 CWP No.6416/07. 7 Of 36 3. Plan of Implementation Evaluation Parameters include, inter alia Sequencing and time phasing of activities Plan for interim parking arrangements 15 4. Resource Allocation Evaluation Parameters include, inter alia (a) Adequacy and Effectiveness of resource allocations - plant & machinery and manpower (b) Financial stake (equity percentage) and Financial arrangements (percentage of the extent of tie-up) 15 5. Method statement The detailed method statement justifying the methodology of execution proposed by the bidder. This shall include, inter alia (a) method & technique for manufacture (sourcing) and transportation of the various project components (b) method & technique for erection, testing and commissioning of the various project components - civil, structural, electrical, fire safety and the like (c) construction methodologies - safety and environment friendliness - with special emphasis on the methodology adopted for an underground construction (d) operations & management procedures, arrangements and tie-ups in that regard 15 6. Compliance Requirements Evaluation Parameters include, inter alia (a) Extent of compliance (b) Constructive justification behind deviations, if any 5 Total 100 CWP No.6416/07. 8 Of 36 2.5 Composite score under the Technical Proposal would be the arithmetic sum of the marks assigned to the Bidders under each of the parameters listed above in Clause 2.4. The Benchmark Score to be achieved for Stage II evaluation is 75. The marks so assigned by NDMC or it Consultant(s) or Advisor(s) would be final and binding on the Bidder. 2.6 Only Proposals that have achieved the Benchmark Score on the Stage II evaluation will be taken forward to Stage III evaluation. 2.7 Evaluation of Part III submissions - Techno-commercial Bid: Net Equivalent Car Spaces This Part II submission, viz., Techno-Commercial Bid of Bidders who have passed the stage II evaluation, for the particular Project, would be opened and evaluated on the basis of the highest Net Equivalent Car Space (ECS) provision that the Bidder is committing to offer to NDMC< as per teh format prescribed in Appendix 5-B. 2.8 XXX XXX XXX XXX XXX XXX XXX XXX." The Bid was required to be submitted in the prescribed format in terms of the Appendices to the RFP. (ii) On 9.4.2007, the petitioner submitted its proposal as per the CWP No.6416/07. 9 Of 36 prescribed methodology and fully in accordance therewith. While meeting the prescribed technical criteria, the Petitioner opted for a Semi Automatic System to maximize the ECS. (iii) On 17.4.2007 Part I of the petitioner's bid was opened by the respondent. Part I(A) of the petitioner's bid was found to be in order, and, accordingly, the Petitioner's proposal successfully cleared the Stage I evaluation as contemplated under Clause 1.25.1, and moved on to Stage II of the evaluation process. There were three more parties whose bids are also found responsive and thus four parties were allowed to move the stage two. On 14.7.2007 the petitioner made technical presentation before the Evaluation Committee of the respondent highlighting various aspects of its bid. Thereafter, vide letter dated 27.7.2007, the petitioner clarified certain issues which, according to the petitioner, had emerged during the presentation. According to the petitioner he did not receive any communication thereafter though date for third stage evaluation was CWP No.6416/07. 10 Of 36 14.8.2007. Thus a day before i.e. on 13.8.2007 the petitioner handed over a letter dated 11.8.2007 to the respondent protesting at the manner and the apprehended reason for the ousting of the petitioner. In this communication the petitioner expressed its feeling that it was not being considered for stage three evaluation on account of the fact that the petitioner had opted for “Semi Automatic Parking System” instead of “Fully Automatic Parking System”. This was in gross violation of the terms and conditions of the tender, inasmuch as, choice was given to the bidders to opt for any of the three parking systems and, therefore, this could not be the consideration for attempting to oust the petitioner as the main consideration which should have weighed with the respondent in evaluating the proposals was to achieve maximum net “Equivalent Car Space”. The NDMC went ahead with the evaluation of Techno Commercial Bid in respect of remaining three bidders on 14.8.2007 and did not consider the bid of the petitioner for stage three. The petitioner thus wrote another letter dated 16.8.2007 protesting at the aforesaid move on the part of the NDMC and the manner in which NDMC seeking to oust the petitioner. As no response was received, the petitioner filed present writ petition on 29.8.2007. CWP No.6416/07. 11 Of 36 Since advance notice of this petition was served upon the standing counsel for NDMC, when this petition came up for hearing on 31.8.2007, arguments were heard-in-part and thereafter matter was taken up on 6.9.2007. Though the NDMC had produced the records, we deemed it proper to have the version of the respondent on the record of this case in the form of an affidavit and, therefore, granted time to the respondent-NDMC to file counter-affidavit, issuing show cause notice in the writ petition. As we were informed that the tenders had already been finalized, in the stay application filed by the petitioner, order was passed that Letter of Intent (LOI), if issued shall be subject to further orders that may be passed and the outcome of the writ petition. Pleadings were thereafter completed. Counter-affidavit was filed. Learned counsel for the petitioner, however, wanted to peruse the original records which permission was granted. After perusal thereof the petitioner filed the rejoinder and thereafter both the parties were heard at length. We may state at the outset that the entire thrust in the writ petition is that the NDMC sought to exclude the petitioner from the reckoning primarily because of the reason that the petitioner had opted for CWP No.6416/07. 12 Of 36 “Semi Automatic Parking System” and the NDMC wanted “Fully Automatic Parking System” in the said multi level parking. According to the petitioner this was not at all proper and was in fact contrary to RFP and the provisions contained therein including in respect of norms of evaluation provided in the RFP. Submission was that, as noted above, the main purpose of the project was to achieve maximum net equivalent car space and for this purpose the bidders were given an option to either opt for “Fully Automatic Parking System” or “Semi Automatic Parking System” or “Manual System” of parking. Therefore, the criteria adopted by the NDMC was totally irrelevant and irrational and arbitrary in excluding the petitioner from the tender process merely because the proposal was for “Semi Automatic Parking System” and not for “Fully Automatic Parking System”. On the contrary going by the purpose and objective of the project, the petitioner’s proposal was better than others as it was aimed at maximum ECS. In order to test the aforesaid arguments, original records were summoned and perused. Going through the minutes of the various meetings, we found that the aforesaid contention of the petitioner was ill- CWP No.6416/07. 13 Of 36 founded and factually incorrect. There is nothing to suggest that the petitioner’s proposal was rejected on the ground that it was for “Semi Automatic Parking System” and not “Fully Automatic Parking System”. Record reveals that a Technical Evaluation Committee consisting of experts in the field was constituted by the NDMC to evaluate the bids. This committee consists the following members: Name Designation Organisation Sh. K.K. Mutreja Engineer-in-Chief New Delhi Municipal Corporation Sh. Sanjib Sengupta Chief Architect New Delhi Municipal Corporation Sh. J.B. Bhatia EE (SIP) Municipal Corporation of Delhi Sh. K.C. Iyer Professor IIT, Delhi Sh. S. Mukherjee Professor IIT, Delhi The composition of the Committee discloses that there are two high ranking officials of the NDMC and one of the MCD with expertise in the field as they are Engineer-in-Chief, Chief Architect, EE(SIP) respectively. This was supported by the consultant for this project, namely, M/s. IDFC and also the Director Projects of NDMC. In addition five more experts from other organizations were included in the Committee. Two of them are the Professors from an esteemed institution, namely, Indian CWP No.6416/07. 14 Of 36 Institute of Technology, Delhi. They hold the post of Professor. As per the description given in the counter-affidavit, one of them is a Civil Engineer with a PhD from IIT, Madras. He has 15 years working experience in Industry which include working in Military Engineer Services; Defence Research and Development Organization (DRDO). The areas of specialization of other Professor are mechanisms, Rebotics, Mechanical Systems Design and Impact Biomechanics. It is also mentioned that IDFC has substantial expertise in designing, running and managing large complex bid processess for infrastructure, assets, particularly in the transport sector and various prestigious projects have been undertaken by the IDFC. The expertise and the insights gained in such assignments have enabled IDFC to provide high quality advice to the Government Agencies in managing bid processess. Keeping in view this credential of the IDFC, this company was appointed as Consultant and two persons with requisite expertise were placed by the IDFC who were associated in the meetings of the Technical Committee. Five experts who constituted the bid Evaluation Committee CWP No.6416/07. 15 Of 36 undertook the task of technical evaluation of the bidders. Record shows that the bids were evaluated on six parameters, namely, project appreciation, layout design, technology selection, plan of implementation, resource allocation and compliance allocation. Maximum marks allocated under the aforesaid six heads were 20,30,25,15,15 and 5 respectively. In this manner marks were to be awarded out of 100 and minimum requirement/benchmark was to get 75 marks for a bidder to qualify for stage three. While evaluating the bids under the aforesaid six heads, there were further sub- heads and the total sub-heads count to 17 under the six heads. Thus there were six main parameters and 17 sub-parameters under which evaluation exercise was undertaken. All the five experts evaluated each of the four bidders who had qualified for stage two, under aforesaid heads. Thereafter, marks were added and on that basis it was found that the petitioner secured 49.1 marks whereas other three bidders could achieve the benchmark of 75 and above. This is demonstrated from the following tabulated sheet prepared by the Evaluation Committee which is signed by all the five experts. CWP No.6416/07. 16 Of 36 papers `A` Page-12 to be photocopied & attached CWP No.6416/07. 17 Of 36 The aforesaid process when read along with the minutes of the meetings of the Evaluation Committee, as recorded, brings out the following significant aspects: A. There was an objective criteria laid down by the Evaluation Committee on the basis of which the technical bids of the bidders were evaluated. B. Every proposal was examined on the basis of the pre-determined objective norms which have clear relevance with the nature of project. All the proposals were discussed and evaluated on a common platform. C. Adequate opportunity was provided to all the bidders to clarify their proposal. The bidders were even given a chance to make their presentation on the proposal submitted by them. The five members of the Committee had evaluated each proposal on the fixed parameters after going through the bids, presentations made and clarifications offered by the bidders while making their presentations. D. The five experts made their individual assessments assigning marks CWP No.6416/07. 18 Of 36 to the bidders under various heads which would signify an objective assessment made by these experts. E. Most importantly, the bid of the petitioner is not rejected on the ground that it contained the proposal for `Semi Automatic Parking System’. Thus the apprehension of the petitioner on this count which is the foundation of the writ petition is wholly misconceived. Normally after finding the aforesaid material on record, no further discussion was needed as this is sufficient to dismiss the petition being without any merits. However, after the records were produced and inspection provided to the petitioner as well, the petitioner has sought to build altogether different case after inspecting these records. The attempt thereafter was to find out loopholes and irregularity in the process and methodology adopted by the Evaluation Committee. The argument has thus shifted to a different platform. The petitioner now alleges, which was the focus at the time of arguments as well: 1. There has been no objective in the allocation of marks to various bidders inasmuch as there is wide variation in the marks allocated to the petitioner vis-a-viz allocated to other bidders and no reasons have been recorded therefore, CWP No.6416/07. 19 Of 36 2. It is contended that the Supreme Court in the case of Reliance Airport Developers (P) Ltd. Vs. Airports Authority of India (2006) 10 SCC 1 has categorically held and stressed the need for objective scoring system. Specific reference was made to pars 30,31,56,57,74 and 110 of the said judgment. 3. It is submitted that the representation of the petitioner was considered by the Technical Committee in its 8th meeting held on 14.8.2006 giving four reasons to disqualify the petitioner but these four reasons had no nexus with the evaluation criteria set out in Clause 2.4 of RFP. The four reasons which are assigned in the minutes of meeting dated 14.8.2007 are as under: 4. No references/testimonials with regard to workings of this parking system/solution anywhere in the world was provided. 5. Retrieval times excluded the time required to park-in the cars from the elevator to the parking floor & part-out the car upto the elevator from the parking floor and clearly CWP No.6416/07. 20 Of 36 exceeded the retrieval period of 3 minutes as required in the tender documents. 6. Circulation plan as proposed was observed to be unsatisfactory on account of usage of lifts for entry/exit during the peak traffic period. 7. Non-compliance was observed with regard to provision of three basements for manual/semi automatic systems and 4 basements were provided, however within 12 mts. 8. According to the petitioner, as per Clause 2.4 of the RFP, the parameters are technical selection, plan of implementation, resource allocation method statement. However, in the four alleged reasons cited by the Committee, only circulation plan finds the mention which is relevant and only 5 marks have been allocated under this head and no marks have been allocated to any other criteria set out in Clause 2.4. 9. It is argued that entire evaluation criteria and evaluation process is stooped in favour of `Fully Automatic Parking System’ involving use of sophisticated technology CWP No.6416/07. 21 Of 36 regardless of the ECS being achieved. 10. None of the members of the Evaluation Committee were experienced in transportation engineering which is the area of experts relevant for appraisal of the bids. Independent studies/ reports obtained by the Petitioner from Transportation Engineering Section, Deptt. of Civil Engineering, Indian Institute of Technology, Delhi and also from Centre for Transportation Systems, Indian Institute of Technology, Roorkee, clearly establish that the reasons cited by the Respondent for disqualifying the Petitioner are non- existent and have no factual basis whatsoever. The said reports have already been placed on record. The various technical parameters that a Bidder is supposed to achieve, have been duly set out in detail in various Clauses of Schedule - II. These include parameters relating to construction requirement, design parameter, operating and maintenance requirement etc. Objective requirements have been specifically prescribed in respect of various aspects, for instance, depth of construction, Base/Soil Dimensions/Car Space, Air- conditioning,