THE HON'BLE SRI JUSTICE NOUSHAD ALI Writ Petition No.20878 of 2011 BETWEEN: P.L.R. Projects Pvt. Ltd., Rep. by its Managing Director P. Lakshmu Reddy …. PETITIONER And 1. Government of Andhra Pradesh Rep. by its Principal Secretary, Irrigation & Command Area Development Secretariat, Hyderabad, and others. …. RESPONDENTS Counsel for petitioner: Sri V.R.N. Prashanth Counsel for respondents 1 to 4: Additional Advocate General Counsel for respondent No.5: Sri R. Raghunandan The Court made the following order: ORDER: The petitioner, which claims to be a special class civil contractor, has filed this writ petition seeking a Mandamus challenging the award of contract in favour of the 5th respondent pursuant to tender notification No.08/2010-11, dated 01-10-2010 issued by the 4th respondent and the consequent Agreement No.18/SC/2011-12 dated 27-07-2011, as illegal and arbitrary. An intending bidder under the Tender conditions is required at the time of tender to deposit Rs.8,86,700/- towards EMD, whereas the 5th respondent deposited Rs.8,70,000/- only; therefore, the Respondent No.5 is not entitled for consideration of the bid and award of contract; this in brief is the controversy in the Writ Petition. The brief facts are; the 1st respondent issued tender notification IFB No.08/2010-2011, dated 1.10.2010 inviting tenders through e-procurement to execute the project work, namely, “Formation of Reservoir across Gangamma Sirassuvanka near Nalgampalle (V) including diversion system in reserve forest to supply drinking water to Palamner Town in Palamner (M), Chittoor District”, at an estimated contract value of Rs.88,667,548/-. An amount of Rs.8,86,700/- was prescribed as bid security. The Superintending Engineer, Irrigation Circle, Chittoor District, the 4th respondent herein, was nominated as the Officer for Inviting Bids and the Bid Opening Authority. The bidders were required to submit their eligibility, qualifications, technical bid, financial bid etc., in online standard formats displayed in e-procurement website and to upload the scanned copies of the relevant certificates, documents etc., in support of the eligibility criteria/technical bids and certificates/documents in the website. Only two bids – one from the petitioner and the other from the Respondent No.5 – were received. On a consideration, the bid of the Respondent No.5 was accepted as being the lowest, hence awarded the contract, even though Respondent No.5 failed to deposit EMD for requisite amount. The learned counsel for the petitioner would strenuously contend that payment of EMD is a mandatory condition and without complying the said condition the tender is liable to be rejected at the threshold. Even though the 5th respondent deposited EMD of Rs.8,70,000/- the same does not answer the requirement because as per para 1.4 a bidder should deposit EMD of Rs.8,86,700/-. Thus the 5th respondent, who did not satisfy the said condition, was not eligible for being considered for the contract. Reliance is placed on W.B. State Electricity Board v. Patel Engineering Co.; Sorath Builders V. Shreejikrupa Buildcon Ltd. ; S.K.Enterprises V. Registrar, English and Foreign Languages University and B.S.N.Joshi & Sons Ltd. v. Nair Coal Services Ltd . The learned Additional Advocate General, on the other hand while admitting that the 5th respondent furnished Demand Draft worth Rs.8,70,000/- only, would submit that since the deficiency was only a meagre amount of Rs.16,700/-, which was later paid on 15.4.2011, the same was examined by the Committee of Tenders (COT) and having due regard to the other aspects of work and clause 3.1, the petitioner’s bid was accepted. He would further contend that in pursuance of acceptance, agreement was concluded on 27.07.2011 and 10% of the works has already been completed besides gathering entire material and deploying men and machinery. The learned Additional Advocate General would also contend that the petitioner did not take any objection when the price bid of the 5th respondent was opened, hence he is estopped from doing so after the bid of the 5th respondent has been accepted. The petitioner has no bona fides in opposing the award as he quoted higher price. Reliance is placed on B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd ; Centre for Public Interest Litigation v. Union of India and Poddar Steel Corpn. V. Ganesh Engineering Works. Sri R.Raghunandan, learned counsel for Respondent No.5 has supported the contract contending that the Respondent No.5 by paying the EMD, even though deficient, substantially complied with the condition and even the said deficiency was also rectified later. He would further submit that Respondent No.5 has already commenced the work by entering into an agreement. The petitioner who quoted excess rate over and above the estimated cost and who was not diligent while awarding contract to Respondent No.5, is estopped by his conduct to challenge the award at this point of time. Reliance is placed on G.J. Fernandez v. State of Karnataka and Poddar Steel Corpn. v. Ganesh Engineering Works. I have considered the aforesaid contentions. It may be mentioned that there is no controversy in so far as the principles stated by the Apex Court in the decisions cited by the parties. Generally a tender notification lays down essential conditions of eligibility and other conditions incidental thereto. Essential conditions are those which must invariably be adhered to. If a party fails to comply with the said conditions, it would result in rejection of bid. On the other hand if the incidental requirements are not complied with, it may not result in rejection. Further a tender may reserve power in an authority to relax tender conditions. Ultimately a bid may have to be considered keeping in view the object of the tender. In the instant case, in order to examine whether the condition as to EMD is mandatory, it is necessary to examine the relevant clauses. Clause 3.1 required payment of EMD, which is as follows. “3.1 Each tenderer must pay Rs.8,86,700/- (Rupees Eight lakh eighty six thousand and seven hundred only) towards Earnest Money Deposit at the time of the tender in the shape of crossed Demand draft in favour of Assistant Pay & Accounts Officer, Chittoor at any branch of State Bank of India / State Bank of Hyderabad or any nationalized bank unconditional irrevocable bank guarantee in the standard format drawn in favour of the Superintending Engineer, I & CADD, Irrigation Circle, Chittoor valid for a period of 6 (Six) months from the date of publication of tender on “e” procurement market place.” Clause 3.2 is as follows : “The successful bidder shall invariably furnish the original DD/BG towards EMD certificates/documents of the uploaded scanned copies to the Tender inviting Authority before entering into agreement either personally or through courier or post and the receipt of the same within the stipulated date shall be the responsibility of the successful bidder. The Department will not take any responsibility for any delay in receipt/non-receipt of original DD/BG towards EMD, certificates/documents, from the successful bidder before the stipulated time. If any successful bidder fails to submit the original Hard copies of uploaded certificates/Documents, DD/BG towards EMD within the stipulated time or if any variation is noticed between the uploaded documents and the hard copies submitted by the bidder, the successful bidder will be suspended from participating in the tenders on e-Procurement platform for a period of 3 years. The e-Procurement system would deactivate the user ID of such defaulting successful bidder based on the trigger/recommendation by the Tender Inviting Authority in the system. Besides this, the Department shall invoke all processes of law including criminal prosecution of such defaulting bidder as an act of extreme deterrence to avoid delays in the tender process for execution of the development schemes taken up by the Government as per G.O.Ms.No.174 I & CAD (PW-Reforms) Department, dated 01-09- 2008. The successful tenderer should pay balance EMD i.e., the EMD calculated at 2.50% less the EMD paid at the time of filling tender at the time of concluding agreement in the shape of crossed DD in favour of Pay & Accounts Officer, Tirupati at any Nationalized bank/unconditional irrevocable bank guarantee in the standard format valid for a period for 24 months (Period of completion plus defect liability period of 42 months).” Clause 1.4 (d) is as follows : “(d) E.M.D in the shape of D.D in favour of Assistant Pay & Accounts Officer, Chittoor unconditional irrevocable Bank Guarantee in favour of the Superintending Engineer, I&CADD Chittoor for Rs.8,86,700/- to be valid for the period as indicated in the Para 3.00 i.e. 6 months.” Clause 1.2 (b) is as follows : (b) The successful bidder shall invariably furnish the original DD/BG towards EMD, certificates/documents of the uploaded scanned copies to the Tender Inviting Authority before entering into agreement either personally or through courier or post and the receipt of the same within the stipulated date shall be the responsibility of the successful bidder. The Department will not take any responsibility for any delay in receipt/non-receipt of original DD/BG towards EMD, certificates/documents, from the successful bidder before the stipulated time. It is common knowledge that, in the field of tenders, bids are invited from the intending bidders keeping in view the nature of work and the capacity of a bidder to execute the same. An intending bidder should not only posses the requisite qualifications, but also should be financially sound enough to undertake the execution of work. Payment of E.M.D. is one such requirement, which is enforced at the threshold. Payment of E.M.D. at the entry point is enforced in order to filter the incapable and non-serious bidders. Thus, Clause 3.1 has prescribed that each bidder must pay the EMD at the time of tender. Clause 3.2 has prescribed that the successful bidder should ‘invariably’ furnish the original D.D./bank guarantee towards EMD along with other certificates of the uploaded scanned copies to the tender inviting authorities before entering into agreement. If any successful bidder fails to submit the original hard copies of the uploaded certificates/documents, DD/bank guarantee towards EMD within a stipulated time, the successful bidder will be suspended from participating in the tenders for a period of three years. Thus, the said conditions imposes an obligation on a bidder to pay the EMD and also to upload the documents, the original of which should be furnished before entering into agreement. These conditions read together apparently show that a bidder in order to participate in the tender cannot fail to pay EMD. As noticed above, the bid has also quantified the amount at Rs.8,86,700/-. It is true that an authority may have power to relax any condition provided such power is reserved by indicating in the document itself. In the instant case, there is no such provision in the bid, which has reserved power in any authority. On a consideration as above, I am of the view that the 5th respondent failed to comply with the mandatory condition by paying the requisite EMD. Despite my conclusion as above, the question that is still to be addressed is, whether this Court, in the circumstances of the instant case, can exercise its discretion and issue a Writ? While issuing a Writ under Article 226 of the Constitution of India, the Court would ordinarily examine the matter vis-à-vis the law. Very often, even though an action is not sustainable in law, the Court may decline to grant relief because of the conduct of parties. Those who approach the Court with unclean hands have always been denied the relief. So also in the matters involving personal interest vis-à-vis public interest, the Courts have not shown any inclination towards the individual. In this regard, it is useful to refer to the observations of the Apex Court in Sangram Singh v. Election Tribunal, Kotah, which read thus: “The jurisdiction which Articles 226 and 136 confer entitles the High Courts and this Court to examine the decisions of all Tribunals to see whether they have acted illegally. That jurisdiction cannot be taken away by a legislative device that purports to confer power on a tribunal to act illegally by enacting a statute that its illegal acts shall become legal the moment the tribunal chooses to say they are legal. The legality of an act or conclusion is something that exists outside and apart from the decision of an inferior tribunal. It is a part of the law of the land which cannot be finally determined or altered by any tribunal of limited jurisdiction. The High Courts and the Supreme Court alone can determine what the law of the land is ‘vis a vis’ all other courts and tribunals and they alone can pronounce with authority and finality on what is legal and what is not. All that an inferior tribunal can do is to reach a tentative conclusion which is subject to review under Articles 226 and 136. Therefore, the jurisdiction of the High Courts under Article 226 with that of the Supreme Court above them remains to its fullest extent despite S.105. That, however, is not to say that the jurisdiction will be exercised whenever there is an error of law. The High Courts do not, and should not, act as Courts of appeal under Article 226. Their powers are purely discretionary and though no limits can be placed upon that discretion it must be exercised along recognised lines and not arbitrarily; and one of the limitations imposed by the Courts on themselves is that they will not exercise jurisdiction in this class of case unless substantial injustice has ensued, or is likely to ensue. They will not allow themselves to be turned into Courts of appeal or revision to set right mere errors of law which do not occasion injustice in a broad and general sense, for, though no legislature can impose limitations on these constitutional powers it is a sound exercise of discretion to bear in mind the policy of the legislature to have disputes about these special rights decided as speedily as may be. Therefore, writ petitions should not be lightly entertained in this class of case.” The Apex Court in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. observed as under: “…… Even when some defect is found in the decision-making process, the Court must exercise its discretionary powers under Article 226 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. (Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. – {(2005) 6 SCC 138}” The Apex Court also observed that 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 the successful bidder 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. In the light of the above, it is to be examined whether the petitioner is entitled for a Writ setting aside the contract. There is no dispute that the 5th respondent is qualified in every respect, including the technical qualification. It is also not in dispute that the 5th respondent paid substantial amount towards E.M.D., except a meagre amount of Rs.16,700/-. The bid is a two-stage process, wherein technical bid would be considered first and those qualified in the technical bid would be considered for the price bid. In the instant case, as per the schedule, technical bid was opened on 27.10.2010 and the price bid was opened on 01.11.2010. Under para 4.0.2 the Chief Engineer / Minor Irrigation would finalise the tenders and submit to the COT and the COT would examine the bids and decide the successful bidder and communicate its decision to the Chief Engineer / Minor Irrigation, who in turn would communicate the same to the Superintending Engineer. The bid was accordingly examined by the COT, which accepted the 5th respondent’s bid, because the deficiency was meagre and the bid was found advantageous. While accepting the bit it also took into consideration the urgency in execution of work which is meant for providing drinking water and accordingly condoned the deficiency in payment of the EMD. The price bids of the petitioner and the 5th respondent are as follows: S.No Name Of Tenderer Percentage Quoted Remarks 1. BVSR Constructions Pvt. Ltd. (-) 3.00% less L.1 Respondent No.5 2. PLR Project Private Limited (+) 4.86% Excess L.2 1st petitioner At the above rates, the bid of the petitioner would have costed Rs.69,69,269/- more than the bid of the 5th respondent. The petitioner had not expressed its objection at the earliest point of time and allowed the tender process to go on till a decision was taken and an agreement was entered into on 27.7.2011. In view of the urgency, the 5th respondent commenced and indisputably completed 10% work. Setting aside the contract at this stage will not only hamper the project besides causing irreparable damage to the highest bidder. Further it will not automatically result in awarding the contract to the petitioner, who quoted the excess amount, and it may warrant calling for the tenders afresh, which again will not be in public interest. Therefore, I am not inclined to exercise the discretionary jurisdiction and grant the relief sought for in the writ petition. The writ petition is accordingly dismissed. No order as to costs. ________________ NOUSHAD ALI, J. 25th November, 2011. Js/Msr.