THE HON'BLE SRI JUSTICE GOPALA KRISHNA TAMADA W.V.M.P.No.4294 & Writ Petition No.26156 OF 2009 ORDER: 1 The Petitioner approached this court and filed the present Writ Petition with the following prayer: “For the reasons stated in the accompanying affidavit, it is prayed that this Hon'ble Court may be pleased to issue a writ, order or direction more particularly one in the nature of writ of mandamus directing that the tender process be adjudged on the basis of an objective, fair and transparent evaluation criteria which passes the muster on the touchstone of Article 14 of the Constitution; disqualify the Bid of M/s.Klenzaid Smith Carter on the ground of non-compliance with the terms of the Tender Document; declaring the action of the Respondent No.2 in seeking to conduct negotiations with only one of the bidders namely M/s.Klenzaid Smith Carter as being illegal, arbitrary and unconstitutional and consequently direct the Respondents not to hold negotiations exclusively with M/s.Klenzaid Smith Carter without affording an equal opportunity to the Petitioner and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case.” 2 Brief facts are that the second Respondent issued a tender document inviting sealed bids from pre-qualified firms/Contractors for setting up of “National Bio safety Level 4 Containment Facility (NBCF) for Human Infectious Diseases (for short ‘The Project’) on turnkey basis at CCMB, Annex-II Campus for Medical Bio Technology, located at Uppal Industrial Area in Hyderabad on 10th November 2008 fixing the last date for submitting the bids as 20.01.2009. The second Respondent conducted a pre- bid meeting, to which the representatives of the Petitioner also attended along with other potential bidders wherein the Petitioner requested the second Respondent to extend the last date of submission of the bids to which the second Respondent rejected. The third Respondent submitted its bid on the last date i.e. 20.01.2009. The Petitioner was under the impression that the bid submitted by the third Respondent would be rejected as the bid submitted by the third Respondent did not comply with the tender condition requiring the bid to be submitted in a two bid system i.e. technical and commercial. When it came to light that the bid submitted by the third Respondent was not in conformity with the bid conditions, the second Respondent, in order to enable the third Respondent to improve the bid, extended the last date of submission of bids from 20th January 2009 to 5th March 2009 and the same was informed to the Petitioner. 3 On 23.04.2009 the technical bids submitted by the bidders were opened in the presence of the Petitioner and the third Respondent. On 03.06.2009 the second Respondent informed the Petitioner that in terms of the conditions of the Tender Documents, the Petitioner was required to make a presentation to the committee constituted for this purpose regarding its technical bid on 19.06.2009 at 10.00 AM and the Petitioner made a presentation to the second Respondent on 20.06.2009 wherein the Petitioner had satisfactorily replied to all the queries raised by the Committee members. On 13.08.2009 the second Respondent again wrote to the Petitioner and stated that the bid submitted by the Petitioner was under active consideration and reminded the Petitioner that the bid submitted by it was to expire on 20.08.2009 and since the evaluation process was still on, the Petitioner was requested to extend its bid by a period of two months and the Petitioner by its letter dated 17.08.2009 extended the validity of its period by two months from 20.08.2009. 4 The Petitioner further submits that it received a letter dated 30.09.2009 informing it that 09.10.2009 had been fixed as the date for opening the Commercial Bids of the qualified bidders and requested the Petitioner to depute two representatives to be present at the time of bid opening. On 09.10.2009 the Commercial bids were opened in the presence of the representatives of the Petitioner and the third Respondent, at which time, only the figures submitted by the bidders were announced but no results were declared. At the said meeting the representatives of the Petitioner raised certain objections regarding the Commercial Bid of the third Respondent including its failure to 1) state an all inclusive lump sum price and stating an item-wise BoQ instead; 2) submit a soft copy of the commercial bid along with the commercial bid as is required by the Tender documents; and 3) State the aggregate price of BoQ as is required by the tender documents. However, despite the said objections, the authorized representatives of the second Respondent refused to deal with the issues and instead stated that after evaluating the bids submitted by both the bidders the successful bidder would be declared. Dissatisfied with the manner in which the representatives of the second Respondent acted, the Petitioner addressed a letter dated 12.10.2009 to the second Respondent enlightening as to had happened on 09.10.2009 and raised its concern and hope that the tender will be evaluated in accordance with the terms contained in the tender document. 5 The Petitioner further submits that though the bid submitted by the third Respondent being non-compliant, the second Respondent invited the representatives of the third Respondent for negotiations on 03.12.2009, without informing the Petitioner of the outcome of its commercial bid and without giving the Petitioner an opportunity to negotiate. The second Respondent appears to be using the ambiguities existing in the tender document to favour the third Respondent for extraneous considerations and in that connection the Petitioner wrote a letter to the second Respondent on 26.11.2009 but there was no response. Hence the petitioner approached this court and filed the present Writ Petition. 6 This court, on 02.12.2009, while ordering notice before admission, passed an interim order to the effect that “The meeting proposed to be held on 03.12.2009 with the third respondent may go on, however, the award of contract shall not be finalized for a period of two weeks”. 7 Second respondent filed counter affidavit contending that M + W Zander (S) Pte Ltd, 16, International Business Park, Singapore submitted the tender along with an agreement made on 26.02.2009 under the caption “Teaming Agreement” and the said agreement is between M+W Zander (S) Pte Ltd., Singapore and Hemisphere Engineering Inc., Canada and Germfree Laboratories, Inc., USA. So the petitioner herein is not a party to the teaming agreement and has no locus to file the present Writ Petition. It is further contended that since the third respondent alone submitted the tender as on the last date for submitting the tenders i.e. 20.01.2009, the second respondent extended the time up to 05.03.2009 and hence the third respondent took back the tender submitted by it in sealed condition on 20.01.2009 itself. On 05.03.2009 both the petitioner and the third respondent have submitted their tenders. On 23.04.2009 the technical bids submitted by the two bidders were opened and the commercial bids were opened on 09.10.2009 in the presence of the representatives of both parties. The bid of the petitioner was for Rs.170,18,00,000/- whereas the bid of the third respondent was for Rs.97,86,00,000/- and so being the lowest evaluated tender, the third respondent was invited for negotiations. It is further contended that the second respondent is not obliged to call for negotiations a tenderer who is not the lowest. It is further contended that the petitioner had submitted a lump sum bid price inclusive of all duties and taxes, whereas the requirement under the tender document is the showing of unit rates and amounts and not lump sum amount and that the third respondent had also included the prices of the requisite bio-safety equipment. It is further submitted that at page No.32 of the bid, the third respondent has given the grand total offer price in both words and figures. The second respondent finally contended that it has not violated any of the guidelines stipulated by the Central Vigilance Commission (CVC). 8 Third respondent filed a separate counter refuting the allegations made by the petitioner, and contended inter alia that as per the Notice Inviting Tender and General conditions, the commercial bid was to be as per item wise Bills of Quantities (BOQ) and not lump sum price. However, the third respondent has also submitted lump sum price which is the aggregate of individual unit rate prices which was also lower than the petitioner’s lump sum price and the petitioner’s Commercial bid stands disqualified because of its failure to provide item wise BOQ. The third respondent further contended that the petitioner was neither the tenderer nor a member of the consortium of M + W Zander(s) Pte. Ltd Singapore who had submitted the tender and participated in the technical bid discussions. It is further contended that the second respondent has not violated any of the guidelines issued by the CVC. It is further submitted that the commercial bid submitted by the Petitioner stands disqualified because of its failure to provide item wise BOQ. The third Respondent specifically denied the contention of the Petitioner with regard to the submission of the soft copy of the commercial bid along with the envelope for technical bid. The third Respondent further submitted that the Petitioner has suppressed the material facts being tender value of the Respondent No.3 and that the Petitioner has submitted lump sum bid price inclusive of all duties and taxes at Rs.170,18,00,000/- whereas the requirement under the tender document is the showing of unit rates and amounts and not lump sum amount alone. In fact, the third Respondent had also submitted in addition to item wise BOQ lump sum price of Rs.97,86,00,000/- and denied the allegation of the Petitioner that the third Respondent failed to include the price of bio safety equipment since the third Respondent has included in the price the required number of bio safety cabinets and other related equipment. 9 However, the Petitioner has filed separate reply affidavits refuting the averments made by the Respondents 2 and 3 in their respective counters. 10 Heard the counsel appearing for all the parties. 11 The learned senior counsel for the petitioner Mr. Atul Sarma reiterating the averments made in the affidavit filed in support of the Writ Petition vehemently contended that the said acceptance of the bid submitted by the third Respondent is contrary to the CVC guidelines and also the lump sum amount mentioned therein and that the second Respondent failed to discharge its obligation in a transparent and fair manner and that the tender process will fail to meet the test of fairness which every public tender is required to pass under Article 14 of the Constitution of India because of the various shortcomings and ambiguities crept in the tender document and that the second Respondent is exploiting this very vagueness in the tender document and exploiting the same in order to favour the third Respondent and contended that the Supreme Court has held in a plethora of judgments that a tender process which suffers from ambiguity and short sightedness must be struck down because such a process directly effects the right to equality. He further contended that altering the completion period of the tender has a material affect on the tender and amounts to changing the rules of the game midway. He further contended that the tender document which provide for the submission of a price bid are not based on uniform criteria for selection, which is apparent from the fact that the tender document fails to distinguish between price bids submitted on a lump sum basis and price bids submitted on item rate basis and that while the tender document prescribes an over all tendered cost. He further contended that the second Respondent is not fair enough for the reason that it ought to have summarily rejected the bid offered by the third Respondent since the third Respondent filed the soft copy of the commercial bid along with the technical bid thereby disclosed the information regarding the financial bid at the technical evaluation stage. The learned senior counsel appearing for the Petitioner has drawn my attention to the guidelines issued by the CVC under various circulars and contended that the second Respondent has violated the said guidelines issued by the CVC which directed that there should not be post tender negotiations except in certain exceptional situations. He further contended that the third Respondent has only given BOQ rates and has not given any lump sum figure that caps such BOQ rates and the figure of Rs.97,86,00,000/- offered by the third Respondent admittedly does not include the levies, rates, taxes and other charges, which is contrary to the Notice Inviting Tender requirements and it is only a tentative figure and not a firm offer, particularly in view of the pre bid clarifications issued by the second Respondent. He further contended that the said figure offered by the third Respondent is a sum total of all BOQ items and it does not factor in the period of completion of the project or the time frame of 30 months. He further contended that the tender provides that the time for completion of the project is 30 months from the 10th day of award of work to the successful tenderer whereas the third Respondent has stated that it would complete the contract work within 46 months. So, in that view also the second Respondent should not have responded favourably towards the third Respondent. He further submitted that the bids of the Petitioner and the third Respondent are incomparable solely on the basis of the amount quoted in the commercial bid since there is lot of difference between the parties with regard to the technology being offered in execution of the contract and to overcome this lacuna the third Respondent is camouflaging its rates which is contrary to the conditions of the tender. He further contended that whatever the compliance parameters provided in the Tender conditions have been waived off by the second Respondent in order to help the third Respondent. Finally, in support of the above said contentions, the learned counsel relied upon the ration laid down in Food Corporation of India Vs. M/s. Kamdhenu Cattle Feed Industries[1], Monarch Infrastructure (P) Ltd., Vs. Commissioner, Ulhasnagar Municipal Corporation and others[2], AIR India Ltd., Vs. Cochin International Airport Ltd and others[3], Dutta Associates Pvt., Ltd Vs. Indo Merchantiles Pvt. Ltd and others[4], Reliance Energy Ltd., and another Vs. Maharashtra State Road Development Corporation Ltd., and others[5], Precision Infratech ltd., Ahmedabad, Gujarath Vs. A.P. GENCO Ltd., Hyderabad and others[6]. 12 Per contra, Sri E. Manohar learned senior counsel appearing for the second Respondent contended that the second Respondent had acted strictly according to the guidelines issued by the CVC and the entire tender process was done transparently and there is no illegality of any nature in the said process. He further contended that inasmuch as the third Respondent alone had submitted the bid within the stipulated time i.e. 20.01.2009, time was extended up to 05.03.2009. He further contended that in fact the Petitioner had not submitted the bid within the time though his request for extension of time was rejected and the Petitioner had submitted its bid only during the extended period of time. Since the third Respondent is the lowest bidder, the same was taken into consideration and hence it was invited for further negotiations. He contended that though the petitioner had submitted a lump sum bid price inclusive of all duties and taxes, whereas the requirement of the Commercial bid of the tender document is the showing of unit rates and amounts and not lump sum amount and that the third respondent had also included the prices of the requisite bio-safety equipment. He further submitted that the third respondent has given the grand total offer price in both words and figures and finally contended that the second Respondent has not violated any of the guidelines stipulated by the Central Vigilance Commission (CVC). He relied upon Raunaq International Ltd., Vs. I.V.R. Constructions and others limited[7]. 13 On the other hand Sri Prakash Reddy learned senior counsel appearing for the third Respondent while opposing the contentions advanced by the counsel for the Petitioner vehemently contended that the Petitioner submitted the bid after the initial date i.e. 20.01.2009 and having availed the extended time of nearly 45 days he was also permitted to change the constitution of their consortium after expiry of the original tender submission due date. He further submitted that the bid of the third Respondent was returned on 20.01.2009 itself not because of any laches on its part, but since only one bid was submitted as on the due date. He further submitted that what all the correspondence which the second Respondent did is not with the Petitioner but with M + W Zander(s) Pte Ltd., Singapore and so the Petitioner has no locus to file the present Writ Petition. He further contended that the requirement under the Tender Document is the showing of unit rates and amounts and not lump sum amount alone and in fact the third Respondent had also submitted in addition to item wise Bill of Quantities, a lump sum price of Rs.97,86,00,000/-, which includes the price of bio safety equipment and other related equipments. It is his contention that the third Respondent was invited for negotiations only because the technical bid submitted by it is correct and the commercial bid is the lowest. He further contended that there is no favoritism or any illegality in the second Respondent inviting the third Respondent for negotiations. 14 As can be seen from the tender document itself it is to be noticed that in the Technical Bid the tenderer must enclose sketch / preliminary design of the proposed facility, all technical details brouchers, pamphlets, specifications of the various items, equipments, fittings, fixtures proposed by them for the use in this work and also submit the item wise Bill of Quantities showing full description of item, details of make and model, source of procurement, quantity etc. So the contention of the Petitioner that the third Respondent has not submitted lump sum bid cannot be accepted inasmuch as the requirement under the tender document is the showing of unit rates and amounts and not lump sum price though the petitioner had submitted a lump sum bid price inclusive of all duties and taxes, and that the third respondent had also included the prices of the requisite bio-safety equipment. Further, the third respondent has also given the grand total offer price in both words and figures. So it cannot be said that the second respondent has violated the guidelines stipulated by the CVC. 15 No doubt it is clear from the record that the third Respondent had not submitted the soft copy of the commercial bid along with the commercial bid and on that point the Petitioner is attributing some malafides to both the Respondents. But it is not a vitiating factor entailing the rejection of the bid of the third Respondent. Submission of soft copy is only to enable the second Respondent from the process of doing duplicating work. Further, regarding the extension of time, the contention of the Petitioner is that though it had requested the second Respondent for extension of time, the second Respondent had not accepted for the same, but, the second Respondent had extended the time only after it has noticed some technical irregularities in the bid submitted by the third Respondent. But in my considered view, the said contention cannot be countenanced since nowhere in the record it is revealed that the bid submitted by the third Respondent was opened by the second respondent on 20.01.2009. It is the firm contention of both the Respondents that the bid submitted by the third Respondent was returned in sealed condition on the same day itself. So the question of the second Respondent finding fault or something with the technical bid of the third Respondent does not arise. Further, it is also to be noticed that though its request was negatived for extension of time, the Petitioner has not submitted its bid in time. It is only when the third Respondent alone submitted its bid, the second Respondent thought it fit to extend time for submission of bids by others also and the Petitioner had submitted its bid in the extended period only. So in that aspect the action of the second Respondent cannot be found fault with. 16 The other contention of the Petitioner is that as there was some ambiguity in the tender document, the second Respondent is taking advantage of the same and is trying to knock down the award in favour of the third Respondent for extraneous considerations. This court is not in agreement with the said contention. After submission of the bids by the respective parties, the second Respondent held a pre bid meeting with all the bidders to which the Petitioner as well as the third Respondent had attended and all the queries raised by the bidders were cleared and it is also admitted by the Petitioner that what all the doubts they raised were answered by the second Respondent in writing. So the Petitioner, having participated in the pre bid meeting, and got answers for all its queries, is not justified in attributing malafides to the second Respondent on that aspect at this juncture. 17 With regard to the negotiations, which the second Respondent has intended to hold with the third Respondent, it is to be stated that only after the technical as well as the commercial bids submitted by both the parties were opened and having been declared that the third Respondent is the lowest bidder only, the second Respondent has intended to hold negotiations with the third Respondent. The bid of the petitioner was for Rs.170,18,00,000/- whereas the bid of the third respondent was for Rs.97,86,00,000/- and so naturally being the lowest evaluated tender, the third respondent was invited for negotiations. So in my considered view the second Respondent in inviting the third Respondent for negotiations is justified. 18 It is to be noticed that the technical bid of the Petitioner was not rejected and on the other hand the technical bid submitted by the third Respondent was also accepted. But, the second respondent having been satisfied with the technical bids of both the parties was left with only one option i.e. to award the contract to the lowest bidder and the third Respondent being the lowest bidder was selected for giving the contract and in that process it was called for negotiations. 19 Coming to the decision relied on by the counsel on either side, in I.V.R.Constructions Limited (7 Supra), which was relied upon by the learned senior counsel Mr.E.Manohar, appearing for the second respondent, their Lordships held at para 11 as follows: “When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the Court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenders, the Court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenders may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by Court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour one tenderer or the other tenderer.” 20 At para No.27 of the very same judgment, it was further held that: “………..The award of tender cannot be stayed at the instance of a party which does not fulfill the requisite criteria itself and whose offer is higher than the offer which has been accepted. It is also obvious that by stopping the