IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No 2028 of 2009 Ramsarup Industrial Corporation (Unit of Ramsarup Industries Limited), having its registered office at 7/C, Kiran Shankar Roy Road, Hastings Chambers, First Floor, Kolkata - 700 001 through Partha Mukharjee, the Senior Marketing Manager - Petitioner Versus 1 The State of Bihar 2 The Commissioner, Water Resources Department, Government of Bihar, Patna 3 The Engineer-in-Chief, Water Resources Department, Government of Bihar, Patna 4 The Director, Purchase, State and Material Management, Water Resources Department, Government of Bihar, Patna 5 The Deputy Director, Purchase, State and Material Management, Water Resources Department, Government of Bihar, Patna 6 The Under Secretary (Account), Water Resources Department, Government of Bihar, Patna - Respondents 01st Set 7 UIC Udyog Limited, having its office at Swaika Centre, Room No 406, 4A Pollok Street, Kolkata -700 001 8 Premier Wires (P) Ltd, Janaki Path, Biratnagar, Nepal 9 Keshari Wire Products (P) Ltd, Mogalpura, Patna City, Patna - 800 008 10 Shree Balaji Wire Products, Sabalpur, Patna City, Patna - 800 008 - Respondents -02nd Set W I T H CWJC No 2033 of 2009 Ramsarup Industrial Corporation (Unit of Ramsarup Industries Limited), having its registered office at 7/C, Kiran Shankar Roy Road, Hastings Chambers, First Floor, Kolkata - 700 001 through Partha Mukharjee, the Senior Marketing Manager - Petitioner Versus 1 The State of Bihar 2 The Commissioner, Water Resources Department, Government of Bihar, Patna 3 The Engineer-in-Chief, Water Resources Department, Government of Bihar, Patna 4 The Director, Purchase, State and Material Management, Water Resources Department, Government of Bihar, Patna 5 The Deputy Director, Purchase, State and Material Management, Water Resources Department, Government of Bihar, Patna 6 The Under Secretary (Account), Water Resources Department, Government of Bihar, Patna - Respondents 01st Set 7 UIC Udyog Limited, having its office at Swaika Centre, Room No 406, 4A Pollok Street, Kolkata -700 001 8 Premier Wires (P) Ltd, Janaki Path, Biratnagar, Nepal - Respondents -02nd Set *** For the petititioner : M/s Sudhir Singh, Arbind Kumar Singh, Raghwanand, Ranjeet Kumar & Nishant Prakash, Advocates 2 For respondent No 7 : M/s Tara Kant Jha, Sr Advocate & Amish Kumar, Anjani Kumar, Advocates For the S t a t e : M/s Ramadhar Tiwari, AC to AAG 8 & Ashok Kumar Dubey, AC to AAG 9 *** 4 18.03.2009 These two writ petitions are in relation to tenders issued by Government of Bihar in the Department of Water Resources in relation to anti erosion work. They are basically for supply of steel wires of different diameters and, hence, two separate groups in the tender. As per the notice inviting tender, tenderers had to file their bids in two sets, as is usual, first the technical bid and then the financial bid in separate sealed envelopes. The notice inviting tender was issued on 29.12.2008. Petitioner, apart from others, obtained tender papers and submitted their bid documents on or about 15.01.2009. The technical bids were opened on 16.01.2009. On opening the technical bids, no one was informed immediately about any deficiency in their technical bid. The Tender Committee then met on 29.01.2009 for evaluation of technical bids. In the meantime, it is not in dispute that as is usual, certain unanimous complaint was received against certain tenderers as to their technical capabilities. Department, vide its letter dated 20th of January 2009, sought clarifications from at least four of the tenderers and further documents in support of their technical bid. Ultimately on the 29th of January 2009, the Tender Committee scrutinized the technical bids and apparently took a decision to reject petitioner’s technical bid apart from technical bid of few others. In the same meeting, it was then decided that financial bids of successful bidders would then be opened on 02nd 3 of February, 2009. Though petitioner came to learn that his technical bid was rejected, he was not being disclosed the reason thereof. The reason for rejection of technical bid was for the first time alleged to be informed on the office notice board on the 03rd of February, 2009. petitioner came to know that both his technical bids had been rejected on the ground that though, as required by Clause-10 of the NIT, he had furnished bank guarantees of the required amount but they were drawn in favour of the Registrar, Water Resources Department, Government of Bihar, Patna instead of Under Secretary (Accounts), Water Resources Department, Government of Bihar, Patna. On coming to know this, he immediately got rectification done and submitted rectified bank guarantees on the 05th of February, 2009 but on 04th of February 2009 itself, the Tender Committee opened the financial bids and took decision to award the contract, in both cases, to respondent No 7. Petitioner submits that mere wrong designation mentioning of an officer of the Water Resources Department was not such an illegality so as to vitiate his technical bid itself. It was a curable defect and not an illegality. The view taken by the Tender Committee kept under wraps till financial bids were opened denying opportunity to rectify the apparent clerical mistake and denying petitioner a chance to participate in the tender. It is, thus, submitted that the decision making process stands vitiated. To the contrary, Shri Tarakant Jha, learned Senior Counsel appearing for respondent No 7, in both the cases, and the learned State Counsel submit that furnishing bank guarantee was mandatory condition 4 and the bank guarantee, as furnished by petitioner, was not adequate compliance of the said clause. Thus, it should be taken that in fact there was no bank guarantee at all which automatically leads to disqualification of the petitioner. It is these rival contentions that have to be considered in the cases at hand. As pleadings are complete, with consent of parties, the writ petitions are being disposed of at this stage itself. Before proceeding further, it is necessary to know as to why tenders have to be submitted bifurcated into two bids, one technical bid and the second financial bid. Technical bid is submitted for technical evaluation of the person tendering about his capability to perform the contract. At this stage, there is no inter se competition amongst the parties. It is the technical or as the case may be financial capacity to execute the contract that has to be evaluated. The terms and conditions associated at this stage have to be, accordingly, understood. Secondly, there are terms and conditions which are essential to the performance of the contract and then there are terms and conditions which are aid in due performance of the contract. By nature, certain terms are mandatory and cannot be waived or altered. The other are procedural requirements which are not mandatory. A mistaken compliance of the latter would be mere irregularity for which opportunity to rectify has to be given. State, being controlled by the provisions of Article-14 of the Constitution of India even in matters of contract, has to act fairly and in a non-arbitrary manner and in public interest. This has to be kept in mind when we are judging the action of the State in declaring someone ineligible at the 5 stage of technical bid. I say so because by permitting an irregularity or a mistake to be rectified at the stage what is the consequence as noted above at the stage of technical bid, there is no inter party competition. The inter party competition starts at the stage of financial bid alone. If people are eliminated at the technical bid’s stage itself, the effect is that the inter party competition at the financial bid stage is reduced considerably. The whole concept of getting into competitive bid at the financial bid would stand defeated if not reduced in efficacy, if for technical reasons, technical bids are rejected. Such elimination of competition does not inure to the benefit of the State or the public. Such elimination cannot be termed to be in public interest. The action may not be mala fide but it can certainly be not bona fide. In the present case, the only defect that is pointed out is the name and designation of the beneficiary of the bank guarantee. It is not in dispute that beneficiary is not an individual but Government of Bihar. That was clear in the bank guarantee. Government of Bihar was acting in the Department of Water Resources. That was also there in the bank guarantee. What was not there was Under Secretary (Accounts) instead of it was noticed as Registrar. This, in my view, was hyper technical. As noted above, immediately after opening of technical bids on 16.01.2009 pursuant to some alleged complaint, several clarifications were sought for from different tenderers. If Department chose to act in public interest in seeking clarifications then in all fairness they should have sought a clarification from the petitioner as well because petitioner had not failed to furnish bank guarantee. Only the name/designation of 6 the officer was wrongly stated. This was neither permitted nor even communicated to the petitioner till it was very late and till the financial bids were opened, thus, effectually denying even a chance to correct the clerical mistake. This finding of mine is fortified from the fact that though decision on the technical bid by the Tender Committee was taken on the 29th of January 2009 which, at the same time, fixed 02nd February, 2009 as the date for opening for financial bids. The disqualification and the reason thereof in respect of technical bids were put up on the notice board, thereby disclosing to public, only on the 03rd of February, 2009. This appears to be rather strange coincidence. This effectively sealed the matter as against the petitioner and eliminated competition to respondent No 7. This, in my view, is not in public interest. Public interest would have been subserved if this clerical mistake was permitted to be corrected and then parties made to compete. Respondent No 7 clearly got an unfair advantage, thanks to the hyper technical view taken by the State in eliminating the petitioner. In this connection, I may refer to the case of Mangalore Chemicals & Fertilisers Ltd -Versus- Deputy Commissioner of Commercial Taxes and others since reported in AIR 1992 Supreme Court 152. The relevant portion thereof is to be found in paragraph-11 and is quoted hereunder: “The answer to this is in the words of Lord Denning : “Now I know that a public authority cannot be estopped from doing its public duty, but I do think it can be estopped from relying on a technicality and this is a technicality” (see Wells v Minister of Housing and Local Government, (1967) 1 W L R 1000 at p 1007). Francis Bennion in his „Statutory Interpretation”, 1984 edition, says at page 683 : 7 “Unnecessary technicality : Modern courts seek to cut down technicalities attendant upon a statutory procedure where these cannot be shown to be necessary to the fulfillment of the purposes of the legislation.” It is not in dispute that petitioner had furnished requisite bank guarantee of requisite amount in favour of Government of Bihar. Thus, substantially Clause-10 of NIT had been complied with. The mandatory part of Clause-10 was furnishing bank guarantee. Designation of the officer in the Department concerned was mere irregularity or a clerical error. It did not affect the substance of the transaction. My view is consistent with the law as laid down by the Apex Court in the case of M/s Poddar Steel Corporation -Versus- M/s Ganesh Engineering Works and others since reported in AIR 1991 Supreme Court 1579 and I can do know better but quote from paragraphs-6 and 8 of the reports as under : “As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank.” 8 As would be seen from the facts of the case above, there also the cheque was drawn as surety on a wrong bank and was not in accordance with the notice inviting tender. The Apex Court held that this was not such an irregularity which could not have been waived by the authorities. This decision of the Apex Court has been followed by this Court in the case of Kedar Nath Singh -Versus- State of Bihar & Others since reported in 2003 (4) PLJR 445 under somewhat similar circumstances. Thus, in my view, petitioner was wrongly excluded from consideration and was wrongly deprived of his right to compete for the tender in question. Having thus held, the question is with regard to what relief, the petitioner is entitled to. Thus Court, by interim order dated 18.02.2009, held that as it was clear that respondent No 7 had been selected and letter of intent issued to him, no interim order can be passed except that if agreement had not been entered into between the parties and work order not issued, the same shall not be done and parties would maintain status quo. In the counter affidavit, in CWJC No 2028 of 2009, it is specifically averred that pursuant to letter of intent having been issued in favour of respondent No 7, work order has been issued on the 13th of February, 2009 and by now he has already executed substantial part of the order. In that view of the matter, so far as CWJC No 2028 of 2009 is concerned, even though petitioner succeeds, he cannot be granted any effective reliefs but that is not the situation so far as CWJC No 2033 of 2009 is concerned. In that case by the time, this interim order was 9 passed by the Court, no work order was issued. That being the position, the Tender Committee of the respondent-State would now reevaluate the financial bids and take a fresh decision in accordance with law after taking into account the financial bid of the petitioner as well. It is expected that the proceedings would be taken up expeditiously as it is an anti erosion work to be completed at the earliest. With these observations and directions, the writ petitions are disposed of. M.E.H./ (Navaniti Prasad Singh)