i?i^ <^ HiGH COURT OF CHHATTiSGARH AT BiLASPUR Writ Petition (Ci No.3218 of 2009 ^ "-x^- PETITiONER: R! M/s Simpiex Engineering and Foundr/ Works Private Limited versus South Eastern Coalfields Llmlted and oiners ORDER FOR CONSiDERATION HON'BLE MR. JUSTICE R.N. CHANDPAKAI Sd/- , , ^rendraMisnra Jud&e _3 e(_<y-2-e-(_ ^ Sd/- R.N. Chandrakar Judge POST FOR ORDER ON t^ AUGUST. 2009 ^^ ••-• . Scf/^ •^^ HIGH COURT OF CHHATTiSGARH AT BILASPUR Wilpetit[oii(C) No.3218 pf 2009 PETITiONER: ^.^^r^^.ir^j-.Kii"^' .C.Or'Wl'ML^'iZl'^ i -0. M's Simptex Engineering and Fou,-ur;i' VVOFKS hlr?'!V3tQ LimitSd, S CQrrlr;'3...'~;V reaistered under the inclian Companies Aci, 1956 thi'oucin rss Oirector Shri H.S. Shah, son of Late ^^i'3 !SH''"l^fi !t;s.E^j^!i i' ^ S*;^""; •yi^'i&r' ,' •;•'- vears, rssident of Maiviva Nsa.ir. •urg,L?!sinc?Ui!i'g, v^rsus South Eastsrn Coaifieics Li;Ti,';fed, through its Chsirman cum IVIanaging D'rector. SssoatRoad, Bilssour CCG^ i ne cnier ijenera' Nanager ;"/iaierj.a; Manager). South Eastern Coa'rieids Limlted, Seepat Road, Bilsspur (CG') Th$ Gensi's! lyisHiSQsr'fMci^^^ls. Managsr) South Eastern Coalfleids Lif'Hit-ed. Ss-soat Road, 31i3SDur :fCG; 1 iis UFsisT ^sFisrs; iVi^ri^osr ;hio.lVi) South Easiern Coalfie'ds Limi'ied. Sasnaf Rnsrl RilasoLir •'CG'i r^a^' •tto^ Ths Independeni Externai Nonitro Snri B,S. Minhas, A-29. Bha'rav Mgrg, H8nutTi3n N^o^f, Jsiiour (Rs Bs'^hsn) M/s Eii^CO E seon. a oi'iysto co^TiOsnv duiv rai2Jsteraci the Comoanies a,st, 1956, hsvlno its offlco st V.V. Ms:.'^3f Aansnd Gui^i'st, throuQh Its M^naqsno n!re<-t(" (Peiition under Articie 225 ofthe Constitution of india) i^r,sssn"' Shri Rajesv Shrivastava Si Shri iVlaiay Shrivastsva, counse! for the petitic Shri Pr^vin D@s S; Sh^'i Vivsk Sh3rms, co'unssl 'for fssDond&nts No.tto 4. Shr' Prashant Mishra, Sr. Advocate with Sh" 'vlrlfunjay Kumar £ Advocate for respondent No.5. Bench: Hon'bie Shri Drsirendra MIshra & Hon'bie Shri.R.M..Chaii£lra|(a! ^ ys. ;)>>0 <»Baa> ^\ ^ .<y .4? ^•~, 'l'"^3^ '"^•s-s-nSf ff ^tl\. (Passed on [V August, 2009) The foiio'A'ing order ofthe Couri: was passsd by Dhjrendra IVSEshra; J. The petitioner by this petition has prayed for direction to res|3ondents No.l to 4 to reject technlcal bid of respondent No.S in pursuance of notice inviting tencer (for short 'NIT') dated 2-'!2-2008 for suppiy of Standard Height Univarsai DriH Machine (hsreinafter referred to as UDiVi) and has aiso prayed for direction to rejec'; tender of resoondent No.S on the around that It is not in conformi'h,' wlth the eHgibi!!!/ cr'teria as ment;oned in the NiT. Br'efiy stated, the petltioner's case Is that respondent No.1 invited tenders for suppiy of UDM vide its NIT dsted 2-12-2008 (Annexure-P/3). The eilgibH'ty criteria of bidders is specified in Appendlx-A. Ciause 5.1.1 of the te'der conditions mandates that in resjsect of items necesssriiy requiring approval of DGMS for use !n Coa! Mines, blddsrs hsving va!id DGIVS approva! for their product, besides satisfactory performance report for at least one year !n any subsidiary of CIL/Govemment UndertaWng shali be considered p'oven source. The bidders shaii a!so submit copy of origjnal DGMS approvei with iatest validity extension, if any. They shai! submlt authenticated copies of ordsrs received by them from CiL, Its subsidiaries. Faiiure to subrnlt documents shall render a tender iiabie for rejection. Appendix A furtner provides that equlpment to be offered shall be considered proven provlded the type and modei of the equlpment offered must have been supoilsd in the past to the minina industries and/or to the other Industrles (Prlvots or Government/Pub'ic Sector Undertaking) and perform&d satisfadorily fcr s period of not less than one year f'om the date of commissioning. C!ause-3 ;a) cf Appsndlx B also contalns the simiter provis'on. Clause 27 stipuiatss that o';;£irs which do not meet tender requirernents either technicaliy o' comr'srciaily are ^sbie for rejection. Clarifications may not be sought from tsnderers after the Ssnclers (ParS-!) are opened. CIause 12 (d) ofthe Appendix B provides that the bidcsrs shou'd supply se!f atfesfed documents in support of the cialm of pro'/sn nature ofthe model with reference to clause 3(a). ind it was found thai tende? of SDecification as weli as elig'blHtv riferia o? N!T, as rsspondent No.6 is not having proven certificate for UDn?1 3. Technical bid was o'pened on 9-2-2009 E resoondent No.6 did not meet the technica! .3f!ls"1XV'9 <!f"^<";«5>» / i. t' ^' '%.:'^a^y. ^SI supported by suppiy copies orders. The respondents ought to have rejected technical bid as per Clause 27 on 9-2-2009 itself, but no decision was given desplte specific objection by the petitioner. The petitioner made a compiaint (Annexure-P/7) to respondent No.5, who was appointed as Independent Externai Monitor as per integrity pact mentioned in Appendix H of the N!T. However, respondent No.5 vide his report of Annexure-P/10 held that the contention of the petitioner that as per para 6.17 (IV) of the purchase manual ths on.ly Griteria is that machine should be proven equipment and clause 6.17 of the purchase manual is not subservient to para 7.22.3 of the purchase manual. 4. Respondents No.1 to 4 in their return have stated that the petitioner and respondent No.6 were only tenderers v/ho submitted their bid for UDM. After opening of the technical bid, the price bid submitted by the petitioner and respondent No.6 has been opened and the offer of respondent No.6 is the lowest and the tender proceeding is in the fina! stage. According to ciause 27 of the NIT, SECL reserves the right to cal! for any clarifications from the tenderers. Accordingly, clarifications were sought from the petitioner as wei as respondent No.6 vide Annexure-R/1 . Respondent No.6 has stated in his offer bid that model of machine offered by them is working satisfactorily in ECL for more than one year. The answering respondents have internally sought confirmation of the performance of the supplied equipment from the ECL. The equlpment suppiied by respondent No.6 to ECL is Face-cum-Roof- Drilling K4achine (UDM Model- 611) for field trial and its performance is stated , to be satisfactory as per performance report issued by the ECL slnce September, 2007 v/hieh is more than one year as required under the NIT. According to clause 6.17 (!V) ofthe conditions of NIT (Purchase Manual), the equipment to be offered by the tenderer is to be considered proven provided the type & model of the equipment offered must have been supplied in the past to the Mining Industries and/or to the other Industries (Private or Government/Public Sector Undertaking) and performed satisfactoriiy for a leriod of not less than one year from the date of commissloning. The condition nowhere requires that tenderer should have supplied equipment on the basis oforder of any Mining Industry. ':z^'z- 5. Respondent No.6 in its separate reply has questioned the maintainability or' the petition on the ground that the petitioner having participated in the tender process from commencement till end, having chosen alternative remedies by approaching External Monitor against the action of respondents No.1 to d and having waited till final outcome of the bids offered by him, is estopped from challenging action of the respondents. The price bid was opened on 6- 7-2009 and respondent No.6 was a lowest bidder and this fact has been deliberately suppressed by the petitioner. 6. Shri Rajeev Shrivastava, learned counsel appearing for the petitioner argued that conditions of NIT with respect to eiigibility criteria should be strictly enforced and it cannot be given a goby unless so provided in the NIT. Where essential conditions of the tender are not compiied with, the person inviting tender has to reject the same. Essential conditions have to be adhered to. If there is nopowsr of general relaxation, the same shaii not be exercised and the principle of strict comptiance would be applied where it is possible for all the parties to comply with all the conditions fully. 7. Reliance is placed in the matters of W. Engineering Co. Ltd. and others', jndia and others and B.S.N. Joshi & Sons Ltd., V. Nair Coa . Union of Services 8. ft was further argued that in view of the undisputed fact that respondent No.6 did not submit authenticated copies of supply order received by them from any of the companies mentioned in clause 5.1.1 and also did not furnlsh satisfactory performance report for at least one year, his technical bid itself was liable to rejection as per clause 27 of the NIT. However, respondent No.1 after opening of the technical bid sought for clarification about above shortcomings instead of rejecting the offer itself, which is not permissible. 9. On the other hand, Shri Pravin Das with Shri Vivek Sharma, learned counse! appearing for respondents No.1 to 4 and Shri Prashant Mishra, learned senior counsel appearing on behalf of respondent No.6 would submit that clause 27 gives discretion to the SECL that he may not seek clariflcation from ; (2001) 2 Sudreme Court Cases 451 - f2002) 6 Supreme Court Cases 315 3 (?qp6) 11 Supreme Court Cases 548 .^•3 the tenderers about their offe.rs. However, it does not debar the SECL from seeking clarifications from the offerers. Respondent No.6 had mentioned in his offer that he has supplied UDM to ECL, another subsidiary of the Coai india Limited and the same is satisfactorily performing for more than one year. The clarification^ was a!so sought from the petitioner, however, the petitioner has deiiberately suppressed the same. 10. Relying upon the judgment of the Supreme Court in the matter of Master Marine Services (P) Ltd., V. Metcalfe & Hodgkinson \/ another , it was argued t.hat in contractual matters, exercise of discretionai" power under Article 226 is to be exeicised with great caution and the same is to be exercised only in furtherance of public interest and not mere!y on making out of a legal point. While exercising such powers larger public interest is to be kept in mind and it is to be exercised only when it comes to conclusion that overwhelming public interest requires interference. l. Shri Prashant Mishra, learned senior counsel appearing for respondent No.6 also argued that it is settied law that as a normal rute the Court should not interfere in contractual matters, as the Court does not sit as Court of Appea! to merely review the manner in which decision was made. The Court does not have expertise to correct administrative decision. If review of the administrative decision is directed, it will be substituting its own decision without necessary expertise, which itself may be fallibie. 12. Reliance is piaced in ths matters of Tata Celiular V. Indsa Ltd. V. Cochin Intsrnational Airports Ltd. & Ors. , Centre Tor Publlc Snterest Litigation V. Union of India , Karnataka State Industrial Investment & Development Corporation Ltd., V. Cavalet India Ltd. & Ors.8, and Subash Projects & Marketing Ltd., V. West Bengal Power 13. We have heard learned counsei for the parties. ^ (2005) 6 Supreme Court Cases138 ° (1994)63cc 651 6 (2000)23cc 617 ' (2000) 8 SCC 606 3 (2005) 4 SCC 456 9 (2005) 8 SCC 438 ^,'' ^^-^^ •~^, S' sT '"% *lfc \^y/ '^-s.g-1''1" ^.M l4.The terms and conditions of the contract have been reproduced in the foregoing paragraphs. Indisputably, the petitioner and respondent No.6 were only 2 bidders for equipment UDM. The petitioner has challenged the eligibility of respondent No.6 on the ground that he did not furnish authenticated copies of the supply order for a period of one year from a company engaged in a mlning, as required in the general conditions of Appendix A to be eligibie for participating in the tender process and as per clause 5.1.1 of the NIT. His technical bid ought to have been rejected for being ineligible, however, the respondents sought c!arification instead of rejecting his technicai bid under clause 27. The petitioner firstly approached the Independent Monitor appointed by the SECL as per MoU with Transparency International India for redressal of his complaint raised in this petition. The Monitor after obtaining response from the respondent SECL dismissed the complaint wlth an observation that it is not at all obligatory on the purchasing company to first place a trial order as laid down in para 7.22.3 of the purchase manual. The crucial condition is that the equipment must be a proven equipment as laid down in para 6.17(IV) ofthe purchase manual. Since the working of UDM at ECL has been found satisfactory for mo.re than one year since September, 2007, there is no justification in Interfering with the decision of SECL management to technically qualify M/s Eimco for supply of UDM and accordingly, complaint of M/s Simpiex Engineering was dismissed. r' 15. From the documents filed by respondent SECL, it is a!so observed that SEC1 had sought ciarification from both the parties and clause 27 ofthe NIT can.not be construed that SECL has no discretion to call for clarification with respect to offers submitted by the tenderers in appropriate cases. 16. !t is settled law that scope of interference in contractual matters is very limited as held in catena ofjudgments cited by iearned counsel for the respondents. The petitioner has also relied upon the judgment in the matter of B.S.N. Joshi & Sons Ltd. (Supra). In para-66 of the said judgment, it has been observed thus:- 'We are also not shutting our eyes towards the new principles ofjudlcial review which are being developed; but the law as it ,/;ys*"%. 2^£> ^ /"•' .r"<»ssa§, i? ^^J^€ V,/ ,S stsnds now having regard to the principtes laid down in the aforementioned decisions may be summarized as under- (i) if there are essential conditions, the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particuiarly when he was also not in a position to comply with al! the conditions of tender fully, uniess the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illega! and withoutj'Jrisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by ail the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and objecf for which essential conditions were !aid down, the same may not ordinarily be interfered wtth; (vi) the contactors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lovvest tenderer, public interest would be given priority; (vii) where a decision has been taken purely on pubiic interest, the court ordinarily should exercise judicial restraint. / ;N. ^-^ ^ r. -s^ 't^.^/J ^^y < 17. If we apply principles of law laid down in the aforesaid judgment relied upon by the petitioner himself, we find that c!ause-27 provides that offers which do not meet tender requirementseither technically or commercially are liable for rejection. Clarifications may not be sought from tenderers after the tenders (Part-1) are opened. SECL reserves the right to accept or reject any tender either in whole or in part without assigning any reasons whatsoever. The above provision cannot be construed that SECL has no power to seek clarifications from the tenderers. Even otherwise, clarification has been sought from both the tenderers with respect to their offers and, therefore, SECL cannot be faulted for seeking clarification from respondent No.6. is.Sofar as other objection that respondent No.6 did not furnish satisfactory performance certificate for a period of not iess than one year from the date of commissioning from mining company to establish proven equipment is concerned, on the basis of information given by ECLthat UDM supplied by respondent No.6 is functioning since September, 2007 In itsorganizationand the SECL has verified that performance is satisfactory, therefore, contention of the petitioner that technical bid of respondent No.6 ought to have been rejected on the ground that he was not eligible to participate as per conditions of NIT has no substance. 19. In view of the settled law that in contractual matters, the discretionary power under Article 226 of the Constitution of India is to be exercised only in furtherance of public interest and not merely on some technlcal errors and the dispute raised by the petitioner Is a commercial dispute having no pubiic e!ement, we do not deem it necessary to interfere in such contractual matters in exercise ofjurisdiction under Article 226 ofthe Constitution of Indla. 20. The petition is accordingly dismissed. There shall be no orders as to costs. Sd/- DhirendraMishra Ju<^e Sd/- . 4 R.N. Chandrakar Judge Barve