IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SEVENTEENTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE C.V.RAMULU WRIT PETITION NO : 4560 of 2009 Between: M/s. ICOMM Tele Limited Rep. by its Senior Manager (Legal) Act, 1956 Having its Regd.Office at Trendset Towers, Rd. No.2, Banjara Hills, Hyderabad. ..... PETITIONER AND 1 The Bharat Sanchar Nigam Ltd. Rep. by its C.M.D. Bharat Sanchar Bhavan, Harish Chandra Mathur Lane, Janapath Road, New Delhi. 2 The Chief General Manager Bharat Sanchar Nigam Ltd. A.P. Telecom Circle, Hyderabad. 3 M/s. T.V.S. Interconnect Systems Ltd. Bogamane Tec Park, Bogamane Tower, Level - 7, 6th Floor, B-Block, C.V. Raman Nagar, Bangalore, Karnataka State. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue an appropriate writ, order or direction, more particularly one in the nature of Writ of Mandamus declaring the action of the respondents 1 and 2 in accepting the technical bid of the 3rd respondent pursuant to the Tender Notification No. TA/Cellone/SZ/2008/01, dated 1-5-2008 and further action of the 2nd respondent in approving the financial bid of the 3rd respondent pursuant to the letter No.TA/CellOne/Phase VI/2008-09, dated 2-3-2009, as illegal, arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution of India and consequently direct the respondents 1 and 2 to process the bids and finalise the same inconformity with the tender conditions. Counsel for the Petitioner:MR.P.VENUGOPAL Counsel for the Respondent No.: MS.P.SARADA The Court made the following : THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.4560 of 2009 ORDER: This writ petition is filed seeking a Mandamus declaring action of respondents 1 and 2 in accepting the technical bid of the third respondent pursuant to Tender Notification No.TA/Cellone/SZ/2008/01 dated 1.5.2008 and further action of the second respondent in approving financial bid of the third respondent pursuant to letter No.TA/Cellone/Phase.VI/2008-09 dated 2.3.2009 as arbitrary, illegal and violative of Articles 14 and 19(1)(g) of the Constitution of India and consequently direct respondents 1 and 2 to process the bids and finalise the same in conformity with the tender conditions. According to the petitioner, first respondent issued Tender Notification dated 1.5.2008 inviting bids from prospective bidders for the purpose of Planning, Engineering, Supply, Installation, Testing and Commissioning of infrastructure for 25 Million lines of Cellular Mobile Expansion Project Phase-VI in South Zone covering Andhra Pradesh, Karnataka, Kerala, Tamilnadu and Chennai Telecom Districts. Petitioner Company along with six other bidders including third respondent submitted their tenders for Part-III of the Tender. The second respondent had opened technical bids on 28.2.2009 in the presence of all the seven bidders. Further, second respondent issued a letter dated 2.3.2009 proposing to open the financial bid of third respondent on 6.3.2009 as it was approved. According to the petitioner, as per Clause 3 of the Special Conditions of Contract, the bidders are required to submit soft copies of the complete bid. The said clause reads as under: “A soft copy of the complete bid duly sealed shall be supplied in addition to the requirements mentioned in clause-14 and 15 of Schedule-II. In case of any discrepancies between the hard and soft copies of the bid the former shall prevail.” The bidders are required to follow the guidelines in submitting the soft copy of the bid, which reads as under: “(i) The soft copy of the technical and commercial offer shall contain product documentation with complete details to verify the compliance to the tender requirements. The product documentation shall be of the product offered and shall not be of generic in nature. (ii) The soft copy of the price schedule in the financial bid shall be in Microsoft Excel. The Excel sheet shall be set for precision of two decimals only (i.e. for paise only) and the display shall also be set accordingly. (iii) The priced card level BoM shall also be in Microsoft Excel with the precision limited to two decimals only”. Further, as per Clause 11.2(iv) of Section II of the Bid Document, bidders shall examine each and every clause including the sub-clauses, if any, which reads as under: “The bidder shall examine each and every clause including the sub-clauses, if any, of the technical specification and commercial terms and conditions of the tender and shall evaluate its offer before reflecting the extent of non-compliance in the deviation/exception statement. The bidder is required to comply with the technical specification, commercial terms and conditions of the tender document without any material deviation/exception.” In compliance with the above condition, bidders shall submit a compliance statement confirming compliances made by each bidder that they have complied with all conditions and more specifically special conditions of the tender/bid document. Non-submission of soft copy of the bid as mandated under clause 3 of Section IV of the Special Conditions is a non-compliance of the tender conditions. However, third respondent has submitted compliance report as though, it had complied with the said condition. As per Clause 19 of the tender conditions, the purchaser shall open first the Envelope-C containing bid security and then the un-priced technical and commercial bids (Envelope-A). The financial bids of only those technical and commercial bids that are determined as substantively responsive shall be opened. The purchaser shall determine the substantive responsiveness of each of the technical and commercial bid to the requirements of the tender documents. In the instant case, third respondent has not submitted soft copy of the bid as mandated under Clause (3) of Section IV of the Tender Document, however, misrepresented in the compliance report as though it had complied with the said condition. Consequently, second respondent has approved the technical bid of third respondent. When the bid of third respondent was opened, it was noticed that soft copy of the complete bid was not enclosed as required under Clause 3 of Section IV of the Tender Conditions. On noticing the same by the representatives of the other bidders, the second respondent has sealed the bid of third respondent and also recorded the objections by other bidders by obtaining their signatures on the said bid as well as in the register of attendance maintained by the second respondent. All the bidders had submitted their written objections against the opening of the price bid of third respondent, as the same was not in conformity with the tender conditions. Further, on 2.3.2009, petitioner had once again given written representation to the second respondent personally pointing out the infirmity/irregularity in the bid submitted by third respondent and requested the second respondent to return said bid. As per clause 21.6 of Section II of the Bid Document, the financial bids of only those technical and commercial bids that are determined as substantively responsive shall be opened. The financial bids of those technical and commercial bids that are determined as substantively non-responsive shall be returned to the respective bidders unopened. Considering the non-compliance by third respondent as to furnishing of soft copy of the complete bid, respondent Nos. 1 and 2 should have returned the bid of third respondent and instead, second respondent through letter dated 2.3.2009 intimated the petitioner that the competent authority had approved opening of the financial bid of third respondent and further proposed to open the financial bid of third respondent at 11.00 hours on 6.3.2009. According to the petitioner, this action of the respondent Nos.1 and 2 in opening the financial bid of the third respondent is arbitrary, illegal and in utter violation of the tender conditions, therefore the same is liable to be declared as such. A detailed counter affidavit has been filed by Respondent Nos.1 and 2 denying the allegations made by the petitioner. It is stated that writ petition does not disclose any valid or substantial grounds to grant the relief as prayed for. It is further stated that the soft copy is sought only for comparative study and it is helpful in evaluation considering the large volume of books submitted by the bidders. Typically, each bidder in Part- III submitted 4-5 volumes running into 200-300 pages each, as such, soft copy has been asked under clause 3 of Section IV. The fact that softcopy does not have much importance may be deduced from the assertion in the same clause that ‘wherever there is a discrepancy between the hard and the soft copies, the hard copy shall prevail’. This clearly asserts that the requirement of soft copy is only as an adjunct to help in the speedy evaluation of the bid and hard copy is the authoritative document. As such, non-submission of soft copy of the financial bid cannot be construed as a material deviation and does not disqualify the bidder. In respect of compliance statement, as per clause 11.2(c)(iv) the bidder shall comply with the technical requirements, commercial terms and conditions of the tender document without any material deviation, exception. It is true that the bidder M/s TVSICS has not indicated any non-compliance towards submission of soft copy. At the time of opening of the financial bid, the non-submission of the soft copy of the financial bid was noticed and the bid was re-sealed and the case was put up to Chief General Manager, Telecom, A.P. Circle as per Clause 19.5(iii) of Section II along with the representations received from some of the bidder including M/s ICOMM and M/s TVSICS submitted on 28.2.2009 itself. After careful examination of the same, the Chief General Manager has approved the opening of the financial bid of M/s TVSICS as the hard copy of the financial bid is available. The Chief General Manager is empowered to do so under Clause 19.5(iii) read with Clause 21.5 of Section II of the Tender Document. The said clauses read as under: “Clause 19.5(iii): The in-charge of the bid opening team shall mention the number of bids with name of company found unsuitable for further processing on the date of tender opening and number of representations received in bid opening minutes. If bid opening team is satisfied with the explanation of the bidder/company mentioned in their representation and feel that there is prima facie case for consideration, the in-charge of the bid opening team will submit the case for review to CGM, AP Circle as early as possible preferably on next working day and decision to this effect should be communicated to the bidder company within a week positively. Bids found liable for rejection and kept preserved on the date of tender opening will be returned to the bidders after issue of P.O. against the instant tender. Clause 21.5 : The purchaser may waive any minor infirmity or non- conformity or irregularity in a bid which doesn’t constitute a material deviation, provided such waiver doesn’t prejudice the establishment of techno-commercial parity among the bids”. Further, as per the process delineated in the tender vide clause-19 of Section II of the tender, the Envelope ‘C’ containing the Bid Security was opened first and later the Envelope ‘A’ containing the techno- commercial bid was opened. All the bidders have submitted requisite bid security and TOC recommended for evaluation of all the bids as the relevant bid securities are in order and the necessary preliminary documentation was submitted by all the bidders. The techno commercial bids were handed over to the Evaluation Committee for further evaluation of the techno commercial bids after approval of the minutes of the Tender Opening Committee by the competent authority. Subsequently, the Evaluation Committee has recommended for opening of the financial bids of all the bidders as all the bids were found to be techno-commercially responsive substantially and the same has been approved by the Chief General Manager. Further, third respondent namely, M/s TVSICS Ltd., has submitted soft copy of the techno commercial bid while the soft copy of the financial bid was not available in the sealed Envelope ‘B’ containing the financial bids. Further, in line with clause 19.5(iv) of Section II of Tender document, a letter was issued to all the bidders notifying the opening of the financial bid of M/s TVSICS on 6.3.2009 giving three clear working days to enable the desirous bidders to participate in the bid opening. The minutes of the TOC are self- explanatory. In fact, on 28.2.2009 itself, petitioner had submitted a representation and after considering the same along with representations of other bidders, second respondent has approved opening of financial bid of third respondent and the same was intimated to all the bidders including the petitioner. Clause 21.6 of Section II speaks only of opening of financial bids of those bidders whose technical and commercial bids are substantially responsive. It also says that the financial bids of those technical and commercial bids that are substantially non-responsive shall be returned unopened. Even assuming that the financial bids of M/s TVSICS are not substantially responsive, rejection of bid of M/s TVSICS cannot be taken under clause 21.6 of Section II. Once the TEC has decided that a bid is techno commercially responsive substantially, clause 21.6 ceases to operate and a financial bid cannot be disqualified under it. The required words are substantially non-responsive. Given that the present tender calls for a rollout of infrastructure in the entire South Zone comprising four Southern States i.e. Andhra Pradesh, Tamilnadu, Kerala and Karnataka and envisages supply, installation, commissioning and AMC of a wide variety of infrastructure equipment from desperate sources, mere non- compliance to any single clause in a tender of such wide requirements and complexity should not result in automatic rejection and accordingly the word substantially non-responsive has been incorporated. To disqualify a bid, it has to be demonstrated that the bid is substantially non- responsive and not merely non-responsive and that the bid suffers from severe handicaps that prohibit its evaluation and/or the project implementation. Mere non-submission of a soft copy asked, to expedite the evaluation process, cannot be construed as substantially non- responsiveness. In respect of rejection of the technical bid due to violation of clause 3 of Section IV, the bidder has submitted a soft copy of the techno commercial bid and only the soft copy of the financial bid was not submitted. As the soft copy of the financial bid is in the Envelope ‘B’ which is in the sealed condition and which is to be opened only after a bid is declared technically and commercially substantially responsive, there is no way a technical bid can be rejected due to non-submission of the soft copy and accordingly the averment that the technical bid should be rejected due to mis-representation of the non-compliance is not tenable. The decision of the Chief General Manager in opening the financial bid is after a careful examination of the provisions and procedure and therefore, the writ petition is devoid of merits and liable to be dismissed. The third respondent also filed a separate detailed counter denying the allegations made by the petitioner and inter alia stated that the special conditions of contract provided under Section-IV required that a soft copy of the complete bid, duly sealed, to be supplied by the bidder in addition to the requirements mentioned in clauses 14 and 15 of the bid. The relevant portion viz., Clause 3 of Section-IV is extracted here below: “A soft copy of the complete bid duly sealed shall be supplied in addition to the requirements mentioned in clause 14 and 15 of Section II. In case of any discrepancies between the hard and soft copies of the bid, the former shall prevail”. It is further stated that the tender document did not provide a separate checklist for submission of the bid. The third respondent has treated clause 10.2 of Section II as the checklist and submitted the original bid along with four copies of its complete bid as required under clause 14 of Section II. However, the soft copy of the bid as required under clause 3 of Section IV was omitted by oversight but third respondent never misrepresented as alleged by the petitioner. This fact came to light only on 28.2.2009 when the financial bid of third respondent was about to be opened. The bids were opened by the respondents 1 and 2 in the alphabetical order of the bidders, which resulted in third respondent’s bid being listed out as the last item. Prior to the opening of third respondent bid, when the bid submitted by Sujana Towers was opened, it was observed that there was only one original bid submitted by the said bidder and that it was not accompanied by four copies as mandated under Clause 3 of Section IV. Further, the soft copy of the bid submitted by Sujana Towers found to be at variance with the original bid submitted in hard copy. Neither the petitioner nor other tenders have raised objection, hence the respondents 1 and 2 invoked clause 3 of Section IV and disregarded the soft copy. The non-submission of four copies of the original bid was treated as not in any manner rendering the bid submitted by Sujana Towers as non-responsive. Accordingly, Sujana Tower’s price bid was opened unopposed and the price quoted by it was announced. When third respondent’s turn came, the soft copy of the bid was found missing in the form of CD, however the hard copies viz. one original and four copies were available. Immediately thereupon, the petitioner herein as well as other bidders pressed into service clause 3 of Section IV and clause 11.2 of Section II and opposed the opening and declaration of third respondent’s price bid. The case of Sujana Towers clearly manifest that all bidders, including the petitioner and also the BSNL clearly understood the clerical mistakes such as non-submission of bid copies did not disqualify the bidder. The objection raised is motivated and malafide. The third respondent immediately responded to the objections, inter alia by pointing out that the soft copy of the bid was required ‘only in addition to’ and by the very nature of the conditions of the tender document, the hard copy of the bid was to prevail over the soft copy and that non-furnishing of soft copy of the bid did not in any manner disqualify third respondent from the tender process. On receipt of third respondent’s representation, respondents 1 & 2 sealed the financial bid of third respondent without going through the price details and obtained signatures of all the bidders on the envelope. Subsequently, on 2.3.2009 third respondent received a communication from respondents 1 & 2 informing that third respondent’s bid will be opened on 6.3.2009. The decision of respondents 1 & 2 is both legally and factually unexceptionable. The third respondent’s bid fully complied with the requirements of the tender in every matter of substance. It is the contents of the original bid that has to be scrutinized for determining as to which bid is the one to be accepted as substantially complying with the requirements of the tender and is in public interest. The copies of the bid are filed only for the convenience of BSNL. As per clause 3 of Section IV of the Tender Conditions, in case of any discrepancies between the hard copy and the soft copy, the hard copy shall prevail. Considering the trivial nature of objection raised by the petitioner and the other bidders and the discretion in the matter ultimately vesting in purchaser viz. BSNL (Respondent Nos.1 & 2). Even assuming without admitting that non- furnishing of soft copy could be considered as an infirmity, non-conformity or irregularity, BSNL still had the power to waive the same under clause 21.5 in Section II of the tender document, which is extracted here below: “The purchaser may waive any minor infirmity or non- conformity or irregularity in a bid which doesn’t constitute a material deviation, provided such waiver doesn’t prejudice the establishment of techno commercial parity among the bids”. The learned Senior Counsel Sri Ravishankar Prasad appearing for the petitioner strenuously contended that non-supply of soft copy of the financial bid has to be taken as a serious lapse on the part of the third respondent in submitting its tender. When the tenders were opened on 28.2.2009 in the presence of seven bidders, it was noticed that third respondent had not submitted soft copy of the financial bid, though a hard copy was furnished. The submission of soft copy along with tender is one of the basic requirements and the third respondent having not furnished the soft copy, made a written statement that it had complied with all the requirements of the tender conditions. Furnishing of soft copy is one of the specified conditions and therefore non-compliance of the same – whether causes any prejudice or not; vitiates the tender conditions. The respondent Nos.1 and 2 have no business to approve for opening of bid of third respondent on the ground that it was substantially responsive. Further, on that ground the condition cannot be neither waived nor varied. The special conditions would prevail over general conditions. Clause 39, which is a special condition, is a mandatory clause and therefore submission of soft copy should have been part of the financial bid. The transparency, fairness and reasonableness require that respondent Nos.1 and 2 should have rejected the tender of third respondent. When there is no express power is available for condoning/waiving such condition, the tender committee ought not to have approved the same for being opened. Even if such power is available to waive, unless it is extended to all, the tender of third respondent ought not to have been approved for being opened. The object of submission of soft copy is to know the price bid. Clause 31 of Manual of BSNL would indicate that the submission of soft copy is a must. The learned Senior Counsel further drawn the attention of the Court to various provisions of tender conditions, particularly Clause-31, which reads as under: “Clause-31: While all the conditions specified in the tender document are critical and are to be complied, special attention of bidder is invited to the following clauses of the bid documents, non- compliance of any one of which shall result in out right rejection of the bid: (i) to (vi) ………………………….. (vii) Section-IV clause 39: Un-priced detailed bill of material with card level details in the techno-commercial bid and the exactly same bill of materials with card level prices in the financial bid”. Clause-39 of Section-IV of Special Conditions of Contract reads as under: “The sanctity of Sl.No. and description as appearing in the SoR shall be maintained by the bidders irrespective of whether the component forms part of the indigenous or imported items. The bidders shall ensure that rates quoted for individual items are reasonable for ordering these items separately. Although a separate price schedule has been called for as per prescribed format specified in Section-VII of this document, it is further required of the bidders to provide a consolidated format in a separate excel sheet of the complete quote in accordance with details appearing in the schedule of requirements. A soft copy of detailed bill of material shall also form part of financial bid”. and submitted that the Special Conditions of Contract shall supplement the notice inviting tenders as contained in Section-I and wherever there is a conflict, the provisions of special conditions would prevail. Further, under Clause-3, a softcopy of the completed bid duly sealed shall be supplied in addition to the requirements mentioned in Clause 14 and 15 of Section-II. While referring to the language imported in the special conditions of contract, the learned Senior Counsel emphasized that deviation of submission of soft copy cannot be taken leniently as is done by the respondent Nos.1 and 2 in the instant case. The non-submission of soft copy itself has resulted in prejudice for participating in the tender without furnishing proper information. The learned counsel further submitted that in various tender notifications issued by BSNL at Delhi, it had made clear that furnishing of soft copy is a must