1 CWP 3134/2006, 3812/2006 Gopal IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR ORDER 1. S.B. CIVIL WRIT PETITION NO.3134/2006 M/s.Promuk Hoffman International Ltd. Versus The State of Rajasthan and others 2. S.B. CIVIL WRIT PETITION NO.3812/2006 HIND INDUSTRIES LIMITED VERSUS STATE OF RAJASTHAN AND OTHERS Date of order ::: August 12, 2008 HON'BLE MR.JUSTICE PREM SHANKER ASOPA Mr.Paras Kuhad, Mr.Manish Sharma and Mr.Pancham Surana, for the petitioners Mr.B.P.Agrawal, Advocate General with Mr.RP Agrawal, for the State Mr.A.K.Sharma, for the Intevener REPORTABLE BY THE COURT (1) Since common questions of fact and law are involved in these two writ petitions, therefore, both have been clubbed, heard and are being decided together. (2) By S.B.Civil Writ Petition No.3134/2006, the petitioner has challenged the validity of the order dated 10.4.2006 (Anx.11) by which the respondent No. 2 has disqualified the petitioner from participating in the financial bid. The petitioner company has prayed for production of the entire record of the said Bid and notice for invitation of bid for High Security Registration Plates (in short `HSRP') and quashing of the said order dated 10.4.2006 with the further prayer that the direction be issued to the respondents to treat the 2 CWP 3134/2006, 3812/2006 Gopal petitioner company as qualified and simultaneously allow it to take part in further process of tender. The petitioner company has also prayed that the respondents be restrained from proceeding further in the tender process by awarding the contract to any other party and issuing the Letter of Intent in favour of any party. (3) Briefly stated, the relevant facts of the case are that the petitioner, which is a public limited company, entered into joint venture with M/s.EHA Hoffmann KG and SIEGEM EISS, West Germany and submitted its tender for HSRP, the NIT for which was issued by the respondents on 20.4.2005. It is stated in the writ petition that the joint venture partner has been into manufacturing and supply of HSRP for almost 40 years and have been operating in more than 30 countries worldwide. The last date for submission of the Bid was 25.5.2005; date for opening of the technical bid was the same date as that of submission of the bids i.e. 25.5.2005 and the validity of the bid was 90 days from the date of opening of the technical bid; the technical bids were opened on 25.5.2005 and the petitioner company was disqualified in the technical bid on 10.4.2006. In between, there was correspondence with the petitioner company which has been placed on record with the further averment that the documents submitted by the petitioner-company with the tender fulfilled the eligibility criteria under Clause 1.6 and Rule 50 of the Rajasthan Motor Vehicle Rules (in short `the 3 CWP 3134/2006, 3812/2006 Gopal Rules'). The petitioner-company has also stated in the writ petition that during the verification as per the check list, the respondents did not find any fault with the petitioner company as well as the bid submitted by it. However, on 6.9.2005 (Anx.7), the petitioner was informed to explain how it was eligible for the bid as per the requirement of the bid document particularly with regard to the joint venture document executed by the constituent of the petitioner. Reply to the said letter was given on 10.9.2005 (Anx.8) and no further enquiry was raised with regard to the said issue which clearly revealed that the respondents had accepted the explanation submitted by the petitioner company with regard to the joint venture. Further query was raised by the respondents/Tender Evaluation Committee on 12.9.2005 relating to experience certificates, reply of which was given by the petitioner on 14.9.2005 (Anx.9) and details along with the desired invoice and translated documents and certificates in order to demonstrate that it has complied with the eligibility criteria pertaining to experience as desired in the bid document. Thereafter, suddenly on 10.4.2006, the respondent No. 2 informed the petitioner company about its disqualification in technical bid for HSRP with the further information that the refund order of earnest money deposited by the petitioner along with the bid have also been issued vide order dated 10.4.2006. Although in the order dated 10.4.2006 no specific reason has been assigned but it is 4 CWP 3134/2006, 3812/2006 Gopal stated in the writ petition that the reason is not fulfilling the experience criteria as required under the tender condition No.1.6 and Rule 50 of the Rules. (4) By SBCWP No.3812/2006, the petitioner M/s. Hind Industries Limited, has challenged the validity of the order dated 10.4.2006 (Anx.4) whereby the petitioner was informed that it was not found qualified in Technical bids and prayed for setting aside the same. The petitioner has also prayed for other ancillary reliefs. (5) The facts, in brief of the aforesaid writ petition, as per the petitioner M/s.Hind Industries Limited, are that pursuant to the NIT dated 20.4.2005 the petitioner submitted its tender for High Security Registration Plates (HSRP) on 25.5.2005. On 6.9.2005 the respondent No.2 wrote letter to the petitioner asking to appear before the duly constituted Committee on 12.9.2005 on which date the petitioner appeared in person and clarified the queries so made. On 13.9.2005, the petitioner again wrote letter to the respondents communicating them all the facts. As aforesaid, vide letter dated 10.4.2006, the respondents rejected the technical bid of the petitioner. It is in these circumstances that the petitioner has filed the writ petition. (6) The legal issues on the basis of which the aforesaid relief has been claimed by M/s.Hind Industries Limited (SBCWP No.3812/2006) are common, therefore, there is no need to reiterate the same again by dealing with this 5 CWP 3134/2006, 3812/2006 Gopal particular case. (7) The respondents have filed reply to the writ petition and referred to the amended Rule 50 of the Rules, Motor Vehicles (New High Security Registration Plates) Order, 2001 (in short `Order, 2001') purported to be issued in exercise of the powers under sub section (3) of Sec. 109 of the Central Motor Vehicles Act, 1989; the guidelines dated 6.3.2002 and the mandatory requirement of the tender condition 2.19.2 to substantiate their submission stated in the reply that the petitioner company was not found to be technically qualified in evaluation process as it was not fulfilling the experience of working in the field of high security registration plates in minimum number of four countries having used at least one of the security features as mentioned in Rule 50 of the Rules and Order, 2001. Otherwise also, the experience certificates were not duly issued by the user agency/authority in English language. The respondents have also stated in their reply that the certificates of Pakistan, Russia, Germany, Israil and Estonia were not in conformity with the aforesaid mandatory requirement and the certificates of Malta and Peru were found in order. The mandatory requirement of the tender condition No. 1.6 is that the experience certificate should have been given by the user agency/authority of at least four countries whereas the petitioner company was having experience certificates from two countries only. (8) It would be relevant to mention here that during the 6 CWP 3134/2006, 3812/2006 Gopal pendency of the writ petition, the Letter of Intent was issued on 24/25th April, 2006 in favour of M/s. SHIMNIT UTSCH India Pvt. Ltd. (in short `M/s. SHIMNIT UTSCH') and an application under Article 226 of the Constitution of India read with Order 1 Rule 10 CPC was filed by the said M/s. SHIMNIT UTSCH for impleadment. However, M/s. SHIMNIT UTSCH was allowed to intervene in the matter. It is also further relevant to mention here that the tender process has not been finalized by awarding contract in favour of the Intervener because of the pendency of this writ petition . (9) Submission of Mr. Paras Kuhad, counsel for the petitioner company, is that the impugned order dated 10.4.2006 of holding the petitioner company disqualified for the technical bid is a non-speaking order and further no reason for rejection of the aforesaid bid is available on the record. As regards the experience certificate, the condition was not mandatory and it was open for the respondents to negotiate with the petitioner company which was done to a certain extent but subsequently on the basis of the non- fulfillment of the requirement of experience certificate, which is not mandatory in nature, the petitioner company has been arbitrarily and unlawfully disqualified from participating in the financial bid. (10) After intervention of M/s. SHIMNIT UTSCH, counsel for the petitioner company has further developed his submission that the petitioner company has been disqualified with a view 7 CWP 3134/2006, 3812/2006 Gopal to favour M/s. SHIMNIT UTSCH which was even disqualified for submission of the tender on account of conviction of the Director for serious offence of man's slaughter although the said judgment was subsequently reversed but in the SLP filed by the State, leave has been granted and that too, on higher rate. Therefore, the tender of M/s. SHIMNIT UTSCH ought to have been outrightly rejected. Mr. Kuhad has further submitted that the principles of natural justice have not been followed in this case by not granting an opportunity to the petitioner company to further clarify the experience certificates submitted by it. Lastly, Mr. Kuhad has submitted that the Court has orally called for the record and therefore, he may be allowed to inspect the record and then allow him to re-argue the case. In support of the aforesaid submission, counsel for the petitioner has placed reliance on the following judgments: (A) ARBITRARINESS IN GOVERNMENT ACTIONS 1. AIR INDIA LTD. V. COCHIN INTERNATIONAL AIRPORT LTD. AND OTHERS (2000) 2 SCC 617. 2. DUTTA ASSOCIATES PVT. LTD. V. INDO MERCHANTILES PVT. LTD AND OTHERS (1997) 1 SCC 53. 3. NEW HORIZONS LIMITED AND ANOTHER V. UNION OF INDIA AND OTHERS (1995) 1 SCC 478. 4. FOOD CORPORATION OF INDIA V. M/S.KAMDHENU CATTLE FEED INDUSTRIES (1993) 1 SCC 71. 5. CONSUMER ACTION GROUP AND ANOTHER V. STATE OF T.N. AND OTHERS (2000) 7 SCC 425. 6. STERLING COMPUTERS LIMITED V. M/S.M & N PUBLICATIONS LIMITED AND OTHERS (1993) 1 SCC 445. 7. HINDUSTAN PETROLEUM CORPN. LTD. V. DARIUS SHAPUR CHENAI AND OTHERS (2005) 7 SCC 627. 8. ONKAR LAL BAJAJ AND OTHERS V. UNION OF INDIA AND ANOTHER (2003) 2 SCC 673. 8 CWP 3134/2006, 3812/2006 Gopal 9. ASSISTANT COLLECTOR OF CUSTOMS V. CHARAN DAS MALHOTRA (1971) 1 SCC 697. 10.DELHI ADMINISTRATION V. MANOHAR LAL (2002) 7 SCC 222. 11.STATE OF ORISSA V. DHANIRAM LUHAR (2004) 5 SCC 568 12.INDIAN RAILWAY CONSTRUCTION CO. LTD. V. AJAY KUMAR (2003) 4 SCC 579. 13.UNION OF INDIA AND OTHERS V. DINESH ENGINERING CORPORATION AND ANOTHER (2001) 8 SCC 491. 14.WORKMAN OF MEENAKSHI MILLS LTD. AND OTHERS V. MEENAKSHI MILLS LTD. AND ANOTHER (1992) 3 SCC 336. 15.ASSOCIATION OF REGISTRATION PLATES V. UNION OF INDIA AND OTHERS (2005) 1 SCC 679. 16.BOMBAY DYEING AND MFG. CO. LTD. V. BOMBAY ENVIRONMENTAL ACTION GROUP AND OTHERS (CIVIL APPEAL NO.1519/2006 SLP (CIVIL) NO.23040 OF 2005 DECIDED ON 7.3.2006. 17.DOVE INVESTMENTS (P) LTD. AND OTHERS VERSUS GUJARAT INDUSTRIAL INVESTMENT CORPN. AND ANOTHER (2006) 2 SCC 619. 18.J.P.SRIVASTAVA AND SONS (P) LTD. AND OTHERS VS. GWALIOR SUGAR CO. LTD AND OTHERS (2005) 1 SCC 172. 19.PRATAP SINGH V. SHRI KRISHNA GUPTA AND OTHERS (AIR 1956 SC 140). 20.SHARIF-UD-DIN V. ABDUL GANI LONE (1980) 1 SCC 403. 21.MANGALORE CHEMICALS AND FERTILIZERS LIMITED V. DEPUTY COMMISSIONER OF COMMERCIAL TAXES AND OTHERS 1992 (SUPP) 1 SCC 21. 22.LAXMI SALES CORPN. V. BOLANGIR TRADING CO. AND OTHERS (2005) 3 SCC 157. 23.M/S. GAMMON INDIA LTD. AND OTHERS V. UNION OF INDIA AND OTHERS (1974) 1 SCC 596. 24.THE AHMEDABAD ST. XAVIER'S COLLEGE SOCIETY AND ANOTHER V. STATE OF GUJARAT AND ANOTHER (1974) 1 SCC 717. 25.S.SHANMUGAVEL NADAR V. STATE OF T.N. AND ANOTHER (2002) 8 SCC 361. 26.HEMLATHA GARGYA V. COMMISSIONER OF INCOME TAX AP AND ANOTHER (2003) 9 SCC 510. 27.GAON SABHA AND ANOTHER V. NATHI AND OTHERS (2004) 9 CWP 3134/2006, 3812/2006 Gopal 12 SCC 555. 28.R.K. JAIN V. UNION OF INDIA AND OTHERS (1993) 4 SCC 120. 29.PEOPLE'S UNION FOR CIVIL LIBERTIES AND ANOTHER V. UNION OF INDIA AND OTHERS (2004) 2 SCC 476. (B) RIGHT OF INSPECTION OF RECORD IN COURT (1) (1981) SUPP. SCC 87 (2) R.K.JAIN V. UNION OF INDIA AND OTHERS (1993) 4 SCC 120. (3) PEOPLE'S UNION FOR CIVIL LIBERTIES AND ANOTHER VERSUS UNION OF INDIA AND OTHERS (2004) 2 SCC 476. (4) SRI RAMBHOTLA RAMANNA V. GOVT. OF A.P. (AIR 1971 AP 196). (11) Submission of learned Advocate General is that the petitioner company was not fulfilling the mandatory requirement of tender condition No.1.6.6 and Rule 50 of the Rules regarding having experience certificates of four countries given by the user agency/authority. Although the principles of natural justice are not applicable even in case of desirable condition of the tender but keeping in view the principles of justness and fairness in the process, sufficient opportunity was given to the petitioner to prove that they fulfilled the eligibility but the eligibility conditions were not fulfilled. Otherwise also, the Tender Evaluation Committee has also considered the documents of experience submitted by the petitioner company, still the mandatory conditions were not fulfilled. Therefore, there was nothing wrong in disqualifying the petitioner. In support of his submissions, learned Advocate General has placed reliance on the 10 CWP 3134/2006, 3812/2006 Gopal following judgments: 1. Association of Registration Plates V. Union of India and others (2005) 1 SCC 679. 2. M/s.Promuk Hoffman International Ltd V. State of Goa and others (Writ Petition No.432/2005) decided on 14.2.2006 by the High Court of Bombay at Goa. (12) Mr.A.K.Sharma has supported the submissions made by the learned Advocate General and further submitted that M/s. SHIMNIT UTSCH, the intervener, is fully qualified as per the eligibility clause. One of the Directors of the Intervener Company Mr. Nitin Shah was convicted on 3.7.2006 and the date of notification providing disqualification of conviction is 12.6.2006 but before that the entire process was completed by issuing Letter of Intent on 24/25th April, 2006 and consequential orders were to be issued. The said conviction was set aside in appeal and Nitin Shah was acquitted on 22.2.2007. Therefore, the said conviction dated 3.7.2007 which was not the disqualification on the day of NIT i.e. 25.5.2005; date of opening of the financial bid i.e. 10.4.2006 and issuance of Letter of Intent i.e. 24/25th April, 2006 and is of no consequence. Otherwise also, the said conviction has been set aside and the Director Nitin Shah has been acquitted. Therefore, the same cannot be made the basis even for withdrawal of the Letter of Intent. Counsel further submits that the intervener company has been rightly awarded the contract. (13) I have gone through the record of the writ petition and 11 CWP 3134/2006, 3812/2006 Gopal further considered the rival submissions of counsel for the parties and the Intervener. (14) I have also gone through record of the tender proceedings produced by the respondents before me and am of the view that the ground of rejection of the technical bid of the petitioner referred in the reply to the writ petition and mentioned in the record are the same. All the relevant tender documents/other correspondence/documents have been produced by the parties and the Intervener, therefore, there is no need to even refer the record in detail except recommendation of Tender Evaluation Committee. (15) Before dealing with the submissions of counsel for the parties, with reference to the citations on relevant legal issues, it would be worthwhile to quote the relevant provisions of law. (16) Relevant portion of Rule 50 of the Central Motor Vehicle Rules, 1989 amended on 28.3.2001 and further amended on 24.9.2001 and 21.1.2004 w.e.f. 1.01.2004, is as follows: Amended Rule 50 of the Rules, 1989 as on 1.01.2004. “50. Form and manner of display of registration marks on the motor vehicles.- (1) On or after commencement of this rule, the registration mark referred to in sub-section (6) of Section 41 shall be displayed both at the front and at the rear of all motor vehicles clearly and legibly in the form of security license plate of the following specifications, namely:- (i) the plate shall be a solid unit made of 1.0 mm aluminum conforming to DIN 1745/DIN 1783 or ISO 7591. Border edges and corners of the plate shall be rounded to avoid injuries to the extent of approx.10 mm and the plates must have the an embossed border. The plate shall be suitable for hot stamping and reflective sheet has to be guaranteed for imperishable nature for minimum five years. The fast colouring of legend and border to be done by hot stamping; 12 CWP 3134/2006, 3812/2006 Gopal (ii)The plate should bear the letters `IND' in blue colour on the extreme left center of the plate. The letter shouldbe one fourth of the size of letters mentioned in rule 51 and should be buried into the foil or aplied by hot stamping and should be integral part of the plate; (iii)each plate shall be protected against counterfeiting by applying chromium-based hologram, applied by hot stamping. Stickers and adhesive labels are not permitted. The plate shall bear a permanent consecutive identification number of minimum seven digits, to be laser branded into the reflective sheeting and hot stamping film shall bear a verification inscription; (iv)apart from the registration marks on the front and rear, the third registration mark in the form of self- destructive type, chromium based hologram sticker shall be affixed on the left-hand top side of the windshield of the vehicle. The registration number, registering authority etc. shall be printed on the sticker. The third registration mark shall be issued by the registering authorities/approved dealers of the licence plates manufacturer along with the regular registration marks, and thereafter if such sticker is destroyed it shall be issued by the licence plate manufacturer or his dealer; (v)the plate shall be fastened with non-removable/non- reusable snap lock fitting system on rear of the vehicle at the premises of the registering authority; The licence plates with all the above specifications and the specified registrations for a vehicle shall be issued by the registering authority or approved the licence plates manufacturers or their dealers. The Central Road Research Institute, New Delhi or any of the agency authorised by the Central Government shall approve the licence plates manufacturers to the above specifications. (vi) the size of the plate for different categories of vehicles shall be as follows: For two and three wheelers 200x100 mm For light motor vehicles/ 340x200 mm passengers cars For medium commercial vehicles 340x220 mm heavy commercial vehicles and Trailer/combination [Provided that this sub-rule shall apply to already registered vehicles two years from the date of commencement. Provided further that the size of the registration plates for agricultural tractors shall be as follows:- Front 285 x 45 mm Rear 200x100 mm] (2) In the case of motor cycles the registration mark in the front shall be displayed parallel to the handle bar on any part of the vehicle including mudguard facing the front instead of on a plate in line with the axis of the 13 CWP 3134/2006, 3812/2006 Gopal vehicle]. Provided that - (a)the registration mark exhibited at the rear of a transport vehicle shall be affixed to the vehicle on the right hand side at the distance not exceeding one meter from the ground as may be reasonably possible having regard to the type of the body of the vehicle; (b) the registration mark shall also be painted on the right and left side on the body of the vehicle in the case of a transport vehicle; (c) the registration mark shall also be painted and exhibited on the partition provided between the driver and the passengers, facing the passengers seats or, where there is no such partition, on the front interior of the vehicle near the roof to the left side of the driver's seat facing the passengers seats in the case of a stage carriage or a contract carriage and in the case of a motor cab or a taxi cab it shall be sufficient if the registration mark is painted on the dash-board. (d) the letters of the registration mark shall be in English and the figures shall be in Arbic numerals and shall be shown - (A) in the case of transport vehicles in Black colour on Yellow background; and (B) in other cases, in Black Colour on White background; the registration mark on the trailer shall be exhibited on the left hand side in Black colour on yellow background. In addition, the registration mark on the drawing vehicle shall be exhibited on the trailer also and this shall be done on the right hand side at the rear of the trailer or the last trailer as the case may be, in Black Colour on retro- reflective type Yellow background: Provided that where provisions of this clause have not been complied with in respect of motor vehicles, on or before the commencement of the Central Motor Vehicles (8th Amendment) Rules, 2001, then the provisions shall be complied with, - (i) in respect of transport vehicle, on or before 1st February, 2002; (ii)in other cases, on or before 1st July, 2002.].....” (17) For notifying certain standards in respect of the new system of high security registration plates for motor vehicles and the process used by a manufacturer or vendor for 14 CWP 3134/2006, 3812/2006 Gopal manufacturing or supplying such plates with reference to the amendments made in the Central Motor Vehicle Rules, 1989 by the Central Motor Vehicles (1st Amendment) Rules, 2001, in exercise of powers conferred by sub-section (3) of Sec.109 of the Motor Vehicles Act, 1988, the Central Government has framed the Motor Vehicles (New High Security Registration Plates) Order, 2001. (18) The tender is in five Parts – Section-I relates to Instructions to the Bidder, Section-II relates to Preparation of the Bid, Section-III relates to Scope of work, Section IV relates to the terms and conditions and Section-V relates to the specifications of the HSRP and then Annexures. (19) To decide the present controversy, Section-I and Section-II are relevant. The relevant conditions – 1.2.4; 1.6.6; 2.3.1 and 2.19.2 of Section-I of the notice inviting tender for high security registration plates are as follows: “1.2.4 Since High Security Registration Plate has been introduced by the Ministry of Shipping, Road Transport and Highways, Department of Road Transport and Highways, Government of India as a highly sensitive product for detection and prevention of crime, to check counterfeiting and duplication of Registration Plates by incorporating high security features. It is therefore, intended to select a manufacturer who would have the required experience, expertise and exposure for such complex work in India and/or abroad, so that the security objective of the scheme is not diluted or vitiated. The scheme encompasses strictest adherence to High Security features and imposes accountability on the successful bidder.” (emphasis supplied) “1.6.6 The bidder should have experience of working in the field of High Security Registration Plates in a minimum number of four countries having used at least any of the security features as mentioned in Rule 50 of the Central Motor Vehicle Rules, 1989 i.e. - 15 CWP 3134/2006, 3812/2006 Gopal i) Permanent Consecutive Identification Number to be laser branded into the reflecting sheeting. ii) Chromium Based Hologram applied by hot stamping iii) Chromium based self destructive type third registration mark hologram sticker. iv) Hot stamping film bearing a verification inscription. v) Non removable/Non usable Snap lock fitting system. The bidder shall submit experience certificate duly issued by the user agency/authority in English language only (duly authenticated). If the original certificates issued by user agency/authority in other than English language, then authenticated English version of the certificate shall be submitted along with the copy of original certificates. (emphasis supplied) 2.3.1 Application on the letter head of the bidder as per Annexure III accompanied with enclosure Annexure IV to Annexure X as per list given below. LIST OF ANNEXURES IV TO X General