1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (LG.) NO. 632 OF 2010 Rajendra G. Shah, ] Sole Proprietor of ] M/s. Rajendra G. Shah & Company ] having address at 005, Hinal Heritage, ] S.V.P. Road, Borivali West, Mumbai 400 092 ] ...Petitioner Versus 1. Municipal Corporation of Greater Mumbai, ] having its office at Mahapalika Bhavan, ] Mahapalika Marg, Fort, Mumbai 400 001 ] 2. The Commissioner, ] Municipal Corporation of Greater Mumbai, ] having its office at Mahapalika Bhavan, ] Mahapalika Marg, Fort, Mumbai 400 001 ] 3. The Chief Engineer (Road) ] Municipal Corporation of Greater Mumbai, ] having its office at Mahapalika Bhavan, ] Mahapalika Marg, Fort, Mumbai 400 001 ] ...Respondents Mr. M.M. Vashi i/by M/s. M.P. Vashi & Associates for the Petitioner Mr. E.P. Bharucha, Senor Advocate, with Ms. V.S. Gharpure, for the Respondent/MCGM WITH WRIT PETITION (LG.) NO. 673 OF 2010 1. Crystal Construction, ] a registered partnership firm, having address at 103, Ankia Apt., 53, Nehru Rd. Vile Parle (East), ] Mumbai 400 057 ] 2 2. D.K. Infrastructure Pvt. Ltd., ] a private limited Company having address at ] 16, Shah Sadan, Bhavani Shanker Road, ] Dadar (West), Mumbai 400 028 ] 3. Vasantbhai M. Shah, ] Proprietor of Vasant Construction Company India, ] having address at 33-37, Dhanji Estate, ] 1st Floor, Chandrabhavan, Mumbai 400 003 ] ...Petitioners Versus 1. Municipal Corporation of Greater Mumbai, ] through the Municipal Commissioner, ] Mahapalika Bhavan, Mahapalika Marg, Fort, ] Mumbai 400 001 ] 2. The Addl. Commissioner, ] Municipal Corporation of Greater Mumbai, ] having its office at Mahapalika Bhavan, ] Mahapalika Marg, Fort, Mumbai 400 001 ] 3. The Chief Engineer (Roads, Traffic & Bridges) ] Mahapalika Bhavan, ] Mahapalika Marg, Fort, Mumbai 400 001 ] ...Respondents Mr. A.Y. Bookwala, Senior Advocate, i/by Ms. Rajeshree Gadhavi for the Petitioners Mr. E.P. Bharucha, Senor Advocate, with Ms. V.S. Gharpure, for the Respondent/MCGM WITH WRIT PETITION (LG.) NO. 682 OF 2010 1. Prime Developers, ] a partnership firm registered under the provisions ] of the Partnership Act, 1932 and having its ] 3 registered office at 36, Dhanji Street, ] Mumbai 400 003 ] 2. Bharati Ketan Shah ] of Mumbai Indian Inhabitant, having her address ] at 36, Dhanji Street, Mumbai 400003 ] ...Petitioners Versus 1. Mumbai Municipal Corporation, ] through the Municipal Commissioner, ] having his office at Mahapalika Road, ] Mumbai 400 001 ] 2. The Addl. Commissioner (City), ] having his office at Mahapalika Road, ] Mumbai 400 001 ] 3. The Chief Engineer (Roads, Traffic & Bridges) ] having his office at Mahapalika Road, ] Mumbai 400 001 ] 4. Deputy Chief Engineer (Roads) City, ] having his office at Kumar Co-op Hsg. Society, ] 1st Floor, Patthe Bapurao Marg, Opp. Navjeevan ] Co-op. Housing Society, Grant Road (E), ] Mumbai 400 007 ] ...Respondents Mr. S.U. Kamdar, Senior Advocate, with Ms. Pooja Patil and Ms. Jyoti Ghag i/by M/s. Thakore Jariwala & Associates for the Petitioners Mr. E.P. Bharucha, Senor Advocate, with Ms. V.S. Gharpure, for the Respondent/MCGM AND WRIT PETITION (LG.) NO. 731 OF 2010 NG Projects Limited, ] a Company incorporated in accordance with ] the provisions of the Companies Act, 1956 ] 4 through its Director, Hanvant Singh J. Ranawat, ] and having its office at NG Circle, Mehtapura, ] Himmatnagar 383 001, Dist. Sabarkantha, ] Gujarat State ] ...Petitioners Versus 1. Municipal Corporation of Greater Mumbai, ] incorporated in accordance with ] the provisions of the Bombay Municipal ] Corporation Act, 1888 and having its office ] at Mahapalika Bhavan, Mahapalika Marg, Fort, ] Mumbai 400 001 ] 2. Deputy Chief Engineer (Road) City, ] having his office at Kamgar Co-operative ] Housing Society Limited, First Floor, PB. Road, ] Patthas Bapurao Road, Opp. Navjivan ] Co-operative Housing Society Limited, ] Grant Road, Mumbai 400 007 ] ...Respondents Mr. D.D. Madon, Senior Advocate, i/by Mr. Bipin Joshi for the Petitioners Mr. E.P. Bharucha, Senor Advocate, with Ms. V.S. Gharpure, for the Respondent/MCGM. CORAM: J.N. PATEL AND A.P. BHANGALE, JJ. DATE: MARCH 31, 2010 JUDGMENT (Per J.N. Patel, J.):- All these petitions are filed by contractors, who have participated in the tender, which was invited by the respondent- Municipal Corporation of Greater Mumbai in respect of 5 AC-77 Civil Works Contract (C.W.C.) for reinstatement of trenches taken by various utilities, repairs to potholes and spot repairs for the period up to 31st March, 2012. Though the petitioner-contractors were found eligible for participating in the tender, their tenders came to be rejected by the Tender Evaluation Committee as ‘non-responsive’ tenders after packet ‘B’ came to be opened and scrutinised, and were informed accordingly, specifying the reason. In view of the fact that their tenders have been found to be ‘non-responsive’ on a common ground that all these petitioner- contractors did not have the equipment capability, and particularly the one required in respect of owning equipment and machinery as specified in Proforma V-A, therefore, all these Writ Petitions can be disposed of by a common judgment and order. 2. The respondent-Municipal Corporation of Greater Mumbai invited tenders from firms registered on the approved list of Municipal Contractors in Class ‘A’ and above in Category C-III and from the contractors having equivalent class and category registered with Public Works Department and other Government Organisations in India vide Tender Notice No. ChE/633/SR/Rds dated 6 2nd February, 2010. The Tender Notice clearly provided that tender documents, duly filled, must be submitted to the office of Dy. Chief Engineer (Rds.) City up to 1.00 p.m. on the date of submission in the form of three packets, i.e., Packets ‘A’, ‘B’ and ‘C’. It was specifically provided in the Instructions to Tenderers that all tenderers shall provide Qualification Information, as necessary to enable their post- qualification and that to qualify for a package of contracts made up of this and other contracts for which tenders are invited, the tenderers must demonstrate having experience and resources sufficient to meet the aggregate of the qualifying criteria for the individual contracts. Thereafter, it provided Post Qualification Criteria as specified in the Tender Notice. The tenders of all the petitioners, except that of the petitioner in Writ Petition (Lodging) No. 632 of 2010, came to be rejected on a common ground of the petitioners lacking equipment capability, and particularly for not furnishing information about ownership, or assured access (through hire, lease purchase agreement or other commercial means) to key items of equipment (Proforma V-A, V-B and V-C) (Original) along with Packet ‘B’, as required by clause 3.24(g). 7 3. The procedure for tender-opening and evaluation has been specified in the bid document which provided as follows:- “3.30 Deadline for Submission of Tender - a) Tender copy shall be sold up to 1.00 p.m. on the date specified and shall be received up to 1.00 p.m. on the due date of submission at the office as specified in the tender notice. Late tenders or telegraphic tenders shall not be accepted. During the opening of the tender Packets, the tenderers/their authorized representative may attend. Packet ‘A’ will be opened after 2.00 p.m. on the same day. On opening Packet ‘A’, if it is found that tenderers have not enclosed requisite E.M.D., then the tenderers shall be treated as non-responsive. Similarly, if the tenderers have not submitted required documents other than E.M.D. in packet ‘A’, then the tenderers shall be intimated to comply with the said requirements within three days and if the tenderers fail to do so, then 10% amount of the E.M.D/SD paid by them shall be recovered & the tender shall be treated as non- responsive. Thereafter, the Packet ‘B’ of the remaining tenderers shall be opened. The tenderer will have to submit information / clarification / documents if required after opening of packet ‘B’ within three days of being asked in writing to do so. Information in Packet ‘B’ will be scrutinized & evaluated by the Tender Evaluation Committee and non-responsive tenderers will be informed accordingly, specifying the reasons and they will be requested to collect the unopened Packet ‘C’ from the Office. Packet ‘C’ of only the eligible and responsive tenderers shall be opened on scheduled date, the price, and other relevant details shall be read out. 8 Any change in date & time of opening of Packets ‘A’, ‘B’ & ‘C’, as specified in the tender notice, will be displayed at Divisional / Head Office. The Corporation reserve the right to reject all or any of the tenders without assigning any reason.” 4. Crystal Construction, D.K. Infrastructure Pvt. Ltd. and Vasantbhai M. Shah, Partner of Vasant Construction Company India, have filed Writ Petition (Lodging) No.673 of 2010. The petitioners contended that after going through clause 3.24(g), it is clear that and is so understood by the petitioners that in Packet ‘B’, the petitioners are required to give information about ownership or assured access in respect of the equipments mentioned in Proforma V-A, V-B and V-C, and it is their case that in fact, when the tenders for the same work for the period 2008 to 2010 were invited in the year 2008, the said condition of submitting documents regarding ownership of the equipment came to be modified by issuing a Corrigendum by directing the tenderers to show ownership or assured access of the required equipment, and, therefore, the petitioners were justified in reading clause 3.24(g) in the background of the tender of 2008, and therefore, the petitioners submitted information about assured access of the required equipment. It is the contention of the petitioners that 9 when the petitioners received letters dated 10th to 12th March, 2010 from the respondents, calling upon the petitioners to submit documentary evidence, the petitioners have submitted the required documents; but as they did not receive any further reply from the respondents, informing the petitioners whether the documents submitted by them were sufficient or not, the petitioners presumed that they have complied with all the terms and conditions of the tender, and accepted that after the information given in Packet ‘B’, as required under clause 3.30(c) is scrutinized and evaluated by the Tender Evaluation Committee, the non-responsive tenderers will be informed the reason due to which the tender is held to be ‘non-responsive’; and, therefore, the petitioners contended that neither the information contained in Packet ‘B’ submitted by the petitioners is scrutinised or evaluated by the Tender Evaluation Committee, nor the petitioners are informed the reasons as to why the petitioners’ tenders are treated as ‘non-responsive’; and it is only on 19th March, 2010, when Packet ‘C’ was to be opened, instead of opening Packet ‘C’, the office of respondent No.3 displayed a notice informing the tenderers that the respondents will do physical verification of the machinery of responsive tenderers, and only 10 thereafter, Packet ‘C’ of responsive tenderers will be opened on 26th March, 2010 at 11.30 a.m. The petitioners found that, along with the said notice, the respondents have displayed a list of 27 responsive tenders, which does not contain the names of the petitioners. 5. It is further contended by the petitioners that even at that stage, no reasons are given for treating the tenders of the petitioners as ‘non-responsive’. Therefore, the petitioners approached the Municipal Commissioner and the Chief Engineer, the Director and other concerned officers of the respondents, apprising them that the petitioners’ tenders are wrongly treated as ‘non-responsive’; but as the officers of the respondents refused to change their decision, the petitioners have approached this Court. 6. The petitioners have also contended that assuming the Court comes to a conclusion that under clause 3.24(g), the petitioners and other contractors are required to give documents showing the ownership of certain equipment, then it is submitted that the said condition is arbitrary and is violative of Article 14 of the Constitution of India and also violative of the Competition Act, 2002, 11 particularly in the backdrop that the respondents have invited other such tenders for carrying out work on major corridors (major roads), which are worth more than Rs.20 crores each, whereas the present tender for each ward is fixed at Rs.5 crores; and in the tender of Rs.20 crores, the respondents have not insisted on the contractors producing documents to show ownership of the equipment. However, in the present tender, the condition regarding ownership of the equipment is included in order to restrict the work amongst a few contractors; and they have also cited the petition filed by one Rajendra G. Shah [Writ Petition (Lodging) No.632 of 2010], seeking an injunction restraining the respondents from relaxing the condition regarding the ownership of the required equipment in support of their contention; and it is the case of the petitioners that due to the filing of the petition by the said Rajendra G. Shah, the respondents have treated the petitioners and other contractors as ‘non-responsive’. It is, therefore, the contention of the petitioners that the respondents have resorted to a procedure, which has not been followed before, and is not prescribed in the tender also, since ownership of the required equipment was not mandatory as per the tender document, and there is no question of physically verifying the existence of the 12 required equipment and ownership thereof, and, therefore, this Court should direct the respondents to open Packet ‘C’ of the petitioners and other similarly situated contractors and consider the tenders of the petitioners on merits and on the basis that the tenders are responsive. 7. The other petitioners, i.e., Prime Developers and Bharati Ketan Shah [Writ Petition (Lodging) No. 682 of 2010], have come up with the case that in the bid documents, the condition of ownership of the equipment is arbitrary and unreasonable, as the said equipment were required for particular project and the petitioners will be saddled with additional financial liability if they are required to own the equipment. It is further contended that it is only in case of equipment and machinery in Proforma V-A which are required to be owned; but in respect of the remaining equipment, respondent No.1 has provided for an option of the tenderer not requiring to own the same, but mere proof of having access to the equipment through lease, hire or any other similar means; and, therefore, the differential placing of condition upon such equipment which are required for the 13 same work is arbitrary and unreasonable; and that respondent No.1 has failed to provide any basis for the said differentiality. 8. It is further contended that the respondents are not even accepting the ownership proof submitted by the petitioners, and it is contended that this clause in the tender condition requiring ownership by the contractor of few of the machinery is uniquely created with a view to favour certain contractors who are owning such machinery, and is meant to eliminate competition by the contractors who can carry on contract by procuring such machinery on hire or lease, as there is no rational basis or intelligible reason why only in respect of three items of the machinery, the Corporation must insist on the ownership. This condition, being arbitrary and unreasonable, is liable to be quashed and set aside, and the respondents should be directed to consider the petitioners’ tender as ‘responsive’ by quashing and setting aside the impugned bid document, including the impugned terms and conditions, and particularly by declaring part A of clause 3.2.3(vi) of the tender terms and conditions as illegal, arbitrary, discriminatory and unconstitutional. 14 9. In Writ Petition (Lodging) No. 731 of 2010, which is filed by NG Projects Limited, it is the case of the petitioners that their tender has been held to be ‘non-responsive’ only for the reason that clause 3.24(g), which refers to information about the ownership or assured access through hire, lease or purchase agreement or other commercial means to key items of equipment mainly because their machinery / equipment are located in Gujarat, cannot be said to be non-compliance of the condition about ownership or assured access to the equipment; and, therefore, the decision of the respondents to disqualify them from participating in the tender process as ‘non-responsive’ has to be quashed and set aside by declaring that clause 3.24(g) about equipment capability is arbitrary and liable to be set aside. 10. In response to all the three aforesaid petitions, the respondent-Corporation has taken a common ground. It is their case that as per clause 3.24(g), it is necessary for tenderers that they shall own the equipment set out in Proforma V-A, and that the petitioners have wrongly interpreted clause 3.24(g), and that they are only 15 supposed to give information about the assured access. It is submitted that the petitioners have submitted an undertaking that they will make available equipment, in full working order, and the same will be available for timely use in the proposed contract, and in case the petitioners, who have not complied with the requirement of Proforma V-A, their tenders cannot be considered as ‘responsive’, mainly because they have given an undertaking to that effect. It is specifically stated that clause 3.33(i) says: “...does not submit as per guidelines given under D- Submission of Tender”, and accordingly, as these petitioners have not submitted the ownership documents according to Proforma V-A of the tender document by the letter dated 11th March, 2010, they were called upon to submit requisite details afresh on or before 17th March, 2010; and the petitioners, except the petitioners, N.G. Projects Limited [Writ Petition (Lodging) No. 731 of 2010], submitted the invoices for purchase of equipment, which are mere quotations and do not prove that the equipment are purchased by the petitioners or not, and whether they are in physical possession of the petitioners, and the said invoices submitted by them were not supported by Delivery Challans, and as per clause 3.30 of the tender document, these documents produced by the petitioners were 16 evaluated and scrutinised by the Tender Evaluation Committee, and it was held that the petitioners were ‘non-responsive’. It is the case of the respondents that on scrutiny of Packet ‘B’ of the 84 tenderers by the Evaluation Committee, 27 tenderers are found responsive; and the list of the responsive tenderers was displayed at the Divisional Office of Deputy Chief Engineer (Roads), City, on 18th March, 2010 after seeking approval from Director (E.S. & P.), who is the Technical Head of Engineering Department. 11. It is further contended that by a direction of the Additional Municipal Commissioner (City), respondent No.2 herein, dated 19th March, 2010, the work of physical verification of the machinery was carried out by these respondents till 25th March, 2010; and this was to ensure that no responsive tenderer was inadvertently rejected. According to the respondents, total 14 tenderers have been found ‘responsive’ on physical verification as reported by the Head of the Tender Evaluation Committee; and report of the physical verification dated 25th March, 2010 is approved by Director (E.S. & P.); and, therefore, it cannot be said that the respondents have arbitrarily rejected the bids of the petitioners. 17 12. In answer to the contention of the petitioners about relaxation of the condition of the tender for the period 2008 to 2010 in respect of ownership of machinery and equipment, it is submitted that the tender was under challenge before this Court in Writ Petition No. 1243 of 2009. The matter was carried to the Hon’ble Supreme Court by filing an S.L.P. by some of the tenderers, which came to be dismissed on 15th March, 2010, and, therefore, the same cannot be read into the present Tender Notice. 13. The respondents have laid emphasis on the urgency of the matter, as according to them, the contract of the existing agency carrying out the civil work contract would expire on 31st March, 2010, and, therefore, it is necessary to process the tender on an urgent basis in order to commence the tender work after 31st March, 2010, and the respondents have to complete the work before the upcoming Monsoon; otherwise, there will be major crises in the City of Mumbai, which will create great inconvenience to its citizens. 18 14. We have heard the learned counsel for the parties at length, and examined the bid document for AC-77 Civil Works Contract (C.W.C.), which was the subject-matter of the tender. 15. Insofar as the three petitioners in Writ Petition (Lodging) No.673 of 2010 are concerned, it is not disputed that none of them have complied with the requirement of furnishing information about ownership of the equipment and machinery, which was required to be furnished in Proforma V-A, along with their tender documents; and, therefore, we do not think that their case requires any re-consideration. The contention of these petitioners that clause 3.24(g) of the tender document, which imposes condition of ownership of the equipment and machinery, is arbitrary and violative of Article 14 of the Constitution of India, and also violative of the Competition Act, 2002, cannot be examined on the touch-stone of the respondents having not imposed such a condition in the tender for carrying out work of major corridors (major roads), or, for that reason, having relaxed the said condition in the earlier tender invited for the said work, which was the subject-matter of challenge before 19 this Court. The undertaking, as required under the tender, which was given by the petitioners, records as under:- “We shall make available the equipment in full working order, as set out in Proforma V-A, for timely use in proposed contract.” It does not comply with the requirement of Proforma V-A, which specifically provides that the tenderer shall own equipment, in full working order, as listed, and must demonstrate that based on known commitments, they will be available for timely use in the proposed contract, which related to the equipment mentioned in the proforma, i.e., Vibratory Roller (Minimum 10 Ton), Static Roller and Vibratory Roller (3 Ton, 1 mtr. Width). There is no document submitted along with the tender even after the petitioners were informed to submit document of ownership on scrutiny of Packet ‘B’. Therefore, the respondents were justified in disqualifying the petitioners’ bid as ‘non-responsive’. It is now well-settled that if a tenderer does not meet the requirements of the tender, and particularly in this case, having failed to furnish information about ownership of the equipment and machinery as provided in Proforma V-A, which was one of the essential requirements and to be furnished in Packet ‘B’ of the bid document as provided in clause 3.24(g), the respondents 20 were justified in rejecting their tender as ‘non-responsive’; and no case is made out by the petitioners; and, therefore, the Writ Petition of Crystal Construction, D.K. Infrastructure Pvt. Ltd. and Vasantbhai M. Shah, Partner of Vasant Construction Company India, i.e., Writ Petition (Lodging) No.673 of 2010, is liable to be dismissed. 16. Insofar as the Writ Petition filed by Prime Developers and Bharati Ketan Shah [Writ Petition (Lodging) No. 682 of 2010] is concerned, we find that the petitioners have complied with the requirement of clause 3.24(g) by furnishing document relating to ownership of equipment and machinery, as required in Proforma V-A. In their undertaking, they have specifically stated that they shall make available the equipment, in full working order, as listed in Proforma V-A for timely use in the proposed contract. In response to the query made by the Corporation by their letter dated 11th March, 2010, they have furnished invoice along with the Delivery Challan of the equipment and machinery as per the requirement. Therefore, the contention of the respondent-Corporation that this invoice is a mere quotation and does not prove that the equipment were purchased or not or that the same are in physical possession of the petitioners 21 cannot be accepted, as nothing prevented the respondents from verifying the fact. The case of these petitioners is distinct from that of Crystal Construction and others, as they were not able to make up for the deficiency even when opportunity was given to