WP(C) 1939/2010 BEFORE HON’BLE MR. JUSTICE AMITAVA ROY JUDGMENT AND ORDER (CAV) The petitioners figuring in these proceedings are amongst the contenders in the process for selection of a Developer for Development of 3-4 Star Hotel at Guwaha ti, Assam, in Building, Operate and Transfer (’BOT’) basis initiated by the Assa m Industrial Development Corporation Limited (hereinafter for short referred to as the AIDC), Guwahati, their bids having been rejected as non-responsive albeit for different reasons, seek judicial intervention for redress. 02. I have heard Mr. G.N. Sahawella, Senior Advocate assisted by Md. Aslam & Mr. D. Senapati, Advocates for the petitioners in WP(C) No.1770/2010; Mr. A.M. Buzarbaura, Advocate for the petitioners in WP(C) No.1939/2010; Mr. B.D . Das, Advocate for AIDC; Mr. G. Uzir, Advocate for IL&FS, Infrastructure Develo pment Corporation Limited, Guwahati, Respondent No.3 in WP(C) No.1770/2010 and M r. N. Dutta, Senior Advocate for M/s. Sohum Shoppe Pvt. Ltd., Respondent No.4. The prefatory facts are identical, the causes of action though different. The pe titions were accorded analogous hearing and this common adjudication would answe r the issues raised. 03. The factual backdrop for an appropriate comprehension of the riv al arguments needs to be outlined at the threshold. The AIDC sometime in Octobe r, 2009 issued an advertisement inviting Request for Qualification (RFQ) from Bi dders/Bidder consortium for Designing, Financing, Constructing, Operation and Ma nagement of 3-4 Star Hotel at Guwahati. A two stage process was contemplated for the ultimate selection of the Bidder, namely- (a) Request For Qualification (RF Q) & (b) Request for Proposal (RFP). At the RFQ stage, the intending Bidders was required to make an application as per the RFQ provisions, whereafter the AIDC was to select/short list them if found qualified and eligible for participating in the next stage, i.e. RFP. The short listed Bidders were to submit their propo sals as per the detailed instructions in the RFP documents and the final selecti on was to be made by the Evaluation Committee of the AIDC on the touchstone of t he stipulations contained then. 04. The petitioners in WP(C) No.1770/2010 claim to be Companies inco rporated under the Companies Act, 1956 with registered Office at Guwahati in the district of Kamrup, Assam and Shillong in the State of Meglalaya respectively. According to them, they have formed a consortium represented by the Director of the petitioner No.1 who had been authorized by the petitioner No.2 to act on hi s behalf as well. 05. The petitioner No.1 in WP(C) No.1939/2010 asserts to be a busine ssman by profession who has entered into an agreement with the petitioner No.2, M/s. North-East Agri Product (P) Ltd. which is a company under the Companies Act , 1956 having its registered Office at Guwahati in the district of Kamrup, Assam . The petitioner No.3 is the Chairman-cum-Managing Director of the Petitioner No .2. According to these petitioners, the petitioner No.1 and the petitioner No. 2 have formed a consortium to submit their Bid in the aforementioned process wit h the petitioner No.1 as the authorized signatory of the consortium. 06. The petitioners in the above capacity responded to the advertise ment and submitted their Bids for the RFQ. Amongst others, the Respondent No.4 w as also in the fray. Eventually, 10 such Bidders including the petitioners and the Respondent No.4 were short-listed for the succeeding stage of Request for Pr oposal (RFP). On requests being made, RFP documents were furnished to them for submission thereof, in accordance with the terms and conditions as contained the rein. The date of submission of the Bids for RFP though fixed on 26.02.2010, was there after extended up to 06.03.2010. Prior thereto, as notified, as Pre-Bid Meeting of the Bidders was held on 18.02.2010 with the object of deliberating upon the RFP documents and requisites specified for Bidding and also for clarifications o f the queries, if any, raised by the Bidders in connection therewith. Only 5 Bi dders including the petitioners and the Respondent No.4 submitted the RFP docume nts with their respective offers. These were opened on 12.03.2010 and following the scrutiny thereof by the Evaluation Committee, the offers of the petitioners were held to be non-responsive and as such their Financial Bids were not opened . The precise grounds of rejection, as available in the minutes of the Evaluati on Committee Meeting held on 12.03.2010 are extracted hereinbelow: 4. Bid submitted by Auto Sales India Ltd in Consortium with Hotel Polo Towers. It was found that the Bid did not contain the full set of s igned RFP documents. Although part of the RFP documents duly signed by the auth orized signatory was provided, signed copy of the lease cum development agreemen t was not provided as stipulated in the RFP document. The committee deliberated at length on this and decided that the bid was not responsive. The committee t herefore decided that the financial bid of this bidder should not be opened. 2. Bid Submitted by Napoleon Kathar in consortium with North East Agri Prod ucts pvt Ltd. It was found the bid documents contained anti collusion certificate from only on e of the consortium partners and not from both as required by the RFP document. The committee deliberated at length and decided unanimously that these discrepa ncies cannot be ignored. The committee therefore decided that this bid is not r esponsive and financial bid submitted by the bidder should not be opened. 07. Obviously thus, whereas the Bid of the writ petitioners in WP(C) No.1770/2010 was rejected for the omission to submit a signed copy of the Lease -cum-Development Agreement as stipulated in the RFP documents that of the writ p etitioners in WP(C) No.1939/2010 was declined as the Anti Collusion Certificate was not signed by all the partners of the consortium. The rejections have been a ssailed to be incompatible with the letter and spirit of the relevant clauses of the RPF, besides being illegal, arbitrary and unfair. According to the petition ers, their Bids on these grounds could not have been detruded as non-responsive. 08. The AIDC, in its individual affidavits, while generally endorsin g the various stages of the process as delineated by the petitioners, however ha s pleaded in no uncertain terms that a Bidder was to necessarily sign all the RF P documents, as well as the Lease-cum-Development Agreement. As the consortium i n WP(C) No.1770/2010 did not submit a signed Lease-cum-Development Agreement alo ngwith the RFP documents, its Bid being in violation of the covenants contained therein was ascertained to be non-responsive. The answering respondent, has emp hasized that the Bidder is required to submit alongwith the RFP documents, a sig ned copy of the Lease-cum-Development Agreement signifying his/its consent to ab ide by all terms and conditions incorporated therein. According to it, the Lease -cum-Development Agreement is a very important document regulating the relations hip of the parties and inter alia provides for the payment of rents and all othe r conditions, which the AIDC would consider necessary to protect its rights and interest over its property. The AIDC, in clear terms refuted the petitioners’ cl aim that their Bids were responsive, in terms of the RPF stipulations. 09. Similarly, in terms of the RFP stipulations, the petitioners i n WP(C) No.1939/2010 being a consortium, two Anti Collusion Certificates in the respective letterheads of both the members thereof ought to have been submitted. As only one member of the consortium did so, its Bid was evaluated to be non-re sponsive. That at the Pre-Bid Meeting held on 18.02.2010, all queries bearing on the RFP documents were though open to be made, yet the petitioners did not seek the same has also been averred. 10. The Respondent No.3 in WP(C) No.1770/2010, IL & FS Infrastructur e Development Corporation Ltd. Guwahati, in its counter has introduced itself to be the Project Advisor of the Enterprise and has insistently endorsed the valid ity of the impugned decision. It has vouched for the transparency in the proces s under taken and has categorically denied that the petitioners’ Bids had been r esponsive. According to it, the submission of a signed draft Lease-cum-Developm ent Agreement was a pre-requisite of a valid Bid and that therefore, in absence thereof the decision of the Evaluation Committee is unassailable. 11. The Respondent No.4, though had not submitted it’s affidavit-in- opposition, has urged in affirmation of the impugned decision in two interim app lications, registered as Misc. Case Nos.958/2010 & 977/2010. In another interim application (Misc. Case No.969/2010) on the same averments it has sought for vac ation and/or modification of the interim orders dated 17.03.2010 & 22.03.2010 pa ssed by this Court in WP(c) No.1770/2007. It too had introduced itself to be a company registered under the Companies Act ,1956 having its registered office at Guwahati in the district of Kamrup, Assam. While recording its general endorsement of the facts bearing on the succeeding phases of the process, it has asserted that the Bids of the petitioners were rig htly rejected, as those were incomplete in terms of the RFP imperatives. Accord ing to it, following the rejection of the Bids of the petitioners as non-respons ive, the Financial Bids of the surviving Bidders were opened and examined, whe reafter it’s offer was found to be the highest valid responsive one (H-1) with that of North-Eastern Cables & Conductor Pvt. Ltd (H-2) and Merchandile Ltd. & Consortium (H-3) in the descending order. This answering respondent has stated w ith the said determination these Bidders were necessary parties in the writ proc eedings. According to it, not only this fact has been withheld from this Court, neither it nor the other two Bidders whose Financial Bids were opened and accept ed have been impleaded as respondents. The answering respondent, has therefore, sought for dismissal of the writ petitions, not only on merit but also on the g round of withholding of essential facts and non-impleadment of necessary parties . In controversion, the petitioners, in their affidavit-in-opposition to the in terim applications have pleaded that as the selection process has not yet been f inalized, the plea of withholding of facts and non-joinder of necessary parties is untenable. 12. Mr. Sahewalla with profuse reference to the various clauses in t he RFP documents has persuasively urged that as the Lease-cum-Development Agreem ent (hereinafter for short referred to as the LCDA) is to be executed by a succe ssful Bidder at the culmination of the selection process, the submission of sign ed draft copy thereof was not mandatory. As a signed copy of the LCDA was not an essential document to be filed alongwith the RFP annexures, the petitioners’ Bi d was wrongly rejected, he urged. The Senior counsel maintained that as by the u ndertaking as per the format at Annexure-4 to the RFP documents as well as by a letter dated 24.02.2010, the petitioners had agreed to the terms of the proposed LCDA with an assurance to enter into a formal agreement to that effect, the imp ugned rejection of its Bid is clearly unsustainable in law and on facts and is l iable to be adjudged as such. As the petitioners Bid is complete in all respect s and is thus fully responsive, the rejection thereof for noncompliance of an i nessential stipulation is obviously indefensible warranting interference with th e impugned decision. Mr. Sahewalla to brace up his challenge, laid reliance o n the decision of the Apex Court in B.S.N. Joshi & Sons Ltd. Vs. Nair Coal Servi ces Ltd. and Ors. (2006) 11 SCC 548. 13. Mr. Buzarbarua, for the petitioners in WP(C) No.1939/2010 has ur ged that the petitioner No.1 having been duly appointed as the Attorney of the p etitioner Nos.2 & 3 as well as the authorized signatory of the consortium, the A nti Collusion Certificate as per the format at Annexure - 3 accompanying the RFP documents was signed by him in that capacity and thus was in wholesome complian ce of the relevant stipulation to that effect. As in terms of the format for An ti Collusion Certificate, the same was required to be signed only by the authori zed person, the requirement of execution thereof by all the members of the conso rtium is in apparent disaccord with the enjoinment of that format. Mr. Buzarbar ua has therefore argued that in terms of Clause 3.5.1, the execution of the Anti Collusion Certificate by all the members of the consortium would have entailed contravention of Sub-Clause (e) thereof rendering the Bid non-responsive. The l earned counsel has argued in the alternative that the Anti Collusion Certificate is an inessential document in the context of Clause 4.7 of the RFP documents de aling with corrupt or fraudulent practices. In any view of the matter, as the o mission, if any in the execution of the Anti Collusion Certificate by all the me mbers of the consortium is a curable defect, the petitioners’ Bid on this count ought not to have been rejected, he urged. 14. Mr. Das, learned counsel for the AIDC abiding by its pleaded sta nd, has insistently urged that the stipulations of the signed draft LCDA and the execution of the Anti Collusion Certificate by all the members of the consortiu m being peremptory essential conditions of the RFP documents, the Bids of the pe titioners were apparently non-responsive when adjudged on the touchstone of the relevant stipulations and that therefore the impugned decision is assuredly vali d. As the petitioners as Bidders in the Pre-Bid Meeting did not choose to obtain necessary clarifications in this regard, they cannot insist on the acceptance o f their Bids, though non-responsive, he urged. Mr. Das referred to various prov isions of the LCDA to emphasise upon its significance, vis-à-vis the foreseeable dealings between the selected Bidder and the AIDC in the course of the executio n of the project to contend that submission of a signed draft copy thereof was t hus an indispensable essentiality. As the Evaluation Committee has acted strictl y, in accordance with the terms and conditions of the RFP documents, the impugne d decisions cannot be faulted with, he insisted. 15. Mr. Uzir, while reiterating that the role of LCDA being that of a project advisor with no participation in the actual selection process, no comm ent on its behalf on the challenge is called for. 16. Mr. Dutta, appearing for the Respondent No.4 has maintained that the LCDA being a document to ensure the concurrence of a willing Bidder to the clauses embodied therein at the introductory stage of the process so as to obvia te any possibility of any departure therefrom after the final selection, the ins istence for the submission of a signed draft copy thereof signifies its imperati ve bearing and therefore the impugned decision vis-à-vis the petitioners in WP(C ) No.1770/2010 is valid. The Senior counsel has argued that the Power of Attorne y executed in favour of the petitioner No.1 in WP(C) No.1939/2010 being not in c onformity with the requirement of Section 48 of the Companies Act, 1956(hereinaf ter for short referred to as the Act), it is non est in law. As the document doe s not bear the seal of the Company, it per se does not empower the petitioner No .1 to represent it as its Attorney. Mr. Dutta, further argued with reference to Clause 84 of the Regulations in Schedule - I of the Act that in absence of any explanation for the absence of the seal, the Power of Attorney in favour of the petitioner No.1 is not tenable in law and thus the Anti Collusion Certificate si gned by him as the authorized members/agents of the consortium is void. As the said certificate has not been executed by all the members of the consortium, it is in breach RFP stipulations and thus the Bid has been rightly held to be non-r esponsive, he insisted. 17. The contentious issues discernible have their roots in the rival interpretation of the relevant clauses of the RFP. Considering the nature of t he project proposed to be under taken, AIDC being a public sector undertaking it has to be conceded the discretion and dominion of modelling the stipulations go verning the process in the selection of the Developer therefor. A conjoint readi ng of the cognate clauses would demonstrate the essentiality or otherwise of the requirements prescribed thereby. Be that as it may, the interpretation provide d to a clause individually or in conjunction with others by the AIDC ought to be lent due weightage, the same having been framed obviously to achieve an objecti ve pertaining to the project. 18. As the RFP discloses, the exercise initiated by the AIDC was for selecting a technically and financially capable entity for Designing, Construct ing, Operating and Managing 3-4 Star Hotel at Guwahati through a transparent and competing Bidding process for a lease period of 40 years, at the end of which t he property is to revert to it. The selection process has been schemed to be in two phases. The short listed Bidders on the basis of their Request For Qualifi cation (RFP) are issued, the RFP documents whereafter, they are required to subm it Compliance Documents, Financial Bids and the Bid Security in three separate e nvelopes. The minimum rate of premium to be quoted is mentioned in the RFP and the Bidder quoting the highest premium in the Financial Bid is contemplated to b e declared as the preferred Bidder. Clause 3.4.5 requires that the Bid duly fil led in must be delivered to the address provided on/or before the date fixed the rein and the Bidder or its authorized signatory must necessarily sign all the pa ges of the RFP and the Lease-cum-Development Agreement and enclose the same in a separate sealed envelope. Clause 3.5.1 deals with the responsiveness check , which for its considerable significance is extracted hereinbelow for ready refer ence: 3.5.1 Responsiveness check The Bids submitted by Bidders/Bidding Consortia shall be initially scrutinized t o establish Responsiveness . A Bid may be deemed Non-responsive if it does n t satisfy any of the following conditions: (a) Is received / deemed to be received by the Bid Submission Due Date inclu ding any extension thereof pursuant to 4.19.2. (b) Is signed, sealed and marked as stipulated in 4.17. (c) Is accompanied by the Power(s) of Attorney as per format in Annexure. (d) Contains all the information as requested in the RFP. (e) Contains information in formats same as those specified in this RFP (Ann exure 1-6). (f) Mentions the validity period as set out in Clause 4.12. 19. Whereas, Clause (d) requires that the Bids should contain all th e information as requested in the RFP, Clause(c) ordains that the same should al so carry information in formats, as those specified therein (RFP). Clause 3.6.1 clarifies that the Financial Bids of all Bidders who have been found to be resp onsive to the requirements as per Clause 3.5.1, would be opened. This signifies that the Financial Bids of the Bidders whose offer are considered to be non-responsive as per this clause would not be opened. Clause 3.7 which dwells on the award of lease reveals that the AIDC would enter into an agreement (s) with the preferred Bidder in line with the terms and conditions provided. T he Lease-cum-Development Agreement is furnished in Volume-III of the RFP documen ts. Clause 4.7 requires the Bidder and their respective officers etc. to mainta in highest standard of ethics during the Bidding process and subsequent to the i ssuance of the Letter of Intent (LOI) as well as during the subsistence of the L ease-cum-Development Agreement. The AIDC thereby has reserved its right to reje ct a Bid, to withdraw the LOI or the Lease-cum-Development Agreement if a Bidder or Developer is found directly or indirectly or through an agent engaged in cor rupt practice, fraudulent practice, restriction practice etc. in the Bidding pro cess. For this corrupt practice etc. have also been defined. Clause 4.17 eluci dates that only those Bids that are received in the required formats and are com plete in all respects would be valid and that a Bid shall be signed by the same authorized signatory signifying the qualification proposal or any other person d uly authorized by the Bidder. Under Clause 4.18 the Bid is to be submitted in t hree separate envelopes as hereinbelow: Envelope A - Compliance document. Envelope B - Bid Security. Envelope C - Financial Bid. Clause 4.18.2 being also of decisive significance is extracted hereinbelow: 4.18.2 ’Envelope A: ’Compliance Document’ shall be submitted in a separate enve lope and shall contain the following, in original: • Covering letter clearly stating the validity period of the Bid in the pr escribed format Annexure 1. • Power of Attorney for signing the Bid, as per the prescribed format Anne xure 2. • Anti-collusion certificate, as per the prescribed format Annexure 3. • Letter of Undertaking, as per the prescribed format Annexure 4. 20. This clause as would be apparent from hereinabove, inter alia re quires that the Anti Collusion Certificate and the Letter of Undertaking would h ave to be furnished in the prescribed format at Annexure - 3, Annexure - 4 respe ctively. A Pre-Bid Meeting is also conceived of as per Clause 4.21. the date whe reof has been mentioned for the purpose of clarifying the queries of the Bidders related to the project and the RFP documents, if any. The Bidders are advised thereby to submit the queries in writing or by fax or e-mail in advance. Additio nally in course of the Pre-Bid conference, they are also free to seek clarificat ions and making suggestions for the consideration for the AIDC. The formats in which the documents are required to be submitted appears as Annex ure - 1 to 6 in Volume - III of the RFP documents. To be precise, whereas Annex ure - 1 is that for the covering letter for project undertaking, Annexure - 3 pr ovides the format for the Anti Collusion Certificate. A conjoint reading of Clauses 3.4.5, 3.5.1 & 3.6.1 demonstrate in clear terms th at a Bidder or its authorized signatory is obliged to sign all the pages of the RFP and the Lease-cum-Development Agreement and is to provide all informations a s requested for in it (RFP). A Bidder is also essentially required to furnish t he informations in the formats as specified in Annexure - 1 to 6 of the RFP. Th e Financial Bids of the Bidder whose Bids are found to be responsive on the yard stick of Clause 3.5.1 would only be opened. In other words such Bidders would b e exclusively eligible to have their Financial Bids opened and considered to adv ance further in the process. The Bids which are non-responsive would be seived and the Bidders thereof would be screened out at that stage being ineligible. 21. Admittedly, the petitioners in WP(C) No.1770/2010 had not submit ted the signed draft copy or the signed copy of the LCDA incorporated in the RFP documents. Though, they had submitted the project undertaking in terms of Anne xure - 4 and had also addressed a letter dated 24.02.2010 to the AIDC agreeing t o abide by the terms of the proposed Lease-cum-Development Agreement, furnished in a draft form with the RFP documents in the event that their Bid is accepted. This, notwithstanding in the comprehension of this Court considering the catego rical and unambiguous requirement for the Bidder or its authorized signatory to obligatorily sign all the Bids of the RFP with the Lease-cum-Development Agreeme nt and to enclose the same in a separate sealed envelope at the time of submissi on of the Bid, any omission to comply with this imperative would be an antithesi s to the essentiality of Sub-Clause (d) of Clause 3.5.1.