WP(C) 5923/2010 BEFORE THE HON’BLE MR.JUSTICE UB SAHA 1. The challenge in this writ petition is to the Clauses 2.3.2(1), 2.3.2(2) , 2.4.1(a), 2.4.1(c) and 2.4.2(a) in the Notice Inviting Tender ( NIT) bearing No. PIU/JICA/GHTY/13(8a)/2010/40 and PIU/JICA/GHTY/ 13(8b)/2010, dated 2.9.2010, Annexure P 4A to the writ petition, for bid for package 8a (International Compe titive Bidding) and for bid for package 8b (International Competitive Bidding) r espectively. 2. As agreed to by the learned Counsel for the parties and in terms of the earlier order of this Court as well as considering the nature of the prayer of the petitioners and the question involved, this writ petition is taken up for d isposal at the admission stage itself as ordered by this Court. 3. Initially, the writ petition was filed against the respondent No. 1 to 6 . Later on, the respondent No. 7 to 9 were brought on record in pursuance of the order of this court dated 23.11.2010. 4. Heard Mr. S.K. Kapoor, learned senior Counsel assisted by Mr. K.R. Sura na, learned Counsel appearing for the petitioners. Also heard Mr. K.M. Mazumder, learned Counsel for the Respondent No.1 and 2, Mr. N. Dutta and Mrs. M. Hazari ka, learned senor Counsel assisted by Ms. A. Ajitsaria, learned Counsel for the respondents 3 to 6, Mr. Jayanta Mitra, learned senior Counsel assisted by Mr. Pa dam Khaitan, Mr. K.K. Dutta, Mr. Sanjib Roy, learned Counsel for the respondent No.7, Mr. U. Bhuyan, learned senior counsel assisted by Mrs. A. Verma and Mr. A. Hazarika and Mr. Uday Shekhar Roy Choudhury, learned Counsel for the respondent No.8. and Mr. A.K. Bhattacharjee, learned senior Counsel assisted by Mr. A.K. Choudhury, learned Counsel and Mr. Diganta Lahkar for the respondent No. 9. Pleaded case of the parties 5. The brief facts of the case needed to be discussed are as under: Notices inviting tender dated 2.9.2010 for biding for Package 8a and 8b respectively were issued by the Respondent No.5, the Chief Executive Officer o f respondent No. 4, the Guwahati Metropolitan Development Authority,(GMDA) a st atutory body corporate, inviting sealed bid from eligible source countries fo r procurement of supply, delivery and stacking of ductile iron pipes (item rat e contract), ISI marked class K9 conforming to IS 8329: 2000 or equivalent inte rnational standard (hereinafter referred to as package 8a) and for procurement of supply, delivery and stacking of ductile iron pipes ( item rate contract), I SI marked class K9 conforming to IS8329:2000 or equivalent international standar d, ( hereinafter referred to as Package 8b) respectively. Pursuant to and in fur therance of the said notices inviting tender, the writ petitioner, a company reg istered under the Companies Act, 1956, namely, Jai Balaji Sponge Ltd, an organ ization producing steel materials like world class ductile iron pipe and having all necessary licenses and permits for manufacturing such ductile iron pipes bot h K7 and K9 classes of diameter ranging from 100 mm to 1000mm with present pro duction capacity above 6000 M.T of ductile iron pipes per month and being a hold er of an appropriate license granted by the Bureau of Indian Standards ( herein after referred to BIS) for manufacturing ductile iron pipes,( for short DI pipe ) purchased the bidding documents from the office of the respondent No.5, the Chief Executive Officer, Guwahati Metropolitan Development Authority( for short GMDA), Guwahati, Assam. Like the petitioner,(1) the Tata Metalic Kubota Pipes L td, (2) Jindal Saw Ltd, the respondent no. 8 herein, (3) Brahmaputra Infrastruc ture Ltd,(4) Electrosteel Castings Limited, the respondent No. 7 herein, (5)El ectrotherm ( India) Ltd. and (6) Lanco Industries Ltd, the respondent No.9 herei n also purchased the bidding documents and the petitioners along with others ap peared in the pre-bid discussion. But ultimately as the petitioner was not able to show the average annual production turnover for five years and receipt of cer tificate payment up to 1900 million for five years as well as minimum average production turnover in terms of length of 5 lacs meters of all sizes for at l east one year and was not having five years general production experience in m anufacturing and producing of DI pipes and was further unable to show performan ce experience in the shape of proving track record of good performance of DI pipes for last three years stipulated by the guidelines, they became absolutely ineligible, disqualified and excluded from participating in the tender proces s. 6. The petitioner in Para-14 of the writ petition pleaded, inter alia, tha t if every public institution in the world were to stipulate the existence of five years of supply and certification history as a qualifying criterion for a market player, no new market player would be able to forge any ground in t he domestic or international market and axiomatically no new market player wo uld ever be born. Accordingly, for the sake of healthy competition, it is nec essary that only relevant criteria are engrafted into the roster of qualifyin g conditions for participation in a tender involving mere supply of material , m ore so when India is presently reeling under a huge supply-demand gap of duct ile iron pipes. 7. In Paragraph- 19 of the writ petition, the petitioner pleaded that simil ar tender floated by diverse public authorities involving supply of D.I pipes of stipulated quality and specifications clearly show that eligibility condit ions pertaining to antiquity of manufacturing process or antiquity of subsiste nce of standard organizations license are irrelevant for the purpose of job of mere supply. On obtaining information regarding the similar tenders floated b y various States, in none of those tenders, there remained any eligibility crit erion or stipulation pertaining to antiquity of manufacturing process or antiqu ity of the subsistence of license granted by the BIS. 8. It is further pleaded by the petitioners in the writ petition that by in troducing the impugned clauses in the tender process, the respondent GMDA exclud ed the writ petitioner No.1 from the competition in the tender process though it has all requisite qualification as well as license issued by the BIS and able t o produce the DI pipes of all sizes as per IS 8329:2000 as required and necessa ry for participating in the tender process. According to the petitioners, exclud ing it from competition in the tender process is grossly arbitrary , unfair and biased and based on wholly unreasonable ground. Not only that, due to exclusio n of the petitioners from the competition of the tender process, the GMDA viol ated the constitutional right of the petitioners as protected by Article 19 of the Constitution and also denied the equal protection and opportunity and a s such, violated the fundamental rights of the petitioners as protected under Articles 14 and 19 of the Constitution. Not only that, the respondents also viol ated the rights of the petitioners under Article 21 and 300A as protected there under. 9. While replying by filing the affidavit to the affidavit in opposition filed by the respondents 3,4 and 6, the petitioners denied the contention of th e respondents, inter alia, that JICA is a necessary or proper party for deciding the instant writ petition or that the writ petition is bad for non-joinder of JICA, as alleged or sought to be alleged . However, ultimately, the writ pet itioners pleaded therein that in the event this Court is pleased to hold that the presence of JICA is necessary for an effectual adjudication of the issu e involved in the instant writ petition, the Court may be pleased to add JICA as respondent in the writ petition. It is further pleaded that though the referen ce has been made to a loan agreement executed on 31.3.2009 between the JICA a nd the President of India, but the GMDA denied to disclose about the loan Agre ement in the instant writ petition. The petitioner also denied that the bid docu ments for contract Page- 8a and 8b were prepared in terms of the JICA sample doc uments and guidelines as contended in the affidavit in opposition. Further co ntention therein is that in view of the objection raised by the petitioner rega rding the vagueness in the clauses relating to type test, cement lining smoothne ss test and portability test etc., the respondents GMDA subsequently deleted all these three clauses and those deletion were done without prior consent of the JICA and unilaterally. Not only that, apart from the aforesaid deletion, the GMD A also without prior consent of JICA, unilaterally reduced the eligibility cla use relating to average turn over as well as qualifying length. In writ petition , though there was no pleading regarding to Competitive Law, but in Paragraph-10 of the affidavit in reply, a new plea has been taken for guiding condition made in the writ petition, inter alia, that in pursuit of globalization, it is alw ays necessary that a particular market should be geared to face the steepest com petition from within the country and outside. The State and/or any authority un der article 12 of the Constitution of India is under an obligation to ensure tha t there is free and fair competition in India and to forbear from any device or mechanism which may cause an appreciable adverse effect on competition. The rig ht to free and fair competition is an integral part of the fundamental freedom a s contemplated by the provisions of Article 19(1)(g) of the Constitution of Indi a. The elimination of all players save and except two players, as has been in th e instant case, shall definitely directly and/or indirectly determine the sale p rice of the subject pipes and there is strong likelihood of the same directly or indirectly resulting in bid rigging or collusive bidding either for the purpos e of siphoning off public funds by fixing high price or by fixing a predatory pr ice for the purpose of totally eliminating other contenders from the market. 10. All the respondents in the writ petition have appeared at this stage, bu t except the respondents 3,4 and 6, none has filed affidavit in opposition. When the matter was taken up, the learned Counsel for the respondents 7 to 9 submitt ed that the private respondents i.e. the respondents 7 to 9 would not file any a ffidavit in opposition and they would rely upon the contention made by the respo ndents 3,4 & 6 in their affidavit in opposition for making out their case. 11. The respondent No. 3, 4 and 6 before countering the contention made in t he writ petition in their affidavit painted a facial matrix on certain facts whi ch is necessary for determining the face value of the NIT in question. These ar e as follows: That the drinking water crisis tops the list of civic woes in the Guw ahati city as many areas are yet to be covered by any water supply scheme. The Guwahati Municipal Corporation (GMC), the Assam Urban Water Supply, the Sewera ge Board and the Public Health Engineering (PHE) Department together supply drin king water to around 30 percent population in the city and the current public p iped water supply within Guwahati covers only about 30% of the city area, mostl y in south Central zone. Not only that even within this area due to the degraded water treatment plants and the high water leakage rate i.e. around 38% in 200 8, the provision of water at individual households is limited to 2 to 4 hours a day. Those citizens without access to piped water supply rely on ground water, but the water quality is not appropriate for drinking with high level of disso lved solids and iron contents with fluoride contamination. As estimated, the cur rent population is expected to be more than double and triple by 2025 and 2040 , respectively and due to rapid growth of urban population and economy, the g ap between water demand and water supply has been widening. On the contrary, the city being situated on the bank of Brahmaputra river, which is one of the ma jor rivers in India, has advantage of having huge water sources available. There fore, providing treated surface water to every citizen is a long due and very m uch essential. Keeping in mind the next twenty years, a master plan for Guwaha ti Metropolitan Area 2025 sets the target that the 100% houses will be supplie d with piped filtered water by the year 2025. In this back ground, the water su pply scheme has been conceived and it has assumed immense importance in the very survival of the citizens of Guwahati and a project is being prepared for the sa id purpose. Any delay for implementation of the project would cause untold and i rreparable harm to the lives of the citizens which will get compounded with each passing day. 12. For fulfillment of the project as aforesaid, there was exchange of note between the Government of India and the Government of Japan concerning Japanese loan for promoting economic stabilization and development efforts of India. Like the Guwahati Water Supply project, some other projects were also prepared by o ther States. As per the said Notes, loan would be extended in accordance with t he relevant laws of Japan to the Government of India by the Japan International Cooperation Agency (JICA), which is an independent Govt. Agency of Government of Japan that coordinates the Official Development Assistance (ODA) for the G overnment of Japan which currently extend loan for developing countries for th e purpose of implementing their projects like the Guwahati Water Supply Project . The loan would be made available to cover payments made by the Indian Executi ng Agencies for implementing the project and the Government of India will ensure that the products and/or services are procured in accordance with the guideline s of procurement of JICA. As per the exchange of notes a sum of 29453 million yen was allocated for the Guwahati Water Supply Project and the disbursement per iod was four years after the date of coming into force of relevant loan agreem ent which would be concluded after the JICA is satisfied about the feasibility i ncluding the environment consideration of the project. 13. In the light of the contents of the exchange of notes as stated supra, the Loan Agreement between the JICA and the President of India was signed on 3 1.3.2009 with certain stipulation made thereunder. 14. Section 4 (1) of the Loan Agreement provides that the borrower shall aut horize the GMDA for implementation of the project and Section 4(2) of the said a greement also provides that the borrower shall cause the GMDA to employ consult ants for the implementation. As per Schedule 4 of the Loan Agreement, procureme nt of all goods and services except consulting services to be financed out o f the proceeds of the loan shall be in accordance with the guidelines for pr ocurement under JBIC ODA loans dated October, 1999 and employment of consulta nt to be financed out of the proceeds of the loan, shall be in accordance with the guidelines for employment of consultants under JBIC ODA loans dated Octobe r 1999. Under the aforesaid Loan Agreement, the contract value estimated to be not less than 500 million Japanese yen, if the borrower wishes to adopt procure ment procedure other than the International competitive bidding, a request fo r review has to be submitted to JICA and JICA shall inform of concurrence by me ans of a notice regarding procurement methods. In terms of the Schedule 4 afore mentioned, for pre-qualification in case of contract, the estimated value of w hich is not less than 500 million Japanese yen, after the pre-qualified firms ha ve been selected, the same has to be submitted to JICA for its review and conc urrence with a report on the selection process supported by reasons thereon for the choice made, attaching all relevant documents together with a request for a review of the results of the pre qualification. The borrower is also to submit t o JICA for JICA’s reference such other documents which the JICA may request. Wh en JICA has no objection to the said documents, JICA shall inform the borrower a ccordingly by means of a Notice regarding result of pre-qualification. 15. Before sending a notice of award to the successful bidder, the borrower shall submit to JICA, for their review and concurrence, the analysis of bids an d proposal for award, together with a request for review of analysis of bids an d proposal for award and further submit for JICA’s reference, such other documen ts related to the award as JICA may request. When JICA has no objection to the said documents, JICA shall inform the borrower regarding analysis of bids and pr oposal for award. 16. If the borrower wishes to reject all bids or to negotiate with the lowes t evaluated bidder with a view to obtaining a satisfactory contract, the borrowe r shall inform JICA of its reasons, requesting prior review and concurrence. Whe n JICA has no objection it shall inform the borrower of its concurrence. In the case of a re-bidding, all subsequent procedures shall be substantially in accord ance with the procedures as enumerated before. 17. In the Agreement between the Union of India and the JICA, it is furthe r provided that with regard to any contract the value of which is estimated to be not less than three billion Japanese Yen, in addition all the procedures sti pulated thereunder, some steps are to be taken. These are: (i) Before advertisement and/or notification of pre-qualification, the borr ower shall submit to JICA for review and concurrence, the pre-qualification eval uation criteria, together with a request for review of pre-qualification evalua tion criteria. JICA reserves the right to request the borrower to submit documen ts relevant to pre-qualification for JICA’s reference. When JICA has no objectio n to the said criteria, they shall inform the borrower regarding pre-qualificati on evaluation criteria. Any important modification by the borrower of the said c riteria shall require the prior written concurrence of JICA thereto. (ii) Before inviting bids, the borrower shall submit to JICA for JICA’s revie w and concurrence the notices and instructions to bidders, bid form, proposed d raft contracts, specifications, drawings and all other documents relating to bid ding, together with a request for review of tender documents. JICA reserves the right to request the borrower to submit documents related to the tender for JI CA’s reference. When JICA has no objection to the said documents, JICA shall in form the borrower. Any important modifications by the borrower of the said docum ents shall require the prior written concurrence of JICA thereto. (iii) When the two envelops bidding procedure is adopted, the borrower shall before opening price proposals, submit to JICA, for JICA’s review and concurrenc e, the analysis of technical proposals, together with a request for review and s uch relevant documents as JICA may request. When JICA has no objection, JICA sha ll inform the borrower regarding analysis of technical proposals. 18. It is further pleaded in the affidavit in opposition submitted by the r espondent No. 3,4 and 6 that the entire water supply project is divided into n ine contract package. The summary of the contract package and the contract wise progress of the main water supply facility are as under: Contract Package No. Scope Original Actual / Planned Remarks / Status Start Completion Start Completion C#01 North Zone Intake facilities, Raw water pumps & Rising Mains, WTP ( 38ML D), Clear Water Pumps & Rising Main, & Service Reservoir (1no.) including settin g of water Testing Laboratory Jan-2012 Mar-2014 Jan-2011 May-2013 Bid documents issued to 9 pre-qualified bidders on 20 August 201 0 Bids are due on 08 November 2010 C#02 North Zone-Installation of Distribution network except procurement of D I pipes Jan-2012 Mar-2015 Apr-2011 Apr-2013 PQ notic e issued on 13 October 2010 Bid document is expected to be issued to pre-qualifi ed bidders on 18 December 2010 C#03 South Central Intake facilities, Raw Water Pumps & Rising Mains, WTP ( 2 00 MLD) & Clear Water Sump and Pumps including setting of Water Testing Laborato ry and new Jal Board office Jan-2012 Mar-2014 Jan-2011 Oct-2013 Bid documents issued to 7 pre-qualified bidders on 20 August 201 0 Bids are due on 08 November 2010 C#04 South Central Zone Transmission Mains ( 27.139 km Gravity Main, 5.18 km Pressure Maims), Reservoirs (1MBR, 6 Service Reservoirs, 3 Sub-zone Reservoirs w ith access roads) and booster pumps in Narakasur Jan-2012 Mar-2013 Feb-2011 Aug-2013 Bid documents issued to 6 pre-qualified bidders on 18 October 2010. Bids are due on 03 December 2010 C#05 South Central Zone-Installation of Distribution network in Ramsa Hill & Amiya Nagar Distribution Areas except procurement of DI pipes Jan-2012 Mar-2015 Apr-2011 Oct-2013 PQ notice issued on 13 October 2 010 Bid document is expected to be issued to pre-qualified bidders on 18 Decembe r 2010 C#6 South Central Zone-Installation of Distribution Pipes in Geeta Nagar & L echu Bagan Distribution Areas except procurement of DI pipes Jan-2012 Mar-2015 May-2011 May-2014 PQ notice issued on 13 October 2 010 Bid document is expected to be issued to pre-qualified bidders on 31 Decembe r 2010 C#7 South Central Zone-Installation of Distribution Pipes in Narakasur & Son aighuli Distribution Areas except procurement of DI pipes Jan-2012 Mar-2015 May-2011 Oct-2014 PQ notice issued on 13 October 2 010 Bid document is expected to be issued to pre-qualified bidders on 18 January 2011 C#8a & C#08b Procurement of DI pipes for Distribution Area ( about 1000km) Jan-2012 Mar-2015 Dec-2010 Jun-2013 Tender noticeiss ued on 02 September 2010 Bids are due on 02 November 2010 19. The further case of the respondents is that under the terms and conditi ons of the loan Agreement, the bid documents for contract package No. 8a and 8b, the contract package of the Water Supply Project for procurement of DI pipes which is the subject matter of the instant writ petition , were prepared in ter ms of the relevant JICA sample documents and guidelines, the draft bid document s were forwarded to the Chief Representative of the JICA India office for the pe rusal and concurrence of JICA, as evident from Annexure-B to the affidavit in o pposition. 20. On 18.8.2010, the Chief Representative of JICA informed the Chief Exec utive Officer, GMDA, the respondent No.6 herein, requesting the GMDA to incorpor ate the recommendation, mentioned, inter alia, the analysis on compliance with JICA procurement guidelines and analysis on evaluation criteria and submit a co mpliance report along with a revised bid documents to the said Chief Representa tive of JICA. 21. In response to the aforesaid letter dated 18.8.2010, the OSD & Contract Manager, PIU for JICA funded Guwahati Water Supply Project, submitted the draft bid documents vide his letter dated 27.8.2010, Annexure-D to the affidavit in o pposition. Thereafter, the concurrence of the bid documents was granted by the J ICA vide its letter dated 1.9.2010 wherein it is mentioned , inter alia, in ac cordance with Schedule 4, Section 3(2)(b) of the Loan Agreement No. ID-P 201 da ted March 31, 2009 between Japan International Cooperation Agency and the Presi dent of India that they have no objection to the bid documents as proposed by GM DA for the contract package mentioned therein subject to GMDA allowing for si xty days time for submission of bids. 22. It has been further stated that in accordance with the Loan Agreement, p rior to opening of the price proposals, GMDA was requested to submit the resul ts of the evaluation of the Initial filter and technical bids to JICA for concur rence. 23. On 2.9.2010, the OSD &