1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 542 OF 2007 WRIT PETITION NO. 542 OF 2007 WRIT PETITION NO. 542 OF 2007 Janak Healthcare Pvt. Ltd., & Ors. .. Petitioners. vs. Municipal Corporation of Gr. Bombay & Ors. .. Respondents. Mr. Chirag Balsara i/by Rajani & Asso. for petitioners. Mr. K.K. Singhavi with Ms. P.A. Purandare for Respondent nos. 1 & 2. Mr. Shyam Dewani i/by P.D. Shah for R. No. 3. Ms. A.B. Shah for Respondent no. 4. Mr. Vaibhav Bagade for Respondent No.5. .. Coram: J.N. PATEL, ACTING C.J. & Coram: J.N. PATEL, ACTING C.J. & Coram: J.N. PATEL, ACTING C.J. & S.C. DHARMADHIKARI, J. S.C. DHARMADHIKARI, J. S.C. DHARMADHIKARI, J. Date: 22nd March, 2007. Date: 22nd March, 2007. Date: 22nd March, 2007. ORAL JUDGMENT (Per J.N. Patel, Acting C. J.) : ORAL JUDGMENT (Per J.N. Patel, Acting C. J.) : ORAL JUDGMENT (Per J.N. Patel, Acting C. J.) : . Heard the learned counsel for the parties. The learned counsel for the respondents waives service and submit that their affidavits in reply be treated as their returns filed at the stage of admission. 2 2. Rule. Rule made returnable forthwith by consent of parties. 3. The petitioners have taken an exception for rejection of their technical bid that the respondent no. 1 found to be non-responsive on their not having signed the tender documents and has sought intervention of this Court in its writ jurisdiction to quash and set aside the said decision and consider the petitioners offer/bid for supply of hospital equipments and other ancillary reliefs sought by them. 4. It is the case of the petitioners that they are engaged in the business of manufacturing and supplying hospital furniture to various renowned hospitals in India and are exporting the same abroad since 1951 and are also having ISO certifications in respect of its products and having turnover of approximately 30 crores per annum. 5. It is the case of the petitioners that in the past deficiencies such as non furnishing of sales tax registration certificate (one of the mandatory requirements) have been pointed out and the same has been rectified by them and no municipal hospital has rejected the petitioners tender on the ground of deficiency in tender form. 3 6. It is the case of the petitioners that respondent no. 1 herein, through the Central Stores Department floated a tender for the supply of furniture at Nair Hospital, vide their tender notice No. CS/OD/ADVT/5/EXP dated 5th October, 2006. 7. It is the case of the petitioners that pursuant to the above, the petitioners deposited earnest money deposit on 16th October, 2006 and on next day i.e. on 17th October, 2006 submitted their tender offer. The said tender offer and booklet containing instructions and articles of agreement was signed by Vice President Sales and Marketing of Petitioner No. 1, on all pages including page no. 10. Page No. 11 was also signed along with three out of four directors of Petitioner No. 1. Since one of the directors was not well, he could not sign the said page no. 11. 8. It is the case of the petitioners that the said tender was complete in all respects and they have enclosed all samples as required under special directives of tenders. All except for the fact that name of Petitioner No. 1 not being filled in column on page No. 10, the offer was complete in all respects, except for the said deficiency which has taken place due to human error in view of past practice of only signing of tender offer. 9. It is the case of the petitioner that 4 respondent no. 1 held a meeting of tenderers on 17th October, 2006 and the same has been attended by Petitioner No. 2, in which he has not been informed about any deficiency in the tender submitted by them and the same has been admitted by Respondent No. 1 at the hearing held on 21st February, 2007. 10. It is the case of the petitioners that there were eight tenderers for aforesaid tender and the Petitioner No. 1 was the only manufacturer participating in it and remaining were traders. 11. It is the case of the petitioners that on 14th February, 2007 they came to know about the standing committee meeting dated 14th February 2007 in which they did not consider the bid of the petitioners and informed that the same was not responsive. Therefore, on the same day petitioner addressed a letter to Chairman of the Standing Committee and requested him to keep on hold its approval to subject tender. According to the petitioner at no point of time prior to 14th February 2007, the petitioners were aware of the aforesaid minor deficiency in the tender and only on 14th February, 2007 they came to know about the same. 12. It is the case of the petitioners that the Respondent No. 1 is seeking to award the said contract to Respondent Nos. 3, 4 and 5 despite the Petitioner No. 1 being the lowest tenderer in respect of 28 out 5 of 31 items quoted by them out of total items required by Respondent No. 1. The petitioners say that the price difference between the said 28 items as quoted by other tenderers is Rs. 1,61,96,456/- i.e. 24.63% between the petitioners offer and recommended price at which the contract is sought to be awarded by the respondent no. 1. It is the further case of the petitioners that the aforesaid action on the part of the respondent no. 1 is in contravention of the circular dated 7th July, 2004, the whole purpose of which is to ensure that there should be competitiveness and bidders are not shut out even though there may be some deficiencies for compliance, it will be open to the Department to call for necessary information/clarification/documents from the bidder before processing further with the evaluation of bid within a period of 7 days from opening of packet A and opening of packet B would be suitably differed in such a case. 13. It is the case of the petitioners that inspite of presence of the representative of the petitioner no. 1 at the meeting of 17th February, 2006, they have not been issued with letter of deficiency, irrespective of the fact that it was mandatory on their part to convey the same within a period of seven days as provided under circular dated 7th July 2004. 14. It is the case of the respondent no. 1 that 6 various technical requirements required to be submitted along with the envelope A relating to prequalification of tender could not be fulfilled by petitioners. It is the case of the respondent no. 1 that the offer of the petitioner no. 1 was conditional as they have varied the description of the goods from the tender specifications by offering to supply goods of different specifications, etc. Out of six tenderers, two have been disqualified as they refused site inspection. One got disqualified due to the fact that the facilities provided by them were not upto the mark. 15. The following respondents were declared successful as their offer was lowest in respect of items shown against their respective names:- Name Item nos. (a) Jeel Enterprise. 6, 8 to 11, 15, 17, 18, 23, 28-32, 34, 36, 37. (b) Techno Craft 1, 2, 5, 12, 14-17, 19, 22, 23, 25 & 31. (c) R.M.M.S.G.S. 3,10,11,18-20, 24 & 33. (Respondent No.4) 16. It is the case of the respondent no. 1 that by not raising any objection or taking any action at the 7 time of opening of prequalification bid itself, the petitioners have impliedly accepted to go out of the tender process being not qualified for want of compliance with various mandatory requirements. 17. It is the case of the respondent no. 1 that there is delay on the part of the petitioners in approaching this Court. According to the respondent no. 1, the tender was submitted by the petitioners on 16th October, 2006 and the offer was valid for a period of 120 days from the date of its submission and the present writ petition came to be filed on 15th February, 2007 i.e. after the offer period expired, after the finalisation of contract rates, and after the packet B came to be opened on 3rd November, 2006. 18. It is the case of the respondent no. 1 that the petitioners have not submitted the PAN card of the company required under clause 8 and failed to submit latest photographs of directors and power of attorney holders. It is the further case of the respondent no. 1 that the general power of attorney which is mandatory to be registered with the respondent no. 1 Corporation is got registered and executed by only one Managing Director instead of two. It is the further case of the respondent no. 1 that the petitioners have not complied with clause 19 of the special instructions to tenders i.e. in case of joint stock company, the contract must be sealed with seal of company in the presence of and 8 signed by two directors or by a person duly authorised to sign contract for company by a power of attorney such power being sealed and signed as aforesaid. It is the case of the respondent no. 1 that the petitioners failed to comply with clause 3 (i) i.e. attestation of photo copies/xerox copies of documents from gazetted officer of State / Central Govt. or not below the rank of Admn. Officer of the 1st respondent Corporation before enclosing the same in envelope A. It is the case of the respondent no. 1 that the petitioners failed to comply with certificate of incorporation and change in name is not attested. It is the case of the respondents that entertaining the present petition will amount to relaxing the mandatory conditions of tenders which is contrary to law. 19. Mr. Chirag Balsara, the learned counsel appearing for the petitioners, submitted that the decision taken by the respondent no. 1 in rejecting the bid of the petitioner by not giving the petitioner an opportunity to rectify the deficiencies, if any, which were found in the technical bid which is referred to as Packet A. It is submitted that in all eight tenderers for the aforesaid tender came to be considered by the respondent no. 1 and as required respondent no. 1 held a meeting of the standing committee of the respondent no. 1 on 17th October, 2006 which was attended by petitioner no. 2 and this fact stands duly established by the attendance sheet which shows that the petitioner 9 no. 2 attended the meeting held on 17th October, 2006 but he was not informed that there was any deficiency in the tender offer submitted by petitioner no. 1. 20. It is the case of the petitioners that it was only on February 14, 2007 that the petitioners for the first time came to know that there was a meeting of the standing committee of the respondent no. 1 held on February 14, 2007 and that the standing committee has not even considered the petitioners bid as it has been informed that the petitioners bid was not responsive and that prior to February 14, 2007 the petitioner at no point of time knew the aforesaid minor technical deficiency in their technical bid. The petitioner has placed reliance on the minutes of the meeting of the standing committee held on 14.2.2007 and particularly item no. 32 where the subject of tender of supply of hospital furniture for Nair Hospital vide case no. CS/22/TDR/PO3 of 2006-07 was taken up for discussion and approval of the standing committee under section 69 (c) as amended of the Mumbai Municipal Corporation Act. It has been pointed out from the minutes of the meeting, which is not disputed by the respondent, and part of the record with respondent no. 1 that the petitioners tender was treated as non-responsive for the only reason that they have not filled page 10 of Article of Agreement as mandatory condition. Mr. Balsara, the learned counsel appearing for the petitioners, has drawn the attention of this Court to a circular u/No. 10 CE/PD/3076/II dated 7.7.2004 which has been issued by the Municipal Corporation of greater Mumbai and in the said circular it has been clearly provided that if any bidder fails to comply with any of the mandatory conditions or fails to submit mandatory information with the bid it will be open to the department to call for necessary information/ clarification / document from the bidder before proceeding further with the evaluation of the bid within a period of seven days from the date of opening of Packet ’A’. Opening of Packet ’B’ will be suitably deferred in such a case. However, no changes whatsoever will be permitted on opening of Packet ’B’. It was, therefore, submitted that in case of the tender, which is the subject matter of the petition, the said circular was duly incorporated in the copy of the specifications and mandatory and other conditions required to be kept in Envelop ’A’ issued by the Municipal Corporation of Greater Mumbai, Central Stores Department and Note 2 of the said specifications and mandatory and other conditions which are annexed as Exhibit B-1 along with the petition reproduces exactly the requirements of the circular dated 7.7.2004 and if this is so, then, it was obligatory on the part of the respondent no. 1 to have made the petitioners aware of the deficiencies, if any, in the tender document and ought to have given an opportunity to the petitioners to comply with the same within seven days from the date of due date and even if they are unable to attend the tender opening process on due date, they should direct 11 their representative to collect the letter of deficiency, if any, within two days of opening date. It is submitted that the bids received from the petitioner no. 1 relating to the tender in question came to be opened on 17th October, 2006 and persons who have responded to the tender were present on 17th October, 2006 and, accordingly, the presence of the representative of the petitioner is also recorded by the respondent no. 1. It is submitted that packet A in respect of the participants came to be opened in the presence of their representatives but nothing was pointed out as regards deficiency, if any, noted in Packet ’A’ i.e. the technical bid to enable the participants, particularly the petitioner, to remove the deficiencies, if any, in terms of the circular dated 7.7.2004 and the copy of the specifications and mandatory and other conditions specified in the tender document. Otherwise there was no reason why the petitioners would not have met the deficiencies i.e. non-filling of particulars in page no. 10 of the bid in Packet "A". It is submitted that if this Court examines the said document it will find that though the petitioners have complied with all the requirements, which is not disputed, probably due to inadvertence the petitioners failed to fill in the name of the proprietor/ Managing Partner/ Managing Director/ Holder of the Business and the subsequent paras relating to the declaration which was highly technical in nature. It is submitted that if the application is read as a whole 12 even such a deficiency cannot be held to be sufficient to reject the tender of the petitioner as non-responsive. 21. Mr. Balsara, the learned counsel for the petitioners, submitted that one of the plea now put forth by the respondent corporation is that on the date of the scrutiny of the tender document, particularly packet "A", came to be placed, the stand taken by the respondent is that the parties were orally informed of the deficiencies and discrepancies, if any, and it was expected of them to have rectified the same. It is submitted that such a plea cannot be sustained in law for the reason that there is no contemporaneous record to show that such an exercise was undertaken while the bids were scrutinised. Otherwise there was no reason why the petitioners would not have rectified such a minor deficiency. Secondly it is submitted that the respondent now cannot take advantage of the same by raising a plea of delay and laches in approaching this Court on the basis that the offer was effective only for 120 days. It is submitted that the petitioner has made a categorical statement that it is only when the matter was taken up by the standing committee for its consideration that the petitioner learnt that their tender has been rejected solely on the ground that their tender is treated as non-responsive as they have not filled page 10 of the copy of the specifications and mandatory and other conditions as per the tender 13 condition and, therefore, the impugned decision of the respondent no. 1 to treat the petitioners tender as non-responsive deserves to be quashed and set aside and the respondent no. 1 should be directed to consider the price bid i.e. Packet "B" of the petitioner. 22. Mr. Balsara, the learned counsel for the petitioners, has also expressed that how the respondent no. 1 can come up with the plea that the petitioner has come for redressal before this Court after Packet ’B’ consisting Price List by each Bidder is opened on 30.11.2006 and after the Corporation has sanctioned the same and that the petitioner after being aware of the price quoted by other bidders has offered that they are ready to supply at the lowest price which cannot be accepted. It is submitted that the contention of the petitioner that his quotation in so far as the price bid is concerned that the Packet "B" was submitted along with Packet "A" and whatever he has offered will be required to be taken into consideration to decide whether the petitioner’s bid is lowest or not. It is submitted that the petitioner is the model employer of repute and is lowest on various counts compared to the price bid of respondent nos. 3 to 5 and in case the petitioner is not permitted to participate in the bid, it would cause loss to the Municipal Corporation as there is a difference of 24.63% between the petitioners offer and the recommended price at which the contract is sought to be awarded by respondent no. 1 in respect of 14 the said 28 items and, therefore, it will also be not proper in the interest of public at large and particularly the respondent no. 1 to ignore the petitioners bid which calls for intervention by this Court. In support of his contention, Mr. Balsara placed reliance on the decision of the US Supreme Court in the case of Vitarelli v. Seaton, 359 U.S. 535 Vitarelli v. Seaton, 359 U.S. 535 Vitarelli v. Seaton, 359 U.S. 535 (1959) (1959) (1959) which has been followed by our Court and one such decision which is cited before us, as an authority on the subject, is the one rendered by the Supreme Court in the case of Dr. Amarjit Singh Ahluwalia, v. The State Dr. Amarjit Singh Ahluwalia, v. The State Dr. Amarjit Singh Ahluwalia, v. The State of Punjab and others, reported in AIR 1975 SC 984 of Punjab and others, reported in AIR 1975 SC 984 of Punjab and others, reported in AIR 1975 SC 984, wherein the question of interpretation of clause 2(ii) of the Government memorandum dated 25.10.1965 fell for consideration of the Supreme Court and the Supreme Court while dealing with the said memorandum dated 25.10.1965 observed that the said memorandum was in the nature of administrative instruction, not having the force of law, but the State Government could not at its own sweet will depart from it without rational justification and fix an artificial date for commencing the length of continuous service in the case of some individual officers only for the purpose of giving them seniority in contravention of that clause. That would be clearly violative of Articles 14 and 16 of the Constitution. The sweep of Articles 14 and 16 is wide and pervasive. By relying on this proposition, Mr. Balsara canvassed before us that arbitrariness should be eliminated of such type and as the respondent no. 1 has failed to process the bids in 15 accordance with their own circular which has been the practice scrupulously followed in the past, there was no reason for the respondent no. 1 to have departed from such a practice as it is depriving the petitioner to participate in the bid or treating his bid as non-responsive. The other decisions on which the petitioner has placed reliance relates to the case of Ramana Dayaram Shetty v. The International Airport Ramana Dayaram Shetty v. The International Airport Ramana Dayaram Shetty v. The International Airport Authority of India and others, reported in AIR 1979 SC Authority of India and others, reported in AIR 1979 SC Authority of India and others, reported in AIR 1979 SC 1628 1628 1628 and Tata Cellular v. Union of India, reported in Tata Cellular v. Union of India, reported in Tata Cellular v. Union of India, reported in AIR 1996 SC 11 AIR 1996 SC 11 AIR 1996 SC 11, which coincidentally has also been relied upon by the respondent no. 1 in support of their defence. Therefore, it is the contention of Mr. Balsara, the learned counsel for the petitioners, that this is a fit case where this Court should intervene in the larger public interest as the decision of the respondent no. 1 in treating the tender of the petitioner as non-responsive is illegal, irrational and suffers from procedural impropriety. Mr. Balsara submits that he need not address this Court on its limitation while exercising its extra-ordinary power of judicial review under Articles 226 and 227 of the Constitution which now stands almost settled by catena of judgments. 23. Mr. Singhavi, the learned Senior Advocate, appearing for respondent no. 1, submitted that there are no allegations made by the petitioners of the fact that the conduct of the respondent in not accepting the 16 tender of the petitioner as non-responsive for the deficiency, where they did not met the mandatory requirement, by no stretch of imagination, can be said to be vitiated by arbitrariness, unfairness, illegality, irrationality or Wednesbury unreasonableness. Mr. Singhavi, the learned Senior Advocate appearing for respondent no. 1, reiterated before us the well known principle that this Court while exercising its power of judicial review can only examine the decision making process and not the merits of the decision itself to find out whether the same is in consonance with Articles 14 and 16 of the Constitution of India. Mr. Singhvi has reiterated the principles laid down in the case of Tata Cellular vs. Union of India reported in (1994) 6 Tata Cellular vs. Union of India reported in (1994) 6 Tata Cellular vs. Union of India reported in (1994) 6 SCC 651 SCC 651 SCC 651. Though the test is whether wrong is of such a nature as to require intervention and that the Court can only set right the decision making process but it cannot substitute its own decision for that of the respondent as judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision making process itself. It is thus different from an appeal. When hearing an appeal, the Court is concerned with the merits of the decision under appeal. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Apart from the fact that the Court is hardly equipped to do