* ^^Ss& ,'.-^^"' 6 ^e ^tf^.-•••" IN THE HIOH COURT OP CHHATnSGARH AT BILASPUR WRIT PETmON { C ) N&. <2^?^ Of 2010 PETmONER: RESPONDENTS: ^' ^s ^' ^' y M/s Shrikishan & Company, a Compafty duly registered under the provisions of Companles Act, through. its Propfietor Bhri Sushil A@rawal S/o ShrUdshan Agrawat, aged abofut 43 years, 97 Jalvihar Cotony, Raipur (CG^. Versus 1. The Union of Indta , through the Secretary, Minist^ of Road Transport aftd Htghways, Shastri Bhawan, New Delhi. 2. The State of Chhattisgarh, fhroiUgh the SecretaJ^, Public Works Department, D.K.S. Bhawan, Mantralay , Raipur» (CG). 3. The En^neer^in-Chief , Public Woffes Departmeftt, Sirpur Bhawan, Raipur,(CG). 4. Chief Eagmeer^ Public Works Department, Slrpur Bhawan, Raipur (CG). 5. The Supermtending Engineer, Mmistry of Road Transport and Highways, 1st Ho^, D- Wmg, Satpura Bhawan/ Madhya Pradesh. 6. M/s Tirypati Buil-Con Pvt Ltd, a Company diily r^stered under the provisions of Companies Act, having its re^stered office at Burhar, District Shahdol, Madhya Pradesh, Itemigh the Director. F^- :^— ^r WRIT PB'nTIQIJUNDER ARTTCT.E 226 OF TOE CONSTlTyT!QN_OFJN^IA HIGH CQURT OF CHHATTISGARH AT BILASPU R DIVISIQN BENCH: Hon'ble Shri I.M. Quddusi & Hon'ble Shri N. K. Agarwal, JJ. l^ W.P.fQ No. 2673of2Q10 Petitioner M/s Shrikishan & Company Versus Respondents The Union of India & others JUDGMENT FOR CONSIDERATIQN Sd/- -^TCTUTTE 27.07.2010 HON'BLE MR. JUSTICEX. K. AGARWAL 5 <^-r<^- Sd/- N.K.Agarwal Judge POST FQR JUDGMENT ON 28th JULY. 2010 8d/- LM. Quddusi Judge {y A 'y^^^^s^ •^^^ \^ HIGH COURT OF CHHATTISGARH : BILASPUR W.P.(Q No. 2673 of 2010 Petitioner M/s Shrikishan & Company Versus Respondents The Union of India & others WRIT PETITION UNDERARTICLES 226 OFTHE CONSTITUTION OF INDIA DB: Hon'ble Mr. I. M. Quddusi, 8& Hon'ble Mr. N. K. Agarwal, JJ. Shri Awadh Tripathi, Advocate for the petitioner. Smt. Fouzia Mirza, Assistant Solicitor General for the Respondent No.l. Shri Chandresh Shrivastava, Panel Lawyer for the State/Respondents No. 2 to5. Shri V. R. Rao, Senior Advocate with Shri A. K. Prasad and Shri 8. Dharmadhikari, Advocates for the Respondent No.6. ORDER ( Passed on thisi-SAday ofJuly, 2010 ) Per I.M.Ouddusi, J. 1. Heard learned counsel appearing for the writ petitioner as well as learned counsel appearing for the respondents. 2. The petitioner, which is a registered company under the Companies Act, 1956, has filed the instant petition being aggrieved by the order dated 14.5.2010 (Annexure P/l), intimating the petitioner by the responderits/State that its bid has been considered as non-responsive in terms of clause 4.5.3(b) of ITB hence the financial bid of the petitioner will not be opened. The petitioner is further aggrieved by the order dated 29.5.2010 (Annexure P/2), intimating the petitioner that it has not been considered fit for review by the evaluation committee of MORTH, New Delhi, on its ^•^ '^' .::.%<a|t '^-;/%^^ ^ \^ representation dated 14.5.2010, therefore, the financial bid of the petitioner will not be opened. Brief facts of the case are that the respondent No.3 invited tenders from the eligible contractors for the work ofwidening of two lane in Km. 0.00 to 63,650 on Tara Premnagar Ramanujnagar Krishnapur Road (Under L.W.E. Project) videN.I.T.dated 19.2.2010 (Annexure P/3). The probable amount ofcontract was Rs. 6100.05 Lacs. Clause 4.5.3 of the ITB provides for General Experience which is quoted as under : <e4.5.3 General Experience The Applicant shallmeet thefollowing minimum criteria: (a) Average annual tujnover (defined as billing for works in progress and completed in all classes of civil engineering construction works only) over fhe last five years of 40 per cent ofthe value contract/contracts appliedfor. (b) Experience in 'successfully completing' at least one contract ofhighway (road and/or bridge works) airport runway ofat least 40 per cent ofthe value of proposed contract within the last fiue years. The works may have been executed by the Applicant as prime contractor or as a member ofjoint venture or sub contractor As sub contractor, he should have acquired the experience of execution ofall major items ofworks under the proposed contract In case a project has been executed by ajoint venture, weightage towards experience of the project would be given to each joint venture inproportion to their participation in thejoint venture. Substantially completed works means those works which are at least 90% completed as one the date of submission (ie. gross value of works done up to the last date of submission is 90% or more of the original contract price) and continuing satisfactorily. For these, a Certificate from the employer shall be submitted along with the application incorporating clearly the name of the work, Contract value, billing amount, date of I ^ .y ^h %&y^^ %^^ . •/^. ^' .y "^y' a^' '^ \^ commencement of works, satisfactory performance of the Contractor and any other relevant information.') Further, in the ITB clause 4.5.4 provides for Personnel Capabilities that the applicant must have suitably qualified personnel to fill the positions, mentioned therein. The applicant will supply information on a prime candidate and an alternate for each position, both of whom should meet the experience requirements specified therein. The petitioner submitted the certificate regarding the experience, issued by the Executive Engineer,P.W.D. DivisionNo.l, Raipur dated 10.6.2009. A perusal of the certificate shows that the contract value of the agreement for which the work executed by the petitioner was Rs. 21,4.1,97,625/-, out of which as on 31.3.2009 the petitioner had performed the work of Rs. 2198.69 Lacs.The petitioner has also submitted a certificate dated 15.3.2010. A perusal of this certificate shows that the contract value of the agreement for which the work executed by the petitioner was Rs. 21,41,97,625/- but it had done the work up to 31.3.2009 to the value of Rs. 2248.69 Lacs only. That too in regard to the work order dated 6.9.2006. Further, it is mentioned that the disposal of final bill is inprogress. The petitioner has also filed a certificate dated 16.5.2010 along with the rejoinder wherein it has been certified by the Executive Engineer, P.W.D. Division No.l, Raipur that in sequence of the earlier certificate dated 15.3.2010, payment of Rs. 2248.61 Lacs has been made to the petitioner in regard to the work completed by the petitioner up to 31.3.2009. The petitioner has also performed the work of Rs. 24.37 lacsin April, 2009. According to this certificate from the year 2006 till the date of issue of the certificate -35^. ^^ "'^. ^^.. '^ f^.. ..,..^^— 1 l^ i.e. 16.5.2010, the petitioner has completed the work and got paymentofRs. 2273.06 Lacs. 8. The technical evaluation committee in its meeting held on 10.5,2010 considered the technical bid of the petitioner and found that fhere was insufficient qualified personal and an intimation was sent by the impugned order dated 14.5.2010 (AnnexureP/l)that as per minutes of the meeting of technical evaluation committee for the work the petitioner is short 02 Nos site engineers, 02 Nos. plant engineers and 01 No. quantity sur^eyor. The petitioner also does npt possess the experience for successful completion of single work ofvalue not less than 40% of the proposed work. Therefore, bid of the petitioner is considered as non-responsive in term of clause 4.5.3(b)oftheITB. 9. Here, it is to be noticed that the probable amount of the contract in the instant NIT was Rs. 6100.05 Lacs. It was fhe condition vide clause 4.5.3 - General Experience, that annual turnover for the last five years should be 40% of the value contract. The 40% comes to Rs. 24.40 Crores but the petitioner had worked to the tuneof Rs. 2248.69 Lacs only as on 31.3.2009. Therefore, the work was treated as less then 40%. Besides that, due to the shortage of suitable qualified personnels also the bid was considered as non-responsive. 10. Learned counsel appearing for the petitioner has drawn attention of this Court towards clause 4.5.2 of the ITB which provides for Base Year and Escalation. It is menfioned therein that the base year shall be taken as (particular year to be mentioned). Following enhancement factors will be used for the costs of works executed .^£^m ^. ^ ^••-^ . ^ ,•-,^^^...11 w and the financial figures to a common base value for works completed in India. Year before One Two Three Four Five multiplying factor 1.10 1.21 1,33 1.46 1.61 Applicant should indicate actual figures of costs and amount for the works executed by them without accbunting for the above mentioned factors. 11. As per the counter affidavit filed by the Respondent No.l/Union of India, in paragraph - 4 it has been mentioned that the petitioner hask enclosed the certificate dated 15.3.2010, obtained from the Executive Engineer, PWD Division No.l, Raipur, in which it has been certified that the work amounting to Rs. 2248.69 Lacs has been executed and the disposal of the final bill is in progress. Since it has not been certified that the work had been completed as on 31.3.2009 and no actual date of completion of the work was mentiQned in the above certificate, therefore, the year ofcompletion ofwork, executed by the petitioner, was taken as 2009-2010 as the certificate was issued on 15.3.2010. Since the present bid is of the year 2009-2010, no escalation factor was applied to the value ofthe work complfeted during the year 2009-2010. In view ofthe above, it cannot be said that in not evaluating the value of the work executed by the petitioner, as above, by applying the clause 4.5.2 of the ITB, the respondents have committed any irregularity. 12. Learned counsel appearing for the respondents/State has drawn attention of this Court towards clause 8.3 of the ITB which provides that the bidder is expected to examine carefully all instructions, lE^^S^^^^BII^^^RSS !%|^^'. |"' !1 I!' p-tt^- ^ L^ 6 \^> conditions of contract, contract data, forms, terms, technical specifications, bill of quantities, forms, Annexes and drawings in the Bid Document. Failure to comply with the requirements of Bid Documents shall be at the bidder's own risk. Pursuant to clause 26 hefeof, bids which are not substantially responsiye to the requirements of the Bid Documents shall be rejecfed. 13. Clause 26 of the ITB is relevant and the same is quoted below : <<26. Examination ofBids and Determination of-Responsiveness. 26.1 During the detailed evaluation of <CTechnical Bidsv the Employer will determine whether each Bid (a) meets fhe eligibility criteria defined in Clause 3 and 4 (b) has beenproperly signed. (c) is accompanied by the required securities and, (d) is substantially responsive to the requirements of the Bidding documents. During the detailed evaluation ofthe "Financial Bidv the responsiveness ofthe bids will be further determined with respect to the remaining bid condition, z.e. priced bill of quantities, teehnical specifications, anddrawings. 26.2 A substantially responsive "Financial Bidv is one which conforms to all the terms, conditions and specifications of the Bidding documents, without material deviation or reseruation, A material deviation or reservation ofthe works (b) which limits in any substantial way, inconsistent with the Bidding documents the Employer's rights or the Bidder's obligations under the Contractor or (c) whose rectification would affect unfairly the competitive position of other Bidders presenting substantially .responsive Bids. 26.3 If the Financial Bid" is not substantially responsive, it will be rejected by the Employer and may not subsequently be made responsive by correcfion or withdrawal ofthe non-conforming deviation or reservation. 14. Learned counsel appearing for the petitioner has raised the objection that the technical bid was not rejected.In our opinion, intimating the petitioner that the bid is considered as non-responsive in terms of clause 4.5.3(b) of the ITB, amounts fo k-B.^ ^o rejection of the bid against which the representation was made by the petitioner on 14.5.2010 and the same was not considered fit for review by the evaluation committee of MORTH and it was communicated to the petitioner vide second impugned order dated 29.5.2010 (Annexure P/2) that the petitioner's financial bid will not be opened. This also amounts to clear-cut rejection of the technical bid, and the petitioner was not found as qualified. 15. Learned counsel appearing for the respondents placed reliance on a decision of Hon'ble Supreme Court in West Bengal Electricity Board Vs. Patel Engineering Co. Itd. and others (AIR 2001 SC 682), and further on a decision of the Apex Court in the matter of Global Energy Itd. and another Vs. M/s Adani Exports Ltd. and others (AIR 2005 8.C. 2653)where in para 12 it was held as under : "10. The principle is, therefore, well settled that the terms ofthe invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms ofthe tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the leamed single Judge passed an interim direction on the very first day of admission hearing of the writ petition and allowed the appellants to deposit the eamest money by fumishing a Bank guarantee or a bankers' cheque till three days after the actual date of opening of the tender. The order of the leamed single Judge being wholly illegal was, therefore, rightly set aside by the Division Bench.)) 16. Hon'ble Supreme Court in Tata Cellular v. Union of India (AIR 1996 SC 11) has explained what is a tender and what are the requisites of a valid tender. It has been held that the tender must be unconditional and must conform to the terms of the obligation and further the person by whom the tender is made must be able ^^^' '^%n.....l'S: '^^w;^^ i!, ii, il 1 ^l and wiling to perform his obligations. It has been further held that the terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. 17. Hon'ble Supreme Courf In Air India Ltd. v. Cochin Internationat Airport Ltd. { 2000 (2) SCC 617 } in para 7 held as under : a7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies ofthe Govemment has been settled by the decision of this Court in Ramana Dayaram Shetty v. Intemational Airport Authority of India { (1979) 3 SCC 489}, Fertilizer Corpn. Kamgar Union (Regd.) v. Unionoflndia { (1981) 1 SCC 568}, CCE v. Dunlop India Ltd. { (1985) 1 SCC260}, Tata Cellular v. Union oflndia {(1994) 6 SCC 651}, Ramniklal N. Bhutta v. State ofMaharashtra { (1997) 1 SCC 134 } and Raunaq intemational Ltd. v. LV.R. Construction Ltd. { (1999) I SCC 492}. The award ofa contt-act, whether it is by a private party or by a public body or the State, is essentially a commercial transaction.In arriving at a commercial decision cpnsiderations which are paramount are commercial considerations. The State can choose its own method to arriveat a decision. It canfix its own terms ofinvitation to tender and that is not open to judicial scrutiny. It can enter into negotiationsbefore finally deciding to accept one ofthe offers made to it Price need not always be the sole criterion for awarding a contract It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable tojudicial review, the court can examine the decision-making process and interfere ifit isfound vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to befair to all concemed. Even when some defect isfound in the decision'making process the court must exercise its discretionary -^s^^^ "^ 't' ^".^ ;%^..^y '^•^ss--^^^" l^ power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not Only when it comes to a cpnclusion that overwhelming publicinterest requires interference, the court should intervene.v 18. Hon'ble Supreme Court in a recent decision in Meerut Development Authority v. Association of Management Studies 8& Anr. (2009 AIR SCW 4623) has iner alia observed as under : (<25. .........There is no difficulty to hold that the authorities owe a duty to act fairly but it is equally well settled injudidal review, the court is not concemed with the merits or correctness of the decision, but with the manner in which the decision is taken or the order is made, The Court cannot substitute its own opinionfor the opinion of the authprity deciding the matter. The distinction between appellate power and ajudicial review is well known but needs reiteration. By way of judicial review, the court cannot examine the details ofthe terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope ofany such enquiry. Ifthe contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then the court cannot act as an appellate court by substituting its opinion in respect of selection made for entering into such contract But at the same time the courts can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative ofArticle 14..,......" \ •.^•^^^ 19. 20. 10 \^ In view of the aforesaid discussion, no case for interference by this Court in exercise of extraordinary jurisdiction conferred td it under Article 226 of the Constitution of India is made out. The writ petition is misconceived and is therefore dismissed. No order as tb costs. Sd/- I.M. Quddusi Judge Sd/- N.K.Agarwal Judge Thalmr