IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:14/10/2004 CORAM THE HONOURABLE MR.JUSTICE N.DHINAKAR AND THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA WRIT APPEAL NO.4103 OF 2003 AND W.P.NO.27163 OF 2003 and W.P.M.P.NOS.33112 of 2003 & 31700 of 2004 W.A.No.4103 of 2003: The Chennai Metropolitan Water Supply and Sewerage Board, No.1, Pumping Station Road, Chintadripet, Chennai-600 002, rep. by its Managing Director .. Appellant -Vs- 1. M/s.Khrunichev State Research and Production Space Centre, Russian Federation 121087, Moscow, Novozavodskaja Street, 18 rep. by its Power Agent, Subramanian, P.Thrivikraman Sole Proprietor, First Planet Engineering, C-1, Parsn Guruprasad, 432, T.T.K.Road, Chennai-600 018. 2. State of Tamil Nadu, rep. by its Secretary, Municipal Administration And Water Supply Department, Secretariat, Fort St.George, Chennai-600 009. .. Respondents For Appellant :: Mr.N.R.Chandran, AG, assisted by D.Krishnakumar,SplGP Mr.A.L.Somayajee, Addl.A.G. for Mr.K.N.Pandian For Respondents :: Mr.R.Parthasarathy for M/s.Sathish Parasaran Prayer: This Writ Appeal is preferred against the order passed by the learned Single Judge dated 15-12-2003 made in W.P.M.P.No.33211 of 2 003 in W.PNo.27168 of 2003. W.P.No.27168 OF 2003: 1. M/s.Khrunichev State Research and Production Space Centre, Russian Federation 121087, Moscow, Novozavodskaja Street, 18 rep. by its Power Agent, Subramanian, P.Thrivikraman Sole Proprietor, First Planet Engineering, C-1, Parsn Guruprasad, 432, T.T.K.Road, Chennai-600 018. .. Petitioner -Vs- 1. State of Tamil Nadu, rep. by its Secretary, Municipal Administration And Water Supply Department, Secretariat, Fort St.George, Chennai-600 009. 2. The Chennai Metropolitan Water Supply and Sewerage Board, No.1, Pumping Station Road, Chintadripet, Chennai-600 002, rep. by its Managing Director .. Respondents For Petitioner :: Mr.R.Parthasarathy for M/s.Sathish Parasaran For Respondents :: Mr.A.L.Somayajee, Addl.A.G. for Mr.K.N.Pandian for R2 Mr.N.R.Chandran,A.G.,for R1 assisted by D.Krishnakumar, Spl.G.P. Prayer: This Writ Petition is filed under Article 226 of the Constitution, praying for issuance of Writ of Certiorarified Mandamus, to call for the records comprised in 2nd respondent's Notification dated 22-9-200 3 and quash the same and consequently to direct the respondents to evaluate the petitioner's tender bid for a 300/200/100 MLD Sea Water Desalination Plan proposed at Minjur, Chennai on Design, Build, Own, Operate and Transfer (DBOOT) basis and to accept the same without insisting on the furnishing of EMD by the petitioner or otherwise refusing to consider the petitioner's tender on the ground of the petitioner being the sole tenderer. :COMMON JUDGMENT F.M.IBRAHIM KALIFULLA, J. The Writ Appeal has been preferred by the Chennai Metropolitan Water Supply and Sewerage Board (herein after called 'CMWSSB') as against the interim order of the learned Single Judge dated 15-12-2003 in W.P.M.P.No.33211 of 2003 in W.PNo.27168 of 2003, in and by which, the learned Single Judge passed orders making the interim stay absolute in respect of confirmation of the re-tender Notification pertaining to the establishing of 300/200/100 MLD Sea Water Desalination Plan at Minjur, Chennai. 2. When the Writ Appeal was posted for admission, having regard to the nature of the issue involved, the main Writ Petition itself was directed to be posted. Thereafter, a connected public interest litigation filed by one of the Advocates in W.P.No.38684 of 2003 was also linked along with the Writ Appeal. However, when that Writ Petition, namely, W.P.No.38684 of 203 was taken up for hearing on 7-10-2004, the petitioner therein expressed his desire to withdraw the Writ Petition and accordingly, that Writ Petition was dismissed as withdrawn. Therefore, we are now concerned only with the Writ Appeal as well as the main Writ Petition. 3. The Writ Appeal is against the interim order and therefore, the disposal of the Writ Appeal depends upon the disposal of the Writ Petition. 4. We, therefore, heard the submissions of the learned counsel made on the subject matter of the Writ Petition. In this order, we refer to the status of the parties as described and narrated in the Writ Petition. 5. The prayer of the petitioner in the Writ Petition is, for the issuance of Writ of Certiorarified Mandamus, to call for the records of the Notification dated 22-9-2003 issued by the second respondent, quash the same and consequently direct the respondents to evaluate the petitioner's tender bid for 300/200/100 MLD Sea Water Desalination Plan proposed at Minjur, Chennai on Design, Build, Own, Operate and Transfer (DBOOT) basis and accept the same without insisting on the furnishing of EMD by the petitioner or otherwise refusing to consider the petitioner's tender on the ground that he was the sole tenderer. 6. Based on the averments and materials placed before us, it can be culled out that there was a publication on 2-5-2003, inviting tenders for implementing a 300/200/100 MLD Sea Water Desalination Plant at Minjur, Chennai on Design, Build, Own, Operate and Transfer (DBOOT) basis (herein after referred to 'DBOOT'). The above said Tender provided for three options for erecting the plants, viz., either i) 100 MLD or ii) 200 MLD or iii) 300 MLD Sea Water Desalination at Minjur, Chennai by any of the bidders' technology from their own funds. 7. The technical criteria and the financial criteria to be submitted were also specified in the notice inviting tenders. Apart from the above, it was specifically provided that all bids must be accompanied by a bid security (EMD) of a value of Rs.50 lakhs for option (i), Rs.100 lakhs for option (ii) and Rs.150 lakhs for option (iii) in the form and manner specified in the bid document and it must be delivered along with the bids. It was also stipulated that the above said bid security amount should be enclosed for each option individually for which the bidder choose to bid. CMWSSB reserved its right to reject any or all the bids without assigning any reasons thereof. However, it was mentioned that all bid clarifications would be provided by CMWSSB. 8. One other relevant factor in the notice inviting tenders was, that the Technical Bid envelope and Price Bid envelope must be placed in two independent covers duly sealed and delivered with the Contracts and Monitoring of CMWSSB. It was further stipulated that the respective bid security (EMD) amount to be accompanied, the bids should be submitted in a separate sealed cover and kept in the Technical bid envelope. As per the notice inviting tenders, the bids received after the specified date and time would be summarily rejected. 9. The scope of work to be undertaken by the selected bidder was to carry out and complete the work of implementing of Sea Water Desalination plant on DBOOT basis at Minjur, Chennai which included the provision of required pipeline of appropriate size, pumping machinery and construction of pump house to project the water to the existing underground reservoir of CMWSSB at Red Hills which is located at about 32 k.ms. away from the site. The whole contract was a bulk water purchase agreement, by which, CMWSSB agreed to purchase desalination water up to minimum of 80% of the installed capacity of plant on a 'take or pay' basis and such agreement would be for a period of 25 years and extendable thereafter on mutually agreed terms and conditions. The CMWSSB agreed to provide the required land of 60 acres at Minjur on lease basis on a nominal fee of Rs.1000/- per month. A separate lease agreement was to be entered with CMWSSB. 10. Again in the 'Procedure for Bidding', it was specifically stipulated that in order to be eligible for bidding, each bidder on its own or on a joint venture basis should satisfy the minimum eligibility criteria as laid down in the applicable "Notice Inviting Tender" issued by CMWSSB. 11. A reading of the stipulations contained in the Notice Inviting Tender, disclose that apart from technical criteria and financial criteria, the furnishing of bid security depending upon the options for which the bid is to be submitted was made a condition precedent for accepting the tender. The tender documents were to be submitted in a sealed cover before 15.00 hours on 27-8-2003. It also provided for a pre-bid meeting on 18-6-2003 at 11.00 a.m. to clarify the issues and to answer queries on any matter that may be raised at that stage pertaining to the bid. Clause 13.3 of the Procedure for Bidding in the book, containing all documents relating to the bid also stated that apart from the pre-bid meeting the Board may entertain further queries from the bidders if they are submitted atleast 20 days before the due date of submission of the bid. 12. Under Clause 15.2 of the Procedure for Bidding, it is specifically mentioned that the bid should be submitted exactly as per the procedures and requirements stipulated therein. 13. Under Clause 16.1, there was a minor modification as regards the submission of Initial Bid Security (EMD), by which, it was provided that if a bidder quotes for more than one option, the Initial Bid Security to be deposited by him would correspond to the highest capacity option quoted by the bidder. 14. Under Clause 16.2, it is mentioned that after the opening of the Technical Bid, the technically qualified bidders whose price bid is proposed to be opened by MCWSSB, should submit a Final Bid Security for a value of Rs.250 lakhs for 100 MLD plant, Rs.500 lakhs for 200 MLD plant and Rs.750 lakhs for 300 MLD plant. Here again, it was mentioned that if a bidder was found technically qualified for more than one option, the Final Bid Security to be deposited by him would correspond to the highest capacity option. 15. Under Clause 16.5, it is provided that the Initial Bid Security of technically qualified bidders would be returned once they furnished the requisite Final Bid Security. Clause 16.8 which is more relevant for our present purpose, specifically provides that any bid submitted without the Bid Security in the form as specified in the " Request for Proposal" (hereinafter referred to ''RFP'') would be summarily rejected. 16. Clause 16.9 is the forfeiture clause. Clause 21.1 reiterated that the bid should be submitted in three options, viz., Part (A) Bid Security, Part (B) Technical Bid and Part (C) Price Bid. The specific descriptions to be shown in the respective envelopes for the three different Parts have also been described under the said Clause. The prescription made in the Notice Inviting Tenders to the effect that the Bid Security envelope should be placed inside the Technical Bid envelope also thus stood modified. In other words, the three different Parts, viz., Part A, Part B and Part C were to be submitted in three independent envelopes. 17. The Form and Evaluation of Proposals as contained in the 'RFP' dealt with the manner in which the various Parts of the Bid should be submitted by a bidder as well as the procedure of the 'Bid Opening and Evaluation. In the 'Bid Opening and Evaluation part, as first stage of Evaluation, it is stipulated that CMWSSB would first open the Bid Security and technical Bid envelopes and assess whether the bidder fulfils the minimum qualifying criteria and whether the bids are responsive. It is also stipulated therein that the Board should assess whether the proposal is in accordance with the guidelines stipulated in the 'RFP' document, viz., whether the Initial Bid Security is in the required form and whether the various other documents required are submitted. As per the said Clause, if the bidder failed to fulfil the minimum qualifying criteria, he would stand disqualified and his bid has to be returned. 18. Necessary formats in which the various details as regards the Technical Experience, Financial Capacity, Acknowledgement of 'RFP' Document and intent to bid, Letter of Conformity, Format of Bank Guarantee for Initial Bid Security and Final Bid Security, Price Schedule to be filled up by the Bidder and also the site map were all provided in Appendix 1 to 8 respectively. 19. It is in the above said background of the stipulations contained in the ''RFP'', the case of the petitioner requires to be considered. In the above background, the other facts relating to the Bid Proposal submitted by the petitioner are also required to be stated. 20. The petitioner is stated to have expressed its option to participate in the above said Bid. The representative of the petitioner attended the pre-bid meeting on 18-6-2003 and it is relevant to state that in that meeting, no query was raised on behalf of the petitioner. To a specific question put by us to the learned counsel appearing for the petitioner, it was admitted that no query as regards the submission of the EMD was raised on behalf of the petitioner in the said meeting. On 21-6-2003, there was a communication from the Consulate General of Russian Federation in Chennai to the Managing Director of CMWSSB which was to the following effect:- "Dear Sirs, We are thankful to you for the opportunity given to M/s.Khrunichev Centre, a Russian Government body to participate in above tender. As a Russian Government body, they are exempted from tender bonds, e.g.projects with ISRO, MOD etc. Hence we request you to kindly approve and exempt them from submission of tender bonds. Thanking you, yours truly, Consul General of the Russian Federation in Chennai. M.Mgeladze." 21. It is relevant to mention that the said communication was not sent by the petitioner. On 11.8.2003, the CMWSSB replied to about 171 queries raised by different parties, answering the said queries. It is stated that about 26 bidders purchased the bid documents. On the last date for submission and opening of the bid viz., 27.8.2003, only two bids were received. Of which, one was the petitioner and the other was stated to be one Bakeman Projects Limited, Israel. According to CMWSSB, the bids were opened and scrutinised by Tender Scrutiny Committee on 27-8-2003 and since both the bids did not contain E.M.D., i.e., Initial Bid Security,, both the tenders were rejected. The remarks of the Tender Scrutiny Committee was stated to have been placed before the Tender Committee on 30-8-2003 when the Tender committee passed a resolution accepting the recommendations of the Tender Scrutiny Committee to reject both the tenders on 1-9-2003. Thereafter on 5-9 -2003, the CMWSSB held its Board Meeting and resolved to accept the recommendation of the Tender Committee to reject both the tenders. It was only thereafter on 22-9-2003, the publication of Notice inviting fresh tenders were called for, which provoked the petitioner to file the present Writ Petition. 22. The Writ Petition came to be filed on 25-9-2003 and the interim stay of confirmation which was initially granted on 29-9-2003 came to be affirmed subsequently on 15-12-2003. It is stated that in the re-tender process, the tender documents were opened on 18-12-2003 and that the petitioner who submitted its tender on the second time also did not furnish necessary EMD, namely, the Initial Bid Security. 23. Certain other relevant factors which are also required to be stated, are that the petitioner is described as M/s.Khrunichev State Research and Production Space Center, Russian Federation-121087, Moscow, Novozavodskaja Street-18. It is stated to have been represented by its Power Agent, one Thiru Subramaniam P.Thrivikramam as Sole Proprietor, First Planet Engineering, Chennai-18. The said Thiru Subramaniam P Thrivikramam has sworn to the affidavit filed in support of the Writ Petition. He also claims himself to be duly constituted Power of Attorney acting for and on behalf of the petitioner. 24. At this juncture it will have to be stated that when we called upon Mr.R.Parthasarathy, learned counsel for the petitioner to produce the Power of Attorney said to have been executed in his favour of the deponent, he submitted that such power was by way of a National Agent Agreement as between the petitioner and the Proprietory concern, called the First Planet Engineering, belonging to the deponent. A copy of which had been filed in the typed set of papers filed in the Writ Petition which is dated 10-10-2001. 25. A perusal of the said agreement only shows that it provided for the terms and conditions as regards the manner in which the business as between the petitioner and the concern called Frist Planet Engineering is to be regulated. However, Mr.R.Parthasarathy, later submitted that the Power of Attorney in Russian language was submitted in Part A of the Bid documents. We looked into the said document as found in Part A which had been written in a language claimed to be Russian language. In any event, it is relevant to state that neither the National Agent agreement dated 10-10-2001 or the so called deed of Power of Attorney in Russian language were not executed in the required stamp value in respect of a power of attorney to be valid as prescribed in the Stamp Act. 26. By virtue of the nature of the transactions involved in this bid, the Power claimed by the petitioner would fall within Article 48( b) of the Indian Stamp Act, as and by which, the said power should have been made in a Rs.15/- non-judicial stamp paper as the petitioner is stated to have authorised the deponent to the affidavit as well as the Proprietory concern to act in a single transaction than what has been prescribed under Article 48(a) or on a Rs.20/- valued Stamp paper, if it is cured by the Residuary Article 48(c). In any event, it is not known whether the said Power of Attorney empowered the deponent to the affidavit to launch and pursue the litigation on behalf of the petitioner. Admittedly, there is no Power of Attorney filed by the petitioner in this Writ Petition authorising the deponent to the affidavit to launch the present writ proceedings. Therefore, in our opinion at the very out set, it will have to be held that the Writ Petition filed by its so called Power of Attorney holder cannot be maintained at all and on that score, this Writ Petition is liable to be rejected in limine. However, we do not propose to reject the Writ Petition on that technical ground. Therefore, we proceed to decide the issue involved on merits. 27. Mr.R.Parthasarathy, learned counsel for the petitioner in his submissions, raised the following contentions: 1) the submission of Initial Bid Security by way of EMD was not a pre-requisite for a tender, therefore, non submission of EMD will not invalidate the tender submitted by the petitioner; (2) even if the rule provided for furnishing of Initial Bid Security in short, EMD, it was not an invoidable Rule; (3) when the petitioner raised the issue relating to nonsubmission of EMD by contending that it was a Government of Russia Enterprise and that it already had exemption when it performed certain contracts for ISRO and other Central Government Organisations, the same should have been considered as a query and answered as provided in the procedure in Clause 13.3. of the Procedure for Bidding. Therefore, the petitioner's bid ought not have to been rejected; (4) the petitioner offered to supply water at a competitive rate which ought to have been considered in Public Intent in the light of severe water crisis prevailing in the city of Chennai; (5) the rejection of the petitioner's tender was tainted with mala fides since the petitioner refused to accede to the demand of bribe by the highly placed officials of CMWSSB as well as the concerned Ministers; and (6) the process of opening of tender was not carried out in the presence of Tender Scrutiny Committee as prescribed under the provisions of the Tamil Nadu Transparency in Tenders Act, 1998. The learned counsel relied upon the observations of the learned Single Judge in his order dated 15-12-2003 in support of his submission. The learned counsel relied upon "AIR 1990 SC 958 (M/S.G.J. FERNANDEZ versus STATE OF KARNATAKA AND OTHERS)", "(1991)3 SCC 273 (PODDAR STEEL CORPORATION versus GANESH ENGINEERING WORKS AND OTHERS) and (2001)8 SCC 491 (UNION OF INDIA AND OTHERS versus DINESH ENGINEERING CORPORATION AND ANOTHER)" in support of his submissions. 28. As against the above submissions, Mr.A.L.Somayaji, learned Addl.Advocate General submitted that furnishing of Initial Bid Security was a pre-condition and therefore CMWSSB was justified in rejecting the petitioner's tender summarily. 29. As regards the exemption claimed by the petitioner, the learned Addl.Advocate General would submit that at no point of time either prior to the submission of the tender or on the date of opening of the tender, any general order of exemption as provided under the provisions of the Tamil Nadu Transparency in Tenders Act, 1998 was produced by the petitioner. In fact, according to the learned Addl.Advocate General, the so called letter said to have been issued by ISRO, dated 6-8-2003 was found to be a forged one, inasmuch as the authorities of ISRO themselves have confirmed that such a communication never emanated from their Office. As regards the non-communication of rejection order, the learned Addl.Advocate General would submit that there was no obligation to communicate the order of rejection and that in any event, the petitioner was duly informed of the rejection which was also acknowledged by the petitioner as reflected in the petitioner's own communication dated 24-9-2003 addressed to the Superintending Engineer of CMWSSB. 30. As regards the contention of mala fides and demand of illegal gratification, the learned Addl.Advocate General would state that in none of the correspondence to the CMWSSB, there was any reference to any particular individual or officers or the concerned Ministers who is said to have made any demand of bribe and therefore, the said submission does not merit any consideration. 31. As regards the constitution of Tender Scrutiny Committee, the learned Addl.Advocate General placed before the Court the concerned proceedings of the CMWSSB constituting the Tender Scrutiny Committee and also submitted that the tender documents were opened in the presence of the members of the Tender Scrutiny Committee who have also initialled in all the tender documents perused by them. 32. When the learned counsel for the petitioner produced a xerox copy of a communication dated 12-9-2003 said to have been sent by First Planet Engineering to the Hon'ble Chief Minister in the course of the hearing of this Writ Petition on 7-10-2004, in order to show that there was a reference to one Mr.Mohan Raghavan who made a demand of bribe from the petitioner as well as from other senior Russian Diplomats claiming himself to be a representative of the Managing Director and senior officials of CMWSSB, the learned Addl.Advocate General pointed out that this communication has been suddenly and surprisingly produced on behalf of the petitioner for the first time and that there was no reference to the said communication in any of the affidavits filed by the petitioner in this Court. He also pointed out that there was also no proof for having sent such a communication said to have been forwarded to the Hon'ble Chief Minister. 33. As regards the contention that the petitioner's query relating to exemption was not duly replied, the learned Addl.Advocate General submitted that that cannot be construed as a query as the same did not relate to the technical aspects of their bid. According to him, when the CMWSSB replied as many as 170 queries of 26 bidders and when the Initial Bid Security was a pre-condition, there was no question of the said issue being treated as a query as claimed by the petitioner. According to the learned Addl.Advocate General, the said contention of the petitioner cannot also be considered. The learned Addl. Advocate General further submitted that on the opening date of the tender, namely, 27-8-2003, the petitioner's representative was present and the tender documents were opened in the presence of the members of the Tender Scrutiny Committee as disclosed by their initials found on the Tender Documents. The learned Additional Advocate General also brought to our notice the common supporting affidavit filed by the Tender Scrutiny Committee members in support of his submission. The learned Addl.Advocate General relied upon "2002(1) CTC 88 (BALCO EMPLOYEES, UNION (REGD.) versus UNION OF INDIA), 2004(2) CTC 221 ( DIRECTORATE OF EDUCATION AND OTHERS versus EDUCOMP DATAMATICS LTD. AND OTHERS) and (2000)5 SCC 287 (MONARCH INFRASTRUCTURE (P) LTD., versus COMMISSIONER,