Case: MUNICIPAL CORPORATION Vs. BVG INDIA LIMITED

2. The Order dated 07.04.2016 passed by the High Court of Madhya Pradesh, Bench at Indore, allowing the Writ Petition No. 4676 of 2015 filed by B.V.G. India Limited, Pune (respondent no.1 in the civil appeal arising out of SLP(C) No. 11967 of 2016), consequently setting aside the contract awarded in favour of Global Waste Management Cell Private Limited (respondent no. 3 in the civil appeal arising out of SLP(C) No. 11967 of 2016) by Ujjain Municipal Corporation for door to door collection and transportation of Municipal Solid Waste, is the subject matter of these appeals.Brief facts leading to these appeals are as under:Ujjain Municipal Corporation (Appellant in civil appeal arising out of SLP(C) No. 11967 of 2016) had issued Notice Inviting Tender (fordated 01.05.2015 for the appointment of an agency to carrySolid Waste Door to Door Collection andHowever, a corrigendum was issued and the date of submitting online tenders was extended up to 01.06.2015. The opening of the technical bid was fixed for 02.06.2015 and the opening of the financial bid on 04.06.2015. Three bidders remained for consideration of the award of tender by the Municipal Corporation. The technical bids of the parties were analysed thoroughly by the technical expert and marks were awarded as per the specifications of the NIT.Clause 9 of the eligibility criteria of the NIT permitted a consortium of two members, but with the distinct experience requirement on the subject matter. Article III of the NIT specified that technical eligibility would have a weightage of 80% and weightage for financial score was 20%. The marks obtained in the technical evaluation would contribute to 80% and financial evaluation would contribute to 20% of the final marks for deciding the L1 bidder. The technical parameters which were required to be measured were also indicated in Article III of the NIT. The financial bids of only those bidders who secured at least 60% marks in the technical evaluations would be opened.The tender was to be awarded based on the final score arrived at by taking the total of the weighted scores of technical and financial evaluations as per the criteria mentioned in the NIT at Article III. Respondent no.1 scored low on technical evaluation inasmuch as it got 58.94 in the weighted score, whereas the successful bidder i.e. respondent no. 3 got a weighted technical score of 67.36. On a final analysis based on technical and financial weighted scores, Global Waste Management Cell Pvt. Ltd. got first rank (L1 bidder) amongst the three bidders by getting the highest score. Hence, it was awarded the contract. Such award of contract was questioned by the unsuccessful bidder (B.V.G. India Limited, L2 bidder) before the High Court by filing the Writ Petition, which came to be allowed by the impugned judgment.During the pendency of these matters, on 26.04.2016, this Court granted an interim order in favour of the successful bidder, namely respondent no. 3, staying the operation of the impugned order of the High Court, consequent upon which the successful bidder was awarded the contract and is discharging the duties assigned.

Court's reasoning:
21. Thus, only when a decision making process is so arbitrary or irrational that no responsible authority proceeding reasonably or lawfully could have arrived at such decisions, power of judicial review can be exercised. However, if it is bona fide and in public interest, the Court will not interfere in the exercise of power of judicial review even if there is a procedural lacuna. The principles of equity and natural justice do not operate in the field of commercial transactions. Wherever a decision has been taken appropriately in public interest, the Court ordinarily should exercise judicial restraint. When a decision is taken by the concerned authority upon due consideration of the tender document submitted by all tenderers on their own merits and it is ultimately found that the successful bidder had in fact substantially complied with the purpose and object for which the essential conditions were laid down, the same may not ordinarily be interfered with.The contentions of Shri Banerji cannot be accepted, because the bid should be accepted not only based on the outcome of the financial bid, but also based on the evaluation of the technical bid. Moreover, in the matter on hand, the technical bid will have 80% marks whereas the financial bid will have 20% marks. This clearly shows that the municipal corporation has given due importance to the quality and not the financial aspect, keeping in mind the object for which bids are invited. A Constitution Bench of this Court in Trilochan Mishra Etc v. State of Orissa & Ors (1971) 3 SCC 153  held that the Government most certainly has a right to enter into a contract with a person well known to it, and especially one who has faithfully performed its contracts in the past in preference to an undesirable or unsuitable or untried person.In the matter on hand, admittedly, the successful bidder was more technically qualified and it got more marks. Normally, the contract could be awarded to the lowest bidder if it is in the public interest. Merely because the financial bid of BVG India Ltd. is the lowest, the requirement of compliance with the Rules and conditions cannot beAs rightly contended by respondent no. 3, a statutory authority granting licences should have the latitude to select the best offer on the terms and conditions prescribed. The technical expert in his report categorically statedthe above aspects demand high level of Technicalities and Expertise rather than just depending on lowest financial price quote for a materialclarified earlier, the power of judicial review can be exercised only if there is unreasonableness, irrationality or arbitrariness and in order to avoid bias and mala fides. This Court in Afcons Infrastructure (supra) held the same in the followingIn other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision.Evaluating tenders and awarding contracts are essentially commercial transactions/contracts. If the decision relating to award of contract is in public interest, the Courts will not, in exercise of the power of judicial review, interfere even if a procedural aberration or error in awarding the contract is made out. The power of judicial review will not be permitted to be invoked to protect private interest by ignoring public interest. Attempts by unsuccessful bidders with an artificial grievance and to get the purpose defeated by approaching the Court on some technical and procedural lapses, should be handled by Courts with firmness. The exercise of the power of judicial review should be avoided if there is no irrationality or arbitrariness. In the matter on hand, we do not find any illegality, arbitrariness, irrationality or unreasonableness on the part of the expert body while in action. So also, we do not find any bias or mala fides either on the part of the corporation or on the part of the technical expert while taking the decision. Moreover, the decision is taken keeping in mind the public interest and the work experience of the successful bidder.Since Global Waste Management Cell Private Limited, i.e., Appellant in Civil Appeal arising from SLP (C) No. 11967 of 2016 secured the highest score, i.e., 84.36, it emerged as the overall eligible bidder for awarding the project as per the terms of NIT. Global Waste Management Cell Private Limited has experience of 10 years and has demonstrated an ability for good responsiveness to tender. Consequently, it was declared L 1 as per the terms of the NIT. As a decision was qualitatively arrived at by the technical expert respondent no. 2, the High Court need not have gone into the merits of such decision as an appellate authority, especially when there was no bias or mala fide.40. It is necessary to note that in Annexure 1 to the NIT at serial no. 11, the bidder was required to set out details of any other company/firm involved as a consortium member to which respondent no.1 – BVG India Limited replied in the negative, which means no other company/firm was involved as a consortium member with BVG India Limited in the process in question. In other words, BVG India Limited submitted the bid on its own unaccompanied by any of the consortium member. Despite the same, BVG India Limited (respondent no.1) furnished the experience certificate of BVG Kshitij Waste Management Services Private Limited. No information whatsoever was given of the relationship/linkage of BVG Kshitij and respondent no.1 – BVG India Limited. Therefore, reliance placed by the respondent no.1 on the purported experience certificate issued in the name of BVG Kshitij Waste Management Services Pvt. Limited would not come to the help of the respondent no.1 to show its work experience. The Pimpri Chinchwad Municipal Corporation (PCMC) Certificate dated 24.10.2013 is in Marathi and the same discloses that the work order was issued on 2.3.2012. The PCMC Certificate thus neither shows three years? experience of BVG India Limited nor that BVG India Limited was carrying out garbage/waste collection of more than 300 MT per day. Since respondent no.1 has categorically mentioned in its bid under thehat no other company (either joint venture or consortium) is involved with BVG India Limited, respondent no.1 – BVG India Limited could not have relied upon the purported experience certificate issued in the name of BVG Kshitij Waste Management Services Pvt. Ltd. Other certificates submitted by the respondent no.1 also did not satisfy the eligibility requirement.41. Moreover, the certificate dated 21.4.2015 relied upon by the High Court in paragraph 16 of the impugned judgment was not part of the original bid document submitted by BVG India Limited and it was submitted before the High Court for the first time as per annexure P6 of the writ petition. Since such certificate was not part of the original bid document, the High Court was not correct in relying upon such certificate produced by BVG India Limited for the first time before it. The Courts will not permit any of the participants in the tender process to alter or supplement the bid document. In the absence of any document evidencing the experience in the field in question in favour of BVG India Ltd., the appellants are justified in contending that the High Court is not correct in increasing the marks from 5 to 7 under the head of number of years of experience and expertise. So also, the High Court was not correct in increasing the marks from 10 to 15 so far as the quantity of municipal solid waste handled per day through door to door collection is concerned. In para 26 of the impugned order, the High Court has evaluated technical eligibility on its own as if the appellate authority and has increased the marks of respondent no.1 for experience from 5 to 7 and for quantity handled per day from 10 to 15, as mentioned supra. The High Court?s observation in para 18 that the certificate issued by PCMC ought to have been considered because it shows the collection of 335 MT per day of municipal solid waste, appears to be incorrect in the light of our discussion made in theparagraphs. So far as the three documents relied upon by respondent no.1 in respect of CIDCO are concerned, those documents do not state that BVG India Limited was handling 300 MT per day municipal solid waste on door to door basis.42. The High Court was also not justified in increasing the marks for responsiveness from 5 to 10. The High Court relied upon the documents pertaining to BBMP and PCMC and has increased the marks from 5 to 10. In our considered opinion, the High Court could not have increased the marks for responsiveness as BVG India Limited had suppressed the fact that it had received show cause notices from BBMP and other corporations. The format ofon page 26 of the NIT indicates that the fourth column is reservedat the tenderer is or has been involved in. Point 4of the same?In how many of your MSW handling/processing projects, show cause notices have been issued for breach ofIndia Limited, while submittingleft the litigation column blank, despite the fact that admittedly, 73notices were issued to it by the BBMP. The fact that these notices were issued is not disputed by BVG India Limited. It instead claimed that the issuance ofnotices does not form part of the litigation.It was clearly stated in the NIT that the tenderer was required to reveal thenotices against it. Despite the specific column pertaining to the same in the bid document, respondent no.1 had left the said column blank. Once there is a specific clause requiring the mentioning of thenotices for the breach of contract, it was incumbent upon the tenderer to provide accurate information. As respondent no.1 has not done so, and has suppressed vital information, respondent no. 2 has rightly allotted it 5 marks for the same. As mentioned supra, respondent no.1 submitted an experience certificate issued by the PCMC in favour of one M/s BVG Kshitij Waste Management Services Pvt. Ltd. No material is produced before the Court to show that M/s BVG Kshitij Waste Management Services Pvt. Ltd. is the same as BVG India Limited or that it is a consortium member. In light of specific averment in the bid document by respondent no.1 that there is no other consortium member which has participated in the tender process along with BVG India Limited, the experience certificate issued in favour of BVG Kshitij Waste Management Services Pvt. Ltd cannot be relied upon to fulfil the eligibility criteria by the BVG India Limited. Respondent no.1 has submitted its bid as an individual bidder and not as a consortium and hence the certificate of a third party could not be considered for the benefit of meeting the technical qualification of respondent no.1. In addition to the same, the respondent no.1 had suppressed 73 show cause notices issued against it by BBMP and District Panchayat, Dadra and Nagar Haveli, Silvasa in respect of the work relating to solid waste management. Despite suppression by the respondent no.1, the technical expert from its own sources gathered information and found that 73 show cause notices were issued by the BBMP and others against respondent no.1, which reveal that respondent no.1 had not shown due diligence in the work of door to door collection of solid waste. Hence, the conclusion reached by the High Court that it was not open for the technical committee to suo motu take into consideration the73 show cause notices issued against the respondent no.1 while evaluating the technical bid is not correct. The due diligence and experience of the expert consultant ought to have been appreciated by the High Court keeping in mind the object to which bids were invited. 73 show cause notices issued to respondent no.1 establish that respondent no.1 did not have a good track record and therefore such notices were necessarily taken into consideration by the technical expert. In all fairness, respondent no.1 ought to have disclosed these factors in its bid. In viewin our considered opinion, the High Court was not justified in increasing the marks for responsiveness from 5 to 10.The method for evaluation of the financial bid as applied by the High Court is also not proper, and is illogical. As mentioned supra, the technical expert, in our considered opinion, has rightly applied the following formula in respect of the bidders so far as financial bids are concerned: FL1 x 20 FL2/FL3/FL4 On the other hand, the High Court has redone the evaluating formula in which multiplication of 20 is not adopted: FL1 FL2/FL3/FL4 Since the multiplication of 20 is not adopted by the High Court (the same rightly adopted by the technical expert in respect of the bidders), the same has led to unreasonableness and a travesty of justice. The formula adopted by the High Court does not stand to reason at all. The NIT has prescribed the method of calculation of marks for the financial bid. The lowest bid, i.e., FL1 will be granted 20 marks. Other parties will thereafter be given scores by the formula (prescribed in Clause 3.1.3 of Article III of the NIT), i.e., FL1/FL2 x 20 = FL2?s financial score. In the matter on hand, FL1 of BVG India Limited was 1454, whereas FL2 was 1710, which was of the successful bidder, i.e., Global Waste Management Cell Pvt. Ltd. Thus, 1454 (FL1) divided by 1710(FL2), multiplied by 20 marks, gives 17 marks to Global Waste Management Cell Pvt. Ltd., so far as the financial bid is concerned. Per contra, the High Court has failed to multiply the ratio of financial bids with marks of 20 and thus has erroneously arrived at the score of 0.85 marks instead of 17 marks.46. The High Court observed in para 25 of the impugned judgment that the technical consultant had wrongly relied upon the certificate dated 16.07.2015 issued by Mira Bhayandar to qualify the successful bidder as the technical expert had prepared the technical evaluation report on 6.6.2015. The observation of the High Court was that, on the date of technical evaluation, the certificate issued by Mira Bhayandar was not in existence. Records reveal that the technical expert had not relied upon the certificate dated 16.07.2015. The said certificate was an additional document submitted for the first time before the High Court along with the reply affidavit as per annexures R4 to R6. Whereas, the document submitted in respect of Mira Bhayandar by the successful bidder was a certificate dated 15.1.2015, which was much prior to the technical evaluation report dated 6.6.2015. The same is clear from Annexureof the counter affidavit filed on behalf of the successful bidder. Therefore, the observations and the findings of the High Court in respect of the certificate issued by Mira Bhayandar are not correct.47. In the matter on hand, we do not find either theprocess or the decision to be arbitrary or irrational.48. The authority concerned is in the best position to find out the best person or the best quotation depending on the work to be entrusted under the contract. If a bidder had faced a number ofnotices from various municipal corporations in the matter ofof door to door collection of garbage etc., the Court cannot compel the authority to choose such undeserving person/company to carry out the work. Ultimately, the public interest must be safeguarded. The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously and effectively. The public would also be interested in the quality of work undertaken. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times inredoing the entirework. Lethargy or tardiness in collecting door to door garbage on abasis would definitely lead to increase collection of garbage on the roads and public properties, which leads to health hazards and also reduces the cleanliness of the city. Since the public is directly interested and would be affected if the work entrusted is not carried out appropriately, and as the technical expert has found that respondent no.1 would not be a suitable company to be entrusted the work inasmuch as it had faced 73notices from different Municipal Corporations, the High Court could not have interfered with the decision taken by the authority. In our considered opinion, the High Court has ignored the element of public interest involved in the matter.49. As aforementioned, unless the Court concludes that the decision making process or the decision taken by the authority bristles with mala fides, arbitrariness, or perversity, or that the authority has intended to favour someone, the Constitutional Court will not interfere with theprocess or the decision.50. Thus, the questions to be decided in this appeal are answered as follows: (a) Under the scope of judicial review, the High Court could not ordinarily interfere with the judgment of the expert consultant on the issues of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis ofof the bidder;(b) A bidder who submits a bid expressly declaring that it is submitting the same independently and without any partners, consortium or joint venture, cannot rely upon the technical qualifications of any 3 rd Party for its qualification. (c) It is not open to the Court to independently evaluate the technical bids and financial bids of the parties as an appellate authority for coming to its conclusion inasmuch as unless the thresholds of mala fides, intention to favour someone or bias, arbitrariness, irrationality or perversity are met, where a decision is taken purely on public interest, the Court ordinarily should exercise judicial restraint.