The writ petition under Article 226 of the Constitution of India has been preferred by the petitioner, a company registered under the provisions of the Companies Act, 2013, assailing the decision of ...
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THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH )
WP(C) No. 1242/2021
M/s Yashnand Engineers and Contractors Pvt. Ltd.
A Company duly incorporated under the provisions
of the Companies Act, 2013 as amended,
having its registered office at 214/5, Khyati Complex,
Near Mithakhali Garden, Ellisbridge, Ahmedabad,
Gujarat - 380006 and represented by Shri Devang Shah.
………………Petitioner
-Versus-
1. The State of Assam,
represented by the Commissioner and Secretary to the
Government of Assam, Public Works (Building and NH )
Department, Dispur, Guwahati - 781006, Assam.
2. The Chief Engineer, PWD (Building), Assam,
Chandmari, Guwahati – 781003.
3. The Executive Engineer, GMC Branch Office of the Chief Engineer
PWD (Building), Assam, Chandmari, Guwahati – 781003.
4. The Senior Architect (B/M), office of the PWD (Building), Assam,
Chandmari, Guwahati - 781003.
.….……….Respondents
Advocates :
For the petitioner : Mr. G.N. Sahewalla, Senior Advocate,
GAHC010035172021
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THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH )
WP(C) No. 1242/2021
M/s Yashnand Engineers and Contractors Pvt. Ltd.
A Company duly incorporated under the provisions
of the Companies Act, 2013 as amended,
having its registered office at 214/5, Khyati Complex,
Near Mithakhali Garden, Ellisbridge, Ahmedabad,
Gujarat - 380006 and represented by Shri Devang Shah.
………………Petitioner
-Versus-
1. The State of Assam,
represented by the Commissioner and Secretary to the
Government of Assam, Public Works (Building and NH )
Department, Dispur, Guwahati - 781006, Assam.
2. The Chief Engineer, PWD (Building), Assam,
Chandmari, Guwahati – 781003.
3. The Executive Engineer, GMC Branch Office of the Chief Engineer
PWD (Building), Assam, Chandmari, Guwahati – 781003.
4. The Senior Architect (B/M), office of the PWD (Building), Assam,
Chandmari, Guwahati - 781003.
.….……….Respondents
Advocates :
For the petitioner : Mr. G.N. Sahewalla, Senior Advocate,
GAHC010035172021
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: Mr. D. Senapati, Advocate
For the State Respondents : Mr. D. Saikia, Advocate General, Assam
: Sri. B. Gogoi, Standing Counsel, P.W.D.
Date of Hearing : 13.08.2021
Date of Judgment : 23.09.2021
BEFORE
HON’BLE MR. JUSTICE MANISH CHOUDHURY
JUDGMENT & ORDER
The writ petition under Article 226 of the Constitution of India has been
preferred by the petitioner, a company registered under the provisions of the
Companies Act, 2013, assailing the decision of the Technical Bid Evaluation Committee
taken in a meeting held on 16.02.2021 wherein the technical bid submitted by the
petitioner in response to a Press Notice bearing no. GMC.81/2020/5 dated 02.01.2021
had been declared to be non-responsive. A further direction to the State respondent
authorities is sought for to consider the technical bid submitted by the petitioner and
to open its financial bid.
2. The impugned decision of the Technical Bid Evaluation Committee dated
16.02.2021 is relatable to a competitive bidding process initiated for the contract work
– “Construction of New Medical College centering MMCH and Kalapahar campus along
with 800 Bedded General Hospital at MMCH Campus in Guwahati” [hereinafter referred
to as ‘the Contract Work’, for easy reference].
3. A Press Notice bearing no. GMC.81/2020/5 was published by the Chief Engineer,
Public Works Department [P.W.D.] [Building], Assam [hereinafter also referred to as
‘the tendering authority’, at places for convenience] on 02.01.2021 inviting bids from
eligible registered contractors/firms/private limited company having experience of
similar nature of work for the Contract Work. In continuation of the Press Notice dated
02.01.2021, a Detail Notice Inviting Bid [‘the NIT’, for short] was published on
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18.01.2021 inviting bids for the Contract Work from contractors having eligibility
criteria as laid down in the Standard Bidding Document [‘the SBD’/’the bidding
document’, for short]. In the NIT, the approx. value of the work has been mentioned
as Rs. 666.1351 crores and the time of completion as 36 months. The details of the
bid was made available at the e -procurement portal website,
www.assamtenders.gov.in and it was made mandatory for the participating bidders to
enroll therein.
4. As per the original NIT, downloading of bidding document was open from
18.01.2021 to 08.02.2021. The last date of submission of bid was mentioned as upto
12-30 p.m., 08.02.2021. Online submissions of technical bid and financial bid were
made mandatory. A pre-bid meeting was scheduled at 11-00 a.m. on 21.01.2021 at
the office of the Chief Engineer, P.W.D.[Building], Assam. After the pre-bid meeting,
held on 21.01.2021, a Corrigendum dated 06.02.2021 with a revised activity schedule,
came to be published. By the revised activity schedule, the last date of submission of
bid was extended upto 12-30 p.m. on 10.02.2021. The time and date of technical bid
opening were mentioned as 04-30 p.m. and 10.02.2021 respectively.
5. In response to the NIT dated 18.01.2021, the petitioner participated in the said
competitive bidding process considering itself to be eligible, experienced and qualified
in terms of the NIT dated 18.01.2021 by submitting its bid along with all the documents
asked for, within the notified time.
6. As per the activity schedule, the technical bids of the participating bidders were
opened on 10.02.2021 and it was found that three nos. of bids including that of the
petitioner, were received by the tendering authority for the Contract Work. The
technical bids of all the three bidders were thereafter, evaluated and an evaluation
report was presented before a Technical Bid Evaluation Committee headed by the Chief
Engineer, P.W.D.[Building], Assam constituted for the purpose of considering the bids
on merit.
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7. It is the case of the petitioner that when the petitioner was waiting and expecting
for a positive outcome of its technical bid, it came to learn from the official website of
the respondent authorities that its technical bid had been found non-responsive. The
reasons assigned for such non-responsiveness are, firstly, non-receipt of confirmation
from the concerned authority as regards genuineness of completion certificate for
single similar nature of work, and secondly, non-submission of necessary documentary
evidence in support of the single similar nature of work as per Clause 4.5A. On
16.02.2021 itself, an Office Order of even date came to be issued by the Chief
Engineer, P.W.D.[Building], Assam whereby it was informed that the financial bids for
the Contract Work would be opened at 11-30 a.m. on 16.02.2021 in his office. All the
members of the Technical Bid Evaluation Committee and the successful bidders in the
technical bid evaluation were requested to attend the opening of the financial bids at
the scheduled time.
8. Heard Mr. G.N. Sahewalla, learned Senior Counsel assisted by Mr. D. Senapati,
learned counsel for the petitioner and Mr. D. Saikia, learned Advocate General, Assam
assisted by Sri. B. Gogoi, learned Standing Counsel, P.W.D. for all the respondents.
9. Mr. Sahewalla has submitted that the impugned decision on the part of the
Tender Bid Evaluation Committee in rejecting the bid submitted by the petitioner on
16.02.2021 is bad and arbitrary being contrary to the clauses of the bidding document
[SBD]. The decision assigned as regards non-receipt of confirmation of genuineness
of completion certificate for single similar nature of work from the concerned authority
cannot be termed to be in conformity of the terms and conditions set forth in the
bidding document. It is his submission that by no stretch, the impugned decision can
be made relatable to Clause 4.5A of the bidding document.
9.1. It is also his submission that though in terms of Clause 4.3.(iii) of the bidding
document the respondent authorities can seek further information on the contract
works in relation to which experience certificates had been submitted by the bidder
but non-receipt or delayed receipt of information from the concerned authorities have
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not empowered the respondent authorities to declare a bid as non-responsive. In the
case in hand, the respondent authorities had sought information from the M.P. Road
Development Corporation Limited [MPRDCL], a Government of Madhya Pradesh
Undertaking, without the knowledge of the petitioner after opening of the technical
bids. The respondent authorities had taken the pretext of non-receipt of response by
the MPRDCL to invalidate the otherwise valid bid of the petitioner. As it was not within
the knowledge and control of the petitioner to persuade the MPRDCL which entity is
not connected with the competitive bidding process under reference, the petitioner
could not have been penalized without bringing the fact of non-receipt of response to
the notice of the petitioner. There was no doubt about the genuineness of the
experience certificate and in such situation, it was not open for the respondent
authorities to declare the petitioner’s technical bid as non-responsive.
9.2. He has further submitted that the impugned action on the part of the respondent
authorities is based on extraneous considerations and an action other than bona fide.
Even if an irregularity is assumed to have occurred it cannot be comprehended to have
fallen within the category of essential conditions of eligibility. Submitting as above, Mr.
Sahewalla has submitted that the observation that the petitioner did not submit the
necessary documentary evidence in support of the single similar nature of work as per
Clause 4.5A of the bidding document is clearly arbitrary and unjustified.
9.3. Elaborating on the point, Mr. Sahewalla has submitted that the respondent
authorities had sought for information from the MPRDCL by a communication dated
10.02.2021 and two reminder e-mails dated 11.02.2021 and dated 12.02.2021 and the
said communications neither revealed the time period by which the MPRDCL was
required to furnish the information sought for nor the consequence in the event of
default in furnishing the information. According to him, the date of technical
evaluation, 16.02.2021 was fixed by the respondent authorities without any
information to the bidders. Effectively, there was only two working days in between
11.02.2021 and 16.02.2021 for the MPRDCL to furnish the information, with
13.02.2021 and 14.02.2021 being Saturday and Sunday respectively. Giving only two
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days’ time to furnish information without disclosing the consequence of non-furnishing
the information, is clearly arbitrary and irrational.
9.4. It is his further submission that the contention of the State respondents to the
effect that the petitioner did not submit the necessary documentary evidence in
support of the single similar nature of work as per Clause 4.5A is incorrect, perverse
and misstatement. By referring to the experience certificates annexed to the case
papers, he has submitted that the petitioner had submitted all the necessary
documents along with its bid including the details about scope of work as regards civil,
sanitary and water supply works and electrical works, more particularly, vide
performance certificate dated 04.02.2021. He has submitted that in the said
performance certificate dated 04.02.2021 issued by the MPRDCL, the details of the
individual components of the works are mentioned. As per the said performance
certificate dated 04.02.2021, the combined value of completed contract work was Rs.
334.98 crores, meaning thereby, the petitioner had fulfilled the qualification criterion
enjoined by Clause 4.5A.(c) of the bidding document which was at Rs. 266.45 crores.
It is his contention that it is not open for the respondent authorities to give a different
meaning to the term ‘contract value’ in order to brace themselves to disqualify the
petitioner’s technical bid in order to eliminate it from the stage of financial bid
evaluation so as to award the contract to a bidder of their choice.
9.5. It has been pleaded and submitted that in the meantime, the financial bids of the
remaining two bidders were opened after rejection of the petitioner’s technical bid and
both of them had quoted substantially higher bid values than the petitioner. It has
been contended that the impugned action has been undertaken by the respondent
authorities to somehow oust the petitioner from the competition so as to facilitate the
respondent authorities to award the Contract Work to one of the other two bidders at
a higher price, which is against the public interest.
9.6. In support of his submissions, Mr. Sahewalla has referred to the decisions in Asia
Foundation & Construction Ltd. vs. Trafalgar House Construction (I) Ltd. and others,
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reported in (1997) 1 SCC 732; Bharat Sanchar Nigam Limited vs. Bhupender Minhas
and others, reported in (2008) 11 SCC 273; Afcons Infrastructure Limited vs. Nagpur
Metro Rail Corporation Limited and another, reported in (2016) 16 SCC 818; and
Consortium of Titagarh Firema Adler S.P.A. vs. Nagpur Metro Rail Corporation Limited,
reported in (2017) 7 SCC 486.
10. Mr. Saikia, learned Advocate General has, on the other hand, raised a preliminary
objection regarding maintainability of the writ petition on the ground of non-joinder of
necessary parties. It is submitted by him that in the bidding process, three bidders
including the petitioner, submitted their bids. The technical bids of the three
participating bidders were opened on 10.02.2021. The technical bids were thereafter,
evaluated and an evaluation report was prepared and presented on 16.02.2021. The
Technical Bid Evaluation Committee held its meeting on 16.02.2021 and after
evaluation, the technical bid of the petitioner was found non-responsive. At the same
time, the technical bids of the other two participating bidders were found responsive
and a decision was also taken on that day itself i.e. on 16.02.2021 to open their
financial bids. The financial bids of the two technically responsive bidders were opened
on 16.02.2021 and one of the said two bidders was declared as L-1 bidder. He has,
thus, contended that a third party right had accrued in favour of the L-1 bidder on
16.02.2021 for having the Contract Work in its favour and, as such, both the L-1 bidder
and L-2 bidder are necessary parties in the instant proceeding as it is likely to be
adversely affected in the event the writ petition, with the prayers above, is allowed.
Non-impleadment of the L-1 bidder and L-2 bidder as a party-respondents in the
instant writ petition has made the writ petition not maintainable and the writ petition
is to be dismissed on the ground of non-joinder of the necessary parties, he submits.
The writ petition was filed on 22.02.2021 and in the writ petition, the petitioner has
made mention about the bid values of the other two bidders and their names. It is,
thus, evident that the petitioner was well aware about the successful bidder at the
time of preferring the writ petition and yet, it has not brought in the successful bidder
as a party-respondent.
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10.1. In the above context, he has referred to the decisions in Udit Narain Singh
Malpaharia vs. Additional Member Board of Revenue, Bihar and another, reported in
AIR 1963 SC 786; Prabodh Verma and others vs. State of Uttar Pradesh and others,
reported in (1984) 4 SCC 251; Ranjan Kumar and others vs. State of Bihar and others,
reported in (2014) 16 SCC 187; and Afcons Infrastructure Limited (supra).
10.2. After raising the above preliminary issue regarding maintainability, Mr. Saikia has
referred to the relevant clauses in the bidding document. He has submitted that Clause
4.5 of the bidding document has prescribed the Qualification Criteria. Laying stress on
Clause 4.5A.(c) of the bidding document, he has submitted that a bidder has to satisfy
the qualification criterion prescribed therein. A bidder in order to satisfy the
qualification criterion mentioned in Clause 4.5A.(c), was to submit requisite
documentary evidence regarding satisfactory completion [not less than 90% of
contract value] of at least one similar work of multi-storied RCC Hospital and Medical
College Project of value not less than amounting to Rs. 266.45 crores. Though the
petitioner had submitted a number of documents regarding work experience along
with its bid, none of them except one contract work executed under the MPRDCL had
been projected to have fulfilled the said qualification criterion. In support of the said
contract work under the MPRDCL the petitioner had submitted a performance
certificate dated 04.02.2021. On perusal of the same after opening of the technical bid
on 10.02.2021, the Technical Bid Evaluation Committee found a number of deficiencies
in the said performance certificate and accordingly, it was decided by the Committee
to request the MPRDCL to confirm as regards its genuineness and also to provide the
detailed scope of work in terms of Clause 4.3.(iii) of the bidding document. To that
effect, a letter dated 10.02.2021 and two e-mails dated 11.02.2021 and 12.02.2021
were sent to the MPRDCL with the request to furnish the reply urgently. When no reply
was received till 16.02.2021, that is, the date of sitting of the Technical Bid Evaluation
Committee, the Committee after threadbare discussion, had got no option but to reject
the technical bid of the petitioner for lack of satisfactory documents/information
relating to single similar nature of work to be compliant of the qualification criterion
laid down in Clause 4.5A.(c). It is his submission that the decision to declare the bid
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as a non-responsive one was taken in consonance with the terms and conditions of
the bidding document.
10.3. Objecting to the allegations of arbitrariness and irrationality, learned Advocate
General has submitted that Clause 4.5A.(c) is specific to the point that to qualify, a
bidder must have satisfactorily completed [not less than 90% of contract value] as a
prime contractor or as a permitted sub-contractor at least one similar work of multi-
storied RCC Hospital and Medical College Project of value not less than amounting to
Rs. 266.45 crores. But the petitioner appears to have completed its largest single
similar work where the Tendered Cost was Rs. 234.62 crores and the Project Allocated
Cost [PAC] was Rs. 248.01 crores, which were much lesser than Rs. 266.45 crores.
10.4. In response to the above letter dated 10.02.2021 and e-mails dated 11.02.2021
and 12.02.2021, a reply was received from the MPRDCL only on 26.02.2021 along with
a modified performance certificate dated 25.02.2021. On receipt of the modified
performance certificate dated 25.02.2021, the same was compared with the previous
performance certificate dated 04.02.2021. Upon comparison of the said two
performance certificates for the same contract work, a number of discrepancies were
again found by the respondent authorities and in that connection, he has referred to
the statements made in paragraph 12 of the affidavit-in-opposition filed on behalf of
the respondent no. 2. According to him, the discrepancies had further vindicated the
stand of the tendering authority taken with regard to disqualification of the petitioner’s
technical bid.
10.5. It is the further contention on behalf of the State respondents that the documents
annexed with the bid of the petitioner reflected that there were delays and in some
cases, inordinate delays on the part of the petitioner to execute even smaller contract
works of different sizes or values. By referring to the documents annexed to the writ
petition, he has submitted that it is a pointer towards not satisfactory performance
with regard to the periods of completion on the part of the petitioner in executing
contract works and the said aspect can be taken note of by the tendering authority at
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the time of taking a decision with regard to qualification or disqualification of a bid
submitted by a bidder. It is his submission that in view of Clause 4.9 of the bidding
document, it was well within the ambit and authority of the tendering authority to
disqualify the technical bid of the petitioner to take note of such facts, which are very
relevant from the point of view of the tendering authority.
10.6. Learned Advocate General has contended that the decision-making process of
the tendering authority as regards acceptance or rejection of a bid taken in respect of
a contract work pursuant to a competitive bidding process undertaken is not to be
lightly interfered with as the law is settled that interference is permissible only if the
decision-making process is found to be arbitrary or irrational or mala fide. The bidding
document is prepared by the tendering authority with the help of experts by taking
into accounts the requirements of the contract work/project in question. In the case
in hand, it is a specialized project for construction of a Medical College and Hospital
with 800 bed capacity and the past performance of a bidder in similar nature of work
is the most vital and relevant aspect. The element of public interest is very much
present behind the decision and any interference at the instance of an unsuccessful
bidder regarding interpretation of the terms and conditions of the bidding document is
not called for except in exceptional circumstances. As no exceptional circumstances
have been made out by the petitioner here, this writ petition deserves to be dismissed
also on merits, if not on the preliminary issue.
10.7. To buttress his submissions, learned Advocate General has referred to the
decisions in Central Coalfields Limited and another vs. SLL-SML (Joint Venture
Consortium and others), reported in (2016) 8 SCC 622; Afcons Infrastructure Limited
(supra); Caretel Infotech Limited vs. Hindustan Petroleum Corporation Limited and
others, reported in (2019) 14 SCC 81; and Silppi Constructions Contractors vs. Union
of India and another, reported in (2020) 16 SCC 489.
11. In reply, Mr. Sahewalla has submitted that the aspect of alleged delay in
executing the contract works, as contended on behalf of the State respondents, is not
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a ground taken earlier. By referring to the documents annexed to the writ petition to
which the learned Advocate General has referred to, he has submitted that there was
nothing to indicate in those documents that there was any remark of poor performance
by the employers of those works. Rather the performance reports indicated about
good/very good/outstanding performance. The delay, if any, in absence of any remark
cannot be attributed to the petitioner merely for the reason that in some of the cases,
the dates of completion of the contract works were beyond the stipulated dates of
completion. No penalty was levied in any of the cases, he submits. It is not open for
the State respondents to make addition of grounds of rejection to supplement its
previous grounds. In this connection, he has referred to the decisions in Hindustan
Petroleum Corpn. Ltd. vs. Darius Shapur Chennai and others, reported in (2005) 7 SCC
627; Rashmi Metaliks Limited and another vs. Kolkata Metropolitan Development
Authority and others, reported in (2013) 10 SCC 95; State of Punjab vs. Bandeep Singh
and others, reported in (2016) 1 SCC 724; and T.P. Senkumar, IPS vs. Union of India
and others, reported in (2017) 6 SCC 801. In all these decisions, it has been observed
that every decision of an administrative or executive nature must contain the reasons
which led the authority in taking such decision and it is not permissible for the authority
thereafter to take resort to any other additional reasons.
11.1. With regard to the preliminary issue raised on the ground of non-joinder of
parties, he has referred to the decision in Silppi Constructions Contractors (supra). It
is his submission that in the present writ petition, the petitioner has challenged the
decision of the tendering authority in declaring the petitioner’s technical bid as non-
responsive and as such, there is no requirement to make the other bidders party-
respondents in the instant writ proceeding. He has contended that the writ petition is
maintainable in the absence of the other two participating bidders.
12. I have considered the rival submissions advanced by the learned counsel for the
parties and also perused the materials brought on record by the parties through their
respective pleadings. I have also considered the decisions cited by the learned counsel
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for the parties in support of their contentions and the written submissions submitted
by them.
13. The competitive bidding process has been initiated by the Press Notice dated
02.01.2021, followed by a Detail Notice Inviting Bid [the NIT], for the contract work –
‘Construction of New Medical College Centering MMCH and Kalapahar campus along
with 800 Bedded General Hospital at MMCH Campus in Guwahati’ [the Contract Work].
The approximate value of the Contract Work is Rs. 666.1351 crores and the time of
completion is 36 months. Bids were invited for the Contract Work from contractors
having qualification criteria as laid down in the Standard Bidding Document [SBD]. As
per the NIT, contractors/bidders had to submit the technical bid and the financial bid
online. Initially, the last date of submission of bid was mentioned as up to 12-30 p.m.,
08.02.2021. Apart from the above, a hard copy of the technical bid submitted online,
was also to be submitted on 08.02.2021 up to 12-30 p.m. for evaluation purpose. As
per the activity schedule provided in the NIT, a pre-bid meeting was scheduled on
21.01.2021.
14. The pre-bid meeting was held, as scheduled, on 21.01.2021 in the office of the
respondent no. 2 i.e. the Chief Engineer, P.W.D. [Building], Assam. Queries from the
intending bidders were received both through e-mail and in person. The queries were
discussed and deliberated upon and resolutions were worked out. Clause 4.5A of the
SBD/bidding document had been modified. The minutes of the pre-bid meeting were
accordingly uploaded in the concerned website. On 06.02.2021, a Corrigendum came
to be issued by publishing the modification made in the SBD/bidding document and
Bill of Quantities [BOQ]. By the said Corrigendum, the last date of submission of bid
was extended up to 12-30 p.m., 10.02.2021. It was further notified that the technical
bids would be opened at 04-30 p.m. on 10.02.2021 and the date of opening of financial
bids would be notified later.
15. In response to the NIT, three bidders submitted their bids viz. (a) M/s Yashnand
Engineers and Contractors Pvt. Ltd. – the petitioner; (b) M/s Larsen & Toubro Ltd.;
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and (c) M/s NCC Ltd. The technical bids were opened at 04-45 p.m. on 10.02.2021 in
the office of respondent no. 2. Thereafter, the technical bids of all the three bidders
were evaluated in reference to the requisite documents/information furnished by the
bidders for fulfilment of the qualification criteria. After completion of the evaluation
process of the technical bids for the Contract Work, an evaluation report was prepared
and presented before the Technical Bid Evaluation Committee for consideration of the
technical bids on merits.
16. A meeting of the Technical Bid Evaluation Committee was held on 16.02.2021.
The Committee after scrutiny of the bids and discussion, had declared the bid of the
petitioner to be non-responsive. As per the minutes of the Technical Bid Evaluation
Committee, the bid was non-responsive as confirmation of genuineness of the
completion certificate for single similar nature of work from the concerned authority
was not received till that date and the petitioner had not submitted the necessary
documentary evidence in support of the single similar nature of work as per Clause
4.5A of the bidding document. The minutes of the Technical Bid Evaluation Committee
had further recorded that the technical bids of the other two bidders i.e. M/s Larsen &
Toubro Ltd. and M/s NCC Ltd. had been found responsive for opening of their financial
bids for the Contract Work. An office order came to be issued by the respondent no. 2
on 16.02.2021 whereby it was informed that the financial bids for the Contract Work
would be opened at 11-30 hours on 16.02.2021 in the office of the respondent no. 2.
All the members of the Evaluation Committee as well as the successful bidders in the
technical bid evaluation stage were requested to attend the meeting for opening of
the financial bids at the scheduled time. By the said office order, the two bidders viz.
M/s Larsen & Toubro Ltd. and M/s NCC Ltd. were notified to be present at the time of
opening of the financial bids.
17. Aggrieved by and dissatisfied with such declaration of non-responsiveness of its
technical bid the petitioner submitted a letter to the respondent no. 1 i.e. the
Commissioner and Special Secretary to the Government of Assam, P.W.D. [Building &
NH] on 16.02.2021 ventilating its grievances. It was contended that the procedure
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adopted by the Technical Bid Evaluation Committee was arbitrary and the technical bid
of the petitioner was rejected on flimsy and frivolous grounds. It was further contended
that the necessary documentary evidence as required under Clause 4.5A had been
duly submitted for single similar nature of work. The petitioner was also aggrieved by
the immediate opening of the financial bids on 16.02.2021 and the consequent
declaration of L-1 bidder and L-2 bidder on the portal. The petitioner had, thereby,
called for necessary and immediate direction to the Technical Bid Evaluation
Committee to review their evaluation of the petitioner’s technical bid after receipt of
confirmation of the completion certificate. On 17.02.2021, a legal notice was also
served upon the respondent authorities in that regard.
18. From the rival submissions of the parties, it appears that the qualification criterion
with regard to single similar nature of work is the prime bone of contention. As per
Clause 4.3 of the SBD, a bidder with its bid had to submit, inter-alia, the information
and documents in relation to experience in works of a similar nature and size for each
of the last five years, and details of works underway or contractually committed; and
clients who can be contacted for further information on those contracts. Clause 4.5
has catalogued ‘the Qualification Criteria’. Clause 4.5A thereof has prescribed that each
bidder in its name should have the qualification in the last five years as referred to in
the Appendix to qualify for award of the Contract Work. The qualification criterion
contained in Clause 4.5A.(c) in the original SBD is extracted herein below for ready
reference :-
4.5A.(c) :- Satisfactorily completed (not less than 90% of contract value), as a
prime contractor (or as a nominated sub-contractor, where the sub-
contractor involved in execution of all main items of work described
in the bid document, provided further that all other qualification
criteria, are satisfied) at least one similar work of multi-storied RCC
Hospital and Medical College Project of value not less than
amounting to (1) Civil, Sanitary & Water supply work and Electrical
works including all ancillary works of Rs. 266.45 Crore (Rupees two
Page 15 of 35
hundred sixty six crore and forty five lakh) only which is
approximately 40% of the bid value (updated value) during last 5
years i.e. upto 31.03.2020 under Central Govt./State Govt.
Organization/Semi Govt./PSU within the country.
The qualification criterion contained in modified Clause 4.5A.(c), as per the minutes of
the pre-bid meeting, is also extracted herein below for ready reference :-
4.5A.(c) :- Satisfactorily completed (not less than 90% of contract value), as a
prime contractor (or as a nominated sub-contractor, where the sub-
contractor involved in execution of all main items of work described
in the bid document, provided further that all other qualification
criteria, are satisfied) at least one similar work of multi-storied RCC
Hospital and/or Medical College Project of value not less than
amounting to (1) Civil, Sanitary & Water supply work and Electrical
works including all ancillary works of Rs. 266.45 Crore (Rupees two
hundred sixty six crore and forty five lakh) only which is
approximately 40% of the bid value (updated value) during last 5
years i.e. upto 31-03-2020 under Central Govt./State Govt.
Organization/Semi Govt./PSU within the country.
19. In order to show fulfillment of the ‘Qualification Criteria’ laid down in Clause 4.5
of the SBD/bidding document, the petitioner has stated that it had submitted the
details of the experience in executing similar works over the last five years along with
the necessary documents/certificates with its bid, along with a chart. The said chart is
also appended as Annexure–V to the writ petition. From the said chart, it is noticed
that the petitioner has identified 10 (ten) nos. of contract works executed for different
authorities during the last five years. It is further noticed that out of the said 10 (ten)
nos. of contract works, the contract values of 9 (nine) nos. of contract works are
mentioned as Rs. 52.98 crores, Rs. 58.13 crores, Rs. 73.36 crores, Rs. 76.62 crores,
Rs. 89.95 crores, Rs. 99.84 crores, Rs. 111.16 crores, Rs. 155.32 crores and Rs. 183.90
Page 16 of 35
crores respectively. Prima facie none of these 9 (nine) contract works meets the
eligibility criterion laid down in Clause 4.5A.(c). It is the work executed for the M.P.
Road Development Corporation Ltd. [MPRDCL] which the petitioner has emphasized in
relation to the qualification criterion mentioned in Clause 4.5A.(c) of the bidding
document. The said work executed for the MPRDCL was in respect of the contract
work of ‘Construction of New Medical Colleges and up-gradation of Hospitals at Vidisha,
[M.P.] 1. Civil, Sanitary, Plumbing, Internal Electrical, Electric Low Voltage Systems,
Fire Fighting, Fire Alarm System, External Water Supply, External Drainage, STP, PTP,
Road, Horticulture, Street Light, Electric Sub-station, HVAC including IBMS, Lift,
Medical Gas Pipeline System, Solar Water Heating System, etc.’ [hereinafter referred
to as ‘the subject-work’, for easy reference]. According to the petitioner, the
experience it has gained by executing the subject-work has made it eligible and
qualified for the Contract Work, which the tendering authority has disputed by
contending that the qualification criterion set forth in Clause 4.5A.(c) is not satisfied
by the petitioner with the experience gained from the subject-work.
20. In view of such rival contentions, it has become necessary to have a closer look
at the performance certificate dated 04.02.2021, issued by the MPRDCL, in relation to
the subject-work. The performance certificate dated 04.02.2021 has been annexed to
the writ petition and the same is available at page nos. 70-71 of the case papers. For
ready reference, the said performance certificate dated 04.02.2021 is quoted herein
below :-
CIN : U45203MP2004SGC016758
M.P. Road Development Corporation Ltd.
(M.P. State Highway Authority)
(Govt. of M.P. Undertaking)
45-A, Arera Hills, Bhopal-462011
Phone : 0755-2597290/2765205 Fax : 0755-2572643, Website : mprdc.gov.in
Letter no. 13265/Build/Vidisha Medical College/2021 Bhopal dated 04.02.2021
PERFORMANCE CERTIFICATE
Page 17 of 35
This Certificate is issued on the request of M/s Yashnand Engineers & Contractors Pvt. Ltd. for
Tender purpose only.
(Yogendra Gahole)
Chief Engineer (Building)
1.
Name of work/Project & Location Construction of New Medical
Colleges and up-gradation of
Hospitals at Vidisha, Madhya
Pradesh
2. Agreement No. Agreement No. – 214/2016
3.
Name of Contractor YASHNAND ENGINEERS &
CONTRACTORS PVT. LTD.
4. PAC Rs. 248.01 Cr.
5. Tendered Cost Rs. 234.62 Cr.
6.
Gross Amount up to date payment done Rs.
(Final Bill in under payment processes.)
334.98 Cr.
7. Gross Amount of work done up to 31.03.2020 Rs. 313.69 Cr.
8. Total Work done up to 31.03.2020 (in %) 92.80%
9. Date of Start 18/01/2016
10. Date of Completion 25/08/2020
11.
i) Stipulated Date of Completion
(as mentioned in work order)
17/01/2018
ii) Actual Date of Completion 25/08/2020
iii) Whether case of levy of compensation for
delay has been decided or not
Decided
iv) If decided, amount of compensation levied
for delayed completion, if any.
No.
12. Work Components [Please tick (√) in relevant box]
a) RCC Framed Structure √
b) Finishing Works √
c) Water Supply and sanitary installation works √
d) External development and Drainage √
e)
Internal & External Electrification, Electrical Sub
Station, HT Line, LT Line, Transformer and DG set
Works.
√
f) Firefighting & Fire Alarm Works √
g) LV Works √
h) Lifts √
i) Medical Gas Pipe Line (MGPS) Works √
j) ETP, STP, WTP, RO and Pump Works √
k) CCTV Works √
l) Dedicated PA Systems √
13. No. of Storeys (Basement + G.F. + 6 Floor) 8
14. Performance Report*
1) Quality of Work Very Good
2) Financial Soundness Very Good
3) Technical Proficiency Very Good
4) Resourcefulness Very Good
5) General Behaviour Outstanding
Page 18 of 35
MPRDC, Bhopal
It is submitted by the parties at the bar that PAC stands for Project Allocated Cost.
21. From the performance certificate dated 04.02.2021, it transpires that the PAC for
the subject-work was Rs. 248.01 crores and the Tendered Cost was Rs. 234.62 crores.
It further transpires that the gross amount upto date payment done was Rs. 334.98
crores and as on 04.02.2021, the final bill was in the process for payment. The gross
amount of work done upto 31.03.2020 was Rs. 313.69 crores and it amounted to
92.80% of the total work. It is noticed that the date of start of the subject-work was
18.01.2016 and the date of completion was 25.08.2020. As per the work order issued
for the subject-work, the stipulated date of completion was 17.01.2018.
22. It can be iterated that the submissions of the parties have centered around the
above figures and parameters of the subject-work vis-à-vis Clause 4.5A.(c) of the SBD.
Admittedly, the subject-work is reflected as new medical colleges and up-gradation of
hospitals and the MPRDCL is a Government of Madhya Pradesh Undertaking. After
opening of the technical bid of the petitioner on 10.02.2021 and upon perusal of the
performance certificate dated 04.02.2021, the tendering authority was stated to be of
the view that the detailed scope of the subject-work was not mentioned therein. The
tendering authority appeared to have taken a view that in order to ascertain the
credentials of the petitioner as the contractor as regards its ability and capacity to
perform such similar work under the P.W.D. a confirmation about the genuineness of
the performance certificate and the detailed scope of the subject-work would be
necessary from the MPRDCL which was the employer for the subject-work. It was in
such situation, the tendering authority stated to have written to the MPRDCL on
10.02.2021 as well as by e-mails on 11.02.2021 and 12.02.2021. Though no time
period was mentioned in those communications, it was, however, asserted that the
confirmation and supply of the detailed scope of the subject-work were urgently
required at an early date by e-mail, followed by a post copy. The MPRDCL was
requested to sent its reply to two e-mail accounts, mentioned in those communications,
Page 19 of 35
of the respondent no. 2. As has been mentioned above, the evaluation report was
prepared by 16.02.2021 on the basis of the tender papers received from the
participating bidders after opening of the technical bids on 10.02.2021 and the same
was placed before the Tender Bid Evaluation Committee on 16.02.2021. Admittedly,
no response from the MPRDCL was received till 16.02.2021. It is not the case of the
petitioner that the MPRDCL did not receive the above three communications (supra)
during the period from 10.02.2021 to 16.02.2021. It is the contention of the petitioner
that during the period from 10.02.2021 to 16.02.2021, there were only two working
days and such short duration is wholly inadequate to forward a reply.
23. On reverting back to the performance certificate dated 04.02.2021, it is found
that the MPRDCL had mentioned the name of the subject-work as ‘Construction of New
Medical Colleges and Up-gradation of Hospitals at Vidisha, Madhya Pradesh’. The
Tendered Cost was Rs. 234.62 crores. The work components at serial no. 12 of the
performance certificate were marked with tick [√] marks in the relevant boxes. For
example, there is a tick [√] mark against RCC Framed Structure. One could reasonably
guess therefrom that the subject-work included the work component of RCC Framed
Structure, without any further details.
24. In paragraph 8 of the affidavit-in-opposition, the respondent no. 2 has contended
that during evaluation when it examined the performance certificate dated 04.02.2021
concomitantly with Clause 4.5A of the SBD, it noticed the following discrepancies :-
(i) Name of the project is Plural such as “Medical Colleges”, “Upgradation
of Hospitals” that does indicate there may be more than one no. of
projects.
(ii) Tendered cost mentioned for the project was Rs. 234.62 crore & Project
Allocated Cost (PAC) value mentioned in the certificate was Rs. 248.01
crore, whereas as per bid requirement, the same should be of value of
Rs. 266.45 crore.
Page 20 of 35
(iii) But, as mentioned in the completion certificate, the gross amount up-
to-date payment done was Rs. 334.98 crore & final bill was still under
process with gross amount of work done upto 31
st
March, 2020 as Rs.
313.69 crore, with percentage of progress 92.8%. But, arithmetically
92.8% of Rs. 334.98 crore comes to 310.86 crore instead of Rs. 313.69.
Further, the certificate was neither authenticated by any statutory
auditor nor supported by documents like certified copy of passed bill.
The Performance Certificate indicated that there was a probable
enhancement of the project cost; for which the documentary evidence
like project enhancement document in favour of the bidder was not
attached with the bid.”
25. It has been averred that observing such discrepancies in the performance
certificate dated 04.02.2021, the communications dated 10.02.2021, 11.02.2021 and
12.02.2021 were made to the MPRDCL. According to the Technical Bid Evaluation
Committee, the documentary evidence in the form of the said performance certificate
dated 04.02.2021, furnished by the petitioner, in support of ‘similar nature of work’
lacked in vital information and, thus, could not be considered as sufficient evidence for
the purpose of establishing responsiveness of the technical bid. They also doubted the
genuineness of the information contained therein in view of deficiencies in respect of
vital information and it was well within their authority to ask for confirmation and to
call for further information in terms of Clause 4.3.(iii) of the SBD/bidding document. It
has been contended by the petitioner that a perusal of the performance certificate
dated 04.02.2021 clearly indicates that the same is a single work and not multiple
works, as alleged. Moreover, it was not assigned as a specific ground of rejection in
the impugned decision dated 16.02.2021. It is further contended by the petitioner that
the eligibility criterion contained in Clause 4.5A.(c) has not stipulated that the value
should be ‘Tendered Cost’ or it should be ‘actual contract value’, which is the cost at
which the work had been executed. It is the contention of the petitioner that it is the
actual executed contract value which is to be considered, not the initial bid value at
which the contract-work was awarded. Regarding the allegation about percentage of
progress to the extent of 92.8%, the petitioner has asserted that the said calculation
Page 21 of 35
is incorrect and its calculation adopted for work done percentage-wise as 92.8%
[=313.69/337.99*100] is correct. It is also contended that since confirmation and
information were sought from the MPRDCL by the tendering authority it was not open
for the tendering authority to penalize the petitioner for non-receipt of confirmation
and information by rejecting its technical bid.
26. During the course of hearing, learned Advocate General has, by referring to the
other performance/completion certificates submitted with the technical bid of the
petitioner which are annexed to the writ petition at page nos. 72-91, submitted that
from a bare perusal of those it is evident that the petitioner had failed to complete
those contract works within the stipulated dates of completion and invariably, the
actual dates of completion were much after the stipulated dates of completion. It has
been contended on the basis of Clause 4.9 of the SBD/bidding document that even if
a bidder meets the qualifying criteria, he can be disqualified if record of poor
performance such as improper completion of contract, inordinate delays in completion,
etc. are noticed. The said contention has been objected by the learned Senior Counsel
for the petitioner by submitting that the same was not a ground for rejection of the
petitioner’s technical bid nor it was pleaded in the pleadings. It is his contention that
a new ground cannot be taken afterwards and has referred to the decisions mentioned
above.
27. At this stage, it would be apposite to refer to the scope of judicial review in
respect of a tender process which has been laid down by the Hon’ble Supreme Court
of India in some of the decisions, mentioned above, cited by the learned counsel for
the parties.
27.1. In Asia Foundation & Construction Ltd. (supra), referred by the petitioner, it has
been observed that though the judicial review cannot be denied so far as exercise of
contractual powers of Government bodies are concerned, but it is intended to prevent
arbitrariness or favouritism and it is exercised in the larger public interest or if it is
brought to the notice of the Court that in the matter of award of a contract power has
Page 22 of 35
been exercised for any collateral purpose. It is also observed that it is not justified in
interfering with the award by going into different clauses of the bid document. The
fact of escalation of cost on account of delay in executing a project is a relevant factor.
27.2. In Bharat Sanchar Nigam Limited (supra), referred to by the petitioner, the
decisions in Directorate of Education vs. Educomp Datamatics Ltd., (2004) 4 SCC 19
and Tata Cellular vs. Union of India, (1994) 6 SCC 651, have been referred wherein it
has been held that the Courts can scrutinize the award of the contracts by the
Government or its agencies in exercise of their powers of judicial review to prevent
arbitrariness or favouritism but there are inherent limitations on the exercise of the
power of judicial review in such matters. The terms of the invitation to tender cannot
be opened to judicial scrutiny because the invitation to tender is in the realm of
contract. The Court does not sit as a court of appeal but merely reviews the manner
in which the decision was made because the Court does not have the expertise to
correct the administrative decision. If a review of the administrative decision is
permitted it will be substituting its own decision, without the necessary expertise which
itself may be fallible. The Government must have a free hand in setting the terms of
the tender and must have reasonable play in its joints as a necessary concomitant for
an administrative body in an administrative sphere. It is entitled to pragmatic
adjustments which may be called for by the particular circumstances. The Courts
cannot strike down the terms of the tender prescribed by the Government because it
feels that some other terms in the tender would have been fair, wiser or logical. The
Courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.
27.3. In Consortium of Titagarh Firema Adler S.P.A. (supra), referred by the petitioner,
the decision in Tata Cellular (supra) has been referred to apart from other decisions to
observe that the modern trend is judicial restraint on administrative action and the role
of the Court is only to review the manner in which the decision has been taken. An
administrative decision can be tested by the application of Wednesbury principle of
reasonableness to see whether it is free from arbitrariness not affected by bias or
actuated by mala fides. If the decision relating to award of contract is bona fide and is
Page 23 of 35
in public interest, the Court will not, in exercise of power of judicial review, interfere
even if a procedural aberration or error in assessment or prejudice to a tenderer is
made out.
27.4. In Central Coalfields Limited (supra), the Hon’ble Supreme Court of India by
quoting from the decisions in Ramana Dayaram Shetty vs. International Airport
Authority of India, (1979) 3 SCC 489 and G.J. Fernandez vs. State of Karnataka, (1990)
2 SCC 480, has gone to observe that the Court must, as far as possible, avoid a
construction which would render the words used by the author of the document
meaningless and futile or reduced to silence any part of the document and make it all
together inapplicable. It has reaffirmed that the tendering authority issuing the tender,
has the right to enforce the terms of the tender. If a party approaches a Court for an
order restraining the employer from strict enforcement of the terms of the tender, the
Court would decline to do so. The Court will not countenance interference with the
decision of the employer at the behest of an unsuccessful bidder in respect of a
technical or procedural violation. After considering a host of decisions as regards
contours of judicial review in relation to tender process, it has been held that the issue
of acceptance or rejection of a bid or a bidder should be looked at not only from the
point of view of the unsuccessful party but also from the point of view of the employer.
Ordinarily, the soundness of the decision taken by the employer ought not to be
questioned. However, the decision-making process can be subject to judicial review.
The decision may be questioned if it is irrational or mala fide or intended to favour
someone or a decision that no responsible authority acting reasonably and in
accordance with relevant law could have reached.
27.5. The decisions in Afcons Infrastructure Limited (supra) and Silppi Constructions
Contractors (supra) have been referred to and relied on by both the parties.
27.6. In Afcons Infrastructure Limited (supra), bids were invited for a contract work by
the Nagpur Metro Rail Corporation Limited [the NMRCL] for the Nagpur Metro Rail
Project. The decision in Central Coalfields Limited (supra) has been referred to observe
Page 24 of 35
that in relation to a tender process, the Constitutional Courts can interfere a decision
as regards acceptance or rejection of the bid of a bidder if the decision is perverse.
The Constitutional Courts are expected to exercise restraint in interfering with the
administrative decision and ought not to substitute its view for that of the
administrative authority. A mere disagreement with the decision-making process or
the decision of the administrative authority is not a reason for a Constitutional Court
to interfere. The owner or the employer of a project, having authored the tender
documents, is the best person to understand and appreciate its requirements and
interpret its documents. The Constitutional Courts must defer to this understanding
and appreciation of the tender documents, unless there is mala fide or perversity in
the understanding or appreciation or in the application of the terms of the tender
conditions. It is possible that the owner or employer of a project may give an
interpretation to the tender documents that is not acceptable to the Constitutional
Courts but that by itself is not a reason for interfering with the interpretation given.
27.7. In Silppi Constructions Contractors (supra), the respondents issued notice
inviting tenders for two works. The technical bids of the petitioner therein i.e. Silppi
Constructors Contractors were rejected by the tendering authorities. The petitioner
filed a writ petition challenging the same. The main ground raised was that no reasons
were given either while rejecting its tender or the appeals. In the counter filed to the
writ petition the stand taken by the respondents was that the petitioner’s tenders were
rejected since the petitioner did not satisfy the eligibility criteria for submission of the
bid. It has been held therein that the Court should normally refrain from interfering in
contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or
irrationality is made out. The Court does not sit like a court of appeal over the
appropriate authority. The authority which floats the contract of tender and has
authored the tender documents is the best judge as to how the documents have to be
interpreted. If two interpretations are possible then the interpretation of the author
must be accepted. It has been reiterated that the decisions taken with regard to tender
processes are administrative decisions and such decisions are in the realm of contract.
While rejecting the tender a person or authority inviting the tenders is not required to
Page 25 of 35
give reasons even if it be a State within the meaning of Article 12 of the Constitution
of India. These decisions are neither judicial nor quasi-judicial. If reasons are to be
given at every stage, then the commercial activities of the State could come to a
grinding halt. The State must be given sufficient leeway in this regard. The tendering
authority is entitled to give reasons in the counter to the writ petition.
27.8. The decision in Caretel Infotech Limited (supra) has been referred to by the
respondents’ side to emphasize as regards the extent to which scrutiny of tenders in
writ proceedings under Article 226 of the Constitution of India is permissible. It has
been held therein to the effect that normally, the parties would be governed by their
contracts and the tender terms. In view of Government and public sector enterprises
venturing into economic activities, the Supreme Court of India has found it appropriate
to build in certain checks and balances of fairness in procedure. Observing that the
window has been opened too wide by challenging every small or big tender nowadays
in writ proceedings almost as a matter of routine, it has been cautioned that an
unnecessary and close scrutiny of minute details, contrary to the view of the tendering
authority, has made awarding of contracts by Government and public sector enterprise
a cumbersome exercise, with long drawn out litigation at the threshold. By making a
comparison with the promptness and efficiency levels in respect of private contracts it
has been observed that such close scrutiny has tended to make the tenders of the
public sector a non-competitive exercise to the great disadvantage to the Government
and the public sector. The object cannot be that in every contract, where some parties
would lose out, they should get the opportunity to somehow pick holes, to disqualify
the successful parties, on grounds on which even the party floating the tender finds
no merit.
28. Reverting back once again to the facts of the case in hand, it could be seen that
opportunity was provided to a prospective bidder to seek any clarification on the
bidding document by writing to the respondent no. 2 prior to the scheduled pre-bid
meeting. The respondent no. 2 was to respond to any such request for clarification
and such clarification was required to be intimated to all purchasers of the bidding
Page 26 of 35
document. The purpose of the pre-bid meeting was to clarify issues and to answer
questions on any matter that might be raised at that stage. In the minutes of the pre-
bid meeting held on 21.01.2021 for the Contract Work, the tendering authority
mentioned that a lot of queries were received from the prospective bidders and all
those queries were deliberated upon in the pre-bid meeting and thereafter, resolutions
taken were intimated to all the prospective bidders by uploading the same in the
website. It is not the case of the petitioner that they had sought any clarification with
regard to any of the clauses of the bidding document and clarifications were not given.
In such view of the matter, one has to proceed on the premise that the petitioner had
accepted all the terms and conditions of the bidding document and proceeded to
submit its bid. It is not also the case of the petitioner, that the terms and conditions
set in the bidding document/SBD were made keeping in mind the qualifications of
certain other bidders and in order to deprive the petitioner. The petitioner has not
alleged about any discriminatory treatment qua the terms and conditions specified in
the bidding document.
29. There is no ambiguity in Clause 4.5A.(c) that the bidder has to fulfill the
qualification criterion of executing ‘one similar work of multi-storied RCC Hospital
and/or Medical College Project’. A look in the performance certificate dated 04.02.2021
has demonstrated that the MPRDCL had mentioned the name of the work/project and
location as ‘Construction of New Medical Colleges and Up-gradation of Hospitals at
Vidisha, Madhya Pradesh’. Thus, it cannot be said that the contention raised in
paragraph 8 (i) of the affidavit-in-opposition to the effect that there was no indication
about a single project of Medical College and Up-gradation of Hospital or multiple
projects of medical colleges and up-gradation of hospitals or in multiples is irrelevant,
far fetched and out of context. The tendering authority has insisted in Clause 4.5A.(c)
from the bidder, either as a prime contractor or as a sub-contractor, satisfactory
completion [not less than 90% of contract value] of at least ‘one similar work of multi-
storied RCC Hospital and/or Medical College Project’ of Rs. 266.45 crores which is
approximately 40% of the bid value i.e. Rs. 666.1351 crores during last five years i.e.
up to 31.03.2020. It, thus, means that such similar work had to be executed between
Page 27 of 35
the period from 01.04.2015 to 31.03.2020. The subject-work is found to have been
completed during the period from 18.01.2016 to 25.08.2020. Considering the fact that
the approximate value of the Contract Work has been fixed at Rs. 666.1351 crores the
tendering authority has set the benchmark at Rs. 266.45 crores, which is approximately
40% of Rs. 666.1351 crores, so that it can assure itself about the past performance,
experience and credentials of the bidder to execute a public project of such nature
where money from the coffers of the State are to be spent.
30. It is the stand of the tendering authority, through its affidavit-in-opposition, that
the tendered cost for the subject-work was Rs. 234.62 crores which is lesser than the
figure set forth in the qualification criterion in Clause 4.5A.(c) at Rs. 266.45 crores.
The tendering authority has insisted that the meaning ascribed by the term ‘contract
value’ in Clause 4.5A.(c) in the SBD/bidding document can only be equated with the
term ‘tendered cost’ appearing in the performance certificate dated 04.02.2021 and
no other meaning can be comprehended for the term ‘contract value’. While the
petitioner has sought to contend that the term ‘contract value’ has to be the value/cost
at which the subject-work was executed the same has been vehemently objected by
the State respondents. It prima facie appears from the performance certificate dated
04.02.2021 that the gross amount of work done up to Rs. 313.69 crores is greater
than the tendered cost of Rs. 234.62 crores. As per the version of the tendering
authority the performance certificate indicated about enhancement of the project cost.
The communication dated 12.06.2018, annexed as Annexure-C to the additional
affidavit of the petitioner, goes to indicate that there was enhancement in the project
cost for the subject-work i.e. the construction of Vidisha Medical College, with no
corresponding enhancement in the scope of work and the same is clearly indicative of
escalation in the cost with time. The said fact is also apparent from a communication
dated 18.01.2016 of the MPRDCL made to the petitioner and the relevant part of the
said communication is extracted herein below :-
MADHYA PRADESH ROAD DEVELOPMENT CORPORATION LTD.
(Govt. of M.P. Undertaking)
45-A, Arera Hills, Bhopal - 462 011, Madhya Pradesh
Page 28 of 35
Tel.: (O) 0755-2765205, 2527202 - 299 (PRL Line) Fax: +91-755-2572643
Website: www.mprdc.nic.in
No. 16053/MPRDC/Procu./WO/Medical College/272/2015 Date 18.01.2016
To,
M/s Yashnand Engineers & Contractors
214/5, Khyati Complex, Mithakhali, Ellisbridge,
Ahmedabad – 382006 Gujarat
Tel: 079 – 23240202, Mob: 09824001024
E-mail: yashnandengineer@yahoo.co.in
Fax No: 079-23244186
Sub: Agreement for Construction of New Medical College and up-gradation
of Hospital at Vidisha {PAC Rs. 248.01 Crores} (Online Tender No. 379).
Ref: LoA No. 14760/MPRDC/Procu./LoA/Medical College/272/2015, Date
26/12/2015.
Your tender for the aforesaid work has been accepted by MPRDC vide
letter under reference. The agreement has been signed on 18
th
January, 2016. The
details of Agreement are as follows:
1. Agreement No. : 214/2016
2. PAC : Rs. 248.01 Crores
3. Quoted Rate : @5.40% (Five point four zero percent)
below PAC
4. Stipulated Period of Contract : 24 (Twenty Four) Months (including rainy
season)
(Narendra Kumar)
Chief Engineer
(Procurement)
31. By Clause 8 of the bidding documents, a bidder has been asked to examine
carefully all instructions, conditions of contract, contract data, forms, terms and
technical specifications, bill of quantities, forms Appendix and drawings. It has been
mentioned that failure to comply with the requirements of the bidding document shall
be at the bidder’s own risk. It has been made clear that pursuant to Clause 26 thereof,
bids which are not substantially responsive to the requirements of the bidding
documents shall be rejected. Clause 26 has provided the provision regarding
examination of bids and determination of responsiveness. It is the tendering authority
who, during the detailed evaluation of the technical bids, was to determine whether
each bid met the eligibility criteria. A bid had to be substantially responsive to the
requirements regarding qualification criteria as laid down in Clause 3 and Clause 4 of
Page 29 of 35
the bidding document. In a competitive bidding process, it is the terms and conditions
of the bidding document which decide the outcome of a bid in the bidding process.
32. The parties have not pointed out any definition of the term ‘contract value’ from
the bidding document so as to facilitate this Court in arriving at a clear view. It is the
tendering authority who has authored the bidding document and, as such, it is in the
best position to interpret and define the term ‘contract value’ in reference to which the
qualification criterion set forth in Clause 4.5A.(c) of the bidding document/SBD is to be
understood. It has become a settled position of law, more particularly, with regard to
a tender process that if two interpretations with regard to a term appearing in the
bidding document which is technical in nature, are possible then the interpretation of
the author of the bidding document/tendering authority is to be respected. The Court
is to refrain from making its own interpretation of such term and thereafter, substitute
its interpretation for such term with the interpretation given by the author of the
bidding document/tendering authority with the assumption as if it is exercising any
appellate jurisdiction, unless the interpretation given by the author of the bidding
document/tendering authority is so absurd and irrational that no prudent and
reasonable person is likely to arrive at such an interpretation.
33. What has emerged from the document dated 18.01.2016, extracted in paragraph
30 above, the Project Allocated Cost [PAC] for the subject-work i.e. ‘Construction of
New Medical Colleges and Up-gradation of Hospital at Vidisha’ was Rs. 248.01 crores.
The petitioner submitted its bid for the subject-work at a bid value below 5.40% of
the PAC. The subject-work was awarded to the petitioner at its said quoted bid value
which was Rs. 234.62 crores, meaning thereby, it had tendered to execute the subject-
work at Rs. 234.62 crores. Both these two figures for the subject-work, that is, PAC at
Rs. 248.01 crores and the tendered cost at Rs. 234.62 crores were lesser than Rs.
266.45 crores, which is approximately 40% of the bid value for the Contract Work,
that is, “Construction of New Medical College centering MMCH and Kalapahar campus
along with 800 bedded General Hospital at MMCH Campus in Guwahati”. Though the
petitioner herein has sought to interpret and equate the term ‘contract value’ with the
Page 30 of 35
final value at which the subject-work which has been executed sans the escalation
made therein and the final bill for the subject-work which has been raised, this Court
is not persuaded to reach such a view as it has found that the term ‘contract value’ is
more synonymous with the term ‘tendered cost’, as has been insisted by the author of
the bidding document/tendering authority. This Court has not found such
interpretation of the term made by the author of the bidding document/tendering
authority arbitrary, irrational and unreasonable in any manner.
34. In the considered view of this Court, a bidder like the petitioner cannot compel
its own interpretation of the term ‘contract value’ to be foisted unilaterally on the
author of the bidding document/tendering authority. It is also not open for a bidder to
demand before the Court to compel the author of the bidding document/tendering
authority to accept its interpretation of the term ‘contract value’. This Court has, thus,
refrained itself to make any endeavour to give its own interpretation to the term
‘contract value’, appearing in Clause 4.5A(c), especially not at the instance of a bidder
participating in the competitive bidding process, giving a go-by the interpretation
ascribed to the term by the author of the bidding document/tendering authority who
has authored it with the assistance of the experts in the field, by taking into purview
its requirements and its experience in the field. In such view of the matter, the prime
contention advanced on behalf of the petitioner is found not acceptable by this Court.
The ground of rejection regarding lack of necessary documentary evidence in support
of single similar nature of work is not found arbitrary, unlawful, irrational or mala fide
on the touchstone of Article 14 of the Constitution of India.
35. The matter of responsiveness of a bid is to be determined on the basis of the bid
submitted by the bidder at the time of its submission and the tendering authority can
determine the bid’s responsiveness or otherwise on the basis of the
materials/documents submitted with the bid. There is no obligation cast on the
tendering authority to call for any further information or clarification or document from
any other source, though it may call for the same in its own discretion. In the case in
hand, the tendering authority finding certain discrepancies in respect of the
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performance certificate dated 04.02.2021 had asked for certain clarification or
information from the MPRDCL on an urgent basis. That fact of calling such clarification
or information by itself had not made it binding for the tendering authority to wait for
such clarification or information. The decision to proceed with the bidding process on
16.02.2021 cannot be held to be arbitrary or illegal when there are other bidders whose
technical bids were found responsive. It is pertinent to note that the petitioner has
neither raised any whisper as regards the eligibility, qualification or capacity of the
other two participating bidders nor has contended that their technical bids and/or
financial bids were not responsive to the bidding document in any manner. Considering
the nature of the Contract Work which is worth at least of Rs. 666.1351 crores, the
qualification criterion set forth in Clause 4.5A.(c) the bidding document is to be held
as an essential condition which is to be satisfied by a bidder at the time of submission
of bid. If the information/documents furnished by a bidder are found not sufficient to
arrive at a satisfactory conclusion with regard to fulfillment of the qualification
criterion/criteria by such bidder the tendering authority is not obligated to give any
further time to furnish additional information/documents to supplement the deficient
information/documents already provided at the time of submission of the bid.
Consequently, the contention of the petitioner that the tendering authority ought to
have waited for the response from the MPRDCL cannot be countenanced.
36. Ultimately, the clarification or information, sought for by the tendering authority,
came from the MPRDCL on 25.02.2021 which was too late in the day to walk the road
again from the stage of technical bid evaluation as by that time, there has been
emergence of the successful bidder. In such view of the matter, any further dilation
on the performance certificate dated 04.02.2021 vis-à-vis the performance certificate
dated 25.02.2021 is not necessary in which respect the contention has been advanced
by the State respondents that the facts and figures in the said two performance
certificates are found at variance with each other, as averred in paragraph 12 of the
affidavit-in-opposition.
Page 32 of 35
37. The petitioner has also raised absence of public interest behind the impugned
decision of the petitioner’s disqualification at the technical bid evaluation stage by
contending that the bid values quoted by the other two participating bidders were
higher than the bid value quoted by the petitioner for the Contract Work. The
contention is made without, however, impleading the other two participating bidders
as party-respondents in the writ petition. In this connection, it would be apposite to
refer to the decision in Raunaq International Ltd. vs. I.V.R. Construction Ltd. and
others, (1999) 1 SCC 492, wherein the elements of public interest have been discussed
in the following manner :-
“10. What are these elements of public interest ? (1) Public money would be
expended for the purposes of the contract; (2) The goods or services which
are being commissioned could be for a public purpose, such as, construction
of roads, public buildings, power plants or other public utilities. (3) The
public would be directly interested in the timely fulfilment of the contract
so that the services become available to the public expeditiously. (4) The
public would also be interested in the quality of the work undertaken or
goods supplied by the tenderer. 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 in re-doing the
entire work - thus involving larger outlays or public money and delaying the
availability of services, facilities or goods, e.g. a delay in commissioning a
power project, as in the present case, could lead to power shortages,
retardation of industrial development, hardship to the general public and
substantial cost escalation.
The decision in Raunaq International Ltd. (supra) has further observed that a
mere difference in the prices offered by tenderers may or may not be decisive in
deciding whether any public interest is involved in intervening in a commercial
transaction. Before making any intervention in a commercial transaction involving a
project, the Court shall also require to take into consideration that by such intervention
the proposed project may considerably be delayed thus, escalating the cost far more
than any saving. Unless the Court is satisfied that there is a substantial amount of
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public interest, or the transaction is entered into mala fide, the Court should not
intervene under Article 226 of the Constitution of India in disputes between rival
tenderers. The decision has further gone to observe in the following manner :-
“16. It is also necessary to remember that price may not always be the
sole criterion for awarding a contract. Often when an evaluation
committee of experts is appointed to evaluate offers, the expert
committee’s special knowledge plays a decisive role in deciding which
is the best offer. Price offered is only one of the criteria. The past
record of the tenderers, the quality of the goods or services which are
offered, assessing such quality on the basis of the past performance
of the tenderer, its market reputation and so on, all play an important
role in deciding to whom the contract should be awarded. At times, a
higher price for a much better quality of work can be legitimately paid
in order to secure proper performance of the contract and good
quality of work – which is as much in public interest as a low price.
The court should not to substitute its own decision for the decision of
an expert evaluation committee.”
In view of non-compliant nature of its technical bid with regard to the essential
qualification criterion which is primarily in relation to past experience, for the reasons
discussed above, this Court, taking a cue from the above observations, has not found
any merit in the petitioner’s contention about public interest for the simple reason that
the said qualification criterion with regard to past experience is intricately connected
with public interest as the Contract Work is a public project of importance in the health-
care sector.
38. On the preliminary issue, a number of decisions have been referred to on the
issue of non-joinder of necessary party. The law is settled that a necessary party is
one without whom no order can be made effectively and as such, no further dilation
is required on that aspect. As the petitioner has not impleaded the other two
participating bidders as party-respondents in this writ petition it is not open for the
Page 34 of 35
petitioner to argue regarding price differences in the bid value quoted by the petitioner
vis-à-vis the bid values quoted by the other two participating bidders, in their absence
and behind their backs. Relying on the decision in Silppi Constructions Contractors
(supra), the petitioner has sought to advance its case by stating that it is only assailing
the rejection of its technical bid. In Silppi Constructions Contractors (supra) also, the
petitioner was only challenging the rejection of its technical bid. It has been held
therein that at that stage the other tenderers were not necessary parties. The Hon’ble
Supreme Court has held that the writ petition was maintainable even in the absence
of other tenderers because till that stage there was no successful tenderer. At the
same time, it has held that who are the necessary parties would depend upon the facts
of its case. It has also been held that the position might be otherwise if a tenderer
challenges a bid awarded to another or challenges the rejection of its bid at a later
stage. It, thus, appears that the observation regarding the other tenderers not being
necessary parties, was made with regard to the particular fact situation obtaining in
that case.
39. The competitive bidding process had begun in the case in hand with the
submission of the bids by the three participating bidders with two barriers - technical
bid evaluation stage and financial bid evaluation stage – to cross for them to emerge
as the successful bidder by one of them. The petitioner was stopped by the tendering
authority at the first barrier, that is, at the technical bid evaluation stage and the other
two participants were allowed to remain in the race who eventually also crossed the
next barrier, that is, the financial bid evaluation stage. After the stage of financial bid
evaluation was over, rankings L-1 and L-2 were given to them. It was the L-1 bidder
who had emerged as the successful bidder. The petitioner also had the knowledge
who had reached the last stage in the bidding process. After emergence of the
successful bidder the only thing left to be completed by the tendering authority is the
award of the Contract Work as per the terms of the bidding document. At that stage,
the petitioner decided to challenge by this writ petition his disqualification made by the
tendering authority at the stage of technical bid evaluation. In Afcons Infrastructure
Limited (supra), the original petitioner approached the High Court when its bid was
Order downloaded on 24-12-2024 07:13:29 PMPage 35 of 35
disqualified at the technical bid opening stage. The writ petition was allowed and the
High Court had the opinion that the eligible bidders were not entitled to be either
impleaded by the ineligible bidder or were not entitled to be heard. The Hon’ble
Supreme Court has observed that the view of the High Court was not appropriate view
to take in matters like that. One of the reasons is that there could be occasions where
an eligible bidder would bring to the notice of the owner or employer of the project
that the ineligible bidder was ineligible for additional reasons or reasons that were not
within the contemplation of the owner or employer of the project. Taking note of the
aforesaid views expressed in Afcons Infrastructure Limited (supra) and Silppi
Constructions Contractors (supra) and also of the fact situation obtaining in the case
in hand where there has been identification of the successful bidder when the writ
petition was filed, I find force in the submission made on behalf of the State
respondents that the petitioner ought to have made the successful bidder a party-
respondent in the writ petition. In such view of the matter, this Court is also of the
considered view that the writ petition has suffered for non-joinder of the necessary
party.
40. In view of the discussion made above and for the reasons stated therein, this
Court has found no reason to interfere with the decision taken by the Technical Bid
Evaluation Committee on 16.02.2021 with regard to disqualification of the technical
bid of the petitioner. Consequently, the writ petition being devoid of merit, stands
dismissed. The interim order stands recalled. The respondent authorities will be at
liberty to proceed further with the competitive bidding process under reference. There
shall, however, be no order as to cost.
JUDGE
Comparing Assistant
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