AI Structured Summary
Not yet generated for this judgment
No AI summary yet
Generate an eight-section analysis of this judgment — facts, issues, reasoning, ratio and a plain-language gist.
Judgment
155 paragraphs · 8,813 wordsVipin Sanghi, CJ
1) The petitioner has preferred the present writ petition to assail the decision of the Executive Director, WAPCOS Limited, i.e, respondent No. 2, vide which the petitioner’s technical bid, in respect of the tender invited by the respondents for construction of Naugaon to Selakot–Kane–Rikhad–Mehragaon Motor Road, Stage II, under Package No. UT01–05 was rejected, and the respondents proceeded to open the financial bids of respondent Nos. 3 and 4. The petitioner also seeks a mandamus commanding the respondent No. 2 to open the financial bid of the petitioner, and to award the contract to the petitioner. By way of amendment, the petitioner also introduced the relief of quashing of the award of the contract in favor of respondent No. 3 on 17.08.2021.
2) The case of the petitioner is that the aforesaid construction project, with five years maintenance, was planed to be undertaken under the Pradhan Mantri Gram Sadak Yogana (PMGSY) in June 2020. For carrying out of the work under the said project, the contractor had to be appointed through a bidding process based on the model standard bidding document as notified for the PMGSY. On 03.07.2021, the tender in question was published by the WAPCOS. The estimated cost of the construction work was Rs. 900.27 lakhs, and the estimated cost of maintenance for five years was Rs. 82.59 lakhs. The period of completion was stipulated as nine months. The bids were open for On-line submission till 01:00 P.M. on 28.07.2021. The bid opening was fixed on the same day, i.e., 28.07.2021, at 03:00 P.M.
3) Under the bidding process, once the technical bids of the bidders were opened, the rival bidders were permitted to raise objections and point out lacunae in the technical bids of the other competitors / bidders. Respondent No. 3, i.e., M/s Bisht Construction, was also one of the bidders and it raised three complaints in respect of the petitioner’s technical bid. The petitioner’s submission is that these objections were entertained, despite the Bid Evaluation Committee declaring the petitioner and three others, including respondent No. 3, to be qualified in terms of Clause 22.5 of the Instructions to Bidders (ITB). The complaints made by respondent No. 3 qua the petitioner’s technical bid were considered by the Bid Evaluation Committee, and on that basis, the petitioner was declared to be technically disqualified along with one other bidder. At the end of the said exercise, only two bidders were declared to be technically qualified, namely, M/s Bisht Construction, i.e., respondent No. 3, and M/s Parwatiya Construction. The deficiencies / lacunae pointed out by respondent No. 3 in the petitioner’s technical bid, and the decision taken by the Bid Evaluation Committee on those lacunae / complaints, are contained in the minutes of the meeting of the Bid Evaluation Committee held on 16.08.2021. The relevant extract of the said minutes reads as follows:
“(C) Name of the complainer : - Bisht Construction
1
M/s Dinesh Chandra Patni:
We have a Complaint regarding a uploaded No. 08 the bidder has undated in Project Name – Reconstruction of Kunalta M/R that the Date of issue of Work Order is 21/11/2017 and Stipulated date of Completion is 20/02/2017 which is not possible. Thereby the Certificate is unsatisfactory and wrong.
On checking the bid again, it is found that the information provided by the bidder M/s Dinesh Chandra Patni at Page No.-8 does not match with the information given in the certificate issued by the Executive Engineer.
Complaint is found correct and thus invokes the Clause 4.7(i) of ITB, Section-2 of SBD of false representation in the statement and the Complaint is hereby resolved by Dis-Qualifying M/s Dinesh Chandra Patni.
2
Also, in Page No-33 the bidder has not uploaded a relevant document since the certificate is of another Package Bid Id. The accurate Package Id. UT0105/XXI(RP) and the bidder has shown: UT01105/XXI (RP) thereby the certificate is irrelevant and not acceptable.
On checking the bid again, Complaint is found correct.
3
And also, in Pg No.197, 198 the bidder has not sealed his signature, in the Balance Sheet which make the Bidder certificate unacceptable and there is difference in Financial Documents of 2018 & 2019.
Bid is re-viewed and it is found that bidder has not signed and stamped the Balance sheet of year 2020-21. Signatures of owners of the firm are compulsory on Balance Sheet and Profit & Loss Statements. It is found that owner of firm M/s Dinesh Chandra Patni has not signed and stamped on Balance Sheet and Profit & Loss Statement, making the Balance Sheet as in-valid.
Also, Balance Sheet of year 2018-19 provided by bidder in his bid is incomplete. Part of form 3CD has not been uploaded by bidder after page 158 of his bid.
As per the requirement of Clause 4.2(f) of ITB of SBD, Reports on the financial standing, Profit & Loss statements and Auditor’s Report for the past 03 financial years are required to be submitted by the Bidder.
As per the findings on re-view of bid, 02 years Financial Data essential for Eligibility Criteria is incomplete (FY 2018-19) and in-valid (FY 2020-21) as per the requirement and thus fails to fulfill the Eligibility Criteria as per Clause 4.2 (f) of ITB of SBD.
Complaint is found correct and hereby resolved by Dis-Qualifying M/s Dinesh Chandra Patni.
4) The petitioner submits that the lacunae pointed out / complaints made by respondent No. 3 qua the petitioner’s technical bid were ill-founded, and the findings recorded by the Bid Evaluation Committee on the said complaints / lacunae, are factually erroneous. The petitioner has dealt with each of the lacunae and the findings returned by the Bid Evaluation Committee in its petition.
5) Mr. Negi, learned counsel for the petitioner submits that so far as the first complaint / lacuna contained in the aforesaid tabulation is concerned, the same related to the certificate produced by the petitioner to show satisfactory completion of other similar works. Mr. Negi submits that under Clause 4.4 A of the ITB, to qualify for award of the contract, each bidder was required to, in the last five years, inter alia, have satisfactorily completed - “as prime Contractor or sub-contractor, at least one similar work equal in value to one-third in case of Naxal / LWE effected districts) of the estimated cost of work (excluding maintenance cost for five years) for which the bid is invited, or such higher amount as may be specified in the Appendix to ITB. The value of road work completed by the bidder under Pradhan Mantri Gram Sadak Yojana in originally stipulated period of completion shall be counted as 120% for the purpose of this Sub-Clause.” The aforesaid condition is found in Clause 4.4 A(b) of the ITB.
6) The case of the petitioner is that since the estimated cost of the work was Rs. 900.27 lakhs, excluding the maintenance work, in terms of the aforesaid instruction the bidders were required to produce certificates of having satisfactorily completed as either prime contractor, or sub-contractor, at least one similar work equal in value of Rs. 300.09 lakhs. Mr. Negi submits that the petitioner provided certificates of two earlier executed similar works along with its bid. The tabulation showing the work performed as the prime contractor / similar nature work, which accompanied the petitioner’s bid, reads as follows :
“WORK PERFORMED AS THE PRIME CONTRACTOR / SIMILAR NATURE WORK
Project Name
Name of Employer
Description of work
Value of contract
Contract no.
Date
Of
Issue
Of
work order
Stipulated date
of completion
Actual date completion
Remark explaining reason
for delay,
if any
1
2
3
4
5
6
7
8
9
Re
Construction
Of
Kunalta
Motor Road
Program Manager UDRP (R&B) / Executive Engineer World Bank Division PWD Munsyari
Hill Site Cutting 2. Massonary work including RR(1:5), RR(1:3), RR Dry ETC
WBM Work
Bituminous Course
Road Safety Work
1219.34 Lac
144-UDRP/ PWD/07/RD/ 120 Dated 14.11.2017
21.11.2017
20.02.2017
20.02.2019
Due to Variation
Re-construction of Jainti Pipli
Valka-Motor Road
Program Manager UDRP (R&B) / E.E. World Bank Division PWD Nainita
Hill Site Cutting 2. Massonary work including RR (1:5), RR(1:3), RR Dry ETC
WBM Work R. Bituminous
Course
Road Safety Work
1468.39 Lacs (50% share in joint venture)
109-UDRP/ PWD/ 09 / 01/RD/115 Dated 03.12.2015
03.12.2015
09.03.2017
25.12.2017
Due to Variation
7) The petitioner also provided the requisite experience certificates issued by the employer concerned in respect of the aforesaid works. One experience certificate was issued by the Executive Engineer, World Bank Division, PWD, Munsyari dated 05.07.2019, and the second certificate was issued on 05.03.2018, again by the Executive Engineer, World Bank Division, PWD, Nainital. According to the experience certificate, in relation to the first work, i.e. for reconstruction of Kunalta Motor Road, the value of the work executed was certified as Rs. 1219.34 lakhs with the date of start being 21.11.2017; the stipulated date of completion being 20.02.2019 and; the actual date of completion being 26.05.2019. The second certificate dated 05.03.2018 was in respect of the work of reconstruction of Jainti-Pipli-Valka Motor Road for Rs. 1468.39 lakhs with the date of work issue being 03.12.2018; stipulated date of completion being 09.08.2017 and; the actual date of completion being 28.12.2017.
8) Mr. Negi submits that due to a typographical error in relation to the work executed for reconstruction of Kunalta Motor Road, in the tabulation filed by the petitioner, the stipulated date of completion, and the actual date of completion, were wrongly typed as 20.02.2017 and 20.02.2019 whereas, they should have read as 20.02.2019 and 26.05.2019, respectively. Mr. Negi submits that, firstly, the said minor typographical error was inconsequential, since the petitioner had provided the actual experience certificate dated 05.07.2019 which contains the correct dates of start of the work; stipulated date of completion of the work, and; actual date of completion of the work. He submits that the bidders are not to be tested for minor typographical errors which may creep into the documents prepared and submitted, and which have no material bearing on the technical bid of the bidder. He further submits that even if the respondents took cognizance of the complaints made by respondent No. 3 qua the typographical error of the dates in the tabulation, at the highest, the said experience claimed by the petitioner of reconstruction of Kunalta Motor Road could have been ignored. He submits that since the stipulation in the ITB was only for submission of, at least, one earlier executed similar work, the second work executed by the petitioner, namely, reconstruction of Jainti-Pipli-Valka Motor Road was itself sufficient to enable the petitioner to qualify, inasmuch as, the value of the contract of the said work was Rs. 1468.39 lakhs, which was well beyond Rs. 300.09 lakhs stipulated by the respondents in Clause 4.4 A(b) of the ITB. He points out that the work actually executed by the petitioner was in excess of the value of the contract, i.e., Rs. 1488.32 lakhs. Mr. Negi, therefore, submits that the first reason recorded by the Bid Evaluation Committee for rejection of the petitioner’s technical bid was completely misplaced. He further submits that invocation of Clause 4.7(i) of the ITB, Section 2 of SBD by the Bid Evaluation Committee was completely misplaced. The said Clause 4.7(i) reads as follows:
“4.7 Even though the bidders meet the above qualifying criteria, they are subject to be disqualified if they have:
i) made misleading or false representations in the forms, statements, affidavits and attachments submitted in proof of the qualification requirements; and/or”
9) He submits that a typographical error in the tabulation submitted by the petitioner could not be classified as, either misleading, or a false representation by the petitioner, inasmuch as, the said typographical error was immaterial and the petitioner had provided the experience certificates on the basis of which the tabulation was prepared and submitted. There was nothing for the petitioner to be gained by introducing the typographical error in relation to the stipulated date of completion, and the actual date of completion, in relation to the work relating to reconstruction of Kunalta Motor Road. For a statement to be termed as misleading or a false representation, the same should convey such a state of affairs, as does not exist, and which has the effect of misleading the receiver of the statement into taking a decision which he / she would not have otherwise taken had the correct facts been placed before him / her. In the present case, it would have been evident to anyone, who would have gone through the tabulation submitted by the petitioner, that the dates mentioned therein qua the work experience relating to Kunalta Motor Road work were wrongly typed as the stipulated date of completion could possibly not have been prior to the date of issue of the Work Order. Moreover, the actual experience certificate containing the correct dates was also placed on the record along with the tabulation, leaving no scope for anyone getting misled by the petitioner. The petitioner, therefore, could not have been disqualified with the allegation of the petitioner having misled or misrepresented the respondent No. 2, only on account of a typographical error in the tabulation submitted by the petitioner.
10) Mr. Negi submits that, similarly, the second objection raised by the respondent No. 3, M/s Bisht Construction, was equally merit-less. The objection was in relation to the undertaking given by the petitioner which reads as follows:
“If the work Namely Construction and Maintenance of Naugaon to Selakot-Kane-Rikhad-Mehragaon Motor Road Stage-II with 5 years Maintenance under PBMC. Identification No: - UT01105/XXI [RP] is awarded to us then we will establish a field laboratory in a site for spot testing and checking.”
11) The objection raised by respondent No. 3 was that the identification No. typed in the said undertaking was UT01105/XXI (RP), whereas, the Package No. of the work under the tender was “UT0105/XXI (RP)”. Thus, it appears that due to typographical error one extra digit ‘1’ was typed while typing the Package No. / Identification number. Mr. Negi submits that since an undertaking was submitted in response to the tender in question, it was obvious - that the undertaking related to the work under the tender in question. Mere introduction of one extra digit, i.e., ‘1’ would not tantamount to the petitioner not uploading the relevant document / certificate / undertaking.
12) Mr. Negi submits that respondent No. 3 did not even submit the undertaking sought by the respondent authorities, yet the bid of respondent No. 3 has been held to be responsive. He submits that the petitioner was much better off, since the petitioner submitted the undertaking with a small and obvious typographical error in the undertaking which, under the terms of the ITB, should have been ignored as the respondent authorities are required to assess - whether the bid is substantially responsive, or not?
13) In relation to the third objection / lacunae - that the petitioner-bidder has not affixed his signature in the balance-sheet, and that there is difference in the financial documents of 2018 and 2019, the submission of Mr. Negi is that the balance-sheet of the petitioner, as on 31.03.2021, submitted with the tender bears the seal, stamp and signature of the Chartered Accountant with the UDIN number. He submits that the petitioner had affixed his signature wherever the name of the petitioner occurs. Mr. Negi submits that Clause 19 in Section 2 – Instructions to Bidders, and Standard Bidding Document for PMGSY, provides for electronic submission of bids. The same, inter alia, requires - “All the documents are required to be signed digitally by the bidders. After electronic online bid submission, the system generates a unique bid identification number which is time stamped. This shall be treated as acknowledgement of bid submission”.
14) Mr. Negi submits that the petitioner complied with the aforesaid Clause and submitted a digitally signed bid, which is considered as a duly signed document, in law. There was, therefore, no need to separately affix signatures manually, on each page of the bid document by the petitioner. In this regard he has drawn our attention to the petitioner’s bid, which shows that the petitioner had affixed the digital signature on the document on 27.07.2021, at 05:52 P.M. Mr. Negi submits that, since the petitioner’s bid was duly digitally signed, the petitioner was issued the bid ID, bearing No. 475740, upon submission of the bid on 27.07.2021, at 05.54 P.M., duly acknowledging the submission of bid.
15) Mr. Negi further relies on Clause 25.1. The same reads as follows:
“25. Examination of Bids and Determination of Responsiveness
25.1 During the detailed evaluation of “part-I of Bids”, the Employer will determine whether each Bid (a) meets the eligibility criteria defined in Clauses 3 and 4; (b) has been properly signed; (c) is accompanied by the required securities; and (d) is substantially responsive to the requirements of the bidding documents. During the detailed evaluation of the “Part-II of Bids”, the responsiveness of the bids will be further determined with respect to the remaining bid conditions, i.e., the priced bill of quantities, technical specifications and drawings.
25.2 A substantially responsive “Financial Bid” is one which conforms to all the terms, conditions, and specifications of the bidding documents, without material deviation or reservation. A material deviation or reservation is one (a) which affects in any substantial way the scope, quality, or performance of the Works: (b) which limits in any substantial way, inconsistent with the bidding documents, the Employer’s rights or the Bidder’s obligations under the Contract; or (c) whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids.
25.3 If a Bid is not substantially responsive, it will be rejected by the Employer, and may not subsequently be made responsive by correction or withdrawal of the nonconforming deviation or reservation.”
(emphasis supplied)
16) Mr. Negi submits that under the ITB, the employer, i.e., the respondent authorities have to examine – whether the bid submitted by the bidder is, inter alia, “substantially responsive to the requirement of the bidding documents”. He submits that the respondents have not stated as to how the petitioner’s bid is not considered to be substantially responsive. He submits that a hyper technical approach adopted by the respondents to disqualify the petitioner is not in terms of the ITB, and the spirit of the tendering process. He submits that the respondents by adopting a hyper technical approach have curtailed competition, which is the primary objective of inviting bids from qualified bidders.
17) In response to the charge that the petitioner did not submit the complete balance-sheet for the year 2018-19, as the Form 3CD was not submitted by the petitioner, Mr. Negi submits that even respondent No. 3 did not submit the said Form. He submits that if, on that ground, the petitioner’s bid was considered as incomplete, the same reasoning would apply to the bid of respondent No. 3. The respondent authority cannot discriminate between the two bidders, and the same standards of evaluation have to be applied to all the bidders. The fact that the bid of respondent No. 3 was not considered to be incomplete on account of non-submission of Form 3CD, shows that the respondents did not consider the submission of Form 3CD as essential, and its absence could not lead to consideration of the balance-sheet, as incomplete.
18) Mr. Negi has also referred to Clause 4.2 of the ITB, which requires the bidders to - “include the following information and documents with their bids in Section 2 Quantification Information unless otherwise stated in the Appendix to ITB:
Copies of original documents defining the constitution or legal status, place of registration, and principal place of business; written power of attorney of the signatory of the Bid to commit the Bidder;
(b) …
(c) …
(d) …
(e) …
(f) reports on the financial standing of the Bidder, such as profit and loss statements and auditor’s reports for the past three years;
(g) …
(h) …
(i) …
(j) …
(k) …”
(emphasis supplied)
19) Mr. Negi submits that the use of the expression, “such as” shows that the respondents required the bidders to submit “reports on the financial standing of the bidder”. However, the requirement of submission of profit and loss statement, and auditor’s reports for the past three years, is only by way of illustration, and not mandatory. There was no indication that the Forms forming part of the balance-sheet are also required to be submitted. He submits that there are several Forms which form part of the balance-sheet and Form CD is only one of them.
20) Mr. Negi relies upon the bid submitted by respondent No. 3, which has been filed by the petitioner along with the rejoinder affidavit. Mr. Negi submits that respondent No. 3 did not file its auditor’s report, let alone Form 3CD. Mr. Negi, therefore, submits that the respondent No. 3 has no legs to stand on, while claiming that the petitioner had failed to submit Form 3CD with the balance-sheet. In this regard he has drawn our attention to the averments contained in paragraphs 11 and 12 of the rejoinder affidavit, which have not been responded to by respondent No. 3. In the said paragraphs the petitioner has, inter alia, stated as follows:
“11. That the contents of paragraph 14 are not admitted and hence denied. It is humbly submitted that the third respondent is trying to mislead the Hon’ble Court with regard to the requirement of Form 3CD under Section 44AB of the Income Tax Act, 1961. Form 3CD was never specifically asked anywhere in the Standard Bidding Document or in the Instructions to Bidders. If all documents for the purpose of tax calculation are to be assumed as essential criteria for making any bid, then there are several other forms that any taxpayer fills for the purposes of Income Tax Act, which then assume essential qualification for every bidding document, this would be the position if the logical conclusion is drawn from the averments drawn from paragraph 14 of the counter affidavit. The auditor’s report was asked for and the auditor’s report was provided by the petitioner’s company. Furthermore, the answering respondent, who has not even submitted his (2018-2019) report, cannot point fingers at the petitioner’s bid.
That the contents of paragraph 15 are not admitted and hence denied. Form 3CD may be a statement of particulars, but as rightly pointed out by the answering respondent himself, it is required to be furnished under Section 44AB of the Income Tax Act. The present dispute before the Hon’ble Court is not a tax dispute, it is a dispute with regard to the arbitrary rejection of the petitioner’s bid. Furthermore, just because Form 3CD is a detailed document, this alone does not makes it an essential criteria of the Standard Bidding Document. It is ironic and astonishing to note that the third respondent is making lengthy submissions about Form 3CD after having not submitted its complete Form 3CD. This can be clearly ascertained from a mere perusal of the bid submitted by the third respondent. Paragraph 53 of the writ petition is not misleading in any way and therefore, the petitioner has not committed any fault as per the Standard Bidding Document. Petitioner has submitted more information on Form 3CD than the answering respondent. If all requirements of the IT Act are compulsory, then the answering respondent stands to strict proof to adhere all of them himself, before questioning the petitioner which he has not done.”
21) Mr. Negi has placed reliance on the judgment of the Supreme Court in Reliance Energy Ltd. and another Vs Maharashtra State Road Development Corporation Ltd. and others, (2007) 8 SCC 1, and in particular, on paragraphs 36 and 37, relevant extracts wherein, reads as follows:
“36. …”Level playing field” is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of “level playing field”. We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of “level playing field” is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. “Globalisation”, in essence, is liberalisation of trade. Today India has dismantled licence raj. The economics reforms introduced after 1992 have brought in the concept of “globalisation”. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of “level playing field” embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of “equality” should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of “level playing field”. According to Lord Goldsmith, commitment to the “rule of law” is the heart of parliamentary democracy. One of the important elements of the “rule of law” is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of “reasonableness”, then such an act or decision would be unconstitutional.
In Union of India v. International Trading Co., (2003) 5 SCC 437, the Division Bench of this Court speaking through Pasayat, J. had held: (SCC p. 445, paras 14-15)
“14. It is trite law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.
While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basis requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualised than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.”
(emphasis supplied)
22) Mr. Negi has also placed reliance on the judgment of the Punjab and Haryana High Court at Chandigarh in M/s Sushil and Company Vs Food Corporation of India and others, Civil Writ Petition No. 21056 of 2014, decided on 14.01.2015.
23) Mr. Pradeep Joshi, the learned Additional Chief Standing Counsel for the State, has defended the action of the respondents. He has placed reliance on Clause 4.7 of the ITB, which states that even though the bidders may meet the qualifying criteria, they are subject to be disqualified if they have, inter alia, - “made misleading or false representations in the forms, statements, affidavits and attachments submitted in proof of the qualification requirements”.
24) He has drawn our attention to Clause 12.2(d) of the ITB which, inter alia, requires the bidders to submit original affidavit regarding correctness of the information furnished with bid document as per Clause 4.4 B(a)(ii) of the ITB. Clause 4.4 B(a)(ii) requires each bidder to produce - “an affidavit that the information furnished with the bid document is correct in all respects”. He submits that the petitioner, however, did not submit the correct information, inasmuch as, the information provided by the petitioner in relation to the project name ‘Re-construction of Kunalta M/R’, incorrectly mentioned the date of issue of Work Order and date of completion. The other infirmities found by the Bid Evaluation Committee in its meeting held on 16.08.2021, in the petitioner’s bid, also tantamounts to submission of false information by the petitioner.
25) Reliance is also placed on Clause 32.5 of the ITB which states that the bidder will not directly or through any person or firm indulge in fraudulent practice, which is defined to, inter alia, mean, willful misrepresentation or omission of facts or submission of fake / forged documents, in order to induce public official to act in reliance thereof, with the purpose of obtaining unjust advantage by or causing damage to justified interest of others and / or to influence the procurement process to the detriment of the Government interests.
26) He also places reliance on the judgment of the Supreme Court in M/s N.G. Projects Limited Vs M/s Vinod Kumar Jain and others, Civil Appeal No. 1846 of 2022, decided on 21.03.2022, wherein the Supreme Court held that the interference with the awarded contract relating to construction of roads, which is an essential part of development of infrastructure in any State, was wholly unwarranted.
27) In paragraph 23 of this decision, the Supreme Court observed as follows:
“In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work.”
28) The petition has also been opposed by respondent No. 3, the contractor to whom the contract has been awarded. Mr. Upadhyaya, learned counsel for respondent No. 3, submits that the petitioner has falsely stated in paragraph 4 of the writ petition – that the respondent agency opened a portal to invite complaints from any person / competitive bidder to find genuine fault in the technical bid as put forward by other persons. He submits that under the bidding process itself, it was open to the other bidders to raise their objections in relation to the bids submitted by the rival bidders, within five days, as per Clause 22.6, which reads as follows:
“22.6 The result of evaluation of Part-I of the Bids shall be made public on e-procurement systems following which there will be a period of five working days during which any bidder may submit complaint which shall be considered for resolution before opening Part-II of the bid.”
29) In his rejoinder, Mr. Negi has again highlighted the deficiencies in the bid submitted by respondent No. 3, which have been ignored by the Bid Evaluation Committee of the respondent authorities. He submits that respondent No. 3 did not submit the auditor’s report for the years 2020-21 and 2018-19; the Form 3CD filed by respondent No. 3 was only of one page, and not the complete Form, and; the Form 3CD submitted by respondent No. 3 for the financial year 2014-15, was also incomplete. Mr. Negi further submits that respondent No. 3 provided incomplete information under Clause 1.3.1 – “work performed as prime contractor (in the same name and style) on construction work of a similar nature and volume over last five years”. In particular, he referred to the work claimed to have been performed by the respondent No. 3 under the project : Construction of Rapah to Gangata Motor Road (Stage I & II), wherein the date of issue of the Work Order has deliberately been omitted from being mentioned. Mr. Negi submits that if the same standard of examination were to be applied to the bid of respondent No. 3, as the respondent Nos. 1 and 2 have applied to the bid of the petitioner, respondent No. 3 was also guilty of falsity and misrepresentation.
30) Before we proceed further, we may notice the relevant orders passed by this Court in this matter, from time to time.
31) On 26.08.2021, this Court directed that both the parties shall maintain status quo in the matter. The petitioner moved IA No. 03 of 2021, to seek leave to amend the writ petition on 31.08.2021, to incorporate the plea that during the pendency of the writ petition, respondent No. 2 has proceeded to award the contract to respondent No. 3. Consequently, the petitioner added the prayer for quashing of the award dated 17.08.2021 in favour of respondent No. 3, and also sought to implead respondent No. 3, as a party to the proceedings. The amendment application was allowed by the Court on 02.09.2021. The interim order was directed to be continued. On 06.04.2022, this Court modified the interim order dated 26.08.2021, while noticing the judgment of the Supreme Court in N.G. Projects Limited (supra). It was provided - that construction of the road may commence and the petitioner may be compensated by award of monetary damages, if it was found that he was wrongly excluded from tender process. Till 17.05.2022, the matter was listed before the learned Single Judge. Thereafter, since the matter relates to a tender process, it was listed before the Division Bench. On 28.07.2022, the petitioner was required to produce a copy of its complete bid with a supporting affidavit. The supplementary affidavit was accordingly filed by the petitioner on 30.07.2022.
32) We heard arguments and reserved judgment on 02.08.2022. Thereafter, we directed the matter to be listed on 05.08.2022. On that day, we directed - that subject to the decision that we render, the financial bid of the petitioner be opened and the final quotation of the petitioner as well as of the respondents be placed before the Court. The respondents were directed to place the result of the financial bid opening before the Court, and the matter was adjourned to 17.08.2022. On 17.08.2022, learned counsel for respondent No. 2 sought further time on the ground that NIC has requested further time to open the financial bid of the petitioner. However, respondent No. 2, thereafter, filed an affidavit explaining the difficulties in opening the financial bid of the petitioner. On 25.08.2022, we took note of the same. The respondents agreed that the Court may proceed on the basis of the financial bid produced by the petitioner before the Court. Counsel for the petitioner stated that the petitioner would file an affidavit along with its financial bid. The petitioner has filed the rejoinder affidavit to the response affidavit of respondent No. 2 on 25.08.2022. The petitioner has filed its price bid as filed with the respondent. The petitioner states that its bid was for Rs. 9,26,32,668.46. The price bid of respondent No. 3 is Rs. 9,78,79,225.84 and that of respondent No. 4 is Rs. 9,85,55,628.71. Thus, according to the petitioner, its price bid was lower than that of respondent No. 3 by Rs. 52,46,557.38.
33) We have heard learned counsels and considered their respective submissions, as taken note of here-in-above. We have also considered the decisions relied upon by learned counsels.
34) The issue that arises for our consideration is - whether the respondent authorities were justified in rejecting the technical bid of the petitioner for the reasons indicated in the minutes of Bid Evaluation Committee held on 16.08.2021.
35) There is no answer by the respondents to the submission of Mr. Negi, in relation to the obvious and clear errors pointed out by Mr. Negi, in the assessment of the Bid Evaluation Committee. As rightly pointed out by Mr. Negi, under Clause 4.4 A of the ITB, the past experience criteria had to be met by the bidder by establishing that in the last five years it has satisfactorily completed, as a prime contractor or sub-contractor, at lease of one similar work equal in value to the estimated cost of work, for which the bid was invited.
36) Pertinently, the petitioner had given experience certificates relating to two earlier contracts executed by it, and there is no discrepancy found by the respondents in relation to either the experience certificates, or in relation to the declaration made by the petitioner in relation to the other work, of which experience was claimed. The said experience certificate related to the construction of Jainti-Pipli-Valka Motor Road, the value whereof was Rs. 1468.39 lakhs, being fifty percent share of the petitioner in a joint venture. The said work experience was itself sufficient for the petitioner to qualify for the work in question since, for qualification of work in question, the petitioner was required to show work experience of works aggregating to Rs. 300.09 lakhs only.
37) A mere typographical error in the tabulation provided by the petitioner with regard to its past experience - in relation to the date of completion of one of the Works cannot be described as a willful mis-declaration, or a misleading or false representation by the petitioner. This is for the reason that the petitioner had not only provided the information in the format where the typographical error had crept in, but had also provided the certificates issued by the concerned employers with regard to the execution and satisfactory completion of the work. There was nothing to be achieved by the petitioner by mis-declaring the actual date of completion, and nothing would have turned on the same, in any event of the matter. The making of a misleading or a false representation involves an element of mens rea or ill-intention. Since, there was nothing to be gained by making a mis-declaration or false declaration, or false representation, and the petitioner had also provided the actual work certificates, there was no reason for the respondents to invoke Clause 4.7(i) of the ITB, in the facts of the case. The fact that the petitioner had provided experience certificates in respect of two different contracts, and the other work experience was itself sufficient to qualify the petitioner for the tender in question, shows that the typographical error in the statement filed by the petitioner along with its technical bid in relation to the construction of Kunalta Motor Road was completely unintentional, and could certainly not be described as a misrepresentation or false representation by the petitioner. Thus, the first reason for disqualifying the petitioner recorded by the Bid Evaluation Committee is arbitrary and completely unsustainable.
38) Similarly, the second objection raised by respondent No. 3, which was sustained by the Bid Evaluation Committee in its evaluation done on 16.08.2021, is equally specious. The petitioner furnished the undertaking, the relevant extract whereof we have extracted in paragraph 10 hereinabove. The mere typographical error in the Identification Number - with the introduction of the extra digit ‘1’, did not render the undertaking unacceptable. The assessment done by the Bid Evaluation Committee is not to test the typing skills of a bidder’s typist, who may have filled in the bid forms, declarations and undertakings. Evaluation has to be done by the Bid Evaluation Committee in a mature way like commercial men, who possess commonsense, and with a reasonable approach. To test the stand taken by the Bid Evaluation Committee, we ask the question : whether, if the Bid Evaluation Committee were to accept the undertaking furnished by the petitioner with the typographical error as contained in it, could the petitioner have reneged from the said undertaking subsequently on the ground that the Identification Number mentioned in the undertaking had an extra digit ‘1’? The answer is an obvious ‘No’. The undertaking was furnished by the petitioner in response to the Notice Inviting Tender in question. Therefore, it obviously related to the Notice Inviting Tender in question. No commercial man of prudence would ever adopt the unreasonable approach, as has been done by the Bid Evaluation Committee, in the present case. It is clear that the Bid Evaluation Committee has proceeded with a view to pick holes in the petitioner’s bid, and to somehow oust the petitioner from further contest on the basis of its price bid.
39) Clause 25 of the ITB itself lays down the manner of examination of bids and determination of responsiveness. The approach to be adopted by the Bid Evaluation Committee, required it to examine : whether the bid of the petitioner “is substantially responsive to the requirement of the bidding documents”? A substantially responsive financial bid is one, which conforms to all the terms, conditions and specifications of the bidding document, without material deviation or reservation. A material deviation is also defined, to mean – one which affects in any substantial way the scope, quality, or performance of the works; limits in any substantial way, inconsistent with the bidding documents, the employer’s rights or the bidder’s obligations under the contract, or; whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids. Thus, even if the petitioner were to be required to furnish a fresh undertaking with no typographical errors, the same would not have resulted in the giving of an opportunity to remove a material deviation.
40) The defects pointed out by the Bid Evaluation Committee in the petitioner’s technical bid certainly do not impinge on the substantial responsiveness to the requirements of the bidding documents. This is so, because, it is not even claimed by the respondent authorities, that the petitioner’s bid does not conform to all the terms, conditions and specifications of the bidding documents, or that there is a material deviation or reservation. It is not even explained by the Bid Evaluation Committee in the minutes of its meeting dated 16.08.2021, or even before us, as to how the petitioner’s bid could be said to be substantially non-responsive, and why it was not substantially responsive. Even before us, no endeavour has been made by the respondents to show, as to what is the substantial non-responsiveness, or material deviation or reservation in the petitioner’s bid.
41) The purpose of holding either a public auction, or inviting bids from the public in respect of public works is to maintain transparency, and to grant Government largesse in a transparent manner. Its purpose is also to inculcate more and more competition, so as to secure the best rates for public works from eligible and competitive bidders, as that has a direct bearing on the public exchequer. The purpose is not to pick holes and find fault with bidders, so as to trip them along way, and oust them from the race. That would be the objective, only when the employer / Bid Inviting Authority has pre-judged the issue, and decided to favour a particular bidder for award of the contract? The Bid Inviting Authority is expected to act as a fair umpire, and not to take sides in the matter of bid evaluation. Its conduct has to be fair, reasonable and non-discriminatory. Unfortunately, in the present case, the manner in which the petitioner’s bid was re-evaluated on the basis of the objection raised by respondent No. 3, shows that the respondent authorities not only acted unreasonably, unfairly, and in a non-transparent manner, but also with discrimination.
42) The discrimination pointed by Mr. Negi primarily relates to the third objection on which the petitioner’s technical bid was non-suited. The third objection of respondent No. 3, which was sustained by the Bid Evaluation Committee on 16.08.2021, relates to; firstly, the non-signing and non-stamping of the balance-sheet of the year 2021. The petitioner has explained that wherever in the bid form, the bidder’s name was mentioned; the bidder had signed and stamped the document. The balance-sheets are prepared by the Chartered Accountants, and the petitioner’s balance-sheet, which was provided along with the bid, was duly sealed, stamped and signed by the Chartered Accountant with the UDI number.
43) Moreover, the petitioner was required to submit the electronic bid, and bid documents were required to be signed digitally by the bidders. The petitioner did submit a completely digitally signed bid. Thus, in any event, it could not be claimed that the petitioner’s bid was not signed on any particular document, such as, the balance-sheet for the year 2020-21 by the bidder. Moreover, the discrimination resorted to by the Bid Evaluation Committee in the matter of evaluation of the petitioner’s bid, when compared to the bid of respondent No. 3, is also writ large. There were the same lacunae, if not more, in the bid submitted by respondent No. 3 as pointed out by the petitioner. Respondent No. 3 did not file its auditor’s report, let alone the Form 3CD. Non filing of the Form 3CD by the petitioner, along with the balance-sheet for the year 2018-19, was cited as a reason for disqualifying the petitioner. Even respondent No. 3 had not filed the said Form 3CD, yet respondent No. 3 was declared to be technically qualified. The respondent authorities are expected to maintain a level playing field in the matter of the treatment meted out to competitors and suitors. We have taken note of the observations made by the Supreme Court in Reliance Energy Ltd. (supra) by the Supreme Court, on this aspect.
44) The respondent authorities have not answered the charge of discrimination made against them, and have not explained as to how the bid of respondent No. 3 was held to be technically qualified. When respondent No. 3 had not filed either the auditor’s report, or the Form 3CD with its balance-sheet, then on the same ground, how the petitioner was non-suited. Thus, the discrimination meted to the petitioner is writ large. The aforesaid conduct of the respondent authorities also shows that the non-submission of the Form 3CD was not considered to be a material deviation or reservation by the bidders. The financial documents submitted by respondent No. 3 have also been shown to be incomplete, which is cited as a ground for rejection of the petitioner’s technical bid.
45) For the aforesaid reasons, we are of the view that the rejection of the petitioner’s technical bid was completely illegal and discriminatory. If the technical bid of respondent No. 3 was found to be responsive, the technical bid of the petitioner - by adopting the same yardstick, could not have been declared non-responsive. Thus, the exclusion of the petitioner from consideration of its financial bid, was completely illegal. We have already taken note of hereinabove, the fact that the petitioner’s financial bid was less than the financial bid of respondent No. 3 – which was accepted by Rs. 52,46,557.38. Since the contract in question has already been awarded to respondent No. 3, and respondent No. 3 has also been permitted to carry on the construction work, the only relief that we can grant to the petitioner, apart from the declarations made hereinabove, is to compensate the petitioner for the loss suffered by it, on account of the award of the contract to respondent No. 3, despite its financial bid being higher then that of the petitioner by Rs. 52,46,557.38.
46) In A.T. Brij Paul Singh Vs State of Gujarat, (1984) 4 SCC 59, the Supreme Court interpreted Section 73 of the Contract Act, and held that damages can be claimed by a contractor when the Government is found to have committed breach by improperly rescinding the contractor, and for estimating the amount of damages, the Court should make a broad evaluation instead of going into minute details. The Supreme Court in this decision observed as follows:
“What would be the measure of profit would depend upon facts and circumstances of each case. But that there shall be a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages if the other party to the contract is guilty of breach of contract cannot be gainsaid. In this case we have the additional reason for rejecting the contention that for the same type of work, the work site being in the vicinity of each other and for identical type of work between the same parties, a Division Bench of the same High Court has accepted 15 per cent of the value of the balance of the works contract would not be an unreasonable measure of damages for loss of profit.
* * *
Now if it is well established that the respondent was guilty of breach of contract inasmuch as the rescission of contract by the respondent is held to be unjustified, and the plaintiff-contractor had executed a part of the works contract, the contractor would be entitled to damages by way of loss of profit. Adopting the measure accepted by the High Court in the fact and circumstances of the case between the same parties and for the same type of work at 15 per cent of the value of the remaining parts of the works contract, the damages for loss of profit can be measured.”
47) To the same effect is the judgment in Mohd. Salamatullah Vs Government of A.P., (1977) 3 SCC 590. In both these cases, 15 per cent of the contract price was awarded as damages to the contractor.
48) The aforesaid two decisions were noticed by the Supreme Court in Dwaraka Das Vs State of M.P. and another, (1993) 3 SCC 500.
49) The aforesaid cases were cases, where the contract has been awarded to the contractor, and the rescission was found to be illegal. In the present case, the situation is a little different. The contract has not been awarded to the petitioner at all. The petitioner has wrongfully been ousted from consideration, and if the petitioner had not been so ousted, logically speaking, the contract would have been awarded to the petitioner, being the lowest bidder. In the light of the fact that the contract was not yet awarded to the petitioner, we are not inclined to adopt the same formula, as adopted in A.T. Brij Paul Singh (supra), or in Mohd. Salamatullah (supra), by computing the damages at the rate of 15 per cent of the price of the contract that the petitioner may have been awarded. Since the petitioner was not awarded the contract and, therefore, was not required to take any steps in pursuance thereof, we are inclined to limit the damages for wrongful exclusion of the petitioner in the tendering process to 05 per cent of the price bid of the petitioner. The petitioner did not have to undertake any preparatory work, or suffer any mobilization expenditure. Since the price bid of the petitioner was Rs.9,26,32,668.46, the damages at the rate of 05 per cent of the said amount come to Rs.46,31,633.42, which we award in favour of the petitioner. These, damages are liable to be paid by respondent Nos. 1 and 2 to the petitioner.
50) At the same time, respondent No. 3 cannot seek to take advantage of its higher financial bid, when the petitioner’s financial bid of Rs.9,26,32,668.46 should have been accepted. We, therefore, direct that the respondent authorities shall be liable to pay to respondent No. 3, for the contracted work, an amount of Rs.9,26,32,668.46, and no more. The petitioner shall also be entitled to costs quantified to Rs.25,000/- to be paid by respondent Nos. 1 and 2.
51) The writ petition stands disposed of in the aforesaid terms.