M/s Dinesh Kumar Sharma Construction Pvt. Ltd vs HPTDCL & Others

Satyen Vaidya, J

Aggrieved against the rejection of technical bid, the petitioner has assailed the administrative action of respondents No. 1 to 3 by way of the instant petition with following reliefs:-

“a) Quash and set aside decision of rejection of technical bid.

b) Issue an appropriate writ, order or direction to the respondents to consider the bid of the petitioner.

c) Issue an appropriate writ, order or direction quashing the order dated 25.10.2024 whereby respondents No. 4 and 5 were declared as L1 and L2.

d) directing the respondents to decide the objection as per law then only proceed with the further process of allotment of tender.”

In response to “Notice Inviting Tender” (for short NIT), dated 29.7.2024, in respect of remaining work of Shiv Dham (Phase-I) at Kangnidhar, Mandi, for total contract amount of Rs. 29 crores approximately, petitioner and respondents No. 4 and 5 submitted their respective bids.

The technical bid of the petitioner was declared non-responsive for the reasons as under:-

“All the signed documents are in order but signed bid document is not uploaded on website, as was required to be uploaded vide condition No.-11 of the technical bid criteria.”

The petitioner has asserted that he had submitted his bid strictly in terms of the NIT and contract requirements. There was no shortcoming in such submission. As per petitioner, the defect as discovered by respondents No. 1 to 3, even if assumed to exist was curable. Further, the stand taken by respondents No. 1 to 3 is alleged to be hyper-technical.

As regards the existence of technical bids of respondents No. 4 and 5, the petitioner has contended that both were liable to be disqualified, as the off-line bids of both these bidders were submitted by one person that too without any authorisation from either of the bidders. The petitioner suspected formation of cartel by other two bidders and had sent advance notice to the official respondents in this regard.

It is also the case of the petitioner that the process undertaken by the official respondents violates Article 14 of the Constitution for want of fairness in action. It has been pointed out that as per the condition of the NIT, the EMD was required to be deposited by way of demand draft, whereas in the case of respondent No.4, the same was submitted in the form of TDR (Term Deposit Receipt) and was wrongly accepted by the official respondents.

Respondents No. 1 to 3 have filed their reply and have denied all the allegations. It has been submitted that the reference to Clause-11 in the reason for rejection of technical bid of the petitioner was result of a clerical/ typographical mistake. In fact, the reference was to be made to Clause-9 instead of Clause 11 of the technical bid criteria.

On 20.11.2024, this Court had passed the following order:-

“Petitioner has been ousted from participating in the bid only on account of the fact that the bid documents have not been digitally signed by the petitioner at the time of submission of such documents.

The aforesaid allegation is controverted by the learned counsel for the petitioner. In support of her contention, she has invited the attention of this Court to the tender documents (Annexure P-2), which prima facie go to indicate that the tender documents have been duly stamped and digitally signed by the petitioner.

The bid documents submitted by the petitioner online be made available for perusal of this Court on 27.11.2024”.

In compliance to the aforesaid order, the respondents had produced the entire original record pertaining to the tender process in question. We have perused the record and found that all the bid documents submitted by the petitioner on-line were not signed.

Clause-9  of  technical  bid  criteria  reads  as under:-

“All pages and tender document should be signed by a contractor while submitting his bid”

Thus, on facts, the stand of the petitioner that he had submitted his bid strictly in terms of NIT has been found to be incorrect.

In Central Coalfields Ltd. & another vs. SLL-SML (Joint Venture consortium) and others, 2016 (8) SCC 622, the Hon’ble Supreme Court observed that whether all terms of NIT is essential or not is a decision taken by the employer, which should be respected. In case of any deviation, the same should be made applicable to all the participating bidders. The relevant extract from the aforesaid judgment is being reproduced as under:-

“47. The result of this discussion is that the issue of the acceptance or rejection of a bid of 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. As held in Ramana Dayaram Shetty the terms of the NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision making process can certainly be subject to judicial review. The soundness of 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” as held in Jagdish Mandal followed in Michigan Rubber.

Therefore, whether a term of the NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot”.

Thus, the petitioner cannot be heard to say that his understanding of the terms of NIT was correct.

It will also be relevant to notice the following observations of the Hon’ble Supreme Court in the context made in Afcons Infrastructure Lt. vs. Nagpur Metro Rail Corporation Ltd. & another, AIR 2016 SC 4305:-

“We must reiterate the words of caution this Court has stated right from the time when Ramana Dayaram Shetti v. International Airport Authority of India was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous- they must be given meaning and their necessary significance. In this context, the use of the word ‘metro’ in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.”

Concededly, the jurisdiction of this Court to interfere with the government contracts is quite narrow and restrictive. Reference can be made to the following extract of the judgment passed by the Hon’ble Supreme in the matter of Silppi Constructions Contractors vs. Union of India & another 2020 (16) SCC 489:-

“19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of 12 2019 (6) SCALE 70 restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clearcut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges’ robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.

The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court’s interference should be minimal.

The authority which floats the contract or 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. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case”.

The petitioner also cannot have any benefit of the fact that EMD deposited by respondent No.4 was in the shape of TDR and not by way of demand draft, as required under the condition of NIT for the reason that had the petitioner qualified technical bid, he could have also sought the similar treatment.

There is nothing on record, which may suggest any motive or malafide on the part of respondents No. 1 to 3 to oust the petitioner from the tender process.

As regards, the submission of off-line bids by one person for respondents No. 4 and 5 the same also will not vitiate the tender process, as the person deputed to submit off-line documents in the office on behalf of other tenderers is not sufficient to infer that such person becomes the bidder or his agent.

In light of above discussions, we find no merit in the petition and the same is accordingly, dismissed. Pending applications, if any, also stand disposed of.