M/s Shaligram Singh vs Central Coalfields Limited And Ors

This writ petition is under Article 226 of the Constitution of India, whereby and whereunder the order dated 15.03.2017 (Annexure-4) as also the order dated 24.07.2017 under Annexure-7, are under challenge.

The petitioner's grievance is that he has participated in the bid in pursuance to e-tender notice vide NIT No.39 of 2016-17 dated 08.11.2016 which has been floated for repairing of Miners Quarters, 'B' Type Quarters and 'A' Type Quarters for Ara Colliery of Kuju Area under Kayakalp Scheme. The petitioner has participated and declared to be L1 but subsequently he has technically been disqualified on the ground of having no work experience as required under Condition No.6(A) (a) and in consequence the L3 has been found to be successful bidder and accordingly work order has been issued in his favour.

The petitioner's grievance is that he has submitted the required document showing the work experience as required under 6(A) (a) of the terms and conditions as contained in the notice inviting tender but the same has not been taken into consideration and hence the decision taken by the tender committee suffers from gross infirmity.

He further submits that the earnest money deposit has been forfeited, this aspect of the matter has been dealt with by the regional authority as under Annexure-4, against which an appeal has been filed before the Chairman cum Managing Director but he also has rejected the claim by not considering the entire aspect of the matter is not in right perspective, therefore, this writ petition.

Counter affidavit has been filed by the Central Coalfields Ltd. wherein inter alia stand has been taken that the tender has been floated on-line and accepted on-line and details of the documents were to be assessed by the tender committee at the time of scrutiny of the document. The petitioner has been found who has no eligibility criteria as required under Condition No.6(A) (a) of the notice inviting tender, therefore, his candidature has been rejected being not technically qualified and the work order has been extended in favour of other successful bidder.

So far as forfeiture of the earnest money deposit (EMD) is concerned, the same is also within the jurisdiction since specific condition is there in the notice inviting tender under Condition No.15(e) which stipulates that in case L1 bidder fails to submit requisite documents on line as per the condition of the notice inviting tender, EMD of L1 will be forfeited and, therefore, the respondents authorities has acted in terms of the said condition hence the petitioner is not entitled for refund of the earnest money deposit.

Having heard learned counsel for the parties and on appreciation of the rival submissions, the factual aspect which is not in dispute is that one e-tender notice was floated being NIT No.39 of 2016-17 dated 08.11.2016 inviting applications on-line for the purpose of repairing of Miners Quarters, 'B' Type Quarters and 'A' Type Quarters for Ara Colliery of Kuju Area under the Kayakalp Scheme. The said notice contains at the top with "Digitally signed and encrypted e-Tenders are invited under Two Part system on the website from the reputed and experienced contractor for the work in question.

Under the heading "Note" the bid documents will be available on the website and can be downloaded by the bidder up to the bid submission end date.

Under Condition No.3 the bidders are to deposit EMD through online mode only. Under Clause 3.2 the qualification will also be subject to the receipt and acceptance of EMD within the scheduled time and date as mentioned in NIT. In Condition No. 4 there is condition of pre-bid meeting to be held in the meeting of tender on the scheduled date and time. The purpose of the pre-bid meeting will be to clarify issues. Under Condition No.6 which contains the eligibility criteria, one of which is work experience, which reads as under:

"6.A Eligibility Criteria:-

a. Work Experience:

The intending bidder must have in its name or proportionate share as a member of Joint Venture experience of having successfully completed similar works, as a prime contractor, during last 7(seven) years ending last day of month previous to the one in which bid applications are invited (i.e. eligibility period) should be any of the following:

Three similar complete works each costing not less than the amount equal to 40% of the estimated cost put to tender.

Or

Two similar completed works each costing not less than the amount equal to 50% of the estimated cost put to tender.

Or

One similar completed work costing not less than the amount equal to 80% of the estimated cost put to tender."

Under the head "Technical Evaluation by the System," the following conditions/process has been stipulated:

"(i) The system shall calculate the period of 7 years backwards starting from the last day of month previous to the e-publication date of NIT.

(ii) The system shall check the end date of each experience (The system shall not allow more than 3 entries for experience) and accept it as a qualifying experience if the end date of experience falls within the 7 years computed by the system.

(iii) The system shall calculate the value of each qualifying experience by multiplying the value with the % share of experience and adding 5% for each completed year (total No. of days/365) after the end date of experience of work till the last date of month previous to one in which the NIT has been published on e-procurement portal.

(iv) The system shall check the experience with highest value whether it exceeds 80% of Estimated Cost Value (ECV). In case it does not, it shall check the top 2 experiences whether each of them is greater than 50% of ECV. In case, it still does not, the system shall check all 3 qualifying experiences whether each of them exceeds 40% of ECV. The system shall regard the bidder as 'Eligible' if it meets any of the aforementioned criteria or else it shall consider the bidder as 'Ineligible'.

(v) The weightage of 5% every year will be on simple rate and will not be compounded on yearly basis for the calculating the value of each qualifying experience.

(vi) The work experience of the bidder for those works only shall be considered for evaluation purpose, which is completed before the last date of month previous to the one in which the NIT has been published on e-Procurement Portal, shall not be considered against eligibility.

(vii) In case the work is started prior to the eligibility period of 7 (seven) years (counted backwards starting from the last date of the month previous to e-publication date of NIT and completed within the said eligibility period of 7 years, then the full value of the work shall be considered against the eligibility.

(viii) In case the experience has been earned by the bidder as an individual or proprietor of a proprietorship firm or as a partner of a partnership firm, then 100% value of the experience will be considered against eligibility. But if the experience has been earned by the bidder as a partner in a Joint Venture Firm, then the proportionate value of experience in proportion to the actual share of bidder in that Joint Venture Firm will be considered against eligibility."

After completion of the formalities, the process of opening of tender has been opened under Condition No.13, wherein it has been provided that in case of tenders, after opening of the bids, comparative statement showing the bidders will be generated.

In such case after opening of bids, the system will display the lowest rate quoted by bidder (L-1). The auction (reverse) will be created for the tender after opening of the bid and thereafter the provision for reverse auction is stipulated under Condition No.14 with the said NIT. Under Condition No.15 the stipulation has been made for evaluation of tender/auction which comes under Condition No.15E, which reads as under:

"15(E) In case the L-1 bidder fails to submit requisite documents online as per NIT or if any of the information/declarations furnished by the L-1 bidder is found to be wrong by the Tender Committee during evaluation of scanned documents uploaded by the bidder, which changes the eligibility status of the bidder, then the bid shall be rejected and EMD of L-1 will be forfeited."

Under Condition No.17 the stipulation has been made for refund of EMD, the same can be refunded except the cases where EMD is to be forfeited.

In the light of these conditions stipulated in the notice inviting tender the petitioner has been assessed as L1 but at the time of evaluation of the tender the petitioner has been found to have no work experience as required under Condition No.6(A) (a) of the notice inviting tender, wherein the requirement is having work experience of completion of similar works as a prime contractor during last seven years.

It is admitted case of the petitioner that having no experience with respect to similar works but since he has got experience in successful completion of the work pertaining to roads and, therefore, even though he was L1 but the tender committee has taken decision not to give him status of successful bidder and in consequence thereof the L3 has been successful bidder and accordingly work order has been issued.

The question herein arise, the petitioner has filed this writ petition for two fold reliefs:

(i) The decision taken by the tender committee suffers from infirmity.

(ii) The petitioner is entitled for the refund of EMD.

(i) So far as legality and propriety of the decision of the tender committee is concerned, it is not in dispute that a writ Court sitting under Article 226 of the Constitution of India, in exercise of power of judicial review, cannot interfere with the tender process but only to the extent whether there is error in the decision making process and in the decision taken by the authority as has been held in the case of Tata Cellular vs. Union of India reported in (1994) 6 SCC 651.

Before assessing the fact that as to whether decision making process taken by the tender committee suffers from infirmity or not, it is relevant to deal with the other proposition of law i.e. as to whether the condition stipulated in the notice inviting tender is mandatory to be followed by the bidders or not and if the answer would be negative then certainly in the facts of this case decision taken by the tender committee suffers from infirmity but in case of affirmative answer the decision taken by the tender committee said to be suffer from no infirmity, as has been held by the Hon'ble Apex Court in the case of Air India Ltd. v. Cochin International Airport Ltd. reported in (2000) 2 SCC 617, wherein, it has been laid down that the State can fix its own terms of invitation of tenders and that it is not incumbent to judicial scrutiny and the same is strictly to be adhered to.

In the case of Directorate of Education and Others v. Educomp DataMatics Ltd. and others reported in (2004) 4 SCC 19, it has been held therein that the courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. It was further held that while exercising the power of judicial review of the terms of the tender notice the court cannot order change in them.

In the case of Kanhaiya Lal Agrawal-Vs.-Union of India and Others reported in (2002) 6 SCC 315, it has been held therein at paragraph 6 by taking note of the judgment rendered by the Hon'ble Apex Court in the case of G.J. Fernandez-Vs.-State of Karnataka and Ors. reported in (1990) 2 SCC 488 that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to the consequence of non-compliance thereto. If non-fulfillment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only a collateral term.

"6. It is settled law that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to the consequence of non-compliance thereto. If non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only a collateral term. This legal position has been well explained in G.J. Fernandez v. State of Karnataka."

The condition stipulated in the notice inviting tender will be mandatorily followed and whether it is mandatory or not it is to be tested from the said condition, certainly if the condition is not mandatory then on the ground of non fulfilment of condition the tender of the bidder cannot be rejected but vice versa the condition of the tender stipulated is to be strictly followed.

This Court after appreciating the condition of the said condition wherefrom it transpires from the word that the intending bidders must have in its name or its share as a member of Joint Venture experience of having successfully completed similar works as a prime contractor, during last seven years.

The word must have is mandatory in nature if one of the or other bidders who have participated in the bid and further from the top of the notice inviting tender the stipulation made in the application are invited from the reputed and experienced member, which also denote the same thing, therefore, the said condition having mandatory in nature was supposed to be complied with by the petitioner but admittedly the said condition has not been complied with and hence his candidature has been rejected.

In view of such factual aspect as narrated hereinabove, this Court is of the view that there is no error in the decision making process taken by the tender committee and since there is no error in the decision making process the decision is based upon the said decision process and also do not suffer from infirmity.

(ii) So far as refund of EMD is concerned, there is no dispute about the legal position that if a participant is participating in any tender, each and every condition binds him and he cannot at subsequent stage turn around and say that particular condition is not binding upon him.

The condition stipulated under 15(e) provides that condition if in case L1 fails to submit requisite document online to NIT or if any of the information/declarations furnished by the L-1 bidder is found to be wrong by the Tender Committee during evaluation of scanned documents uploaded by the bidder, which changes the eligibility status of the bidder, then the bid shall be rejected and EMD of L-1 will be forfeited.

It is evident therefrom that the EMD of L1 can be forfeited in either of two eventualities i.e. in case L1 fails to submit online document and if any information process is not correct.

Here in the instant case the second eventuality is not correct rather first eventuality which furnish non submission of requisite document as demanded by the NIT since though in Condition No.6 (A) (a) that the experience certificate pertaining to completion of similar works as prime contractor for last seven years but he has furnished in this aspect experience of working road repairing, therefore, the application will be said to be incomplete and contrary to the terms of the NIT as has been transpired from the impugned order the reference of the condition stipulated under Clause 15

(e) and if the stipulation made therein is not complied with basis upon which there was rejection of the candidature of the petitioner which cannot be said to be contrary to the terms and conditions of the NIT and if any decision taken by the authority is in terms of condition stipulated by the NIT, the same cannot suffer from irregularity.

In the light of the aforesaid facts as discussed hereinabove and taking into consideration the jurisdiction of this Court for issuance of writ of certiorari in exercise of power of judicial review, is of the view that the order impugned does not suffer from infirmity for the reason aforesaid warranting any interference by this Court under Article 226 of the Constitution of India.

Accordingly, writ petition fails and is dismissed.