P.L. Sharma vs State Of Himachal Pradesh And Others

Jyotsna Rewal Dua, J

Out of two participating bidders, technical bid of the petitioner was turned down as non-responsive and that of private respondent No.5 was held to

be conforming to the Standard Bid Document. Financial bid of respondent No.5 was opened on 19.03.2020. Feeling aggrieved, petitioner has moved

the instant writ petition.

Respondent No.3 through an e-Procurement notice dated 17.01.2020, invited tenders for “Up -gradation of Dhelu to Bhatehar road Km. 0/0 to

13/400 (L - 029) under Regular PMGSY II for the year 2019- 20 (Package No.HP-08-428) (Sub Head:- ROFD, C/o retaining walls, breast walls,

Crate walls, construction of missing cross drainage work, Providing and laying GSB, metalling and tarring, Cement concrete pavement road side drain,

road side parapets, W-Metal Beam crash barriers, PMGSY information board, sign boards kilometre stones, 200 mtr. RD stones etc. including five

year routine maintenance)â€. Online bids could be submitted by 26.02.2020. The project was sanctioned by the Ministry of Rural Development,

Government of India, under the Pradhan Mantri Gram Sadak Yojna (‘PMGSY’ in short), Rural Road Project-II and is financed by the World

Bank.

Petitioner and respondent No.5 participated and submitted their bids, which were opened on 26.02.2020.

The technical evaluation of the bids was carried out by the Technical Committee on 04.03.2020. Technical bid submitted by the petitioner was found

to be not conforming to Clause 4.4 A(b) of ‘Instructions To Bidders’ (in short ‘ITB’) as contained in Standard Bid Document (in short

‘SBD’) and thus was rejected as non-responsive. Technical bid of respondent No.5 was found to be responsive. His financial bid was also

opened on 19.03.2020. Further procedure was not completed in view of the status quo order passed on 20.03.2020 in the instant writ petition.

The arguments raised by learned Senior Counsel for the petitioner can be broadly considered under following main points:-

3(i). With respect to petitioner’s eligibility: Petitioner’s bid was compliant of provisions of SBD and ITB and thus could not be rejected by

terming it as non-responsive.

3(ii). With respect to eligibility of respondent No.5: Bid submitted by respondent No.5 could not be accepted and ought to have been declared as non-

responsive.

3(iii). Procedure to be followed in case of single bid: Without prejudice to above two arguments, after declaration of petitioner’s bid as non-

responsive, the financial bid of respondent No.5 could not be opened contrary to the guidelines owing to respondent No.5 being single bidder.

Therefore, respondents should have invited fresh tenders.

4(i). We have heard Mr. Ajay Sharma, learned Senior Counsel for the petitioner, Mr. Ashok Sharma, learned Advocate General and Mr. Neeraj

Maniktala, learned counsel for respondent No.5 on the factual and legal aspects of the above points.

4(ii). Eligibility of the petitioner:-

4(ii)(a). Clause 4.4A of ITB as contained in SBD, around which the submissions of the parties revolve under this head, is extracted hereinafter:-

“4.4 A To qualify for award of the Contract, each bidder should have in the last five years (5 years immediate preceding the year, in

which the bids are invited, year means financial year);

(a) Achieved in any one year a minimum financial turnover as mentioned in the Bid Data Sheet (as certified by Chartered Accountant, and

at least 50% of which is from Civil Engineering construction works). The estimated cost of the work would not include maintenance cost for

5 years and the turnover will be indexed at the rate of 8% per year.

(b) satisfactorily completed, as prime contractor or sub contractor, at least one similar work equal in value half of the estimated cost of

work (excluding maintenance cost for five years) for which the bid is invited.â€​

To become eligible for award of contract in terms of Clause 4.4A(a), a bidder must have achieved in any one year of immediately preceding last five

years a minimum financial turnover as mentioned in the Bid Data Sheet. The financial turnover must have been certified by the Chartered Accountant

and at least 50% of the same must have accrued from Civil Engineering construction works. The estimated cost of the work was not to include

maintenance cost for five years. The turnover was to be indexed at the rate of 8% per year. The minimum financial turnover under Clause 4.4A(a) as

enumerated in Bid Data Sheet was Rs.1141.83 lakhs. It is not in dispute that petitioner’s bid was compliant of this provision as financial turnover

of the petitioner after indexing it at the rate of 8% per year was above than the minimum financial turnover of Rs.1141.83 lakhs laid out in the Bid

Data Sheet.

4(ii)(b). In terms of Clause 4.4A(b), the bidder in immediate preceding last five years should have satisfactorily completed either as prime contractor

or sub-contractor at least one similar work equal in value half of the estimated cost of the work (excluding maintenance cost for five years) for which

the bid was invited. The Bid Data Sheet quantified the required value of satisfactorily completed one similar work at Rs.570.91 lakhs. The completion

certificate of similar work done by the petitioner valued the work at Rs.499.84 lakhs, which is less than the requirement as per SBD ITB clause.

4(ii)(c). From reading of Clause 4.4A of ITB as contained in SBD, it is evident that the said clause is in two parts. First part, i.e. 4.4A(a) pertains to

required minimum financial turnover of Rs.1141.83 lakhs and 4.4A(b) pertains to satisfactory completion of one similar work by the bidder valuing

Rs.570.91 lakhs. The financial turnover and value of similar work is to be determined as per provisions of respective sub-clauses. Petitioner’s bid

complied Clause 4.4A(a) as he had minimum financial turnover as prescribed in the Bid Data Sheet. However, the qualifying work done certificate

appended by him at Annexure P-2 and as detailed by the respondents in their reply, reflects that the gross amount of work completed by him in terms

of Clause 4.4A(b) was valuing Rs.499.84 lakhs as against the required value of Rs.570.91 lakhs. The value of the similar work done by the petitioner

did not meet the requirement of Clause 4.4A(b). It is for this reason that his bid was rejected being non-responsive.

4(ii)(d). Learned Senior Counsel for the petitioner contended that 8% per year indexing applied for calculating financial turnover under Clause 4.4A(a)

should have also been applied for calculating the amount of similar work done under Clause 4.4A(b). Learned Senior Counsel further urged that the

terms ‘work done’ and ‘financial turnover’ cannot be separated from each other. Once 8% per year indexing provision is there for

calculating the financial turnover of the bidder, then the amount of similar work done is also to be arrived at only by applying 8% per year indexing

clause and in case the same is used for arriving at the amount of work done by the petitioner, then the figure of his bid under Clause 4.4A(b) would be

much more than required Rs.570.91 lakhs. In such eventuality, his bid could not be declared as non-responsive.

We are afraid the argument has no legs to stand upon. Clause 4.4A as extracted above is unequivocal with very clear language admitting no

ambiguity. It is only the financial turnover, which in terms of Clause 4.4A(a) is to be indexed at the rate of 8% per year. Value of the similar work

done under Clause 4.4A(b) is not to be arrived at by indexing the same at the rate of 8% per year. There is no such provision in Clause 4.4A(b) of

SBD. The pleadings of petition also reveal that the petitioner was aware of the difference between two sub-clauses of Clause 4.4A and understanding

this difference, he participated in the bidding process. It was only on 04.03.2020, when the bids were being technically evaluated that he submitted his

representation in this regard. His representation was considered on 06.03.2020. Meeting of the Technical Evaluation Committee for looking into and

redressing the grievance represented by the petitioner was held with latter’s representative. He was apprised of the fact that escalation formula

can be used only for calculating the financial turnover and not for arriving at the current price level of the work done in the past. The Technical

Evaluation Committee explained to the representative of the petitioner that he had executed one similar work in the last five years amounting to

Rs.499.84 lakhs as against the required value of Rs.570.91 lakhs. Therefore, having executed the work valuing less than required as per ITB clause of

SBD, his bid was rejected being non-responsive. Petitioner also registered a complaint against determination of non-responsiveness of his bid. This

complaint was considered on 16.03.2020 by a duly constituted committee and objection of petitioner was turned down.

4(ii)(e). While dealing with somewhat similar issue, this Court in CWP No.2734 of 2020, decided on 9th October, 2020, titled Tek Singh Raghav

Versus State of Himachal Pradesh and others, has held that when tender conditions are specific and unambiguous, then it is not lawful to bring

ambiguity into the same by reading certain clause from elsewhere to determine the eligibility of participating bidders when the other clauses were not

incorporated in the tender document. Relevant para of the judgment is extracted hereinafter: -

“5. Observations:-

Admittedly, it is not the case of the petitioner that any condition of 7% indexing was actually incorporated in the NIeT in question. In fact,

the petitioner wants to read this condition in the tender document by falling back upon CPWD Manual (Annexure P-3) and asserts that the

respondents were bound to bodily lift all the conditions contained in the CPWD Manual including the condition of 7% indexing and to

incorporate them in the NIeT in question. The precise argument raised by learned counsel for the petitioner is that irrespective of

incorporation of this condition in the NIeT, the calculation of the cost of previous similar works done by the bidder has to be assessed at

7% enhancement per annum to ascertain their current value.

The fact remains that the NIeT does not contain any such condition of 7% indexing. All the bidders including the petitioner have

participated under the specific terms & conditions of the tender document.

The tender document in question was issued for the second time for the same work. Even when it was issued for the first time, no such

condition of 7% indexing was there. None of the bidders voiced any grievance about non-inclusion of 7% indexing clause in the NIeT.

Similarly, second time also when the NIeT in question was issued, there was no such clause pertaining to 7% enhancement of the cost of the

similar works executed in past. Petitioner as per his admission had never sought any clarification from the respondents with respect to non-

inclusion of 7% enhancement clause in the NIeT.

After participating under the specific terms & conditions of the tender document, it is not permissible for him to challenge the rejection of

his technical bid on the ground that his eligibility was to be determined under a particular clause, which in reality is not part of the tender

document. We are not examining the question as to whether 7% indexing clause of CPWD manual was required to be part of the tender

document or not. The stage to raise that question has gone for the petitioner. Therefore, even assuming that the respondents were bound to

invite tenders as per the CPWD Manual, the fact remains that the tender document was issued in consonance with memorandum dated

10.01.2020 issued by the State Government, which did not provide for calculating cost of similar works carried out in past at 7% indexing

rate. The acceptance of contentions of the petitioner would also mean prejudicing various such contractors, who might be interested to bid

for the work in question, but might not have submitted their bids because of the eligibility criteria expressly provided in Clause 2(ix) of the

NIeT without knowing 7% indexing clause in the CPWD manual.

The petitioner has participated in the bidding process under the specific terms and conditions laid down in Standard Bid Document. The

terms and conditions of bid have not even been challenged by the petitioner. Hon’ble Apex Court in Vidarbha Irrigation Development

Corporation Vs. M/s Anoj Kumar Garwala, 2019 (2) Scale 134, after considering Bakshi Security & Personnel Service Pvt. Ltd. Vs.

Devbishan Computed Pvt. Ltd., 2016 (8) SCC 446 and Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd., 2016 (16) SCC

818, held that essential condition of a tender has to be strictly complied with and that words used in the tender document cannot be ignored

or treated as redundant or superfluous. Relevant para from the judgment is reproduced hereinafter:-

“15. It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant

or superfluous â€" they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender

condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict

compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation

of the terms of the tender conditions, which must be interfered with by a constitutional court.â€​

This Court in CWP No.3583 of 2020, titled M/s Chamunda Construction Company Versus State of Himachal Pradesh and others ,decided

on 28.09.2020, has held as under vide paras 12 to 14:-

“12. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the

Government has been settled by the decisions of the Hon’ble Supreme Court in R.D. Shetty vs. International Airport Authority (1979) 3

SCC 488, Fertilizer Corporation Kamgar Union vs. Union of India (1981) 1 SCC 56,8 Assistant Collector, Central Excise vs. Dunlop India

Ltd. (1985) 1 SCC 260=1984 (2) SCALE 81,9 Tata Cellular vs. Union of India (1994) 6 SCC 651= 1995 (1) Arb. LR 193, Ramniklal

N.Bhutta vs. State of Maharashtra (1997) 1 SCC 134= 1996 (8) SCALE 41 7and Raunaq International Ltd. vs. I.V.R. Construction Ltd.

(1999) 1 SCC 492=1999 (1) Arb. LR 431 (SC).

The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In

arriving at a commercial decision consideration which are of paramount are commercial considerations. The State can choose its own

method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into

negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a

contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the

offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to

adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not

amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides,

unreasonableness and arbitrariness.

The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is

found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should

exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger

public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming

public interest requires interference, the Court should intervene.â€​

In Civil Appeal No.2197 of 2020, titled Bharat Coking Coal Ltd. & Ors. Versus AMR Dev Prabha & Ors., decided on 18th March, 2020, the

Hon’ble Supreme Court, while considering the legal position settled in Raunaq International Ltd. v. IVR Construction Ltd, (1999) 1 SCC

492; Maa Binda Express Carrier v. NorthEast Frontier Railway, (2014) 3 SCC 760 and Shobikaa Impex (P) Ltd. V. Central Medical

Services Society, (2016) 16 SCC 233, observed as under:-

“39. Additionally, we are not impressed with the first respondent’s argument that there is a certain public interest at stake whenever

the public exchequer is involved. There are various factors in play, in addition to mere bidding price, like technical ability and timely

completion which must be kept in mind. And adopting such interpretation would permanently blur the line between contractual disputes

involving the State and those affecting public law. This has aptly been highlighted in Raunaq International Ltd. v. IVR Construction Ltd.

[(1999) 1 SCC 492]

“11. When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the court must

be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely

between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere

difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in

intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be

considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding

the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of

public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival

tenderers.â€​ (emphasis supplied)

Further, the first respondent has failed to demonstrate which public law right it was claiming. The main thrust of AMR Dev Prabha’s

case has been on the fact that at 1:03PM on 05.05.2015 it was declared the lowest bidder (or L1). However, being declared the L1 bidder

does not bestow upon any entity a public law entitlement to award of the contract, as noted in Maa Binda Express Carrier v. North-East

Frontier Railway [(2014) 3 SCC 760]:

“8. The scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by a long line of

decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard

to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice

inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders

participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the

highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the

Government.

All that participating bidders are entitled to is a fair, equal and nondiscriminatory treatment in the matter of evaluation of their tenders. It is

also fairly well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of

consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the

judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. So also, the

authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is

permissible under the terms governing the tender process.â€​ (emphasis supplied)

With regard to other allegations concerning condonation of Respondent No. 6’s delay in producing guarantees, we would only

reiterate that there is no prohibition in law against public authorities granting relaxations for bona fide reasons. In Shobikaa Impex (P) Ltd.

v. Central Medical Services Society [(2016) 16 SCC 233], it has been noted that:

“… the State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender

conditions permit such a relaxation. It has been further held that the State, its corporations, instrumentalities and agencies have the public

duty to be fair to all concerned. Even when some defect is found in the decision-making process, the Court must exercise its discretionary

powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out

of a legal point.â€​

Even if there had been a minor deviation from explicit terms of the NIT, it would not be sufficient by itself in the absence of mala fide for

courts to set aside the tender at the behest of an unsuccessful bidder. This is because notice must be kept of the impact of overturning an

executive decision and its impact on the larger public interest in the form of cost overruns or delays.â€​

When tender conditions are specific and unambiguous, it is not lawful to bring ambiguity into the same by reading certain clauses from a

manual to determine the eligibility of the participating bidders when these clauses were not incorporated in the tender document. Non-

incorporation of conditions of the manual in the NIeT were not questioned by the petitioner. Having participated under the express terms of

the tender document and after failing therein, it is not permissible for the petitioner to contend that his eligibility was required to be

determined as per conditions contained in the manual. We do not find any infirmity in the action of respondents No.1 to 4 in rejecting the

Technical Bid of the petitioner.â€​

For the above reasons, the contention of learned Senior Counsel for the petitioner that 8% per year indexing clause incorporated in projects under

PMGSY-I should be construed to have been automatically incorporated in the tender in question, which is part of PMGSY-II, cannot be

countenanced. The tendered project is not under PMGSY-I works, but is part of PMGSY-II. The tender conditions of PMGSY Part-II for the work in

question are specific, admitting of no ambiguity. Financial turnover under Clause 4.4A(a) and work done under Clause 4.4A(b) have been differently

treated under the main clause 4.4A of SBD ITB. Indexing of amount by 8% per year available under Clause 4.4A(a) to arrive at financial turnover of

bidder is not available for determining the value of similar work done by the bidder. Having participated in the bidding process with clear understanding

of the terms, the provisions, their implications and after remaining unsuccessful therein, the petitioner cannot be heard to complain about alleged

deletion of some words in the SBD and also cannot be allowed to read some words in the tender clauses, which are not there at all. This illegal and

unlawful approach will also cause prejudice even to those who did not submit bids in view of plain conditions of SBD. Accordingly, the first contention

raised by learned Senior Counsel for the petitioner has no force and is rejected.

4(iii). Eligibility of Respondent No.5:-

4(iii)(a). The second limb of argument advanced by learned Senior Counsel for the petitioner harps on the eligibility of respondent No.5. It is

contended that respondent No.5 is ineligible for the tendered project as no ‘similar work’ falling within the ambit of Clause 4.4A(b) of SBD ITB

of the value mentioned in the clause had been executed by him. It is also urged that respondent No.5 had not executed civil construction and bitumen

works in the apposite ratio. Therefore, financial turnover of respondent No.5 considered by the official respondent as compliant of Clause 4.4A(a) in

reality was non-compliant as value of bitumen works could not be considered in arriving at his financial turnover. The contention has been strongly

refuted by learned counsel for the respondents by submitting that certificate dated 10.04.2017 (Annexure P-9), showing execution of similar work

executed by respondent No.5 in the permissible period for an amount of Rs.613.50 lakhs, had been appended. The amount of work done as per the

certificate is above the prescribed limit of Rs.570.91 lakhs and satisfies the criteria laid in Clause 4.4A(b). The petitioner had raised grievance before

the Technical Evaluation Committee that the work carried out by respondent No.5 did not fall within the parameters of ‘similar work’ under

Clause 4.4A(b) of SBD ITB and mostly pertained to bituminous work. The complaint of the petitioner was examined by a committee constituted on

06.04.2019 for scrutiny of complaints/representations at the stage of evaluation of Part-I of bids, viz. technical qualification for the work in question.

The Bill of Quantities (BOQ) submitted by respondent No.5 were examined by the committee. The committee observed following in respect of bid of

the petitioner and disputed nature of work done certificate of respondent No.5:-

“2. Under ITB Clause 4.4A(b):-

Point No.1:- As per this clause to qualify for award of the contract, each bidder should have in the last five years (5 years immediately

preceding the year, in which the bids are invited, year means financial year); (b) satisfactorily completed, as prime contractor or sub-

contractor, at least one similar work equal in value to half 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. In present case last five year period is 2014-15 to

2018-19. Half of the estimated cost of the work under ITB clause 4.4A(b) comes out to be Rs.570.91 lacs, but during Bid Evaluation report

for works- Part I, the amount mentioned against Sh. P.L. Sharma under clause 4.4A(b) is Rs.499.94 lacs as per technical evaluation

summary which is less than 570.91 lakh. Sh. P.L. Sharma, in his complaint has requested for enhancement on the work done of Rs.499.94

lacs @ 8% per year. But Clause 4.4A stated that the enhancement @ 7% per year is allowed only for turn over purpose. As such objection

raised by Sh. P.L. Sharma is not valid and the Bid is rightly technically evaluated as non-responsive.

Point No.2:- Sh. P.L. Sharma, Head Office Bir, Distt. Kangra (HP) has registered complaint against determination of responsiveness of bid

of Sh. G.P. Acharya, Govt. Contractor by Circle level Technical Evaluation committee under ITB Clause 4.4A(b) and has stated that the bid

of Sh. G.P. Acharya does not satisfy the criteria of similar nature work done.

The matter was referred to Executive Engineer, NH Division, HPPWD, Jogindernagar to verify the work done alongwith bill of quantity and

copy of final bill against the above work done through Executive Engineer, Jogindernagar Division. The report has been submitted by

Executive Engineer, NH, Division to Executive Engineer, Jogindernagar, HPPWD, Jogindernagar vide letter No.13226 dated 16.3.2020

received through e-mail. The committee has scrutinized the work done certificate for the work Periodical Renewal from k.131/0 to 141/0 of

NH-20 (New NH-154) uploaded by the bidder Sh. G.P. Acharya, Govt. Contractor and it has been found by the committee that the items are

similar in nature.â€​

The committee was of the considered opinion that “Bid of complainant/bidder Sh. P.L. Sharma does not satisfy the qualification criteria as per

Clause 4.4.A(b) of SBD & has been declared non-responsive and the bid of Sh. G.P. Acharya declared as responsive by technical evaluation

committee of circle level in fair manner. Hence the representation of the complainant/bidder Sh. P.L. Sharma, Govt. Contractor is rejected and stands

disposed of. The technical-Financial Part II of the bid will be opened on 19.3.2020.†Same reason will hold good in respect of responsiveness of the

bid of respondent No.5 under Clause 4.4A(a) as well.

4(iii)(b). Hon’ble Apex Court in catena of precedents has held that the authority authoring the tender document is the best person to understand

and appreciate its requirement. Therefore, the interpretation of terms of tender document should not be second guessed by a Court in judicial review

proceedings. Due deference has to be given to authority’s interpretation. The authority which floats the contract and has authored tender

document is the best judge as to how the documents have to be interpreted. Even if two interpretations are possible, then also the interpretation as

given by the author must be accepted. Relevant extracts from a recent judgment dated December 18, 2020, passed by the Hon’ble Apex Court in

SLP(Civil) No.12766 of 2020, titled M/S Galaxy Transport Agencies, Contractors, Traders, Transports and Suppliers Versus M/S New J.K.

Roadways, Fleet Owners and Transport Contractors & Ors., are as under:-

“14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand

and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In

Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., 2016 (16) SCC 818, this Court held:

“15. We may add that 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.â€​

(page 825)

(emphasis supplied)

In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha 2020 SCC OnLine SC 33, 5under the heading “Deference to

authority’s interpretationâ€​, this Court stated:

“51. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce

terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of

contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes.

In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of

delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure.

BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd v.

Nagpur Metro Rail Corporation Ltd, (2016) 16 SCC 818 at para 15)

The High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL’s

interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have

been grounds for the High Court to come to a finding that the appellant committed illegality.â€​

(emphasis supplied)

Further, in the recent judgment in Silppi Constructions Contractors v. Union of India, 2019 SCC OnLine SC113,3 this Court held as

follows:

“20. 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.â€​

(emphasis supplied)â€​

Applying the above settled legal principles to the facts of the case and keeping in mind the decision of the Expert Committee constituted by the

respondents, it can be safely concluded that it is not open for this Court to have its own appraisal and to independently interpret the terms of the tender

document by substituting the appraisal and interpretation of the expert committee, more so when such interpretation has not been shown to be

incorrect or unlawful. Hence, there is no merit in the second contention of the petitioner and the same is accordingly rejected.

4(iv). Single Bid Scenario:-

Last contention raised by learned Senior Counsel for the petitioner is that after rejection of petitioner’s bid, respondent No.5 remained the sole

bidder in the foray. His being single bidder, Clause 5.8 of May, 2013 Guidelines for Evaluation of Bids and Award of Contract under Pradhan Mantri

Gram Sadak Yojana (PMGSY), circulated vide letter dated 07.05.2013, gets attracted, which bar awarding the tender to single bidder. Therefore, it is

urged that instead of opening financial bid of single bidder/respondent No.5, the official respondents should have resorted to calling fresh tenders.

Following clause has been pressed into service in support of the above submission:-

“5.8. Single Bids/Tenders: In order to promote full transparency, healthy competition and award of works at the most reasonable price, it

is not desirable to have too many awards of works on Single Bid/Tender basis. Accordingly, in case of receipt of Single Bid/Tender in the

first invitation of Bids, the following process shall be adopted:-

a) Definition of Single Tender: If, consequent to invitation of tenders/bids for any package, only one bid/tender is received or consequent to

technical evaluation if only one bid/tender is found substantially responsive, such bids/tender shall be termed as single tender for the

purposes of the PMGSY.

b) Opening of Single Bids/Tenders: If in the first invitation/ call, single tender/bid is received, the State Rural Roads Development Agency

(SRRDA) or authority inviting the tenders/bids shall not open the bid. In such cases, the bids shall be re-invited. Modifications in the e-

procurement software shall be made by the NIC to delete the bid (while maintaining the meta-data in the database) from the server after the

date of opening of bids and generate appropriate reports in this regard.

c) Second and Subsequent Invitation of Bids/Tenders: Before issuing the second or subsequent invitations of bids, the SRRDAs are free to

re-package the works or revise the estimated cost based on current market rates though no cost escalation would be borne by Government

of India in such cases (In case of repackaging, the invitation of bids would be treated as fresh invitation/call). The State would be able to

accept Single Tender in second or subsequent invitations/calls keeping in view the Guidelines of CVC in this regard and the fact that the

rates are reasonable and full justification is recorded. Such bids shall be accepted with the approval of a Committee headed by CEO of

SRRDA and comprising CE/E-in-C and Financial Controller as members (as per Para 5.7 above).â€​

However, reading of next clause, i.e. 5.9 of the same guidelines, shows that Clause 5.8 is not applicable to the World Bank assisted Projects. Clause

5.9 reads as under:-

“5.9 PMGSY works financed by ADB/World Bank: In case of Asian Development Bank/World Bank Assisted Projects, the relevant

procurement guidelines shall apply and provisions of Para 5.8 above shall not be applicable.â€​

It is not in dispute that present is a World Bank funded project. Therefore, Clause 5.8 is clearly not attracted. The Procurement & Contract

Management Manual for PMGSY RRP-II have also been placed on record as Annexure R-5/B. It has not been pointed out to us that there is any bar

in the relevant procurement guidelines prohibiting acceptance of single bid for PMGSY RRP-II projects, rather Clause 4.7.4 thereof gives an

indication that single bid could also be accepted in the factual situation of the tender process. Clause 4.7.4 reads as under:-

“4.7.4 After taking care of the above factors, if the quoted price of the lowest evaluated responsive bid is considered unreasonably high,

following procedure should be followed while taking a decision for inviting a rebid.

(i) Irrespective of number of bids received for a package, the contract shall be awarded to the lowest evaluated responsive bidder who

meets the eligibility and qualification requirements and the prices are considered reasonable compared to market values. In case the price

of such bidder is substantially higher than the cost estimate duly updated on the basis of current market prices of inputs, then the SRRDA

shall seek clarifications from the bidder and if the explanation of the bidder is found justified, the contract shall be awarded.

(ii) In case the Evaluation Committee is not satisfied with the clarification provided by the bidder, and bid prices are considered

unreasonably high, then the rebidding may be resorted to.

(iii) In case of no bids, reasons for the same should be investigated. In case it is considered that for reasons of no bids, or otherwise for

reasons brought out in (ii) above, rebidding is considered inescapable, the scope of work, specifications etc. should be reviewed and

suitable changes should be considered in the bid package including slicing the contract package so as to ensure competitive bids in

response to re-bidding. No rebidding should be undertaken with the same parameters. Exception could be small packages or just one small

work where slicing may not be practicable.

(iv) The principles enunciated above shall also apply to the bids received in the second round of bidding.â€​

Factual assertion on behalf of the respondents that acting on the same guidelines, the petitioner, even though being a single bidder, was awarded the

work for â€

“Up-gradation of Ahju to Suja Road’, has not been denied by the petitioner. Be that as it may.

The third contention of the petitioner also lacks merit and is accordingly dismissed.

For the foregoing discussion under three different heads, we find no merit in the instant writ petition and the same is accordingly dismissed

alongwith pending miscellaneous application(s), if any.

We have been apprised that in case the tendered work in question, which is of public importance and being funded by the World Bank, is not awarded

by 31.12.2020, then in terms of instructions issued on 10.12.2020 by the Ministry of Rural Development, Government of India, the same will be frozen.

In view of dismissal of the writ petition, the respondents are permitted to proceed ahead to complete the tender proceedings.