TMI Blog2001 (1) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be directed to be considered along with other bid on the sole ground of being the lowest. We find no force in the submission that as under Clause 14.2 items against which no rate or price is entered by the bidder will not be paid by the employer when executed and shall be deemed covered by the other rates and prices in the bill of quantities, the unit price in items containing errors be ignored and the bid be considered on the basis of total price bid which is the lowest. In our view, there is a basic distinction between a case where against some items no rates or prices are quoted and a case where some rate is quoted. Whereas in the former case the bidder will not be entitled to claim any specific amount for the work done by him in the absence of any rate for that work, because in the aforementioned clause it is clarified that the bidders will not be paid by the employer and that the execution of the work shall be deemed covered by other rates and prices in the bill of quantities but in the latter case the bidder will be entitled to claim for the work executed on the basis of quoted price/rate. We may, however, clarify that the appellant is not obliged to award contract to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to main civil works. For carrying out the work of Lot No.4, the appellant, after complying with the formalities and after satisfying itself of the pre- qualification of the bidders, invited revised tenders (hereinafter referred to as, the tenders). The bids were to be submitted on or before April 27, 1998. Three bidders are now in fray. The first is a consortium of four companies (respondent Nos.1 to 4), the second is M/s. Taisei Corporation (respondent No.10) and the third is M/s. Skanska International (respondent No.11). They submitted their bids along with the summary sheets thereof. On September 8, 1999 the bids were opened in the presence of the representatives of the bidders and they were read out; the bid of respondent Nos.1 to 4 was Rs.647.90 crores, of respondent No.11 was Rs.691.22 crores and of respondent No.10 was 726.50 crores. While the details of the bid were under scrutiny, by letter dated October 25, 1999, respondent Nos.1 to 4 informed the appellant that there was a repetitive systematic computer typographical transmission failure and requested that it be corrected. On December 17, 1999 they sent another letter stating that they had reason to believe that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to permit respondent Nos.1 to 4 to correct the errors in the bid documents and then consider their bid along with the other bids and take a decision objectively and rationally. Mr. Altaf Ahmed, the learned Additional Solicitor General, appearing for the appellant, has submitted that the appellant is bound by the ITB and it acted accordingly. The letter dated October 25, 1999 of respondent Nos.1 to 4 did not indicate the errors in the bid documents and the correction sought by them. Even their letter of December 17, 1999 did not specify in any detail the desired corrections, therefore, the appellant proceeded to evaluate the bid in terms of ITB. The actual scope of correction sought by respondent Nos.1 to 4 came to light in their representation dated December 23, 1999, filed after approaching the High Court. The appellant, submitted the learned Additional Solicitor General, committed no wrong in rejecting the representation as the same was not acceptable in terms of Clause 29 of the ITB because neither the unit rate can be changed nor the price bid can be altered at the request of the bidder; the unit rate quoted is final and the appellant can correct only arithmetic mistakes in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended unit rate to reach an astonishing figure which was wholly disproportionate to the cost of the Project. His contention is that once the total bid price is maintained, the unit rate is a matter of arithmetic exercise which should have been corrected by the appellant; further the mode of payment by the appellant for the work done is not on the basis of each unit but on the basis of bid price. Accepting that the bid price is unalterable, the unit rate should be regarded as adjustable. It was also argued by Mr. Chidambaram that there was no mistake in giving the unit rate as such; the mistake was in giving the conversion equivalent in US Dollars and, therefore, the correction not being the one falling under Clause 29 of the ITB was rightly permitted to be corrected by the High Court. Finally, he contended that their bid being less than the bids of respondent Nos.11 and 10 by Rs.40 crores and Rs.80 crores respectively, the High Court rightly directed consideration of the bid of respondent Nos.1 to 4 after due correction of the bid documents in public interest which did not warrant interference by this Court. In the light of the above contentions, we have to examine as to what is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted except as required to confirm the correction of arithmetic errors discovered by the Employers authorised representative in the evaluation of the bids in accordance with Clause 29 of ITB. 29. Correction of Errors 29.1 Bids determined to be substantially responsive will be checked by the Employers authorised representative for any arithmetic errors. Errors will be corrected by the Employers authorised representative as follows: (a) where there is a discrepancy between the amounts in figures and in words, the amount in words will govern; and (b) where there is a discrepancy between the unit rate and the line item total resulting from multiplying the unit rate by the quantity, the unit rate as quoted will govern. (c) Where there is a discrepancy between figures and in words of an unit rate, the unit rate as quoted in words will govern. 29.2 The amount stated in the Form of Bid will be adjusted by the Employers authorised representative in accordance with the above procedure for the correction of errors and shall be communicated to the Bidder in writing for his acceptance in writing within seven (7) days from the date of issue of such communication. Such corrections howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security is liable to be forfeited in accordance with sub- clause 17.6 (b) of the ITB. Now adverting to the Annexures, the statement of B.Upper Dam price bid submitted by respondents 1 to 4 discloses that with reference to each work item the quantity thereof is mentioned. The bidder is expected to give the unit price in Indian Rupee as well as in U.S. Dollar both in figures as well as in words and enter the line item total resulting from multiplying the unit rate by the quantity. A plain reading of sub-clause (b) of Clause 29.1, referred to above, leaves no room for doubt that once the unit rate and line item total are filled in by the bidder, both the quoted unit rate and item total are treated as unalterable at the instance of the bidder though arithmetic errors in arriving at line item total by multiplication are permitted to be corrected by the appellants authorised representative. This being the intendment of the ITB, we shall now examine : (i) whether the correction made by the appellant in the bid documents of respondent Nos.1 to 4 and consequential evaluation of their bid communicated with letter dated December 18, 1999 are valid in law; and (ii) whether respondents 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the bid documents. We shall extract here, as a sample of errors in 37 items, the price bid submitted by respondent Nos.1 to 4 relating to B. Upper Dam found on page No.70 of Vol.IV of the documents (marked A). It reads thus: Annexure B. Upper Dam A Price Bid as Submitted Item Work Item Esc. Coeff. Remarks Unit Quantity Unit Price Amount Clause In Specifica- tions INR US$ Figure Words 1.Care of river 02 Rock Excavation 3,384.64 Cum 1000 148.08 148.08 148,077.97 7.4 One hundred forty-eight point nil eight One hundred forty-eight point nil eight 03 Impervious Core Embankment 7,506.71 Cum 148.08 1.92 328,418.53 9.5 One hundred forty-eight point nil eight One point ninety-two According to respondents 1 to 4, the above price bid should be corrected to read as given in the following statement (marked B): Work Item Esc. Coeff. Remarks Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are repeated. There the correction sought is that the figure column should read as 84.21 both in figure and words. It is stated that in the second line the unit rate 1.92 both in figures and words, represents U.S. Dollar equivalent of 84.21 Indian Rupee which is now sought to be inserted. The errors in other 36 items are said to be similar. Had the errors been confined to these aspects, it would not have resulted in material change in the unit rate because the unit rate in one of the permissible currencies is correctly given and there will be no discrepancy as envisaged in sub-clause (b) of Clause 29.1. It would not really be a case of incorporating a new unit rate but a case of either recording U.S. Dollar equivalent of the unit rate already noted in Indian Rupee or vice versa as given in statement B above. In such a case, perhaps, they would have been entitled to equitable relief of rectification of mistake. But here, as would be shown presently, the position is different. With regards to the mistakes in the bid documents, for the first time respondent Nos.1 to 4 informed the appellant in their letter of October 25, 1999 which runs as follows : Re : Purulia Pumped Storage P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... US$ terms as well as INR terms. II. Further the BOQ quantities stated in the quantity column of serial item no.3 on each and every page has been erased. Enclosed is an attachment which would show the applicable unit rates (in the lower half) and the unit rates which were overwritten due to computer failure (in the upper half). It is an admitted position that at the time of opening of the tender on 8th September 1999, our bid was the lowest at Rs.647.90 crores. The bid of Skanska was Rs.691.22 crores and that of Taisei was Rs.726.50. We confirm that we have all along maintained and still maintain the said bid price of Rs.647.90 crores. However, we have reasons to believe that you have chosen to ignore our said letter and have proceeded to evaluate our price bid by an illogical and mis-application of the rules for the evaluation of the bids set down in the ITB. We, therefore, once again call upon you to evaluate our bid after taking into consideration the applicable unit rates. As already mentioned in our earlier fax there is no change in the price or substance of our bid as mentioned in the amount column of the BOQ. (Emphasis supplied) Here, though the nature of mistakes are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oting the unit rate 50 per cent in Indian Rupee and 50 per cent in U.S. Dollar is not provided in the ITB. Nothing is brought to our notice to justify splitting of unit rate in that ratio. There is no indication of this fact in the price bid documents submitted by the said respondents to explain that the unit rate has been so quoted. This is also not in conformity with Clause 15 of ITB which, as noted above, requires a bidder to quote unit rates and prices in Indian Rupee and either in U.S.Dollar or Japanese Yen. The learned Additional Solicitor General, in our view, is right in his submission that till the representation was made by the said respondents on December 23, 1999, after the interim direction of the High Court, the appellant was unaware of the quoted unit rate being in such proportion. A combined reading of ITB and the annexure, extracted above, makes it clear that the second line against each work item is meant for writing U.S. Dollar or Japanese Yen equivalent of the unit rate and line total in the amount column entered in the first line and not for writing bifurcated unit price in different currencies in the ratio of 50 : 50. On these facts, the errors cannot be terme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the Rules, it has to be done strictly in compliance with the Rules. We have, therefore, no hesitation in concluding that adherence to ITB or Rules is the best principle to be followed, which is also in the best public interest. For all these reason, in such a highly competitive bid of global tender, the appellant was justified in not permitting respondent Nos. 1 to 4 to correct the errors of the nature and the magnitude which, if permitted, will give a different complexion to the bid. The High Court erred in directing the appellant to permit respondent Nos.1 to 4 to correct the errors in the bid documents. Mr. Chidambram, however, submitted that in equity respondent Nos.1 to 4 would be entitled to relief of correction of mistakes. He invited our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a negligent omission arising from an inadequate calculation of the cost of the work and held that the mistake was not sufficient to preclude a claim for relief if the mistake justified it. The Supreme Court relied on the following observation in an earlier judgment of that Court in Hearne Vs. Marine Ins. Co. 22 L ed. 305, A mistake on one side may be a ground for rescinding, but not for reforming, a contract. Where the minds of the parties have not met there is no contract, and hence none to be rectified. And it was concluded that the last two propositions might be claimed to be pertinent to that case even though the transactions between the parties be considered as a completed contract and held that the action of the City of Rochester in awarding one contract to another bidder and forcing the plaintiff to enter into the second contract after it had declared there was a mistake in its proposal was inequitable. Exceptions to the above general principle of seeking relief in equity on the ground of mistake, as can be culled out from the same para, are : (1) where the mistake might have been avoided by the exercise of ordinary care and diligence on the part of the bidder; but where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price and the extended total, the unit price shall prevail. The Borough reserved the right to waive any informality if deemed in the best interests of the owner. On the evening when the bids were opened, Spina discovered that its secretary had erroneously indicated the unit price for one of the items as 400 dollars per square yard though it should have been 4 dollars per square yard as reflected in the total bid for that work. Spina faxed the Borough indicating that the intended unit price was 4 dollars per square yard. On the basis of 400 dollars per square yard Spinas bid was calculated which obviously worked out far higher than the intended bid amount. Taking note of that amount the Borough awarded the contract to Tomaro. Spina instituted action claiming that the Borough arbitrarily failed to recognise that its bid was lower than that of Tomaro. The Law Division held that the error in the bid was non-material and subject to waiver. The Superior Court while agreeing with the Law Division observed that they did not hold that generally an error in the statement of a price could be treated as immaterial and it was only when as in that case the error was patent and the true intent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos.1 to 4 is the lowest of bids offered. As the bid documents of respondent Nos.1 to 4 stands without correction there will be inherent inconsistency between the particulars given in the annexure and the total bid amount, it cannot be directed to be considered along with other bid on the sole ground of being the lowest. We find no force in the submission that as under Clause 14.2 items against which no rate or price is entered by the bidder will not be paid by the employer when executed and shall be deemed covered by the other rates and prices in the bill of quantities, the unit price in items containing errors be ignored and the bid be considered on the basis of total price bid which is the lowest. In our view, there is a basic distinction between a case where against some items no rates or prices are quoted and a case where some rate is quoted. Whereas in the former case the bidder will not be entitled to claim any specific amount for the work done by him in the absence of any rate for that work, because in the aforementioned clause it is clarified that the bidders will not be paid by the employer and that the execution of the work shall be deemed covered by other rates and pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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