TMI Blog2013 (3) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... e and re-evaluate the Technical bid submitted by the respondent no.3 It is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Once such a power is exercised, one of the questions which would arise for consideration by the courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain themselves in exercise of their discretionary jurisdiction. In the present case the exercise of power by the respondent in awarding the contract to the respondent No.3 is not mala fide and unreasonable. It is equally true that even in contractual matters, a public authority does not have an unfettered right to ignore the norms recognized by the Courts, but at the same time, if a decision has been taken by a public authority in a bona fide manner by following the procedure prescribed, although not strictly following the norms laid, such decision is upheld on the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered for opening of Commercial Bid, for evaluation and the decision by the Technical Committee constituted by the respondent, whose decision shall be final. 5. The relevant provisions of the notice inviting tender (NIT) essential for decision of this case are as under: The Technical Bid consists of (i) Technical and Commercial Officer (but not any price), (ii) Service he is quoting for, (iii) All documents in respect of the tenders, (iv) Earnest Money Deposit(EMD) for an amount of Rs.90,000/-(rupees ninety thousand) in the shape of DEPOSIT AT CALL drawn on any nationalized bank in favour of the Chief Electoral Officer, Tripura, should be accompanied with the Technical Bid. EMD other than the shape of Deposit at Call will not be considered, (v) PAN, Professional tax, Service Tax Registration, Work Contract Registration and Employees State Insurance (ESI) Registration Certificates. (vi) Income Tax Returns for the Financial Year 2009-2010 and 2010-2011 and for current year, is possible, (vii) Copy of the valid Trade License, (viii) Employees Provident Fund Registration Etc. (ix) Financial details of the firm/agency, (x) Audited Balance Sheet of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that the tenderer, respondent No.3, had any relationship and/or nexus with the said Unit Trust of India Investor Services Limited and the UTI Technology Services Limited and further that nothing is discernable from the records to show any relationship of respondent No.3 vis- -vis Unit Trust of India Investor Services Limited and the UTI Technology Services Limited. No document whatsoever, was submitted to establish, any such relationship of respondent No.3 with the name of the firms. 9. Learned counsel for the petitioner pointed out that the respondent no.3, in response to the NIT, submitted along with the Technical Bid, one A/C Payee Demand draft, for an amount of Rs.90,000/-, drawn on State Bank of Mysore, SBM Belapur Branch, while Clause 3(iv) of General Terms and conditions specifically states that EMD other than the shape of Deposit at Call will not be considered. 10. It has been stated by the petitioner that the tender clauses required the submission of receipt of Challan of Cash, in respect of Professional Tax, for the period from 01.05.2011 to 31.05.2011; but nothing has been submitted by the respondent No.3 testifying the validity of any professional tax, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rience certificate is not applicable(NA). In the profile, the respondent No.3 claimed to be an ISO-27001, for Information Security Management, ISO- 20000 for IT Service Management and ISO-9001, for Software development and Maintenance, but no copies in proof thereof has been submitted with the tender papers. 12. Learned counsel for the petitioner submitted that earnest Money Deposit (EMD), for an amount of Rs.90,000/- only in the shape of DEPOSIT AT CALL drawn on Nationalized Bank in favour of the Chief Electoral Officer, Tripura is to be accompanied with the Technical Bid and a specific mention has been made EMD other than the shape of DEPOSIT AT CALL will not be considered. The respondent No.3 submitted one Account Payee Demand Draft bearing No.762510 dated 12.07.2011 for an amount of Rs.90,000/- drawn on State Bank of Mysore, SBM Belapur Branch. 13. Learned counsel for the petitioner submitted that when a particular mention as to the manner and mode of submission of EMD having been laid in the NIT, the respondent No.3 could not have deposited the EMD in any other manner other than the mode and manner prescribed; nor did the respondent Nos.1 and 2 have any power to acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact. In the NIT it was clearly mentioned in point No.13 of the terms and conditions that the technical bids of the tenderers would be opened first. The technical committee of the State Government constituted with the technical experts such as Technical Director of National Informatics Centre and Addl. Director of IT Department evaluated the technical bids of the tenderers. The technically qualified bids only would be considered for opening of commercial bids for evaluation. The decision of the technical committee of the department constituted for the purpose after evaluation of technical bids shall be final. Respondent No.1 reserved the absolute right to reject any or all the tenders wholly or partly without assigning any reason thereof and shall not be bound to accept the lowest tender also. Respondent No.1 has also reserved the absolute right to accept or reject any or all tenders without assigning any reason whatsoever or to re-invite the tenders. So the action taken by respondent Nos.1 and 2 is within the periphery of the tender notice. 19. Learned counsel for the respondent Nos.1 and 2 submitted that NIT was floated for providing facilities management services(technical sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to unavoidable circumstances, the meeting had to be deferred on 29.07.2011 at 4:30 PM by issuing another letter. It has been contended on behalf of the respondents-State Government that the petitioner knew about the recommendation of the Technical Bid of the petitioner as well as respondent No.3, however, did not raise any objection for recommending respondent No.3 by the Technical Bid Committee for opening of the commercial bid. On 29.07.2011, when the Commercial Bids were opened in presence of the petitioner as well as respondent No.3, after opening of the Commercial Bid, it came to the light that the rate quoted by UTI Infrastructure Technology Services Limited, Belapur, Navi Mumbai, respondent No.3, was lower than the rate of the petitioner. The rates quoted by two tenderers were as follows: Name of the Firm Rate (1) UTI Infrastructure Technology Services Limited, Belapur, Navi Mumbai : Rs.4,62,000/- (service tax extra) (2) Ujjayanta Technologies Pvt. Ltd., Agartala, West Tripura : Rs.5,04,000/- (service tax extra) 22. It has been stated on behalf of the respondents that only after having no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Government. But the petitioner did not allege any prejudice or malafide against the Deputy Secretary, Finance Department, in the Technical Bids Committee meeting. Fact remains that the majority of the members present in the committee approved the technical bids of the petitioner as well as respondent No.3 and found them technically suitable for consideration and the Committee recommended to open their commercial bids and to take next course of action by the Department. Therefore, sitting by one of the non-members in the Committee did not dilute the decision of the Committee, the objection raised by the petitioner is not a valid objection since the Technical Bids Committee did not cause prejudice to the petitioner. 25. On scrutiny of the tenders, the following remarks were recorded in the comparative chart by the technical committee in respect of the petitioner and the respondent no3: Ujjyannta Technologies Pvt. Ltd. The agency has submitted a copy of cash receipt issued by Agartala Municipal Corporation in respect of renewal of Professional Tax Registration for the year 2011-2012. Other documents/papers appeared to be in order. UTI Infrastructure Technology Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra modern data center at Navi Mumbai and the company has been assisting the Govt. of India in implementing information and communication technology programme. 28. In terms of the Tender Notice, the essential condition of eligibility was capability to provide technical guidance for computerization of Electoral Rolls(TERMS)/Photo Electoral Rolls, Preparation of Electors Photo Identity Cards(EPICs) and other IT related works as per the directions and guidelines of the Election Commission of India from time to time, including maintenance and updation of application software relating to computerization of Electoral Rolls/Photo Electoral Rolls and preparation and issue of Electors Photo Identity Cards(EPICs) to the electors, giving upto date version of EPIC data base as well as training and supervising the EPIC Vendor/Officials for preparation and issue of EPIC to the electors. The selected tenderers should ensure that all the deliverables (all EPIC databases, images, etc.) has to be received by the CEO s office from EPIC Vendor. Standardization of Electoral Data, providing of one professional engineer at CEO s level at Agartala and adequate manpower for providing Facility Managem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade it clear that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. In Gordhandas Bhanji AIR 1952 SC16, it has been observed that Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the action and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older. 33. In Siemens Public Communication Networks Private Limited v. Union of India, (2008) 16 SCC 215: it was pointed out that as has been rightly contended by the learned Additional Solicitor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above certainty is an important aspect of the rule of law. In Reliance Airport Developers (supra) the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks at different stages. Objectivity was thus provided. 36. Learned counsel for the petitioner relying on the decision of the Hon ble Supreme Court in Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1, submitted that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for any other purpose . Much water has since flown under the bridge, but there has been no corrosive effect on thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated there is that waiver is an agreement to release or not to assert a right. There is no such thing as estoppel by waiver . 39. Learned Advocate General submitted that 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, considerations which are of paramount importance are commercial considerations. 40. In Raunaq International Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492, Hon ble Supreme Court observed that an 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, considerations which are of paramount importance are commercial considerations. These would be: (1) the price at which the other side is willing to do the work; (2) whether the goods or services offered are of the requisite specifications; (3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Ltd. v. I.V.R. Construction Ltd.,(supra), the Apex Court further observed that where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene. 44. Learned Advocate General, relying on the decision of Sarva Shramik Sanghatana (KV), Mumbai v. State of Maharashtra, (2008) 1 SCC 494, submitted that each case depends on its own facts and close similarity is not enough in deciding such cases. The relevant observations of the Apex Court may be gainfully given hereunder: 14. On the subject of precedents Lord Halsbury, L.C., said in Quinn v. Leathem2: (All ER p. 7 G-I) Before discussing Allen v. Flood3 and what was decided therein, there are two observations of a general character which I wish to make; and one is to repeat what I have very often said before that every judgment must be read as applicable to the particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved: (All ER p. 1274d) One must not, of course, construe even a reserved judgment of even Russell, L.J. as if it were an Act of Parliament; And, in British Railways Board v. Herrington10 Lord Morris said: (All ER p. 761c) There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case. 11. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 12. The following words of Lord Denning in the matter of applying precedents have become locus classicus: Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. 47. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations, unless the terms and conditions of notice so provided for such negotiations. 48. It is so well settled in law and needs no restatemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India4 but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses, the present case belongs. 51. In Master Marine Services (P) Ltd. v. Metcalfe Hodgkinson (P) Ltd., (2005) 6 SCC 138: AIR 2005 SC 2299 Hon ble Supreme Court has observed that lack of involvement of public interest may not warrant interference by the High Court in exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it comes to a conclusion that overwhelming public interest requires interference, the court should intervene. 53. The Hon ble Supreme Court in G J. Fernandez -Vs- State of Karnataka (supra) held that all tender conditions which required minimum qualifying requirements for intending tenderers and information and documents to be furnished by them prescribed by N. I. T. should be strictly complied with. However, any non-conformity with or relaxation in the prescribed standard allowed in case of any intending tenderer, if not resulting in substantial prejudice or injustice to any of the parties or to public interest in general, would not be bad. 54. Recently, in Master Marine Services (P) Ltd. v. Metcalfe Hodgkinson (P) Ltd. and Anr. : AIR 2005 SC 2299, upon noticing a large number of decisions, this Court stated 15. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd. and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed . No such case of prejudice was made out by Respondent before the High Court or before us. 56. Learned counsel for the petitioner vehemently submitted that the respondent no.3 has submitted one A/C Payee Demand draft, for an amount of Rs.90,000/-, drawn on State Bank of Mysore, SBM Belapur Branch, ,while it was mentioned in the General Terms Condition of the Tender Documents that EMD for an amount of Rs.90,000/- only in the shape of Deposit at Call drawn on any Nationalized Bank in favour of CEO, Tripura, should be accompanied with the Technical Bid. EMD other than the shape of Deposit at Call will not be considered. 57. Law on the similar terms has been laid down in Poddar Steel Corporation v. Ganesh Engineering Works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the background facts, it would be undesirable to accept the tender, the power of judicial review should not be exercised in absence of any mala fides or irrationality. 61. In State of NCT of Delhi and Anr. v. Sanjeev alias Bittoo: 2005 Cri. LJ 2179, the Apex Court reiterated the principles of judicial review and observed as under : 65. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under: i) If there are essential conditions, the same must be adhered to; ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the revenue. It is not possible for Courts to question and adjudicate every decision taken by an authority because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding contracts. But even in such matters they have to follow the norms recognised by courts while dealing with public property, though the decisions taken in bona fide manner although not strictly following the norms laid down by the Courts, are upheld on the principle laid down by Justice Holms, that Courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of "play in the joints" to the executive.... 64. Public authorities are essentially different from those of private persons. Even while taking decision in respect of commercial transactions a public authority must be guided by relevant considerations and not by irrelevant ones. If such decision is influenced by extraneous considerations, which it ought not to have taken into ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here bidders who fulfill prequalification alone are invited to bid ,adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favoritism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the appellant) in favor 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." 67. In Sterling Computers Ltd. v. M/s M.N. Publications Ltd(supra) it was held as under : "While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should interfere. 70. Learned Advocate General relying on the decision in Sachidanand Pandey v. State of W.B., (1987) 2 SCC 295, submitted that the Apex Court observed that it cannot for a moment be doubted that a decision must be arrived at after taking into account all relevant considerations, eschewing all irrelevant considerations. When the transaction bears a commercial though public character, which can only be settled after protracted discussion, clarification and consultation with all interested persons can not be avoided. 71. Referring to the decision of T.N. Seshan, Chief Election Commr. of India v. Union of India, (1995) 4 SCC 611, learned Advocate General pointed out the even if a non member Deputy Secretary, was present in the Technical committee the decision of the Majority was reflected as defined in Footnote 6 at p. 657 of Halsbury's Laws of England, 4th Ed. (Re-issue), Vol. 7(1) posits: The principle has long been established that the will of a Corporation or body can only be expressed by the whole or a majo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax extra). Difference in price in the quotation cannot be ignored by the State respondent, when public coffer is the source of expenditure. 73. Learned Advocate General submitted that that a very important project like the present one is being held up in a legal battle between the two companies, for which the entire people of the State would face problems and the Government will be put in embarrassment. 74. Keeping in view the facts and circumstances discussed above, in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Once such a power is exercised, one of the questions which would arise for consideration by the courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain themselves in exercise of their discretionary jurisdiction. In the present case the exercise of power by the respondent in awarding the contract to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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