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Rashmi Metaliks Ltd. & Another Versus Kolkata Metropolitan Development Authority & Other

2013 (9) TMI 390 - SUPREME COURT

Eligibility to enter into tender - Non compliance of tender terms - Held that:- at the material time there was no blacklisting or delisting of the Appellant-company and that in those circumstances it was not relevant to make any disclosure in this regard. The very fact that the Tendering Authority, in terms of its communication dated 22nd July 2013 had not adverted to this ground at all, lends credence to the contention that a valid argument had been proffered had this ground been raised. Regard .....

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y way of a side wind. The impugned Judgment is indubitably a cryptic one and does not contain the reasons on which the decision is predicated. Since reasons are not contained in the impugned Judgment itself, it must be set aside on the short ground that a party cannot be permitted to travel beyond the stand adopted and expressed by it in its earlier decision. - Filing of the latest Income Tax Return was a collateral term, and accordingly the Tendering Authority ought to have brought this dis .....

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even more so the High Court as well as the subordinate courts have to face lengthy arguments in each case because of the practice of citing innumerable decisions on a particular point of law. The rule of precedence, which is an integral part of our jurisprudence, mandates that this exposition of law must be followed and applied even by coordinate or co-equal Benches and certainly by all smaller Benches and subordinate Courts. We hasten to clarify that if a co-ordinate Bench considers the ratio .....

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f stare decisis. Tata Cellular has been so ubiquitously followed, over decades, in almost every case concerning Government tenders and contracts that it has attained heights which dissuade digression by even a larger Bench. The law of precedence and of stare decisis is predicated on the wisdom and salubrity of providing a firmly founded law, without which uncertainty and ambiguity would cause consternation in society. It garners legal predictability, which simply stated, is an essential. The she .....

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f the Division Bench of the High Court of Calcutta which in turn has upheld the appreciation of the law as also the facts of the case by a learned Single Judge of that Court. Thus, these courts have concurrently concluded that the Appellant-company had failed to comprehensively correspond to the essential terms of the tender and, therefore, its offer contained in the said tender was ineligible for consideration. 2. The two terms of the subject Invitation to Tender which are germane to the case i .....

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ny reason whatsoever. (j) Valid PAN No., VAT No., Copy of acknowledgement of latest Income Tax Return and Professional Tax Return. 3. It must immediately be clarified that so far as clause (i) is concerned, the learned Single Judge had thought it unnecessary to analyse its applicability and relevance, having come to the conclusion that a violation of clause (j) had been committed by the Appellant-company inasmuch as it had failed to file its latest Income Tax Return along with its bid. This posi .....

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es/errors in question, it is stated, are unintentional and occurred due to the fault of computer termed as a repetitive systematic computer typographical transmission failure . It is difficult to accept this contention. A mistake may be unilateral or mutual but it is always unintentional. If it is intentional it ceases to be a mistake. Here the mistakes may be unintentional but it was not beyond the control of Respondents 1 to 4 to correct the same before submission of the bid. Had they been vig .....

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perts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfil prequalification alone are invited to bid, adherence to the instructions cannot be given .....

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e 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 hesitatio .....

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of consideration in toto. The Division Bench also opined that the Appellant-company could not be granted the indulgence to correct this error, as such facility was not available to other bidders. In saying so, the Division Bench, it appears to us, has diluted its view that clause (j) is altogether inviolable. 5. The Respondents have endeavoured to raise the alleged violation of clause (i) before us, but we are in no manner of doubt that this effort should be roundly rejected. This is despite the .....

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al v. Union of India (2002) 6 SCC 315 Paras 5 and 6; (iii) Puravankara Projects Ltd. v. Hotel Venus International (2007) 10 SCC 33 Paras 28 to 30; (iv)Sorath Builders v. Shreejikrupa Buildcon Ltd. (2009) 11 SCC 9 Paras 17 and 28; and (v) Glodyne Technoserve Ltd. v. State of Madhya Pradesh (2011) 5 SCC 103 Para 47. Mr. Vishwanathan, learned senior counsel for the Appellants sought to rely on Poddar Steel Corporation v. Ganesh Engineering Works (1991) 3 SCC 273 and Kanhaiya Lal. 6. This Court, and .....

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ust be followed and applied even by coordinate or co-equal Benches and certainly by all smaller Benches and subordinate Courts. We hasten to clarify that if a co-ordinate Bench considers the ratio decidendi of the previous Bench to be of doubtful efficacy, it must comply with the discipline of requesting Hon ble the Chief Justice to constitute a larger Bench. Furthermore there are some instances of decisions even of a Single Judge, which having withstood the onslaughts of time have metamorphosed .....

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brity of providing a firmly founded law, without which uncertainty and ambiguity would cause consternation in society. It garners legal predictability, which simply stated, is an essential. Our research has revealed the existence of only one other three-Judge Bench decision which has dealt with this aspect of the law, namely, Siemens Public Communication Networks Private Limited v. Union of India (2008) 16 SCC 215, which is in actuality an anthology of all previous decisions including Tata Cellu .....

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itimate exercise, perfectly permissible for Benches to advance the law provided this exercise does not lead to a conclusion which is irreconcilable with a binding precedent. We also would clarify that the manner in which a Bench appreciates the factual matrix before it can obviously be of value only if a subsequent case presents identical facts, which remains a rarity. 8. Tata Cellular states thus : 77. The duty of the court is to confine itself to the question of legality. Its concern should be .....

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fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under : (i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in cou .....

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any material additions to the law which per force are compatible with Tata Cellular. W.B. State Electricity Board reiterated the exposition of law contained in Tata Cellular, as it had to do. On facts it opined that once the unit rate and line item total are filled in by the bidder, they are unalterable though arithmetical errors can be rectified . So far as the law is concerned the position remains the same significantly, as it must do; the facts bear no semblance to those in hand. The Court he .....

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the bid which had already been received on-line could correctly not be considered. Glodyne Technoserve also applies Tata Cellular; but on the factual matrix sounds a discordant note so far as the Respondents who rely on it are concerned, inasmuch as it recognises that it fell within the discretionary domain of the concerned Authority whether or not to consider the documents (in that case an ISO Certification) which had not been submitted as per tender stipulations. Kanhaiya Lal, relied upon by .....

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uring their strict adherence, can allow leniency towards the compliance of collateral clauses. This analysis of the cited case-law shows that there is little or no advantage to be gained from the manner in which the Court has responded to the factual matrix as other Courts may legitimately place emphasis on seemingly similar facts to arrive at a different conclusion. But the ratio decidendi has to be adhered to. Counsel must therefore exhibit circumspection in the number of cases they cite. The .....

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nding that the Appellant-company s tender did not correspond to the essential term of the Invitation to Tender in two respects : (a) The alleged blacklisting of the Appellant-company as postulated in clause (i); and (b) The Appellant-company s failure to furnish/forward the latest Income Tax Return, as envisaged in clause (j). 11.The letter rejecting the Appellant-company s offer reads thus : Subject: KMDA: Disqualify for Tender No.:01/ KMDA / MAT / CE/2013-2014 Date : Mon, 22 Jul 2013 18:13:22 .....

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tax return along with its Bid. With regards Tendering Authority 12.So far as the first point is concerned, it needs to be dealt with short shrift for the reason that the Courts below have not thought it relevant for discussion, having, in their wisdom, considered it sufficient to nonsuit the Appellant-company for its failure on the second count. It has, however, been explained by Mr. Vishwanathan, learned Senior Counsel for the Appellant-company that at the material time there was no blacklisti .....

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its entirety has become irrelevant for our cogitation for the reason that it does not feature as a reason for the impugned rejection. This ground should have been articulated at the very inception itself, and now it is not forensically fair or permissible for the Authority or any of the Respondents to adopt this ground for the first time in this second salvo of litigation by way of a side wind. The impugned Judgment is indubitably a cryptic one and does not contain the reasons on which the decis .....

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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. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (AIR 1952 SC 16) (at p.18): Public orders publicly made, in exercise of a statutory author .....

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ar as clause (j) of the detailed notice inviting E-tender No.01/KMDA/MAT/CE/2013-2014 dated 10.5.2013 emanating from the office of the Chief Engineer is concerned, it seems to us that contrary to the conclusion in the impugned judgment, the clause is not an essential element or ingredient or concomitant of the subject NIT. In the course of hearing, the Income Tax Return has been filed by the Appellant-company and scrutinized by us. For the Assessment Year 2011-2012, the gross income of the Appel .....

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