TMI Blog2005 (4) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainers and cargo at Inland Container Depot (for short ICD ), Tughlakabad, Delhi, for a period of 24 months. The contract was to be awarded through a two bid process. The first part was to consist of Pre-Qualification Bid , which was to be accompanied by various documents showing experience, constitution of the firm/company, turn over for past three years, a copy of the license to act as surveyor/loss assessor under the Insurance Act, 1938, besides other matters and earnest money in the form of bank draft/pay order. The second part was to consist of the Financial Bid . The technical bid was to be opened on 15.12.2003 and the financial bid was to be opened on 28.2.2004. After opening the technical bid, the CONCOR pre-qualified two bidders, viz., the appellant and the first respondent. Thereafter, the financial bid was opened. The bid of the appellant was ₹ 3.00 per container while that of the first respondent it was ₹ 3.75 per container and as the appellant s bid was 25 per cent lower than that submitted by the first respondent, its bid was accepted and the work was awarded to it. The fist respondent initially filed Writ Petition (C) No.3687 of 2004 before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Committee (for short TEC ) had deliberated upon the said fact and after taking into consideration the fact that the appellant was known to be an established surveyor doing work of number of shipping lines and that Capt. Percy Meher Master had been appointed as Chairman of the Company by its Board, the tender committee took a decision that the financial bids of both the bidders be opened. The first respondent had enclosed two IICL certificates, but the same were not in conformity with the tender conditions. It was further pleaded that the major work (98%) under the contract is of data entry i.e. recording of container number, seal number, condition of seal and external condition of container on arrival and dispatch of containers from the ICD for which the appellant had quoted ₹ 3.00 per container against ₹ 3.75 of the first respondent and for such kind of work no license under IRDA is required. Having regard to the fact that the bid offered by the first respondent for external survey of a container, which is the main work, was 25 per cent higher than that of the appellant, the work was awarded to the appellant. 4. The appellant also filed a counter affidavit sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinue to do the work assigned under the contract till the CONCOR reconsidered the bid submitted by the first respondent. It was further directed that it will be open to the CONCOR to negotiate with the first respondent the bid price and if they are satisfied with their offer, the contract shall be awarded to them, failing which fresh tenders may be invited. 6. Learned counsel for the appellant has submitted that the only ground on which the High Court has set aside the award of contract to the appellant is that it does not possess a license to act as surveyor/loss assessor under the Insurance Act, 1938. Initially in the year 1983, Capt. Percy Meher Master, who had a license to act as surveyor/loss assessor under the Insurance Act, had started a sole proprietorship business in the name of Master Marine Services. Subsequently, on account of increase in business, he formed a private limited company in 1997 by the name of Master Marine Services Pvt. Ltd. (appellant herein), which took over the entire business of Master Marine Services (the sole proprietorship concern). Capt. Percy Meher Master holds 40.02 per cent share holding in the said company and the remaining is held by his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. 7. In order to appreciate the contention raised by the learned counsel for the parties, it is necessary to briefly notice the relevant part of the tender document. Chapter I deals with Instructions Regarding Submission Of The Tender . Para 2 gives a long list of documents which had to be submitted for pre-qualification bid. The relevant parts of para 1, para 2, para 3 and para 11 of the instructions are being reproduced below : 1. The tendering will be through a two bid process. Document duly completed should be submitted in two parts. 2. First part will consist of Pre-Qualification Bid for tender for professional services for survey of cargo/containers for CONCOR at ICD/TKD and should be superscribed as such. It should be sealed in a separate envelope, to be called envelope A . The envelope must contain the following documents : (a) ............................................................................................................... (g) Copy of license to act as surveyor/loss assessor under Insurance Act, 1938. ......................................................................... 3. The second part will consist of the Financial Bid f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rers prior to the last date of tender submission. The CONCOR also reserved the right to relax the tender conditions at any stage, if considered necessary, for the purpose of finalizing the contract in the overall interest of the CONCOR and the trade. 8. The Tender Evaluation Committee of the second respondent held a meeting on 17.1.2004 where the technical bids of the appellant and the second respondent were considered and recorded as under in the notings : The documents given by M/s Metcalfe are perfectly in order. There is slight ambiguity about one of the documents given by M/s Master Marine Services. This concerns the surveyor license. The license is issued in the name of Mr. Percy Meher Master who is the sole proprietor of M/s Master Marine Services. The license issued by the IRDA mentions Mr. Percy as being the sole proprietor of M/s Master Marine Services. As per our tender criteria, clause 1(d), Chapter 2 (pg.6) mentions that the tenderer must have license to act as surveyor/loss assessor under Insurance Act, 1938. The TEC feels that there are only two bidders in this tender. It would be desirable to prevent this tender from lapsing into a single bidder tender. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 3.75 of the first respondent for data entry i.e. recording of container number, seal number, condition of seal and external condition of container on arrival and dispatch of containers from the ICD. It is also the case of the second respondent that the major work (98%) under the contract is of the aforesaid nature for which no license under IRDA is required. Thereafter, the work was awarded to the appellant. 9. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three Judge Bench in Tata Cellular v. Union of India AIR 1996 SC 11. It was observed that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract. .......... 11. In Raunaq International Ltd. v. I.V.R. Construction Ltd. 1999 (1) SCC 492 it was observed 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, which would include, inter alia, the price at which the party is willing to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of ability to deliver the goods or services as per specifications. 12. The law relating to award of contract by State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd. 2000 (2) SCC 617 and it was held that the award of a contract, whether by a private party or b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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