TMI Blog2016 (10) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... taking a decision as to whom the contract be awarded and at what terms. It has also been observed that by way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinized by the technical experts and sometimes third party assistance from those unconnected with the owner’s organization is taken. This ensures objectivity. Bidder’s expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent had also issued Instructions To Bidders (ITB) which contain clauses as to how the proposal shall be conducted. Clause 6.3.1 of ITB deals with Preliminary Examination of Techno-Commercial Proposals. We think it appropriate to reproduce the same:- 6.3.1 Preliminary Examination of Techno-Commercial Proposals: (a) OWNER will examine the Project Proposals to determine whether they are complete, whether required securities have been furnished, whether the documents have been properly signed and whether the bids are generally in order. (b) Prior to the detailed evaluation, OWNER will initially determine whether each Techno Commercial Proposal is of acceptable quality, is generally complete and is substantially responsive to the bidding documents. For purposes of this determination, a substantially responsive Proposal is one that conforms to all the terms, conditions and specifications of the bidding documents without material deviations, objections, conditionalities or reservations. A material deviation, objection, conditionality or reservation is one (i) that affects in any substantial way the scope, quality or performance of the contract; (ii) that limits in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent mines including the mine considered to meet qualifying requirement at clause 7.1.2(b). 4. At this stage, it is necessary to refer to Notes appended to Clause 7.3.3 that deals with route-3. Notes are as under:- i. The word operated means that the Bidder should have performed the necessary activities of drilling, excavation, hauling etc. on its own or through sub-contracting. ii. The word developed means that the Bidder should have performed the necessary activities of Land Acquisition/assisted in Land Acquisition, Statutory clearances/assisted in Statutory clearances and carried out Infrastructure development on its own or through sub-contracting. 5. Chapter 9 of the ITB deals with Evaluation Methodology for Techno- Commercial Proposal (Qualification Proposal and Technical Proposal). Clause 9.1 deals with Evaluation of Qualification Proposal and Clause 9.2 deals with Evaluation of Technical Proposal. They read as under:- 9. Evaluation Methodology for Techno Commercial Proposal (Qualification Proposal and Technical Proposal) 9.1 Evaluation of Qualification Proposal: The Techno-Commercial Proposal shall be scrutinized to establish resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide the necessary details as specified in Clause 8.4. The Technical evaluation will be for evaluating whether the Technical Proposal of the Bidder meets the following criteria . (a) Time Schedule to Achieve First Year Coal Production Target NTPC shall evaluate the PERT chart submitted by the Bidder, to determine its completeness; reasonableness; and achievability. (b) Adequacy of the Equipment Plan The Bidder shall submit an equipment plan giving details of the equipment that shall be used by the Mine Operator to provide Mining Services which shall be not less than the Minimum Equipment to be deployed as specified by NTPC at Schedule 6 of Project Agreement. NTPC shall evaluate the adequacy of equipment to meet the criteria imposed by NTPC in terms of quantity of production, quality of coal produced etc. [emphasis supplied] 7. The controversy in the instant case basically pertains to whether the appellant meets the qualification criteria as provided under the heading Technical Criteria that occurs in Clauses 7.1 and 7.2 of QR. To appreciate the same, it is essential to have a look at the bid submitted by the appellant. The appellant had uploaded the propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equested to furnish the following information with respect to the details/documents furnished in the bid for qualification requirement data: (i) Against QR requirement of Clause 7.1.2 of ITB : It is observed in the Contract Agreement dtd. 11.02.2014 submitted by the bidder in support of meeting qualifying requirement for Lignite project Mata No Madh, Kutch, Gujrat that the necessary activity of drilling as per stipulations of QR (sr.no. i of Notes) is not mentioned. The same may please be clarified with supporting documents. (ii) Against QR requirement of Clause 7.2 of ITB: Details of Other non cash expenses in Million for calculating Annual Cash Accrual for three year viz. 2013-14, 2014-15 2015-16 2.0 It is requested that the requisite information along with necessary documents be furnished to us at the earliest, preferably by 24.05.2016. 3.0 It may please be noted that seeking the above clarifications should not be construed that the bid submitted by you is considered techno commercially responsive and/or meeting the Qualification requirements (QR). 9. The response that was given by the appellant on 21.5.2016 is to the following effect:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from mining face and ancillary activities at Lignite project, Mata No Madh Vide Tender Notice No. (R1)/LP/01/13-14 dated 30.08.2013, has been awarded to M/s. Montecarlo Limited, having registered office at 7 th Floor, Shilp Building, Nr. Municipal Market, C.G. Road, Navrangpura, Ahmedabad 380009, Gujarat, India. Name of Work: Turnkey Mining Contract involving Overburden/Inter burden removal, Excavation and/or loading of Lignite from mines face and ancillary activities at Lignite project, Mata No Madh.: Name of Contractor M/s. Montecarlo Limited LOI No. GMDC/LP/13306/13-14 Dated: 15/01/2014 Estimated Cost/Contract Value 663.04 Cr. Awarded Quantity Over Burden (1109.00) Lac CUM Lignite (148.00) Lac MT Contract Period 28.01.2014 to 27.01.2019 The scope of Project is to carry out mining operation on Turnkey basis comprising of removal of over burden, inter burden and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urged that the scope of work for Dulanga Mines projects which was taken into consideration by the respondent in evaluating the technical proposal of the petitioner as being non-responsive had been wrongly understood. The stand of NTPC before the High Court was that the assessment by the Technical Committee was absolutely justified and the writ petitioner therein did not meet the QR and, therefore, was treated as non-responsive. 12. The High Court referred to how tender documents that reflected the nature of mine operations, how blasting is an inherent part and drilling is differently understood in the sense that the appellant had understood. Thereafter, placing reliance on Tata Cellular v. Union of India (1994) 6 SCC 651 and Michigan Rubber (India) Ltd. v. State of Karnataka and Ors. it came to hold that the decision taken by the owner was correct and did not adversely affect public interest but subserved the public purpose. Being of this view, the High Court dismissed the writ petition. Hence, the present appeal by special leave. 13. We have heard Mr. P. Chidambram and Mr. Harin P. Raval, learned senior counsel with Mr. Sandeep Singh, learned counsel for the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur own or through sub contracting Our own/ sub contracting Our own/ sub contracting Our own/ sub contracting Hauling Yes/ No Yes/ No Yes/ No Carried out Hauling on our own or through sub contracting Our own/ sub contracting Our own/ sub contracting Our own/ sub contracting S. No. Particulars Mine 1 Mine 2 Mine 3 11 Annual Production in Million Bank Cubic Year (From 01.04.2014 to 31.03.2015) Year (From 01.04.2014 to 31.03.2015) Year (From 01.04.2014 to 31.03.2015) Meters. Bidder to refer Note (vii) of the Qualifying Requirements of Chapter 7 Coal / Lignite (in MT) Overburden (in Million BCM) Coal/ Lignite (in MT) Overburden (in Million BCM) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Supply Distribution System beyond 33KV switchgear breaker terminals of Darlipalli STPP for various equipments/facilities included in Mine Operator s scope. x x x 5.9 Blasting: Blasting shall be required for coal and selectively for overburden with the objective of achieving good fragmentation so that the excavators can operate at high levels of efficiency. 5.10 Overburden and Inter burden Removal: The terms overburden and interburden are each included in the term overburden below unless noted otherwise. The Mine Operator shall ensure the following in respect of Overburden removal: (a) The Mine Operator shall assess the admissibility of accommodation of OB volume in the external dump/in-pit-dump and accordingly if warranted, notify or seek necessary clearances/ approvals from appropriate authority, keeping in view the stipulation of MoEF, contained in Forest Clearance Stage 1, dated 10.01.2014. (b) The Mine Operator s daily and weekly scheduling shall be consistent with the AAPP. All levels, benches, haul roads, and high walls shall be consistent with the Monthly Production Plans and the statutory requirements. (c) Weekly digging plans sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . deals with drilling and blasting. It is as follows:- 5.7.2. Drilling Blasting Crawler-mounted pneumatically operated down the hold drilling rigs are capable to meet the future requirement of 8 m/hr will be deployed for OB. R.B.H. drills will be used for drilling about 160 mm dia. holes in coal. After shot holes are drilled into the horizontal bench cut by the shovel, the faces are blasted using explosives and detonators. Coal is also extracted after blasting off the coal faces. Drilling Blasting would be required both in OB and Coal, benches, before excavation by shovel. Except for coal benched which will be mined by CSMs Heavy ANFO type/Slurry Emulsion is proposed to be used based on the daily requirement. However, flexibility may have to be provided for usage of suitable alternative/available explosives as per the requirement. 17. We have referred to these clauses which are technical but they are fundamental to understand the QR. They clearly demonstrate that drilling is imperative. Mr. Chidambram, learned senior counsel for the appellant would argue with all the conviction at his command that the appellant is engaged in drilling in Lignite and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. 19. In Jagdish Mandal v. State of Orissa and Ors (2007) 14 SCC 517 the Court has held that a contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. 20. In Master Marine Services (P) Ltd. v. Metcalfe Hodgkinson (P) Ltd and Anr (2005) 6 SCC 138 , it has been ruled 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are scrutinized by the technical experts and sometimes third party assistance from those unconnected with the owner s organization is taken. This ensures objectivity. Bidder s expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or malafide or procedure adopted is meant to favour one. The decision making process should clearly show that the said maladies are kep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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