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2019 (9) TMI 271

..... e price sheet of the bidders disappeared form the portal of the Authority from 8.8.2018 till 6.12.2018 - It is also the contention of the petitioner that the bid of respondent No. 2 was non-responsive on account of column No. 3 relating to custom duty in the Price Schedule Bid having been left blank, and thus the same ought to have been rejected - HELD THAT:- There is no dispute on the basic facts viz. the nature of tender being was an Etender for supply, installation and maintenance on 74 Nos. videoscope; opening and closing date of the tender; the place of the opening of tender and the tender conditions. At this stage reference is required to be made to the relevant clauses in Section II of the General Instructions to the Tenderers (GIT) which was a part of the e-tender Inquiry Document. ‘Contract Price’ has been defined in clause 2.2.1 to mean the price provided in clause 2.12.1 of Section II of the tender document. ‘L-1’ means the tenderer whose tender is the lowest as per clause 2.2.1(xi). Having traversed through the different clauses relating to the terms and conditions governing the present tender, we find that the conditions mandate that the tendere .....

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..... ondent No. 2. No other relief has been claimed by the petitioner in the present writ petition. Petition allowed. - W.P.(C) No. 13608/2018 - 5-9-2019 - MR. JUSTICE G.S. SISTANI AND MS. JYOTI SINGH JJ. Petitioner Through: Mr. Sandeep Sethi, Sr. Advocate with Mr. Dhruv Nayar, Advocate. Respondents Through: Mr. R.V. Sinha, Mr. A.S. Singh and Mr. Amit Sinha, Advocates for respondent no. 1. Mr. Debesh Panda, Ms. Akriti Kataria, Mr. Abhas Mishra and Mr. Tarun Khanna, respondent no. 2. JYOTI SINGH, J. 1. The present petition has been filed seeking to set aside the order dated 7.12.2018 whereby respondent No. 1 has awarded the contract to respondent No. 2 as also for issuance of a direction to respondent No. 1 to place the original records pertaining to the contract in question before this Court. 2. The brief facts which need to be captured for deciding the present petition are that the petitioner is a proprietorship firm with Sh. Manish Dalmia as its proprietor. The firm was established in the year 2006 and is engaged in design, supply, installation, testing, commissioning and maintenance of security, surveillance, traffic law enforcement and civil aviation equipments/videoscopes. The peti .....

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..... uoted by the petitioner was less than the price quoted by the respondent No. 2. Price Bid was to be submitted in two parts-Part I and Part-II and were to be added to determine the Lowest Bidder (L-1) as per Clause 2.29.2 of the Tender Conditions. 8. The petitioner further pleads that on 7.12.2018 respondent No.1 uploaded a Tender Summary Report (technical bids and price sheet of all the bidders) on their website, which showed that the petitioner was rejected-finance , giving reasons L-2 . The petitioner avers that a reading of the summary report gives an impression that the petitioner has been rejected on his being L-2 i.e. his price bid being higher than that of respondent No.2. On 5.12.2018, the petitioner addressed a communication to respondent No. 1 apprising him of the fact that the bids were not appearing on the e-procurement portal. On 7.12.2018 and 11.12.2018 the petitioner submitted representations against awarding the contract to respondent No. 2 and seeking reasons for such action. Not getting any favourable response the petitioner filed the present writ petition with the following prayers:- (i) to issue a writ of mandamus and certiorari order direction thereby setting a .....

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..... nd the sum of discounted annual maintenance charges of five years. He submits that applying this methodology the petitioner is L-1 and there is no reason why the award should have been awarded to respondent No. 2 who was L-2. He submits that the respondent No. 1 has wrongly placed petitioner as L-2 and has illegally denied the award of contract to the petitioner. 11. The next submission of Mr. Sethi, learned senior counsel for the petitioner, is that a perusal of the bid (price schedule) submitted by respondent No. 2 (which is at page 92 of the paper book) shows that in the column relating to Custom Duty the amount which was to be reimbursed by respondent No. 1 and was to be quoted in the said column by respondent No. 2 has not been indicated and instead only _ _ _ has been mentioned. He submits that since the column has been left blank, this was an incomplete bid and being non-responsive, it should have been rejected at the outset. Mr. Sethi has also drawn the attention of this Court to Clauses 2.13.2 and 2.13.3 of the tender documents. He submits that as per the tender condition, the tenderer was to indicate the custom duty assessed by him for the videoscope in question and a ten .....

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..... he rate of 1% to the CIF value has been done away by a circular, there was no reason this should have been added to the bid quoted by the petitioner. 13. Respondent No. 1 has filed a reply affidavit and has submitted that the bids have been evaluated strictly in accordance with the evaluation criteria and in a fair manner. It is stated in the affidavit that the L-1 bidder had to be evaluated as per the formula given in Clause 2.29 of the tender documents. It is further stated that the price bids of three technically qualified bidders were opened online on 7.8.2018 and were available to the petitioner, which is evident from its letter dated 24.8.2018. It is denied that the price sheet of the bidders had disappeared from the portal from 8.8.2018 till 6.12.2018 and the allegation is denied. It is further averred that the TEC had evaluated the bids and the demonstration of the equipments was conducted by the technically qualified bidders and during the entire period of technical bid opening, the petitioner had never raised any issue of non-availability of the technical bids on the CPP portal. 14. Mr. Sinha, learned counsel for respondent No. 1 submits that the price bids were evaluated .....

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..... o ₹ 12,82,176/-. This was higher than that of respondent No. 2 and thus it is wrong for the petitioner to claim that he was L-1. 17. Pursuant to the order passed by this Court on 30.5.2019, respondent No. 1 filed an additional affidavit. In the additional affidavit, respondent No. 1 has sought to explain the price bid document given by respondent No. 2, more particularly, with respect to the column relating to custom duty. It is stated in the affidavit that the _ _ _ put by respondent No. 2 meant that no custom duty was being claimed and the price quoted was all inclusive and final. This intent is fortified by the fact that even in the claim relating to installation and commissioning charges, respondent No. 2 has put a _ _ _ . It was further explained that it was not as if no expenses would be incurred by respondent No. 2 in installation or commissioning, but respondent No. 2 had taken a conscious decision to claim only what was quoted as all inclusive and nothing further was to be claimed from the Government. Further it is explained that since the price quoted by respondent No. 2 was inclusive of custom duty, which includes duty on 1% Landing Charges, the said charges were n .....

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..... y have to be based on the actual charges incurred and not a notional charge. The petitioner is also misreading and misconstruing the judgment of the Apex Court in Wipro Ltd. (supra). Learned counsel for the respondent No. 2 on the basis of the elaborate pleadings, contends that the award has been correctly awarded to respondent No. 2 as he was found to be the L-1 bidder. He submits that the methodology of determining the L-1 bidder is given in clause 2.29.2 of the tender conditions. The basis to determine thus is the Net Cash Outflow, which is the sum of contract price of the system and the sum of discounted annual maintenance charges for 5 years. So worked out, the price of respondent No. 2 becomes lower than that of the petitioner. Learned counsel has further contended that respondent No.2 had bid at ₹ 10,35,000/-, all inclusive as a price per videoscope on which it computed the GST, whereas the petitioner had bid ₹ 10,45,188/- per videoscope, which included 51,348/- as custom duty. On the face of it thus the petitioner had claimed a higher GST and thus the price was higher. 21. Learned counsel for respondent No. 2 submitted that in the price bid, the column of custom .....

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..... under: (2) For the purposes of sub-section [1] of section 14 of the Customs Act, 1962 [52 of 1962] and these rules, the value of the imported goods shall be the value of such goods, and shall include- (a) The cost of transport, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation; 23. Learned counsel further argues that on the date of the bid evaluation, the actual importation of the goods could not have taken place and the tenderer could not have given the actual cost of transport, loading etc. 24. It is further contended that for evaluating the case of Respondent No. 2 the custom duty or 1% landing charges did not have any impact, since R-1 clearly knew that the price bid of R-2 was an all inclusive bid and the purpose of indicating _ _ _ was clearly to convey that no amount would be claimed on account of custom duty. 25. We may now refer to the case law which has been relied upon by the respective parties. 26. Learned senior counsel for the petitioner has relied upon a judgment of this Court in the case of Inderjit Mehta vs. UOI in W.P.(C) 5685/2015 decided on 1st September, 2015 for the proposition that in a jud .....

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..... t the work was for public utility service and 80% work having been completed, court should not have interfered, as any cancellation of the work at that stage would delay a public project. 29. Learned counsel submits that in the present case, the judgment apply with a greater vigour as 90% performance has been achieved and only commissioning remains, and more particularly, the items involved are dealing with National security and are urgently required by the customs authorities. 30. Learned counsel next placed reliance on Caretel Infotech Ltd. vs. Hindustan Petroleum Corporation Limited & Ors. 2019 SCC OnLine SC 558 to contend that the author of the tender is the best person to understand it and interpret the documents. Constitutional courts must exercise restraint while interfering and ought not to substitute their own views or interpretations on the tender conditions. Even assuming that there is any procedural aberration or assessment error, courts would not ordinarily interfere. Reliance is placed on Raunak International Ltd. Vs. I.V.R. Construction Ltd. AIR 1999 SC 393 to contend that the lis is purely between two tenderers and a mere difference in the prices offered is not .....

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..... ne. Significantly, clause 2.10.5 provides that a tender which gives evasive information against any requirement shall be liable to be ignored and rejected. Clause 2.12.1 deals with the Contract Price of the videoscopes which is the price chargeable for delivery at the place of installation. It is mentioned that the price shall be firm and fixed and not subject to any variation, except where the rate of applicable taxes payable in India undergoes a change. Taxes are payable as per actuals. The Contract Price shall include the cost of installation, commissioning, insurance, delivery, warranty period etc. Clause 2.13.2 deals with the duties and taxes which are payable by the supplier in India and are to be reimbursed as per actuals. No claim on account of increase in cost due to taxes etc. was to be entertained. Significant would be to mention clause 2.13.3 which provides that the tenderer should indicate tentative duties and taxes in the proforma as applicable on the date of opening of Technical Bids though the payment was as per actuals. Clause 2.13.6 also needs a mention as it provides that in case the purchaser finds that the duties and taxes have been mentioned incorrectly, it re .....

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..... ny duties or taxes on the raw material. XXX XXX XXX 2.13.6 In case the Purchaser finds the duties and taxes mentioned incorrectly, the Purchaser reserves the right to change it to the values considered appropriate and in that event the price quoted by the tenderer shall be adjusted accordingly. If it is felt that the duties were mentioned incorrectly to gain unfair advantage the tender shall be liable to be rejected. 34. We shall now refer to the clauses relating to the scrutiny and evaluation of Technical Bids i.e. clause 2.25. Clause 2.25.2 relates to the Technical Bids being evaluated by the Tender Evaluation Committee and amongst other parameters, the Tender Evaluation Committee is required to assess as to whether the tender confirms to all the Instructions to the tenderers. We quote para 2.25.2(b) as under: 2.25.2 The technical bids will be evaluated by the Tender Evaluation Committee (TEC) to assess the following; XXX XXX XXX b) Does the tender conform to all the Instructions to Tenderers? 35. Evaluation and award criteria is mentioned in clause 2.28. Clause 2.28.1 requires the technical bids to be evaluated on the basis of information and data provided in the bids as well as .....

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..... Tender Form and enclose supporting documents. The etendering process may permit replacement of shortfall documents, e.g., a document which is not legible but no additional documents can be submitted after the tenders are opened. Tenderers should therefore submit whatever documents they wish, in support of their tender along with-the tender itself. XXX XXX XXX 5. Any tender may be rejected if: a) The tender form is incomplete. 38. Having traversed through the different clauses relating to the terms and conditions governing the present tender, we find that the conditions mandate that the tenderers must read the Instructions given in Form 1 carefully before the tender forms are filled and the bids are submitted. The bidding process was a two-stage process, the first stage being the Technical Bid and the second being a Price Bid. Technically valid and responsive tenders could only be opened for Price Bids. After opening of the Price Bid, the tender was to be awarded to the lowest bidder (L-1). Section VIII provides two proformas in Part I and Part II. Part I relates to the price schedule while part II relates to CCAMC. We scan and place below the two proformas: 39. A bare perusal of t .....

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..... a blank in case of the bid of respondent No.2. We may at this stage refer to paras 3 and 5 of the Instruction to tenderers mentioned in Form -1 of Section X, as quoted by us above. It is clear from a reading of the Instructions that the tenderer was required to fill in all columns of the tender form, and if the tender form was incomplete, the same ought to have been rejected. In our view, when respondent No. 2 left the column of custom duty blank, this was an incomplete form and ought to have been rejected as non-responsive in terms of the above mentioned instructions to tenderers. 43. In this context we may also refer to Clause 2.13.3 which mandates the tenderer to indicate the tentative duties and taxes in the proforma as applicable on the date of opening of the technical bids. Subsequently, based on the actual and statutory variations the said figures can be varied by the purchaser. The rationale behind such clauses in the tender documents it to ensure that price bids are made with clarity. When the price bid in a tender is opened the purchaser should clearly know what is being quoted by the tenderers and the competing tenderers should also know with clarity each other s bids s .....

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..... idder with a huge difference of price between it and the petitioner it could have interpreted the blank column to state that he would claim custom duty, as it was paid by him and was a statutory due. We are afraid that in tenders such ambiguous biddings cannot be permitted. Had respondent No. 2 been genuine about its stand it would have mentioned in the custom duty column or elsewhere in the bid that the prices quoted were all inclusive and no reimbursement of custom duty would be sought. Thus, the contention of learned senior counsel for the petitioner that the bid was non-responsive and invalid has merit. 45. We are also in agreement with the contention of learned senior counsel for the petitioner that respondent No. 1 has wrongly levied 1% landing/loading charges to the price bid of the petitioner on notional basis. We have gone through the contents of the Circular dated 26.9.2017 issued by Central Board of Excise and Customs, wherein an amendment was carried out and it was stipulated that notional landing charges would not be levied and the landing charges would be specifically on the actuals. We are surprised to note the response of respondent No. 1 to this contention, that be .....

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..... o mentioned on these pages. At page 114 of the paper book respondent No. 1 has given the Net Cash Outflow for the petitioner as ₹ 12,45,29,536/- while for respondent No. 2 it is ₹ 12,43,17,149/-. We deem it appropriate to extract hereinunder the manner in which the net cash outflow has been worked out by respondent No.1: Discounted CAMC Charges (in Rs.) S. No Payment Respondent 2. Total Cost of AMC (A) Discount Factor (B) Net Present Value (A/B) 1. 1st Year CAMC Advance 3574422 1.19 3003716 2. 1st Year CAMC Balance 3574422 1.3 2749555 3. 2nd Year CAMC Advance 3890254 1.3 2992503 4. 2nd Year CAMC Balance 3890254 1.41 2759045 5. 3rd Year CAMC Advance 4234761 1.41 3003377 6. 3rd Year CAMC Balance 4234761 1.54 2749845 7. 4th Year CAMC Advance 4622336 1.54 3001517 8. 4th Year CAMC Balance 4622336 1.68 2751390 9. 5th Year CAMC Advance 5038660 1.67 2999202 10. 5th Year CAMC Balance 5038660 1.83 2753366 TOTAL 42720866 28763516 GST 18% 7689756 5177433 Grand Total (M) 50410622 33940949 S. No Payment Respondent 2. Total Cost of AMC (A) Discount Factor (B) Net Present Value (A/B) 1. 1st Year CAMC Advance 3677208 1.19 3090091 2. 1st Year CAMC Balance 3677208 1.3 2828622 3. 2nd Year .....

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..... count of the CAMC charges which has determined the Net Cash Outflow and has resulted in respondent No. 2 being lower deserves to be rejected. 49. We may now deal with the only other contention of the official respondents as well as the successful tenderer that this Court cannot interfere in tender matters in judicial review and more particularly if it with respect to a public project or where substantial part the work is already completed. There cannot be a quarrel with the proposition of law that the Constitutional Courts cannot interfere with the Government s freedom of contract and the principals of Judicial Review can only extend to examining the decision making process. It is, however, equally true that a right balance has to be struck between an administrative decision of the Government in matters of contractual nature and the need to address any unfairness or arbitrariness that may have crept in during the decision making process. In this context, we rely on the judgment of the Apex Court in the case of Tata Cellular Vs. Union of India (1994) 6 SCC 651 wherein the Apex Court has clearly held that judicial review is concerned with reviewing not the merits of the decision, but .....

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..... petitioner succeeds, the award of tender could be quashed. 52. Learned counsel for respondent No. 2 had relied upon the judgments in the cases of Chhattisgarh State Industrial Development Corporation Ltd. (supra) and Tejas Constructions and Infrastructure Private Limited (supra) to argue that once a substantial part of the tender stands performed, the Courts should not interfere. Learned counsel had also relied on Nicco Corporation Ltd. (supra) to contend that once the work has been executed to the extent of 80% any interference would delay a public project and was therefore unwarranted. There is no doubt that as a normal rule if substantial work has been performed under a contract, more particularly a public project, there should be no interference. However, in these very judgments relied upon by respondent No. 2, the Apex Court has held that where there is substantial public interest involved, or where the transaction is malafide or there is arbitrariness in the award of contract, the Constitutional Courts can interfere. In this context, we may also pen down that respondent No. 2 has filed an affidavit before this Court on 28.5.2019 stating therein that in the month of February, .....

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