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TMI Blog2019 (9) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... allation, testing, commissioning and maintenance of security, surveillance, traffic law enforcement and civil aviation equipments/videoscopes. The petitioner claims that it has successfully supplied, installed, tested, commissioned and maintained the said equipments in Government departments like SPG, NSG, AAI and other police departments. 3. The genesis of the petition starts from the day the Central Board of Excise and Customs ('CBEC'), Directorate of Logistics Lok Nayak Bhawan had floated an e-tender no. 30/EQ/2018 dated 22.3.2018 for supply, installation and maintenance of 74 videoscopes at various field formations of CBEC. The videoscopes are used by custom officers to examine the goods at sea ports, air cargo complexes, inland containers depots, etc. and assist in identification and detection of contrabands and smuggled items. 4. The tender was valid for acceptance for a period of 180 days from the date of tender opening, so prescribed in the tender document. The tender bids were to be submitted online only at the CPPP website. As per Clause 2.18.11 the tenderer had to submit the technical bid as per Form-I of Section X along with necessary enclosures, but without indicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onse the petitioner filed the present writ petition with the following prayers:- "(i) to issue a writ of mandamus and certiorari order direction thereby setting aside the impugned order issued by respondent no. 1 awarding the contract to Respondent No. 2 under E-tender No. 30/EQ/2018 dated 22.3.2018. (ii) to issue direction / order to the respondent no. 1 to place before this Hon'ble Court the original records pertaining to the subject contract E-tender No. 30/EQ/2018." 9. On 18.12.2018, notice was issued to the respondents and the award of contract was made subject of the outcome of the writ petition. 10. Learned senior counsel for the petitioner contends that the contract has been wrongly awarded to respondent No. 2 despite the fact that the price quoted by the petitioner was less than the price quoted by respondent No. 2. In fact, in doing so a loss of Rs. 61.30 lakhs has been caused to the Government Exchequer. He submits that the Price Schedule and Centralised Comprehensive Annual Maintenance Contract (hereinafter referred to as 'CCAMC') under Section VIII submitted along with the bid would clearly show that the petitioner had given a bid at a total price of Rs. 9,12,65, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 tentative amount should have been indicated in the proforma as on the date of opening of the technical bids. The custom duty was to be reimbursed later depending on the variation, if any, at the relevant time. He has also drawn the attention of this Court to Section X of the tender documents, which contains Form No. 1 of the tender forms and this Form contains the Instructions as per which the bids had to be submitted. Condition No. 3 clearly requires that the tenderer should fill in all columns of the Form along with supporting documents. Condition No. 5 provides that if any tender Form is incomplete the tender may be rejected. Thus, respondent No. 1 should have rejected respondent No.2's tender being non-responsive. 12. Mr. Sethi, next contends that there is yet another error in calculating the price bid of the petitioner. He submits that while calculating the custom duty respondent No. 1 has wrongly added 1% as landing charges and which has made a difference to the price. He submits that the Apex Court in the case of M/s Wipro Ltd. Vs. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the technical bids on the CPP portal. 14. Mr. Sinha, learned counsel for respondent No. 1 submits that the price bids were evaluated as per Clause 2.29.2. The lowest tenderer L-1 was determined on the basis of Net Cash Outflow. He submits that a detailed calculation has been given in the reply affidavit in para 11 and a comparison of the prices of respondent No. 2 and the petitioner would show that respondent No. 2 was lower as his Net Cash Outflow was Rs. 12,43,17,149/- while that of the petitioner was higher being Rs. 12,45,29,536/-. Respondent No. 2 was correctly found as L-1 and awarded the contract. 15. Mr. Sinha further submits that the custom duty structure which was applicable was Basic Custom Duty = 7.5%, surcharge on Basic Custom Duty = 10% and IGST = 18%. Therefore, while evaluating the price bid of the petitioner the Custom Duty applicable was calculated as Rs. 2,78,398/- and was added to the cost quoted instead of Rs. 2,39,482/- (Custom Duty Rs. 51,348/- and GST Rs. 1,88,134/-), as mentioned by the petitioner in the price bid. He submits that it is clearly mentioned in the tender documents that the tenderer will indicate in the tender the duties and taxes in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No. 2 was inclusive of custom duty, which includes duty on 1% Landing Charges, the said charges were not added to his price bid and thus it is not open to the petitioner to contend why the 1% Landing Charges were not added to the price bid of respondent No. 2. 18. Respondent No. 1 has in the affidavit also given a detailed comparative chart of the prices of the petitioner and respondent No. 2 indicating how the Net Cash Outflow has been calculated. It is explained that since the order was placed on respondent No. 2 exclusive of GST, the Authorities would have to reimburse the same at 18% and this being added, makes the Net Cash Outflow of respondent No. 2 as Rs. 12,34,22,346/-, which is less than the Net Cash Outflow of the petitioner being Rs. 12,35,90,163/-. 19. Respondent No. 2, who is the successful bidder and on whom the award has been placed on 12.11.2018, is represented through a counsel. Respondent No. 2 has filed its reply affidavit as well as an additional affidavit. It is stated in the affidavit that the award has been rightly placed on respondent No. 2 as he was determined as the 'L-1' bidder. A detailed chart of calculation indicating the Net Cash Outflow of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. Learned counsel for respondent No. 2 submitted that in the price bid, the column of custom duty had been left blank because it did not intend to import the goods initially and wanted to procure it locally. Though subsequently, the goods have been imported, but respondent No. 2 had no intent to claim any reimbursement from the Government on whatever custom duty he may have actually paid. Learned counsel clarifies that from the very beginning the prices quoted were all inclusive, and therefore, whether the goods have been imported or purchased locally, there is no prejudice to the Government nor any loss to the public exchequer. Learned counsel next contends that it was the petitioner who had actually wrongly quoted the custom duty. While the duty claimed in the price bid was Rs. 51,348/- but the fact of the matter is that this was on the lower side, only to make the bid lower than that of respondent No. 2. It is for this reason that subsequently respondent No. 1 had corrected the custom duty claimed by the petitioner and the adjusted amount was Rs. 75,283.38/-. 22. Learned counsel for respondent No. 2 next contends that the bid of respondent No. 2 could not be termed as non-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mehta vs. UOI in W.P.(C) 5685/2015 decided on 1st September, 2015 for the proposition that in a judicial review, this Court can interfere in a tender matter and insofar as the relief is concerned, in case it is found that there is arbitrariness, a direction can be issued to the Government to declare the lowest bidder as L-1, as also to award the contract to the L-1 bidder. Reliance is also placed on another judgment of this court in the case of Times Innovative Media Ltd. vs. Delhi Transport Infrastructure Development Corporation Ltd. & Ors. in W.P.(C) 3973/20012 decided on 02.04.2013 for the proposition that even when a contract has been awarded to a successful bidder and the work has been executed to some extent, there is no absolute rule that the court cannot disturb that status in case it finds that the contract was awarded illegally and there was arbitrariness. This would be so, more particularly, when only a miniscule part of the tenure of the contract has been performed and the remaining tenure of the contract is long. 27. Per contra, learned counsel for respondent No. 2 has relied upon the judgment of the Apex Court in the case of Union of India vs. Bharti Hexacom Ltd. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly between two tenderers and a mere difference in the prices offered is not a ground for a court to interfere as these are more in the nature of commercial disputes. The courts must bear in mind that any interference would delay the proposed project and even escalate the cost involved. The judgment of the Apex Court in the case of Afcon Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. and Anr. (2016) 16 SCC 818 is cited and it is argued that if the petitioner's plea is accepted it would be re-writing the tender conditions, which is not permitted in law. 31. We have heard learned counsel for the parties and examined the pleadings as well as the judgments cited by them. We may note here that the calculations and figures given by the respective parties are at variance with each other at certain places and we have culled out the calculations and the charts including the figures as they appear in the different pleadings. 32. We would firstly deal with 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 reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchaser finds that the duties and taxes have been mentioned incorrectly, it reserves the right to change it to the appropriate values and in that event, the price quoted by the tenderer will be adjusted accordingly. The clause also stipulates that if it is felt that the duties were mentioned incorrectly to gain unfair advantage, the tender would be liable to be rejected. The relevant clauses are quoted hereunder for ready reference: 2.10.1 The e-Tender shall be submitted online at Government of India's Central Public Procurement Portal, http://eprocure.gov.in. The tender shall be submitted in two covers. First cover will contain Technical Bid and Second cover will contain Price Bid. 2.10.2 Technical Bid i.e. first cover, shall, inter alia, contain the following: XXX XXX XXX (c) Tender Form as per Form-1 of Section X. XXX XXX XXX 2:10.3 Price bid shall be as per proforma given in Section VIII of the Tender document. It shall be ensured that Price bid is only submitted online. XXX XXX X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 actual performance of the videoscopes being offered. The price bid is determined in accordance with clause 2.29. Clause 2.29.1 provides that price bids of those tenderers would be opened, who are found technically suitable. Clause 2.29.2 provides the methodology for determining the lowest tenderer (L-1) and is of great significance to decide the main controversy involved in the present petition. We quote clause 2.29.2 hereinunder for a ready reference: "2.29.2 The lowest tenderer (L1) shall be determined on the basis of net cash outflow from the Purchaser in the first seven years after commissioning. Future cash flows for this purpose shall be converted into "net present values" by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 the proformas above would show that there are 7 columns which were to be filled by the tenderers under the Price Schedule. Insofar as the petitioner is concerned, the Price Schedule and CCAMC submitted by it is at page 93, and the Price Schedule of respondent No. 2 is at page 92, both of which are scanned and placed as below: 40. The petitioner has admittedly indicated the cost of the videoscope in the first row and has also quoted custom duty and GST. His total price of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght 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 so that there is no controversy on determining who the L-1 is. It is also a matter of fairness to all competing tenderers that no ambiguities or doubts or discrepancies remain in the price bids. If a tenderer is permitted to leave certain columns blank, this would be an open ended tender and it would be very easy for any tenderer to give its own interpretation to the price bid, post the opening of the price bids, depending on the level at which it is placed in terms of its total bid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld 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 because the actuals were not known they had levied 1% notional charge. This action of respondent No. 1 in our view is in the teeth of the judgment of the Apex Court in M/s Wipro Ltd. (supra) and the Circular issued by Central Board of Excise and Customs on 26.9.2017. Thus, this action of respondent No. 1 of adding the landing/loading charges at the rate of 1% on notional basis to the price of the petitioner, is illegal. We also find merit in the contention of the petitioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 CAMC Advance 3677208 1.3 2828622 4. 2nd Year CAMC Balance 3677208 1.41 2607949 5. 3rd Year CAMC Advance 3677208 1.41 2607949 6. 3rd Year CAMC Balance 3677208 1.54 2387797 7. 4th Year CAMC Advance 3677208 1.54 2387797 8. 4th Year CAMC Balance 367720 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the decision making process itself. However, where the selection or the rejecting in a tender matter is arbitrary, certainly the Court would interfere. In the words of the Apex Court the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation 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, 2019 they had imported the videoscopes from a Company in USA and learned counsel had orally submitted that substantial part has thus been performed and only commissioning remains. We may on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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