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TMI Blog2022 (1) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals against the same judgment and order dated 27.09.2021, as passed by the High Court of Delhi at New Delhi in Writ Petition (C) No. 6676 of 2021, have been considered together and are taken up for disposal by this common judgment. 2.1. By the impugned judgment and order dated 27.09.2021, the High Court has accepted the writ petition filed by the respondent No. 1 of these appeals (M/s. Resoursys Telecom- hereinafter referred to as 'the writ petitioner') and has disapproved the technical disqualification and consequential rejection of the technical bid of writ petitioner in respect of a tender floated by the appellant of the appeal arising out of SLP(C) No. 16672 of 2021 (Navodaya Vidyalaya Samiti - hereinafter referred to as 'NVS'). The appellant of the other appeal arising out of SLP(C) No. 16671 of 2021 (Agmatel India Pvt. Ltd. - hereinafter referred to as 'Agmatel') is said to be the bidder whose offer was accepted by NVS after technically disqualifying the writ petitioner. 3. The crux of the matter involved in these two appeals is as to whether the High Court has been justified in interfering with the view taken by the tender inviting authority, i.e., NVS, in rejection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xperience Criteria: In respect of the filter applied for experience criteria, the Bidder or its OEM {themselves or through reseller(s)} should have regularly, manufactured and supplied same or similar Category Products to any Central / State Govt Organization / PSU / Public Listed Company for number of Financial years as indicated above in the bid document before the bid opening date. Copies of relevant contracts to be submitted along with bid in support of having supplied some quantity during each of the Financial year. In case of bunch bids, the category of primary product having highest value should meet this criterion. ****** ***** ****** 4. Past Performance: The Bidder or its OEM {themselves or through re-seller(s)} should have supplied same or similar Category Products for 80% of bid quantity, This quantity requirement of 80% was admittedly reduced to 60% by way of a corrigendum issued by the tender inviting authority., in at least one of the last three Financial years before the bid opening date to any Central/State Govt Organization / PSU / Public Listed Company. Copies of relevant contracts (proving supply of cumulative order quantity in anyone financial year) to be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Laptops, Aadhar Kits, Printers, Power-bank, etc are not considered as same or similar category products of tablets." 7.1. The writ petitioner M/s. Resoursys Telecom, as also the said OEM Lava International Limited submitted further representations while maintaining that they were duly complying with the Past Performance clause of the tender document. The appellant-NVS stated in its response dated 01.07.2021 that they were procuring "Tablets" for learning management and the Technical Evaluation Committee ('TEC') has considered only "Tablets" under similar category 'to ensure proven products'. 8. At this juncture, we may take note of the facts emerging on record that the writ petitioner, in order to assert its fulfilment of the above referred Past Performance criterion, has relied upon the statements made by its OEM in the letter dated 16.04.2021, wherein the supplies made in the financial year 2019-2020 to Punjab Infotech, Directorate of Welfare of Scheduled Castes-Assam, Directorate of Welfare of Plain Tribes & Backward Classes-Assam, and Directorate of Women and Child Development Kerala were referred and it was also stated that they had received the biggest purchase order of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er inviting authority was the best person to interpret the terms of tender, and its decision could only be examined in case of it being arbitrary, biased or mala fide; and no such case being alleged, no interference was called for. The same contentions were urged on behalf of the impleaded party-Agmatel, while also raising the objection of jurisdiction. 11. While dealing with the rival contentions, the High Court of Delhi, after rejecting the contention on jurisdiction, formed the view that the product "Smart Phone" was definitely a similar category product as "Tablet"; and the tender inviting authority as also its TEC had been unjustified in giving a restrictive meaning to the terms of NIT; and if at all there was any ambiguity, the tender inviting authority cannot be left to the option of interpreting the terms contrary to their plain meaning. The High Court, therefore, proceeded to allow the writ petition and disapproved the rejection of technical bid of the writ petitioner. It shall be appropriate to summarise the relevant aspects of the reasons that prevailed with the High Court in allowing the writ petition. 11.1. The High Court took note of the contentions that the tender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vis-a-vis the product "Tablets". According to the High Court, the clause in question had been so worded as to provide maximum competition. These observations and findings of the High Court, forming the core of its decision, could be usefully reproduced as under: - "29. From the above, it would be seen that the author of the tender in question has consciously and repeatedly used the expression "Category" before the word "Product". Thus, the use of the expression "Category" is not inadvertent, or unintentional. Secondly, the author has also repeatedly used the words "same or similar" in relation to - not the product in question, but in relation to the category of products to which "Tablet" belongs. The use of the plural i.e. "Products", and not "Product" also shows that the author was conscious that within the same or similar category of products, there would be products other than "Tablets". Pertinently, the expression used is not "same products", or even "same Category Products". It is "same or similar Category Products". Firstly, the use of the word "Category" shows that not just the same product, but all products which fall in the same category which are covered. Thus, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo products are not "same". They may not even belong to the "same category" of products. However, merely because they are not "same", it does not mean that they do not belong to "similar category of products". 31. The terms of tender must receive the natural and commonly understood interpretation, which has been prevalent in the trade. What is prevalent in the trade has been demonstrated by the petitioner - by reference to the 5 tenders floated by different Government/ PSUs in different parts of the country for same/ similar products. 32. Applying the said test, can it be said that the respondent NVS could exclude smart mobile phones from the similar category of products, as Tablets? The answer is an emphatic "No". The Clause, intentionally, has been worded loosely in order to have maximum competition amongst bidders." 11.3. Thereafter, the High Court took note of the stand taken by NVS in its reply dated 01.07.2021 and that taken in the counter affidavit filed before the Court and observed that the TEC of NVS, on its own, had decided to curtail the competition by narrowing the scope of the eligibility criteria by taking only tablets as falling under "similar" category and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has forgotten the eligibility criteria set out in the NIT, which is, "same or similar category products", and not "same product" or even "similar products." 38. If that interpretation as given by the respondent NVS were to be accepted, the word "similar category of products" becomes a surplusage, which cannot be the intention attributed to the tender framing authority. 39. To arbitrarily and whimsically change the goalpost, and determine what can, and cannot, be considered a "similar product", at the time of evaluation of bids, disrupts the level playing field for bidders and extinguishes healthy competition. The respondents have argued that smartphones and tablets are separate products, and there can be no doubt about it. This is a no brainer. However, they don't say that these two products are not even falling under two different similar categories of products. 40. The restrictive interpretation given by the respondent NVS to the aforesaid tender conditions - not borne out from the tender terms and conditions, which would curb competition, does not find favour with the Court, in Public Interest. The whole purpose of issuing a tender is to invite maximum bids from bidders me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as they know what best is the requirement and how to achieve the same. (see Tata Cellular v. UOI (1994) 6SCC 651) However, the authorities cannot act arbitrarily, whimsically and contrary to the terms and conditions of the tender. As noticed hereinabove, the terms and conditions of the tender are clear. However, even if the terms of the tender are unclear and ambiguous, can it be left to the option of the tender floating authority to interpret it in a manner which is contrary to their plain meaning? The answer is "No"." 11.6. With the aforementioned reasons, findings and observations, the High Court proceeded to allow the writ petition and held the rejection of the technical bid of the writ petitioner as unreasonable and arbitrary, while holding that "Smart Mobile Phones" fall in "similar Category Products'. Accordingly, the High Court directed the appellant-NVS to process the technical bid of the writ petitioner and thereafter proceed in accordance with law. 11.7. Feeling aggrieved by the aforesaid judgment and order dated 27.09.2021, the tender inviting authority-NVS as also the bidder who is declared successful-Agmatel have preferred these appeals. Rival Submissions 12. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category products as "Tablets". It has further been argued that the terms were clear and none of the participating bidder found any ambiguity therein and hence, provided the requisite details of the supplies pertaining to "Tablets" only, except the writ petitioner. There was neither any ambiguity nor anyone asked for any clarification including the writ petitioner and only request was for reducing the past performance quantity from 80% to 40% whereupon, the quantity was reduced by corrigendum to 60%. The contention, thus, has been that everyone including the writ petitioner well understood the requirement in the past performance criterion as being that of supply of "Tablet" computers only. 12.3. It has further been submitted that the expressions "same" or "similar" category products in the tender condition were obviously in reference to different varieties and types of "Tablets", like Slate Tablets, Convertible Tablets, Hybrid Tablets, Phablets, Rugged Tablets, Tough Tablets, Booklet, Microsoft Surface, Amazon Kindle Fire, Surface Pro Tablet PC, iPad, iPad Air, iPad Pro, iPad Mini, Samsung Galaxy Tab, ThinkPad etc. 12.4. With reference to the decision of this Court in Afcons Infr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held by this Court in the case of Galaxy Transport Agencies v. New J K Roadways: 2020 SCC OnLine SC 1035. The learned senior counsel has further argued that the view taken by the tender inviting authority and its evaluation committee remains a reasonable view that "Smart Phones" are not similar to "Tablets". In this regard, the learned senior counsel has, apart from reiterating the categories specified on the online portal GeM, has also referred to the classification of "Tablet" computers by the Central Board of Excise and Customs under Section 151A of the Customs Act, 1950 while specifically noting that a "Tablet" computer is different from a "Smart Phone", as it is an automatic data processing machine classifiable under the heading 847130 and not 8517. Learned senior counsel has further referred to the fact that various other authorities have considered "Tablet" computers as computing devices similar to Laptops, PCs etc., while taking "Mobile Phones" under a different category. Thus, according to the learned senior counsel, there being a reasonable view taken by NVS and there being no mala fide or bias, there was no case for interference by the High Court. 14. While counterin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exercise its discretion to suit a particular bidder and to curb the competition on rather inconsistent grounds by attempting to distinguish between otherwise identical products. It is contended that when the tender inviting authority was conscious of the terms stated in a particular manner, it cannot be permitted to change such terms by way of interpretation to suit a particular bidder or by taking away the level playing field. The submission has been that "Smart Phones" and "Tablets" are rather synonymous terms and the stand of the appellants deserves to be disapproved. 14.3. It has also been submitted on behalf of the writ petitioner that in fact, it has been awarded another contract for supply of 3,00,000 tablets and it had been regularly supplying various electronic products, including tablets. 14.4. Yet further, it has been submitted that a caution was sounded by the Central Vigilance Commission ('CVC') to the effect that the terms of tender must be clear and ascertainable with specificity; and post facto interpretations must be avoided to bring in transparency in tendering matters. Thus, the learned counsel has supported the order impugned and submitted that the appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes. 52. In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818) 53. The High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL's interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a finding that the appellant committed illegality." (emphas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Orissa, (2007) 14 SCC 517, this Court noted: "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. 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. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach; 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 mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the present case and even otherwise, it has not been the finding of the High Court that the term stated by the tender inviting authority-NVS was lacking in certainty. However, beyond this, as to which particular product was to be treated as similar category product, could not have been a matter of interpretative exercise by the Court, particularly when the view taken by the tender inviting authority and its evaluation committee has not been shown to be absurd or irrational or suffering from mala fide. 20. It has also rightly been pointed out by the appellants, with reference to the decision in Afcons Infrastructure Limited (as extracted in the quotation hereinabove), that an interpretation by owner or employer of a project to the tender document may not be acceptable to the Constitutional Courts but that, by itself, would not be a reason for interfering with the interpretation given. In the aforesaid view of matter, the long-drawn exercise by the High Court on the dictionary meaning of the words and on semantics, in our view, had been entirely unnecessary. 21. The High Court has even proceeded to find the elements of similarity between "Smart Phones" and "Tablets" (vide par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly, depend on the purpose for which the procurement was being made; and the procuring party, i.e., the tender inviting authority, ought to be extended the latitude to decide on its requirements. 22. In the same context, we may also deal with another feature of this case related with the supplies made by the writ petitioner to different organisations pursuant to different tender notices. 22.1. As noticed, the writ petitioner, in order to assert its fulfilment of the above referred Past Performance criterion, has relied upon the statements made by its OEM in the letter dated 16.04.2021. That reads as under: - "PO details in FY 2019-20 (Single Year): Past Performance Clause Sr.No. Organisation Name PO & Completion Certificate Quantity (Units) 1 Punjab Infotech PICTC/IT eG/2019/ 2872 dated 25.11.2019 1,75,443 2 Director ate of Welfare of Scheduled Castes- Assam DSC./Spl.Grant/T B/539/2019/45 dated 06-02-2020 3809 3 Directorate of Welfare of Plain Tribes & Backward Classes- Assam DW/OTG./OBC/2 019-20/755/Pt- IX/16 dated 13- 01-2020 19047 4 Directorate of Welfare of Plain Tribes & Backward Classes- Assam DW/OTG./ST/201 9-20/754/Pt-VI/13 dated 13-01-2020 14285 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and smart phones, have been procured simultaneously while suggesting that these terms have even been used interchangeably. On the other hand, the appellant-NVS has stated in detail that the supplies of Tablets by the writ petitioner fell short by 10.20% to 60% criterion and the writ petitioner was, in fact, largely supplying smart phones and not tablets. As regards the organisations and their tender processes referred by the writ petitioner, various comments have been offered by the appellant-NVS in a tabular form; the relevant parts thereof read as under: - "Purchases/ Tenders referred by Resoursys Telecom through its WP no. 6676/2021 and additional affidavit filed therein Purchaser Purpose & Objectives Claim through the WP Reply of NVS HP State Electronics Development Corporation Ltd. (for Himachal Pradesh Govt.) Rate Contract for procurement of android based smartphones HP State Electronics Development Corp had placed smartphones & Tablets at par in the e-tender documents **Since, the referred tender was itself for smartphones, hence no compatibility and relevance with the subject matter which is the bid process of Tablet Computers. Guwahati High Court at Guwahati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Department of Education, Govt. of Bihar Expression of interest (EOI) for selection of agencies for supply and service of Elearning tablets. In the tender documents under clause 3.7.3, the criteria is mentioned that the bidder should be either OEM or authorized supplier of Mobiles/ Tablets. **It is Expression of Interest not a Tender. **Referred bidder has prepared the documents of bid as per their need, expertise and familiarity. However, NVS has floated the bid of procuring Tablet on GeM portal, Govt of India adhering to the all norms & provisions of bidding process. **Prequalification criteria are distinct from the NVS criterias. **Past performance criteria mentioned in clause 4 by NVS and criteria referred by the bidder under clause 3.7.3 are distinct. Govt. of Bihar, Rural Development Department Tender for procurement of Tablet and related accessories for BRDS under BIPS project Rural Development Department, Govt. of Bihar considered experience of products like tablet and smartphones under similar products. **The matter of NVS is distinct as no query was raised by the anyone of prospective bidders regarding inclusion of smart phones in past experience. **In the bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in this matter does not appear justified, particularly when no case of mala fide or bias is alleged. Every decision of the administrative authority which may not appear plausible to the Court cannot, for that reason alone, be called arbitrary or whimsical. The High Court, in the present matter has obviously proceeded with an assumption that the view as being taken by it, in acceptance of the case of the writ petitioner, was required to be substituted in place of the views of the tender inviting authority. That has been an error of law and cannot sustain itself in view of the consistent binding decisions of this Court, including the 3-Judge Bench decision in Galaxy Transport (supra). 24. The High Court, while supporting its process of reasoning, has referred to such principles which, with respect, we find entirely inapposite and beyond the periphery of the question involved in the present case. As noticed, in such matter of contracts, the process of interpretation of terms and conditions is essentially left to the author of the tender document and the occasion for interference by the Court would arise only if the questioned decision fails on the salutary tests laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich of the two interpretation is to be accepted? Obviously, to avoid such unworkable scenarios, the principle is that the author of the tender document is the best person to interpret its documents and requirements. The only requirement of law, for such process of decisionmaking by the tender inviting authority, is that it should not be suffering from illegality, irrationality, mala fide, perversity, or procedural impropriety. No such case being made out, the decision of the tender inviting authority (NVS) in the present case was not required to be interfered with on the reasoning that according to the writ Court, the product "Smart Phone" ought to be taken as being of similar category as the product "Tablet". 25. It has also been argued on behalf of the writ petitioner that the reasons for rejection by NVS have not been consistent. We are unable to find any inconsistency in the reasons assigned by the appellant-NVS in rejection of the bid of the writ petitioner. In the initial information, only this much was stated that there was a mismatch of technical specification but, when required further by the writ petitioner, the appellant-NVS elaborated, in its reply dated 29.06.2021, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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