Research › Search › Judgment

Bombay High Court · body

2000 DIGILAW 901 (BOM)

Nicassio Corporation General Contractors v. Municipal Corporation of Greater Mumbai & others

2000-12-22

B.P.SINGH, S.RADHAKRISHNAN

body2000
JUDGMENT - B.P. SINGH, C.J.:---Rule returnable forthwith. Heard Counsel for the parties. 2. The petitioners, Nicassio Corporation "General Contractors", have challenged the decision of the Standing Committee of respondent No. 1, the Municipal Corporation of Greater Mumbai, dated 21st July, 2000 accepting the recommendation of award of work to respondent No. 5, M/s. MURTCO, Inc., whereby the Standing Committee of respondent No. 1 Corporation awarded to respondent No. 5 the contract for the tender work in question, viz., Rehabilitation of Sewer Lines by Pipe Bursting Method Contract No. SO-CA-03. The decision of the Standing Committee has been challenged mainly on the ground that respondent No. 5, M/s. MURTCO, Inc., failed to meet the eligibility criteria in the tender documents, particularly Clause 5.4 thereof, which required that to qualify for award of the contract the bidder should have, in the last five years upto 31st March, 1999, achieved in any two years a minimum annual financial turnover of USD 1 million, equivalent to Rs. 43 million; should have satisfactorily, as prime contractor, executed at least one contract of rehabilitation using Pipe Bursting Method for a minimum length of 500 meters of sewers of diameter ranging from 150 mm to 300 mm; and should have successfully completed rehabilitation of sewers of non-man entry size using particular pipe bursting method proposed in the bid, for an aggregate length of at least 1000 meters in any one year. The conditions also required the bidder to furnish certificate from the particular pipe bursting technology provider and the detailed information giving the name and address of the owner-client supporting the claim. 3. A few facts, not in dispute, may be noticed. The Municipal Corporation of Greater Mumbai, respondent No. 1 herein, by their invitation to tender dated 6th August, 1999 (Exhibit 'A') invited sealed bids from eligible bidders for the "Rehabilitation of Sewers Lines by Pipe Bursting Method (SO-CA-3)". The invitation to bid mentioned the fact that respondent No. 1 Corporation has received a loan/credit from the International Bank for Reconstruction and Development (IBRD)/International Development Association (IDA) towards the cost of the Bombay Sewage Disposal Project of which Rehabilitation of Sewers Lines by Pipe Bursting Method (SO-CA-3) was a part. The construction period was 18 months, and approximate length 2800 meters. It further provided that in accordance with the guidelines specified by the World Bank, bidding would be conducted through the international competitive bidding procedures. The construction period was 18 months, and approximate length 2800 meters. It further provided that in accordance with the guidelines specified by the World Bank, bidding would be conducted through the international competitive bidding procedures. The bids were to be delivered on or before 11th October, 1999, which was later extended to 12th November, 1999. 4. The petitioners as well as other bidders obtained the tender documents, and submitted their bids in time. The project being a project funded by the World Bank, M/s. TTI Consulting Engineers, Sydney, Australia, were appointed as independent consultants as per the directives of the World Bank for the purpose of evaluation of the tenders. Five bids were received in response to the invitation to bid, which were reviewed and evaluated by the aforesaid consultants. By their Report dated 20th January, 2000, the consultants evaluated the five bids out of which four were found to be responsive, including the bids of the petitioners and respondent No. 5. The bid of M/s. Brel Case Ltd., which was financially second lowest, was not recommended, being non-responsive. M/s. TTI Consulting Engineers recommended the acceptance of the bid of respondent No. 5 herein, M/s. MURTCO Inc., being the lowest, responsive bid. The Evaluation Report dated 20th January, 2000 was accepted by respondent-Corporation, and the same was communicated to the World Bank. The World Bank conveyed its no objection on 2nd February, 2000 to process the award of contract. Thereafter, the Tender Committee of respondent-Municipal Corporation, consisting of the Deputy Municipal Commissioner, the Deputy Chief Accountant and four Chief Engineers, considered the bid documents and the report and the recommendations of M/s. TTI Consulting Engineers, and at its meeting of 9th February, 2000, unanimously accepted the said report. As per the procedure, the Deputy Chief Engineer (Sewerage Operations) (P C) initiated the draft letter to the Municipal Secretary setting out the relevant matters for seeking approval of the Standing Committee. The Chief Engineer (Sewerage Operations), signed the draft letter as a token of approval on the 9th March, 2000. 5. According to the petitioners, pipe bursting is a technology developed by British Gas Technology, Inc. (British Gas,' for short'), and they are the only patent holders in the world for pipe bursting Technology. British Gas issues licences to contractors to do pipe Bursting jobs, for which they have to pay royalty to British Gas. 5. According to the petitioners, pipe bursting is a technology developed by British Gas Technology, Inc. (British Gas,' for short'), and they are the only patent holders in the world for pipe bursting Technology. British Gas issues licences to contractors to do pipe Bursting jobs, for which they have to pay royalty to British Gas. Thus, no pipe bursting job can be awarded to any contractor without the knowledge of British Gas, as it was incumbent on any party which seeks to carry out any pipe bursting contract to enter into a licence agreement with British Gas and pay royalty to British Gas in respect of any pipe bursting contract, since British Gas hold the patent. The petitioners, being licensees of British Gas, as aforestated, furnished the necessary information and documents in support of its bid. According to the petitioners, M/s. TTI Consulting Engineers of Australia, the consultants, appointed to scrutinise the tender documents and to evaluate the responsiveness of the tenders, failed to call upon either the petitioners or respondent No. 5 to provide Certificate of the Technology Provider for substantiating the claim of having completed the required quantum of work, as is stipulated in the tender. Though M/s. TTI Consulting Engineers found the tenders of the petitioners as well as of respondent No. 5 to be responsive, they recommended the case of respondent No. 5 for award of the said work. The petitioners do not dispute the fact that the evaluated bid price of respondent No. 5 was lower than that of the petitioners. It is the case of the respondent-Corporation that, whereas the evaluation bid price of respondent No. 5 was Rs. 3,23,84,088 (13% above the estimated cost), the evaluation bid price of the petitioners was Rs. 4,53,78,040.70 (59% above the estimated cost), there being a difference of 46% between the evaluation bid price of respondent No. 5 and the petitioners. According to respondent-Municipal Corporation, the Tender Committee in its meeting held on 9th February, 2000 unanimously recommended the lower offer of respondent No. 5, since the Committee found that the bid of respondent No. 5 met the minimum qualifying criteria as specified in the bid document, as per the tender conditions, World Bank guidelines and the recommendation of the independent consultants in their Evaluation Report. On the other hand, the case of the petitioners has been that the 5th respondent did not meet the qualifying criteria designated in Clause 5.4 (a), (ii) and (iii) of the tender documents. 6. According to the petitioners, the 1st respondent, by letter dated 17th April, 2000 addressed to Mr. Jim Hopwood of British Gas Company, requested information on the number of works and the length of each work completed by the 5th respondent as well as other particulars. It is the case of the petitioners that respondent No. 5, at the time of submission of the tender, had not filed a Certificate of the Technology Provider, as required. According to the petitioners, British Gas, being aware of the fact that the petitioners had bid for the tender, called for the tender conditions from the petitioners which was furnished by the petitioners immediately. After perusal of the same. British Gas, by their letter dated 18th April, 2000, intimated that the 5th respondent did not meet the qualifying criteria as designated in Clause 5.4(a), (ii) and (iii) of the tender documents. The said letter dated 18th April, 2000 has been annexed as Exhibit 'C' to the writ petition. It appears that strengthened by the letter of British Gas dated 18th April, 2000, the petitioners wrote several letters to respondent-Corporation as well as to the World Bank, calling upon them to conduct an enquiry into the matter of the 5th respondent not having complied with the terms and conditions of the tender documents. 7. The case of respondent-Municipal Corporation is that the complaints made by the petitioners were thoroughly examined by the Deputy Municipal Commissioner (Engineering), the Additional Municipal Commissioner (Projects) and the Municipal Commissioner. The World Bank had also passed on the complaints made by the petitioners to respondent-Corporation with a suggestion that the contract shall be awarded to the bidder whose bid was found to be substantially responsive and whose offer was at lowest evaluated cost. Though by proposal dated 11th May, 2000, some of the officers had suggested that the subject-matter be re-considered, the Deputy Municipal Commissioner (Engineering) examined the proposal and the suggestions made therein, and came to the conclusion that no interference was called for. The matter was again examined by the Additional Municipal Commissioner (Projects), and he agreed with the observations of the Deputy Municipal Commissioner (Engineering). The matter was again examined by the Additional Municipal Commissioner (Projects), and he agreed with the observations of the Deputy Municipal Commissioner (Engineering). Ultimately, the matter was considered by the Municipal Commissioner, who examined the issue in detail, and cleared the proposal. 8. Since the petitioners felt that their just claims were being ignored for award of contract, they filed Writ Petition No. 1265 of 2000 before this Court. The said writ petition was disposed of by a Division Bench of this Court by order dated 11th July 2000. Since the matter was yet to be considered by the Standing Committee of respondent-Municipal Corporation, the writ petition was disposed of with a direction to respondent-Corporation to place the matter before the Standing Committee. It was directed that all the relevant material, including the report of M/s. TTI Consulting Engineers, the certificates, etc., produced by the rival parties in support of their respective claims, should be placed before the Standing Committee. The Standing Committee, after taking into consideration all the relevant facts and circumstances, was directed to take a final decision in the matter. The Court observed that while taking a final decision in the matter, the Standing Committee should be made aware of all the relevant facts and circumstances, including the objections raised by the petitioners to the eligibility of respondent No. 5. In fact, it was indicated in the order itself that the petitioners contended that respondent No. 5 was not eligible for award of Contract, inasmuch as it did not fulfil condition No. 5.4(a)(i), (ii) and (iii) of the terms and conditions of the tender, inasmuch as it had no certificate from the particular Pipe Bursting Technology Provider, as required. 9. The Standing Committee of respondent Corporation, at its meeting held on 21st July, 2000, considered all the material placed before it, and thereafter approved the proposal of the Municipal Administration to award the contract to respondent No. 5. The decision of the Standing Committee has again been challenged in the instant writ petition. 10. Dr. Tulzapurkar appearing on behalf of the petitioners has assailed the decision of the Standing Committee on the ground that the Standing Committee has failed to notice that the 5th respondent did not meet the qualifying criteria as designated in Clause 5.4(a), (ii) and (iii) of the tender documents. 10. Dr. Tulzapurkar appearing on behalf of the petitioners has assailed the decision of the Standing Committee on the ground that the Standing Committee has failed to notice that the 5th respondent did not meet the qualifying criteria as designated in Clause 5.4(a), (ii) and (iii) of the tender documents. We may, at this stage, refer to Clause 5.4 of the tender documents, which reads as under :--- "Clause 5.4 :--- Minimum Qualifying criteria (i) Clause 5.4(a) :---to qualify for award of the contract, each bidder in its name should have in the last five years upto 31-3-1999 i.e. : from 1994-95 to 1998-99 : (i) achieved in any two years a minimum annual financial turnover (in all clauses of Civil Engineering Construction only) of USD 1 million, equivalent to Rs. 43 million ; (ii) satisfactorily as prime contractor executed at least one contract of rehabilitation using Pipe Bursting Method for a minimum length of 500 meters of sewers of diameter ranging from 150 mm to 300 mm; (iii) should have successfully completed rehabilitation of sewers of non man entry size using particular pipe bursting method proposed in the bid, for an aggregate length of at least 1000 meters in any one year. Certificate from the particular pipe bursting technology provider and the detailed information giving the name and address of the owner client should be furnished to support the claim." (i) Clause 5.4 (note) :--- Even though the bidders meet the qualifying criteria they are subject to be dis-qualified if they have made misleading or false representations in the forms, statements and attachments submitted in proof of the qualification requirements." 11. When the earlier writ petition filed by the petitioners was heard, their Counsel, Dr. Tulzapurkar, had strenuously urged that the certificate provided by respondent No. 5 from the technology provider was not valid, inasmuch as the certificates were given by the two companies which could not grant such certificates. According to him, British Gas, being the patent holder for the Pipe Bursting Technology, was the only company which could have granted the certificate required under the tender documents. The respondents had strongly refuted the contention contending that the certificates submitted by respondent No. 5 from M/s. Vermeer Sales and Service, Inc. and M/s. Earth Tool Company LLC as the Pipe Bursting Technology Providers, were valid certificates and, in fact, admittedly, M/s. Vermeer Sales and Service, Inc. The respondents had strongly refuted the contention contending that the certificates submitted by respondent No. 5 from M/s. Vermeer Sales and Service, Inc. and M/s. Earth Tool Company LLC as the Pipe Bursting Technology Providers, were valid certificates and, in fact, admittedly, M/s. Vermeer Sales and Service, Inc. did possess the requisite licence from British Gas, though that was not a qualifying condition. Even though British Gas possess the patent for the Pipe Bursting Technology, it was not a condition that the certificate should be provided by British Gas only, or that the technology provider should have patent rights. It was further submitted that British Gas had patents for some of the states in U.S.A., but neither British Gas nor any other technology provider have patent rights in their/its technology in Asia. The fact is that the tender documents do not refer to British Gas as the technology provider. It was also pointed out that M/s. Vermeer Sales and Service, Inc. are licensees to manufacture the equipment for the Pipe Bursting Process. Obviously, without complete knowledge of the technology, M/s. Vermeer Sales and Service, Inc. could not manufacture the equipment for the Pipe Bursting Process. The certificates granted by these two companies were scrutinised by the independent consultants, and they did not find fault with the certificates issued by these two companies. The independent consultants were the best persons to consider such technical aspects of the matter, and their opinion could not be faulted on the ground urged by the petitioners. Moreover, the requirement of Clause 5.4(a) (iii) is that the tenderer should submit the certificate from the technology provider, and detailed information giving the name and address of owner client supporting the claim. There is nothing in this clause to infer, as the petitioners seek to do, that the technology provider must also certify the extent of work done. That can be certified only by the client on whose behalf work has been executed, which was done. 12. When the instant writ petition was heard, Counsel for the petitioners submitted that on the complaint made by the petitioners, the matter was reviewed by the Evaluation Committee, and by its report dated 11th May, 2000, the Committee opined that the 5th respondent did not meet the eligibility criteria. 12. When the instant writ petition was heard, Counsel for the petitioners submitted that on the complaint made by the petitioners, the matter was reviewed by the Evaluation Committee, and by its report dated 11th May, 2000, the Committee opined that the 5th respondent did not meet the eligibility criteria. According to the petitioners, some time towards the end of May, 2000, the 5th respondent obtained certificates of M/s. Vermeer Sales and Service, Inc. and M/s. Earth Tool Company LLC, and forwarded the same to the 1st respondent. This fact became apparent on perusal of the report dated 11th May, 2000, which does not speak of any certificate of M/s. Vermeer Sales and Service, Inc. or M/s. Earth Tool Company, LLC. as the technology provider. It was, therefore, submitted that the tender submitted by respondent No. 5 was non responsive, inasmuch as the necessary particulars have not been furnished, and respondent No. 5 had failed to produce the Certificate of Technology Provider to substantiate the claims under Clause 5.4(a) (ii) and (iii) of the tender document, and thus failed to comply with the condition of the tender. This submission proceeds on the basis that the certificates, if any, were submitted for the first time after the 11th May, 2000, the date on which the Evaluation Committee submitted its report, finding respondent No. 5 ineligible. 13. Respondent-Corporation, on the other hand, submitted that the necessary certificate and information had been furnished by respondent No. 5, as required by the terms and conditions of the tender documents. M/s. TTI Consulting Engineers, the independent consultants, as well as the Municipal Administration had considered the documents produced at the time of submission of the bid. On the basis of the documents submitted, the Corporation found that the 5th respondent had carried out rehabilitation work using Pipe Bursting Process to the extent of 457 and 610 meters in 1994, 915 meters in 1995 and 1098 meters, 1402 meters and 1098 meters in 1998. It has also been affirmed in the affidavit filed on behalf of respondent-Corporation that respondent No. 5 carried out work to the extent of more than 1000 meters non man entry in the year 1994-95 to the extent of 1067 meters and in the year 1998-99 3598 meters. It has also been affirmed in the affidavit filed on behalf of respondent-Corporation that respondent No. 5 carried out work to the extent of more than 1000 meters non man entry in the year 1994-95 to the extent of 1067 meters and in the year 1998-99 3598 meters. The documents were submitted by respondent No. 5, and the same were considered by M/s. TTI Consulting Engineers, the consultants, as well as the Municipal Administration. Reliance has been placed on Annexure 10 to the report of M/s. TTI Consulting Engineers. It is, therefore, denied that the said respondent produced such certificates after 11th May, 2000. 14. It is stated that in their letter dated 26th April, 2000, the petitioners have themselves alleged that the 5th respondent had produced documents which were not genuine. This completely belies the assertion of the petitioners that respondent No. 5 had not produced the documents at the time of submitting its bid. It is, therefore, submitted that the Standing Committee has committed no error in accepting the report of the consultants, which was subsequently examined by the Tender Committee consisting of experts. Subsequently, on the complaints lodged by the petitioners, the matter was re-considered by the authorities, viz., the Deputy Municipal Commissioner (Engineering), as also the Municipal Commissioner. In fact, even the Chief Engineer (Sewerage Operations), who had written letter dated 17th April, 2000 and prepared the note dated 11th May, 2000, put his initials to the draft letter, which had been sent to the Municipal Secretary with a view to seeking approval of the Standing Committee. 15. The Municipal Corporation, on our request, produced before us the original tender documents submitted by respondent No. 5, the two certificates issued by M/s. Vermeer Sales and Service, Inc. and M/s. Earth Tool Company LLC, dated 5th October, 1999 and 4th October, 1999, respectively. Respondent No. 5 has also submitted a statement showing the quantities of work executed by the contractor in the last 5 years. 16. In their rejoinder, the petitioners have challenged the veracity of the claim of the respondent No. 5 of having executed works of the nature specified by pointing out the deficiencies in the particulars supplied by them. In paragraph 12 of the rejoinder, reference is made to the particulars furnished by respondent No. 5 and they are described as "highly suspect" and not being in accordance with the prescribed programme. In paragraph 12 of the rejoinder, reference is made to the particulars furnished by respondent No. 5 and they are described as "highly suspect" and not being in accordance with the prescribed programme. They have referred to the various certificates obtained and produced by respondent No. 5, but have criticised the same as lacking in particulars. It will thus appear that the case of the petitioners is not that no material was produced by respondent No. 5 to substantiate its claim of having done work of the specified nature to the extent required. Their case appears to be that the material produced and the particulars furnished were wrongly accepted by the consultants and by the Municipal administration. 17. In a case of this nature, this Court, in exercise of writ jurisdiction, will refrain from examining such matters, particularly when a reputed international consultant is appointed to evaluate the tenders as per the directives and guidelines of the World Bank. Their evaluation of the tenders, which includes an examination of the tender documents furnished, is entitled to great weight. Their evaluation cannot be faulted merely on the ground that, according to the petitioners, the material placed was not credible, and should have, therefore, been rejected. Not only the independent, international consultant, but also the Committee of the Municipal Corporation consisting of experts, have found that the materials furnished by respondent No. 5 fulfilled the requirements of the tender. Such technical matters are best left to the judgment of expert bodies, particularly when no malice is alleged against them. We have found no arbitrariness or unreasonableness in the action of such expert bodies. Even if it is assumed that another view is possible, or that the decision of the expert may suffer from an error or judgment, not actuated by malice or ulterior considerations, this Court, in the exercise of its writ jurisdiction, will not substitute its opinion for that of independent technical experts, or interfere with their decision in the absence of malice or patent arbitrariness or unreasonableness, particularly so if the larger public interest does not suffer. 18. 18. We are, therefore, satisfied that the bid of respondent No. 5 cannot, in the facts and circumstances of the case, be said to be non responsive, particularly when it had been scrutinised by independent consultants of international repute, having regard to the guidelines laid down by the World Bank, and confirmed by the technical experts of the Municipal Corporation. 19. Counsel for respondents No. 1 to 4 rightly placed reliance upon the judgment of the Supreme Court in (Air India Ltd. v. Cochin International Airport Ltd.)1, J.T. 2000(1) S.C. 481, and submitted that, having regard to the principles laid down in the aforesaid judgment, this is not a fit case in which this Court should, in writ jurisdiction, interfere with the decision of the Standing Committee. In particular, reliance has been placed on the following passage in the said judgment where, after referring to the authorities on the subject, the Supreme Court observed :--- "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 (sic) are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its Corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. 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 process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene." 20. Having regard to all the facts and circumstances of the case, we find no good ground to interfere with the decision of the Standing Committee of respondent-Corporation. This writ petition is, accordingly, dismissed. Rule discharged. Writ petition dismissed. -----