Deepali Design and Exhibits P. Ltd. v. Union of India
2008-05-30
SIDDHARTH MRIDUL, T.S.THAKUR
body2008
DigiLaw.ai
JUDGMENT T.S. Thakur, J. 1. In this petition for a writ of certiorari, the petitioners call in question the allotment of a contract on a turn-key basis for making boarding and lodging arrangements and for erection of a convention hall and making other related arrangements for a "Convention of Presidents of Zila Parishads and Panchayat Samitis" to be held in Burari grounds, Delhi from the 22nd to 24th April, 2008. The case of the petitioners, in brief, is that the award of the contract for making the aforementioned arrangements for a convention that is scheduled to host as many as 10,000 participants is illegal inasmuch as respondent No. 2 was ineligible in terms of the conditions of the tender notice to submit a tender. It is also the case of the petitioner that the respondents had committed an irregularity in entertaining a tender on behalf of a consortium of three different concerns as the tender notice in question did not envisage the submission of bids by consortia. The short question that falls for consideration in the above backdrop is whether respondent No. 2 was ineligible to submit a bid in its own right and if it was, whether the bid submitted by it as a member of the consortium of three different concerns was in order and was rightly accepted. .2. In terms of a short term tender notice dated 29th February, 2008, the Ministry of Panchayati Raj, Government of India invited sealed tenders comprising technical and financial bids from reputed service providers for making comprehensive arrangements for various facilities, event management and overall co-ordination on turn-key basis for 10,000 persons including their boarding, lodging and erection of a convention hall with simultaneous interpretation facilities in connection with "Convention of Presidents of Zila Parishads and Panchayat Samiti" at Burari Grounds, Delhi scheduled to be held between 22nd and 24th April, 2008. The tender notice inter alia stipulated the conditions of eligibility for the bidders which included an average annual turnover of Rs. 10.00 crores or above for the past three years. Bidders were also required to submit an overall concept, layout, design and planning of the proposed event to the Ministry of Panchayati Raj.
The tender notice inter alia stipulated the conditions of eligibility for the bidders which included an average annual turnover of Rs. 10.00 crores or above for the past three years. Bidders were also required to submit an overall concept, layout, design and planning of the proposed event to the Ministry of Panchayati Raj. Three tenders, it appears, were received by respondent No. 1 in response to the said tender notice from the following three parties: .(1) Ashoka Reservations and Marketing Services (ITDC) .(2) ITE India Pvt. Ltd., Lajpat Nagar, New Delhi. (Respondent No. -2) .(3) M/s Deepali Designs & Exhibits Pvt. Ltd. Wazirpur, New Delhi. (Petitioner No. 1) 3. The tenders were opened by the Tender Opening Committee constituted for the purpose who analysed the same and prepared a comparative statement, but eventually came to the conclusion that none of the bidders were technically qualified. The Committee all the same was of the opinion that keeping in view the time constraints, it was not possible to re-tender the contract. It, therefore, decided to place the matter before a High Level Technical Committee for affording to the tenderers an opportunity to make their representations before the said Committee pending fulfillment of the conditions stipulated in paras 2 & 3 of the tender document by some of them. The relevant portion of the recommendation made by the committee were as under: 4. All the Technical Bid received from the above bidders have been analysed in the form of a statement as per Annexure. 5. Technical Bid Opening Committee has compared the Technical bids on the basis of specified technical and commercial criteria as per para-3 of the Tender document and also the requirements and technical specifications as given in Para-2 of the Tender Document. .6. As may be seen from the comparative statement/analysis, none of the following bidders can be recommended as technically qualified. .(a) M/s Ashoka Reservations & Marketing Services, ITDC, Sansad Marg, New Delhi. .(b) M/s ITE India Pvt. Ltd., Lajpat Nagar, New Delhi. .(c) M/s Deepali Designs & Exhibits Pvt. Ltd., Wazirpur, New Delhi. 7. The above facts were brought out before the vendors who gave undertakings that they would comply with the provisions at Paras-2 & 3 of the Tender document.
.(b) M/s ITE India Pvt. Ltd., Lajpat Nagar, New Delhi. .(c) M/s Deepali Designs & Exhibits Pvt. Ltd., Wazirpur, New Delhi. 7. The above facts were brought out before the vendors who gave undertakings that they would comply with the provisions at Paras-2 & 3 of the Tender document. Accordingly, this Committee while considering the fact that sufficient time is not available for re-tendering recommends that all the above vendors may be given an opportunity to make a presentation before the High Level Technical Committee, pending fulfillment of conditions of Paras-2 & 3 of the Tender Document. 8. On the basis of recommendations of the High Level Technical Committee and subj ect to fulfillment of all eligibility conditions as given in paras-2 & 3 of the Tender document, the price bid of eligible vendors will be opened by the Financial Bid Opening Committee. 4. The above recommendations were then considered by a High Level Technical Committee constituted for that purpose in a meeting held on 19th March, 2008 to decide the capability of the bidders organising the function. Each one of the above bidders was given an opportunity to make a presentation in support of their claim that they could organise the event and make all arrangements in relation thereto as required in the tender notice. Based on the said representations, the High Level Technical Committee came to the conclusion that the financial bids submitted by all the three parties could be opened subject to their providing an undertaking to the effect that they shall abide by whatever conditions the Ministry chose to impose upon them. Relevant portion of the recommendations made by the High Level Technical Committee reads as under: On the basis of presentations made by these three bidders on their strategies and technical proposal for organising the above mentioned event, the Committee recommends that taking all factors including the technical capabilities of the parties and the requirements of the Ministry of Panchayati Raj into account the financial bids submitted by all the three parties should be opened subject to their providing the undertaking in writing that they will abide by whatever conditionalities that the Ministry may chose to impose under the terms of the tender document. 5.
5. Consequently, each one of the tenderers were called upon to furnish an undertaking in writing that they would abide by the conditionalities that the Ministry of Panchayati Raj may choose to impose under the terms of the tender document which undertakings were duly furnished by each one of the three tenderers. The Financial Bid Opening Committee accordingly opened the financial bids of all the three parties on 20th March, 2008 at 11:00 AM in which respondent No. 2, M/s ITE India Private Ltd. was the lowest tenderer whereas the petitioners were the next lowest while M/s Ashoka Reservations and Marketing Services turned out to be the third lowest. The matter was then placed before the Negotiating Committee consisting of the Additional Secretary (RS), Additional Secretary (BKS), Joint Secretary (Administration), Deputy Secretary (Administration) and Under Secretary (B & F) on 20th March, 2004 at 4:00 PM to negotiate with the lowest bidder about the terms and conditions of the award of the contract and also to recommend the terms and conditions in its favour. These negotiations held by the Negotiating Committee with respondent No. 2 resulted in the imposition of certain additional conditions which were acceptable to the lowest tenderer. The Negotiating Committee accordingly recommended the allotment of the contract for comprehensive arrangements on turn key basis in favour of respondent No. 2, the lowest tenderer, subject to the additional conditions agreed to by the said tenderer. Relevant portion of the said recommendations reads as under: 3. After detailed discussions by the Negotiating Committee Members with the LI Vendor namely M/s ITE India Pvt. Ltd., LI agreed to the following additional conditionalities: Will provide accommodation, food and other care for Police Forces, NSS, NYKS Volunteers and supporting staff without any additional cost. Will provide fireproof material for accommodation, Convention Hall, reception office etc. as per Tender Document. Necessary consultation with the Housing Committee of the Ministry of Panchayati Raj will be done by M/s ITE India Pvt. Ltd in this regard. Will make provision for landscaping, gardening, waterfalls, etc. in order to provide an aesthetic ambience befitting the function at the Burari Camp site. Will provide necessary support to the Entertainment Committee with regard to arrangements for chairs, tables, drinking water, light refreshment etc. without any additional cost. Will provide manpower for providing services to the Delegates. Food-Health Committee of the Ministry of Panchayati Raj will decide the day-to-day menu.
Will provide necessary support to the Entertainment Committee with regard to arrangements for chairs, tables, drinking water, light refreshment etc. without any additional cost. Will provide manpower for providing services to the Delegates. Food-Health Committee of the Ministry of Panchayati Raj will decide the day-to-day menu. Will monitor the movements of the Delegates from their arrival at Delhi till their departure from the Burari Camp site. Will provide at the Reception Centre, adequate number of ACs and Computers will be provided and will also set up desks State-wise and provide Helpers services without any additional cost. Will abide by the suggestions of various Committees set up by the Ministry of Panchayati Raj. Will accept 30% advance of the total Contract value. The remaining amounts to be released stage-wise depending upon completion of works at the site as approved by the Ministry of Panchayati Raj. Will not propose any additional conditionalities apart from those indicated in the Tender Document and as further indicated above. 4. The Negotiating Committee after taking all relevant factors into consideration particularly the capability of M/s ITE Pvt. Ltd. recommends that the arrangements for the National Convention of the PRIs at Burari Camp site, Delhi may be placed on M/s ITE Pvt. Ltd. being LI Vendor at the basic cost of Rs. 11,10,19,216/- (Rupees Eleven Crore Ten Lakhs Nineteen Thousands Two Hundred Sixteen only)(Total cost after adding Taxes etc. is Rs. 12,47,41,190--Rupees Twelve Crore Forty Seven Lakhs Forty One Thousands One Hundred Ninety only) with the condition set out in the Tender Document and additional conditions as indicated at Para 3 above. Sd/-Shri B.K. Sinha Additional SecretaryMinistry of Panchayati Raj Sd/-Ms. Rajwant SandhuAdditional SecretaryMinistry of Panchayati Raj Sd/- Sd/- ShriP.K.Banerjee Shri S.K. Chakrabarti Under Secretary (Budget) Deputy Secretary (Admn.) Ministry of Panchayati Raj Ministry of Panchayati Raj Shri Avtar Singh Sahota Joint Secretary (Administration) Ministry of Panchayati Raj 6. The above recommendations were accepted and a work order dated 31st March, 2008 issued to respondent No. 2. A sanction order of even date was also issued by the Government of India, aggrieved whereof, the petitioner has filed the present writ petition challenging the validity of the same. 7. Appearing for the petitioners, Mr. Sandeep Sethi, learned senior counsel made a two-fold submission before us.
A sanction order of even date was also issued by the Government of India, aggrieved whereof, the petitioner has filed the present writ petition challenging the validity of the same. 7. Appearing for the petitioners, Mr. Sandeep Sethi, learned senior counsel made a two-fold submission before us. Firstly he contended that in terms of the conditions of eligibility stipulated in the short tender notice issued by respondent No. 1, no bidder who did not have an average annual turnover of Rs. 10 crore for the period of three years in the past was eligible to submit a bid. Since respondent No. 2 did not have the requisite turnover, it was obvious that the bid submitted on its behalf could not be entertained or considered. Allotment of the contract in favour of respondent No. 2 was according to the learned Counsel wholly improper and in violation of the terms of the tender notice. Alternatively, it was submitted by Mr. Sethi that the tender notice did not envisage or permit submission of tenders by a consortia. Inasmuch as respondent No. 1 had permitted a consortium to submit a tender and allotted the work in its favour, it had violated the terms of the tender notice which in turn rendered the entire process illegal. 8. On behalf of the respondents, it was on the other hand argued by Messrs Sandeep Aggarwal and Rajiv Bansal that the tender notice issued by respondent No. 1 did not forbid the submission of a tender by a consortium. The decision making process culminating in the allotment of the contract in favour of respondent No. 2 was, according to the learned counsel, fair and transparent and did not violate any fundamental or other right of the petitioner whose bid was also evaluated like that of respondent No. 2 while making an order of allotment. It was also contended that the petitioner had consented to the procedure adopted by respondent No. 1 in the matter of evaluation of the bids and could not therefore turn around and make a grievance after respondent No. 2 was successful in begging the contract on account of its being the lowest tenderer. The petitioner had, according to the learned counsel, taken a chance and having failed to emerge as the lowest tenderer, turned around to question the entire process which was not legally permissible. 9.
The petitioner had, according to the learned counsel, taken a chance and having failed to emerge as the lowest tenderer, turned around to question the entire process which was not legally permissible. 9. We have given our careful consideration to the submissions made at the bar. The tender notice issued by respondent No. 1, as already noticed earlier, invited tenders for arrangements to be made on a turn-key basis for the forthcoming Convention of Presidents of Zila Parishads and Panchayat Samitis in which a relatively large number of participants are expected to turn up for deliberations. The bids received from the three bidders in response to the said tender notice were upon evaluation found to be all technically non-compliant. In the ordinary course, the Government would have invited the tenders afresh on the same terms and conditions as stipulated earlier or on modified terms. The Technical Bid Opening Committee, however, was of the view that re-tendering was not an option keeping in view the time constraint and that each one of the bidders could be given an opportunity to make a presentation about their capabilities to undertake the work in question. That decision was not questioned by either the petitioners or any of the other tenderers understandably for the reason that the said decision favoured each one of the parties who had submitted the tender. Each one of them thus became eligible to stay in the race for allotment of the contract on account of the recommendations made by the Technical Bid Opening Committee. This implied that none of the bidders could accuse the other of being ineligible as all the three were given a fair opportunity to make their presentations, meaning thereby that the High Level Technical Committee before whom the said presentations were to be made were to finally decide as to which, if any of the three tenderers, should be taken as technically qualified. The High Level Technical Committee, pursuant to the said decision, evaluated the presentations made by all the three parties and took a decision to declare each one of them as technically qualified. Even at this stage, the petitioner did not make any grievance against the decision of the High Level Technical Committee to open the financial bid submitted by respondent No. 2. It took a chance hoping to emerge as the lowest bidder once the bids are opened.
Even at this stage, the petitioner did not make any grievance against the decision of the High Level Technical Committee to open the financial bid submitted by respondent No. 2. It took a chance hoping to emerge as the lowest bidder once the bids are opened. The opening of the bids, however, did not throw up the petitioner as the lowest bidder. On the contrary, it was respondent No. 2 who emerged as the lowest bidder hence entitled to be given the contract in the absence of any rational reason to warrant denial. It was only then that the petitioner appears to have for the first time submitted a letter pointing out that the bid offered by respondent No. 2 could not be considered as the tender notice did not permit a consortium of three companies competing for the tender. What is important is that in the letter, the grievance made by the petitioner was more for the benefit of other tenderers who may not have come forward to compete rather than on its own behalf. The letter inter alia stated that other tenderers in the market who have been left behind on account of conditions of eligibility should not have been kept in the dark as they would also have bid for the job and in which event the respondent would have got many other options before it. The letter reads: To, 20-03-2008 The Additional Secretary,,br>Ministry of Panchayati Raj, Sardar Patel Marg, New Delhi. Sub: Selection and fulfillment of eligibility criteria. Dear Sir, We wish to submit as under: 1. That you have invited the tender for overall event management and co-ordination of Zila Parishad Heads for which you set out an eligibility criteria without the fulfillment of which either people didnt tender at your place as they had to be selected on the fulfillment of such criteria. 2. However, it has come to our notice that one of the tenders ITE India Pvt. Ltd. is short of most of the eligibility criteria and still it is being considered for the financial bid. 3. We feel it is illegal and unjustified to all those tenderers in the market who have been left behind due to not fulfilling the eligibility criteria.
3. We feel it is illegal and unjustified to all those tenderers in the market who have been left behind due to not fulfilling the eligibility criteria. If the eligibility was not to be fulfilled, then why so many people were kept in dark, had this not been the case they would have also bid for the job, and you could have got so many more options. 4. Ministry of Panchayati Raj should immediately ask for fulfillment of eligibility criteria from ITE India Ltd. failing which they should be rejected outrightly before opening of the financial bid, or we will be forced to take the matter to the court of law in public interest. Regards, For Deepali Design & Exhibits Pvt. Ltd. Sd/-Vinay Mittal Director. 10. It is evident from the above that the petitioners did not have any grievance regarding the bid by a consortium having been considered and an allotment made in its favour. The petitioners did not allege that the procedure adopted by respondent No. 1 was in any way discriminatory vis-a-vis the petitioners herein who were given a fair chance to compete and had indeed competed for the work but lost. Whether or not others would have come forward and if so, whether the same would have improved the situation is a matter in the realm of speculation which cannot be made a basis for undoing a process that has been validly concluded and in which the petitioner before us has not suffered any prejudice or disadvantage. At any rate, the petitioner had acquiesced in the procedure adopted by the Government and taken a chance of getting a favourable order in its favour. It cannot therefore turn around to question that procedure once it finds that it has lost the race. The petitioner cannot be allowed to approbate and reprobate. It cannot merrily go along the process of evaluation and the procedure adopted and start complaining once that process leads to a decision unfavourable to it. 11. Apart from what we have stated above, we find that the Government have, on the basis of the presentations made to the High Level Technical Committee, declared all the three ineligible bidders to be eligible and recommend their financial bids. If the three bidders were found to be ineligible, the Government had the option of either re-tendering the contract or relaxing the conditions of eligibility stipulated by it.
If the three bidders were found to be ineligible, the Government had the option of either re-tendering the contract or relaxing the conditions of eligibility stipulated by it. The option of re-tendering the contract could not be exercised on account of the time constraints. The Government therefore exercised the other option of relaxing the conditions of eligibility. Such a relaxation was in our opinion implicit in the decision recorded by the High Technical Committee declaring all the three ineligible bidders to be eligible. Turn over of the bidders thereby became wholly irrelevant. The petitioners went along this process and were present at the time of opening of the bids without raising a little finger against the declaration of Respondent No. 2 as an eligible bidder. Such being the position, it cannot make any grievance against the allotment of the contract to Respondent No. 2 after it is found to be the lowest tenderer. 12. The argument advanced on behalf of the petitioner that the bid document did not permit the submission of a bid by a consortium was never urged either before the Re-opening Committee or before the High Technical Committee. At any rate, the legal effect of declaring all the three bidders to be eligible was the relaxation of the condition of eligibility. This would mean that even if the allotment of the work was to be taken as having been made only in favour of Respondent No. 2 and not the consortium, it would still be valid. The Government have however taken the bid submitted by respondent No. 2 as a bid by the consortium of three companies, namely, M/s ITE India Pvt. Ltd., M/s Interads Group and M/s Shyam Telecom. Apart from Respondent No. 2, the other two companies have also given an undertaking to the Government that they would be jointly and severally bound by the contract allotted in their favour and responsible for the liabilities arising from any breach thereof. In the circumstances, therefore, and keeping in view the fact that the association of the other two members of the consortium would not in any manner jeopardise public interest in the matter of the performance of the contract or in the matter of the price at which the contract was allotted, we see no real prejudice either to public interest nor any illegality so patent as to warrant interference by this Court.
The legal position in regard to interference by writ courts in matters involving award of contracts is settled by a long line of decisions rendered by the Supreme Court. Reference may in this regard be made to the decision of the Supreme Court in Air India Ltd. v. Cochin International Airport Ltd.: (2000) 2 SCC 617 . The court has in that case observed that interference with the award of a contract is warranted only in furtherance of overwhelming public interest and not just because some defect is found in the decision making process. The Court should keep larger public interest in mind in order to decide whether its intervention is called for or not and interfere only when it comes to the conclusion that overwhelming public interest requires such interference. The following passage from the said decision is in this regard instructive: The award of 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 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, is 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, is 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.
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. 13. The decision of the Supreme Court in R.D. Shetty v. International Airport Authority of India and Ors. MANU/SC/0048/1979 : AIR 1979 SC 1628 relied upon by Mr. Sethi does not in our view state a contrary proposition of law. At any late, most of the above decisions have been considered by their lordships of the Supreme Court in Cochin International Airports case (supra). 14. In the result, there is no merit in this petition which fails and is hereby dismissed but in the circumstances without any order as to costs. Petition Dismissed