RITHWIK PROJECTS LTD. v. ORISSA MINING CORPORATION LTD.
2009-12-24
I.M.QUDDUSI, SANJU PANDA
body2009
DigiLaw.ai
JUDGMENT : I.M. Quddusi, A.C.J. 1. This Writ Petition has been filed by the Petitioner against the rejection of his technical bid on technical ground. 2. Tenders were invited by the Orissa Mining Corporation for undertaking the existing Departmental Iron Ore Mining & Associated Work of Orissa Mining Corporation Ltd. at Daitari Iron Ore Mine (DIOM) in the district of Keonjhar, Orissa on BOT (Build, Operate & Transfer) basis vide Specification No. 1/BOT/OMC/MAT/08 for a period of 10 years. The last date for submission of tender paper was 21.1.2009 but later on it was extended to 9.2.2009. The Petitioner company submitted its tender along with others. 3. The objective of the bidding process as mentioned in clause 3.1 of the tender document is to identify the Contractor to enhance the iron are production up to the Rated Capacity from the mine & OHP & to carry out the other associated activities under BOT basis. It was mentioned in Clause 3.7 that the OMC, inter alia, seeks to select a competent, experienced & capable party or a consortium of parties with the necessary technical experience & financial strength for carrying out the works. Clause 5 of the Bidding Document deals with description of the bidding process. Relevant portion of the same is reproduced as under: 5.1 Single stage bid process shall be followed for selection of the Preferred Bidder. Bidders are required to submit their proposals with the following two sets of documents: i) Documents relating to establishing the qualification of the Bidder in terms of the Qualifying Criteria set out in this RFP ("Qualification Proposal), ii) Price proposal ("Commercial Proposal") for the works. The method of submission is explained in Clause 8.12 of this RFP. 5.2 The evaluation of the Proposals would be carried out in two stages: Qualification Stage: The first stage would involve the following two checks: a. Responsiveness Check: this shall be carried out by ascertaining whether the Bidder has followed the instructions provided in the RFP or not, & whether the information sought as per Clause 8.0 of this RFP is provided or not. OMC reserves the right to call for additional/supplemental information, if need be; b. Technical & Financial Check: Bidders shall be evaluated for qualification on their Technical Experience & Financial Capability, based on the Qualifying Criteria specified in Clause 6.0 of this RFP.
OMC reserves the right to call for additional/supplemental information, if need be; b. Technical & Financial Check: Bidders shall be evaluated for qualification on their Technical Experience & Financial Capability, based on the Qualifying Criteria specified in Clause 6.0 of this RFP. The Commercial Proposals of the Bidders who do not qualify at the Qualification Stage shall not be opened. II. Commercial Proposal Stage: Commercial Proposals of the Qualified Bidders would be opened. The Bidder with the lowest Commercial Proposal shall be declared the Preferred Bidder ("Preferred Bidder"). OMC shall issue the Letter of Intent (Lo/) to the Preferred Bidder, subject to Clause 7.3". Clause 6.2 of the Bid Document deals with Technical Experience which is as under: 6.2 Technical Experience : The Bidder must fulfill following two technical requirements: i. Bidder should have successfully carried out (in any one of the latest three Financial Years): 1. Mining/raising of an aggregate quantity of 1.0 million tones of major minerals/ore, with at least one work being for a minimum of 0.60 million tones. Bidders should note that overburden shall not be considered for this purpose, 2. Major mineral/ore handling/processing of an aggregate quantity of 1.0 million tones, with at least one work being for a minimum of 0.60 million tones. For this purpose, throughput capacity shall be considered. Provided that one handling plant should have included crushing unit, screening, unit & conveying unit. Clause 8.0 deals with submission of Proposal by Bidder. Qualification proposal is mentioned in Clause 8.1. Clause 8.1.1 reads as under: 8.1.1: Bidder shall submit the Qualification Proposal with the following documents: 1. Cover Letter (As per Envelope-1; Appendix 1) 2. Earnest Money Deposit in form of a Bank Guarantee (As per Envelope 1: Appendix 2) 3. Power of Attorney in favour of Authorized Signatory (As per Envelope-1: Appendix 3). In case of a Building Consortium, such Power of Attorney shall be provided by each Member of the Bidding Consortium 4. Details of the Bidder (As per Envelope-1: Appendix 4) 5. Format for Undertaking required under Clause 7.1 of this RFP (As per Envelope-1 :Appendix 5) 6. Joint Deed Agreement (in case of Bidding Consortiums) (As per Envelope-1: Appendix 6) 7. Information on Technical Experience (As per Envelope-1: Appendix 7(A) & 7(B) 8. Information on Financial Capability (As per Envelope-1: Appendix 8) 9.
Format for Undertaking required under Clause 7.1 of this RFP (As per Envelope-1 :Appendix 5) 6. Joint Deed Agreement (in case of Bidding Consortiums) (As per Envelope-1: Appendix 6) 7. Information on Technical Experience (As per Envelope-1: Appendix 7(A) & 7(B) 8. Information on Financial Capability (As per Envelope-1: Appendix 8) 9. Audited Annual Accounts of Bidder for latest three Financial Years (As per Envelope-1; Appendix 9) 10. Business Plan of the Bidder for the Works (As per Envelope-1: Appendix 10) The same should not exceed 5 pages. 11. Original RFP Documents issued by OMC to the Bidder, signed & sealed on each page, to be returned to OMC. Bidder must exercise caution not to fill the Commercial Proposal format provided in this RFP. The Commercial Proposal must be submitted separately in Envelope-1(B) & 2(B) as per clause 8.12.3 of this RFP. 4. A perusal of the above clause would indicate that the bidder shall submit the documents mentioned therein with the tender. We are concerned here with the document mentioned at Sl. No. 3, i.e. Power of Attorney in favour of Authorised Signatory (As per Envelope-1 : Appendix 3). in case of a Bidding Consortium, such Power of Attorney shall be provided by each Member of the Bidding Consortium. It is to be noticed that the word 'shall' has been used. The format of Power-of-Attorney has been given in Appendix-3) which is quoted as under: Format for Power of Attorney. (for Signing the proposal & related documents, such as Joint Deed Agreement). (In case of a Bidding Consortium, to be given by each Member of the Bidding Consortium). (On the stamp paper of appropriate value. To be notarized)." Know all men by these presents, we __________ (name & address of the registered office of Bidder/Member of Bidding Consortium) do hereby constitute, appoint & authorize Mr./Ms.
(In case of a Bidding Consortium, to be given by each Member of the Bidding Consortium). (On the stamp paper of appropriate value. To be notarized)." Know all men by these presents, we __________ (name & address of the registered office of Bidder/Member of Bidding Consortium) do hereby constitute, appoint & authorize Mr./Ms. ________(name & residential address) who is presently employed with us & holding the position of, as our or lawful attorney, to do in our name & on our behalf, all such acts, deeds & things necessary in connection with or incidental to our Proposal for the Works under the Bid Specification No. 1/BOI\T/OMC/MAT/08, initiated by OMC, including signing & submission of all necessary documents/letters/agreements, & providing information/responses to the OMC, representing us in all matters before OMC, & generally dealing with OMC in all matters in connection with our Proposal for the Works under the Bid Specification No. 1/BOT/OMC/MAT/08. We hereby agree to ratify all acts, deeds & things lawfully done by our said attorney pursuant to this Power of Attorney 4 that all acts, deeds & things done by our aforesaid attorney shall & shall always be deemed to have been done by us. (For (name of Bidder/Member of Bidding Consortium). (Signature of the executant) (Name, Title & Address) Accepted (Signature of Authorized Signatory of each Member of Bidding Consortium) (Name, Title & Address) (Common Seal of Bidder/Bidding Consortium Member) Perusal of the aforesaid indicates that the proforma requires that common seal of Bidder or Bidding Consortium Member should be affixed. Therefore, it is mandatory to affix the common seal of the Company on the Power of Attorney in favour of the authorized signatory. Further Clause 8.11 describes regarding 'Common Seal', which is also necessary to be quoted: 8.11 Common Seal 8.11.1 The Bidders must enclose its Common Seal on the following documents: Power of Attorney (Envelope-1: Appendix 3) Joint Deed Agreement (Envelope-1: Appendix 6) (to be enclosed by each Member of Bidding Consortium. Each page of Commercial Proposal (Envelope-2: Appendix 1). 8.11.2 The Bidders should note that in absence of Common Seal on the above documents, the Proposal shall be rejected by OMC. Clause 8.11.2 shows that the common seal is necessary to be affixed on the Power of Attorney (As per Envelope-1; Appendix-3) & according to Clause 8.11.2 in the absence of Common Seal on the documents, the proposal was to be rejected.
Clause 8.11.2 shows that the common seal is necessary to be affixed on the Power of Attorney (As per Envelope-1; Appendix-3) & according to Clause 8.11.2 in the absence of Common Seal on the documents, the proposal was to be rejected. Here also the word 'shall' has been used meaning thereby & there is no room of doubt that in absence of the common seal, the proposal will not be taken into consideration. Thus, from the above mentioned mandatory condition, it is clear that in absence of common seal on the power of attorney, the proposal was definitely to be rejected. 5. Shri Ashok Parija, Learned Senior Advocate appearing for the Petitioner-company, has submitted that the provision of common seal is mentioned in Section 48 of the Companies Act & if the common seal was not affixed on the documents, the defect was curable. He has also pointed out that the Orissa Mining Corporation had sent a letter earlier to the Petitioner-company on 28.2.2009 seeking certain clarifications in respect of inconsistencies found in the proposal. At that time, they had not mentioned that there was absence of the common seal. He has placed reliance on the decision of the Apex Court in the cases of Probodh Chandra Mitra Vs. Road Oils (India) Ltd. and Others Raunaq International Limited Vs. I.V.R. Construction Ltd. and Others, & Panchanan Dhara and Others Vs. Monmatha Nath Maity (Dead) thr. L.Rs. and Another, . 6. With regard to the clarification in respect of inconsistencies found in the proposal & not mentioning at that time about the defect of common seal, submitted by Shri Ashok Parija as mentioned above, Shri Sanjit Mohanty, Learned senior advocate for the O.M. C, in reply has submitted that the documents which were annexed to the tender papers were not checked as before making scrutiny of the same it was necessary to first intimate the participants to remove such deficiencies which were curable but since the fact of affixing the common seal over the power-of-attorney was not to be checked at that time, the same was not checked & only after the participants removed the curable deficiencies, scrutiny of documents annexed to the tender papers were made.
Shri Mohanty further submitted that affixing the common seal of the bidder/Bidding Consortium Member below their signature on the power-of-attorney was a mandatory condition, which was not curable later on, i.e., after submission of tender papers Lachmi Narain and Others Vs. Union of India (UOI) and Others Ramana Dayaram Shetty Vs. International Airport Authority of India and Others M/s. G. J. Fernandez Vs. State of Karnataka and others Kanhaiya Lal Agrawal Vs. Union of India (UOI) and Others, & Laxmi Sales Corporation Vs. Bolangir Trading Company and Others, . In the case of Raunaq International Ltd., (supra) the offer of Raunaq International was accepted on account of the price advantage to the Maharashtra State Electricity Board, its offer being the lowest & in view of the adequate experience which Raunaq International possessed having completed similar work in other 210 MW thermal power stations. This was done by relaxing the qualifying criterion in view of Clause 1.4 of the tender notice. M/s. IVR Construction filed a Writ Petition in Bombay High Court which stayed the operation of the letter of Intent dated 20th July, 1995 issued to M/s. Raunaq International Ltd. On appeal, the Supreme Court allowed the appeal & set aside the interim order passed by the High Court. The Apex Court held that the relaxation which the Board had granted to Raunaq International was on valid principles looking to the expertise of the tenderer & his past experience although it does not exactly tally with the prescribed criteria. What is more relevant is that, M/s. IVR Construction Ltd. which had challenged the award of tender themselves do not fulfil the requisite criteria. They do not possess the prescribed experience qualification. Therefore, any judicial relief at the instance of a party which does not fulfil the requisite criteria seems to be misplaced. So holding, the Apex Court allowed the appeal & set aside the interim order granted by the High Court. In this case, while considering the qualification criteria of the tenders, the authority concerned preferred Raunaq International to IVR Construction which also did not fulfil the prescribed criteria. In the present case, the bid of the Petitioner was not considered at the qualification stage because the Power-of-attorney which was mandatorily required did not contain the common seal of the bidder/bidding consortium. Therefore, the decision in Raunaq International (supra) is of little assistance to the Petitioner.
In the present case, the bid of the Petitioner was not considered at the qualification stage because the Power-of-attorney which was mandatorily required did not contain the common seal of the bidder/bidding consortium. Therefore, the decision in Raunaq International (supra) is of little assistance to the Petitioner. The decision in Panchanan Dhara (supra) emanated from a suit for specific performance of contract for sale. In that case Respondent No. 2 had entered into a contract with Respondent No. 1 to sell certain property held & possessed by the Company. The Company instituted a suit against some persons who were claiming title over the said property. Respondent No. 1 issued several letters to Respondent No. 2 to register & execute the sale deed & the company had been assuring Respondent No. 1 that it would do so. However, on 21.8.1985 the Company refused to execute & register the sale deed in favour of Respondent No. 1 on the plea that the same was barred by limitation. Thereafter a suit for specific performance of contract was filed. Panchanan Dhara, the Appellant, filed a caveat in the said suit stating that during the pendency of the suit it had purchased the property in question. In that suit one of the contentions raised by Appellant was that the agreement for sale was not enforceable as the provisions of Sections 46 & 48 of the Companies, Act had not been complied with. The Trial Court held that as all the Directors of the Company were parties to the agreement, the provisions of Sections 46 & 48 of the Companies Act were not attracted. The Apex Court held that contract was executed in the name of the Company. All the five Directors executed the agreement. Execution of the agreement was not denied before the. Courts below. Therefore, the Apex Court held that even In the absence of the resolution the contract could not have been held to be invalid or illegal. As regards the putting of Company Seal, no doubt, the Apex Court held as under: So far as the question of putting up of the seal of the Company is concerned, it is a relic of the days when medieval barons, who could not read or write, used their ring to make a characteristic impress.
As regards the putting of Company Seal, no doubt, the Apex Court held as under: So far as the question of putting up of the seal of the Company is concerned, it is a relic of the days when medieval barons, who could not read or write, used their ring to make a characteristic impress. Even in the absence of a seal, the Company may still be held to be liable having regard to the nature of transaction & the authority of those who had executed it. If the act of the Directors is not ultra vires or no public policy is involved, the parties acting thereupon cannot be left at large. In that case the Court had the evidence of the Directors before it who did not deny the execution of the agreement. In such circumstances absence of the seal of the Company on the agreement was held to be not fatal having regard to the nature of transaction & the authority of those who had executed it Here the tender specifically required that the power of attorney in favour of the authorized signatory should contain the common seal of the bidder/bidding consortium. 7. Let us have a look at the decisions pressed into service by the Learned Counsel for the Opp. Parties. In Ramana v. I.A. Authority of India, the Apex Court held as under: Now, there can be no doubt that what para (1) of the notice prescribed was a condition of eligibility which was required to be satisfied by every person submitting a tender. The condition of eligibility was that the person submitting a tender must be conducting or running a registered IInd Class hotel or restaurant & he must have at least 5 years' experience as such & if he did not satisfy this condition of eligibility, his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by the 1st Respondent & since the 4th Respondent did not satisfy this standard or norm, it was not competent the 1st Respondent to entertain the tender of the 4th Respondent. It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged & it must scrupulously observe those standards on pain of invalidation of an act in violation of them.
It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged & it must scrupulously observe those standards on pain of invalidation of an act in violation of them. In Kanhaiya Lal Agrawal (supra) the conditions in the tender notice required that the rates at which supply was to be made had to be stated in words as well as in figures against each item of work as per Schedule attached there to; that the tenders submitted with any omissions or alteration of the tender document were liable to be rejected; however, permissible corrections could be attached with due signature of tenders; that the tenders should hold the offer open till such date as may be specified in the tender which was for a minimum period of 90 days from the date of opening of the tender; that contravention of the conditions would automatically result in forfeiture of security deposit; that the tender was liable to be rejected for non-compliance of any of the conditions of the tender form. In that case the Appellant made his offer of concessional rates along with the tender while Respondent No. 5 made such offer after opening of the tenders. So the Railway Administration accepted the offer of the Appellant. In that case the Apex Court held that what the Appellant offered was part of the tender itself while Respondent No. 5 made such offer separately & much later &, therefore, there was nothing illegal or arbitrary on the part of the Railway Administration in accepting the offer of the Appellant. In Laxmi Sales Corporation (supra), the conditions in the tender was that the intending tenderer should furnish the documents mentioned in the tender & specially proof of turnover for the relevant year latest profit & loss account duly certified by a Chartered Account evidencing the annual turnover, proof of work experience for the last two years with full details & supporting documents & the check list had specifically mentioned that the production of proof of turn over with latest profit & loss account duly certified by a Chartered Accountant was a mandatory requirement.
The High Court had come to the conclusion that production of the documents mentioned in the tender notice along with the tender form was not mandatory & that neither the rules & conditions governing the tender nor the advertisement calling for tender made it mandatory for an intending tenderer to produce those documents & specially proof of turn over for the relevant year. The Apex Court set aside such conclusion holding that the High Court was not justified in coming to such conclusion which was contrary to record & was an error apparent on the face of record. 8. Clause 8.1.1 of the tender notice required that the bidder shall submit among other documents the Power-of-Attorney in favour of Authorised Signatory & in case of Bidding Consortium, such power-of-attorney shall be provided by each Member of the Bidding Consortium. The format of power-of-attorney requires Common seal below the signature of the authorized signatory. Clause 8.11.1 requires that the bidders must enclose its common seal on the documents mentioned therein including the Power of attorney. In Clause 8.11.2 a note of caution was administered that in absence of common seal on the documents mentioned therein, the proposal shall be rejected by OMC The Apex Court in the case of Lachmi Narain v. Union of India (supra) held that if the legislative intent is expressed clearly & strongly in imperative words, such as the use of 'must' instead of 'shall' that will itself be sufficient to hold the provision to be mandatory. We are therefore of the opinion that affixing the common seal on the Power of attorney was mandatory in absence of which the proposal is liable to be rejected. 9. It is a well settled law that the Court cannot interfere with the policy decision or norms but it can interfere with the decision making process on the ground of malafide, unreasonableness or arbitrariness. Since in this case, this Court has not found any fault in the decision making process & is also of the opinion that any condition imposed in general cannot be relaxed in case of any individual or participant in the tender, relaxing the condition applicable in general in case of any particular participant would amount to discrimination violative of Article 14 of the Constitution of India.
Therefore, relaxation regarding affixing of common seal on the power-of-attorney which was applicable to all cannot be given in case of the Petitioner & the Petitioner cannot claim any right for getting such relaxation. 10. In view of the above, we are of the opinion that in the absence of the common seal on the power of attorney if the Opposite Parties have rejected the qualification proposal of the Petitioner, no illegality can be said to have been committed by them. Therefore, no case for interference under Article 226 of the Constitution has been made out. The Writ Petition, therefore, fails & is dismissed. Sanju Panda, J. 11. I agree. Final Result : Dismissed