Zakini Biotech Pvt. v. Government of Karnataka Department of horticulture lalbagh Bangalore
2010-12-10
MOHAN M.SHANTANAGOUDAR
body2010
DigiLaw.ai
Judgment : The petitioner has sought for the following reliefs by filing this writ petition. “(a) Issue a writ of mandamus, thereby prohibiting the Respondent No.1 to consider the Financial Bid of Respondent No.2 as Per-Acre basis and further direct the Respondent No.1 to consider the Bids as per the terms and conditions in the Request for Proposal document & clarification provided by the Respondent No.1 in serial No.15 in the pre bid meeting dated 30/04/2010 in the interest of justice and equity. (b) Forebear the Respondent No.1 from treating the Financial Bid of the Respondent No.2 as Bid Per-Acre Basis as against the Annual Payment to be paid for the entire Farm with regard to Mallasandra Kaval horticultural Farm, Nagamangala Taluk, Mandya District, in the interest of justice and equity. (c) Pass such other orders as this Hon’ble Court deems fit in the interest of justice and equity.” The 3rd respondent issued notice inviting proposals for development of horticultural farms at 18 locations in Karnataka under PPP framework (i.e., Public Private Partnership framework) as per Annexure-‘A’ to the writ petition. The petitioner bid for two farms out of 18 locations i.e., (1) Mallasandra Kaval Farm, Nagamangala Taluk, Mandya District for 621 acres and (2) Purigali Farm, Malavalli Taluk, Mandya District for 140 acres. However, he did not press his application in respect of Purigali Farm later. The petitioner was one of the 14 qualified persons in the technical bid. So also, the 2nd respondent bid for certain locations including Mallasandra Kaval Farm and Purigali Farms, among others. His was also qualified in technical bid. However, the financial bid of the petitioner is not accepted and whereas, the financial bid of the 2nd respondent was accepted. Questioning the same, this writ petition is filed for the aforementioned reliefs. This writ petition is concerned only with Mallasandra Kaval Farm, Nagamangala Taluk. 2.
His was also qualified in technical bid. However, the financial bid of the petitioner is not accepted and whereas, the financial bid of the 2nd respondent was accepted. Questioning the same, this writ petition is filed for the aforementioned reliefs. This writ petition is concerned only with Mallasandra Kaval Farm, Nagamangala Taluk. 2. Sri Ravi Varma Kumar, learned Senior Counsel appearing on behalf of the petitioner submits that, as per Clause 3.5 of the Project Information Memorandum (i.e., PIM), the extent available for development was only 500 acres in Mallasandra Kaval Farm; that as per Clauses 1.2.6, 1.2.7; 2.2.3; and 2.2.4 of Request For p Proposal (i.e., RFP), the financial bid should consist only of annual payment to be paid to the respondent No.3 for development of horticultural farms at 18 locations notified; that the petitioner bid by quoting the amount relating to annual payment for the entire area of 500 acres; that after opening of the financial bid on 20th July 2010 by respondent ano.3, it was found that the amount was bid on per acre basis by few of the bidders including respondent No.2 and that respondent No.3 has sought for an undertaking on a plain sheet of paper to state that their respective bids were per acre basis as against the annual payment for the entire area; that the petitioner has bid as per the provisions of RFP and has bid for a total amount of Rs.74,52,00,000/- for 500 acres of Mallasandra Kaval Farm as annual payment; that the petitioner issued a letter to the 1st respondent on 22.7.2010 regarding irregularities committed by the respondent No.3 in seeking for clarification in the form of an under taking after the financial bids were opened and requested respondent No.1 to look into the serious deviations; that respondent No.1 replied to the petitioner’s aforementioned letter on 24.7.2010 stating that Clause 6.2(b) of RFP empowers them to seek clarification and additional information from the bidders at any point of time; that such an explanation of respondent No.1 as found in the reply is erroneous, inasmuch as, the respondent No.1 has misinterpreted Clause 6.2(b) of RFP; that in the pre-bid meeting dated 30.4.2010 (vide Annexure-‘H’) a query was specifically asked at Sl.No.15 as to whether5 “under Schedule-5, the financial bid to be quoted for one acre on the notified area of the farm?”., that the response of the respondent No.3 was “No. The financial bid is the annual payment to be paid for the entire area of the farm in accordance with Schedule-5 of PDIA (i.e., Project Development and Implementation Agreement)”; and that in view of the above, the invitation extended to 2nd respondent and others for negotiations discarding the petitioner’s claim is illegal and the same is against the law.
3. The sum and substance of the arguments addressed on behalf of the petitioner is that (a) the area notified in respect of Mallasandra Kaval Farm is 500 acres and not 621.2 acres, (b) that the action of the respondents 1 and 3 in seeking clarification from the bidders to clarify as to whether the bidders have quoted the amount on per acre basis or for the entire area of the farm to be developed, is illegal and arbitrary. 4. Sri K.G.Raghavan, learned Senior Counsel appearing on behalf of respondent No.2 submits that, no where in the tender document it is specified that the amount to be quoted by the bidders should be for the entire area to be developed and not per acre; that the word ‘annual payment’ does not mean that the annual payment to be made is to be specified for the entire area and not per acre; that the clarification sought for by respondents 1 and 3 is in accordance with Clauses 3.1.3 and 6.2(b) of RFP; that pursuant to such clauses, the clarifications were sought for by the respondent No.3 prior to opening of the bids to verify as to whether the bidders have quoted the amount on per acre basis or for the entire area; that Rule 23(3) of Karnataka Transparency in Public Procurement Rules, 2000 (hereinafter referred to as ‘the Rules’ for short) also gives power to the authority to seek clarification during evaluation of the tenders; that the clarification given by the authority at the pre-bid meeting held on 30th of April 2010 is only with regard to Schedule-5, which pertains to payment schedule contained in PDIA (Project Development & Implementation Agreement) and does not relate to financial bid contained in Appendix-IX of RFP; that the Appendix-IX contains format for financial bid and the same does not in any way reveal that the annual payment should be quoted for the entire area and not on per acre basis; and that therefore, the clarification given by the authority in the pre-bid meeting will not help the contention of the petitioner. 5.
5. Sri Raghavendra Prasad, learned counsel appearing on behalf of 3rd respondent submits that the writ petition itself is not maintainable for the present, inasmuch as, the same is pre-mature; that the entire tender process is not complete, inasmuch as, the matter is still at the level of the State Government for taking decision in the mater; that merely because respondent No.2 is a preferred bidder, it cannot be said that the process is complete; that the petitioner can have recourse to filing of statutory appeal after completion of the entire process under Section 16 of Karnataka Transparency in Public Procurements Act, 1999; that the bid of the petitioner should be treated as nonresponsive bid, inasmuch as, the petitioner himself has contended before this Court that he has bid for 500 acres and not for 621.2 acres; that the Power Point Presentation of the petitioner clearly reveals that the petitioner very much understood that the area notified was 621.2 acres and not for 500 acres; that neither the petitioner nor anybody raised any objection on 20th July 2010 i.e., at the time of authority seeking clarification from the bidders to verify as to whether the amount quoted is on per acre basis or for the entire area; that the clarification was sought for by the 3rd respondent prior to opening of the bids that the petitioner chose to object for the action of the 3rd respondent seeking clarification from the bidders only on 22.7.2010 i.e., after two days after seeking clarification. 6. In reply, learned counsel appearing for the petitioner submits that, PDIA comes into picture after finalization of the tender i.e., at the time of entering into an agreement with the successful bidder and consequently, Schedule-V found in PDIA has no relevance prior to finalization of the tender and consequently, the pre-bid clarification issued by the 3rd respondent relates only with regard to the financial bid and not with regard to payment schedule. It is further argued that Rule 23 (2) of Rules may be applicable and not Rule 23 (3) of the Rules. 7. Having heard the learned advocates on both sides, this Court is of the opinion that the following points arise for consideration in this writ petition.
It is further argued that Rule 23 (2) of Rules may be applicable and not Rule 23 (3) of the Rules. 7. Having heard the learned advocates on both sides, this Court is of the opinion that the following points arise for consideration in this writ petition. (a) Whether the area notified for development is 500 acres or 621.2 acres?’ (b) Whether the respondents 1 and 3 are justified in seeking clarification from the bidders to verify as to whether the amount quoted by the bidder is on per acre basis or for the entire area notified? (c) Whether the 3rd respo9ndent is justified in treating the financial bid of the 2nd respondent as responsive bid, inasmuch as, the respondent No.2 has quoted the amount per acre and not for the entire area? And (d) Whether such action amounts to altering the tender conditions substantially? At the out set it may be mentioned that the writ petition itself is pre-mature, inasmuch as, the tender process is not finalized. The financial bid is opened and in the said process, the bid of 2nd respondent is finalized and consequently he is the preferred bidder. The matter is still pending consideration before the State Government. Till the finality is reached, the writ petition is not maintainable. Added to it, Section 16 of the Karnataka Transparency Act, provides for approaching the appellate authority by filing the appeal after completion of the tender process. 8. Be that as it may, since this Court heard the matter in detail, the matter is decided on merits also. 9. Re: Point No.1 : The learned counsel appearing for the petitioner by relying upon Clause 3.5 of Project Information Memorandum (PIM) submits that the area notified for development is 500 acres and not 621.2 acres as sought to be contended by the respondents. As aforementioned, the same is controverted by learned counsel appearing on behalf of the respondents. Clause 1.1.1 of RFP provides details of all the 18 farms notified and the areas proposed for PPP. Mallasandra Kaval Farm is at Sl.No.5. The area proposed is 621.2 acres. Clause 5 of Schedule-II annexed to PDIA reveals that the area for project is 621.2 acres and undeveloped area is also 621.2 acres. Clause 4.1 of PIM also contains the table containing the land details relating to the farms proposed.
Mallasandra Kaval Farm is at Sl.No.5. The area proposed is 621.2 acres. Clause 5 of Schedule-II annexed to PDIA reveals that the area for project is 621.2 acres and undeveloped area is also 621.2 acres. Clause 4.1 of PIM also contains the table containing the land details relating to the farms proposed. In the said clause also, the area mentioned is 621.2 acres in respect of Mallasandra Kaval Farm. Clause 3.5 of PIM makes it amply clear that the area proposed for PPP is 621.2 acres spread out in S.No.9, 10 & 11 of Mallasandra village. It is also clarified therein that a total area of 500 acres would be considered as a total area for any new development, inasmuch as, the mango trees and cashew nut trees found in the area in question are totally unproductive; which means that the 3rd respondent having felt that mango trees and cashew nut trees found in the area are totally unproductive, proposed that the area of 500 acres can be used for any new development other than maintaining mango trees and cashew nut trees. That does not mean that only 500 acres is proposed for PPP. It is also relevant to note that the petitioner himself has bid for 621.2 acres and not for 500 acres. Certain of the extracts of the Power Point Presentation made by the petitioner are produced by respondent No.3 along with the statement of objections. In its Power Point Presentation, the petitioner itself has clarified that the PPP area is 621 acres on more than one occasions. While marking the area in question, the petitioner has marked the area in rd colour and the area mentioned is 621.2 acres. While giving the land requirement details for the proposed activities, the petitioner in its presentation has stated as to how 600 acres could be used by it and as to how the balance area could be used for drainage, water harvesting, canal irrigation system etc., From the above, it is amply clear that the area proposed is 621 and odd acres and not 500 acres as sought to be contended by the petitioner. It is also clear from the above that the petitioner has also bid for 621.2 acres and not for 500 acres. 10. Re: Point Nos.2, 3 & 4 : In order tyo avoid repetition, point Nos.2, 3 and 4 are considered together.
It is also clear from the above that the petitioner has also bid for 621.2 acres and not for 500 acres. 10. Re: Point Nos.2, 3 & 4 : In order tyo avoid repetition, point Nos.2, 3 and 4 are considered together. As aforementioned, it is the contention of the petitioner that the bidders were required to quote the price on annual payment basis in respect of the entire area proposed. The said sub mission is controverted by the respondents by contending that the tender document no where mandates that the annual payment to be quoted by the bidders should be for the entire area and not on per acre basis. Learned Advocates appearing on behalf of petitioner and respondents rely upon Clauses 1.2.6 and 2.2.4 of RFP in support of their respective contentions. It is no doubt true that the aforementioned clauses clearly reveal that the bids were invited for the project on the basis of the highest annual payment to be paid to the authority by the developer during the agreement period and that annual payment shall constitute sole criteria for evaluation of the bid. Clause 1.2.6 of RFP clearly mentions that the term “highest bidder” means, the bidder who has offered the highest annual payment. Clause 2.2.5 of RFP mandates that, if any condition or clarification or stipulation contained in the notification is not complied with, the bid is liable to be rejected as non-responsive bid. Thus, form the above, it is clear that the tenderers will have to quote the annual payment amount in their respective bids and the person quoting the highest annual payment would be selected, inasmuch, as he would be treated as a highest bidder. But, these clauses not where reveal that annual payment should be quoted for the entire area proposed. Clauses also do not state that the annual payment should be quoted on per acre basis. Thus, the aspect as to whether quoting of figure relating to the annual payment is on the basis of per acre or for the entire area is not clarified and consequently the same is kept open. The word “annual payment” does not mean that the payment should be for the entire area proposed. The annual payment is the payment to be made by the highest bidder annually i.e., for every 12 months.
The word “annual payment” does not mean that the payment should be for the entire area proposed. The annual payment is the payment to be made by the highest bidder annually i.e., for every 12 months. Thus, the words “annual payment” cannot be interpreted to mean that the annual payment should be quoted by the bidder for the entire area. Even if the annual payment amount is quoted per acre, the same may be multiplied by number of acres at the time of consideration of the financial bids. 11. In this regard, clarification was sought by the 3rd respondent during the proceedings prior to opening of financial bids as is clear from Annexure-‘R-8’ produced along with the statement of objections by respondent No.3. Paragrap-4 of the proceedings of the meeting reads thus: “4. Before opening any of the bids, the Committee sought clarifications from other bidders present if they had made their financial quotes on per acre per annum basis. Seven of the fourteen bidders who were qualified for the financial bid opening stage namely Belur Farms, Malnad Estates, Greens Organics India Pvt. Ltd., Clean Foods, Prakruthi Products Pvt. Ltd., and Oddoor Farms had made their submission of the financial quotes on per acre per annum basis. Accordingly, the seven bidders submitted undertaking to the Committee that they had quoted per acre per annum and would abide by the same annual payment (derived by multiplying the per acre per annum number with the area of the farm as set out under Schedule 2 of the agreement) prior to opening of their financial bids.” From the above, it is clear that before opening of any of the bids, the Selection Committee sought clarification form the bidders present to know as to whether they have made their financial quotes on per acre per annum basis or for the entire area proposed. Seven out of 14 bidders, including respondent No.2, clarified that they have submitted their financial quotes on per acre per annum basis. Accordingly, seven bidders, including respondent No.2, submitted a written undertaking to the Committee to the effect that they have quoted the amount on per acre per annum basis and would abide by the said annual payment derived by multiplying with the total acres i.e., area of farm set out in Schedule-II of the agreement.
Accordingly, seven bidders, including respondent No.2, submitted a written undertaking to the Committee to the effect that they have quoted the amount on per acre per annum basis and would abide by the said annual payment derived by multiplying with the total acres i.e., area of farm set out in Schedule-II of the agreement. Since this exercise is carried out prior to opening of the bids, no mala fides can be attached to the 3rd respondent. As there was no indication in Clauses 1.2.6 and 2.2.3 of RFP on the aspect as to whether the amount should be quoted on per acre basis or for the entire area, the clarifications were sought for by the Selection Committee prio0r to opening of the bids. 50% of the qualified tenderers i.e., seven tenderers who were qualified for the financial bid openings had made their financial quotes on per acre per annum basis. Accordingly, the undertakings were taken from such seven bidders and thereafter, the bids were opened. By the said process, no prejudice or injustice is caused to any of the bidders, inasmuch as, no bidder was knowing as to how much the other bidders had quoted. Moreover, none, including the petitioner, objected the action of the Selection Committee of seeking clarification as aforementioned on the spot i.e, on 20th July 2010. The petitioner as well as others have kept quite and have not objected. If really the petitioner was prejudiced by the action of the Committee seeking clarification, it could have raised objection then and then itself. Since no prejudice was caused to the petitioner, it did not raise any objection. 12. Even otherwise, this Court does not find any illegality in the Committee seeking clarification from the bidders before opening the bids. The tender conditions provide for seeking clarification from the bidders prior to opening of the bids. Clauses 3.1.3 and 6.2 of RFP state that the authority, it its discretion and without ignoring any obligation or liability, reserves the right, at any time, to consult with any bidder in order to receive clarification or further opinion. Thus, the action of the committee seeking clarification from the bidders prior to opening of the bids is in conformity with the aforementioned clauses. Since the tender document itself provides for seeking clarification, it cannot be said that the authority/Selection Committee is not justified in seeking clarification from the bidders. 13.
Thus, the action of the committee seeking clarification from the bidders prior to opening of the bids is in conformity with the aforementioned clauses. Since the tender document itself provides for seeking clarification, it cannot be said that the authority/Selection Committee is not justified in seeking clarification from the bidders. 13. It is submitted on behalf of the petitioner that the clarification was made by the 3rd respondent at the pre-bid meeting held on 30th April 2010 to the effect that the financial bid to be quoted is annual payment to be paid for the entire area of the of the farm and that therefore, the 3rd respondent is not justified in seeking further clarification on the date of opening of the tender i.e., on 20th July 2010. In this context, it is relevant to note the query made by the bidder and the clarification given by the 3rd respondent in the pre-bid meeting, which read thus: Sl.No QUERIES RESPONSES Under Schedule 5, is the financial bid to be quoted for one acre for the notified area of the farm. No. The financial bid is the annual payment to be paid for the entire area of the farm in accordance with Schedule 5 of PDIA. 14. From the above, it is clear that the clarification was asked by one of the bidder to know as to whether under Schedule-5, the financial bid to be quoted for one acre of the notified area of the farm. The clarification issued by the 3rd respondent was “No. The financial bid is the annual payment to be paid for the entire area of the farm in accordance with Schedule-5 of PDIA.” Schedule-5 of PDIA is the payment schedule. The said Schedule reveals that payment shall be made on every 12 months of the appointed date and that the annual payment would be enhanced by 5% every year after the appointed date. Schedule-5 of PDIA does not deal with the financial bid. The PDIA comes into picture only after finalisation of tender process i.e., after the 3rd respondent entering into agreement with the successful bidder. Whereas, the financial bid is found at Appendix-IX of RFP. The same reveals that the annual payment quoted by the successful developer shall be paid by him in accordance with the terms and conditions set out in the PGDA.
Whereas, the financial bid is found at Appendix-IX of RFP. The same reveals that the annual payment quoted by the successful developer shall be paid by him in accordance with the terms and conditions set out in the PGDA. It does not reveal that the annual payment shall be quoted either for per acre or for the entire area of the farm. Thus, the clarification sought for as well as the clarification given at the pre-bid meeting on 30th April 2010 do not relate to Appendix-IX i.e., financial bid, but it relates to Schedule-5 of PDIA, which comes into play at the time of entering into the agreement and thereafter. In this regard, the submission made by learned counsel for the 3rd respondent that the question asked as well as the clarification given by the authority are erroneous assumes importance. In view of the above, the clarification given by the aughority-3rd respondent at the pre-bid meeting may not be helpful to the petitioner to contend that the financial bid had to be made for the entire area and not on per acre basis. 15. As aforementioned, the conditions of contract i.e., Clauses 3.1.3 and 6.2(b) of RFP empowers the authority to seek clarifications. Rule 23(3) of the Rules clearly reveals that the authority/committee may seek bona fide clarifications from the tenderers relating to tender submitted by them during the evaluation of tenders. Thus, the aforementioned clauses are in consonance with Rule 26(3) of the Rules. Sub-rule (2) of Rule 23 of the Rules may not be applicable to the facts of this case as contended by the petitioner, inasmuch as, in the matter on hand, the clarifications were asked for prior to opening of the bids. Sub-rule (2) of Rule 23 of the Rules states that the tenderers shall not make attempts to establish unsolicited and unauthorized contact with the Tender Accepting Authority, Tender Inviting Authority or Tender Scrutiny Committee after the opening of the tenders. In the matter on hand, the committee has sought clarification prior to opening of the tenderers. Thus, in my considered opinion, there was no bar for the Committee to seek clarification more particularly, having regard to Clauses 3.1.3 and 6.2 of RFP read with Rule 23(3) of the Rules. 16.
In the matter on hand, the committee has sought clarification prior to opening of the tenderers. Thus, in my considered opinion, there was no bar for the Committee to seek clarification more particularly, having regard to Clauses 3.1.3 and 6.2 of RFP read with Rule 23(3) of the Rules. 16. The judgment in the case of WEST BENGAL STATE ELECTRICITY BOARD “vs” PATEL ENGINEERING CO.LTD.,&OTHERS ( AIR 2001 SC 682 ), relied upon by the petitioner may not help the petitioner, inasmuch as, in the said matter, the clarifications were made by the tenderers after opening of the bids. After opening of the bids, the parties will be knowing the offers of all the bidders and therefore, the tenderers cannot make any clarification with regard to their bids. On the other hand, if the clarifications are made prior to opening of the bids, nobody would be prejudiced, inasmuch as, no tenderer will be knowing as to the amounts quoted by other tenderers, particularly when the tender conditions provide for securing clarifications. 17. Since the clarification sought for by the committee and consequent clarifications made by the seven tenderers, including respondent No.2, is permissible under the tender conditions and Transparency Rules, more so, when the same do not prejudice any of the tenderers, including the petitioner5, the contention of the petitioner that such action amounts to altering of the bids cannot be accepted. In view of the same, the 3rd respondent is justified in treating the bids of seven tenderers, including that of respondent No.2 who had quoted the amount on per acre basis as responsive bids. Thus, this Court does not find any ground to interfere with the action of the respondent No.3 in seeking clarification prior to opening of the bids and in treating the financial bid of the 2nd respondent as responsive bid. The respondent No.3 is also justified in concluding that the bid of 2nd respondent is a preferred bid, inasmuch as, it’s financial quote is the highest. In view of the above, the action of the 3rd respondent in seeking clarification from all the tenders prior to opening of the tenders does not after any of the tender conditions to any extent, much less, substantially. 18.
In view of the above, the action of the 3rd respondent in seeking clarification from all the tenders prior to opening of the tenders does not after any of the tender conditions to any extent, much less, substantially. 18. It is by now well settled that, if the Court is satisfied that there is nothing arbitrary or unfair in the awarding of contract, it cannot convert itself into a super technical committee to find out as to whether the requirements have been fulfilled or not, more particularly when all the important conditions of the tender document are fulfilled. Since the 3rd respondent has interpreted the tender conditions prescribed by it uniformly n a particular manner, I do not think this Court will be inclined to read or construe the conditions differently. If the interpretation made by respondent No.3 were to result in illegality and discrimination, this Court necessarily would interfere with, inasmuch as, in such an event, substantial prejudice or injustice will be caused to certain of the parties involved or to public interest in general. In certain of the cases, the changes or relaxations on certain matters would be unobjectionable, unless the benefit of those changes or relaxations were extended to some, but denied to others. In the matter on hand, the clarifications were sought for by the 3rd respondent uniformly from all the tenderers and consequently all the tenderers were given opportunity to make clarification prior to opening of bids, as provided in the conditions of tender document. No objection is taken by anybody, including the petitioner, for the same on 20th July 2010 on the spot prior to opening of the bids. This itself goes to show that none, including the petitioner, was prejudiced by the action of the 3rd respondent in seeking clarifications. Even otherwise, seeking of clarification by the 3rd respondent was permissible in view of Clauses 3.1.3 and 6.2 of RFP r/w. Rule 23(3) of the Rules. Point Nos.2, 3 and 4 are answered accordingly. Hence no interference is called for. Petition fails and the same stands dismissed.