KRL In fratech (India) Limited v. State of Jharkhand
2011-09-21
R.R.PRASAD
body2011
DigiLaw.ai
JUDGMENT : R.R.Prasad,,J., 1. Jawaharlal Nehru National Urban Renewal Mission (‘JnNURM’) programme was launched under the Ministry of Urban Development, Government of India to undertake reforms and facilitate investments in the urban sector of identified cities. When Dhanbad was selected as one of the cities eligible for availing financial assistance under the JnNURM programme, Dhanbad Municipal Corporation (DMC) appointed M/s. WAPCOS Limited to prepare Detailed Project Report (DPR) for establishing integrated Solid Waste Management System (ISWM) by availing grant under JnNURM. On the basis of DPR report, an estimated cost of approximately 55 crores was approved by JnNURM for developing ISWM facilities in Dhanbad. With the objective of developing the said project under a Public Private Partnership (PPP) framework, DMC took a decision to appoint private developer who shall be responsible for collection, transportation, processing and disposal of Solid Waste Management (SWN) and reclamation/ alternative use of existing dump sites and for that purpose to design, develop, part-finance, construct, operate and maintain the ISWM facilities. To ensure the ISWM Project being developed in accordance with the Municipal Solid Waste (Management & Handling) Rules, 2000 , M/s. Tetra Tech India Limited (respondent no.5) was appointed as Transaction Advisor-cum-Project Management Consultant to assist DMC in implementation of integrated Solid Waste Management System through selection of developer and construction supervision during its implementation, through a private developer under a Public Private Partnership (PPP) framework, who is to be selected through competitive bid process. In that pursuit, for selection of private developer, a notice inviting request for qualification was issued on 17.8.2010. The said document contained criteria for evaluation of the marks under clause 3.0 whereas clause 3.2 lays down the methodology for calculating the applicant’s competence. Clause 3.2.1.1 does stipulate that any bidder who achieves a score of 60 marks would be deemed to have qualified to meet technical experience criteria. On issuance of request for qualification (RFQ), the petitioner, a company registered under the Companies Act, engaged in the field of Waste Management under Public Private Partnership Scheme with various Government submitted its RFQ along with others. Altogether eight including the petitioner as well as respondent no.6 were declared qualified at the stage of request for qualification. On being declared pre-qualified, they were asked to submit their technical presentations and financial bids.
Altogether eight including the petitioner as well as respondent no.6 were declared qualified at the stage of request for qualification. On being declared pre-qualified, they were asked to submit their technical presentations and financial bids. Thereupon, five pre-qualified companies including the petitioners and respondent no.6 submitted their technical presentation and financial bids which were opened on 3.1.2011. The petitioner was declared to be successful bidder. On the next day, respondents 3 to 5 by acting against the terms and conditions of the request for qualification declared the respondent no.6 to be successful bidder which was objected by the petitioner but when nothing was done, the petitioner filed a writ application bearing W.P.(C) No.275 of 2011. In the said writ application, an affidavit was filed by the Secretary, Ministry of Urban Development, Government of Jharkhand (respondent no.2) admitting therein that there were several serious irregularities in the process of finalization of successful bidder. It was further stated that on account of that Dhanbad Municipal Corporation, respondent no.4 has been directed to issue a fresh tender. Pursuant to that decision when a letter dated 25.3.2011 was issued cancelling the entire tender, respondent no.6 also filed a writ application, vide W.P. (C) No.2015 of 2011. 2. Both the writ applications were heard together and his Lordship declined to interfere in the matter as the petitioners of both the cases had never been debarred from participating in second tender. On 7.5.2011, Dhanbad Municipal Corporation, respondent no.4 again issued a notice inviting request for qualification. It is the case of the petitioner that on purchasing the said document, it was found that different criterias have been fixed for evaluation of applicant’s competence. In other words, methodology of calculating the technical capacity of applicant got changed. Therefore, the petitioners raised objection before the Dhanbad Municipal Corporation, respondent no.4 over the new criterias fixed for evaluation of applicant's competence. Said objections were also raised in pre-bid conference held on 19.5.2011. After deliberation, the respondents amended certain clauses but according to the petitioners, they did not change or amend the scoring pattern. However, the petitioners submitted their applications relating to request for qualification along with four others including respondents 6 and 7. Out of which, only respondents 6 and 7 were declared pre-qualified as the petitioners are said to have failed to achieve threshold marks of 70.
However, the petitioners submitted their applications relating to request for qualification along with four others including respondents 6 and 7. Out of which, only respondents 6 and 7 were declared pre-qualified as the petitioners are said to have failed to achieve threshold marks of 70. On being declared disqualified, the petitioners have filed this writ application wherein prayer has been made to quash the notice inviting request for qualification (RFQ) dated 7.5.2011 issued by the respondent no.4 for implementation of the integrated Solid Waste Management System in Dhanbad Municipal corporation and then to direct the respondent to come out with a fresh RFQ with the terms and conditions for pre-qualification similar to the terms and conditions which had been stipulated in noticing inviting request for qualification dated 17.8.2010. 3. Mr. P.K. Sinha, learned Senior Counsel appearing for the petitioners submitted that earlier when the petitioners had submitted their applications, pursuant to RFQ dated 17.8.2010, the petitioners had been declared successful as the company secured more than threshold mark which had been fixed at 60 but the authority when issued second RFQ, it came with new scoring pattern whereupon the petitioners could not secure threshold mark fixed for evaluation of applicant's competence but that scoring pattern had been fixed in order to favour respondents 6 and 7 only whereas change in methodology for calculation marks had no reasonable nexus with the object tobe achieved and hence, RFQ issued subsequently is fit to be set aside. 4.
4. Learned counsel further submitted that on account of fixation of such methodology for calculation of the point only two competitors, respondents 6 and 7 pre qualified and out of them, respondent no.7, as per the terms and conditions of RFQ, would not be qualified for participating in the bid process as the agreement relating to integrated solid waste management system for Biharsharif Municipal Corporation has been terminated and thereby only respondent no.6 would be in the fray, as a result of which,there would be absolutely no competition and as such it will have telling effect on the public exchequer and therefore, second RFQ which was issued to favour respondent no.6 is not only tainted with mala fide but will have great adverse impact on public interest and hence, it is fit to be set aside in view of the decision rendered in a case of Jagdish Mandal vs.State of Orissa and others [(2007) 14 SCC 517] . 5. Learned counsel further submitted that no doubt it is true that the Government does have authority to change the policy or terms and conditions of NIT but that should be always in conformity with the reasonableness and should be free from arbitrariness, irrationality, bias and malice but in the case as it has been shown that fresh terms and conditions was laid down to suit the proposal of the other respondent but that change in scoring pattern has absolutely no nexus with the object to be achieved, hence, it is bad in view of the decision rendered in a case of Shimnit Utsch India Private Limited and another vs. West Bengal Transport Infrastructure Development Corporation Limited and others [ (2010) 6 SCC 303 ] . 6. As against this, learned Advocate General appearing for the State as well as Mr. Jai Prakash, learned Senior counsel appearing for the Dhanbad Municipal Corporation submitted that the petitioners have claimed themselves to be lowest bidder in the first RFQ which is quite false as the petitioners on calculation of the point as per the scoring pattern prescribed under the first RFQ had got composite score of 89.40 whereas respondent no.6 had obtained composite score of 95.47.
However, the authority could not proceed further on the said RFQ as under the order of the Secretary, it was cancelled and then a fresh notice inviting request for qualification which was issued on 7.5.2011 with certain changes relating to scoring pattern for evaluation of marks and that was done, keeping in view to achieve parameter, such as collection, transportation,processing and disposal of Municipal Solid Waste as laid down in the Municipal Solid Waste (Management and Handling) Rules,2000 and as such, those changes were made in order to have better management of Municipal Solid Waste in terms of the aforesaid rules and as such, it can never be said to be arbitrary. 7. It was pointed out that when five persons including petitioners submitted their applications pursuant to the notice inviting second RFQ only two have been found to have pre-qualified whereas the petitioner even failed to secure threshold marks fixed and as such, he was declared unsuccessful. Thus, when the petitioners participated in the process of second RFQ and became unsuccessful, they have got absolutely no right to challenge the process of RFQ and on this ground alone, this writ application is fit to be dismissed. 8. Learned counsel in support of his submission has referred to a decision rendered in a case of M/s. Tafcon Project (I) Pvt.Ltd vs. Union of India and others ( AIR 2004 SC 949 ) Thus, it was submitted that the writ application is fit tobe dismissed. 9. Mr. P.A.S Pati, learned counsel appearing for the respondent no.7 submitted that it is wrong on the part of the petitioners to submit before this Court that respondent no.7 is not eligible to participate in the bid in question on account of the fact that the agreement, concerning solid waste management entered into with Biharsharif Municipal Corporation got terminated. It is true that agreement had been terminated but that was challenged before the Patna High Court and the order of termination had been stayed. Subsequently, the authority withdrew that order of termination and allowed the respondent no.7 to continue with the work and hence, respondent no.7 participated in the process of RFQ and has been declared successful. 10. Having heard learned counsel appearing for the parties, it does appear that the petitioners had participated in the process of RFQ issued for implementation of integrated solid waste management in Dhanbad Municipal Corporation.
10. Having heard learned counsel appearing for the parties, it does appear that the petitioners had participated in the process of RFQ issued for implementation of integrated solid waste management in Dhanbad Municipal Corporation. As the petitioners had secured more than the threshold marks, the petitioners were declared successful. But it does not appear to be correct on the part of the petitioners to say that they had ranked number one among all the bidders, rather as per the stand of the Municipal Corporation, it was respondent no.6, who on account of having more marks than the petitioners ranked number one. However, that process of RFQ could not go further due to intervention of the State authority whereby it was cancelled and the authority of Dhanbad Municipal Corporation was asked to issue a fresh notice inviting request for qualification which was issued on 7.5.2011 with certain modification in the methodology of awarding point towards sub-head of the parameter tobe achieved for the management of Municipal solid waste. The following example which is confined to only one parameter would indicate about criteria fixed for awarding point for evaluating of applicant's competence. S. No. Parameter Indicator Marks 1. Experience in door to (a) Number of Projects door collection of at least 1. projects 2. in one city in India 2. or More projects 5. (b) Actual MSW collected from households during last three financial years. From 50 TPD to 100 TPD 5. Above 100 TPD 10. Whereas in second RFQ the criteria for awarding mark with respect to same parameter got changed to the extent indicted below. S. No. Parameter Indicator aximum Experience Score Experience Score 1. Experience in (a) Number of (a)5 door to door Projects collection of 1. projects 2 at least in one 2. projects 4 city in India >2 projects 5 b) Actual MSW collected (b)10 from households during last three financial years in any one of the projects. From 50 TPD to 100 TPD 2 For every additional 100 10 TPD, 2 marks upto the maximum of 500 TPD 11. Likewise some more changes were there which I do not propose to enumerate in details. On issuance of said notice inviting RFQ, the petitioners submitted their applications and raised certain objections over the terms and conditions including over the changed scoring pattern.
Likewise some more changes were there which I do not propose to enumerate in details. On issuance of said notice inviting RFQ, the petitioners submitted their applications and raised certain objections over the terms and conditions including over the changed scoring pattern. On receiving objections on behalf of the petitioners and other bidders, pre-bid meeting was arranged in which some of the objections raised on behalf of the petitioners and others were accepted but the objection taken on the point of methodology for awarding point was not considered tenable. In spite of that, the petitioners participated in the RFQ bid process. On awarding point when the petitioners were not declared successful, this writ application has been filed and as such, the petitioners cannot be allowed to say that the methodology adopted for awarding marks was quite wrong, arbitrary and was tainted with mala fide. 12. When the petitioners' objection taken in this regard was overruled, they instead of challenging it, submitted themselves in the process of RFQ. Thus, it is not now open for the petitioners to challenge the methodology adopted in awarding points in this writ application. In this regard, I may refer to a decision rendered in a case of M/s. Tafcon Project (I) Pvt. Ltd. vs. Union of India and others (supra) . 13. In spite of holding so, it would be in the interest of justice to consider as to whether change in scoring pattern is tainted with malice or arbitrariness. I may record that the Government has a discretion to adopt a different policy or alter or change its policy calculated to serve public interest and make it more effective. Choice in the balancing of the pros and cons relevant to the change in policy lies with the authority. But like any discretion exercisable by the Government or public authority, change in policy must be in conformity with reasonableness and free from arbitrariness, irrationality, bias and malice. 14. At this stage, I may also refer to a case of Jagdish Mandal vs.State of Orissa and others (supra) wherein circumstances have been laid down under which Court in exercise of its jurisdiction under Article 226 can interfere with the process of tender. It has been held herein below: “Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides.
It has been held herein below: “Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award or contracts, certain special features should be borne in mind.A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bone fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation of some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual mattes in exercise of power of judicial review, should pose to itself the following questions: 1. (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “ the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”. Whether public interest is affected. 15. Thus, there would be no denying of the fact that the Government has a discretion to adopt different policy or alter or change its policy but that should not be mala fide, reasonable and may not be against the public interest. 16.
Whether public interest is affected. 15. Thus, there would be no denying of the fact that the Government has a discretion to adopt different policy or alter or change its policy but that should not be mala fide, reasonable and may not be against the public interest. 16. Coming to the fact of the case, it be reiterated that for implementation of the integrated solid waste management, Dhanbad Municipal Corporation had issued tender inviting RFQ wherein certain criterias were fixed for awarding points for different parameters as has been stated above. One such parameter which has been referred to above is experience in door to door collection. In first RFQ the criteria which was fixed for awarding marks in this category is that if there is one project, two marks would be allotted, whereas if two or more projects are there, five marks would be allottedwhich criteria got changed in second RFQ in the manner indicated below. One project –two marks Two projects – four marks More than two projects -five marks 17. Likewise in the following manners points were tobe awarded towards collection of MSW from household in the following manner: From 50 TPD to 100 TPD – 5 Above 100 TPD - 10 Scoring pattern got changed in the second RFQ in the following manner: From 50 TPD to100 TPD - 2 For every additional 100 TPD – 2 marks or maximum of 500 TPD. 18. In similar fashion, criteria got changed for awarding point with respect to other parameters, but only one would be sufficient to consider as to whether the change had got any purpose or it is tainted with mala fide or to favour any one. 19. As I indicated above, one of the parameter for integrated solid waste management is experience in door to door collection of garbage and therefore, if marks fixed as per second RFQ as 10 for having capacity of lifting of garage of 500 TPD instead of putting marks 10 for lifting 100 TPD or more as it was in 1st RFQ the persons having capacity or experience in the field to lift more garbage will certainly handle the things in better manner. 21.
21. Thus, the changes seem to have been made with a view to have better person who does have maximum experience in the field so that objective of keeping the Municipal area clean be achieved in better manner. Under the circumstances, changes made in the parameter never appear tobe arbitrary nor mala fide nor it has been intended to favour anyone as after change in the criterias for awarding point, five persons participated in the process of RFQ and two of them, respondents 6and 7came out successful. 22. Thus, I do find that whatever changes were there, those were absolutely in conformity with the rules relating to Municipal Solid Waste (Management and Handling) Rules, 2000. Thus, I do not find any merit in this application. Hence, this writ application stands dismissed.