Phoenix Conveyor Belt India (P) Ltd. Rep. v. Chairman & Managing Director, Tamilnadu Generation of Energy & Distribution Company Limited
2012-04-27
M.JAICHANDREN
body2012
DigiLaw.ai
Judgment :- 1. Heard the learned counsel appearing on behalf of the petitioner, as well as the learned counsel appearing on behalf of the respondents. 2. This writ petition has been filed praying that this Court may be pleased to issue a writ of Mandamus to direct the first respondent, to confirm the tender bid of the petitioner dated, 30.12.2011, and to award the tender, for supply of Steel Cord Conveyor Belts, for North Chennai Thermal Power Station, in favour of the petitioner. 3. It had been stated that the petitioner is a leading manufacturer of Steel Cord Conveyor Belts in India. The petitioner had carried out several contracts, in supplying Steel Cord Conveyor Belts, relating to a number of Government projects. 4. It had been further stated that the first respondent had issued a tender notification for the supply of Steel Cord Conveyor Belts, for North Chennai Thermal Power Station. The tender notification had contained the usual terms and conditions. In Section II of the tender specifications, certain "BID QUALIFICATION REQUIREMENTS" had been specified, under clause (ii) of the said specifications that 'the bidder should have previous experience for the order executed for supplying a minimum quantity of 1800 metre length of Steel Cord Conveyor Belt having minimum 1600mm width and strength of ST 1150 to TNEB or SEBsor NTPC or PSUs or Power Utilities or Mines within the last 5 years as on the scheduled date of opening of technical bid. Out of the quantity supplied at least 1000m of the belt should have worked satisfactorily for a minimum period of one year as on the scheduled date of opening of technical bid'. However, the first respondent had placed the supply orders, with the second respondent, even though the second respondent had not fulfilled the above specifications. Instead of rejecting the tender submitted by the second respondent, summarily, the first respondent had been attempting to confirm the tender, in favour of the second respondent, arbitrarily and illegally. In such circumstances, the petitioner has preferred the present writ petition, before this Court, under Article 226 of the Constitution of India. 5. In the counter affidavit filed on behalf of the first respondent, it had been stated that the writ petition, filed by the petitioner, is not maintainable, either in law, or on facts.
In such circumstances, the petitioner has preferred the present writ petition, before this Court, under Article 226 of the Constitution of India. 5. In the counter affidavit filed on behalf of the first respondent, it had been stated that the writ petition, filed by the petitioner, is not maintainable, either in law, or on facts. Since, the second respondent had all the necessary qualifications, as per the "BID QUALIFICATION REQUIREMENTS", and as it had quoted the lowest rate, the tender submitted by the second respondent had been accepted and the purchase order had also been issued, on 19.3.2012, even before passing of the interim order, by this Court, in M.P.No.2 of 2012, on 20.3.2012. 6. It had been further stated that the tender had been floated for the procurement of various types of Steel Cord Conveyor Belts, for North Chennai Thermal Power Station. Five offers had been received. One offer had been received from the regular supplier, namely, M/s. Phoenix Yule (P) Limited, Kolkatta. Four other offers had also been made, by new entrants. The Techno-Commercial bids, made by four of the participants, had been opened, on 21.4.2011, and the price bids had also been opened, on 12.8.2011. Due to certain reasons, a fresh tender had to be floated, instead of the earlier tender, after receiving the "BID QUALIFICATION REQUIREMENTS". The performance report required was only for one year, instead of the two years period mentioned in the previous tender. The new entrant clause had already been removed in the fresh tender, floated for the procurement of Steel Cord Conveyor Belts. Whileso, three offers had been received, and the Techno Commercial bids received in respect of such offers, had been opened, on 30.12.2011. The price bids had also been opened. The bid of the second respondent had been accepted, as it had furnished the necessary proof for supplying nearly 60,000 metres of Steel Cord Conveyor Belts. The second respondent was also having a capacity of manufacturing upto 1200mm width of Steel Cord Conveyor Belts with a strength of ST2500. Further, the performance of the Steel Cord Conveyor Belts, supplied by the second respondent to Vishakapatnam Port Trust and Gujarat Industries Power Company limited, had been found to be satisfactory. The second respondent had also exported Steel Cord Conveyor Belts to Germany and Italy, having 2,000 mm width and the strength of ST 2000. 7.
Further, the performance of the Steel Cord Conveyor Belts, supplied by the second respondent to Vishakapatnam Port Trust and Gujarat Industries Power Company limited, had been found to be satisfactory. The second respondent had also exported Steel Cord Conveyor Belts to Germany and Italy, having 2,000 mm width and the strength of ST 2000. 7. It had also been stated that the Price offers of both the petitioner, as well as the second respondent, had been opened, on 2.3.2012. Since, the second respondent had quoted the lowest rate, due to which, there was a huge benefit of Rs.1.12 Crores to the first respondent Company, the purchase order had been placed with the second respondent Company, on 19.3.2012. It has also been stated that the previous supply made by the petitioner, during the year, 2003, was found to have certain manufacturing defects i.e., bonding defects, as per the Anna University Report. In such circumstances, the second respondent had been given the purchase order to supply the steel cord conveyor Belts. 8. It has also been stated that an efficacious alternative remedy of an appeal is available to the petitioner, under Section 11(3) of the Tamil Nadu Transparency in Tenders Act, 1998. As such, the writ petition filed by the writ petitioner is devoid of merits and therefore, it is liable to be dismissed. 9. The learned counsel appearing on behalf of the petitioner had submitted that the tender bid made by the second respondent should not have been accepted by the first respondent, as the second respondent has not complied with mandatory requirements of clause (ii) of the "BID QUALIFICATION REQUIREMENTS" specified, as per the tender specifications. The first respondent, who is the statutory authority is bound to act, as per the provisions of the Tamil Nadu Transparency in Tenders Act, 1998, and the Rules framed there under. In fact, the first respondent ought to have accepted the tender bid made by the petitioner, as it possessed the required qualifications. 10. The learned counsel appearing for the petitioner had further submitted that the performance certificate, submitted by the second respondent, does not refer to the first condition of clause (ii) of the "BID QUALIFICATION REQUIREMENTS". As such, the acceptance of the tender bid, made by the second respondent, is arbitrary and illegal. 11.
10. The learned counsel appearing for the petitioner had further submitted that the performance certificate, submitted by the second respondent, does not refer to the first condition of clause (ii) of the "BID QUALIFICATION REQUIREMENTS". As such, the acceptance of the tender bid, made by the second respondent, is arbitrary and illegal. 11. It had been further stated that no order had been passed by the first respondent, granting the tender in favour of the second respondent, under the provisions of the Tamil Nadu Transparency in Tenders Act, 1998, and no reason had been given in the rejection of tender submitted by the petitioner. No intimation had been given to the petitioner, with regard to the acceptance of the tender of the second respondent. 12. It had been further stated that the appeal remedy provided, under Section 11 of the said Act, cannot be applicable to the present case, as no order had been passed by the first respondent, under Section 10 of the Act. The purchase order, dated 19.3.2012, said to have been granted in favour of the second respondent, can not be taken to be the order issued, under Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998. 13. It had been further stated that the "BID QUALIFICATION REQUIREMENTS", prescribe that the attested copies of evidence, for fulfilling the necessary conditions have to be produced, including the purchase order and the performance certificate. It would not be sufficient for the second respondent, merely to produce the purchase order and the performance certificate. 14. The learned counsel had further submitted that the terms and conditions of the tender had to be strictly complied with, by the first respondent. The learned counsel has also relied on the following decision in support of his submissions, in SIEMENS PUBLIC COMMUNICATION NETWORKS PRIVATE LIMITED AND ANOTHER VS. UNION OF INDIA AND OTHER (2008 (16) SCC 215), wherein, the Supreme Court has held that 'it is not possible to rewrite the entries in bid documents and read into the bid document, certain terms that did not exist therein'. 15.
UNION OF INDIA AND OTHER (2008 (16) SCC 215), wherein, the Supreme Court has held that 'it is not possible to rewrite the entries in bid documents and read into the bid document, certain terms that did not exist therein'. 15. He had also relied on another decision in MONARCH INFRASTRUCTURE (P) LTD., V. COMMISSIONER ULHASNAGAR MUNICIPAL CORPORATION AND OTHERS ( 2000 (5) SCC 287 ) wherein, the Supreme Court has held that 'the Government is free to enter into any contract with the citizens, but the Court may interfere where it acts arbitrarily or contrary to public interest. The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly placed. It is open to the Government to reject even the highest bid in a tender, where such rejection is not arbitrary or unreasonable and if such rejection is in public interest, for valid and good reasons'. 16. As such, the action of the first respondent in granting the purchase order, in favour of the second respondent, is arbitrary and illegal. Hence, the writ petition, filed by the writ petitioner, is arbitrary and illegal. 17. Per contra, the learned counsel appearing on behalf of the second respondent had submitted that the writ petition filed by the petitioner is not maintainable, before this Court, under Article 226 of the Constitution of India, as an efficacious, alternative remedy is available to the petitioner, under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998. He had further submitted that an order had been issued in favour of the second respondent, on 19.3.2012, pursuant to the acceptance of the tender bid submitted by the second respondent. 18. It had also been stated that all the relevant documents had been submitted, along with the tender bid, based on which, the first respondent had accepted the tender submitted by the second respondent and had granted the purchase order in favour of the second respondent. 19. The learned counsel had further submitted that, since, the issues raised by the petitioner involves disputed questions of fact, it would not be appropriate for this Court to decide the same, in the present writ petition. Therefore, the writ petition, filed by the petitioner, is not maintainable.
19. The learned counsel had further submitted that, since, the issues raised by the petitioner involves disputed questions of fact, it would not be appropriate for this Court to decide the same, in the present writ petition. Therefore, the writ petition, filed by the petitioner, is not maintainable. In support of his contention he had relied on the decision of the Supreme Court, in SANJANA M. WIG V. HINDUSTAN PETRO CORPORATION LTD. (2005 (5) CTC 292). 20. He had also relied on the decision of this Court in UFLEX LIMITED, REPRESENTED BY ITS AUTORISED SIGNAGTORY, MR. R. SUNDARR DOSS V. STATE OF TAMIL NADU, REPRESENTED BY THE SECRETARY TO GOVERNMENT ( 2011 (4) CTC 225 ) wherein, paragraph 18 reads as follows: "Moreover, the terms of the contract are not open to judicial scrutiny, the same being in the realm of contract. The Courts are always hesitant to interfere with the administrative policy decision and in rarest of rare occasions, if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts can interfere or otherwise the Courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down. In a commercial transaction, the State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, provided the tender conditions permit such a relaxation. Even when some defect is found in the decision making process, the Court has to necessarily exercise its discretionary powers 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 and is satisfied that overwhelming public interest requires interference, the Court should interfere. Otherwise, the larger public interest will prevail upon the individual's interest. This is the law laid down by this Court in the cases of Ion Exchange Waterleau Ltd., and P.Ramadas, cited supra." 21.
Only when it comes to a conclusion and is satisfied that overwhelming public interest requires interference, the Court should interfere. Otherwise, the larger public interest will prevail upon the individual's interest. This is the law laid down by this Court in the cases of Ion Exchange Waterleau Ltd., and P.Ramadas, cited supra." 21. In reply, the learned counsel appearing on behalf of the first respondent, had submitted that the tender bid of the second respondent was the lowest, due to which the first respondent Company had benefitted to an extent of Rs.1.12 Crores. Further, the steel cord conveyor Belts, supplied by the petitioner, during the year, 2003, was found to have certain manufacturing defects. In view of the documents submitted by the second respondent, the Tender Evaluation Committee had approved the bid submitted by the second respondent. Based on the said approval, the purchase order had been issued to the second respondent, on 19.3.2012. It is also submitted that the petitioner ought to have availed the alternative remedy provided under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998, and therefore, the present writ petition, filed by the petitioner, is not maintainable. 22. In view of the submissions made on behalf of the parties concerned and on a perusal of the records available, and in view of the decisions cited supra, this Court is of the considered view that the writ petition, filed by the petitioner, is liable to be dismissed, as it is devoid of merits. 23. The tender bid submitted by the second respondent had been accepted, by the first respondent, and the purchase order had also been issued, on 19.03.2012, in favour of the second respondent. While so, the petitioner ought to have filed an appeal, under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998, if so advised. Instead of doing so, the petitioner has preferred the present writ petition, before this Court, praying that this Court may be pleased, to issue a Writ of Mandamus directing the first respondent to grant the tender in favour of the petitioner. 24. Further, from the records placed before this Court, it is seen that the second respondent had complied with the requirements, as specified in the "Bid Qualification Requirements". A number of purchase orders had been filed before this Court, on behalf of the second respondent.
24. Further, from the records placed before this Court, it is seen that the second respondent had complied with the requirements, as specified in the "Bid Qualification Requirements". A number of purchase orders had been filed before this Court, on behalf of the second respondent. They had been submitted by the second respondent, along with the tender bid, to show that the Steel Cord Conveyor Belts with the width of 1600mm had been supplied to various entities. The minimum required length, as specified in the said regulations, had also been complied with. While so, it would not be possible to the petitioner to state that the second respondent had not fulfilled the requirements specified in the "Bid Qualification Requirements" of the tender specifications. 25. It is also noted that the Tender Evaluation Committee concerned had approved the tender submitted by the second respondent, after verification of all the necessary documents, which were required to show that the second respondent had fulfilled the requirements specified in the tender specifications. Further, the petitioner has not been in a position to show that the acceptance of the tender bid made by the second respondent had been done in a malafide manner. In such circumstances, this Court finds it appropriate to dismiss the writ petition. Hence, the writ petition stands dismissed. Consequently, connected M.P.No.1 of 2012 is closed. No costs.