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2014 DIGILAW 689 (PNJ)

SMS Infrastructure Limited v. State of Punjab

2014-04-09

ARUN PALLI, SANJAY KISHAN KAUL

body2014
JUDGMENT : SANJAY KISHAN KAUL, J. Leave is granted to place on record rejoinder to the reply of respondent No.2 and the application is allowed. CWP-3159-2014 2. Rule D.B. 3. At the request of learned counsel for the parties, this petition is taken up for disposal. 4. The Punjab Infrastructure Development Board (respondent No.2) invited tenders in August, 2010, for the development and modernization of Computerized Inter-State Check Posts on Design, Build, Operate and Transfer (DBOT) basis. In response to the tender, the petitioner was one participant, who submitted its bid on 30.9.2010. It is the case of the petitioner that as per the tender offer (Annexure P-1/A), all the figures were filled in on the basis of calculation of Rs. 45 crores, but the bid amount was mistakenly mentioned as Rs.72.26 crores. This mistake was, however, not corrected right till the opening of the financial bids on 2.12.2010 when the petitioner was declared as the highest bidder with an annual concession fee of Rs.72.26 crores. 5. The petitioner claims that it is only thereafter that the realisation dawned of the clerical mistake, whereby a representation was made on 15.12.2010 seeking to change the bid amount to one of Rs.45 crores. The next highest bid was of Rs.19.20 crores. It is the case of the petitioner that, in any case, even at Rs.45 crores, its bid was twice more competitive than any other bid. The fact, however, remains that this plea of the petitioner was not accepted by respondent No. 2 as the same would amount to altering the Request for Proposal (RFP) conditions. The consequences, thus, fell on the petitioner of forfeiture of the bid security amount of Rs.50 lacs. 6. The matter did not end at this, as a show cause notice was also issued on 11.3.2011 calling upon the petitioner as to why it should not be debarred from further participation in the re-bidding of the project, to which reply was sent on 21.3.2011. The petitioner pleaded that it has already suffered enough on account of the inadvertent clerical mistake by forfeiture of the security. However, a decision was taken to debar the petitioner vide letter dated 28.4.2011. The petitioner pleaded that it has already suffered enough on account of the inadvertent clerical mistake by forfeiture of the security. However, a decision was taken to debar the petitioner vide letter dated 28.4.2011. The operative portion of the letter reads In view of the above, you are hereby being informed that the Board has decided in the public interest to debar your company from participating in the subsequent bidding process in respect of the captioned project to be undertaken in the near future. 7. The petitioner, however, did not assail the aforesaid decision for a period of three years and, thus, in our view, accepted the consequences of the folly of wrongly quoting the bid amount i.e. forfeiture of the security amount as well as passing of order (Annexure P-7), though the petitioner did express disappointment at being left out from the re-bidding process initiated on 29.4.2011, vide communication dated 21.5.2011. The re-tendering process so initiated on 29.4.2011, resulted in M/s. C & C Constructions Limited (C&C) emerging as the highest bidder with a concession rate of Rs. 81 crores. That entity was, accordingly, informed on 27.7.2011, but vide a subsequent communication dated 7.12.2012, the bidding process was sought to be terminated due to certain recent policy developments and attendant circumstances, the Government of Punjab has taken a decision not to proceed ahead with the subject Project. The complete bidding process was, thus, cancelled and annulled by observing that in light of the above, and in exercise of the rights reserved in its favour under the RFP, PIDB has decided to cancel, terminate and annul the bidding process for the Project, without incurring any liability, obligation or responsibility whatsoever, in respect thereof. Accordingly, the Notice of Award dated 27.07.2011 issued by PIDB to C&C hereby stands withdrawn and cancelled. 8. The aforesaid, however, contrary to what is stated before us, did not actually close the chapter, in a sense that re-tendering process was sought to be reinitiated on 17.1.2014. However either anticipating the same or otherwise as a prelude, the petitioner requested vide letter dated 28.6.2013 that two years have elapsed since the blacklisting and the tendering process had been scrapped and, thus, made a prayer for closing the issue of blacklisting. This was followed by a reminder. However either anticipating the same or otherwise as a prelude, the petitioner requested vide letter dated 28.6.2013 that two years have elapsed since the blacklisting and the tendering process had been scrapped and, thus, made a prayer for closing the issue of blacklisting. This was followed by a reminder. However, the respondents informed the petitioner, vide communication dated 6.1.2014, that the process of continuous debarring of the petitioner was not liable to be revisited as the debarment was only qua the project in question and did not affect any other contract. Thus, it was not a debarment for an indefinite period of time but really a debarment qua a particular project, albeit indefinitely. 9. The petitioner has filed the present writ petition under Article 226 of the Constitution of India seeking to assail the impugned communications dated 28.4.2011 and 6.1.2014 with a direction to permit participation in the now re-tendering process sought to be carried on, for which the last date for submission of bids is stated to be 28.2.2014. We have been informed that the time has since been extended to 30.4.2014. 10. Respondent No.2 has filed a short affidavit setting forth, more or less, the same sequence of facts. After the cancellation of the initial re-bidding process, it is stated that a fresh mandate was received from the Excise, Taxation and Transport Department of the Government of Punjab to initiate the bid process again, but with certain amendments in the scope of the work. It is in these circumstances that the sale of the bid document is stated to have commenced from 17.1.2014. Insofar as the amendments are concerned, as per the respondent No.2, the same were set out in para-6, as under : The amendments carried out by the concerned government departments were with regard to total Number of check posts reduced from 39 to 21; earlier bid variable was annual Concession fee, whereas after amendments it was Lowest Basic Processing Charge; change in the fee collection charges as processing fee etc. Moreover, the amendments carried out in the scope of project were in the nature of friendly user, which would ultimately benefit the public at large. 11. The stand of the petitioner is that there are substantial changes, which are as under:- (Tabullar Matter Is Omitted.....Ed) 12. Moreover, the amendments carried out in the scope of project were in the nature of friendly user, which would ultimately benefit the public at large. 11. The stand of the petitioner is that there are substantial changes, which are as under:- (Tabullar Matter Is Omitted.....Ed) 12. A reading of the aforesaid chart shows that there are certain crucial differences arising : (a) the tender of 2010 was on Design, Build, Operate and Transfer (DBOT) basis while, now, it is on Design, Build, Operate, Finance and Transfer (DBFOT) basis; (b) earlier, it was the Department of Transport which was the concession authority while, now, it is Excise and Taxation Department; (c) the number of Check Posts are sought to be drastically reduced from 39 to 21; (d) the selection criteria is sought to be changed from Annual Concession Fee to Lowest Processing Charge; and (e) the estimated project size is up from Rs.175 crores to Rs.350 crores. 13. In our view, the aforesaid, thus, clearly shows that though intrinsically the project remains the same but there are no minor modifications but major changes, both qua the basis and size of the project. 14. In respect of the aforesaid, a question, thus, arises whether there can be indefinite debarment qua a specific project. There is no doubt about the legal principle that there cannot be indefinite debarment of an entity in view of law enunciated by the Honble Supreme Court in M/s. Kulja Industries Limited v. Chief Gen. Manager W.T. Proj. BSNL and others, AIR 2014 SC 9 . However, in the present case, that is not the factual matrix as the debarment is only qua a particular project. It certainly cannot be said that there cannot be a debarment qua a project preventing a party from future participation once its earlier tender had been cancelled, but for reasons. The added aspect is that the petitioner has never assailed the proceedings but, on the other hand, accepted the forfeiture of security and debarment. 15. Despite the aforesaid position, the limited scope of scrutiny in the present case remains as to what is the debarment to which the petitioner shall be visited, as per the communication dated 28.4.2011. The relevant portion has been extracted aforesaid which shows that the debarment is from participating in the subsequent bidding process in respect of the captioned project to be undertaken in the near future. The relevant portion has been extracted aforesaid which shows that the debarment is from participating in the subsequent bidding process in respect of the captioned project to be undertaken in the near future. The essence of the debarment, limited to a particular project, is of future participation in that project but with a rider that it was to be undertaken in the near future. This, itself, was the limiting factor qua the debarment. 16. As already explained aforesaid, in the present case, re-tendering process was carried on, in which the petitioner was precluded from participation and rightly so. However, that re-tendering process came to an end on 7.12.2012 as per certain policy developments. It is categorically stated in the communication dated 7.12.2012 that there was cancellation, termination and annulment of the bidding process for the Project. Thus, the whole thing was only sought to be revisited now in 2014 by altering the scope and manner of award of the Project and, thus, in our view, in such a situation, the petitioner cannot be precluded from participation in the tender. It cannot be lost sight of that what the petitioner has been punished for is a mistake committed in 2010 for which the petitioner suffered the consequences of forfeiture of security deposit as well as debarment which, in normal circumstances, would have lasted, say, for three years. This is really in the nature of a new tender, albeit for the same purpose, with a different scope and different parameters. 17. The result of the aforesaid is that the writ petition is allowed to a limited extent whereby the prayer for quashing of the communication dated 28.4.2011 is declined but the prayer for quashing of communication dated 6.1.2014 is allowed with leave to the petitioner to participate in the fresh tendering process for which the last date is 30.4.2014 (or any extended date) and it is ordered that the tender, if submitted by the petitioner, be scrutinized along with other tenders, as the case may be. 18. The petition is allowed in the aforesaid terms leaving the parties to bear their own costs. Petition allowed.