Sudha Facility Management Service v. Managing Director, Kadamba Transport Corporation Ltd.
2016-02-08
F.M.REIS, K.L.WADANE
body2016
DigiLaw.ai
JUDGMENT : F.M. Reis, J. Heard Mr. S. Samant, learned Counsel appearing for the petitioner, Ms. P. Bhandari, learned Additional Govt. Advocate appearing for the respondents No.1 and 2 and Mr. Shivan Desai, learned Counsel appearing for the respondent No.3. 2. Rule. Learned Counsel appearing for the respondents waive service. Heard forthwith, with the consent of the learned Counsel. 3. The petitioner by this petition, inter alia, prays to declare the petitioner as the successful bidder in respect of the tender dated 27/10/2015 for washing and cleaning of buses of Kadamba Transport Corporation ("Corporation" for short). A further direction sought by the petitioner is, inter alia, to quash and set aside the new bid process which took place on 25/1/2016 in respect of the cleaning and washing of such buses. 4. Briefly, the facts of the case, are as under : The respondent No.1 issued a Notice inviting tender for cleaning and washing of the Corporation buses for the period from 1/12/2015 to 30/11/2016. It is further their case that the petitioner filed their bid, through the tendering process on 14/11/2015. Similarly, two other contractors also submitted such a bid. It is further their case that the time to submit the bid was extended by the Corporation and the last date for submitting such tender was fixed as 16/11/2015 and the last date for opening was fixed as 18/01/2016. It is further the contention of the petitioner that the petitioner was the lowest for most of the rates, being less than half. It is further their case that they maintained the audit trial of their financial bid and found that they had complied with all the tender terms and conditions. It is further the case of the petitioner that the petitioner was required to deposit the earnest money in a sum of Rs.75,000/- vide a Demand Draft of State Bank of India or any other Schedule or Nationalized Bank. Accordingly, when the petitioner submitted their tender by e-tender they also scanned such demand draft and produced it along with the requisite documents to the concerned authorities at the time of submitting their bid. It is further their case that the petitioner was the most eligible tenderer and they fulfilled all the conditions of the tender and as the letter of appointment was not forthcoming, they issued a notice dated 28/12/2015 before the bids were opened.
It is further their case that the petitioner was the most eligible tenderer and they fulfilled all the conditions of the tender and as the letter of appointment was not forthcoming, they issued a notice dated 28/12/2015 before the bids were opened. It is further their case that as the terms of the bid had allegedly not been complied, the superior authorities of the respondents took a decision to reject the bid of the petitioner. It is also their contention that the Board of Directors found that experienced tenderer would carry out the work in a better manner and, as such, scrapped the tender process and issued a notice inviting fresh tender. 5. Mr. Samant, learned Counsel appearing for the petitioner has pointed out that the terms specified in the tender document clearly point out that there were two modes to pay the earnest money. One of the modes was to transfer the money through e-tender and the other mode was to pay by a Demand Draft drawn in the name of the Corporation from the State Bank of India or any Schedule or Nationalized Bank. The learned Counsel further submits that accordingly, the petitioner got such a demand draft issued and in fact, scanned the demand draft and submitted it with their e-tender on 14/11/2015. The learned Counsel further submits that the receipt received by the petitioner, clearly discloses that the payment of earnest money has been duly complied with. The learned Counsel further points out that before opening the tender, the petitioner tendered the original demand draft which was received by the Committee appointed by the Corporation and only thereafter the tenders were opened and the petitioner was found to be the lowest bidder in respect of three depots. The learned Counsel further points out that the Committed had awarded the tender to the petitioner, subject to confirmation by the superior Authorities. The learned Counsel further submits that only when fresh tenders were issued on 15/1/2016, the petitioner learnt that the earlier tender process had been scrapped. The learned Counsel further points out that the petitioner, thereafter, immediately filed the above petition and came to know that out of the three tenderers, besides the petitioner, there was only one tenderer who was a successful tenderer only in respect of one depot.
The learned Counsel further points out that the petitioner, thereafter, immediately filed the above petition and came to know that out of the three tenderers, besides the petitioner, there was only one tenderer who was a successful tenderer only in respect of one depot. The learned Counsel further points out that the respondents with mala fide intention has changed the tender terms thereafter in the fresh tender process only to exclude the petitioner at the instance of the third tenderer on untenable grounds. The learned Counsel further points out that the bid of the petitioner has been unlawfully rejected and, as such, the fresh tender process initiated by the respondents has no legal effect. The learned Counsel, as such, submits that the petitioner be, accordingly, held to be the successful tenderer. The learned Counsel, in support of his submissions, has relied upon a Judgment of the Apex Court reported in 2012 (5) ALL MR 813 in the case of Jai Laxmi Constructions & Ors. v. The State of Maharashtra and ors. 6. On the other hand, Mr. Shivan Desai, learned Counsel appearing for the respondent No.3 submits that this Court, in exercise of jurisdiction under Article 226 of the Constitution of India cannot interfere in the tender process, unless there is total disregard to the relevant provisions and the tender terms in the decision making process. The learned Counsel further points out that this Court cannot interfere with the decision taken by the respondents when there is no flaw committed in the decision making process with that regard. The learned Counsel further points out that accepting a tender is merely a decision and as such, according to him, there is no reason for interference by this Court under Articles 226 and 227 of the Constitution of India. The learned Counsel further points out that once the terms of the tender have not been fulfilled by the petitioner, there is no question of granting any liberty to the petitioner to rectify the mistake. The learned Counsel has, thereafter, taken us through the terms of the tender to point out that there was a breach committed by the petitioner to pay the deposit or to deposit the earnest money and, as such, according to him, the petitioner cannot be accepted in the tender process and, as such, the bid of the petitioner has been rightly rejected by the Committee.
The learned Counsel further points out that the Board of Director, after re-examining the matter, has come to the conclusion that the Tender Committee could not have accepted the Demand Draft in breach of the terms and conditions of the e-tender process. The learned Counsel further points out that as the other tenderer has raised an objection to the acceptance of the Demand Draft, the Board of Directors had to take the decision and drop the tender process by rejecting the bid of the petitioner. The learned Counsel, as such, submits that the petition be accordingly rejected. The learned Counsel, in support of his submissions, has relied upon a Judgment of the Apex Court reported in (2008) 16 SCC 215 in the case of Siemens Public Communication Networks Private Limited and another v. Union of India and ors. 7. We have considered the submissions of the learned Counsel and we have also gone through the record. The proposition advanced by Shri Shivan Desai, learned Counsel appearing for the respondent No.3 to the effect that this Court cannot, in a petition under Article 226 of the Constitution of India, interfere with the awarding of the tender, cannot be faulted. But, however, it is not disputed that when there is a patent flaw in arriving at such a decision making process, there is no bar for this Court to interfere with such decision under Article 226 of the Constitution of India. In such circumstances, we propose to examine whether the rejection of the bid of the petitioner can be justified in the present case. Clause 26 with regard to payment of earnest money reads thus : "26. An Earnest Money Deposit of Rs.25,000/- for each depot wise Margao, Porvorim, Vasco, & Panaji Depots in the form of Deposit at Call Receipt/Demand Draft drawn on State Bank of India or any schedule/Nationalized Bank in Favour of Managing Director Kadamba Transport Corporation Ltd., payable at Panaji is required to be deposited in this Office. The same should be valid for a period of three months.
The same should be valid for a period of three months. In case of successful Tenderer the E.M.D., will be converted into Security Deposit." Another clause in the Notice Inviting Tender in connection with the payment of earnest money deposit, reads thus : "Mode of Payment towards cost of Tender Document and Earnest Money Deposit : To be paid online through e-payment mode via NEFT/RTGS/OTC/debit card facility/net banking with pre-printed challans available on e-tendering website http;//www.etender.goa.gov.in. www.tenderwizard.com/GOA and directly credit the amount to ITG account as generated by challans for NEFT/RTGS/OTC." Yet, another clause in the Notice Inviting Tender in connection with the payment of earnest money deposit, reads thus: "The Earnest Money Deposit (EMD), cost of tender form and tender processing fee should be deposited along with the tenders in the appropriate form as given in the detailed tender notice." On perusal of the said terms referred to herein above, which are part of the e-tender process for the subject-work, we find that there is an ambiguity with regard to such clauses, as earnest money deposit can be made by net banking by e-payment mode, as well as by demand draft from the State Bank of India or any other Scheduled Bank. In the present case, it is not disputed that the petitioner had obtained the demand draft for the earnest money deposit and scanned them while submitting the tender to the concerned Department within the time prescribed. It is well settled that any ambiguity in such documents is to be construed unfavourable to the drafter of such documents. In such circumstances, the contention of the learned Counsel appearing for the respondent No.3 that the payment had to be effected only by e-payment and not by demand draft, cannot be accepted. An ambiguity, if any, would have to be considered to the benefit of the petitioner herein. In the present case, it is not disputed that the earnest money deposit was effected by a demand draft of the concerned Bank and on submitting the tender form along with scanned copy of such a demand draft, receipt of acceptance was issued by the respondent No.3 on 14.11.2015. In such circumstances, we find that the petitioner has complied with the terms of the tender process for payment of the earnest money deposit.
In such circumstances, we find that the petitioner has complied with the terms of the tender process for payment of the earnest money deposit. It is also not in dispute that the original demand draft was tendered by the petitioner before opening the tender. When the Demand Draft was received by the Tender Committee, there was no objection raised by any of the other tenderers. But, however, only after the bids were opened and it was found that the petitioner was the lowest tenderer in some of the depots, there was objection by the other tenderer. It is to be noted that besides the petitioner, there was only one tenderer whose bid was found to be in order. Bid of the third tenderer was rejected as it did not meet the eligibility criteria. In the present case, it is not disputed that the petitioner met the eligibility criteria and the bids were in fact accepted by the Tender Committee. But, however, thereafter the Board of Directors, in their meeting, found that the Tender Committee was not justified to receive the Demand Draft on the date of opening of the tender. We find that said decision of the Board of Directors cannot be sustained and deserves to be quashed and set aside. 8. Apart from that, the payment of earnest money cannot be considered to be an essential term of the tender process. The Apex Court, in a Judgment reported in (1991) 3 SCC 273 in the case of Poddar Steel Corporation v. Ganesh Engineering Works and others, has observed at paras 6 and 8, thus : "6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank clause 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance.
As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in C.J. Fernandez v. State of Karnataka (1990) 2 SCC 488 , a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India (1979) 3 SCC 489 , but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses, the present case belongs. 8. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank.
8. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank. In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6, specially when it was in its interest not to reject the said bid which was the highest. We, therefore, set aside the impugned judgment and dismiss the writ petition of respondent 1 filed before the High Court. The appeal is accordingly allowed with costs throughout." In the present case, considering the purpose for which the earnest money is being deposited, we find that it is not an essential term of the tender process. On going through the terms of the tender, it appears that the earnest money would be adjusted as security deposit if the bid of the tenderer is accepted. Hence, once the tender documents, along with the demand draft, were accepted by the respondent-Corporation, it was not open to the respondent-Corporation to unilaterally reject the bid of the petitioner. In such circumstances, we find that the rejection of the bid of the petitioner cannot be sustained and deserves to be quashed and set aside. Consequently, the order passed by the Board of Directors of the respondent No.3 with that regard deserves to be quashed and set aside. Once, rejection of the bid of the petitioner is set aside and having regard to the fact that the tender was for cleaning of buses, we find that the respondent-Corporation shall have to take a fresh decision with regard to the tender process initiated pursuant to the tender notice dated 27/10/2015, in accordance with law. In such circumstances, the second tender process initiated by the respondents would not survive. Hence, the decision dated 18/01/2016 deserves to be quashed and set aside, and the respondents be accordingly directed to take a fresh decision in the said tender process. 9. In view of the above, we pass the following : ORDER (I) The impugned decision dated 18/01/2016 is quashed and set aside.
Hence, the decision dated 18/01/2016 deserves to be quashed and set aside, and the respondents be accordingly directed to take a fresh decision in the said tender process. 9. In view of the above, we pass the following : ORDER (I) The impugned decision dated 18/01/2016 is quashed and set aside. (II) Respondents are, accordingly, directed to take a fresh decision with regard to the tender process initiated on 27/10/2015, afresh in the light of the observations made herein above, in accordance with law. (III) Rule is made absolute in the above terms. Rule made absolute.