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2016 DIGILAW 36 (JK)

Madan Lal Goel v. Food Corporation of India & Ors.

2016-02-11

BANSI LAL BHAT

body2016
JUDGMENT 1. Petitioner-Madan Lai Goel claiming to be the proprietor of M/s Shri Balaji Transport Corporation New Delhi which is engaged in carrying out the activities of transportation contracts of various kinds of material including food grains, cement, steel and other goods, through the medium of instant petition, seeks quashment of work order dated 31.03.2015 by virtue whereof the official respondents have allotted contract in favour of private respondent-M/s Vikas Transport Company for station Lethpora. Following relief(s) are claimed in the petition: "a. Quash irrational, arbitrary decision of the tender committee for rejecting the tender of the petitioner by issuance of appropriate writ, order or direction in the nature of Certiorari and to produce the entire record of proceedings of allotment, b. To quash the work order dated :31-03-2015 by virtue of which the contact was allotted in favour of private respondent namely M/s Vikas Transport Co. for station i.e. Lethpora (Annexure(A). c. To pass an order or writ in the nature of mandamus for commanding the official respondents or anybody competent to accept the tender of the petitioner in respect of road transport contract viz. one station namely Lethpora and award the contract to him in place of private respondent. d. Any other writ, order or direction which this Hon'ble Court deems fit in the facts and circumstances of the present case may also be passed in favour of petitioner and against respondents." 2. It is averred in the writ petition that respondent No. 1 invited online/e-tender for appointment of RTC for various destinations of FCI J&K vide NIT dated 03.02.2015 under two bid system: i. Technical Bid and ii. Price Bid. Petitioner submitted online/e-tender for three destinations out of five destinations notified by respondent No. 1. viz. Leh, Phyang and Lethpora. Technical Qualification condition for bidding embodied in Clause 3 of NIT is reproduced hereunder: "3. Qualification conditions for bidding- (i) Tenderer should have experience of transportation duly obtained from manufacturer/PSU/Govt. Department/public Ltd. Company/Private Ltd. Company dealing in the field of fertilizer, food grains, cement, sugar, coarse grains or any other commodity. Ten-derer should have executed in any of the immediate preceding five years work of value- (a) At least 25% of the estimated contract value in one single contract: OR (b) 50% of the estimated contract value in different contracts. Department/public Ltd. Company/Private Ltd. Company dealing in the field of fertilizer, food grains, cement, sugar, coarse grains or any other commodity. Ten-derer should have executed in any of the immediate preceding five years work of value- (a) At least 25% of the estimated contract value in one single contract: OR (b) 50% of the estimated contract value in different contracts. (ii) Experience certificate shall be produced from customer stating proof of satisfactory execution and completion of the contract(s) besides duly certifying nature, period of contract, and value of work handled." Copy of the Instructions, Model Tender Form is annexed herewith as Annexure-C with this petition. 3. Petitioner claims to have submitted all tenders separately before the due date, i.e., 24.02.2015. This was followed by initiation of evaluation process by the tender committee comprising of respondent Nos. 2 to 4. According to petitioner it possessed the required experience of having executed the work worth Rs. 7,32,14,368/- which was more than 25% of the contract value for Lethpora. On 17.03.2015 petitioner received email from respondent No. 5 seeking some clarification/verification regarding the experience certificate submitted by the petitioner-firm within three days. Petitioner-firm responded to the same within time. Subsequently, petitioner learnt that its technical bid was rejected insofar as the same pertained to Lethpora. It is alleged that the official respondents did not supply the copy of rejection order/committee report to petitioner-firm. Even the allotment order in favour of private respondent was not made public. Thus, the contract was awarded to private respondent in a surreptitious manner abusing transparency and fairness of procedure. Petitioner managed to get copy of the tender committee report which recorded the opinion of tender committee to the effect that the petitioner's experience was not sufficient to qualify for further process. It is further averred in the petition that the petitioner-firm has very old professional relationship with M/s Dabur India Limited and has been performing its transport works/contracts satisfactorily for the past fifteen years. Multiple contracts have been concluded or are going on with M/s Dabur India Limited. One single contract worth Rs. 73214368/- was carried out from 01.04.2012 to 31.03.2013 in respect of Amla Pisti and commodities packed in gunny bags of 50 kg from Krishnagiri (Tamil Nadu) to Pant Nagar (Uttarakhand). Multiple contracts have been concluded or are going on with M/s Dabur India Limited. One single contract worth Rs. 73214368/- was carried out from 01.04.2012 to 31.03.2013 in respect of Amla Pisti and commodities packed in gunny bags of 50 kg from Krishnagiri (Tamil Nadu) to Pant Nagar (Uttarakhand). It is further averred that while the experience certificate and the work order submitted by petitioner-firm were accepted for two destinations, the same were rejected in regard to Lethpora destination. It is further averred that successful completion of work of the value of Rs. 73214368/- in a single contract allotted to petitioner by virtue of single work order issued by M/s Dabur India Limited fulfilled the criteria of qualification condition for having the experience of carriage contract of such value which was more than 25% of the value of present contract of Rs. 27.20 crores. It is, therefore, alleged that the rejection of petitioner's bid suffered from irrationality and arbitrariness. It is further averred in the petition that the petitioner-firm provided all requisite information including number and details of cheques issued from time to time to the account of petitioner's Bank and the payment made by M/s Dabur India Limited. The impugned tender committee report and work order dated 31.03.2015 is assailed as being arbitrary, irrational and malafide for the outright rejection of a valid experience certificate submitted by petitioner. Further allotment of contract to private respondent is assailed as a necessary sequel to the aforesaid. 4. Respondent Nos. 1 to 5 have contested the writ petition on the ground that the tender committee always treated the experience certificate of petitioner as a contract value obtained from out of the execution of the multiple contracts and not as contract value obtained out of execution of single contract. The same view was adopted by the tender committee while accepting petitioner's eligibility for two contracts viz Jammu to Leh and Jammu to Phyang. It is pleaded that the experience certificate in question was obtained by the petitioner from multiple contracts executed with M/s Dabur India Limited. Denying the allegations of malafide or mischief committed by respondent Nos. 1 to 5 to harm the petitioner, it is pleaded that the rejection of technical bid of petitioner for allotment of contract of Lethpora was neither unfair nor arbitrary and did not constitute a case of malice in law as alleged. 5. Denying the allegations of malafide or mischief committed by respondent Nos. 1 to 5 to harm the petitioner, it is pleaded that the rejection of technical bid of petitioner for allotment of contract of Lethpora was neither unfair nor arbitrary and did not constitute a case of malice in law as alleged. 5. Respondent No, 6 the private respondent, has, while reiterating the stand taken by official respondent Nos. 1 to 5, pleaded that the petitioner had gained experience from multiple contracts and was thus required to satisfy the requirements of the 50% of the eligibility criteria which he did not possess. In the evaluation process petitioner could qualify for stations namely FSD New Godown to Leh and FSD New Godown to Phyang but he failed to qualify for station namely FSD New Godown to Lethpora. The work came to be allotted to private respondent No. 6 as successful bidder in terms of work order dated 31.03.2015. It is further pleaded that respondent No. 6 has the trucks for transportation of food grains in terms of the work order. It is further pleaded that though the petitioners bid was liable to be rejected on account of having submitted insufficient and incomplete documents, yet an opportunity was provided to it by the official respondents to provide clarification/verification. It is further pleaded that during the evaluation process further deficiencies were observed by the tender evaluation committee. The petitioner was found not qualifying for Lethpora Station as the payments reflected in the experience certificate produced by petitioner were not from a single contract but multiple contracts. It is further pleaded that the petitioner had executed transportation work worth Rs. 7.32 crore out of multiple transportation contracts; that the requirement of 50% of contract value comes to Rs. 13.625 crore which was much higher than the value of work done by the petitioner from multiple contracts. The tender evaluation committee was correct in its assessment that the experience gained by petitioner was from different contracts. It is further pleaded that the details of payment submitted by petitioner before Food Corporation of India reveal that the payments have been made from the multiple contracts and supplies made for different stations. Reference is made to two payments of Rs. 129077/- on 28.04.2011 vide Cheque Number 419595 and Rs. It is further pleaded that the details of payment submitted by petitioner before Food Corporation of India reveal that the payments have been made from the multiple contracts and supplies made for different stations. Reference is made to two payments of Rs. 129077/- on 28.04.2011 vide Cheque Number 419595 and Rs. 218531/-received on 28.04.2012 vide Cheque Number 419596 which have been made by Dabur India Limited for transportation done at Jammu to the petitioner. Further reference is made to statement of accounts with effect from 01.5.2012 to 31.05.2012 in regard to payment of Rs. 235109/- vide Cheque Number 438995 received by way of funds transfer from Indore-Vijay and payment of Rs. 236049/-received by petitioner vide Cheque Number 468572 on 28.05.2012. Thus, the experience certificate relied upon by the petitioner indicating Rs. 7.3 crore from multiple works as reflected from statement of accounts did not render the petitioner qualified as per eligibility criteria embodied in Clause 3. 6. Perused the pleadings and documents placed on record. 7. Heard learned counsel for the parties. 8. It is contended on behalf of petitioner that the finding of the tender evaluation committee was wantonly irrational and smacked of absolute non-application of mind as the same committee had accepted the experience certificate submitted by petitioner for two destinations but rejected it as regards Lethpora. It is contended that the report of tender committee was a colorable exercise of jurisdiction of official respondents who failed to discharge their onerous duty in assessing the petitioner's experience certificate which related to a single contract of Rs. 73214368/- which exceeded the value of contract individually as envisaged in the qualification condition for bidding of a tender. It is further contended that the certificate in question has been issued for a single contiact carried out by the petitioner with M/s Dabur India Limited under one work order for a specific quantity. It is further contended that the reasons in the order impugned that it could not be construed that experience shown is gathered from a single contract is anti-thetical to the observations of the official respondents, viz- a- viz other two contracts where the same explanation given by M/s Dabur India Limited has been accepted by the official respondents. It is contended that FCI is an instrumentality of the State and its actions have to be informed of reasons. It is contended that FCI is an instrumentality of the State and its actions have to be informed of reasons. It is contended that the tender evaluation committee have acted contrary to their own opinion favouring acceptance of tender in respect of two destinations while rejecting the tender for Lethpora in the same breath which speaks of arbitrariness and malafide exercise of power besides non-application of mind. It is contended that the entire exercise appears to have been carried out with ulterior motive of favouring the private contractor which will result in financial loss to the Corporation as the petitioner is sure that he has tendered the lowest, bid. It is contended that the act of official respondents was malefic having mischief of harming the petitioner's interest not only in respect to his participation but also his right for award of contract for Lethpora. It is lastly contended that the official respondents, by acting arbitrarily rejected the technical bid of petitioner as regards Lethpora which is unconstitutional, unfair and violative of Article 14 of Constitution. 9. It is well settled that the process of allotment of contracts by an instrumentality of the State is amenable to judicial review. In Tata Cellular case, the Hon'ble Apex Court held that judicial review would apply even to exercise of contractual powers by the Government and its instrumentalities in order to prevent arbitrariness or favouritism. The scope of judicial review was confined to illegality, irrationality and procedural impropriety committed by the decision making authority in arriving at the decision. Emphasizing judicial restraint in administrative action the Hon'ble Apex Court held that the judicial review would be limited to the decision making process and the Court shall not sit as Court of appeal. Likewise substitution of its own decision by Court to correct the administrative decision would not be warranted. It was further held that the terms of NIT cannot be open to judicial scrutiny as the same is in the realm of contract and the Government has freedom of contract. The Hon'ble Apex Court also warned of the heavy administrative burden in the event of quashing of such decisions. 10. In Siemens Aktiengeselischaft and S. Ltd. v. DMRC Ltd & Ors. reported in 2014 (11) SCC 288 the Hon'ble Apex Court held as under- "22. The Hon'ble Apex Court also warned of the heavy administrative burden in the event of quashing of such decisions. 10. In Siemens Aktiengeselischaft and S. Ltd. v. DMRC Ltd & Ors. reported in 2014 (11) SCC 288 the Hon'ble Apex Court held as under- "22. There is no gainsaying that in any challenge to the award of contact before the High Court and so also before this Court what is to be examined is the legality and regularity of the process leading to award of contract. What the Court has to constantly keep in mind is that it does not sit in appeal over the soundness of the decision. The Court can only examine whether the decision making process was fair, reasonable and transparent. In cases involving award of contracts, the Court ought to exercise judicial restraint where the decision is bona fide with no perceptible injury to public interest." 11. It is therefore manifestly clear that judicial review would only justify examining of the decision making process and not the decision itself which is bonafide and not repugnant to public interest. 12. The tender in question pertain to transportation of materials by road from FSD New Godown Jammu to five destinations in the State viz. Kargil I, Kargil II, Leh, Phyang and Lethpora. Period of contract was fixed as two years for Lethpora while in regard to other destinations it was limited to one year. The tenders invited vide e-tender notice No. CONT/32(3)/JK/Tender/2014-15/VOLV dated 03.02.2015 were under two bid system viz. technical bid and price bid. The eligibility criteria, insofar as the previous experience of a tenderer is relevant, reads as under: "3. Qualification conditions for bidding- (i) Tenderer should have experience of transportation duly obtained from manufacturer/PSU/Govt. Department/public Ltd. Company/Private Ltd. Company dealing in the field of fertilizer, food grains, cement, sugar, coarse grains or any other commodity. Tenderer should have executed in any of the immediate preceding five years work of value- (a) At least 25% of the estimated contract value in one single contract: OR (b) 50% of the estimated contract value in different contracts. (ii) Experience certificate shall be produced from customer stating proof of satisfactory execution and completion of the contract(s) besides duly certifying nature, period of contract, and value of work handled." 13. Petitioner claims to have submitted bids for three destinations viz Leh, Phyang and Lethpora. (ii) Experience certificate shall be produced from customer stating proof of satisfactory execution and completion of the contract(s) besides duly certifying nature, period of contract, and value of work handled." 13. Petitioner claims to have submitted bids for three destinations viz Leh, Phyang and Lethpora. It not disputed that petitioner's technical bids for Leh and Phyang destinations were accepted. However, it failed to bag the contract on evaluation of the price bid. The dispute in the instant case pertains to the rejection of technical bid of petitioner qua destination Lethpora. According to petitioner it possessed the requisite experience of having executed the single work of the value of Rs. 73214368/-which is more than 25% of the contract value for Lethpora. However, respondents appear to have rejected its bid on the ground that the petitioner had executed transportation work of the value of Rs. 73214368/- out of multiple transportation contracts and not from a single contract. Admittedly, the contract value in regard to destination Lethpora was Rs. 27.20 crores. In terms of eligibility criteria relating to past experience as laid down in Clause 3 of the e-tender, petitioner was required to have experience of transportation of the value of at least 25% of the contracted value in one single contract which comes to Rs. 6.80 crores while past experience of works executed in the immediately preceding five years was required to be to the tune of 50% of the contract value in different contracts which would sum up to Rs. 13.60 crores. Rejection of petitioner's bid for allotment of work for transportation of stocks to Lethpora destination appears to have been done on the basis of evaluation of documents submitted together with clarifications issued and the verification made by Dabur India Limited which according to the plea taken by respondents reflected the contract value out of multiple contracts. According to respondents the works executed by petitioner worth Rs. 73214368/- related to multiple transportation contracts and the requirement of 50% of contract value for Lethpora comes to Rs. 13.60 crores which is much 'higher than the value of transportation work executed by petitioner out of multiple transportation contracts. It is not in controversy that the contract for transportation for Lethpora destination has been allotted in favour of the private respondent who is presently executing the transportation work. 13.60 crores which is much 'higher than the value of transportation work executed by petitioner out of multiple transportation contracts. It is not in controversy that the contract for transportation for Lethpora destination has been allotted in favour of the private respondent who is presently executing the transportation work. The issue for determination is whether the petitioner's technical bid for Lethpora destination was rejected arbitrarily. 14. In terms of Clause 3(ii) incorporating qualification conditions for bidding the experience certificate was required to be produced from 'customers stating proof of satisfactory execution and completion of contracts besides duly certifying nature, period of contract and value of work handled. Petitioner has produced copy of communication dated 17.03.2015 from respondent No. 5 forming Annexure-D to the petition in terms whereof it was directed to make good the deficiency in the experience certificate and also procure details from the Dabur India Limited with regard to contract allotted, security deposit made, center wise monthly work done by petitioner and payments made for the period 2012-13 within three days. Annexure -E to the petition is the reply to the aforesaid communication of respondent No. 5 in which M/s Dabur India Limited has clarified that the work order and experience certificate was signed by General Manager Supply Chain Department of the Company. It was clarified that the contract for movement of Amla Pisti and Commodities from Krishnagiri (Tamil Nadu) to Pant Nagar (Utterakhand) was awarded to petitioner with effect from 01.04.2012 to 31.03.2013 vide work order dated 21.03.2012. It further clarified that the petitioner was a very old and trusted vendor serving M/s Dabur India Limited for last fifteen years and having credit balance in crores with Dabur India. It further stated that the Bank guarantee of Rs. 12.00 lac had been obtained from petitioner which was renewed en year to year basis. In regard to experience certificate it was further clarified that the petitioner had carried total quantity of 18208 mt of Amal Pisti and Commodities packed in gunny bags of 50 kgs each from Krishnagiri (Tamil Nadu) to Pant Nagar (Uttarakhand) during the said contract period and for such transportation only services of petitioner were employed. In regard to mode of payment it was clarified that all freight payments were made through the mode of account payee cheques only. In regard to mode of payment it was clarified that all freight payments were made through the mode of account payee cheques only. Details of payment formed enclosure to Annexure-A. Annexure-F to the petition is the tender committee report, perusal whereof reveals that the petitioner had enclosed certificate issued by M/s Dabur India Limited for work of value of Rs. 73214368/- for the year 2013. After verification of experience certificate subsequent to receipt of clarification from M/s Dabur India Limited it was of the opinion that crores of rupees lying as a credit balance with Dabur India Limited and the Bank guarantee of Rs. 12.00 lac was common for all the works/transport arrangements being undertaken by them. It was of the opinion that the clarification letter issued by M/s Dabur India Limited clearly indicated the existence of multiple works and transport arrangements. Further the Bank statement indicated various other payments released to the party by M/s Dabur India Limited showing existence of other works/transport arrangements between them simultaneously. Thus it was of the view that the experience gathered was not sufficient to qualify the petitioner for price bid as the experience shown was not from a single contract. It is manifestly clear that the experience certificate relied upon by the petitioner together with the clarification issued and verification made by M/s Dabur India Limited was duly considered and evaluated by the tender committee and a conclusion was drawn on the basis of clarification issued by M/s Dabur India Limited which justified the finding arrived at by the tender evaluation committee that the certificate produced by petitioner related to multiple transport contracts. The conclusion that the experience gained by the petitioner was from multiple contracts is further justified as the comparative analysis of statement of accounts from 01.04.2012 to 30.04.2012 reveals that payments made vide Cheque Number 419595 and 419596 have been made by M/s Dabur India Limited for transportation done at Jammu whereas the statement of account with effect from 01.05.2012 to 31.05.2012 brings it to fore that the payment made vide Cheque Number 438995 was received by way of funds transfer from Indore-Vijay while payment received by petitioner vide Cheque Number 468572 had been made by funds transfer from Jammu. It is manifestly clear that the experience certificate of the value of Rs. It is manifestly clear that the experience certificate of the value of Rs. 73214368/- purportedly issued for transportation of stocks from Krishnagiri (Tamil Nadu) to Pant Nagar (Uttarakhand) includes payments made for transportation for other stations. The experience certificate can thus not be styled as an experience certificate for a. single contract. Treating it as a certificate for multiple contracts as the tender evaluation committee has rightly done, petitioner indisputably is rendered ineligible for consideration for the price bid. Viewed thus, petitioner cannot be said to have demonstrated unequivocally that the experience certificate relied upon by it related to value of one single contract and the view adopted by the tender evaluation committee was irrational, arbitrary or based on non-application of mind. The view taken by the tender evaluation committee is the view of Experts in the field and in absence of such view being shown to be tainted, emanating from malafidies or arbitrariness, this Court would not be justified in substituting its own view by reading experience certificate in isolation of the clarification/verification made by M/s Dabur India Limited. 15. The petition being devoid of merit is dismissed along with all connected miscellaneous petition(s). Interim direction if any shall stand vacated. Petition dismissed