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2018 DIGILAW 166 (JK)

Ladakh Road Lines v. State of J&K

2018-03-16

SANJEEV KUMAR

body2018
JUDGMENT : Sanjeev Kumar, J. 1. The petitioner, a firm registered under the Jammu and Kashmir Partnership Act and engaged in the business of Motor Transport Service, has filed this petition, inter alia, claiming the following reliefs:- "a. WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION, the process of pending of Technical Bid and the Financial Bid of the respondent No. 4, for the allotment of work of providing of Trucks (HCVs/LCV's) District-wise in Kashmir province for 2017-2018 and 2018-2019, be quashed; b. WRIT OF MANDAMUS OR ANY OTHER WRIT, ORDER OR DIRECTION, the respondents be commanded to allot the work to the petitioner, as he is the next in line, or in the alternative consider the objections of the petitioner as also the complaint with regard to the opening of Technical Bid and the Financial Bid of the respondent No. 4, for the allotment of work of providing of Trucks (HCV's/LCV's) District-wise in Kashmir province for 2017-2018 and 2018-2019 and until the matter is so enquired into or investigated, not to allot the contract of providing of Trucks (HCV's/LCV's) District-wise in Kashmir province for 2017-2018 and 2018-2019 to anyone including respondent No. 4." 2. The facts giving rise to the filing of this petition, briefly stated, are that respondent No. 2 floated e-tender (104 of 2017) for supply of Trucks (HCV's/LCV's) for transportation of goods District-wise in Kashmir Province for the year 2017-2018 and 2018-2019. The e-tenders were invited for and on behalf of the Governor of Jammu and Kashmir and were to be submitted in DOUBLE COVER SYSTEM. The e-tender was issued on 02.05.2017 and bids were provided to be submitted from 10 a.m. of 02.05.2017 to 4 p.m. of 22.05.2017. It was further provided that the technical bids would be opened on 24.03.2017 at 3 p.m. in the office of respondent No. 2 in Srinagar followed by the financial bids to be opened on 25.05.2017 at 2 p.m. at the same venue. The detailed tender document issued as part of e-tender notice, inter alia, provided qualifications to be possessed by a bidder to qualify the technical bid. The relevant extracts of the Clauses of the e-tender documents which are relevant in the case may be noticed as under:- '3. SCOPE OF CONTRACT (To Qualify for Bid, Bidders must have following Technical Qualification): Cover-I (Technical Bid) It should contain the following details: .............................. The relevant extracts of the Clauses of the e-tender documents which are relevant in the case may be noticed as under:- '3. SCOPE OF CONTRACT (To Qualify for Bid, Bidders must have following Technical Qualification): Cover-I (Technical Bid) It should contain the following details: .............................. (o) The turnover during the last one year (exclusively on account of goods carriage through trucks) should not be less than Rs. 10.00 crore accrued in a year for the last 5 years (Copy of Balance Sheet, Profit and Loss Account, Duly audited for the last 5 years.) .............................. (s) The tenderer should have minimum five years experience for carrying of goods/commodities to any Government Department/Corporation/Semi Government/enterprises. [Note: The experience certificate should be supported by relevant work orders and its successful execution & completion, issued by the competent authority of the executants' department/agency]. (t) List of trucks with proper registration number duly Authenticated by competent transport Authority. (u) Every participating bidder must have a minimum fleet of 50 Heavy Commercial Vehicles (Trucks) of minimum pay load 9 MTs owned by him with valid documentary proof. Moreover, the bidder should also have atleast 100 heavy commercial vehicle (Trucks) attached with its own fleet. Hard copies of the relevant RCS/Root Permits/Certificate of Attachment issued or list certified by the concerned RTO shall have to be submitted/uploaded alongwith the Technical Bid (Details as per Annexure "A"). .............................. .............................. Cover-II (Financial Bid)-Checklist as Annexure-B to the NIT Financial Bid in the format of BOQ, uploaded on the site for supply of Trucks for Transportation of Goods 2016-17 & 2017-18. The Financial Bid of those tenderers only shall be opened who are found eligible for the same after scrutiny of the documents contained in Cover-I (note. No financial bid will be accepted in Off-Line mode). Price Bid as per Annexure-C has to be scanned, encrypted and uploaded on the provided website along with the tender document. The detailed NIT can also be downloaded from website www.jktenders.gov.in and e-tendering shall be completed on the same portal. .............................. .............................. 7. REJECTION/DISQUALIFICATION OF TENDERS a.................................. b. Tenders should be strictly in conformity with the prescribed terms and conditions and should not contain any conditions other than those prescribed. Tenders which deviate from defined terms and conditions are liable to be rejected. .............................. .............................. .............................. 22. .............................. .............................. 7. REJECTION/DISQUALIFICATION OF TENDERS a.................................. b. Tenders should be strictly in conformity with the prescribed terms and conditions and should not contain any conditions other than those prescribed. Tenders which deviate from defined terms and conditions are liable to be rejected. .............................. .............................. .............................. 22. INSPECTION The bidder shortlisted for transportation of foodgrains on the basis of Technical/Financial bids shall be inspected by the Nodal Officer to be nominated by Purchase committee/Contract Committee of the Department to conduct an inspection of trucks number-wise alongwith there ownership rights. During the inspection, if the information details furnished in Technical bids by the bidder is, at any stage, found false/incorrect, the bidder shall be liable for disqualification and EMD shall be forfeited. The final decision with regard to the award of contract shall be taken only after the submission of inspection report by the nominated officer deputed for the purpose. .............................. .............................. .............................. 39. WORK EXPERIENCE AND EXPERIENCE CERTIFICATE:- (a) Tenderer should have at least 5 years experience of transportation duly obtained from manufacturer/PSU/Govt. Department/Public Limited Company/Private Limited Company dealing in the field of fertilizers/Foodgrains, Cement Sugar, Coarse grains or any other commodity. Tenderer should have executed in any of the immediate preceding five years the work of value; In case of the partnership, only the experience of the firm will be reckoned and for the purpose, the experience of the individual partnership will not be counted. (b) Experience certificate in the Proforma prescribed at Annexure-E shall be produced from customers stating proof of satisfactory execution and completion of the contract(s) besides duly certifying nature, period of contract and value of work handled. (c) Every participating bidder must have a minimum fleet of 50 Heavy Commercial Vehicles (Trucks) of minimum pay load 9 MTs of its own and atleast 100 Heavy Commercial Vehicles attached to its own fleet and an affidavit in tits regard shall have to be submitted/uploaded. (d) The year for the purpose of experience will taken as financial year (1st April to 31st March) excluding the financial year in which tender enquiry is floated. .................................................................." It may, however, be pertinent to mention here that few conditions in the tender documents were modified/altered vide Corrigendum dated 10.04.2017 which corrigendum was also made part of the e-re-tender issued on 02.05.2017. .................................................................." It may, however, be pertinent to mention here that few conditions in the tender documents were modified/altered vide Corrigendum dated 10.04.2017 which corrigendum was also made part of the e-re-tender issued on 02.05.2017. The Corrigendum issued by the Department of Food, Civil Supplies & Consumer Affairs Department vide No. FCS&CA/Actts/Tender (Transport)/134/2017, dated 10.04.2017 be also noticed:- "Subject: Clarification regarding NIT for supply of trucks for transportation of foodgrains 2017-18. Sir, In the interest of administration viz-a-viz the series of representations received from transporters through different offices as mentioned above and in continuation to tits office letter of even No. Dated 13.02.2017, it is to intimate that the following points/conditions may be incorporated/deleted as detailed below: "a. The term of the contract should be 2 years instead of one year 2017-18 and 2018-19 instead of 2016-17 and 2017-18. a. Under Clause 15 of the tender (Other Terms and Conditions of the Contract) sub-clause (M, N and P) shall be deemed to have been deleted. b. Number of owned vehicles by the tenderer should be 25 instead of 50. However, 100 vehicles shall remain attached with its own fleet. c. Annexure "A" of tender form at serial No. 13 shall stand deleted as it pertains to the supply of commodity. d. Annual turnover of the tenderer shall be Rs. 10.00 crore in a year and/or Rs. 50.00 crore for the last five years instead of accrued in a year for last five years." 3. In response to the aforementioned e-tender both the petitioner and respondent No. 4 claim to have responded. From the stand taken by the government which is not disputed by either of them, both were found technically qualified in the technical bids opened on 24.05.2017. It is also not in dispute that pursuant to the opening of technical bids, the bidders who were declared qualified in the aforesaid technical bids were considered in the financial bid. There is also no dispute that as per the evaluation made in the financial bid, respondent No. 4 is the lowest bidder. 4. It is also not in dispute that pursuant to the opening of technical bids, the bidders who were declared qualified in the aforesaid technical bids were considered in the financial bid. There is also no dispute that as per the evaluation made in the financial bid, respondent No. 4 is the lowest bidder. 4. The petitioner, though does not dispute that the respondent No. 4 is the lowest bidder and, if held to be technically qualified in terms of the conditions of the tender, is entitled to the award of contract but the petitioner has seriously challenged the evaluation made by the Technical Bid Committee which had declared respondent No. 4 as technically qualified to participate in the financial bid. 5. The learned counsel for the petitioner during the course of arguments took this Court to various terms and conditions of the tender document and submitted that many terms and conditions which were essential conditions of the contract had not been met by respondent No. 4 and, therefore, declaring it to be technically qualified to participate in the financial bid was totally illegal, arbitrary and dehors the mandatory terms and conditions of the tender document. Learned counsel for the petitioner further submitted that immediately after the technical bids were opened by the official respondents, the petitioner brought it to their notice that the respondent No. 4 was not eligible to participate in the further tendering process as it was not technically qualified. It is also claimed that the petitioner submitted a representation to the Hon'ble Minister, Food, Civil Supplies and Consumer Affairs and copies whereof were also given to respondent Nos. 1 and 2 on 24.05.2017 itself when the technical bids were opened. It is urged that the official respondents without paying any heed to the representation filed by it, opened the financial bid of respondent No. 4 as well. Having been left with no option, the petitioner submitted, it made a complaint to the Hon'ble Minister concerned with copies to respondent Nos. 1 and 2. In the aforesaid complaint, once again, it was brought to the notice of the official respondents that the respondent No. 4 did not meet the requirements laid down in Clause-2 of the tender document laying down "scope of contract". 1 and 2. In the aforesaid complaint, once again, it was brought to the notice of the official respondents that the respondent No. 4 did not meet the requirements laid down in Clause-2 of the tender document laying down "scope of contract". It was also brought to the notice of the official respondents that respondent No. 4 did not have a fleet of 25 HCVs of minimum load 9MTS owned by it with valid documentary proof nor did respondent No. 4 was possessed of fleet of 100 HCVs attached with its own fleet. The petitioner also claims to have brought to the notice of the official respondents that the list of vehicles attached did not contain copies of the valid RCs/Route Permits nor the list was certified by the Regional Transport Officer, as was the requirement under the terms and conditions of the tender document. 6. The short grievance, therefore, as projected by the petitioner in this petition is that despite the fact that on the opening of technical bids it immediately submitted a representation to the Hon'ble Minister concerned highlighting lack of eligibility of respondent No. 4 to qualify the technical bid and thereafter also made a complaint immediately after opening of the financial bid of respondent No. 4, the official respondents without considering the representation/complaint started processing the issuance of contract in favour of respondent No. 4 which, submits learned counsel for the petitioner, could not have been awarded to respondent No. 4 because of lack of its eligibility to participate in the financial bid. 7. Per contra, learned counsel appearing for respondent No. 4 has vehemently refuted the contentions of the petitioner. Learned counsel for respondent No. 4 took all the pains to demonstrate that respondent No. 4 had strictly complied with all the terms and conditions of the tender document and the deviation, if any, was minor and only pertained to ancillary conditions of the contract. He, however, submitted that under the terms and conditions of the tender document and also in view of the inherent powers of the tendering authority, the minor deviation, that too, of the ancillary conditions of the contract could very well be waived by the tendering authority more so when it was in larger public interest to do so. He also pointed out the ineligibility of the petitioner to qualify the technical bid. He also pointed out the ineligibility of the petitioner to qualify the technical bid. Learned counsel, therefore, emphasised the fact that the official respondents declaring the petitioner also qualified in technical bid despite its not complying with the various terms and conditions of the tender document itself goes to show that at the time of evaluation of technical bids, the official respondents condoned minor deviations in larger public interest. He, therefore, submitted that even if the contention of the learned counsel for the petitioner with regard to lack of strict compliance with the terms and conditions of the tender document by respondent No. 4 was accepted, it was a case of giving the petitioner also a level play field by declaring it also qualified despite not adhering to the terms and conditions of the tender document strictly. He, therefore, submitted that since both the petitioner and respondent No. 4 were declared qualified by the official respondents by condoning the minor deviations from ancillary conditions of the contract, as such, the petitioner should have no grouse. The respondent No. 4 was the lowest bidder, as evaluated in the financial bid, therefore, entitled to the award of contract. 8. Before appreciating the rival conditions advanced on behalf of the petitioner and respondent No. 4, it would be apposite to consider the stand taken by the official respondents which, in the given fact and circumstances of the case, can be said to be neutral party expected to be only concerned with the larger public interest. 9. The reply given by the official respondents in response to grounds (c-d) and (f) of the writ petition needs to be taken note of:- "(c-d). In reply to ground (c-d) it is submitted that petitioner also participated in the bidding process, the petitioner in fact did not adhere to the conditions enumerated in the tender document. The petitioner was required to submit list of 25 owned vehicles in addition to that list of 100 vehicles attached to their company, the petitioner submitted list of 27 owned vehicles and list of additional owned vehicles in which the petitioner repeated the registration number of owned vehicles. Otherwise also the petitioner was in no way as lowest bidder. That respondents undoubtedly qualified technical bid and were lowest in the financial bid. Otherwise also the petitioner was in no way as lowest bidder. That respondents undoubtedly qualified technical bid and were lowest in the financial bid. The contract has not been awarded to any person as on date and as per the condition 17 and 22 of tender document the Government/Department Purchase Cum Contract Committee reserves the right either to accept or reject any tender without assigning any reason thereto including the lowest tenderer and if the information details furnished in technical bids is at any stage found false/incorrect the bidder shall be liable for disqualification. .............................. (f). In reply to ground (f) it is submitted that representation filed by the petitioner will be considered and otherwise also the contract has not been allotted to any one as on date and before allotment of contract the representation of the petitioner will be taken due care." 10. From the perusal of the reply filed by the official respondents, particularly, the reproduced portion, it transpires that the official respondents have contested the claim of the petitioner that respondent No. 4 was declared qualified despite the fact that it had not fulfilled all the pre-requisites laid down in the tender document. The declaration of respondent No. 4 as qualified in the technical bid has been justified by the official respondents by submitting that there was found to be no deviation from the terms and conditions of the contract and even if at all it was there, the same was condonable being the violation of ancillary conditions of the contract. This is so pleaded by the official respondents while responding to ground (e) which for facility of reference is also reproduced as under:- "(e). In reply to ground (e) it is submitted that requisite experience certificate as also submitted by the respondent No. 4 qualified the technical bid as well as was lowest in financial bid and what has been held in Poddar Steel Corporation v. Ganesh Engineering Works and others reported (1991) 3 SCC 273 that minor technical irregularities can be waved and it will be open to the authority to deviate from and not to insist upon the strict little compliance of the condition inappropriate cases. In the present case even minor technicality has not been deviated. In the present case even minor technicality has not been deviated. The condition (t) and (u) of technical bid has not been projected in appropriate way as condition (u) is as under:- Every participating bidder must have a minimum fleet of 50 Heavy Commercial Vehicles (Trucks) of minimum pay load 9 MTs owned by him with valid documentary proof. Moreover, the bidder should also have at least 100 heavy commercial vehicles (Trucks) attached with its own fleet. Hard copies of the relevant RCs/Route Permits/Certificate of Attachment issued or list certified by the concerned RTO shall have to be submitted/uploaded along with the Technical Bid (Details as per Annexure "A"). The Tenderer was required either to submit hard copies relevant RCs/route permits/certificate of attachment or list certified by the concerned RTO. The petitioner failed to qualify the bidding process and accordingly cannot be allowed to challenge the whole tender process." 11. I have given thoughtful consideration to the rival contentions. At the outset, I would like to deal with the preliminary objection raised by the learned counsel for the respondents with regard to the maintainability of this petition and the scope of this Court to interfere in the contractual matters. 12. The case law on the issue is legion and the judgment of the Supreme Court in the case of Tata Cellular v. Union of India, (1994) 6 SCC 651 is pioneer in the field. Para 94 whereof reads thus:- "(1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.... (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.... (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." 13. In a later judgment passed by the Supreme Court in the case of Michigan Rubber (India) Limited v. State of Karnataka and others, (2012) 8 SCC 216 , the Supreme Court after taking note of the development of law viz-a-viz interference of the constitutional Courts in the contractual matters laid down the following principles in para 23 of the judgment, which reads thus:- "23. From the above decisions, the following principles emerge: (a) The basis requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in tits process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to be State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fair and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government." 14. The learned counsel for the petitioner relied upon a judgment of the Supreme Court rendered in the case of Noble Resources Ltd. v. State of Orissa and Anr., AIR 2007 SC 119 and submitted that a distinction is required to be made between the matter which was at the threshold of the contract and a breach of contract. He submitted that, as held by the Supreme Court, scope of interference at the threshold stage of the contract was comparatively more than when the cause was brought before the Court after the contract had been finalized or a breach thereof was alleged. He drew my attention to paragraph 15 of the aforesaid judgment which needs to be taken note of:- "15. It is trite that if an action on the part of the State is violative the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contact and a breach of contract; whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter." 15. The scope of interference by this Court in exercise of its extra ordinary jurisdiction in contractual matter is now fairly well defined and there is, thus, no scope for admitting any ambiguity therein. The government or its instrumentality can be subject to judicial review to prevent arbitrariness or favouritism on its part. Needless to say that the Government or the tendering authority is well within its power to lay down certain preconditions or qualifications to ensure that the contractor has the capability and financial capacity and resources to successfully execute the contract. There is also no dispute with regard to the proposition that all conditions in the contract are not the mandatory conditions required to be complied with strictly in all situations. The terms and conditions forming the contract could be broadly classified into mandatory conditions of the contract and ancillary conditions of the contract. The conditions which are core to the contract and relate to the capability, capacity and resources of bidder are indisputably mandatory conditions of the contract as these are meant to ensure successful execution of the contract. There may be certain ancillary terms and conditions in the contract, strict adherence to which may not be insisted upon. The waiver or deviation from such conditions is always the discretion of the tendering authority, though such discretion has to be exercised in a fair, transparent and non-partisan manner. 16. In the backdrop of this legal position, I am not fully in agreement with the argument of learned counsel for the respondents that since the matter involved in this petition pertains to the realm of contract and, therefore, this Court has no jurisdiction to entertain this petition. Wherever, it is required to prevent arbitrariness or favouritism by the State in the matter of entering into contract with its citizens, this Court would step in to remedy such situation by exercising the power of judicial review. Wherever, it is required to prevent arbitrariness or favouritism by the State in the matter of entering into contract with its citizens, this Court would step in to remedy such situation by exercising the power of judicial review. In the instant case, the dispute has arisen at the threshold of the contract and therefore, in view of the law laid down in the case of Noble Resources (supra), the power of judicial review is more intrusive. However, the questions which have been raised by the petitioner as also the respondent No. 4 are disputed questions of fact. Therefore, this Court may not be in a position to decide such questions. Whether the petitioner or for that matter respondent No. 4 have actually complied with the mandatory terms and conditions of the contract is better left to be decided by the experts associated in the evaluation of the bids. In view of the stand of the official respondents that they have not yet accepted the bid of respondent No. 4 and that the representation made by the petitioner highlighting lack of respondent No. 4's eligibility to participate in the financial bids is under consideration, it would not be proper for this Court to decide the merits of the contentions raised by the petitioner and the respondents. It is the positive case of the petitioner that all the deficiencies in the tender document of respondent No. 4 have been highlighted by it in detail in the representation/complaint filed by it with the official respondents. The official respondents in their objections have not denied this assertion of the petitioner and have rather stated that the representation of the petitioner is under consideration. 17. In these circumstances, this Court feels that interest of justice would be met by directing the official respondents to dispose of the representation filed by the petitioner and stated to be pending consideration by a speaking order in a time bound manner. 18. Accordingly, this writ petition is disposed of by providing as under:- (i) The official respondents shall take a final decision on the representation/complaint filed by the petitioner against the decision of the official respondents declaring respondent No. 4 technically qualified to participate in the financial bid. The decision, as aforesaid, shall be taken by the official respondents within a period of four weeks from the date a certified copy of this order is received by them. The decision, as aforesaid, shall be taken by the official respondents within a period of four weeks from the date a certified copy of this order is received by them. (ii) While taking decision on the representation/complaint of the petitioner the official respondents shall be well within their right to consider as to whether the petitioner who was declared qualified in the technical bid alongwith respondent No. 4 was also technically qualified to participate in the price bid or not. The decision to be taken by the official respondents would be by way of a speaking order to be conveyed to the petitioner as well as respondent No. 4. (iii) Further decision with regard to award of contract to the eligible lowest bidder shall depend upon the consideration as directed above. (iv) The official respondents shall, however, be at liberty to re-tender the contract in question, if none of the bidders who had responded to the e-tender are found to be eligible to execute the contract or the official respondents otherwise feel such course to be in public interest. Record be returned back to the learned counsel for the Food Civil Supply & Consumer Affairs Department.