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2018 DIGILAW 346 (GAU)

Eastern Agro Marketing Agencies v. State of Assam

2018-02-22

SUMAN SHYAM

body2018
ORDER : Suman Shyam, J. 1. Heard Mr. U.K. Nair, learned senior counsel assisted by Mr. P.N. Phom, learned counsel for the writ petitioner. I have also heard Mr. M. Choudhury, learned senior counsel assisted by Ms. A. Verma, learned counsel appearing for the respondents. Aggrieved by the decision of the respondent authorities to cancel the tenders in question and to go for retender, the present batch of writ petitions have been filed. Since, all the three writ petitions are founded on identical facts giving rise to a common question of law, hence, I propose to dispose of the same by this common judgment 2. The respondent No. 2 had earlier issued e-tender notice inviting bids for supply of ICDS pretest school kits for Anganwadi Centers and Mini Anganwadi centers. The total number of kits to be supplied to the Anganwadi Centers was 15707 whereas 1455 kits were meant to be supplied to the Mini-Anganwadi Centers. The above quantities were split into three tenders which are (1) Tender Notice No. DSW(ICDS)G/56/2006/11 dated 09-11-2016 - 34 Nos.; (2) No. DSW(ICDS)G/56/2006/12 dated 09.11.2016 - 32 Nos. and (3) No. DSW (ICDS)G/56/2006/13 dated 9.11.2016 - 31 Nos. The three writ petitions arise out of the three tenders. 3. As per the conditions contained in section-1 of the NIT relating to qualification criteria, it was inter-alia mentioned that the bidders must submit Non-Toxic Certificate and Recycling Certificate from NABL Accredited Laboratory and that plastic should not be brittle. Responding to the aforesaid e-tender notices, the writ petitioner herein had submitted its bid in two parts i.e. technical and financial, for all the 3 tenders. After opening the technical bids, the documents were verified by the Technical Committee specially constituted for the said purpose, whereafter, the eligible bidders had been short listed. The name of the writ petitioner found place in the list of bidders whose tender had been accepted by the Technical Committee in respect of all the 3 tenders. Thereafter, the financial bids of the technically qualified bidders including the writ petitioner were opened and petitioner had emerged as the lowest (L-1) bidder. 4. The name of the writ petitioner found place in the list of bidders whose tender had been accepted by the Technical Committee in respect of all the 3 tenders. Thereafter, the financial bids of the technically qualified bidders including the writ petitioner were opened and petitioner had emerged as the lowest (L-1) bidder. 4. It is the case of the petitioner that after the result of the technical and financial evaluation of the bids were announced in the website, the petitioner was expecting to receive the work order and therefore, had started making preparation for commencing the supply immediately on receipt of the work order but was shocked to receive a communication from the respondent No. 2 on 03.06.2017 informing that the tenders have been cancelled. The petitioner was accordingly advised to visit the web portal for further details. 5. On receipt of the communication dated 03.06.2017, the petitioner had made relevant enquiries, whereafter, it had come to know that the Technical Committee had once again met on 02.06.2017 to re-verify the various documents pertaining to technical qualification of the bidders pursuant whereto the bids of all the bidders including the writ petitioner were found to be technically non-responsive. The above exercise was evidently carried out on the basis of a complaint made by an unsuccessful bidder, viz. M/s. Krishna Enterprise which had raised objection regarding the validity of the original decision of the Technical Committee wherein, a number of bidders including the writ petitioner were held to be technically qualified although no certificate in compliance with clause 2(e) of the Tender Notice were submitted by them. 6. By referring to the documents available on record, Mr. Nair, learned senior counsel appearing for the writ petitioner in all the three writ petitions has strenuously argued that the petitioner had submitted a Test Report of the samples offered by it from "ERIC Indian Research Laboratory" which is an NABL accredited Research Laboratory. The said report had clearly indicated that the level of toxicity of the product sample offered by the petitioner were far below the maximum desirable limit. The test report has been duly accepted by the Technical Committee as documentary proof so as to comply with Clause 2(e) & (f) of the tender document. Notwithstanding the same, the petitioner's technical bid was subsequently disqualified by taking a complete different view in the matter. According to Mr. The test report has been duly accepted by the Technical Committee as documentary proof so as to comply with Clause 2(e) & (f) of the tender document. Notwithstanding the same, the petitioner's technical bid was subsequently disqualified by taking a complete different view in the matter. According to Mr. Nair, after the declaration of the results of the bid evaluation, the petitioner entertained a legitimate expectation of commencing supply and earning some profit by executing me contract However, due to arbitrary and illegal decision taken by the respondents to cancel the tender and go for a fresh tender, the interest of the petitioner has suffered serious prejudice. Under the circumstances, a prayer has been made to set aside the impugned decision and remand the matter for reconsideration by the respondent authorities. 7. Mr. M. Choudhury, learned senior counsel appearing for the respondents, on the other hand, contends that in view of clause 2(e) of the tender specification, the requirement of furnishing documentary proof of the samples being non-toxic and recyclable in the form of a certificate from NABL accredited laboratory was a mandatory condition of the tender. That apart, as per clause 2(f), the tenderers were also required to submit proof that the plastic used in the kits were not brittle. According to Mr. Choudhury, the said clauses had been inserted in the tender document keeping in mind the fact that the articles were meant for use by young school children below the age of 6 years. However, in the present case none of the bidders including the writ petitioner had submitted any certificate which categorically indicated that the samples were non-toxic and made of recyclable plastic. 8. By referring to the various annexures of the writ petition, Mr. Choudhury submits that a number of bidders had already been disqualified by the Technical Committee on various grounds including the ground of non fulfillment of clause 2(e)&(f) of the tender documents. Admitting that the decision to go for a re-verification the technical evaluation process was triggered by the complaint submitted by M/s. Krishna Enterprise Mr. Choudhury submits that on re-verification of the relevant documents, the Technical Committee had arrived at a conclusion that the test reports submitted by the bidders did not fulfill the requirement of clauses 2(e) and (f) of the tender specification since none of the bidders had submitted the non-toxic certificate in the required format. Choudhury submits that on re-verification of the relevant documents, the Technical Committee had arrived at a conclusion that the test reports submitted by the bidders did not fulfill the requirement of clauses 2(e) and (f) of the tender specification since none of the bidders had submitted the non-toxic certificate in the required format. Under the circumstances, there was no option left for the respondents then to cancel the tender and go for re-tendering. 9. Mr. Choudhury adds that the Technical Committee was called upon to verify thousands of documents in the first round of verification within a very short period of time as a result of which the fact that the non-toxic certificate was not submitted by the tenderers had escaped its notice. However, having detected the above deficiency and considering the interest of the young children, the authorities decided not to take a chance with the safety features and hence, the impugned decision. 10. I find from the record that there were as many as 34 bidders who had submitted their tenders and the Technical Committee headed by the Director of Social Welfare, Assam, had met on various dates in between 17.02.2017 and 11.04.2017 for verifying the samples, documents etc. submitted by the bidders whereafter, the tenders of a number of bidders had been rejected on technical grounds. The minutes of the Technical Committee goes to show that a number of tenders were rejected on the ground of non-submission of" non-toxic certificate". The writ petitioner was one of the tenderers whose technical bid was accepted by the Technical Committee in respect of all the three tenders. 11. The financial bids of the eligible bidders were then opened pursuant whereto, the petitioner had emerged as the lowest bidder (L-1). But it was at that stage that the authorities had decided to carry out a re-verification exercise of the technical bids submitted by all the bidders. The Technical Committee had met in the office of the Directorate of Social Welfare, Assam on 02.06.2017 so as to re-verify the documents, where after it was found that none of the bidders had submitted the non-toxic certificate. The Technical Committee had met in the office of the Directorate of Social Welfare, Assam on 02.06.2017 so as to re-verify the documents, where after it was found that none of the bidders had submitted the non-toxic certificate. A perusal of the minutes of the Technical Committee dated 02.06.2017 goes to show that out of the 11 bidders whose price bids were opened, as many as 10 bidders including the writ petitioner were found to be technically non-responsive on the above ground where as the tender of one bidder viz. M/s. Price Agro Machinery was rejected on the ground that the said firm had not furnished samples with the name of the Firm inscribed on the sample. The decision which led to the disqualification of the writ petitioner would be relevant for the purpose of this case and is, therefore, reproduced herein below:- "The Committee has also observed that in Section-1: "Qualification Criteria" at point No. 2(e) it has been stated that the bidders must submit Non-toxic and Re-cycling Certificate from NABL accredited laboratory'. On re-verification of the bid documents, it has been observed that in the test report submitted by the following bidder the "Non-toxic and e-cycling certificate" is not mentioned anywhere. After a threadbare discussion, the Technical Committee has decided to disqualify the said bidder in Technical Evaluation. Sl. No. Name of Bidder Bid No. Tender ID Tender Reference No. Remarks 1. Eastern Agro Marketing Agencies, 257, Sreemanta Market, A.T. Road, Guwahati – 781001, Assam. 6691 2016_SWD_1196_1 DSW(ICS)G/56/2016/11 dtd. 09.11.2016 Rejected 6367 2016_SWD_1197_1 DSW(ICS)G/56/2016/12 dtd. 09.11.2016 Rejected 6702 2016_SWD_1198_1 DSW(ICS)G/56/2016/13 dtd. 09.11.2016 Rejected 12. Mr. Nair, learned senior counsel for the petitioner has fairly admitted that there was no certificate submitted by the petitioner from a NABL accredited Laboratory which goes to show that the samples are non-toxic and recyclable plastic which are non brittle in character. The learned senior counsel, however, contends that the Test Report from "ERIC Indian Research Laboratory" produced by the writ petitioner had contained sufficient data for the Technical Committee to draw an inference to the effect that the samples were non-toxic and made of recyclable plastic, thereby fulfilling the tender norms. Moreover, submits Mr. Nair, having learnt about the re-verification exercise the petitioner had obtained the "Non-Toxic" certificate dated 14.06.2017 from the competent laboratory and produced the same before the respondent authorities. Moreover, submits Mr. Nair, having learnt about the re-verification exercise the petitioner had obtained the "Non-Toxic" certificate dated 14.06.2017 from the competent laboratory and produced the same before the respondent authorities. Therefore, the doubt, if any, as regards the quality of the samples submitted by the petitioner on the point of non-toxicity stood fully resolved and hence, there was no occasion for the respondents to cancel the tender. 13. Law is by now fairly well settled that the Lowest bidder in a public tender does not have an indefeasible right to bag the contract and it would be open for the employer to reject the lowest bid or go for re-tender for valid reasons. The right available to the bidders in such matters extend merely to protection against arbitrary or unfair treatment by the authorities while processing the tenders. 14. In the case of Maa Binda Express Carrier Vs. North-East Frontier Railway reported in (2014) 3 SCC 760 the Supreme Court has observed that the scope of judicial review in the matter of award of Government contracts was limited and the bidders participating in the tender process cannot insist that their tender should be accepted simply because a given tender is highest or lowest. All that the participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. What is necessary is that the Government or its agencies must act reasonably and fairly and to that extent, the tenderer has an enforceable right. 15. In the case in hand, the respondents have taken a pleaded stand in their affidavit to the effect that the requirement of non-toxic, non-brittle and recyclable plastic was inserted in the tender keeping in mind the public interest and therefore, those were essential conditions of tender. Any relaxation in respect of the above clauses would jeopardize the interest of the children who are the beneficiaries of the products sought to be procured by the Government. 16. Clause 5 of the e-tender notice also contains a non-binding clause stipulating that the purchaser is not bound to accept any tender simply on the ground that its rates were lowest and that the purchaser had the liberty to cancel the tender for reasons to be recorded in writing. 17. In the case of Central Coalfields Limited & Ors. Vs. Clause 5 of the e-tender notice also contains a non-binding clause stipulating that the purchaser is not bound to accept any tender simply on the ground that its rates were lowest and that the purchaser had the liberty to cancel the tender for reasons to be recorded in writing. 17. In the case of Central Coalfields Limited & Ors. Vs. SLL-SML (Joint Venture Consortium) & Ors., reported in (2016) 8 SCC 622 it has been observed by the Supreme Court that the decision to accept or reject a particular bid should be looked into not only from the point of view of the unsuccessful bidder but also from the point of view of the employer. It has further been observed that whether a clause in the NIT is essential or not is a matter that should be left to the decision of the employer and if the decision making process is found to be fair and transparent, the writ Court, in exercise of power of judicial review would not interfere with such a decision. 18. Again in the case of Rishi Kiran Logistics(P) Ltd. Vs. Kandla Port Trust reported in (2015) 13 SCC 233 , the Supreme Court has held that the Government is the guardian of the State finances and is expected to protect it. In the matters of Government tenders, the right to choose cannot be considered as arbitrary so long as the decision is complying with the principles of Article 14 of the Constitution. 19. In the present case, as noted above, the writ petitioner had admittedly not submitted the "non-toxic" certificate nor was any proof submitted to show that the products were of "recyclable plastic". Whether the information contained in the Test Report were sufficient to draw the conclusion as suggested by the writ petitioner is a matter of discretion of the purchaser and the writ court cannot sit in appeal over the decision of the purchasing authorities in such matters. The mere fact that the writ petitioner had subsequently submitted another certificate on 14.06.2017 as proof on non-toxicity of the product goes to establish that the requirement of clause 2(e) was not initially complied by it 20. It is trite that the bids musts be evaluated on the basis of documents submitted along with the tender and not based on any material subsequently produced by the bidders. It is trite that the bids musts be evaluated on the basis of documents submitted along with the tender and not based on any material subsequently produced by the bidders. As such, the technical bid of the writ petitioner could not have been accepted without fulfilling the said requirement of clause 2(e). Permitting the petitioner to produce the toxicity certificate after the opening of the bids would amount to extending undue advantage to it which in turn would have exposed the department to unnecessary litigation at the instance of the other bidders. Since the respondent authorities had followed a transparent procedure applying uniform standards for rejecting all the bids and the decision to go for re-tender is based on cogent reason available on record, which, in the opinion of this court, addresses a serious issue of general public interest, the impugned decision cannot be termed as arbitrary or illegal. 21. Coming to the plea of legitimate expectation raised by the petitioner, what must be noted here-in that although the petitioner was the lowest bidder, yet, there was neither any work order issued nor any decision taken by the authorities to issue the work order in favour of the petitioner. The role of the bid evaluation committee, it must be remembered, is a recommendatory role and it would always be open for the employer to accept or reject the recommendations for good and sufficient reasons. Until and unless the decision of the employer to award the contract is formally communicated, no right is created in favour of the lowest or the highest bidder, as the case may be. 22. In the case of Bannari Amman Sugars Ltd. Vs. CTO reported in (2005) 1 SCC 625 , it has been held that a claim based merely on legitimate expectation without anything more cannot ipso facto give right 23. Similarly, in another decision of the Supreme Court in the case of Jitendra Kumar Vs. State of Haryana reported in (2008) 2 SCC 161 it has been observed that legitimate expectation is not the same as expectation. It is based on right and is different from desire or hope. In the case of P. Suseela Vs. UGC reported in (2015) 8 SCC 129 the Supreme court has held that legitimate expectation must always yield to larger public interest. 24. It is based on right and is different from desire or hope. In the case of P. Suseela Vs. UGC reported in (2015) 8 SCC 129 the Supreme court has held that legitimate expectation must always yield to larger public interest. 24. In the case in hand, save and except opening the financial bids the respondents had not taken any decision in the matter of awarding the contracts. It is no doubt true that having emerged as the technically qualified L-1 bidder, the writ petitioner could entertain a legitimate expectation to receive the work order. But such legitimate expectation of the petitioner stood negated once it was found that its bids were technically non-responsive. There is nothing in the tender document which prevented the employer from re-verifying the bids. 25. In the present case, there were legitimate grounds for the respondents to resort to re-verification of the technical bids which had eventually lead to the decision to cancel the tender. The decision to cancel the tender and to go for fresh tender is evidently prompted by lager public interest. There is also nothing to show that the decision making process was arbitrary or actuated by malice. Therefore, I am of the considered opinion that there is no right of the writ petitioner that can be enforced through these writ petitions. For the reasons stated hereinabove, these writ petitions are held to be devoid of any merit and are accordingly dismissed. There shall be no order as to costs.