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2019 DIGILAW 414 (RAJ)

Rosmerta Technologies Ltd. v. State of Rajasthan

2019-02-05

G.R.MOOLCHANDANI, PRADEEP NANDRAJOG

body2019
JUDGMENT : PRADEEP NANDRAJOG, J. 1. The appellant is the writ petitioner and is aggrieved by the judgment dated 30th November, 2018 passed by a learned Single Judge dismissing the writ petition filed by the appellant. Challenge in the writ petition was to the acceptance of the technical bid of M/s M. Tech Innovations Limited-Respondent No. 3. 2. A request for proposal was floated by the Transport Department of the State of Rajasthan on 18.10.2018 inviting bids to issue smart card based driving license/registration certificates. Clause 3.7 of the eligibility criteria as per the documents, vide Conditions Nos. 8 and 9 stipulated as under:- 8. The bidder/lead or consortium partner must have issued at least 50 lacs SCOSTA cards or must have processed at least 75 lacs Smart Cards for IT based Citizen Services (Delivery/Facilitation) applications for any state/central government/PSU in India in last 3 financial years as on bid submission date. The cards issued/proposed shall be the total number of cards issued during the financial year 2014-15, 2015-16 and 2016-17. The certificate of experience should be from the Client Department should be signed by an officer not inferior to the rank of Joint Commissioner or equivalent. 9. The bidder/lead bidder or consortium partner should have experience in the field of IT as a System Integrator/ Operation with at least one project of worth 15 crore or 3 projects of worth 5 crore each within the last 3 years as on the bid submission date. The experience of State/Central Government/PSU in India shall only be considered. A satisfactory working/ completion certificate issued by client or along with the certificate issued by the client towards work in progress for more than one years. The name and contact information (address, telephone number, fax, email id, website) of the client contact person must also be provided. The same Clause, vide Condition No. 15 stipulated as under:- 15. Power of Attorney (PoA) authorizing signatory for signing of the bid. In the format at Appendix-III 3. Clause 4.3 of the documents reads as under:- "4.3 Clarification of Bids (i) To assist in the examination, evaluation, comparison and qualification of the Bids, the bid evaluation committee may, at its discretion, ask any bidder for a clarification regarding its Bid. The committees request for clarification and the response of the bidder shall be through the e-Procuring portal. Clause 4.3 of the documents reads as under:- "4.3 Clarification of Bids (i) To assist in the examination, evaluation, comparison and qualification of the Bids, the bid evaluation committee may, at its discretion, ask any bidder for a clarification regarding its Bid. The committees request for clarification and the response of the bidder shall be through the e-Procuring portal. (ii) Any clarification submitted by a bidder with regard to its Bid that is not in response to a request by the committee shall not be considered. (iii) No change in the prices or substance of the Bid shall be sought, offered, or permitted, except to confirm the correction of arithmetic errors discovered by the committee in the evaluation of the financial Bids. (iv) No substantive change to qualification information or to a submission, including changes aimed at making an unqualified bidder, qualified or an unresponsive submission, responsive shall be sought, offered or permitted. (v) Document submitted during the clarification should not be of a date beyond the bid submission date." 4. Clause 4.6 reads as under:- "4.6 Non-material Non-conformities in Bids (i) The bid evaluation committee may waive any non- conformities in the Bid that do not constitute a material deviation, reservation or omission, the Bid shall be deemed to be substantially responsive. (ii) The bid evaluation committee may request the bidder to submit the necessary information or document like audited statement of accounts/CA Certificate, Registration Certificate, ISO/CMMI Certificates, etc. within a reasonable period of time. Failure of the bidder to comply with the request may result in the rejection of its Bid. However, document submitted by the bidder, shall not belong to the date after the last day of bid submission date. (iii) The bid evaluation committee may rectify non-material non-conformities or omissions on the basis of the information or documentation received from the bidder under clause 4.6(ii) above." 5. The documents required a process fee in sum of Rs. 1000/- by demand draft to be tendered in favour of the Managing Director, RISL. 6. While submitting the documents M/s M. Tech Innovations Limited tendered the bank draft in sum of Rs. The documents required a process fee in sum of Rs. 1000/- by demand draft to be tendered in favour of the Managing Director, RISL. 6. While submitting the documents M/s M. Tech Innovations Limited tendered the bank draft in sum of Rs. 1000/- in the name of the Transport Department and in purported compliance of Clause 3.7 submitted a certificate which reads as under:- "TO WHOMSOEVER IT MAY CONCERN This is to certify that M-Tech Innovations Limited, Plot No. 1-2 Rajiv Gandhi Infotech Park, Hinjewadi, Pune is provide and installed all the required hardware and software, trained man power and required smart cards, consumables for the smart card based DL/RC project in Rajasthan, Uttar Pradesh, Chandigarh and Andman Nicobar. It is also certified that, M-Tech Innovations Ltd. have supplied/personalized SCOSTA based Smart Cards of worth of more than Rs. 90 crores & more than 200 Lakhs Qty in last five financial years till December 2017. This request is issued on the request of M/s M-Tech Innovation Ltd. For National Informatics Centre Services incorporated. Sd/- (Sanjay Mahendru) DGM, NICSI." 7. Under the pretext of a clarification sought by the Tender Evaluation Committee, it submitted a certificate on 14.06.2018 which reads as under:- "TO WHOMSOEVER IT MAY BE CONCERN This is to certify that M-Tech innovations Ltd. Plot No. P-1/2 Rajiv Gandhi Infotech Park, Hinjewadi, Pune is provide and installed all the required hardware and software, trained man power and required smart cards, consumable for the smart card based DL/RC project in Rajasthan and Uttar Pradesh. It is also certified that M-tech innovations Ltd. have supplied/personalized SCOSTA based smart cards of worth of more than 75 Lakhs Qty. in the last three financial years. Quantity wise card issued:- Year Rajasthan Project Uttar Pradesh Project 2014-15 1642548 1305000 2015-16 1701332 1339325 2016-17 1698412 1482767 Total 5042292 4127092 The total SCOSTA cards Quantity supplied in last three years is about 916384. Sd/- (Sanjay Mahendru) DGM, NICSI." 8. In respect of the authority of the person who submitted the tender on behalf of M/s M. Tech Innovations Limited a Power of Attorney in his favour executed by the Managing Director of the Company was submitted. Sd/- (Sanjay Mahendru) DGM, NICSI." 8. In respect of the authority of the person who submitted the tender on behalf of M/s M. Tech Innovations Limited a Power of Attorney in his favour executed by the Managing Director of the Company was submitted. The format of the Power of Attorney as per the Appendix-III of the tender documents contained a note which reads as under:- "Note The mode of execution of the Power of Attorney should be in accordance with the procedure, if any, laid down by the applicable law and the charter documents of the executants and when it is so required, the same should be under common seal affixed in accordance with the required procedure. Wherever required the Bidder should submit for verification the extract of the charter documents and documents such as a board or shareholders resolution/power of attorney in favour of the person executing this Power of Attorney for the delegation of power hereunder on behalf of the Bidder." 9. Alongwith the Power of Attorney the Memorandum of Association and the Articles of Association of the Company were submitted. Article 79 (B) (xviii) stipulated as under:- "(xviii) To authorize and empower the Chairman or the Managing Director or the Manager and other Officer for the time being, of the Company, or such other person or persons as the Directors may think fit to exercise and perform all or any of the powers, authorities and duties conferred or imposed upon the Directors by these presents." 10. No resolution of the Board was submitted empowering the Managing Director to execute the Power of Attorney. Relevant would it be to note that as per Article 79 the business of the Company was required to be managed by the Board. 11. The grievance of the appellant was that the requirement of Clause 3.7 required the bidder to have issued at-least 50 lacs SCOSTA cards or must have processed at least 75 lacs smart cards for IT based citizen services for any State/Central Government/PSU in India in the last three financial years i.e. the total number of cards issued should be during the financial years 2014-15, 2015-16 and 2016-17. Additionally, the bidder should have experience of the field of IT as a System Integrator/Operator with at-least one project of worth Rs. 15 crores or three projects of worth Rs. 5 crores each within the last three financial years. Additionally, the bidder should have experience of the field of IT as a System Integrator/Operator with at-least one project of worth Rs. 15 crores or three projects of worth Rs. 5 crores each within the last three financial years. That the respondent No. 3-Company submitted the certificate, as above noted, which certified that in the last five years it had supplied SCOSTA based smart cards of worth of more than Rs. 90 crores and more than 200 lacs quantity in the last five financial years till December, 2017. As per the appellant the respondents could not have permitted the Company, under the pretext of a clarification to submit the certificate dated 14.6.2018. 12. As per the appellant Clause 4.3, under the caption "Clarification of Bids" permitted a clarification, which inherently means if there was any ambiguity detected in the bid. As per the appellant there was no ambiguity in the certificate furnished by the respondent No. 3 and thus it could not be permitted to file the certificate subsequently on 14.6.2018. 13. As per the appellant, under the Rajasthan Transparency in Public Procurement Rules, 2013 only non-material deviations could be waived or rectified. 14. The view taken by the learned Single Judge vide impugned judgment is that submitting bank draft in sum of Rs. 1000/- as process fee in the name of the Transport Department was insignificant. That since the Articles of Association of the Company authorized the Managing Director to act on behalf of the Company, the Power of Attorney executed by the Managing Director in favour of the person who submitted the bid documents was in compliance with the tender documents. The learned Single Judge has held that the respondents were justified in seeking clarification from the Company concerning the original certificate which was submitted in compliance with Clause 3.7 of the tender documents. 15. From a perusal of the afore-noted facts it is crystal clear that Clause 3.7 required the number of smart cards and the value thereof to be restricted to the last three financial years and not five. There is no ambiguity in the said clause. 16. 15. From a perusal of the afore-noted facts it is crystal clear that Clause 3.7 required the number of smart cards and the value thereof to be restricted to the last three financial years and not five. There is no ambiguity in the said clause. 16. In a somewhat similar circumstance the Division Bench of the High Court of Andhra Pradesh at Hyderabad in the decision reported as Ramky Infrastructres Ltd. vs. Lakshmi Metal Industries and Constructions and Others, 2005 (1) ALD 49 held that under the pretext of a clarification, a non-responsive bid could not be allowed to be corrected to be made responsive. 17. The facts of the said case were pertaining to the execution of the work to develop new internal roads, footpaths, parking, landscaping and providing MS grill etc. in A.P. Secretariat, Hyderabad. The bidders were required to submit a certificate of having executed similar electrical works totalling Rs. 6.75 lacs in any one financial year during last five financial years. The experience certificate could also be of a Sub-contractor. The Company submitted an experience certificate of its Sub-contractor to the effect that it had the requisite valid electrical license and had executed two works in sum of Rs. 20,09,005/- and Rs. 22,97,620/- covered in the financial years 7.7.1997 to 10.9.1999 (3 years) and 7.2.2000 to 4.1.2001 (2 years) respectively. The certificate did not specify the amount of work executed in any one financial year during the last five years to satisfy the tender condition. This was permitted to be corrected. 18. The effect of the correction and the requirement of the condition of the tender was noted by the Division Bench in paragraph 7 of the decision as under:- "7. Thus, the certificate submitted by the writ petitioner was not in order and lacked essential and material particulars as per the tender notice of having executed similar electrical works totaling Rs. 6.75 lakhs in any one financial year during the last five financial years. Certificate not fulfilling this condition, obviously, had to be treated as non-compliance with the bid conditions or in other words it had to be taken as if the writ petitioner though had submitted a certificate that its sub-contractor possessed required valid electrical licence and registration for executing electrical works but had failed to specify the fact of having executed similar electrical works totaling Rs. 6.75 lakhs in any one financial year during the last five financial years. Instead of rejecting the tender of the writ petitioner, as envisaged under the conditions, the fourth respondent of its own sought a clarification. In other words, fourth respondent permitted the writ petitioner to fill in the lacunae found in the technical bid of not mentioning an essential and material fact of having executed similar electrical works totaling Rs. 6.75 lakhs in any one financial year during the last five financial years. The question, thus, before the learned Single Judge was, whether it was within the jurisdiction of the Superintending Engineer to have sought clarification and postponed the evaluation of the technical bids till clarification was received. In other words, whether the fourth respondent, after last date of submission of tender documents and after the technical bids were opened, could have permitted the writ petitioner to correct its certificate by obtaining clarification?.." 19. Holding that the action of the department was wrong, in paragraphs 10 and 11 of the decision, it was held as under:- "10. The question is, whether Clause 22.1 of the Standard Bid Document authorizes the Superintending Engineer to permit a clarification to be made as regards the essential qualification, which is lacking in the certificate furnished, in the absence of which, the technical bid is liable to be rejected. On a reading of the Clause, our answer would be in the negative that there is no such authority or jurisdiction to call for a clarification on the essential requirement of the certificates. The details and the certificates to be furnished as per the proforma available in the tender schedule in the bid documents are condition precedent, which, inter alia, required the bidder to append a certificate that either he or his sub-contractor possess valid electrical licence and registration and also a certificate of having executed the requisite electrical works of similar nature of the value mentioned therein in any one financial year during the last five financial years. A certificate not mentioning the value of work in any one particular financial year and certification mentioning the work carried out in two or three financial years jointly would not meet the requirement and, as per the conditions, the same is liable to rejected forthwith. A certificate not mentioning the value of work in any one particular financial year and certification mentioning the work carried out in two or three financial years jointly would not meet the requirement and, as per the conditions, the same is liable to rejected forthwith. Clarification that can be sought under Clause 22.1 would be such other information which is not a material or essential condition in the statements or documentary proof relating to technical bid. Clause 22.1 does not give authority to fill in the lacunae. In a case in which material particulars are otherwise mentioned, as are required to be mentioned, only on those particulars, a clarification can be sought, but, not in a case where the bidder has not furnished the requisite certificate that clarification could have been sought to make an invalid certificate a valid certificate. 11. The Supreme Court in W.B. State Electricity Board vs. Patel Engineering Co. (2001) 2 SCC 451 , held that negligent mistake in bid documents cannot be permitted to be corrected even on the basis of equity. The Supreme Court also held that strict adherence to instructions to bidders is essential and cannot be given a go-bye and equity has no role to play in such like cases. In the case before the Supreme Court, Clauses 27 and 29 of the Bid Document therein dealt with clarification of bids and correction of errors. The Supreme Court turned down similar argument that even if there is power vested to seek clarification and permit correction; such permission to carry out correction cannot be accorded on equitable basis in essential facts. It was held that it is essential to maintain sanctity and integrity of the process of tender and also award of contract. Relying on the ratio of the decision of Supreme Court, we are of the view that the respondents are bound by the conditions and the bid conditions ought to have been complied with scrupulously; otherwise non-adherence to the instructions would encourage and provide scope for discrimination, arbitrariness and favouritism, which are totally opposed to rule of law. The very purpose of issuing instructions is to ensure their enforcement; lest the rule of law would be a casualty. The very purpose of issuing instructions is to ensure their enforcement; lest the rule of law would be a casualty. The action of the fourth respondent in seeking clarification itself being bad in law, the writ petition ought to have been dismissed and no direction could have been issued by the learned Single Judge for evaluating the price bid of the writ petitioner, since its technical bid did not meet the essential eligibility criteria." 20. In our opinion the ratio of the said Division Bench judgment clearly applies in the instant case. 21. As held by the decision of the England and Wales Court of Appeal (Civil Division) reported as (2012) EWCA Civ 1203 The Queen on the Application of Hossacks (A Firm of Solicitors) vs. The Legal Services Commission, only ambiguities can be the subject matter of a clarification and if there is no ambiguity the same cannot be a subject matter of a clarification. 22. In the instant case, the tender documents were clear. The requirement of issuing the number of smart cards and value thereof was clearly enlisted to be pertaining to the financial years 2014-15, 2015-16 and 2016-17. The third respondent submitted the certificate giving consolidated figures for the last five financial years and this could not be corrected. 23. Contention of the appellant on this aspect of the controversy is accepted. 24. In relation to the Power of Attorney, suffice it to state that Article 79 of the Articles of Association of respondent No. 3, vide sub-clause (xviii) made it known that the Managing Director of the Company can act on behalf of the Company as authorized by the Board. The Article does not empower the Managing Director to execute any Power of Attorney in favour of a third person to bind the Company unless the Managing Director is empowered to do so under a Board resolution. 25. This aspect has not been noted and hence not dealt with by the learned Single Judge. 26. We concur with the appellant that there is a non-compliance of the tender documents, which prescribed the proforma of the Power of Attorney with a note appended. The note required proper authorization to be made known by furnishing the requisite documents. 27. 25. This aspect has not been noted and hence not dealt with by the learned Single Judge. 26. We concur with the appellant that there is a non-compliance of the tender documents, which prescribed the proforma of the Power of Attorney with a note appended. The note required proper authorization to be made known by furnishing the requisite documents. 27. On the third issue of bank draft in the name of the Transport Department and not the Managing Director, RISL, applying the maxim "de minimis" we hold that the respondents were justified in over-looking the said non-compliance in view of the trivial nature of the non-compliance. 28. The net result is that on the first two contentions the appeal succeeds. The impugned judgment dated 30th November, 2018 is set aside and the writ petition filed by the appellant is allowed with a declaration that the bid submitted by M/s M. Tech Innovations Limited was liable to be rejected being a non-responsive bid.