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2022 DIGILAW 1439 (BOM)

Prasad Sheth v. State Of Goa

2022-06-09

M.S.SONAK, R.N.LADDHA

body2022
JUDGMENT M.S. Sonak, J. - Heard learned Counsel for the parties. 2. Rule. The rule is made returnable immediately at the request of and with the consent of the learned Counsel for the parties. 3. The petitioner challenges the decision of the respondent no.2 rejecting the petitioner's technical bid in response to the E-Tender dated 10.12.2021 for urgent up-gradation of all 14 PHE laboratories, including supply of new Instruments/Equipments, Instrument Repairs, Chemicals, apparatus, and Glasswares, CRM Materials under Jal Jeevan Mission for PWD, Goa. 4. From the returns filed, it is apparent that the rejection of the petitioner's technical bid was on the ground that the petitioner had failed to submit the following documents along with his bid:- (a) Experience certificate stating that the petitioner had executed similar works during the last 10 years, in terms of Clause 4(e). (b) Declaration in terms of Clause (c) of the eligibility criteria. (e) Tender specific authorization either from the manufacturer or their authorized dealer as required under Clause (b) of the eligibility criteria. 5. Mr. Padgaonkar, the learned Counsel for the petitioner, submits that the petitioner furnished the necessary experience certificates in Clause 4(e) of the Notice Inviting Tender (NIT). He took us through the certificates on pages 49 to 69 and submitted that these certificates pertained to the supply of laboratory equipment and, therefore, there was compliance with Clause 4(e) of the NIT. He submits that experience in the supply and installation of spectrophotometers was only illustrative, and there was no requirement about three works of supplying such spectrophotometers. He submitted that the employer had misinterpreted the Clauses of NIT and arbitrarily rejected the petitioner's technical bid. 6. Mr. Padgaonkar submitted that the petitioner had not submitted the declaration in terms of Clause (c) of the eligibility criteria prescribed in the NIT, but the petitioner fulfilled this eligibility criterion. He submitted that the NIT did not require the production of such declaration at the time of submitting the bid. The petitioner, bona fide, believed that such declaration had to be submitted at the stage of work order if the employer ultimately accepted the petitioner's bid. He submitted that submission of such declaration was not even an essential term of the NIT, and based upon the same, the petitioner's bid should not have been rejected. He relied on Rashmi Metaliks Ltd. & Ors. V/s. Kolkata Metropolitan Development authority & Ors. He submitted that submission of such declaration was not even an essential term of the NIT, and based upon the same, the petitioner's bid should not have been rejected. He relied on Rashmi Metaliks Ltd. & Ors. V/s. Kolkata Metropolitan Development authority & Ors. (2013) 10 SCC 95 in support of this contention. 7. Mr. Padgaonkar submitted that the petitioner had submitted the necessary authorizations and, accordingly, there was no breach of Clause (b) of the eligibility criteria prescribed in the NIT. He referred to the authorization letters on pages 43 to 46 of the paper book to submit that the approved manufacturers had authorized the petitioner to supply their 'range of products.' He submitted that since the employer has not considered these authorization letters, there is arbitrariness involved in rejecting the petitioner's bid. 8. Mr. Padgaonkar finally submitted that the petitioner's bid would save the Respondent an amount of almost Rs. 60.00 lakhs. Therefore, the public interest is involved in awarding the work to the petitioner in preference to respondents nos.3 & 4. He relied on the decision of the Hon'ble Supreme Court in Jai Bholenath Construction V/s. The Chief Executive Officer, Zilla Parishad, Nanded & Ors. 2022 LiveLaw SC (542) in support of his contentions. 9. Mr. D. Pangam, learned advocate General appearing for the State/employer, defended the rejection of the petitioner's technical bid on the above three grounds. First, he submitted that the petitioner had furnished experience in the supply and installation of only two spectrophotometers and, therefore, was ineligible in terms of the NIT. Second, he submitted that the furnishing of declaration in terms of Clause (c) of the eligibility criteria was a mandatory requirement that the petitioner admittedly did not fulfill. Third, he submitted that the petitioner submitted authorization only for 4 out of 35 items that had to be supplied. He submitted that all these are valid grounds for rejecting the petitioner's technical bid. 10. Mr. Pangam submitted that in this petition, there are no allegations of malafides, and the employer has reasonably interpreted the NIT. He relied on the N.G. projects Limited V/s. Vinod Kumar Jain & Ors. aIR 2022 SC 1531 , Central Coalfields Limited & anr. V/s. SLL-SML (Joint Venture Consortium) & Ors. (2016) 8 SCC 622 and aarav Infratech Pvt. Ltd., representative Shri Sanjay Patil V/s. State of Goa, Through its Chief Secretary & Ors. He relied on the N.G. projects Limited V/s. Vinod Kumar Jain & Ors. aIR 2022 SC 1531 , Central Coalfields Limited & anr. V/s. SLL-SML (Joint Venture Consortium) & Ors. (2016) 8 SCC 622 and aarav Infratech Pvt. Ltd., representative Shri Sanjay Patil V/s. State of Goa, Through its Chief Secretary & Ors. 2021 SCC OnLine Bom 4589 to submit that the scope of judicial review in such matters is minimal and in the absence of any case of perversity, this Court should not interfere in the matter. 11. Mr. Kantak, learned Counsel for respondent no.3, adopted the submissions of the learned advocate General and submitted that respondent no.3 was fully eligible. He submitted that the petitioner failed to comply with the essential terms of NIT and, therefore, the respondents quite correctly rejected his bid. He submitted that because the petitioner had no authorizations regarding most of the items to be supplied, he could afford to give a low offer. Finally, he proposed that no public interest is involved in indulging the petitioner. He, therefore, urged for the dismissal of this petition. 12. The rival contentions now fall for our determination. 13. The scope of judicial review in such matters is quite well settled. In N.G. projects Limited (supra), the Hon'ble Supreme Court has held that the satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance. Therefore, unless the petitioner makes out a case of perversity or that extraneous consideration or malafides actuated the Technical Evaluation Committee, the Writ Court should usually refrain from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. 14. In Central Coalfields Limited & anr. (supra), the issue involved was whether the employer was justified in rejecting a bid for non-furnishing of bank guarantee (B.G.) in the prescribed format. The bidder had contended that the Bank Guarantee furnished by it was stricter than the one in the prescribed format. The bidder had also claimed that the furnishing of a Bank Guarantee in the prescribed format was not the essential condition of the NIT and, therefore, rejection of the bid was arbitrary and warranted interference. 15. The bidder had contended that the Bank Guarantee furnished by it was stricter than the one in the prescribed format. The bidder had also claimed that the furnishing of a Bank Guarantee in the prescribed format was not the essential condition of the NIT and, therefore, rejection of the bid was arbitrary and warranted interference. 15. The Hon'ble Supreme Court rejected the bidder's contentions by holding that it is not for the employer or Court to scrutinize every Bank Guarantee to determine whether it is stricter than the prescribed format or less rigorous, and the goalposts cannot be re-arranged or asked to be re-arranged during the bidding process to affect the right of some or deny the privilege to some. 16. The Court held that before interfering in tender or contractual matters in the exercise of the power of judicial review, the Court should pose itself the following questions : "(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone, or whether the process adopted or decision made is so arbitrary and irrational that the Court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached, and; (ii) Whether public interest is affected." Suppose the Court concludes that there are no mala fides involved and the employer's decision is not arbitrary irrational or intended to favour anyone. In that case, the Court should ordinarily refrain from interfering. 17. The Court held that it is a well-settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the Court should not be prompt to ascribe superfluity to the language of a document and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use. To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. as far as possible, the Court must avoid a construction that would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable. 18. as far as possible, the Court must avoid a construction that would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable. 18. The Court held that if an administrative decision, such as a deviation in the terms of the NIT, is not arbitrary, irrational, unreasonable, malafide, or biased, the Courts will not judicially review the decision taken. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder regarding a technical or procedural violation. a contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. 19. Suppose the decision relating to award of contract is bona fide and is in the public interest. In that case, courts will not interfere even if a procedural aberration or error in assessment or prejudice to a tenderer is made out in the exercise of the power of judicial review. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. 20. The Court held that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. The terms of the NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. There must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned, but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision that no responsible authority acting reasonably and in accordance with relevant law could have reached 21. In the context of whether the term of the NIT is essential or not, the Court held that the employer's decision on such an issue should normally be respected. In the context of whether the term of the NIT is essential or not, the Court held that the employer's decision on such an issue should normally be respected. Even if the term is essential, the employer has the inherent authority to deviate from it, provided the deviation is made applicable to all bidders and potential bidders. However, if the employer holds the term as ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise, this Court would be taking over the function of the tender issuing authority, which it cannot. 22. The Court invoked the principle in Nazir ahmad V/s. King-Emperor aIR 1936 PC 253 and held that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden. This principle should be applied in contractual disputes, particularly in commercial contracts or bids leading up to commercial contracts, where there is stiff competition. It must follow from the application of the principle that if the employer prescribes a particular format of the bank guarantee to be furnished, then a bidder ought to submit the bank guarantee in that particular format only and not in any other format. The party issuing the tender (the employer) has the right to punctiliously and rigidly enforce the tender terms. If a party approaches a Court for an order restraining the employer from strict enforcement of the tender terms, the Court will decline to do so. The employer could deviate from the terms and conditions of the tender if the changes affected all intending applicants alike and were not objectionable. 23. The Court held that other bidders and those who had not bid could very well contend that if they had known that the prescribed format of the bank guarantee was not mandatory or that some other term(s) of NIT or GTC were not mandatory for compliance, they too would have meaningfully participated in the bidding process. In other words, by re-arranging the goalposts, they were denied the "privilege" of participation. 24. In other words, by re-arranging the goalposts, they were denied the "privilege" of participation. 24. applying the principles mentioned above to the facts of the present case, we are quite satisfied that the petitioner has not made any case warranting interference with the decision of the employer to reject his technical bid. 25. First, reference is necessary to Clause 4(e) of the NIT, which requires the bidder to submit copies of similar work for the last ten years. The expression "similar works" is defined in NIT in the following terms:- "Similar works means the tendered should have completed satisfactory, three works of supplying of laboratory equipments such as HPLC, Spectrophotometer, UPS, rotary vaccum Evaporator." 26. Generally, it is not for this Court to scrutinize the various certificates produced by a bidder. But having undertaken the exercise at the bidding of Mr. Padgaonkar, we find that the petitioner has furnished experience regards supplying only two and not three spectrophotometers. The contention that the remaining certificates are in respect of equivalent works or that they are in respect of laboratory equipment and, therefore, should have been regarded as sufficient cannot be countenanced having regard to the limited scope of judicial review in such matters. The employer's decision on this issue can hardly be said to be arbitrary or perverse, warranting interference. 27. admittedly, the petitioner failed to furnish a declaration in Clause (c) of the eligibility criteria. Clause (c) of the eligibility criteria reads as follows:- "(c) Participants must not have, during the last three years, failed to perform on any agreement, as evidenced by imposition of a penalty by an arbitral or judicial authority or a judicial pronouncement or arbitration award against the applicant neither been expelled from any project or agreement nor have had any agreement terminated for breach of contract by such applicant. a Notary attested declaration in this regard is required to be submitted." 28. The contention that there was no requirement of furnishing such a declaration at the time of bidding cannot be accepted. From the context, it is quite clear that such a declaration had to be submitted at the bidding itself because this was one of the eligibility criteria. a Notary attested declaration in this regard is required to be submitted." 28. The contention that there was no requirement of furnishing such a declaration at the time of bidding cannot be accepted. From the context, it is quite clear that such a declaration had to be submitted at the bidding itself because this was one of the eligibility criteria. The contention that the petitioner had factually fulfilled this criterion is neither here nor there because the employer was not expected to know whether the petitioner had fulfilled this criterion or not in the absence of the petitioner furnishing the declaration to this effect. Therefore, the issue of the petitioner's impression being bona fide or not is entirely irrelevant. at least the action of the employer is quite bona fide. Therefore, no case is made to interfere with the employer's decision, even on this score. 29. Learned advocate General referred to annexure B to the NIT, which sets out the list of 35 items to be supplied by the bidders. This annexure also references Equivalent Instrument Make and prescribes quite unambiguously the approved manufacturers qua each of the instruments or its equivalent. 30. The documents produced by the petitioner speak of authorization in respect of hardly 4 out of the 35 items to be supplied. Merely because the four certificates produced by the petitioner talk about 'range of products', we cannot say that the petitioner had produced authorization regarding each of the items that had to be supplied. In any case, we do not think that there is any arbitrariness or perversity involved in the employer's decision to insist upon authorization in respect of each of the items to be supplied or the employer's decision to not regard the vague statement in the authorization letters about the supply of 'range of products' as being sufficient compliance of the NIT. 31. Thus, no arbitrariness or irrationality is involved in the employer's decision to reject the petitioner's technical bid. Moreover, even the learned advocate General submitted that the probable reason why the petitioner had submitted a low financial bid was that he did not regard himself to be bound by the requirement of supply through the authorized manufacturers referred to in annexure B of the NIT. In any case, the financial bid of the petitioner was never opened by the employer because the petitioner's technical bid came to be rejected. 32. In any case, the financial bid of the petitioner was never opened by the employer because the petitioner's technical bid came to be rejected. 32. The issue involved in Rashmi Metaliks Ltd. & Ors. (supra) is not involved in the present case. The petitioner's technical bid has been rejected on the above three grounds that bear no similarity to the ground involved in Rashmi Metaliks Ltd. & Ors. (supra). Besides, in Central Coalfields Limited & anr. (supra), the Hon'ble Supreme Court made the following observations concerning its decision in Rashmi Metaliks Ltd. & Ors. (supra):- 45. Rashmi Metaliks Ltd. & Ors. (supra) was a comparatively different case inasmuch as Clause (j) of the NIT was the subject-matter of consideration. This Clause required a bidder to submit "Valid PaN No., VaT No., copy of acknowledgment of latest income tax return and professional tax return". The employer interpreted this to be an essential term for qualifying in the bidding process. This view was upheld by a learned Single Judge and the Division Bench of the Calcutta High Court. This Court reversed in the following words: "18. We think that the income tax return would have assumed the character of an essential term if one of the qualifications was either the gross income or the net income on which tax was attracted. In many cases this is a salutary stipulation, since it is indicative of the commercial standing and reliability of the tendering entity. This feature being absent, we think that the filing of the latest income tax return was a collateral term, and accordingly the Tendering authority ought to have brought this discrepancy to the notice of the appellant Company and if even thereafter no rectification had been carried out, the position may have been appreciably different." Essentially therefore, this Court substituted its view for that of the employer who interpreted this term of the NIT to be mandatory for compliance. Rashmi Metaliks (supra) followed Poddar Steel Corpn. V/s. Ganesh Engg. Works (1991) 3 SCC 273 and apparently overlooked the dictum laid down in Ramana Dayaram Shetty V/s. International airport authority of India (1979) 3 SCC 489 , G. J. Fernandez V/s. State of Karnataka (1990) 2 SCC 488 , Tata Cellular V/s. Union of India (1994) 6 SCC 651 and Jagdish Mandal V/s. State of Orissa (2007) 14 SCC 517 and must be confined to its own peculiar facts. In any event, this decision does not advance the case of any of the parties before us. 33. The decision in Jai Bholenath (supra) also turns on its facts. The Court found that the Respondent whose bid was earlier rejected was suddenly qualified in breach of principles of natural justice. Such an issue is not involved in this matter. 34. For all the reasons mentioned above, we are satisfied that the petitioner has not made any case warranting interference with the employer's decision rejecting the petitioner's technical bid. accordingly, this petition is liable to be dismissed, and the same is hereby dismissed. The rule is discharged. However, there shall be no orders for costs.