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2022 DIGILAW 711 (RAJ)

GA Infra Private Limited v. State Of Rajasthan

2022-03-02

MAHENDRA KUMAR GOYAL

body2022
JUDGMENT Mahendra Kumar Goyal, J. - S.B. Civil Writ Petition No. 12057/2021 1. This writ petition has been filed assailing the legality and validity of the order dated 23.9.2021 passed by the second appellate authority whereby, the appeal preferred by the respondent No. 5 under the provisions of Rajasthan Transparency in Public Procurement Act, 2012 (for brevity-'the Act of 2012') against rejection of its technical bid, has been allowed. 2. Although, a number of prayers have been made in the writ petition; but, learned counsel for the petitioner confined his submissions qua relief No. 1 only and did not press the other reliefs. 3. The facts in brief are that the respondent No. 1 issued a Notice Inviting Tender (for short-'the NIT') No. 1/2021-22 for designing, providing, installation and commissioning of solar energy based borewell water pumping systems including comprehensive operation and maintenance for a period of seven years in various villages/towns of District Udaipur under PHED Region, Udaipur. It was a twin stage bid process, i.e., technical bid and financial bid. Total eight bids were submitted and the respondent No. 3, vide its letter dated 5.7.2021 found four bidders including petitioner as responsive whereas, bid of four bidders including respondent No. 5 was found to be non-responsive for the reasons stated therein. The first appeal preferred by the respondent No. 5 against the letter dated 5.7.2021 was dismissed vide order dated 14.8.2021; however, the second appeal has been allowed by the second appellate authority vide order dated 23.9.2021, impugned herein. 4. Learned counsel for the petitioner submitted that by the time second appeal was allowed, it was already declared as L-1 upon opening of the financial bid on 25.8.2021 and hence, the second appeal could not have been allowed without impleading it as a party-respondent. Shri Kumawat contended that once the process of tender was complete by declaring it to be L-1, the same could not have been reopened vide order impugned dated 23.9.2021 that too without affording it an opportunity of hearing. Learned counsel submitted that since technical bid of the respondent No. 5 was rejected vide letter dated 5.7.2021 on account of submission of wrong bid security declaration, the appeal preferred by the respondent No. 5 could not have been allowed in view of clause 21.4 of the NIT. Learned counsel submitted that since technical bid of the respondent No. 5 was rejected vide letter dated 5.7.2021 on account of submission of wrong bid security declaration, the appeal preferred by the respondent No. 5 could not have been allowed in view of clause 21.4 of the NIT. He, therefore, prayed that the writ petition be allowed and the order dated 23.9.2021 be quashed and set aside. 5. Per contra, Shri Anil Mehta, learned AAG submitted that the writ petition is premature inasmuch as the respondents are yet to take a decision regarding responsiveness of the respondent No. 5 as per the eligibility criterion of bid documents as directed by the second appellate authority. Drawing attention of the Court towards the letter dated 5.7.2021, learned AAG submitted that not only the respondent No. 5; but, in all four bidders including the petitioner whose bids were found to be responsive, were lacking one or another requirement in their bid documents. Shri Mehta submitted that even the petitioner was afforded an opportunity to submit a notarized copy of the bid security declaration and hence, it does not lie in its mouth to contend that the respondent No. 5, which was found non-responsive on account of submission of wrong bid security declaration which, as a matter of fact, was found to be a typographical error only, could not have been extended an opportunity to rectify the error. 6. Learned AAG submitted that participation of the respondent No. 5 in the bidding process, in case it is found to be responsive, would be in public interest as it may entail competitive price. He submitted that in absence of any allegation of mala fide or bias, this Court should refrain from interfering with the decision taken by the second appellate authority which has been accepted by the procuring entity. He, in support of his submissions, relied upon following judgments: 1. Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Private Ltd. & Ors.- (2016) 8 SCC 446 . 2. Central Coalfields Ltd. & Anr. v. SLL-SML (Joint Venture Consortium) & Ors.- (2016) 8 SCC 622 . 7. He, in support of his submissions, relied upon following judgments: 1. Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Private Ltd. & Ors.- (2016) 8 SCC 446 . 2. Central Coalfields Ltd. & Anr. v. SLL-SML (Joint Venture Consortium) & Ors.- (2016) 8 SCC 622 . 7. Shri Lodha, learned senior counsel on behalf of respondent No. 5, submitted that on account of a bona fide typographical error, number of NIT came to be mentioned as 10/20-21 in the tender documents instead of 1/2021-22 which, even otherwise also, was inconsequential, as it created no confusion as to its validity. He, in this regard, relied upon a Division Bench judgment of the Hon'ble Punjab and Haryana High Court in the case of Sushil and Company v. Food Corporation of India & Ors. 8. Learned Senior Counsel submitted that from the letter dated 5.7.2021, it is apparent that inasmuch as four bidders including the petitioner were given an opportunity to rectify the mistakes committed by them in the tender documents and hence, no fault can be found with the order impugned whereby the respondent No. 5, has also been extended similar treatment. Shri Lodha submitted that the procuring entity is yet to take a decision on its eligibility as directed by the second appellate authority and hence, the writ petition based on mere apprehension of the petitioner, is not maintainable. 9. With regard to sustainability of the order dated 23.9.2021 in absence of petitioner as one of the respondents therein, learned senior counsel, relying upon a judgment by the Hon'ble Apex Court of India in case of Silppi Construction Contractors v. Union of India & Anr.- 2020 (16) SCC 489 , canvassed that since the respondent No. 5 has challenged rejection of its technical bid only and by the time the second appeal was preferred, the petitioner was not declared as L-1, there was no occasion for impleading it as a party-respondent therein. He, therefore, prayed that the writ petition be dismissed. 10. Heard. Considered. 11. The letter dated 5.7.2021 reveals that the respondent No. 5 was declared non-responsive for the reason of submission of wrong security declaration which, ultimately, was found to be a typographical error in mentioning the bid number as 10/20-21 instead of 1/21-22. It is none's case that there was another bid with its number as 10/20-21. 12. 10. Heard. Considered. 11. The letter dated 5.7.2021 reveals that the respondent No. 5 was declared non-responsive for the reason of submission of wrong security declaration which, ultimately, was found to be a typographical error in mentioning the bid number as 10/20-21 instead of 1/21-22. It is none's case that there was another bid with its number as 10/20-21. 12. Clause 21.4 of the NIT provides as under: "21.4 If a tenderer is not substantially responsive it will be rejected by the department and will not be used for further evaluation. The financial offers of insubstantial tenderer will not be opened. The department's determination of a tender's responsiveness is to be based on the contents of the tender itself without recourse to extrinsic evidence." 13. Clause 21.3 provides as under: "21.3 Notwithstanding the preliminary examination, the departmental will determine the substantial tenderer. Substantial tenders are those, which meet the following requirements. Earnest money in the required format from a nationalized/scheduled bank is enclosed. Responsive to all requirements of the tender documents and the instructions to tenderers. No Clarification and substantiation required to access the quality of the offer. No deviations and reservations affecting the scope and quality of the work, limiting the rights of the department or the tenderers obligations, or whose rectification would affect the competitive position of the other substantial tenderer." 14. The material on record does not reveal that tender documents of the respondent No. 5 were lacking in any of the four essential requirements as enumerated in clause 21.3 of the NIT so as to render it substantially non-responsive entailing its rejection vide clause 21.4. Mere mentioning of wrong bid number in the tender documents does not go to the root of the matter and cannot be reckoned as altering any fundamental characteristic of the tender document. 15. A Division Bench of the Hon'ble Punjab Haryana High Court has, in case of Sushil and Company (supra), held as under: "8. We do not suggest that a typographical error can never be a ground for rejecting a bid. We limit our observations to cases such as this which involve not merely some but all the following features. 15. A Division Bench of the Hon'ble Punjab Haryana High Court has, in case of Sushil and Company (supra), held as under: "8. We do not suggest that a typographical error can never be a ground for rejecting a bid. We limit our observations to cases such as this which involve not merely some but all the following features. The error not only is but can be considered only as a typographical error and nothing else by any party especially the party issuing the tender and inviting the bids and by the person or authority entrusted with the task of evaluating the bids. The error could not have left the party inviting the bids or the person or authority evaluating the same in a state of confusion. The error was also inconsequential in every respect. For instance, the error has absolutely no significance or effect on the evaluation of the bids. The typographical error did not alter the terms and conditions of the proposed agreement between the parties. It has no consequence upon the terms and conditions of the proposed contract including as to the price. 9. The rejection of the petitioners' bid was, therefore, irrational and unreasonable and accordingly totally arbitrary. Irrational and unreasonable administrative actions are always subject to judicial review. In our view, the rejection of the tender in cases such as this is arbitrary and irrational. It is a view that no reasonable person could have adopted." 16. In the backdrop of the aforesaid provisions in the NIT and the judgment of the Punjab and Haryana High Court, this Court is not satisfied that the order impugned dated 23.9.2021 passed by the second appellate authority whereby, the respondent No. 5 has been permitted to make the correction of NIT number in already submitted original bid security declaration, is bad in law. 17. Once, the procuring entity has accepted the decision of the second appellate authority permitting the respondent No. 5, a bidder, to rectify an error in its tender documents, this Court should be loathe in interfering with the same. Their Lordships of the Supreme Court have, in case of Central Coalfields Ltd. & Anr. (supra), held as under: "48. Therefore, whether a term of the NIT is essential or not is a decision taken by the employer which should be respected. Their Lordships of the Supreme Court have, in case of Central Coalfields Ltd. & Anr. (supra), held as under: "48. Therefore, whether a term of the NIT is essential or not is a decision taken by the employer which should 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 as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be 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." 18. It is also trite law that this Court in its writ jurisdiction does not sit as an appellate authority over the second appellate authority. Unless, the decision suffers from a patent jurisdictional error or is arbitrary per se, no interference is warranted by this Court. It is also a well established legal principle that if two views are possible in the given facts and circumstances of a case, the writ court would not substitute its view with that of the appellate authority. A perusal of the order dated 23.9.2021 does not reveal it to be suffering from any such patent illegality or perversity warranting interference in writ jurisdiction. The Hon'ble Apex Court has, in the case of, Central Coalfields Ltd. & Anr. (supra), held as under: "43. Continuing in the vein of accepting the inherent authority of an employer to deviate from the terms and conditions of an NIT, and reintroducing the privilege-of-participation principle and the level playing field concept, this Court laid emphasis on the decision-making process, particularly in respect of a commercial contract. One of the more significant cases on the subject is the three-judge decision in Tata Cellular v. Union of India which gave importance to the lawfulness of a decision and not its soundness. If an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the Courts will not judicially review the decision taken. If an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala fide 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 in respect of a technical or procedural violation. This was quite clearly stated by this Court (following Tata Cellular) in Jagdish Mandal v. State of Orissa in the following words: (SCC P. 531, para 22) "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. 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. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. 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. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interference, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold." This Court then laid down the questions that ought to be asked in such a situation. Such interference, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold." This Court then laid down the questions that ought to be asked in such a situation. It was said: (Jagdish Mandal Case, SCC p.531, para 22) "22...Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to 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"; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226." 47. The result of this discussion is 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. As held in Ramana Dayaram Shetty the terms of the NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular 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" as held in Jagdish Mandal followed in Michigan Rubber." 19. Contention of the learned counsel for the petitioner that the respondent No. 5 could not have been given an opportunity to rectify the error in its tender document, does not merit acceptance for the reasons; firstly, as already held, the error does not go to the root of the matter, secondly, the petitioner itself was given an opportunity to submit a notarized copy of the bid security declaration. The letter dated 5.7.2021 further reveals that not only the petitioner; but, three other bidders were also given an opportunity to rectify the one or another deficiency in their tender documents which, even if not graver than the deficiency in the respondent No. 5's tender documents, in no way, were less graver than the typographical error committed by the respondent No. 5 in its tender documents. Their Lordships have, in the case of Bakshi Security and Personnel Services Pvt. Ltd. (Supra), held as under: "15. Similarly in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., this Court held as under:-(SCC pp. 571-72, para 66) "(i) if there are essential conditions, the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with; .." 20. In so far as the submission of the learned counsel for the petitioner that in absence of it being a party to the second appeal, the same could not have been allowed in favour of the respondent No. 5 is concerned, suffice it to say that by the time second appeal was preferred, the petitioner was not declared as L-1. In so far as the submission of the learned counsel for the petitioner that in absence of it being a party to the second appeal, the same could not have been allowed in favour of the respondent No. 5 is concerned, suffice it to say that by the time second appeal was preferred, the petitioner was not declared as L-1. Even otherwise also, the respondent No. 5 assailed rejection of its technical bid only without assailing the opportunity granted to the petitioner to rectify error in its bid documents. The Hon'ble Apex Court has, in the case of Silppi Construction Contractors (supra), held as under: "21. It has been urged by the learned counsel for the petitioner that the Division Bench of the High Court erred in holding that the writ petition was not maintainable without making all the tenderers parties to the petition. At the outset, we may state that the Division bench of the High Court has held that in all cases challenging the decision of the tendering authority, all the eligible tenderers should be made parties. We do not think such a broad proposition could be laid down as an inflexible rule of law. Supposing the tender documents are not sold/delivered to a party wanting to submit a tender, in such a case the other tenderers would not be necessary parties. In the present case the petitioner was only challenging the rejection of its technical bid. At this stage the other tenderers were not necessary parties. The position may be otherwise if a tenderer challenges a bid awarded to another or challenges the rejection of his bid at a later stage. In our view the writ petition was maintainable even in the absence of other tenderers because till that stage there was no successful tenderer. Who are the necessary parties will depend upon the facts of each case." 21. Therefore, the submission made does not merit acceptance. 22. Lastly, the contention of the learned counsel for the petitioner that once the bidding process was complete by declaring it to be L-1, the process could not have been permitted to be reopened, a consequence the order impugned dated 23.9.2021 would entail, cannot be countenanced. It is trite that mere declaration of a bidder as L-1 does not create any indefeasible right in his favour for award of work contract. 23. It is trite that mere declaration of a bidder as L-1 does not create any indefeasible right in his favour for award of work contract. 23. Clause 25 of the NIT provides as under: 25. Departments Right to Accept Any Tender and to Reject Any or All Tenders 25.1 The acceptance of the tender will rest with the department who does not bind itself to accept the lowest tender and reserves right to reject any or all of tenders received without assigning any reason 25.2 The department's right to accept or reject any or all tenders at any time prior to award of contract, will not incur any liability, to the affected tenderers, of the grounds for the department's action. 24. In view thereof, it cannot be held that the tender process is complete by declaration of the petitioner as L-1. 25. The upshot of the aforesaid discussion is that the writ petition deserves to be dismissed. 26. Accordingly, the writ petition is dismissed. However, any observation made by this Court herein-above shall not affect consideration of the responsiveness of the respondent No. 5 by the procuring entity in terms of direction dated 23.9.2021 by the second appellate authority. 27. The pending application, if any, also stands disposed of. S.B. Civil Writ Petition No. 12058/2021 28. Learned counsels for the respective parties submit that the controversy involved herein is identical as in S.B. Civil Writ Petition No. 12057/2021. 29. In view thereof, this writ petition is also dismissed. The pending application, if any, also stands disposed of.