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2023 DIGILAW 542 (JK)

Tata Mobile 207 DI and Mahindra Max Mobile Pickup Cooperative Limited v. Union of India

2023-09-21

MOKSHA KHAJURIA KAZMI, N.KOTISWAR SINGH

body2023
JUDGMENT : N. KOTISWAR SINGH, J. 1. Heard Mr. Syed Riyaz Hussain, learned counsel for the appellant, Mr. T.M. Shamsi, learned DSGI, for the official respondents as well as Mr. Z.A. Qureshi, learned Senior Counsel for the private respondent No. 5. 2. The present appeal has been preferred against the order dated 18.08.2023 passed by the Ld. Single Judge in WP (C) No. 862 of 2023, by which the challenge made by the appellant - writ petitioner to the grant of contract in favour of the respondent No. 5 in terms of the NIT dated 23.11.2022, was rejected by the Ld. Single Judge. 3. The main thrust of arguments of the learned counsel for the appellant before us is that the private respondent No. 5, though was ineligible for participating in the said tender process, was awarded the contract, which is illegal. 4. It has been submitted by learned counsel for the appellant that the respondent No. 5 despite lacking the requisite criteria for participating in the tender was awarded the contract and, as such, the official respondents by allowing an ineligible bidder to take part in the bidding process and also awarding the same, has acted unfairly, arbitrarily and is, thus, against the mandate of Article 14 of the Constitution of India. 5. In the light of the aforesaid submission made, this Court would like to briefly refer to the relevant facts. 6. From the records, it is seen that the respondent authorities on 23.11.2022, had invited online bids from the registered Cooperative Transport Societies of Kargil region for provision of Civil Hired Transport (CHT) of load carrier 1/1.5-ton pickup (4 x 4), for estimated contract value of Rs. 1,85,23,528/- for the period from 01.04.2023 to 31.03.2024. 7. The said tender was for the purpose of hiring private transportation for supply of materials, rations etc. to the army locations in the forward areas of UT of Ladakh which are located at high altitude ranging from 17,000 to 18,000 ft and which remain cut off during the winter season. 8. Further details of the bid were later uploaded in the GeM portal on 09.12.2022 in which the following two requirements were also mentioned: (i) A minimum average annual turnover of the bidder (for three years) should be 20 lakhs. (ii) A minimum of 2 years of past experience is required for the same or similar service. 9. 8. Further details of the bid were later uploaded in the GeM portal on 09.12.2022 in which the following two requirements were also mentioned: (i) A minimum average annual turnover of the bidder (for three years) should be 20 lakhs. (ii) A minimum of 2 years of past experience is required for the same or similar service. 9. We are not concerned with the other terms and conditions of the Tender in this appeal inasmuch as, the controversy revolves around the issue that the respondent No. 5 was not eligible as contended by the appellant herein with reference to the aforesaid two criteria. 10. It is on record and not in dispute that the respondent No. 5 is a registered Cooperative Society which came into existence on 24.07.2021. Learned counsel for the appellant submits that as per the bid document, any prospective bidder is required to possess a minimum of 2 years of experience as a registered Cooperative Society to be eligible for participation in the tender process. It has been accordingly, contended that as on the date of floating of the tender on 23.11.2022, the respondent no. 5 did not have the requisite 2 (two) years of experience of transportation as a registered co-operative society and, as such, the respondent no. 5 was not eligible. According to the appellant the said two years’ experience of transportation has to be in the capacity of a registered co-operative society, which the respondent no. 5 as a registered co-operative society did not have, as it was registered only on 27.04.2021. 11. Learned counsel for the appellant also contends that respondent No. 5 did not meet the requirement of the minimum average annual turnover of Rs. 20 lakhs for the preceding three years. 12. It has been accordingly, submitted that since the respondent No. 5 was not eligible, the award of contract to respondent No. 5 by the authority was unfair and thus, vitiated, hence, liable to be set aside, and the appellant, who was the second highest bidder after the respondent No. 5 ought to have been awarded the contract in lieu of respondent No. 5. 13. Ld. Counsel for the petitioner, Mr. 13. Ld. Counsel for the petitioner, Mr. Syed Riyaz Hussain has accordingly, submitted that the respondent authority by ignoring the terms of the tender awarded the contract to an ineligible bidder who does not fulfil the essential requirements stipulated in the NIT has acted in an unfair manner, and when the State is dealing with state largesse, any such act amounts to discriminatory and arbitrary action which cannot be countenanced in law being violative of Article 14 of the Constitution. In support of his pleas has relied on the following decisions: (i) Ramana Dayaram Shetty vs. International Airport Authority of India, (1979) 3 SCC 489 (ii) Union of India vs. International Trading Co. (2003) 5 SCC 437 (iii) Col. A.S. Sangwan vs. Union of India and Others, 1980 (Supp.) SCC 559 (iv) Kumari Shrilekha Vidyarthi and Others vs. State of U.P. and Others, (1991) 1 SCC 212 (v) Meerut Development Authority vs. Association of Management Studies and Another, (2009) 6 SCC 171 14. The registration of the respondent No. 5 as a Cooperative Society on 24.07.2021 is not in dispute. However, the contention of the official respondents as well as the private respondent no. 5 is that the requirement of the NIT is not about having two years of past experience as a registered Cooperative Society. In fact, that is something which has been read into by the appellant in the NIT which is not permissible. According to the respondents, the requirement is of having two years experience, whether as a registered co-operative society or merely as a co-operative society even if not registered. 15. Mr. T.M. Shamsi, Ld. DSGI for the official respondents, submits that a perusal of the requirements in the NIT would clearly show that the bidder must be a registered Cooperative Society operating in Kargil region in accordance with the Government of India, Ministry of Defence’s letter No. 75681/ADJMOV budget/1277/DS/2006 dated 27.03.2006 and nothing is mentioned about the period of the said registration which would determine the eligibility of the bidder. 16. It has been submitted that the details of the Bid Documents as uploaded in the GeM portal on 09.12.2022 has to be read along with the terms of the NIT uploaded on 23.11.2022. 16. It has been submitted that the details of the Bid Documents as uploaded in the GeM portal on 09.12.2022 has to be read along with the terms of the NIT uploaded on 23.11.2022. He submits that a minute reading of the aforesaid condition regarding the two years’ experience of the registered Co-operative Society mentioned in the details of the Bid Document uploaded on 09.12.2022 would show that the two years of past experience required is only in respect of same or similar service of providing transport facility, not necessarily in the capacity of a registered co-operative society. 17. Referring to Para No. 4 of the NIT dated 23.11.2022, Mr. Shamsi submits that it has been clearly mentioned in the said paragraph that all transport co-operative societies registered with Deputy Registrar, Kargil, are invited to participate in e-tendering without mentioning that they must have the experience of two years as a registered co-operative society. However, what has been provided, as mentioned in the details of the Bid Documents uploaded in the GeM portal on 09.12.2022, is the minimum requirement of two years’ experience in the field, which necessarily does not mean that such experience has to be garnered after registration by the bidder. 18. Mr. T.M. Shamsi, Ld. DSGI, submits that even if a bidder interprets the term of the tender in his own way, it is the interpretation of the tendering authority, not of the bidders which must prevail. In support of his submission, learned counsel places reliance on the decision of the Hon’ble Supreme Court in Agmatel India Private Limited vs. Resoursys Telecom and Others, (2022) 5 SCC 362 . 19. According to Mr. T.M. Shamsi, Ld. DSGI, as regards the experience of transportation, the respondent no. 5 has annexed a certificate issued by the Deputy Registrar, Drass, that the respondent no. 5 has been associated with the Government/Private Departments since last 4 (four) years and had provided TATA Mobile Vehicles on demand as per requirement of the Department at SDM Office, Drass and the said Respondent no. 5 has delivered goods and services and its components. This document has not been disputed by the appellant. 20. Further, as regards the allegation that the respondent no. 5 does not have the requisite minimum average annual turnover, it has been submitted that respondent no. 5 has annual turnover of more than stipulated Rs. 5 has delivered goods and services and its components. This document has not been disputed by the appellant. 20. Further, as regards the allegation that the respondent no. 5 does not have the requisite minimum average annual turnover, it has been submitted that respondent no. 5 has annual turnover of more than stipulated Rs. 20 lakhs and hence, this allegation is also without any substance. 21. It has been accordingly submitted that there was no violation of terms of the NIT and hence, awarding of the contract to the respondent No. 5, who is the lowest bidder, cannot be said to be illegal. Mr. Z.A. Qureshi, Learned Senior Counsel, for respondent no. 5 also resisted the appeal on the same and similar grounds as urged by Mr. T.M. Shamsi, Learned DSGI and in support relied upon the following decisions: (i) Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517 (ii) Afcons Infrastucture Limited vs. Nagpur Metro Rail Corporation Ltd. and Another, (2016) 16 SCC 818 (iii) N.G. Projects Limited vs. Vinod Kumar Jain and Others, (2022) 6 SCC 127 22. In view of the above limited area of controversy, we would confine ourselves in examining the rival contentions in respect of these issues only. 23. A reading of the notice inviting tender clearly shows that the tender was open to all registered Cooperative Societies in Kargil region in accordance with Government of India, Ministry of Defence’s letter No. 75681/ADJMOV budget/1277/DS/2006 dated 27.03.2006. 24. In the said NIT dated 23.11.2022, which was uploaded in the GeM portal, the Tender was open to all the bidders who were registered Cooperative Societies of Kargil region and there is no mention of the minimum years of experience. However, the requirement of a minimum number of two years of experience can be found in the details of the Bid Documents which was uploaded in GeM portal on 09.12.2022. 25. There cannot be any doubt that the details of the Bid Documents uploaded in the GeM portal on 09.12.2022 has to be read along with the original NIT dated 23.11.2022 and as such, the contents of the NIT dated 23.11.2022 has to be understood in the light of the specifications mentioned in the details of the Bid Documents uploaded on 09.12.2022. 26. 26. Much emphasis has been placed on the details of the Bid Documents uploaded on 09.12.2022 by the learned counsel for the appellant for contending that the minimum years of past experience required for same/similar services is two years as a registered co-operative society and only such bidder having such experience gained after registration can be permitted to participate in the bidding process. Otherwise, there was no need to insist that the bidders must be registered co-operative society. Thus, if a bidder does not have two years of past experience as a registered cooperative society for the same or similar services, the bidder cannot be said to be eligible. 27. On the other hand, the plea of the official respondents as well as private respondent no. 5 is that the experience required as mentioned in the details of the Bid Document is two years of past experience required for same/similar service. It can also mean same/similar experience of the bidder whether in the capacity of registered cooperative society or an unregistered cooperative society. The said NIT of the details of the Bid Document does not specifically mention that the experience of two years must be only after it is registered as a co-operative society. 28. It has been submitted that as far as experience of the respondent No. 5 is concerned, it has been substantiated by a certificate dated 20.12.2022 issued by the Sub Divisional Magistrate, Drass, Kargil, which certifies that the respondent No. 5 had been engaged with the Government/private departments for the past four years, providing Tata Mobile vehicle services on demand in accordance with the departmental requirements. It has been accordingly contended that the aforesaid certificate would clearly indicate that even though the respondent no. 5 registered itself as a cooperative society on 24.07.2021, it already had the same/similar experience of more than four years. Accordingly, it has been submitted that it is not correct that the respondent No. 5 is not eligible. 29. Mr. T.M. Shamsi, learned DSGI, also has referred to Para 2 of the conditions relating to experience criteria mentioned in the details of the Bid Documents uploaded on 09.12.2022, which reads as follows: “2. Experience Criteria: in respect of the filter applied for experience criteria, the Bidder or its OEM [themselves or through resellers] should have regularly, manufactured and supplied same or similar Category Products to any Central/State Govt. Experience Criteria: in respect of the filter applied for experience criteria, the Bidder or its OEM [themselves or through resellers] should have regularly, manufactured and supplied same or similar Category Products to any Central/State Govt. Organization/PSU/Public listed Company for number of Financial years as indicated above in the bid document before the bid opening date. Copies of the relevant contracts to be submitted along with bid in support of having supplied some quantity during each of the Financial year. In case of bunch bids, the category of primary product having highest value should meet this criterion. It has been accordingly, submitted that, thus what is required is that the bidder must have experience of supplying service of transportation for at least two years which the respondent no. 5 already had.” 30. It has been submitted that in the light of the aforesaid condition made in Para 2 of the details of the Bid Document, it cannot be necessarily insisted that the bidder must have two years experience as a registered cooperative society when the bidder submits his bid. According to Mr. Shamsi, the aforesaid paragraph sufficiently demonstrates that there is no such requirement of the experience to be confined to the period after the bidder gets registered as a co-operative society. 31. This interpretation, according to Mr. T.M. Shamsi, learned DSGI, is also fortified by Clause 4 of the NIT, in which it has been clearly mentioned that all registered cooperative societies registered with the Deputy Registrar, Kargil, are invited to participate in e-tendering. The offer was made to all registered cooperative societies registered with the Deputy Registrar, Kargil irrespective of the year of registration. 32. It has been submitted that under the circumstances, it cannot be said that the interpretation of the authority that the past experience of two years as mentioned in the bid document need not be associated with the registration of the cooperative society and such interpretation of the authority ought to be accepted in view of the decision of the Hon’ble Supreme Court rendered in Agmatel India (P) Ltd. vs. Resoursys Telecom, (2022) 5 SCC 362 wherein it has been held that it is the interpretation of the employer/authority as regards the specific terms and conditions of the tender which should prevail over any dispute or an ambiguity about the interpretation of the terms and conditions of the tender. 33. 33. The rival contentions of the contesting parties obviously leads to this situation where a particular condition of the Tender regarding experience of the bidders has been interpreted by them differently to suit their respective claims though all the interpretations appear to be plausible. The appellant contends that this two years’ experience has to be only in respect of a cooperative society after it is registered. On the other hand, it is the contention of the official respondents as well as private respondent no. 5 that in absence of a clear stipulation in the tender notice of the requirement of the experience to be gathered only after registration, the past experience acquired when the cooperative society was not registered may be also counted. 34. Thus, the issue is, in view of the conflicting interpretations, which are all plausible, which one is to prevail. As regards this, it is now settled that in matters relating to Tender, which is an offer inviting bids, what are required and intended and what are in the mind of the author of the tender document, can best be explained by the author of the tender document. Thus, where there are ambiguities and multiple views on any term or condition are possible, the view and perspective of the author of the tender document or the employer will prevail. In this regard, one may refer to Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. (2016) 16 SCC 818 wherein it was held that: “13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala-fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision. 14.................... 15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala-fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala-fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.” 35. This view has been consistently followed in the subsequent decisions for which we may refer to the decisions in Agmatel India (P) Ltd. (supra), N.G. Projects Ltd. vs. Vinod Kumar Jain, (2022) 6 SCC 127 . In Agmatel India (supra) it was held as follows: “Interpretation of tender document: Relevant principles “24. The scope of judicial review in contractual matters, and particularly in relation to the process of interpretation of tender document, has been the subject-matter of discussion in various decisions of this Court. We need not multiply the authorities on the subject, as suffice it would be refer to the three-Judge Bench decision of this Court in Galaxy Transport Agencies (2020) 16 SCC 759 wherein, among others, the said decision in Afcons Infrastructure (2016) 16 SCC 818 has also been considered; and this Court has disapproved the interference by the High Court in the interpretation by the tender inviting authority of the eligibility term relating to the category of vehicles required to be held by the bidders, in the tender floated for supply of vehicles for the carriage of troops and equipment. 25. This Court referred to various decisions on the subject and stated the legal principles as follows: (Galaxy Transport Agencies Case, (2020) 16 SCC 759 , Paras 14-20) “14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. (2016) 16 SCC 818 this Court held: (SCC p. 825, Para 15) “15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. In Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. (2016) 16 SCC 818 this Court held: (SCC p. 825, Para 15) “15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala-fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.” 36. In the light of the aforesaid principle, in view of the interpretation given by the authorities which floated the tender, we will prefer to go with their interpretation. If that is so, it cannot be said that the respondent no. 5 does fulfill the eligibility criteria of having the requisite experience of the work contemplated for minimum two years, as the respondent no. 5 as a cooperative society has more than four years of experience of providing transportation service. 37. We have also noted that the assertion of the respondent no. 5 that his annual turnover is more than Rs. 20 lakhs for the last 3 years has not been disputed by the appellant before us. It has been brought on record that the turnover of the respondent no. 5 for the last three years are as follows: 2019-2020 Rs. 5,812,560/- 2020-2021 Rs. 5,998,216/- 2021-2022 Rs. 6,809,215/- These figures have not been disputed by the appellant. 38. Under the circumstances, it cannot be said that the respondent no. 5 does not fulfill the terms and conditions of the tender and that the authorities had acted in an unfair, arbitrary manner in violation of Article 14 of the Constitution in awarding the contract to the respondent no. 5. 39. We have been informed by Mr. T.M. Shamsi, Ld. DSGI, that the difference in the price quoted by the appellant and the respondent no. 5 is about Rs.20 lakhs, which is also not a small amount and awarding the contract to respondent no. 5 cannot be said to be against public interest. 40. 5. 39. We have been informed by Mr. T.M. Shamsi, Ld. DSGI, that the difference in the price quoted by the appellant and the respondent no. 5 is about Rs.20 lakhs, which is also not a small amount and awarding the contract to respondent no. 5 cannot be said to be against public interest. 40. It is also a fact that with the onset of winter, these forward army formations located in the high altitude areas where the civilian transporters are supplying materials will remain cut off within a month or so and these materials, rations which are required to be supplied in these forward areas are meant for the next six/seven months, and the term of the contract will also expire on 31.03.2024 and as such, time is the essence of the contract and does not brook any delay. Any delay in the execution of the contract would seriously jeopardize the preparedness of the defence forces in this highly sensitive and critical area of the nation and will certainly be against the national interest, if there be any delay. 41. Even otherwise also, there has been a paradigm shift in the judicial approach in dealing with tender matters. It is of course true that the basic principles governing examination of tender disputes as evolved in landmark cases like Airport Authority (supra) case continue to be applicable, yet the present trend is to be very circumspect while exercising the power of judicial review in interfering with the tender process so as not to cause delay in the development, commercial or critical projects. In this regard we may profitably refer to the decision in Jagdish Mandal vs. State of Orissa, (2007) 14 SCC 517 in which it was held that: “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. 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 interferences, 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. 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. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” 42. The aforesaid principles have been reiterated in N.G. Projects Ltd. (supra), National High Speed Rail Corporation Ltd. vs. Montecarlo Ltd. (2022) 6 SCC 401 . 43. Ld. Counsel for the appellants has drawn our attention to certain observations made by the Ld. The aforesaid principles have been reiterated in N.G. Projects Ltd. (supra), National High Speed Rail Corporation Ltd. vs. Montecarlo Ltd. (2022) 6 SCC 401 . 43. Ld. Counsel for the appellants has drawn our attention to certain observations made by the Ld. Single Judge while passing an interim stay order on 14.06.2023 that certain apparent contradictions in the proceedings of the Procurement Committee has cast doubt on the fairness and transparency of the tender process. However, the writ court subsequently had the occasion to examine the records in the light of the pleadings filed by the respondents and accordingly, repelled any such plea of alleged contradictions and irregularities. 44. Guided by the aforesaid principles as discussed above and applying these to the facts and circumstances of the case as adverted to above, we are not inclined to interfere with the well reasoned and articulated judgment of the Ld. Single Judge dated 18.08.2023 passed in WP (C) No. 862 of 2023. The Ld. Single Judge had considered all the relevant facts and submissions advanced by the rival parties and also came to the similar conclusion that the award of the tender to the respondent no. 5 does not warrant interference from the Court. 45. For the reasons discussed above, we are not inclined to entertain this appeal and the same is dismissed as devoid of merit.