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2024 DIGILAW 297 (MP)

Vikas Road Carriers, A Partnership Firm v. Central Warehousing Corporation

2024-03-20

RAVI MALIMATH, VISHAL MISHRA

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ORDER Mishra, J-- 1. This petition has been filed by the petitioner assailing the arbitrary action on the part of the respondent No.1 whereby the tender/bid of the petitioner has been cancelled for the reason which is not attributed to the tender documents. 2. It is the case of the petitioner that the petitioner is a partnership concern registered under the provisions of the Partnership Act. The respondent No.1 has floated tender for appointment of service provider for handling of Cement, Food grains and allied products i.e. Salt, Fertilizer and other commodities etc. of various depositors/udders at its Railside Warehouse Complex (RWC) Nishatpura Bhopal. The entire bid process was to be held on the respondent No.2 i.e GeM portal i.e. “Government e Marketplace” portal and the tender document was to be purchased from the said portal and other documents were to be uploaded on the said portal only. Clause 13 of the tender document provides that GeM portal is used only as a platform for procurement/tendering for appointment of service provider for Handling Rail/Road Borne Cargo at Rail side warehouse complex. All the terms and conditions contained in this NIT shall be applicable in whole tender process. The petitioner submitted the bid documents. In all five bids were received, out of which four bids could not qualify in the technical evaluation and after opening of the financial bid, the petitioner was declared as the lowest bidder (L1). He was waiting for the issuance of an LOI but to his utter surprise, the petitioner was shocked to see that his bid has been cancelled by the respondent. 3. It is argued that declaration of petitioner as L1 bidder by the tender inviting authority amounts to a concluded contract so far as respondent No.1 is concerned. So there cannot be any cancellation of the accepted bid of the petitioner. The petitioner’s tender has been cancelled for the reason that profile of the petitioner was suspended by the GeM portal owing to some dues which the petitioner has to pay to the GeM portal. The same are alien to the tender document. It is submitted that the bid of the petitioner has not been cancelled for any reason which are attributable to the tender inviting authority nor for any non-compliance or non-adherence to any of the terms and conditions of the tender inviting authority or the bid document. The same are alien to the tender document. It is submitted that the bid of the petitioner has not been cancelled for any reason which are attributable to the tender inviting authority nor for any non-compliance or non-adherence to any of the terms and conditions of the tender inviting authority or the bid document. The GeM portal is used only as a platform for holding the bid in the form of service provider. Rejection of bid of the petitioner on the ground that the petitioner’s account has been suspended by the GeM portal is per se illegal and arbitrary. Therefore, the present petition has been filed for setting aside the decision taken by the respondent No.1. 4. It is argued at length drawing attention of this Court to Clause 13 of the tender document wherein it is clearly mentioned that the GeM portal is used only as a platform for procurement/tendering for appointment of service provider for handling rail/road borne cargo at rail side warehouse complex. There is no other terms and conditions of the bid document that has been violated by the petitioner. The bid documents submitted by the petitioner have already been evaluated at the time of opening of the financial bid. The petitioner amongst the five participant was found to be successful bidder and was declared as L1. Therefore, just to accommodate or to extend the benefit to some other candidate, the entire bid has been cancelled. 5. It is pointed out that during the pendency of this petition, new NIT has been floated by the respondent No.1 which was put to challenge by the petitioner by filing an application being I.A. No.17437 of 2023 seeking for quashment of fresh NIT dated 23.8.2023. This Court vide order dated 27.10.2023 has stayed all further proceedings pursuant to the new bid vide Annexure P/6. 6. The counsel for the petitioner has pointed out that the deficiency which has been pointed out by the authorities has been rectified by him immediately and the defects have been removed. Now there is no suspension of the petitioner’s account on GeM portal. 6. The counsel for the petitioner has pointed out that the deficiency which has been pointed out by the authorities has been rectified by him immediately and the defects have been removed. Now there is no suspension of the petitioner’s account on GeM portal. Once after the technical as well as financial evaluation has been done and the petitioner has been found to be the successful bidder and declared as L1, the cancellation of the entire bid process will cause a great prejudice to him because the rates quoted by the petitioner are being declared and are known to all. Even the reason for disqualification of the petitioner is inappropriate owing to the fact that there is neither any violation of the terms and conditions of the NIT document nor any violation of the NIT issuing agency, rather the violation is between the petitioner and Government e Market place which happens to be only a platform for conducting the bid. Therefore, the instant petition. 7. On notice being issued, a detailed reply has been filed by the respondent No.1. It is pointed out that the terms and conditions of the bid document are clear and cogent which provide for that the tenders are invited through GeM portal. All the proceedings i.e. submission of the documents till the final decision are to be done by the GeM portal. The GeM portal has been selected as a platform to maintain transparency and to avoid any future dispute in the tender process and was in the interest of the public exchequer. Clause 14 of the bid document speaks of reserving the right of the Central Warehousing Corporation to accept or refuse the tenders without assigning any reason and the decision of the Corporation shall be final and binding on tenderer. The petitioner has accepted all the terms and conditions of the tender document which is reflected from his affidavit dated 05.08.2023. The provisions of GeM are to be followed by the authorities. The Incident Management GeM 3.0 was referred which provides for cancellation of bid in the event the bidder is found to be suspended after opening the price bid and after evaluating the price bid. The provisions of GeM are to be followed by the authorities. The Incident Management GeM 3.0 was referred which provides for cancellation of bid in the event the bidder is found to be suspended after opening the price bid and after evaluating the price bid. Attention has been drawn to Clause 11 of the GeM Incident Management Policy dated 1.7.2023 which deals with suspension and debarment which speaks of that “if the seller is found suspended at the time of financial bid opening date/time, offer will be marked as “disqualified” due to suspension. Buyer will not get option to evaluate further”. Therefore, the dates are very much relevant. The date of suspension of the petitioner at GeM portal is 7.8.2023 to\ 6.10.2023 and the said suspension was due to non-payment of transaction charges within the prescribed timelines as per GeM Revenue Policy. A show cause notice dated 27.7.2023 was issued to the petitioner that you have not paid transaction charges/annul milestone charges within the prescribed timeline as per the GeM Revenue Policy and the action amounts to violation of the GeM General Terms and Conditions and the same is a grave deviation as per the Incident Management Policy impacting the reputation and credibility of the GeM platform. It is due to the auto action of the system. The system further added a comment on 2.8.2023 addressed to Vikas Road Carriers i.e. the petitioner which was not responded within 5 days. It was duly informed that in case no response is filed within 5 days, the system will take action against your account and the account will be suspended as per the Incident Management Policy. 8. It is contended on behalf of the respondent that the petitioner was well aware of the aforesaid aspects and has chosen not to rectify the error which has been committed by him. The bid start date was 7.7.2023. The bid end date was 5.8.2023. The bid opening date was 5.8.2023. On the bid opening date i.e. 5.8.2023, the petitioner’s account was suspended on the GeM platform. The bid start date was 7.7.2023. The bid end date was 5.8.2023. The bid opening date was 5.8.2023. On the bid opening date i.e. 5.8.2023, the petitioner’s account was suspended on the GeM platform. Clause 13 of the bid document shows that all the terms and conditions mentioned in the NIT are applicable in the whole tender process, therefore, once 4 participants out of 5 have been disqualified earlier and finding the petitioner to be a successful candidate but owing to the fact that his GeM account has been suspended owing to his default, the decision was taken by the authorities to issue a fresh NIT to avoid any multiplicity of litigation. The right is always with the authorities to cancel the bid without assigning any reason. It is not a simplicitor case that the petitioner’s bid has been cancelled after he has been declared L1 for no fault of his own. The interference in tender matters in a petition under Article 226 of the Constitution of India is limited as has been examined and held by the Hon’ble Supreme Court in catena of decisions and recently in the case of Tata Motors Limited v. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and others reported in 2023 SCC OnLine SC 671. On these grounds, prayer is made to dismiss the petition. 9. Heard learned counsels for the parties and perused the documents. 10. It is not disputed that the NIT which has been floated by the respondents has to go through the Government e Market (GeM) platform. The interested parties to the bid were required to upload their documents on the GeM portal and the assessment has to be made through GeM portal. Clause 13 of the NIT document is relevant which reads as under : “13. Further, it is also intimated that GeM Portal is used only as a platform for procurement/tendering for appointment of Service Provider for Handling Rail/Road Borne Cargo at Rail side Warehouse Complex. All the terms and conditions contained in this NIT shall be applicable in whole tender process.” 11. The dates of tender are relevant. Admittedly, the bid start date was 7.7.2023. The bid end date was 5.8.2023. The bid opening date was 5.8.2023. The petitioner submitted the relevant documents on the GeM portal. All the terms and conditions contained in this NIT shall be applicable in whole tender process.” 11. The dates of tender are relevant. Admittedly, the bid start date was 7.7.2023. The bid end date was 5.8.2023. The bid opening date was 5.8.2023. The petitioner submitted the relevant documents on the GeM portal. It is again an admitted fact that the petitioner’s account on the GeM portal was suspended from 7.8.2023 to 6.10.2023. The document (Annexure P/5) reflects that the notice was issued to the petitioner by the System Admin on 27.7.2023 and thereafter, on 2.8.2023 asking for a response or clarification of the default committed by him but despite the same the defaults were not rectified by the petitioner prior to the bid opening date i.e. 5.8.2023. The account of the petitioner was placed under suspension till 6.10.2023. The petitioner may have been declared as an L1 bidder but the fact remains that he had to comply with all the terms and conditions of the bid documents as well as the fact is that the petitioner is governed by the GeM Incident Management Policy. 12. Clause 11 of the aforesaid Policy i.e. “Impact of Incident on an ongoing bid” reads as under: Suspended/Debarred 1. If the seller is suspended at the time of bid opening date/time, Seller will not get option to participate in the Bid. 2. If the seller is suspended at the time of financial bid opening date/time, offer will be marked as “disqualified due to suspension.” Buyer will not get option to evaluate further. 3. In case any bidder is suspended after financial bid opening, there will be no impact on the relevant bid due to such suspension and placement of order shall be allowed if the seller/SP is eligible for the same. 13. A reading of the aforesaid clearly reflects that if the seller is suspended at the time of financial bid opening date/time, he will be marked as “disqualified” due to suspension. The petitioner’s account was placed under suspension during the bid opening date. There is no dispute with respect to the aforesaid proposition. Therefore, the authorities have taken a decision to go for a fresh tender. It is not a case where the petitioner was not at fault at any point of time. The petitioner’s account was placed under suspension during the bid opening date. There is no dispute with respect to the aforesaid proposition. Therefore, the authorities have taken a decision to go for a fresh tender. It is not a case where the petitioner was not at fault at any point of time. He was well aware of the terms and conditions of the tender as well as that of the Incident Management on GeM. He was supposed to keep his account on the GeM portal active but he has failed to do so. 14. The law with respect to interference in tender matters is limited to certain extent as has been considered by the Hon’ble Supreme Court in large number of cases including in the case of Tata Motors Limited (supra), wherein the Hon’ble Supreme Court has considered the factum of interference in the tender matters and has held as under : “48. This Court being the guardian of fundamental rights is dutybound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that Courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior Courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the Courts should be even more reluctant because most of us in Judges’ robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The Courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the Courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. The Courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the Courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.” 15. In the case of Silppi Constructions Contractors v. Union of India reported in (2020) 16 SCC 489 , the Hon’ble Supreme Court has held as follows : “20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the Courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the Court does not sit like a Court of appeal over the appropriate authority; the Court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the Court’s interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The Courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case. ... 25. That brings us to the most contentious issue as to whether the learned Single Judge of the High Court was right in holding that the appellate orders were bad since they were without reasons. We must remember that we are dealing with purely administrative decisions. These are in the realm of contract. While rejecting the tender the person or authority inviting the tenders is not required to give reasons even if it be a State within the meaning of Article 12 of the Constitution. These decisions are neither judicial nor quasi-judicial. If reasons are to be given at every stage, then the commercial activities of the State would come to a grinding halt. The State must be given sufficient leeway in this regard. Respondents 1 and 2 were entitled to give reasons in the counter to the writ petition which they have done.” 16. These decisions are neither judicial nor quasi-judicial. If reasons are to be given at every stage, then the commercial activities of the State would come to a grinding halt. The State must be given sufficient leeway in this regard. Respondents 1 and 2 were entitled to give reasons in the counter to the writ petition which they have done.” 16. It is a well settled position of law that merely by participating in the tender, no right is created in favour of the bidder and the tendering authority cannot be precluded from its option to cancel the tendering process on any grounds. The tendering process, thus, can be cancelled at any stage before finalization. The tender is only an invitation to offer and the other party makes an offer pursuant to the invitation to offer, as such, it is not obligatory to the authority issuing tender to accept the offer and no right is created on the basis of merely being L1. Thus, the respondent was well within its right to cancel the tender before the acceptance was made. A right would accrue when a contract comes into existence. 17. In view of the aforesaid facts and circumstances of the case and the well-settled proposition of law on the subject, this Court does not find any good reason to interfere in the matter. These are contractual matters and it is always in the domain of the NIT issuing authority to take a decision. Rejection of bid is a purely administrative decision. The rights are reserved whether to accept/cancel the tender without assigning any reason and the decision of the Corporation shall be final and binding on tenderer. That being the condition in the tender document in the present case, no interference is called for. 18. The authorities have rightly arrived at the conclusion that they should go for a fresh tender. The petitioner can very well participate in the fresh tender proceedings. Mere declaration of price by the petitioner will not be of any help to him for the reason that he himself was at fault for not maintaining the active account on GeM portal at the time of consideration of the bid. Under these circumstances, no relief can be extended to the petitioner. 19. The writ petition sans merit and is accordingly dismissed. No order as to costs.