Wednesday, 3 September 2014

When petitioner is estopped from raising objection regarding tender process?


     Rejecting the contention of the petitioners this Court held that 
when the petitioners did not raise any protest when the date was extended and 
participated in the tender process and even in the first representation made by them 
did not even whisper about their objection regarding the extension of time of the 
tender in question.  The view so taken by this Court squarely apply to the facts of 

the present case also.   As has been elaborately discussed by us here before the 
petitioners participated in the tender process without raising any objection regarding 
scaling down the period of contract, splitting of the said contract and inclusion of 
clause(b) in the said contract.     Petitioners were therefore  estopped  from raising 
such objections at the belated stage.  
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
       NAGPUR BENCH, NAGPUR
Messrs B. Himmatlal Agrawal, 
   Vs
The Maharashtra State Power
Generation Co. Ltd., 

WRIT PETITION No.6096/2013
   
             CORAM : B.P. DHARMADHIKARI & P.R. BORA, JJ.
           
             DATE OF PRONOUNCING JUDGMENT :   7.04.2014.
JUDGMENT (Per P.R. Bora, J.)
Citation;AIR 2014 Bom 108

The   petitioners   are   the   Contractors   and   stated   to   be   working   with 
1]
  
respondent no.1 since last couple of years.  Petitioner no.1 has been carrying out 
the contract of cleaning and allied works in coal handling plant, CHP­II cold plant at 
KTPS, Koradi up to the year 2012­2013.   Petitioner no.1 was allotted the work of 
cleaning and allied works at KTPS, Koradi.   Petitioner no.2 is carrying out similar 
works at Koradi and Khaparkheda Thermal Power Stations.  Petitioner no. 2 is said 
to have successfully executed the contract of cleaning and allied works for the year 
2010­2011   at   Khaparkheda   Thermal   Power   Station.     He   is   also   stated   to   be 
carrying out contract with Khaparkheda Thermal Power Station for  house keeping 
and allied works including maintenance of auxiliaries   and   is also said to have 
carried out fabrication works.  
2]
A tender notice was published by respondent  no.1 having tender Code 

No. 35946 for “Six Monthly Contract for Cleaning and Allied Works including Round 
The Clock Monitoring & Servicing of Conveyor Belt in CHP Stage­II”   at Koradi 
Thermal Power Station.   Estimated cost of the said work was Rs. 1,63,20,500/­. 
Tender notice was published on 16th October 2013.  Tenders were to be submitted 
by 29.10.2013.  Both the petitioners submitted their tenders within time stipulated in 
the   said   tender   notice.     Two   bids   were   to   be   submitted;     first   was   Techno­
ig
Commercial Bid and another was Price­Bid.  Techno­Commercial Bid was opened 
on   29.10.2003   whereas   Price­bid   was   opened   on   02.11.2003.     The   tenders 
submitted by the petitioners were rejected at the stage of Techno­Commercial Bid 
itself since according to respondent no.1 they were not satisfying eligibility criteria 
as   laid   down   in   the   tender   documents.   The   subject­contract   was   allotted   to 
respondents     2   to   6.   The   action   of   respondent   no.1   of   rejecting   tenders   of 
petitioners  and awarding the same to respondents 2 to 6 is under challenge in the 
present petition.  
3]
It is the contention of the petitioners that their tenders were   rejected 
illegally and arbitrarily  to unduly favouring respondents 2 to 6 though they were not 
satisfying   the     eligibility   conditions   prescribed   in   the   tender   documents.     The 
::: Downloaded on - 03/09/2014 17:58:48 :::
    5
     wp6096.13
petitioners have further alleged that the tender notice was designed to favour and 
enable respondents 2 to 6, who were the only persons other than the petitioners 
who had offered bids.     It is further alleged that though all previous contracts for 
similar nature of work were ordinarily used to be annual contracts and used to be 
allotted on the experience of work and value of the work executed by the concerned 
contractor, the period of subject­tender was scaled down  to six months precisely to 
ig
accommodate  respondents nos. 2 to 6.   It is further alleged that in the qualifying 
requirements prescribed for the subject­tender Clause (b) was intentionally added 
so as to oust the petitioners from competing said tender. Clause (b) says that `the 
Tenderer should have adequate experience in mechanical maintenance, fabrication 
etc work, round the clock monitoring and servicing of auxiliaries and conveyors in 
CHP of various power stations of MSPGCL/NTPC/Other Thermal Power Stations'. 
4]
The petitioners have further alleged that  splitting of the said contract in 
five parts was also with an intention to  favour respondents 2 to 6.    According to 
the petitioners,  respondents 7 and 8 manipulated the terms of the contract to keep 
the same within their jurisdiction;  firstly by scaling down the time and secondly by 
splitting it into five parts or else the value of the contract would have exceeded 
::: Downloaded on - 03/09/2014 17:58:48 :::
    6
     wp6096.13
requiring the approval from the Head Office.     It is the   further contention of the 
petitioners that none of the respondents 2 to 6 has any experience of carrying out 
similar nature of work nor they are satisfying other qualifying requirements.  It is the 
contention of the petitioners that respondent no.1 being public body was required to 
act in a just, fair  and transparent manner and its action should be free from  vice of 
ig
arbitrariness and in conformity with Article 14 of the Constitution. 
The   petitioners     have,   therefore,   prayed   for   setting   aside   the   entire 
5]
process of the tender having code no.35946 and further to set aside the order of 
rejection   of  tender   to   petitioners  1   and   2.    The   direction   is   also   sought   against 
respondents 1, 7 and 8 to re­issue the tender by scrapping the work orders issued 
to respondents 2 to 6. 
  
6]
Though interim relief was also sought by the petitioners for directing the 
respondents 2 to 6 to stop work  during the pendency of the petition, it did not find 
favour by this Court.  
7]
All the respondents have submitted their reply affidavits.   Respondents 
::: Downloaded on - 03/09/2014 17:58:48 :::
    7
     wp6096.13
1, 7 and 8  have justified the act of awarding subject­contract   to respondent nos. 2 
to 6.   They have denied the allegations of mala fide  and favoritism.  According to 
these respondents, action initiated by the petitioners and the allegations raised by 
them in the present writ petition are afterthought.  The respondents have submitted 
that both the petitioners participated in the tender process without raising any of the 
objections, which  have  been  raised by them  in  the  present  petition.  It is  further 
ig
contended   that   only   after   rejection   of   their   tenders,   they   have   levelled   such 
allegations.   According to these respondents, no illegality has been committed by 
8]
them in awarding contracts to respondents 2 to 6.
Respondents 2 to 6 have submitted in their respective reply affidavits 
that they are quite eligible for award of the subject­contract and each of them has 
satisfied   the   eligibility   criteria     laid   down   in   the   tender   document   of   the   subject 
tender.     In   support   of   their   contentions   the   respondents   have   placed   on   record 
several documents.    
9]
Shri Samarth, learned counsel appearing for the petitioners first took us 
through   the   documents,   more   particularly,   the   work   orders   in   favour   of   the 
::: Downloaded on - 03/09/2014 17:58:48 :::
    8
     wp6096.13
petitioners   of   the   earlier   works   awarded   and   successfully   carried   out   by   them. 
Through the said documents, learned counsel attempted to bring to our notice that 
all   these   earlier  contracts   were   annual   contracts   and   further  that   they   were   not 
containing any such qualifying requirement that `the tenderer should have adequate 
experience   in   mechanical   maintenance,   fabrication   work   etc.   The   value   of   the 
contracts earlier allotted in favour of the petitioners and the fact that earlier  there 
ig
was no splitting of contracts was also brought to our notice.   The learned counsel, 
taking   us   through   tender   documents   of   earlier   contracts     and   current   contract 
showed the variations  in these two contracts and submitted that all these variations 
i.e. to scale down  the period of contract,  to  split the same into five parts  and to 
include the clause of experience in mechanical maintenance, were done with an 
ulterior   motive   of   making   undue   favour   to   respondents   2   to   6   and   to   oust   the 
petitioners from competition.  
10]
The learned counsel brought to our notice that on 02.11.2013 itself a 
letter was submitted to respondent no.1 clarifying that petitioner no.1 was having 
experience of mechanical and fabrication work and a certificate was also submitted 
showing that the work done by petitioner no.1 was including fabrication work.  The 
::: Downloaded on - 03/09/2014 17:58:48 :::
    9
     wp6096.13
learned counsel brought to our notice the work done certificate dated 23.05.2013 
issued by respondent no.1 in favour of petitioner no.1.  He also invited our attention 
to the work order dated 31.01.2007 in respect of construction of store shed so as to 
bring to our notice that the fabrication was the part of the said work.  The learned 
counsel   submitted   that   though   the   required   documents   were   submitted     within 
stipulated   time,     they   were   intentionally   ignored   by   respondent   no.1   and   the 
11]
ig
petitioners were wrongly held to be not eligible for award of such contract. 
The learned counsel further attracted our attention to the Pursis filed on 
behalf of the petitioners on 27.2.2014 and the tender documents annexed to the 
said pursis.  The petitioners have annexed tender details of the tender having Code 
No. 38433. It is an annual contract for `collecting Loading transporting and stacking 
of spilled coal in CHP'. The learned counsel submitted that the aforesaid tender 
supports  the contention of the petitioners that issuance of `annual contract' was a 
normal and established practice.   
The learned counsel thereafter took us through the documents filed by 
respondents 1 to 6 and referring to the contents of those documents submitted that 
::: Downloaded on - 03/09/2014 17:58:48 :::
    10
     wp6096.13
said documents were not sufficient to qualify them to bid the tender.  The learned 
counsel brought to our notice that respondent no.2 has annexed the documents of 
the present tender along with his reply to show that he is qualified for getting the 
said contract whereas condition was to place on record the previous experience of 
the similar nature of work.  Referring  to the work order dated 20.01.2012 issued in 
favour of respondent no.3, the learned counsel submitted that the work done by 
ig
respondent no.3 vide said work order was not similar to the work to be carried out 
by   subject   tender.     The   learned   counsel   referring   to   the   documents   filed   by 
respondent nos.4, 5 and 6 attempted to bring to our notice that documents filed  by 
these respondents to show that they have carried out similar types of work, in fact, 
do not demonstrate the said fact and, therefore, none of them was qualified for 
award of the subject contract.  The learned counsel further submitted that insofar as 
the criteria of `value of work done in the past'   is concerned,   respondents 2 to 6 
cannot be said to be fulfilling the said criteria also.

In   support   of   his   contentions,   the   learned   counsel   relied   upon   the 
judgment of the Apex Court in the matter of  Ramana Dayaram Shetty Vs. The 
International Airport Authority of India and others  reported in  AIR 1979 S.C.
::: Downloaded on - 03/09/2014 17:58:48 :::
    11
     wp6096.13
1628 wherein  it is held that : “the qualifications laid down in any tender as requisite  
are to be scrupulously fulfilled by the tenderer and who do not fulfill the requisite  
qualification cannot be awarded the said contract”.  The learned counsel submitted 
that since respondents 2 to 6 are not fulfilling the requisite qualifications,  the award 
Advocate Saboo, the learned counsel appearing for respondent nos. 2 
ig
12]
of tenders in their favour is illegal.  
to 6,   took us through the qualifying requirements for  award of the subject tender. 
The learned counsel, referring to  the documents filed on record by respondents 2 
to 6 tried to convince us that all these respondents are fulfilling the eligibility criteria 
and allegations raised by the petitioners that none of them is qualified are baseless. 
We will be referring the documents so placed on record at the appropriate stage. 
Sum and substance of his argument was that the award of  contract to respondents 
2   to   6   was   perfectly   valid   and   legal.   The   learned   counsel   filed   on   record   the 
information   consolidated   in   tabular   from   pertaining   to   respondents   2   to   6   to 
demonstrate that they were fulfilling all the requirements to be considered for award 
of subject contract.   The learned counsel placed his reliance on the judgment of 
Hon'ble Apex court in the case of  Tata Cellular V/s. Union of India  reported at 
::: Downloaded on - 03/09/2014 17:58:48 :::
    12
     wp6096.13
13]
(1994) 6 SCC 651. 
Mr. Mohagaonkar, learned counsel appearing    for the respondents 1, 7 
and   8   made   elaborate   submissions     to   answer   the   objections   raised   by   the 
petitioners in respect of the award of contract to respondents 2 to 6.  The learned 
counsel submitted that to divide the contract into five parts and to scale down its 
ig
period to six months was a policy decision taken by the officers of respondent no.1 
after due deliberations.  The learned counsel brought to our notice that issuance of 
six     monthly   contract   was   not   a   new     thing   and       in   the   past   on   several   such 
occasions six monthly contracts were awarded.
The   learned   counsel   further   submitted   that   the   petitioners   were   not 
14]
having experience of mechanical maintenance due to which on several occasions 
obstructions were caused in the work being done by the petitioners some times 
leading to  stoppage  of work or delay in the performance.   The  learned counsel 
submitted   that     therefore,   a   policy     decision   was   taken   to   include   the   minor 
mechanical works in the tender as has been mentioned in the scope of work of 
Part­II which includes round the clock monitoring and servicing of conveyor system.
::: Downloaded on - 03/09/2014 17:58:48 :::
    13
The learned counsel then submitted that the work of CHP  Stage II old 
15]
     wp6096.13
plant   has been divided into three parts and work of augmentation plant   in two 
parts only with the object to increase efficiency of the work.  The learned counsel 
then took us through the documents pertaining to the eligibility of respondents  2 to 
6,   filed on record by respondent no.1 as well as said respondents.   The learned 
counsel then brought to our notice the minutes of the meeting held on 8.10.2013 of 
ig
the State level CHP Improvement Committee wherein a decision was taken that 
cleaning contract should be modified such as minor chute patching, skirt adjustment 
and conveyor belt alignment including   for proper cleaning. The learned counsel 
further submitted that  to require the tenderers  to submit the documents of annual 
turn over, profit and loss account etc. pertaining to preceding five years is a regular 
practice.   The   learned   counsel   submitted   that   all   the   documents   submitted   by 
respondents 2 to 6 were thoroughly scrutinized by the officers of respondent no.1 
and only thereafter they were held to be qualified for  award of the contract.  The 
learned counsel submitted that since the petitioners did not submit any document 
showing   that   they   were   having   experience   of   mechanical   maintenance   their 
technical bid was rejected.
::: Downloaded on - 03/09/2014 17:58:48 :::
    14
The learned counsel then submitted that the submissions made by the 
16]
     wp6096.13
petitioners   in   the   additional   affidavit   and   documents   filed   by   them   showing   that 
written objection was raised by them before opening of price bid and further that 
they have submitted the necessary information on 2.11.2013 itself evidencing that 
they were having sufficient experience of doing mechanical maintenance work, are 
shrouded   with   doubts.     The   learned   counsel   brought   to   our   notice   that   the 
ig
documents   allegedly   submitted   by   the   petitioners   on   2.11.2013   were,   in   fact, 
received   in   the   office   of   respondent   no.1   on   6.11.2013.     The   learned   counsel 
submitted that one Mr. Chati, who is said to have accepted the letter at 3.30 p.m. on 
2.11.2013 was in fact not in the office in the second half on that day.  The learned 
counsel submitted that the petitioners have made a foul attempt to bring on record 
that before opening of price bid they have submitted the necessary information as 
about their eligibility   to carry out mechanical maintenance.   To substantiate the 
points urged by him in his arguments, Shri Mohgaonkar has relied upon as many as 
ten judgments.   We will be referring to those judgments at the appropriate stage.
17]
The learned counsel relied on the following judgments in support of the 
contentions raised by him during the course  of his argument:­
::: Downloaded on - 03/09/2014 17:58:48 :::
    15
Directorate of Education and others Vs. Educomp  
Datamatics Ltd. and others : (2004) 4 SCC 19.
Michigan   Rubber   (India)   Ltd.   Vs.   State   of  
(ii)
(i)
     wp6096.13
Karnataka and others :  (2012) 8 SCC 216.
(iii)
M/s. G.J. Fernandez Vs.   State of Karnataka and  
others  : AIR 1990 S.C. 958.
(iv)
Tata Cellular Vs. Union of India : (1994) 6 SCC  
Global Energy Ltd. and another Vs.Adani Exports  
ig
(v)
651.
Ltd. And others  : (2005) 4 SCC 435.
Jagdish Mandal Vs. State of Orissa and others :  
(vi)
(2007) 14 SCC 517.
Meerut Development Authority Vs. Association of  
(vii)
Management Studies : (2009) 6 SCC 171.
(viii)
Bee   Jay   Contractors,   New   Delhi   Vs.   Hindustan  
Petroleum Corpn. Ltd. Mumbai : 2010 (6) Mh.L.J. 392. 
(ix)
Tejas   Constructions   and   Infrastructure   Pvt.   Ltd.  
Vs. Municipal Council, Sendhwa and another : (2012) 6 SCC  
464
(x)
Haast   Precision   Pvt.   Ltd.   Vs.   State   of   Goa  
(judgment passed in WP No. 774 of 2013) in the High Court of  
Bombay at Goa. 
18] 
From the averments made in the petition, the documents filed on record 
::: Downloaded on - 03/09/2014 17:58:48 :::
    16
     wp6096.13
and the points urged in the argument,  it is transpired that the act of respondents 
Nos.1, 7 and 8 in rejecting the tender of the petitioners and awarding the same to 
respondents   2   to   6   is   questioned   by   the   petitioners   mainly   on   the   following 
grounds:­
(i)
That the period of subject tender was intentionally 
That the subject contract was split   into five parts 
(ii)
ig
annual contract.
scaled down to six months when usual practice was to award 
so as to bring down value of the contract of each part with the 
motive that in such case approval of Head Office may not be 
required and also for the advantage of respondent nos.2 to 6. 
(iii)
That   in   qualifying   requirements,     clause   (b) 
requiring that `tenderer should have adequate experience   in 
mechanical   maintenance,   fabrication   etc.,   work,   round   the 
clock monitoring and servicing of conveyor belt in CHP Stage­
II of various power stations' was intentionally incorporated with 
oblique motive of ousting the petitioners from competing the 
subject  tender.
::: Downloaded on - 03/09/2014 17:58:48 :::
    17
That   the   documents   furnished   by   the   petitioners 
(iv)
     wp6096.13
well  within time to evince that they have sufficient experience 
to   do   mechanical   maintenance,   were  ignored   and   their 
technical bid was wrongly rejected.
(v)
That none of the respondents 2 to 6 was satisfying 
the  eligibility criteria as set out in the tender documents and in  
awarded to them.
ig
spite  of   that,   the   contracts   were   illegally   and   arbitrarily 
19]           Insofar as the  first  objection   is  concerned,  the   learned  counsel  for   the 
petitioners showed us tender documents and work orders pertaining to some old 
contracts filed on record by him.   He showed us tender documents pertaining to 
Tender Code Nos.26528, 32457, 52390 and few others.   It is true that all these 
tenders were in respect of the  cleaning and allied works in coal handling plants and 
were   annual   contracts.     As  stated   earlier,   it   is    the   case   of   the   petitioners   that 
issuance   of   annual   contract   was   the   usual   and   established   practice   which   was 
deviated only to favour respondents 2 to 6. 
::: Downloaded on - 03/09/2014 17:58:48 :::
    18
     wp6096.13
20]           Opposing the submissions so advanced on behalf of the petitioners, Mr. 
Saboo,   learned   counsel   for   respondents   2   to   6   and   Mr.   Mohagaonkar,   learned 
counsel   appearing   for   the   respondents   1,   7   and   8   brought   to   our   notice     the 
documents filed on record by them relating to some other tenders. The learned 
counsel showed us the work orders pertaining to three e­tenders bearing eT Nos. 
2264, 7690 and  4174.  It is noticed  that all these contracts were also pertaining to 
ig
complete maintenance and cleaning of stacker reclaimer along with conveyor but 
were six monthly contracts.  It was brought to our notice by Mr. Mohagaonkar that 
the notices  of eT 14611 (2011­2012), eT5458 (2010­2011) and eT 76  (2009­2010) 
which were earlier published for one year were revised for the period of 120 days. 
The leaned counsel also invited our attention to the documents  pertaining to tender 
eT 33473 for the year 2013­2014 which shows its duration as 120 days.
21]              From  the documents showed to us by the respective counsel for the 
parties, it is clearly revealed that when some contracts were annual others were  for 
the period  of six months and  some were for the period of even four months.  Thus, 
there appears no substance in the objection raised by the petitioners  that  issuance 
of annual contract was the only prevailing practice and it was deviated while issuing 
::: Downloaded on - 03/09/2014 17:58:48 :::
    19
     wp6096.13
the contract in question. Secondly, nothing has been brought to our notice by the 
petitioners as to what prejudice has been caused to them because of scaling down 
the period of contract.   The  petitioners have also  not brought to our notice  any 
convincing   material   to   substantiate   their   allegation   that   the   period   of   subject 
contract was scaled down to six months with the only object of making favour to 
The second objection is that the subject contract was divided into five 
22] 
ig
respondents 2 to 6.   This objection is, therefore, rejected. 
parts   to   bring   down   the   value   of   each   part   of   the   contract.   According   to   the 
petitioners, this sub division was intentionally made by the respondents 1, 7 and 8 
so that the entire process of the contract can be completed at their level itself and 
the  approval   from the  Head  Office  may not be  required.  The  respondents  have 
denied such allegation in their respective written submissions. Mr. Mohagaonkar, 
learned counsel for respondents 1, 7 and 8 submitted that the decision to divide 
contract into five parts  was a  policy decision taken by the officers of respondent 
no.1   after   due   deliberations.   He   submitted   that   such   decision   was   taken   for 
improving quality of work. 
::: Downloaded on - 03/09/2014 17:58:48 :::
    20
     wp6096.13
23]              In their written submission respondents 1, 7 and 8 have specifically 
pleaded that in the execution of past contracts of similar nature  the single agency 
was found not capable to handle the cleaning of vast area/zone and had sometimes 
failed   to   control   the   situation.     It   has   also   been   contended   that   this   issue   was 
discussed   in   the   meeting   of   State   Level   CHP   Improvement   Committee   held   on 
08.10.2013 at Mumbai and in pursuance of the decision taken in the said meeting 
ig
the   contract   in   question   was   sub­divided   in   five   parts   for   achieving   better 
performance.  Minutes of the said meeting are bought to our notice which support 
the submissions made by the respondents. In this regard also no material has been 
placed on record by the petitioners to show what prejudice has been caused to 
them because of splitting of the contract in five parts.  Nothing has also been shown 
to us so as to disbelieve or to doubt the justification given by respondents 1, 7, and 
8 for subdividing the work into five parts.   We do not see any  mala fides  and/or 
illegality in the justification given by respondents 1, 7 and 8 for sub­dividing   the 
work of the subject contract into five parts. 
24]
The   third   objection   of   the   petitioner   is   that   clause(b)   has   been 
intentionally included in qualifying requirements of the subject tender in order to see 
::: Downloaded on - 03/09/2014 17:58:48 :::
    21
     wp6096.13
that   the   petitioners   are   ousted   from   the   competition.     Clause(b)   prescribes   that 
“tenderer should have adequate experience in mechanical maintenance, fabrication 
etc. work, round the clock monitoring and servicing of auxiliaries and conveyors in 
CHP of various power stations of MSPGCL/NTPC/OTHER TPC”.  In paragraph 9 of 
the   petition,   the   petitioners   have   stated   that   the   tender   notice   was   designed 
specifically by putting clause (b) in order to see that the petitioners are ousted from 
ig
the   competition.   The   petitioners   have   further   stated   that   in   the   earlier   contracts 
executed  by them, the mechanical maintenance part was consisting only 5% of the 
contract.   According   to   the   petitioners,     there   was   therefore   no   need   to   include 
clause (b). 
Regarding the  plea so raised  by the petitioners, respondents 1, 7 and 
25]
8 in their reply have come out with the specific contention that the work orders 
issued earlier to the petitioners did not include minor mechanical maintenance. It is 
further averred that minor mechanical maintenance on several occasions caused 
obstruction   in   the   work  being   executed   by  the   petitioner  leading  to  stoppage   or 
delay in performance and   therefore a policy decision was taken to include minor 
mechanical works in the scope of work   which include round the clock monitoring 
::: Downloaded on - 03/09/2014 17:58:48 :::
    22
     wp6096.13
26]
and more ten items. 
  It was asserted by Mr. Samarth, learned counsel for the petitioners, 
that the petitioners were having sufficient experience of carrying out mechanical 
maintenance though there may not be a specific clause in that regard in the earlier 
tenders. The learned counsel submitted that  from the nomenclature  of the contract 
ig
as `contract for cleaning and allied works'   it is clear that it includes the work   of 
minor mechanical maintenance as   well as  the work of fabrication. 
27]              The counsel for respondents have strongly opposed the submissions so 
made on behalf of the petitioners.  Mr. Mohagaonkar, learned counsel appearing for 
respondents   1,   7   and   8     submitted   that   the   term   “allied   works”   in   the   earlier 
contracts has to be understood in reference to the scope of work as provided in the 
tender documents of the said contracts.  The learned counsel took us through the 
documents pertaining to earlier Et 26528  submitted by the petitioners themselves 
and brought to our notice the scope of work as described in the said tender which 
consists of eight items noted below:­
(i)
Cleaning of conventional system;
::: Downloaded on - 03/09/2014 17:58:48 :::
     wp6096.13
Lifting & Transportation  of  Spillage coal.
(iii)  Cleaning of Idler Pulleys.
(iv) Removal of Foreign Material.
(v) Removal of Choke up.
(vi)  Cleaning of Rail Tracks.
(vii) Removal of Honeycomb.
(viii) Cleaning
Junction

Towers/Crusher 
  of  
(ii)  
    23
Mr. Mohagaonkar,  the learned counsel for respondents 1, 7 and 8 took 
28]       
ig
House/Impactor Crusher House.
us through details of each of the aforesaid work and submitted that none of the 
above   items   involve   any   mechanical   work   or   mechanical   maintenance.     Mr. 
Mohagaonkar then brought to our notice the added additional work in the subject 
tender.   The additional work is described at page no.29 of the tender documents 
which consists of total  42 pages.   The  additional work consists round the clock 
monitoring and servicing  of conveyor system before crusher area.  Total 10 items 
are provided to be carried out by the tenderer in execution of the subject contract. 
These items are as follows:­
(i) Checking and Replacement of Roller Frames.
(ii)  Checking   and   Adjustment/Replacement   of   Skirt  Rubbers 
::: Downloaded on - 03/09/2014 17:58:48 :::
    24
     wp6096.13
and its Brackets.  
(iii)   Checking   and   Replacement   of   Deck   Plates,   Sealing 
Plates. 
(iv)   Checking   and   greasing   of   Gear   coupling.   Checking   of 
flexible pin bush coupling, replacement of pin and bushes on 
as and when required.
(v) Checking  of Gear Box, Fluid Coupling Oil Level and oil top 
us if necessary. 
ig
(vi) Checking of Conveyor Pulleys and its bearings, Greasing 
of bearings, Replacement of Bearings in case of failure. 
(vii) Checking and adjustment/replacement of scrappers. 
(viii) Removal of conveyor running out. 
(ix) Attending of chute leakage. 
(x)  All  other associated  mechanical  work necessary but  not 
covered above.
29]
The learned counsel submitted that in view of the additional work so 
included   in   the   tender   the   respondents   were   required   to   incorporate   a   specific 
clause requiring tenderer to have adequate experience in mechanical maintenance 
and round the clock monitoring and servicing of conveyor belt.  In this regard also, 
learned   counsel   referred   to   the   meeting   of   State   Level   CHP   Improvement 
Committee held on 08.10.2013 in which a specific decision was taken that cleaning 
::: Downloaded on - 03/09/2014 17:58:48 :::
    25
     wp6096.13
contract   should   be   modified   and   the   works   such   as   minor   chute   patching,   skirt 
adjustment and conveyor belt alignment be included therein. We have gone through 
minutes of the meeting so placed on record by the respondents.    
30]
The   objections   raised   by   the   petitioners,   which   we   have   discussed 
hereinabove, undisputedly relate to the terms of the subject contract.  The question, 
ig
therefore, arises as to what extent they are open for judicial scrutiny.  In the case of 
Directorate of Education and others V/s. Educomp Datamatics Ltd and others 
reported at (2004) 4 SCC 19, relied upon by Shri Mohgaonkar,  the Directorate of 
Education had taken a decision to establish computer labs in the national capital 
territory in all Government schools by the year 2003 in collaboration with private 
sectors.      In   the   first  phase   115   schools  were   taken   up  for  imparting   computer 
education and the tenders were, therefore, called from the firms having turnover of 
Rs.2   Crore.   The   total   contract   was   for   a   sum   of   Rs.14.62   Crores.       In   the 
subsequent year, again the tender was flouted for second phase.  Thereafter when 
the final phase of programme was worked out the tenders were called for of 748 
schools.       The   costs   of   project   had   reached   to   approximately   Rs.100   Crore. 
Because   of   the   difficulties   faced   in   the   earlier   years   Government   took   a   policy 
::: Downloaded on - 03/09/2014 17:58:48 :::
    26
     wp6096.13
decision to deal with one company having financial capacity to take up such project 
and accordingly the Government took a decision to invite tenders from the firms 
having   a   turnover   of   not   less   than   Rs.20   Crores   per   annum   for   the   last   three 
financial years.  Aggrieved by the term of clause inviting the tenders from the firms 
having annual turnover of Rs.20 Crores or more, writ petitions came to be filed 
before   the   Delhi   High   Court.     Delhi   High   Court   allowed   the   writ   petitions   and 
ig
observed   that   the   term   was   arbitrary   and   the   impugned   condition   had   been 
incorporated   solely   with   an   intention   to   deprive   large   number   of   companies 
imparting   computer   education   from   bidding   and   to   monopolies   some   big 
companies.   Matter was then taken to the Apex Court and while setting aside the 
order passed by the High Court of Delhi the Hon'ble Apex Court held that :­
“.....  It  was for the  authority  to  set  the  terms of  the  tender. 
The  courts would  not interfere   with  the   terms of the   tender 
notice   unless   it   was   shown   to   be   either   arbitrary   or 
discriminatory or actuated by malice.     While exercising the 
power of judicial review of the terms of the tender notice the 
court  cannot  say  that the  terms  of the  earlier tender  notice 
would serve the purpose sought to be achieved better than 
the   terms   of   tender   notice   under   consideration   and   order 
change in them, unless it is of the opinion that the terms were 
::: Downloaded on - 03/09/2014 17:58:48 :::
    27
     wp6096.13
either arbitrary or discriminatory or actuated by malice.   The 
provision   of   the   terms   inviting   tenders   from   firms   having   a 
turnover of more than Rs20 crores has not been shown to be 
either arbitrary or discriminatory or actuated by malice.   This 
apart SSI having a turnover of more than Rs 20 crores was 
the lowest bidder.
The terms of the invitation to tender are not open 
to judicial scrutiny, the same being in the realm of contract. 
ig
The Government must have a free hand in setting the terms of 
the tender.     It must have reasonable play in its joints as a 
necessary   concomitant   for   an   administrative   body   in   an 
administrative sphere.  The courts can scrutinize the award of 
the contracts by the Government or its agencies in exercise of 
their   powers   of   judicial   review   to   prevent   arbitrariness   or 
favouritism.  It is entitled to pragmatic adjustments which may 
cannot strike down the terms of the tender prescribed by the 
Government   because   it   feels   that   some   other   terms   in   the 
tender would have been fair, wiser or logical.”
be   called   for   by   the   particular   circumstances.     The   courts 
31]
In another judgment in the case of  Michigan Rubber (India) Limited 
V/s. State of Karnataka and others  reported at  (2012) 8 SCC 216  the Hon'ble 
::: Downloaded on - 03/09/2014 17:58:48 :::
    28
     wp6096.13
Supreme   Court  has  reiterated   the   view   that   there   is a   very  restricted   scope   for 
Courts interference insofar as the conditions and eligibility criteria set out in the 
tender   is  concerned.     The   Hon'ble   Apex  Court   has  further   held   that  the   Courts 
would not interfere only because it feels that some other terms in the tender would 
In the case of  Tata Cellular V/s.   Union of India  (cited supra), relied 
ig
32]
have fairer, wiser or more logical.  
upon by Advocate Saboo as well as Advocate Mohgaonkar, almost all  previous 
cases on the point of judicial review or judicial scrutiny in the matter of tenders 
flouted   by   the   public   authorities   are   elaborately   discussed   and   the   following 
principles are deduced.  
“(1) 
The   modern   trend   points   to   judicial   restraint   in 
administrative action. 
(2)
The   court  does  not  sit  as a   court   of  appeal   but 
merely reviews the manner in which the decision was made. 
(3)
The court does not have the expertise to correct 
the administrative decision.   If a review of the administrative 
decision  is permitted it will be substituting  its own decision, 
without the necessary expertise which itself may be fallible. 
(4)
The   terms   of   the   invitation   to   tender   cannot   be 
::: Downloaded on - 03/09/2014 17:58:48 :::
    29
     wp6096.13
open to judicial scrutiny because the invitation to tender is in 
the   realm   of   contract.     Normally   speaking,   the   decision   to 
accept the tender or award the contract is reached by process 
of   negotiations   through   several   tiers.     More   often   than   not, 
such decisions are made qualitatively by experts. 
(5)
The Government must have freedom of contract. 
In   other   words,   a   fair   play   int   he   joints   is   a   necessary 
concomitant   for   an   administrative   body   functioning   in   an 
ig
administrative   sphere   or   quasi­administrative   sphere. 
However,   the   decision   must   not   only   be   tested   by   the 
application   of   Wednesbury   principle   of   reasonableness 
(including its other facts pointed out above)  but must be free 
from  arbitrariness  not   affected   by  bias  or actuated   by  mala 
fides.
(6)
Quashing   decisions   may   impose   heavy 
administrative   burden   on   the   administration   and   lead   to 
33]
increased and unbudgeted expenditure.”
The   Division   Bench   of   our   High   Court   in   the   case   of  Bee   Jay 
Contractors, New Delhi V/s. Hindustan Petroleum Corporation Ltd., Mumbai 
reported at 2010(6) Mh.L.J.392 has categorically held that the terms of invitation to 
the   tenderer   not   open   to   the   judicial   scrutiny   unless   there   is   arbitrariness   or 
::: Downloaded on - 03/09/2014 17:58:48 :::
    30
     wp6096.13
favoritism.   In the instant case also the petitioners have made grievance regarding 
terms and conditions of the subject tender.   Tested on the law laid down by the 
Hon'ble   Apex   Court   in   the   judgments   cited   above,   all   these   objections   do   not 
sustain.   We have already observed that the petitioners have failed to bring to our 
notice any malice on the part of respondents 1, 7 and 8 in scaling down the period 
of contract and splitting it into five parts as well as in inclusion of clause(b) in the 
ig
said contract in absence of which it may not be permissible to whittle down the 
terms so included in the said contract.     It was up to the Authorities issuing the 
tender to decide the period of the tender and to further decide whether there should 
be a composite tender or it should be in parts.     The petitioners certainly cannot 
dictate and so also this Court that the contract should have been an annual contract 
and it should not have been divided in the parts as has been divided.   Insofar as 
clause(b) is concerned, we have already recorded that respondents 1, 7 and 8 have 
justified the incorporation of the said clause in the subject tender.   We have also 
observed that no  mala fides  are seen on the part of respondents 1, 7 and 8 in 
incorporating the said clause in the subject tender.   It, therefore, appears to us that 
the challenge to these aspects raised by the petitioners is misconceived and must 
be rejected. 
::: Downloaded on - 03/09/2014 17:58:48 :::
    31
Nextly,   there   is   substance   in   the   arguments   advanced   by   the 
34]

respondents   that   since   the   petitioners   do   not   raise   any   objection   regarding   the 
terms   incorporated   in   the   subject   tender   and   without   raising   any   such   protest 
participated in the tender process were estopped from raising any objection at the 
subsequent   stage.       Facts   on   record   show   that   the   tender   was   published   on 
16/10/2013.   The tenders were to be submitted up to 29/11/2013.   Technical bids 

were to be opened on 29/10/2013 and the price bids of the tenderers, who have 
qualified the technical bid, were to be opened on 2/11/2013.   There is no dispute 
that the petitioners participated in the tender process and submitted their tenders 
within the stipulated period.  As pointed out by Shri Mohgaonkar,  while submitting 
the tender the petitioners have in clear terms mentioned   'they have no technical 
deviation in the matter'.   
35]
Similar issue was involved in the case of Haast Precision Pvt. Ltd. V/s. 
State of Goa in Writ Petition No.774/2013 before this Court.   In the said case the 
department of the Tourism of State of Goa had invited tenders for development and 
operations of water safety patrol on turn key basis.  For some reasons, the date for 
submission of tender was extended.   It was the contention of the petitioner in the 

said case that the period was extended only in order to favour respondent no.3 in 
the said matter.     Rejecting the contention of the petitioners this Court held that 
when the petitioners did not raise any protest when the date was extended and 
participated in the tender process and even in the first representation made by them 
did not even whisper about their objection regarding the extension of time of the 
tender in question.  The view so taken by this Court squarely apply to the facts of 

the present case also.   As has been elaborately discussed by us here before the 
petitioners participated in the tender process without raising any objection regarding 
scaling down the period of contract, splitting of the said contract and inclusion of 
clause(b) in the said contract.     Petitioners were therefore  estopped  from raising 
such objections at the belated stage.  
36]
The   another   objection   raised   by   the   petitioners   is   that   though   the 
petitioner no.2 has within given time submitted the necessary certificate to satisfy 
clause(b) of the tender document, it was intentionally kept out of consideration to 
favour respondents 2 to 6.     Shri Samarth the learned counsel for the petitioners 
has brought to our notice the document at Annexure C­V which is the letter dated 
31/10/2013 stated to be handed over by petitioner no.2 in the office of respondent 

no.1   and   bears   the   acknowledgment     from   the   receipt   clerk   in   the   office   of 
respondent no.1 under his signature with date as  2/11/2013.   Submission is that 
respondents   1,   7   and   8   intentionally   did   not   consider   the   said   document     and 
illegally rejected the technical bid of the petitioner.   
The allegation so made by the petitioners is denied by respondents 1, 7 
37]

and 8.   In para 10 of their written reply it has been contended that the concerned 
document   was   received   on   6/11/2013   and   was   never   given   on   2/11/2013. 
Respondents 1, 7 and 8 have alleged that the petitioners have attempted to create 
false evidence that it was submitted on 2/11/2013 in the office of respondent no.1. 
Respondents 1, 7 and 8 have filed on record copy of the said letter which according 
to them has been actually received to their office.   It shows the said letter to have 
been received in the office of respondent no.1 on 6/11/2013.   The inward stamp is 
affixed on the said letter which bears Inward No.20443 and the date as 6/11/2013. 
There are other endorsements on the said letter which show journey of the said 
letter from the Inward section to higher officers of respondent no.1.  After receiving 
the   reply   from   respondent   no.1,   7   and   8,   the   petitioners   filed   a   rejoinder   on 
24/1/2014.   In the rejoinder it is stated that Mr. Premdas Panchbudhe,  Accountant 

of petitioner no.2 had visited the office of respondent no.1 at about 3.30 p.m. on 
2/11/2013 and had handed over the letter along with necessary documents to one 
Mr. Chati and had obtained an acknowledgment from him for receipt thereof.   The 
fact so brought on record by petitioner no.2 vide his rejoinder dated 24/1/2014 has 
been controverted by respondents 1, 7 and 8 by their reply to the said rejoinder.  In 
the said reply, respondents 1, 7 and 8 have contended that Mr. Chati, who is stated 

to have accepted the communication and the documents annexed therewith from 
Mr. Panchbudhe on 2/11/2013, had left the office on that day at 1.45 p.m. and was 
not   available   in   the   office   thereafter.       In   the   circumstances,   according   to   the 
respondents the contention of the petitioners that Shri Panchbudhe handed over 
the letter to Mr. Chati in the office of respondent no.1 at 3.30 p.m. on 2/11/2013 
cannot be believed.  Respondents 1, 7 and 8 have also placed on record the hard 
copy of computerized system generated biometric report for 2/11/2013 which show 
that Shri Chati had left the office at 1.45 p.m. on 2/11/2013 and was not available in 
the officer thereafter.  Shri Mohgaonkar then invited our attention to the letter filed 
on record by the petitioners as Annexure­E.  It is the letter dated 31/10/2013  and 
seems to have sent by the petitioner no.2 in reply to the letter bearing Outward 
No.KTPS/CE/CHP­O­II/T/302/eT­35946/13­14/1849 dated 30th  October, 2013 sent 

to him by respondent no.1.  The learned counsel further brought to our notice that 
the letter dated 31/10/2013 allegedly handed over by Accountant of petitioner no.2 
to Shri Chati on 2/11/2013 is also in reply to the same letter of respondent no.1 
dated 30th October, 2013 to which a reply was already received by petitioner no.2. 
The learned counsel brought to our notice that in the first letter received to the office 
38]

experience in mechanical maintenance.
of   respondent   no.1   on   1/11/2013   petitioner   has   stated   nothing   regarding   the 
  Shri   Mohgaonkar,   the   learned   counsel   for   respondents   1,7   and   8, 
submitted that had there been any ill­intention to keep the petitioners out of race, 
there was no reason for respondent no.1 to give an opportunity to the petitioners by 
sending them a written request letter to submit the necessary certificate showing 
that   they   have   adequate   experience   in   mechanical   maintenance   and   round   the 
clock monitoring.  After having gone through the documents referred by petitioners 
as well as respondents1, 7 and 8, it is apparently revealed that there is a serious 
dispute between the parties regarding the receipt of one of the said letter in the 
office of respondent no.1 on 2/11/2013.  As such, we do not desire to enter into said 
controversy.     In   absence   of   any   impeccable   material   brought   on   record   by   the 

petitioners   we   are   unable   to   accept   the   contention   of   the   petitioners   that   their 
technical   bid   has   been   wrongly   rejected   by   respondent   no.1   in   spite   of   their 
submitting required documents on record.  As held by the Hon'ble Apex Court in the 
case of  M/s. G.J. Fernandez V/s. State of Karnataka and others reported at AIR 
1990 SC 958, furnishing of a required document,   if is a precondition, a tenderer 
can be excluded from consideration for failure to supply the said document.    Even 

in the judgment relied upon by the petitioners in the case of  Ramana Dayaram 
Shetty Vs. The International Airport Authority of India and others (cited supra) 
the Hon'ble Apex Court has laid down that the tender of a person who does not 
fulfill the requisite qualification cannot be accepted.   As such we do not see any 
error in the impugned decision of respondent no.1 rejecting the technical bid of the 
petitioners.
39]
Nextly, the petitioners have alleged that none of respondents 2 to 6 did 
satisfy the qualifying requirements and in spite of that the subject tender has been 
allotted to them.  Taking us through the documents filed on record an attempt was 
made by Shri Samarth, the learned counsel for the petitioners to convince us that 
none of the respondents 2 to 6 had done similar nature of work.  It was vehemently 

argued   that   none   of   the   respondents   2   to   6   has   any   experience   of   doing   or 
executing   the   cleaning   work   at   CHP   or   at   augmentation   plants.     It   was   further 
argued   that  the   entire   work   executed   by  respondent   no.2   is   below   the   required 
value of Rs.37,87,000/­.   According to the petitioners the work done by respondent 
no.3 is also below the required value.    Insofar as the respondents 4, 5 and 6 are 
concerned it is the contention of the petitioners that none of them has done any 

maintenance work  and as such they were not satisfying with the criteria of having 
performed 'similar nature of work'.  
Respondents 2 to 6 have denied the allegation so made.     They have 
40]
furnished   on   record   several   documents   to   substantiate   their   plea   that   the   have 
fulfilled   all   requirements.   Respondents   1,   7   and   8   have   also   contended   that 
respondents 2 to 6   were found qualified by the Executive Engineer (CHP) and 
accordingly  he  had  submitted  a  note  after auditing  the  documents  submitted  by 
respondents 2 to 6.   It is further contended that the said audited note was placed 
before the Technical Scrutiny Committee consisting of Deputy Manager      (F & A), 
Superintending   Engineer   (CHP)   and   Superintending   Engineer   (MPD)   i.e. 
Maintenance   and   Planning   Department.     It   is   further   submitted   that   after   the 

scrutiny it was found that the respondents 2 to 6  were fulfilling the requirements as 
per   the   tender   conditions   and   the   Scrutiny   Committee   therefore   approved   their 
proposals and the matter   was then forwarded for final approval to Deputy Chief 
Engineer (O & M) and to Chief Engineer (O & M).   The audited note, submitted by 
the Executive Engineer, is filed on recored  by respondents 1, 7 and 8.  We have 
carefully gone through the contents of the said document.   It contains a summary 

of documents submitted by each of respondents 2 to 6 and the opinion given by 
Executive Engineer (CHP) regarding the eligibility of the said tenderers for opening 
their price bids.   The document further reveals that the said note has been signed 
by Manager (F & A), Superintending Engineer (CHP) and Superintending Engineer 
(O & M) and finally by Chief Engineer (O & M).     We do not find it necessary to 
discuss in detail the comments so made in the said audited note pertaining to the 
documents submitted by respondents 2 to 6.   Suffice to say that the Competent 
Authorities   have   found   respondents   2   to   6   eligible   and   satisfying   the   qualifying 
requirements for opening their price bids.  
41]
As has been held by the Hon'ble Apex Court in case of Tata Cellular 
V/s. Union of India  (cited supra) Court does not have the expertise to correct the 

administrative decision.   If a review of the administrative decision by the Court is 
permitted,   it   may   amount   to   substituting   the   Courts   decision   which   does   not 
possess the necessary expertize and in such a case such decision by the Court 
may be fallible.   In the instant case,   the Executive Engineer has scrutinized the 
proposal and audited the documents submitted by respondents 2 to 6.  Thereafter 
the Scrutiny Committee consisting of High Officers having technical expertize have 

considered the said audited note and ultimately have approved the same and only 
thereafter price bids submitted by respondents 2 to 6 have been opened.   In the 
circumstances, we do not find any reason to interfere in the said decision more 
particularly, when no mala fides or misuse of power or authority is seen.  As held by 
the Hon'ble Supreme Court in  Jagdish Mandal V/s. State of Orissa  reported at 
(2007) 14 SCC 517, unless the decision relating to award of contract is arbitrary, 
mala fide and against the public interest, Court will not interfere by exercising power 
of judicial review even if there be a procedural abrasion or error in assessment or 
prejudice to tenderer is made out.   As has been consistently held by the Hon'ble 
Apex Court the Courts do not sit as a court of appeal for the decision taken by the 
Authorities in administrative capacity. 

After having considered the matter from all angles, we do not find any 
42]

merit   in   the  objection  raised   by  the   petitioners  that    respondent  no.1   malafidely 
rejected their technical bid.     The writ petition, therefore, fails and is accordingly 
dismissed.  No costs.
JUDGE


Print Page

No comments:

Post a Comment