calling for the tender on e-procurement basis would be defeated if
respondent No.2 accepts the documents submitted physically from
respondent No.3. It appears from the counter affidavit of respondent
No.2 that not only respondent No.3 but some other bidders also
submitted documents physically. The essential terms and conditions of
the tender, having been violated, I am not convinced to uphold the
contentions of learned senior counsel for respondent No.3 as well as
learned Government pleader. It may be that the offer of respondent
No.3 is cheaper by considerable amount but that by itself is not the
criteria to overlook the essential conditions of tender having been
violated. The decision of Division Bench of this Court in PBR SELECT
INFRA PROJECTSs case (1 supra) relied upon by the learned senior
counsel is clearly not applicable to the facts of this court as that case
dealt with the requirement of experience among the partnership firm
and its partners. For the reasons aforesaid, therefore, the action of
respondent No.2 in accepting the tender of respondent No.3 in
violation of the terms and conditions of tender cannot be approved.
THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR
WRIT PETITION No.1068 of 2015
Dated;13-02-2015
M/s.KRK Infraprojects India Pvt. Ltd. 5-1-529,
V
State of Telangana,
Citation;AIR 2015(NOC)703HYD
Heard learned counsel for the petitioner; learned Government
Pleader for Roads and Buildings appearing for respondent
Nos.1, 2 and 4; and learned senior counsel for appearing for
respondent No.3.
2. Petitioner and respondent No.3 along with others are bidders
relating to a tender called for under e-procurement relating to the
work i.e., Periodical Renewals to Burgampanad Eturunagaram Road
from km 25/0 to 33/0 and 45/0 to 53/6 in Khammam District.
3. The specific case of the petitioner in the affidavit is that the said
tender notification required all the bidders to invariably upload the
scanned copies of DD/BG in e-procurement system and the same
would be the primary requirement to consider the bid response.
All the bidders were, therefore, required to carry out and upload all
their documents seeking eligibility to offer the price bid and the
technical evaluation was notified to be conducted solely based upon
the uploaded certificates/documents etc., through e-procurement
system. Petitioner states that he as well as all other bidders including
respondent No.3 submitted their technical and price bids by uploading
the documents in accordance with the tender notice.
However, respondent No.3 did not upload all the documents with
regard to availability of either owned or leased machinery for the
purpose of mobilization advance of the key and critical equipment of
the work stipulated.
4. Petitioner further states that respondent No.3 has submitted a
representation to respondent No.2 accepting that he could not upload
the aforesaid documents and sought to producing the said documents
physically at the time of evaluation which, however, was accepted by
respondent No.2 and treating respondent No.3 as eligible, the price
bids were evaluated. Basing on the price bid evaluation, the petitioner
was found to be L2 whereas respondent No.3 was found as L1.
The present writ petition is, therefore, filed questioning the action of
respondent No.2 in evaluating and considering the price bid of
respondent No.3 and declaring him as L1, on the ground that
respondent No.3 deviated from the tender conditions by physically
handing over the documents instead of uploading them.
5. When this writ petition initially came up on 27.01.2015,
I passed the following order:
Petitioner and the third respondent among other contractors
have submitted their bids with regard to the tenders called for
Burgampahad Eturunagaram road from KM 25 to 33 and 45 to 53/6
in Khammam District in pursuance of notice inviting tenders dated
24.12.2014.
In view of the letter of the third respondent seeking to produce
essential document of eligibility not through
E-platform as per the terms of the tender but by physical production,
selecting the third respondent as L1 is questioned.
Learned Assistant Government Pleader for Roads and Buildings
seeks time to get instructions from respondents 1, 2 and 4.
Personal service to third respondent is permitted.
List after one week in ML.
Pending further orders, the tenders, in question, as above, shall
not be finalized.
6. Counters have since been filed by respondent Nos.2 and 3.
I have heard all the learned counsel as noted above.
7. Learned counsel for the petitioner submits, on the basis of
tender conditions, that submission of bids as well as uploading of
documents was required to be under e-procurement platform as per
the terms and conditions of the bid and he also brings to the notice of
the court that clause 3 (iii) specifically states that department shall
carry out technical evaluation solely basing upon uploaded certificates/
documents. Learned counsel also points out that the further clause
under general terms and conditions require that bidders should submit
the particulars invariably in the format specified in the tender schedule
along with necessary certificates. Learned counsel submits that
admittedly respondent No.3 has not submitted the documents on
e-platform with regard to availability of old or leased machinery and
key and critical equipments for the work but has physically produced
the same, which was not permissible in view of the terms and
conditions upon the tender.
8. Counter affidavit filed by respondent No.2 specifically states in
paragraph 7 as follows:
7. I submit that the technical bids were evaluated based on
uploaded documents and all the Bidders are qualified as all the
Bidders have experience in execution of similar works and the extent
of quantities of the items prescribed. The 3rd respondent and another
Bidder Sri Md.Azeesz R/o.Khammam who have not uploaded the
document in proof having batch mix plant 100-120 TPH have given a
representation on 9-01-2015 (i.e., before opening of the price bids)
along with original copy of declaration for procurement of
100-120TPH batch mix plant on RS.100/- non judicial stamp paper
and sated that they have mistakenly not uploaded the machinery
declaration while submission of bids and requested to consider their
bids while evaluating. They assured on the stamp paper that they will
procure the machinery subject to the work is awarded to them and
submit the necessary documents in proof of procuring the same at
the time of concluding agreement. The request of both 3rd
respondent and another bidder has been considered and evaluation
process is carried out. It is a fact that none of the Bidders who have
participated in the tenders own this particular plant. Two Bidders viz.,
petitioner and another bidder indicated online to take this particular
plant on lease and procure respectively and the respondent 3
(who is L1) and another bidder indicated to procure the plant offline.
The basic requirement being prior in execution of such works and all
the four bidders are found to have such experience all the bidders
are qualified. Al the bidders have satisfied the requirement of the
qualification criteria for opening of the price bids. I submit that we
considered not only the request of the 3rd respondent but also
another bidder, hence there is no mala fide intention, illegal or mala
fide in accepting the documents on offline. All the se process is done
before the opening of the price bid, to have more competition and
savings on Govt., exchequer hence the question of awarding the
contract to the 3rd respondent deviating bid condition does not arise.
9. It is evident from the above that on the representation of
respondent No.3 dated 09.01.2015, he was permitted to submit the
documents physically and though he has not uploaded the documents,
his price bid was considered and evaluated as L1. Respondent No.3
also filed a separate counter where he states in paragraph 9,
as follows:
... I further submit that I have complied all the basic necessary
documents as per the e-procurement procedure for bid submission,
except the declaration, which is ancillary in nature. I further submti
that in similar circumstances, the Honble Apex Court held in 2006 6
SCC 315, that when an essential condition of tender is not complied
with, it is open to the person inviting tender to reject the same and
further, whether a condition is essential or collateral could be
ascertained by reference to the consequence of non-compliance
thereto. In the instant case also, I have fulfilled the requirements
while submission of the bid and I have uploaded all the documents
and certificates as per the requirements, except the undertaking,
which is ancillary in nature and therefore, the authority who invited
the tender, accepted my undertaking before opening of the price bid
and the petitioner, at no point of time, objected for the same and
therefore, the writ petition is not maintainable and the same is liable
to be dismissed.
10. Learned senior counsel for respondent No.3 submits that the
price bid evaluation is not affected on the documents furnished by
petitioner as the said documents were considered only for opening of
the price bid.
11. However, the same does not appear to be correct in view of
paragraph 7 of counter affidavit of respondent No.2, extracted above,
which clearly shows that the documents presented by respondent No.3
were taken into consideration while evaluating the technical bid and
the price bid.
12. Learned senior counsel for respondent No.3 also contended
based upon decision of this Court in PBR SELECT INFRA PROJECTS
v. COMMISSIONER OF TENDERS , to which I am a party, that this
Court would not interfere with the tender process on hyper
technicalities when no mala fides or unreasonableness is evident from
the record and, in fact, acceptance of tender of respondent No.3 would
benefit the State Government by about 50 lakhs. Learned senior
counsel would, therefore, submit that even by applying the test of
Wednesbury, the action of respondent No.2 cannot be said to be
arbitrary and, as such, no interference is called for even if there is an
infraction with regard to tender process as the bid of petitioner is any
way Rs.50 lakhs higher than that of respondent No.3. Learned senior
counsel has also placed reliance upon decision of the Supreme Court in
TATA CELLULAR v. UNION OF INDIA to substantiate that judicial
review in matters of this nature is very limited and urge this Court not
to interfere with the tender process, particularly, as it is in the interest
of the State.
13. I have considered the aforesaid submissions and in my view,
the infraction with regard to tender conditions would have to be first
tested on the parameters as to whether the tender conditions are
essential or non-essential.
14. A reading of the terms and conditions of e-procurement tender
shows as follows:
The bidder shall submit his response through Bid
submission to the tender on e-procurement platform at
www.eprocurement.gov.in by following the procedure given
below. The bidder would be required to register on the
e-procurement market place www.eprocurement.gov.in or
https://tender.eprocurement.gov.in and submit their bids
online. Offline bids shall not be entertained by the Tender
Inviting Authority for the tenders published in e-procurement
platform.
The bidders shall submit their eligibility and qualification
details, Technical bid, Financial bid etc., in the online standard
formats displayed in the eprocurement web site. The bidders
shall upload the scanned copies of all the relevant certificate,s
documents etc., in suipport of their eligibility criteria/technical
bids and other certificate/docuemtns in the eprocurement web
site
i) vide ref. G.O.Ms.No.174, I&CAD dept dated
01.09.2008, submission of original hard copies of the uploaded
scanned copies of DD/BG towards EMD by participating bidders
to the tender inviting authority before the opening of the price
bid is dispensed forthwith.
ii) All the bidders shall invariably upload the scanned
copies of DD/BG in eprocurement system and this will be the
primary requirement to consider the bid responsive.
iii) The department shall carry out the technical
evaluation solely based on the uploaded certificates/documents
DD/BG towards EMD in the e-procurement system and open the
price bids of the responsive bidders.
The bidder should submit the particulars invariably in
the format specified in the tender schedule along with
necessary certificates, failing which his tender shall be treated
as incomplete and summarily rejected. (v). the tenderer should
further demonstrate; a) Availability (either owned with proof or
leased with lease deed and proof or to be procured against
mobilisation advance of the following Key and critical
equipment for this work.
The aforesaid conditions, therefore, specifically state that the
evaluation would be done only on the basis of uploaded documents
and certificates. The word solely used in clause 3(iii),
extracted above, does not admit of any further doubt and as such,
on a plain reading of the tender conditions, any physical submission of
a bid or a document is impermissible.
15. In G.J.FERNANDES v. STATE OF KARNATAKA , the Supreme
Court held that if the mandatory pre-conditions are not fulfilled,
this Court under Article 226 would be justified in not interfering with
the tender. The Supreme Court also made distinction with regard to
essential and non essential conditions of a contract and held that
violation of essential conditions of contract as not permissible.
Relevant portion whereof is extracted as under:
11. Should the MCC have been denied altogether the
right to tender for the contract consequent on the delay in
submitting this document is the second question that arises for
consideration. Sri Parasaran, for the appellant would have us
answer this question in the affirmative on the principle
enunciated by Frankfurter, J. and approved by this Court in
Ramana Dayaram Shetty v. International Airport Authority of
India {(1979) 3 SCC 489: (1979) 3 SCR 1014} Bhagwati, J. (as
his Lordship then was) formulated in the following words a
principle which has since been applied by this Court in a
number of cases: (SCC pp.503, para 10 and p.522, para 34)
It is a well settled rule of administrative law that
an executive authority must be rigorously held to the
standards by which it professes its actions to be judged
and it must scrupulously observe those standards on pain
of invalidation of an act in violation of them. This rule was
enunciated by Mr.Justice Frankfurter in Viteralli v. Saton
{359 US 535: 3 Led 2d 1012}, where the learned Judge
said;
An executive agency must be rigorously held to
the standards by which it professes its action to be
judged Accordingly, if dismissal from
employment is based on a defined procedure, even
though generous beyond the requirements that
bind such agency, that procedure must be
scrupulously observedthis judicially evolved rule
of administrative law is now firmly established and
if I may add, rightly so. He that takes the
procedural sword shall perish with the sword.
This Court accepted the rule as valid and applicable in
India in A.S.Ahulwalia v. State of Punjab {(1975) 3 SCC 503:
1975 SCC (L&S) 27: (1975) 3 SCR 82}, and in subsequent
decision given in Sukhdev Singh v. Bhagatram Sardar Singh
Raghuvanshi {(1975) 1 SCC 421: 1975 SCC (L&S) 101: (1975)
3 SCR 619}, Mathew, J. quoted the above-referred
observations of Mr.Justice Frankfurter with approval. It may be
noted that this rule, though supportable also as emanation from
Article 14, does not rest merely on that article. It has an
independent existence apart from Article 14. It is a rule of
administrative law which has been judicially evolved as a check
against exercise of arbitrary power by the executive authority.
If we turn to the judgment of Mr.Justice Frankfurter and
examine it, we find that he has not sought to draw support for
the rule from the equality clause of the United States
Constitution, but evolved it purely as a rule of administrative
law. Even in England, the recent trend in administrative law is
in that direction as is evident from what is stated at pages 540-
41 in Prof.Wades Administrative Law, 4th edition. There is no
reason why we should hesitate to adopt this rule as a part of
our continually expanding administrative law
15. Thirdly, the conditions and stipulations in a tender
notice like this have two types of consequences. The first is that
the party issuing the tender has the right to punctiliously and
rigidly enforce them. Thus, if a party does not strictly comply
with the requirements of para III, V or VI of the NIT, it is open
to the KPC to decline to consider the party for the contract and
if a party comes to court saying that the KPC should be stopped
from doing so, the court will decline relief. The second
consequence, indicated by this court in earlier decisions, is not
that the KPC cannot deviate from these guidelines at all in any
situation but that any deviation, if made, should not result in
arbitrariness or discrimination. It comes in for application where
the non-conformity with, or relaxation from, the prescribed
standards results in some substantial prejudice or injustice to
any of the parties involved or to public interest in general. For
example, in this very case, the KPC made some changes in the
time frame originally prescribed. These changes affected all
intending applicants alike and were not objectionable. In the
same way, changes or relaxations in other directions would be
unobjectionable unless the benefit of those changes or
relaxations were extended to some but denied to others. The
fact that a document was belatedly entertained from one of the
applicants will cause substantial prejudice to another party who
wanted, likewise, an extension of time for filing a similar
certificate or document but was declined the benefit
16. In the present case, in my considered opinion, the very basis of
calling for the tender on e-procurement basis would be defeated if
respondent No.2 accepts the documents submitted physically from
respondent No.3. It appears from the counter affidavit of respondent
No.2 that not only respondent No.3 but some other bidders also
submitted documents physically. The essential terms and conditions of
the tender, having been violated, I am not convinced to uphold the
contentions of learned senior counsel for respondent No.3 as well as
learned Government pleader. It may be that the offer of respondent
No.3 is cheaper by considerable amount but that by itself is not the
criteria to overlook the essential conditions of tender having been
violated. The decision of Division Bench of this Court in PBR SELECT
INFRA PROJECTSs case (1 supra) relied upon by the learned senior
counsel is clearly not applicable to the facts of this court as that case
dealt with the requirement of experience among the partnership firm
and its partners. For the reasons aforesaid, therefore, the action of
respondent No.2 in accepting the tender of respondent No.3 in
violation of the terms and conditions of tender cannot be approved.
The writ petition is accordingly allowed. This order will, however,
not preclude respondent No.2 to negotiate with the remaining qualified
bidders and take appropriate decision in the matter, in accordance
with law. As a sequel, the miscellaneous applications, if any, shall
stand closed. There shall be no order as to costs.
_____________________
VILAS V. AFZULPURKAR, J
February 13, 2015
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