Moksh Innovations Inc.Thru ... vs State Of U.P. Thru Prin.Secy. ...
2021 Latest Caselaw 3061 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

A.F.R
 
RESERVED
 
Court No. - 2
 
Case :- MISC. BENCH No. - 14199 of 2020
 
Petitioner :- Moksh Innovations Inc.Thru Senior Manager Kishan Singh Mehta
 
Respondent :- State Of U.P. Thru Prin.Secy. Samaj Kalyan Lko & Ors.
 
Counsel for Petitioner :- Desh Mitra Anand,Ashish Bhatt,Rajendra Kumar
 
Counsel for Respondent :- C.S.C.,Brijesh Kumar Tiwari,Gaurav Dhama,Naresh Chandra Mehrotra,R.P.Singh
 

 
Hon'ble Devendra Kumar Upadhyaya,J.

Hon'ble Manish Kumar,J.

Having failed in its bid to get the contract for the work of Supply and Installation of Way Finding and Traffic Enforcement Solution at Naimisharanya, District-Sitapur, these proceedings under Article 226 of the Constitution of India have been instituted by the petitioner-firm impressing upon the Court to judicially scrutinize the action on the part of the respondent-corporation in rejecting the technical bid offered by it.

Heard Shri Desh Mitra Anand, learned counsel appearing for the petitioner, Shri N. C. Mehrotra, learned counsel representing the U.P. State Construction and Infrastructure Development Corporation Ltd. (hereinafter referred to as "the Corporation") and Shri R. P. Singh, learned counsel representing the respondent no.8-firm in whose favour the contract in question has been awarded.

The petitioner has prayed that the award of contract dated 18.08.2020 in favour of respondent no.8 be quashed and it be declared that technical bid offered by the petitioner-firm was fit and accordingly the petitioner-firm be also declared to be successful bidder in the financial bid as well.

The respondent-corporation issued Notice Inviting Tender (hereinafter referred to as "NIT" ) on 14.07.2020 for the work of Supply and Installation of Sinage Board at various locations for Naimisharanya Dham, District-Sitapur. The NIT was, however, cancelled and a fresh NIT was issued for the work of Supply and Installation of Way Finding and Traffic Enforcement Solution at Naimisharanya, District-Sitapur on 17.07.2020. Pursuant to the said NIT the petitioner-firm submitted its bid, however, the technical bit submitted by the petitioner-firm was rejected vide Technical Evaluation Report on 16.08.2020. The financial bid was thus opened on 16.08.2020 and after preparation of tender summary report the final outcome of bid evaluation was declared on 18.08.2020 whereby the contract for the work has been awarded to the respondent no.8.

The reasons indicated in the Technical Evaluation Report dated 16.08.2020 whereby the technical bid submitted by the petitioner-firm was rejected are as follows:

" Not qualified, reasons mentioned below

(A) Not registered in Nigam.

(B) As per clause no.2 of page no.4 bidder has not submitted the 3 years outdoor weathering test report of retro reflective sheeting from an Indian Lab from the manufacturers. Although clause no.3 page no.4 allows the bidders to submit alternate certificate conforming to ASTM (D4956-09) on artificial accelerated weathering from an Indian Lab in lieu of above outdoor weathering test report from Indian Lab along with the performance guarantee issued from nationalized bank given by retro reflective sheeting manufacturer. But bidders has not submitted these documents as well.

Apart from it other certificate as asked mentioned in clause under AFP and flexible median marker in NIT page no.5 are also not submitted by bidder. Hence this bid is not found suitable for this tender.

(C) Test report by Indian Govt. Lab for Rebound Ability not found.

(D) Test sample physically not submitted"

Challenging the said rejection of technical bid, it has been stated by the learned counsel for the petitioner that rejection of the technical bid of the petitioner was made on untenable grounds. In respect of reason (A) "not registered in Nigam", it has been submitted by the learned counsel for the petitioner that this condition of registration of a contractor intending to participate in bid process is contrary to the aim and objective of global tender. It has further been argued that in view of general principle a selected firm is required to get it registered within 30 days. The reason for disqualifying the petitioner is against the natural law of justice and hence it is not sustainable in the eyes of law.

Regarding reason (B), it has been submitted by learned counsel for the petitioner that the requisite report was submitted by the petitioner online by uploading the same. Regarding reason (C), it has been stated that none of the participants had submitted Rebound Ability Test Report, however, it is only the petitioner who has been declared disqualified. It has also been stated that Rebound Ability Test Report is not required in respect of nature of work.

As regards reason (D), the submission made on behalf of the petitioner is that the petitioner was unable to upload the sample for testing online and further that no opportunity was offered at any point of time to submit the sample physically for testing as no date, time, place or mode is mentioned for the said purpose in NIT.

In respect of reason (A), further argument has been made on behalf of the petitioner that the Registration Certificate of respondent no.9 was renewed on 21.07.2020 i.e. after the NIT was issued. Yet another argument has been made by the learned counsel for the petitioner that atleast three terms and conditions out of thirteen as mentioned in NIT dated 14.07.2020 were reduced in the subsequent NIT dated 17.07.2020 only with a view to make respondent nos.8 and 9 eligible for the tender. It has further been argued that the petitioner is a registered firm with the Public Works Department of Uttar Pradesh as ''A' Grade Contractor under Sinage category and since as a general practice a selected firm is required to get registered within 30 days, hence rejecting the technical bid on the ground of non-registration with the corporation is not tenable.

The first and foremost question which falls for our consideration is as to what is the scope of judicial scrutiny in relation to a challenge made by an unsuccessful bidder, to a tender condition. There is no doubt that in regard to allotment of contract the action of the Government or its instrumentality are subject to judicial review, however, it is also equally well settled that a tender submitted in response to a NIT is only an offer which the Government or its instrumentality are under no obligation to accept. It is only that the participating tenderer should be dealt with in a fair and non-discriminatory manner in the matter of evaluation of tenders. Ordinarily scope of judicial scrutiny of a tender matter implies that terms of tender are not open to judicial scrutiny unless it is found that the same have been tailor-made to benefit a particular party or class of tenderers. It is also equally settled by a long line decisions by Hon'ble Supreme Court that a party having participated in the tender knowing that it was unsuccessful ordinarily, cannot be permitted to challenge the conditions of tender, as such after thought action on the part of the unsuccessful bidder is impermissible to be entertained by the Courts. It is trite law that a tenderer having accepted the tender conditions and submitted the tender does not have locus to challenge the conditions of tender for the reason that in such a situation any party aggrieved by the conditions of tender ought to have challenged the NIT before submitting its tender pursuant to such notice. In the case of AFCONS Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. and Another, reported in [(2016) 16 SCC 818], Hon'ble Supreme Court has laid down clear parameters as to when the decision making process in case of a tender can be interfered with. Relevant portion of the said judgment in the case of AFCONS Infrastructure Ltd. (supra) is quoted hereunder:

"Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium)[2] it was held by this Court, relying on a host of decisions that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us."

In the case of Tata Cellular vs. Union of India, reported in [(1994) 6 SCC 651], Hon'ble Supreme Court has though observed that principles of judicial review would apply to exercise of contractual powers by the Government bodies in order to prevent arbitrariness or favouritism, however, there are inherent limitations in exercise of power of judicial review in such matters. The questions usually raised in a challenge in relation to tender process adopted by the Government and its agencies have been answered by Hon'ble Supreme Court in the case of Municipal Corporation, Ujjain and another vs. BVG India Ltd. And Ors, reported in [(2018) 5 SCC 462]. In paragraph 64 in the said case of Municipal Corporation, Ujjain and another (supra) such questions have been answered by Hon'ble Apex Court as follows:

64.1 Under the scope of judicial review, the High Court could not ordinarily interfere with the judgment of the expert consultant on the issues of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis of non-performance of the bidder;

64.2 A bidder who submits a bid expressly declaring that it is submitting the same independently and without any partners, consortium or joint venture, cannot rely upon the technical qualifications of any 3rd Party for its qualification.

64.3 It is not open to the Court to independently evaluate the technical bids and financial bids of the parties as an appellate authority for coming to its conclusion inasmuch as unless the thresholds of mala fides, intention to favour someone or bias, arbitrariness, irrationality or perversity are met, where a decision is taken purely on public interest, the Court ordinarily should exercise judicial restraint.

Thus, in para 64.3 of the aforesaid judgment, Hon'ble Apex Court has stated that it will be impossible for the Court to independently evaluate the technical bids and financial bids of the parties as an appellate authority to come to its own conclusion unless the action under challenge suffers from the vice of mala fides, intention to favour someone or bias, arbitrariness, irrationality or perversity.

We have, thus, to examine the submissions made in support of the petition in the light of the law laid down by Hon'ble Supreme Court, as discussed above. The petitioner-firm admittedly is not registered with the Corporation as Class ''A' Contractor. One of the conditions in the NIT was only Class ''A' or above class Contractors or firms which are registered with the Corporation can participate in the tender process. The petitioner at the time of issuance of NIT was aware about this tender condition. The petitioner-firm accepted the conditions stipulated in the tender notification and accordingly submitted its bid before the last date. Having participated in the tender, when the petitioner came to know that it is unsuccessful, the petitioner cannot be permitted to say that condition is void or mala fide. As a matter of fact, pre-bid meeting held on 27.07.2020 in which the petitioner-firm had also participated, issue of registration with the Corporation was not raised though certain other issues were raised which led to issuance of corrigendum dated 20.07.2020. Accordingly, in our considered opinion a person who participated in the tender process cannot be permitted to challenge the tender condition for the reason that if any such condition in the views of the tenderer suffers from any vice, the same must be raised at the first instance and unsuccessful tenderer cannot raise a ground that tender condition was in any manner unlawful so as to vitiate the decision. In this view of the matter, the petitioner-firm has completely failed in its attempt to challenge the decision rejecting its technical bid on the ground that the petitioner-firm was not registered with the Corporation.

So far as the submission of the learned counsel for the petitioner that certain favours were extended to respondent nos.8 and 9 in their registration, we may only note, as can be deduced from the averments made in the counter affidavit filed by the Corporation, that registration of respondent no.8 was renewed on 26.06.2020 as is apparent from a perusal of the document annexed at page 71 of the writ petition. Thus, the renewal was prior to issuance of the NIT. So far as renewal of the registration of respondent no.9 is concerned, we may notice that firstly, the contract has not been awarded to the respondent no.9 and secondly, the registration was renewed on 21.07.2020 pursuant to a letter requesting for renewal of registration submitted on 26.05.2020. So far as the other reasons, namely, reasons (B), (C) and (D) are concerned, the respondent-corporation in its counter affidavit has denied that the petitioner-firm submitted three years outdoor weathering test report of retro reflective sheeting from an Indian Lab from the manufacturers. The respondent-corporation has further stated that though in lieu of outdoor weathering test report from Indian Lab the bidders were permitted to submit a tender certificate conforming to ASTM (D4956-09), however, the petitioner-firm did not submit this document as well. It has been denied in the counter affidavit that none of the participants submitted Rebound Ability Report; rather it has been submitted that all other tenderers had uploaded their reports as per the terms and conditions and this report to be submitted, was an essential feature. The respondents have also stated that the petitioner did not submit the sample for testing. In respect of reasons (B), (C) and (D) as given for not accepting the technical bid submitted by the petitioner-firm, we only observe that this Court while exercising its jurisdiction of judicial review cannot sit in appeal over the decision of the experts. The reasons (B), (C) and (D) clearly lie in technical realm and such technical issues and subjects can be better analyzed by the persons with the technical knowledge.

For the said reasons, the grounds taken by the petitioner-firm assailing the reasons (B), (C) and (D) given by the respondent-corporation-firm not accepting the technical bid also fail.

In view of the discussions made above, we find the writ petition is devoid of merit which is hereby dismissed.

Interim order, if any, shall stand discharged.

In the facts of the case, the parties to bear their own costs.

Order Date :- 1.3.2021

akhilesh/

[Manish Kumar, J.] [D. K. Upadhyaya, J.]