Vedanta Limited, vs The Board Of Trustees Of ...
2022 Latest Caselaw 1117 AP

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     HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU
             WRIT PETITION No.242 of 2022
ORDER :

This Writ Petition is filed by the petitioner questioning

their disqualification as a bidder for the work of Mechanization

of WQ 7 & 8 berths in the respondent Port Trust and to issue

a consequential relief.

This Court has heard Sri P. Veera Reddy, learned senior

counsel for the petitioner and Sri Raviteja Padiri, learned

standing counsel for Visakhapatnam Port Trust

PETITIONER'S SUBMISSIONS:

Learned counsel for the petitioner submits that the

petitioner is aggrieved by the action of the respondent dated

17.12.2021 and the disqualification of the petitioners bid on

the sole ground that the bid was not filed "online" and was filed

physically only.

Learned senior counsel submits that the petitioner

participated in a bid for mechanization of WQ 7 and 8 berths.

They had purchased the documents (RFQ) on 11.11.2021.

They submitted their bid on 30.11.2021. According to the

petitioner they were required to submit the bid in the physical

form along with a soft copy of all the documents. The case of

the petitioner is that they had physically submitted their bid

complete in all respects on 30.11.2021. During the course of

meeting for opening of bids, they were informed that they were

disqualified on the ground that they had not uploaded their bid

in the online method in a particular portal

https://etenders.gov.in. Learned senior counsel for the

petitioner took this Court to various clauses available in the

bid documents, which according to him provided for filing of

the bid manually and in the physical form only. Learned senior

counsel argues that at no point of time that the petitioners were

informed that they had to file a bid in the online form. Learned

senior counsel drew the attention of this Court to the very

notice of the invitation which stated that the documents should

be submitted by hand delivery or sent by registered post etc.

He also drew the attention of this Court to Clause 2.1.0 of RFQ

which states that the respondent has the right to modify the

RFQ terms by issuing an addendum. But as per 2.10.2 the

addendum this has to be sent in writing to all the applicants.

Learned counsel drew the attention of this court to Clause

2.1.3 which mandated that the application should be filed in

an envelope which needed to have certain markings, sealing,

seals etc. He also drew the attention of this court to Clause

2.1.3 stating that the application submitted by fax, telex or

email shall be rejected. Learned senior counsel, therefore,

argues that the respondent did not act bona fide or in a manner

required as per law. According to him the action of the

respondent is per se arbitrary and are therefore this Court

must interfere at this stage only. Learned senior counsel relies

upon the judgment of the Hon'ble Supreme Court of India in

B.S.N.Joshi & Sons Ltd., v Nair Coal Services Ltd., 1to argue

that the respondent did not act as required under law and that

their action is not fair and that consequently the Writ Petition

is to be allowed.

In reply to the stand taken by the respondent that a

corrigendum was issued he submits that the same was never

communicated to the petitioner. It is also submitted by the

learned senior counsel that at no point of time the respondent

clarified that the electronic filing is mandatory. Learned senior

counsel submitted that they had purchased their bids on

11.11.2021 and the alleged clarification was issued in a

meeting purportedly held on 05.11.2021. Learned senior

counsel submits that the petitioner did not even purchase the

bid papers at that point of time and they were not informed of

this so-called mandatory clause.

RESPONDENT SUBMISSIONS:

In reply to this, Sri Raviteja Padiri, learned standing

counsel argues in line with what is stated in his counter

affidavit. According to him on 05.11.2021 in the pre-

application meeting held some of the bidders raised some

queries, as a result of which a corrigendum was issued making

online submission of the RFQ mandatory. Learned counsel

argues that in this case petitioner merely filed their bid in the

manual method but did not file in online method which

according to the learned standing counsel is mandatory. He

(2006) 11 SCC 548

also argues that the bidder should take care to download all

the clarifications etc., and to download all the required data.

He relies upon a note which is annexed to the bid which states

as follows:

"Note: In case RFQ document is downloaded from VPT's website, the applicant is responsible to download Addendums / Amendments / replies to queries etc., if any issued by the Port"

Learned counsel argues that it is not correct to state that

the corrigendum was not noticed by the petitioner as he has a

duty to download all the addendums, amendments and reply

to queries. In the brief submitted by the learned standing

counsel to the Court in a single page he points out that there

are 13 corrigendum issued and he highlights the present

corrigendum. Therefore, for this reason learned counsel argues

that as the petitioner failed to meet the essential condition the

rejection of this bid is correct. He relies upon a compendium

of case law to argue that the Court should lightly interfere in

tender matters etc., that the mandatory condition is not

fulfilled and that the decision is rightly taken.

COURT:

In the opinion of this Court there is no dispute on facts

in this case. It is clear that the petitioner purchased the bid

documents and submitted their bid in the manual

mode/physically only The petitioner was disqualified as they

have not submitted their bid in the online mode also. The

disqualification is based on a corrigendum to the tender

document which mandated the filing of the bid in the online or

electronic form also.

After hearing the learned counsels the questions that

arise are about the corrigendum said to have been issued on

12.11.2021:- Whether the same is mandatory and whether it

was communicated to the petitioner.

This Court notices that the entire stand of VPT-

respondents is based upon the alleged corrigendum which was

issued in a meeting dated 12.11.2021. As can be seen from the

pleadings, documents etc., the pre-bid meeting that was held

on 12.11.2021 was for "EQ7" project (the present case and the

present tender relates to WQ7/WQ8). In this pre-bid

conference, a corrigendum is said to have been issued, wherein

it is stated that the completed application is to be submitted

through online CPC portal and also to submit the hard copies.

Hence, the decision making process based on this

"corrigendum clause" is being examined by this Court and the

conditions in the bid document/tender document that are

essential are discussed below.

The first clause that falls for consideration about the

manner of filing, is in Ex.P.1. This is the opening page of the

document which describes the RFQ etc.

"....The completed Application in the required format containing all information requested in RFQ document should be submitted either by hand delivery or sent by Registered Post / Speed Post / Courier to reach the office of the Chief Mechanical Engineer, Administrative Office, Building, 2nd floor, Visakhapatnam Port Trust,

Visakhapatnam - 530035 before 14:00 hrs., on 20.11.2021 and will be opened at 15:00 hrs on the same day." (Emphasis supplied)

The next clause in the immediate next page is as follows:

"Note: in case an RFQ document is downloaded from VPT's website, the Applicant is responsible to download Addendums / Amendments / Reply to Queries etc., if any issued by the Port (CHIEF MECHANICAL ENGINEER)."

The next important clause is 2.10 -

"2.10 Amendment of RFQ 2.10.1 At any time prior to the deadline for submission of application, the Authority may, for any reason, whether at its own initiative or in response to clarifications requested by an Applicant, modify the RFQ by the issuance of Addenda.

2.10.2 Any Addendum thus issued will be sent in writing to all those who have purchased the RFQ.

2.10.3 In order to afford the Applicants a reasonable time for taking an Addendum into account, or for any other reason, the Authority may, in its sole discretion, extend the Application due date." (Emphasis supplied)

Clauses 2.13.1 and 2.13.2 (vii) are also important:

"2.13 Sealing and Marking of Applications 2.13.1 the Applicant shall submit the Application in the format specified at Appendix-I, together with the documents specified in Clause 2.13.2, and seal it in an envelope and mark the envelope as "APPLICATION". The applicant shall seal the original and the copy of the Application, together with their respective enclosures, in separate envelopes duly marking the envelopes as "ORIGINAL" and "COPY". The envelopes shall then be sealed in an outer envelope which shall also be marked in accordance with Clauses 2.13.2 and 2.13.3. .....

.....

(vii) 2 (two soft copies of the Application on a Compact disc (CD): and ....

....

2.13.5 Applications submitted by fax, telex, telegram or e- mail shall not be entertained and shall be rejected."

A conjoint reading of these clauses makes it very clear

that (a) RFQ document shall be downloaded from the CPP

portal and submitted in the physical form by hand delivery or

sent by Registered Post / Speed Post / Courier to reach the

office of the Chief Mechanical Engineer-Respondent No.3.

b) these clauses can be amended but Clause 2.10.2 very

clearly states that any addendum issued will be sent "in

writing" to all those who have purchased the RFQ. It is clear

that there is a duty cast upon the respondent Port to send every

addendum in writing to all those who have purchased the RFQ.

Considering the importance of addendum, Clause 2.10.3 states

that the authority can also extend the date of application.

c) Clause 2.13 also assumes importance. It describes in

great detail the manner in which the application is to be

physically filed. The sealing of the cover, the enclosures to be

included, the manner in which the cover is to be marked etc.,

are spelt out with great clarity in 2.13. Separate envelopes are

to be given marking them as Original and Copy. These two

envelopes should be kept in an outer envelope which should

also be marked in accordance with clause 2.13.2 and 2.13.3.

The envelope should also contain two soft copies of the

application on a Compact disc.

c) Clause 2.31.5 assumes even greater significance. It

clearly states that an application submitted by fax, telex,

telegraph or e-mail shall not be entertained and shall be

rejected.

A conjoint reading of all these clauses makes it very clear

that as per the original terms of the bid which were purchased

by the petitioner the application / bid should be submitted in

the physical form only. It is also specified the bid was

submitted in online form it will not be entertained and shall be

rejected.

This Court also notices that the so called addendum

issued on 05.11.2021 is not filed as a document. It is

mentioned in a typed note submitted during the hearing and it

is as follows:

"There are about 13 Corrigendums issued to the RFQ in the present project. Out of the 13, Corrigendum No.8 relates to Page No.5 Para No.5 of the RFQ Document, by which there is a modification in respect of submitting the RFQ document. As per the modified condition, The completed Application in the required format containing all information requested in RFQ document should be submitted through online in CPP Portal, https://etenders.gov.in and also submit the hard copies by hand delivery or sent by Registered Post / Speed Post / Courier to reach the ......... before 15.00 hrs on 20.11.2021."

It is relied upon in the counter affidavit also.

Even if what is stated in the counter affidavit is treated

at face value as correct, this Court is of the opinion that the

Claus does not indicate that the bid filed in the manual mode

/ physical mode will be rejected, if the same is not filed in the

electronic form also. In the opinion of this court if filing in the

electronic mode was mandatory it should have been very

specifically clarified in the corrigendum and also

informed/communicated in writing in terms of Clause 2.10.2

to every purchaser of the bid documents. The mere fact that

such a corrigendum was issued and it was purportedly

uploaded on the website does not make it "mandatory". It

should have been expressly communicated to all the potential

bidders since it is contrary to many of the other clauses. The

language used should be clear and categorical, if it leads to

such drastic consequences. For example, in Clause 2.13.5 it

is very clearly stated that if the application is submitted by

e-mail it shall not be entertained and shall be rejected. Such

clear and categorical language spelling out the consequences

is not visible from the corrigendum. Clauses with potentially

serious consequences should be clearly and categorically spelt

out in the bid documents more so when they are the result of

an amendment or an addendum.

There is also an issue raised by the petitioner about the

portal from which they had downloaded the document. The

petitioner before this Court is clearly stating that they have

downloaded the RFQ document from the CPP portal but not

from the VPT portal. The clause relied upon by the respondent-

VPT casting a duty on a bidder to download the addendum is

referring only to VTPs website and it is not referred to CPP

Portal.

Apart from what is stated above there is no material

available before this Court to show that the corrigendum as

stated has actually been posted on the website.

Therefore, while being conscious of this Courts

limitations while exercising power in tender matters under

Article 226 of the Constitution this Court has to hold that the

corrigendum relied upon by the respondent does not support

their case and the decision taken by the respondent is arbitrary

and runs contrary to the law which mandates that every bidder

is entitled to fair and equal treatment. In the opinion of this

Court, the number of clauses which are reproduced earlier

which mandated the filing of the tender document in a

particular format (physically) cannot be brushed aside totally.

The weight that is to be given to these clauses is very significant

in the opinion of this Court. The respondent VPT definitely has

a right to modify the clause but they should communicate the

same "in writing". Even if the corrigendum as mentioned in the

note is taken at its face value and can be said to have been

communicated, this Court is of the opinion that it was never

specified anywhere that if the bid is also not filed in the

electronic mode / offline also it will be rejected. Only if the

corrigendum is as per the tender conditions and it specifies

that the bids will be rejected if they are not filed both in the

physical and electronic mode, can it be said that the mandatory

condition was not followed by the petitioner. Needless to say

this corrigendum must be communicated clearly to all bidders.

In the absence of any such proof and in the light of these clear

and categorical directions given to the petitioner how to file a

tender this court is of the opinion that the respondent's

decision is arbitrary and contrary to their own instructions

given at various other places in the tender document.

In addition to all of the above, as mentioned earlier, the

tender is still at the stage of evaluation of the pre-bid

qualifications. The bidders are being pre -qualified and then

invited to file their financial bids etc. Therefore, public interest

is also not being hurt in any way nor is any delay likely to be

caused to the project itself. The writ petition is itself being

decided with the consent of all the learned counsels.

The very purpose of inviting tenders is to ensure that the

respondent-VPT gets the service it wishes at the best prices.

By widening the scope or by getting more bids the requirements

of the respondent would in fact be satisfied. More competitive

bidding would result in better services for the respondent-VPT

since the project is a long term project.

In conclusion this Court holds that the respondent VPT

which is a state instrumentality should be a model employer.

It should not take hyper technical pleas. Transparency, clarity

and procedural fairness in action are essential but unwritten

conditions in all such tender documents which are

incorporated by law. The said procedural fairness aspect is not

visible in this case. The corrigendum is not clear enough to

eliminate the petitioner. The case law filed by the petitioner is

not being adverted to in full. They are the settled law on the

subject. The locus classicus is Tata Cellular v Union of

India2. In line with para 77 of this famous judgment if the

decision making in the present case is examined this Court

finds that: the decision making authority exceeded its powers;

committed an error of law; reached a conclusion that no

reasonable tribunal would reach. The facts taken as a whole

cannot logically warrant the conclusion of the respondent VPT.

The procedural impropriety is striking and clear. The petitioner

was denied the right to equality and fair treatment (Meerut

Development Authority v Association of Management

Studies3).

For all the above reasons, the Writ Petition is allowed.

The action of the respondent No.1 in disqualifying the

petitioner at this stage is held to be illegal. The respondents

are therefore directed to consider the bid submitted physically

(1994) 6 SCC 651

(2009) 6 SCC 171 (para 27)

by the petitioner and evaluate it strictly on its own merits.

There shall be no order as to costs.

Consequently, the Miscellaneous Applications

pending, if any, shall stand closed.

__________________________ D.V.S.S.SOMAYAJULU,J Date:03.03.2022 Ssv

HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU

WRIT PETITION No.242 of 2022 Date:03.03.2022 ssv