Cooldeck Industries Pvt. Ltd. ... vs The State Of Maharashtra, Thr. ...
2021 Latest Caselaw 17308 Bom

                                1                    WP.8405-2018.P.odt



              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    BENCH AT NAGPUR, NAGPUR.
                               ...

WRIT PETITION NO. 8405 /2018

1) Cooldeck Industries Private Limited Having its office at Unit No.121 Andheri Industrial Estate Andheri Industrial Premises Co-operative Society, 22 Veera Desai Road, Andheri (West) Mumbai 400 053 Through Its authorized representative

2) Prakash Bhargawa Aged about 74 years, Director, Cool Deck Industries Pvt.Ltd.

R/o 2201, Royal Empire Plot No.37 Shastri Nagar, Lokhandwala Andheri (W) Mumbai 400 053.

3)    Harsh s/o Prakash Bhargawa
Aged about 48 years, Director
Cooldeck Industries Pvt.ltd.
R/o 2201 Royal Empire, Plot No.37
Shastri Nagar, Lokhandwala
Andheri (W), Mumbai 400 053.                 ..PETITIONERS
                                            {Petitioner Nos. 2 and 3 added vide
                                            Court's Order dated 25.10.21}
versus

1)   The State of Maharashtra
Through the Department of
Power & Energy, Mantralaya,
Mumbai 400 032.

2)    Maharashtra State Power Generation
Company Limited,
Through its Managing Director
Prakashgarh, Bandra (East)
Mumbai.
                                                  2                                   WP.8405-2018.P.odt



3)     Paras Thermal Power Station
Paras, Taluka: Balapur
Dist. Akola
Through its Chief Engineer

4)     M/s Akshay Enterprises
Through its Proprietor
having its office at Shraddha Nagar,
Paras Teachers' Colony,

Taluka Balapur Dist.Akola-444109. ..RESPONDENTS .................................................................................................................. Mr. S.S. Sanyal & Ms. Shiba Thakur, Advocates for petitioner Mr. G.E. Moharir, Adv. For respondent nos.2 and 3 Mr. Y.D. Nagpure, Advocate for respondent no.4 Mr. A.M. Kadukar, AGP for respondent no.1 .............................................................................................................

CORAM: SUNIL B. SHUKRE & ANIL L. PANSARE, JJ

DATE OF RESERVING: 28.10.2021 DATE OF PRONOUNCEMENT: 13.12.2021

JUDGMENT: (PER ANIL L. PANSARE, J.)

1. Rule. Rule made returnable forthwith. Heard finally with

the consent of respective parties.

2. By means of this petition, the petitioner questions the

manner in which the respondents, more specifically, the respondent

no.3 has ignored the bid of petitioner. According to the petitioner, the

bid of respondent no. 4 does not fulfill the essential criterias' mentioned

in the tender details for "supply and installation of spares for NDCT of 3 WP.8405-2018.P.odt

250 MW Unit at Paras Thermal Power Station" (TPS).

3. The petitioner has come up with a case that the respondent

no.3 has acted with pre-determined mind-set for allotting the tender to

respondent no.4, and therefore, the bid of respondent no.4 has been

accepted, despite absence of proper proof of qualifying requirements

("QR" for the sake of brevity). According to the petitioner, the

respondent no.3 ought not to have opened the price bid of respondent

no.4 as it had not fulfilled the conditions of tender in respect of Techno

Commercial bid. Petitioner further claims that he was qualified bidder,

however his documents have been ignored. The petitioner accordingly

alleges that the act of respondent no. 3 in accepting bid of the

respondent no. 4 is mala fide and arbitrary.

4. Having heard both the sides at length, it appears that prior

to the present tender process, similar process was undergone under the

tender bearing No.75989. The present tender bears No. 78126. The

terms and conditions including the QR in both the tenders, were similar.

In the previous tender, the petitioner and respondent no.4 had

submitted Techno Commercial bids. Both the bids were scrutinized and

deviation of tender committee was recorded. As per the deviation, 4 WP.8405-2018.P.odt

respondent no.4 submitted requisite documents. However, the petitioner

did not. As there was only one qualified agency / proposed tenderer, the

tender was refloated for competitive bids that led to calling upon the

subsequent tender No.78126. The petitioner and respondent no.4 again

participated. According to respondent nos. 2 and 3, the respondent no.4

was qualified and was eligible for opening of its price bid, however the

petitioner was not and hence the deviation was communicated to the

petitioner calling for necessary documents. The petitioner on

17.11.2018 submitted the same documents as were already submitted,

which were not sufficient for fulfilling the QR by the petitioner.

5. The respondent nos. 2 and 3 submit that, earlier when the

petitioner was disqualified considering the QR, it did not challenge the

disqualification. Therefore, now it is not open for the petitioner to

challenge its disqualification with regard to the present tender process,

particularly when specifications as well as QR in both the tenders were

identical. Emphasis of both the parties is on conditions of contract

under Clause 2.1 and QR's which reads as under:

2. Requirement from Tenderers

2.1. The tenderer shall provide satisfactory evidence

concerning that:

5 WP.8405-2018.P.odt

a) The TENDERER has proven experience of design, manufac-

ture, testing supply of similar material / equipment, which are in operation on the date of submission of the tender.

b) The TENDERER does not anticipate change in the owner- ship during the proposed period of contract. If such a change is anticipated, the scope effect thereof shall be defined.

QUALIFYING REQUIREMENT: (SUPPLY) I) TECHNICAL CONDITIONS

1) The bidder should have 3 years' experience in design, man- ufacture and supply.

2) During the last 3 years bidder should have executed at least single order equal to 25% value of tendered items.

3) This item should have been supplied to State/Central power generating company / Any Other State/Central Government undertaking /Public Sector undertaking of India.

II) FINANCIAL / COMMERCIAL CONDITIONS:

1) The bidder should have annual average turnover for last 3 years equal to estimated cost of the tender items.

2)The bidder should produce the copies of statement of An- nual Accounts for previous three years duly certified by a Chartered Accountant OR produce a certificate of annual turnover during previous three years duly certified by a Chartered Accountant.

QUALIFYING REQUIREMENT: (WORK) A. Average annual financial turnover during the last 3 years ending 31st March of the previous financial year should be at least 30% of the estimated cost.

6 WP.8405-2018.P.odt

B. Experience of having successfully completed similar works during last 7 years ending last day of month previous to the one in which applications are invited should be either of the following

I. Three similar completed works costing not less than the amount equal to 40% of the estimated cost.

Or II. Two similar completed works costing not less than the amount equal to 50% of the estimated cost.

Or III. One similar completed works costing not less than the amount equal to 80% of the estimated cost.

(Similar work Means: Proven experience of mechanical main- tenance work of NDCT or annual maintenance Contract of NDCT in any 200 MW or above capacity unit at MSPGCL/NTPC/ SEB's/Public Sector Undertaking/Central Power Generation Company/ (Approved sub vendor of EPC/Turnkey/ BoT contractor of MAHAGENCO.)

C. Bidder should submit the documentary evidence regarding satisfactory performance certificate previously executed similar work contracts.

D. Bidder should have successfully completed the similar na- ture works in MSPGCL/NTPC/SEB's/Public Sector Undertak- ing/Central Power Generation Company/ (Approved sub ven- dor of EPC/Turnkey/ BOT contractor of MAHAGENCO) Bidder must enclose copies of experience/executed work orders.

6. After going through the record, it appears and would also

be relevant to mention that, Estimated Cost of the Tender was Rs.

45,76,815/- of which the bifurcation leads to Estimated value of Work 7 WP.8405-2018.P.odt

QR towards Rs. 9,00,000/- and Estimated value of Supply QR towards

Rs. 36,76,815/-. It also appears from the tender documents that the

Tender on the supply part was for items named PVC fills, Asbestos

Cement pipes, Asbestos cement couplings and end caps and on work

part was for mechanical maintenance work of NDCT (Natural Draught

Cooling Tower) or annual maintenance contract of NDCT in any

200MW or above capacity unit.

7. It is the case of the petitioner that he had satisfied the QR

and therefore his tender ought to have been accepted inasmuch as his

price bid was lower than the price bid quoted by respondent no.4.

Despite this, his tender has been rejected and the tender of respondent

no.4 has been accepted.

8. Since the petitioner has alleged arbitrary act on part of the

respondent nos. 2 and 3 while allotting the tender in favour of

respondent no.4 and while rejecting the tender of petitioner, it will be

necessary to find out whether the petitioner indeed has tendered the

requisite documents.

8. Perusal of the office note concerning deviation (Annexure

R-5 to the petition) would show as to why petitioner is found to be 8 WP.8405-2018.P.odt

ineligible for opening of his price bid. The QR for supply in tender on

the point of financial/commercial conditions, firstly is that the bidder

should have annual average turnover for last three years equal to

estimated cost of tender items and secondly, that the bidder should

produce the copies of statement of annual accounts of previous three

years duly certified by a Chartered Accountant or produce a certificate

of annual turnover during previous three years duly certified by a

Chartered Accountant. The petitioner has not supplied adequate

information to that effect. This appears to be one of the essential

reasons for disqualification of the petitioner. The report would also

show that the petitioner failed to submit necessary documents in respect

of the technical conditions, other financial/commercial conditions and

QR for work. The respondent no.3 appears to have given an opportunity

to the petitioner to submit the documents through deviation letter. The

respondent no.3 called upon the petitioner to submit-

(i) details of order qualifying QR for tendered items supply

part;

(ii) work details of order along with execution document for

similar work portion and

(iii) proof of being manufacturer of tender items or of

participating as dealer.

9 WP.8405-2018.P.odt

The petitioner vide letter dated 17th November, 2018 admits

that it has received tender deviation for submission of documents, but

claims that it had already submitted all the required documents as per

Tender QR, and resubmitted the documents. Thus, the petitioner did not

submit any new document in response to the deviation letter.

Furthermore, petitioner has not even clarified as to how it was eligible

to be qualified or whether it has adequately responded to the deviation

letter.

10. In addition to the above, respondent nos. 2 and 3 have also

pointed out as to how the purchase orders submitted by the petitioner

do not qualify the QR for supply and QR for works on the basis

insufficiency in the purchase orders of the petitioner.

(i) The purchase orders dated 28th April, 2014 and 13th October,

2014 submitted by the petitioner did not qualify under QR for supply as

they were not within three years prior to the date of submission of

tender date 30th November 2018 in terms of QR supply I-1 and

therefore could not be considered. These two Purchase orders did not

even qualify under QR for work regarding experience of mechanical

maintenance work of NDCT or annual maintenance Contract of NDCT 10 WP.8405-2018.P.odt

in any 200 MW or above capacity unit [Refer QR for work- B as the

purchase orders were only for supply and not work.

(ii) The purchase order dated 12th August, 2016 was for supply of only

PVC fills and not for Asbestos Cement pipes, Asbestos cement couplings

and end caps thereby not qualifying under QR for supply for remaining

items. It did not even qualify under QR for work regarding experience

of mechanical maintenance work of NDCT or annual maintenance

Contract of NDCT in any 200 MW or above capacity unit in terms of QR

for work- B as the purchase order was only for supply and not work.

(iii) Purchase orders dated 13th July 2018, 14th March, 2017, 29th December, 2017 were for supply of only PVC fills with installation and not for Asbestos Cement pipes, Asbestos cement couplings and end caps thereby not qualifying under QR for supply for remaining items. It did not even qualify under QR for work regarding experience of mechanical maintenance work of NDCT or annual maintenance Contract of NDCT in any 200 MW or above capacity unit in terms of QR for work - B as the purchase order is only for installation of PVC fills.

(iv) Purchase order dated 4th April,2018 was only for supply of asbes- tos cement pipes and not for Asbestos cement couplings, end caps thereby not qualifying under QR for supply for remaining items. It did not even qualify under QR for work regarding experience of mechanical maintenance work of NDCT or annual maintenance Contract of NDCT in 11 WP.8405-2018.P.odt

any 200 MW or above capacity unit in terms of QR for work - B as the purchase order is only for supply of asbestos cement pipes.

11. As per Respondent no. 2 and 3 all the above purchase

orders submitted by the petitioner did not qualify the QR for supply as

they did not cover the items namely end caps and cement couplings.

Furthermore, they did not even meet the QR for work requiring

experience for work-B, which conclusion we find to be in consonance

with the QR of the tender in question.

12. On the point of acceptance of tender of respondent no.4,

the respondent no.2 and 3 have referred to following documents:

(i) Purchase order dated 24th May 2017 qualifies QR for supply for end

caps, Asbestos cement pipes and Asbestos cement couplings

(ii) Purchase order dated 2nd May 2017 qualifies QR for supply for PVC

fills for Rs. 16,15,597/-.

Both the documents would show that items were delivered

at the respective destination. Thus, it covers the items required to be

supplied and also qualify QR for supply of 3 years. The requirement

under QR Supply I (2) for purchase orders is to the tune of 25% of

value of tendered items i.e. 25% of Rs.36,76,815 = 9,19,204. The

above documents indicate experience of supply required under QR 12 WP.8405-2018.P.odt

Supply I(2).

(iii) Purchase order dated 13th August 2014 for annual maintenance

contract for NDCT unit 250 MW of Rs. 15,05,734 qualifies the QR for

work with regard to experience for similar works during last 7 years as

mentioned in "QR Work B". It also qualifies QR for work with regard to

one similar completed works costing not less than the amount equal to

80% of the estimated cost i.e., 80% of Rs. 9,00,000/- (Estimated cost of

work) = Rs. 7,20,000/- as mentioned in "QR B. III".

13. The respondent no. 4 has also filed certificate of

manufacturers, M/s ZEMKAL for Plastic Industrial Component, i.e., PVC

fills and M/s ARL Infratech Ltd. manufacturer of asbestos pipes and

components. Thus, Respondent No. 4 had established eligibility as per

QR for supply part.

14. The above justification for accepting tender of respondent

no. 4 and rejecting tender of petitioner appears to us to be in

accordance with the tender conditions.

15. Learned counsel for the petitioner has also argued that

there was no scope for issuance of deviation in view of clause no.27 of 13 WP.8405-2018.P.odt

the tender. This clause is under the head 'ambiguity in quotation or

deviations' and provides that the tenderer shall ensure that his quotation

should quote the tender in clear terms and that there shall be no

deviation in respect of the terms specified in clause 27. One of the terms

is non-compliance of special conditions specified. It is accordingly,

argued that if the petitioner had not submitted the requisite documents,

the deviatikon ought not to have issued to him, which according to

petitioner, has been done to avoid retender and thus to favour the

respondent no.4.

16. On the point of deviation, the petitioner has relied upon the

judgment rendered by the Hon'ble Supreme Court in the case of

Reliance Energy Limited vs. Maharashtra State Board Development

Corporation Ltd. and others, reported in (2007) 8 SCC 1. The emphasis

is on paragraph 38 and 39 which read as under:

"38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This "legal certainty" is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of "level playing field".

14 WP.8405-2018.P.odt

"39. In the case of Reliance Airport Developers (P) Ltd. v.

Airports Authority of India and others -(2006) 10 SCC 1, the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision- making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms. Those norms may be legal norms or accounting norms. As long as the norms are clear and properly understood by the decision-maker and the bidders and other stakeholders, uncertainty and thereby breach of rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above "certainty" is an important aspect of rule of law. In the case of Reliance Airport Developers (supra), the scoring system formed part of the 15 WP.8405-2018.P.odt

evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks had different stages. Objectivity was thus provided."

17. In our view, the aforesaid judgment will be of no help to the

petitioner inasmuch as the facts before the Hon'ble Supreme Court were

altogether different. The petitioner therein had challenged the

disqualification by the respondent which was on the basis of the account

statement submitted by the petitioner. The account statement submitted

by the petitioner was in terms of different accounting system than what

the respondent adopted. The respondent therein had in its tender

document not clarified the accounting system that would be adopted to

assess the account statement furnished by the respective bidders. It is in

this backdrop, the Hon'ble Supreme Court has held that the terms and

conditions must indicate with legal certainty, norms and benchmark.

18. In the present case, it is nobody's case that any of the terms

or condition in the tender was ambiguous. What is questioned by the

petitioner is the deviation addressed to petitioner by respondent no.3

calling upon him to furnish documents. In our considered view, such a

letter could only be termed deviation in the form of relaxation given 16 WP.8405-2018.P.odt

to the petitioner thereby granting an opportunity to submit requisite

documents in support of its claim which is permissible. The petitioner

appears to have overlooked the observations made by Hon'ble Apex

Court in paragraph 37 of the said judgment which reads thus:

"37(15). While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily or by any ulterior criteria."

19. We may lay down emphasis on the judgment in the case of

Tata Cellular vs. Union of India, reported in (1994) 6 SCC 651 wherein

the Hon'ble Supreme Court held that the principles of judicial review

would apply to the exercise of contractual powers by Government

bodies in order to prevent arbitrariness and favoritism and, therefore,

there are inherent limitations in exercise of that power of judicial

review. The Court further held that the Government is the guardian of

the finances of the State and that Government is expected to protect the

financial interest of the State and that he right to refuse the lowest or

any other tender is always available to the Government. The Court then

held that there can be no question of infringement of Article 14 of the 17 WP.8405-2018.P.odt

Constitution if the Government tries to get the best person or the best

quotation. The right to choose cannot be considered to be an arbitrary

power unless it is shown that said power is exercised for collateral

purpose.

20. The petitioner appears to have pleaded arbitrariness and

favoritism just to wriggle out of the well-settled principles of law as

enumerated in the aforesaid judgment. It is so because apart from the

words, there is absolutely nothing on record to show that respondent

no.3 has acted arbitrarily or unfairly or irrationally to favour respondent

no.4. Rather it appears that respondent no.3 has given a fair

opportunity to petitioner to submit requisite documents and complete

the QR of technical bid. However, petitioner failed. We, thus find no

substance in the petitioner's contentions.

21. The sum and substance of the above discussion is that the

petitioner and respondent no.4 had participated in both the tenders i.e.

Tender Nos. 78126 and 75989. Both were found ineligible in the

technical/financial bid in previous tender. Deviation was issued to both.

Petitioner failed to submit requisite documents but respondent no.4

did. There being only one valid bid, tender was refloated. The petitioner 18 WP.8405-2018.P.odt

did not challenge his qualification in the previous tender. The

petitioner did not allege that he was disqualified by respondent nos.2

and 3 in order to favour the respondent no.4 in the previous tender. The

petitioner did not challenge refloating of the tender. The petitioner

participated in the subsequent tender without any protest. The

eligibility criteria for both the tenders was identical. The petitioner,

knowing fully well that he could not disqualify in the technical/financial

bid in the previous tender, failed to submit the requisite documents in

subsequent tender. He levelled allegations against the respondent no.3

for the first time when he failed to qualify in the technical/financial

bid in the second round. The petitioner was given opportunity to

submit the requisite documents by way of deviation in the form of

relaxation in both the tenders. However, he failed to avail opportunity.

22. In the above set of facts it cannot be said that the

respondent nos.2 and 3 have acted with predetermined mind to allocate

tender to respondent no.4. It appears from record that the petitioner did

not qualify in terms of the qualifying requirements mentioned in the

tender. The respondent no.4 has submitted the requisite documents

and, therefore, found to be eligible and, accordingly, the tender has

been allotted to respondent no.4. In the circumstances, keeping in mind 19 WP.8405-2018.P.odt

the law laid down by the Hon'ble Supreme Court in Tata Cellular vs.

Union of India ( cited supra) no interference is permissible in the

action taken by the respondent nos.2 and 3 in processing tender.

23. The petitioner, thus, has failed to make out any case. The

petition is devoid of merit, hence dismissed. Rule discharged.

            JUDGE                              JUDGE
sahare