Bombay High Court
Amit Dinkar Humbe vs Shri. Kalyan Daulatrao Nalge, Engg And ... on 3 September, 2024
Author: Amit Borkar
Bench: Amit Borkar
2024:BHC-AS:35703-DB
9-wp11889-2024-F.doc
VRJ
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.11889 OF 2024
Shri Kalyan Daulatrao Nalge,
Engg. & Contractor (Regd.)
Through Its Authorised
Representative Sonu Kumar Singh ... Petitioner
V/s.
The State of Maharashtra, Through
Ministry of Urban Development
& Ors. ... Respondents
WITH
INTERIM APPLICATION (ST.) NO.24861 OF 2024
IN
WRIT PETITION NO.11889 OF 2024
Amit Dinkar Humbe ... Applicant
In the matter between
Shri Kalyan Daulatrao Nalge,
Engg, & Contractor (Regd.)
Through Its Authorised
Representative Sonu Kumar Singh ... Petitioner
V/s.
The State of Maharashtra, Through
Ministry of Urban Development
& Ors. ... Respondents
Mr. Atul Damle, Senior Advocate a/w Ms. Payal Vardhan
with Kinnari Raut i/by Anand Kulkarni for petitioner.
Mr. Rhishikesh M. Pethe for respondent Nos.2 & 3.
Mr. P. P. Kakade, Government Pleader with Mr. O. A.
Chandurkar, Additional Government Pleader with Ms. G. R.
Raghuwanshi, AGP for State - respondent No.1.
1
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CORAM : DEVENDRA KUMAR UPADHYAYA, CJ &
AMIT BORKAR, J.
DATED : SEPTEMBER 3, 2024
ORAL ORDER: (PER AMIT BORKAR, J.)
1. Challenge in this petition, instituted under Article 226 of
the Constitution of India, has been made to tender Condition
No.2.3.2 of Request for Proposal (RFP) floated by respondent
No.2 for the Work of Scientifically Processing Existing Legacy
Waste (MSW) through the process of
bioremediation/biomining.
2. The impugned condition in the RFP is as follows:
"2.3 Minimum Qualification Requirement - Technical
1. ..............
2. Experience in Disposal of RDF
Contractor must have dispatched minimum 2 lakh MT of
RDF/SCF produced from legacy waste in cement
factory/Power Plants for final disposal as per CPHEEO
guidelines in preceding seven years prior to bid due
date.
Records depicting scientific disposal/sale of finished
products-Certificate from cement factory/Power Plants
along with NABL lab reports, Tax invoices raised by
bidder to consumer and payment records from
consumer to bidder.
A consistent history of litigation or arbitration awards against
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the Applicant may result in disqualification."
3. The impugned condition is a pre-qualification criterion
that mandates tenderers to possess experience in dispatching
a minimum of 2 lakh metric tonnes (MT) of Refuse-Derived
Fuel (RDF) or Solid Combustible Fraction (SCF), produced
from legacy waste, to cement factories or power plants for
final disposal in accordance with the CPHEEO guidelines within
the seven years preceding the bid due date.
4. The relevant facts necessary for the adjudication of the
issue raised in this petition are as follows:
5. The Pune Municipal Corporation issued a Request for
Proposal (RFP) for the scientific processing of existing legacy
waste (Municipal Solid Waste) through
bioremediation/biomining at Uruli Devachi/Phursungi, Pune.
As per the RFP, the estimated cost of the project for Phase I is
Rs. 84.4 crore. Clause 2.1 of the RFP required all bidders to
submit the information and documents specified therein. The
minimum technical qualifications are outlined in Clause 2.3.
Clause 2.3.1 which pertain to the experience in the project,
allowing the bidder to select only one criterion out of TQ1,
TQ2, or TQ3, with mixing of criteria prohibited to meet the
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minimum qualifications. Clause 2.3.2, which is impugned in
this petition, is extracted above. Clause 2.4 stipulates that
even if the bidders meet the aforementioned qualifying
criteria, they may still be disqualified if they have made
misleading or false representations in their bid submissions,
have a history of work abandonment, have consistently
engaged in litigation, or have adverse arbitration awards
against them. Clause 2.5 pertains to the minimum financial
requirements, which necessitate a positive net worth in any
three of the last five years and an annual financial turnover
exceeding Rs. 33,76,00,000/- in the last three financial years.
6. Clause 2.6 stipulates that only those bids that conform
to the minimum technical qualifications and the terms and
conditions outlined in the bid document will be considered
responsive.
7. A total of 20 bidders participated in the tender process.
A pre-bid meeting was held on 22 July 2024, where 14 out of
the 20 bidders, including the petitioner, raised queries
concerning Clause 2.3.2 and suggested various amendments
to the tender document.
8. In response to the pre-bid meeting, respondent No. 3
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submitted a report on 26 July 2024, recommending that
Clause 2.3.2, regarding the RDF disposal experience
requirement, should neither be removed nor modified.
respondent No. 2, after considering the report submitted by
respondent No. 3, approved the recommendation via
Resolution No. 6/345 on 2 August 2024.
9. The last date for the submission of the online bid was
extended to 13 August 2024, with the physical submission
deadline set for 19 August 2024. Given that the bid opening
was scheduled for 14 August 2024, the petitioner challenged
Condition No. 2.3.2 by filing the present writ petition on 10
August 2024.
10. Respondent No. 2 contested the petition by filing an
affidavit-in-reply, contending that Pune, being an urban city,
faces a significant challenge with large quantities of Municipal
Solid Waste (MSW). According to the Solid Waste
Management Rules, 2016, legacy waste is processed using
biomining and bioremediation, resulting in its broad
segregation into recyclables, bio-soil, construction and
demolition waste, inert material, and RDF. While the disposal
of recyclables, construction and demolition waste, and bio-soil
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can be managed within the city, RDF poses a disposal
challenge due to its nature. RDF is only disposed of as fuel in
cement factories or power plants, the nearest of which are
located 350 kilometers from Pune. Bidders must therefore
transport RDF to these facilities at their own expense.
Scientific disposal of RDF is mandated under the Central
Public Health and Environmental Engineering Organisation
(CPHEEO) guidelines. To prevent unscientific disposal of RDF,
which could lead to air and groundwater pollution, RDF must
be disposed of in facilities approved by the Central or State
Pollution Control Board. The utilization of RDF in power plants
and cement kilns reduces the use of natural fossil fuels,
thereby protecting the environment. Hence, the pre-
qualification criterion for RDF disposal, requiring that the
contractor have prior experience in RDF disposal in
accordance with relevant rules, justifies the inclusion of
Condition No. 2.3.2.
11. Mr. Damle, learned Senior Advocate, submitted that,
although all other tender conditions were prepared pursuant
to guidelines issued by the Ministry of Housing and Urban
Affairs, Government of India but for Clause No. 2.3.2 these
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guidelines do not have any corresponding clause. He argued
that the inclusion of Clause No. 2.3.2 favours a select few
bidders, which would ultimately burden the public exchequer.
He contended that Clause No. 2.3.2 is arbitrary and lacks any
correlation with the scope of work, thereby violating Article 14
of the Constitution of India. Therefore, the impugned clause
should be quashed.
12. Mr. Pethe, learned Advocate for respondent No. 2,
opposed the relief sought in the writ petition, denying the
petitioner's allegations that Condition No. 2.3.2 suffers from
arbitrariness or irrationality. He argued that, given the
CPHEEO guidelines for the scientific disposal of RDF, the
condition is necessary to prevent unscientific disposal and the
resultant environmental harm. Since RDF produced during the
biomining of legacy waste is utilized in power plants and
cement kilns, the pre-qualification criterion ensures that the
bidder has adhered to these criteria in prior projects. He
therefore urged the Court to dismiss the writ petition
summarily.
13. The scope of interference by this Court under Article 226
of the Constitution of India in tender matters has been
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reiterated by the Supreme Court in its recent judgment in
Subodh Kumar Singh Rathour v. The Chief Executive
Officer & Ors., reported in 2024 SCC OnLine 1682. The
Supreme Court emphasized that, in matters concerning the
modalities of the contract, such as the required work,
execution methods, material quality, timeframe, supervision
standards, and other aspects impacting the tender's purpose,
the Court usually refrains from interference. It was further
held that judicial review in tender matters is confined to
preventing arbitrariness and ensuring that public authorities
do not abuse their powers, even in contractual matters.
Paragraph No. 57 of the said judgment is relevant and is
reproduced hereunder:
"57. It is needless to state that in matters concerning specific
modalities of the contract -- such as required work, execution
methods, material quality, timeframe, supervision standards,
and other aspects impacting the tender's purpose -- the
Court usually refrains from interference. State authorities,
like private individuals, have a consensual element in contract
formation. The stipulations or terms in the underlying
contract purpose are part of the consensual aspect, which
need not be entertained by the Courts in writ jurisdiction, and
the parties may be relegated to ordinary private law remedy.
Judicial review does not extend to fixing contract stipulations
but ensures that the public authorities act within their
authority to prevent arbitrariness."
14. Having noted the principle enunciated by the Supreme
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Court in the aforementioned judgment concerning the scope
of interference in tender conditions under Article 226, we now
proceed to examine whether the impugned Condition No.
2.3.2 is so irrational and arbitrary as to vitiate the entire
tender process, and whether interference in this petition
would serve the public interest.
15. The tender Condition No. 2.3.2 emphasizes the
contractor's experience in handling and processing large
quantities of RDF from legacy waste. This is significant
because the bioremediation of legacy waste often results in
the production of RDF, which must be disposed of in an
environmentally sustainable manner. The condition ensures
that the contractor not only has experience in the
bioremediation process but also in managing the end-product,
ensuring its proper disposal or utilization, such as in cement
kilns. By requiring the contractor to have dispatched 2 lakh
MT of RDF, the tender aims to ensure that the contractor
possesses the capacity to handle large volumes of waste,
process it effectively, and manage the logistics of RDF disposal
or utilization. This requirement is intended to ensure that only
contractors with proven large-scale operational capabilities
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and an established supply chain for RDF disposal are
considered, thereby reducing the risk of project failure. The
condition also ensures that the contractor has adhered to
environmental norms and standards in the past, particularly in
the context of RDF production and utilization. Cement
factories often require RDF that meets specific quality
standards for use as an alternative fuel, which implies that the
contractor has maintained high environmental and quality
standards in their previous work.
16. The disposal of legacy waste and the production of RDF
are of significant public interest, particularly in terms of
environmental sustainability. The tender condition aims to
ensure that the contractor can contribute to sustainable waste
management practices by successfully converting legacy
waste into RDF and utilizing it in an eco-friendly manner. The
condition appears to be rationally connected to the overall
objective of the project, which includes not only the
bioremediation of legacy waste but also the responsible
disposal of by-products like RDF. The nexus between the
tender condition and the scope of work lies in ensuring that
the contractor has the necessary experience, capacity, and
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compliance history to manage the entire process of legacy
waste bioremediation, including the critical aspect of RDF
disposal, which is integral to the project's environmental and
operational success.
17. An entity issuing an invitation to bid is entitled to
prescribe appropriate conditions for qualification or eligibility.
These eligibility conditions are designed to ensure that a
bidder is capable of fulfilling the contractual obligations that
would arise upon the award of the contract. Such criteria may
include requirements related to the technical competence of
the prospective bidder, the financial stability of the bidder, and
the bidder's experience in executing projects of a similar
scale.
18. As observed by the Supreme Court, judicial review of
tender conditions is limited in scope. The Court may intervene
in exceptional circumstances where it is demonstrated that a
tender condition has been crafted with the intent to create a
monopoly in favour of a particular bidder. Similarly, an
applicant may challenge the legality of a tender condition on
the ground that it is wholly arbitrary or it constitutes a misuse
of statutory power conferred upon the tender-issuing
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authority.
19. Ultimately, the test is whether the tender condition is
arbitrary or lacks a rational nexus with the objective of
securing the efficient and expeditious completion of the
contract. In the present case, there is evidently a nexus
between Condition No. 2.3.2 and the nature of the work to be
performed by the successful bidder.
20. The next contention advanced on behalf of the petitioner
is premised on the guidelines framed by the Ministry of
Housing and Urban Affairs (MHUA). According to the
petitioner, except for Condition No. 2.3.2, all other conditions
prescribed in the MHUA guidelines have been incorporated by
respondent No. 2 as tender conditions. However, the
petitioner has failed to present any evidence on record to
demonstrate that the MHUA guidelines possess statutory force
or are binding upon respondent No. 2. In the absence of such
evidence, the tender condition, which has been shown to have
a rational basis as indicated earlier, cannot be characterized as
arbitrary or unfair.
21. The petitioner contends that Condition No. 2.3.2 has
been incorporated to benefit three or four bidders; however, in
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the absence of any specific pleadings or evidence on record to
substantiate this assertion, the unsubstantiated claim that the
condition is tailor-made cannot be accepted.
22. Therefore, in our considered opinion, the impugned
tender Condition No. 2.3.2 is neither irrational nor arbitrary,
and it is not in the public interest to interfere with the present
petition.
23. Consequently, the writ petition stands dismissed. There
shall be no order as to costs.
24. The interim application, if any, accordingly stands
disposed of.
(AMIT BORKAR, J.) (CHIEF JUSTICE)
