Calcutta High Court

Madho Das Mundhra vs Railtel Corporation Of India ... on 20 December, 2021

                       In The High Court at Calcutta
                      Constitutional Writ Jurisdiction
                               Original Side

The Hon'ble Justice Sabyasachi Bhattacharyya


                              WPO No. 281 of 2020
                           Madho Das Mundhra
                                    Vs.
             Railtel Corporation of India Limited and another


For the petitioner       :      Mr. Suddhasatva Banerjee,
                                Mr. S. Dasgupta

For the respondents       :     Mr. Vikas Baisya

Hearing concluded on     :      22.11.2021

Judgment on              :      20.12.2021

The Court:

1. The petitioner has challenged the Notice Inviting Tender (NIT) dated

August 26, 2020, floated by the respondent-authorities for deployment

of maintenance teams for maintenance of Optical Fibre Cable

Network. The date stipulated for seeking clarification regarding NIT

was September 4, 2020 (12 noon to 2.00 pm), the bid submission was

to start on September 10, 2020 and end on September 24, 2020 at

2.00 pm.

2. Learned counsel for the petitioner, allegedly an intending bidder,

contends that although the petitioner sought for certain clarifications

regarding certain terms of the tender notice by a letter dated

September 3, 2020, the reply thereto, given by the respondent-

authorities, did not carry any such clarification worth the name.

Subsequently, the present writ petition was affirmed on September

18, 2020 and filed before the last date of submitting bids.

3. Learned counsel for the petitioner argues that the petitioner is entitled

to challenge the NIT even without having participated in the tender

process, since the petitioner, being a prospective bidder, has

challenged the legality and constitutionality of several terms of the

tender documents itself which, according to the petitioner, are unfair

and illegal.

4. In further reply, the learned counsel distinguishes a judgment

reported at (2020) SCC OnLine (Cal) 2213 [Subir Ghosh Vs. State of

West Bengal and others], which was cited by the respondents. Counsel

contends that, in the said case, the online bid submission date was

April 1, 2019, but the writ petition was filed in January, 2020. In

such context, it was found that a person who has not participated in

the bidding process at all cannot challenge the tender conditions on

any ground whatsoever.

5. However, in the present case, the petitioner has affirmed and filed the

writ petition before closure of the submission of bids.

6. While seeking to distinguish another judgment cited by the

respondents, reported at (2018) 8 SCC 243 [National Highways

Authority of India Vs. Gwalior Jhansi Expressway Limited], learned

counsel for the petitioner contends that the same is inapplicable to

the facts of the present case. In the said judgment, the Apex Court

held that, having failed to participate in the tender process, the

respondent in that matter could not contend similar rights as bidders

who had participated in the process.

7. However, in the said decision, the Supreme Court considered the fact

that the validity of the tender document itself had not been challenged

before any competent forum, as opposed to the present case. It is

argued that the petitioner does not complain of any breach or non-

fulfilment of the terms and conditions of the tender but challenges the

clauses of the tender itself.

8. As far as the other unreported judgment cited by the respondents,

passed in A.P.O.T. No.98 of 2021 [Madho Das Mundhra Vs. Railtel

Corporation of India and another] is concerned, learned counsel for the

petitioner submits that no ratio was laid down therein and the same

was an order passed in connection with an interlocutory application.

9. Learned counsel submits that, on the contrary, if the petitioner had

participated in the tender process and then sought to challenge the

terms of the tender, the petitioner would have been barred from doing

so by the principle of estoppel.

10. In support of such contention, learned counsel for the petitioner cites

M/s. Opaque Infrastructure Private Limited Vs. Union of India and

another, reported at MANU/DE/0964/2015, Poorvanchal Caterers &

Anr. Vs. Indian Railway Catering and Tourism Corporation Limited &

Ors., reported at 2009 SCC OnLine (Delhi) 1012 and the judgment of

the Supreme Court rendered in Tafcon Projects (I) (P) Ltd. Vs. Union of

India and others, reported at (2004) 13 SCC 788. Learned counsel

submits that, as per the proposition laid down in the said judgments,

a bidder having participated in a tender process cannot challenge the

tender terms on the ground of vagueness subsequently.

11. The challenge to the tender terms and conditions was necessarily

required to be made prior to participation. For the proposition that

the petitioner would have been precluded from challenging the clauses

of the tender after participation, learned counsel for the petitioner also

cites New Bihar Biri Leaves Co. And others Vs. State of Bihar and

others, reported at (1981) 1 SCC 537.

12. Learned counsel for the petitioner next argues that in the instant

case, the tender conditions are vague and uncertain and, as such,

deny the petitioner a level playing field with the other operators who

had participated in the tender process, many of whom had previous

experience of working on earlier identical projects of the Railways and

thus privy to many information regarding the ground realities and

conditions of the optical fibres-in-question. This, the petitioner argues,

violates Articles 14 and 19(1)(g) of the Constitution of India.

13. Clause 11 of the NIT, it is argued, reserves right unto the respondents

to add or delete any maintenance section, which made the tender

process extremely uncertain. Several particulars were supposed to be

furnished by the bidders along with other bids, which could only be

ascertained on the basis of such maintenance sections. In the

absence of relevant particulars being furnished, the intended bids

would be treated as incomplete. Learned counsel argues that the

right so reserved by Clause 11 of the NIT affects the commercial

viability of the work itself and would tantamount to reserving unto the

respondents the right to change the rules of the game after the game

has commenced, which is impermissible in law. There could not be

any effective participation in the tender process without knowing the

exact contours off the maintenance clause.

14. The NIT further required a contractor to accept the site on 'as is where

is' basis, as per Clause 1.1.1 of Chapter V of the NIT. The said Clause

also mandates that the awardee would be fully responsible for the

end-to-end performance between two nodes in the entire jurisdiction

of the team's reach. However, no provision was given in the NIT

allowing the intending tenderers to survey the routes and/or test the

quality and condition of the existing fibre. Without such survey, it

was not possible to commercially arrive at an amount by way of

estimate for the purpose of bid. Optical Time-Domain Reflectometer

(OTDR) is a fibre optic instrument used to test detailed information

regarding overall condition of the fibre. It is evident from the NIT

conditions that all the other participating bidders were privy to such

OTDR test reports and the exact condition of the fibre, having been

engaged on previous occasions for work in respect of the same

sections.

15. Withholding such information was deliberate, it is argued, to ensure

favouritism and encourage cartelization, which is contrary to Article

14 of the Constitution of India.

16. Learned counsel for the petitioner further argues that it has been

consistently held by various High Courts in exercise of their powers

under Article 226 of the Constitution of India that, in a tender process

pertaining to State resources and/or contract, the endeavour is to

fetch the best possible price, to be secured through maximum

participation of intending bidders.

17. Such opportunity was denied to the petitioner and others who are on

the same footing by dint of the prior special knowledge of most of the

other bidders, which amounts to violation of Articles 14, 19(1)(g) and

21 of the Constitution of India.

18. On the other hand, learned counsel appearing for the respondent-

authorities submits that the tender document was approved by the

Competent Authority and the entire contents of the terms thereof are

uniform throughout all regions of India - East, West, North and

South. The discretion given to the corporate office is extremely limited

in respect of the discretion to vary the terms.

19. In this case, the respondent-authorities, it is argued, had given

sufficient reply to the petitioner's query.

20. Fifteen different sections are covered by the NIT and the technical and

financial criterion are to be met separately for each of the sections of

the total length of fibre for an appropriate evaluation of the bid.

Keeping in view past experience and considering the imperative

aspect, since the work related to a public interest and involved

expenditure of public money, the tender process, it is submitted,

ought not to be interfered with.

21. Learned counsel for the respondent-authorities next contends that

there were total 100 participants, within whom 80 were existing

contractors and 20 new contractors who participated in 15 different

sections.

22. In view of the extreme urgency of the work covered by the NIT, which

plays a pivotal role in the signalling system of railways, since the

respondent-authorities are technology (ICT) infrastructure providers,

the entire work could not be stopped and, therefore, the work orders

were issued even during pendency of the writ petition.

23. In another writ petition, bearing WPO No.71 of 2021, between the

same parties, the petitioner has also challenged the NIT Clauses

pertaining to five different sections

24. Learned counsel for the respondent next argues that the petitioner

does not have the locus standi to file the application under Article 226

of the Constitution of India, since the petitioner did not participate in

the tender process at all.

25. In such context, the respondents place reliance on the following

judgments:-

(i) 2020 SCC OnLine Cal 2213 (Subir Ghosh Vs. State of West Bengal & Ors.);

(ii) (2018) 8 SCC 243 (National Highway Authority of India Vs. Gwalior Jhansi Expressway Limited); and

(iii) A.P.O.T. No.98 of 2021 (Madho Das Mundhra Vs. Railtel Corporation of India & Anr.

26. The respondent-authorities cites the abovementioned judgments to

clinch the issue as regards the absence of locus standi of the

petitioner to prefer the instant challenge, in view of having not

participated in the tender process intentionally. It is reiterated by

learned counsel that the interest of the public at large cannot be put

at stake at the whims of the petitioner, since the work relates to the

controlling of the signalling system of the Railways.

27. That apart, it is argued that the tender terms are in the realm of

contract and cannot be altered and/or amended, since the same has

been drafted upon considering every aspect regarding the interest and

safety of the public at large and are uniform in respect of all zones of

India.

28. As such, it is contended that the writ petition ought to be dismissed.

29. As regards maintainability of the writ petition and the petitioner's

locus standi to file the writ petition, despite having abstained from

participating in the tender process, the Division Bench judgment of

this Court in Subir Ghosh (supra) lays down the ratio that it is

possible that a prospective bidder finds the terms of the tender

documents to be unfair or illegal and challenges the same; but such

challenge has to be before the time to put in the bids is closed. In the

present case, the petitioner did precisely that and, as such, the said

ratio cannot be held to go against the petitioner. Albeit, it was further

observed by the Division Bench that if a bid is made and thrown out

on an illegal or unfair ground contained in the tender document, even

then a challenge can be fashioned, but a person who has not

participated in the bidding process at all cannot challenge the tender

conditions on any ground whatsoever, such subsequent observation

was qualified by the preceding phrase in paragraph no.5 of the said

judgment which says that a challenge against unfair or illegal terms of

the tender document is maintainable before the closure of the

submission of the bids.

30. As far as National Highways Authority of India (supra) is concerned,

although in the context of the case the challenge against the tender

was refused on the ground on non-participation of the tenderer, the

Supreme Court clearly held in paragraph no.18 of the said judgment

that the tenor of the terms of the documents made it obligatory for the

respondent to so participate to be considered as a responsive bidder

along with others. Such perspective is further reflected in Clause 30.5

of the tender document in the said case, where it was provided that,

notwithstanding anything to the contrary, for the purposes of

eligibility and qualification of the BOT-Annuity Concessionaire, if it

has participated in the bidding process it shall be deemed to fulfil all

the requirements of Clauses 3 and 6 of the RFP, being the existing

concessionaire of the Four-Lane Project. Similar provisions found

place in several other clauses of the tender as well, including Clauses

3.2(f), 26.9 and 27.6 of the said tender document, as quoted in

paragraph no.8 of the cited report.

31. As such, the proposition laid down in the said case was in the limited

factual context which arose therein, which are clearly distinguishable

from the present case insofar as there is no participation clause in the

NIT of the present case.

32. As far as Madho Das Mundhra (supra) is concerned, with utmost

respect, the said judgment does not lay down any proposition of law

but merely records the facts and circumstances of the case, in which

context the judgment was passed. Hence, the said Division Bench

judgment does not help the objection raised by the respondents on the

locus standi of the petitioner.

33. On the other hand, in M/s. Opaque Infrastructure Private Limited

(supra), which is cited by the petitioner, the contrary proposition was

upheld and it was found that the bidder would be barred by the

principle of estoppel from challenging the tender process if it had

participated in the process and thereafter sought to challenge the

same. It was categorically laid down that the law precludes a person

from challenging the tender terms after having participated in the

same. The same proposition of law was followed in Poorvanchal

Caterers (supra) by the Delhi High Court and in Tafcon Projects (I) (P)

Ltd. (supra) by the Supreme Court. As such, the issue of

maintainability is held in favour of the petitioner and against the

respondents, as the present writ petition is held maintainable at the

instance of the petitioner.

34. The cardinal premise of challenge of the petitioner in the writ petition

is that the tender conditions are vague and uncertain and deny the

petitioner a level playing field.

35. In that context, several issues have been raised by the petitioner

which pertain to various facets of the tender document.

36. To address such issues, a perusal of the NIT itself and its annexures

is essential.

37. It is seen from the entire tender document that the work was divided

into several specific units, for each of which separate tenders with

separate criteria were to be filed by the prospective bidders.

38. The different maintenance sections are clearly indicated in a chart

given in Annexure-A of Section 1, Chapter 1 of the tender document,

which is exhaustive in nature.

39. Immediately after the chart, a pre-bid meeting was mentioned as

scheduled to be held on September 4, 2020 at 12.00 hours. Even the

venue of the meeting was clearly indicated.

40. Thus, there was ample scope for the petitioner to approach the tender-

issuing authorities for necessary clarifications and raise their

objections by participating in the said meeting. However, for

unexplained reasons, the petitioner did not avail of such opportunity.

41. The respective scope of work in the various sections is also reflected,

even to a layman, from a complete reading of the tender terms. For

example, another chart is given in Annexure C in Chapter 7 of the NIT

indicating in detail the jurisdiction of the OFC maintenance sections.

The length and bi-monthly cumulative repair time allowed were clearly

indicated against each of the fifteen sections.

42. That apart, the right reserved by the Railtel, to add or delete any

maintenance section, was clearly coupled with the rider that payment

would be made as covered in the preamble. It is specifically stated in

the NIT (Section 1, Chapter 1, Annexure-A) that evaluation shall be

done section-wise. If interpreted literally, in the absence of any

ambiguity, the terms of the tender document were clear enough to

indicate that the reserved right of the Railtel did not pertain to

addition or deletion to any section, on any yardstick whatsoever, but

the addition or deletion of entire maintenance sections to the work of

a particular contractor.

43. Hence, the allegation of the petitioner, that the rules of the game were

kept open to be changed after the game has started, has no basis

whatsoever. Not only were the specific areas of the respective

maintenance sections and other specifications clearly mentioned in

the NIT, Chapter 8, Annexure-D thereof clearly mentioned in detail the

minimum manpower and machine/equipment required to be engaged

under one maintenance team. Each detail of such requirement was

specifically laid down under the said head.

44. That apart, Clause 16 of the General Conditions mentioned in the

tender document clearly provided that, before quoting, the tenderers

were advised to ascertain the nature of work involved and invariably

undertake a site inspection. Thus, the allegation that the prospective

bidders were denied the right to examine the existing optical fibres

before submitting their bid does not hold water.

45. It was further mentioned in Clause 3.2 of Chapter 5 of the NIT that,

before quoting, it was advisable that the prospective tenderers should

make themselves fully conversant with the locations, OFC routes and

types of jobs in details to be carried out therein as per the tender

requirement, so that they can clearly understand the scope of work

and assess the requirement of resources to complete the work in a

scheduled time.

46. The nature of the work to be done was clearly elaborated in several

clauses of the tender document.

47. It was merely for the petitioner to approach the tendering authority for

the purpose of getting a clear picture of the existing condition and the

dimensions of the existing optical fibre cables, as provided galore in

the several terms and conditions of the NIT itself. Hence, the

petitioner's objection, that there was no such scope to pre-assess the

conditions and parameter of the existing cables and routes, is belied

by the provisions of the NIT itself.

48. As regards the further allegations of the petitioner that, as per the

NIT, the list of personnel for maintenance was to be submitted with

the bid, financial and technical criterion to be met separately for each

section and that the number of personnel was to be given, which was

allegedly not possible within the scope of the NIT, it is evident from

the NIT terms that amply opportunity was given to the prospective

bidders to assess the scope and ambit of the work to be done. The

petitioner, of his own choice, failed to avail such option.

49. Hence, although it was stipulated in the NIT that the contractor has to

do the work on 'as is where is' basis, in view of the right of prior

inspection given in the tender document itself, as discussed above,

there was no hindrance to the petitioner taking adequate inspection to

ascertain the existing scenario in terms of the NIT itself and thereafter

to submit their bid.

50. Hence, in the present case, the allegations of vagueness and

favouritism, levelled by the petitioner, are falsified by the terms and

conditions of the tender document itself. To any bona fide bidder,

there could not have been any difficulty in having an inspection and to

ascertain, prior to the bid, the exact nature of the work to be done and

the extent thereof.

51. That apart, since specific date, time and venue were fixed for the pre-

bid meeting, it was always open to the petitioner to participate in the

said meeting for the purpose of further elucidation of doubts, if any.

Instead of doing so, the petitioner preferred to take out the writ

petition prior to the last date of submission of dues, which would

unnecessarily stall the work envisaged by the tender.

52. Since the work contemplated in the tender is of a public nature and

concerns the safety and security of the public at large and public

utility in general, there is no justification in setting aside the entire

tender process merely because of the perceived inconvenience of the

petitioner.

53. There cannot arise any question of favouritism or arbitrariness on the

part of the tendering authority in view of the clear contours of the

contemplated work being provided in the tender document itself.

54. It is well-settled that a tender process is set aside by courts only in

exceptional circumstances and certainly not because the terms of the

tender do not suit an individual prospective bidder. In the present

case, several bidders participated and many got selected on the same