Calcutta High Court (Appellete Side)
Mrt Signals Limited vs Texmaco Rail And Engineering Limited ... on 13 December, 2023
Author: T. S. Sivagnanam
Bench: T. S. Sivagnanam
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Before:
The Hon'ble The Chief Justice T. S. Sivagnanam
and
The Hon'ble Justice Hiranmay Bhattacharyya
MAT/1392/2023
IA NO: CAN/1/2023, CAN/2/2023
MRT SIGNALS LIMITED
VS
TEXMACO RAIL AND ENGINEERING LIMITED AND ORS.
with
MAT/1393/2023
IA NO: CAN/1/2023, CAN/2/2023
MRT SIGNALS LIMITED
VS
TEXMACO RAIL AND ENGINEERING LTD. AND ORS.
with
MAT/1444/2023
IA NO: CAN/1/2023, CAN/2/2023
UNION OF INDIA AND ANR.
VS
TEXMACO RAIL AND ENGINEERING LTD AND ORS.
With
MAT/1455/2023
IA NO: CAN/1/2023, CAN/2/2023
SOUTH EASTERN RAILWAY
VS
TEXMACO RAIL AND ENGINEERING LTD AND ORS.
For the Appellant in
MAT 1392 of 2023 and
MAT 1393 of 2023 and
for the Respondent in
MAT 1444 of 2023 and
MAT 1455 of 2023. : Mr. Jayanta Mitra,
Mr. Abhrajit Mitra,
Ms. Rajshree Kajaria,
Mr. Sarvapriyo Mukherjee,
Mr. Uttam Sharma ....advocates
For the Appellants in
MAT 1444 of 2023 and
MAT 1455 of 2023
and for the Railways in
MAT 1392 of 2023 and
MAT 1393 of 2023 : Mr. Atarup Banerjee,
Ms. Sarda Sha ...advocates
For the Respondent
Nos.1 and 2 : Mr. Sabyasachi Chowdhury,
Mr. Rajarshi Dutta,
Mr. Shounak Mukhopadhyay,
Mr. Soorjya Ganguli,
Mr. Somdutta Bhattacharyya,
Ms. Devanshi Prasad,
Ms. Arti Bhattacharyya ...advocates
Reserved on : 05.10.2023
Judgment on : 13.12.2023
Hiranmay Bhattacharyya, J.:-
1. The judgment and order dated 07.07.2023, passed by a learned Single
Judge in WPA No. 15369 of 2023 heard analogously with WPA No.
15370 of 2023 is under challenge in these intra court mandamus
appeals, one at the instance of the Union of India and the South
Eastern Railway being the tender inviting authority and the other at
the instance of an entity which emerged as L1 bidder.
2. The orders of rejection of the Techno Commercial Bid of the writ
petitioner/ respondent no. 1 herein were challenged in the writ
petitions. By the impugned judgment and order, the orders of
rejection of the technical bids of the respondent no. 1 herein were set
aside and a direction was passed upon the tender inviting authority to
conduct the tender process afresh from the stage of holding reverse
auction by accepting the bids of the writ petitioner/respondent no. 1.
3. Facts giving rise to the writ petitions as well as these appeals may be
summarised hereinunder as follows-
Kalindee Rail Nirman (Engineers) Limited (for short "Kalindee") had
been amalgamated with Texmaco Rail and Engineer Limited (for short
"Texmaco") i.e., the writ petitioner/respondent no. 1 herein pursuant
to a scheme of amalgamation sanctioned by the Hon'ble High Court of
Delhi. South Eastern Railway floated a tender for design supply,
installation, testing and commissioning of automatic block signal
system between Rajkharswan to Rourkela Section of Chakradharpur
Division of South Eastern Railway. The advertised value of the said
tender was Rs. 106, 70,01, 466.33.
4. As per the tender document, the tenderer can be said to have satisfied
the technical eligibility criteria having successfully completed or
substantially completed one similar work costing not less than the
amount equal to 60% of the advertised value of the tender. Clause
7(E) of the tender document provides for clarification of bids in order
to assist the railway authority in examination, evaluation &
comparison and prequalification of the tender. The said tender
document provides for holding reverse auction in case the number of
successful participants at the techno commercial stage is at least
three. Respondent no. 1 herein submitted its bid on 04.03.2023. On
24.06.2023, the respondent no. 1 was informed by the tender inviting
authority through electronic mail that its techno commercial bid had
been found technically unsuitable and the same was rejected.
5. It is the case of the writ petitioner/ respondent no. 1 herein that its
predecessor-in-interest namely Kalindee completed a similar work as
one of the members of the joint venture by the name and style of
"M/s. GMR-Kalindee-TPL" in respect of a job awarded by Rail Vikas
Nigam Limited (for short "RVNL"). The final work certificate dated
24.02.2022 issued by RVNL to the said joint venture and the
subsequent corrigendum dated 10.03.2022 were produced by the
respondent no. 1 as its credential.
6. It is the specific contention of the respondent no. 1 that the (S&T)
work which was executed by Kalindee is a similar work as per the
tender document and the value of such work was much above the
minimum stipulation of 60% of the advertised value of the present
tender and therefore, the respondent no. 1 duly satisfied the technical
eligibility criteria.
7. The learned Judge after considering the final work certificate issued
by RVNL arrived at a finding that Kalindee, as one of the members of a
joint venture, having completed a work of similar nature of a value
more than 60% of the total advertised value for the present contract
have complied with the eligibility condition and, therefore, the
rejection of the bid of the writ petitioner was improper.
8. Mr. Banerjee, learned Advocate appearing for the appellants in MAT
1444 of 2023 contended that the value of a completed work done by a
member in an earlier joint venture shall be reckoned only to the extent
of the concerned member's share in that joint venture in view of note
(b) of Para 17.15.1 of the General Conditions of Contract (GCC)-2022.
By drawing the attention of the Court to the joint venture agreement
between M/s. GMR infrastructure Ltd. (for short "GMR"), M/s.
Kalindee Rail Nirman (Engineers) Ltd. (for short "Kalindee") and M/s.
Tata Project Ltd. (for short "TPL"), Mr. Banerjee contended that the
share of Kalindee in the said joint venture was only 29% and
therefore, the value of a similar work which is alleged to have been
completed by Kalindee in the work allotted by RVNL has to be
reckoned only to the extent of share of Kalindee in the said joint
venture (i.e., 29%). He further submitted that the tender inviting
authority while evaluating the bid of the writ petitioner found that the
writ petitioner did not satisfy the eligibility criteria and accordingly
rejected its bid. He submitted that it is now well settled that in tender
matters technical evaluation or comparison by the court is
impermissible. In support of such contention he placed reliance upon
the decision of the Hon'ble Supreme Court in the case of Montecarlo
Ltd. vs. National Thermal Power Corporation Limited reported at
(2016) 15 SCC 272 and Silppi Constructions Contractors vs.
Union of India and Anr. reported at (2020) 16 SCC 489.
9. Mr. Mitra learned Senior Counsel appearing for the appellants in MAT
1392 of 2023 contended that the original contract value as indicated
in the final work certificate issued by RVNL is Rs. 145,33,45,266 and
since Kalindee only had 29% share in the joint venture, the value of
the completed work done by a member in joint venture shall be
determined to the extent of such member's share in the earlier joint
venture.
10. Mr. Mitra contended that the author of the tender document is the
best person to understand and appreciate its requirement and
interpret its documents and the constitutional courts should refrain
from interfering with the decision of the administrative authority on
such aspect. In support of such contention, Mr. Mitra, placed reliance
upon the decisions of the Hon'ble Supreme Court in the case of
Afcons Infrustructure Limited vs. Nagpur Metro Rail Corporation
Limited and Anr. reported at (2016) 16 SCC 818 and Agmatel
India Private Limited vs. Resoursys Telecom and ors. reported at
(2022) 5 SCC 362. Mr. Mitra submitted that a heavy burden is cast
upon the person alleging mala fide to prove such allegation. He further
submitted that specific pleadings in this regard are absent in the writ
petition. He placed reliance upon the decision of the Hon'ble Supreme
Court in the case of Rishi Kiran Logistics Private Limited vs.
Board Trustees of Kandla Port Trust and Ors. reported at (2015)
13 SCC 233 and Ratnagiri Gas and Power Private Limited vs.
RDS Projects Limited and ors. reported at (2013) 1 SCC 524 in
support of his contention that it is obligatory upon the person making
allegation as to mala fide to furnish particulars that would prove mala
fides on the part of the decision maker.
11. Mr. Chowdhury, learned Senior Counsel representing the writ
petitioner/ respondent no. 1 would contend that since the signaling
and Telecommunication (S&T) works were only within the scope of
Kalindee and not any other member of the Joint Venture and also that
the value of such works exceeds 60% of advertised value of the subject
tender, the Tender Inviting Authority acted illegally and mala fide by
rejecting the Techno Commercial Bid on technical and financial
eligibility criteria, bid capacity and improper information.
12. Heard the learned advocates for the parties and perused the materials
placed.
13. Writ petitioner/ respondent no. 1 submitted the certificate issued by
Rail Vikas Nigam Limited (RVNL) as credential certificate in respect of
the subject tender. It is not in dispute that the work in respect of
which RVNL issued the Final Works Certificate dated 10.03.2022 was
allotted in favour of "M/s. GMR-Kalindee-TPL" which is a Joint
Venture Company. It is also not in dispute that the lead partner of the
said Joint Venture was M/s. GMR Infrastructure Limited. It is evident
from Clause 4 of the Memorandum of Understanding (MOU) entered
into between M/s. GMR Infrastructure Limited, M/s. Kalindee Rail
Nirman (Engineer) Limited and M/s. Tata Projects Ltd. that the parties
have resolved that the distribution of share between GMR, Kalindee
and TPL is 51%, 29% and 20% respectively.
14. The Final Works Certificate dated 10.03.2022 recorded that as per the
joint venture agreement, the entire indoor S&T and the outdoor
signaling works are within the scope of M/s. Kalindee Rail Nirman
(Engineers) Ltd. and indoor and outdoor works physically completed
and commissioned by the Joint Venture.
15. The short point that falls for consideration in these appeals is what
should be the basis for determining the cost of work done by a
member of a Joint Venture for such member to have satisfied the
Technical Eligibility Criteria of the subject tender. Whether it is the
cost of the work that falls within the scope of a member of the Joint
Venture or the share of such member in the earlier Joint Venture.
16. The learned Single Judge held that the value of the work completed by
M/s. Kalindee shall be the determinant factor for evaluating the
Technical Eligibility criteria. These intra court appeals have been filed
for testing the propriety or correctness of such decision.
17. Note (b) of Clause 17.15.1 of the Standard General conditions of
Contract (for short "GCC") throws some light for deciding as to how
the cost of work done by an entity as a member of the earlier Joint
Venture shall be reckoned and the same may be relevant for deciding
the aforesaid issue for which the same is extracted hereinbelow.
"Note (b)
Value of a completed work done by a Member in an earlier JV shall be
reckoned only to the extent of the concerned member's share in that
JV for the purpose of satisfying his/her compliance to the above
mentioned technical eligibility criteria in the tender under
consideration."
18. Mr. Chowdhury would contend that clause 17 of the GCC is applicable
only when the bidder is itself a Joint Venture and not otherwise and,
therefore, according to him, Note (b) to clause 17.15.1 could not have
been applied to the case on hand.
19. Clause 17.15 of the tender document deals with credentials and
qualifying criteria. Clause 17.15.1 speaks about technical eligibility
criteria. Clause 17.15.1 contains two notes (a) and (b). Note (b) states
as to how the value of a completed work done by a member in an
earlier joint venture shall be reckoned for the purpose of satisfying
his/her compliance to the technical eligibility criteria in the tender
under consideration. The said note starts with the expression "Value
of a completed work done by a Member in an earlier JV". Such
expression undoubtedly refers to the credential of a Member who
completed work as a member of an earlier Joint Venture as the
expression "Joint Venture" is qualified by the word "earlier". From a
bare reading of the said Note it is evident that for the purpose of
satisfying the technical eligibility criteria in the tender under
consideration, the value of a completed work done by a Member in an
earlier Joint Venture shall be reckoned only to the extent of concerned
member's share in that Joint Venture i.e., the earlier Joint Venture.
The expression "his/her compliance" refers to the credential of such
member in order to satisfy the technical eligibility criteria of the
subject tender. After reading Clause 17.15.1 together with the note
appended thereto, this Court is of the considered view that in the
event a work done by a member in an earlier joint venture is relied
upon by such member as a credential, then for the purpose of
satisfying compliance of the technical eligibility criteria in the subject
tender by such member, the value of the completed work done by
such member in the said earlier joint venture shall have to be
computed in the manner laid down in note (b) to Clause 17.15.1 of the
tender document.
20. Therefore, for the purpose of evaluating the technical eligibility of a
bidder who relies upon a work completed by such bidder as a member
in an earlier Joint Venture as a credential in the subject tender, what
is relevant is only the value of a completed work done by such bidder
restricted to the extent of such bidder's share in the earlier Joint
Venture. It follows, therefrom that the entire cost of work completed/
done by a bidder as a member of an earlier JV cannot be taken into
consideration for evaluating the technical eligibility.
21. This Court, therefore, holds that the value of the completed work done
by Kalindee as a Member of "M/s. GMR Kalindee-TPL", a Joint
Venture to the extent of the share of Kalindee in the Joint Venture
shall be reckoned for the purpose of evaluating the technical eligibility
of Kalindee in the subject tender. The said issue is accordingly
answered in favour of the appellants and against the writ
petitioner/respondent.
22. It is not in dispute that the extent of share of Kalindee in the Joint
Venture of M/s GMR-Kalindee-TPL is 29%. It is also not the case of
the writ petitioner that the value of the completed work done by
Kalindee as a member of the said Joint Venture to the extent of its
share in that JV i.e., 29% is not less than the amount equal to 60% of
the advertised value of the subject tender. This Court, therefore, holds
that the writ petitioner/respondent failed to satisfy the eligibility
criteria. To the mind of this Court, the order of rejection of the bid of
the writ petitioner/ respondent herein cannot be said to be arbitrary,
mala fide and dehors the terms of the tender.
23. That apart, the Hon'ble Supreme Court in the case of Agmatel India
Private Limited (supra) after taking into consideration various
decisions including Afcons (supra), Silppi Constructions (supra) and
Montecarlo (supra) held that the author of the tender document is
the best person to understand and appreciate its requirement and if
its interpretation is manifestly in consonance with the language of the
tender document or subserves the purpose for which the tender is
floated, the Court should follow the principle of restraint. It was
further observed that even if the interpretation given to the tender
document by the person inviting offers is not acceptable to the
constitutional court, that by itself would not be a reason for
interfering with the interpretation given.
24. By applying the aforesaid well settled proposition of law, this Court is
not inclined to accept the argument of Mr. Chowdhury that the
interpretation of the tender inviting authority is not in consonance
with the language of the tender document. The learned Single Judge,
in the case on hand, ought to have followed the principle of judicial
restraint.
25. By referring to the clarification clause being Clause 7E in the tender
document, Mr. Chowdhury would contend that the tender inviting
authority failed and neglected to invoke the said clause. After going
through Clause 7E, this Court is of the considered view that the
tender inviting authority has been vested with the discretion to resort
to the clarification clause and the tenderer does not have any right to
compel the tender inviting authority to invoke the said clause. The
learned Single Judge was right in rejecting the argument of the writ
petitioners/ respondents in this regard.
26. As rightly argued by Mr. Mitra, that apart from bald averments there
are no specific pleadings as to how the decision of the tender inviting
authority can be said to be actuated with mala fides. The Hon'ble
Supreme Court in Rishi Kiran Logistics (supra) and Ratnagiri Gas
(supra) held that it is obligatory for the persons alleging malice in fact
to furnish particulars that would provide mala fides on the part of the
decision maker and vague and general allegations unsupported by the
requisite particulars do not provided a sound basis for the court to
conduct an enquiry into their veracity. Merely because of the fact that
bids were opened on a Saturday, that by itself cannot be a ground to
hold that the decision of the tender inviting authority was actuated
with mala fides.
27. For the reasons as aforesaid this Court holds that the tender inviting
authority was justified in rejecting the technical bids of the
respondent no. 1 herein. In view thereof, the direction passed by the
learned Single Judge upon the tender inviting authority to conduct
the tender processes afresh from the stage of holding reverse auction
by treating the writ petitioner to have succeeded at the techno
commercial stage by acceptance of its bids calls for interference. The
appeals accordingly stand allowed. The impugned judgment and order
dated 07.07.2023 stands set aside. Consequently, the orders of
rejection of the bids of the respondent no. 1 stand restored. All
connected applications stand disposed of accordingly. The tender
inviting authority is left free to proceed in accordance with law. There
shall be, however, no order as to costs.
28. Urgent Photostat certified copies, if applied for, be supplied to the
parties upon compliance of all formalities.
I agree.
(T.S. Sivagnanam, CJ.) (Hiranmay Bhattacharyya, J.)
(P.A.-Sanchita)
