Calcutta High Court (Appellete Side)
And Another vs Union Of India And Others on 7 July, 2023
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
WPA No. 15369 of 2023
Texmaco Rail and Engineering Limited
and another
Vs.
Union of India and others
With
WPA No. 15370 of 2023
Texmaco Rail and Engineering Limited
and another
Vs.
Union of India and others
For the petitioners : Mr. Jishnu Saha,
Mr. Rajarshi Dutta,
Mr. Soorjya Ganguli,
Mr. Somdutta Bhattacharyya,
Mr. Shaunak Mukhopadhyay,
Ms. Devanshi Prasad
For the
respondent nos.1, 2 & 4 : Mr. Atarup Banerjee,
Ms. Sarada Sha
For the respondent no.3 : Ms. Rajshree Kajaria,
Mr. Sarvapriya Mukherjee,
Mr. Uttam Sharma
Hearing concluded on : 30.05.2023
Judgment on : 07.07.2023
Sabyasachi Bhattacharyya, J:-
1. The petitioners have filed the present writ petitions in respect of a
tender floated by the respondent no.2 in respect of design, supply,
installation, testing and commissioning of Automatic Block Signalling
System in a particular section of the Chakradharpur Division of the
South-Eastern Railway. The petitioner no.1, with which one Kalindee
Rail Nirman (Engineers) Limited has been amalgamated, participated
as Kalindee in the said tender. However, the Techno Commercial Bid
of the petitioner was rejected on the ground of technical and financial
ineligibility, bid capacity and improper information. Immediately
thereafter, the financial bids were opened and only the bids of two of
the private respondents were accepted.
2. As per the tender agreement, unless there were at least three
successful participants at this techno commercial stage, there would
not be any reverse auction. It is argued on behalf of the petitioners
that, in order to avoid reverse auction and restrict the tender only to
chosen competitors,it was tailor-made to suit the purpose of the said
competitors. It is argued that the technical rejection was arbitrary
and mala fide.
3. It is argued that in terms of the Tender Document, one of the
technical eligibility criteria was, inter alia, that the tenderer must have
substantially completed any of the three categories of works stipulated
therein. Under sub-clause (1)(iii) of Clause 2 of the Eligibility Criteria,
such work included one similar work costing not less than the amount
equal to 60 per cent of the advertised value of tender. The advertised
value of the tender was Rs.106,70,01,466.30p.
4. Learned senior counsel for the petitioner argues that the petitioner
duly produced previous work experience in a similar work undertaken
by Kalindee in respect of a job awarded by the RVNL (Rail Vikas Nigam
Limited) on behalf of the North Central Railways in the State of Uttar
Pradesh, India. Kalindee was one of the members of a joint venture,
by the name of M/s. GMR-Kalindee-TPL (JV). The other member was
one M/s. GMR Infrastructure Limited.
5. By placing reliance on the relevant Annexures to the writ petitions, it
is submitted that a Final Works Certificate was issued by the RVNL to
the Joint Venture, where it was clearly indicated that the value of
Signalling and Telecommunication (S&T) Works executed, and
payment made till that date, was Rs.102.084cr. By a subsequent
Corrigendum dated March 10, 2022, it was modified to the extent that
the value of the S&T Works executed, and payment made till that
date, was Rs.68.460cr., which is above the minimum stipulation of 60
per cent of the present advertised value.
6. By placing reliance on the relevant Corrigendum dated March 10,
2022, learned senior counsel for the petitioner argues that in a note
given in Item No.10 thereof, it was clarified that as per the joint
venture agreement, the entire Indoor S&T in the concerned section
and Outdoor Signalling for a different section were within the scope of
work of M/s. Kalindee and the Indoor and Outdoor Works physically
completed and commissioned by GMR-Kalindee-TPL (JV) were
enumerated therein. It is argued that since the entire Indoor S&T
work was done by Kalindee, for which the value of the works executed
was more than 60 per cent of the advertised value of the present
disputed tender, the petitioner could not be said to be ineligible to
participate in the present contract, on a technical score.
7. It is argued that in the present case, the tender was floated on
February 16, 2023 and the petitioner submitted its bid on March 24,
2023. On June 16, 2023, there was a request to the bidders to extend
the bid validity till July 31, 2023.
8. It is contended that on June 22, 2023, the person in charge of
conducting the tender process was transferred to some other office.
Immediately thereafter, the technical bid of the petitioner was rejected
on June 24, 2023. It is submitted that a nexus between the two
events, on some extraneous count, cannot be ruled out.
9. It is submitted that elimination of the petitioner and another
participant was merely to avoid the reverse auction and to award the
contract to the successful participant among the two remaining
participants.
10. It is argued by the petitioner that there is a Clarification Clause in the
tender document, being Clause 7E, which clearly stipulates that, to
assist in the examination, evaluation and comparison and pre-
qualification of the tender, the Railway may, at its discretion, ask any
bidder for clarification of its bid. Such clarification had to be in
writing.
11. In the present case, however, the said provision was not invoked at all
by the respondent-Authorities, despite a similar clarification having
been sought in the tender floated by the RVNL, which has been cited
by the petitioner as its past experience.
12. It is, thus, submitted that the sudden rejection, after three months
from the submission of the bid of the petitioner, was patently arbitrary
and tainted by mala fides.
13. Learned counsel appearing for the respondent/successful tenderer
controverts such contentions and submits that the relevant Notice
Inviting Tender (NIT) Clause, pertaining to the eligibility conditions,
contemplated 60 per cent of the advertised value to be satisfied
individually by the petitioner. However, the document relied on by the
petitioner to show past experience clearly indicates that the petitioner
was only a minor shareholder of 29 per cent in the profits of a joint
venture, which had done the work. Hence, it is not established by the
said document that the petitioner, individually, had undertaken the
said work to the extent of 60 per cent of the present advertised value.
14. Since there was no scope of doubt, it is argued, there was no question
of any clarification being sought by the Railway-Authorities.
Moreover, the Railway-Authorities cannot be compelled to seek such
clarification, since it is the discretion of the said Authority as per the
tender document.
15. It is argued by the private respondents that other Railways' action in
seeking clarification in different tenders with different terms from the
present one are not a comparable yardstick for the adjudication of the
present case. Since the conditions of the said 'other tenders' were
different and the contexts were different, the actions of the
respondent-Authorities in the present tender cannot be equated with
those.
16. Hence, it is argued that the writ court may not interfere with the
lawful exercise of discretion by the Tender Issuing Authority. It is
submitted that the well-settled legal proposition is that the discretion
vests exclusively with the Tender Issuing Authority to decide as to the
nature of eligibility criteria and the participants sought by the said
Authority for a particular work. Such terms cannot be dictated by the
participants, that too after participating in the tender process.
17. Upon hearing learned counsel for the parties, the argument of the
petitioner regarding the clarification clause not being resorted to by
the respondent-Authorities has to be ruled out, since the same, ex
facie, is a discretionary provision. The provision of seeking a
clarification to assist in the examination, evaluation and comparison
and pre-qualification of the tender leaves the discretion entirely with
the Railway authority and it is not a mandate on the said authority as
such.
18. However, insofar as the rejection of the technical bid of the petitioners
is concerned, the same is an arguable question, to be decided on the
basis of the materials-on-record. In the present case, since no facts
have been argued which require adjudication upon taking detailed
evidence, the writ court is competent enough to decide whether there
was any patent arbitrariness in such rejection. The relevant
document in this context is the document produced by the petitioners
with regard to their previous work experience. The Corrigendum
dated March 10, 2022 is the document which is to be looked into in
this regard, as per both sides.
19. A salient feature of the same is Serial No. 10 thereof, which contains a
'Note' indicating that, as per the Joint Venture Agreement, the entire
Indoor S&T regarding the section involved therein was in the scope of
M/s. Kalindee. Serial No.6 of the Corrigendum shows that the value
of S&T Works (which is similar to the work envisaged in the present
contract-in-dispute) executed and payment made was to the tune of
Rs.68.460cr.,which was clearly above 60 per cent of the advertised
value of the present tender.
20. A cloud has been sought to be cast by the private respondents to the
effect that, as per the Joint Venture Agreement between the petitioner
and the other members of the said Joint Venture, the petitioner's
share was only to the tune of 29 per cent.
21. However, what is relevant is not the share of profits of the petitioner in
the said Joint Venture but whether the work done by the petitioner as
a member of the said Joint Venture measures up to the eligibility
criteria of the present contract. As per the eligibility condition in
Clause 2, sub-clause (1)(iii) of the present contract, the bidder had to
do one similar work costing not less than the amount equal to 60 per
cent of advertised value of the tender.
22. There is no doubt that the present work is similar in nature to the
work done by the Joint Venture for RVNL. The petitioner was one of
the members of the joint venture. The scope of the present work is
design, supply, installation, testing and commissioning of Automatic
Block Signalling System, which is exactly similar to the S&T
(Signalling and Telecommunication) Work done for the RVNL.
23. The relevant consideration is reflected in Serial No.6 of the Final Work
Certificate issued by the RVNL in that regard, which clearly shows
that the value of the S&T Works executed and the payments therefor,
made till that date, was Rs.68.460cr. Read in conjunction with Serial
No.10 thereof, it is ex facie clear that the entire Indoor S&T Work for
the whole section was done exclusively by M/s. Kalindee Rail Nirman,
which has amalgamated with the petitioner no.1. Hence, there can be
no manner of doubt regarding the petitioner individually, albeit as one
of the members of a joint venture, having completed the previous work
of a value more than 60 per cent of the total advertised value for the
present contract. The work was also of a similar nature. Hence, there
cannot be any shade of doubt regarding the petitioner having complied
with the eligibility condition. The rejection, it is relevant to mention,
was on the ground that the technical and financial eligibility criteria
and bid capacity were not met and the information furnished by the
petitioner was improper.
24. There was no basis for such rejection, as apparent ex facie from the
materials furnished by the petitioner. The same was arbitrary and de
hors the tender terms.
25. More importantly, the impugned rejection would imply that the
reverse auction contemplated under the tender would be avoided
altogether, which bodes ill for the tender process, by curtailing wider
participation, fair competition and transparency.
26. In order to ensure that the best competitor is chosen, the process of
selection adopted by a public undertaking is required to be
transparent. As such, the impugned rejection cannot be sustained.
27. Insofar as the Clarification Clause not being invoked by the
respondent no.2 is concerned, it was the option of the Railway
Authorities either to invoke or not to invoke the same. Exercising
such discretion, the Railway Authorities did not invoke the said
provision and, as such, there is no further scope of invoking the same
at this juncture. In any event, in view of the above findings, the said
issue becomes otiose.
28. The impugned rejections, being arbitrary and mala fide, ought to be
set aside.
29. Accordingly, WPA No.15369 of 2023 and WPA No.15370 of 2023 are
allowed, thereby setting aside the impugned rejections of the
petitioner's technical bids.
30. The respondent no.2 shall conduct the tender processes afresh from
the stage of holding reverse auction, treating the petitioner to have
succeeded at the techno-commercial stage by acceptance of its bids.
In view of the quashing of the rejection order by the present order, the
respondent no.2 shall now hold reverse auction and proceed to select
the successful bidder accordingly. For such purpose, a fresh schedule
of dates shall be published by the respondent no.2, starting from the
stage of reverse auction as per the tender terms. In view of the public
nature of the project, it is expected that the respondent-Authorities
shall take immediate steps to comply with this order.
31. There will be no order as to costs.
32. Urgent certified server copies, if applied for, be issued to the parties
upon compliance of due formalities.
( Sabyasachi Bhattacharyya, J. )
