Rishikesh Chem & Anr vs The State Of West Bengal & Ors
2023 Latest Caselaw 3060 Cal

           IN THE HIGH COURT AT CALCUTTA
                Constitutional Writ Jurisdiction
                            (Appellate Side)


                            MAT 722 of 2023
                                 With
                            IA CAN 1 of 2023

                         Rishikesh Chem & Anr.
                                -Versus-
                     The State of West Bengal & Ors.



Before:          The Hon'ble Justice Arijit Banerjee
                               &
                 The Hon'ble Justice Apurba Sinha Ray



For the Appellants          : Mr. Biswaroop Bhattacharya, Adv.
                              Mr. Pratik Majumdar, Adv.

For the KMC                 : Mr. Biswajit Mukherjee, Adv.
                              Mr. Gopal Chandra Das, Adv.


For the respondent no.9       Ms. Noelle Banerjee, Adv.,
                              Mr. Ritoban Sarkar, Adv.
                              Ms. Sakshi Jha, Adv.
                              Ms. Shreya Ghosh Dastidar, Adv.
                              Mr. Vivek Murarka, Adv.

CAV On                      : 26.04.2023

Judgment On                 : 01.05.2023
                                         2




Arijit Banerjee, J. :-

1. This appeal is directed against a judgment and order dated April 24,

2023, whereby, the writ petition of the appellants being W.P.A. 9529 of 2023

was dismissed.

2. A tender has been floated by Kolkata Municipal Corporation (in short

'KMC') for supply and delivery of liquid chlorine from proven and reputed

manufacturers/their authorized agents. The tender pertains to the financial

year 2023-24. The estimated tender value is Rs. 4,22,50,158/-. The

eligibility criteria for participation in the tender is mentioned as follows:-

          "4. Eligibility criteria for participation in the tender

          All intending tenderers should qualify eligibility criteria for the

          purpose of TENDER FOR LIQUID CHLORINE. If any of the

          participating tenderer fails to qualify in any of the terms &

          conditions mentioned below, the particular tender will be declared

          informal/non-responsive.

               I)   Tenderer   should    produce    valid   PAN   issued   by    IT

               Department, Govt. of India, valid 15-digit Goods and Services

               taxpayer Identification Number (GSTIN) under GST Act, 2017,

               latest Professional Tax returns copy and certificate. Trade

               license will be mandatory for those whose unit is located

               within the jurisdiction of KMC.

               II) a) Intending tenderers should produce credentials of a

               similar nature of completed work of the minimum value of
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    40% (Forty per cent) of the estimated amount put to tender

    during 5(five) years prior to the date of issue of the tender

    notice;

              Or,

    b) Intending tenderers should produce credentials of 2(two)

    similar nature of completed work, each of the minimum value

    of 30% (Thirty per cent) of the estimated amount put to tender

    during 5 (five) years prior to the date of issue of the tender

    notice;

              Or,

    C) Intending tenderers should produce credentials of one

    single running work of similar nature which has been

    completed to the extent of 80% (Eighty per cent) or more and

    value of which is not less than the desired value at (a) above;

        In case of running works, only those tenderers who will

    submit the certificate of satisfactory running work from the

    concerned       Executive   Engineer,   or   equivalent   competent

    authority will be eligible for the tender. In the required

    certificate it should be clearly stated that the work is in

    progress satisfactorily and also that no penal action has been

    initiated against the executing agency, i.e., the tenderer.

 Similar nature of work includes supply of any materials.

 Completed work-Completed single or multiple purchase order

  issued from a single tender.
                                             4




           Payment certificate will not be treated as credential;

           Credential certificate issued by Executive engineer or equivalent

            or   competent      authority       of   a   State/Central   Government,

            State/Central Government undertaking, Statutory/Autonomous

            bodies constituted under the Central/State statute, on the

            executed value of completed/running work will be taken as

            credential.

           The bidder should have valid explosive license at the time of

            opening       of   the   bid,       L1   bidder   should     submit   the

            authorization certificate from the manufacturer whose

            material it is going to supply.

           If L1 bidder failed to submit the authorization certificate

            from the manufacturer within seven days, then the EMD of

            L1 bidder will be forfeited and will be debarred from

            participating in all future tenders up to 3 years."

3. The notice inviting tender mentions about a pre-bid meeting which any

interested party having any query or requiring any information, could

attend.

4. The Appellant no. 1, a partnership firm and the Respondent no. 9 along

with another party participated in the tender process. The Respondent no. 9

was found to have quoted the lowest price and emerged as L1 bidder. The

work order has not yet been issued.
                                        5




5. After the Respondent no. 9 became the successful bidder, the appellants

approached the learned Single Judge challenging the tender process. Before

the learned Single Judge it was primarily argued that in similar tenders for

the last few years, "similar nature of work" was defined as including supply

of any water treatment chemical. In particular, notice inviting tenders for the

financial years 2020-2021 and 2021-2022 were referred to. However, in the

notice inviting tender for the current financial year "similar nature of work"

has been defined as including supply of any materials. According to the writ

petitioners, this change was made to favour the Respondent no. 9 which

does not have any experience with regard to supply of liquid chlorine.

6. The contemplated pre-bid meeting never took place and as such the writ

petitioners did not have the opportunity to raise the issue with regard to the

eligibility of the Respondent no. 9 to participate in the tender process.

7. The writ petitioners relied on the following three decisions before the

learned Single Judge.

          "a) Dr. (Major) Meeta Sahai vs State of Bihar & Ors. reported in

          (2019) 20 SCC 17.

          b) Chhanda Koley vs Bharat Petroleum Corporation Ltd. &

          Ors. reported in 2018 SCC Online Cal 16849.

          c)   Meerut    Development       Authority    vs    Association   of

          Management Studies & Anr. reported in (2009) 6 SCC 171."

8. The writ petitioners prayed for either setting aside of the entire tender

process or setting aside of the bid of the Respondent no. 9 and issuance of

work order in their favour.
                                          6




9. The Respondent no. 9 argued before the learned Single Judge that the

Writ Petitioner no. 1 with full knowledge of the eligibility criteria participated

in the tender process. At no point of time the writ petitioners objected to the

eligibility criteria. Having participated in the tender process and having been

unsuccessful, the writ petitioners cannot turn around and challenge the

eligibility criteria. The private respondent relied on the following decisions:-

          "a) Silppi Constructions Contractors vs Union of India & Anr.

          reported in (2020) 16 SCC 489.

          b) Tafcon Projects (I) (P) Ltd. vs Union of India & Ors. reported

          in (2004) 13 SCC 788.

          c) Opaque Infrastructure Pvt. Ltd. vs Union of India & Ors.

          reported in MANU/DE/0964/2015."

10. Learned Advocate for KMC argued that a participant in a tender process

cannot dictate the terms/conditions of tender. It is for the concerned

authority floating the tender to fix the eligibility criteria. The writ petitioners

had sufficient opportunity to raise the issue at the pre-bid stage. After

declaration of the final result, the objection of the writ petitioner regarding

the eligibility criteria mentioned in the notice inviting tender cannot be

considered.

11. KMC further submitted that the change in the definition of "similar

nature of work" was necessitated to give opportunity to suppliers of other

materials so that there is good competition and the best candidate may be

selected at the best available rate. No manufacturer of chlorine has ever

participated in any tender process floated by the Corporation, not being
                                        7




eligible to participate. Only middle men who are the suppliers having

explosive license are eligible to participate. There being very few number of

suppliers, a cartel is often formed by them to raise the bid amount. Wider

participation in the tender process allows KMC to exercise better choice. In

connection with the present tender, by reason of having widened the horizon

of participants, KMC has saved approximately Rs. 80,00,000/- of public

money which can be used for other public projects. The suppliers of liquid

chlorine are not required to have any special expertise. It is only a question

of buying from the manufacturer and delivering to KMC.

12. Having duly recorded the arguments of the respective parties, the

learned Judge observed that there was no acceptable explanation for the

writ petitioners not to raise their objection as regards the eligibility criteria

at the pre-bid stage. It is also not the case of the writ petitioners that the

eligibility clause was changed after the tender process started. KMC is the

best authority to decide as to what is required from the participants. KMC

felt the need to expand the scope of participation and accordingly opened the

field for suppliers of all or any type of material to participate in the tender

process, subject to they satisfying the other conditions specified in the notice

inviting tender. Had the writ petitioners been successful in quoting the

lowest rate, the present litigation would not have seen the light of the day. It

is only because the writ petitioners failed to qualify in the financial bid that

they have come up with the allegation of the eligibility criteria having been

changed to accommodate the Respondent no. 9.
                                         8




13. The learned Judge observed that the Hon'ble Supreme Court has clearly

held that the scope of judicial review in tender matters is extremely limited.

The learned Judge discussed the three decisions relied upon by the writ

petitioners and distinguished the same. The learned Judge dismissed the

writ petition with inter alia the following observations:-

          ".....

             Here, instead of restricting the zone of consideration amongst a

          select few, the Corporation has extended the zone of consideration

          to include others. The petitioners ought not to be prejudiced if the

          area of selection increases.       The petitioners cannot oppose

          competition from others.

          .....

In the present case, it does not appear that the alteration in the

eligibility clause from the previous years' tender documents is

arbitrary, irrational or perverse. Apart from the fact that the

petitioners had to face stiff competition from the other bidders, it

does not appear that there is any arbitrariness or illegality

warranting interference in the present matter.

.....

Here, the petitioners have not raised any other issues regarding

unfair treatment or bias in the selection process. The only

grievance is that the pool of consideration has been widened to

increase participation resulting in stiff competition which is not to

the liking of the petitioners. It is evident that the petitioners at the

initial stage took the risk and participated in the tender process;

and after becoming unsuccessful in the last stage, is crying foul.

The submission of the petitioners that they missed to notice the

change in the eligibility criteria after the bidding was over is

irrelevant. The same hardly makes any difference to the merits of

the case. It is not expected that a bidder, unaware of the

conditions mentioned in the tender document, participates in the

same and thereafter being unsuccessful grunts over the same.

The Learned Advocate representing the private respondent

insists that the pre bid meeting took place as scheduled. As none

of the participants had any query or any objection with regard to

the terms and conditions of the notice inviting tender, accordingly,

the minutes of the meeting was not required to be recorded

separately. Learned Advocate for the Corporation also submits that

the notice inviting tender specified the date of the pre bid meeting.

If the petitioner had any grievance with regard to the tender

condition, it ought to have been pointed out on the said date. The

petitioners never raised any objection with regard to the eligibility

clause mentioned in the notice inviting tender."

14. Being aggrieved the writ petitioners are before us by way of this appeal.

15. Essentially the same arguments as were advanced on behalf of the

parties before the learned Single Judge, have also been made before us.

16. To start with, it is now well established that the scope of interfering with

a tender matter in exercise of jurisdiction under Article 226 of the

Constitution of India, is extremely limited. A tenderer cannot challenge a

term/ condition of the tender just because it does not suit him. The

Government and its undertakings as well as statutory bodies like KMC must

have a free hand in settling the terms of a tender. The Court cannot interfere

just because it feels that some other tender term would have been fairer,

wiser or more logical. Generally speaking, the Court must exercise judicial

restraint in administrative actions. The writ Court does not sit like a Court

of Appeal over the concerned authority which has floated the tender and

which is the best judge of its requirements. The Court's interference should

be minimal and it must exercise restraint and caution. The Government

must have freedom of contract and is in the best position to understand and

appreciate its requirements.

17. In this connection one may refer to the following decisions:-

(i) Tata Cellular v. Union of India, reported at (1994) 6 SCC

651.

(ii) Balaji Ventures Pvt. Ltd. v. Maharashtra State power

Generation Company Ltd. and Ors., reported at

MANU/SC/0740/2022.

(iii) Airport Authority of India v. Centre for Aviation Policy,

Safety & Research (CAPSR) and Ors., reported at (2022) SCC

OnLine SC 1334.

18. Courts must exercise restraint in interfering in tender matters. The

parties are governed by the principles of commercial prudence and to that

extent, principles of equity and natural justice have to stay at a distance.

(Please see Uflex Limited v. Government of Tamil Nadu, (2022) 1 SCC

165).

19. The rights of a bidder participating in the tender process have been

stated by the Hon'ble Supreme Court in the case of Meerut Development

Authority v. Association of Management Studies & Anr. (2009) 6 SCC

171. At paragraphs 26 to 29 of the reported judgment, the Hon'ble Apex

Court has held as follows:-

"26. A tender is an offer. It is something which invites and is

communicated to notify acceptance. Broadly stated it must be

unconditional; must be in the proper form, the person by whom

tender is made must be able to and willing to perform his

obligations. The terms of the invitation to tender cannot be open to

judicial scrutiny because the invitation to tender is in the realm of

contract. However, a limited judicial review may be available in

cases where it is established that the terms of the invitation to

tender were so tailor-made to suit the convenience of any

particular person with a view to eliminate all others from

participating in the biding process.

27. The bidders participating in the tender process have no other

right except the right to equality and fair treatment in the matter of

evaluation of competitive bids offered by interested persons in

response to notice inviting tenders in a transparent manner and

free from hidden agenda. One cannot challenge the terms and

conditions of the tender except on the above stated ground, the

reason being the terms of the invitation to tender are in the realm

of the contract. No bidder is entitled as a matter of right to insist

the authority inviting tenders to enter into further negotiations

unless the terms and conditions of notice so provided for such

negotiations.

28. It is so well-settled in law and needs no restatement at our

hands that disposal of the public property by the State or its

instrumentalities partakes the character of a trust. The methods to

be adopted for disposal of public property must be fair and

transparent providing an opportunity to all the interested persons

to participate in the process.

29. The Authority has the right not to accept the highest bid and

even to prefer a tender other than the highest bidder, if there exist

good and sufficient reasons, such as, the highest bid not

representing the market price but there cannot be any doubt that

the Authority's action in accepting or refusing the bid must be free

from arbitrariness or favouritism."

20. In my considered opinion, no legal right of the appellants has been

infringed in the present case which would call for intervention of the writ

Court. KMC changed the definition of "work of the similar nature" to enable

more intending parties to participate in the tender process. This would not

only result in the lowest rates being obtained by the public authority but a

larger participation in a selection or tender process is always more desirable.

The result of changing the definition of "work of similar nature", has been

that the appellants have had to face more competition than it would have

otherwise faced. About this, the appellants cannot make any legitimate

grievance.

21. Before us, learned Counsel for the appellants, on instruction, submitted

that the appellants are now willing to offer a rate which is lower than that of

the respondent no 9. I note that the appellant had quoted Rs.16,500/- per

metric ton of liquid chlorine whereas the private respondent had quoted Rs.

13,570/-. I am not inclined to permit the appellants to conduct an auction

before this Court once the tender process is complete by unsettling the

same.

22. The learned Judge has dealt with the judicial precedents relied upon by

the appellants/writ petitioners and have rightly distinguished the same. I

have also gone through the decisions. None of the decisions advances the

case of the appellants.

23. It was submitted that "similar nature of work" cannot include "supply of

any materials". The two are inconsistent. "Similar nature of work" must

necessarily mean supply of any water treatment chemical as was the

definition of "similar nature of work" in the notices inviting tender for the

last three years.

This argument does not appeal to me. The job is to supply a

commodity, namely, liquid chlorine. To purchase the same from the

manufacturer and to deliver it to KMC does not require any special skill or

expertise. What the supplier is required to do is to act as a trader or a

middle man, collect the liquid chlorine from the manufacturer and make it

over to KMC. Hence it was perfectly justified for KMC to define the 'similar

nature of work' as including 'supply of any material' with a view to opening

up the door for a greater number of participants in the tender process.

24. I do not find any infirmity, illegality or procedural impropriety in the

learned Single Judge's approach or the final decision. There is no

irregularity in the decision making process undertaken by KMC. It is well

settled that judicial review is concerned, not with the merits of the decision

arrived at by an authority but the manner in which the decision has been

arrived at. The learned Single Judge has rightly declined to intervene.

25. M.A.T. No. 722 of 2023 with I.A. No. CAN 1 of 2023 is accordingly

dismissed. There will be no order as to costs.

26. Urgent certified website copies of this judgment, if applied for, be

supplied to the parties subject to compliance with all the requisite

formalities.

I agree.

(APURBA SINHA RAY, J.)                            (ARIJIT BANERJEE, J.)