M/S Shreejikrupa Project Limited vs Nmdc Limited (A Government Of ...
2021 Latest Caselaw 2910 Chatt

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                                                                              AFR


                HIGH COURT OF CHHATTISGARH, BILASPUR
                        Writ Petition (C) No. 4311 of 2021

     M/s Shreejikrupa Project Limited, a company incorporated under the
     provisions of the Companies Act, 1956 having its registered office at Krishna
     Complex - 2, Near Jaipark Nana Mava Main Road, Rajkot 360001 (Gujarat)
     and its branch office at 289, Sunder Nagar, Behind CSEB Office, Raipur
     492013 (Chhattisgarh) through its Managing Director Karsanbhai Bachubhai
     Varsani.

                                                                    ---- Petitioner

                                     Versus

1.   NMDC Limted (A Government of India Enterprise), 10-3-311/A, Khanij
     Bhavan, Castle Hills, Masab Tak, Hyderabad - 500028, Telangana.

2.   The General Manager (Contracts), NMDC Limited, 10-3-311/A, Khanij
     Bhavan, Castle Hills, Masab Tank, Hyedrabbad - 500028, Telangana.

3.   The Executive Director, BIOM Kirandul Complex, NMDC Limited, P.O.
     Kirandul - 494556, Datewada (South Bastar), Chhattisgarh.

                                                                ---- Respondents

(Cause-title taken from Case Information System)

For Petitioner : Mr. Rishabh Garg, Advocate.

For Respondents : Mr. Vaibhav Shukla, Advocate.

Hon'ble Shri Arup Kumar Goswami, Chief Justice

Hon'ble Shri Goutam Bhaduri, Judge

Order on Board

Per Arup Kumar Goswami, Chief Justice

27.10.2021

Heard Mr. Rishabh Garg, learned counsel for the petitioner. Also

heard Mr. Vaibhav Shukla, learned counsel appearing for the respondents.

2. An e-Tender notification bearing Tender Enquiry No.

HO(Contracts) / Engg / KDL / Res Towers / 2020 / 233 dated 20.09.2021 was

floated by National Mineral Development Corporation (NMDC), a Government of

India Enterprise, inviting prospective bidders to submit their bids for

"Construction of Residential Towers at BIOM, Kirandul Complex, Dantewada

District, Chhattisgarh". The period of completion mentioned in the tender

document is 24 months from the 30th date of issue of the Letter of Award of

Contract, inclusive of monsoon period. The tender document consists of two

volumes: Volume - I of the tender document is titled as 'Techno-Commercial'

and Volume - II is styled as 'Technical specification'. The last date of

submission of tender is 10.11.2021

3. Having regard to the challenge made in this petition regarding

technical requirements, it is appropriate to extract the eligibility criteria, as

indicated in Clause 18 as well as technical requirements, as laid down in Clause

19.1. A note is appended to Clause 19.1, but for the purpose of this case, it is

not necessary to refer to the said note and therefore, the same is not extracted.

"18 Eligibility Criteria:-

Tenderers should meet technical and financial

requirements as given herein below:

19.1 Technical Requirements -

Experience: Bidder should have experience of

having successfully completed similar work(s)

satisfying the following criteria (I) & (II) during the last

seven (7) years ending last day of the month previous to

the one in which tenders are invited:

(I) One similar work costing not less than Rs. 12966.00

Lakhs

OR

Two similar works each costing not less than Rs. 7564.00

Lakhs

OR

Three similar works each costing not less than Rs.

5403.00 Lakhs

(II) At least any one work of the above at (I) should have at

least one building of minimum 7(Seven) stories with

monolithic structure (Shear wall technology) using

aluminium formwork.

Similar work means "Completed Building(s) of RCC

frame structure".

4. The financial requirements are laid out in Clause 19.3. Clause

19.3(a) indicates that average annual financial turnover of the bidder during the

last 3 years, ending 31st March, 2020 should be at least Rs. 6483.00 Lakhs.

5. The writ petition is filed questioning the technical requirement of

having at least "one building of minimum 7 (seven) stories with monolithic

structure (Shear wall technology) using aluminium formwork".

6. Mr. Rishabh Garg submits that the aforesaid stipulation is not only

redundant, but is also restrictive and that many eligible tenderers are ousted

from participating in the tender process at the threshold. He has submitted that

such a stipulation is wholly uncalled for as experience of "Completed Building(s)

of RCC frame structure" is also a requisite qualification and that any contractor

having experience of constructing buildings of RCC frame structure is capable

of executing monolithic structure (Shear wall technology) using aluminium

formwork. To substantiate his argument that this Court can interfere with the

terms of the tender, learned counsel places reliance on the decision of the

Hon'ble Supreme Court in the case of Monarch Infrastructure (P) Ltd. vs

Commissioner, Ulhasnagar Municipal Corporation & Others, reported in

(2000) 5 SCC 287, with particular reference to paragraphs 10 and 11, to

contend that the technical requirement under challenge has no nexus to the

purpose for which the tender was called for.

7. Per contra, Mr. Vaibhav Shukla has submitted that the

respondents, having regard to the nature of the buildings to be constructed,

have laid down the technical requirements and therefore, no interference is

called for in this writ petition. He has placed reliance in the decisions of the

Hon'ble Supreme Court in the cases of Meerut Development Authority vs

Association of Management Studies & Another, reported in (2009) 6 SCC

171, particularly with reference to paragraph 27, Michigan Rubber (India)

Limited vs State of Karnataka & Others, reported in (2012) 8 SCC 216, with

reference to paragraph 35, Central Coalfields Limited & Another vs SLL-

SML (Joint Venture Consortium) & Others, reported in (2016) 8 SCC 622,

with reference to paragraph 47 and Silppi Constructions Contractors vs

Union of India & Another, reported in (2020) 16 SCC 489, with reference to

paragraph 20.

8. We have considered the submission of the learned counsel for the

parties and have perused the materials on record.

9. The scope of work covers execution and completion of

construction works of:

"(a) Type-III residential tower cluster: 200 Units, 5 Nos

Towers of stilt + ten upper floors and terrace, 4 units each

floor, 40 units per tower, floor to floor height is 3.0 m.

(b) Type-IV residential tower cluster: 144 Units, 3 Nos

Towers of stilt + eight upper floors and terrace, 6 units

each floor, 48 units per tower, floor to floor height is 3.0 m.

(c) Type-V residential tower cluster: 21 Units, 1 no Tower,

stilt + seven upper floors and terrace, 3 units each floor,

floor to floor height is 3.20 m.

(d) Each tower is provided with Stilt Floor of ht 3.30 m and

Plinth level at 600 mm above formation level. Mumty

Room, lift machine rooms, over head water tanks are

provided above terrace level.

(e) Central structural steel dome structure with

polycarbonate roof sheeting in Type-IV & Type-V towers

and Paragolas in Type-III & Type-IV towers.

(f) Cafeteria is a double storey building constructed in

Type-III cluster above under ground sumps/pump house

with parking at stilt level and cafeteria at first floor.

(g) Fire Fighting systems

(h) Internal & External Electrifications

(i) Provisions of Lifts

(j) Internal & External water supply

(k) Storm water drainage works

(l) Sanitary installations

(m) Drainage works

(n) Under ground water storage sumps and Pumping

system for fire fighting and water supply in each cluster.

(o) Rain water harvesting works

(p) External development works for each cluster

(i) Roads & Drains

(ii) Car Parking sheds

(iii) Boundary wall & Gate

(iv) Guard Room"

Note: All towers are to be constructed with monolithic construction

system (Shear wall technology)."

10. Having regard to the controversy, it will be appropriate to consider

the judgments cited.

(A) In Monarch Infrastructure (supra), the Hon'ble Supreme

Court at paragraphs 10 and 11 observed as follows:

"10. There have been several decisions rendered by this Court on

the question of tender process, the award of contract and have

evolved several principles in regard to the same. Ultimately what

prevails with the courts in these matters is that while public

interest is paramount there should be no arbitrariness in the

matter of award of contract and all participants in the tender

process should be treated alike. We may sum up the legal

position thus :

(i) The Government is free to enter into any contract with citizens

but the court may interfere where it acts arbitrarily or contrary to

public interest;

(ii) The Government cannot arbitrarily choose any person it likes

for entering into such a relationship or to discriminate between

persons similarly situate:

(iii) It is open to the Government to reject even the highest bid at a

tender where such rejection is not arbitrary or unreasonable or

such rejection is in public interest for valid and good reasons.

11. Broadly stated, the courts would not interfere with the matter of

administrative action or changes made therein unless the

Government's action is arbitrary or discriminatory or the policy

adopted has no nexus with the object it seeks to achieve or is

mala fide."

(B) In Meerut Development Authority (supra), the Hon'ble

Supreme Court at paragraph 27 laid down as follows:

"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."

(C) In Michigan Rubber (India) Limited (supra), the Hon'ble

Supreme Court at paragraph 35 stated as follows:

"35. As observed earlier, the Court would not normally

interfere with the policy decision and in matters

challenging the award of contract by the State or public

authorities. In view of the above, the appellant has failed to

establish that the same was contrary to public interest and

beyond the pale of discrimination or unreasonable. We are

satisfied that to have the best of the equipment for the

vehicles, which ply on road carrying passengers, the 2 nd

respondent thought it fit that the criteria for applying for

tender for procuring tyres should be at a high standard and

thought it fit that only those manufacturers who satisfy the

eligibility criteria should be permitted to participate in the

tender. As noted in various decisions, the Government and

their undertakings must have a free hand in setting terms

of the tender and only if it is arbitrary, discriminatory, mala

fide or actuated by bias, the Courts would interfere. The

Courts cannot interfere with the terms of the tender

prescribed by the Government because it feels that some

other terms in the tender would have been fair, wiser or

logical. In the case on hand, we have already noted that

taking into account various aspects including the safety of

the passengers and public interest, CMG consisting of

experienced persons, revised the tender conditions. We

are satisfied that the said Committee had discussed the

subject in detail and for specifying these two conditions

regarding pre-qualification criteria and the evaluation

criteria. On perusal of all the materials, we are satisfied

that the impugned conditions do not, in any way, could be

classified as arbitrary, discriminatory or mala fide."

(D) In Central Coalfields Limited (supra), the Hon'ble Supreme

Court at paragraph 47 observed as follows:

"47. The result of this discussion is that the issue of the

acceptance or rejection of a bid or a bidder should be

looked at not only from the point of view of the

unsuccessful party but also from the point of view of the

employer. As held in Ramana Dayaram Shetty v.

International Airport Authority of India, (1979) 3 SCC 489,

the terms of NIT cannot be ignored as being redundant or

superfluous. They must be given a meaning and the

necessary significance. As pointed out in Tata Cellular v.

Union of India, (1994) 6 SCC 651 there must be judicial

restraint in interfering with administrative action. Ordinarily,

he soundness of the decision taken by the employer ought

not to be questioned but the decision making process can

certainly be subject to judicial review. The soundness of

the decision may be questioned if it is irrational or mala

fide or intended to favour someone or a decision "that no

responsible authority acting reasonably and in accordance

with relevant law could have reached" as held in Jagdish

Mandal v. State of Orissa, (2007) 14 SCC 517 followed in

Michigan Rubber (India) Ltd. v. State of Karnataka, (2012)

8 SCC 216."

(E) In Silppi Constructions Contractors (supra), the Hon'ble

Supreme Court at paragraph 20 held as follows:

"20. The essence of the law laid down in the judgments

referred to above is the exercise of restraint and caution;

the need for overwhelming public interest to justify judicial

intervention in matters of contract involving the state

instrumentalities; the courts should give way to the opinion

of the experts unless the decision is totally arbitrary or

unreasonable; the court does not sit like a court of appeal

over the appropriate authority; the court must realise that

the authority floating the tender is the best judge of its

requirements and, therefore, the court's interference

should be minimal. The authority which floats the contract

or tender, and has authored the tender documents is the

best judge as to how the documents have to be

interpreted. If two interpretations are possible then the

interpretation of the author must be accepted. The courts

will only interfere to prevent arbitrariness, irrationality, bias,

mala fides or perversity. With this approach in mind we

shall deal with the present case."

10. A perusal of the above judgments goes to show that the

government and the instrumentalities of the State must have a free hand in

setting terms of the tender. Terms of invitation to tender are in the realm of

contract. The bidders participating in the tender process have a limited right to

equality and fair treatment in the matters of evaluation of competitive bids.

Terms of a tender cannot be ignored as being redundant or superfluous and

they must be given a meaning and necessary significance. The authority

floating the tender is the best judge of its requirements and, therefore,

interference of the Court should be minimal. The Court cannot interfere with the

terms of the tender if it feels that some other terms would have been better. A

Court may interfere with the terms and conditions of the tender only if such

terms are arbitrary, discriminatory, irrational, malafide or intended to favour

someone.

11. Since the scope of civil works itself indicates that all towers [some

of which are more than 7 (seven) stories] are to be constructed with the

monolithic construction system (Shear wall technology), it cannot be said that

the technical specification prescribing experience of successfully completing

at least one building of minimum 7 (seven) stories with monolithic structure

(Shear wall technology) using aluminium formwork cannot be said to be

arbitrary, irrational or not having any nexus to or connection with the purpose

for which the tender was invited.

12. In view of the above discussion, we are of the considered opinion

that no case is made out for interference and accordingly, the writ petition is

dismissed. No costs.

                               Sd/-                                     Sd/-
                    (Arup Kumar Goswami)                           (Goutam Bhaduri)
                         Chief Justice                                Judge

Brijmohan