Anand Water Meters Mft. Co. & Ors. vs Delhi Jal Board & Ors.
2000 Latest Caselaw 477 Del

ORDER

Manmohan Sarin, J.

1. The three petitioners in this petition, are manufacturers of domestic water meters. They were the bidders in response to a notice inviting tenders, dated 13.9.1999. issued by the respondent No. 1, Delhi Jal Board, for supply of 1,20,000 15 mm size domestic water meters. The notice inviting tenders (NIT) required submission of technical and price bids. Petitioners are aggrieved by non-acceptance of their technical bids, resulting in the price bids not being considered.

2. Petitioners, therefore, seek appropriate writ or direction that decision making process of respondent No. 1 to exclude the petitioner from grant of orders and placing the orders with respondent No. 3, the successful bidder, whose technical bid was found acceptable, was illegal and contrary to law and public interest. Petitioners urge that respondent No. 1 was contemplating to award the contract to respondent No. 3 at a price which was three times higher than the prices quoted by the petitioners. An interim order was passed in CM. 579/2000, directing respondent No. 1, not to place orders with respondent No. 3 in case its price was higher than the price quoted by the petitioners, pursuant to the tender notice bearing No. 24 dated 13.12.1999.

3. Petitioner No. 1 is M/s. Anand Water Meters MFG Company Pvt. Ltd. ; petitioner No.2 is M/s Aman Engineering Works; petitioner No. 3 is M/s. Capstan Meters (India) Ltd.; while petitioner No. 4, Shri Ram Krishna is a shareholder of petitioner No. 3. Petitioners claim to be leading manufacturers of water meters, having successfully supplied water meters to respondents 1 & 2 in the past also.

4. As noted above, respondent No. 1 had issued notice inviting tenders for the supply of 1,20,000 water meters from manufacturers. The salient terms of the Notice inviting tenders are reproduced:

"Sealed tenders in two parts (Technical Bid and Price Bid) duly super scribed are hereby invited for the supply of Domestic Water Meters from Manufacturers and will be received in the office of the undersigned upto 3.00 pm on 21.10.1999 (Twenty First October nineteen Hundred Ninety Nine) and Technical Bid will be opened on the same day at 3.15 pm. in the presence of tenderers or their authorized representatives who may like to attend. The price Bid will be opened with due notice.

     S.   Particulars              Qty.      E/Money   Tender  Completion
     No.                                     (in Rs.)  Fee     Period.
                                                       (in Rs) 
     1.   15 mm size domestic 
     consumer water meters 
     inferential type multi 
     jet, magnetically coupled 
     having dry straight 
     reading dial Class 'B' 
     ISI marked and conforming 
     to IS:779 (1994) with 
     upto date amendments or 
     conforming to ISO:4064 
     Class 'B' marked with 
     upto date amendments. 
     Part wise material must be     1,20,000  1.00 lacs. 500.00  3 m.
     as detailed in tender specifications. 
 

     2.   The  tenderer  shall have to deposit 10  Nos.  sample  water meter  for testing from F.C. & R. I., Palghat (A Government  Test House) alongwith technical bid). 
 

     3.   ................. 
 

4. The price bid (submitted in sealed cover alongwith Technical bid) only of those tenderers will be opened with due notice whose water meter are passed by F.C. & R.I., Palghat after testing as per IA0779/1994 or ISO-4064 with upto date amendments and material specification mentioned in tender and the deptt, is satisfied that the NIT specification are met with in all respects. The decision of the deptt. shall be final and binding on all tenderers."

5. The three petitioners and respondent No. 3 were the four bidders who participated in the tender. Petitioners are aggrieved because their price bids have not been opened on the ground that their water meters tested by the Fluid Control Research Institute, Palghat, have not been found to be acceptable.

6. Learned senior counsel for the petitioners has assailed the exclusion of the petitioners on a number of grounds:

(i) Firstly, it is urged that the conditions of Notice inviting tenders, were by a conscious effort so designed by respondents as to exclude competition. It is submitted that in the earlier, "notices inviting tenders", authorized dealers were also permitted to participate, but in the present NIT, participation was confined only to "manufacturers". It was urged that respondent No. 3, M/s. Schlumberger Industries (I) Ltd, was not a manufacturer of domestic water meters and was, therefore, ineligible and bound to be disqualified. Admittedly, it did not have any manufacturing facilities in India. It only sourced water meters from abroad and this would not turn it into a "manufacturer".

(ii) Secondly, it is urged that the Jal Board, being a public authority, should have followed a procedure in accepting or rejecting the technical bid of the tender that was open, transparent and fair.

The respondents had not deliberately disclosed to the petitioners, the contents of the test reports by the Fluid Control Research Institute, Palghat, on the samples of the petitioners. This was necessary since the very foundation of the concision making process was the test reports of the samples. Petitioners claim that even the test report of respondent No.3 should have been revealed to them. In this connection learned counsel placed reliance on a certificate dated 2.8.1999, issued by the Executive Engineer of respondent No. 1, certifying that the previous 50000 water meters, supplied by petitioner No.1, of 15 mm. magnetic Class 'B', conformed to ISO 4064 and were functioning satisfactorily. Reliance was also placed on performance Test Report by the Fluid Control Research Institute, Palghat, in respect of meters of petitioner Nos.1 and 3, appearing at pages 32 and 33 of the paper book, in support of the submission that products of the petitioners had earlier been found acceptable and there was no reason for their rejection for the present tender. It was urged that simply quoting an extract of the report in an affidavit, was hardly sufficient. The respondent No.1 was obliged to act in a fair manner by completely disclosing the contents of the reports and inviting the comments of the petitioners. Petitioners should have been given an opportunity to prove that the samples furnished by them met the specifications.

(iii) Thirdly, it was urged by learned senior counsel for the petitioners that respondent No. 3, having quoted a price which was far in excess of the price quoted by the petitioners, the respondent Delhi Jal Board, as a public authority, was required to keep in mind considerations of public interest and public revenue. The Delhi Jal Board, having tried and tested the meters supplied by the petitioners over the last so many years and having found their performance satisfactory, should not have acted in haste in an arbitrary manner contrary to public interest by exclusion of all the petitioners from consideration and being left with only respondent No.3, who had quoted a highly exorbitant price. Counsel submitted that this was a fit case to recall the tender.

7. Learned counsel for the respondent No.1, Mr. Geeta Mittal, on the other hand, strongly refuted the submission that there was any abritrariness or irregularity or unfairness in the decision-making process. Learned counsel made available the entire record relating to the test reports for the perusal of the Court as well as the other record.

8. Having heard learned counsel for the parties and having perused the record, I find that petitioners are not entitled to succeed in the writ petition. The submission of the petitioners regarding ineligibility of respondent No. 3 is misconceived. The bid of respondent No. 3 is not on the basis that it has a manufacturing unit in India. The tender is submitted by respondent No. 3 on behalf of its principals. The bid itself states that M/s. Schlumberger Industries (I) Ltd. is a group company of M/s. Schlumberger Industries, France, having 23 water meter manufacturing units, spread all over the world. Respondent No. 3 has also produced on record the authorisation from Schlumberger Industries Ltd., Brazil, authorising M/s. Schlumberger Industries (I) Ltd. to quote on their behalf. In this view of he matter, petitioners' submission is misconceived as it is not the case of respondent No. 3 that the product is manufactured in India.

9. Coming to the second main submission of the petitioner that the terms of the Notice inviting tenders, especially with regard to the requirement for testing by Fluid Control Research Institute, Palghat, and deletion of "authorized representatives" being permitted to quote was designed to exclude competition and favour respondent No. 3, to the prejudice of the petitioners, is again not tenable. It is not in dispute that petitioners had accepted the above terms and conditions of the "Notice inviting tenders". Having accepted the same and deposited the testing fee as well as the samples, it is not open for them to raise any objection to the terms and conditions of the tender or to the requirement of test by Fluid Control Research Institute, Palghat, simply because the test results have gone against them.

10. From a perusal of the record, I find that a Technical Committee comprising the Engineer-in-Chief, four Chief Engineers, Superintending Engineer, Director of Revenue and the Member Administration of respondent No. 1 had carefully deliberated with regard to the introduction of a pre-testing condition in the "Notice inviting tenders". The Committee had recommended that the meters should be got tested from Fluid Control Research Institute, Palghat, observing that a life test/endurance test was very important and should form the basic parameter for selection. Further, that the component of the meters should be strictly as per the "Notice inviting tenders" specifications and there should not be any deviation in view of the Indian conditions. As a matter of fact, an earlier Notice inviting tenders, bearing No. 27, which was due, was discharged and fresh tender was directed to be called, incorporating the requirement for pre-testing by Fluid Control Research Institute, Palghat. It would, thus, be seen that it was a conscious decision taken by the experts for ensuring high quality of meters. The Fluid Control Research Institute is a government sponsored premier research Institute, with impeccable credentials. The samples submitted by the bidders had been carried by a person of the rank of Superintending Engineer personally to the Institute and given for testing. The original reports of the Fluid Control Research Institute, which is a project set up with the UNDP assistance, under the Ministry of Industry have been perused. Unfortunately, the samples submitted by the petitioners failed to qualify the extensive testing procedure. The meters submitted by the parties passed through various testing procedures, including before temperature suitability test; after temperature suitability test and after accelerated endurance test. Except the meters submitted by respondent No. 3, all others samples showed poor performance compared to the standards prescribed in IS 779/ ISO 4064. In fact, not a single meter of any of the petitioners could pass the test. The total number of tests performed, including the initial pressure test; life test; accuracy test; before and after temperature and accuracy test after life test, were 144 in number. On a perusal of the record, I find that there is no basis to decry the report given by the Fluid Control Research Institute. It is not open to the petitioners to question the credibility of the test reports because their sample for a different contract for water meters had been found acceptable by the Fluid Control Research Institute, Palghat. As a matter of fact, a perusal of the earlier reports shows that when petitioners' samples had been found acceptable, only a limited number of tests had been done. There is no basis for the petitioners' allegation that the test reports were manipulated to favour respondent No.3. There is nothing produced or available either on record or from the attendant circumstances to support this assertion. No malafides or lack of bonafides can be attributed to the respondents. In any case, it is not for the Court in writ jurisdiction to sit over the judgment of a body of experts and substitute it by its own views. Reference may usefully be made to the following observations of the Apex Court in Raunaq International Ltd. Vs. I. V. R. Construction Ltd. & Others :

"16. It is also necessary to remember that price may not always be the sole criterion for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert committee's special knowledge plays a decisive role in deciding which is the best offer. Price offered is only one of the criteria. The past record of the tenderers, the quality of the goods or services which are offered, assessing such quality on the basis of the past performance of the tenderer, its market reputation and so on, all play an important role in deciding to whom the contract should be awarded. At times, a higher price for a much better quality of work can be legitimately paid in order to secure proper performance of the contract and good quality of work..........which is as much in public interest as a low price. The Court should not substitute its own decision for the decision of an expert evaluation committee."

11. As regards petitioners' contention that because of the price difference, tenders ought to be recalled, it has to be noted that petitioners, who have failed in the technical bid, have no locus to agitate the same. Moreover, the necessity of having domestic waters meters of excellent quality, meeting international standards, cannot be underscored. The instances of defective non-functional water meters, resulting in higher maintenance costs, as well as loss of public revenue by non-billing of the water supplied, are factors which the respondents have also to consider while taking a decision regarding the award of contract.

12. The petitioners and respondents are both bound by the terms and conditions of the Notice inviting Tenders. Respondent No. 1 cannot be faulted with for acting in accordance with the terms and conditions of the tender. There is no procedural irregularity or arbitrariness or unfairness in the procedure followed. The respondent No. 1 states that the decision shall be taken in accordance with the conditions specified in the Notice inviting tenders, keeping public interest and recovery of revenue, statutory and public law obligations in mind.

13. In view of the foregoing discussion, the challenge in the writ petition must fail. There is no ground made out for exercise of jurisdiction under Article 226 of the Constitution of India. The writ petition is dismissed.