J. Mitra And Co. Pvt. Ltd. vs National Aids Control ...
2007 Latest Caselaw 661 Del

JUDGMENT

Mukul Mudgal, J.

1. This writ petition challenges the award of tender to M/s Span Diagnostics Ltd. - respondent No. 3, by National Aids Control Organisation 'Respondent No. 1 and M/s Hindustan Latex Ltd.- respondent No. 2.

2. The facts of the case as per the petitioner as as under:

(a) The petitioner, M/s J. Mitra and Co. Pvt. Ltd. have challenged the decision of Respondents 1 and 2 in accepting the bid of Respondent No. 3 contrary to their own guidelines Instructions to Bidders (hereinafter referred to as ITB). As per Clause 20.1 of ITB, no bidder was allowed to give an alternate bid. It was also decided in the pre-bid meeting held on the 22nd August 2006 that in case any party made an alternate bid then the bid would be rejected.

(b) On 7th September 2006 when the Bids were opened in the presence of the representatives of all the bidders, the petitioner protested against the alternative bid of Respondent No. 3 in violation of the tender terms and was told by the officials that the final decision regarding the alternative bid would be taken later.

(c) The petitioner protested against the bid of Respondent No. 3 in writing on 8th September 2006 when the petitioner found out that their bid was the lowest for all the Schedules from 1 to 10. The petitioner sent a reminder to both the Respondents on 25th October 2006 asking them to give a decision on the representation dated 8th September 2006 and to reject the bid of Respondent No. 3 which contained the alternative bid. The petitioner received the Order for only 50 per cent of the quantity in Schedule 2 for which the petitioner's rate and Respondent No. 3's rate was identical. For the remaining schedules, orders were given to Respondent No. 3 contrary to Clause 20.1 of the ITB and the assurance given at the pre-bid meeting held on 22nd August 2006.

3. The main plea raised by Mr. Chandhiok, the learned senior counsel appearing for the petitioner is based upon reliance on clause 20.1 of the Instructions to Bidders (hereinafter referred to as ITB) which reads as follows: 'ITB 20.1 - Alternative bids will not be accepted.'

4. The bid with which we are concerned in the present writ petition is for Schedule I : HIV (Rapid) Kits (6,81,000 tests). Reliance has further been placed by the learned senior counsel for the petitioner on clause 2 of the Invitation For Bids (in short IFB) which reads as follows:

2. Bidders are free to quote for any or more than one schedule but must quote for the full quantity of the schedule(s) offered. Evaluation of bids will be conducted for each schedule separately.

5. The main plea on which the writ petition is founded thus is that the respondent having submitted alternate bids was debarred from being considered and an allotment to him thus clearly violated the ITB. The petitioner has contended that the respondent No. 3's bid was in the following terms: Participant Item Quantity Price per Test Bid Security (Rs.) SPAN DIAGNOSTICS LTD., SURAT, 173-B, NEW INDUSTRIAL ESTATE, UDHNA, SURAT, GUJARAT-394210 CHAIRMAN and MD : Dr. P.K. Desai COMBAID Rs. ADV. With Each Strip Individually packed (48 tests) (OPTION -1) SCH-1 681000 tests SCH-II 500000 tests SCH-III 550000 tests SCH-IV 564000 tests SCH-V 650000 tests SCH-VI 800000 tests SCH VII 750000 tests SCHVIII 700000 tests SCH IX 310120 tests SCH X 900000 tests 9.33 9.70 9.45 9.45 9.45 9.33 9.33 9.33 9.33 9.33 163000.00 120000.00 132000.00 135360.00 132000.00 192000.00 180000.00 168000.00 74000.00 216000.00 SPAN DIAGNOSTICS LTD., SURAT COMBAID Rs. ADV. 8 tests pack (OPTION -2) SCH-1 681000 tests SCH-II 500000 tests SCH-III 550000 tests SCH-IV 564000 tests SCH-V 650000 tests SCH-VI 800000 tests SCH VII 750000 tests SCHVIII 700000 tests SCH IX 310120 tests SCH X 900000 tests 8.33 8.70 8.45 8.45 8.45 8.33 8.33 8.33 8.33 8.33 BID SECURITY NOT SUBMITTED

6. It is submitted that in the bid submitted by the respondent No. 3, Option-1 and Option-2 were two alternate bids and were thus defective and non- responsive for two reasons:

(i) That they were alternate bids contrary to the ITB Clause 20.1.

(ii) The bid was ab-initio defective as option-2 was not accompanied by bid security.

7. The representation made by the petitioner on the aforesaid pleas was rejected on the following reasoning found in the Evaluation Committee Report:

10.0 REPRESENTATIONS

After the opening of the bids and during the bids evaluation period representations were received from two participating bidders. Details are hereunder:

1. M/s J. Mitra and Co., Delhi vide their letter No. JML/PSS/HLL/IFC-39/01 dt. 08.09.2006 made a representation as detailed below

- They pointed out that M/s Span Diagnostics had submitted 2 options in their bids under one bid security and as per ITB Bid data sheet clause 20.1 alternative bids shall not be accepted.

- The committee took a view of the above and it was found that M/s Span Diagnostics submitted 2 options for the same product manufactured by them with different options of packing. So it cannot be considered as alternative bids. M/s J. Mitra also submitted to bids with two different bids forms and bid securities. But in their case they offered two different products, which use different principles for the detection of antibodies and as such it is considered as alternative bids.'

8. It is submitted that the above reasoning is contrary to the ITB as an alternate bid has been wrongly construed as the offering of the same product in different options of packing.

9. Mr. Chandhiok further submitted that in the light of the above clarification, the interpretation sought to be adopted on the representation made the petitioner was thus entirely wrong and contrary to even to Pre Bid Instructions given to all the representatives of the bid forms.

10 Mr. Chandhiok has further relied upon the minutes of the Pre Bid Conference dated 22nd August, 2006 which reads as follows : 'One of the firms' representatives referred to Point No. 2 of Section VII, Technical Specification of the bid document and sought clarification on the method of detection of antibodies. The technical expert opined that all the three methods used in detection on the antibodies recommended by the Technical committee would be included. The representatives were told that a clarification in this regard would follows.

It was also clarified to the representatives that in the COMB type kits, the firms have a responsibility to use proper packing to ensure that the quality of the kits remains intact if preserved for further use after using a few strips.

Replying to a question, AGM (PandCD) informed that this being National Competitive Bidding, Prices must be quoted in Indian Rupees and as per the bid condition; alternate bids will not be accepted. However, if any bidder wants to quote for alternative bids, he may do so in separate bidding documents with separate bid security.'

11. Mr. Chandhiok has further relied on clause 20 of ITB which reads as follows:

20. Alternative bids by Bidders '20.1 Unless specified in the Bid Data Sheet, altenative bids shall not be accepted.'

Mr. Chandhiok submitted that the Integrated Purchase Committee (in short 'IPC') has not discussed the reasoning of the Bid Evaluation Committee in rejecting the representation of the petitioner while affirming the approval of the Bid Evaluation Committee. He further submits that lack of security accompanying the bid, amounts to a material deviation which could not be waived by the respondent No. 1 under clauses 29.2 and 29.3 and that the unit price quoted was on the basis of test(s) according to the tender and the rate was not as per the strip/packing.

12. The stand of the respondent indeed reflects the reasoning contained in the rejection of the representation by the Bid Evaluation Committee of the respondent. Mr. Parag Tripathi, the learned senior counsel appearing for the respondent No. 3 submitted that the product in question is a diagnostic kit to determine whether the blood donated to Blood Banks is HIV Virus Free. He thus submitted that two options in respect to the manner of packing of goods of the kits sought to be supplied by respondent No. 3 have been wrongly portrayed by the petitioner to challenge the bid awarded in favor of respondent No. 3. It is submitted that the respondent had merely given an option of supplying kits in either one test packing and 8 tests packing. The rates for the 8 tests packing were lower and indeed accepted by the respondent No. 1. It is submitted that difference of packing option for the same product cannot be construed as an alternate bid and thus the plea of Mr. Chandhiok that second option was not accompanied by the bid security is entirely erroneous. Mr. Tripathi further submitted that even if it is assumed that there was some variation, the variation could be waived by the respondent purchaser in view of the following clauses contained in the ITB:

29.2 The Purchaser may waive any minor informality, non conformity, or irregularity in a bid that does constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of any Bidder.

29.3 Prior to the detailed evaluation, pursuant to ITB Clause 32, the Purchaser will determine whether each bid is of acceptable quality, is complete, and is substantially responsive to the Bidding Documents. For purposes of this determination, a substantially responsive bid is one that conforms to all the terms, conditions, and specifications of the Bidding Documents without material deviations, exceptions, objections, conditionalities or reservations. A material deviation, exception, objection, conditionality or reservation is one:

(i) that limits in any substantial way the scope, quality, or performance of the Goods and related Services (ii) that limits in any substantial way that is inconsistent with the Bidding Documents, the Purchaser's right or the successful Bidder's obligations under the Contract; and (iii) that the acceptance of which would unfairly affect the competitive position of other Bidders who have submitted substantially responsive bids.

13. He has further submitted that in case the bid is construed in a manner sought to be done by the Bid Evaluation Committee, two constructions of the ITB were possible and one such construction was adopted by the respondent. Unless such interpretation is shown to be perverse, arbitrary and unconscionable and malafide, it was not open to a writ court to prefer an interpretation different to that adopted by the respondent. Amongst others, Mr Tripathi has relied upon the position of law laid down by the Hon'ble Supreme Court in Reliance Airport Developers Pvt. Ltd. v. Airports Authority of India and Ors. , which reads as follows:

115. While exercising power of judicial review courts should not proceed where if two views are possible and one view has been taken. In such a case, in the absence of malafide taking one of the views cannot be a ground for judicial review.

14. Mr. Mehra who appears for respondent No. 1 has submitted that the decision taken by the Bid Evaluation Committee was placed for affirmation before the Integrated Purchase Committee comprising of the following highly placed officers who have accepted the recommendation made by the Bid Evaluation Committee:

1. Ms. Sujata Rao, D.G., NACO, MOHandFW

2. Shri Raghubir Singh, Additional Secretary (FA), MOH.

3. Shri B.P. Sharma, Jt. Secretary, MOHandFW.

4. Dr. J. Sokhey, Additional Project Director, NACO ' Member Secretary'

15. Thus it is submitted that such an evaluation by the Bid Evaluation Committee which was affirmed by the Integrated Purchase Committee comprising of highly placed officers in the absence of malafides cannot be termed as flawed and challenged in the writ proceedings. He further submits that even the petitioner, in respect of the item where its rates were same as of respondent No. 3 has been awarded 50% of the tender the remaining 50% has been awarded to respondent No. 3, thus ruling out any lack of fairness on the part of respondent No. 1.

16. Mr. C.N. Sreekumar who appears for respondent No. 2 also supported the plea of the learned senior counsel appearing for respondent No. 3.

17. The plea of the learned Counsel for Respondent No. 3, Mr. Tripathi that the two options of the manner of packing the required product, which in the instant case is a diagnostic kit to determine whether blood donated to Blood Banks is HIV free have been incorrectly interpreted and portrayed as alternative bids by the petitioner commends itself for approval by this Court. The two options given with respect to packaging of the same product cannot be construed as an alternative bid so as to make the bid of the petitioner as non responsive. We are also of the view that, in the present circumstances, the decision of Respondent No. 3 is also covered by clauses 29.3 and 29.3 of the ITB which gives the respondent purchaser the right to waive any minor irregularity or non- conformity.

18. In the present case the petitioner's product was the same, viz., 'Combaid Testing Kit' as that of the respondent. The 1st packing offered by respondent No. 3 was an individual packing of the product kit and what has been construed by the petitioner as the second option is merely a different packing of the same product where 8 test kits are packed together. The aforesaid option of packing cannot be considered as an alternate bid as the product is the same and only the manner of packing differs. The product portrayed in the tender 'Combaid Testing Kit' and the alternate methods of packing do not amount to a separate bid and therefore, the question of a separate bid security does not arise. Even if it be assumed that the alternate method of packing as contended by the petitioner should be construed as a 'variation' it is clearly covered by clauses 29.2 and 29.3. The clauses 29.2 and 29.3 give the purchaser the power to waive any minor non-conformity or irregularity and reads as follows:

29.2 The Purchaser may waive any minor conformity, nonconformity, or irregularity in a bid that does not constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of any Bidder.

29.3 Prior to the detailed evaluation, pursuant to ITB Clause 32, the Purchaser will determine whether each bid is of acceptable quality, is complete, and is substantially responsive to the Bidding Documents. For purposes of this determination, a substantially responsive bid is one that conforms to all the terms, conditions, and specifications of the Bidding Documents without material deviations, exceptions, objections, conditionalities, or reservations. A material deviation, exception, objection, conditionality, or reservation is one : (i) that limits in any substantial way the scope, quality or performance of the Goods and related services; (ii) that limits, in any substantial way that is inconsistent with the Bidding Documents, the Purchaser's rights or the successful Bidder's obligations under the contract; and (iii) that the acceptance of which would unfairly affect the competitive position of other Bidders who have submitted substantially responsive bids.

19. In order to determine what is a 'substantially responsive bid' its conformity to all the terms, conditions and specifications without material deviations needs to be considered. In the present case, the alleged alternate bid does not limit the scope, quality or performance of the product nor is it in any way inconsistent with the bidding documents, the purchaser's right or the successful bidder's obligation and more importantly does not in any way unfairly affect the competitive position of the petitioner's bid. Therefore, there is no material deviation present in the bid of respondent No. 3 even if it is be assumed that there was a departure from the tender condition.

20. We are further of the view that though the Integrated Purchase Committee has not specifically discussed the reasoning behind the Bid Evaluation Committee rejecting the complaint of the petitioner about respondent No. 3's bid not being responsive, it has nevertheless accepted the reasoning of the Bid Evaluation Committee. This affirmation of the reasoning of the Bid Evaluation Committee by the Integrated Purchase Committee comprising of senior Government officials is justified and does not want interference under Article 226 of the Constitution of India.

21. We also hold that the dictum laid down by the Hon'ble Supreme Court in the case of Tata Cellular v. Union of India (1994) 6 SCC 651 and Raunaq International Limited v. I.V.R. Construction Limited and Ors. with regard to interference by Courts in Government Contract matters is applicable in the current situation. The Hon'ble Supreme Court laid down in the above-mentioned judgments that until and unless a case of malafide is made out against the Tender Committee or the entire process is vitiated courts should not normally interfere in Government Contract matters. We agree with the plea put forward by learned Senior Counsel for Respondent No. 3, Mr. Tripathi that in the instant case, two constructions of the ITB are possible and in the absence of establishing that the construction put forth by the Respondent No. 3 is completely arbitrary, perverse or malafide, it is not open to the writ court to interfere or prefer a construction different to the one adopted by Respondent Nos.1 and 2. The dictum laid down by the Hon'ble Supreme Court in the case of Reliance Airport Developers Pvt. Ltd. v. Airports Authority of India and Ors. , with regard to judicial review is also squarely applicable in the present case. The Hon'ble Supreme Court held in this case that where two views are possible and one view has been taken then in the absence of mala fide, preference towards one view cannot be a ground for judicial review. Since in the present case, there is no reasonable ground which warrants our interference, we reject the plea to set aside the impugned decision dated 27th October 2006 by Respondents No. 1 and 2 or direct Respondents 1 and 2 to cancel the bid of Respondent No. 3

22. Accordingly, this writ petition is dismissed.