Triveni Engineering & Industries ... vs Delhi Jal Board & Anr.
2008 Latest Caselaw 2286 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         W.P.(C) NO. 7012/2008

                                Reserved on:       3rd November , 2008
                                                      th
                                Date of Decision : 18 December, 2008



TRIVENI ENGINEERING & INDUSTRIES LTD.          .....Petitioner
             Through   Mr. Jayant Bhushan, Sr. Advocate with
                       Mr. Ajay Kumar Tandon,
                       Ms. Gunjan, Mr. Varun Singh, Advocates.
             Versus

DELHI JAL BOARD & ANR.                         .....Respondents
             Through   Mr. Suresh Tripathy, Advocate for R 1.
                       Mr. Aman Lekhi, Sr. Advocate with
                       Mr.Ajay Digpal, Advocate for R 2.

CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE MANMOHAN

1.     Whether the Reporters of local papers
       may be allowed to see the judgment?              Yes

2.     To be referred to the Reporter or not?           Yes

3.     Whether the judgment should be
       reported in the Digest?                          Yes

%                               JUDG MENT


WP(C) No.7012/2008                                                  page 1 of 24
 MUKUL MUDGAL, J.

1. The present petition arises against the impugned actions, orders and

communications of Respondent no.1 including the impugned communications

dated 28th August 2008 and 16th September 2008 wherein the Petitioners bid in

respect of the tender for the design, construction, supply, installation, testing &

commissioning successfully, 1 year Defect Liability Period (DLP) and 3 years

Operation and Maintenance (O&M) of 1 Million Gallon per Day (MGD)

Water Treatment Plant for Common Wealth Games Village near Akshardham

Temple (hereinafter referred to as the "Tender for the 1 MGDWTP for CWG")

was rejected.

2. The brief facts of the case which led to the present writ petition as per

the petitioner are as follows:-

(a) The Petitioner is a company incorporated under the provisions of the

Companies Act, 1956 having its office at 8th Floor, Express Trade Towers 15-

16, Sector 16-A, NOIDA.

(b)    The Respondent no.1 Delhi Jal Board issued a brief Press Notification

WP(C) No.7012/2008                                                      page 2 of 24

inviting bid applications from interested bidders for the "design, construction,

supply, installation, testing and commissioning successfully, 1 year Defect

Liability Period and 3 year operation and maintenance of 1 Million Gallon per

Day Water Treatment Plant for Common Wealth Games Village near

Akshardham Temple." The last date for receipt of the Bid Document was 16th

July 2008 which was later extended by Respondent No.1 upto 31st July 2008.

(c) As per the detailed Notification Inviting Tender (NIT) being NIT No.4

(2008-09) the work was to be carried out on a design, build and operate (DBO)

basis as per conceptual scheme, design parameters, drawing and specifications

of tender documents/DJB to be all complete. It was further clarified that the

completion period (12+3 months trial run=15 months) indicated was for Civil

and E&M construction complete.

(d) The NIT also provided for minimum eligibility criteria in respect of

financial parameters and project experience to be fulfilled by the bidders. It

was further mentioned in the NIT that complete eligibility criteria, other terms

and conditions/ requirements for qualification and bid conditions were

WP(C) No.7012/2008 page 3 of 24 mentioned in the "Bid Document".

(e) On 31st July 2008, the Petitioner submitted its bid along with all

annexures, including the performance certificates to fulfill the conditions of

clause 2.1.5.1 of the Tender Documents.

(f) In response to the NIT, three bids were submitted by three parties,

including the Petitioner. The technical proposals were opened in presence of

the representatives of the bidders. The bid of one of the bidders was

disqualified on technical grounds leaving only two bidders, the Petitioner and

Respondent no.2, for opening of the final price bid.

(g) Subsequent to the opening of the technical proposal, on 18th August

2008, the Respondent no.1 called the Petitioner for a meeting. The Petitioner

attended the meeting at the office of the Respondent no.1 wherein the

Respondent no.1 sought certain clarifications.

3. One of the clarifications sought by Respondent No. 1 was "experience

details not clear" and it required the Petitioner to cite specific project

references against each of the experience requirement in the said clause

WP(C) No.7012/2008 page 4 of 24 B.1(i)(a) to (e) of the Tender Documents. Another query raised by Respondent

No. 1 was "details of the project, Water pre-treatment plant for Simhadri

Thermal Power Plant not given in certificate" and it required the Petitioner to

obtain the required certificate from the client giving all required details like

capacity per day treated, water quality produced, start and commissioning date,

etc. for testing eligibility of the project.

4. The Petitioner by the letter dated 18.08.2008, provided the clarifications

to the said queries raised by Respondent No. 1. By the letter dated 28 th August

2008, sent by fax to the Petitioner, the Respondent no.1 rejected the bid of the

Petitioner on the grounds of not meeting the eligibility criteria. The

Respondent no.1 opened the price bid of the sole remaining bidder, the

Respondent no.2 M/s VA Tech Wabag Ltd. The said letter dated 28th August

2008 rejecting the petitioner's bid reads as follows:-

WP(C) No.7012/2008 page 5 of 24 "Sub.:- Design, Construction, supply Installation, testing and commissioning successfully, 1 year DLP and 3 year O&M of MGD WTP for Commonwealth Games near Akshardham Temple on DBO basis. (NIT No. 4(2008-09)).

Sir, With reference to your bid for the above mentioned project, received on 31.07.2008 & subsequent clarification dated 18.08.2008. It is to intimate that your bid has been rejected on the grounds of not meeting the eligibility criteria. This is for your kind information please."

5. The Petitioner was informed that the bid of the Petitioner was rejected as

it did not fulfill the minimum experience criteria as mentioned under clause

2.1.5.1 B.1 (i) (a) of the Tender Documents including the time stipulation as to

the work having been executed in the last 7 years and that the work should

preferably have started after 30.05.1998. It was further informed to the

Petitioner that with respect to the said clause 2.1.5.1 B.1 (i) (a) the experience

of Petitioner for 'Water Treatment Plant of capacity 14.4 MLD commissioned

in Sikandra, Agra under World Bank Unit, UP Jal Nigam' was considered and

its experience for the Simhadri Project was not considered.

6. The learned Counsel for the Petitioner contended as follows:-

WP(C) No.7012/2008                                                         page 6 of 24
 (a)    Despite repeated requests and reminders of the Petitioner, no reason,

whatsoever, has been given by Respondent No. 1 as to why and how the

Petitioner did not meet the eligibility criteria. The Petitioner not only fulfills

all the eligibility criteria of the Tender Documents but after opening of the

technical bid it has also satisfactorily clarified all the queries raised by

Respondent No. 1 and submitted all relevant documents to the satisfaction of

Respondent No. 1, and as such the petitioner was fully qualified to be

considered for opening of final price bid.

(b) The Petitioner, immediately after the rejection of its technical bid, made

representations to Respondent No. 1 that the bid of the Petitioner was fully in

conformity with the eligibility criteria laid down for the work. The petitioner

further pointed out that the bid of the sole remaining bidder i.e. Respondent

No.2 was not conforming to the eligibility criteria even though Respondent

No. 2 was considered as a qualified party by relaxing/diluting the eligibility

criteria. The petitioner also pointed out that opening the price bid with only

one bidder would neither be in the interest of Respondent No. 1 nor in the

WP(C) No.7012/2008 page 7 of 24 larger public interest.

(c) To have a competitive price, the Respondent No. 1 ought to have

ensured enough number of bids at the time of opening of price bid. By

deliberately rejecting the bid of the Petitioner, Respondent No. 1 had not only

acted detrimental to its interest but also in a manner which was detrimental to

the larger public interest.

(d) The Petitioner had submitted the bid in accordance with the tender pre-

condition alongwith supporting documents, as also further clarifications along

with more supporting documents, including the Experience Certificate of the

Petitioner regarding its Simhadri Project.

(e) Respondent No. 1 ought to have concluded that the bid of the Petitioner

fully satisfied all the minimum eligibility criteria and ought not to have

rejected the bid of the Petitioner, ignoring the documents on record.

7. The learned Counsel for the Respondent contended as follows:-

(a)    On 18.08.2008, the Petitioner responded to the tender notice and

submitted his bid.        The Petitioner in support of the financial parameter

WP(C) No.7012/2008                                                      page 8 of 24

submitted the audited balance sheet for the last five years of the company

alongwith net worth certificate of the Chartered Accountant. However, the

certificates submitted by the Petitioner were in respect of the combined

business activities of the Petitioner instead of the required annual turn over of

the company in respect of the construction works undertaken by it.

(b) Furthermore, the Petitioner in respect of the work experience claimed to

have executed 144 MLD WD at Agra on behalf of UP Jal Nigam and UP Jal

Nigam issued a certificate in favour of the Petitioner indicating that the plant

in question was put in operation in the year 1997 and was handed over to the

UP Jal Nigam on 24.05.1997. The work experience as stipulated in the bid was

not satisfied by the Petitioner as it was beyond the period of seven years as the

minimum eligibility criteria clearly laid down that work should have been

executed in the last seven years and preferably work should have started after

30.05.1998.

(c) Regarding the work experience in respect of the Waste/Water Lime

Softening Plant of 2 MLD the Petitioner submitted a certificate issued in its

WP(C) No.7012/2008 page 9 of 24 favour by L&T. This certificate did not say as to whether Petitioner had

designed, installed, tested and commissioned successfully the entire lime

Softening Plant as per the requirement of the experience criteria.

(d) In light of the above, the Petitioner's application was liable to be rejected

for having failed to satisfy the minimum eligibility criteria. However, the

Delhi Jal Board offered another chance to the Petitioner to clarify in respect to

the shortcomings pointed out above. In the meeting held on 18.8.2008 in the

office of the Chief Engineer, the Petitioner was informed of the above

shortcomings.

(e) The Petitioner attempted to clarify by way of a letter submitted on

18.08.2008. On the question of separate turnover on construction activities,

the Petitioner's letter remained silent. For work experience, Petitioner

requested the respondent to consider the project at Shimadri executed for

NTPC instead of UP Jal Nigam. In respect of the Lime Softening Plant,

Petitioner desired that instead of L&T certificate submitted earlier, certificate

issued by Chhatishgarh Steel & Power Ltd. may be considered. The

WP(C) No.7012/2008 page 10 of 24 clarification note submitted indeed had the certificate submitted by NTPC,

Shimadri and Chhatisgarh Steel and Power Ltd.

(f) The Delhi Jal Board agreed to consider the clarification submitted by the

Petitioner. But the Petitioner again failed to satisfy the tender conditions in

respect of work experience of Water Treatment Plant of 4.5 MLD and also the

certificate issued by the NTPC did not mention that the Petitioner had

designed, constructed, supplied, installed, tested and commissioned the Water

Treatment Plant in question. The certificate merely established that Petitioner

had carried out only PG test in respect of the Water Treatment Plant at

Shamidri. In fact the certificate stated as follows:-

"However, this is subject to the completion of the pending points at site like supply of main equipment, mandatory spares etc. and to liquidate all the pending issues at the earliest."

(g) It is evident even from the certificate submitted by the Petitioner that

Petitioner was not the one who executed the entire work as per the stipulation

of the bid and worse, even the main equipment and mandatory spares were yet

WP(C) No.7012/2008 page 11 of 24 to be supplied by the Petitioner. Eligibility conditions were to be adhered to

since they were imperative in character. It was not envisaged that they were to

be relaxed under any circumstances. Delhi Jal Board keeping in view the

magnitude of the contract intended to have a contractor experienced enough

who had the occasion of handling similar work by a party having the requisite

experience. Since, the Petitioner failed to satisfy the eligibility condition on

experience, it was decided that the bid of the Petitioner deserved rejection. It

was then the Petitioner and the other bidder namely M/s. Sinomen Envirox JV

(who was also rejected) were accordingly informed of the decision rejecting

their bids.

(h) That inspite of opportunities granted to the Petitioner, the Petitioner

failed to fulfill the minimum eligibility criteria in respect of the work

experience. The requirement of the experience criteria was that bidder should

have had at least the experience of designing, construction, supply,

installation, testing and commissioning of at least one Treatment Plant (Water)

executed in the last seven years.

WP(C) No.7012/2008                                                   page 12 of 24
 (i)    The contention that the price bid of the Petitioner was lower than the

Respondent No. 2 was of no consequence since the price bid of the Petitioner

was to be considered only after the eligibility bar was crossed and not

otherwise. The alleged difference of the price between the Petitioner and the

Respondent No. 2 was, therefore, of no consequence.

8. During the course of the proceeding we had asked the counsel for the

Respondent to produce the Govt. file of Delhi Jal Board relating to the tender

of 1 MGD WTP at Common Wealth Games Village near Akshardam Temple.

The noting in the file clearly specifies that M/s. Triveni Engineering and

Industries Ltd. satisfies the eligibility conditions (b) to (e) of clause 2.1.5.1 B.1

(i). However, the firm does not have relevant experience against (a) of clause

2.1.5.1 B.1 (i) and hence, cannot be considered eligible. In view of the above,

we are confining our findings as to whether the petitioner fulfilled the

minimum experience criteria as mentioned under clause 2.1.5.1 B.1 (i) (a) of

the tender documents or not.

9. The minimum eligibility criteria in respect of project experience to be

WP(C) No.7012/2008 page 13 of 24 fulfilled by the applicants, as indicated in Clause 2.1.5.1 B.1 (i) (a) of the

tender documents which is the center of controversy in the present petition

reads as under :-

"i) The bidder should have experience of Engineering procurement construction (EPC)/ Design- Build/Design-Build-Operate-contact including design, construction, supply, installation, testing & commissioning successfully of:

(a) At least one water treatment plant of minimum capacity 4.5 MLD, producing water for potable use. The water treatment plant should have been operating for at least one year after DLP as on 30.05.2008.

For pts. (a) to (e) above, only experience in the Employer's country will be considered for eligibility. All works as required in points (a) to (e) above should have been executed in the last 7 years. The work should preferably have started after 30.05.1998." (emphasis supplied)

10. The main grievance of the Petitioner is that the Respondent No. 1 failed

to give sufficient reasons as to why and how the Petitioner did not meet the

eligibility criteria of the tender as it had satisfactorily clarified all the queries

raised by Respondent No.1 and submitted all the relevant documents in

WP(C) No.7012/2008 page 14 of 24 consonance with the tender conditions. In our view, this contention of the

Petitioner cannot be sustained as the facts and circumstances of the case

clearly show that the petitioner has failed to fulfill the mandatory requirement

in respect of project experience as laid down in the tender conditions to

participate further in the bid process.

11. The essential pre condition of the minimum eligibility requirement to

participate in the tender was with regard to the nature of the project work

experience. The Petitioner claimed to have executed 144 MLD WTP at Agra

on behalf of UP Jal Nigam who issued a certificate in favour of the petitioner

whereby it was indicated that the plant in question was put in operation in the

year 1997 and was handed over to the UP Jal Nigam on 24th May, 1997. The

work experience stipulated in the bid clearly stipulated that the bidder was

required to have the experience of Engineering Procurement Construction

(EPC)/design/design build/design build operate contract including design,

construction, supply, installation, testing of the water treatment project

executed in the last seven years and wherein work should have preferably

WP(C) No.7012/2008 page 15 of 24 started after 30th May, 1998. Thus, the petitioner did not satisfy this eligibility

condition in view of the fact that UP Jal Nigam project was beyond the

prescribed period of seven years.

12. The Petitioner in respect of the Waste / Water Lime Softening Plant

submitted a certificate issued in its favour by Larsen & Toubro (L&T). This

certificate did not say that the Petitioner had designed, installed, tested and

commissioned successfully the entire lime Softening Plant as per the

requirement of the experience criteria.

13. The Petitioner at the initial stage of the bid failed to satisfy the minimum

essential eligibility criteria. However, in public interest and in view of the fact

that only two bidders were taking part in the bid process, the Respondent No.1

in consonance with the principles of natural justice and fair play offered

another chance to the Petitioner to rectify the shortcomings evident in the

documents in support of his experience related to work projects. The

petitioner attempted to clarify by way of letter dated 19th August, 2008. For

work experience in respect of the Water Treatment Plant of 4.5 MLD capacity,

WP(C) No.7012/2008 page 16 of 24 the petitioner requested to consider the project at Simhadri executed for NTPC

instead of UP Jal Nigam.

14. The petitioner submitted the certificate dated 24th March, 2003 issued by

NTPC which is reproduced herein below:-

"Sub.: P.G. Test of Water-treatment Plant-Reg.

Ref.:- (i) LOA No. CS-3250-137-9-SU-LOA 3721 dated 29.01.1999

(ii) LOA No. CS-3250-137-9-ER-LOA 3722 dated 29.01.1999

Dear Sir, This is to inform you that the P.G. Test conducted for the above package and subsequent submission of the documents it is found that there is no short fall in equipment performance as compared to the guaranteed parameters. However, this is subject to the completion of the pending points at site like supply of main equipment, mandatory spares etc. and to liquidate all the pending issues at the earliest."

(emphasis supplied)

The above certificate submitted by the petitioner dated 24th March, 2003,

issued by the NTPC in respect of the work experience of the Water Treatment

Plant of 4.5 MLD capacity, in our view, does not establish that the Petitioner

had successfully completed the said Water Treatment Plant as the supply of

WP(C) No.7012/2008 page 17 of 24 main equipment and mandatory spares still remained to be done.

15. The petitioner in support of the certificate of work experience issued by

NTPC on 24th March, 2003 submitted another certificate dated 12th April, 2003

which is reproduced as under:-

"This is to confirm that the PG Test Certificate issued by us on 24.03.2003 is for the complete Water Treatment Plant as per the following LOAs awarded to M/s. Triveni Engineering & Industries Ltd.

i) LOA No. CS-3520-137-9-SU-LOA 3721 Dtd. 29.01.1999.

ii) LOA No. CS-3520-137-9-ER-LOA 3722 Dtd. 29.01.1999 This job involves the following:-

• Main Water Treatment System (Capacity - 800 M³/Hr.) • Potable Water Treatment System (Capacity - 600 M³/Hr.) • Chlorination System (Capacity - 5 Kg./Hr.)

This certificate is issued on the request of M/s. Triveni Engineering & Industries Ltd. for their experience credentials required for their ongoing bids' negotiations."

th However, the certificate dated 12 April, 2003 does not in any way

WP(C) No.7012/2008 page 18 of 24 prove that the petitioner has fulfilled the mandatory requirement of project

work experience as stipulated in the tender documents. This is also evident

from the fact that as rightly pointed by the Respondent without any effective

rebuttal that even upon further clarification that the certificate submitted by the

petitioner on 12th April, 2003, as issued by the NTPC, Simhadri merely stated

that the petitioner did not satisfy fully the mandatory requirements of the

tender process which were the designing, constructing, supplying, installing,

testing and commissioning the Water Treatment Plant. It is thus evident that

the Petitioner had neither designed the entire plant nor had fully supplied even

the full machinery which does not in any way fulfill the minimum essential

criteria to participate in the next stage of the tender process as stipulated in

Clause 2.1.5.1 B.1 (i) (a) of the tender documents.

16. The petitioner in support of the above certificate issued by the NTPC,

Shimadri enclosed a bank guarantee dated 20th February 2004 to strengthen his

argument that he had discharged his liability fully with regard to the Water

WP(C) No.7012/2008 page 19 of 24 Treatment Plant and the contract was completed fully by the Petitioner. This

document was disputed as never having been received by the Respondent.

However, even if taking the said document into consideration we do not think

that this document establishes that in any way that the petitioner had designed,

constructed, supplied, tested, installed and commissioned the Water Treatment

Plant as per the essential conditions laid down in the tender documents.

17. The Hon'ble Supreme Court in the case of Laxmi Sales Corpn. Vs

Bolangir Trading Co. & Ors. 2005(3)SCC 157 held that preconditions or

qualifications for tenders as stipulated by the tender documents are mandatory

in character. After a perusal of the facts and circumstances of the case, we are

of the view that the Petitioner failed to fulfill the pre-conditions in the tender

documents. The eligibility condition of work experience which was a

mandatory condition of the tender bid being imperative in character was not

fulfilled by the Petitioner initially and even after being given a second chance

by the Respondent No. 1. Thus, the bid of the Petitioner was rightly rejected

WP(C) No.7012/2008 page 20 of 24 by the Respondent No. 1.

18. The contention of the Petitioner that it was in the interest of DJB and the

larger public interest that the prices should be competitive which can only

happen if there is enough competition in the final price bid. The Respondent

No. 1 in public interest and in consonance with the principles of natural

justice had rightly given a second chance to the Petitioner to fulfill the

mandatory conditions stipulated in the tender documents. The Petitioner again

failed to fulfill the essential eligibility criteria with regard to the work

experience leading to the rejection of the bid by Respondent No.1 and the

liability of such failure on part of the Petitioner cannot be incurred by the

Respondent No.1. The Respondent No.1 had also rejected the bid of the other

bidder namely M/s. Sinomen Envirox JV alongwith the Petitioner. In this

view of the matter, the conduct of the Respondent No.1 cannot be termed as

malafide in any manner.

WP(C) No.7012/2008 page 21 of 24

19. The petitioner through his representation dated 1st September 2008 has

also contended that the bid of the sole remaining bidder i.e. respondent No. 2

was not in conformity with the eligibility criteria even though the respondent

No. 2 was considered as qualified party by relaxing the eligibility criteria.

However, the matter received attention of the Sub-Technical Committee

consisting of four Chief Engineers on 3rd September 2008. In our view, it was

rightly noticed by the appropriate committee that the complaint of the

petitioner on the lack of experience of the respondent No. 2 was meritless

since the said respondent had the requisite experience on Lime Softening Plant

and therefore, we do not deem it necessary to go into such findings. Further,

the plea that the price bid of the petitioner was lower than the respondent No. 2

is of no consequence since the price bid of the petitioner was never opened as

it needs to be considered only after the minimum eligibility conditions as laid

down in the tender documents are fulfilled and not otherwise. We also do not

deem it necessary to go into the plea of the petitioner that the price of the

successful bidder should be brought at par with the price of the petitioner, as in

WP(C) No.7012/2008 page 22 of 24 our view this plea of the petitioner does not merit any attention with regard to

the facts and circumstances of the present case which indicate that the

petitioner's bid was not responsive.

20. The petitioner, therefore, in our view failed to fulfill the mandatory

minimum eligibility criteria in respect of the work experience which required

that the bidder should have had the experience of designing, construction,

supply, installation, testing and commissioning of at least one Water

Treatment Plant. Consequently, in view of the above findings, we dismiss the

writ petition alongwith all pending applications. The writ petition is disposed

of accordingly.

(MUKUL MUDGAL) JUDGE

(MANMOHAN) JUDGE th 18 December, 2008

WP(C) No.7012/2008 page 23 of 24 dr/s/rkb

WP(C) No.7012/2008 page 24 of 24