Delhi High Court
Navinya Buildcon Private Limited vs Union Of India & Others on 8 April, 2009
Author: Siddharth Mridul
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ WRIT PETITION (CIVIL) 7181/2009
Reserved on : 5th March, 2009
Date of Decision : 8th April, 2009
NAVINYA BUILDCON PRIVATE LIMITED ...... Petitioner
Through : Mr. Mukul Rohtagi with Mr. Rajiv
Nayar, Sr. Advocates with
Ms. Meghna Mishra, Mr. R.N.
Karanjawal and Ms. Lakshmi
Ramchandra, Advs.
versus
UNION OF INDIA & OTHERS ...... Respondents
Through : Mr. Gaurav Duggal, Adv. for UOI.
Mr. Prag P. Tripathi with
Mr. Sandeep Sethi, Sr. Advocates
with Ms. Arti, Ms. Shambhu Sharan
& Ms. Udisha Sahay, Advs.
% CORAM:
HON'BLE MR. JUSTICE MADAN B. LOKUR
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL
1. Whether 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 YES
the Digest?
JUDGMENT
SIDDHARTH MRIDUL, J.
1. The Petitioner has filed the instant writ petition, inter alia,
seeking writ of certiorari for quashing the letter dated 20th February,
2009 vide which the National Highways Authority of India (NHAI),
Respondent No.3 herein have disqualified the Petitioner, and also
seeking writ of mandamus to restrain the NHAI from inviting the
second round of bids from the other bidders.
2. The brief facts as are relevant for determination of the present
writ petition are as follows.
(a) The NHAI decided to undertake development of six laning
of Kishangarh-Ajmer-Beawar section of National Highway
No.8 from Km. 364.125 to Km. 58.245 (length 93.56 Km.)
in the State of Rajasthan under NHDP, Phase-III (Project)
through public-private/ Public Sector Partnership (PPP) on
Design, Built, Finance, Operate and Transfer (DBFOT)
basis and decided to carry out the bidding process for
selection of the bidder to whom the Project may be
awarded.
(b) The process of selection of bidders comprised of the
following two stages:-
(i) Pre-qualification of interested applicants as per
parameters laid down in the Request For
Qualification (RFQ). This was the qualification stage.
(ii) The applicants declared successful at RFQ stage,
subject to a maximum of six would be allowed to
participate in the second stage of bidding, namely
bid stage i.e. Request For Proposal (RFP).
(c) In March, 2008 the NHAI invited applications for above
Project through RFQ published in newspaper/website with
an intention to pre-qualify and shortlist the applicants as
per the provisions of the RFQ document. The due date for
submission of the RFQ was 8th May, 2008. The said date
for submission was thereafter extended to 29th May, 2008
and subsequently to 19th June, 2008.
(d) In response to the RFQ invitation, 23 firms, JVs,
consortiums submitted the RFQ applications by the due
date of submission. The Petitioner alongwith its
consortium partner, Atlantia S.p.A of Italy submitted the
RFQ on the due date to NHAI.
(e) The duly constituted evaluation committee of the NHAI
evaluated the applications submitted by all the 23
applicants and on the basis of evaluation, the NHAI
shortlisted the following six applicants:
Sl. No. Name of Applicant
1. Navinya-Atlantia Consortium
2. GVK-Leighton-Mitsui Consortium
3. HCC-Laing Consortium
4. Maytas-China railway 18th Bureau
(Group) Corporation Ltd.
5. IJM-Abertis-IDFC JV
6. ISOLUX-SOMA Consortium
(f) The above mentioned shortlisted applicants including the
Petitioner were duly informed by the NHAI about their
shortlisting in accordance with Clause 1.2.1 and Clause
3.5.2 of RFQ document by way of NHAI‟s letter dated
26th August, 2008 with an intimation that all the above
shortlisted applicants are eligible for participation in the
(ii) stage of bidding process subject to continuing
compliance to various provisions of the RFQ. It was clearly
stipulated in the said letter dated 26th August, 2008 that
the provisions of the RFQ would apply mutatis mutandis to
this announcement regarding shortlisting and subsequent
bidding.
(g) Subsequently, the NHAI issued RFP document to the
above shortlisted applicants with last date of submission
as 14th October, 2008, which was extended from time to
time and the last date of submission was 23rd December,
2008.
(h) On the 23rd December, 2008 the NHAI opened the bids
submitted by the parties and noticed that out of six
shortlisted applicants the following four bidders had
submitted their bids:-
1. M/s ISOLUX-SOMA Consortium
2. M/s HCC-Laning Consortium
3. M/s Mytas-China Railway 18th Bureau (Group)
Corporation Limited.
4. M/s Navinya Buildcon Pvt. Limited-Atlantia S.p.A.
Consortium.
(i) Here it is relevant to note that both the RFQ as well as the
RFP contained a Clause pertaining to "Conflict of
Interest". The RFQ document in Clause 2.2 provided for
eligibility of the applicants. Clause 2.2.1(c) defined
"Conflict of Interest" as follows:
"An applicant shall not have a conflict of interest (the
"Conflict of Interest") that affects the Bidding
Process. Any Applicant found to have a Conflict of
Interest shall be disqualified. An Applicant shall be
deemed to have a Conflict of Interest that affects the
Bidding Process, if:
(i) The Applicant, its Member or Associate (or
any constituent thereof) and any other Applicant,
its Member or Associate (or any constituent
thereof) have common controlling shareholders or
other ownership interest; provided that this
disqualification shall not apply in cases where the
direct or indirect shareholding of an Applicant, its
Member or Associate (or any shareholder thereof
having a shareholding of more than five percent of
the paid up and subscribed share capital of such
Applicant, Member or Associate, as the case may
be) in the other Applicant, its Member or
Associate, as the case may be, is less than one per
cent of the paid up and subscribed share capital
thereof; provided further that this disqualification shall
not apply to a bank, insurance company, pension found
or a public financial institution referred to in section 4A
of the Companies Act. 1956; (emphasis ours)
Or
(ii) a constituent of such Applicant is also a constituent
of another Applicant; or
(iii) such Applicant receives or has received any direct
or indirect subsidy from any other Applicant, its
Member or Associate or has provided any such subsidy
to any other Applicant; or
(iv) such Applicant has the same legal representative
for purposes of this Application as any other Applicant;
Or
(v) such Applicant has a relationship with another
Applicant, directly or through common third
party/parties, that puts either or both of them in a
position to have access to each others‟ information
about, or to influence the Application of either or each
other; or
(vi) such Applicant has participated as a consultant to
the Authority in the preparation of any documents,
design or technical specifications of the Project."
All the applicants at the RFQ stage also had to submit
before the NHAI an undertaking as prescribed in
Appendix-I to the RFQ document. In terms of the said
requirement the Petitioner submitted an undertaking
before the NHAI stating therein that the Petitioner did not
have any "Conflict of Interest" in accordance with the
above Clause 2.2.1(c) of the RFQ document.
(j) The RFP document contained a similar provision
pertaining to "Conflict of Interest" as herein below:
"2.1.14 A Bidder shall not have a conflict of
interest (the "Conflict of Interest") that affects
the Bidding Process. Any Bidder found to have a
Conflict of interest shall be disqualified. In the
event of disqualification, the Authority shall forfeit and
appropriate the Bid Security or Performance Security,
as the case may be, as mutually agreed genuine pre-
estimated compensation and damages payable to the
Authority for, inter alia, the time, cost and effort of the
Authority, including consideration of such Bidder‟s
proposal, without prejudice to any other right or
remedy that may be available to the Authority
hereunder or otherwise. Without limiting the
generality of the above, a Bidder shall be
considered to have a Conflict of Interest that
affects the Bidding Process, if:
(i) such Bidder (or any constituent thereof) and
any other Bidder (or any constituent thereof) have
common controlling shareholders or other
ownership interest; provided that this
qualification shall not apply in cases where the
direct or indirect shareholding in a Bidder or a
constituent thereof in the other Bidder(s) (or any
of its constituents) is less than 1% of its paid up
and subscribed capital; or (emphasis ours)
(ii) a constituent of such Bidder is also a constituent of
another Bidder; or
(iii) such Bidder receives or has received any direct or
indirect subsidy from any other Bidder, or has provided
any such subsidy to any other Bidder; or
(iv) such Bidder has the same legal representative for
purposes of this Bid as any other Bidder; or
(v) such Bidder has a relationship with another Bidder,
directly or through common third parties, that puts
them, in a position to have access to each others
information about, or to influence the Bid of either or
each of the other Bidder; or
(vi) such Bidder has participated as a consultant to the
Authority in the preparation of any documents, design
or technical specifications of the Project."
All the shortlisted bidders were required in terms of the
RFP documents to submit another undertaking as
contained in Appendix 1 to the RFP document wherein the
bidder had to declare that they did not have any "Conflict
of Interest" in accordance with Clause 2.1.14 and 2.1.15 of
the RFP document. In terms of the above requirement,
even the Petitioner submitted an undertaking before the
NHAI clearly stating that it did not have any "Conflict of
Interest" as provided in Clause 2.1.14 of RFP document.
(k) In the meantime before submission of the bid the
Petitioner wrote a letter dated 8th October, 2008 to the
NHAI with regard to Clause 2.1.14 of the RFP and inter
alia pointed out that a similar clause had posed problems
in the bid for re-development of New Delhi Station in the
tenders invited by Indian Railways. It was brought to the
notice of NHAI that the Railway Land Development
Authority under the Ministry of Railways had modified the
said clause and accordingly the limit of 1% cross holding
was increased to 10%. Since the Petitioner did not receive
a response to the letter dated 8th October, 2008, a further
letter was addressed by the Petitioner to the NHAI on the
4th November, 2008. Vide this letter the Petitioner once
again pointed out to the NHAI that the issue of "Conflict of
Interest" as defined under Clause 2.1.14 of the RFP
needed to be modified. Further the Petitioner drew the
attention of NHAI that the above mentioned cross holding
could happen without the knowledge of the bidder since it
was not possible to check all such investment in all the
constituents at the time of submission of RFQ. On the 18th
November, 2008, the Petitioner wrote to NHAI further to
its letter dated 8th October, 2008 and 4th November, 2008
with regard to Clause 2.1.14 of the RFP and pointed out
that no response had been received from NHAI so far.
(l) On 28th November, 2008 NHAI wrote to the Petitioner
stating that the Petitioner‟s letter dated 18th November,
2008 and other letters on similar issues with regard to the
percentage of the common shareholding were under
consideration. In the meantime, it informed the Petitioner
that the last date of submission of RFP was the 3 rd
December, 2008 and further stated that in the meantime
the Petitioner should abide by the provisions of the RFP
document.
(m) On the submission of the RFP document the NHAI
received representations from rest of the three shortlisted
bidders M/s ISOLUX-SOMA-Consortium by way of its
letter dated 24th December, 2008, M/s Maytas-China
railway 18th Bureau (Group) Corporation Ltd. by way of
their letter dated 23rd December, 2008 and M/s HCC John
Laing by way of its letter dated 26th December, 2008,
representing to the NHAI that the consortium led by the
Petitioner had M/s Atlantia as one of its members and
consortium led by IDFC as M/s Abertis as a member. It
further pointed out that Abertis being part of the
consortium led by IDFC had 6.68% shareholding in
Atlantia which was part of consortium led by the
Petitioner. Having disclosed the above facts the three
bidders requested that the bid submitted by the
consortium led by the Petitioner and IDFC should be
rejected and they may be disqualified from bidding.
(n) Before the NHAI could verify from the Petitioner the
correctness of the above allegations made by the above
three bidders, the Petitioner suo moto by its letter dated
8th January, 2009 addressed to the NHAI clarified the
following:-
"i. That they were aware of the representations made
by the competitors regarding the "Conflict of Interest"
and the factum of questioning the participation of the
Petitioner.
ii. Till the time the Petitioner was shortlisted to
submit the proposal, they were not aware of the details
of other applicants.
iii. That they had made representations for
modification of the "Conflict of Interest" Clause in the
RFP document to avoid future complication in the
Bidding Process.
iv. That the Petitioner had received the response from
Respondent No.3 wherein it was made clear that the
Petitioner should continue to abide by the Clauses of
RFP document and that the violation of the clause shall
be dealt with as per provisions of RFP document.
v. That the Petitioner had no "Conflict of Interest"
with other three Bidders who have submitted their
bids."
(o) The Petitioner was orally informed in the meeting between
the Chairman of NHAI and the representative of the
Petitioner company held on 23rd February, 2009 that the
Petitioner‟s bid was rejected. In the meantime by the
impugned letter dated 20th February, 2009 addressed to
the shortlisted bidders NHAI informed the shortlisted
bidders that it had decided not to accept the bid of the
Petitioner who had quoted the highest price due to non-
adherence of the requirements of the RFP. NHAI further,
in terms of Clause 3.3.3 of the RFP, requested the said
bidders to match the bid of the Petitioner. The NHAI in the
said letter stated that all the bids which will be received in
the "second round of bidding" would be opened at 1130
Hours on the 27th February, 2009 in the presence of the
bidders who choose to attend.
3. Mr. Mukul Rohtagi, learned senior advocate appearing on behalf
of the Petitioner made the following submissions. His first submission
was that the condition with regard to the "Conflict of Interest" had
been waived by the NHAI, since the Petitioner had already been
shortlisted for the second stage. The second submission was that the
conditions stipulated in the RFQ and the RFP are not mandatory and
that the same should be read down so as to be read pragmatically.
Mr. Rohtagi‟s third submission was that the Petitioner at the time of
applying for the request for qualification was not aware of the fact
that, Abertis which held 6.68% share in Atlantia, the Petitioner‟s
partner, was one of the members of the consortium that had also
applied in response to the RFQ. Further, it was contended by the
Petitioner that the principles of natural justice had not been followed
by the NHAI, inasmuch as, the Petitioner had not been informed of its
disqualification prior to the remaining bidders being called to
participate in the second round of bidding. The last submission made
on behalf of the Petitioner was that since the consortium of which
Abertis was a constituent did not participate in the second stage of
bidding and did not submit its financial bid, therefore, the Petitioner
consortium did not incur any disqualification at the stage of the RFP.
4. On the other hand it was urged on behalf of the NHAI by
Mr. Prag P. Tripathi, learned Additional Solicitor General, that the
Petitioner had furnished an undertaking alongwith the RFQ to the
effect that the Petitioner did not suffer from any conflict of interest
inviting disqualification, and since the NHAI had proceeded on the
basis of that undertaking furnished on behalf of the Petitioner, there
was no question of there being any waiver. It was next urged on
behalf of the NHAI, that the Supreme Court had clearly laid down
that, the clauses of the terms and conditions of a tender have to be
read in a pedantic manner and cannot be read down so as to be read
pragmatically, as was sought to be urged by the Petitioner. It was
next contended on behalf of the NHAI that even after the Petitioner
consortium and the consortium of which Abertis was a constituent
were shortlisted after the first stage, at no point of time did the
Petitioner, as required by the terms and conditions of tender, inform
the NHAI that it had incurred disqualification resulting out of the
share holding of Abertis in Atlantia, the consortium partner of the
Petitioner. It was therefore urged on behalf of the NHAI that the
erroneous undertaking furnished by the Petitioner amounted to a
material misrepresentation that rendered it liable for disqualification.
It was lastly urged on behalf of the NHAI that, upon coming to know
of the disqualification incurred by the Petitioner from the
representations of the other bidders, before it could call upon the
Petitioner to clarify the position, the Petitioner itself had vide its
communication dated 8th January, 2008 admitted that Abertis had a
share holding in Atlantia, a constituent of the Petitioner consortium
and that, therefore, there was no question of violation of the
principles of natural justice in the NHAI disqualifying the Petitioner.
5. Before we come to the merits of the rival submissions made on
behalf of the parties, it would be necessary and relevant to extract
some of the other relevant clauses of the RFQ and the RFP:
APPENDIX I
Letter Comprising the Application for Pre-Qualification
(Refer Clause 2.13.2)
Dated:
To,
Mr S K Nirmal
General Manager BOT (II) A
National Highways Authority of India
G-5&G-6, Sector 10, Dwarka
New Delhi - 110 075
Sub: Application for pre-qualification for ***** Project.
Dear Sir,
With reference to your RFQ document dated *****, I/we,
having examined the RFQ document and understood its
contents, hereby submit my/our Application for Qualification
for the aforesaid project. The Application is unconditional and
unqualified.
2 All information provided in the Application and in the
Appendices and Annexures is true and correct and all
documents accompanying such Application are true
copies of their respective originals.
3 This statement is made for the express purpose of
qualifying as a Bidder for the development,
construction, operation and maintenance of the
aforesaid Project.
4 I/ We shall make available to the Authority any
additional information it may find necessary or require
to supplement or authenticate the Qualification
statement.
5 I/ We acknowledge the right of the Authority to reject
our Application without assigning any reason or
otherwise and hereby waive our right to challenge the
same on any account whatsoever.
6. We certify that in the last three years, we/ any of the
Consortium Members have neither failed to perform on
any contract, as evidenced by imposition of a penalty or
a judicial pronouncement or arbitration award, nor been
expelled from any project or contract nor have had any
contract terminated for breach on our part.
7. I/We declare that:
(a) I/We have examined and have no reservations to
the RFQ document, including any Addendum
issued by the Authority.
(b) I/ We do not have any conflict of interest in
accordance with Clauses 2.2.1(c) and
2.2.1(d) of the RFO document; and (emphasis
ours)
(c) I/ We have not directly or indirectly or through
an agent engaged or indulged in any corrupt
practice, fraudulent practice, coercive practice,
undesirable practice or restrictive practice, as
defined in Clause 4.3 of the RFQ document, in
respect of any tender or request for proposal
issued by or any agreement entered into with the
Authority or any other public sector enterprise or
any government, Central or State; and
(d) I/ We hereby certify that we have taken steps to
ensure that in conformity with the provisions of
Clause 4 of the RFQ document, no person acting
for us or on our behalf has engaged or will
engage in any corrupt practice, fraudulent
practice, coercive practice, undesirable practice
or restrictive practice.
8. I/ We understand that you may cancel the Bidding
Process at any time and that you are neither bound to
accept any Application that you may receive nor to
invite the Applicants to Bid for the Project, without
incurring any liability to the Applicants, in accordance
with Clause 2.17.6 of the RFQ document.
9. I/ We believe that we/ our Consortium/ proposed
Consortium satisfy(ies) the Net Worth criteria and
meet(s) the requirements as specified in the RFQ
document and are/ is qualified to submit a Bid in
accordance with the guidelines for qualification of
bidders seeking to acquire stakes in Public Sector
Enterprises through the process of disinvestment issued
by the GOI vide Department of Disinvestment OM No.
6/4/2001-DD-II dated 13th July, 2001 which guidelines
apply mutatis mutandis to the Bidding Process.
10. I/ We declare that we/ any Member of the Consortium,
are/ is not a Member of a/ any other Consortium
applying for pre-qualification.
11. I/ We certify that in regard to matters other than
security and integrity of the country, we have not been
convicted by a Court of Law or indicted or adverse
orders passed by a regulatory authority which could
cast a doubt on our ability to undertake the Project or
which relates to a grave offence that outrages the moral
sense of the community.
12. I/ We further certify that in regard to matters relating to
security and integrity of the country, we have not been
charge-sheeted by any agency of the Government or
convicted by a Court of Law for any offence committed
by us or by any of our Associates.
13. I/ We further certify that no investigation by a
regulatory authority is pending either against us or
against our Associates or against our CEO or any of our
Directors/ Managers/ employees.
14. I/ We further certify that we are not disqualified in
terms of the additional criteria specified by the
Department of Disinvestment in their OM No.6/4/2001-
DD-II dated July 13, 2001, a copy of which forms part of
the RFQ at Appendix-IV thereof.
15. I/ We undertake that in case due to any change in
facts or circumstances during the Bidding Process,
we are attracted by the provisions of
disqualification in terms of the guidelines referred
to above, we shall intimate the Authority of the
same immediately. (emphasis ours)
16. The Statement of Legal Capacity as per format provided
at Annex-V in Appendix-I of the RFQ document, and duly
signed, is enclosed.
17. I/ We understand that the selected Bidder shall either be
an existing Company incorporated under the Indian
Companies Act, 1956, or shall incorporate itself as such
prior to execution of the Concession Agreement.
18. I/ We, hereby irrevocably waive any right which we may
have at any stage at law or howsoever otherwise arising
to challenge or question any decision taken by the
Authority in connection with the selection of Applicants,
selection of the Bidder, or in connection with the
selection/ Bidding Process itself, in respect of the above
mentioned Project and the terms and implementation
thereof.
19. I/we agree and undertake to abide by all the terms
and conditions of the RFQ document. (emphasis
ours)
In witness thereof, I/We submit this application under and in
accordance with the terms of the RFQ document.
Yours faithfully,
Date: (Signature of the Authorised Signatory)
Place: (Name and designation of the Authorised Signatory)
Name and seal of the Applicant/ Lead Firm
Note: Paragraph in square parenthesis may be omitted, if not
applicable, or modified as necessary.
1.2.1 The Authority has adopted a two-stage
process (collectively referred to as the
"Bidding Process") for selection of the
Bidder for award of the Project. The first
stage (the "Qualification Stage") of the
process involved qualification of interested
parties/Consortia in accordance with the
provisions of RFQ. At the end of this stage,
the Authority shortlisted [6 (six)] suitable
pre-qualified Applicants who were eligible
for participation in the second stage of the
Bidding Process (the "Bid Stage")
comprising Request for Proposals. [GOI has
issued guidelines (see Appendix-V of
enterprise through the process of
disinvestment. These guidelines shall apply
mutatis mutandis to the Bidding Process.
The Authority shall be entitled to
disqualify an Applicant in accordance
with the aforesaid guidelines at any
stage of the Bidding Process. Applicants
must satisfy themselves that they are
qualified to bid, and should give an
undertaking to this effect in the form at
Appendix-I](emphasis ours)
1.2.2 In the Bid Stage, the aforesaid short
listed Applicants, including their
successors, (the "Bidders") are being
called upon to submit their Bids in
accordance with the Bidding Documents.
The Bid shall be valid for a period of not less
than 120 days from the date specified in
Clause .3 for submission of bids (the "Bid
Due Date"). (emphasis ours)
2.6.2 The Authority reserves the right to reject any
Bid and appropriate the Bid Security if:
(a) at any time, a material
misrepresentation is made or uncovered,
or
(b) the Bidder does not provide, within the
time specified by the Authority, the
supplemental information sought by the
Authority for evaluation of the Bid.
Such misrepresentation/improper
response shall lead to the
disqualification of the Bidder. If the
Bidder is a Consortium, then the entire
Consortium shall be
disqualified/rejected. If such
disqualification/rejection occurs after
the Bids have been opened and the
[lowest/highest] Bidder gets
disqualified/rejected, then the Authority
reserves the right to:
(i) invite the remaining Bidders to
submit Bids in accordance with
Clause 3.3.3 and 3.3.4; or
(ii) take any such measure as may be
deemed fit in the sole discretion of the
Authority, including annulment of the
Bidding Process. (emphasis ours)
2.6.3 In case it is found during the evaluation
or at any time before signing of the
Concession Agreement or after its
execution and during the period of
subsistence thereof, including the
Concession thereby granted by the
Authority, that one or more of the pre-
qualification conditions have not been
met by the Bidder or the Bidder has
made material misrepresentation or has
given any materially incorrect or false
information, the Bidder shall be
disqualified forthwith if not yet appointed
as the Concessionaire either by issue of the
LOA or entering into of the Concession
Agreement, and if the Bidder has already
been issued the LOA or has entered into the
Concession Agreement, as the case may be,
the same shall, notwithstanding anything to
the contrary contained therein or in this
RFP, be liable to be terminated, by a
communication in writing by the Authority to
the Bidder, without the Authority being
liable in any manner whatsoever to the
Bidder or Concessionaire, as the case may
be. In such an event, the Authority shall
forfeit and appropriate the Bid Security or
Performance Security, as the case may be, as
mutually agreed genuine pre-estimated
compensation and damages payable to the
Authority for, inter alia, time, cost and effort
of the Authority, without prejudice to any
other right or remedy that may be available
to the Authority.
2.6.4 The Authority reserves the right to verify
all statements, information and
documents submitted by the Bidder in
response to the RFQ, the RFP or the
Bidding Documents. Failure of the
Authority to undertake such verification
shall not relieve the Bidder of its
obligations or liabilities hereunder nor
will it affect any rights of the Authority
thereunder.
APPENDIX - I Letter comprising the Bid
(Refer Clauses 2.1.5 and 2.14)
[The Chairman Secretary, Dated:
National Highways Authority of India
G-5 & 6, Sector 10, Dwarka
New Delhi 110075***********
India
**********]
Sub: Bid for Design, Engineering, Finance, Construction,
Operation and Maintenance for Six laning of the existing
road from km 364,125 to km 58, 245 (approximately 93.56
km) on the Kishangarh-Ajmer-Beawar section of National
Highway No.8 in the State of Rajashthan on build, operate
and transfer ("BOT") under NHDP Phase-III on Design, Build,
Finance, Operate and Transfer basis****** Project
Dear Sir,
With reference to your RFP document dated *****, I/we,
having examined the Bidding Documents and understood
their contents, hereby submit my/our Bid for the aforesaid
Project. The Bid is unconditional and unqualified.
2. All information provided in the Bid and in the
Appendices is true and correct.
3. This statement is made for the express purpose of
qualifying as a Bidder for the [development,
construction, operation and maintenance] of the
aforesaid Project.
4. I/We shall make available to the Authority any additional
information it may find necessary or require to
supplement or authenticate the Bid.
5. I/We acknowledge the right of the Authority to reject
our Bid without assigning any reason or otherwise and
hereby waive our right to challenge the same on any
account whatsoever.
6. We certify that in the last three years, we/any of the
Consortium Members have neither failed to perform on
any contract, as evidenced by imposition of a penalty or
a judicial pronouncement or arbitration award, nor been
expelled from any project or contract nor have had any
contract terminated for breach on our part.
7. I/We declare that:
(a) I/We have examined and have no
reservations to the Bidding Documents,
including any Addendum issued by the
Authority.
(b) I/We do not have any conflict of
interest in accordance with Clauses
2.1.14 and 2.1.15 of the RFP
document;
(c) I/We have not directly or indirectly or
through an agent engaged or indulged in
any corrupt practice, fraudulent practice,
coercive practive, undireable practice or
restrictive practice, as defined in Clause
4.3 of the RP document, in respect of any
tender or request for proposal issued by or
any agreement entered into with the
Authority or any other public sector
enterprise or any government, Central or
State; and
(d) I/We hereby certify that we have taken
steps to ensure that in conformity with the
provisions of Clause 4 of the RFP, no
person acting for us or on our behalf has
engaged or will engage in any corrupt
practice, fraudulent practice, coercive
practice, undesirable practice or
restrictive practice.
8. I/We understand that you may cancel the Bidding
Process at any time and that you are neither bound to
accept any Bid that you may receive nor to invite the
Bidders to Bid for the Project, without incurring any
liability to the Bidders, in accordance with Clause 2.6 of
the RFP document.
9. I/ We believe that we/ our Consortium/ proposed
Consortium satisfy(ies) the Net Worth criteria and
meet(s) the requirements as specified in the RFQ
document and are/ is qualified to submit a Bid in
accordance with the [guidelines for qualification of
bidders seeking to acquire stakes in Public Sector
Enterprises through the process of disinvestment issued
by the GOI vide Department of Disinvestment OM No.
6/4/2001-DD-II dated 13th July, 2001 which guidelines
apply mutatis mutandis to the Bidding Process].
10. I/ We declare that we/ any Member of the Consortium,
are/ is not a Member of a/ any other Consortium
submitting a Bid for the Project.
11. I/ We certify that in regard to matters other than
security and integrity of the country, we have not been
convicted by a Court of Law or indicted or adverse
orders passed by a regulatory authority which could
cast a doubt on our ability to undertake the Project or
which relates to a grave offence that outrages the moral
sense of the community.
12. I/ We further certify that in regard to matters relating to
security and integrity of the country, we have not been
charge-sheeted by any agency of the Government or
convicted by a Court of Law for any offence committed
by us or by any of our Associates.
13. I/ We further certify that no investigation by a
regulatory authority is pending either against us or
against our Associates or against our CEO or any of our
Directors/ Managers/ employees.
14. [I/ We further certify that we are not disqualified in
terms of the additional criteria specified by the
Department of Disinvestment in their OM No.6/4/2001-
DD-II dated July, 13, 2001, a copy of which forms part of
the RFP at Appendix-V thereof.]
15. I/ We undertake that in case due to any change in facts
or circumstances during the Bidding Process, we are
attracted by the provisions of disqualification in terms of
the guidelines referred to above, we shall intimate the
Authority of the same immediately.
16. [We acknowledge that our Consortium/ proposed
Consortium was pre-qualified and short-listed on the
basis of Technical Capacity and Financial Capacity of
those of its Members who will own at least 26% of the
equity of the Concessionaire and undertake that each of
such Consortium Members shall continue to hold at
least 26% of the equity of the Concessionaire until the
Commercial Operation Date of the Project is achieved
under and in accordance with the provisions of the
Concession Agreement. We further agree and
acknowledge that the aforesaid obligation shall be in
addition to the obligations contained in the Concession
Agreement in respect of Change in Ownership.]
17. [I/ We acknowledge and agree that in the event of a
change in control of an Associate whose Technical
Capacity and/ or Financial Capacity was taken into
consideration for the purposes of short-listing and pre-
qualification under and in accordance with the RFQ,
I/We shall inform the Authority forthwith along with all
relevant particulars and the Authority may, in its sole
discretion, disqualify our Consortium or withdraw the
Letter of Award, as the case may be. I/We further
acknowledge and agree that in the event such change in
control occurs after signing of the Concession
Agreement but prior to Financial Close of the Project, it
would, notwithstanding anything to the contrary
contained in the Agreement, be deemed a breach
thereof, and the Concession Agreement shall be liable to
be terminated without the Authority being liable to us in
any manner whatsoever.]
18. I/ We understand that the Selected Bidder shall either
be an existing Company incorporated under the Indian
Companies Act, 956, or shall incorporate itself as such
prior to execution of the Concession Agreement.
19. I/We hereby irrevocably waive any right which we may
have at any stage at law or howsoever otherwise arising
to challenge or question any decision taken by the
Authority in connection with the selection of the Bidder,
or in connection with the Bidding Process itself, in
respect of the above mentioned project and the terms
and implementation thereof.
20. In the event of my/ our being declared as the Selected
Bidder, I/We agree to enter into a Concession
Agreement in accordance with the draft that has been
provided to me/us prior to the Bid Due Date. We agree
not to seek any changes in the aforesaid draft and agree
to abide by the same.
21. I/We have studied all the Bidding Documents carefully
and also surveyed the [project highway and the traffic].
We understand that except to the extent as expressly
setforth in the Concession Agreement, we shall have no
claim, right or title arising out of any documents or
information provided to us by the Authority or in respect
of any matter arising out of or concerning or relating to
the Bidding Process including the award of Concession.
22. The [Premium / Grant] has been quoted by me/us after
taking into consideration all the terms and conditions
stated in the RFP, draft Concession Agreement, our own
estimates of costs [and traffic] and after a careful
assessment of the site and all the conditions that may
affect the Bid.
23. I/We offer a Bid Security of Rs. _________ (Rupees.
___________ only) to the Authority in accordance with the
RFQ Document.
24. The Bid Security in the form of a Demand Draft/ Bank
Guarantee (strike out whichever is not applicable) is
attached.
25. I/We agree and understand that the Bid is subject to the
provisions of the Bidding Documents. In no case, I/We
shall have any claim or right of whatsoever nature if the
Project/Concession is not awarded to me/us or our bid is
not opened.
26. I/We hereby submit our Bid and [offer a Premium in the
form of days (number of days in words) after COD for
start of Premium payment as share of the Authority / per
cent (in words) of the gross revenues of the Project as
share of the Authority/ require a Grant of
Rs._____________(Rupees____________________________only)
(Strike out whichever is not applicable) for undertaking
the aforesaid Project in accordance with the Bidding
Document and the Concession Agreement.
27. I/We agree to keep this offer valid for 20 (one hundred
and twenty) days from the Bid Due Date specified in the
RFP.
28. I/We agree and undertake to abide by all the terms and
conditions of the RFP document.
In witness thereof, I/we submit this Bid under and in
accordance with the terms of the RFP document.
Yours faithfully,
Date: (Signature of the Authority signatory)
Place: (Name and designation of the of the Authority signatory)
Name and seal of Bidder/Lead Firm
Note: Paragraphs in square parenthesis may be omitted, if not
applicable, or modified as necessary.
6. Before proceeding further it is germane to refer to the relevant
judicial precedent cited on behalf of the parties:
(i) In Master Marine Services (P) Ltd. vs. Metcalfe &
Hodgkinson (P) Ltd. and Another; (2005) 6 SCC 138,
the Supreme Court observed:
"It has to be borne in mind that para 11 of the tender
instructions clearly conferred a power upon CONCOR
to relax the tender conditions at any stage, if
considered necessary, for the purpose of finalizing the
contract in the overall interest of CONCOR and the
trade. Therefore, it felt that having regard to the fact
that the Chairman of the Company had a licence under
the Insurance Act, the condition regarding the holding
of such a licence by the appellant itself, in the facts and
circumstances of the case, could be relaxed. So far as
commercial considerations are concerned, it is the
specific case of CONCOR, which has not been disputed
by the first respondent, that 98 per cent of the work
under the contract is of data entry of a container, for
which the appellant had quoted Rs.3.00 against Rs.3.75
as quoted by the first respondent and for this kind of
work no licence from IRDA is required. In such
circumstances, no such public interest was involved
which warranted interference by the High Court in
exercise of its extraordinary jurisdiction under Article
226 of the Constitution while undertaking judicial
review of an administrative action relating to award of
a contract. The High Court erred in setting aside the
order of the CONCOR awarding the contract to the
appellant."
(ii) In Canara Bank vs. V.K. Awasthy; (2005) 6 SCC 321, the
Supreme Court remarked that:
"We may also state that there is yet another line of
cases as in State Bank of Patiala v. S.K. Sharma; (1996)
3 SCC 364, Rajendra Singh v. State of M.P.; (1996) 5
SCC 460 that even in relation to statutory provisions
requiring notice, a distinction is to be made between
cases where the provision is intended for individual
benefit and where a provision is intended to protect
public interest. In the former case, it can be waived
while in the case of the latter, it cannot be waived."
(iii) In Rajendra Singh vs. State of M.P. and Others; (1996)
5 SCC 460, the Supreme Court observed:
"A mandatory provision conceived in the interest of a
party can be waived by that party, whereas a
mandatory provision conceived in the interest of the
public cannot be waived by him. In other words,
wherever a complaint of violation of a mandatory
provision is made, the Court should enquire - in whose
interest is the provision conceived. If it is not conceived
in the interest of the public, question of waiver and/or
acquiescence may arise - subject, of course, to the
pleadings of the parties."
(iv) A Division Bench of this Court in Patel Engineering Ltd.
and Another vs. National Highways Authority of India
and Others; AIR 2005 Delhi 298, cited with approval the
ratio in New Horizons Ltd. vs. Union of India; (1995) 1
SCC 478, that:
"the requirement regarding experience does not mean
that the offer of the original company must be
considered because it has experience in its name
though it does not have experienced persons with it and
ignore the offer of the new company because it does not
have experience in its name though it has persons
having experience in the field. While considering the
requirement regarding experience it has to be borne in
mind that the said requirement is contained in a
document inviting offers for a commercial transaction.
The terms and conditions of such a document have to
be construed from the standpoint of a prudent
businessman......"
(v) In West Bengal State Electricity Board vs. Patel
Engineering Co. Ltd. and Others; (2001) 2 SCC 451,
the Supreme Court observed:
"23. The mistakes/errors in question, it is stated, are
unintentional and occurred due to the fault of computer
termed as "a repetitive systematic computer
typographical transmission failure". It is difficult to
accept this contention. A mistake may be unilateral or
mutual but it is always unintentional. If it is intentional
it ceases to be a mistake. Here the mistakes may be
unintentional but it was not beyond the control of
Respondents 1 to 4 to correct the same before
submission of the bid. Had they been vigilant in
checking the bid documents before their submission,
the mistakes would have been avoided. Further,
correction of such mistakes after one-and-a-half months
of opening of the bids will also be violative of clauses
24.1, 24.3 and 29.1 of the ITB.
24. The controversy in this case has arisen at the
threshold. It cannot be disputed that this is an
international competitive bidding which postulates keen
competition and high efficiency. The bidders have or
should have assistance of technical experts. The degree
of care required in such a bidding is greater than in
ordinary local bids for small works. It is essential to
maintain the sanctity and integrity of process of
tender/bid and also award of a contract. The
appellant, Respondents 1 to 4 and Respondents 10
and 11 are all bound by the ITB which should be
complied with scrupulously. In a work of this
nature and magnitude where bidders who fulfil
prequalification alone are invited to bid,
adherence to the instructions cannot be given a
go-by by branding it as a pedantic approach,
otherwise it will encourage and provide scope for
discrimination, arbitrariness and favouritism
which are totally opposed to the rule of law and
our constitutional values. The very purpose of
issuing rules/instructions is to ensure their
enforcement lest the rule of law should be a
casualty. Relaxation or waiver of a rule or
condition, unless so provided under the ITB, by
the State or its agencies (the appellant) in favour
of one bidder would create justifiable doubts in
the minds of other bidders, would impair the rule
of transparency and fairness and provide room for
manipulation to suit the whims of the State
agencies in picking and choosing a bidder for
awarding contracts as in the case of distributing
bounty or charity. In our view such approach should
always be avoided. Where power to relax or waive a
rule or a condition exists under the rules, it has to be
done strictly in compliance with the rules. We have,
therefore, no hesitation in concluding that
adherence to the ITB or rules is the best principle
to be followed, which is also in the best public
interest." (emphasis ours)
(vi) In Asia Foundation & Construction Ltd. vs. Trafalgar
House Construction (I) Ltd.; (1997) 1 SCC 738, the
Supreme Court observed:
"9. ............We are of the considered opinion that it
was not within the permissible limits of interference for
a court of law, particularly when there has been no
allegation of malice or ulterior motive and particularly
when the court has not found any mala fides or
favoritism in the grant of contract in favour of the
appellant. In Tata Cellular v. Union of India (1994) 6
SCC 651 this Court has held that:
"The duty of the court is to confine itself to the question
of legality. Its concern should be:
1. Whether a decision-making authority exceeded its
powers,
2. committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal
would have reached or,
5. abused its powers.
Therefore, it is not for the Court to determine whether
a particular policy or particular decision taken in the
fulfilment of that policy is fair. It is only concerned with
the manner in which those decisions have been taken.
The extent of the duty to act fairly will vary from case
to case. Shortly put, the grounds upon which an
administrative action is subject to control by judicial
review can be classified as under:
(i) Illegality: This means the decision-maker must
understand correctly the law that regulates his
decision-making power and must give effect to it;
(ii) Irrationality, namely, Wednesbury
unreasonableness.
(iii) Procedural impropriety.
The above are only the board grounds but it does not
rule out addition of further grounds in course of time."
10. Therefore, though the principle of judicial review
cannot be denied so far as exercise of contractual
powers of government bodies are concerned, but it is
intended to prevent arbitrariness or favouritism and it
is exercised in the larger public interest or if it is
brought to the notice of the Court that in the matter of
award of a contract power has been exercised for any
collateral purpose.............."
7. Now, coming to the rival submissions in the instant case, it is
seen that the stipulations in the RFQ provided for a "Conflict of
Interest" clause i.e. Clause 2.2.1(c), whereby it was postulated that
any applicant having a cross holding with another applicant or its
consortium partners, in excess of one per cent was disqualified from
participating in the tender. It is an admitted position that Abertis, a
constituent of the IDFC led consortium, has a 6.68% shareholding in
Atlantia, the consortium partner of the Petitioner.
8. Also applicants were to satisfy themselves that they were
qualified to bid and were required to give an undertaking in the form
of Appendix-I to the RFQ. The undertaking in compliance of Appendix-
I was furnished by the Petitioner as well as the consortium comprising
Abertis. The undertaking in Appendix-I so furnished clearly provided
to the effect that the Petitioner did not have any conflict of interest in
accordance with Clause 2.2.1(c) of the RFQ document.
9. It is further seen that in case of any change in facts or
circumstances during the Bidding Process, if any, disqualification in
terms of the guidelines was incurred, the Petitioner would intimate
the NHAI of the same immediately. It was on the basis of this
undertaking that the NHAI shortlisted the applicants as per the
provisions of the RFQ document. NHAI vide its letter of 26th August,
2008 shortlisting both the Petitioner consortium as well as the
consortium comprising the said Abertis clearly provided that
participation in the stage of bidding process was subject to continuing
compliance to various provisions of the RFQ, as well as provided that
provisions of the RFQ would apply mutatis mutandis to the
shortlisting announcement and the subsequent bidding.
10. Therefore, we find no merit in the submission on behalf of the
Petitioner that the NHAI had waived the disqualification emanating
from the cross holding by shortlisting the Petitioner for the RFP stage.
The NHAI had obviously proceeded in the qualification of the
Petitioner as well as the consortium constituted by Abertis, on the
basis of the clear and unequivocal undertakings furnished by both
these parties, in terms of Appendix-I of the RFQ document, to the
effect that there was no "Conflict of Interest" and consequently no
disqualification of the parties in terms thereof.
11. Thus, in our view there was no waiver in fact of the condition of
conflict of interest in the present case. Even otherwise, there could be
no waiver, in view of the provisions of Clause 2.6.4, which clearly
stipulated that, failure to undertake verification of all statements,
information and documents submitted by the bidder would not relieve
the bidder of its obligation or liabilities under the terms and
conditions of the tender, nor would it affect any rights of the NHAI in
this respect.
12. The submission on behalf of the Petitioner to the effect that they
did not know that Abertis, which had crossholding of more than one
per cent with the partner of the Petitioner, namely Atlantia, were to
participate in the bid is untenable and also does not hold any water.
"Conflict of Interest" and cross holding are a matter of fact and it had
nothing to do with whether the applicants participated in the tender
deliberately and/or inadvertently. In other words knowledge of the
participation was irrelevant. What was relevant was that Abertis had a
6.68% shareholding in Atlantia, the consortium partner of the
Petitioner, which fact has not been disputed by the Petitioner itself.
13. Further, it is observed that even after the shortlisting of the
applicants on the 26th August, 2008, at which point of time the
Petitioner became aware that there was "Conflict of Interest" between
its partner and the consortium of Abertis led by IDFC, the Petitioner
chose to remain quiet in this respect. It did not, as required by the
undertaking furnished by it, immediately inform the NHAI in this
behalf. Right from the time that it became so aware to the time that it
filed the RFP in late December, 2008, the Petitioner wrote letters to
the NHAI, bringing to the latter‟s notice that the "Conflict of Interest"
clause was problematic and that cross holding should be increased to
10% to attract disqualification, but there was not a whisper in any of
these letters that the Petitioner had incurred disqualification in this
regard. This conduct of the Petitioner by itself disentitles it to the
grant of discretionary relief under Article 226 of the Constitution of
India.
14. Therefore, we find no merit in the submission made by the
Petitioner to the effect that it had put NHAI to notice of the cross
holding merely on the ground of having furnished documents in this
respect at the time of applying for the tender. In so far as the
submission with regard to the NHAI not having followed the
principles of natural justice in disqualifying the Petitioner is
concerned, suffice to observe that under the provisions of the RFQ as
well as the RFP, the NHAI could forthwith disqualify an applicant or a
bidder at any time upon discovery or uncovering of any material
misrepresentation or violation of any condition stipulated by the RFQ
or the RFP. Even otherwise in the present case, before the NHAI
could seek an explanation in this respect from the Petitioner, based on
the representations of the other bidders, the Petitioner itself wrote a
letter dated 8th January, 2009 to the NHAI clarifying its stand in this
regard.
15. The Petitioner also contended that it did not suffer any
disqualification at the stage of the RFP, since the consortium led by
IDFC with Abertis as a partner did not participate in the stage of
submission of RFP. In this behalf it is observed that under the
provisions of Clause 1.2.2 of the RFP, all the shortlisted applicants
remained „bidders‟ regardless of whether they had submitted the RFP
or not.
16. Lastly, on behalf of the Petitioner, it was urged that the
stipulations contained in the tender ought to read pragmatically and
consequently read down. In this behalf it would serve us well to
remember the observations made by the Supreme Court in West
Bengal State Electricity Board vs. Patel Engineering Co.
Ltd.(Supra), where it was held that "It is essential to maintain the
sanctity and integrity of process of tender/bid and also award of a
contract......... In a work of this nature and magnitude where bidders who
fulfil prequalification alone are invited to bid, adherence to the instructions
cannot be given a go-by by branding it as a pedantic approach, otherwise it
will encourage and provide scope for discrimination, arbitrariness and
favouritism which are totally opposed to the rule of law and our
constitutional values. The very purpose of issuing rules/instructions is to
ensure their enforcement lest the rule of law should be a casualty.
Relaxation or waiver of a rule or condition, unless so provided under the
ITB, by the State or its agencies (the appellant) in favour of one bidder
would create justifiable doubts in the minds of other bidders, would impair
the rule of transparency and fairness and provide room for manipulation to
suit the whims of the State agencies in picking and choosing a bidder for
awarding contracts as in the case of distributing bounty or charity. In our
view such approach should always be avoided.......... We have, therefore, no
hesitation in concluding that adherence to the ITB or rules is the best
principle to be followed, which is also in the best public interest".
17. It is also observed that in the event of any disqualification under
the provisions of Clause 2.6.2, the NHAI had reserved the power and
authority to invite the remaining Bidders to submit bids in accordance
with Clause 3.3.3 of the tender.
18. For the foregoing reasons we find that the present writ petition
is devoid of merits and accordingly dismiss the same. However, the
Petitioner shall deposit the actual cost incurred by the NHAI towards
litigation expenses in the sum of Rs.7,36,670/- with the Registry of
this Court within a period of four weeks from today.
19. List for compliance on 11th May, 2009.
SIDDHARTH MRIDUL, J.
MADAN B. LOKUR, J.
April 08, 2009
mk
