Delhi High Court
M/S Xs Productions India vs Union Of India And Anr on 4 December, 2017
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 04.12.2017
+ W.P.(C) 8924/2017 & CM Nos.36531-36532/2017
M/S XS PRODUCTIONS INDIA ..... Petitioner
Through: Mr. K.K. Sharma, Sr. Adv. with
Mr. Rajiv Bakshi, Mr. Gagandeep Chauhan
& Mr. Aviral Agnihotri, Advs.
versus
UNION OF INDIA AND ANR ..... Respondents
Through: Mr. Praveen Kumar Jain with
Ms. Komal Pandey, Advs. for R-1.
Mr. Manoj Singh & Ms. Namrata Chadha,
Advs. for R-2.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
S. RAVINDRA BHAT, J.(ORAL)
1. The writ petitioner's grievance is that the eligibility
criteria spelt out in the tender issued by the first respondent -
Ministry of Tourism, for setting up an India Pavilion in two
International Trade Fairs, does not permit entertaining bids by
consortiums, Joint Ventures or other association of persons and
rather clarifies that only "a professional agency who has an
annual turnover of `8 crores" can bid in the process.
W.P.(C) No.8924/2017 Page 1
2. The undisputed facts are that the tender which is the
subject matter of this proceeding was issued on 07.07.2017.
The petitioner furnished its bid. On 17.07.2017, the pre-bid
meeting was held after which, the clarifications sought from the
various agencies who wished to participate in the process, were
given and the individual bids were lodged. On 25th / 29th
August, 2017, apparently the technical bids of the parties were
evaluated and the Tourism Ministry indicated that the petitioner
had qualified for the opening of the financial bid. It is alleged
that subsequently; the petitioner became aware - on 03.09.2017
that the Ministry of Tourism in flagrant violation of the tender
conditions permitted the second respondent i.e. M/s Incredible
Design, to participate in the process and was intending to award
the contract to it. It was with these allegations that the
petitioner approached this Court.
3. On the first date of hearing i.e. 11.10.2017, while issuing
notice the respondents were cautioned that in the eventuality of
an award of contract, it would be subject to the final outcome of
these proceedings.
4. Learned senior counsel for the petitioner urges that
Clause 4.1, which encapsulates the eligibility criteria is
forthright in its terms that professional agencies i.e. individuals,
especially firms or companies fulfilling the prescribed financial
criteria, would be allowed to participate in the tender process.
Counsel also relied upon Para 2.1.1 of the Manual for
W.P.(C) No.8924/2017 Page 2
Procurement of Consultancy and other Services, 2017 issued by
the Ministry elaborating the circumstances in which certain
kinds of Association of Persons can be allowed to bid. Arguing
that the clear wordings of the tender conditions prescribed the
participation of such agencies, the learned senior counsel
submitted that the permission granted to the second respondent
to participate in the tender process and Ministry's decision to
accept its bid, culminating the award of contract is contrary to
law and is arbitrary.
5. The Central Government which has filed its counter
affidavit relies upon Clause 2.1.1 and states that there is no bar
to the participation of such associations/firms and that
restrictive interpretation given by the petitioner is erroneous. It
also relies upon a clarification issued by the Ministry of Finance
on 27.09.2017 with respect to the said tender. Upon a query
made by the Union Tourism Ministry, the Finance Ministry
stated inter alia:-
"2. The proposal has been examined in this Ministry
and it is clarified that since the tender has not stipulated
any restrictive condition regarding participation of joint
venture/ consortium in the bid, there should be no bar on
consideration of any bids by any joint venture/
consortium."
6. The above discussion would reveal that the narrow point
of controversy between the parties is the interpretation of
W.P.(C) No.8924/2017 Page 3
Clause 4.1 which contains the eligibility criteria. For
convenience, Clause 4 of the NIT/tender is extracted below:-
"Clause 4 Eligibility Criteria
4.1 A professional agency with an annual turnover
of Rs.8.00 crore (USD / Euro as per official
exchange rate of the Ministry of External Affairs,
Govt. of India for the month of May, 201 or more
(during the last financial year i.e. 2016-17).
4.2 Previous experience of handling work of
similar nature, i.e. of conceptualizing, designing
and construction of pavilions at international fairs
and exhibitions.
4.3 Preference with be given to the agencies
having previous experience of having designed /
constructed pavilions for other countries."
7. Clause 2.1.1, stipulated in the manual for procurement
reads as follows:-
"2.1.1 Consortium of Consultants / service
Providers -
In large and complex assignments consultants /
service providers may associate with each other to
form a consortium to complement their respective
areas of expertise, to increase the technical
responsiveness of their proposal and make larger
pools of experts available or for other reasons.
Such an association may be for the long term
(independent of any particular assignment) or for a
specific assignment. The consortium may take the
form of a joint venture (JV) or a sub consultancy.
In case of a joint venture, all members of the joint
W.P.(C) No.8924/2017 Page 4
venture shall sign the contract and shall be jointly
and severally liable for the entire assignment. After
the short list is finalized and the request for
proposal (RFP) is issued, any association in the
form of a joint venture or sub consultancy among
the short-listed firms shall be permissible in
accordance with provisions stated in the RFP.
Under such circumstance, one of the shortlisted
consultants / service providers must become the
lead member of the consortium. The procuring
entity only deals with the lead member of
consortiums for all the purposes. Bid documents
should clearly specify whether Joint Ventures are
allowed to bid in case of complex and large
assignments, say above certain values (Say Rs.5
crores) maximum number of partners in Joint
Venture shall be limited (Say-three). In case JVs
are permitted to bid, it should be clarified what
qualifications are to be collectively (clubbed
together) met by the JV partners (say experience of
particular consultancy, Financial Turnover etc) and
what each partner has to individually and
separately meet (financial soundness.) In this case
it should also be specified that that each partner
should meet at least 25% (and the lead partner at
least 50%) out of the qualifying limit in case of
experience of particular consultancy and financial
turnover, if any."
8. A plain reading of the eligibility condition i.e. Clause 4.1
in the opinion of the Court nowhere precludes the participation
of consortiums or joint ventures or such like association of
persons. In fact, since what one gets upon a reading of Clause
2.1.1 of the Manual is that ad-hoc associations in the form of
consortiums, partnerships or associations are permitted to bid
W.P.(C) No.8924/2017 Page 5
for specific contracts; "such an association may be for the long
term (independent of any particular assignment) or for a specific
assignment. The consortium may take the form of a joint
venture (JV) or a sub consultancy. In case of a joint venture, all
members of the joint venture shall sign the contract and shall be
jointly and severally liable for the entire assignment."
9. Therefore, the understanding of the public agency was to
permit all professional agencies - regardless of their
composition i.e. companies, partnership firms, limited
partnerships or partnerships for the ventures such as
JV/consortiums to participate in the process. That the second
respondent was allowed to participate in these circumstances
was not an infirmity as it was not clearly precluded by the terms
of the tender/NIT.
10. This Court has to keep in mind that its task is only to
scrutinize whether a public agency's interpretation of the
conditions made known to the public while administering its
contracts or deciding upon the award of contract is reasonable
and not discriminatory or tainted by mala fides. It cannot,
therefore, enter into the primary decision making task of
interpreting these conditions for itself. Such is the constraint of
judicial review under Article 226 of the Constitution of India in
matters relating to award of public contracts.
W.P.(C) No.8924/2017 Page 6
11. Keeping in view these limitations, the Court concludes
that there is no infirmity in the award of the contract to the
second respondent.
12. The writ petition is therefore dismissed.
S. RAVINDRA BHAT, J
SANJEEV SACHDEVA, J
DECEMBER 04, 2017
kks
W.P.(C) No.8924/2017 Page 7
