Delhi High Court
M/S Flying Elephant Studio vs Central Public Works Department ... on 15 April, 2019
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 25th March, 2019
Pronounced on: 15th April, 2019
+ W.P.(C) 11565/2018 & CM Appl. Nos. 44754-55/2018 &
48269-70/2018
M/S FLYING ELEPHANT STUDIO ..... Petitioner
Through: Ms.Swathi Sukumar, Ms.Surya
Rajappan and Mr.Naveen
Nagarjuna, Advocates
versus
CENTRAL PUBLIC WORKS DEPARTMENT
(CPWD) & ORS. ..... Respondents
Through: Mr.Rajesh Gogna, CGSC with
Mr.Upendra Sai, Advocate for
CPWD
Mr. K.Datta & Mr. Manish
Kumar Srivastava, Advocates
for R-4
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE PRATEEK JALAN
MR.JUSTICE PRATEEK JALAN
%
1. This writ petition concerns a Notice Inviting Tender [hereinafter
referred to as the "NIT"] dated 19.06.2018, issued by the respondent
No.1, Central Public Works Department [hereinafter referred to as
"CPWD"] entitled "International Design Competition with
comprehensive Architectural and Engineering Planning for proposed
museum on Prime Ministers of India in the premises of Nehru
Memorial, Museum and Library, Teen Murti Bhawan, New Delhi".
The petitioner's grievance is that its bid was rejected by the
respondent's communications dated 18.08.2018, 27.09.2018 &
11.10.2018.
2. The petitioner is an architectural firm based in Bangalore. It
claims to have completed several national and international projects
including educational institutions, museums, offices, industrial
buildings and research facilities and participated in national and
international exhibitions. It has also been recognized by various
awards. It submitted its proposal pursuant to the NIT on 06.08.2018
with material to demonstrate that it satisfied the stipulated eligibility
criteria. At the respondent's request, a power point presentation of the
proposal was also submitted. However, by the impugned
communication dated 28.08.2018, the CPWD informed the petitioner
that it did not satisfy the eligibility criteria. The petitioner represented
against this communication to both the CPWD and the Director of the
Nehru Memorial Museum and Library [respondent No.2, hereinafter
referred to as "NMML"] on 29.08.2018 and 30.08.2018 respectively.
The NMML advised the petitioner to pursue the matter with the
CPWD. As the CPWD had not responded to its representation, despite
a reminder dated 10.09.2018, the petitioner filed W.P. (C) 10034/2018
before this Court. That petition was disposed of on 25.09.2018,
directing the CPWD to inform the petitioner of the reasons for its
disqualification within two days and reserving the petitioner's right to
challenge its rejection thereafter. The reasons were communicated to
the petitioner by the impugned communication dated 27.09.2018 and a
further representation dated 01.10.2018 was rejected by the impugned
communication dated 11.10.2018.
3. At the very first hearing of this petition on 26.10.2018, we were
informed that the tender had been awarded to a third party, M/s Sikka
Associates, which was impleaded as respondent No.4. The Court
ordered that the award of tender is subject to the outcome of these
proceedings and directed communication of the order to the successful
tenderer.
4. We have heard Ms. Swathi Sukumar, learned counsel for the
petitioner and Mr. Rajesh Gogna, learned Central Government
Standing Counsel for the CPWD. As their arguments turn on an
interpretation of the eligibility criteria set out in the NIT, the relevant
clause of the NIT is reproduced below:
"4. Initial Eligibility Criteria-
a) The competition is open to all
architects/architectural firms/architectural or
engineering consultants in India and abroad. However,
the architects/architectural firms/architectural or
engineering consultants should have at least one of the
members as a registered Architect (In their respective
countries). In case of foreign architects/architectural
firms/architectural or engineering consultants, they have
to enter into joint venture (JV) with an Indian -
architects/architectural firms/architectural or
engineering consultants with Indian -
architects/architectural firms/architectural or
engineering consultants being the lead member of the
Joint Venture. Indian architects/architectural firms/
architectural or engineering consultants/ International
architects/architectural firms/architectural or
engineering consultants who fulfill the following
requirements shall be eligible to participate:-
The architects/architectural firms/architectural or
engineering consultants should have completed following
Consultancy works during the last seven years ending
previous day of last date of submission of bid:
(i) Three Similar Comprehensive Consultancy works
each involving built up area of minimum 4000 sqm
or a Similar Comprehensive consultancy work
involving consultancy fee (indexed amount) not
less than Rs. 145 lakh.
OR
(ii) Two Similar Comprehensive Consultancy works
each involving built up area of 6000 sqm or
Similar Comprehensive consultancy work involving
consultancy fee involving (indexed amount) not
less than Rs. 220 Lacs.
OR
(iii) One Similar Comprehensive consultancy work
involving built up plinth area 8000 sqm or Similar
Comprehensive consultancy work involving
consultancy fee involving (indexed amount) not
less than Rs. 290 Lacs,
The value of consultancy fee shall be brought to
current cost by enhancing the actual value of
consultancy fee at simple rate of 7% per annum,
calculated from the previous day of last date of
submission of bids to calculate indexed amount.
"Similar Comprehensive consultancy work"
means a consultancy work involving
Comprehensive Architectural with or without
Engineering Planning of Museum/Institutional
Building/Office Building/Art Gallery/Exhibition
Hall/Science Centre."
5. The petitioner, while submitting its bid, claimed to satisfy the
eligibility criteria set out in clause 4(ii) and (iii). In this connection,
the 'Initial Eligibility Criteria Summary' provided by the petitioner
stated as follows:
INITIAL ELIGIBILITY CRIETRIA SUMMARY
Sl. CRITERIA COMMENTS YES/NO/NA
No.
xxxx xxxx xxxx xxxx
(ii) Two Similar The Comprehensive
Comprehensive Consultancy work which
Consultancy works involved built up area of
each involving built 6000 sqm are: YES
up area of 600 sqm or
Similar 1] Azim Premji
Comprehensive Foundation-School and
consultancy work District Institute Project
involving consultancy in Dhamtari,
fee involving (indexed Chattisgarh. The built
amount) not less than up area of this project is
Rs. 220 Lacs. 7896 sqm. [Page No.
046-047]
2] Azim Premji
Foundation-School and
District Institute Project
in Yadgir, Karnataka.
The built up area of this
project is 6317 sqm.
[Page No. 050-051]
(iii) One Similar The Comprehensive
Comprehensive Consultancy work which
consultancy work involved built up area of
involving built up 8000 sqm are:
plinth area 8000 sqm 1] Institute of
or Similar Information Technology
Comprehensive Bangalore (IIIT-B)
consultancy work Phase II-Academic
involving consultancy Institutional Campus
fee involving (indexed Project. The built up
amount) not less than area of this project is
Rs. 290 Lacs. 23783 sqm. [Page
No.054-055] YES
2] National Centre for
Sustainable Coastal
Management (NCSCM),
Anna University
Campus, Chennai -
Scientific Research
Facility Project. The
built up area of this
project is 11984 sqm.
[Page No.060-061]
3] Azim Premji
Foundation - School
and District Institute
Project in Dineshpur,
Uttrakhand. The built
up area of this project is
8732 sqm.
[Page No.072-073]
Details of the completed projects referred to above were also provided
along with certificates of the clients for whom the projects had been
completed.
6. The reason for rejection of the petitioner's bid by the CPWD, as
disclosed in the impugned communications, as also in the affidavits
filed before us and relied upon by Mr. Gogna, was that the previous
projects executed by the petitioner do not fall within the categories of
buildings enumerated in the definition of 'Similar Comprehensive
Consultancy Work' contained in the NIT. For this purpose, the CPWD
has relied upon paragraph 3.2 of Part 6 of the National Building Code
of India (hereinafter referred to as "NBCI") and paragraph 2 of Part 1
of the Building Bye-Laws, 1983, issued by the Delhi Development
Authority (hereinafter referred to as "DDA Bye-laws"). According to
the CPWD, reference to these documents would show that all the
works submitted by the petitioner fall in the category of 'educational
buildings', whereas the NIT required prior experience in
"Museum/Institutional Building/Office Building/Art
Gallery/Exhibition Hall/Science Centre". In the impugned
communications, the CPWD's rejection is restricted to this ground. It
has also refuted the petitioner's grievance that queries or clarifications
should have been raised on the ground that the petitioner's
documentation was complete and no deficiency was found which
required clarification.
7. In support of its contention regarding the applicability of the
DDA Bye-Laws, the CPWD has referred to a pre-bid meeting held on
25.06.2018 during the course of which it had referred to those Bye-
Laws in response to a query raised by one of the bidders. The CPWD
has asserted that the petitioner failed to participate in the pre-bid
meeting and obtain any clarifications if it was in doubt as to the
eligibility requirements. Mr. Gogna also stated that the pre-bid
meetings were made part of the tender documents by the corrigendum-
03 issued by respondent no. 1 vide no. 54(5)/EE/E-Div/18-19/750
dated 09.07.2018. The query on which the CPWD relies and its
response are set out below:
"International Design Competition with comprehensive
Architectural and Engineering Planning for 'Proposed Museum
on Prime Minister of India' in the Premises of Nehru Memorial
Museum and Library Teen Murti Bhawan, New Delhi.
xxxx xxxx xxxx xxxx
The queries raised by the participants from various private firms and
the reply furnished by the members of CPWD are as mentioned below:
Sl. Queries raised by Private firms Reply
No.
xxxx xxxx xxxx xxxx
Queries raised by ARCHITRON GROUP
xxxx xxxx xxxx xxxx
3. What are the height restrictions Kindly refer to
for the proposed museum? building bye-
Specifically are there any special laws of Delhi.
building codes/bye-laws that need
to be considered other than the
usual LBZ bye-laws.
xxxx xxxx xxxx xxxx
8. In response to their arguments, Ms. Sukumar submitted that the
applicability of the NBCI and the DDA Bye-Laws was not indicated
in the tender documents. She contended that the reliance of the
respondents on such extraneous instruments could not prevail over a
common parlance understanding of the terms used in the NIT.
According to her, the interpretation placed upon the tender documents
by the CPWD was arbitrary and unreasonable, inviting the Court's
interference under Article 226 of the Constitution.
9. We find that the provisions of the NBCI and DDA Bye-Laws
sought to be relied upon by the CPWD contain descriptions of various
categories of buildings. In the case of the NBCI, the CPWD cited
Clause 3.2 of Section 1 [entitled "Loads, Forces and Effects"] of Part-
6 [entitled "Structural Design"]. Clause 3.2 is entitled "terminology"
and Clause 3.2.1 states that the definitions given below would apply
for the purposes of "imposed loads" specified therein. The categories
of buildings described in the following sub-clauses are "assembly
buildings", "business buildings", "dwellings", "educational buildings",
"industrial buildings", "institutional buildings", "office buildings",
"mercantile buildings", "residential buildings" and "storage buildings".
It is evident that of these categories, only "institutional buildings" and
"office buildings" have been referred to in the relevant provision of
the NIT. Mr. Gogna has also drawn our attention to the definition of
"educational buildings" given therein. These three terms are defined
in the NBCI as follows:
"NATIONAL BUILDING CODE OF INDIA
PART 6 STRUCTURAL DESIGN
Section 1 Loads, Forces and Effects
xxxx xxxx xxxx xxxx
3.2 Terminology
xxxx xxxx xxxx xxxx
"3.2.1.4 Educational buildings - These shall include any
building used for school, college or day-care purposes
involving assembly for instruction, education or
recreation, and which is not covered by assembly
buildings."
xxxx xxxx xxxx xxxx
"3.2.1.7 Institutional buildings - These shall include any
building or a part thereof, which is used for purposes
such as medical or other treatment in case of persons
suffering from physical and mental illness, disease or
infirmity; care of infants, convalescents or aged persons
and for penal or correctional detention in which the
liberty of the inmates is restricted. Institutional buildings
ordinarily provide sleeping accommodation for the
occupants. It includes hospitals, sanatoria, custodial
institutions or penal institutions like jails, prisons and
reformatories."
xxxx xxxx xxxx xxxx
"3.2.1.9 Office buildings - The buildings primarily to be
used as an office or for office purposes; „office purposes‟
include the purpose of administration, clerical work,
handling money, telephone and telegraph operating and
operating computers, calculating machines, „clerical
work‟ includes writing, book-keeping, sorting papers,
typing, filing, duplicating, drawing of matter for
publication and the editorial preparation of matter for
publication, etc.""
10. As far as the DDA Bye-Laws are concerned, the provisions
relied upon by CPWD [Clause 2.54] refer to the occupancy
classification of various buildings. A substantially similar
classification has been adopted as in the NBCI. However, there is no
definition of "office building" in these provisions. The definition of
"institutional buildings" is the same as in the NBCI. The definition of
"educational buildings" is also similar but includes a qualification that
the building must be used for the defined purpose for more than eight
hours per week.
11. Even if it is assumed that these definitions are applicable more
generally than stated in the provisions themselves, we are unable to
accept the contention that the eligibility criteria in the NIT were
required to be read in the light of these definitions. This is so for the
following reasons:
a. It is undisputed that no reference to these instruments was made
in the NIT itself. The intending bidders were therefore, not put on
notice that their eligibility would be assessed on the basis of the
definitions contained in the NBCI or the DDA Bye-Laws. In the
absence of such an inclusion in the NIT, bidders could have no basis
for determining their qualifications and making an informed decision
about whether or not to participate in the NIT.
b. The reference to the DDA Bye-Laws in the pre-bid meeting
relied upon by the CPWD was in an entirely different context. One of
the bidders had sought a clarification as to the height restrictions for
the proposed museum and whether any special building codes/bye-
laws needed to be considered. To this, the CPWD had referred to the
"Building Bye-Laws of Delhi". As the proposed project was for a
building in Delhi, it was only natural to expect that the proposed
building to be constructed must conform to the applicable building
bye-laws. Such reference was wholly inadequate to convey that the
bidders' prior projects, wherever situated, would also be classified
according to the DDA Bye-Laws.
c. The terms used in the note below clause 4 of the NIT refers to
six categories of buildings. Of these, only one is defined in the DDA
Bye-Laws and two in the NBCI. If the tendering authority had
intended to apply those definitions, it ought to have employed the
same classification as contained in the definitional instruments. In
fact, "exhibition halls" and "museums" referred to in the NIT are both
examples of "assembly buildings", as defined in Clause 3.2.1.1 of the
NBCI and 2.54.4 of the DDA Bye-Laws. The said two terms have not
been further defined at all. The implication of the CPWD's argument
is that for certain categories of buildings mentioned in the NIT, the
NBCI/DDA definitions would apply, whereas they would not be of
any assistance with regard to other terms used in the very same clause.
This is not an acceptable position for a public authority to take.
d. Turning to the definition of "institutional buildings" in the two
documents cited, we find that the NBCI and DDA Bye-Laws confine
the classification to medical and correctional institutions, and restrict
the definition ordinarily to institutions which provide sleeping
accommodation for the occupants. In the context of the work tendered
by the NIT, this definition of "institutional buildings" is very
apparently inapposite. In the absence of strong evidence to the
contrary, we find it difficult to accept that the authorities intended to
apply this definition to the NIT.
12. For the above reasons, we reject the contention that the
eligibility clause in the NIT was required to be read with the
definitions contained in the NBCI and the DDA Bye-Laws. While a
tendering authority has substantial leeway in the interpretation of the
eligibility criteria, the Court's interference is certainly warranted when
the interpretation placed by the authority is manifestly arbitrary or
perverse. This is the mandate of several judgments of the Supreme
Court, right from Tata Cellular v. Union of India (1994) 6 SCC 651
(paragraph 70) and Jagdish Mandal v. State of Orissa (2007) 14 SCC
517 (paragraph 22), to the more recent decisions in Afcons
Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. (2016) 16
SCC 818 (paragraph 15), and Consortium of Titagarh Firema Adler
S.P.A. - Titagarh Wagons Ltd. v. Nagpur Metro Rail Corporation Ltd.,
(2017) 7 SCC 486 (paragraph 30).
13. In the present case, we find the CPWD's contention to reveal
complete non-application of mind and, in fact, discern an attempt to
justify the rejection of the petitioner's bid on an entirely untenable
interpretation. The tender documents reveal that the respondents
regard the project in question as a prestigious one for the nation,
significant for its cultural, academic and historical importance. It is
quite alarming that an authority entrusted with such a project should
limit the range of choices available to it by resorting to such specious
logic. We have no hesitation in holding that no reasonable authority
could have interpreted the tender terms in the manner sought to be
done by the CPWD. Had a reasonable interpretation of tender terms
been adopted, it may well be that many more architectural inputs
would have been available for the CPWD to choose from.
14. Turning to consideration of the petitioner's qualifications de
hors the NBCI and the DDA Bye-laws, we find that there is no dispute
that the experience certificate submitted by the petitioner satisfied the
eligibility criteria in terms of the built-up area requirements. The
details of the projects submitted by the petitioner refer inter alia not
just to schools, but also to district institutes [engaged in teacher
training, outreach programmes and liaison with government agencies],
and a scientific research facility at the National Centre for Sustainable
Coastal Management in Chennai [including research laboratories,
GIIS facility etc.]. In view of the fact that the categories of buildings
referred to in the NIT included "institutional buildings" [which in our
view may even include "schools"], "office buildings" and "science
centres", the rejection of the petitioner's bid in the manner done by the
CPWD was unjustified. The materials submitted by the petitioner, at
the very least, called for further inquiry under Clause 4(h) of the NIT.
15. The consequential question which requires to be determined is
the nature of relief which can be granted to the petitioner. The
Supreme Court has in several decisions laid down a two-pronged test,
which must be satisfied before interfering in public tenders. In
addition to the existence of malafides or arbitrariness, the requirement
of public interest must also be satisfied. These tests were enunciated in
paragraph 22 of Jagdish Mandal (supra) in the following terms:-
"22...Therefore, a court before interfering in tender or
contractual matters in exercise of power of judicial
review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by
the authority is mala fide or intended to favour
someone;
OR
Whether the process adopted or decision made is so
arbitrary and irrational that the court can say: "the
decision is such that no responsible authority acting
reasonably and in accordance with relevant law could
have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no
interference under Article 226. Cases involving
blacklisting or imposition of penal consequences on a
tenderer/contractor or distribution of State largesse
(allotment of sites/shops, grant of licences, dealerships
and franchises) stand on a different footing as they may
require a higher degree of fairness in action."
These requirements have been reiterated in several later decisions
including Michigan Rubber (India) Ltd. v. State of Karnataka, (2012)
8 SCC 216 (paragraph 24) and Central Coalfields Ltd. v. SLL-SML
(Joint Venture Consortium) (2016) 8 SCC 622 (paragraph 43). In JSW
Infrastructure Ltd. v. Kakinada Seaports Ltd. (2017) 4 SCC 170
(paragraph 9), the legal position laid down in Jagdish Mandal (supra)
has been summarized thus:
"9. In Jagdish Mandal v. State of Orissa this Court held
that evaluation of tenders and awarding contracts are
essentially commercial functions and if the decision is
bona fide and taken in the public interest the superior
courts should refrain from exercising their power of
judicial review... "
16. We, therefore, have to examine whether the balance of public
interest lies in interfering with the impugned tender. As stated
hereinabove, the tender had been awarded to respondent No.4 prior to
the first date of hearing of this writ petition, and the Court had
clarified that this would be subject to the outcome of these
proceedings. The Union of India has filed an additional affidavit
dated 25.03.2019, wherein it has been stated that in the intervening
period, a contract was placed for civil structural work based on the
designs submitted by the respondent No.4 and that civil work has
commenced. The CPWD claims to have procured construction
material worth ₹2 crores and executed work to the tune of ₹6 crores
at the site in addition to ₹1.36 crores paid to respondent No.4 and
₹2.6 crores paid to the construction agency. Keeping in mind the
substantial outlay of expenditure which has already occurred pursuant
to the award of the tender, and the progress made in the work at site,
the "public interest" test has not been satisfied in the present case.
We do not consider it to be in the larger public interest to quash the
award of the project and direct further processing of the petitioner's
bid, or to mandate that a de novo exercise be carried out in the present
case by calling for fresh tenders.
17. As indicated in paragraph 22 of Jagdish Mandal (supra), the
petitioner will be at liberty to institute appropriate proceedings for
monetary compensation arising out of the loss of opportunity to
participate in the tender, or any other relief to which it may be entitled,
which will be decided in accordance with law.
18. For the reasons aforesaid, the present petition is disposed of
without granting any relief to the petitioner. However, in the peculiar
facts and circumstances, the respondent No.1 (CPWD) will pay the
costs of these proceedings to the petitioner. The costs are assessed at
₹1,50,000/- [Rupees one lakh fifty thousand only] to be paid within
two weeks.
PRATEEK JALAN, J.
S. RAVINDRA BHAT, J.
APRIL 15, 2019
„hkaur‟
