Fugro Survey (India) Private ... vs Engineers India Limited And Anr.
2019 Latest Caselaw 1054 Del

$~10
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                          Date of Decision : 18th February, 2019

+         W.P.(C) 155/2019, CM Nos.802-03/2019 & 5795/2019


       FUGRO SURVEY (INDIA) PRIVATE LIMITED ... Petitioner
                    Through : Mr. Aniruddha Joshi, Mr. Rajeev
                               K. Panday, Mr. Rajeev M. Roy
                               and Mr. P. Srinivasan, Advs.

                           versus

       ENGINEERS INDIA LIMITED AND ANR. ..... Respondents
                     Through : Mr. Sanjay Jain, ASG with Mr.
                               Anil Kaushik, Mr. Abhishek
                               Mishra and Mr. Akash
                               Bhardwaj, Advs. for R-1 & 2.

CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE PRATEEK JALAN

S. RAVINDRA BHAT, J. (ORAL)

1. The petitioner had furnished its bid, pursuant to a Notice Inviting Tender (NIT) issued by the Engineers India Limited (hereafter as "EIL" i.e. the first respondent), who are nominated as Project Consultant and Implementing Agency, on behalf of the HPCL Rajasthan Refineries Limited (hereafter "the second respondent") which proposed to set up an oil refinery in Barmer. The scope of the work included marine geophysical survey and geotechnical investigation, for the purpose of setting up of a Single Point Mooring (SPM) of Mandvi Port but within the territorial waters. The object and purpose of this was to ascertain the

suitability of underwater seabed and substratum soil and rocks to enable the installation of sub-marine pipelines, which would enable continuous pumping of crude, to be delivered onshore ultimately at the receiving point, at Barmer.

2. The petitioner‟s bid was rejected; it has approached this court complaining of arbitrariness on the part of the EIL.

3. The crucial point of controversy concerns interpretation of technical criteria - especially Clause 5.1.1, and the requirement of the bidder having performed or completed "similar works". The relevant stipulation reads as follows:

"5.0 BIDDER QUALIFICATION CRITERIA (BQC):

Bidder shall fulfil the following qualification criteria in order to qualify for this work:

5.1 TECHNICAL CRITERIA:

5.1.1. The Bidder should have completed at least one or two or three contracts of "Similar Works" of minimum value(s) as indicated below during the last 7 (Seven) years ending last day of the month previous to the one in which NIT is published on e-tendering portal (https://eprocure. gov.in/eprocure/app). One Contract of value not less than INR 9,60,00,000 (Rupees Nine Crore Sixty Lakh).

OR

Two Contracts each of value not less than INR 6,00,00,000 (Rupees Six Crore).

OR

Three Contracts each of value not less than INR 4,80,00,000 (Rupees Four Crore Eighty Lakh).

"Similar Work" means:

"Geotechnical investigation project comprising of minimum one borehole of 40 m or more depth below sea bed by deploying geotechnical barrage or geotechnical jack up rig in water depth of 25m or more and consisting of cone penetration test (CPT) along with relevant laboratory tests.

AND

Marine Geophysical survey projects involving survey equipments such as Single beam/ multi Beam Echo Sounder, Sub Bottom Profiler and Side Scan Sonar."

4. It is argued on behalf of the petitioner that the rationale for rejection of its bid, i.e. it did not fulfil the relevant eligibility condition of having performed similar works, is incorrect and arbitrary. In this regard, the petitioner relies upon its previous experience to say that cumulatively, on both aspects, i.e. marine geophysical survey and geotechnical investigation, it has on several previous occasions, completed works awarded to it by different agencies satisfactorily and had relied upon certificates in this regard, copies of which were annexed to its bid. It further submits that in the course of the tender evaluation, the EIL, on 10.10.2018 and 15.10.2018 sought clarifications.

5. Mr. Aniruddha Joshi, learned counsel appearing on behalf of the petitioner pressed the ground urged in support of the proceedings and contended that the interpretation given by the EIL to reject the petitioner‟s tender is ex facie arbitrary. In this regard, firstly, it was submitted that in several past instances, the EIL interpreted the identical stipulations to mean that the experience was to be evaluated on a cumulative basis and even though the experience was derived from

disparate contracts, the tender could be awarded. In other words, it was submitted that what was essentially required and what was meant by the tender eligibility condition, was that the bidder had to satisfy EIL about its past experience on both counts. The tender nowhere explicitly reflected EIL‟s intention that composite contract or contracts in the past, involving both kinds of works, had to be performed as a pre-condition for bidding. Secondly, it was urged that the interpretation adopted by EIL is not a hurdle because the object of the clause is to ensure that the bidder has the requisite technical competence. As long as the technical competence is shown - even through disparate contracts or multiple contracts, the bid should be deemed compliant; the alternative would result in extremely few number of bidders and an unfair competition. Lastly, it was argued that EIL appeared to have committed a volte face, as is evident from the queries addressed to the petitioner on 10th and 15th October 2018. In this regard, learned counsel relied upon the stipulations in Clauses 30.0 to 30.5. For these reasons, it was urged that the rejection of the petitioner‟s tender was entirely unwarranted and contrary to tender terms which nowhere requires experience of both aspects in a single/composite contract.

6. Clauses 30.2 and 30.5, in the opinion of this court, have some relevance and bearing on this argument and are reproduced as under:

"30.0 EVALUATION OF TECHNO-COMMERCIAL BIDS

xxx xxx xxx

30.2 A substantially responsive Bid is one which conforms to the terms, conditions and specification of the Bidding Documents without material deviation. A material deviation is

one which affects in any substantial way the scope, quality or performance of the works, or which limits in any substantial way, inconsistent with the Bidding Documents, the Owner / EIL's rights or the Bidder's obligations as envisaged in the Bidding Documents, and the rectification of which deviation or reservation would affect unfairly the competitive position of other Bidders presenting substantially responsive Bids.

xxx xxx xxx

30.5 Owner / EIL, if necessary, will obtain clarifications on the Bid by requesting for such information / clarifications from any or all Bidders, either in writing or through personal contact. All responses shall be in writing, and no change in the price or substance of the bid shall be permitted unless specifically sought by Owner / EIL."

7. The EIL which is represented by Mr. Sanjay Jain, Additional Solicitor General and Mr. Anil Kaushik, Advocate, urged, on the other hand, that there is pressing urgency for completion of the contract of survey and investigation by the end of April of this year since the onset of monsoon would be expected thereafter, rendering the investigation and survey difficult, if not entirely impossible. It was submitted that therefore, at the preliminary stages, when the EIL was tasked with the responsibility of overall project management and implementation, it made market enquiries and had screened five potential parties, who were likely to be interested. However, at the stage of bidding, only two came forward - i.e. the successful bidders (Coastal Marine Construction and Engineering Ltd.) and the present petitioner. Having regard to the importance and urgency of the project - which was to ultimately culminate in availability of Bharat Standard-VI fuel to the Indian consumer, it was imperative that the tender conditions be suitably tailored. Learned counsel emphasises that the expression „similar works‟

in the context of EIL‟s interpretation always meant that the concerned tenderer or bidder had to demonstrate that in the past, it had, in the course of one or up to three other works, performed similar composite contracts, as was sought to be awarded in the present instance. It was further emphasised that the condition was incorporated as the scope of work involves undertaking both the geo-technical investigation and geo- physical survey simultaneously. Furthermore, it was stated that to ascertain the availability of 32 metres water depth required for the earmarking the location of SPM, geophysical investigations are first carried out to get the necessary water depths in the area within the radius of one kilometre and thereafter the availability of the required water depth data was to be supplied for planning of geo-technical investigations. Parallely, geo-physical investigations were to be carried out along the sub-marine pipeline route to secure the required information. The sequence of these two works and the timelines necessitated that the tender conditions be appropriately tailor made.

8. The EIL‟s position is stated clearly in the following extract of its counter affidavit :

"7. That for the scope of works Involved in the present tender it is necessary that the bidder is competent to carry out both geotechnical investigation and geophysical survey together in an integrated manner, therefore "similar works" as prescribed under Clause 5.1.1 contemplates that the bidder in the past has completed a contract comprising of both geotechnical investigation and geophysical survey together. In the present case the Petitioner herein had completed only one contract which was worth only around Rs. 5.29 crore, which was less than the value of Rs. 9.6 crores stipulated in case the bidder had completed only one single contract. The Petitioner

had submitted details of five other contracts, however the Petitioner had either carried out only geotechnical investigation or only geophysical survey. In none of the said five contracts, the Petitioner had completed both geotechnical investigation and geophysical together, therefore the said five contracts cannot be considered as "similar works" as prescribed under Clause 5.1.1. It is further pertinent to mention here that the Petitioner herein had not participated in the pre-bid meeting held on 14.09.2018 to seek any clarification in respect of Clause 5.1.1 and the present grievance of the Petitioner is only an afterthought aimed to cause hindrance to the Project."

9. This court has considered the submissions of the parties. The grievance which the petitioner articulates before this court is a very short one; i.e. whether the interpretation given by the EIL to Clause 5.1.1 is arbitrary? In this regard, this court, at the outset, would recollect that judicial review under Article 226 of the Constitution of India in such matters - i.e. those involving examination of award of tenders by public agencies and the executive government do not extend to a merit scrutiny of the interpretation, as if the court was adjudicating a live contractual dispute. The court is cognizant of the fact that the examination by the executive authority or an agency is a pre-bid determination to decide whether the bidder is suitable for the overall purpose and object of the contract. Repeatedly, it has been emphasised that such scrutiny by the courts is necessarily narrow and confined and the courts can intervene in the process with appropriate directions, if satisfied of illegality; absence of bona fide; procedural impropriety or irregularity or manifestly unreasonable results in the appreciation of the tender or its award (See : Tata Cellular v. UOI, AIR 1996 SC 11; Michigan Rubber (India) Ltd. v. The State of Karnataka & Ors., AIR 2012 SC 2915; Monte Carlo v.

NTPC Ltd., AIR 2016 SC 4946; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation, (2016) 16 SCC 818). In this regard, the Supreme Court has defined the scope of Article 226 proceedings in respect of interpretations given by the executive agency or public agency, which is largely deferential in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation, (2016) 16 SCC 818. In the said judgment, the court pertinently observed as follows:

"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given.

16. In the present appeals, although there does not appear to be any ambiguity or doubt about the interpretation given by NMRCL to the tender conditions, we are of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by NMRCL was perverse or mala fide or intended to favour one of the bidders. This was certainly not the case either before the High Court or before this Court."

10. Keeping the above principles in mind, what this court is really asked to decide is whether the construction of Clause 5.1.1, adopted by the EIL in the present case, is per se arbitrary or unreasonable. This court is unable to agree with the petitioner‟s submissions on this for the

following reasons :

(i) As far as the first argument of the petitioner that in the past, an interpretation to the contrary had been given in several instances is concerned, this court is of the opinion that such interpretations or such instances cannot afford a precedent - least of all, of binding nature. They are only indications as to the public agency‟s thinking at the relevant time, and having regard to the then prevailing conditions. Even otherwise, there is no concept of executive decision making being precedent bound.

(ii) As far as second argument is concerned i.e. that the EIL had addressed queries to the petitioner which prima facie meant that the tender was compliant, even as regards Clause 5.1.1, this court is of the opinion that such behaviour cannot be entirely determinative or conclusive that the EIL or the relevant technical evaluation committee, had taken a final decision, deciding that the petitioner‟s bid was responsive. No doubt, Clause 30 and especially, Clauses 30.3 and 30.5 lead one to believe that if the EIL feels at some stage that prima facie any bid is compliant or satisfied the tender conditions, further queries can be elicited. However, having regard to the segmented nature of decision making, where not one but more authorities and officials are involved in decision making, the mere eliciting of such opinion without any further allegation of mala fide, per se does not result in any expectation or inference that the EIL had finally decided that the petitioner‟s bid was compliant and therefore needed further investigation.

(iii) As far as third argument with respect to the interpretation of

Clause 5.1.1 goes, the court finds no manifest unreasonableness or arbitrariness in the interpretation given by the EIL. As is explained by the agency, tight timelines required of the successful bidder meant that it was interested in considering only a narrow catchment of potential bidders i.e. those who possess experience in executing composite contracts. The structure of „similar works‟ under Clause 5.1.1 thus support this contention. For these reasons and also having regard to the authorities cited, this court is of the opinion that the petitioner‟s argument on this aspect has to fail.

11. In view of the foregoing reasons, this court holds that this petition is unmerited and is accordingly dismissed. Pending applications also stand dismissed.

Dasti.

S. RAVINDRA BHAT, J

PRATEEK JALAN, J FEBRUARY 18, 2019 aj