Delhi High Court
Isc Projects Pvt. Ltd & Anr. vs Ircon International Limited on 21 August, 2020
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 21st August, 2020.
+ W.P.(C) No.5283/2020 & CM APPL. 19050/2020 (for stay).
ISC PROJECTS PVT. LTD. & ANR. ..... Petitioners
Through: Mr. Sandeep Sethi, Senior Advocate
with Mr. Sameer Parekh, Mr. E.R.
Kumar, Ms. Sonal Gupta, Ms. Rashi
Gupta, Mr. Raghav Bansal, Mr.
Prateek Khandelwal & Mr. Satjit
Chhabra, Advocates and Mr. Jameer.
Versus
IRCON INTERNATIONAL LIMITED ..... Respondent
Through: Mr. Manoj Kumar Das & Mr.
Deepak Kumar, Advocates.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
HON'BLE MS. JUSTICE ASHA MENON
[VIA VIDEO CONFERENCING]
RAJIV SAHAI ENDLAW, J.
1. The petition, (i) impugns the order/communication dated 10th August,
2020 of the respondent IRCON International Limited rejecting, during
technical evaluation by the constituted Committee, the bid of the joint
venture of the two petitioners, for the reason "technically disqualified"; and,
(ii) seeks mandamus, directing the respondent to declare that the petitioners
are eligible to participate in the bid process and to allow the petitioners to
participate in the bid process.
2. The respondent, on behalf of West Central Railway, on 17 th March,
2020 invited bids for construction of Down Line Railway Grade separator
running over New Katni Junction & Katni Murwara yards and comprising
construction of Rail Viaducts on Pile foundation, composite steel girders
and Deck Slabs, Open Web Girders, Retaining Walls, minor bridges,
Earthwork & allied other civil engineering works in Katni District, Madhya
Pradesh, for Katni grade Separator project of West Central Railway
(Package-I), vide e-Tender document NIT No: IRCON/CO/KGS/Civil
/DN/106.
3. The two petitioners namely (i) ISC Projects Pvt. Ltd.; and, (ii) Royal
Infraconstru Ltd., on 8th June, 2020 formed a Joint Venture (JV) in the
name and style of "ISC Projects - Royal JV" for submission of the
technical and financial bid for the above mentioned tender, with the
petitioner no.1 ISC Projects Pvt. Ltd. being the lead member of the JV for
intents and purpose of representing the JV with the "Employers", and so
submitted the bid, claiming to be qualified therefor as per technical
qualifications prescribed in the tender.
4. The grievance of the petitioners in this petition is, that neither any
reason was assigned for holding the petitioners "technically disqualified"
nor any hearing was accorded to the petitioners; the contention is that thus
the action of the respondent of rejecting the bid of the petitioners is
violative of the principles of natural justice, arbitrary and untenable in law.
It is further the case of the petitioners that though the petitioners on 10 th
August, 2020 itself requested a clarification and reason for rejection of their
bid but no reason was informed till the date of filing of the petition.
5. Having gone through the file, we did not find any of the terms and
conditions of the tender, in response to which the petitioners had bid, to be
requiring the respondent to give reasons for the rejection or to give an
opportunity of hearing to those whose bids were being rejected. Rather we
found Clause 21 titled "Right to accept any tender or reject all tenders" in
Part E titled "e-Bid Opening and Evaluation" of Section III titled
"Instructions to Tenderers", of the tender document to be expressly
reserving unto the "employer/engineer", the right to accept or reject any
tender without incurring any liability to the affected tenderers or any
obligation to inform affected tenderer, the grounds for such action. We thus,
on 14th August, 2020 when the petition came up before us for admission,
enquired from the counsel for the petitioners, the right under which the
petitioners claim a right to be informed reasons and to be given opportunity
of hearing, of rejection/before rejection of their tender.
6. The counsel for the petitioners drew our attention to Annexures P-9
and P-10 to the petition, being copies of Office Order No.33/7/03 dated 9th
July, 2003 and Office Order No.15/3/05 dated 24th March, 2005 of the
Central Vigilance Commission (CVC). The former requires pre-
qualification, evaluation/exclusion criteria etc. which the organisation
wants to adopt, to be made explicit at the time of inviting tenders, so that
the basic concept of transparency and interest of equity and fairness are
satisfied and provides that acceptance/rejection of any bid should not be
arbitrary but on justified grounds as per the laid down specifications,
evaluation/exclusion criteria, leaving no room for complaints. The latter
provides that notwithstanding the clause incorporated in the tender
document that the tender application could be rejected without assigning
any reason, the tender accepting authority is bound to record on the file
clear, logical reasons for any such action of rejection/recall of tenders.
7. The aforesaid two orders of the CVC only require the evaluation
process to be explicit and reasons for rejection/acceptance to be recorded.
The grievance of the petitioners here is not that the tender document did not
provide the evaluation criteria. The grievance is that no reasons for
rejection have been given and no hearing before/after rejection has been
given. However the said Office Orders of the CVC also do not require so
and only require reasons for rejection to be recorded on the file. We thus
asked the counsel for the respondent, appearing on 14th August, 2020 on
advance notice, to produce before us the record of evaluation of the tenders,
to enable us to gauge, whether such reasons as prescribed by CVC to be
recorded, exist on the record.
8. To satisfy our judicial conscience, that the technical bids of all except
one of the bidders were not rejected, leaving only one in the fray for
opening the financial bid, so as to make the award of contract a foregone
conclusion, we also enquired from the counsels, how many bidders
qualified technically.
9. We were informed that there were eight technically qualified bidders
whose financial bids were opened.
10. The counsel for the petitioners then stated that though the technical
bids were to be opened on 10th August, 2020 and the financial bids on 11th
August, 2020 but the financial bids were not opened on 11 th August, 2020
but opened on 13th August, 2020 and the award of contract should be
stayed. The senior counsel for the petitioners stated that the financial bid of
the petitioners was about Rs.12.5 crores below that of the successful bidder
declared on 13th August, 2020.
11. The counsel for the respondent though appearing on advance notice,
opposing any stay of award of contract, stated that he had taken instructions
and also obtained copies of the documents and was in a position to share the
same.
12. In view of the urgency, we, on 14th August, 2020 proceeded to hear
the counsels at length, to gauge whether the petition deserves issuance of a
notice and/or grant of any interim order, as sought by the petitioners and
after hearing the counsels, reserved judgment.
13. The counsel for the respondent shared the minutes of the meetings
held on 9th July, 2020, 15th July, 2020, 22nd July, 2020, 24th July, 2020 and
28th July, 2020 of the Tender Committee (TC), in connection with the
tender finalisation of the aforesaid project, pertaining to the bid of the
petitioners herein. It is recorded in the said minutes, that (a) the petitioners
no.1&2 had submitted the bid in a JV; (b) as per the JV Agreement, the JV
is in the ratio of petitioner no.1, 51% and the petitioner no.2, 49%; (c) the
petitioner no.1 as the lead partner in the JV which had submitted the bid,
did not fulfil the eligibility criteria as per EQC (Essential Qualification
Criteria) clause 1(iii); (d) the petitioner no.2 also did not satisfy the
eligibility criteria of EQC Para 1, EQC Para 2 table (iii); and, (e) thus the
JV of the two petitioners did not qualify in technical bid, neither in similar
work criteria nor in structural steel in bridge criteria and accordingly the TC
did not recommend opening of their Financial Bid.
14. The senior counsel for the petitioners, perhaps aware of the reason
for which the petitioners had been disqualified, had come fully briefed to
argue on the aforesaid aspect. He drew our attention to Annexure-V titled
"Essential Qualification Criteria" of the tender document Clause 1 wherein
is as under:-
"1. Experience in similar nature of work (Technical Capacity);
As proof of possessing the Experience in similar nature of work for
carrying out the proposed work, bidder should possess the
experience of having successfully completed / substantially
completed similar works during the last 7 years (ending last day of
the month previous to the one in which tenders are invited), which
should be anyone of the following :-
(i) One similar work costing not less than the amount equal to
60% of the advertised Cost of the work, or
(ii) Two similar works costing not less than the amount equal to
40% of the advertised Cost of the work, or
(iii) Three similar works costing not less than the amount equal to
30% of the advertised Cost of the work.
Notes -
i) "Similar work" for this contract shall be "Construction of
Bridge/Flyover/Viaduct in
Railway/Metro/Highway/Expressway projects"
ii) The work should include Construction of
Bridge/Flyover/Viaduct. In case of composite work, value of
any other major component such as Approaches with RE
wall/Retaining wall, Roads, Buildings etc. shall not be
considered. Value of the component such as Bridge/ Flyover/
Viaduct in Railway/Metro/Highway/Expressway projects
should be separately mentioned in Performance certificates.
iii) The contractor should submit performance certificates and
Letter of Award in reference to Serial Number 1 (Minimum 3
nos., 2 nos. or 1 no. as the case may be) above issued by
Government Organizations/ Semi Government Organizations/
Public Sector Undertakings/ Autonomous bodies/ Municipal
bodies/ Public Limited Company / Concessionaire Company/
Private Company/JV Company for having successfully
completed similar works in the last 7 years. Certificates issued
by such Public Limited Company / Concessionaire Company/
Private Company/ JV Company must be supported by Tax
Deducted at Source (TDS) Certificates (Form 16A/ 26AS) in
evidence of the value of work executed.
iv) All documents related to certification of completion of the
"similar work" issued by above shall be submitted, duly
Notarized by a Notary Officer.
v) The value of similar work done shall be updated as per the
Value Enhancement Factor (VEF) given below:
Financial 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13
Year
VEF* 1.00 1.05 1.10 1.15 1.20 1.25 1.30
*The VEF shall be applied for the respective year in which
work under consideration has been completed.
vi) Substantial completion means the value of the executed work
should be 90 (Ninety) per cent or more of the OCV or RCV
subject to the contract has not been terminated.
vii) If the bidder is a JV, then the JV and its constituent members
should fulfill the above requirement as below:
No Requirement Joint Venture
1. JV Lead Each Partner
collectively Partner (Minimum)
(i) One similar Must Meet At least Each other member of
work costing Requirements one work JV shall have
not less than of 1.(i) technical capacity of
the amount minimum 10% of the
equal to 60 % cost of work i.e., each
of the JV member must have
advertised Cost satisfactorily
of the work, or completed during the
last 07 (seven) years,
(ii) Two similar Must Meet At least ending last day of
works costing Requirements one works month previous to the
not less than of 1.(ii) one in which tender is
the amount invited, one similar
equal to 40% of single work for a
the advertised minimum of 10% of
Cost of the advertised value of
work, or the tender.
(iii) Three similar Must Meet At least
works costing Requirements two works
not less than of 1.(iii)
the amount
equal to 30% of
the advertised
Cost of the
work
"
15. The senior counsel for the petitioners contended that, (a) as per
clause 1 supra, the bidder should have successfully completed/substantially
completed during the last seven years, either one similar work of the value
of not less than 60% of the advertised cost of the subject work or two
similar works of the value of not less than 40% of the advertised cost of the
subject work or three similar works of the value of not less than 30% of the
advertised cost of the subject work; (b) the petitioners submitted the tender
claiming qualification under clause 1(ii) supra i.e. of each of the two
petitioners having done works of the value of not less than 40% of the
advertised cost of the subject works; (c) as per Note (iii) to clause 1, in
proof of having completed two similar works costing not less than 40% of
the advertised cost of the subject work, TDS certificates were required to be
furnished; (d) the petitioner No. 1, on 13th April, 2020 (Annexure P-3 to the
petition) informed the respondent that the petitioner No. 1 was seeking
qualification under clause 1 supra claiming that it had satisfactorily
completed a bridge work costing Rs.257.36 crores; though the said work
was executed under a JV in which the share of the petitioner No.1 was 49%
but the petitioner no.1 as one of the partners in the JV, had single handedly
executed the entire work, without any assistance of the other JV partner
who was having 51% share; the client also had issued a certificate that the
entire work had been physically executed by the petitioner No.1; the
petitioner no.1 thus sought clarification from the respondent, whether the
entire cost of the works so completed will be acceptable to the petitioner
no.1 as one of the two works under clause 1(ii), for qualification purpose;
(e) that the petitioner along with the said communication dated 13 th April,
2020 also enclosed a certificate dated 13th September, 2019 of Konkan
Railway Corporation Ltd.(KRCL) for which the earlier work had been done
by the petitioner no.1 in JV with GPT Infraprojects Ltd., showing the total
value of the work done and certifying that the entire said work, physically
had been executed by the petitioner no.1; (f) no reply was given by the
respondent to the aforesaid clarification sought by the petitioners; (g) the
petitioners sent a reminder dated 30th April, 2020 (Annexure P-4 to the
petition) but still no response was received; (h) however the respondent on
15th May, 2020, while replying to all the queries/clarifications sought by
all the bidders (Annexure P-5 to the petition), with respect to the
clarification aforesaid sought by the petitioners, merely referred to the
tender document terms and conditions and stated that there was no change
therein; (i) the entire payment for the work done by the petitioner no.1 in
JV with GPT Infraprojects Ltd. for KRCL was made by KRCL to the
petitioner no.1 only and entire TDS was deducted in the name of the
petitioner no.1 only; (j) 40% of the total value of the work done by the
petitioner no.1 in JV with GPT Infraprojects Ltd. for KRCL satisfied the
bid criteria of the respondent; though the said work was awarded to the JV
of the petitioner no.1 and GPT Infraprojects Ltd. but since the petitioner
no.1 physically carried out the entire work as certified by KRCL also, the
petitioner no.1 was entitled to take the entire value of the said work for
justifying its eligibility for the subject project; (k) the logic in laying down
the eligibility criteria is, that the bidder should have the actual experience of
doing the subject work; (l) once the certificate issued by KRCL stated that
the entire work was done by the petitioner No. 1 and the entire payment
was made to the petitioner No. 1, the respondent erred in taking the share of
the petitioner no.1 in the total cost/value of the work done for KRCL at
49% only and in attributing the remaining 51% to GPT Infraprojects Ltd.
which had not done any work physically; and, (m) thus the rejection by the
respondent, of the bid of the petitioners, is irrational. The senior counsel
for the petitioners emphasised that KRCL would not have issued the
certificate and would not have made the entire payment in the name of the
petitioner no.1 only, had the petitioner no.1 not done the entire work and
the petitioner no.1, while tendering for the subject work, is entitled to take
the credit for the entire work done for KRCL and not merely for 49%
thereof.
16. We enquired from the senior counsel for the petitioners, whether not
once the petitioner no.1 had bid for the works of KRCL in JV with GPT
Infraprojects Ltd. and it was the said JV which was technically qualified
and which was awarded the work by KRCL, the petitioner no.1 is estopped
from claiming that the entire work was done by the petitioner no.1 and that
the credit for entire work should be given to the petitioner no.1 only and not
to its JV partner namely GPT Infraprojects Ltd. We further enquired,
whether not the said claim of the petitioners was directly in the teeth of the
qualification criteria reproduced hereinabove in the tender document and
which expressly specifies that if the earlier qualifying work had been done
in JV, the bidder shall be entitled to benefit thereof only to the extent of its
share in the JV and not for the entire work. We further enquired from the
senior counsel for the petitioners, whether not the works of such technical
nature, besides the act of physical construction/installation, also entail the
aspects of technical expertise, not only in preparing the drawings but also in
execution of the work and whether not even if it was the petitioner no.1
which, to the exclusion of its JV partner GPT Infraprojects Ltd., had
physically carried out the entire construction/installation work for KRCL,
the contribution of the JV partner namely GPT Infraprojects Ltd. could be
in preparing the drawing/design etc. and in technical supervision and
guidance etc. and which cannot by any means be undermined; after all
KRCL agreed to award the said work, not to the petitioner no.1 alone but to
the JV of petitioner no.1 with GPT Infraprojects Ltd., with GPT
Infraprojects Ltd. as the lead partner. We also mentioned to the senior
counsel for the petitioners, that in fact the ultimate work of construction
and installation is always done by the hands of labourers/workers or
technicians, but who alone are incompetent to take up work or to
successfully execute/complete the same, without proper technical guidance,
supervision and correction, by the contractors, on strength of whose
experience, the work is awarded. We also enquired from the senior counsel
for the petitioners, whether not the position of JV partners and others
involved, in the matter of construction/installation of technical projects, is
akin to legal work including Court work, done in collaboration of several
advocates, paralegals, and for outcome whereof, the paralegals as the
steno/typist who put the pleadings/opinion/proposition/agreement on paper
or for that matter the advocate who has drafted under the guidance and
supervision of a senior advocate, alone cannot claim credit; the same is the
position with respect to arguments in Court-neither the Solicitor/briefing
advocate nor the senior/arguing counsel, to the exclusion of the other, can
alone claim credit for success or take the blame for failure.
17. The senior counsel for the petitioners, with his trademark smile
answered, that "the legal work is very different". However with respect to
the claim of the petitioners being in the teeth of the qualifying criteria
prescribed in the tender document and reproduced above, the senior counsel
for the petitioners has drawn attention to Patel Engineering Limited Vs.
National Highways Authority of India (2005) 118 DLT 623 (DB) to
contend that the clause aforesaid has been interpreted, as contended by the
petitioners. Attention is drawn to passages of the said judgment containing
the qualifying clause therein to show that it was the same as in the present
case. Attention is next invited to the following passages of the judgment:-
"44. The document in question here is an invitation to tender;
it is neither a contract, nor a statutory provision. Its intention
is to define, as accurately as possible the requirements of
NHAI, while eliciting responses from various bidders. The
purpose of each clause is geared at ensuring that the best
available options, having regard to the various technical
criteria, enter the zone of consideration. The object of every
tendering process is to ensure the availability of the best
options, and the elimination of the ineligible or potentially
inefficient parties, who might hold up, or worse, not be in a
position to execute the contract.
45. If one keeps the considerations mentioned earlier, the
spelling out of eligibility criteria, in terms of quantum of
performance, for the previous 7 years, is relevant, and in tune
with the overall objective of the tender process. The question
is, whether in the case of a partner who participates in a
previous Joint Venture, that eventually does not perform, or
where one partner is left holding the responsibility, what
would be the parameters for judging experience.
46. Clause 3.3.1(a) requires that the applicant-bidder should
have "worked on" highway projects during the last 7 years.
The first part of clause 3.3.1(b) spells out the eligibility
criteria, in terms of the quantum of work, to have been
"completed" or "substantially completed". Then comes the
contentious part; weightage to tendering firms who have
"participated" in joint ventures dealing with similar works
would be given in "proportion to their participation in the
Joint Venture".
48. The expressions used by clause 3.3.1 are "experience";
"substantially completed" "successfully completed"; "worked
on" and "participated" all implying performance, execution
or positive achievements/ attainments. These expressions,
coupled with the objects of the tender documents, leave no
manner of doubt that actual experience gathered by a bidder/
applicant has to be examined. The other interpretation,
pressed into service, would result in highly anomalous
results; by an odd fiction, a non-existent joint venture would
be deemed in existence, and its dead letter would bind an
erstwhile partner to a pre-determined fixed share, though the
actual, and otherwise satisfactory higher level of
performance would be ignored. Such a construction, in our
considered view, has no nexus with the object of the relevant
condition or indeed the tendering process. Besides it leads to
arbitrary results."
18. The senior counsel for the petitioners contended that according to the
aforesaid judgment, what is relevant to be seen is, whether the bidder has
actual experience to execute the works for which the tender is invited and
once from the certificate and the TDS certificate issued by KRCL it is clear
that the entire work was done by the petitioner no.1 and payment therefor
from KRCL was received by petitioner no.1, the respondent has erred in
technically disqualifying the petitioner no.1 by not giving credit for the
entire work done for KRCL, to the petitioner no.1 alone and by giving
credit to the petitioner no.1 for only 49% of the said work.
19. Per contra the counsel for the respondent argued that the petitioners
have not filed the Indian Railways Standard General Conditions of Contract
applicable to the subject tender and has drawn attention to Clause 17.15 and
17.15.1 thereof as under:-
"17.15 Credentials & Qualifying Criteria: Technical, financial
eligibility and Bid capacity of the JV shall be adjudged based
on satisfactory fulfilment of the following criteria:
17.15.1 Technical Eligibility Criteria ('a' or 'b' mentioned
hereunder):
(a) For Works without composite components
The technical eligibility for the work as per para 10.1
above, shall be satisfied by either the 'JV in its own name
& style' or 'lead member of the JV'. Each other member
of JV shall have technical capacity of minimum 10% of
the cost of work i.e., each JV member must have
satisfactorily completed during the last 07 (seven) years,
ending last day of month previous to the one in which
tender is invited, one similar single work for a minimum
of 10% of advertised value of the tender.
(b) For works with composite components
(i) The technical eligibility for each component
of work as per para 10.1 above, shall be satisfied
by either the 'JV in its own name & style' or 'lead
member of the JV'. Each other member of JV shall
have technical capacity of minimum 10% of the
cost of any component of work i.e., each JV
member must have satisfactorily completed during
the last 07 (seven) years, ending last day of month
previous to the one in which tender is invited, one
similar single work for a minimum of 10% of cost
of any component of work.
OR
(ii) The technical eligibility for major
component of work as per para 10.1 above, shall
be satisfied by either the 'JV in its own name &
style' or 'lead member of the JV' and technical
eligibility for other components of work as per
para 10.1 above, shall be satisfied by either the 'JV
in its own name & style' or 'any member of the
JV'. Each other member of JV shall have technical
capacity of minimum 10% of the cost of any
component of work. i.e., each JV member must
have satisfactorily completed during the last 07
(seven) years, ending last day of month previous to
the one in which tender is invited, one similar
single work for a minimum of 10% of cost of any
component of work.
Note for Clause 17.15.1:
(a) The Major component of the work for this
purpose shall be the component of work
having highest value. In cases where value
of two or more component of work is same,
any one work can be classified as Major
component of work.
(b) Value of a completed work done by a
Member in an earlier JV shall be reckoned
only to the extent of the concerned member's
share in that JV for the purpose of satisfying
his/her compliance to the above mentioned
technical eligibility criteria in the tender
under consideration."
20. The counsel for the respondent has further contended that, (i) the
aforesaid clause makes it clear that for the purposes of considering the
eligibility of the bidder, when the qualifying work has been done by bidder
in JV with another, the bidder could claim benefit thereof only to the extent
of its share in the JV; (ii) the respondent is not concerned with the internal
arrangement between the bidder and its JV partner in respect of the
qualifying work; (iii) merely because the employer of the qualifying work
has issued a certificate to the effect that the entire work physically had been
done by the bidder and no part of the work had been done by the JV partner
of the bidder or the fact that the entire payment of the qualifying work had
been made in the name of the bidder, is of no avail; (iv) fully knowing that
the petitioners did not meet the qualifying criteria as per the clauses of the
tender document reproduced above, the petitioners sought clarification and
were informed that the tender conditions shall prevail; the petitioners still
bid for the project; (v) be that as it may, the respondent, vide its
communication dated 17th July, 2020 sought clarification from KRCL and
which vide its response dated 18th July, 2020 informed that the qualifying
work was executed by the JV of petitioner no.1 with GPT Infraprojects Ltd.
and as per general terms and conditions of KRCL, irrespective of who has
physically executed the work, the value of the completed work by a
member of the JV is reckoned only to the extent of concerned member's
share in that JV, for the purposes of satisfying their compliance to technical
eligibility and that any internal agreement between the members of the JV,
without approval of KRCL, was not a valid agreement and KRCL had not
accorded any approval to the JV of petitioner no.1 and GPT Infraprojects
Ltd., to allow the petitioner no.1 to do the entire work; (vi) the petitioners
did not qualify on other aspects also; (vii) in Patel Engineering Limited
supra there was no such condition as in Clause 17.15.1 of the general
conditions of contract of the respondent herein; and, (viii) thus the bid of
the petitioners has been technically disqualified in accordance with the
tender conditions.
21. We have enquired from the senior counsel for the petitioners,
whether the JV of the petitioner no.1 with GPT Infraprojects Ltd., for
carrying out the works for KRCL, at any stage come to an end, with the
petitioner no.1 alone taking over the entire work with the consent of KRCL.
22. The answer is in the negative.
23. We have further enquired from the senior counsel for the petitioners,
whether not GPT Infraprojects Ltd., in seeking qualification for other
works, would be entitled to use the work aforesaid done for KRCL.
24. The senior counsel for the petitioners responded, that it was up to to
GPT Infraprojects Ltd. .
25. The aforesaid leads to a situation where for the same work, while the
petitioner no.1 herein is claiming 100% credit instead of 49% credit, being
its share in the JV, the other JV partner namely GPT Infraprojects Ltd. is
also free to claim 51% credit, being its share in the JV, resulting in a total
credit of 151% being claimed for the works for KRCL, and which certainly
cannot be the intent of law.
26. We further enquired from the senior counsel for the petitioners,
whether not the claim of the petitioners, if permitted, would result in a
public work being permitted to be done by persons, who on their own
strength did not have the expertise or experience therefor, but who secured
the work order therefor by making a sham JV with another but which
another never intended to contribute anything to the public work save for
lending its name, to enable a person who was himself was not qualified to
do the work, to secure the said work. We yet further enquired, whether not
the same would also result in such contractors obtaining subsequent works
also for which they again do not have the expertise or experience but by
claiming 100% credit for the earlier work obtained by falsely representing
that the same would be done by a JV having the requisite qualification, and
whether not this would result, not only in encouraging "benami
transactions" and colossal waste of public monies but also physical injuries
to the citizens, from the faulty public works carried out by those
inexperienced to carry out the same.
27. Being confident, that such an interpretation could not have been
intended by the Division Bench of this Court in Patel Engineering Limited
supra, we proceeded to examine the facts in which the observations relied
on were made and find that therein, (i) though the work was awarded to a
JV of the Patel Engineering Limited and "LG" but LG did not measure up
to the performance levels held out, leading to Patel Engineering Limited
eventually taking over the execution of the project entirely; (ii) a
supplementary JV agreement was executed between Patel Engineering
Limited and LG, recording parting of ways between LG and Patel
Engineering Limited, with Patel Engineering Limited taking over and
executing and completing the remaining portion of 75% of the work and all
additional works; (iii) the employer, namely National Highways Authority
of India was intimated about the supplementary agreement by LG; (iv) it
was not in dispute that prior to the date of supplementary agreement, only
25% of the work was completed and the balance 75% plus additional works
had been carried out alone by Patel Engineering Limited; and, (v) the JV
which had been awarded the work had failed and the employer had
accepted Patel Engineering Limited to do the remaining 75% work. It was
in these facts that Patel Engineering Limited was held entitled to take
credit, in a bid for subsequent works, of the entire project cost for the earlier
work, even though Patel Engineering Limited at the time of the award of
that work were a minor JV partner. The law laid down in Patel
Engineering Limited supra cannot thus be applied to the present case
where, not only did the JV between the petitioner no.1 and GPT
Infraprojects Ltd. continued till the completion of the work but KRCL also
till now, is refusing to give credit for the entire work to the petitioner no.1.
Mere physical act of carrying out the works does not qualify the petitioner
No. 1 to the credit for the entire work, ignoring as aforesaid, the technical
and other contributions of its JV partner. Once Patel Engineering Limited
relied upon is not applicable, it is not in dispute that as per the plain
language of the qualifying criteria for the works, relevant clauses whereof
are reproduced hereinabove, the petitioners do not qualify for the work and
nothing wrong is thus found in the rejection by the respondent of the
technical bid of the petitioners.
28. Mention may be made of Pratap Technocrats Pvt. Ltd. Vs. Bharat
Sanchar Nigam Limited 2017 SCC OnLine Del 8747 (DB) where also
though the unsuccessful bidder relied on Patel Engineering Limited supra,
but the same was repelled, reasoning that the contextual setting therein was
different. The same reasons as given above, inter alia were given.
Interestingly, the author of both, Patel Engineering Limited supra and
Pratap Technocrats Pvt. Ltd. supra is the same (Justice S. Ravindra Bhat),
in the former as a puisne member of the Division Bench and in the latter as
the presiding member of the Division Bench.
29. This Court in Rohde and Schwarz Gmbh & Co. Kg Vs. Airport
Authority of India 207 (2014) DLT 1 (DB) held that it is not open for a
bidder to claim experience of another entity as its own experience. It was
further held that the vital test which has to be met is that the bidder must in
fact have the requisite experience although for some reason it may not be
available in his name. In the facts of the present case, the petitioners show
only the certificate and the TDS certificate to claim the experience of the
entire work done for KRCL but without showing that GPT Infraprojects
Ltd., in JV with whom the said work was undertaken to be done, had
abandoned the said work leaving it for the petitioners alone to execute or
that the same was agreed to by KRCL. Moreover KRCL itself is refusing to
give credit for the entire work to the petitioner no.1, to the exclusion of
GPT Infraprojects Ltd.
30. We may also notice that there is no challenge to the clauses
aforesaid in the tender document and on a literal interpretation whereof the
petitioners do not qualify. What the petitioners are wanting is, to be
declared qualified, notwithstanding the same. It has been held in Caretel
Infotech Limited Vs. Hindustan Petroleum Corporation Limited (2019)
14 SCC 81, that a bidder is not entitled to seek alteration of the terms
imposed by the employer/buyer, even if a government or governmental
authority. It was further held that an unnecessary close scrutiny of minute
details, contrary to the view of the tendering authority, makes awarding of
contracts by government and public sectors a cumbersome exercise, with
long drawn up litigation at the threshold, working to a great disadvantage to
the government and public sector. It cannot also be lost sight of that in the
matter of finalising tenders for public works, no delay can be tolerated.
There is no time to conduct a detailed factual investigation into, whether the
petitioner no.1 alone is entitled to 100% credit for the works done for
KRCL. The said adjudication cannot also be done in the absence of GPT
Infraprojects Ltd. who was the lead partner of the JV and along with whom
the petitioner no.1 had bid for and executed the said works. The documents
furnished by the petitioners along with the petition were rightly not
considered sufficient by the TC of the respondent and no error can be found
therewith.
31. There is another aspect of the matter. In Rohde and Schwarz Gmbh
& Co. Kg Vs. Airport Authority of India (2016) 16 SCC 818 it has been
held that the decision making process of the employer or owner of the
project in accepting or rejecting the bid of a tenderer should not be
interfered with; interference is permissible only if the decision making
process is mala fide or is intended to favour someone; decision should not
be interfered with unless is so arbitrary or irrational that the Court could
say, no responsible authority acting reasonably and in accordance with law
could have reached; the decision making process or the decision should be
perverse and not merely faulty or incorrect or erroneous; the constitutional
court is expected to exercise restraint in interfering with the administrative
decision and ought not to substitute its view for that of the administrative
authority; a mere disagreement with the decision making process or the
decision of the administrative authority is no reason for a constitutional
court to interfere; 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 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; merely because the owner
or employer of a project gives an interpretation to the tender documents that
is not acceptable to the constitutional courts, is not by itself a reason for
interfering with the interpretation given.
32. A Division Bench of this Court in Consortium of Siemens Ltd. Vs.
Dedicated Freight Corridor Corporation of India Ltd. 2019 SCC Online
Del 11844 reiterated that under the scope of judicial review, the High Court
could not ordinarily interfere with the judgment of the expert consultant on
the issue of technical qualification of a bidder and that it is not open to the
Court to independently evaluate the technical bids as an appellate authority
and that the Court is normally loath to interfere in contractual matters. It
was further held that the Court should give way to the opinion of the
experts and must realise that the authority floating the tender is the best
judge of its requirements.
33. Recently in L and T Hydrocarbon Engineering Ltd. Vs. Oil and
Natural Gas Corporation Ltd. (2019) 256 DLT 754 also, interpretation as
given by the respondent herein to the clauses aforesaid, given to similar
clauses in the tender document in that case, was found to be reasonable.
34. No other argument has been urged.
35. There is no merit in the petition.
36. Dismissed.
37. The petitioners to pay costs of Rs.1,00,000/- to the respondent
IRCON International Limited, within four weeks of today.
RAJIV SAHAI ENDLAW, J.
ASHA MENON, J.
AUGUST 21, 2020
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