Delhi High Court
Sungrace Energy Solutions Pvt. ... vs Energy Efficiency Services Ltd. on 14 September, 2021
$~ 20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on 02.09.2021
Pronounced on: 14.09.2021
W.P.(C) 5840/2021 &CM APPL. 18296-18299/2021
SUNGRACE ENERGY SOLUTIONS PVT. LTD. ..... Petitioner
Through: Mr. Rohit Rathi, Adv.
versus
ENERGY EFFICIENCY SERVICES LTD. ..... Respondent
Through: Mr. Vikram Jetly, CGSC for R-1.
Mr. Samdarshi Sanjay, Adv. with Mr. Prakash Jha
GM Legal & Mr. Kumar Saurabh, AGM (SCM),
Mr. Nikhil Bhandari AM (SCM) for Respondent,
Energy Efficiency Services Ltd.
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
HON'BLE MR. JUSTICE JASMEET SINGH
JUDGMENT
: JASMEET SINGH, J
1) The writ petition has been filed seeking the following substantive
prayers:
a) Quash and set aside the impugned communication dated 20.05.2021
issued by the Respondent No. 2 insofar it fails to include the Petitioner in
the 'Envelope Name: Price Bid'
b) Quash and set aside the impugned e-mail communication dated and
21.05.2021 issued by the Respondent No. 2 to the Petitioner;
c) ...
d) Direct the Respondent No. 2 to re-conduct the entire bidding process in
terms of the IFB;
e) Stay further process with respect to Open Tender NIT/Bid Doc. No.:-
EESL/ 06/ 2020-21/ KUSUM/ WPS /1-10 HP/ Off Grid/ 202101032 dated
14.01.2021 issued by the Respondent No. 2;
f) Direct the Respondents to provide reason(s) for rejection of Technical
Qualification bid of the Petitioner;
g) Pass any such other order / directions as this Hon'ble Court deems fit
and proper in the facts and circumstances of the case;"
Signature Not Verified
W.P.(C) 5840/2021
Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
2) The Petitioner is stated to be one of India's oldest leaders in the solar
industry with over 20 years of experience. The Petitioner is into
manufacturing of various products including Crystalline Solar
Photovoltaic module of multiple ranges and provides varied solutions
including Solar Water Pumping.
3) The respondent is Energy Efficiency Services Limited (EESL) and is a
Super Energy Service Company (ESCO), which enables consumers,
industries and governments to effectively manage their energy needs
through energy efficient technologies. EESL was founded in 2009,
promoted by Ministry of Power, Government of India as a Joint Venture
of four reputed public-sector undertakings namely a) NTPC Limited, b)
Power Finance Corporation Limited, c) REC Limited and d)
POWERGRID Corporation of India Limited.
4) On 14.01.2021, respondent No. 2 invited Detailed Invitation for Bids
(IFB) for design, manufacture, supply transport, installation, testing and
commissioning of Off Grid Solar Photovoltaic Water Pumping Systems
of 1-10 HP in Selected States on PAN India basis, including complete
system warranty and its repair and maintenance for 5 Years under
MNRE KUSUM scheme Component-B.
5) Respondent invited e-bids from eligible bidders for the aforesaid work
under Single-stage Three-envelope bidding process through E-tendering.
6) Pursuant to the IFB dated 14.01.2021, petitioner submitted its bid with
the relevant documents vide the E-tendering process, as per the format
prescribed by the respondent. The Petitioner submitted their documents
on 16.02.2021 and the Respondent issued the Envelope receipt on
16.02.2021 and duly acknowledged the documents.
7) On 03.03.2021, the Technical Qualification bids were opened by
Respondent No.2 and the petitioner's bid was rejected, insofar the
petitioner was not included in the 'Envelope Name: Price Bid'. Vide
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Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
communication dated 20.05.2021, the petitioner got to know that his
technical bid had been rejected.
8) Aggrieved by the said communication, the petitioner on the same date
i.e. 20.05.2021 addressed a communication to respondent No. 2 thereby
stating, inter-alia, that as a fair practise -all the bids should have been
opened to all participating tenderers to ensure no one is duly favoured.
Subsequent to the said communication, respondent No.2 on 21.05.2021
vide an auto- generated response, informed the petitioner that the
petitioner's bid was found to be non-responsive for technical evaluation.
Since no reply was received for the communication dated 20.05.2021,
the petitioner filed the aforesaid writ petition.
9) When the matter came up before this Court on 04.06.2021 this Court
directed the respondent to file the Counter affidavit (within 4 weeks).
This Court further directed the tender in question not to be finalised till
the next date of hearing.
10) Pursuant to our order of 04.06.2021, the respondent has filed a counter-
affidavit and the reason for rejection has been stated in Para B(x) which
reads as under:
"(x) It is submitted that at the stage of Technical Evaluation, the Bid of the
Petitioner was found non-responsive, since the Bidder has participated in 4
Clusters (States) the requirement of cumulative turnover was Rs. 111.25
crores approximately. The bidder is of MSE category and was given
relaxations to have one fourth of the annual cumulative turnover in
accordance to Clause 2.4 of section 2 of RFP at page 47 to 49 of
ANNEXURE-R/1 being the Bid Document. Still Bidder could not qualify for
consideration as its ATO was less than the minimum required. So due to
this fact the Technical Bid of the Petitioner was rejected. Reference RFP
Document: "(Page No 16) Participating Bidder should have average
annual Turnover (ATO) as per table 2 at page No 201 and 202 for any
three years out of the last four financial years. As note, it is mentioned that
the combined ATO for all the states applied by the bidder shall be
considered for evaluation." True copy of the entire Tender Documents
pertaining to the Bid in question is appended hereto as ANNEXURE-R/1."
11) Even though the counter affidavit is cryptic on detailed reasons for
rejection and says that "any three years out of the last four financial
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Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
years," shall be taken for the ATO, the learned counsel for the
respondent during argument has stated that the Respondent has taken the
average for the years 2017-18, 2018-19 and 2019-20 which comes to
26.52 crores (approx.) and does not cross the threshold limit of 28.56
crores (approx.). Hence the rejection.
12) We have heard the learned counsel for the parties and gone through the
documents before us. It will be relevant to reproduce the Qualification
Requirement contained in Annexure-II which reads as under:
"Annexure II
QUALIFYING REQUIREMENT (QR)
In addition to the satisfactory fulfilment of-requirements stipulated under section ITB, the following shall also
apply:
Sr. No. Criteria Documents to be submitted Particulars in brief of the
(A) (B) (C) Documents submitted by the
Bidder on Covering Letter
(D)
1. .....
2. .....
3. Duly authorised copy of audited
annual report/ Balance Sheet for
Bidders should have Average any three financial years out of M/s
Annual Turnover (ATO) as last four years (i.e. 2016-17, 2016-17
per Table 2 below for any 3 2017-18, 2018-19 and 2019-20) 2017-18:
years out of the last 4 years is to be submitted by respondent 2018-19:
i.e 2016-17, 2017-2018, 2018- along with CA certificate. 2019-20
2019 and 2019- 2020.
Turnover means operating Refer Format-1 in
income. Annexure-III
Profitability means: Profit after
tax.
(emphasis supplied)
13) The documents to be submitted to satisfy the above Qualification
Requirement was to be as per Format 1 in Annexure-III which reads as
under:
Signature Not Verified
W.P.(C) 5840/2021
Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
"ANNEXURE-III
Format 1
Information on Average Annual Turnover
[To be printed on the Letterhead of the bidder including full postal address, telephone, faxes
and e-mail address]
Annual Turnover Data for the last 3 years
Year Net Worth (in INR) Annual Turnover (in
INR)
2019-20
2018-19
2017-18
2016-17
Annual Average
(This format should be certified by the practicing CA's of the Bidder)"
14) The certificate submitted by the Petitioner in compliance to Annexure-
III Format 1 reads as under:
"SUNGRACE ENERGY SOLUTIONS PVT. LTD.
www. sungrace.net
SUNGRACE CIN : U40109TG1999PTC031653
ANNEXURE-III
Format - 1
Information on Average Annual Turnover
Annual Turnover Data for the Last 3 Year
Year Net Worth (in INR) Annual Turnover (in INR)
2019-20 9,59,77,285 17,27,89,503
2018-19 9,46,85,635 29,00,56,916
2017-18 7,39,31,574 33,28,14,572
2016-17 5,12,32,175 26,95,18,590
Annual Average for 3 years out of 7,32,83,128 29,74,63,359
the last 4 years (2016-17 to 2018-
19)
T. Ravi Kumar V.V.S. Ramakrishna
Director Chartered Accountant
Sungrace Energy Solutions Pvt. Ltd. M.No. 026583
Siva Rama krishna & Associates
Chartered Accountants
UDIN: 21026583AAAABU9993"
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Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
15) The learned counsel for the Respondent has made a feeble attempt to
argue that since "Annual Turnover Data for the Last 3 Years" has been
mentioned in Format 1 of Annexure III, the Petitioner was required to
only give, and the Respondent was required to only consider, the Annual
Turnover Data for the last 3 years namely 2019-20, 2018-19 and 2017-
16) We have had the occasion to deal with the said clauses of the IFB in a
similar petition viz. Gautam Solar Pvt. Ltd. v. Energy Efficiency
Services Limited, W.P.(C) No. 8076/2021, decided on 12.08.2021,
wherein we have rejected the above submission by holding as follows:
"16. A bare perusal of the Row 3 of the Table in Annexure II, read in
conjunction with Annexure- III, Format 1, clearly demonstrates that the
bidder - to be qualified, had to demonstrate the requisite Average
Annual Turnover, by taking into consideration the Turnover of "any 3
years out of the last 4 years i.e. 2016-17, 2017-18, 2018-19 and 2019-
20". If the intention of the Respondent was to consider the data of only
the last the 3 years i.e. 2017-18, 2018-19 and 2019-20, then there was no
need for the Respondent to mention "any 3 years out of the last 4 years
i.e. 2016-17, 2017-18, 2018-19 and 2019-20" in Annexure II of the
Qualifying Requirements. The substantive provision/clause on Qualifying
Requirements is the one contained in Annexure III extracted above. It
refers to Format 1 in Annexure III. Therefore, even if there is any conflict
or ambiguity between what is stated in the Qualifying Requirements, and
what is stated in the Format 1 in Annexure III, it is the Qualifying
Requirements, which would rule, and not what is stated in the tabulation
in Format 1 in Annexure III. It is also pertinent to note that even Format
1 in Annexure III permits the Bidders to provide the Annual Turnover
data for four years i..e 2016-17, 2017-18, 2018-19 and 2019-20. This is
in consonance with the Qualification Requirements contained in
Annexure II. The mere use of the words "Annual Turnover Data for the
last 3 years" in Format I is neither here, nor there. The same has to be
read and understood as referring to the data of three financial years
which the bidder seeks to rely upon to claim eligibility in terms of the
Qualifying Requirements.
17. Since the Format I in Annexure III, provided four rows to provide the
turnover data for the four years aforesaid, no fault can be found with the
bidder for providing the turnover data for all the four years. It does not
follow that this action of the bidder gives an option, or an opportunity, to
the respondent to disqualify the bidder by ignoring the Turnover figures
of the year which, if taken into consideration, would qualify the bidder.
Signature Not Verified
W.P.(C) 5840/2021
Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
18. Had it been the intention of the Respondent to consider the turnover
data of the last 3 years only, the word „any‟ would not have been used
in the Qualifying Requirements. The year 2016-17 would not have been
specifically mentioned either. The said word cannot be rendered
redundant. There is absolutely no ambiguity in the relevant clause in the
Qualifying Requirements. It clearly permits the bidder to calculate the
Average Annual Turnover by considering the Annual Turnover for "any"
three years out of the four years specifically mentioned i.e. 2016-17,
2017-18, 2018-19 and 2019-20. The words "any" and the mention of
four years, including the year 2016-17 would have to be ignored from the
Qualifying Requirements, if the interpretation of the respondents were to
be accepted. Even Format 1 in Annexure III provides one row for each
2016-17, 2017-18, 2018-19 and 2019-20. If only the last three years
Turnover data were relevant, and if only those figures could be
considered, there was no purpose of calling for or providing space in the
said tabulation to provide the turnover data for 2016-17. An
interpretation which gives meaning to the words used in the Tender
Document has to be preferred over one which renders its substantive
terms redundant. Where the plain English reading conveys a particular
meaning, it is not open to Respondent to ignore the words to convey a
different meaning.
19. In Central Coalfields Limited & Anr. V. SLL-SML (Joint Venture
Consortium) & Ors.(2016) 8 SCC 622:
"33. In Ramana Dayaram Shetty v. International Airport Authority of
India this Court held that the words used in a document are not
superfluous or redundant but must be given some meaning and
weightage:
7...It is a well-settled rule of interpretation applicable alike to documents
as to statutes that, save for compelling necessity, the Court should not be
prompt to ascribe superfluity to the language of a document "and should
be rather at the outset inclined to suppose every word intended to have
some effect or be of some use." To reject words as insensible should be
the last resort of judicial interpretation, for it is an elementary rule based
on common sense that no author of a formal document intended to be
acted upon by the others should be presumed to use words without a
meaning. The court must, as far as possible, avoid a construction which
would render the words used by the author of the document meaningless
and futile or reduce to silence any part of the document and make it
altogether inapplicable."
17) In the present case, the interpretation as sought by the Respondent
would make the word 'any', a surplusage, which cannot be the intention
of the document. The whole purpose of the issuing Rules/instructions is
to ensure their enforcement lest the Rule of law should be a casualty.
18) Moreover, in W.B. SEB v. Patel Engg. Co. Ltd., (2001) 2 SCC 451, the
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Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
Apex Court emphasised on maintaining sanctity and integrity of process
of tender/bid and also award of a contract as well as ".........adherence
to the instructions cannot be given a go-bye 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 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."
19) Further it is a well settled rule of administrative law that an executive
authority must be rigorously held to the standards by which it professes
its actions to be judged and it must scrupulously observe those
Standards on pain of invalidation of an act in violation of them. The
Apex Court in Ramana Dayaram Shetty v. The International
Airport Authority of India & Ors., (1979) 3 SCC 489, applying this
rule held that:
"Now, there can be no doubt that what paragraph (1) of the notice
prescribed was a condition of eligibility which was required to be
satisfied by every person submitting a tender. The condition of eligibility
was that the person submitting a tender must be conducting or running a
registered 2nd class hotel or restaurant and he must have at least 5
years' experience as such and if he did not satisfy this condition of
eligibility his tender would not be eligible for consideration. This was the
standard or norm of eligibility laid down by the 1 st respondent and since
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Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
the 4th respondents did not satisfy this standard or norm, it was not
competent to the 1st respondent to entertain the tender of the 4th
respondents. It is a well settled rule of administrative law that an
executive authority must be rigorously held to the standards by which it
professes its actions to be judged and it must scrupulously observe those
Standards on pain of invalidation of an act in violation of them. This rule
was enunciated by Mr Justice Frankfurter in Viteralli v. Seton(l) where
the learned Judge said:
"An executive agency must be rigorously held to the standards by which
it professes its action to be judged. Accordingly, if dismissal from
employment is based on a defined procedure, even though generous
beyond the requirement that bind such agency, that procedure must be
scrupulously observed. This judicially evolved rule of administrative law
is now firmly established and, if I may add, rightly so. He that takes the
procedural sword shall perish with the sword."
20) If the respondent had any other intention in mind, the wording of the
Annexure should have been different from the one framed herein.
21) We would also rely on the Doctrine of 'verba chartarum fortius
accipiuntur contra proferentem.' The respondent in the present case
was the master of drafting the terms of the tender. If the respondent had
any other intention in mind, the wordings of the Annexures should have
been different as framed herein.
22) As observed in Industrial Promotion & Investment Corporation of
Orissa Ltd. v. New India Assurance Co. Ltd. And Anr, (2016) 15 SCC
315 thus:
"10. ..The Common Law rule of construction "verba chartarum fortius
accipiuntur contra proferentem" means that ambiguity in the wording of
the policy is to be resolved against the party who prepared it. Mac
Gillivray on Insurance Law[1] deals with the rule of contra proferentem
as follows:
"The contra proferentem rule of construction arises only where there is a
wording employed by those drafting the clause which leaves the court
unable to decide by ordinary principles of interpretation which of two
meanings is the right one. "One must not use the rule to create the
ambiguity - one must find the ambiguity first." The words should receive
their ordinary and natural meaning unless that is displaced by a real
ambiguity either appearing on the face of the policy or, possibly, by
extrinsic evidence of surrounding circumstances...."
23) The said principle of 'verba chartarum fortius accipiuntur contra
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Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
proferentem' has also been applied by the Supreme court in the case of
Bank of India and Anr. v. K. Mohandas and Ors, (2009) 5 SCC 313
wherein the court observed thus:
"32. The fundamental position is that it is the banks who were responsible for
formulation of the terms in the contractual Scheme that the optees of
voluntary retirement under that Scheme will be eligible to pension under
the Pension Regulations, 1995, and, therefore, they bear the risk of lack
of clarity, if any. It is a well-known principle of construction of a contract
that if the terms applied by one party are unclear, an interpretation
against that party is preferred (verba chartarum fortius accipiuntur
contra proferentem)."
24) In this view of the matter, in terms of Column 3 of Qualifying
Requirements, the Petitioner was entitled to take the average ATO of any
of the 3 years out of the last 4 years i.e. 2016-17, 2017-2018, 2018-2019
and 2019- 2020, which suited him best. The Petitioner has clearly stated
in the Annexure III Format-1, that it has considered the Annual Average
Turnover for 3 years i.e. 2016-17 to 2018-2019. The Respondents should
have accepted the same and scrutinised the bid of the Petitioner on that
basis.
25) Consequently, we quash the communication dated 20.05.2021 and direct
for the recalculation of the Average Annual Turnover of the Petitioner
and assess its responsiveness in Technical evaluation.
26) With these observations, the above Writ Petition is allowed.
JASMEET SINGH, J
VIPIN SANGHI, J
SEPTEMBER 14 ,2021/ 'ms'
Signature Not Verified
W.P.(C) 5840/2021
Digitally Signed By:AMIT
ARORA
Signing Date:15.09.2021
18:40:49
