Delhi High Court
Loadstar Equipment Ltd vs Container Corporation Of India ... on 4 July, 2023
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 04th JULY, 2023
IN THE MATTER OF:
+ W.P.(C) 5040/2023 & CM APPL. 19721/2023
LOADSTAR EQUIPMENT LTD ..... Petitioner
Through: Mr. Ankit Jain, Mr. Mukesh Kumar,
Ms. Meenakshi Sood and Mr. Aditya,
Advocates
versus
CONTAINER CORPORATION OF INDIA LTD ...... Respondents
Through: Mr. Chetan Sharma, ASG with
Mr.R.K. Joshi, Mr. Amit Gupta, Mr.
R.V. Prabhat, Mr. Vinay Yadav, Mr.
Saurabh Tripathi, Mr. Ojusya Joshi
and Mr. Aakarsh Srivastava,
Advocates for R-1
Mr. Divjyot Singh and Ms. Priaynshi
Aggarwal, Advocates for R-2.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The Petitioner company has filed the instant Writ Petition, for
issuance of appropriate writ or directions to quash the communication dated
18.04.2023 issued by the Respondent No. 1 (Container Corporation India
Ltd./CONCOR), declaring the Petitioner as technically disqualified from
participating in the tender bearing reference no.
CON/AREA1/TECH/FORKLIFT-20/2023, which was floated by
Respondent No. 1 on their website vide NIT dated 08.02.2023.
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
2. The facts leading up to the present petition are that Respondent No.1
vide NIT bearing reference no. CON/AREA-1/TECH/FORKLIFT-20/2023,
invited applications on the government portal, for bids from Original
Equipment Manufacturers (OEMs)/authorized dealers, through a two packet
online open tendering system, at an estimated total cost of Rs.
38,11,40,000/-, for the design, manufacture, supply, and commissioning of
20 forklifts of capacity 35 tons at specified terminals of Respondent No.
1/CONCOR.
3. Respondent No.1/CONCOR subsequently issued a corrigendum in
respect of the part of the NIT document which lays down qualification
criterion for bidders. Accordingly, Clause 2.1(b) under Section II "General
Instructions to Bidders" was added to the NIT document. The relevant
portion of the NIT document prescribing qualification criterion is as follows:
"2.0 Qualification Criteria
The bidder shall provide satisfactory evidence
acceptable to the Purchaser to show that-
2.1 The bidder is a manufacturer or an authorized
dealer of a manufacturer (as per Annexure 15) having
experience of:
a) Having successfully supplied I executed at least one
single purchase order of Government
departments/CPSEs/SPSEs/Public listed
companies/ICD/DCT /MMLP /Ports/CFS/ CTOs for
similar item during previous three financial years and
current financial year last day of month previous to the
one in which tender is invited. The said item should
have been supplied and commissioned successfully
during the period mentioned above. Work experience
certificate issued by private individual shall not be
considered. Work experience certificate as per format
attached at Annexure-14 should be submitted. The
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
work experience certificate should have been issued
within 90 days prior to tender opening date.
If an authorized dealer submits bid on behalf of the
manufacturer, the same dealer shall not submit a bid
on behalf of another manufacturer in the same tender
for the same item/product. Either Manufacturer OR
their authorised dealer can quote. But both cannot bid
simultaneously for the same item/product in the same
tender.
b) The Tenderer must have received total contractual
payments/ turnover/revenue (income) from operations
of Rs.57.17 Crore in the previous three financial years
(i.e., FY2019-20, FY2020-21 ft 2021-22) and the
current Financial Year last day of month previous to
the one in which tender is invited.
The tenderers shall submit Certificates to this effect
which may be an attested Certificate from the
concerned department I client or Audited Balance
Sheet duly certified by the Chartered
Accountant/Certificate from Chartered Accountant
duly supported by Audited Balance Sheet. For current
Financial Year certificate with regard to received total
contractual payment/turnover/revenue (income) from
operation should be duly certified by the Chartered
Accountant.
Note: Client certificate from other than Govt
Organization should be duly supported by Form
16A/26AS generated through TRACES of Income Tax
Department of India."
4. As per the NIT conditions, bids of participants were to be opened in
two stages on 03.03.2023. The technical bids of the bidders was to be
opened in the first stage, and the financial bids was to be opened only in the
second stage, subject to evaluation of 1st stage technical bids. The Petitioner
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
and Respondent No. 2, the only participating bidders, submitted their
technical bids. Bids of both companies were opened by Respondent No.1 for
evaluation in the technical stage.
5. Upon examination of the bid documents in the technical stage,
Respondent No.1 issued communications to the bidding parties on
23.03.2023 and again on 24.03.2023, calling upon them to submit additional
documents to rectify discrepancies found in the documents, latest by
29.03.2023. The said communications issued by Respondent No.1 have been
reproduced as under:
"With reference to the above E-open tender for
Design, Manufacture, Supply and Commissioning of 20
Nos. of Forklift capacity 35 Ton at specified terminals
of CONCOR, there are some discrepancies found in
documents you have submitted as mentioned below:
1. The name of the company in Udyam Registration
Certificate, PAN, GSTIN etc is showing as M/s
Loadstar Equipment Limited whereas the name
mentioned in other documents like Auditor's
Report, work completion certificate etc is MIs
Loadstar Equipment Private Limited. This needs
to be clarified and relevant documents
(Certificate of incorporation, change of name of
company, Memorandum of association, Article of
association) in support of this name change
should be submitted.
2. Work experience certificate issued by M/s Arcelor
Mittal Nippon Steel India Limited is given on
email. Work experience certificate as per the
Annexure-14 of tender document should be
submitted. Whether MIs Arcelor Mittal Nippon
Steel India Limited is Govt departments/
CPSEs/SPSEs/Public listed companies / ICD /
DCT/MMLP/Ports/CFS/ CTOs? Document in
support of this shall be submitted.
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
3. As per clause 2.1 of Section-II, "Client certificate
from other than Govt Organization should be duly
supported by Form 16A/26AS generated through
TRACES of Income Tax Department of India".
Hence, form 164/26AS generated through
TRACES of Income Tax Department of India shall
be submitted in support of the above-mentioned
point.
4. As per clause 2.4 of Section-II, "The supplier
shall be required to provide a certificate from the
statutory auditor or cost auditor of the company
(in the case of companies) or from a practicing
cost accountant or practicing chartered
accountant (in respect of suppliers other than
companies) giving the percentage of local
content" in this regard you have submitted a
certificate issued by Chartered Engineer rather
than from the statutory auditor or cost auditor of
the company.
5. You have submitted NIL Deviation certificate as
per Annexure-4. But there is a Deviation of
'Controller' make (Refer Sl. No.7 of Schedule-II).
This needs to be clarified.
6. Udyam Registration Certificate submitted by you
has no 'validity till date' available on it hence the
certificate indicating its validity shall be
submitted as EMD exemption depends upon it.
You are requested to submit the above-mentioned
documents through return email latest by 29.03.2023
at 15:00hrs."
6. The Petitioner submitted their reply to the aforesaid communication
and submitted documents to the Respondent vide emails dated 28.03.2023
and 29.03.2023, which are reproduced below:
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
"Dear Sir,
Sub: Submission of requisite Documents, - Ref: Your
letter; CON/AREA-1/TECH/FORKLIFT-20/2023,
dated 23/03/2023,
In reference to your above referred letter in regard to
some of the clarifications/ additional documents to our
bid submitted on 02/03/2023 against your tender ref:
CON/AREA-1/TECH/FORKLIFT-20/2023, for supply
of our heavy duty Forklift LS35-1200, we submit our
reply as under for your kind perusal and consideration
please,
1. Name of our Company: Our company - originally
incorporated on 11/04/2011 - was M/s Loadstar
Equipment Private limited up to 04/09/2022. The
company was converted from Private Limited to Public
Limited and renamed as M/s Loadstar Equipment
Limited on 05/09/2022, which falls in the current FY
2022-23. Hence, the Auditor's reports up to FY 2021-
22 are hi the name of Loadstar Equipment Private
Limited. The Certificate of incorporation,
Memorandum of Association, and Articles of
Association, GST Certificate, PAN Card in support of
the name change are attached at enclosure (1) to this
mail for your ready reference.
2. Work Experience Certificate issued by M/s Arcelor
Mittal Nippon Steel India Limited: Work Experience
Certificate on the Letter Head as per the prescribed
format as in Annexure-14 is pending from our
customer as the authorisation for this format is being
sought. We will submit this certificate before the
deadline tomorrow. M/s Arcelor Mittal Nippon Steel
India Limited is a Joint Venture Company of M/s
Arcelor Mittal S.A. and Nippon Steel Corporation,
both of which are companies public-listed on global
stock exchanges.
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
3. TRACES of Income Tax Department form 16/26AS
in support of Client Certification: The TRACES of TDS
are attached for FYs 2021-22 & 2022-23 at enclosure
(2) for your ready reference.
4. Local Content Certificate from Statutory Auditor or
cost Auditor: Local Content Certificate from our
Statutory Auditor is attached at enclosure (3) for your
reference.
5. Clarification w.r.t. to NIL deviation certificate:
Clarification is herewith attached at enclosure (4).
6. Validity of UDYAM REGISTRATION
CERTIFICATE: As per UDYAM Registration Website,
Ministry of Micro, Small and Medium Enterprises,
there is no Validity date applicable for this certificate.
However, the registration may be at any time verified
by scanning the QR code affixed to the certificate.
Copy of the sample verification is attached at
enclosure (5) for your reference.
We are confident that we have clarified all your points
of discrepancies indicated in your letter and look
forward to your consideration of our offer."
7. On a perusal of the documents submitted by the Petitioner, the Tender
Evaluation Committee of Respondent No.1 found the Petitioner to be
technically not qualified and rejected the bid of the Petitioner vide impugned
communication dated 18.04.2023.
8. The Petitioner thereafter addressed an email to the CMD of
Respondent No. 1, stating that no reasons had been assigned for their
disqualification, and requested the intervention of CMD of Respondent No.
1 to permit the Petitioner to give further clarifications. However, there was
no response to this communication.
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
9. Being aggrieved by the decision of the Respondent No.1 dated
18.04.2023, disqualifying the Petitioner from the tender process, the
Petitioner has filed the instant petition on 19.04.2023, challenging the
impugned communication with the following prayers:
"(i) Certiorari, inter alia quashing the communication dated
18.04.2023 issued by respondent No. 1 to the petitioner
herein contending that the petitioner is not technically
qualified in the tender bearing No. CON/AREA-
1/TECH/FORKLIFT-20/2023;
(ii) Prohibition inter alia restraining the respondent No. 1
from taking any further steps in the tender bearing No.
CON/AREA-1 /TECH/FORKLIFT -20/2023;
(iii) Mandamus, thereby directing the respondent no. 1 to
treat the bid submitted by the petitioner as technically
qualified in the Tender bearing no.CON/AREA-
1/TECH/FORKLIFT-20/2023."
10. Learned Counsel for the Petitioner has drawn the attention of this
Court towards Clause 2.1(a) and 2.1(b) of the NIT and submits that the
Petitioner has requisite experience, and it has previously supplied the
machines as specified in the tender. He states that the reason given by
Respondent No.1 disqualifying the bid of the Petitioner as is reflected in the
counter affidavit is completely arbitrary. He submits that the supplier, i.e.,
M/s Excellent Engineering & Allied Service Private Limited withdrew from
the tender before the last date, and, therefore, this is not a case where both
the manufacturer and the supplier are relying on the same experience
certificate for being considered for award of tender.
11. Per contra, learned ASG for Respondent No.1 submits that the
purported experience certificate is only a purchase order executed by M/s
Excellent Engineering & Allied Service Private Limited and since M/s
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
Excellent Engineering & Allied Service Private Limited is not a listed
company which therefore, does not meet the requirement of Clause 2.1(a) of
the NIT document, which requires that the bidder must have an experience
of successfully supplied/executed at least one single purchase order for a
similar item during the previous three financial years. He also states that the
experience certificate submitted by APL Apollo Steel Pipes was in fact
issued to M/s Excellent Engineering & Allied Service Private Limited which
is also not acceptable because the certificate has not been issued by APL
Apollo Steel Pipes in favour of the Petitioner.
12. Heard learned Counsel for the parties and perused the material on
record.
13. A perusal of Clause 2.1 shows that the qualification criteria stipulates
that a manufacturer or an authorized dealer of a manufacturer must have the
experience of successfully supplying/executing at least one purchase order
of government departments/CPSCs/SPSCs/ Public Limited Companies etc.
for a similar item during the previous three years and the last day of the
current financial year previous to the one in which the tender is invited. It
also stipulates that the bidder and the authorized dealer both cannot
simultaneously bid for the same item or product in the same tender.
14. Admittedly, M/s Excellent Engineering & Allied Service Private
Limited has withdrawn from the tender even before the last date of
submission of the tender. The question that arises for consideration is as to
whether the certificate issued by APL Apollo Steel Pipes to M/s Excellent
Engineering & Allied Service Private Limited for having supplied the
forklift can be considered in favour of the Petitioner who is the manufacturer
and whether the rejection of the said certificate issued by APL Apollo Steel
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
Pipes should be discarded only because it has been issued in favour of M/s
Excellent Engineering & Allied Service Private Limited.
15. Clause 2.1 stipulates that in order to be considered for the tender, the
manufacturer or an authorized dealer has to prove of having successfully
supplied or executed one purchase order. The certificate issued by APL
Apollo Steel Pipes shows that M/s Excellent Engineering & Allied Service
Private Limited has supplied the machine manufactured by the Petitioner.
16. The reason given by Respondent No.1 that just because the certificate
issued by APL Apollo Steel Pipes was in favour of M/s Excellent
Engineering & Allied Service Private Limited. This reason cannot be
accepted because that certificate shows that the machine manufactured by
the Petitioner has been executed by M/s Excellent Engineering & Allied
Service Private Limited with Apollo Steel Pipes.
17. No doubt, it is well settled that judicial review in administrative
actions that too in matters of tender is extremely limited. However, judicial
review can be exercised to prevent arbitrariness, irrationality and
unreasonableness.
18. It is now well settled and has been held by the Apex Court in times
without number that basic requirement of Article 14 of the Constitution of
India in action by the State and non-arbitrariness in essence and substance is
the heartbeat of fair play and State actions are amenable to the judicial
review to the extent that the State must act validly for a discernible reason
and not whimsically. If the State or instrumentality of State does not act
reasonably or fairly in awarding contracts, then the Court has to step in
exercising its powers under Article 226 of the Constitution of India. The
Apex Court in Vice Chairman & Managing Director, City and Industrial
Development Corporation of Maharashtra Ltd. and Another v. Shishir
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
Realty Private Limited and Others, 2021 SCC OnLine SC 1141 has
observed as under:-
"72. Before we state the conclusions, this Court would
like to reiterate certain well-established tenets of law
pertaining to Government contracts. When we speak of
Government contracts, constitutional factors are also
in play. Governmental bodies being public authorities
are expected to uphold fairness, equality and rule of
law even while dealing with contractual matters. It is a
settled principle that right to equality under Article 14
abhors arbitrariness. Public authorities have to ensure
that no bias, favouritism or arbitrariness are shown
during the bidding process. A transparent bidding
process is much favoured by this Court to ensure that
constitutional requirements are satisfied.
73. Fairness and the good faith standard ingrained in
the contracts entered into by public authorities
mandates such public authorities to conduct
themselves in a non-arbitrary manner during the
performance of their contractual obligations.
74. The constitutional guarantee against arbitrariness
as provided under Article 14, demands the State to act
in a fair and reasonable manner unless public
interest demands otherwise. However, the degree of
compromise of any private legitimate interest must
correspond proportionately to the public interest, so
claimed.
75. At this juncture, it is pertinent to remember that, by
merely using grounds of public interest or loss to the
treasury, the successor public authority cannot undo
the work undertaken by the previous authority. Such a
claim must be proven using material facts, evidence
and figures. If it were otherwise, then there will remain
no sanctity in the words and undertaking of the
Government. Businessmen will be hesitant to enter
Government contract or make any investment in
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
furtherance of the same. Such a practice is counter-
productive to the economy and the business
environment in general." (emphasis supplied)
19. It is well settled and has been stated by the Apex Court that
arbitrariness is the antithesis of Article 14 of the Constitution of India and
the State has to act in a fair and reasonable manner. As stated above, in order
to meet the qualification criteria all that had to be shown by the bidder who
is a manufacturer is that it is having the experience of supplying at least one
single purchase order of government departments, CPSEs, SPSEs, Public
listed companies, ICD, DCT, MMLP, Ports, CFS, CTOs for similar item
during previous three financial years and current financial year last day of
month previous to the one in which tender is invited.
20. The reason given by Respondent No.1 that since the certificate has
been issued by APL Apollo Steel Pipes only in favour of supplier, and,
therefore, it cannot inure in favour of the manufacturer, cannot be accepted.
21. At this juncture, it is apposite to reproduce Clause 5.4 along with
Annexure-10 & 11 of the NIT.
"5.4 For purpose of Para 2.1 (a), the bidder should
additionally submit-
(a) Performance Statement as in Annexure-10, giving
a list of major supplies (Forklift of Capacity 32-35
Ton), effected in the last 3 years from the date of
tender opening, giving the details of Purchaser's name
and address, e-mail, telephone No., Fax No., Contact
Person, order No. and date and the quantity supplied
and whether the supply was made within the delivery
schedule as asked in Annexure-10 and information of
Work Experience of Forklifts in Annexure-14.
(b) A statement indicating details of equipment
deployed and quality control measures adopted as in
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
Annexure-11 shall be furnished. Copy of Quality
Management System Certificates to be submitted.
(c) In case the bidder is an authorized dealer of
manufacturer, a certificate with regard to design and
manufacturing from by the manufacturer will be
submitted along with the bid.
(d) In case the bidder is an authorized dealer of
manufacture of Forklift, a certificate as per format
Annexure-15 should be submitted along with bid
document.
xxx
ANNEXURE-10
(Please see Clause-5.4 (a) of Section-II, General
Instructions to Bidders)
PROFORMA FOR PERFORMANCE STATEMENT
DETAILS OF OTHER CUSTOMERS
Tender No........ Date of Opening ....... Time ...... Hours
Name of the Firm
SL. Order Order Description Date of Remarks Has the
No. placed by No. and & quantity completion of indicating FORKLIFT/
(full date of delivery reasons for been
address, e- FORKLIFT late satisfactorily
mail, deliveries, commissioned
telephone if any and is it
no. Fax No. giving trouble
Contact free service?
Person of
Purchaser)
As per Actual
contract
(Signature and seal of bidder)
Note: The details of supply orders for the period of at
least 3 years (36 months) prior to opening of the
tender, should be furnished in above format."
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
ANNEXURE-11
(Please see Clause-5.4 (b) of Section-II, General
Instructions to Bidders)
PROFORMA FOR EQUIPMENT AND QUALITY
CONTROL
Tender No ....................... Date of opening ...............
Time ............. Hours.
Name of the Firm .................................................
(Note - All details required only for the items tendered)
1. Name & Complete Postal address of the firm
2. Telephone, Fax No. Office/Factory/Works
3. E-mail address
4. Location of the manufacturing factory
5. Details of Industrial Licence (if any) wherever
required as per statutory regulations
6. Brief description of plant & machinery erected
and functioning in each Deptt. (Monographs &
description pamphlets be supplied if available).
7. Flow sheet of the process of manufacture of
Forklift machines
8. Production capacity of Forklift Machine quoted
for, with the existing plant & machinery
Monthly Annual
8.1 Normal
8.2 Maximum
9. Brief details of arrangement for quality control
of products such a laboratory, testing Equipment
etc.
10. Organization chart of bidder to be enclosed.
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
11. Whether the Forklift machines are tested to any
standard specification such as ISO, CE, if so,
copies of specimen test certificates should be
submitted.
(Signature and seal of the manufacturer/Bidder)"
22. A cumulative reading of Clauses 2.1, 5.4 along with Annexures-10 &
11 of the NIT only shows that the manufacturer has to show that it has
supplied a machine which has been successfully installed. Similarly,
Annexure-14 also requires the certificate to be given by the manufacturer.
The Petitioner has established that it has fulfilled the eligibility criteria and,
therefore, their bid ought not to have been rejected.
23. During the course of the hearing, this Court had directed the
Respondent No.1 to open the financial bid of the Petitioner also and it
transpires that the Petitioner is the lowest bidder.
24. In view of the above, the writ petition is allowed, along with pending
application(s), if any. The Respondents are directed to proceed ahead in
accordance with law.
SATISH CHANDRA SHARMA, CJ
SUBRAMONIUM PRASAD, J
JULY 04, 2023
hsk/ss
Signature Not Verified
Digitally Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:05.07.2023
17:00:17
