Gujarat High Court
Shimnit India Pvt. Ltd vs State Of Gujarat on 23 January, 2023
Bench: Ashutosh Shastri
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17445 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 17448 of 2022
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SHIMNIT INDIA PVT. LTD.
Versus
STATE OF GUJARAT
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Appearance in SCA/17445/2022:
MR. AMAN PREET SINGH, ADVOCATE with MR. BHAVESH B. CHOKSHI,
ADVOCATE for the petitioner(s) No.1,2
MR. K. M. ANTANI, AGP for the Respondent(s) No. 1
Appearance in SCA/17448/2022:
MR. M. R. BHATT, ADVOCATE for M. R. BHATT & CO. for the
petitioner(s) No.1,2
MR. K. M. ANTANI, AGP for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
ARAVIND KUMAR
and
HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
Date : 23/01/2023
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI)
[1] By way of these two petitions, petitioners have challenged
certain clauses of tender document floated by respondent
authority in the month of August, 2022. Since the nature of
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
challenge and the issue involved is common in nature and on
request made by learned advocates appearing for the respective
sides, they are taken up conjointly and for the sake of
convenience since the controversy is identical, Special Civil
Application No. 17445 of 2022 is treated as the lead matter.
[2] Petitioners in this lead matter i.e. Special Civil Application
No. 17445 of 2022 we notice that petitioner No.1 is a Company
incorporated and registered under the provisions of the
Companies Act, 2013 and petitioner No.2 is an authorized
Representative and Manager of Company. Under the provisions
of Motor Vehicles Act, 1988 all motor vehicles are required to
be registered under the Act and motor vehicle is given
registration mark by registering authority in view of Section
41(6) of the Act and the said registration mark is required to be
displayed on the body of vehicle in view of the guidelines framed
under Rule 50 read with 51 of the Central Motor Vehicle Rules.
The Government of India has amended Rule 50 of the Central
Motor Vehicle Rules, 1989 (hereinafter referred to as "CMV
Rules") and notified vide Gazette Notification No.221(E) dated
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
28.03.2001 (with effect from 28.09.2001) to introduce High
Security Registration Plate (HSRP) system in India, for all types
of vehicles and according to petitioners, in furtherance of
powers under Section 109(3) of the CMV Rules, the Central
Government was also pleased to issue the order named as the
Motor Vehicles (New High Security Registration Plate) Order,
2001 ("HSRP Order" hereinafter). The amended Rule 50 of the
CMV Rules and the HSRP Order, 2001 constitutes the scheme
named as HSRP Scheme. This scheme is prevailing right from
the year, 2001 in various State Governments and all efforts
were made to implement HSRP Scheme. The Hon'ble Apex
Court in PIL No. W.P.(C) 510 of 2005 in the case of M.S. Bitta
versus Union of India and Ors. was pleased to direct the State
Governments to implement the scheme in its true spirit and
various orders have been passed which would indicate the
significance of HSRP Scheme and its implementation. The
Hon'ble Apex Court has also indicated in the judgment, how
care has to be taken in respect of tender process of HSRP and
how it has to be implemented across the country.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[3] It is the case of the petitioners that in furtherance of this
the Ministry of Roads Transport and Highway, Government of
India had issued guidelines from time to time to the State
Governments to introduce High Security Registration Plate for
all types of vehicles in the States. In response to it, the State of
Gujarat is also implementing HSRP Scheme for both new and
old vehicles right from the year 2012. In order to streamline,
the process of implementation of HSRP, the Ministry of Road
Transport and Highways issued notification G.S.R. 1162(E)
dated 04.12.2018 amending Rule 50 of the CMV Rules, 1989
with effect from 01.04.2019. Further on 06.12.2018, Motor
Vehicles (High Security Registration Plates) Order, 2018 was
also introduced with effect from 01.04.2019. In view of this
provision, Clause 4 of the order provides HSRP for new vehicle
sold on or after 01.04.2019 has to be supplied by Vehicle
Manufacturing Company and reading of this Clause 4, according
to petitioner, is clear that a vehicle manufacturer has to supply
the type approved HSRP to its dealers for affixing it in all new
vehicles purchased on or after 01.04.2019. For this purpose,
Vehicle Manufacturer has to purchase these HSRPs from
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
Original Equipment Manufacturers (OEMs) i.e. Type Approved
Certificate Holders, like petitioner company, if the vehicle
manufacturer does not hold a Type Approved Certificate for
manufacture of the HSRP.
[4] It is the case of the petitioners that though vehicle
manufacturing companies are bestowed with the responsibility
of HSRP supply for all new vehicles sold on or after 01.04.2019
by procuring from the approved companies, same was not
satisfactorily worked. Petitioner being OEM is supplying HSRP
to various vehicle manufacturing Companies in various states
like Arunachal Pradesh, Manipur, Mizoram, Nagaland and
Meghalaya, which, in turn, sends it to the dealers for affixing on
the vehicles in accordance with the HSRP Rules. Clause 5 of
the order 2018 provides HSRP for new vehicle sold on or after
01.04.2019 and as such though the dealer of vehicle
manufacturing companies is bestowed with responsibility of
HSRP supply for all existing vehicles sold even before
01.04.2019, but same has to be fulfilled by such dealers of
Vehicle Manufacturing Companies by procuring HSRPs from
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
Original Equipment Manufacturers i.e. Type Approved
Certificate holders like the petitioner company. By virtue of
Clause 5(ii) of HSRP Order, 2018, the State Government is
authorized to enter into contract with manufacturer of HSRP by
publishing appropriate tender. According to petitioners, such
tender or the condition therein cannot make any OEM ineligible
to participate in a tender issued under Clause 5(ii) when the
very same OEM is eligible and is supplying HSRPs to vehicle
manufacturing Companies and Dealers of the vehicle
manufacturing companies. Thus the OEM of HSRPs, who are
manufacturing and supplying HSRP to vehicle manufacturing
companies are equally eligible to supply of HSRP to the State
Government both under Clauses 5(i) and 5(ii) of the Order,
2018.
[5] It is the case of the petitioners that in furtherance of this,
respondent State Government issued a tender i.e. Commissioner
of Transport, Government of Gujarat, Ports & Transport
Department, Gandhinagar, Gujarat on 12.08.2022 in view of
Clause No.5(ii) of HSRP Order, 2018. According to the
petitioners, two conditions are in the nature of avoiding
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
competition and are unreasonable and arbitrary and to facilitate
few companies who participate in tender and to oust many
others, including the petitioners and as such the petitioners
challenge the Conditions 2(B)(q) and 2(B)(s) of the impugned
tender dated 12.08.2022, the relevant portion thereof reads as
under:-
"2(B) Project Experience of the Bidder:
q) The Bid of any Bidder or any of eligible member of
consortium who has been terminated / blacklisted /
debarred by any of the State Transport Departments in
India pertaining to the HSRP scheme shall be summarily
rejected.
s) The Type Approval Certificate (TAC) and Conformity of
Production (COP) of the Bidder should never have been
cancelled or suspended by the issuing authority from the
date of issuance till the bid submission date. An affidavit
to this effect shall be submitted by the Bidder."
[6] It is the case of the petitioners that tender Condition 2(B)
(q) read above, there is no time period i.e. within which period
the event of termination / blacklisting / debarring ought not to
have occurred and by adding this impugned clause without any
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
limitation, the State Government can oust an OEM from
participating in the tender for all time to come, who is otherwise
manufacturing and supplying HSRPs in other states, which is
not permissible. In addition to this, the said tender provides
terminated bidders alongwith blacklisted and debarred bidders
which may not have same nexus or reason for occurrence. A
contract can be terminated for various reasons, but all such
contractors may not be blacklisted or debarred since
blacklisting and debarring is altogether a different action and as
such according to petitioners, the clause is completely vague,
which is in the nature of limiting the healthy competition and
excluding a particular OEM like petitioner from the bidding
process, who is otherwise eligible to bid under Clause 5(ii) of
the HSRP Order, 2018.
[7] Similarly in tender Condition 2(B)(s), as indicated above,
there is no time limit within which period the event of
cancellation or suspension of Type Approval Certificate (TAC)
and Conformity of Production (COP) of the bidder ought not to
have occurred and by inserting this impugned clauses, the State
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
Government can oust an OEM from participating in the tender
for all time to come and as such also it is impermissible. By
raising multiple contentions and detailing out factual details,
petitioner has submitted that petitioner is OEM and presently
working in five (5) states as indicated in paragraph 3.9 on RTO
Model i.e. where HSRP implementation (Old) is being
implemented. However, in view of Conditions 2(B)(q) & (s) of
tender in question, petitioner is ousted from bidding process in
Gujarat State on a simple ground that its earlier / other tender
contract has been terminated or on the ground that its Type
Approval Certificate (TAC) and Conformity of Production (COP)
has been suspended in a particular State. It has been submitted
that State Government contracts of Rajasthan, Karnataka, Goa,
UP of the petitioner were terminated somewhere in the year
2006. Though such terminations were for a limited period,
which period has already elapsed and thereafter, petitioner was
qualified OEM and has been supplying HSRPs in many States of
India as also to vehicle manufacturers, yet considering the fact
that petitioner was suspended by Central Road Research
Institute (CRRI), due to such suspension though for a period of
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
24 hours only, petitioner would not qualify for tender in
question issued by the respondent and as such petitioner being
OEM, which is otherwise eligible both under Clauses 4 and 5(i)
of HSRP Order, 2018 cannot be treated as not eligible under
Clause 5(ii) by a tender condition prescribed by the State
Government and cannot act in countenance or de hors what is
provided under the Rules and cannot create an impermissible
distinction or discrimination amongst the equals. The tender
process has been scheduled in the manner in which it has been
provided in paragraph 3.11 and as such said tender conditions
stipulated in the bid documents, the actions of State authority
are wholly untenable, unreasonable, tailor made to favour some
of the bidders and left with no other alternate, petitioners are
constrained to approach this Court by way of present petition
under Article 226 of the Constitution of India and they have
sought for the following reliefs:-
"8.(A) Issue a Writ of Mandamus or any other
appropriate writ or order or direction quashing and setting
aside the impugned Clauses being clause 2B(q) and 2B(s)
of the Tender Document for Selection of Supplier for High
Security Registration Plates (HSRP) Project I in the State
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
of Gujarat floated by Respondent Commissioner of
Transport, State of Gujarat on 08.2022 (ANNEXURE-P1) or
an order directing the Respondent Government of Gujarat
to delete or suitably amend the said impugned clauses so
as to remove the bar of eligibility of bidders, as has been
created by virtue of the said clauses; and
(B) Pending disposal of the above writ petition, this
Honourable Court may be pleased to stay the proceedings
in connection with the Tender / Bid Document for
Selection of Supplier for High Security Registration Plates
(HSRP) Project-I floated on 08.2022 by the respondent
Commissioner of Transport, State of Gujarat, in the
interest of justice and equity;
OR IN THE ALTERNATIVE
This Hon'ble Court may be pleased to permit the petitioner
to submit its bid in respect of the Tender / Bid Document
for Selection of Supplier for High Security Registration
Plates (HSRP) Project-I floated on 08.2022 and further be
pleased to direct the respondent to consider the same in
accordance with law;
(C) An ex-parte and interim relief in terms of Para (b)
above may kindly be granted.
(D) Pass such other orders, directions, writ etc., as
this Hon'ble Court may deem fit in the interest of justice
and equity."
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[8] In cognate petition i.e. Special Civil Application No.17448
of 2022 the petitioner No.1 is a Private Limited Company,
having its registered office at Gandhinagar and is in the
business of supply for High Security Registration Plates
requirements brought about by virtue of amendment to Rule 50
of the CMV Rules as indicated in the lead petition. Whereas
petitioner No.2 is the authorized Director who is a citizen of
India. The background of facts of this petition is that respondent
in May, 2011 had floated a tender for "Selection of Supplier for
High Security Registration Plates in State of Gujarat" and that
was in furtherance of project to be implemented on "Build, Own
and Operate (BOO)" basis. The selected bidder was supposed to
assemble, establish, procure technology, design, develop,
produce, emboss, affix and distribute the HSRP and other
incidental work. This tender was floated by the respondent to
keep in line with the order from Ministry of Road Transport and
Highways, New Delhi Gazette Notification dated 28.03.2001 and
many others, which basically required ensuring uniformity in
size, colour and specifications of the Registration Plates all over
India in all types of vehicles, being registered or already
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registered. The estimated cost of project as mentioned under
Clause 1.1.6 of the tender was stated to be Rs.500/- crores. The
contract was to be awarded on concession basis, with the
concession period being 15 years from the date of signing the
concession agreement. Clause 1.3.1 stated that period of 15
years was extendable by a further period of 5 years in the event
respondent was satisfied with the concessionaire's performance.
Clause 2.2 of the tender which talks about "Eligibility of
Bidders", the Technical and Project Experience required from
bidder was specified, which in the petitioners' submission was
extremely competitive considering the project cost to be
Rs.500/- crores. A perusal of the condition, according to
petitioners, would reveal that idea of the respondent was to
thrash out "fly-by-night" bidders and to receive the bids only
from genuine bidders, who are both technically and
commercially qualified.
[9] It is the case of the petitioners that in spite of such
stringent requirements, petitioner No.1 was adjudged as eligible
bidder and pursuant to which a concession agreement was
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
executed on 26.05.2012 for a period of 10 years. In addition to
the other requirements, the scope of project as defined under
Clause 2.1 required the petitioner No.1 to set up atleast 1
manufacturing plates in the State of Gujarat capable enough to
meet the requirement of HSRP in Gujarat and set up atleast 4
individualization stations one for each zone in the area for
performing embossing and other individualization procedures
and setting up affixing stations at RTO / ARTO premises. Clause
3.2 indicates that period of concession was 10 years, with an
extension of 5 years possible in the event respondent was
satisfied with petitioner No.1's performance. Said concession
agreement and the concession period therein was to expire on
25.05.2022 and as such before expiration of such period,
petitioners wrote a letter on 09.03.2022 to the respondent
informing that progress undertaken by petitioners post award of
tender in the year 2011 they have installed a state-of-the-art
manufacturing facility with production capacity of 50,000 plates
per shift. The petitioner No.1 had also set up operations in 36
Regional Transport Offices (RTOs) across the State and
employed in excess of 250 local manpower, thereby providing
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
ample employment as well and by projecting the same,
petitioners requested to extend the concession period for a
further period of 5 years. Despite the said request having been
specifically made nothing was heard and yet another letter was
written on 19.05.2022 to continue the period of 5 years since
petitioner No.1 is functioning since about 10 years in the field.
However, without granting any extension of 5 years, the
respondent wrote a letter on 01.06.2022 and decided to extend
the concession period only for 6 months or till the time a new
bidder was selected pursuant to issuance of new tender by the
respondent. Resultantly, in the event no bidder was selected by
the respondent, the concession period was to extend upto
01.12.2022. This process was smoothly going on but in the
meantime, petitioners came to know that respondent has chosen
to float a new tender for "Selection of Supplier for High Security
Registration Plates in State of Gujarat" in August, 2022 for
vehicles registered in the State prior to 01.04.2019. The
estimated project cost for the new tender was mentioned as
Rs.26/- crores, with the concession period of 5 years, extendable
by 2 years further. The said tender was floated by respondent
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
in August, 2022 and perusal of the said conditions being
arbitrary, unworkable, unreasonable and with an intent to
consciously oust the petitioners and the like companies, the
petitioners are constrained to approach this Court by way of
present petition under Article 226 of the Constitution of India.
As a matter of fact, on 19.08.2022 several pre-bid queries were
raised, as a result of this, a corrigendum was also issued on
29.08.2022 in which certain clarifications have been issued.
However, none of the grievance voiced by the petitioners have
been addressed and as such petitioners have approached this
Court for the following reliefs:-
"23.(a) That this Hon'ble Court may be pleased to issue a
writ of mandamus and/or any other appropriate writ, order
or direction quashing and setting aside the impugned
Tender Conditions No.2B(n) and (p) specified on Internal
Page 17 of Tender floated in August, 2022 (Annexure-F to
this petition) as being arbitrary, irrational and
unreasonable;
(b) That this Hon'ble Court may be pleased to issue a
writ of mandamus and / or any other appropriate writ,
order or direction quashing and setting asdie the
estimated project cost mentioned on Internal Page 12 of
Tender floated in August, 2022 (Annexure-F to this
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
petition) since the same is not in conformity with the cost
to be incurred by any bidder for the vehicles pending
affixation and is thoroughly misleading and irrational;
(c) That pending admission, hearing and final
disposal of the present petition, this Hon'ble Court may be
pleased to grant interim relief in favour of the Petitioners
by directing the Respondent to not proceed with the
Tender floated in August, 2022 (Annexure-F to this
petition) including but not limited to receiving any bids or
taking any action post receipt of bids;
(d) That this Hon'ble Court may be pleased to issue
ad-interim ex-parte relief in terms of Para(c) hereinabove;
(e) That this Hon'ble Court may be pleased to award
cost of the present petition to the Petitioners;
(f) Pass such other order(s) as this Hon'ble Court
deems fit in the facts and circumstances of the case."
[10] Both these petitions alongwith one another petition being
Special Civil Application No.17431 of 2022 were requested to be
heard together but in view of subsequent development, the said
petition came to be disposed of vide order dated 19.09.2022 and
as such the aforementioned two petitions are left out to be
considered. During the course of submission, Mr. M. R. Bhatt,
senior advocate appearing in Special Civil Application No.17448
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
of 2022 has submitted additional affidavit on behalf of the
petitioners and pleadings having been completed. Hence, this
Court has taken up and considered it proper to deal with these
two Special Civil Applications, namely, Special Civil Application
Nos. 17445/2022 and 17448/2022.
[11] Mr. M. R. Bhatt, learned senior advocate appearing on
behalf of the petitioners in Special Civil Application No.17448 of
2022 has vehemently contended that two tender conditions
which are mentioned and impugned in the petition are
completely unreasonable, arbitrary and tailor made which has
got the virtual effect of ousting the recognized company like
petitioner. According to learned senior advocate, respondent
being a instrumentality of state is expected to act fairly and
reasonably while dealing with public contracts and as such the
basic requirement of certificate from a government body or
institution being done away which goes against the very
principle. By referring to Clauses B (n) and (p) of the tender
document of August, 2022, reflecting in internal page 17 of the
document, has submitted that respondent has lowered down the
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
requirement of prior experience to participate in the bid to an
extent that a bidder only requires to show that they have
completed 2 lakh HSRP affixations in any 2 years starting from
2017 till 2023 and such clause is inserted assuming without
commercial wisdom and even in that case to believe the bidder
as genuine on the basis of "self-certification" which is a
disturbing features and as such this Clause B which relates to
project experience of bidder and Clause (p) which relates to
proof to be submitted are the one which may not be germane to
the object for which such an important work is to be
undertaken. Learned senior advocate has further submitted
that respondent has not taken into account any anticipated
possible problems that might occur in case of a particular
bidder, on the basis of "self certification" is selected and later
on after award of work order it is discovered that such "self-
certification" was false, the entire process of award of contract
will have to be carried out once again, and it would result in
waste of time and money. The basic requirement of having
experience certificate from a Government institution or a
recognized body should be reintroduced and same having not
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
been visible from the conditions engrafted in the tender are not
only unreasonable but with an aim to favour somebody.
[12] Mr. M. R. Bhatt, learned senior advocate has also
submitted that respondent authority by floating tender has
completely miscalculated the estimated project cost and has
also lowered the financial requirement. By referring the
information from page 216, 217 and 218 of the tender floated in
August, 2022, it is submitted that there are approximately 2.51
crore vehicles registered till the year 2018, which means that
the HSRP fitment needs to be carried out on this vehicle base.
The data attached on internal page 218 clearly depicts that 1.66
crore vehicles registered prior to 31.03.2019 have already been
fitted with HSRP. Hence, a balance of 86 lakh vehicles are still
pending for affixation in the State. According to Mr. Bhatt,
learned senior advocate considering the current HSRP weighted
average price of Rs.255/- per set, the total estimated project
cost for remaining vehicles comes to approximately Rs.215/-
crores and not Rs.26/- crores as mentioned in the RFQ cum RFP
document and as such tender which has been floated on the
basis of condition is absolutely reflecting miscalculation, non-
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application of mind and not in consonance with the requirement
with still large in number. As a matter of fact, the turnover
requirement specified in new tender is Rs.13/- crores, which
turns out to be 50% of the estimated project cost. But the
estimated project cost as per respondent's own calculation
works out to be approximately Rs.215/- crores and as such there
appears to be a complete go by to the CVC guidelines as well.
According to Mr. Bhatt, learned senior advocate there is no
good reason for respondent authority to reduce the annual
turnover requirement from Rs.50/- crores to Rs.13/- crores
whereas the networth requirement has been reduced to Rs. 5/-
crores from earlier requirement of Rs.20/- crores for the same
project in the State in the year 2011 and as such this would lead
to a situation where several under-qualified bidders and fly-by-
night operators will have a chance to enter into the tender
process. It is in this background, Mr. Bhatt, learned senior
advocate has submitted that tender conditions are absolutely
unreasonable, reflects miscalculation and clear non-application
of mind. Hence, the reliefs prayed for deserves to be granted in
the interest of justice and in particular tender Conditions
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
No.2B(n) and (p) of August, 2022 deserves to be quashed and
set aside as being arbitrary, irrational and unreasonable and has
also prayed for consequential reliefs to be granted.
[13] Mr. Bhatt, learned senior advocate then relying upon the
additional affidavit has submitted that extension details which
have been published on the website is also unwarranted
particularly after the first extension, the respondent authority
extended the time limit for submitting bids once again till
21.09.2022 by 3 P.M. but in this process, the extension was
granted after expiry of the previous time limit i.e. 13.09.2022
and as such aggrieved by the action of respondent authority Mr.
Bhatt, learned senior advocate has requested the Court to grant
the reliefs as prayed for in the petition.
[14] Mr. Bhatt, learned senior advocate with a view to
substantiate his contention has relied upon two decisions
delivered by the Hon'ble Apex Court in the case of Association
of Registration Plates versus Union of India and Others reported
in (2005) 1 SCC 679 and in the case of Maninderjit Singh Bitta
versus Vijay Chhibber and Others reported in (2016) 14 SCC 72.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[15] In respect of Special Civil Application No.17445 of 2022,
Mr. Aman Preet Singh, learned advocate appearing with Mr.
Bhavesh B. Chokshi, learned advocate for the petitioners has
adopted the submissions of Mr. M. R. Bhatt, learned senior
advocate and has reiterated that impugned conditions are bad-
in-law and petitioner may be allowed to participate in the bid
process as his case is likely to be different from the other one.
It has also been contended that in respect of a tender floated by
a public authority, the judicial review is always available by the
constitutional courts and by referring to the decision delivered
by Hon'ble Apex Court in the case of Tata Cellular versus Union
of India reported in (1994) 6 SCC 651, a contention is raised
that this is a fit case to exercise and undertake judicial review of
the process of tender.
[16] Mr. Singh, learned advocate has submitted that tender
conditions impugned in the petition are absolutely unjust and
arbitrary and deserves to be quashed and the authorities are
required to be directed to re-looked same before finalizing the
process. It is submitted that it is trite law that every action of
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the authority which is in conflict with fundamental rights of the
citizens as enshrined under Articles 14 and 19 of the
Constitution of India, it is the duty of the Court to examine and
correct the action sought to be initiated by an authority. Mr.
Singh, learned advocate has submitted that in so far as his
petition is concerned, two conditions, namely, Condition Nos.
2B(q) and 2B(s) are unreasonable and thereby he has sought for
a direction to the State Government to delete such conditions
and suitably amend the said impugned clauses so as to remove
the bar of eligibility of bidders. Hence, he submits said
conditions are required to be quashed and set aside. No other
submissions have been made.
[17] Mr. K. M. Antani, learned Assistant Government Pleader
appearing on advance copy and waiving notice in these petitions
has vehemently contended that petitioners have not made out
any case to declare such conditions as bad-in-law in any form.
On the contrary, looking to the work and the requirement of
such implementation of HSRP Scheme, the State floated a
tender and he has emphatically submitted that it is the
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
discretion of the tender inviting authority to frame any eligibility
clause, which may be required for the work to be done and on
account of certain clauses or conditions of the tender are not
being convenient to the petitioners, same cannot be questioned
in extraordinary jurisdiction of this Court. However, while
opposing the petitions has submitted that it is settled position of
law that in respect of prescription of condition of tender
document, the Court should be loathe in interfering and has
prayed for dismissal of these petitions in limine. However, on
instructions has has made a statement that final bid would not
be opened till the next date of hearing.
[18] Having heard the learned advocates appearing for the
respective parties and having gone through the material on
records, it appears that respondent authority has through its
ports and transport department intending to invite applications
for awarding the project through an open competitive bidding
process. In order to ensure uniformity in size, colour and
specifications of the Registration Plates all over India to all
types of vehicles being registered or those already registered,
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
the specifications of plates on different types of vehicles have
been laid down as per Rule 50 and 51 of the CMV Rules, 1989
and the scope of work will broadly include finance,
manufacture, supply, implement, develop and market the High
Security Registration Plates Project in the State of Gujarat and
warranty and replacement thereof. The number plates would be
required to be supplied from all RTO premises, as notified from
time to time by the State Government and the estimated cost of
the project is stated to be 26 crores throughout the concession
period. The assessment of actual costs, however, will have to be
made by the bidders. The project implementation mechanism is
also provided in the tender notice and concession period is also
stipulated to be that of five (5) years from the date of signing of
the concession agreement and in the event of authority being
satisfied, it can extend such period of maximum of two (2) years
on such terms and conditions as may be agreed upon. The
bidding process has also been stipulated and the eligibility
criteria of bidders is prescribed under Clause 2 of the said
tender.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[19] In addition to other clauses, contained in eligibility, as
stipulated under Clause 2(A), the aggrieved conditions in both
these petitions are as under:
(i) Aggrieved conditions in Special Civil Application
No.17448 of 2022:-
"2.B. Project Experience of Bidder:-
n) The Bidder or any of eligible member of
consortium shall have minimum 2 (two) lacs High Security
Registration Plates (HSRP) manufactured, individualized
and affixed in any of 2 (two) years out of 2017-18, 2018-19,
2019-20, 2020-21, 2022-23 in India as on last date of
submission of bids.
p) Proof to be submitted: The volume
authorization certificate should be signed by the
authorized signatory of the company or the Director and in
case of Government should be signed by an officer not
inferior to the rank of Joint Commissioner or equivalent."
(ii) Whereas following conditions are the subject matter
of controversy in Special Civil Application No.17445 of
2022:-
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
"2(B) Project Experience of the Bidder:
q) The Bid of any Bidder or any of eligible member of
consortium who has been terminated / blacklisted /
debarred by any of the State Transport Departments in
India pertaining to the HSRP scheme shall be summarily
rejected.
s) The Type Approval Certificate (TAC) and Conformity of
Production (COP) of the Bidder should never have been
cancelled or suspended by the issuing authority from the
date of issuance till the bid submission date. An affidavit
to this effect shall be submitted by the Bidder."
[20] The aforesaid conditions are stated to be unreasonable,
arbitrary and irrational according to the petitioners and they
have requested this Court to set aside the same.
[21] The project experience of bidder, which have been
stipulated by the tender inviting authority contains several
conditions / criteria and one of such condition as stated
hereinabove is said to be arbitrary. However, it is the tender
inviting authority which has domain over such prescription of
condition having regard to the significance of it and the scope of
work. From the case papers, it appears that by virtue of Rule 50
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
of CMV Rules, 1989 and in the process of its implementation
thereof, the State Government appears to have taken an
initiative from the year 2012 and High Security Registration
Plates (HSRP) being installed in the vehicle by respective OEMs
from 01.04.2019 and as such having found that certain vehicles
are still to be covered even in respect of vehicles registered
prior to 01.04.2019 and to meet with the said requirement,
present tender appears to have been floated and scope of work
is completely in consonance with the object for which the
relevant Rules 1989 and the Motor Vehicles (High Security
Registration Plates) Order, 2018 came to be incorporated. The
requirement of the project is that person implementing will have
to assemble, establish, procure technology, design, develop,
produce, emboss, affix and distribute the HSRP and finance,
maintain and operate the infrastructure formalities, services
and establishment so created at his own risk and all costs
involved in establishing embossing stations, site implementation
and networking within the State, will have to be borne by the
bidder himself and keeping in view such requirement, the
authority concerned has issued a tender inviting open bid and
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
as such prima facie when these conditions as prescribed are
perused keeping in view the importance and the object of work
to be undertaken for the vehicles which are left out from
installation of such HSRPs, this Court is of the view that tender
inviting authority would be suitable person to prescribe as to
what would be the condition based on appropriate requirement
and it should be left to said authority to prescribe the condition
for eligibility for such tender work as the tender inviting
authority would be the best person to understand and evaluate
the necessity of such conditions and merely because some
conditions are not convenient to the petitioners, same cannot be
held to be either unreasonable, irrational or arbitrary. This
view gets support from catena of decisions wherein it has been
held that it is the tender inviting authority which is the best
person to fix the conditions depending upon its own
requirement. Hence, unless and until, same is found to be
absolutely arbitrary or infringing fundamental rights normal
trend is not to exercise the extraordinary jurisdiction or disturb
the need based requirement of an authority in fixing the
conditions. The Hon'ble Apex Court in Afcons Infrastructure
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
Limited versus Nagpur Metro Rail Corporation Limited
and Another reported in (2016) 16 SCC 818 has held:-
"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."
Hence, we are of the view that in the absence of malice or
in the absence of any mala fides attributable to respondent, the
conditions which are mentioned under the impugned tender do
not call for interference and it would not be the function of the
Court to sit over in judgment as an expert over the requirement
of tender inviting authority and substitute the conditions as
tried to be projected by the petitioners. Hence, we see no
reason to accept the stand of the petitioners.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[22] Apart from that a bare look at the requirement prescribed
in the tender, which is being agitated by the petitioners as
onerous is also not possible to be accepted as arbitrary. Clause
2(B)(n) prescribed that bidder or any eligible member of
consortium should have minimum 2 (two) lacs High Security
Registration Plates (HSRP) manufactured, individualized and
affixed in any of 2 (two) years out of 2017-18, 2018-19, 2019-20,
2020-21, 2022-23 in India as on last date of submission of bids.
This condition which is canvassed as irrational on the contrary
is giving rather more scope to eligible bidders to participate in
the process. The condition would meet the test of healthy
competition amongst the bidders and has got apparently the
effect of preventing concentration of work in few hands and
apparent look at this condition would not reflec any irrationality
or arbitrariness in any form in the considered opinion of this
Court and as such we see no reason to hold such condition as
bad-in-law in any form.
[23] Same is the case with Condition No.2(B)(p) which is
requiring a proof to be submitted by the bidder. This condition
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
No.(p) indicates the authorization certificate should be signed
by the authorized signatory of the company or the Director as
the case may be and such authorization to be submitted along
with the bid. The apprehension which has been voiced out
by the petitioners' counsel that in case such authorization if
found to be incorrect or false, the same would lead to
unnecessary wastage of time and money but then looking to
the other conditions of the tender, which reflects checks
and balances would clearly indicate that such apprehension
of the petitioners is misplaced. There are certain clauses in
the tender where verification mechanism is provided, in
which authority has reserved its right to verify all
statements and information including the documents and if
at any time the authority found such information being false
or fabricated absolute right is vested with the authority to
reject the bid and to take consequential steps against such
bidder as can be seen from "verification and disqualification
chapter" reflecting on page 279 of Special Civil Application
No.17448 of 2022.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[24] Apart from this, we have noticed that even for fraud and
corrupt practice, if any, adopted by a bidder or its officers,
employees or agents etc. a specific consequence that would
follow has also been provided under this very tender document
and as such the apprehension which has been voiced out by the
learned counsel representing petitioners of Special Civil
Application No.17448 of 2022 is clearly misplaced and merely
because said clauses of the tender are not convenient to the
petitioners, this Court cannot embark upon setting aside the
same which petitioners are seeking. This apprehension which
has been voiced out has also little history behind it as can be
seen from paragraph 12 of the petition itself. The chronology
which has been mentioned by the petitioners about its tenure of
10 years being lapsed and the extension which has been sought
for and dealt with by the authority speaks volumes about it and
as such when this is the factual background of petitioners' the
contentions raised by learned advocate appearing for
petitioners is not worthy of acceptance. Hence, we deem it
proper not to entertain the stand of petitioners.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
[25] In so far as, it relates to Special Civil Application
No.17445 of 2022 in which Condition Nos.2(B)(q) and (s) has
been questioned, same is also not worthy to be examined. This
Condition Nos 2(B)(q) would indicate that the bid of any bidder
or any of eligible member of consortium who has been
terminated / blacklisted / debarred by any of the State Transport
Departments in India pertaining to the HSRP scheme would be
summarily rejected. The importance and significance of this
scope of work is very much reflecting from rules itself and the
chronology of the litigation related to it and as such when the
question of High Security Registration Plates is kept in mind by
the authority, this clause reflecting in the tender document
cannot be said to be either irrational or irrelevant. In such an
important tender if any bidder is found to be debarred in any
related work by any of the Transport Department in the India, it
is obvious for the authority to prescribe such condition which
would restrict such person from participating. Again we
reiterate at the cost of repetition that prescription of condition
in a tender is the domain of tender inviting authority and when
we look at the history of this project being implemented by the
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
State across the India is pursuant to the PIL No. W.P.(C) 510 of
2005 dealt with by the Hon'ble Apex Court vide order dated
08.05.2008 and it would clearly indicate that significance of the
work for which the tender is floated. The history relating to
implementation of HSRP Scheme needs to be quoted hereunder
and as such without much elaboration on it, we may prefer to
refer the chronology of decisions delivered by the Hon'ble Apex
Court in various proceedings related to this very issue, which
are mentioned by the petitioners themselves. The following is
the chart, we may deem it proper to quote hereunder:-
Sl. No Particulars
1. Judgment and order dated 08.05.2008 passed in
W.P(C) No. 510 of 2005 by this Hon'ble Court titled
M.S. Bitta Vs. Union of India and Ors; Reported in :
(2008) 7 SCC 328
2. Judgment and order dated 07.04.2011 passed in I.A
Nos. 10 and 11 of 2010 in W.P.(C) No. 510 of 2005 by
this Hon'ble Court; Reported in : (2011) 11 SCC 315
3. Order dated 30.08.2011 passed in I.A Nos. 10 - 11 of
2010 in I.A No. 10 of 2010 in W.P.(C) No. 510 of 2012
by this Hon'ble Court; Reported in : (2011) 14 SCC 273
4. Order dated 13.10.2011 passed in I.A No. 10 of 2010 in
W.P.(C) No. 510 of 2005; Reported in : (2012) 1 SCC
5. Order dated 08.12.2011 passed in I.A Nos. 10, 16, 17 &
18 in W.P.(C) No. 510 of 2005; Reported in : (2012) 1
SCC 707
6. Judgment dated 07.02.2012 in W.P.(C) No. 510 of
2005; Reported in : (2012) 4 SCC 568
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
7. Judgment dated 13.07.2016 in C.P(C) 483 of 2013 titled
as Maniderjit Singh Bitta Vs. Vijay Chhibber; Reported
in : (2016) 14 SCC 72
[26] From the aforesaid chronology of orders also, we are of
the clear opinion that when such important work is to be
undertaken by the State Government, this clause which has
been incorporated in the tender cannot be said to be either
unjust or arbitrary or irrational in any form and we are not
inclined to accept the contention raised by the petitioners in this
regard. Yet another clause which has been tried to be assailed
in Special Civil Application No.17445 of 2022 is Condition 2(B)
(s). A plain reading of this clause itself would make it clear that
same cannot be said to be arbitrary. The Type Approval
Certificate (TAC) and Conformity of Production (COP) of the
bidder should never have been cancelled or suspended by the
issuing authority from the date of issuance till bid submission
date was required be stated by an affidavit by the bidder. We
are at loss to understand as to how such stipulation would cause
inconvenience to the petitioners or same being onerous. The
reason appears to be obvious that petitioners had some issue
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
with respect to its suspension of TAC as has been reflecting
from the averment contained in paragraph 3.9 (later part of
page 14 of the petition). Merely because such situation is being
fixed by the petitioners, we cannot assume that Condition
No.2(B)(s) can be said to be arbitrary in any form. Hence, on
conjoint reading of these clauses of tender document, we are of
the clear opinion that none of the impunged conditions can be
said to be irrational, arbitrary or violative of any fundamental
right of the petitioners in any form. Be that as it may. We
reiterate that fixation of tender clauses are the domain of tender
inviting authority and constitutional Courts cannot embark upon
conducting roving inquiry. Whether such condition could have
been incorporated by the tender inviting authority unless it is
palpably found to be irrational, which is not the case here on
hand. Hence, we see no reason to accept the contention of the
petitioners. Hence, these petitions are found to be meritless.
[27] Additionally, at this stage, we are mindful of the clear
proposition of law laid down by the Hon'ble Apex Court in
catena of decisions about the scope of interference in tender
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
and contractual matters more particularly in respect of litigation
questioning the tender conditions. Since we are of the opinion
that scope is very very limited, we deem it proper to quote
relevant observations of respective decisions hereunder:-
(i) In the case of Central Coalfields Limited and Another
versus SLL-SML (Joint Venture Consortium) and Others
reported in (2016) 8 SCC 622 it has been held by Hon'ble Apex
Court as under:-
"49. Again, looked at from the point of view of the
employer if the Courts take over the decision-making
function of the employer and make a distinction between
essential and non-essential terms contrary to the intention
of the employer and thereby re-write the arrangement, it
could lead to all sorts of problems including the one that
we are grappling with. For example, the GTC that we are
concerned with specifically states in Clause 15.2 that "Any
Bid not accompanied by an acceptable Bid Security/EMD
shall be rejected by the employer as non-responsive."
Surely, CCL ex facie intended this term to be mandatory,
yet the High Court held that the bank guarantee in a
format not prescribed by it ought to be accepted since that
requirement was a non-essential term of the GTC. From
the point of view of CCL the GTC has been impermissibly
re-written by the High Court.
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
52. There is a wholesome principle that the Courts
have been following for a very long time and which was
articulated in Nazir Ahmad v. King Emperor10 namely
"....Where a power is given to do a certain thing in a
certain way the thing must be done in that way or not at
all. Other methods of performance are necessarily
forbidden."
There is no valid reason to give up this salutary principle
or not to apply it mutatis mutandis to bid documents. This
principle deserves to be applied in contractual disputes,
particularly in commercial contracts or bids leading up to
commercial contracts, where there is stiff competition. It
must follow from the application of the principle laid down
in Nazir Ahmed that if the employer prescribes a particular
format of the bank guarantee to be furnished, then a
bidder ought to submit the bank guarantee in that
particular format only and not in any other format.
However, as mentioned above, there is no AIR 1936 PC
253 inflexibility in this regard and an employer could
deviate from the terms of the bid document but only within
the parameters mentioned above.
53. Nazir Ahmed has been followed in dozens of decisions
rendered by this Court and by other constitutional Courts
in the country. The Central Vigilance Commission has
accepted this principle in a modified form as a guiding
principle in its circular dated 31st December, 2007
wherein it is mentioned that all organizations ought to
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
evolve a procedure for acceptance of bank guarantees that
is compatible with the guidelines of banks and the Reserve
Bank of India. One such requirement is that the bank
guarantee should be in a proper prescribed format and
should be verified verbatim on receipt with the original.
Adherence to this principle of verbatim verification would
not only avoid undue problems for the employer but would
also virtually eliminate subjectivity on the part of the
employer."
(ii) In the case of Silppi Constructions Contractors versus
Union of India and another reported in (2020) 16 SCC 489
Hon'ble Apex Court has held:
"19. This Court being the guardian of fundamental rights is
duty bound to interfere when there is arbitrariness,
irrationality, mala fides and bias. However, this Court in all
the aforesaid decisions has cautioned time and again that
courts should exercise a lot of 12 2019 (6) SCALE 70
restraint while exercising their powers of judicial review in
contractual or commercial matters. This Court is normally
loathe to interfere in contractual matters unless a clear-cut
case of arbitrariness or mala fides or bias or irrationality is
made out. One must remember that today many public
sector undertakings compete with the private industry.
The contracts entered into between private parties are not
subject to scrutiny under writ jurisdiction. No doubt, the
bodies which are State within the meaning of Article 12 of
the Constitution are bound to act fairly and are amenable
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
to the writ jurisdiction of superior courts but this
discretionary power must be exercised with a great deal of
restraint and caution. The Courts must realise their
limitations and the havoc which needless interference in
commercial matters can cause. In contracts involving
technical issues the courts should be even more reluctant
because most of us in judges' robes do not have the
necessary expertise to adjudicate upon technical issues
beyond our domain. As laid down in the judgments cited
above the courts should not use a magnifying glass while
scanning the tenders and make every small mistake appear
like a big blunder. In fact, the courts must give "fair play in
the joints" to the government and public sector
undertakings in matters of contract. Courts must also not
interfere where such interference will cause unnecessary
loss to the public exchequer."
(iii) In the case of M/s N.G.Projects Ltd. Vs. M/s Vinod
Kumar Jain, [Civil Appeal No. 1846 of 2022 decided on
21.03.2022], reported in 2022 (5) SCALE 105 it has been
noticed by Hon'ble Apex Court as follows:
"22. The satisfaction whether a bidder satisfies the
tender condition is primarily upon the authority inviting
the bids. Such authority is aware of expectations from the
tenderers while evaluating the consequences of non-
performance. In the tender in question, there were 15
bidders. Bids of 13 tenderers were found to be
unresponsive i.e., not satisfying the tender conditions. The
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writ petitioner was one of them. It is not the case of the
writ petitioner that action of the Technical Evaluation
Committee was actuated by extraneous considerations or
was malafide. Therefore, on the same set of facts, different
conclusions can be arrived at in a bona-fide manner by the
Technical Evaluation Committee. Since the view of the
Technical Evaluation Committee was not to the liking of
the writ petitioner, such decision does not warrant for
interference in a grant of contract to a successful bidder.
23. In view of the above judgments of this Court, the
Writ Court should refrain itself from imposing its decision
over the decision of the employer as to whether or not to
accept the bid of a tenderer. The Court does not have the
expertise to examine the terms and conditions of the
presentday economic activities of the State and this
limitation should be kept in view. Courts should be even
more reluctant in interfering with contracts involving
technical issues as there is a requirement of the necessary
expertise to adjudicate upon such issues. The approach of
the Court should be not to find fault with magnifying glass
in its hands, rather the Court should examine as to
whether the decision-making process is after complying
with the procedure contemplated by the tender conditions.
If the Court finds that there is total arbitrariness or that
the tender has been granted in a malafide manner, still the
Court should refrain from interfering in the grant of tender
but instead relegate the parties to seek damages for the
wrongful exclusion rather than to injunct the execution of
the contract. The injunction or interference in the tender
leads to additional costs on the State and is also against
public interest. Therefore, the State and its citizens suffer
C/SCA/17445/2022 CAV JUDGMENT DATED: 23/01/2023
twice, firstly by paying escalation costs and secondly, by
being deprived of the infrastructure for which the present-
day Governments are expected to work.
26. A word of caution ought to be mentioned herein
that any contract of public service should not be interfered
with lightly and in any case, there should not be any
interim order derailing the entire process of the services
meant for larger public good. The grant of interim
injunction by the learned Single Bench of the High Court
has helped no-one except a contractor who lost a contract
bid and has only caused loss to the State with no
corresponding gain to anyone."
[28] From the aforesaid observations in the context of fact
situation prevailing on record and in consideration of
contentions raised by learned advocates appearing for the
petitioners, we are of the clear opinion that no case is made out
by the petitioners calling for any interference. Hence, present
petitions being devoid of merits, same stand dismissed with no
order as to costs. Notice is discharged. Interim relief, granted
earlier, stands vacated.
Sd/-
(ARAVIND KUMAR, C.J.)
Sd/-
(ASHUTOSH J. SHASTRI, J.)
DHARMENDRA KUMAR
