Madras High Court
Tami Nadu Fibernet Corporation vs Pace Digiteck Infra Private on 26 April, 2022
W.A.No.1248 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 26.4.2022
CORAM :
THE HON'BLE MR.MUNISHWAR NATH BHANDARI,
CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.A.No.1248 of 2021 &
CMP.No.8000 of 2021
Tami Nadu Fibernet Corporation
Ltd., rep.by its Managing
Director .. Appellant
Vs
1.Pace Digiteck Infra Private
Ltd., rep.by its Authorized
Signatory Mr.Rajiv Maddisetty
2.QuadGen Wireless Solutions
Pvt. Ltd., rep.by its Vice
President Mr.S.Karthik
3.Government of Tamil Nadu,
by the Secretary to Government,
Information Technology Department
Secretariat, Chennai-9.
4.HFCL Ltd. (formerly Himachal
Futuristic Communications Ltd.)
rep.by its Authorized Signatory
(R4 impleaded vide court order
dated 29.4.2021 passed by MMSJ
and RNMJ in CMP.No.8312 of 2021) .. Respondents
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W.A.No.1248 of 2021
Prayer : Appeal under Clause 15 of the Letters Patent against the
order dated 02.3.2021 in WP.No.18302 of 2020.
For Appellant : Mr.R.Shunmugasundaram,
Advocate General assisted by
Mr.S.Anbazhagan, Standing
Counsel
For Respondents : Mr.AR.L.Sundaresan,
Senior Counsel for
Mr.Lakshmi Kumaran for R1
& R2
Mr.Abhishek Jenasenan for
R4
JUDGMENT
(Judgment was delivered by
the Hon'ble Chief Justice)
We have heard the learned counsel appearing for the respective
parties.
2. By this writ appeal, a challenge is made to the order dated
02.3.2021 whereby W.P.No.18302 of 2020 preferred by writ
petitioners - non appellants challenging the order dated 01.12.2020
passed by the appellant was allowed.
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3. It is a case where the appellant herein floated a tender
inviting bids. The writ petitioners - non appellants participated in the
bidding process. When the technical bid was opened, the writ
petitioners - non appellants were considered to be non responsive for
variety of reasons. The issue for our consideration in this appeal is in
reference to the date of the agreement of consortium, namely
06.11.2020, while the stamps for it were purchased on 10.11.2020.
Looking into the discrepancy in the date, the consortium document
was not accepted by the appellant herein as per the tender conditions.
4. It was on the further ground that the earnest money deposit
(EMD) was furnished by the member of the consortium namely
M/s.Quadgen Wireless Solutions Private Limited and not by M/s.Pace
Digiteck, which was the lead bidder. On the aforesaid ground also, the
writ petitioners - non appellants were disqualified in the tender process
on opening of the technical bid. Two more reasons were given for the
rejection of bid and have been referred to by the learned Single Judge
in the impugned order. However, this appeal is restricted to two
grounds referred to above because the other two grounds for rejection
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W.A.No.1248 of 2021
of the technical bid of the writ petitioners - non appellants have not
been pressed for in the challenge to the order impugned herein.
5. The learned Advocate General appearing on behalf of the
appellant submits that contrary to the definition of the terms given in
the tender documents and other Clauses, the learned Single Judge
passed the impugned order. It is submitted that as per the definition of
the term 'bidder', the EMD should be given only by the lead bidder and
not by the member of the consortium.
6. For that purpose, our attention is drawn to Clause 5.16 of the
Instructions to Bidders as contained in the tender documents relating
to EMD. Clause 7.1.12 relating to Special Conditions for the
Consortium Bidders has also been referred. Sub-Clause (iii) of Clause
7.1.12 has been referred to, which requires consortium partners to
specify who should be the lead bidder, the complete description of the
partner and roles and responsibilities of the partners. Sub-Clauses (x)
and (xiv) of Clause 7.1.12 have been referred to, to show that (i)
award of contract should be signed by the lead bidder and only the
lead bidder should be single point of contact for this project and the
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W.A.No.1248 of 2021
performance bank guarantee should be submitted by the lead bidder;
and (ii) the lead bidder should be authorized by the consortium
partners to act on their behalf. Referring to different Clauses, an
emphasis was made that the lead bidder has been assigned the role to
act on behalf of the consortium.
7. In view of the above, it is submitted that the learned Single
Judge ignored the aforesaid conditions of tender documents while
recording a finding that the EMD could have been furnished even by
one of the members of the consortium instead of the lead bidder and
therefore, a challenge to the finding has been made on that count. A
prayer is made accordingly to cause interference with regard to the
findings on the first issue.
8. The second issue raised by the learned Advocate General is
with reference to the date of agreement for consortium. It is said to
have been executed on 06.11.2020 after purchase of stamps on
10.11.2020. The last date for submission of tender was 11.11.2020.
The learned Single Judge recorded a finding that the document was
signed by the member of the consortium on 10.11.2020 and the date
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W.A.No.1248 of 2021
i.e 06.11.2020 was wrongly mentioned and since the document was
executed outside the territory of the State of Tamil Nadu, a mistake in
the date might have been made. According to the learned Advocate
General, the learned Single Judge ought not to have rectified the error
in the document by replacing it from 06.11.2020 to 10.11.2020.
9. The finding in that regard on the second ground has also been
assailed with a prayer to set aside the order passed by the learned
Single Judge. We have considered the arguments raised by the learned
Advocate General appearing for the appellant and perused the
materials produced before us.
10. The facts of the case relating to determination of the issues
raised in the appeal and urged before us have been given in brief and
therefore, need not be reiterated. The admitted fact pertaining to the
matter is that the appellant herein floated a tender to invite bids and in
that, the writ petitioners - non appellants, apart from others,
participated. The last date for submission of the bid was 11.11.2020.
After receipt of the bid documents from different parties, the
assessment of technical bid was made, wherein the writ petitioners -
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W.A.No.1248 of 2021
non appellants were declared to be technically disqualified on four
grounds, out of which, two grounds were urged before this Court to
hold the writ petitioners - non appellants to be non responsive for the
technical bid.
11. We would be dealing with both the grounds raised by the
learned Advocate General.
12. The first ground is with reference to the submission of EMD
by one of the members of the consortium instead of the lead bidder.
According to the appellant, the EMD was required to be submitted by
the lead bidder and not by one of the members of the consortium.
13. The facts are not in dispute that the EMD was not furnished
by the lead bidder, but by the member of the consortium. In the
background given above and without any factual controversy in that
regard, the question for consideration is as to whether there was a
condition for furnishing of the EMD by the lead bidder. Therefore, we
need to refer to certain clauses of the tender documents.
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W.A.No.1248 of 2021
14. The definition of the term 'bidder' as contained in the tender
documents has been relied upon by the learned Advocate General,
which is quoted as hereunder for ready reference :
"Bidder : Bidder means the sole bidder
or lead bidder and members of the
consortium."
15. The definition quoted above shows the bidder to be sole
bidder or lead bidder or member of the consortium. This definition
does not mandate or provide or qualify the lead bidder alone to be the
bidder. But, it even includes member of the consortium to fall within
the definition of the term 'bidder'. The arguments raised by the
learned Advocate General emphasizing that EMD should have been
furnished by the lead bidder alone with reference to the definition
referred to above cannot be accepted. But, we would not be ending
this issue here. Reference to other Clauses has also been given. Those
Clauses are to be referred to for consideration in that regard.
16. Clause 5.16 of the Instructions to Bidders as contained in the
tender documents, which is relevant, is quoted hereunder for ready
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W.A.No.1248 of 2021
reference :
"5.16 : Earnest Money Deposit (EMD) :
5.16.1 The bidder shall furnish, as part
of its bid, an earnest money deposit (EMD) as
mentioned in Section 2: Tender Schedule.
5.16.2 The EMD must be submitted in
the form of irrevocable bank guarantee valid
for a minimum period of 180 days from any
nationalized bank drawn in favour of 'Managing
Director, TANIFNET Corporation' in the format
prescribed in RFP.
5.16.3 The EMD of the unsuccessful
bidders will be returned after award of the
contract to the successful bidder. The EMD
amount held will not earn any interest
thereof."
17. The Clause aforesaid above does not mandate EMD to be
furnished by the lead bidder and therefore, even the said Clause, as
contained in the tender documents, does not help the appellant to
substantiate the ground of rejection to be valid. The definition of
'bidder' includes a member of consortium also and therefore, EMD can
be furnished by one of the members of the consortium falling in the
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definition of 'bidder'.
18. We would further refer to Clauses 7.1.12 (iii), (x) and (xiv),
relating to Special Conditions for the Consortium Bidders, which read
as under :
"7.1.12 : Note 3 : Special Conditions for
the Consortium Bidders :
....
....
(iii) In case of a consortium, applicant
consortia shall have a valid memorandum of
understanding (MOU)/agreement among all
the members signed by the Chief Executives/
Authorized Signatories of the companies dated
prior to the submission of the bid. The
MOU/consortium agreement shall clearly state
the composition of the consortium, who shall
be the lead bidder and the complete
description of the partner and roles and
responsibilities of the partners.
......
......
(x) The award of contract shall be signed
with the lead bidder only and the lead bidder
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W.A.No.1248 of 2021
shall be single point of contact for this project.
Performance Bank Guarantee shall be
submitted by the lead bidder.
.....
......
(xiv) The lead bidder shall the authorized
by the consortium partners to act on their
behalf to incur liabilities and receive
instructions for and on behalf of him and all
partners of the consortium. During the
execution of the contract, payment shall be
made exclusively in favour of the lead bidder."
19. The special conditions for the consortium bidders require that
the agreement should stipulate who should be the lead bidder in the
consortium for various purposes, which include acting as a single point
of contact and even furnishing of a performance bank guarantee. But,
none of the Clauses provides or mandates the EMD to be furnished by
the lead bidder alone. Rather, taking to the definition of the term
'bidder' and other Clauses quoted above, we do not find that the
agreement mandated EMD to be furnished by the lead bidder alone
and accordingly, the learned Single Judge rightly recorded his opinion
that in the absence of any condition in the agreement to furnish EMD
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W.A.No.1248 of 2021
by the lead bidder, the rejection of the bid of the writ petitioners - non
appellants could not be accepted to be proper and accordingly,
interference has been made in the order passed by the appellant.
20. We are unable to accept the argument of the learned
Advocate General to assail the findings recorded by the the learned
Single Judge on the first issue and otherwise, we have given our own
finding after analyzing the arguments raised by the learned Advocate
General. We also find no merit therein.
21. The second issue is with reference to the date of consortium
agreement, namely 06.11.2020, whereas the stamps were purchased
on 10.11.2020, which was the ground to reject the technical bid of the
writ petitioners - non appellants. The learned Single Judge minutely
examined the matter with reference to the arguments and the
materials produced by the parties and it was found that the stamp
papers were purchased on 10.11.2020. The execution of agreement
could not have been on 06.11.2020. To support the finding, a
reference was made to the signature of the member of the consortium
to be on 10.11.2020, apart from the date of their notarization to be
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W.A.No.1248 of 2021
10.11.2020. A mere mistake in the date given as 06.11.2020 could not
have been taken as a ground to reject the bid of the writ petitioners -
non appellants.
22. At this stage, it would be relevant to refer to the interim
order passed by this Court in the appeal. By an order dated 19.4.2022,
we directed the appellant to bring the financial bids of the writ
petitioners-non appellants in a sealed cover to find out as to whether it
was competitive or not and especially, the rate quoted by the
successful bidder, namely the fourth respondent, which was allowed to
intervene. Since it was an online bid, with the assistance of the officer
of the appellant, it was analyzed in the Court on 21.4.2022 and it was
found that the writ petitioners - non appellants had given lesser rate
rate as compared to the fourth respondent, which was declared to be
the successful bidder. This exercise was undertaken by this Court to
find out as to the status of the financial bid furnished by the writ
petitioners - non appellants.
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W.A.No.1248 of 2021
23. If the rate quoted by the writ petitioners - non appellants
would have been higher than the successful bidder, there was no
reason for this Court to enter into the issues to remain academic only.
Rather, looking into the benefit of the public exchequer, the writ
appeal could have been disposed of. But, finding the rate quoted by
the writ petitioners - non appellants to be lesser, we have considered
the matter on merits and recorded our finding. The facts aforesaid
have been narrated because of the interim order and an order need
not remain for the sake of it in any respect, which includes that it
would have effect on the public exchequer, whether the ground for
rejection of the bid that the consortium document was executed on
06.11.2020 or 10.11.2020, it was of such effect so as to reject the bid
affecting the public exchequer. The appellant should not have analyzed
the bid documents hyper technically so as to eliminate a competitor in
the process of tender. It is not even with reference to EMD though the
condition to furnish EMD has a consequence and therefore, the matter
was examined in detail to find out whether EMD could have been
furnished even by one of the members of the consortium.
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W.A.No.1248 of 2021
24. In view of the discussions made above, we do not find any
ground to cause interference with the order passed by the learned
Single Judge. Rather, we find no error therein.
25. Accordingly, the writ appeal fails and is dismissed.
Consequently, the connected CMP is also dismissed. There will be no
order as to costs.
(M.N.B., CJ.) (D.B.C.J.)
26.4.2022
Index : Yes/No
To:
The Secretary to Government of Tamil Nadu,
Information Technology Department
Secretariat, Chennai-9
RS/MRM
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W.A.No.1248 of 2021
M.N.BHANDARI, CJ
AND
D.BHARATHA CHAKRAVARTHY,J
RS/MRM
W.A.No.1248 of 2021 &
CMP.No.8000 of 2021
26.4.2022
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