Manipur High Court
M/S Devendra Construction ... vs The State Of Manipur on 29 October, 2021
[1]
IN THE HIGH COURT OF MANIPUR
AT IMPHAL
WP(C) No. 672 of 2021
M/S Devendra Construction Company through its Partner Mr.
Devendra Vishnoi aged about 55 years, having place of
business at 41-B, Umaid Bhawan Road, Jodhpur (Rajasthan)
342006.
...Petitioner
-Versus-
1. The State of Manipur, represented by the Commissioner-
Cum-Secretary of Public Health Engineering Department,
Imphal West, Manipur-795001.
2. The State of Manipur, represented by the Chief Engineer,
Public Health Engineering Department, Government of
Manipur, Imphal.
... Respondents
B E F O R E
HON'BLE MR. JUSTICE KH. NOBIN SINGH
For the petitioner :: Shri O.P. Mehta, Advocate with
Shri R.K. Kulajit Singh, Advocate
For the Respondents :: Shri N. Kumarjit Singh, AG
Date of Hearing :: 25-10-2021
Date of Judgment & Order :: 29-10-2021
JUDGMENT AND ORDER
[1] Heard Shri O.P. Mehta, learned Advocate with Shri R.K. Kulajit,
learned Advocate appearing for the petitioner and Shri N. Kumarjit Singh,
learned Advocate General appearing for the respondents.
[2] By the instant writ petition, the petitioner has prayed for issuing
a writ of mandamus or any other appropriate writ to direct the respondents
for furnishing reasons for the rejection of its technical bid vide
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communication dated 24-09-2021 via email and for providing a reasonable
period of time to file reply to those reasons; to direct the respondents to
issue a speaking order after the same being considered by them; to issue
a writ of mandamus or any other appropriate writ directing the respondents
to open the financial bid of the petitioner and allot the bid to the petitioner
in case its bid being found to be the lowest amongst all the bidders.
[3.1] Facts
and circumstances, as narrated in the writ petition, are that
the petitioner is a partnership firm engaged in the business of civil
engineering works for the last almost 20 years. It is an "AA" class
contractor recognised by the Government of Rajasthan and is associated
with various government projects. It has an impeachable track record and
significant presence in the States of Rajasthan and Punjab.
[3.2] The Respondent No.2, the Chief Engineer, Public Health
Engineering Department (hereinafter referred to as "the PHED") issued an
NIT dated 27-02-2021 inviting bids from amongst the eligible bidders for
the Manipur Water Supply Project for providing drinking water supply to 13
towns. The last date for submission of bids was 19-03-2021 but it was
extended from time to time, of which the last one being the day on 10-09-
2021. The petitioner being eligible for it, submitted its bids on 09-09-2021.
Thereafter, on 11-09-2021, the petitioner received a communication via
email from the respondents informing that it should submit the audited
reports of the last three (3) financial years and pursuant thereto, the
petitioner provided the requisite audited report(s) to the respondents on
12-09-2021.
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[3]
[3.3] It was a bolt from the blue for the petitioner when it received a
communication dated 24-09-2021 via e-mail informing very cryptically,
arbitrarily and capriciously that its technical bid had rejected on the ground
that it was not technically qualified at the time of technical evaluation. In
other words, the respondents, without assigning any reason, decided that
the petitioner was not technically qualified for the financial bids.
Immediately thereafter, on 24-09-2021 it-self, the petitioner wrote a letter
via email to the respondents requesting them for providing reasons for the
rejection of its bid at the time of technical evaluation. The respondents,
instead of providing reasons for the rejection of its bid in order to maintain
transparency, integrity and sanctity of the entire bidding process, denied
the same vide their email dated 25-09-2021 contending that any query
raised after the technical evaluation, should be entertained only after the
finalization of the tender.
[3.4] Being aggrieved by the said communications, the instant writ
petition was filed by the petitioner on various grounds. The rejection of its
bid, was mechanical, arbitrary, cryptic and capricious with no reason being
assigned for it and no transparency was maintained by them. The said
communications smelt foul play and seemed to favour some other bidder
in the guise of rejecting the technical bid of the petitioner. The non-
providing of any reason for the rejection of bids and entertaining all the
queries only after the finalization of the tender are untenable for the reason
that once the bid having been finalized, the third party rights would have
automatically created as per the terms of the contract and it would become
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impossible for the respondents to undo the contract. Therefore, the present
mechanism of the respondents to delay the query of rejection of bids is not
only against the public interest but also against the settled legal principles
which aim at prioritizing value maximization of the public exchequer. Article
14 strikes at the arbitrariness because any action that is arbitrary, must
necessarily involve negation of equality. It is well settled law that wherever
there is arbitrariness in the State action, whether it be of the legislature or
of the executive or of an "authority" under Article 12, Article 14 immediately
springs into action and strikes down such State action. In fact, the concept
of reasonableness and non-arbitrariness pervades the entire constitutional
scheme and is a golden thread which runs through the whole of the fabric
of the Constitution as has been held by the Hon'ble Supreme Court in the
case of Shayara Bano vs. Union of India, (2017) 9 SCC 1 that any
legislation and/or order of any authority which is found to be manifestly
arbitrary, can be struck down as violative of Article 14 of the Constitution.
Clause C.1.2 of the tender documents categorically provides for a right of
hearing of the bidders, in case if he feels that a proper procurement
process is not being followed and/or his Techno-Commercial bid has been
rejected wrongly. Therefore, if the respondents consider that there is any
shortfall in the petitioner's documents, they could have called for the same,
if any, prior to mechanical, cryptic and arbitrary rejection of bids by them.
The lowest bid of the successful bidder, M/s Keystone Infra (P) Limited
being INR 191.79 crores, the financial bid of the petitioner is very-very
competitive and if the present bid is finalized without assigning any lawful
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reasons for the rejection of its bid, it would not only be detrimental to the
business of the petitioner but would cause loss for the public exchequer
frustrating the entire object of the online bidding process. The Respondent
No.2, without appreciating the representation of the petitioner, opened the
financial bids of the other bidders in gross violation of the guidelines as
envisaged in Clause C.1 of the Section-IlI of the tender documents. The
communications dated 24-09-2021 and dated 25-09-2021 which have
been issued by the respondent No. 2, are not only arbitrary, illegal and bad
in law but are also violative of the principles of natural justice.
[4.1] The stand of the respondents as indicated in the affidavit filed on
behalf of the respondents, is that the petitioner's bid was rejected on the
ground that it did not submit the turnover certificate issued by a Chartered
Accountant or equivalent of the respective country in the format as
mentioned in Appendix-4 of the NIT. It has also been stated therein that
the JAL JEEVAN MISSION (JJM) was launched by the Government of
India for providing "Functional Household Tap Connection (FHTC)" to
every household by the year, 2024. In Manipur, this JJM is being
implemented by the PHED, Government of Manipur with the target of
completing it by the year, 2021-2022. For the current year, 2020-2021, the
PHED issued the NIT dated 27-02-2021 for the work "Water Supply Project
for Manipur State" for providing drinking water supply to 13 towns. This
work is for the construction of water supply tanks and other structures in
Manipur.
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[4.2] In Section-III: Evaluation and Qualification Criteria of the NIT, the
terms and conditions of the technical criteria have been prescribed and it is
the specific terms & condition under Section-III A.1, Sl.No.3 thereof that a
bidder has to submit the average construction turnover which should be
the audited financial statements for the last three financial years along with
a turnover certificate issued by a Chartered Accountant or equivalent of the
respective country in the format as mentioned in Appendix-4.
[4.3] The petitioner submitted its turnover certificate which is not in the
format as mentioned in Appendix-4 and that in the said certificate, there is
no mention about the turnover from the execution of water supply and
other civil engineering works. In other words, the petitioner failed to submit
the turnover certificate in the format as mentioned in Appendix-4 of the
NIT. Hence, the bid of the petitioner was rejected at the stage of technical
bid for the violation and non-fulfillment of technical criteria provided under
Section- III A.I, Para 3 of the NIT. As per the terms and conditions of the
NIT, Section-II D.1 provides for a confidentiality clause which reads as
follows:
"D.1. CONFIDENTIALITY
D.1.1 Information relating to the evaluation of bids and
Recommendation of contract award shall not be disclosed to
Bidders or any other persons not officially concerned with the
bidding process until Contract award is communicated to all
bidders."
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[7]
In view of the above provisions, the PHED responded to the
petitioner's mail dated 24-09-2021 vide a return mail dated 25-09-2021
stating that any query raised after the opening of technical bid would be
entertained only after the finalization of the tender. Since the Petitioner
having participated in the process of NIT after fully knowing the terms and
conditions of the NIT, there is no merit in the writ petition and as such, the
same is liable to be rejected with heavy cost.
[5] In its rejoinder affidavit, it has been stated by the petitioner that it
did submit the turnover certificate in the format as mentioned in Appendix-
4 and along with the turnover certificate, the petitioner also enclosed a
certificate obtained from the Chartered Accountant. A bare perusal of
turnover certificate clearly reveals that the petitioner provided all the details
as envisaged in the format mentioned in Appendix 4 of the bidding
documents. Thus, the contention of the respondents that the petitioner
failed to submit the turnover certificate in the format as mentioned in
Appendix-4 of the NIT is absolutely misconceived, wrong, incorrect and
frivolous. Therefore, the rejection of the technical bid of the petitioner on
this count alone is not only flimsy, unreasonable but also suffers from vice
of arbitrariness being violative of Article 14 of the Constitution. The
respondents in para 7.l of their counter affidavit has categorically admitted
that the tender opening committee rejected the petitioner's technical bid
upon "minute observation", from which it is evident that the petitioner's
technical bid had been rejected arbitrarily and capriciously. The expression
"contract business" used in the certificate issued by the Chartered
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Accountant would mean turnover of the firm for the projects similar to that
of the present NIT and therefore, there is no discrepancy in the certificate
and the petitioner is having sufficient and good amount of experience as
reflected from the turnover as stated in the certificate thereby making the
petitioner fulfilling all the conditions as envisaged in Section-III of the
tender documents. Assuming but not admitting that the certificate is not in
accordance with the prescribed format, in that case, it was expected from
the respondents who were expected to be fair and transparent in the public
procurement process, to call upon the petitioner to rectify the alleged
technical error as they did call for the details earlier from the petitioner. The
details mentioned in the turnover certificate in the prescribed format are
self-certified by the petitioner, the details of which are confirmed by the
Chartered Accountant on his own letterhead and therefore, the tender
documents of the petitioner cannot be faulted with. As regards the
contention of the respondents made in para 7.2 of the counter affidavit that
the turnover as provided by the petitioner does not mention "turnover from
water supply", it has been stated that the format of turnover certificate as
envisaged in Appendix-4 of the tender documents nowhere provides for
providing a separate turnover of water supply. The format of the turnover
certificate provides for a combined turnover from "execution of water
supply and other civil engineering works" and there is no separate column
for mentioning of turnover from water supply only. The relevant extract of
turnover certificate is re-produced herein below:
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Certified that, the Turnover of M/s. ________ from execution of
Water Supply and other Civil Engineering works during the
previous three (03) financial years is as below.
Financial Year Amount (INR crores)
2017-18
2018-19
2019-20
Average INR______Crores
(INR Figure in words)
This certificate is given on the basis of copy of audited financial
reports for profit/ loss account and balance sheet.
The petitioner submitted a turnover certificate in the prescribed
format based on the last three audited financial years, wherein the turnover
from the execution of water supply and other engineering works has been
mentioned together in line with the format of average turnover certificate as
mentioned in Appendix-4 of the tender documents.
[6] From the aforesaid pleadings, the short issues that arise for
consideration by this Court, are as to whether the petitioner submitted its
requisite documents and in particular, the turnover certificate in the format
as mentioned in Appendix-4 of the bidding documents and if yes, whether
the rejection of the technical bid of the petitioner by the respondents,
without assigning any reason thereof, was violative of the provisions of
Article 14 of the Constitution of India.
[7] It has been vehemently submitted by Shri O.P Mehta, learned
counsel appearing for the petitioner that the petitioner submitted all the
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documents in terms of the bidding documents including the turnover
certificate as mentioned in Appendix-4. Without assigning any reason and
probably for favouring other bidder, the technical bid of the petitioner was
rejected by the respondents. Assuming but not admitting that the turnover
certificate was not in accordance with the format as mentioned in
Appendix-4, in that case, it was expected from the respondents who were
expected to be fair and transparent in the public procurement process, to
call upon the petitioner to rectify the alleged technical error as they had
called for the details earlier from the petitioner. According to him, the
judgment and order dated 11-10-2021 passed by this Court in WP(C)
No.39 of 2021 & ors., M/S Nezone Pipes & Structures Vs. State of
Manipur & ors. is not applicable to the facts of the present case.
Combating his submissions, it has been submitted by Shri N. Kumarjit
Singh, the learned Advocate General that the petitioner failed to submit the
requisite documents and in particular, the turnover certificate in the format
as mentioned in Appendix-4. The turnover certificate stated to have been
filed by the petitioner, was not as per the format for the reason that it was
not issued by the Chartered Accountant or equivalent but by the petitioner
itself. Similar is the case with the certificate issued by the Chartered
Accountant which was not in terms of the format as mentioned in
Appendix-4. Whichever way one looks at, neither of them does fulfil the
criteria and therefore, the technical bid was rightly rejected by the
respondents. Moreover, it has been submitted by him that the issue
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involved herein is covered by the judgment and order dated 11-10-2021
passed by this Court in M/S Nezone Pipes & Structures case.
[8] It is absolutely correct to say that the issues involved herein are
identical to that of the ones involved in M/S Nezone Pipes & Structures
case (supra) but since the facts and circumstances of these two cases are
slightly different, the issues involved herein are to be considered and
decided by this Court confining to the facts and circumstances of the
present case. It may be noted that the bidding documents of these two
cases are almost identical. In M/S Nezone Pipes & Structures case, this
Court had the occasion to examine the relevant provisions of the bidding
documents, the relevant portion of the said judgment and order containing
the observations made by this Court therein which are also relevant for the
present case, read as under:
"[6] It is not in dispute that the NIT dated 26-03-2021 was
issued by the Chief Engineer, PHED, Government of Manipur
inviting online rate quotation from amongst the reputed
manufacturers of GI Pipes. The said NIT contains and lays down
various conditions, of which condition 1 provides that the bidding
documents shall be downloaded from the website; that condition
15 provides that the authority reserves the right to cancel any or
all bids without assigning any reason and that condition 17
provide that the details can be seen from the bidding documents.
Section-1 of the bidding documents provides for the preparation
of bids and para C 2 thereof provides that the technical bid shall
comprise the documents mentioned in C 2 1 (Part-I). Section-III
of the bidding documents provides for the evaluation and
qualification criteria, of which the Sl. No.3 & 4 of the technical
criteria which are relevant for the present case, read as under:
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3 The manufacturer should have Performance
credential of supply for a certificate issued by
minimum value of Rs. 40.00 crore an officer not below
(Rupees forty crore) only in one the rank of Executive
year to any Government Engineer shall be
Department during the last five submitted as per
financial years from FY 2015-16 Appendix-6.
to FY 2019-20
4 The manufacturer should submit Audited Financial
the audited financial statements Statements for last 3
for the last 3 (three) financial financial years along
years from FY 2017-18 to FY with Turnover
2019-20 to demonstrate the Certificate issued by
current soundness of the bidders' Chartered Accountant
financial position showing a as per Appendix-4.
minimum average turnover of not
less that Rs.40.00 crore (Rupees
forty crore) for the product under
consideration in the tender.
The wordings of these two technical criteria are plain and
unambiguous which require no interpretation at all. The criteria
as mentioned in Sl.No.4 can be divided into three conditions-
one, the manufacturer should submit the audited financial
statements for the last three financial years from the year, 2017-
18 to 2019-20; two, they should show a minimum average
turnover of not less than Rs.40.00 crore and three, they should
be for the product under consideration in the tender. It may be
noted in this regard that the documents which are required to be
submitted by the bidders, are the audited financial statements
along with the turnover certificate issued by the Chartered
Accountant as per Appendix-4 which is nothing but a format of
the certificate to be issued by a Chartered Accountant and only
the requisite details are to be filled up therein. A careful reading
of the said criteria makes it very clear that a minimum average
turnover will have to be one which can be easily and
conveniently ascertained from the audited financial statements
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for the aforesaid years. In other words, the audited financial
statements to be submitted by the bidders ought to reflect the
turnover of the product under consideration in the tender so that
the authority could easily verify and identify the minimum
average turnover as shown in the certificate issued by the
Chartered Accountant as per Appendix-4.
[8] The average turnover certificate as per Apepndix-4
submitted by the appellant is on record and on perusal thereof, it
is seen that the contention of the learned Advocate General that
it is not strictly in terms of the Appendix-4, appears to be correct
to that extent. As has been observed hereinabove, the
Appendix-4 is nothing but a format of the certificate to be
submitted by all the bidders, after the same being filled up with
the requisite details/information. It is beyond our comprehension
as to why the appellant being a partnership firm carrying on such
a big business, could not submit its bids in the manner
prescribed in the bidding documents and in particular, the
certificate as per Appendix-4. Be that as it may, the turnovers for
the financial years, 2017-18; 2018-19 and 2019-20 as shown in
the certificate submitted by the appellant read as under:
Financial year Total Turnover Turnover of G.I. Pipes
(INR Crores) (INR Crores)
2017-18 279.66 106.94
2018-19 363.75 114.96
2019-20 322.42 109.92
The said certificate will have to be given by the Chartered
Accountant on the basis of the audited financial reports for
profit/Loss Account and Balance Sheets. The audited financial
statements of the appellant for the financial years, 2017-18,
2018-19 and 2019-20 on the basis of which the certificate was
given by the Chartered Accountant, are on record. The relevant
portion of the auditor's report dated 31-07-2018 for the financial
year, 2017-18 reads as under:
Year Ended Year Ended
31-03-2018 31-03-2017
(Rs.) (Rs.)
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SCHEDULE 'I' SALES
Finished goods 2,70,70,85,367 1,72,96,54,690
By products 5,46,05,596 3, 27,97,608
HR Coll/Slitt Sale 3,45,74,106 10,29,482
Total 2,79,63,65,069 1,76,34,81,780
The relevant portion of the auditor's report dated 26-06-2019
for the financial year, 2018-19 reads as under:
Year Ended Year Ended
31-03-2019 31-03-2018
(Rs.) (Rs.)
SCHEDULE 'H' SALES
Finished goods 3,519,801,645 2,707,085,367
By products 70,288,736 54,605,596
HR Coll/Slitt Sale 33,902,188 34,674,106
3,623,992,569 2,796,365,069
Job work charges received 220,712 211,862
Freight recovered 12,677,935
Inspection fee recovered 617,402
Total 3,637,508,618 2,796,576,931
The relevant portion of the auditor's report dated
17-10-2020 for the financial year, 2019-20 reads as under:
YEAR ENDED YEAR ENDED
31-03-2020 31-03-2019
(Rs.) (Rs.)
SCHEDULE 'H' SALES
Finished goods
MS Black Pipes 1,640,321,371 1,823,311,876
Galvanised Iron Pipes 1,099,164,183 1,149,568,350
Steel Tibular Poles 284,743,054 478,904,230
Steel Scafolding 65,582,791 44,146,302
Steel structures 3,890,700 1,927,869
Metal Crash Barriers 24,867,378 21,943,018
3,118,569,477 3,519,801,645
By products 66,112,939 70,288,736
HR Coll/Slitt Sale 37,405,919 33,902,188
3,222,088,335 3,623,992,569
Job work charges received 345,549 220,712
Freight recovered 294,949 12,677,935
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Inspection fee recovered 1,504,220 617,402
Total 3,224,233,053 3,637,508,618
[9] From the perusal of the auditor's reports for the financial
years, 2017-18 and 2018-19 and in particular, the relevant
portions thereof as reproduced hereinabove, it is clearly seen
that the turnovers of the product under consideration are not
reflected separately at all. But the Chartered Accountant, in his
certificate, has shown the turnovers of the product under
consideration for the said years but the basis on which the
turnovers for the financial years, 2017-18 and 2018-19 have
been shown in the certificate, is not disclosed and in other
words, there is no material on record which would clearly
demonstrate the separate turnovers of the product under
consideration. Moreover, in the auditor's report for the year,
2019-20, the relevant portion of which is reproduced
hereinabove, the turnover of the product under consideration for
the financial year, 2018-19 is reflected, even though the auditor's
report for the same financial year, 2018-19 is silent about it. The
turnovers as shown in the certificate issued by the Chartered
Accountant and that of the auditor's reports as mentioned above,
do not tally each other. If that be the case, the correctness of the
certificate issued by the Chartered Accountant is doubtful and it
was not correctly accepted and relied upon by the authority at its
wisdom. The learned counsel appearing for the appellant made
an endeavour to contend that since the appellant being a
partnership firm, the turnover was not given separately for the
product under consideration and therefore, the minimum
average turnover could be ascertained by reading all the
documents as a whole and in particular, the performance
certificates. His contention has no merit and substance for the
reason that the performance certificates will have to be
submitted as per Appendix-6, while the average turnover
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certificate will have to be submitted as per Appendix-4. Both the
certificates are not one and the same. They are different
conditions to be fulfilled by the bidders while submitting their
bids. It may further be noted that the documents to be furnished
by the bidders must be plain and clear for the reason that they
ought to speak for themselves so that the authority could verify
the minimum average turnover without any effort being made for
it. In fact, the bidding documents are made known to the bidders
well in advance and all that the authority will have to do, is to see
that the documents are submitted in terms of the bidding
documents and the authority cannot be expected to examine the
documents furnished by the bidders by interpreting them to
understand their meaning. If the documents are not submitted in
terms of the bidding documents or for that matter, they are not in
proper order, the authority has the right to reject it. This is what
has been done by the respondents herein in the present case
and there is nothing wrong in it. In a tender, the submission of
bids is an offer and the authority has a right to reject it, provided
the bidder has failed to fulfill the terms and conditions of the
tender. The only safeguard in a tender process is that the
authority being an institution, ought to act fairly and reasonably.
It is the appellant who is to be blamed for its own mistake.
Having considered the circumstances as aforesaid, the authority
has rightly rejected the technical bid of the appellant.
[10] The other point which the learned counsel appearing for
the appellant has emphasized during the course of hearing, is
that the appellant was not given an opportunity to clarify the
doubt on the part of the authority, although such an opportunity
had been given to the respondent, M/S BST Infratech Limited. It
has been vehemently submitted by him that such inaction on the
part of the authority is unreasonable and discriminatory being
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violative of the provisions of Article 14 of the Constitution of
India. It is no doubt true that under para 2.1 of Section-II, the
authority is empowered with a discretion to seek clarification
from the bidder. But it is nowhere provided therein that all the
bidders should be asked for clarification. It is for the authority to
decide whether a clarification is required to be sought from a
bidder or from all the bidders depending upon the circumstances
and the requirement. In the present case, the authority appears
to have felt that there was no need of seeking a clarification from
the appellant, as the appellant was found to be unqualified in the
technical bid on the ground that it did not have a minimum
average turnover of the product under consideration. Merely
because the appellant was not given an opportunity to give a
clarification as regards the minimum average turnover, it cannot
be said that the inaction on the part of the authority was unfair
and unreasonable. Even assuming that the appellant was given
the opportunity, it could not have improved or modified the
audited financial statements for the years, 2017-18 and 2018-19
for the reason that they had formed part of the records of the
Income Tax Department. The facts and circumstances of the writ
petition being WP(C) No.974 of 2019 are not exactly the same
as that of the present appeals. In other words, the issues
involved in both the cases are not exactly the same. But the only
observation made by this Court in WP(C) No.974 of 2019 which
is relevant for the present appeals, is that the average turnover
as furnished by the appellant in that case as per Appendix-4,
was found to be of overall turnover and not of product under
consideration. In the present case, the basis of the minimum
average turnover as shown in the certificate of the Chartered
Accountant is not there at all in the audited financial statements
for the years, 2017-18 and 2018-19, because of which the
authority had no option but to reject the technical bid of the
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appellant."
[9] As has been observed hereinabove, the bidding documents as
prescribed by the respondents in the present case and that of the M/S
Nezone Pipes & Structures case are almost identical. SL No.3 of the A.1
Technical Criteria of the Section-III: Evaluation and Qualification Criteria
reads as under:
3. Average Construction Turnover: Audited Financial
The bidder should submit the Statements for the last
audited financial statements for three financial years
the last 3 (three) financial years along with Turnover
from FY 2017-18 to FY 2019-20 Certificate issued by
to demonstrate the current Chartered Accountant or
soundness of the bidders' equivalent of the
financial position showing a respective country in the
minimum average turnover of not format as mentioned in
less than Rs. 67.34 Crore from Appendix-4.
execution of water supply and
other civil engineering works.
On perusal of these criteria and the corresponding criteria as
mentioned in the case of M/S Nezone Pipes & Structures case, it is seen
that both are almost identical except some minor changes which have
been made in that of the present case. The wordings of the criteria are
plain and unambiguous and require no interpretation at all. The petitioner
was required to submit the audited financial statements for the last 3
(three) financial years from FY 2017-18 to FY 2019-20 to demonstrate its
current soundness of the financial position showing a minimum average
turnover of not less than Rs.67.34 crore from the execution of water supply
and other civil engineering works. These audited financial statements will
have to be accompanied by a turnover certificate issued by a Chartered
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Accountant or equivalent of the respective country in the format as
mentioned in Appendix-4. The stand of the respondents is that such a
turnover certificate issued by a Chartered Accountant or equivalent of the
respective country in the format as mentioned in Appendix-4 was not
submitted at all by the petitioner. Denying it, it has been stated by the
petitioner that such a turnover certificate had been submitted by it, a copy
of which has been placed on record at page 334 of the writ petition. In view
of the rival contentions, this Court perused the turnover certificate
submitted by the petitioner but it is seen that it is not issued by a Chartered
Accountant in the format as mentioned in Appendix-4 but by the petitioner
itself which cannot, in other words, be said to have been issued in the
manner laid down by the respondents in their bidding documents and in
particular, the criteria mentioned above in the tabulation. Therefore, the
contention of the learned Advocate General, in this regard, has some merit
and substance. The only justification that has been given by the
petitioner's counsel during the course of hearing, is that the Chartered
Accountant has given a certificate dated 18-02-2021 which is available at
page 335. It has been submitted by him that both the turnover certificates
issued by the petitioner itself and by the Chartered Accountant will have to
be read together so that the minimum average turnover, of not less than
Rs.67.34 crore, of the petitioner from the execution of water supply and
other civil engineering works can be easily ascertained by the
respondents. Even if an explanation was required from the side of the
petitioner, the respondents could have invoked the provisions as contained
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[20]
in Clause D 2.1 of the bidding documents and could have sought it from
the petitioner. The respondents failed to do that and without assigning any
reason, the technical bid of the petitioner had been rejected which is unfair
and unreasonable being violative of Article 14 of the Constitution of India.
[10] The conjoint reading of both the turnover certificates-one, issued
by the petitioner itself and two, issued by the Chartered Accountant makes
it very clear that neither of them can be said to be in terms of the format as
mentioned in Appendix-4. What is required by the respondents in terms of
the bidding documents, is that the turnover certificate ought to be issued
by a Chartered Accountant or equivalent, based on the audited financial
statements of the last three years, in the format as mentioned in Appendix-
4 which is not there at all in the documents submitted by the petitioner. It is
the documents which speak for themselves and need no interpretation at
all. In a tender, a bid submitted by a bidder is an offer and it is for the
authority concerned either to accept it or reject it in accordance with the
terms and conditions contained in the bidding documents. The only
safeguard available with the bidders is that the authority being an
institution, ought to act fairly and reasonably even in matters relating to
Government contracts. In other words, if there is any unfair and
unreasonable action on the part of the respondents while conducting the
tender process, it will be hit by the provisions of Article 14 of the
Constitution of India. The law is well settled in this regard and the
contention of the learned counsel appearing for the petitioner as regards
the law laid down by the Hon'ble Supreme Court appears to be correct to
W.P. (C) No. 672 of 2021 Contd.../-
[21]
that extent. But since the petitioner has failed to submit the turnover
certificate in the format as mentioned in Appendix-4, the question of unfair
and unreasonable action on the part of the respondents will not arise at all.
The petitioner being a bidder, was required to fulfil the terms and
conditions as prescribed in the bidding documents, if it wished to
participate in the tender process and after having done that, if the authority
conducted the process of tender unfairly and unreasonably, its action
would be rendered bad in law. In such circumstances only, the interference
of the Court may be called for in matters relating to contract. In the present
case, it is the petitioner which has failed to fulfil the terms and conditions
laid down in the bidding documents and therefore, the contention that the
reason has not been assigned by the respondents for the rejection of its
bid, will not at this stage help the petitioner at all.
[11] One aspect which the learned Advocate General has emphasized, is
the provisions of the Clause D 1.1 which provide that the Information relating
to the evaluation of bids and recommendation of contract award shall not
be disclosed to bidders or any other persons not officially concerned with
the bidding process until contract award is communicated to all bidders.
However, it is nowhere specifically mentioned therein that the reasons for
rejecting the technical bid of a bidder, cannot be assigned and furnished to
it/him. The expression "evaluation of bids and recommendation of
contract" is relevant which would prima facie mean and include both the
technical and financial bids. A bidder whose technical bid has been
W.P. (C) No. 672 of 2021 Contd.../-
[22]
rejected by the authority, will not qualify for the financial bid and therefore,
there is no reason as to why such a bidder shall not be informed about the
reason for the rejection of its technical bid. To do so will not amount to
disclosing the information about the evaluation of bids and the
recommendation of contract because such a bidder will have no idea about
the bids of other bidders except about its own bids. The disclosure of such
information will, in no way, affect the rights of other bidders who are
qualified for the financial bids. On top of that, such a confidential condition
cannot prevail upon the provisions of Article 14 of the Constitution of India
except in respect of the basic requirement as mentioned in the
confidentiality clause. Since the validity and correctness of the provisions
of Clause D.1.1 is not the subject matter in issue, it is not appropriate for
this Court to give the detailed observations. But this Court, after having
perused the confidentiality clause as aforesaid, is of the opinion that once
a bid is rejected by the authority at the stage of technical bids, the bidder
shall be informed about it with reasons on which his/ its technical bid has
been rejected which will demonstrate the transparency in the process of
tender. The State Government is duty bound to ensure that a tender
process is conducted in a fair and transparent manner so as to avoid
attraction of the provisions of Article 14 of the Constitution of India. So far
as the present case is concerned, there is no point of directing the
respondents to disclose the reason, as the same has been stated by them
in the counter affidavit. This Court, after having heard the learned counsels
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[23]
appearing for the parties and perused the materials on record, is of the
further opinion that no interference of this Court is called for in the matter,
since the petitioner has failed to submit the turnover certificated issued by
the Chartered Accountant in the format as mentioned in Appendix-4 which
is one of the terms and conditions of the bidding documents.
[12] In view of the above and for the reasons stated hereinabove, the
instant writ petition is devoid of any merit and is accordingly dismissed with
no order as to costs. The interim order passed by this Court in the present
case stands vacated accordingly.
JUDGE
FR/NFR
Devananda
NINGOM Digitally
by
signed
BAM NINGOMBAM
VICTORIA
VICTORI Date:
2021.10.29
A 15:23:24 +05'30'
W.P. (C) No. 672 of 2021 Contd.../-
