Orissa High Court
Afr M/S Jyotin Kumar Sahoo vs Chief Administrative Officer on 17 August, 2022
ORISSA HIGH COURT: CUTTACK
W.P.(C) No. 27805 OF 2021
In the matter of an application under Articles 226 and 227
of the Constitution of India.
---------------
AFR M/s Jyotin Kumar Sahoo ..... Petitioner
-Versus-
Chief Administrative Officer,
East Coast Railway and others ..... Opp. Parties
For Petitioner : M/s. Soumya Ranjan Mohanty,
D. Acharya and A. Mishra,
Advocates.
For Opp. Parties : Mr. P.K. Parhi, Assistant
Solicitor General of India along
with Mr. Debasis Tripathy,
Central Government Counsel.
[O.Ps. 1 to 8]
Mr. Satya Smruti Mohanty,
Swayanjit Rout and
Nishit Agarwal, Advocate.
[O.P.No.9]
P R E S E N T:
THE HONOURABLE DR. JUSTICE B.R.SARANGI
AND
THE HONOURABLE MR. JUSTICE SANJAY KUMAR MISHRA
Date of hearing: 11.08.2022: Date of judgment: 17.08.2022
// 2 //
DR. B.R. SARANGI, J. The Petitioner, which is a Proprietorship
Firm and is a Working Contractor of the East Coast
Railway, being represented through its Proprietor, has filed
this Writ Application seeking to quash Annexure-4, dated
17.08.2021, by which the offer submitted by the Petitioner
has been considered as non-compliant and bypassed, in
view of non-submission of undertaking regarding "not
blacklisted or debarred by Railways or any other
Ministry/Department of Govt. of India from participation
in Tender on the date of opening of the bids", which was
mandatory to be submitted in the Tender offer.
2 The factual matrix of the case, in a nutshell, is
that the East Coast Railway, through Opposite Party No.6,
floated an E-Tender Notice for the work "Modification of
power line crossings (33 KV/ 11 KV/ LT) between Sonepur
to Boudh Railway Station in connection with new line
between Khurda Road-Bolangir Project" calling upon the
eligible bidders to participate. Pursuant to such E-Tender
Notice, the Petitioner participated in the Tender process by
// 3 //
filing its bid satisfying the credentials prescribed in
Clause-11 of the Tender document. In the event of non-
compliance of the conditions stipulated in Clause-11, the
bid of the tenderer was to be rejected, as per Clause-12 of
the Tender Call Notice. Amongst the nine number of
bidders participated in the Tender process, the Petitioner
was ranked as L4. Since L1 to L3 bidders were ousted from
the Tender process for technical reason and the Petitioner
was next in the line being L4 to qualify in the biding
process and the contract ought to have been settled in his
favour, but due to non-compliance of the provisions
contained in Clause-14, its offer was considered as non-
compliant and bypassed, as it had not submitted the
undertaking regarding not blacklisted or debarred by
Railways or any other Ministry/Department of Govt. of
India from participation in the Tender on the date of
opening of the bid, which is mandatory to be submitted in
the Tender offer. Hence, this Writ Petition.
// 4 //
3. Mr. Somya Ranjan Mohanty, learned Counsel
appearing for the Petitioner, vehemently contended that
compliance of Clause-14 of the Tender Call Notice is not
mandatory one. According to him, the Petitioner has got all
the Tender credentials as per Clause-11. Clause-12 of the
Tender Conditions clearly specifies that non compliance
with any of the conditions set forth "therein above", is
liable to result in the Tender being rejected. It is further
contended that "therein above" means the Clauses
mentioned from Clause-1 to Clause-11. If any of the
conditions, as stipulated from Clause-1 to 11, has not
been satisfied or complied with, the Tender has to be
rejected. The Petitioner, having complied with such
conditions, its Technical Bid was opened and found to be
qualified. Thereafter, the Price Bid was also opened and
the Petitioner was ranked L4. But due to non-compliance
of Clause-14, which is not mandatory, rather, it is
ancillary to the bid, the offer submitted by the Petitioner
was considered as non-compliant and bypassed, which is
arbitrary, unreasonable and contrary to the provisions of
// 5 //
law as well as Tender Conditions. It is further contended
that in the Tender document nowhere it is stipulated that
due to non-compliance of Clause-14 and non-submission
of the undertaking will entail rejection of the offer of a
Tenderer, whereas Clause-14 clearly prescribes that
concealment/ wrong information shall make the contract
liable for determination under Clause-62 of the General
Conditions of Contract. Even though the Petitioner had
filed its representation on 12.08.2021 under Annexure-3
specifically taking a stand that the Petitioner has not been
blacklisted or debarred and non-submission of such
undertaking was merely a result of inadvertent mistake
while filing the bid, but the same was rejected vide
Annexure-4, dated 17.08.2021, which cannot sustain in
the eye of law.
3.1 It is further contended that in the Tender Call
Notice, there are mainly two types of conditions, i.e.
essential and non-essential. Clause-11 of the Tender
Document deals with essential conditions and for non-
// 6 //
compliance of the same, as per Clause-12 the bid is liable
to be rejected. The conditions contained in Clause-14 of
the Tender Document are non-essential, meaning thereby,
are merely ancillary and subsidiary in nature to the main
object to be achieved in the Tender. Thereby, nowhere in
the Tender Document, it is mentioned that non-
submission of undertaking of not being blacklisted or
debarred will result in rejection or disqualification of the
bid. Thereby, the action of the Authorities holding that the
offer of the Petitioner has been considered as non-
compliant and bypassed, vide letter dated 17.08.2021
under Annexure-4, is perse unfair, illegal, arbitrary,
discriminatory, abridges the legitimate expectation and
also infringes the statutory and fundamental rights of the
Petitioner as guaranteed under Articles 14, 19 and 21 of
the Constitution of India.
To substantiate his contention, learned Counsel
for the Petitioner has relied upon the judgments of the
apex Court as well of this Court in the cases of Hukam
Chand Shyam Lal v. Union of India, AIR 1976 SC 789:
// 7 //
(1976) 2 SCC 128; Harinarayan G. Bajaj v. Rajesh
Meghani, (2005) 10 SCC 660; Poddar Steel Corporation
v. Ganesh Engineering Works, AIR 1991 SC 1579 :
(1991) 3 SCC 273 and Krushna Chandra Sahoo v. Bank
of India, AIR 2009 Ori 35.
4. Mr. P.K. Parhi, learned Assistant Solicitor
General of India appearing along with Mr. Debasis
Tripathy, learned Central Government Counsel for
Opposite Parties No.1 to 8, emphatically submitted that
Clause-14 of Chapter-2 of the annexed document is a
mandatory document. Therefore, for sole Proprietorship
Firm an undertaking was to be submitted that it is not
blacklisted or debarred by Railway or any other
Ministry/Department of Govt. of India from participation
in Tender on the date of opening of the bid, either in
individual capacity or as a member of Partnership Firm or
JV in which it was/is a Partner/Member. Concealment/
wrong information in regard to above shall make the
Contract liable for determination under Clause-62 of the
// 8 //
General Conditions of Contract. In the Tender Document,
at Sl. No.3 of Commercial Compliance, it is provided that
the Tenderers shall have to submit the undertaking, as
provided under Clause-14 of Chapter-2 of the annexed
Document, and under Clause-3.1(iii) of the Tender
Document, the Tenderers have been advised to check
whether all other mandatory documents have been
uploaded, without which the Tender offer is to be
summarily rejected or is liable to be rejected. Therefore,
the undertaking as per Clause-14, being a mandatory
document to be uploaded by the Tenderer, having not been
submitted, amounts to non-compliance of Clause 3.1 (iii)
of Chapter-2. Therefore, the offer submitted by the
Petitioner has been considered as non-compliant and
bypassed. Thereby, no illegality or irregularity has been
committed by the Authorities by declaring so.
4.1 It is further contended that along with the
Tender, the Tenderer had to submit necessary financial
credentials as 'Annexure-C' duly filled in, singed by the
// 9 //
Tenderer so also verified and singed by the Chartered
Accountant to qualify the financial eligibility criteria.
Annexure-C submitted by the Petitioner is not
countersigned by the Chartered Accountant and thus, the
offer was technically non-compliant.
4.2 It is also further contended that the particular
Tender is a Single Packet Tender as per Railway Board's
Letter No. 94/CE-I/CT/4/Pt.17 dated 13.08.2022. In
Railway tendering process, Tender with advertised value of
less than Rs.10 Crore is invited as a Single Packet Tender
and with value more than Rs.10 Crore, is invited as Two
Packet Tender. The advertised value of the instant Tender
is Rs.5 Crore 67 Lakhs. Therefore, it is a Single Packet
Tender. As such, in the Single Packet Tender, there is no
separate Technical and Financial Bid. The Financial Offer,
along with Technical portion of the bid, is opened
simultaneously. The tabulation is made as per offered rate
of the Tenderers and marked as LI, L2, L3 etc., as per
offered rate in increasing order. The Tender Committee
// 10 //
scrutinizes and verifies the submitted documents/
credentials to check the fulfillment of technical eligibility
criteria and other mandatory criteria of the offers and
financial offers of technically qualified bidders are
scrutinized/adjudged to rate the reasonability of the
offered rate. In this particular case, L1 to L5 Tenderers
were rejected due to non-fulfillment of one or more
qualifying/eligibility criteria. It is further contended that
the Petitioner, being L4 Tenderer, its offer was considered
as non-complaint and bypassed, due to non submission of
undertaking under Annexure-14 and submission of
incomplete document under Annexure-C, i.e. "Compliance
of Eligibility Criteria by the Tenderer regarding contractual
payments received". It is further contended that nowhere it
is mentioned in the Tender document that non-submission
of the above undertaking will not lead to rejecting the offer
of the Tenderer. On the contrary, it has been mentioned
under the said Clause-14 that concealment/ wrong
information in regard to above shall make the contract
liable for determination under Clause-62 of the General
// 11 //
Conditions of Contract. Thereby, no illegality or irregularity
has been committed by the Authority in passing the order
impugned, and the said decision of the Authority requires
no interference by this Court in exercise of Power under
Judicial Review under Article 226 of the Constitution of
India.
To substantiate his contention, learned
Assistant Solicitor General of India has relied upon the
judgments of the apex Court as well as of this Court in
the cases of M/s Agmatel India Pvt. Ltd v. M/s
Resoursys Telecom, 2022 (2) SCALE 554; N.G. Projects
Limited v. Vinod Kumar Jain, AIR 2022 SC 1531 and
RKD-CMRGS Joint Venture v. Indian Port Rail &
Ropeway Corporation Ltd, 2020 (III) ILR-CUT 32.
5. Mr. Satya Smruti Mohanty, learned Counsel
appearing for Opposite Party No.9, while stepping into the
shoes of the contentions advanced by Mr. P.K. Parhi,
learned Assistant Solicitor General of India appearing for
Opposite Party Nos. 1 to 8, contended that Opposite Party
// 12 //
No.9 has been ranked as L6 and has qualified all
requirements for the bid and after the rightful rejection of
the bid of L1 to L5, including the Petitioner, Opposite Party
No.9 stands eligible for the bid, as per the provisions laid
down in the Tender document and the reports generated
by Opposite Party Nos. 1 to 8. He further contended that
rejection of the bid of the Petitioner was for non-
compliance of Clause-4.1 of the Tender Form (Second
Sheet) and Clause-14 of the Tender document, which
states that it is mandatory for any Sole Proprietorship
Firm to submit an undertaking declaring that he has not
been blacklisted or debarred by Railways or any other
Ministry/Department of Govt. of India from participation
in the Tender. Since the Petitioner failed to submit that
undertaking, in view of Clause-12, since there was non-
compliance of the Tender document, the bid of the
Petitioner has been rightly rejected. Clause-11(ii) of the
Tender document makes it clear that it is mandatory for
the Bidders to submit the audited Balance Sheet duly
certified by the Chartered Account, which has not been
// 13 //
complied with by the Petitioner, as is evident from
Annexure-F/1, which has been placed on record at
running Page-131. The said document does not contain
the signature of the Chartered Accountant, thereby
making the document un-verified and not eligible to meet
the requirement in terms of Clause-11 (ii) of the Tender
Document. It is further contended that as per Clause-3.1
of the Tender Form (second sheet), the Tenderer is
required to check whether the details submitted in the
required format was duly signed by the Tenderer and
Chartered Accountant and whether all other mandatory
documents were uploaded, without which the Tender offer
is to be summarily rejected. A perusal of the checklist
provided in E-Tender Document, under the heading
'Compliance', more particularly under the sub-heading
"Commercial-Compliance", clearly states at Sl. No.3 that
submission of the undertaking of not blacklisted or
debarred by Railways or any other Ministry/Department of
Govt. of India from participation in the Tender, is
mandatory, and at Sl. No.5 that the audited Balance Sheet
// 14 //
to be duly certified by the Chartered Accountant, is also
mandatory. Both the aforesaid documents, being
mandatory, were not furnished by the Petitioner. This fact
was duly noted by the Tender Committee in their Report
placed on record at Page-141/142. Therefore, in view of
Clause-12, the documents furnished by the Petitioner,
having not in compliance to the Tender document,
rightfully the Tender of the Petitioner has been rejected.
Thereby, no illegality or irregularity has been committed
by Opposite Party Nos. 1 to 8 in rejecting the bid of the
Petitioner so as to call for interference by this Court at this
stage.
To substantiate his contention, learned Counsel
appearing for Opposite Party No.9 has placed reliance on
the cases of Central Coalfields Limited v. SLL-SML
(Joint Venture Consortium), (2016) 8 SCC 622 and
National High Speed Rail Corporation v. Montecarlo
Limited, (2022) 6 SCC 401.
// 15 //
6. This Court heard Mr. Soumya Ranjan Mohanty,
learned Counsel appearing for the Petitioner; Mr. P.K.
Parhi, learned Assistant Solicitor General appearing along
with Mr. Debasis Tripathy, learned Central Government
Counsel for Opposite Party Nos. 1 to 8, and Mr. Satya
Smruti Mohanty, learned Counsel appearing for Opposite
Party No.9, by hybrid mode, and perused the record.
Pleadings having been exchanged between the parties,
with the consent of learned Counsel for the parties, this
Writ Petition is being disposed of finally at the stage of
admission.
7. The New Line Project between Khurda and
Bolangir of East Coast Railway is a Project of National
Interest. It was being executed jointly by State of Odisha
and Ministry of Railways in cost sharing basis. The
Sections between Khurda and Mahipur in one side and
between Bolangir and Bichhupali in another side have
been completed and passenger services have been started.
The Civil Engineering Works are in full swing in entire
// 16 //
remaining section, i.e., from Bichhupali- Mahipur Section.
The track formation work in Boudh-Tel River Section is
hindered due to presence of non-modified existing power
line crossings in that section. Civil Engineering Work could
be started only after modification of the Power-line
crossing at those locations. The Project is required to be
completed for provision of legitimate facility to the common
people of Odisha in the new Railway alignment of Khurda-
Bolangir Section. The progress of the work in the Section is
regularly discussed in Pro-Active Governance And Timely
Implementation (PRAGATI) and Project Monitoring Group
(PMG) meeting. State Government and Central
Government Authorities are monitoring the progress of the
Project on regular frequency for timely completion of the
Project. All the major infrastructure Projects in India are
deliberated in the National Infrastructure Pipeline (NIP)
portal of India. Railway Board, vide letter dated
30.09.2021, instructed East Coast Railway to upload
monthly data on the portal for monitoring the progress of
the Project by Prime Minister Office, Ministry of Finance
// 17 //
and Ministry of Railways. Khurda Road-Bolangir New
Broad Gauge Line Project appears at Project ID
No.705358. Therefore, to expedite the work and complete
the same timely, steps have been taken by Opposite Party
Nos. 1 to 8 by floating E-Tender Documents by the East
Coast Railway through Opposite Party No.6, inviting bid
from the eligible Bidders for the work "Modification of
Power line crossings (33 KV/ 11 KV/ LT) between Sonepur
to Boudh Railway Station in connection with new line
between Khurda Road-Bolangir Project". In response to
such E-Tender Notice, nine Bidders, including the
Petitioner and Opposite Party No.9, participated in the Bid.
Opposite Party No.9, being L6, his bid has been accepted,
though the Petitioner was L4, its offer was treated as non-
compliant and therefore bypassed. The reason for non-
acceptance of the offer submitted by the Petitioner being
L4 is well justified, as has been revealed from the
documents placed on record by the parties.
// 18 //
8. For a just and proper adjudication of the case, it
is profitable to mention, Annexure-I deals with Tender
Form (Second Sheet), wherein Clause-1 deals with
Instruction to Tenderers and Conditions of Tender,
whereas Clause-2 deals with Drawings for the Work.
Clause-3 and Clause-4.2 read as follows:-
"3. The Tenderer (s) shall quote his/their rates
as a percentage above or below the Schedule of Rates
of East Coast Railway as applicable to Engineer
Department (Construction) except where he/they are
required to quote item rates and must tender for all
the items shown in the Schedule of approximate
quantities attached. The quantities shown in the
attached Schedule are given as a guide and are
approximate only and are subject to variation
according to the needs of the Railway. The Railway
does no guarantee work under each item of the
Schedule. The tenderer(s) shall quote rates/rebates
only at specified place in Tender Form supplied by
Railway. Any revision of rates/rebates submitted
(quoted) through a separate letter whether enclosed
with the bid (Tender Form) or submitted separately or
mentioned elsewhere in the document other than
specified place shall be summarily ignored and
will not be considered.
3.1 In addition to check list given in E-Tender
Document under 'Compliance' the tenderer should
check once more on important items as under:
(i) Whether the tender offer is accompanied by
Power of Attorney and it is accepted by Power of
Attorney holder.
(ii) Whether the details submitted in required
format duly signed by tenderer and Chartered
Accountant as in Annexure-C, G & GI.
// 19 //
(iii) Whether all other mandatory documents uploaded
without which tender offer is to be summarily rejected
or is liable to be rejected.
xxx xxx xxx
4.2 While submitting offers the tenderer(s)
generally commit mistakes in submitting the
mandatory documents like Certificates regarding
contracting experiences, Audited Balance Sheet duly
certified by the Chartered Accountant, Certificate in
respect to true and factually of documents,
information in connection with evaluation of bid
capacity, Power of Attorney, submission of tenders by
authorized signatory , JV submitting his/their offer
and accordingly upload all the mandatory documents
and other relevant documents as per the formats
annexed in the tenderer document.
The tender shall be finalized based on submitted
documents & no post tender correspondence
shall be entertained. However, if any
clarification is required, the Railway at its
discretion may sought such clarification from
the Tenderers.
The Railway's request for clarification and the
response of the contractor shall be in writing.
No change in substance of the Bid shall be
sought, offered or permitted except required
clarification needed by Railway during
evaluation. If the Bidder does not provide
clarification of its Bid by the date and time set
in the Railway's request for clarification then
his /their offer(s) shall be dealt based on
available information with Railways
interpretation only."
8.1 Clasue-10 deals with Eligibility Criteria and
Clause-10.1 deals with Technical Eligibility Criteria.
Clause-10.2 deals with Financial Eligibility Criteria,
// 20 //
Clause-10.3 deals with Bid Capacity. Clause-11, which
deals with Tender Credentials, reads as follows:-
"11. Tenderer Credentials:-
Documents testifying tenderer previous experience
and financial status should be produced along with
the tender.
Tenderer(s) who is /are not borne on the approved list
of the Contractors of East Coast Railway shall submit
along with his /their tender:
(i) Certificates and testimonials regarding
contracting experience for the type of job for
which tender is invited with list of works
carried out in the past.
(ii) Certificates which may be an attested
Certificate from the client, Audited Balance
Sheet duly certified by the Chartered
Accountant etc regarding contractual payments
received in the past.
(iii) The list of personnel/organization on hand and
proposed to be engaged for the tendered work.
Similarly list of Plant & Machinery available on
hand proposed to be inducted and hired for the
tendered work.
(iv) A copy of certificate stating that they are not
liable to be disqualified and all their
statements/documents submitted along with
bid are true and factual. Standard format of the
certificate to be submitted by the bidder is
enclosed as Annexure-III, Chapter-2. Non
submission of a copy of certificate by the bidder
shall result in summarily rejection of
his/their bid. It shall be mandatorily incumbent
upon the tenderer to identify state and submit
the supporting documents duly self-attested by
which they/he are/is qualifying the Qualifying
Criteria mentioned in the Tender Document.
// 21 //
(v) The Railway reserves the right to verify all
statements, information and documents
submitted by the bidder in his tender offer,
and the bidder shall, when so required by the
Railway, make available all such information,
evidence and documents as may be necessary
for such verification. Any such verification or
lack of such verification, by the railway shall
not be relieve the bidder of its obligation or
liabilities hereunder nor will it affect any rights
of the Railway there under.
(vi) (a) In case of any information submitted
by tenderer is found to be false forged or
incorrect at any time during process for
evaluation of tenderers, it shall be lead to
forfeiture of the tender Earnest Money Deposit
besides banning for a period of up to five
years.
(vii) (b) In case of any information submitted
by tenderer is found to be false forged or
incorrect after the award of contract, the
contract shall be terminated. Earnest Money
Deposit (EMD), Performance Guarantee and
Security Deposit available with the railway
shall be forfeited. In addition, other dues of the
contractor, if any, under this contract shall be
forfeited and agency shall be banned for doing
business for a period of up to five years."
8.2 Clause-12 stipulates that "Non-compliance with
any of the Conditions set forth therein above is liable to
result in the tender being rejected".
// 22 //
8.3 Clause-14 deals with documents to be
submitted along with Tender. Clause-14 (ii) reads as
follows:-
"14. Documents to be submitted along with tender:-
(i) xxx xxx xxx
(ii) Following documents shall be submitted by the
tenderer:
a) Sole Proprietorship Firm:
i. An undertaking that he is not blacklisted or
debarred by Railways or any other
Ministry/Department of Govt. of India from
participation in tender on the date of opening of
bids, either in individual capacity or as a
member of the partnership firm or JV in which
he was /is a partner/member. Concealment
/wrong information in regard to above shall
make the contract liable for determination
under Clause 62 of the General Condition of
Contracts.
ii. All other documents in terms of explanatory
notes in clause 10 above."
9. In view of the Railway Board letter dated
13.08.2022, the Tender with advertised value of less than
Rs.10 Crore, is to be invited as a "Single Packet Tender"
and with value of more than Rs.10 Crore is to be invited as
"Two Packet Tender". Admittedly, the advertised value of
the instant Tender, being Rs.5 Crore 67 Lakhs, it is a
// 23 //
Single Packet Tender. There is no separate Technical and
Financial Bid to be opened. Rather, both Technical and
Financial Offer are to be opened simultaneously. The
tabulation has to be made as per offered rate of the
Tenderers and marked as L1, L2, L3 etc., as per offered
rate in increasing order. Accordingly, the Tender
Committee has to scrutinize and verify the submitted
documents/ credentials to check the fulfillment of
technical eligibility criteria and other mandatory criteria of
the offers, and financial offers of technically qualified
bidders have to be scrutinized/adjudged for the rate
reasonability of offered rate.
10. In the Indian Railways E-Procurement System,
which has been annexed as Annexure-B/1, while
evaluating the bids submitted by the Bidders, it has been
specifically mentioned in Clause-1, under NIT Header, that
Bidding Type is Normal Tender, Tender Type-Open and
Bidding System-Single Packet System. The date and time
of uploading Tender was mentioned as 19/05/2021 16.55.
// 24 //
Under Clause-5, the heading is "Compliance" and under
that heading 'Check List' was provided and then provided
'Commercial-Compliance'. At Sl. Nos.3 and 5 of the
'Commercial-Compliance', it has been provided as follows:-
Sl. No.
3 Please submit details of
the constitution of the
Firm (Proprietary Firm or
Partnership Firm)/HUF/
Company Registered
under Companies Act-
2013/ Limited Liability
Partnership Firm
registered under LLP Act- Yes No Allowed
2008/Joint venture (Mandat
(JV)/Registered Society & ory)
Registered Trust etc along
with duly filled up
Annexure-A, Chapter -7 of
the Annexed Document
and also enclose the
supporting documents
such as copy of
Partnership Deed, Power
of Attorney, PAN Card,
Memorandum of Articles
of Association,
Authorisation, Certificate
of Incorporation,
Certificate of Registration
Deem of Formation,
Memorandum of
Understanding, JV
Agreement.(For details
please refer Clause
14,15&17 of Annexure-I &
Chapter -2 of Annexed
Document). In reference to
// 25 //
Clause 14, Chapter-2 of
Annexed Document
submit an under taking
regarding not blacklisted
or debarred by Railways
or any other
Ministry/Department of
Govt. of India from
participation in tender on
the date of opening of
bids. Concealment/wrong
information in regard to
above shall make the
contract liable for
determination under
Clause 62 of the General
Conditions of Contract.
5 Please submit the
certificates regarding
contractual payments
received along with duly
filled up Annexure-C,
Chapter -7 of Annexed
Document, to this effect
which may be an attested
Certificate from the Yes No Allowed
concerned (Mandat
department/client or ory)
Audited Balance Sheet
duly certified by the
Chartered Accountant/
Certificate from Chartered
Accountant duly
supported by Audited
Balance Sheet. Client
Certificate from other than
Govt. Organisation should
be duly supported by
Form 16A/26AS
generated through
TRACES of Income Tax
Department of India. Non-
compliance with this
condition liable to result in
the tender being rejected.
// 26 //
11. Under Clause-3.1 of Annexure-I, i.e., Tender
Form (Second Sheet), it has been provided that in addition
to Check List given in E-Tender Document under
'Compliance', the Tenderer should check once more on
important items, namely, whether all other mandatory
documents uploaded without which Tender offer is to be
summarily rejected or is liable to be rejected. Therefore,
Clause-14 (ii) (a) requires the Sole Proprietorship Firm to
provide an undertaking that it is not blacklisted or
debarred by Railways or any other Ministry/Department of
Govt. of India from participation in Tender on the date of
opening of the bid, either in individual capacity or as a
Member of Partnership Firm or JV in which he was/is a
Partner/Member. Concealment/ wrong information in
regard to above shall make the contract liable for
determination under Clause-62 of the General Conditions
of Contract. Further, Clauses-4.1 and 4.2 require the
Tenderer to submit the documents and, as such, the
Tenderer should go through the documents very carefully
before submitting his or their offer and accordingly, upload
// 27 //
all the mandatory documents and other relevant
documents as per the formats annexed to the Tender
Document. It is also specifically mentioned that the Tender
shall be finalized based on submitted document and no
post Tender correspondence shall be entertained. However,
if any clarification is required, the Railway at its discretion
may sought such clarification from the Tenderers.
Therefore, the submission of undertaking being
mandatory, for non-compliance thereof, the offer
submitted by the Petitioner is considered as non-compliant
and bypassed.
12. As required under Clause-11 (ii) of Annexure-I,
the documents ought to have been duly countersigned by
the Chartered Accountant. However, though the document
has been signed by the Tenderer, but the same has not
been verified and counter signed by the Chartered
Accountant along with seal, which is made available on
record under Annexure-F/1, at Page-131 of the brief.
Thereby, Clause-11 (ii) of the Tender Document has not
// 28 //
been complied with. Much reliance has been placed on the
decision of the Tender Committee, where under Clause-6.4
at Page-141, the case of the Petitioner has been
considered. Under Sl. Nos. 4 and 6, it has been stated as
follows:-
"6.4. M/s. Jyotin Kumar Sahoo.
4. Please submitted details of Proprietorship form at
the constitution of the Firm F/1074,GST
(Proprietary Firm or Registration
Partnership Certificate at F/ 1070-
Firm)/HUF/Company 1072
Registered under Company
PAN Card at F/1133
Act-2013/Limited Liability
Partnership Firm registered
under LLP Act-2008/Joint
Venture (JV)/Registered
Society/Registered Trust
etc. vide Annexure-
A,Chapter-7 of the Annexed
Document and also enclose
the supporting documents
such as copy of Partnership
Deed, Power of Attorney,
PAN Card , Memorandum of
Article/Articles of
Association Authorization,
Certification of Undertaking not
Incorporation, Certificate of submitting regarding
Registration, Deem of not blacklisting/not
Formation, Memorandum of debarring of the firm
Understanding, JV by Railways or any
Agreement, Undertaking other Ministry
// 29 //
regarding not blacklisting /Department of Govt.
/not debarring of the firm of India/any state
by Railways or any other Govt. on the date of
Ministry/Department of opening etc. as
Govt. of India / any State applicable as per the
Govt. on the date of opening tender conditions.
etc. as applicable as per the This is one of the
tender conditions. mandatory condition
which the tenderer
failed to submit.
6 Please submit the certificate Submitting Annexure-
as per Annexure-C, Chapter C without certified by
-7 of Annexed Document CA, at
which may be an attested F/1130,regarding
Certificate from the client, contractual payments
Audited Balance Sheet duly received from 2018-
certified by the Chartered 19,2019-20,2020-21
Accountant etc. regarding and current financial
contractual payment year. Also submitted
received. Non-compliance Audited balance sheet
with this condition liable to at F/1100-1108.
result in the tender being
rejected.
13. Though at Page-143 of the brief, it has been
mentioned that the Petitioner has completed one similar
work each costing more than the amount equal to 60% of
advertised value of the Tender work under Sl. No.1 and
hence, fulfils the technical eligibility criteria and also fulfils
the financial eligibility criteria laid down for the instant
// 30 //
Tender, but the Technical Committee has come to a finding
to the following effect.
"In view of above discussion T.C has noted that
the tenderer has failed to submit the undertaking
regarding not blacklisting/not debarring of the firm by
Railways or any other Ministry/Department of Govt.
of India /any State Govt. on the date of opening etc.
as applicable as per the tender conditions. This is one
of the mandatory conditions. Hence the offer is
considered as invalid due to non compliance of
mandatory documents & the offer is passed over."
14. Therefore, the Technical Committee, on
analyzing the documents filed by the Petitioner, has come
to a finding that though the Petitioner qualified in
Technical as well as Financial Bid, but the offer made by
him is non-compliant and, therefore, he has been
bypassed, as mentioned above. Not only in the case of the
Petitioner such a disqualification has been recorded, but in
case of M/s Sarala Engineering Works, which is one of the
Bidders, its Tender has also been rejected on the similar
ground, though it fulfills the technical and financial
eligibility criteria laid down in the instant Tender, with the
following observation:-
// 31 //
"In view of the above, T.C. has noted that the
tenderer has not submitted undertaking regarding
not/blacklisting/not debarring of the firm by
Railways or any other Ministry / Department of Govt.
of India/ any state Govt. on the date of opening etc.
as applicable as per the tender condition. This is one
of the mandatory conditions which the tenderer failed
to submit. Thus the tenderer is found ineligible. Hence
the offer is passed over."
15. In view of the aforesaid reasons, if the Bid of the
Petitioner has been rejected by the Tender Committee on
the ground of non-compliance of the Tender conditions, by
thoroughly analyzing and scrutinizing each of the
conditions mentioned in the Tender Document, as
discussed above, by holding that the offer made by the
Petitioner is non-compliant and, therefore, bypassed.
Hence, it cannot be held that the Authorities have acted
arbitrarily, unreasonably and contrary to the provisions of
law.
16. The Petitioner heavily relied upon the legal
maxim "expressio unius est exclusion alterius" which
means to express one is to exclude others. This Principle
has been thoroughly misconstrued and, as such, the
// 32 //
Petitioner cannot take shelter of such expression when it
could not satisfy the requirement of the Tender Document
itself.
17. Much reliance has been placed in the case of
Hukam Chand Shyam Lal (supra), wherein the apex
Court, relying upon the judgment of Taylor v Taylor,
(1875) LR I Ch D 426, which was subsequently followed by
Lord Roche in Nazir Ahmad v. King Emperor, AIR 1936
PC 253(2), observed that where power is required to be
exercised by a certain Authority in a certain way, it should
be exercised in that manner or not at all, and all other
modes of performance are necessarily forbidden. This
Principal has no assistance to the Petitioner. Rather, it
supports the case of the Opposite Parties, as has been
discussed above.
18. In Harinarayan G. Bajaj (supra), the apex
Court discussed about the Principle that Rule gives the
Defaulters' Committee limited powers to call in and realize
(i) security deposits (ii) margin money (iii) other amounts
// 33 //
lying to the credit of the defaulting member and (vi)
securities deposited by the Defaulting Member. The
Defaulting Committee has also the right to recover all
moneys, securities and other assets, due, payable or
deliverable to the defaulters by any other Trading Member.
By expressly providing for these powers in the Committee,
it would follow that other powers are excluded on the
Principle "expressio unius est exclusio alterius". As has
been already stated earlier, this Principal has no
application to the present case.
19. Similarly, the decision in the case of Krushna
Chandra Sahoo (supra), as relied upon by the Petitioner,
has no application to the present case.
20. Much reliance has been placed by the learned
Counsel for the Petitioner on Poddar Steel Corporation
(supra), stating that Clause-14 of the Tender Document,
being merely an ancillary/subsidiary condition with the
main object sought to be achieved under the Tender
document, non-compliance of the requirement made
// 34 //
thereunder cannot stand on the way of the Petitioner to be
awarded with the Work. This contention cannot be taken
into consideration, as Clause-14 itself is a mandatory
requirement, in terms of Clasues-3.1 and 4.2 of the Tender
Document. Therefore, it cannot be said that these are the
essential conditions, which can be given less weighatage.
Thereby, the reliance placed on the judgment mentioned
supra, wherein it has been held that the requirement in a
Tender Notice can be classified into two categories, such
as those which lay down the essential conditions of
eligibility, and the other which are merely ancillary or
subsidiary with the main object to be achieved by the
condition, and that in the first case the Authority issuing
the Tender may be required to enforce them rigidly and in
the other case it must be open to the Authority to deviate
from and not to insist upon the strict literal compliance of
the condition in appropriate case, cannot have any
application to the present Petitioner.
// 35 //
21. In M/s. Agmatel India Pvt. Ltd. (supra), the
apex Court at Paragraphs 16 and 17 of the judgment
observed as follows:-
"16. The scope of judicial review in contractual
matters, and particularly in relation to the process of
interpretation of tender document, has been the
subject matter of discussion in various decisions of
this Court. We need not multiply the authorities on the
subject, as suffice it would be refer to the 3-Judge
Bench decision of this Court in Galaxy Transport
Agency (supra) wherein, among others, the said
decision in Afcons Infrastructure Limited (supra) has
also been considered; and this Court has disapproved
the interference by the High Court in the
interpretation by the tender inviting authority of the
eligibility term relating to the category of vehicles
required to be held by the bidders, in the tender
floated for supply of vehicles for the carriage of troops
and equipment. This Court referred to various
decisions on the subject and stated the legal
principles as follows: -
"14. In a series of judgments, this Court has held
that the authority that authors the tender
document is the best person to understand and
appreciate its requirements, and thus, its
interpretation should not be second-guessed by a
court in judicial review proceedings. In Afcons
Infrastructure Ltd. v. Nagpur Metro Rail
Corporation Ltd., (2016) 16 SCC 818, this Court
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
// 36 //
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." (page 825)
(emphasis supplied)
15. In the judgment in Bharat Coking Coal Ltd. v.
AMR Dev Prabha 2020 SCC OnLine SC 335, under
the heading "Deference to authority's
interpretation", this Court stated:
"51. Lastly, we deem it necessary to deal
with another fundamental problem. It is
obvious that Respondent No. 1 seeks to only
enforce terms of the NIT. Inherent in such
exercise is interpretation of contractual terms.
However, it must be noted that judicial
interpretation of contracts in the sphere of
commerce stands on a distinct footing than
while interpreting statutes.
52. In the present facts, it is clear that BCCL
and India have laid recourse to Clauses of the
NIT, whether it be to justify condonation of
delay of Respondent No. 6 in submitting
performance bank guarantees or their
decision to resume auction on grounds of
technical failure. BCCL having authored these
documents, is better placed to appreciate their
requirements and interpret them. (Afcons
Infrastructure Ltd. v. Nagpur Metro Rail
Corporation Ltd., (2016) 16 SCC 818)
53. The High Court ought to have deferred to
this understanding, unless it was patently
perverse or mala fide. Given how BCCL's
interpretation of these clauses was plausible
and not absurd, solely differences in opinion
of contractual interpretation ought not to have
been grounds for the High Court to come to a
// 37 //
finding that the appellant committed
illegality." (emphasis supplied)
16. Further, in the recent judgment in Silppi
Constructions Contractors v. Union of India, 2019
SCC OnLine SC 1133, this Court held as follows:
"20. The essence of the law laid down in the
judgments referred to above is the exercise of
restraint and caution; the need for
overwhelming public interest to justify judicial
intervention in matters of contract involving
the state instrumentalities; the courts should
give way to the opinion of the experts unless
the decision is totally arbitrary or
unreasonable; the court does not sit like a
court of appeal over the appropriate authority;
the court must realise that the authority
floating the tender is the best judge of its
requirements and, therefore, the court's
interference should be minimal. The authority
which floats the contract or tender, and has
authored the tender documents is the best
judge as to how the documents have to be
interpreted. If two interpretations are possible
then the interpretation of the author must be
accepted. The courts will only interfere to
prevent arbitrariness, irrationality, bias, mala
fides or perversity. With this approach in
mind we shall deal with the present case."
(emphasis supplied)
17. In accordance with these judgments and noting
that the interpretation of the tendering authority in
this case cannot be said to be a perverse one, the
Division Bench ought not to have interfered with it by
giving its own interpretation and not giving proper
credence to the word "both" appearing in Condition
No. 31 of the N.I.T. For this reason, the Division
Bench's conclusion that JK Roadways was wrongly
declared to be ineligible, is set aside."
// 38 //
22. In N.G. Projects Limited (supra), the apex
Court at Paragraph-23 of the judgment observed as
follows:-
"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 present- day 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 twice, firstly by paying escalation costs
and secondly, by being deprived of the infrastructure
for which the present-day Governments are expected
to work."
23. In RKD-CMRGS Joint Venture (supra), this
Court at Paragraph-30 of the judgment held as follows:-
"30. In the fact situation obtaining in the case,
decision of the opposite party in respect of the
technical bid of the petitioner as non- responsive can
// 39 //
neither be said to be mala fide or intended to
favour someone. It cannot be termed to be so
arbitrary or irrational which no responsible body of
person acting under law could have arrived at. It is
settled proposition of law that when power is given to
do a certain thing in a certain way, the thing must be
done in that way or not at all. If as per conditions of
the NIT, bid security in the case of tender submitted
by JV was required to be given wholly either by the
JV or the lead partner, the bidder ought to submit bid
accordingly and not in any other manner. It is trite
that words used in the tender documents as
conditions for acceptability of technical bid have to be
construed in the way the Employer has used them
while formulating such terms and conditions. Whether
a particular condition is essential or not is a decision
to be taken by the Employer. The tender inviting
authorities have to be given free hands in the matter
of interpretation of conditions of the tender. No words
in the tender documents can be treated surplusage or
superfluous or redundant. Their decision has to be
respected by the court unless it is shown to be ex-
facie arbitrary, outrageous, and highly unreasonable.
If non-submission of a compliant bid security as per
mandatory conditions of the terms of the NIT, results
in tender of the bidder being rendered non-
responsive, the court cannot substitute the opinion of
the Employer by its own unless interpretation of such
condition by the tender inviting authority suffers from
mala fides or perversity."
24. In Montecarlo (supra), the apex Court at
Paragraphs- 34, 35 and 48 of the judgment observed as
follows:-
"34. Even otherwise it is required to be noted that
once a conscious decision was taken by the JICC and
JICA, who can be said to be the author of the terms
and conditions of the tender document, taking a view
// 40 //
and stand that the Bid submitted by the original writ
petitioner suffers from material deviation and the said
decision was taken after considering the relevant
clauses of the ITB, thereafter it was not open for the
High Court to interfere with such a conscious decision
in exercise of powers under Article 226 of the
Constitution of India and take a view that the Bid
submitted by the original writ petitioner was in
substantial compliance.
35. As observed hereinabove, there are as such no
allegations of mala fides and/or favouritism at all.
Therefore, the High Court has erred in holding that
the Bid submitted by the original writ petitioner was
in substantial compliance. Whether the Bid submitted
by a Bidder suffers from any material deviation
and/or any substantial deviation should be left to the
author of the Bid document and normally, the High
Courts, in exercise of the powers under Article 226 of
the Constitution of India, should not interfere with the
same unless such a decision is found to be mala fide
and/or there are allegations of favouritism and/or
such a decision is arbitrary.
xxx xxx xxx
48. Even while entertaining the writ petition and/or
granting the stay which ultimately may delay the
execution of the Mega projects, it must be
remembered that it may seriously impede the
execution of the projects of public importance and
disables the State and/or its agencies/
instrumentalities from discharging the constitutional
and legal obligation towards the citizens. Therefore,
the High Courts should be extremely careful and
circumspect in exercise of its discretion while
entertaining such petitions and/or while granting
stay in such matters. Even in a case where the High
Court is of the prima facie opinion that the decision is
as such perverse and/or arbitrary and/or suffers
from mala fides and/or favouritism, while
entertaining such writ petition and/or pass any
appropriate interim order, High Court may put to the
writ petitioner's notice that in case the petitioner loses
and there is a delay in execution of the project due to
// 41 //
such proceedings initiated by him/it, he/they may be
saddled with the damages caused for delay in
execution of such projects, which may be due to such
frivolous litigations initiated by him/it. With these
words of caution and advise, we rest the matter there
and leave it to the wisdom of the concerned Court(s),
which ultimately may look to the larger public interest
and the national interest involved."
25. In Central Coalfields Ltd. (supra), the apex
Court at Paragraphs-43, 48, 49 and 54 of the judgment
observed as follows:-
"43. Continuing in the vein of accepting the inherent
authority of an employer to deviate from the terms
and conditions of an NIT, and re-introducing the
privilege-of-participation principle and the level
playing field concept, this Court laid emphasis on the
decision making process, particularly in respect of a
commercial contract. One of the more significant cases
on the subject is the three-judge decision in Tata
Cellular v. Union of India6 which gave importance to
the lawfulness of a decision and not its soundness. If
an administrative decision, such as a (1994) 6 SCC
651 deviation in the terms of the NIT is not arbitrary,
irrational, unreasonable, mala fide or biased, the
Courts will not judicially review the decision taken.
Similarly, the Courts will not countenance interference
with the decision at the behest of an unsuccessful
bidder in respect of a technical or procedural
violation. This was quite clearly stated by this Court
(following Tata Cellular) in Jagdish Mandal v. State of
Orissa7 in the following words:
"22. Judicial review of administrative action is
intended to prevent arbitrariness, irrationality,
unreasonableness, bias and mala fides. Its
purpose is to check whether choice or decision is
made "lawfully" and not to check whether choice
// 42 //
or decision is "sound". When the power of judicial
review is invoked in matters relating to tenders or
award of contracts, certain special features should
be borne in mind. A contract is a commercial
transaction. Evaluating tenders and awarding
contracts are essentially commercial functions.
Principles of equity and natural justice stay at a
distance. If the decision relating to award of
contract is bona fide and is in public interest,
courts will not, in exercise of power of judicial
review, interfere even if a procedural aberration or
error in assessment or prejudice to a tenderer, is
made out. The power of judicial review will not be
permitted to be invoked to protect private interest
at the cost of public interest, or to decide
contractual disputes. The tenderer or contractor
with a grievance can always seek damages in a
civil court. Attempts by unsuccessful tenderers
with imaginary grievances, wounded pride and
business rivalry, to make mountains out of
molehills of some technical/procedural violation or
some prejudice to self, and persuade courts to
interfere by exercising power of judicial review,
should be resisted. Such interferences, either
interim or final, may hold up public works for
years, or delay relief and (2007) 14 SCC
517 succour to thousands and millions and may
increase the project cost manifold."
This Court then laid down the questions that ought to
be asked in such a situation. It was said in Jagdish
Mandal v. State of Orissa, (2007) 14 SCC 517:-
"22......... Therefore, a court before interfering in
tender or contractual matters in exercise of power
of judicial review, should pose to itself the
following questions:
(i) Whether the process adopted or decision
made by the authority is mala fide or
intended to favour someone;
OR
Whether the process adopted or decision made is
so arbitrary and irrational that the court can say:
"the decision is such that no responsible authority
// 43 //
acting reasonably and in accordance with relevant
law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be
no interference under Article 226."
xxx xxx xxx
48. Therefore, whether a term of the NIT is essential
or not is a decision taken by the employer which
should be respected. Even if the term is essential, the
employer has the inherent authority to deviate from it
provided the deviation is made applicable to all
bidders and potential bidders as held in Ramana
Dayaram Shetty. However, if the term is held by the
employer to be ancillary or subsidiary, even that
decision should be respected. The lawfulness of that
decision can be questioned on very limited grounds,
as mentioned in the various decisions discussed
above, but the soundness of the decision cannot be
questioned, otherwise this Court would be taking over
the function of the tender issuing authority, which it
cannot.
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.
xxx xxx xxx
// 44 //
54. In this context, and in the present times, it is
important to note that the World Bank has ranked
India extremely low in matters relating to enforcement
of contracts and ease of doing business. Out of 189
countries worldwide, India is ranked 178 in the
matter of enforcement of contracts and 130 in the
matter of ease of doing business11. One of the
possible reasons for this extremely low ranking given
to our country is the failure of all parties concerned in
strictly adhering to the terms of documents such as
the NIT and the GTC. In so far as the present case is
concerned, the NIT was floated on 5th August, 2015
and one year later, we are still struggling with the
issue of acceptance of a bank guarantee for a contract
of about Rs. 2000 crores - certainly not a small sum."
26. In view of the fact and law, as discussed above,
this Court is of the considered view that the
communication made to the Petitioner vide Annexure-4,
dated 17.08.2021, holding that "the Petitioner has not
submitted undertaking regarding not blacklisted or
debarred by Railways or any other Ministry/Department of
Govt. of India from participation in Tender on the date of
opening of the bids, which is mandatory document to be
submitted in the Tender offer and, as such, the offer has
been considered as non-complaint and bypassed", is well
justified. Thus, this Court is not inclined to interfere with
the same.
// 45 //
27. In the result, the Writ Petition merits no
consideration and the same stands dismissed. There shall
be no order as to costs.
..............................
DR. B.R. SARANGI,
JUDGE
S.K. MISHRA, J. I agree.
..............................
S. K. MISHRA,
JUDGE
Orissa High Court, Cuttack
The 17th August, 2022, Arun/GDS
