Patna High Court
Jmc Projects (India) Limited vs State Of Bihar on 11 August, 2022
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.208 of 2020
======================================================
JMC Projects (India) Limited having its Reg. Office at A- 104, Shapath-4,
Opp. Karnavati Club, S.G. Road, Ahmedabad, Gujarat- 380015, through its
Authorized Signatory Mr. Hem Nath Mishra.
... ... Petitioner
Versus
1. State of Bihar through the Secretary, Health Department, 1st Floor, Vikas
Bhawan, Bailey Road, Patna- 800015.
2. Bihar Medical Services and Infrastructure Corporation Limited through the
Chief General Manager, 4th Floor, BSBCCL Building, Hospital Road,
Shastri Nagar, Patna- 800023 through Tendering Authority C.G.M.
(Projects).
3. Shapoorji Pallonji And Company Private Limited, A Company registered
under the Companies Act, 1956 having its Registered office at S.P. Centre,
41/44, Minoo Desai Marg, Colaba, Mumbai-400005, Maharashtra, India,
having its branch office at P.S. Srijan Corporate Park, Tower 1-7th Floor,
Plot G-2, Block-GP, Sector-V, Salt Lake-Kolkata-700091 and local office at
202, 2nd Floor, Block-C, Shanti Lok Apartment, Mazer Gali, Piler No. 75,
P.S. Shanti Nagar, Bihar-801118 through its Mananger, Business
Development Utpal Raj S/o Raj Bindu Prasad age about 29 years, Male
resident of Manoj Kumar Nata Tola P.S. Kazi Mohammadpur, Muzaffarpur.
... ... Respondents
======================================================
with
Civil Writ Jurisdiction Case No. 211 of 2020
======================================================
JMC Projects (India) Limited having its Reg. Office at A-104, Shapath-4,
Opp. Karnavati Club, S.G. Road, Ahmedabad, Gujarat- 380015, through its
Authorized Signatory Mr. Hem Nath Mishra.
... ... Petitioner
Versus
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
1. State of Bihar through the Secretary, Health Department, 1st Floor, Vikas
Bhawan, Bailey Road, Patna- 800015.
2. Bihar Medical Services and Infrastructure Corporation Limited through the
Chief General Manager, 4th Floor, BSBCCL Building, Hospital Road,
Shastri Nagar, Patna- 800023, through Tendering Authority C.G.M.
(Projects).
3. Larsen & Turbo (L&T) Limited, L&T Construction, having its Registered
Office at Mount Poonamllee Road, Manapakkam, Chennai through its
Authorized Representative & Manager (Business Development) namely, Mr.
Rajesh Kumar, aged about 31 years (Male), son of Ramesh Kumar, resident
of near Purani Maszid, Ishopur, P.S.-Phulwari, District-Patna.
... ... Respondents
======================================================
Appearance :
(In Civil Writ Jurisdiction Case No. 208 of 2020)
For the Petitioner/s : Mr. Vikash Mishra, Advocate
Mr. Anjani Kumar Jha, Advocate
For the Respondent No.2: Mr. Lalit Kishore, Advocate General
Mr. Vikash Kumar, (SC-11)
For the Respondent No.3: Mr. Mrigank Mouli, Sr. Advocate
Mr. Venkatesh Kirti , Advocate
(In Civil Writ Jurisdiction Case No. 211 of 2020)
For the Petitioner/s : Mr. Vikash Mishra, Advocate
Mr. Anjani Kumar Jha, Advocate
For the Respondent No.2: Mr. Lalit Kishore, Advocate General
Mr. Vikash Kumar, (SC-11)
For the Respondent No.3: Mr. Chitranjan Sinha, Sr. Advocate
Mr. Aditya Shankar Prasad, Advocate
Mr. Sanchay Shrivastava , Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
CAV JUDGMENT
Date : 11-08-2022
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Regard being had to the commonality of the
controversy in both the aforesaid writ petitions, it
was thought apposite to hear them analogously
and accordingly, they were heard together with the
consent of the parties and are being disposed of by
the present singular order.
2. The aforesaid two writ petitions have been
filed for declaring that the petitioner qualifies the
criteria laid down in Clause 4.5(A)(b) and 4.5(D) of
the Instruction to Bidders contained in the Notice
Inviting Tender dated 10.6.2019 and consequently,
hold that the technical bid submitted by the
petitioner qua the aforesaid two cases is
responsive in terms of Clause 25.1 of the
Instruction to Bidders contained in the NIT dated
10.6.2019, floated by the Respondent No. 2 i.e. the
Bihar Medical Services and Infrastructure
Corporation Ltd. (hereinafter referred to as the
"BMSICL"). The petitioner of the aforesaid two
cases has further prayed for quashing the
minutes / proceedings of the meeting of the
Technical Tender Committee of the Respondent No.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
2 dated 03.01.2020 whereby and whereunder the
technical bid of the petitioner has been rejected.
Consequently, it has been prayed that the
Respondent No. 2 be directed to consider the
financial bid submitted by the petitioner for
construction of Government Medical College and
Hospital at Begusarai and Buxar, respectively.
Facts of the Case
3. The brief facts of the case, according to the
petitioner, are that a Notice Inviting Tender bearing
NIT No. BNSICL/Infra/22/219 dated 10.06.2019 was
issued by the Respondent No. 2, inviting tender
through the e-procurement process from firms /
contractors of repute, specialized in civil works, for
construction of Medical Colleges and Hospitals with
earthquake resistant structure in the districts of
Vaishali, Begusarai, Sitamarhi, Jamui, Buxar and
Madhubani in the State of Bihar. The last date for
submission of the bid mentioned in the NIT was
29.07.2019 and the date / time and place for
opening the tender was fixed as 31.7.2019 at 3:30
pm. at the office of the Respondent No. 2,
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
however, the same was extended from time to
time vide various corrigendum, which is not in
dispute. The petitioner had participated in the NIT
and submitted its technical bid on 18.11.2019 for
construction of Government Medical College and
Hospital Campus at Begusarai, as far as the first
case is concerned and for construction of
Government Medical College and Hospital Campus
in the District of Buxar, as far as the second case is
concerned. The petitioner had also furnished the
earnest money through bank guarantees dated
05.11.2019. It is the case of the petitioner of both
the aforesaid cases that although the petitioner
qualifies on all counts in terms of the Instruction to
Bidders and had therefore participated in the
bidding process, however, the Technical Tender
Committee, in its meeting held on 13.12.2019, has
held the bid of the petitioner to be non-responsive
for both the tenders pertaining to the construction
of Government Medical College and Hospital at
Begusarai and Buxar, by holding that the petitioner
was not qualifying the criteria laid down in Clause
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
4.5(A)(b) of the Instruction to Bidders. Thus, the
Technical Tender Committee in paragraphs no. 2.4
and 5.5 of its minutes of meeting dated
13.12.2019 had recommended for rejection of the
technical bid of the petitioner noting that there is
an apparent dichotomy between two certificates,
dated 27.06.2017 and 31.10.2018, issued by HSCC
(India) Ltd., certifying the work done by the
petitioner pertaining to construction of Hospital /
OPD and other associated works of Kalpana Chawla
Government Medical College at Karnal, Haryana
(hereinafter referred to as the "KCGMC") and
therefore, it is doubtful that the work of KCGMC
project was completed by the petitioner in the
financial year 2016-2017.
4. At this juncture, it would be relevant to
reproduce paragraph no. 2.4 (pertaining to the bid
of the petitioner in connection with construction of
Government Medical College and Hospital Campus,
Begusarai) and paragraph no. 5.5 (pertaining to
the bid of the petitioner in connection with
construction of Government Medical College and
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Hospital Campus, Buxar) of the minutes of meeting
dated 13.12.2019 of the Technical Tender
Committee of the Respondent No. 2 herein below:-
"2.4. JMC Projects India Ltd., A-104, Shapath
4, Opp. Karnavati Club, S. G. Highway,
Ahmedabad, 380015:-
I. mDr fufonknkrk }kjk viyksM fd, x, leku izd`fr ds
dk;Z vuqHko izek.k i= esa dYiuk pkoyk xoesaV esfMdy
dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks izek.k i=
lefiZr fd;k x;kA nksuska DGM (Civil), HSCC (India) Ltd.,
}kjk dze"k% fnukad [email protected]@2017 ,oa [email protected]@2018 dks
gLrk{kfjr gSA fnukad [email protected]@2017 dks fuxZr izek.k i= esa
mi;qZDr of.kZr dk;Z dks [email protected]@2017 dks substantially
complete vafdr fd;k x;k gS] tcfd fnukad [email protected]@2018
dks fuxZr izek.k i= esa bl dk;Z dks [email protected]@2017 dks
complete crk;k x;k gSA
II. nksuksa vuqHko izek.k i=ksa esa vafdr dk;Z ds ,d gh fnu
vyx&vyx HkkSfrd iw.kZrk fLFkfr n'kkZ;k x;k gS] tks ijLij
fojks/kkHkk"kh gS ,oa blls bl ifj;kstuk dk foRrh; o"kZ
2016&2017 esa iw.kZ gksus ij i;kZIr lansg gS] QyLo:i
fufonknkrk fufonk nLrkost dh dafMdk 4.5(A)(b) esas of.kZr
leku izd`fr ds dk;Z vuqHko dh vgrkZ iwjh ugha djrs gSA
mi;qZDr rF;ksa ds vkyksd es mDr fufonknkrk dh fufonk dks
Non Responsive ,oa rduhdh :i ls vlQy ik;k
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
x;k ,oa foRrh; fufonk ugha [kksyus dh vuq'kalk dh tkrh gSA
5.5 JMC Projects India Ltd., A-104, Shapath 4,
Opp. Karnavati Club, S.G.Highway,
Ahmedabad, 380015:-
mDr fufonknkrk }kjk viyksM fd, x, leku izd`fr ds dk;Z
vuqHko izek.k i= esa dYiuk pkoyk xoesaV esfMdy dkWyst
djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks izek.k i= lefiZr
fd;k x;k gS ,oa nksuska DGM (Civil), HSCC (India)
Ltd., }kjk dze"k% fnukad [email protected]@2017 ,oa [email protected]@2018
dks gLrk{kfjr gSA fnukad [email protected]@2017 dks fuxZr izek.k i=
esa mi;qZDr of.kZr dk;Z dks [email protected]@2017 dks substantially
complete vafdr fd;k x;k gS] tcfd fnukad [email protected]@2018
dks fuxZr izek.k i= esa bl dk;Z dks [email protected]@2017 dks
complete crk;k x;k gSA
nksuksa vuqHko izek.k i=ksa esa vafdr dk;Z ds ,d gh fnu
vyx&vyx HkkSfrd iw.kZrk fLFkfr n'kkZ;k x;k gS] tks ijLij
fojks/kkHkk"kh gS ,oa blls bl ifj;kstuk dk foRrh; o"kZ
2016&2017 esa iw.kZ gksus ij i;kZIr lansg gS] QyLo:i
fufonknkrk fufonk nLrkost dh dafMdk 4.5(A)(b) esas of.kZr
leku izd`fr ds dk;Z vuqHko dh vgrkZ iwjh ugha djrs gSA
mi;qZDr rF;ksa ds vkyksd es mDr fufonknkrk dh fufonk dks
Non Responsive ,oa rduhdh :i ls vlQy ik;k
x;k ,oa foRrh; fufonk ugha [kksyus dh vuq'kalk dh tkrh gSA
5. The petitioner, in response to the aforesaid
observation of the Technical Tender Committee of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
the Respondent No. 2 dated 13.12.2019, had filed
a representation dated 18.12.2019 whereby and
whereunder it was clarified that the work towards
construction of KCGMC was completed by the
petitioner before 20.1.2017 and the expression
"substantially completed" used in the certificate
dated 27.6.2017 was used since this certificate
was issued during the pendency of the Defect
Liability Period even otherwise as per Clause 27 of
the SCC of the HSCC Project, the certificate of final
completion was to be issued only after expiry of
the Defect Liability Period, which expired on
26.6.2018, hence, a certificate of final completion
in terms of Clause 27(b) was issued on 31.10.2018,
certifying that the project was completed on
20.1.2017.
6. It is the further case of the petitioner of the
aforesaid two cases that the representations of the
petitioner dated 18.12.2019 appears to have been
dealt with by the Technical Tender Committee of
the Respondent No. 2 in its meeting held on
03.01.2020 and again, the technical bids of the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
petitioner, pertaining to construction of
Government Medical College and Hospital at
Begusarai and Buxar, were held to be non-
responsive. The finding of the Technical Tender
Committee concerning the petitioner can be found
in paragraph nos. 2.5 (pertaining to the bid of the
petitioner in connection with construction of
Government Medical College and Hospital,
Begusarai) and 5.4 (pertaining to the bid of the
petitioner in connection with construction of
Government Medical College and Hospital, Buxar)
of the minutes of the meeting dated 03.01.2020,
which are reproduced herein below:-
"2.5. JMC Projects India Ltd., A-104, Shapath
4, Opp. Karnavati Club, S. G. Highway,
Ahmedabad, 380015:-
mDr fufonknkrk dh fufonk nLrkost dh leh{kk ds mijakr
rduhdh fufonk lfefr dh cSBd fnukad [email protected]@2019 esa
leku izd`fr ds vLirky fuekZ.k ds vuqHko izek.k i= esa
dfri; =qfV ds vk/kkj ij rduhdh fufonk lfefr }kjk non-
responsive ,oa rduhdh :i ls vlQy ekurs gq, foRrh;
fufonk ugha [kksyus dh vuq'kalk dh xbZ FkhA rduhd fufonk
lfefr dh mi;qZDr vuq'kalk ds fo:} mDr fufonknkrk us
vius i=kad&JMC/I&P/T-16/Buxar/760/19-20] fnukad
[email protected]@2019 }kjk vH;kosnu lefiZr fd;k gS ¼vuqyXud&7½
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
fd ,oa crk;k x;k gSa fd muds }kjk dYiuk pkoyk xoesasZV
esfMdy dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks
izek.k i= lefiZr fd;k x;k gS] ftlesa ,d gh frfFk esa nks
izdkj ds iw.kZrk dk fooj.k vafdr djus dk eq[; dkj.k
Defect liability period gSA fufonknkrk }kjk ;g Hkh crk;k
x;k gS fd "Two certificates is Governed by the
contractual clauses and factually both the certificates are
consistent with each other"
I. fufonknkrk ds mi;qZDr vkifRr ds QyLo:Ik bl fuxe
}kjk bls HSCC (India) Ltd. ls lR;kfir djkus dk fu.kZ;
fy;k x;k ¼vuqyXud&8½ ,oa bl fuxe ds i=kad 5780]
fnukad [email protected]@2019 ds ek/;e ls DGM Civil HSCC (India)
Ltd. dks i= Hkstk x;k gS] ftldk mRrj vHkh rd vizkIr gSA
II. mDr fufonknkrk ds fo+:} bl dk;Z ds vU;
fufonknkrk Shapoorji Pallonji Ltd. us vius i=kad
SP/CAL/3000/2019/426] fnukad [email protected]@2019 }kjk ;g ifjokn
lefiZr fd;k gS fd "JMC Projects do not meet the eligib-
ility criteria 4.5D of NIT having made loss in 4 out of last
7 financial years as below:-
2013-14-Loss of Rs. 1061 Lakhs
2014-15-Loss of Rs. 2429 Lakhs
2015-16-Loss of Rs. 6941 Lakhs
2016-17-Loss of Rs. 4185 Lakhs
III. mDr fufonknkrk ds fo+:} bl dk;Z ds vU;
fufonknkrk Larsen & Toubro us vius i=kad L&T/B&F/
CB&A/Health/BMSICL/2019-007] fnukad [email protected]@2019 }
kjk ;g ifjokn lefiZr fd;k gS fd "Whereas M/s JMC
projects Pvt. Ltd. has incurred losses in the F.Y. 14, 15, 16
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
& F.Y. 17 which is more than 2 financial years in the last 7
financial years. The copy of the audited financial results
submitted by M/s JMC project to BSE/NSE is enclosed for
your reference."
IV. M/s JMC Projects (India) Ltd. ds Audited
Profit and Loss statement ds fo:} izkIr ifjokn ds
vkyksd esa mDr fufonknkrk dh foxr 7 o"kksZ ds Financial state-
ment dh tkap Independent Tax Consultant, Sunil
Shyama and Associates (Chartered Accounts)
ls djkbZ xbZ] ftlesa muds }kjk Ministry of Corporate Af-
fairs (MCA) dh osclkbZV ls MkmuyksM dh xbZ ftldk fooj.k
fuEuor~ gS%&
Types of Financial Year (Rs. In Cr.)
Financial
Particulars
State-
ment 2018-
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Profit after
Tax (As per
18.33 22.97 29.85 43.37 58.25 106.12 142.13
tender
document)
Stand-
alone
Profit after
Tax (As per
30 44 58 106 143
ROC
Record)
From Bid-
Consoli-
der web- 8.5 -10.61 -24.29 -66.33 -41.85 26.85 76.64
dated
site
V. Sunil Shyama and Associates (Chartered Accounts)
us ;g Hkh earO; fn;k gS fd "with respect to analysis of con-
solidated financial statement of JMC Project (India) Ltd.,
Ahmedabad regarding its profitability, earning per share
(EPS) and tax implication should be considered on the ba-
sis of consolidated financial results and not standalone fi-
nancial statement. As per AS-21 (Accounting standard)
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
consolidated financial result includes financial of sub-
sidiary company, associate enterprises and joint venture
of the company. It is mandatory as per MCA and SEBI
guidelines and investment loss under income tax act."
¼vuqyXud&9½
Tax Consultant Sunil Shyama and Associate ls izkIr earO; ds
vkyksd esa ;g ik;k x;k fd JMC Projects foRrh; o"kZ 2013&14 ls
2016&17 rd yxkrkj 4 o"kksZ rd Loss ess jgs gSa] QyLo:Ik os fufonk
nLrkost dh vko';d Qualifying Criteria dafMdk 4-5 D dks iwjk
ugha djrs gSA KkrO; gS fd fufonknkrk }kjk fufonk ds lkFk lefiZr
Profit and Loss account esa Loss ugha fn[kk;k x;k Fkk] QyLo:Ik
mUgsa fufonk nLrkost dh dafMdk 4-8 ds vkyksd esa Misleading in-
formation lefiZr djus dk nks"kh Hkh ik;k x;kA
VI. mi;qZDl rF;ksa ds vkyksd esa JMC Project (India) Ltd. dks
rduhdh :i ls Non Responsive ,oa vlQy ekurs gq, foRrh;
fcM ugha [kksyus dk fu.kZ; fy;k x;kA
mDr ds vkyksd esa bl dk;Z esa Hkkx fy, dqy 5 fufonknkrkvksa
esa ls rhu rduhdh :i ls lQy fufonknkrkvksa dh foRrh; fufonk
[kksyus dk fu.kZ; fy;k x;kA
5.4. JMC Projects India Ltd., A-104, Shapath 4,
Opp. Karnavati Club, S. G. Highway,
Ahmedabad, 380015:-
mDr fufonknkrk dh fufonk nLrkost dh leh{kk ds
mijakr rduhdh fufonk lfefr dh cSBd fnukad
[email protected]@2019 esa leku izd`fr ds vLirky fuekZ.k ds vuqHko
izek.k i= esa dfri; =qfV ds vk/kkj ij rduhdh fufonk
lfefr }kjk Non Responsive ,oa rduhdh :i ls vlQy
ekurs gq, foRrh; fufonk ugha [kksyus dh vuq'kalk dh xbZ FkhA
rduhdh fufonk lfefr dh mi;qZDr vuq'kalk ds fo:} mDr
fufonknkrk us vius i=kad&JMC/I&P/T-16/Buxar/760/ 19-
20] fnukad [email protected]@2019 }kjk vH;kosnu lefiZr fd;k gS
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
fd ,oa crk;k x;k gSa fd muds }kjk dYiuk pkoyk xoesasZV
esfMdy dkWyst djuky] gfj;k.kk ds fuekZ.k ls lacaf/kr nks
izek.k i= lefiZr fd;k x;k gS] ftlesa ,d gh frfFk esa nks
izdkj ds iw.kZrk dk fooj.k vafdr djus dk eq[; dkj.k
Defect liability period gSA fufonknkrk }kjk ;g Hkh crk;k
x;k gS fd "Two certificates is Governed by the
contractual clauses and factually both the certificates
are consistent with each other"
fufonknkrk ds mi;qZDr vkifRr ds QyLo:Ik bl fuxe
}kjk bls HSCC (India) Ltd. ls lR;kfir djkus dk fu.kZ;
fy;k x;k ,oa bl fuxe ds i=kad 5780] fnukad
[email protected]@2019 ds ek/;e ls DGM Civil HSCC (India) Ltd. dks
i= Hkstk x;k gS] ftldk mRrj vHkh rd vizkIr gSA
mDr fufonknkrk ds fo+:} bl dk;Z ds vU;
fufonknkrk Shapoorji Pallonji & Company Pvt. Ltd. us vius
i=kad SP/CAL/3000/2019/426] fnukad [email protected]@2019 }kjk ;g
ifjokn lefiZr fd;k gS fd "JMC Projects do not meet the
eligibility criteria 4.5D of NIT having made loss in 4 out
of last 7 financial years as below:-
2013-14-Loss of Rs. 1061 Lakhs
2014-15-Loss of Rs. 2429 Lakhs
2015-16-Loss of Rs. 6941 Lakhs
2016-17-Loss of Rs. 4185 Lakhs
mDr fufonknkrk ds fo+:} bl dk;Z ds vU;
fufonknkrk Larsen & Toubro us vius i=kad L&T/B&F/
CB&A/Health/BMSICL/2019-007] fnukad [email protected]@2019
}kjk ;g ifjokn lefiZr fd;k gS fd "Whereas M/s JMC
projects Pvt. Ltd. has incurred losses in the F.Y. 14, 15, 16
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
& F.Y. 17 which is more than 2 financial years in the last 7
financial years. The copy of the audited financial results
submitted by M/s JMC project to BSE/NSE is enclosed
for your reference."
M/s JMC Projects (India) Ltd. ds Audited
Profit and Loss statement ds fo:} izkIr ifjokn ds
vkyksd esa mDr fufonknkrk dh foxr 7 o"kksZ ds Financial
statement dh tkap Independent Tax Auditor ls
djkbZ xbZ] ftlesa muds }kjk Ministry of Corporate Af-
fairs (MCA) dh osclkbZV ls MkmuyksM dh xbZ ftldk fooj.k
fuEuor~ gS%&
Financial Year (Rs. In Cr.)
Types of
Financial Particulars
Statement 2012- 2013- 2014- 2015- 2016-
2017-18 2018-19
13 14 15 16 17
Profit after
Tax (As per
18.33 22.97 29.85 43.37 58.25 106.12 142.13
tender
document)
Standalone
Profit after
Tax (As per
30 44 58 106 143
ROC
Record)
From
Consoli-
Bidder 8.5 -10.61 -24.29 -66.33 -41.85 26.85 76.64
dated
website
Sunil Shyama and Associates (Chartered Accounts)
us ;g Hkh earO; fn;k gS fd "with respect to analysis of con-
solidated financial statement of JMC Project (India) Ltd.,
Ahmedabad regarding its profitability, earning per share
(EPS) and tax implication should be considered on the ba-
sis of consolidated financial results and not standalone fi-
nancial statement. As per AS-21 (Accounting standard)
consolidated financial result includes financial of sub-
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
sidiary company, associate enterprises and joint venture
of the company. It is mandatory as per MCA and SEBI
guidelines & investment loss under income tax act."
Tax Consultant Sunil Shyama and Associate izkIr
earO; ds vkyksd esa ;g ik;k x;k fd JMC Projects foRrh; o"kZ
2013&14 ls 2016&17 rd yxkrkj 4 o"kksZ rd Loss ess jgs gSa]
QyLo:Ik os fufonk nLrkost dh vko';d Qualifying Criteria
dafMdk 4-5D dks iwjk ugha djrs gSA lkFk gh mUgsa fufonk nLrkost dh
dafMdk 4-8 ds vkyksd esa Misleading information lefiZr djus
dk nks"kh Hkh ik;k x;kA
mi;qZDl rF;ksa ds vkyksd esa JMC Project (India) Ltd. dks
rduhdh :i ls Non Responsive ,oa vlQy ekurs gq, foRrh; fcM
ugha [kksyus dk fu.kZ; fy;k x;kA
Contentions of the Ld. Counsel for the
petitioner
7. The learned counsel for the petitioner has
submitted that the ground furnished by the
Technical Tender Committee in its minutes /
proceedings of the meeting of the Technical Tender
Committee of the Respondent No. 2 dated
13.12.2019 (Annexure-7 to the writ petition) or for
that matter the one dated 03.01.2020 (Annexure-
14 to the writ petition), to hold the petitioner non-
responsive, to the effect that two certificates
issued by HSCC (India) Ltd. are contradictory in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
nature, is not correct inasmuch as both the
certificates are complementary to each other and
the Respondent No. 2 has wrongly concluded that
the petitioner ought to be disqualified being not
eligible under Clause 4.5(A)(b) of the Instruction to
Bidders. In this regard, it is submitted that the
petitioner had clearly stated in its letter dated
18.12.2019 and explained the reasons as to why
HSCC India Ltd. has used the expression
"substantially completed" on 20.1.2017 in the
certificate dated 27.6.2017 whereas in the
certificate dated 31.10.2018, it has been
acknowledged that the work was completed on
20.1.2017. In this connection, it is submitted that
the petitioner had satisfactorily completed the
construction work of the hospital/OPD and other
associated works of KCGMC during the last seven
years and in order to establish the same, the
petitioner submitted two certificates with the
Respondent No. 2. The first certificate dated
27.6.2017 issued by HSCC certified that the
petitioner has substantially completed the work
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
towards the construction of KCGMC on 20.01.2017,
while the certificate dated 31.10.2018, issued by
HSCC certified that the petitioner has completed
the work towards the construction of KCGMC on
20.01.2017. It is also submitted that even
otherwise the Technical Tender Committee has
wrongly taken the financial year 2016-17 to be the
cut-off year for the qualification of a bidder in term
of Clause 4.5(A)(b). It is stated that the work
towards construction of KCGMC was completed by
the petitioner before 20.01.2017 and the
expression "substantially completed" used in
certificate dated 27.6.2017 was used since this
certificate was issued during the pendency of the
Defect Liability Period (in short referred to as
"DLP"). Even otherwise in terms of Clause 27 of the
SCC of the HSCC project, the certificate of final
completion was only to be issued after the expiry
of the DLP. The DLP in the KCGMC Project expired
on 26.06.2018 and as such a certificate of final
completion in terms of Clause 27(b) was issued on
31.10.2018 certifying that the project was
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
completed on 20.1.2017. Therefore, there was no
scope of confusion or any contradiction or any
dichotomy in the two certificates. It is thus the
case of the petitioner that the aforesaid ground for
non-suiting the petitioner is firstly non-est in the
eyes of law and secondly, even after the petitioner
had clarified about the same, the Technical Tender
Committee of the Respondent No. 2 had not
responded to the said clarification at the time of
evaluating the technical bid of the petitioner and
others in its meeting held on 03.01.2020 and had
again reiterated the said ground i.e. regarding the
petitioner not fulfilling the criteria laid down in
Clause 4.5(A)(b) of the Instruction to Bidders, for
the purposes of holding the bid of the petitioner to
be non-responsive. It is therefore, submitted that
the aforesaid ground for declaring the bid of the
petitioner to be non-responsive is illegal, arbitrary
and fit to be set aside.
8. The Ld. Counsel for the petitioner has further
submitted that as far as the minutes / proceedings
of the meeting of the Technical Tender Committee
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
of the Respondent No. 2 dated 03.01.2020
(Annexure-14 to the writ petition) is concerned, it
would depict that the decision to reject the bid of
the petitioner has been taken on the basis of a
purported inquiry, stated to have been conducted
by the Respondent No. 2, on the basis of alleged
representations received from the rival bidders of
the petitioner and a purported opinion obtained
from a Chartered Accountant, none of which were
ever put to the petitioner during the process of
evaluation of its bid, hence there has been gross
violation of the terms and conditions of the NIT and
the principles of the natural justice. It is also
submitted that the alleged reasons for rejection of
the bid of the petitioner, as set out in the minutes
dated 03.01.2020, are based not only on an
incorrect appreciation of facts and applicable legal
provisions, but are also manifestly arbitrary,
unreasonable, discriminatory and violative of the
constitutional rights of the petitioner. It is next
submitted that there is no requirement under the
NIT or in law, for a bidder to furnish consolidated
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
financial statements and or financial statements of
its subsidiaries for the purpose of demonstrating
eligibility to bid under the NIT, however, on the
contrary, the clear requirement is to provide
standalone financial statement/balance sheet
inasmuch as it has been clearly stipulated in
Clause 4.5(D) read with 4.3(f) of the NIT that the
audited report / reports of the financial standing of
the bidder are required for verifying the eligibility
criterion prescribed in Clause 4.5(D) of the NIT. It is
contended that the petitioner has duly submitted
its standalone financial statements for the required
period to establish its eligibility under Clause 4.5 of
the NIT and Respondent No. 2 is required to
consider only the standalone financial statements
in order to evaluate the eligibility of the petitioner
under Clause 4.5(D). Thus, apparently the
petitioner has not concealed or misrepresented
any information, or provided any false/misleading
information to the Respondent No. 2 with regard to
its financial statements, or otherwise. It is stated
that the petitioner being a listed company, its
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
consolidated financial statements are not only
available on its website but also on the record of
the Ministry of Corporate Affairs and thus is in
public domain, hence, the petitioner could not
have ever gained by furnishing such alleged
misleading information.
9. The Ld. Counsel for the petitioner has also
contended that a plain reading of Clause 4.5(D)
read with Clause 4.3(f) and other provisions of the
NIT would show that the petitioner was required to
furnish its standalone financial balance sheet to
establish that it is not in losses in more than 2
years in the past 7 years, however, the said
clauses, in no manner, require the petitioner to
submit/furnish its consolidated balance sheet.
Thus, invocation of Clause 4.8 is wholly illegal,
misconceived and clearly smacks of malafide to
oust the petitioner to ultimately favour already
declared technically qualified bidders. It is next
contended that the contention of the Respondent
No. 2 that the petitioner has "incurred losses"
during four consecutive financial years namely
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
financial years 2013-14 to 2016-17 is completely
incorrect and baseless, inasmuch as the same
ignores the fact that the petitioner company is a
different and distinct legal entity from its
subsidiary companies, and the profits and/or losses
of its subsidiaries cannot be conflated along with
those of the petitioner for the purpose of
evaluating eligibility to bid under the NIT.
It is also contended that the opinion
purportedly sought by the Respondent No. 2 is
nothing but a nefarious design to justify the
impugned predetermined decision of rejecting the
technical bid of the petitioner, taken pursuant to
the conclusion of the technical bid meeting on
13.12.2019. The said opinion merely states that
the Earnings Per Share (EPS) and "tax implication"
in respect of the petitioner should be considered
on the basis of consolidated financial results and
not standalone financial statement, and it is not
clear as to in what context the said opinion has
been rendered. As regards, Accounting Standard
AS-21 and MCA / SEBI Guidelines and provisions of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Income Tax Act, 1961 with regard to reporting of
investment loss etc., it is submitted that the same
only pertains to reporting requirements mandated
by law under Section 129 of the Companies Act,
2013 and cannot be stretched to mean that
profitability of a 'Bidder' under the NIT is required
to be determined on the basis of its consolidated
financial statement. It is stated that Earnings Per
Share and tax implication of a company are
determined on the basis of its standalone financial
statements alone, and financial statements of its
subsidiaries/ associates have no role to play in this
respect.
10. The learned counsel for the petitioner has
also relied on Section 129(1) read with Section
129(2) and 129(3) of the Companies Act, which is
reproduced herein below:-
"SECTION 129. FINANCIAL STATEMENT
(1) The financial statements shall give a true
and fair view of the state of affairs of the
company or companies, comply with the
accounting standards notified under section
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
133 and shall be in the form or forms as may
be provided for different class or classes of
companies in Schedule III:
Provided that the items contained in such
financial statements shall be in
accordance with the accounting
standards;
Provided further that nothing contained in
this sub-section shall apply to any
insurance or banking company or any
company engaged in the generation or
supply of electricity, or to any other class
of company for which a form of financial
statement has been specified in or under
the Act governing such class of company;
Provided also that the financial
statements shall not be treated as not
disclosing a true and fair view of the state
of affairs of the company, merely by
reason of the fact that they do not
disclose--
(a) in the case of an insurance company,
any matters which are not required to be
disclosed by the Insurance Act, 1938 (4 of
1938), or the Insurance Regulatory and
Development Authority Act, 1999 (41 of
1999);
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
(b) in the case of a banking company, any
matters which are not required to be
disclosed by the Banking Regulation Act,
1949 (10 of 1949);
(c) in the case of a company engaged in
the generation or supply of electricity,
any matters which are not required to be
disclosed by the Electricity Act, 2003 (36
of 2003);
(d) in the case of a company governed by
any other law for the time being in force,
any matters which are not required to be
disclosed by that law.
(2) At every annual general meeting of a
company, the Board of Directors of the
company shall lay before such meeting
financial statements for the financial year.
(3) Where a company has one or more
subsidiaries or associate companies, it shall,
in addition to financial statements provided
under sub-section (2), prepare a consolidated
financial statement of the company and of all
the subsidiaries and associate companies in
the same form and manner as that of its own
and in accordance with applicable accounting
standards, which shall also be laid before the
annual general meeting of the company
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
along with the laying of its financial
statement under sub-section (2):
Provided that the company shall also
attach along with its financial statement,
a separate statement containing the
salient features of the financial statement
of its subsidiary or subsidiaries and
associate company or companies in such
form as may be prescribed.
Provided further that the Central Government
may provide for the consolidation of accounts
of companies in such manner as may be
prescribed."
It is stated, by referring to Section 129(1) read
with Section 129(2) of the Companies Act, 2013,
that the standalone financial statement/
standalone balance sheet of the petitioner
company as prepared and filed is considered as its
balance sheet and consolidated balance sheet is
not considered as the balance sheet of the
petitioner company. Preparation and filing of the
consolidated financial statement is in addition to
the standalone financial statement, hence the
provisions of Section 129(3) of the Companies Act,
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
2013 can, in no manner, be interpreted so as to
mean that the Respondent No. 2 is entitled to
consider the consolidated financial statements of
the petitioner (as opposed to its standalone
financial statements) in order to evaluate and
determine eligibility of the petitioner under Clause
4.5(D) of the NIT. It is stated that it is a well settled
legal position, settled by a catena of judicial
precedents, that a company is a separate and
distinct legal entity from its subsidiaries having
independent corporate personality. Reference has
also been made to Section 19 of the Companies
Act, which substantively bars a subsidiary
company from holding shares in its holding
company either by itself or through its nominees,
and furthermore bars a holding company from
allotting or transferring its shares to any of its
subsidiary companies, and expressly declares any
such allotment or transfer of shares of a company
to its subsidiary company to be void. Thus, it is
submitted that the clear legislative intent is to
maintain separate operational identity of a holding
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
company and its subsidiaries and thereby preserve
the respective shareholders' control over them. It
is also submitted that Section 129 of the
Companies Act, 2013 is merely a compliance
requirement & an extension of Section 212 of the
Companies Act, 1956 for providing information
about the group of companies. In this regard, the
learned counsel for the petitioner has referred to a
judgment rendered by the Hon'ble Apex Court in
the case of State of Kerala vs. Zoom
Developers (P) Ltd. & Others, reported in
(2009) 4 SCC 563, paragraph no. 31 whereof is
reproduced herein below:-
"31. At this stage, one must keep in mind
that Section 212 of the Companies Act, 1956
makes it obligatory on behalf of the holding
company to annex to its balance sheet the
balance sheet and P&L account and other
financial particulars of its subsidiary. Section
212 requires the legal relationship of holding
company and subsidiary company to be
disclosed to all its members."
11. It is thus submitted that it is a settled principle
of law that the legal relationship between a holding
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
company and its subsidiary (ies) is that they are
two separate legal persons and the holding
company does not own the assets of the subsidiary
company, and in law, the management of the
business of the subsidiary also vests in its board of
directors, as such, the only right of the holding
company as a shareholder is to get dividend as
and when declared, to participate in liquidation
proceeds and to vote at the meeting of
shareholders of the subsidiary. In this connection
reliance is placed by the Ld. Counsel for the
petitioner on a judgment rendered by the Hon'ble
Supreme Court in the case of Vodafone
International Holding B.V. Vs. Union of India
(UOI) and Ors., reported in 2012 (6) SCC 613
wherein it has been held that under the provisions
of the Income Tax Act as applicable to companies,
the liability of a company (such as the petitioner)
to pay income tax, is determined on the basis of its
standalone financial statements alone, the
financial statements of its subsidiaries in this
regard are not to be considered and the subsidiary
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
companies of a company (if any), are
independently assessed to tax on the basis of their
respective standalone financial statements and
their liability for payment of income tax is
determined as such. It would be apt to reproduce
paras no. 72, 101, 254 & 259 of the aforesaid
Judgement rendered in the case of Vodafone
International Holdings BV (Supra), herein below:-
"72. The approach of both the corporate and
tax laws, particularly in the matter of
corporate taxation, generally is founded on
the abovementioned separate entity principle
i.e. treat a company as a separate person.
The Income Tax Act, 1961, in the matter of
corporate taxation, is founded on the principle
of the independence of companies and other
entities subject to income tax. Companies and
other entities are viewed as economic entities
with legal independence vis-à-vis their
shareholders/participants. It is fairly well
accepted that a subsidiary and its parent are
totally distinct taxpayers. Consequently, the
entities subject to income tax are taxed on
profits derived by them on stand-alone basis,
irrespective of their actual degree of
economic independence and regardless of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
whether profits are reserved or distributed to
the shareholders/participants. Furthermore,
shareholders/participants that are subject to
(personal or corporate) income tax, are
generally taxed on profits derived in
consideration of their shareholding/
participations, such as capital gains.
Nowadays, it is fairly well settled that for tax
treaty purposes a subsidiary and its parent
are also totally separate and distinct
taxpayers.
101. A company is a separate legal persona
and the fact that all its shares are owned by
one person or by the parent company has
nothing to do with its separate legal
existence. If the owned company is wound up,
the liquidator, and not its parent company,
would get hold of the assets of the subsidiary.
In none of the authorities have the assets of
the subsidiary been held to be those of the
parent unless it is acting as an agent. Thus,
even though a subsidiary may normally
comply with the request of a parent company
it is not just a puppet of the parent company.
The difference is between having power or
having a persuasive position. Though it may
be advantageous for parent and subsidiary
companies to work as a group, each
subsidiary will look to see whether there are
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
separate commercial interests which should
be guarded.
Holding company and subsidiary com-
pany
254. The Companies Act in India and all over
the world have statutorily recognised
subsidiary company as a separate legal
entity. Section 2(47) of the Companies Act,
1956 defines "subsidiary company" or
"subsidiary", a subsidiary company within the
meaning of Section 4 of the Act. For the
purpose of the Companies Act, a company
shall be subject to the provisions of sub-
section (3) of Section 4, be deemed to be
subsidiary of another, subject to certain
conditions, which includes holding of share
capital in excess of 50% controlling the
composition of the Board of Directors and
gaining status of a subsidiary with respect to
the third company by the holding company's
subsidisation of the third company.
259. The US Supreme Court in United
States v. Bestfoods [141 L Ed 2d 43 : 524 US
51 (1998)] explained that it is a general
principle of corporate law and legal systems
that a parent corporation is not liable for the
acts of its subsidiary, but the Court went on
to explain that corporate veil can be pierced
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
and the parent company can be held liable for
the conduct of its subsidiary, if the corporal
form is misused to accomplish certain
wrongful purposes, when the parent company
is directly a participant in the wrong
complained of. Mere ownership, parental
control, management, etc. of a subsidiary is
not sufficient to pierce the status of their
relationship and, to hold parent company
liable. In Adams v. Cape Industries Plc. [1990
Ch 433 : (1990) 2 WLR 657 : (1991) 1 All ER
929 (CA)] , the Court of Appeal emphasised
that it is appropriate to pierce the corporate
veil where special circumstances exist
indicating that it is mere facade concealing
true facts."
Reference has also been made to Section 198
of the Companies Act, according to which, the
calculation of profits of a company for the purpose
of Section 197, is required to be made on the basis
of its standalone financial statements alone and
the financial statements of its subsidiaries (if any)
have no material bearing or relevance for the
purpose of such determination, which is also
evident from the express and unequivocal
provisions of Sub-Sections 3, 4 and 5 of Section
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
198 of the Companies Act, 2013. Thus, it is the
case of the petitioner that it has posted net profits
in the preceding five consecutive financial years in
its standalone financial statements, it has been
independently assessed to income tax and has
duly paid the same on the basis of its income as
per its standalone financial statements while its
subsidiaries have been independently assessed for
their respective income tax liabilities, as per law.
Even as per Clause 4.2(i) of the NIT, a bidder is
required to establish solvency to the extent of only
10% of the contract value of work and in this
regard a certificate from the banker is required by
the Respondent No. 2. This Certificate has been
duly furnished by the petitioner along with its bid.
Thus, the profitability/financial capability or
solvency of the subsidiary(ies) of a bidder have
absolutely no nexus or connection with the object
of the tender to ensure that a bidder is financially
capable of executing the works. As such, it is only
the standalone financial statements of the
petitioner which are required to be referred to for
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
determining eligibility under the provisions of
Clause 4.5D of the NIT.
12. It is next contended by the Ld. Counsel for the
petitioner that the decision of the Technical Tender
Committee of the Respondent No. 2 to disqualify
the petitioner on the basis of its consolidated
financial statements amounts to amending /
modifying the tender conditions after the bidding
process has started and technical bids have been
opened and evaluated, thereby changing the rules
of the game midway, by a process, which is
impermissible in law. Reference in this regard has
made to a judgment rendered by the Hon'ble Apex
Court in the case of Monarch Infrastructure (P)
Ltd. vs. Commissioner, Ulhasnagar Municipal
Corporation and Ors., reported in (2000) 5 SCC
287, paragraphs no. 11 and 12 whereof are
reproduced herein below:-
"11. Broadly stated, the courts would not in-
terfere with the matter of administrative ac-
tion or changes made therein, unless the Gov-
ernment's action is arbitrary or discriminatory
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
or the policy adopted has no nexus with the
object it seeks to achieve or is mala fide.
12. If we bear these principles in mind, the
High Court is justified in setting aside the
award of contract in favour of Monarch Infra-
structure (P) Ltd. because it had not fulfilled
the conditions relating to clause 6(a) of the
Tender Notice but the same was deleted sub-
sequent to the last date of acceptance of the
tenders. If that is so, the arguments advanced
on behalf of Konark Infrastructure (P) Ltd. in
regard to the allegation of mala fides of the
Commissioner of the Municipal Corporation in
showing special favour to Monarch Infrastruc-
ture (P) Ltd. or the other contentions raised in
the High Court and reiterated before us are in-
significant because the High Court had set
aside the award made in favour of Monarch
Infrastructure (P) Ltd. The only question there-
fore remaining is whether any contract should
have been awarded in favour of Konark Infra-
structure (P) Ltd. The High Court had taken
the view that if a term of the tender having
been deleted after the players entered into
the arena it is like changing the rules of the
game after it had begun and, therefore, if the
Government or the Municipal Corporation was
free to alter the conditions fresh process of
tender was the only alternative permissible.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Therefore, we find that the course adopted by
the High Court in the circumstances is justi-
fied because by reason of deletion of a partic-
ular condition a wider net will be permissible
and a larger participation or more attractive
bids could be offered."
13. The Ld. counsel for the petitioner has next
submitted that the petitioner has successfully
executed and completed several works/projects
cumulatively worth than Rs. 10,000 Crores,
between the years 2010 to 2019 including a
construction project of Additional Office Complex
for the Hon'ble Supreme Court having total value
of work executed of Rs. 440 crores which was
completed in the month of September 2019,
regardless of the fact that the subsidiaries of the
petitioner had posted losses from financial years
2013-14 to 2016-2017. The petitioner is stated to
have also completed the construction of 2 All India
Institute of Medial Sciences & Hospitals, namely,
AIIMS, Rishikesh and AIIMS Bhopal and a full-
fledged hospital i.e. Kalpana Chawla Medical
College, Karnal, on its own and the said hospitals
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
have been handed over to the requisite authorities
as also the same are operational as on date. Thus,
despite posting of losses during the period 2013-14
to 2016-17 by certain subsidiaries, the petitioner
has successfully executed and completed
works/projects worth more than Rs. 2000 crores in
each of the said years, details whereof are as
under:-
Financial Years 2013-14 2014-15 2015-16 2016-17
Total Income/
value of works
2,662.8 2,413.1 2,409.0 2,342.7
executed (in
crore)
It is also submitted that EPS as a metric for
evaluating the financials of a company, is not
relevant for the purposes of evaluating eligibility to
bid under the NIT, or capability of executing the
works sought to be tendered there under. EPS, at
best can only be a parameter/tool for an investor
to decide whether to invest or remain invested in a
company. It is evident from the financial
statements, credit rating and work experience
credentials of the petitioner (as detailed in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Annexure-15) that it is not only qualified and
eligible to bid for the works under the NIT, but also
capable of successfully executing the same. A bare
perusal of the NIT/ITB shows that the tender
conditions stipulate that the bidder and the bidder
alone should fulfil the eligibility criteria and the
credentials of the bidder alone are to be
considered. Any consideration of credentials of a
subsidiary, which is not a "Bidder" under the NIT, is
completely arbitrary, unreasonable and extraneous
to the provisions of the NIT as also completely
contrary to the settled principles of law. In this
regard, the Ld. counsel for the petitioner has
referred to the following judgments:-
(i) Core Projects and Technologies Ltd. vs.
The State of Bihar & Ors., reported in 2011
(59) BLJR 183 :: (2010) SCC Online Pat 916;
(ii) M/s Pratap Technocrats Pvt. Ltd. vs. M/s
Bharat Sanchar Nigam Ltd., reported in 2017
SCC Online Del 8747;
(iii) Rohde & Schwarz Gmbh & Co. KG vs.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Airport Authority of India & Anr., reported in
MANU/DE/5017/2013.
Thus, it is the contention of the learned counsel
for the petitioner that since the petitioner company
has posted net profits in the preceding five
consecutive financial years in its standalone
financial statements and has been duly paying
income tax on the basis of its income as per its
standalone financial statements, while its
subsidiaries are independently assessed for their
respective income tax liabilities, the petitioner
definitely fulfils the eligibility criteria laid down
under the provisions of Clause 4.5(D) of the
Instruction to Bidders.
14. The learned counsel for the petitioner has
also contended that the principles of natural justice
have not been followed inasmuch as no
opportunity was granted to the petitioner before
rejecting the technical bid of the petitioner of the
aforesaid two cases either vide the minutes of
meeting of the Technical Tender Committee of the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Respondent No. 2 dated 13.12.2019 or vide the
minutes of meeting dated 03.01.2020. It is further
submitted that in the first case, the Respondent
No. 3 i.e. Shapoorji Pallonji & Company Pvt. Ltd.
and in the second case, the Respondent No. 3 i.e.
Larsen & Toubro Ltd. had made complaints, leading
to the same being reflected in the minutes of
meeting of the Technical Tender Committee of the
Respondent No. 2 dated 03.01.2020, as also
forming the basis for rejection of the technical bid
of the petitioner qua the aforesaid two cases,
however, the complaint petitions were neither
supplied to the petitioner nor any response was
sought from it, which is in violation of Clause 22.4
(ii) of the NIT, which provides that after receipt of
confirmation of the bid security, the bidder will be
asked in writing to clarify or modify his technical
bid, if necessary, with respect to any rectifiable
defects. It is submitted that the decision of the
Technical Tender Committee of the Respondent no.
2, as contained in the minutes of meeting dated
03.01.2020, also shows that an opinion was
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
purportedly sought for from one Sunil Shyama and
Associates (Chartered Accounts) with regard to the
analysis of the consolidated financial statement of
the petitioner regarding its profitability, earning
per share and tax implication vis-a-vis the financial
statement of the standalone petitioner company /
its consolidated financial results including the
finances of its subsidiary company, associate
enterprises and joint venture companies, but a
copy of the said opinion was neither given to the
petitioner nor any response of the petitioner was
sought thereon, although rejection of the technical
bid of the petitioner is based on the said opinion of
the Chartered Accountant. It is thus submitted that
any action, which has a civil consequence, must be
preceded by compliance of the principles of natural
justice and moreover, any action of public body
should be fair, non-arbitrary and judicially sound
i.e. within the four corners of law and should not be
malafide, taken with a view to suit the private
respondents. It is stated that every action of the
State/ Executive Authority must be subject to the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
rule of law and informed by reason and matter of
entering into contract is also subject to judicial
review on the touchstone of relevance and
reasonableness, fair play, natural justice, equality
and non-discrimination. Reference, in this regard,
has been made to a judgment rendered by the
Ho'ble Apex Court in the case of Mahabir Auto
Stores & Others Vs. Indian Oil Corporation &
Others, reported in (1990) 3 SCC 752,
paragraphs no. 12, 13 and 18 to 20 whereof are
reproduced herein below:-
"12. It is well settled that every action of the
State or an instrumentality of the State in
exercise of its executive power, must be
informed by reason. In appropriate cases,
actions uninformed by reason may be
questioned as arbitrary in proceedings under
Article 226 or Article 32 of the Constitution.
Reliance in this connection may be placed on
the observations of this Court in Radha
Krishna Agarwal v. State of Bihar [(1977) 3
SCC 457]. It appears to us, at the outset, that
in the facts and circumstances of the case,
the respondent company IOC is an organ of
the State or an instrumentality of the State as
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
contemplated under Article 12 of the
Constitution. The State acts in its executive
power under Article 298 of the Constitution in
entering or not entering in contracts with
individual parties. Article 14 of the
Constitution would be applicable to those
exercises of power. Therefore, the action of
State organ under Article 14 can be checked.
See Radha Krishna Agarwal v. State of Bihar
[(1977) 3 SCC 457], but Article 14 of the
Constitution cannot and has not been
construed as a charter for judicial review of
State action after the contract has been
entered into, to call upon the State to account
for its actions in its manifold activities by
stating reasons for such actions. In a situation
of this nature certain activities of the
respondent company which constituted State
under Article 12 of the Constitution may be in
certain circumstances subject to Article 14 of
the Constitution in entering or not entering
into contracts and must be reasonable and
taken only upon lawful and relevant
consideration; it depends upon facts and
circumstances of a particular transaction
whether hearing is necessary and reasons
have to be stated. In case any right conferred
on the citizens which is sought to be
interfered, such action is subject to Article 14
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
of the Constitution, and must be reasonable
and can be taken only upon lawful and
relevant grounds of public interest. Where
there is arbitrariness in State action of this
type of entering or not entering into
contracts, Article 14 springs up and judicial
review strikes such an action down. Every
action of the State executive authority must
be subject to rule of law and must be
informed by reason. So, whatever be the
activity of the public authority, in such
monopoly or semi-monopoly dealings, it
should meet the test of Article 14 of the
Constitution. If a governmental action even in
the matters of entering or not entering into
contracts, fails to satisfy the test of
reasonableness, the same would be
unreasonable. In this connection reference
may be made to E.P. Royappa v. State of
Tamil Nadu [(1974) 4 SCC 3], Maneka
Gandhi v. Union of India [(1978) 1 SCC
248], Ajay Hasia v. Khalid Mujib Sehravardi
[(1981) 1 SCC 722], R.D. Shetty v.
International Airport Authority of India
[(1979) 3 SCC 489] and also Dwarkadas
Marfatia and Sons v. Board of Trustees of the
Port of Bombay [(1989) 3 SCC 293]. It appears
to us that rule of reason and rule against
arbitrariness and discrimination, rules of fair
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
play and natural justice are part of the rule of
law applicable in situation or action by State
instrumentality in dealing with citizens in a
situation like the present one. Even though
the rights of the citizens are in the nature of
contractual rights, the manner, the method
and motive of a decision of entering or not
entering into a contract, are subject to judicial
review on the touchstone of relevance and
reasonableness, fair play, natural justice,
equality and non-discrimination in the type of
the transactions and nature of the dealing as
in the present case.
13. The existence of the power of judicial
review however depends upon the nature and
right involved in the facts and circumstances
of the particular case. It is well settled that
there can be "malice in law". Existence of
such "malice in law" is part of the critical
apparatus of a particular action in
administrative law. Indeed "malice in law" is
part of the dimension of the rule of relevance
and reason as well as the rule of fair play in
action.
18. Having considered the facts and
circumstances of the case and the nature of
the contentions and the dealing between the
parties and in view of the present state of law,
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
we are of the opinion that decision of the
State/public authority under Article 298 of the
Constitution, is an administrative decision and
can be impeached on the ground that the
decision is arbitrary or violative of Article 14
of the Constitution of India on any of the
grounds available in public law field. It
appears to us that in respect of corporation
like IOC when without informing the parties
concerned, as in the case of the appellant-
firm herein on alleged change of policy and on
that basis action to seek to bring to an end to
course of transaction over 18 years involving
large amounts of money is not fair action,
especially in view of the monopolistic nature
of the power of the respondent in this field.
Therefore, it is necessary to reiterate that
even in the field of public law, the relevant
persons concerned or to be affected, should
be taken into confidence. Whether and in
what circumstances that confidence should be
taken into consideration cannot be laid down
on any strait-jacket basis. It depends on the
nature of the right involved and nature of the
power sought to be exercised in a particular
situation. It is true that there is discrimination
between power and right but whether the
State or the instrumentality of a State has the
right to function in public field or private field
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
is a matter which, in our opinion, depends
upon the facts and circumstances of the
situation, but such exercise of power cannot
be dealt with by the State or the
instrumentality of the State without informing
and taking into confidence, the party whose
rights and powers are affected or sought to be
affected, into confidence. In such situations
most often people feel aggrieved by exclusion
of knowledge if not taken into confidence.
19. Such transaction should continue as an
administrative decision with the organ of the
State. It may be contractual or statutory but
in a situation of transaction between the
parties for nearly two decades, such
procedure should be followed which will be
reasonable, fair and just, that is, the process
which normally be accepted (sic is expected)
to be followed by an organ of the State and
that process must be conscious and all those
affected should be taken into confidence.
20. Having regard to the nature of the
transaction, we are of the opinion that it
would be appropriate to state that in cases
where the instrumentality of the state enters
the contractual field, it should be governed by
the incidence of the contract. It is true that it
may not be necessary to give reasons but, in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
our opinion, in the field of this nature fairness
must be there to the parties concerned, and
having regard to the large number or the long
period and the nature of the dealings between
the parties, the appellant should have been
taken into confidence. Equality and fairness at
least demands this much from an
instrumentality of the State dealing with a
right of the State not to treat the contract as
subsisting. We must, however, evolve such
process which will work.
15. The learned counsel for the petitioner has
thus submitted that the action taken by the
Respondent No. 2, pursuant to the purported
representation of the rival bidders, smacks of
malafide inasmuch as the Respondent No. 2 had no
occasion to consider the same after the evaluation
of bids had already been concluded on 13.12.2019,
pursuant to which the Technical Evaluation
Committee of the Respondent No. 2 had
recommended rejection of the bid of the petitioner
vide minutes of meeting dated 13.2.2019 on the
ground of non-fulfilment of work experience
criteria set out in Clause 4.5(A)(b) of the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Instruction to Bidders.
16. The learned counsel for the petitioner has
also submitted that the impugned order is not in
consonance with the tender conditions. In this
connection, the learned counsel for the petitioner
has taken this Court to the various Clauses of
Instruction to Bidders as also its appendixes. The
learned counsel for the petitioner has also referred
to Clauses 3, 4 and 5 of the Instruction to Bidders,
which are reproduced herein below:-
"3 Eligible Bidders
3.1 This Invitation for Bids is open to all
bidders.
3.2 All bidders shall provide in Section 2,
Forms of Bid and Qualification Information, a
statement that the Bidder is neither
associated, nor has been associated, directly
or indirectly, with the Consultant; Engineer-in-
Charge or any other entity that has prepared
the design, specifications, and other
documents for the Project or being proposed
as Project Manager for the Contract or
involved in supervision of the contract. A firm
that has been engaged by the Employer to
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
provide consulting services for the
preparation or supervision of the works, and
any of its affiliates shall not be eligible to bid.
3.3 Bidders shall not be under a declaration of
ineligibility for delay, failure or corrupt and
fraudulent practices by any of the State Govt.
or Central Govt. or Public Undertaking or any
Autonomous Body.
4. Qualification of the Bidder
4.1 All bidders shall provide in Section 2,
Forms of Bid and Qualification Information, a
preliminary description of the proposed work
method and schedule, including drawings and
charts indicating miles stones to complete the
project on time.
4.2 All bidders shall also furnish the following
information in Section 2.
(i) Evidence of access to or availability of
credit facilities (minimum 10% of
estimated cost) certified by the bankers.
(ii) Undertaking that bidder would be able
to invest a minimum of cost upto 25% of
the contract value of work, during
implementation of contract.
(iii) Proposals, if any, for sub contracting
of elements of work, costing more than
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
10% of the bid amount. (for all contracts
over Rs. 5 crore)
(iv) Power of attorney, if any.
4.3 If the Employer has not undertaken
prequalification of potential bidders, all
bidders shall include the following information
and documents with their bids in Section 2:
(a) copies of original documents defining
the constitution or legal status, place of
registration, and principal place of
business; written power of attorney of the
signatory of the Bid to commit the Bidder.
(b) total monetary value of construction
work performed for each of the last five
years;
(c) experience in works of a similar nature
and size for each of the last five years,
and details of works underway or
contractually committed; and clients who
may be contacted for further information
on those contracts;
(d) major items of construction equipment
proposed to carry out the Contract or
evidence of arrangement; of possessing
them on hire/ lease/ buying as defined
therein;
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
(e) qualifications and experience of key
site management and technical personnel
proposed for contract;
(f) reports on the financial standing of the
Bidder, such as profit and loss statements
and auditor's reports for the past five
years;
(g) evidence of access to line(s) of credit
and availability of other financial
resources facilities (10% of contract
value), certified by the Bankers (Not more
than 3 months old)
(h) Undertaking that the bidder will be
able to invest minimum cash up to 25% of
contract value of work, during
implementation of work.
(i) authority to seek references from the
Bidder's bankers;
(j) information regarding any litigation,
current or during the last five years, in
which the Bidder is involved, the parties
concerned and dispute amount;
(k) proposals for subcontracting
components of the Works amounting to
more than 10% of the Bid Price (for each,
the qualifications and experience of the
identified sub-contractor in the relevant
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
field should be annexed); (for all contracts
over Rs. 5 Crore)
(l) the proposed methodology and
programme of construction, backed with
equipment planning and deployment,
duly supported with broad calculations
and quality control procedures proposed
to be adopted, justifying their capability
of execution and completion of the work
as per technical specifications within the
stipulated period of completion as per
milestones
Bids from Joint ventures are acceptable.
(For work costing Rs. Ten crore or more)
See JV norms at Pg. no. 32 to 39.
4.5 (A) To qualify for award of the contract,
each bidder in its name should have in the
last five years as referred to in Appendix:-
(a) Achieved in any one year a minimum
annual financial turnover (in all classes of
civil engineering construction works only)
volume of construction work of at least the
amount equal to the 50 % (fifty percent)
estimated cost of works for which bid has
been invited. The turn over will be indexed
at the rate of 10% for a year. Certificate
from statutory auditor is required to verify
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
the turnover from civil engineering
construction work.
(b). The contracting Firm/Agency/JV should
have "Satisfactorily Completed" in India as
a prime contractor during the last seven
years ending last day of the month
previous to the month of date of tender i.e.
31 July, 2019 construction of:-
i. At least one hospital or composite
hospital campus having College/Hostel/
Residential Building (including civil works
along with services like plumbing,
electrical, HVAC etc.) having total cost not
less than 40% of the estimated value (i.e.
Rs. 175.20 Cr.) of the project put to
tender.
"Or"
At least one hospital or composite hospital
campus having College/Hostel/Residential
Building (including civil works along with
services like plumbing, electrical, HVAC
etc.) having total built up not less than
40% of the project (i.e. 45322 Sqm) put to
tender.
And
ii. Three works of similar nature in
India each costing not less than 40%
(forty percent) of the estimated cost of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
this project.
"Or"
Two works of similar nature in India each
costing not less than 60% (sixty percent)
of the estimated cost of this project.
"Or"
One work of similar nature in India each
costing not less than 80% (eighty percent)
of the estimated cost of this project.
I. "Similar Nature" shall means:- Con-
struction of:-
I. Dental College/Medical College & Hos-
pital Building 'or'
II. Institutional Building more than 15 mtr
in height 'or'
III.Educational Building more than 15 mtr
in height 'or'
IV. Residential Building more than 15 mtr in
height
On composite basis i.e. civil works along
with associated MEP services like plumbing,
electrical HVAC Etc. for Central/State Govt./
PSU/Private Sector.
The completion certificate shall be issued
by employer not below the rank of
Executive Engineer or Project Manager. In
case of private client the completion
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
certificate issued by employer should be
certified by CA and supported with TDS
certificate. The bidders shall have to also
submit good quality digital photographs of
the completed projects.
(c) executed in any one year, the minimum
quantities of the following items of work as
indicated in Appendix to ITB.
(i) Cement concrete (including RCC and
PCC):- Cum
(ii) Brick Work:-cum
(iii)Flooring (Vitrified/ Mosaic/Marble/
Kota/Ceramic):- Sqm.
(usually 80% of the expected peak rate of
construction)
(d) The contractor or his identified sub-
contractor should possess required valid
electrical license for executing the building
electrification works and should have
executed similar electrical works for a
minimum amount as indicated in Appendix
in any one year. In case bidder is not
possession of such license, the bidder must
enter into a tie-up arrangement with such
license holder having requisite experience.
Such tie-up must be duly notarized.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
The contractor or his identified sub-
contractor should possess required valid
license for executing the water
supply/sanitary engineering works and
should have executed similar water
supply/sanitary engineering works for a
minimum amount as indicated in Appendix
in any one year. In case bidder is not in
possession of such license, the bidder must
enter into a tie-up arrangement with such
license holder having requisite experience.
Such tie-up must be duly notarized.
B. Each bidder should further demonstrate :
(a) availability (either owned or leased or
by procurement against mobilization
advances) of the following key and critical
equipment for this work:
Based on the studies, carried out by the
Engineer the minimum suggested major
equipment to attain the completion of
works in accordance with the prescribed
construction schedule are shown in the
Annexure-I.
Availability of the testing equipment
required for establishing field laboratory
to perform mandatory tests e.g. those
stated in Appendix to ITB.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
The bidders should, however, undertake
their own studies and furnish with their
bid, a detailed construction planning and
methodology supported with layout and
necessary drawings and calculations
(detailed) as stated in clause 4.3(1) above
to allow the employer to review their
proposals. The numbers, types and
capacities of each plant/equipment shall
be shown in the proposals along with the
cycle time for each operation for the given
production capacity to match the
requirements.
(b) availability for this work of
personnel with adequate experience as
required; as per Annexure-II.
(c) liquid assets and/or availability of
credit facilities of no less than amount
indicated in Appendix (Credit lines/letter
of credit/certificates from Banks for
meeting the funds requirement etc.-
usually the equivalent of the estimated
cash flow for 3 months in peak
construction period.)
C. To qualify for a package of contracts made
up of this and other contracts for which bids
are invited in the IFB, the bidder must
demonstrate having experience and resources
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
sufficient to meet the aggregate of the
qualifying criteria for the individual contracts.
D. That do not have incurred any loss in more
than two years during the immediate last
seven consecutive financial years ending
31.03.2019. The statement should be duly
certified by the chartered accountant. Bidder
should submit the audited Profit & Loss
Account to verify the same.
4.6 Sub-contractors' experience and
resources shall not be taken into account in
determining the bidder's compliance with the
qualifying criteria except to the extent stated
in 4.5(A) above.
4.7 Bidders who meet the minimum
qualification criteria will be qualified only if
their available bid capacity is more than the
total bid value. The available bid capacity will
be calculated as under :
Assessed Available Bid capacity=(A*N*3 - B)
Where
A = Maximum value of civil engineering works
executed in any one year during the last five
years (updated to the price level of the year
indicated in Appendix) taking into account the
completed as well as works in progress.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
N = Number of years prescribed for
completion of the works for which bids are
invited.
B = Value (updated to the price level of the
year indicated in Appendix) of existing
commitments and on-going works to be
completed during the next three years (period
of completion of the works for which bids are
invited)
Note : The statements showing the value of
existing commitments and on-going works
as well as the stipulated period of
completion remaining for each of the works
listed should be either countersigned by
the Engineer in charge, not below the rank
of an Executive Engineer or equivalent or
duly notarized by the bidder.
4.8 Even though the bidders meet the above
qualifying criteria, they are subject to be
disqualified if they have: -
- made misleading or false representations in
the forms, statements and attachments
submitted in proof of the qualification
requirements; and/or
- have record of poor performance such as
abandoning the works, not properly
completing the contract, inordinate delays in
completion, litigation history, or financial
failures etc; and/or
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
- participated in the previous bidding for the
same work and had quoted unreasonably high
bid prices and could not furnish rational
justification to the employer.
5. One Bid per Bidder
5.1 Each bidder shall submit only one bid for
any work or one package or group. A bidder
who submits or participates in more than one
Bid for a package or group (other than as a
subcontractor or in cases of alternatives that
have been permitted or requested) will cause
all the proposals with the Bidder's
participation to be disqualified."
It is thus submitted that a bare perusal of the
aforesaid clauses 3, 4 and 5 of the Instruction to
Bidders would show that the NIT has been floated
by the Respondent No. 2 only for a bidder, who will
participate in the NIT on standalone basis on the
strength of its own Financial Credentials and its
own work experience. It is also stated that the
Instruction to Bidder uses the expression bidder
and the expression subsidiary does not even
picture in the Instruction to Bidder. Thus, using the
financial credentials of a subsidiary, which is not a
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
bidder under the NIT, is completely arbitrary and
extraneous to the provisions of the NIT and would
amount to adding / sub-planting the word
"subsidiary" in Clause 4.5(D) while interpreting the
same, which is clearly impermissible in law. Thus, it
is submitted that the Respondent No. 2 is bound to
adhere to the aforesaid criteria, limiting the
expression bidder in the NIT/ITB and it cannot be
unilaterally deviated from, more so at the stage of
evaluation of bid after invitation to bidders. In this
connection, reliance has been placed on a
judgment rendered by the Hon'ble Apex Court in
the case of West Bengal State Electricity
Board vs. Patel Engineering Co. Ltd. &
Others., reported in (2001) 2 SCC 451. It is
also contended that tender conditions must be
scrupulously followed and the tender conditions
cannot be modified or changed in any manner
after bid has been opened and whatever
procedure, tendering authority proposes to follow
in accepting the tender, must be clearly stated in
the tender notice. In this connection, the learned
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
counsel for the petitioner has referred to the
judgments rendered in the cases of Monarch
Infrastructure (P) Ltd. vs. Commissioner,
Ulhasnagar Municipal Corporation & Ors,
reported in (2000) 5 SCC 287, Dutta Associates
Pvt. Ltd. vs. Indo Merchantiles Pvt. Ltd. &
Others., reported in (1997) 1 SCC 53 and the
one rendered in the case of Green Polytubes
Pvt. Ltd. vs. State of Bihar & Ors., reported in
MANU/BH/ 0011/2002.
17. The learned counsel for the petitioner has
also referred to some well-settled principles of law
to buttress its case. It has been firstly stated that
discretion of tendering authority in accepting offer
in contracts, ought to be done within the four
corners of requirements of law especially Article 14
of the Constitution of India. In this connection, the
learned counsel for the petitioner has referred to a
judgment rendered by the Hon'ble Apex Court in
the case of Union of India & Ors. vs. Dinesh
Engineering Corporation & Anr., reported in
(2001) 8 SCC 491, paragraph no. 16 whereof is
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
reproduced herein below:-
"16. But then as has been held by this Court
in the very same judgment that a public
authority even in contractual matters should
not have unfettered discretion and in
contracts having commercial element even
though some extra discretion is to be
conceded in such authorities, they are bound
to follow the norms recognised by courts
while dealing with public property. This
requirement is necessary to avoid
unreasonable and arbitrary decisions being
taken by public authorities whose actions are
amenable to judicial review. Therefore, merely
because the authority has certain elbow room
available for use of discretion in accepting
offer in contracts, the same will have to be
done within the four corners of the
requirements of law, especially Article 14 of
the Constitution. In the instant case, we have
noticed that apart from rejecting the offer of
the writ petitioner arbitrarily, the writ
petitioner has now been virtually debarred
from competing with EDC in the supply of
spare parts to be used in the governors by the
Railways, ever since the year 1992, and
during all this while, we are told the Railways
are making purchases without any tender on
a proprietary basis only from EDC which, in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
our opinion, is in flagrant violation of the
constitutional mandate of Article 14. We are
also of the opinion that the so-called policy of
the Board creating monopoly of EDC suffers
from the vice of non-application of mind,
hence, it has to be quashed as has been done
by the High Court."
18. The learned counsel for the petitioner has
next submitted that object of the tender is plurality
of players so that the choice can be made of the
most competitive bidder. In this connection, the
learned counsel for the petitioner has relied upon a
judgment rendered in the case of Sumitomo
Chemical India Pvt. Ltd. vs. HLL Lifecare Ltd.
reported in 2002 SCC Online Del 500. It is also
contended that right to life under Article 21
includes right to opportunity. Thus, it is submitted
that doctrine of level playing field is an important
concept while construing Article 19 (1)(g) of the
Constitution of India, which confers fundamental
right to carry on business to a company, hence, it
is entitled to invoke the said doctrine of level
playing field. It is stated that it is equally a well-
settled law that the principle of judicial review
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
cannot be denied even in contractual matters or
matters in which the Government exercises its
contractual powers but judicial review is intended
to prevent arbitrariness and it must be exercised in
larger public interest and grounds upon which
administrative action is subjected to control by
judicial review are classifiable broadly under three
heads, namely, illegality, irrationality and
procedural impropriety. In this connection, the
learned counsel for the petitioner has referred to a
judgment rendered by the Hon'ble Apex Court in
the case of Reliance Energy Ltd. & Anr. vs.
Maharashtra State Road Development Corpn.
Ltd.& Others, reported in (2007) 8 SCC 1,
paragraphs no. 36, 38 and 39 whereof are
reproduced herein below:-
"36. We find merit in this civil appeal.
Standards applied by courts in judicial review
must be justified by constitutional principles
which govern the proper exercise of public
power in a democracy. Article 14 of the
Constitution embodies the principle of "non-
discrimination". However, it is not a free-
standing provision. It has to be read in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
conjunction with rights conferred by other
articles like Article 21 of the Constitution. The
said Article 21 refers to "right to life". It
includes "opportunity". In our view, as held in
the latest judgment of the Constitution Bench
of nine Judges in I.R. Coelho v. State of
T.N. [(2007) 2 SCC 1] , Articles 21/14 are the
heart of the chapter on fundamental rights.
They cover various aspects of life. "Level
playing field" is an important concept while
construing Article 19(1)(g) of the Constitution.
It is this doctrine which is invoked
by REL/HDEC in the present case. When Article
19(1)(g) confers fundamental right to carry on
business to a company, it is entitled to invoke
the said doctrine of "level playing field". We
may clarify that this doctrine is, however,
subject to public interest. In the world of
globalisation, competition is an important
factor to be kept in mind. The doctrine of
"level playing field" is an important doctrine
which is embodied in Article 19(1)(g) of the
Constitution. This is because the said doctrine
provides space within which equally placed
competitors are allowed to bid so as to
subserve the larger public interest.
"Globalisation", in essence, is liberalisation of
trade. Today India has dismantled licence raj.
The economic reforms introduced after 1992
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
have brought in the concept of
"globalisation". Decisions or acts which result
in unequal and discriminatory treatment,
would violate the doctrine of "level playing
field" embodied in Article 19(1)(g). Time has
come, therefore, to say that Article 14 which
refers to the principle of "equality" should not
be read as a standalone item but it should be
read in conjunction with Article 21 which
embodies several aspects of life. There is one
more aspect which needs to be mentioned in
the matter of implementation of the
aforestated doctrine of "level playing field".
According to Lord Goldsmith, commitment to
the "rule of law" is the heart of parliamentary
democracy. One of the important elements of
the "rule of law" is legal certainty. Article 14
applies to government policies and if the
policy or act of the Government, even in
contractual matters, fails to satisfy the test of
"reasonableness", then such an act or
decision would be unconstitutional.
38. When tenders are invited, the terms and
conditions must indicate with legal certainty,
norms and benchmarks. This "legal certainty"
is an important aspect of the rule of law. If
there is vagueness or subjectivity in the said
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
norms it may result in unequal and
discriminatory treatment. It may violate
doctrine of "level playing field".
39. In Reliance Airport Developers (P)
Ltd. v. Airports Authority of India [(2006) 10
SCC 1] the Division Bench of this Court has
held that in matters of judicial review the
basic test is to see whether there is any
infirmity in the decision-making process and
not in the decision itself. This means that the
decision-maker must understand correctly the
law that regulates his decision-making power
and he must give effect to it otherwise it may
result in illegality. The principle of "judicial
review" cannot be denied even in contractual
matters or matters in which the Government
exercises its contractual powers, but judicial
review is intended to prevent arbitrariness
and it must be exercised in larger public
interest. Expression of different views and
opinions in exercise of contractual powers
may be there, however, such difference of
opinion must be based on specified norms.
Those norms may be legal norms or
accounting norms. As long as the norms are
clear and properly understood by the
decision-maker and the bidders and other
stakeholders, uncertainty and thereby breach
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
of the rule of law will not arise. The grounds
upon which administrative action is subjected
to control by judicial review are classifiable
broadly under three heads, namely, illegality,
irrationality and procedural impropriety. In the
said judgment it has been held that all errors
of law are jurisdictional errors. One of the
important principles laid down in the aforesaid
judgment is that whenever a norm/benchmark
is prescribed in the tender process in order to
provide certainty that norm/standard should
be clear. As stated above "certainty" is an
important aspect of the rule of law.
In Reliance Airport Developers [(2006) 10
SCC 1] the scoring system formed part of the
evaluation process. The object of that system
was to provide identification of factors,
allocation of marks of each of the said factors
and giving of marks at different stages.
Objectivity was thus provided."
19. Thus, it is the submission of the learned
counsel for the petitioner of the aforesaid two
cases that the minutes of meeting of the Technical
Tender Committee of the Respondent No. 2 dated
13.12.2019 and 03.01.2020 whereby and
whereunder the technical bid of the petitioner of
the aforesaid two cases has been held to be non-
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
responsive, be quashed and consequently, the
Respondent No. 2 be directed to consider the
financial bid submitted by the petitioner, taking
into account the fact that the petitioner fulfils the
eligibility criteria mentioned in Clause 4.5(A)(b)
and Clause 4.5(D) of the Instruction to Bidders as
also its technical bid is responsive in terms of the
tender conditions.
Contentions of the Ld. Senior Counsel for the
respondent No. 2 in both the aforesaid two
cases
20. Per contra, the learned Senior Counsel
appearing for the Respondent No. 2, Sri Lalit
Kishore, Advocate General, has submitted that it is
the duty of the Respondent No. 2 to ensure that
the bidder is sound from all corners. It is stated
that the participating bidders, namely, Shapoorji
Pallonji and Company Pvt. Ltd. & Larsen and Toubro
Ltd., had submitted a written representation
against the petitioner i.e M/s JMC Projects (India)
Ltd., stating therein that the said company has
suppressed facts by not submitting consolidated
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
profit/loss statement in which they have incurred
losses in the F.Y. 2013-14, 2014-15, 2015-16 and
2016-17, which is more than two financial years in
the last seven financial years, hence, the petitioner
does not fulfill the conditions laid in Clause 4.5D of
the tender documents. It is stated that after receipt
of the representation from the participating
bidders, the tender technical committee
thoroughly examined the financial statement of the
petitioner company wherein it was found that the
petitioner company has submitted its standalone
financial statements showing that it had earned
profit during the relevant period. The tender
technical committee got the consolidated financial
statement of the petitioner company downloaded
from the website of the Registrar of Companies,
Ministry of Corporate Affairs (MCA), Govt. of India
and found that the company had incurred losses
during four consecutive years i.e F.Y. 2013-14,
2014-15, 2015-16 and 2016-17, as outlined in
paragraph No. 2.5 (IV) of the tender technical
committee's proceedings dated 03.01.2020. It is
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
further submitted that an opinion regarding the
technical eligibility qualification status of the
petitioner company was taken from an
independent Chartered Accountant namely Sunil
Shyama and Associates, who gave his opinion in
the following terms:-
"With respect to analysis of consolidated
financial status of JMC Projects (India) Ltd.,
Ahmedabad regarding its profitability, earning
per share (EPS) and Tax implication should be
considered on the basis of consolidated
financial results and not standalone financial
statement. As per AS-21 (Accounting
Standard) consolidated financial result
includes financial of subsidiary company,
associate enterprises and joint venture of the
company. It is mandatory as per MCA and
SEBI guidelines and investment loss under
Income Tax Act."
It is thus submitted that the aforesaid opinion
makes it explicitly clear that the petitioner
company fails to fulfill the technical eligibility
criteria as laid in Clause 4.5 (D) of the tender
documents. The learned Senior Counsel for the
Respondent No. 2 has also referred to Section 129
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
of the Companies Act, 2013 and has submitted
that all the listed and unlisted companies, having
one or more subsidiaries, including associate
companies and joint ventures must compulsorily
prepare the consolidated financial statements and
the said concept of Consolidated Financial
Statement was brought with an objective of
achieving the true and fair view of reporting the
position of the company for the financial year,
since the consolidated financial statements are
generally considered as primary financial
statements from an economic entity perspective,
whereas the standalone financial statement
projects only the position of the company in its
individual performance and does not provide the
true and fair view to the shareholders about the
overall performance of the company with its
subsidiaries. The learned Senior Counsel for the
Respondent No. 2 has also referred to Accounting
Standard-110 whereby and whereunder
consolidated financial statement is required to be
mandatorily compiled in preparation of financial
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
statement and accounting policies. It is stated that
the petitioner has 4 (four) 100% subsidiaries and
has associates with 49.57 % holding, hence, in the
case of holding company, the financial health can
only be derived after consolidation of financial
statements of the subsidiaries and associates.
Besides, if holding company is bearing fruits of
good days then it has also to bear the wrath of bad
days. In is stated that the fact is that the Technical
Tender Committee had analyzed the standalone
financial statements and consolidated financial
statements of the petitioner, whereafter it was
observed that the standalone EPS was positive and
EPS derived on the basis of consolidated financial
statement was negative from the financial year
2013-14 to 2016-17. In such view of the matter,
the Technical Tender Committee thought it proper
to take a look at the consolidated financial
statements of the petitioner company before
taking any decision with regard to the holding
company. It is also submitted that one of the
participating bidders namely Shapoorji Pallorji and
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Company Pvt. Ltd. had submitted a written
representation against the petitioner company M/s
JMC Projects (India) Ltd., stating therein that the
petitioner company has suppressed facts inasmuch
as it has not submitted details regarding its
existing commitment and ongoing works. After
receipt of the representation from the participating
bidder, details of existing commitment and
ongoing works, uploaded by the petitioner
company on the website of Bombay Stock
Exchange, was thoroughly examined and it was
found that the petitioner company has itself
declared the details of the projects awarded to it
via press release but the same were not uploaded
by the petitioner company in their tender
documents submitted to BMSICL, which is a
mandatory criteria as per the provisions laid down
in Clause 4.7 of the tender document, obviously
with a deliberate intention to conceal its bid
capacity. It is also submitted that details of several
projects have not been furnished by the petitioner
company, which are worth approximately Rs. 4346
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
crores and would seriously affect the bid capacity
of the petitioner company. In such view of the
matter, considering the provision contained in
Clause 4.8 of the Instruction to Bidders, the bid of
the petitioner has rightly been rejected inasmuch
as the petitioner company has made misleading /
false representation by not submitting the details
of existing commitment and ongoing works. It is
next submitted that the petitioner company was
awarded the work of construction of AIIMS, Bhopal,
which was required to be completed within two
years, but the same has not yet been completed.
Similarly, the petitioner is yet to complete the
construction work of AIIMS, Rishikesh and has not
adhered to the timeline within which the said
project was required to be completed.
Thus, it is submitted that since the petitioner
company is running in loss and is not having a
healthy financial condition, it has not been able to
complete two of the Government of India's
prestigious projects, even after a lapse of over nine
years though the same were required to be
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
completed within two years, the Respondent No. 2
is of the firm belief that if the present project is
handed over to the petitioner company, the same
shall not be completed within the designated time
period, hence, would adversely effect the delivery
of health services to the people of the State.
21. It is further contended by the learned Senior
Counsel for the Respondent No. 2 that the
Technical Tender Committee in its meeting held on
03.01.2020, after cautious, serious and judicious
consideration of the facts and evidences pertaining
to the matter in question, came to the conclusion
that the petitioner company has incurred losses
during four consecutive financial years i.e. FY
2013-14, 2014-15, 2015-16 and 2016-17
respectively and has thus failed to fulfill the
conditions / eligibility criteria as laid down in
Clause 4.5 (D) of the tender document. Thus the
Technical tender Committee rejected the technical
bid of the petitioner company and decided not to
open the financial bid of the said company. It is
also submitted that recently, the Central Public
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Works Department (CPWD), New Delhi has issued
an Office Memorandum vide No. DG/SOP/5 (issued
by the Authority of Director General, CPWD) dated
10.1.2020, whereby modification has been made in
the initial criteria for eligibility in the SOP. As per
the new provision laid by CPWD, the balance sheet
in case of Private / Public Ltd. company means,
both its standalone finance statement as also the
consolidated financial statement and as far as
financial information to be furnished in Form-A
regarding eligibility is concerned, the profit/loss,
both as per standalone financial statement as also
consolidated financial statement, is required to be
furnished. It is thus evidently clear that as per the
new provisions laid down by CPWD, the petitioner
company has been in loss for 4 consecutive
financial years i.e. 2013-14 to 2016-17, hence has
failed to fulfill the eligibility criteria.
22. The learned Senior Counsel for the
Respondent No. 2 has next contended that the
petitioner has not challenged the minutes of
meeting of the Technical Tender Committee of the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Respondent No. 2 dated 13.12.2019, hence, the
petitioner is estopped from raising any grievance.
It is also submitted that there has been no
violation of the principles of natural justice
inasmuch as the representation filed by the
petitioner, against the decision of the Technical
Tender Committee contained in its minutes dated
13.12.2019, has been duly considered and
thereafter, the Technical Tender Committee has
held the petitioner to be non-responsive vide its
decision contained in its minutes of meeting dated
03.01.2020. The learned Senior Counsel for the
Respondent No. 2 has further submitted that in a
writ jurisdiction under Article 226 of the
Constitution of India, administrative decisions
ought not to be interfered with merely on account
of disagreement with the decision making process
or decision of the authorities and since 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, a writ court should rely on
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
the understanding of the owner / employer of a
project and appreciate the terms and conditions of
the tender documents, but unless there is malafide
or perversity in the understanding or appreciation
or in the application of the terms of the tender
conditions, the decision-making process or the
decision itself should not be interfered with. In this
regard, the learned Senior Counsel for the
Respondent No. 2 has relied on a judgment
rendered by the Hon'ble Apex Court in the case of
Afcons Infrastructure Ltd. vs. Nagpur Metro
Rail Corpn. Ltd., reported in (2016) 16 SCC
818, paragraphs no. 11 to 15 whereof are
reproduced herein below:-
"11. Recently, in Central Coalfields
Ltd. v. SLL-SML (Joint Venture
Consortium) [Central Coalfields Ltd. v. SLL-
SML (Joint Venture Consortium), (2016) 8 SCC
622 : (2016) 4 SCC (Civ) 106 : (2016) 8 Scale
99] it was held by this Court, relying on a host
of decisions that the decision-making process
of the employer or owner of the project in
accepting or rejecting the bid of a tenderer
should not be interfered with. Interference is
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
permissible only if the decision-making
process is mala fide or is intended to favour
someone. Similarly, the decision should not
be interfered with unless the decision is so
arbitrary or irrational that the Court could say
that the decision is one which no responsible
authority acting reasonably and in accordance
with law could have reached. In other words,
the decision-making process or the decision
should be perverse and not merely faulty or
incorrect or erroneous. No such extreme case
was made out by GYT-TPL JV in the High Court
or before us.
12. In Dwarkadas Marfatia and Sons v. Port of
Bombay [Dwarkadas Marfatia and Sons v. Port
of Bombay, (1989) 3 SCC 293] it was held that
the constitutional courts are concerned with
the decision-making process. Tata
Cellular v. Union of India [Tata
Cellular v. Union of India, (1994) 6 SCC 651]
went a step further and held that a decision if
challenged (the decision having been arrived
at through a valid process), the constitutional
courts can interfere if the decision is
perverse. However, the constitutional courts
are expected to exercise restraint in
interfering with the administrative decision
and ought not to substitute its view for that of
the administrative authority. This was
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
confirmed in Jagdish Mandal v. State of Orissa,
(2007) 14 SCC 517] as mentioned in Central
Coalfields Ltd. v. SLL-SML (Joint Venture
Consortium), (2016) 8 SCC 622.
13. In other words, a mere disagreement with
the decision-making process or the decision of
the administrative authority is no reason for a
constitutional court to interfere. The threshold
of mala fides, intention to favour someone or
arbitrariness, irrationality or perversity must
be met before the constitutional court
interferes with the decision-making process or
the decision.
14. We must reiterate the words of caution
that this Court has stated right from the time
when Ramana Dayaram Shetty v.
International Airport Authority of India
[Ramana Dayaram Shetty v. International
Airport Authority of India, (1979) 3 SCC 489]
was decided almost 40 years ago, namely,
that the words used in the tender documents
cannot be ignored or treated as redundant or
superfluous -- they must be given meaning
and their necessary significance. In this
context, the use of the word "metro" in Clause
4.2(a) of Section III of the bid documents and
its connotation in ordinary parlance cannot be
overlooked.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
15. We may add that the owner or the
employer of a project, having authored the
tender documents, is the best person to
understand and appreciate its requirements
and interpret its documents. The
constitutional courts must defer to this
understanding and appreciation of the tender
documents, unless there is mala fide or
perversity in the understanding or
appreciation or in the application of the terms
of the tender conditions. It is possible that the
owner or employer of a project may give an
interpretation to the tender documents that is
not acceptable to the constitutional courts but
that by itself is not a reason for interfering
with the interpretation given."
23. The learned Senior Counsel for the
Respondent No. 2 has also submitted that judicial
review is concerned with reviewing not the merits
of the decision in support of which the application
for judicial review is made, but the decision-making
process itself. It is thus submitted that certain
principles have been laid down by the Hon'ble
Apex Court with regard to inherent limitations in
exercise of the power of the judicial review by the
constitutional courts in the case of Tata Cellular
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
vs. Union of India, reported in (1994) 6 SCC
651, paragraphs no. 70, 74, 75 and 94 whereof are
reproduced herein below:-
"70. It cannot be denied that the principles of
judicial review would apply to the exercise of
contractual powers by Government bodies in
order to prevent arbitrariness or favouritism.
However, it must be clearly stated that there
are inherent limitations in exercise of that
power of judicial review. Government is the
guardian of the finances of the State. It is
expected to protect the financial interest of
the State. The right to refuse the lowest or
any other tender is always available to the
Government. But, the principles laid down in
Article 14 of the Constitution have to be kept
in view while accepting or refusing a tender.
There can be no question of infringement of
Article 14 if the Government tries to get the
best person or the best quotation. The right to
choose cannot be considered to be an
arbitrary power. Of course, if the said power is
exercised for any collateral purpose the
exercise of that power will be struck down.
74. Judicial review is concerned with
reviewing not the merits of the decision in
support of which the application for judicial
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
review is made, but the decision-making
process itself.
75. In Chief Constable of the North Wales
Police v. Evans [(1982) 3 All ER 141, 154] Lord
Brightman said:
"Judicial review, as the words imply, is
not an appeal from a decision, but a
review of the manner in which the
decision was made.
***
Judicial review is concerned, not with the
decision, but with the decision-making
process. Unless that restriction on the
power of the court is observed, the court
will in my view, under the guise of
preventing the abuse of power, be itself
guilty of usurping power."
In the same case Lord Hailsham commented
on the purpose of the remedy by way of
judicial review under RSC, Ord. 53 in the
following terms:
"This remedy, vastly increased in extent,
and rendered, over a long period in
recent years, of infinitely more
convenient access than that provided by
the old prerogative writs and actions for
a declaration, is intended to protect the
individual against the abuse of power by
a wide range of authorities, judicial,
quasi-judicial, and, as would originally
have been thought when I first practised
at the Bar, administrative. It is not
intended to take away from those
authorities the powers and discretions
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
properly vested in them by law and to
substitute the courts as the bodies
making the decisions. It is intended to
see that the relevant authorities use
their powers in a proper manner (p.
1160)."
In R. v. Panel on Take-overs and Mergers, ex p
Datafin plc [(1987) 1 All ER 564] , Sir John
Donaldson, M.R. commented:
"An application for judicial review is not
an appeal."
In Lonrho plc v. Secretary of State for Trade
and Industry [(1989) 2 All ER 609] , Lord Keith
said:
"Judicial review is a protection and not a
weapon."
It is thus different from an appeal. When
hearing an appeal the Court is concerned with
the merits of the decision under appeal.
In Amin, Re [(1983) 2 All ER 864], Lord Fraser
observed that:
"Judicial review is concerned not with the
merits of a decision but with the manner
in which the decision was made....
Judicial review is entirely different from
an ordinary appeal. It is made effective
by the court quashing the administrative
decision without substituting its own
decision, and is to be contrasted with an
appeal where the appellate tribunal
substitutes its own decision on the
merits for that of the administrative
officer."
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
94. The principles deducible from the above
are:
(1) The modern trend points to judicial
restraint in administrative action.
(2) The court does not sit as a court of
appeal but merely reviews the manner in
which the decision was made.
(3) The court does not have the
expertise to correct the administrative
decision. If a review of the administrative
decision is permitted it will be
substituting its own decision, without the
necessary expertise which itself may be
fallible.
(4) The terms of the invitation to
tender cannot be open to judicial
scrutiny because the invitation to tender
is in the realm of contract. Normally
speaking, the decision to accept the
tender or award the contract is reached
by process of negotiations through
several tiers. More often than not, such
decisions are made qualitatively by
experts.
(5) The Government must have freedom
of contract. In other words, a fair play in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
the joints is a necessary concomitant for
an administrative body functioning in an
administrative sphere or quasi-
administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facts
pointed out above) but must be free
from arbitrariness not affected by bias or
actuated by mala fides.
(6) Quashing decisions may impose
heavy administrative burden on the
administration and lead to increased and
unbudgeted expenditure."
Contentions of the Ld. Senior Counsel for the
respondent No. 3 in Civil Writ Jurisdiction
Case No. 208 of 2020
24. The learned counsel for the Respondent No. 3
(first case), Mr. Mrigank Mauli, assisted by Mr.
Vankatesh Kriti, Advocate, has submitted that the
tender evaluation committee of the Respondent
No. 2 had met on 13.12.2019 and held the bid of
the petitioner to be non-responsive while that of
the Respondent No. 3 had been held to have
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
qualified against all the works for which it had
applied. The learned counsel for the Respondent
No. 3 has supported the reason set out in the
minutes of meeting dated 13.12.2019 for declaring
the petitioner to be non-responsive regarding the
petitioner having submitted two different
completion status pertaining to the construction of
Kalpana Chawla Government Medical College,
Karnal. It is also submitted that the petitioner does
not fulfill the eligibility criteria under Clause 4.5(A)
(b)(i)(ii), Clause 4.5(D) and Clause 4.7, hence, the
Respondent No. 3 had requested the Respondent
No. 2 to consider this aspect of the matter and for
that purpose, it had filed a representation dated
13.12.2019. Upon a query made by the
Respondent No. 2, the Respondent No. 3 had filed
a letter dated 31.12.2019, furnishing a detailed list
of the ongoing projects of the petitioner company,
which were not included by the petitioner while
calculating the available bid capacity under Clause
4.7 of the NIT. It is stated that by concealing the
list of ongoing works for the purposes of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
calculation of bid capacity, the petitioner has
proportionately increased its bid capacity illegally.
Thereafter, the meeting of the Technical Evaluation
Committee was again conducted on 03.01.2020 to
discuss and pass order on the objection/
clarification filed by the bidders on the aforesaid
decision dated 13.12.2019, whereafter the
Respondent No. 2, after consulting an independent
Tax Consultant, had declared the petitioner to be
non-responsive under Clause 4.5(D) stating that
the petitioner had incurred losses in four financial
years, which is more than two financial years
during the immediate last seven consecutive
financial years ending 31.03.2019. It is also stated
that though the petitioner was required to submit
the consolidated profit and loss financial statement
under Clause 4.5(D) of the NIT but the petitioner
company did not do so inasmuch as it had suffered
losses in the financial years 2013-14 to 2016-17,
which is more than two financial years in the last
seven financial years i.e. contrary to the
requirement under Clause 4.5(D) of the NIT.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Reference has also been made to Section 129(3) of
the Companies Act, 2013, which mandates
preparation of consolidated financial statement of
the company where there is one or more
subsidiaries / associated companies. It is next
stated that the petitioner company has four wholly
owned subsidiaries company and is also having its
associate company, therefore, the petitioner was /
is mandatorily required to comply with the
Accounting Standard-110 and ought to have
submitted the consolidated financial statement as
per the companies (Indian Accounting Standard)
Rules, 2015, as far as presentation and preparation
of consolidated financial statements are
concerned. Reference has also been made to the
circular issued by the Central Public Works
Department dated 10.1.2020, which requires a
bidder to submit both standalone and consolidated
financial statements and the same is applicable
and valid for all tenders, which have been invited
but not finalized.
25. The learned counsel for the Respondent No. 3
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
has also raised the issue regarding grounds
available for the purposes of judicial review and
matters relating to award of contracts. It is
contended that modern trend points to judicial
restraint in administrative action inasmuch as the
Court is concerned primarily, as to whether there
has been any infirmity in the decision making
process since the Court does not have the
expertise to correct the administrative action and
moreover, quashing of the administrative decisions
may lead to imposition of heavy administrative
burden on the administration and may also lead to
increase in unbudgeted expenditure. It is also
submitted that a writ court is not required to
interfere with the decision making process in cases
where the process adopted or decision made by
the authority is not mala fide or not intended to
favor someone or is not arbitrary and irrational. In
this regard, the learned counsel for the Respondent
No. 3 has referred to a judgment rendered by the
Hon'ble Apex Court in the case of Jagdish Mandal
vs. State of Orissa, reported in (2007) 14 SCC
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
517, paragraph nos. 22 whereof is reproduced
herein below:-
"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 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
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
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
succour to thousands and millions and may
increase the project cost manifold. 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 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.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Cases involving blacklisting or imposition of
penal consequences on a tenderer/ contractor
or distribution of State largesse (allotment of
sites/shops, grant of licences, dealerships and
franchises) stand on a different footing as
they may require a higher degree of fairness
in action."
26. The learned counsel for the Respondent No. 3
has also argued regarding the requisites for the
purposes of testing the issue of malafide and the
issue of irrationality. It is stated that interference in
the decision making process is not called for only
on account of error in assessment, procedural
aberration and prejudice to a tenderer so long as
the decision relating to award of contract is bona
fide and in public interest. It is submitted that a
mere disagreement with the decision making
process or the decision of the administrative
authority is no reason for a constitutional court to
interfere. Reference in this connection has been
made to a judgment rendered in the case of Silppi
Constructions Contractors vs. Union of India,
reported in (2020) 16 SCC 489. The learned
counsel for the Respondent No. 3 has also referred
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
to a Judgment rendered by the Hon'ble Apex Court
in the case of Bharat Coking Coal Ltd. &
Others vs. AMR Dev Prabha & Others,
reported in (2020) 16 SCC 759, with regard to
the well-settled law that before a constitutional
court interferes with the decision making process
or the decision itself, it should come to a
conclusion that such decision / decision making
process has been attended with malafides,
intention to favour someone, arbitrariness,
irrationality or perversity.
27. The learned counsel for the Respondent No. 3
has further contended that the petitioner has failed
to challenge the original decision of the Technical
Tender Committee of the Respondent No. 2 dated
13.12.2019 and has only challenged the
consequential order dated 3.1.2020, hence, on this
ground alone, the present writ petition is fit to be
dismissed. It is stated that the order dated
13.12.2019 ended with inviting objections to the
decisions of the Technical Tender Committee and
the same was directed to be placed again before
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
the Technical Tender Committee for consideration
of the objections. It said-" mij of.kZr fufonk ls lEcaf/kr fdlh
izdkj ds vH;[email protected] izkIr gksus ij iqu% rdfudh lfefr ds le{k yk;k
tk;. It is thus apparent that what was being
considered on 03.01.2020 were the "vH;[email protected]"
on the decision of the Technical Tender Committee
dated 13.12.2019 and not the entire tender once
again. This is further apparent from the opening
lines of the minutes of meeting of the Technical
Tender Committee dated 3.1.2020. It states "fufonk
lfefr dh cSBd fnukad 13.12.2019 esa dfri; fu.kZ; fy, x,".
This makes it clear that the orders passed in the
meeting of Technical Tender Committee dated
13.12.2019 were not "recommendations" but
"decision" [fu.kZ;]. Further, the meeting dated
3.1.2020 was only for considering the objections
on the decisions arrived at in the meeting dated
13.12.2019 which included rejection of the bid of
the petitioner for not fulfilling the condition
stipulated in Clause 4.5(A)(b) and the Technical
Tender Committee did not change its decision
taken on 13.12.2019 vis-à-vis the petitioner and it
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
also found its bid to be additionally non-responsive
on account of not fulfilling the condition stipulated
in Clause 4.5D. Thus it was/ is imperative for the
petitioner to have challenged the order dated
13.12.2019 and not only the consequential order
dated 03.01.2020. There is also no merger of
administrative order and in absence of challenge
to the original order dated 13.12.2019, there can
be no challenge to the consequential order dated
3.1.2020 and the writ application is fit to be
dismissed for this reason alone.
28. It is next submitted by the learned counsel for
the Respondent No. 3 that the entire argument of
the petitioner is focused on the minutes of meeting
dated 3.1.2020 and the additional ground of
rejection of its bid i.e. being non-responsive to
Clause 4.5(D) of the Instruction to Bidders.
Nonetheless, the said argument is being made only
with a view to sideline the issue relating to non-
fulfillment of the condition prescribed in Clause
4.5(A)(b) of the Instruction to Bidders, which the
petitioner has failed to fulfill and for which its bid
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
has been rejected by the minutes of meeting dated
13.12.2019, which has not been challenged by the
petitioner till date. It is submitted that in
compliance of Clause 4.5(A)(b)(i), the petitioner
had furnished three certificates of completion i.e.
one pertaining to completion certificate of AIIMS,
Bhopal, the other relating to completion certificate
of AIIMS, Rishikesh and the third relating to
completion certificate of Kalpana Chawla
Government Medical College, Karnal, Haryana. As
per Clause 4.5(A)(b)(ii), the condition was that the
bidder must have "satisfactory completion" in India
as a prime contractor during the last seven years
ending last day of the month previous to the
month of date of tender i.e. 31 July, 2019
construction of:-
Three works of similar nature in India each
costing not less than 40% (forty percent) of
the estimated cost of this project.
"Or"
Two works of similar nature in India each
costing not less than 60% (sixty percent) of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
the estimated cost of this project.
"Or"
One work of similar nature in India each
costing not less than 80% (eighty percent) of
the estimated cost of this project.
It is stated that for Clause 4.5(A)(b)(ii),
petitioner furnished 7 certificates and none fulfilled
the requirement of Clause 4.5(A)(b)(ii), inasmuch
as 3 certificates were issued for works that were
completed in the month of December, 2011, June,
2012 and July, 2011 thus were beyond the 7 year
period preceding base date of 31.7.2019, whereas
2 of the projects for which certificate were issued
did not fulfill the requirement of 40% of the
contract value, while 2 certificates showed that the
work was not of "similar nature" as the composite
work of HVAC and plumbing, electrical was not part
of the project. Thus, it is apparent that the
petitioner did not fulfill the requirement of Clause
4.5(A)(b) and its bid was non-responsive to the
clauses of the tender.
29. Now coming to the issue regarding fulfillment
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
of the requirement of Clause 4.5(D) of the
Instruction to Bidders by the petitioner, the learned
counsel for the Respondent No. 3 has submitted
that once the technical evaluation committee
invited objections from various persons on its
decision dated 13.12.2019, the Respondent No. 3
had raised its objection on 13.12.2019 to the bid
proposal of the petitioner stating that the
Petitioner has several wholly owned subsidiaries
and on a consolidated basis had suffered losses for
the past 4 consecutive years i.e loss of Rs 1061
lakhs in the FY 2013-14, loss of Rs 2429 lakhs in
the FY 2014-15, loss of Rs 6941 lakhs in the FY
2015-16 and loss of Rs. 4185 lakhs in the FY 2016-
17, however it had claimed no loss on the basis of
standalone balance sheet, as such it did not fulfill
the requirement of Clause 4.5D. It is contended
that a stand-alone balance-sheet of the parent/
holding company will never give the right picture
of the financial liabilities unless one looks at the
consolidated balance-sheet. Even though the
subsidiaries are separate legal entities from their
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
holding company yet the two need to be
considered as single economic entity and
consolidated balance sheet is the accounting
relationship between the holding company and its
subsidiaries which show the status of the entire
business enterprise. Shares in subsidiary
companies are held as assets on the books of the
holding company and can be issued as a collateral
to raise fund. It is also submitted that the new
Companies Act, 2013 was introduced on the basis
of the report of Dr. Jamshed J. Irani Committee.
One of the major concerns of the Irani Committee
was to bring about transparency in the accounting
linkages between the Holding and its Subsidiary
companies. The committee encountered siphoning
of funds from one company to another including to
and from subsidiaries and to control the misuse, it
sought "adequate disclosure obligations as to
utilization of the funds raised or loans and
advances given by the company to another entity.
Strict disclosure and compliance norms in respect
of holding and subsidiary company were
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
prescribed. Mandatory Disclosure norms were also
prescribed and failure to disclose the details of
transactions between the Holding company and
subsidiaries was recommended to be Visited with
penalty. The committee noticed diversion of fund
through subsidiaries and it was noticed by the
committee that self regulation was not working
and thus was of the opinion that necessary checks
and balances were required to be put in place as a
statutory mandate. The Committee recommended
mandatory consolidation of financial statements of
subsidiaries with those of holding Company.
30. It is next submitted that Companies
(Accounting Standard) Rules, 2006 was Gazetted
on 07/12/2006 by Notification GSR 739(E). AS-21
deals with procedure for preparing "Consolidated
Financial Statement". The objective of the AS-21 is
self-revealing inasmuch as these statements are
intended to present financial information about a
parent and its subsidiary(ies) as a single economic
entity to show the economic resources controlled
by the group. The argument of the petitioner that
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
JMC is a separate entity from its subsidy is an
argument to skirt around the purpose of the clause
4.5D. There can be no quarrel with the proposition
that Holding company is a separate legal entity
from its Subsidiaries but when it comes to looking
at the financial strength and economic resources at
the disposal of a legal entity then the true mirror is
the consolidated balance sheet. It is apparent that
though the Petitioner is not in loss in any of the
past seven years on a standalone basis but the
moment the balance-sheet of the subsidiaries are
consolidated with that of the Petitioner it is
continuously in loss from 2013-14 to 2016-17. This
shows the deep financial linkages between the
Petitioner and its subsidiaries. It is submitted that
the argument of the Petitioner that as there is no
specific requirement of furnishing the Consolidated
return, the tendering authority was under
obligation to look into stand-alone returns and not
consolidated balance sheet is a facile argument.
Silence of the tender document does not mean
that the tendering authority cannot look into
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
consolidated balance-sheet. Thus the doctrine of
separate entity cannot be used to hoodwink the
tendering authority into allotting a tender to an
entity which is, admittedly, bleeding on account of
subsidiaries and in the context of the purpose of
Clause 4.5D of the tender document the relevant
Balance-Sheet is the "Consolidated" Balance sheet
and not standalone balance sheet. There is nothing
wrong in the action of the Technical Tender
Committee to look into the Consolidated Balance
sheet especially when there is admission on the
part of Petitioner that it has suffered losses on
consolidated basis.
31. The learned counsel for the Respondent No. 3
has also submitted that the petitioner has withheld
information about seven of its ongoing projects
worth Rs. 7517 crores, which will definitely
materially affect the bid capacity of the petitioner,
hence, the petitioner is required to be disqualified
on this ground alone as also on the ground of
furnishing misleading and false information as per
the mandate of Clause 4.8 of Instruction to
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Bidders. It is submitted that the petitioner has
admitted that it did withhold information and has
explained that the same is bona fide and
inadvertent mistake. Thus, it is submitted that
since the petitioner has admitted supplying
misleading statements, its bid has rightly been
rejected vide the minutes of meeting dated
3.1.2020 under Clause 4.8 of the Instruction to
Bidders.
32. The learned counsel for the Respondent No. 3
has also submitted that Clause 4.5(D) and 4.5(A)
(b) of the Instruction to Bidders are mandatory
conditions, being essential terms of eligibility and
there can no argument of their substantial
compliance. The conditions have to be met in toto
and strictly and there can be no relaxation of the
terms of essential qualification. In this regard, the
learned counsel for the Respondent no. 3 has
referred to a judgment rendered by the Hon'ble
Apex Court in case of Vidarbha Irrigation
Development Corporation vs. Anoj Kumar
Garwala, reported in 2019 SCC Online SC 89,
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
paragraphs no. 15 to 17 whereof are reproduced
herein below:-
"15. The law on the subject is well settled.
In Bakshi Security and Personnel Services Pvt.
Ltd. v. Devkishan Computed Pvt. Ltd., (2016)
8 SCC 446, this Court held:
"14. The law is settled that an essential
condition of a tender has to be strictly
complied with. In Poddar Steel
Corpn. v. Ganesh Engg. Works [Poddar
Steel Corpn. v. Ganesh Engg.
Works, (1991) 3 SCC 273] this Court held
as under: (SCC p. 276, para 6)
"6. ... The requirements in a tender
notice can be classified into two
categories--those which lay down the
essential conditions of eligibility and
the others which are merely ancillary
or subsidiary with the main object to
be achieved by the condition. In the
first case the authority issuing the
tender may be required to enforce
them rigidly. In the other cases it must
be open to the authority to deviate
from and not to insist upon the strict
literal compliance of the condition in
appropriate cases."
15. Similarly in B.S.N. Joshi & Sons
Ltd. v. Nair Coal Services Ltd. [B.S.N.
Joshi & Sons Ltd. v. Nair Coal Services
Ltd., (2006) 11 SCC 548] this Court held
as under: (SCC pp. 571-72, para 66)
"(i) if there are essential conditions,
the same must be adhered to;
(ii) if there is no power of general
relaxation, ordinarily the same shall
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
not be exercised and the principle of
strict compliance would be applied
where it is possible for all the parties
to comply with all such conditions
fully;
(iii) if, however, a deviation is made in
relation to all the parties in regard to
any of such conditions, ordinarily
again a power of relaxation may be
held to be existing;
(iv) the parties who have taken the
benefit of such relaxation should not
ordinarily be allowed to take a
different stand in relation to
compliance with another part of
tender contract, particularly when he
was also not in a position to comply
with all the conditions of tender fully,
unless the court otherwise finds
relaxation of a condition which being
essential in nature could not be
relaxed and thus the same was wholly
illegal and without jurisdiction;
(v) when a decision is taken by the
appropriate authority upon due
consideration of the tender document
submitted by all the tenderers on their
own merits and if it is ultimately found
that successful bidders had in fact
substantially complied with the
purport and object for which essential
conditions were laid down, the same
may not ordinarily be interfered with;
..."
16. We also agree with the contention of
Shri Raval that the writ jurisdiction
cannot be utilised to make a fresh
bargain between parties."
16. However, learned counsel appearing on
behalf of the appellant strongly relied
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
upon Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corpn. Ltd., (2016) 16 SCC 818,
and paragraphs 14 and 15 in particular, which
state:
"14. We must reiterate the words of
caution that this Court has stated right
from the time when Ramana Dayaram
Shetty v. International Airport Authority
of India [Ramana Dayaram Shetty v.
International Airport Authority of India,
(1979) 3 SCC 489] was decided almost
40 years ago, namely, that the words
used in the tender documents cannot be
ignored or treated as redundant or
superfluous -- they must be given
meaning and their necessary
significance. In this context, the use of
the word "metro" in Clause 4.2(a) of
Section III of the bid documents and its
connotation in ordinary parlance cannot
be overlooked.
15. We may add that the owner or the
employer of a project, having authored
the tender documents, is the best person
to understand and appreciate its
requirements and interpret its
documents. The constitutional courts
must defer to this understanding and
appreciation of the tender documents,
unless there is mala fide or perversity in
the understanding or appreciation or in
the application of the terms of the tender
conditions. It is possible that the owner
or employer of a project may give an
interpretation to the tender documents
that is not acceptable to the
constitutional courts but that by itself is
not a reason for interfering with the
interpretation given."
17. It is clear even on a reading of this
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
judgment that the words used in the tender
document cannot be ignored or treated as
redundant or superfluous - they must be
given meaning and their necessary
significance. Given the fact that in the present
case, an essential tender condition which had
to be strictly complied with was not so
complied with, the appellant would have no
power to condone lack of such strict
compliance. Any such condonation, as has
been done in the present case, would amount
to perversity in the understanding or
appreciation of the terms of the tender
conditions, which must be interfered with by a
constitutional court."
Thus, it is submitted that the argument of the
petitioner regarding substantially complete
certificates of the AIIMS, Rishikesh, AIIMS Bhopal
and that of Kalpana Chawla Medical Hospital,
Karnal, is fit to be rejected inasmuch as any
attempt to relax the conditions would imply
reading such clauses into the tender document,
which are not there. There cannot be any implied
terms in a tender and the essential conditions have
to be read strictly.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
33. Now coming to the next argument advanced
by the petitioner regarding violation of principles of
natural justice, the learned counsel for the
Respondent No. 3 has submitted that the earlier
concept that non-observance of natural justice was
said to be prejudice in itself to the person affected,
and proof of prejudice and independent proof of
denial of natural justice, was held to be
unnecessary, has undergone a complete change
and the Hon'ble Apex Court has held that natural
justice is a tool to rectify injustice, if any, caused to
a party. Courts apply it where a party has actually
been prejudiced, not where natural justice would
be an empty formality i.e where a party does not
dispute facts against it and is deemed to be borne
by estoppels, acquiescence or waiver or where
only one conclusion is possible, the court would not
insist on futile exercise of natural justice. It has
been held that it is for the court to assess the
likelihood of prejudice. In this regard, the Ld.
counsel has referred to a judgment rendered by
the Hon'ble Apex Court in the case of State of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
U.P. vs. Sudhir Kumar Singh, reported in 2020
SCC Online SC 847, paragraphs no. 29 to 31, 33,
34, 35, 39(3), 39(4) to 39(5) whereof are
reproduced herein below:-
"29. Equally, the prejudice that is caused,
apart from natural justice itself being denied,
cannot be said to be present in a case in
which there are admitted facts. Thus, in K.L.
Tripathi v. State Bank of India (1984) 1 SCC
43, the Court held:
"29. We are of the opinion that Mr. Garg
is right that the rules of natural justice as
we have set out hereinbefore implied an
opportunity to the delinquent officer to
give evidence in respect of the charges
or to deny the charges against him.
Secondly, he submitted that even if the
rules had no statutory force and even if
the party had bound himself by the
contract, as he had accepted the Staff
Rule, there cannot be any contract with a
Statutory Corporation which is violative
of the principles of natural justice in
matters of domestic enquiry involving
termination of service of an employee.
We are in agreement with the basic
submission of Mr. Garg in this respect,
but we find that the relevant rules which
we have set out hereinbefore have been
complied with even if the rules are read
that requirements of natural justice were
implied in the said rules or even if such
basic principles of natural justice were
implied, there has been no violation of
the principles of natural justice in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
respect of the order passed in this case.
In respect of an order involving adverse
or penal consequences against an officer
or an employee of Statutory
Corporations like the State Bank of India,
there must be an investigation into the
charges consistent with the
requirements of the situation in
accordance with the principles of natural
justice as far as these were applicable to
a particular situation. So whether a
particular principle of natural justice has
been violated or not has to be judged in
the background of the nature of charges,
the nature of the investigation
conducted in the background of any
statutory or relevant rules governing
such enquiries. Here the infraction of the
natural justice complained of was that he
was not given an opportunity to rebut
the materials gathered in his absence.
As has been observed in On Justice by
J.R. Lucas, the principles of natural
justice basically, if we may say so,
emanate from the actual phrase "audi
alteram partem" which was first
formulated by St. Augustine (De Duabus
Animabus, XIV, 22 J.P. Migne, PL. 42,
110).
xxx xxx xxx
32. The basic concept is fair play in
action administrative, judicial or quasi-
judicial. The concept of fair play in action
must depend upon the particular lis, if
there be any, between the parties. If the
credibility of a person who has testified
or given some information is in doubt, or
if the version or the statement of the
person who has testified, is, in dispute,
right of cross-examination must
inevitably form part of fair play in action
but where there is no lis regarding the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
facts but certain explanation of the
circumstances there is no requirement of
cross-examination to be fulfilled to justify
fair play in action. When on the question
of facts there was no dispute, no real
prejudice has been caused to a party
aggrieved by an order, by absence of
any formal opportunity of cross-
examination per se does not invalidate
or vitiate the decision arrived at fairly.
This is more so when the party against
whom an order has been passed does
not dispute the facts and does not
demand to test the veracity of the
version or the credibility of the
statement.
33. The party who does not want to
controvert the veracity of the evidence
from record or testimony gathered
behind his back cannot expect to
succeed in any subsequent demand that
there was no opportunity of cross-
examination specially when it was not
asked for and there was no dispute
about the veracity of the statements.
Where there is no dispute as to the facts,
or the weight to be attached on disputed
facts but only an explanation of the acts,
absence of opportunity to cross-
examination does not create any
prejudice in such cases."
(emphasis supplied)
31. In the five-Judge Bench decision
in Managing Director, ECIL v. B.
Karnakumar (1993) 4 SCC 727, this Court,
after discussing the constitutional
requirement of a report being furnished under
Article 311(2), held thus:
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
"30. Hence the incidental questions
raised above may be answered as
follows:
xxx xxx xxx
[v] The next question to be answered is
what is the effect on the order of
punishment when the report of the
enquiry officer is not furnished to the
employee and what relief should be
granted to him in such cases. The
answer to this question has to be relative
to the punishment awarded. When the
employee is dismissed or removed from
service and the inquiry is set aside
because the report is not furnished to
him, in some cases the non-furnishing of
the report may have prejudiced him
gravely while in other cases it may have
made no difference to the ultimate
punishment awarded to him. Hence to
direct reinstatement of the employee
with back-wages in all cases is to reduce
the rules of justice to a mechanical
ritual. The theory of reasonable
opportunity and the principles of natural
justice have been evolved to uphold the
rule of law and to assist the individual to
vindicate his just rights. They are not
incantations to be invoked nor rites to be
performed on all and sundry occasions.
Whether in fact, prejudice has been
caused to the employee or not on
account of the denial to him of the
report, has to be considered on the facts
and circumstances of each case. Where,
therefore, even after the furnishing of
the report, no different consequence
would have followed, it would be a
perversion of justice to permit the
employee to resume duty and to get all
the consequential benefits. It amounts to
rewarding the dishonest and the guilty
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
and thus to stretching the concept of
justice to illogical and exasperating
limits. It amounts to an "unnatural
expansion of natural justice" which in
itself is antithetical to justice.
31. Hence, in all cases where the enquiry
officer's report is not furnished to the
delinquent employee in the disciplinary
proceedings, the Courts and Tribunals
should cause the copy of the report to be
furnished to the aggrieved employee if
he has not already secured it before
coming to the Court/Tribunal and give
the employee an opportunity to show
how his or her case was prejudiced
because of the non-supply of the
report. If after hearing the parties, the
Court/Tribunal comes to the conclusion
that the non-supply of the report would
have made no difference to the ultimate
findings and the punishment given, the
Court/Tribunal should not interfere with
the order of punishment. The
Court/Tribunal should not mechanically
set aside the order of punishment on the
ground that the report was not furnished
as is regrettably being done at present.
The courts should avoid resorting to
short cuts. Since it is the Courts/Tribunals
which will apply their judicial mind to the
question and give their reasons for
setting aside or not setting aside the
order of punishment, (and not any
internal appellate or revisional
authority), there would be neither a
breach of the principles of natural justice
nor a denial of the reasonable
opportunity. It is only if the
Court/Tribunal finds that the furnishing of
the report would have made a difference
to the result in the case that it should set
aside the order of punishment."
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
(emphasis supplied)
33. What is important to note is that it is the
Court or Tribunal which must determine
whether or not prejudice has been caused,
and not the authority on an ex parte appraisal
of the facts. This has been well-explained in a
later judgment, namely Dharampal Satyapal
Ltd. v. Dy. Comm. Of Central Excise,
Gauhati (2015) 8 SCC 519, in which, after
setting out a number of judgments, this Court
concluded:
"38. But that is not the end of the
matter. While the law on the principle
of audi alteram partem has progressed
in the manner mentioned above, at the
same time, the courts have also
repeatedly remarked that the principles
of natural justice are very flexible
principles. They cannot be applied in any
straitjacket formula. It all depends upon
the kind of functions performed and to
the extent to which a person is likely to
be affected. For this reason, certain
exceptions to the aforesaid principles
have been invoked under certain
circumstances. For example, the courts
have held that it would be sufficient to
allow a person to make a representation
and oral hearing may not be necessary
in all cases, though in some matters,
depending upon the nature of the case,
not only full-fledged oral hearing but
even cross-examination of witnesses is
treated as a necessary concomitant of
the principles of natural justice. Likewise,
in service matters relating to major
punishment by way of disciplinary
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
action, the requirement is very strict and
full-fledged opportunity is envisaged
under the statutory rules as well. On the
other hand, in those cases where there is
an admission of charge, even when no
such formal inquiry is held, the
punishment based on such admission is
upheld. It is for this reason, in certain
circumstances, even post-decisional
hearing is held to be permissible.
Further, the courts have held that under
certain circumstances principles of
natural justice may even be excluded by
reason of diverse factors like time, place,
the apprehended danger and so on.
39. We are not concerned with these
aspects in the present case as the issue
relates to giving of notice before taking
action. While emphasising that the
principles of natural justice cannot be
applied in straitjacket formula, the
aforesaid instances are given. We have
highlighted the jurisprudential basis of
adhering to the principles of natural
justice which are grounded on the
doctrine of procedural fairness, accuracy
of outcome leading to general social
goals, etc. Nevertheless, there may be
situations wherein for some reason--
perhaps because the evidence against
the individual is thought to be utterly
compelling--it is felt that a fair hearing
"would make no difference"--meaning
that a hearing would not change the
ultimate conclusion reached by the
decision-maker--then no legal duty to
supply a hearing arises. Such an
approach was endorsed by Lord
Wilberforce in Malloch v. Aberdeen
Corpn. [1971] 1 WLR 1578], who said
that : (WLR p. 1595)
"... A breach of procedure ... cannot give
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
[rise to] a remedy in the courts, unless
behind it there is something of
substance which has been lost by the
failure. The court does not act in vain."
Relying on these comments, Brandon L.J.
opined in Cinnamond v. British Airports
Authority [[1980] 1 WLR 582] that : (WLR
p. 593)
"... no one can complain of not being
given an opportunity to make
representations if such an opportunity
would have availed him nothing."
In such situations, fair procedures
appear to serve no purpose since the
"right" result can be secured without
according such treatment to the
individual.
xxx xxx xxx
45. Keeping in view the aforesaid
principles in mind, even when we find
that there is an infraction of principles of
natural justice, we have to address a
further question as to whether any
purpose would be served in remitting the
case to the authority to make fresh
demand of amount recoverable, only
after issuing notice to show cause to the
appellant. In the facts of the present
case, we find that such an exercise
would be totally futile having regard to
the law laid down by this Court in R.C.
Tobacco [(2005) 7 SCC 725]."
(emphasis supplied)
34. In State Bank of Patiala v. S.K. Sharma
(1996) 3 SCC 364, a Division Bench of this
Court distinguished between "adequate
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
opportunity" & "no opportunity at all", & held
that the "prejudice" exception operates more
especially in the latter case. This judgment
also speaks of procedural and substantive
provisions of law which embody the principles
of natural justice which, when infracted, must
lead to prejudice being caused to the litigant
in order to afford him relief...............
xxx xxx xxx
35. In M.C. Mehta v. Union of India (1999) 6
SCC 237, the expression "admitted and
indisputable facts" laid down in Jagmohan
(supra), as also the interesting divergence of
legal opinion on whether it is necessary to
show "slight proof" or "real likelihood" of
prejudice, or the fact that it is an "open and
shut case", were all discussed in great detail
as follows:
"16. Courts are not infrequently faced
with a dilemma between breach of the
rules of natural justice and the Court's
discretion to refuse relief even though
the rules of natural justice have been
breached, on the ground that no real
prejudice is caused to the affected party.
xxx xxx xxx
23. We do not propose to express any
opinion on the correctness or otherwise
of the "useless formality" theory and
leave the matter for decision in an
appropriate case, inasmuch as, in the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
case before us, "admitted and
indisputable" facts show that grant of a
writ will be in vain as pointed out by
Chinnappa Reddy, J."
39. An analysis of the aforesaid judgments
thus reveals:
(1) Natural justice is a flexible tool in the
hands of the judiciary to reach out in fit
cases to remedy injustice. The breach of
the audi alteram partem rule cannot by
itself, without more, lead to the
conclusion that prejudice is thereby
caused.
(2) Where procedural and/or substantive
provisions of law embody the principles
of natural justice, their infraction per
se does not lead to invalidity of the
orders passed. Here again, prejudice
must be caused to the litigant, except in
the case of a mandatory provision of law
which is conceived not only in individual
interest, but also in public interest.
(3) No prejudice is caused to the person
complaining of the breach of natural
justice where such person does not
dispute the case against him or it. This
can happen by reason of estoppel,
acquiescence, waiver and by way of non-
challenge or non-denial or admission of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
facts, in cases in which the Court finds
on facts that no real prejudice can
therefore be said to have been caused to
the person complaining of the breach of
natural justice.
(4) In cases where facts can be stated to
be admitted or indisputable, and only
one conclusion is possible, the Court
does not pass futile orders of setting
aside or remand when there is, in fact,
no prejudice caused. This conclusion
must be drawn by the Court on an
appraisal of the facts of a case, and not
by the authority who denies natural
justice to a person.
(5) The "prejudice" exception must be
more than a mere apprehension or even
a reasonable suspicion of a litigant. It
should exist as a matter of fact, or be
based upon a definite inference of
likelihood of prejudice flowing from the
non-observance of natural justice."
34. It is next submitted by the Ld. Counsel for the
respondent No. 3 that the petitioner has also not
disputed and in fact has admitted the following
facts:-
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
(i) That it has filed standalone balance sheet.
(ii)That it has suffered losses for 4
consecutive years on consolidated basis and
is profitable on standalone basis only.
(iii) The certificates issued by AIIMS Bhopal;
AIIMS Rishikesh show "substantial
Completion" and not full completion.
(iv) Two different certificates with different
remarks for the same date have been issued
by HCC regarding Kalpana Chawla
Government Medical College.
(v) That petitioner has withheld information
with regard to on going work worth Rs. 3203
crores [though the complaint was for
withholding information of work worth Rs.
7517 crores]
(vi) There has been delay on the part of the
petitioner in execution of projects in the past.
Thus it is apparent that the petitioner is not
challenging the veracity of the facts but is only
seeking an opportunity to explain the facts as such
the Petitioner cannot claim that it has been
prejudiced. When facts are admitted, an enquiry
would be an empty formality. Even the principle of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
estoppel will apply here, therefore, even after the
furnishing of the report, since no different
consequence would follow, it would be a pervasion
of justice to permit an opportunity of hearing to the
petitioner. It is only if the Court/ Tribunal finds that
the furnishing of an opportunity of hearing would
have made a difference to the result, then the
order should be set aside. In the present case the
only clause that allows an opportunity to the
bidder, post opening of technical bids, is clause
22.4(ii) and that too postulates correction of
"rectifiable defects". Under no other circumstances
there is any other condition that permits a right to
bidder to be heard. In this connection, the learned
counsel for the Respondent No. 3 has referred to
the following judgments rendered by the Hon'ble
Apex Court:-
(i) Jagdish Mandal vs. State of Orissa And
Others (2007) 14 SCC 517;
(ii) State of Gujarat & Ors. vs. Meghji Pethraj
Shah Charitable Trust & Ors. (1994) 3
SCC 552;
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
(iii) Assistant Excise Commissioner & Ors. vs.
Issac Pater & Ors. (1994) 4 SCC 104;
(iv) Purvankara Projects Ltd vs. Hotel Venus
International & Ors (2007) 10 SCC 33.
35. The learned counsel for the Respondent No. 3
has also submitted that it is a well-settled law that
tenderer /bidder has no other right except the right
to equality and fair treatment in matters of
evaluation of competitive bids. In matters of
administrative orders the claim to the rule of audi
alteram partem is qualified. Further the test laid
down for Judicial Review in tender matters, in so
far as arbitrariness is concerned, is that the
decision is such that no responsible authority
acting reasonably and in accordance with relevant
law could have reached. Hence, it is for the Court
to see if the decision arrived at by the authorities
is such that no responsible authority acting
reasonably would have arrived at. It is stated that
the decision of the Technical Tender Committee
does not involve either a penal, civil or stigmatic
consequence, hence principles of natural justice
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
will not be attracted. Reference in this regard has
been made to the following judgments rendered by
the Hon'ble Apex Court:-
(i) J.R. Vohra vs. India Export House Pvt. Ltd. &
Anr. Para 10 (1985) 1 SCC 712 para 10
(ii) Jagdish Rai Mongha vs. State of Punjab &
Ors. AIR 1983 P&H 33 Paras 20 to 27 & 30
(iii) Andhra Steel Corporation Ltd. vs. A.P.
State Electricity Board & Ors. paras no. 13,
14 & 15.
36. The learned counsel for the Respondent No. 3
has also submitted that in the present case, the
following issues of public interest are involved:-
(i) Should work be given to a bidder with
doubtful financial health and a company
which has heavily invested in loss making
subsidiaries to an extent that it is affecting its
own balance sheet, which has the further
consequence of delay in execution of work
and inter alia leading to price escalation, in
violation of Clause 4.5D.
(ii) Should work be given to someone, as a
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
matter of public policy, who has admittedly
and deliberately tried to withhold information
about seven of its ongoing projects worth Rs.
7517 crores, which will definitely materially
affect the bid capacity of the petitioner under
Clause 4.7.
(iii) should work be given to someone who has
failed to complete even one single
government hospital within time and has no
credential to show except "substantially
complete" certificates.
(iv) Not one certificate has been provided by
the petitioner that fulfills the requirement of
Clause 4.5(A)(b)(i) and Clause 4.5(A)(b)(ii).
Thus, it is submitted that since the present
case involves huge public interest, this Court is
entitled to look into materials beyond what has
been quoted in the impugned minutes of meeting
dated 03.01.2020 of the Technical Tender
Committee of the Respondent No. 2.
37. The learned counsel for the Respondent No. 3
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
has also relied on the judgments rendered by the
Hon'ble Apex Court in the case of Afcon
Infrastructures Ltd. vs. Nagpur Metro Rail
Corporation Ltd. & Anrs., reported in (2016)
16 SCC 818 as also the one rendered in the case
of Siemens Public Communication Networks
(P) Ltd. vs. Union of India & Others, reported
in (2008) 16 SCC 215, to submit that where two
views are possible with regard to decision of the
tender evaluation authority and no mala fide or
arbitrariness is shown, the writ court ought not to
interfere with the decision of the administrative
authority in inviting the tender and interpretation
given by it to a tender document, unless it is
shown that the said understanding is marked by
perversity or malafide. It is also submitted that
the tender issuing authority is the best judge to
appreciate and understand the requirement of
their documents, as such, bidders expertise and
technical capacity can be best judged by the
experts. In this connection, reference has been
made to the judgment rendered by the Hon'ble
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Apex Court in the case of Galaxy Transport
Agencies, Contactors, Traders, Transports
and Suppliers vs. New J.K. Roadways, Fleet
Owners and Transport Contractors and
Others, reported in 2020 SCC Online SC 1035.
Thus, in nutshell, the learned counsel for the
Respondent No. 3 has submitted that the writ court
would not interfere only for the reason that a legal
point has been made out or that the court is in
disagreement with the decision of the authority.
Interference is called for only if alleged malafide
and arbitrariness is proved. Even then the courts
should restrain itself from interfering unless it can
be shown that a substantial or overwhelming
public interest is affected. Further, it is stated that
the petitioner has miserably failed to conclusively
plead and prove the allegation of arbitrariness or
legal malafide.
Contentions of the Ld. Senior Counsel for the
respondent No. 3 in Civil Writ Jurisdiction
Case No. 211 of 2020
38. The Ld. Senior Counsel for the Respondent
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
No. 3 (Larson & Turbo Ltd.) of the second Case, Sri
Chitranjan Sinha, assisted by Sri Aditya Prasad,
Advocate, has fully endorsed and adopted the
views expressed and the arguments advanced by
the learned Senior Advocate, Sri Lalit Kishore,
Advocate General, appearing for the Respondent
No. 2 as also by the learned counsel appearing for
the Respondent No. 3 in the first case, Sri Mrigank
Mauli, Sr. Advocate, however, has submitted that
the writ courts should observe restraint on
administrative action and it should only review the
manner in which the decision has been taken and if
the decision relating to award of contract is
bonafide 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. In this regard,
the Ld. Sr. Counsel for the Respondent No. 3 has
referred to a judgment rendered by the Hon'ble
Apex Court in the case of Consortium of
Titagarh Firema Adler S.P.A.-Titagarh Wagons
Ltd. vs. Nagpur Metro Rail Corpn. Ltd., (2017)
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
7 SCC 486, paragraphs no. 30 and 31 whereof are
reproduced herein below:-
"30. Before we proceed to deal with the
concept of single entity and the discretion
used by the 1st respondent, we intend to deal
with role of the court when the eligibility
criteria is required to be scanned and
perceived by the court. In Montecarlo
Ltd. v. NTPC Ltd., (2016) 15 SCC 272, the
Court referred to Tata Cellular wherein certain
principles, namely, the modern trend pointing
to judicial restraint on administrative action;
the role of the court is only to review the
manner in which the decision has been taken;
the lack of expertise on the part of the court
to correct the administrative decision; the
conferment of freedom of contract on the
government which recognises a fair play in
the joints as a necessary concomitant for an
administrative body functioning in an
administrative sphere or quasi-administrative
sphere, were laid down. It was also stated in
the said case that the administrative decision
must not only be tested by the application
of Wednesbury [Associated Provincial Picture
Houses Ltd. v. Wednesbury Corpn., (1948) 1
KB 223 (CA)] principle of reasonableness but
also must be free from arbitrariness not
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
affected by bias or actuated by mala fides.
The two-Judge Bench took note of the fact
that in Jagdish Mandal v. State of Orissa,
(2007) 14 SCC 517, it has been held that, 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 decisions
in Master Marine Services (P) Ltd. v. Metcalfe
& Hodgkinson (P) Ltd., B.S.N. Joshi & Sons
Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC
548 and Michigan Rubber (India) Ltd., (2012)
8 SCC 216 have been referred to. The Court
quoted a passage from Afcons Infrastructure
Ltd. [(2016) 16 SCC 818] wherein the
principle that interpretation placed to
appreciate the tender requirements and to
interpret the documents by owner or
employer unless mala fide or perverse in
understanding or appreciation is reflected, the
constitutional courts should not interfere. It
has also been observed in the said case that
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
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
interpretation given. After referring to the said
authority, it has been ruled thus:
"26. We respectfully concur with the
aforesaid statement of law. We have
reasons to do so. In the present scenario,
tenders are floated and offers are invited
for highly complex technical subjects. It
requires understanding and appreciation
of the nature of work and the purpose it
is going to serve. It is common
knowledge in the competitive
commercial field that technical bids
pursuant to the notice inviting tenders
are scrutinised by the technical experts
& sometimes third-party assistance from
those unconnected with the owner's
organisation is taken. This ensures
objectivity. Bidder's expertise & technical
capability and capacity must be
assessed by the experts. In the matters
of financial assessment, consultants are
appointed. It is because to check and
ascertain that technical ability and the
financial feasibility have sanguinity and
are workable and realistic. There is a
multi-prong complex approach; highly
technical in nature. The tenders where
public largesse is put to auction stand on
a different compartment. Tender with
which we are concerned, is not
comparable to any scheme for allotment.
This arena which we have referred
requires technical expertise. Parameters
applied are different. Its aim is to
achieve high degree of perfection in
execution and adherence to the time
schedule. But, that does not mean, these
tenders will escape scrutiny of judicial
review. Exercise of power of judicial
review would be called for if the
approach is arbitrary or mala fide or
procedure adopted is meant to favour
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
one. The decision-making process should
clearly show that the said maladies are
kept at bay. But where a decision is
taken that is manifestly in consonance
with the language of the tender
document or subserves the purpose for
which the tender is floated, the court
should follow the principle of restraint.
Technical evaluation or comparison by
the court would be impermissible. The
principle that is applied to scan and
understand an ordinary instrument
relatable to contract in other spheres has
to be treated differently than
interpreting and appreciating tender
documents relating to technical works
and projects requiring special skills. The
owner should be allowed to carry out the
purpose and there has to be allowance
of free play in the joints."
31. In T.N. Generation and Distribution Corpn.
Ltd. v. CSEPDI--Trishe Consortium, (2017) 4
SCC 318, the Court, after referring to Jagdish
Mandal v. State of Orissa, (2007) 14 SCC 517
and taking note of the complex fiscal
evaluation and other aspects, held:
"36. ... At this juncture we are obliged to
say that in a complex fiscal evaluation
the Court has to apply the doctrine of
restraint. Several aspects, clauses,
contingencies, etc. have to be factored.
These calculations are best left to
experts and those who have knowledge
and skills in the field. The financial
computation involved, the capacity and
efficiency of the bidder & the perception
of feasibility of completion of the project
have to be left to the wisdom of the
financial experts and consultants. The
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
courts cannot really enter into the said
realm in exercise of power of judicial
review. We cannot sit in appeal over the
financial consultant's assessment.
Suffice it to say, it is neither ex facie
erroneous nor can we perceive as flawed
for being perverse or absurd."
Thus, it is the submission of the learned
Senior Counsel for the Respondent No. 3 of the
second case that the petitioner has failed to
comply the eligibility conditions mentioned in
Clause 4.5(A)(b) and 4.5(D) of the Instruction to
Bidders and moreover, is required to be declared
non-responsive on account of submissions of false
and misleading information as per Clause 4.8 of
the Instruction to Bidders, thus, it is submitted that
the present writ petition is devoid of any merit,
hence, is fit to be dismissed.
Rejoinder of the Ld. Counsel for the
Petitioner
39. In reply, the learned counsel for the petitioner
of the aforesaid two cases has submitted that the
prayer (a) made in paragraph no. 1 of the writ
petitions in question would show that the
petitioner has prayed to declare that it complies
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
with the eligibility criteria mentioned in Clause
4.5(A) (b) of the Instruction to Bidders, hence,
there is no need to challenge the minutes of
meeting dated 13.12.2019 of the Technical Tender
Committee of the Respondent No. 2. As far as the
issue relating to consideration of the purported
representations/ complaints of the private
respondents is concerned, it is stated that there
was no occasion for considering the same after
conclusion of the meeting of the bid evaluation
committee on 13.12.2019 and in fact, there is no
stipulation in the entire NIT/ITB to the said effect.
As regards, fulfilling the eligibility criteria
stipulated in Clause 4.5(D) of the Instruction to
Bidders is concerned, it has been submitted that
the petitioner has not concealed or misrepresented
any information and since it is a listed company; its
consolidated financial statements are not only
available on its website, but also on the record of
the Ministry of Corporate Affairs. It is reiterated
that losses of subsidiaries and / or associates
companies are not losses of the holding company.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
As regards, compliance of Section 4.7 of the
Instruction of Bidders is concerned, it is submitted
that there is no whisper in the impugned minutes
of meeting about non-providing of details of
several ongoing projects and the same has clearly
been alleged by way of an afterthought. It is
submitted that it is a well-settled law that public
orders, publicly made, in exercise of a statutory
authority cannot be construed in light of
explanations subsequently given by the officer
making the order of what he meant, or of what was
in his mind or what he intended to do. It is also
submitted that the respondent No. 2 never
bothered to seek any explanation from the
petitioner in relation to the allegation made by the
private respondents before arriving at a purported
conclusion that the petitioner has not disclosed
information as required under clause 4.7 of the NIT.
It has also been submitted that in order to qualify
the eligibility criterion prescribed in Clause 4.7 of
the NIT, the petitioner's available bid capacity
should be more than the total bid value, which the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
petitioner fulfills even if additional projects worth
Rs. 4346 crores of ongoing projects are taken into
consideration. The petitioner has furnished a list of
existing commitments and ongoing works with
details in support of eligibility criterion prescribed
in Clause 4.7 of the NIT along with its bid
documents. In terms of the said list the petitioner
has disclosed existing commitments and ongoing
works/ projects worth of Rs. 8560.95 crores and
based thereon the available bid capacity was
calculated and stated to be Rs. 26194.71 crores. It
has been explained on behalf of the petitioner,
without prejudice to its rights and contentions, that
due to continuous extension of the NIT/bid and lack
of proper communication between the head office
officials of the petitioner and the East India officials
who had filled the bid along with the said list,
certain ongoing projects worth Rs. 3203 crores
could not be included in the list of ongoing
projects. It is submitted that non-inclusion of
additional projects worth Rs. 3203 crores in no
manner affects the qualification prescribed in
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Clause 4.7 of the NIT, therefore, the said non-
inclusion by no stretch of imagination can be
construed to be any false or misleading
information as stated in Clause 4.8 of the NIT.
40. The learned counsel for the petitioner has
further submitted that the issue raised in the
counter affidavit by the Respondent No. 2 with
regard to purported delay in completion of other
projects by the petitioner do not find mention in
the impugned minutes of meeting of the Technical
Tender Committee of the Respondent No. 2 dated
13.12.2019 and 03.01.2020 and the same has also
not formed the basis of rejection of the technical
bid of the petitioner, as such, this Hon'ble Court
should not consider the said allegation. In this
regard, it is submitted that while the construction
of the projects for AIIMS, Bhopal was to be
completed within a period of two years, the same
was delayed for reasons not attributable to the
petitioner and the said project stands satisfactorily
completed which is evident from the virtual
completion certificate dt. 16.10.2019. As regards
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
delay in completion of AIIMS, Rishikesh, project, it
is submitted that while the construction was to be
completed within a period of two years, the same
was also delayed for reasons not attributable to
the petitioner, nonetheless, the said project now
stands satisfactorily completed. In any case, it is
stated that the certificate dt. 16.11.2017 issued by
the Superintending Engineer in respect of the
works for AIIMS Bhopal and the certificate dated
31.12.2017 issued in respect of the works for AIIMS
Rishikesh, clearly state that the said works and
defect rectification is in progress. Without prejudice
to the aforesaid, it is submitted that the purported
delay in the execution of the aforesaid projects
(AIIMS Bhopal and AIIMS Rishikesh) cannot form
the basis of rejection of the bid of the petitioner, &
it is clear that Respondent no. 2 is raising the said
ground as an afterthought, in a blatant attempt to
mislead this Hon'ble Court.
41. As regards the office memorandum dated
10.01.2020 issued by the CPWD, it has been
submitted that the same has got no bearing on the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
matter in hand since the eligibility criteria of the
CPWD works manual, wherein the aforesaid
modification has been introduced is not applicable
to the works under the NIT in the present matter
and moreover, the Respondent No. 2 cannot
retrospectively modify the terms and conditions of
the NIT i.e. after the impugned rejection of the bid
of the petitioner on 13.12.2019 / 03.01.2020.
42. Lastly, the Ld. counsel for the petitioner has
submitted that the Court cannot look into
subsequent materials brought on record by way of
counter affidavit to support the decision already
taken and thus has to confine itself to the facts and
reasons given in the impugned order. Reference
has been made to a judgment rendered by the
Hon'ble Apex Court in the case of Mohinder
Singh Gill vs. The Chief Election
Commissioner, reported in (1978) 1 SCC 405 at
page 417.
43. Thus, it is submitted that considering the
facts and circumstances of the case, the impugned
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
decision of the Technical Tender Committee, as
contained in its minutes of meeting dt.
13.12.2019 /3.1.2020, qua the petitioner, is bad in
law as also on facts, hence is required to be set
aside.
Determination
44. I have heard the learned counsel for the
parties and perused the voluminous records of the
aforesaid two writ petitions as also the various
judgments / authorities cited and relied upon by
the learned counsel for the parties. The petitioner
of the aforesaid two cases, by way of the present
writ petition, has sought a declaration to the effect
that it qualifies the criteria laid down in Clause
4.5(A)(b) and Clause 4.5(D) of the instruction to
bidders, contained in the notice inviting tender
dated 10.06.2019 and consequently, has sought
quashing of the minutes of meeting of the
Technical Tender Committee of the Respondent No.
2 dated 03.01.2020 qua the petitioner herein
whereby and whereunder the technical bids of the
petitioner for construction of Government Medical
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
College and Hospital at Begusarai and Buxar,
respectively have been rejected. As far as Clause
4.5 (A)(b) of the instruction to bidders, contained in
the NIT dated 10.06.2019 is concerned, the same
lays down the eligibility criteria required to be
fulfilled by the bidder to the effect that it should
have satisfactorily completed in India as a prime
contractor during the last seven years ending the
last day of the month previous to the month of
date of tender i.e. 31.7.2019, construction of at
least one hospital or composite hospital campus
having College/ Hospital/ Residential Building,
having total cost not less than 40% of the
estimated value of the project put to tender i.e. Rs.
175.20 crores and should have also satisfactorily
completed construction of three works of similar
nature in India each costing not less than 40% of
the estimated cost of the project in question or two
works of similar nature in India each costing not
less than 60% of the estimated cost of the project
or one work of similar nature in India each costing
not less than 80% of the estimated cost of the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
project in question. In this regard, though the
petitioner is stated to have submitted certificates
of completion, issued by HSCC (India) Ltd.,
regarding the work done by the petitioner
pertaining to construction of Hospital/OPD and
other associated works of Kalpana Chawla
Government Medical College at Karnal, Haryana,
however, two certificates dated 27.06.2017 and
31.10.2018 were submitted and while the one
dated 27.06.2017 had certified that the petitioner
has substantially completed the work as on
20.01.2017, the other certificate dated 31.10.2018
has certified that the work has been completed on
20.01.2017, resulting in the Technical Tender
Committee of the Respondent No. 2 finding an
apparent dichotomy in between the said two
certificates dated 27.06.2017 and 31.10.2018,
leading to the bid of the petitioner being held to be
non-responsive vide the minutes of meeting dated
13.12.2019 on the ground that the petitioner has
failed to qualify the criteria laid down in Clause
4.5(A)(b) of the instruction to bidders.
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
45. The learned counsel for the petitioner has
sought to explain the aforesaid aspect of the
matter by submitting that the petitioner had filed a
representation dated 18.12.2019, in response to
the aforesaid observation of the Technical Tender
Committee of the Respondent No. 2 dated
13.12.2019, clarifying that the work towards
construction of KCGMC was completed by the
petitioner before 20.01.2017 and the expression
"substantially completed" used in the certificate
dated 27.06.2017 was used since this certificate
was issued during the pendency of the Defect
Liability Period, even otherwise as per Clause 27 of
the SCC of the HSCC Project, the certificate of final
completion was to be issued only after expiry of
the Defect Liability Period, which expired on
26.06.2018, hence, a certificate of final completion
in terms of Clause 27(b) was issued on 31.10.2018,
certifying that the project was completed on
20.1.2017.
46. As regards the aforesaid issue, this Court
finds that benefit of doubt can be granted to the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
petitioner herein and it cannot be said that the
petitioner had not completed the work of Kalpana
Chawla Government Medical College at Karnal
during the last seven years ending last day of the
month previous to the month of the date of tender
i.e. 31.7.2019 inasmuch as even the second
certificate dated 31.10.2018, issued by the HSCC
(India) Ltd., certifying that the petitioner has
completed the said project on 20.1.2017 is prior to
31.07.2019. Thus, this Court is of the view that the
decision of the Technical Tender Committee of the
Respondent No. 2, as reflected from the minutes of
meeting dated 13.12.2019 to hold the bid of the
petitioner to be non-responsive, is not correct.
47. However, there is another aspect of the matter
inasmuch as the second part of Clause 4.5(A)(b)
requires a bidder to have satisfactorily completed
construction of one/two/three works of similar
nature in India each costing not less than
40%/60%/80% respectively of the estimated cost
of the project and it appears from the records that
the petitioner had furnished two more completion
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
certificates pertaining to AIIMS Bhopal and AIIMS
Rishikesh, however, it is an admitted fact that both
the said projects were not completed within time
and were grossly delayed, which has in fact been
sought to be explained by the petitioner before this
Court, however, no cogent reasons have been
furnished for the undue delay caused by the
petitioner in completing the said projects. In fact,
the Respondent No. 3 of the first case has though
pointed out that for Clause 4.5(A)(b)(ii), the
petitioner furnished 7 certificates but the fact is
that none fulfilled the requirement of Clause 4.5(A)
(b)(ii), inasmuch as 3 certificates were issued for
works that were completed in the month of
December, 2011, June, 2012 and July, 2011, thus
were beyond the 7 year period preceding base
date of 31.07.2019, whereas 2 of the projects for
which certificate were issued did not fulfill the
requirement of 40% of the contract value, while 2
certificates showed that the work was not of
"similar nature" as the composite work of HVAC
and plumbing, electrical was not part of the
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
project. This aspect of the matter has not been
seriously controverted by the petitioner, thus, it is
apparent that the petitioner did not fulfill the
requirement of Clause 4.5(A)(b), hence its bid
was/is non-responsive. Thus, this Court is of the
view that the petitioner having not qualified the
eligibility condition/criteria prescribed in Clause
4.5(A)(b) of the instruction to bidders, contained in
the NIT dated 10.06.2019, cannot be regarded to
be a successful bidder, hence has to be held non-
responsive, consequently, its technical bid is
required to be rejected on this ground alone.
48. Now coming to the next issue regarding the
Technical Tender Committee of the Respondent No.
2, having held that the petitioner does not qualify
Clause 4.5(D) of the NIT, vide its minutes of
meeting dated 03.01.2020, it is the contention of
the Ld. Counsel for the petitioner that the alleged
reasons for rejection of the bid of the petitioner are
based not only on an incorrect appreciation of facts
and applicable legal provisions, but are also
manifestly arbitrary and unreasonable inasmuch as
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
there is no requirement under the NIT or in law, for
a bidder to furnish consolidated financial
statements and / or financial statements of its
subsidiaries for the purpose of demonstrating
eligibility to bid under the NIT and the only
requirement is to provide standalone financial
statement / balance-sheet, hence, it is the
assertion of the Ld. Counsel for the petitioner that
the petitioner has not concealed or misrepresented
any information or provided any false / misleading
information to the Respondent No. 2. It is also the
submission of the Ld. Counsel for the petitioner
that a plain reading of Clause 4.5(D) read with
Clause 4.3(f) and other provisions of the NIT would
show that the petitioner was required to furnish its
standalone financial balance sheet to establish
that it is not in losses in more than 2 years in the
past 7 years, however, the said clauses, in no
manner, require the petitioner to submit/furnish its
consolidated balance sheet, hence invocation of
Clause 4.8 is wholly illegal, misconceived and
clearly smacks of malafide to oust the petitioner
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
with a view to ultimately favor the already
declared technically qualified bidders. It has also
been submitted that it is wrong on the part of the
Respondent No. 2 to say that the petitioner has
"incurred losses" during four consecutive financial
years namely financial years 2013-14 to 2016-17,
inasmuch as the same ignores the fact that the
petitioner company is a different and distinct legal
entity from its subsidiary companies, and the
profits and/or losses of its subsidiaries cannot be
conflated along with those of the petitioner for the
purpose of evaluating eligibility to bid under the
NIT.
49. This Court finds that Clause 4.5(D) of the NIT
stipulates that a bidder should not have incurred
any loss in more than two years during the
immediate last seven consecutive financial years
ending 31.03.2019. The issue for consideration, in
this regard, is that while it is the contention of the
petitioner that taking into account its standalone
financial statement/ balance-sheet, it has not
incurred any loss in the immediate last seven
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
consecutive financial years ending 31.03.2019, on
the contrary it is the allegation of the Respondent
No. 2 that a bare perusal of the consolidated
financial statement of the petitioner company
would show that it had incurred losses during four
consecutive years out of the last seven years i.e.
during FY 2013-2014, FY 2014-2015, FY 2015-2016
and FY 2016-2017, which has been suppressed by
the petitioner. The respondent No.2 is stated to
have sought opinion from an independent
Chartered Accountant, whereupon it had opined as
follows:- "with respect to analysis of consolidated
financial status of JMC Projects (India) Ltd.,
Ahmedabad regarding its profitability, earning per
share (EPS) and Tax implication should be
considered on the basis of consolidated financial
results and not standalone financial statement. As
per AS-21 (Accounting Standard) consolidated
financial result includes financial of subsidiary
company, associate enterprises and joint venture
of the company. It is mandatory as per MCA and
SEBI guidelines and investment loss under Income
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Tax Act". Thus the Ld. Sr. Counsel for the
respondent No.2 has submitted that the petitioner
company fails to fulfill the technical eligibility
criteria as laid in Clause 4.5 (D) of the tender
documents.
50. With respect to the aforesaid issue regarding
qualifying the criteria laid down in Clause 4.5 (D) of
the NIT, this Court finds that reference has been
made by the learned counsel for the petitioner to
Section 129 of the Companies Act, 2013, which
also stipulates that all the listed and unlisted
companies, having one or more subsidiaries,
including associate companies and joint ventures
must compulsorily prepare the consolidated
financial statements and the said concept of
Consolidated Financial Statement was brought with
an objective of achieving the true and fair view of
reporting the position of the company for the
financial year, since the consolidated financial
statements are generally considered as primary
financial statements from an economic entity
perspective, whereas the standalone financial
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
statement projects only the position of the
company in its individual performance and does
not provide the true and fair view to the
shareholders about the overall performance of the
company with its subsidiaries. In fact Accounting
Standard-110 also provides that consolidated
financial statement is required to be mandatorily
compiled in preparation of financial statement and
accounting policies. The petitioner is stated to be
having 4 (four) 100% subsidiaries and has
associates with 49.57 % holding, hence, in the
case of holding company, the financial health can
only be derived after consolidation of financial
statements of the subsidiaries and associates. This
Court also finds that the Technical Tender
Committee of the respondent No. 2 had analyzed
the standalone financial statements and
consolidated financial statements of the petitioner,
whereafter it was of the view that the standalone
EPS was positive and EPS derived on the basis of
consolidated financial statement was negative
from the financial year 2013-14 to 2016-17. Thus,
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
this Court is of the view that the employer i.e the
respondent No.2 in the present case, is duty bound
to ensure that the bidder is sound from all corners,
hence, if the Respondent No. 2 has considered the
financial health of the petitioner company in
totality along with its subsidiaries, in order to
satisfy itself with regard to the right picture of the
financial liabilities of the petitioner company, there
is nothing wrong in it and in fact, the Respondent
No. 2 has in the process found out that the
petitioner company is in a bad shape on account of
its subsidiaries, which poorly reflects on the
financial health of the petitioner company, hence,
the Technical Tender Committee has rightly held
that the petitioner does not fulfill / qualify Clause
4.5(D) of the NIT dated 10.6.2019. Thus the
decision of the Technical Tender Committee of the
Respondent No. 2 to hold the petitioner guilty for
submitting misleading / false information, in light
of Clause 4.8 of the instruction to bidders, cannot
be faulted with, consequently this Court finds that
the bid of the petitioner has rightly been rejected
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
by the Technical Tender Committee of the
Respondent No. 2 on this ground as well.
51. The reliance of the Ld. Counsel for the
petitioner on the judgment rendered by the
Hon'ble Apex Court in the case of Zoom
Developers (P) Ltd. & Others (supra) is of no
help to the petitioner inasmuch as paragraph no.
31 thereof also makes it obligatory on behalf of the
holding company to annex to its balance-sheet, the
balance-sheet and profit and loss account and
other financial particulars of its subsidiary as per
Section 212 of the Companies Act, 1956, which the
petitioner company has failed to do, while
submitting its bid. As far as reliance has been
made on the judgment rendered by the Hon'ble
Apex Court in the case of Vodafone
International Holding B.V. (supra) is concerned,
the same is also of no help to the petitioner
inasmuch as there is no dispute to the proposition
of law that the liability of a company to pay income
tax is determined on the basis of its standalone
financial statements alone, however, the concern
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
in the present case is about the financial health of
the petitioner company, which can only be
determined by considering the consolidated
financial statements. As far as the judgment,
rendered by the Hon'ble Apex Court in the case of
Monarch Infrastructure (P) Ltd. (supra) is
concerned, this Court finds that the law laid down
in the said judgment is in fact against the
petitioner inasmuch as the Hon'ble Apex Court has
held that the authority calling the tenders is the
best judge to decide whether the conditions, which
can be prescribed, are better than what were
prescribed earlier. This Court finds that in the
present case, neither any tender condition has
been modified nor amended, whereas on the
contrary, the employer of the project in question
i.e. the Respondent No. 2 has given its
interpretation to the tender documents according
to its understanding. In fact, the Hon'ble Apex
Court in the case of Afcon Infrastructures Ltd.
(supra) has clearly held that administrative
decisions ought not to be interfered with merely on
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
account of disagreement with the decision making
process or decision of the authorities and since 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, a writ court should rely on
the understanding of the owner / employer of a
project and appreciate the terms and conditions of
the tender documents, but unless there is malafide
or perversity in the understanding or appreciation
or in the application of the terms of the tender
conditions, the decision-making process or the
decision itself should not be interfered with.
52. The next issue raised by the petitioner is
regarding the Technical Tender Committee having
rejected the bid of the petitioner vide minutes of
meeting dated 03.01.2020, on the basis of a
purported enquiry stated to have been conducted
by the Respondent No. 2, upon representations
received from the rival bidders of the petitioner as
well as based on a purported opinion obtained
from a Chartered Accountant, none of which were
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
ever put to the petitioner during the process of
evaluation of its bid, resulting in gross violation of
the principles of natural justice. In this regard, this
Court finds that firstly, there is no provision in the
entire NIT including the instruction to bidders,
providing for an opportunity of hearing to the
bidder in question, before rejection of its bid and
the only clause that allows an opportunity to the
bidder, post opening of technical bids, is Clause
22.4 (ii) of the NIT and that too, postulates
correction of "rectifiable defects" only. Thus, there
is no prescription in the NIT that permits a right to
the bidder to be heard. Secondly, no prejudice has
been caused to the petitioner inasmuch as it has
not disputed the factual allegations levelled
against it, either by the rival bidders or by the
respondent No.2, hence, insistence on futile
exercise of natural justice would be an empty
formality. Reference in this regard be had to a
judgment rendered by the Hon'ble Apex Court in
the case of Sudhir Kumar Singh (supra). This
Court would also refer to the judgments rendered
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
by the Hon'ble Apex Court in the case of Jagdish
Mandal (supra), Meghji Pethraj Shah
Charitable Trust & Ors. (supra) and the one
rendered in the case of Purvankara Projects
Ltd. (supra). At this juncture, this Court would also
gainfully refer to the well-settled law that
tenderer/bidder has no other right except the right
to equality and fair treatment in matters of
evaluation of competitive bids. Further, the test
laid down for Judicial Review in tender matters, in
so far as arbitrariness is concerned, is that the
decision is such that no responsible authority
acting reasonably and in accordance with relevant
law could have reached. Hence, it is to be seen, as
to whether the decision arrived at by the
authorities is such that no responsible authority
acting reasonably would have arrived at. In fact,
the decision of the Technical Tender Committee
does not involve either a penal, civil or stigmatic
consequence, hence principles of natural justice
will not be attracted. Reference in this regard is
made to the judgments rendered by the Hon'ble
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
Apex Court in the case of J.R. Vohra (Supra),
Jagdish Rai Mongha (Supra) and the one
rendered in the case of Andhra Steel
Corporation Ltd. (Supra). Consequently, this
Court holds that there has been no violation of the
principles of natural justice in the present case.
53. As regards reference made by the learned
counsel for the petitioner to the judgment
rendered by the Hon'ble Apex Court in the case of
Mahabir Auto Stores & Others (supra), this
Court finds that the same is clearly distinguishable
in the facts and circumstances of the case
inasmuch as the Hon'ble Apex Court was dealing
with a case wherein the transaction between the
parties were carrying on for nearly two decades
and the Indian Oil Corporation had allegedly
changed its policy and on that basis, had sought to
bring an end to the dealings and transactions
between the parties.
54. Moreover, the present case is not a case
where the action of the Respondent No. 2 is not fair
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
or is arbitrary or is not judicially sound, hence, the
decision making process of the Respondent No. 2
does not require any interference. This Court also
finds that the decision making process of the
Respondent No. 2 is neither mala fide nor is
intended to favor anyone and the normal rules of
the game, as provided for in the NIT dated
10.6.2019 have been strictly followed by the
Respondent No. 2, thus, the decision of the
Respondent No. 2, rejecting the technical bid of the
petitioner, does not require any interference,
especially in view of the well-settled law to the
effect that the principles of judicial review is
concerned with reviewing not the merits of the
decision in support of which the application for
judicial review is made, but the decision making
process itself and further in light of the inherent
limitations laid down by the Hon'ble Apex Court in
exercise of the power of judicial review by the
Constitutional Courts to the effect that judicial
restraint should be maintained in administrative
action, the Court should not sit as a Court of
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
appeal but should merely review the manner in
which the decision was made since the Court does
not have the expertise to correct the
administrative decision and permitting the review
of the administrative decision would be permitting,
substituting its own decision, without the
necessary expertise, which itself may be fallible
and moreover, if the decision relating to award of
contract is bona fide and is in public interest,
Courts should not exercise power of judicial review
and should not interfere even if a procedural
aberration or error in assessment or prejudice to a
tenderer, is made out. Reference in this connection
be had to the judgment rendered by the Hon'ble
Apex Court in the case of Consortium of
Titagarh Firema Adler S.P.A.-Titagarh Wagons
Ltd. (supra) and the one rendered in the case of
Tata Cellular (supra). Reference be also had to
the judgments rendered by the Hon'ble Apex Court
in the case of Silppi Constructions Contractors
(supra), Bharat Coking Coal Ltd. (supra),
Vidarbha Irrigation Development Corporation
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
(supra) and the one rendered in the case of
Siemens Public Communication Networks (P)
Ltd. (supra).
55. It would be apt to refer to a recent judgment
rendered by the Hon'ble Apex Court in the case of
N.G. Projects Limited Vs. Vinod Kumar Jain &
Ors., reported in 2022 SCC OnLine SC 336,
paragraph Nos. 17, 23 and 25 to 27, whereof are
reproduced herein below:-
"17. Therefore, the position of law with regard
to the interpretation of terms of the contract
is that the question as to whether a term of
the contract is essential or not is to be viewed
from the perspective of the employer and by
the employer. Applying the aforesaid position
of law to the present case, it has been the
contention of respondent No. 1 that the
format for bank guarantee was not followed
strictly by the State and that the relaxation
given was not uniform, in that respondent No.
1 was singled out. The said contention has
found favour with the Courts below.
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
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
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
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
work.
25. In view thereof, we find that the action of
the respondent in setting aside the letter of
acceptance granted to the appellant suffers
from manifest illegality and cannot be
sustained. Consequently, the appeal is
disposed of with a direction to the respondent
State to allow the appellant to resume and
complete the work by excluding the period
spent in the stay of execution of the contract.
26. A word of caution ought to be mentioned
herein that any contract of public service
should not be interfered with lightly and in
any case, there should not be any interim
order derailing the entire process of the
services meant for larger public good. The
grant of interim injunction by the learned
Single Bench of the High Court has helped no-
one except a contractor who lost a contract
bid and has only caused loss to the State with
no corresponding gain to anyone.
27. We also find that multiple layers of
exercise of jurisdiction also delay the final
adjudication challenging the grant of tender.
Therefore, it would be open to the High Courts
or the Hon'ble Chief Justice to entrust these
petitions to a Division Bench of the High
Court, which would avoid at least hearing by
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
one of the forums."
56. This Court is conscious of the later judgment
dated 18.05.2022, rendered by the Hon'ble Apex
Court in Civil Appeal No. 4140 of 2022 [Special
Leave Petition (C) NO. 7150 of 2022], in the case of
Jai Bholenath Construction Vs. The Chief
Executive Officer, Zilla Parishad, Nanded &
Ors., however, the ratio of the said case is not
applicable in the present case inasmuch as in the
said case, the Respondent No. 4 therein had been
declared eligible in flagrant violation of principles
of natural justice and all fairness in the process of
determining the eligibility of the tenderers and the
bid of the said Respondent No. 4 was accepted
when at the time of opening of technical bids, the
said respondent was disqualified, thus it was held
that the manner in which the bid had been
accepted, shows arbitrary exercise of power.
57. Now coming to the end, this Court finds that
serious allegations have been levelled against the
petitioner of having suppressed details regarding
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
existing commitments and ongoing works
inasmuch as the Respondent No. 2, after receipt of
the representation from the participating bidders,
had thoroughly examined details of existing
commitment and ongoing works, uploaded by the
petitioner company on the website of Bombay
Stock Exchange, and it was found that the
petitioner company has itself declared the details
of the projects awarded to it via press release but
the same were not uploaded by the petitioner
company in their tender documents submitted to
the respondent No. 2, which is a mandatory criteria
as per the provisions laid down in Clause 4.7 of the
tender document, obviously with a deliberate
intention to conceal its bid capacity. The
respondent No. 2 has also alleged that details of
several projects have not been furnished by the
petitioner company, which are worth
approximately Rs. 4346 crores. This aspect of the
matter has not been seriously contested by the
petitioner and in fact the petitioner has admitted
that due to continuous extension of the NIT/bid and
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
lack of proper communication between the head
office officials of the petitioner and the East India
officials who had filled the bid along with the said
list, certain ongoing projects worth Rs. 3203 crores
could not be included in the list of ongoing
projects. Therefore, this Court finds that the bid of
the petitioner has rightly been rejected, in light of
Clause 4.8 of the Instruction to Bidders, inasmuch
as the petitioner company has provided false/
misleading information since it has not submitted
the correct details of existing commitment and
ongoing works.
58. Having regard to the facts and circumstances
of the aforesaid two cases and for the reasons
mentioned hereinabove, this Court finds that the
petitioner has miserably failed to make out any
case so as to warrant any interference in the
decision of the Technical Tender Committee of the
Respondent No. 2 contained in its minutes of
meeting dated 13.12.2019 and 03.01.2020, qua
the petitioner herein, hence, both the aforesaid
Patna High Court CWJC No.208 of 2020 dt.11-08-2022
writ petitions stand dismissed, being devoid of any
merit.
(Mohit Kumar Shah, J)
Ajay/-
AFR/NAFR AFR
CAV DATE 24.07.2021
Uploading Date 11.08.2022
Transmission Date NA
