WPMS/1650/2021
2022 Latest Caselaw 3782 UK

                                          Reserved Judgment

      IN THE HIGH COURT OF UTTARAKHAND
                  AT NAINITAL

         THE HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI
                                AND
          THE HON'BLE SRI JUSTICE RAMESH CHANDRA KHULBE


                Date of hearing : 25.08.2022
                Date of Judgment : 24.11.2022

             WRIT PETITION (M/S) NO. 1650 OF 2021


Between:

Dinesh Chandra Patni                       ......         Petitioner

and

State of Uttarakhand & others             ......         Respondents

Counsel for the petitioner : Mr. Abhijay Negi, learned counsel

Counsel for the respondents : Mr. Pradeep Joshi, learned Additional Chief Standing Counsel

: Mr. S.S. Chauhan, learned counsel

: Mr. Subhash Upadhyay, learned

The Court made the following:

JUDGMENT: (per Hon'ble The Chief Justice Sri Vipin Sanghi)

The petitioner has preferred the present writ

petition to assail the decision of the Executive Director,

WAPCOS Limited, i.e, respondent No. 2, vide which the

petitioner's technical bid, in respect of the tender invited

by the respondents for construction of Naugaon to

Selakot-Kane-Rikhad-Mehragaon Motor Road, Stage II,

under Package No. UT01-05 was rejected, and the

respondents proceeded to open the financial bids of

respondent Nos. 3 and 4. The petitioner also seeks a

mandamus commanding the respondent No. 2 to open

the financial bid of the petitioner, and to award the

contract to the petitioner. By way of amendment, the

petitioner also introduced the relief of quashing of the

award of the contract in favor of respondent No. 3 on

17.08.2021.

2) The case of the petitioner is that the aforesaid

construction project, with five years maintenance, was

planed to be undertaken under the Pradhan Mantri Gram

Sadak Yogana (PMGSY) in June 2020. For carrying out

of the work under the said project, the contractor had to

be appointed through a bidding process based on the

model standard bidding document as notified for the

PMGSY. On 03.07.2021, the tender in question was

published by the WAPCOS. The estimated cost of the

construction work was Rs. 900.27 lakhs, and the

estimated cost of maintenance for five years was Rs.

82.59 lakhs. The period of completion was stipulated as

nine months. The bids were open for On-line submission

till 01:00 P.M. on 28.07.2021. The bid opening was

fixed on the same day, i.e., 28.07.2021, at 03:00 P.M.

3) Under the bidding process, once the technical

bids of the bidders were opened, the rival bidders were

permitted to raise objections and point out lacunae in

the technical bids of the other competitors / bidders.

Respondent No. 3, i.e., M/s Bisht Construction, was also

one of the bidders and it raised three complaints in

respect of the petitioner's technical bid. The petitioner's

submission is that these objections were entertained,

despite the Bid Evaluation Committee declaring the

petitioner and three others, including respondent No. 3,

to be qualified in terms of Clause 22.5 of the Instructions

to Bidders (ITB). The complaints made by respondent

No. 3 qua the petitioner's technical bid were considered

by the Bid Evaluation Committee, and on that basis, the

petitioner was declared to be technically disqualified

along with one other bidder. At the end of the said

exercise, only two bidders were declared to be

technically qualified, namely, M/s Bisht Construction,

i.e., respondent No. 3, and M/s Parwatiya Construction.

The deficiencies / lacunae pointed out by respondent No.

3 in the petitioner's technical bid, and the decision taken

by the Bid Evaluation Committee on those lacunae /

complaints, are contained in the minutes of the meeting

of the Bid Evaluation Committee held on 16.08.2021. The

relevant extract of the said minutes reads as follows:

"(C) Name of the complainer : - Bisht Construction

M/s Dinesh Chandra Patni:

1 We have a Complaint regarding a uploaded On checking the bid again, it is found No. 08 the bidder has undated in Project that the information provided by the Name - Reconstruction of Kunalta M/R that bidder M/s Dinesh Chandra Patni at the Date of issue of Work Order is Page No.-8 does not match with the 21/11/2017 and Stipulated date of information given in the certificate Completion is 20/02/2017 which is not issued by the Executive Engineer. possible. Thereby the Certificate is unsatisfactory and wrong. Complaint is found correct and thus invokes the Clause 4.7(i) of ITB, Section-2 of SBD of false representation in the statement and the Complaint is hereby resolved by Dis-Qualifying M/s Dinesh Chandra Patni.

2 Also, in Page No-33 the bidder has not On checking the bid again, uploaded a relevant document since the Complaint is found correct. certificate is of another Package Bid Id. The accurate Package Id. UT0105/XXI(RP) and the bidder has shown: UT01105/XXI (RP) thereby the certificate is irrelevant and not acceptable.

3 And also, in Pg No.197, 198 the bidder has Bid is re-viewed and it is found that not sealed his signature, in the Balance bidder has not signed and stamped Sheet which make the Bidder certificate the Balance sheet of year 2020-21. unacceptable and there is difference in Signatures of owners of the firm are Financial Documents of 2018 & 2019. compulsory on Balance Sheet and Profit & Loss Statements. It is found that owner of firm M/s Dinesh Chandra Patni has not signed and stamped on Balance Sheet and Profit & Loss Statement, making the Balance Sheet as in-valid.

Also, Balance Sheet of year 2018-19 provided by bidder in his bid is incomplete. Part of form 3CD has not been uploaded by bidder after page 158 of his bid.

As per the requirement of Clause 4.2(f) of ITB of SBD, Reports on the financial standing, Profit & Loss statements and Auditor's Report for the past 03 financial years are required to be submitted by the Bidder.

As per the findings on re-view of bid, 02 years Financial Data essential for Eligibility Criteria is incomplete (FY 2018-19) and in-valid (FY 2020-21) as per the requirement and thus fails to fulfill the Eligibility Criteria as per Clause 4.2 (f) of ITB of SBD.

Complaint is found correct and hereby resolved by Dis-Qualifying M/s Dinesh Chandra Patni.

4) The petitioner submits that the lacunae

pointed out / complaints made by respondent No. 3 qua

the petitioner's technical bid were ill-founded, and the

findings recorded by the Bid Evaluation Committee on

the said complaints / lacunae, are factually erroneous.

The petitioner has dealt with each of the lacunae and the

findings returned by the Bid Evaluation Committee in its

petition.

5) Mr. Negi, learned counsel for the petitioner

submits that so far as the first complaint / lacuna

contained in the aforesaid tabulation is concerned, the

same related to the certificate produced by the petitioner

to show satisfactory completion of other similar works.

Mr. Negi submits that under Clause 4.4 A of the ITB, to

qualify for award of the contract, each bidder was

required to, in the last five years, inter alia, have

satisfactorily completed - "as prime Contractor or sub-

contractor, at least one similar work equal in value to

one-third in case of Naxal / LWE effected districts) of the

estimated cost of work (excluding maintenance cost for

five years) for which the bid is invited, or such higher

amount as may be specified in the Appendix to ITB. The

value of road work completed by the bidder under

Pradhan Mantri Gram Sadak Yojana in originally

stipulated period of completion shall be counted as

120% for the purpose of this Sub-Clause." The

aforesaid condition is found in Clause 4.4 A(b) of the

ITB.

6) The case of the petitioner is that since the

estimated cost of the work was Rs. 900.27 lakhs,

excluding the maintenance work, in terms of the

aforesaid instruction the bidders were required to

produce certificates of having satisfactorily completed as

either prime contractor, or sub-contractor, at least one

similar work equal in value of Rs. 300.09 lakhs. Mr. Negi

submits that the petitioner provided certificates of two

earlier executed similar works along with its bid. The

tabulation showing the work performed as the prime

contractor / similar nature work, which accompanied the

petitioner's bid, reads as follows :

"WORK PERFORMED AS THE PRIME CONTRACTOR / SIMILAR NATURE WORK

Project Name of Description of Value Contract Date Stipulated Actual Remark Name Employer work of no. of date date explaining contract issue of completion reason of completion for delay, work order if any

Re- Program 1. Hill Site Cutting 1219.34 144-UDRP/ 21.11.2017 20.02.2017 20.02.2019 Due to construction Manager 2. Massonary work Lac PWD/07/RD/ Variation of UDRP (R&B) including RR(1:5), 120 Dated Kunalta / Executive RR(1:3), RR Dry 14.11.2017 Motor Road Engineer ETC World Bank 3. WBM Work Division PWD 4. Bituminous Munsyari Course

5. Road Safety Work Re- Program 1. Hill Site Cutting 1468.39 109-UDRP/ 03.12.2015 09.03.2017 25.12.2017 Due to construction Manager 2. Massonary work Lacs PWD/ 09 / Variation of Jainti Pipli- UDRP (R&B) including RR (1:5), (50% 01/RD/115 Valka-Motor / E.E. World RR(1:3), RR Dry share in Dated Road Bank ETC joint 03.12.2015 Division PWD 3. WBM Work venture) Nainital R. Bituminous Course

5. Road Safety Work

7) The petitioner also provided the requisite

experience certificates issued by the employer concerned

in respect of the aforesaid works. One experience

certificate was issued by the Executive Engineer, World

Bank Division, PWD, Munsyari dated 05.07.2019, and

the second certificate was issued on 05.03.2018, again

by the Executive Engineer, World Bank Division, PWD,

Nainital. According to the experience certificate, in

relation to the first work, i.e. for reconstruction of

Kunalta Motor Road, the value of the work executed was

certified as Rs. 1219.34 lakhs with the date of start

being 21.11.2017; the stipulated date of completion

being 20.02.2019 and; the actual date of completion

being 26.05.2019. The second certificate dated

05.03.2018 was in respect of the work of reconstruction

of Jainti-Pipli-Valka Motor Road for Rs. 1468.39 lakhs

with the date of work issue being 03.12.2018; stipulated

date of completion being 09.08.2017 and; the actual

date of completion being 28.12.2017.

8) Mr. Negi submits that due to a typographical

error in relation to the work executed for reconstruction

of Kunalta Motor Road, in the tabulation filed by the

petitioner, the stipulated date of completion, and the

actual date of completion, were wrongly typed as

20.02.2017 and 20.02.2019 whereas, they should have

read as 20.02.2019 and 26.05.2019, respectively. Mr.

Negi submits that, firstly, the said minor typographical

error was inconsequential, since the petitioner had

provided the actual experience certificate dated

05.07.2019 which contains the correct dates of start of

the work; stipulated date of completion of the work,

and; actual date of completion of the work. He submits

that the bidders are not to be tested for minor

typographical errors which may creep into the

documents prepared and submitted, and which have no

material bearing on the technical bid of the bidder. He

further submits that even if the respondents took

cognizance of the complaints made by respondent No. 3

qua the typographical error of the dates in the

tabulation, at the highest, the said experience claimed

by the petitioner of reconstruction of Kunalta Motor Road

could have been ignored. He submits that since the

stipulation in the ITB was only for submission of, at

least, one earlier executed similar work, the second work

executed by the petitioner, namely, reconstruction of

Jainti-Pipli-Valka Motor Road was itself sufficient to

enable the petitioner to qualify, inasmuch as, the value

of the contract of the said work was Rs. 1468.39 lakhs,

which was well beyond Rs. 300.09 lakhs stipulated by

the respondents in Clause 4.4 A(b) of the ITB. He points

out that the work actually executed by the petitioner was

in excess of the value of the contract, i.e., Rs. 1488.32

lakhs. Mr. Negi, therefore, submits that the first reason

recorded by the Bid Evaluation Committee for rejection

of the petitioner's technical bid was completely

misplaced. He further submits that invocation of Clause

4.7(i) of the ITB, Section 2 of SBD by the Bid Evaluation

Committee was completely misplaced. The said Clause

4.7(i) reads as follows:

"4.7 Even though the bidders meet the above qualifying criteria, they are subject to be disqualified if they have:

i) made misleading or false representations in the forms, statements, affidavits and attachments submitted in proof of the qualification requirements; and/or"

9) He submits that a typographical error in the

tabulation submitted by the petitioner could not be

classified as, either misleading, or a false representation

by the petitioner, inasmuch as, the said typographical

error was immaterial and the petitioner had provided the

experience certificates on the basis of which the

tabulation was prepared and submitted. There was

nothing for the petitioner to be gained by introducing the

typographical error in relation to the stipulated date of

completion, and the actual date of completion, in

relation to the work relating to reconstruction of Kunalta

Motor Road. For a statement to be termed as

misleading or a false representation, the same should

convey such a state of affairs, as does not exist, and

which has the effect of misleading the receiver of the

statement into taking a decision which he / she would

not have otherwise taken had the correct facts been

placed before him / her. In the present case, it would

have been evident to anyone, who would have gone

through the tabulation submitted by the petitioner, that

the dates mentioned therein qua the work experience

relating to Kunalta Motor Road work were wrongly typed

as the stipulated date of completion could possibly not

have been prior to the date of issue of the Work Order.

Moreover, the actual experience certificate containing

the correct dates was also placed on the record along

with the tabulation, leaving no scope for anyone getting

misled by the petitioner. The petitioner, therefore, could

not have been disqualified with the allegation of the

petitioner having misled or misrepresented the

respondent No. 2, only on account of a typographical

error in the tabulation submitted by the petitioner.

10) Mr. Negi submits that, similarly, the second

objection raised by the respondent No. 3, M/s Bisht

Construction, was equally merit-less. The objection was

in relation to the undertaking given by the petitioner

which reads as follows:

"If the work Namely Construction and Maintenance of Naugaon to Selakot-Kane-Rikhad- Mehragaon Motor Road Stage-II with 5 years Maintenance under PBMC. Identification No: - UT01105/XXI [RP] is awarded to us then we will establish a field laboratory in a site for spot testing and checking."

was that the identification No. typed in the said

undertaking was UT01105/XXI (RP), whereas, the

Package No. of the work under the tender was

"UT0105/XXI (RP)". Thus, it appears that due to

typographical error one extra digit '1' was typed while

typing the Package No. / Identification number. Mr.

Negi submits that since an undertaking was submitted in

response to the tender in question, it was obvious - that

the undertaking related to the work under the tender in

question. Mere introduction of one extra digit, i.e., '1'

would not tantamount to the petitioner not uploading the

relevant document / certificate / undertaking.

12) Mr. Negi submits that respondent No. 3 did

not even submit the undertaking sought by the

respondent authorities, yet the bid of respondent No. 3

has been held to be responsive. He submits that the

petitioner was much better off, since the petitioner

submitted the undertaking with a small and obvious

typographical error in the undertaking which, under the

terms of the ITB, should have been ignored as the

respondent authorities are required to assess - whether

the bid is substantially responsive, or not?

13) In relation to the third objection / lacunae -

that the petitioner-bidder has not affixed his signature in

the balance-sheet, and that there is difference in the

financial documents of 2018 and 2019, the submission of

Mr. Negi is that the balance-sheet of the petitioner, as

on 31.03.2021, submitted with the tender bears the

seal, stamp and signature of the Chartered Accountant

with the UDIN number. He submits that the petitioner

had affixed his signature wherever the name of the

petitioner occurs. Mr. Negi submits that Clause 19 in

Section 2 - Instructions to Bidders, and Standard

Bidding Document for PMGSY, provides for electronic

submission of bids. The same, inter alia, requires - "All

the documents are required to be signed digitally by the

bidders. After electronic online bid submission, the

system generates a unique bid identification number

which is time stamped. This shall be treated as

acknowledgement of bid submission".

14) Mr. Negi submits that the petitioner complied

with the aforesaid Clause and submitted a digitally

signed bid, which is considered as a duly signed

document, in law. There was, therefore, no need to

separately affix signatures manually, on each page of

the bid document by the petitioner. In this regard he

has drawn our attention to the petitioner's bid, which

shows that the petitioner had affixed the digital

signature on the document on 27.07.2021, at 05:52

P.M. Mr. Negi submits that, since the petitioner's bid

was duly digitally signed, the petitioner was issued the

bid ID, bearing No. 475740, upon submission of the bid

on 27.07.2021, at 05.54 P.M., duly acknowledging the

submission of bid.

15) Mr. Negi further relies on Clause 25.1. The

same reads as follows:

"25. Examination of Bids and Determination of Responsiveness

25.1 During the detailed evaluation of "part-I of Bids", the Employer will determine whether

each Bid (a) meets the eligibility criteria defined in Clauses 3 and 4; (b) has been properly signed; (c) is accompanied by the required securities; and (d) is substantially responsive to the requirements of the bidding documents. During the detailed evaluation of the "Part-II of Bids", the responsiveness of the bids will be further determined with respect to the remaining bid conditions, i.e., the priced bill of quantities, technical specifications and drawings.

25.2 A substantially responsive "Financial Bid"

is one which conforms to all the terms, conditions, and specifications of the bidding documents, without material deviation or reservation. A material deviation or reservation is one (a) which affects in any substantial way the scope, quality, or performance of the Works: (b) which limits in any substantial way, inconsistent with the bidding documents, the Employer's rights or the Bidder's obligations under the Contract; or (c) whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids.

25.3 If a Bid is not substantially responsive, it will be rejected by the Employer, and may not subsequently be made responsive by correction or withdrawal of the nonconforming deviation or reservation."

(emphasis supplied)

16) Mr. Negi submits that under the ITB, the

employer, i.e., the respondent authorities have to

examine - whether the bid submitted by the bidder is,

inter alia, "substantially responsive to the requirement of

the bidding documents". He submits that the

respondents have not stated as to how the petitioner's

bid is not considered to be substantially responsive. He

submits that a hyper technical approach adopted by the

respondents to disqualify the petitioner is not in terms of

the ITB, and the spirit of the tendering process. He

submits that the respondents by adopting a hyper

technical approach have curtailed competition, which is

the primary objective of inviting bids from qualified

bidders.

17) In response to the charge that the petitioner

did not submit the complete balance-sheet for the year

2018-19, as the Form 3CD was not submitted by the

petitioner, Mr. Negi submits that even respondent No. 3

did not submit the said Form. He submits that if, on

that ground, the petitioner's bid was considered as

incomplete, the same reasoning would apply to the bid

of respondent No. 3. The respondent authority cannot

discriminate between the two bidders, and the same

standards of evaluation have to be applied to all the

bidders. The fact that the bid of respondent No. 3 was

not considered to be incomplete on account of non-

submission of Form 3CD, shows that the respondents did

not consider the submission of Form 3CD as essential,

and its absence could not lead to consideration of the

balance-sheet, as incomplete.

18) Mr. Negi has also referred to Clause 4.2 of the

ITB, which requires the bidders to - "include the

following information and documents with their bids in

Section 2 Quantification Information unless otherwise

stated in the Appendix to ITB:

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) ...

(c) ...

(d) ...

(e) ...

(f) reports on the financial standing of the Bidder, such as profit and loss statements and auditor's reports for the past three years;

(g) ...

(h) ...

(i) ...

(j) ...

(k) ..."

(emphasis supplied)

19) Mr. Negi submits that the use of the

expression, "such as" shows that the respondents

required the bidders to submit "reports on the financial

standing of the bidder". However, the requirement of

submission of profit and loss statement, and auditor's

reports for the past three years, is only by way of

illustration, and not mandatory. There was no indication

that the Forms forming part of the balance-sheet are

also required to be submitted. He submits that there are

several Forms which form part of the balance-sheet and

Form CD is only one of them.

20) Mr. Negi relies upon the bid submitted by

respondent No. 3, which has been filed by the petitioner

along with the rejoinder affidavit. Mr. Negi submits that

respondent No. 3 did not file its auditor's report, let

alone Form 3CD. Mr. Negi, therefore, submits that the

respondent No. 3 has no legs to stand on, while claiming

that the petitioner had failed to submit Form 3CD with

the balance-sheet. In this regard he has drawn our

attention to the averments contained in paragraphs 11

and 12 of the rejoinder affidavit, which have not been

responded to by respondent No. 3. In the said

paragraphs the petitioner has, inter alia, stated as

follows:

"11. That the contents of paragraph 14 are not admitted and hence denied. It is humbly submitted that the third respondent is trying to mislead the Hon'ble Court with regard to the requirement of Form 3CD under Section 44AB of the Income Tax Act, 1961. Form 3CD was never specifically asked anywhere in the Standard Bidding Document or in the Instructions to Bidders. If all documents for the purpose of tax calculation are to be assumed as essential criteria for making any bid, then there are several other forms that any taxpayer fills for the purposes of Income Tax Act, which then assume essential qualification for every bidding document, this would be the position if the logical conclusion is drawn from the averments drawn from paragraph 14 of the counter affidavit. The auditor's report was asked for and the auditor's report was provided by the petitioner's company. Furthermore, the answering respondent, who has not even submitted his (2018-2019) report, cannot point fingers at the petitioner's bid.

12. That the contents of paragraph 15 are not admitted and hence denied. Form 3CD may be a statement of particulars, but as rightly pointed out by the answering respondent himself, it is required to be furnished under Section 44AB of the Income Tax Act. The present dispute before the Hon'ble Court is not a tax dispute, it is a dispute with regard to the arbitrary rejection of the petitioner's bid. Furthermore, just because Form 3CD is a detailed document, this alone does not makes it an essential criteria of the Standard Bidding Document. It is ironic and astonishing to note that the third respondent is making lengthy submissions about Form 3CD after having not submitted its complete Form 3CD. This can be clearly ascertained from a mere perusal of the bid submitted

by the third respondent. Paragraph 53 of the writ petition is not misleading in any way and therefore, the petitioner has not committed any fault as per the Standard Bidding Document. Petitioner has submitted more information on Form 3CD than the answering respondent. If all requirements of the IT Act are compulsory, then the answering respondent stands to strict proof to adhere all of them himself, before questioning the petitioner which he has not done."

21) Mr. Negi has placed reliance on the judgment

of the Supreme Court in Reliance Energy Ltd. and

another Vs Maharashtra State Road Development

Corporation Ltd. and others, (2007) 8 SCC 1, and in

particular, on paragraphs 36 and 37, relevant extracts

wherein, reads as follows:

"36. ..."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 economics reforms introduced after

1992 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 stand alone 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.

37. In Union of India v. International Trading Co., (2003) 5 SCC 437, the Division Bench of this Court speaking through Pasayat, J. had held: (SCC p. 445, paras 14-15) "14. It is trite law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.

15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basis requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial

review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualised than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness."

(emphasis supplied)

22) Mr. Negi has also placed reliance on the

judgment of the Punjab and Haryana High Court at

Chandigarh in M/s Sushil and Company Vs Food

Corporation of India and others, Civil Writ Petition No.

21056 of 2014, decided on 14.01.2015.

23) Mr. Pradeep Joshi, the learned Additional Chief

Standing Counsel for the State, has defended the action

of the respondents. He has placed reliance on Clause

4.7 of the ITB, which states that even though the

bidders may meet the qualifying criteria, they are

subject to be disqualified if they have, inter alia, - "made

misleading or false representations in the forms,

statements, affidavits and attachments submitted in

proof of the qualification requirements".

24) He has drawn our attention to Clause 12.2(d)

of the ITB which, inter alia, requires the bidders to

submit original affidavit regarding correctness of the

information furnished with bid document as per Clause

4.4 B(a)(ii) of the ITB. Clause 4.4 B(a)(ii) requires each

bidder to produce - "an affidavit that the information

furnished with the bid document is correct in all

respects". He submits that the petitioner, however, did

not submit the correct information, inasmuch as, the

information provided by the petitioner in relation to the

project name 'Re-construction of Kunalta M/R',

incorrectly mentioned the date of issue of Work Order

and date of completion. The other infirmities found by

the Bid Evaluation Committee in its meeting held on

16.08.2021, in the petitioner's bid, also tantamounts to

submission of false information by the petitioner.

25) Reliance is also placed on Clause 32.5 of the

ITB which states that the bidder will not directly or

through any person or firm indulge in fraudulent

practice, which is defined to, inter alia, mean, willful

misrepresentation or omission of facts or submission of

fake / forged documents, in order to induce public official

to act in reliance thereof, with the purpose of obtaining

unjust advantage by or causing damage to justified

interest of others and / or to influence the procurement

process to the detriment of the Government interests.

26) He also places reliance on the judgment of the

Supreme Court in M/s N.G. Projects Limited Vs M/s

Vinod Kumar Jain and others, Civil Appeal No. 1846 of

2022, decided on 21.03.2022, wherein the Supreme

Court held that the interference with the awarded

contract relating to construction of roads, which is an

essential part of development of infrastructure in any

State, was wholly unwarranted.

27) In paragraph 23 of this decision, the Supreme

Court observed as follows:

"In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the

execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work."

28) The petition has also been opposed by

respondent No. 3, the contractor to whom the contract

has been awarded. Mr. Upadhyaya, learned counsel for

respondent No. 3, submits that the petitioner has falsely

stated in paragraph 4 of the writ petition - that the

respondent agency opened a portal to invite complaints

from any person / competitive bidder to find genuine

fault in the technical bid as put forward by other

persons. He submits that under the bidding process

itself, it was open to the other bidders to raise their

objections in relation to the bids submitted by the rival

bidders, within five days, as per Clause 22.6, which

reads as follows:

"22.6 The result of evaluation of Part-I of the Bids shall be made public on e-procurement systems following which there will be a period of five working days during which any bidder may submit complaint which shall be considered for resolution before opening Part-II of the bid."

29) In his rejoinder, Mr. Negi has again highlighted

the deficiencies in the bid submitted by respondent No.

3, which have been ignored by the Bid Evaluation

Committee of the respondent authorities. He submits

that respondent No. 3 did not submit the auditor's report

for the years 2020-21 and 2018-19; the Form 3CD filed

by respondent No. 3 was only of one page, and not the

complete Form, and; the Form 3CD submitted by

respondent No. 3 for the financial year 2014-15, was

also incomplete. Mr. Negi further submits that

respondent No. 3 provided incomplete information under

Clause 1.3.1 - "work performed as prime contractor (in

the same name and style) on construction work of a

similar nature and volume over last five years". In

particular, he referred to the work claimed to have been

performed by the respondent No. 3 under the project :

Construction of Rapah to Gangata Motor Road (Stage I &

II), wherein the date of issue of the Work Order has

deliberately been omitted from being mentioned. Mr.

Negi submits that if the same standard of examination

were to be applied to the bid of respondent No. 3, as the

respondent Nos. 1 and 2 have applied to the bid of the

petitioner, respondent No. 3 was also guilty of falsity and

misrepresentation.

30) Before we proceed further, we may notice the

relevant orders passed by this Court in this matter, from

time to time.

31) On 26.08.2021, this Court directed that both

the parties shall maintain status quo in the matter. The

petitioner moved IA No. 03 of 2021, to seek leave to

amend the writ petition on 31.08.2021, to incorporate

the plea that during the pendency of the writ petition,

respondent No. 2 has proceeded to award the contract to

respondent No. 3. Consequently, the petitioner added

the prayer for quashing of the award dated 17.08.2021

in favour of respondent No. 3, and also sought to

implead respondent No. 3, as a party to the proceedings.

The amendment application was allowed by the Court on

02.09.2021. The interim order was directed to be

continued. On 06.04.2022, this Court modified the

interim order dated 26.08.2021, while noticing the

judgment of the Supreme Court in N.G. Projects Limited

(supra). It was provided - that construction of the road

may commence and the petitioner may be compensated

by award of monetary damages, if it was found that he

was wrongly excluded from tender process. Till

17.05.2022, the matter was listed before the learned

Single Judge. Thereafter, since the matter relates to a

tender process, it was listed before the Division Bench.

On 28.07.2022, the petitioner was required to produce a

copy of its complete bid with a supporting affidavit. The

supplementary affidavit was accordingly filed by the

petitioner on 30.07.2022.

32) We heard arguments and reserved judgment

on 02.08.2022. Thereafter, we directed the matter to be

listed on 05.08.2022. On that day, we directed - that

subject to the decision that we render, the financial bid

of the petitioner be opened and the final quotation of the

petitioner as well as of the respondents be placed before

the Court. The respondents were directed to place the

result of the financial bid opening before the Court, and

the matter was adjourned to 17.08.2022. On

17.08.2022, learned counsel for respondent No. 2

sought further time on the ground that NIC has

requested further time to open the financial bid of the

petitioner. However, respondent No. 2, thereafter, filed

an affidavit explaining the difficulties in opening the

financial bid of the petitioner. On 25.08.2022, we took

note of the same. The respondents agreed that the

Court may proceed on the basis of the financial bid

produced by the petitioner before the Court. Counsel for

the petitioner stated that the petitioner would file an

affidavit along with its financial bid. The petitioner has

filed the rejoinder affidavit to the response affidavit of

respondent No. 2 on 25.08.2022. The petitioner has

filed its price bid as filed with the respondent. The

petitioner states that its bid was for Rs. 9,26,32,668.46.

The price bid of respondent No. 3 is Rs. 9,78,79,225.84

and that of respondent No. 4 is Rs. 9,85,55,628.71.

Thus, according to the petitioner, its price bid was lower

than that of respondent No. 3 by Rs. 52,46,557.38.

33) We have heard learned counsels and

considered their respective submissions, as taken note

of here-in-above. We have also considered the decisions

relied upon by learned counsels.

34) The issue that arises for our consideration is -

whether the respondent authorities were justified in

rejecting the technical bid of the petitioner for the

reasons indicated in the minutes of Bid Evaluation

Committee held on 16.08.2021.

35) There is no answer by the respondents to the

submission of Mr. Negi, in relation to the obvious and

clear errors pointed out by Mr. Negi, in the assessment

of the Bid Evaluation Committee. As rightly pointed out

by Mr. Negi, under Clause 4.4 A of the ITB, the past

experience criteria had to be met by the bidder by

establishing that in the last five years it has satisfactorily

completed, as a prime contractor or sub-contractor, at

lease of one similar work equal in value to the estimated

cost of work, for which the bid was invited.

36) Pertinently, the petitioner had given

experience certificates relating to two earlier contracts

executed by it, and there is no discrepancy found by the

respondents in relation to either the experience

certificates, or in relation to the declaration made by the

petitioner in relation to the other work, of which

experience was claimed. The said experience certificate

related to the construction of Jainti-Pipli-Valka Motor

Road, the value whereof was Rs. 1468.39 lakhs, being

fifty percent share of the petitioner in a joint venture.

The said work experience was itself sufficient for the

petitioner to qualify for the work in question since, for

qualification of work in question, the petitioner was

required to show work experience of works aggregating

to Rs. 300.09 lakhs only.

37) A mere typographical error in the tabulation

provided by the petitioner with regard to its past

experience - in relation to the date of completion of one

of the Works cannot be described as a willful mis-

declaration, or a misleading or false representation by

the petitioner. This is for the reason that the petitioner

had not only provided the information in the format

where the typographical error had crept in, but had also

provided the certificates issued by the concerned

employers with regard to the execution and satisfactory

completion of the work. There was nothing to be

achieved by the petitioner by mis-declaring the actual

date of completion, and nothing would have turned on

the same, in any event of the matter. The making of a

misleading or a false representation involves an element

of mens rea or ill-intention. Since, there was nothing to

be gained by making a mis-declaration or false

declaration, or false representation, and the petitioner

had also provided the actual work certificates, there was

no reason for the respondents to invoke Clause 4.7(i) of

the ITB, in the facts of the case. The fact that the

petitioner had provided experience certificates in respect

of two different contracts, and the other work experience

was itself sufficient to qualify the petitioner for the

tender in question, shows that the typographical error in

the statement filed by the petitioner along with its

technical bid in relation to the construction of Kunalta

Motor Road was completely unintentional, and could

certainly not be described as a misrepresentation or

false representation by the petitioner. Thus, the first

reason for disqualifying the petitioner recorded by the

Bid Evaluation Committee is arbitrary and completely

unsustainable.

38) Similarly, the second objection raised by

respondent No. 3, which was sustained by the Bid

Evaluation Committee in its evaluation done on

16.08.2021, is equally specious. The petitioner

furnished the undertaking, the relevant extract whereof

we have extracted in paragraph 10 hereinabove. The

mere typographical error in the Identification Number -

with the introduction of the extra digit '1', did not render

the undertaking unacceptable. The assessment done by

the Bid Evaluation Committee is not to test the typing

skills of a bidder's typist, who may have filled in the bid

forms, declarations and undertakings. Evaluation has to

be done by the Bid Evaluation Committee in a mature

way like commercial men, who possess commonsense,

and with a reasonable approach. To test the stand taken

by the Bid Evaluation Committee, we ask the question :

whether, if the Bid Evaluation Committee were to accept

the undertaking furnished by the petitioner with the

typographical error as contained in it, could the

petitioner have reneged from the said undertaking

subsequently on the ground that the Identification

Number mentioned in the undertaking had an extra digit

'1'? The answer is an obvious 'No'. The undertaking

was furnished by the petitioner in response to the Notice

Inviting Tender in question. Therefore, it obviously

related to the Notice Inviting Tender in question. No

commercial man of prudence would ever adopt the

unreasonable approach, as has been done by the Bid

Evaluation Committee, in the present case. It is clear

that the Bid Evaluation Committee has proceeded with a

view to pick holes in the petitioner's bid, and to

somehow oust the petitioner from further contest on the

basis of its price bid.

39) Clause 25 of the ITB itself lays down the

manner of examination of bids and determination of

responsiveness. The approach to be adopted by the Bid

Evaluation Committee, required it to examine : whether

the bid of the petitioner "is substantially responsive to

the requirement of the bidding documents"? A

substantially responsive financial bid is one, which

conforms to all the terms, conditions and specifications

of the bidding document, without material deviation or

reservation. A material deviation is also defined, to

mean - one which affects in any substantial way the

scope, quality, or performance of the works; limits in

any substantial way, inconsistent with the bidding

documents, the employer's rights or the bidder's

obligations under the contract, or; whose rectification

would affect unfairly the competitive position of other

bidders presenting substantially responsive bids. Thus,

even if the petitioner were to be required to furnish a

fresh undertaking with no typographical errors, the same

would not have resulted in the giving of an opportunity

to remove a material deviation.

40) The defects pointed out by the Bid Evaluation

Committee in the petitioner's technical bid certainly do

not impinge on the substantial responsiveness to the

requirements of the bidding documents. This is so,

because, it is not even claimed by the respondent

authorities, that the petitioner's bid does not conform to

all the terms, conditions and specifications of the bidding

documents, or that there is a material deviation or

reservation. It is not even explained by the Bid

Evaluation Committee in the minutes of its meeting

dated 16.08.2021, or even before us, as to how the

petitioner's bid could be said to be substantially non-

responsive, and why it was not substantially responsive.

Even before us, no endeavour has been made by the

respondents to show, as to what is the substantial non-

responsiveness, or material deviation or reservation in

the petitioner's bid.

41) The purpose of holding either a public auction,

or inviting bids from the public in respect of public works

is to maintain transparency, and to grant Government

largesse in a transparent manner. Its purpose is also to

inculcate more and more competition, so as to secure

the best rates for public works from eligible and

competitive bidders, as that has a direct bearing on the

public exchequer. The purpose is not to pick holes and

find fault with bidders, so as to trip them along way, and

oust them from the race. That would be the objective,

only when the employer / Bid Inviting Authority has pre-

judged the issue, and decided to favour a particular

bidder for award of the contract? The Bid Inviting

Authority is expected to act as a fair umpire, and not to

take sides in the matter of bid evaluation. Its conduct

has to be fair, reasonable and non-discriminatory.

Unfortunately, in the present case, the manner in which

the petitioner's bid was re-evaluated on the basis of the

objection raised by respondent No. 3, shows that the

respondent authorities not only acted unreasonably,

unfairly, and in a non-transparent manner, but also with

discrimination.

42) The discrimination pointed by Mr. Negi

primarily relates to the third objection on which the

petitioner's technical bid was non-suited. The third

objection of respondent No. 3, which was sustained by

the Bid Evaluation Committee on 16.08.2021, relates to;

firstly, the non-signing and non-stamping of the balance-

sheet of the year 2021. The petitioner has explained

that wherever in the bid form, the bidder's name was

mentioned; the bidder had signed and stamped the

document. The balance-sheets are prepared by the

Chartered Accountants, and the petitioner's balance-

sheet, which was provided along with the bid, was duly

sealed, stamped and signed by the Chartered

Accountant with the UDI number.

43) Moreover, the petitioner was required to

submit the electronic bid, and bid documents were

required to be signed digitally by the bidders. The

petitioner did submit a completely digitally signed bid.

Thus, in any event, it could not be claimed that the

petitioner's bid was not signed on any particular

document, such as, the balance-sheet for the year 2020-

21 by the bidder. Moreover, the discrimination resorted

to by the Bid Evaluation Committee in the matter of

evaluation of the petitioner's bid, when compared to the

bid of respondent No. 3, is also writ large. There were

the same lacunae, if not more, in the bid submitted by

respondent No. 3 as pointed out by the petitioner.

Respondent No. 3 did not file its auditor's report, let

alone the Form 3CD. Non filing of the Form 3CD by the

petitioner, along with the balance-sheet for the year

2018-19, was cited as a reason for disqualifying the

petitioner. Even respondent No. 3 had not filed the said

Form 3CD, yet respondent No. 3 was declared to be

technically qualified. The respondent authorities are

expected to maintain a level playing field in the matter

of the treatment meted out to competitors and suitors.

We have taken note of the observations made by the

Supreme Court in Reliance Energy Ltd. (supra) by the

Supreme Court, on this aspect.

44) The respondent authorities have not answered

the charge of discrimination made against them, and

have not explained as to how the bid of respondent No.

3 was held to be technically qualified. When respondent

No. 3 had not filed either the auditor's report, or the

Form 3CD with its balance-sheet, then on the same

ground, how the petitioner was non-suited. Thus, the

discrimination meted to the petitioner is writ large. The

aforesaid conduct of the respondent authorities also

shows that the non-submission of the Form 3CD was not

considered to be a material deviation or reservation by

the bidders. The financial documents submitted by

respondent No. 3 have also been shown to be

incomplete, which is cited as a ground for rejection of

the petitioner's technical bid.

45) For the aforesaid reasons, we are of the view

that the rejection of the petitioner's technical bid was

completely illegal and discriminatory. If the technical bid

of respondent No. 3 was found to be responsive, the

technical bid of the petitioner - by adopting the same

yardstick, could not have been declared non-responsive.

Thus, the exclusion of the petitioner from consideration

of its financial bid, was completely illegal. We have

already taken note of hereinabove, the fact that the

petitioner's financial bid was less than the financial bid of

respondent No. 3 - which was accepted by

Rs. 52,46,557.38. Since the contract in question has

already been awarded to respondent No. 3, and

respondent No. 3 has also been permitted to carry on

the construction work, the only relief that we can grant

to the petitioner, apart from the declarations made

hereinabove, is to compensate the petitioner for the loss

suffered by it, on account of the award of the contract to

respondent No. 3, despite its financial bid being higher

then that of the petitioner by Rs. 52,46,557.38.

46) In A.T. Brij Paul Singh Vs State of Gujarat,

(1984) 4 SCC 59, the Supreme Court interpreted Section

73 of the Contract Act, and held that damages can be

claimed by a contractor when the Government is found

to have committed breach by improperly rescinding the

contractor, and for estimating the amount of damages,

the Court should make a broad evaluation instead of

going into minute details. The Supreme Court in this

decision observed as follows:

"What would be the measure of profit would depend upon facts and circumstances of each case. But that there shall be a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages if the other party to the contract is guilty of breach of contract cannot be gainsaid. In this case we have the additional reason for rejecting the contention that for the same type of work, the work site being in the vicinity of each other and for identical type of work between the same parties, a Division Bench of the same High Court has accepted 15

per cent of the value of the balance of the works contract would not be an unreasonable measure of damages for loss of profit.

* * * Now if it is well established that the respondent was guilty of breach of contract inasmuch as the rescission of contract by the respondent is held to be unjustified, and the plaintiff-contractor had executed a part of the works contract, the contractor would be entitled to damages by way of loss of profit. Adopting the measure accepted by the High Court in the fact and circumstances of the case between the same parties and for the same type of work at 15 per cent of the value of the remaining parts of the works contract, the damages for loss of profit can be measured."

47) To the same effect is the judgment in Mohd.

Salamatullah Vs Government of A.P., (1977) 3 SCC 590.

In both these cases, 15 per cent of the contract price

was awarded as damages to the contractor.

48) The aforesaid two decisions were noticed by

the Supreme Court in Dwaraka Das Vs State of M.P. and

another, (1993) 3 SCC 500.

49) The aforesaid cases were cases, where the

contract has been awarded to the contractor, and the

rescission was found to be illegal. In the present case,

the situation is a little different. The contract has not

been awarded to the petitioner at all. The petitioner has

wrongfully been ousted from consideration, and if the

petitioner had not been so ousted, logically speaking, the

contract would have been awarded to the petitioner,

being the lowest bidder. In the light of the fact that the

contract was not yet awarded to the petitioner, we are

not inclined to adopt the same formula, as adopted in

A.T. Brij Paul Singh (supra), or in Mohd. Salamatullah

(supra), by computing the damages at the rate of 15 per

cent of the price of the contract that the petitioner may

have been awarded. Since the petitioner was not

awarded the contract and, therefore, was not required to

take any steps in pursuance thereof, we are inclined to

limit the damages for wrongful exclusion of the

petitioner in the tendering process to 05 per cent of the

price bid of the petitioner. The petitioner did not have to

undertake any preparatory work, or suffer any

mobilization expenditure. Since the price bid of the

petitioner was Rs.9,26,32,668.46, the damages at the

rate of 05 per cent of the said amount come to

Rs.46,31,633.42, which we award in favour of the

petitioner. These, damages are liable to be paid by

respondent Nos. 1 and 2 to the petitioner.

50) At the same time, respondent No. 3 cannot

seek to take advantage of its higher financial bid, when

the petitioner's financial bid of Rs.9,26,32,668.46 should

have been accepted. We, therefore, direct that the

respondent authorities shall be liable to pay to

respondent No. 3, for the contracted work, an amount of

Rs.9,26,32,668.46, and no more. The petitioner shall

also be entitled to costs quantified to Rs.25,000/- to be

paid by respondent Nos. 1 and 2.

51) The writ petition stands disposed of in the

aforesaid terms.

________________ VIPIN SANGHI, C.J.

___________ R.C. KHULBE, J.

Dt: 24th NOVEMBER, 2022 Negi