Adani Welspun Exploration Limited v. Union of India

4. The learned Senior Counsel submits that after this error popped up, at

11.53 hours, the Petitioner contacted one Mr. Shabir Khan of M-Junction to avail his help, however, he was not available. Thereafter, at 11:54 hours, the Petitioner spoke to one Mr. Pradeep of M-Junction who advised the Petitioner to go back to the document submission page and upload the BG. On being told that BG was not applicable to the Petitioner, Mr. Pradeep advised the Petitioner to upload any blank page or any other document in place of BG. As every step of the submission required entering of DSC requirements, when the Petitioner finally entered and submitted the financial bid parameters, it was already 12:00 hours and the bid of the Petitioner was not accepted.

5. Mr. Nayar submits that the action of the Respondent is arbitrary and unreasonable in nature, and violates the Petitioner’s rights under Article 14 and Article 19(1)(g) of the Constitution of India. He states that the Petitioner should not be made to suffer solely because of technical glitches on the online portal. He submits that the NIO categorically noted that BG was to be uploaded in lieu of shortfall of networth, and as the Petitioner had satisfied this bid criteria, the uploading of a BG was not applicable to the Petitioner. Mr. Nayar further submits that the instruction rendered by the person manning the helpline is outside the scope of the NIO as nowhere has it been stated in the manual that a blank document is to be uploaded in case a certain document is not applicable to the bidder.

6. The learned Senior Counsel for the Petitioner informs this Court that the Respondent had outsourced the tendering to a company called “M- Junction, and that the “Add Bank Guarantee” page contained in the manual for submission of bids would not have allowed for the Petitioner to simply upload a blank page or a self-declaration as the page indicates that the bidder would have been required to enter various other details such as BG number, Bank name, amount, BG date, etc. Mr. Nayar argues that despite the clarifications issued by the Respondent from time to time, no clarity was furnished on this issue regarding the requirement of uploading a plain sheet mentioning that BG was not applicable. He further relies upon an email dated 27.05.2022 sent by the Respondent to the Petitioner to state that the Respondent was already aware of the networth of the Petitioner, and therefore, no BG should have been needed by the Respondent. The learned Senior Counsel for the Petitioner further adds that as a result of the technical glitch in the e-bidding portal, the Petitioner had sent the hard copies of the bid documents to the office of the Respondent, but the same was not accepted. Mr. Nayar submits that the additional affidavit of the Respondent notes that 37 bidders had uploaded their bids on the last day and that doing so was common practice, and therefore, the Petitioner could not be faulted for doing so as well.

7. Per contra, Mr. Sanjay Jain, learned ASG for the Respondent, submits that the Helpdesk of M-Junction was at the full disposal of the Petitioner, as has been exemplified by the fact that the Petitioner had repeatedly sought for assistance, till the very last moment before the deadline of the bid submission, and had received the same. He states that M- Junction official had informed the Petitioner that if the BG was not applicable to the bidder, then a self-declaration stating “this is not applicable to us” could be uploaded, and that no suggestion had been made to the Petitioner to upload a blank paper. The learned ASG further contends that it was imperative for all bidders who were not supposed to submit the BG to state so at the appropriate stage as it would have otherwise not been known to the e-portal till such time that the bid was actually uploaded. He states that, in this context as well as from the perusal of the e-bidding portal, the BG was a mandatory document, and the Petitioner’s contention that hard copies of the bid documents had been submitted would be of no consequence as a QR number is generated if a paper bid is submitted.

8. Mr. Jain further submits that the submission of the bid had been extended from time to time, and that the last extension stipulated that the bid submission for DSF Bid Round-III would start on 20.04.2022 and end on 31.05.2022. He states that this is a matter of common prudence and common sense as the Petitioner had 42 days to seek the relevant clarifications and make the bid submission, and that the Petitioner could not now take advantage of its own wrong of having missed the bus, i.e. waiting till the eleventh hour to submit the bid. He submits that various efforts were made by the Respondent to ensure that the prospective bidders were well-versed with the process of bidding, and that this was simply a case of negligence on the part of the Petitioner. Mr. Jain further submits that the tender process is not meant for the common man; it is meant for a player in the industry and that there is a responsible officer in the organization who deals with the same, and on this ground, the Petitioner cannot raise the bogey of being unaware of the implied terms and conditions of the NIO.

9. The learned ASG further submits that the final bid submission started taking place as early as 27.05.2022, and 37 bids were received from 27.05.2022 to 30.05.2022; further, 69 bids were received on the last day, i.e. 31.05.2022 itself, and that this demonstrates that the e-bidding portal was working properly till the very last moment. With regard to the email dated 27.05.2022, the learned ASG submits that the phrasing of the said email is incorrect and should not be taken into consideration.

10. Mr. Sanjay Jain, the learned ASG relies upon Air India Ltd. v. Cochin International Airport Ltd.,(2000) 2 SCC 617, to submit that the award of a contract is essentially a commercial transaction and that the State can choose its own method to arrive at a decision; it can fix its own terms of invitation to tender and that this is not open to judicial scrutiny. He further relies upon Silippi Constructions Contractors v. Union of India and Anr., (2020) 16 SCC 489, that judicial intervention should be minimal or avoided in contractual matters unless the decision is arbitrary or unreasonable, and that it is the authority floating the tender that is the best judge of its requirements. Reliance has also been placed on Tata Cellular v. Union of India,(1994) 6 SCC 651, to submit that decisions to accept the tender or award the contract is more often than not, made qualitatively by experts, and therefore, the terms of invitation of a tender cannot be open to judicial scrutiny.

11. Heard Mr. Rajiv Nayar, learned Senior Counsel for the Petitioner, Mr. Sanjay Jain, learned ASG for the Respondent, and perused the material on record.

12. The scope of judicial review in the matters of tenders/public auction has been explored in depth by the Supreme Court in a catena of judgements. Plausible decisions need not be overturned and, at the same time, latitude ought to be granted to the State in exercise of its executive power. However, it has been observed that allegations of illegality, irrationality and procedural impropriety would be enough grounds for Courts to assume jurisdiction and remedy such ills. Recently, in State of Punjab and Ors. v Mehar Din,(2022) 5 SCC 648, while taking into account the principles regarding judicial intervention that have been established over the years, the Supreme Court observed as under:

22. The exposition of law on the subject has been consistently followed by this Court even in the later decisions holding that superior courts should not interfere in the matters of tenders, unless substantial public interest was involved or the transaction was mala fide. It was consistently stressed by this Court that the need for overwhelming public interest should always be kept in mind to justify judicial intervention in contracts involving the State and its instrumentalities and while exercising power of judicial review in relation to contracts, the courts should consider primarily the question whether there has been any infirmity in the decision-making process.

23. This view has been further considered by this Court in Jagdish Mandal v. State of Orissa [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517], wherein it was observed as under: (SCC p. 531, para 22)

delay relief and succour to thousands and millions and may increase the project cost manifold.”

24. This Court in a recent judgment in Silppi Constructions Contractors v. Union of India [Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489] held as under: (SCC pp. 501-02, para 20)

25. The law on the subject is settled that the courts being the custodian of fundamental rights are under an obligation to interfere where there is arbitrariness, irrationality, unreasonableness, mala fides and bias, if any, but at the same time, the courts should exercise the power of judicial review with a lot of restraint, particularly in contractual and commercial matters.” (emphasis supplied)

13. Therefore, there has to be a finding of irregularity or illegality that would justify the interference of a Court exercising its writ jurisdiction in contractual matters. In fact, in such circumstances, it becomes the duty of the Court to intervene and ensure that arbitrariness, irrationality, bias, mala fides or perversity is prevented in administrative decision-making. It was in Tata Cellular v. Union of India (supra) that the Supreme Court noted that unless substantial public interest is involved or the transaction is mala fide, Courts should not interfere in matters of tenders. It was yet again noted that the grounds upon which an administrative action was subject to control by judicial review were illegality, irrationality, and procedural impropriety.

14. The learned ASG’s reliance on Air India Ltd. v. Cochin International Airport Ltd. (supra), Silippi Constructions Contractors v. Union of India and Anr. (supra), and Tata Cellular v. Union of India (supra) does not support the case of the Respondents as all these judgements do not wholly exclude the exercise of judicial review in the realm of contractual matters; all these judgements feature a caveat stating that while there are inherent limitations in the exercise of the power of judicial review, the same is permissible in order to avoid arbitrariness or favouritism.

15. This caveat for judicial review is that every State action needs to be informed by reason, and an act uninformed by reason is per se arbitrary. The basic requirement of Article 14 is fairness in action by the State; these 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 motive. With regard to irrationality in matters of governmental policy, i.e. unreasonableness in actions of the government, the might of Article 14 of the Constitution must be factored in.

16. The aforementioned line of thought was propounded by the Supreme Court in Union of India and Anr. v. International Trading Co. and Anr.,(2003) 5 SCC 437, wherein the principle of how Article 14 applies to matters of governmental policy was observed, and how the said policy or any action of the government, even in contractual matters, would be held as unconstitutional if it failed to satisfy the test of reasonableness. The relevant paragraphs stating the same have been reproduced as under:

17. In the instant case, Clause IV, Point 3 of the Bid Qualifying Criteria in the NIO states that if a bidding company is bidding alone or in a consortium is a domestic company and does not have adequate specified networth, then it may submit a BG to fulfil its networth requirement, along with the bid in the format prescribed in Annexure-I of the NIO. Clause VI, Point 1 of the Bid Evaluation Criteria in the NIO reiterates this requirement. Clause XIII of the NIO stipulates the documents that have to be submitted online through the e-bidding portal. The same has been reproduced as under along with the screenshot of the e-bidding portal showing the documents that are to be submitted:

DOCUMENTS TO BE SUBMITTED ONLINE THROUGH E-BIDDING PORTAL

1. Letter of authorisation for person bidding in online e-bidding portal

2. A bid bond in the form of Term Deposit (TDR).

3. BG in lieu of shortfall of Networth vis a vis value of Bid Work Programme, as applicable.

4. Proof of payment of tender fees by way of purchase of Field Information Docket in terms of NIO and Price List.

5. Letter of presentation and commitment from the bidding company, and / or from parent company, where ever applicable.

6. Certificate from statutory auditor of the bidding company regarding Net-worth.

7. Documents evidencing the legal existence of the bidding company (including latest Article of Association and Memorandum and certificate of incorporation /registration).

8. Ample and sufficient power-of-attorney granted to a legal representative /authorised representative of company or leader of consortium.

9. Document whereby the parent company knows and endorses the bid and the contractual obligations of its affiliate or subsidiary, where ever applicable.

10. Corporate Information and additional Corporate Information in respect of each bidding company, as per given format.

11. Declaration as per given Annexure-V.” (emphasis supplied)

18. A copy of the screenshot of the e-bidding portal also enlists the bid documents and whether or not they are mandatory. Serial No. 6 states that a “certificate from statutory auditor of the bidding company regarding networth” is mandatory, and Serial No. 3 states that a “BG in lieu of shortfall of Networth vis a vis value of Bid Work Programme, as applicable” needs to be submitted.

19. When the question was posed by this Court to the learned ASG with regard to the presence of a categorical instruction in the manual pertaining to uploading of a self-declaration if BG was not applicable to a bidder, the learned ASG was unable to point out any clause or instruction inferring the same. It was, in fact, submitted by the learned ASG that the said instruction was implied and that an experienced bidder would have been prudent enough to upload the same. This Court is of the opinion that this contention on behalf of the Respondent does not hold any water. In the ordinary course of bidding, it cannot be said that a bidder, who had previously not undergone this procedure of bidding or had not experienced the allegedly implied condition, could have deduced that a blank document or a self-declaration in lieu of a BG had to be uploaded on the page for Serial No. 3. Furthermore, the learned ASG has also failed to satisfy this Court on as to why a BG would be required if uploading a Networth certificate was mandatory. Furthermore, even a reading of the requirement of Serial No.3 demonstrates that a BG only had to be uploaded if there was a shortfall in the networth of the bidder; this Court is of the opinion that there resides no ambiguity in the reading of this phrase. It is also pertinent to note that the email dated 27.05.2022, sent by the Respondent to the Petitioner, categorically states that the networth of the Petitioner had been uploaded on the DGH e-bidding portal. Therefore, it is clear that not only did the Respondent have access to the networth of the Petitioner, but that the uploading of the BG was only mandated in the event that the bidder did not fulfil the requisite networth requirement.

20. Moreover, the contention of the learned ASG that the grievance of the Petitioner is merely one of a bidder who has missed the bus due to their own negligence can, at best, be termed as a strawman argument, having no basis in the facts of the instant case. A perusal of the chart depicting all the 106 bids received for all contracts in the DSF Bid Round-III reveals that 69 bids were received on 31.05.2022 itself, i.e. the last date of bid submission, with 11 bids being submitted in the last hour before the closing of the e-bidding portal. The contention of the learned ASG that the Petitioner is a victim of his own undoing is unsupportive in law as it would amount to placing the Petitioner in a separate class which is violative of Article 14.

21. In light of the aforesaid, this Court is of the opinion that, when tested on the touchstone of Article 14, the allegedly implied instruction that a blank document or a self-declaration had to be uploaded by a bidder who not only possessed, but also surpassed the bid eligibility criteria with regard to the networth requirement and, therefore, was not required to furnish a BG, does not pass the test and cannot be said to be an instruction that could have been inferred or assumed by even an experienced bidder, especially in view of how the terms “in lieu of” and “as applicable” convey the non-mandatory nature of the document. This action on the part of the Respondent duly makes out a case warranting the interference of this Court exercising its power under Article 226 of the Constitution of India.

22. The Respondent is, therefore, directed to consider the bid of the Petitioner in accordance with the terms and conditions enumerated in the NIO dated 10.6.2021, and thereafter, take an appropriate decision to award the tender to the best suited bidder.

23. Accordingly, the instant petition is disposed of along with the pending application(s), if any.

SATISH CHANDRA SHARMA, C.J. SUBRAMONIUM PRASAD, J AUGUST 17, 2022 Rahul