Cube Construction Engineering Ltd v. National High Speed Rail Corporation Ltd

11. Learned senior counsel for the petitioner also highlights the manner in which the Evaluating Committee has examined the documents. Reliance has been placed on the Minutes of the Financial Evaluation Committee Meeting held on 21.12.2018 and 27.12.2018 at RITES Gurgaon. Some of the observations so made and referred to by both the parties, are being extracted below: “NHSRCL forwarded a copy of the financial PRICE bid on same date vide letter no. NHSRCL/MA/CA01/SBI.HSR.BLD/394.2/3384 dated 14.12.2018. Comparative statement and Briefing note for financial offer has been prepared by Manager/CIVIL/RITES and Manager/FINCNCE/RITES as per Appendix-2(3 pages).

2.0 EVALUATION OF PRICE BIDS 2.[1] The evaluation criteria are explained below. 2.1.[1] Part I-Evaluation of Compliance and Responsiveness Under this Stage the following items will be checked: i) The Letter of Price Bid is compliant, i.e., it does not include any alteration to the basic terms and does not constitute an alternative offer. ii) All Forms and Price Schedules have not been altered and are correctly completed and signed 2.1.[2] Part 2 – Detailed Financial Evaluation a) After passing the above requirements, the Bid will then proceed for Price Bid evaluation in accordance with ITB 38. b) In principle, the Lowest Evaluated Bid resulting from (a) above will move to next as per ITB “F. Award of Contract in the ITB Clause 41 to 44.”

12. Mr. Dewan, learned senior counsel for the petitioner while relying on para 2.2.[1] of the extracted part of the Minutes of the Meeting, submits that respondent No. 2 has not submitted letter of price bid and CD for the offer and in para 2.[1] the relevance of these documents has been highlighted. Mr. Dewan also relies on para 3 of the briefing note for financial bids and submits that it can been noticed that the letter of price bid, covering letter, completed BOQ (Bill of Quantity), and CD have not been submitted, but in the subsequent para 4, non-compliance of complete BOQ has been deleted without giving any explanation for the same. The relevant extract of the Minutes of the Meeting which have been relied upon is reproduced below: - 2.[2] Evaluation by committee RITES examined the copies (3rd copy) of the Price Bids of the Bidders received from NHSRCL and carried out Financial Evaluation. The details of the evaluation are given below. 2.2.[1] Part I Evaluation i) All the Price Bids does not include any alternation to the basic terms and does not constitute an alternative offer. ii) All Forms and Price Schedules have not been altered. iii) As per financial bid opening details (Appendix-3), M/s. B.L. Kashyap and Sons Ltd. have not submitted letter of PRICE BID and CD for the offer, as per ITB 22.[1] and Stage 5 of Vol I (1/3) Pg

32. TEC observed that M/s. B.L. Kashyap and Sons Ltd. have submitted tender documents duly signed on all pages as token of acceptance of tender conditions. He has submitted Section 5 – Financial submission of tender documents containing PRICE BID letter, price schedule and Payment schedule, duly signed. Hence, they have accepted all the term and conditions of the price bid. As per letter of Technical bid, bid validity of 120 days along with Addendum No. 1 and Corrigendum 1,[2] & 3 have been accepted. There are no other special conditions in letter of PRICE BID. As they have submitted the PRICE BID rates duly signed. Tender evaluation committee feels financial submission as acceptable. They have not submitted CD for the financial offer, which is also not a major omission to bypass the offer. The above omissions have also been represented by M/S Cube Construction Engineering Ltd. (3/5) vides their letter Package No. NHSRCL/CO/SBI- HUB/2018/10 dated 14.12.2018 (Appendix-4). Tender evaluation committee (TEC) has gone through the contents of the letter and deliberated. As discussed above by TEC, it is felt that financial submission by M/s B.L. Kashyap and Sons Ltd is complete and acceptable. iv) M/S Cube Construction Engineering Ltd. (3/5) has not submitted CD along with copy of Price bid. CD has been submitted with Original Bid. This is acceptable.”

13. Mr. Dewan, also contends that a different stand has been taken in the counter affidavit filed in the Gujarat High Court in a writ petition instituted by the petitioner, which was not entertained on account of lack of territorial jurisdiction. The averment made in the said counter affidavit was that letter of price bid was submitted which imply that the documents filed and handed over in Court in the present case, did not repose confidence. The paragraphs 6, 8 and 9 of the counter affidavit filed before the Gujarat High Court are relied upon by both the parties and are reproduced below:

14. Mr. Dewan also submits that out of the set of documents handed over in Court, during the course of hearing, only some form part of the Court record. The said set is referred to as ‘Horizontal Sheets’ for the sake of convenience. It is contended that the document filed at page 4 of the Horizontal Sheets shows three rubber stamps while the same document filed by respondent No. 2, along with the counter affidavit, shows a single stamp. He further submits that while the document at page 5 of the Horizontal Sheets, shows four stamps, the corresponding document at page 103 (Annexure R-2) does not show any rubber stamp at all. In view thereof, Mr. Dewan contends that little or no reliance can be placed on either the averments made in the counter affidavit before the Gujarat High Court or on the averments made in the counter affidavit before this Court. It is further submitted that it appears that the documents were acquired subsequently, therefore the same are not authentic. The entire exercise of tampering is writ large on the face of the record, thus making the entire process of awarding the tender suspicious and ridden with mala fides, illegalities and arbitrariness. Reliance is placed upon the observations made by the Supreme Court in a decision rendered in the case of Vidarbha Irrigation Development Corporation v. Anoj Kumar Garwala, reported at 2019 SCC Online SC 89 wherein the Court examined a situation wherein along with the tender document, the bank guarantee of 42.14 lakhs was to be submitted for a period of forty months. In response to the tender, the L-1 had submitted a bank guarantee of 42.14 lakhs, but for a period of six months. Though the deficiency was subsequently made up, the Court, however, held that the words used in the tender document cannot be ignored or treated to be redundant or superfluous. Paragraphs 15 and 17 are reproduced as under: -

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:

16. We also agree with the contention of Shri Raval that the writ jurisdiction cannot be utilised to make a fresh bargain between parties.”

17. It is clear even on a reading of this 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.

15. Reliance is also placed on the judgements in the cases of W.B. State Electricity v. Patel Engineering Co. Ltd. reported at (2001) 2 SCC 451, Poddar Steel Corporation v. Ganesh Engineering Works reported at (1991) 3 SCC 273, Tata Cellular v. Union of India reported at (1994) 6 SCC 651 and paras 66(i) and 66(ii) of B.S.N Joshi and Sons Ltd. v. Nair Coal Services Ltd. reported at (2006) 11 SCC 548.

16. Per contra, Mr. Gopal Jain, learned senior counsel appearing for respondent No. 1 submits that neither there is any illegality, impropriety or tampering with the documents, nor has any process been followed against the settled principles of law or against the tender conditions. Mr. Jain, submits that it has been a consistent stand of respondent No. 1 before this Court as well as before the Gujarat High Court that the letter of price bid was not submitted by respondent No. 2. However, in a multilayer examination system, respondent No. 2, being the L-1 and having been declared substantially responsive, was awarded the tender on 09.04.2019, and the same was declared to be a successful tenderer even prior thereto, that is, on 09.01.2019, when the letter of acceptance was issued.

17. Mr. Jain submits that all the tenderers are expected to sign and submit the tender document, along with the financial bid. Admittedly, the petitioner and respondent No. 2 signed the tender document, which is a blank document containing many formats to be filled by the tenderers and submitted along with the financial bid and inter-alia the letter of price bid is one such document. Mr. Jain, clarifies that the counter affidavit filed before the Gujarat High Court refers to the documents forming part of the tender documents bearing the signatures and stamps of respondent No. 2, and the effect of the same is that both respondent No. 2 and the petitioner agreed and undertook to comply with all the conditions of the tender documents.

18. Mr. Jain submits that there is no infirmity in the decision-making process of respondent No. 1. Reliance has been placed on the original tender document submitted by respondent No. 2 which was examined and returned with the letter of price bid in the format provided in the tender document and duly signed by respondent No. 2. The same document was submitted with the blanks as it was only a format, however, the blanks were filled up and duly submitted with the financial bid and which is an admitted document containing the figures which were to be provided in the letter of price bid; the Evaluating Committee at the RITES merged the two documents. The conditions of letter of intent mentioned in the undertaking bearing the signatures of respondent No. 2 and the blanks which were to contain the price figures have been accepted from a separate document, which forms part of the price bid. The said separate document, at page 541, is scanned and produced below:-

19. It is submitted that the above scanned document, indisputably shows the signatures of one Shri Pradeep Sharma along with the rubber stamp, whereas this very document handed over in court, along with the horizontal sheets, shows three rubber stamps and two signatures on the side. Admittedly, two rubber stamps and two signatures are missing. The document handed over in court is reproduced below:

20. To explain this, Mr. Jain, firstly submits that the first document referred to as Document ‘A’ is what was submitted by respondent No. 2, whereas the one which has been scanned subsequently, referred to as Document ‘B’, is the final document which has been handed over in the Court and forms part of the contract dated 09.04.2019. It is, thus, submitted that the allegations made with regard to stamps being missing or documents accepted from the backdoor are false and scandalous as respondent No.1 is a Public Sector Undertaking. Mr. Jain also relies upon the format of payment schedule, which was part of the tender document and submits that although this format was filed as blank, however, the schedule No.1 of this document, was filed with the final bid and it is for this reason that the three layer Scrutinizing Committee declared the bid of respondent No. 2 as substantially responsive. Mr. Jain relies on Clause 18.[3] which we reproduce below: - “To submit that it was option for a bidder to add breakdown of items and provide the prices in each price schedule included in Section 4 of the bidding form. In the case of the Respondent No. 2, the Respondent No. 2 had provided the lump sum amount.”

21. Mr. Jain, has placed reliance on Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited and Another, (2016) 16 SCC 818, to submit that while exercising power of judicial review, the courts would be slow to interfere with the decision unless the decision is arbitrary or irrational. Reliance is also placed on paragraphs 11, 15, and 16 as reproduced as under:

22. In support of aforementioned contentions, reliance is placed on the case of Central Coalfields Limited and Another vs.

SLL-SML (Joint Venture Consortium) and Others, (2016) 8 SCC 622, more particularly para 43, which is reproduced as under: -

(ii) Whether public interest is affected.

23. Mr. Jain also placed reliance on para 66(v) of B.S.N. Joshi & Sons Ltd (supra) to highlight the scope of judicial review in comparison to the public interest, public money involved and also the power of general relaxation. Relevant para 66 is reproduced as under: -

24. Reliance is also placed on para 22 in the case of Mandal vs. State of Orissa, (2007) 14 SCC 517, to highlight that it is not for the Court to decide whether the decision taken is sound and the job of the Court is only to examine whether the decision taken is lawful. Para 22 reads as under: - “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 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. 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.”

25. Reliance is also placed on paragraphs 19, 20 and 25 of a recent decision of the Apex Court in the case of The Silppi Constructions Contractors v. Union of India and Anr reported at 2019 SCC Online 1133 Reliance is also placed on M/s Selex Sistemi Integrati, SPA v. Union of India & Ors., reported at 2011 SCC Online Del 4210, para 33, which is reproduced hereunder: -

26. Mr. Jain submits that once the letter of intent was issued as far back on 09.01.2019 in favor of respondent No. 2 and thereafter on 09.04.2019, the work was awarded. Mr. Jain further submits that as respondent NO. 2 has already commenced the foundation work and have released more than six crores, it would certainly not be in public interest to delay the project, assuming without admitting that there is any procedural infirmity in awarding the tender.

27. We have heard learned senior counsels for the parties and have carefully examined the terms and conditions of the tender and the rival contentions of the learned senior counsels appearing in the matter.

28. The law is well settled that Courts intervention in a decision rendered by administrative bodies is warranted only if the said decision suffers from arbitrariness or irrationality. Reliance is placed on the decision of the Supreme Court in the case of The Silppi Constructions Contractors (supra), more particularly paras 19 and 20, which are reproduced as under:

20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case.”

29. Mr. Dewan, learned Senior Counsel for the petitioner has labored hard to contend that in spite of the fact that respondent No.2 was the lowest bidder, the tender could not have been awarded to respondent No.2 for the reason that the bid of respondent was non-responsive. Mr. Dewan has submitted that submission of letter of price bid with seal and signature of the bidder is an essential condition of the tender and not having submitted the same would make the bid non-responsive. It is also the case of the petitioner that the documents which are sought to be produced are not reliable as the document initially produced had one stamp while the document subsequently produced contains two stamps. It is also contended that there is contradiction in the counter affidavit filed before the Gujarat High Court and the stand taken by the respondent in this Court.

30. Mr. Jain, learned Senior Counsel for the respondent has fairly submitted that although the letter of price bid was not submitted by respondent No.2, however, in a multi-layer examination system, respondent No.2 being L[1], was declared substantially responsive and was awarded the tender. LOA was issued as far back as on 09.01.2019. Mr. Jain has explained that the original tender documents of respondent No.2 was returned with the letter of price bid in the format provided in the tender document and was also duly signed by respondent No.2. The same document was submitted blank as it was only a format. However, the blanks were filled subsequently and the document was duly submitted with the financial bid containing figures which were to be provided in the letter of price bid. The Evaluation Committee at RITES examined the two documents together. The conditions of letter of intent mentioned in the undertaking bears the signatures of respondent No.2 and the blanks which were to contain the price figures have been accepted from a separate document, which forms part of the price bid. The documents relied upon have been scanned in aforementioned paras 17 and 18.

31. The decision-making process has been examined by this Court as is reflected in the Minutes of the Evaluation Committee, which examined the documents in the Financial Evaluation Committee Meetings held on 22.12.2018 and 27.12.2018 at RITES Gurgaon. At the cost of repetition, we extract the relevant part of the Minutes, which reads as under: “2.2.1Part I Evaluation v) All the Price Bids does not include any alternation to the basic terms and does not constitute an alternative offer. vi) All Forms and Price Schedules have not been altered. vii) As per financial bid opening details (Appendix-3), M/s. B.L. Kashyap and Sons Ltd. have not submitted letter of PRICE BID and CD for the offer, as per ITB 22.[1] and Stage 5 of Vol I (1/3) Pg

32. TEC observed that M/s. B.L. Kashyap and Sons Ltd. have submitted tender documents duly signed on all pages as token of acceptance of tender conditions. He has submitted Section 5 – Financial submission of tender documents containing PRICE BID letter, price schedule and Payment schedule, duly signed. Hence, they have accepted all the term and conditions of the price bid. As per letter of Technical bid, bid validity of 120 days along with Addendum No. 1 and Corrigendum 1,[2] & 3 have been accepted. There are no other special conditions in letter of PRICE BID. As they have submitted the PRICE BID rates duly signed. Tender evaluation committee feels financial submission as acceptable. They have not submitted CD for the financial offer, which is also not a major omission to bypass the offer. The above omissions have also been represented by M/S Cube Construction Engineering Ltd. (3/5) vides their letter Package No. NHSRCL/CO/SBI- HUB/2018/10 dated 14.12.2018 (Appendix-4). Tender evaluation committee (TEC) has gone through the contents of the letter and deliberated. As discussed above by TEC, it is felt that financial submission by M/s B.L. Kashyap and Sons Ltd is complete and acceptable. viii) M/S Cube Construction Engineering Ltd. (3/5) has not submitted CD along with copy of Price bid. CD has been submitted with Original Bid. This is acceptable.”

32. We find the explanation given by the learned senior counsel of the respondent to be reasonable and acceptable and find no fault in the decision-making process which would require interference in these proceedings. In the case of Central Coalfields Limited and Another (supra), which has been extracted in para 21 above, the Supreme Court, in para 43, has held that “if an administrative decision, such as a deviation in the terms of NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the courts will not judicially review the decision taken. Similarly, the courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation.”

33. We are unable to accept the contention of Mr. Dewan that the documents are not authentic and reliable. We have scanned the documents in aforestated paras 17 and 18. In para 17, the document shows one stamp, while in para 18 the document shows two stamps. We find force in the explanation rendered by Mr. Jain that the document such as Document ‘B’, scanned in para 18, is the final document and forms part of the contract. In view of the above discussion, we find no infirmity in the decision-making process, which would require interference.

34. For all the reasons stated above, we find the writ petition to be without any merit, the same is accordingly dismissed. CM. Appls 16007/2019, 19560/2019 & 33954/2019

35. In view of the order passed in the writ petition, the applications stand dismissed. G.S.SISTANI, J JYOTI SINGH, J NOVEMBER 19, 2019 pkb/pst//