Full Text
HIGH COURT OF DELHI
Date of Decision: 07.11.2019
M/S SHRI TIRUMALESA ROADLINES ..... Petitioner
Through: Mr.Vipul Ganda, Mr.Vikas Yadav, Ms.Dipika Ganda and Mr.Aman
Chaudhary, Advts.
Through: Ms.Meenakshi Arora, Sr.Adv. with Ms.Mala Naryan, Ms.Neha Dawar, Mr.Rahul Narayan and Mr.Digvijay, Advts. for R-2/IOCL.
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI G.S.SISTANI, J. (ORAL)
This petition has been filed by the petitioner under Article 226 of the
Constitution of India seeking a writ of mandamus against the respondents to quash decision dated 26.03.2019 of respondent No.2, whereby it is contended that the technical bid of the petitioner was rejected without giving justifiable reasons and with the sole motive to favour another bidder.
JUDGMENT
2. Some necessary facts which are required to be noticed for disposal of this writ petition are that on 11.07.2018, a notice was issued by respondent No. 2 inviting E-tender for setting-up new LPG Bottling facility at 60 different locations from private bottlers having ready built plant/willing to construct new LPG bottling facility. 2019:DHC:5847-DB
3. Accordingly, a common tender for all 60 identified locations was floated. The object was that the successful bidder should be able to create adequate plant and infrastructural facilities and possess competence to engage in the activities required for handling of the LPG bottling operations with caution and safety.
4. The petitioner claims to be a registered partnership firm dealing in LPG products since many years and having vast experience in dealing with LPG products. The petitioner also claims to have a sound financial track record to carry-out the work of refilling LPG cylinders by establishing new bottling plants.
5. The petitioner company participated in the E-tender published by respondent No.2 for one location i.e. Warangal (Telangana) and submitted the required documents. After evaluation of the pre-qualification criteria, eligibility criteria and technical bid documents in Round I, the petitioner was found eligible for Round II; and was interviewed on 24.01.2019, when original digital records were submitted on the e-portal. After the interview, the petitioner was found eligible for Round III and was called for site inspection.
6. The complaint of the petitioner is that the technical bid of the petitioner has been rejected after site-inspection in Round III, without respondent No. 2 giving any cogent grounds/reasons for doing so.
7. Mr. Ganda, learned counsel for the petitioner submits that within 24 hours of rejection of the petitioner's technical bid, respondent No. 2 hurriedly fixed the time for opening of financial bid on 27.03.2019 at 4.10 p.m. Mr. Ganda submits that the rejection of the technical bid by respondent No. 2 is baseless, mala fide and arbitrary; and has been done with a view to accommodating particular parties, in whose favor respondent No. 2 had pre-decided that the tender should be awarded. Site at Warangal (Telangana)
8. Mr. Ganda submits that the purported ground of rejection of the technical bid of the petitioner in respect of the location at Warangal is unfounded since, contrary to what is alleged by respondent No. 2, there is no overhead transmission wire crossing the plot that the petitioner has offered for the bottling plant. He contends that there is only an electric wire/ line going along the road-side boundary of the plot, which is outside the boundary walls of the proposed layout of the bottling plant; and the same cannot be a disqualification as per the plain wording of the tender. Moreover, the petitioner has already moved an application for shifting of the electricity line, which is annexed at page 145 of the petition and the same has been allowed by the Electricity Department. Besides, the tender documents also say that there should not be a 'high-tension' electrical wire; and considering the definition of ‘transmission lines’ under the Electricity Act 2003, even the electrical line going along the road-side boundary of the plot is not a high-tension electrical wire. Mr. Ganda further relies upon one of the terms of the tender document, under the head of ‘Plant Layout’, which reads as under: “2.[1] LOCATION & SAFETY DISTANCES 2.1.[1] LOCATION: While assessing the suitability of any site for location of LPG storage facilities, the following aspects shall be considered: a) In addition to the requirements for safety the plant should be located in such a manner so as not to be contiguous to any industry having open flame. Property line of the plant shall be away from the central line of the road/railways as per statutory requirements and overhead high tension wire shall not traverse through the battery limit of the plant.”
9. Ms. Meenakshi Arora, learned senior counsel appearing for respondent No.2 however submits that the technical bid of the petitioner for the site at Warangal (Telangana) was rejected since there were overhead electrical lines/wires passing through the offered plot. Ms. Arora submits that the eligibility criteria contained in Clause 8 (iii) of the tender documents specifically stipulate that a plot offered has to be free from any overhead power transmission cables/wires, mobile towers or any other type of electrical structure etc. She submits that in view of the specific tender eligibility criteria, respondent No. 2 was well within its right to reject the petitioner’s bid with respect to the location at Warangal. Clause 8 (iii) is reproduced hereinbelow:
10. To support her submissions, learned counsel for respondent No. 2 has placed reliance on the photographs taken by the Committee members at the time of the site-inspection, annexed at pages 235-237 of the petition, which clearly show the electrical wires passing-over the offered plot.
11. We have heard learned counsel for the parties and have considered their rival submissions.
12. For the site at Warangal, the respondents have found the tender to be non-responsive on the ground of presence of electric wires over the offered land. Counsel for the petitioner submits that no such wires ever existed within the boundary of the offered land; and that the overhead electrical wires are beyond the boundary walls of the plot in question. Ms. Arora, however submits that this submission is factually incorrect and places reliance on the photographs taken by the Committee Members, which appear to show that the electrical wires are running within the boundary of the offered plot, inspite of this being denied by Mr. Ganda.
13. Prime facie it appears to us that the electrical wires are running within the boundary wall. In any case, disputed questions of fact cannot be decided in these proceedings. Thus the objection raised must be taken to be without merit.
14. We have also examined the tender document, more particularly Clause 8(iii), extracted above. The purpose of such tender condition has been explained in para 3(b) of the counter-affidavit of respondent No. 2 which is reproduced as under:- “3(b) … … … The safety aspects also require that within the area marked / offered for the plant no naked electricity Line can be allowed. It may be pointed out that the Electricity supply is taken inside the Plant through armored cables, Flame proof/Intrinsic Equipments to avoid any accident which can occur on account of even a spark inside the Plants. In premises used for filling and storing flammable gases in cylinder of LPG Plants, all electrical equipment such as motors, switches, starters, etc., installed in the premises used for Compressing and filling of flammable gases are required to be of flameproof construction conforming to IS: 2148./IEC60079 (in lieu of IS 2148). Similarly all electric meters, distribution boards, switches, fuses, plugs and sockets, all electric fittings, fixed lamps, portable hand lamps and motors, are required to be of flame proof construction conforming to IS or IEC-60079-1, IS or IEC 60079-11 or any other standard as approved by the Chief Controller Explosives and the same are also required to be effectively earthed. The entire electrical wiring installed within the Plants for the storage of flammable compressed gases is required to be of insulated armored cables of approved type. The cables are required to be mechanically continuous throughout and effectively earthed away from the vessels.”
15. The law on the scope of judicial review in tender matters is wellsettled. A brief reference to some judicial precedents may not be out of place. In the case of Tata Cellular v. Union of India reported as (1994) 6 SCC 651, the Supreme Court held as under: "70....the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down."
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
16. Thereafter in the case of Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited and Another reported as (2016) 16 SCC 818, the Supreme Court held as under:
constitutional court interferes with the decision-making process or the decision."
17. Following the principles of Tata Cellular (supra) and Afcons Infrastructure Limited (supra) the Supreme Court in Municipal Corporation, Ujjain and Another v. BVG India Limited and Others reported as (2018) 5 SCC 462, has further held as under:
18. Also, in Silppi Constructions Contractors v. Union of India and Another reported as 2019 SCC OnLine SC 1133, the Supreme Court has held as under:
matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
perversity. With this approach in mind we shall deal with the present case."
19. In view of the above discussion, we do not find any ground to interfere in the decision taken by respondent No. 2. We accordingly find no merit in the petition; which therefore stands dismissed.
20. Accordingly, we find no merit in this petition. The petition stands dismissed. CM APPL. 16117/2019
21. In view of the order passed in the writ petition, the application also stands dismissed. G.S.SISTANI, J ANUP JAIRAM BHAMBHANI, J NOVEMBER 07, 2019