High Court · 2024
Legal Reasoning
135.WP-2399-2024.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWrit Petition No. 2399 Of 2024M/s D.M. Gaikwad Constructions Having its office at Gangasadan, Poonam Galli,Raviwar Peth, Beed, Tq. & Dist. Beed.Through its Proprietor,Dayanand Machindra GaikwadAge: 35 years, Occu.: Contractor. .. Petitioner Versus1.The State of Maharashtra,Through its Secretary,Department of Agriculture & Marketing,Mantralaya, Mumbai.2.The Chairman and Managing Director,Maharashtra State Warehousing Corporation,583/B Market Yard, Gultekadi, Pune,Dist. Pune.3.The General Manager (Engineering),Maharashtra State Warehousing Corporation,583/B Market Yard, Gultekadi, Pune,Dist. Pune. .. Respondents****** Mr. S.V. Natu h/f Mr. M.D. Narwadkar, Advocate for the Petitioner.* Mrs. P.J. Bharad, AGP for Respondent No.1/State.* Mr. Kunal Kale, Advocate for Respondent Nos. 2 & 3.***** CORAM : MANGESH S. PATIL & SHAILESH P. BRAHME, JJ.. DATE : 07 OCTOBER 2024 [1]
Legal Reasoning
135.WP-2399-2024.odtORAL JUDGMENT (Per Shailesh P. Brahme, J.) : .Rule. Rule is made returnable forthwith. Heard both thesides finally with their consent.2.Petitioner, a registered Contractor, has initially filed thispetition seeking direction to delete/modify tender conditions andfor prohibitory directions. Later on the petition is amended andadditionally relief of quashment of communication dated12.03.2024 disqualifying the petitioner in the technicalevaluation and order restraining to issue tender work tosuccessful bidders have been solicited. 3.A tender was floated by the respondent no.2/WarehousingCorporation bearing e-tender notice 53/23-24 for replacement ofold A.C. Sheets by Zincalume Sheets of various warehousessituated in Latur, Chattrapati Sambhajinagar, Pune, Nashik,Amravati and Nagpur MIDC Region. The petitioner submitted itsbid. The pre-bid meeting was conducted on 21.02.2024.Petitioner raised objections in the pre-bid meeting. Theobjections were overruled. The technical evaluation of the bidswere conducted. It was called upon to remove the shortfalls inthe bid document by email dated 09.03.2024. It made thecompliance and reported it on 11.03.2024. It was disqualified inthe technical bid on 12.03.2024 as non-responsive to conditionof folder nos.4(a), 6 and 7.4.Learned Counsel Mr. S.V. Natu for the petitioner submitsthat the tender condition nos. 4(a), 6 and 7 are arbitrary anddesigned to restrict the competition. He further submits that the[2] 135.WP-2399-2024.odtdisqualification is perverse and illegal as the eligibility conditionswere complied with. It is further submitted that for last tenyears, petitioner was executing work of therespondent/Corporation and the documents to that effect weresubmitted. The insistence for experience certificate was hypertechnical. The petitioner was not issued with the experiencecertificate in time. He was holding requisite documents to showownership of machines, but still it is disqualified. 5.The respondents contest the submission of the learnedCounsel for the petitioner. Affidavit-in-reply is filed by therespondent no.2 and 3. It is submitted that petitioner’sobjections raised in the pre-bid meeting were overruled and it isagain agitating the same after participating in the tenderprocess. For each tender work, the bids were received which arestated in paragraph no.9 of the reply. The technical assessmenthas been reiterated in the reply. The petitioner was found to benon-responsive for folder nos.4(a), 6 and 7 for tender no.53/1. Itwas found to be non-responsive for tender no.53/2 to the extentof folder nos.4(a), 6 and 7. It was non-responsive for tenderno.53/4 to the extent of folder no.4(a).6.It is further submitted that it failed to submit proof of beinga profile manufacturer of sheets. There was no proof ofownership of standing seam machine. Despite giving opportunityto it to remove the shortfalls, requisite documents were notplaced on record. It is further contended that experiencecertificate could have been solicited before submitting tender.[3] 135.WP-2399-2024.odtAfter following due procedure of law, in a technical evaluationpetitioner was disqualified. Lastly, it is contended that there is noprocedural impropriety or arbitrariness in the decision makingprocess and the petition is liable to be dismissed. 7.The respondent no.1 adopts the stand taken by therespondent no.2 and 3. 8.We have considered the rival submissions of the parties. 9.The petitioner is challenging eligibility conditions folder nos.4(a), 6 and 7 which are as follows : “4(a). Bidder should be a profile manufacturer of sheets and have his ownstanding seam machine, required proof to be attached. 6. Work Done Certificate of Govt./semi Govt. sector & Private Sector (privatework) Certificate issue by the head of officer not below the rank of ExecutiveEngineer/ Architect should be provided and contractor has to submitdocumentary evidence C.A. certificate of work done/ work completedcertificate i.e. scanned copy of agreement, bill copies of work done,commencement certificate, Form 26 AS of Income Tax. Satisfactory completedas a prime contractor for similar type of roofing work from 2018-19 to 2022-23 as follows.1. Three Zincalume/CGI sheet roofing works having workwise cost of work notless than 40% of Tender cost at price level 2022-23.2. Two Zincalume/CGI sheet roofing works having workwise cost of work notless than 60% of Tender cost at price level 2022-23.3. One Zincalume/CGI sheet roofing works having workwise cost of work notless than 80% of Tender cost at price level 2022-23.7. Executed in any one year of last five years from 2018-19 to 2022-23, theminimum quantities of the following items of work as indicated in Appendix.Sr.No Items Quantity1.Zincalume/CGI sheet roofing orequivalent type of sheet roofing 30% of Tenderquantity in SquareMeter[4] 135.WP-2399-2024.odt10.The petitioner participated in the tender process andsubmitted to the tender conditions including the impugnedconditions. In a pre-bid meeting, various objections were alsoraised. Those were considered by the tendering authority. Thosewere overruled on 22.02.2024. The tender condition contained infolder no.4(a) was specifically challenged and overruled. Thepetitioner could have challenged tender condition no.6 and 7, butfor the reasons best known to him no challenge was put up.Having participated in the tender process and having sufferedoverruling of objection to tender conditions no.4(a), he isestopped from challenging the conditions in question by filingpresent petition.11.It would be prerogative of the tendering authority to fix thetender conditions. It is open for the tendering authority to modifyor deviate from any tender condition which was existing in theearlier tender process. The tendering authority is the best Judgeto select the conditions to suit its purpose. In writ jurisdiction,the conditions cannot be substituted or modified just on theground of hardship to any party or inconvenience. It is clearlylaid down in following paragraph of Supreme Court in AirportAuthority of India Vs. Centre for Aviation Policy, Safety &Research (CAPSR) & Others; A.I.R. 2022 Supreme Court 4742.“6. Even otherwise, even on merits also, the High Court has erred in quashingand setting aside the eligibility criteria/tender conditions mentioned in therespective RFPs, while exercising the powers under Article 226 of theConstitution of India. As per the settled position of law, the terms andconditions of the Invitation to Tender are within the domain of thetenderer/tender making authority and are not open to judicial scrutiny, unlessthey are arbitrary, discriminatory or mala fide. As per the settled position oflaw, the terms of the Invitation to Tender are not open to judicial scrutiny, thesame being in the realm of contract. The Government/tenderer/tender making[5] 135.WP-2399-2024.odtauthority must have a free hand in setting the terms of the tender.7. While considering the scope and ambit of the High Court under Article 226of the Constitution of India with respect to judicial scrutiny of the eligibilitycriteria/tender conditions, few decisions of this Court are required to bereferred to, which are as under:In the case of Maa Binda Express Carrier (supra), in paragraph 8, this Courtobserved and held as under: “8. The scope of judicial review in matters relating to award of contracts bythe State and its instrumentalities is settled by a long line of decisions of thisCourt. While these decisions clearly recognise that power exercised by theGovernment and its instrumentalities in regard to allotment of contract issubject to judicial review at the instance of an aggrieved party, submission of atender in response to a notice inviting such tenders is no more than making anoffer which the State or its agencies are under no obligation to accept. Thebidders participating in the tender process cannot, therefore, insist that theirtenders should be accepted simply because a given tender is the highest orlowest depending upon whether the contract is for sale of public property orfor execution of works on behalf of the Government. All that participatingbidders are entitled to is a fair, equal and non-discriminatory treatment in thematter of evaluation of their tenders. It is also fairly well settled that awardof a contract is essentially a commercial transaction which must be determinedon the basis of consideration that are relevant to such commercial decision.This implies that terms subject to which tenders are invited are not open tothe judicial scrutiny unless it is found that the same have been tailor-made tobenefit any particular tenderer or class of tenderers. So also, the authorityinviting tenders can enter into negotiations or grant relaxation for bona fideand cogent reasons provided such relaxation is permissible under the termsgoverning the tender process.”In the case of Michigan Rubber (India) Ltd. (supra), after considering the lawon the judicial scrutiny with respect to tender conditions, ultimately it isconcluded in paragraph 23 as under:“23. From the above decisions, the following principles emerge:(a) The basic requirement of Article 14 is fairness in action by the State, andnon-arbitrariness in essence and substance is the heartbeat of fair play. Theseactions are amenable to the judicial review only to the extent that the Statemust act validly for a discernible reason and not whimsically for any ulteriorpurpose. If the State acts within the bounds of reasonableness, it would belegitimate to take into consideration the national priorities;(b) Fixation of a value of the tender is entirely within the purview of theexecutive and the courts hardly have any role to play in this process exceptfor striking down such action of the executive as is proved to be arbitrary orunreasonable. If the Government acts in conformity with certain healthystandards and norms such as awarding of contracts by inviting tenders, in thosecircumstances, the interference by courts is very limited;[6] 135.WP-2399-2024.odt(c) In the matter of formulating conditions of a tender document and awardinga contract, greater latitude is required to be conceded to the State authoritiesunless the action of the tendering authority is found to be malicious and amisuse of its statutory powers, interference by courts is not warranted;(d) Certain preconditions or qualifications for tenders have to be laid down toensure that the contractor has the capacity and the resources to successfullyexecute the work; and(e) If the State or its instrumentalities act reasonably, fairly and in publicinterest in awarding contract, here again, interference by court is veryrestrictive since no person can claim a fundamental right to carry on businesswith the Government.” In the aforesaid decision, it is further observed that the Governmentand their undertakings must have a free hand in setting terms of the tenderand only if it is arbitrary, discriminatory, mala fide or actuated by bias, thecourts would interfere. It is further observed that the courts cannot interferewith the terms of the tender prescribed by the Government because it feelsthat some other terms in the tender would have been fair, wiser or logical. Similar views have been expressed in the case of Educomp DatamaticsLtd. (supra) and Meerut Development Authority (supra).12.It is laid down by the Supreme Court in paragraph no.23 ofjudgment in the matter of N.G. Projects Limited Vs. M/S. VinodKumar Jain & Ors., 2022 LiveLaw (SC) 302, as follows :“23. In view of the above judgments of this Court, the Writ Court shouldrefrain itself from imposing its decision over the decision of the employer asto whether or not to accept the bid of a tenderer. The Court does not havethe expertise to examine the terms and conditions of the present- day economicactivities of the State and this limitation should be kept in view. Courts shouldbe even more reluctant in interfering with contracts involving technical issuesas there is a requirement of the necessary ex-pertise to adjudicate upon suchissues. The approach of the Court should be not to find fault with magnifyingglass in its hands, rather the Court should examine as to whether the decision-making process is after com- plying with the procedure contemplated by thetender conditions. If the Court finds that there is total arbitrariness or that thetender has been granted in a malafide manner, still the Court should refrainfrom interfering in the grant of tender but instead relegate the parties to seekdamages for the wrongful exclusion rather than to injunct the execution of thecontract. The injunction or interference in the tender leads to additional costson the State and is also against public interest. Therefore, the State and itscitizens suffer twice, firstly by paying escalation costs and secondly, by beingdeprived of the infrastructure for which the present-day Governments areexpected to work.” [7] 135.WP-2399-2024.odt13.We do not find that a case is made out by the petitionerthat the impugned conditions are against statutory provisions orviolative of principles of level playing field. Neither are weconvinced that those are arbitrary and designed mala fide toreduce the competition. We are not in agreement in thesubmissions advanced by the learned Counsel for the petitioner.The writ petition is dismissed. Rule is discharged.[ SHAILESH P. BRAHME ] [ MANGESH S. PATIL ] JUDGE JUDGEnajeeb..[8]