High Court
Legal Reasoning
wp-14938-2023.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.14938 OF 2023M/s. Pharmaveda (I) Pvt. Ltd.Having its registered office atB-4, Kamdar Shopping Center,Tejpal Road, Opposite Railway Station, Vile Parle East, Mumbai400 057... PetitionerVersus1.Chief Executive Officer,Zilla Parishad Nandurbar,Devmogra, Nandurbar,Maharashtra 4254122.Narmada Enterprises,At Shirpurwade Mala,Post Shirpurwade, Near Jaikheda Road,Baglan, Dist. Nashik,Maharashtra Pin 4232043.Shree Enterprises,12 Saikurpa, Ganchi Nagar Bus Stop, Dhule Road,Nandurbar City, Dist. Nandurbar,Maharashtra 4254124.State of MaharashtraMantralaya, Madam Cama Road,Hutatma Rajguru Square,Nariman Point,Mumbai 400 032... Respondents……….Mr. A. S. Khandeparkar, Senior Counsel a/w Mr. Sujay Gawade, Advocatei/b Mr. R. R. Karpe, Advocate for petitioner.Mr. P. S. Patil, Advocate for respondent No.1.[1]
Legal Reasoning
wp-14938-2023.odtMr. V. D. Sapkal, Senior Counsel i/b Mr. S. R. Sapkal, Advocate forrespondent No.2.Mr. V. M. Jaware, AGP for respondent No.4.………. CORAM : SMT. VIBHA KANKANWADI AND S. G. CHAPALGAONKAR, JJ. RESERVED ON : JANUARY 08, 2024. PRONOUNCED ON : JANUARY 18, 2024.JUDGMENT (Per Smt. Vibha Kankanwadi, J) :- .Rule. Rule made returnable forthwith. Heard learned Advocates forthe appearing parties finally by consent.2.The petitioner is challenging its disqualification in the technical bidas well as the acceptance of technical bid of respondent Nos.2 and 3 byrespondent No.1.3.The petitioner is the manufacturer of specialty food productsincluding the product under the food category 13.5 Dietetic Foods/Foodsfor Special Dietary Use. It is a company registered under the CompaniesAct. Respondent No.1 had invited bids for supply of multi-micronutrientsupplement granules to children in the age group of 3 to 6 years atAnganwadi centers in tribal areas as well as micronutrient supplementgranules to pregnant and lactating mothers in Nandurbar district. Theaction on behalf of respondent No.1 in declaring that the petitioner doesnot qualify at the time of technical bid and respondent Nos.2 and 3 are[2] wp-14938-2023.odtqualified, has been challenged on following grounds :-(1)The act is illegal and contravening theprocurement rules of Maharashtra government.(2)Though the petitioner had uploaded all thedocuments, they were not properly evaluated and thedocuments which were to be uploaded by respondent Nos.2and 3 were not visible or that facility was disabled. Thus, notransparency has been ensured.(3)Bid of respondent Nos.2 and 3 ought to have beenrejected as they were not qualifying or complying with thetender terms and conditions. (3A)Respondent Nos.2 and 3 do not have any basiclicence to manufacture or sell the tender products issued fromIndian Food Regulator, namely, FSSAI, which was seen by thepetitioner after search on the official website of FSSAI.(3B)Udyam certificate of respondent No.2 givesdifferent activity as major activity of respondent No.2 i.e.trading, that too not in food articles.(3C)Respondent No.2 uploaded document claimingexemption in payment of EMD which was wrong.(3D)Respondent Nos.2 and 3 do not have pastexperience of supply of micronutrient supplement granules.(3E)The GST documents are not proper.[3] wp-14938-2023.odt(4)Respondent No.1 had failed to appreciate that thesubject matter involves health of young children and pregnantand lactating mothers and, therefore, ought not to haveaccepted the deviations from the terms and conditions, ratherought to have followed them scrupulously and, therefore, thepetitioner has prayed for issuance of writ against respondentNo.1 for quashing his decision in holding respondent Nos.2 and3 qualified for the technical and then to the final bid.Petitioner prays for issuance of writ as against respondent No.1directing him to accept the petitioner’s bid, as the petitionercomplies with all the terms and conditions. 4.The respondents have not filed say, but tendered the documentsacross the bar at the time of submissions. 5.Heard learned Senior Counsel Mr. A. S. Khandeparkar instructed bylearned Advocate Mr. R. R. Karpe for the petitioner, learned Advocate Mr. P.S. Patil for respondent No.1, learned Senior Counsel Mr. V. D. Sapkalinstructed by Mr. S. R. Sapkal for respondent No.2 and learned AGP Mr. V.M. Jaware for respondent No.4 – State.6.Learned Senior Counsel Mr. A. S. Khandeparkar instructed by learnedAdvocate Mr. R. R. Karpe for the petitioner has taken us through all thedocuments produced by the petitioner and especially, the schedule of thetender, terms and conditions and the documents submitted by therespondents, which were downloaded from the other websites and he has[4] wp-14938-2023.odtspecifically stated that the facility of viewing the documents of respondentNos.2 and 3 from the portal which was provided by respondent No.1 wasdisabled. By pointing out the technical bid scrutiny chart, he submittedthat except the column stating that whether the terms and conditions havebeen fulfilled or not in respect of all the conditions i.e. condition Nos.1 to14 and 16, the petitioner has been held to be qualified. That means, thepetitioner had uploaded all the documents by complying with therequirements, still it is held that the petitioner has not complied with theterms and conditions of the tender. He pointed out term Nos.8 and 9 of thetender, which reads thus :-“8½fufonk/kkjdkus iqjoBk djko;kP;k lkfgR;kpk ,d uequko R;klkscr mn~;ksx ÅtkZ o dkexkj foHkkx] ea=ky;eqacbZ ;kapsdMhy ‘kk-fu- fnukad 1 fMlsacj 2016 e/;s ueqn ,u-,-ch-,y izekf.kr iz;ksx’kkGsP;k rikl.kh vgokykph izr fufonkHkj.;kP;k vafre rkj[ksi;Zar dk;kZy;hu dkekps fno’kh ldkGh11-00 rs lk;adkGh 05-00 oktsi;Zar efgyk o cky fodklfoHkkx] ftYgk ifj”kn uanqjckj ;sFks izR;{k lknj dj.ks ca/kudkjdjkghy- lknj dsysyk uequk vko’;drsuqlkj ‘kklu ekU;rkizkIr ,u-,-ch-,y- iz;ksx’kkGsrwu rikl.kh dj.;kps vf/kdkj ek-eq[; dk;Zdkjh vf/kdkjh] ft- i- uanqjckj ;kauk jkgrhy-9½fufonsrhy lkfgR;kps iz;ksx’kkGk uequk rikl.kh QhlkBh jDde fMekaM&Mªk¶V }kjs] izfr uequk #-14]000@& izek.ks]ftYgk dk;Zdze vf/kdkjh ¼eckfo½] ftYgk ifj”kn uanqjckj ;k[5] wp-14938-2023.odtukokus dk<wu efgyk o cky fodkl foHkkx] ftYgk ifj”kn uanqjckj;sFks le{k lknj djkos-” English translation of the above-said term Nos.8 and 9is as under :-“8.A sample of the materials to be supplied by thetenderer along with a copy of the NABL certified laboratoryinspection report mentioned in the Government Resolutiondated 1st December, 2016 of Department of Industries, Energyand Labour, Ministry of Mumbai by 11.00 a.m. in the morning to05.00 p.m. in the evening on office working days till the lastdate of submission of tender. It will be mandatory to submit inperson at Women and Child Development Department, ZillaParishad, Nandurbar. The Chief Executive Officer, Zilla Parishad,Nandurbar reserves the right to examine the submitted samplefrom a Government approved NABL laboratory as required.9.The amount for laboratory sample examination fee oftender materials through Demand Draft Rs.14,000/- per sample,drawn in the name of District Program Officer (Women andChild Development Department), Zilla Parishad, Nandurbar,presented personally to the Women and Child DevelopmentDepartment, Zilla Parishad, Nandurbar.” (Translated by Senior Translator and Interpreter, High Court of Bombay, Bench at Aurangabad)7.He submitted that the petitioner had complied with term No.9 andgiven the demand draft of Rs.28,000/- in respect of two samples. Hefurther pointed out that in fact the tender that was floated was the thirdtender, as the earlier two tender notices could not be taken to the logical[6] wp-14938-2023.odtend. In the second tender, the petitioner was the only bidder who was heldeligible at the technical bid and, therefore, the entire process was requiredto be cancelled. The sample which was given and the testing report waswith respondent No.1. Under the said circumstance, it was not necessaryfor the petitioner to submit the sample once again. Respondent No.1 wasrequested to utilize the same, as the validity/shelf life of the said product,that was tested earlier as per the certificate issued by the lab, was to expirein February, 2024. Under the said circumstance, it ought to have been heldby respondent No.1 that the petitioner qualifies.8.Learned Senior Counsel for the petitioner has then taken us throughthe documents of respondent Nos.2 and 3 and submitted that both of themare not the manufacturers, whereas the petitioner is the manufacturer. Thelicence of the petitioner has been pointed out and it is then stated that theGST registration in respect of respondent No.2 stands in the name ofNarmada Earth Movers and the effective date of registration is 10.10.2018.In is in a different name and this has been taken by the petitioner from thewebsite of GST. Respondent No.2 does not stand to the specifications inrespect of food category. The Udyam Registration Certificate of respondentNo.2 shows that the main business of respondent No.2 is in furniture andthe Udyam Registration Certificate of respondent No.3 shows that the mainbusiness of respondent No.3 is in retail trade, except of motor vehicles and[7] wp-14938-2023.odtmotorcycles, then retail sale of foods in specialized stores. It is submittedthat since the documents were not uploaded or they were not visible, thepetitioner’s right to see the documents of the respondents has beenwithheld unnecessarily by respondent No.1. It might be with some malafide intention also to allow those persons to comply with the requirementsof the tender. 9.Learned Senior Counsel relied on many decisions of either this Courtor Hon’ble Supreme Court mainly on the point that when the High Courtshould interfere in the tender process under its writ jurisdiction. We aretaking note of those decisions, which are as follows :-(i)Michigan Rubber (India) Limited Vs. State ofKarnataka and others, (2012) 8 Supreme Court Cases2016.(ii)Siemens Aktiengeselischaft and Siemens LimitedVs. Delhi Metro Rail Corporation Limited and others,(2014) 11 SCC 288.(iii)Elektron Lighting Systems Private Limited andAnother Vs. Shah Investments Financial Developments andConsultants Private Limited and others, (2015) 15 SCC137.(iv)P. Gopinath Reddy Vs. State of Maharashtra,Through Department of Urban Development, Mantralaya,Mumbai and others, [2018 SCC OnLine Bom. 210 : (2018)2 AIR Bom. R 586][8] wp-14938-2023.odt(v)Shri. Milan Dhibar Vs. Indian Oil CorporationLimited and Ors., decided by Calcutta High Court in WPANo.28643 of 2022 on 22.12.2022.(vi) Hitech Audio Systems Pvt. Ltd. Vs. State ofMaharashtra Through Principal Secretary Ministry of PublicWorks Department and others, 2016 SCC OnLine Bom.2660 : (2016) 3 Bom. CR 552.(vii)Inducare Pharma Pvt. Ltd. Vs. Chief ExecutiveOfficer Zilla Parishad Ratnagiri and another, decided by thisCourt at Principal Seat in Writ Petition No.11762 of 2023on 01.11.2023.(viii)Macpower CNC Machines Limited Vs. Union ofIndia, Through Development Commissioner, Ministry ofMicro Small and Medium Enterprises (MSME), [2020 SCCOnLine Del 1801].(ix)Reliable Facilities Services Private Limited andAnother Vs. Chittaranjan National Cancer Institute andOthers, [2022 SCC OnLine Cal 2850].(x)Kirvan Vendsol Pvt. Ltd. Vs. The state ofMaharashtra and Ors., decided by this Court in WritPetition No.1436 of 2023 on 03.02.2023.10.In Hitech Audio Systems Pvt. Ltd. (Supra), this Court has reiteratedthe importance of transparency. When it was found by this Court in thefacts and circumstances of the said case that the State itself and particularlythe Department of Public Works was not serious in adhering to the terms[9] wp-14938-2023.odtand conditions of the tender, it was observed that the High Court caninterfere, as the departure from the terms and conditions was markedwithout producing material to justify such deviation. On the basis of thisdecision, it was pointed out on behalf of the petitioner that here also as thetender documents of respondent Nos.2 and 3 were not visible, it appearsthat the action on the part of respondent No.1 lack transparency and thedeviation from its own policy to adhere to all the conditions as are found inthe Government Resolution dated 01.12.2016.11.When the documents were tendered across the bar, time was given tothe learned Senior Counsel for the petitioner to go through thosedocuments and make submissions. It was then pointed out that respondentNo.2 is claiming to be the agent or supplier and the manufacturer is oneNutra Healthcare Pvt. Ltd. By pointing out that the licence is only for theexperts, respondent No.2 cannot be allowed to participate. He, therefore,canvassed that the bid of the petitioner is strong and the petitioner ought tohave been held to be qualified. 12.Per contra, the learned Advocate for respondent No.1 and learnedSenior Counsel Mr. V. D. Sapkal instructed by Mr. S. R. Sapkal forrespondent No.2 had taken us through the documents filed by respondentNo.2. It was denied that the facility to view the documents of each otherwas disabled by respondent No.1. Though a complaint was filed on behalf[10] wp-14938-2023.odtof the petitioner, it appears that it was answered on 22.12.2023 and it isorally submitted by respondent No.1 that the delay was due to not comingacross such complaint application, as it was on the portal. It has beenstated on behalf of respondent Nos.1 and 2 that respondent No.2 is not themanufacturer, but the supplier, who can participate in the tender process.Only condition is that the documents of the manufacturer with whom hewould enter into the agreement or if the manufacturer gives letter ofauthorization, then to place the said on the website along with otherdocuments. Accordingly, the letter of authorization of Nutra Healthcare Pvt.Ltd. was uploaded. Licence of Nutra Healthcare and the lab testing of thesample was also uploaded. The GST Registration stands in the name ofrespondent No.2 and company by name Narmada Earth Movers might be adifferent company or sister company. The Udyam Registration Certificateof respondent No.2 also shows that it is authorized retail seller ofpharmaceutical and medical goods, cosmetic and toilet articles inspecialized stores. All the documents uploaded by in all five bidders wereconsidered and scrutinized by respondent No.1 and the Committee.Therefore, the bidder No.1 i.e. petitioner, bidder Nos.4 and 5 were declarednot eligible. The petitioner had not submitted the sample as required underthe tender condition. Even if it is accepted that the said sample was givenby the petitioner when the earlier tender i.e. similar was floated, but thatentire process has been cancelled and, therefore, the said sample could not[11] wp-14938-2023.odthave been put to use once again. A fresh sample was necessarily to betendered when a fresh tender was floated. When the petitioner himself hasbeen declared not qualified, he cannot raise questions in respect of thedecision of respondent No.1 to hold respondent Nos.2 and 3 as qualified.13.Learned Senior Counsel for respondent No.2 relied on the decision inM/s. N.G. Products Limited Vs. M/s. Vinod Kumar Jain and others, [2022LiveLaw (SC) 302] and submitted that this Court should be slow inrefraining or interfering with the tender process.14.As aforesaid, the petition is on two counts, firstly to challenge thepetitioners own disqualification and secondly, to challenge the qualificationof respondent Nos.2 and 3. We would like to rely on the observations fromthe recent decision by the Hon’ble Supreme Court in M/s. N.G. ProductsLimited (Supra), in which the earlier decisions have been taken note of andit has been observed that :-“23.In view of the above judgments of this Court, the WritCourt should refrain itself from imposing its decision over thedecision of the employer as to whether or not to accept the bidof a tenderer. The court does not have the expertise to examinethe terms and conditions of the present-day economic activitiesof the State and this limitation should be kept in view. Courtsshould be even more reluctant in interfering with contractsinvolving technical issues as there is a requirement of thenecessary expertise to adjudicate upon such issues. The[12] wp-14938-2023.odtapproach of the Court should be not to find fault withmagnifying glass in its hands, rather the Court should examineas to whether the decision-making process is after complyingwith the procedure contemplated by the tender conditions. Ifthe Court finds that there is total arbitrariness or that the tenderhas been granted in a mala fide manner, still the Court shouldrefrain from interfering in the grant of tender but insteadrelegate the parties to seek damages for the wrongful exclusionrather than to injunct the execution of the contract. Theinjunction or interference in the tender leads to additional costson the state and is also against public interest. Therefore, theState and its citizens suffer twice, firstly by paying escalationcosts and secondly, by being deprived of the infrastructure forwhich they present-day Governments are expected to work.”15.We are aware of the decision in Jagdish Mandal Vs. State of Orissa,(2007) 14 SCC 517, wherein Hon’ble Supreme Court has held that :-“22.Judicial review of administrative action is intended toprevent arbitrariness, irrationality; unreasonableness, bias andmala fides. Its purpose is to check whether choice or decision ismade “lawfully” and not to check whether choice or decision is“sound”. When the power of judicial review is invoked inmatters relating to tenders or award of contracts, certain specialfeatures should be borne in mind. A contract is a commercialtransaction. Evaluating tenders and awarding contracts areessentially commercial functions. Principles of equity andnatural justice stay at a distance. If the decision relating toaward of contract is bona fide and is in public interest, courtswill not, in exercise of power of judicial review, interfere even if[13] wp-14938-2023.odta procedural aberration or error in assessment or prejudice to atenderer, is made out. The power of judicial review will not bepermitted to be invoked to protect private interest at the cost ofpublic interest, or to decide contractual disputes. The tendereror contractor with a grievance can always seek damages in acivil Court. Attempts by unsuccessful tenderers with imaginarygrievances, wounded pride and business rivalry, to makemountains out of molehills of some technical/proceduralviolation or some prejudice to self, and persuade courts tointerfere by exercising power of judicial review, should beresisted. Such interferences, either interim or final, may hold uppublic works for years, or delay relief and succour to thousandsand millions and may increase the project cost manifold.Therefore, a Court before interfering in tender or contractualmatters in exercise of power of judicial review, should pose toitself the following questions :(i)Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone;orWhether the process adopted or decision made is so arbitraryand irrational that the court can say: “the decision is such thatno responsible authority acting reasonably and in accordancewith relevant law could have reached”;(ii)Whether public interest is affected.If the answers are in the negative, there should be nointerference under Article 226. Cases involving blacklisting orimposition of penal consequences on a tenderer/contractor ordistribution of State largesse (allotment of sites/shops, grant oflicences, dealerships and franchises) stand on a different footingas they may require a higher degree of fairness in action.”[14] wp-14938-2023.odt16.Thus, taking into consideration the well settled law on this point, wehave limited scope. We are to see whether the petitioner has demonstratedfirstly that the petitioner was eligible, as it had complied with all the tenderrequirements, then only we can go to the second aspect i.e. challenge bythe petitioner to the decision of respondent No.1 to qualify respondentNos.2 and 3 in the technical bid, otherwise the course is open to thepetitioner as aforesaid in M/s. N.G. Projects Limited (Supra) and JagdishMandal (Supra).17.The petitioner has been disqualified mainly on the ground that hehad not supplied the sample as required under condition No.8. Thepetitioner is coming with the case that in the earlier bid, he had suppliedthe sample as well as the lab testing report, in which it was indicated thatthe validity of the said certificate was till February, 2024. It was the requestof the petitioner to use the said sample and the certificate. Of course, thesaid certificate was again uploaded in the present tender process, but thesample was not handed over, though the fees were paid as per conditionNo.9. We are conscious about the fact that in any tender there would becompulsory terms and conditions and there would be some additionalconditions which may not be termed as compulsory, but the fulfillment ofthe same would add to the qualification of a bidder. The terminology thathas been used in term No.8 would show that it was a compulsory term, that[15] wp-14938-2023.odtmeans it should have been adhered to. As per the schedule, the time tosubmit samples was from 10.00 a.m. of 09.10.2023 to 5.00 p.m. of14.10.2023. When it was a fresh tender and there was absolutely nostipulation or interpretation of term in the present tender that if any personwould have taken part in the earlier tenders, then he can use thedocuments tendered at that time in the fresh process also; in that event, itwas expected that fresh sample should have been given along with a freshcertificate from the lab regarding the testing of such samples. In otherwords, the tender conditions do not support the interpretation tried to beput by the petitioner that the petitioner was justified in interpreting thatsince the shelf life and validity of the certificate was till February, 2024 andthe sample was with respondent No.1, respondent No.1 could have, in hisown discretion, accepted the request of the petitioner. In fact, if this stepwould have been taken by respondent No.1, it would have been unjust tothe other bidders. It is not on record as to whether all of the bidders in thepresent round had also taken part in the earlier occasions. If the presentbidders had taken part for the first time, then it was expected in thecompetition that everything should be fresh. It could also be simply put ina way that even if all the earlier tender conditions were fulfilled by thepetitioner on the earlier occasion, those tenders were cancelled.Cancellation had given full stop to everything and, therefore, use of anydocument or even a sample cannot be justified. We do not find any[16] wp-14938-2023.odtillegality, error, mala fide or arbitrariness on the part of respondent No.1 indisqualifying the petitioner in the technical bid on the said count. 18.When we have arrived at the conclusion that the disqualification ofpetitioner was justified, it is not necessary for us to consider the otherchallenge by the petitioner. Unsuccessful bidder cannot be allowed tochallenge the qualification of other bidders. Under the said circumstance,the petition fails. No case is made out for the exercise of constitutionalpowers by this Court and, therefore, the writ petition stands dismissed. 19.Interim relief granted thus stands vacated.20.Rule stands discharged. [ S. G. CHAPALGAONKAR ] [ SMT. VIBHA KANKANWADI ] JUDGE JUDGELATER ON :-After the pronouncement of Judgment, learned Advocate for thepetitioner prays for continuation of the interim order granted earlier.In view of the fact that we have already arrived at the conclusionthat the petitioner was not eligible and the fact that the matter is tendermatter where even Hon’ble Supreme Court says that such work should not[17] wp-14938-2023.odtbe stayed which are of the public interest, we do not find that any case ismade out for continuation of the interim order. Oral prayer stands rejected.[ S. G. CHAPALGAONKAR ] [ SMT. VIBHA KANKANWADI ] JUDGE JUDGEscm[18]