The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.7776 of 2024 M/s. Rosmerta Technologies Ltd., having its registered office at 402, 4th Floor, World Trade Tower, Barakhamba Lane, Near Lalit Hotel, New Delhi-110001, represented by its authorized Signatory Mr. Sanjay Gupta, aged about-51 years, S/o- Late Shri Kishan Lal Khandelwal, At- S-307, Ground Floor, Greater Kailash-1, New Delhi-110048. -Versus- …Petitioner 1. State of Odisha, represented by Principal Secretary, Department of Road Transport, At-Lok Seva Bhawan (State Secretariat), At/P.O.- Bhubaneswar-751001, Dist-Khurdha. 2. Chief Secretary, Government of Odisha, At-Lok Seva Bhawan (State Secretariat), At/P.O.- Bhubaneswar-751001, Dist-Khurdha. 3. Commissioner of Transport, 6th Floor, Rajaswa Bhavan, Chandini Chowk, Cuttack-753 002. 4. Cerisetech Solutions Pvt. Ltd., Preston Woods 23/A, S.No-26/1/1, New DP Road, Vishal Nagar, Pimple Nilakh, Pimpri - Chinchwad, Pune Maharashtra- 411027. 5. Saidham Super Services Solutions Pvt. Ltd., 12, Kotgaon, Near Arya Nagar Ghaziabad, Uttar Pradesh 201001. ….Opp. Parties Advocates appeared in the case: For the petitioner: Mr. Surya Prasad Misra, Senior Advocate assisted by Mr. Abhisek Agarwal, Advocate; Mr. Pinaki Mishra, Senior Page 1 of 55 Advocate assisted by Mr. Manu Agarwal, Advocate For Opp. Parties No.1 to 3: Mr. Ashok Kumar Parija, Advocate General, Odisha assisted by Mr.Pravakar Behera, Standing Counsel For Opp. PartyNo.4: Mr. Gautam Misra, Senior Advocate assisted by Mr. J.R. Deo, Advocate. For Opp. Party No.5: Mr.Sidharth Shankar Padhy, Advocate CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE MURAHARI SRI RAMAN JUDGMENT 18.06.2024 Chakradhari Sharan Singh, CJ. “The State need not enter into any contract with anyone, but if it does so, it must do so fairly without any discrimination and without unfair procedure. (Erusian Equipment & Chemicals Limited v. State of West Bengal, (1975) 1 SCC 70)” 1. Before referring to the reliefs sought by the petitioner in the present writ petition and the issues which have emerged for the Court‟s consideration based on the rival pleadings and submissions made on behalf of the parties, we consider it apposite to notice the relevant facts, at the outset, which are considered germane for a just decision of the dispute. Page 2 of 55 2. The facts, not in dispute, are that opposite party No.3 had floated a tender in the form of Request For Bid (RFB) “for selection of successful bidder for Design, Construction of Automated Testing Stations, Procurement, Supply, Installation of vehicle testing equipment and Operation and Maintenance at 21 locations in Odisha State” in e- Nivida portal as well as on the Transport Commissioner‟s web portal on 27.01.2024. 2.1 It is pertinent to mention here that Section 56 of the Motor Vehicles Act, 1988 (MV Act) provides that no certificate of fitness shall be granted to a vehicle after such date as notified by the State Government unless such vehicle has been tested in an automated testing station (ATS). The Central Government, by a notification dated 12.12.2023 has amended the provisions of Rule 62 of the Central Motor Vehicle Rules, 1989 (CMV Rules) per Section 56 of the MV Act which provides that the fitness certificate of a vehicle shall be done mandatorily, only through the automated testing stations with effect from 01.10.2024. Apparently, the aforesaid RFB was invited to setting up and operation of ATS to fulfil the statutory requirement under Section 56 of the MV Act read with Rule 62 of the CMV Rules. 2.2. Clause-2.12 of the said RFB contains “Technical and Financial Bid Conditions”, Part-1 of which prescribes “The Pre-Qualification Conditions”. Item (d) of said Part-1 of Clause-2.12 lays down twenty- three pre-qualification conditions, 23rdof which reads as under: - “(d) The Pre-qualification conditions of Technical Bid and the necessary documents to be submitted along with Technical Bid, are given in the table below: Page 3 of 55 S. No. 23 Table-2 Pre-Qualification Conditions on non- Declaration legal involvement of litigation by bidder or the any member of bidder of case consortium/partnership) (in Documents to be submitted along with Technical Bid Notarized Affidavit As per form (S) Note: (a) All Forms of this RFB, required in support of Technical Bid Conditions, must be filled and submitted by the Bidder.” 2.3 Form (S) as mentioned in the 3rd column at Sl. No.23 of Table- 2 reads thus: “FORM (S) UNDERTAKING REGARDING LITIGATION/ARBITRATION (To be filled by sole bidder/each consortium partner) (Duly notarized to be submitted along with Technical Bid) FORMAT OF UNDERTAKING, TO BE FURNISHED ON COMPANY LETTER HEAD WITH REGARD TO SOLE LITIGATION/ARBITRATION, BIDDER/CONSORTIUM MEMBER BY To, The Transport Commissioner, Odisha, Odisha 6th Floor, RajaswaBhawan, Cuttack-753002, confirm and declare We hereby - __________________, does not have any litigation/Arbitration History with any Government department/Public Sector Undertaking/Private Sector/or any other agency for which we that we, M/s Page 4 of 55 have Executed/undertaken the works/Services during the last 10 years. For_______________________” Authorised Signatory Date: (Underscored for emphasis) 2.4 It is manifest, on close reading of the pre-qualification conditions at Sl. No.23 of Table-2 read with Form (S) that a declaration of non- involvement in a litigation of a bidder or any member of the bidder (in case of consortium partnership) was to be mandatorily submitted by way of notarized affidavit in Form (S). A bidder, thus, to qualify for the bidding process had to essentially give an undertaking in Form (S) to the effect that it did not have any litigation, or arbitration history with any Government/Public Sector Undertaking/or any other agency during the last 10 years. The said provision thus excludes such companies from participating in the bidding process that have any litigations/arbitration history with any Government Department/Public Sector Undertaking/private sector or any other agency during the last 10 years. 2.5 The petitioner is a Company duly registered under the Companies Act, 1956. It has been averred in the writ petition, which has not been denied by the opposite parties, that it is a leading player in the Road and Rider safety domain and a unique solution provider for the transport
Legal Reasoning
sector. It is the largest operator and the first one to start the transition of commercial vehicle fitness certification from manual process to Automated fitness testing at Inspection and Certification Centers (I & C Centres), which are now called as “Automated Testing Stations (ATS) Centers”. Since 2015, the petitioner is said to have established and is Page 5 of 55 operating a majority of the Automated Inspection and Certification Centers for the Government of India and various State Governments. It has vast experience in the software development and Information Technology domain which is involved in the Research and Development of innovative applications and solutions in the field of Video analytics focusing mainly on the Road Safety Sector. It is the only company in India which has both the technologies available for driving tests used in
Legal Reasoning
India, the petitioner claims. 2.6. The date for downloading the bid document was fixed to 29.01.2024 and the last date of submission of bids to 19.02.2024. The date for submission of pre-bid queries was fixed to 05.02.2024 and a pre-bid meeting was scheduled to be held on 07.02.2024. As per the schedule, a pre-bid meeting was conducted through virtual mode on 07.02.2024 in which certain queries were raised by aspiring bidders, whereupon, replies to the pre-bid queries were uploaded on the Transport Commissioner‟s web portal as well as e-Nivida portal. Further, based on queries raised by the bidders, certain clauses of the terms of RFB were modified and accordingly a corrigendum dated 12.02.2024 was published and uploaded to the e-Nivida portal. In the said corrigendum, Sl. No.2 of Clause-1.2 was revised as under: “Bid Processing Fee (Non-refundable) Rs.l0,000/-(Ten Thousand only) Bid Processing Fee plus taxes as applicable. Bid Processing Fee shall be paid via the Online Portal being used for tendering. “The eNivida Portal is showing an option of paying this fee in BG form. Bidder shall select this option and enter DD details instead of Page 6 of 55 BG details and submit the DD in original along with the Hard copy of the technical bid.” 2.7 The last date of submission of bid online was extended from 11.02.2024 to 11.03.2024. Another corrigendum No.2 was issued on 01.03.2024 containing tentative layout designs of 21 locations which was uploaded on the web portal of eNivida as well as the Transport Commissioner‟s web portal. 2.8 Before the last date of online submission of the bid i.e., 11.03.2024, the petitioner through his e-mails dated 05.03.2024 and 06.03.2024 requested for change of certain clauses in RFB asserting that it had earlier raised certain queries in the pre-bid meeting which remained unanswered by opposite party No.3. The petitioner had specifically stated in his e-mail that pre-qualification condition at Sl. No.23 of Table 2 read with Form (S) was onerous, arbitrary, capricious, and as such was irrelevant for the purpose of tender. After receipt of those e-mails, opposite party No.3 published a clarification to the pre-bid queries on 07.03.2024. The petitioner, however, continued with its grievance that the query as regards Sl. No.23 of Table-2 and Form (S) had not been met as the said condition had not been removed from the tender condition. The petitioner sent another e-mail on 10.03.2024 to opposite party No.3 with a request for an extension of time for submission of the bid. The Office of opposite party No.3 published a corrigendum on 11.03.2024 extending the last date of submission of the bid to 16.03.2024 with revised BOQ. The petitioner approached this Court, in the meanwhile, by filing a writ petition giving rise to W.P.(C) Page 7 of 55 No.5660 of 2024 challenging the pre-qualification condition at Sl. No.23 of Table-2 regarding the declaration on non-involvement of legal litigation by the bidder in Form (S) on the ground that the aforesaid condition was inherently illegal and no individual or company could ever file an affidavit that he or they were, at no point of time, might have been made involved in litigation on the date of submission of the aforesaid bid. 2.9 Challenging the aforesaid pre-qualification condition on the grounds, inter alia, that the same was violative of Articles 14 and 19 (1) (g) of the Constitution of India, the petitioner sought for a declaration that the aforesaid condition in the tender bid was invalid and not sustainable in the eye of law. The said W.P.(C) No.5660 of 2024 came to be disposed of on 11.03.2024 by a co-ordinate bench of this Court with the following order: “xxx xxx xxx 4. In course of hearing, learned counsel appearing for the the petitioner has already made petitioner states representation before Opposite Party No.3 vide Annexure-6, and the same may be directed to be disposed of within a stipulated time, to which learned Counsel for the State has no objection. that 5. As agreed by learned counsel for the parties and after going through the records, this Court, without expressing any opinion on the merits of the case, disposes of the Writ Petition directing the Opposite Party No.3 representation filed by the petitioner vide Annexure-6 and pass appropriate order as early as possible within a period of three months from the date of production of certified copy of this order.” to consider and dispose of 2.10 The said order dated 11.03.2024 was communicated to opposite party No.3 with a request to consider his representation dated Page 8 of 55 05.03.2024. An order was, accordingly, passed by opposite party No.3 on 14.03.2024, disposing of the petitioner‟s representation dated 05.03.2024 with the following observation: - “In the representation dated 05.03.2024 Annexure-6, the petitioner-M/s. Rosmerta Technologies Limited has requested to clarify Clause-2.12, Table-2, Sl. No.23, Section-9 Clause-4 in the table and Form-A and S of the RFB. In Clause-23, Table-2, to submit declaration is required regarding non-involvement in legal litigation by the bidder or any member of consortium/partnership). The said declaration was very clear and unambiguous required to be submitted in Form-S”. the bidder bidder case the (in of (underscored for emphasis) 2.11 The petitioner filed another writ petition before this Court giving rise to W.P.(C) No.6277 of 2024 again challenging the same pre- qualification condition at Sl. No.23 of Table-2 read with Form (S) of the RFB, in view of the evident compelling circumstance that the last date for submission of bid was 16.03.2024 and its representation against the said pre-qualification condition clause was yet to be decided. 2.12 It is the case of the opposite parties that the petitioner filed the writ petition i.e., W.P.(C) No.6277 of 2024 on 14.03.2024 itself without awaiting the disposal of his representation. Be that as it may, the W.P.(C) No.6277 of 2024 was also disposed of on 15.03.2024 by the same co-ordinate bench of this Court by the following order: “This matter is taken up through hybrid mode. 2. Heard. 3. The Petitioner has filed this writ petition with the following prayer: “In the circumstances, it is most humbly prayed that, your Lordship may be graciously pleased to interfere in the matter Page 9 of 55 and issue a RULE NISI in the nature of certiorari/mandamus calling upon the Opp. Parties to Show Cause as to why: a) Clause No.23 Part-I: The Pre-qualification conditions, Form(S) and clause-4 of Section-9 Evaluation Parameters, Evaluation Criteria (Technical Bid) of the Request for Bid for construction of automated testing station, procurement, supply, installation of vehicle testing equipment and operation & maintenance at 21 locations in Odisha State dated 27.01.2024, shall not be declared null and void, b) The opposite parties shall not be restrained in rejecting the Petitioner's bid for the RFB on the ground of failure to satisfy Clause No.23 Part-1 The Pre-qualification conditions, Form(S) and/ or clause-4 of Section-9 Evaluation Parameters, Evaluation Criteria (Technical Bid) of the Request for Bid for construction of automated testing station, procurement, supply, installation of vehicle testing equipment and operation & maintenance at 21 locations in Odisha State dated 27.01.2024; c) The Opp. Parties shall not be directed not to issue necessary corrigendum for extension of date of invitation of the aforesaid competitive Bid during pendency of the present Writ Petition; AND in the event, the opposite parties fail to show-cause or show insufficient cause, a) Clause No.23 Part-I: The Pre-qualification conditions, Form(S) and clause-4 of Section-9 Evaluation Parameters, Evaluation Criteria (Technical Bid) of the Request for Bid for construction of automated testing station, procurement, supply, installation of vehicle testing equipment and operation & maintenance at 21 locations in Odisha State dated 27.01.2024, be declared null and void; b) The opposite parties be restrained in rejecting the Petitioner's bid for the RFB on the ground of failure to satisfy Clause No.23 Part-1 The Pre-qualification conditions, Form(S) and/or clause-4 of Section-9 Evaluation Parameters, Evaluation Criteria (Technical Bid) of the Request for Bid for construction of automated testing station, procurement, supply, installation of vehicle testing equipment and operation & maintenance at 21 locations in Odisha State dated 27.01.2024, c) The Opp. Parties be directed not to issue necessary corrigendum for extension of date of invitation of the aforesaid competitive Bid during pendency of the present Writ Petition.” 4. In course of hearing, learned counsel appearing for the the Petitioner has already made Petitioner states that Page 10 of 55 representation before the Opposite Party No.2 vide Annexure- 12, and the same may be directed to be disposed of within a stipulated time, to which learned Counsel for the State has no objection. 5. As agreed by learned counsel for the parties and after going through the records, this Court, without expressing any opinion on the merits of the case, disposes of the Writ Petition directing Opposite Party No.2 the representation filed by the Petitioner vide Annexure-12 and pass appropriate order as early as possible within a period of three months from the date of production of certified copy of this order.” to consider and dispose of (Underscored for emphasis) 2.13. Faced with a situation where the opposite party No.3 was directed to consider the petitioner‟s representation by this Court‟s order dated 15.03.2024 within a period of three months and the last date for submission of the bid was 16.03.2024, the petitioner submitted his bid and communicated to the opposite party No.3 about submission of the technical bid through e-mail dated 16.03.2024, without prejudice to its contention in respect of the aforesaid impugned tender conditions. 2.14. It is also an admitted fact that only three bids were submitted, one by the petitioner, who questioned the sustainability of the requirement at Sl. No.23 of Table-2 read with Form (S) of the RFB and two others who are opposite parties No.4 and 5 herein, whose technical bids have been found responsive by the bid evaluation committee, and have no litigation/arbitration history at all. 3. It is apposite to note at this stage that Clause 2.8 of the RFB required the bids to be accompanied by an Earnest Money Deposit (EMD) of Rs.80,00,000/- (Rupees Eighty Lakh) payable in the shape of Page 11 of 55 a demand draft drawn in favour of “Transport Commissioner, Odisha” issued by any nationalized bank payable at Cuttack to be attached along with the technical bid of the tender. 4. It is also relevant to mention that Clause 2.9 of the RFB prescribed deposit of a „bid processing fee‟ as under:- “2.9 BID PROCESSING FEE (a) The Bidders shall deposit bid processing fee of Rs.10,000/- (Ten Thousand Only) Bid Processing Fee plus taxes as applicable. (b) The Bid Processing Fee is non-refundable. (c) A Bid which is not accompanied by Bid Processing Fee as per this RFB shall be construed as non-compliant bid and shall be summarily rejected. (d) Bid Processing Fee shall be paid Online on the Tendering Portal.” (Highlighted for emphasis) 5. Clause 2.10 prescribed the procedure for submission of bids according to which the process of bid submission was to be online on the tendering portal in the necessary format mentioned in the RFB. The said Clause 2.10 also prescribed that a two part-bid system would be followed for the RFB with a Quality and Cost Based Selection (QCBS) criterion. It is pertinent to mention here that section 9 of the RFB lays down the evaluation criteria. It states that the evaluation of the bids shall be done by a bid evaluation committee constituted for the purpose. The evaluation shall be strictly based on the information and supporting documents provided by the bidders in the bid. It emphasises that it is the responsibility of the bidder to provide all supporting documents necessary to fulfil the mandatory eligibility criteria. In case, the required Page 12 of 55 information is not provided by the bidder, the bid evaluation committee shall proceed with the evaluation based on information provided and will not request the bidder for further information. It is clearly mentioned under Section 9 of the RFB that any bid submitted by the bidder, which fails to satisfy the eligibility requirements shall not be considered and summarily rejected. 6. The said section 9 of the RFB also lays down the methodology for evaluation and states that the technical bids shall be tabulated by the bid evaluation committee in the form of a comparative statement to evaluate the qualification of the bidders against the criteria for technical qualification set out in the RFB below. It mandates that the members of the bid evaluation committee shall evaluate the technical bids received and shall give marking as per below mentioned marking scheme table. It further lays down the technical proposal evaluation criteria and states that the bidders who qualify in the pre-qualification criteria shall be considered as qualified for technical evaluations. It also states that the bid evaluation committee shall consider documents submitted as part of technical evaluation. 7. The quality and cost-based selection (QCBS) for technically qualified bidders has been given in the table from which it can be easily inferred that against total technical score of hundred Marks, 30 was allotted to bidder financial capacity, 30 for technical experience 20 for key professional experience and the rest 20 for subjective marketing on proof of concept. It is the petitioner‟s case that the opposite parties No. 4 and 5 have no technical experience at all in the field and they could not Page 13 of 55 have competed with the petitioner had the petitioner‟s technical bid been evaluated. Further, the bid technical experience for technical evaluation lays down that the sole bidder/any consortium member shall be an OEM should have experience of manufacturing and supplying of test plane equipment globally consisting of at least 4 test plane equipment mentioned in rule 190 of the CMV Rules. Different marks have been allotted based on the experience of manufacturing and supplying of test plane equipment. For example for 4 to 7 equipment 5 Marks has been allotted whereas for 7 to 10 equipment a bidder is entitled to 10 Marks. For more than 10 equipment, a bidder is entitled to full marks of 20 against bidder technical experience. Similarly, separate marks have been assigned based on the bidders experience of successfully conducting number of equal fitness tests during the last 5 financial years in India as on bid submission date. For one thousand to 10,000 tests bidder is to be allotted 5 Marks and from 10,000 one to 20,000 tests, 7 marks and for more than 20,000 tests, full 10 Marks. It is not disputed that the bidders whose technical bids have been found responsive, have no technical experience. Following table contained in RFB demonstrates the technical bid evaluation criteria:- Sole Section B. Bidder Technical Experience bidder/any The consortium member shall be an OEM should have experience and manufacturing of supplying of Test Lane equipment globally consisting of at least 4 (Four) test lane equipment mentioned in CMV rule 190 4 to 7 Equipment 7 to 10 Equipment More than 10 equipment 20 5 10 20 Page 14 of 55 The Bidder (or any member of have consortium) the experience successfully of conducting no of vehicle fitness tests during the last five (3) financial years in India as on bid submission date. Section C. Key Professional Experience 1000 to 10,000 tests 10,001 to 20,000 Greater than 20,000 tests The sole Bidder/Any member of the consortium should have at least 100 technical staff on their payroll having experience in (Equipment service/IT servicing/Software Services) at the time of bid submission 100 to 150 employee 150 to 200 employees 200 or more employee Section D. Proof of Presentation and Demonstration as 1) ATS infrastructure and other per CMVR Facility Guidelines & Demo of all Equipments as per CMVR Norms. to 2) Efficiency of and modularity of Equipment‟s communication Easy the least complex system with wiring for speedometer tester, tester, tester, break sideslip trouble shoot Materials of construction shall be corrosion resist for speedometer tester, sideslip tester, break suspension tester, joint play tester, tester, electronic turn cable: Solvent based Paints at least two coats of inc chromate primer followed by two coats of synthetic Enamel Paint. Epoxy Paints &Ho: dip Galvanized LAN/BT/Wi-fi USB/rs232/rs485 CAN 10 20 5 7 10 10 15 20 2 5 20 2 1 2 3 5 5 Page 15 of 55 suspension tester, joint play tester, electronic turn cable. 3) Safety features for safe vehicle testing: 4) Following inbuilt artificial intelligence and features to ensure correct vehicle testing test reading & and correct Presentations ATS networking. of Any one-2 5 Any two-3 All-5 Any one-2 Any two-3 All -5 force 1. Vehicle axle park assist on roller set and for interlock safety in case wrong parking or failure of sensing devices for break and tester speedometer tester. 2. Immediate roller stoppage after achieving maximum in breaking case of break tester hence power saving and no damage to vehicle. health 3. Smart of detection tester speedometer for required pneumatic pressure, axle alignment roller. 1. Smart vehicle type detection to correct ensure selection of vehicle type/ category by break tester. 2. Inbuilt AI feature to detect the vehicle visual faults, such as tape, reflector SUPD. RUPD, windshield etc. 3. Integrated plate surface of friction > 0.6 for suspension tester (both side) and joint play tester (one side) for better Page 16 of 55 locking of vehicle wheel tester on surface. Inbuilt 4. for mechanism of removable deformities stress from tyre resulting in false reading for sideslip tester. 8. The petitioner submitted the physical technical bid documents on 18.03.2024. On 18.03.2024, the bid opening process of the technical bid was conducted in the presence of the representatives of the bidders. After opening the envelope submitted by the petitioner containing the bid processing fee, it was observed by the bid evaluation committee that the bid processing fee of Rs.10,000/- submitted by the petitioner in the shape of bank draft was not in conformity with Clause 2.9 of the RFB. The petitioner's bid was rejected by the impugned communication stating that “Tender fee amount submitted by the bidder is INR Rs.10,000/- which is less than the requisite amount INR Rs.10,000 plus applicable tax, which comes to INR Rs.11,800/- as per the section 1 Table 1 Serial No.7 in the RFB”. Consequently, on 28.03.2024, the technical bids of opposite parties No.4 and 5 were evaluated and declared responsive. It may be noted that it is the stand of the State Opposite Parties that the petitioner had not paid the GST amount @ 18% in addition to the bid processing fee of Rs.10,000/-. The draft amount of Rs.10,000/- paid by the petitioner against the bid processing fee was, thus, computed as Rs.8,475/- +18% of GST ( Rs.1525/-) i.e. a total of Page 17 of 55 Rs.10,000/-.The tender committee considered the same and rejected the petitioner‟s bid applying sub-clause (c) of Clause 2.9 of the RFB. 9. This is the factual background in which the present writ petition has been filed seeking the following reliefs: - (a) The impugned communication vide e-mail dated 18.03.2024 issued by Opposite Party No.3 vide Annexure-4 rejecting the bid of the Petitioner be set aside/quashed; (b) Clause No.23 of Part-I of the Pre-qualification conditions and Form (S) of the Request for Bid, be declared null and void; (c) The Opposite Party Nos.1 to 3 be directed to re-evaluate the Technical Bid submitted by the Petitioner on 18.03.2024 in respect of the RFB dated 27.01.2024 and restrain them in rejecting the Petitioner‟s bid on the ground of failure to satisfy Clause No.23 of Part-I of the Pre-qualification conditions and Form (S) of the RFB. 10. It is the petitioner‟s case as pleaded in the writ petition that opposite parties No.1 to 3 were cognizant of the unsustainability of the impugned tender conditions, as highlighted by the petitioner in the earlier writ petition but rejected the petitioner‟s bid on the highly specious ground of not having submitted GST of Rs.1,800/- along with the bid processing fee of Rs.10,000/-. It is due to inconsistency, and mismatch between the terms of the RFB and the designated online portal eNivida, for payment required to be made, the petitioner had no other option but to make all payments as specified on the online portal. The online portal showed the bid submission of the petitioner as a „success‟. Page 18 of 55 It has also been pleaded in the writ petition that the petitioner had cumulatively paid a higher sum than what is stipulated under the tender documents inasmuch as while the tender document required the bidder to pay a total sum of Rs.10,000/- plus taxes and Rs.80Lakhs, which on considering the highest GST slab of 28% on the Bid Processing Fee, comes to Rs.80,12,800/-, the petitioner had made a total payment of Rs.80,12,950/-. 11. It is also an admitted fact that after the rejection of the petitioner‟s bid on 18.03.2024, the petitioner submitted a demand draft of Rs.1,800/- by way of demand draft No.518682 towards GST amount as asked on the Form fee on 20.03.2024. 12. Based on the above-noted facts, it can easily be discerned that the petitioner had questioned the validity of the pre-qualification conditions at Sl. No.23 of Table-2 read with Form (S) right from the beginning, soon after the RFB was floated. It has, however, not been disqualified with reference to the said disqualifying condition rather its technical bid has been rejected on the ground that it failed to pay GST amount of Rs.1,800/- requisite under Clause 2.9 of the RFB. 13. The petitioner asserts that it has been awarded the contract for setting up of ATS at 13 identified places in the State of Maharashtra for five years. It has huge turnover of 250 crores and a net worth of Rs.260 crores and has participated in more than 315 government tenders to date and has been awarded more than 175 contracts pursuant thereto over a period of the last 15 years. In that background, it is the petitioner‟s case Page 19 of 55 that the impugned tender conditions, which required that there should have been no litigation/arbitration history of the bidder in the past 10 years is a unique condition, which has no rationale to any legal object and has the consequence of ousting of all largest companies in the country, which have expertise in the field. It is asserted that only such companies which have either no experience or limited experience can
Decision
meet such conditions. It has been stated in the writ petition that whereas the tender document specified the processing fee as Rs.10,000/- + taxes as applicable, the designated eNivida portal did not have any option under the head of the bid processing fees. The online portal to be used for making payments had only the following heads:- (i) Form fee Rs.10,000/- (ii) TPF (tender processing fees) Rs.2950/-; (iii) EMD Rs.80,00,000/- (Rupees Eighty Lakh). 14. There was no amount as specified under the head of the bid processing fee in the Form. There was a „Form fee‟ of Rs.10,000/- prescribed on the portal which had no reference in the tender documents and there was an additional amount towards TPF of Rs.2,950/- which did not find any mention in the tender document. Therefore, there was a clear mismatch between the terms of the tender documents concerning the payment required to be made and the online portal used for making the payment. 15. It is also the petitioner's allegation that the RFB contemplates award of two contracts, to the highest and the second highest bidders respectively and as such it has now become a foregone conclusion that Page 20 of 55 the contracts under the tender shall be awarded to the opposite parties No.4 and 5 only, who have no experience at all in this highly technical field, in absence of any other competitor only the sole ground that they fulfil pre-qualification of no litigation history. 16. The petitioner has assailed the rejection of bid on specious ground of short payment of Rs.1800/- only. 17. In the counter affidavit filed on behalf of the opposite party No.3, the rejection of the petitioner‟s technical bid has been justified on the ground that it was clearly mentioned under Clause-2.9 that a sum of Rs.10,000/- plus taxes as applicable was required to be paid as the bid processing fee. The petitioner had deposited Rs.10,000/- only against the bid process fees and, therefore, the amount paid by the petitioner against bid processing fee was rightly treated as Rs.8,475/- + 18% GST i.e. Rs.1,525/- (total Rs.10,000/). There being specific provisions under Clause 2.9(c) that the technical bid shall be rejected that a bid which is not accompanied by a bid processing fee as per the RFB shall be construed as non-compliant bid and shall be summarily rejected, the petitioner‟s technical bid was rightly rejected. Further, the petitioner realized the defect as regards non-payment of applicable taxes provided under Clause-2.9 and, therefore, subsequently paid the sum by way of a demand draft of Rs.1,800/- after the bid submission date, on 19.03.2024. The opposite party No.3 has relied on paragraph 9 of the letter dated 20.03.2023 written by the petitioner in this regard, which has been quoted in the preliminary counter affidavit filed on behalf of opposite party No.3, which reads thus:- Page 21 of 55 “9. Further, the amount allegedly under paid by us being small, we have immediately upon the default being brought to our attention by uploading of the rejection of our bid on the e-Nivida portal on 18.3.2024, have physically submitted demand draft of Rs.1800/- by way of demand draft No.518682 drawn on ICICI Bank dated 19.3.2024 towards the GST amount as asked on the Form fee on 20.3.2024. Proof of payment is enclosed as Annexure-C.” 18. Refuting the petitioner‟s contention as regards payment of Rs.2,950/-, it has been stated that such payment cannot be said to have formed part of the payment as required under Clauses 2.9 and 2.8 of the RFB. The said amount if any may have been paid by the petitioner through online for the charges providing service in respect of the bid documents in e-Nivida portal. Such a rejection of the petitioner‟s technical bid on the ground of the same being non-compliant in terms of Clauses 2.9 (c) and 2.20(c) of the RFB by a Committee duly formed for evaluation of the bid cannot be said to be actuated with mala fide or perverse. It has been argued that the petitioner after having submitted the tender and, thus, participated in the bidding process, cannot turn around to question the tender process itself. 19. It has been asserted that the tender bidding system was floated as per the CVC guidelines and the bidding system is to be followed as per the present RFB with QCBS criterion in which even a single tender can be accepted with the approval of the Government. 20. It is significant to note that since during the course of hearing of the matter, the Pre-qualification condition in item 23 of Table-2 of Part-1 Page 22 of 55 read with Form (S) of the RFB was assailed also on the ground of the same having been introduced with mala fide intention purposefully to exclude other bidders, capable of setting up and operationalize the ATS, a further affidavit has been filed on behalf of opposite party no.3, making following statements of crucial nature: “1. That the Request for Bid (RFB) was invited by the opposite party No.3 vide Bid Invitation No. RFB No/LX- 10/2024/1504/TC, dated 27.01.2024 under Annexure-A/3 for setting up and operation of Automated Testing Station thereby setting certain eligibility criteria/pre-qualification condition requires to be complied with by the bidders and to be submitted along with the technical bid. 2. That the aforesaid Tender has been invited to carry out the mandatory provision of Section-56 of the Motor Vehicles Act, 1988 which provides that no certificate of Fitness shall be granted to a vehicle, after such date as notified by the Central Govt., unless such vehicle has been tested in an automated testing station. 3. That in view of the aforesaid provisions of the Motor Vehicles Act, 1988 the Central Govt. vide Notification dated 12.12.2023 has amended the provisions of Rule-62 of the Central Motor Vehicle Rules, 1989 which provides that the Fitness Certificate of a vehicle shall be done mandatorily only through an automated testing station w.e.f. 1st October, 2024. It is therefore humbly submitted that, the State is required to operationalize 21 (Twenty-One) Automated Page 23 of 55 Testing Stations before 01-10-2024 for ensuring the provisions of Section 56 of MV Act, 1988 read with Rule 62 of CMV Rules, 1989. 4. That the present tender is therefore designed to complete the Automated Testing Stations by the aforesaid period where time is of essence. One of the tender condition in Table-2, Clause-23 (Form -S), wherein it has been stipulated that, a declaration on non-involvement of legal litigation by bidder or any member of the bidder (in case of consortium/partnership) to be submitted by way of Notarized Affidavit in Form-(S) has been adopted by this opposite party No -3 in view of the guidelines contained in the “Manual for Procurement of Works” issued by the Department of Expenditure in Ministry of Finance, Government of India. In view of said procurement guideline the instant clause has been incorporated in the tender floated by several departments under the government of India / State Government as well as PSUs. True copy of “Manual for Procurement of Works” issued by Government of India & copies of some of the tenders invited by various department under the State /Central Government & PSUs are annexed herewith as Annexure-K/3 & L/3 Series respectively. 5. That after noticing similar clauses in the tender documents floated by different State / Central government organization & PSUs as under Annexure L/3 Series, the impugned clause has been stipulated in the instant tender. The said clause was Page 24 of 55 not inserted with mala fide intention to exclude any bidders who are capable of setting up & operationalize the Automated Testing Station. 6. That it is humbly submitted that the setting up Automated Testing Station & its operation being a highly specialized job, there are limited players in the market. The equipment to be installed at each Automated Testing Station has been specified by MoRTH under Rule 190 of CMV Rule,1989. There are only about 9 (Nine) equipment manufacturer from all over the world who are operating in India. 7. That without prejudice to the aforesaid submissions it is humbly submitted that the Opp. Party No. 3 is willing to allow the other available bidders/ players in the country as stated above to participate in the present bid by deleting clause -23, Form-(s) for the said new players/ bidders by issuing appropriate notices in the present tender. Such a step will not affect the bidders who have participated in the present tender and it will only be for new players/ bidders.” (highlighted for emphasis) 21. In the said affidavit, it has been asserted that the said clause under challenge was incorporated in the RFB after noticing similar clauses in the tender documents floated by the different State/ Central Government organizations and PSUs. Copies of such tender documents have been brought on record by way of Annexure-L/3 series. One such document is Page 25 of 55 in the form of an undertaking with regard to non-litigation in Form-3 in the Request for proposal issued by the Council of Scientific and Industrial Research, National Aerospace Laboratories, paragraph-9 of which refers to requirement of submitting no litigation certificate as per the format provided in Form-3 which is similar to Form (S) of the RFB. 22. Another tender document for supply of Server item for Vision XT‟s Artificial Intelligence (AI) Lab at National Institute of Fashion Technology (NIFT), Chennai is part of the said Annexure-L/3 series which also requires submission of similar undertaking. 23. Mr.Pinaki Mishra, learned Senior Counsel appearing on behalf of the petitioner has argued that the impugned tender conditions relating to absence of litigation are inherently arbitrary, unconscionable and violative of Articles 14 and 19 of the Constitution of India. He contends that every legal person can sue and be sued and no adverse inference can be drawn therefrom. He has argued that on a bare reading of the offending clause, the said disqualification would attach to a bidder who has filed a suit for recovery of any legitimate claim against any person or has filed a writ petition for enforcement of any legal or fundamental right or a suit has been filed by any person against the bidder, rightly or wrongly. The said Pre-qualification conditions discriminate between the people who may have invoked legal remedies for redressal of their grievances or enforcement of their rights, including fundamental rights and those who did not have any occasion to do so. It also discriminates against the people, against whom any person had filed a false and/or frivolous legal proceeding. These are not intelligible differentia with any Page 26 of 55 rational nexus to any legal object to be achieved to justify such classification which is therefore violative of Articles 14 of the Constitution. He has vehemently argued that the impugned condition is vitiated by mala fide as they have clearly been inserted to exclude all highly experienced bidders, and particularly, the petitioner, whose technical score in the Quality and Cost Based Selection bid process (QCBS) under RFB with 70% weightage to the technical score is highly likely to oust the favoured bidders. He contends that the opposite parties no.4 and 5 are such favoured bidders, which is evident from the fact that they have been able to submit the declaration contained in Form (S) of having no litigation experience in the last 10 years. 24. In response to the stand taken on behalf of the State-opposite parties that the impugned conditions were inserted after noticing similar clauses in the tenders floated by the different State/ Central Government organizations and PSUs, he has submitted that the same have no bearing on the validity of the impugned conditions. The tender so floated by some of the organizations does not tantamount to judicial determination of their validity. He has further argued that complete tender documents allegedly containing such conditions have not been placed on record and thus it is not clear whether the text of the tender documents in those cases contain any ameliorating conditions, reducing the rigour of an undertaking in the nature of Form (S). In any event, the action of the State-opposite parties cannot be said to be bona fide on the said ground. 25. He has argued that admittedly, there are only nine equipment manufactures from all over the world who are operating in India in the Page 27 of 55 field of ATS. Two bidders, allegedly comprising of six participants, are those with no litigation history, and have successfully submitted Form (s). No bidder, except the petitioner who does not meet the condition had submitted the bid. In such circumstances, the contracts under RFB are liable to be awarded to these two bidders, as the RFB contemplates the award of contract to both the H1 and H2. The mere fact that the State was able to find clauses in some other tenders, which ensures the selection of these two bidders only, does not militate against the overwhelming evidence of the conditions being tailor-made to favour opposite parties no.4 and 5, he contends. He has argued that the impugned conditions relating to non-litigation deserves to be set aside/withdrawn, which should be done either by way of issuance of corrigendum and extending the date for bid submission (as suggested by the State Government) or by setting aside the entire tender process and with a direction for issuance of fresh tenders notices. In either case, the petitioner should be permitted to resubmit its bid for the following reasons: i. The RFB contemplates that after submission of the final bid a bidder may resubmit the bid, and the bid would accordingly be updated, per clause 2.2 (o) and 2.2 (p) of the RFB. The mere fact that the petitioner‟s earlier bid was rejected, without opening the technical bid proposal, would not take away this option of resubmission of the bid till the last date for bid submission. ii. Any corrigendum/ modification in the bid document gives additional right to the previous bidders to resubmit their bid per Page 28 of 55 clause 2.17 (f) of the RFB. This right also does not get washed away by the earlier summary rejection of the bid. iii. A modification in the tender amounts to a fresh invitation to offer. This invitation to offer must be open to all participants who have not been blacklisted. 26. Assailing the rejection of the petitioner‟s bid, it has been argued by him that the bid was required to be submitted and the payment of the requisite amounts with the bid was required to be made through e-Nivida web portal. The RFB required payment of bid processing fee of Rs.10,000/- plus “taxes as applicable”. He has reiterated that the opposite party no.3 in its counter affidavit has stated that the tender processing fee of Rs.2950/- is not provided in the RFB and the same does not form part of the payment as required under Clause 2.9 and 2.8 of the RFB but the said amount is “akin to the requirement under the RFB”. He argues that as per the e-Nivida portal, which was the designated portal for bid submission against RFB, on the other hand, there was no amount specified under the head of „Bid Processing Fees‟ instead following payments were specified: - “Form Fee: Rs.10,000/-; Tender Processing Fee (TPF): Rs.2,950/-“ 27. The petitioner had made the payment as stated above and the e- portal had returned the status of success. When the petitioner was informed on 18.03.2024 that there was short payment of Rs.1800/- for which the bid was summarily rejected, the petitioner paid the alleged short amount of Rs.1800/- on 20.03.2024. He has accordingly submitted Page 29 of 55 that if there was any error in deposit along with the bid, to the extent of small amount of Rs.1800/-, the said error is attributable to the opposite parties to a significant extent. The inadvertent error which was rectifiable was rectified immediately on being notified without any prejudice having been caused to opposite party no.3. 28. He has further argued that in any event, even if it is presumed that the petitioner had failed to deposit the GST amount in addition to the bid processing fee, the said condition cannot be treated to be such essential requirement as to reject the bid at the outset. He has argued that once the amount was deposited soon after the same was notified by opposite party No.3, opposite party No.3 ought to have reconsidered the same. In support of his submission, he has placed reliance on a Division Bench decision of this Court in case of Nestor Pharmaceuticals Ltd. and Ors. v. State of Odisha and Ors. (Decided on 12.04.2017 in W.P.(C) No.16897 of 2016) / Kaustuva Sahu v. State of Odisha and others(Decided on 27.03.2017 in W.P.(C) No.3572 of 2017). 29. Mr. Ashok Kumar Parija, learned Advocate General, with reference to the statement made in the further affidavit filed on behalf of opposite party No.3, while defending the attack on behalf of the petitioner on the ground of mala fide by incorporating the requirement of submission of an undertaking in Form-(S) under the pre-qualification condition, has submitted that the same was done following similar practice in the Central Government and other Public Section Undertakings („PSUs‟ in short). He has submitted, with reference to the said affidavit, that setting up ATS and its operation is a highly Page 30 of 55 specialized job and there are limited players in the market. He has submitted that opposite party No.3 is willing to allow other available bidders/players in the country to participate in the present bid by deleting Clause-23, Form-(S) for the said new players/bidders by issuing appropriate notices in the present tender. Such a step, he contends, will not affect the bidders, who have participated in the present tender and it will only be for new players/bidders. He has however submitted that since the petitioner already participated in the bid process by submitting its bid, which has been found to be non-compliant by the Tender Evaluation Committee, it cannot be allowed to submit a fresh bid even if a corrigendum is issued by deleting the offending Clause-23, Form-(S) from the RFB. The sum and substance of his submission as regards Clause-23 and Form-(S) is that the same shall be deleted and new players/bidders shall be allowed to participate by issuance of appropriate notices, but not this petitioner as its bid has already been found to be non-compliant. 30. In response to the submission that failure on the part of the petitioner to deposit the amount of GST at the time of submission of bid is not an essential requirement/essential term, he has submitted that whether a condition or requirement is an essential condition or requirement shall depend upon the consequence of failure to fullfil the requirement prescribed in the RFB. He has drawn the Court‟s attention to Clause-2.9 of the RFB and has submitted that summary rejection of a bid not accompanied by the Bid Processing Fee is the only consequence since in such circumstance, the bid is mandatorily to be construed as a non-compliant bid. He has submitted accordingly that the said condition Page 31 of 55 of depositing Bid Processing Fee with taxes as applicable is an essential condition. In support of his submission, he has placed reliance on the Supreme Court‟s decisions in cases of Central Coalfields Limited and another v. SLL-SML (Joint Venture Consortium) reported in (2016) 8 SCC 622 (paragraphs-41, 42, 43, 47, 48); Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited and Another reported in (2016) 16 SCC 818 (paragraphs-13, 14 & 15); Agmatel India Private Limited v. Resoursys Telecom and Others, reported in (2022) 5 SCC 362 (paragraphs-28 to 31.2); N.G. Projects Limited v. Vinod Kumar Jain and others, reported in(2022) 6 SCC 127 (paragraphs-21, 22, 23 & 26); Ramana Dayaram Shetty v. International Airport Authority of India, reported in (1979) 3 SCC 489; Tata Cellular v. Union of India reported in(1994) 6 SCC 651 (paragraph 94); G.J. Fernandez v. State of Karnataka reported in(1990) 2 SCC 488 (Paragraph 66); M/s. Master Marine Services Pvt. Ltd. v. Metcalfe and Hodgkinson Pvt. Ltd., reported in (2005) 6 SCC 138; Jagdish Mandal v. State of Odisha reported in (2007) 14 SCC 517 and Kanheylal Agarwal v. Union of India reported in 2002 (6) SCC 315 (Paragraph-6). 31. He has accordingly submitted that rejection of the bid by opposite party No.3 on 18.03.2024 does not suffer from any legal infirmity. He has argued that the petitioner had acknowledged the default on its part in making payment of the Bid Processing Fee as per Clause-2.9 and subsequently paid the GST amount of Rs.1800/- on 19.03.2024 (20.03.2024 mentioned in above paragraph) after the last date of submission of bid dated 16.03.2024. He has submitted that if the Page 32 of 55 petitioner is allowed to participate in the bidding process by overturning the decision of the Tender Evaluation committee then it will amount to violating certain Clauses of the RFB including Clause-2.6(b), Clause-2.9 (a), Clause-2.9 (c), Clause-2.10 (h), Clause-2.11 9(a), Clause 2.11 (a), Clause 2.20 (c) and the Corrigendum dated 12.02.2024. 32. Addressing the challenge to Clause-23 of Part-I and Form-(S), he has submitted that it has been clarified in the counter affidavit of opposite party No.3 in paragraph 20 that the said Clause does not disqualify a bidder from evaluation of its bid. Further, the rationale behind the inclusion of the said Clause has been explained in the Additional affidavit by bringing on record Annexures K/3 and L/3 Series to the said additional affidavit filed on 15.05.2024 bringing on record tender call notices issued by the other State Government, Central Government and other PSUs wherein similar stipulations as in Clause-23 have been made. He submits that in no case, it can be said that stipulation in Clause-23 has been tailor-made for any particular bidder. It has been argued that overwhelming public interest demands proceeding with the tender call notice. 33. Mr. Gautam Misra, learned Senior Counsel has appeared on behalf of opposite Parties No.4 and 5. He has extensively referred to the various Clauses of the RFB. He has submitted that a Corrigendum was issued on 27.01.2024 and 12.02.2024, with Revised Clause. In the Revised Clause No.1.2, following was added:- “The e-Nivida Portal is showing an option of paying this fee in BG form. Bidder shall select this option and enter DD details instead of BG details and submit the Page 33 of 55 DD in original along with the Hard copy of the technical bid.” 34. He has questioned the petitioner‟s stand of having paid higher sum of Rs.80,12,950/- as against the maximum payable amount as per the terms of RFB i.e. Rs.80,12,800/-. The payment of registration fee and tender processing fee of Rs.2,950/- each were to be made online whereas the payment of Rs.80,00,000/- and bid processing fee of Rs.11,800/- was required to be deposited by way of Demand Draft/Bank Guarantee along with the bid. He has submitted that the petitioner had paid the said amount of Rs.2,950/- on 07.03.2024 against the tender processing fee under Clause-2.4(b). The petitioner has attempted to mislead this Court by making a false statement to make out a case that the said amount of Rs.2,950/- paid on 07.03.2024, prior to submission of his technical bid should be treated as part of the bid processing fee. The said amount was non-refundable and was paid in terms of the RFB, to facilitate “searching for tender documents” (Caluse-2.4). He has accordingly submitted that summary rejection of the petitioner‟s bid by the Bid Evaluation Committee is wholly justified. He has argued that the contention of the petitioner to show that all the documents were successfully uploaded including the payment would be contrary to Caluse-2.2(q), which clearly stipulated that submission of the bid meant saving of the bid online but it would not amount to confirm the correctness of the bid by the system. The correctness of the bid was to be decided by the tender inviting authority only as per Clause-2.2(q), he contends. He has relied on the following decisions of the Supreme Court in support of his contentions: - Page 34 of 55 a. Uflex Limited v. Government of Tamil Nadu and others reported in (2022) 1 SCC 165 (Paragraphs 1 -7 & 42); b. National High Speed Rail Corporation Limited v. Montecarlo Limited and Another reported in(2022) 6 SCC 401 (Paragraphs 25 – 32) c.Vidarbha Irrigation Development Corporation v. Anoj Kumar Agarwala reported in 2019 (2) SCALE 134 (Paragraphs 3, 6, 10, 14 & 15) 35. He has also placed reliance on this Court‟s decision in case of Raj Kishore Sahoo v. State of Odisha and others reported in 2024 SCC OnLine Ori 1271 (Paragraphs 2, 10-15 and 17-19). He has referred to a Single Bench decision of Patna High Court in case of EMS Infracon Pvt. Ltd., v. State of Bihar and others reported in 2021 SCC OnLine Pat 1971 to contend that the Court may decline to interfere in the present case on the sole ground that the petitioner has not approached this Court with clean hands. 36. Mr. Gautam Misra, while defending the decision of opposite party No.3 to reject its bid on the ground of the bid being non-compliant in terms of Caluse-2.9 of the RFB has taken an exemplary stand befitting the stature of a Senior Counsel that the Pre-Qualification Condition Clause at Sl. No.23 of Table-2 read with Form-(S) of the RFB is indefensible. He has however relied on the Supreme Court‟s decision in case of N.G. Projects Ltd.(supra) to contend that the satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids and such authorities are aware of expectation from the Page 35 of 55 tenderers while evaluating the consequences of non-performance. He submits that the writ petitioner has not been able to make out a case that the action of Technical Evaluation Committee was actuated by extraneous consideration or was mala fide. Only because the view of the Technical Evaluation Committee was not to the liking of the petitioner, such decision does not warrant for interference, he submits. He has referred to paragraphs-22 and 23 of the said judgment in support of his submission, which read as under:- the bids. Such authority “22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting is aware of expectations from the tenderers while evaluating the consequences of non-performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e. not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was mala fide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ for petitioner, such decision does not warrant interference in a grant of contract to a successful bidder. 23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there Page 36 of 55 is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.” 37. He has also argued, relying on the Supreme Court‟s decision in case of Jagdish Mandal (supra) that a tenderer or contractor with a grievance can always seek damages in a Civil Court instead of invoking writ jurisdiction under Article 226 of the Constitution of India. The said decision has been referred to with approval by the Supreme Court in case of N.G. Projects Ltd.(supra) (SCC Paragraph 15), he argues. 38. Responding to the submissions advanced on behalf of the opposite parties as noted above, Mr. Pinaki Mishra, in reply, has contended that even if for the sake of argument it is presumed that the rejection of the petitioner‟s bid by opposite party No.3 on the ground of same being non- compliant in terms of Clause 2.9 of the RFB is justified, the impugned tender condition relating to absence of litigation is so inherently arbitrary, unconscionable and violative of Articles 14 and 19 that the opposite parties should not be allowed by this Court to proceed with the Page 37 of 55 tender process with such conditions. Such condition is not only violative of Article 14 of the Constitution of India, but it also defeats the public interest to provide level playing field for other competing companies having expertise, nature of work being highly technical. He has reiterated his submission that because of the said Pre-Qualification Condition, only two companies i.e. opposite parties No.4 and 5 submitted their tender documents and in view of the prescription under the RFB two bidders are to be considered as the preferred bidders, presumably on the ground that they do not have any litigation history. They do not have any litigation history, he contends because they do not have any expertise in the field or any other contractual work. He has submitted that the stand taken by the State that the offending condition does not disqualify a bidder in case of litigation, but it merely requires the bidders to submit a declaration stating all pending litigation for last 10 years. Such interpretation, he contends, is contrary to the plain language of Sl.No. 23 in Table-2 of Pre-Qualification Conditions read with the language used in Form-(s). 39. After having carefully examined the pleadings on record and submissions advanced on behalf of the parties as noted above, the following questions arise for this Court to consider and answer:- A. Whether the pre-qualification condition of technical bid at Sl.No.23 of Table 2 read with the note thereunder and Form-(s) of the RFB which restricts the competition in the matter of award of Government contract to such parties only which do not have any Page 38 of 55 litigation/arbitration history with any Government Department/Public Section Undertaking/Private Sector/any other Agency during the last 10 years, is violative of Article 14 of the Constitution of India? B. Whether pendency of a litigation or arbitration at the instance of or against a legal person can itself be a ground for disqualification in the matter of award of a Government contract in favour of such person? C. Whether the pre-qualification condition at Sl.No.23 of Table-2 was of the nature that a bidder was essentially required to state that he „did not have‟ any litigation/arbitration history during the last 10 years or it was just required to furnish the details of litigation/arbitration history as stated in the counter affidavit filed on behalf of the State? D. Whether the rejection of the petitioner‟s bid being non- compliant of Clause-2.9(c) of the RFB by opposite party No.3 was valid? A question ancillary to this question is as to whether the condition of payment of Bid Processing Fee plus tax was an essential condition so much so that for the amount of tax (Rs.1800/-) having not been paid, the petitioner‟s bid could be summarily rejected? Page 39 of 55 E. What is the scope and limitations of a Court exercising power of judicial review in the matters of award of Government contract? This question has two components for the present adjudication, the first of which relates to the challenge to the Pre-Qualification Condition under Clause-2.12 of Table-2 at Sl. No.23 read with Form-(s) of the RFB on the ground of the same being ultra vires Article 14 of the Constitution of India. The second component of this question pertains to the challenge made by the petitioner to the decision of opposite party No.3 to reject the petitioner‟s bid on the ground of the same being non-compliant in view of Clause-2.9 of the RFB. 40. The scope and limitations of the power of judicial review in the matters of award of a Government contract has by now been clearly laid down by the Supreme Court in a series of cases. In the celebrated decision in case of Ramana Dayaram Shetty (supra), the Supreme Court observed that the State (within the meaning of Article 12 of the Constitution of India) need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure. This proposition, the Supreme Court, ruled, would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It further observed that where the Government is dealing with the public, whether Page 40 of 55 by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with the standard or norms which is not arbitrary, irrational or irrelevant, and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. While observing so, the Supreme Court further held in case of Ramana Dayaram Shetty (supra) that the said principle flows directly from the doctrine of equality embodied in Article 14, which strikes at arbitrariness in State action and ensures fairness and equality of treatment. The State cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory. The three-Judge Bench decision in case of Ramana Dayaram Shetty (supra) has been consistently followed by the Supreme Court in subsequent decisions. 41. In case of Tata Cellular (supra), a three-Judge Bench of the Supreme Court again dealt elaborately with the principle of judicial review in the matter of exercise of contractual powers by the Government bodies in order to prevent arbitrariness or favouritism. 42. In the case of Erusian Equipment & Chemicals Limited v. State of West Bengal, reported in (1975) 1 SCC 70, the Supreme Court has held that the activities of the Government have a public element and, Page 41 of 55 therefore, there should be fairness and equality. It is stated that the State need not enter into any contract with anyone, but if it does so, it must do so fairly without any discrimination and without unfair procedure. 43. In Sterling Computers Ltd. Vs. M & N. Publications Limited, reported in (1993) 1 SCC 445, the Supreme Court observed that the contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. In even in such matters thy have to follow the norms recognized by the Courts while dealing with public property. 44. It is noteworthy that in case of Tata Cellular(supra), consequent upon a tender notice for grant of licence, one of the bidders-company was selected for the City of Madras, which had become a subject matter of challenge before the Delhi High Court, by filing writ petitions by some of the bidders. Two of the said writ petitions were dismissed and one was allowed with the issuance of a mandamus to grant of license to the said petitioner after reevaluation of their bids. After the judgment of Delhi High Court, the matter of grant of license was reconsidered in the light of the said judgment and a revised list of provisionally selected bidders were prepared. The consequence of preparation of the revised provisionally selected bidders was that the Tata Celluar, which was originally selected for Delhi, was left out. In that background, Tata Cellular(supra) filed an SLP before the Supreme Court questioning the correctness of the decision of the Delhi High Court by filing an SLP. Few other SLPs were also filed by the bidders questioning the correctness of the decision of the Delhi High Court. In the aforesaid Page 42 of 55 background, in case of Tata Cellular (supra), the question of scope of judicial review had arisen. After having noticed the judicial precedents, the Supreme Court held that it was undeniable that the principles of judicial review would apply to the exercise of contractual powers by the Government bodies in order to “arbitrariness or favourtism” while observing that the Government is the guardian of the finances of the State, the Supreme Court held that the principles laid down under Article 14 of the Constitution of India have to be kept in view while accepting or refusing a tender. The right to choose cannot be considered to be an arbitrary power. However, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down, the Supreme Court ruled. The Supreme Court held in paragraph 77 in the case of Tata Cellular(supra) as under: “77. The duty of the court is to confine itself to the question of legality. Its concern should be: 1. Whether exceeded its powers? a decision-making authority 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary Page 43 of 55 from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under: (i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. Irrationality, (ii) unreasonableness. namely, Wednesbury (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696], Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, “consider whether something has gone wrong of a nature and degree which requires its intervention”. 45. The Supreme Court further held that the Court will intervene where the facts taken as a whole could not warrant the conclusion of the decision maker. It further held in paragraph-81(2) as under:- “81. Two other facets of irrationality may be mentioned. (1) xx xx xx (2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On the basis in R. Vs. Barnet London Borough Council ex p. Johnson, the condition imposed by a local authority prohibiting participation Page 44 of 55 by those affiliated with political parties at events to be held in the authority‟s parks was struck down.” After having noticed a catena decisions including foreign decisions, the Supreme Court in Tata Cellular(supra) concluded the principles of judicial review in contractual matters and held in paragraph 94 as under: “94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision it will be substituting its own decision, without the necessary expertise which itself may be fallible. is permitted (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out Page 45 of 55 above) but must be free from arbitrariness not affected by bias or actuated by mala fides. impose heavy (6) Quashing decisions may administrative burden on the administration and lead to increased and unbudgeted expenditure.” 46. In case of Michigan Rubber (India) Ltd. Vs. State of Karnataka, reported in (2012) 8 SCC 216, the Supreme Court held that the basic requirement of Article 14 is fairness in action by the State and non- arbitrariness in essence and substance is the heartbeat of fair play. The Supreme Court noticed in the said decision that certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Paragraph 23 of the said decision reads 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, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts Page 46 of 55 by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and the State or (e) If instrumentalities act its reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.” 47. In case of Uflex Ltd vs. Government of Tamil Nadu, reported in (2022) 1 SCC 165, the Supreme Court has reiterated the principles of judicial review laid down in Tata Cellular(supra). 48. In the background of the law which has been laid down by the Supreme Court on the scope and limitations of the judicial review of administrative action of the State in the matter of award of the contract, we need to examine the consequences of prequalification condition at Sl. No. 23 of Table-2 read with Form (S) and the note under the said table. Item (d) of Part 1 of Clause 2.12 of the RFB lays down pre-qualification conditions of technical bid and requires necessary documents to be submitted along with the technical bid, which includes a declaration on non-involvement of legal litigation by bidder or any member of the Page 47 of 55 bidder (in case of consortium/partnership) in Form (S). Form (S) makes it compulsory for a bidder to declare that he does not have any litigation/arbitration history with any Government Department/public sector undertaking/private sector or any other agency during the last 10 years. It is further evident from the note under Table-2 that all forms of the RFB, apparently including Form (S), must be filled and submitted by the bidder. Apparently, thus, it is impossible for a bidder involved in any nature of litigation/arbitration to fill up a mandatory Form (S), irrespective of the nature of such litigation/arbitration and its stage. 49. The effect of such prescription is exclusion of all such players who are though otherwise competent, eligible having experience, expertise in the field, from participation in the bid process itself. In view of the unambiguous language used in Form (S), which was to be compulsorily filled in and submitted, a company could not have submitted the tender, he being disqualified by operation of the aforementioned provision, let alone, evaluation of his technical bid. We find force in the submission advanced on behalf of the petitioner that it is quite natural that the parties having experience of execution of contractual work, that too of the present nature, would be involved in litigation/arbitration arising out of the contractual dispute. Further, a legal person can sue or might be sued but that itself cannot incur disqualification. We also find force in substance in the submission that in most likelihood only such companies/consortium of companies can make a declaration, who have no experience of execution of any contractual work. The outcome of requirement of the said declaration is that there were only two bids which were submitted by opposite parties Page 48 of 55 No. 4 and 5. The petitioner questioned the requirement of such declaration by approaching this Court twice which was disposed of with a direction to the authorities to consider its representation. The petitioner‟s representation against the requirement of such declaration was rejected by an order dated 14.03.2024. The said rejection does not deal with the petitioner‟s challenge to the requirement of making such declaration rather with the only observation, “the said declaration was very clear and unambiguous required to be submitted in Form (S)”. 50. We are of the definite view, thus, from the language of the declaration in Form (S) read with Sl. No. 23, prequalification condition and the note thereunder that according to the State-opposite parties that the said requirement was a mandatory requirement and that the language was very clear and unambiguous in Form (S), which was to be submitted by a bidder. The petitioner submitted its bid, in utter desperation, on the last date fixed for submission of technical bid. 51. On the question as to whether the requirement of such declaration was mandatory or not, it has been stated in paragraph 20 of the counter affidavit filed on behalf of Opposite Party No.3 that the condition to submit declaration of no litigation pending history, no way disqualifies a bidder for evaluation of his technical bid as nowhere in the tender condition, it has been stipulated that the pendency of the litigation against a bidder, is a disqualification for evaluation of his bid. 52. The said stand deserves to be rejected for the apparent reason that Part 1 of Clause 2.12 of RFB provides pre-qualification condition, which has a simple meaning that one who does not fulfil the condition, Page 49 of 55 does not qualify and therefore, stands disqualified. The „Note‟ under Table-2 further made it clear that all forms must be filled and submitted by the bidder. Apparently, after having realized the difficulty in defending the aforesaid clause 23 read with Form (S) of the RFB, the State in its counter affidavit expressed its willingness to delete clause 23 Form (S) of the RFB and, thus, allow the other available players in the country to participate in the present bid by issuing appropriate notices. It is, however, the stand of the State that though other players may be allowed to participate upon deleting clause 23 and Form (S), the petitioner shall not be allowed because he had submitted his tender, which has been found non-compliant. 53. At the cost of repetition, we notice the stand of the State itself in its further affidavit that setting up of an Automated Testing Station and its operation is highly specialized job and there are limited players in the market. Further, there are only 9 equipment manufacturers from all over the world, who are operating in India. We fail to understand as to why the State, having known the requirement of expertise in the setting up of Automated Testing Stations and its operation and availability of limited players in the market, it introduced such clause in the RFB which has the effect of exclusion of specialists in the field and thus, allowing only those who have no experience/expertise. Presence of such clause in such forms requiring declaration similar to Form (S) for awarding contracts by other PSUs cannot justify the State‟s action to incorporate such clause in its RFB, considering the nature of work involved. 54. We have noted above the submission made by Mr. Gautam Misra, learned Senior Counsel for the Opposite Parties No.4 & 5, who, Page 50 of 55 in his usual fairness, has agreed that the requirement under the pre- qualification condition at Sl. No.23 of Table-2 read with Form (S) is indefensible, being violative of Article 14 of the Constitution of India. 55. We are of the opinion that Sl.No.23 of Table-2 read with Form (S) of the RFB introduces a classification between such companies, who have litigation history and those who do not have. Litigation history itself initiated by or against a legal person cannot incur a disqualification from participating in a tender process. Such classification, thus, does not have any intelligible differentia and nexus with the object to be achieved. Apparently, the purpose of issuance of public notice inviting tender is to select the best from the market. In the present case, by introduction of such clause, the very purpose of fair competition stands defeated. 56. We, accordingly, declare the pre-qualification condition at Sl.No.23 of Table-2 under Clause 2.12(d) of the RFB “for selection of successful bidder for Design, Construction of Automated Testing Stations, Procurement, Supply, Installation of vehicle testing equipment and Operation and Maintenance at 21 locations in Odisha State” unconstitutional being violative of Article 14 of the Constitution of India. We answer Questions (A), (B) and (C) accordingly. 57. Now we come to question (D) as formulated above. It has not been disputed that the petitioner has history of litigation/arbitration. The petitioner, therefore, suffered from fundamental disqualification because of the pre-qualification condition at Sl.No.23 of Table-2- read with Form (S) of the RFB. This was the reason why the petitioner was challenging Page 51 of 55 the said clause from the very beginning when the RFB was issued by raising issues before the authorities and by filing the writ petitions in this Court. The said requirement at Sl.No.23 of Table-2 read with Form (S) being mandatory as is evident from the unambiguous language used in Form (S), the petitioner stood disqualified, also because of filing of two writ petitions before this Court, other than the present one and it could have been declared disqualified, accordingly, without evaluating the technical bid. Knowing well the litigation history of the petitioner who had filed two cases before this Court in relation to the RFB in question, the Technical Evaluation Committee proceeded to evaluate the bid submitted by the petitioner. Curiously, the opposite parties did not hold the petitioner disqualified by invoking the pre-qualification condition at Sl.No.23 of Table-2 read with Form (S) and disqualified it on the ground that it had not paid a sum of Rs.1,800/- of GST in addition to the bid processing fee of Rs.10,000/-. This is an undisputed fact that the petitioner had deposited the earnest money of Rs.80,00,000/- and the bid processing fee of Rs.10,000/- on the last date of submission of the bid. The said amounts have been accepted as „success‟ transaction by the system. We ponder, had it been otherwise, the payment in this regard would not have shown „success. It leads to a peculiar situation where, had the petitioner‟s bid been rejected on the ground of dis-qualification in view of the pre-qualification condition, which has been held to be not only arbitrary but also unconstitutional by us, there would have been no impediment for him to participate if a fresh notice was issued by the State Government upon deleting the said pre-qualification condition (Sl.No.23), in view of their own stand. We agree with the submission Page 52 of 55 advanced on behalf of the opposite parties that the condition of payment of bid processing fee plus applicable tax was an essential condition in view of the clear stipulation in clause 2.9(c) that a bid not accompanied by a bid process fees as per RFB shall be construed as non-compliant bid and shall be summarily rejected. However, equally essential condition was submission of a declaration in Form (S), which laid down the pre- qualification condition. 58. Had it been a case of summary rejection of the petitioner‟s bid being non-compliant in terms of clause 2.9 of the RFB only, the matter would have been different and this Court exercising power of judicial review under Articles 226 of the Constitution of India could have declined to interfere with the summary rejection of bid, following the law laid down by the Supreme Court in the case of Central Coalfields Limited (supra), paragraph 48 of which reads thus:- “48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] . However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot.” Page 53 of 55 59. While holding as above, the Supreme Court stated that the salutary principle laid down in the case of Nazeer Ahmad vs. King Emperor (AIR 1936 PC 253) that where a power is given to do a certain thing in a certain way the things must be done in that way or not at all and other methods of performance are necessarily forbidden, applies mutatis-mutandis to the bid documents. The principle deserves to be applied in contractual disputes, particularly in commercial contracts or bids leading upto commercial contracts, where there is steep competition. 60. It is noteworthy that in the present case, because of the impugned pre-qualification condition, the element of competition, much less, steep competition almost vanished. 61. Coming to Question (E), we have already noticed the scope and limitations of a Court exercising power of judicial review in the matters of awarding of Government contract in the backdrop of the present facts and circumstances of the case before holding the pre-qualification condition at Sl.No.23 of Table-2 under Clause 2.12 read with Form (S) of the RFB on the ground of the same being ultra vires. 62. In view of the above noted discussions, since we have declared pre-qualification condition at Sl.No.23 of Table-2 under clause 2.12(d) read with Form (S) of the RFB as unconstitutional, we allow the present writ application with a direction to opposite party No.3 to either issue a corrigendum deleting the said requirement and, thus, permitting eligible bidders to participate including the petitioner “for selection of successful bidders for Design, Construction of Automated Testing Stations, Procurement, Supply, Installation of vehicle testing equipment and Page 54 of 55 Operation and Maintenance at 21 locations in Odisha State” or issue a fresh RFBs without similar pre-qualification condition which excludes competent players from participating in the process of selection, without any valid reason. 63. Considering the facts and circumstances noted above, we are also of the opinion that it would be highly unjust and improper to deny the petitioner an opportunity to participate in the tender process, upon issuance of corrigendum/fresh tender notice. We direct accordingly. 64. This writ petition is allowed with the aforementioned directions and observations. 65. Before we part with the present judgment, we record our appreciation for the assistance extended by Mr. S.P. Mishra and Mr.Pinaki Mishra, learned Senior Counsel for the petitioner, Mr. Ashok Ku. Parija, learned Advocate General for the State. We specially acknowledge the fair stand taken by Mr.Gautam Misra, learned Senior Advocate representing opposite parties No.4 and 5 in this case. 66. There shall be no order as to costs. (Chakradhari Sharan Singh) Chief Justice M.S. Raman, J. I agree. (M.S. Raman) Judge SK Jena/M.Panda, Secy. S.K. Guin/PA. Signature Not Verified Digitally Signed Signed by: SANJAY KUMAR JENA Designation: SECRETARY Reason: Authentication Location: High Court of Orissa, Cuttack. Date: 18-Jun-2024 18:25:46 Page 55 of 55