Orissa High Court
Case Details
ORISSA HIGH COURT: CUTTACK W.P(C) NO. 29233 OF 2022 In the matter of an application under Article 226 of the Constitution of India. --------------- AFR Anshuman Patnaik ..… Petitioner -Versus- State of Odisha & Ors. ….. Opp. Parties For Petitioner : M/s. S.R. Pati, D. Pati and S. Mohanty, Advocates For Opp. Parties : Mr. S. Jena, Standing Counsel Department (O.Ps.1-3) for S&ME M/s. D.N. Rath & A.K. Saa, Advocates (O.P.4) M/s. S.K. Acharya, S. Pholgu, A. Agrawal, J. Sahoo, S. Agrawal, J. Joshi & S.Ghosh, Advocates (O.P.5) P R E S E N T: THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR JUSTICE M.S. RAMAN DECIDED ON : 24.03.2023 // 2 // DR. B.R. SARANGI,J. The petitioner, who is the proprietor of Power Max, MB-64, Badagada Brit Colony, Bhubaneswar, by way of this writ petition, seeks to quash the selection of opposite party no.4 as L-1 bidder, pursuant to tender call notice dated 20.09.2022, and further to issue direction to opposite parties no.2 & 3 to declare the petitioner as successful bidder in pursuance of the said tender call notice. 2. The factual matrix of the case, in brief, is that opposite party no.2-Collector-cum-Chairman of Tender Committee, Kalahandi, on behalf of opposite party no.3- District Education Officer, Kalahandi, invited sealed tenders from the intending Manufacturers, Chanel Partners, Authorized Distributors/Dealers/Sellers having valid registration certificate, authorizations, GST registration number for supply of Computers, Printers, Online UPS, etc. The date and time for receipt of bid documents was fixed to 20.10.2022 at 2.00 PM and technical/commercial bid and financial bid was to be opened on 20.10.2022 at 5.00 PM in presence of the bidders or their authorized representatives at Conference // 3 // Hall of Zilla Parishad, Kalahandi. As per tender conditions, any bid with incomplete information is liable for rejection. For evaluation of the bid, only the technically qualified tender papers of the bidders were to be opened and considered for financial bid. Pursuant to the said tender call notice, 8 bidders including the petitioner participated in the tender process and only three bidders were qualified in the technical evaluation by the tender committee including the petitioner and opposite party no.4. When the tender papers of opposite party no.4 were opened, the petitioner found that the authorization certificate of Hewlett Packard Enterprise (HPE) was not enclosed with the tender documents of opposite party no.4 as well as the work experience certificate. Therefore, the petitioner immediately objected to the bid of opposite party no.4, but the tender committee did not act upon the oral objection of the petitioner and immediately opened the financial bid without giving any time to the petitioner to file his written objection and declared opposite party no.4 as L-1 bidder so as to award the work in its favour. It is the // 4 // further case of the petitioner that opposite party no.5, who is the manufacturer of server component, i.e., HPE, informed the petitioner that it had not issued authorization certificate in favour of opposite party no.4. Therefore, opposite party no.4 was not authorized by the server company, i.e., HPE, as per the technical specification mentioned in Clause-6 of the terms and conditions of the tender call notice dated 20.09.2022. Thereby, opposite party no.4 ought not have been qualified in the technical bid so as to opening of its financial bid and declared it as L-1. Hence, this writ petition. 3.
Legal Reasoning
Mr. S.R. Pati, learned counsel appearing for the petitioner contended that since there was gross non- compliance of the provisions of the tender documents, especially clauses-5.14 (b), 5.10.1 and 5.12 of the tender call notice, the bid of opposite party no.4 should not have been accepted. As such, opposite party no.4 has incurred disqualification due to non-furnishing of required documents in conformity with the tender conditions. As a consequence thereof, the bid of opposite // 5 // party no.4 has to be rejected and the petitioner, being L- 1 and having satisfied all the requirements in terms of the tender documents, should have been awarded with the contract. It is further contended that to substantiate his claim, the petitioner had filed the document, i.e., manufacturer’s authorization dated 18.10.2022, but, by referring to the document under Annexure-A/3 to the counter affidavit filed by opposite party no.3, which is at page-142 of the brief, wherein no date has been mentioned, the petitioner disputes the authorization certificate filed by opposite party no.4, and at page-143 of the brief although the certificate has referred to the year 2022, but no date has been mentioned. Thereby, on the basis of documents, which have not specified the date and which have been disowned by opposite party no.5 in its counter affidavit stating that as per clause- 1.16(a) of the agreement executed between opposite party no.5 and Odyssey Computer Services Pvt. Ltd., the latter has been prohibited from assigning or transferring any rights to any other entity without prior consent of opposite party no.5. Thus, taking such authorization // 6 // certificate into consideration if the tender committee has selected opposite party no.4, the same cannot be sustained in the eye of law. Therefore, the decision taken by the tender committee to award the contract in favour of opposite party no.4 has to be set aside. To substantiate his contentions, learned counsel appearing for the petitioner has relied upon the judgments of the apex Court in Goldyne Technoserve Ltd. v. State of M.P. & Ors., AIR 2011 SC 2574; Ram Gajadhar Nishad v. State of U.P, (1990) 2 SCC 486 : AIR Online 1990 SC 98; Sorath Buuilders v. Shreejikrupa Buildcon Limited and Anr., (2009) 11 SCC 9 and West Bengal electricity Board v. Patel Engineering Co. Ltd. and Others, AIR 2001 SC 682. 4. Mr. S. Jena, learned Standing Counsel for School and Mass Education Department, while justifying the action taken by opposite parties no.1 to 3, contended that the bid of opposite party no.4 has been considered as L-1 basing on the conditions mentioned in the DTCN. Thereby, the tender committee, after verifying all the // 7 // documents, selected opposite party no.4 as L-1 bidder in the financial bid. He also contended that L-1 bidder, opposite party no.4 represented through its proprietor had submitted all the required documents, along with authorization, and taking into consideration of those if the bid of opposite party no.4 was selected as L-1, no illegality or irregularity can be said to have been committed by the authority so as to warrant interference of this Court at this stage. 5. Mr. D.N. Rath, learned counsel appearing for opposite party no.4 vehemently contended that on the basis of the conditions stipulated in the DTCN, if opposite party no.4 submitted its tender documents and on evaluation the tender committee found the same in order, in that case it does not require scrutiny of this Court in exercise of power under Article 226 of the Constitution of India to deprive opposite party no.4 to carry on its business pursuant to the work order allotted in its favour. Thereby, dismissal of the writ petition is sought for. // 8 // 6. Mr. A. Agrawal, learned counsel appearing for opposite party no.5 contended that the document of authorization relied upon by opposite party no.4 cannot be taken into consideration as it violates clause-1.16(a) of the agreement entered into between opposite party no.5 and Odyssey Computer Services Pvt. Ltd., as the said clause prohibits from assigning or transferring any rights to any other entity without prior consent of opposite party no.5. If at all any document of authorization has been filed by opposite party no.4, such authorization lacks the consent of opposite party no.5. Thereby, the same should not have been relied upon by the tender committee. 7. This Court heard Mr. S.R. Pati, learned counsel appearing for the petitioner; Mr. S. Jena, learned Standing Counsel for School & Mass Education Department appearing for opposite parties no.1 to 3; Mr. D.N. Rath, learned counsel appearing for opposite party no.4 and Mr. A. Agrawal, learned counsel appearing for opposite party no.5 in hybrid mode. Pleadings have been exchanged between the parties and with the consent of // 9 // learned counsel for the parties, the writ petition is being
Decision
disposed of finally at the stage of admission. 8. For just and proper adjudication of the case, relevant provisions contained in the DTCN are given below:- “5.10.1. Submission Commercial Bid: of Technical/ The list of documents (all enclosures) as Technical/Commercial Bid are part of mentioned below: xxx xxx xxx (b) Copy of Authorization Certificate of Distributor/Dealer/Chanel partner of quoted items. xxx xxx xxx of proof work (g) Documentary order/contract agreement/supply completion certificate from Govt. /govt. aided organization in support of experience in supplying similar type Server with Client computers in the years i.e 2020-21, 2019-20, 2018-19. xxx xxx xxx Opening of the Technical and 5.11 Financial Bid. xxx xxx xxx in prescribed format or 5.11.3 The tenders (also called Bids) not submitted in the prescribed manner, shall be rejected by the Tender Evaluation Committee at the risk and responsibility of the bidder. // 10 // xxx xxx xxx 5.12 Evaluation of BID Technical Evaluation/ The Purchases Committee constituted by Collector & DM shall evaluate the BID as under: Technical Bid: The technical bud (i) shall be scrutinized by the Technical Evaluation Committee formed for the purpose. The decision of the Technical Committee shall be final and binding on all the bidders. (ii) Financial Bid: The names of the technically qualified bidders after evaluation will be declared by the Committee Members and Financial Bid of only the technically qualified bidders will be opened. (iii) Financial Evaluation: Manual evaluation shall be carried out by the Tender Inviting Authority (TIA) based on the quoted price in the Financial Format, after correction of arithmetic error, if any, prevailing rate of GST etc…… and the evaluation criteria mentioned above to arrive at the lowest evaluated responsive bid. xxx xxx xxx 5.14 Acceptance or Rejection of the Bids: a) Collector & DM cum Chairman reserves the right to accept/ reject/ any/ all bids/ cancel the entire selection process at any stage without assigning any reason thereof. No claim, whatsoever, shall be admissible for the alleged loss/damage suffered by the bidders on account of such rejections. Any bid with incomplete information is b) liable for rejection.” 9. On careful perusal of the clauses, as quoted above, it would be evident that as per clause-5.10.1, a // 11 // bidder has to satisfy the list of documents, as provided under sub-clauses (a) to (j), as part of Technical/Commercial Bid. According to sub-clause (b) of clause-5.10.1, a bidder is required to produce a copy of Authorization Certificate of Distributor/Dealer/Chanel Partner of quoted items; and in terms of sub-clause (g) of clause-5.10.1, a bidder has to furnish documentary proof of work order/contract agreement/supply completion certificate from Govt. /Govt. Aided Organization in support of experience in supplying similar type server with client computers in the years, i.e., 2020-21, 2019-20, 2018-19. Clause-5.11.3 provides that a tenderer is required to submit bid in prescribed format or in the prescribed manner otherwise the same shall be rejected by the Tender Evaluation Committee at the risk and responsibility of the bidder. 10. As it appears from the materials available on record, in compliance of clause-5.10.1(b), referred to above, opposite party no.4 produced an authorization certificate and taking into consideration of the same, the technical bid of opposite party no.4 was qualified, but // 12 // the petitioner disputed such document stating that the said authorization certificate was a manufactured one being not issued by the competent authority and, as such, the said document should not have been relied upon for adjudging the technical bid of opposite party no.4. Opposite party no.3 also admits that considering the very same document, the eligibility of opposite party no.4 was adjudged and it was declared as successful bidder. It is contended that the authorization certificate, on which reliance is placed by opposite party no.4, was issued by the Odyssey Computer Services Pvt. Ltd., Kolkata, of which opposite party no.4 is the channel partner, which is only authorized to quote and exercise HPE range of servers on its behalf, the document in support of the same has been annexed as Annexure-A/3 to the counter affidavit filed by opposite party no.3. On perusal of the same, it appears that the said authorization certificate does not contain the date of its issuance. It is therefore inferred that the result of the technical evaluation has been published taking into consideration a document, which does not bear the date, // 13 // and the genuineness of the said document is to be verified in view of counter affidavit filed by opposite party no.5, who specifically states in paragraphs-4 & 5 to the following effect: “4. That the OP NO.5 has also perused the certificate issued by Odyssey Computer Services Pvt. Ltd. (“Odyssey”) to the OP No.4 and also Certificate issued by the OP No.5 to Odyssey annexed as ANNEXURE-A/4 in the Counter Affidavit by OP no.4 With regards to the same, it is humbly submitted that it is true that Odyssey is a registered and empanelled partner of HPE (i.e “Tier 2 Partner). the 5. That however, as per the HP Partner Agreement vide Contract Number WS276 executed between OP No.5 and Odyssey, as per Clause 1.16(a), latter has been prohibited from assigning or transferring any rights to any other entity without prior consent of OP No.5, and in this case, OP No.5 has not given any prior consent, either express or implied, to Odyssey to authorize OP No. 4 to execute HPE Servers. Copy of the Agreement is annexed herewith as ANNEXURE-A/5”. 11. Further, a perusal of the “HP Partner Agreement”, which has been annexed as Annexure-A/5 to the counter affidavit filed by opposite party no.5, would go to show that under clause-1.16(a) thereof it was agreed upon between opposite party no.5 and Odyssey Computer Services Pvt. Ltd. as follows:- // 14 // “1.16 (a) Assignment You may not assign or transfer any rights or obligations hereunder without our prior written consent. We may assign any rights or obligations hereunder to another HP Affiliate at any time without notice.” The above being the agreement between opposite party no.5 and Odyssey Computer Services Pvt. Ltd., when there was non-assignment and non-transfer of rights or obligations, without prior consent of opposite party no.5, the authorization certificate said to have been issued by Odyssey Computer Services Pvt. Ltd under Annexure- A/3 and relied upon by opposite party no.4 before opposite party no.1, should not have been considered as a valid document in the eye of law. Thereby, on the basis of such document, which is not a genuine one, if reliance has been placed to grant benefit to opposite party no.4 by awarding the contract, the same cannot be sustained in the eye of law. 12. In Ram Gajadhar Nishad (supra), it has been specifically mentioned that conditions mentioned in the tender documents are mandatory and for non- // 15 // compliance thereof if the bid is not accepted, the same cannot be interfered with by the Court. 13. In Goldyne Technoserve Ltd. (supra), the apex Court, referring to Ram Gajadhar Nishad and Sorath Builders (supra), in paragraphs-25 & 26 respectively held as follows:- “25. Reference was also made to another decision of this Court in Ram Gajadhar Nishad v. State of U.P. [(1990) 20SCC 486], wherein it was held that the effect of non- compliance of a mandatory condition in a Tender notice was fatal and the fact that the Appellant’s opened, accordingly, did not call for interference under Article 136 of the Constitution. Tender was not learned Attorney General 26. The lastly referred to the decision in Sorath Builders v. Shreejikrupa Buildcon Ltd. & Anr. [(2009) 11 SCC 9]: (2009 AIR SCW 2298), where similar views had been expressed in relation to the acceptance of the lowest bid by the Respondent No.2 University, despite the fact that such bidder had failed to furnish pre- qualification documents within the specified time……” 14. In Patel Engineering Co. Ltd. (supra), the apex Court in paragraph-32 of the judgment held as follows:- “32. ……. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to // 16 // lowest of bids offered. As adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance of rules and conditions cannot be ignored. It is obvious that the bid of respondent Nos.1 to 4 is the bid the documents of respondents No.1 to 4 stands without correction inherent inconsistency between the particulars given in the annexure and the total bid amount, it cannot be directed to be considered along with other bid on the sole ground of being the lowest”. there will be 15. In view of the foregoing discussions, it is made clear that the certificate issued by Odyssey Computer Services Pvt. Ltd. under Annexure-A/3, which was produced by opposite party no.4 justifying its claim to award the contract in its favour, has been disowned by opposite party no.5 in its counter affidavit at paragraphs-4 & 5, as mentioned above. The authorization certificate so filed by opposite party no.4, without the consent of opposite party no.5, cannot be taken into consideration to award the contract in its favour. Therefore, selection of opposite party no.4 as L-1 bidder, pursuant to tender call notice dated 20.09.2022, cannot be sustained in the eye of law and the same is liable to be quashed and is hereby quashed. Thereby, it // 17 // is open to the tendering authority to take necessary follow up action in accordance with law. 16. In the result, the writ petition is allowed. However, there shall be no order as to costs. (DR. B.R. SARANGI) JUDGE M.S. RAMAN, J. I agree. (M.S. RAMAN) JUDGE Orissa High Court, Cuttack The 24th March, 2023, Alok