Hon'ble Vedpal, J.
Heard Sri P.C.Mishra, learned Senior Advocate, assisted by Sri Sudhir Pandey for the petitioners, learned Chief Standing Counsel for respondent no. 1 and Sri V.P.Nag for respondents No. 2 and 3.
This petition, filed by Dan Mal Kothari, Director, Northbrook Jute Company Limited and another, challenges the rejection of their technical bid and prays for consideration of their financial bid alongwith the bids of other tenderers.
The brief facts, revolving round the present controversy, are as follows:
The Uttar Pradesh Beej Vikas Nigam, which is an instrumentality of the State within the meaning of Article 12 of the Constitution, hereinafter referred to as the Corporation, invited sealed tenders in two-bid system i.e. technical and financial bids, inter alia, for supply of the items under Group-'A' i.e. 25 lakh D.W. Tarpaulin Jute Bags of 40 kg. Capacity ready size 85 cms x 58 cms, each bag of 400 gms weight as well as 7 lakh B. Twill/Gunny bags of 50 kgs capacity having ready size 94 cms x 57 cms of 665 gms weight, more specifically described in Annexure-1 of the tender form. The petitioners' company, a reputed manufacturer of all types of jute goods, purchased tender forms by depositing the requisite amount and submitted duly filled up tender form, by dropping the technical bid in the box meant for technical bids and the financial bid in the box meant for dropping the financial bids in the office of the respondents no. 2 and 3. The rest of the formalities including the deposit of earnest money, etc. were also completed in all respects.
According to the terms and conditions, as stipulated in the tender form, the technical bid was to be opened on 29.3.2011 at 3 p.m in the Lucknow office of the Corporation and the financial bid was to be opened on 4.4.2011. The technical bids were opened on the scheduled date i.e. 29.3.2011, on which date it was made known to all the tenderers inlcuding the petitioners that opening of the financial bid of the participants would be subject to result of the test report of the samples submitted by them, which would be made known to the participants on the date of opening of the financial bid i.e. on 4.4.2011.
On 4.4.2011, the financial bids of other participants were opened, but incidentally, the financial bid submitted by the petitioners was not opened, as the samples submitted by the petitioners failed in the test. The respondent no. 4 K.L.Jute Company was declared the successful bidder having quoted the lowest rate of Rs.3371/- of 100 D.W. Tarpaulin bags of 40 kgs capacity as well as Rs.4600/- of 100B.Twill/Gunny bags of 50 kg capacity.
The petitioners' company, on 7.4.2011, made a representation to the Managing Director of the Corporation, raising a grievance that without assigning any reason their financial bid was not opened on 4.4.2011, whereas financial bids of other four participants were opened and the respondent no. 4 K.L.Jute Company of Kolkata was declared successful bidder for quoting lowest rate of Rs.37.71p per D.W. Tarpaulin Bag as well as Rs.46.00 per B. Twill/Gunny bag and that the prices quoted by the petitioners were reasonable and they were in accordance with the prices published by the Gunny Trades Association having its registered office at 5, Dr. Rajendra Prasad Sarani, G.P.O., Post Box 573 Kolkata, price bulletin whereof was widely accepted and relied on by the various government undertakings including the State of Uttar Pradesh for granting tenders for purchasing jute goods.
Corollary to the aforesaid plea of the petitioners was that the prices quoted by K.L.Jute Company were much higher and exorbitant, which were going to exert unnecessary burden upon the State exchequer, contrary to the interest of the common people for reasons best known to the officials, who were favouring that company and there was no reason for rejection of either technical bid or financial bid of the petitioners. A prayer was made that under the facts and circumstances as stated in the representation, further effect to the tender granted to the respondent no. 4, on the basis of alleged opening of financial bids on 4.4.2011, be not given and necessary steps be taken for initiation of an enquiry and/or investigation in respect of irregularities and corruption crept in the matter of granting the aforesaid tender, based on pick and choose policy, within a period of three days from the date of receipt of the said representation, failing which, the petitioners would have no other alternative but to take recourse of law by instituting appropriate proceedings in appropriate forum without any further reference or notice to the Corporation.
The petitioners, who have approached this Court, have attacked the proceedings of tender, on the following grounds:
(1)The tender notice did not provide for the "testing of samples" nor did it say that only the tenderers whose samples will pass the test, will be considered for opening of the financial bid;
(2)The tender notice did not even say that after receiving the tenders, the Managing Director/Committee will first open the technical bids and then shall get the suitability test of the samples and will then open the financial bids;
(3)The fairness demanded that the authority should have notified in the tender notice itself the procedure of testing of samples which they proposed to adopt while accepting the tender. The whole procedure was unfair and opposed to the norms which the respondents should have followed in such matters i.e. openness, transparency and fair dealing;
(4)The samples were not sent to the testing lab in the presence of the petitioners and other tenderers, which also creates a suspicion whether the samples submitted by the tenderers were actually sent for testing or not;
(5)The laboratory i.e. National Accreditation Board of Testing & Laboratory Equipment', which was entrusted with the task of testing the samples, was not a reputed laboratory, approved by the Bureau of Indian Standards (BIS); and (6)The public interest has not been taken into account and the tender has been awarded adopting the policy of pick and choose, that too to a company which has quoted not the lowest, but higher rates. This tells upon the State Exchequer.
Counter affidavit, supplementary counter affidavit, rejoinder affidavit and supplementary rejoinder affidavit have been filed, which are placed on record.
In response, learned counsel for the respondent Corporation has submitted that the entire process of award of tender has been fully open, transparent and fair. It was strictly in accordance with the terms of the tender notice and there has been no deviation nor any such procedure has been adopted which was not known to the participants or was not disclosed. Submission is that a bare perusal of tender notice would reveal that the tenderers were supposed to submit their samples alongwith technical bids and that they were all informed on 29.3.2011 when technical bids were opened that their samples would be sent for testing and the financial bids would be opened only after the result of the test of samples was obtained. The financial bids were to be opened only of those tenderers who succeeded in technical bid. The petitioners as well as other tenderers did not raise any grievance about samples being sent for testing nor ever said that the same be sent in their presence to any particular laboratory but they waited for the outcome of the test results. The technical bid of the petitioners could not be approved for the reason that their samples failed in the test.
The technical bids were opened on 29.3.2011 as pronounced and the financial bids were to be opened on 4.4.2011 after the test of the samples, which actually was done and, therefore, it cannot be said that there was any departure from the norms in the matter of opening of the bids.
So far as the lowest rate is concerned, the argument is that the tenderer K.L.Jute Company, respondent no. 4 quoted the lowest rate, therefore, it has been treated as the lowest tenderer. The petitioners being out from the field of competition cannot raise any grievance about the rates, more so when they are genuine and have been found to be reasonable and fair by the Tender Committee.
To resolve the issue raised, it would be pertinent to have a glance over the contents of tender notice form for Group-'A" and the terms and conditions stipulated and pronounced therein. The relevant clauses in the tender form relating to samples and submission of technical and financial bids, read as under:
"Samples:-
Sample of all items/Materials shall be accompanied with Technical Bid. TENDERS WITHOUT EARNEST MONEY AND WITHOUT SAMPLES SHALL BE REJECTED. The Corporation shall not accept any responsibility for postal delay.
Managing Director, U.P. Beej Vikas Nigam, reserves the right to accept or reject all or anyone tender or part thereof and may divide the order among the bidders without assigning any reason and his decision on such matter shall be final and binding.
Important Dates to be remembered:-
Time Schedule for Tender Opening & Closing 1 Last Date for the Sale of Tender Document/Form 28-03-2011 upto 12.00 noon 2 Last Date of Tenders to be dropped in tender box 28-03-2011 upto 03.00 PM 3 Opening of Technical Bid (Group 'A' Items) 29-03-2011 upto 03.00 PM 4 Opening of Financial Bid (Group 'A' Items) 04-04-2011 upto 11.00 AM 5 Clarification, if required 08-04-2011 upto 11.00 AM How to submit the Tender and Envelope containing Technical & Financial Bids:
The Outer Envelope addressed to Managing Director, U.P. Seed Development Corporation should also indicate the "Tender No. 2011-(R)", Group 'A' for Jute Bags Cross Laminated Film Fumigation Covers (as the case may be) due to be opened on 29th March, 2011 on the Top and Name, Address of Tenderer on the left bottom side. For Details, please read the General Instructions for Tenderers at Annexure III and for General Conditions of Contract at Annexure-II for Details.
Opening of Technical Bids:-
Envelope clearly mentioning "Technical Bid" (Original) in its top will be opened on 29th March, 2011 at 3.00 P.M. by the Committee at Corporation's Head Office, Lucknow. The Technical Bid should be on Section-III, Part 'A' (Annexure-IV) accompanied with EMD and other documents as required. The Technical Bids found in order will be short listed and displayed.
Opening of Financial Bids:-
Envelope clearly mentioning "Financial Bids" for (Name of items) on its top, will be opened only of those Tenderers, whose Technical Bids have been found satisfactory. Opening of Financial Bids will be on April 04, 2011 at 11.00 A.M. at Corporation's Head Office, Lucknow (U.P.). The Financial Bids should be on Section -III Part B, Annexure-V duly filled up in all respect. The rates quoted in it, should be F.O.R. Destination at various locations within (U.P.) including, Excise, ST/CST/V AT, Octoroi, Unloading, Freight, Inspection/Testing charging etc."
Learned counsel for the petitioners, while making his submission that the procedure adopted for opening the technical bid was not in consonance with the tender notice, greatly emphasized that-
(1)The decision to send the samples for testing before finalizing the technical bids was not envisaged in the tender notice and, therefore, a new criteria could not have been adopted, which runs contrary to the terms and conditions of tender notice.
(2)The technical bids were to be opened on 29.3.2011, and only those bids which were found in order, were to be short listed and displayed; meaning thereby that once the technical bid was found in order, it was to be short listed and displayed, but instead of adopting the said procedure, a novel method, as stated above, was adopted, just to give undue favour to a particular tenderer.
(3)In any case, the samples, if at all were to be sent for testing, the same should have been sent in the presence of all the participants and to a disclosed approved laboratory, which was also not done.
In support of his submissions, learned counsel for the petitioners has relied upon the case of Ramana Dayaram Shetty versus The International Airport Authority of India and others, AIR 1979 SC 1628, wherein the Apex Court held that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the standard or norm laid down in paragraph 1 of the notice inviting tenders, which required that only a person running a registered IInd Class Hotel or restaurant and having at least 5 years' experience as such should be eligible to tender. The Court further observed that admittedly, the standard or norm was reasonable and non-discriminatory and once such a standard or norm for running a IInd class restaurant should be awarded was laid down, the Ist respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm. If there was no acceptable tender from a person who satisfied the condition of eligibility, the Ist respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondents.
Reliance was also placed upon the case of Siemens Public Communication Networks Private Limited and another versus Union of India and others, (2008) 16 SCC 215, wherein the Supreme Court observed that when decision-making process is so arbitrary or irrational that no responsible authority acting reasonably or lawfully could have taken such decision, power of judicial review can be exercised. In para 36 of the report, the Apex Court observed as follows:
"36. Accepting the interpretation as sought to be given by the appellants would amount to rewriting the entries in the bid document and reading into the bid document, terms that did not exist therein. An international bidding of such a nature being highly competitive, is also expected to be extremely precise. The technical nature of the subject-matter of the contract itself postulated assistance of technical experts and thus, a very high degree of care and meticulous adherence to the requirements of the bid was inherent in such a bidding. On its part, Respondent 2 was under an obligation to not only maintain a great degree of transparency and fair dealing on its part, but was also expected to maintain the sanctity and integrity of the entire process. Thus it was incumbent upon Respondent 2 to ensure that no different yardsticks were adopted for any of the vendors and at the same time, to ensure that there was not the remotest possibility of discrimination, arbitrariness or favourtism. There was no scope for Respondent 2 to read into the documents, terms and conditions which did not exist in the bid documents. The appellants have also not levelled any personal allegations of mala fides or favourtism against Respondent 2."
In the case of Dutta Associates Pvt. Ltd. versus Indo Merchantiles Pvt. Ltd. and others, (1977) 1 SCC 53, the Supreme Court while considering the procedure adopted by the Commissioner of Exercise, Assam for wholesale supply of rectified spirit (Grade I) observed that whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in the tender notice. The Supreme Court found that the entire process leading to the acceptance of the tender of appellant was vitiated. In that case, the tender notice did not specify the "viability range" nor did it say that only the tenders coming within the "viability range" would be considered. More significantly, the tender notice did not even say that after receiving the tenders, the Commissioner/Government would first determine the "viability range" and would then call upon the lowest eligible tenderer to make a counter-offer, but this process of determining the viability range was adopted which was not given in the tender notice. The Supreme Court also observed that the concept of "viability range" was not understandable for the reasons given in the order and also that no opportunity to make a counter offer was given to any other tenderer , as observed by the Division Bench of the High Court. Mainly on the aforesaid issue, the Apex Court found that the entire procedure followed by the Commissioner and the Government of Assam in accepting the tender of Dutta Associates was unfair and opposed to the norms which the Government should follow in such matters, viz., openness, transparency and fair dealing.
In the case of Harminder Singh Arora versus Union of India and others, (1986) 3 SCC 247, the Apex Court observed that acceptance or rejection of tender made by parties will depend upon the compliance of the terms of tender notice and that the choice with respect to tenderer must not be arbitrary or fanciful. The choice must be dictated by public interest and must not be unreasoned or unprincipled.
The legal propositions as enunciated by the learned counsel for the petitioners regarding the tender notice, the conditions mentioned therein, the procedure prescribed and the manner in which the tender would be awarded after opening the technical and financial bids, cannot be disputed. The question remains as to whether in the instant case, the principles as laid down by the Apex Court in various cases referred to above have been followed or the tender process stands vitiated for breach thereof.
The petitioners have specifically urged that the tender notice provided that the technical bids found in order would be short listed and displayed. The argument is that at the time of opening the technical bids, neither there was any occasion or reason to send the samples for testing, nor such a condition was envisaged in the tender notice that the acceptance of technical bids would be dependent upon the testing of the samples, submitted by the tenderers. Once the short listing was done, names of successful tenderers were to be displayed. The next step thereafter was to open the financial bids of all such successful tenderers and on comparison of the rates, the lowest tenderer should have been selected subject to other conditions being fulfilled.
The petitioners have further relied upon clause 9(a)(i) of General Conditions of Contract i.e. "Terms of Payment", which were for all items except fungicides and chemicals etc. requiring Lab Test/Analysis and also clause 15, which has the heading "Inspection", in support of their plea that the testing of bags was to be done at the time of the payment, and the inspection was to be made after supply of jute bags and if at that time, it was discovered that there was any shortcoming in the goods supplied, then action as proposed therein could have been taken, but there was no authority with the respondent Corporation to test the samples before opening of the financial bids and reject the same, hence ousting the tenderers who otherwise had satisfactorily qualified the technical bid in terms of the tender notice.
The aforesaid submissions of the petitioners have to be tested on the basis of the contents of the tender notice/form. There is Annexure-III to the Tender Form, containing Section-I (Part-B) General Instruction to Tenderer, Group-'A', which shows the manner in which the tenderers were to submit their offer in duplicate at the Head Office of the Corporation on the prescribed proforma, annexed as Sectrion -III (Part-A). It provided that there would be two envelopes. Envelope No. 1 (Technical Bid) containing a copy of Section-III (Part-A) duly filled up, enclosing therewith drafts of E.M.D, photocopies as required in it and sample, if not submitted earlier, was to be submitted in duplicate (original & duplicate, that will be kept in separate envelopes in the above envelope). Envelope No. 2 (Financial Bid), containing a copy of Section-III (Part-B) enclosing therewith (2) Two copies of Prescribed proforma annexed as Section-III (Part-B) duly filled up in all respect, was to be submitted in duplicate (original & duplicate, that will be kept in separate envelopes in the above envelope). Separate tender boxes for technical and financial bids would be available at H.Q. Lucknow. Other conditions of quotation of price, earnest money: amount and mode of deposit, forfeiture of earnest money, tender fee, last date of receipt and opening of tender, terms of payment and inspection, etc. were provided therein.
Clause 8 of the aforesaid form prescribes the last date of receipt and opening of tender and reads as under:
"8. LAST DATE OF RECEIPT AND OPENING OF TENDER;
The Tender should reach upto 3.00 PM on 28th March, 2011 at Head Office, Lucknow. The Envelope of Technical bid shall be opened at 3.00 PM on 29th March, 2011 in presence of the Committee at Head Office Lucknow. Such tenderers or their authorized representative may present at the Time of Opening. Envelopes of Financial Bid will be opened only (when Technical Bids are found suitable ) on 04th April, 2011 at 11.00 A.M in the presence of the Committee."
The aforesaid clause very clearly stipulated that envelope of Technical bid was to be opened at 3.00 PM on 29th March, 2011 in presence of the Committee at Head Office Lucknow and such Tenderers or their authorized representative were to present at the Time of Opening and that the envelopes of Financial Bid were to be opened only when Technical Bids were found suitable on 04th April, 2011 at 11.00 A.M in the presence of the Committee. This clarifies that the financial bid of only those tenderers was to be opened whose technical bid was found suitable and not merely because it was short listed or its name was displayed in terms of the recital made in tender form for Group-'A', as referred to by us in the earlier part of this judgment.
The three clauses, namely, the clause of opening of technical bid given in the tender notice/form Group-'A', the clause of opening of financial bid and then clause 8 aforesaid, mention about technical bids and financial bids, but they use three different words in all the three clauses, namely, in the first clause, under the heading Opening of Technical Bids, it has been said that the 'Technical Bids found in order will be short listed and displayed'. In the next clause under the heading 'Opening of Financial Bids', it was mentioned that the financial bids would be opened only of those Tenderers, whose 'Technical Bids had been found satisfactory', whereas clause 8 says that the financial bid would be opened only when technical bid was found 'suitable'.
The phraseology used in the aforesaid clauses has got its own meaning, which is very clear. Clause 8 aforesaid not only prescribed the last date of opening of technical bids, but also made it clear that the envelopes of Financial Bid would be opened only when technical bids were found suitable on 4.4.2011. The tenderers, who have submitted their technical bid in prescribed form under the given envelope and have also submitted their financial bid would be considered at the time of opening of the technical bids and if their technical bid is found in order, they would be short listed and such names would be displayed. This short listing was done, as is evident from Annexure CA-3 annexed to the counter affidavit, wherein the names of short listed tenderers have been displayed. The said chart (Annexure CA-3) which gives the particulars of all the tenderers, is reproduced below:
FINDING OF TECHNICAL BIDS OF TENDER NO. 2011-(R) FOR GROUP 'A' ITEMS OPENED ON 29-03-2011 AT HQ, LKO.
DWT JUTE BAGS 40 kg., SACKING/B- TWILL 50 kg etc. SN Particulars Findings 1 Name of Tenderer M/s Northbrook Jute Co. Ltd. Kolkata M/s RDB Textiles Ltd. Kolkata M/s Aditya Translink P. Ltd. Kolkata M/s K.L.Jute Products Pvt. Ltd. Kolkata M/s Jagatdal Jute & Industries Kolkata M/s Parbartak Jute Mill Ltd., Kolkata 2 Whether sealed offers received in two separate envelopes OR NOT Yes Yes Yes Yes Yes Yes 3 Earnest money & Name of the Bank Rs. 23.00 Lac Canara Bank Rs. 23.00 Lac State Bank of India Rs. 23.00 Lac Bank of Baroda Rs. 23.00 Lac United Bank of India Rs. 23.00 Lac State Bank of India Rs. 23.00 Lac Syndicate Bank 4 Whether it is Nationalized Bank OR NOT Yes Yes Yes Yes Yes Yes 5 Whether Manufacturing License attached (if Manufacturer) Yes Yes Yes Yes Yes Yes 6 Copy of Partnership Deed/Registration Certificate/Memorandum of Article of Association, OR Authorization Letter towards Distributor/ Dealership of Principal Manufacturer attached Yes Yes Yes Yes Yes Yes 7 Income Tax Clearance Certificate/Return of Current Assessment Year OR PAN No. Yes Yes Yes Yes Yes Yes 8 Audited Balance Sheet for Two (2) years & turn over Yes Yes Yes Yes Yes Yes 9 S.T., C.S.T. No. Yes Yes Yes Yes Yes Yes 10 Affidavit of Non-Blacklisting Yes Yes Yes Yes Yes Yes 11 Samples submitted Yes Yes Yes Yes Yes Yes The last column of the chart relating to samples submitted, shows that samples were submitted by all the tenderers, but the note appended thereto makes it clear that all the above firms qualified the initial terms, hence the Committee recommended that the samples of the above firms be sent for Testing of Determinable Specification, such as Strength, Ends Picks etc. and not on indeterminable aspects. The committee was also of the view to authorize SPO (Prodn)/Incharge (S & P) to send the samples for testing to any reputed testing laboratory and to take action in this regard with full confidentiality. To maintain confidentiality, the committee recommended that either the samples be sent through reliable courier or deliver the same personally to the Agency. The committee also agreed that only those financial bids may be considered to open, whose reports after testing were found as per the specifications.
The short listing and display of the names of tenderers with respect to their technical bids opened on 29.3.2011 was made known to all the tenderers. It was thereafter that the samples were sent to the aforesaid laboratory with utmost confidentiality i.e. without disclosing to the tenderers or making it known to the laboratory also that which sample belongs to which company. For that purpose coding and decoding was done. The tenderers whose samples after testing were not found as per the specifications, failed and in terms of clause "opening of financial bids", technical bids of such tenderers were held to be not found satisfactory; therefore, there was no occasion to open their financial bids.
The petitioners did know the entire process, which was taken in their presence and it is their specific admitted case that on the date of opening of the technical bids on 29.3.2011, it was made known that the samples would be sent for testing and thereafter the financial bids would be opened. The petitioners did not raise any grievance and agreed to the procedure adopted. The reason is not far to seek, i.e. they were actually not aggrieved then, but felt aggrieved, when the samples could not clear the test.
In the tender notice, there was a specific requirement of submitting the samples alongwith the technical bids. The clause clearly stated that the samples of all items, for which rates are quoted, shall be submitted alongwith technical bids, failing which technical bids were to be rejected. The chart displayed, extract of which has been quoted above, also at the footnote clarified that samples, shall be sent for testing for determinable specification, such as Strength, Ends Picks etc. It is but obvious that the samples, which were to be submitted alongwith the technical bids, were to be considered and tested for coming to a conclusion that they do conform to the specifications prescribed, though the firms qualify the initial terms. The committee, in terms and conditions of the tender notice, opened the technical bids and finding that the samples had been furnished for getting them tested for the purposes of knowing their standard and norms, sent them to a reputed laboratory with utmost confidentiality. It is not expected that the respondent corporation would order for supply of jute bags without getting the samples tested from a reputed lab merely on the submission of the samples. The corporation was entering into a commercial transaction and had to act like a prudent businessman and, therefore, before accepting any offer, it was fully within its competence to get the samples tested from a reputed lab. At no stage the petitioners were kept in dark. They were made aware of the said procedure alongwith other participants and no tenderer objected to the said procedure including the petitioner. In case the petitioners were aggrieved of the said testing of samples, they should have protested at that very time. They were not supposed to take a chance and then to agitate the aforesaid issue on being unsuccessful, that too after three days of the opening of the financial bids.
The very fact that the samples were required to be furnished alongwith the technical bids, failing which technical bids were to be rejected, leaves no room for doubt that the success in technical bid was dependent upon the passing of the test of samples which were furnished alongwith the same. In our opinion, the procedure adopted by the tender committee was very much incorporated in the tender notice and that the petitioners did not have any enforceable right to get their technical bid declared as approved without getting their samples tested. The procedure adopted by the tender committee did not violate any of the conditions nor it had adopted a procedure which was foreign to the tender notice, or in any way can be said to be unreasonable, unfair or arbitrary.
The further plea of the petitioner is that it was only after the supply of jute bags that inspection could have been done and the action envisaged in clauses of terms of payment and inspection (clauses 9(a)(i) and 15 respectively of General Conditions of Contract) could have been adopted, and for which they rely upon the judgment of the Apex Court in the case of New Horizons Limited and another versus Union of India and others, (1995) 1 SCC 478. In Para 22 of the report, the Supreme Court observed as under:
"22. In the said notice the expressions 'tenderer' and "successful tenderer" have been used. While the expression 'tenderer' has been used in paragraphs 5, 8, 11 and 14, the expression "successful tenderer" is used in paragraphs 7, 9(a), 10 and 12. Since paragraph 10 provides for execution of the agreement by the successful tenderer, the said expression is intended to mean the tenderer whose tender has been found suitable for acceptance. The use of the expression "successful tenderer" instead of the expression 'tenderer' in paragraph 12, therefore, indicates that the documentary proof, by way of credentials of past experience, has to be submitted after the tender has been considered and is found suitable for acceptance by the concerned authorities. This would mean that the past experience is a matter which is to be considered after the tender has been examined and evaluated and the tenderer whose tender is found acceptable is required to submit documentary proof regarding his past experience. In other words, a tender is not liable to be excluded from consideration on the ground of non-eligibility on account of lack of past experience. This inference is strengthened by paragraphs 8 and 11 of the notice dated 26-4-1993. In paragraph 8 it is provided that a tender is liable for summary rejection if it is submitted without the Demand Draft of Rs.5,00,000. Similarly in paragraph 11 it is provided that tender is liable to be excluded from consideration if the income tax clearance certificate is not furnished with the tender. There is no similar provision for excluding from consideration a tender on the ground of failure to furnish with the tender the required material by way of credentials of past experience. It means that the matter of past experience has to be considered after the tender has otherwise been found to be suitable for acceptance and a tender is not liable to b e rejected at the threshold without consideration on the ground that the tenderer lacks experience. The decision of the Tender Evaluation Committee to exclude the tender of HNL from consideration was, therefore, not warranted by the terms and condition for submission of tender as contained in the notice for inviting sealed tenders dated 26-4-1993."
So far as the plea of the petitioners as aforesaid is concerned, suffice would be to mention that post-delivery inspection of the goods supplied, namely, jute bags, in the instant case and the mode of making payment thereof cannot be relevant for the purpose of award of the tender, as it would be a situation after the award of the tender, and not before the contract was awarded.
The next plea of the petitioners, that the samples were not sent in their presence and that the laboratory to which they were sent, was not approved by the Bureau of Indian Standards (BIS), is also devoid of merit. After short listing, the names of tenderers were displayed and a chart was prepared, which is placed on record and has been reproduced by us above. It is the specific case of the respondents that samples of all the successful participants including the petitioners were codified and confidential code was allotted to each of the samples. Thereafter they were sent to a very reputed and independent laboratory for testing. The testing results were received in the Corporation on 2.4.2011 and on 3.4.2011, list of parties qualified in sample testing was prepared and it was made known to all concerned and pasted on the notice-board of the Corporation so that all concerned may know about the technical bid result. In the said report, names of all four successful participants of technical bids out of six, were mentioned and it was specifically mentioned that financial bids of only these four participants would be opened on 4.4.2011, which were accordingly opened.
In the counter affidavit, since it was stated that the samples were sent to a very reputed and independent accridable NABL Jute testing laboratory (National Accreditation Board of Testing & Laboratory Equipment, recognized and certified by the Government of India, Ministry of Science & Technology), learned counsel for the petitioners submitted that this was not a laboratory duly recognized and approved by the Bureau of Indian Standards (BIS), to which learned counsel for the respondents responded, by producing the record, that samples were sent to one of the recognized laboratories and also clarified that in the report, they have not given the name of the laboratory, but only mentioned that it was duly approved by NABL. Samples were sent to Aglow Quality Control Laboratory, Kolkata.
Sending of samples for testing to a reputed laboratory, name of which finds place in the list of recognized laboratories to whom such samples could have been sent, as pleaded by the petitioners themselves, with utmost confidentiality and relying upon the test so conducted, cannot be said to be an arbitrary action of the respondents, nor could it be said that it lacked openness, fairness and transparency.
The petitioners also placed reliance upon the case of Harbanslal Sahnia and another versus Indian Oil Corpn. Ltd. and others, (2003) 2 SCC 107, in support of their plea that the samples were not sent in their presence; therefore, the process was vitiated. In the said case, on inspection being made by the officers of the Indian Oil Corporation of a retail outlet, samples were collected, which were found sub-standard, for which the dealership was cancelled. The Supreme Court considered the plea of alternative remedy and found that on the objections which were raised, actually the alternative remedy was not appropriate, hence it interfered with the order. The Court also observed that the test was not carried out at the retail outlet itself and the time gap between the sample taken and the lab test carried out was of about a month, which was capable of causing marginal variation as detected.
Reliance has also bee placed upon the case of Hindustan Petroleum Corporation Limited and others versus Super Highway Services and another, (2010) 3 SCC 321, in support of the aforesaid plea. In the said case, the dealership of Hindustan Petroleum Corporation was cancelled, wherein the Apex Court observed that the guidelines being followed by the Corporation require that the dealer should be given prior notice regarding the test so that he or his representative also can be present when the test is conducted. The said requirement was in accordance with the principles of natural justice and the need for fairness in the matter of terminating the dealership agreement and it cannot be made an empty formality. Notice should be served on the dealer sufficiently early so as to give him adequate time and opportunity to arrange for his presence during the test and there should be admissible evidence for such service of notice on the dealer. Strict adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer.
The aforesaid two cases relate to the testing of samples which resulted into cancellation of the dealership. The question was whether the samples collected were the same petroleum products collected at the outlet or not. Such samples had to be tested in the presence of the dealer so that the principles of natural justice stand followed and they also feel satisfied that there had been no arbitrariness in the testing.
The instant is not a case of cancellation of dealership or contract for the default in compliance with the terms prescribed, but is a case where the contract was to be awarded with respect to the items, mentioned in the tender notice, of the required standard and norms. The tenderers were made known and aware of the fact that their samples were to be tested, for which it was necessary that there should have been a uniform procedure in sending the samples and ofcourse to a reputed laboratory with full confidentiality.
The respondents have established that the process had been uniform, unguided by any other consideration and the samples have been tested in a reputed laboratory. Their reports cannot be questioned unless specifically challenged on any substantial material or substantive ground. The case law, cited by the petitioners, is, therefore, of no help to them.
In regard to the last submission of the learned counsel for the petitioner that the prices quoted by respondent no. 4 were higher and exorbitant and there would be loss to the public exchequer, learned counsel for the respondents has rightly submitted that firstly, the prices have been considered by the tender committee and on being found reasonable, they have been accepted; and secondly, the petitioners cannot raise any such grievance in respect thereof, their samples having failed to qualify the test and their technical bid having been rejected, therefore, the price quoted by them cannot be considered, nor the petition can be treated as PIL.
In case the petitioners were having any grievance against the testing of the samples, they could have raised the objection then and there but not having done so, now they cannot say that the process adopted was not fair. Even in the representation dated 7.4.2011, the petitioners did not express their grievance with respect to the aforesaid procedure of sending the samples for testing being adopted. They did not say that the samples should not have been sent for testing or that they should have been sent in their presence or that the test should have been conducted in their presence. What they said was only that their financial bid has wrongly been not considered and the prices quoted by the respondent no. 4 were higher. This also concludes that the petitioners were not at all aggrieved by the methodology adopted and they were also of the view that the samples had to be tested before finalization of technical bids and opening of financial bids. It is for the first time in the writ petition that they have raised such a plea.
For the reasons aforesaid, we do not find any merit in the petition, which is hereby dismissed.
LN/-
31.5.2011