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TMI Blog2017 (10) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... if it were a subsidiary- had to fulfill the turnover and essential experience criteria. The other conditions (reproduced earlier) substantiate this intention. Therefore, this court holds that the rejection of the petitioner’s tender conditions cannot be interfered with; it holds that BSNL’s position is neither arbitrary nor a misinterpretation of the tender terms. The court is also of the opinion that the materials brought on record, nowhere indicate that the sole proprietorship’s business was entirely subsumed or taken over by the petitioner company. There is no document establishing that goodwill was parted; nor was a separate consideration paid. Furthermore, the sole proprietorship continued to function for a while, even after incorporation of the petitioner company. The latter did not reflect any provident fund contributions and appears to have registered early in 2016 and shown its first contributions thereafter. On the other hand, Pratap Technocrats, the sole proprietorship, with its different registration number, continued to make contributions even in June and July 2016. These facts show that the assertion by the petitioner that the sole proprietorship’s business ceased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitary, water, gas, electric lights, telephone, telegraphic, television, and power supply works and also other structural work of any kind and to prepare estimates, designs, plants, specifications or models and to carry on the business of advisers, consultants, planners or managers in connection with mobile towers in India. While so, on 29.10.2015, BSNL issued the NIT for the service of outsourcing of operations and Maintenance (O M) activities of passive infrastructure along with Sales and Marketing (S M) work of non allocated BSNL tower sites in 21 Circles in cluster form. 3. On 27.11.2015, the petitioner, Pratap Technocrats (P) Limited- was incorporated as a private Indian company. It submitted its bid, in response to the NIT, to BSNL, offering to provide the services, on 15.03.2016. On 01.06.2016, BSNL sought a post bid clarification from the petitioner on certain aspects including how it had furnished audited financial statements of M/s Pratap Technocrats which was not a company incorporated under the Companies Act, 2013. The specific query in this regard was: While examining the Certificate of Incorporation, it is found that M/s. Pratap Technocrats Private Limited ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by the Board of the company M/s Pratap Technocrats Private Limited. iv. M/s Pratap Technocrats proprietorship concern has no more existence and all the new tender are being applied in the name of company only on the basis of technical and financial credential of earlier M/s Pratap Technocrats and all the existing contracts in the name of M/s Pratap Technocrats have already been got converted in name of company. M/s. Pratap Technocrats Private Limited or under process of conversion. On the above facts it is. cleared that the company Pratap Technocrats. Private Limited company incorporated under Companies Act, for converting proprietorship firm to Company with intent to take over (please refer Object clause of MOA- attached} and has taken over the running business including technical and financial credentials of M/s Pratap Technocrats as going concern from 27.10.2015. Now, please find herewith enclosed the complete sets of ITR (2012-13, 2013-14 2014-15) of the earlier proprietorship concern M/s. Pratap Technocrat and requested to last 3years financial of M/s Pratap Technocrats proprietorship concern of Mr. Devendra Singh Shekhawat to substantiate the already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken over, by complete share transfer by another company or individual, who might never have any experience, nevertheless it is deemed compliant and eligible; in the same manner, when a sole proprietorship, prospers and transforms into a private limited company, to say that the erstwhile concern s experience cannot be linked to that of the new company, or taken into consideration for determining eligibility, would be illogical and arbitrary. 6. Ms. Bhati relied on New Horizons Ltd. v. Union of India, (1995) 1 SCC 478, to say that the Supreme Court indicated the correct approach in interpreting terms of an invitation to tender, to the following effect: the requirement regarding experience does not mean that the offer of the original company must be considered because it has experience in its name though it does not have experienced persons with it and ignore the offer of the new company because it does not have experience in its name though it has persons having experience in the field. While considering the requirement regarding experience it has to be borne in mind that the said requirement is contained in a document inviting offers for a commercial transaction. The te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Act 1956. ) and possess technical qualification of three years (clause 4.2.1. The Bidder must have experience of Comprehensive O M of total 1500 Nos. of tower sites of Telecom Service Providers (holding service license) or Infrastructure Providers (holding IP-1 registration) taken together during the three consecutive financial years ). BSNL also relied on the following conditions: 21.5 A bid, determined as substantially non-responsive will be rejected by BSNL and shall not subsequent to the bid opening be made responsive by the bidder by correction of the non-conformity. 21.6 BSNL may waive any minor infirmity or non-conformity or irregularity in a bid which does not constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of any bidder. It was submitted that like formulation of tender conditions, their interpretation was also a matter falling within the domain of the executive agency. Reliance was placed on the decision in Michigan Rubber (India) Limited Vs. State of Karnataka Others (2012) 8 SCC 216 that: 23. From the above decisions, the following principles emerge: ( a) the basic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Vs. Nagpur Metro Rail Corporation Ltd. Anr 2016 SCC Online SC 940 where the Supreme Court held as follows:- 14.....a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision. xxxxxxxxx 16. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given. 9. AST Solar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Price Bid submitted by the Bidder, in response to this Bid Document, in accordance with terms and conditions hereof 1.3 Bidder shall mean Bidding Company submitting the Bid. Any reference to the Bidder includes Bidding Company. 1.4 Bidding Company shall mean the single registered corporate entity that has submitted a Bid in response to this document. The third parties therefore, argue that the condition highlighted by the petitioner should be read cumulatively with all other tender stipulations, which bring home the point, unlike in the case of New Horizons, that the bidder must possess all the eligibility conditions. As the petitioner does not possess them, having been incorporated barely a month after the NIT, the rejection of its bid is justified. 10. M/s Pace Power Systems also urges that the intention of the amendment to the petitioner s objects clause was to create eligibility when none existed. It argues that even today, both the sole proprietorship and the Petitioner Company are coexisting and doing business. This aspect is clear from the records, which Pace Power was able to obtain from the public domain - (a) Sales Tax Forms; (b) Provident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes Bidding Company. ) and Clause 1.4 (which says Bidding Company shall mean the single registered corporate entity that has submitted a Bid in response to this document. ), have to all be read as a part of the eligibility criteria. These, together with Clause 4.3.1, underline that bidders should have- minimum cumulative turnover of ₹ 100 Crores (audited) taken together during the three consecutive financial years 2014-15, 2013-14 and 2012-13 from the business of Operation Maintenance (O M) of passive telecom infrastructure. Bidders will be required to support claims of their financial qualification through their audited financial statements in the prescribed format. Clause 4.2.2 too is relevant; it states (as an exception to the condition that bidders experience is necessary) that In case of a subsidiary company seeking financial qualification basis the strength of its holding/ parent company, a) the board resolution of the holding/ parent company. 13. The underlying or overarching concern of the public agency, i.e., BSNL is that the bidder, and the bidder alone, should fulfill the eligibility criteria; where an exception is contemplate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y experience, which could not- having regard to the tender conditions, be ignored. It was in this context, that the court held that: the said requirement regarding experience cannot be construed to mean that the said experience should be of the tenderer in his name only. It is possible to visualise a situation where a person having past experience has entered into a partnership and the tender has been submitted in the name of the partnership firm which may not have any past experience in its own name. That does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. Similarly, a company incorporated under the Companies Act having past experience may undergo reorganisation as a result of merger or amalgamation with another company which may have no such past experience and the tender is submitted in the name of the reorganised company. It could not be the purport of the requirement about experience that the experience of the company which has merged into the reorganised company cannot be taken into consideration because the tender has not been submitted in its name and has been submitted in the name of the reorganised compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction for a while, even after incorporation of the petitioner company. The latter did not reflect any provident fund contributions and appears to have registered early in 2016 and shown its first contributions thereafter. On the other hand, Pratap Technocrats, the sole proprietorship, with its different registration number, continued to make contributions even in June and July 2016. These facts show that the assertion by the petitioner that the sole proprietorship s business ceased after its incorporation, is not free from doubt; in any case, it cannot be termed as an established fact. 18. Courts, in exercise of judicial review jurisdiction are in a sense second guessing decisions made by the executive, which is tasked by the Constitution to make those decisions, in the first instance. The lens that courts necessarily adopt is narrow rather than wide; they are to permit greater latitude to the public agencies. The determinations of such agencies are not like quasi judicial decisions but with economic and expectedly commercial objectives. Unless a constitutional value is shown to have been undermined, or a law violated, or fair procedure avoided, the outcome of processes adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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