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TMI Blog2019 (9) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... been defined in clause 2.2.1 to mean the price provided in clause 2.12.1 of Section II of the tender document. L-1 means the tenderer whose tender is the lowest as per clause 2.2.1(xi). Having traversed through the different clauses relating to the terms and conditions governing the present tender, we find that the conditions mandate that the tenderers must read the Instructions given in Form 1 carefully before the tender forms are filled and the bids are submitted. The bidding process was a two-stage process, the first stage being the Technical Bid and the second being a Price Bid. Technically valid and responsive tenders could only be opened for Price Bids. After opening of the Price Bid, the tender was to be awarded to the lowest bidder (L-1). Section VIII provides two proformas in Part I and Part II. Part I relates to the price schedule while part II relates to CCAMC. A perusal of the price bids submitted by the petitioner and respondent No. 2 respectively shows that while the petitioner has claimed the custom duty, respondent No. 2 has not added the duty to the price bid. Column No. 3 of the proforma in Part-I of Section VIII therefore only has a blank in case of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court. 2. The brief facts which need to be captured for deciding the present petition are that the petitioner is a proprietorship firm with Sh. Manish Dalmia as its proprietor. The firm was established in the year 2006 and is engaged in design, supply, installation, testing, commissioning and maintenance of security, surveillance, traffic law enforcement and civil aviation equipments/videoscopes. The petitioner claims that it has successfully supplied, installed, tested, commissioned and maintained the said equipments in Government departments like SPG, NSG, AAI and other police departments. 3. The genesis of the petition starts from the day the Central Board of Excise and Customs ( CBEC ), Directorate of Logistics Lok Nayak Bhawan had floated an e-tender no. 30/EQ/2018 dated 22.3.2018 for supply, installation and maintenance of 74 videoscopes at various field formations of CBEC. The videoscopes are used by custom officers to examine the goods at sea ports, air cargo complexes, inland containers depots, etc. and assist in identification and detection of contrabands and smuggled items. 4. The tender was valid for acceptance for a period of 180 days from the date of tend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apprising him of the fact that the bids were not appearing on the e-procurement portal. On 7.12.2018 and 11.12.2018 the petitioner submitted representations against awarding the contract to respondent No. 2 and seeking reasons for such action. Not getting any favourable response the petitioner filed the present writ petition with the following prayers:- (i) to issue a writ of mandamus and certiorari order direction thereby setting aside the impugned order issued by respondent no. 1 awarding the contract to Respondent No. 2 under E-tender No. 30/EQ/2018 dated 22.3.2018. (ii) to issue direction / order to the respondent no. 1 to place before this Hon ble Court the original records pertaining to the subject contract E-tender No. 30/EQ/2018. 9. On 18.12.2018, notice was issued to the respondents and the award of contract was made subject of the outcome of the writ petition. 10. Learned senior counsel for the petitioner contends that the contract has been wrongly awarded to respondent No. 2 despite the fact that the price quoted by the petitioner was less than the price quoted by respondent No. 2. In fact, in doing so a loss of ₹ 61.30 lakhs has been caused to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been indicated and instead only _ _ _ has been mentioned. He submits that since the column has been left blank, this was an incomplete bid and being non-responsive, it should have been rejected at the outset. Mr. Sethi has also drawn the attention of this Court to Clauses 2.13.2 and 2.13.3 of the tender documents. He submits that as per the tender condition, the tenderer was to indicate the custom duty assessed by him for the videoscope in question and a tentative amount should have been indicated in the proforma as on the date of opening of the technical bids. The custom duty was to be reimbursed later depending on the variation, if any, at the relevant time. He has also drawn the attention of this Court to Section X of the tender documents, which contains Form No. 1 of the tender forms and this Form contains the Instructions as per which the bids had to be submitted. Condition No. 3 clearly requires that the tenderer should fill in all columns of the Form along with supporting documents. Condition No. 5 provides that if any tender Form is incomplete the tender may be rejected. Thus, respondent No. 1 should have rejected respondent No.2 s tender being non-responsive. 12. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the portal from 8.8.2018 till 6.12.2018 and the allegation is denied. It is further averred that the TEC had evaluated the bids and the demonstration of the equipments was conducted by the technically qualified bidders and during the entire period of technical bid opening, the petitioner had never raised any issue of non-availability of the technical bids on the CPP portal. 14. Mr. Sinha, learned counsel for respondent No. 1 submits that the price bids were evaluated as per Clause 2.29.2. The lowest tenderer L-1 was determined on the basis of Net Cash Outflow. He submits that a detailed calculation has been given in the reply affidavit in para 11 and a comparison of the prices of respondent No. 2 and the petitioner would show that respondent No. 2 was lower as his Net Cash Outflow was ₹ 12,43,17,149/- while that of the petitioner was higher being ₹ 12,45,29,536/-. Respondent No. 2 was correctly found as L-1 and awarded the contract. 15. Mr. Sinha further submits that the custom duty structure which was applicable was Basic Custom Duty = 7.5%, surcharge on Basic Custom Duty = 10% and IGST = 18%. Therefore, while evaluating the price bid of the petitioner the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent No. 2 has put a _ _ _ . It was further explained that it was not as if no expenses would be incurred by respondent No. 2 in installation or commissioning, but respondent No. 2 had taken a conscious decision to claim only what was quoted as all inclusive and nothing further was to be claimed from the Government. Further it is explained that since the price quoted by respondent No. 2 was inclusive of custom duty, which includes duty on 1% Landing Charges, the said charges were not added to his price bid and thus it is not open to the petitioner to contend why the 1% Landing Charges were not added to the price bid of respondent No. 2. 18. Respondent No. 1 has in the affidavit also given a detailed comparative chart of the prices of the petitioner and respondent No. 2 indicating how the Net Cash Outflow has been calculated. It is explained that since the order was placed on respondent No. 2 exclusive of GST, the Authorities would have to reimburse the same at 18% and this being added, makes the Net Cash Outflow of respondent No. 2 as ₹ 12,34,22,346/-, which is less than the Net Cash Outflow of the petitioner being ₹ 12,35,90,163/-. 19. Respondent No. 2, who i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. 2 becomes lower than that of the petitioner. Learned counsel has further contended that respondent No.2 had bid at ₹ 10,35,000/-, all inclusive as a price per videoscope on which it computed the GST, whereas the petitioner had bid ₹ 10,45,188/- per videoscope, which included 51,348/- as custom duty. On the face of it thus the petitioner had claimed a higher GST and thus the price was higher. 21. Learned counsel for respondent No. 2 submitted that in the price bid, the column of custom duty had been left blank because it did not intend to import the goods initially and wanted to procure it locally. Though subsequently, the goods have been imported, but respondent No. 2 had no intent to claim any reimbursement from the Government on whatever custom duty he may have actually paid. Learned counsel clarifies that from the very beginning the prices quoted were all inclusive, and therefore, whether the goods have been imported or purchased locally, there is no prejudice to the Government nor any loss to the public exchequer. Learned counsel next contends that it was the petitioner who had actually wrongly quoted the custom duty. While the duty claimed in the price bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding charges did not have any impact, since R-1 clearly knew that the price bid of R-2 was an all inclusive bid and the purpose of indicating _ _ _ was clearly to convey that no amount would be claimed on account of custom duty. 25. We may now refer to the case law which has been relied upon by the respective parties. 26. Learned senior counsel for the petitioner has relied upon a judgment of this Court in the case of Inderjit Mehta vs. UOI in W.P.(C) 5685/2015 decided on 1st September, 2015 for the proposition that in a judicial review, this Court can interfere in a tender matter and insofar as the relief is concerned, in case it is found that there is arbitrariness, a direction can be issued to the Government to declare the lowest bidder as L-1, as also to award the contract to the L-1 bidder. Reliance is also placed on another judgment of this court in the case of Times Innovative Media Ltd. vs. Delhi Transport Infrastructure Development Corporation Ltd. Ors. in W.P.(C) 3973/20012 decided on 02.04.2013 for the proposition that even when a contract has been awarded to a successful bidder and the work has been executed to some extent, there is no absolute rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthor of the tender is the best person to understand it and interpret the documents. Constitutional courts must exercise restraint while interfering and ought not to substitute their own views or interpretations on the tender conditions. Even assuming that there is any procedural aberration or assessment error, courts would not ordinarily interfere. Reliance is placed on Raunak International Ltd. Vs. I.V.R. Construction Ltd. AIR 1999 SC 393 to contend that the lis is purely between two tenderers and a mere difference in the prices offered is not a ground for a court to interfere as these are more in the nature of commercial disputes. The courts must bear in mind that any interference would delay the proposed project and even escalate the cost involved. The judgment of the Apex Court in the case of Afcon Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. and Anr. (2016) 16 SCC 818 is cited and it is argued that if the petitioner s plea is accepted it would be re-writing the tender conditions, which is not permitted in law. 31. We have heard learned counsel for the parties and examined the pleadings as well as the judgments cited by them. We may note here that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als with the duties and taxes which are payable by the supplier in India and are to be reimbursed as per actuals. No claim on account of increase in cost due to taxes etc. was to be entertained. Significant would be to mention clause 2.13.3 which provides that the tenderer should indicate tentative duties and taxes in the proforma as applicable on the date of opening of Technical Bids though the payment was as per actuals. Clause 2.13.6 also needs a mention as it provides that in case the purchaser finds that the duties and taxes have been mentioned incorrectly, it reserves the right to change it to the appropriate values and in that event, the price quoted by the tenderer will be adjusted accordingly. The clause also stipulates that if it is felt that the duties were mentioned incorrectly to gain unfair advantage, the tender would be liable to be rejected. The relevant clauses are quoted hereunder for ready reference: 2.10.1 The e-Tender shall be submitted online at Government of India's Central Public Procurement Portal, http://eprocure.gov.in. The tender shall be submitted in two covers. First cover will contain Technical Bid and Second cover will contain Price Bid. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Technical Bids i.e. clause 2.25. Clause 2.25.2 relates to the Technical Bids being evaluated by the Tender Evaluation Committee and amongst other parameters, the Tender Evaluation Committee is required to assess as to whether the tender confirms to all the Instructions to the tenderers. We quote para 2.25.2(b) as under: 2.25.2 The technical bids will be evaluated by the Tender Evaluation Committee (TEC) to assess the following; XXX XXX XXX b) Does the tender conform to all the Instructions to Tenderers? 35. Evaluation and award criteria is mentioned in clause 2.28. Clause 2.28.1 requires the technical bids to be evaluated on the basis of information and data provided in the bids as well as actual performance of the videoscopes being offered. The price bid is determined in accordance with clause 2.29. Clause 2.29.1 provides that price bids of those tenderers would be opened, who are found technically suitable. Clause 2.29.2 provides the methodology for determining the lowest tenderer (L-1) and is of great significance to decide the main controversy involved in the present petition. We quote clause 2.29.2 hereinunder for a ready reference: 2.29.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the tenderer must read before filling up the tender Forms. Para 3 of these instructions require the tenderer to fill all columns of the tender Form with supporting documents and para 5 provides that if the tender form is incomplete the tender may be rejected. It is necessary to quote the two paras hereinunder: 3. The tenderer should fill in all columns of this Tender Form and enclose supporting documents. The etendering process may permit replacement of shortfall documents, e.g., a document which is not legible but no additional documents can be submitted after the tenders are opened. Tenderers should therefore submit whatever documents they wish, in support of their tender along with-the tender itself. XXX XXX XXX 5. Any tender may be rejected if: a) The tender form is incomplete. 38. Having traversed through the different clauses relating to the terms and conditions governing the present tender, we find that the conditions mandate that the tenderers must read the Instructions given in Form 1 carefully before the tender forms are filled and the bids are submitted. The bidding process was a two-stage process, the first stage being the Tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicated in the bid document and without including the custom duty and respondent No. 2 being L-1 was rightly entitled to the award of the contract. 42. A perusal of the price bids submitted by the petitioner and respondent No. 2 respectively shows that while the petitioner has claimed the custom duty, respondent No. 2 has not added the duty to the price bid. Column No. 3 of the proforma in Part-I of Section VIII therefore only has a blank in case of the bid of respondent No.2. We may at this stage refer to paras 3 and 5 of the Instruction to tenderers mentioned in Form -1 of Section X, as quoted by us above. It is clear from a reading of the Instructions that the tenderer was required to fill in all columns of the tender form, and if the tender form was incomplete, the same ought to have been rejected. In our view, when respondent No. 2 left the column of custom duty blank, this was an incomplete form and ought to have been rejected as non-responsive in terms of the above mentioned instructions to tenderers. 43. In this context we may also refer to Clause 2.13.3 which mandates the tenderer to indicate the tentative duties and taxes in the proforma as applicable on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the custom duty would have an impact on the price and therefore is a determining factor to decide the L-1 bidder. Thus, in the particular facts and context of this case, leaving the column of custom duty blank makes us reach a conclusion that respondent No. 2 was only waiting to see the price bid of the petitioner and then interpret the blank column to suit its convenience. Hypothetically speaking, if respondent No. 2 had been the lowest bidder with a huge difference of price between it and the petitioner it could have interpreted the blank column to state that he would claim custom duty, as it was paid by him and was a statutory due. We are afraid that in tenders such ambiguous biddings cannot be permitted. Had respondent No. 2 been genuine about its stand it would have mentioned in the custom duty column or elsewhere in the bid that the prices quoted were all inclusive and no reimbursement of custom duty would be sought. Thus, the contention of learned senior counsel for the petitioner that the bid was non-responsive and invalid has merit. 45. We are also in agreement with the contention of learned senior counsel for the petitioner that respondent No. 1 has wrongly levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent, the main factor which has resulted in respondent No. 2 being determined as L-1 was the Net Cash Outflow from the purchaser in the first seven years after commissioning. It is explained that the Net Cash Outflow is determined by adding the contract price of the system and the sum of discounted annual maintenance charges (CCAMC) for five years. A detailed calculation showing the discounted CCAMC charges given by the petitioner and respondent No. 2 is also mentioned on these pages. At page 114 of the paper book respondent No. 1 has given the Net Cash Outflow for the petitioner as ₹ 12,45,29,536/- while for respondent No. 2 it is ₹ 12,43,17,149/-. We deem it appropriate to extract hereinunder the manner in which the net cash outflow has been worked out by respondent No.1: Discounted CAMC Charges (in Rs.) S. No Payment Respondent 2. Total Cost of AMC (A) Discount Factor (B) Net Present Value (A/B) 1. 1 st Year CAMC Advance 3574422 1.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.19 3090091 2. 1 st Year CAMC Balance 3677208 1.3 2828622 3. 2 nd Year CAMC Advance 3677208 1.3 2828622 4. 2 nd Year CAMC Balance 3677208 1.41 2607949 5. 3 rd Year CAMC Advance 3677208 1.41 2607949 6. 3 rd Year CAMC Balance 3677208 1.54 2387797 7. 4 th Year CAMC Advance 3677208 1.54 2387797 8. 4 th Year CAMC Balance 36772 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us evident that it is the absence of these two factors that the contract price of respondent No. 2 has become lower than the petitioner, as rightly contended by learned senior counsel for the petitioner. Thus, the CAMC charge, is not the only factor which has resulted in the price difference between the two parties. In fact, as noted above the CAMC charges of the petitioner are on the lower side. Thus, the contention of respondent No. 1 that the price difference is on account of the CAMC charges which has determined the Net Cash Outflow and has resulted in respondent No. 2 being lower deserves to be rejected. 49. We may now deal with the only other contention of the official respondents as well as the successful tenderer that this Court cannot interfere in tender matters in judicial review and more particularly if it with respect to a public project or where substantial part the work is already completed. There cannot be a quarrel with the proposition of law that the Constitutional Courts cannot interfere with the Government s freedom of contract and the principals of Judicial Review can only extend to examining the decision making process. It is, however, equally true tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of India Vs. Bharti Hexacon (supra) , in our view, cannot be of any avail to respondent No.2. While it is true that the petitioner did not have an interim order in its favour restraining respondent No.1 from finalizing the award of tender, but on 18.12.2018 when notice was issued in the writ petition, this Court had clearly observed that the award of contract shall be subject to the outcome of the present writ petition. There is no doubt that the respondents had been put to notice on this date, that if the petitioner succeeds, the award of tender could be quashed. 52. Learned counsel for respondent No. 2 had relied upon the judgments in the cases of Chhattisgarh State Industrial Development Corporation Ltd. (supra) and Tejas Constructions and Infrastructure Private Limited (supra) to argue that once a substantial part of the tender stands performed, the Courts should not interfere. Learned counsel had also relied on Nicco Corporation Ltd. (supra) to contend that once the work has been executed to the extent of 80% any interference would delay a public project and was therefore unwarranted. There is no doubt that as a normal rule if substantial work has been perf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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