M/S GREEN EARTH INFRASTRUCTURE PVT LTD TH JALBIR SINGH V. U T OF J AND K TH COMMISSIONER SECRETARY PMGSY JKRRDA JAMMU AND OTHERS

WP(C)/97/2023

AI Insights

The case revolves around a dispute concerning the exclusion of M/s Green Earth Infrastructure Pvt. Ltd. from a tendering process for a road upgrade project in Jammu. The petitioner challenged the orders dated 7th January 2023 and 18th January 2023, which declared them non-responsive and awarded the tender to M/s A. H. Wani Infratech Pvt. Ltd. The petitioner argued that their exclusion was arbitrary and violated the principles of natural justice, especially since they had previously been declared responsive under similar circumstances. However, the court found that the petitioner did not comply with the specific documentation requirements outlined in the SBD, leading to their non-responsiveness.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 690813 (HC-JAMMU)
• Appeal Type: Others
• Pronouncement Date: 03-08-2023
• Assessment Year: misc
• Other Referred Cases: Tata Cellular v. Union of India, TATA MOTORS LIMITED versus THE BRIHAN MUMBAI ELECTRIC SUPPLY & TRANSPORT UNDERTAKING (BEST) AND OTHERS
• Laws Referred To: Standard Bidding Documents, Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAVINDER GUPTA; SUNIL SETHI; RAVI ABROL
• Assessee Lawyers: ADITYA GUPTA
• Keywords: Financial Bid; Judicial review; Non-responsive; Quashment; Technical bid; Tender; Contractual work
• Section: 4.4 B(a) III (e); 4.4 B(a) III (f)

Judgement Text

" HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU WP(C) No. 97/2023 CM No. 212/2023 CM No. 1954/2023 M/s Green Earth Infrastructure Pvt. Ltd. …. Petitioner/Appellant(s) Through:- Mr. Aditya Gupta, Advocate V/s Union Territory of J&K & ors. …..Respondent(s) Through:- Mr. Ravinder Gupta, AAG for R1-6 Mr. Sunil Sethi, Sr. Advocate with Mr. Ravi Abrol, Advocate for R7 CORAM: HON’BLE MS. JUSTICE MOKSHA KHAJURIA KAZMI, JUDGE JUDGMENT ORAL 01. By this petition, the petitioner has challenged and sought quashment of the orders dated 7th January, 2023 and 18th January, 2023 whereby the technical bid and the financial bid in question has been opened and the tender has been allotted in favour of respondent No. 7 to the exclusion of petitioner. BRIEF FACTS OF THE CASE 02. A Tender, bearing E-NIT No. CEJ/PMGSY/28598 dated 07.01.2023 has been issued by the respondents for up-gradation of Road from MRL07-T02 Km Ist to Bhangra Maira via. Khara, Package No. JK05-3004, PMGSY-III, Batch-I of 2022-23 Block-Kharah Balli, District Jammu, length-10.995 kms. The petitioner, alongwith other Sr. No. 51 WP(C) No. 97 /2023 2 eligible tenderers, responded to the same and complied with all the terms and conditions of the tender documents, however, the respondents declared the petitioner as non-responsive for the said NIT and opened the financial bid in favour of sole tenderer respondent No. 7 i.e., M/s A. H. Wani Infratech Pvt. Ltd. 03. The case of the petitioner is that the respondent No. 2 had issued a tender for the contractual work in question vide e-NIT No. CEJ/PMGSY/715 of 2022-23 dated 29.08.2022 wherein the petitioner while uploading the documents on the portal, in pursuance to the tender, duly filled in all the clauses and uploaded more documents than were required just to show the financial and the technical standing of the petitioner. Resultantly, respondent No. 2 declared the petitioner as responsive, but since the petitioner was sole bidder who qualified the bid, and other participants were declared non-responsive, the work package was put for fresh tender and fresh bids were invited vide e-NIT No. CEJ/PMGSY/723 of 2022-23 dated 14.11.2022 and the petitioner was included as bidder in the NIT. It is further stated that the tender was floated with respect to total 21 number of works with the PMGSY department but since respondent No. 2 declared the petitioner as the sole qualified bidder for the opening of the technical bid, therefore, the works were again tendered. It is stated that the petitioner raised this issue before this Court by filing WP(C) No. 2669/2022 and the court granted interim stay on 09.12.2022. Relevant portion of the order reads as under: WP(C) No. 97 /2023 3 “In the meantime, the respondents shall not finalize the bidding process in reference to e-NIT No. CEJ/PMGSY/723 of 2022-23 dated 14.11.2022 till next date of hearing.” 04. It is stated that the order passed by this Court on 09.12.2022 was duly served upon respondent Nos. 2 to 5 but despite that the petitioner was ousted from the said e-NIT No. CEJ/PMGSY/723 of 2022-23 dated 14.11.2022 as they went on to uploading the result of the technical bid vide Order No. SE/PMGSY/l/4431 dated 20.12.2022 making it open for financial bid on 26.12.2022. The action of the respondents was challenged by the petitioner in WP(C) No. 2804/2022, besides a Legal Notice dated 21.12.2022 was also served upon the respondents in this behalf but no action was taken by the respondents. 05. It is also stated that in terms of the impugned order dated 18.01.2023, though the petitioner had uploaded all the documents including the company audit report for the required five years along with the Income Tax Returns of the petitioner for all required five years but the respondents deliberately chose to oust the petitioner arbitrarily after having found him eligible previously upon the same set of documents uploaded on the portal. It is further stated that the respondents while passing the impugned order have violated the terms and conditions of the Standard Bidding Documents (hereinafter to be referred to as „SBD‟) and also failed to acknowledge the fact that all the relevant documents citing the financial stability of the petitioner for required five years stands uploaded. In fact the petitioner is stated to WP(C) No. 97 /2023 4 have uploaded more documents than what was required in terms of the NIT. 06. It is stated that the petitioner has challenged the impugned orders dated 07.01.2023 and 18.01.2023 on the ground that the same are attempt to overreach the powers vested with the respondents insofar as the terms and conditions of the tender documents are concerned and the same tantamount to the contempt of the Court. It is also stated that the impugned orders have been passed in complete violation of the principles of natural justice and the petitioner has been punished merely on the ground that the petitioner has approached this Court on the subject on previous occasions. It is further stated that the respondents have passed the impugned orders despite there being an interim stay for finalizing the bidding process of e-NIT No. CEJ/PMGSY/723 of 2022- 23 dated 14.11.2022. 07. The petitioner states that respondent No. 2 has failed to take note of the terms and conditions of the SBD inasmuch as Clause 22.8 & 22.9 of Section 2 of the SBD is concerned, which clearly states that there cannot be a single bidder that shall qualify the technical summary and be eligible for the purpose of opening of the financial bid. He further states that respondent Nos. 2, 5 & 6 have deliberately rejected the bid of the petitioner as non-responsive only because of the reasons that the petitioner had approached this Court against them. The petitioner herein has impleaded respondent Nos. 5 & 6 in their personal capacity whereas respondent No. 2 has been impleaded as respondent in his official capacity. WP(C) No. 97 /2023 5 08. Per contra, reply stands filed by the official respondents wherein it is stated that the Government and its instrumentalities, in the award of a contract, is subject to judicial review at the instance of an aggrieved party. Submission of a tender, in response to a notice inviting tenders, was merely an offer which the State or its agencies were under no obligation to accept. All that the participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is further stated that while contractual matters are not beyond the realm of judicial review, its application is limited primarily to the infirmity in the decision making process. 09. It is stated by the official respondents that it is settled in catena of judgments that „the owner or the employer of a project, having authored the tender documents, is the best person to understand appreciate and interpret its requirements. It is further stated that the order dated 07.01.2023 which is the summary of technical evaluation in respect of package for up-gradation of Road from MRL07-T02 Km Ist to Plant Bhangra Maira via. Khara, Package No.JK05-3004, PMGSY- III, Batch-I of 2022-23 Block-Kharah Balli, District Jammu length- 10.995 kms was uploaded on the tender portal on 07.01.2023 in which A. H. Wani Infratech Private Limited (private respondent No. 7) turned out to be single responsive bidder and the petitioner i.e., M/s Green Earth Infrastructure Pvt. Ltd. was declared as non-responsive for the reason as under:- “The bidder has submitted Company Audit Reports for 2 years against last 05 financial years which is not to the requirement of SBD clause 4.4 B (a) III (e).” WP(C) No. 97 /2023 6 10. It is stated that as per Clause 4.4B(a)III(e) of the SBD, each bidder mandatorily is required to upload scanned copies of Company Audit Reports (if applicable) for last five financial years at appropriate place on web address www.pmgsytenders.gov.in failing which the bid shall be rejected out rightly. It is further stated that in furtherance of the uploading of the summary of technical evaluation on tender portal, the financial bid was opened on 18.01.2023 and it was the 2nd call for the same work which was previously advertised vide e-NIT No. CEJ/PMGSY/715 of 2022-23 dated 29.08.2022 which was put to fresh tenders vide order No. CEJ/PMGSY/22984 dated 07.11.2022 because the single bidder was found responsive. It is further stated that petitioner has failed to comply with the terms and conditions of the Instruction to bidder of The Standard Bidding Documents (SBD) more specifically clause 4.4 B(a)III(e) as per which, each bidder is mandatorily required to upload scanned copies of Company Audit Report (if applicable) for last five financial years at appropriate place on the website. The petitioner has uploaded Company Audit Report for only two years i.e., 2017-18 and 2018-19, as such, the petitioner has been declared as Non-responsive in terms of order No. CEJ/PMGSY/28598 dated 07.01.2023. 11. It is stated that as the fresh tender was issued, the petitioner, had every opportunity available with him to upload the desired document as referred in SBD. It is also stated that the interim order was passed in WP(C) No. 2669/2022 with respect to the summary of the technical evaluation report of a different work i.e. Upgradation of Road WP(C) No. 97 /2023 7 from T06-Roun Domail To Ramnagar, Package No-JK14-3003, PMGSY-III, Batch-I of 2022-23, Block Ramnagar, District Udhampur, Length 27.50 Kms (Using Waste Plastic) against E-NIT No. CEJ/PMGSY/723 of 2022-23 dated 14.11.2022 in which M/s Green Earth RLS (JV) was declared non-responsive under Clause 4.4 B (a) III (e) and Clause 4.4 B (a) III (f). Both these Clauses are reproduced as below:- “(e) Company Audit Report (if applicable) for last five financial years. (f) Audit Reports under income Tax Act (3CA/3CB along with 3CD reports) (wherever applicable for the last five financial years.” 12. It is stated that by issuance of impugned order dated 18.01.2023, the respondents have acted in furtherance of order dated 07.01.2023 and have not finalized the bidding process with respect to that work in compliance to the directions passed by this Court in WP(C) No.2669/2022 dated 09.12.2022. It is further stated that the respondents have followed the guidelines issued by National Rural Road Development Agency (NRRDA) dated 07.05.2013 and as per these guidelines, under Clause 5.8(c), “Second and Subsequent Invitation of Bids/Tenders: Before issuing the second or subsequent invitations of bids, the SRRDAs are free to re-package the works or revise the estimated cost based on current market rates though no cost escalation would be borne by Government of India in such cases (in case of repackaging, the invitation of bids would be treated as fresh invitation/call} but the State would be able to accept Single Tender in second or subsequent invitations/calls keeping in view the Guidelines of CVC WP(C) No. 97 /2023 8 in this regard and the fact that the rates are reasonable and full justification is recorded. Such bids shall be accepted with the approval of a Committee headed by CEO of SRRDA and comprising CE/E-in-C and Financial Controller as members.? 13. Reply on behalf of respondent No. 7 has also been filed. It is stated that the writ petitioner has failed to exhaust the alternative efficacious remedy provided under clause 22.6 of the e-NIT which provides that result of evaluation of Part-I of the Bids shall be made public on procurement systems following which there will be a period of five working days during which any bidder may submit complaint which shall be considered for resolution before opening Part-I of the bid. It is further stated that the petitioner has miserably failed to make out a case against answering respondent No. 7 requiring a judicial review by this Court. For maintaining writ petition seeking judicial review of the contracts and the petitioner is required to establish a prima facie case which warrants exercising the power of judicial review. Reliance has been placed on the judgment of the Apex Court passed in case titled Tata Cellular v. Union of India reported as (1994) 6 SCC 651. 14. The Apex Court in case titled TATA MOTORS LIMITED versus THE BRIHAN MUMBAI ELECTRIC SUPPLY & TRANSPORT UNDERTAKING (BEST) AND OTHERS reported as 2023 LiveLaw (SC) 467, has held that no judicial review is permissible in commercial matters unless a case of arbitrariness, mala fide, bias or irrationality is made out. It has further been laid down that the courts must realise their WP(C) No. 97 /2023 9 limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. It would be profitable to reproduce the relevant paragraph of the judgment herein, thus: “48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.” 15. It is well settled law that judicial review of administrative decisions is limited to examining whether the decision making process is vitiated by any illegality, procedural irregularity or perversity. It is WP(C) No. 97 /2023 10 stated that in terms of the interim order dated 07.01.2023, the technical evaluation result of respondent No. 7 was declared as responsive whereas the petitioner has been declared as non-responsive on account of non-fulfillment of the terms and conditions of the Standard Bid Document. It is further stated that whenever the department re-tenders the work, in that eventuality, every contractor, who is participating in the bidding process, are required to apply afresh by uploading all the necessary documents which were required in terms of Standard Bid Document. However, in the present case, the petitioner failed to upload the necessary documents in terms of Standard Bid, as such, has rightly been rejected in the technical evaluation result. 16. Heard learned counsel for the parties and perused the material on record and also record produced by the respondents. 17. The petitioner is aggrieved of the order passed by the respondents on 07.01.2023 whereby he has been declared as non- responsive on account of the fact that he had submitted Company Audit Reports for 2 years only against last 05 financial years which is not in conformity with the requirement of SBD clause 4.4 B (a) III (e) whereas respondent No. 7 has been shown as responsive bidder for upgradation of Road from MRL07-T02 Km 1st to Bhangra Maira via. Khara, Package No. JK05-3004, PMGSY-III, Batch-I of 2022-23 Block- Kharah Balli, District Jammu length-10.995 kms. Subsequently, the financial bid was also opened by the official respondents and respondent No. 7 was declared as LI. The only contention raised by the petitioner is that he had fulfilled all required conditions laid down in WP(C) No. 97 /2023 11 NIT with respect to 4.4 B (a) III (e) & (f) whereas the stand taken by the respondents is that the petitioner has failed to upload the requisite documents in terms of the e-NIT and record. 18. Since the contest is made on the sole ground that the petitioner despite having fulfilled the requisite conditions of the e-NIT, has been ousted arbitrarily from the tendering process, therefore, the court made an endeavour to assess the veracity of the claim insofar as the uploading of the disputed documents is concerned. 19. Perusal of the e-NIT and the record would clearly reveal that the petitioner had infact placed on record Company Audit Report for only two years i.e., 2017-18 and 2018-19 instead of last five financial years as envisaged by the e-NIT. Insofar as respondent No. 7 is concerned, he has placed on record Company Audit Report for last five financial years as per Clause-4.4 B (a) III (e) as well as Audit Reports under Income Tax Act (3CA/3CB along with 3CD reports) in terms of Clause-4.4 B (a) III (f), thereby satisfying the criteria and emerged as L1 in the process. 20. Mr. Ravinder Gupta, learned AAG, appearing for the respondents, has stated that all the conditions have been reflected in the e-NIT and are mandatory. 21. Mr. Sunil Sethi, learned Senior counsel, rightly submits that interim order, of which reference is being made by the learned counsel for the petitioner, passed in WP(C) No. 2669/2022, was in respect of work order i.e., Upgradation of Road from T06-Roun Domail to Ramnagar, Package No-JK14-3003, PMGSY-III, Batch-I of 2022-23, WP(C) No. 97 /2023 12 Block Ramnagar, District Udhampur, Length 27.50 Kms figuring at Sr. No. 14 of the e-NIT, is different than the work in question, as such, has no relevance insofar as challenge made in the instant writ petition is concerned. 22. In terms of the order dated 09.12.2022, this Court had directed the respondents not to finalize the bidding process in reference to e-NIT No. CEJ/PMGSY/723 of 2022-23 dated 14.11.2022 and the respondents have not finalized the same. 23. Since the whole challenge to the impugned allotment is based on the factum of petitioner having fulfilled the requisite conditions of the e-NIT which upon perusal of the record proved negative, therefore, the challenge loses significance. The respondents have not acted arbitrarily in any manner whatsoever, as such, the allotment made in terms of the impugned order does not require any interference. 24. In view of the above stated facts and circumstances and the mandate of law as laid down in catena of judgments of the Supreme Court, this petition is held to be without any merit, therefore, dismissed along with all connected CMs. Interim orders, if any subsisting as on date, shall stand vacated. There shall, however, be no order as to costs. 25. Record has been returned to Mr. Ravinder Gupta, learned AAG in the open Court. JAMMU 03.08.2023 RAM MURTI (MOKSHA KHAJURIA KAZMI) JUDGE Whether the order is speaking : Yes/No Whether the order is reportable : Yes/No "