M/s Hytronics Enterprises V. UUnion of India

WP/25868/2023

AI Insights

The case involves M/s Hytronics Enterprises, which filed a writ petition against the Union of India and South Central Railway, challenging the non-opening of its financial bid in a tender process. The petitioner argued that despite meeting all tender conditions and providing a valid bank guarantee, the financial bid was not opened due to an alleged clerical error in the bid guarantee's claim period. The respondents contended that the technical bid was not finalized and the error in the bank guarantee was not curable. The court referenced a Supreme Court decision, emphasizing that minor discrepancies should not lead to disqualification if the bid is otherwise valid and economically preferable.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 766623 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-10-2023
• Assessment Year: misc
• Other Referred Cases: Rashmi Metaliks Limited and another v Kolkata Metropolitan Development Authority and others
• Laws Referred To: Article 14, Article 19(1)(g), Article 21
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GADI KUMAR
• Assessee Lawyers: J VARADHAN
• Keywords: Bank guarantee; Disqualification; Financial Bid; Technical bid; Tender Conditions; Writ of Mandamus
• Section: 151; 226

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY,THE TENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 25868 OF 2023 132s21 ...PETITIONER Between: AND 1 2 3 M/s Hytronics Enterprises, Having its registered address at 3rd floor Sai Ratna Complex, B1- Electronic complex ECIL X Roads, Kushaiguda, Hyderabad- 500062. Rept. by its Managing Partner Sri. M Anil Kishore. Union of lndia, Rept. by its Chairman, Railway Board and CEO Rail Bhavan, Raisina Road, l ,lew Delhi. South Central Railway Rail Nilayam, Secunderabad Telangana- 500071. Rept. by its General Manager Signal 'and Telecommunication Department, South Central Railway Rail Nilayam, Secunderabad Telangana- 500071. Rept. by its Chief Signal and Telecommunication Engineer ...RES'.NDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Cou( may be pleased to issue a writ of Mandamus or any other writ / order / direction declaring the action of the Respondents in not opening the financial bid of the Petitioner despite the petitioner satisfying the tender conditions in Tender No.C SG C 36 5 385 dated 26.06.2023 issued by 3rd respondents illegal, arbitrary. highhanded and contrary to the settled position of law apart from being violative of Article 14' 19(1Xg) and Article 21 of Constitution of lndia and consequently direct the Respondents to open the flnancial bid of the Petitioner submitted by them pursuant to the said Tender Notification lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the 3rd respondent to open the financial bid of the Petitioner pursuant to the Tender No. C-SG-C-36-5-385 dated 26 06'2023 issued by 3rd respondent or in alternative to stay all further proceedings including the opening of financial bids pursuant to Tender No. C-SG-C-36-5-385 dated 2610612023 issued by Respondent lA NO: 2 oF 2023 Between: AND 'l . The Union of lndia' Rept' b1 its Chairman' Railway Board and CEO Rail ' Bhavan, Raisina Road, New Delhi' 2. South Central Railwav 'h'ii-iiii'v\"' Secunderabad Telangana- 500071' Rept. bY its General Manaqer 3. Sional and Telecomm,ii\"\"'tion Department' South Central Railway Rail Ni-tavam. Secunderabai'i;;ft\"\"r-\"sObOZt. nept. by its Chief Signal and Telecommunication Engineer ...'ET.TIONERS/RES'.NDENTS M/s Hytronics Enterprises, Having its registered address at 3rd floor Sai Ratna Comolex. B1- Electronrc \"\"i\"iiE-'eCtt .X.ngg9t,, Kushaiguda' Hyderabad- ;0\"006;. h;i uv iis-r'/inaging Partner sri' M Anil Kishore' ...RESPONOENT/WRIT PETITIONER ! I ! I ! i l l l 1 I Petition under Section 151 CPC praying that in the circumstances stated intheaffrdavitfiledinsupportofthepetition,theHighCourtmaybepleasedto vacate the rnterim orders passed in WP No'25868 ot 2023 dt 19/09/2023 and to dismiss the Writ Petilion, in the interest of justice Counsel for the Petitioner: SRI' J' VISHNU VARDHAN Counsel for the Respondents: SRI GADI PRAVEEN KUMAR (DY. SoLICITOR GENERAL OF INDIA) The Court made the following: ORDER HON'BLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION No.25868 OF 2023 ORDER Heard learned counsel for the petitioner and learned counsel appearing for the respondents. 2. The petitioner approached the Court seeking the prayer as follows: \"To issue a writ of Mandamus or any other writ / order / direction declaring the action of the Respondents in not opening the financial bid of the Petitioner despite the petitioner satisfying the tender conditions in Tender No.C_SG_C_36_5_385 dated 26.06.2023 issued by 3rd respondent as illegal, arbitrary, highhanded and contrary to the settled position of law apart from being violative oF Article 14, 19(1Xg) and Article 21 of Constitution of India and consequently direct the Respondents to open the financial bid of the Petitioner submitted by them pursuant to the said Tender Notification and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case.\" PERUSED THE RECORD 3. The case of the petitioner, as per the averments made in the affidavit filed by the petitioner in support of the present writ petition, in brief, is as follows:- ,l il ,i I a) The petitioner is a private limited company, which deals with the manufacture of Vital Safety Relays and also executes Railway Signafling interlocking projects, involving Relay Logic and Computer based interlocking (CBI) or Electronic Interlocking (Ei). The petitioner pursuant to the tender No.C_SG_C 36_5_385 dated 26.06.2023 with issued by the 3.-d respondent, pertaining to ..Comprehensive signalling and telecom m unication works for provision of automatic block signalling system in Mandamari_peddapalli jn Section of Secunderabad division in south central railway,,, the petitioner submitted technicat and financial bid on 07.0g.2023 with estimated cost of the tender being Rs.77,gg,57,g43,23/_. b) As per the tender document, the technical bids of the participants would first be opened and those participants who qualify in the technical bid will then be short listed for the financial bid stage and then the financial bids of the short listed participants are opened and the bidders are sorted in ascending order. The pre-q ua lification bid opening date was on 14.08.2023 and the petitioner being qualified to take part in the tender process, downloaded the tender document and after verifying the etigibility criteria in Clause No.2.2 of the tender document, took part in the tender process. 2 c) In accordance with clause 1.2.4 of the tender document, the petitioner submitted bid security for Rs.38,94,800/- vide BG Ref No.O50-5523-bg-000-2350 dated 04.08.2023. As per the said clause the bidder will have to provide the bid security through e-payment Gateway of Authority or submit as Bank Guarantee Bond from a scheduled State Bank of India, Commercial Branch. The Bank Guarantee Bond shall be valid for a period of 90 days beyond the bid validity period. d) The petitioner observed that during the submission of the bid, the petitioner has inadvertently mentioned the claim period of the bank guarantee submitted by the petitioner to be till 30.04.2024 . instead ot 30.04.2025. Then the 3'd respondent had sought clarification in this regard from the bank vide letter dated 18.08.2023 to which the bank has replied vide letter dated 21.08.2023 thereby indicating that the claim period of the Bank Guarantee submitted by the petitioner is until 30.04.2025. The petitioner informed the 3'd respondent vide representation dated 30.08.2023 that the petitioner had inadvertently mentioned the claim period of the Bank Guarantee submitted by the petitioner to be till 30.04.2024 instead of 30.04.2025. The SBI vide letter dated , 3 2t.08.2O23 indicated that the claim period of the bank guarantee is till 30.04.2025. e) Further the 3.d respondent has orally informed the petitioner that the petitioner,s bid would be disqualified for the reason that the claim period of the bank guarantee submitted by the petitioner is mentioned as 30.04.2024 instead of 30.O4.2025. The petitioner pointed out that it was eligible for taking part in the tender process and arso the documents were scrutinized by the 3.d respondent and no objection was ever raised by them and also the 3.d respondent had sought clarification from the bank vide letter dated 1g.0g.2023 and had acknowledged the reply received from the bank vide letter dated 21.08.2023 indicating that the claim period of the bank guarantee submitted by the petitioner is till 30.04.2025. Therefore, the petitioner,s bid cannot be rejected. The petitioner also addressed a representation dated 30.08.2023 to the 3'd respondent but the same has not been considered till date. The respondents informed the petitioner on 13.09.2023 that they wilt be opening the price bid on L6.09.2023 and that the petitioner,s price bid woutcl not be opened. Therefore, the present writ petition is filed. 4 4. The counter affidavit has been filed by the respondents and in partacular,, the relevant portion of paragraph No.4 and paragraph No.lO of the said counter affidavit reads as under: 'whereas the oetiti ner submitted bank h v rid nd not rms 2.2 .2.4 the RFP (Reouest for ProDo ll. On this o und the resent writ oetition is li ble to dismissed. With regard to para (11) it is submitted that the contention of the petitioner that the defect is curable or cured by the bidder then rejecting the entire bid of the participant amount to gross illegality and such rejections have been held to be fault as held by various Courts, is not applicable to the present case of the petitioner, stn the te hnical b d is not vet fina!ised till date nor draft minutes are circula amono the Tender Committee Members.\" 5. A bare peiusal of the contents of the letter dated 21.O8.2023 reads as under: \"With reference to your mail and letter No.C/SG/C/36/5/385 dated 18.08.2023, we confirm having issued BG No.05055238G0002350 for Rs.38,94,800/- in favour of beneficiary FA&CAO/CN/SC, South Central railway on behalf of M/s Hytronics Enterprises India Private Limited as on 04'08'2023' The claim period is till 30.04.2025. The beneficiary has the complete rights on the BG till 30'04'2025' The Bank 5 il I t: : 2 u hasc haroed he Com (H IPL the s anv applicable till 3O.O4.2025.,, D scu sroNANDC NCLUSION 6. The specific case of the petitioner is that the petitioner submitted a bid security of Rs.38,94,800/_ as on 04.08.2023 vide bank guarantee No.05055238G0002350 and the petitioner participated in the bid and made an application by duly offering the bid security from period t2.07.2023 to 30.04,2025 and the same had been confirmed in favour of the petitioner. But however, on the ground that the same is not in terms of Clauses 1.2.2 and I .2.4 of the request for proposal, the same is not being considered by the respondents. 7. Further the case of the petitioner is that a mistake crept in the tender filling form and though the petitioner had furnished the security commencing from 12.O7.2023 to 30.04.2025 in the apprication due to the error it was fi[ed as 30.04.2024 whereas the bid security drawn from SBI vide 8G.No.05055238G0002350 dated 04.08.2023 clearly shows that the validity is tiil 30.04.2025. 6 B. A bare perusal of the letter dated 21.08.2023 of the State Bank of India, Secunderabad, clearly indicates the date of claim period as 30.04.2025, pertaining to the bank guarantee amount of Rs.38,94,800/- in favour of beneficiary FA and CAO/CN/SC, South Central Railway on behalf of the applicant i.e. M/s Hytronics Enterprises (India) Private Limited i.e. the petitioner herein as on 04.08.2023 vide bank guarantee No.0505523BG0002350. 9. Learned counsel for the petitioner places reliance on the judgment dated 11.O9.2O13 of the Hon'ble Apex Court reported in (2O13) 10 SCC 5 in Rashmi Metaliks Limited and another v Kolkata Metropolitan Devetopment Authority and others, and in part-cular paragraph 18 and 19, reads as under: \"18. we think that the income tax return would have assumed the character of an essential term if one of the qualifications was either the gross income or the net income on which tax was attracted. In many cases this is a salutary stapulated, since it is indicative of the commercial standing and reliability of the tendering entity. This feature being absent, we think that the filing of the latest income tax return was a collateral term, and accordingly the Tendering Authority ought to have brought this discrepancy to the 7 wP-25a6!_mr3 s,, notice of the appellant Company and if event thereafter no rectification had been carried out, the position may have been appreciably different. It has been asserted on behalf of the appellant Company, and not denied by the learned counsel for the respondent authority, that the financial bid of the appellant company is substantially lower than that of the others, and, therefore, pecuniarily preferable. 19. In this analysis, we find that the Appeal is wel! founded and is allowed. The impugned judgment is accordingly set aside. The disqualification of the Appellant-company on the ground of it having failed to submit its latest fncome Tax Return along with its bid is not sufficient reason for disregarding its offer/bid. The Respondents are directed, therefore, to proceed further in the matter on this predication. The parties shall bear their respective costs. ,. coNCLUS ON 10. Taking into consideration the above referred facts and circumstances of the case and also the contents of the letter dated 2t.08.2023 issued by the State Bank of India, Secunderabad (referred to and extracted above), and duly considering the averments made at para 10 of the counter affidavit filed by the respondents that technicat bid is not yet finalized as on date and duly taking into consideration the 8 view taken by the Apex Court in judgment dated 11.09.2013 reported in (2O13) 10 SCC page 95 in Rashmi Metaliks Limited and another v Kolkata Metropolitan Development Authority and others. the writ petition is disposed of directing the respondent Nos.2 and 3 to consider the representation of the petitioner dated 30.08.2023 addressed to tie respondent Authority clarifying Bid clarification with regard to BG Ref No.050-5523-bg-000- 2350 dated 04.08.2023 as effective from 12.O7.2023 to 30.04.2025 drawn from SBI, Commercial Branch, Secunderabad within a period of two weeks from the date of receipt of copy of the order in accordance to law, duly taking into consideration the view taken by the Apex Court in its judgment dated 11.09.2O13 reported in (2O13) 10 SCC page 95 in Rashmi Metaliks Limited and another v Kolkata Metropolitan Development Authority and others and duly understanding the fact that respondent Nos.2 and 3, should have sufficient reason for disregarding petitioner's bid which admittedly as borne on record does not exist in the present case, and pass appropriate reasoned order, duly communicating the decision to the petitioner. Until a decision is taken by respondent Nos.2 and 3, upon the representation dated 30.08.2023 of the petitioner within the time period 9 10 stipulated by this Court, the respondents are directed to maintain status quo with regard to the subject issue. It is also observed that if the respondent authorities need any clarification or any further documents, they are at liberty to issue notice to the petitioner and secure the same in deciding the subject issue. However, there shalt be no order as to Miscellaneous petitions, if any, Petition, shall stand closed. pending in this Writ costs. //TRUE COPY// SD/. T. JAYA REE ASSISTANT REGIS RAR SECTION OFF ER To,1 The General_!l^a1yrger, South Central Railway Rail Nilayam, Secunderabad I etangana- 500071 . , IF^^CItgigna.t. and Telecommunication Engineer, Signat and l:,^:-\":I1y1i9+ion Depa rtmenr,_South Cenrr? I Ra iiwa\"y Ri i r r.,t i ra ya m, becunoeraDao Ielangana_ 500071 . 9 9n. CC to SRt. J. V|SHN.UVARDHAN, Advocate [OpUC] 4 o1e CC to SRt. cADt PRAVEEw xurr,rAniov. s-6ilclroh GENERAL oF tNDtA) [OPUC] 5. Two CD Copies BM GJP Prn c., - HIGH COURT DATED:1011012023 ) a ( s 6 N0I 2t8 o g SI ATg ar -) ---:,,. i $F ORDER WP.No.25868 of 2023 DISPOSING OF THE WRIT PETITION WITHOUT COSTS 3il ?otc,, r. -1' "