SHREE SAI CARGO V. DIVISION RAILWAY MANAGER (COMMERCIAL)

SCA/866/2020

AI Insights

The case involves Shree Sai Cargo, a logistics and cargo services firm, which filed a petition under Article 226 of the Constitution of India seeking a stay on the e-tender process for leasing SLR space issued by the Divisional Railway Manager (Commercial), Western Railway, Ahmedabad. The petitioner, having participated in the e-tender process and being ranked as the highest bidder, apprehended disqualification due to a clerical error in uploading the correct registration certificate. The first respondent, however, maintained that the petitioner did not meet the eligibility criteria as the required registration certificate was not submitted, leading to the rejection of the bid. The court examined the arguments and evidence presented, including the adherence to the tender conditions and the implications of non-compliance.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 726174 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 19-02-2020
• Assessment Year: misc
• Other Referred Cases: Krishna Communication v. Gujarat State Road Transport Corporation, Rashmi Metaliks Ltd. and Others v. Kolkata Metropolitan Development Authority and Others, Poddar Steel Corporation v. Ganesh Engineering Works
• Laws Referred To: Article 226 of the Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SIRAJ GORI
• Assessee Lawyers: MANASVI THAPAR
• Keywords: Eligibility criteria; Registration certificate; Tender Rejection; E-tender process; Lease of SLR space
• Section: 16.13

Judgement Text

"C/SCA/866/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 866 of 2020 ====================================== SHREE SAI CARGO Versus DIVISION RAILWAY MANAGER (COMMERCIAL) ====================================== Appearance: MR MANASVI THAPAR for MR ADITYA P JHAWAR(11028) for the Petitioner(s) No. 1 MR AKSHAY A VAKIL(5473) for the Respondent(s) No. 4 MR FB BRAHMBHATT(1016) for the Respondent(s) No. 2 MR SIRAJ R GORI(2298) for the Respondent(s) No. 1 MR. MUKESH N SHAH(6259) for the Respondent(s) No. 2 MR.D H PANCHAL(6420) for the Respondent(s) No. 2 SUDHANSHU A JHA(8345) for the Respondent(s) No. 3 ====================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Date : 19/02/2020 ORAL ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. Mr. Siraj Gori, learned advocate for the first respondent has tendered an additional affidavit. The same is taken on record. 2. By this petition under article 226 of the Constitution of India, the petitioner seeks stay of the e-tender process pursuant to the e-tender notice/detailed notice inviting tender dated 15.10.2019 having reference No.C78/1/117/TENDER/ SLR/03/2019-20 issued by the first respondent – Divisional Railway Manager (Commercial), Western Railway, Ahmedabad Page 1 of 24 C/SCA/866/2020 ORDER for leasing of SLR space. 3. The facts, as appearing in the petition are that the petitioner is a proprietorship firm and is engaged in the business of logistics and cargo services for the past five years. The petitioner is engaged by various entities for logistics supplies and cargo services and is a regular contractor and insofar as the present respondent is concerned, the petitioner is a regular contractor for leasing SLR for cargo movement. 3.1 It is the case of the petitioner that it has been contracting with the railways for a long time and is a bona fide contractor for the first respondent. The petitioner was registered with the first respondent as a registered lease-holder of Ahmedabad Division since 19.03.2018. The first respondent put out an e- tender notice, as referred to hereinabove and bids came to be accepted. According to the petitioner, the system was off line for the past years and since this year only, online system was introduced. The petitioner was using the online system for the very first time for bidding the tender. The petitioner submitted its bid on 15.11.2019. The site of the respondent showed the top bids and ranked them accordingly, wherein the petitioner was shown to be the H-1 rank holder, which, in other terms, meant that the petitioner was a top bidder of the said Notice Inviting Tenders (NIT). 3.2 Apprehending the petitioner may have submitted a wrong document due to being naive regarding the usage of IREPS site and a clerical error on its part, whereby, it may have attached a wrong certificate of registration, the petitioner approached this court by way of the present petition, Page 2 of 24 C/SCA/866/2020 ORDER contending that due to the names of GST registration certificate and the railways registration certificate being similarly named in its system, the petitioner may have uploaded the GST registration certificate. However, such an issue had not been raised by the first respondent till the date of the filing of the petition. 3.3 It is further the case of the petitioner that it is a registered user and if it was not a registered user, it could not have submitted the said bid. The bid was to be finalised within forty five days in terms of the clause given in the Instructions for Tenderers. By a letter dated 26.12.2019, the first respondent called upon the petitioner to extend its offer up to 28.01.2020. It is the case of the petitioner that the first respondent has not yet awarded the e-tender or contract to any bidder and that the petitioner apprehends that it may lose the bid due to above-referred clerical error and hence, it has filed the present petition. 4. In response to the averments made in the memorandum of petition, the first respondent has filed an affidavit-in-reply stating that the first respondent has acted as per the norms set out for the purpose of finalizing the tender. That the subject e-tender was uploaded on IREPS (Indian Railway E- Procurement System) on 15.10.2019 at 15:24 hours vide E- tender No.C78-SLR-19-20-3-12957-F1. That the NIT referred to by the petitioner is actually the tender document and not the Notice Inviting Tender. It is further averred that the petitioner just got itself registered as lease-holder under category 'B' over Ahmedabad Division of Western Railways only and that, till date, no parcel lease contract has been awarded to the Page 3 of 24 C/SCA/866/2020 ORDER petitioner by the first respondent. 4.1 It is further stated that when the e-tender was introduced way back in the year 2018 and notice regarding, “Switching over on E-tender from Manual Tendering”, was given wide publicity through publishing the same in newspapers on 11.12.2018 and e-tender was invited by Ahmedabad Division on 02.01.2019. It is, accordingly, contended that there was adequate time available to the petitioner to get familiar with the so-called newly introduced online system. Moreover, other than being registered lease-holder, the bidders were also required to get themselves registered on IREPS portal before they can bid for any e-tender. It is further stated that this is not a single click process but takes at least three working days' time to get registered, wherein, a lease-holder is required to upload relevant documents as prescribed in IREPS. Only after getting registered on IREPS, the lease-holders can submit their respective e-bids. 4.2 It is further averred in the affidavit-in-reply that the bid documents submitted by the petitioner are not complete, and hence, its bid cannot be treated as valid and therefore, the petitioner cannot be termed or treated as the highest bidder. It is also stated that the tender was opened on 15.11.2019 at 15:42 hours as per the time captured by the IREPS system. That, after opening of e-tender, the IREPS system generates a financial tabulation statement for reference only, wherein, e- bids submitted by the lease-holders are inter se ranked only as per the value offered by the lease-holders/bidders. 4.3 It is further stated that while uploading the documents on Page 4 of 24 C/SCA/866/2020 ORDER IREPS for the subject e-tender, the petitioner uploaded its GST registration in three pages in the place of its registration certificate as lease-holder which is only a single page document. It is further stated that the petitioner has clearly named the file/documents as “shreesaicargogstcertificate” and uploaded the same in place of the registration certificate of lease-holder. 4.4 It is further averred that even if the petitioner had uploaded the wrong document by mistake, option to view the uploaded documents and to change the document, if needed, was available with the petitioner before submitting it’s e-bid. That, even if such mistake was noticed after submission of e- bid, prior to closing time (i.e. 15:00 hours), there was an option available on IREPS to the petitioner to revise the bid in terms of either rate offered, documents uploaded or both. Thus, ample options are available on the e-tender portal for the bidders to scrutinize their respective bids in all respect before closing time of the e-tender. 4.5 It is further averred that it is only after opening of e- tender and downloading/printing all the documents uploaded by the bidders, that the analysis of credentials of each bidder is done with due diligence as per the conditions and eligibility criteria laid down in the tender document and modified Comprehensive Parcel Leasing Policy (and its amendments) issued by the Railway Board and that, the analysis/finalisation of any tender is a confidential matter and any irregularity/shortcomings by any bidder, is not disclosed till finalisation of the tender case. Page 5 of 24 C/SCA/866/2020 ORDER 4.6 It is further averred that as per Instruction No. 2 to the Tenderers, contained in the tender document, the initial validity of e-bid is of forty five days (that is, up to 29.12.2019 in the subject case). If the tender is not finalised within forty five days, the tenderer will extend the validity for another thirty days. In this case, since the tender could not be finalised in forty five days, all the four bidders in the subject e-tender were asked to further extend the validity for another thirty days. 4.7 It is further averred that the subject e-tender has already been finalised in favour of the eligible H-1 tenderer – M/s. Shreeji Courier Service, that is, the respondent No. 2 herein on 10.01.2020 only as per the acceptance of Tender Committee recommendations by the accepting authority. It is stated that though the petitioner had offered higher rate of Rs.26,780/- per trip, but the eligibility criteria for becoming the successful H-1 bidder has not been fulfilled, and hence, the rate offered by the petitioner does not have any validity and sustainability in evaluation of the tender. 4.8 It is further averred that the eligible H-1 tenderer M/s. Shreeji Courier Service - the respondent No. 2 herein, has agreed to increase its offer of Rs.24,300/- per trip to Rs.24,800/- per trip, and hence, the railway administration will be getting enhanced revenue of Rs.9,55,800/- during the contractual period of five years. 4.9 By way of an additional affidavit filed on behalf of the first respondent, a copy of the minutes of the meeting held on 03.01.2020 of the Tender Committee has been placed on Page 6 of 24 C/SCA/866/2020 ORDER record. 5. The second respondent – Shreeji Courier Service has also filed an affidavit-in-reply inter alia stating that it has already started the work and required manpower and infrastructure has been arranged by it at Ahmedabad and Delhi as it has to work on this route. It is further stated that the first respondent has issued receipt in connection with the ten trips during the period 07.02.2020 to 16.02.2020, and thus, it has already commenced the work. 6. Mr. Manasvi Thapar, learned advocate for Mr. Aditya Jhawar, learned advocate for the petitioner, submitted that the petitioner holds registration as a lease holder of Ahmedabad Division and the respondent authorities are well aware of the same. It was submitted that on account of a clerical error in uploading the tender, instead of the petitioner’s registration certificate as lease holder with the first respondent, the petitioner’s GST certificate was uploaded. It was submitted that when the petitioner was admittedly registered with the first respondent authority since 19.03.2018; and since it is the first respondent who has granted him the certificate, the submission of the certificate was merely an ancillary requirement and was not an essential condition of the tender so as to entail disqualification from the tender process. Therefore, non-submission of such document does not change the colour of the petitioner's bid. 6.1 Referring to the list of bidders and the details of their bids, it was pointed out that the petitioner is by far the highest bidder and there is a considerable difference between the Page 7 of 24 C/SCA/866/2020 ORDER amount quoted by it and by the second highest bidder. It was submitted that, therefore, if the petitioner's bid is accepted by the respondent authorities, the railways would stand to gain considerably. It was emphatically argued that the petitioner was never informed that it was disqualified and on the contrary, was asked to extend the validity period of his bid and, therefore, the respondent ought to have invited the petitioner for negotiations. It was, accordingly, urged that non- acceptance of the petitioner's tender on the ground of non- submitting the registration certificate, which is only an ancillary condition, is not justified and that, the petition deserves to be allowed by granting the reliefs as prayed for in the petition. 6.2 In support of his submissions, the learned advocate has placed reliance upon the decision of this court in Krishna Communication v. Gujarat State Road Transport Corporation and Others, (2006) 3 GLR 1831, wherein, it has been held thus: “16. In view of the above discussion and in view of the principles laid down by the Apex Court holding that the object of a public authority in such cases should be to fetch the maximum price subject to any other rational considerations, the following directions are issued:- (a) The respondent-company shall take a decision in the matter either after calling all the eligible parties who had submitted their tenders in response to the notice dated 23.1.2006 for inter-se re-bidding on the same date, at the same time and at the same place in presence of all eligible parties, who choose to remain present at such inter-se bidding and thereafter to take a fresh decision in the matter, or in the alternative to invite fresh tenders after indicating in the tender notice the upset price and the procedure that they propose to follow including the aspect whether only H1 party will be called for Page 8 of 24 C/SCA/866/2020 ORDER negotiations. (b) The petitioner being the existing contractor shall pay the price for the period from 15.12.2005 till the date the new contract is awarded in accordance with the directions, at the rate at which the new contract will be awarded or the current rate, whichever is higher.” 6.3 It was submitted that, therefore, the first respondent ought to have considered the fact that the petitioner's bid was the highest and that the first respondent would profit considerably if the tender is awarded to the petitioner, and hence, should have invited the petitioner for negotiations. 6.4 Reliance was also placed upon the decision of the Supreme Court in Rashmi Metaliks Ltd. and Others v. Kolkata Metropolitan Development Authority and Others, (2013) 10 SCC 95, wherein, the court held thus: “17. So far as Clause (j) of the detailed notice inviting E- tender No.01/KMDA/MAT/CE/2013-2014 dated 10-5-2013 emanating from the office of the Chief Engineer is concerned, it seems to us that contrary to the conclusion in the impugned judgment, the clause is not an essential element of ingredient or concomitant of the subject NIT. In the course of hearing, the income tax return has been filed by the appellant Company and scrutinised by us. For Assessment Year 2011-2012, the gross income of the appellant Company was Rs.15,34,05,627, although, for the succeeding Assessment Year 2012-2013, the income tax was nil, but substantial tax had been deposited. 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 stipulation, 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 Page 9 of 24 C/SCA/866/2020 ORDER accordingly the Tendering Authority ought to have brought this discrepancy to the notice of the appellant Company and if even 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 other, and, therefore, pecuniarily preferable.” 6.5 Reliance was also placed upon the decision of the Supreme Court in Poddar Steel Corporation v. Ganesh Engineering Works, (1991) 3 SCC 273, wherein, it has been held thus: “6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank clause No. 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be. open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in G. J. Fernandez v. State of Karnataka, [1990] 1 SCR 229, a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, but has failed to appreciate that the reported case belonged to the first category where the strict Page 10 of 24 C/SCA/866/2020 ORDER compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses the present case belongs. 7. The nature of payment by a certified cheque was considered by this Court in Sita Ram Jhunjhunwala v. Bombay Bullion Association Ltd., AIR 1965 SC 1628. Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision (vide Spargo case, 28 LT 153) that it is a general rule of law that in every case where a transaction resolves itself into paying money by A to B and then handing it back again by B to A, if the parties meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards. This court applied the observations to a transaction requiring payment by one to another. The High Court's decisions in B. D. Yadav's case, AIR 1984 Bom 351 and T V. Subhadra Amma's case, AIR 1982 Ker 81, are also illustrations where literal compliance of every term of the tender notice was not insisted upon. 8. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank. In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6, specially when it was in its interest not to reject the said bid which was the highest. We, therefore, set aside the impugned judgment and dismiss the writ petition of the respondent No. 1 filed Page 11 of 24 C/SCA/866/2020 ORDER before the High Court. The appeal is accordingly allowed with costs throughout.” 6.6 It was submitted that submission of registration certificate as lease holder, being only an ancillary condition, it was permissible for the first respondent to waive such requirement, and that the petitioner being the highest bidder; it was in the interest of the first respondent to award the tender in favour of the petitioner. It was accordingly, urged that the petition requires consideration. 7. Opposing the petition, Mr. Siraj Gori, learned advocate for the first respondent, invited the attention of the court to Condition 6 of the Instructions to Tenderers, which forms part of the tender document, to point out that the same clearly provides that in case of failure to submit the certificate of registration, tender shall be rejected out-rightly. Reference was also made to paragraph 16.13 of the Comprehensive Parcel Leasing Policy, to submit that the same mandates that every tenderer, while submitting the tender bid, shall be required to produce the proof of his registration as a lease- holder with the division/zonal railway head-quarter concerned by attaching a photocopy of his registration certificate. It was submitted that submission of certificate of registration is an essential condition of the tender and not an ancillary condition as is sought to be contended on behalf of the petitioner and that the petitioner not having satisfied the eligibility criteria, has, therefore, rightly been disqualified. 7.1 Next, it was submitted that the petition suffers from the vice of misrepresentation and suppression of material facts. The attention of the court was invited to the averments made Page 12 of 24 C/SCA/866/2020 ORDER in paragraph 7 of the memorandum of petition, wherein it has been stated that the system was off line for the past years and since this year only, online system was introduced, the petitioner was using the online system for the very first time for bidding the tender. Reference was made to the contents of paragraph 22 of the affidavit-in-reply filed on behalf of the first respondent, wherein it has been stated that the petitioner has apparently not only suppressed the material fact, but has also resorted to falsehood by making incorrect statement on oath about his lack of experience with respect to e-tender process. It is stated that the petitioner has participated in the e-tender process on a number of occasions and as such, the petitioner is registered with the Delhi Division since long, where he has submitted his bid by e-tender process on many occasions. Relevant details have been submitted by way of Annexure 'X' to the affidavit-in-reply. 7.2 The learned advocate placed reliance upon the decision of the Supreme Court in Central Coalfields Ltd. and Others v. SLL-SML (Joint Venture Consortium) and Others, (2016) 8 SCC 622, wherein, it has been held thus: “4. The question for our consideration is generally whether furnishing a bank guarantee in the format prescribed in the bid documents is an essential requirement in the bidding process of the Central Coalfields Limited and specifically whether a bid not accompanied by a bank guarantee in the format prescribed in the bid document of the Central Coalfields Limited could be treated as non-responsive in view of Clause 15.2 of the General Terms and Conditions governing the bidding process. The answer to the general and the specific question is in the affirmative.” “27. What is extraordinary about this case is that the employer, that is, CCL, seeks to adhere to the terms of Page 13 of 24 C/SCA/866/2020 ORDER NIT and the GTC issued by it, but the submission of JVC is that CCL should actually deviate from the terms of these documents so as to benefit JVC. Indeed, in spite of a specific requirement that the bank guarantee should be submitted in the prescribed format, JVC claims an entitlement to a deviation in this regard on the ground that the prescribed format was a non-essential term of NIT and the GTC. Who is to be entered into by the successful bidder have no say in the matter? Better adverting to this, it is necessary to get clarity on some circumstances.” “37. For JVC to say that its bank guarantee was in terms stricter than the prescribed format is neither here nor there. It is not for the employer or this Court to scrutinize every bank guarantee to determine whether it is stricter than the prescribed format or less rigorous. That fact is that a format was prescribed and there was no reason not to adhere to it. The goalposts cannot be re- arranged or asked to be re-arranged during the bidding process to affect the right of some or deny a privilege to some. 38. In G.J. Fernandez v. State of Karnataka, (1990) 2 SCC 488, both the principles laid down in Ramana Dayaram Shetty, (1979) 3 SCC 489, were reaffirmed. It was reaffirmed that the party issuing the tender (the employer) “has the right to punctiliously and rigidly” enforce the terms of the tender. If a party approaches a court for an order restraining the employer from strict enforcement of the terms of the tender, the court would decline to do so. It was also reaffirmed that the employer could deviate from the terms and conditions of the tender if the “changes affected all intending applicants alike and were not objectionable”. Therefore, deviation from the terms and conditions is permissible so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination in Ramana Dayaram Shetty sense.” “47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty the terms of NIT cannot be ignored as being redundant or Page 14 of 24 C/SCA/866/2020 ORDER superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision “that no responsible authority acting reasonably and in accordance with relevant law could have reached” as held in Jagdish Mandal followed in Michigan Rubber. 48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot. 49. Again, looked at from the point of view of the employer if the courts take over the decision-making function of the employer and make a distinction between essential and non-essential terms contrary to the intention of the employer and thereby rewrite the arrangement, it could lead to all sorts of problems including the one that we are grappling with. For example, the GTC that we are concerned with specifically states in Clause 15.2 that “Any bid not accompanied by an acceptable Bid Security/EMD shall be rejected by the employer as non-responsive”. Surely, CCL ex facie intended this term to be mandatory, yet the High Court held that the bank guarantee in a format not prescribed by it ought to be accepted since that requirement was a non-essential term of the GTC. From the point of view of CCL, the GTC has been impermissibly rewritten by the High Court.” Page 15 of 24 C/SCA/866/2020 ORDER 7.3 Reliance was also placed upon the decision of the Supreme Court in Vidarbha Irrigation Development Corporation v. M/s. Anoj Kumar Agarwala, 2019 (2) SCALE 134, wherein, it has been held thus: “15. Similarly in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548, this Court held as under: “(i) if there are essential conditions the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same she not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had In fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with; 14) However, learned counsel appearing on behalf of Page 16 of 24 C/SCA/866/2020 ORDER the appellant strongly relied upon Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, and paragraphs 14 and 15 in particular, which state: “14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport of India, (1979) 3 SCC 489, was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous they must be given meaning and their necessary significance. In this context, the use of the word “metro” in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked. 15. 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.” 15) It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court.” Page 17 of 24 C/SCA/866/2020 ORDER 7.4 Mr. Gori, accordingly, urged that the condition for furnishing a registration certificate is an essential requirement in the bid process and on account of non-submission thereof, the first respondent was justified in treating the tender of the petitioner as non-responsive. It was, accordingly, urged that the petition being devoid of merits, deserves to be dismissed and that, the petitioner by making misrepresentation and suppressing material facts, has disentitled itself from carrying a writ of this court under article 226 of the Constitution of India. 8. This Court has also heard Mr. F. B. Brahmbhatt, learned advocate for the respondent No. 2, Mr. Sudhanshu Jha, learned advocate for the respondent No. 3 and Mr. Akshay Vakil, learned advocate for the respondent No. 4. 9. Before adverting to the merits of the rival contentions, reference may be made to the relevant tender conditions. Paragraph 5 of the “Instructions to the Tenderers Regarding Tender Forms Downloaded / Viewed from IREPS Portal” reads thus: “5. Tenderers are advised to download tender documents well in advance and submit the tender before the stipulated time. It is the responsibility of the tenderer to check any correction or any modifications published subsequently in website and the same shall be taken into account while submitting the tender. Tenderer shall download corrigendum (if any), Print it out, sign and attach it with the main tender document. Bids not accompanied by published Tender Document, Corrigendum(s) will be summarily rejected. The Railway will not be responsible for any postal delays / delay in downloading of tender document from the internet.” Page 18 of 24 C/SCA/866/2020 ORDER 9.1 Paragraph 6 of the “Instructions to the Tenderers” reads thus: “6. In addition to earnest money & Tender form Fee, the tenderer will be required to submit proof of Registration with Ahmedabad Division i.e. Certificate of Registration. In case of failure to submit the Certificate of Registration, tender shall be rejected out-rightly. Moreover, Tenderer shall be required to furnish the audited balance sheet with profit & loss account for the financial year 2018-19, along with Tender Documents, having annual turnover Rs. 2 Crore for category 'A', Rs. 50 lakh for category 'B', respectively, failing which, tender shall be rejected.” 9.2 Paragraph 14 and 15 of the Instructions to Tenderers contain the “Eligibility” criteria, and read as under: “Eligibility: 14. Any person or Cargo operator or transporter having Indian citizenship, or any agency or company registered in India is eligible to participate in leasing tenders. But, the applicant must be a Registered lease holder of Ahmedabad Division. Each applicant / participant while submitting his tender bid, shall be required to produce proof of his registration as a lease holder by attaching a self attested photo copy of his registration certificate. The Tenderer shall also be required to furnish the audited balance sheet with profit & loss statement of the financial year 2018-19, having annual turnover of Rs.2 Crore for category 'A', Rs.50 lakh for category 'B'. The Tenderers shall submit a 'Notarized Affidavit' on non- judicial stamp paper for each compartment separately, stating that they are not liable to be disqualified and all their statements / documents submitted along with the bid are true and factual. Standard format of affidavit to be submitted by the bidder is available on IREPS. Non-submission of affidavit by the bidder shall result in summary rejection of his / her / their bid(s). The original affidavit should be Page 19 of 24 C/SCA/866/2020 ORDER submitted in this officer within seven (07) working days from the date of opening of tender. 15. The scheme for leasing of parcel space is not applicable from / to city booking agency to out agency.” 9.3 Thus, in terms of eligibility criteria prescribed in the tender document, the applicant is required to be a registered lease-holder of Ahmedabad Division, and furthermore, while submitting his tender bid, he is required to produce the proof of his registration as lease-holder by attaching a self-attested photocopy of his registration certificate. In terms of paragraph 6 of the Instructions to Tenderers regarding Tender Forms Downloaded/ Viewed from IREPS Portal, the tenderer is required to submit proof of registration with Ahmedabad Division, that is, certificate of registration, and in case of failure to submit the certificate of registration, the tender is liable to be rejected outright. 9.4 The Comprehensive Parcel Leasing Policy also provides vide clause 16.13 thereof that each tenderer, while submitting his tender, shall be required to produce proof of his registration as a lease holder with the division / zonal railway headquarters concerned by attaching a photocopy of the registration certificate. 9.5 Thus, registration as a lease-holder with the zonal division is an eligibility condition. If such a requirement is not satisfied, a person is not eligible to participate in the tender process. Submission of a copy of the registration certificate is proof of such registration, in absence whereof, it cannot be ascertained whether or not the person concerned is registered, which directly affects his eligibility. In the opinion of this court, Page 20 of 24 C/SCA/866/2020 ORDER the condition for furnishing a copy of the registration certificate is, therefore, an essential condition and not an ancillary condition, because, in the absence of such certificate, the basic requirement to be eligible to participate in the tender process would not stand satisfied. 9.6 On behalf of the petitioner, it has been contended that having been registered with the first respondent, it is within the knowledge of the said respondent, and hence, the condition for submission of registration is not the essential condition but an ancillary condition. This court is of the view that the mere fact that the petitioner is registered with the first respondent is no reason to believe that it is within the knowledge of the concerned authorities. Had it been so, there would have been no need to submit such certificate, as to be eligible to participate in the tender process a person has to be registered with the concerned division. It is not part of the function of the authority inviting tenders to verify its record at the time of scrutinizing the tenders to ascertain as to whether or not a party is registered, if such a party fails to submit the registration certificate. 9.7 As noticed herein above, at several places in the tender document, it has been stated that a copy of the registration certificate has to be produced along with the tender document and it is also categorically stated that in the absence of such certificate, the tender shall be rejected. Under the circumstances, the tenderers are required to read the conditions properly and ensure that they duly comply with the conditions set out therein. The submission that it was a mere clerical error does not hold good, when such error relates to an Page 21 of 24 C/SCA/866/2020 ORDER essential condition of the contract. In the aforesaid premises, no infirmity can be found in the action of the first respondent in not considering the bid of the petitioner. 9.8 While, it is true that the petitioner's bid is by far, the highest and the second highest bidder even after negotiations has not matched its bid, nonetheless, since the petitioner did not satisfy the essential condition of the contract, it was not permissible for the first respondent to consider its bid. Since a basic eligibility criteria was not satisfied in the present case, the first respondent could not have invited the petitioner for negotiations and hence, the contention that the petitioner ought to have been invited for negotiations, must necessarily fail. 9.9 The authorities on which reliance has been placed on behalf of the petitioner may now be dealt with. The decision of this court in Krishna Communication v. Gujarat State Road Transport Corporation and Others (supra) does not assist the petitioner in any manner, inasmuch as, in the facts of the said case, the court only considered the principles laid down by the apex court holding that the object of a public authority should be to fetch the maximum price subject to any other rational considerations. In the present case, for the purpose of considering the bid, it was necessary for the petitioner to comply with the eligibility criteria. In the absence of submission of certificate of registration, since the petitioner did not satisfy the eligibility criteria and hence, the question of considering its bid, did not arise. 9.10 Insofar as, the decision of the Supreme Court in Rashmi Page 22 of 24 C/SCA/866/2020 ORDER Metaliks Ltd. v. Kolkata Metropolitan Development Authority (supra) is concerned, the bid of the appellant company had been rejected. The court, after considering the relevant clause of the contract, found that the clause was not an essential element or ingredient or concomitant of the subject NIT. The court further held that 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. It was held that, in many cases, this is a salutary stipulation, since it is indicative of the commercial standing and reliability of the tendering entity. Such feature being absent in the said case, it was thought that filing of the latest income tax return was a collateral term. In the present case, as discussed herein above, submission of registration certificate was essential as it was strictly related to the eligibility criteria. The above decision therefore, does not in any manner support the case of the petitioner. 9.11 In Poddar Steel Corporation v. Ganesh Engineering Works (supra), the Supreme Court held that the requirement in a tender notice can be classified into two categories – those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case, the authority issuing the tender may be required to enforce them rigidly. In the other cases, it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. In the present case, this court after considering the relevant clauses of the tender document has found that the submission of registration certificate is an essential condition, under the circumstances, Page 23 of 24 C/SCA/866/2020 ORDER the above decision also does not come to the rescue of the petitioner. 10. Another aspect of the matter is that the petitioner, in paragraph 7 of the petition, has averred that the petitioner was using the online system for the very first time for bidding the tender; however, the respondent has responded to such averments in paragraph 22 of the affidavit-in-reply, wherein it has been stated that the petitioner had participated in the online tender process on many occasions, together with proof thereof. Thus, it appears that the statement made in the petition is incorrect. Be that as it may. 11. In the light of the above discussion, no case is made out for grant of reliefs prayed for in the petition. The petition, therefore, fails and is accordingly, dismissed. Notice is discharged with no order as to costs. The interim relief granted earlier shall stand vacated. [ Harsha Devani, J. ] [ Sangeeta K. Vishen, J. ] hiren Page 24 of 24 "