JUDGMENT
S.B. Sinha, C.J.
1. The petitioner is a company registered under the Indian Companies
Act. It carries on business of supplying medical equipments.
2. A notice inviting tender was issued for supplying installation,
testing, commissioning and handing over of medical manifold systems and
associated work at Institute Rotary Cancer Hospital, All India Institute of Medical
Sciences.
3. The petitioner is the sole authorised distributor for sale and
services of Hill Rom products for northern India covering States of New Delhi,
Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Punjab, Haryana and
Rajasthan.
4. The first respondent herein is a Government of India Undertaking
and works as a Consultant and Architect for mega hospitals and laboratories. The
second respondent is Institute of Rotary Cancer Hospital at AIIMS and the third
respondent – AIIMS is the parent body under whose aegis and in whose premises
the respondent No. 2 exists. The first respondent herein had issued afore-mentioned notice inviting tender.
5. According to the petitioner, it had successfully commissioned the
following projects:
Name
of the contract
Nature
of contract
Value
Escort Heart Institute New Delhi
Supply, installation testing,
commissioning of Central Medical Gas Pipeline System with Hill Rom and indigenous make
176
lacs.
Deen Dayal Upadhyay Hospital,
Delhi
Supply, installation testing,
commissioning of Central Medical Gas Pipeline System with Hill Rom and indigenous make
107
lacs.
Sanjay Gandhi Memorial
Hospital, Rewa, M.P.
Supply, installation testing,
commissioning of Central Medical Gas Pipeline System with Hill Rom and indigenous make
79
lacs.
Delhi Government Trauma
Centre, Metcalf Road
Supply, installation testing,
commissioning of Central Medical Gas Pipeline System with Hill Rom and indigenous make
43
lacs.
Indira Gandhi Medical College, Shimla
Supply, installation testing,
commissioning of Central Medical Gas Pipeline System with Hill Rom and indigenous make
58
lacs.
G.T.B. Hospital, Delhi
Supply, installation testing,
commissioning of Central Medical Gas Pipeline System with Hill Rom and indigenous make
46
lacs.
6. It allegedly had executed or has been executing 75 projects. It had
allegedly been awarded similar contracts by Sir Ganga Ram Hospital and Dr. B.L.
Kapoor Memorial Hospital, Pusa Road, New Delhi.
7. The first respondent invited pre-qualification documents for
participating in the tender for the afore-mentioned purposes on 1st March 2002.
8. The pre-qualification documents, consequent upon the notice
inviting tender issued by the first respondent herein were purchased by seven
parties up to 18th March 2002. A Tender Committee for the said matter was
constituted on 22nd March 2002. The petitioner along with others submitted its
application which was scrutinized. Two parties were allegedly held to be entitled
to be pre-qualified on 26th July 2002 for issue of tender documents. The tender
documents in terms of the recommendations by the Tender Scrutiny Committee
were given on 9th July 2002 which were purchased by them on 10th July 2002 and
on 31st July 2002.
9. The first respondent disqualified the petitioner and opened the
techno-commercial bid and price bid as also made recommendations. The
petitioner was disqualified, inter alia, on the ground that it failed to comply with
paras 3.2(a) and 3.2(b) of the Conditions of Tender. The relevant terms and
conditions of the tender are:
“3.2. The Applicant shall meet the following
minimum criteria:
(a) Minimum average Annual turnover during
last three financial years i.e. financial years
i.e. 1998-99, 1999-2000, 2000-2001 for the
works completed during the financial years
should not be less than Rs. 425.00 lakhs. (Fill
enclosed Annexure-1).
(b) The firm must have successfully completed
at least one order of similar nature during
the last five financial years involving
oxygen gas manifold, nitrous oxide gas
manifold system, gas terminal units, area
alarm system etc. on turnkey basis of value
not less than Rs. 128.00 lakhs (Copy of the
order and completion certificate to be
submitted). The date of completion to fall in
last five financial years. The performance
statement giving details of similar works
executed during the last five years by the
firm shall be submitted along with copies of
orders/completion certificates. (Fill enclosed
Annexure- II and enclose copies of order
and completion certificates).
(c) The firm must be manufacturer or
authorized representative of manufacturer of
equipments like gas terminal outlets, area
alarm system, multimovement pendants,
fully automatic changeover control panel
etc. conforming to International Standards /
Specifications which should conform to
CSA (Canada) /HTM-2022 (UK) /NFPA-99
(USA) / DIN (German) standards. Bids
submitted by firms not meeting this
requirement will not be considered.
manufacturer authorization letter to be
enclosed in case the bidder is an authorized
representative.
3.5(b) A certificate from the firm’s bankers should
be submitted that minimum equivalent to
about four months (average) requirement of
funds can be managed by bidder in case
funds get delayed by employer.
Where necessary, the Consultant (HSCC) on
behalf of Employer will make inquiries with
the Applicant’s bankers. (Fill enclosed
Annexure-V).
3.7. The firm should have at least 5 years
experience in the installation of medical gas
pipe line system in India and should provide
list of hospitals along with year of
installation.”
10. According to the petitioner, for the years 1998-99, 1999-2000 and
2000-2001, its annual turnover was an under:
“Application Form No.
3
Annexure-1
Annual Turnover
S. No.
Year
Annual Turnover in Indian
Rupees (or equivalent to Indian rupees) as per audited balance sheet or CA Certificate
1.
1998-1999
Rs. 3,34,97,143.91
2.
1999-2000
Rs. 3,16,57,580.35
3.
2000-2001
Rs. 6,60,74,944.58
Average Annual Turnover: Over the
past three years two
Rs. 4,37,43,222.95 (Rupees Four crore thirty seven
lac forty three thousand hundred twenty two &
paise ninety five only)
Enclosed:
CA Certificate ITC Certificate
11. The Chartered Accountant of the petitioner had also issued a
certificate which is to the following effect:
“TO WHOM SO EVER IT MAY CONCERN
This is to certify that M/s. PES Installations
Pvt. Ltd. 16, Paschim Vihar Extension, New Delhi
had achieved a following under-mentioned turnover
for three preceding financial years.
Financial Year
Total Turnover (Rs. )
1998-1999
Turnover in Indian Rs.
2,17,66,563.91
Turnover in foreign exchange through direct importation by the client amounting US $ 116110 converted to Rs. @ 43/- Appx.
49,92,730.00
GBP 97650 converted to Rs. @ 69/-Appx.
67,37,850.00
3,34,97,143.91p
1999-2000
Turnover in Indian Rs.
1,56,44,956.35
Turnover in foreign exchange through direct importation by the clientamounting US $ 212536 converted to Rs. @ 45/- Appx.
95,64,120.00
GBP 3200 converted to Rs. @ 70/-Appx.
2,24,000.00
Frank 957616 concerted to Rs. @ 6.50 Appx.
62,24,504.00
3,16,57,580.35
2000-2001
Turnover in Indian Rs.
2,42,24.000.58
Turnover In Foreign through direct importation by the client amounting US $ 702660 converted to Rs. @ 47/-Appx.
3,30,25,020.00
GBP 129793 converted to Rs. @ 68 Appx.
88,25,924.00
6,60,74,944.58
The above mentioned figures have been
verified by us from the audited balance sheets for
the three years, bills of entry & other relevant
documents/vouchers.
For Sehgal Arun & Associates
Chartered Accountants
Sd/-
Arun Sehgal
Partner
Membership No. 91547″
12. The petitioner, therefore, contends that it had fulfillled the requisite
eligibility criteria.
13. However, as regards non-fulfilment of the condition 3.2(b) vis-a-vis
the project undertaken by the petitioner under the Escorts Hospital, it was
averred by the respondents:
“It is submitted that the petitioner is trying
to mislead this Hon’ble Court. The value of Rs. 176
lacs claimed by petitioner for Escorts Hospital was
the project as executed by Hill Rom which is a
totally different and independent legal entity and
company of which the petitioner is only an agent on
a commission basis. The work order dated 5.8.2000
was placed on Hill Rom. In the para under reply,
the petitioner has itself stated that the contract was
performed with Hill Rom and indigenous make. In
order to qualify for the pre-qualification state, the
applicant / tenderer “must have executed and
successfully completed at least one order of similar
nature during the last 5 financial years on turnkey
basis of value not less than Rs. 128 lacs.” Copy of
the order and completion certificate to be supplied.
Without prejudice to the fact that the petitioner has
not executed the contract themselves on turnkey
basis nor the work order has placed on the petitioner
for the Escorts contract.”
14. The contention of the petitioner, however, is that there was no
occasion for the respondents not to take into consideration the value of the import
as in the details of the works of similar nature in complexity. It was stated:
S. No.
Name of the Contract
Name of the Client
Brief description of the contract
Date of starting
Date of completion as per contract
Date of actual completion
Value(in Rs. Lac.)
….
….
….
….
….
….
….
….
2.
Escorts Heart Institute, New Delhi.
Escorts Hearts Institute, New Delhi
Supply, installation, testing & commissioning of Central Medical Gas Pipelines System & Ceiling Pendants, Bed Head Trunking System, Bed Head Panels etc. of Hill-Rom & indigenous make.
31.05.2000
30.01. 2001
25.02.2001
176 lac.
15. According to the petitioner as the contract was a turn-key project
wherefor not only the civil works but also the equipments which were imported
were to be installed, it had fulfillled the criteria of completion of the job of Rs. 128
lakhs. In support of the said contention, our attention has also been drawn to a
letter dated 31st March 2000 issued by the Escorts Heart Institute and Research
Centre in relation to the civil works, which is to the following effect:
“This is with reference to the Tenders for the
subject systems submitted by you in response to our
Consultant’s Notice Inviting Tenders and final
negotiations held with the undersigned.
In this connection, we are pleased to issue
you this letter of Intent for the Medical Gases
Manifold Room & Piping Work as per the
following major terms and conditions:
1. Scope of work
The total cost of the project for the
Tendered items, all inclusive shall be Rs. 53,12,820
(Rupees fifty three Lacs twelve thousand, eight
hundred & twenty only) as per the break up given in
the Annexure. Your contract shall cover all the
built-up areas of the New Building (all phases)
under construction & connections to our existing
hospital. We have informed you that in our new
multi-storeyed structure we are keeping provision
for four more storeys. In case we get sanction for
these extra four floors during the tenure of our
contract with you, then the extra four floors shall
have to be completed with the provisions of this
contract and an extension of four months time shall
be given.
The quantities given are indicative only.
There can be changes in the quantities, at any stage
of the project. Also you have negotiated the prices
of imported & indigenous versions of various items
and we shall have the option to choose either
version.
Also since we are contemplating
procurement of bed head equipment, which shall
have outlet points, as part of the equipment, these
shall get reduced.
16. It is stated that scope of the said work was required to be
considered along with the order placed by the said Institute to M/s Hill Rom
Company Inc., USA dated 5th August 2000 in terms whereof all the goods were to
be supplied only through the petitioner. The said letter reads thus:
“Subject: Supply of (a) Medical Gas Pipeline
System Along with its accessories
O.T. Unit and Wards.
Supply of (b) Critical Care beds,
Stretcher Along with Frames and
Accessories.
Reference: Your Proforma No. HR/IND/PES/10119
date 28-07-2000.
Dear Sir,
1. Please supply through M/s. PES Installation
Pvt. Ltd., New Delhi the items as per your proforma
No. HR/IND/PES/10119 date 28-07-2000 for US $
517,913-00 (cif) Stated above, copy of which is
enclosed herewith at Appendix “A’ to this supply
order.
2. Terms & Conditions applicable to this supply
order and contained at Appendix “B” along with
annexure-1.
3. Three copies of this order are furnished to
you. Two copies are retained by you. The third
copy be returned to this Institute duly stamped and
signed by your authorized signatory as well as of
M/s. PES Installation Pvt. Ltd., New Delhi which
shall signify that you and your agents in India have;
– Acknowledged & accepted the above order;
– Accepted the terms & conditions stipulated
at Appendix “B” and
– You shall execute the above supply order
accordingly.”
17. The petitioner further contends that in any event, as the said
institute has granted a certificate in its favor on 9th March 2002 to the following
effect, the same should have been considered to be conclusive in nature.
“TO WHOMSOEVER IT MAY CONCERN
We hereby certify that M/s. PES
Installations Pvt. Ltd., having their offices at 16,
Paschim Vihar Extension, Rohtak Road, New
Delhi-110063 has executed the total project of
Medical Gases Pipeline Distribution System for
Oxygen, Nitrous Oxide, Comb. Air (4 kg. & 7 kg.),
Vacuum, AGSS, including Alarms, Valves Boxes,
Head Wall Panels, Ceiling Pendants, Oxygen Flow-meters,
Ward Vacuum Units, Theatre Vacuum
Units, Speciality Beds, Stretcher, Over Bed Tables,
Nurse Call System. The total value of Project is
Rs. 4,00,000/- (Rupees four crore only) towards
indigenous and imported components. The system
is functional for the last more than a year and
working satisfactorily.”
18. Our attention has further been drawn to an authorization certificate
issued by Hill Rom Company dated 20th July 2001 which is to the following
effect:
“TO WHOSOEVER IT MAY CONCERN
July 20, 2001
Subject: General Authority letter
This is confirm that M/s. PES Installation
Pvt. Ltd. with their offices at 16, Paschim Vihar
Extension, Rohtak Road, New Delhi is our
authorized distributor for the sales and services of
Hill-Rom® products for the territory of North India
covering the states of New Delhi, Madhya Pradesh,
Uttar Pradesh, Himachal Pradesh, Punjab, Jammu &
Kashmir, Haryana & Rajasthan.
PES Installation is also authorized to sign
and quote on our behalf from time to time for the
purpose of promoting our sales. PES Installation
Pvt. Ltd. has satisfactory after sales service facilities
to back up the servicing with essential spare parts.
This certificate is valid up to 31 July 2002
and shall be renewed on a yearly basis with mutual
consent there after.”
19. The petitioner, therefore, contends that there is no reason as to why
the export component of the contract shall not be taken into consideration for the
afore-mentioned purposes.
20. Certificate of Escorts alone, according to Mr. Rajiv Nayar, learned
senior counsel appearing on behalf of the petitioner, would be conclusive in such
matters. The learned counsel would further contend that the action on the part of
the first respondent was mala fide. It was submitted that the first respondent on
31st July 2002 could not have rejected the bid of the petitioner, opened a techno-commercial bid, financial bid as also made recommendations. In this connection,
our attention has been drawn to the documents comprising Clause 15.3 of the
instructions which is to the following effect:
“15.3 Price Bid of bidders whose offers
(Technocommercial bid) are found technically and
commercially substantially responsive to the Bid
Documents will only be opened on a date of to be
intimated later to these bidders.”
21. It had further been submitted that the bids were required to be
submitted in three different envelopes, as would appear from the following:
“12. Submission of Bids
12.1 Sealing and Marking of Bids:
The Bidders shall seal the Bid (being a
separate bid for each group) in two envelopes duly
marking the envelopes, separately as
Technocommercial Bid (unpriced) and Price Bid
and both these envelopes to be enclosed in another
sealed envelope.
12.2. The inner and outer envelopes shall be:
(a) Addressal to General Manager,
Hospital Services Plot No. E-6(A),
Sector-1, Noida-201 301.
(b) Shall bear (the project name), the
Press Tender Notice Reference, and
the words “DO NOT OPEN
BEFORE_____.
12.3. All the envelopes shall indicate the name
and address of the Bidder.
12.4. If the envelopes are not sealed and marked
as required in Para 12.2, the Purchaser will assume
no responsibility for the Bid’s misplacement or
premature opening.”
22. Even in its letter dated 5th March 1999, the first respondent had
intimated:
“Only the Techno-Commercial bid shall be
opened in the presence of participating Bidders on
dates mentioned above at 14.00 hrs. Based on
Techno-Commercial evaluation, the Price Bid of
such of those bidders, who are found technically
and commercially eligible are only to be opened at a
date to be intimated to them.”
23. It was contended that having regard to the requirements aforementioned,
both the bids could not have been opened in the same day. The idea,
according to the learned counsel, would further be evident from the fact that after
opening the techno-commercial bid, it is necessary to scrutinize the documents
filed by the parties at great length and thus it was not possible for the said
Committee to scrutinize the bid documents.
24. According to the petitioner, in its reply it had shown that it fulfills
all the requisite criteria. Our attention in this connection has also been drawn to a
letter of the office of the Medical Superintendent in Deen Dayal Upadhayaya
Hospital which is to the following effect:
“Subject: Installation of Central Gas Pipe Line
System in DDU Hospital.
Sir,
Following the sanction of finance
department, Govt. of NCT of Delhi, this hospital
has awarded you the contract for installation of
Central Gas Pipe Line System in DDU Hospital on
terms & conditions already mutually agreed upon.
However, no escalation in cost is being allowed by
the finance department, Govt. of NCT of Delhi.
Therefore, you have to work on the rates
already approved by the hospital (copy of the rates
and material required is enclosed). Kindly, confirm
the acceptance of the contract and incase it is
acceptable, you may start the work immediately.”
25. Ms. Pinky Anand, learned counsel for the respondents, on the other
hand, would content that the actions on the part of respondent No. 1 being not
arbitrary, this court should not exercise its power of judicial review in the matter.
The learned counsel would submit that as regards the annual turnover for the last
three years, from the note appended to the Annexure I, it would appear that the
same were to be supported by the certificates.
26. The balance sheet filed by the petitioner was as under:
“PES INSTALLATION PVT. LTD.
BALANCE SHEET AS ON YEAR
ENDING 31-3-89
Sources
of Funds
SCHEDULE
CURRENT
YR
PREV YR
Share
capital
592520.00
97260.00
Reserve
& surplus
421362.55
484552.49
Secured
loans
A
25772.00
218356.55
Unsecured
Loans
B
50000.00
104000.00
1089654.55
904169.04
Application
of funds
Fixed
Assets
C
Gross
Block
2118462.40
1790734.00
Less:
Depreciation
744127.00
-507066.00
1374335.40
1283668.00
ADD;
current asset, loans & Advances
D
2920612.62
2849207.89
4294948.02i
4132875.89
Less:
current liabilities
E
-3205293.47
-3341126.19
1089654.55
791749.70
Investments
112419.34
1089654.55
904169.04
Auditor’s report
As per our separate report of even date”
27. Certificate by the Chartered Accountant was as under:
“PES
INSTALLATION PVT. LTD.
PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDING 31-3-89
PARTICULARS
SCHEDULE
CURRENT
YR
PREV
YR
Sales
2213421.00
2317477.60
Job work Recd.
18790702.55
6924683.30
Other income
F
762440.36
755968.26
(A)
21766563.91
9998129.16
Cost of Purchase
G
11768458.01
5736478.81
Direct Exp.
H
4604880.18
939995.57
Administration Exp.
I
2783559.69
1841016.30
Selling &
Distribution Exp.
J
1713838.51
760570.86
Finance Exp.
K
84948.46
123183.23
Depreciation
237061.00
240810.00
(B)
21192745.85
9642054.77
Net Profit (A-B)
573818.06
356074.39
Proposed Dividend @ 40 %
237008.00
NIL
Balance
Profit TFD to P&L A/C
-336810.06
356074.39
Auditor’s report
As per our separate report of even date”
“PES
INSTALLATION PVT. LTD.
B ALANC E SHEET AS ON YEAR
ENDING 31-3-2000
Sources
or Funds
Schedule
Current
Year
Previous
year
Share
Capital
A
592520.00
592520.00
Reserve
&Surplus
583812.83
421362.55
Secured
loans
B
__________
25772.00
Unsecured
loans
C
50000.00
50000.00
Total
1226332.83
1039654.55
Application
of funds
Fixed
Assets
D
Gross
Block
2187669.40
2118462.40
Less:
Depreciation
949170.00
744127.00
1238499.40
1374335.40
Add: Current
assets, Loans & Advances
E
4582775.59
2920612.62
5821274.99
4294948.02
Less: Current
liabilities
F
4594942.16
3205293.47
1226332.83
1089654.55
Investment
Total
1226332.83
1089654.55
Auditor’s report
As per our separate report of even date”
PES
INSTALLATIONS PVT LTD
SCHEDULE
OF FIXED ASSETS AS PER
COMPANIES
ACT ATTACHED TO AND
FORMATTING
OF THE BALANCE SHEET AS ON
31.3.2001
Particulars
Rate
(%)
Cost as
on 1.4.00
Gross Block
Depreciation
block
Net Block
Addition
Total
as on 31.3.2000
Total
as on 1.4.00
During
The Year
Total
as on 31.3.01
as on 31.3.2001
As o 1.4.2000
Computer
168402.00
168402.00
127111.00
16516.00
143627
24775
41291
Furniture
& Fixture
18.1%
356125.40
356125.40
131168.00
40717.00
171885
184240.4
224957.4
Cellular
phone
13.91%
41000.00
41000.00
15047.00
3610.00
18657
22343
25953
Car
Lancer
887806.00
887806.00
887806.00
19154.00
19154
868652
Car
Ceilo
25.89%
540060.00
540060.00
377149.00
42178.00
419327
120733
162911
Car
Maruti
25.89%
221425.00
221425.00
154632.00
17293.00
171925
49500
66793
Fax
machine
13.91 %
24000.00
24000.00
8865.00
2105.00
10970
13030
15135
Invertor
13.91%
36000.00
36000.00
16357.00
2732.00
19089
16911
19643
Office
equipment
13.91%
24210.00
384.00
24594.00
7564.00
2369.00
9933
14661
16646
Pager
13.91%
19980.00
19980.00
8857.00
f1547.00
10404
9576
11123
Office
5%
573842.00
573842.00
87764.00
24304.00
112068
481774
486078
Water
dispenser
13.91%
9650.00
9650.00
4135.00
767.00
4902
4748
5515
Plot
120500.00
120500.00
120500
120500
Telephone
13.91%
9000.00
9000.00
3258.00
799.00
4057
4943
5742
Cycle
13.91%
1420.00
1420.00
198.00
170.00
368
1052
1222
Fan
13.91%
10145.00
10145.00
2626.00
1046.00
3672
6473
7519
4Generator set
13.91%
31910.00
31910.00
4439.00
3821.00
8260
23650
27471
2187669.40
888190.00
3075859.40%
1836976.00
174128.00
1128298
1947561
1238499
28. It was, therefore, contended that the petitioner did not fulfilll the
criteria that it had completed a project of Rs. 462 lakhs, as their annual turnover
was limited to Rs. 205 to 227 lakhs.
29. According to the learned counsel, no other document could be
taken into consideration for the afore-mentioned purpose. It was further
submitted that from the letter dated 31st Marc 2000 issued by the Escorts Heart
Institute and Research Centre, it would appear that the petitioner only carried out
a project of Rs. 53,12,820/- Only. Having regard to the fact that offer for supply
of goods of US$ 517,913.00 was placed on Hill Rom Company and not upon the
petitioner, the same could not have been taken into consideration for the purpose
of reckoning the quantum of work done by the petitioner. Supply contract, Ms.
Anand would contend, cannot be a part of the project.
30. The learned counsel would submit that the Tender Screening
Committee recommended the lowest bidder but having regard to the fact that the
matter is pending before this court, no work order has been issued.
31. According to the learned counsel, the question as to whether the
recommendations of the first respondent would be accepted or not, the final say
therefor is only with the third respondent herein. In a case of this nature the
learned counsel would contend that the tenderers were bound to scrupulously
comply with the terms and conditions of the tender. In support of the said
contention, reliance has been placed on W.B. Electricity Board v. Patel
Engineering Co. Ltd., (2001) 2 SCC 451.
32. It is not in dispute that Clause 3.2 of the Invitation for pre-qualification
must be read as a whole. Whereas Clause 3.2(a) and 3.2(b) provide
for essential minimum criteria and the modalities are stated in Clause 3.2(c)
thereof, in terms of Sub-clause (a) of Clause 3.2, minimum average annual
turnover during the last three financial year is not required to be less than Rs. 425
lacs.
33. From the certificates issued by the Chartered Accountants as also
the Income-tax Clearance Certificate, it would appear that the petitioners average
annual turnover for the aforementioned years were Rs. 4,37,43,222.95; ITC
certificate has also been enclosed by the petitioner. What the respondents appears
to have done was to exclude the turnover in foreign exchange to direct
importation by the petitioner in all these three years without assigning any
sufficient or cogent reasons. If a clarification was necessary in this behalf the
same should have been called for, but the said issue has been raised for the first
time in the counter affidavit and not at any stage prior thereto. Similarly, in
relation to the fulfilllment of the criteria of Sub-clause (b) of Clause 3.2, the
petitioner had been able to show that whereas the amount of civil contract
performed by it, which is considered to be an indigenous item amounting to
Rs. 53,12,820/-, the amount which had been the subject matter of import was to
the extent of US $ 517913.00 was not taken into consideration.
34. It may be true that the Escorts Heart Institute and Research Centre
placed an order for supply of articles directly to M/s Hill Rom Company Inc. but
even such an order had been placed through the petitioner. The petitioner had
contended that the project was a turnkey one and in that view of the matter, the
respondents could not have, without asking the petitioner to explain to its stand in
relation thereto, taken a unilateral decision to the effect that the import element
should be excluded only because an order for supply thereof was placed before
M/s Hill Rom Company Inc. and not upon the petitioner.
35. From the certificates of Escorts Heart Institute and Research
Institute, it is evident that the said Hospital considered the entire project to be an
integrated one, and they put the value thereof at Rs. 4 crores. Accordingly, the
said project comprised of indigenous and imported components. Once both the
components were taken to be one by the Hospital concerned, ex facie the
petitioner had fulfillled the pre-conditions thereof. Furthermore, from the General
Authority letter dated 20.07.2001 issued by M/s Hill Rom Company Inc. the
petitioner has been able to show that it is the authorized distributor of M/s Hill
Rom Company Inc.
36. Sub-clause (c) of Clause 3.2 specifies the modalities as to how the
mandatory requirements of Sub-clauses (a) and (c) thereof were to be taken into consideration. The firm is either to be a manufacturer or authorized
representative of the manufacturer of equipments. Once the authorized
representative of the manufacturer of equipment becomes also entitled to
participate in the tender process, there cannot be any doubt that by reason thereof
a legal fiction has been created to the effect that even an authorized representative
of the manufacturer of equipment would be deemed to be manufacturer for the
said purpose. Unfortunately this aspect of the matter has not been considered by
the respondents at all.
37. It may be true as has been submitted by Ms. Pinki Anand that the
average annual turnover was to be supported by audited balance sheets and ITC
certificates. The petitioner had also been issued a certificate of its Chartered
Accountant, which is dated 22.03.2002. It may be for the purpose of income-tax
assessment, the transaction as the authorised representative of MI, Hill Rom & Co
might have been taken into consideration separately, but the same would not
mean that the petitioner does not fulfilll the essential conditions of contract.
38. It is a well-settled principle of law that ‘Notice’ cannot prevail over
the main provision. ‘Notice’ is an explanatory in nature. Thus, it does not restrict
the main provision and in that view of the matter, only because for the purpose of
accounting the petitioner had been maintaining separate accounts, the same by
itself cannot be a ground to hold that the petitioner does not fulfilll the conditions
thereof.
39. Furthermore, had the authorities of the respondents thought that the
petitioner is disqualified on the basis of the documents supplied by the petitioner,
there was evidently no reason as to why it thought for seeking further
clarifications. When clarifications in relation to other matters had been sought for
the respondent No. 1 from the petitioner, it could have followed the same
procedure in this case also.
40. We, however, do not mean to lay down a law that only because
certain clarifications had been asked for, the petitioner is not required to fulfilll the
essential criteria. The respondents are also bound by the procedure stipulated in
the tender process. In any event, the present contract also admittedly involves
some element of import of some articles from the foreign companies.
41. Clause 15.3 of Bid Document of Invitation of Bid merely
postulates that the price bids of bidders whose offers (Techno-commercial bid)
are found technically and commercially substantially responsive to the Bid
Document would be opened at different points of time. On 31.07.2000 the
petitioner was disqualified by the respondent No. 1. The recommendations were
made on the same date of the opening commercial bid and financial bid on the
same date. After the bidder pass the test of pre-qualification, the commercial bid
and the financial bid ought to have been opened on different dates, when
particularly a provision for time has expressly been made in the tender documents
that having regard to the complexity of the problem, the documents were required
be scrutinized thoroughly.
42. Such an indecent haste amounts to malice on the part of the
concerned authority.
43. In Dr. S.P. Kapoor v. State of Himachal Pradesh and Ors. AIR 1981 SC 2181, it was
held:-
“It is seen from what has been stated above and it is
also admitted by the Himachal Pradesh Government
that the selection of the Deputy Directors and the
Director of Health Services from amongst the Deputy
Directors had been made by the Departmental
Promotion Committee on 3-11-1979 itself and that
even the order of appointment had been issued on
the same day with the approval of the Governor of
Himachal Pradesh. Though before the High Court it
does not appear that Dr. Jiwan Lal had alleged any
mala fides to anybody he has alleged in the Special
Leave Petition that the constitution of the
Departmental Promotion Committee and the process
of selection and appointment were obviously mala
fide and that they were appointed on the date on
which Mr. Yadav, the regular Secretary, Health and
Family Welfare Department, was on leave and that
this haste suggests that he would not have agreed to
carry out the pulicidal wish of the then Chief Minister
in making the appointments in the post haste manner.
Though it is not possible to accept the belated
contention that there was any mala fides on the part
of the then Chief Minister in the matter of
constitution of the Departmental Promotion
Committee with his Principal Secretary as one of its
members in the place of the regular Secretary, Health
and Family Welfare, we are of the opinion that there
is room for suspecting the reason why the whole
thing was completed in haste on 3-11-1979 after the
preparation of the final seniority list on 2-11-1979, in
the light of the admitted position that the Deputy
Directors and Directors of Health Services, Himachal
Pradesh were holding ad hoc appointments from
1973. The matter was not such as could not have
been put off by a few days. Such rush is not usual in
any State Government. The post-haste manner in
which these things have been done on 3-11-1979
suggests that some higher-up was interested in
pushing through the matter hastily when the regular
Secretary, Health and Family Welfare was on leave.
Therefore, we are of the opinion that the matter
requires to be considered afresh.”
44. In Prestress India Corporation v. U.P. State Electricity Board
and Ors. 1988 (Supp) SCC 716, it was held:-
“2. The appellant-company has come up before
this Court against the judgment and order passed by
High Court allowing partial relief, i.e. directing the
respondents to place forthwith with the petitioner an
order for supply of 25,000 PCC Poles instead of
50,000 PCC Poles for which the tender was
submitted, though the High Court held that the
respondent Board acted in an arbitrary and
discriminatory manner in excluding from
consideration the tender of the appellant. Against this
judgment and order the opposite party also filed a
special leave petition which was dismissed by this
Court by an order dated October 29, 1987 (Annexure
‘I’ to this appeal). It has been urged on behalf of the
opposite parties that if the order of the Central Store
Purchase (sic. Committee of the) Board is illegal,
discriminatory and bad, the High Court can quash the
same and issue a writ of mandamus directing the
Board to consider the tender of the petitioner but it
cannot direct the Board to place orders for supply of
PCC Poles according to the tender submitted by the
petitioner. It has also been urged that it is for the
Board to consider and decide regarding the
acceptance of the tender and the quantum of PCC
Poles to be supplied by the tenderer concerned. It has,
therefore, been supplied that the impugned
judgment and order passed by the High Court should
be quashed and set aside. It has also been contended
in this connection that this Court can mould the relief
as appears appropriate. These submissions have no
merit inasmuch as the special leave petition filed on
behalf of the respondents has already been dismissed
by this Court and thereby the order of the High Court
directing placing order with regard to 25,000 PC
Poles is upheld. Moreover, the High Court has come
to the following finding:
The Board dealt with the petitioner’s case
rather discriminately when compared in the
context of the attitude and manner in which
some others or at least one tenderer was dealt
with. Accordingly, the action of the Board
has to be held unreasonable, unfair and
suffering from vice of arbitrariness. The
action in completely excluding the petitioner
from this tender was clearly not in
advancement of public interest.
3. In view of this finding the direction given by
the High Court for placing an order for supply of
only 50 per cent of the PCC Poles to the appellant
company is unwarranted.”
45. In Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors. ,
it was held:-
“17. We are of the opinion that in all such cases
whether public law or private law rights are involved,
depends upon the facts and circumstances of the case.
The dichotomy between rights and remedies cannot
be obliterated by any strait-jacket formula. It has to
be examined in each particular case. Mr. Salve sought
to urge that there are certain cases under Article 14 of
arbitrary exercise of such “power” and not cases of
exercise of a “right” arising either under a contract or
under a statute. We are of the opinion that that would
depend upon the factual matrix.
18. Having considered the facts and circumstances of
the case and the nature of the contentions and the
dealing between the parties and in view of the present
state of law, we are of the opinion that decision of the
State/public authority under Article 298 of the
Constitution, is an administrative decision and can be
impeached on the ground that the decision is arbitrary
or violative of Article 14 of the Constitution of India
on any of the grounds available in public law field. It
appears to us that in respect of corporation like IOC
when without informing the parties concerned, as in
the case of the appellant-firm herein on alleged
change of policy and on that basis action to seek to
bring to amend to course of transaction over 18 years
involving large amounts of money is not fair action,
especially in view of the monopolistic nature of the
power of the respondent in this field. Therefore, it is
necessary to reiterate that even in the field of public
law, the relevant persons concerned or to be affected,
should be taken into confidence. Whether and in what
circumstances that confidence should be taken into
consideration cannot be laid down on any strait-jacket
basis. It depends on the nature of the right
involved and nature of the power sought to be
exercised in a particular situation. It is true that there
is discrimination between power and right but
whether the State or the instrumentality of a State has
the right to function in public field or private field is
a matter which, in our opinion, depends upon the
facts and circumstances of the situation, but such
exercise of power cannot be dealt with by the State or
the instrumentality of the State without informing and
taking into confidence, the party whose rights and
powers are affected or sought to be affected, into
confidence. In such situations most often people feel
aggrieved by exclusion of knowledge if not taken
into confidence.”
46. The decision of the Apex Court in W.B. Electricity Board v. Patel
Engineering Co. Ltd. and Ors. (2001) 2 SCC 451 is not apposite. In that case, the mistake committed
by the tenderer was accepted. They intended to correct the said mistake, which
was not permissible. It was in the aforementioned factual backdrop the Apex
Court held:-
“24. The controversy in this case has arisen at the
threshold. It cannot be disputed that this is an
international completive bidding which postulates
keen competition and high efficiency. The bidders
have or should have assistance of technical experts.
The degree of care required in such a bidding is
greater than in ordinary local bids for small works. It
is essential to maintain the sanctity and integrity of
process of tender/bid and also award of a contract.
The appellant, Respondents 1 to 4 and Respondents
10 and 11 are all bound by the ITB which should be
complied with scrupulously. In a work of this nature
and magnitude where bidders who fulfill
prequalification alone are invited to bid, adherence
to the instructions cannot be given a go-by by
branding it as a pedantic approach, otherwise it will
encourage and provide scope for discrimination,
arbitrariness and favoritism which are totally
opposed to the rue of law and our constitutional
values.
31. The submission that remains to be considered
is that as the price bid of Respondents 1 to 43 is
lesser by 40 crores and 80 crores than that of
Respondents 11 and 10 respectively, public interest
demands that the bid of Respondents 1 to 4 should be
considered. The Project undertaken by the appellant
is undoubtedly for the benefit of the public. The
mode of execution of the work of the Project should
also ensure that the public interest is best served.
Tenders are invited on the basis of competitive
bidding for execution of the work of the Project as it
serves dual purposes. On the one hand it offers a fair
opportunity to all those who are interested in
competing for the contract relating to execution of the
work and, on the other hand it affords the appellant a
choice to select the beast of the competitors on a
competitive price without prejudice to the quality of
the work. Above all, it eliminates favoritism and
discrimination in awarding public works to
contractors. The contract is, therefore, awarded
normally to the lowest tenderer which is in public
interest. The principle of awarding contract to the
lowest tenderer applies when all things are equal. It is
equally in public interest to adhere to the rules and
conditions subject to which bids are invited. Merely
because a bid is the lowest the requirements of
compliance with the rules and conditions cannot be
ignored. It is obvious that the bid of Respondents 1 to
4 is the lowest of bids offered. As the bid documents
of Respondents 1 to 4 stand without correction there
will be inherent inconsistency between the particulars
given in the annexure and the total bid amount, it (sic
they) cannot be directed to be considered along with
the other bids on the sole ground of being the
lowest.”
47. Each decision as is well known must be considered on the factual
matrix involved therein. A little difference in facts or an additional fact, may
make a lot of difference in arriving at a different decision. (See Regional
Manager v. Pawan Kumar Dubey, ).
48. Further in Haryana Financial Corporation and Anr. v.
Jagdamba Oil Mills and Anr., , it was held:-
“19. Courts should not place reliance on
decisions without discussion as to how the factual
situation fits in with the fact situation of the
decision on which reliance is placed. Observations
of Courts are not to be read as Euclid’s theorems
nor as provisions of the statute. These observations
must be read in the context in which they appear.
Judgments of courts are not to be construed as
statutes. To interpret words, phrases and provisions
of a statute, it may become necessary for judges to
embark into lengthy discussions but the discussion
is meant to explain and not to define. Judges
interpret statutes, they do not interpret judgments.
They interpret words of statutes, their words are not
to be interpreted as statutes. In London Graving
Dock Co. Ltd. v. Horton (1951 AC 73 at P. 761),
Lord Mac Dermot observed:
“The matter cannot, of course,
be settled merely by treating the
ipsissima vertra of Willies, J. as though
they were part of an Act of Parliament
and applying the rules of interpretation
appropriate thereto. This is not to
detract from the great weight to be given
to the language actually used by that
most distinguished judge.”
The Home Office v. Dorset Yacht Co. (1970
(2) All ER 294) Lord Reid said, “Lord Atkin’s
speech….. is not to be treated as if it was a
statute definition. It will require qualification in
new circumstances.” Megarry, J. in (1971) 1 WLR
1062 observed: “One must not, of course, construe
even a reserved judgment of even Russell L.J. as if
it were an Act of Parliament.” And, in Herrington
v. British Railways Board, (1972) 2 WLR 537 Lord
Morris said:
“There is always peril in
treating the words of a speech or
judgment as though they are words in a
legislative enactment, and it is to be
remembered that judicial utterances
made in the setting of the facts of a
particular case.”
Circumstantial flexibility, one additional or
different fact may make a world of difference
between conclusion in two cases. Disposal of
cases by blindly placing reliance on a decision is
not proper.
20. The following words of Lord Denning in the
matter of applying precedents have become locus
classicks:
“Each case depends on its own facts and
a close similarity between one case and
another is not enough because even a
single significant detail may alter the
entire aspect. In deciding such cases,
one should avoid the temptation to
decide cases (as said by Cordozo) by
matching the colour of one case against
the colour of another. To decide,
therefore, on which side of the line a
case falls, the broad resemblance to
another case is not at all decisive.”
xxx xxx xxx xxx
“Precedent should be followed only so
far as it marks the path of justice, but
you must cut the dead wood and trim off
the side branches else you will find
yourself lost in thickets and branches.
My plea is to keep the path to justice
clear of obstructions which could
impede it.”
49. For the reasons aforementioned, we are of the opinion that the
respondent No. 1 committed an illegality inholding that the petitioner is not
entitled to be considered for techno-commercial bid. The respondents are,
therefore, directed to give an opportunity to the petitioner to participate in the
tender process. It may for the aforementioned purpose take any measure, which
would be fair and equitable to all the parties.
50. This writ petition is allowed with the aforementioned observations
and directions without any order as to costs.