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Judgment
(1)Heard Mr. N.N. Jha, the learned advocate for the petitioner as well as Mr. S.C. Keyal, the learned Additional Solicitor General of India.
(2) In brief, the case of the petitioner in this writ petition filed under Article 226 of the Constitution of India is that he is carrying on proprietorship business of contractor and order supplier under the name and style of M/s. Azaz Ahmed. His firm is enlisted in the 237 Engineer Regiment for financial year 2018-19 and it is also claimed that the petitioner's firm was also a registered vendor in HQ 71 Inf. Div. as "Sadbhavana" vendor and that from time to time, the petitioner had been receiving all intimations and advertisements regarding tenders from Davision Troops Units at his registered e-mail address. However, despite his enlistment, the respondents No. 2 to 5, viz., (a) Commanding Officer, 626 SATA BTY, (b) Commanding Officer, 57 Field Regiment, (c) Commanding Officer, 71 INF. DOU, (d) Commanding Officer, 1851 Light Regiment (respondent No. 5), had not invited or intimated about tenders for any contract work to the petitioner and in this regard, the petitioner has specifically referred to four tenders for which no invitation or intimation was given to him. Hence, by four separate letters dated 09.07.2018, the petitioner had informed the above referred four Commanding Officers that he was enlisted for OP Sadbhavana project 2018-19 under 71 Inf. Division, and that his firm had done OP Sadbhavana work in the last two years and he had requested the said officers to give him offer to participate in e-tendering of OP Sadbhabana. Hence, alleging lack of transparency and violation of the prescribed and rules and procedures, as well as favouring of blue-eyed contractors, the present writ petition has been filed.
(3) The learned advocate for the petitioner has submitted that on denying opportunity to the petitioner to bid in the limited tender process, the tender process is reduced to a farce and the authorities have resorted to pick and choose policy at their respective whims and fancies. It is also submitted that by denying offer to the petitioner, the respondents are denying level playing field to all registered contractors, and in the process, the respondents are not allowing registered contractors an opportunity to offer their best competitive rates. It is further submitted that in guise of "limited tender enquiry", the respondents are giving undue advantage to some limited blue eyed contractors. It is further submitted that the respondents are required to scrupulously follow Rule 162 of the General Financial Rules, which mandates that notice of all tenders must be sent to all registered contractors by registered post and e-mail and must be uploaded in the website to invite more participation and that in any case, the number of suppliers participating in the bidding should be more than three.
(4) By referring to the statements made in the counter- affidavit filed on 14.12.2018 by the respondents under the name of additional affidavit, it is submitted the stand of the respondents that it is not mandatory to call all the registered tenderers has established that the respondents had violated the provisions of Rule 162 of the General Financial Rules as well as Defence Procurement Manual- 2009 (Revenue Procurement). In this regard, the learned advocate for the petitioner has relied on paragraph 3.2.3, 3.2.4, 4.3.1, 4.3.5, of the said manual. It is submitted that in the said affidavit, the respondents had taken a stand that his enlistment is applicable for operational work in Solmara/ Tezpur and since the work, scope, budget head and station are different, the enlistment was not applicable for OP Sadbhavana in Missamari Station establishes that despite the registration of the petitioner as a registered vendor, the respondents have done further sub-classification of their own by arriving at a finding that the petitioner was not found suitable, which was without any basis whereas after registration of vendor, the respondents had no power or authority to re-evaluate the registered vendors and arrive at a unilateral finding that for a particular undisclosed reason, the petitioner was not eligible to participate in the limited tender process.
(5) Per contra, the learned Assistant Solicitor General of India (ASGI) has relied on the counter- affidavit filed by the respondents captioned "additional affidavit". Pursuant to the order dated 01.02.2019, the learned ASGI has also produced the records pertaining to one "Limited Tender Enquiry". By relying on paragraph 162 of the General Financial Rules, 2017 he has submitted that as the work tendered by the respondents was below the sum of Rs.25.00 lakh, it was permissible for the respondents to opt for the procedure of "limited tender enquiry", whereby the requirement is that the number of supplier firms in such tender enquiry must be more than three. Hence, there was no mandate that if there are many registered vendors, all such registered vendors must mandatorily be sent the bidding documents for the required goods. Moreover, it is submitted that the prescribed procedure was followed to select the eligible supplier to whom work was awarded. It is also submitted that if all the registered vendors is to be notified, then the very purpose of "limited tender enquiry" would be frustrated, causing delay in the execution of the work under "Operation Sadbhavana", which is a social project to provide bench, desks, chalk boards, perimeter walls, classroom with toilet, etc. for schools and other public beneficial works in the areas nearby Army Camps, with tender value ranging from Rs.2.00 lakh to Rs.10.00 lakh.
(6) As both sides have relied on Rule 162 of the General Finance Rules, 2017 the said provision is reproduced below:-
"Rule 162. Limited Tender Enquiry.
(i) This method may be adopted when estimated value of the goods to be procured is upto Rs.Twenty five lakhs. Copies of the bidding documents should be sent directly by speed post/ registered post/ courier/ e-mail to firms which are borne on the list of registered suppliers for the goods in question as referred under Rule 150 above. The number of supplier firms in Limited Tender Enquiry should be more than three. Efforts should be made to identify a higher number of approved suppliers to obtain more responsive bids on competitive basis.
Further, an organization should publish its limited tender enquiries on Central Public Procurement Portal (CPPP) as per Rule 159. Apart from CPPP, the organization should publish the tender enquires on the Department's or Ministry's website.
(ii) The unsolicited bids should not be accepted. However Ministries/ Department should evolve a system by which interested firms can register and bid in next round of tendering.
(iii) Purchase through Limited Tender Enquiry may be adopted even where the estimated value of the procurement is more than Rupees Twenty-five lakhs, in the following circumstances:-
(a) the competent authority in the Ministry of Department certifies that the demand is urgent and any additional expenditure involved by not procuring through advertised tender enquiry is justified in view of urgency. The Ministry or Department should also put on record the nature of the urgency and reasons why the procurement could not be anticipated.
(b) there are sufficient reasons, to be recorded in writing by the competent authority, indicating that it will not be in public interest to procure the goods through advertised tender enquiry.
(c) the sources of supply are definitely known and possibility of fresh source(s) beyond those being tapped is remote.
(iv) sufficient time should be allowed for submission of bids in Limited Tender Enquiry cases."
(7) The provisions for "Limited Tender Enquiry" is provided under paragraph 4.3 of the Defence Procurement Manual, 2009. The relevant paragraphs 4.3 is quoted below:-
"4.3 Limited Tender Enquiry (LTE)
4.3.1 Limited Tender Enquiry: this method may be adopted when estimated value of the goods to be procured is up to Rupees Twenty-five lakhs. Normally, the number of supplier firms in Limited Tender Enquiry should be more than three. However, Limited Tender Enquiry may be resorted to also when there are only two or three sources of supply.
4.3.2 Limited Tender Enquiry in Special Circumstances: Purchase through Limited tender Enquiry may be adopted even where the estimated value of the procurement is more than Rupees twenty five lakhs, in the following circumstances, subject to approval by the CFA and in consultation with the IFA, where required as per delegation of financial powers:
(a) the Indenter certifies that the demand is urgent and any additional expenditure involved by not procuring through advertised tender enquiry is justified in view of urgency. The nature of the urgency and reasons why the procurement could not be anticpated should also be placed on record.
(b) There are sufficient reasons, to be recorded in writing by the competent authority, indicating that it will not be in public interest to procure the goods through advertised tender enquiry.
(c) the sources of supply are definitely known and possibility of fresh source(s) beyond those being tapped is remote.
(d) the nature of item to be procured is such that pre-verification of the competence of the firms and their registration is essential.
4.3.3 Publicity and dispatch of tender documents: Copies of the bidding document should be sent directly by speed post/ registered post/ courier/ e-mail/ fax to firms which are borne on the list of registered suppliers for the goods in question. Copies of the bidding documents should also be sent by registered post to the firms to whom these are initially sent by fax/ e-mail. Web based publicity should be given for Limited Tender Enquiry also and efforts should be made to identify a higher number of approved suppliers to obtain more responsive bids on competitive basis.
4.3.4 Time to be given for submission of bids: Sufficient time, normally ranging from one to three weeks, should be allowed for submission of bids in Limited tender Enquiries. For perishable goods or consumables a reduced time frame may be followed.
4.3.5 Unregistered firms claiming compliance: Though normally no such occasion should arise in the case of LTE, some unregistered firms may nevertheless submit unsolicited bids. In such cases action may be taken as follows:
(a) If it is a two-bid tender, the technical bid of the firm may be opened and evaluated, where procurement does not involve any trials. If the firm is found to be technically compliant, further action may be taken as per provisions of paragraph 4.2.9 of this Manual, provided it does not entail any delay in procurement, defeating the very purpose of procurement.
(b) if the firm is not found to be technically compliant, further cognizance of the tender need not be taken and the firm advised accordingly, with the advice to apply separately for registration.
(c) in a single bid tender, the tender may be considered if it does not involve any trials or does not result in delay in procurement."
(8) On a perusal of paragraph 3.2.4, it is provided that the credentials of the firms applying for registration, including their financial status, the manufacturing and quality control facilities, the business ethics and their market standing are required to be thoroughly scrutinized before registering such suppliers as an approved source of supply. Paragraph 3.2.5 provides inter-services and inter-departmental acceptability of registration. However, under paragraph 3.3.1, it permits that the performance of the registered firms to be reviewed by the procurement agencies periodically and reported to the registering agency.
(9) Therefore, from the above, it is clear that it was not open for the respondents to hold that the authority did not find the petitioner suitable for the project since the firm had no experience/ expertise of undertaking Sadbhavana Project in Missamari Station since it was registered in 2017-18 only, as projected in paragraph 3(b) of their additional affidavit because no material has been placed before this Court that the respondents had complied with the requirements of paragraph 3.3.1 of Defence Procurement Manual, 2009.
Therefore, in absence of anything to the contrary, once the petitioner firm has been registered, there cannot be any ouster of the petitioner from the consideration zone insofar his eligibility is concerned, for the only reason that the petitioner was not having undertaken any "Op. Sadbhavana" work in Missamari. In this context, no specific paragraph has been shown from the Defence Procurement Manual, 2009 that when the enlisting of a "registered vendor" is in force, the unit seeking procurement of materials or services through "limited tender enquiry" can refuse to permit participation of one registered vendor on any further criteria. Paragraph 3.2.4 of the said Defence Procurement Manual, 2009 requires that credentials of the firms applying for registration must be verified before their registration, as such, till such time a registered vendor continues to be enlisted, such firm cannot be prevented from participating in the tender process. In this case in hand, the petitioner has produced materials on record to show that he was allotted work under "Op. Sadbhavana" by another unit and the respondents could not show existence of any adverse remarks against the petitioner, which was communicated to the registering agency.
(10) However, on a plain and conjoint reading of Rule 162 of the General Financial Rules read with paragraph 4.3.1 of the Defence Procurement Manual, 2009 there is no room for any doubt that the said provision do not mandate that all firms enlisted as registered vendors must be informed about the "limited tender enquiry" for award of a particular work. It appears that the only requirement that is envisaged under the said system of tender that normally the number of "registered vendors" or suppliers firms in the "limited tender enquiry" should be more than three. Nonetheless, the said system of tender can be resorted to even when there are only two or three known sources of supply.
(11) On a perusal of the records produced by the learned ASGI, it is seen that the said record was in respect of Tender ID No. 2018_IHQ_386200_1. It appears that in the said case a vendor rating exercise was made and the file contains documents by which it is sought to be projected that in previous cases the petitioner remained unresponsive on tender notice. Moreover, it is seen that in connection with the said work, the "limited tender enquiry" was made from 9 (nine) vendors, and in the tender process, the work was allotted to L-1 tenderer. It appears that there was a tender committee constituted for selecting successful tenderers and the proceedings were vetted and/or approved by competent authority. Therefore, on a perusal of the record as produced, this Court is unable to arrive at a finding that the procedure adopted by the respondents in awarding the tender was vitiated by arbitrariness, malafide, lack of transparency, smacking of favoritism, whims and caprice, etc. as alleged by the petitioner.
(12) Moreover, as per the case projected by the petitioners, he had received work order from other units, as such, it is not a case where the petitioner has been discriminated against only because for certain works, no enquiry was solicited from the petitioner in course of "Limited Tender Enquiry". In the present case, it is not the case of the petitioner that the contract sought to be awarded was more than Rs.25.00 lakh. The records produced show that a list of approved vendors was available with the authorities at the time of evaluating the tender process.
(13) Therefore, while in the present case, no infirmity is found in the awarding of contract by adopting the "limited tender enquiry", but as it is found that the respondents have taken a view that the petitioner had no experience in executing works under Missamari Range, this alone cannot be a criteria for the respondents to refuse "limited tender enquiry" from the petitioner, as it would amount to surrogate black-listing of the petitioner, who would never then get any contract from the respondents merely for not having any past experience of working in a particular locality, which is not the intent and purpose of maintaining a list of registered vendors, by allowing inter-services and inter- departmental acceptability of registration under paragraph 3.2.5 of Defence Procurement Manual, 2009. Hence, the respondents are not entitled to discriminate against the petitioner merely because he has no experience of working in a particular local area, and thereby holding him ineligible to be offered a "limited tender enquiry". If the respondents are permitted to resort to such sub0classification, it would have the effect of rendering the purpose of paragraph 4.3.3 of Defence Procurement Manual, 2009 as otiose, which requires wide publicity and mandate contained therein to identify higher number of approved suppliers to obtain more responsive bids on competitive basis.
(14) The respondents in their affidavit had taken a stand that the petitioner could have submitted unsolicited bids. The said stand appears to be without any basis because as per paragraph 4.3.4, only unregistered firms claiming compliance can submit unsolicited bids, but nothing is brought on record to show that even registered vendors can submit unsolicited bids. Nonetheless, in paragraph 8 of the additional affidavit sworn and filed by the respondents, the following is the categorical stand:-
"8. ... As stated above, the writ petitioner could have submitted unsolicited bid under para 4.3.5 of DPM, 2009 as the detailed (sic.) of the bid was available on CPP portal which was in open domain."
In view of the said stand in the additional affidavit filed by the respondents, it is directed that if henceforth the petitioner submits his unsolicited bids, the same shall not be rejected by the respondents for being not in consonance with para 4.3.5 of the Defence Procurement Manual, 2009.
(15) Therefore, in view of the discussions above, while not finding any fault with the manner in which the respondents had proceeded with the "limited tender enquiry" challenged in this writ petition, the respondents are directed (i) not to deprive the petitioner by not allowing him to participate in the "Limited tender Process" merely because the petitioner may not have experience in working in a particular local area, which is not a pre-condition contained in the Defence Procurement Manual, 2009, and (ii) as the respondents are bound by their stand taken in paragraph 8 of the additional affidavit, the respondents are directed that if henceforth the petitioner submits his unsolicited bids, the same shall not be rejected by the respondents for being not in consonance with para 4.3.5 of the Defence Procurement Manual, 2009.
(16) With the aforesaid directions, this writ petition stands disposed of.