Easun Products of India (P) Ltd. vs The Chairman Tamil Nadu Electricity Board and The Director, Transmission Projects

Vinod K. Sharma, J.—The Petitioner M/s. Easun Products of India (P) Ltd., a company registered under the Companies Act has invoked

the extraordinary writ jurisdiction of this Court, with a prayer for issuance of a writ in the nature of Certiorari, to quash tender specification T-1599

being arbitrary and against public cause and also being not in conformity with reasonableness.

The Petitioner initially filed the writ petition praying for a writ in the nature of mandamus, directing the second Respondent to amend the ""Bid

Qualifying Requirements"" by amending Clause 1.3.1 which provided that ""the Consortium can be formed between bidders, manufacturer of cable,

manufacturer of joints and terminations and contractor for erection of cable and accessories in any combination"".

Keeping in view of the settled law that it is not within the jurisdiction of the Courts to direct as to how the terms and conditions of the bid

document, are required to be framed, an application to amend the writ petition is filed, which is allowed and amended writ is taken on record.

The facts pleaded in the affidavit are that the Director, Transmission Projects, TANTRASCO invited tender for procurement of 129 Kms of

230 KV, 1 x 1200 sq.mm. Alumunium XLPE Cable and accessories, laying of cable and erection of joints and terminations under Turnkey basis

vide Tender Specification No. T-1599.

In terms of tender document, a Pre-Bid meeting was held on 28.7.2010 in which Petitioner participated and raised the following queries:

(i) Clarifications regarding test laboratories vide their letter dated 7.8.2010.

(ii) Clarifications regarding the Optic Fibre Cable and joints with number of fibre counts vide their letter dated 28.8.2010.

The case of the Petitioner is that the second Respondent clarified and amended the Bid Qualification Requirements for the other bidders, but not

for the Petitioner.

Thereafter, vide letter dated 30.08.2010, the Director, Transmission Project informed the bidders that all the clarifications have already been

issued. Therefore, the bidders should satisfy the ""Bid Qualifications requirements.

The Bid lays down the following Bid Qualification Requirements:

BID QUALIFICATION REQUIREMENTS

The bidder shall become eligible to bid on satisfying the following BQR. The bidder shall produce required documentary evidence in support of

fulfilment of BQR along with the tender.

1.1.1 The bidder should be a manufacturer of 220 kv or above voltage grade XLPE Cable. The manufacturer should have minimum 2 years

experience in manufacturing 220 KV or above Volatage grade XLPE CABLE.

1.1.2 Thebidder should have successfully supplied and laid atleast 8 ks of 22 kv or higher voltage grade XLPE cable which should be in successful

operation for a minimum period of two years. The cable should have been supplied by the same source from where bidder is proposing to supply

the tendered cable. Necessary documentary evidence such as copy of purchase order and performance certificate shall be furnished along with the

offer.

1.1.3 The Bidder or his Sub - Vendor should have designed, manufactured tested and supplied 220 kv or above Voltage cable accessories (i.e.

Joint and termination) which should have been erected, commissioned and in successful operation for more than two years. Necessary

documentary evidence and end user certificate for the same should be furnished with the offer. BQR relevant to Consortium made in Section 1.3

1.3 The bidding is also open to consortium (Maximum three members). The Consortium members shall individually or together meet the above

mentioned qualifying requirements. Consortium is permitted subject to the following conditions:

1.3.1 The consortium can be formed between bidder, manufacturer of Cable, principals, technical collaborator, manufacturer of Joints &

terminations and Contractor for erection of cable & accessories in any combination.

1.3.2 No member can be a member in more than one consortium.

1.3.3 The bid and the contract agreement between PURCHASER and Consortium shall be signed by all members of the consortium.

1.3.4 The Consortium agreement duly certified by Notary Public in case of Domestic Bidder and the Consulate General of India in Foreign country

in case of foreign bidder, confirming the intent of all the members to form the consortium should be submitted along with the Bid. It should also

distinctly show the financial participation of each member of the consortium, scope of work and responsibilities of each member of the consortium

scope of work and responsibilities of each members with regard to planning, execution and performance of the work under the entire scope of

contract between Purchaser and Consortium.

The case of the Petitioner is that Clause 1.1.2 & 1.3 of Bid Qualifications Requirements (B.Q.R.) requires clarifications and amendment.

The case of the Petitioner is that the Respondent was informed that as per Clause 1.1.2 the cable for the current tender is to be supplied from

the same factory which has the necessary experience whereas Clause 1.3 stipulates that the bidding is open to the consortium, wherein the

members of the consortium are permitted to satisfy the above condition individually or collectively. The Petitioner claim,s that it is necessary for the

Respondents to clarify whether the experience of the Principal/Technical collaborator and a bidder can be of a different cable manufacturer.

It is the case of the Petitioner that with reference to the consortium, the experience of the consortium is the experience of the bidder under the

law as settled by the Hon''ble Supreme Court. It is therefore necessary for the Respondents to amend Clause 1.3.1 by adding ""that the experience

of the principals/technical collaborator will be taken into account as the experience of the bidder/cable manufacturer provided adequate

documentary evidence was enclosed to show that the bidder/cable manufacturer is a subsidiary of the principal.

The case of the Petitioner is that in response to the query vide letter dated 3.9.2010, the second Respondent clarified that there was no change

in the Bid Qualification Requirement.

The case of the Petitioner is that vide letter dated 6.9.2010, the Petitioner sought further clarification and in response thereto, vide letter dated

16.9.2010, the second Respondent informed the Petitioner, that as per the revised Bid Qualification Requirements, Principals/ Technical

Collaborator could be a Consortium member and that he should jointly and severally execute the contract. The Petitioner was also informed, that

he could form consortium with cable manufacturer or Principal/Technical collaborator.

It is the case of the Petitioner that the second Respondent failed to issue clarification and modify the clause of B.Q.R. with an ulterior motive to

prevent the Petitioner, from participating in the Bids. In support of the allegations of the malafide, it is averred that attempts were even earlier made

by the second Respondent, to prevent the Petitioner from participating for supply of cables to Tamil Nadu Electricity Board, though it has very

good Vendor Rating with the Tamil Nadu Electricity Board.

In support of allegation of malice, the Petitioner alleged that on two occasions, the Petitioner had to file W.P. Nos. 11160 of 2009 and 13367

of 2010 in this Court. (It may be noticed, that in these writ petitions, the second Respondent was not a party though he was holding the post of

Chief Engineer at the particular time). It is not disputed that out of two writ petitions, one was dismissed against which writ appeal is pending.

The case of the Petitioner is that in order to accommodate favourable persons, evasive clarifications were issued without amending the ""Bid

Qualification Requirement"".

The case of the Petitioner also is that on account of failure to amend Bid Qualification requirements, the Petitioner is treated differently thereby

infringing its fundamental right to carry on its business effectively.

The pleaded case of the Petitioner, is that the Bid document is required to be clear and unambiguous. The last date for submitting Bid

document was extended to 09.10.2010 from 29.9.2010. The Petitioner without submitting tender, approached this Court for stay of further

proceedings in pursuance to the tender notification in T-1599 and also prayed for issuance of a writ in the nature of mandamus directing the

Respondents to amend the Bid Qualification requirements. The prayer which stands amended to one for Certiorari.

The Respondents filed counter through the second Respondent, wherein it is admitted that Pre-Bid meeting was held on 28.7.2010 and the

queries of all the prospective tenderers were replied. Thereafter, the additional queries of the various prospective bidders were also clarified vide

letter dated 3.9.2010 and 1.10.2010. It has been specifically denied that the second Respondent only clarified and amended Bid Qualification

Requirement for the other bidders except the Petitioner.

The stand taken in the counter is that amendments were made in the Bid qualification Requirement, in the larger interest of the Board so as to

have more competitive bidding. The amendment along with pre-bid clarifications were sent to all the Pre bid tenderers including the Petitioner,

wherein the clarification sought for by the Petitioner, with regard to laboratory approval was sent to it.

It is also the stand of the second Respondent that he is not the competent authority to amend the Bid Qualification Requirement as it is only the

Board for Tantransco which is the competent authority to amend the Bid Qualification Requirements.

The allegations of malafide against the second Respondent have been specifically denied. It is explained, that two writ petitions filed by the

Petitioner were against Tamil Nadu Electricity Board. INW.P. No. 11160 of 2009, it was prayed for not to insist on Bill of Entry document while

making payment for customs duties for the imported materials, in which the Petitioner succeeded. Whereas W.P. No. 13367 of 2010 was filed to

direct the Respondents to consider their offer for opening the price bid in tender No. T-1580 in which it was not qualified. The said writ petition

was dismissed, against which writ appeal is pending before this Court. However, no stay has been granted in favour of the Petitioner.

The case of the second Respondent is that in both these case, the second Respondent did not have any say individually as it was Tamil Nadu

Electricity Board decision. A positive stand is also taken that Bid Qualification Requirements are very clear unambiguous and not as submitted by

the Petitioner.

It is also the case of the Respondent that as per the direction of this Court, Technical bids were opened on 9.10.2010 at 3.00 p.m. in which

seven bidders had participated. But the Petitioner did not participate for the reasons best known to it. Thus, it is prayed that the writ petition be

dismissed.

Mr. A.R.L. Sunderesan, learned Senior counsel appearing on behalf of the Petitioner referred to Clause 1.1.3 of Bid Qualification

Requirements, to contend that under this clause Bidder or the consortium partner or his sub vendor should have designed, manufactured, tested

and supplied 220 KV or above Voltage cable accessories (i.e. Joints and terminations) and should have erected, commissioned and undertaken

successful operation, for more than two years, the necessary documentary evidence and end user certificate was also required to be furnished, the

qualification as laid therefore would include the holding company of the bidder, in view of law laid down by the Hon''ble Supreme Court in the case

of New Horizons Limited and Another Vs. Union of India (UOI) and Others, , wherein NHL a joint venture company established by Thomson

Press (India) Limited (TPI), Living Media (India) Limited (LMI), World Media Limited (WML) and Integrated Information Pvt. Ltd. (HPL), had

received approval of the Government of India and was in operation. M/s.NHL was established as an information and database management

company with expertise in database processing, publishing, sales/marketing and the dissemination of related information but was not considered

eligible for allotment of tender, inspite of the fact that it had complete resources and strength of its parent/owning companies. The order was set

aside by the Hon''ble Supreme Court, by holding that purpose of considering whether NHL had the experience, the experience of the constituents

of NHL was required to be taken into consideration. The decision of the Government was therefore held to be arbitrary and irrational.

The contention of the learned Senior counsel was that the second Respondent inspite of the judgment of the Hon''ble Supreme Court, failed to

give necessary clarifications to include the holding company of the bidder and the action of Respondent rendered the Bid Qualification

Requirement, as arbitrary and suffering from unreasonableness.

This contention of the learned Senior counsel for the Petitioner cannot be accepted. Even if for the sake of argument, the contention of the

learned Senior counsel is accepted, that the experience of the holding company was to be considered for the purpose of experience, still the clause

would not be arbitrary or unreasonableness. In that event, the Court would see whether the Bid document submitted by the party was wrongly

rejected by ignoring the experience of the holding company. The contention otherwise also deserves to be rejected, as the Petitioner is not a

manufacturing company and therefore, there is no question of accepting experience of parent company for the experience of manufacture by the

Petitioner which is pre-requisite qualification. As a matter of fact, in pursuance to the query raised by the Petitioner, vide letter dated 16.9.2010,

the Petitioner was informed as under:

Lr. No. Dir/TP/SE/TRII/EE400KV/A3/F.T1599/

D. /10 Dt.16.09.10

Sir,

Sub: Tender specification No.T.1599-Procurement of 230 KV cable and accessories- Amendment to Bid qualification requirement requested -

reg.

Ref: (1)L. No. Dr/TP/SE/TRII/EE400KV/A3 /F.T1599/d.89/10, Dt.03.09.2010

(2) Your letter dated 31.08.2010 & 6.09.2010. ****

With reference to your letter 2nd cited, you are requested to kindly refer this office letter 1st cited wherein revised Bid qualification requirement

has been communicated. As per the revised BQR principals/technical collaborator can be a consortium member and he shall be jointly and

severally for execution of the contract.

Therefore, you may satisfy the qualifying requirement of the BQR by forming consortium with cable manufacturer or principals/ technical

collaborator.

Yours faithfully,

sd/-

for Director/Transmission Projects

Again on 28.9.2010 the Petitioner was informed that the Bid Qualification Requirement as amended vide letter dated 20.8.2010 remains

unaltered. Inspite of this, the Petitioner chose not to participate in the bid.

The learned Senior counsel for the Petitioner thereafter contended that the Bid Qualification Requirement as framed are totally arbitrary as it

has failed to provide level playing field to all the bidders.

It is the contention of the learned Senior counsel for the Petitioner that the terms and conditions are required to be clear and unambiguous so as

to satisfy the test of reasonableness. Therefore, as the request of the Petitioner for amendment of Bid Qualification Requirements was rejected and

the clarifications sought for by the Petitioner were not answered, the Bid Qualification Requirements are rendered arbitrary, and thus cannot be

sustained in law, in view of the law laid down by the Hon''ble Supreme Court in the case of Reliance Energy Limited and Another Vs. Maharashtra

State Road Development Corporation Ltd. and Others, .

These contentions of the learned Senior counsel is again deserves to be noticed to be rejected. Bid Qualification Requirements are clear and

unambiguous. The clarifications sought for by the Petitioner were duly answered by the department. It was clarified that the manufacturing

company could join the consortium to participate in the Bid. The Petitioner could not claim modification of the Bid document, nor it is within the

jurisdiction of this Court to direct as to what should be the terms of Bid document of a contract.

It is well settled law that modification/alteration are implications of contractual term. On the ground of alleged unfairness, Doctrine of fairness

and reasonableness, the Petitioner cannot invoke the writ jurisdiction to seek amendment or alteration of the express terms of the contract between

the parties. The Court does not have jurisdiction to judge as to how terms should be framed in a contract.

This principle equally applies to the Bid document.

It is also well settled that the terms of the tender document prescribing eligibility criteria can only be interfered with, if they are arbitrary,

discriminatory or biased, but are not open to interference merely because the Court feels that some other term could be more preferable. In the

case in hand, only ground on which the Petitioner sought modification was that the Petitioner had no experience of manufacturing, whereas its

holding company had such experience. This stand on the face of it, is not acceptable as the Petitioner is not a manufacturing company at all. It was

for this reason that the Petitioner was advised to join manufacturing company in the consortium.

The learned Senior counsel also placed reliance on the judgment of the Hon''ble Gauhati High Court in the case of Shree Pacetronix Ltd. and

Anr. v. State of Assam and others. (2010)159 Comp Cas 386 to contend that the Petitioner was fully eligible as the subsidiary company could be

treated as manufacturing company keeping in view of the business of the holding company.

This contention again is misconceived as the Hon''ble Gauhati High Court accepted similar contention, for the reason that in the notice inviting

tender, itself subsidiary company was permitted to participate in the tender process for supply of Pacemakers, if the parent company which

manufactured pacemakers gave lifetime warranty for the product to be supplied. There is no such stipulation in the Bid document in the present

case. It has not been laid by Hon''ble Gauhati High Court, that the experience of holding company can be taken as experience of subsidiary

company.

The learned Advocate General appearing on behalf of the Respondents question the maintainability of the writ petition on the ground, that the

Petitioner having not participated in the Bid, cannot challenge the process of allotment, as also on the ground that it is not for the Court to modify

the terms of the Bid document which are clear and unambiguous.

In support of the contention that due to non participation in bid, the Petitioner has no locus standi to challenge the bid document, learned

Advocate General placed reliance on the statutory rules framed under The Tamil Nadu Transparency in Tenders Act, 1998 with The Tamil Nadu

Transparency in Tenders Rules, 2000. Rule 22 of this Rules bars acceptance of any tender after the time stipulated:

Procedure to be followed at tender opening:

The following procedure shall be followed at the tender opening.

(a) All the envelopes received containing tenders shall be counted;

(b) All the tenders received in time shall be opened;

(c) Any tender received subsequently shall not be opened and shall be returned unopened to the tenderer;

(d) On opening the tender, the members of the Tender scrutiny committee shall initial the main bid including the prices and any corrections;

(e) A record of the corrections noticed at the time of the bid opening shall be maintained.

(f) The name of the tenderers and the quoted prices should be read out aloud.

(g) the fact whether earnest money deposit has been submitted and other documents required produced may be indicated, but this shall be merely

an examination of the documents and not an evaluation;

(h) Minutes of the tender opening shall be recorded . The signatures of the tenderers present shall be obtained unless any of the tenderers or his

representative refuses to sign the minutes.

The learned Advocate General was right in contending that judgment of the Hon''ble Supreme Court in the case of New Horizons Limited and

Another Vs. Union of India (UOI) and Others, has no application, as the Petitioner is not a manufacturing company at all. Therefore, there is no

question of treating it to be a manufacturing company because of it is holding company.

It was also the stand of the learned Advocate General that the allegations of malafide are baseless and lack material particulars.

There is force in this contention. The allegations leveled against the second Respondent are vague and weightless and have been was

specifically denied. Merely because the writ petitions were earlier filed by the Petitioner, cannot lead to presumption of bias especially when

nothing stopped the holding company of the Petitioner to join consortium.

The contention of the learned Advocate General is also right, that the Petitioner has no locus standi to challenge the Bid Qualification

Requirements, as he has failed to submit the bid document in time. This contention of the learned Advocate General finds support from the

judgment of this Court in the case of Shree Trading Corporation v. The Chairman, Tamil Nadu Electricity Board and Ors. (W.P. No. 2876 of

2008).

The contention of the learned Senior counsel, that the Petitioner should be allowed to participate in the Bid now cannot be accepted because

of the statutory bar under The Tamil Nadu Transparency in Tenders Act, 1998 and rules framed therein.

The Petitioner also cannot take advantage of pendency of the writ petition or interim order passed by this Court as inspite of the limited stay

and availability of the time to submit tender document, the Petitioner chose not to compete with others.

For the reasons stated, I find no merit in the writ petition which is accordingly ordered to be dismissed. But with no order as to costs.