Hotel Amarjit Pvt.Ltd vs Mumbai Port Trust And Anr on 6 August, 2019
Bombay High Court
Hotel Amarjit Pvt.Ltd vs Mumbai Port Trust And Anr on 6 August, 2019
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 1647 OF 2019
Hotel Amarjit Pvt. Ltd. , ]
A Company registered under ]
the Companies Act, 1956 ]
Having its registered office at ]
24, Central Bazaar Road, ]
Ramdaspeth, Nagpur ]
Through its Director, ]
Angadh Jasbirsingh Arora ] .. Petitioner
Versus
1. Mumbai Port Trust ]
Port House, 3rd Floor, ]
Shoorji Vallabhdas Marg, ]
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Ballard Estate, ]
Mumbai 400 001 ]
Through Chief Engineer ]
2. Shri Sukhsagar Hospitality ]
Services, ]
Indian Kanoon – http://indiankanoon.org/doc/126801940/ 1
Hotel Amarjit Pvt.Ltd vs Mumbai Port Trust And Anr on 6 August, 2019 House No. 1068, Shop ]
No.3/4, Sector 5, ]
Koparkhairane, ]
Navi Mumbai – 400 709. ]
Through its Proprietor, ]
Shri Shivchandra Shetty ] ..Respondents
Mr. Rakesh Tikku, Senior Advocate a/w Mr. Ranjit Kapoor, Mr. Shyam Dewani, Mr. Chirag Chanani i/by Dewani Associates for the Petitioner.
Dr. Milind Sathe, Senior Advocate a/w Roopadaksha Basu and Mr. Ayush Agarwal i/by The Law Point for Respondent No.1.
Mr. Sean Wasoodeo a/w Ms. Vijaya Ingule & Mr. Rupesh Mandhare for Respondent No.2.
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CORAM: PRADEEP NANDRAJOG, CJ. &
NITIN JAMDAR, J.
RESERVED ON : JULY 29, 2019.
PRONOUNCED ON : AUGUST 06, 2019 JUDGMENT [Per Pradeep Nandrajog, CJ.]
- Mumbai Port Trust (Respondent No.1) floated tender notice E.132/2018 inviting offers for `Retrofitting, Operation and Maintenance of Ro-Pax Passenger Terminal Cum Restaurant ‘ at Prince’s Dock.
- Various Sub-clauses of Clause 3.4 listed terms of qualification, and the relevant clauses read as under:-
- 4 Evaluation of Submission 1 : Qualification 3.4.1 For the purpose of qualifying
under Submission 1, the Bidder shall have to demonstrate the minimum Technical
Capacity as stipulated under Clauses 3.4.3 and Clause 3.4.4 and minimum Financial
Capacity as stipulated under Clause 3.4.5 and 3.4.6 of this Tender document.
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3.4.2 Deleted.
3.4.3 Eligibility Criteria – Technical Capacity
3.4.3.1 The bidding firm/consortium or any member in the Consortium shall meet
the following eligibility criteria for Technical Qualification. Certification in support of qualification criteria may be submitted along with details in Appendix VI Annex II
and Appendix VI Annex III.
a) The Technical Capacity of the Bidder shall be assessed under this category. In the
case of a Consortium, the Members, who have and shall continue to have an equity
share of at least 26% (twenty six per cent) in the SPV, shall be considered for the
purpose of evaluation. Such Members who have been evaluated under this category
shall until the 4th (fourth) anniversary of the date of Award of the Project, hold
equity share capital representing not less than 26% (twenty six per cent) of the
subscribed and paid-up equity of the SPV and the Lead Member shall hold equity
share capital representing not less than 51% (fifty one per cent) of the subscribed and
paid-up equity of the SPV, until the 4 th (fourth) jt-wp-1647-19.doc anniversary of the
date of Award of the Project.
3.4.4 Technical capacity for purpose of evaluation
3.4.4.1 For the purpose of this Tender Eligible
Project shall mean:
Category-1
experience of operations and maintenance in Hotels/Restaurants/Hospitality for at
least 3 (three) continuous years anytime in the last 7 years prior to bid due date
where:
a . H o s p i ta l i t y s h a l l me a n a nd i n cl u d e o w ni n g a nd / or o p e r a tin g a restaurant/hotel/resort or any similar establishment which is categorized under
hospitality industry of at least 1,410 sq.m in India.
b . H o s p i t a l i t y sha l l m e a n and incl u de owni n g a n d / or o p erating a restaurant/hotel/resort or any similar establishment which is categorized under
hospitality industry of at least 1,060 sq.m in India.
jt-wp-1647-19.doc Or Category-2 a. Constructed or invested in at least one commercial real estate project size of 1,410 sq.m in the last 7 years prior to bid due
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date Or b. Constructed or invested in at least two commercial real estate project size of 1,060 sq.m in the last 7 years prior to bid due date.
For avoidance of doubt, hospitality industry shall include establishments like residential hotels, flotels, resorts, bars, cafes, lounges, restaurants, shopping malls, gaming and entertainment center. Experience for any activity relating to an Eligible Project shall not be claimed by two or more Members of the Consortium. In other words, no double counting by a Consortium in respect of the same experience for a particular category shall be permitted in any manner whatsoever.
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3.4.4.2 The Bidder should have valid
- /FSSAI License whichever is applicable 3.4.4.3 The Bidder should have valid
- certificate (along-with VAT/D-VAT & service tax registration for old years) from
concerned Government Authority.
3.4.5 Eligibility Criteria – Financial Capacity 3.4.5.1 Under this category, the Bidder
shall have to demonstrate the minimum Net Worth and positive cash flows (the
“Financial Capacity”):
a) Minimum Net worth of Rs.3,47,00,000/- (Rs Three Crores Forty Seven Lakh
Only) at the close of the preceding financial year.
b) Minimum average annual turnover of Rs.4,17,00,000/- Crores (Rs Four Crores
Seventeen Lakh Only) in the last three financial years preceding bid due date.
c) Positive Net Cash flows at the close of last three financial years prior to bid due
date. In case of a Consortium, the combined net worth of those Members, who have
and shall continue to have an equity share of at least 26% (twenty six per cent) jt-wp-1647-19.doc each in the SPV, should satisfy the above conditions of eligibility;
provided that each such Member shall hold 26% equity for a minimum period of 2
(two) years from the commercial operations date. For the purposes of this Tender,
Net Worth (the “Net Worth”) shall mean the sum of subscribed and paid up equity
and reserves from which shall be deducted the sum of revaluation reserves; miscellaneous expenditure not written off and reserves not available for distribution
to equity shareholders. The Net Cash Flow refers to the difference between the
company’s cash inflows and outflows in a given period. However, for avoidance of
doubt, the calculation of Net Cash Flow shall be the net sum of operating, financing
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and investing cash flows for the preceding financial year.
3.4.6 Financial Information for Purpose of evaluation 3.4.6.1 The Bidder shall provide a certificate from its statutory auditor specifying the Net Worth, financial turnover and cash flows of the Bidder
- The notice inviting tender was published on 2 January 2019 with pre-bid meeting date notified as 21 January 2019; postponed vide jt-wp-1647-19.doc corrigendum dated 19 January 2019 to 23 January 2019. By four corrigendums the date was extended to 18 March 2019.
- Four bidders: (i) Shri Sukhsagar Hospitality Services (Respondent No.2), (ii) Hotel Amarjit Pvt. Ltd. (the Petitioner), (iii) E-Factor Entertainment Pvt. Ltd. and (iv) Karishma Catering Services Pvt. Ltd. were held qualified for the bid by the consultants appointed by Respondent No.1. Their bids were in sum of 2,34,99,999/-, 1,53,84,950.13, 29,00,000/- and 18,00,000/- per annum respectively with 4% escalation per annum. Meaning thereby, these were the bid amounts to refurbish the premises and run a restaurant therefrom for a period of 15 years. The bid of the 2 nd respondent being the highest bid was accepted and the second highest bidder i.e. the Petitioner filed the above captioned petition pleading that along with the bid documents 2 nd respondent had submitted a registration certificate dated 31 May 2018 issued under Regulation 2.1.1 (5) of the Food Safety and Standards (Lincensing and Registration of Food Business) Regulations, 2011 promulgated under the Food Safety and Standards Act, 2006 which related to a petty manufacturer. For being engaged in the business of manufacture or sale of foods other than the petty jt-wp-1647-19.doc manufacturers, an FDA license was prescribed as per proforma to Regulation 2.1.4 (6) of the Regulations. It was pleaded that the 2 nd Respondent had justified qualifying conditions of the technical bid on the plea that it was running a restaurant-cum-food court at SBMT Education Campus, Nandi Hills, Dhamangaon, Igatpuri, District Nashik, Maharashtra. The area where-from said business was being conducted ad-measures 14739.345 sq.ft. as also a similar business from Boys and Girls Hostel at SVKM’s NMIMS Shirpur Campus, Dhule, Maharashtra. The area where said business was conducted was 23622 sq.ft. and 7938 sq.ft. for the Boys and Girls Hostel. The claim of the Petitioner is that the 2 nd Respondent did not submit documents showing qualification under Clause 3.4.4.3 which required a valid GST Registration Certificate as also Service Tax Registration Certificate concerning business from said premises. The grievance is that the 2 nd Respondent was permitted to later on furnish the documents, which according to the Petitioner was not permissible. Even with respect to the said documents, the contention advanced was that the GST Registration Certificate and Service Tax Registration Certificate did not indicate that the same related to the business of manufacture or sale of food from NMIMS Campus i.e. Narsee jt-wp-1647-19.doc Monjee Institute of Management Studies Campus for the restaurant-cum-food court attached to the Boys and Girls Hostels.
- The stand of the Respondents was that the conditions of the tender documents permitted the first Respondent to receive the documents from the parties after the bids were submitted.
- We propose to note the contentions in detail at seriatum and deal with the same seriatum.
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7. The first contention, as would be evident from herein-above recorded, centres on the interpretation of the clauses of the tender documents and we have already noted relevant sub-clauses of Clause 3.4. We further note relevant sub-clauses of Clause 2.6 and Clause 7.1 of the tender documents. They read as under:-
2.6 Verification and Disqualification
2.6.1 The Authority reserves the right to verify all
statements, information and documents submitted by the Bidder in response to the Tender or the Tender documents and the Bidder shall, when so required by the Authority, make available all such information, jt-wp-1647-19.doc evidence and documents as may be necessary for such verification. Any such verification or lack of such verification by the Authority shall not relieve the Bidder of its obligations or liabilities hereunder nor will it affect any rights of the Authority thereunder.
2.6.2 The Authority reserves the right to reject any Bid and appropriate the Bid Security if:
a. at any time, a material misrepresentation is made or uncovered, or b. the Bidder does not provide, within the time specified by the Authority, the supplemental information sought by them for evaluation of the Bid.
Such misrepresentation/improper response shall lead to the disqualification of the Bidder. If the Bidder is a Consortium, then the entire Consortium and each Member may be disqualified /rejected. If such disqualification/rejection occurs after the Bids have been opened and the Successful Bidder gets disqualified/rejected, then the Authority reserves the right to
(i) invite a Bidder amongst the qualified Bidders in order of their rank in accordance with Clause 3.5.
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(ii) take any such measure as may be deemed fit in the sole discretion of the Authority, including annulment of the Bidding Process.
2.12 Uploading of Bids xxx 2.12.4 The documents for each Submission as per Clause 2.12.3, should be uploaded by the Bidders in the form of PDF files on the e-tendering website during the online Bid Preparation stage.
7.1 The Bidding Process shall be governed by, and construed in accordance with, the laws of India and the State of Maharashtra and Court at Mumbai only shall have exclusive jurisdiction over all disputes arising under, pursuant to and/or in connection with the Tender documents and/or the Bidding Process.
7.2 The Authority, in its sole discretion and without incurring any obligation or liability or assigning any reason, reserves the right, at any time, to :
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- suspend, withdraw and/or cancel the Bidding Process and/or amend and/or supplement the Bidding Process or modify the dates or other terms and jt-wp-1647-19.doc conditions relating thereto;
- consult with any Bidder in order to receive clarification or further information;
- retain any information and/or evidence submitted to the Authority by, on behalf of, and/or in relation to any Bidder;
- independently verify, disqualify, reject and/or accept any and all submissions or other information and/or evidence submitted by or on behalf of any Bidder
- Shri Rakesh Tikku, learned Senior Advocate for the Petitioner emphasized on the word `shall’ in Clause 3.4.1 and 3.4.3.1 of the tender document; the former stipulating that for the purpose of qualifying the bidder shall have to demonstrate the minimum technical capacity stipulated under Clause 3.4.3 and Clause 3.4.4. Counsel stated that since financial capacity stipulated had been demonstrably met along with the bid documents, no grievance in said context was made. Further, as per Clause 3.4.3.1 it was stipulated that the bidder shall meet the eligibility criteria for technical qualification. The precise argument was that since the word ` shall’ was used in the two clauses referred to above, the inevitable conclusion was that the jt-wp-1647-19.doc bidder had to submit relevant documents evincing qualification being met. Since concededly the relevant certificates and licenses were produced later, learned Counsel rested the argument by stating that post last date by which bids had to be submitted, deficiencies could not be permitted to be made good.
- The argument in reply was that the tender conditions did not mandate relevant documents to be furnished along with bid offers. The phrase `shall have to demonstrate’ was interpreted by the respondents to mean that the intention was that the bidders would demonstrate their qualification after the technical bids were opened and were evaluated.
- Since we are construing a tender document and not a legislation, thus the words and phrases used in the tender documents would have to be understood in a manner which enhances the object of the tender. The object of the tender was to generate maximum revenue by the first Respondent by awarding the tender to qualified tenderers.
- Clause 3.4.3.1 needs to be interpreted keeping in view said principle. The clause requires certification in support of the qualification criteria to be submitted along with the details as per jt-wp-1647-19.doc Annexure-II and Annexure -III to Appendix – VI. The two Annexures to Appendix-VI read as under :-
Appendix VI: Annex II: Format of Technical Capacity for purpose of evaluation
Technical Capacity of the Bidder (Refer to Clause 3.4.3 and 3.4.4 of the Tender) [On
the letter head of the Single Entity/Members of Consortium] Sr. Entity claiming Eligible Brief Location Duration (Start Features of Project Cost Name of the No experience (Sole projects Activity and End date) the task/ (in Rs. Authority/
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b i d d e r / L e a d ( e x p e r i e n c e p e r f o r m e d a c t i v i t y C r o r e s ) C l i e n t / e n t i t y Member/Consortium) of operations by the project certifying and entity (Capacity/ proposed maintenance claiming staff/area) experience.
of a experience
Hospitality
agency)
Sole Bidder – [Name of the firm]
Lead Member – [Name of the Lead Member]
Consortium Member – [Name of the Consortium member other than the Lead Member] Appendix VI:
Annex III: Details of the Eligible Project Project Code: Member Code:
Item
Title of the project /Agency
Nature of the project
Entity for which the project was operated / maintained jt-wp-1647-19.doc Location
Date of commencement of project / contract Date of completion/commissioning Date
of start of operations and end of operations Key Features of the project (Capacity handled/staff/area/mode of revenue generation etc.) Equity shareholding (with period during which equity was held) Instructions:
- Bidders are expected to provide information of Eligible Project as per Clause 3.4 in this Annex. The project cited must comply with the eligibility criteria specified. Information provided in this section is intended to serve as a backup for information provided in the Bid. Bidders should also refer to the Instructions below.
- For a single entity Bidder, the Project Codes would be a, b, c, d etc. In case the Bidder is a Consortium then for Member 1, the Project Codes would be 1a, 1b, 1c, 1d etc., for Member 2 the Project Codes shall be 2a, 2b, 2c, 2d etc., and so on.
- Member Code shall indicate NA for Not Applicable in case of a single entity Bidder. For other Members, the following abbreviations are suggested viz. LM means Lead Member, and OM means Other Member.
- Particulars such as name, address and contract details of owner/Authority/Agency (i.e.
grantor, counter party to PPA, etc.) may be provided.
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- The date of commencement of the project must be mentioned.
- The date of commissioning of the project, upon completion, should be indicated.
- The equity shareholding of the Bidder, in the company owning the Eligible Project, held continuously during the period for which experience is claimed, needs to be given.
- Experience for any activity relating to an Eligible Project shall not be claimed by two or more Members of the Consortium. In other words, no double counting by a consortium in respect of the same experience shall be permitted in any manner whatsoever.
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- Certificate from the Bidder’s respective clients or statutory auditor must be furnished for each Eligible Project. In case of bidders that do not have statutory auditors, the auditors who audit the annual accounts of the Bidder/Member may provide the requisite certification.
- It may be noted that in the absence of any detail in the above certificate, the information would be considered inadequate and could lead to exclusion of the relevant project in computation of Technical Capacity.
- The clause does not mandate that documents in support of proof of qualifying the criteria have to be submitted. It simply states that certification in support of qualification has to be submitted along with details as per Annexure-II and Annexure-III to Appendix-VI. It is not in dispute that the certification by a Chartered Accountant certifying the qualifications being met was submitted by the 2 nd Respondent in the bid submission documents.
- In said context, Clause 2.6.1 of the tender documents also assumes importance for the reason it reserves the right in favour of first Respondent to call for evidence and documents as may be necessary to verify the certificates submitted by the tenderer. Para (b) of Clause 2.6.2 further guide that the first Respondent could, within the time specified, call upon the offerers to furnish supplementary information. Further, paras (b) and (c) of Clause 7.2 empower the first Respondent to not only seek clarification, but further information and further evidence.
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- Thus, we negate the first contention advanced by learned Senior Counsel for the Petitioner and hold that the first Respondent was justified in calling upon the tenderers to submit evidence in support of the certificates they had filed along with their bids.
- The second contention was that the 2 nd Respondent gave no proof of GST and Service Tax Registration pertaining to the business of rendering catering service at the Boys and Girls Hostels of Narsee Monjee Institute of Management Studies at NMIMS Shirpur Campus, Dhule, Maharashtra, in respect of which place of business the second Respondent was held to be qualified by the 1st
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Respondent.
- It is not in dispute that the 2nd Respondent submitted with its offer a certificate dated 25 March 2019 issued by Narsee Monjee Institute of Management Studies; a deemed University. It pertained to its Shirpur Campus at Mukesh Patel Technology Park, Babhulde, Bank of Tapi River, Mumbai-Agra Road, Shirpur 425 405. It is also not in dispute that pertaining to said place, a license as per form “C” prescribed under Regulation 2.1.4 (6) was produced by the 2 nd Respondent specifying that the license was for catering business conducted by the 2nd Respondent. The place of business was in jt-wp-1647-19.doc conformity with the certificate issued by Narsee Monjee Institute of Management Studies and the name and registered office address of the 2nd Respondent was also the same. Thus, it has to be held that the 2 nd Respondent furnished the necessary license under the Food Safety and Standards Act, 2006 and the Regulations framed thereunder.
- Pertaining to GST Registration Certificate and Service Tax Registration Certificate, it is not in dispute that the 2 nd Respondent furnished the GST Registration Certificate showing principal place of business at Plot No. 29, Everest Co-operative Housing Society, 103 Parsik Village, Sector 26, CBD Belapur, Navi Mumbai and pertaining to Service Tax, it furnished the Registration Certificate under the Maharashtra Value Added Tax Act, 2002 showing same address as the principal place of business with additional place of business being NMIMS University Campus at Shirpur.
- The GST Registration concededly only refers to the address where-from principal place of business was conducted. The certificate of registration under the Maharashtra Value Added Tax Act, 2002 discloses the address of the principal place of business and additional place of business. The additional place of business is the same where- from the 2nd Respondent sought to be qualified in terms of the jt-wp-1647-19.doc certificates issued by NMIMS University and license under the Food Safety Act. The Service Tax Rules 1994, vide Sub-rule (2) of Rule 4 require one address if the service provider has a centralized billing system and more than one address if there is no centralized billing or accounting system. This is at the option of the service provider. That answers the objection taken by learned Senior Counsel for the Petitioner. Pertaining to GST, the requirement is of one entity having GST Registration and this provides the answer to the alleged deficiencies in the GST Registration Certificate.
- On the scope of judicial interference in matters relating to commercial tenders, as distinct from where the State largesse such as lands, mining rights etc. are distributed by the State, in the decision reported as (2007) 14 SCC 517 Jagdish Mandal vs. State of Orissa & Ors., in paragraph 22 the Supreme Court observed as under:-
“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in jt-wp-1647-19.doc matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural
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justice stay at a distance. If the decision relating to award of contract is bona fide and
is in public interest, courts will not, in exercise of power of judicial review, interfere
even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and jt-wp-1647-19.doc millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
Or Whether the process adopted or decision made is so arbitrary and irrational that
the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”;
Or
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226.
Cas e s i n volving b l ackli s ting or impos i t i o n o f pe n al consequ e nc e s on a
tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant
of licenses, dealerships jt-wp-1647-19.doc and franchises) stand on a different footing
as they may require a higher degree of fairness in action.”
20. The same view was reiterated by the Supreme Court in the decision reported as (2018) 5 SCC 462 Municipal Corporation, Ujjain & Anr. vs. BVG India Limited & Ors. In paragraph 16 it was observed as under:-
“16. The State, its corporations, instrumentalities and agencies have a public duty to
be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary power under Article 226 with great caution and should exercise them only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.”
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- Suffice it to emphasize that the ratio of law is that in arriving at commercial decisions, the paramount consideration is the financial jt-wp-1647-19.doc gain by the the recipient of the work, and in the instant case it would be the maximum license fee offered. Of course, it has to be ensured that the person tendering the bid amount shows the ability to deliver the goods or service as per specification. That the State and its authorities can chose their own method to arrive at such decision. Further, the State and its authorities are also free to grant necessary relaxation for bona-fide reasons. No doubt, the State and its instrumentalities have a public duty to be fair to all concerned, but merely because some defect is found in the decision making process while exercising its discretionary power under Article 226 of the Constitution of India, the Court should not strike down the decision. The court should exercise the power to interfere only if it is in furtherance of public interest and not merely on the making out a legal point.
- We find no merit in the Writ Petition which is dismissed but without any order as to costs. NITIN JAMDAR, J. CHIEF JUSTICE
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