hc151 M/S Sharma Transport Agency vs Coal India Limited And Others on 14 December, 2018

Calcutta High Court (Appellete Side)

M/S Sharma Transport Agency vs Coal India Limited And Others on 14 December, 2018

IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

APPELLATE SIDE

The Hon’ble JUSTICE SANJIB BANERJEE

And

The Hon’ble JUSTICE SUVRA GHOSH

FMA No. 2119 of 2018

With

CAN No. 3176 of 2018

UCC-STA (JOINT VENTURE) REPRESENTED BY

M/S SHARMA TRANSPORT AGENCY

-VERSUS-

COAL INDIA LIMITED AND OTHERS

For the Appellant: Mr Pratik Dhar, Sr Adv.,

Mr Srijib Chakraborty, Adv.,

Ms Urmila Chakraborty, Adv.,

Mr Sunny Nandy, Adv.,

Mr Samir Halder, Adv.,

Mr Souvik Das, Adv.

For the Eastern Coalfields Ltd: Mr Jayanta Kumar Mitra, Sr Adv.,

Mr Sagar Bandopadhyay, Adv.,

Mr Anuj Singh, Adv.,

Mr Pradyot Kumar Das, Adv.,

Mr Debabrata Das, Adv.

For the Respondent No.5: Mr S. N. Mookherjee, Sr Adv.,

Ms Sonal Shah, Adv., Mr Kushagra Shah, Adv., Ms Dhwani Mehta, Adv., Ms Archana Uppuluri, Adv. Hearing concluded on: December 10, 2018.

Date: December 14, 2018.

SANJIB BANERJEE, J. : –

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Eastern Coalfields Limited (ECL, for short) floated a tender, inviting bids for the removal of overburden, re-handling and extraction of coal over 11 years and two years of backfilling at Gaurangdih-Begunia in the Salanpur area. The writ petitioner appellant responded to the e-tender notice dated August 22, 2017 and the grievance of the writ petitioner joint venture in this appeal is that it has been wrongfully disqualified despite being identified as the L-1 bidder at the reverse auction that took place in October, 2017 after the bids were opened about a fortnight earlier.

• The writ petition was dismissed at the ad interim stage, inter alia, on the ground that the matters in issue were deliberated upon and discussed at meetings of the tender committee and the decision to disqualify the appellant was pursuant to an opinion appropriately obtained from a law officer of the Union. The single bench found no fault with the decision-making process and observed that no mala fides could be attributed to the action.

• It must be noticed at the outset that the challenge in the writ petition is founded on the legal principle of malice in law and no case of malice in fact has been made out. Since the writ petition stood dismissed at the receiving stage, upon the present appeal being filed, directions were issued for affidavits to be filed. The matter was assigned to this Bench after the final hearing in the appeal had commenced. Thus, at the appellate stage the scope of the hearing was larger than the exercise undertaken by the single bench.

• According to the appellant, in view of the lawyers’ strike in this court for all of March and April this year, the appellant was constrained to initially carry the challenge to the Delhi High Court where an affidavit had been filed by ECL in opposition to the original writ petition and the Delhi petition was also sought to be resisted on the ground of lack of territorial jurisdiction of the Delhi High Court. The petition was withdrawn with liberty to carry the grievance to the appropriate forum and, on rebound, a fresh petition came to be filed in this court which stood dismissed by the order impugned dated May 17, 2018.

• The primary grievance of the appellant is that the disqualification of the appellant is arbitrary and illegal, particularly in the light of the ambiguous wording of the relevant clause in the tender documents. The appellant asserts that if a particular clause in any tender document is capable of two meanings and a participant in such tender process acts on the basis of one of such possible interpretations, the bid cannot be disqualified as the benefit of the doubt in such a situation should always go to the offerer.

• The matter revolves round Clause 9A of the notice inviting tender, pertaining to eligibility criteria. The entirety of Clause 9A of the tender terms is set out:

“9. Eligibility Criteria:-

A. Work Experience: The bidder must have in its name or proportionate share as a member of JV/consortium, experience of having successfully executed (includes completed/ongoing) works of similar nature valuing 65% of the annualized estimated cost of the work put to tender (for a completion period over one year)/ 65% of the

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estimated cost of the work (for a completion up to one year) put to tender in any year

(consecutive 365 days) during last 7 (seven) years ending last day of month previous

to the one in which bid application are invited.

Definition of Similar works: – Excavation, loading and transportation of OB/Soil/Shale/Coal/minerals extracted by mechanized means.

For work experience bidders required to submit Satisfactory Work Completion Certificate issued by the employer against the Experience of similar work containing

all the information as sought on-line. Work order, BOQ and/or TDS may be sought

during clarification or along with deficient documents.

“Annualized Value” of the work shall be calculated as the “Estimated Cost/Period of

completion in days x 365″. For updation, cost of previous executed works shall be

given a simple weightage of 5% per year to bring them at current price level. The year

can be considered as suitable consecutive 365 days till the last day of month previous

to one in which bid has been invited. Updation will be considered for full or part of

the year considering 365 days in a year till the last day of month previous to one in

which bid has been invited.

In respect of the above eligibility criteria the bidders are required to furnish the following information on- line:

1. Start date of the year for which work experience of bidder is to be considered for eligibility.
2. Start date & end date of each qualifying experience (similar nature),
3. Work Order Number/Agreement Number of each experience
4. Name & Address of Employer/Work Order issuing authority of each experience.
5. Percentage (%) share of each experience (100% in case of an individual/proprietorship firm or a partner in a partnership firm and the actual % of share in case of a Joint Venture/Consortium)
6. Executed Value of work against each experience.

1. In case the bidder is a Joint Venture/Consortium, the work experience of any

one, two or three of the individual partners of JV/Consortium or the JV/Consortium

itself may be furnished as the work experience of the bidder.”

7. According to the appellant, the relevant clause did not specify that the value of the work experience of a bidder had to be expressed in terms of money after deducting the Goods and Services Tax (GST) component therefrom. The appellant claims that since it was not specified in the relevant clause that the GST component had to be excluded from the value of previous works of similar types undertaken by a bidder, there was no fault on the part of the appellant to construe the

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clause to imply that the gross value of the relevant previous works undertaken could be furnished for the purpose of meeting the benchmark indicated in the relevant clause. It is the further case of the appellant that, as a matter of fact, the appellant had merely indicated adequate figures to meet the benchmark level; though the appellant had more work experience in terms of value and the appellant perceived that it was unnecessary to indicate the additional figures since the eligibility criterion required only the benchmark to be met. Indeed, the appellant claims that the details pertaining to the additional value of work that the appellant could have cited were furnished to the Independent External Monitors (IEMs) of ECL as would be evident from the documents on record and the IEMs were of the opinion that such details of additional value of work ought to be taken into account to assess the work experience of the appellant. The appellant emphasises that the substance of the relevant clause required bidders with only a level of work experience to be regarded as worthy for the award of the contract and even if the appellant had quoted short, since the appellant otherwise possessed the qualification, the substance of the clause should have been appreciated by ECL before rejecting the appellant’s lowest bid and settling for a higher bid from the private respondent No.5 herein. It must be noticed at this stage and before even trying to understand the purport of Clause 9A of the tender documents or testing ECL’s decision- making process in such context, that the provision required work experience to be expressed on the basis of works conducted of similar nature of value of 65 per cent of the annualised estimated cost of work put to tender and, simultaneously, defined what previous works undertaken by a bidder would be regarded as works of similar nature.

• The appellant quoted the value of the appellant’s work experience, in terms of Clause 9A of the tender documents, to be about Rs.48 crore. Apparently, such figure was much in excess of the benchmark annualised value of about Rs.41.35 crore since the estimated cost of the work put to tender was about Rs.827 crore and the annualised value thereof was arrived at by dividing Rs.827 crore by the 13 years over which it was spread out. The problem with the appellant’s bid was that the figure of over Rs.47 crore quoted as the annualised value of the appellant’s work experience included not only the GST component involved in the previous works but also included about Rs.1.65 crore of work that did not answer to the description of “similar works” as defined in the second paragraph of Clause 9A of the tender documents. Thus, the tender committee of ECL reduced the annualised value figure of Rs.47.26 crore as submitted by the appellant by about Rs.1.65 crore since such quantum of work did not match the definition. As to the balance work experience expressed in terms of annualised value of about Rs.45 crore, which answered to the description of “similar works”, ECL deducted the GST component to arrive at the net value of work actually performed and the final figure qua the appellant came to about Rs.40.53 crore, or short by a paltry amount of about Rs.82 lakh.

• The appellant complains that ECL and its tender committee indulged in an exercise of splitting hair to invent a ground to disqualify the appellant when the appellant’s bid was the best and, to the knowledge of ECL, the appellant was experienced in the field of work and had additional experience in value in reserve that the appellant could have cited if the appellant was given an opportunity therefor. The appellant contends that the object of assessing a bid, or as to whether a bidder fulfills the eligibility criterian, is to go by the substance and not the form since it is beneficial to ECL to have a more experienced contractor and also a contractor who quotes a lower price for undertaking the

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work.

1. In such context, the appellant refers to Clause 15B of the tender documents and says that the various provisions thereunder permitted the tender committee of ECL to call for an explanation from the appellant or, at any rate, inform the appellant that the figures to be quoted in support of Clause 9A of the tender terms were to be net of GST, so that the details pertaining to the additional work experience, which the appellant had held back since the appellant perceived it to be unnecessary to be furnished, could have been relied upon to demonstrate that the appellant possessed the requisite experience that the tender terms demanded. According to the appellant, the quoting of the work experience in terms of annualised value by the appellant could be regarded as a deficiency within the meaning of the word used in Clause 15B of the tender documents and a clarification could be sought or an opportunity of ten days could have been afforded to the appellant to rectify its perceived mistake or supplement the figures and furnish additional certificates in support thereof. The appellant submits that in respect of one or two other areas, the tender committee of ECL resorted to the route envisaged by Clause 15B of the tender documents and sought clarifications and gave time to file additional documents and, in such a scenario, there was no reason to, in effect, remove the rug from under the appellant’s feet without allowing the appellant to right its apparent wrong.

1. It must be recorded that in course of the appellant’s opening at the hearing, the appellant confined its submission to this aspect of the perceived arbitrary conduct of ECL and boldly suggested that even if the disqualified component of about Rs.1.65 crore was reduced from its annualised value as quoted, in terms of Clause 9A of the tender documents the appellant could not have been found to have fallen short of the qualifying level. However, after ECL and the private respondent were heard and the appellant was called upon in rejoinder, the appellant attempted to make out a wider case than originally fashioned. Such enlarged challenge has not been permitted to be canvassed as the purpose of a rejoinder is to deal with the contrary arguments of the adversaries in response to the appellant’s opening and a new case cannot be permitted to be made out at such stage which will require opportunities to be given to the opponents to deal with the same all over again. It must also be put on record that when the appellant was in the process of enlarging the scope of its challenge in the rejoinder, counsel was specifically asked if this court had stopped the appellant short in the opening arguments; whereupon, counsel was fair to concede, that this court had not; and counsel perceived that there were grounds to challenge the decision-making process which had not been covered in the opening submission.

1. The only judgment cited by the appellant was in its rejoinder: a line from a single bench judgment of this court reported at (2014) 2 CHN 309 (Sri Niladri Ghosh v. Superintendent, ESI Hospital, Uluberia) to the effect that to sustain a decision of disqualification, the tender terms had to be strictly construed and every benefit of doubt given to the bidder.

1. ECL’s response is that it has acted strictly in accordance with the tender terms and the decision-making process has been above board. ECL indicates that the work experience of a bidder is converted into mathematical terms not only by looking at the quantum of similar works undertaken by the bidder during the past seven years, but also by assessing the extent of the bidder’s

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involvement in the work. ECL explains that in works of such mammoth proportions, two or more parties sometime join hands to form a consortium or a joint venture to undertake the work and when such is the case, the experience of each partner of the consortium or joint venture has to be assessed not only on the value of the work executed but also on the basis of the extent of such partner’s participation in the relevant work. On such basis, ECL seeks to justify the calculation which appears at page 28 of its affidavit which clearly found the appellant’s work experience converted in terms of annualised value to fall short of the benchmark by slightly over Rs.82 lakh.

1. As to the arbitrariness and illegality attributed by the appellant to ECL’s tender committee, ECL submits that the tender committee acted strictly in accordance with what was required of it under the tender documents and there was a degree of sympathetic aloofness which is the hall-mark of an appropriate decision-making process. ECL maintains that a plain reading of Clause 9A with the other clauses of the tender documents and even the immediate clauses following Clause 9A would lead to the inevitable inference that the annualised value of work experience had to be expressed net of GST and not on gross basis. In support of such contention, ECL first demonstrates that the estimated cost of the work put to tender was clearly expressed net of GST and no reasonable bidder could have expressed its work experience by including the GST component when the benchmark itself was net of GST. ECL next refers to the fourth paragraph of Clause 9A of the tender documents by which the annualised value was required to be calculated as the “Estimated Cost (divided by) Period of completion In days x 365”. ECL says that when an equation in specific terms indicates net value on one side, it is irrational to complete the equation with gross value on the other side. ECL also refers to the indexation factor recognised in the fifth paragraph of Clause 9A and submits that a meaningful reading of such paragraph would lead to the inescapable conclusion that the annualised value of work experience had to be expressed by excluding the GST figures. Sub- clause (vi) at the foot of Clause 9A of the tender documents has also been placed by ECL since the information required to be furnished was the executed value of work and not value of work simpliciter or gross value of work.

1. ECL explains that upon the tender committee noticing the flaw in the appellant’s bid in October, 2017 itself, the tender committee was of the opinion that the appellant’s bid could not be accepted and, in the noting sheet dated January 15, 2018, the tender committee observed as much. However, since the tender documents permitted the opinion of two named IEMs, the matter as to whether the annualised value in lieu of work experience could be accepted including the GST component was referred to such persons and the views of such IEMs were recorded in the noting sheet and a preliminary decision taken to reject the offer of the appellant and forfeit its earnest money deposit of Rs.50 lakh, subject to the scrutiny of the documents submitted online by the appellant. It is evident from the noting sheet of January 15, 2018 that the tender committee met on January 2, 2018 and discussed all issues. One of the issues was as follows:

“Although it is not mentioned in the NIT as to work experience should be considered without service tax but since the estimated cost put to tender is without service tax, experience value should be considered without service tax”

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1. However, by such time, following the reverse option, the appellant was firmly entrenched as the L-1 bidder since the appellant’s bid of about Rs.683.81 crore was approximately 17.33 per cent below the estimated cost of work put to tender of about Rs.827 crore. The noting sheet records that in the light of the further deliberations and clarifications that were found to be necessary, the bid validity period was to be extended by three months for all valid bidders and the opinion of the IEMs was to be sought “on whether to consider the work experience of a bidder for the instant NIT with/without service tax for the purpose of evaluation.”

1. The noting sheet then goes on to record the individual views of the two IEMs. The first of the IEMs regarded the matter to be a procedural issue and not a vigilance issue which could be referred to the IEMs, but observed that “actual work … does not change, whereas Service Tax/GST can change …” The other IEM concurred with the opinion of the first and added, for good measure, that ECL should “process the offers as per the NIT terms and conditions excluding tax components.” The decision of the tender committee recorded at the end of the noting sheet was that the bid of the appellant would stand rejected and its earnest deposit forfeited; and, the offer of the L-2 bidder (the private respondent herein) would be evaluated to assess whether such bidder was qualified to be awarded the contract.

1. ECL submits that it was much later that the IEMs rendered a contrary opinion. The relevant document containing the subsequent opinion of the two IEMs and signed on February 23, 2018 appears at page 316 of the stay petition used in this appeal. The document reveals that the two IEMs had examined “the documents related to NIT and met the representatives of M/s AMPL (the private respondent herein) & M/s UCC-STA (JV) (the appellant herein) on 23.02.2018.” It is also necessary to see the rest of the contents of the document in the light of which the previous opinion was requested to be “kept in abeyance”:

“M/s UCC – STA (JV) was the L – 1 bidder in the above tender but was not being considered for the work as the work experience was less than the required work experience. This was mainly because the L – 1 bidder had included service tax component when it declared its Work Experience. After the deduction of this service tax it was stated to be not meeting the requirement.

In the NIT, there is no mention that service tax should be/should not be included in

the work experience. Sri Sudhir Kumar, IEM mentioned that globally the practice is

to include the service tax and give the gross value of the work executed.

In view of the same, it would not be appropriate to reject the bid of L- 1 bidder M/s

UCC – STA (JV).

Further, what influences our mind was the contention of L-1 bidder that they had completed about Rs.7.00 Crore of additional work during the period under consideration by the time the bid was submitted but had not submitted the documents due to excessive, un-needed documentation. They were under the impression that work experience for about Rs.47 Crore was more than enough at that

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point of time and had not anticipated the issue of service tax. We are therefore of the opinion that the work may be allotted to L-1 bidder.”

1. ECL acknowledges that its IEMs may have exceeded their brief in reconsidering the matter when such reconsideration had not been invited and also in meeting representatives of L-1 and L-2, when the tender documents did not give the IEMs such authority. In addition, ECL accepts that the quantum of additional work experience of the appellant purported to be taken cognizance by the IEMs was completely contrary to the tender terms.

• It transpires that after the tender committee received the altered views of the IEMs, the tender committee may have been in a quandary and it referred the matter to its board; but the matter was passed down immediately to the tender committee which then proposed to obtain legal opinion on the issue. ECL is quick to point out that the tender committee arrived at a correct decision before referring the issue, as to whether work experience expressed as an annualised value should or should not incorporate the GST component, to the IEMs. The view taken by the IEMs initially ratified the opinion of the tender committee and, upon the contrary opinion being received from the IEMs, the tender committee was gracious in its approach to seek legal opinion rather than discard the altered view of the IEMs. Once the law officer of the Union confirmed the tender committee’s initial view, the appellant herein stood disqualified. It was thereafter that the private respondent’s bid was evaluated and found in order. There are murmurs by the appellant to the effect that the tender committee began the process of evaluating the L-2 bidder’s credentials even before a final decision as to the disqualification of the appellant was communicated to the appellant, but nothing turns on such straws that the appellant has sought to clutch at in its rejoinder.

• In support of ECL’s argument that a writ court ought not to sit an appeal over an executive decision, several judgments have been cited. The decision reported at (1994) 6 SCC 651 (Tata Cellular v. Union of India) has been brought to bear on the limited scope of judicial review that would apply to the exercise of contractual powers by government bodies. ECL exhorts that the object of the exercise is only to prevent arbitrariness or favouritism and even administrative discretion must be respected unless found to be perverse or patently unreasonable. A judgment reported at (1993) 1 SCC 445 (Sterling Computers Limited v. M/s M & N Publications Limited) has next been brought for the proposition that just as executive action must always be guided by public interest, once the court finds that the objective standards have been adhered to, the court would scarcely interfere with the decision-making process. Another judgment reported at (2007) 14 SCC 517 (Jagdish Mandal v. State of Orissa) has been placed by ECL. The judgment warns against judicial intervention in tender or in contractual matters in exercise of the power of judicial review unless the process adopted or decision made is found to be mala fide or intended to favour some one; or the process adopted or decision made is so arbitrary that no responsible authority acting reasonably and in accordance with law could have acted in such manner; or where public interest is affected. In similar vein, a judgment reported at (2016) 16 SCC 818 (Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited) has been brought. A recent decision reported at (2018) 5 SCC 462 (Municipal Corporation, Ujjain v. BVG India Limited) has been placed by ECL for the recognition therein that it is for an employer to decide which term of the NIT is essential and which other is ancillary and, as long as the same test is applied to all, the court should not step in.

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• The private respondent, which was the second lowest or L-2 bidder after the reverse auction, explains the procedure adopted for selecting the most suitable bidder. The private respondent submits that the modern practice, as in the case of the subject tender, is not to follow the old, two-stage process of first evaluating the eligibility criteria of all the bidders and then proceeding to open the commercial bids of the eligible bidders. Instead, the private respondent explains, the commercial bids are opened first and a reverse auction is conducted to give the bidders an opportunity to bring in more competitive bids upon being made aware of the lowest bid obtained. Once such reverse auction is completed – where a person cannot merely reduce his bid by one rupee and allow bidders to delay the process endlessly – the bidders are identified, in case of a purchase or works contract, as L-1, L-2 and so on; and, in case of a sale, as H-1, H-2 and so on. It is then, the private respondent continues, that the bid of L-1 is evaluated to ascertain whether it meets the eligibility criteria and its documents are in order. If the bid of L-1 is found to be in order, no other bid need be looked into and precious time is saved. It is only if L-1 is found to be ineligible or its bid not in conformity with the tender terms that L-1 is passed over and the bid of L-2 is taken up for evaluation.

• The private respondent next borrows from the reasons furnished by the first of the IEMs to submit that for the purpose of work experience expressed mathematically as annualised value, GST could never have been included in the value of work executed. As pointed out by the first of the IEMs of ECL, GST can never be included in the value of work done since rates of GST may differ from time to time. The private respondent says that since work experience over the last seven years was to be taken into consideration, a level-playing field could not have been put in place if GST were to be taken into consideration. The private respondent elaborates by referring to a chart as to the rate of GST or its equivalent over the last seven years, including the cess components thereon. The point is well made since it is possible that a particular bidder may have executed work in one of the last seven years which carried the lowest GST rate but another bidder could have done lesser work in another year which carried a higher GST rate and claim equal work experience.

• On such score, the private respondent refers to some of the provisions from the tender terms already placed by ECL, particularly the fifth paragraph of Clause 9A and the methodology for indexation recognised therein. The private respondent maintains that the wording of the paragraph is such that GST could never have come into consideration for the purpose of a bidder quoting its work experience in mathematical terms as annualised value. The private respondent next places from ECL’s affidavit filed in the Delhi proceedings, which has been included by the appellant as a part of its stay petition in this appeal. At paragraph 18 of the such affidavit of ECL, it is averred that the appellant herein is a joint venture between two stake-holders who have worked with ECL and have participated in tenders which contained “similar terms and conditions and the service tax component was never accounted for in the work done and … the Petitioner (the appellant herein) was duly aware of the prevailing practice …”. The private respondent refers to a noting sheet of ECL of May 25, 2016 containing the relevant tender committee’s recommendation for award of work in respect of Dabor Phase-III. In the relevant bid, a joint venture of RLA-STA emerged as L-1. The STA part of the RLA-STA JV is Sharma Transport Agency which is a part of the appellant JV that goes by the name of UCC-STA. The work experience particulars submitted by RLA-STA for the Dabor Phase-III project indicated the value of work previously executed by including the service tax

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component and also specified the value of work previously executed by excluding GST.

• Paragraph 4 (jj) of the private respondent’s affidavit used in the present proceedings is placed. There is a clear statement in the relevant paragraph to the effect that in an earlier tender floated by ECL, the appellant had submitted its work experience excluding service tax. The further assertion in the relevant paragraph is that “the Appellant was very well aware of the practice of the Respondent No.2 (ECL).” At page 100 of the private respondent’s said affidavit there is a copy of letter dated November 18, 2013 issued by ECL. The value of the work executed by Sharma Transport Agency with another partner is clearly spelt out in the letter net of service tax and other deductions while the service tax component is separately indicated. The private respondent also refers to the affidavit-in-reply used by the appellant herein to deal with the contents of the private respondent’s affidavit. Paragraph 4 (jj) of the private respondent’s affidavit is dealt with at paragraph 12 of the appellant’s reply and there is a bland sentence to the effect that there was no practice of exclusion of GST or service tax component in the work experience submitted in a bid and that the appellant was not aware of such practice.

• The private respondent claims that the appellant is guilty of trying to mislead the court despite it being evident from its past conduct that work experience had always to be expressed after excluding the GST component. The private respondent further relies on another noting sheet of ECL dated November 25, 2014 pertaining to a tender process in respect of Mohanpur expansion wherein the appellant joint venture had participated in conjunction with RLA as UCC-RLA-STA (JV). In the section in the said noting sheet pertaining to the verification of the tender documents of the L-1 bidder, which was UCC-RLA-STA (JV), the value of the work experience cited was in excess of Rs.24.16 crore against a requirement of Rs.17.68 crore. It is the submission of the private respondent that the argument of the appellant herein that it submitted only such details in the present tender which would meet the benchmark level is belied by the appellant’s practice of indicating its total work experience over the relevant period, irrespective of the fact that such work experience was much higher than the threshold set.

• The private respondent has referred to a judgment reported at (2008) 1 CHN (Cal) 567 (NICCO Corporation Limited v. Cable Corporation of India Limited) for its recognition as a settled legal principle that “when two interpretations of a clause of a notice of tender are possible and the tendering authority has adopted one of those, which is not an absurd view, a Writ Court should not interfere with the decision of the authority.” The private respondent has also relied on the Afcons Infrastructure Limited judgment earlier placed on behalf of ECL. A judgment reported at (2001) 2 SCC 451 (West Bengal State Electricity Board v. Patel Engineering Co. Limited) is next relied upon by the private respondent. In that case a computer error disqualified the lowest bidder and the Supreme Court found that it was an avoidable mistake which may not have crept in if the bidder had been diligent and it was not open to the court to ask the employer to overlook the mistake and act in derogation of the terms of the NIT even though the disqualified bid may have been the lowest.

• A judgment reported at (2013) 1 SCC 524 (Ratnagiri Gas and Power Private Limited v. RDS Projects Limited) has been brought by the private respondent for the enunciation therein as to what amounts to malice in law. The substance of the discussion, as will be evident from paragraphs 31

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and 32 of the report, is that malice in law or legal malice means something done without lawful exercise and not necessarily an act done from ill-feeling or spite.

• The private respondent concludes by submitting that if the decision or the decision-making process in such a case is tainted by arbitrariness or unreasonableness, a case of malice in law can be said to have been made out for the court’s interference; but when a possible view is taken after due deliberation, unless such view shocks the court and is perceived to be perverse, a writ court in exercise of its power of judicial review should refrain from interfering in what is essentially a commercial process.

• Finally, the private respondent has made a voluntary statement to the effect that it would match the bid of the appellant herein so that there was no loss to ECL or the exchequer.

• Apropos the private respondent’s charge that the appellant herein was aware of the practice that work experience had to be expressed net of GST, the appellant submits that it would be evident from the copy documents relied upon by the private respondent that ECL had sought clarifications from other coal companies as to the veracity of the work experience figures and even as to whether such figures included the GST component. The appellant also points out that some coal companies furnished figures indicating both the gross value of work executed including GST and the net value of work excluding GST and deductions and the documents relied upon by the private respondent referred to such certificates furnished by coal companies and not to the figures quoted in the bids by the appellant or the associate joint ventures in which the appellant or one of the appellant’s partners was a component.

• The appellant rests after referring to a subsequent NIT where the relevant clause expressly excludes GST being included as part of the figures pertaining to work experience. The appellant suggests that implicit in the incorporation of such express provision is the acknowledgement that the clause as it stood previously was capable of being interpreted otherwise and the appellant could not have been penalised for submitting its bid on the basis of a possible interpretation of the relevant clause.

• At first blush, the contention of the appellant appears attractive: since the benchmark for work experience was indicated in the tender terms and the essence of the clause was that only such bidders with the required level of experience would be eligible to be awarded the contract. However, fairness of procedure would demand that there was a level-playing field and it would be the responsibility of a diligent bidder to apply its mind and furnish necessary details to demonstrate that it possessed the requisite work experience. What falls for consideration in this case is whether the process of disqualifying the appellant on the basis of the relevant eligibility criterion was arbitrary or unreasonable.

• It is true that Clause 9A of the tender terms does not expressly specify that work experience in terms of annualised value has to be expressed net of GST. However, the fourth and fifth paragraphs of Clause 9A contains sufficient indication that work experience in terms of annualised value cannot include any GST component. Annualised value became a fixed figure once the estimated cost of the

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work put to tender was indicated in the tender terms. In other words, the e-tender notice of August 22, 2017, when it specified the estimated contract value to be Rs.827,12,89,500/-, the annualised value became a constant and was no longer a variable. Since the work was spread over 13 years (11 years of mining operations and two years of backfilling), the estimated cost of the work put to tender or Rs.8,27,12,89,500/- had to be divided by 4745 and the quotient multiplied by 365 in accordance with the formula indicated in Clause 9A. Of course, three more days ought to have been added to 4745 to account for the leap years, but the end-figure would show little difference from the figure of Rs.41.35 crore relied upon as the requisite annualised value of work experience by both ECL and the private respondent. More importantly, if work experience had to be expressed as 65 per cent of the annualised value during the last seven years and indexed in accordance with the fifth paragraph of Clause 9A, no reasonable person or bidder could have understood the relevant clause to allow for the inclusion of the GST component in the work experience figures. It was plain and obvious. If then a bidder had included the GST component and had quoted a work experience figure much higher than the benchmark, merely because the GST component was included in the total work experience figure, it could not have been a ground for the disqualification of the bid unless the discounted figure, after excluding the GST component, fell below the prescribed benchmark. It is for such purpose that ECL undertook the exercise to first ascertain what components of the work experience figures cited by the appellant had to be discarded since such components did not fall within the definition of “similar works” itemised in the second paragraph of Clause 9A of the tender terms. Once such part of the exercise was completed, ECL next embarked on the process of ascertaining whether the reduced figure was net of GST. Upon ECL discovering otherwise, the GST component was subtracted from the total work experience figure furnished by the appellant and the net value was arrived at; which fell short of the Rs.41.35 crore threshold set for qualification.

• The decision-making process and the decision were appropriate and accurate and the appellant can have no manner or grievance in such regard. If the appellant had quoted a figure of Rs.54 crore instead of a figure of about Rs.47.26 crore as it cited as its total work experience, as long as certificates in support of the larger figure were furnished, it was incumbent on ECL to work out the arithmetic and discover if the benchmark level was attained. But upon the appellant not furnishing any higher figures and, consequently, not furnishing adequate documents in support thereof, ECL could not have been expected to ask for and obtain additional work experience details when the bidder had not furnished the same. Indeed, if ECL had adopted such course of action, the other bidders could have justifiably protested the same and set it at naught.

• To boot, the instructions at the foot of Clause 9A require full particulars to be furnished in respect of the relevant eligibility criterion and sub-clause (vi) thereof stipulates that the executed value of work against each experience has to be furnished. Even to a layman, the expression “executed value of work” cannot be seen to be synonymous with “gross value of work” as the appellant would have the court believe. Thus, the fundamental ground canvassed by the appellant does not appeal and it may not be necessary to notice the other ancillary grounds cited.

• So that the appellant does not feel hard done by in the present adjudication, Clause 15B and the appellant’s argument on such score is also taken into consideration. The substance of Clause 15B is captured in its opening sentence and provides that if the tender committee finds “some deficiency in

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uploaded documents by L-1 bidder then the same will be specified online by Evaluator clearly indicating the omissions/shortcomings in the uploaded documents and … allowing ten days … time for online re-submission by L-1 bidder.” The appellant makes out that the shortfall in its work experience figures should have been regarded as a deficiency within the meaning of Clause 15B of the tender terms and an opportunity of ten days should have been afforded to it for re-submission of the particulars. Such contention is clearly exceptionable since it is evident from the tender terms that bids and documents are treated differently and Clause 15B does not permit bids to be altered but only permits the deficiency in the uploaded documents to be made good. In this context, Clause 14 of the tender terms is of some relevance as the distinction is found there and in Clause 15A. The relevant parts of Clauses 14 and 15A are set out:

“14. Evaluation by System: The e-Procurement System will evaluate the Technical

bids automatically on the basis of relevant data provided by bidder through a form in

an objective and structured manner while submitting bid. If the parameter given by

bidder in objective and structured manner does not confirm to require eligibility criteria as specified in the tender document then the bid will be automatically rejected by the system. …”

“15. Evaluation by Evaluator:

A. After opening of Auction Bid, the documents submitted by L-1 bidder in cover I as enlisted in the NIT will be downloaded by the Evaluator and shall be put up to the Tender Committee. The Tender Committee will examine the uploaded documents against information/declarations Furnished by the L1 bidder online. If it confirms (conforms) to all of the information/declarations furnished by the bidder online and do not change the eligibility status of the bidder then the bidder will be considered eligible for award of Contract.”

38. It is evident, therefore, that if the certificates or uploaded documents furnished in

support of any information or declaration provided in the online bid did not match

such information or declaration, the deficiency could be invited to be corrected

within the stipulated time. Clause 15B cannot be read or understood to imply that

even the online bid or the information or declaration contained therein could be permitted to be altered at a later stage. Thus, a bidder was obliged to indicate the relevant figures pertaining to work experience in the online bid which could then not be altered; though the certificates in support of such figure, if found deficient, could be called for re-submission.

39. The appellant has not been able to demonstrate from the tender terms or otherwise that the IEMs of ECL had any authority to meet the representative of any bidder or receive documents which were at variance with the figures quoted by the bidder in its online bid. Clearly, the IEMs in this case acted way beyond their authority in unilaterally revising their previous opinion on the basis of meetings with the representatives of some of the bidders and on perusing documents that had neither been uploaded nor the value whereof had been incorporated in the information or

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declaration furnished in the online bid. In such a scenario, it was open to the tender committee to disregard the subsequent, uninvited interference in the process by the IEMs. Yet, in deference to the status accorded to the IEMs in the tender terms, the tender committee did not take upon itself the burden of discarding the subsequent view of the IEMs but referred the matter for legal opinion. The procedure adopted can not only not be faulted but appears to have been exemplary.

• It is also evident from the previous bid of the appellant along with an additional partner in respect of the Mohanpur expansion contract that the appellant had furnished its total work experience figure which was above the benchmark level indicated in the relevant NIT. Whatever may have been the reason for the appellant to not have furnished the additional figures or the matching certificates in the present case, need not be gone into. If at all, it was a mistake on the part of the appellant and the decision-making process adopted by ECL cannot be challenged to overcome or obfuscate what may have been the appellant’s action for its disqualification.

• Tender matters are not decided by running a fine tooth-comb over the process to discover which ‘i’ has not been dotted or which ‘t’ not crossed. The writ court always maintains a dispassionate distance from the process and, in course of the adjudication, does not imagine itself being in the position of the tender committee or as evaluators of the bids. It is only if the writ court finds the decision or the decision-making process to be utterly illegal or patently irrational or totally unreasonable that it would seek to intervene. If an executive authority has acted within its jurisdiction, has adopted a reasonable procedure and has rendered a cogent decision at the end of the process: the writ court will ask for nothing more. Oftentimes, as in the instant case, the question is whether the issue that has been carried by a failed bidder to court was deliberated upon by the executive functionary or government body in a fair manner and a possible view expressed thereon. There is no unfairness or arbitrariness that the appellant has been able to demonstrate in the decision-making process or in the procedure adopted by the tender committee in respect of the relevant issue. This being the position, there is no room for interference in the present case.

• It may only be observed in conclusion that the private respondent herein remains bound by the unequivocal offer made without any invitation by the court that it would reduce its offer to match the appellant’s. As to ECL’s decision to forfeit the earnest deposit of the appellant, it is hoped that the matter is reconsidered since there may not have been any deliberate attempt by the appellant to furnish false figures to embellish its bid.

• The appeal fails for the additional reasons as indicated herein to supplement the reasons furnished in the order impugned dated May 17, 2018. FMA 2119 of 2018 and CAN 3176 of 2018 are dismissed.

• There will no order as to costs.

• Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

(Sanjib Banerjee, J.) I agree.

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(Suvra Ghosh, J.)

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