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2022 Supreme(Bom) 794

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Dipankar Datta, M. S. Karnik, JJ.
Adani Ports and Special Economic Zone Limited. – Petitioner
Versus
The Board of Trustees of Jawaharlal Nehru Port Authority & Ors. – Respondents
Writ Petition (L) No. 14657 of 2022
Decided On : 27-06-2022

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Ravi Kadam, Mr. Vikram Nankani, Mr. Sumeet Nankani, Mr. Prashant Asher, Ms. Bulbul Rajpurohit, Mr. Shadab Jan, Mr. Siddharth Manek, M/s. Crawford Bayley and Co.
For the Respondent: Mr. Venkatesh Dhond, Mr. Saket Mone, Mr. Rohan Kelkar, Mr. Abhishek Salian, Mr. Devansh Shah, Vidhi Partners

Headnote:(A) Request For Qualification (RFQ) terms - Clause 2.2.8 - The petitioner disqualified for failing to disclose termination of contract by a public entity for breach - Previous termination by associate deemed relevant - The authority retains power to enforce eligibility criteria strictly - Rights to reject bids upheld. (Paras 29, 35, 65)

(B) Judicial review of tender processes - Courts must defer to the tendering authority's interpretations unless found to be arbitrary or irrational. (Paras 31, 32)

Facts of the case:
The petitioner sought to participate in a tender for upgrading a port terminal but was disqualified due to non-disclosure of a termination notice issued by a public entity against its associate for breach of contract. JNPT determined that the disqualification adhered to the eligibility criteria outlined in the RFQ.

Findings of Court:
The court found that the disqualification was justified based on a material misrepresentation regarding the petitioner and its associate's contractual history, affirming JNPT’s adherence to the RFQ.

Issues: The main question was whether JNPT could disqualify the petitioner for a termination notice against its associate without prior judicial endorsement.

Ratio Decidendi: The court affirmed that a clear interpretation of the RFQ clause permitted disqualification based on the existing contract termination irrespective of ongoing arbitral proceedings, emphasizing the integrity and reliability required from applicants.

Result: Writ petition dismissed; costs assessed at Rs. 5,00,000/-.

Table of Content
1. facts regarding the rfq process and petitioner's application. (Para 1 , 2 , 3 , 4 , 5)
2. relevant prior incidents affecting the petitioner's eligibility. (Para 6 , 7 , 8)
3. decision of jnpt based on undisclosed information. (Para 9 , 10)
4. challenge against jnpt's decision by the petitioner. (Para 11 , 12)
5. petitioner's arguments on disqualification and contractual interpretation. (Para 14 , 15 , 16 , 17 , 18)
6. analysis of jnpt's legal position regarding disqualification. (Para 20 , 21 , 22 , 23 , 24)
7. court's analysis of tender conditions and applicant's obligations. (Para 29 , 30 , 31 , 32 , 33)
8. principles governing judicial review in tender decisions. (Para 34 , 35 , 36 , 37 , 38)
9. court's adoption of deferential approach to tender authority's discretion. (Para 39 , 40 , 41 , 42 , 43)
10. analysis of relevant clauses affecting eligibility. (Para 44 , 45 , 46 , 47 , 48)
11. court's justification for considering additional grounds. (Para 56 , 57 , 58 , 59)
12. non-waivability of eligibility criteria and public interest considerations. (Para 60 , 61 , 62)
13. final decision of the court regarding the writ petition. (Para 70 , 71)

JUDGEMENT :

Facts:

1. For upgradation, operation, maintenance and transfer of Jawaharlal Nehru Port Container Terminal (JNPCT) through Public Private Partnership (PPP), Jawaharlal Nehru Port Trust (hereafter “JNPT”, for short) on 23rd August 2021 floated Request For Qualification (hereafter “RFQ”, for short) document under Tender No. JNP/TRAFFIC/MCB/PPP/2021/01. Applications were invited from interested parties to facilitate, inter alia, shortlisting of eligible bidders subject to national security clearance.

2. The bid process under the RFQ is a 2 (two) step process for selection of a bidder for awarding of the tender. The first stage involves a process to identify the qualified bidder and upon such identification, the second stage would commence with the participation in the bidding process by the qualified bidders comprising Request for Proposals (hereafter “RFP”, for short).

3. After the RFQ was issued, addenda dated 14th September 2021 and 19th October 2021 were issued by the JNPT. Inter alia, clause 2.2.6 of the RFQ was broken up into two parts and numbered 2.2.7 and 2.2.8.

4. The petitioner, as an interested applicant, submitted papers and documents with the JNPT on 1st November 2021 at 13.10 hours. Thereafter, inter alia, the petitioner was called upon by the JNPT to submit accepted addendum IV and V and declaration for legal matters. Draft declaration was provided to the petitioner by email dated 4th December 2021. In response thereto, the petitioner promptly provided duly signed addendum IV and V along with declaration for legal matters.

5. By a communication dated 24th December 2021, JNPT informed the petitioner that its application dated 1st November 2021 in response to the RFQ had qualified for submission of the RFP. Accordingly, the petitioner was requested to remit an amount of Rs.4,24,800/- towards the cost of the RFP within 7 (seven) working days. Such request was duly complied with by the petitioner.

6. There were certain prior incidents which were not disclosed by the petitioner in its application dated 1st November 2021. One of such incidents is extremely relevant for a decision on this writ petition, which we shall presently notice in very brief. Adani Vizag Coal Terminal Private Limited (hereafter “AVCTPL”, for short) is undoubtedly a subsidiary of the petitioner and an ‘associate’ within the meaning of the term as defined in the RFQ. It is a fact admitted by the petitioner that AVCTPL was in a contractual relationship with Vishakhapatnam Port Trust (hereafter “VPT”, for short) since 2011. During the pandemic, AVCTPL had intended termination of the concession agreement by invoking the force majeure clause. VPT did not agree, whereafter AVCTPL terminated the concession agreement on 21st October 2020 w.e.f. 19th January 2021. On 30th November 2020, the disputes and dif

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