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2019 Supreme(P&H) 1235
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
KRISHNA MURARI, ARUN PALLI, JJ.
Ceigall Gawar - Appellant
Versus
State of Punjab and Others - Respondent
Civil Writ Petition No. 6473 of 2019
Decided On : 22-05-2019
Advocate Appeared:
Puneet Bali, Adv., Vibhav Jain, Adv., R.P. Saini, Adv., Satyam Aneja, Adv., Atul Nanda, Adv., Rameeza Hakeem, Adv., Amanat Chahal, Adv., Satish Singla, Adv., Akshay Bhan, Adv., Ashwinie Kumar Bansal, Adv., Alok Mittal, Adv., Baljinder Singh, Adv.
The tendering authority is bound to adhere to the norms, standards and procedures laid down in the bidding document and any arbitrary departure from such norms would not stand the test of law.
Headnote:
TENDER - REJECTION OF TECHNICAL BID - APPLICABILITY OF MORTH GUIDELINES - BID CAPACITY - REASONS FOR REJECTION - COMMUNICATION OF REASONS - SCOPE OF JUDICIAL REVIEW - PUBLIC INTEREST.
Fact of the Case:
Petitioner, a joint venture, challenged the rejection of its technical bid for a tender issued by respondent No.4, a Special Purpose Vehicle (SPV) incorporated for the implementation of Smart City Mission. The petitioner contended that the technical bid was wrongly rejected and it was illegally disqualified from participating in the further tender process. The petitioner argued that the bid capacity was wrongly calculated by including the value of work for which Letter of Award (LoA) was received but the Appointed Date was not issued by the competent authority, as per the MoRTH RFP guidelines.
Finding of the Court:
The court held that the MoRTH RFP guidelines were not applicable to the tender in question, as they were not incorporated in the RFB issued for the project. The court further held that the petitioner's bid capacity was correctly calculated in accordance with the RFB, and that the petitioner was not entitled to exclude the value of work for which LoA had been issued but the Appointed Date had not been declared. The court also held that the respondents were not required to communicate the reasons for rejecting the petitioner's technical bid, as the RFB empowered the authority to reject any bid without assigning any reasons.
Issues: 1. Whether the MoRTH RFP guidelines were applicable to the tender in question? 2. Whether the petitioner's bid capacity was correctly calculated? 3. Whether the respondents were required to communicate the reasons for rejecting the petitioner's technical bid?
Ratio Decidendi: 1. The MoRTH RFP guidelines were not applicable to the tender in question, as they were not incorporated in the RFB issued for the project. 2. The petitioner's bid capacity was correctly calculated in accordance with the RFB, and the petitioner was not entitled to exclude the value of work for which LoA had been issued but the Appointed Date had not been declared. 3. The respondents were not required to communicate the reasons for rejecting the petitioner's technical bid, as the RFB empowered the authority to reject any bid without assigning any reasons.
Final Decision: The petition was dismissed.
JUDGMENT :
KRISHNA MURARI, J.
1. Aggrieved by the rejection of its technical bid submitted in response to a notice dated 21.01.2019 issued by respondent No.4 calling for a bid for selection of a contractor for engineering, procurement, construction, testing, commissioning of approaches to Rail Over Bridge & Rail Under Bridge on Pakhowal Rail Road crossing and development of Rotary club as Smart street in Ludhiana City under Smart City Mission, the petitioner, a joint venture, has invoked the extra ordinary jurisdiction conferred upon this Court under Article 226 of the Constitution of India.
2. Petitioner is a joint venture comprising of M/s Ceigall India Ltd. and M/s Gawar Construction Ltd. having a share holding of 74% and 26%, respectively. This joint venture was entered between the respective companies on 20.02.2019 for the purpose of bidding a tender issued by respondent No.4-Ludhiana Smart City Ltd. (hereinafter referred to as 'LSCL'). It is a Special Purpose Vehicle (hereinafter referred to as 'SPV') established as a limited company under the Companies Act, 2013 incorporated as per the Mission Statement & Guidelines issued by the Ministry of Urban Development for the purpose of implementation of Smart City Mission. Under the Mission Statement & Guidelines issued by the Ministry of Urban Development, Government of India, the Smart City Mission has to be operated as Centrally Sponsored Scheme and the Central Government proposed financial support to the Mission to the extent of Rs.48,000/- crores over five years i.e. on an average of Rs.100/- crores per city per year for the cities selected as Smart Cities and equal amount on matching basis is required to be contributed by the State/Urban Local Bodies.
3. The Scheme further provides that the implementation of the Mission at the city level will be done by a SPV, created for the purpose to plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the smart city development project. Each smart city is proposed to have a SPV to be headed by a full time Chief Executive Officer (CEO) and to have nominees of Central Government, State Government and Urban Local Bodies on its board. The execution of the project may be done through joint venture subsidiaries, public private partnership (PPP), turnkey contracts, etc. suitably dovetailed with revenue streams. The SPV is a public limited company to be incorporated under the Companies Act, 2013 at the city-level in which the State/UT and Urban Local Bodies will be the promoters having 50-50 equity share holding.
4. In accordance with the Mission Statement Guidelines, respondent No.4 was incorporated as the SPV for Ludhiana City situated in Punjab. A Request For Bid (hereinafter referred to as 'RFB) was issued vide notice dated 21.01.2019 for the selection of contractors for engineering, procurement, construction, testing, commissioning of approaches to Rail Over Bridge & Rail Under Bridge on Pakhowal Rail Road crossing and development of Rotary club as Smart street in Ludhiana City including two years defect liability period.
5. Initially, the first notice of RFB was issued on 05.07.2018 prescribing 30th July as the last date for submission. However, since only a single bid was received in response to the notice in accordance with the Standard Operating Procedures of Department of Local Government, Punjab, providing that if there were less than three bids, the same were not to be opened in the first call of tender and accordingly the said tender was cancelled.
6. Another notice of RFB was issued on 07.08.2018. Till the last date of submission of bids, since only two bids were received, again in view of the Standard Operating Procedure, the same were not opened and the tender was cancelled.
7. For the third time, fresh RFB was issued inviting tenders on 20.09.2018. However, only one bid was submitted by M/s S
