IMPORTANT POINTS
If a condition in NIT is held to be non-essential, others who did not participate in bidding due to such condition should be given opportunity.
When a format is prescribed, there is no reason not to adhere to it. Party issuing tender “has the right to punctiliously and rigidly” enforce terms of the tender.
Employer’s view on essentiality of a condition should be respected.
Court, in judicial review, cannot re-write conditions of NIT.
If a particular format of the bank guarantee is prescribed, then a bidder ought to submit the bank guarantee in that particular format only and not in any other format.

Headnote:(a) Government contract – Bidding – NIT – Essential and non-essential or ancillary conditions and privilege-of-participation principle and the level playing field concept – If a condition is held to be non-essential, others who did not participate in bidding due to such condition should be given opportunity. (Para 36)
       (b) Interpretation – Notice inviting tender (NIT) – NIT requiring bidders to be computer literate by requiring their digital signature – Those having these qualities could only access bank guarantee format – 9 out of 11 bidders accessing correct form – Appellant not submitting correct form – Secondly going by the language of NIT, deciphering correct form of GTC not difficult – Appellant submitting incorrect form – In case of any doubt, appellant ought to have sought clarification for the principal – Not doing so – Insisting that prescribed format of bank guarantee not essential part of NIT – Contention that its bank guarantee was stricter than that prescribed irrelevant – When a format is prescribed, there is no reason not to adhere to it – Party issuing tender “has the right to punctiliously and rigidly” enforce terms of the tender. (Para 37, 38)
       (1979) 3 SCC 489; (1990) 2 SCC 488 – Relied upon
       1990 All. LJ 1140 – Referred
       (c) Government contract – Acceptance or rejection of bid – Decision making process – Should not be irrational or biased – Acceptance or rejection of a bid or a bidder should be looked at from the point of view of the bidder as well as the employer – Employer’s view on essentiality of a condition should be respected – Instantly, decision to reject appellant’s bid held lawful and not unsound. (Para 44, 47, 48)
       (1994) 6 SCC 651; (2007) 14 SCC 517; (1979) 3 SCC 489 – Relied upon
       (2013) 10 SCC 95; (1991) 3 SCC 273; 2016 (7) SCALE 425; (2012) 8 SCC 216 – Referred
       (d) Government contract – Judicial review – Court deciding which condition of NIT is essential and non-essential – Would amount to re-write the arrangement – Not permissible. (Para 49)
       (e) Interpretation – NIT – If plain meaning of a condition of NIT is not adhered to and every bidder is allowed to interpret it in its own way – It would be very difficult to decide the tender and lead to avoidable litigation. (Para 50, 51)
       (f) Interpretation – Principle “Where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden” – Applies to bid documents also – It follows that if a particular format of the bank guarantee is prescribed, then a bidder ought to submit the bank guarantee in that particular format only and not in any other format. (Para 52)
       AIR 1936 PC 253 – Relied upon
       (g) Government contract – Unnecessary litigation – NIT for work of Rs. 2000 crores – Over one year lost in deciding whether to accept bank guarantee given by appellant – Sad state of affairs. (Para 54)
       Facts of the case:
       The first appeal is that of the Central Coalfields Limited. The first respondent in the appeal is SLL–SML a Joint Venture Consortium whose bid in response to a Notice Inviting Tender issued by the Central Coalfields Limited was rejected.
       The second appeal is by PLR-RPL-SMASL a Joint Venture whose bid was the lowest in response to the same Notice Inviting Tender issued by the Central Coalfields Limited and that bid was accepted.
       The High Court set aside the rejection of the bid of SLL-SML by Central Coalfields Limited.
       Finding of the Court:
       Court in judicial review cannot re-write conditions of NIT.
       Result: Appeals allowed.

JUDGMENT

Madan B. Lokur, J.

1. The first appeal is that of the Central Coalfields Limited. The first respondent in the appeal is SLL–SML a Joint Venture Consortium whose bid in response to a Notice Inviting Tender issued by the Central Coalfields Limited was rejected.

2. The second appeal is by PLR-RPL-SMASL a Joint Venture whose bid was the lowest in response to the same Notice Inviting Tender issued by the Central Coalfields Limited and that bid was accepted.

3. Both the Central Coalfields Limited and PLR-RPL-SMASL are aggrieved by judgment and order dated 26th October, 2015 passed by the Division Bench of the Jharkhand High Court whereby the rejection of the bid of SLL-SML by Central Coalfields Limited was set aside.

4. The question for our consideration is generally whether furnishing a bank guarantee in the format prescribed in the bid documents is an essential requirement in the bidding process of the Central Coalfields Limited and specifically whether a bid not accompanied by a bank guarantee in the format prescribed in the bid documents of the Central Coalfields Limited could be treated as non-responsive in view of Clause 15.2 of the General Terms and Conditions governing the bidding process. The answer to the general and the specific question is in the affirmative.

The facts

5. On 5th August, 2015 the Central Coalfields Limited (for short CCL) issued a Notification Inviting Tenders (for short NIT).

The name of the work was: “Out sourcing for Overburden Removal (1050.00 L. CuM) and Coal Extraction (975.00 L. Te) and transportation by deploying surface miner at Ashok OCP, Piparwar Area for a period of 8 years.”

6. The notice mentioned that for details of the NIT and online submissions, an interested person could visit https://eps.buyjunction.in.

7. On a visit to the aforesaid website, details of the e-tender were made available including further details of the work. It was stated that tenders could be submitted by experienced contractors having a Digital Signature Certificate issued from any agency authorized by the Controller of Certifying Authority, Government of India. This is being mentioned because anybody having a Digital Signature Certificate cannot be computer illiterate.

8. Clause 3 of the e-tender carried the heading “Deposit of EMD” and the relevant portion of this reads as follows:

“Earnest Money can be deposited in the form of Demand Draft (DD)/Banker’s Cheque (BC)/Banker’s payorder (BPO) from any scheduled Bank drawn in favour of “Central Coalfields Limited” payable at “Ranchi”.

EMD can also be deposited in the form of irrevocable Bank Guarantee (BG) from any scheduled Bank in the format given in the bid document. Bank guarantee issued by outstation bank shall be operative at their local branch i.e. at Ranchi. The validity of such BG should be minimum 90 days beyond the validity of the bid. BG shall be acceptable only when value of Earnest money (EMD) exceeds Rs. 5.00 Lakhs.”

9. What is of significance from the above is that the earnest money deposit was required to be made in the form of an irrevocable bank guarantee from any scheduled bank “in the format given in the bid document”.

10. Clause 4 of the e-tender mentioned that for a clarification of the bid, a bidder may seek clarification on-line from the Service Provider M/s mjunction services limited whose address, contact person and email were given in the document.

11. The General Terms and Conditions (for short GTC) for the NIT were also made available to a visitor and prospective bidder on the website. The GTC bore the heading “Governing Hiring of Equipment for removal of Overburden, Extraction of Coal, Transportation and loading in Areas of Central Coalfields Limited”.

12. In paragraph 11 of the GTC it was specifically mentioned that the bid security of earnest money was required to be deposited in the appropriate form and in paragraph 15.2 thereof it was specifically stated that any bid not accompanied by an acceptable bid security/earnest money d

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2016 Supreme(SC) 643

Cases Referred (9)