Ganesh Movers & Logistics (P) Ltd vs Indian Oil Corporation Limited & Ors

Mr. Kalyan Bandyopadhyay, ld. Sr. Advocate, Mr. Sirsanya Bandyopadhyay, Mr. Soham Kumar Roy, Ms. Deboleena Ghosh, Mr. Rahul Kumar Singh, Mr. Tapajit Das. ...For the petitioner. Mr. Jishnu Chowdhury, Mr. Ratnesh Kumar Rai, Ms. Vipra Garg, Mr. Ankan Rai. ...For the petitioner (in WPA 19842 of 2021)

Mr. Sankar Sarkar. ...For the respondent no.1.

Mr. Jaydip Kar, ld. Sr. Advocate, Mr. Amit Kumar Nag, Mr. M. Roy. ..For the IOCL. Mr. Pantu Deb Roy, Mr. Aashutosh Bhattacharyya. ...For the respondent no.7.

Hearing Concluded On : 15th December, 2021 2

Judgment On : 20th December, 2021

Rajasekhar Mantha, J.

W.P.A. 19365 of 2021

Facts:

1. By a notice inviting tender sometime in May-June, 2021, the Indian

Oil Corporation invited bids for road transportation of bulk petroleum

products by Bottom Loading Tank Trucks from Jharsuguda Terminal.

The writ petitioner submitted its bid on 25 th July, 2021 offering 15

Tank Trucks.

2. In September, 2021 the IOCL sent diverse techno-commercial queries

to and sought clarifications from the petitioner, inter alia, asking for

documents like NOC for Tank Trucks already deployed for the benefit

for IOC, PESO Certificate and a Board Resolutions. The petitioner

supplied the said documents.

3. By an e-mail dated 2nd November, 2021 the petitioner was informed

that its technical bid was accepted by the Technical Evaluation

Committee. In a tender summary report published on 4 th November,

2021, it was notified that the petitioner's technical bid was accepted

and was placed at serial No. 15. By a further communication dated

9th November, 2021 the petitioner was asked to participate in the 3

financial part of the bid i.e. reverse auction for the Jharsuguda

Terminal.

4. The petitioner duly participated in the said reverse auction on 12 th

November, 2021 and was awaiting a communication from the

respondents. On the 19th November, 2021 the petitioner came to

know that letters of acceptance have been sent to many transporters.

The petitioner wrote to the respondents to ascertain its status. By a

communication dated 22nd November, 2021 the petitioner was

informed as follows:- "your tender was rejected during financial

evaluation for the reason due to invalid RC book, 2 TTs got

disqualified vide PQC. So, you had only 12 in LOT-I. Since there are

more bidders with 15 TTs in LOT-I. No TTs would be allocated to the

writ petitioner". In the financial bid however the petitioner was ranked

L-I along with other bidders.

Arguments:

5. Mr. Kalyan Bandyopadhyay, learned Senior Advocate appearing for

the petitioner submits that the rejection of the petitioner's bid is

unfair, arbitrary and illegal and tainted with mala fides. The petitioner

had offered 15 TTs of which two were new vehicles. The said two new

vehicles, had permanent Registration Numbers being No. OD15T0149

and OD15T0297 issued by the RTO, Sambalpur, Odisha. 4

6. At the time when bids were submitted the Smart Cards being the

formal registration document with electronic data, was not received

and was available only on the 14 th and 17th August, 2021 respectfully.

The Registration Certificate produced along with the tender

constituted sufficient compliance of the pre-qualification conditions

(PQC) of the NIT. The respondent was, therefore, not justified in

holding that Registration Certificate/RC book of the 2 TTs were not

furnished along with the tender.

7. It is next argued that the petitioner's technical bid was already

accepted by the respondents on 2nd November, 2021. It is only

thereafter that the petitioner was allowed to participate in the

financial part. Therefore, the rejection of the petitioner's technical bid

from LOT-I category after technically disqualifying 2 TTs was illegal

and arbitrary.

8. It is submitted that the two tank trucks disqualified by the IOC, had

valid registration in terms of Section 41 (6) of the Motor Vehicles Act,

1988. Hence, the disqualification of the said TTs for alleged absence

RC book is contrary to law unfair and arbitrary.

9. It is argued that the actions of the Indian Oil Corporation are bad for

waiver, acquiescence and estoppel. The rejection of the petitioner's

technical bid, after approving the same and allowing him to

participate in the financial part of the tender process is for collateral

purposes. It is aimed at depriving the petitioner of the benefits of

LOT-I thereby allowing unlawful gain to other tenderers. 5

10. In support of his argument Mr. Bandyopadhyay relied upon the

following judgments. B. Yellaswamy Vs. South Central Railway,

rep. its General Manager. Secunderabad & Ors. reported in 2007

SCC OnLine AP 29 at Paragraph 10 thereof, Reliance Energy

Limited & Anr. Vs. Maharashtra State Road Development

Corporation Limited & Ors. reported in (2007) 8 SCC 1 at

Paragraphs 38 and 39, Krishna Bahadur Vs. Purna Theatre & Ors.

reported in (2004) 8 SCC 229 at Paragraph 10 thereof, Vice

Chairman & Managing Director, CIDCM Ltd. & Anr. Vs. Shishir

Reality Pvt. Ltd. & Ors. reported in 2021 SCC OnLine SC 1141 at

Paragraph 56 and IRCTC Ltd. & Anr. Vs. Doshion Veolia Water

Solutions Pvt. Ltd. & Ors. reported in (2010) 13 SCC 364 at

Paragraph 37 thereof.

11. Mr. Jaydip Kar, Senior Advocate, appearing for the IOC, would place

reliance on Clause 1.3 under the heading PQC (Pre Qualification

Criteria) of the NIT Sub-Clause 3 thereof is set out hereinbelow.

Sr. Description Unit Requirement

3 Valid RTO legible copies need to be registration submitted. TTs offered and PESO without documents license for shall not be considered ready TTs for evaluation. offered 6

12. Reference is then made to the document submitted by the writ

petitioner issued by the Odisha Motor Vehicles Department for TT

being No. OD15T0149 registered on 20 th July, 2021 that had an

endorsement at the bottom to the following effect "the document

cannot be used an M.V. document in the vehicle". It is submitted that

since the two TTs did not have Registration Certificate, to entitle the

vehicle to ply on the roads, the certificate produced by the petitioner

was invalid. The certificate would only be valid upon production of RC

book therewith.

13. Mr. Kar thereafter places reliance upon the last paragraph of Clause

1.3 under PQC that is also set out hereinbelow.

"Notwithstanding any other condition/provision in the tender documents, bidders are required to submit complete documents pertaining to PQC along with their offer. Failure to meet the PQC will render the bid to be summarily rejected. IOC reserves the right to complete the evaluation based on the details furnished by the bidder, with or without seeking any additional supporting documents/clarifications."

14. It is, therefore, submitted that the IOC reserved its right to examine

and reject any bid even after the technical qualification even in

course of evaluation financial part of the bid.

15. It is stated that the entire bid of the petitioner was not rejected. The

petitioner has only been disqualified from participating under LOT-I

for falling short of 2 valid Tank Trucks. It was eligible to participate in

LOT-II. The petitioner cannot be prejudiced and hence not entitled to

relief in this proceeding.

7

16. It is submitted that the fulfilment or otherwise of technical

qualifications in a tendering process must be left to the exclusive

discretion of the employer. A writ Court should not impose its own

view on the employer where two views are possible. It is argued that

there is no flaw or infirmity pointed out by the petitioner in the

decision making process. The scope of enquiry under Article 226 is

restricted only to such decision making process. Hence the decision

of the IOC to reject the petitioner's bid should not be interfered with.

Reliance is placed on the decisions of the Hon'ble Supreme Court in

Silppi Constructions Contractors Vs. UOI & Anr. reported in (2020)

16 SCC 489 at Paragraph 20 thereof and Afcons Infrastructure

Limited Vs. Nagpur Metro Rail Corporation Limited & Anr.

reported in (2016) 16 SCC 818 at Paragraphs 13 and 15 thereof.

Mr. Kar also tried to distinguish the judgments cited by Mr.

Bandyopadhyay. It is argued that the ratio in the decisions cited have

no manner of the application in the facts of the instant case.

17. Counsel for the RTO Sambalpur, Orissa has produced a certificate

dated 4th December, 2021 and annexing therewith documents

indicating that the registration documents of the 2 TTs are true and

correct.

WPA 19842 of 2021

Facts:

8

18. WPA 19842 of 2021 (M/s. Ajay Pal Singh Vs. Indian Oil Corporation

Limited & Ors.) has been filed in respect of the same NIT. The facts

are similar. The petitioner's bid was also similarly rejected as the

Ganesh bid. The only difference is that the technical queries

addressed to the writ petitioner herein were that the partnership deed

of the petitioner dated 3 rd December, 2014 is not registered. The

names of all partners have not been mentioned in the tender forms.

The compliance certificate of laws of other countries sharing the land

border of India has not been furnished. The petitioner did furnish the

documents and it was communicated that he was also technically

qualified. He was allowed to participate in the financial part of the

bid. All 15 TTs of the petitioner were, however, disqualified after

participating in the financial bid for not satisfying the PQC. The

registration document was deemed insufficient since no Smart Card

was produced. The IOC relied upon the endorsement at the bottom of

the produced registration certificate which is as follows:-

"Please Note: This Document is NOT VALID unless accompanied with a valid SMART CARD Certificate of Registration."

Arguments:

19. Mr. Jishnu Chowdhury, Counsel for the petitioner adopted the

submissions of Mr. Kalyan Bandyopadhyay and added as follows. The

15 TTs quoted in his client's tender were already in use for the IOC 9

after verification of all documents. It is, therefore, ridiculous to

disqualify his client for absence of Smart Card along with tender.

20. The IOCL was entitled to ask for documents and did so three times in

course of the technical evaluation. The respondents could easily have

asked for copies of Smart Card. They did not do so. Therefore, the

presumption is that the IOC was satisfied with the registration

documents supplied by his client along with the bid. It is also argued

that the IOCL is estopped from asking for the said Smart Card, not

having asked for the same in the technical evaluation. No Objection

Certificates were obtained from the respondents for offering the same

Tank Trucks that are already being used by the IOCL. It is, therefore,

irrational for the respondents to reject his client's bid for absence of

Smart Card. In reply thereto Mr. Amit Kumar Nag, Counsel appearing

for the IOCL, adopted the submissions of Mr. Jaydip Kar.

Analysis:

21. This Court has carefully considered the rival contentions and the

arguments of the counsel for respective parties. A plain reading of

Clause 1.3.3 of the PQC, set out hereinabove would indicate that the

IOC required submission of documents only showing a valid RTO

registration. The petitioner Ganesh has submitted the Registration 10

Certificates of both the vehicles which contained a permanent serial

registration number. The requirement of submission of the RC book

and/or Registration Certificate, Smart Card cannot be read into the

said Clause.

22. It is an admitted position that the delivery of Smart Card takes a

month or two after issuance of the Registration Certificate. The

Registration Certificate produced by the petitioner constitutes

sufficient compliance of Section 41 of the M.V. Act, 1988. The

rejection of the petitioner's bid for alleged non-production of

registration Smart Card is illegal, arbitrary and not sustainable in law.

23. In the supplementary affidavit used by the petitioner the copies of the

Smart Card have been produced. The date and registration number of

the Smart Card is the same as the date and registration of the

certificate produced by the petitioner. The endorsement at the bottom

of the Registration Certificate that it is "not valid in a motor vehicle

without Smart Card", cannot invalidate the petitioner's tender. In any

event, the petitioner has received the Smart Card on 14 th and 17th

August, 2021, after the submission of tender and much before the

certification of valid technical bid and as on the date of the

participation in the financial process. The petitioner has, therefore,

been penalised by the respondent for no fault on its part.

24. The respondents raised queries and obtained documents, inter alia, in

the nature of Board resolution, PESO Certificates and other

documents, after submission of the bid. The said documents appear to 11

be as basic and fundamental as the registration document of a

vehicle. The respondents did not feel the need to ask the petitioner

Ajay Pal Singh, to produce the Smart Card in course of such queries.

It can, therefore, be presumed that the respondents have never found

any deficiency in the Registration Certificate or documents in respect

of any of the TTs produced by either petitioners. The disqualification

of the petitioner for absence of Registration Certificate Smart Card is,

therefore, indeed arbitrary and illegal.

25. Since after raising all queries the petitioners were informed that they

are technically qualified and deemed eligible for participating in the

financial bidding process. The petitioners, in fact, also participated in

the reverse auction being the financial bidding process. The

petitioners were L-I along with 37 other bidders. The 2 new TTs of the

petitioner Ganesh would be eligible for priority allotment and

engagement as it has been specified in the NIT that newer vehicles

would be given priority for deployment. The rejection of the petitioner's

bid thereafter would unlawfully benefit other tenderers. The Court's

mind is not free from doubt that the petitioner's bid was rejected for

collateral purposes.

26. As held in paragraph 10 of the B. Yellaswamy decision (supra), the

respondents should have clearly specified the requirement of RC book

and/or Smart Card in addition to Registration Certificate in the NIT. 12

27. The observation of the Hon'ble Supreme Court in the Reliance

Energy Decision (supra) at Paragraphs 38 and 39, must be applied in

the facts of the case. The said paragraphs are set out hereinbelow.

"38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This "legal certainty" is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of "level playing field".

39. In Reliance Airport Developers (P) Ltd. v. Airports Authority of India [(2006) 10 SCC 1] the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision- maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms. Those norms may be legal norms or accounting norms. As long as the norms are clear and properly understood by the decision-maker and the bidders and other stakeholders, uncertainty and thereby breach of the rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear. As stated above "certainty" is an important aspect of the rule of law. In Reliance Airport Developers [(2006) 10 SCC 1] the scoring system formed part of the evaluation process. The object of that system was to provide identification of factors, allocation of marks of each of the said factors and giving of marks at different stages. Objectivity was thus provided."

28. The principles of waiver, acquiescence and estoppel must also be

applied against the respondents. The RC book and/or Smart Card, in 13

the case of Ganesh and Smart Card is only in respect of M/s. Ajay Pal

Singh were not found wanting during technical evaluation. After

communicating to them that they are technically qualified and

allowing them to participate in the financial bidding process, the

respondents are barred by the principle of waiver and acquiescence to

deny technical eligibility. Estoppel also applies against the

respondents.

29. Useful reference may be made to Paragraph 37 of the decision of the

Supreme Court in the IRCTC Ltd. decision (supra). The relevant

paragraph of the said decision is set out hereinbelow.

"37. These observations made by this Court in W.B. SEB v. Patel Engg. Co. Ltd. [(2001) 2 SCC 451] rather come to the aid of Ion Exchange in this case. Since Irctc did not clearly stipulate in the instructions to bidders or in the special terms and conditions or in the prescribed price schedule or in any other part of the tender documents that a tenderer will not offer any discount on the prices quoted by him and if any such discount is offered the tender will be rejected, the offer of discount on the price made by Ion Exchange cannot be treated to be in breach of the essential terms or conditions of the tender documents. To hold that the State or its agencies can reject a tender for breach of a term or condition in the tender document, which is not explicit in the tender documents, is to give room to the State or its agencies to arbitrarily reject tenders even where the clear terms or conditions of the tender documents are complied with."

30. Even assuming for the sake of argument that the requirement of a

Smart Card or Registration Certificate could be read into Clause 1.3.3

of the NIT, the non-furnishing thereof cannot amount to violation of

any essential condition of NIT in the facts of the case. 14

31. Both the petitioners have produced Registration Certificates. The

Smart Card of the vehicles of M/s. Ganesh was already available in

August, 2021. This is only a formality which cannot invalidate the

entire bid. Similarly, in the case of M/s. Ajay Pal Singh, the

respondents already had the registration documents and Smart cards

of the TTs since they were being used by the IOCL. The NOCs issued

by the IOCL confirms the same. Reference in this regard is made the

Paragraph 56 in the case of Vice Chairman & Managing Director,

CIDCM Ltd. decision (supra). Paragraph 56 of the said decision is

set out below.

"56. The third aspect which needs to be considered is the legality of sub-division of plots and subsequent transfer of rights. It has been contended that the terms of the tender and letter of allotment do not allow such transfer. However, on perusal of the aforementioned Clause 16 of the General Terms and Conditions and the corresponding Condition 21 of the allotment letter, it is clearly revealed that the allottee was permitted to transfer or assign his rights, interests or benefits with prior written permission of the Corporation and on payment of such transfer charges as may be prescribed by the Corporation. Both the clause and the condition have further stipulated that such permission could be granted only after the agreed lease premium has been paid in full and after execution of agreement to lease. In the present case, agreed lease premium was paid in full. However, agreement to lease was made on the very next day, i.e. on 30.03.2010. In our view, merely because the agreement to lease was executed on the very next day, the assignment and transfer would not be invalidated. Such breach cannot in itself be termed as a fundamental to annul the tender, especially after receiving the lease amount, CIDCO cannot question the subsequent transfer. We can only state that such clause can be construed as a warranty alone rather than a condition, in light of the circumstances. The CIDCO, being a public body, had a duty to act fairly. Having acquiescence of the facts and allowing such transfer, they ought not to have taken such a hyper-technical view on contractual interpretation. In light of the aforesaid reasoning, we do not find any substantial reason sought to be adduced by the CIDCO to differ from the High Court."

15 32. Mr. Jaydip Kar, by reference to Silppi decision (supra) at Paragraph

20 thereof, would argue that the view as to whether the RC

requirement should be read into Clause 1.3.3, is a subjective decision.

An element of subjectivity must be read into every administrative

decision. If two views are possible the Court should not impose the

other view in the instant case. The argument may not at all be

applicable in the facts. The interpretation of this Court and counsel

for the petitioners is the view adopted by the respondents, from the

very inception of the NIT. The view is that a Registration Certificate

would be sufficient compliance of Clause 1.3.3. This resulted in the

certification that the petitioners' bids were technically qualified. The

said view continued all the way until the petitioners were allowed to

participate in the financial bidding process and were ranked L-I in

LOT No. 1. It is only thereafter that the IOC purported to take another

view of the interpretation of Clause 1.3.3. Apart from the absence of

bona fides for such contrary view, this Court is satisfied that at no

point of time were there, two views as regards interpretation of Clause

1.3.3. There is in fact no second view in the facts of the case.

33. The observations of Supreme Court in paragraphs 13 and 14 in the

Afcons decision (supra) are also inapplicable reasons for hereinabove.

Conslusion:

16

34. For the reasons stated hereinabove the writ petitions succeed. The

impugned orders dated 22nd November, 2021 in respect of both writ

petitioners shall stand set aside. The tender summary report and the

order disqualifying M/s. Ajay Pal Singh and M/s. Ganesh Movers and

Logistics (P) Ltd. at Sl. No. 15 and Sl. No. 26 shall stand quashed and

set aside. The two writ petitioners shall be entitled to be selected

under the tender.

35. The writ petitions shall stand disposed of.

36. There shall be no order as to costs.

37. All parties are directed to act on a server copy of this order duly

downloaded from the official website of this Court.

(Rajasekhar Mantha, J.)