Municipal Corporation, Ujjain & Anr. vs Bvg India Limited and Ors.

Tenders – Judicial review of administrative decisions – Held: The judicial review of administrative action is intended to prevent arbitrariness – The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound – If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; if the process adopted or decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference u/Art.226 – Constitution of India – Art.226.

Tenders – Whether under the scope of judicial review, the High Court could ordinarily question the judgment of the expert consultant on the issue of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis of non-performance of the bidder – Held: Under the scope of judicial review, the High Court could not ordinarily interfere with the judgment of the expert consultant on the issues of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis of nonperformance of the bidder – The power of judicial review can be exercised only if there is unreasonableness, irrationality or arbitrariness and in order to avoid bias and mala fides. Tenders – Whether a bidder who submits a bid expressly declaring that it is submitting the same independently and without any partners, consortium or joint venture can rely upon the technical qualifications of any third party for its qualification – Held: No.

Tenders – Whether the High Court can independently evaluate the technical bids and financial bids of the parties, as an appellate authority, for coming to the conclusion – Held: It is not open to the Court to independently evaluate the technical bids and financial bids of the parties as an appellate authority for coming to its conclusion inasmuch as unless the thresholds of mala fides, intention to favour someone or bias, arbitrariness, irrationality or perversity are met, where a decision is taken purely on public interest, the Court ordinarily should exercise judicial restraint. Allowing the appeals, the Court

HELD: 1. Evaluating tenders and awarding contracts are essentially commercial transactions/contracts. If the decision relating to award of contract is in public interest, the Courts will not, in exercise of the power of judicial review, interfere even if a procedural aberration or error in awarding the contract is made out. The power of judicial review will not be permitted to be invoked to protect private interest by ignoring public interest. Attempts by unsuccessful bidders with an artificial grievance and to get the purpose defeated by approaching the Court on some technical and procedural lapses, should be handled by Courts with firmness. The exercise of the power of judicial review should be avoided if there is no irrationality or arbitrariness. In the matter on hand, there is no illegality, arbitrariness, irrationality or unreasonableness on the part of the expert body while in action. So also, there is no bias or mala fides either on the part of the corporation or on the part of the technical expert while taking the decision. Moreover, the decision is taken keeping in mind the public interest and the work experience of the successful bidder. [Para 35] [889-C-F]

2. Global Waste Management Cell Private Limited (GWMC) secured the highest score, i.e., 84.36, it emerged as the overall eligible bidder for awarding the project as per the terms of NIT. Consequently, it was declared L 1 as per the terms of the NIT. As a decision was qualitatively arrived at by the technical expert respondent no. 2, the High Court need not have gone into the merits of such decision as an appellate authority, especially when there was no bias or mala fide. [Para 39] [892-AC]

3. The bidder was required to set out details of any other company/firm involved as a consortium member to which respondent no.1 replied in the negative, which means no other company/firm was involved as a consortium member with respondent no.1 in the process in question. In other words, respondent no.1 submitted the bid on its own unaccompanied by any of the consortium member. Despite the same, respondent no.1 furnished the experience certificate of a third party. Therefore, reliance placed by the respondent no.1 on the purported experience certificate issued in the name of third party would not come to the help of the respondent no.1 to show its work experience. The PCMC Certificate neither shows three years’ experience of respondent no.1 nor that respondent no.1 was carrying out garbage/waste collection of more than 300 MT per day. Since respondent no.1 has categorically mentioned in its bid under the column “basic information about tenderer” that no other company (either joint venture or consortium) is involved with it, respondent no.1 could not have relied upon the purported experience certificate issued in the name of third party. Other certificates submitted by the respondent no.1 also did not satisfy the eligibility requirement. [Para 40] [892-C-H]

4. Moreover, the certificate dated 21.4.2015 relied upon by the High Court in the impugned judgment was not part of the original bid document submitted by respondent no.1 and it was submitted before the High Court for the first time in the writ petition. Since such certificate was not part of the original bid document, the High Court was not correct in relying upon such certificate produced by respondent no.1 for the first time before it. The Courts will not permit any of the participants in the tender process to alter or supplement the bid document. In the absence of any document evidencing the experience in the field in question in favour of respondent no.1, the appellants are justified in contending that the High Court is not correct in increasing the marks from 5 to 7 under the head of number of years of experience and expertise. So also, the High Court was not correct in increasing the marks from 10 to 15 so far as the quantity of municipal solid waste handled per day through door to door collection is concerned. [Para 41] [893-A-C]

5.1 The High Court was also not justified in increasing the marks for responsiveness from 5 to 10. The High Court could not have increased the marks for responsiveness as respondent no.1 had suppressed the fact that it had received show cause notices from BBMP and other municipal corporations. [Para 42][893-F-G]

5.2 It was clearly stated in the NIT that the tenderer was required to reveal the show-cause notices against it. Despite the specific column pertaining to the same in the bid document, respondent no.1 had left the said column blank. Once there is a specific clause requiring the mentioning of the show-cause notices for the breach of contract, it was incumbent upon the tenderer to provide accurate information. The respondent no.1 had suppressed 73 show cause notices issued against it by BBMP and District Panchayat, Dadra and Nagar Haveli, Silvasa in respect of the work relating to solid waste management. Despite suppression by the respondent no.1, the technical expert from its own sources gathered information and found that 73 show cause notices were issued by the BBMP and others against respondent no.1, which reveal that respondent no.1 had not shown due diligence in the work of door to door collection of solid waste. Hence, the conclusion reached by the High Court that it was not open for the technical committee to suo motu take into consideration the afore-mentioned 73 show cause notices issued against the respondent no.1 while evaluating the technical bid is not correct. The due diligence and experience of the expert consultant ought to have been appreciated by the High Court keeping in mind the object to which bids were invited. 73 show cause notices issued to respondent no.1 establish that respondent no.1 did not have a good track record and therefore such notices were necessarily taken into consideration by the technical expert. In all fairness, respondent no.1 ought to have disclosed these factors in its bid. In view of the same, the High Court was not justified in increasing the marks for responsiveness from 5 to

10. [Para 44] [894-D-E; 895-A-E]

6. The authority concerned is in the best position to find out the best person or the best quotation depending on the work to be entrusted under the contract. If a bidder had faced a number of show-cause notices from various municipal corporations in the matter of non-performance of door to door collection of garbage etc., the Court cannot compel the authority to choose such undeserving person/company to carry out the work. Ultimately, the public interest must be safeguarded. The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously and effectively. The public would also be interested in the quality of work undertaken. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work. Lethargy or tardiness in collecting door to door garbage on a day-to-day basis would definitely lead to increase collection of garbage on the roads and public properties, which leads to health hazards and also reduces the cleanliness of the city. Since the public is directly interested and would be affected if the work entrusted is not carried out appropriately, and as the technical expert has found that respondent no.1 would not be a suitable company to be entrusted the work inasmuch as it had faced 73 show-cause notices from different Municipal Corporations, the High Court could not have interfered with the decision taken by the authority. The High Court has ignored the element of public interest involved in the matter. [Para 48] [896-G-H; 897-A-D] Karnataka State Industrial Investment & Development Corporation Limited v. Cavalet India Ltd. & Ors. (2005)

4 SCC 456 : [2005] 2 SCR 1183 ; B.S.N. Joshi and Sons Ltd. v. Nair Coal Services Ltd. (2006) 11 SCC

548 : [2006] 8 Suppl. SCR 11 ; Delhi Science Forum v. Union of India (1996) 2 SCC 405 : [1996] 2 SCR 767; Montecarlo Ltd. v. NTPC Ltd. (2016) 15 SCC 272 : [2016] 8 SCR 224 – relied on.

Tata Cellular v. Union of India (1994) 6 SCC

651 : [1994] 2 Suppl. SCR 122; Master Merin Services (P) Ltd. v. Metcalfe & Hodgkinson (2005) 6 SCC 138 : [2005] 3 SCR 666 ; Sterling Computers Ltd. v. M & N Publications Ltd. (1993) 1 SCC 445 : [1993] 1 SCR

81 ; Raunaq International Limited v. I.V.R. Construction Limited (1999) 1 SCC 492 : [1998] 3 Suppl. SCR 421 ; Air India Limited v. Cochin International Airport Limited (2000) 2 SCC 617 : [2000] 1 SCR 505 ; U.P. Financial Corporation. v. Naini Oxygen & Acetylene Gas Ltd. (1995) 2 SCC 754 : [1993] 2 SCR 149 ; U.P. Financial Corporation v. Gem Cap (India) Pvt. Ltd. & Ors. (1993)

2 SCC 299 : [1993] 2 SCR 149 ; Karnataka State Financial Corporation v. Micro Cast Rubber & Allied Products (P) Ltd. & Ors. (1996) 5 SCC 65 : [1996] 3 Suppl. SCR 40 ; Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) (2016) 8 SCC 622 : [2016] 4 SCR 890 ; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. and Ors. (2016) 16 SCC

818 ; Jagdish Mandal v. State of Orissa and Ors. (2007)

14 SCC 517 : [2006] 10 Suppl. SCR 606; Meerut Development Authority v. Assn. of Management Studies (2009) 6 SCC 171 ; Trilochan Mishra Etc v. State of Orissa & Ors (1971) 3 SCC 153 ; Ramana Dayaram Shetty v. International Airport Authority of India (1979) 3 SCC 489 : [1979] 3 SCR 1014 – referred to.