Tender – Rejection of bid on ground of omission and suppression of relevant fact – Public Works Department of the State issued a Notice Inviting Tender (NIT) for the construction of an Elevated Corridor (Flyover) of a length of 7.473 Km – Eleven Companies bid for the said project including UPSBC, ‘R’ Builders and ‘Ra’ Construction Co. – The State rejected bid of UPSBC of sum of Rs. 306.27 crores on the ground that the bidder suppressed information required under paragraph 13 of Appendix-I-A and clause 7(b) of Annex-I of NIT – Hence, the bid of UPSBC was considered to be non-responsive – Likewise, ‘Ra’ Construction Co. bid for Rs. 293.25 crores did not fulfil the criteria under clause 2.2.2.2(ii) of the NIT for ‘one similar work’ of 25% of the estimated project cost and was, therefore, considered non-responsive – One ‘R’ builders had bid for Rs.315.80 crores – The High Court in the Writ Petition filed by UPSBC, held that as on date of submission of the technical bid, since no investigation was pending within the meaning of clause 7(b) of Annex-I, there was no suppression of facts, despite the fact that an FIR had been lodged against it in respect of a bridge constructed by it earlier and the bridge had collapsed killing & injuring people – The High Court directed to issue a Letter of Intent in favour of UPSBC – As far as writ petition filed by ‘Ra’ Construction Co. is concerned, the High Court referred to clause 2.2.2.2(ii) of the NIT and held that there was nothing wrong with the State’s rejection – On appeal, held : The UPSBC is right when it refers and relies on the format which had to be strictly complied with and going by the literal reading of the format for providing declaration, which only required a disclosure of pending investigations under clause 7(b) of Annex-I of the NIT – However, the paragraph 13 of Appendix-I-A must be read together with paragraph 11 thereof, which required the bidder to certify that in regard to matters other than security and integrity of the country, the bidder was not convicted by a Court of law or indicted – Clearly, in the instant case, though the investigation was no longer pending and though there was no conviction by a Court of law, UPSBC was certainly ‘indicted’, in that, a charge-sheet was filed against it relatable to the FIR – So, there is an omission of a most relevant fact and suppression of the same fact, namely that an FIR was lodged against UPSBC in respect of the construction of a bridge by it – As a result, UPSBC is disqualified – As far as ‘Ra’ Construction is concerned, it will not be open for a Constitutional Court to substitute their view of the view of the tendering authority, when it reads clause 2.2.2.2(ii) in the manner that was done – Therefore, the State directed to issue Letter of Intent to ‘R’ Builders as far as present tender is concerned at the same financial bid as that of UPSBC. Disposing of the appeals, the Court,
HELD: 1. It is clear that UPSBC is right when it refers to and relies upon the Caratel Infotech judgment for the proposition that where there is a format which had to be strictly complied with, his client was justified in going by the literal reading of the aforesaid format, which only required a disclosure of pending investigations under clause 7(b) of Annex I of the N.I.T. However, as has correctly been pointed out by the Additional Advocate General and ‘R’ Builders that clause 7(b) of Annex I, which is in terms similar to paragraph 13 of Appendix IA, must be read together with paragraph 11 thereof, requires the bidder to certify that in regard to matters other than security and integrity of the country, the bidder has not been convicted by a court of law or indicted. Clearly in the facts of the present case, though the investigation is no longer pending and though there is no conviction by a court of law, UPSBC has certainly been “indicted”, in that, a charge sheet has been filed against it relatable to the FIR dated 15.05.2018 in which a trial is pending, though stayed by the High Court. Also, Additional Advocate General is correct in stating that “fraudulent practice”, as defined in clause 4.3(b) of the N.I.T., would include an omission of facts or disclosure of incomplete facts in order to influence the bidding process. In the facts of the present case, there is clearly an omission of a most relevant fact and suppression of the same fact, namely that an FIR had been lodged against UPSBC in respect of the construction of a bridge by it, which had collapsed, and in which a charge sheet had been lodged. [Para 19][841-H; 842-A-D]
2. Adverting to UPSBC’s argument that it has been nonsuited only on application of clause 7(b) of Annex I, a reference to the Technical Evaluation Committee’s order dated 13.03.2020 declaring UPSBC’s bid non-responsive shows that it also refers to Appendix IA comprising the technical bid and paragraph 13 thereof, in particular. This Court has already held that paragraph
13 has to be read along with paragraph 11, which clearly states that a person who is “indicted” for a criminal offence has to disclose the factum of indictment. A technical objection based on the rejection order cannot be allowed to prevail in the face of the suppression of a most material fact, that is of an FIR pertaining to the construction of a bridge by UPSBC, which has collapsed. [Para 21][843-A-C]
3. Coming to the public interest factor, and the fact that the financial bid of UPSBC is about Rs. 9 crores less than that of ‘R’ Builders, the sting has been removed inasmuch as ‘R’ Builders readily accepts that if, as a result of UPSBC being disqualified, his client is to be awarded the tender, he will do so at the same amount as the financial bid of UPSBC. For all these reasons, the impugned judgment dated 15.06.2020 (in writ petition filed by UPSBC) is set aside. [Para 22][843-C-D]
4. Insofar as ‘Ra’ Construction Co. is concerned, it will not be open for a constitutional court, in accordance with all the Supreme Court decisions, to substitute their view of the view of the tendering authority, when it reads clause 2.2.2.2(ii) in the manner that has been done. Suffice it to say that the expression “at least one similar work” could possibly mean only one such work, namely, the construction of one such bridge and not two such bridges, even if two bridges were to be constructed under the same tender document. It is not possible, therefore, for this Court to say that the construction of the aforesaid clause by the tendering authority is an impossible one rendering it perverse. Also, ‘R’ Builder’s argument, though made here for the first time, does support the State of Madhya Pradesh, in that the two road over bridges that have been constructed under the agreement between DFCCIL and ‘Ra’ Construction Co. have a span of only 2380 meters taken together, which is certainly less than 50% of
7.473 kilometers. For these reasons, this Court dismisses ‘Ra’ Construction Co.’s SLP and uphold the judgment dated 02.07.2020 (in writ petition filed by ‘Ra’ Construction Co.) and the review judgment dated 04.08.2020. [Para 23][843-D-G] Tata Cellular v. Union of India (1994) 6 SCC 651 : [1994] 2 Suppl. SCR 122; Jagdish Mandal v. State of Orissa (2007) 14 SCC 517 : [ 2006] 10 Suppl.
SCR 606; Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) (2016) 8 SCC 622 : [2016] 4 SCR 890; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd, (2016) 16 SCC 818 : [2016] 3
SCR 551 – relied on.
Vinubhai Haribhai Malaviya v. State of Gujarat (2019)
17 SCC 1; Bank of India v. K. Mohandas (2009) 5 SCC
313 : [2009] 5 SCR 118 – inapplicable.
Secy., Deptt. of Home Secy., A.P. v. B. Chinnam Naidu (2005) 2 SCC 746 : [2005] 1 SCR 1147 – distinguished.
Caretel Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd. (2019) 14 SCC 81 : [2019] 6 SCR 950; Bank of India v. K. Mohandas (2009) 5 SCC 313 : [2009] 5 SCR 118; Montecarlo Ltd. v. NTPC Ltd. (2016) 15 SCC 272 : [2016] 8 SCR 224 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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