Tenders – Essential tender condition – Non-compliance of – Tender called by the appellant on 06.01.2018 for balance earthwork to be done in a canal – Tender was ultimately replied to by three persons – Clause 2.22 of the tender conditions inter alia stated that bank guarantee that was to be furnished had to be valid up to one month after the defect liability period, which was for a period of 40 months – Bank guarantee furnished by Respondent No.2 was initially furnished only for a period of six months – Bids were opened on 06.04.2018 – One day later, Respondent No. 2 sought to make up this deficiency by adding a period of 34 months to the bank guarantee – Bid of Respondent No. 2 being the lowest bid was accepted – Appellant condoned the initial bank guarantee given by Respondent No. 2 for an admittedly incorrect period of 6 months – Propriety of – Held: Clause 2.35 made it clear that a substantially responsive bid was one which conforms to all terms, conditions and specifications without any material deviation – Inter alia, a material deviation is one which limits, in any substantial way, or is inconsistent with the bidding documents or the employer’s rights or bidder’s obligations under the Contract – A bank guarantee, for a period of six months and not for a period of 40 months, would not only be directly inconsistent with the bidding documents but would also be contrary to the employers’ right to a bank guarantee for a longer period – Since a material deviation from the terms and conditions of the tender document was made by Respondent No. 2, such bid would have to be considered as not substantially responsive and ought to have been rejected by the employer – When an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance – Any such condonation, as has been done, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by constitutional court – Judgment of the High Court, insofar as para 8 is concerned, set aside – Work now be performed by the Respondent No. 1 (one of the bidder) at the bid of Rs. 39.15 Crores that was the bid of Respondent No.2.
Disposing of the appeals, the Court
HELD: 1.1 Clause 2.15 of the tender conditions made it clear that it is only at a pre-tender stage that a clarification may be obtained regarding tender conditions. Sub-clause 4 of Clause
2.15 is important because all tenderers were cautioned by this Clause that tenders containing any deviation from the contractual terms and conditions, specifications or other requirements, will be rejected as non-responsive. [Para 6] [501-B-C]
1.2 In the pre-tender meetings that took place between the Chief Engineer and prospective parties on 30.01.2018 questions were raised as to the period of bank guarantee, and the Department specifically relied upon a GR dated 12.02.2016, together with the corrigenda thereto, and stated that as a policy decision, modification in this Clause cannot be made. It is clear, therefore, that a modification to this very tender condition was suggested at the pre-tender stage, and was rejected to the knowledge of all prospective tenderers. Sub-clause 4 of Clause 2.15, therefore, becomes important in this context as the Respondent No. 2 was put on notice from the beginning itself that if there is any deviation in terms of the period of bank guarantee, its bid would be treated as non-responsive. Clause 2.22, also makes reference to the self-same PWD Circular dated 12.02.2016 with the corrigenda. A reading of this Clause would also show that a bank guarantee that is to be furnished has to be valid up to one month after the defect liability period which, admittedly, is for a period of 40 months. [Paras 7, 8] [501-C-D, F-H; 502-A-B]
1.3 Clause 2.35 makes it clear that a substantially responsive bid is one which conforms to all terms, conditions and specifications without any material deviation. Inter alia, a material deviation is one which limits, in any substantial way, or is inconsistent with the bidding documents or the employer’s rights or bidder’s obligations under the Contract. A bank guarantee, which is for a period of six months and not for a period of 40 months, would not only be directly inconsistent with the bidding documents but would also be contrary to the employers’ right to a bank guarantee for a longer period. This being the case, since a material deviation from the terms and conditions of the tender document was made by Respondent No. 2, when it furnished a bank guarantee for only six months initially, it would be clear that such bid would have to be considered as not substantially responsive and ought to have been rejected by the employer. Clause 2.35.2 also makes it clear that such a bid would have to be rejected outrightly and may not be subsequently made responsive by correction. [Para 10] [502-D-F]
1.4 The words used in the tender document cannot be ignored or treated as redundant or superfluous – they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court. The judgment of the High Court, insofar as para 8 is concerned, is set aside. Mr. Basant, learned senior counsel appearing on behlaf of Respondent no.1 very fairly submitted that he will match the amount of Rs. 39.15 crores that was the bid of Respondent No. 2. The work now be performed by the Respondent No. 1 at this bid amount. [Paras 15 and 18] [505-E-F; 506-C]
Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd. and Ors. (2016) 8 SCC
446 : [2016] 3 SCR 310 – relied on.
Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd. (2016) 16 SCC 818 : [2016] 3 SCR 551
– 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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