Judgment:
Dr. D.Y. Chandrachud, J.
1. Rule. Learned counsel for the Respondents waive service. By consent, the Rule is made returnable forthwith. The writ petition is taken up for hearing and final disposal, by consent and on the request of learned counsel.
2. The Municipal Corporation of Greater Mumbai (`MCGM') invited bids through an electronic tendering process on 5 January 2013 for carrying out the following two categories of work:
(i) AE-41 : Improvement of various roads in Eastern Suburbs in flexible pavement; and
(ii) E-211 : Improvement of various roads in Eastern Suburbs in rigid pavements.
The petition relates to the tendered work at (i) above. The initial estimated cost of Rs.162.88 crores was subsequently revised by a corrigendum to Rs.168.01 crores. The MCGM received two offers, one by the Petitioner which is a joint venture formed by the Second and the Third Petitioners, and the other by the Fifth Respondent which is a joint venture constituted by the Sixth and the Seventh Respondents. The bids had to be submitted in three packets, A, B and C. Packet `A' was opened on 31 January 2013. Packet `B' was opened on 5 February 2013. Upon scrutiny of packet `B' of the two bidders, certain shortfalls were observed. Tender condition 3.30 contemplated that an opportunity would be granted by MCGM to allow tenderers to rectify the deficiencies in packet `B if the required documents had not been uploaded. The shortfalls which were noticed by MCGM upon scrutiny were communicated to the Petitioners and to the Fifth Respondent by letters dated 6 February 2013.
3. The relevant tender condition was specified in Clause-3.2.3 of which sub Clause (iii)(a) and (b) stipulated as follows:
"3.2.3 : Post Qualification Criteria :
(iii) Particular construction experience :
(a) The tenderer(s) shall upload evidence that it has successfully completed in one contract of magnitude of at least 30% of the cost of the ASPHALT roads work as the case applicable, in any one year (for this condition, one year shall be counted as continuous period from beginning of any month of year to end of preceding month of subsequent year) pertaining to roads/Highways/airport runways during last 5 financial/calendar years (Road repair work, pothole work, spot repairs, repairs to trenches shall not be considered work experience for this e-tender) or is successfully executing currently one work of similar nature with at least 75% progress in one year (for this condition, one year shall be counted as continuous period from beginning of any month of year to end of preceding month of subsequent year) (financial value as on the date of invitation of tender) of Cost of magnitude of at least 30% of the cost of the works tendered for.
In support of this, certificates from the employer shall be uploaded along with the application incorporating clearly the contract value, billing amount, date of commencement of work, completion period, satisfactory performance of the contract and other relevant information.
(b) The tenderer shall also upload evidence that it has achieved the minimum annual quantity of the total asphaltic work (B.M., D.B.M., B.C., S.C., Mastic Asphalt) / M35 or richer mix PQC, as the applicable case may be to the tune of 30% of the tendered Quantity on volumetric basis as applicable, in any one financial/calendar year, during last five financial/calendar years (submission of certificates should be as mentioned in 3.2.3(iii) `a' above). Total tender quantity of BM+DBM+BC+mastic asphalt+SC to be referred in the regards for AE-41 is 23404.125 Cum." (emphasis supplied)
Clause 3.24 required packet `B' to contain the following documentary evidence in Proformas-III and IV:
"c. Evidence stating that the tenderer has successfully completed at least one contract pertaining to ASPHALT Roads Work of size stated in post qualification criteria during 5 financial/calendar years (Proforma-III) (original).
(d) The quantity of total BM+DBM+BC+mastic asphalt+SC in one financial/calendar year during last 5 financial/calendar years. (Proforma-IV) (Original)." (emphasis supplied)
Proforma-III as prescribed required bidders to submit evidence of "at least one work, pertaining to ASPHALT Road works as mentioned in the post qualification criteria during the last five financial/calendar years". The proforma required bidders to submit details of the quantity of asphalt work on a volumetric basis in any one financial/calendar year during the previous five years.
4. The Municipal Corporation initially treated the bids submitted by the Fifth Respondent as non-responsive pursuant to a decision of the Chief Engineer (Roads), which was communicated to the Fifth Respondent by a letter dated 8 February 2013. In pursuance of the tender conditions, the Fifth Respondent was informed that 10 per cent of its earnest money would be recovered. The Fifth Respondent submitted a representation to the Additional Municipal Commissioner on 9 February 2013. According to the MCGM, guidelines have been issued by the Municipal Commissioner on 14 February 2011 under which in a situation where only one tender becomes responsive though multiple offers have been received, the Additional Commissioner shall personally verify the reasons for the tender being regarded as non-responsive and validate the reasons for holding the tender as non-responsive. According to the MCGM, in pursuance of the instructions of the Additional Municipal Commissioner (ES), the documents submitted by the Fifth Respondent on 11 February 2013 were accepted and after scrutiny the bid submitted by the Fifth Respondent was found to be responsive. In this process the date for opening of Packet `C' was postponed initially to 25 February 2013. On 26 February 2013 both the Petitioner and the Fifth Respondent were declared to be responsive bidders and Packet `C' was opened on 27 February 2013 and a report was submitted to the Tender Committee. The Tender Committee in a meeting held on 26 March 2013 noted that in case of the Fifth Respondent, a certificate had been issued by the MMRDA on 29 August 2011. The certificate was accepted as meeting the requirements for eligibility contained in Clause-3.2.3(iii) (a) and (b) both in terms of cost and quantity. However, the Tender Committee was of the view that the Fifth Respondent should be penalized to the extent of Rs.25.00 lakhs on account of its "casual approach" while uploading the required proforma in pursuance of the tender conditions. The Fifth Respondent being the lowest responsive bidder was recommended for the award of work.
5. The decision of the Tender Committee to hold the Fifth Respondent as responsive has been challenged in these proceedings under Article 226 of the Constitution.
6. Learned Senior Counsel appearing on behalf of the Petitioners submits that:
(i) Clause-3.2.3 of the tender conditions specifically required evidence to be furnished that the bidder has successfully completed one contract of a magnitude of at least 30% of the cost of asphalt road work in any one year and as also achieved a minimum annual quantity of the total asphaltic work of at least 30% of the tendered quantity on a volumetric basis;
(ii) Both Proformas-III and IV required bidders to submit details pertaining to asphalt road work ; Proforma-III being relateable to the cost of the work and Proforma-IV to the quantity involved in its execution;
(iii) An MMRDA contract was relied upon by the Fifth Respondent. A certificate was issued by the tendering body on 29 August 2011 which indicates an outlay of Rs.34.53 crores for 2008-09. The MCGM proceeded to treat the entirety of the cost of the work tendered by MMRDA as work for the asphalting of roads which is ex-facie in the teeth of the certificate issued by MMRDA on 29 August 2011;
(iv) The affidavit of the MCGM would, as a matter of fact, clearly indicate that the MCGM has misinterpreted Clause-3.2.3(iii) (a) as not being related to asphaltic quantity or only to asphaltic cost;
(v) As a matter of fact, MMRDA has in a communication dated 9 March 2013 clarified that the quantity of the asphalt work which was carried out, was within 10% of the work executed.
On all these grounds it was submitted that the decision to treat the Fifth Respondent as a responsive bidder despite an early decision to treat the bidder as non-responsive is arbitrary since the Fifth Respondent failed to meet the tender conditions.
7. MCGM has filed an affidavit-in-reply of its Executive Engineer (Roads). During the course of the hearing, an additional affidavit has been filed. On affidavit, MCGM, inter alia, states as follows:
"6(j) ... ... The Clause 3.2.3(iii)(a) mentions about/stipulates the construction experience requires one contract of magnitude of 30% of the cost of Asphalt roads work i.e. AE-41 in the present case, in any one year pertaining to Roads/highways/Air port runways during the last five financial/calendar years. The aforesaid certificate is pertaining to Highway work including subway. And therefore this certificate is satisfying the clause 3.2.3(iii)(a) for the financial year 2008-09 for 76% share of M/s.J. Kumar Infraproject Ltd. Clause 3.23 (iii)(a) is not related to Asphaltic quantity or only asphaltic cost. ... ... ..."
(emphasis supplies)
8. Learned Senior Counsel appearing on behalf of the MCGM submitted that:
(i) Though the bid submitted by the Fifth Respondent was initially regarded as non-responsive, this decision was evaluated by the AMC (ES) in pursuance of the guidelines of the MCGM which stipulate that where only one bid remains as a responsive bid, it should be scrutinized by the AMC;
(ii) MCGM issued letters both to the Petitioners as well as to the Fifth Respondent on 6 February 2013 calling upon them to rectify the deficiencies in packet `B' in pursuance of which the documentary material that was received was considered;
(iii) The certificate issued by MMRDA as regards the Fifth Respondent would indicate that the total work which is executed during 2008-09 was Rs.34.53 crores. As explained in the additional affidavit, MCGM has construed the term "asphalt roads" as work experience of asphalt roads, highways, runways, even if some portion of the work is in concrete. However, in future, MCGM in order to preclude any possibility of ambiguity of interpretation in the forthcoming road tenders, proposes to modify the term "asphalt roads work" to mean "the cost of the road works inclusive of asphalt work";
(iv) The Tender Committee after due deliberation on 26 March 2013 came to the conclusion that the bid submitted by the Fifth Respondent was responsive;
(v) MCGM has recently debarred the Third Petitioner from participating in further tendering process for a contractual misconduct pertaining to the award of a contract in 2011, though the decision to award the tender to the Fifth Respondent was not based on this investigation.
9. An affidavit-in-reply has also been filed by the Fifth Respondent. Learned counsel for the Fifth Respondent submitted that the Petitioner can have no grievance since an opportunity was granted by the MCGM to both the bidders to rectify the deficiencies. Moreover, it was urged that the decision to hold the bid submitted by the Fifth Respondent as responsive was taken by the Tender Committee which is an expert body and this Court ought not to substitute its opinion for that of an expert on the subject. Learned counsel for the Petitioners submitted that since the affidavits-in-reply were filed in the Court, the statements contained in the affidavits may not be treated as having been admitted by the Petitioners.
10. The rival submissions fall for consideration.
11. The tender in the present case was one of two tenders floated by MCGM. One was for improvement of roads in the Eastern Suburbs in flexible pavements while the second was for improvement of various roads in the Eastern Suburbs in rigid pavements. The disputes relates to the first of those two tenders. Clause-3.2.3 of the instructions to tenderers contains post qualification criteria. Sub-Clause-(iii) relates to "particular construction experience". Sub-clause (a) thereof required tenderers to upload evidence of the successful completion of one contract of at least 30% of the cost of the asphalt road work in any one year during the previous five years. Sub-clause (b) similarly required evidence to be uploaded of a minimum annual quantity of the total asphaltic work of 30% of the tendered quantity on a volumetric basis in one of the previous five years. Both sub clauses (a) and (b) clearly required evidence of experience in regard to carrying out of work in terms of cost and quantity of asphalt road work to the extent of 30% of the cost and quantity tendered in the subject tender. Under clause-3.24(c) the tenderers were required to furnish evidence of having successfully complete one work at least pertaining to "ASPHALT Roads Work of size stated in post qualification criteria" during five financial/calendar years. Proforma-III required tenderers to submit details of asphalt work as mentioned in the post qualification criteria. The details included the cost of the project and the actual cost of the work done. Proforma-IV required details of the quantity of the asphaltic work executed. These were essential conditions. The object of the requirement was that each bidder must possess experience of the requisite extent of having executed work of the nature for which bids were invited namely, work of asphalt roads.
12. The Tender Committee has admittedly relied upon a certificate issued by MMRDA in support of the work experience claimed by the Fifth Respondent. The certificate dated 29 August 2011 stipulates that the entire cost of the work for 2008-09 was Rs.35.43 crores. Ex-facie, from a bare reading of the certificate it is evident that the work did not pertain only to asphalt. Yet, as the affidavit filed by MCGM states in paragraph 6(j) extracted above, Clause-3.2.3(a) was interpreted as not relating to asphaltic quantity or to only asphaltric cost. This is a clear misinterpretation of the norms which were specified by the MCGM in sub Clauses-(a) and (b) of Clause-3.23(iii).
13. In the subsequent affidavit it is sought to be stated that Clause-3.2.3 is a standard clause and MCGM has construed the term "asphalt roads" as work experience of asphalt roads, highways and runways even if some portion of the work is in concrete. This explanation obviously cannot hold for a number of reasons. First and foremost, the minutes of the Tendering Committee do not contain any such line of reasoning. During the course of the hearing we had requested counsel for MCGM to inform the Court as to whether in the files pertaining to the evaluation process by the Tendering Committee there is any analysis or bifurcation of the work as referred to in the certificate issued by MMRDA. Fairly, learned Senior counsel has submitted that apart from the minutes of the Tendering Committee, there is no such analysis. But that apart, and secondly, when a tender condition is clear in its stipulation, MCGM is not entitled to treat as responsive a bid which does not meet the conditions of eligibility. The condition of eligibility in the present case requires bidders to establish, inter alia, having executed a contract of the magnitude of at least 30% of the cost and the quantity in asphalt road work. The MCGM has glossed over the position that insofar as the Fifth Respondent is concerned, the decision on its responsiveness was based on material, which pertained to a contract of the value of Rs.35.43 crores, which did not, in any event, relate entirely or substantially, to the execution of asphalt road work. As a matter of fact, the Petitioners have also relied on a further communication of MMRDA dated 11 March 2013 in support of the submission that the contract which was executed by the Fifth Respondent was essentially of the construction of an RCC subway and MMRDA has clarified that the quantity of asphalt work executed under the contract was within 10% of the work executed. But quite independent of this clarification by MMRDA, we are of the view that the bid which was submitted by the Fifth Respondent failed to fulfill the eligibility criteria prescribed by MCGM. The decision to treat the bid of the Fifth Respondent as responsive was arbitrary and violative of Article 14 of the Constitution. The bid did not meet the essential conditions specified in the tender.
14. MCGM awards large contracts, inter alia, for execution of road work in Greater Mumbai. These contracts do not constitute a conferment of a bounty on contractors. The contracts, first and foremost, are for public work which is intended to provide a safe and efficient means of communication to the residents of the city and to all those who use the roads. Contractual terms which define conditions of eligibility, must be scrupulously enforced. A relaxation of a contractual term in the case of a particular bidder is liable to render the entire process arbitrary. In the present case, the Fifth Respondent failed to fulfill the norms of eligibility prescribed by MCGM. Hence, the decision to treat the Fifth Respondent as responsive was clearly contrary to the tender conditions and was violative of Article 14 of the Constitution. The issue is not as to whether the Petitioners would, in the ultimate analysis, be entitled to get the contract because even on the assumption that a proper tendering process may not necessarily result in the award of the work to the complaining bidder, the process of tendering must be fair, transparent and accountable. Public bodies who violate those principles of transparency, accountability and conformity with their norms of eligibility, do so at the peril of an invalidation when their action is brought in question. MCGM has averred in its affidavit that while subsequently a decision has been taken to exclude the Third Petitioner from further tendering process, the decision to award the contract to the Fifth Respondent was not based on that decision.
15. For these reasons, we allow the petition by quashing and setting aside the decision of MCGM to hold the bid submitted by the Fifth Respondent as a responsive bid. We, however, clarify expressly that we are not, in consequence, issuing any direction whatsoever to MCGM to award the contract to the Petitioners and it would be open to MCGM to take an appropriate decision in accordance with law.
Rule is made absolute in these terms. There shall be no order as to costs.