The Appeal arising out of SLP(C)
No 11933 of 2022 is at the instance of the Brihan Mumbai Electric Supply & Transport Undertaking (for short, “BEST”) (Original respondent No 1 before the High Court), a statutory corporation operating under the provisions of the Mumbai Municipal Corporation Act, 1888. The Tender document provided for Technical specifications as stipulated under Clause 3.5(e) and Clause 12 of Section 2 of Schedule IX, under which the bidders were required to provide Single Decker Buses which can run 200 Kms in single charge without interruption in actual conditions for the relevant Gross Vehicle Weight (GVW) with air conditioning with not more than 80% battery being consumed. In case the successful bidder is unable to maintain uninterrupted operation of schedules for want of charging, then BEST shall take suitable action by levying additional penalty by non-payment towards assured kms for that entire day per instance and if the instance keeps on recurring for a long period of time then the BEST may resort to even termination of Contract.” In the pre-bid meeting held on 11.03.2022, TATA Motors submitted its pre-bid points, wherein under Point 1, it requested BEST to consider its bid for 200 Kms per day with 75-minutes of opportunity charging time during the day operations and range testing conditions as per AIS 040/FAME II.
EVEY submitted its bid on 02.05.2022, claiming that the same was submitted without any deviation from the Tender conditions including the condition of minimum operating range of 200 Kms in a single charge.
EVEY along with its bid dated 02.05.2022 submitted Annexure Y, wherein the OEM gave an undertaking for the operating range which included a table that mentioned that the operating range for a single decker bus would be 200 Kms with the opportunity charging time of 1 hour. BEST in its technical suitability evaluation dated 06.05.2022, held TATA Motors along with four other bidders, to be “technically non-responsive”. 1 as “technically non-responsive”; (b) Issue a writ of mandamus or writ in the nature of mandamus or any appropriate writ, order or direction under Article 226 of the Constitution of India directing Respondent No 1 to reconsider the bid submitted by the Petitioner
1 to cancel the Tender and float a fresh tender; (d) During the pendency of the Petition, restrain Respondent No 1 from taking any steps towards award of contract under the Tender; (e) ad-interim reliefs in terms of prayers in clause (d) above; (f) Cost of the present Petition; and (g) such further and other reliefs as the nature and the circumstances of the case may require be granted to the Petitioner.”
During the pendency of the aforesaid writ petition BEST awarded the Tender in favour of EVEY with the Letter of Acceptance dated 20.05.2022. The High Court vide its impugned order and judgment dated 05.07.2022, took the view that the requirement for the operating range to be more than 200 Kms in a single charge in “actual conditions” was unambiguous. Petitioner No.1 did not submit its bid for 200 Kms@ 80% SoC in single charge on actual condition but at standard test conditions as per AIS 040. The High Court while referring to Clause 16 of Schedule I held that once the final date for the submission of the bid expires, there can be no additions/corrections/ submissions of documents by the bidders. 2 along with the modified Annexure-Y and after two hours, the bid of Respondent No.2 held responsive, does not support the contention of Respondent No.1 that the said revised Annexure-Y and the letter written on 6th May morning did not weigh in holding Respondent No.2’s bid responsive. It is also the fact that on 28th April Respondent No.2 had submitted the bid and on 2nd May it had submitted the revised bid, however, with the same Annexure-Y clearly stating that it would require opportunity charging tune of one hour.
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In view of the aforesaid, the High Court thought fit to declare EVEY also as an unsuccessful bidder. It is pertinent to note that during the pendency of the proceedings before the High Court and after submitting the subsidy guarantee, EVEY had already supplied total 8 buses between 04.07.2022 to 05.07.2022. Furthermore, the learned Senior counsel proceeded to submit that, even in the original Annexure Y as submitted on 02.05.2022, his client had mentioned that, “ These offered buses will run above mentioned minimum Kms without any interruption”. He submitted that, Annexure F specifies that “If the variations specified herein, are found to be in nature of contradiction to BEST’s requirements/specifications then such Bids will be treated as Non-responsive ” and therefore, the bidder would have to essentially comply with the specifications mentioned in Annexure F otherwise the bid would be treated as “technically non-responsive”. He further submitted that, non-compliance of the conditions mentioned in Annexure Y would lead to levy of penalty and if the instance keeps on recurring, it may lead to termination of contract and therefore, Annexure Y should be treated as a collateral term of the Tender.
Orrisa Mining Corporation Limited reported in (2008) 5 SCC 772, he submitted that once the High Court found TATA Motors to be technically non-compliant, it ought not to have entertained a challenge to the tendering process at the instance of an unsuccessful party. Abhishek Manu Singhvi, the learned Senior counsel, appearing for TATA Motors vehemently submitted that the contract awarded by BEST to EVEY is per se illegal.
The learned Senior counsel argued that the acceptance of the EVEY’s revised Annexure Y after the expiry of the bid submission end date and technical bid opening date is contrary to the Tender conditions. Ganesh Engineering Works and Others, reported in (1991) 3 SCC 273 (Para 6) ; W.B. Commissioner, Ulhasnagar Municipal Corporation and Others, reported in (2000) 5 SCC 287 (Paras 10 and 14); Meerut Development Authority v. He vociferously submitted that Annexure Y was a part of the bid document and once submitted, could not have been permitted to be altered after the bid submission end date i.e., 02.05.2022. He submitted that the High Court was justified in saying that a fresh tender in the present matter is warranted more particularly in view of the arbitrary tender process and delay in supply of the buses as per the timeline prescribed under the Tender.
Tushar Mehta, the learned Solicitor General, appearing for BEST submitted that the Tender document provided for mandatory eligibility conditions for being declared as a qualified bidder at the stage of technical bid, and the said eligibility conditions were stipulated in sub – clauses (iv) and (v) of Clause 5.1.1 respectively of the Tender Document. Aggregator have also to submit Manufacturer Authorization Form (if aggregator is a sole bidder or lead bidder then such bidder shall submit Manufacturer Authorization Form) from OEM, v) Schedule of Departures from technical specification as in Annexure F, vi) General details of Bidder with registration proof and credentials (in case of Consortium, this would need to be provided by the lead members) as in Annexure G & H, vii) He highlighted the portion of the Annexure which states that if variations are found contradicting BEST’s requirements then such bids would be treated as non-responsive. However, Annexure Y was neither a condition precedent for being a responsive bidder nor a mandatory condition for awarding the contract. BEST examined the possibility of re-tendering and found that in the recent past, one similar tender was issued by the Convergency Energy Services Limited (CESL), a Government of India undertaking.
However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. Then materials on record would indicate that the TATA Motors in its bid deviated from this requirement and had informed BEST that it could carry the operating range in the “standard test conditions” which was not in accordance with the Tender conditions. However, we are of the view that the High Court having once declared TATA Motors as “non-responsive” and having stood disqualified from the Tender process should not have entered into the fray of investigating into the decision of BEST to declare EVEY as the eligible bidder.
Construction Ltd., it is clear that the offer of M/s Raunaq International Ltd. is lower and it is on this ground that the Board has accepted the offer of M/s Raunaq International Ltd.
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It is also obvious that by stopping the performance of the contract so awarded, there is a major detriment to the public because the construction of two thermal power units, each of 210 MW, is held up on account of this dispute. We are of the view that the High Court should have been a bit slow and circumspect in reversing the action of BEST permitting EVEY to submit a revised Annexure Y.
The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind.
Case Title: TATA MOTORS LIMITED Vs. THE BRIHAN MUMBAI ELECTRIC SUPPLY AND TRANSPORT UNDERTAKING (BEST) (2023 INSC 574)
Case Number: C.A. No.-003897-003897 / 2023
