R.K.JAIN & SONS HOSPITALITY PVT. LTD THROUGH ITS DIRECTOR vs. UNION OF INDIA & ANR

$~7. * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P. (C) 3712/2020 R.K. JAIN & SONS HOSPITALITY PVT. LD THROUGH ITS DIRECTOR ..... Petitioner Through: Mr. Manish Jain and Mr. Sougata Ganguly, Advocates versus UNION OF INDIA & ANR ..... Respondents Through: Mr. Kirtiman Singh, CGSC for R-1. Mr. Digvijay Rai, Advocate for R-2/AAI. CORAM: HON'BLE MS. JUSTICE HIMA KOHLI HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD O R D E R % 29.06.2020 HEARD THROUGH VIDEO CONFERENCING CM APPL. 13299/2020 (Exemption) Allowed, subject to all just exceptions. W.P. (C) 3712/2020 and CM APPL. 13298/2020 (stay) 1. The instant writ petition is for issuance of a writ of mandamus for a declaration that Conditions No. 4 and 5 under Technical Bid Evaluation (Additional Eligibility) criteria in e-tender notice ID No. 2020- _AAI_048738_1 issued by the respondent No.2/AAI (in short, ‘AAI’) inviting applications for providing environmental support services (up- keeping) are unjust, unreasonable, unconstitutional, and consequently, liable to be quashed. W.P. (C) 3712/2020 Page 1 of 16 2. The petitioner, a private limited company, is a registered contractor of the Govt. of Delhi. The petitioner states that it has participated in various bids floated by the respondent No. 2/AAI for different kind of works in various areas in Delhi and has also been awarded contracts by the respondent No.2/AAI for different kinds of work. 3. The petitioner states that the respondent No.2/AAI has brought out a notice inviting e-tender bearing tender ID No.2020_AAI_48378_1, calling the bidders to provide environmental support services (up-keeping) for the office complex at Rajiv Gandhi Bhawan SAP, New Delhi for Rs. 583.52 lakhs (Rs. 194.51 lakhs per annum) for a period of 3 years, extendable for further 1 year subject to satisfactory performance. 4. It is the contention of the petitioner that the criteria for technical bid evaluation prescribed in the NIT contains conditions which are not in conformity with the CVC guidelines dated 12.07.2002 and 07.04.2004. Conditions No.4 and 5 of the additional incorporated conditions in the e- tender which are under challenge, read as under:-

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turnover (ii) scale and size of operations (iii) number of projects (iv) manpower on roll (v) quality focus and capability (vi) possession of machinery (vii) presentation, for which marks have been allotted for each of the criteria. Condition No.5 stipulates that a bidder must mandatorily secure a minimum of 70 marks out of 100 marks in technical evaluation in order to be a qualified bidder for being eligible for technical weightage and subsequently for opening of financial bids. These conditions have been challenged by the petitioner stating that they are arbitrary and contrary to the CVC guidelines and have been inserted only to eliminate competition and are therefore liable to be struck down. The petitioner relies on the CVC W.P. (C) 3712/2020 Page 7 of 16 guidelines dated 17.12.2002. Paragraph 5 of the CVC guidelines which is relevant for the instant case, reads as under:- "5 i) Average Annual financial turnover during the last 3 years, st ending 31 March of the previous financial year, should be at least 30 per cent of the estimated cost. ii) Experience of having successfully completed similar works during last 7 years ending last day of month previous to the one in which applications are invited should be either of the following:- a) Three similar completed works costing not less than the amount equal to 40 per cent of the estimated cost. Or b) Two similar completed works costing not less than the amount equal to 50 per cent of the estimated cost. Or c) One similar completed work costing not less than the amount equal to 80 per cent of the estimated cost." 6. It is the contention of Mr. Manish Jain, counsel for the petitioner that the respondent No.2/AAI has been issuing similar tenders every year and the eligibility criteria has always been in accordance with the CVC guidelines, without there being any additional conditions. The additional conditions being contrary to the C.V.C guidelines are therefore liable to be struck down. He contends that the additional conditions particularly Conditions No.4 and 5 under the technical bid evaluation (Additional Criteria) in the e- tender notice have been inserted only to favour some. He has argued that these conditions would result in denying fair competition to the bidders and there is no justification for imposing them when the respondent No.2/AAI has been following the CVC guidelines all along. 7. Per contra , Mr. Digvijay Rai, learned counsel appearing for the respondent No.2/AAI submits that these conditions that are part of Quality W.P. (C) 3712/2020 Page 8 of 16 and Cost Based Selection (QCBS) system have been in vogue since the year 2013. He relies on the tender for mechanised and automated cleaning of JNNATC by AIIMS, Delhi and tenders floated by other organisations like the O.N.G.C wherein similar conditions have been stipulated. He has also produced a bid document issued by the office of the Comptroller and th Auditor General of India (CAG) on 18 June, 2013, for hiring of mechanised housekeeping services for the office of the Comptroller and Auditor General of India, wherein similar conditions have been incorporated. Learned counsel states that Airport Authority of India had invited bids for mechanised environmental support services for up-keeping of Terminal No.1 and the inter-terminal link at SPT Airport, Ahmedabad, wherein identical conditions had been imposed. The said conditions were challenged before the High Court of Gujarat and a Division Bench has upheld these conditions. It is also contended that the petitioner after having participated in the tender process by submitting his bid, cannot turn around and challenge the tender conditions. 8. We have heard Mr. Manish Jain, learned counsel for the petitioner and Mr. Digvijay Rai, learned counsel for the respondent No.2/AAI. 9. The scope of judicial review in matters relating to tender are now well settled. In Jagdish Mandal vs. State of Orrisa reported as 2007 14 SCC 517 , after considering the relevant case law, the Supreme Court had observed as under:- “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters W.P. (C) 3712/2020 Page 9 of 16 relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” (emphasis added) W.P. (C) 3712/2020 Page 10 of 16 10. In Michigan Rubber (India) Ltd. Vs. State of Karnataka reported as 2012 8 SCC 216 , the Supreme Court has laid down the following principles defining the parameters of judicial review in tender matters. Paras 23 and 24 of the said judgment are apposite and read as under:-

24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to QC W.P. (C) 3712/2020 Page 11 of 16

demonstrate that the process adopted or the decision taken by the respondent No 2/AAI is contrary to the law laid down by the Supreme Court. There is no material before us to arrive to a conclusion that the decision taken by the respondent No.2/AAI is arbitrary or irrational or that public interest is adversely affected that would compel us to interfere in the tender conditions. We may note that the respondent No.2/AAI has not diluted any of the conditions or the guidelines issued by the CVC. It has only made them more stringent. It cannot be said that the authority issuing the tender is not empowered to impose more stringent conditions to ensure better quality of performance of the contract and also to ensure that the contractor has the financial means to execute the contract and that he is not a fly by night operator who will abandon the work midstream. 12. Our attention has been drawn by learned counsel for the respondent No.2/AAI to the judgment dated 12.03.2018, passed by Division Bench of the Gujarat High Court in Samvit Buildcare Private Ltd. Vs. Civil Aviation. In the said judgment, the very same clauses were present in the e-tender issued by the AAI for the work of mechanised environmental support W.P. (C) 3712/2020 Page 12 of 16 services (MESS) Up-keeping of Terminal-1 and inter-terminal link at SVIP Airport, Ahmadabad. These conditions were challenged on the very same grounds in WP No. Special Civil Application No. 1098/2018 and the Division Bench after considering various judgments had upheld the tender conditions by observing as under:- “12.2. In the present case, a conscious decision has been taken to adopt the QCBS system in the larger public interest. The same cannot be said to be either arbitrary, mala fide or illegal, which calls for the interference of this Court in exercise of powers under Article 226 of the Constitution of India. Even otherwise, there is a justification by the respondent to adopt QCBS. It is the case on behalf of the respondent authority that earlier when work was awarded in 2012, during that period footfall was very less but there is tremendous growth in passenger’s movement reaching to approximately 7.5 million per annum (projected for the year 2017 18 is 8.6 million per annum) and due to the growing traffic, Corporate Head Quarters of AAI has classified Ahmedabad Airport under QCBS category “A”. It is also the case on behalf of the respondent authority that during the recent past authority has received numerous complaints pertaining to upkeeping of Terminals from the passengers and therefore, a conscious decision has been taken to adopt QCBS which as observed herein above cannot be said to be arbitrary. As observed herein above, as such it is for the employer to select the method and manner and even eligibility criteria and the Courts would not be justified in interfering with the same unless the same is found to be so perverse that no prudent person who take such decision and or adopt such method. 13.0. Now, so far as submission on behalf of the petitioners that some of technical bid evaluation criteria and other eligibility criteria on the basis of which technical bid and financial bids to be evaluated are just contrary to the policy of the State Government and the CVC guideline and that by such conditions only few bidders would be in the competition are concerned, at the outset, it is required to be noted that what is challenged by the petitioner is additional eligibility criteria and not sole W.P. (C) 3712/2020 Page 13 of 16 eligibility criteria. What is challenged by the petitioner is additional eligibility criteria and not principal eligibility criteria. Therefore, as such CVC guidelines shall not be applicable. Even otherwise, the additional eligibility criteria under challenge cannot be said to be so arbitrary and/or no nexus with the object. The additional eligibility criteria cannot be said to be so arbitrary and/or perverse that no prudent persons would impose such condition. ” (emphasis added) 13. We see no reason to differ with the view expressed by the Gujarat High Court. 14. In the present case, the petitioner has failed to demonstrate as to how Conditions No.4 and 5 have been introduced only to eliminate it or to favour a few individuals. There is no justification for this court to exercise its jurisdiction under Article 226 of the Constitution of India only to dilute the additional stringent conditions imposed by the respondent No.2/AAI in order to make it compliant with the CVC guidelines. 15. The petitioner has participated in the tender process with its eyes wide open. After participating in the tender process, it is not open to the petitioner to turn around and challenge the tender conditions. In this context, a Division Bench of this Court in Siemens Aktiengesellschaft and Siemens Ltd. Vs. DRMC Ltd., reported as 2013 SCC OnLine Delhi 1982 , had observed thus:- “68. Subsequent to the issue of Addendum No. 7 on 13.07.2012 the Petitioner had raised several queries on GEC related issues which were responded to by the Respondent No. 1, however the Petitioner never communicated or expressed any doubts or apprehensions. The Petitioner had thus accepted and adhered to the tender conditions while submitting its bids. Having accepted the tender conditions and the Guaranteed Energy Consumption based evaluation by submitting its bid, the Petitioner is now estopped W.P. (C) 3712/2020 Page 14 of 16

Supreme Court in Siemens Aktiengesellschaft and Siemens Ltd. Vs. DRMC Ltd. reported as (2014) 11 SCC 288 . In Meerut Development Authority vs. Assn. of Management Studies reported as (2009) 6 SCC 171, the Supreme Court held as below:- “27. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the abovestated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations .” 17. From a perusal of the above, the principle which emerges is that after having participated in the tender process, a bidder cannot turn around and challenge the tender conditions. The bidder has no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested parties in response to the NIT in a transparent manner and free from any hidden agenda. 18. In view of the above discussion, we are unable to persuade ourselves to interfere in the tender conditions, more so after the petitioner has participated in the process. Even on merits, we do not find that the conditions imposed in the tender are arbitrary, discriminatory, irrational or manipulated in order to eliminate fair competition, as has been alleged W.P. (C) 3712/2020 Page 15 of 16 in the petition. 19. Consequently, the petition is dismissed as meritless alongwith the pending application. HIMA KOHLI, J SUBRAMONIUM PRASAD, J JUNE 29, 2020 Hsk/ rkb W.P. (C) 3712/2020 Page 16 of 16