Shree Chandrashekhar, J.:— Aggrieved by rejection of the bid submitted by SLL-SML Joint Venture Consortium, the petitioners have challenged communication dated 11.09.2015 whereby, rejection of the bid on the ground of ‘incomplete document’ was communicated.
2. The petitioner no. 1 is a Joint Venture Consortium in which M/s. Sical Logistics Limited-petitioner no. 2 is lead partner. In response to e-Tender Notice dated 05.08.2015, petitioner no. 1-JVC submitted its bid including, a Bank Guarantee for Rs. one crore as Earnest Money Deposit. On 11.09.2015, the offer of the petitioner-Joint Venture Consortium was summarily rejected on the ground of ‘documents incomplete’ and the Joint Venture Consortium was not allowed to participate in the reverse bidding. Immediately, through e-mail the respondents were requested to disclose the details of incomplete documents submitted by the Joint Venture Consortium. On 15.09.2015, the respondent no. 3 disclosed that the BG was not in the prescribed format. A legal notice was issued to the respondent-CCL and M/s. mjunction Services Pvt. Ltd. however, the respondents did not respond to the same. Constrained, the petitioners approached this Court.
3. Heard the learned counsel for the parties.
4. Mr. Ajit Kumar Sinha, the learned Senior Counsel for the petitioners raised two fold contentions; (i) NIT dated 05.08.2015 does not prescribe a format for BG. Moreover, the Bank Guarantee proforma for earnest money deposit/bid security in the general terms and conditions is almost similar to the Bank Guarantee furnished by the petitioners and therefore, the bid submitted by the Joint Venture Consortium has wrongly been rejected by the respondent-CCL and, (ii) the Bank Guarantee format and the condition at Clause 3 in e-Tender Notice dated 05.08.2015 mandate that the Bank Guarantee should be an irrevocable Bank Guarantee payable at Ranchi and the minimum validity period should be beyond 90 days. Since the BG submitted by petitioner no. 1 fulfills the aforesaid three conditions, the bid submitted by it should not have been rejected on a hyper-technical plea. The respondent-CCL has asserted that the guideline dated 31.12.2007 issued by the Central Vigilance Commission has been followed by M/s. CCL, and besides that, it is just in law to insist upon adherence to the conditions in NIT as well as the terms and conditions which formed integral part of NIT. It is pleaded that it is factually wrong to contend that no format for Bank Guarantee was provided.
5. Clause 3 of e-Tender Notice dated 05.08.2015 provides that, “EMD can also be deposited in the form of irrevocable Bank Guarantee (BG) from any Scheduled Bank in the format given in the bid document”. The General Terms and Conditions Governing Hiring of Equipment for Removal of Overburden, Extraction of Coal, Transportation and Loading in the areas of Central Coalfields Limited provides that the bid shall comprise of two parts. The part I bid should contain the Bid Security/Earnest Money Deposit in appropriate form. It is not in dispute that the proforma of Bank Guarantee in lieu of Bid Security/Earnest Money is given in the general terms and conditions. In their legal notice dated 16.09.2015 the petitioners admit that, “if any format is given, it is given in the general terms and conditions.” Referring to a decision in “Jalmahal Resources Pvt. Ltd. v. K. P. Sharma” (2014) 8 SCC 804, the learned Senior Counsel for the petitioners submitted that if there is compliance of the essential terms of the tender, the Employer can waive a non-essential condition. It is contended that submission of Bank Guarantee is not an essential condition.
6. In “Jalmahal Resources Pvt. Ltd.” case, the Project was to be executed through a SPV and the appellant was a SPV. The objection that the lead partner must be a Company was rejected by the Hon'ble Supreme Court holding that it was not violation of a substantial condition of the tender. The petitioners have relied on the decision in “B. D. Yadav and M.R Meshram v. Administration of the City” AIR 1984 Bom 351, in which the requirement was a deposit at call or Demand Draft or National Savings Certificates to be placed in the office of Development Engineer. The bidder deposited a time deposit receipt which was placed in the office of the Development Engineer along with the tender format. These cases are clearly distinguishable on facts. In the present case the petitioners have failed to furnish Bank Guarantee in lieu of bid security/earnest money in the prescribed format which only could have entitled the petitioner to qualify in the technical bid subject to fulfillment of other conditions. This is not a case in which the Bank Guarantee furnished by a successful bidder has been found not in proper format. Had this been the case, subject to conditions of the contract the employer could have required from the contractor to furnish Bank Guarantee in proper format within a stipulated time. In my opinion, adherence to terms and conditions of tender by the parties is in the public interest. Any departure or exception from the express terms of the tender which has not specifically been provided in the tender document, may lead to arbitrariness. The contention that submission of Bank Guarantee is not an essential condition of the contract, is liable to be rejected. In “Central Bank of India Ltd., Amritsar v. Hartford Fire Insurance Co. Ltd.” AIR 1965 SC 1288, the Hon'ble Supreme Court observed that, “the court must give effect to the plain meaning of the words however, it may dislike the result.”
7. The plea taken by the respondent-CCL that it is lawful in law to insist upon submission of Bank Guarantee in proper format, in my opinion carries considerable force and deserves to be accepted. In the present case Clause 3 of e-Tender Notice dated 05.08.2015 required that the EMD should be in the form of irrevocable Bank Guarantee from any scheduled Bank in the ‘Format’ given in the bid documents. Though the e-Tender Document does not prescribe format for Bank Guarantee, I find that the terms and conditions Governing Hiring of Equipment for Removal of Overburden, Extraction of Coal, Transportation and Loading in the areas of Central Coalfields Limited contains the proforma of Bank Guarantee in lieu of bid security/earnest money. The respondent-CCL has relied on Clause 4 of the Office Memorandum dated 31.12.2007 issued by the Central Vigilance Commission which provides;
4. “Therefore, all organizations are advised to evolve the procedure for acceptance of BGs, which is compatible with the guidelines of Banks/Reserve Bank of India. The steps to be ensured should include-
i) Copy of proper prescribed format on which BGs are accepted from the contractors should be enclosed with the tender document and it should be verified verbatim on receipt with original document.”
8. In the above facts, action of the respondents rejecting bid of the petitioner no. 1 cannot be assailed as arbitrary. Mr. Jagdeep Dhankar, the learned Senior Counsel for the respondent-CCL submitted that, the Consortium is admittedly a defaulter and therefore, it would be inequitable to exercise discretionary jurisdiction in its favour. It is contended that the petitioner was labouring under a misconception which is reflected in filing wrong document by the petitioner in the present proceeding. I find that the general terms and conditions produced by the respondent-CCL is different from the general terms and conditions vide Annexure-3 to the writ petition. The petitioners have produced General Terms and Conditions Governing Contractual Transportation and Loading in areas of Central Coalfields Limited which was not the work under e-Tender. Moreover, the Bank Guarantee proforma for Earnest Money Deposit/Bid Security at page 111 in the writ petition is different from the “proforma of Bank Guarantee in lieu of Bid Security/Earnest Money” which forms part of the general terms and conditions produced by respondent-CCL at page 56 in the counter-affidavit. The CVC office memorandum dated 31.12.2007 advised all organisations to evolve a procedure for acceptance of BGs, which should ensure that the BGs are in proper prescribed format. The said office memorandum further provides that the original BG must be in the prescribed format. The learned Senior counsel for the respondent-CCL submitted that, prescription for a format for Bank Guarantee is a matter of commercial prudence. Bank Guarantees if are permitted to be submitted in different formats, it would create multiple problems. Referring to growing incidents of cases relating to Bank Guarantees the learned Senior counsel for the respondent-CCL resisted the writ petition asserting that the rejection of bid on the ground that the Bank Guarantee was not in proper format cannot be interfered with, if the action of M/s. Central Coalfields Limited is not in violation of a law or the respondent has not acted wholly in accordance with the tender conditions. I find that the contract is a non-statutory one and in view of the facts disclosed in the present proceeding no legal right flows to the petitioners to seek interference in the matter by this Court. In “Asia Foundation and Construction Ltd. v. Trafalgar House Construction (I) Ltd.” (1997) 1 SCC 738, the Hon'ble Supreme Court observed as under,
9. “………We are of the considered opinion that it was not within the permissible limits of interference for a court of law, particularly when there has been no allegation of malice or ulterior motive and particularly when the court has not found any mala fides or favouritism in the grant of contract in favour of the appellant………”
10. “Therefore, though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the Court that in the matter of award of a contract power has been exercised for any collateral purpose. But on examining the facts and circumstances of the present case and on opinion that none of the criteria has been satisfied justifying court's interference in the grant of contract in favour of the appellant………..”
9. The learned Senior Counsel for the petitioners next contended that since there was no format of Bank Guarantee given in the e-Tender Notice dated 05.08.2015, it was for the respondent-CCL to clarify the same. It is contended that in case of ambiguity or doubt, the contract has to be construed contra proferentem against the respondent-CCL. The learned Senior Counsel for the petitioners relied on the decisions in “General Assurance Society Ltd. v. Chandmull Jain” reported in (1966) 3 SCR 500 and “Bank of India v. K. Mohan Das” reported in (2009) 5 SCC 313 to fortify the argument that if the terms are not clear, an interpretation against the party, which is the author of the contract, should be preferred.
10. I find that the e-Tender Notice was issued on 05.08.2015 and the bid submission started on 11.08.2015 The last date for bid submission was 31.08.2015 and the bidders were permitted to seek clarification on-line between 11.08.2015 to 31.08.2015 It further appears that the last date for submission of EMD was 03.09.2015 The petitioners admit that the general terms and conditions contained a format for furnishing the Bank Guarantee. The petitioners thus could have sought clarification between 11.08.2015 and 31.08.2015 There is no ambiguity in the requirement for furnishing Bank Guarantee in the format prescribed in the general terms and conditions. In “Alstom Hydro France v. Tehri Hydro Development Corporation” AIR 2009 Uttkha 61, the Court held that amendment and clarification showed that any of the two meanings, one understood by petitioner and other as was being explained by respondent no. 1 could be ascribed to documents. In such a situation the Court invoked the principle of contra proferentem. In “Chandmull Jain” case, it was a contract for insurance which obviously would stand on a different footing. In “K. Mohan Das” case, the Bank of India took a stand that the benefit of five years' additional qualifying service was admissible only for the employees who took voluntary retirement under Regulation 29 of the Employees Pension Regulations, 1995 and it was not applicable to the employees who opted for Voluntary Retirement Scheme, 2000. The Hon'ble Supreme Court has held that in terms of Regulation 29, an employee was entitled to addition of five years of notional service in calculating the length of service for the purpose of VRS, 2000 and since it was not specifically prohibited in the Scheme itself, the employees who took VRS, 2000 were entitled to the benefit of five years additional qualifying service under Regulation 29(5). The Hon'ble Supreme Court observed as under;
33. “What was, in respect of pension, the intention of the banks at the time of bringing out VRS 2000? Was it not made expressly clear therein that the employees seeking voluntary retirement will be eligible for pension as per the Pension Regulations? If the intention was not to give pension as provided in Regulation 29 and particularly sub-regulation (5) thereof, they could have said so in the Scheme itself. After all much thought had gone into the formulation of VRS 2000 and it came to be framed after great deliberations. The only provision that could have been in mind while providing for pension as per the Pension Regulations was Regulation 29. Obviously, the employees, too, had the benefit of Regulation 29(5) in mind when they offered for voluntary retirement as admittedly Regulation 28, as was existing at that time, was not applicable at all. None of Regulations 30 to 34 was attracted.”
11. Assailing the action of the respondent-CCL in communicating the ground for rejection of petitioners' bid belatedly, the learned Senior Counsel for the petitioners submitted that, though a clarification was sought on 11.09.2015 and in the meantime, the reverse bidding had already taken place on 14.09.2015 however, the reason for rejection of the bid was intentionally communicated on 15.09.2015 The learned Senior Counsel for the respondent-CCL submitted that the law relating to contract has been crystallized in “Michigan Rubber (India) Ltd. v. State of Karnataka”, (2012) 8 SCC 216. I am of the opinion that delay of few days in furnishing information to the petitioners cannot be faulted as arbitrary or malafide. The communication dated 11.09.2015 discloses that Techno-commercial Evaluation was done on 11.09.2015 and the offer of petitioner no. 1 was rejected and a communication was sent to the petitioner no. 1 on 11.09.2015 itself. In “Jagdish Mandal v. State of Orissa” (2007) 14 SCC 517, the Hon'ble Supreme Court observed that, “…… 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…..”
12. Considering the facts noticed hereinabove, I am of the opinion that rejection of the bid of petitioner no. 1 on the ground that Bank Guarantee was not submitted in prescribed format cannot be assailed as against the public interest. The action of the respondent-CCL is neither arbitrary nor actuated with malice in law. At the stage of evaluation of Techno-commercial bid the only right a tenderer can claim is that it should be treated fairly and equally. The petitioners have not alleged that the condition requiring submission of BG in prescribed format has been relaxed in favour of any other tenderer. In the background of the law laid down by the Hon'ble Supreme Court when the action of the respondent-CCL is examined, I find no infirmity in the decision of respondent-CCL rejecting the bid submitted by petitioner no. 1.
13. In the result, the writ petition is dismissed.