1. The origin of the present dispute is a short tender notice issued by respondent No. 4 i.e Bihar State Electronics Development Corporation Ltd. (hereinafter referred to as Beltron). The objective behind the notice inviting tender was for providing IT infrastructure including establishment of Computer Lab, Hardware, Networking Software, etc. coupled with Computer Education Services in 600 Schools across rural and urban areas of the State of Bihar. The project was to be executed on the basis of BUILD OWN OPERATE and TRANSFER (BOOT) basis. The short tender notice with requisite details is Annexure-2 to the writ application.

2. The reason for filing the present writ application, by the petitioner is the rejection of their technical bid by the respondents and the subsequent award of the contract in favour of respondent no. 5 namely, M/s Educomp Solution Ltd. The rejection order/reason is stated to be Annexure-11 to the writ application. The petitioner wants a declaration that the action of respondent No. 4 i.e Beltron in disqualifying the petitioner company on spacious and trivial ground is illegal, discriminatory and violative of the fundamental rights of the company. They also want direction upon the concerned respondents to issue a fresh notice inviting tender by annulling the earlier decision. Challenge to the rejection of the technical bid of the petitioner by the respondent is primarily on two grounds—

(i) that the Company alongwith its subsidiary has all the requisite qualification and experience and the reason stated by the respondent for rejection of the technical bid that the Core Education and Consulting Solution Incorporate having the requisite experience certificate is not the experience certificate of CORE Projects and Technologies Ltd i.e the present petitioner is misplaced. Treating Core Education and Consulting Solution to be a different entity and experience gained by them not being of any value to the present petitioner seems to be doing violation not oniy to the terms and conditions of the notice inviting tender but even the requisite provisions, under the Indian Companies Act.

(ii) the other ground of challenge is the extension of time for opening the bids by the respondent which, according to the petitioner, has created an unfair situation for him. In addition, the extension of time, according to the petitioner, was to accommodate respondent No. 5 who is the final beneficiary of such extension.

3. Before the Court embarks upon the exercise of dealing with nitty-gritty of various submissions made on behalf of the petitioner, it would like to reproduce Clause 17 of the notice inviting tender which deals with eligibility criteria.

17. Eligibility Criteria.—The bidder shall meet the following criteria for eligibility:—

(a) The bid shall be submitted by an individual organization only. Consor tium is not allowed. For supply of Hardware, peripherals and other equipments/materials the education service provider may have a back end tie-up with the manufacturer/supplier, however for the bidder will be responsible in totality.

(b) The bidder should be an Information Technology & Communication Company & specializing in IT learning services with adequate experience of executing similar projects for at least 300 schools. School should be acknowledged by Government as of 31st Dec, 2009.

(c) The bidder should have an average annual sales turnover of INR 100, Crores and above in the last three financial years.

(d) The Net Worth of the bidder should be positive. The bidder is required to submit its audited, balance sheet or copy of the annual report duly signed in original by the authorized signatory.,

(e) The bidder must have experience of completed/executing dually supported by Acceptance Test document at least any one of the following:—

1. Project of comprising of hardware, system software, trainer and learning services of Rs. 20 Crores.

2. Project of comprising of hardware, system software, trainer and learning services of Rs. 10 Crores.

3. Project of comprising of hardware, system software, trainer and learning services of Rs. 7 Crores.

(f) References (contact details, cus tomer completion certificate, customer satisfaction certificates etc.) for these projects shall be provided. Projects ex ecuted for bidder's own, bidder's group of companies or bidder's JV companies shall not be considered.

(g) Qualification of Hardware (Server/Desktop) supplier.— Should have ISO 9001 certification, as OEM with experience of supply & multilocational installation at minimum of 400 different sites in the State of Bihar.

(h) The bidder must have had at least 100 employees on roll over each of the last three years (as on December 31, 2009, 2008 & 2007).

(i) The bidder shall have Quality certification from an accredited and internationally reputed/renowned firm (viz. ISO 9001 and ISO 14000).

(j) The bidder should have office in Bihar. In case bidder has no presence in Bihar, bidder shall furnish an undertaking that an office shall be opened in Bihar, with sufficient personnel and inventory of spares within a month of selection as Successful Bidder.

(k) The bidder shall have bank's certificate of solvency.

(l) The bidder must have company registration certificate, registration under. Labour Laws, Contract Act, valid sales tax registration certificate and valid service tax registration certificate.

4. Reading of Clause 17(a) indicates that the bid has to be submitted by individual organization only. Consortium is not allowed. Clause (b) states that bidder should be an Information Technology &. Communication Company specializing in IT learning services with adequate experience of executing similar projects for at least 300 schools. School should be acknowledged by Government as of 31st December 2009. Other clause which also must be emphasized is Clause 17(f).

5. Clause 17 ft).—References (contact details, customer completion certificate, customer satisfaction certificate etc.) for these projects shall be provided. Projects executed for bidder's own, bidder's group of companies or bidder's JV companies shall not be considered.

6. Submission of the learned Senior Counsel representing the petitioner is that a reading of various clauses of eligibility criteria leads to only one conclusion that the only bar for participation in the bid by any company is to a consortium. The bidding which has been made by the peti tioner includes experience of its subsidi ary company, which is not prohibited. The definition clause which is Clause 2 of the notice inviting tender defines ‘affiliate’ as under:—

“Affiliate” shall mean any holding company or subsidiary company of a party to the Agreement or any company, which is subsidiary of such a holding company. The expressions “holding company” and “subsidiary company” shall have the meaning specified in Section 4 of the Companies Act, 1956 (as amended from time to time).

7. A plain reading of the said word coupled with Section 4 of the Companies Act would show that the subsidiaries or the holding companies would be treated as one identity and they have the eligibil ity to participate in the bid. The stand taken by the respondents that the present petitioner does not have the eligibility be cause they have annexed the experience certificate of an affiliate or a subsidiary company which is registered in America would be in breach of the notice and the terms of eligibility, taken note of in earlier part of the order.

8. Learned Senior Counsel represent ing the petitioner on the basis of some of the documents which have been brought on record, specially certification of the auditors, submits that the Core Education and Consulting Solution Incorporate is a limb and part of the present petitioner. Though it may have been incorporated in United States of America but the present company is the holding company and for all practical purposes the experience gained by that company, ought to be treated as experience gained by the present peti tioner. The report of the Chartered Ac countant would show that there are various companies under the umbrella of the present petitioner. They have been sub mitting balance sheet and accounts in a consolidated fashion and that would be in terms of the requirement of Section 212 of the Indian Companies Act. The effort on the part of the Beltron to treat the American subsidiaries as a separate entity is not supported by the law of the land or the eligibility criteria read-with defi nition of ‘affiliate’ given in the notice invit ing tender.

9. Learned Senior Counsel for the petitioner relies on a few decisions in sup port of the proposition that a subsidiary company is as much a part of the holding company and they ought to be treated as one entity and their experience ought to be included for consideration for eligibility and experience. Some of those decisions are the case of State of U.P v. Renusagar Power Co., (1988) 4 SCC 59. Emphasis is on paras 62, 66 and 67:—

62. In Charterbridge Corpn. Ltd. v. Lloyds Bank Ltd. at page 1194 Justice Pennycuick emphasized that the reality of the situation must be looked in.

66. It is high time to reiterate that in the expanding horizon of modern jurisprudence, lifting of corporate veil is permissible. Its frontiers are unlimited. It must, however, depend primarily on the realities of the situation. The aim of the legislation is to do justice to all the parties. The horizon of the doctrine of lifting of corporate veil is expanding. Here, indubitably, we are of the opinion that it is correct that Renusagar was brought into existence by Hindalco in order to fulfil the condition of industrial licence of Hindalco through production of aluminium. It is also manifest from the facts that the model of the setting up of power station through the agency of Renusagar was adopted by Hindalco to avoid complications in case of take over of the power station by the State or the Electricity Board. As the facts make it abundantly clear that all the steps for establishing and expanding the power station were taken by Hindalco, Renusagar is wholly owned subsidiary of Hindalco and is completely controlled by Hindalco. Even the day-to-day affairs of Renusagar are controlled by Hindalco. Renusagar has at no point of time indicated any independent volition. Whenaver felt necessary the State or the Board have, themselves lifted the corporate veil and have treated Renusagar and Hindalco as one con-cern and the generation in Renusagar as the own source of generation of Hindalco. In the impugned order the profits of Renusagar have been treated as the profits of Hindalco.

67. In the aforesaid view of the matter we are of the opinion that the corporate veil should be lifted and Hindalco and Renusagar be treated as one concern and Renusagar's power plant must be treated as the own source of generation of Hindalco and should be liable to duty on that basis. In the premises the consumption of such energy by Hindalco will fall under Section 3(1)(c) of the Act. The learned Additional Advocate-General for the State relied on several decisions, some of which have been noted.

10. The other decision is the case of New Horizons Limited v. Union of India, (1995) 1 SCC 478 (para relied on are 23, 25 and 26 of the said decision). Other cases are Reliance Energy Ltd. v. Maharashtra State Road Development Corpn. Ltd., (2007) 8 SCC 1 and the decision rendered by Justice Denning in the case of D.H.N Food Distributors Ltd. v. Tower Hamlets London Borough Council, (1976) 1 WLR 852.

11. Coming to the other aspect which has been urged and hammered forcefully is the conduct of the respondents in extending the date for submission of the tender twice over. Original date of submission i.e 8.3.2010 was extended till 10.3.2010 up to 12 PM and yet another extension was granted to 16.3.2010 till 1 PM.

12. Senior Counsel Mr. Lalit states that according to the notice inviting tender the dates given therein were to be treated as final and the same cannot be extended, which has been done for extraneous consideration. The extended period of time has given undue benefit to the private respondent since he did not upload his bid within the original notified date which was 8th March,.2010. He did so in the extended time frame after 8th of March, 2010 and this has also created unfair competition as only two participants had filed their bids by the fixed time frame of 8th of March, 2010. There is a categorical provision in Clause 12, which states that any bid received by the tenderer after time and date for receipt of the bids prescribed in the RFP (Request for Proposal) document shall be rejected and returned unopened to the bidder. Respondent No. 4 ought not to have extended the time for submission of the bid and even if the bid was submitted it was fit for rejection.

13. The Court is also informed that pre-bid meeting was held. The various suggestions and amendments proposed by the persons who had expressed their interest in the tender participated and the pre-bid meeting led to certain amendments which shall be reflected from Annexure-5 of the writ application. The pre-bid meeting held on 6.3.2010 crystallized every thing. At that point of time there was no indication that the original time frame for submission of bid would not be maintained.

14. Learned Senior Counsel for the petitioner has made yet another submis sion with regard to pre-bid meeting. The suggestions made by the various bidders on the clauses of the notice inviting ten der and the corresponding amendment/modification or clarification which was reached, petitioner too had submitted prebid queries and clarifications in terms of Annexure-3. The amendments/modifications are Annexure-4 to the writ application. It is his stand that based on his pre-bid queries and clarifications the clause deal ing with the firm experience contained in Annexure-5 stood changed to ‘locations’ from the terminology ‘located within the country’. According to the counsel there fore, this has widened the ambit and helps the petitioner in the manner that the firm's experience and assignment now can be considered with regard to any location even globally.

15. The court fails to understand that how the said modification contained in Annexure-4 has the effect of modifying clause 17(b) of the notice inviting tender which still stood as it originally was mean ing thereby the bidder's firm had to be an information technology and communication company specializing in IT learning serv ices with adequate experience of execut ing similar projects for at least 300 schools. The schools had to be further acknowledged by Government as on 31st December, 2009. Mere change of the word from location within the country to location does not make global experience, in conformity with Clause 17(b). This submission of the petitioner to justify experience of Core Education and Consulting Solution Incorporate to be meeting the requirements of the notice/inviting tender seems to be totally misplaced.

16. Counter affidavit has come to be filed both on behalf of respondent No. 4 i.e Beltron as well as the private respondent No. 5. Stand of respondent no. 4 is that whatever decision has been taken by the tender committee is in conformity with the terms and conditions of the notice inviting tender. Rejection of the petitioner's technical bid is because of the non-fulfilment of the clear terms of eligibility laid down therein. So far as the eligibility of respondent No. 5 is concerned, it is not under challenge. What is required to be answered is whether there were cogent and valid reasons for rejecting the technical bid of the petitionee as they failed to demonstrate the basic eligibility as envisaged under Clause 17 of the notice inviting tender.

17. According to learned Advocate General representing respondent No. 4, the terms of Clause 17(a) clearly indicate that the bid has to be submitted by the individual organization and clause (b) indicates that the said bidder must have adequate experience of executing similar projects for at least 300 schools which are acknowledged by Government as of 31st December, 2009. The documents which have been filed by the present petitioner do not indicate that they have any adequate experience of executing similar projects duly acknowledged by Government as of 31st December, 2009. The experience shown by the present petitioner is of the Core Education and Consulting Solution, incorporated in United States of America, having executed projects in the United States. They do not indicate that they have any experience of execution of projects, acknowledged by the Government. Stand of the learned Advocate General is that even if a broad meaning to the word ‘Government’ is given then it has to be either the Government of Bihar or the: Government of any State within the territorial boundaries of the Country and may be Government of India but the same cannot be read to mean Government of United States of America.

18. Submission of the learned Advocate General is that reading of Clause 17(a), (b), (e) and (f) together would make it very clear that respondent Beltron were looking for an organization having capacity, eligibility and experience in their own right. Certain serious doubts have already been expressed about the status of the so-called Core Education and Consulting Solution. The core object of the notice inviting tender is to provide opportunities to rural and urban Government schools within the State of Bihar, at the level of secondary or senior secondary level across the State to be imparted computer education and literacy. They do not want to deal with an organization of having no exposure or experience of such kind within the country. A kind of procured experience, or status of a company located and registered under the law of United States of America may not be enough to confer or accept that the present petitioner has eligibility and experience of the execution of the projects of the kind.

19. Learned Advocate General also brings to the notice of this Court the so-called balance sheet and the, certification of the Chartered Accountant which has been included as part and parcel of the writ application. He points out that there are certain significant expressions which have been used by the auditors. In their report they have described the so-called company as a group of companies as would be evident from perusal of page 214 of the writ application. Effort by the present petitioner to pass off the experience of another company incorporated and registered in the United States as a subsidiary would not be doing justice to the eligibility clause contained in Clause 17 especially Clause (a).

20. Reliance is placed on a few decisions with regard to ambit and scope of a writ court in adjudication of such disputes. Attention of this Court has been drawn to the case of Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617. According to the counsel, para 7 has significance for the question and issue raised in the present writ application:—

7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, (1981) 1 SCC 568, CCE v. Dunlop India Ltd., (1985) 1 SCC 260 : 1985 SCC (Tax) 75, Tata Cellular v. Union Of India., (1994) 6 SCC 651, Ramniklal N. Bhutta v. State of Maharashtra, (1997) 1 SCC 134 and Raunaq International Ltd. v. I.V.R Construction Ltd., (1999) 1 SCC 492. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily: Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.

21. Other decisions relied upon by respondent No. 4 is the case of Master Marine Services v. Metcalfe & Hodgkinson Pvt. Ltd., 2005 (3) PUR (SC) 97 (especially paras 11, 12 and 13) and B.S.N Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548.

22. A reading of the above decisions would show that unless there is something fundamentally wrong with the decision-making process the commercial interest of the party inviting tender notice will have to be looked into and certain amount of play in the joint will have to be allowed. If the decision taken by the respondent No. 4 is not shown to be extraneous or arbitrary but on a bona fide interpretation of eligibility clause then merely because the petitioner has lost out in his effort at the bid at the technical stage, it would not serve the purpose of justice by carrying out an exercise of re-evaluation or to sit in appeal over the decision.

23. The other aspect which was raised by the petitioner is with regard to legality of extension of time. Averment made in the counter affidavit is that said extension was granted on the basis of a request made by the petitioner himself. The peti tioner had prayed for extension of time by at least a week in the communication dated 9th of March, 2010. But it was not only the request of the petitioner for ex tension of time that compelled the re spondent Corporation to extend the dates. The extension of date had to be made because the Corporation received com plaints that the speed of the server and the time being taken for submission of E-tender was an issue because of the sub-optimal speed of data transfer. As the volume of data to be uploaded on the server of the corporation on behalf of the tenderers was big and not all tenderers were successful in uploading the data within the original time frame, the matter was considered with due fairness and dispassion and in the larger interest of pro viding opportunity to the maximum number of participants, who had expressed their interest in the notice inviting tender. The only reason why the petitioner is making a hue and cry on the issue of extension of date is because somehow he did man age to upload his data on the server be fore 8th March, 2010. He did not want any other competitor to participate in the tender on the spacious plea that no time could be extended to the original notification. Petitioner very conveniently glossed over the fact that a request for extension of time on 9th March, 2010 was made looking at the various formalities and docu mentation including the bank guarantee which was to be organized by them.

24. The Court has no hesitation in recording that there was no motive or ex traneous reason for extending the time for participation in the bid in question. There are satisfactory explanations and reasons for doing so and the benefit of the ex-tended time was extended to one and all. Even the petitioner took advantage thereof. The extension of time was not discriminatory. Except the allegation that the extension was with the object of accommodating respondent No. 5 there is no evidence to prove it. At best it is petitioner's hunch. This aspect of the matter therefore deserves to be rejected.

25. Before dealing with the first submission of the petitioner with regard to their eligibility vis-a-vis so-called subsidiary company and their experience, the Court would like to take note of some of the submissions made by the learned Senior Counsel representing respondent No. 5. He submits that at a belated stage an effort has been made by the petitioner company to show that they have some experience in India, with regard to execution of such projects. The experience certificates are annexed as Annexures-13 and 13/1. Annexure-13 is an experience certificate issued by the State of Nagaland where very few schools were the issue. So far experience certificate regarding Annexure-13/1 is concerned, it is stated that the same is only a letter of intent issue by the State of Maharashtra and the petitioner is yet to start the work in that State. The stand of the learned Senior Counsel on behalf of respondent No. 5 is that the parties are bound by the terms and conditions of the contract. Eligibility criteria reads clearly. The interpretation sought to be given by the petitioner is to expand the area of eligibility and to smuggle in the experience of a so-called company located and incorporated in United States of America. It would be doing violence to the object and the terms of the notice inviting tender.

26. Sum essence of the eligibility criteria is that the respondent Beltron were looking at a company which has requisite wherewithal, with regard to execution of projects in the Government schools of the State of Bihar. They want experience of that company in similar working environment and they would like experience of such company within India to be considered and evaluated. It is also the submission that effort of the petitioner is to somehow grab the tender even without fulfilling all the eligibility criteria mentioned in the notice inviting tender. Learned counsel relies on the ratio of the decision of Air India Ltd. (supra) which is a complete answer.

27. After having examined the propo sitions as well as the ratio which has been laid down in the cases relied by the learned counsel for the petitioner, which is the case of State of U.P v. Renusagar Power Co. (supra) and New Horizons Limited v. Union of India (supra), the Court expresses its opinion that the propositions laid down by the Hon'ble Su preme Court therein is dependent upon the facts of those cases. The eligibility or otherwise of the present petitioner will have to be considered within the strict param eters of Clause 17 of the notice inviting tender. There may not be a legal bar to a company or an affiliate strictly participat ing in a tender but it is not mere participation which is of importance because Clause 17(a) & (b) categorically state that bid has to be made by an individual organization only, coupled with the fact that it is that individual organization which must have experience in execution of projects in terms of Clauses (b) and (f). In other words, the Corporation respondent no. 4 was looking for a bidder in its individual capacity having requisite experience of executing projects duly acknowledged by Government on a cut off date i.e 31st December, 2009.

28. The effort of the petitioner to pass-off the experience of an incorporated company in the United States in the garb of an affiliate or a subsidiary may not be good enough, even if some of the decisions relied upon by the learned counsel for the petitioner does not make much of a distinction between holding company and subsidiary. The terms and conditions of the notice inviting tender are of importance in adjudication of such matters. If the stand of the respondent Beltron in their counter affidavit coupled with the reading of Clause 17 indicates that the so-called experience does not satisfy the eligibility which was being looked for by the respondents, then it is not for this Court to give an interpretation which subserves the purpose of the petitioner.

29. The reasoning provided for rejection of the technical bid by the respondents seems to be based on rationale and cogent reasons. The Court is not satisfied with the submission of the counsel for the petitioner that rejection was for extraneous reason or based on whims, caprice and suffers from irrationality. The view taken by the respondent Beltron for rejection of the technical bid of the petitioner is a view possible by reading various clauses of the notice inviting tender. No case for interference therefore is made out with the decision of respondent no. 4 in rejecting the technical bid of the petitioner.

30. The writ application has no merit. It is dismissed accordingly.