THEME ENGINEERING SERVICES PVT LTD vs NATIONAL HIGHWAYS AUTHORITY OF INDIA
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 16772/2023
M/S THEME ENGINEERING SERVICES PVT LTD
….. Petitioner
Through: Ms. Nandadevi Deka, Advocate.
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA
….. Respondent
Through: Ms. Madhu Sweta and Ms. Astha
Dhawan, Advocates for NHAI
% Date of Decision: 7th February, 2024.
CORAM:
HON’BLE THE ACTING CHIEF JUSTICE
HON’BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
MANMOHAN, ACJ : (ORAL)
CM APPL. 5827/2024
1. The present interlocutory application has been filed by the Petitioner seeking directions to the National Highway Authority of India (NHAI) i.e., Respondent Authority to consider all pending bid(s) including the ones mentioned in Para 3 (b) and (c) of the present application and permit it to correct the typographical error in its bid(s). Further, Petitioner as an alternative to the said relief, seeks direction to the Respondent Authority to keep in abeyance the bidding process for projects where the Petitioner has inadvertently submitted the wrong % Joint Venture (JV) share in the table of bid capacity pending adjudication of the present writ.
1.1. The Petitioner contends that the Respondent Authority has proceeded to penalize the Petitioner in all project(s) by declaring the Petitioners bid(s) as non-responsive for the same inadvertent typographical error in the table of Bid capacity in the bid document.
1.2. As per the Petitioner, the said action of the Respondent Authority is mala fide as the issue of the said inadvertent typographical error is sub-judice before this Court, where in identical facts, the Petitioner was disqualified for the subject project i.e., New Double Tier 4-Lane Elevated Corridor from Chennai Port to Maduravoyal in Chennai District from Km 0+342 to Km 20+593 on EPC mode under Bharatmala Pariyojana in the State of Tamil Nadu.
Arguments of the Petitioner
2. Learned counsel for the Petitioner states that vide order dated 26th December, 2023, Respondent Authority arbitrarily disqualified the Petitioner for the subject project for an inadvertent and inconsequential typographical error which relates to mention/entry of wrong % of JV share submitted in the table of Bid capacity [as per Appendix B-11] in the Bid document.
2.1 She states that the Respondent Authority has proceeded to penalize the Petitioner in all other projects, by declaring the bid non-responsive in the projects where bids were opened; for the same inadvertent typographical error under the garb of its Policy Circular dated 29th December, 2023. She states that the said Circular being an administrative decision cannot be made applicable with retrospective effect to the bid(s) submitted by the Petitioner prior to the issuance of the said circular.
2.2 She states that no clause in the Request for Proposal (RFP) envisages disqualification on the submission of wrong % of JV share in the table of Bid capacity [as per Appendix B-11]. She states that as per Note (3)(v) in Section 1 of the RFP the evaluation of the bid capacity is to be carried out right until the date of the opening of the financial bids. She states therefore, correction/updation in information pertaining to Bid capacity is envisaged under the RFP up to the date of the opening of the financial bid.
2.3 She states that the Petitioner, on its own accord, informed the Respondent Authority about typographical error in the Bid capacity for the projects vide letters dated 11th December, 2023. She states that the said error was notified prior to the opening of the financial bids. She states that the Petitioner is otherwise technically eligible to participate in the bidding for the pending projects.
2.4 She states that the Petitioner has already been declared non-responsive in the subject project and three (3) other projects. She states that the Petitioner has been sufficiently penalized for the inadvertent typographical error by the disqualification in four (4) projects.
2.5 She states on instructions that the Petitioner undertakes not to challenge its disqualification in the projects where financial bids have already been opened or cancelled. She however, states that a direction be issued to the Respondent Authority to consider the Petitioners bid(s) for the project mentioned at paragraph 3(b) of this application and all pending projects.
Arguments of the Respondent Authority
3. In reply, learned counsel for the Respondent Authority states that under the terms of the RFP, it is impermissible for the bidder to revise information pertaining to its % share in the JV after the submission of the bid. In this regard, she specifically relies upon Clause 13(C) of the RFP.
3.1 She states that therefore, the reliance placed by Respondent on the letters issued on 11th December 2023 for correcting the wrong information [in the table filed as per Appendix B-11] is impermissible and the bid(s) of the Petitioner cannot be considered. She states that the Policy Circular dated 29th December, 2023 is a reiteration of the Policy Circular dated 12th August 2022 and does not prescribe any new conditions. She states that as per the said circular, no revision in the % share of the JV partners is permissible after the submission of the bids.
3.2 She relies upon the judgment of Supreme Court in W.B. State Electricity Board v. Patel Engineering Co. Ltd. & Ors.1 to contend that a bidder cannot be permitted to correct errors in Bid documents.
Analysis and Findings
4. This Court has considered the submissions of the learned counsel for the parties and perused the records.
5. The Petitioner in its submission of bids for Project Consultancy Services worked out its technical Bid capacity at 18.35 in the Appendix B-11 filed with the bid. The Appendix B-11 contained 17 entries pertaining to the projects in hand with the Petitioner. However, before opening of the financial bid, the Petitioner realised that there was a typographical error while indicating its share as a JV partner in respect of the project services for Jhaki-Sarghi Section (entered at serial no.09 of Appendix B-11). The said % share in the JV was wrongly mentioned as 0.4 (i.e. 40%) instead of the correct data 0.7 (i.e., 70%). The Petitioner had repeated this error in all the bids submitted by it until November, 2023.
6. The Petitioner issued letters dated 04th December 2023/11th December 2023 to the tendering authority of the Respondent for each of the projects owning up to the said error. The financial bids had not been opened in any of the projects, at this stage. The Petitioner submitted that after accounting for the error, upon recalculation the Bid capacity of the Petitioner works out to 18.05 instead of 18.35. It was submitted that the Petitioner remained eligible to participate in the bid as it would have spare capacity to undertake additional 18 projects.
7. The Respondent Authority however, did not permit the correction relying upon the decision of the Executive Committee (EC) of NHAI in its meeting held on 15th December, 2023; and disqualified the Petitioner in the subject project vide order dated 26th December, 2023. The very same decision of the EC now forms part of the Policy Circular dated 29th December, 2023.
8. The Petitioner already stands disqualified in the subject project and three (3) other projects due to the said repeating error as Respondent Authority has rejected the bids of the Petitioner as being non-responsive.
9. The Petitioner in the present application has prayed that in the pending bid(s), where financial bid(s) have not been opened, the Petitioners letter dated 11th December 2023 correcting the inadvertent error with the amended Appendix B-11 be accepted and the Petitioners bid(s) be considered by the Respondent Authority.
10. The Respondent had relied upon Clause 13 (C) of the RFP to contend that a bidder is precluded from revising the information as regards % of JV shares after submission. The Respondent has also relied upon the NHAI Policy Circular dated 10th November 2023 to the extent it clarifies a circular dated 12th August 2022. It is submitted by the Respondent that Policy Circular dated 29th December 2023 is in furtherance of the circular dated 10th November 2023.
11. For the purpose of declaration and computation of technical bid capacity, the Respondent has also relied upon the Policy Circulars dated 25th April 2022 and 10th November 2023, to the extent the latter clarifies the circular dated 25th April 2022.
12. The Petitioner herein committed an error while furnishing information and declarations for assessment of its Technical Capacity. The relevant clause governing the said declaration of information for assessing the Technical Capacity is Clause 15 (C) (i) to (vii) of the RFP. Appendix B-11 is furnished by the bidder in pursuance of Clause 15 (C) (vii). For the purpose of the said Appendix B-11, the Policy Circulars dated 25th April 2022 and 10th November 2023 are relevant.
13. We are of the considered opinion that Clause 13 (C) of the RFP and the related Policy Circulars, relied upon by the counsel for the Respondent, has no application to the declaration of % JV shares, which a bidder is required to file in Appendix B-11.
14. Clause 13 (C) of the RFP operates in a distinct and a separate sphere. The said Clause 13 (C) read with Clause 12 of the RFP permits bidders to apply either as a sole firm or forming Joint Venture (JV) with other consultants. A bidder who intends to apply as a JV under this clause is obliged in its bid to pre-declare the inter-se share(s) among the Lead/JV partner/Associate partner.
15. For instance, in the facts of this case for the subject project the Petitioner had applied for the bid as a JV in a joint venture with M/s Hexa Private Joint Stock Company (Hexa) and in association with M/s Casta Engineers Pvt. Ltd. The Petitioner in its bid submitted on 11th September 2023 declared that in the JV between the Petitioner and Hexa, their shares have been determined as 65% and 35 % respectively. It is this declaration of the share ratio of the [bidding] JV partners which cannot be changed under Clause 13 (C) and is prohibited. This becomes plainly evident from the Policy Circular dated 12th August,2022 which reads as under:
Ref: The standard RFP documents for engagement of Authority Engineer, Independent Engineer & DPR Consultants for NH works vide MoRTH letter dated 15.02.2019.
The issue of amendment/modification of the share of JVs after the award of contract have been noticed. In order to have common approach within NHAI for Evaluation of Technical Bids in Consultancy Assignments, the following addendum to the RFP documents for Consultancy Assignments are hereby issued: –
(a) Add another Para after Para 13 at Page No. 3 of Information to Consultants of IE/AE RFP documents:-
The bidder cannot revise their share among Lead/JV partner/Associate partner, which was declared at the time of bidding/award of respective consultancy assignments. Further, maximum limit of share of associates shall be limited to their actual assignments w.r.t provision of standard RFP subject to a maximum of 25% of contract amount.
b) Add Clause 1.8.6 at Page No. 5 of Letter of Invitation (LOI) of DPR RFP documents:-
The bidder cannot revise their share among Lead/JV partner/Associate partner, which was declared at the time of bidding/award of respective consultancy assignments. Further, maximum limit of share of associates shall be limited to their actual assignments w.r.t provision of standard RFP subject to a maximum of 25% of contract amount.
2. The amended format for Memorandum of Understanding (MOU) as Appendix-M (AE/IE documents) is attached herewith.
3. All concerned Technical Divisions shall make appropriate amendments to the RFP documents of Consultancy Assignments while inviting bids.
(Emphasis supplied)
16. This is the continuing intention of the Policy Circulars dated 10th November, 2023 and 29th December, 2023. The relevant portion of the Policy Circular dated 29th December, 2023 reads as under:
Ref: (i) NHAI Policy Circular No. 11.41/2022 dated 12.08.2022
(ii) NHAI Policy Circular No. 10.1.37/2023 dated 10.11.2023
In order to have common approach in NHAI during evaluation of bids for consultancy assignments, regarding the amendments/modifications of share of JVs after award of the work, Policy Circular No. 11.41/2022 dated 12.08.2022 was issued specifying as under: –
The bidder cannot revise their share among Lead/JV partner/Associate partner, which was declared at the time of bidding/award of respective consultancy assignments. Further, maximum limit of share of associates shall be limited to their actual assignments w.r.t. provision of standard RFP subject to a maximum of 25% of contract amount.”
2. Further, vide Policy Circular No. 10.1.37/2023 dated 10.11.2023, it has been clarified that:
“The bidder cannot revise their share among Lead/JV partner after submission of bids.”
3. The issue regarding submission of wrong JV shares in the bids submitted by Consulting Firms was deliberated in 594th EC meeting and it has been decided that in case of submission of wrong JV shares in the consultancy bids, the bids will be declared as non- responsive.
4. In view of above, directions are hereby issued to all concerned for strict compliance that in case of submission of wrong JV shares in the bids of consultancy assignments, the bid shall become non-responsive and other bids will be processed following the due procedure.
(Emphasis supplied)
17. However, the Petitioner by its letters dated 04th December 2023/11th December 2023 is not seeking to make any change to the shares of the participating JV partners as declared in its pending bid(s) in pursuance of Clauses 12 and 13 of the RFP. Therefore, the reliance placed by the Respondent Authority on Clause 13 (C) of the RFP and the Policy Circulars dated 12th August, 2022, 10th November, 2023 and 29th December, 2023 is erroneous; as it is inapplicable to the facts of this case.
18. The correction sought to be carried out by the Petitioner is for the information filed by it in Appendix B in pursuance to Clause 15 (C) (vii) of the RFP. The fact that Clause 15 (C) (i) to (vii) operates in a distinct sphere from Clause 13 (C) is evident from the fact that the information to be furnished under Clause 15 (C) is permitted to be updated until the opening of the financial bid. This is also evident from Policy Circulars dated 25th April, 2022 and 10th November 2023, to the extent it clarifies circular dated 25th April, 2022.
19. The Respondent had not disputed that upon rectification of the error in the information furnished for assessing Technical Bid Capacity [at Appendix B-11], the Petitioner would remain eligible for consideration of award of 18 contracts. We are of the considered opinion that the error was a mistake and not malicious, as no unjust preference has been earned by the Petitioner due to the said error; as the Petitioner continued to have sufficient bid capacity even after the rectification.
20. The reliance place by Respondent on W.B. State Electricity Board (supra) is distinguishable. In the said case, the bidder sought to make correction of its mistake after 1½ month of the opening of the bid. However, in the present case, the Petitioner has carried out the correction prior to the opening of the bids. In fact, in the same judgment the Supreme Court has recognised an exception in favour of a bidder who acts promptly and requests for a rectification before opening of all bids. The relevant paragraph discussing the said exception is read as under:
27. Exceptions to the above general principle of seeking relief in equity on the ground of mistake, as can be culled out from the same para, are:
(1) Where the mistake might have been avoided by the exercise of ordinary care and diligence on the part of the bidder; but where the offeree of the bid has or is deemed to have knowledge of the mistake, he cannot be permitted to take advantage of such a mistake.
(2) Where the bidder on discovery of the mistake fails to act promptly in informing to the authority concerned and request for rectification, withdrawal or cancellation of bid on the ground of clerical mistake is not made before opening of all the bids.
(3) Where the bidder fails to follow the rules and regulations set forth in the advertisement for bids as to the time when bidders may withdraw their offer; however where the mistake is discovered after opening of bids, the bidder may be permitted to withdraw the bid.
(Emphasis supplied)
21. The statement of the Petitioner that it shall not challenge its disqualification from the tenders in which financial bids have already opened and where the Petitioner has already been disqualified is taken on record and it is bound down to the same. In view of our findings above, the Respondent Authority is directed to open the bids of the Petitioner in all other pending bids where financial bids have not been opened. The Respondent Authority is directed to take into consideration the information submitted by the Petitioner by its letters dated 11th December, 2023 in the pending bids correcting the information pertaining to its Technical Capacity in Appendix B-11.
22. Accordingly, with the aforesaid direction, the present CM APPL 5827/2024 is disposed of.
ACTING CHIEF JUSTICE
MANMEET PRITAM SINGH ARORA, J
FEBRUARY 7, 2024/msh/sk
Click here to check corrigendum, if any
1 (2001) 2 SCC 451.
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