TaxTMI 
TaxTMI 
2019 (9) TMI 271
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.... 2006 and is engaged in design, supply, installation, testing, commissioning and maintenance of security, surveillance, traffic law enforcement and civil aviation equipments/videoscopes. The petitioner claims that it has successfully supplied, installed, tested, commissioned and maintained the said equipments in Government departments like SPG, NSG, AAI and other police departments. 3. The genesis of the petition starts from the day the Central Board of Excise and Customs ('CBEC'), Directorate of Logistics Lok Nayak Bhawan had floated an e-tender no. 30/EQ/2018 dated 22.3.2018 for supply, installation and maintenance of 74 videoscopes at various field formations of CBEC. The videoscopes are used by custom officers to examine the goods at sea ports, air cargo complexes, inland containers depots, etc. and assist in identification and detection of contrabands and smuggled items. 4. The tender was valid for acceptance for a period of 180 days from the date of tender opening, so prescribed in the tender document. The tender bids were to be submitted online only at the CPPP website. As per Clause 2.18.11 the tenderer had to submit the technical bid as per Form-I of Section X along ....
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....reasons for such action. Not getting any favourable response the petitioner filed the present writ petition with the following prayers:- "(i) to issue a writ of mandamus and certiorari order direction thereby setting aside the impugned order issued by respondent no. 1 awarding the contract to Respondent No. 2 under E-tender No. 30/EQ/2018 dated 22.3.2018. (ii) to issue direction / order to the respondent no. 1 to place before this Hon'ble Court the original records pertaining to the subject contract E-tender No. 30/EQ/2018." 9. On 18.12.2018, notice was issued to the respondents and the award of contract was made subject of the outcome of the writ petition. 10. Learned senior counsel for the petitioner contends that the contract has been wrongly awarded to respondent No. 2 despite the fact that the price quoted by the petitioner was less than the price quoted by respondent No. 2. In fact, in doing so a loss of Rs. 61.30 lakhs has been caused to the Government Exchequer. He submits that the Price Schedule and Centralised Comprehensive Annual Maintenance Contract (hereinafter referred to as 'CCAMC') under Section VIII submitted along with the bid would clearly....
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....ntion of this Court to Clauses 2.13.2 and 2.13.3 of the tender documents. He submits that as per the tender condition, the tenderer was to indicate the custom duty assessed by him for the videoscope in question and a tentative amount should have been indicated in the proforma as on the date of opening of the technical bids. The custom duty was to be reimbursed later depending on the variation, if any, at the relevant time. He has also drawn the attention of this Court to Section X of the tender documents, which contains Form No. 1 of the tender forms and this Form contains the Instructions as per which the bids had to be submitted. Condition No. 3 clearly requires that the tenderer should fill in all columns of the Form along with supporting documents. Condition No. 5 provides that if any tender Form is incomplete the tender may be rejected. Thus, respondent No. 1 should have rejected respondent No.2's tender being non-responsive. 12. Mr. Sethi, next contends that there is yet another error in calculating the price bid of the petitioner. He submits that while calculating the custom duty respondent No. 1 has wrongly added 1% as landing charges and which has made a difference to t....
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....echnical bid opening, the petitioner had never raised any issue of non-availability of the technical bids on the CPP portal. 14. Mr. Sinha, learned counsel for respondent No. 1 submits that the price bids were evaluated as per Clause 2.29.2. The lowest tenderer L-1 was determined on the basis of Net Cash Outflow. He submits that a detailed calculation has been given in the reply affidavit in para 11 and a comparison of the prices of respondent No. 2 and the petitioner would show that respondent No. 2 was lower as his Net Cash Outflow was Rs. 12,43,17,149/- while that of the petitioner was higher being Rs. 12,45,29,536/-. Respondent No. 2 was correctly found as L-1 and awarded the contract. 15. Mr. Sinha further submits that the custom duty structure which was applicable was Basic Custom Duty = 7.5%, surcharge on Basic Custom Duty = 10% and IGST = 18%. Therefore, while evaluating the price bid of the petitioner the Custom Duty applicable was calculated as Rs. 2,78,398/- and was added to the cost quoted instead of Rs. 2,39,482/- (Custom Duty Rs. 51,348/- and GST Rs. 1,88,134/-), as mentioned by the petitioner in the price bid. He submits that it is clearly mentioned in the tend....
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....imed from the Government. Further it is explained that since the price quoted by respondent No. 2 was inclusive of custom duty, which includes duty on 1% Landing Charges, the said charges were not added to his price bid and thus it is not open to the petitioner to contend why the 1% Landing Charges were not added to the price bid of respondent No. 2. 18. Respondent No. 1 has in the affidavit also given a detailed comparative chart of the prices of the petitioner and respondent No. 2 indicating how the Net Cash Outflow has been calculated. It is explained that since the order was placed on respondent No. 2 exclusive of GST, the Authorities would have to reimburse the same at 18% and this being added, makes the Net Cash Outflow of respondent No. 2 as Rs. 12,34,22,346/-, which is less than the Net Cash Outflow of the petitioner being Rs. 12,35,90,163/-. 19. Respondent No. 2, who is the successful bidder and on whom the award has been placed on 12.11.2018, is represented through a counsel. Respondent No. 2 has filed its reply affidavit as well as an additional affidavit. It is stated in the affidavit that the award has been rightly placed on respondent No. 2 as he was determined ....
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....On the face of it thus the petitioner had claimed a higher GST and thus the price was higher. 21. Learned counsel for respondent No. 2 submitted that in the price bid, the column of custom duty had been left blank because it did not intend to import the goods initially and wanted to procure it locally. Though subsequently, the goods have been imported, but respondent No. 2 had no intent to claim any reimbursement from the Government on whatever custom duty he may have actually paid. Learned counsel clarifies that from the very beginning the prices quoted were all inclusive, and therefore, whether the goods have been imported or purchased locally, there is no prejudice to the Government nor any loss to the public exchequer. Learned counsel next contends that it was the petitioner who had actually wrongly quoted the custom duty. While the duty claimed in the price bid was Rs. 51,348/- but the fact of the matter is that this was on the lower side, only to make the bid lower than that of respondent No. 2. It is for this reason that subsequently respondent No. 1 had corrected the custom duty claimed by the petitioner and the adjusted amount was Rs. 75,283.38/-. 22. Learned counsel....
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....rties. 26. Learned senior counsel for the petitioner has relied upon a judgment of this Court in the case of Inderjit Mehta vs. UOI in W.P.(C) 5685/2015 decided on 1st September, 2015 for the proposition that in a judicial review, this Court can interfere in a tender matter and insofar as the relief is concerned, in case it is found that there is arbitrariness, a direction can be issued to the Government to declare the lowest bidder as L-1, as also to award the contract to the L-1 bidder. Reliance is also placed on another judgment of this court in the case of Times Innovative Media Ltd. vs. Delhi Transport Infrastructure Development Corporation Ltd. & Ors. in W.P.(C) 3973/20012 decided on 02.04.2013 for the proposition that even when a contract has been awarded to a successful bidder and the work has been executed to some extent, there is no absolute rule that the court cannot disturb that status in case it finds that the contract was awarded illegally and there was arbitrariness. This would be so, more particularly, when only a miniscule part of the tenure of the contract has been performed and the remaining tenure of the contract is long. 27. Per contra, learned counsel fo....
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....re. Reliance is placed on Raunak International Ltd. Vs. I.V.R. Construction Ltd. AIR 1999 SC 393 to contend that the lis is purely between two tenderers and a mere difference in the prices offered is not a ground for a court to interfere as these are more in the nature of commercial disputes. The courts must bear in mind that any interference would delay the proposed project and even escalate the cost involved. The judgment of the Apex Court in the case of Afcon Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd. and Anr. (2016) 16 SCC 818 is cited and it is argued that if the petitioner's plea is accepted it would be re-writing the tender conditions, which is not permitted in law. 31. We have heard learned counsel for the parties and examined the pleadings as well as the judgments cited by them. We may note here that the calculations and figures given by the respective parties are at variance with each other at certain places and we have culled out the calculations and the charts including the figures as they appear in the different pleadings. 32. We would firstly deal with the contention of the petitioner that the bid of respondent No. 2 was non-responsive on account....
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....te of opening of Technical Bids though the payment was as per actuals. Clause 2.13.6 also needs a mention as it provides that in case the purchaser finds that the duties and taxes have been mentioned incorrectly, it reserves the right to change it to the appropriate values and in that event, the price quoted by the tenderer will be adjusted accordingly. The clause also stipulates that if it is felt that the duties were mentioned incorrectly to gain unfair advantage, the tender would be liable to be rejected. The relevant clauses are quoted hereunder for ready reference: 2.10.1 The e-Tender shall be submitted online at Government of India's Central Public Procurement Portal, http://eprocure.gov.in. The tender shall be submitted in two covers. First cover will contain Technical Bid and Second cover will contain Price Bid. 2.10.2 Technical Bid i.e. first cover, shall, inter alia, contain the following: XXX XXX XXX (c) Tender Form as per Form-1 of Section X. XXX XXX XXX 2:10.3 Price bid shall be as per proforma given in Se....
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....e 2.25. Clause 2.25.2 relates to the Technical Bids being evaluated by the Tender Evaluation Committee and amongst other parameters, the Tender Evaluation Committee is required to assess as to whether the tender confirms to all the Instructions to the tenderers. We quote para 2.25.2(b) as under: "2.25.2 The technical bids will be evaluated by the Tender Evaluation Committee (TEC) to assess the following; XXX XXX XXX b) Does the tender conform to all the Instructions to Tenderers?" 35. Evaluation and award criteria is mentioned in clause 2.28. Clause 2.28.1 requires the technical bids to be evaluated on the basis of information and data provided in the bids as well as actual performance of the videoscopes being offered. The price bid is determined in accordance with clause 2.29. Clause 2.29.1 provides that price bids of those tenderers would be opened, who are found technically suitable. Clause 2.29.2 provides the methodology for determining the lowest tenderer (L-1) and is of great significance to decide the main controversy involved in the present petition. We quote clause 2.29.2 hereinunder for a ready reference: ....
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.... a document which is not legible but no additional documents can be submitted after the tenders are opened. Tenderers should therefore submit whatever documents they wish, in support of their tender along with-the tender itself. XXX XXX XXX 5. Any tender may be rejected if: a) The tender form is incomplete." 38. Having traversed through the different clauses relating to the terms and conditions governing the present tender, we find that the conditions mandate that the tenderers must read the Instructions given in Form 1 carefully before the tender forms are filled and the bids are submitted. The bidding process was a two-stage process, the first stage being the Technical Bid and the second being a Price Bid. Technically valid and responsive tenders could only be opened for Price Bids. After opening of the Price Bid, the tender was to be awarded to the lowest bidder (L-1). Section VIII provides two proformas in Part I and Part II. Part I relates to the price schedule while part II relates to CCAMC. We scan and place below the two proformas: 39. A bare perusal of the proformas above would show that there are 7 columns whi....
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....is stage refer to paras 3 and 5 of the Instruction to tenderers mentioned in Form -1 of Section X, as quoted by us above. It is clear from a reading of the Instructions that the tenderer was required to fill in all columns of the tender form, and if the tender form was incomplete, the same ought to have been rejected. In our view, when respondent No. 2 left the column of custom duty blank, this was an incomplete form and ought to have been rejected as non-responsive in terms of the above mentioned instructions to tenderers. 43. In this context we may also refer to Clause 2.13.3 which mandates the tenderer to indicate the tentative duties and taxes in the proforma as applicable on the date of opening of the technical bids. Subsequently, based on the actual and statutory variations the said figures can be varied by the purchaser. The rationale behind such clauses in the tender documents it to ensure that price bids are made with clarity. When the price bid in a tender is opened the purchaser should clearly know what is being quoted by the tenderers and the competing tenderers should also know with clarity each other's bids so that there is no controversy on determining who the L-1....
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.... and the petitioner it could have interpreted the blank column to state that he would claim custom duty, as it was paid by him and was a statutory due. We are afraid that in tenders such ambiguous biddings cannot be permitted. Had respondent No. 2 been genuine about its stand it would have mentioned in the custom duty column or elsewhere in the bid that the prices quoted were all inclusive and no reimbursement of custom duty would be sought. Thus, the contention of learned senior counsel for the petitioner that the bid was non-responsive and invalid has merit. 45. We are also in agreement with the contention of learned senior counsel for the petitioner that respondent No. 1 has wrongly levied 1% landing/loading charges to the price bid of the petitioner on notional basis. We have gone through the contents of the Circular dated 26.9.2017 issued by Central Board of Excise and Customs, wherein an amendment was carried out and it was stipulated that notional landing charges would not be levied and the landing charges would be specifically on the actuals. We are surprised to note the response of respondent No. 1 to this contention, that because the actuals were not known they had lev....
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.... the paper book respondent No. 1 has given the Net Cash Outflow for the petitioner as Rs. 12,45,29,536/- while for respondent No. 2 it is Rs. 12,43,17,149/-. We deem it appropriate to extract hereinunder the manner in which the net cash outflow has been worked out by respondent No.1: "Discounted CAMC Charges (in Rs.) S. No Payment Respondent 2. Total Cost of AMC (A) Discount Factor (B) Net Present Value (A/B) 1. 1^st Year CAMC Advance 3574422 1.19 3003716 2. 1^st Year CAMC Balance 3574422 1.3 2749555 3. 2^nd Year CAMC Advance 3890254 1.3 2992503 4. 2^nd Year CAMC Balance 3890254 1.41 2759045 5. 3^rd Year CAMC Advance 4234761 1.41 3003377 6. 3^rd Year CAMC Balance 4234761 1.54 2749845 7. 4^th Year CAMC Advance 4622336 1.54 3001517 8. 4^th Year CAMC Balance 4622336 1.68 2751390 9. 5^th Year CAMC Advance 5038660 1.67 2999202 10. 5^th Year CAMC Balance 5038660 1.83 2753366 TOTAL 42720866 28763516 GST 18% 7689756 5177433 ....
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....ondent No. 2, no custom duty has been added and no landing charges have been imposed. It is thus evident that it is the absence of these two factors that the contract price of respondent No. 2 has become lower than the petitioner, as rightly contended by learned senior counsel for the petitioner. Thus, the CAMC charge, is not the only factor which has resulted in the price difference between the two parties. In fact, as noted above the CAMC charges of the petitioner are on the lower side. Thus, the contention of respondent No. 1 that the price difference is on account of the CAMC charges which has determined the Net Cash Outflow and has resulted in respondent No. 2 being lower deserves to be rejected. 49. We may now deal with the only other contention of the official respondents as well as the successful tenderer that this Court cannot interfere in tender matters in judicial review and more particularly if it with respect to a public project or where substantial part the work is already completed. There cannot be a quarrel with the proposition of law that the Constitutional Courts cannot interfere with the Government's freedom of contract and the principals of Judicial Review ca....
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....ondent No. 2 on the judgment of the Apex Court in the case of Union of India Vs. Bharti Hexacon (supra), in our view, cannot be of any avail to respondent No.2. While it is true that the petitioner did not have an interim order in its favour restraining respondent No.1 from finalizing the award of tender, but on 18.12.2018 when notice was issued in the writ petition, this Court had clearly observed that the award of contract shall be subject to the outcome of the present writ petition. There is no doubt that the respondents had been put to notice on this date, that if the petitioner succeeds, the award of tender could be quashed. 52. Learned counsel for respondent No. 2 had relied upon the judgments in the cases of Chhattisgarh State Industrial Development Corporation Ltd. (supra) and Tejas Constructions and Infrastructure Private Limited (supra) to argue that once a substantial part of the tender stands performed, the Courts should not interfere. Learned counsel had also relied on Nicco Corporation Ltd. (supra) to contend that once the work has been executed to the extent of 80% any interference would delay a public project and was therefore unwarranted. There is no doubt that ....
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.... is free to advertise a fresh tender for procurement of the videoscopes, depending on their requirements. Needless to state that both the parties are free to participate in the said tender if and when advertised by respondent No. 1. 54. The writ petition is allowed in the above terms. C.M. Appl. Nos. 53039/2018 and 26060/2019 (for stay) Since the writ petition is disposed of, these applications are also disposed of accordingly. ============= Document 1 Sl. Ne Cetail test 2 SECTION-VID PART-1:PRICE SCHEDULE Cast of Videoape including insurance and freight Taste besuarai Cetrissiening charges, any jagabue to CST) 1 Cislaus Daty 4 GST Any other les 7 Total Prica ci 74 Videoscopes Commission of the agent, if any Particular Cucumission of the India agant, if any to be gard by the Supplies, Amour PART-II:CCAMC Unit Price of achie 58 YECCANIC Cost of Tet cost of CCAMC GST CCAMC per B(A) Xe. No. of Grand Total Cust (B+C) chiar (A) Videoscope) Final Year wa Torty period of two yours Second Year The You Fourth Year Fifth Year Grand Teal com Document 2 ....
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.... 73,54,416.00 13,23,795.00 86,78,211.00 Third Year 99,384.00 73,54,416.00 13,23,795.00 86,78,211.00 Fourth Year 99,384.00 73,54,416.00 13,23,795.00 86,78,211.00 Fifth Year 99,384.00 73,54,416.00 13,28,795.00 86,78,211.00 Grand Total 4,96,920.00 3,67,72,080.001 66,18,975.00 4,33,91,055.00 GHT MIG TECH Now De Document 4 Total Basic Custom Duty 27.735% 7.5% Basic Custom Duty SW Surcharge 10% of BCD Total 993,840.00 Part 1 Detal Cost (Ins.&Freight) Landing/Loading Charges @1% A Price Submitted in Bid br Petitioner 993,840.00 Already Abolished from 26 Sep 2017 Circular No: 39/2017-CUS clated 26 Sep,2017 B Ñ D Price after excluding merely 1% Bid by Respondent and Incorrect Adustment of Price leading charges accepted by department Mr Sethi 9/7 1,035,000.00 E Correct Calculation of R 1,035,00 Already Abolished from Sep,2017, Circular No:39/2017-CU dated 26 Sep 2017 1,035.00€ 993,840.00 993840 9,938.40 Already Abolished from 20 Sep,2017, Circular No:39/2017-CUS dated 1,003,778.40 26 Sep 2....