AI Drafter 
TaxTMI 
TaxTMI 
2022 (1) TMI 1420
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......44 Preliminary Leave granted. 2. These two appeals against the same judgment and order dated 27.09.2021, as passed by the High Court of Delhi at New Delhi in Writ Petition (C) No. 6676 of 2021, have been considered together and are taken up for disposal by this common judgment. 2.1. By the impugned judgment and order dated 27.09.2021, the High Court has accepted the writ petition filed by the respondent No. 1 of these appeals (M/s. Resoursys Telecom- hereinafter referred to as 'the writ petitioner') and has disapproved the technical disqualification and consequential rejection of the technical bid of writ petitioner in respect of a tender floated by the appellant of the appeal arising out of SLP(C) No. 16672 of 2021 (Navodaya Vidyalaya Samiti - hereinafter referred to as 'NVS'). The appellant of the other appeal arising out of SLP(C) No. 16671 of 2021 (Agmatel India Pvt. Ltd. - hereinafter referred to as 'Agmatel') is said to be the bidder whose offer was accepted by NVS after technically disqualifying the writ petitioner. 3. The crux of the matter involved in these two appeals is as to whether the High Court has been justified in interfering with the view taken by....
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....e relevant terms and conditions may be extracted as under: - "1. Experience Criteria: In respect of the filter applied for experience criteria, the Bidder or its OEM {themselves or through reseller(s)} should have regularly, manufactured and supplied same or similar Category Products to any Central / State Govt Organization / PSU / Public Listed Company for number of Financial years as indicated above in the bid document before the bid opening date. Copies of relevant contracts to be submitted along with bid in support of having supplied some quantity during each of the Financial year. In case of bunch bids, the category of primary product having highest value should meet this criterion. ****** ***** ****** 4. Past Performance: The Bidder or its OEM {themselves or through re-seller(s)} should have supplied same or similar Category Products for 80% of bid quantity, This quantity requirement of 80% was admittedly reduced to 60% by way of a corrigendum issued by the tender inviting authority., in at least one of the last three Financial years before the bid opening date to any Central/State Govt Organization / PSU / Public Listed Company. Copies of relevant ....
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.... under: - "1.Does not qualify past Performance (Page 124) of tender document for any of the FY 2018-19, 2019-20, 2020-21. Work Orders of Smart Phones, Laptops, Aadhar Kits, Printers, Power-bank, etc are not considered as same or similar category products of tablets." 7.1. The writ petitioner M/s. Resoursys Telecom, as also the said OEM Lava International Limited submitted further representations while maintaining that they were duly complying with the Past Performance clause of the tender document. The appellant-NVS stated in its response dated 01.07.2021 that they were procuring "Tablets" for learning management and the Technical Evaluation Committee ('TEC') has considered only "Tablets" under similar category 'to ensure proven products'. 8. At this juncture, we may take note of the facts emerging on record that the writ petitioner, in order to assert its fulfilment of the above referred Past Performance criterion, has relied upon the statements made by its OEM in the letter dated 16.04.2021, wherein the supplies made in the financial year 2019-2020 to Punjab Infotech, Directorate of Welfare of Scheduled Castes-Assam, Directorate of Welfare of Plain Tribes & Backwar....
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.... on the basis of their technical, commercial and traderelated definitions, norms, and regulations provided by the authorities concerned. It was also argued that the tender inviting authority was the best person to interpret the terms of tender, and its decision could only be examined in case of it being arbitrary, biased or mala fide; and no such case being alleged, no interference was called for. The same contentions were urged on behalf of the impleaded party-Agmatel, while also raising the objection of jurisdiction. 11. While dealing with the rival contentions, the High Court of Delhi, after rejecting the contention on jurisdiction, formed the view that the product "Smart Phone" was definitely a similar category product as "Tablet"; and the tender inviting authority as also its TEC had been unjustified in giving a restrictive meaning to the terms of NIT; and if at all there was any ambiguity, the tender inviting authority cannot be left to the option of interpreting the terms contrary to their plain meaning. The High Court, therefore, proceeded to allow the writ petition and disapproved the rejection of technical bid of the writ petitioner. It shall be appropriate to summaris....
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.... in different parts of the country. Applying such test, the High Court concluded that NVS could not have excluded the product "Smart Mobile Phones" from the "similar" category vis-a-vis the product "Tablets". According to the High Court, the clause in question had been so worded as to provide maximum competition. These observations and findings of the High Court, forming the core of its decision, could be usefully reproduced as under: - "29. From the above, it would be seen that the author of the tender in question has consciously and repeatedly used the expression "Category" before the word "Product". Thus, the use of the expression "Category" is not inadvertent, or unintentional. Secondly, the author has also repeatedly used the words "same or similar" in relation to - not the product in question, but in relation to the category of products to which "Tablet" belongs. The use of the plural i.e. "Products", and not "Product" also shows that the author was conscious that within the same or similar category of products, there would be products other than "Tablets". Pertinently, the expression used is not "same products", or even "same Category Products". It is "same or simil....
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....t, the larger manufacturers and producers of electronic goods produce and sell both - smart mobile phones, and tablets under the same brand. There are bound to be differences, since these two products are not "same". They may not even belong to the "same category" of products. However, merely because they are not "same", it does not mean that they do not belong to "similar category of products". 31. The terms of tender must receive the natural and commonly understood interpretation, which has been prevalent in the trade. What is prevalent in the trade has been demonstrated by the petitioner - by reference to the 5 tenders floated by different Government/ PSUs in different parts of the country for same/ similar products. 32. Applying the said test, can it be said that the respondent NVS could exclude smart mobile phones from the similar category of products, as Tablets? The answer is an emphatic "No". The Clause, intentionally, has been worded loosely in order to have maximum competition amongst bidders." 11.3. Thereafter, the High Court took note of the stand taken by NVS in its reply dated 01.07.2021 and that taken in the counter affidavit filed before the Cou....
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.... 37. From the counter affidavit, we also find that at various places, the respondent has averred that Tablets and smart mobile phones are not the same product, or similar product. It appears to us that the respondent has forgotten the eligibility criteria set out in the NIT, which is, "same or similar category products", and not "same product" or even "similar products." 38. If that interpretation as given by the respondent NVS were to be accepted, the word "similar category of products" becomes a surplusage, which cannot be the intention attributed to the tender framing authority. 39. To arbitrarily and whimsically change the goalpost, and determine what can, and cannot, be considered a "similar product", at the time of evaluation of bids, disrupts the level playing field for bidders and extinguishes healthy competition. The respondents have argued that smartphones and tablets are separate products, and there can be no doubt about it. This is a no brainer. However, they don't say that these two products are not even falling under two different similar categories of products. 40. The restrictive interpretation given by the respondent NVS to the aforesai....
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....ntrary to their plain meaning. The High Court said thus: - "47. We are conscious of the scope of judicial scrutiny in tender matters. We are also conscious that the tender floating authority is best person to interpret the terms of the tender, as they know what best is the requirement and how to achieve the same. (see Tata Cellular v. UOI (1994) 6SCC 651) However, the authorities cannot act arbitrarily, whimsically and contrary to the terms and conditions of the tender. As noticed hereinabove, the terms and conditions of the tender are clear. However, even if the terms of the tender are unclear and ambiguous, can it be left to the option of the tender floating authority to interpret it in a manner which is contrary to their plain meaning? The answer is "No"." 11.6. With the aforementioned reasons, findings and observations, the High Court proceeded to allow the writ petition and held the rejection of the technical bid of the writ petitioner as unreasonable and arbitrary, while holding that "Smart Mobile Phones" fall in "similar Category Products'. Accordingly, the High Court directed the appellant-NVS to process the technical bid of the writ petitioner and thereafter pr....
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....nt or Platforms and Accessories" within subcategory "Digital Mobile Equipment and Components". With such categorisation, the learned Solicitor General would argue, the stand of the appellant-NVS is fortified that "Smart Phones" do not fall under same or similar category products as "Tablets". It has further been argued that the terms were clear and none of the participating bidder found any ambiguity therein and hence, provided the requisite details of the supplies pertaining to "Tablets" only, except the writ petitioner. There was neither any ambiguity nor anyone asked for any clarification including the writ petitioner and only request was for reducing the past performance quantity from 80% to 40% whereupon, the quantity was reduced by corrigendum to 60%. The contention, thus, has been that everyone including the writ petitioner well understood the requirement in the past performance criterion as being that of supply of "Tablet" computers only. 12.3. It has further been submitted that the expressions "same" or "similar" category products in the tender condition were obviously in reference to different varieties and types of "Tablets", like Slate Tablets, Convertible Tablets, H....
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....rned senior counsel appearing on behalf of the appellant-Agmatel (successful bidder) while supplementing that the High Court has erred in going into the technical evaluation of two products and their similarity; and this remains an impermissible area for judicial review, as held by this Court in the case of Galaxy Transport Agencies v. New J K Roadways: 2020 SCC OnLine SC 1035. The learned senior counsel has further argued that the view taken by the tender inviting authority and its evaluation committee remains a reasonable view that "Smart Phones" are not similar to "Tablets". In this regard, the learned senior counsel has, apart from reiterating the categories specified on the online portal GeM, has also referred to the classification of "Tablet" computers by the Central Board of Excise and Customs under Section 151A of the Customs Act, 1950 while specifically noting that a "Tablet" computer is different from a "Smart Phone", as it is an automatic data processing machine classifiable under the heading 847130 and not 8517. Learned senior counsel has further referred to the fact that various other authorities have considered "Tablet" computers as computing devices similar to Laptop....
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....that the interpretation sought to be suggested by the tender inviting authority in the present case is entirely unreasonable and has rightly been interfered with by the High Court. It has also been submitted that in the present case, the tender inviting authority has attempted to exercise its discretion to suit a particular bidder and to curb the competition on rather inconsistent grounds by attempting to distinguish between otherwise identical products. It is contended that when the tender inviting authority was conscious of the terms stated in a particular manner, it cannot be permitted to change such terms by way of interpretation to suit a particular bidder or by taking away the level playing field. The submission has been that "Smart Phones" and "Tablets" are rather synonymous terms and the stand of the appellants deserves to be disapproved. 14.3. It has also been submitted on behalf of the writ petitioner that in fact, it has been awarded another contract for supply of 3,00,000 tablets and it had been regularly supplying various electronic products, including tablets. 14.4. Yet further, it has been submitted that a caution was sounded by the Central Vigilance Commission....
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.... is not a reason for interfering with the interpretation given." (page 825) (emphasis supplied) 15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha 2020 SCC OnLine SC 335, under the heading "Deference to authority's interpretation", this Court stated: "51. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes. 52. In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818) 53. The High Court ought to have defe....
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....ore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, this Court noted: "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 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 abe....
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....m those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance wit....
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....t of Rs. 200 crores but, the State had not specified the accounting norms with clarity for calculation of net cash profit; and one of the two acceptable methods of calculation of net cash profit was not taken into account without any reason. In the given facts, the decision of the authority concerned was found to be arbitrary, whimsical and unreasonable. The said decision in Reliance Energy Ltd. (supra) has no direct application to the facts of the present case and even otherwise, it has not been the finding of the High Court that the term stated by the tender inviting authority-NVS was lacking in certainty. However, beyond this, as to which particular product was to be treated as similar category product, could not have been a matter of interpretative exercise by the Court, particularly when the view taken by the tender inviting authority and its evaluation committee has not been shown to be absurd or irrational or suffering from mala fide. 20. It has also rightly been pointed out by the appellants, with reference to the decision in Afcons Infrastructure Limited (as extracted in the quotation hereinabove), that an interpretation by owner or employer of a project to the tender d....
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....he categorisation on the Government online portal itself. Beyond this aspect, in our view, no adjudicatory process is called for and the interpretation as put by the tender inviting authority-NVS does not deserve interference. Similarly, if in some of the notice inviting tenders, both smart phones and tablets were stated, or in some of the tenders, specific product tablet alone was stated, that would also not be decisive because that would, obviously, depend on the purpose for which the procurement was being made; and the procuring party, i.e., the tender inviting authority, ought to be extended the latitude to decide on its requirements. 22. In the same context, we may also deal with another feature of this case related with the supplies made by the writ petitioner to different organisations pursuant to different tender notices. 22.1. As noticed, the writ petitioner, in order to assert its fulfilment of the above referred Past Performance criterion, has relied upon the statements made by its OEM in the letter dated 16.04.2021. That reads as under: - "PO details in FY 2019-20 (Single Year): Past Performance Clause Sr.No. Organisation Name PO & Completion Certifica....
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....data and documents provided by the Respondent No. 1 for the three Financial Years viz., FY 2018-19, 2019-20 and 2020-21, maximum quantities of Tablets supplied by the Respondent No. 1 were in the FY 2019-20 i.e. 37141 nos. which was short by 10.20% of the 60% criterion [60% of 68490 = 41364] for satisfying the past performance clause 4 of the bid document. 5. I submit that due to shortfall of 10.2% of the required quantity of same or similar category products as per past performance clause, the Respondent No. 1 was declared disqualified in technical bid." 22.3. The writ petitioner has also referred to the several such contracts where both the products, tablets and smart phones, have been procured simultaneously while suggesting that these terms have even been used interchangeably. On the other hand, the appellant-NVS has stated in detail that the supplies of Tablets by the writ petitioner fell short by 10.20% to 60% criterion and the writ petitioner was, in fact, largely supplying smart phones and not tablets. As regards the organisations and their tender processes referred by the writ petitioner, various comments have been offered by the appellant-NVS in a tabular form....
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....egory of ICT(Tablet, PC Laptop, Netbook and Desktop). **Tender clause is different however smartphones is not considered. REC Power Distribution Co. Ltd. Rate contract for supply of 1000 number of Tablet. Bidder should have desire experience of supplying Tablet/ Smart phones. **In the bid document, past performance criteria is totally distinct from the NVS bid document. Tender clause is different. **The bid process floated by RECPDCL was not floated through the GeM Portal, hence, the RECPDCL and NVS are not on similar footing. **The matter of 36 NVS is distinct as no query was raised by the anyone of prospective bidders regarding inclusion of smart phones in past experience. **The bid process was floated 6 years back. Department of Education, Govt. of Bihar Expression of interest (EOI) for selection of agencies for supply and service of Elearning tablets. In the tender documents under clause 3.7.3, the criteria is mentioned that the bidder should be either OEM or authorized supplier of Mobiles/ Tablets. **It is Expression of Interest not a Tender. **Referred bidder has prepared the documents of bid as per their need, expertise and familiarity.....
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....ned to this effect. It axiomatically demonstrates that the Smartphones are not comes under the purview of same or similar category of Tablet Computers." 22.4. The aforesaid submissions on facts make this much clear that the decision, as taken by the appellant-NVS and its TEC, cannot be said to be totally baseless or absurd or irrational or illogical. It gets perforce reiterated that even if some of the organisations, in relation to their requirements, procured tablets and smart phones both under the same tender process or even used these expressions "interchangeably" or "interconnected", that by itself cannot lead to a definite conclusion by the Court that "Smart Phones" and "Tablets" are to be taken as similar category products for the tender process in question. 23. Viewed from any angle, interference by the High Court in this matter does not appear justified, particularly when no case of mala fide or bias is alleged. Every decision of the administrative authority which may not appear plausible to the Court cannot, for that reason alone, be called arbitrary or whimsical. The High Court, in the present matter has obviously proceeded with an assumption that the view as being ....
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....om the extracted part of the principles related with the 'contra proferentem rule', as reproduced by this Court from the Halsbury's Laws of England, it is clear that the said rule was applied in the case of ambiguity in the insurance policy because the policies are made by the insurer and its ambiguity cannot be allowed to operate against the insured. This rule, in our view, cannot be applied to lay down that in case of any ambiguity in a tender document, it has to be construed in favour of a particular person who projects a particular view point. The obvious inapplicability of this doctrine to the eligibility conditions in a notice inviting tender could be visualised from a simple fact that in case of ambiguity, if two different tenderers suggest two different interpretations, the question would always remain as to which of the two interpretation is to be accepted? Obviously, to avoid such unworkable scenarios, the principle is that the author of the tender document is the best person to interpret its documents and requirements. The only requirement of law, for such process of decisionmaking by the tender inviting authority, is that it should not be suffering from illegality, ....