Calcutta High Court: In an appeal challenging the judgment and order dated 07-07-2023, passed by a Single Judge where the orders of rejection of the Techno Commercial Bid of the respondent were contested in the writ petitions, a division bench comprising of T.S. Sivagnanam, CJ., and Hiranmay Bhattacharyya,* J., held that the rejection of the respondent’s bid was deemed justified, and the direction to conduct the tender process afresh is liable to be set aside. The Court allowed the appeals, the impugned judgment and order were set aside, and the orders of rejection of the bids were restored.
Factual Matrix
In the instant matter, Kalindee Rail Nirman (Engineers) Limited (‘Kalindee’) was amalgamated with Texmaco Rail and Engineer Limited pursuant to a scheme of amalgamation sanctioned by the Delhi High Court. South Eastern Railway (tender inviting authority) floated a tender for the automatic block signal system between Rajkharswan to Rourkela Section. The advertised value of the tender was Rs. 106,70,01,466.33. Respondent-Kalindee submitted a bid, but its techno-commercial bid was rejected by the tender inviting authority. Respondent claimed technical eligibility based on a similar work completed by its predecessor in a joint venture with GMR Infrastructure Ltd. (GMR) and Tata Project Ltd. (TPL) for Rail Vikas Nigam Ltd. (RVNL). The tender inviting authority rejected Respondent 1’s bid, leading to writ petitions challenging the rejection.
The present appeals are preferred by the Union of India and the South Eastern Railway and the L1 bidder against the judgment and order dated 07-07-2023, passed by a Single Judge where the Single Judge set aside the Respondent’s bid rejection, directing the tender inviting authority to conduct the process afresh. Respondent argued that they satisfied the eligibility criteria by completing a similar work with a value exceeding 60% of the advertised value, relying on the work done in a joint venture with GMR and TPL for RVNL.
Parties’ Contentions
The appellants contended that the value of completed work by a member in an earlier joint venture should be reckoned only to the extent of the concerned member’s share in that joint venture. On the other hand, the respondent argued that the entire value of the work completed by the respondent in the joint venture should be considered for technical eligibility.
Moot Point
-
Whether the value of a completed work done by a member in an earlier joint venture should be reckoned based on the member’s share in that joint venture for the purpose of satisfying technical eligibility criteria?
-
Whether the rejection of Respondent’s bid was arbitrary, mala fide, and against the terms of the tender?
Court’s Assessment
The Court held that note (b) of Clause 17.15.1 of the Standard General Conditions of Contract (GCC) applies when a bidder relies on work completed as a member of an earlier Joint Venture as a credential. The value of the completed work done by Respondent should be reckoned only to the extent of its share (29%) in the Joint Venture, as per the joint venture agreement.
The Court found that Respondent failed to satisfy the eligibility criteria of completing work equal to 60% of the advertised value. The rejection was deemed justified as Respondent 1failed to satisfy the eligibility criteria. The Court upheld the tender inviting authority’s discretion and rejected claims of mala fides.
Court’s Decision
The appeals were allowed, the impugned judgment was set aside, and the orders of rejection of Respondent’s bids were restored. The tender inviting authority was permitted to proceed in accordance with the law, with no order as to costs.
[MRT Signals Ltd. v. Texmaco Rail and Engineering Ltd., 2023 SCC OnLine Cal 4964, order dated 13-12-2023]
*Judgment by Justice Hiranmay Bhattacharyya
Advocates who appeared in this case :
Mr. Jayanta Mitra, Mr. Abhrajit Mitra, Ms. Rajshree Kajaria, Mr. Sarvapriyo Mukherjee, Mr. Atarup Banerjee, Ms. Sarda Sha, Mr. Uttam Sharma, Counsel for the Appellants
Mr. Sabyasachi Chowdhury, Mr. Rajarshi Dutta, Mr. Shounak Mukhopadhyay, Mr. Soorjya Ganguli, Mr. Somdutta Bhattacharyya, Ms. Devanshi Prasad, Ms. Arti Bhattacharyya, Counsel for the Respondent 1 and 2
high cour decision are good