Pki Naham Marine Equipments Trd Llc vs. Kochi Metro Rail LTD.

WP(C).No.12804 OF 2020(A) 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN TUE AY, THE 08TH DAY OF SEPTEMBER 2020 / 17TH BHADRA, 1942 WP(C).No.12804 OF 2020(A) PETITIONER: PKI NAHAM MARINE EQUIPMENTS TRD LLC PO BOX 30581, ABUDHABI, UAE, THROUGH ITS POWER OF ATTORNEY HOLDER M/S. SAMUDRAYAN INFRAPORTS PVT. LTD.,HAVING ITS REGISTERED OFFICE AT 7/8 , FLOOR-1, PLOT-41, KRISHNA NIWAS SIR BHALCHANDRA ROAD, DADAR(E), MUMBAI-400 014, REPRESENTED BY ITS MANAGING DIRECTOR BRIJESH LOHANA. BY ADVS. SRI.ISAAC THOMAS SRI.P.G.CHANDAPILLAI ABRAHAM RESPONDENTS: 1 KOCHI METRO RAIL LTD. 4TH FLOOR, JLN METRO STATION, KALOOR, COCHIN-682 017, REPRESENTED BY ITS MANAGING DIRECTOR. 2 SENIOR DEPUTY GENERAL MANAGER PROCUREMENT KOCHI METRO RAIL LTD., 4TH FLOOR, JLN METRO STATION, KALOOR, ERNAKULAM, KERALA-682 017. 3 MARINETEK INDIA SERVICES PVT.LTD., L-102, DARA ENCLAVE, PLOT NO.6, SECTOR 9, NERUL, NAVI MUMBAI, MAHARASHTRA-400 706, REPRESENTED BY ITS MANAGING DIRECTOR. 4 MARINETEK GROUP OY VATTUNIEMENKATTU 3 00210 HELSINKI, FINLAND. REPRESENTED BY ITS AUTHORISED SIGNATORY, 5 THE STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY TO GOVERNMENT, TRANSPORT DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001. WP(C).No.12804 OF 2020(A) 2 6 UNION OF INDIA, THROUGH PRINCIPAL SECRETARY, URBAN DEVELOPMENT MINISTRY ROOM 122-C, NIRMAN BHAVAN, NEW DELHI-110 011. R1-2 BY ADV. SRI.K.JAJU BABU (SR.) R1-2 BY SMT.M.U.VIJAYALAKSHMI, SC, KOCHI METRO RAIL LTD. R3 BY ADV. SMT.N.A.NADEERA R3-4 BY ADV. SRI.C.M.MOHAMMED IQUABAL R3-4 BY ADV. SMT.REHANA SHUKKUR R6 BY ADV. SHRI.P.VIJAYAKUMAR, ASG OF INDIA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25- 08-2020, THE COURT ON 08-09-2020 DELIVERED THE FOLLOWING:

WP(C).No.12804 OF 2020(A) 3 JUDGMENT Dated this the 8th day of September 2020 1.The petitioner, who claims to be the duly authorised Power of Attorney holder of a bidder, who has submitted a bid in pursuance to Exts.P2 and P11 notices inviting tender, has approached this Court challenging the validity of the technical evaluation by which the 4th respondent's bid was accepted and seeks a declaration that the bid submitted by the 4th respondent was liable to be rejected. 2.Heard Sri.Issac Thomas, the learned counsel for the petitioner, Sri.Jaju Babu, the learned Senior Counsel appearing for respondents 1 and 2, Smt.Rehana Shukkur, the learned counsel appearing for respondents 3 and 4, the learned ASGI and the learned Government Pleader.

WP(C).No.12804 OF 2020(A) 4 financial proposals, which would be evaluated by the first respondent, after which, the successful bidder would be chosen. It is submitted that pursuant to Ext.P2 request for qualification, the petitioner had submitted Ext.P3 bid. It is submitted that the fourth respondent had also submitted a bid in response to Ext.P2, RFQ. Exts.P4 and P5 Form I and Form II submitted by the 4th respondent and Ext.P6 Power of Attorney supporting the same are produced by the petitioner. It is contended that Ext.P6 Power of Attorney is prepared on Indian stamp paper by a Finnish company and signed by a Finnish national and it is not endorsed by the Indian Embassy nor accompanied by any Apostille certificate. It is stated that the fourth respondent had sought to use the digital signature of the third respondent for participating in the RFQ process.

WP(C).No.12804 OF 2020(A) 5 technical opening summary was published on 23.12.2019, wherein it was declared that the bid of the fourth respondent had been admitted. It is submitted that Exts.P21 to P23 complaints had been preferred by the petitioner, By Ext.P24 technical evaluation summary, it was declared that the bid of the fourth respondent was accepted and that the financial bid would be opened on 21.3.2020. It is submitted that thereafter Ext.P26 financial bid summary was published and the fourth respondent was selected as the successful bidder. Ext.P28 e.mail was submitted by the petitioner with Ext.P29 copy of shareholding pattern which shows that the third respondent is not a subsidiary company of the fourth respondent.

WP(C).No.12804 OF 2020(A) 6 the light of the specific provisions at Clause 1.28 and 1.29.3 of Ext.P11, the bid of the fourth respondent was liable to be rejected as unresponsive, since it would amount to a conditional bid. It is stated that the complaints of the petitioner had not been considered. On 10.6.2020, Ext.P31 reply was given by the 2nd respondent to the petitioner wherein the contentions raised by the petitioner had been rejected and it has been stated that the bid submitted by the fourth respondent has been accepted. The petitioner challenges the proceedings of respondents 1 and 2 and seeks a declaration that the bid submitted by the fourth respondent is liable to be declared as unresponsive.

WP(C).No.12804 OF 2020(A) 7 Vigilance Commission, the acceptance or rejection of the bids should be on justified grounds and should leave room for no complaints. It is stated that the Power of Attorney submitted by the fourth respondent was executed on Indian stamp paper. Clarification was sought for and a clarification letter with a Power of Attorney with Apostille certificate had been made available by the fourth respondent, which is sought to be produced as Ext.R1(a). It is further submitted that the Digital Signature Certificate used by all three qualified applicants, including the petitioner and the fourth respondent were that of Indian companies, whose officials were shown as their respective Power of Attorney holders. It is submitted that in the RFQ process, the petitioner as well as the 4th respondent and yet another company were found to be qualified and no objections had been raised by the petitioner at that stage. It is submitted that the entire process, including evaluation of qualification was done in a judicious and transparent manner and a list of all prequalified and conditionally prequalified applicants were published and notified to the bidders. It is stated that since equal opportunity had been given to all the tenderers to cure the defects in documents, there was clear compliance with the requirements of law. Relevant paragraphs 11 and 11(sic) of the counter affidavit which contain the substantial contentions of the respondents are extracted below:-

WP(C).No.12804 OF 2020(A) 8 “11. It is submitted that pursuant to qualification of the applicants in the RFQ, RFP was published by this respondent, and only those three applicants (all foreign firms) including the petitioner and the fourth respondent who were qualified in the RFQ were eligible to participate. As it was a limited tender, i.e tender limited to only three applicants who were pre-quallfied in the RFQ, notification of tender was sent specifically to all the three pre-qualifled bidders. It is pertinent to note that only the prequalified bidders namely, the petitioner, fourth respondent and Majestine Marine Engineering LLC can participate in the RFP, that too by using the pre-approved user id (used in the RFQ process) in the e-tender site of the Government of Kerala. Both the petitioner and the fourth respondent participated in the RFP and the third qualified applicant did not participate. The allegation that fourth respondent has not participated and the third respondent who is a different entity has participated in the RFP is impossible since the e-tender site is accessible only to the pre-qualified bidders (in this case petitioner and the fourth respondent), and hence the allegation is incorrect and denied. Just because the power agent of the fourth respondent happened to be the MD of the third respondent company, who is otherwise associate of the fourth respondent, it cannot be alleged that the bidder/participant was third respondent and not fourth respondent. The DSC of the associate Indian entities were used by both the petitioner as well as the fourth respondent, and if the allegation is correct, the bid of the petitioner also was liable to be rejected. In addition, after the submission of bid, it was also clarified by the third respondent whose DSC was used, that the bids were submitted for the fourth respondent only. The clarifications was acceptable, since only the prequallfied applicants can submit the bid by accessing the e-tender site of the Government of Kerala Using their secure credentials and in this case the fourth respondent was the pre- qualified applicant.

WP(C).No.12804 OF 2020(A) 9

WP(C).No.12804 OF 2020(A) 10 It is further stated at paragraph 13 of the counter affidavit as follows:- “13. It is respectfully submitted that it was only after both the petitioner and fourth respondent withdrawing the deviations mentioned in their technical documents unconditionally and after obtaining clarifications and supporting documents from both the petitioner and the fourth respondent, and also after obtaining NOC from the funding agency, the financial bid was opened by this respondent on 21.03.2020. The fourth respondent was the L1 bidder at an amount of Rs.96,85,50,000/- excluding GST and the petitioner had quoted Rs.2,58,52,18,929/- (which was 217.93% above the estimated price and 267% of the L1 price quoted by the fourth respondent. As a result, the fourth respondent was selected as the successful bidder. The recommendation of the tender committee, after opening of the financial bid is produced herewith and marked as Exhibit R1(e) and the approval of the funding agency, KfW is produced herewith and marked as Exhibit R1(f) . The fourth respondent was selected based on the lowest quoted financial bid, from among the applicants who were short-listed after satisfying all the pre-qualification eligibility criteria. Accordingly, the Contract was awarded to the fourth respondent on 04.04.2020. The letter of Award given to the fourth respondent is produced herewith and marked as Exhibit R1(g).”

WP(C).No.12804 OF 2020(A) 11 M/s.N.Ramachandra Reddy v. State of Telangana [AIR 2019 SC 4182] is also relied on.

WP(C).No.12804 OF 2020(A) 12 affidavit filed by the petitioner, is also objected to since the said Power of Attorney is not verified by any manner known to law. It is further stated that the petitioner as well as the fourth respondent had been given an equal opportunity to substitute the defective documents or to cure the defects in the documents accompaning their bids. It is stated that thereafter the bids had been considered and appropriate decisions had been taken in a completely transparent manner. It is submitted at paragraph 14 of the Counter affidavit that the tender security produced as Ext.P16 is an incomplete document and had been issued only for the purpose of participating in the tender submission. It is stated that the 3rd and 4th respondents had submitted Ext.R4(j) and R4(k) consents for being bound by the bank guarantee. It is further submitted that the tender security amount had been refunded after the 4th respondent executed the performance security in accordance with the conditions of the contract. 10.It is further stated that pursuant to the qualification of the 4th respondentin the technical stage, financial bid had been opened on 21.3.2020 and work order was issued to the fourth respondent on 4.4.2020 and that the work is well in progress. It is further stated that the amount quoted by the petitioner in the financial bid was

WP(C).No.12804 OF 2020(A) 13 264% more than the amount quoted by fourth respondent and that that the attempt of the petitioner is only to stall the work which was duly awarded after a full evaluation process to the fourth respondent. 11.A reply affidavit has been placed on record by the petitioner contending that the chance to correct documents could have been granted at the RFQ stage, but the repeated opportunity granted to the fourth respondent to correct the documents to bring it in conformity with the requirements of the notice inviting tender in the RFP stage vitiated the entire procedings. It is contended that clause 1.30.1 of the RFP specifically stated if a tender is not responsive to the requirements of the tender documents, it shall be rejected by the employer and may not subsequently be made responsive by correction of the material deviation, reservation or omission. The learned counsel also places reliance on a decision of a Division Bench of this Court in TBAS Construction Supreme Infrastructure India Ltd (M/s.) v. Union of India and others [2018 (4) KHC 865] to contend that the difference in the bid amount, by itself, would not be the sole basis to choose a non- responsive tenderer, since the work itself may then be put to jeopardy. It is further contended that where the decision taken by the tender inviting authority is mala fide or perverse, there is

WP(C).No.12804 OF 2020(A) 14 absolutely no inhibition on this Court exercising power under Article 226 of the Constitution of India in interfering with the award of the work. 12.An additional counter affidavit has also been placed on record by the 1st respondent on 25.8.2020, specifically stating that the petitioner is not authorised to initiate any legal process on behalf of the Finnish company, since neither Exhibit P1 nor Exhibit P32 empowers the petitioner to initiate legal proceedings with regard to the tender. It is submitted that Ext.P1 only authorises the agent to participate in the tender and that Ext.P32 is not duly authenticated. The assertions made in the reply affidavit have also been denied in the additional counter affidavit and it is contended that after an equal opportunity having been given to all bidders, the grounds raised cannot be sustained, at this late hour. 13.I have considered the contentions advanced. It is an admitted case that the petitioner as well as the 4th respondent, who are now shown to be the bidders in response to the RFP, are foreign companies, who have submitted their bids through companies in India using their digital signatures. This procedure has been accepted by respondents 1 and 2. It is evident from the documents placed on record that all the bidders had been granted equal

WP(C).No.12804 OF 2020(A) 15 opportunity for rectifying the defects in their bids or the documents produced along with the tender. It appears that the fourth respondent had succeeded in rectifying the defects pointed out by respondents 1 and 2 and that respondents 1 and 2, after considering the entire factual aspects of the matter, had found that the bid submitted by the fourth respondent was responsive. Though specific allegations have been raised by the learned counsel for the petitioner as against the acceptance of the bid in the RFP stage, I am of the opinion that in the light of the specific contentions of respondents 1and 2 that the defects noticed in the fourth respondent's bid had been rectified and that the bid had become responsive,in the absence of any contention as to mala fides, it would not be proper for this Court to enter into an examination as to the factual aspects of the matter. Moreover, the practicality of a re-tender and the financial aspects are matters for the tender inviting authority to consider and in the absence of any clear perversity or mala fides, I am of the opinion that it would not be proper for this court to interfere in the award of a work of this nature, which admittedly is a time bound one. 14.In Sterling Computers Limited Etc vs M/s.M & N Publications Limited And Ors [(1993) 1 SCC 445], the Apex Court held that under some special circumstances, a discretion has

WP(C).No.12804 OF 2020(A) 16 to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for the purpose of taking a decision as to whom the contract is to be awarded and at what terms. It was further observed that if the decisions have been taken in a bona fide manner, although not strictly following the norms laid down by the courts, such decisions are to be upheld on the principle that Courts while judging the constitutional validity of executive decisions must grant a certain measure of freedom of "play in the joints" to the executive. 15.In Tata Cellular vs Union Of India [(1994) 6 SCC 651] the Apex Court held that there are inherent limitations in exercise of power of judicial review in government contracts. It was held that judicial review is not an appeal from the executive decisions and the court should confine itself to the question of legality of the decision making process. It was held that judicial review of administrative action should be confined to cases of illegality, irrationality or procedural improperiety. 16.In Consortium of Titagarh Firema Adler SPA -Titagarh Wagons Ltd. v. Nagpur Metro Rail Corporation Limited and another [(2017) 7 SCC 486], the Supreme Court went on to hold

WP(C).No.12804 OF 2020(A) 17 that the exercise of power of judicial review would be called for if the approach of the public authority inviting tender is arbitrary, mala fide or the procedure adopted is meant to favour one. It was held that where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint and that technical evaluation or comparison by the Court would be impermissible. 17.Therefore, the principle of reasonable freedom for the tender inviting authority to deviate from the strict wordings of the notice inviting tender has been held to be permissible subject, of course, to the condition that an opportunity to cure the defects, if any, is granted to all the participating tenderers. If strict adherence to the terms of the tender document would lead to a situation where none of the participating bidders are found to be completely in compliance with terms of the tender document, a chance given to all the participating bidders to rectify the defects in their documents cannot be a reason for this Court to exercise its powers of judicial review to invalidate a decision so taken, in the absence of clear and established arbitrariness or mala fides.

WP(C).No.12804 OF 2020(A) 18 18.In a case like the present one, where the entire procedure has been carried out substantially in a fair and transparent manner, a substitution of the reasoning and decision of the implementing agency by this Court would be totally unwarranted. It is also clear from the records that a work order had been issued to the fourth respondent on 4.4.2020 and the work was well in progress even when the writ petition was filed on the 30.6.2020. After considering the pleadings placed on record in the instant case, I find that this is not a fit case which requires interference of this Court exercising its discretionary power of judicial review. The writ petition, therefore, fails and the same is accordingly dismissed. Anu Sivaraman, Judge sj

WP(C).No.12804 OF 2020(A) 19 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1OF THE POA DATED 28.11.2019 EXECUTED BY THE PETITIONER IN FAVOUR OF M/S. SAMUDRAYAN INFRAPORTS PVT.LTD. EXHIBIT P2OF RELEVANT PAGES OF THE RFQ DOCUMENTS PUBLISHED BY RESPONDENT NOS.1 AND 2. EXHIBIT P3OF THE RELEVANT PAGES OF THE RFQ DOCUMENTS SUBMITTED BY THE PETITIONER. EXHIBIT P4OF FORM 1 SUBMITTED BY RESPONDENT NO.

WP(C).No.12804 OF 2020(A) 21 EXHIBIT P30OF PRE-BID MEETING CLARIFICATIONS. EXHIBIT P31OF LETTER DATED 10.06.2020 ISSUED BY RESPONDENT NO.