M/S Bharat Construction PVT LTD vs. M/S Himachal Pradesh Road Infrastructure Development Corporation LTD And Another

Held

The Court held that the petition lacked merit and was dismissed. Regarding the first issue, the Court found that the bid price was required to be inclusive of all taxes, including GST, and that Corrigendum-1 was clarificatory in nature. Respondent No.2's bid of Rs. 39,60,00,000/- was inclusive of a 12% GST component, which was beneficial for public interest as it was significantly lower than the estimated project cost of Rs. 53 crores. The Court also noted that the Petitioner itself had quoted a bid price of Rs. 42,40,54,000/-, which was also less than the estimated cost, suggesting the Petitioner's apprehensions about quality were unfounded. Concerning the second issue, the Court found that Clause 6.2(b) of the RFP/NIB permitted the authority to seek clarifications from bidders. The Court also observed that the Petitioner had not approached the Court with clean hands, having failed to disclose that the work had already been awarded, the EPC contract executed, and investments made by Respondent No.2. This non-disclosure was considered a factor in determining the Petitioner's motive. The Court emphasized the public interest involved in the timely completion of the project, given the dangerous condition of the existing tunnel and the risk of funds lapsing.

Facts

M/s Bharat Construction (I) Private Limited (Petitioner) filed a writ petition challenging the tender process for the construction of a "2 Lane Road Tunnel" parallel to the existing Dhalli Tunnel under the Shimla Smart City Mission. The tender was invited by Himachal Pradesh Road Infrastructure Development Corporation Limited (Respondent No.1) on 15.06.2021, with an estimated cost of Rs. 53 crores. Both the Petitioner and Sai Engineering Foundation & Sai Shakti Solution (Joint Venture) (Respondent No.2) submitted bids. Respondent No.2 was declared "L-1" (lowest bidder) after financial bid evaluation on 02.08.2021, and a Letter of Acceptance (LOA) was issued on 12.08.2021. The Petitioner objected to Respondent No.2's financial bid format and the inclusion of GST, alleging violations of the Request for Proposal (RFP)/Notice Inviting Bid (NIB) and its Corrigendum-1 dated 06.07.2021. Respondent No.1 did not agree with the Petitioner's objections, leading to the filing of this petition.

Key Issues

1. Whether Respondent No.2's financial bid, declared as L-1, was in compliance with the format prescribed by the RFP/NIB and its Corrigendum-1, particularly concerning the inclusion of GST and other taxes? (Question of law and fact, concerning the interpretation of RFP/NIB and Corrigendum-1). 2. Whether Respondent No.1's conduct in seeking clarification from Respondent No.2 after the Petitioner raised objections constituted a violation of the tender terms and gave undue advantage to Respondent No.2? (Question of law and fact, concerning procedural fairness and tender conditions). Petitioner's arguments: The Petitioner argued that the bid format specified in the RFP/NIB was mandatory and that Respondent No.2 failed to comply with Corrigendum-1, which mandated the inclusion of GST. They contended that Respondent No.1 improperly allowed Respondent No.2 to rectify its bid after objections were raised, violating the prohibition against post-bid correspondence. The Petitioner relied on the strict interpretation of tender conditions. Respondent No.1 and No.2's arguments: Respondents argued that the original bid documents required prices to be inclusive of all taxes, and Corrigendum-1 was merely clarificatory. They asserted that Clause 6.2(b) of the RFP/NIB authorized them to seek clarifications from bidders. They also raised the issue of public interest, highlighting the urgency of constructing the parallel tunnel due to the dilapidated condition of the existing Dhalli Tunnel and the risk of funds lapsing if the project was delayed. Respondent No.2 further argued that the Petitioner had no locus standi to challenge the award as its eligibility was not questioned and that the Petitioner had not approached the court with clean hands by suppressing material facts.