M/S Vishnu Prakash R Punglia LTD. vs. State Of Hp

Held

The Court held that the e-Procurement system's report dated 31.01.2020 (Annexure P-4) was not the definitive bid evaluation document. The Court found that this report was merely a comparative statement of the bid amounts quoted by the bidders, reflecting the figures in Column No.53 of Form Fin 1. The actual evaluation of the bids, as per Clauses 5 and 44 of the RFP document, was carried out in Columns 54 and 55 of Form Fin 1, which took into account the Net Present Value (NPV) of the O&M costs quoted by the bidders for the entire project life of thirteen years. The Court noted that petitioner No.1 did not emerge as the preferred bidder (L-1) based on this comprehensive evaluation in Columns 54 and 55. Consequently, respondent No.2 was justified in not issuing the Letter of Acceptance to petitioner No.1. The Court relied on the Supreme Court's decision in The Silppi Constructions Contractors Vs Union of India, emphasizing that the authority floating the tender is the best judge of its interpretation, and courts should not interfere in contractual matters unless there is clear arbitrariness, irrationality, mala fides, or bias. The Court found no such grounds in this case and no merit in the writ petition.

Facts

M/s Vishnu Prakash R Punglia Ltd. (petitioner No.1) and another filed a writ petition seeking a Letter of Acceptance for a tender issued by Shimla Jal Prabandhan Nigam Limited (SJPNL) - respondent No.2. SJPNL had issued a Request for Proposal (RFP) on 09.10.2019 for a Bulk Water Supply project. Six bids were received, including from petitioner No.1 and respondent No.5. Technical bids were opened on 11.11.2019, with petitioner No.1 and respondent No.5 qualifying. Financial bids were opened on 31.01.2020, and an e-Procurement system report indicated petitioner No.1 as the lowest bidder (L-1) with a bid amount of INR 4118236207.00 and respondent No.5 as L-2 with INR 4119874558.58. However, a Letter of Acceptance was not issued to petitioner No.1. Representations made by petitioner No.1 were met with a response from the State stating that the e-Procurement report was not a Bid Evaluation Document.

Key Issues

1. Whether the e-Procurement system's report dated 31.01.2020, declaring petitioner No.1 as the lowest bidder (L-1), is the conclusive basis for awarding the Letter of Acceptance, or if the evaluation as per Clauses 5 and 44 of the RFP document, considering Net Present Value (NPV), is determinative? (Question of law and mixed fact and law, turning on Clause 5 and 44 of the RFP). Petitioner's arguments: The petitioner contended that Column No.53 of Form Fin 1, reflecting the aggregate bid price including GST, was the sole basis for determining the bid value and generating the L-1 report. They argued that the NPV reflected in Column No.54 should not be considered for bid evaluation. Respondents' arguments: The respondents argued that bids had to be evaluated in terms of Clauses 5 and 44 of the RFP. Clause 5.2 stipulated that bids were to be evaluated by the system using the formula set out in Form Fin 1. They asserted that the evaluation in Columns 54 and 55 of Form Fin 1, which considered the NPV of O&M costs, determined the preferred bidder. They further argued that the report at Annexure P-4 was merely a comparative statement of quoted prices and not the actual bid evaluation document, and that respondent No.2, not the e-Procurement portal, was responsible for declaring the preferred bidder.