Gauhati High Court
Page No.# 1/39 vs M/S Consulting Engineer (Ng) And 8 Ors on 4 March, 2025
Page No.# 1/39
GAHC010208432024
2025:GAU-AS:2203-DB
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WA/354/2024
M/S FRIEND ENTERPRISE AND ANR
REPRESENTED BY ITS PROPRIETOR, SRI BHASKARJYOTI BARUAH,
HAVING ITS OFFICE AT MORANKARI HANDIQUE GAON, NAMTI DOLL,
SIVASAGAR, DISTRICT- SIVASAGAR, ASSAM.
2: SRI BHASKARJYOTI BARUAH S/O SRI CHANDRESWAR BARUAH
RESIDENT OF MORANKARI HANDIQUE GAON
NAMTI DOLL SIVASAGAR DISTRICT- SIVASAGAR ASSAM.78568
VERSUS
M/S CONSULTING ENGINEER (NG) AND 8 ORS
A PARTNERSHIP FIRM BEING REPRESENTED BY ITS PARTNER, MS.
PRIYANKA DAS, AGED ABOUT 34 YEARS, HAVING ITS REGISTERED
OFFICE AT- HOUSE NO. 46A, SIMANTA PATH, P.O.- PILINGKATA, BASISTHA
CHARIALI, GUWAHATI- 781029, KAMRUP(M), ASSAM.
2:PRIYANKA DAS WIFE OF SRI PRANAB DAS
RESIDENT OF HOUSE NO. 46A BASISTHA CHARIALI
DISTRICT- KAMRUP(M) ASSAM PIN- 781029
3:SURESH KUMAR DUTTA SON OF LATE TIRTHA NATH DUTTA
RESIDENT OF GARAMUR NEAR JORHAT ENGINEERING COLLEGE
P.O.- GARAMUR P.S.- JORHAT DISTRICT- JORHAT PIN- 785007.
4:THE STATE OF ASSAM REPRESENTED BY THE PRINCIPAL SECRETARY
DEPARTMENT OF ANIMAL HUSBANDRY AND VETERINARY
ASSAM SECRETARIAT (CIVIL) DISPUR GUWAHATI- 781006
5:THE JOINT SECRETARY TO THE GOVERNMENT OF ASSAM
DEPARTMENT OF ANIMAL HUSBANDRY AND VETERINARY
ASSAM SECRETARIAT (CIVIL) DISPUR
GUWAHATI- 781006.
Page No.# 2/39
6:THE SECRETARY CUM DIRECTOR
OFFICE OF THE DIRECTOR
ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT
CHENIKUTHI GUWAHATI ASSAM PIN- 781003
7:THE TENDER EVALUATION COMMITTEE
REPRESENTED BY THE CHAIRMAN.
8:M/S MEDICOS AND ENGINEERING REPRESENTED BY ITS PROPRIETOR
MR. FOIZUDDIN AHMED HAVING ITS OFFICE AT HATIPOTI
P.S.- GELAKI DISTRICT- SIVASAGAR ASSAM.
9:JAYANTA KHAUND PROPRIETOR K.B. ROAD WARD NO. 11
P.S.- NORTH LAKHIMPUR DISTRICT- NORTH LAKHIMPUR ASSAM
Advocate for the Petitioner : MR H K DAS, MS D MAHANTA,MR N K SARMA
Advocate for the Respondent : MR R SINGHA, MS M BARMAN(R-8),MS P RABHA(R-8),MRS. A
GAYAN (R-8),M NARZARY(R-9),DR. J. D. KHAUND (R-9),SC, A.H and V. DEPT.,FOR
CAVEATOR
Linked Case : WA/27/2025
THE STATE OF ASSAM AND 3 ORS.
REPRESENTED BY THE PRINCIPAL SECRETARY
DEPARTMENT OF ANIMAL HUSBANDRY AND VETERINARY
ASSAM SECRETARIAT (CIVIL)
DISPUR GUWAHATI- 781006.
2: THE JOINT SECRETARY TO THE GOVERNMENT OF ASSAM
DEPARTMENT OF ANIMAL HUSBANDRY AND VETERINARY
ASSAM SECRETARIAT (CIVIL) DISPUR GUWAHATI- 781006.
3: THE SECRETARY CUM DIRECTOROFFICE OF THE DIRECTOR
ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT
CHENIKUTHI GUWAHATI ASSAM PIN- 781003
4: THE TENDER EVALUATION COMMITTEE
REPRESENTED BY THE CHAIRMAN.
VERSUS
M/S CONSULTING ENGINEER (NG) AND 4 ORS
A PARTNERSHIP FIRM BEING REPRESENTED BY ITS PARTNER
MS. PRIYANKA DAS AGED ABOUT 34 YEARS
HAVING ITS REGISTERED OFFICE AT- HOUSE NO. 46A
SIMANTA PATH P.O.- PILINGKATA BASISTHA CHARIALI
Page No.# 3/39
GUWAHATI- 781029 KAMRUP(M) ASSAM.
2:PRIYANKA DASWIFE OF SRI PRANAB DAS
RESIDENT OF HOUSE NO. 46A BASISTHA CHARIALI
DISTRICT- KAMRUP(M) ASSAM PIN- 781029
3:M/S FRIEND ENTERPRISE REPRESENTED BY ITS PROPRIETOR
SRI BHASKARJYOTI BARUAH
HAVING ITS OFFICE AT MORANKARI HANDIQUE GAON
NAMTI DOLL SIVASAGAR DISTRICT- SIVASAGAR ASSAM
4:M/S MEDICOS AND ENGINEERINGREPRESENTED BY ITS PROPRIETOR
MR. FOIZUDDIN AHMED HAVING ITS OFFICE AT HATIPOTI
P.S.- GELAKI DISTRICT- SIVASAGAR ASSAM.
5:JAYANTA KHAUND PROPRIETOR K.B. ROAD WARD NO. 11
P.S.- NORTH LAKHIMPUR DISTRICT- NORTH LAKHIMPUR ASSAM
------------
Advocate for : MITHUMONI KATAKY
Advocate for : appearing for M/S CONSULTING ENGINEER (NG) AND 4 ORS
BEFORE
HONOURABLE THE CHIEF JUSTICE
HONOURABLE MR. JUSTICE N. UNNI KRISHNAN NAIR
Date of hearing : 20.02.2025
Date of Judgment & Order : 04.03.2025
JUDGMENT & ORDER (CAV)
(N. Unni Krishnan Nair, J.)
Heard Mr. Hridip Kumar Das, learned counsel, appearing on behalf of
the appellant in WA No. 354/2024. Also heard Mr. R. Singha, learned
counsel, and Ms. M. M. Kataky, learned standing counsel, Animal
Husbandry & Veterinary Department, appearing on behalf of their
respective respondents in WA No. 354/2024. None has entered appearance
on behalf of respondents No. 8 & 9.
Heard Ms. M. M. Kataky, learned standing counsel, Animal Husbandry
Page No.# 4/39
& Veterinary Department, appearing on behalf of the appellants in WA No.
27/2025. Also heard Mr. R. Singha, learned counsel, and Mr. H. K. Das,
learned counsel, appearing on behalf of their respective respondents in WA
No. 27/2025. None has entered appearance on behalf of respondents No. 4
& 5.
2. Since the facts involved in the above-noted writ appeals are identical
and in the appeals, the challenge presented being to the judgment & order,
dated 23.09.2024, passed by the learned Single Judge in WP(c)3526/2024;
both the writ appeals were heard together and are disposed of by this
common judgment & order.
3. The appellants, herein, in above-noted writ appeals by way of
instituting the present intra-Court appeals, have presented a challenge to
the judgment & order, dated 23.09.2024, passed by the learned Single
Judge in WP(c)3526/2024, allowing the said writ petition by interfering with
the decision of the Tender Evaluation Committee declaring the bid of the
respondent No. 1/writ petitioner in both these appeals, to be non-
responsive.
4. The brief facts requisite for adjudication of the issue arising in these
writ appeals, is noticed as under:
The Director, Animal Husbandry and Veterinary Department, had
floated a Notice Inviting Tender(NIT), dated 23.02.2024, inviting bids for
the work of construction of new Multicare Hospital including Logistics at
Joysagar in Sibsagar District under SOPD-G Scheme.
Page No.# 5/39
In pursuance of the Notice Inviting Tender(NIT), dated 23.02.2024,
the appellant in WA 354/2024, along with respondent No. 1/writ petitioner
and others, had submitted their respective bids. The said Notice Inviting
Tender(NIT) laid down a 2-stage evaluation of the bids. Accordingly, thetechnical bid of the bidders were considered at the 1 st stage by the Tender
Evaluation Committee and on such consideration while the bid of the
appellant, herein, in WA 354/2024, along with that of respondents No. 8 &
9, therein; were found to be responsive; the bid of the respondent No.
1/writ petitioner was found to be non-responsive on the ground that the
labour license as submitted by the respondent No. 1/writ petitioner was
valid for Kamrup(Metro) District only.
Being aggrieved by the decision of the Tender Evaluation Committee
in holding its bid to be non-responsive; the respondent No. 1/writ petitioner
had assailed the said decision by way of instituting before the writ Court a
writ petition being WP(c)3526/2024.
The learned Single Judge, upon considering the issues arising in the
said writ petition as well as upon hearing the parties to the proceeding, was
pleased vide judgment & order, dated 23.09.2024, in WP(c)3526/2024, to
allow the writ petition by interfering with the decision of the Tender
Evaluation Committee insofar as, the technical bid of the respondent No.
1/writ petitioner, was so considered. On such interference being made;
matter was relegated to the Bid Evaluation Committee for arriving at a
fresh decision in terms of the determination made in the said judgment &
order, dated 23.09.2024.
Page No.# 6/39
The operative portion of the said judgment & order, dated
23.09.2024, passed by the learned Single Judge in WP(c)3526/2024, being
relevant, is extracted hereinbelow:
“22. Thus, it is clear from the aforesaid provision that requirement of a labour license
is an essential qualification under Clause 2.A.(iii). From the aforesaid discussion, it is
also clear that in terms of Clause E.35, the evaluation shall be confined only to the
requirement under Clause E.35.2.(a) to (e). Clause E.35.2. (e) deals with the additional
criteria. The additional criteria are enumerated in Clause 2.A.(iii) and prescribes
amongst other “a labour license”. However, Such clause does not specify any
characteristic of such license, though, from the affidavit of the employer it is seen
that such license is a contract labour license.
23. Be that as it may, from the clauses enumerated hereinabove, there is no doubt in
the mind of this Court that contract labour license is not only an essential
qualification but the same is also a part of evaluation of Bid process. There is nothing
under the ITB which suggest any specification and/or characteristic of a labour
license except suggesting in Clause 2.A.(iii) under Section IV, that labour license is a
qualifying criteria without prescribing that such labour license shall be treated as
valid in a situation as projected by the employer in their affidavit. In fact, so far
relating to the other licenses such as Electrical License, Anti Termite License, Fire
Fighting License, a specific questionnaire is put in the respective forms under Section
VI to the effect that whether the bidder is having such certificate and if not, the same
is to be submitted at the time of signing of the agreement. Thus, the aforesaid licenses
which are prescribed under Section VI and necessary for bid evaluation, can also be
submitted after contract is awarded and at the time of signing of such contract.
24. There is no quarrel to the proposition of law as urged by the learned Counsels for
the respondents that an employer of a project having authored the tender document,
is the best person to understand and appreciate its requirement and interpret his
document and that the constitutional Courts must defer to such understanding and
appreciation of the tender document except when there is malafide or perversity in
the understanding or appreciation or in the application of terms of the tender
condition. It is equally well settled that judicial interpretation of contracts in the
sphere of commerce stands on a distinct footing than while interpreting a statute and
that the High Court should not interfere when there are differences in contractual
interpretation. In the case in hand, the respondent employer is interpreting a contract
labour license to be valid, for the purpose of the tender in question, when it is issued
by the regional licensing authority under whose jurisdiction the contract is to be
executed or issued by a licensing authority, who has jurisdiction to issue license for
whole of the State. Thus, they are treating all the valid licenses issued by the
licencing authorities, other than the aforesaid two licensing authorities to be invalid.
In short, a valid license under the Act 1970 and Rules, 1971 is being interpreted to be
invalid for the purpose of their contract. Generally, such interpretation should not be
interfered in the exercise of power of judicial review. When there are differences in
contractual interpretation. However, this Court cannot ignore the fact that respondent
authorities had not disclosed such intention in the ITB.
Page No.# 7/39
25. Thus, even if, it is assumed that the employer is at liberty to interpret a valid
license issued under the Act, 1970 and Rules,1971 to be invalid, however, when they
intend to do so, to have a fair play and transparency and credibility of the bidding
process, they will have to disclose such a criteria inasmuch as for ensuring
transparency and fairness, all evaluation criteria are required to be explicitly
explained in the tender document more particularly, for the reason that the employers
have interpreted an otherwise valid license issued by a statutory authority to be an
invalid license. Such disclosure would have reinforced the importance of adherence to
principles of equality and non discrimination in public procurement. In the case of
Dutta Associates Pvt. Ltd. -Vs- Indo Merchatiles Pvt. Ltd. and Ors. reported in 1997 (1)
SCC 53, the Hon’ble Apex Court held that all criteria for evaluating bid must be
clearly mentioned in tender notice. Any undisclosed or hidden criteria that affect the
outcome of the bidding process, is unfair and contrary to the principles of
transparency and credibility. It is important to record that Hon’ble Apex Court in
Michigan Rubber (India) Limited -Vs- State of Karnataka and Others reported in (2012)
8 SCC 216 at paragraph 23 held that actions of the State are amenable to the judicial
review so far the same relates to contractual matter, only to the extent that the State
must act validly for a discernible reason and not whimsically for any ulterior
purpose. Therefore, in such a situation, this Court shall not be powerless to interfere
with the decision making process when it is arbitrary and unfair.
26. Another important aspect of the matter having relevance and inextricably
connected with the opinion expressed in the forgoing paragraphs, in the considered
opinion of this Court, is the nature of license that can be issued under the scheme of
the Act, 1970 and the Rules, 1971. Such a licence is contract/work specific and
therefore, a separate license shall required to be issued under the statute to the
bidder, who will be engaged in the contract by the principal employer after completion
of the bidding process and therefore, the labour license insisted under the ITB can be
a qualifying criteria but cannot be the labour license on the basis of which the
contract in question can be actually executed. Therefore, insistence of such clause can
at best be for the purpose of ascertaining whether the bidder is having expertise in
engaging contract labour by following the prescription under the Act, 1970 and the
Rules, 1971, which can have a bearing on the responsiveness of the bid. The basis of
such finding of this Court is being dealt with in the following paragraphs.
27. The Act, 1970 was enacted to regulate the employment of contract labour in
certain establishments and to provide for its abolition in certain circumstances and
for matters connected therewith. The Act is made applicable to every establishment
and to every contractor when they employ contract labour for certain period. In terms
of the definition given under the Act, 1970, an establishment is any office or
department of government or local authority or any place where any industry, trade,
business, manufacture or occupation is carried on. Thus, in the case in hand, the
establishment shall mean either the District office of Animal Husbandry and
Veterinary Department, Sivasagar or the Directorate of Animal Husbandry &
Veterinary Department, Government of Assam. Principal employer has been defined, in
relation to any office or department of government or a local authority, to be the Head
of that office or the Department or any other office as the government or the local
authority may specify on this behalf. In the case in hand, there is no specific
notification on this behalf and therefore, the principal employer shall mean the
Animal Husbandry and Veterinary Department of the State of Assam.
28. Section 12 of the Act, 1970 debars the contractor under this Act, to undertake or
execute any work through contract labour except in accordance with the license
Page No.# 8/39issued in this behalf by the licensing officer.
29. In terms of Section 35 of the Act, 1970 the State of Assam has enacted the Rules,
1971. Chapter-III of the Rules, 1971 deals with registration and licensing.
30. In terms of Rule 21 of the Rules, 1971 application for a license is to be filed by the
contractor in Form-IV before the Licensing Officer of the area, in which the
establishment is located, in relation to which he is a contractor. Such application is
required to be accompanied by a certificate of the principal employer in Form-V and a
licence is to be issued in Form -VI. The Form IV and the relevant portions of Form V
and VI are quoted herein below:-
“FORM-V
FORM OF CERTIFICATE BY PRINCIPAL EMPLOYERCertified that I have engaged/propose to engage the applicant* the
applicant…………………….(name of the contractor) as a contractor in my establishment. I
undertake to be bound by all the provisions of Contract Labour (Regulation and
Abolition) Act, 1970 and Contract Labour (Regulation and Abolition) Assam Rules, 1971
in respect of the employment of Contract Labour by the applicant in my establishment.
Place:
Date:
Signature of Principal Employer:
Name and Address of the Establishment”.
“FORM-IV
See Rule 21(1)]
APPLICATION FOR LICENSE
3. Particulars of establishment where contract labour is to be employed:-
(a) Name and Address of the establishment;
4. Particulars of contract labour-
(b)Duration of the proposed contract work (give particulars of proposed date of
commencing and ending); (c) Name and address of the Agent or Manager of Contractor at
the work site;
7. Whether the contractor has worked in any other establishment within the past five
years. If so, give details of the Principal Employer, establishments and nature of work.
8. Whether a certificate by the Principal Employer in Form V is enclosed”.
“FORM-VI
[See Rule 25 (1)]
Government of Assam.
Office of the Licensing Officer,
Sl No.
Licence No. Date. ………. Fee Paid Rs………….
LICENCE
1. ………..
2. This licence is for doing the work of …………………….. (nature of work to be indicated)
in the establishment of ……………………. (name of the principal employer to be indicated)
Page No.# 9/39at …………………………..(place of work to be indicated)
3. ……….”
31. It is seen from the aforesaid quoted and highlighted provision of Form IV that the
application for license seeks disclosure of the particulars of the contract, which
includes the nature of work in which the contract labour is employed or is to be
employed in the establishment, duration of the proposed contract work with proposed
date of commencement and end. The name of the manager at the worksite is also to be
declared. Another important aspect is that it is to be declared by the contractor
whether the contractor has worked in any other establishment within the last five
years, and if so to give the details of the principal employer, establishment and
nature of works. From the Form-V, it is seen that a certification can be granted when
a person is either already engaged as contractor in the establishment by the principal
employer or principal employer is proposing to engage the applicant as a contractor
in the establishment. Form VI, the license also clarifies that in the license, the nature
and the place of the work, period of such work and the name of the principal
employer is to be indicated.
32. Therefore, in the considered opinion of this Court, a license can be granted when
the contractors have already been engaged or proposed to engage a contractor and
relatable to the work contract.
33. Rule 32 of the Rules, 1971 shall also support such conclusion inasmuch as Rule
32 prescribes that when an establishment requires employment of contract labours
immediately, and such employment is estimated to last not more than 15 days,
temporary licenses can be granted by the licensing officer having jurisdiction over the
area in which the establishment is situated.
34. To summarize, under the scheme of the Act, 1970 and Rules, 1971, a labour
license can be granted against a specific contract. The certification issued by the
employer requires the name of the specific contract. The application to be filed by the
contractor for license, also requires the specification of the work and duration.
Therefore, in terms of the Act, 1970, a license shall be required in the case in hand
after the work is awarded or after bidder is selected i.e. when the employer proposes
to engage the successful bidder or after they engage the contractor. On the basis of
such certification (Form V), the contractor is to apply for a labour license giving
details of the work in question and the period etc. This Court is also of the opinion
that in the aforesaid scheme of the Act, 1970 and the Rules, 1971, the contract
license sought under the tender condition cannot be but for the reason to examine and
satisfy the employer themselves that the concerned bidder has the capability to
engage contract labour and can provide the labour licence for the purpose of utilizing
it in the contract. Mr. D. Nath, learned counsel has also expressed his opinion that
such condition of license might be incorporated for the purpose of ascertaining that
the Bidder is having experience of engaging contract labour with valid Licence. That
being the position, it will be further discrimination to insist upon a specific kind of
licence without any disclosure to that effect in the ITB.
35. While acknowledging the principle that the award of contract, like the present
one, is essentially a commercial transaction and therefore, the employer can choose
its own method to arrive at a decision, in the given facts and findings recorded
Page No.# 10/39
hereinabove, this Court is of the unhesitant view that though the employer shall be
within its domain to interpret a document which suits their consideration, however,
such exercise of power should not lead to violation of Article 14 of the Constitution of
India.
36. To summarize, and therefore, in the case in hand, though the employer is within
its competence to accept only the certificate issued by the Central authority or the
Regional authority of the region where work is to be executed, however, such
condition ought to have been disclosed in the tender itself, more particularly for the
reason that firstly, the license issued by the authority to the petitioner is also a valid
license in terms of the Act, 1970 and the Rules, 1971 and secondly, such a valid
license is proposed and/ or decided to be invalid by the employer. Another aspect of
the matter is that a contract license is required to be issued for the work in question
under the scheme of the Act, specific to the work and therefore, the ground of
rejection is not sustainable being arbitrary and unreasonable and there is perversity
in appreciation of the provisions of the Act, 1970 and the Rules, 1971 and above that,
such criteria in the considered opinion of this Court, is a hidden criteria which was
not disclosed to all the contractors. The action of the respondent in declaring
subsequently that such license shall be an invalid license without disclosure of such
intention is against the principle of Article 14 of the Constitution of India inasmuch
as Article 14 demands fairness in action by the State. Non-arbitrariness is the
essence, substance and heartbeat of fair play.
37. As regards the exercise of power under the tender for calling the historical
document, this Court do not find any infirmity for calling such historical document
for the reason that not only the Evaluation Committee is having power to call such
historical document but also the documents called are past documents issued by the
instrumentalities of State and admittedly the petitioner did not have any historical
document as regards contract license issued by licensing authorities, which is
relatable either to the whole of the State or to the place where the contract is being
executed.
38. For the reasons recorded herein above, it is held that the impugned decision to
declare the Bid of the petitioner to be non-responsive for want of a valid Contract
Labour license is arbitrary, unfair and unreasonable and therefore, violative of the
petitioner’s right under Article 226 of the Constitution of India.
39. Accordingly, the writ petition stands allowed by setting aside and quashing the
impugned decision dated 01.07.2024 of the Evaluation Committee. Matter is now
relegated to the Bid Evaluation Committee to take a fresh decision in terms of the
determination made hereinabove. Parties to bear their own costs.”
4. Mr. Das, learned counsel for the appellant in WA 354/2024, assailing
the judgment & order, dated 23.09.2024, passed by the learned Single
Judge in WP(c)3526/2024, has submitted that the terms and conditions of
the Notice Inviting Tender(NIT), dated 23.02.2024, having mandated
Page No.# 11/39
furnishing a valid labour license as a qualification criteria for evaluation of
the bids and the same when read with the provisions of Clause 1 of Section
IV of the said Notice Inviting Tender(NIT); the employer having required
the labour license so mandated to be in connection with work, in question;
the bidder was required, either, to produce a labour license covering the
District of Sivasagar, and/or, a labour license covering the whole of the
State of Assam.
5. Mr. Das, learned counsel, has further submitted that the labour
license furnished by the respondent No. 1/writ petitioner along with his bid,
was issued by the licensing authority having jurisdiction within the
Kamrup(Metro) District only; the same was specifically issued for works
within Kamrup(Metro) District only. Mr. Das, learned counsel, has also
submitted that the Tender Evaluation Committee on noticing that the labour
licenses as submitted by the respondent No. 1/writ petitioner being only
with respect to Kamrup(Metro) District; had rightly declared the bid of the
respondent No. 1/writ petitioner to be non-responsive to the conditions of
the Notice Inviting Tender(NIT), dated 23.02.2024.
6. Mr. Das, learned counsel, has submitted that the labour licenses in the
State, are issued, either, covering the specific District and/or for the whole
of the State of Assam and the license issuing authorities are also different.
Mr. Das, learned counsel, has further submitted that the work, in question,
being required to be executed in the District of Sivasagar; the employer
having interpreted that such license to be one covering the District of
Sivasagar, either, issued by the license issuing authority of Sivasagar
District and/or by the authority issuing license for whole of the State of
Page No.# 12/39
Assam, as in the case of the appellant, herein; no error can be attributed to
such requirement so placed by the employer, in this connection.
7. Mr. Das, learned counsel, by referring to the provisions of Clause 35
of the Instructions to Bidders(ITB) finding place in Section II of the Notice
Inviting Tender(NIT), dated 23.02.2024, has submitted that the manner of
evaluation of bids was set-out therein. By referring to the provisions of
Clause 35.2(e), Mr. Das, learned counsel, has submitted that an additional
evaluation factor as specified in “Section IV: Evaluation and Qualification
Criteria”, was also incorporated in the provisions of Clause 35.2 for the
purpose of evaluation of the bids received in pursuance of the Notice
Inviting Tender(NIT), dated 23.02.2024.
8. Mr. Das, learned counsel, by referring to the provisions so available in
Clause 1 of Section IV of the Notice Inviting Tender(NIT), dated
23.02.2024, more particularly, the language in which the said provision is
so couched; has submitted that the labour license was denoted as a
qualification criteria for the purpose of evaluation of the bids of the bidders
and the same, in view of the language of the provision, relatable to the
work, involved; has to be construed to be a labour license issued covering
the District of Sivasagar.
9. Mr. Das, learned counsel, by further referring to the judgment &
order, dated 23.09.2024, passed by the learned Single Judge in
WP(c)3526/2024, has submitted that the learned Single Judge had also
accepted the fact that the labour license was an essential qualification
under the provisions of Clause 2.A(iii) of the Notice Inviting Tender (NIT),
Page No.# 13/39
dated 23.02.2024, for the purpose of evaluation of the bids. It was
submitted by Mr. Das, learned counsel, that the learned Single Judge had
further also noticed the contention of the employer that the labour license
which is a contract labour license for the purpose of the tender, in question,
is one which is issued by the regional licensing authority under whose
jurisdiction the contract work, in question, would be executed and/or issued
by a license issuing authority who has the jurisdiction to issue licenses for
the whole of the State of Assam. Mr. Das, learned counsel, has,
accordingly, projected that the learned Single Judge having recorded the
said findings; erred in proceeding to conclude that the said stand of the
employer not being disclosed in Notice Inviting Tender(NIT), dated
23.02.2024; the same was a hidden criteria and accordingly, the said
criteria was held to be an arbitrary one.
10. Mr. Das, learned counsel, by highlighting that the learned Single
Judge by examining the provisions of the Contract Labour Regulation and
Abolition Act, 1970, read with the Contract Labour(Regulation & Abolition)
Assam Rules, 1971, proceeded to draw conclusions in the matter that the
said labour license would be the one which would be so required to be
acquired by a bidder after the contract is so settled with him; has
submitted that the said conclusions drawn by the learned Single Judge
would have no application, insofar as, the evaluation of the bids is
concerned, in view of the categorical requirement made in the Notice
Inviting Tender(NIT), dated 23.02.2024, for a bidder to furnish a labour
license along with the bid which was also to be so scrutinized in the process
of evaluation of the bids so received.
Page No.# 14/39
11. Mr. Das, learned counsel, by referring to the conclusions drawn by the
learned Single Judge in Paragraph No. 34 of the judgment & order, dated
23.09.2024, in WP(c)3526/2024; has submitted that while on the one
hand, the learned Single Judge had recorded a finding to the effect that the
contract labour license sought under the tender conditions is for the
purpose of examination and satisfaction of the employer that the concerned
bidder had the capability to engage contract labour and provide the labour
license for the purpose of utilizing it in the contract; erred in proceeding to
draw a further conclusion that the employer could not have insisted upon a
specific kind of labour license without a disclosure in this connection in the
tender conditions.
12. Mr. Das, learned counsel, has submitted that the stand of the
employer before the learned Single Judge in the matter, as well as in view
of the provisions of Section IV, more particularly, Clause 1 thereof; there
was no ambiguity that the labour license so mandated, was in connection of
the execution of the work which was to take place in the District of
Sivasagar. Accordingly, the labour license being construed by the employer
to be one which covers the District of Sivasagar to be the mandated
document for the purpose of evaluation of the bids; it was submitted by Mr.
Das, learned counsel, that the learned Single Judge could not have taken a
contrary view in the matter, moreso, when there was no allegation of any
mala fide and/or bias levelled against the employer by the respondent No.
1/writ petitioner in the writ petition.
13. Mr. Das, learned counsel, by further referring to the conclusions
drawn by the learned Single Judge in paragraph No. 37 of the judgment &
Page No.# 15/39
order, dated 23.09.2024, in WP(c)3526/2024, has submitted that the plea
of the respondent No. 1/writ petitioner that the Tender Evaluation
Committee had without authority considered the historical documents for
the purpose of evaluation of the bids of the bidders before it, but, similar
benefit was not extended to it, was correctly rejected by the learned Single
Judge, in-as-much as, the respondent No. 1/writ petitioner did not have
any historical document as regards the contract labour license being issued
by the license issuing authority which is relatable either to the whole of the
State of Assam, or, to the place where the contract, in question, is to be
executed.
14. Mr. Das, learned counsel, has further submitted that the conclusions
of the learned Single Judge with regard to the action on the part of the Bid
Evaluation Committee pertaining to availability of historical documents;
reveals that the stand of the State Respondents that the labour license
must relate to the place where the contract is being executed, was
accepted by the learned Single Judge. However, the learned Single Judge
erred in proceeding to interfere with the decision of the Bid Evaluation
Committee insofar as the declaration of the bid of the respondent No.
1/writ petitioner as non-responsive, was so concerned.
15. Mr. Das, learned counsel, in the above premises, has submitted that
the learned Single Judge in the impugned judgment & order, dated
23.09.2024, in WP(c)3526/2024; had drawn contradictory conclusions. Mr.
Das, learned counsel, has further submitted that the employer having
taken a specific stand with regard to the nature of the labour license
required by it from the bidders for evaluation of the bids so received in
Page No.# 16/39
pursuance of the Notice Inviting Tender(NIT), dated 23.02.2024, and the
said stand being an interpretation of the contractual terms by the employer,
which did not suffer from any arbitrariness and unreasonableness, the
learned Single Judge could not have sat over the same as a Court of appeal
and drawn conclusions contrary to the one that was projected by the
employer.
16. Mr. Das, learned counsel for the appellant in WA 354/2024; in support
of his submissions, has placed reliance on the following decisions of the
Hon’ble Supreme Court:
(i). Silppi Constructions Contractors v. Union of India & anr.,
reported in (2020) 16 SCC 489;
(ii). Utkal Supplier v Maa Kanak Durga Enterprises & ors., reported in
(2021) 14 SCC 612; and
(iii). N.G. Projects Ltd. v. Vinod Kumar Jain & ors., reported in
(2022) 6 SCC 127
17. Ms. Kataky, learned standing counsel, Animal Husbandry & Veterinary
Department, appearing for the appellant in WA No. 27/2025; while
adopting the submissions made by Mr. Das, learned counsel for the
appellant in WA No. 354/2024; has submitted that the employer in terms of
the conditions as contained in the Notice Inviting Tender(NIT), dated
23.02.2024, has construed the labour license as a qualification criteria for
the purpose of evaluation of the bids. It was further submitted by Ms.
Kataky, learned counsel, that the employer had deemed that such labour
license requisite to be submitted by the bidders, to be one so issued by the
competent authority, either, for the District of Sivasagar, and/or, for the
whole of the State of Assam.
Page No.# 17/39
18. Ms. Kataky, learned standing counsel, Animal Husbandry & Veterinary
Department, has submitted that basing on the said requirement, the bids of
the participating bidders in pursuance of the Notice Inviting Tender(NIT),
dated 23.02.2024, were evaluated by the Tender Evaluation Committee. On
such evaluation, the labour license submitted by the respondent No. 1/writ
petitioner being found to be only limited to the Kamrup (Metro) District; its
bid was held to be non-responsive. Ms. Kataky, learned counsel, has further
submitted that on an examination of the historical documents which were
permissible in terms of the provisions of Clause 30 of the Notice Inviting
Tender(NIT), dated 23.02.2024; the respondent No. 1/writ petitioner not
having been found to have ever been issued with a labour license for the
whole of the State of Assam and/or, for the District of Sivasagar wherein
the contract was to be so executed; no opportunity was called upon to be
so issued to the respondent No. 1/writ petitioner, to produce a labour
license covering the District of Sivasagar, in-as-much as, an opportunity so
granted to the respondent No. 1/writ petitioner would have resulted in
production of a license in this connection issued after the last date for
submission of bids in pursuance of the Notice Inviting Tender(NIT), dated
23.02.2024, which was not permissible.
19. In the above premises, Ms. Kataky, learned counsel appearing for the
appellant in WA No. 27/2025, has submitted that the judgment & order,
dated 23.09.2024, passed by the learned Single Judge in WP(c)3526/2024,
would call for an interference and thereby, permit the employer, to get the
work executed which work was contended to be of great importance insofar
as providing care to the animals, was so concerned.
Page No.# 18/39
20. Per contra, Mr. Singha, learned counsel appearing for the respondent
No. 1/writ petitioner, in both the writ appeals; has submitted that labour
license so requisite, cannot be held to be a mandatory document, in-as-
much as, in view of the provisions of the Contract Labour(Regulation and
Abolition) Assam Rules, 1971; such labour license was to be so procured by
the contractor after the allotment of the contract, in question, by the
employer.
21. Mr. Singha, learned counsel, has further submitted that the
respondent No. 1/writ petitioner along with its bid, had also furnished a
copy of the labour license so issued to it pertaining to Kamrup(Metro)
District which would establish the fact that the respondent No. 1/writ
petitioner was qualified to engage labourers by complying with the
provisions of the Contract Labour Regulation and Abolition Act, 1970, and
the Contract Labour(Regulation and Abolition) Assam Rules, 1971.
22. Mr. Singha, learned counsel, has submitted that the said labour
license could not have been declared to be invalid by the Bid Evaluation
Committee, in-as-much as, the said license was also issued by a competent
authority so empowered under the provisions of the Contract
Labour(Regulation and Abolition) Assam Rules, 1971.
23. Mr. Singha, learned counsel, by referring to the labour license so
furnished by the respondent No. 1/writ petitioner along with its bid in the
tender; has submitted that the same was issued by a competent license
issuing authority for execution of the contract and supply in the
establishment of the Directorate of Animal Husbandry and Veterinary
Page No.# 19/39
Department, Assam, which was situated in Kamrup(Metro) District.
Accordingly, Mr. Singha, learned counsel, has submitted that the said
labour license having been so issued in respect of the establishment of the
Directorate of Animal Husbandry and Veterinary Department; the same
would also cover the various District establishments under the Directorate
of Animal Husbandry and Veterinary Department, Assam, including such
District establishment at Sivasagar.
24. In the above premises, Mr. Singha, learned counsel, has submitted
that the respondent No. 1/writ petitioner had substantially complied with all
the mandatory requirements. However, the Bid Evaluation Committee by
ignoring a valid labour license so furnished by the respondent No. 1/writ
petitioner, had proceeded to hold the bid of the respondent No. 1/writ
petitioner, to be non-responsive only on account of the fact that the labour
license was so issued in respect of Kamrup(Metro) District only.
25. Mr. Singha, learned counsel, by reiterating that on award of the
contract in pursuance of the Notice Inviting Tender(NIT), dated 23.02.2024,
a fresh labour license being mandatory; the requirement of a labour license
along with the bid was only for the purpose of ascertaining as to whether
the concerned bidder had the capability to procure the required contract
labour license for engagement of labour for the purpose of execution of the
work involved. Accordingly, it has been submitted by Mr. Singha, learned
counsel, that the labour license as furnished by the respondent No. 1/writ
petitioner ought to have been construed to be fulfilling the said
requirement and accordingly, the bid of the respondent No. 1/writ
petitioner was mandated to be held to be responsive.
Page No.# 20/39
26. Mr. Singha, learned counsel, has further submitted that if it was the
intention of the employer that the labour license must be the one which
was so issued for the District of Sivasagar, and/or, a labour license issued
for the whole of the State of Assam then the same ought to have been so
disclosed in the terms and conditions so framed in the Notice Inviting
Tender(NIT), dated 23.02.2024. Without a disclosure of the said
specification about the labour license in the said Notice Inviting
Tender(NIT), the same could not have been utilized by the employer for the
purpose of evaluation of the bids to the prejudice of the bidders.
27. Mr. Singha, learned counsel, has submitted that the learned Single
Judge after examining all the aspects of the matter involved; had drawn
conclusions vide the judgment & order, dated 23.09.2024, in
WP(c)3526/2024, to the effect that the decision of the Bid Evaluation
Committee towards holding the bid of the respondent No. 1/writ petitioner
to be non-responsive, was arbitrary and unfair. The learned counsel has,
accordingly, submitted that the said decision of the learned Single Judge,
would not call for any interference.
28. Mr. Singha, learned counsel, in support of his submissions; has relied
upon the following decisions of the Hon’ble Supreme Court:
(i). Tata Cellular v. Union of India, reported in (1994) 6 SCC 651;
and
(ii). Indian Railway Catering and Tourism Corporation Ltd.& anr. v.
Doshion Veolia Water Solutions Pvt. Ltd. & ors., reported in
(2010) 13 SCC 364
Page No.# 21/39
29. Mr. Singha, learned counsel, in addition to the above-noted decisions
of the Hon’ble Supreme Court, has also relied upon the following decisions
of this Court:
(i). Pooja Associates(M/S) v. State of Assam & ors., reported in
2018(5) GLT 478; and
(ii). Mazumdar Enterprise v. Union of India & ors., reported in
(2019) 7 GLR 767
30. We have heard the learned counsels appearing for the parties,
perused the decisions relied upon and also perused the materials brought
on record.
31. Before proceeding to examine the rival contentions of the parties; it
would be beneficial to refer to the various provisions of the Notice Inviting
Tender(NIT), dated 23.02.2024, relevant to the issues arising in the
present proceedings.
32. The Notice Inviting Tender(NIT), dated 23.02.2024, was so issued
inviting bids for the purpose of Construction of New Multicare Hospital
including Logistics at Joysagar in Sibsagar District under SOPD-G.
33. Under the provisions of Clause 6 of the Instructions to Bidders(ITB)
placed in Section II of the Notice Inviting Tender (NIT), dated 23.02.2024,
which pertains to “bidders qualification’; Clause 6.1 stipulates, as follows:
“6.1 Bidders should substantially meet the qualification criteria as stipulated in the
Section-IV”
Page No.# 22/39
34. Clause 35 of Section II of the said Notice Inviting Tender (NIT), dated
23.02.2024, stipulates, as follows:
“35. Evaluation of Bids:
35.1 The Employer/ Evaluation Committee shall use the criteria and methodologies
listed in this Clause, No other evaluation criteria or methodologies shall be permitted.
35.2 To evaluate a Bid, the Employer/ Evaluation Committee shall consider the
following:
(a) the bid price, excluding Provisional Sums and the provision, if any, for
contingencies in the Summary Bill of Quantities.
(b) price adjustment for correction of arithmetic errors in accordance with ITB
33.1.
(c) price adjustment due to discounts offered in accordance with ITB Para 14
and 35.3.
(d) price adjustment due to quantifiable nonmaterial nonconformities in
accordance with ITB 32.3
(e) the additional evaluation factors are specified in Section IV. Evaluation and
Qualification Criteria.”
35. The provisions of Clause 35.2(e) mandates that for the purpose of
evaluation of the bids; additional evaluation factors as specified in “Section
IV: Evaluation and Qualification Criteria”, would also be considered. Section
IV pertaining to “Evaluation and Qualification Criteria” of the Notice Inviting
Tender(NIT), dated 23.02.2024, stipulates, as follows:
“Section IV-Evaluation and Qualification Criteria:
This Section contains all the criteria that the Employer shall use to evaluate a bid
and qualify the Bidders, in accordance with ITB 35 and 36, no other factors, methods
or criteria shall be used. The Bidder shall provide all the information requested in the
forms included in Section VI-Bidding Forms.
1. Evaluation-ITB-35.2(e)
In addition to the criteria listed in ITB 35.2 (a) (d), the following criteria shall apply.
Evaluation of the Bidder’s Technical Bid will include an assessment of the Bidder’s
technical capacity to mobilize key equipment and personnel for the contract
consistent with its proposal regarding work methods, scheduling, and material
sourcing in sufficient detail and fully in accordance with the requirements stipulated
in Section V Works Requirements. Such an evaluation shall be based on the
qualification criteria listed below.
Page No.# 23/39
2. Qualification Criteria:
A. Bidder should demonstrate that they fulfill the following qualification
Criteria:
a. The bidder should have achieved a minimum annual financial
turnover in any single year (defined as a billing for works in progress
and completed in all classes of civil engineering construction works
only) over the last 5 (five) financial years 2018-19 to 2022-23 amounting
to Rs. 359.46 L
b. The bidder must be a profit-making entity for the last 5 (five) financial
years 2018-19 to 2022-23.
C. The bidder should have satisfactorily completed, as a prime
contractor at least one similar work of value not less than Rs.287.56 L.
d. i. The bidder (or its sub-contractor, if any) should possess valid
electrical licence for executing electrical works of the project and should
have executed similar electrical works for a minimum amount of Rs.
4.00 L in any one of the last 5 financial year in a single job. Incase the
bidder is not in possession of such licence, the bidder must enter into a
collaboration/tie up arrangement with such licence holder having
requisite experience, such the up must be submitted with NOTARY.
ii. GST registration certificate with upto date Challan,
iii. EPF with upto date payment Challan along with upto
date Labour Licence and ESIC.
iv. Up to date Professional tax submission certificate.”
36. A perusal of Section 35 of the Instructions to Bidders (ITB) as
contained in the Notice Inviting Tender(NIT), dated 23.02.2024; more
particularly, Clause 35.2 would go to reveal that the employer/evaluation
committee shall evaluate the bids of the participating bidders in terms of
the provisions of sub-clause (a)-(e) of Clause 35.2.
37. Clause 35.2(e) mandates that in addition to the evaluation criteria as
set-out in sub-Clause(a)-(d) of Clause 35.2; the additional evaluation
factors as specified in Section IV of the Notice Inviting Tender(NIT), dated
23.02.2024, shall be so considered.
38. The provisions of Clause 1 of Section IV of the Notice Inviting
Tender(NIT), dated 23.02.2024, stipulates that in addition to the criteria
Page No.# 24/39
listed in Instructions to Bidders(ITB) under Clause 35.2(a)-(d); the same
shall also include an assessment of the bidders technical capacity to
mobilize key equipment and personnel for the contract consistent with its
proposal regarding the various aspects of the work. Such an evaluation was
to be so made based on the qualification criteria listed under Clause 2 of
Section IV. Clause 2(A)(d)(iii) mandates the intending bidder to furnish an
“EPF Certificate with upto-date payment challan along with upto-date
labour license and ESIC”.
39. Accordingly, in view of the manner in which the requirement of
furnishing a labour license is so placed in the provisions of the Notice
Inviting Tender(NIT), dated 23.02.2024, it has to be concluded that the
said labour license is a mandatory qualification criteria and it forms a part
of the evaluation process of the bids so received in pursuance of the said
Notice Inviting Tender(NIT).
40. The rival contentions of the parties to the proceeding has brought to
the forefront, an issue as to what should be the characteristics of the
labour license so mandated to be furnished along with the bid of the parties
for the purpose of evaluation of its bid.
41. The Notice Inviting Tender(NIT) in the provisions of sub-Section(1) of
Section IV, has mandated that the assessment of the bidders’ technical
capacity to mobilize the key equipment and personnel for the contract,
shall be so evaluated based on the qualification criteria so listed in Clause
2. Clause 2(A)(d)(iii) having stipulated the requirement of submission of a
labour license; the said labour license being for the purpose of assessing
Page No.# 25/39
the technical capacity of the bidder for mobilizing the key equipment and
personnel, in other words, for execution of the work, in question, and the
work being specified to be so executed at Joyasagar in the District of
Sivasagar; the said labour license must be one which would establish that
the bidder is capable of engaging the contract labour at Sivasagar and/or
for obtaining such license, in the event, the work is so allotted to him.
42. The said revelation as made from the provisions of the Notice Inviting
Tender(NIT), dated 23.02.2024, with regard to the nature of the labour
license required to be furnished by the intending bidder, was also the
interpretation advanced by the employer both before the writ Court as well
as in the present proceedings.
43. The employer having interpreted the said labour license to be one
which was issued by the license issuing authority of the District of
Sivasagar and/or a labour license issued by the competent authority
covering the State of Assam; the said understanding of the employer with
regard to the nature of the labour license, has to be given its due
importance.
44. The above conclusions having been drawn; this Court would now
examine the decisions of the Hon’ble Supreme Court holding the field with
regard to the power of the writ Court to interfere with the prescriptions in a
tender conditions as well as the importance so required to be given with
regard to the interpretation of such tender conditions by the employer.
45. With regard to the power of judicial review of the administrative
Page No.# 26/39
action; the Hon’ble Supreme Court in the case of Jagdish Mandal v. State of
Orissa, reported in (2007) 14 SCC 517, had drawn the following conclusions:
“”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
aberration or error in assessment or prejudice to a tenderer, is made out. The power of
judicial review will not be permitted to be invoked to protect private interest at the
cost of public interest, or to decide contractual disputes. The tenderer or contractor
with a grievance can always seek damages in a civil court. Attempts by unsuccessful
tenderers with imaginary grievances, wounded pride and business rivalry, to make
mountains out of molehills of some technical/procedural violation or some prejudice to
self, and persuade courts to interfere by exercising power of judicial review, should be
resisted. Such interferences, either interim or final, may hold up public works for
years, or delay relief and succour to thousands and millions and may increase the
project cost manifold. and succour to thousands and millions and may increase the
project cost manifold. Therefore, a court before interfering in tender or contractual
matters in exercise of power of judicial review, should pose to itself the following
questions:
(i) Whether the process adopted or decision made by the authority is mala fide
or intended to favour someone;
OR
Whether the process adopted or decision made is so arbitrary and irrational
that the court can say: “the decision is such that no responsible authority
acting reasonably and in accordance with relevant law could have reached”;
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article
226. Cases involving blacklisting or imposition tenderer/contractor or
distribution of State largesse of penal consequences on a tenderer/contractor or
distribution of State largesse(allotment of sites/shops, grant of licences,
dealerships and frances) stand on a different footing as they may require a
higher degree of fairness in action. ”
46. The Hon’ble Supreme Court in the case of Afcons Infrastructure Ltd.
v. Nagpur Metro Rail Corporation Ltd. & anr., reported in (2016) 16 SCC
818, had drawn the following conclusions:
Page No.# 27/39
“11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) it was
held by this Court, relying on a host of decisions that the decision-making process of
the employer or owner of the project in accepting or rejecting the bid of a tenderer
should not be interfered with. Interference is permissible only if the decision-making
process is mala fide or is intended to favour someone. Similarly, the decision should
not be interfered with unless the decision is so arbitrary or irrational that the Court
could say that the decision is one which no responsible authority acting reasonably
and in accordance with law could have reached. In other words, the decision-making
process or the decision should be perverse and not merely faulty or incorrect or
erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or
before us.
12. In Dwarkadas Marfatia and Sons v. Port of Bombay it was held that the
constitutional courts are concerned with the decision-making process. Tata Cellular v.
Union of India went a step further and held that a decision if challenged (the decision
having been arrived at through a valid process), the constitutional courts can
interfere if the decision is perverse. However, the constitutional courts are expected to
exercise restraint in interfering with the administrative decision and ought not to
substitute its view for that of the administrative authority. This was confirmed in
Jagdish Mandal v. State of Orissa as mentioned in Central Coalfields.
13. In other words, a mere disagreement with the decision-making process or the
decision of the administrative authority is no reason for a constitutional court to
interfere. The threshold of mala fides, intention to favour someone or arbitrariness,
irrationality or perversity must be met before the constitutional court interferes with
the decision-making process or the decision.
14. We must reiterate the words of caution that this Court has stated right from the
time when Ramana Dayaram Shetty v. International Airport Authority of India was
decided almost 40 years ago, namely, that the words used in the tender documents
cannot be ignored or treated as redundant or superfluous they must be given meaning
and their necessary significance. In this context, the use of the word “metro” in Clause
4.2 (a) of Section III of the bid documents and its connotation in ordinary parlance
cannot be overlooked.
15. We may add that the owner or the employer of a project, having authored the
tender documents, is the best person to understand and appreciate its requirements
and interpret its documents. The constitutional courts must defer to this
understanding and appreciation of the tender documents, unless there is mala fide or
perversity in the understanding or appreciation or in the application of the terms of
the tender conditions. It is possible that the owner or employer of a project may give
an interpretation to the tender documents that is not acceptable to the constitutional
courts but that by itself is not a reason for interfering with the interpretation given.”
47. In the case of Galaxy Transport Agencies v. New J. K. Roadways,
Fleet Owners & Transport Contractors, reported in (2021) 16 SCC 808, a
3-Judge Bench of the Hon’ble Supreme Court had held that the authority
Page No.# 28/39
that authors the tender document is the best person to understand and
appreciate its requirements and thus, its interpretation should not be
second guessed by a Court in judicial review proceeding. [Also refer Utkal
Supplier(supra)].
48. The Hon’ble Supreme Court in the case of M/s Agmatel India Pvt.
Ltd. v. Resoursys Telecom & ors., reported in (2022) 5 SCC 362, after
noticing its earlier decisions in the case of Galaxy Transport Agencies
(supra); Bharat Cooking Coal Ltd. & ors. v. AMR Dev Prabha & ors.
reported in (2020) 16 SCC 759; Silppi Constructions Contractors(supra);
had drawn the following conclusions:
“24. The scope of judicial review in contractual matters, and particularly in relation
to the process of interpretation of tender document, has been the subject-matter of
discussion in various decisions of this Court. We need not multiply the authorities on
the subject, as suffice it would be refer to the three-Judge Bench decision of this Court
in Galaxy Transport Agencies wherein, among others, the said decision in Afcons
Infrastructure has also been considered; and this Court has disapproved the
interference by the High Court in the interpretation by the tender inviting authority of
the eligibility term relating to the category of vehicles required to be held by the
bidders, in the tender floated for supply of vehicles for the carriage of troops and
equipment.
25. This Court referred to various decisions on the subject and stated the legal
principles as follows: (Galaxy Transport Agencies case, SCC paras 14-20)
“14. In a series of judgments, this Court has held that the authority that
authors the tender document is the best person to understand and appreciate
its requirements, and thus, its interpretation should not be second-guessed by a
court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corpn. Ltd., this Court held: (SCC p. 825, para 15)
“15. We may add that the owner or the employer of a project, having
authored the tender documents, is the best person to understand and
appreciate its requirements and interpret its documents. The
constitutional courts must defer to this understanding and appreciation
of the tender documents, unless there is mala fide or perversity in the
understanding or appreciation or in the application of the terms of the
tender conditions. It is possible that the owner or employer of a project
may give an interpretation to the tender documents that is not
acceptable to the constitutional courts but that by itself is not a reason
for interfering with the interpretation given.’
Page No.# 29/39
15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha, under the
heading “Deference to authority’s interpretation”, this Court stated: (SCC p.
776, paras 50-52)
50. Lastly, we deem it necessary to deal with another fundamental
problem. It is obvious that Respondent 1 seeks to only enforce terms of
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.
51. In the present facts, it is clear that BCCL and C1-India have laid
recourse to clauses of NIT, whether it be to justify condonation of delay
of Respondent 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.
52. The High Court ought to have deferred to this understanding, unless
it was patently perverse or mala fide. Given how BCCL’s interpretation of
these clauses was plausible and not absurd, solely differences in opinion
of contractual interpretation ought, not to have been grounds for the
High Court to come to a finding that the appellant committed illegality.’
16. Further, in the recent judgment in Silppi Constructions Contractors v.
Union of India, this Court held as follows: (SCC pp. 501-02, para 20)
20. The essence of the law laid down in the judgments referred to above
is the exercise of restraint and caution; the need for overwhelming
public interest to justify judicial intervention in matters of contract
involving the state instrumentalities; the courts should give way to the
opinion of the experts unless the decision is totally arbitrary or
unreasonable; the court does not sit like a court of appeal over the
appropriate authority; the court must realise that the authority floating
the tender is the best judge of its requirements and, therefore, the court’s
interference should be minimal. The authority which floats the contract
or tender, and has authored the tender documents is the best judge as to
how the documents have to be interpreted. If two interpretations are
possible then the interpretation of the author must be accepted. The
courts will only interfere to prevent Arbitrariness, irrationality, bias,
mala fides or perversity. With this approach in mind we shall deal with
the present case.
17. In accordance with these judgments and noting that the terpretation of the
tendering authority in this case cannot be said to be a erverse one, the Division
Bench ought not to have interfered with it by iving its own interpretation and
not giving proper credence to the word both” appearing in Condition No. 31 of
the NIT For this reason, the Division Bench’s conclusion that JK Roadways was
wrongly declared to be neligible, is set aside.
Page No.# 30/39
18. Insofar as Condition No. 27 of the NIT prescribing work experience of at
least 5 years of not less than the value of Rs 2 crores is concerned, suffice it to
say that the expert body, being the Tender Opening Committee, consisting of
four members, clearly found that this eligibility condition had been satisfied by
the appellant before us. Without therefore 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, this Court noted: (SCC pp. 531-32, para 22)
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 aberration or error in
assessment or prejudice to a tenderer, is made out. The power of judicial
review will not be permitted to be invoked to protect private interest at
the cost of public interest, or to decide contractual disputes. The
tenderer or contractor with a grievance can always seek damages in a
civil court. Attempts by unsuccessful tenderers with imaginary
grievances, wounded pride and business rivalry, to make mountains out
of molehills of some technical/procedural violation or some prejudice to
self, and persuade courts to interfere by exercising power of judicial
review, should be resisted. Such interferences, either interim or final,
may hold up public works for years, or delay relief and succour to
thousands and millions and may increase the project cost manifold.
Therefore, a court before interfering in tender or contractual matters in
exercise of power of judicial review, should pose to itself the following
questions:
(i) Whether the process adopted or decision made by the authority is
mala fide or intended to favour someone;
OR
Whether the process adopted or decision made is so arbitrary and
irrational that the court can say: “the decision is such that no
responsible authority acting reasonably and in accordance with relevant
law could have reached”;
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under
Article 226. Cases involving blacklisting or imposition of penal
consequences on a tenderer/contractor or distribution of State largesse
(allotment of sites/shops, grant of licences, dealerships and franchises)
stand on a different footing as they may require a higher degree of
fairness in action.’
Page No.# 31/39
19. Similarly, in Montecarlo Ltd. v. NTPC Ltd. 13, this Court stated as follows:
(SCC p. 288, para 26)
26. We respectfully concur with the aforesaid statement of law. We have
reasons to do so. In the present scenario, tenders are floated and offers
are invited for highly complex technical subjects. It requires
understanding and appreciation of the nature of work and the purpose
it is going to serve. It is common knowledge in the competitive
commercial field that technical bids pursuant to the notice inviting
tenders are scrutinised by the technical experts and sometimes third-
party assistance from 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 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. Technical evaluation or comparison by the Court
would be impermissible. The principle that is applied to scan and
understand an ordinary instrument relatable to contract in other
spheres has to be treated differently than interpreting and appreciating
tender documents relating to technical works and projects requiring
special skills. The owner should be allowed to carry out the purpose and
there has to be allowance of free play in the joints.’
20. This being the case, we are unable to fathom how the Division Bench, on its
own appraisal, arrived at the conclusion that the appellant held work
experience of only 1 year, substituting the appraisal of the expert four-member
Tender Opening Committee with its own.”
(italicised matter emphasised in the original; emphasis in bold italics
supplied)
26. The abovementioned statements of law make it amply clear that the author of the
tender document is taken to be the best person to understand and appreciate its
requirements; and if its interpretation is manifestly in consonance with the language
of the tender document or subserving the purchase of the tender, the Court would
prefer to keep restraint. Further to that, the technical evaluation or comparison by
the Court is impermissible; and even if the interpretation given to the tender
document by the person inviting offers is not as such acceptable to the constitutional
court, that, by itself, would not be a reason for interfering with the interpretation
given.'”
Page No.# 32/39
49. The Hon’ble Supreme Court in the case of N.G. Projects(supra), after
noticing its earlier decisions; had drawn the following conclusions:
“17. Therefore, the position of law with regard to the interpretation of terms of the
contract is that the question as to whether a term of the contract is essential or not is
to be viewed from the perspective of the employer and by the employer. Applying the
aforesaid position of law to the present case, it has been the contention of Respondent
1 that the format for bank guarantee was not followed strictly by the State and that
the relaxation given was not uniform, in that Respondent 1 was singled out. The said
contention has found favour with the courts below.
****************************************************************************************************
22. The satisfaction whether a bidder satisfies the tender condition is primarily upon
the authority inviting the bids. Such authority is aware of expectations from the
tenderers while evaluating the consequences of non-performance. In the tender in
question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive
i.e. not satisfying the tender conditions. The writ petitioner was one of them. It is not
the case of the writ petitioner that action of the Technical Evaluation Committee was
actuated by extraneous considerations or was mala fide. Therefore, on the same set of
facts, different conclusions can be arrived at in a bona fide manner by the Technical
Evaluation Committee. Since the view of the Technical Evaluation Committee was not
to the liking of the writ petitioner, such decision does not warrant for interference in
a grant of contract to a successful bidder.”
50. The ratio of the decisions of the Hon’ble Supreme Court as noticed in
the above-noted cases, is to the effect that the owner or the employer of a
project having authored the tender document is the best person to
understand and appreciate its requirement and interpret its documents. A
constitutional Court is to defer to this understanding and appreciation of
the tender documents unless there is malafide or perversity in the
understanding or appreciation or in the application of the terms of the
tender conditions. Even if the interpretation of a tender document as
projected by the employer, is not acceptable to a constitutional Court, that,
by itself; would not be a reason for interfering with the interpretation so
projected by the employer. It also further stipulates that if two
interpretations are possible then the interpretation of the employer, must
be accepted. The said decisions lay down that the interference of a Court
would be only to prevent arbitrariness, irrationality, bias, mala fide, or,
Page No.# 33/39
perversity.
51. Applying the ratio of the decisions of the Hon’ble Supreme Court to
the facts of the present case; it is seen that the employer having projected
that the labour license so mandated under the provisions of Clause 2(a)(d)
(iii) of Section IV of the Notice Inviting Tender(NIT), dated 23.02.2024, to
be a labour license, covering the District of Sivasagar, either, issued by the
regional licensing authority of Sivasagar, and/or, by a competent authority
for the whole of the State of Assam; such a projection not having been
demonstrated by the respondent No. 1/writ petitioner, to be actuated by
mala fide, bias and/or, further to be perverse; it would not be permissible
for a writ Court to interfere with the such projection so made with regard to
the nature of the labour license so mandated to be furnished along with the
bid in pursuance of the Notice Inviting Tender(NIT), dated 23.02.2024.
52. It is reiterated that the parties to the proceeding have not disputed
that the labour license under the terms of the contract, was an essential
qualification criteria for evaluation of the bids in terms of the bid evaluation
criteria so set-out under the provisions of Clause 35(2) read with the
provisions of Clause 1 and 2 of Section IV of the Notice Inviting Tender
(NIT), dated 23.02.2024.
53. The above being the position; the respondent No. 1/writ petitioner,
admittedly, not having ever procured a labour license covering the District
of Sivasagar, and/or, covering the whole of the State of Assam and the
license so procured by him, being only, in relation to Kamrup(Metro)
District; the respondent No. 1/writ petitioner could not have been held to
Page No.# 34/39
have fulfilled the qualification criteria as set-out in the provisions of the
Notice Inviting Tender(NIT), dated 23.02.2024, more particularly, under the
provisions of Section IV of the Notice Inviting Tender(NIT), dated
23.02.2024.
54. The decision of the Bid Evaluation Committee, in proceeding to hold
the bid of the respondent No. 1/writ petitioner, to be non-responsive in
view of the discussions made hereinabove; as well as on application of the
ratio of the decisions of the Hon’ble Supreme Court; cannot be held to be
an erroneous one.
55. Having drawn the above conclusions; the judgment & order, dated
23.09.2024, passed by the learned Single Judge in WP(c)3526/2024, is
now being examined.
56. The learned Single Judge after noticing the various provisions of the
Notice Inviting Tender(NIT), dated 23.02.2024, in paragraph No. 22, had
concluded that the requirement of a labour license was an essential
qualification under Clause 2.A(d)(iii) of Section IV. The learned Single Judge
further recorded a finding to the effect that the said contract labour license
was also a part of the bid evaluation process.
57. The learned Single Judge, thereafter, noticed the interpretation of the
employer with regard to the characteristics of the labour license so
mandated to be furnished by the intending bidder, to be one issued by the
regional licensing authority under whose jurisdiction the contract is to be
executed, and/or, to be issued by a licensing authority who has the
Page No.# 35/39
jurisdiction to issue license for the whole of the State of Assam. However,
the learned Single Judge without appreciating further the tender conditions
set-out in the Notice Inviting Tender(NIT), dated 23.02.2024; proceeded to
draw a conclusion to the effect that the said interpretation of the labour
license as projected by the employer, being not disclosed in the tender
conditions, deemed the said interpretation to be a hidden evaluation
criteria. The said conclusion of the learned Single Judge, in our considered
view; is clearly erroneous in view of the conclusions reached by us,
hereinabove, with regard to the purport of Clause 1 and 2 of Section IV of
the Notice Inviting Tender(NIT), dated 23.02.2024.
58. Further, the employer having mandated the labour license as a
qualification criteria and further having interpreted the labour license to be
one having application in the District of Sivasagar, such interpretation not
being demonstrated to be arbitrary, and/or, unreasonable and further, to be
not perverse to the tender conditions of the Notice Inviting Tender(NIT),
dated 23.02.2024, following the decisions of the Hon’ble Supreme Court,
noticed hereinabove; it was not open to the learned Single Judge to second
guess upon the interpretation so made by the employer. The interpretation
made by the employer not suffering from any arbitrariness admittedly not
being perverse to the tender conditions and such interpretation being
equally applied in case of all the bidders; such an interpretation was,
therefore, required to be upheld by the learned Single Judge.
59. It is a settled position of law that the clauses in a tender, cannot be
held to be superfluous or redundant. A perusal of the decision of the
learned Single Judge having accepted the labour license to be a
Page No.# 36/39
qualification criteria for evaluation of the bids, ought not to have proceeded
to draw conclusions that such license in terms of the provisions of the
Contract Labour Regulation and Abolition Act, 1970, and the Contract
Labour(Regulation and Abolition) Assam Rules, 1971; would be called upon
to be so procured by the bidder after the settlement of the contract with it.
The stage admittedly had not arisen in the matter, on hand. Such
conclusions drawn by the learned Single Judge has the effect of rendering
the express conditions set-out in the Notice Inviting Tender(NIT), dated
23.02.2024, to being rendered redundant, which was clearly uncalled for.
60. The learned Single Judge further proceeded to conclude that the
employer had rejected the bid of the respondent No. 1/writ petitioner by
holding that he did not had a valid labour license. A perusal of the minutes
of the Bid Evaluation Committee, available on record, would go to reveal
that the bid of the respondent No. 1/writ petitioner was held to be non-
responsive on the ground that the labour license produced by him, was
valid for Kamrup (Metro) District only. The Bid Evaluation Committee and
for that matter; the employer had never projected that the labour license
furnished by the respondent No. 1/writ petitioner, to be an invalid one. The
employer having interpreted the requirement of the labour license to be
one, issued covering the District of Sivasagar, and such interpretation not
being arbitrary, and/or unreasonable; no other interpretation, thereto, was
permissible to be so made by the writ Court. Accordingly, we are of the
considered view that the conclusion of the learned Single Judge that the
declaration of the labour license of the respondent No. 1/writ petitioner as
an invalid license, is in violation of the principles of Article 14 of the
Constitution of India; is clearly erroneous and would call for an
interference.
Page No.# 37/39
61. In view of the above conclusions, we are of the considered view that
the conclusions drawn by the learned Single Judge in the impugned
judgment & order, dated 23.09.2024, in WP(c)3526/2024, in addition to
being not supported by the stand of the employer with regard to the tender
conditions; the same is also contrary to the tender conditions as set-out in
the Notice Inviting Tender(NIT), dated 23.02.2024. Further, the conclusions
drawn by the learned Single Judge in the said judgment & order, dated
23.09.2024, is in the teeth of the decisions of the Hon’ble Supreme Court
in the cases, noticed hereinabove.
62. Accordingly, the conclusions so drawn by the learned Single Judge
vide judgment & order, dated 23.09.2024, in WP(c)3526/2024, would
mandate an interference.
63. At this stage, the contention of Mr. Singha, learned counsel for the
respondent No. 1/writ petitioner, with regard to the opportunity provided to
the appellants, herein, as well as other bidders to produce the documents
not furnished by them along with their bids; is being examined.
64. Clause 30 of Section II of the Instructions to Bidders (ITB), empowers
the Bid Evaluation Committee to request the bidders to submit necessary
information or documents which are historical in nature.
65. The above provision was invoked in order to facilitate the appellants,
herein, as well as other respondents to place on record the documents
which existed on the last date of submission of their bids in pursuance of
the Notice Inviting Tender(NIT), dated 23.02.2024.
Page No.# 38/39
66. In respect of the respondent No. 1/writ petitioner, herein, there being
no historical document available of it having procured a labour license
covering the State of Assam, or, relatable to the District of Sivasagar; the
respondent No. 1/writ petitioner was not extended with a similar
opportunity by the Bid Evaluation Committee.
67. The said aspect of the matter was considered by the learned Single
Judge and in paragraph No. 37 of the judgment & order, dated 23.09.2024,
in WP(c)3526/2024; and it was concluded that the respondent No. 1/writ
petitioner, admittedly, did not have any historical document as regards the
contract license issued by the licensing authority which is relatable, either,
to the whole of the State of Assam, or, to the place where the contract is
being executed. The said conclusion of the learned Single Judge has not
been assailed by the respondent No. 1/writ petitioner by instituting an
appeal in the matter. Accordingly, the said conclusion has to be held to
have attained its finality and accordingly, no consideration of the same
issue would be called for, in the present order.
68. In view of the above discussions, on perusal of the decisions relied
upon by Mr. Singha, learned counsel for the respondent No. 1/writ
petitioner; we are of the considered view that the same would not advance
the case of the respondent No. 1/writ petitioner, herein.
69. In view of the above conclusions, we are of the considered view that
the impugned judgment & order, dated 23.09.2024, passed by the learned
Single Judge in WP(c)3526/2024, cannot be sustained. Hence, the same is
hereby set aside.
Page No.# 39/39
70. The writ appeals are accordingly allowed. Resultantly, the writ petition
being WP(c)3526/2024, instituted by the respondent No. 1/writ petitioner,
before the writ Court; stands dismissed. However, there shall be no order
as to costs.
JUDGE CHIEF JUSTICE Comparing Assistant
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