W.P.(C)/2560/2021 of TAIKISHA ENGINEERING INDIA PVT. LTD. Vs UNION OF INDIA AND ORS.

IN THE HIGH COURT OF DELHI AT NEW DELHI

%Decided on: 13[th]September, 2021

+W.P.(C) 2560/2021 and C.M. Nos. 7554/2021 & 31037/2021.TAIKISHA ENGINEERING INDIA PVT. LTD.TAIKISHA ENGINEERING INDIA PVT. LTD.

..... Petitioner

Through:Mr. Rahul Sagar Sahay and Mr.Raghav Rajmoloni, AdvocatesversusRaghav Rajmoloni, Advocatesversus

UNION OF INDIA AND ORS...... Respondents

Through:Dr. Sarbjit Sharma, Adv. with Mr.Kanishka Singh, Ms. Deepika Pal, Advs. for R-1& R-2.Mr. Maninder Singh, Sr. Adv. with Mr. ZohebHossain, Mr. Prabhas Bajaj and Mr. VivekGurnani, Advs. for R-3.Kanishka Singh, Ms. Deepika Pal, Advs. for R-1& R-2.Mr. Maninder Singh, Sr. Adv. with Mr. ZohebHossain, Mr. Prabhas Bajaj and Mr. VivekGurnani, Advs. for R-3.

CORAM:HON'BLE MR. JUSTICE VIPIN SANGHIHON'BLE MR. JUSTICE JASMEET SINGH

J U M N T

:JASMEET SINGH, J (ORAL)

1.On 13.09.2021, we had dismissed the writ petition. The reasons for thedismissal of the same were to follow which we are giving.dismissal of the same were to follow which we are giving.

2.In the present case, the Petitioner has filed the petition seeking,amongst others, the following substantial reliefs:-amongst others, the following substantial reliefs:-

“i)Issue writ, order or direction in the nature of certiorari and/or any other writ, order or direction quashing the LOA dated05.02.2021 issued in favour of the Respondent No. 3 and/ orany other action/ decision of the Respondent No. 2 forawarding and/ or in consequence or in furtherance ofawardingtheTenderCOFMOW/I&T/2020/WT-01dated13.02.2020 in favour of Respondent No. 3. The LOA datedor any other writ, order or direction quashing the LOA dated05.02.2021 issued in favour of the Respondent No. 3 and/ orany other action/ decision of the Respondent No. 2 forawarding and/ or in consequence or in furtherance ofawardingtheTenderCOFMOW/I&T/2020/WT-01dated13.02.2020 in favour of Respondent No. 3. The LOA dated

05.02.2021 never received to the Petitioner;

ii)Issue writ, order or direction in the nature of mandamusand/ or any other writ, order or direction issuing the LOA ofthe Tender COFMOW/I&T/2020/WT-01 dated 13.02.2020 tothe Petitioner who is the lowest bidder in terms of the Tenderand issue the supply order in favour of the Petitioner;”and/ or any other writ, order or direction issuing the LOA ofthe Tender COFMOW/I&T/2020/WT-01 dated 13.02.2020 tothe Petitioner who is the lowest bidder in terms of the Tenderand issue the supply order in favour of the Petitioner;”

3.The brief facts of the case are as under:-

a.ThePetitionerisasubsidiary company oftheJapaneseconglomerate Taikisha Ltd., which is pioneer in greentechnology and executed various turnkey projects across theglobe.conglomerate Taikisha Ltd., which is pioneer in greentechnology and executed various turnkey projects across theglobe.

b.TheRespondentNo.2istheCentralOrganizationforModernization of Workshops, also known as ‘COFMOW’. TheRespondent No.2 comes within the purview of the Ministry ofRailways.RespondentNo.2floatedane-tenderNo.COFMOW/I&T/2020/WT-01dated13.02.2020forcapacityaugmentation of manufacturing, from 1000 to 2000 coaches perannum, at Modern Coach Factory, Raebareli.Modernization of Workshops, also known as ‘COFMOW’. TheRespondent No.2 comes within the purview of the Ministry ofRailways.RespondentNo.2floatedane-tenderNo.COFMOW/I&T/2020/WT-01dated13.02.2020forcapacityaugmentation of manufacturing, from 1000 to 2000 coaches perannum, at Modern Coach Factory, Raebareli.

c.The Respondent No.3 is HYT Engineering Co. Pvt. Ltd. It is anorganization, also engaged in providing turnkey solutions fromdesigning to manufacturing and after sales services.organization, also engaged in providing turnkey solutions fromdesigning to manufacturing and after sales services.

d.The Petitioner along with other firms, including RespondentNo.3, participated in the Tender and submitted their technical andfinancial bids. The technical bids were opened on 17.07.2020.Two successful bidders emerged from the process, the Petitionerand Respondent No.3.No.3, participated in the Tender and submitted their technical andfinancial bids. The technical bids were opened on 17.07.2020.Two successful bidders emerged from the process, the Petitionerand Respondent No.3.

4.The financial bids were opened on 23.11.2020 and the net offer valueof the Petitioner was Rs. 1,08,52,94,649.79, and that of theRespondent was Rs. 1,17,30,00,003.00. Accordingly, the Petitionerwas the L-1 bidder, and Respondent No.3 was the L-2 bidder. Thedifference in the values offered by the Petitioner, and Respondent No.3was 8.06%.of the Petitioner was Rs. 1,08,52,94,649.79, and that of theRespondent was Rs. 1,17,30,00,003.00. Accordingly, the Petitionerwas the L-1 bidder, and Respondent No.3 was the L-2 bidder. Thedifference in the values offered by the Petitioner, and Respondent No.3was 8.06%.

5.ThePetitionerclaimsthattheRespondentNo.3approachedRespondent No.2 on 24.11.2020 (very next day of opening of financialbids), stating that the local content percentage in the product offeredby the Petitioner was less than 50%, and that of Respondent No.3 morethan 50%.Consequently, the contract should be awarded toRespondent No.3 under the Make in India Policy No. P-45021/2/2017-B.E.-II dated 15.06.2017 (hereinafter “Make in India Policy”).Respondent No.2 on 24.11.2020 (very next day of opening of financialbids), stating that the local content percentage in the product offeredby the Petitioner was less than 50%, and that of Respondent No.3 morethan 50%.Consequently, the contract should be awarded toRespondent No.3 under the Make in India Policy No. P-45021/2/2017-B.E.-II dated 15.06.2017 (hereinafter “Make in India Policy”).

6.On getting to know of the same, the Petitioner issued clarificationletter dated 27.11.2020 to Respondent No.2, stating that out of 10machines, only one machine was imported, which accounted for 43%of the total value. The Petitioner claims that as per the Make in IndiaPolicy, in contract value of more than INR 10 crores, the biddershave to submit certificate from the statutory auditor/ cost auditor ofthe company, substantiating the Make in India content. However,neither the Petitioner, nor Respondent No.3 had provided the samewhile submitting their bid for this tender.letter dated 27.11.2020 to Respondent No.2, stating that out of 10machines, only one machine was imported, which accounted for 43%of the total value. The Petitioner claims that as per the Make in IndiaPolicy, in contract value of more than INR 10 crores, the biddershave to submit certificate from the statutory auditor/ cost auditor ofthe company, substantiating the Make in India content. However,neither the Petitioner, nor Respondent No.3 had provided the samewhile submitting their bid for this tender.

7.Since no response was received from Respondent No.2, the Petitioneragain wrote letter dated 25.01.2021reiterating that it being L-1, itwas awaiting the LOA from Respondent no. 2. The Petitioner furthersubmits that there was typographical error of percentage mentionedagain wrote letter dated 25.01.2021reiterating that it being L-1, itwas awaiting the LOA from Respondent no. 2. The Petitioner furthersubmits that there was typographical error of percentage mentioned

in the bid form submitted by the Petitioner. In fact, the Petitionerwanted to write foreign component as 43%, and local content as 57%.wanted to write foreign component as 43%, and local content as 57%.8.The Petitioner claims that it recently became aware that RespondentNo.3 has already been issued an LOA on 05.02.2021, which isarbitrary; without any reasons, and; contrary to the tender conditionsas well as the Make in India Policy.No.3 has already been issued an LOA on 05.02.2021, which isarbitrary; without any reasons, and; contrary to the tender conditionsas well as the Make in India Policy.

9.When the matter came up for hearing before this court on 24.02.2021,while issuing notice, this court directed status quo to be maintained inrelation to the execution/ performance of the contract. The said interimorder was continued till the date of dismissal.while issuing notice, this court directed status quo to be maintained inrelation to the execution/ performance of the contract. The said interimorder was continued till the date of dismissal.

10. We heard Mr. Rahul Sahay, learned counsel for the Petitioner, Dr.Sarbjit Sharma, learned counsel for Respondent Nos. 1 and 2, and Mr.Maninder Singh, Sr. counsel for Respondent No.3. Learned counselappearing for the Petitioner has argued primarily that the Petitionerhad made typographical error while submitting its bids, and it waspurely on account of misunderstanding that the Petitioner hadclaimed local content of 43% which, in fact, was 57%.Sarbjit Sharma, learned counsel for Respondent Nos. 1 and 2, and Mr.Maninder Singh, Sr. counsel for Respondent No.3. Learned counselappearing for the Petitioner has argued primarily that the Petitionerhad made typographical error while submitting its bids, and it waspurely on account of misunderstanding that the Petitioner hadclaimed local content of 43% which, in fact, was 57%.

11. The Petitioner, on 27.11.2020, gave clarification that they are 25-year old Indian company, and have offered 57% local content as perClause 5 of the Make in India Policy, Government of India.year old Indian company, and have offered 57% local content as perClause 5 of the Make in India Policy, Government of India.

12. Learned counsel has also taken us through the Make in India Policy toshow its intent, meaning and area of operation. It has further beensubmitted that as per Clause9 (b) of the Make in India Policy forTenders above Rs. 10 crores, the local supplier shall be required toprovide certificate from the statutory auditor or cost auditor of thecompany, stating the percentage of local content, which none of theshow its intent, meaning and area of operation. It has further beensubmitted that as per Clause9 (b) of the Make in India Policy forTenders above Rs. 10 crores, the local supplier shall be required toprovide certificate from the statutory auditor or cost auditor of thecompany, stating the percentage of local content, which none of the

bidders i.e. Petitioner or Respondent No.3 had submitted. Thus, theLOA was wrongly awarded in favour of Respondent No.3.

13. On the other hand, learned Senior Counsel for Respondent no. 3 hassubmitted that the Petitioner herein had declared its local content to beonly “43%”, as against the declaration made by Respondent No. 3,which was “60%”. Based on the said declarations, the Make in IndiaPolicy was applied leading to the Respondent no. 3 being declared thesuccessful bidder, who has been awarded the tender by way of Letterof Acceptance dated 05.02.2021. These undisputed facts are evidentfrom the declarations made by the Petitioner in the Techno-Commercial Tabulation, as against Clause 10 of the commercialcompliance of the Tender conditions, placed as Annexure P-2 to thewrit petition, which is extracted herein below:

14. Mr. Singh submitted that in the bid submission, the provision forfilling up of ‘minimum local content’ was requirement, butuploading the supporting document was optional. The RespondentNo.3 had filled the minimum local content as “60%”, but did notattach the supporting documents as it was optional. The certificatefrom the Chartered Accountant was duly supplied along with the letterdated 24.11.2020 by the Respondent no.3. When the techno-commercial bid was opened on 17.07.2020, the minimum local contentquoted by Respondent No.3 was 60%, and the minimum local contentquoted by the Petitioner was 43 %.The Respondent No.3, inaccordance with 20 % price margin, was offered the rates quoted bythe Petitioner, which Respondent No.3 has agreed to match.filling up of ‘minimum local content’ was requirement, butuploading the supporting document was optional. The RespondentNo.3 had filled the minimum local content as “60%”, but did notattach the supporting documents as it was optional. The certificatefrom the Chartered Accountant was duly supplied along with the letterdated 24.11.2020 by the Respondent no.3. When the techno-commercial bid was opened on 17.07.2020, the minimum local contentquoted by Respondent No.3 was 60%, and the minimum local contentquoted by the Petitioner was 43 %.The Respondent No.3, inaccordance with 20 % price margin, was offered the rates quoted bythe Petitioner, which Respondent No.3 has agreed to match.

15. Learned counsel for Respondent Nos. 1 and 2 has submitted that theattachment of the certificate from the Charted Accountant/CostAccountant with the bid was 'optional' at the time of bid submission.Since the Petitioner quoted value of “43%”, and Respondent 3 (L2)quoted value of “60%”, Respondent No. 3 was found to be meetingthe criteria as local supplier under the Make in India Policy of theGovernment of India. Subsequently, Respondent No. 3 has submittednecessary certificate in this effect, and hence were invited to match therate offered by the Petitioner who was the L1 bidder. Furthermore,learned counsel submitted that the offer of Petitioner does not qualifyas local supplier, since they have quoted “43%” domestic content,which is less than “50%”– which is the minimum percentage of localcontent necessary to claim benefit of the Make in India Policy.attachment of the certificate from the Charted Accountant/CostAccountant with the bid was 'optional' at the time of bid submission.Since the Petitioner quoted value of “43%”, and Respondent 3 (L2)quoted value of “60%”, Respondent No. 3 was found to be meetingthe criteria as local supplier under the Make in India Policy of theGovernment of India. Subsequently, Respondent No. 3 has submittednecessary certificate in this effect, and hence were invited to match therate offered by the Petitioner who was the L1 bidder. Furthermore,learned counsel submitted that the offer of Petitioner does not qualifyas local supplier, since they have quoted “43%” domestic content,which is less than “50%”– which is the minimum percentage of localcontent necessary to claim benefit of the Make in India Policy.16. Learned counsel has argued that under the Make in India Policy, incase L1 is not local supplier, next bidder who qualifies as localsupplier and whose offer is within price margin indicated, is invited tomatch the price of the L1 bidder. Vide letter dated 24.11.20,Respondent No. 3 requested for giving them benefit under the Make inIndia policy and submitted the self-declaration on percentage of localcontent and certificate from CA, which are both dated 20.06.2020,before the tender closing date. However, Petitioner has not submitted,the requisite certificate, even though they have sent various letters/representations dated 27.11.20, 25.01.21 and 01.02.21.case L1 is not local supplier, next bidder who qualifies as localsupplier and whose offer is within price margin indicated, is invited tomatch the price of the L1 bidder. Vide letter dated 24.11.20,Respondent No. 3 requested for giving them benefit under the Make inIndia policy and submitted the self-declaration on percentage of localcontent and certificate from CA, which are both dated 20.06.2020,before the tender closing date. However, Petitioner has not submitted,the requisite certificate, even though they have sent various letters/representations dated 27.11.20, 25.01.21 and 01.02.21.

ANALYSIS AND FINDINGS:-

17. In order to appreciate the controversy, it is important to notice Clause10 of the Commercial Compliance of the tender document as well asClauses 6, 7, 9 (a) and 9 (b) of the Make in India Policy. Clause 10 ofthe Commercial Compliance in the Tender is reproduced as follows:10 of the Commercial Compliance of the tender document as well asClauses 6, 7, 9 (a) and 9 (b) of the Make in India Policy. Clause 10 ofthe Commercial Compliance in the Tender is reproduced as follows:

“10. "Please enter the percentage of local content in the materialbeing offered. Please enter 0 for fully imported items, and 100for fully indigenous items. The definition and calculation of localcontent shall be in accordance with the make in India policy asincorporated in the tender conditions."being offered. Please enter 0 for fully imported items, and 100for fully indigenous items. The definition and calculation of localcontent shall be in accordance with the make in India policy asincorporated in the tender conditions."

18. Clauses 6, 7, 9 (a) and 9 (b) of the Make in India Policy arereproduced as follows:reproduced as follows:

“6. Margin of Purchase Preference: The margin of purchasepreference shall be 20%.preference shall be 20%.

7. Requirement for specification in advance: The minimum localcontent, the margin of purchase preference and the procedure forpreference to Make in India shall be specified in the notice 1nvitingtenders or other form of procurement solicitation and shall not becontent, the margin of purchase preference and the procedure forpreference to Make in India shall be specified in the notice 1nvitingtenders or other form of procurement solicitation and shall not be

varied during particular procurement transaction

9. Verification of local content

a. The 'Class-I local supplier'/ 'Class-Il local supplier' at thetime of tender, bidding or solicitation shall be required toindicate percentage of local content and provide self-certification that the item offered meets the local contentrequirement for 'Class-I local supplier'/ ·Class-II localsupplier', as the case may be. They shall also give details ofthe location(s) at which the local value addition is made

b. In cases of procurement for value in excess of Rs 10crores. the 'Class-I local supplier'/ 'Class-II local supplier"shall be required to provide certificate from the statutoryauditor or cost auditor of the company (in the case ofcompanies) or from practicing cost accountant orpracticing chartered accountant (in respect of suppliersother than companies) giving the percentage of localcontent”(emphasis supplied)

19. We find force in Respondent No.3’s argument that the Petitioner bychanging the local content is seeking to modify the bid submitted by it,which cannot be so permitted in terms of Clause 7 of the Instruction toBidders (ITB). Quoting of “43%” local content is not typographicalerror. It was the conscious bid made by the Petitioner. Clause 7 of theITB is relevant, and is reproduced herein below:changing the local content is seeking to modify the bid submitted by it,which cannot be so permitted in terms of Clause 7 of the Instruction toBidders (ITB). Quoting of “43%” local content is not typographicalerror. It was the conscious bid made by the Petitioner. Clause 7 of theITB is relevant, and is reproduced herein below:

“7. Validity of the offer: Bidders shall keep his offers valid for aperiod as indicated in the tender notice from the date of closingof the tender. Within this period, the Bidder(s) cannot withdrawor modify his (their) offer. The Railway Administration mayrequest the Bidder(s) to extend the validity, if necessary. Theearnest money referred to in this chapter is for the performanceperiod as indicated in the tender notice from the date of closingof the tender. Within this period, the Bidder(s) cannot withdrawor modify his (their) offer. The Railway Administration mayrequest the Bidder(s) to extend the validity, if necessary. Theearnest money referred to in this chapter is for the performance

of the stipulation to keep the offer open for the aforesaid period.It shall be understood that the tender documents have beenissued to the Bidder(s) and the Bidder(s) is permitted to submitthe tender in consideration of the stipulation on his part thatafter submitting his tender he will not rescind from his offer ormodify the same in any manner not acceptable to the Railwaywithin the period of validity. Should the Bidder fail to observe orcomply with this stipulation; the full amount of Earnest Moneyshall be forfeited.”(emphasis supplied)

20. In our opinion, filling up of local content is an essential term of biddocument, and the bid made by bidder cannot be brushed asidelightly. An essential term of tender cannot be deviated from oraltered. The decision whether term of the tender is essential, or not,has to be taken by the employer, and the same should be respected. Weagree with the submissions of ld. counsel for Respondents no. 1 & 2that the Petitioner cannot be allowed to deviate from the mandatoryrequirements of Clause 10 of the Commercial Compliance, since thesame is an essential term of the tender document. Furthermore, in writproceedings, we cannot interfere with the decision of the tenderingauthority in deciding which clause of the tender should be construed asan essential term, and which term may be classified as non-essentialterm, unless that decision is shown to be contrary to the terms of thetender; is arbitrary, or; mala fide.document, and the bid made by bidder cannot be brushed asidelightly. An essential term of tender cannot be deviated from oraltered. The decision whether term of the tender is essential, or not,has to be taken by the employer, and the same should be respected. Weagree with the submissions of ld. counsel for Respondents no. 1 & 2that the Petitioner cannot be allowed to deviate from the mandatoryrequirements of Clause 10 of the Commercial Compliance, since thesame is an essential term of the tender document. Furthermore, in writproceedings, we cannot interfere with the decision of the tenderingauthority in deciding which clause of the tender should be construed asan essential term, and which term may be classified as non-essentialterm, unless that decision is shown to be contrary to the terms of thetender; is arbitrary, or; mala fide.

21. The Supreme Court in Central Coalfields Ltd. v. SLL-SML, (2016) 8

SCC 622, has observed as follows:

“46. It is true that in Poddar Steel and in Rashmi Metaliks, adistinction has been drawn by this Court between essential andancillary and subsidiary conditions in the bid documents. Adistinction has been drawn by this Court between essential andancillary and subsidiary conditions in the bid documents.

similar distinction was adverted to more recently in BakshiSecurity and Personnel Services (P) Ltd. v. Devkishan Computed(P) Ltd. through reference made to Poddar Steel. In that case,this Court held particular term of NIT as essential (confirmingthe view of the employer) and also referred to the “admonition”given in Jagdish Mandal followed in Michigan Rubber (India)Ltd. v. State of Karnataka. Thereafter, this Court rejected thechallenge to the employer's decision holding Bakshi Security andPersonnel Services ineligible to participate in the tender.

47. The result of this discussion is that the issue of theacceptance or rejection of bid or bidder should be looked atnot only from the point of view of the unsuccessful party but alsofrom the point of view of the employer. As held in RamanaDayaram Shetty [Ramana Dayaram Shetty v. InternationalAirport Authority of India, (1979) 3 SCC 489] the terms of NITcannot be ignored as being redundant or superfluous. They mustbe given meaning and the necessary significance. As pointedout in Tata Cellular [Tata Cellular v. Union of India, (1994) 6SCC 651] there must be judicial restraint in interfering withadministrative action. Ordinarily, the soundness of the decisiontaken by the employer ought not to be questioned but thedecision-making process can certainly be subject to judicialreview. The soundness of the decision may be questioned if it isirrational or mala fide or intended to favour someone or adecision “that no responsible authority acting reasonably and inaccordance with relevant law could have reached” as held inJagdish Mandal [Jagdish Mandal v. State of Orissa, (2007) 14SCC 517] followed in Michigan Rubber [Michigan Rubber(India) Ltd. v. State of Karnataka, (2012) 8 SCC 216]

48. Therefore, whether term of NIT is essential or not is adecision taken by the employer which should be respected.Even if the term is essential, the employer has the inherentauthority to deviate from it provided the deviation is madeapplicable to all bidders and potential bidders as held inRamanaDayaramShetty[RamanaDayaramShettyv.International Airport Authority of India, (1979) 3 SCC 489].

However, if the term is held by the employer to be ancillary orsubsidiary, even that decision should be respected. Thelawfulness of that decision can be questioned on very limitedgrounds, as mentioned in the various decisions discussedabove, but the soundness of the decision cannot be questioned,otherwise this Court would be taking over the function of thetender issuing authority, which it cannot.

49. Again, looked at from the point of view of the employer if thecourts take over the decision-making function of the employerand make distinction between essential and non-essential termscontrary to the intention of the employer and thereby rewrite thearrangement, it could lead to all sorts of problems including theone that we are grappling with. For example, the GTC that weare concerned with specifically states in Clause 15.2 that “Anybid not accompanied by an acceptable Bid Security/EMD shallbe rejected by the employer as non-responsive”. Surely, CCL exfacie intended this term to be mandatory, yet the High Court heldthat the bank guarantee in format not prescribed by it ought tobe accepted since that requirement was non-essential term ofthe GTC. From the point of view of CCL, the GTC has beenimpermissibly rewritten by the High Court.” (emphasis supplied)

22. The Supreme court in W.B. SEB v. Patel Engg. Co. Ltd., (2001) 2SCC 451, has held that negligent mistakes in tender documentscannot be permitted to be corrected, even on the basis of theprinciple of equity. If the rules governing the tender do not permitsuch corrections to be made after the bid submission, then the samedoes not come within the purview of judicial review. The relevantparagraphs of the judgment have been reproduced herein below:

“23.Themistakes/errorsinquestion,itisstated,areunintentional and occurred due to the fault of computer termedas “a repetitive systematic computer typographical transmissionfailure”. It is difficult to accept this contention. mistake may be

unilateral or mutual but it is always unintentional. If it isintentional it ceases to be mistake. Here the mistakes may beunintentional but it was not beyond the control of Respondents 1to 4 to correct the same before submission of the bid. Had theybeen vigilant in checking the bid documents before theirsubmission, the mistakes would have been avoided. Further,correction of such mistakes after one-and-a-half months ofopening of the bids will also be violative of clauses 24.1, 24.3and 29.1 of the ITB.

24. The controversy in this case has arisen at the threshold. Itcannot be disputed that this is an international competitivebidding which postulates keen competition and high efficiency.The bidders have or should have assistance of technical experts.The degree of care required in such bidding is greater than inordinary local bids for small works. It is essential to maintain thesanctity and integrity of process of tender/bid and also award ofa contract. The appellant, Respondents 1 to 4 and Respondents10 and 11 are all bound by the ITB which should be compliedwith scrupulously. In work of this nature and magnitude wherebidders who fulfil prequalification alone are invited to bid,adherence to the instructions cannot be given go-by bybranding it as pedantic approach, otherwise it will encourageandprovidescopefordiscrimination,arbitrarinessandfavouritism which are totally opposed to the rule of law and ourconstitutionalvalues.Theverypurposeofissuingrules/instructions is to ensure their enforcement lest the rule oflaw should be casualty. Relaxation or waiver of rule orcondition, unless so provided under the ITB, by the State or itsagencies (the appellant) in favour of one bidder would createjustifiable doubts in the minds of other bidders, would impair therule of transparency and fairness and provide room formanipulation to suit the whims of the State agencies in pickingand choosing bidder for awarding contracts as in the case ofdistributing bounty or charity. In our view such approach shouldalways be avoided. Where power to relax or waive rule or acondition exists under the rules, it has to be done strictly incompliance with the rules. We have, therefore, no hesitation in

concluding that adherence to the ITB or rules is the bestprinciple to be followed, which is also in the best public interest.

25. For all these reasons, in such highly competitive bid ofglobal tender, the appellant was justified in not permittingRespondents 1 to 4 to correct the errors of the nature and themagnitude which, if permitted, would have given differentcomplexion to the bid. The High Court erred in directing theappellant to permit Respondents 1 to 4 to correct the errors inthe bid documents.

33. We may, however, clarify that the appellant is not obliged toaward contract to any of the bidders at their quoted price bid. Itis always open to the appellant to negotiate with the next lowestbidder for awarding the contract on economically-viable pricebid.

34. For the reasons abovementioned, though the impugned orderof the High Court insofar as it relates to quashing of letter of theappellant dated 18-12-1999 falls within the purview of judicialreview, yet the direction to the appellant to permit correction oferrors by Respondents 1 to 4 in their bid documents and considertheir bid along with the other bid, goes far beyond the scope ofjudicial review, as elucidated by this Court in Tata Cellular[(1994) 6 SCC 651] . In the result, we uphold the impugnedorder of the Division Bench insofar as it relates to quashing ofcommunication and letter dated 18-12-1999 and set aside thatpart of the impugned order giving direction to the appellant topermit Respondents 1 to 4 to correct bid documents and toconsider their bid after correction along with other bids. Theappeal is thus allowed in part. On the facts and in thecircumstances of this case we leave the parties to bear their owncosts.”

23.Filling up of “local content” was an essential condition of the tender.On the percentage of local content declared by the bidder, theapplication of the Make in India policy could make difference on

whom the respondent would choose as the successful bidder. Fillingup of “43%” as local content in place of “57%” may be anunintentional error on part of the Petitioner, as claimed by it, but todirect Respondent No.1 and 2 to read “43%” as “57%” and then to re-evaluate the tender bid of the Petitioner under the Make in India Policyis beyond the scope of judicial scrutiny under Article 226 of theConstitution of India.

As regards non-supply of CA certificate as per Clause 9 (a) at the timeof submission of tender, it appears that under the tender conditions,there is no requirement of providing CA certificate with the bid. Asper Clause 9 (b), it is only to be provided at the time of procurementwhich, admittedly, the Respondent No.3 has so provided.

Lastly, Respondent No.3 taking benefit of 20 % price difference hasmatched the price of the Petitioner, and hence no fault can be foundwith award of LOA in favour of Respondent No.3. Clause 3 (c) (ii) ofthe Make in India Policy states that if the L1 bidder is found to be anon-local supplier, then L2 will be invited to match the bid of L1, sothat no loss is caused to the state exchequer. Hence, the argument ofthe Petitioner that the difference between bids of the Petitioner (L1)and Respondent no. 3 (L2) is of 8.06% and, accordingly, Petitionershould be awarded the tender, has no merit. Clause 3 (c) (ii) of theMake in India Policy has been reproduced herein below:

“"3A Purchase Preference

…….…(c) In the procurement of goods or works which are covered bypara 3(b) above and which are not divisible in nature and in

procurement of services where the bid is evaluated on pricealone, the 'Class-I local supplier' shall get purchase preferenceover 'Class-II local supplier' as well as 'Non-local supplier', asper following procedure:

i. Among all qualified bids, the lowest bid will be termed as L1 IfL1 is 'Class-I local supplier' the contract w li awarded to L1

ii. If L1 is not 'Class-I local supplier' the lowest bidder amongthe 'Class-I local supplier', will be invited to match the L1 pricesubject to Class-I local supplier's Quoted price falling withinthe margin of purchase preference, and the contract shall beawarded to such 'Class-I local supplier' subiect to matching theLI price”(emphasis supplied)

Therefore, we find no merit in the present petition.The same is

dismissed.

JASMEET SINGH, J

SEPTEMBER 13, 2021/ ‘ms’

VIPIN SANGHI, J

W.P.(C) 2560/2021