The Court dismissed writ petitions seeking to quash a Request for Proposal for cable supply alleging material deviation from a prior Rate Contract basis. The Court held that the petitioners lacked locus standi as they were not empanelled, and the reverse auction was merely a pricing mechanism for the rate contract.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Delivered on: 10th January, 2017 + WP(C) 1672/2016 & CM NO.7189/2016 (STAY)
Vaishnav Transformer ..... Petitioner
Versus
Union of India & Anr …..Respondents
Vijay Kumar Jain, Proprietor Purity Cables ..... Petitioner
Versus
Union of India & Anr …..Respondents
Advocates who appeared in this case:
For the Petitioner:
For the Respondents:
Mr Sandeep Sethi, Sr Advocate with Mr Vikram Mehta, Mr Siddhartha Jain, Mr Varun Tikmani and Mr Gaurav Choudhary, Advocates.
Mr Sanjay Jain, ASG with Mr Atul Batra, Ms Pallavi Shali, Mr Kundan Mishra and Mr Akash Nagar, Advocates for respondent No.1. Mr Parag P. Tripathi, Sr. Adv. with Mr Pranay Kishore Mishra and Mr Sriniwasan Ramaswamy, Advocates for Respondent No.2
CORAM:
HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON'BLE MR. JUSTICE SANJEEV SACHDEVA
JUDGMENT
SANJEEV SACHDEVA, J
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16.10.2015 and a further direction to the respondents to consider the petitioner for empanelment under the RfE dated 16.10.2015 and thereafter to permit the petitioner to bid under the RfP dated 28.01.2016.
2. On 12.10.2015, the Power Grid Corporation of India Ltd., respondent No.2 issued an advertisement inviting interested parties to empanel themselves with respondent No.2 for the purposes of supplying cables, transformers, etc. Pursuant to the said advertisement, the respondent No.2 issued RfE on 16.10.2015.
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basis to e-reverse auction basis.
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9, Qutab Institutional Area, Katwaria Sarai, New Delhi - 110 016 (hereinafter referred to as 'POWERGRID') have been entrusted to empanel the manufacturers for procurement of various Equipments/Items for different States/Discoms under Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY)/Integrated Power Development Scheme (IPDS) on behalf of Ministry of Power, Government of India.
2.0 Accordingly, POWERGRID hereby solicits Request for Empanelment (RfE) from Applicants (Manufacturers) from within India, fulfilling the Qualifying Requirements (QR) and meeting the minimum criterial stipulated for empanelment as brought-out in Section -4 of the RfE Document for the following equipments:
3.0 The RfE, alternatively referred to as 'Applications', to be submitted by the Applicants shall include qualification data in compliance to the stipulated QR and other information/details/data/documentary evidences as sought through this RfE Document. The Applicants must meet the QR, which is a pass and fail criteria to be considered for empanelment. In addition to the QR, the empanelment also includes criteria for evaluating the applications (referred to as „Marking Criteria‟) on different attributes on a total score of 100 out of which an Applicant must score minimum 60 marks to be considered for empanelment. The Applicants who meet the stipulated Qualification Requirements and obtain the minimum score against the „Marking Criteria‟ shall be empanelled for different equipments. Thereafter Request for Proposal (RfP) shall be invited from the empanelled parties to finalize a Rate Contract. For procurement of the equipment, against which various States/Discoms may place orders for procurement of the equipment as
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per their requirements from time to time. However, prior to empanelment, POWERGRID reserves the right to carry out the assessment of Applicants as per the provisions of Section-4 of the RfE document.
1.2.1 POWERGRID, therefore, intends to empanel the manufacturers for procurement of various equipments/items under DDUGJY/IPDS Schemes. The objective of this empanelment is to obtain most competitive prices from the empanelled parties to enable POWERGRID to finalize a Rate Contract with them for supply of various equipments/items. Against the Rate Contract different States/DISCOMs may choose to place orders for procurement based on their requirement of equipments/items from time to time, as per their choice.”
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various equipments/items.
8.1 Unless otherwise specified in the Technical Specifications, bidders shall quote for the entire goods and related services on a “single responsibility” basis such that the total bid price covers all the Supplier‟s obligations mentioned in or to be reasonably inferred from the Bidding Documents in respect of the design, manufacture, including procurement and subcontracting (if any) and delivery of the goods. This includes all requirements under the Supplier‟s responsibilities for testing of the goods, where so required by the Bidding Documents, the acquisition of all permits, approvals and licenses, etc. and such other items and services as may be specified in the Bidding Documents, all in accordance with the requirements of the General Conditions of Contract. Items against which no price is entered by the Bidder will not be paid for by the Purchaser when executed and shall be deemed to be covered by the prices for other items.
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relevant provisions of Technical Specifications.
Sales tax/VAT, Excise duty and Entry tax as applicable for destination site/state shall not be included in the EXW price but shall be indicated wherever applicable in respective column of Price Schedule.
Whenever EXW price is quoted exclusive of excise duty and/or VAT, then the due credit under the CENVAT (Central Value Added Tax)/VAT scheme as per the relevant Government policies wherever applicable shall be taken into account by the Bidder while quoting bid price. All other taxes, duties and levies shall be included in the quoted
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EXW price. The name of states/Discoms who shall issue requisite Sales Tax Declaration forms for the goods to be supplied, is attached at Annexure-II to Section-II. The bidders are, however, advised to ascertain the status of issuance of requisite Sales Tax Declaration forms by a particular state/Discom arid quote their prices accordingly.
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Contract Agreement. A bid submitted with a fixed price quotation will not be rejected, but the price adjustment will be treated as zero. The price adjustment provision will not be taken into consideration in bid evaluation. Bidders are required to indicate the source of labour & materials indices in Attachment of the Price Schedule.”
“14.2 Description of the Bidding Process
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14.2.2 The two stage bidding process would be conducted in the following sequence:
(a) Technical Qualification:
In the first stage, the Bidders would be required to submit: (i) the Bid Security; (ii) confirmation of compliance to the provisions of the Bidding Documents; and (iii) the Financial Bid to the extent of specifying the Initial Price Offer.
The Techno-Commercial Bid of each Bidder, which is duly submitted in accordance with the Bidding Document along with the Bid Security shall be opened by the Nodal Authority on the date, time and places mentioned in Bidding document and in the presence of the Bidders who choose to attend.
The Techno-commercial Bid shall be evaluated against the criteria stipulated in the Bidding Documents.
(b) Ranking and Qualification:
The initial Price Offer of the Bidders who meet all the Eligibility Conditions (the “Technical Qualified Bidders”) shall be ranked on the basis of the ascending initial Price Bid submitted by each Technically Qualified Bidder. Basis such ranking the Technically Qualified Bidders, holding first fifty percent of the ranks (with any fraction rounded off to higher integer) or seven(07) Technically Qualified Bidders, whichever is
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higher, shall be considered to be qualified for participating in the electronic auction (the “Qualified Bidders”). However, in case the number of Technically Qualified Bidders is less than 7, all the bidders shall be considered to be qualified for participating in the electronic auction. Since the ranking shall be done packagewise, the bidder in a particular package is required to submit the prices for all the items in a package.
(c) Final Price Offer:
The Applicable Ceiling Price for electronic auction for bidder shall be Initial Price Offer received from the respective Technically Qualified Bidders. The Qualified Bidders shall be permitted to place their Final Price Offer on the electronic auction platform, which shall be lower than the Applicable Ceiling Price. The Qualified Bidders, for respective quantity allocated during the electronic auction process, shall be declared as the “Successful Bidder”.
***** ***** *****
23. Award Criteria.
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capacity and capability to perform the contract satisfactorily.”
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Qualified Bidders, whichever is higher, are to be considered qualified for participating in the electronic auction. If the Technically Qualified Bidders is less than 7, all the bidders are to be qualified for participating in the electronic auction. The ranking is to be done package wise, and the bidder in a particular package is required to submit the prices for all the items in the package.
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be fixed. Within the specified period, whenever the need arises, the buyer would issues a Purchase order based on the fixed rate on the supplier. This system of rate contract is prevalent in Public Sector Organisations, government departments and big corporations. In cases, where there are several individual departments/organisations requiring to make purchases, then following the Rate Contract system reduces expenditure as well as internal administrative lead time. Individual departments/organisations need not follow the process of inviting tenders and selecting the supplier. The central agency would enter into a rate contract with the supplier, which contract would be valid qua specified item/items, quantity and period.
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to be declared as the “Successful Bidder”. The award of Contract it to be to the successful Bidder for the respective quantity, whose bid is determined to be substantially responsive and the lowest evaluated bid, provided that the Bidder has requisite capacity and capability to perform the contract satisfactorily.
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rate contract to only those sellers who can supply unlimited quantity would disentitle the departments from purchasing the item economically from a seller who is able to supply, only a limited quantity, at a lower rate. Thus, there can be situations, under a rate contract, where for the same item, there are multiple rates. This would not prejudice the departments because the departments would always be at liberty to place orders on the seller who is offering the lowest price for the item.
SANJEEV SACHDEVA, J. BADAR DURREZ AHMED, J.
JANUARY 10 , 2017 st
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3 issues framed by the court
Whether the petitioners have locus standi to challenge the Request for Proposal since they did not apply for empanelment under the Request for Empanelment.
Whether the introduction of an e-reverse auction process in the Request for Proposal constitutes a material change to the rate contract basis stipulated in the Request for Empanelment.
Whether the issuance of a Request for Proposal strictly restricted to empanelled manufacturers is contrary to law or discriminatory.
Vaishnav Transformer
Vijay Kumar Jain
Union of India
Power Grid Corporation of India Ltd.
Badar Durrez Ahmed
Sanjeev Sachdeva
As recorded by the court registry
A petition under Article 226 of the Constitution asking a High Court to issue a writ against the State or a public authority in a civil matter.
Judgements on the same questions, provisions and authorities, from every court
