Dismissed

Ashok Leyland Limited v. Hrtc

Himachal Pradesh HC30 Aug 2017CWP/601/2017

Case brief

AI extract

What is this about?

The High Court dismissed the petitioner's writ petition challenging the award of an electric bus supply contract to another bidder. The Court held that the tender authority had the right to amend the RFP to facilitate participation, the petitioner was precluded from challenging terms it had accepted by bidding, and the petitioner failed the mandatory technical trial requirement.

What the court decided

AI extract

Ashok Leyland Limited Vs Hrtc — Public Procurement and Tenders | Himachal Pradesh HC (2017)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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CWP No.601 of 2017

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Reserved on : 26.7.2017 Date of Decision : August 30, 2017

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Ashok Leyland Limited ….Petitioner.

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versus

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Himachal Pradesh Road Transport Corporation and another. …Respondents.

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Coram:

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The Hon’ble Mr. Justice Sanjay Karol, Acting Chief Justice. The Hon’ble Mr. Justice Tarlok Singh Chauhan, Judge. Whether approved for reporting?¹ Yes.

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For the Petitioner : Ms Jyotsna Rewal Dua, Senior Advocate, with Mr. Raman Sethi, Advocate. For the Respondents : Mr. Shrawan Dogra, Senior Advocate, with Mr. Sunil Mohan Goel & Mr. Gulzar Singh Rathore, Advocates, for respondent No.1. Mr. P.S. Patwalia, Mr. B.C. Negi, Senior Advocates, with Mr. Yashwardhan Chauhan & Mr. Abhinav Mukherji, Advocates, for respondent No.2.

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Sanjay Karol, Acting Chief Justice

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In this petition, so filed under Article 226 of the Constitution of India, petitioner - Ashok Leyland Limited (hereinafter referred to as petitioner) lays challenge to the Letter of Award of contract, dated

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Whether reporters of the Local Papers may be allowed to see the judgment?

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22.4.2017 (Page-283), so issued by respondent No.1 - Himachal Road Transport Corporation (hereinafter referred to as HRTC), in favour of respondent No.2 – M/s Goldstone Infratech Limited (hereinafter referred to as Goldstone), with a further prayer that HRTC be directed to consider the petitioner’s revised bid dated 24.2.2017.

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The issues which require our consideration

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being:

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(a) Whether action of HRTC in issue of process of tender and award of contract, as alleged, is opaque, non-transparent, against public interest and as such illegal. Has it unfairly prejudiced the petitioner’s interest;

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(b) whether after having participated in the tender process, without any demur, is it open for the petitioner to assail the same;

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(d) whether the successful bidder was eligible to have participated in the tender process;

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(e) the scope of judicial interference in an award of tender.

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Facts, emerging from record, i.e. pleadings and the documents, are as under.

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While dealing with the matter for preservation and protection of the natural environment and ecology of

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legendry Rohtang Pass (an international tourists’ destination), certain directions came to be issued by the National Green Tribunal (NGT), inter alia, exploring the possibility of running CNG buses.

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On 13.3.2015 (Page-428), Government of India notified a Scheme, known as Faster Adoption and Manufacture of (Hybrid and Electric Buses) in India (for short, FAME). For implementation of the said Scheme, Government of Himachal Pradesh approached the Department of Heavy Industries, Government of India (hereinafter referred to as DHI), seeking support for purchase of 25 electric buses. Vide communication dated 8.1.2016 (Page-428), such request came to be communicated with two riders – (a) funding to be in the ratio of 75% : 25% that of Government of India and Government of Himachal Pradesh, respectively, (b) technical specification for the buses to be finalized, in consultation with DHI.

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Pursuant thereto, on 10.2.2016, HRTC floated Expression of Interest (hereinafter referred to as EOI) (Annexure P-3) for supply of Battery Operated Passenger Transport Vehicles, 25 in number, having overall length of 9-10 metres and floor height of 900 mm. It was a

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totally unique programme, with no background or history of manufacture or plying of non-traditional vehicles in the area. By 20.2.2016, the last date so prescribed, only one party expressed its interest. Hence, as desired by others, time to submit the EOI was extended till 15.3.2016 (Page29). In all, seven vehicle manufacturers expressed their interest and the details/ specifications so collected and collated were forwarded to the Director (Auto), Ministry of Heavy Industries and Public Enterprises, DHI (Page-429). 7. On 12.4.2016, DHI called a joint meeting of the interested parties/stakeholders, including, (i) HRTC, (ii) Department of Transport, Government of Himachal Pradesh, (iii) Association of State Transport Undertaking (ASRTU), (iv) all State Transport Undertakings/ Associations of State Road Transport Undertakings, (v) Society of Indian Auto Mobiles Association (SIAM), (vi) International Centre for Automatic Technology (ICAT), (vi) Central Institute of Road Transport (CIRT).

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At this juncture, it be observed that none was manufacturing Battery Operated Vehicles, which could be plied in the difficult and hilly terrain of Manali-Rohtang. As such, pursuant to directions dated 7.4.2016, so passed

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by the NGT, specifications discussed in the joint meeting

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held on 12.4.2016, were finalized and draft of Request for Proposal (hereinafter referred to as RFP), inviting tenders, forwarded to all the participants, inviting their suggestions.

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After considering the views and suggestions of all, including that of SIAM (see Para-7 supra), whose Chairman is the Managing Director of the petitionercompany, RFP was finalized and formally issued on 11.5.2016. The said document (Annexure P-5), inter alia contained terms and conditions as also the schedule to be adhered to, in finalizing purchase of such vehicles.

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Following is the schedule, so prescribed:

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S.No.	Event Description	Date
1.	Date of issue of RFP	11.5.2016
2.	Last date of receiving queries	27.7.2016
3.	Pre-Bid meeting	30.7.2016 at 2PM
4.	Bid due date	30.9.2016 at 2PM
5.	Opening of Envelop 1	30.09.2016 3PM
6.	Trial of EV on Manali-Rohtang Sector	To be intimated later
7.	Opening Envelop 2	To be intimated later
8.	Letter Award (LOA)	As per RFP
9.	Signing of the Contract	As per RFP

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Accordingly, on 30.7.2016, a pre-bid meeting

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was held at New Delhi, with all the manufacturers, in which both the petitioner and Goldstone also participated, wherein again the stakeholders were asked to give their suggestions by 12.8.2016.

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The fact that since none was a manufacturer of electric buses, hence, Indian manufacturer of conventional vehicles having technology alliance/ partnership with foreign companies with proven technology, may be allowed to bid as a Consortium, meeting the benchmark with global standards, was a view which emerged during the course of such meeting. 12. Consequently on 26.8.2016, after deliberating upon the issue with the authorities, HRTC forwarded the proposed corrigendum to be carried out in the RFP to the Secretary (Transport), Government of Himachal Pradesh for its approval. The said corrigendum was also forwarded

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to all the participant stakeholders, including those who had attended the meeting held at New Delhi on 12.4.2016, soliciting their response to be furnished on or before 22.9.2016. Eventually, by taking a holistic view

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and after seeking approval of the State Government, which was so accorded on 17.9.2016, HRTC amended the RFP, by issuing a corrigendum dated 11.10.2016 (Page157) (hereinafter referred to as the first amendment). Essentially, following changes were made – (i) calendar of events was rescheduled; (ii) concept of consortium was introduced; (iii) amount of financial turnover and net

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worth of the bidder was reduced marginally; (iv) Technical specifications were altered with the introduction of evaluation sheet.

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Subsequently, Board of Directors of HRTC took a decision to modify the terms of first amendment and consequently issued addendum dated 31.10.2016 (Annexure P-8) (hereinafter referred to as the second amendment).

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As per the schedule prescribed in the RFP, by 10.11.2016, the last date for submission of bids, only two manufacturers, i.e. Ashok Leyland (petitioner) and Goldstone (private respondent), submitted their bids, which were to be opened on 5.1.2017.

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At this stage, it be observed that pursuant to constitution of a nine-member Committee, so constituted by the State Government, for conducting trial of electric buses (EV-Prototype) from Manali to Rohtang, trial of prototype electric bus of Goldstone was conducted from 20.10.2016 to 2.11.2016, and that of petitioner from 5.12.2016 to 20.12.2016. This was prior to the stipulated date of 31.12.2016.

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Affidavit of HRTC demonstrates, though trial of Goldstone was successful, but that of petitioner was

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unsuccessful, for the bus never reached Rohtang with a single charge, as the battery had to be re-charged midway. Yet, a conscious decision was taken by the Chairman of HRTC that notwithstanding such fact, petitioner’s bid be opened, subject to their procuring necessary battery, to enable the bus to undertake journey to Rohtang from Manali and return, without charging the battery midway.

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Despite petitioner being ineligible, such decision was taken, perhaps keeping in view the fact that (a) the petitioner claimed itself to be a manufacturer of electric buses in India, (b) exclusion of the petitioner would have resulted into Goldstone being the sole bidder, which may not have been in the interest of Revenue.

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Taking a holistic view, bids, technical as also financial, of both the bidders, were opened on 6.1.2017 and 9.1.2017, respectively.

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The bidders were informed to clarify the terms of the bid, vide communication dated 24.1.2017 (Annexure R-1/10). Overall, evaluation of technical and financial bids revealed Goldstone to have complied with the specifications of RFP.

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As per the financial bid, Goldstone quoted the price of one bus @ 1,95,99,976.17 plus 23,56,650/- as AMC charges, whereas petitioner quoted 2,01,94,132.5 plus 50,97,300/- as AMC charges.

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On 30.1.2017 (Page-435), both the bidders were called for discussions and submission of necessary documents, establishing credentials and creditworthiness of their respective bids.

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In principle, HRTC decided to (a) hold negotiations with Goldstone for reducing the price of the bus as also the amount and terms and conditions of AMC, (b) hold negotiations with the petitioner for award of 30% of the purchase order, subject to their willing to match the commercial offer of Goldstone. This of course was subject to their fulfillment of conditions of RFP.

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HRTC desired to hold such meeting on 9.2.2017, but however on the petitioner’s request, meeting was postponed for 22.2.2017, on which date, negotiations were held with both the bidders. Goldstone agreed to reduce the price of the bus from 1,95,99,976.17 to 1,90,99,999.16 and the amount of AMC, so quoted, to be for a period of eight years, with certain payments to be deferred. Since negotiations

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between the petitioner and HRTC failed, resultantly, on 22.2.2017 itself, Letter of Award (Annexure R-1/6) was issued in favour of Goldstone.

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In view of the mandate of DHI (GOI), 31.3.2017 being the deadline for release of funds under the Scheme, contract agreement dated 27.3.2017 (Annexure R-1/7) for supply of buses, in terms of Clause 3.6 of Part-E of RFP was executed and purchase order (Annexure R-1/9) issued.

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However, vide Email dated 24.2.2017 (Annexure P-13), petitioner gave a counter offer, reducing the price of the bus at `1,86,99,976/-, without mentioning anything about the cost of AMC, which offer was not considered, in view of finalization of the bidding process.

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At this juncture, it be observed that even in the Court, HRTC offered to allot 30% of purchase order, but despite Court’s persuasion, petitioner did not agree. 27. Let us first examine the contents of the RFP. It is a proposal for design, manufacture, supply and commissioning of Battery Operated Passenger Transport Vehicle (known as EV Bus) with AMC and charging station

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for operation on Manali-Rohtang section of Himachal Pradesh.

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27.1 It contains nine parts and 16 Annexures. First part, i.e. Part-A is the “Disclaimer” clause, which unambiguously clarifies that the document is neither an agreement nor an offer. Purpose of the document being to provide “information to assist in the formulation of their proposal submission”. “Document does not purport to contain all the information Bidders may require”. Each bidder was to “conduct its own investigation and analysis” and check the “accuracy, reliability and completeness of information in the RFP” and “obtain independent advice from appropriate sources”.

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27.2 Part-B of the RFP deals with the Notice Inviting Tender (NIT), which clarified that views of various agencies were solicited and “corrigendum shall be issued,

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if required, on the basis of suggestions received from

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them”.

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27.3 Part-C of the RFP contains specifications. 27.4 Part-D contains the definitions.

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27.5(i) Part-E contains instructions to bidders. It is

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this Part with which we are concerned. In terms of Clause

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1.3, bidding in the form of Consortium is not permitted

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and the bidding and “Bidder” is defined in Clause 1 of Part-D to mean “the bidder meeting the eligibility criteria in Clauses 2.5.2”, who submitted the bid in response to the RFP”.

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27.5(ii) Clause 2.1 of Part-E lays down Brief Description of the Bidding Process. Relevant clause reads as under:

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“2.1 Brief Description of the Bidding Process

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(a) The Corporation shall adopt a single bid process with evaluation as per the RFP (referred to as the “Bidding Process)n for selection of the Successful Bidder for award of the Project. The Bidders shall submit their Bids in accordance with this RFP. The Bidders need to offer bid which conforms to the draft Contract provided as part of this RFP Document and the Technical Specifications.

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The bid submitted by each Bidder will comprise of two envelopes:

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Envelop 1” “Key Submissions and Techno- commercial Bid”, which will further have two envelopes-(i) Envelop 1A with “Key submissions, and (ii) Envelop 1B with “Technocommercial id”, and Envelop 2: “Price Bid”

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The two separate envelops will contain the information and date as stipulated in this RFP below.

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(b) Bidders must note that the Envelop 2 “Price Bid” of only such Bidders who submit responsive bids and who meet the Qualification Criteria alongwith successful trial of EV on the terrain are determined to be “Eligible Bidders” in accordance with the provisions of this RFP will be opened.” (Emphasis supplied)

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27.5(iii) Clause 2.5.1 prescribes the Eligibility of

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Bidders, whereby bidding by Consortium is not permitted. Technical and financial capacity is prescribed in clause 2.5.2. Sub clause (D) of Clause 2.5.3 provides for Trial of Product as under:

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“The bidder shall provide the prototype EV as per technical specifications mentioned in the RFP and shall be put to trial for operation in Manali-Rohtang sector (hilly terrain of H.P.) and only after successful trial of vehicle, the bidder shall be considered as eligible.”

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27.5(iv) Clause 2.13 specifically provided that:

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“2.13 Contents of the RFP

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This RFP comprises the Disclaimer set forth hereinabove, the contents thereof, and will additionally include any Addenda issued in accordance with Clause 2.15.

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The draft Contract provided by the Corporation as part of the Bid Documents shall be deemed to be part of this RFP.”

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27.5(v) Further, right of amendment of RFP is

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prescribed in Clause 2.15 of Part-E, in the following terms:

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“2.15 Amendment of RFP

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At any time prior to the Bid Due Date, the Corporation may, for any reason, whether at its own initiative or in response to clarifications requested by a Bidder, modify the RFP by the issuance of Addenda.”

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27.5(vi) Clause 5 stipulates that:

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“5. PRE-BID CONFERENCE:

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5.1 Pre-bid conference of the Bidders shall be convened 1400 hours on 30.07.2016 in office of Managing Director, Himachal Pradesh Road Transport, Shimla-171003. Bidders shall their own cost of attending any pre-bid conference.

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5.2 During the course of pre-bid conference(s), the Bidders will be free to seek clarifications and make suggestions for consideration of the Corporation. The Corporation shall endeavour to provide clarifications and such further information as it may, in its sole discretion, consider appropriate for facilitating a fair, transparent and competitive Bidding Process.

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5.3 Details of proposed/suggested variations/deviations/additions from the proposal specifications/conditions, if any, should be clearly indicated while sending queries before Pre-Proposal Conference. No further suggestions for deviations / variations / additions shall be entertained after the PreProposal Conference.

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5.4 The Corporation may clarify on variations/deviations, alternative proposals, which ensure equal or higher quality/performance to the Technical Specifications during Pre-Proposal Conference. However, the decision of the Corporation in this regard shall be final.

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5.5 After incorporating amendments acceptable to Corporation, RFP Document shall be frozen through issuance of an Addendum(s) Addendum to RFP Document shall be sent by e-mail to all prospective Proposers, who purchased the RFP Document. The addendum to the RFP Document can also be downloaded from Corporation website www.hrtc.gov.in

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5.6 Non-attendance at the pre-bid conference shall not be a cause for disqualification of a Bidder. However, terms and conditions of the Addendum(s) shall be

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legally binding on all the Bidders irrespective of their attendance at the Pre-Bid-Conference.” (Emphasis supplied)

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27.6 Part-F deals with the Format of Cover

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Agreement Comprising the Contract.

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27.7 Part-G deals with the Technical Specifications for Design, Manufacture, Supply and Commissioning. Clause 4 of the said Part reads as under:

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“4. Corporation reserves the right to alter, modify, change the specifications as per requirement to suit the latest provisions of CMVR/ any other Notifications, safety aspects, emission aspects besides any practical/ operational difficulties etc. faced by the Corporation. Vehicle Manufacturer shall ensure that all the alterations, changes or modifications in the specifications, if necessary, as mentioned above shall be carried out in the buses built by them as per advice of the Corporation without attributing any additional cost. Complete Bus has to be type approved from the approved test agency under CMVR as per specifications laid herein before any proto type is given to the H.R.T.C. Corporation. The buses shall comply with the HP Motor Vehicle Rules.” (Emphasis supplied)

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27.8 Part-H prescribes for the Annual Maintenance

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Contract.

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27.9 Technical specifications are also specified in Annexure-13 of the RFP.

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28 The primary question, which arises for consideration is as to whether HRTC was well within its right to amend the RFP or not?

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29 Significantly, vide Clauses 2.13, 2.15 & 5 of Part-E; the Disclaimer Clause, Part-A; NIT Clause, Part-B; and Clause 4 of Part-F, of the document itself of RFP, HRTC reserved its right to update, amend or supplement the information of the RFP, including the right not to proceed with the purchase or to change the process or procedure to be applied.

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30 Let us also examine the nature of the RFP and the backdrop, in which it came to be finalized and issued. 31 For cleaner and greener environment at Rohtang Pass, pursuant to directions issued by the NGT and the Scheme framed by the Central Government, HRTC ventured for providing EV Buses to be operated from Manali to Rohtang. At that time, no vehicle manufacturer in India was manufacturing such vehicle. Neither the State nor the Central Government had the mechanism or the wherewithal of procuring from open market, EV Buses manufactured in India.

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32 HRTC itself had no clue of any specifications. A project, unique in nature, was to be conceptualized and implemented by the proponent. Directions issued by the DHI (GOI) and specifications of the Project Implementation and Sanctioning Committee (PISC) that of

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Government of India were also required to be considered. It is this piquant situation, HRTC sought suggestions from various stakeholders, including bodies of manufacturers of vehicles and persons in the related trade.

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33 Hence, the RPF (Part-B, being NIT), clarified the tender to be global, reserving right to incorporate suggestions received from ASRTU, ARAI, CIRT, SIAM, ICAT, Director (Auto), Department of Heavy Industries & Director Transport, Government of H.P. At this juncture, it be noticed that reference is there of SIAM, whose Chairman is the Managing Director of the petitionercompany.

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34 Right to amend the RFP was specifically reserved in the Disclaimer Clause, Part-A; NIT Clause, Part-B; Clauses 2.13, 2.15 & 5 of Part-E; and Clause 4 of Part-F, of the document itself.

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35 The Apex Court in JSW Infrastructure Limited and another vs. Kakinada Seaports Limited and others, (2017) 4 SCC 170 (Two Judges), while applying the principle of construction observed that the document has to be construed in the backdrop in which it came to be prepared and has to be read as a whole.

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36 In Central Coalfields Limited and another vs. SLL-SML (Joint Venture Consortium) and others, (2016) 8 SCC 622 (Two Judges), the Court reiterated the principle that terms of NIT cannot be ignored, as being redundant or superfluous. Acceptance or rejection of the bid should be examined not only from the point of view of unsuccessful party but also from the point of view of employer. The soundness of the decision by the employer ought not to be questioned, but the decision making process can certainly be subjected to judicial review. Soundness of the decision can be questioned, if it is irrational or malafide or intended to favour someone or the decision is such that no reasonable authority, acting reasonably, and in accordance with relevant law, could have reached at such a conclusion. Further, even if the terms of the NIT is held to be essential, the employer has the inherent authority to deviate from it, provided deviation is made applicable to all the bidders and potential bidders, as per the law laid down in its earlier decision in Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489.

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37 In Villianur Iyarkkai Padukappu Maiyam v. Union of India & others, (2009) 7 SCC 561, the Court had

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a occasion to deal with the facts where the authorities were seeking development of Pondicherry Port. Attempts to get private participation in the project also failed. Lateron, the Government issued an advertisement, seeking Expression of Interest from consultants for preparation of feasibility study report. During the course of examination of such interest, one of the parties expressed its willingness to undertake the process of development with its own investment. By adopting the mechanism of ‘Build, Operate and Transfer’, the Government approved the request of such party, which came to be assailed by third parties, by way of a Public Interest Litigation. Holding that unless and until an illegality is committed in the execution of the policy or that the action is malafide, applying the settled principles of judicial review, the Apex Court refrained from quashing the action of the Government, also holding that mere change in the political dispensation would make no difference.

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38 Further, in Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & another, (2016) 16 SCC 818, while dealing with a case where tenders were invited for allotment of work, as a joint venture, for

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construction of Nagpur Metro Rail Corporation Ltd, the Court, after examining the law on joint venture consortium, reiterated the principle that decision making process of the employer, in accepting or rejecting the bid of the tenderer, should not be interfered with, unless and until the decision is so arbitrary or irrational that the Court could arrive at a conclusion that the decision is one which no reasonable authority, acting reasonably, and in accordance with law, could have reached. The decision came in the backdrop where the unsuccessful party challenged the eligibility of the successful tenderer, on the ground that the joint venture did not meet the eligibility condition of constructing Metro Civil Construction work. We find the facts to be similar in the instant case, for the experience of the consortium partner, i.e. BYD is required to be considered for the purpose of RFP.

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39 Thus, in our considered view, HRTC was well within its right to amend the RFP.

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40 The next question, which arises for consideration, is as to whether the document was “Tailormade” to favour Goldstone.

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41 The factum of amendment of RFP, firstly on 11.10.2016 and then on 31.10.2016, is not in dispute.

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42 Significantly, this was much prior to the last date of submission of the bids, by which date none knew who all were going to be the bidders. 43 Let us examine the terms of the RFP, which came to be amended. Amendments, relevant for adjudication of the lis, are indicated in a tabulated form:

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Reference to RFP	Original 11.5.201	RFP is 6	sued on	Corrigendu on 11.10.2	m-I issued 016
Part-C RFP Summary 11. Qualificati on Criteria	Following criteria f average In last starting 15 and 2 A net-wo on the la precedin submissi	are the qu or the bidde Turnover of three finan from, 2013 015-16. rth of Rs. 1 st day of fin g the due on of bid.	alifications rs: Annual Rs. 500 Cr. cial years -14, 2014- 000 Cr. As ancial year date of	Following qualificatio the bi consortium Annual turnover of last here fi starting fr 2014-15 an A net wort Cr. As on th financial ye the due submission	are the n criteria for dders / : average Rs. 75 Cr.in nancial years om 2013-14, d 2015-16. h of Rs. 50 e last day of ar preceding date of of bid.
Instructio ns to	S.No.	Event Description	Date	Date
Bidder 2.2 schedule	1.	Date of issue of RFP	11.5.2016	Date of issue of RFP	11.05.20 16
of bidding process	2.	Last date of receiving queries	27.7.2016	Last date of receiving queries	27.7.201 6 upto 5PM
	3.	Pre-Bid meeting	30.7.2016 at 2PM	Pre-Bid meeting	30.7.201 6 at 2PM
	4.	Bid due date	30.9.2016 at 2PM	Bid due date	10.11.201 6 at 11AM
	5.	Opening of Envelop 1	30.09.2016 3PM	Opening of Envelop1	5.1.2017 at 12 noon
	6.	Trial of EV on Manali- Rohtang Sector	To be intimated later	Trial of Ev on Manali- Rohtang Sector	Trials to be complete d 31.12.201

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	7. Opening Envelop 2 To be intimated later	6 Opening of Envelop2 To be intimated later
	8. Letter Award (LOA) As per RFP	Letter of attest (LOA) As per RFP
	9. Signing of the As per RFP	Signing of contract As per RFP
	Contract
Clause 2.5.2(D)	Trial of product
	The bidder shall provide the prototype EV as per technical specifications mentioned in the RFP and shall be put to trial for operation on Manali-Rohtang Sector (Hilly Terrain of H.P.) and only after successful trial of vehicle, the bidder shall be considered as eligible.	To ensure maximum participation, bidders are allowed to conduct trials with their existing products equivalent to the EV as required in the RFP. For clarification, equivalent product should be within 10% of the technical bid evaluation parameters as defined as Annexure 14A. These products shall be put to trial of operation on Manali Rohtang Sector (hilly terrain of H.P.) and only after successful trial of vehicle, the bidder shall be considered as successful if bidder is able to demonstrate that the fully charge electric bus completes the round trip of approved route with minimum distance of 110 Km. (for round trip) without any gliches and without any additional battery charging requirement and the same is demonstrated for minimum 10 days within 2 weeks.
		Bidder should inform HRTC of its trial schedule alongwith Bid i.e. 10^th November,2016.
New Clause 2.6 (ix) being inserted after 2.6 (viii) in PART E of RFP		Final evaluation of bids by all the Bidders shall be based upon technical and commercial parameters as given in newly inserted Annexure 14A.

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Part-1 - Annexure-13 Technical specifications for Electric Vehicles.

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Motor / Generator Description	Integrated Motor Generator	As per fitment	OE Standard
Normal Operating Range	Maximum 150 Km. (rated), Maximum 170 Km. (rated)	Minimum operation for minim tripfrom	110 Km for on hilly terrain um one round Manali-Rohtang-

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Angle of approach	Manali on single charge Between 15 deg to 20 deg As per OE subject to successful trial
Angle Departure	Not less than 11 dg As per OE subject to successful trial
Batteries	24 Volt/2* 12V.160Ah. 24 Volt/2*12V.160Ah/as per OE standard fitment.
Off Board Fast Charger	Should charge within 75 minutes at one of the two terminus for full capacity of batteries. Should charge within 180 minutes at one of the two terminus for full capacity of batteries.
Max Speed	Min 75 kmph@UBS II Min 60 kmph @ UBS II
Suspension Type	Parabolic leaf spring at Front and Rear / Air suspension at rear Parabolic leaf spring / Air suspension at Front and Air suspension at rear
Vehicle specified Seating Capacity	35-44 seats +D Minimum of 25 seats +D
Floor height	900mm Minimum 650mm subject to trial on Manali-Rohtang road and confirming to angle of approach / departure asper RFP	Minim um 900m m”
Normal operating Range	Minimum 150 km (rated), Maximum 170 kms (rated) Minimum 110 km for opera terrain for minimum one from Manali-Rohtang – Manali charge	tion on round on si	hilly trip ngle
Angle of approach	Between 15 deg to 20 deg As per OE subject to succes	sful trial
Angle of departure	Not less than 11 deg As per OE subject to succes	sful trial
Batteries	24 Volt/212V. 160 Ah 24 Volt12V. 160 Ah/A standard fitment	s per	OE
Off Board Fast Charger	Should charge within 75 minutes at one of the two terminus for full capacityof batteries Should charge within 180 m One of the two terminus for Capacity of batteries.	inutes a full	t
Max Speed	Min 75 kmph@UBS II Min 60 kmph@UBS II
Suspension type	Parabolic leaf spring at Front and Rear/Air Suspensionat rear Parabolic leaf spring/Air sus at front and Air suspension	pension at rear.
Vehicle specification Seating	35-44 seats +D Minimum of 25 seats +D
capacity
Floor height	900mm Minimum900mm
Bus Body-AIS 052 and MoUD-II Compliant. Doors	2 Nos-Flap Type; one Behind front axle, one Behind rear axle 2 Nos-Flap Type/Jack Knife d Control with driver confirming To angle of approach/depar RFP.	oor havi subject ture as p	ng to er
Bus body	v) Inner panels- light weight PVC laminated. v) Inner panels- light weight PVC laminated/a fitment.	s per	OE
Passenger Seats	iii) Number of Seats:- 35-44 iii)Number of seats:- Mini seats in 2x2 configuratio reclining Seats.	mum of n +D	25 with

¶143

Annexure 14A - Bid Evaluation Sheet

¶144

…24…

¶145

Bid evaluation	Weightage Max	Weightage	Justification
Technical bid evaluation		45
Technology	20	20
Proven technology : deployment of electric buses from bidder/consortiumglobally	5	5	Proven product and technology
10-25 buses		1
26-100 buses		3
>100 buses		5
Electricity consumption / km (f Mli Rhtt)	10	10	Lower tit
or ana oangroue			operangcos
<1 kWh/km 1.1-1.5 Kwh/km		10 6
1.6 –2.0 kwh/km		2
Charging	5	5	Operational requirement
Full charging from 0 to 100%		5
SOC< 1 hour
Full charging from 0 to 100%		3
SOC 1-3 hour
Full charging from 0 to 100%		0
SOC >3 hours
Specifications	25	25
Range on Manali Rohtang	5	5	Operational
Route			requirement
<110 km		0	Not eligible bidder as per tender
			condition
110-125 km		2
125-150 km & above		5
Front suspension	3	3	Comfort
Leafspring		1
Air suspension		3
Number seats	10	10
25 26-30		3 7
>30		10
Floor Height	4	4
650 mm		0
900mm		2
1100 mm & above		4
Peak motor power	3	3	Performance in hillyterrain
<100kw		0
101-150		1
>150		3
Commercialbid evaluation	55	55
Supply bid+NPV@ 10% of 8 years of AMC		45	45 Marks will be allotted to L-1 & subsequently bidders proportionately
Financing of 25% of payment of		10
HRTC
1year		2
2year		4
3year		6
4year 5year		8 10

¶146

…25…

¶147

Total 100”

¶148

44 In the petition, it is averred that (a) first corrigendum was issued (i) arbitrarily and unilaterally (Page-8), (ii) to benefit and facilitate Goldstone, without disclosing or making known the bidders of such fact in the pre-bid meeting held on 30.7.2016 (Page-8), and (b) petitioner was not provided adequate time for meeting the requirements stipulated in the Second Amendment (Page-12).

¶149

45 We do not find anyone of the averments, or submissions made during the course of hearing, to be factually correct or borne out from the record.

¶150

46 Firstly, let us examine the law on the issue.

¶151

47 It is a settled principle of law as laid down by

¶152

the Apex Court in Raunaq International Ltd. vs. I.V.R. Construction Ltd. and others, (1999) 1 SCC 492 (Two Judges) that: (a) before entertaining a petition, Court must be satisfied that some element of public interest is involved; (b) the dispute purely is not inter se private parties; (c) difference in price offer between the two tenderers may or may not be decisive in deciding the question of public interest; (d) where a decision is taken bonafide and the choice exercised on legitimate

¶153

…26…

¶154

consideration, without any arbitrariness Court should not show indulgence; (e) While granting interim injunction, Court must carefully weigh conflicting public interest; (f) where the decision making process stands structured and the tender conditions do set out requirements, Court is entitled to examine application thereof to the relevant fact circumstances; (g) relaxation if otherwise permissible, in terms of the conditions must be exercised for legitimate reasons; (h) nature and urgency in getting the project implemented is a relevant factor; (i) judicial review is permissible only on the established grounds, including malifide, arbitrariness or unreasonableness of the variety of Wednesbury principle.

¶155

48 The Apex Court in Tata Cellular vs. Union of India, (1994) 6 SCC 651 (Three Judges), laid down the following principle of judicial review of the nature of the contract with which we are dealing:-

¶156

“(1) The modern trend points to judicial restraint in administrative action.

¶157

(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made.

¶158

(3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible.

¶159

…27…

¶160

(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than, such decisions are made qualitatively by experts.

¶161

(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative or quasiadministrative sphere. However, the decision can be tested by the application of the "Wednesbury principle" of reasonableness (including its other facts pointed out above) but must be free from arbitrariness, not affected by bias or actuated by mala fides.

¶162

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”

¶163

49 The Apex Court in Master Marine Services (P) Ltd. vs. Metlalfe & Hodkinson (P) Ltd. and another, (2005) 6 SCC 138 (Two Judges), Court reiterated the principles that: (a) State can choose its own method to arrive at a decision; (b) State and its instrumentalities have duty to be fair to all concerned; (c) even when some defect is found in decision making process, Court must exercise its extra ordinary writ jurisdiction with great caution and that too in furtherance of public interest; and (d) larger public interest in passing an order of intervention is always a relevant consideration.

¶164

…28…

¶165

50 The Apex Court in Jagdish Mandal vs. State of Orissa and others, (2007) 14 SCC 517 (Two Judges), reiterated the aforesaid principles by stating that before interfering in a tender and contractual matter, in exercise of its power of judicial review, Court should pose itself the following question:-

¶166

“(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

¶167

¶168

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”;

¶169

(ii) Whether public interest is affected.”

¶170

51 If the answer is in the negative, there should

¶171

be no interference under Article 226. Most recently the

¶172

Apex Court in Central Coalfields Limited (supra), observed that:-

¶173

“……….If an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the Courts will not judicially review the decision taken. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation…..”

¶174

52 In Maa Binda Express Carrier and another vs.

¶175

North-East Frontier Railway and others, (2014) 3 SCC 760

¶176

…29…

¶177

(Two Judges), the Apex Court relied upon its earlier decisions reiterated the following principles:-

¶178

“23… …

¶179

(a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;

¶180

(b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;

¶181

(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;

¶182

(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and

¶183

(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.

……………………..”

(Emphasis supplied)

…30…

53 The principles stand reiterated in Haryana Urban Development Authority and others vs. Orchid Infrastructure Developers Private Limited, (2017) 4 SCC 243 (Two Judges) and Reliance Telecom Limited and another vs. Union of India and another, (2017) 4 SCC 269 (Two Judges).

¶188

54 We apply the said principles to the given facts.

¶189

55 It is a matter of record that prior to the issuance of RFP, Expression of Interest was issued by HRTC. National and International manufacturers of buses were requested to respond by 15.3.2016. Separate letters were also sent to various manufacturers of transport vehicles, including the present petitioner (Annexure P-2).

¶190

56 Certain queries were raised by the manufacturers, including the present petitioner, but whether addressed or not is immaterial. However, after receipt of suggestions and pursuant to meeting held at New Delhi on 14.2.2016 with various stakeholders and after consultation with DHI, RFP was duly approved by the authorities.

¶191

…31…

¶192

57 As per the prescribed schedule, a pre-bid

¶193

meeting was held at New Delhi on 30.7.2016, in which

¶194

following manufacturers participated:

¶195

M/s Ashok Leyland Ltd.

¶196

M/s Mahindra & Mahindra Ltd.

¶197

M/s Impact (KPIT)

¶198

M/s Goldstone Infratech Ltd.

¶199

M/s Tata Motors Ltd.

¶200

M/s JBM Auto Ltd.

¶201

58 The suggestions, queries and qualifications

¶202

that of the manufacturers were forwarded to the stakeholders/participants of the meeting so held at Delhi on 12.4.2016.

¶203

59 It is not that petitioner and Goldstone were the only ones who participated or expressed their interest or concerns. Need for amending the RFP was necessitated more out of deliberations so held in the pre-

¶204

bid meeting and the queries raised by the manufacturers, considering the fact that none was a manufacturer of electric buses in India and as such Indian manufacturers having technological alliance/ partnership with foreign companies, with proven technology, could be allowed to bid, as a Consortium.

¶205

60 This would have brought benchmarking with global standards.

¶206

…32…

¶207

61 It is in this backdrop, in a meeting held on 26.8.2016, Managing Director of HRTC formulated certain amendments, which were approved by the Government of Himachal Pradesh on 17.9.2016. In fact, as is evident from Para-20 of the supplementary affidavit dated 12.6.2017, the proposed amendments were made known to ASRTU, ARAI, CIRT, SIAM, ICAT, Director (Auto), Department of Heavy Industries & Director Transport, Government of H.P (Page-432), which averment remains unrebutted. The RFP was formally approved by the appropriate authority on 4.10.2016 and only thereafter corrigendum issued on 11.10.2016.

¶208

62 We find the amendments to have been carried out, taking a holistic view, necessitated out of attending circumstances, after due consultation, consideration and application of mind. It is not that RFP came to be amended either surreptitiously or in undue haste. It took two-three months to complete the process of finally amending the RFP (twice) and that too with due deliberations and consultation.

¶209

63 This Court cannot go into the technical evaluation of the changes sought to be incorporated by amending the RFP. The criteria, technical or commercial,

¶210

…33…

¶211

which is best suited, is to be adjudged by the authorities. In the given facts and circumstances, we do not find any reason sufficient enough to adjudicate any element of unreasonableness in the actions of the respondent warranting any interference. Is it that, so to say, petitioner wants to create a monopoly in the trade, by ousting Goldstone from the bidding process.

¶212

64 Amendment qua reduction in average annual turnover for the last three financial years (2013-14, 201415, 2015-16) from 500 crore to 75 crore and reduction in the net worth from 1000 crore to 50 crore is based on the consensus having emerged after completion of consultative process. Significantly, there is no change in the condition that buses to be supplied should be built in India. The concept of Consortium was introduced with the amendment. It stands clarified that the bidders/ Consortium shall be engaged in the manufacture of electric buses in India and should have been in the business of manufacturing and selling electric buses in India. Hence, the concept of ‘Make in India’ stands neither diluted nor deviated. The prototype of EV vehicle, as per proposed specification, put to trial for operation on Manali-Rohtang section has not been diluted.

¶213

…34…

¶214

65 It be only observed that the amendment incorporated is not restricted to the body with whom Goldstone has collaborated as a Consortium partner. It is a global tender. Anyone in the world, fulfilling the criteria, having collaboration with an Indian entity, willing to manufacture buses in India, was free to participate in the tender process.

¶215

66 Principles to be applied for interpreting a tender document involving the technical work and requiring special skill are different from interpreting contract document concerning other branches of law. On this issue, we find the following observations made by the Apex Court in Montecarlo Limited vs. National Thermal Power Corporation Limited, (2016) 15 SCC 272 (Two Judges), to be most appropriate to the instant case:-

¶216

“26. ……. 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 scrutinized by the technical experts and sometimes third-party assistance from those unconnected with the owner’s organization 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

¶217

…35…

¶218

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 decisionmaking 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 impressible. 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.”

¶219

67 Similar view stands taken in earlier decision in Elektron Lighting Systems Private Limited and another vs. Shah Investments Financial Developments and Consultants Private Limited and others, (2015) 15 SCC 137 (Two Judges).

¶220

68 The purpose of accepting the Consortium Bidding is that in modern commercial tenders where varied fields of expertise are required, a single party may

¶221

…36…

¶222

or may not possess all the requisite qualifications and therefore, Consortium Bidding is permitted. In that, the members of the Consortium may collectively bring with them, their varied expertise into the tender bid. Whenever Consortium Bidding is done, it is necessary, at least for any one of the constituents of the Consortium, to satisfy each of the tender qualifications. The term “Consortium” literally means a combination of several companies, banks, etc. for a common purpose. In the case of a Bidding Consortium, the Lead Developer/Lead Consortium Member shall be that Consortium Member vested with the prime responsibility of developing the project. The Lead Consortium Member shall necessarily make the maximum entity contribution in the project among the consortium members. As long as the norms are clear and properly understood by the decision-maker and the bidders satisfy the requirements, then, there is no difficulty in accepting Consortium Bidding.

¶223

69 On the plea that introduction of concept of consortium is illegal, learned counsel for the petitioner seeks reliance upon the decision rendered by the Apex Court in New Horizons Limited and another vs. Union of India and others, (1995) 1 SCC 478 (Two Judges). The

¶224

…37…

¶225

decision in no manner helps the petitioner. The Apex Court clarified that the terms and conditions of the document inviting offer for commercial transaction has to be construed from the stand point of a prudent businessman. When a businessman enters into a contract, whereunder some work is to be performed, he seeks to assure himself about the credentials of a person who is to be interested with the performance of the work. Such credentials are to be examined from a commercial point of view which means that if the contract is to be entered with a Company he will look into the background of the Company and the persons who are in control of the

¶226

same and their capacity to execute the work. The doctrine of lifting the veil in a case of joint venture was invoked by the Court. The Court affirmatively was of the view that while evaluating the issue of experience as contemplated in the document, experience of the constituents of the petitioner had to be included while considering the experience that of the corporate entity, that submitted the bid. Now in the instant case, one notices that M/s BYD is an organization engaged in the business of manufacture of EV buses, which stands

¶227

…38…

¶228

supplied and operated throughout the world. Hence Goldstone cannot be said to be ineligible on this count.

¶229

70 The background in which the decision to ply EV Buses was taken cannot be forgotten. The NGT was constantly monitoring the matter and the deadline of 31.3.2017, so prescribed in the Scheme (FAME) for finalizing the contract could not have been ignored. It is in this backdrop, after due deliberations, amendments came to be incorporated. Hence, it cannot be said that the document was tailor-made to favour Goldstone.

¶230

71 Having participated in the process for tender, is it open for the petitioner to agitate the issue, is the question which we proceed to examine further.

¶231

72 It is a matter of record that prior to 11.10.2016 or 31.10.2016, petitioner did not even whisper, expressing its concern, muchless protest about any one of the amendments carried out in the RFP or for that matter, even thereafter.

¶232

73 Stand of the petitioner that RFP stood locked with its issuance and as such was unamendable is contradictory, as is evident from communication dated 31.3.2017 (Annexure P-10), to the following effect:

¶233

…39…

¶234

“In that regard we would like to submit the enclosed deviations to be granted to AL so as to enable to bid competitively.”

¶235

74 In fact, vide communication dated 3.11.2016

¶236

(Page 190), petitioner had submitted queries regarding Bid Evaluation Sheet and other terms and conditions so amended with the issuance of corrigendum. Further vide communication dated 14.11.2016 (Page-191), petitioner, inter alia, stated that:

¶237

“………….

¶238

While we are planning to conduct trials on the Manali-Rohtang route as mentioned above, we require HRTC to enable and facilitate the temporary registration and other necessary approvals required for conducting the product trials as mentioned in the RFP considering that the subject prototype is meant for internal R&D use and hence does not possess a valid CMVR certificate.

¶239

It will be our endeavour that the demo vehicle will be complying to the requirements as mentioned in Clause 2.5.2 D – Trial of product, Corrigendum I released by HRTC dated 11.10.2016, since this is a test vehicle used internally by our product development team for testing and validation in Indian conditions.

¶240

The brief specification of the trial vehicle is enclosed with this letter for approval.

¶241

…………………”

¶242

(Emphasis supplied)

¶243

75 In fact in the very same document, petitioner

¶244

goes on to state that “The Trial prototype will not be representative of the actual production bus that Ashok

¶245

…40…

¶246

Leyland intends to launch and hence should not be construed for any other purposes other than successful demonstration of EV technology”.

¶247

76 Thus, petitioner had accepted the terms and conditions of the RFP in its amended form. 77 On 14.12.2016, petitioner expressed its gratefulness for all support and facilities extended by HRTC. It agreed to comply with 10% of the specifications prescribed in the RFP. It cannot be disputed that the prototype bus of the petitioner had just two batteries as against requirement of three batteries and the reason for failure to do so, is the effect of demonetization, which is palpably false. Petitioner is a limited company and procurement of a single battery had nothing to do with demonetization. On this issue, what is also contended is that petitioner was not afforded sufficient time for procuring the prototype EV Bus as per the revised specifications. But then, as is evident from communication dated 19.12.2016 (Page-206), petitioner did not protest of such fact. It only furnished explanation for not incorporating the third battery.

¶248

78 Petitioner was itself seeking modification in the corrigendum, which is evident from communication

¶249

…41…

¶250

dated 10.1.2017 (Page-209). But then, such request did not find favour with the authorities and petitioner did not pursue the matter any further. To the contrary, openly accepted the same, by furnishing a revised bid. Not only that, as is evident from communication dated 14.2.2017 (Annexure P-12), HRTC informed the petitioner about its failure in conducting the trial as per prescribed specifications and schedule.

¶251

79 Petitioner chose not to assail the amendments at the appropriate time. And the reason is not far to seek. They are not an established manufacture of EV Buses. Even for the purpose of trials, petitioner had also brought a prototype of the Bus sought to be supplied as per RFP.

¶252

80 Prior to October, 2016, petitioner was not a manufacturer of EV Buses, though it claims to have established some infrastructure. Whether in terms of ‘Make in India’ programme, it has actually started manufacturing any EV Buses, is not on record. As is so averred, petitioner may have got some orders for supply of EV Buses from some State Transport Undertakings, but then this fact ipso facto would not amount to fulfillment of the eligibility criteria prescribed in the RFP, more so in

¶253

…42…

¶254

the absence of similarity in the specifications of RFP with that of the EOI so awarded in favour of the petitioner by such undertakings.

¶255

81 Petitioner participated in the bidding process, openly accepting the terms of the bid document, hence, is otherwise precluded from assailing the terms thereof.

¶256

82 Now, let us examine petitioner’s eligibility. 83 Sub-clause (b) of Clause 2.1 of Part-E of RFP prescribes as to who would be an eligible bidder. Only those persons who met the qualification criteria alongwith successful trial of EV on the terrain are to be considered to be eligible bidders. This also is a stipulation of 2.5(D) of Part-E. Undoubtedly, petitioner did not fulfill such condition. Prototype of EV Bus did not complete the trip with a single charge.

¶257

84 Further averment in the rejoinder that parties were not afforded adequate time to fulfill the condition contained in Clause 21.5 (i) and 2.15 (ii) is untenable in law. Amendments were incorporated prior to the submission of bid, which was so done on 11.10.2016 and 31.10.2016. At that point in time, none of the parties either protested or submitted the bid, reserving their

¶258

…43…

¶259

rights to assail the amendments. Also none sought legal remedy, in accordance with law.

¶260

85 We now examine the financial bids so submitted by the parties.

¶261

86 From the affidavit dated 6.4.2017 (Page-240), it is clear that despite being ineligible, financial bids were opened and petitioner was called for negotiations. Now, petitioner suppressed this fact. There is no averment in the petition. Petitioner also did not disclose that HRTC had offered 30% of its supply order. Why such fact came to be concealed, is not clear. We may also observe that petitioner did not disclose the factum of his initial offer to be much higher than what was so offered by Goldstone

¶262

87 Be that as it may, it is evident from the affidavit that petitioner was insisting for award of work to the extent of 100%. .

¶263

88 Offers, original and revised, that of the petitioner and Goldstone, are as comparatively indicated as under:

¶264

	Original Bid	Revised Bid	Original AMC	Revised AMC/EMI
Ashok Leyland (Petitioner)	`2,01,94,132.5	`1,86.99.976/-	`50,97,300/-
Gold Stone	`1,95,99,976.17	`1,90,99,999.16	`23,56,650/-	AMC, so quoted, to be for eight years, and EMIs over 3

¶265

…44…

¶266

years.

¶267

89 Quite apparently, petitioner cannot be said to be L-1 nor its offer so lucrative, materially affecting public revenue. We do not find submission of the petitioner that their contracted price is lower than Goldstone, to be correct.

¶268

90 HRTC can adjudge best as to who is better suited in discharging and fulfilling all contractual obligations.

¶269

91 In the instant case, petitioner has not made out a case for interference, for we do not find the action to be unreasonable, arbitrary, capricious, whimsical and hence illegal.

¶270

92 In fact, grievance so made out in the present petition is purely an afterthought, which fact is evident from Email dated 24.2.2017, whereby revised offer came to be furnished by the petitioner, contents whereof (relevant portion), are reproduced as under:

¶271

”………………

¶272

¶273

Managing Director, Himachal Road Transport Corporation, Shimla-171003

¶274

Dear Sir,

¶275

Subject: Regarding the tender for purchase of electric bus qty. 25 nos.

¶276

…45…

¶277

Reference: Our meeting at your office on 22^nd Feb 2017 at Shimla at 12 noon

¶278

At the outset, we would like to congratulate the Himachal Pradesh government for evaluating the feasibility of electric buses at one of the highest altitude roads of Manali – Rohtang Sector. This project implementation would definitely bolster the ambitious vision of the State of Himachal Pradesh to provide an enabling environment for providing quality service to its users while preserving the environment and leveraging other opportunities to promote efficient mobility solutions in the State.

¶279

We would also like to convey our sincere thanks to HRTC officials and Technical committee members who extended their fullest cooperation and support to Ashok Leyland for a successful prototype user end trial. We are also very proud to be part of the Himachal Pradesh Government’s green initiative and would in this regard and with reference to the meeting dated 22.02.2017 at Shimla and based on your request for us to confirm to you in writing, we take great pleasure to revise our offer and be part of Himachal Pradesh’s green initiative. All other terms and conditions remaining unchanged Ashok Leyland’s revised offer given below. We would welcome a further discussion to discuss and close this at the earliest. We also confirm meeting your request for trials with third battery at our agreed date prior to Proto acceptance.

¶280

Ashok Leyland Offer:

¶281

Description & Model No.of	Ashok Ley Basic price	land Circuit Elec ED @ 6.125%	tric Bu VAT	s Price TCS @ 1%	End Rate
		6.125%		1%
01 Unit of Ashok Leyland Electric Bus Including Charger	1,74,46,245/-	10,68,583/-	NIL	1,85,148/-	1,86,00,976/-

¶282

The above mentioned offer price is valid till 28^th February 2017. We request HRTC to kindly acknowledge our revised commercial offer (lower than current L1 price of 1.91 crores per bus) and sincerely hope HRTC will consider allocating 25 buses order with this revised offer from Ashok Leyland.

¶283

We once again confirm that our offered Electric bus will meet HRTC’s tender requirement and we sincerely hope and believe that Ashok Leyland has always played a pivotal role in improving urban mobility and sincerely looking forward to partner this endeavour of HRTC TO RUN ELECTRIC BUSES. Assuring our best services,

Thanking you

Yours faithfully

…46…

For Ashok Leyland Ltd. Amol Vaishampayan Area Sales Manager-STU”

¶288

(Emphasis supplied)

¶289

93 Averment with regard to talks of petitioner being offered work to the extent of 30%, in the meeting held on 22.2.2017, is not in dispute, as is evident from the averments made in the rejoinder (Page-349). However, further averment that petitioner expressed its willingness to match the price that of Goldstone, subject to award of full contract, is only an afterthought. This we say so for two reasons, (a) it is not reflected in the revised offer dated 24.2.2017, (b) petitioner suppressed the factum of negotiations on 22.2.2017, in the petition, wherein there is not even a whisper about such fact.

¶290

94 Petitioner has placed on record various letters, exchanged inter se the parties. However, on 16.12.2016 itself, in response to various queries, HRTC clarified as under:

¶291

“…………

¶292

Kindly refer to your letter No.ROC:AV:1412A, dated 14.12.2016 on the subject cited above.

¶293

As intimated vide our letter dated 14.12.2016 and 21.11.2016 (before the beginning of your trial), it was clearly mentioned as per Clause No.2.5.2 (D) of RFP, which is once again reproduced as under:-

¶294

“To ensure maximum participation, bidders are allowed to conduct trials with their existing products equivalent to the EV as required in the RFP. For

¶295

…47…

¶296

clarification, equivalent product should be within 10% of the technical bid evaluation parameters as defined in Annexure 14A. These products shall be put to trial for operation on Manali-Rohtang sector (hilly terrain of H.P.) and only after successful trial of vehicles, the bidder shall be considered as eligible and its bid will be evaluated. The trial shall be considered as successful if bidder is able to demonstrate that the fully charged electric bus completes the round trip of approved route with minimum distance of 110 km. (for round trip) without any glitches and without any additional battery charging requirement and the same is demonstrated for minimum 10 days within 2 weeks. Bidder should inform HRTC of its trial schedule alongwith Bid i.e. 10^th November, 2016. ”

¶297

It has been noticed that your vehicle during trial has not been able to complete even one way journey from Manali to Rohtang (51 kms.) in one single charge, which is not in conformity with the aforesaid RFP condition, for successful trial.

¶298

Your attention is also invited to your email dated 14.11.2016 (Annexure ‘A’), wherein you had mentioned under Technical specification of the trial product that the range of the vehicle in single charge would be 80 kms, but on the other hand, as mentioned above distance from Manali to Rohtang in one way is 51 kms and yet your vehicle has not been able to cover 51 kms in single charge.

¶299

So far as issue of certification of trial is concerned, the State Government has notified a Committee consisting of SDO (Civil) Manali (Chairman, DSP, Manali, RTO Flying Squad, Kullu, Director, Environment & Technology, DM (Tech)/WM, HRTC, Head Office, Manager (Tech.), DW, HRTC, Mandi, RM, HRTC, Kullu alongwith expert Members from IIT/NIT. After receipt of report from the Committee, HRTC will make the final report about the trial.

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95 Prior thereto, on 8.11.2016 (Page-383),

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petitioner was made known that since parties had participated in the pre-bid meeting and response to the queries/ corrigendum was issued accordingly, further queries would not be entertained.

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96 There are other issues, so raised by the petitioner, which need to be addressed – (i) whether the

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prototype of the EV bus was a dummy or actually what was intended to be purchased or supplied inter se the parties, (ii) evaluation of the technical bids, (iii) eligibility of Goldstone, (iv) whether there was any third amendment to the RFP, and.

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97 Submission that bidders were allowed to conduct trials with their existing product, with the understanding that supplies under the contract would be in terms of the RFP, moreso without the bus operating on a single charge, is untenable in law. Clause 2.5 (D) of Part-E of RFP itself provided that the bidders were to conduct trials with their existing products, equivalent to the EV, as required in the RFP, with variation of 10% of technical evaluation parameters, as defined in Annexure14A. It was not a dummy but prototype of the bus to be eventually supplied by the bidder.

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98 On the issue of trial run, petitioner was informed vide letter dated 16.12.2016 (Annexure R-1/4) that the bidders were required to fulfill the criteria so prescribed in the RFP. It is not in dispute that prototype of EV Bus, that of the petitioner was subjected to trial, on the Manali-Rohtang-Manali track. On a single charge, the vehicle could not complete one side of the trip, i.e. from

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Manali to Rohtang and fell short by 5-10 kms. The reason assigned by the petitioner is that they were unable to procure the third battery on account of demonetization. The reason, to say the least, is bordering absurdity, for petitioner claims to be an established player in the field having marketed seven lakh vehicles, having footprints in more than 50 countries, with a turnover of more than $2.3 billion. It is not that the petitioner was asked to have the trial conducted overnight. Nature of energy sought to be used for running the vehicle was well within their knowledge. According to the petitioner, in October, 2016 itself, they had established infrastructure for manufacture of EV Buses. Hence, under these circumstances, the explanation is absolutely unbelievable.

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99 Be that as it may, the fact of the matter is that despite the shortcomings and the petitioner not having fulfilled the eligibility criteria, as prescribed in RFP, mandating successful trial to a condition precedent for fulfillment of criteria (Clause 2.1 (b) Part E), HRTC went ahead and offered 30% of the total project, which did not find favour with the petitioner. Perhaps, one of the reasons to do so was also to ensure compliance of the orders passed by NGT and avail benefit, pecuniary in

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nature, that of the Scheme floated by the Central Government. The ‘Make in India’ criteria cannot be said to have been diluted, for the vehicles of that of the petitioner and Goldstone are to be manufactured in India, either independently or in collaboration with third party, as per the conditions of RFP.

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100 Grievance is made out that HRTC unilaterally changed the floor height, first from 900 mm to 650 mm and thereafter back to 900 mm. Well all these are technical specifications, which are subject to change. Further averment that the prototype bus of Goldstone not fulfilling the specifications, inasmuch as floor height of the bus being 650 and not 900 mm with seating capacity was 24 plus driver, stands seriously disputed. Hence, it cannot be said that the prototype bus of Goldstone was not RFP compliant. Whether factors like angle of report, angle of departure, floor height are faulty or not, are all technical aspects to be evaluated by the experts and not Courts. It is for the experts to examine the issue and there is nothing on record to even remotely demonstrate that such decision is based on extraneous factors or considerations or against the criteria or procedure prescribed in the RFP.

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101 It is further contended that evaluation criteria was introduced in the first amendment. We see no reason as to how such act of HRTC can be said to be arbitrary or violative of Article 14 of the Constitution of India. After all, there had to be some criteria for evaluating the bids, both technical and financial. In the instant case, evaluation criteria prescribed 45 marks for technical bid and 55 marks for financial bid. Significantly, evaluation is not by ordinary persons, but by experts. There is nothing wrong with the same. Submission that evaluation by the Committee is faulty, remains unsubstantiated on record. Allegations of malafide, with regard to evaluation, are absolutely vague and unspecific, with regard to time, place and manner. It cannot be said that petitioner has made out a case of malice, either of fact or law. We may only observe that tender came to be submitted on 10.11.2016, whereafter no condition or parameter prescribed in RFP was changed.

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102 On the issue of evaluation vide Annexure-14A, one finds that letters dated 10.1.2017, 16.1.2017 and 6.2.2017 that of the petitioner were addressed by HRTC vide response dated 14.2.2017, in which issue of eligibility of Goldstone also came to be considered.

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103 The Apex Court in Joshi Technologies International Inc. vs. Union of India and others, (2015) 7

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SCC 728 (Two Judges), while dealing with the issue as to whether the successful bidder was entitled to the benefit under Section 42 of the Income Tax, 1961, as a condition of the contract or not held that:-

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“70.1 At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness.

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70.2 State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practice some discriminations.

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70.3 Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, Involving examination and cross- examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases court can direct the aggrieved party to resort to alternate remedy of civil suit etc.

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70.4 Writ jurisdiction of High Court under Article 226 was not intended to facilitate avoidance of obligation voluntarily incurred.

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70.5 Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the license if he finds it profitable to do so: and he can

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challenge the conditions under which he agreed to take the license, if he finds it commercially inexpedient to conduct his business.

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104 The Apex Court in Tata Iron & Steel Co. Ltd.

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vs. Union of India and another, (1996) 9 SCC 709 (Two

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Judges), observed as under:-

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“68. … … This is a case of the type where legal issues are intertwined with those involving determination of policy and a plethora of technical issues. In such a situation, courts of law have to be very wary and must exercise their jurisdiction with circumspection for they must not transgress into the realm of policy making, unless the policy is inconsistent with the Constitution and the laws. In the present matter, in its impugned judgment, the High Court had directed the Central Government to set up a Committee to analyse the entire gamut of issues thrown up by the present controversy. The Central Government had consequently constituted a Committee comprising high level functionaries drawn from various Governmental/Institutional agencies who were equipped to deal with the entire range of technical and long term consideration involved. This Committee, in reaching its decision, consulted a number of policy documents and approached the issue from a holistic perspective. We have sought to give our opinion on the legal issues that arise for our consideration. From the scheme of the Act it is clear that the Central Government is vested with discretion to determine the policy regarding the grant or renewal of leases. On matters affecting policy and those that require technical expertise, we have shown deference to, and followed the recommendations of, the Committee which is more qualified to address these issues.”

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105 Also this Court in CWP No.9337 of 2013-D, titled as Shri Ashok Thakur vs. State of Himachal Pradesh, decided on 06.05.2014, reiterated that:-

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“….. that such technical matters can hardly be the subject matter of judicial review. The Court has no expertise to determine such an issue, which, besides being a scientific question, would have very serious and far-reaching consequences.”

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And that “the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical.......”

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106 Also, the principle laid down by Hon’ble the

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Supreme Court of India in Heinz India (P) Ltd. & Anr. v. State of U.P. & Ors, (2012) 5 SCC 443, to the following

¶336

effect:

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“……It may have abused or misused the authority which it had. It may have departed from the procedures which either by statute or at common law as a matter of fairness it ought to have observed. As regards the decisions itself it may be found to be perverse, or irrational or grossly disproportionate to what was required. Or the decision may be found to be erroneous in respect of a legal deficiency, as for example, through the absence of evidence, or of sufficient evidence, to support it, or through account being taken of irrelevant matter, or through a failure for any reason to take account of a relevant matter, or through some misconstruction of the terms of the statutory provision which the decision-maker is required to apply. But while the evidence may have to be explored in order to see if the decision is vitiated by such legal deficiencies it is perfectly clear that in case of review, as distinct from an ordinary appeal, the court may not set about forming its own preferred view of evidence.”

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107 Emphasis is laid on the fact that HRTC could not have allowed Goldstone to bid as a Consortium. From the response filed by the respondents, it is evident that BYD is a company having its office in China. Goldstone, BYD and Mytrah, in Consortium, are having turnover with 60,000/- crore with a net worth of over 35,000/- crore. Globally, DYD has deployed more than 10000 vehicles. Goldstone is registered in India as a manufacturer of electric buses, with DYD as its technological partner. Goldstone has clarified that all 25 vehicles would be brought in a Complete Knocked Down and Semi Knocked Down state and assembled at Bengaluru through CMVR approved contract manufacturing facility. It is nobody’s case that this is impermissible in law. It is not that a bus is built in China and as it is imported in India. Be that as it may, Goldstone has already designed a Bus body in India complying to Urban Bus Code. Also, necessary permissions and sanctions under various laws of the land stand obtained, as is so averred in Para-8(d) (Page-301) of the reply-affidavit.

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108 Much emphasis is laid on the fact that criminal cases stand registered against the Managing Director of Goldstone and as such, by virtue of Clause (9)

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of AMC (Annexure P-16), is precluded from participating in the bid process. Clause (9) (Page-378) only defines what is “Corrupt or Fraudulent Practices”, which reads as under:

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“HRTC requires the contractor under this tender to observe the highest standards of ethics during the procurement and execution of such contracts. In pursuance of this policy, the HRTC defines for the purposes of this provision, the terms set forth as follows:

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a) ‘Corrupt practice’ means the offering, giving, receiving or soliciting of any thing of value of influence the action of the public official in the AMC process or in contract execution; and

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b) ‘Fraudulent practice’ means a misrepresentation of facts in order to influence a Contract process or execution of a contract to the detriment of HRTC and includes collusive practice among the bidders (prior to or after bid submission) designed to establish bid prices at artificial noncompetitive levels and to deprive the HRTC of the benefits of the free and open competition.”

¶346

109 Goldstone has not indulged into corrupt or fraudulent practices in soliciting or executing the contract in question. Mere initiation of some proceedings is of no consequence, insofar as execution of the contract in question is concerned. In fact, reliance on this document only contradicts the petitioner’s stand of the document not open to amendment.

¶347

110 Annexure-14 of RFP deals with the format of Price Bid with AMR. It is contended that with the issuance of Comprehensive Annual Maintenance Contract

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Agreement (Annexure P-16) (Page-370), the HRTC has changed original terms of RFP. In our considered view, it is not so. Annexure P-16 only lays down the terms and conditions.

¶350

111 There is a background, which led to the issuance of this document. As is evident from the document (Page-421), comparative analysis of the observations and alleged deviations so prepared by the HRTC, was recorded:

¶351

“14 RFP page Part H Maintenance	Terms conditions mentioned in	M/s Leyland noted	Ashok has but
Contract.	RFP	requested to	HRTC refer
		Annexure	A for
		terms	and
		conditions	of
		AMC,	hence
		conditional	bid.”

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112 In response thereto, petitioner, as is evident

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from Page 426 of the paperbook, observed as under:

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“We require detailed briefing and clarifications from HRTC regarding comprehensive AMC terms including contractual obligations.”

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113 In this backdrop, document (Annexure P-16)

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came to be issued. The document is to be either accepted or rejected as a whole. Also, what is objectionable about the terms of the said document has not been spelt out. But then, petitioner cannot be allowed to blow hot and cold in the same breath. When it comes

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to highlighting ineligibility of Goldstone, reliance is placed on Clause-9 of the very same document, which deals with the issue of corrupt or fraudulent practices.

¶359

114 In Para-3 of reply-affidavit dated 7.5.2017 (Page-414), HRTC has explained the circumstances, which led to the issuance of such clarification. In a meeting held on 30.1.2017, petitioner had itself sought clarification on AMC.

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115 It is a settled principle of law that bidder participates in the tendering process after fully appreciating and understanding the terms and consequences thereof. Having participated once, it is not open for the bidder to assail the terms thereof. [See: Tafcon Projects (I) (P) Ltd. vs. nion of India & others, (2004) 13 SCC 788 (Two Judges)]. 116 It is also a settled principle of laws that in matters of economic rights and Policy decisions of the State, scope of judicial review is limited and circumscribe unless the Policy is absolutely capricious, unreasonable and arbitrary and mere ipse dixit of the executive authorities or violative of Constitution and Statutory mandate, normally Court would not interfere. [See: M.P.

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Oil Extraction & another vs. State of Madhya Pradesh & others, (1997) 7 SCC 592 (Two Judges)].

¶363

117 The Apex Court in Natural Resources Allocation, In Re, Special Reference 1 of 2012, (2012) 10 SCC 1 (Five Judges), has observed as under:-

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“149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximizing private entrepreneurs, adoption of means other than those that are competitive and maximize revenue may be arbitrary and face the wrath of Article 14 of the Constitution. Hence, rather than the prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable and capricious due to its antimony with Article 14 of the Constitution.”

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118 The principle stands followed in Manohar Lal Sharma vs. Principal Secretary and others, (2014) 9 SCC 516 (Three Judges). To similar effect are the decisions rendered in 5 M&’T Consultants Secunderabad vs. S.Y. Nawab & another, (2003) 8 SCC 100 (Two Judges) and Shivashakti Sugars vs. Shree Renuka Sugars, CA No.5040

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of 2014, dated 09.05.2017, Supreme Court of India, wherein the Court reiterated the principle that the Courts are required to consider the economic impact of its decisions, which should be in the larger interest of the society and development.

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119 While contending that a petitioner is a stranger and not a person aggrieved, learned counsel seeks reliance upon the decisions rendered in Jasbhai Motibhai Desai vs. Roshan Kumar, Haji Bashir Ahmed, (1976) 1 SCC 671 (Four Judges); Mithilesh Garg & others vs. Union of India & others, (1992) 1 SCC 168 (Three Judges); Raunaq International Limited vs. IVR Construction Limited, (1999) 1 SCC 492 (Two Judges); and Sanjay Kumar Shukla vs. Bharat Petroleum Cooperation Limited, (2014) 3 SCC 493 (Two Judges). In our considered view, the ratio decidendi in these judgments is not to the effect that unsuccessful bidder is not a person aggrieved and can under no circumstances assail the action of the authorities, even if it is violative of Article 14 of the Constitution of India.

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120 In view of our discussion supra, we are of the considered view that the issue of process of tender and award of contract cannot be said to be against public

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policy or the actions of the State/HRTC to be in any manner illegal. It cannot be said that in any manner interest of the petitioner stands unfairly prejudiced or that the conditions were tailor-made to favour the private party. In our considered view, no scope for judicial review is made out by the present petitioner.

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With the aforesaid observations, writ petition stands dismissed. Pending application(s), if any, also stand disposed of.

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( Sanjay Karol ), Acting Chief Justice

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August 30, 2017(sd)

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( Tarlok Singh Chauhan ), Judge.

Ashok Leyland Limited v. Hrtc

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Ashok Leyland Limited v. Hrtc

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