SIEMENS LTD Vs. HSCC INDIA LTD
LAWS(DLH)-2007-3-89
HIGH COURT OF DELHI
Decided on March 06,2007

SIEMENS LTD. Appellant
VERSUS
HSCC (INDIA) LTD. Respondents

JUDGEMENT

MUKUL MUDGAL, J. - (1.) This writ petition under Article 226 of the Constitution of India challenges the action of the Respondent No.1 M/s HSCC (India) Ltd. and the Respondent No.2 Government of Madhya Pradesh, in opening the price bid of the Respondent no.3 M/s Wipro GE Medical Systems Ltd. on 19th April 2006 and seeks issuance of a rimandamus and / or order and / or direction interalia directing the respondents 1 and 2 to award the contract in favour of the petitioner in respect of IFB No.HSCC/PUR/MP/RDC/2005 dated 8th August 2005.
(2.) The brief facts of this case are as follows: "a) On 8th August 2005, the Respondent No. 1 invited the bids for supply of 90 CT scan machines for the Regional Diagnostic centers in the State of Madhya Pradesh on the basis of total "all inclusive lump sum price." According to the bid document, sealed bids were asked to be submitted in "Single Stage Two Bids system", i.e. Techno Commercial Bid (Unpriced) and the Price Bid and the bidders were also required to furnish a bid security for Rs. 22, 50,000 along with the bid in the form of Account Payee Demand Draft in favour of respondent NO.1 from any nationalized bank payable at NOIDA. b) On 20th August 2005, the petitioner, M/S Siemens Limited, wrote a letter to the respondent no. 1 and sought certain clarifications and on 30th August 2005, the Respondent No. 1 replied to the petitioner"s letter dated 20th August 2005. c) On 30th August 2005, the petitioner, on receiving the clarifications from the Respondent No. 1 submitted its Techno Commercial bid and its Price Bid. d) On 10th September 2005 the Respondent No.1 opened the Techno Commercial bid in the presence of the representatives of both the petitioner and the Respondent No. 3. e) On 10th October, 2005 the respondent No. 1 wrote a letter to the petitioner asking it to confirm that all the terms and conditions stipulated in the Invitation for Bids (hereinafter referred to as the IFB) dated 8th August 2005 are acceptable to the petitioner without any deviation and on 10th October 2005, the petitioner replied to the letter of the Respondent No. 1 confirming that all the terms and conditions stipulated in the IFB were dated 8th August 2005 were acceptable to the petitioner. f) On 27th October 2005, the respondent No. 1 wrote another letter to the Petitioner asking to confirm technical aspects in respect of the equipments being offered by it against the IFB dated 8th August 2005 and on 28th October 2005 the petitioner gave necessary clarifications as sought for by the Respondent no. 1 through its letter dated 27th October 2005. g) On 2nd November 2005, the respondent no. 1 wrote another letter to the petitioner and sought further clarifications with respect to the equipment offered by the petitioner and on 7th November 2005 the petitioner replied to the letter and the clarifications sought by the respondent no. 1. h) On 7th November 2005, the petitioner received a letter whereby the respondent sought to extend the date of the clarification sought by the respondent no. 1. i) After the petitioner visited the website of the respondent No. 3 it came to the petitioner's notice that the machine quoted by the Respondent No.3 did not meet the standards specifications of the requirements of the bid and that the Respondent No.3 had materially deviated from the same and therefore on 23rd March 2006 the petitioner addressed a communication to the Respondent No.1 with a copy marked to the Respondent No.2 indicating the material deviations in the techno-commercial bid of the Respondent No.3. j) On 17th April 2006, the petitioner received a letter from respondent no.1 inter-alia informing the petitioner to be present on the opening of the price bid which supposed to be held on 9th April 2006. k) On 19th April 2006, the respondents no. 1 and 2 opened the price bid of the respondent No.3 which was lower than the bid of the petitioner company. It is against this action of the respondents no.1 and 2 that the present writ petition has been filed."
(3.) The learned Senior Counsel for the petitioner Mr. Sandeep Sethi submitted as follows: a) The process by which the respondents no.1 and 2 have ignored the material deviations and are trying to award the contract to the respondent no.3 is violative of Article 14 and 19 of the Constitution in as much as the petitioner is being discriminated for adherence to its tender conditions which the respondent no.3 knowingly and willfully to comply with. b) The tender specifications for a Dual C.T. Scanner, which is a health related product, annexed with the bidding documents are mandatory and go to the root of the contract therefore, no material deviations is permissible while awarding the contract qua such health related products to any of the parties. c) Clause 5(a)(iii) and (iv) of Instructions to Bidders (hereinafter referred to as the "ITB") state that in the event there being any deviation to technical specifications, the same should be set out very clearly which was not done by the respondent no.3 in the instant case and therefore, the bid of the respondent no.3 will not meet with the technical requirements and cannot be allowed to pass through. Clause 5(a)(iii) and (iv) reads as follows: "5. DOCUMENTS COMPRISING THE BID: The two-part Bid, that is, Technocommercial bid and Price bid prepared by the Bidder shall comprise the following: a) Technocommercial Bid (unpriced bid): This should interalia include the following: (iii) Statement of Deviations parameterwise from Tendered Commercial conditions, if any; (iv) Statement of Deviations parameteriwse tendered Technical specifications if any." d) Clause 17.4 of the ITB states that it is mandatory on the respondent no.1 to determine the 'substantial responsiveness' of each bid to the bid document and Clause 17.5 of the ITB states that the bid is not substantially responsive, the same will be rejected by the respondent no.1. Clause 17.4 and 17.5 of the ITB read as follows: "17.4 Prior to the detailed evaluation, pursuant to ITB Clause 18, the Purchaser will determine the substantial responsiveness of each bid to the bidding documents. For purposes of these Clauses, a substantially responsive bid is one which conforms to all the terms and conditions of the bidding documents without deviations from or objections or reservations to critical provisions such at those concerning Performance Security (GCC Clause 6) Warranty (GCC Clause 26). Force Majeure (GCC Clause 17). Applicable law (GCC Clause 22) and Taxes and Duties (GCC Clause 24) will be deemed to be material deviation. The purchaser's determination of a bid's responsiveness is to be based on the contents of the bid itself. 17.5 In normal circumstances if a bid is not substantially responsive, it will be rejected by the purchaser." e) Clause 20 .1of the ITB states that the purchaser shall award the contract to a successful bidder whose bid has been determined to be techno- commcercially acceptable and lowest and therefore, non-compliance of the technical requirement rendered the bidding party incapable of consideration. Clause 20 .1of the ITB reads as follows: "AWARD CRITERIA Subject to Clause 22, the purchaser will award the contract to the successful Bidder whose bid has been determined to be techno-commercially acceptable and lowest, provided further that the Bidder is determined to be qualified to perform the contract satisfactorily." f) The undertaking given by the bidder in the Bid Form that it accepts all the technical and technocommercial terms and conditions stipulated in the Tender document without deviations estoppal on the respondent no.3 for bid for a machine which does not meet such technical specifications. g) The repeated clarifications sought for by the respondent no.1 by the petitioner form time to time with respect to technical specifications and the petitioner's adherence to the same reiterates the mandatory nature of the technical and technocommercial specifications stated in the tender document. h) The bid submitted by the respondent no.3 is Hi-Speed Cte Dual CT Scanner System and the following are its technical specifications: (I) It has a Gantry Aperture of only 65 cm whereas Clause 1(i) of the Tender document states that the Gentry Aperture should be at least 70 cm, thus making the bid of the respondent no.3 technically incompetent and the Gantry Tilt of the product bid by respondent no.3 is +/- 20 degrees, whereas Clause 1(ii) of the Tender document requires that the Gantry Tilt should be at least +/- 25 degrees, thus, making the bid of the respondent no.3 technically incompetent. Further, a 20 degree tilt has limitation qua Coronal Scanning, Spine Studies and PNS Studies making the same incompatible in so far as the requirements of the respondent no.1 are concerned. (II) The KV ranges bid by the respondent no.3 is in the range of 120 to 140 KV, whereas Clause 3 (v) of the Tender specifications requires that the selection of KV ranges should be between 80-130 KV, thus, making the bid of the respondent no.3 technically incompetent. (III) The CTE Dual Machine bid by the respondent no.3 has a Spatial resolution of 10LP/cm @ 5% MTF and in Spiral scans and 13.3 LP/cm @ 0% MTF in Axial scans, whereas Clause 9(i) of the Tender specifications requires that the Spatial resolution should be greater than 14 LP/cm mentioning about the Modulation Transfer Function, thus making the bid of the respondent no.3 technically incompetent. (IV) The bid submitted by the respondent no.3 with respect to its CTe Dual Machine has a minimum scan time for 360 degree rotation as 'one second' whereas Clause 10 (ii) read with Clause 10 (i) of the tender specifications requires that the Scan time for spiral mode 'sub second' and the time for rotation of function mode may be specified. The specification of the sub second has admittedly not being catered to in the machine bid of the respondent no.3 thus making the bid of the respondent no.3 technically incompetent. i) The petitioner has a legitimate expectation of being considered in a just a fair manner and in accordance with the principles of law and all actions of the respondents no.1 and 2 in opening the price bid of a technically incompetent bidder is violative of such principle of fairness and, therefore, liable to be struck down. j) The respondents no.1 and 2 have breached the principles of natural justice since the petitioner in spite of informing the respondents no.1 and 2 of the technical incompetence of the respondent no.3 was not informed as to why and under which circumstances the respondent no.3 was considered for awarding the contract in issue. k) The bid documents does not give any power of relaxation to the respondents no.1 and 2 and thus they are bound by the tender specifications quoted by them. l) The actions of the respondents 1 and 2 in not rejecting the technocommcercial bid of the respondent no.3 in spite of the such bid having major technical deviations is indicative or legal malice or malice in law on part of the respondents 1 and 2 and such act has resulted in substantial prejudice and irretrievable injury to the petitioner since the petitioner strictly conformed to the bid conditions and submitted its price quotation accordingly. Thus, the action of the respondent no.1 and 2 vitiated on all the three material grounds, i.e., arbitrariness, hostile discrimination and mala- fide.";


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