Orissa High Court Upholds Tender Award | Finds No Irregularity In MSME Exemption Or Technical Evaluation
Isabella Mariam
The High Court of Orissa Division Bench of Justice K.R. Mohapatra and Justice Sanjay Kumar Mishra dismissed a writ petition challenging the technical qualification and subsequent award of contract in a public tender process. The Court held that there was no illegality or arbitrariness in the award of the contract and found the objections raised by the petitioner to be without merit. The Bench concluded that the technical and financial evaluations were conducted as per the tender conditions and granted no relief to the petitioner.
The writ petition was filed by a joint venture (JV) comprising M/s Balaji Solar Systems and M/s Unicorn India Private Limited, who participated in a public tender issued by the Directorate of Drinking Water and Sanitation, Panchayati Raj Department, Government of Odisha. The tender pertained to the design, supply, installation, testing, and commissioning of Solar PV Integrated Dual Pump based Water Supply systems in Nuapada and Phulbani divisions (Package-VI), along with maintenance for five years. The petitioner was declared L3 in the financial bid summary, while the L1 position was secured by another JV, M/s Ajay Infra and Construction Private Limited-M/s Jagdish Prasad Agrawal.
The petitioner challenged the technical qualification of the L1 bidder, alleging multiple discrepancies: an incorrect bid identification number in the bank guarantee submitted as bid security, errors in the Joint Venture Agreement, exemption from EMD despite no formal claim, submission of a defective turnover certificate, and delay in submitting Performance Security and Additional Performance Security.
Specifically, the petitioner argued that the bid security provided by the L1 bidder incorrectly stated the bid identification number as EIC/RWSS-65_VI/22-23 instead of the actual EIC/RWSS-46_VI/2023-24. Additionally, the petitioner pointed out that the date mentioned in the security predated the issue date of the RFP.
Further, the petitioner claimed that the L1 JV’s joint bidding agreement erroneously identified the bid ID, and asserted that although the L1 bidder submitted an MSME certificate, it failed to separately claim exemption from furnishing the EMD. The turnover certificate submitted by the L1 bidder was alleged to be fraudulent, as it conflicted with another certificate issued by the same chartered accountant.
The petitioner also argued that the L1 bidder failed to submit the Performance Security and Additional Performance Security within the time prescribed under the RFP. According to the petitioner, the MCC (Model Code of Conduct) in place for the 2024 General Elections did not bar submission of such securities, and thus, the delay was unjustified.
In defense, the L1 bidder contended that the error in the bid identification number in the bank guarantee was a clerical error by the bank and that the work description was correctly mentioned. It further argued that both members of the JV had submitted valid MSME/UDAYAM certificates, qualifying them for EMD exemption under Clause 2(c) of the RFP, which did not mandate a separate exemption application.
Regarding the turnover certificate discrepancy, the L1 bidder stated that the conflicting certificate was from a previous bid by one of the JV members and not part of the present bid. The turnover certificate relied upon in the present bid was verified and accepted by the Technical Evaluation Committee.
The L1 bidder also explained that the delay in submitting the PS and APS was due to the MCC, which restricted execution of government contracts. The bidder submitted a letter to the Tender Inviting Authority requesting time extension and furnished the required securities after the MCC was lifted. This was accepted by the authority.
The State Government supported the L1 bidder’s submissions and confirmed that all actions taken were in conformity with the RFP and applicable policies.
The Court observed, "Only because the Opposite Party No.4 had furnished the bid security in the form of bank guarantee, which was stated to be a defective one, it could not have been assumed that it was required to furnish EMD. When the Opposite Party No.4-JV, being MSMEs, are exempted from payment of EMD, furnishing of EMD being defective one, does not render it disqualified in the technical bid."
Regarding the Joint Venture Agreement, the Court noted, "Save and except the digit '45' in place of '46', rest of the bid particulars were correctly stated in the Joint Bidding Agreement. The same does not significantly affect the technical qualification or eligibility of Opposite Party No.4."
On the issue of EMD exemption, the Court stated, "Clause-2(c) itself makes it clear that the MSEs and Start-ups are exempted from payment of EMD. In support of his case, the Opposite Party No.4 filed MSME/UDAYAM Certificates of both the members of the JV. Thus, in our considered opinion, filing of MSME/UDAYAM Certificates of both members of the JV is sufficient for granting exemption."
Rejecting the claim of waiver by the L1 bidder, the Court held, "The Opposite Party No.4 by its conduct intended an exemption of EMD, but it had submitted the bid security along with tender documents... the Opposite Party No.4 never waived its right of claiming exemption of EMD."
Addressing the issue of the turnover certificate, the Bench recorded, "The turnover certificate dated 19th May, 2022 has no bearing on the present case as it was not part of the bid documents. The turnover certificate dated 3rd September, 2023 was filed along with the instant bid documents and was taken into consideration by the TIA."
Regarding the delay in submission of PS and APS, the Court remarked, "Due to imposition of the MCC from the very next day [after LoI], the Opposite Party No.4 made a request to the TIA to furnish PS and APS within seven days from the date of lifting of the MCC. The request... was accepted by the TIA. We find no infirmity or illegality on the part of the TIA in accepting the request."
The Court concluded the matter with the following directive: "In view of the discussions made above, we are of the considered opinion that the writ petition merits no consideration and is accordingly dismissed. In the facts and circumstances, there shall be no order as to costs."
The Court further clarified, "Before parting with the judgment, we make it clear that we have not dealt with all the case laws cited by learned counsel for the parties and have only referred to those relevant for just adjudication of the case."
Advocates Representing the Parties:
For the Petitioners: Mr. Goutam Mukherjee, Senior Advocate, assisted by Mr. Sidhant Dwibedi, Advocate
For the Respondents: Mr. Debasis Tripathy, Additional Government Advocate
Mr. Prabodha Chandra Nayak, Advocate
Case Title: M/s Balaji Solar Systems and Another vs. State of Odisha and Others
Case Number: W.P.(C) No.13631 of 2024
Bench: Justice K.R. Mohapatra and Justice Sanjay Kumar Mishra
[Read/Download order]
