IMAM BUX BALOCH, J.---Through this Appeal, the appellant impugns the order dated 14-10-2011 passed by the learned Single 'Judge of this Court in Suit No,1052 of 2011 while dismissing C.M.A.
No,8806 of 2011.
2. The appellant has filed Suit No,1052 of 2011 along with an application being C.M.A. No,8806 of 2011 for injunction. The appellant is manufacturer of Steel Pipes that are used for transmission of gas, oil and water. The appellant further stated that it is capable of manufacturing pipes of different dimensions and qualities as used in the various industries. It is also stated that the appellant is the only steel pipe manufacturer to have manufactured pipes of more than 100 inches diameter in Pakistan. It has dual manufacturing mills, which enables the appellant to produce multiple diameters, maximizing efficiency and throughput. It is further asserted that the appellant Company has been providing Steel pipe to quality conscious consumers like Sui Northern Gas Pipelines Ltd., Sui Southern Gas Pipeline Ltd. Respondent No,1, CDA, RDA, KWSB, Pakistan Petroleum Ltd., Pakistan State Oil, Pak Arab Refinery Ltd. And Fauji Oil Terminal. It is further stated that the respondent No,1 published a Tender Enquiry No,SSGC/FP/3902 as Line Pipe 12.750" OD X 0.281 WT API. 5L Grade X-60 Bare (PSL-2) Qty=70300 Meter in Daily Dawn and invited bids under two envelops bidding system i,e, sealed technical offer and sealed, financial offers which were to be submitted in separate envelops. Technical offers to be opened and evaluated first and that financial offers of only technically compliant bidders would be opened on a later intimated date in presence of bidders representative. It is further stated that initially the date of submission of bid was 6-5-2011 at 1500 hours but was subsequently extended by another publication in Daily Dawn dated 5-5-2011 to 20- 5-2011 at 1500 hours. The advertisements are available at page 169 Annexure "I" and 171 Annexure "I/1". It is stated that appellant and respondents Nos.5 to 7 submitted their respective bids against impugned Tender. It is further stated that on 20-5-2011 when the technical bid was opened it was confirmed that the respondents Nos.5 and 6 have not submitted any API Specification, Q1 from American Petroleum Institute, USA along with their technical bid which is mandatory requirement and only the appellant and respondent No,7 were technically eligible to bid/pre-qualified for the impugned Tenders as per law. It is stated that the appellant representative protested/objected to entertaining and opening the bids documents submitted by the respondents Nos.5 and 6 as they were not qualified in terms of clauses 7 and 9 of Special Terms and Conditions of impugned tender documents as they failed to submit the API Specification Q1 Certificate. It is stated that amongst the eligible bidders the appellant's bid was the lowest when the financial bid was opened. It is further stated that the appellant also addressed a letter dated 11-8-2011 to respondent No,1 on the point of technical qualification requirement of API Q1 Certificates and evaluation process conducted by respondent No,1 but despite receipt of above letter no reply has been received from the respondent No,
1. It is also case of the appellant that legal notice also served on respondent No,1 dated 1.7-8-2011 through fax mail as well as TCS but have received no response, hence the appellant filed above suit along with C.M.A. No,8806 of 2011 for injective order. It is noted that after hearing the parties, the learned Single Judge rejected the said C.M.A.
3. We have heard learned counsel for the appellant and learned counsel for the respondent No, 1.
This Appeal was entertained on 19-10-2011 and an order was passed to issue Notice to respondents as well as DAG for 21-10-2011 to be taken up at 10-00 a.m. It seems that notices have been issued against all the respondents on 20-10-2011 but the record is silent about service upon respondents Nos.5 and 6. It was pointed out that these respondents have not appeared before the learned Single Judge. Learned counsel for both the parties insisted for hearing of the appeal. Learned counsel for the appellant contended that the appellant had from time to time participated in various Tenders which were floated by respondent No,1 Sui Southern Gas Co. Ltd. To meet its requirements for Steel Pipes. It is noted that earlier C.P. No,D-646 of 2009 was filed by the appellant and a consent order was passed on 23-6-2009 and that consent order had provided that in future the respondent No, 1 would invite Tenders on the basis of the single stage two-envelops system as per the relevant rules framed by the Public Procurement Regulatory Authority. In both the advertisements at pages 169 and 171, the Tenders description was as follows:-- FP/3902 E.O.R. AND F.O.B./C&F BASIS 6-5-2011 Line Pipe 12.750" OD X 0.281"
WT API 5L Grade X-60 Bare (PSL-2) (Qty = 70300 Meter)1500 Hrs (Under TWO Envelope bidding system i.e. Sealed Technical offer and Sealed Financial offers shall be submitted in separate envelops. Technical offers will be opened and evaluated first. Financial offers of only technically complaint bidders will be opened on later intimated date in presence of bidders representative)
FP/3880 ASSORTED VALUE 19-5-2011 11:00 Hrs FP/3902 F.O.R. AND F.O.B./C&F BASIS Line Pipe 12.750" OD X 0.281"
WT API 5L Grade X-60 Bare (PSL-2) (Qty = 70300 Meter)20-5-2011 15:00 Hrs FP/3882 Joint Coating Material 23-5-2011 11:00 Hrs
4. It is contended that at page 217 in clause 9 of Procurement of 12" X 0.281" wt MS Line-Pipe Tender Enquiry No,SSGC/LP-FP, Documents Establishing Eligibility of the Bidders and the Goods, bidder shall furnish their documents according to Rules 29 and 30 of the Public Procurement Rules 2004. He submitted that learned Single Judge has not considered such documents. He submitted that first technical bids are to be opened if technical offer is not found satisfactory then the financial bid is not to be considered, if technical bid found successful then the financial bids are to be considered.
During arguments learned counsel for the appellant made complaint that his bid was not accepted for the reasons that he was reluctant to pay extra amount to the officials of the respondent No,1 but at the same time he has not produced such proof in respect of his complaint.
He submitted that respondents Nos.5 and 6 having no qualification to participate in the bids as mentioned by the Single Judge in the impugned order at paragraph 8. It is contended on behalf of the appellant that respondents Nos.5 and 6 are Chinese companies and only having certificate from API that qualified them to manufacture Steel Pipes of 5L specification. He further contended that as per clause 9 of the Special Conditions, a technical qualified bidder had to hold Q1 Certification from API and that respondents Nos.5 and 6 having no such Certification which automatically disqualified them technically. He submitted that as bid made by appellant was lower and that the appellant had both the requisite technical and financial qualifications therefore, the bid of the appellant ought to have been accepted by the respondent No,
1. He further contended that letter dated 11-8-2011 and legal notice dated 17-8-2011 have been served on respondent No,1 on behalf of the appellant, but the respondent No,1 did not accept the appellant as successful bidder hence, the appellant having no other alternative remedy filed suit against respondent No,
1. He further contended that Tender documents override the publication/advertisement according to Rule 29 of Public Procurement Rules 2004. Learned counsel invited our attention to page 285 of the file and submitted that the appellant submitted its offer through a letter regarding Tender Enquiry No,SSGC/SC/3902 to the respondent No,1 and contended that the appellant stated that material will be manufactured by it as per applicable specification and that as per requirement of SSGC and the same will be as per API 5L (latest Edition) and will be free from oil and other contaminants. Learned counsel submitted that the learned Single Judge has not considered the true perspective of the case and that denial of interim relief to the appellant frustrated his whole suit.
5. On the other hand Mr. Asim Iqbal learned counsel for the respondent No,1 invited our attention to the Tender as advertised. His case was that the respondent No,1 required Steel Pipes had to be of the API 5L Grade. He submitted that Q1 Specification Certificate was not at all mentioned in the Tender Advertisement. He also referred to word "Bare as used in the Tender advertisement. It is submitted that it was an indication that the pipes had to be uncoated. He contended that Q1 Specification Certificate applied to coated pipes, which were not at all required for the purposes of the tender as advertised. He further contended that two Chinese companies were duly certified manufacturers of 5L grade of steel pipes. He submitted that Q1 Grade of pipes was entirely irrelevant for the purposes of tender. He further contended that the case of the appellant was meritless on the technical side as put forward by the appellant. Learned counsel further contended that bids of Chinese companies i,e, respondents Nos.5 and 6 which were substantially lower than the bids made by the appellant. According to learned counsel due to offer of Chinese companies i,e, respondents Nos.5 and 6, the respondent No,1 saved Rs, 8 Crors by accepting the bids of respondents Nos.5 and 6. Learned counsel contended that the appellant and respondent No,7 are local bidders but the respondent No,1 has accepted the bids of respondents Nos.5 and 6. And saved Rs, 8 Crors of the company. He lastly submitted that the appellant has no case on merits for interim relief and the learned Single Judge rightly dismissed the interim prayer.
6. Learned Judge while rejecting the C.M.A. No,8806 of 2011 has observed as under:--
7.
10. I have heard learned counsel as above and examined the record with their assistance. In my view, the record does not support the case put forward by the plaintiff that the two- envelope system was not followed in the instant case and both the technical and financial aspects of the bids were opened and examined simultaneously. Prima facie, it appears that the envelopes containing the technical bids were opened first and considered and it was only thereafter that the envelopes containing the financial asp'ects were opened and considered.
Insofar as the technical aspect of the bid is concerned, the grievance of the plaintiff appears to move within a narrow locus. It is focused on the issue of the Q1 certification by API. In effect, the issue raised requires a consideration and interpretation of the proper meaning of clause 9 of the special conditions already reproduced above. The first point that requires to be noted is that, as pointed out by learned counsel for the defendant No,1, the tender as advertised appears to relate only to the 5L grade "Bare" or uncoated steel pipes. The tender as advertised does not appear to relate at all to pipes of the Q1 grade, which can, for present purposes, be regarded as a "higher" grade of steel pipes. In my view, clause 9 is to be understood and applied in the context of the tender requirements as advertised. In my view, the terms of a tender document like the one at hand should be interpreted and understood by taking a purposive and commercial approach. The defendant No,1 though in the public sector, is nonetheless a concern that is supposed to run its operations on commercial terms. Quite obviously, the steel pipes sought to be acquired are required for the defendant's business, and therefore, their acquisition must be regarded in terms that make commercial and business sense. Since the pipes required by the defendant No,1 are of the 5L grade, it appears to me that the purpose of the said defendant would be served if the companies participating in the bid held an API certification that they are capable of manufacturing pipes of this grade. No purpose would seem to be served by requiring that they be certified also to manufacture the Q1 grade of pipes. In my view, an organization like the defendant No,1 would, for purposes of acquiring steel pipes, like to have as many bids as possible so that it has the widest range of potential suppliers to choose from. What purpose would be served by adding a limiting factor, namely the requirement of a Q1 certification, which would narrow the fill of possible bidders, given that steel pipes of this grade or type are not the subject-matter of the tender? It is also to be noted that the Public Procurement Rules, 2004 lay down certain general principles to be followed by procuring agencies in Rule 4, which provides as follows:-- "4. Principles of procurements.--- Procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency and the procurement process is efficient and economical."
It is quite clear that absent any special circumstances, the proper approach for any procuring agency to follow would be to have as many potential suppliers participating in the bidding process as possible. This is clear from the requirement that the procurement should bring "value for money" and that the process be "efficient". ("Value for money" is defined in Rule 2(1) as meaning the "best returns for each rupee spent in terms of quality, timeliness, reliability, after sales service, upgrade ability, price, source and the combination of whole-life cost and quality to meet the procuring agency's requirements".) Quite obviously, the smaller and narrower the pool of potential bidders, the less choice there is for the agency, and the more constrained are the options available to it.
11. In my view therefore, if two options are reasonably available to interpret and apply a provision in a bidding document like the one at hand, the one that results in a larger pool of bidders is to be preferred over one that is restricts the potential bidders to only a few participants. It is for this reason in particular why a literalist approach to interpreting and applying the bid documents is to be eschewed, and a purposive and commercial approach adopted. The interpretation sought to be placed by learned counsel for the plaintiff on clause 9 runs counter both to the letter and spirit of Rule 4 and also to the purposive approach that is most suited to the present circumstances. A literatist approach would, in my view, lead to a result that is not the advantage of, and may well be to the disadvantage of, the procuring agency, i,e, the defendant No,1. It could of course be argued that clause 9 means what it appears to say, and should be applied as it stands, and that taking a purposive approach may amount to second guessing the defendant No,1, which has after all chosen to draft clause 9 in the manner in which it stands. However, in my view, such a conclusion would be unwarranted and misplaced. In my view, the language of clause 9 does not admit to only one meaning i,e, the only asserted by learned counsel for the plaintiff. It is to be noted that both the general conditions and the special conditions themselves appear to be in some standard form that is utilized by the defendant No,1 and do not appear to have been specifically drafted for the purposes of the particular tender under consideration. In other words, it appears that the special conditions are intended to be applied to all types of tenders, and regardless of the grade of steel pipes required. In my view, therefore. The purposive approach would be better suited in correctly reflecting the intent behind the bid documents and properly meeting the requirements of the defendant No,1 namely that the maximum number of bidders should be able to participate in the bidding process, while ensuring that they should hold the necessary certification from API which authenticates and establishes that they are in fact able to manufacture the quality or grade of steel pipes actually required. It follows therefore, that in my view, in the case at hand and as presently relevant, all that a bidder had to show was that it held a certification from API that it could manufacture the 5L grade of steel pipe which was "Bare" i,e, uncoated. It is not in dispute that such certification was held by the plaintiff as well as the defendants Nos.5 to 7 and therefore, all of these parties were technically qualified to participate in the bid.
12. Insofar as the financial aspect of the bids is concerned, I have examined the documents relied upon by learned counsel for plaintiff on the one hand and learned counsel for defendant No,1 on the other. These can be little doubt that the bids made by the Chinese companies, and in particular, the defendant No,5, were substantially lower than the bid put in by the plaintiff.
Therefore, prima facie, even in respect of the financial aspect, the plaintiff would not appear to have any reasonable basis for asserting that it alone was duly qualified for the purposes of the tender.
13. In view of the foregoing, I am satisfied that the plaintiff has not been able to make out a case for interim injunctive relief. Accordingly, this application fails and is hereby dismissed.
7. We have considered the submissions of the learned counsel for the parties and with their assistance we have minutely gone through the case file. In our view the record does not support contentions raised by the learned counsel for the appellant. As regard contention of learned counsel for the appellant that two envelops system was not followed during bidding process simultaneously it appears that envelops containing the technical bids were opened first and considered and it was only thereafter that the envelop% containing the financial bids were opened and considered. As regards the contention of learned counsel for the appellant that Clause 9 Documents Establishing Eligibility of the Bidders and the Goods, the same was Applicable in case of coating Steel Pipes whereas the bid of FP/3902 having no such classification. . We have also noted that since Pipes required by the respondent No,1 are of 5L Grade and that the purpose of respondent No,1 would be served if the Companies participated in the bids held an API Certification that they are capable of manufacturing pipes of the said Grade. There was no necessity that the companies participating fn the bids shall have Certification of Q1 Grade of pipes.
8. From perusal of the Bid offered by appellant, which is available at Page 285 Annexure "H" of the file, it appears that the appellant has not mentioned API specification Q1 in his said bid.. The relevant portion of the bid is reproduced herein under:-- SUBJECT OF THE OFFER 1.1 DATA Steel Pipes Ind. (Pvt.) LTD. (DSPIL) is pleased to offer Sui Southern Gas Co., Ltd. (SSGC) on the basis of terms and conditions stipulated by this offer the goods in quality, assortment and quantity, hereinafter collectively called 'Goods' as described and specified below: 1.1.1 Manufacture of Steel Line Pipes as per API 5L (latest edition) and additional technical specs of SSGC.
1.1.2 Transportation Services, which include 1) 70,000 meters to Coating Plant, and 2) 300 meters to Khadeji with unloading, stacking and provision of wooden skids.
9. It is further pertinent to mention here that document available at page 311 Annexure "K", the title of document is Comparison Between Bidders. This document is made by appellant. We have perused the said document, which did not mention of API Specification Q 1. The same is reproduced herein under:-- COMPARISON BETWEEN BIDDERS DSPIL TENDER ID 312 SSGC TENDER INQU IRY SSGC/FP/3902 BID OPENING DATED19-7-2011 S. No. ITEMS WPE Quantity (Mtr)LOCAL BIDDERS DATA CRESCENT Price/Mtr Price/Ton Price/Mtr Price/Ton FOR- SadiqabadFOR- Sadiqabad (Inclusive of 2.5% SED)(Inclusive of 2.5% SED)
1 323.9 x 7.1 (od x wt) mm- Grade API5LX60, MPSL-2 BARE55.47 70,300 Rs.8,916.97 Rs.160,753.02Rs.9,200.00Rs.165,855.42
10. ITEMS WPE Quantity No, (KG/M) (Mtr) LOCAL BIDDERS DATA CRESCENT Price/Mtr Price/Ton Price/Mtr Price/Ton FOR-Sadiqabad FOR-Sadiqabad' (Inclusive of 2.5% SED) (Inclusive of 2.5% SED)
323.9 x 7.1 55.47 70.300 Rs,8.916.97 Rs 160,753.02 Rs,9,200.00 Rs,165,855.42 (ad x WI) mm-Grade API5LX60. MPSL-2 I3ARE 10. We have examined the documents as relied upon by both the learned counsel, we are of the view that the bidding process initiated by the respondent No,1 was not violative of the Public Procurement Rules 2004 as the bid of Chinese companies was the lowest one and the respondent No,1 rightly accepted such bid. We have also examined order passed by learned Single Judge, we found that the same is well reasoned and that we found no irregularity or illegality in the impugned order, which calls interference by this Court. Consequently we have dismissed the appeal by our short Order dated 21-10-2011 and these are the reasons for the same.