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2000 DIGILAW 367 (ORI)

GYANENDRA NATH MOHAPATRA v. STATE OF ORISSA

2000-07-20

L.MOHAPATRA, PRADIPTA RAY

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JUDGMENT PRADIPTA RAY, J. - The petitioners, two, Class - 'A' Contractors empanelled by the Cuttack Development Authority (in short 'C.D.A.') for execution of various works under C.D.A. have filed this writ application questioning the legality and propriety of awarding the job of development of land and infrastructure in Sector-10 to K.C.S. Private Limited to the me opp. party No. 4. The petitioners have stated that the said development works in Sector-10 have been awarded to opp. party No. 4 without inviting any tender, without complying with the prescribed procedure at rates higher than the rates the petitioners would have offered. The petitioners along with other contractors were separately awarded the difference development work in other sectors, but the C.D.A. did not given them any opportunity to submit their offers for execution of the development works in Sector-10. The C.D.A. invited only the opp. party No. 4 to submit his offer and through negotiation entrusted the development works of Sector-10 to opp. party No. 4. The petitioners have alleged that special favour has been shown to opp. party No. 4 for extraneous reasons and that the opp. party No. 4 was even exempted from payment of security money for undertaking the development works of Sector-11. The C.D.A. and the opp. party No. 4 have filed separate counters placing all the materials facts before this Court in justification of entrusting the development works to opp. party No. 4. The State Government has provided 1800 acres of land to the C.D.A. for setting up a new township thereon and executing the Bidanasi Housing Scheme. The land provided by the Government was undeveloped and without any infrastructure. The C.D.A. divided the area into several sectors and took-up development work phase-wise, although the entire Bidanasi Housing Scheme is an integrated and inter-connected Scheme. Development of Sector 6 which is close to the existing city was taken up first. The said development work of Sector-6 was entrusted to about 30 to 40 Contractors including the petitioners for execution of different types of development works. It has been stated that the C.D.A. faced enormous problems in completing the development of Sector 6 and found it very difficult to coordinate the works of different Contractors. It was also found that the quality of works different considerably creating adjustment problems. Failure of one contractor in a particular field or area led to a chain-reaction and disruption. It has been stated that the C.D.A. faced enormous problems in completing the development of Sector 6 and found it very difficult to coordinate the works of different Contractors. It was also found that the quality of works different considerably creating adjustment problems. Failure of one contractor in a particular field or area led to a chain-reaction and disruption. The completion of development works in Sector 6 was so delayed that land could not be made ready for handing over possession to the enlisted buyers within the schedule time. In view of enormous difficulties, the C.D.A. ultimately decided to engage big contractors of national repute with required technical and financial capability to take up the entire development work of a particular phase or phases. In pursuance of such decision the C.D.A. published advertisement in reputed National and State Dailiers inviting Developers of national repute having experience in execution of similar development projects worth Rs. 5 crores or more for being short-listed and empanelled About 9 Developers responded and out of them six Developers including opp. party No. 4 were empanelled by the C.D.A. The petitioners who have neither the experience nor financial capacity to take up such huge work did not and/or could not apply. Offers were invited from the six empanelled Developers including opp. party No. 4 for execution of the development works of Sectors 8 and 11 The Tender Committee comprising well-experienced Engineers and technical persons considered all aspects and decided to award the work to opp. party No. 4. The said decision was also approved and accepted by the State Government. Necessary agreement was entered into and the development work commenced from December 31, 1997. The opp. party No. 4 completed the development of Section 8 to the fullest satisfaction of C.D.A. The development works of Sector 11 could not be taken up in time inasmuch as C.D.A. could not make the land readily available. As commencement of development works in Sector 11 got delayed due to inability of C.D.A. the opp. party No. 4 made a request to defer the payment of security money for the said work in Sector 11 till the land was made available. The said request was accepted and after the land for Sector 11 became available, the opp. party No. 4 was asked to deposits the security money. In fact opp. party No. 4 made a request to defer the payment of security money for the said work in Sector 11 till the land was made available. The said request was accepted and after the land for Sector 11 became available, the opp. party No. 4 was asked to deposits the security money. In fact opp. party No. 4 at once deposited the security money before the work order in respect of Sector 11 was issued. It has been stated in the counter that the work of Sector 11 is nearing completion to the satisfaction of the C.D.A. In the mean time, the land for Sector 10 became available and the C.D.A. decided to commence the works of development in Sector 10 without any unnecessary delay. As the C.D.A. was satisfied and developed full confidence in O.P. No. 4 on the basis of its performance in Sectors 8 and 11, it decided to obtain offer from O.P. No. 4 first before inviting any tender or offer from others for the development works of Sector 10. The C.D.A. entered into negotiation with the opp. party No. 4 and ultimately entrusted the said work of development to opp. party No. 4 at a rate of 24% above schedule-rate of 1998. The petitioners have alleged that they along with a few other contractors have formed a consortium and they would have offered a lower rate than that of opp. party No. 4 if open offers were invited by the C.D.A. The petitioners have further alleged that the opp. party No. 4 has been in fact engaging contractors like the petitioners as sub-contractors, for undertaking different development works and practically acting as a middle man and earning huge profits without doing any work itself. According to the petitioners, there is no reason for not fact being done by them. If the work was entrusted to the petitioners, the expenditure would have been considerably less. In justification of its decision to award the development work of Sector-10 to opp. party No. 4 without inviting any tender from others, the C.D.A. has advanced the following reasons : (a) The opp. party No. 4 executed the development works in Sectors 8 and 11 most satisfactorily and have earned confidence of the C.D.A. (b) By successively executing the development works in Sectors 8 and 11 the opp. party No. 4 without inviting any tender from others, the C.D.A. has advanced the following reasons : (a) The opp. party No. 4 executed the development works in Sectors 8 and 11 most satisfactorily and have earned confidence of the C.D.A. (b) By successively executing the development works in Sectors 8 and 11 the opp. party No. 4 has already become acquainted with the nature of development works and connected problems and has gained experience and expertise. (c) The machineries, tools, implements and the labourers engaged by opp. party No. 4 for development works of Sectors 8 and 11 are ready at hand and opp. party No. 4 is in a position to undertake the work immediately at a reasonable costs. (d) The opp. party No. 4 is already an empanelled Contractor for taking up such big and complex job and the rate offered by it being very reasonable, the C.D.A. has decided to entrust the work to opp. party No. 4, a tested and trusted contractor. Considering the materials placed and disclosed before us, we do not find that the award of development work of Sector 10 to opp. party No. 4 is in any way against the interest of C.D.A. or any other public interest. Admittedly the petitioners individually have no financial capacity to execute such development work worth more than Rs. 6 crores. Even if offers were invited, the petitioners themselves were not entitled to apply. Thus, the petitioners have not suffered any loss or prejudice. Engagement of Sub-Contractors is also an accepted practice in executing of big projects. In such case, the principal contractor remains solely responsible for the job and the authorities can hold the principal contractor liable for any default or delay. The sub-contractors also get benefit of technical guidance and other supports from the principal contractor. It has been pointed out by the Supreme Court in Air India Limited v. Cochin International Airport Ltd. and others ( AIR 2000 SCW 351 = 2000 (1) Arb. LR 554 (SC)), that : ".... Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. LR 554 (SC)), that : ".... Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it come to a conclusion that overwhelming public interest requires interference, the Court should intervene." However, it is an accepted principle that the public authorities normally should invite tenders/offers from duly qualified contractors and after consideration of the offers received should select some one keeping the relevant factors and public interest in mind. System of inviting offers from qualified contractors is a safeguard against favouritism and arbitrariness. When offers are invited from qualified persons, there always remains the possibility of receiving competitive offers. In the facts and circumstances, narrated above, we are not inclined to interfere with the decision of the C.D.A. to award the development works of Sector 10 to the opp. party No. 4. At the same time we observe that unless any extraordinary situation exists, the C.D.A. should not invite offers from a single contractor only, but should invite offers from the qualified and competent contractors before awarding a contract. The writ application is disposed of with the above observations. I agree. Writ application disposed of.