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2001 DIGILAW 994 (PAT)

Shristi Developers Private Ltd. v. State Of Bihar

2001-10-19

CHANDRAMAULI KR.PRASAD

body2001
Judgment 1. The attempt of the petitioner, in this writ application, is to scuttle the grant of contract for improvement of riding quality of National Highway No. 83 from KM 2 to 10 awarded by respondent no. 4 the Chief Engineer to respondent no. 7 M/s Roy Construction. 2. The Executive Engineer, National Highway Division, Dehri-On-Sone issued advertisement in daily newspaper dated 30.4.2001 (Annexure-3) inviting tenders for the aforesaid work at the estimated cost of Rs. 1,84,91,791/-, for which the last date for submission of tenders was 10.5.2001. According to the tender notice, work was to be allocated to a contractor who possesses specified standard equipments as prescribed by the Surface Transport Department of the Government of India. Contractors were further required to possess computerised Hot Mix plant, paver, Road Roller, Bitumen Boiler, Bitumen Sprayer, Loader, Taper etc. in sufficient quantity. The tender notice further indicated that work shall be allocated to a contractor whose Hot Mix plant is within 40 KM from the place of the proposed work. Tenderers were further required to file recent Contract Registration Certificate, No Objection Certificate from the Commercial Taxes and the Income Tax Departments Character Certificate and current Labour Licence. In pursuance of the aforesaid tender notice, petitioner as also respondent no. 7, besides others, submitted their offers. 3. On the basis of the information and the rates offered by the tenderers, a check-list was prepared. According to the check-list (Annexure-4), the rate of respondent no. 7 was 4 per cent above the estimated cost whereas that of the petitioner was 9 per cent above the estimated cost. As regards the plants and machineries, according to the check-list, respondent no. 7 possessed mini hot mix plant, road roller, whereas the petitioner possessed hot mix plant, Bitumen boiler, paver, loader and truck. In the check-list, against the column, commercial taxes registration and clearance certificate, nothing has been indicated against respondent no. 7. In the recommendation column of the check-list, the Executive Engineer has stated that in case the petitioner is prepared to reduce his rate to 4 per cent or below the estimated cost, work may be allocated to it. The recommendation of the Superintending Engineer is also in the same terms. However, the Chief Engineer in its recommendation, has stated that the work of establishment of plant by respondent no. 7, is close to the site but the same may take time. The recommendation of the Superintending Engineer is also in the same terms. However, the Chief Engineer in its recommendation, has stated that the work of establishment of plant by respondent no. 7, is close to the site but the same may take time. But there is no work load on the plant of the petitioner and Vikash Construction, another tenderer, but their offer is above 9 per cent of the estimated cost and as such, both may be called for discussion and be asked to submit their offers in sealed cover and work may be allocated to one of them whose offer is the lowest. 4. It seems that respondent no. 7 made claim that it possessed plant and machinery and in that connection, its site was inspected by the Executive Engineer, the Assistant Engineer and a Junior Engineer and a report was submitted by the Executive Engineer to the Superintending Engineer dated 30th July, 2001 and in the report, the Executive Engineer has stated that various plants and machineries were found near the construction site but the computerised control Panel pertaining to Hot Mix plant, Loader tipper and Paver finisher, were not found at the site and he apprehended that delay may occur in case the contract is awarded to respondent no. 7. The site was also inspected by the Engineer-in-Chief cum Additional Commissioner and the plants and machineries were found to be in order of operation at the time of his inspection. 5. As stated earlier, the offer of the petitioner was 4 per cent above the estimated cost but by letter dated 3.7.2001, petitioner wrote to the Chief Engineer that it is prepared to reduce its offer to 4 per cent above the estimated cost. Further by communication dated 11.7.2001 (Annexure-7), petitioner as also another tenderer, i.e. M/s Vikash Construction, were informed that the decision on their tenders is to be taken by the Tender Committee on 14th of July, 2001. The petitioner was required to be present on the said date along with original papers. However, according to the petitioner, no meeting was held on the said date and the high power Tender Committee which consisted of the Commissioner-cum-Secretary of the Road Construction Department, Engineer-in-Chief, Chief Engineer and other senior officers decided to award the contract to respondent no. The petitioner was required to be present on the said date along with original papers. However, according to the petitioner, no meeting was held on the said date and the high power Tender Committee which consisted of the Commissioner-cum-Secretary of the Road Construction Department, Engineer-in-Chief, Chief Engineer and other senior officers decided to award the contract to respondent no. 7 and in pursuance thereof, by the impugned communication dated 4.9.2001 (Annexure-1), work has been allocated to respondent no. 7 at 4 per cent above the estimated cost. 6. Mr. Basudeo Prasad, learned Senior Advocate appearing on behalf of respondent no. 7 raises a preliminary objection as regard to the maintainability of the writ application. He submits that the work in question is being done on behalf of the Government of India and according to the decision of the Surface Transport Ministry of the Government of India, the permissible limit of acceptance of the offer is 5 per cent above the estimated cost and the offer of the petitioner being 9 per cent above the estimated cost, it has no legal right to get the contract and as such, the present writ application cannot be entertained. In support of his submission, Shri Prasad has placed reliance on a Constitution Bench judgment of the Supreme Court in the case of Dr. Rai Shivendra Bahadur V/s. Governing Body of the Nalanda College, Bihar Sharif and others, reported in AIR 1962 SC 1210 and my attention has been drawn to the following passage from the said judgment : "XXX In order that mandamus may issue to compel the respondents to do something it must be shown that the Statutes impose a legal duty and the appellant has a legal right under the Statutes to enforce its performance. It is, however, wholly unnecessary to go into or decide this question or to decide whether the Statutes impose on the Governing Body of the College a duty which can be enforced by a writ of mandamus because assuming that the contention of the appellant is right that the College is a public body and it has to perform a public duty in the appointment of a Principal, it has not been shown that there is any right in the appellant which can be enforced by mandamus xxx." 7. Mr. Mr. Ram Balak Mahto, learned Senior Advocate, however, appearing on behalf of the petitioner contends that the offer of the petitioner was 9 per cent above the estimated cost but by letter dated 3rd of July, 2001 (Annexure-6), it had reduced its offer and stated that it is prepared to take work at the rate above 4 per cent of the estimated cost and as such, it cannot be said that the petitioner was not eligible for award of the work. Mr. Mahto further submits that there is no decision that contract cannot be granted to the tenderer whose offer is 5 per cent above the estimated cost and the power to award contract is conferred on the Chief Engineer to a tenderer whose offer is upto 5 per cent above the estimated cost. Learned counsel has drawn my attention to the tender notice and contends that, in that, nothing has been stated about the highest rate which a tenderer can offer and in case offer is above certain rate same shall be rejected. 8. Having appreciated the rival submission, I find substance in the submission of Mr. Mahto. Tender notice dated 30.4.2001 (Annexure-2) nowhere provides about the limit of the offer which a tenderer can make. True it is that the Engineer-in-Chief has been conferred power to grant contract to a tenderer whose offer is upto 5 per cent above the estimated cost but from that, it cannot be inferred that same is eligibility clause for grant of contract. That being the position, the writ application cannot be thrown out on that ground and the authority relied on by Shri Prasad in support of his submission, is clearly distinguishable. 9. Here I must answer on ancilliary submission of Shri Mahto. He contends that merely the fact that the offer of petitioner was higher, same did not preclude the respondents from accepting its offer. He points out that Rule 238 of the Bihar Financial Rules contemplates acceptance of lowest tender usually but that itself shall not prohibit the respondents from accepting the petitioners tender. Rule 238 reads as follows : "Usually the lowest tender should be accepted, unless there is some objection to the capability of the contractor the security offered by him or execution of former work. Whenever the lowest tender for projects costing Rs. Rule 238 reads as follows : "Usually the lowest tender should be accepted, unless there is some objection to the capability of the contractor the security offered by him or execution of former work. Whenever the lowest tender for projects costing Rs. 500/- and above is not accepted by the authority accepting the tender he should immediately communicate the reasons for the same to his immediate superior authority confidentially for approval. At the same time the acceptance or the rejection of tenders is left entirely to the discretion of the officer to whom the duty is entrusted and no explanation can be demanded of the cause of rejection of his offer by any person making a tender." From a plain reading of the aforesaid rule it is explicit that usually lowest tender shall be accepted but very use of the expression usually in the rule makes it clear that the State Government is not bound to accept the lowest tender in all circumstances. The right to refuse the lowest tender and accept the higher tender is always available with the Government but there has to be overriding reasons for the same. In the absence thereof no prudent person including the State Government would like to pay higher price for a work, which can be got done at a lower price. However, this in no way advances the case of the petitioner. 10. Having over-ruled the preliminary objection, now I revert to the merits of the case. Shri Mahto submits that respondent no. 7 does not possesses the plant and machinery which a tenderer was required to possess in terms of the tender notice. In this connection, he has drawn my attention to the check-list and contends that respondent no. 7 possesses Mini Hot Mix plant and not the Hot Mix plant. Shri Mahto submits that respondent no. 7 does not possesses the plant and machinery which a tenderer was required to possess in terms of the tender notice. In this connection, he has drawn my attention to the check-list and contends that respondent no. 7 possesses Mini Hot Mix plant and not the Hot Mix plant. In support of his submission, he has placed reliance on a judgment of the Supreme Court in the case of Ramana Dayaram Shetty V/s. The International Airport Authority of India and others, reported in AIR 1979 SC 1628 which reads as follows : "If there was no acceptable tender from a person who satisfied the condition of eligibility, the Ist respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondents. When the Ist respondent entertained the tender of the 4th respondents even though they did not have 5 years experience of running a IInd class restaurant or hotel, it denied equality of opportunity to others similarly situate in the matter of tendering for the contract. There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years experience of running a llnd class restaurant, but who were otherwise competent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the contract, but they were precluded from doing so by the condition of eligibility requiring five years experience. The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the prescribed condition of eligibility, was clearly discriminatory, since it excluded other persons similarly situate from tendering for the contract and it was also arbitrary and without reason. The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action." 11. In the counter affidavit filed on behalf of respondents 1 to 6 and 7, it has been stated that the check-list is not an authentic document as the same has not been signed by any person and respondent no. In the counter affidavit filed on behalf of respondents 1 to 6 and 7, it has been stated that the check-list is not an authentic document as the same has not been signed by any person and respondent no. 7 does possesses plant and machineries which is required for carrying out the work. 12. Mr. A.P. Jittu, learned Standing Counsel no. 2 appearing on behalf of respondents 1 to 6 and Shri N.K. Singh who appears on behalf of respondent no. 7 on the second day of hearing, contended that respondent no. 7 is sufficiently equipped with plant and machinery and the Tender Committee on consideration of the relevant material, having decided to grant the contract to it, same is not fit to be interfered with by this court in exercise of its writ jurisdiction. Mr. N.K. Singh further submits that according to the check-list, petitioner also did not possessed all the plants and machineries but only possesses Hot Mix plant, Bitumen Boiler, paver tipper and truck and as such, the Tender Committee having noted all these facts, thought it fit to grant contract to respondent no. 7 and no fault can be found in the same. They point out that judicial review is not of the decision but the decision making process and the Tender Committee having considered all pros and cons and having found that the work is fit to be allocated to respondent no. 7, same cannot be struck down by this court in exercise of its writ jurisdiction and power of judicial review cannot be extended in relation to contractual power of the State Government. He emphasises that there is no allegation against the members of the Tender Committee that they have acted malafide or were incompetent. Hence this Court is precluded from quashing the decision taken by the Committee to grant contract to respondent no. 7. He emphasises that there is no allegation against the members of the Tender Committee that they have acted malafide or were incompetent. Hence this Court is precluded from quashing the decision taken by the Committee to grant contract to respondent no. 7. In support of his submission, he has placed reliance on a Division Bench judgment of this court in the case of M/s Continental Pump and Motors Ltd. Gaziabad (U.P.) V/s. The State of Bihar and others, reported in 1994 (2) PLJR 1 and my attention has been drawn to the following passage of the judgment : "XXX The Committee which scrutinised the tenders, and which ultimately took a decision to award the contracts in favour of the private respondents, was an expert body fully qualified to deal with such matters. There was nothing to establish that they had either followed an unfair procedure or that they had acted unfairly or with malice. In these cirucmstances, if the Court came to the conclusion that the Committee had acted fairly and bonafide, should not exercise its writ jurisdiction to quash the decision taken by such a Committee XXX." 13. True it is that the check-list indicates that respondent no. 7 does not possess all the plants and equipments but at the same time the check-list also does not indicate that petitioner possesses all the plants and machineries in terms of the tender notice. Check-list shows that respondent no. 7 possessed Mini Hot Mix plant on representation of respondent no. 7 the site was inspected by Engineer-in-Chief on 30.8.2001 who found that Hot Mix plant brought at the work site is capable to do the work for which tenders were invited. Thus on consideration of the availability of plant and machinery in possession of petitioner and respondent no. 7, recommendation of the Executive Engineer, Superintending Engineer, and Chief Engineer, the Tender Committee, which consisted of Commissioner-cum-Secretary, Road Construction Department, Engineer-in-Chief-cum Addl. Commissioner and Chief Engineer besides various other senior officers, considered the matter and decided to award contract to respondent no. 7 taking into consideration that its offer was the lowest, on the condition that it shail start bitumen work within 15 days. 14. Commissioner and Chief Engineer besides various other senior officers, considered the matter and decided to award contract to respondent no. 7 taking into consideration that its offer was the lowest, on the condition that it shail start bitumen work within 15 days. 14. Having appreciated the rival submissions, I am of the opinion that this is not a fit case, in which power of judicial review is fit to be exercised to strike down and award of contract to respondent no. 7. It is well settled that power of judicial review can be exercised to examine the contractual power of the Government to prevent arbitrariness and favouritism. However, this principle has its own limitation. Government is the guardian of the finances of the State and is expected to protect financial interest of the State. The right to accept or even refuse the lowest tender is always available to the Government and the courts interference is called for when this power is exercised arbitrarily or for any other collateral purpose. It is equally well settled that judicial review is of the decision making process and not the decision. 15. Bearing in mind the aforesaid settled legal position, I proceed to examine the grievance of the petitioner. There is nothing on record to establish that the Tender Committee had acted in unfair manner or with malice. They were aware of the merits and demerits of the claim of each of the tenderers. It is not the case of the petitioner that irrelevant materials were considered and relevant materials were not considered by the Tender Committee. From what has been stated above, no fault can be found in the decision making process as the tender-committee has considered the relevant materials and had not considered any irrelevant materials. Tender Committee was aware of the volume of plant and machinery available to each of the petitioner and respondent no. 7. They were also aware of the nature of the work to be carried out and the time constraints for same. Further the action cannot be termed to be arbitrary or violative of Article 14 of the Constitution of India as in the opinion of the Engineer-in-Chief, respondent no. 7 did possess plants and equipment to carry out the work tendered. Offer of respondent no. Further the action cannot be termed to be arbitrary or violative of Article 14 of the Constitution of India as in the opinion of the Engineer-in-Chief, respondent no. 7 did possess plants and equipment to carry out the work tendered. Offer of respondent no. 7 was the lowest i.e. 4 per cent above the estimated cost, whereas that of the petitioner was 9 per cent above the estimated cost. Reduction of the rate by the petitioner after the tender was opened is of no consequence and action of the tender-committee in awaring contract to the lowest tenderer i.e. respondent no. 7, who has been found to be possessing plants and equipment to carry out the tendered work, cannot be said to be a case of favouritism. 16. In the result, I do not find any merit in this application and it is dismissed accordingly but without cost.