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2002 DIGILAW 417 (JHR)

Ved Narayan Sharma v. State Of Jharkhand

2002-03-26

HARI SHANKAR PRASAD, M.Y.EQBAL

body2002
ORDER 1. In this writ application the petitioner seeks mandamus directing the respondent not to open tenders and/or allot the work to any contractor in respect of tender notice dated 15.1.2002, which was published by combining the entire work in one Group and further for a direction directing the respondents to act in response to the earlier tender notice against which petitioner submitted his tender. 2. The facts of the case lies in a narrow compass. The Public Health Engineering Department (in short PHED) under the signature of Superintending Engineer, PHED, Urban Circle. Ranchi advertised in the newspaper on 12.9.2001 inviting tender for laying of 38" dia MS pipe lines : (i)from Rukka Gate upto Vikas Vidyalaya, (ii) From Vikas Vidyalaya Gate to Jumar Bridge and (iii) from Jumar Bridge to Booty Sump. Thus, the entire work of laying of pipe lines from Rukka Gate to Booty Sump was divided into three groups. The estimated value of the work of the first group was Rs. 219.019 lakh, for the second work, the estimated value was Rs. 209.492 lakh, and for the third work the estimated value was Rs. 154.991 lakh. Subsequently two corrigendums were issued and published in the newspaper. The first corrigendum was published on 29.8.01 extending the date for submission of tender to 9.10.2001 and the date for supplying/selling tender paper was also extended upto 8.10.2001. The second corrigendum was issued and published in the Newspaper on 10.10.2001 again extending the date till 16.10.2001 for submission of tender and till 15.10.2001 for purchase of tender papers. It is contended by the petitioner that in the corrigendum also it was specifically mentioned that laying down of pipe lines from Rukka Gate to Booty Sump was divided into three groups. Photocopies of advertisement dated 12.9.01 and the two corrigendums have been annexed as Annexures-1, 2 and 3 respectively. 3. Petitioners case is that in compliance of the tender notice he submitted tender paper in respect of the first Group ie., for laying of 38" dia MS pipe line from Rukka Gate to Vikas Vidyalaya and deposited earnest money. It is further stated that according to the tender notice, the tender papers were to be opened on 16.10.2001, but instead of opening the tender on 16.10.2001 the Respondents mala fidely deferred the date for opening the tender paper. It is further stated that according to the tender notice, the tender papers were to be opened on 16.10.2001, but instead of opening the tender on 16.10.2001 the Respondents mala fidely deferred the date for opening the tender paper. It is alleged that instead of opening of tender papers as per tender notice Respondents kept the matter pending with an intention to help the favourite persons and finaliy cancelled the tender. Petitioner was informed vide letter dated 22.1.2001 that earlier tender which was in respect of three groups has been cancelled for unavoidable reasons. Respondents thereafter again advertised fresh tender notice in the Newspaper for the same work for laying of 38" dia MS pipes from Rukka Gate to Booty Sump. In the fresh Tender Notice, instead of 3 earlier groups, the entire work has been clubbed together and the period for completion of work has been fixed as 15 months. The contention of the petitioner is that according to the fresh tender notice, earnest money was required to be deposited in the shape of National Savings Certificate and various other terms have been included in the tender notice. It is alleged by the petitioner that fresh tender notice is arbitrary and with mala fide intention to eliminate genuine tenderers who had submitted their tenders and to give opportunity to other contractors. 4. A counter-affidavit has been filed by the respondents stating inter alia that it is true that the earlier tender notice was issued and the work was divided into three groups. However, tn the process of tender the meeting of the Tender Committee was held and it was recommended that instead of three earlier Groups, the entire work should be clubbed together as they are the works of similar nature and in continuation. It is submitted that the recommendation of Tender Committee was later approved by the Government of Jharkhand and accordingly the tender was clubbed together in one Group. In fact the decision of the Government of Jharkhand to club together all the three tenders in one Group was done in view of the nature of work of similar type and in view that reputed contractor shall also be available and the work should be completed within the stipulated time. In fact the decision of the Government of Jharkhand to club together all the three tenders in one Group was done in view of the nature of work of similar type and in view that reputed contractor shall also be available and the work should be completed within the stipulated time. It is contended by the respondents that tn the Tender Document i.e. NIT it was clearly mentioned that right to accept or reject or to distribute the works among the tenderers will be reserved with the Department without assigning any reasons. Lastly it is stated that decision of the Government to club all the three groups into one and invite fresh tender was neither arbitrary nor mala fide or on extraneous consideration. 5. Mr. S.B. Gadodia, learned senior counsel appearing for the petitioner submitted that mala fide action of the respondents is evident from the fact that the petitioner was for the first time informed about the cancellation of earlier tender one day before submission of tender against fresh tender notice. Petitioner received letter on 23.1.2002 whereas last date for submission of tender against fresh tender notice was 24.1.2002. Learned counsel submitted that the main intention of the respondents was to deprive the petitioner from submitting tender against fresh tender notice. 6. The only question that falls for consideration is whether cancellation of earlier tender notice and issuance of fresh tender notice after clubbing all the work was arbitrary, mala fide and on extraneous consideration. This Court has occasion to go through the original file of the department, which has been produced by the learned JCto Addl. AG. The tender notice was regarding erection of 38" dia MS pipe from Rukka to Booty. The estimated cost of the scheme as sanctioned is Rs. 19.50 Crores. The earlier tender notice was issued at the instruction of the Chief Engineer who divided the work in three parts. Subsequently, a Tender Committee was constituted to review the entire work of tender. It was then brought to the notice of the Vigilance (Cabinet Department) decision to the effect that tender more than one crore will be executed only on the recommendation of the Tender Committee. It was further found that the power to divide a work is delegated only to the authority who is empowered to accept the tender. It was then brought to the notice of the Vigilance (Cabinet Department) decision to the effect that tender more than one crore will be executed only on the recommendation of the Tender Committee. It was further found that the power to divide a work is delegated only to the authority who is empowered to accept the tender. The Secretary, PHED in his note mentioned that the Chief Engineer (Headquarter) has divided the work into three parts who is not delegated to execute/accept tender worth rupees more than one crore. The matter was then referred to the Finance Commissioner for his opinion. The Finance Department did not approve the decision of the Department to divide the work in three groups and it was suggested that the matter may be placed before the Chief Minister. Thereafter, the opinion of the Chief Secretary was also sought for by the Department. The Chief Secretary in his note dated 4.1.2002 categorically opined that the work should be done as per the decision of the Finance Department. The Chief Secretary further opined that the work should be clubbed in order to get good quality of work and within the stipulated period. The file was then placed before the Chief Minister who also agreed with the decision of the Finance Department that tender should not be invited by dividing the work into three groups. 7. From the note-sheet of the original file it is therefore clear that the earlier tender notice (Annexure-1) issued by the Chief Engineer who had no authority to issue tender notice in respect of work more than one crore and that too before the formation of Tender Committee. It was only after the earlier tender notice was published, a Tender Committee was duly constituted and then it was detected such tender notice could not have been issued by the Chief Engineer. The Tender Committee in its meeting decided for inviting fresh tender after clubbing all the works. Thereafter after obtaining the view of the Finance Department and the Government, it was decided to issue a fresh tender notice after/clubbing all the works. 8. This Court therefore does not find any arbitrariness or favouritism in the subsequent decision taken by the Government to cancel the earlier tender notice and publish fresh tender notice after clubbing all the works. 9. 8. This Court therefore does not find any arbitrariness or favouritism in the subsequent decision taken by the Government to cancel the earlier tender notice and publish fresh tender notice after clubbing all the works. 9. There is no dispute that principles of Judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finance of the State. It is expected to protect the financial interest of the State. The right to cancel a tender notice or to refuse any tender is always available to the Government. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power, if the said power is exercised in order to get good quality of work in the interest of public. 10. The Supreme Court, in the case of "Tata Cellular v. Union of India, (1994) 6 SCC 651 has held that the Court cannot interfere with the Governments freedom of contract, invitation of tender and refusal of any contract which pertain to policy matter unless the decision or the action vitiated by arbitrariness, unfairness, illegality, irrationality or when decision is such as no reasonable person on proper application of mind could take. Their Lordships further laid down the following proposition : The principles deducible from the above are : (1) The modern trend point to judicial restraint in administrative action. (2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often then not, such decision are made qualitative by experts. (5) The Government must have freedom of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often then not, such decision are made qualitative by experts. (5) The Government must have freedom of contract. In other words, a fair plan in the Joints is a necessary concomitant for an administrative body functioning in an administrative sphere of quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." 11. As noticed above, the earlier tender notice was issued at the instance of Chief Engineer who was not empowered because of the estimated value of the tender. Subsequently, a Tender Committee was duly constituted and the decision of the Vigilance (Cabinet Department) was taken into consideration and the committee decided to issue fresh tender notice after clubbing all the works. Thereafter, approval of the Finance Department and the Government was obtained. In my opinion, therefore issuance of the impugned tender notice after clubbing all the works is neither arbitrary, illegal irrational nor on any extraneous consideration. 12. For the reasons aforesaid. I do not find any merit in this writ application and the same is dismissed. Before parting with the order, this Court, however, direct the respondent to extend the time fixed in the impugned tender notice by publishing in the Newspaper so that petitioner and all other tenderers should get reasonable time for submitting of their tender.