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2003 DIGILAW 1365 (JHR)

Bhupinder Engineering And Construction Pvt. Ltd. v. State Of Jharkhand

2003-12-09

R.K.MERATHIA

body2003
JUDGMENT R.K. Merathia, J. 1. Heard learned counsel for the petitioner, learned Advocate General appearing for the State and Mr. M.K. Roy, learned counsel appearing for respondent No. 6. 2. Whether the decision making process in awarding contract of package No. 3 in tender Notice No. 1/2003-04 is fair and bonafide, is the question. 3. Learned Counsel for the petitioner placed the following facts in support of his contention that the contract has been awarded in favour of respondent No. 6 in a arbitrary and malafide, manner : A notice inviting tender was advertised on 25.5.2003 being Advertisement No. 1/2003-04 for construction of 29 Nos. of RCC/PSC bridges including approach roads in four packages. In his case, package No. 3 is in question. The petitioner and other submitted their bids in two envelopes as per Clause 25 of the Tender Notice. The first envelope containing technical bids were opened on 31.5.2003 in presence of the tenderers/ their agents. The second envelope containing the details of price offer was to be opened after examination of technical bids. Clause 28.2 of the Tender Notice provided that "the financial bids of all the technically qualified bidders shall be opened in presence of tenderers or their authorised representatives who may choose to be present for which they would be intimated separately." Petitioner did not receive any intimation about opening of financial bid and a representation was made in this regard. From the counter affidavit filed in this case, the petitioner learnt that the financial bid was opened on 19.6.2003 about which the petitioner had no intimation. It further appeared from the counter affidavit that on 18.6.2003 a purported scrutiny was done in which four tenderers including the petitioner and respondent No. 6 were found technically qualified. It is further alleged in the counter affidavit that since the technical bid was scrutinized on 18.6.2003, the Engineer-in-chief decided to open the financial bid on the next day i.e., on 19.6.2003 and as there was no time to inform the bidders through letters, all the bidders were informed on telephone through a telephone booth after obtaining proof of making telephone calls. It further appeared to the petitioner from the counter affidavit that the four bidders present were Royal Engineering (respondent No. 6), Bhupendera Engineering (petitioner), S.P. Singha and Kamla Construction but from Annexure-B, the alleged minutes of meeting, it appeared that Kamla Construction was not present. It further appeared to the petitioner from the counter affidavit that the four bidders present were Royal Engineering (respondent No. 6), Bhupendera Engineering (petitioner), S.P. Singha and Kamla Construction but from Annexure-B, the alleged minutes of meeting, it appeared that Kamla Construction was not present. S.P. Singha was not a tenderer regarding package No. 3. Therefore, it is clear that only the respondent No. 6 and one other tenderer S.P. Mallick were present in the alleged meeting held on 19.6.2003. It further appears from the minutes of the alleged meeting (Annexure-B), that the rate quoted against package No. 1 is mentioned. The decision/details of the relevant package No. 3 has not been brought on record. The form of financial bid (annexure- 4), shows that for all the four packages one composite form is provided whereas there should be separate forms of financial bids for separate packages otherwise there are every chances of manipulation. One tenderer can purchase such four composite forms of financial bids for submitting tenders against each package separately but if the department wants to favour a party, a form of financial bid making him lowest tenderer can be inserted easily in place of his original financial bid. The petitioner asserts that there has been such mal practice in this case in view of the other facts and circumstances. Learned counsel for the petitioner further submitted that the stand of the State in the counter affidavit is that on the opening of the financial bid the tenderers or their representatives who participated were S.P Singha, Royal Engineering (respondent No. 6) and S.P. Mallick who were present there in relation to some other package, the financial bid of which also was being opened on the game day. Whereas the stand of the respondent No. 6 in his counter affidavit is that in pursuance of the telephonic message the deponent of the counter affidavit, participated in the opening of financial bid. The petitioner also expressed its objection as to how the respondent No. 6 could know about the rates quoted by the parties. The bid was to be opened in presence of all the parties, but only the officers are required to know the rates quoted by the parties to ascertain as to who is the lowest. The respondent No. 6 is made the lowest with the rate quoted at Rs. The bid was to be opened in presence of all the parties, but only the officers are required to know the rates quoted by the parties to ascertain as to who is the lowest. The respondent No. 6 is made the lowest with the rate quoted at Rs. 4,70.40,000/- in view of the rate quoted by the petitioner at Rs. 4,82,49,584/-. On 22.7.2003, this Court while issuing notices, ordered that in the meantime, if any work is performed with respect to package No. 3, it shall be subject to the decision of the case. This order was passed in presence of the Government counsel even then an agreement was entered into with respondent No. 6 on 25.7.2003. When the said fact was brought to the notice of this Court, on 24.9.2003 it was ordered that in he meantime if any work order is issued or agreement executed with he 6th respondents in respect to the work in question, it shall remain stayed. The Executive Engineer was directed to ensure that no work is performed by 6th respondents until further order of this Court. Moreover, such a package involving construction of five bridges and involving more than four crores was decided by the Chief Engineer, Rural Development Department, Special Zone and two Assistant Engineers of his office. The total tender is for 29 bridges involving more than 20 crores. 4. The petitioners contention is that the totality of the circumstances clearly establishes that the Government has shown favour in awarding contract to respondent No. 6. 5. The stand of the State as placed by learned Advocate General is as follows. The petitioner was not the lowest tenderer and therefore even if there has been some irregularity in the process, he has not been prejudiced. Clause 28.2 of the tender notice talks of intimation and docs not specify the mode of such intimation. Since the technical bid was scrutinized on 18.6.2003 and the Engineer-in-Chief decided to open the financial bid on 19.6.2003 all the bidders were informed on telephone from telephone booth, the receipts of which are annexed as Annexure-A. The tenderers who were present on 19.6.2003 while opening the financial bid were present there in relation Lb some other package, the financial bid of which was being opened on the same day. The petitioner knew that he is not the lowest and therefore he did not take part in the tender inspite of receiving telephonic message because in the rejoinder the petitioner has stated that it is not clear as to whom the respondents have talked and what direction was given therein. Learned Advocate General submitted that in this way, the receipt of telephone is not specifically denied by the petitioner. The petitioner has not made out a case that it suffered any prejudice and that it could not participate due to short notice The stipulation in Clause 28.2 regarding intimation is directory and not mandatory as the consequences of non intimation is not provided. In any event if this Court finds that there has been some irregularity, that can be taken care of in future, but in this case if the Court interferes, the public will suffer due to further delay in awarding the contract. 6. Learned counsel for respondent No, 6 adopted the arguments advanced by learned Advocate General and supported the award of work in its favour. In reply, it is stated and submitted on behalf of the petitioner that it has been seriously prejudiced due to the said action/ inaction on the part of the respondents. It was further submitted that when admittedly the tenders were opened in the absence of the petitioner, how could he know about the rates offered by other tenderers and that some other tenderer was lowest. He further submitted that Clause 28.2 should have been followed in letter and spirit. 7. Learned counsels for the parties relied on several decisions regarding the scope of judicial review in such matters. As per Tata Cellular Case ( AIR 1996 SC 11 ) the Court is only concerned with the manner in which the decisions have been taken. The Court is not to determine whether particular policy or particular decision taken in the fulfillment of that policy is fair. The Court is only concerned with the manner. The duty of the Court is to see whether the decision making process is fair, transparent and bona fide, or not. While scrutinizing that aspect the Court has to see whether a decision making authority exceeded its power, committed an error of law, committed a breach of rules of natural justice, reached a decision which no reasonable Tribunal would have reached or abused its powers. While scrutinizing that aspect the Court has to see whether a decision making authority exceeded its power, committed an error of law, committed a breach of rules of natural justice, reached a decision which no reasonable Tribunal would have reached or abused its powers. The Court has to see whether there has been procedural impropriety. As per W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Ors., (2001) 2 SGC 451 : 2001 (2) JCR 422 (SC) : "In a work of this nature and magnitude where bidders who fulfil pre- qualification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favourtism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to be ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view, such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules. We have, therefore, no hesitation in concluding that adherence to the ITB or rules is the best principle to be followed, which is also in the best public interest." In the case of Sterling Computers Ltd. ( AIR 1996 SC 51 ) it was held that Court cannot act as an appellate authority and examine the details of the terms of the contract, but at the same time the Court can certainly examine whether the decision making process was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. 8. 8. After considering the materials on record, the submissions made by the parties and the law on the subject, I am of the view that even if some broad facts are taken note of, the decision making process in question clearly lacks fairness, bonafide, and transparency. The technical bid was admittedly scrutinized on 18.6.2003, i.e., after about 18 days of opening the same. There is no explanation why the technical bid opened on 31.5.2003, was scrutinized only on 18.6.2003 and why it was decided to open the financial bid on the next day i.e., on 19.6.2003. Even if the Government is anxious to award contract at utmost speed the petitioner was justified in expecting an intimation in a reasonable manner about opening of financial bid. Clause 28.2 clearly shows that the emphasis is on the opening of the financial bid in presence of the tenderer/their authorised representatives who may choose to be present and for this they were to be intimated separately. It is true that Tender Committee cannot wait for a tenderer if he chooses not to be present but at least a reasonable attempt to intimate the tenderer was expected. There is no justification whatsoever for scrutinizing the technical bids after a delay of more than a fortnight from the date of opening them and then to decide to open the financial bids on the next day. It is true that mode of intimation is not provided but as per said Clause 28.2 a fair manner of communication and reasonable period to attend the opening of the financial bid should have been attempted in all fairness. Respondent No. 6 has said in its counter affidavit that in pursuance of the telephonic message, it participated in the opening of the financial bid, whereas in the counter affidavit filed by the State, it is stated that the tenderers or their representatives were present in the opening of financial bid per chance. Other fallacies in the process in question, as pointed out on behalf of the petitioner, also cannot be ruled out. Moreover, it is also surprising as to why the agreement was entered into with the respondent No. 6 on 25.7.2003, when this Court ordered on 22.7.2003 that if the work in question is performed, that shall be subject to the decision of this case. Normally in such circumstances, the Government officers stay their hands. Moreover, it is also surprising as to why the agreement was entered into with the respondent No. 6 on 25.7.2003, when this Court ordered on 22.7.2003 that if the work in question is performed, that shall be subject to the decision of this case. Normally in such circumstances, the Government officers stay their hands. When this was brought to the notice of this Court on 24.9.2003, the execution of agreement and work order was stayed. 9. Before parting with this case, I wish to make some observations. In this new State, several litigations are coming up, some are frivolous, some are genuine. This or that contractor is concerned with their interests. If the government and its officers are concerned with the development of the State and public interest it should be ensured that transparency is maintained in awarding contracts so that unnecessary litigations can be avoided, and public interest is protected. The State Government should evolve a system for awarding contracts which is practically full-proof. There can be a Central Committee of competent, fair and honest persons for awarding/scrutinizing the process of awarding the contracts of different departments. The representatives of the different departments maybe there in the said committee for assistance. 10. On the whole, I am satisfied that the decision making process in awarding the contract in question regarding package No. 3 to respondent No. 6 was not fair, bona fide and transparent. This Court cannot put its seal of approval on the same. The tender notice in question and all subsequent actions taken thereon, are set aside. The writ petition is allowed. However, 1 am not making any order as to costs. Writ allowed.