R. K. Mining Private Limited v. Bharat Coking Coal Limited
2011-09-27
R.R.PRASAD
body2011
DigiLaw.ai
Judgment 1. THE respondent-B.C.C.L issued a notice inviting tender on 1.3.2011 for execution of the work of removal of over burden, extraction and transportation of coal from some patches mentioned therein of Gundudhi colliery of Kasunda area. In the said notice minimum number of different equipments were mentioned for its deployment at the work site. THErefore, as per the terms of the NIT, bidder was required to give an undertaking in the form of an affidavit in prescribed format to deploy matching equipments/tippers/pay loaders etc. either owned or hired which was part of the tender document as Annexure F. Pursuant to the said notice, the petitioner as well as several other including the respondent no.3 submitted their tender documents. THE documents submitted by the respondent no.3 were found to be defective as the tenderers were required to have 77 number of equipments specified in clause 3(e) of the tender document either on ownership basis or on hire but the respondent no.3 did inform that he possesses/owns 75 equipments and only two equipments, i.e. Volvo EC 460 and pay loaders with bucket capacity, he was informed that it would be purchased. On opening of the technical bid on 19.4.201, tender documents submitted by the respondent no.3 were found to be defective for the reason as aforesaid and, hence, respondent no.3 was declared ineligible and was not allowed to participate in the financial bid. Only 8 tenderers qualified in the technical bid and they were called, vide letter dated 11.7.2011 to be present for opening of the financial bid on 14.7.2011. On opening the financial bid, according to the petitioner, he was declared as L-1. Meanwhile, respondent no.3 when was declared disqualified, he filed a writ application, bearing W.P.(C) No.4303 of 2011 on 27.7.2011. While the matter was pending for consideration, respondent no.2 issued a letter dated 23.8.2011 to the petitioner and other participants informing therein that on consideration of the representation filed by the respondent no.3, they have decided to open price bid submitted by him on 26.8.2011. THE said decision of the respondent whereby they decided to open the tender price bid of the respondent no.3 has been challenged in this writ application. 2.
THE said decision of the respondent whereby they decided to open the tender price bid of the respondent no.3 has been challenged in this writ application. 2. LEARNED counsel appearing for the petitioner submitted that once a tender committee after declaring ineligible tenderers as disqualified and proceeded to open the price bid of other tenderers and found the petitioner as L-1, the respondent is not at all justified in taking decision to open the price bid submitted by the respondent no.3 when he had already been disqualified in technical bid and as such, the said decision is not only illegal but tainted with arbitrariness and bias. 3. IT was also submitted that once the petitioner was found to be L-1, the authority in terms of clause 29(1) of the tender notice should have awarded work to the petitioner by notifying it but the authority contrary to it took a decision to open the price bid of the respondent no.3 who had earlier been disqualified and finally he was declared as L-1 and has been awarded work, though his tender document itself was defective as respondent no.3 instead of giving information about the two implements being owned or hired, it was stated that it would be purchased. Thus, the authority in view of the decision rendered in a case of M/s. G.J.Fernandez vs. State of Karnataka and others ( AIR 1990 SC 958 ) submitted that in awarding work to the respondent not only acted arbitrarily but also illegally and hence, entire tender process is fit to be set aside. As against this, learned counsel appearing for the respondent-B.C.C.L submitted that it is true that when the technical bid was open, respondent no.3 was declared disqualified but when he made representation, the authority in terms of clause 24.1. of the tender document reconsidered and found that eligibility is substantially responsive to the requirement of the bidding document and then informed all the other bidders to be present for opening of the financial bid of the respondent no.3. When the financial bid was open, price quoted was found substantially low to the extent of 15 crores and hence, work was awarded to the respondent no.3 which order has never been challenged and hence, this writ application is infructuous. 4.
When the financial bid was open, price quoted was found substantially low to the extent of 15 crores and hence, work was awarded to the respondent no.3 which order has never been challenged and hence, this writ application is infructuous. 4. THUS, it was submitted that decision taken by the authority relating to work being awarded to respondent no.3 is bona fide and at the same time, is in public interest and hence, decision taken never warrants to be interfered by this Court. Learned counsel in support of his submission has referred to a decision rendered in a case of Jagdish Mandal vs. State of Orissa and others [(2007) 14 SCC 517]. 5. MR. P.K.Prasad, learned counsel appearing for the respondent no.3 submitted that the petitioner has only challenged the decision of the authority wherein it had been decided by the authority to open the price bid of respondent no.3 in presence of all the participants. On opening of the price bid, price quoted by the respondent no.3 was found substantially low and hence, respondent no.3 was awarded with the work but that order has never been challenged and hence, this application has become infructuous. 6. IT was also submitted that the petitioner has never come up to this Court in the clean hand that he had suppressed in the writ petition about the filing of the suit first before the court of Munsif and then after it is withdrawal in the court of Sub-Judge and hence, he does not deserve to be invoked under extraordinary jurisdiction of Article 226 of the Constitution of India. Learned counsel further submitted that the authority by misrepresenting the clause of owning or hiring disqualified the petitioner at the time of opening of the technical bid but on representation, the matter was reconsidered and nothing was found wrong and hence, he was awarded contract as his price bid was less than 15 crores from the petitioner and hence, work was awarded which is always in public interest and therefore, this application is fit to be dismissed. 7. IT has been held that the award of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial transactions.
7. IT has been held that the award of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial transactions. But at the same time, as has been held by the Hon'ble Supreme Court as well as High Court that while awarding contract, the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. 8. IT has been further held that though the decision is not in amenable to judicial review, the court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. 9. IT has been held in a case of Air India Limited vs. Cochin International Airport Limited [ 2000 (2) SCC 617 ] 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. IT has been further held that the Court should always keep the larger public interest in mind and in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene.. 10. THE same view was subsequently reiterated in a case of Jagdish Mandal vs. State of Orissa and others (supra) wherein it has been held hereunder: " Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance.
When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, court will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. THE power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. THE tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. THErefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions. i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone: OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say; the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached. (ii) Whether public interest is affected." 11. KEEPING in mind that the principle laid down by the Hon'ble Supreme Court it is to be considered whether the decision awarding contract to respondent no.3 is mala fide and whether such decision is affected public interest adversely ? As I have noted earlier that at the time of technical bid, the petitioner was declared disqualified as in the column of prescribe format he had mentioned about two equipments being purchased instead of mentioning owned or hired.
As I have noted earlier that at the time of technical bid, the petitioner was declared disqualified as in the column of prescribe format he had mentioned about two equipments being purchased instead of mentioning owned or hired. The relevant clause under which such information was to be furnished reads as follows: " The bidder is required to give an undertaking in the form of an affidavit in the prescribed format to deploy matching equipments/tippers/pay loaders etc. either owned or hired (format placed in Annexure F in tender document)." 12. SIMPLY to have information as to whether the person intends to do the work with his own equipment or with the equipments hired. The petitioner instead of giving information about the two equipments being hired or owned, simply stated that it would be purchased. By putting that word he would have meant that by the time the work would be awarded, he would be owning it. Perhaps, for that reason, the authority on filing representation did consider for opening of the price bid of the petitioner. When the price bid was open in presence of all the participants, it was found that the price bid is lesser by huge margin to the extent of 15 crore and therefore, the contract was awarded to the respondent no.3 taking into account that it would always be in the public interest. Thus, I do not find that the decision making process gets vitiated in any manner by mala fide, unreasonable and arbitrariness, rather the decision seems to have been made in larger public interest and therefore, no interference is warranted. The facts of the case relied upon by the petitioner was that some documents which had bearing on or were indicative of the fulfillment of experience etc. of tenderer were required to be furnished along with the application for blank tender books. One of the proposed tenderer submitted a required document not along with the application for issue of blank tender books but belatedly. The corporation considered those documents and eventually the contract was granted. Acceptance of those documents filed belatedly was found to be illegal as that whatever cause substantial prejudice to another party and therefore, interference was made as the Hon'ble Court did find that substantial prejudice or injustice to any of the parties involved or to public interest in general was caused in accepting the document filed subsequently.
Acceptance of those documents filed belatedly was found to be illegal as that whatever cause substantial prejudice to another party and therefore, interference was made as the Hon'ble Court did find that substantial prejudice or injustice to any of the parties involved or to public interest in general was caused in accepting the document filed subsequently. Here, in the instant case as I have stated that the petitioner had earlier been disqualified but on making representation, the authority, as per the term of clause 24.1 of the tender document, examined the bid in the light of the representation did it find substantially responsive and then opening of the financial bid, the price was found considerably low which was always in public interest and as such, no interference is warranted by this Court. Accordingly, this writ application is dismissed.