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Gauhati High Court · body

2012 DIGILAW 1257 (GAU)

Old United Enterprise v. Hindustan Paper Corporation Ltd.

2012-11-08

B.K.SHARMA

body2012
JUDGMENT B.K. Sharma, J. 1. The petitioners are aggrieved by Annexure-C notice dated 12.9.2011, by which, the particular tender notice issued on 13.6.2011 in respect of the job "Annual Mechanical Maintenance Rate Contract For General/Common Items" has been cancelled. As stated in the said notice, such cancellation is due to technical reasons. The petitioners are engaged with contractual business of mechanical maintenance and other allied works. When the aforesaid NIT was issued, the petitioners responded to the same by submitting their tenders. 2. Upon scrutiny of the tender bids on 29.8.2011, the Tender Committee found the technical bids submitted by the petitioners as responsive and submitted its recommendation for opening of their respective price bids. The price bids were opened on 30.8.2011 in presence of the representatives of the petitioners. While the petitioner No. 4 emerged as the L-1 bidder, the petitioners No. 3 and 6 emerged as L-2 bidders and the other petitioners emerged as L-3 bidders. It was found that the quoted rate of L-1 bidder was more than 10% higher than the estimate of the respondent corporation. At one stage, it was decided to invite the petitioner No. 4 with detailed price break up for negotiation for reduction in the rate offered by him. Since the work was to be split among 6 qualified bidders, it was also decided to ask L-2 and L-3 bidders to accept the finally negotiated L-1 rates. 3. The case projected in the writ petition is that when the petitioners had been waiting for rate negotiation in acceptance of the decision taken by the competent authority, the respondent No. 2 i.e. the Sr. Manager (EMCC) of the respondent Mill issued the impugned notice canceling the NIT dated 13.6.2011 with the decision to go for fresh NIT. It is this decision to cancel the NIT, which is under challenge in this writ petition. 4. In the additional affidavit coupled with the consolidated additional affidavit bringing certain subsequent development on record, the petitioners have contended that the respondent corporation has acted in the matter illegally and that there has been violation of the norms fixed for processing tenders. It has also been contended that the decision making process is not valid one being not founded on transparency and fairplay. 5. It has also been contended that the decision making process is not valid one being not founded on transparency and fairplay. 5. Referring to the guidelines relating to negotiated settlement and also the practice being followed by the respondent corporation in such matters, the petitioners have pleaded that there has been discretion in abandoning the negotiated settlement with the decision to go for fresh NIT. 6. The respondents have filed their counter affidavit denying the contentions raised in the writ petition. It has been contended that the impugned cancellation of the earlier tender process is founded on valid ground and that the petitioners cannot claim as a matter of right that the tender should have been finalized on the basis of the negotiated settlement irrespective of viability of the rates quoted by them. 7. I have heard Mr. S.K. Kejriwal, learned counsel for the petitioners as well as Mr. J. Roy, learned Standing Counsel, HPCL. I have also considered the entire materials on record including the records produced by Mr. J. Roy, learned Standing Counsel, HPCL. 8. In support of his argument, Mr. S.K. Kejriwal, learned counsel for the petitioners has placed reliance on the three decisions, which are reported in 2012 (1) GLT 271(Dhirendra Chandra Bhattacharjee Vs. State of Tripura & Ors.); 2011 (3) GLT 695 (Ackruti Plates Private Ltd Vs. State of Tripura & Ors.) and (2007) 8 SCC 1 (Reliance Energy Ltd. Vs. Maharastra State Road Development Corpn. & Ors.). Referring to the said decisions and also the file containing the impugned decision produced by Mr. J. Roy, learned Standing Counsel, HPCL, Mr. S.K. Kejriwal, learned counsel for the petitioner has submitted that the particular decision to cancel the earlier NIT was taken through the competent authority without placing the relevant materials before the said competent authority. Referring to Annexure-4 note dated 1.9.2011 furnished by Sr. Manager (Mech.)/EMCC, he submits that since a decision was taken for negotiated settlement, the said decision could not have been set at naught by withholding the relevant materials/notings from the competent authority. According to him a conscious decision having been taken to go for negotiated settlement as per the relevant guideline in this regard, the said decision ought not to have been altered without any valid reason. 9. Countering the above, Mr. J. Roy, learned Standing Counsel, HPCL submits that the petitioners cannot claim negotiated settlement as a matter of course. According to him a conscious decision having been taken to go for negotiated settlement as per the relevant guideline in this regard, the said decision ought not to have been altered without any valid reason. 9. Countering the above, Mr. J. Roy, learned Standing Counsel, HPCL submits that the petitioners cannot claim negotiated settlement as a matter of course. He submits that the impugned decision being founded on bonafide exercise of power and jurisdiction, the same cannot be interfered with exercising the power of judicial review under Article 226 of the Constitution of India. He further submits that the decision for negotiated settlement, on which the petitioners have harped upon having not been acted upon and that the same being subject to approval of the competent authority, without such approval of the said internal notings, the same did not have any validity and that it is the final decision that was taken by the competent authority which will have to be taken into consideration while deciding the issue raised in the writ petition. 10. I have very carefully considered the submissions made by the learned counsel for the parties and have also applied my mind to the relevant materials including the notings in the concerned file. It is true that while opening the technical bids, the tender committee decided to go for the financial bids. However, it was found that the rates quoted by L-1 bidder i.e. the petitioner No. 4 was 27% higher than the estimated value of the contract. It is also true that by Annexure-4 noting dated 1.9.2011 furnished by the Sr. Manager (Mech.)/EMCC, a proposal was made to call L-1 bidder i.e. the petitioner No. 4 with detailed price break up for negotiation in the tender committee meeting for reduction in the rate offered by them. By the said proposal it was also conveyed that since the job was to be split among 6 qualified bidders i.e. L-1, L-2 and L-3 as per the NIT, the bidder L-2 and L-3 rankings should also be asked to accept final negotiation L-1 rate. 11. The aforesaid noting dated 1.9.2011 will have to understood in the context of further process made in respect of the proposal. As the note suggests, the proposal was to be put up for scrutiny of the finance department. 11. The aforesaid noting dated 1.9.2011 will have to understood in the context of further process made in respect of the proposal. As the note suggests, the proposal was to be put up for scrutiny of the finance department. On perusal of the relevant file what is found is that the said noting was followed by further notings at different levels. In all the notings, it was pointed out that the rate quoted by L-1 bidder i.e. the petitioner No. 4 was 27% higher than the estimated value of Rs. 49,70,000/-, which comes to Rs. 63,11,900/-. In the said notings the proposal was further processed for negotiated settlement for price reduction subject, however, to the approval of the competent authority. As per the relevant notings, the matter was finally to be placed before the EMCC and the EMCC vide its noting dated 6.9.2011 opined as follows: SUB: PROPOSAL FOR CANCELLATION OF TENDER NO: NPM/EMCC/MECH/11-12/28 DT. 13.6.2011 FOR 'ANNUAL MECHANICAL MAINTENANCE RATE CONTRACT FOR GENERAL/COMMON ITEMS'. Price bid of the techno-commercially qualified bidders against subject percentage rate tender was opened on 30.8.2011 and L-1 bidders quoted rate was found 27% higher than the estimate. However, before opening of the price bids, representation from following bidders were received. 1. M/s. Kalita Engineering, 2. M/s. K.S. Enterprise and 3. M/s. HBN Enterprise. Above mentioned bidders in their letter dated 30.8.2011 (Ref: page 1088 to 1090) have mentioned that rejection of their technical bids is unjustified and requested for reviewing the same and to open their price bids, other wise they may initiate legal action. Grievances is disqualified bidders have also been published in local press; a copy of the same is enclosed at page 1087. Considering much higher quoted rate by L-1 bidder compared to our estimate as well as in order to avoid litigation, it is proposed:- a) To cancel the subject tender and go for retendering without any change in the tender document. b) Bidders submitted EMD against above cancelled tender need not to submit EMD afresh against instant retender. c) Bidders deposited cost of tender document against cancelled tender need not to deposit same afresh against instant retender. Put up for approval please. Sd/- Illegible Sr. Manager (Mech)/EMCC 12. After the aforesaid noting dated 6.9.2012 furnished by the EMCC, the matter was directed to be placed before the tender committee. c) Bidders deposited cost of tender document against cancelled tender need not to deposit same afresh against instant retender. Put up for approval please. Sd/- Illegible Sr. Manager (Mech)/EMCC 12. After the aforesaid noting dated 6.9.2012 furnished by the EMCC, the matter was directed to be placed before the tender committee. Eventually the matter was placed before the competent authority which accepted the proposal made by the EMCC for cancellation of the tender and to go for re-tendering without any change to the tender document. As per the said proposal, the bidders need not submit EMD afresh and that the bidders who deposited cost of tender documents against the cancelled tender need not also to deposit the same afresh. 13. It is the aforesaid decision making process which has been challenged in this writ petition. Needless to say that this Court exercising its power of judicial review under Article 226 of the Constitution of India is only concerned with the decision making process and not the decision as such. Upon reading of the file produced by Mr. J. Roy, learned Standing Counsel, HPCL and as discussed above, I do not find any error in the decision making process towards assailing the final decision to cancel the tender and to go for re-tendering. 14. Mr. S.K. Kejriwal, learned counsel for the petitioner has submitted that the approval of the competent authority was obtained without placing the earlier decision in various notings to go for negotiated settlement. As per the said notings, approval of the competent authority was to be obtained for the negotiated settlement. The noting on which Mr. Kejriwal, learned counsel for the petitioner has emphasizes has been discussed above. After the said noting with the proposal to place the matter before the competent authority, the same was finally directed to be placed before the EMCC. As to what was the recommendation of the EMCC has been quoted above. 15. In view of the above, it cannot be said that the decision and/or noting to place the matter before the competent authority to consider the proposal for negotiated settlement was never placed before the said authority. In feet the matter was to be placed before the competent authority through the EMCC. 15. In view of the above, it cannot be said that the decision and/or noting to place the matter before the competent authority to consider the proposal for negotiated settlement was never placed before the said authority. In feet the matter was to be placed before the competent authority through the EMCC. When the matter was placed before the EMCC, he had furnished the aforesaid note and thereafter the said proposal was agreed upon by the Finance and finally the matter was placed before the tender committee and eventually before the competent authority and the authority including the competent authority accepted the said proposal. This is how the matter attained finality. It will be inappropriate to say that the competent authority was kept in dark. In fact the entire file was placed before him with the notings including the above quoted note of the EMCC. When the notings themselves suggested to place the matter before the EMCC towards appraisal of the competent authority and the EMCC furnished the above quoted note dealing with the earlier notings, it cannot be said that there was lack of transparency and fairplay. 16. The decisions on which Mr. Kejriwal, learned counsel for the petitioner has placed reliance has no application to the facts and circumstances of the present case. In Dhirendra Chandra Bhattacharjee (supra), the issue involved was as to whether the earnest money deposited in the shape of Call/Bank Draft/Fixed Deposit under the specified Bank would be sufficient or not. When it was found that the petitioner involved in the said case had submitted the photocopy of Short Term/Call Deposit of Tripura Gramin Bank, it was held that photocopy of the same, ought have been taken care of by asking the tenderer to submit the original receipt. 17. In Ackruti Plates Private Ltd. (supra) interfering with the cancellation of tender process, it was held that although the State has inherent power to cancel NIT, but such power is to be exercised only on valid ground. In the said case, it was found that the matter was never placed before the Advisory Board, which was required to be placed. Thus, this case is also no help to the case of the petitioners. 18. In Reliance Energy Ltd. (supra), the Apex Court was concerned with the norms for valid State action and necessity to provide "level playing field" to all bidders. Thus, this case is also no help to the case of the petitioners. 18. In Reliance Energy Ltd. (supra), the Apex Court was concerned with the norms for valid State action and necessity to provide "level playing field" to all bidders. In the said case, the Apex Court was concerned with necessity to indicate the norms and benchmarks with clarity so as to ensure legal certainty. It was found that there was vagueness or subjectivity in the norms specified. Accordingly, it was held that there was unequal and discriminatory treatment violating the doctrine of "level playing field". This case is also no help to the case of the petitioner. 19. Above apart the claim relating to negotiated settlement cannot be claimed by the petitioner as a matter of right. Clause 12 of the Procurement Manual, on which the learned counsel for the petitioners has placed reliance itself provides that negotiation should be held only with L-1 bidder, if considered necessary and that the tool of negotiation should be used selectively. It has also been provided that injudicious and unimaginative application of their tool might send a wrong signal with the possibility of cartel formation etc. by bidders defeating the very purpose of negotiation. For all the aforesaid reasons, the writ petition is dismissed, without, however, any order as to costs. Petition dismissed