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2014 DIGILAW 540 (HP)

Ashok Thakur v. State of Himachal Pradesh

2014-05-06

MANSOOR AHMAD MIR, TARLOK SINGH CHAUHAN

body2014
JUDGMENT : TARLOK SINGH CHAUHAN, J. : ” The petitioner has filed the present writ petition under Article 226 of the Constitution of India praying for quashing of the cancellation order Annexure P-18 and Notice inviting re-tender Annexure P-20 and also for deleting the pre-qualification Condition No. 28.2.b contained in the tender document. 2. The facts, in brief, may be noticed as follows: the respondent No.3 on behalf of the Government of Himachal Pradesh invited the item rate bids for the construction of works namely Construction of Link Road NH-70 Kaloor to Kohla-Nadaun Amtar Bilvkale-shwar road K.M. 0/0 to 10/360. (SH:5/7 meter wide formation cutting, C.D. work, providing and laying G-1, G-II, G-III and tarring, Parapets and V-Shape drain in K.M. 0/0 to 10/360) under NABARD RIDF-XVIII) with estimated cost of `4,31,92,012/- . In all six contractors participated in the tender process. It is averred that the technical bid was to be opened online on 5-9-2013 at 11.00 a.m. as stipulated and the financial bid was opened on 11-9-2013 at 11.00 a.m. The petitioner was the lowest bidder who had submitted the bill at `3,99,99,230.54 p. Whereas Shri Gian Chand, respondent No. 4, was the second lowest bidder at `4,10,25,600.89 p. and Shri Deepak Joshi, respondent No. 5, was the fifth lowest bidder at `4,75,44,687.30 p. 3. It is also averred that on opening of the technical bid on 5-9-2013, the eligibility information submitted by all the bidders was opened and scrutinized by the Evaluation Commitee headed by the respondent No. 3 Executive Engineer and the information pertaining to all the bidders was available online in the website of the respondent HPPWD. It is further pleaded that the financial bid was opened after five days on 11-9-2013 by the respondent No. 3 and in between five days, no objection of any sort qua the eligibility of the petitioner was raised otherwise or in writing made to the respondent Nos. 1 to 3 by any participating bidders. It is pleaded that after the financial bid was opened and the petitioner emerged to be the lowest bidder and successful in the tendering process, the petitioner was declared successful bidder by the respondent No. 3, who intimated the same to the petitioner through system generated text message sent to the petitioner. 4. 1 to 3 by any participating bidders. It is pleaded that after the financial bid was opened and the petitioner emerged to be the lowest bidder and successful in the tendering process, the petitioner was declared successful bidder by the respondent No. 3, who intimated the same to the petitioner through system generated text message sent to the petitioner. 4. That vide letter dated 12-9-2013, the respondent No. 4 made a complaint to the Executive Engineer, H.P.P.W.D. Division, Hamirpur, on the ground that the performance of the petitioner was not satisfactory as the certificates of the work done attached for the qualifying of the bid did not meet the requirement of the conditions of tender as he had been penalized for the work attached as completed work. 5. On receipt of the complaint, the Executive Engineer, called for the information from the concerned authorities whereafter it transpired that in fact the petitioner had been penalized by way of liquidated damages by the Executive Engineer, NH Division, Hamirpur, which disqualified the petitioner being in violation of the pre-bid condition No. 28.2.b of the general rules of the tender document. The matter was placed by the Executive Engineer concerned before the Superintending Engineer, 8th Circle, H.P.P.W.D. where it was considered and decided that the factual position of the case be brought to the notice of the Zonal Chief Engineer, so that finality of this bid process may be done and work to be awarded to the petitioner despite his being L-1 may be cancelled because of concealment of materials facts. 6. The Office of the Zonal Chief Engineer considered the entire matter vide letter dated 9-10-2013 and conveyed its decision to the effect that the petitioner had not fulfilled the eligibility criteria conditions 28.2.a and 28.2.b and as such the tender of the petitioner required rejection and recall at this stage. Based upon the decision taken by the Zonal Chief Engineer, the tender wherein the petitioner was the lowest was cancelled vide order dated 11-11-2013 and fresh tenders were invited. 7. The respondents in their reply have not denied the factual aspects and have pointed out that in fact the petitioner had concealed the fact that he been imposed liquidated damages. Based upon the decision taken by the Zonal Chief Engineer, the tender wherein the petitioner was the lowest was cancelled vide order dated 11-11-2013 and fresh tenders were invited. 7. The respondents in their reply have not denied the factual aspects and have pointed out that in fact the petitioner had concealed the fact that he been imposed liquidated damages. It is further submitted in the reply that in case respondent No. 4 had not filed a complaint with the respondent No. 3 bringing to his notice all these facts, then the petitioner by concealment of facts would have been awarded the tender in question. The petitioner was ineligible for even being considered for the tender as per the condition Nos. 28.2.a and 28.2.b which read as under :” ' 28.2.a : Bidding Capacity :” Bidders who meet the minimum qualification criteria will be qualified only if their assessed available bid capacity for construction of works is equal to or more than the total bid value. The available bid capacity will be calculated as under' . Assessed Available Bid Capacity = (AxNxM-B) A= Maximum value of civil engineering works executed in any one year during the last five years (updated to the price level of the financial year in which bids are revised at the rate of 8 percent a year) taking into account the completed as well as works in progress. 28.2.b Minimum Work done condition :” Minimum one similar work done of amount not less than 40% (forty percent) of the estimated cost (without liquidated damage or compensation) in last five years' . The respondents have accordingly prayed for dismissal of the writ petition. 8. At the outset, it may be stated that this Court would interfere in tender or contractual matters in exercise of power of judicial review only in case the process adopted or decision made by the authority is mala fide or intended to favour someone or the process adopted or decision made is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with relevant law could have reached and lastly in case the public interest is affected. If the answers to these questions are in the negative, then there should be no interference by this Court in exercise of its powers under Article 226 of the Constitution of India. 9. If the answers to these questions are in the negative, then there should be no interference by this Court in exercise of its powers under Article 226 of the Constitution of India. 9. In Tata Cellular v. Union of India (1994) 6 SCC 651 : ( AIR 1996 SC 11 , P. 32 para 113) the Hon” ble Supreme Court emphasized the need to find the right balance between administrative discretion to decide the matters, on the one hand, and the need to remedy and unfairness, on the other, and observed : (SCC pp 687-88, para 94). ' (1) The modem trend points 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 than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle (1948) 1 KB 223 : (1947) 2 All PR 680 (CA) of reasonableness (including its other facets 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' . 10. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure' . 10. In Raunaq International Limited v. I.V.R. Construction Ltd. (1999) 1 SCC 492 , : ( AIR 1999 SC 393 ) the Hon” ble Supreme Court reiterated these principles governing the process of judicial review and held that the writ Court would not be justified in interfering with commercial transactions in which the State is one of the parties to the same except where there is substantial public interest involved and in cases where the transaction is mala fide. The elements of public interest were spelled out as under :” ' 10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work - thus involving larger outlays of public money and delaying the availability of services, facilities or goods, e.g., a delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation' . 11. 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. The Court should always keep the larger public interest in mind 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. This was so held by the Hon” ble Supreme Court in Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617 : ( AIR 2000 SC 801 ). 12. Only when it comes to a conclusion that overwhelming public interest requires interference the Court should intervene. This was so held by the Hon” ble Supreme Court in Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617 : ( AIR 2000 SC 801 ). 12. In Aruna Rodrigues and others v. Union of India and others 2012 AIR SCW 3340, it was observed by the Hon” ble Supreme Court that the Court who have no expertise to determine the issues of technical nature should not venture into determining such questions and it was held as under :” ' 2. This Court, vide its order dated 1st May, 2006, directed that till further orders, field trials of GMOs shall be conducted only with the approval of the Genetic Engineering Approval Committee (for short ' GEAC” ). I. A. No. 4 was filed, in which the prayer was for issuance of directions to stop all field trials for all genetically modified products anywhere and everywhere. The Court, however, declined to direct stoppage of field trials and instead, vide order dated 22nd September, 2009 directed the GEAC to withhold approvals till further directions are issued by this Court, after hearing all parties. Except permitting field trials in certain specific cases, the order dated 1st May, 2006 and 22nd September, 2009 were not substantially modified by the Court. As of 2007, nearly 91varieties of plants, i.e., GMOs, were being subjected to open field tests, though in terms of the orders of this Court no further open field tests were permitted not had the GEAC granted any such approval except with the authorization of this Court. This has given rise to serious controversies before this Court as to whether or not the field tests of GMOs should be banned, wholly or partially, in the entire country. It is obvious that such technical matters can hardly be the subject- matter of the judicial review. The court has no expertise to determine such an issue, which, besides being a scientific question, would have very serious and far-reaching consequences' . 13. In Michigan Rubber (India) Limited v. State of Karnataka and others (2012) 8 SCC 216 : ( AIR 2012 SC 2915 ), the Hon” ble Supreme Court held as under :” ' 35 ........ The court has no expertise to determine such an issue, which, besides being a scientific question, would have very serious and far-reaching consequences' . 13. In Michigan Rubber (India) Limited v. State of Karnataka and others (2012) 8 SCC 216 : ( AIR 2012 SC 2915 ), the Hon” ble Supreme Court held as under :” ' 35 ........ As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitray, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical ..........' 14. In Heinz India (P) Ltd. and another v. State of U.P. and others (2012) 5 SCC 433 : (AIR 2012 SC (Civ) 1169) the Hon” ble Supreme Court examined the legal dimensions of judicial review and quoted with approval the following passage from Reid v. Secy. of State for Scotland (1999) 1 All ER 481. ' Judicial review involves a challenge to the legal validity of the decision. It does not allow the court of review to examine the evidence with a view to forming its own view about the substantial merits of the case. It may be that the tribunal whose decision is being challenged has done something which it had no lawful authority to do. It may have abused or misused the authority which it had. It may have departed from the procedures which either by statute or at common law as a matter of fairness it ought to have observed. As regards the decisions itself it may be found to be perverse, or irrational or grossly disproportionate to what was required. Or the decision may be found to be erroneous in respect of a legal deficiency, as for example, through the absence of evidence, or of sufficient evidence, to support it, or through account being taken of irrelevant matter, or through a failure for any reason to take account of a relevant matter, or through some misconstruction of the terms of the statutory provision which the decision-maker is required to apply. But while the evidence may have to be explored in order to see if the decision is vitiated by such legal deficiencies it is perfectly clear that in case of review, as distinct from an ordinary appeal, the court may not set about forming its own preferred view of evidence' . The aforesaid principles were thereafter reiterated in M/s. Siemens Aktiengeselischaft and S. Ltd. v. DMRC Ltd. and Ors., JT 2014 (3) SC 290 : ( AIR 2014 SC 1483 ). 15. The Hon” ble Supreme Court in Pathan Mohammed Suleman Rehmatkhan v. State of Gujarat and others (2014) 4 SCC 156 has acknowledged the authority of the State in matters of policy and decision making in the following terms:” ' 10.......But we cannot lose sight of the fact that it is the Government which administers and runs the State, which is accountable to the people. The State” s welfare, progress, requirements and needs of the people are better answered by the State, also as to how the resources are to be utilized for achieving various objectives. If every decision taken by the State is tested by a microscopic and a suspicious eye, the administration will come to a standstill and the decision-makers will lose all their initiative and enthusiasm. At hindsight, it is easy to comment upon or criticize the action of the decision-maker. Sometimes, decisions taken by the State or its administrative authorities may go wrong and sometimes they may achieve the desired results. Criticisms are always welcome in a parliamentary democracy, but a decision taken in good faith, with good intentions, without any extraneous considerations, cannot be belittled, even if that decision was ultimately proved to be wrong' . 16. Now adverting to the present case. The petitioner has preferred this petition inter alia on the grounds that the respondents cannot alter or restrict the tender conditions by insisting the compliance of the pre-qualification criteria involved in Annexure P-2. The pre-qualification criteria is not a standard qualification criteria and in fact has not been adopted in other parts of the State. It is further contended that the pre-qualification criteria was required to be seen at the time of opening of the technical bid on 5-9-2013 and not thereafter and such belated objection to deprive the petitioner of the contract could not have been entertained. It is further contended that the pre-qualification criteria was required to be seen at the time of opening of the technical bid on 5-9-2013 and not thereafter and such belated objection to deprive the petitioner of the contract could not have been entertained. It is also contended that though Iiquidated damages and compensation had in fact been imposed on the petitioner but this matter had already been questioned before the Arbitrator. Therefore, once the amount of penalty had not been finally determined and the question was sub-judice before the Arbitrator or Court of law, therefore, no action in terms of Clause 28.2.b could have been taken against the petitioner. This has been done to give undue benefit to the respondent Nos. 4 and 5. It is further contended that such condition of ' without liquidated damages or compensation' cannot be permitted to be incorporated in the tender document since this would mean that the contractor is disqualified for the next five years from participating in any tendering process, thus, rendering him workless and thereby infringing his constitutional right to his livelihood. He lastly contends that the action of the respondents is illegal and unsustainable as it is contrary to the basic principles of natural justice. 17. On the other hand, the learned Advocate General has strenuously argued that neither legal nor fundamental right of the petitioner had been infringed because the petitioner has himself suppressed the material facts and had not come with clean hands before this Court by withholding the fact that liquidated damages had in fact imposed on him and, therefore, the petitioner was not eligible to even participate in the tender process what to talk of being awarded the tender. Therefore, according to the learned Advocate General, since the petitioner had with-held the necessary information with respect to the condition No. 28.2.b of the general rules of the tender, therefore, even if, the tender had been awarded to him, the same has been rightly cancelled. 18. Therefore, according to the learned Advocate General, since the petitioner had with-held the necessary information with respect to the condition No. 28.2.b of the general rules of the tender, therefore, even if, the tender had been awarded to him, the same has been rightly cancelled. 18. The learned counsel for the petitioner has heavily relied upon the judgment of the Hon” ble Supreme Court in J. G. Engineers Private Limited v. Union of India and another (2011) 5 SCC 758 : ( AIR 2011 SC 2477 para 17) to contend that the petitioner had already challenged the imposition of liquidated damages before the Arbitrator which proceedings were still sub-judice, therefore, there was no finality to the order of imposition of liquidated damages and consequently the mere imposition of liquidated damages by the department was of no consequence. For this purpose, he relied upon paragraphs 22 and 23 of the report which read thus :” ' 22. In view of the above, the question whether the appellant was responsible or the respondents were responsible for the delay in execution of the work, was arbitrable. The arbitrator has examined the said issue and has recorded a categorical finding that the respondents were responsible for the delay in execution of the work and the contractor was not responsible. The arbitrator also found that the respondents were in breach and the termination of contract was illegal. Therefore, the respondents were not entitled to levy liquidated damages nor entitled to claim from the contractor the extra cost (including any escalation in regard to such extra cost) in getting the work completed through an alternative agency. Therefore, even though the decision as to the rate of liquidated damages and the decision as to what was the actual excess cost in getting the work not completed through an alternative agency were excepted matters, they were not relevant for deciding Claims 1, 3 and 11, as the right to levy liquidated damages or claim excess costs would arise only if the contractor was responsible for the delay and was in breach. 23. In view of the finding of the arbitrator that the appellant was not responsible for the delay and that the respondents were responsible for the delay, the question of the respondents levying liquidated damages or claiming the excess cost in getting the work completed as damages, does not arise. 23. In view of the finding of the arbitrator that the appellant was not responsible for the delay and that the respondents were responsible for the delay, the question of the respondents levying liquidated damages or claiming the excess cost in getting the work completed as damages, does not arise. Once it is held that the contractor was not responsible for the delay and the delay occurred only on account of the omissions and commissions on the part of the respondents, it follows that the provisions which make the decision of the Superintending Engineer or the Engineer-in-charge final and conclusive, will be irrelevant. Therefore, the arbitrator would have jurisdiction to try and decide all the claims of the contractor as also the claims of the respondents. Consequently, the award of the arbitrator on Items 1, 3 and 11 has to be upheld and the conclusion of the High Court that award in respect of those claims had to be set aside as they related to excepted matters, cannot be sustained' . 19. We are afraid that this contention of the petitioner in the given facts and circumstances of the case cannot be accepted for more than one reasons. Admittedly, the petitioner concealed the fact of having been imposed liquidated damages and incurred disqualification in terms of condition No. 28.2.b of the tender document. Had not the respondent Nos. 4 and 5 disclosed this fact to the concerned authority, the petitioner would have been awarded the tender by concealment. 20. Further, in case the petitioner was at all aggrieved by the imposition of condition Nos.28.2.a and 28.2.b, then he ought to have questioned these conditions immediately on the floating of the tender before participating in the same. 21. Not only this, in case the petitioner was of the bona fide belief that he had not incurred the disqualification, then he ought to have mentioned the fact of his having incurred the disqualification along with the details (regarding the matter was then sub-judice before the Arbitrator) while submitting the tender. But, here in the present case the petitioner has not at all disclosed this fact and proceeded to participate in the tender process. 22. The case can be viewed from another angle. But, here in the present case the petitioner has not at all disclosed this fact and proceeded to participate in the tender process. 22. The case can be viewed from another angle. This is a case where the petitioner participated in the tender process with his eyes wide open and it is only after when the decision was taken to cancel the tender, he has approached this Court. Therefore, in such fact and circumstances, the petitioner is clearly estopped from filing the present petition. 23. This Court need not to burden the judgment any further as it is to be taken a settled law that after having consciously participated in the tender process, the petitioner is estopped from challenging any condition of the tender document. Reference however may be made to the judgment of the Hon” ble Supreme Court in M/s. Tafcon Projects Private Limited v. Union of India, AIR 2004 SC 949 . 24. It is equally settled law that the Court while exercising the writ jurisdiction exercises equitable jurisdiction. The estoppel stems from equitable doctrine and it requires that he who seeks equity must do equity. Not only this the person, who seeks equity, must come with clean hands. He, who comes to the Courts with false claims, cannot plead equity nor the Court would justify to exercise equity jurisdiction in his favour. A person, who seeks equity, must act in a fair and equitable manner. Equity jurisdiction cannot be exercised in a case of a person, who has concealed the facts. No sympathy and equitable consideration can come to his rescue. Even compassion cannot be shown in such cases. Compassion cannot be allowed to bend the arms of law in a case where an individual has tried to acquire the tender by concealing material facts. 25. It was a case of cancellation of tender and not blacklisting of the petitioner. In the given facts and circumstances of the case, it cannot even be held that there was denial of natural justice or fair play. 26. From all what we have discussed hereinabove, we find no merit in the present petition and the same is accordingly dismissed leaving the parties to bear their own costs. Petition dismissed.