Saurya Construction Pvt. Ltd. v. State of Jharkhand
2014-07-08
R.R.PRASAD
body2014
DigiLaw.ai
ORDER 1. A notice inviting tender was issued on 31.1.2013 whereby and whereunder applications were invited for construction of a check dam over Hinoo Nala. The petitioner, engaged in construction work registered under the Water Resources Department since 25.10.2002, submitted its bid documents along with necessary certificates. Bid was opened on 28.2.2013 for scrutinizing technical as well as price bid of all the bidders. During which, it was found that rate quoted by all the bidders is the same. In that event, according to the petitioner, work order, as per the policy decision, should have been awarded to the petitioner who had had more experience in the field than others. But even after passing off two months, when the work order was not issued in favour of the petitioner, the petitioner filed this application praying therein to direct the respondent to issue work order in favour of the petitioner. However, while the matter was pending, work order was awarded to M/s. Foyal Fort Engicon Private Limited, vide order dated 30.4.2013 as contained in Memo No.894. In that event, that order was challenged by way of Interlocutory application, bearing no.3677 of 2013. At the same time, the person to whom the work order was issued was also allowed to be impleaded as respondent no.6. Subsequently, the petitioner came to know that the petitioner has been denied work order on the pretext that the petitioner had failed to complete the work allotted to him earlier. 2. Being aggrieved with the action of the respondents of not awarding work to the petitioner, rather awarding the work to the respondent no.6, who was not eligible in terms of NIT to be awarded with work and thereby according to the petitioner it was arbitrariness. 3. Mr.S.N.Prasad, learned counsel appearing for the petitioner submits that respondent no.6 was not even eligible to be awarded with work as in terms of one of the conditions of the NIT, he was supposed to submit the bid paper along with labour license but he did not do so. In spite of that, he was awarded work and was asked to submit labour license which he did submit later on and thereby act of respondents is not only discriminatory but also arbitrary and on this ground alone, the order under which work has been awarded to the respondent no.6 is fit to be quashed. 4.
In spite of that, he was awarded work and was asked to submit labour license which he did submit later on and thereby act of respondents is not only discriminatory but also arbitrary and on this ground alone, the order under which work has been awarded to the respondent no.6 is fit to be quashed. 4. In this regard, learned counsel referred to a decision rendered in a case of Maa Binda Express Carrier and another vs. Northeast Frontier Railway and others ( AIR 2014 SC 390 ) holding therein that in the matter relating to tender the court is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to detriment of public interest. 5. Further it was submitted that the since petitioner was the most experienced contractor, the work should have been awarded to the petitioner but his claim was rejected for the reason that the petitioner did not complete the work which has been awarded to him earlier but that ground is baseless for the reason that the petitioner had entered into an agreement for executing work for the estimated amount of Rs.1,41,27,202/-. After the work was executed, the petitioner was asked to do additional work which he did and raised bills amounting to Rs.1,83,63,201/-and as against that, a sum of Rs.1,62,46,282/-has already been paid from which it is quite obvious that the work awarded to the petitioner has been executed and even the payment not only of the estimated amount but more than that has been paid on account f additional work being done. 6. Thus, it was submitted that in these circumstances, work order issued to the respondent no.6 be set aside and the respondents be directed to award the work to the petitioner. 7. As against his, learned counsel appearing for the State submits that none of the grounds taken on behalf of the petitioner on the basis of which, work order is being sought to be quashed, is tenable. 8.
7. As against his, learned counsel appearing for the State submits that none of the grounds taken on behalf of the petitioner on the basis of which, work order is being sought to be quashed, is tenable. 8. In this regard, it was submitted that the stand which has been taken on behalf of the petitioner is that since the petitioner did not submit labour license along with bid papers his bid was not worth considerable in terms of clause 9 of the NIT but the import of the said clause is not like that rather it simply says that if the bidder will not deposit the labour license, his bid may be rejected. 9. In this regard, it was further submitted that the respondent no.6 at the time of submission of the bid papers could not have submitted labour license as the labour license, in term of the decision taken on 12.11.2012 (Annxure A) under the Chairmanship of the Labour Commissioner, is to be issued only when the work order is issued to a person and that upon work being awarded when labour license was issued the same was submitted within the time and that the work order had been issued before the order of stay was passed by this Court and that the respondent had already executed the work to a considerable extent. 10. It was further submitted that the petitioner had earlier been awarded work which was supposed to be completed by 30.4.2011 but the aforesaid work has not been completed by the petitioner uptil now, in spite of several notices being issued to him for completing the work. Instead of having completion certificate, the petitioner is taking plea of completing the work on the basis of payment made which may not be a ground for showing completion of the work. 11. Thus, it was submitted that the action of the respondents was quite fair, reasonable and was in public interest and under the circumstances, no interference is warranted. 12. Before adverting to the submissions advanced on behalf of the parties, it be stated that Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in the public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the Government.
It has to act reasonably, fairly and in the public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the Government. All that he can claim is that in competing for the contact, he should not be unfairly treated and discriminated, to the detriment of public interest. At this stage, I may refer to a decision rendered in a case of Jagdish Mandal vs. State of Orissa and others [(2007) 14 SCC 517] wherein Their Lordships have come to the following conclusion: “ 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 contacts, 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, courts 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.
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. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action”. 14. Keeping in view the aforesaid principle of law laid down by the Hon’ble Supreme Court one is to scrutinize as to whether act of the respondent smock arbitrariness or unreasonableness in awarding contract to the respondent no.6. 15. The main plank of the argument of the petitioner is that the respondent no.6 did not comply the terms of the NIT as stipulated under Clause 9, still work has been awarded to it which is quite illegal. Clause 9 of the NIT reads as follows: “ Scanned copy of Sales Tax/Income Tax clearance certificate, Labour License and Letter of Registration as contractor shall be uploaded by the tenderer or otherwise it may be rejected. “ 16. On reading the same, it never does appear to me that in absence of documents, referred to above in the said clause, bid papers were necessarily to be rejected as the clause appearing therein reads as ‘it may be rejected’. 17. Moreover, the authorities did find that there has been reason on the part of the respondent not to submit labour license along with bid paper as they did find that in terms of the resolution taken under the Chairmanship of Labour Commissioner, such certificate is to be issued to a person only when work is awarded to him. 18.
17. Moreover, the authorities did find that there has been reason on the part of the respondent not to submit labour license along with bid paper as they did find that in terms of the resolution taken under the Chairmanship of Labour Commissioner, such certificate is to be issued to a person only when work is awarded to him. 18. In such situation, acceptance of the bid paper of respondent no.6 cannot be said to be an act of arbitrariness or discriminatory. In that event, none of the grounds as determined by their Lordships in a case referred to above empowering the court to interfere with the process of tender gets attracted out. 19. Going further in the matter, it be recorded that the petitioner has been putting forth claim of work being awarded to him on the basis of his experience which claim has wrongly been rejected on the pretext of non-completing the work. 20. Since the payment more than the amount which was subject matter of an agreement has been paid stand which is being taken by the petitioner is that work awarded earlier had been completed but according to the stand taken by the State that would not be sufficient to show that the work has been completed, rather on issuance of the completion certificate, one finds that work has been completed. The petitioner had never been issued with the completion certificate. 21. I need not to adjudicate the issue as to whether the work has been completed or not for simple reason that the petitioner cannot claim work to be awarded to him as a matter of right as has been held by the Hon’ble Supreme Court in number of cases. At the same time, it has also been well established that the State can chose its own method to arrive at a decision and is free to grant any relaxation for bona fide reason, it tender condition permits such a relaxation. However, the State, its corporation, instrumentalities and agencies have the public duty to be fair to all concerned. 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 making of it. 22.
However, the State, its corporation, instrumentalities and agencies have the public duty to be fair to all concerned. 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 making of it. 22. The Hon'ble Court has been pleased to hold that the court should always keep larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to conclusion that overwhelming public interest requires interference, the court should intervene . 23. In this regard, I may refer to a decision rendered in a case of AIR India Limited vs. Cochin International Airport and others [ (2000) 2 SCC 617 ]. 24. It has already been indicated that the decision made by the authority in awarding contract, in the facts and circumstances mentioned above, never appears to be mala fide. 25. Accordingly, I do not find any merit in this application and hence, it is dismissed.