Pranab Jyoti Boruah v. State of Arunachal Pradesh & Ors.
2014-10-31
INDIRA SHAH
body2014
DigiLaw.ai
1. Heard Mr. A. Sarma, learned counsel, and Mr. Taba Tagum, learned counsel, for the petitioner. Also heard Mr. R.H. Nabam, learned Senior Government Advocate, for State respondent Nos. 1 to 7; Mr. Gimi Tarak, learned counsel, for private respondent No. 8; as well as Mr. B.C. Das, learned senior counsel, assisted by Mr. S. Dutta, learned counsel, for private respondent No. 9. 2. By filing this writ petition under article 226 of the Constitution of India, the petitioner has challenged the selection of private respondent No. 9 for awarding/allotment of construction of Road from Nimte to Longpak (Stage-I) under Package No. AR/07/04/035 It is seen that the Department of Rural Works Department, through the Executive Engineer, RWD Papum Poma Division, floated Notice Inviting Tender dated 17.1.2014 for execution of numerous projects including the project, mentioned above, under Pradhan Mantri Gram Sadak Yojana ('PMGSY') Scheme. It has been contended by the petitioner that Rules for Enlistment of Contractors in CPWD 2005, published in CPWD Work Manual, 2007; and Arunachal Pradesh Enlistment of Contractors in Works Department Rules, 2008 prohibit the contractors whose near relatives are working as Engineer Officer between the grades of Superintending Engineer and Junior Engineer (both inclusive) to bid for the works in the concerned Circle. 3. The petitioner along with 2 other bidders, participated in the tender process, in question, which was floated by the authorities concerned vide NIT dated 17.1.2014. The technical bids for the work, in question, was opened by the respondent-authorities, on 14.2.2014. The petitioner and the private respondent No. 9, herein, were allowed to proceed for the financial bids. The petitioner came to know during the bid proceedings that the said private respondent No. 9 is the real brother of private respondent No. 8. Aggrieved by the same, the petitioner submitted a representation before the Superintending Engineer, Rural Works Circle, Itanagar, on 15.2.2014, praying for rejection of the tender submitted by the private respondent No. 9, on the ground of violation of clause 12 of the said NIT inasmuch as the said private respondent No. 9 is the real younger brother of private respondent No. 8 who is serving as the Assistant Engineer, Rural Works Sub-Division, Sagalee, under Papum Poma Division. But the said representation was not considered by the authorities concerned.
But the said representation was not considered by the authorities concerned. The financial bids of the petitioner and private respondent No. 9 were opened on 22.2.2014 and it was found that financial bids of both bidders, were same and of equal amounts. However, much to the surprise of the petitioner, his financial bids was rejected by the authorities concerned as non-responsive. On the contrary, the private respondent No. 9 who is not even eligible to participate in the said tender process, in view of clause 12 of the NIT, has been recommended for allotment/award of the road project, in question. The petitioner, thereafter, lodged another representation before the Chief Executive Officer, Rural Works Department, Government of Arunachal Pradesh, Itanagar, on 3.3.2014, however, the said representation has also not been considered by the authorities concerned. It is averred-in the writ petition that the private respondent No. 8, aforesaid, is the official/officer in-charge of the said Sub-Division where the aforementioned project is likely to be executed. Though private respondent No. 9 is the real brother of the said respondent No. 8, however, the Evaluation Committee, most illegally and arbitrarily, has recommended the name of the said private respondent No. 9 for allotment/award of the work, in question, thereby violating the terms and conditions of the said NIT and Rules for Enlistment of Contractors in CPWD 2005, published in CPWD Work Manual, 2007; and Arunachal Pradesh Enlistment of Contractors in Works Department Rules, 2008. 4. The private respondent No. 9 has raised preliminary objection as regards maintainability of the petition and locus standi of the petitioner. The writ petition has been filed in the name of M/s. Pranab Jyoti Boruah, as writ petitioner, by one Mr. Techi Godum Tara, claiming himself as the power of attorney holder of the writ petitioner. The tender in respect of the project, in question, was submitted in the name of M/s. Pranab Jyoti Boruah. This court, while granting an interim order, on 6.3.2014, permitted the petitioner to bring on record, the power of attorney/ authority letter, granted to Mr. Tara, who is claiming himself as the power of attorney holder of the petitioner. In compliance to the above order, the petitioner filed an additional affidavit enclosing the power of attorney in favour of said Mr. Tara by M/s. Pranab Jyoti Boruah, on 5.3.2014. It is seen that Mr.
Tara, who is claiming himself as the power of attorney holder of the petitioner. In compliance to the above order, the petitioner filed an additional affidavit enclosing the power of attorney in favour of said Mr. Tara by M/s. Pranab Jyoti Boruah, on 5.3.2014. It is seen that Mr. Tara had filed representations before the Superintending Engineer, Rural Works Circle, Itanagar, on 15.2.2014, and before the Chief Executive Officer, RWD, Government of Arunachal Pradesh, Itanagar, on 3.3.2014. 5. It is submitted by the learned counsel for the private respondent No. 9, that the representations filed by Mr. Tara are non est both in fact and in law, as on the date of filing the representations before the authorities concerned, as stated above, Mr. Tara, had no authority to file such representation(s). The said respondent No. 9 has contended that M/s. Pranab Jyoti Baruah had participated in the tender process without any protest and took a chance of favourable consideration of his bid. Since M/s. Pranab Jyoti Baruah (writ petitioner) had participated in the tender process without any protest, he, therefore, cannot legally challenge the tender process, in question, and by filing the instant writ petition, the petitioner is promoting a proxy litigation and, therefore, it has been contended by the private respondent No. 9, that this writ petition suffers from mala fide as well as the vices of not approaching the court with clean hands. To support the above contentions, the following citations have been relied upon by the learned counsel for the respondent No. 9: (1) Dr. Kamala Kanta Kalita and Anr. v. Assam Cricket Association and Ors., 2006 (1) GLT 528. (2) B.M. Composite Farm v. State of Assam and Ors., 2006(2) GLT 796. (3) Bhagirath Patowari v. Gauhati University and Ors., 2006 Supp (1) GLT 689. (4) Kishore Samrite v. State of U.P. and Ors., (2023) 2 SCC 398. (5) T.N. Rugmani and Anr. v. C. Achutha Menon and Ors., (1991) Supp. (1) SCC 520. (6) U. Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed and Ors., (1976) 1 SCC 671 . (7) Adi Pherozshah Gandhi v. H.M. Seervai, Advocate General of Maharashtra, Bombay, (1970) 2 SCC 484 . (8) Pratap Singh v. Krishna Gupta, AIR 1956 SC 140 . (9) Kailash v. Nanhku and Ors., (2005) 4 SCC 480 . (10) Mumtaz Laskar v. State of Assam and Ors., 2006 (1) GLT 9.
(7) Adi Pherozshah Gandhi v. H.M. Seervai, Advocate General of Maharashtra, Bombay, (1970) 2 SCC 484 . (8) Pratap Singh v. Krishna Gupta, AIR 1956 SC 140 . (9) Kailash v. Nanhku and Ors., (2005) 4 SCC 480 . (10) Mumtaz Laskar v. State of Assam and Ors., 2006 (1) GLT 9. (11) Mumtaz Rana Laskar and Ors. v. State of Assam and Ors., 2006 (1) GLT 46. (12) Dove Investments (P.) Ltd. and Ors. v. Gujarat Industrial Investment Corpn. and Anr., (2006) 2 SCC 619 . 6. It is further submitted by the learned counsel for the respondent No. 9 that in a tender process, the main objective of the tendering authority is to get the best of the eligible lot and for that, eligibility conditions are prescribed. The procedural conditions both mandatory and subsidiary or ancillary are prescribed in law to ensure fairness and transparency in the whole process for selecting the best. In the NIT, barring clauses 1 and 11, all the other clauses are of procedure only, thus, some of which are mandatory and whereas the others are directory in nature. Clauses 1 and 11 deal with eligibility conditions of a bidder. According to the respondents, clause 12 of the said NIT, is merely directory in nature and if it is interpreted as mandatory, it will only allow creation of a class within a class arid, thus, constituting unreasonable classification and arbitrariness, which will violate article 14 of the Constitution of India. Moreover, clause 12 does not spell out the consequence as to what will happen, notwithstanding this condition, if a bid is submitted by the bidder, who may have a relative, as defined in the clause. 7. It is submitted by the learned counsel for the respondent No. 9 that “mention of the non-compliance" is one of the test to determine whether a condition is mandatory or- directory. If considering a condition as mandatory will lead to an absurd or inconvenient consequence then the condition must be construed as a directory even if it employs the word "shall". Whether condition is directory, would depend upon the object it seeks to achieve and unless prejudice is caused, a procedural condition must not be allowed as mandatory.
If considering a condition as mandatory will lead to an absurd or inconvenient consequence then the condition must be construed as a directory even if it employs the word "shall". Whether condition is directory, would depend upon the object it seeks to achieve and unless prejudice is caused, a procedural condition must not be allowed as mandatory. Per following paragraphs of the relevant authorities as cited by the petitioner in favour of his above contentions, are reproduced below: (1) Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617 , paragraph No.-7 "7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this court in Ramona Dayaram Shetty v. International Airports Authority of India, Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, CCE v. Dunlop India Ltd., Tata Cellular v. Union of India, Ramniklal N. Bhutta v. State of Maharashtra and Raunaq International Ltd. v. IVR Construction Ltd. The award of a 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 considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not-accept the offer even though it happens to be the highest or the lowest. But 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. Though that decision is not 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. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned.
Though that decision is not 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. The State, its corporations, 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 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 internven. (2) M/s. S.K. Rai and Anr. v. Union of India and Ors., 2002(3) GLT 463, paragraph No. 52 : "52. Normally, tender of each party must be considered on the basis of the conditions specified in the NIT and no departure, unless permitted by any clause of the conditions, can be entertained. However, when the conditions are not relaxed and it is projected that the conditions have been satisfied, whereas the conditions, are, in fact, not satisfied at all, one can have no conclusion other than the one that the authority awarding contract either acted mala fide or irrationally and/or arbitrarily. In the case at hand, the official respondents deny that they had relaxed the conditions of the NIT. What they assert is that the respondent No. 6 had produced documentary proof of required number (and type) of vehicles and coupled with this, they had the experience of having worked with SAIL, which, is a Government of India undertaking. Both these explanations offered are, as indicated above, falsified by the materials on record." (3) D.S. Trading v. Padum Gogoi and Ors., 2002(3) GLT 653, paragraph No. 15: "15. The defects ingrained in the impugned decision are undoubtedly grave in nature. Therefore, it is to be seen whether interference with the decisions taken by the authority would be permissible in public interest. We have been told at the Bar that the project is meant for establishment of a Centre for International Trade with Bangladesh at the border town of Suterkandi, and the Central Government is also pressing hard for early completion thereof.
We have been told at the Bar that the project is meant for establishment of a Centre for International Trade with Bangladesh at the border town of Suterkandi, and the Central Government is also pressing hard for early completion thereof. It is has been further brought to our notice that the Trade Agreement with Bangladesh is yet to be signed and the construction of the Trade Centre will take about two years from now. It that be so, two/three months further delay in the matter will definitely not be contrary to public interest. This is a case; where the authority exceeded its powers; and acted in total deviation from the NIT specifications. The breach of the rules of natural justice is manifest in the proceeding of the Expert Committee and the decisions taken to allot the contract with the respondent No. 4 was in abuse of powers. Mala fide and arbitrariness emerge as disturbing factors in the tender process floated by the State and its instrumentalities. In the result, law is the victim. If such brazen and glaring mala fide and arbitrary exercise of powers by the State and its instrumentalities are allowed to survive in the realm of public projects and properties, it will lead to rampant abuse of powers by the State and its instrumentalities adversely affecting thereby public cause and pubic interest. Viewed from this angle, public interest and rule of law will be the ultimate casualties of such abuse of powers unless the court chooses to interfere. The case at hand is not of mere technicalities. They changed the rules of the game after the game started to favour a particular invalid tenderer. We have considered the matter in-depth and are of the opinion that it would be contrary to the cause of justice if we reconcile with the decision making process in the instant case where there is no pressing public interest. Delay in execution, escalation of costs and freedom of executive in economic matters cannot always act as safety valves where breach of law is shocking. Hence, we decide to intervene." (4) Mysore Agro Chemical Company (P.) Ltd. and Anr. v. Union of India and Ors., 2007(3) GLT 810, paragraph No. 19 : "19. The parameters of judicial review under article 226 of Constitution of India have been authoritatively outlined in decisions out of number.
Hence, we decide to intervene." (4) Mysore Agro Chemical Company (P.) Ltd. and Anr. v. Union of India and Ors., 2007(3) GLT 810, paragraph No. 19 : "19. The parameters of judicial review under article 226 of Constitution of India have been authoritatively outlined in decisions out of number. This court in Educamp Solutions Ltd. (supra), on a review of some momentous pronouncements thereon recounted that an administrative authority even in the matter of entering into a contract is required to act fairly and its action has to be legitimate and fair without any aversion, malice or affection. Not only it is debarred from acting arbitrarily at its sweet will like a private individual, its action must be in conformity with the standards or norms which are non-arbitrary, rational or relevant. The power of judicial review, it reiterated, was intended to prevent arbitrariness or favoritism in larger public interest. It the decision in R. (Mohmood) v. Secretary of State for the Home Dept., (2001) 1 WLR 840 underlining that the intensity of review in a public law case will depend on the subject-matter in hand. It noticed the dominion of tender stipulations as recognized by the Apex Court in West Bengal Electricity Board v. Patel Engineering Co. Ltd., AIR 2001SC 682, wherein it was proclaimed that the very purpose of issuance of rules/instructions was to ensure their enforcement lest the rule of law be a casualty. It held that unless expressly provided the relaxation or waiver of a rule or condition by the State or its agencies in favour of one bidder would create justifiable doubt in the minds of other bidders and, thus, impair the rule of transparency and fairness. The power of judicial review in essence is to rein in unbridled administrative discretion, act or decision. A Constitutional Court is to act as a sentinel on the qui vive against imperious executive functioning to sustain the rule of law. The attending facts and circumstances in my considered opinion demonstrate a decision making process obtrusively incompatible with the above presidential tenets of a valid administrative action. In Subhash Projects and Marketing Ltd. (supra), the appellant in the contextual facts was held to have been wrongly settled with the work of water intake and plant water system package under the Bakereshwar Thermal Power Project by the West Bengal Power Department Corporation Limited.
In Subhash Projects and Marketing Ltd. (supra), the appellant in the contextual facts was held to have been wrongly settled with the work of water intake and plant water system package under the Bakereshwar Thermal Power Project by the West Bengal Power Department Corporation Limited. The Apex Court while sustaining the said conclusion of the Division Bench of the jurisdictional High Court also upheld a direction thereof, to the appellant to pay a sum of Rs. 1 crore to the writ petitioner, M/s. Larson and Toubro for having been illegally denied the contract. This the Division Bench had ordered to make the appellant disgorge at least some portion of the profit earned by it out of the illegally awarded contract to be made available to the writ petitioner as compensation, who ought to have been awarded the same." 8. Turning to this case, it appears from the minutes of financial bids opening that the owner of M/s. Pranab Jyoti Boruah was present in the bidding process who participated in the entire bid proceeding. On perusal of the power of attorney in favour of Techi Godum Tara who is representing M/s. Pranab Jyoti Boruah shows that Sri Pranab Jyoti Boruah executed the power of attorney for the purpose of performing the construction of tender work if the work is allowed and also to represent the petitioner of M/s. Pranab Jyoti Boruah in any litigation. The said power-of-attorney was executed on 5.3.2014 and this writ petition has been filed on 6.3.2014. The respondent Nos. 1 to 6, in their counter affidavit, have averred that the Firm M/s. R.T. Techi, has been represented by its power-of-attorney holders and not by respondent No. 9, therefore, the provisions of NIT and rule 17 of Rules of Enlistment of Contractors-in CPWD, 2005, and are not attracted or violated as claimed by the petitioner. 9. The power-of-attorney holder of respondent No; 9 are mere attorney to the respondent No. 9 and therefore, they had no independent and separate entity. As per the respondents, clause 12 of the NIT is not mandatory and only directory. Several judgments have been cited by the learned counsel for the State respondents wherein judicial observations have been made with regard to language used in the Statute which has been interpreted by the Apex Court as directory though the language used therein is constructed by using the word "shall".
Several judgments have been cited by the learned counsel for the State respondents wherein judicial observations have been made with regard to language used in the Statute which has been interpreted by the Apex Court as directory though the language used therein is constructed by using the word "shall". The cases, have not dealt with the terms and conditions of any NIT. On a bare reading of clause 12, it cannot be interpreted that this clause is only directory and not mandatory. The Division Bench of this court in D.S. Trading (supra) and S.K. Rai (supra) has observed that normally tender of each party must be considered on the basis of the conditions specified in the NIT and no departure, unless permitted by any clause or condition can be entertained. However, when the conditions are not relaxed and it is prejudiced that conditions have been satisfied whereas the conditions are, in fact, not satisfied at all, one can have no conclusion other than that the authority acted mala fide, irrationally and/or arbitrarily. The authority cannot change the rules of the game after the game started to favour a particular invalid tender. 10. In view of the foregoing discussions, it transpires that the respondent authorities had violated their own terms and conditions of the NIT, in question, by awarding the work order in favour of private respondent No. 9. Therefore, the impugned order dated 22.2.2014 is liable to be set aside and quashed. Accordingly, the impugned order dated 22.2.2014; in this matter, is hereby set aside and quashed. Resultantly, the respondent-authorities are hereby directed to recommend the financial bids of the petitioner Sri Pranab Jyoti Boruah, and to award the project "construction of road from Nimte to Longpak (Stage-I) under Package No. AR/07/04/035", to him, he being the eligible bidder, without any delay. 12. With the above directions, this writ petition stands disposed of. Interim order, if any, passed by this court earlier, shall stand merged with this order.