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2015 DIGILAW 5 (MAN)

Huidrom Pahari Singh v. Food Corporation of India

2015-01-13

N.KOTISWAR SINGH

body2015
JUDGMENT N. Kotiswar Singh, J. 1. Heard Mr. R.K. Deepak, learned counsel for the petitioner and Mr. N. Ibotombi, learned senior counsel for the respondents. 2. In the present writ petition, the petitioner has sought for quashing the tender notification dated 19.1.2013 on the ground that the petitioner had been found to be the lowest tenderer in respect of the tender dated 31.10.2012 which was arbitrarily rejected and the authorities proceeded to float a fresh tender dated 19.1.2013 which is challenged herein. 3. The brief facts of the case, as may be relevant, may be mentioned. It has been stated that the petitioner is an experienced contractor engaged in the business of transportation and handling works relating to FCI under the name and style of M/s HP Agency of Wangkhei Angom Leikai, Imphal East, for the last many years. The petitioner had participated in a tender as per tender notice dated 31.10.2012 issued by the FCI authorities for the work of handling, loading/unloading, staking etc of sugar and food grains at Railhead Jiribam and FSC Jiribam for two years. 4. According to the petitioner, the petitioner submitted his bid which was found to be not only the lowest but was the only eligible amongst the bidders. However, the authorities without intimating the result thereof, refloated another tender on 19.1.2013. The petitioner claims that the retendering of the same work for which it was already tendered, by adding/clubbing with other work without intimating the result of the earlier tender, is not permissible. Accordingly, the petitioner has challenged the said second tender notice issued on 19.1.2013 on various grounds, including that the rejection of the lowest bid furnished by the petitioner in the first tender and refloating the same is arbitrary. The petitioner has alleged violation of principles of natural justice on the ground that no notice was issued to the petitioner for rejecting his lowest bid submitted in the first tender and also arbitrariness in rejecting his lowest bid. 5. The FCI authorities have filed their affidavit-in-opposition contesting the claim made by the petitioner. It has been submitted that though petitioner's bid was found to be lowest in the first tender which was notified on 31.10.2012, it was found to be on the higher side and accordingly, it was not accepted. 5. The FCI authorities have filed their affidavit-in-opposition contesting the claim made by the petitioner. It has been submitted that though petitioner's bid was found to be lowest in the first tender which was notified on 31.10.2012, it was found to be on the higher side and accordingly, it was not accepted. It has been also stated that apart from that the said work of handling/unloading etc was to be clubbed with transportation in terms of the policy decision taken by the FCI for clubbing handling and transportation contracts in the same centre which was not mistakenly done. Accordingly, the Tender Committee in the meeting held on 10.1.2013 after rejecting the bid of the petitioner on the ground of being on higher side, recommended for issuing of a fresh tender for transportation and handling within the same centre. Pursuant to the said recommendation, the second tender was issued. It has been also submitted that there is no legal requirement for intimating the tenderer on being rejected by the authorities concerned and as such the question of violation of natural justice does not arise. 6. Mr. R.K. Deepak, learned counsel for the petitioner has submitted that the decision of the Tender Committee in rejecting the only eligible and lowest bid of the petitioner submitted in respect of the tender dated 31.1.2012 is arbitrary. It has been stated that the rate quoted by the petitioner was only 460.4% above the scheduled rate, whereas the FCI authorities had awarded certain contracts in favour of other persons for similar works in respect of FSD Mon and FSD Makokchung by accepting the rate quoted by the contractors, which was above 2695% ASOR as evident from the appointment letters dated 17.11.2011 (Annexure-X/2 (colly)). The petitioner also contended that in 2010 the petitioner had quoted the handling rate for Jiribam at 1585% which was also accepted and he was awarded the contract. Accordingly, it has been submitted that if the FCI authorities could award the contact in favour of other contractors who had quoted rates as high as 2695% above ASOR, quoting of 460.4% above the SOR by the petitioner cannot be said to be higher by any standard. Accordingly, it has been submitted that the rate quoted by the petitioner is very reasonable and cannot be said to be high so as to warrant rejection by the Tender Committee. 7. Mr. Accordingly, it has been submitted that the rate quoted by the petitioner is very reasonable and cannot be said to be high so as to warrant rejection by the Tender Committee. 7. Mr. Deepak, learned counsel for the petitioner further submits that as can be seen from table prepared by the petitioner at Annexure-X/5, there has been an increase in the rate of work fixed by the FCI authorities themselves. It has been submitted that the average cost for handling 100 bags which was Rs. 20/- as per SOR of 2010 has been revised to Rs. 81.0612 as per SOR 2012. Thus, there has been a rise in percentage also to the extent of 291.22% and since the rate quoted by the petitioner is only 31.89 higher than the rate prescribed by the FCI, it cannot be said to be unreasonably high so as to entail rejection. In other words, the petitioner's case is that the rate quoted by the petitioner in the first tender which was rejected by the respondents cannot be said to be too high as contended by the respondents considering the increase in the rate by the FCI and compared to other similar works. Accordingly, it has been submitted that the said rejection is arbitrary. 8. Mr. N. Ibotombi, learned senior counsel however, has submitted that the rates quoted by the petitioner in 2010 for Jiribam handling as well as by other contractors in respect of Mon & Mokokchung were by applying the Schedule of Rate (SOR) applicable in 2010. It has been submitted by Mr. N. Ibotombi, learned senior counsel that by calculating 1585% above SOR for the petitioner's work in Jiribam, the handling cost came to Rs. 139.0525. However, in respect of the same item, if the present rate quoted by the petitioner i.e. 468% above the SOR of 2012 is applied, the handling cost comes to Rs. 164.0384, which is higher as mentioned in para 4 of the reply affidavit of the Respondents to the additional affidavit filed by the petitioner on 31.10.2014. Therefore, it has been submitted that even though the petitioner had quoted 1585% above SOR in 2010 in respect of Jiribam works, the actual rate was lesser. However, by applying SOR of 2012, at the rate quoted by the petitioner at 468% above the SOR of 2012, the handling charge becomes much higher. Therefore, it has been submitted that even though the petitioner had quoted 1585% above SOR in 2010 in respect of Jiribam works, the actual rate was lesser. However, by applying SOR of 2012, at the rate quoted by the petitioner at 468% above the SOR of 2012, the handling charge becomes much higher. Accordingly, it has been submitted that there was reasonable basis for rejection and it cannot be said to be arbitrary. 9. Mr. Deepak, learned counsel for the petitioner further contended that the second tender has been floated merely to deprive the petitioner of the contract in terms of the first tender. The second tender for which the two works, namely handling and transport contracts at RH/FSD Jiribam and From RH to FSD Jiribam had been clubbed was an excuse to deny the bid of the petitioner in the first tender. In other words, the second tender has been issued by clubbing the works of transportation and handling as a ploy to defeat the bid made by the petitioner in the first tender on the purported ground that the bid of the petitioner was on the higher side. As regards this, Mr. N. Ibotombi, learned senior counsel has submitted that the decision to club together transportation and handling works was taken in view of the revised guideline issued by the authorities as available in the letter dated 9.4.2012 (Annexure-R/2). 10. The respondents have stated in para 8 of their affidavit-in-opposition that as per the HQ Circular, single MTF (Model Tender Form) shall be used for appointing handling and transportation of food grains from godown/storage points to railhead or vice versa and from one place to another place at the same centre as per the circular dated 9.4.2012 ((Annexure-R/2 (colly)). It has been submitted that due to bonafide mistake the same was not done in the first tender and accordingly the second tender was floated and the authorities have done so in compliance with the revised Model Tender Form as mentioned above which required to float a single tender for transportation and handling, if it relates to the same centre. It has been submitted that floating of second tender by clubbing the two works of transportation and handling for the same centre at Jiribam is based on the guideline issued by the authority and it cannot be said to be malafide. 11. It has been submitted that floating of second tender by clubbing the two works of transportation and handling for the same centre at Jiribam is based on the guideline issued by the authority and it cannot be said to be malafide. 11. As regards this reply of the respondents, Mr. R.K. Deepak, learned counsel for the petitioner has submitted that this is a lame excuse to justify the illegal refloating of the second tender inasmuch as this guideline was already in existence at the time of floating of the first tender and moreover, the authorities have so relied only after opening the first tender in which the petitioner was found to be the only eligible and the lowest tenderer. Accordingly, it has been contended this explanation has been offered only to justify the illegal decision to reject the lowest tender of the petitioner. It has been also submitted that the circular does not mention for combining these two works and as such the decision of the authorities to refloat the tender by combining the two works cannot be said to be bonafide. Mr. Deepak, further submits that at the time of floating the second tender the authorities have allowed contractors who have no experience to take part in the tender process and accordingly, the second tender has been issued merely to accommodate some other persons by denying the handling work to the petitioner who had already bid the lowest and accordingly, submits that the second tender notice is liable to be set aside as illegal and arbitrary and malafide. 12. Heard the learned counsel for the parties and perused the materials on record. Before we proceed to deal with the issues, it may be proper to remind ourselves with the relevant law relating to award of contract pursuant to tenders as may be applicable in the facts obtaining in this case. It is now well settled law that Court does not sit in judgment over the decision of the authorities to accept or not to accept bids unless such decision is so arbitrary and irrational that the Court can say that "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached". Secondly, the Court is concerned primarily with the decision making process and not with the decision itself. Secondly, the Court is concerned primarily with the decision making process and not with the decision itself. In this regard one may refer to the decision of the Supreme Court rendered in Michigan Rubber (India) Ltd. Vs State of Karnataka & Ors: (2012) 8 SCC 216 , in which the Supreme Court, after discussing the law relating to contractual matters held in Para 24 of the said case as follows: "24. 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 curt can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and (ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226." Similarly, in the case of M/s Siemens Aktiengeselischaft & S. Ltd. Vs DMRC Ltd. & Ors: AIR 2014 SC 1483 , the Supreme Court reiterated the law and held in para 22 as follows: "22. There is no gainsaying that in any challenge to the award of contract before the High Court and so also before this Court what is to be examined is the legality and regularity of the process leading to award of contract. What the Court has to constantly keep in mind is that it does not sit in appeal over the soundness of the decision. The Court can only examine whether the decision making process was fair, reasonable and transparent. In cases involving award of contracts, the Court ought to exercise judicial restraint where the decision is bona fide with no perceptible injury to public interest." 13. Therefore, in the present case also this Court has to examine whether there was any flaw in the decision making process so as to warrant interference by this Court. From the facts as revealed in the pleadings it seems that the authorities on consideration of the bid of the petitioner pursuant to the first tender, found the same to be high after comparing with other existing rates. From the facts as revealed in the pleadings it seems that the authorities on consideration of the bid of the petitioner pursuant to the first tender, found the same to be high after comparing with other existing rates. In this regard, it may be appropriate to reproduce the proceeding of the concerned Tender Committee, which reads as follows: "TENDER COMMITTEE REPORT ON PRICE BIDS OPENED ON 10.01.2013 FOR APPOINTMENT OF HANDLING CONTRACTOR AT RH/FSD JIRIBAM The undersigned committee opened the Price Bid of M/S H.P. Agency, Imphal on 10.01.2013 in the presence of authorized representative of the Firm M/s H.P. Agency has participated in the tender vide Ref. No. Cont/NIT/NMR/2012-13 NIT No. 2/2012 dated 31.10.2012 for appointment of handling contractor at RH/FSD Jiribam for a period of two years. Handling Koirengei Accepted rate (Rs) CWC accepted rate (Rs) H/P Agebct Quoted Rate (468% above) Rs Average per 100 bag 331.46 343.68 460.4 Average Rate per bag 3.31 3.44 4.6 Per MT rate 66.29 68.74 92.08 The rate quoted by the firm was found higher than the Koirengei (Adhoc) and also higher than the CWC accepted rate. In the NIT No. 2/2012 separate MTF were issued for handling at FSD/RH Jiribam and for transportation from RH Jiribam to FSD Jiribam. But vide ZO(NE) letter dated 09.01.2013 it was informed that the MTF of HTC should be used for appointing HTC for transportation of food grains from dogown/storage point to railhead or vice versa and from one place to another place at the same center. The rate quoted by the party appears to be on the higher side. Over and above to avoid any further complications single MTF of HTC may be issued for FSD/RH Jiribam as the transport and handling are within the same center. As the rate quote is on the higher side, if the NIT is refloated there may be a chance of receiving lower rate and simultaneously the MTF of HTC can be issued so that any further complication can be avoided. Submitted to General Manager (R). Sd/- (SK Sajith Kumar) Asstt.Genl.Manager (Cont) Sd/- (Kunal Maru) Asstt.Genl Manager (F/A) Sd/- (Sushil Kumar Singh) Asstt. Genl. Manager (Pers)" From the above, what is seen is that the tender Committee compared the rate quoted by the petitioner with that of the Koirengei and Central Warehouse (CWC) and found the rate of the petitioner to be on a higher side. Sd/- (SK Sajith Kumar) Asstt.Genl.Manager (Cont) Sd/- (Kunal Maru) Asstt.Genl Manager (F/A) Sd/- (Sushil Kumar Singh) Asstt. Genl. Manager (Pers)" From the above, what is seen is that the tender Committee compared the rate quoted by the petitioner with that of the Koirengei and Central Warehouse (CWC) and found the rate of the petitioner to be on a higher side. In this connection, the petitioner has contended that considering the increase in the rate by the FCI authority themselves the rate quoted by the petitioner cannot be said to be so high as to warrant rejection by the tender committee. This Court, however, cannot sit as an appellate authority to examine the reasonableness or soundness of such decision of the Tender Committee as to whether the rate quoted by the petitioner was high or not. What this Court has to see is as to whether such a decision was so arbitrary or irrational or unreasonable that no responsible authority could have reached such a conclusion. However, in the present case, no such material has been brought to the notice of the Court to warrant such a conclusion that the decision of the Selection Committee in holding that the rate of the petitioner was high, can be said to be irrational or arbitrary. 14. Though the petitioner may feel justified in his contention that the rate quoted by the petitioner cannot be deemed to be so high as to warrant rejection by the Selection Committee, this Court, as mentioned above, in the light of the decisions of the Supreme Court, cannot go to the justness or appropriateness of the decision to determine whether the rate quoted by the petitioner was high warranting rejection. The said decision was taken by the Selection Committee after considering certain relevant materials and as such, this Court cannot substitute with its own view that the rate was not high. Such an approach would be impermissible. 15. Accordingly, this Court is of the view that the decision of the Selection Committee that the rate quoted by the petitioner, after being compared with others, was high, cannot be said to be irrational or arbitrary so as to warrant interfere by this Court. Such an approach would be impermissible. 15. Accordingly, this Court is of the view that the decision of the Selection Committee that the rate quoted by the petitioner, after being compared with others, was high, cannot be said to be irrational or arbitrary so as to warrant interfere by this Court. Thus, if this Court does not find fault with the decision of the respondent to reject the rate quoted by the petitioner as high, this Court cannot come in the way of the consequential actions that may follow thereafter. The natural consequence of such rejection of the tender would be that the tender would have to be refloated as has been done in the present case. 16. In the present case, at the time of refloating, the authorities have clubbed together two works namely, transportation and handling which were separately tendered in the earlier first tender process. In the present case, the respondent authorities have explained and justified the clubbing together of these two works of transportation and handling on the basis of the decision of the FCI as available in their letter dated 9.4.2012 in Annexure-R/2 and also as mentioned in para No. 8 of the affidavit-in-opposition of the Respondents. 17. This Court is of the view that clubbing together of the two works by the authorities, if deemed appropriate, convenient and more economical, cannot be said to be arbitrary as contended by the petitioner. The petitioner contended that there is no rational and reasonable basis on which the authorities had clubbed these two works. This Court cannot agree with such contention of the petitioner inasmuch as the authorities had decided to club these works on the basis of certain instructions of the authorities and further by clubbing together of works, no prejudice can be said to have caused to the petitioner inasmuch as the petitioner was not even a bidder. Therefore, in the absence of any prejudice caused to anyone including the petitioner and also in view of the submission made by the respondent authorities that they had taken the decision to refloat the tender by clubbing the works in terms of the decision of the FCI authorities, after rejecting the earlier bid of the petitioner, this Court does not find that the clubbing of the two works in the second tender suffers from any vice of arbitrariness. 18. 18. Since the Court has already accepted the plea of the respondent authorities that as the bid of the petitioner offered in the first tender was rejected as it was found to be high as valid, the floating of the second tender by clubbing the two works cannot be said to be arbitrary. 19. As regards the plea of the petitioner that in the second bid the authorities have allowed the inexperienced contractors also to bid in order to bestow favour to inexperienced contractors and that the said clause was not specifically mentioned in the earlier tender, cannot be accepted in view of the fact such provision was also existing in the tender documents relating to the Technical Bid of the first tender which is available in Annexure-P/4. According to the respondents, similar provision allowing participation of non experienced contractors is also found at para 3(iii) of the tender document in respect of Technical Bid in the earlier tender wherein it has been stated that tenderers without requisite experience can also take part provided they can undertake to furnish additional performance guarantee in the form of Bank Guarantee of 10% of the contract value from SBI Bank or its associate Banks or other Public Sector Bank. In the present case, in the second tender notice similar provision for security deposit of 5% and performance guarantee in the form of BG to the extent of 15% of actual contact value in case of RTC and 10% in case of handling & transport contract has been stipulated. Accordingly, this Court is of the view that the second tender notice does not suffer from any such irregularity on the ground of allowing inexperienced contractors as same had been allowed earlier also. Further, since the petitioner has not taken part in the second tender process, this Court is of the view that the validity of terms of the tender need not be examined as the petitioner does not have locus standii to challenge the tender documents. 20. To conclude, this Court, on hearing the parties and considering the materials on record, does not find any irregularity and infirmity in the decision making process while rejecting the bid of the petitioner by the Tender Committee on 10.1.2013 and also in floating of the second tender vide Tender Notice dated 19.1.2013. 20. To conclude, this Court, on hearing the parties and considering the materials on record, does not find any irregularity and infirmity in the decision making process while rejecting the bid of the petitioner by the Tender Committee on 10.1.2013 and also in floating of the second tender vide Tender Notice dated 19.1.2013. This Court does not find that there was any arbitrariness or irregularity in the decision of the Tender Committee to reject the bid of the petitioner, so as to warrant interference by this Court. It is also to be noted that if the bid of the petitioner had been rejected on the ground of quoting a high rate, it cannot be said to be contrary to public interest. 21. Accordingly, for the reasons discussed above, there is no merit in the writ petition and the same is dismissed. Earlier interim order, if any, shall stand vacated. ____