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2015 DIGILAW 998 (JHR)

S. N. Singh v. Heavy Engineering Corporation

2015-08-20

PRASHANT KUMAR

body2015
Judgment Prashant Kumar, J. This writ application has been filed for the following reliefs :- (i) For quashing and setting aside the decision of the respondents including the e-mail dated 14.05.2012 (Annexure-10) conveying the said decision whereby part of the tender floated vide NIT No. HMB/SP/WC/E&C/179/TE-127 dated 06.06.2011 to the extent the same relates to erection and commissioning of one out of the two Draglines, for which the petitioner is the technically qualified lowest bidder, has been cancelled; (ii) Commanding upon the respondents to finalise the tender in favour of the petitioner with respect to erection and commissioning of the Dragline, for which the petitioner is the technically qualified lowest bidder, treating it as not cancelled as yet; (iia) Directing the Respondent no. 7, namely the Chief Vigilance Officer, Heavy Engineering Corporation Ltd. top enquire into and take appropriate action on the irregularities on part of the authorities of the respondent-Corporation as highlighted by the petitioner in the present case, and further directing the Respondent no.7 to file appropriate report before this Hon'ble Court as also to the Respondent No.6-Chief Vigilance Commissioner about the same for taking appropriate remedial actions; (iib) During the pendency of the writ petition the original file relating to the tender process arising out of NIT No. HMB/SP/WC/E&C/179/TE-127 (Annexure-1) to be called for; (iii) Pass such other/further order(s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case; (iv) During pendency of this writ petitioner, the operative effect of the decision, as contained in e-mail dated 14.05.2012 (Annexure-10) be stayed and/or the respondents be restrained from proceeding and finalizing any fresh tender for the erection and commissioning of Dragline, which was subject matter of the tender partly cancelled vide decision as communicated by e-mail dated 14.05.2012 (Annexure-10). 2. The Heavy Engineering Corporation Ltd. (in short HEC) (respondent no.1), a Govt. of India Enterprises, issued NIT for erection and commissioning of Two Draglines at Amlohri Project, Northern Coalfields Ltd. (in short NCL). In response to above NIT, petitioner participated in the tender and submitted its bid papers. After finding four bidders including the petitioner to be suitable, their price bid opened on 29.12.2011, in which M/s Techno Plus, Shaktinagar, Sonebhadra, U.P. was found L-1, as the said bidder had quoted Rs.4,17,00,000/-, so far First Dragline was concern, whereas for the Second Dragline, petitioner was found L-1, who had quoted Rs. After finding four bidders including the petitioner to be suitable, their price bid opened on 29.12.2011, in which M/s Techno Plus, Shaktinagar, Sonebhadra, U.P. was found L-1, as the said bidder had quoted Rs.4,17,00,000/-, so far First Dragline was concern, whereas for the Second Dragline, petitioner was found L-1, who had quoted Rs. 4,49,00,000/-. It appears that the work order for the First Dragline issued in favour of M/s Techno Plus, Shaktinagar, Sonebhadra, U.P., but the tender so far it relates to Second Dragline is concerned had been cancelled for which petitioner was found L-1 and the information regarding cancellation of said tender communicated to the petitioner vide Annexure-10. It further appears that thereafter, petitioner filed an application before the Chairman-cum-Managing Director, HEC, which was replied vide Annexure-15 in which it is disclosed that part of the tender cancelled as per Clause 1.8.0.0 of the NIT, which stipulates "The right to acceptance or rejection of any, wholly or partly, without assigning any reason, whatsoever, shall be reserved with the company and so dispute of any kind cannot be raised against their decision in court of law or elsewhere." 3. It is submitted by learned counsel for the petitioner that the action of the respondents in cancelling the part of the tender is arbitrary, illegal, irrational and mala fide. It is further submitted that though petitioner was found L-1, so far erection and commissioning of Second Dragline is concerned, but the respondents were not inclined to issue work order in favour of the petitioner, because they want to favour another bidder. It is further submitted that from the guidelines of Central Vigilance Commission, respondents are prevented from negotiating with the tenderers other than L-1 bidder, therefore, they choose to cancel part of the tender relating to second Dargline, so that subsequently in fresh tender they may award the work to their favourite bidder. It is also submitted that mala fide intention of the respondents clear from the fact that they are not giving information sought by the petitioner under the R.T.I. Act on feeble excuses. Accordingly, it is submitted that the orders for cancellation of the tender, so far it relates to erection and commissioning of Second Dragline is concerned, be set aside and the respondents may be directed to award contract in favour of the petitioner. 4. Accordingly, it is submitted that the orders for cancellation of the tender, so far it relates to erection and commissioning of Second Dragline is concerned, be set aside and the respondents may be directed to award contract in favour of the petitioner. 4. On the other hand, Sri Rajiv Ranjan appearing for the respondents-HEC submitted that, in fact, HEC was required to erect three Draglines on "Turn Key" basis at Amlohri Open Cast Project of NCL in the district of Singrauli (M.P.). He then submitted that so far First Dragline is concerned, the erection work of the same has already started at the site provided by NCL. He further submitted that the Second Dragline was required to be erected on the second site, whereas Third Dragline was required to be erected on the site where First Dragline was erected. It is submitted that since there was delay in the erection of First Dragline and its movement from the erection site and as the NCL had not made arrangement of alternative site for erection of Third Dargline, therefore, even after opening of the financial bid of Third Dragline (Second of present NIT), the same could not be finalised and ultimately cancelled. Sri Rajiv Ranjan further submitted that aforesaid reasons for cancellation of part of the tender relating to Third Dragline mentioned in detail in the supplementary counter affidavit filed by the respondents on 28.07.2015. It is submitted that in Clause 1.8.0.0 of the NIT, it is mentioned that respondent has the right to accept or reject, wholly or partly any tender, without assigning any reason, whatsoever. It is submitted that though price of the petitioner quoted for erection and commissioning of Second Dragline was lowest, but the same had not been awarded to it, because of the reason that site of erection of the said Dragline was not available and there was delay in execution of the work. Thus, in the aforesaid administrative exigency, part of the tender relating to Third Dragline of all the bidders, had been cancelled. It is submitted that after availability of the site, the respondents had issued fresh tender for erection and commissioning of Third Dragline and for the said tender, petitioner was given intimation to participate. But inspite of intimation, petitioner had not participated. It is submitted that after availability of the site, the respondents had issued fresh tender for erection and commissioning of Third Dragline and for the said tender, petitioner was given intimation to participate. But inspite of intimation, petitioner had not participated. It is submitted that later on, after finalization of fresh tender, the work order issued in favour of M/s Hindustan Facing Industries, Kolkata on 11.05.2013. Under the said circumstance, now petitioner cannot claim that the said work order be awarded in his favour and that too without impleading M/s Hindustan Facing Industries, Kolkata. It is further submitted that it is well settled that no company has fundamental right to do business with the Government. In the matter of contract, the scope of judicial review is very limited and the court interfere in the matters, only when it is shown that acts of the State is unreasonable, unfair and arbitrary. It is submitted that only because the petitioner is L-1, Dragline, it is not entitled to get the work order, if other administrative exigency prevents the respondents for issuance of said work order. It is submitted that in the instant case, respondents have valid reason for cancellation of bid, therefore, action of the respondents is fair, reasonable. 5. Having heard the submission, I have gone through the records of the case. 6. It is submitted by learned counsel for the petitioner that the tender for erection and commissioning of Second Dragline has been cancelled with a view to favour a particular bidder by issuance of fresh tender notice. It is submitted that as per guidelines of Central Vigilance Commission, there is an embargo on the respondents to negotiate with other bidders than L-1 bidder. As the respondents were not in favour of awarding the work to the petitioner, therefore, they cancelled the tender for Second Dragline. Thus, the main contention of the petitioner in this writ application is of mala fide. 7. In this writ application, petitioner stated that in view of the guidelines of the Central Vigilance Commission, respondents, being a Public Sector Undertakings of Govt. of India, feeling constrained in negotiating the price for erection of Second Dragline from their favourite bidders excluding the petitioner and, therefore, the tender of the petitioner, who was L-1, had been cancelled. 7. In this writ application, petitioner stated that in view of the guidelines of the Central Vigilance Commission, respondents, being a Public Sector Undertakings of Govt. of India, feeling constrained in negotiating the price for erection of Second Dragline from their favourite bidders excluding the petitioner and, therefore, the tender of the petitioner, who was L-1, had been cancelled. In the writ application, petitioner has not disclosed the name of the favourite bidder with whom respondents were willing to negotiate the price. 8. From perusal of second counter affidavit, I find that respondents have given reasons for cancellation of the tender relating to Second Dragline. They have stated that since the site for erection of Third Dragline (Second Dragline of the NIT in question) was not available, therefore, due to administrative reason, part of the tender relating to Second Dragline had been cancelled. 9. A rejoinder to the aforesaid counter affidavit filed, in which at paragraph no.7, the petitioner had denied and disputed the aforesaid facts. However, petitioner has not stated that site for erection and commissioning of Third Dragline (Second of NIT in question) was available at the relevant time. Only some allegations of nepotisms and irregularities have been made in that paragraph, that too, without any proof. Under the said circumstance, there is nothing on record to disbelieve that site for erection and commissioning of Second Dragline was available at the relevant time. In that view of the matter, the reasons given by the respondents for cancellation of the part of tender, doest not appears to be unreasonable and unfair. 10. It is worth mentioning that after availability of the site, fresh tender issued and petitioner was given intimation for participating in the tender. But the petitioner did not participate in the tender. It is stated in the counter affidavit that after scrutiny of the fresh tender, the work had been awarded to M/s Hindustan Facing Industries, Kolkata on 11.05.2013. Under the said circumstances, it is clear that the Second work was not issued in favour of M/s Techno Plus, Shaktinagar, Sonebhadra, U.P, to whom the earlier work for erection and commissioning of First Dragline was given. Thus, it is manifestly clear that first tender was not cancelled to favour any favourite bidder. 11. Clause 1.8.0.0 of the NIT provides that the company has right of acceptance or rejection of any tender, wholly or partly. Thus, it is manifestly clear that first tender was not cancelled to favour any favourite bidder. 11. Clause 1.8.0.0 of the NIT provides that the company has right of acceptance or rejection of any tender, wholly or partly. Under the said circumstance, the Company has right to cancel part of the tender, therefore, action of the respondents is not without jurisdiction. The Hon'ble Supreme Court in "Maa Binda Express Carrier and another Vs. North East Frontier Railway and Others" reported in 2014(3) SCC 760 has held at paragraph nos. 8 and 9 as follows :- "8. The scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognise that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest -6-or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. So also, the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process 9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. So also, the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process 9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that exent the tender has an enforceable right in the court which is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest." 12. In view of the above discussions, I find that sufficient reasons have been given by the respondents for cancelling the tenders of all the bidders relating to erection and commissioning of Second Dragline and the said reasons appears to be reasonable and in the interest of administration. There is nothing on the record to show that such cancellation made with a view to favour any particular bidder and/or company. Respondents have power to cancel part of the tender given by the bidders under Clause 1.8.0.0. Thus, I find that no illegality and/or irregularities in the impugned action of the respondents. 13. In view of the discussions made above, I find no merit in this writ application. Accordingly, the same is dismissed.