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Himachal Pradesh High Court · body

2016 DIGILAW 2470 (HP)

Rahul Pandey v. State of Himachal Pradesh

2016-11-23

MANSOOR AHMAD MIR, SANDEEP SHARMA

body2016
JUDGMENT : Sandeep Sharma, J. 1. By way of instant writ petition filed under Article 226 of the Constitution of India, the petitioner has prayed for the following main relief: “That the respondents may very kindly be directed to award the work i.e. “Providing LWSS to PC Habitation UP Mahal Athah, Barthara-H, UP Mahal Bhabia in GP Manu, Tehsil Chopal, District Shimla (SH: Development of site i.e. Cutting on earth work for civil structure, c/o Raw Water Tank c/o 1 No. F/Bed, C/o 2 Nos. Sump well, c/o 2 Nos. Pump House Cum Attendant Qtr Stone Masonry, C/o 1 No. Main Storage Tank, Prov. Laying, jointing & Testing of MSERW Pipes, laying joining and testing of GMS Tubes for r/main and supply & Erection of pumping machinery with allied accessories)”, to the petitioner being the lowest bidder, in the interest of law and justice.” 2. Key facts, as emerge from the record are that respondent no. 5 i.e. Executive Engineer, Irrigation and Public Health Division Nerwa, District Shimla, invited online item rates/ bids on or before 21.4.2015 from contractors registered with the Irrigation and Public Health Department under appropriate class. As per Notice Inviting e-Tender, contractors, who had experience in construction of work as defined in the tender notice, were competent to apply vide aforesaid e-tender. Respondent-Department invited application for following work:- S. No. Description of work Estt. Cost E/Money Time Cost of form 1. Providing LWSS to PC Habitation UP-Mahal Athah, Barthara-II, UP Mahal Bhabia in GP Manu, Tehsil Chopal, District Shimla (SH: Development of site i.e. Cutting on earth work for civil structure, C/O Raw Water Tank C/o 1 No. F/Bed, C/o 2 Nos. Sump-well, C/O 2 Nos Pump House Cum Attendant Qtr Stone Masonary, C/o 1 No. Main Storage Tank, Prov. Laying, jointing & testing of MSERW Pipes, laying joining and testing of GMS Tubes for R/main and supply & Errection of pumping machinery with allied accessories) 38,70,682 65560/- 6 months 400/- 3. Sump-well, C/O 2 Nos Pump House Cum Attendant Qtr Stone Masonary, C/o 1 No. Main Storage Tank, Prov. Laying, jointing & testing of MSERW Pipes, laying joining and testing of GMS Tubes for R/main and supply & Errection of pumping machinery with allied accessories) 38,70,682 65560/- 6 months 400/- 3. It is undisputed before us, after perusing pleadings available on record that the present petitioner being eligible, as per schedule of tender, uploaded his bid before the stipulated date i.e. 21.4.2015, strictly as per the terms and conditions of Notice Inviting e-Tender, wherein contractors/firms were required to submit their offers in two separate envelopes as below:- “Contractors/firms shall submit their offer in two separate envelopes as below: Envelope No. 1 (i) Proof of Cost of Tenders form. (ii) Proof of Earnest Money. (iii) Eligibility criteria proof. (iv) Qualifying criteria i/c all other documents i.e. Proof of registration in proper class, registration with sales tax, clearance of sales tax & income tax required as per the conditions of Tender Notice. Envelop No. 2 Financial Bid. Second envelope containing Financial bid will be opened only of those firms whose documents in first envelops is found in order. And conditions/ document as verified from the original documents to be submitted separately by the firms to the Executive Engineer, IPH Division, Nerwa as per scheduled date and time.” 4. Perusal of aforesaid terms and conditions contained in tender document suggests that second envelope containing financial bid was only to be opened of those firms, whose documents in first envelope were found to be in order. However, conditions contained in tender document also suggest that tender was to be opened of those contractors only, who qualify eligibility criteria. As per petitioner, after comparison of rates having been quoted by him in tender, he was found lowest bidder (L-1) and was legitimately expecting that work would be awarded in his favour. But perusal of Annexure P-2 suggests that the Superintending Engineer, I&PH Circle, Rohru, vide communication dated 18.6.2015 informed the Chief Engineer, South Zone, I&PH Department Shimla that tender in question was scrutinized by the Circle Level Negotiation Committee during its meeting held on 10.6.2015, when it was observed that the petitioner has obtained the authorization to quote pumping machinery from M/s Hydraulic Engineering Company, Hospital Road, Solan, which is authorized dealer of KSB Pumps. Petitioner quoted KSB pumps for 1st stage and reciprocating pump WASP make for 2nd stage, which was contradictory in respect of authorization obtained by him. Contents of letter suggest that since the pump quoted for the first stage by the petitioner were not found technically suitable since it had 49% efficiency at duty point and works upto +3% on duty head, Committee decided that technical suitability of other firms may also be scrutinized. Accordingly, offer of second lowest contractor namely Ramesh Kumar was discussed and it was decided to seek approval of the higher authority in favour of second lowest firm, after negotiations. Pursuant to issuance of letter dated 18.6.2015 by Superintending Engineer, I&PH Circle, Rohru, wherein decision of Committee to accord approval in favour of second lowest firm, after negotiation was conveyed, petitioner requested the Chief Engineer, South Zone vide Annexure P-3 to call him for negotiations being the lowest bidder. Vide Annexure P-3, petitioner also clarified that for stage 1, he had quoted ‘KSB’ make pump set Model WKFI 40/16 with 60 HP motor which was suitable to give 3.02 LPS discharge at head-506.51 Meter, however, if the department felt that 75 HP is required with this particular pump-set, he could supply the same on already quoted rates. Similarly, petitioner claimed that life of centrifugal pumps was much higher and hassle free as compared to other pumps and if any booster pump was required, petitioner would supply an additional 3.0 HP mono-block pump in their quoted rates for better range and efficiency. Since, no heed was paid to aforesaid communication (Annexure P-3), sent by the petitioner, he approached this Court by way of instant writ petition on 11.8.2015, praying therein for the reliefs as have been reproduced herein above. 5. Mr. Sanjeev Bhushan, Senior Advocate duly assisted by Ms. Abhilasha Kaundal, Advocate, vehemently argued that decision of the respondents in not granting work pursuant to the tender notice advertised by it to the petitioner, who was admittedly lowest bidder, is totally arbitrary, discriminatory and colourable exercise of power. While referring to the documents placed on record by the respective parties, Mr. Bhushan, strenuously argued that there is no dispute that the petitioner, being lowest bidder (L-1), was entitled to be awarded work pursuant to Notice Inviting Tender in the present case. While referring to the documents placed on record by the respective parties, Mr. Bhushan, strenuously argued that there is no dispute that the petitioner, being lowest bidder (L-1), was entitled to be awarded work pursuant to Notice Inviting Tender in the present case. He specifically invited attention of this Court to the terms and conditions contained in Notice Inviting Tender, wherein it was specifically stated that the second envelope containing financial bid would only be opened of those firms, whose documents in the first stage were found to be in order. He stated that since petitioner was found eligible by the respondents after perusing documents contained in first envelope, financial bid submitted by him was opened, wherein he was found to be the lowest bidder. Mr. Bhushan forcefully contended that once financial bid of petitioner was opened, there was no occasion whatsoever, for the respondent authorities to reject his case on the ground of eligibility. 6. Mr. Anup Rattan, learned Additional Advocate General while inviting attention of this Court to supplementary affidavit filed by the Superintending Engineer, Irrigation and Public Health, Circle Rohru, in compliance to order dated 7.10.2015 passed by this Court, whereby direction was given to the respondents to determine the issue within four weeks, stated that a meeting of Tender Committee was held on 3.11.2015, wherein technical suitability of second lowest contractor was discussed and it was found that he has offered reciprocating pump for 1st and 2nd stages for which he has also obtained the valid authorization from authorized dealer of reciprocating pumps. He further stated that since contractor, who was second lowest bidder, failed to reduce the quoted rates, Circle Level Negotiation Committee, decided that tender be recalled. While concluding his arguments, Mr. Anup Rattan forcefully contended that since decision has already been taken to recall the tender in question, present petition deserves to be dismissed having become infructuous. 7. We have heard the learned counsel for the parties and gone through the record carefully. 8. Undisputedly, petitioner, who had applied in terms of Notice Inviting Tender, was lowest bidder (L-1) but he was not called for negotiations by the respondents as far as rates quoted by him in the tender are concerned. 7. We have heard the learned counsel for the parties and gone through the record carefully. 8. Undisputedly, petitioner, who had applied in terms of Notice Inviting Tender, was lowest bidder (L-1) but he was not called for negotiations by the respondents as far as rates quoted by him in the tender are concerned. True it is that as per terms and conditions contained in Notice Inviting Tender, financial bid of the contractors could only be opened in case documents submitted by them in the first envelope were found to be in order. It is admitted case of the parties that the financial bid of the petitioner was opened and he was declared lowest bidder in L-1 category, and in that capacity, respondents ought to have called him for negotiations at the first instance, before calling second lowest bidder i.e. Ramesh Kumar. But as is evident from Annexure P-2, communication dated 18.6.2015, pumps quoted for the first stage by the petitioner were not found technically suitable by the Circle Level Negotiation Committee in its meeting held on 10.6.2015. Committee, after perusing documents submitted by the petitioner observed that L-1 contractor has obtained authorization to quote pumping machinery from M/s Hydraulic Engineering Company, Hospital Road Solan, which was authorized dealer of KSB Pumps and petitioner has quoted KSB Pumps for 1st stage and reciprocating pump WASP make for 2nd stage, which was contradictory in respect of authorization obtained by the firm. Since technical bid contained in envelope-I was not found suitable by Circle Level Negotiation Committee, proposal was sent to the Chief Engineer, SZ, I&PH, by Superintending Engineer, I&PH Circle Rohru, seeking approval of higher authority to have negotiations with second lowest firm. Similarly, perusal of Annexure P-4, annexed to rejoinder by the petitioner, suggests that tender in question was scrutinized by Circle Level Negotiation Committee on 10.6.2015, wherein following observations were made: “In this context, the S.E. IPH Circle, Rohru has submitted that the tender was submitted by E.E. Nerwa which was scrutinized by the circle level Committee during its meeting held on 10-6-2015 wherein it was observed that Shri Rahul Pandy L-1 Contractor has obtained the authorization to quote puping machinery from M/S Hydraulic Engineering Comp. Solan who is authorized dealer of KSB Pumps & L-1 Sh. Solan who is authorized dealer of KSB Pumps & L-1 Sh. Rahul Pandy quoted KSB pumps for 1st stage and reciprocating pump WASP make for 2nd stage which is contradictory in respect of authorization obtained by the firm. However, pump quoted for 1st stage is not technically suitable as it has 49% efficiency at duty pointed work up to +3% on duty head. The suitable otor is 70 HP rating whereas he has quoted 60HP. Keeping In view of the above, the committee decided that technical suitability of the other fir ay also be scrutinized. The offer of second lowest fro Sh. Ramesh Kumar has been discussed and it is observed that he has sought the authorization from M/S Sai Aqua Machines & Builders, Solan who is the authorized distributor of WASP Pump, Kirloskar, KSB Pump Ltd. Sh. Ramesh Kumar L-2 Contractor has quoted the WASP pump for both stages and both these pumps are technically suitable with 100% efficiency works up to (+) 10% of duty point and required rating of motor is 30 HP & the rates quoted by both the contractors are as under:- The rates quoted by L-1 for Civil Work Rs.36,48,520/- The rates quoted by L-1 for P/Machinery Rs.19,57,100/- Total Rs.56,05,620/- The rates quoted by L-2 for Civil Work Rs.43,66,045/- The rates quoted by L-2 for P/Machinery Rs.14,70,300/- Total Rs.58,36,345/- 9. After carefully perusing the Notice Inviting Tender, this Court is in agreement with the submission having been made by Mr. Bhushan that at the first instance, information contained in envelope-I was to be examined/ scrutinized by the Department before opening financial bid. But in the present case, while scrutinizing the tender of the petitioner, Executive Engineer, Nerwa pointed out certain discrepancies in tender document submitted by the petitioner and accordingly, recommended that second lowest bidder may be invited for negotiations. Though, in normal circumstance, respondents ought to have scrutinized documents contained in envelope-I, at the first instance, so that suitability/ eligibility of the petitioner could be adjudged before opening of financial bid but aforesaid omission on the part of the respondents can not be a ground to nullify subsequent action of the respondents wherein they specifically, on the recommendations of the Committee, invited second lowest bidder for negotiations. Since, the tender submitted by the petitioner was not found in conformity with the parameters laid down in the Notice Inviting Tender, respondents were well within their right to have negotiations with second lowest bidder, who as per record was admittedly eligible in all respects. 10. Though this Court has no hesitation to conclude that the respondents while carrying out scrutiny of documents received by them pursuant to the Notice Inviting Tender miserably failed to adhere to the terms and conditions of Notice Inviting Tender, wherein admittedly before opening financial bid, technical competence/eligibility of contractors was to be examined in light of documents contained in envelope-I but at the same time, this Court can not substitute its wisdom for technical opinion having been rendered by the members of Circle Level Negotiation Committee, who are admittedly technical persons. Moreover, members of the Committee comprising of technical persons are expected to know more about the standard of particular item required by the department for completion of work in question. 11. Apart from above, it clearly emerges from the reply filed by the respondents to the writ petition that the power of approval/scrutiny lies with the Superintending Engineer beyond the amount of Rs. 10.00 Lakh for non selected Executive Engineer and Rs. 30.00 Lakh for selected Executive Engineer. Relevant para of the reply is reproduced herein-below: “Para No. 4 The contents of para 4 admitted to the extent that petitioner was eligible to submit his tender bid as per his registration subject to fulfillment of tender conditions. It is emphathetically denied that the petitioner was found completely eligible after opening the tender bids. It is respectfully submitted that though the tender were invited by respondent No. 5 but on behalf of the Governor of H.P. and under rules the power of approval/ scrutinizing the tender lies with the Superintending Engineer beyond the amount of Rs.10.00 lakhs for non selected Executive Engineer and Rs. 30.00 lakh for selected Executive Engineers. Since the tenders in the present case was to the tune of more than Rs. 30.00 lakhs as such the tender were to be approved/scrutinized in the office of Superintending Engineer i.e. Respondent No. 4 by a duly appointed technical committee. Therefore, respondent no. 5 opened the tender and forwarded, without technical scrutiny, to Superintending Engineer for further scrutinized and approval by circle level technical committee. 30.00 lakhs as such the tender were to be approved/scrutinized in the office of Superintending Engineer i.e. Respondent No. 4 by a duly appointed technical committee. Therefore, respondent no. 5 opened the tender and forwarded, without technical scrutiny, to Superintending Engineer for further scrutinized and approval by circle level technical committee. It is admitted that the in opening of tender the petitioner was financially lowest.” 12. Hence, by no stretch of imagination, court can assume the role of technical expert, who in their wisdom have not found the pump quoted by the petitioner suitable and efficient as per the requirement of the project/work. Moreover, as per latest supplementary affidavit filed by the Superintending Engineer, I&PH, a decision has been already taken to recall the tender, as a result of which relief prayed for in the present petition by the petitioner can not be granted at this stage. Since respondents have already taken a conscious decision to recall the tender, this Court sees no occasion to grant relief no. 1, whereby prayer has been made to award work in question. 13. It is well settled by now that respondents can withdraw/recall tender at any time, if it is convinced that same is not in accordance with the requirements as indicated in Notice Inviting Tender. Though, in the present case, petitioner claimed himself to be lowest bidder on account of his financial bid but there is no document suggestive of the fact that pursuant to opening of his financial bid, he was successful lowest bidder, as such no right has accrued in his favour which would entitle him to claim the relief as prayed for in the petition. 14. The Apex Court in State of Jharkhand vs. M/s. CWESOMA Consortium, reported in 2016 AIR SCW 3366, has held that: 13. The appellant-state was well within its rights to reject the bid without assigning any reason thereof. 14. The Apex Court in State of Jharkhand vs. M/s. CWESOMA Consortium, reported in 2016 AIR SCW 3366, has held that: 13. The appellant-state was well within its rights to reject the bid without assigning any reason thereof. This is apparent from clause 24 of NIT and clause 32.1 of SBD which reads as under:- “Clause 24 of NIT: “Authority reserves the right to reject any or all of the tender(s) received without assigning any reason thereof.” Clause 32.1 of SBD: “…the Employer reserves the right to accept or reject any Bid to cancel the bidding process and reject all bids, at any time prior to award of Contract, without thereby incurring any liability to the affected Bidder or Bidders or any obligation to inform the affected Bidder or Bidders of the grounds for the Employer’s action.” In terms of the above clause 24 of NIT and clause 32.1 of SBD, though Government has the right to cancel the tender without assigning any reason, appellant-state did assign a cogent and acceptable reason of lack of adequate competition to cancel the tender and invite a fresh tender. The High Court, in our view, did not keep in view the above clauses and right of the government to cancel the tender. 14. The State derives its power to enter into a contract under Article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under Article 14 of the Constitution of India. In the case in hand, in view of lack of real competition, the state found it advisable not to proceed with the tender with only one responsive bid available before it. When there was only one tenderer, in order to make the tender more competitive, the tender committee decided to cancel the tender and invited a fresh tender and the decision of the appellant did not suffer from any arbitrariness or unreasonableness. 15. The Apex Court in Bakshi Security & Personnel Services Pvt. Ltd. vs. Devkishan Computed Pvt. Ltd. reported in 2016 AIR SCW 3385, has laid down same principle. 16. The Apex Court in Central Coalfields Limited vs. SLLSML (Joint Venture Consortium) reported in 2016 AIR SCW 3814, has further held that: 44. 15. The Apex Court in Bakshi Security & Personnel Services Pvt. Ltd. vs. Devkishan Computed Pvt. Ltd. reported in 2016 AIR SCW 3385, has laid down same principle. 16. The Apex Court in Central Coalfields Limited vs. SLLSML (Joint Venture Consortium) reported in 2016 AIR SCW 3814, has further held that: 44. On asking these questions in the present appeals, it is more than apparent that the decision taken by CCL to adhere to the terms and conditions of the NIT and the GTC was certainly not irrational in any manner whatsoever or intended to favour anyone. The decision was lawful and not unsound. 55. On the basis of the available case law, we are of the view that since CCL had not relaxed or deviated from the requirement of furnishing a bank guarantee in the prescribed format, in so far as the present appeals are concerned every bidder was obliged to adhere to the prescribed format of the bank guarantee. Consequently, the failure of JVC to furnish the bank guarantee in the prescribed format was sufficient reason for CCL to reject its bid. 56. There is nothing to indicate that the process by which the decision was taken by CCL that the bank guarantee furnished by JVC ought to be rejected was flawed in any manner whatsoever. Similarly, there is nothing to indicate that the decision taken by CCL to reject the bank guarantee furnished by JVC and to adhere to the requirements of the NIT and the GTC was arbitrary or unreasonable or perverse in any manner whatsoever.” 17. Applying the test to the instant case, the writ petition merits to be dismissed and is accordingly dismissed. Pending applications, if any, are also disposed of.