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2016 DIGILAW 307 (ORI)

Subash Chandra Mund v. State of Odisha

2016-04-19

B.R.SARANGI, VINEET SARAN

body2016
JUDGMENT : Dr. B.R Sarangi, J. Being aggrieved by the letter dated 20.02.2016 issued by the Chief Engineer (DIP & ROADS), Odisha, Office of the Engineer-in-Chief, Civil, Odisha, (Annexure-8), rejecting the allegation of the petitioner and accepting the tender of the first lowest bidder-Sri Banti Kumar Agarwal, opposite party no.4, the present writ petition has been filed. 2. By orders dated 21.03.2016 and 04.04.2016, learned counsel for the State was directed to obtain instruction in the matter and on the basis of the instruction received, the writ petition is finally heard and disposed of with the consent of the learned counsel for the parties without calling for counter affidavit. 3. Mr. D. Mund, learned counsel for the petitioner strenuously urged that as per Clause-3.17 of the Detailed Tender Call Notice (DTCN), due no non-disclosure of information, the EMD/BID security shall stand forfeited and registration in the quota shall be blocked and the bidder is liable to be blacklisted. It is further urged that the L1 bidder (opposite party no.4) having suppressed the material facts, which are required to be disclosed and non-disclosure of some ongoing projects is violative of Clause-3.17 of the DTCN and therefore, the offer made by the said opposite party no.4 is liable to be rejected. He further submitted that even though the petitioner raised objection, the same has not been considered by the authorities in proper perspective and impugned letter vide Annexure-8 has been communicated stating that the allegation made by the petitioner is not based on facts and thus, the same is rejected. According to him, in the event, the first lowest bidder- Banti Kumar Agarwal is not eligible, the petitioner being the second lowest bidder, is entitled to be awarded with the work as per Clauses-9.2 and 10.4 of the DTCN. 4. Mr. B.P. Pradhan, learned Addl. Govt. Advocate raised a preliminary objection with regard to the maintainability of the writ petition and urged that the action taken by the opposite party-authorities is well within the conditions stipulated in the DTCN and the allegations made that the fact has not been disclosed, which the first lowest bidder is required to be disclosed under Clause 3.17, are absolutely baseless and therefore, stated that since the opposite party-authorities have acted in consonance with the provisions of DTCN and no illegalities and irregularities have been committed, the writ petition is liable to be dismissed. 5. Mr. 5. Mr. P.C. Nayak, learned counsel appearing for opposite party no.4 supporting the contentions raised on behalf of the learned counsel for the State, stated that opposite party no.4 being the first lowest bidder, he is eligible to execute the work in question in terms of the DTCN issued by the opposite party-authorities and as such, no illegalities and irregularities have been committed by the authority in selecting opposite party no.4 for execution of such work. 6. Having heard learned counsel for the parties and after going through the records, it appears that the Engineer-in-Chief (Civil), Odisha invited tender in relation to the work “Widening and Strengthening of Sohela-Nuapada Road (SH-3) to 4-Lane Carriageway from 101/125 KM to 117/955 KM in the district of Nuapada under Biju Expressway” having Bid Identification no. CE-DPI & R-14/2015-16 with estimated cost of Rs.46,58,45,496.00 on 30.10.2015 and the time schedule has been fixed for availability of bid document on “online bidding” from 10.00 A.M. of 30.11.2015 to 5.00 P.M. of 05.12.2015. The bid received on “online” shall be opened at 11.30 hours on 10.12.2015 in the office of the Engineer-in-Chief (Civil), Odisha, Nirmana Soudha, Unit-5, Bhubaneswar in the presence of the bidders, who wish to attend and the bidders who participated in the bid can witness the opening of bids after logging on to the site through their DSC. As per Clause-7 of the check list, which contains “work experience” the bidder has to furnish (A) the list of projects that are similar in nature to the work (Schedule D1) and (B) works in hand-List of project in progress that are similar in nature to the work (Schedule D2). The procedure to participate in the “online bidding” and e-procurement has also been indicated in Clause-3.3, whereof it is specifically stated as under:- “The bidder shall carefully go through the tender and prepare the require documents. The bid shall have a Technical Bid and Financial bid. The Technical Bid generally consists of cost of BID documents, EMD/Bid Security, VAT, PAN/TIN, Registration Certificate, Affidavits, Profit Loss statement, Joint venture agreement, List of similar nature of works, work in hand, list of machineries and any other information required by OIT. The bid shall have a Technical Bid and Financial bid. The Technical Bid generally consists of cost of BID documents, EMD/Bid Security, VAT, PAN/TIN, Registration Certificate, Affidavits, Profit Loss statement, Joint venture agreement, List of similar nature of works, work in hand, list of machineries and any other information required by OIT. The Financial Bid shall consist of the Bill of Quantities (BOQ) and any other price related information/undertaking including rebates.” Clause-3.17 stipulates as under:- “The “Online bidder” shall digitally sign on all statements documents, certificates uploaded by him, owning responsibility for their correctness/authenticity as per IT ACT 2000. If any of the information furnished by the bidder is found to be false/fabricated/bogus, his EMD/BID Security shall stand forfeited and his registration in the portal shall be blocked and the bidder is liable to be blacklisted.” Clause-9.2 under the heading “Clarification and negotiation of bids”, it is stated as under:- “On opening of the price bid the system shall arrange the financial bids in order of their value (L1 first, followed by L2, L3 …..) for subsequent evaluation. The evaluation status (Sheet) will be visible to all the participating bidders after opening on their respective logins. Each activity is recorded in the system with date and time stamping.” Clause 10.04 under the heading “Notification of Award and Signing of Agreement, reads as under:- “If the L1 bidder does not turn up for agreement after finalization of the tender then he shall be debarred from participation in bidding for three years and action will be taken to blacklist the contractor. Besides the consortium/JV/firm where such an agency/firm already happens to be or is going to be a partner/member/proprietor, he/they shall neither be allowed for participation in bidding for three years nor his/their application will be considered for registration and action will be initiated to blacklist him/them. In that case, the L2 bidder, if fulfils other required criteria would be called for drawing agreement for execution of work subject to condition that the L2 bidder negotiates at par with the quoted by the L1 bidder, otherwise the tender will be cancelled.” 7. In that case, the L2 bidder, if fulfils other required criteria would be called for drawing agreement for execution of work subject to condition that the L2 bidder negotiates at par with the quoted by the L1 bidder, otherwise the tender will be cancelled.” 7. The petitioner and opposite party no.4 along with others participated in the bid itself by complying the requirements made thereunder, 11 bidders have been enlisted by the authorities in which opposite party no.4 has been shown as the first lowest bidder, whereas petitioner has been shown as the second lowest bidder. The petitioner stated that due to non compliance of the provisions of Clause-3.17, opposite party no.4 is not eligible to be awarded the work in question due non-disclosure of the work in hand. To that extent the petitioner raised objection before the authority. The same having been taken into consideration and on scrutinizing the document filed by opposite party no.4, the authorities have come to a definite finding that the allegation made by the petitioner is not based on facts and therefore, the recommendation made to award the work in favour of opposite party no.4 is to be worked out. 8. In the additional affidavit, further documents have been produced by the petitioner to substantiate the claim relying upon the RTI information sought for by one Arjun Pattnaik, but that itself also does not suffice the claim of the petitioner that opposite party no.4 has not disclosed the factum of work in hand at the time of submission of bid. This leads to disputed questions of fact involved in the case itself. 9. In Pawan Kumar Agarwal v. Meerut Development Authority, AIR 2009 SC 2894 , the Apex Court has held that the bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated grounds, the reason being the terms of the invitation to tender are in the realm of the contract. 10. One cannot challenge the terms and conditions of the tender except on the above stated grounds, the reason being the terms of the invitation to tender are in the realm of the contract. 10. In Raunaq International Limited v. I.V.R. Construction Limited, (1991) 1 SCC 492, while dealing with award of contract whether it is by a private or by a public body or the State, the Apex Court held that it is essentially a commercial transaction in arriving at a commercial decision. Considerations, which are of paramount importance, are commercial considerations. These would be:- (1) The price at which the other side is willing to do the work; (2) whether the goods or services offered are of the requisite specifications; (3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower of requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods of services or to do the work of the requisite standard and quality; (5) past experience of the tenderer and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow-up action, rectify defects or to give post-contract services.” 11. In Tata Cellular v. Union of India, AIR 1996 SC 11 , the Apex Court while considering the requirement of valid tender held as follows:- “84.A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated, the following are the requisites of a valid tender: 1. It must be unconditional 2. Must be made at the proper place. 3. Must conform to the terms of obligation. 4. Must be made at the proper time. 5. Must be made in the proper form. 6. The person by whom the tender is made must be able and willing to perform his obligations. 7. There must be reasonable opportunity for inspection. 8. Tender must be made to the proper person. 9. It must be of full amount.” 12. 4. Must be made at the proper time. 5. Must be made in the proper form. 6. The person by whom the tender is made must be able and willing to perform his obligations. 7. There must be reasonable opportunity for inspection. 8. Tender must be made to the proper person. 9. It must be of full amount.” 12. In view of the law laid down by the Apex Court in the aforementioned judgments, it is made clear that in a commercial transaction if the parties have satisfied the requirements thereof, there is no scope on the part of this Court to interfere with the decision taken by the authorities by invoking the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India unless, it is unfair, unreasonable or arbitrary. But it cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down. 13. Examining the above mentioned principles, it is to be considered what are the duties, powers and scope of the Court to interfere in the matter of contract. In Tata Cellular (supra) the Apex Court has laid down the principles in paragraphs 93 and 94, which are as follows: “93. The duty of the Court is to confine itself to the question of legality. Its concern should be: 1. Whether a decision-making authority exceeded its power? 2. Committed an error of law 3. Committed a breach of the rules of natural justice. 4. The duty of the Court is to confine itself to the question of legality. Its concern should be: 1. Whether a decision-making authority exceeded its power? 2. Committed an error of law 3. Committed a breach of the rules of natural justice. 4. Reached a decision which no reasonable Tribunal would have reached or 5. Abused its powers. 94. Therefore, it is not for the Court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under: (i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury unreasonableness. (iii) Procedural impropriety.” 14. In M/s. B.S.N. Joshi & Sons Ltd. V. Nair Coal Services Ltd. & others, AIR 2007 SC 437 , the Apex Court dealt with new principles of judicial review in contractual matters, which are being developed, are summarized in paragraph 68, which read as follows: “(i) If there are essential conditions, the same must be adhered to; (ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction. (v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with. (vi) The contractors cannot form a cartel. If despite the same, their birds are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority. (vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint.” 15. In M/s. Siemens Aktiengeselischaft & S.Ltd. v. DMRC Ltd and others, AIR 2014 SC 1483 , the Apex Court relying upon various judgments, has laid down the principles in paragraph 22, which read 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 constraint where the decision is bona fide with no perceptible injury to public interest.” 16. Applying the principles laid down by the Apex Court, as mentioned above, to the present context, it appears that there is no unreasonable or arbitrary exercise of powers in violation of Article 14 of the Constitution by the authorities requiring interference by this Court under Article 226 of the Constitution of India and that apart, the scope of this Court being limited in judicial review in contract matters, and more so, there being involvement of disputed questions of fact, this Court is not inclined to interfere with the same. Accordingly, the writ petition is dismissed. No order as to cost.