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2016 DIGILAW 331 (GAU)

R. Rokunga v. State of Mizoram

2016-04-28

M.R.PATHAK

body2016
ORDER : M.R. Pathak, J. Heard Mr. F. Lalengliana, learned counsel appearing for the petitioner and Ms. Melody L. Pachuau, learned Govt. Advocate appearing for the State respondent Nos. 1 to 5. 2. On 06.11.2015, the Public Works Department (PWD) of the State issued an Noticed Inviting Tender under No. 1/SE(WC)/ 2015-2016 for construction of approach road to NIT at Lengpui for formation cutting and permanent work. Superseding the same, the respondents in the Public Works Department issued Re-Tender Notice No.l/SE(WC)/ 2015-2016 on 06.11.2015 and in pursuance of the same the petitioner offered his bids for Group 2 (formation cutting of 0.180-0.390 Kmp for an amount of Rs. 16.78 lakhs) and Group 3 (formation cutting of 0.390-780.00 Kmp for an amount of Rs. 14.46 lakhs). The Tender Committee of the respondents found the petitioner to be the lowest bidder for both the Groups 2 & 3 for the purpose of said contract work. As the petitioner was asked by the authorities in the PWD, he submitted the justification statements of his estimated rates for the said works. 3. However, the authorities of the PWD vide Notification under Memo No. B-1 8013/ 28/2014/SE(WC)/28 dated 29.01.2016 cancelled the Re-Tender Notice No. 1 /SE( WC)/ 2015-2016 dated 06.11.2015 due to Technical reasons and issued Notice Re-Inviting Tender No.1/SE(WC)/2015-2016 dated 29.01.2016 in sealed item rate for the same work as per the earlier Tender Notice dated 06.11.2015, though the petitioner was found to be the lowest bidder for both the Groups 2 & 3 of said contract work. 4. Being aggrieved with the said action of the respondents in issuing said Re-Inviting Tender Notice dated 29.01.2016 for the same work, disregarding his lowest bids; the petitioner has preferred this petition. 5. The Court, on 08.02.2016, after hearing the learned counsel for the parties in the motion stage, while issuing notice to the respondents, in the interim directed the parties to this petition to maintain status-quo as on said date. 6. The respondents and the petitioner have exchanged their affidavits in the matter. Learned Government Advocate appearing for the State respondent Nos. 1 to 5 Ms. Melody L. Pachuau has also produced the relevant records of the case. 7. 6. The respondents and the petitioner have exchanged their affidavits in the matter. Learned Government Advocate appearing for the State respondent Nos. 1 to 5 Ms. Melody L. Pachuau has also produced the relevant records of the case. 7. In the affidavit of the State respondents filed on 24.05.2016 it is clearly said that after careful scrutiny of the matter, the authorities have found that the rates quoted by the petitioner in his bid to the Tender in question is excessively low and it was considered to be unworkable in view of the actual current prevailing market rates and as such, the Notification dated 29.01.2016 was issued cancelling the Re-Tender Notice No. 1/SE(WC)/2015-2016 dated 06.11.2015 due to Technical reasons and also issued the Notice of Re-Inviting Tender No.1/SE(WC)/2015-2016 dated 29.01.2016. 8. It is a settled law that only when a decision of a tender committee/employer is found to be arbitrary, malafide and/or discriminatory, in such circumstances only the Court exercises its power of Writ jurisdiction under judicial review; otherwise Court does not exercise its power under writ jurisdiction as an appellate authority with regard to a decision of a Tender committee in deciding bid documents/tender matters. 9. The Hon'ble Apex Court in the case of Michigan Rubber (India) Limited v. State of Karnataka & Ors., reported in (2012) 8 SCC 216 have held as follows :- "23. From the above decisions, the following principles emerge: (a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government. 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 court 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." 10. The Hon'ble Supreme Court in the case of B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., reported in (2006) 11 SCC 548 have held that - "56. It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefore; the same ordinarily being within its domain, court's interference in such matter should be minimal. The High Court's jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record." 11. The High Court's jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record." 11. The Hon'ble Supreme Court in the case of Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., reported in (2005) 6 SCC 138 have held that :- "11. The principles which have to be applied in-judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three-Judge Bench in Tata Cellular v. Union of India. It was observed 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." 12. The Hon'ble Apex Court in the case of Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd., reported in (1997) 1 SCC 738 have held that:- "9.........We are of the considered opinion that it was not within the permissible limits of interference for a court of law, particularly when there has been no allegation of malice or ulterior motive and particularly when the court has not found any mala fides or favouritism in the grant of contract in favour of the appellant. 10. 10. Therefore, though the principle of judicial review cannot be denied so far as exercise of contractual powers of Government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose." 13. In the case of Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 the Hon'ble Supreme Court have held that:- "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. 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 intervene." 14. 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 intervene." 14. On the facts & circumstances of the present case and on examining the records, the Court is of the considered opinion that though the petitioner was found to be the lowest bidder but when no such arbitrariness or illegality or malafide or ulterior motive or favouritism and other criteria has been satisfied in justifying interference of the Court in the decision making process of the respondents in issuing the impugned re-invitation of the tender dated 29.01.2016, this writ petition, being devoid of merit stands dismissed and the interim order of status-quo passed earlier on 08.02.2016 stands vacated.