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2017 DIGILAW 1415 (ORI)

Ocean Sparkle Limited v. State of Odisha

2017-12-08

B.R.SARANGI, VINEET SARAN

body2017
JUDGMENT : B.R. SARANGI, J. Odisha Construction Corporation Limited (OCCL)-opposite party no.2 published a tender call notice on 04.07.2016 inviting bids from the eligible class of contractors in respect of following four works: “(a) Dredging and Removal of Shoal No.1 at upstream of Mahanadi Barrage by dredging and disposal of dredged materials within 2.5 KM through pipeline. (b) Dredging and removal of Shoal No.2 at upstream of Mahanadi Barrage by dredging and disposal of dredged materials within 2.5 KM through pipeline. (c) Dredging and removal of Shoal No.-3,4,5(A), 5(B), 6(A) and 6(B) at upstream of Mahanadi Barrage near IOCL Pomp House and Birupa mouth by dredging and disposal of dredged materials within 2.5 KM through pipeline. (d) Driving of two rows of Z-type steel sheet piles & typing with 500 mm dia tie bar welding with flange along with construction of bank protection at right side upstream of Mhanadi Barrage from RD 600 M to RD 1600 M.” This writ petition is confined to the first three items of work, namely, ‘a’, ‘b’ and ‘c’, as quoted above. The last date for submission of bids was extended from time to time by way of corrigendum and at last it was fixed to 19.10.2016 by corrigendum dated 09.09.2016. The petitioner submitted its tender within the time specified in respect of three items of work, such as, ‘a’, ‘b’ and ‘c’. As per clause-7 of the tender call notice; which provides that the date, time and place of opening of cover-II (price bid) shall be intimated separately to those bidders who will be found eligible after evaluation of technical bids; opposite party no. 3 intimated the petitioner regarding the opening of price bid on 07.12.2016 by letter dated on 03.12.2016. The price bid was opened on the date fixed in which the petitioner was found to be lowest bidder, its price being lower than the estimated value. 2. At the time of opening of price bids, certain anomalies were pointed out with regard to shape of submission of Additional Performance Security (APS) by the petitioner. That is to say, the petitioner submitted its APS by way of Term Deposit Receipts (TDR), instead of demand draft. 2. At the time of opening of price bids, certain anomalies were pointed out with regard to shape of submission of Additional Performance Security (APS) by the petitioner. That is to say, the petitioner submitted its APS by way of Term Deposit Receipts (TDR), instead of demand draft. The petitioner in its representation dated 09.12.2016 addressed to opposite party no.2 clarified that if required the TDR can be encashed in the same way as a demand draft and, therefore, the TDR be accepted, instead of demand draft, for consideration of the price bid. Since the said representation followed by several others were not responded to, the petitioner filed Writ Petitions (Civil) No.23277, 23278 and 23279 of 2016 contending that the issue involved was a mere technical irregularity and did not relate to breach of any essential requirement of the tender and sought for direction to the opposite parties to accept the TDR and not to reject the bid on the ground of non-submission of demand draft. 3. Meanwhile, the office memorandum dated 04.05.2016 issued by the Works Department, by which APS was required to be furnished, was quashed by judgment dated 25.07.2017 passed in W.P.(C) No.7120 of 2017. Thereafter, by letter dated 17.08.2017, the petitioner again requested opposite party no.2 to accept the APS in the form of TDR. In response thereto, opposite party no.2 replied that due to pendency of the three writ petitions, referred to above, he was not in a position to take a decision in the matter. But all of a sudden the opposite parties, vide order dated 02.11.2017, cancelled the tender process. Challenging the said order of cancellation, the petitioner filed W.P.(C) No.23376 of 2017 on 06.11.2017. During pendency of the said writ petition, a fresh tender call notice was issued on 07.11.2017 in “the Times of India”, Bhubaneswar Edition and the tender was also floated online in the official website of the opposite parties on 08.11.2017 inviting bids in respect of the selfsame three items of work. Consequentially, the petitioner withdrew W.P.(C) No.23376 of 2017 seeking liberty to file a fresh writ application with better particulars, which was allowed by order dated 08.11.2017. Challenging the order of cancellation dated 02.11.2017 and consequential issuance of fresh tender call notice dated 07/08.11.2017, the petitioner has approached this Court by filing the instant writ petition. 4. Mr. Consequentially, the petitioner withdrew W.P.(C) No.23376 of 2017 seeking liberty to file a fresh writ application with better particulars, which was allowed by order dated 08.11.2017. Challenging the order of cancellation dated 02.11.2017 and consequential issuance of fresh tender call notice dated 07/08.11.2017, the petitioner has approached this Court by filing the instant writ petition. 4. Mr. B.P. Das, learned counsel for the petitioner strenuously urged that even though the bid of the petitioner, pursuant to tender call notice dated 04.07.2016 in Annexure-1, was found lowest, the same was cancelled on a flimsy ground that the petitioner, instead of demand draft, furnished the APS by way of TDR, which is as good as demand draft as per clause5 of the tender call notice. Therefore, such cancellation, being contrary to the settled principle of law, cannot sustain. He further contended that, when the matter was subjudice before this Court, issuance of fresh tender on 07/08.11.2016 in Annexure-13 amounts to arbitrary exercise of powers. Therefore, interference of this Court in exercise of extraordinary jurisdiction has been sought for. In order to substantiate his case, he has relied upon the judgments in Podar Steel Corporation v. Ganesh Engineering Works, (1991) 3 SCC 273 ; Star Enterprises v. City and Industrial Development Corporation of Maharastra, (1990) 3 SCC 280 ; Essel Mining and Industries Ltd. v. State of Odisha, AIR 2017 ORISSA 74; W.P.(C) No.19914 of 2016 (Gangadhar Jena v. State of Orissa) disposed of on 17.08.2017; Union of India v. Dinesh Engineering Corporation, AIR 2001 SC 3887 ; and Homogenomics Private Ltd. v. State of Orissa, AIR 2016 ORISSA 178. 5. Mr. L. Pangari, learned Senior Counsel appearing along with Mr. S.K. Nath, learned counsel for opposite parties-OCCL contended that power of the Court, in the matters of interference with the conditions of contract, is very limited. 5. Mr. L. Pangari, learned Senior Counsel appearing along with Mr. S.K. Nath, learned counsel for opposite parties-OCCL contended that power of the Court, in the matters of interference with the conditions of contract, is very limited. In view of clause-5 of the tender call notice dated 04.07.2016, where a specific condition has been stipulated that the bidder shall furnish APS separately, when the amount of the bid/tender is less than the value of the work put to tender, equal to the differential cost (tender value minus quoted value) drawn on any nationalized/scheduled bank in shape of demand draft in favour of OCCL payable at Cuttack failing which the tender will not be considered, it is contended that the said condition cannot be altered, modified or changed by furnishing the TDR which may or may not have the performance of the demand draft, as indicated in the said clause. For non-compliance of the said condition, since the tender of the petitioner has been cancelled and subsequently fresh tender has been floated, no illegality or irregularity can be said to have been committed by the authorities, as the submission of TDR towards APS, instead of demand draft, was not in conformity with clause-5 of the tender call notice. Therefore, such action of the authority does not call for interference by this Court in the present proceeding. To substantiate his contention, he has relied upon the judgments of the apex Court in Monarch Infrastructure (P) Ltd. v. Commission Ulhasnagar, AIR 2000 SC 2272 : (2000) 5 SCC 287 ; Michigan Rubber(India) Ltd. V. State of Karnataka, (2012) 8 SCC 216 ; Maa Binda Express Carrier v. Northeast Frontior Railway and others, (2014) 3 SCC 760 ; and W.P.(C) No.20283 of 2011 (Nationalist Lawyers Forum v. State of Orissa) disposed of on 27.02.2012. 6. We have heard Mr. B.P. Das, learned counsel for the petitioner and Mr. L. Pangari, learned Senior Counsel appearing along with Mr. S.K. Nath, learned counsel for opposite parties no.2 and 3, and perused the record. Though notice was issued in connected matters, i.e., Writ Petitions (Civil) No. 23277, 23278 and 23279 of 2016 pursuant to which opposite parties entered appearance and prayed that those cases may be listed on 16.11.2017 along with this matter, but no counter affidavit has been filed. On 22.11.2017, when the matter was taken up, Mr. Though notice was issued in connected matters, i.e., Writ Petitions (Civil) No. 23277, 23278 and 23279 of 2016 pursuant to which opposite parties entered appearance and prayed that those cases may be listed on 16.11.2017 along with this matter, but no counter affidavit has been filed. On 22.11.2017, when the matter was taken up, Mr. L. Pangari, learned Senior Counsel appearing for opposite parties no.2 and 3 contended that, in view of the urgency involved, the matter may be decided on the basis of the pleadings available on record. Therefore, with the consent of learned counsel for the parties, this matter is taken up for final disposal at the stage of admission. 7. Before delving into the issue involved in the instant case, it is pertinent to mention that in course of hearing Mr. L. Pangari, learned Senior Counsel addressed the Court that the Nationalist Lawyers Forum approached this Court by filing W.P.(C) No.20283 of 2011 challenging the construction work done by Indian Oil Corporation Limited (IOCL), which was going on in the Mahanadi river bed adjacent to river embankment, on the ground that the same would damage the entire area giving potential threat to Cuttack town. After due adjudication, this Court directed that during lean period there would be no water supply to IOCL and the IOCL would have its own reservoir near the plant area for utilization of water during those period. So far as survey, dredging and removal of old Anicut are concerned, the work should be taken up at the earliest and it should be completed before the actual drawal of water from the reservoir is made by the IOCL. So the Water Resource Department would have proposals to the IOCL, who would place funds with the respective executing agency as per the decision taken between the Water Resources Department and the IOCL. Subsequently, the judgment dated 27.12.2012 passed in W.P.(C) No.20283 of 2011, even though challenged before the apex Court, which was confirmed on 06.01.2015. Then, in Misc. Case No.3204 of 2015 this Court directed by order dated 16.04.2015 that the Secretary Water Resources Department shall issue necessary orders in consonance with the direction contained in order dated 27.02.2012. It is contended that in order to give effect to the order passed by this Court, steps have been taken inviting sealed tenders for the works in question. Case No.3204 of 2015 this Court directed by order dated 16.04.2015 that the Secretary Water Resources Department shall issue necessary orders in consonance with the direction contained in order dated 27.02.2012. It is contended that in order to give effect to the order passed by this Court, steps have been taken inviting sealed tenders for the works in question. But, as would be evident, this ground is not available in the tender call notice. Therefore, we are refraining from giving any observation to the above contention. In any case, since it was brought to the notice of the Court in course of hearing, the same has been taken note of. 8. Reverting back to the core issue involved in the case at hand, pursuant to the tender call notice dated 04.07.2016 in Annexure-1 issued by OCCL, in respect of the three items of work, namely, ‘a’, ‘b’ and ‘c’ the petitioner submitted its tender. Clauses-3 and 5 of the tender call notice, being relevant for effective adjudication of the issue involved, are extracted hereunder:- “3. The tender must be accompanied with Bid security/EMD (Earnest Money Deposit) of the amount specified for the work in the table above & should be valid for a minimum period of a 90 (Ninety) days from the date of opening of bid in shape of : (i) Minimum Rs. 15,00,000.00/- (Rupees fifteen lakhs) only in Account payee demand draft in favour of Odisha Construction Corporation Ltd. from any nationalized/schedule bank payable at Cuttack. (ii) Balance amount as per table above in shape of A/C payee demand draft/Term deposit of any nationalized or scheduled bank/Kisan Vikas Patra/Post office Savings Account/National Saving Certificate/Post office Time deposit account operative in Odisha, pledged in favour of “Odisha Construction Corporation Limited” payable at Cuttack.” xxx xxx xxx “5. The bidder shall furnish additional Performance security separately when the amount of the bid/tender is less than the value of the work put to tender. The contractor has to deposit this additional performance security equal to the differential cost (Tender value minus quoted value) (Value upto the nearest thousand) drawn on any nationalized/scheduled bank in shape of demand draft in faviour of Odisha Construction Corporation Ltd. Payable at Cuttack failing which the tender will not be considered.” 9. The contractor has to deposit this additional performance security equal to the differential cost (Tender value minus quoted value) (Value upto the nearest thousand) drawn on any nationalized/scheduled bank in shape of demand draft in faviour of Odisha Construction Corporation Ltd. Payable at Cuttack failing which the tender will not be considered.” 9. It is the admitted case of the petitioner that it has furnished APS separately in shape of TDR issued by the State Bank of India. But a perusal of clause-5, as has been quoted above, would clearly go to show that the bidder shall furnish APS separately, when the amount of the bid/tender is less than the value of the work put to tender, equal to the differential cost (tender value minus quoted value) drawn on any nationalized/scheduled bank in shape of demand draft in favour of OCCL payable at Cuttack failing which the tender will not be considered. That means, clause-5 specifically provides that the petitioner has to furnish demand draft towards the APS, failing which the tender will not be considered. It is the case of the petitioner that, in place of demand draft, it has furnished TDR issued by the State Bank of India, which is as good as demand draft. Learned counsel for the petitioner in this context has referred to clause-3 and sub-clause (ii) thereof of the tender call notice. In clause-3 it has been provided that the tender must be accompanied with Bid Security/EMD (Earnest Money Deposit) of the amount specified for the work in the table above and should be valid for a minimum period of 90 (ninety) days from the date of opening of bid, and as per sub-clause-(ii), the balance amount, as mentioned against each of the above work, in shape of account payee demand draft/term deposit of any nationalized or scheduled bank/kisan vikas patra/post office savings account/national saving certificate/post office time deposit account operative in Odisha, should pledged in favour of “Odisha Construction Corporation Limited” payable at Cuttack. It is contended that if the opposite parties are executing the Bid Security/EMD in shape of a term deposit in any nationalized bank or scheduled bank, there is no valid and justifiable reason for insistence of furnishing APS in shape of bank draft, which cannot be sustained. 10. Indubitably, the Bid Security/EMD cannot be equated with APS, as mentioned in clause-3 and 5 of the tender call notice. 10. Indubitably, the Bid Security/EMD cannot be equated with APS, as mentioned in clause-3 and 5 of the tender call notice. Since clause-5 of the tender call notice specifies that APS should be deposited in shape of a bank draft, the same cannot be modified, clarified or interpreted even in exercise of power of judicial review. Apart from the same, the petitioner, having participated in the proceeding with eyes wide open to the terms and conditions of the tender call notice, cannot subsequently turn around and say that because it was L1 in the price bid, the TDR furnished by it as APS, in place of demand draft, should be accepted. When clause-5 of the tender call notice specifically provides that APS should be drawn at any nationalized or scheduled bank in shape of bank draft in favour of OCCL payable at Cuttack failing which the tender would not be entertained, the authorities have got absolute power for consideration of a tender strictly in adherence of the conditions stipulated in the tender call notice. If a bidder does not fulfill any of the terms and conditions mentioned in the tender call notice, the tender submitted by such bidder cannot and should not be considered by the authority. Since the petitioner furnished TDR towards the APS, which is contrary to clause-5, the same is violative of the terms and conditions of the tender call notice and as such is not liable for consideration. More so, the jurisdiction of the Court, being very limited in contractual matters, cannot be exercised for modifying or clarifying the conditions stipulated in the tender call notice. 11. On careful appraisal of the judgments cited on behalf of the petitioner, this Court finds that in Poddar Steel Corporation (supra) the apex Court has held that in every case where a transaction resolves itself into paying money by ‘A’ to ‘B’ and then handing it back again by ‘B’ to ‘A’, if the parties meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards and whereby literal compliance of every term of the tender notice was not insisted upon. But in the instant case the bid of the petitioner has been cancelled, as it had not furnished APS in the shape of bank draft, as was specifically required in clause-5 of the tender call notice, but had submitted TDR. In such view of the matter, this Court is of the considered view that the aforesaid case is not applicable to the present context. So far as the case of Gangadhar Jena (supra) is concerned, the same is also not applicable being factually different from the present case. In Dinesh Engineering (supra) the apex Court held that the opposite parties therein have right to cancel or rescind the tender at any time before finalization of the same, but such cancellation or recession can only be in public interest and not at the cost of the party, who have already undergone the process of tender and accepted to be successful bidder among the participants. But here is a case where the tender has been cancelled, as the condition stipulated in clause-5 of the tender call notice has not been satisfied. Even if the petitioner was L1, its tender could not have been accepted in view of clause-5 of the tender call notice, as admittedly, instead of bank draft, the petitioner had furnished APS in shape of TDR, which cannot be a substitute of the bank draft. All other judgments, which have been cited by learned counsel for the petitioner, having been decided on its own facts and circumstances, have no application to the present context. 12. In Michigan Rubber (supra), on which reliance placed by Mr. L. Pangari, learned Senior Counsel appearing for the opposite parties, it has been held by the apex Court that the Court cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. Thus, it is contended that if the terms in the tender call notice clearly specify that the tenderer has to furnish bank draft towards APS, by modifying or altering the same, the petitioner cannot be permitted to furnish the APS by any other means, viz., the TDR. If that be so, it would amount to interference with the terms and conditions prescribed in the tender call notice, which this Court is not inclined to do. If that be so, it would amount to interference with the terms and conditions prescribed in the tender call notice, which this Court is not inclined to do. In Maa Binda Express Carrier (supra), on which reliance has also been placed by the learned Senior Counsel appearing for the opposite parties, the apex Court, while dealing with the matter with regard to scope of judicial review on award of contract by the State and its instrumentalities (which has been settled in a long line of judgments of the apex Court), held that submission of a bid/tender in response to a notice inviting tenders is only an offer which State or its agencies are under no obligation to accept. Bidders participating in the tender process cannot insist that their bids/tenders should be accepted simply because a bid is the highest or lowest. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in evaluation of their bids/tenders. Therefore, the decision to cancel the tender process was in no way discriminatory or mala fide nor violated any fundamental right of appellants so as to warrant any interference by Court. The scope of judicial review is no more remains res integra. Therefore, in the matters like this, the Court is refrained from interfering with any of the terms and conditions of the tender call notice by exercising the power of judicial review and, as such, the opposite parties having cancelled the tender of the petitioner adhering to the terms and conditions of the tender call notice, this Court is not inclined to interfere with the impugned notice of cancellation. 13. Considering the facts and circumstances of the case from all angles, this Court arrives at the conclusion that since the petitioner has not complied with the condition stipulated in clause-5 of the tender call notice in furnishing the APS in shape of bank draft, this Court would refrain from issuing any direction to accept the TDR, which has been submitted in place of bank draft, as the same would amount to interference with the condition stipulated in clause-5 of the tender call notice. As such, this Court is not inclined to interfere, either with the impugned order of cancellation dated 02.11.2017 in Annexure-11, or consequent fresh tender call notice issued on 07/08.11.2017 in Annexure-13. As such, this Court is not inclined to interfere, either with the impugned order of cancellation dated 02.11.2017 in Annexure-11, or consequent fresh tender call notice issued on 07/08.11.2017 in Annexure-13. The opposite parties are thus permitted to proceed with the fresh tender call notice, referred to above. 14. In the result therefore, the writ petition is dismissed being bereft of merits. There shall be however no order as to cost.