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2017 DIGILAW 246 (JK)

Satish Singh Jamwal v. State

2017-05-19

JANAK RAJ KOTWAL

body2017
ORDER : Janak Raj Kotwal, J. The Executive Engineer PWD (R&B) Division, Udhampur issued e-NIT No. 24 of 2015-16 dated 9-6-2016 inviting tenders by e-tendering mode from approved and eligible contractors for execution of work, namely, 'Upgradation of road from Thial to Chountra Mata. The estimated cost of the work was shown as Rs. 24.10 crores. The petitioner and the respondent No. 4, among others, submitted their technical as well as financial bids. After technical evaluation by the Tender Opening Committee (for short, the Committee), six bidders including the petitioner and the respondent No. 4 were found responsive. On opening the financial bids, respondent No. 4 was found to be the lowest bidder (L-l) followed by TBA Infrastructure Private Limited as L-2 and the petitioner as L-3. It is admitted that the amount quoted by the respondent No. 4 was more than 15% below the advertised amount, whereas that quoted by the petitioner was less than 15% below the advertised amount. It may be stated that the amount quoted by the petitioner (L-3) is Rs. 21,15,98,625.00 and that quoted by respondent No. 4 (L-l) is Rs. 19,51,91,954.00. The Committee, thus, decided to announce the respondent No. 4 (L-l) as the successful bidder. 2. In this writ petition, petitioner seeks writ of mandamus directing respondents 2 & 3 to reject the bid of respondent No. 4 for the reason that the bid amount quoted by him is more than 15% below the advertised amount but he has not attached the required CDR equivalent to 5% of the bid value as the Additional Performance Security. Petitioner also seeks writ of mandamus directing the respondents-2 & 3 to consider the bid submitted by him and allot the work to him. 3. Heard learned counsel for the parties and perused the record. 4. It is not denied that clause (32.1) (ii) of the standard bidding document-for civil works provides for furnishing of the Additional Performance Security by the bidders who quote the, bid amount less by 15% or more than the advertised amount. It reads: 'Additional Performance Security of 5% of the bid value in the form of CDR shall have to be uploaded by the bidders who have quoted bid amount less by 15% or more than the advertised amount, otherwise the tender will be rejected. It reads: 'Additional Performance Security of 5% of the bid value in the form of CDR shall have to be uploaded by the bidders who have quoted bid amount less by 15% or more than the advertised amount, otherwise the tender will be rejected. The performance security deposited by the successful bidder shall be released only after defect liability period of 03 years, from the date 7 completion of the work, is over.- 5. It is not denied also that the bid amount quoted by the respondent No. 4 (L-l) is less by more than 15% of the advertised amount but he has not complied with the aforementioned condition as the Additional Performance Security of 5% of the bid value in the form of CDR was not furnished and uploaded by him, while uploading his tender documents, which he was supposed to do in terms of Clause (32.1) (ii) supra. 6. Contention of the petitioner is that the aforementioned condition renders a tender to be rejected in case Additional Performance Security is not uploaded along with the tender documents. Stand of the respondents stated in the reply affidavits filed on their behalf the respondents, on the other hand, is that even though the respondent No. 4 (L-l) had not uploaded the Additional Performance Security, the Committee observed that word ' uploaded used in the aforementioned clause is only a surplusage, which had gone unnoticed during the tendering process and is in contravention with the secrecy of the bid. The Committee, therefore, decided to announce respondent No. 4 as the successful bidder and to seek Additional Performance Security of 5% from him before allotment of the work to him. It is contended also that the intention of the said clause was to provide extra safeguard to the employer against performance of the successful bidder, who had quoted the bid amount less by 15% or more. 7. Counsel for the petitioner, Mr. M.K. Bhardwaj, learned Senior Advocate, submitted that a pre-condition provided in the NIT can neither be clarified nor ignored by the Tendering Authority. The aforementioned condition clearly provides for rejection of the tender if the requirement of the said condition is not fulfilled so the only option available to the respondents was to reject the Tender of the 4th respondent. M.K. Bhardwaj, learned Senior Advocate, submitted that a pre-condition provided in the NIT can neither be clarified nor ignored by the Tendering Authority. The aforementioned condition clearly provides for rejection of the tender if the requirement of the said condition is not fulfilled so the only option available to the respondents was to reject the Tender of the 4th respondent. Learned Senior Advocate submitted also, though beyond the pleadings, that even the second lowest (L-2) bidder suffered from the same deficiency so the contract should have been allotted to the petitioner being the third lowest bidder. Learned counsel argued that the decision of the Committee is arbitrary and illegal, which has caused prejudice to the petitioner. The learned counsel relied upon the Supreme Court judgment in Ramana Dayaram Shetty v. International Airport Authority of India & Ors. (1979) 3 SCC 489 ) : ( AIR 1979 SC 1628 ) and a Division Bench judgment of this Court in M/s G. M. Trading Corporation & Anr. v. State of J.&K. & Ors., 2016 (1) SLJ 185 (J & K) 8. Per contra, Mr. Sheikh Faraz Iqbal, Dy. A.G. argued that no arbitrariness can be attributed to the decision taken by the authorities in accepting the respondent No. 4 as the lowest bidder. On the strength of the plea taken in the affidavits filed on behalf of the respondents, learned Dy. A.G. sought to explain as to how uploading the additional performance security would have adversely affected the tendering process. Mr. Iqbal also argued that the decision taken by the authorities, who have expertise in the field, cannot be interfered with in exercise of the power of Judicial Review by this Court. He relied upon the Supreme Court judgment Montecarlo Ltd. v. NTPC Ltd., AIR 2016 SC 4946 . 9. Mr. P.N. Raina, learned Senior Advocate, appearing on behalf of respondent No. 4, besides supporting the submissions made on behalf of the official respondents, argued further that the tendering authority does have the power of interpretation of a clause of the NIT as long as such interpretation is not arbitrary or actuated with bias or mala fide. Learned counsel relied upon G. J. Fernandez v. State of Karnataka (1990) 2 SCC 488 : ( AIR 1990 SC 958 ) 10. Learned counsel relied upon G. J. Fernandez v. State of Karnataka (1990) 2 SCC 488 : ( AIR 1990 SC 958 ) 10. The short question arising in this writ petition is, whether the respondents (tendering authority) have committed illegality by not rejecting the tender/bid of the 4th respondent for non-compliance of the aforementioned condition of the NIT (standard bidding document) and opting to ask him to furnish the additional performance security before allotment of the work to him? 11. In Ramana Dayaram Shetty ( AIR 1979 SC 1628 ) (supra), the standard of norms laid down in the NIT was that only a person running a registered IInd. class hotel or restaurant and having at least 5 years-experience would be eligible to tender. The 1st respondent therein entertained the tender of the 4th respondent therein even though they did not have the 5 years-experience of running IInd class restaurant or hotel. The Supreme Court held in this case that the action of the 1st respondent in accepting the tender of the 4th respondent, even though they did not satisfy the prescribed condition of eligibility, was clearly discriminatory, since it excluded other persons similarly situate from tendering for the contract and it was also arbitrary and without reason. 12. In M/s G.M. Trading Corporation (supra), the learned Division Bench of this Court has observed that ' once it is held that Government is free to lay down pre-conditions and pre-qualifications for entertaining tender, it is necessary to follow that such pre-conditions and pre-qualifications are meant to be adhered to and not observed in breach. The Court cannot in exercise of power of judicial review sift and analyse pre-conditions and pre-qualifications and label some of the conditions as essential and other conditions collateral.- 13. In Montecarlo Ltd. v. NTPC Ltd. ( AIR 2016 SC 4946 ) (supra) relied upon by the learned Dy. A.G. the Supreme Court has referred with approval to an earlier judgment of the Court in Sterling Computers Ltd. v. M/s M & N Publications Ltd. & Ors. In Montecarlo Ltd. v. NTPC Ltd. ( AIR 2016 SC 4946 ) (supra) relied upon by the learned Dy. A.G. the Supreme Court has referred with approval to an earlier judgment of the Court in Sterling Computers Ltd. v. M/s M & N Publications Ltd. & Ors. (2012) 8 SCC 216 : ( AIR 1996 SC 51 ) where the Hon'ble Court has held that ' under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for the purpose of taking a decision as to whom the contract be awarded and at what terms.- 14. The Supreme Court in Montecarlo Ltd. ( AIR 2016 SC 4946 )(supra), after referring to certain other authorities has held also that: 'Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or sub-serves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.- 15. In G. J. Fernandez ( AIR 1990 SC 958 ) (supra) relied upon by the learned Senior Advocate appearing on behalf of respondent No. 4, the Supreme Court has observed that if a party has been consistently and bona fide interpreting the standards prescribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe with the conditions differently. Supreme Court in this case has further held that the conditions and stipulations in a tender notice have two types of consequences. The first is that the party issuing tender has the right to punctiliously and rigidly enforce them. Supreme Court in this case has further held that the conditions and stipulations in a tender notice have two types of consequences. The first is that the party issuing tender has the right to punctiliously and rigidly enforce them. The second consequence is that any deviation, if made, should not result in arbitrariness or discrimination.- 16. It is well settled that Courts do not sit in appeal against the decisions taken in contract matters by the tendering authorities. The Division Bench of this Court in M/s G. M. Trading Corporation (supra) has reiterated that ' the instrumentalities and corporations are to be given some freedom in laying down the criteria for award of contracts, evaluation of bids. The Courts are to feel dissuaded from interfering in contract matters in exercise of power of judicial review, unless the decision taken is palpably tainted with illegality, irrationality or mala fide. Adherence to the pre-conditions and pre-qualifications laid down in the NIT and/or tender documents is to be insisted upon but at the same time power of the tendering authority to interpret a particular condition in a particular way is well recognised as long as such interpretation does not tamper with a prescribed condition of eligibility, is not arbitrary or actuated by bias or mala fides and doing undue favour to one of the bidders. 17. In the case on hand, the aforementioned condition in the NIT envisages providing additional performance security equivalent to 5% of the advertised amount in the form of CDR by the bidders who quote less by 15% or more than the advertised amount and also to upload the same along with the tender documents. Obviously this was required to be done at the time of uploading of the bids. The purpose behind furnishing additional performance security is to guarantee the execution and completion of the work by the contractors who quote a lower rate, that is, less than 15% or more than the advertised amount. I, however, find substance in the plea taken on behalf of the official respondents that the uploading of the additional performance security along with the bids (tender documents) will affect the secrecy of the tender as it would become known as to how many bidders have quoted less than 15% or more of the advertised amount. I, however, find substance in the plea taken on behalf of the official respondents that the uploading of the additional performance security along with the bids (tender documents) will affect the secrecy of the tender as it would become known as to how many bidders have quoted less than 15% or more of the advertised amount. The required purpose is not defeated and rather can be well achieved by obtaining the additional performance security before allotment of the contract to the lowest eligible bidder, what the respondents have decided to do in this case. 18. As said above, respondent No. 4 is the lowest bidder having quoted Rs. 19,51,91,954/- as against the advertised amount of 24. 10 crore rupees, whereas the petitioner is the third lowest having quoted Rs. 21,15,98,625/-. The second lowest bidder, however, is not before the Court as he is not party to this petition. The difference in the amount quoted by the petitioner and that by the respondent No. 4 is about two crore rupees. It nobody's case that the respondent No. 4 does not possess the required qualification or expertise and competence to execute the work in question. The Tendering Authority by its decision to allot the work to the lowest bidder after obtaining additional performance security before allotment of the work to him has saved about two crores of the public money and cannot be said to have acted arbitrarily or with bias or mala fides against the petitioner or to unduly favour the respondent No. 4. No illegality can be said to have been committed by the authorities by taking the view that requirement of uploading the additional performance security was a surplusage and that the required purpose can be achieved by obtaining ; the additional performance security before allotting the work to the 4th respondent. 19. Viewed thus, I find no merit in this writ petition and therefore, dismiss the same. 20. The interim direction granted in this case shall stand vacated.