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2017 DIGILAW 872 (GAU)

T & T PROJECTS LTD. v. STATE OF ARUNACHAL PRADESH

2017-07-10

AJIT SINGH, MANOJIT BHUYAN

body2017
JUDGMENT : Ajit Singh, J. Mr. K.N. Choudhury, learned senior counsel, assisted by Mr. J. Patowary, learned counsel for the appellant. 2. Mr. B.D. Goswami, learned Additional Advocate General, Arunachal Pradesh, for Respondent No.3, Mr.I Choudhury, Mr. D. Panging and Mr. S. Biswakarma, learned counsel for Respondent No.5. 3. Heard on admission. 4. This intra-court appeal is directed against the order dated 21.6.2017 passed by the learned Single Judge of Itanagar Bench of this High Court, whereby he has dismissed appellant's WP(C)No.220(AP) of 2017. 5. The State Government of Arunachal Pradesh through its Power Department issued an Invitation for Bid inviting Single Stage Bids in two parts for execution of the project, viz, Electrification works of Itanagar town, Naharlagun town & Seppa town, Pasighat town, Aalo town, Daporijo town, Tezu town and Namsai town in Arunachal Pradesh under Integrated Power Development Scheme through a process of e-tendering. The estimated cost of the work is Rs. 150.90 crores. The work is required to be executed under a centrally sponsored scheme to be funded by Rural Electrification Corporation Limited/Power Finance Corporation Limited. The Government of Arunachal Pradesh is only the implementing agency of the Scheme. 6. The appellant, Respondent No.5 and one M/s Capital Power Infrastructure Private Limited were the three bidders. Since the technical bids of all the three bidders were found to be responsive, their financial bids were opened on 2.2.2017. On opening the financial bids it was found that Respondent No.5 quoted Rs. 109,49,01,337.97P (L-1), M/s Capital Power Infrastructure Private Limited quoted Rs. 127,21,24,219.93P (L-2) and appellant quoted Rs. 149,83,000,00.08P (L-3). Thus, the bid quoted by Respondent No.5 was the lowest and that of appellant third highest. Therefore, the authorities of the Power Department decided to award the work in favour of Respondent No.5 where after Letter of Intent dated 24.3.2017 was also issued in its favour. It is however to be noted that having regard to the low price quoted by Respondent No.5 as compared to the estimated cost of the work, the Chief Minister of Arunachal Pradesh put up a note directing that Respondent No.5 be asked to deposit additional performance security of 10% so as to ensure quality and time bound completion of the contract work. 7. Aggrieved with the allotment of work order in favour of Respondent No.5, the appellant filed WP(C) No.220(AP) of 2017. 7. Aggrieved with the allotment of work order in favour of Respondent No.5, the appellant filed WP(C) No.220(AP) of 2017. The appellant challenged the acceptance of bid of Respondent No.5 on the following grounds: (i) The price quoted by Respondent No.5 being below 27% of the tender value, the same was liable to be rejected in the light of Section 20.4.3.2 of the CPWD Manual, 2014; and (ii) That rate quoted by Respondent No.5 was unworkable inasmuch as the contractual work cannot be executed at such low price. 8. The learned single Judge however disagreed with the appellant and by the impugned order has dismissed the writ petition. It is in this background the appellant has filed the present appeal on the same grounds. 9. After hearing the learned counsel for the appellant, we find no merit in the writ appeal as we find ourselves in complete agreement with the reasons assigned by the learned Single Judge in dismissing the writ petition. We, in fact, adopt the reasons and reproduce the same herein under: "23. The contractors are hard headed businessman who, it is believed, are having sufficient experience and exposure in execution of works of similar nature of such high value and, therefore, it will be difficult to presume that any bidder would quote a low rate without understanding the implication it would have in the execution of the work. It is no doubt true that the rate quoted by the L-1 bidder i.e. the respondent No.5 was much lower than the estimated cost but that by itself, in the absence of any specific condition in the ITB, cannot lead to rejection of the price bid offered by the respondent No.5. If quoting of low price is perceived as a ground for poor quality of work, I find from the ITB that there are adequate measures to protect the interest of the State when it comes to quality control and, therefore, there is no basis for this court to readily presume that the low price quoted by the Respondent No.5 was only aimed at delivering poor quality of work and beyond the time frame. 24. 24. Another significant aspect that has invited the attention of this Court is the conscious role played by the Chief Minister of the State who had put up a note requiring the respondent No.5 to deposit additional 10% performance security for protecting the interest of the State. Although Mr. K.N. Choudhury, learned senior counsel for the petitioner has argued that such action of the Chief Minister was without the authority of law, I am unable to accept the said argument for two reasons, firstly, clause 9.3.1 of the General Conditions of Contract (GCC) permits the authorities to ask for additional performance security from the contractor and, therefore, it cannot be said that insistence on 10% additional performance security was de hors the contract. Secondly, the Chief Minister, being the Executive head of the State, can never be denuded of his authority to take any decision for protecting the interest of the Government or the public interest in general. 25. As noted above, even without the 10% performance security, the selection of the respondent No.5 could not have been held to be bad under the ITB. However, expressing concern about the interest of the State, the Chief Minister has thought it prudent to insist on additional security from the bidder. The project is meant to bringing light to the thousands of households spread across the remote corners of the State. Being the executive head of the State, the Chief Minister was certainly well within his jurisdiction and power to demand such additional security from the contractor and the said decision cannot, by any stretch of reasonable reckoning, be termed as unwarranted. Rather, the stand of the Chief Minister displays a great degree of dynamism in the thought process while maintaining the concern for early implementation of the project at an economical cost without jeopardizing the interest of the State." 10. It is also to be noted that bid amount quoted by the appellant is the third highest and, therefore, bidder of second highest bid will have better claim over the appellant. Also, as seen above, the work is required to be executed under a centrally sponsored scheme to be funded by the Rural Electrification Corporation Limited/Power Finance Corporation Limited following certain standards and guidelines and the Government of Arunachal Pradesh is merely the implementing agency. Also, as seen above, the work is required to be executed under a centrally sponsored scheme to be funded by the Rural Electrification Corporation Limited/Power Finance Corporation Limited following certain standards and guidelines and the Government of Arunachal Pradesh is merely the implementing agency. The appellant admittedly has not made any complaint to the Central Government against the decision making process of the State of Arunachal Pradesh. 11. The appeal is accordingly dismissed.