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2018 DIGILAW 1621 (GAU)

Vilelie Khamo and Sons v. Vikram Infrastructure Co.

2018-11-16

A.K.GOSWAMI, NELSON SAILO

body2018
JUDGMENT & ORDER : NELSON SAILO, J. 1. By this common Judgment and Order, four writ appeals are being taken up for disposal since the issues involved are similar and identical. WA No.269/2018 and WA No. 270/2018 were initially filed before the Permanent Bench of this Court at Kohima. However, they were transferred to the Principal Seat at Guwahati and re-numbered as aforementioned in terms of order dated 28.09.2018 passed by this Court. These two appeals are filed by M/s Vilelie Khamo & Sons (hereafter referred to as the Private Party) who were respondent No.4 in WP(C) No. 3916 of 2017 and WP(C) No. 1473 of 2018. 2. WA No. 295 of 2018 and WA No.298 of 2018 are filed by the Chief Engineer, Public Works Department (Road & Building) [PWD (R&B)], Government of Nagaland. They were also initially filed before the Permanent Bench of this Court at Kohima but were subsequently transferred to the Principal Seat at Guwahati and re-numbered as aforementioned. 3. All the four writ appeals are preferred against a common Judgment and Order dated 19.06.2018 passed by the writ Court in WP(C) No. 3916 of 2017 and WP(C) No. 1473 of 2018 which were filed by M/s Vikram Infrastructure Company (hereinafter referred to as the petitioner). 4. Brief facts for disposal of the writ appeals may be narrated at the outset. The Ministry of Road, Transport and Highway (MoRT & H), Government of India on 21.02.2017, issued a Notice Inviting Bid (NIB) for construction of 2 Lane/2 Lane with Paved Shoulders Configuration of Capital By-pass covering a length of 34.171 km in the State of Nagaland (Dimapur to Kohima). The work is split into 3 (three) Packages viz; Packages-I from 0 (zero) 11 km, Package-II from 11 km -23 km and Package-III from 23 km -23 km. 5. The subject matter of the present appeals relate to Package-I. As per the NIB, the last date for submission of e-tender was 05.04.2017 at 1700 hrs. The bid security documents, power of attorney etc. was to be submitted physically on or before 1200 hrs. of 06.04.2017 in the Office of the Chief Engineer, PWD (R&B), Kohima and to be opened at 1300 hrs. on the same day. As scheduled, the Technical Evaluation Committee opened the Technical Bids on 06.04.2017 at 1300 hrs. The bid security documents, power of attorney etc. was to be submitted physically on or before 1200 hrs. of 06.04.2017 in the Office of the Chief Engineer, PWD (R&B), Kohima and to be opened at 1300 hrs. on the same day. As scheduled, the Technical Evaluation Committee opened the Technical Bids on 06.04.2017 at 1300 hrs. and found the Technical Bids of the Private Party and one M/s Coal Mines Associates Pvt. Ltd. to be responsive. Therefore, their Financial Bids were recommended to be opened. 6. As for the petitioner, one of the seals in the envelope containing the bid documents was found to be broken and therefore, it was returned for rectification. However, as the petitioner failed to re-submit the same within the stipulated time of 1200 hrs on 06.04.2017 the same was not accepted. Being aggrieved, the petitioner submitted a representation to the respondent authority concerned on the same day itself asking why his technical bid was not accepted. In response, the Chief Engineer of PWD, (R&B) informed the petitioner vide communication dated 10.04.2017 that the envelope containing the bid documents was found to be tampered and returned. However, it was presented again but beyond the prescribed time. Subsequently, the Financial Bid was opened on 06.06.2017. 7. The petitioner thus being aggrieved filed WP(C) No. 2916 of 2017 on 21.06.2017 seeking a direction to the State respondents to accept and declare its Technical Bid to be a responsive and a valid bid. While issuing notice of motion on 10.07.2017, the learned Single Judge permitted the respondents to go ahead with the process of tender subject to consideration of the price bid of the petitioner as well and before a final decision is taken in the matter. 8. However, despite the interim order, the petitioner came to learn from the affidavit-in-opposition filed by the Chief Engineer, PWD (R&B) that the Financial Bids were opened and work was already allotted and in the process, the bid of the petitioner was not considered. The petitioner therefore, filed a contempt petition against the Chief Engineer concerned i.e. Cont. Cas. (C) No.533 of 2017. The petitioner also filed an interlocutory application i.e. I.A. (C) No. 3637 of 2017, praying for a further direction to the respondent authorities to stop the execution of the tender work and/or not to proceed with the tender work. The petitioner therefore, filed a contempt petition against the Chief Engineer concerned i.e. Cont. Cas. (C) No.533 of 2017. The petitioner also filed an interlocutory application i.e. I.A. (C) No. 3637 of 2017, praying for a further direction to the respondent authorities to stop the execution of the tender work and/or not to proceed with the tender work. Thereafter, the petitioner upon gathering information about allotment of the work to the Private Party filed the second writ petition i.e. WP(C) No.1473 of 2018. 9. The two writ petitions consequently came up for consideration before the learned Single Judge and vide the common Judgment and Order dated 19.06.2018, both the writ petitions came to be disposed with certain directions to the respondent authorities. The learned Single Judge directed that the allotment of work under Package-I in favour of the Private Party will be subject to fresh evaluation of the price bid of the petitioner vis-à-vis the Private Party and on fresh evaluation, if the price bid tendered by the petitioner does not match the price bid of the Private Party as to its feasibility, only then, the Private Party can continue the work with Package–I. It was also observed that in view of the interim order passed in the writ petition on 10.07.2017, the direction already given will have to be complied with before work under Package-I is permitted to proceed further. 10. We have heard Mr. CT Jamir, the learned senior counsel assisted by Mr. Wati Jamir for the appellants in WA No. 269 and WA No. 270 of 2018 and also Mr. SS Dey, the learned senior counsel assisted by Ms. M Kechii, the learned Government Advocate, Nagaland for the appellants in WA No. 295 and WA No. 298 of 2018. We have also heard Mr. KK Mahanta, the learned senior counsel assisted by Mr. KM Mahanta for the respondent No.4/writ petitioner. 11. Mr. CT Jamir, the learned senior counsel submits that the entire contract work is in the Engineering Procurement and Construction mode i.e. EPC mode. He submits that pursuant to the opening of the Technical Bids, the Financial Bids were opened on 06.06.2017. KK Mahanta, the learned senior counsel assisted by Mr. KM Mahanta for the respondent No.4/writ petitioner. 11. Mr. CT Jamir, the learned senior counsel submits that the entire contract work is in the Engineering Procurement and Construction mode i.e. EPC mode. He submits that pursuant to the opening of the Technical Bids, the Financial Bids were opened on 06.06.2017. The approval of MoRT & H was communicated on 05.07.2017 by the Executive Engineer (NER) on behalf of the Director General (RD) and Special Secretary, MoRT & H whereafter, a letter of acceptance for the work in respect of Package-I was issued to the Private Party by the Chief Engineer, PWD (R&B) on 28.07.2017. An agreement was signed between the parties on 10.08.2017 whereafter, the Private Party deployed men and machineries in the work site. In fact, when the interim order was passed in WP(C) No. 3916 of 2017 on 10.07.2017, the Financial Bids were already opened. The learned senior counsel submits that as per the Critical Data Sheet in the NIB dated 21.02.2017, the precise date and time for physical submission of bid security/POA etc. was stipulated as 1200 hrs. on 06.04.2017. Further, as per Clause 2.11.5, if the envelope containing the bid documents is not sealed and marked as instructed, the authority concerned will have no responsibility for misplacement or pre-mature opening of the contents of the bids submitted and consequent loss, if any, suffered by the bidder. Therefore, the respondent authority concerned on 06.04.2017 upon finding the envelope submitted by the petitioner to be tampered returned the same for rectification. However, the petitioner failed to resubmit the envelope containing its bid documents within the stipulated time of 1200 hrs on 06.04.2017. Mr. CT Jamir the learned senior counsel submits that in view of the stipulation, the petitioner’s bid documents were rightly not accepted by the authorities. 12. He further submits that despite the rejection being communicated to the petitioner formally on 10.04.2017 and on 24.04.2017 as well, the petitioner filed its first writ petition only on 21.06.2017 i.e. WP(C) No. 3916 of 2017. In fact, no explanation for belated filing of the writ petition has also been made by the petitioner. 13. 12. He further submits that despite the rejection being communicated to the petitioner formally on 10.04.2017 and on 24.04.2017 as well, the petitioner filed its first writ petition only on 21.06.2017 i.e. WP(C) No. 3916 of 2017. In fact, no explanation for belated filing of the writ petition has also been made by the petitioner. 13. The learned senior counsel further submits that the writ Court by regularising the technical bid of the petitioner and directing the consideration of its financial bid through the impugned Judgment and order dated 19.06.2018 has assumed the role of an expert which otherwise is impermissible in law. He also submits that the Private Party after being selected for the work under Phase-I submitted the stipulated performance guarantee while mobilising all its resources for the allotted work and in fact, had already completed 10% of the work when the impugned Judgment and Order was passed and that this aspect of the matter, was not even considered by the writ Court. 14. He further submits that if the Private Party completes the work ahead of scheduled time, bonus will be earned but if the scheduled completion time is breached, the Private Party will be penalised for each day’s delay. Therefore, under the given facts and circumstances and considering the greater public interest involved, the impugned Judgment and order cannot be sustained and the same should be set aside and quashed. In support of his submissions, Mr. CT Jamir, the learned senior counsel relies upon the following authorities:- (i) Tejas Construction & Infrastructure Private Ltd. Vs. Municipal Council Sendhwa & Anr. (2012)6 SCC 464 . (ii) Michigan Rubber (India) Ltd. Vs. State of Karnataka & Ors. (2012)8 SCC 216 . (iii) Charulata Behera Vs. Pravati Parida & Ors. (2015)4 SCC 30 . 15. Mr. SS Dey, the learned senior counsel appearing for the State of Nagaland by referring to paragraph Nos. 8 and 9 of the writ petition i.e. WP (C) No. 3916 of 2017 submits that the petitioner on 06.04.2017 itself knew about the non-acceptance of its bid documents by the respondent authority concerned. However, the petitioner approached the writ Court by filing WP(C) No. 3916 of 2017 only on 21.06.2017 without any explanation as to why the writ petition could not be filed immediately or soon after the non-acceptance of its Technical Bid. However, the petitioner approached the writ Court by filing WP(C) No. 3916 of 2017 only on 21.06.2017 without any explanation as to why the writ petition could not be filed immediately or soon after the non-acceptance of its Technical Bid. The petitioner again on 05.03.2018 filed the second writ petition i.e. WP(C) No. 1473 of 2018 and likewise, without any explanation as to why it was filed long after a lapse of 8 months from the date of issuance of the letter of acceptance . He submits that from a perusal of the writ petition, there is clearly no substance and in fact, on the ground of delay itself, the writ petitions merit dismissal. 16. The learned senior counsel submits that the petitioner has also failed to show his capacity in terms of clause 2.2.2.2. of the NIB which stipulates that a prospective bidder must demonstrate its technical capacity and experience by showing that it has undertaken construction works by itself in a Public Private Partnership (P.P.P.) project involving more than Rs.85.96 crores. Against this stipulation, the petitioner was only able to show the work undertaken by it to be roughly Rs.15.18 crores and therefore, the petitioner even otherwise was not eligible to participate. The learned senior counsel further submits that the State Government is monitoring the construction work via satellite and therefore, there cannot be any deviation from the plan and programme. He thus submits that under the facts and circumstances of the case, the impugned judgment and order cannot be sustained and the same should be set aside. 17. Mr. KK Mahanta, the learned senior counsel appearing for the petitioner, at the outset, submits that the delay on the part of the petitioner in approaching this Court was because the petitioner was exploring ways and means to redress its grievances by approaching the respondent authorities. However, since no solution was forthcoming, the petitioner, as a last resort was led to filing the 2(two) writ petitions. Mr. KK Mahanta submits that the manner in which the Technical Bid of the petitioner was not accepted is most illegal and arbitrary. The same was returned in the last minute for rectification. Nevertheless, after necessary rectification was made and presented for resubmission before the authority concerned, the same was refused in a most mechanical manner to the surprise of the petitioner. 18. The same was returned in the last minute for rectification. Nevertheless, after necessary rectification was made and presented for resubmission before the authority concerned, the same was refused in a most mechanical manner to the surprise of the petitioner. 18. He submits that when the petitioner approached the writ Court on 10.07.2017 through WP(C) No.3916 of 2017, an interim order was passed in the presence of the respondent authorities allowing them to go ahead with the tender process, subject to the price bid of the petitioner being considered before final decision was taken in the matter. He submits that when the interim order was passed in the presence of the respondent authorities, the Court should have been informed that the Financial Bid was already opened on 06.06.2017. However, no submission was made in this regard and no application for vacation/modification/alternation of the interim order dated 10.07.2017 was filed by the appellants as respondents in the writ petition. Therefore, the writ Court is fully justified in passing the impugned judgment and Order. 19. The learned senior counsel by referring to the minutes of the meeting dated 06.04.2017 annexed to the affidavit-in-reply of the respondent No.3 in the writ petition i.e. the Chief Engineer, PWD (R&B) submits that the technical evaluation annexed is only for Package-III and therefore, the document does not support the stand of the State appellants. By referring to the impugned Judgment and Order dated 19.06.2018, the learned senior counsel submits that the writ Court adjudicated the matter judiciously by directing the respondent authorities to compare the price bid of the petitioner in respect of Phase–I vis-a-vis the Private Party. Thereafter, upon such evaluation, if it was found that the petitioner’s bid was not found to be feasible compared to the bid of the Private Party, only then can the Private Party continue with the construction work. Therefore, under the facts and circumstances, interference of the impugned Judgment and Order passed by the writ Court is not called for and the appeals should accordingly be dismissed. 20. We have carefully considered the submissions advanced by the learned counsel for the rival parties and have also perused the materials available on record including the records produced by the learned Government Advocate for the State of Nagaland. 21. 20. We have carefully considered the submissions advanced by the learned counsel for the rival parties and have also perused the materials available on record including the records produced by the learned Government Advocate for the State of Nagaland. 21. From the case projected by the rival parties, the issue to be decided is as to whether the Technical Bid of the petitioner could have been rejected by the respondent authorities when the same was submitted/re-submitted on the scheduled date i.e. 06.04.2017. To answer this, we may peruse the Critical Data Sheet given in the NIB dated 21.02.2017. As per the Critical Data Sheet, the date and time for physical submission and bids security/POA etc. was fixed as 06.04.2017 at 1200 hrs. Clause 2.11.5 of the bid documents further provides that if the envelope submitted by the prospective bidder is not sealed and marked as instructed and prescribed, the authority concerned will have no responsibility for misplacement or pre-mature opening of the content of the bid so submitted. Clause 2.13 of the bid documents prescribes that e-procurement portal shall not allow submission of any bid after the prescribed date and time at clause 2.12. Physical receipt of the documents listed at Clause-2.11.2 of the RFP after the prescribed date and time at Clause 2.12 shall be summarily rejected. All these provisions provide for adherence to the time schedule by prospective bidders. Admittedly, the petitioner submitted his tender documents after the scheduled time prescribed for submission of the same on 06.04.2017 which apparently, was on account of one of the seals in the envelope being found to be tampered or half broken. When the same was re-submitted after rectification, it was not accepted. It is therefore a case of rejection of the bid documents on being presented beyond the stipulated time and not a case where the bid documents were accepted, examined and then rejected. 22. While considering the above issue, one aspect of the matter which we cannot ignore is that the petitioner, admittedly, on 06.04.2017 itself was aware of the rejection of its tender and if not, at least when 2 (two) communications were conveyed by the Chief Engineer, PWD (R&B) i.e. on 10.04.2017 and 24.04.2017. However, it was only on 21.06.2017 that WP(C) No.3916 of 2017 came to be filed i.e. after about 2½ months from the scheduled date for physical submission of tender documents i.e. 06.04.2017. However, it was only on 21.06.2017 that WP(C) No.3916 of 2017 came to be filed i.e. after about 2½ months from the scheduled date for physical submission of tender documents i.e. 06.04.2017. It is also seen that when the interim order dated 10.07.2017 was passed by the writ Court, the Financial Bids were already opened on 06.06.2017 in the presence of the constituted Evaluation Committee and representatives of the bidders. For whatever reasons, this fact, however was not brought to the notice of the writ Court which led to passing of the interim order. 23. The Critical Data Sheet in the NIB dated 21.02.2017, prescribed 29.04.2017 as the opening date of Financial Bid but however, the delay as explained by the learned senior counsels for the appellants was only on account of declaration of Model Code of Conduct by the Election Commission of India during the relevant time. The discrepancy in the Minutes of the meeting of the Evaluation Committee held on 06.04.2017 has also been explained by the learned counsel for the State appellant that it was only due to inadvertence that a complete set of the Minutes was not annexed to the affidavit-in-reply of the respondent No. 3 i.e. the Chief Engineer, PWD (R&B) in the writ petition. We have perused the records and found the submissions to be correct. 24. It is also an admitted position that a letter of acceptance was issued to the Private Party on 28.07.2017 to undertake the construction work in respect of Package-I and therefore going by the submission of the learned counsel for the appellant, it appears that substantial work had already been executed when the impugned Judgment and Order was being passed by the writ Court. 25. Coming to the authorities relied upon by Mr. C.T.Jamir, it may be seen that the Apex Court in the case of Tejas Construction & Infrastructure Private Ltd.(supra) held that in the absence of any malafide or arbitrariness in the process of the evaluation of the bids and determination of eligibility of bidders, the High Court was right in not interfering with the award of the contract. 26. In the case of Michigan Rubber(India)Ltd.(supra) the Apex Court held that 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. 26. In the case of Michigan Rubber(India)Ltd.(supra) the Apex Court held that 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. Therefore, a Court before interfering in the tender or contractual matters, in exercise of power of judicial review will have to ask itself whether the process adopted or decision made by the authority is malafide or intended to favour someone or whether, the process of adopting or decision made is so arbitrary and irrational that the Court can conclude that no responsible authority acting reasonably and in accordance with the relevant law would have raised and importantly, whether the public interest is affected. 27. In the case of Charulata Behera(supra), the Apex Court held that a writ jurisdiction under Article 226 of the Constitution of India should not be exercised on mere technicalities especially, if the result of such exercise will amount to the perpetuation of illegality. 28. In the instant case, it is not the case of the petitioner that there was any malafide on the part of the respondent authorities in not accepting its tender document. As may be noticed, the writ Court directed the authorities concerned to make a fresh evaluation after opening the price bid of the petitioner despite the late submission of the bid documents physically by the petitioner. In doing so, the writ Court has only overlooked the stipulation made in the NIB for submission of Technical Bids. It is a well settled position in law that in matters relating to tender or contract, the Court not having the expertise to minutely scrutinise the process cannot step in as an expert and enter into a domain otherwise meant for experts to decide whether the contesting party was illegally deprived of the contract. In our opinion, under no circumstances the financial bid of a tenderer, having regard to the clauses in the NIB, could have been directed to be opened unless the technical bid of that particular tenderer was found to be valid in all respects. As noticed earlier, the petitioner’s technical bid was not even evaluated the same having been submitted beyond the prescribed time and, therefore, for all intents and purposes, there was no bid of the petitioner. As noticed earlier, the petitioner’s technical bid was not even evaluated the same having been submitted beyond the prescribed time and, therefore, for all intents and purposes, there was no bid of the petitioner. Therefore, in our considered view, the writ Court by overlooking the stipulation in the NIB for submission of Technical Bid and directing the opening of the Financial Bid of the petitioner has committed an error. 29. Further, with regard to delay, as already noticed hereinabove, the petitioner approached this Court only on 21.06.2017 by filing WP(C) No. 3916 of 2017. The petitioner then filed the second writ petition i.e. WP(C) No. 1473 of 2018 on 05.03.2018. From the prayer of the petitioner in the writ petitions, it may be seen that the writ petitioner while seeking for a direction to the respondents to consider and declare its technical bid as responsive/valid has offered no explanation as to why the writ petition could not be filed soon after the non-acceptance of its Technical Bid. The petitioner filed the first writ petition only on 21.06.2017 after about two and a half months from the opening of the technical bids. Thereafter, the second writ petition was filed on 05.03.2018, after about eight months from the date of issuance of the letter of acceptance in favour of the private party. 30. While exercising jurisdiction under Article 226 of the Constitution of India, the Court will also have to consider as to whether the petitioner had approached the Court with expedition and without any delay. The question of delay has to be considered on the basis of the fact situation in a particular case and there cannot be a straight-jacket formula. In the attending facts and circumstances of the case, where the NIB was issued for construction of National Highway, the petitioner approaching the Court for ventilating its grievance that the technical bid was wrongly refused to be considered after a lapse of more than 2½ months of knowledge of such rejection cannot be justified. The petitioner ought to have acted with promptitude. By the time the first writ petition was moved, as it transpires, financial bids were already opened. The second writ petition challenging the Letter of acceptance (LoA) dated 28.07.2017 was filed long after 8(eight) months on 05.03.2018. The petitions therefore only suffer from gross delay. The petitioner ought to have acted with promptitude. By the time the first writ petition was moved, as it transpires, financial bids were already opened. The second writ petition challenging the Letter of acceptance (LoA) dated 28.07.2017 was filed long after 8(eight) months on 05.03.2018. The petitions therefore only suffer from gross delay. We thus find that the petitioner has failed to demonstrate vigilance in seeking an equitable remedy. 31. In view of the above discussion and considering the magnitude of the work and not to mention, the public interest involved, we are of the considered opinion that the impugned Judgment and Order passed by the writ Court cannot be sustained. 32. In the result, the impugned common Judgment and Order dated 19.06.2018 passed by the writ Court in WP(C) No. 3916 of 2017 and WP(C) No. 1473 of 2018 is found to be unsustainable and the same is hereby set aside. The writ appeals are accordingly allowed and disposed of. Any interim order/orders passed earlier shall stand merged with this judgment and order. 33. Under the given facts and circumstances, the parties are directed to bear their own cost.