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Himachal Pradesh High Court · body

2018 DIGILAW 602 (HP)

Ajay Rathore v. Chairman Himachal Pradesh State Agricultural Marketing Board

2018-04-10

AJAY MOHAN GOEL, SANJAY KAROL

body2018
JUDGMENT Ajay Mohan Goel, J —By way of this petition, the petitioner has prayed for the following reliefs: "a. Call for the records pertaining to the case; b. Quash office order dated 5.8.2017 (Annexure P-6) vide which the online tenders for works detailed in S. No. 9 invited vide eProcurement Tender Notice Invitation for Bids (IFB) published online on 09.12.2016 i.e., were unilaterally, arbitrarily and illegally cancelled and consequently quash e-Procurement Tender Notice Invitation for Bids (IFB) published online on 8.8.2017 (Annexure P-7) vide which online bids on item rate in electronic tendering system have been again invited by changing the nature and scope of the work in question so as to make only Class A contractors eligible for the works; c. Direct the respondents to award the tender for the work in question to the petitioner being L-1; d. Any other relief as may be deemed just and proper keeping in view the facts and circumstances of the case may also be granted in favour of the petitioner and against the respondents." 2. According to the petitioner, who is a Class-B contractor for buildings and roads with Public Works Department, respondent No. 3 published an e-Procurement Tender Notice inviting bids on 09.12.2016 on behalf of respondent No. 1 on item rates from eligible and approved contractors/firms registered with HPPWD, CPWD and HIMUDA etc. Bids were invited for 22 works mentioned in the invitation for bids (IFB) (Annexure P-1) . Key dates of the said tender were as under: 1 Date of online publication 9.12.2016 18:00 HRS 2 Document Download Start and End Date 9.12.2016 18:00 HRS upto 24.12.2016 18:00 HRS 3 Bid Submission Start and End Date 9.12.2016 18:00 HRS upto 24.12.2016 18:00 HRS 4 Physical Submission of EMD, Cost of Tender Document and other technical documents 26.12.2016 11:00 HRS 5 Date of Technical Bid opening, Evaluation of Technical Bid followed by Opening of Financial Bid 26.12.2016 11:30 HRS 3. As per the petitioner, he being eligible for the works detailed in Sr. No. 9 of the above tender notice, submitted his bid in online mode for the following work: Sr. No. Name of work Estimated cost EMD Cost of tender Time period Class 9. C/o Fruit & Vegetable sub market yard at Antravalli, (Nerwa) , Distt. Shimla, H.P. SH:- C/o Auction yard Rs.1, 54, 12, 261/- Rs.1, 86, 7002/- Rs.5, 000/- Six months Class B 4. No. Name of work Estimated cost EMD Cost of tender Time period Class 9. C/o Fruit & Vegetable sub market yard at Antravalli, (Nerwa) , Distt. Shimla, H.P. SH:- C/o Auction yard Rs.1, 54, 12, 261/- Rs.1, 86, 7002/- Rs.5, 000/- Six months Class B 4. As per the petitioner, technical bids with respect to the aforesaid work were opened and evaluated on 26.12.2016 in the office of respondent No. 3. His bid was declared valid and the same was admitted and accepted by the tender committee of the respondents. Thereafter, financial bids were opened on the same day and the bid of the petitioner was found to be the lowest. According to the petitioner, despite his being L-1, the award letter was not being issued despite lapse of substantial time. He made inquiries in this regard, but nothing satisfactory came out. In these circumstances, he addressed communication dated 09.06.2017 to respondent No. 3 for allotting the work to him at the earliest so that he may be able to complete the same within specified time. He also gave an undertaking that he shall not claim anything under Clause 10 CC in case the work was awarded to him. 5. Grievance of the petitioner is that rather than the respondents responding to the said communication, they unilaterally and illegally cancelled the tender in issue on some administrative reason vide office order, dated 05.08.2017. This was followed by publication of e- Procurement Tender Notice on 08.08.2017, vide which, again online bids were invited on rate item vide Annexure P-6. Key dates of the said tender were as under: 1 Date of online publication 08.08.2017 18:00 HRS 2 Document Download Start and End Date 08.08.2017 18:00 HRS upto 29.08.2017 18:00 HRS 3 Bid Submission Start and End Date 08.08.2017 18:00 HRS upto 29.08.2017 18:00 HRS 4 Physical Submission of EMD, Cost of Tender Document 30.08.2016 upto 17:00 HRS 5 Date of Technical Bid opening, Evaluation of Technical Bid 31.08.2017 11:30 HRS 6 Date of Financial Bid Opening 04.09.2017 11:00 HRS The work for which the petitioner was found as L-1 now figured at Sr. No. 1 of the said e-Procurement Tender Notice. 6. No. 1 of the said e-Procurement Tender Notice. 6. Feeling aggrieved, the petitioner filed the present petition, inter alia, on the ground that the act of the respondents of cancelling the tender and then re-inviting the same is arbitrary, unreasonable and illegal, as earlier, contractors having B Class enlistment were eligible to bid with respect to the work in question, but vide later tender notice, only A-Class candidates were allowed to bid. Further, as per the petitioner, the impugned act of the respondents was otherwise also bad as they had failed to spell out as to what was the administrative reason, which prompted them to cancel the tender in question. It is also the case of the petitioner that the rates quoted by him stood disclosed to all the bidders and this has gravely prejudiced him as he was not granted the contract on the basis of his earlier bid. 7. Reply to the petition stands filed and as per the respondents, there was no illegality in the act of cancelling the initial tender, as the same was done due to certain administrative problems. It stands mentioned in reply that Clause 9 of the invitation for bid clearly contemplated that the respondents had the right to reject one or all the tenders and even otherwise cancellation of tender could not be questioned before the issuance of award letter in terms of Clause 9 . It is also mentioned in the reply that the tender was not awarded in favour of the petitioner at the relevant time, as the site was not developed and there was no bid for site development work. Thus, as per the respondents, earlier tender was cancelled due to enhancement of amount, which led to the issuance of fresh tender. 8. In order to clarify certain facts as were narrated in the rejoinder, a supplementary affidavit was filed by the Executive Engineer, Himachal Pradesh State Agricultural Marketing Board, dated 27th December, 2017, relevant portion of which is quoted hereinbelow: "1. That this Hon''ble Court was pleased to pass following orders dated 7.12.2017: "..................Let supplementary affidavit be filed by the respondents clarifying the factual position raised by the petitioner in his rejoinder. Needful be positively done within a period of one week. List on 28th December, 2017." 2. That this Hon''ble Court was pleased to pass following orders dated 7.12.2017: "..................Let supplementary affidavit be filed by the respondents clarifying the factual position raised by the petitioner in his rejoinder. Needful be positively done within a period of one week. List on 28th December, 2017." 2. That in due compliance to aforesaid orders the deponent humbly submits that the tender notice for the construction of fruit and vegetable sub-market yard at Antravali (Nerwa) , District Shimla, SH: C/O Auction Yard as per Annexure P-1 at Sr. No. 9 and the tender notice for cutting work vide Annexure P-7 (Colly) were called separately. It is further submitted that the tenders vide Ann. P-1 at Sr. No. 9 were called on 9.12.2016 by the predecessor of the deponent. The bids so received, were to be opened on 26.12.2016. It is further submitted that it reveals from the record that said tender was floated without knowing the factual site conditions. The site development work and construction of retaining wall were to be carried out before construction of proposed auction yard being condition precedent. Necessary approval for framing the revised estimates and reinventing the tenders afresh were also obtained from the competent authority on 13.6.2017. In sequel to this, revised estimates were prepared and technical approval from the competent authority i.e. Chief Engineer, South Zone, HP PWD Shimla was also obtained vide T/S orders dated 26.7.2017. Copy is annexed as Annexure R/1. Thereafter the said tender Annexure P/1 was cancelled vide office order dated 5.8.2017 as per Annexure P-5. Son in the peculiar situation at site as explained above the separate tenders for site development was called vide Ann. P-7 (Colly) . Following to above the tenders for construction of Action Yard and shops were called separately vide Ann. P-6 at Sr. No. 1." 9. We have heard the learned counsel for the parties and have also gone through the records of the case. 10. It is not in dispute that the petitioner was found to be L-1 qua his bid which he had made in response to Invitation for Bids dated 09.12.2016. It is also not in dispute that Clause 9 of the said Invitation for Bids clearly stipulates that the bid inviting party reserved the right to reject one or all the tenders without assigning any reason whatsoever in the interest of the Board. 11. It is also not in dispute that Clause 9 of the said Invitation for Bids clearly stipulates that the bid inviting party reserved the right to reject one or all the tenders without assigning any reason whatsoever in the interest of the Board. 11. Undisputedly, the earlier tender was cancelled due to administrative reason vide office order dated 05.08.2017. Thereafter, fresh invitation for bid was published, which stands assailed alongwith office order dated 05.08.2017 by way of this petition. The moot issue which this Court has to determine is as to whether the cancellation of the earlier tender was a bonafide act on behalf of the respondents or was it an arbitrary and illegal act? 12. It is a matter of record that pursuant to the earlier tender, though the bid of the petitioner was found to be lowest for the work in question, however, his bid was not finally accepted by the Board as no award letter was issued in his favour. Meaning thereby, there was no concluded contract as between the petitioner and the respondentBoard. 13. Taking into consideration Clause 9 of the earlier tender, it cannot be said that the respondents had no authority to cancel the tender. It has been mentioned in the reply by the respondents that the tender had to be cancelled on account of administrative reasons, as site development work and construction of retaining wall were to be carried out before construction of auction yard could be carried out, which in fact was a condition precedent. It is also evident from the supplementary affidavit filed on behalf of respondent No. 3 that necessary approval for framing the revised estimates and re-inventing the tenders afresh was also obtained from the competent authority on 13.06.2017. Now, incidentally the approval which was so given by the competent authority in this regard has not been challenged by the petitioner. Be that as it may, though there are allegations of arbitrariness and malafide qua the act of the respondents of cancelling the tender, however, there is no material placed on record by the petitioner to substantiate these allegations. Now, incidentally the approval which was so given by the competent authority in this regard has not been challenged by the petitioner. Be that as it may, though there are allegations of arbitrariness and malafide qua the act of the respondents of cancelling the tender, however, there is no material placed on record by the petitioner to substantiate these allegations. During the course of arguments, learned counsel for the petitioner has alleged malafides but when a query was put by the Court that malafides were alleged against whom, as neither in the petition malafides were spelled out nor any person against whom malafides were so alleged stood arrayed as a respondent, no satisfactory reply could be given by the petitioner. Learned counsel for the petitioner also could not substantiate from the pleadings that the act of cancellation of the earlier tender was either an act of colourable exercise of power or the same was done with an ulterior motive of causing any loss to the petitioner or to confer any undue gain to any other party. 14. The above in our considered view demonstrates that the act of the respondents of cancelling the first tender and thereafter reinviting new tender is a bonafide act, which has been taken in the interest of the Board and the same is neither an illegal nor a motivated act. We also do not find any force in the contention of the learned counsel for the petitioner that in the later tender, purposely Class-B contractors have been ousted, because it is not the case of the petitioner that exactly for the same work for which earlier Class-B contractors were considered, now said contractors have been rendered ineligible. 15. Even otherwise, it is settled law that in such like matters, while exercising the power of judicial review, this Court does not sit as an Appellate Court over the decision of the Government, but it merely reviews the decision which has been made. 16. It has been held by the Hon''ble Supreme Court in State of Jharkhand and others Vs. Cwe Soma Consortium , (2016) 14 SCC 172 , that decision of the State issuing tender notice to cancel the tender and invite fresh tenders cannot be interfered with by the High Court unless found to be malafide or arbitrary. 16. It has been held by the Hon''ble Supreme Court in State of Jharkhand and others Vs. Cwe Soma Consortium , (2016) 14 SCC 172 , that decision of the State issuing tender notice to cancel the tender and invite fresh tenders cannot be interfered with by the High Court unless found to be malafide or arbitrary. Hon''ble Court further held that while exercising the power of judicial review in the matter of Government contracts, the primary concern of the Court is to see whether there is any infirmity in the decision making process or whether it is vitiated by malafides, unreasonableness or arbitrariness. 17. Hon''Ble Supreme Court in Maa Binda Express Carrier and another Vs. North East Frontier Railway and others , (2014) 3 SCC 760 , has held: "8. The scope of judicial review in matters relating to award of contract by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well-settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor made to benefit any particular tenderer or class of tenderers. So also the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process. 9. So also the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process. 9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the Court who is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest. (See: Meerut Development Authority v. Association of Management Studies and Anr. etc. , (2009) 6 SCC 171 and Air India Ltd. v. Cochin International Airport Ltd. , (2000) 1 SCR 505 ) . 10. The scope of judicial review in contractual matters was further examined by this Court in Tata Cellular v. Union of India , (1994) 6 SCC 651 , Raunaq International Ltd.''s case and in Jagdish Mandal v. State of Orissa and Ors. , (2007) 14 SCC 517 , besides several other decisions to which we need not refer." 18. Therefore, in view of the discussion held above, as also the law cited above, as we do not find any merit in the present petition, the same is accordingly dismissed. Miscellaneous applications, if any, also stand disposed of.