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2020 DIGILAW 716 (GUJ)

Jay Corporation v. Karamsad Nagar Palika

2020-08-27

ILESH J.VORA, R.M.CHHAYA

body2020
ORDER : R.M. CHHAYA, J. 1. Heard Mr. N.L. Ramnani, learned advocate for the petitioner and Mr. Mehul Sharad Shah, learned advocate for the respondent – Karamsad Nagarpalika. 2. By way of this petition under Articles 14, 19(1)(g), 226 and 227 of the Constitution of India, the petitioner has prayed for following reliefs: “A. Your Lordships will be pleased to admit this petition: B. Your Lordships will be pleased to allow this petition by issuing a writ, of Mandamus or Certiorari or any other appropriate writ in the form of order of directions to the respondent no.1 Nagarpalika directing them to open all the bids which have qualified, including the bid of the petitioner, and after scrutiny of all the bids, L-1 bidder may be awarded the work order of work in question: C. Pending hearing and final disposal of the present petition, this Hon’ble Court may be pleased to stay further process of tender and awarding work order in connection with the work of Construction of Strom Water Drainage at various areas of Karamsad town, Karamsad dated 7.9.2019 invited vide NIT No.08-2019-20: 3. Following facts emerge from the record of the petition. 3.1. That the respondent no.1 Municipality invited E Tender for the work of Construction of Strom Water Drainage at various areas of Karamsad Town by a public notice. AS per the public notice, the tenders were to be submitted on-line on or before 16.09.2019. The petitioner is a registered partnership firm who claims to be “AA” Class Contractor submitted his E-Tender for the said work within the prescribed time limit. It is the case of the petitioner that the estimated cost of the tender was to of Rs.1,61,23,641.86 and non refundable tender fees was Rs.3600/-. It is the case of the petitioner that along with the tender, petitioner also deposited an amount of Rs.1,61,300/- as earnest money deposit. It is the case of the petitioner that the technical bid was opened on 19.09.2019. It is the further case of the petitioner that the petitioner had offered their bid at Rs.31.39 below the estimated cost of tender put by the respondent. It is further the case of the petitioner that pre-bid meeting was not to be convened even as per the notice inviting tender and petitioner was never communicated about the pre-bid meeting by the respondent Nagarpalika and therefore, there was no question of attending any pre-bid meeting. It is further the case of the petitioner that pre-bid meeting was not to be convened even as per the notice inviting tender and petitioner was never communicated about the pre-bid meeting by the respondent Nagarpalika and therefore, there was no question of attending any pre-bid meeting. 3.2. It is the case of the petitioner that petitioner was awaiting response from the respondent no.1 Nagarpalika, however bid of the petitioner was not opened at all and only three bids were opened by respondent no.1 Nagarpalika and those bids were of the respondent nos. 4, 5 and 7. It is further the case of the petitioner that bid of the petitioner as well as three other respondents were not opened and therefore, the petitioner approached the respondent no.1 Nagarpalika to know the reason behind non-opening of his bids and no reason was disclosed by the respondent no.1 –Nagarpalika. It is further the case of the petitioner that petitioner was shocked and surprise to know that his bid were not opened as he did not participate in the pre-bid meeting. The petitioner also contended that even though the petitioner was tried to know the details about the pre-bid meeting but officers of the respondent no.1 Nagarpalika did not give any reply or response to the requests made by the petitioner and according to the petitioner, the conduct of the officer of the respondent Nagarpalika was to avoid the petitioner. It is further the case of the petitioner that three bids which were opened by the respondent no.1- Nagarpalika are above the estimated cost put to the tender and according to the petitioner those tenders were not L1. It is contended by the petitioner that if remaining tenders were opened, work could have been awarded to the L1 and same would have save huge public money. It is alleged by the petitioner that the respondent no.1- Nagarpalika is acting in bias manner and against the public interest for the reasons best known to them. It is also contended by the petitioner that respondent no.1 is public body is expected to act in a fair and reasonable manner and not in an arbitrary manner. 3.3. It is alleged by the petitioner that the respondent no.1- Nagarpalika is acting in bias manner and against the public interest for the reasons best known to them. It is also contended by the petitioner that respondent no.1 is public body is expected to act in a fair and reasonable manner and not in an arbitrary manner. 3.3. It is also contended by the petitioner that respondent no.1 has not given anything in writing and therefore, the petitioner issued communication dated 25.09.2019 to the Regional Commissioner, Vadodara requesting them to open bid of the petitioner, however the said letter has not been replied. 3.4. It is the case of the petitioner that as the respondents have not acted in fair and reasonable manner and have not accepted the bonafide request of the petitioner of opening bid of the petitioner, the petitioner issued statutory notice on 4.10.2019 raising all his objections. It is further contended by the petitioner that respondent no.1 Nagarpalika is in process of issuing work order to Contractor of their choice who surrenders to their terms and conditions. It is alleged that such action of the respondent Nagarpalika is against the standard produced which is adopted in tender process and also the same is against the public interest and same shall have financial implications on the public exchequer. It is further contended by the petitioner that the petitioner is qualified and fulfilled all criteria and it the case of the petitioner that if the bid of the petitioner would have been opened, the petitioner would have merged as L1. It is further contended that there was no justifiable or bona fide reason for not opening bid of the petitioner and other contractors. It is also alleged that the respondent Nagarpalika cannot act in bias and arbitrary manner and cannot waste the public money by awarding tenders to the bidders whose tenders are more than the rates quoted by the L-1 Tender. It is further contended that if the same is allowed to be done, the purpose of inviting tenders publicly would get frustrated and genuine bidders like the petitioner would be thrown out of competition without there being any fault on their part. 3.5. It is also contended that the conduct of the respondent is not legal, proper and creates doubt about the corruption and mal-practice in awarding of tenders at the cost of public money. 3.5. It is also contended that the conduct of the respondent is not legal, proper and creates doubt about the corruption and mal-practice in awarding of tenders at the cost of public money. It is contended that such practice which encourages the corruption cannot be allowed to be promoted. 3.6. It is the contended by the petitioner that act of the respondent Nagarpalika is totally wrong and illegal and same has to be curtailed by this Court. It is also reiterated by the petitioner that there is no response from the respondent Nagarpalka to the correspondence issued by the petitioner and it is alleged that the respondent Nagarpalika is in process of moving ahead with the issuance of work order to the contractors of their choice. It is therefore, submitted that such irregularity and corruption which is done in process of awarding tenders should be stopped otherwise it would send wrong message to the public at large. It is contended that the action of the respondent- Nagarpalika is wrong, arbitrary, illegal, unjust, unfair and against the settled provisions of law and the same is passed without following the principle of natural justice, equity and fair play and therefore such action is required to be quashed and set aside by this Court. It is also contended by the petitioner that the petitioner or any other bidder who would be found lowest and whose bids are not opened by the respondent no.1 would suffer huge losses if their bids are not opened without there being any fault on their part and same would cause great injustice to the petitioner and other bidders whose bids are not opened by the respondent no.1- Nagarpalika. It is further contended that due to wrongful and illegal act of the respondent Nagarpalika, the fundamental right of the petitioner are breached by the respondent Nagarpalika and petitioner is made to suffer financially. It is also contended that the respondent Nagarpalika being a public body and controlled by the State Government cannot act in a manner contrary to the provisions of the Act and terms and conditions of the contract. On the aforesaid, it is therefore, contended that the Municipality be restrained from proceeding further in the process of issuing work order to any other bidder, without opening the bids of the remaining bidder. 4.0. On the aforesaid, it is therefore, contended that the Municipality be restrained from proceeding further in the process of issuing work order to any other bidder, without opening the bids of the remaining bidder. 4.0. In response to the notice issued by this Court, respondent no.1 has filed its affidavit in reply. It is contended by the respondent –Nagarpalika that the present petition is required to be dismissed on the ground of suppression of material facts and the documents have been intentionally suppressed by the petitioner in this petition and that the petitioner has not come with clean hands and therefore, the petition deserves to be dismissed. It is further contended that with respect to Municipality decided to invite offers through tender for the work of Construction of Strom Water drainage at various areas of city of Karamsad, for which, public notice was issued on 7.9.2019 which is annexed with the affidavit in reply (Annexure R.1 page 46). It is the case of the respondent Nagarpalika that public notice provides that with regard to said work, pre-bid meeting was scheduled on 13.09.2019 at 12.00 pm. It is further contended by the respondent Municipality that it was further specifically mentioned that all interested parties were to remain present and those who are absent in the pre-bid meeting will not be considered as qualified. It is further the case of the respondent Nagarpalika that as per the said public notice, a pre-bid meeting was arranged on 13.09.2019 wherein the petitioner chose not to remain present despite the clear and essential condition that those interested shall remain present. The respondent – Municipality also relies upon the minutes of the meeting held on 13.09.2019. 4.1. The respondent Municipality has contended that said pre-bid meeting show that the petitioner did not remain present in the said meeting and therefore, the petitioner was considered as unqualified and therefore, its bid was rejected at the preliminary stage. The respondent Municipality has specifically denied that the petitioner was never communicated that pre-bid meeting was to be held as from the said public notice, it is clear that attendance at the pre-bid meeting was an essential condition from the starting and therefore, petitioner cannot seek ignorance from public notice which lays out the terms and conditions in clear manner. The respondent Municipality has specifically denied that the petitioner was never communicated that pre-bid meeting was to be held as from the said public notice, it is clear that attendance at the pre-bid meeting was an essential condition from the starting and therefore, petitioner cannot seek ignorance from public notice which lays out the terms and conditions in clear manner. Denying the collusion between any bidder and respondent Nagarpalika, it is the case of the respondent Nagarpalika that the reasons mentioned herein above, bid of the petitioner has not been opened in accordance with condition mentioned in the public notice inviting tender. It is contended by the respondent Nagarpalika that tender procedure has been undertaken with the transparent and just manner and at the end of the said tender proceeding, price bid of the qualified bidders came to be opened. 4.2. The respondent Nagarpalika has also contended that price of one Satish Builders (respondent no.7) was found to be lowest and therefore, by letter dated 25.09.2019, Satish Builders were informed that their bid is accepted and thereafter they were invited to pay security deposit @ 2.5% i.e. Rs.4,03,100/- and the get the work order executed for the said work. It is the case of the respondent Nagarpalika that accordingly work order came to be executed in favour of respondent no.7- Satish Builders for the said work of Construction Strom Water Drainage in various areas of the city of Karamsad. It is the case of the respondent Nagarpalika that petition also requires to be dismissed on the ground of delay and laches as the period of execution of the work order was six month and same is over. 4.3. The respondent no.1 – Municipality has contended that in response to the letter written by the petitioner dated 9.10.2019, the respondent – Municipality gave reply to the petitioner vide letter dated 25.09.2019 and despite receiving the said letter, the petitioner has deliberately suppressed the said reply and has lied on oath that no any reply has been given by the respondent no.1. 4.4. It is further averred by the respondent no.1 that as condition of compulsory attendance at the pre-bid meeting in order to ensure that there is no bid rigging by one person under different names. The said bid was further included to ensure that bidders are truly interested to complete the work in the manner provided. 4.4. It is further averred by the respondent no.1 that as condition of compulsory attendance at the pre-bid meeting in order to ensure that there is no bid rigging by one person under different names. The said bid was further included to ensure that bidders are truly interested to complete the work in the manner provided. It is further the case of the respondent Nagarpalika that condition of attendance at pre-bid meeting was an essential condition of tender and petitioner has failed comply with the same, the respondent no.1 has rightly not opened the price bid of the petitioner as the same was not qualified. It is contended by the respondent no.1 that it is established principle of law that non compliance of the essential condition is the just ground to reject the bid and therefore, the action of the respondent no.1 Municipality is not arbitrary or discriminatory in disqualifying the petitioner bid. It is further case of the respondent no.1 that condition of pre-bid meeting was made known even prior to the upload of the tender details through the public notice and even despite clear knowledge, petitioner chose not to attend the said pre-bid meeting at its own peril. It is also contended that there is no case of mala fide on the part of the respondent no.1. It is also denied by the respondent no.1 that no any fundamental right of the petitioner is breached. It is also stated that no loss caused due to any act of the respondent – Municipality as bid of the petitioner was disqualified because of its own omission in attending pre-bid meeting. It is also contended by the respondent no.1 Municipality that the exact price bid of the petitioner was never opened and therefore, the allegation of loss of exchequer is also denied. It is specifically contended by the respondent no.1 that substantial portion of the work has already been completed and bills raised for the same are already paid and therefore, putting things back as it stood before the tender would be against the public interest and would result in the loss to the public exchequer and therefore, the petition deserves to be dismissed. The respondent no.1 had reiterated that petitioner has not complied with the essential condition of attendance at the pre-bid meeting as specified in the public notice and has further suppressed the same in the petition. The respondent no.1 had reiterated that petitioner has not complied with the essential condition of attendance at the pre-bid meeting as specified in the public notice and has further suppressed the same in the petition. It is reiterated that tender in question has been undertaken in the transparent, just and fair manner and in absence of any proof of mala fide, petition deserves to be dismissed with cost. The respondent Nagarpalika has further relied upon the public notice dated 7.9.20-19 published in the daily newspaper at Annexure R.2. The details of the tender, minutes of the meeting of pre-bid held on 13.09.2019 and other tender condition, letter dated 9.10.2019 written by the Chief Officer of respondent no.1Nagarpalika to the petitioner in reply to his letter dated 25.9.2019, another letter written by the Chief Officer of the respondent no.1 Nagarpalika along with the pre-bid meeting notice to the petitioner date 25.10.2019 in response to the letter dated 9.10.2019 written by the petitioner. 5. In response to the reply given by the respondent no.1, petitioner has filed rejoinder. The petitioner has denied the reply given by the respondent no.1 Nagarpliak and has reiterated the contention raised in the petition. In rejoinder, it is also contended that despite the fact that notice was issued by this Court, Municipality did not appear before this Court intentionally. It is also reiterated that online tender notice against column of pre-bid meeting, it is clearly mentioned no meeting and reiterating the contention raised in the and also contended that petition be entertained and allowed. 6. Learned advocate appearing for the petitioner as well as respondent no.1 Nagarpalika were heard on video conference and by order dated 21.8.2020 the learned advocates were asked to file written submission by 24.8.2020, which are taken on record. 7. Mr. N.L. Ramnani, learned advocate for the petitioner has raised following contentions: 7.1. Mr. N.L. Ramnani, learned advocate for the petitioner in his written submitted filed on 24.08.2020 while reiterating the contentions raised in the petition has contended that right from the beginning respondent no.1 has acted arbitrary and mala file as the respondent no.1 Municipality always wanted to favour the contractor of their choice. Mr. N.L. Ramnani, learned advocate for the petitioner in his written submitted filed on 24.08.2020 while reiterating the contentions raised in the petition has contended that right from the beginning respondent no.1 has acted arbitrary and mala file as the respondent no.1 Municipality always wanted to favour the contractor of their choice. It is further contended that the notice was issued in a newspaper having circulation in Kheda/ Nadiad District only though in online notice there is no mention of pre-bid meeting and against the said column it is mentioned no meeting. Referring to the Rojkam of the pre-bid meeting, it is submitted by Mr. Ramnanithat only four bidders all from Kapadvanj were remained present in the pre-bid meeting as the notice was intentionally published in the said area only so that other bidders are kept in dark. It is also further contended that though not as such contended in the petition that in the pre-bid meeting nothing important was discussed or decided and it was merely a formality which was performed to throw the other bidders from the zone of consideration. It is also contended that it has nothing to do with the qualifying criteria of the bidders as it is not going to affect the capability of the contractor in any manner whatsoever. It is therefore, contended that the respondent no.1 Municipality cannot adopt such a highly technical approach even if attending the pre-bid meeting was required to be attended by the bidders. It is also reiterated in the written argument that in order to overcome the allegation leveled in the petition and in order to justify the wrong, illegal and arbitrary acts, the respondent no.1 preferred not to appear before this Court. Mr. Ramnani, learned advocate for the petitioner has further relied upon the following judgments: (1). Sterling Computers v/s. M& S& Allied reported in (1993) 1 SCC 445 . (2). New Horizon Ltd vs. Union of India reported in (1995) 1 SCC 478 . (3). Monarch Infra vs. Ulhasnagar N Palika & Ors reported in (2005) 5 SCC 287. (4). Roots Industries vs. Airport Authority reported in (2016) 3 SCC 569 . (5). Rakesh Construction vs. AUDA & Ors rendered in SCA No.19313 of 2017. (6). Poddar Corporation vs. M/s. Ganesh Engineering reported in AIR 1991 SC 1579 . 7.2. It is also submitted by Mr. (4). Roots Industries vs. Airport Authority reported in (2016) 3 SCC 569 . (5). Rakesh Construction vs. AUDA & Ors rendered in SCA No.19313 of 2017. (6). Poddar Corporation vs. M/s. Ganesh Engineering reported in AIR 1991 SC 1579 . 7.2. It is also submitted by Mr. Ramnani, learned advocate for the petitioner that respondent no.1 Municipality being public body cannot act in such arbitrary and highhanded manner and since the high amount of public money is involved which is wasted due to such action of the respondent no.1. It is also alleged that the respondent no.1 is acted mala fide to throw the petitioner’s bid out of zone consideration with a view to extend undue favour to the respondent no.7 for the reasons best known to them. It is also alleged that the respondent no.1 Municipality has wasted huge amount of Rs.54,99,774.24 which could have been easily saved. It is also alleged that the respondent nos.1 and 7 have acted hand in gloves. It is also contended that such action cannot be approved merely because work order is already issued to the respondent no.7 and he has started the work. It is further contended that as per the petitioner instructions the work is not yet competed and pipes are lying at the site and the same are not laid down by the respondent no.7. Reiterating the other contentions, it is contended that petition deserves consideration and prayers prayed for may be granted. 8. Mr. Mehul Sharad Shah, learned advocate for the respondent no.1 – Nagarpalika has raised following contentions: 8.1. Similarly, Mr. Shah, learned advocate for the respondent no.1- Municipality has reiterated the contentions raised in the affidavit in reply and has contended that attendance at the pre bid meeting was an essential condition from the beginning and therefore, petitioner cannot seek ignorance from public notice which lays out the terms and conditions in clear manner. It is also contended that the condition of prebid meeting was made known even prior to the upload of the tender details through the public notice and despite clear knowledge, petitioner chose not to attend the said pre-bid meeting at its own peril. Mr. Shah has also contended that there is no mala fide on the part of the respondent no.1. Mr. Shah has also contended that there is no mala fide on the part of the respondent no.1. It is also contended that no fundamental right of the petitioner is breached and any loss is caused due to any act of the respondent no.1 Municipality as bid of petitioner was disqualified because of its own omission in attending pre-bid meeting. It is also contended that there is no loss to exchequer has been caused as petitioner’s bid was rejected as it was not qualified. Mr. Shah further contended that work has been almost completed and all the bills raised for the same are already paid and therefore, putting things beck as it stood before the tender would be against the public interest and would result in the loss to public exchequer. It is further contended that tender proceedings have been undertaken in transparent, just and fair manner and in absence of any proof of mala fide, petition deserves to be dismissed. 9. No other and further submissions, grounds and contentions raised by the learned advocates for the respective parties. 10. Before reverting to the submissions made by the learned advocates for the concerned parties, it would be appropriate to note that E Tender for work of Construction of Strom Water Drainage at various areas of Karamsad Town was invited by the respondent no.1 –Municipality by issuing a public notice which reads as Tender IFB/Tender Notice No.08/2019-20 and the last date and time for receipt of notice was 16.09.2019. The same was followed by public notice dated 7.9.2019. The Tender document placed on record by the petitioner as well as respondent no.1 Municipality clearly shows that the bid document downloading has to start on 7.9.2019 from 10:16;52 onward. A public notice came to be published by the respondent no.1 Municipality which clearly stipulates the condition that pre-bid meeting shall be held on 13.09.2019 at 12 hours at the office of the respondent no.1 Municipality and also giving other schedule of the tender process. It is inter alia made public in the said notice that every bidder shall have to remain present in the pre-bid meeting and bidder who remains absent shall not be considered as qualifying and the Municipality will have a right to cancel such bids. It is inter alia made public in the said notice that every bidder shall have to remain present in the pre-bid meeting and bidder who remains absent shall not be considered as qualifying and the Municipality will have a right to cancel such bids. It is an admitted position that the petitioner did not remain present in the pre- bid meeting and therefore, stood disqualified as per the condition of the tender. It is also evident from the record that as per the original tender notice no pre-bid meeting was to be held. It clearly appears that before the tender notice was uploaded and before the download of bid document start, on the same day in the newspaper, the notice for pre-bid has been given. The contention raised by Mr. Ramnani, learned advocate for the petitioner that the same was not known to the petitioner and therefore, it preferred not to attend the pre-bid meeting is contrary to the notice published in the daily newspaper. The petitioner has specifically contended in the petition that communication dated 25.09.2019 addressed by the petitioner is neither replied nor the same is complied with, is incorrect. The respondent no.1 – Chief Officer of the Municipality did reply to letter dated 25.09.2019 on 9.10.2019 and public notice published was also annexed with the said reply. 11. The record indicates that the petitioner has not produced either the reply dated 9.10.2019 and the copy of the notice annexed thereto. Though, in the rejoinder, the petitioner has tried to canvas that the said letters were not received, is not believable. Upon considering the procedure adopted, it cannot be said that condition of attendance of pre-bid meeting which was notified by separate public notice can be said to be non essential condition. That the providing of Strom Water Drainage at various areas of Karamsad Town was an important project to be completed within stipulated time and such projects are always need of local authority. The allegation of mala fide and arbitrariness are without any factual basis and from the procedure followed by the Municipality, the same cannot be construed that there was any arbitrariness or discrimination in disqualification of the petitioner bid. Even the contention that there is loss to the public exchequer is without any basis. The allegation of mala fide and arbitrariness are without any factual basis and from the procedure followed by the Municipality, the same cannot be construed that there was any arbitrariness or discrimination in disqualification of the petitioner bid. Even the contention that there is loss to the public exchequer is without any basis. If a person is disqualified because of not compliance of essential condition, it cannot be said that the same has resulted into loss to public exchequer. The condition of attending pre-bid meeting came to be stipulated before the tender document was uploaded and as the petitioner has not adhered to the same, which was made public by a public notice even in a newspaper, now cannot be permitted to allege that there is arbitrariness, discrimination or mala fide that too without any basis or proof thereof. 12. The record further indicates that four bidders did attend the pre-bid meeting and L1 has been awarded the contract. As pointed out by the learned advocate for the respondent no.1-Municipality that the tender work was for stipulated period and it is declared before this Court that it is almost completed and bills have been raised and same are already paid. In facts of this case, this Court finds that even in the limited jurisdiction of judicial review by this Court, no interference is called for and any interference after work is completed and bills have been paid, is on the contrary against the public interest. 13. The condition of attending pre-bid meeting as prescribed in the public notice before the tender document was uploaded and was permitted to be downloaded, cannot be said to be arbitrary or mala fide. The petitioner did not attend the pre-bid meeting and as the petitioner did not comply with the condition which also inter alia provided that attendance in such pre-bid meeting is mandatory and action would render the offer invalid, cannot be said to be highly technical approach taken by the respondent no.1 Municipality and therefore, the ratio laid down by the Hon’ble Apex Court in the case of Podar Corporation (supra) will not be applicable to the case on hand. This Court is conscious of the fact that this Court has power of judicial review even in contract matters, however, in facts of this case, when condition to attend the pre-bid meeting being mandatory, which even in opinion of this Court was an essential condition and as the petitioner has not attended the same, having incurred disqualification because of non compliance of such mandatory condition, cannot now be permitted that too after majority of the tender work is already executed by the successful bidder and therefore, scope of judicial review is very narrow and in facts of this case, no such interference is called for. The respondent no.1–Municipality has acted in accordance with law and has adhered to the conditions which were prescribed before even the downloading of the tender document and therefore, the decisions relied upon by the learned advocate for the petitioner on the aspect of judicial review in the case of Sterling Computers (supra), New Horizon Ltd (supra) and Monarch Infrastructure (supra) will not applicable to the facts of the case on hand. Now majority part of the work is completed, though an attempt has been made that pipes are lying on the road, does not take case of the petitioner any further and hence, judgments relied upon by the petitioner are not applicable to the facts of the present case. 14. In view of the above and for the reasons stated above, present petition fails and deserves to be dismissed and is accordingly dismissed.