TTC Infra India v. K. C. Angami and Sons Consortium
2021-06-23
S.HUKATO SWU, SONGKHUPCHUNG SERTO
body2021
DigiLaw.ai
ORDER : 1. Heard Mr. A. Zhimomi, learned counsel appearing for the appellant assisted by Ms. Lhousino, learned counsel. We have also heard Mr. Kekhriengulie, learned Addl. Advocate General appearing for the State respondents and Mr. R. Iralu, learned Sr. counsel appearing for the private respondent No. 1 assisted by Mr. L. Iralu, learned counsel. 2. This is a writ appeal directed against the judgment and order dated 05.03.2021 passed in W.P. (C) No. 97/2020. 3. The State of Nagaland floated an NIT bearing No. CE/NH/NG/2019-2020 wherein bids were invited for strengthening of the NH 61 (New NH 2) from zero Km to 6 Km, which was to have been carried out between 2019-2020, under National Highway Division No. 1 Kohima, on EEC mode with fund provided by the Ministry of Road Transport and Highway, Government of India. In the NIT, processing fee was given as Rs. 10,000/-. The appellant along with 3(three) others submitted their bids. The Committee found the bids of 3(three) out of the 4(four) including that of the appellant and the respondent No. 1 (the writ petitioner) responsive in the technical bid. Thereafter, the Committee examined the financial bids of the 3(three) bidders and, the bid of the appellant herein was found to be the lowest and that of the respondent No. 1 (the writ petitioner) as the second lowest. Therefore, they selected the appellant for awarding the contract work. Being aggrieved by the decision of the Committee the respondent No. 1 (the writ petitioner) filed W.P. (C) 97/2020 challenging the decision of the Committee mainly on the ground that, the decision making process of the Committee was vitiated because the appellant who had not even submitted his processing fee was selected. The writ petition was disposed of vide judgment and order dated 05.03.2021 wherein the minutes of the bid evaluation committee as far as it concerns with the recommendation of the appellant for allotment of the work mentioned above is concerned was quashed and set aside and, consequent thereto the technical bid and the financial bid of the appellant were also quashed and set aside and a direction was issued to consider the bid of the respondent No. 1 (the writ petitioner). Being aggrieved by the said judgment and order, the appellant is before this Court on appeal. 4. Mr.
Being aggrieved by the said judgment and order, the appellant is before this Court on appeal. 4. Mr. A. Zhimomi, learned counsel for the appellant submitted that process fee was never a part of the RFP (request for proposal) framed by the Ministry of Road Transport and Highways but it was a condition added by the State Government. The leaned counsel further submitted that the payment of the process fee was not one of the pre conditions or a condition precedent for accepting bids of the contesting contractors as per the NIT and, even if it is assumed to be one, at best, it would be subsidiary or ancillary which can be waived or relaxed by the authorities. Therefore, non submission of the process fee of Rs. 10,000/- by a demand draft by the appellant at the time of submission of his bids would not disqualify him. The learned counsel also submitted that the NIT did not mention anywhere that the payment of process fee is a pre condition or a condition precedent for eligibility and it also did not mention as to when the same should be deposited, therefore, it can be deposited at any time before the issuance of LOA. In support of his submission, the learned counsel referred to the judgment of the Hon’ble Supreme Court passed in the case of Poddar Steel Corporation vs. Ganesh Engineering Works and Others, (1991) 3 SCC 273 . The relevant paragraph- 6 to 8 are reproduced herein-below: “6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India not of the State Bank clause 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-compliance deprived the Diesel Locomotive Words of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition.
The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in C.J. Fernandez vs. State of Karnataka, 1990 (2) SCC 488 , a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty vs. International Airport Authority of India, 1979 (3) SCC 489 , but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses, the present case belongs. 7. The nature of payment by a certified cheque was considered by this Court in Sita Ram Jhunjhunwala vs. Bombay Bullion Association Ltd. 1965 (35) CC 526 : AIR 1965 SC 1628 . Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision (vide Spargo case [In Re: Harmony and Montague Tin and Copper Mining Co.
Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision (vide Spargo case [In Re: Harmony and Montague Tin and Copper Mining Co. (1873) 8 Ch A 407] that it is a general rule of law that in every case where a transaction resolves itself into paying money by A to B and then handing it back again by B to A, if the parties meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards. This Court applied the observations to transaction requiring payment by one to another. The High Court's decisions in B.D. Yadav Case 1984 AIR (Bom) 351 and T.V. Subhadra Amma Case 1982 AIR (Ker) 81 : 1981 Ker LT 444 are also illustrations where literal compliance of every term of the tender notice was not insisted upon. 8. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank. In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 8, specially when it was in its interest not to reject the said bid which was the highest. We, therefore, set aside the impugned judgment and dismiss the writ petition of respondent No. 1 filed before the High Court. The appeal is accordingly allowed with costs throughout.” 5. Mr. Zhimomi submitted further that due to the pandemic the bids were submitted through online, therefore, the demand draft in original could never have been submitted at the time of submission of bids. The only option for the bidders in that circumstances would have been to submit scanned copy or photocopy of the same which would not, in any case, served any purpose as the value of it could not have been enchased or transferred to the account of the authority authorized to receive the same.
The only option for the bidders in that circumstances would have been to submit scanned copy or photocopy of the same which would not, in any case, served any purpose as the value of it could not have been enchased or transferred to the account of the authority authorized to receive the same. Therefore, submission of the demand draft at any time before the LOA is issued would serve the purpose and would not in anyway vitiate the process. Mr. Zhimomi, thereafter, submitted also that in matters of contract, court’s under their power of judicial review, examines only; as to whether the decision making process was reasonable or not or irrational and arbitrary or not and, whether or not violative of Article 14 of the Constitution of India so as to ensure that the decision was made lawfully and the choice made was based on reasons that are sound. The ld counsel, went on and submitted also that, if the decision is found to be bona-fide and in public interest, even if procedural aberration or error in assessment or prejudice to a tenderer is made out, courts normally do not interfere. Mr. Zhimomi, then, submitted that in this case, though the appellant submitted the demand draft only at the time of submission of the original documents he did not violate any of the terms and conditions of the NIT and nobody’s right under Article 14 of the Constitution of India was violated, and there was also no element of unreasonableness, irrationality or arbitrariness in the decision making process. Therefore, interference under the power of judicial review was not called for at all. In support of his submission, Mr. Zhimomi referred to the judgment of the Hon’ble Supreme Court passed in the case of Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517 . The relevant paragraph 21.1 and 22 are reproduced herein-below: “21.1 In Sterling Computers Ltd vs. M&N Publications Ltd. 1993 (1) SCC 445 , this Court observed: “18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process the courts can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.” 21.2.
While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process the courts can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.” 21.2. In Tata Cellular vs. Union of India, AIR 1996 SC 11 , this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus: “(1) The modern trend points to judicial restraint in administrative action. (2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative action. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair-play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facets pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala-fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” (Emphasis in original) This Court also noted that there are inherent limitations in the exercise of power of judicial review of contractual powers. This Court also observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14. 21.3.
This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14. 21.3. In Raunaq International Ltd. vs. I.V.R. Construction Ltd. 1999 (1) SCC 492 , this Court dealt with the matter in some detail. This Court held: “9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be: (1) The price at which the other side is willing to do the work. (2) Whether the goods or services offered are of the requisite specifications. (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important. (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality. (5) past experience of the tenderer and whether he has successfully completed similar work earlier. (6) time which will be taken to deliver the goods or services. (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction. 10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract. (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities.
10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract. (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work - thus involving larger outlays or public money and delaying the availability of services, facilities or goods, e.g. A delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. 11. When a writ petition is filed in the High court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer, should not intervene under Article 226 in disputes between two. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala-fide, the court rival tenderers.” 21.4. In Air India Ltd. vs. Cochin International Airport Ltd. 2000 (2) SCC 617 , this Court summarized the scope of interference as enunciated in several earlier decisions thus: “7.
Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala-fide, the court rival tenderers.” 21.4. In Air India Ltd. vs. Cochin International Airport Ltd. 2000 (2) SCC 617 , this Court summarized the scope of interference as enunciated in several earlier decisions thus: “7. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala-fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.” (Emphasis supplied) 21.5. In Association of Registration Plates vs. Union of India, 2005 (1) SCC 679 , this Court held: “..Article 14 of the Constitution prohibits government from arbitrarily choosing a contractor at its will and pleasure.
Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.” (Emphasis supplied) 21.5. In Association of Registration Plates vs. Union of India, 2005 (1) SCC 679 , this Court held: “..Article 14 of the Constitution prohibits government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contracts. At the same time, no person can claim a fundamental right to carry in business with the government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest....” 21.6. In B.S.N. Joshi vs. Nair Coal Services Ltd. 2006 (11) SCALE 526 , this Court observed: “56. It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefor; the same ordinarily being within its domain, court's interference in such matter should be minimal. The High Court's jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record.” 22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala-fides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is sound. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court.
The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala-fide or intended to favour someone. OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.” (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” 6. Lastly, Mr. Zhimomi submitted that though the respondent No. 1 (the writ petitioner) was fully aware of the fact that the NIT did not specifically mention or indicate submission of process fee as a condition precedent for accepting bids and the fact that the appellant did not submit the process fee at the time of submitting his bid papers, he kept quite and participated in the bidding process but, only when he came to know that his bid is second lowest he came to the Court and challenge the selection of the appellant. This is not permissible under the settled principle of law and it is too late in the day for him to do so.
This is not permissible under the settled principle of law and it is too late in the day for him to do so. In support of his submission, the learned counsel referred to the judgment of the Hon’ble Supreme Court passed in the case of Consortium of Titagarh Firema Adler S.P.A vs. Titagarh Wagons Ltd. (2017) 7 SCC 486 . The relevant paragraph 3, 4 and 38 are reproduced herein-below: “3. It was contended by the appellant herein before the High Court that Clause 26 of the tender document prevented a person from getting any information about the technical qualification of the competitor, till the contract is awarded, which is arbitrary, unreasonable and violative of Article 14 of the Constitution; that the respondent No. 2 is not having the requisite experience as required under the NIT, for it does not meet the eligibility criteria on its own, but was relying on the experience of its subsidiary. 4. The Division Bench rejected the contention to go into the legality or otherwise of clause 26 observing that the appellant had participated in the tender bid knowing very well that such a clause existed and it was not open to it to contend that the said clause is onerous and lacks transparency and, therefore, violative of Article 14 of the Constitution; and it had challenged the same only after it is found that its financial bid was higher than that of respondent No. 2. It further observed that the matter would have been different had the appellant, immediately after the tender notice was published, challenged the said condition after NIT was issued. The High Court placing reliance upon the decisions in New Horizons Ltd. vs. Union of India, (1995) 1 SCC 478 , Tata Cellular vs. Union of India, (1994) 6 SCC 651 , Central Coalfields Ltd. vs. SLL-SML (Joint Venture Consortium), 2016 (4) R.C.R. (Civil) 919 : 2016 (8) SCALE 99 : (2016) 8 SCC 622 and Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. 2016 (8) SCALE 765 dismissed the writ petition.
Be it noted, though the High Court felt that it could have non-suited the writ petitioner only on the ground that it had participated in the tender process knowing fully well that stipulation in nature of the clause 26.1 existed, yet proceeded to address the controversy and directed the owner to produce the record solely for the further purpose of being satisfied as to whether the decision making process by the employer/owner is legally valid or not and further to examine as to whether the decision arrived at by the owner that the respondent No. 2, the lowest bidder, possessed requisite experience. After perusing the entire documents on record, the High Court came to hold that:- “15. It is to be noted that the tender evaluation committee consists of Chief Project Manager/RS, General Manager/Procurement, Chief Project Manager/Signaling and the General Manager /Finance. The said Committee has evaluated the documents with regard to the technical qualification of the petitioner as well as respondent no. 2. The Committee has noted that respondent no. 2 was formed in June 2015 by merger of CRC Corporation and CNR Corporation limited. The documents relating to the merger has been submitted along with the bid. The Evaluation Committee has also noted that after the incorporation of the respondent no. 2, upon the merger of CSR Corporation and CNR Corporation, respondent no. 2 was awarded contract for supply of 76 cars for Noida Metro Project by Delhi Metro Rail Corporation Ltd. The Committee found that insofar as Clause No. 12 is concerned, though the minimum requirement was that the bidder must have an experience of total 60 metro cars and out of which 30 cars should be either stainless steel or aluminium, respondent no. 2 was having an experience of total 594 metro cars and all the cars were of stainless steel. Insofar as clause 12.1 is concerned, which requires that out of the number of cars manufactured, there has to be completed satisfactory revenue operation at least in one country outside country of origin/manufacturer or in India or at least one in G8 country of 30 metro cars, respondent no. 2 was having an experience of 432 outside country of origin.
Insofar as clause 12.1 is concerned, which requires that out of the number of cars manufactured, there has to be completed satisfactory revenue operation at least in one country outside country of origin/manufacturer or in India or at least one in G8 country of 30 metro cars, respondent no. 2 was having an experience of 432 outside country of origin. It could thus be seen that the perusal of the document placed on record would reveal that the decision making process of the technical evaluation committee has been guided by the relevant factors and it cannot be said that they have not taken into consideration any of the relevant factors. We are, therefore, of the considered view that the decision of the technical evaluation committee would fall within the ambit of rationality. 16. It is further to be noted that the minutes of the tender evaluation committee was further placed for approval before the Director Level Tender Committee consisting of Director (Rolling Stock and Systems), Director (Projects) and Director (Finance). It could thus be seen that the matter has not been examined at only one level of expert committee, but has gone through examination at two levels of experts.” 38. As is noticeable, there is material on record that the respondent No. 2, a Government company, is the owner of the subsidiaries companies and subsidiaries companies have experience. The 1st respondent, as it appears, has applied its commercial wisdom in the understanding and interpretation which has been given the concurrence by the concerned Committee and the financing bank. We are disposed to think that the concept of “Government owned entity” cannot be conferred a narrow construction. It would include its subsidiaries subject to the satisfaction of the owner. There need not be a formation of a joint venture or a consortium. In the obtaining fact situation, the interpretation placed by the 1st respondent in the absence of any kind of perversity, bias or mala-fide should not be interfered with in exercise of power of judicial review. Decision taken by the 1st respondent, as is perceptible, is keeping in view the commercial wisdom and the expertise and it is no way against the public interest. Therefore, we concur with the view expressed by the High Court.” 7. Mr. Kekhriengulie, learned Addl. Advocate General appearing for the State respondents while adopting the submission of Mr.
Decision taken by the 1st respondent, as is perceptible, is keeping in view the commercial wisdom and the expertise and it is no way against the public interest. Therefore, we concur with the view expressed by the High Court.” 7. Mr. Kekhriengulie, learned Addl. Advocate General appearing for the State respondents while adopting the submission of Mr. A. Zhimomi, learned counsel appearing for the appellant submitted that the payment of process fee was never a pre condition or essential condition for eligibility, therefore, there was nothing wrong in having accepted the bid of the appellant. He also submitted that the process fee can be paid any time before the LOA is issued. 8. Mr. R. Iralu, learned Sr. counsel appearing for the private respondent No. 1 submitted that the payment of process fee is an essential pre condition for accepting a bid because as the word “process fee” itself indicates a bid of a contractor cannot be processed unless prescribed fee for the same is paid. The learned counsel further submitted that it may be true that the NIT did not mention at what stage or at what time the process fee should be paid but it is clear from the word “process fee” itself that it should be paid or deposited before the bid is processed. The learned Sr. counsel further submitted that since it is an admitted fact that the appellant had not deposited the process fee before the technical bid and financial bids were processed there has been violation of the terms and conditions of the NIT. 9. Mr. Iralu further submitted that the fact that the bid of the appellant was accepted and he is selected for issuing the LOA even without having paid or deposited the process fee shows that there was mala-fide intention and favoritism involved in the selection process. Therefore, the learned Single Judge had not committed any error of law in having quashed and set aside the selection process. As such, there is no room for interfering in the impugned judgment and order. 10. We have perused the record and considered the submissions of the ld. counsels representing the parties.
Therefore, the learned Single Judge had not committed any error of law in having quashed and set aside the selection process. As such, there is no room for interfering in the impugned judgment and order. 10. We have perused the record and considered the submissions of the ld. counsels representing the parties. On perusal of the impugned judgment and order, we find that the learned Single Judge had quashed the minutes of the meeting of the bid evaluation committee solely on the ground that the technical and financial bids of the appellant were not accompanied by process fee, therefore the decision making process was arbitrary, unreasonable or irrational and vitiated. However, on perusal of the NIT No. CE/NH/NG/2019-20/NIT-1 dated 4.3.2002 and the corrigendum issued thereto, what we find are: (1) that the cost of process fee for the work in question is Rs. 10,000/- and the same must be submitted by DD from any nationalized bank and it is non-refundable. (2) that the financial bids and the technical bids are to be submitted online and submission of the same through any other mode shall not be entertained. (3) and that no time frame was given for submission of the process fee. Considering all these, we are of the view that the process fee is an essential condition which must be met or fulfilled by all the bidders but it can be paid any time before the LOA is issued. We are also of the considered view that payment of process fee is not a condition precedent or a pre-condition for processing and considering the bids of the bidders. The reasons for this view are: Firstly, there is no time frame given for submission of the same. Secondly, in the NIT it is not mentioned that it is a condition precedent for processing and examining the bids submitted by the bidders. A condition not specifically stated in an NIT cannot be insisted upon by any of the bidders. Some discretions are always available to the authority or authorities who issue the NIT. Thirdly, since it has to be submitted by a DD issued by a nationalized Bank it could have been submitted only when the selection process is completed and the bidders are asked to submit their original documents.
Some discretions are always available to the authority or authorities who issue the NIT. Thirdly, since it has to be submitted by a DD issued by a nationalized Bank it could have been submitted only when the selection process is completed and the bidders are asked to submit their original documents. Fourthly, a DD to be of any value it has to be in original, therefore it would not have made any difference if a scanned copy of the same was submitted along with the bid on line. Further though it is at the cost of repeatation, but for the sake of clarity it may also be stated that, since the bids were to be submitted only through online, the appellant could not have been expected to submit his DD in original form at the time of submission of his bids. Fifthly, process fee is not something related with the suitability or conditions of eligibility of the bidders in relation to the work to be executed. At best it is a fee charged for the administrative service rendered in the selection process. Therefore, acceptance of the same at any time before the issuance of the LOA will not in anyway vitiate the selection process or cause any discrimination against any of the other bidders including the writ petitioner. It is true that, non payment of the same by a selected bidder, when he is required to do so at the time of submission of the original documents can be a reason for denying issuance of the LOA which may even lead to cancellation of his bid but, it can never be a reason to deny a bidder of his right to be considered unless there was a specific mention of it as a condition precedent in the NIT. In conclusion, we may reiterate what we have already stated above that the main objective of adding process fee in the NIT was to obtain some charge for the service rendered and it has no nexus with the objective to be achieved in the selection process. Therefore, payment or acceptance of the same can be at any time but before the LOA is issued. 11. In a case like the present one where dispute is between the bidders, what Court must see is whether substantial amount of public interest is involved or not.
Therefore, payment or acceptance of the same can be at any time but before the LOA is issued. 11. In a case like the present one where dispute is between the bidders, what Court must see is whether substantial amount of public interest is involved or not. Unless Court is satisfied that there is substantial amount of public interest involved and the transaction was entered into mala-fide, it would not intervene in such dispute under Article 226 of the constitution. This principle of law was stated in the case of Raunaq International Ltd. vs. I.V.R. Construction Ltd. at paragraph 11 of the judgment, and the same is reproduced below:- “11. When a writ petition is filed in the High court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. should not intervene under Article 226 in disputes between two. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala-fide, the court rival tenderers.” Now coming back to the case in hand, we are of the view that payment of process fee at any time but before the issuance of LOA will not in any way affect public interest. Public interest in a contract for construction of road would be that the same is constructed as per the specifications and completed in time, and for that a suitable or a competent contractor is chosen, but not payment of the process fee.
Public interest in a contract for construction of road would be that the same is constructed as per the specifications and completed in time, and for that a suitable or a competent contractor is chosen, but not payment of the process fee. Further, we are also of the view that by allowing the appellant to pay the process fee at any time before the issuance of the LOA non of the rights of the writ petitioner would have been affected or violated. Therefore, we can only conclude that the writ petitioner has no grievance or cause of action to even file the same. In fact his bid was also considered along with the bid of the appellant and others on merit. No one including him was deprived of the right to be considered fairly and without any favour. The record speaks for itself. Further, we are also of the view that, by not having insisted upon payment of process fee by the appellant before the bids were evaluated, the authority can not be accused of having shown any favour to him and of being bias against the other bidders. Because, the selection process was based only on merit which are related to the objectives to be achieved i.e. construction of the road as per the specification and within the time frame given. Moreover, it is not the case of the petitioner that he was unfairly treated and discriminated when the authorities considered the competing bids or the process has affected the public interest. Further, in the case of B.S.N. Joshi and Sons Ltd. vs. Nair Coal Services Ltd. the Hon’ble Supreme Court had laid down a principle of law which states that, before interfering in a tender or contractual matter in exercise of judicial review Courts must pose to itself 2 questions which are as follows:- “(i) whether the process adopted or decision made by the authority is mala-fide or intended to favour someone. OR Whether the process adopted or decision made is so arbitrary and irrational that the Court can say “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.” (ii) whether public interest is affected.
OR Whether the process adopted or decision made is so arbitrary and irrational that the Court can say “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.” (ii) whether public interest is affected. If the answers are in negative there should be no interference under Article 226.” In the light of the principle of law settled by the Hon’ble Supreme Court we have examined the decision making process of the authorities who issued the tender but, we have not found public interest having been affected and the process adopted and the decision made mala-fide or done with the intension to favour the appellant. 12. Lastly, in the case of Tata Cellular vs. Union of India, the Hon’be Supreme Court had made it clear that in matters of contract Court should confine only to the following issues:- 1. Whether a decision making authority exceeded its powers. 2. Committed error of law. 3. Committed a breach of the rules of natural justice. 4. Reached a decision which no reasonable Tribunals would have reached. 5. Abused its powers. We have examined the decision making process of the authority who issued the NIT in relation to the issues raised by the writ petitioner but we find none of the above having been committed. To accept a bid and process it with or without the process fee is within the discretionary power of the authority who issued the NIT especially when it is not made a condition precedent or no specific time or date is given in the NIT. Payment of the same can always be insisted upon or enforced at any time before the issuance of the LOA. Therefore, by having done the same the authorities have not committed any of the above. 13. With due respect to the judgment of the Ld Single Judge, but in view of the above stated reasons and the conclusions drawn, we are of the view that interference in the decision making process of the Tender evaluation committee and the Authority concern who issued the NIT was uncalled for. Therefore, we are compelled to interfere with the impugned judgment and order. Accordingly, the writ appeal is allowed and the impugned judgment and order dated 5.3.2021 of the learned Single Judge passed in W.P. (C) No. 97/2020 is quashed and set aside.
Therefore, we are compelled to interfere with the impugned judgment and order. Accordingly, the writ appeal is allowed and the impugned judgment and order dated 5.3.2021 of the learned Single Judge passed in W.P. (C) No. 97/2020 is quashed and set aside. Further, as in consequence the writ petition is dismissed.