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2022 DIGILAW 1168 (GUJ)

Amrut Cold Storage v. State of Gujarat

2022-09-30

ARAVIND KUMAR, ASHUTOSH J.SHASTRI

body2022
ORDER : Ashutosh J. Shastri, J. 1. By way of this petition under Articles 226 and 227 of the Constitution of India, petitioners have prayed for the following reliefs :- “7(A) To admit this petition; (B) To issue appropriate writ, order or direction directing the respondents to issue necessary orders for commencement of work pursuant to tender floated by them in E-tendering process being Tender ID : 346682, BHA/AQU/01/2019/Hansot/P6 for Agriculture Land Block for 50 Hectares at Hansot, Bharuch; (C) During pendency and final hearing of this petition, be pleased to direct the respondents to immediately issue necessary orders for commencement of the work of Tender ID 346682, BHA/AQU/01/2019/Hansot/P6 for Agriculture Land Block for 50 Hectares at Hansot, Bharuch. (D) To pass such other and further orders as may be deemed fit in the facts and circumstances of the present case.” 2. The background of the facts which has given rise to the present petition is that respondents herein floated a tender by E-tendering process on 05.02.2019 being Tender ID : 346682, BHA/AQU/01/2019/Hansot/P6 for agriculture land block for 50 Hectares at Hansot, Bharuch. Petitioner no. 1 and two other bidders (including one Purvesh Fisheries Pvt. Ltd.,) had offered their bid for the tender. The last date for submission of physical documents was as 20.02.2019 and the technical bids were to be opened on 22.02.2019 and later the price bid was to be opened on 28.02.2019. 2.1. It is the case of the petitioners that technical bid of petitioners was found to be the only eligible bid and hence bids of other bidders were not opened up but later on, after opening the price bid of the petitioners, it was decided to award the tender work to the petitioners subject to approval of the State Government. The copies of the internal communications including the communication addressed to the petitioners have been attached to the petition compilation. 2.2. The petitioners have further stated that being aggrieved by rejection of the technical bid, one of the bidders namely ‘Purvesh Fisheries Private Limited’, filed a petition before this Court being Special Civil Application 5104 of 2019, inter alia contending that physical document of the said bidder reached to the office of respondent no. 2.2. The petitioners have further stated that being aggrieved by rejection of the technical bid, one of the bidders namely ‘Purvesh Fisheries Private Limited’, filed a petition before this Court being Special Civil Application 5104 of 2019, inter alia contending that physical document of the said bidder reached to the office of respondent no. 2 only one day late, but the documents sent electronically were received by the authority well in time and as such, after raising other contentions, petition was filed before this Court by the said firm initially without joining the affected persons, but later on, with the permission of this Court, present petitioner no. 1 was joined in the said proceedings. However, no stay was granted by this Court in the said proceedings against the allotment of work to the petitioners. According to the petitioners, with mala fide intent, process of issuing the work order was not commenced and after hearing at length, the co-ordinate Bench by order dated 08.06.2021 specifically inquired from the State authorities whether they would like to go for re-tender since considerable time had lapsed and on such query, at later point of time when final hearing took place on 15.07.2021, the State authorities have specifically accepted before this Court that they would not like to re-tender the contract work and as such, this Court allowed to proceed further with the hearing of the main matter on merits. Since re-tendering was not commenced, the petition came to be disposed of vide order dated 15.07.2021. 2.3. It is the grievance of the petitioners that said order has not been carried further before the higher forum as per the information of the petitioners and despite submitting representations before the respondent authority requesting for work order being issued by issuing appropriate directions to the concerned authorities, petitioners did not get any response from the authorities for a considerable long time. However, vide communication dated 07.07.2022, respondent no. 2 authority has informed the petitioners that now they are inclined to go for re-tendering of the contract in view of the advice received from the State authorities i.e. respondent no. 1. However, vide communication dated 07.07.2022, respondent no. 2 authority has informed the petitioners that now they are inclined to go for re-tendering of the contract in view of the advice received from the State authorities i.e. respondent no. 1. This according to the petitioners is aimed at helping unsuccessful bidder namely, Purvesh Fisheries Pvt. Ltd., and other persons, the resultant effect would be that though petitioners’ tender was found to be suitable, work order is not issued in view of this communication and as such, grievance is raised that it was assured before the Court that authorities were not inclined to go for re-tendering and contrary, opposite stand is now taken, which has led the petitioners to approach this Court by filing this petition under Article 226 of the Constitution of India. 3. Mr. Nirav C. Thakkar, learned advocate appearing for the petitioners has vehemently contended this communication is aimed at helping other unsuccessful bidder in the first round of tender in which the petitioners were found to be eligible. It has been submitted that though specifically a statement was made before the Court that State authority is not inclined to go for re-tendering and the Hon’ble Court was led to believe such stand to be true, and having recorded said stand, now it is not open for the State authority to take a contrary stand and as such, he has contended that impugned communication deserves to be set aside. Mr. Thakkar, learned advocate appearing for the petitioners has also submitted that petitioners pursuant to the previous successful process of tender has made all arrangements to the commence work, but re-tendering is adversely affecting its legitimate acceptance and as such, he has prayed that respondent authority should be called upon not to alter their stand and has prayed for issuance of writ of mandamus to said effect. He has further submitted question of re-tendering is no doubt, the domain of the authority, but if such stand is to help some other candidate or the bidder, Hon’ble Court can verify and exercise the power of judicial review. Hence, under these set of facts, it is desirable in the interest of justice to direct the State authority not to act upon or proceed further with the impugned communication. Accordingly, Mr. Thakkar has submitted that even by principle of estoppel also the authorities are to be stopped from taking any further steps. Hence, under these set of facts, it is desirable in the interest of justice to direct the State authority not to act upon or proceed further with the impugned communication. Accordingly, Mr. Thakkar has submitted that even by principle of estoppel also the authorities are to be stopped from taking any further steps. Hence, reiterating his submission, he has prayed for grant of relief even of interim nature during the pendency of the present proceedings. No further submissions have been made. 4. Having heard the learned counsels appearing for the petitioners and having gone through the impugned communication, it has been found that land bearing Survey No. 592 to the extent of 50 Hectares, at Bharuch District, Taluka Hansol was to be allotted for fisheries industry after master plan maping by the Fisheries Department. In respect of this a public notice came to be issued and proposal was forwarded to the Government after obtaining decision of State Empowered Committee. However, it has been found by the authority that only one company was technically qualified and as such, in view of the instructions contained in letter dated 07.09.2021 issued by the Department of Revenue, Government of Gujarat and competitive rate having not been mentioned, a conscious decision was taken to re-tender 50 Hectares of land. This decision appears to be on the basis of instructions contained in letter dated 07.09.2021 issued by Revenue Department. 4.1. It is to be further noticed that in the earlier round of litigation which was initiated by M/s. Purvesh Fisheries Pvt. Ltd., the action of rejection of technical bid of said Company had been questioned and in that context, the co-ordinate Bench had dealt with the issue which ultimately resulted in dismissal of Special Civil Application. It appears from the record that at that point of time, namely, around June, 2021, it was informed that fresh tender was not inclined to be issued. Said statement came to be recorded in the background of challenge being made by M/s. Purvesh Fisheries Pvt. Ltd., against the order of rejection of its technical bid, and it appears that same was done in the month of June-July, 2021 and thereafter, no process was undertaken and later on authorities have found that only one company had been found to be technically qualified. Hence, a conscious decision is taken to re-tender in view of the policy and as such, we see that impugned communication came to be issued in the context of the instructions contained in the letter of Revenue Department. 4.2. Additionally, it is also found as per the ‘Important Information’ stipulated under the tender documents attached to the petition compilation, the tender inviting authority has reserved its right to reject all or any of the bidders or bids even without assigning any reason and said instruction is traceable to clause 1.6. Notwithstanding same, reason has been assigned namely, “by virtue of instructions of Revenue Department”, it was advisable to re-issue tender. Hence, said policy decision is not possible to be substituted by assigning another view by this Court that too in exercise of extra ordinary jurisdiction. Further, in the instant case, at elementary stage i.e. at the technical qualification stage, the petitioners had been found to be eligible, which means no right had vested or created in favour of the petitioners. Had there been so, petitioners might not have waited right from July, 2021 till July, 2022. The statement which has been made around one year before cannot confer any right in favour of the petitioners to request the Court for issuance of a writ. In fact, if the policy is not permitting then re-tendering process cannot be intercepted by the Court in exercise of judicial review. In fact, the Bid Letter would also indicate that petitioners are conscious about rights of the competent authority as can be seen from condition nos.13 and 14 reflecting on page 39, which reads :- “13. I/We understand that the Competent Authority may cancel the tender process at any time and that the Competent Authority are neither bound to accept any bid that the Competent Authority may receive nor to invite the Bidders to bid, without incurring any liability to the Bidders, in accordance with the Tender Document. 14. I/We hereby irrevocably waive any right or remedy which I/We may have at any stage at law or howsoever arising to challenge or question any decision taken by the Competent Authority in connection with the selection of the Preferred Bidder, or in connection with the tender process itself, in respect of the Tender Document and the terms and implementation thereof.” 4.3. When aforesaid conditions make it clear that it is always open for the competent authority to take a decision and mere tendering a bid will not confer any right in favour of the petitioners, and decision taken by the respondents to issue re-tender, that too, when it is at the stage of technical qualification which was said to have been cleared by the petitioners and before acceptance of tender officially or before issuance of work order, it cannot be said that it would not be open for the competent authority to take a conscious decision depending upon the circumstances which are being faced. If the authority is of the view that fair competition is not prevailing, on account of one company having found to be technically qualified on the instructions of the department, and in view of such situation permitting re-tendering process, we are of the clear opinion that we would not substitute our opinion qua that of the competent authority who has taken a conscious decision. 4.4. No doubt, extra ordinary jurisdiction of the Court is only to examine any issue which relates to contract but the discretion of the competent authority cannot be usurped in the absence of mala fides or arbitrariness. Here, except bald assertion, there appears to be no case of such mala fides which may persuade us to issue a writ. We are conscious about the proposition propounded by Hon’ble Apex Court in the recent past in the matter of M/s. N.G. Projects Limited v. Vinod Kumar Jain & Ors., reported in (2022) 6 SCC 127 , wherein, the Hon’ble Apex Court has clearly held that in respect of government contracts or tenders, the powers of judicial review are circumscribed and satisfaction of the tender inviting authority cannot be given a go-bye in exercise of the power of judicial review. We deem it proper to quote the proposition of law enunciated by Hon’ble Apex Court. It reads: “12. In Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & Anr., this Court held that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It was held as under: 13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. It was held as under: 13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision. xx xx xx 15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given. 13. This Court sounded a word of caution in another judgment reported as Silppi Constructions Contractors v. Union of India and Ors., wherein it was held that the Courts must realize their limitations and the havoc which needless interference in commercial matters could cause. In contracts involving technical issues, the Courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above, the Courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference would cause unnecessary loss to the public exchequer. It was held as under:- “19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts, but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realize their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. 20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realize that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender and has authored the tender documents is the best judge as to how the documents have to be interpreted. The authority which floats the contract or tender and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind, we shall deal with the present case. (Emphasis supplied).” 23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work. 26. A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.” 5. The grant of interim injunction by the learned Single Bench of the High Court has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.” 5. In the matter of Uflex Limited v. Government of Tamil Nadu & Ors., reported in (2022) 1 SCC 165 , similar observations have been made by Hon’ble Apex Court viz., it has been held judicial review in contractual matters would be within certain limitations. We deem it proper to reproduce hereunder : “7. It may also be pertinent to note the principles elucidated in the case of Tata Cellular v. Union of India: (SCC pp.687-88 para 94) “94. The principles deducible from the above are: (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 decision. 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. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. 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 facts 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)” 6. There are few more decisions on similar line, but since the central controversy involving in present proceedings is being dealt with in the context of the conditions of the tender document and the ‘important information’. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (emphasis in original)” 6. There are few more decisions on similar line, but since the central controversy involving in present proceedings is being dealt with in the context of the conditions of the tender document and the ‘important information’. Keeping in view the authoritative principles stated herein-above, we are of the view that if a conscious decision is taken by tender inviting authority to issue afresh tender, there is hardly any reason for this Court to intervene and substitute the decision of tender inviting authority. Even during the course of hearing and on the basis of the records, petitioners have not been able to establish any distinguishable circumstances except the earlier stand taken in a petition filed by another party. Hence, we are of the view that petition lacks merit and there is no absolute right vested in favour of the petitioners to invoke extra ordinary jurisdiction on the basis of the aforesaid stand taken by State in earlier round of litigation. Hence, we see no reason to entertain the petition. 7. Accordingly, petition stands dismissed with no order as to costs.