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2025 DIGILAW 869 (GAU)

NT Agency v. State of A. P. and Others

2025-05-23

SANJAY KUMAR MEDHI

body2025
JUDGMENT : SANJAY KUMAR MEDHI, J. 1. The instant petition has been filed under Article 226 of the Constitution of India, inter alia, challenging the action of the respondent authorities in rejecting the bid of the petitioner in the technical evaluation which was submitted pursuant to an NIT No. RWD/C/ TAJO/VVP/GE-PRO- 01/2024 dated 05.07.2024 for construction of L027-Road from Kremapao Road to Raro vide package No. AR-03-03268. Amongst others, the petitioner has taken the grounds that such rejection has been done in a most mechanical manner without assigning any discernible reasons and by the said impugned action, the aspect of competitiveness in the financial evaluation has been reduced. 2. As per the facts projected in the petition, an NIT was floated by the Rural Works Department, Arunachal Pradesh on 05.07.2024 pertaining to the construction of L027-Road from Kremapao Road to Raro vide package No. AR-03-03268 in which the petitioner had participated. It is the case of the petitioner that such participation was duly done by submitting all the necessary documents and fulfilling all the necessary conditions. On 02.08.2024, the technical evaluation was done of the bids in which the bid of the petitioner was rejected. In the rejection memo, the grounds have been stated to be violation of the following clauses of the tender: (i) 4.4B(b)(i); (ii) 4.4B(b)(ii); (iii) 4.7 (i). 3. It is the aforesaid action which is the subject matter of challenge in this writ petition. 4. I have heard Sri P. Taffo, learned counsel for the petitioner. I have also heard Sri G.Tarak, the learned Standing counsel of the Department. Sri D. Mazumdar, learned Senior Counsel has appeared online for the Respondent No.5 who is assisted by Shri T. Bagang, learned counsel whereas Sri P. Bora, learned counsel is present for the Respondent No. 6. 5. Sri Taffo, the learned counsel for the petitioner has submitted that from the communication dated 02.08.2024, three clauses have been cited for rejecting the technical bid of the petitioner. He has submitted that neither of the three clauses are applicable in the case of the petitioner and therefore could not have been taken into consideration for rejecting the bid. He has submitted that the first clause being 4.4B(b)(i) relates to the list of equipments and machineries which the petitioner had given as required under the NIT. He has submitted that neither of the three clauses are applicable in the case of the petitioner and therefore could not have been taken into consideration for rejecting the bid. He has submitted that the first clause being 4.4B(b)(i) relates to the list of equipments and machineries which the petitioner had given as required under the NIT. Similarly, clause 4.4B(b)(ii) is on the requirement of list of technical personnel which was also submitted in accordance with law. He submits that the last clause namely 4.7(i) is on the aspect of giving misleading statement or misrepresentation or of having a record of poor performance. He submits that the said clause will not have any application at all as there was no instance of giving any misleading statement or misrepresenting any facts. 6. The learned counsel has drawn the attention of this Court to the list of equipments and list of technical personnel submitted along with the bid which have also been annexed to the writ petition. He has submitted that the illegality of the impugned action becomes apparent inasmuch as in another contract which was initiated vide an NIT dated 28.10.2024. The petitioner was declared qualified and in the said NIT the same documents were given in the tender process. He has submitted that the said aspect has not been denied by the Department in its affidavit. He has submitted that it appears from the affidavit of the Department, that certain other aspects have been taken into consideration namely that certain invoices of the machinery were not genuine and there was no disclosure regarding a pending litigation. Shri Taffo, learned counsel has submitted that apart from the said aspects being irrelevant, those were not mentioned in the communication dated 28.10.2024 and therefore could not have been raised in the affidavit. He has also submitted that on merits both the allegations are absolutely incorrect and categorically denied. He has submitted that the aspect that the invoices of the machinery not being genuine cannot be countenanced inasmuch as the same list of machineries was accepted by the same Department insofar as, the other work is concerned which was initiated vide NIT dated 28.10.2024. As regards the aspect of non-disclosure of pending litigation, the learned counsel has submitted that the same cannot be taken into account to disqualify the bid as it would not have any relevancy on the evaluation of the bids. As regards the aspect of non-disclosure of pending litigation, the learned counsel has submitted that the same cannot be taken into account to disqualify the bid as it would not have any relevancy on the evaluation of the bids. He submits that pendency of a litigation would not have any connection with the aspect of a bidder being technically responsive. He otherwise submits that if that be a reason to disqualify the technical bid of the petitioner even the respondent No.5 had a litigation pending before the court and the response of the Department was that in the said litigation, the respondent No. 5 was only a respondent. He submits that the approach of the Department has been discriminatory and on same grounds the bid of the respondent No.5 has been treated to be valid whereas the bid of the petitioner has been rejected. 7. The learned counsel for the petitioner has also submitted that so far as respondent No. 5 is concerned, the Bank Certificate which has been uploaded from the website would show that the same was issued for an entirely different work. He has submitted that the date of the certificate itself is 03.10.2023 which is much prior to the present NIT which is dated 05.07.2024. The learned counsel has emphatically submitted that the Department could not have adopted two criteria for the same documents and they are obliged in law to have applied the same yardsticks. He has accordingly submitted that the impugned decision to disqualify the bid of the petitioner in the technical evaluation is liable to be interfered with and his price bid be opened and the contract be allotted to the eligible bidder in accordance with its law. 8. In support of his submission, the learned counsel for the petitioner has relied upon the decision of Tata Cellular vs. Union of India, (1994) 6 SCC 651 and the observations made by the Hon’ble Supreme Court in paragraph 77 on the aspect of judicial review over contractual works have been pressed into service. The aforesaid observation is extracted herein below: “77… The duty of the court is to confine itself to the question of legality. Its concern should be: 1. Whether a decision-making authority exceeded its powers? 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. The aforesaid observation is extracted herein below: “77… The duty of the court is to confine itself to the question of legality. Its concern should be: 1. Whether a decision-making authority exceeded its powers? 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under: (i) Illegality: This means the decision- maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesday unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention". 9. Opposing the writ petition Sri Tarak, the Standing Counsel of the Department, has at the outset clarified that in PMGSY there is no restriction in participation as it is a global tender and in fact the petitioner had participated in 4 (four) packages. He has submitted that it is a matter of fact that on 02.08.2024, the technical evaluation was done for 3 (three) packages wherein the same list of machineries and same list of technical personnel were verified. However, the work in which the petitioner is claiming to be successful is of a different package which was opened on 28.10.2024 which is subsequent to the present work. He has submitted that the decision to hold the petitioner successful in another work is a subsequent decision which cannot bind the Department in the previous decision which was taken on 02.08.2024. He has submitted that the decision to hold the petitioner successful in another work is a subsequent decision which cannot bind the Department in the previous decision which was taken on 02.08.2024. He has also highlighted the aspect that the allegation that the invoice of the petitioner was found to be fake has not been categorically denied by the petitioner. 10. On the aspect that there is no interim order and the work has progressed, the learned Standing Counsel has submitted that in the meantime more than 50% of the work has been completed and even assuming that the petitioner has an arguable case, he may approach the Civil Court. In support of his contention, the learned Standing Counsel has relied upon the decision of the Hon’ble Supreme Court in the case of N.G. Projects Limited vs. Vinod Kumar Jain and Others , (2022) 6 SCC 127. The following observations made in the case of N.G. Projects (Supra) have been pressed into service: “16.. In Galaxy Transport Agencies v. New J.K. Roadways, a three-judge bench again reiterated that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. It was observed as thus: “17. In accordance with these judgments and noting that the interpretation of the tendering authority in this case cannot be said to be a perverse one, the Division Bench ought not to have interfered with it by giving its own interpretation and not giving proper credence to the word “both” appearing in Condition No. 31 of the N.I.T. For this reason, the Division Bench's conclusion that JK Roadways was wrongly declared to be ineligible, is set aside. “18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. “18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court”. 11. Reliance has also been placed on the case of Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517 . The relevant paragraphs is extracted hereinbelow: “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 al- ways 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. 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 blacklisting 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” 12. So far as Jagadish Mandal (Supra) is concerned, the aspect of judicial review on contractual works which has been dealt with has been relied upon and the relevant observations are extracted hereinbelow: “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 is 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 is 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 interference, 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”. 13. The learned Standing Counsel has submitted that the construction of the road in question is in the border areas and immense public interest is involved. He has also submitted that the execution of the work is going on smoothly and at this stage any interference would not be in the interest of justice. He has also submitted that by this time the e-portal perhaps has been closed and therefore it is not possible to have a financial evaluation even if the petitioner is successful in this writ petition. 14. Supporting the contention of the Department, Shri D. Mazumdar, learned Senior Counsel who has appeared online for the respondent No. 5 has submitted that admittedly in the NIT in question there were 3 (three) packages and the petitioner had submitted bids for all the 3 (three) packages. 14. Supporting the contention of the Department, Shri D. Mazumdar, learned Senior Counsel who has appeared online for the respondent No. 5 has submitted that admittedly in the NIT in question there were 3 (three) packages and the petitioner had submitted bids for all the 3 (three) packages. It is submitted that the requirement of having a list of machineries and list of technical personnel as per the clauses mentioned above is to ensure that the work in question can be completed within the time stipulated without any compromise with the quality. He has submitted that when the same lists were submitted by the petitioner for machineries and personnel, if more than one work was allotted to him, it would not have been possible to depute the use machineries or depute the same technical personnel in the different sites of works whereby there would not only be delay in execution of the work but would also affect the quality of the same. He has also submitted that it was for the petitioner to make an undertaking that in case he is granted any work, he would forego the other works. He has submitted that practically it is not possible to undertake and complete the work with the same equipments and personnel in more than one site if more than one work is allotted to the petitioner. 15. Regarding the aspect of application of clause 4.7(i), the learned Senior Counsel for respondent No. 5 has submitted that admittedly there has been suppression of material facts by the petitioner who did not disclose the aspect of pending litigation. As regards the litigation in which his client is involved, the learned Senior Counsel has submitted that his client’s involvement is in the capacity of a respondent and therefore the same would not amount to suppression of a material fact. 16. In support of his submission, the learned Senior Counsel for the respondent No. 5 has also relied upon the case of Tata Cellular (Supra) He has also relied upon the case of Raunaq International Ltd. vs. I.V.R. Construction Ltd. and Others , ( 1991) SCC 492 , in which the aspect of public interest has been emphasized by the Hon’ble Supreme Court. The learned Senior Counsel has relied upon the following observations made in the aforesaid case: “8…This is not a case where any mala fides have been alleged against any member of the Board. Nor is there any allegation of any collateral motive for awarding the contract to M/s Raunaq International Ltd. The only ground of challenge in the writ petition filed by M/s I.V.R.Construction Ltd. is that M/s Raunaq International did not fulfil the qualifying criterion of having laid a such pipeline for a distance of 3 kms. But the challenger, M/s I.V.R. Construction Ltd. also does not fulfil the qualifying criterion. In these circumstances, we fail to see any basis for passing the impugned order. “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 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. 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 should not intervene under Article 226 in disputes between two rival tenderers”. 17. As regards the allegation regarding the Bank Certificate, the learned Senior Counsel has submitted that his client had given a proper Bank Certificate pertaining to the work in question and it may be due to inadvertence that the copy uploaded by the petitioner in the website is of a different work. He has submitted that the record of the Department would clarify this issue. 18. He has submitted that the record of the Department would clarify this issue. 18. Shri Taffo in his rejoinder has emphasized that the stand of the Department itself is that there was no restriction for participation in more than one work and therefore the action of his client while participating in the 3 (three) works cannot be faulted upon. He has also disputed the progress of the work said to have been achieved. He has submitted that at most 30% of the work has been completed and the present season is not the working season as the rains have already started and no work is possible. He has submitted that the department cannot make any contention that the e-portal has perhaps been closed as such portal is never closed. 19. The rival contentions have been duly considered and the materials placed before this Court have been carefully examined. 20. The impugned order of rejection dated 02.08.2024 has cited three clauses of the tender document under which the technical bid of the petitioner has been rejected. The clauses have been elaborately mentioned above. 21. As per the first clause, there is a requirement to give a list of the equipments and machineries and as per the second clause, the list of technical personnel is to be given. The impugned order does not specify or cite any details of invocation about the aforesaid two clauses and in the affidavit, it has been stated by the Department that in the list of machineries, certain invoices of machineries were enclosed which has been stated to be not genuine. Apart from the fact that the aforesaid allegation has been denied by the petitioner, this court has found that the said reason has not been disclosed in the rejection order dated 02.08.2024 and clearly appears to be an elaboration made in the affidavit by the Department. 22. In the celebrated case of Commissioner of Police vs. Gordhan Das, AIR 1952 SC 16 , it has been clearly laid down that public orders publicly made has to be examined on the basis of the reasons cited in the said order and cannot be improved by way of an affidavit. 22. In the celebrated case of Commissioner of Police vs. Gordhan Das, AIR 1952 SC 16 , it has been clearly laid down that public orders publicly made has to be examined on the basis of the reasons cited in the said order and cannot be improved by way of an affidavit. The aforesaid observations of the Hon’ble Supreme Court has reiterated in subsequent cases including the case of Mohinder Singh Gill and Another vs. The Chief Election Commissioner, New Delhi and Others , (1978) 1 SCC 405 , the relevant paragraphs of which is extracted hereinbelow: “8…The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji : "Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in Ms mind, or what he intended to, do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older”. 23. This Court has also noticed that in a subsequent NIT dated 28.10.2024, the petitioner was declared qualified in the technical evaluation. It is the emphatic and categorical case of the petitioner that in this NIT also, the same set of documents pertaining to the list of equipments and list of technical personnel have been submitted. 23. This Court has also noticed that in a subsequent NIT dated 28.10.2024, the petitioner was declared qualified in the technical evaluation. It is the emphatic and categorical case of the petitioner that in this NIT also, the same set of documents pertaining to the list of equipments and list of technical personnel have been submitted. Though the learned Standing Counsel of the Department has tried to justify that the said NIT is of a subsequent period which would not bind the Department for a previous decision, this court is unable to accept the said contention inasmuch as, it is the same Department which has found the same list of equipments to be acceptable in a subsequent NIT and therefore the first two grounds of cancellation by simply mentioning the clauses are clearly untenable in law. 24. What remains to be examined is the invocation of clause 4.7(i) which pertains to making misleading statement or misrepresentation or having a record of poor performance. Apparently, the said power is discretionary in nature and it is a settled position of law that whenever discretion is applied, the same has to be done by following the due process and with due care and attention. In the instant case, the Department has tried to justify invocation of the said clause by citing that the petitioner had not disclosed pendency of a litigation in the High Court. The response by the petitioner is that even the respondent No.5 had a litigation pending in the High Court which was not disclosed. The explanation by the learned counsel for the respondent No.5 as well as the Department is that in the said litigation, the said respondent No. 5 was in the position of a respondent and therefore there was no requirement for such disclosure. The aforesaid explanation cannot be countenanced in view of the fact that the requirement is for disclosure of pending litigation without any further stipulation as to whether the party was the petitioner or a respondent. 25. As regards the issue as to the progress of the work, whereas the private respondent and the Department has contended that sufficient work has progressed and the Department contention is that almost 50% of the work has progressed. On the other hand, the learned counsel for the petitioner has submitted that at best 30% of the work has progressed. 25. As regards the issue as to the progress of the work, whereas the private respondent and the Department has contended that sufficient work has progressed and the Department contention is that almost 50% of the work has progressed. On the other hand, the learned counsel for the petitioner has submitted that at best 30% of the work has progressed. The progress of the work is undoubtedly a relevant factor inasmuch as, the same touches upon the aspect of public interest. At the same time, the rights of the parties cannot be denied only on the ground that certain progress has been made. If in a given case, the progress was of substantial nature, then the matter would have been different. However, in the instant case, the progress is not that much substantial. 26. The scope of interference by a writ Court in a matter of contractual dispute is circumscribed and it has been clearly laid down in a number of judicial precedents that such interference can be made only when there is gross arbitrariness and unreasonableness in the impugned decision or the same is vitiated by mala fide. In the instant case, the reasons which are discernible for rejection of the bid of the petitioner, apart from being cryptic are not consistent at all, more so by the subsequent action and the conduct of the Department itself. 27. This Court has also made a specific query to the petitioner regarding the price offered by him and it appears that the price of the petitioner was lower than the contract amount which was offered by the respondent No. 5. The said query was put so as to ensure that the present exercise of adjudication does not become a futile exercise. 28. In view of the aforesaid facts and circumstances and the discussions made above, this Court is left with no other option but to interfere with the impugned order dated 28.10.2024 by which the technical bid of the petitioner was rejected. Consequently, all consequential action including the issue of the Letter of Intent and the work order in favour of the respondent No. 5 stand interfered with and are accordingly set aside. The remaining part of the work is to be accessed and the same is required to be allotted to L-1 bidder who is found eligible in accordance with law. Consequently, all consequential action including the issue of the Letter of Intent and the work order in favour of the respondent No. 5 stand interfered with and are accordingly set aside. The remaining part of the work is to be accessed and the same is required to be allotted to L-1 bidder who is found eligible in accordance with law. It is, however, made clear that so far as the works done by the respondent No.5 in the meantime is concerned, there will be no restrictions towards payment and release of the bills to the said respondent No. 5. 29. Writ petition stands allowed in the manner indicated above. 30. No order as to cost.