M/S. Dev Prabha Construction Pvt. ... vs The Bharat Coking Coal Limited on 18 February, 2021
Jharkhand High Court
M/S. Dev Prabha Construction Pvt. … vs The Bharat Coking Coal Limited on 18 February, 2021
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No.1757 of 2020
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M/s. Dev Prabha Construction Pvt. Ltd. ………. Petitioner.
-Versus-
- The Bharat Coking Coal Limited, through its Chairman-cum- Managing Director, having its registered office at Koyla Bhawan, Dhanbad.
- The Chairman-cum-Managing Director, Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, Dhanbad.
- The Director Technical (Operation), Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, Dhanbad.
- The General Manager (C.M.C.), Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, Dhanbad.
- The National Informatics Centre (NIC), through its Authorized Officer, Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, Dhanbad.
………. Respondents.
—–
CORAM : HON’BLE MR. JUSTICE RAJESH SHANKAR
—–
For the Petitioner : Mr. Anil Kumar Sinha, Sr. Advocate Mr. Ajit Kumar, Sr. Advocate Ms. Aprajita Bhardwaj, Advocate For the Respondents: Mr. Amit Kumar Das, Advocate
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Order No.11 Date: 18.02.2021
1. This case is taken up through video conferencing.
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2. The present writ petition has been filed for quashing the tender cancellation order under Reference No. BCCL/CMC/F-e- NIT/Coal/Tptn38/Bastacolla/2020 dated 17.06.2020 (Annexure-7 to the writ petition), whereby the General Manger (C.M.C), Bharat Coking Coal Limited, D h a n b a d – R e s p o n d e n t N o . 4 h a s c a n c e l l e d t h e N I T u n d e r r e f e r e n c e No.BCCL/CMC/F-e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020. Further prayer has been made for issuance of direction upon the respondents to award the tender in question in favour of the petitioner, which has been declared L1 bidder after the Reverse Auction Process (in short ‘RAP’). Alternatively, the petitioner has further prayed for issuance of direction upon the respondents to go for revocation of tender process in view of Clause 34 of Instructions to Bidders (in short ‘ITB’) of the NIT from the stage of opening of the reverse price bidding, if as per the impugned tender cancellation notice dated 17.06.2020, the reasons are technical. The petitioner has also prayed for issuance of direction upon the respondents not to go ahead with publication of fresh NIT or undertaking another bidding process for the works in question.
Factual Matrix of the Case
3. The factual background of the case as stated in the writ petition is that the petitioner is engaged in the business of executing various kinds of contractual works including mining and transportation. An o n l i n e o p e n t e n d e r w a s i n v i t e d b y t h e r e s p o n d e n t – B C C L v i d e N I T n o . : B C C L / CMC/F-e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020 for transportation of Coal from different sources of Bastacolla area, BCCL to different destinations in BCCL including allied jobs for 1186 days. The estimated cost as declared in the e-Notice Inviting Tender was Rs.153,36,29,906/- at diesel base price @ Rs.67.60 per litre. Altogether, five bidders including the petitioner participated in the said tender and the bid of one of the bidders, namely, Dhansar Engineering Co. Pvt. Ltd. was declared as rejected in the technical evaluation in view of the conditions laid down in clause 9 of general terms and conditions of the NIT having quoted the highest value (H1). The tender summary report containing the technical bid opening summary and technical evaluation summary details were uploaded by the respondents on 21.02.2020 at e-procurement system of CIL. The petitioner as well as three other bidders qualified in the technical evaluation of the bids which was informed through e-mail communication dated 21.02.2020 itself and called for e-auction to be started from 01:00 PM on 21.02.2020. The price bid of all the bidders were more than 10% of the estimated value of the work (Rs.153,36,29,906.00) and thus as per the terms and conditions of the NIT, the respondents fixed the auction starting price at Rs.168,69,92,897/- and the reverse auction process was started. During the reverse auction process, only two bidders, namely, AKA Logistics Pvt. Ltd. and the petitioner participated and quoted their respective prices at Rs.167,89,92,897.00 and Rs.167,09,92,897.00, respectively, and thereby the petitioner was declared as L1. The petitioner, after being declared L1, invoked the provisions of clause 20.2 of the ITB as mentioned in the NIT and vide its letter dated 22.02.2020 offered suo moto rebate worth about 6.75% and again vide another letter dated 25.02.2020 offered suo moto rebate of further 6.22% and thereby the price quoted by the petitioner then stood at Rs.162,90,34,128/- only against the original declared L1 price of the petitioner, which was Rs.167,09,92,897/. The petitioner has brought on record the typed copy of works/charts prepared by the respondents after considering all the headwise/itemwise quoted rates by the above four bidders including that of the petitioner as well as considering the rebates offered by the petitioner. In the meantime on 23.03.2020 nationwide lockdown was declared and
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works got disrupted. The petitioner kept on waiting for award of the contract which was being delayed. Suddenly, the petitioner could know about the cancellation order intimating it vide reference no.BCCL/CMC/F-e- NIT/Coal/Tptn38/Bastacolla/2020 dated 17.06.2020 uploaded through the office of the respondent no.4, whereby the said authority decided to cancel the tender in question, which was notified under Ref. No.BCCL/CMC/F-e NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020 on account of technical reasons, which gives rise to filing of the present writ petition.
Submissions made on behalf of the petitioner
- Mr. Anil Kumar Sinha, learned senior counsel, appearing on behalf of the petitioner submits that the petitioner having been declared as L1, after a transparent bidding process/reverse auction process, is entitled to be awarded the contract in question particularly when none of the participants made any complain with regard to the tender process and also that one of the bidders, namely, M/s Om Sharda Logistics Pvt. Ltd. had decided to remain out of the fray.
- Learned senior counsel for the petitioner further submits that even if the respondents take a plea as mentioned in the cancellation order that there was some mistake or technical error in the reverse bidding process, they were required to resort to the provision of revocation of tender process from appropriate stage i.e. technical bid opening stage or the price opening stage as mentioned in Clause 34 of the ITB of the NIT and the cancellation of tender could not have been resorted to by the respondents as per the terms and conditions of NIT itself.
- It is further contended that the bid of M/s Om Sharda Logistics Pvt.
Ltd. was thoroughly defective and non-acceptable because it had quoted the rate of GST @ 5% for item nos.1,2,3 and 6 of the BOQ which should have been 12% as applicable and it had never approached the respondents for modification or correction of its price bid,. Thus, the said error remained uncorrected in the offer of the said party and thereby its price bid was fit to be rejected, however, the respondents committed illegality in including M/S Om Sharda Logistics Pvt. Ltd. for participating in the reverse auction process.
Bidder-Om Sharda Logistics Pvt. Ltd. after having realized its shortcomings or more particularly on appreciating the deficiency in its price bid / BOQ did not participate in the reverse auction process and it did not offer even a single bid or quote. The petitioner has also learnt that the said Om Sharda Logistics Pvt. Ltd. has accepted the outcome of the entire tender process / e-auction process and vide its letter dated 03.03.2020, which was forwarded to the Respondent no.4, has withdrawn from the bid process by claiming its earnest money/bid security on accepting itself to be an unsuccessful bidder.
7. Learned senior counsel for the petitioner further contends that when the entire tender process stands the test of fairness and reasonability, the same cannot be aborted or cancelled arbitrarily even without resorting to the process and conditions of Clause 34 and 35 of ITB of the NIT. The respondents are bound to take a holistic view of the entire process as they have been taking steps in
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other similar matters to save the tender process as provided under Clauses 34 and 35 of ITB of the NIT, which is otherwise fetching them the best and competitive price upon exercise of an open process in conformity to the provisions of Article 14 of the Constitution of India. The impugned cancellation order smacks of malafide and nepotism on the part of the respondents which appears to be arbitrary intending to favour some unknown/non-participants in general and M/s Om Sharda Logistics Pvt. Ltd in particular whom the respondents want to anyhow accommodate by way of adopting the wrongful method of cancelling the entire tender process.
8. Learned senior counsel for the petitioner invites the attention of this court to Clause 35 of ITB of the NIT and submits that the tender cancellation notice must contain the details of circumstances leading to cancellation of the tender, however, impugned tender cancellation notice is lacking the details or reasons as required and on this score alone the impugned notice is liable to be set aside. It is also submitted that if there is no reason assigned in the decision, the same cannot be supplemented either in the counter affidavit or by subsequent action of the respondent authorities. The action of the respondents is apparently arbitrary and discriminatory apart from being contrary to the provisions as contained in clauses 34 and 35 of ITB of the NIT which have to be construed strictly.
Submission made on behalf of the respondent-BCCL
- Mr. Amit Kumar Das, learned counsel for the respondents submits that it is a settled principle of law that notice inviting tender is an invitation to offer and merely because the petitioner has participated in the tender, does not create any right in its favour nor the respondents are denuded of their option to cancel the tender. The tender process can be cancelled at any stage before finalization and issuance of letter of acceptance.
- It is further submitted that the comparative chart generated before RAP showed the lowest amount quoted as Rs.174,96,63,042/- i.e. 14.086% above estimated cost. Accordingly, ‘start bid’ price was set for triggering RAP at Rs.168,69,92,897/- i.e. estimated cost +10% as per sub-clause no.4 of 9 B of NIT/TD, which describes the procedure of RAP. Decremental price was set at Rs.80,00,000/-. Out of four bidders, only two participated in RAP which was triggered by one of the bidders, namely, A.K.A. Logistics Pvt. Ltd. reducing the value of ‘Start Bid’ by one decremental price of Rs.80,00,000/-. Subsequently, the petitioner also reduced the value by one decremental price of Rs.80,00,000/-. Resultantly, overall value of start bid price was reduced by Rs.1,60,00,000/- during RAP and the figure of start bid price came to Rs.1,67,09,92,897/-. After completion of RAP, BOQ summary details and BOQ of all bidders were downloaded from the system and then it was observed that the lowest quoted amount shown in comparative chart before RAP was in tune with BOQ summary details generated by system after RAP, whereas the amount shown in BOQ Summary details before RAP mismatched with the amount shown in the BOQ submitted by the bidders during RAP, as generated by portal after completion of RAP. The matter was reported to NIC over e-mail with a request to clarify the matter and to take necessary measures for rectification of error, if any. In this regard, NIC replied over e-mail that while designing a BOQ, the system used to follows certain logic for generating comparative chart. While preparing the BOQ by the department user, the GST row had been added as a line item which should have been put as a column which was the
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cause of the error. It was advised that while designing a new BOQ, it should be tested in the demo site and then only it should be put on live site. In this case, the system had included the GST amount as a line item and generated the comparative chart and hence an erroneous value occurred in the comparative chart. The Tender Committee after elaborate discussion observed that the value of the bid quoted by Om Sharda Logistics Pvt. Limited was Rs. 164,50,51,160/- which was only known to it before RAP, however, it neither complained when a higher value (estimated cost + 10%) was set as start bid price nor agitated even after conclusion of RAP declaring the petitioner as L1 bidder by the system, rather the said bidder i.e. Om Sharda Logistics Pvt. Limited submitted an application for refund of EMD on 03-03-2020.
11. The tender committee found that the petitioner was declared as L1 bidder due to the technical error in the system though initial lower bid of Om Sharda Logistics Pvt. Ltd. was available in the system and having found such anamoly, the answering respondents sought legal opinion from the Additional Solicitor General, Government of India. Having received the legal opinion, the tender committee deliberated upon the said issue and proposed for cancellation of the tender process which was duly accepted by the CMD, BCCL and the tender was accordingly cancelled. Apparently the petitioner was declared L1 bidder due to technical error in the system and as such the respondent no.4, after detecting the said error, decided to cancel the entire bidding process which was done strictly in accordance with law. It is also submitted that the petitioner cannot be said to have suffered any prejudice in the matter.
Finding of the Court
- Heard learned counsel for the parties and perused the materials available on record. The petitioner has put challenge to the impugned order passed by the respondent no.4 cancelling the tender process of the said work with a further prayer for issuance of direction upon the respondents to award the said work to the petitioner being L1 bidder or in the alternative to resort to the revocation of tender process in view of Clause 34 of ITB of the NIT from the stage of opening of the Reverse Price Bidding, as it has been stated in the cancellation order that the said NIT was cancelled due to technical error in the system,.
- Learned counsel for the respondents has referred few judgments rendered by the Hon’ble Supreme Court to contend that a tenderer cannot challenge the decision of the respondent authorities who have right to cancel the tender if it is found to be in the interest of the respondents not to continue with the same and the High Court in exercise of its power under Article 226 of the Constitution of India has very limited scope to interfere with the decision of the tender inviting authority. I have gone through those judgments as cited by the learned counsel for the respondents.
- In the case of South Delhi Municipal Corporation Vs. Ravinder Kumar & Another, reported in (2015) 15 SCC 545, the Hon’ble Supreme Court has held as under:-
“18.6. Further, the High Court has failed to consider another important fact that the
Government being guardian of public finance it has the right to refuse the lowest or
any other tender bid or bids submitted by the bidders to it provided its decision is
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neither arbitrary nor unreasonable as it amounts to violation of Article 14 of the Constitution of India. The appellant Corporation’s decision in cancelling its earlier tender is not in violation of Article 14 of the Constitution of India, as the High Court did not find any mala fide intention on the part of the appellant Corporation to favour someone in taking such decision. The appellant Corporation’s decision in cancelling the earlier tender notice vide corrigendum dated 30-11- 2012 and then issuing a subsequent tender notice dated 13-12-2012 inviting fresh bids from eligible persons for the same works was with a bona fide intention to get better and reasonable rates from the bidders for the execution of the works and not to show favouritism in favour of any bidder.”
In the case of State of Jharkhand & Others Vs. CWE-
SOMA Consortium, reported in (2016) 14 SCC 172, it has been held as under:-
“21. Observing that while exercising power of judicial review, the Court does not sit as
appellate court over the decision of the Government but merely reviews the manner
in which the decision was made, in [Tata Cellular v. Union of India, (1994) 6 SCC
651] , SCC in para 70 it was held as under: (SCC p. 675) “70. It cannot be denied that
the principles of judicial review would apply to the exercise of contractual powers by
government bodies in order to prevent arbitrariness or favouritism. However, it must
be clearly stated that there are inherent limitations in exercise of that power of
judicial review. Government is the guardian of the finances of the State. It is expected
to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.”
(emphasis in original)
22. The Government must have freedom of contract. In Master Marine Services (P)
Ltd. v. Metcalfe & Hodgkinson (P) Ltd. [Master Marine Services (P) Ltd. v. Metcalfe
& Hodgkinson (P) Ltd., (2005) 6 SCC 138] , SCC in para 12 this Court held as under:
(SCC p. 147) “12. After an exhaustive consideration of a large number of decisions
and standard books on administrative law, the Court enunciated the principle that
the modern trend points to judicial restraint in administrative action. The court does
not sit as a court of appeal but merely reviews the manner in which the decision was
made. 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. The
Government must have freedom of contract. In other words, fair play in the joints is a
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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 principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (See para 113 of the Report, SCC para 94.)”
The Court does not have the expertise to correct the administrative decision as held
in [Laxmikant v. Satyawan, (1996) 4 SCC 208], the Government must have freedom
of contract.
23. The right to refuse the lowest or any other tender is always available to the
Government. In the case in hand, the respondent has neither pleaded nor established mala fide exercise of power by the appellant. While so, the decision of the Tender Committee ought not to have been interfered with by the High Court. In our considered view, the High Court erred in sitting in appeal over the decision of the appellant to cancel the tender and float a fresh tender. Equally, the High Court was not right in going into the financial implication of a fresh tender.”
In the case of Rishi Kiran Logistics (P) Ltd. Vs. Kandla Port Trust and Others, reported in (2015) 13 SCC 233, it has been held as under:-
“43. At this juncture, while keeping the aforesaid pertinent features of the case in mind, we would take note of “the Rules and Procedure for Allotment of Plots” in question issued by Kandla Port Trust. As per Clause 12 thereof the Port Trust had reserved with itself right of acceptance or rejection of any bid with specific stipulation that mere payment of EMD and offering of premium will not confer any right or interest in favour of the bidder for allotment of land. Such a right to reject the bid could be exercised “at any time without assigning any reasons thereto”. Clause 13 relates to “approvals from statutory authorities”, with unequivocal assertion therein that the allottees will have to obtain all approvals from different authorities and these included approvals from CRZ as well. As per Clause 16, the allotment was to be made subject to the approval of Kandla Port Trust Board/competent authority. In view of this material on record and factual position noted in earlier paragraphs we are of the opinion that observations in Dresser Rand S.A. v. Bindal Agro Chem Ltd. [(2006) 1 SCC 751] would be squarely available in the present case, wherein the Court held that: (SCC p. 773, paras 39-40) “39. … a letter of intent merely indicates a party’s intention to enter into a contract with the other party in future. A letter of intent is not intended to bind either party ultimately to enter into any contract. …
40. It is no doubt true that a letter of intent may be construed as a letter of
acceptance if such intention is evident from its terms. It is not uncommon in
contracts involving detailed procedure, in order to save time, to issue a letter of intent
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communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that the detailed contract would be drawn up later. If such a letter is issued to the contractor, though it may be termed as a letter of intent, it may amount to acceptance of the offer resulting in a concluded contract between the parties. But the question whether the letter of intent is merely an expression of an intention to place an order in future or whether it is a final acceptance of the offer thereby leading to a contract, is a matter that has to be decided with reference to the terms of the letter.”
When the LoI is itself hedged with the condition that the final allotment would be made later after obtaining CRZ and other clearances, it may depict an intention to enter into contract at a later stage. Thus, we find that on the facts of this case it appears that a letter with intention to enter into a contract which could take place after all other formalities are completed. However, when the completion of these formalities had taken undue long time and the prices of land, in the interregnum, shot up sharply, the respondent had a right to cancel the process which had not resulted in a concluded contract.”
In the case of Maa Binda Express Carrier & Another Vs. North-East Frontier Railway
& Others, reported in (2014)3 SCC 760, it has been held thus:-
“12. As pointed out in the earlier part of this order, the decision to cancel the tender
process was in no way discriminatory or mala fide. On the contrary, if a contract had
been awarded despite the deficiencies in the tender process serious questions
touching the legality and propriety affecting the validity of the tender process would
have arisen. Inasmuch as the competent authority decided to cancel the tender
process, it did not violate any fundamental right of the appellant nor could the action
of the respondent be termed unreasonable so as to warrant any interference from this Court. The Division Bench of the High Court was, in that view, perfectly justified in setting aside the order [Maa Binda Express Carrier v. Union of India, WP (C) No. 4668 of 2011, order dated 4-2-2012 (Gau)] passed by the Single Judge and dismissing the writ petition.”
15. The law laid down by the Hon’ble Apex Court in the aforesaid judgments is that
the government/its instrumentality being guardian of public finance has the right to
refuse the lowest or any other tender bid or bids submitted by the bidders provided,
its decision is neither arbitrary nor unreasonable as it amounts to violation of Article
14 of the Constitution of India or suffers from malafide or favouritism, and if the same appears to be bona fide to get better and reasonable rates from the bidders for execution of the works. The High Court while exercising power of judicial review does not sit as an appellate court over the decision of the government but merely reviews the decision making process adopted by it. The writ court does not have the expertise to correct the administrative decision. A letter of intent is not meant to bind either party ultimately to enter into any contract.
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- Learned senior counsel for the petitioner has also cited some judgments, which lay down the guidelines for the High Court to exercise the power of judicial review in contractual matters.
- In the case of W.B. SEB Vs. Patel Engineering Co. Ltd., reported in (2001) 2 SCC 451, the Hon’ble Supreme Court has held as under:-
“14. Before proceeding to ascertain answers to the above questions, it will be useful to
bear in mind the principles governing the exercise of power of judicial review by the
High Courts. We consider it unnecessary to refer to cases on the scope of the power of
judicial review of administrative action by the High Court as a three-Judge Bench of
this Court has, after exhaustive consideration of a long line of authorities, succinctly summarised the position and laid down the following principles in Tata Cellular v. Union of India [(1994) 6 SCC 651] : (SCC pp. 687-88, para 94) “(1) The modern trend points to judicial restraint in administrative action.
- The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
- 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.
- 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.”
24. The controversy in this case has arisen at the threshold. It cannot be disputed that
this is an international competitive bidding which postulates keen competition and
high efficiency. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfil
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prequalification alone are invited to bid, adherence to the instructions cannot be given a go- by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules. We have, therefore, no hesitation in concluding that adherence to the ITB or rules is the best principle to be followed, which is also in the best public interest.”
18. In the case of Harminder Singh Arora v. Union of India & Others, reported in (1986) 3 SCC 247, the Hon’ble Supreme Court has held as under:-
“14. It was contended for the appellant that he being the lowest bidder, the
authorities concerned acted arbitrarily in accepting the bid of Respondent 4 which
was higher than that of the appellant. We find considerable force in this contention.
In Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC
489] this Court laid down the law in this respect in the following words: (SCC p. 506,
para 12) “[W]here the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largesse … must be confined and structured by rational, relevant and non- discriminatory standard or norm and if the government departs from such standard or norm in any particular case or cases, the action of the government would be liable to be struck down, unless it can be shown by the government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.”
25. The wide observations made by Hidayatullah, J., was explained in Ramana Dayaram Shetty [(1979) 3 SCC 489 : AIR 1979 SC 1628 : (1979) 3 SCR 1014] . Bhagwati, J. as he then was, speaking for the court observed: (SCC pp. 514-15, para 23) “Though the language in which this observation is couched is rather wide, we do not think that in making this observation, the court intended to lay down any absolute proposition permitting the State to act arbitrarily in the matter of entering into contract with third parties. We have no doubt that the court could not have
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intended to lay down such a proposition because Hidayatullah, J. who delivered the judgment of the court in this case was also a party to the judgment in Rashbihari Panda v. State of Orissa [(1969) 1 SCC 414] which was also a decision of the Constitution Bench, where it was held in so many terms that the State cannot act arbitrarily in selecting persons with whom to enter into contracts. Obviously what the court meant to say was that merely because one person is chosen in preference to another, it does not follow that there is a violation of Article 14, because the government must necessarily be entitled to make a choice. But that does not mean that the choice be arbitrary or fanciful. The choice must be dictated by public interest and must not be unreasoned or unprincipled.”
19. In the case of Union of India & Others Vs. Dinesh Engineering Corporation & Another, reported in (2001) 8 SCC 491, the Hon’ble Supreme Court has held as under:-
“15. Coming to the second question involved in these appeals, namely, the rejection of
the tender of the writ petitioner, it was argued on behalf of the appellants that the Railways under clause 16 of the Guidelines was entitled to reject any tender offer without assigning any reasons and it also has the power to accept or not to accept the lowest offer. We do not dispute this power provided the same is exercised within the realm of the object for which this clause is incorporated. This does not give an arbitrary power to the Railways to reject the bid offered by a party merely because it has that power. This is a power which can be exercised on the existence of certain conditions which in the opinion of the Railways are not in the interest of the Railways to accept the offer. No such ground has been taken when the writ petitioner’s tender was rejected. Therefore, we agree with the High Court that it is not open to the Railways to rely upon this clause in the Guidelines to reject any or every offer that may be made by the writ petitioner while responding to a tender that may be called for supply of spare parts by the Railways. Mr Iyer, learned Senior Counsel appearing for EDC drew our attention to a judgment of this Court in Sterling Computers Ltd. v. M & N Publications Ltd. [(1993) 1 SCC 445] which has held: (SCC p. 455, para 12) “Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice Holmes, that courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of ‘play in the joints’ to the executive.”
20. In the aforesaid cases, the Hon’ble Supreme Court has held that the discretion of the government in the matter of grant of largesse must be confined and structured by rational, relevant and non- discriminatory standard or norm and if the government departments make departure from such standard or norms in any particular case or cases, the action of the government would be liable to be struck down, unless it is shown by the government that such departure was not arbitrary, but
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was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. If the discretion is exercised by the government in bonafide manner, although not strictly following the norms laid down by the courts, such decisions are not to be interfered with.
- In view of the aforesaid judicial principle, the issue before this Court is as to whether there is any arbitrariness, unreasonableness, mala fide and biasness in the decision making process of the respondent authorities while cancelling the tender in question so as to warrant any interference with the same.
- In the case in hand, the primary contention raised by the learned senior counsel appearing on behalf of the petitioner is that the petitioner was selected by the transparent bidding process and being L1 bidder it was entitled to be awarded the contract. It has been submitted that the impugned order of cancellation of tender has been passed in an arbitrary manner as the cancellation notice does not explain the circumstances leading to such cancellation which was required to be mandatorily given in the tender cancellation notice in view of the provision of Clause 35 of the ITB. Since there was no explanation in the cancellation notice, the same cannot be supplemented by any subsequent pleading/action.
- In support of the aforesaid contention, learned senior counsel for the petitioner puts reliance on the judgment of the Hon’ble Supreme Court rendered in the case of Mohinder Singh Gill & Another Vs. Chief Election Commissioner, New Delhi & Others, reported in (1978) 1 SCC 405, in which it has been held as under:-
“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 [Commr. of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16] :
“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 his 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.
24. Learned senior counsel for the petitioner has further relied upon the judgment of the Hon’ble Supreme Court rendered in the case of State of Punjab Vs. Bandeep Singh, reported in (2016) 1 SCC 724, wherein the ratio laid down in the case of Mohinder Singh Gill (Supra.) has been followed and it has been held that there can be no gainsaying that every decision of an administrative or executive
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nature must be composite and self-sustaining one, which should contain all the reasons prevailing on the authority taking the decision to arrive at his conclusion. It is beyond cavil that any authority cannot be permitted to travel beyond the stand adopted and expressed by it in the impugned action.
25. Since the learned senior counsel for the petitioner has put emphasis on Clause 35 of the ITB, the said provision is reproduced hereinbelow for ready reference:-
“35 CANCELLATION OF TENDER:
Any tender published or e-Procurement portal must be concluded to its logical end
i.e. either “Award of Contract” or “Cancellation of Tender” or “Retender”.
The Tender Cancellation Notice must contain the details of the circumstances leading
to cancellation of tender.
The Cancellation of Tender on the e-Procurement portal can be done by way of
creation and publication of corrigendum. However, since Cancellation of Tender, in
true sense, is not a Corrigendum to NIT, the Tender Cancellation Notice will be uploaded only on the e-Procurement portal https://coalindiatenders.nic.in.
All the details of technical bid and price bid will be kept preserved in the archives for auditing purposes and the same can be accessed with special authorization. The IP address of all the bidders who has participated in the bid along with timing and date will also be kept preserved in the system.”
- Reverting back to the present case so as to appreciate the contention made on behalf of the petitioner. It transpires from the record that after completion of RAP, it was observed by the respondents that the amount shown in the BOQ Summary details before RAP mismatched with the amount shown in the BOQ submitted by the bidders during bid submission in RAP, as generated by portal after completion of RAP and downloaded by the respondent-BCCL from the system. When a query was made from NIC, it was reported that the GST row was taken as a line item and thus generated the comparative chart by adding the GST amount also. Thereafter, the tender committee de l i b e r a t e d o n t h e i s s u e a n d f o u n d t h a t O m S h a r d a L o g i s t i c s P v t . L t d . h a d q u o t e d Rs.164,50,51,160/- which was only 7.27% more than the estimated cost whereas a higher value was set as start bid price for initiation of RAP, however, the said bidder did not come forward to question the said anomaly. The bid of petitioner was declared as L1 due to technical error in the system and since the bid of all the bidders were higher than the estimated cost fixed by the respondent authorities, in view of Clause 9B(4) of the NIT, estimate rate + 10% including GST i.e. Rs.168,69,92,897/- was fixed as start bid price for the initiation of RAP. Had there been no error in the system, the start bid price of the RAP would have been Rs.164,50,51,160/-.
- The learned counsel appearing on behalf of the respondent-BCCL has invited the attention of this court to the deliberations of the tender committee available in the note sheet appended to the counter affidavit dated 09.09.2020. The said deliberation is reproduced herein below:-
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Sl. NIT provisions Tender process as it Remark
No. happened Commit
1. Clause no.9B4 of The comparative chart As per
NIT/TD(P/C/106) (P/C/144) generated GST is
System displays L1 cost to before RAP showed the zero,
company price automatically in lowest amount quoted as Credit
auction creation form and allows Rs.174,96,63,042/- amount
TIA to edit the value as ‘start bid’ (Rupees One Seventy Four displa
price. For the time being L1 price Crore Ninety Six Lakh Sixty Rs.174
or approved estimated/justified Three thousand and forty (Rupee
price (only estimated price in two only) i.e 14.086% Four C
case of mining tenders)+ 10%+ above estimated cost. Lakh
applicable GST including GST Accordingly, start bid price Thousa
compensation cess, if any, taking was set for RAP at Only) into consideration Input tax Rs.168,69,92,897/- i.e chart
credit, if applicable whichever is estimate +10% as per inclus
lower will be the start bid price clause no.9B4 of NIT/TD. error
for tenders for works and Tender
services
fixing
Clause no.20.1 of such t
NIT/TD(P/C/92)
was
Evaluation and comparison of Rs.168
Bids will be done by system (Rupee
online. The bidder shall also Crore comply with system requirement lakh
as explained wherever in e- Thousa
tender notice/tender document. and Ni
Bid evaluation shall be done after Seven taking into consideration overall +10%. quoted price by the bidder and that,
effect of Goods and Services Tax in Cla
(GST), GST compensation cess 20.1 w
etc. as applicable. L1 will be Logist
decided on the basis of cost to quoted
company.
164,50
One Si
Fifty
Thousa
and Si
2. Clause no. 9 B 12 of NIT/TD: The lowest amount quoted As per
(P/C/105) as per the comparative clause
If a bidder does not submit his chart (e-Auction) placed at LOGIST
bid P/C/163 is Rs. didn’t
in the Reverse Auction, the price 167,09,92,897/ (Rupees howeve
quoted by him in the price bid One Sixty Seven Crore Nine Login
shall be considered as the lakh Ninety Two Thousand the bi
valid price of that bidder. The Eight Hundred and Ninety and lo
status of Seven Only) quoted by the RA
the bidder (L1, L2 etc) shall Devparabha Construction quoted
be evaluated considering either Pvt. Ltd. after participation Rs.
the bid price submitted in in RAP. Om Sharda (Rupee
Reverse auction or the price Logistics Pvt. Ltd. has Crore
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submitted a bid price of Rs. One
quoted in the price bid, 164,50,51,160 (Rupees Hundred and whichever is lower. One Sixty Four Crore Fifty will remain
Lakh fifty one thousand after RAP an
one hundred and sixty empowered to
Only) during bid status of L1
submission (i.e before Tender-cum-a
RAP) and didn’t participate process. in RAP however as per user
login details at P/C/334 the
bidder was online and
logged in throughout the
RAP.
3. Clause no, 9 B 14 of NIT/TD: The chronologically last bid The bid pric
(P/C/105) electronically submitted by Om Sharda Lo
Only the chronologically last bid bidders participated in Ltd. du
submitted by the bidder till the Tender-cum-Auction submission i
end of the auction shall be process is as below: price among
considered as the valid price bid 1. Om Sharda Logistics Pvt. submitted by
of that bidder. Any bid submitted LTd. Rs.164,50,51,160/- electronical
earlier by the bidder prior to (Rupees One Sixty Four
submission of his last bid will not Crore Fifty Lakh Fifty One be considered as the valid Thousand One hundred price bid. and Sixty Only) Clause no.9B17 of NIT/TD: 2. Devprabha Construction (P/C/105) Pvt Ltd Rs. 167,09,92,897 All the electronic bids (Rupees One Sixty Seven submitted during the reverse Crore Nine lakh Ninety Two auction process shall be legally Thousand Eight Hundred binding on the bidder. The and Ninety Seven Only) chronologically last bid submitted 3. AKA LOGISTICS by the bidder till the end of the PRIVATE LIMITED Rs.
auction will be considered as the 167,89,92,897/ (Rupees
valid price bid offered by that One Sixty Seven Crore
bidder and acceptance of the Eighty Nine lakh Ninety
same by BCCL will form a binding TWo
contract between BCCL and the Thousand Eight Hundred
bidder for entering into contract. and Ninety Seven Only)
4. BLA PROJECTS PVT.
LTD. – Rs. 175,65,38,360/
(Rupees One Seventy Five
Crore Sixty Five lakh Thirty
Eight Thousand Three
Hundred and Sixty Only)
4. Clause no. 9 B 18 of NIT/TD: Devprabha Construction The suo-moto
(P/C/105) Pvt. Ltd. has offered two be accepted
Conditional discounts shall not be suo moto rebates after the L1 bidde
considered. If a bidder offers a conclusion of the Reverse unilaterally
discount unilaterally after Auction Process through discounts ca
submission of bid, the discount the following considered f
shall not be considered for communication of offers.
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evaluation of offers but shall be Letter No.DCPL/CMC/2019- As deliberat
availed if order is placed on such 20/01 Dt: 22.02.2020 the bid pric
tenderer. (P/C/261-264) which was Om Sharda Lo
clause no. 20.2 of NIT/TD: —-if received in the office of GM Ltd. is the
the L-1 bidder offers suo moto (CMC) vide diary no. 592 electronical
rebate on his quoted rates after dt:24.02.2020. during Tender Reverse Auction, it will be Letter no. Cum Reverse acceptable… DCPL/CMC/2019- 20/02 Auction Process.
Dt: 25.02.2020 (P/C/265- Therefore th
268) which was received in rebates
the office of GM (CMC) vide Devprabha Co
diary no 616 Private limi
Dt: 25.02.2020. acceptable. The bidder has mentioned moto rebate
in the letter that, “in order used for eva
to obtain the contract and tender. In v
in view with good relations Om Sharda Lo
prevailing with BCCL” they Ltd. remains
are offering suo-moto quoted bidde
rebate. RAP.
5. Clause no. 34 of NIT/TD: E-mail was sent to NIC to There’s no p
REVOCATION OF TENDER enquire the possibility of Revocation o
PROCESS: (P/C/87) Revocation till the stage of per clause n
There may be situation when the before RAP on Dt: NIT/TD, conf
decision of Tender Committee 12.03.2020 Service Prov
may have to be changed NIC replied on subsequently on account of a Dt.20.03.2020 stating the
Court’s verdict. Also, there following (P/C/284):
may Circumstances when online Quote–
evaluation of tender is not done As per our system, the
correctly due to mistake by the revocation is possible till
Evaluator or due to technical technical evaluation stage
error in the system, which may in Non-ATP tenders.
lead to cancellation of tender. In In this case, the financial
order to avoid the cancellation of opening and the auction
tender in such cases, the tender also got completed and the
process needs be reverted back overall comparative chart is
to appropriate stage (i.e. bid also generated. Now at this Opening stage etc.) to comply stage revocation is not
with the possible.
court’s verdict or to rectify the Unquote—.
error committed by the
Evaluator. This provision in the e-
procurement system has been
introduced with an objective to
abide by the Court’s verdict or to
ensure that the tender process
should not suffer due to any
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mistake committed by an
individual or due to any technical
error in the system.
Revocation of tender process
back to Technical-bid opening
stage or Price-bid opening stage
from an advanced stage shall be
done under the following
circumstances: a. To comply with
the directives of Hon’ble Court of
Law.
b. If the evaluator makes a
mistake in online evaluation of
tender, which is not in line with
the Tender Committee decision.
c. If there is a error in the
online evaluation of tender due to
technical error in the system.
Revocation of Tender process will
be done with the specific
approval of the concerned
Director.
In all such cases the Tender
Revocation Notice must contain
the details of the circumstances
leading to revocation of tender
process.
The Revocation of Tender on the
e-Procurement portal can be
done by way of creation and
publication of corrigendum.
However, since Revocation of
tender, in true sense, is not a
Corrigendum to NIT, the Tender
Revocation Notice will be
uploaded only on the e
Procurement portal
IN case of revocation of Tender
at any stage the auto-refund of
EMD may not work properly and
in such case it may be required
that tender Inviting Authority
to arrange refund of EMD
through conventional system of
refund of EMD.
28. It is further evident that an opinion was also sought by the respondents from learned Additional Solicitor General, Government of India, who, while answering the question as to whether the BCCL
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should cancel the tender as provided in Clause 35 of ITB, since the RAP could not be conducted as per the provisions of the NIT or what would be the appropriate way to proceed, has opined as under:-
“In the entire tender process there are various other matters, specifically referred to above in the body of the opinion including there being no complaints, prayer for refund of EMD, by Om Sharda, error cannot be attributed to the L1. In the circumstances the reverse auction process was initiated on an erroneous set of price as has been factually established and there is undoubtedly a power in the competent authority to cancel the entire tender process and go for a fresh one but before doing so, as is pointed out by me in the Opinion, other things as mentioned herein above have to be necessarily considered by the Tender Committee and the competent authority including the provisions of Clause 34, the Opinion of NIC and the equities which have arisen in the matter. Equities and legitimate expectation which have arisen in the matter on declaration of L1 in RAP.
Of course needless to say the competent authority will also have to consider primarily
the interest of the querist, fairness compliance with the legal requirements of NIT,
revenue interest of the querist as also the time taken for the tender process and the
time that will be required for the new tender and the effect and implications of this.
With all this whether or not to exercise such powers or whether to cancel the tender
or whether to go ahead with the Ll is all a matter fully within the domain of the tender committee and the competent authority of the queriest. Having regard to these parameters of:
That there was erroneous setting of bid price for reverse auction.
The actual price quoted by Om Sharda at the time of submission of bid was not known to anyone.
(c) The declaration of L1 by the system, further that the error which has occurred, is
not attributable to the party declared as L1 by the system after the conclusion of RAP
(d) No objection has been raised by any bidder with respect of setting the bid price
and in the contrary Om Sharda has applied for refund of EMD. It is seen from the aforesaid that save and except for the error of erroneous setting of Bid price for reverse auction, the tender process has by far been transparent and fair and no one has complained that it is rigged with malafides.
(e) Interest of the Querist including the revenue aspect, time taken for tender process, efforts required for new tender process and general interest of the querist.
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T h u s , c o n s i d e r i n g a l l t h e s e v a r i o u s a s p e c t o f t h e m a t t e r t h e t e n d e r committee/competent authority of querist will have to take a reasoned conscious decision which of course will include primarily the revenue and other interest of the querist in this regard.”
29. The tender committee having received the aforesaid opinion deliberated on the said issue and observed as under:-
“1. The start bid price which was set after taking into consideration the lowest quoted
amount as per comparative chart displayed before RAP is not as per provisions of
NIT as pointed out in point no. 1 of Table II.
- There was a procedural flaw in the fixing of Start Bid Price and subsequently in the entire tendering process.
- Om Sharda Logistics Pvt. Ltd. has the lowest quoted electronic bid as on date.
- Devprabha Construction Pvt. Ltd. has offered two suo moto rebates after
conclusion of the Reverse Auction Process, the suo-moto rebate can be accepted only
from the L1 bidder and the unilaterally offered discounts cannot be considered for evaluation of offers.
5. The actual Lowest Quoted Amount before RAP i.e. Rs. 164,50,51,160 (Rupees One
Sixty Four Crore Fifty lakh Fifty One Thousand One Hundred and Sixty Only) quoted
by Om Sharda Logistics Pvt. Ltd. was not known to any bidder or Tender committee
till after completion of RAP.
- Since the above amount was not disclosed and the RAP was conducted on a different start bid price it can be concluded that there was no fair competition in the tender and the final rate after auction cannot be considered market driven.
- Award of contract to either Dev Prabha Construction Pvt. Ltd (system declared L1
of Reverse Auction) or Om Sharda Pvt. Ltd. (Ll as per last electronically submitted
bid) may result in litigation as the lowest quoted rate of Rs. 164,50,51,160/- (Rupees
One Sixty Four Crore Fifty lakh Fifty One Thousand One Hundred and Sixty Only)
was not known to other bidders during the RAP and the quote of Om Sharda
Logistics Pvt. Ltd. is only 7.27% above estimate (which should have been start bid
price for RAP), hence it can be concluded that the process of Reverse Auction could
not be conducted correctly as per provisions of NIT.
8. Further, as confirmed by NIC that there’s no possibility, of Revocation of Tender as
per clause no. 34 of NITY TD; and further taking into consideration of the opinion of
L d . A S G , i t i s p r o p o s e d t o c a n c e l t h e s u b j e c t t e n d e r ( T e n d e r I D n o . 2020_BCCL_164165_1).
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9. Award of work to Om Sharda Logistics Pvt. Ltd. will not be proper as their quoted
rate was not known to other bidders. And award of work to the system declared L1
after RAP is also not prudent as there exists a lower bid submitted online.
10. Om Sharda Logistics Pvt. Ltd. as per User Login Details at P/C/334 although was
logged in throughout the RAP didn’t alert or complain during or after completion of
RAP (till date) which creates an ambiguity and as a result the entire process doesn’t appear to be free flowing.”
- Finally, the members of the tender committee recommended to cancel the tender in question with due approval of the Chairman-cum- Managing Director of BCCL. No doubt, the reason for cancellation of tender was mentioned in the impugned notice, however, the circumstances leading to such cancellation was not mentioned in the same. I am of the view that though the impugned cancellation order dated 17.06.2020 did not record the circumstances leading to cancellation of tender, the said fact itself is not such a strong ground to vitiate the entire action. In the given factual matrix, it is not a case where the reason has been supplemented by subsequent action of the respondents or by way of filing counter affidavit, rather the reason was already recorded prior to issuance of the cancellation notice, which was available in the file of the respondents. The judgments cited by the learned senior counsel for the petitioner to contend that the cancellation notice has vitiated having been issued without disclosing any reason are not applicable in the facts and circumstances of the present case.
- The other limb of argument of the learned senior counsel for the petitioner is that if there was any technical error in the system, the respondents should have proceeded from the stage of opening of the RAP in view of Clause 34 of the ITB and should not have cancelled the tender.
- To appreciate the said contention, it would be appropriate to go through Clause 34 of the ITB, which is reproduced herein below:-
“34 REVOCATION OF TENDER PROCESS:
There may be situation when the decision of Tender Committee may have to be changed subsequently on account of a Court’s verdict. Also, there may be circumstances when online evaluation of tender is not done correctly due to mistake by the Evaluator or due to technical error in the system, which may lead to cancellation of tender.
In order to avoid the cancellation of tender in such cases, the tender process needs be reverted back to appropriate stage (i.e. bid opening stage etc.) to comply with the Court’s verdict or to rectify the error committed by the Evaluator. This provision in the e-Procurement to system has been introduced with an objective to abide by the court’s verdict or to ensure that the tender process should not suffer due any mistake committed by an individual or due to any technical error in the system.
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Revocation of Tender process back to Technical-bid opening stage or Price-bid opening stage from an advanced stage shall be done under the following circumstances:
a. To comply with the directives of Hon’ble Court of Law. b. If the Evaluator makes a mistake in online evaluation of tender, which is not in line with the Tender Committee decision.
c. If there is a error in the online evaluation of tender due to technical error in the system.
Revocation of Tender process will be done with the specific approval of the concerned Director.
In all such cases the Tender Revocation Notice must contain the details of the circumstances leading to revocation of tender process.
The Revocation of Tender on the e-Procurement portal can be done by way of
creation and publication of corrigendum. However, since Revocation of Tender, in
true sense, is not a Corrigendum to NIT, the Tender Revocation Notice will be uploaded only on the e-Procurement portal https://coalindiatenders.nic.in.
In case of revocation of Tender at any stage the auto-refund of EMD may not work properly and in such case it may be required that Tender Inviting Authority to arrange refund of EMD through conventional system of refund of EMD.”
- On bare perusal of Clause 34 of ITB, it appears that the same speaks of three situations. First is that the Tender Committee is required to change its decision in compliance of a court’s verdict. The second situation is that where the mistake of evaluator in online evaluation of tender has appeared and the third situation is that if there has been technical error in the system while making online evaluation of tender. All these three situations may lead to revocation of tender. For all these eventualities, the tender committee has been instructed to avoid the cancellation of the tender process, rather it needs to be reverted back to appropriate stage to cure such mistake or to comply with the court’s verdict. The objective for introducing the said provision in the ITB appears to be intended to abide by the court’s verdict or to ensure that the tender process should not suffer in entirety due to any mistake committed by an individual or due to any technical error in the system.
- In the present case, the tender committee in order to comply Clause 34 of ITB sought opinion of NIC with respect to the possibility of revocation of tender. The NIC replied the query of the tender committee in following manner:-
“As per our system, the revocation is possible till technical evaluation stage in Non-ATP tenders. In this case, the financial opening and the auction also got completed and the overall comparative chart is also generated. Now at this stage
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revocation is not possible.”
- As would be evident, the NIC replied that the revocation was not possible. Moreover, L1 bidder had requested for withdrawal of security deposit and thus it was not possible for the respondents to start bidding process from the stage of RAP. I find substance in the argument of the learned counsel for the respondents that the decision to cancel the tender was taken in a situation where revocation was found not possible and the cancellation of tender was in the interest of the respondents as well as in public interest.
- One of the contentions of the learned senior counsel for the petitioner is that the petitioner offered suo moto rebate twice in view of clause 20.2 of the ITB and now the price offered by the petitioner stands at Rs.162,90,34,128/- which is also lower than the price quoted by Om Sharda Logistics Pvt. Ltd. and as such it was in the interest of the respondents as well as in public interest to grant the tender in favour of the petitioner.
- The learned counsel appearing on behalf of the respondents has countered the said argument and has submitted that as per sub-clause (12) of Clause 9 of the NIT, if a bidder does not submit his bid in the reverse auction, the price quoted by him in the price bid shall be considered as the valid price of that bidder. The status of the bidder (L1, L2 etc.) has to be evaluated considering either the bid price submitted in the reverse auction or the price quoted in the price bid, whichever is lower. It has further been submitted that Om Sharda Logistics Pvt. Ltd. quoted Rs.164,50,51,160/- in the price bid, however, it did not participate in the RAP and as such the price quoted by it in the price bid was be treated as its valid price and thus Om Sharda Logistics Pvt. Ltd. was the L1 bidder and the suo moto rebate offered only by L1 bidder was acceptable. As such, the rebate offered by the petitioner was not considered by the respondents for award of contract. Om Sharda Logistics Pvt. Ltd., which was actual L1 bidder, had itself requested for return of the earnest money and since the RAP price of the petitioner was 167,09,92,897/-, which was more than Om Sharda Logistics Pvt. Ltd., the acceptance of the bid of the petitioner was not in the interest of the respondents.
- The learned senior counsel for the petitioner has also contended that the impugned decision taken by the respondent authorities suffers from malafide as they want to favour some unknown/non- participants in general and Om Sharda Logistics Pvt. Ltd. in particular whom the respondents want to accommodate by way of adopting wrongful method. I do not find any substance in the said argument of the learned senior counsel for the petitioner, since the said tender has already been cancelled and if a fresh tender is floated, the claim of all the tenderers will be considered in view of the terms and conditions of the new tender. Such hypothetical argument of the learned senior counsel for the petitioner cannot be accepted. Moreover, the allegation of malafide levelled against the respondents has not sufficiently been proved by the petitioner by bringing on record appropriate evidence. It is a settled law that it is not only sufficient to plead the allegation of malafide, rather the same is required to be proved by the person who alleges it.
- The respondents have filed supplementary counter affidavit dated 23.11.2020 to suggest that the respondent company, on cancellation of the tender, has returned all the earnest money to the respective tenderers and now they have to recast the estimate in view of some radical changes in the
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M/S. Dev Prabha Construction Pvt. … vs The Bharat Coking Coal Limited on 18 February, 2021
scope of work and modality of floating tender and as such, the tender may be initiated after considering all the parameters and compliances of all the reports. The learned senior counsel for the petitioner has refuted the said stand of the respondents and has submitted that the petitioner never demanded return of earnest money, rather it has made objection to such online return of the earnest money. It has further been submitted that no decision of the competent authority has been annexed by the respondents to substantiate the stand taken in the supplementary counter affidavit dated 23.11.2020, which has, in fact, been taken just to frustrate the claim of the petitioner. I am of the view that the issue as to whether owing to some radical changes in the scope of work and modality of floating tender, the respondents are required to float a new tender is not of much relevance in the present case as the petitioner has failed to prove the primary issue that the decision making process of the respondent authorities suffered from arbitrariness, unreasonableness or malafide.
- The learned senior counsel for the petitioner has also contended that Om Sharda Logistics Pvt. Ltd. had wrongly quoted the GST rate and it never applied for correction of the said error and as such the respondents ought to have rejected its bid, however, arbitrarily treated it as L1 bidder and ultimately cancelled the tender. I am of the view that the said contention is not relevant in the facts and circumstance of the present case. It is not the case here that the bid of Om Sharda Logistics Pvt. Ltd. has been accepted by the respondents in spite of violation of any of the essential terms and conditions, rather it appears that the tender has been cancelled after due deliberations of the tender committee on the issue as to whether it was possible to go for revocation of the tender in view of clause 34 of the ITB. It is a settled law that even if some procedural aberration or error in assessment or prejudice to a tenderer is seen, the writ court should not interfere in the matter if the action of the respondents is found to be bonafide and taken in the public interest.
- I am of the considered view that the power of cancellation of tender was always with the respondents in view of Clause 35 of the ITB and since the revocation of tender process as provided in Clause 34 of ITB was not possible, the decision of the tender committee to cancel the same after due deliberation does not suffer from any arbitrariness, illegality, unreasonableness or malafide requiring any interference of this court under its extraordinary writ jurisdiction.
- The writ petition being devoid of merit is, accordingly, dismissed.
(Rajesh Shankar, J.) Sanjay/AFR
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