M/S Dev Prabha Construction Pvt. ... vs The Bharat Coking Coal Limited on 9 June, 2021
Jharkhand High Court
M/S Dev Prabha Construction Pvt. … vs The Bharat Coking Coal Limited on 9 June, 2021
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IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No.94 of 2021
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M/s Dev Prabha Construction Pvt. Ltd. having its registered office at 2nd Floor Dev Villa, behind Radha Swami Arcade, Saraidhela, P.O. & P.S. – Saraidhela, District – Dhanbad, through its authorized signatory Vikash Kumar Singh, aged about 33 years, S/o Ram Prasad Singh, R/o Adarsh Nagar, Simla Behal, Jharia, Dhanbad, P.O. & P.S. – Jharia, District – Dhanbad.
… … Appellant
Versus
- The Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, P.O. Koyala Bhawan, P.S. – Saraidhela, District – Dhanbad, through its Chairman- cum-Managing Director, Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, P.O. – Koyla Bhawan, P.S. – Saraidhela, District – Dhanbad.
- The Chairman-cum-Managing Director, Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, P.O. – Koyla Bhawan, P.S. – Saraidhela, District
– Dhanbad.
- The Director Technical (Operation), Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, P.O. – Koyla Bhawan, P.S. – Saraidhela, District – Dhanbad.
- The General Manager (C.M.C), Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, P.O. – Koyla Bhawan, P.S. – Saraidhela, District – Dhanbad.
- The National Informatics Centre (NIC), through its Authorized officer, Bharat Coking Coal Limited, having its registered office at Koyla Bhawan, P.O. – Koyla Bhawan, P.S. – Saraidhela, District – Dhanbad.
… … Respondents
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CORAM : HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD ——
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M/S Dev Prabha Construction Pvt. … vs The Bharat Coking Coal Limited on 9 June, 2021
For the Appellant : Mr. Ajit Kumar, Senior Advocate Ms. Aparajita Bhardwaj, Advocate For the Respondent BCCL : Mr. Amit Kumar Das, Advocate
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ORAL JUDGMENT Order No. 02 : Dated 9th June, 2021 With the consent of the parties, hearing of the matter has been done through video conferencing and there is no complaint whatsoever regarding audio and visual quality.
- The instant intra-Court appeal is under Clause 10 of the Letters Patent directed against the order/judgment dated 18.02.2021 passed by learned Single Judge of this Court in W.P.(C) No. 1757 of 2020 whereby and whereunder the writ court has declined to interfere with the tender cance l lation order as contained under Reference No . BCCL / CMC / F – e – NIT /Coal/Tptn38/Bastacolla/2020 dated 17.06.2020 whereby the Notice Inviting Tender under Reference No.BCCL/CMC/F- e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020 has been cancelled.
- The brief facts of the case which need to be enumerated herein, read as under :-
The writ petitioner is engaged in the business of executing various kinds of contractual works including mining and transportation. The respondent BCCL has come out with an online open tender vide NIT no. BCCL/ 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 writ petitioner participated in the said tender process 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.
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 Coal India Limited (CIL). The writ 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 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 (in short RAP) was started. During the Reverse Auction Process, only two bidders, namely, AKA Logistics Pvt. Ltd. and the writ petitioner participated and quoted their respective prices at Rs.167,89,92,897.00 and Rs.167,09,92,897.00, respectively, and thus the writ petitioner was declared as L-1.
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The writ petitioner, after being declared L-1, 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 writ petitioner stood at Rs.162,90,34,128/- only against the original declared L-1 price of the writ petitioner, which was Rs.167,09,92,897/.
The award of the contract could not be issued due to imposition of nationwide lockdown with effect from 25.03.2020 and suddenly, the writ 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 t o canc e l the tender in que s t i o n , w h i c h was n o t i f i e d u n d e r R e f . N o . B C C L / C M C / F – e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020 on account of technical reasons, being aggrieved with the same, the writ petitioner approached before the writ court.
The plea was taken before the writ court on behalf of the writ petitioner that the writ petitioner having been declared as L-1, after a transparent bidding process/reverse auction process, is entitled to be awarded the contract in question taking into consideration that one of the bidders, namely, M/s Om Sharda Logistics Pvt. Ltd. had decided to remain out of the fray.
The further plea of the writ petitioner was that the tender has been cancelled on the ground of mere mistake or technical error in the reverse bidding process as such 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 hence the cancellation of tender could not have been resorted to by the respondents as per the terms and conditions of NIT itself.
It has further been 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 and 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.
It was further argued on behalf of the writ petitioner before the writ court 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 of ITB of the NIT.
The respondent BCCL has taken the plea before the writ court that the Notice Inviting Tender since is an invitation to offer and merely because the writ 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.
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It has further been argued that the comparative chart generated before Reverse Auction Process 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 Reverse Auction Process 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 Reverse Auction Process and the figure of start bid price came to Rs.1,67,09,92,897/-.
After completion of Reverse Auction Process, 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 Reverse Auction Process was in tune with BOQ summary details generated by system after Reverse Auction Process, whereas the amount shown in BOQ Summary details before Reverse Auction Process mismatched with the amount shown in the BOQ submitted by the bidders during Reverse Auction Process, as generated by portal after completion of Reverse Auction Process.
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 cause of the error. It was advised that while designing new BOQ, it should be tested in the demo site and then only it should be put on live site.
- o far as this case is concerned, it has been advised by the NIC that 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.
- he 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 Reverse Auction Process, however, it neither complained when a higher value (estimated cost + 10%) was set as start bid price nor agitated even after conclusion of Reverse Auction Process declaring the petitioner as L-1 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.
The tender committee found that the writ petitioner was declared as L-1 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 anomaly and after elaborate discussion made on the issue decision has been taken by the competent authority for cancellation of the tender process.
Learned Single Judge, after taking into consideration the rival submissions advanced on behalf of the parties, has dismissed the writ petition against which the present intra- court appeal has been
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filed.
4. Mr. Ajit Kumar, learned senior counsel appearing for the appellant/writ petitioner has submitted before this Court by taking aid of the provision of Clause 34 of ITB of NIT which provides that in case of error in the online evaluation of tender due to technical error in the system the process for revocation of tender ought to have been initiated instead of cancellation of tender as provided under Clause 34 of ITB of NIT.
It has further been submitted that the order passed pertaining to cancellation of tender process since is of one line, the same cannot be said to be a reasoned order, however, the reason has been explained in the counter affidavit which is not permissible in view of law laid down by Hon’ble Apex Court in Mohinder Singh Gill & Another Vs. Chief Election Commissioner, New Delhi & Others, [(1978) 1 SCC 405].
The further argument has been advanced of mala fide committed on behalf of the respondents in cancelling the tender process in order to help the third party.
5. Per contra, Mr. Amit Kumar Das, learned counsel appearing for the respondent BCCL, has submitted that there is no error in the decision taken by the competent authority for cancellation of tender process as because it has been found that the revocation is possible till technical evaluation stage in Non-ATP tenders but in this case, the financial opening and the auction also got completed and the overall comparative chart is also generated and as such, the revocation, at this stage, is not possible in view of the provision as contained under Clause 34 of ITB of NIT and therefore, it cannot be said that the decision of the authority is based upon any extraneous reason and to support any
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third party.
It has further been argued that so far as the argument advanced on behalf of the learned counsel for the appellant that due to want of reason in the impugned order of cancellation process, the said decision is not sustainable in the eyes of law is concerned, the reason has been explained to the effect that due to technical error the tender process has been found to suffer from infirmity and as such, it cannot be said that there is no reason assigned in the impugned decision.
Further, so far as the allegation of mala fide is concerned, it has been submitted by Mr. Das that making allegation of mala fide is very easy but proving it is very difficult. No specific allegation of mala fide against any officer has been made and further, mala fide against whom and for whose benefits, has not been disclosed, however, orally it has been argued by learned senior counsel appearing for the appellant/writ petitioner that the entire tender process has been cancelled in order to aid M/s Om Sharda Logistics Pvt. Ltd. but very surprisingly M/s Om Sharda Logistics Pvt. Ltd. has not been impleaded as party along with the authorities against whom the allegation of mala fide has been made, therefore, the argument alleging mala fide against the respondents does not stand legally and the learned Single Judge, after taking into consideration the fact that merely
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becoming L-1 in tender process does not create any right, therefore, the decision taken for cancellation of tender has been declined to be interfered with which suffers from no infirmity.
- We have heard the learned counsel for the parties, gone across the materials available on record including the annexures appended thereto.
- Before going into the legality and propriety of the impugned order, this Court deems it fit and proper to refer certain admitted facts of this case as has been pleaded by the parties.
The respondent BCCL has come out with an online open tender vide NIT no. BCCL/ 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 writ petitioner participated in the said tender process and the bid of one of the bidders, namely, Dhansar Engineering Co. Pvt. Ltd. was declared as rejected in the technical evaluation having quoted the highest value. The writ petitioner as well as three other bidders qualified in the technical evaluation of the bids which
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was informed through e-mail communication dated 21.02.2020 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 P vt . L td . a n d t h e w r i t p e t i tio n er p arti c i p a t e d and quoted their r e s p e ctive prices at Rs.167,89,92,897.00 and Rs.167,09,92,897.00, respectively, and thus, the writ petitioner was declared as L-1. The writ petitioner, after being declared L-1, 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 writ petitioner stood at Rs.162,90,34,128/- only against the original declared L-1 price of the writ petitioner, which was Rs.167,09,92,897/.
The award of contract could not be issued due to imposition of nationwide lockdown with effect from 25.03.2020 and suddenly, the writ petitioner could know about the cancellation order intimating it vide reference no.BCCL/CMC/F-e-NIT/Coal/Tptn38/Bastacolla/2020 dated
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17.06.2020 uploaded through the office of the respondent no.4, whereby the said authority decided to c a n c e l t he t e n d e r i n q u e s t i o n , w h i c h w a s n o t i f i e d u n de r R ef . N o . B C C L / C M C / F – e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020 on account of technical reasons and being aggrieved with the same, the writ petitioner approached before the writ court by invoking the jurisdiction conferred to this Court under Article 226 of the Constitution of India questioning the decision of the authority but the said writ petition has been dismissed.
8. In the context of cancellation of tender process, Mr. Ajit Kumar, learned senior counsel appearing for the appellant/writ petitioner, has mainly relied upon the applicability of Clause 34 of ITB of NIT which speaks about revocation of tender process. In addition to the said argument, it has been argued that when there is a provision of revocation of the tender process to be started from the opening of the bid stage, the decision of the authority for cancellation of the tender process in view of the provision of Clause 35 of ITB of NIT cannot be said to be justified.
On the other hand, Mr. Amit Kumar Das, learned counsel appearing for the respondent BCCL while referring to the opinion of the NIC, which is part of Annexure-12 of this memo of appeal wherein it has been stipulated that the revocation is possible till technical evaluation stage in Non- ATP tenders but in this case, the financial opening and the
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auction also got completed and the overall comparative chart is also generated and as such, at this stage revocation is not possible and, therefore, the authorities have not resorted to the provision of Clause 34 of ITB of NIT, rather they have resorted to the provision of Clause 35 by cancelling the tender process.
9. Before going further, this Court deems it fit and proper to deal with the scope of judicial review in tender matters under Article 226 of the Constitution of India.
In Tata Cellular v. Union of India [(1994) 6 SCC 651] the Hon’ble Apex Court has examined the scope of judicial review in the case of a tender awarded by a public authority for carrying out certain work. This Court acknowledged that the principles of judicial review can apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. The Hon’ble Apex Court also observed in the said judgment that the right to choose cannot be considered as an arbitrary power.
The Honble Apex Court in the case of Tata Cellular (Supra) has been pleased to hold that judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. It is thus different from an appeal. When hearing an appeal, the court is concerned with the merits of the decision under appeal. Since
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the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision.
The Honble Apex Court therefore, has held the following principles at paragraph 94 which read as hereunder :- “94.
- 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. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
- 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.
- Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”
The same principle has been reiterated by the Hon’ble Apex Court in Raunaq International Ltd. v. I.V.R. Construction Ltd. & ors., [(1999) 1 SCC 492].
In Fertilizer Corpn. Kamgar Union v. Union of India, [(1981) 1 SCC 568], the Hon’ble Apex Court at paragraph 35 has been pleased to hold that the function is limited to be tested whether the administrative action has been fair and free from the taint of unreasonableness and has substantially
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complied with the norms of procedure set for it by rules of public administration.
The same view has been reiterated in Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd. & ors. [(1997) 1 SCC 738], observing therein that judicial review of contractual transactions by government bodies is permissible to prevent arbitrariness, favouritism or use of power for collateral purposes. The Hon’ble Apex Court has added a further dimension to the undesirability of intervention by pointing out that where the project is a high- cost project for which loans from the World Bank or other international bodies have been obtained after following the
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specifications and procedure of such a body, it would be detrimental to public interest to interfere.
The same principles have also been reaffirmed in New Horizons Ltd. & anr. v. Union of India & ors.[(1995) 1 SCC 478]. The Hon’ble Apex Court again emphasising the need to allow for certain flexibility in administrative decision- making, observing that the decision can be challenged only on the Wednesbury principle of unreasonableness, i.e., unless the decision is so unreasonable that no sensible person would have arrived at such a decision, it should not be upset.
In Delhi Science Forum & Ors. v. Union of India & anr. [(1996) 2 SCC 405] the Hon’ble Apex Court again
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observed that if a reasonable procedure has been followed, the decision should not be challenged except on the Wednesbury principle of unreasonableness.
It is settled position of law that the writ court while interfering with the tender process can only go into the situation where there is any error in the decision making process by resorting to the provision of Article 226 of the Constitution of India and not to the decision taken by the authority.
10. We, in order to appreciate the arguments, deem it fit and proper to go through the provision of Clause 34 and Clause 35 of ITB of NIT which read as hereunder :-
“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 courts 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.
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.
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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.”
“35 CANCELLATION OF TENDER:
Any tender published on 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.”
It is evident from the provision of Clause 34 of ITB of NIT which speaks about revocation of tender process. The said
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process can be resorted in a 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 courts 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. 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:
- To comply with the directives of Hon’ble Court of Law.
- 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.
In all such cases the Tender Revocation Notice must
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contain the details of the circumstances leading to revocation of tender process. Further, 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.
Thus, it is evident from the provision of Clause 34 of ITB of NIT that the revocation of tender process can be resorted to in a case which may lead to cancellation of tender i.e., in case of a decision of the court of law or when online evaluation of tender is not done correctly by mistake of evaluator or if there is a error in the online evaluation of tender due to technical error in the system and in order to avoid the cancellation of tender in such cases, the tender process needs be reverted back to appropriate stage.
Thus, it is evident that if the entire provision of Clause 34 of ITB of NIT will be read in entirety, the same does not mandate about mandatory provision even in a case of mistake by evaluator in assessing the evaluation of tender as because if the words “which may lead to cancellation of tender and in order to avoid the cancellation of tender in such cases, the tender process needs be reverted back to appropriate stage” are read together, the same is depending upon the situation.
So far as Clause 35 of ITB of NIT is concerned, it speaks
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that any tender published on 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.
Thus, it is evident that Clause 34 which speaks about revocation of tender process and Clause 35 speaks about cancellation of tender are two different conditions stipulated in the NIT having no bearing with each other and since revocation of tender process is discretionary one, therefore, in that circumstances the authority can resort to cancellation of tender if the situation so warrants.
11. In the given facts of this case it would be evident that in pursuance to the Notice Inviting Tender (NIT) which was opened on 21.02.2020 and comparative chart was generated before Reverse Auction Process 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. 9 B 4 of NIT which states :-
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“9 B. REVERSE AUCTION PROCESS
4. System displays L1 cost to company price automatically in auction creation form
and allows TIA to edit the value as start bid price. For the time being L1 price or approved estimated/justified price (only estimated price in case of mining tenders)+ 10%+ applicable GST including GST compensation cess, if any, taking into consideration Input tax credit, if applicable whichever is lower will be the start bid price for tenders for works and services. The estimated price should be based on SOR (Schedule of Rates) and market analysed rates in case of items/services for which SOR is not available. Wherever SOR is not available, preparation of SOR should be made ina scientific manner based on proper justification on priority. If the L-1 price is higher than the Start Bid Price (Estimated/justified price + 10% + applicable GST taking into consideration Input tax credit, if applicable) and the RAP is not triggered within the scheduled time, the cases will be retendered.”
The decremental price was set at Rs.80,00,000/-.
Auction was scheduled on 21.02.2020 from 01.00 PM to 03.00 PM where all eligible bidders were free to participate. Out of four bidders only two participated in Reverse Auction Process (RAP). RAP was triggered by AKA Logistics Private Limited at 02.38 PM reducing the value by Rs.80,00,000/- and subsequently the petitioner participated in RAP at 02.46 PM further reducing the value by Rs.80,00,000/- (one decremental price) thus bringing the overall value down by Rs.1,60,00,000/-
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during RAP from Rs. 168,69,92,897/- to Rs.167,09,92,897/-.
After completion of Reverse Auction Process, BOQ of all bidders were downloaded from the system then it was observed that the lowest quoted amount shown in
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Comparative chart before RAP is in tune with BOQ summary details generated by system after RAP whereas the amount shown in BOQ Summary details before RAP as generated by portal after completion of RAP mismatches with the amount shown in the BOQ submitted by the bidders during bid submission and downloaded from the system. The matter was reported to NIC over e-mail with a request to clarify the matter and arrange to take necessary measures for rectification of error, if any and NIC replied over e-mail the details of which are as follows :-
“Communication from “eProcurement Support Team, Support eProcurement Division, Chennai, NIC” Dt:27.02.2020:
With reference to the trailing mail, while designing a BoQ, the system follows certain
logic for generating in comparative chart. In this case, the GST row has been taken as
a line item and generated comparative chart by adding the GST amount also. The system do not understand the GST amount has to be skipped hence the erroneous value in the comparative chart.”
Communication from Sr. Technical Director, NIC Chennai With reference to the trailing mail, while designing a BoQ, the system follows certain logic for generating in comparative chart. In this case, while preparing the BOQ by the department user, the GST row has been added as a line item as a row. This is the cause of the error. It should have been put as a column. It is advised that when a new BOQ is designed it should be tested in the demo site and then only it should be put on live site. In this case, the system has included the GST amount as a line item and generated the comparative chart and hence the erroneous value in the comparative chart.”
After detailed deliberation, the Tender Committee created a comparative statement indicating ideal versus
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actual. The comparative chart states that lowest amount quoted is by the writ petitioner for Rs.167,09,92,897/- and on later dates the writ petitioner has offered two suo moto rebates, reducing the value to Rs.162,90,34,128/-.
Learned counsel appearing on behalf of the respondent- BCCL has invited the attention of this court to the deliberations of the tender committee available on record. The said deliberation is reproduced herein below:-
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Sl. NIT provisions Tender process as it Remarks of
No. happened Tender
Committee
1. Clause no.9B4 of The comparative chart As per NIT the NIT/TD(P/C/106) (P/C/144) generated impact of GST is System displays L1 cost to before RAP showed considered as zero, company price automatically in the lowest amount owing to Input Tax auction creation form and quoted as Credit. The Lowest allows TIA to edit the value as Rs.174,96,63,042/- amount quoted was start bid price. For the time (Rupees One Seventy displayed as being L1 price or approved Four Crore Ninety Six Rs.174,96,63,042/ estimated/justified price (only Lakh Sixty Three – (Rupees One estimated price in case of thousand and forty Seventy Four Crore mining tenders)+ 10%+ two only) i.e 14.086% Ninety Six Lakh applicable GST including GST above estimated cost. Sixty Three compensation cess, if any, Accordingly, start bid Thousand and taking into consideration Input price was set for RAP Forty Two Only) as tax credit, if applicable at Rs.168,69,92,897/- per comparative whichever is lower will be the i.e estimate +10% as chart at P /C/144 start bid price for tenders for per clause no.9B4 of is inclusive of GST. works and services NIT/TD. This error was not
known to Tender
Clause no.20.1 of Committee while NIT/TD(P/C/92) fixing Start Bid
Price. As such the
Evaluation and comparison of start bid price was Bids will be done by system set at online. The bidder shall also Rs.168,69,92,897/ comply with system – (Rupees One Sixty requirement as explained Eight Crore Sixty wherever in e-tender Nine lakh Ninety notice/tender document. Bid Two Thousand evaluation shall be done after Eight Hundred and taking into consideration Ninety Seven Only) overall quoted price by the i.e. Estimate +10%. bidder and effect of Goods and TC later learned Services Tax (GST), GST that, the L1, as compensation cess etc. as stipulated in applicable. L1 will be decided Clause no. 9B4 and on the basis of cost to 20.1 was Om
company.
Sharda Logistics
Pvt. Ltd. with a
quoted price of Rs.
164,50,51,160
(Rupees One Sixty
Four Crore Fifty
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Lakh Fifty One
Thousand One
- undred and Sixty
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Only) P/C/256-
2. Clause no. 9 B 12 of NIT/TD: The lowest amount As per the referred (P/C/105) quoted as per the clause since OM If a bidder does not submit his comparative chart (e- SHARDA
bid Auction) placed at LOGISTICS PVT
in the Reverse Auction, the P/C/163 is Rs. LTD didn’
price quoted by him in the 167,09,92,897/ participate in RAP
price bid shall be considered as (Rupees One Sixty however as pe
the valid price of that bidder. Seven Crore Nine lakh User Login Details The status of the bidder (L1, L2 Ninety Two Thousand at P/C/334 the etc) shall be evaluated Eight Hundred and bidder was online
considering either the bid price Ninety Seven Only) and logged i
submitted in Reverse auction quoted by Devparabha throughout th
or the price quoted in the price Construction Pvt. Ltd. RAP, their original bid, whichever is lower. after participation in quoted price bid
RAP. Om Sharda Rs. 164,50,51,160 Logistics Pvt. Ltd. has (Rupees One Sixty submitted a bid price Four Crore Fifty
of Rs. 164,50,51,160 lakh Fifty One
(Rupees One Sixty Thousand One
Four Crore Fifty Lakh Hundred and Sixty fifty one thousand one Only) will remain hundred and sixty valid even after Only) during bid RAP and TC is
submission (i.e before empowered t
RAP) and didnt decide the status of participate in RAP L1, L2 etc of the however as per user Tender-cum-
login details at auction process. P/C/334 the bidder
was online and logged
in throughout the
RAP.
3 Clause no, 9 B 14 of NIT/TD: The chronologically The bid pric
(P/C/105) last bid electronically quoted by Om
Only the chronologically last submitted by bidders Sharda Logistic
bid submitted by the bidder till participated in Pvt. Ltd. during bid
the end of the auction shall be Tender-cum-Auction submission is the considered as the valid price process is as below: lowest price among bid of that bidder. Any bid 1. Om Sharda the bids submitted
submitted earlier by the bidder Logistics Pvt. LTd. by bidders
prior to Rs.164,50,51,160/- electronically. submission of his last bid will (Rupees One Sixty
not be considered as the valid Four Crore Fifty Lakh
price bid. Fifty One Thousand
Clause no.9B17 of NIT/TD: One hundred and
(P/C/105) Sixty Only)
All the electronic bids 2. Devprabha
submitted during the reverse Construction Pvt Ltd
auction process shall be legally Rs. 167,09,92,897
binding on the bidder. The (Rupees One Sixty
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M/S Dev Prabha Construction Pvt. … vs The Bharat Coking Coal Limited on 9 June, 2021 chronologically last bid Seven Crore Nine lakh
submitted by the bidder till the Ninety Two Thousand end of the auction will be Eight Hundred and considered as the valid price Ninety Seven Only) bid offered by that bidder and 3. AKA LOGISTICS acceptance of the same by PRIVATE LIMITED Rs.
BCCL will form a binding 167,89,92,897/
contract between BCCL and the (Rupees One Sixty
bidder for entering into Seven Crore Eighty
contract. Nine lakh Ninety Two
Thousand Eight
Hundred and Ninety
Seven Only)
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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 The suo-moto
(P/C/105) Construction Pvt. Ltd. rebate can Conditional discounts shall not has offered two suo accepted only from be considered. If a bidder offers moto rebates after the L1 bidder and
a discount unilaterally after conclusion of the the unilaterall
submission of bid, the discount Reverse Auction offered discount
shall not be considered for Process through the cannot evaluation of offers but shall be following considered
availed if order is placed on communication Letter evaluation of offers
such tenderer. No.DCPL/CMC/2019- As deliberate
clause no. 20.2 of NIT/TD: —- 20/01 Dt: 22.02.2020 above; the bid price
if the L-1 bidder offers suo (P/C/261-264) which quoted by Om
moto rebate on his quoted was received in the Sharda Logisti
rates after Reverse Auction, it office of GM (CMC) PVt. Ltd. is the
will be acceptable… vide diary no. 592 lowest pri
dt:24.02.2020. electronically
Letter no. quoted durin
DCPL/CMC/2019- Tender
20/02 Dt: 25.02.2020 Cum Revers
(P/C/265-268) which Auction Process
was received in the Therefore the suo-
office of GM (CMC) moto rebat
vide diary no 616 Dt: offered
25.02.2020. Devprabha
The bidder has Construction mentioned in the Private limited is
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letter that, “in order to not acceptable. As obtain the contract such suo-moto and in view with good rebate cannot be relations prevailing used for evaluation with BCCL” they are of tender. In view of offering suo-moto above, Om Sharda rebate . Logitics Pvt. Ltd.
remains the lowest quoted bidder even after RAP.
5 Clause no. 34 of NIT/TD: E-mail was sent to Theres no REVOCATION OF TENDER NIC to enquire the possibility of PROCESS: (P/C/87) possibility of Revocation of There may be situation when Revocation till the tender as per the decision of Tender stage of before RAP on clause no.34 of Committee may have to be Dt: 12.03.2020 NIT/TD, confirmed changed subsequently on NIC replied on by Service Provider- account of a Court’s verdict. Dt.20.03.2020 stating NIC.
Also, there may Circumstances the following when online evaluation of (P/C/284):
tender is not done correctly due Quote–
to mistake by the Evaluator or As per our system, due to technical error in the the revocation is system, which may lead to possible till cancellation of tender. In order technical evaluation to avoid the cancellation of stage in Non-ATP tender in such cases, the tenders.
tender process needs be In this case, the reverted back to appropriate financial opening stage (i.e. bid Opening stage and the auction also etc.) to comply with the courts got completed and verdict or to rectify the error the overall committed by the Evaluator. comparative chart is
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This provision in the e- also generated. Now procurement system has been at this stage introduced with an objective to revocation is not abide by the Courts verdict or possible. to ensure that the tender Unquote—.
process should not suffer due to any 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.
- If the evaluator makes a mistake in online evaluation of tender, which is not in line with the Tender Committee decision.
- 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.
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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.
- owever, since Revocation of tender, in true sense, is not a Corrigendum to NIT, the Tender Rev o ca t i o n N o tic e w i l l b e u p l o a d e d o n l y o n t h e e P r o c u r e m ent p or t a l https://coalindiatenders.nic.in.
- n 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.
As would appear from column 2 of Sl. No.5 of the aforesaid chart that an E-mail was sent to NIC to enquire the possibility of Revocation till the stage of before RAP on 12.03.2020. NIC replied on 20.03.2020 stating that “as per our system, the revocation is possible till technical evaluation
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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 revocation is not possible”.
Thus, it is evident from the opinion expressed by NIC as would be evident from the e-mail quoted and referred hereinabove that as per the system the revocation is possible till technical evaluation stage in Non-ATP tenders and in this case, since the financial opening and the auction also got completed and the overall comparative chart is also generated, revocation is not possible at this stage.
Thus, on the basis of such technical lapses since error has cropped up in the entire process of tender, therefore, the authorities have not resorted to the provision as contained under Clause 34 of ITB of NIT for revocation of tender process, rather gone for fresh tender by cancelling the earlier one and in our considered view, the authorities have not taken any unjustified decision and, therefore, the said decision making process of the respondent authorities cannot be said to suffer from any infirmity.
12. We have examined the rival submissions advanced on behalf of the parties on the touchstone of the ratio laid down by the Hon’ble Apex Court as referred hereinabove.
Now we are proceeding to examine the issue since the Hon’ble Apex Court has laid down the ratio to deal with the
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scope of judicial review only on the ground of Wednesbury principle of unreasonableness but from the discussion made hereinabove, more particularly, by taking into consideration the entire process wherein due to error in the technical system as has been opined by NIC as quoted and referred hereinabove assigning the reason for not resorting to the revocation of tender process and in that view of the matter if the authorities have resorted to the provision of Clause 35 by cancelling the tender process, the same cannot be said to suffer from any unreasonableness or arbitrariness on the part of the respondent authorities and, therefore, the argument advanced on behalf of the appellant to the effect that by not resorting to the provision of Clause 34 the authorities have committed gross illegality, we are not satisfied with the said argument for the reasons assigned hereinabove and also taking into consideration the fact that the reason has well been assigned as quoted and referred hereinabove based upon that when the tender process has been cancelled, the same cannot be said to suffer from any infirmity. Accordingly, the argument is rejected.
Otherwise also, since merely because the appellant/writ petitioner has been declared to be L-1 it does not confer any right upon the appellant and further, the decision for cancellation of tender process does not create any stigma and whenever fresh tender will be issued, the appellant can
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participate in the same and as such, the appellant has got no vested right to question the process of cancellation of tender process also on the ground we have already held hereinabove that there is no error in decision making process.
13. So far as the other argument advanced on behalf of learned counsel for the appellant which pertains to non- assigning of reason in the impugned decision of cancellation of tender process, Mr. Das, learned counsel appearing for the respondents, refuting the aforesaid submission, has submitted that the reason has well been assigned by referring therein about technical error which prompted the respondent authorities to cancel the tender process and whatever has been submitted by learned counsel appearing for the appellant/writ petitioner by taking aid of the judgment rendered in Mohinder Singh Gill (Supra), the same is not applicable in the facts of the case as because the reason is mentioned in the impugned decision and whatever has been stated in the counter affidavit as has been quoted by learned Single Judge in the impugned order, the same is only opinion of NIC based upon which the decision of cancellation of tender process has been taken as because due to technical error the entire process has been found to suffer from infirmity and, therefore, in the facts of the case the judgment rendered by the Hon’ble Apex Court in Mohinder Singh Gill (Supra) is not applicable.
– 31 –
14. So far as the argument advanced on behalf of learned counsel appearing for the appellant/writ petitioner that the action of the respondent authorities suffers from mala fide which has seriously been refuted by the learned counsel appearing for the respondents by making submission that mere allegation of mala fide has been made but the same cannot be established. Moreover, mala fide cannot be alleged against the establishment, rather mala fide is always against a particular
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Government officer/official but very surprisingly no officer/official has been impleaded as party by name and further, it has been argued that the entire tender process has been cancelled in order to help the third party but who is the third party that has also not been mentioned in the writ petition.
On the issue of mala fide the Honble Apex Court in the case of State of Bihar and Anr. vs. P.P. Sharma, IAS and Anr. [1992 Supp (1) SCC 222] has laid down that the person against whom mala fides or bias was imputed should be impleaded eo nomine as a party respondent to the proceedings and given an opportunity to meet those allegations. In his/her absence no enquiry into those allegations would be made. Otherwise it itself is violative of the principles of natural justice as it amounts to condemning a person without an opportunity.
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This Court after hearing learned counsel for the parties on the issue is in agreement with the submission made on behalf of the learned counsel for the respondent on the ground that mala fide can only be alleged against the person and in order to prove the mala fide against the person requirement of law is to implead such person as party to the proceeding so that the allegation of mala fide can be proved by providing an opportunity to the concerned against whom allegation of mala fide has been leveled as has been held by Honble Apex Court in the case of State of Bihar and Anr. vs. P. P. Sharma, IAS and Anr. (supra).
We have deliberated upon the said issue on the basis of the settled position of law that making allegation of mala fide is not only sufficient to come to the conclusion that mala fide has been committed, rather in order to prove the mala fide specific pleading is required to be made in the plaint coupled with impleadment of particular person against whom allegation of mala fide has been made and here in the given case the argument has been advanced on behalf of the writ petitioner that in order to help third party mala fide has been committed but very surprisingly who is third party that has not been disclosed. Moreover, the said third party has not been made party respondent.
15. We have considered the position of law that the scope of judicial review under Article 226 of the Constitution of India
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in a State largess only restricted to the decision making process and if in case of any error in the decision making process the writ court can interfere in exercise of power of judicial review under Article 226 of the Constitution of India, reference in this regard be made to judgment rendered by Hon’ble Apex Court in Syed TA Naqsnbandi and Ors. vs. State of J&K and Ors., [(2003) 9 SCC 592], wherein the Honble Apex Court has observed:
“Judicial review is permissible only to the extent of finding whether the process in
reaching the decision has been observed correctly and not the decision itself, as such.
Critical or independent analysis or appraisal of the materials by the Courts exercising
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M/S Dev Prabha Construction Pvt. … vs The Bharat Coking Coal Limited on 9 June, 2021
powers of judicial review unlike the case of an appellate court, would neither be permissible nor conducive to the interests of either the officers concerned or the
system and institutions……”
We have examined this aspect of the matter as to whether there is any error in the decision making process by the respondent authority but, as discussed hereinabove, we have not found any error in the decision making process as because we have already come to conclusion that provision as contained in Clause 34 of NIT being discretionary and when the NIC being the expert body, clarified about the error in technical system which led the writ petitioner to be declared as L-1 and, as such, in such circumstances, decision has been taken to go for cancellation of the tender process as per the condition stipulated under Clause 35 of NIT, it cannot be
– 34 –
said to be error in the decision making process as also there is no mala fide on the part of the respondent authority as has been considered by this Court and, therefore, on these grounds this Court is of the view that no interference is required in the impugned decision of the respondent authority.
16. We, after discussing the facts in entirety, has gone across the judgment rendered by the learned Single Judge and have found therefrom that the learned Single Judge has considered each and every aspect of the matter as also discussed the argument advanced by the writ petitioner about applicability of Clause 34 of ITB of NIT and after discussing the facts in detail, based upon the decision of Hon’ble Apex Court in several cases, has refused to interfere with the decision of cancellation of tender process by resorting to the provision of Clause 35 of ITB of NIT, the same cannot be held to be illegal.
Further, learned Single Judge has also come to the conclusion about applicability of the judgment rendered in Mohinder Singh Gill (Supra) and the judgment rendered in State of Punjab Vs. Bandeep Singh & ors., [(2016) 1 SCC 724], wherein the ratio laid down in the case of Mohinder Singh Gill (Supra.) has been followed and by taking into consideration the factual aspect narrated in detail as also considering the opinion of the NIC, the learned Single Judge
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has rightly come to the conclusion about non-applicability of Clause 34 of ITB of NIT.
- We, at the outset, have already come to the conclusion that power vested under Clause 34 of ITB of NIT since is a discretionary power and when the authorities have taken decision on the basis of the expert opinion expressed by the NIC regarding technical error, as has been referred and quoted hereinabove, which led to resort to the provision of Clause 35, rather to go for Clause 34, we do not find any reason to interfere with the order passed by the learned Single Judge.
- Accordingly, the instant appeal is dismissed.
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19. In view of the disposal of the appeal, stay petition (I.A. No. 1482 of 2021) also stands disposed of. (Dr. Ravi Ranjan, C.J.) (Sujit Narayan Prasad, J.) Birendra/ A.F.R.
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