Himachal Pradesh High Court
M/S Quality Industries Corporation vs State Of Himachal Pradesh And Another on 7 December, 2016
Bench: Mansoor Ahmad Mir, Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA CWP No. 2544 of 2016 Reserved on: November 11, 2016 Decided on: December 7, 2016 .
M/s Quality Industries Corporation ................Petitioner Versus State of Himachal Pradesh and another ..........Respondents Coram Hon'ble Mr. Justice Mansoor Ahmad Mir, Chief Justice Hon'ble Mr. Justice Sandeep Sharma, Judge Whether approved for reporting? Yes.
of For the petitioner : Mr. Rajnish Maniktala, Advocate.
For the respondents : Mr. Shrawan Dogra, Advocate General with Mr. Anup Rattan and Mr. Varun Chandel, rt Additional Advocate Generals and Mr. Kush Sharma, Deputy Advocate General.
Per Sandeep Sharma, Judge Instant petition under Article 226 of the Constitution of India has been filed seeking following main reliefs:
"(i) That the orders of cancellation of tenders dated 19.09.2016 (Annexure P-16) issued by respondent No.2 may be quashed and set aside.
(ii) That the respondents may be directed to finalize the present tendering process issued vide tender documents placed on record as Annexure P-13."
2. Briefly stated the facts of the case, as emerge from the record are that petitioner is a proprietor firm having its office at Ambala Cantt. Petitioner participated in tender process for the supply of the tools and equipments for vocational laboratories/ workshops of functional trades in National Skill Qualification Framework (NSQF) which was floated by respondent No.2. Petitioner was found to be lowest bidder and petitioner firm was recommended for grant of ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 2 contract by the Tender Evaluation Committee. However, on 19.9.2016, tendering process was cancelled.
3. The respondents-State by its reply stated that a .
tender notice was published in three leading newspapers dated 1.6.2016, for the supply of tools and equipment for establishing vocational laboratories in various Government Senior Secondary Schools on the basis of technical specifications finalized by a Technical Committee constituted for this particular purpose by of the Government of HP. 8 Firms participated in the pre-bid meeting, wherein all the points about the technical specifications rt were addressed. Technical bids were opened on 23.6.2016 by the Technical Evaluation Committee and four participating firms including petitioner were found qualified. Financial bids were opened on 19.7.2016 and rates quoted by the petitioner firm were found to be lowest and same were announced. However, various complaints were received by respondents regarding discrepancies in the tendering process and pointed out shortcomings in the specifications. On the direction of State Government to conduct tendering process as per Rules, respondent No. 2 took decision to cancel the tendering process.
It was specifically averred in the reply that the tendering process was cancelled on following shortcomings, i.e. (a) That e-tendering process was not followed as the department did not have e-
tendering Platform, and (b) that specifications of some of the ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 3 items were found lengthy and exaggerated. These errors crept in due to lack of technical know-how of the Committee constituted for the purpose. It was further stated that petitioner was free to .
compete in e-tendering process as it would be much fair and transparent.
4. During the course of proceedings, petitioner filed an application for placing on record additional documents of suggestive of the fact that despite there being aforesaid decision of cancellation on the ground of e-tendering, respondent department is still continuing with the procedure of inviting rt offline/manual tender. Petitioner also placed on record documents to demonstrate that objections with regard to e-
tendering in the instant case were also overruled by the Joint Controller (Finance) and thereafter department proceeded ahead by inviting offline/manual tender, in which petitioner emerged as the lowest bidder.
5. Mr. Rajnish Maniktala, Advocate appearing for the petitioner, vehemently argued that action of the respondents in cancelling the tender for the supply of Tools and Equipments for Vocational Laboratories/Workshops of Vocational Trades/Subjects under National Skill Qualification Framework in 300 Government Senior Secondary Schools of Himachal Pradesh, is illegal and colourable exercise of power, especially in view of the fact that entire process was completed and bids ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 4 furnished by petitioner were duly accepted by the Technical Committee constituted in this regard by the Department. While referring to the cancellation order, annexure P-16, Mr. .
Maniktala, strenuously argued that it suffers from legal malafides especially when petitioner had furnished all requirements and after valuation of Technical Committee, he was found to be successful bidder, respondents had no authority to of cancel the same that too without assigning any reason in the cancellation order. He further argued that cancellation of tender dated 19.9.2016, is a non-speaking order because, save and rt except, ''due to administrative reasons", no other plausible reason has been assigned, which itself suggests unreasonableness, arbitrariness of the action taken by the respondents in haste. He further invited attention of the Court to the reply filed by the respondents to demonstrate that the decision to cancel the order has been taken at the behest of those firms, which had participated in the tender process and had failed to procure the tender, since their specifications and rates were not found suitable by the respondent department.
While concluding his arguments, Mr. Maniktala forcefully contended that no action could be taken on the complaints having been filed by the other competitors, who had admittedly participated in the tender.
::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 56. Mr. Shrawan Dogra, learned Advocate General, duly assisted by Mr. Anup Rattan, Additional Advocate General, supported the decision of cancellation of tender passed by the .
authorities and stated that since entire process initiated by the Department for inviting tender in question was in violation of the policy of procurement framed by the Government of Himachal Pradesh, wherein material/ specifications provided in the tender of in question could only be procured through e-tender, there is no illegality in the cancellation order passed by the respondents.
Mr. Dogra, strenuously argued that before any final decision rt could be taken in the matter, after valuation of the bid by the Technical Committee, respondent-State received certain complaints with regard to procedure adopted by the department while inviting tender, as a result of which matter traveled upto the Minister in-charge i.e. Hon'ble Chief Minister, who after verifying the records directed the authorities concerned to take decision in accordance with rules. He further invited attention of the Court to clause 15 of the tender document, to suggest that decision with regard to acceptance of tender entirely vested with the State Project Director, Rashtriya Madhyamik Shiksha Abhiyan (RMSA), and he has right to accept or reject the tender without assigning any reason. While concluding his arguments, Mr. Dogra also invited attention of the Court to the procedure of procurement i.e. FM&P manual prepared in accordance with the ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 6 provisions of GFR-2005 and as per latest CVC guidelines, required to be adopted, especially under RMSA, wherein it has been specifically provided that procurement of all goods, work .
and consultancy services under RMSA project is required to be carried out in accordance with principles, rules and procedure contained in Chapter 8 i.e. 'procurement under RMSA'. Table 6, Annexure XXV, column No.5 suggests that any procurement of above `50.00 Lakh is required to be done through open tender for civil works, goods and services. Mr. Dogra while referring to the documents having been annexed by the petitioner alongwith rt petition as well as application for placing on record additional documents, contended that, true it is that petitioner firm was found to be lowest bidder but that can not be the sole ground to award work in its favour, especially in view of non-compliance of procedure as prescribed under the provisions of "FM&P manual).
The material advertised in the Notice Inviting Tender could only be procured through e-tendering.
7. We have heard the learned counsel for the parties and also gone through the records.
8. This Court, after perusing documents available on record and after hearing submissions having been advanced by the counsel representing the petitioner, at the stage of issuance of notice, called for the original record of the case from the respondent-State, which was produced and same was perused ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 7 by this Court at the time of final hearing of the case. After carefully perusing the pleadings as well as documents annexed thereto, it is undisputed that petitioner firm was found to be the .
lowest bidder and it was recommended for grant of contract by the Tender Evaluation Committee. Aforesaid factum of petitioner firm having been found to be the lowest bidder has also not been disputed by the respondent-State. Vide order dated 19.9.2016, of respondent-State took a conscious decision to cancel tender process invoking clause 15 of the tender document, which empowers the State Project Director, RMSA to cancel any tender rt without assigning any reason.
9. True it is, perusal of annexure P-16 i.e. cancellation order nowhere stipulates specific reasons for cancellation of tender in question. Respondents have simply cancelled the tender citing administrative reasons, which may not be sufficient to justify cancellation. However, perusal of reply filed by respondents No.1 and 2, which is supported by affidavit of State Project Director, RMSA, suggests that after completion of evaluation by the Technical Evaluation Committee, wherein petitioner alongwith four other participating firms was found to be qualified as per specifications, complaints were received regarding discrepancies in the tendering process and tender document. It would be appropriate to reproduce following portion of the reply filed by respondents No.1 and 2:
::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 81. That, the tender was issued for the supply of tools & equipment for establishing vocational laboratories in various Government Senior Secondary Schools on the basis of technical specifications .
finalized by a technical committee constituted for this particular purpose by the Government of HP through a tender notice published in three leading newspaper on dated 1/6/2016 and 8 firms participated in the pre bid meeting wherein all the points raised by the participating firms about the technical specifications were addressed. Subsequently eight firms submitted their bids.
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2. The technical bids were opened on 23/6/2016 by the technical evaluation committee and four participating firms including that of the petitioner were found to be qualified as per the specifications. As a result financial bids were opened on 19/7/2016 rt and the rates quoted by the petitioner firm were found to be lowest and the same were announced. On finding the rates of the petitioner firm lowest in all the tendered items, various complaints were received in the office of the Respondent No. 2 regarding discrepancies in the tendering process and tender document .
3. That one firm Science and Surgical House averred that there were some faulty specifications which are not common in the market and hence prejudiced. The firm namely Amco Industries and Export Corporation stated that there was fixing with the party and the process was not fair. It further stated that there was big difference in lowest and highest bid and the foul play was apprehended.
4. That the same firm namely Amoco Industries stated that the specifications were manipulated and rigid in nature. On examination of the complaints it was found that the averments made by the complainants were just an after thought and same were designed to somehow stall the process and press for retendering. However, demand for E-Tendering and some infirmities in specification were found to be a fair demand. The demand for e-tendering was examined in lien with the procurement plan as suggested under Rashtriya Madhyam shiksha Abhiyan (RMSA) manual RMSA Manual has prescribed that for procurement over 50 lakh , e-procurement should be followed.
::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 95. That considering the urgency of vocational LABS IN 300 Government senior secondary schools in wchich vocational streams have been started during 2015-16 , the matter was referred to the Government for relaxation of e-tendering process as the incumbent office does not have e-tendering .
platform as on date and in anticipation of that a fair and transparent tendering process had been adopted for the captioned procurement. The Government however, directed that the entire procurement must be done as per rules.
6. That, the Respondent no. 2 took the decision to cancel the tender on dated 19/09/2016 by invoking clause 15 of the tender document and decided to go of for e-tendering as per the RMSA framework.
7. That in addition to E-tendering the decision was also taken in view of the various discrepancies such as item No. 6,9,11,12,13,14,34,38, 40, 41,35,52 in the specification of the 'Telecom Lab', item no.
rt 29,30,63 in 'Agriculture' item no. 15, 21 in 'Retail' and item No. 21,22,23,24,26,42, in the specification of security. These specification were either lengthy or not common in market and are being amended for E- tendering and the decision to cancel the tender was taken in public interest as there was a point in the complaint of some firms, who approached the Chief Minister/ DGP (Police), HP/Secretary Education, HP Government/ Anti-Corruption Bureau, HP/Finance Secretary, HP Government/ DGP Vigilance regarding infirmities in tendering process. After consulting different agencies it was decided to float the E-tender and rectify the discrepancies in the tendering process.
8. That, the petitioner firm has not been unfairly treated since tender was initially awarded to them and there was no malafied intention on the part of respondents. The reason for cancellation was mainly the discrepancies in tendering process.
9. That, the petition may be dismissed and the department may be allowed to float e-tender in the interest of justice. The respondent has no grudge or bad intention against the petitioner who has still the opportunity to complete in the e-tendering process."
10. Close scrutiny of the aforesaid averments contained in the reply suggests that since there were certain discrepancies ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 10 in the items/specifications given in the Notice Inviting Tender, participant firms were unable to quote rates and apart from above, a few items /specifications were not common in market.
.
Most importantly, decision to cancel the tender was taken at the level of Hon'ble Chief Minister specifically on the ground that procurement of specifications as quoted in the tender was required to be done through e-tendering. Accordingly, of respondent Department after obtaining approval of the Minister in-charge i.e. Hon'ble Chief Minister, decided to adopt e-
tendering by canceling the present tender.
rt
11. Perusal of documents placed on record by the petitioner alongwith CMP No. 8780/2016, also suggests that the financial/commercial bids submitted by the petitioner qua all the specifications were found to be lowest. Accordingly, Committee proposed that L-1 (lowest bidder) identified for six vocational labs could be directed to establish sample lab for each sector so that same could be inspected by the Technical/Expert Committee of RMSA. Proceedings of the meeting conducted for opening financial/commercial bids dated 19.7.2016 i.e. annexure C (page 216) also suggests that letter of award/supply order to the lowest bidder could only be issued after inspection and satisfaction of Technical Committee. Similarly, perusal of meeting of Technical Committee suggests that five representations were received from different parties regarding ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 11 discrepancy in the tender. Out of these five parties, four had participated in the bids. The Committee with a view to meet the objections having been raised by the representationists, gave .
point-wise reply. It would be apt to reproduce relevant paras of meeting of the Committee:
"Keeping in view the above facts the committee has proposed that the L-1 i.e. lowest bidders identified for 6 Vocational Labs maybe directed to establish sample lab for each sector so that the same could be inspected by the of technical/expert committee of RMSA. After the inspection & satisfaction of the technical committee we may issue letter of award/ supply order to the lowest bidder for 6 Vocational Sectors/Labs so that the Lab equipments could be procured by September 2016.
rt Accordingly the proceeding of the meeting held for opening of financial bids alongwith comparative statements are being placed below approval/signature. However 5 representations have been received from different parties regarding discrepancy in these tenders. Out of these 5 parties 4 have participated as competitor in the bids. All these firms have raised different issues regarding the tendering process. In this regard it is submitted that the issues raised by the different firms seems to be biased and baseless because there has been complete transparency throughout the tendering process.
The pre-bid meting was also conducted before the opening of the technical bids and all the bidders including 4 complainants were present in the pre-bid meeting also. The amendments suggestions given by the bidders regarding technical specifications during pre-bid meeting were also incorporated and a corrigendum was issued to this effect. The point wise reply is as under :-
I. Regarding opening of price bid without scrutiny of technical bid: -
There was thorough scrutiny of the documents in technical bid and it took nearly 25 days (23.06.2016 to 18.07.2016) to check the papers submitted in technical bid. There after the price bids were opened in the presence of the tenderers without any objection.
II. Regarding manual tender:-
The SPO Office is not yet on E-Tendering platform. Therefore manual tenders were invited. There was no ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 12 objection regarding manual tender from any corner during the tendering process at all.
III. Regarding preponement of opening of price bid.
The opening of price bid was preponed to 10 AM on 19.07.2016, as SPD RMSA was to proceed on tour later in the day. All the parties were duly informed .
about the change of time through e mail as well as telephonically.
IV. Regarding manipulation in specifications/ terms & conditions: -
A pre bid meeting was held on 16.06.2016 to discuss about the specifications/ terms & conditions and a number of firms (7 out of 8) participated in the of meting. The suggestions given by the participants were duly incorporated in the tender document by issuing a corrigendum on dated 16.06.2016."
12. Further, perusal of the noting placed on record by the rt petitioner itself available at page 225 suggests that representations were received by the Department and Secretary concerned approached the Hon'ble Chief Minister and informed him that their office did not have e-tendering platform and as such manual tendering process was followed. But careful perusal of noting given by the Secretary for the consideration of the Hon'ble Chief Minister i.e. Minister In-charge, itself suggests that there was a provision of e-procurement under the RMSA procurement manual for all purchases beyond `50.00 Lakh. The noting given by the Secretary (Education) is reproduced below:
"Regarding the representations on Tender Process, detailed replies have been made as per N-14 & 15. Also Hon'ble CM has called me in person and I had briefed him that our office does not have e-tendering platform. However, complete tendering process has been followed.
It is further brought in the notice of the Govt. that the proposed vocational labs are to be set up in 300 ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 13 phase III Schools in which vocational classes have already commenced wef academic session 2015-16. If e-tendering process is to be followed, the same would take long time and result in inordinate delay in setting up vocational labs in The state. However, there is a provision of e-procurement as per RMSA .
procurement manual (Flag-A) for all purchases beyond 50 lacs. Submitted for further directions and order pl.
Sd/-29/8
Pr. Sec(E) For perusal pl.
Sd/-
of Hon. C.M. The ... committee made for such purpose may take decision at its own level as per Rules.
Sd/-
Pr. Sec(Edu) rt SPD"
13. This Court, after carefully examining the aforesaid noting having been given by the Secretary, perused the original record produced by the Department to ascertain the views of the Hon'ble Chief Minister, who, in no uncertain terms, directed the concerned quarters to take decision as per Rules.
14. It is amply clear from the note given above by the Secretary, which was further approved by the Hon'ble Chief Minister that as per RMSA procurement manual, all purchases beyond `50.00 Lakh, especially under RMSA were to be done through e-procurement but in the instant case, as is evident from the records, procedure of e-procurement was not followed by the authorities while proposing purchase of items/ specifications contained in the tender document, rather same ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 14 were proposed to be procured through open tender. It also emerges from the record that at the time of initiation of process of issuance of tender, Joint Controller(Finance) had noted in the .
concerned file that the process of e-tendering may be adopted for award of contract, but his objection was overruled and process for physical tender i.e. paper tender was adopted on the ground that the Department has no platform for e-tendering. However, it of clearly emerges from the reply filed by the respondents that now the Department has the platform for e-tendering. Learned Advocate General specifically informed the Court that at present rt Department is well equipped with e-tendering platform and now procurement in question would be solely made through e-
tendering process strictly in terms of procurement plan as suggested in the RMSA Manual.
15. This Court also perused Chapter-8 i.e. procurement under RMSA of FM&P Manual prepared in accordance with GFR-
2005 which provides as under:
"CH 8 Procurement 8.1 Procurement in RMSA 8.1.1 The provision of the FM&P manual has been prepared in accordance with the provisions of GFR- 2005 and as per latest CVC guidelines. However, in case of further changes in rules & regulations notified from time to time by said bodies, shall prevail and would be incorporated accordingly. 8.1.2. the cardinal principle of any public buying is to provide the Works /Goods/ services of the specified quality, at the most competitive prices, in a fair, just ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 15 and transparent manner. To achieve this end, it is essential to have a uniform and well documented policy guidelines in RMSA scheme so, that this vital activity is executed in a well coordinated manner with least time and cost overruns.
Procurement of all works, goods and consultancy .
services under the project would be carried out in accordance with principle, rules and procedures outlined in this chapter. These principles, rules and procedure need to be understood and followed by the central and State Governments so as to enable them to procure 'Works', 'Goods' and 'Consultant Services"
under the project. Compliance with these procedures will ultimately result in efficiency, economy, fairness of and transparency in procurement.
8.1.3 The implementation of the national programme of Rashtriya Madhyamik Shiksha Abhiyan (RMSA) entails procurement of teaching and learning equipment rt and materials, furniture, school equipment, materials required for ..
Table 6 Annexure XXV S.No. Procurement Type Financial Limit
1. No Tender or Direct Up to Rs.15,000/-
Purchase (Certificate to be furnished as per rule under 145 of GFR 2005)
2. Three member committee Above Rs.15,000/- and (Certificate to be upto Rs. 1.00 Lakh furnished as per rule 146 of GFR 2005)
3. Limited Tender Above Rs. 1 lakh and upto Rs. 10.00 Lakh
4. Open tender Above Rs.10.00 Lakh and below Rs.50.00 Lakh
5. Open tender using e- Rs.50.00 Lakh or above procurement process for Civil works, goods and services
6. Service Contracts 6(a) Direct Contracting (with Upto Rs.1.00 Lakh three quotations) 6(b) Limited tender Above Rs.1.00 Lakh and upto Rs.10.00 Lakh 6(c) Open tender Above 10.00 Lakh For different methods of procurement, MHRD may change these limits by a separate communication as and when required from time to time."
::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 1616. Aforesaid Chapter clearly suggests that any procurement under RMSA scheme for civil works, goods and services can only be by open tender by using e-tendering. It is .
undisputed that the procurement in the present case is more than `50.00 Lakh and respondent Department had floated the physical tender, for the supply of Tools and Equipments for Vocational Laboratories/Workshops of Vocational of Trades/Subjects under National Skill Qualification Framework, in 300 GSSS in HP under RMSA.
17. Hence, in view of detailed discussion herein above, we rt see no illegality or infirmity in the decision taken by the respondent department for canceling the tender especially in view of the fact that no final decision, if any, was taken by the competent authority pursuant to recommendation of the Technical Evaluation Committee, which admittedly had found petitioner firm to be the lowest bidder. Since no final decision by the competent authority was taken in favour of the petitioner, no right could be stated to have accrued in its favour entitling it to the award of work. No doubt, there is substantial force in the contentions having been made by Mr. Maniktala that no complaint/representation could be entertained by the Department, made on behalf of those firms, which had participated in the tendering process, because they, after having failed to procure tender, had no right to point out discrepancy, if ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 17 any, in the tender document. But in the present case, very basis of issuance of Notice Inviting Tender is in violation of procurement policy under RMSA and as such this Court sees no .
reason to interfere with the decision taken by the competent authority, which is in its wisdom and strictly in accordance with the policy framed by the Ministry of HRD, with regard to procurement, has decided to cancel the tender due to of administrative reasons.
18. Further, by no stretch of imagination, court can assume the role of technical expert, who in their wisdom have rt cancelled the tender on account of technical /administrative reasons. Since respondents have already taken a conscious decision to recall the tender, this Court sees no occasion to grant relief as prayed for in the petition.
19. It is well settled by now that respondents can withdraw /recall tender at any time, if it is convinced that same is not in accordance with the requirements as indicated in Notice Inviting Tender. Though, in the present case, petitioner claimed himself to be lowest bidder on account of his financial bid but there is no document suggestive of the fact that pursuant to opening of his financial bid, he was awarded work, as such no right has accrued in his favour which would have entitled him to claim the relief as prayed for in the petition.
::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 1820. The Apex Court in State of Jharkhand v. M/s. CWE-
SOMA Consortium reported in AIR 2016 SCW 3366, has held that:
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13. The appellant-state was well within its rights to reject the bid without assigning any reason thereof. This is apparent from clause 24 of NIT and clause 32.1 of SBD which reads as under:-
"Clause 24 of NIT: "Authority reserves the right to reject any or all of the tender(s) received without assigning any reason thereof." Clause 32.1 of SBD: "...the Employer reserves the right to accept or reject any Bid to cancel of the bidding process and reject all bids, at any time prior to award of Contract, without thereby incurring any liability to the affected Bidder or Bidders or any obligation to inform the affected Bidder or Bidders of the grounds for the Employer's action." In rt terms of the above clause 24 of NIT and clause 32.1 of SBD, though Government has the right to cancel the tender without assigning any reason, appellant-state did assign a cogent and acceptable reason of lack of adequate competition to cancel the tender and invite a fresh tender. The High Court, in our view, did not keep in view the above clauses and right of the government to cancel the tender.
14. The State derives its power to enter into a contract under Article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under Article 14 of the Constitution of India. In the case in hand, in view of lack of real competition, the state found it advisable not to proceed with the tender with only one responsive bid available before it. When there was only one tenderer, in order to make the tender more competitive, the tender committee decided to cancel the tender and invited a fresh tender and the decision of the appellant did not suffer from any arbitrariness or unreasonableness.
21. That Apex Court in Bakshi Security & Personnel Services Pvt. Ltd. V. Devkishan Computed P. Ltd. reported in AIR 2016 SCW 3385, has held that:
::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 1913. First and foremost, under tender condition 2.5.5, commercial bids have to strictly conform to the format provided in Annexure 2 of the tender document. Annexure 2 which contains the format for the price bid makes it clear that the salary paid to deployed manpower should not be less than the minimum wage. It further goes on to state in paragraph 3 thereof that if the component of salary quoted is less than the .
minimum wage prescribed, the bid is liable to be rejected. On this ground alone, Respondent No.1's bid is liable to be rejected inasmuch as, vide its letter dated 3.9.2015, Respondent No.1 stuck to its original figure of Rs.2,77,68,000/- which is way below the minimum wage fixed by the Government. Secondly, Shri Raval is also right in stating that the without prejudice offer of Rs.3,00,92,346/- is an offer which is not fixed, but open ended. This is clear from the fact that it was up to the Government then to pick up either figure by way of acceptance. This is clearly interdicted by clause 2.5.6 of the tender which of states that prices quoted by the bidder have to be fixed, and no open ended bid can be entertained, the same being liable to be rejected straightaway. Such condition is obviously an essential condition of the tender which goes to the eligibility of persons who make offers under the tender.
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14. Unfortunately, even though the High Court noticed the open ended nature of Respondent No.1's bid, it went on to add that the offer of Respondent No.1 shall be treated as matching with the revised minimum wage calculation and that it is nowhere envisaged by the tender conditions that rejection of an offer which may have the potential of causing loss to the tenderer is present. It is not for the High Court to revisit a condition contained in Annexure 2 read with 2.5.5 of the tender in the manner aforesaid. Once the tender condition states that the tender must strictly conform to the format provided in Annexure 2, and Annexure 2 in turn clearly states that if the component of salary quoted is less than the minimum wage prescribed, the bid is liable to be rejected, and the High Court cannot hold otherwise. The High Court's further finding that Respondent No.1's offer was "clear" is wholly incorrect. It was a without prejudice offer which muddied the waters and rendered the price quoted by the bidder as variable and not fixed.
22. The Apex Court in Central Coalfields Limited v.
SLL-SML (Joint Venture Consortium) reported in AIR 2016 SCW 3814, has further held that:
44. On asking these questions in the present appeals, it is more than apparent that the decision taken by CCL to adhere to the terms and conditions of the NIT and the GTC was certainly not irrational in any manner whatsoever or intended to favour anyone. The decision was lawful and not unsound.::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 20
55. On the basis of the available case law, we are of the view that since CCL had not relaxed or deviated from the requirement of furnishing a bank guarantee in the prescribed format, in so far as the present appeals are concerned every bidder was obliged to adhere to the prescribed format of the bank guarantee. Consequently, the failure of JVC to furnish the bank guarantee in the prescribed format was sufficient .
reason for CCL to reject its bid.
56. There is nothing to indicate that the process by which the decision was taken by CCL that the bank guarantee furnished by JVC ought to be rejected was flawed in any manner whatsoever. Similarly, there is nothing to indicate that the decision taken by CCL to reject the bank guarantee furnished by JVC and to adhere to the requirements of the NIT and the GTC was arbitrary or unreasonable or perverse in any manner whatsoever."
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23. Admittedly, Court can go into the question of mala fides raised by a litigant, but in order to succeed, much more than a rt mere allegation is required. Bald and unfounded allegations of mala fides are not sustainable and that mala fides must be specifically pleaded and proved and such allegations of mala fides should be made with all sense of responsibility, otherwise, the maker of such allegations should be ready to face consequences.
24. It is equally well settled that the burden of proving mala fides is on the person making the allegations and the burden is 'very heavy." Reliance is placed upon E.P. Royappa Vs. State of Tamil Nadu (1974) 4 SCC 3.
25. There is every presumption in favour of the administration that the power has been exercised bona fide and in good faith. It is to be remembered that the allegations of mala fides are often more easily made than proved and proof of high degree is required to prove the same. Reliance is also placed on Gulam ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 21 Mustafa Vs. State of Maharashtra (1976) 1 SCC 800 wherein it is held, "It (mala fides) is the last refuge of a losing litigant."
26. Reliance is also placed on Union of India and others .
Vs. Ashok Kumar and others, (2005) 8 SCC 760, whereby it is held by the Apex Court that seriousness of allegations of mala fides demands proof of high order of credibility and the Courts should be slow to draw dubious inferences from incomplete facts placed before them by a party, particularly when the imputations are grave of and they are made against the holder of an office having high responsibility. It was held:
rt "21. Doubtless, he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by the authority of its powers. While the indirect motive or purpose, or bad faith or personal ill- will is not to be held established except on clear proof thereof, it is obviously difficult to establish the state of a man's mind, for that is what the employee has to establish in this case, though this may sometimes be done. The difficulty is not lessened when one has to establish that a person apparently acting on the legitimate exercise of power has, in fact, been acting mala fide in the sense of pursuing an illegitimate aim. It is not the law that mala fide in the sense of improper motive should be established only by direct evidence. But it must be discernible from the order impugned or must be shown from the established surrounding factors which preceded the order. If bad faith would vitiate the order, the same can, in our opinion, be deduced as a reasonable and inescapable inference from proved facts. (S. Pratap Singh v. State of Punjab AIR 1964 SC 72). It cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility. As noted by this Court in E. P. Royappa v. State of Tamil Nadu and Another (AIR 1974 SC 555), Courts would be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. (See Indian Railway Construction Co. Ltd. v. Ajay Kumar (2003) 4 SCC
579)."::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 22
27. Courts can interfere in tender or contractual matters in exercise of power of judicial review only in case the process adopted or decision made by the authority is malafide or intended to favour .
someone or the process adopted or decision made is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with relevant law could have reached and lastly in case the public interest is affected. If the answers to these questions are in the negative, then there should be no interference of by this Court in exercise of its powers under Article 226 of the Constitution of India.
28. rt Principles of judicial review under Article 226 of the Constitution of India would apply to the exercise of contractual powers by the Government only in case the process adopted or decision making process of the authorities is wrong and illegal and in order to prevent arbitrariness or favoritism.
29. Reliance is further placed on Tata Cellular versus Union of India (1994) 6 SCC 651, whereby Apex Cout has laid down the limitations in relation to the scope of judicial review of administrative decisions in exercise of powers awarding contracts:(SCC pp 687-88, para 94)
30. In the instant case, the decision regarding cancellation of the tender is a bonafide one and is otherwise in the larger public interest because by not adhering to e-tendering, rules were violated and as such for a fair and transparent tendering, e-tendering is necessary. Further, e-tendering would increase healthy competition ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP 23 amongst the participants, thereby saving the public exchequer. It is not a fit case to exercise powers of judicial review as there is no violation of the provisions of law and further there is no procedural .
aberration or error in assessment. It is more than settled that power of judicial review will not be permitted to invoke to protect private interest at the cost of public interest and reliance is placed on a judgment delivered by the Apex Court in Jagdish Mandal versus State of Orissa and others (2007) 14 SCC 517 wherein of the Hon'ble Supreme Court has held that before interfering in tender or contractual matters in exercise of judicial review, Courts rt should ascertain whether process adopted or decision made by the authority is mala fide or intended to favour some and whether process adopted or decision made is so arbitrary and irrational that the Court can say that the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached, and also whether public interest is affected.
31. Applying the aforesaid test to the instant case, the writ petition merits to be dismissed and is accordingly dismissed.
Pending applications, if any, are also disposed of.
(Mansoor Ahmad Mir) Chief Justice (Sandeep Sharma) Judge December 7, 2016 (vikrant) ::: Downloaded on - 15/04/2017 21:41:46 :::HCHP