Rajasthan High Court - Jaipur
M/S. Ultratech Cement Ltd., (Utcl) vs State Of Rajasthan on 6 March, 2020
Author: Inderjeet Singh
Bench: Inderjeet Singh
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writ Petition No. 1713/2020
M/s. Ultratech Cement Ltd., (Utcl), A Company Incorporated
Under The Companies Act, 1956, Having Its Registered Office At
2Nd Floor, B Wing, Ahura Centre, Mahakali Caves Road, Midc,
Andheri (East), Mumbai -400093 And Regional Office At 405,
4Th Floor, Jaipur Centre, B2 By Pass Circle, Tonk Road, Jaipur -
302018, Through Its Authorized Signatory Sh. Sanjay Mantri.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary,
Department Of Energy, Government Of Rajasthan,
Secretariat, Near Statue Circle, Jaipur-302005
2. Chairman And Managing Director, Rajasthan Rajya Vidyut
Utpadan Nigam Ltd., Vidyut Bhawan, Jyoti Nagar, Jan
Path, Jaipur-302005.
3. Additional Chief Engineer (Fuel, Jaipur), Rajasthan Rajya
Vidyut Utpadan Nigam Ltd., Vidyut Bhawan, Jyoti Nagar,
Jan Path, Jaipur-302005.
----Respondents
For Petitioner(s) : Mr. Kamlakar Sharma, Senior Counsel assisted by Mr. Vivek Dangi, Mr. Hitesh Jatawat, Mr. James Bedi & Ms. Sommya Chaturvedi.
For Respondent(s) : Mr. M.S. Singhvi, Advocate General, assisted by Mr. Sheetanshu Sharma & Mr. Darsh HON'BLE MR. JUSTICE INDERJEET SINGH Order 06/03/2020
1. This writ petition has been filed by the petitioner with the following prayers :-
"It is, therefore, prayed that the Writ Petition filed by the Petitioner may kindly be allowed with costs (Downloaded on 07/03/2020 at 09:32:17 PM) (2 of 28) [CW-1713/2020] and by an appropriate writ, order or direction this Hon'ble Court may be pleased to:
1. Call for entire record of Tender No.(TN-
26/2019-20/SE/(Fuel)/Jaipur) dated 26.08.2019 including Note Sheets at para 98 to 103/N, 108 to 112/N, 120 to 130/N, 134 to 140/N and 142 to 153/N and Minutes of Meetings held on 23.12.2019.
2. Quash and set aside the impugned Office Order dated 06.01.2020 (ANNEXURE-16) for cancellation of Tender No.(TN-26/2019-20/SE/ (Fuel)/Jaipur) dated 26.08.2019 except for KSTPS unit no.7.
3. Direct the Respondents to accept the bid and issue Letter of Acceptance (LoI) to Petitioner Company for allocation of fly ash from KaTPP Jhalawar Unit 1 & 2 as per Tender No.(TN-26/2019- 20/SE/(Fuel)/Jaipur) dated 26.08.2019.
4. Any other appropriate Writ, Order or Direction, in the present facts and circumstances of the case, which are deemed just and proper by this Hon'ble Court may also be passed in favour of the Petitioner."
2. Brief facts of the case are that the respondent-RRVUNL invited tender no.(TN-26/2019-20/SE/(Fuel)/Jaipur) dated 26.08.2019 for e-procurement for sale/collection of ESP dry fly ash from its various coal based TPPs located at KSTPS (Kota), SSTPS (Suratgarh), CTPP (Chhabra), KaTPP (Jhalawar) and the last date for submission of the bid was 23.09.2019 which was time to time extended vide respective corrigendums upto 23.10.2019. The petitioner as well as other companies submitted their tenders and participated in the process.
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3. Looking to the respective rates received from the various companies, the petitioner company was requested to depute its fully authorized representative to attend the meeting which was scheduled to be held on 16.12.2019 for techno-commercial discussions regarding sale of dry fly ash. On 16.12.2019 the authorized representative of the petitioner company participated in the aforesaid meeting where discussions were held for techno- commercial and on 17.12.2019 the petitioner company was requested by the respondent RRVUNL to offer their best price for sale/collection of ESP dry fly ash from KaTPP unit 1 & 2 and vide letter dated 20.12.2019 the petitioner company intimated to the respondent RRVUNL that they have already offered their best price. After discussion the respondent detailed work order was issued in favour of M/s. J.K. Cement Limited @ Rs.502/- per MT for KSTP Kota, Unit 7.
4. Subsequent to the offer submitted by the petitioner on 20.12.2019 a meeting was conducted by the Wholetime Directors of the respondent RRVUNL on 03.01.2020 and after detailed discussions it was decided to drop the NIT for sale collection of ESP dry fly ash from various coal based thermal power plants of RVUN against TN-26 2019-20/SE(Fuel-1)/Jaipur except for KSTP Unit no.7-for which order has been placed on M/s. J.K. Cement Ltd. @ Rs.502 PMT and accordingly final decision to cancel the NIT was taken on 03.01.2020 and it was decided to publish fresh NIT with modified PQR specification for better participation and communicated to the petitioner company vide office order dated 06.01.2020.
5. Learned Senior Counsel appearing on behalf of the petitioner submitted that the action of the respondents RRVUNL is in (Downloaded on 07/03/2020 at 09:32:17 PM) (4 of 28) [CW-1713/2020] violation of Section 26 (1) & (3) of the Rajasthan Transparency in Public Procurement Act,2012 (hereinafter to be referred as the Act of 2012). Learned Senior Counsel further submitted that the respondent RRVUNL have also violated the provisiosn of Rule 69 of the Rajasthan Transparency in Public Procurement Rules,2013 (hereinafter to be referred as the Rules of 2013) as the respondents while cancelling the tender have not applied their mind. Learned Senior Counsel further submits that the reason recorded for cancelling the tender is not a valid reason in the eye of law more particularly the said reason has not been communicated to the petitioner. Learned Senior Counsel further submits that the rates submitted by the petitioner company have not been properly considered by the respondents RRVUNL in their discussion. Learned Senior Counsel appearing for the petitioner in support of his contentions relied upon the judgments passed in the respective matters which are as follows :-
6. In the matter of the Collector of Monghyr and Ors. vs. Keshav Prasad Goenka and Ors., reported in AIR 1962 Supreme Court 1694, in paras-10,12,13,15 & 16 it has been held as under :-
"10. The notice, determination and enquiry contemplated by sections 3 to 5 would normally take some little time before the work, it decided upon, could be put into execution and be effected. Emergencies might arise such as a sudden inundation, unexpected rains etc. by reason of which repairs have to be undertaken immediately in order to avoid danger to an irrigation work which would not brook any delay. It is obvious that it is to provide for such a contingency that section 5A was introduced. It dispenses with notice of (Downloaded on 07/03/2020 at 09:32:17 PM) (5 of 28) [CW-1713/2020] an enquiry and an enquiry which might follow the notice and denies to the landholder or other person who is ultimately charged with the liability to meet the cost of the repair the opportunity of pointing out to the Collector that there is no need for the repair or that the repair could be effected at less cost. That the power under the section can be invoked only in an emergency is not disputed before us, but what the learned counsel for the appellant submitted was that section 5A vested in the Collector an administrative jurisdiction and that it contemplated action being taken on his objective satisfaction that an emergency exists. It is unnecessary for the purposes of the present that appeals to consider the question whether the satisfaction of the Collector under section 5A indicated by the words "whenever the Collector ............ is of opinion" is purely a subjective satisfaction or posits also that he should reach that satisfaction only on relevant material and that it would be open to a party affected by the order to challenge the validity of the order by establishing the absence of any relevant material for such as satisfaction. We shall assume that (a) the Collector is exercising merely an administrative jurisdiction and not functioning as a quasi-judicial authority, (b) that what matters and what confers on him jurisdiction to act under section 5A is his subjective satisfaction that the delay in the repair of an existing irrigation work which may be occasioned by a proceedings commenced by notice under section 3, leads or is likely to lead to the consequences set out in the latter part of sub-section (1) of section 5A. If these had been the only statutory requirements, learned Counsel would certainly be on firmer ground, but the statute does not stop with this but proceeds to add a direction to the Collector that the reasons for his opinion should be recorded by him. There is no doubt that on the texture of the provision the recording of the (Downloaded on 07/03/2020 at 09:32:17 PM) (6 of 28) [CW-1713/2020] reasons is a condition for the emergency of the power to make the order under sub-section (1).
12. We feel unable to accept the submission of learned Counsel that in the context in which the words "for the reasons to be recorded by him" occur in section 5A and considering the scheme of Ch. II of the Act, the requirement of these words could be held to be otherwise than mandatory. It is needless to add that the employment of the auxiliary verb "shall" is inconclusive and similarly the mere absence of the imperative is not conclusive either. The question whether any requirement is mandatory or directory had to be decided not merely on the basis of any specific provision which, for instance, sets out the consequence of the omission to observe the requirement, but on the purpose for which the requirement has been enacted, particularly in the context of the other provisions of the Act and the general scheme thereof. if would, inter alia, depend on whether the requirement is insisted on as a protection for the safeguarding of the right of liberty of person or of property which the action might involve.
13. Let us now examine the provision with reference to the several relevant matters we have just set out. Firstly, on the main scheme of the Act and what one might term the normal procedure, is that indicated by sections 3 to 5 where there is ample opportunity afforded to persons affected to put forward their objections and prove them before any pecuniary liability is fastened upon them. Section 5A constitutes a departure from this norm. It is obviously designed to make provision for cases where owing to an emergency it is not possible to comply with the requirements of sections 3 to 5 of affording an opportunity to affected persons to make out a case that there is no justification for burdening them with any pecuniary obligation or pecuniary obligation beyond a particular extent. It is in (Downloaded on 07/03/2020 at 09:32:17 PM) (7 of 28) [CW-1713/2020] the context of this consideration that the Court has to consider whether the requirement that reasons should be recorded by the Collector in mandatory or not. If the question whether the circumstances recited in section 5A(1) exist or not is entirely for the Collector to decide in his discretion, it will be seen that the recording of the reasons is the only protection which is aforesaid to the persons affected to ensure that the reasons which impelled the Collector were those germane to the content and scope of the power vested in him. It could not be disputed that if the reasons recorded by him were totally irrelevant as a justification for considering that an emergency had arisen or for dispensing with notice and enquiry under sections 3 to 5, the exercise of the power under section 5A would be void as not justified by the statute. So much learned Counsel for the appellant had to concede. Both if in those circumstances the section requires what might be termed a "speaking order" before persons are saddled with liability we consider that the object with which the provision was inserted would be wholly defeated and protection afforded nullified, if it were held that the requirements was anything but mandatory.
15. There are two matters, which though some-what inter-related are never the less distinct and separate. One is the conclusion or finding of the Collector that the state of circumstances set out in section 5A(1) exist, and the other the reason why and the grounds upon which the Collector reaches that conclusion that in the circumstances existing in a particular case it cannot brook the delay which the resort to the normal procedure of notice and enquiry for which provisions is made by sections 3 to 5 should be departed from.
16. To suggest that by a recital of the nature of the repairs required to be carried out and employing the language of section 5A(1) the officer has recorded his reasons for invoking section 5A is to confuse the (Downloaded on 07/03/2020 at 09:32:17 PM) (8 of 28) [CW-1713/2020] recording of the conclusion of the officer with the reasons for which he arrived at that conclusion. Besides just as it would not be open to argument that the terms of section 5A(1) will be attracted to cases where there is factually an emergent need for repairs of the type envisaged by the section but the Collector does not so record in his order; similarly the factual existence of reasons for the Collector's conclusion would not avail where he does not comply with the statutory requirement of starting them in his order. The reports of the Estimating Officer or of the Overseer which were relied on in this context would only indicate that those officers considered that action under section 5A was called for. Several of the reported referred to in this connection, extract the material words of section 5A(1) and conclude with a recommendation to the Sub- Divisional Officer who was vested with the powers of a Collector that it was a fit case for action being taken under section 5A. What the section requires is that on the basis of materials which exists - this might include the reports of officers as well as information gathered by the Collector himself by personal inspection or after enquiry - he should reach the conclusion that irrigation works for the purposes set out in section 5A should be immediately taken on hand and completed and that there is such an emergency in having the work completed which will not brook that amount of delay which the notice and proceedings under sections 3 to 5 would entail. It is not therefore the presence of the material that is of sole relevance or the only criterion but the Collector's opinion as to the urgency coupled with his recordings his reasons why he considers that the procedure under sections 3 to 5 should not be gone through. We are therefore unable to accept the submission the reports of the Overseers or Estimating Officers would obviate the infirmity arising from the failure of the Collector to record his reasons as required (Downloaded on 07/03/2020 at 09:32:17 PM) (9 of 28) [CW-1713/2020] by section 5A(1). From the fact that under section 5A(1) the power of the Collector to make an order emerges on his being bona fide satisfied regarding the matters set out in the sub-section, it does not follow either that the reasons why he has formed that opinion are immaterial, or that it is unnecessary for him to state those reasons in the order that he makes, and that his omission to do so could be made up by the State adducing sufficient grounds therefore when the validity of the order is challenged. We have thus no hesitation in holding (a) that the requirement that the Collector should record his reasons for the order made is mandatory and (b) that this requirement had not been complied with in the cases before us, and (c) that in the circumstances the order of the Collector was therefore null and void.
7. In the matter of Union of India (UOI) and Ors. vs. Mohan Lal Capoor and Ors. reported in AIR 1974 Supreme Court 87, in para- 28 it has been held as under :-
"28. In the context of the effect upon the rights of aggrieved persons, as members of a public service who are entitled to just and reasonable treatment, by reason of protections conferred upon them by Articles 14 and 16 of the Constitution, which are available to them throughout their service, it was incumbent on the Selection Committee to have stated reasons in a manner which would disclose how the record of each officer superseded stood in relation to records of others who were to be preferred, particularly as this is practically the only remaining visible safeguard against possible injustice and arbitrariness in making selections if that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which (Downloaded on 07/03/2020 at 09:32:17 PM) (10 of 28) [CW-1713/2020] certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable. We think that it is not enough to say that preference should be given because a certain kind of process was gone through by the Selection Committee. This is all that the supposed statement of reasons amounts to. We, therefore, think that the mandatory provisions of Regulation 5(5) were not complied with. We think that reliance was rightly placed by respondents on two decisions of this Court relating to the effect of non-compliance with such mandatory provisions. These were : Associated Electrical Industries (India) Pvt. Ltd. Calcutta v. Its Workmen, AIR 1967 SC 284 and the Collector of Monghyr and Ors. v. Keshav Prasad Goenka and Ors. [1963]1SCR98 = (AIR 1962 SC 1694)."
8. In the matter of M/s. Star Enterprises and Ors. vs. City and Industrial Development Corporation of Maharashtra Ltd. and Ors., reported in (1990) 3 SCC 280, in paras-9 & 10 it has been held as under :-
"9. The question which still remains to be answered is as to whether when the highest offer in response to an invitation is rejected would not the public authority be required to provide reasons for such action? Mr. Dwivedi has not asked us to look for a reasoned decision but has submitted that it is in the interest of the public authority itself, the State and every one in the society at large that reasons for State action are placed on record and are even communicated to the persons from whom the offers came so that the dealings remain above board; the interest of the public authority is adequately (Downloaded on 07/03/2020 at 09:32:17 PM) (11 of 28) [CW-1713/2020] protected and a citizen knows where he stands with reference to his offer. What this Court said in State of U.P. vs. Raj Narain may be usefully recalled here: (SCC p.453, para 74) "In a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way, by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing. The right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary, when secrecy, is claimed for transactions which can, at any rate, have no repercussion on public security. To cover with veil of secrecy, the common routine business, is not in the interest of the public."
10. In recent times, judicial review of administrative action has become expansive and is becoming wider day by day. The traditional limitations have been vanishing and the sphere of judicial scrutiny is being expanded. State activity too is becoming fast pervasive. As the State has descended into the commercial field and giant public sector undertakings have grown up, the stake of the public exchequer is also large justifying larger social audit, judicial control and review by opening of the public gaze; these necessitate recording of reasons for executive actions including cases of rejection of highest offers. That very often involves long stakes and availability of reasons for action on the record assures credibility to the action; disciplines public conduct and improves the culture of accountability. Looking for reasons in support of such action provides an opportunity for an objective review in appropriate cases both by the administrative superior and by the judicial process. The submission of Mr. Dwivedi, therefore, commends itself to our acceptance, namely, that when (Downloaded on 07/03/2020 at 09:32:17 PM) (12 of 28) [CW-1713/2020] highest offers of the type in question are rejected reasons sufficient to indicate the stand of the appropriate authority should be made available and ordinarily the same should be communicated to the concerned parties unless there be any specific justification not to do so."
9. In the matter of State of Punjab and Ors. vs. Shreyans Indus Ltd. and Ors., reported in (2016) 4 SCC 769, in para-8 it has been held as under :-
"8. A mere reading of the aforesaid provision would reflect that wherever return is filed by the Assessee, assessment is to be made within a period of three years from the last date prescribed for furnishing the return in respect of such period. On the other hand, in those cases where return is not filed or any dealer, who is liable to pay the tax under the Act, does not get himself registered therein, the period of assessment prescribed is five years. We are not concerned with the alternate situation as in the instant appeals not only the Assessees are registered dealers, they had also filed their returns regularly within the prescribed period and, therefore, assessments were to be completed within a period of three years from the last date prescribed for furnishing the returns, which is the normal period prescribed. At the same time, Sub- section (10) of Section 11 gives power to the Commissioner to extend a period of three years. Interestingly, there is no upper limit prescribed for which the period can be extended, meaning thereby such an extension can be given, theoretically, for any length of time. This discretion is, however, controlled by obligating the Commissioner to give his reasons for extension, and such reasons are to be recorded in writing. Obviously, the purpose of giving reasons in writing is to ensure that the power to extend the period (Downloaded on 07/03/2020 at 09:32:17 PM) (13 of 28) [CW-1713/2020] of limitation is exercised for valid reasons based on material considerations and that power is not abused by exercising it without any application of mind, or mala fide or on irrelevant considerations or for extraneous purposes. Such an order of extension of time, naturally, is open to judicial review, albeit within the confines of law on the basis of which such judicial review is permissible."
10. In the matter of Kranti Associates Pvt. Ltd. and Ors. vs. Masood Ahmed Khan and Ors., reported in (2010) 9 SCC 496, in paras-12, 15 & 47 it has been held as under :-
"12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognized a sort of demarcation between administrative orders and quasi- judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipak and Ors. v. Union of India
15. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the 'inscrutable face of a Sphinx'.
47. Summarizing the above discussion, this Court holds:
a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.(Downloaded on 07/03/2020 at 09:32:17 PM)
(14 of 28) [CW-1713/2020] b. A quasi-judicial authority must record reasons in support of its conclusions.
c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.
f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. g. Reasons facilitate the process of judicial review by superior Courts.
h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
j. Insistence on reason is a requirement for both judicial accountability and transparency.(Downloaded on 07/03/2020 at 09:32:17 PM)
(15 of 28) [CW-1713/2020] k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process.
m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya v.
University of Oxford 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions".
o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process".
11. In the matter of State of Punjab and Ors. vs. Bandeep Singh and Ors., reported in (2016) 1 SCC 724, in paras-4, 7 & 8 it has been held as under :-
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(16 of 28) [CW-1713/2020] "4. There can be no gainsaying that every decision of an administrative or executive nature must be a composite and self sustaining one, in that it should contain all the reasons which prevailed on the official taking the decision to arrive at his conclusion. It is beyond cavil that any Authority cannot be permitted to travel beyond the stand adopted and expressed by it in the impugned action. If precedent is required for this proposition it can be found in the celebrated decision titled Mohinder Singh Gill v. The Chief Election Commissioner, of which the following paragraph deserves extraction:
8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (AIR p.18, para 9):
9.......Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of Explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.
Orders are not like old wine becoming better as they grow older.
7. The same principle was upheld more recently in Ram Kishun v. State of U.P., However, we must hasten to clarify that the Government does not have a carte blanche to take any decision it chooses to; it cannot take a capricious, arbitrary or prejudiced decision. Its decision must be informed and impregnated with (Downloaded on 07/03/2020 at 09:32:17 PM) (17 of 28) [CW-1713/2020] reasons. This has already been discussed threadbare in several decisions of this Court, including in Sterling Computers Ltd. v. M & N Publications Ltd., Tata Cellular v. Union of India, Air India Ltd. v. Cochin International Airport Ltd., B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., and Jagdish Mandal v. State of Orissa.
8. In the impugned Judgment, the High Court has rightly concluded that no sustainable justification and rationalization was recorded in writing at the relevant time for ordering the re-auction of only the two subject properties. However, we should not be understood to have opined that the Government is bound in every case to accept the highest bid above the reserve price. Needless to say, the presence of cartelization or "pooling" could be a reason for the cancellation of an auction process. In addition, a challenge on the ground that the property has fetched too low a bid when compared to the prevailing market price, would also be valid and permissible provided this approach has been uniformly adhered to. In the case at hand, however, while the latter was ostensibly the reason behind the decision for conducting a fresh auction, no evidence has been placed on the record to support this contention. The highest bids, marginally above the reserve price, have been accepted in the self-same auction. The factual scenario before us is clearly within the mischief which was frowned upon in Mohinder Singh Gill. We therefore uphold the impugned judgment for all the reasons contained therein. The assailed action of the Appellant is not substantiated in the noting, which ought at least to have been conveyed to the Respondents.
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12. In the matter of Public Interest Foundation and Ors. vs. Union of India (UOI) and Ors., reported in 2018 AIR (SC) 4550, in para-100 it has been held as under :-
"100. In Allied Motors Limited v. Bharat Petroleum Corporation Limited (2012) 2 SCC 1, reference was made to the celebrated judgment of the Privy Council in Nazir Ahmad v. King Emperor AIR 1936 PC 253 wherein the principle has been enunciated "that where a power is given to do a certain thing in a certain way, the thing must be done in that way, or not at all." Other methods of performance are necessarily forbidden. This principle has been reiterated and expanded by the Supreme Court in several decisions."
13. In the matter of Mangal Amusement Park Pvt. Ltd. vs. State of M.P. and Ors., M.P. No.313 of 1992, decided on 24.03.1994, the Division Bench of Madhya Pradesh High Court in para-40 & 43 held as under :-
"40. Look at the case at hand the Petitioner on the basis of the tender notice enters into and seeks reliance with International Amusement, New Delhi incurring financial burden, association contractual obligations, admittedly fulfilling all requirements of the tender conditions. And even the Respondent-Authority spending a huge amount in publishing notices (tenders) deputing its Engineers for visiting in amusement parks in different cities of the country and coming out of with public advertisement announcing the setting up of the amusement park on the eve of Republic Day (Ann. 7R) announcing to the world at large that all the procedural requirements of establishing the amusement parks were towards completion; but abruptly taking a decision without assigning any reason, rejected all tenders. Here comes the legitimate expectation of a tenderer that the Authority inviting tenders would act fairly and free from arbitrariness.(Downloaded on 07/03/2020 at 09:32:17 PM)
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43. Having held the Respondent- Authority's action of rejecting all tenders as arbitrary and violative of Article
14 of the Constitution, a direction to consider the Petitioner's tender in accordance with law must follow and it is accordingly directed."
14. Learned Advocate General while making reference of condition no.12 of the tender notice contended that the respondents RRVUNL have every right to accept or reject any bid, either in full or in part during the bidding process and reject all bids at any time prior to allocation of quantity, without assignign any reason thereof. Learned Advocate General further submitted that the petitioner was very much in the knowledge of the negotiations as well as the reason for cancellation of the tender. Learned Advocate General further submitted that after negotiations with the petitioner, the Wholetime Directors of the respondents RRVUNL considered the proposal submitted by the petitioner as well as other companies and after thorough discussions took a decision to cancel the said tender and to issue fresh NIT for better participation. Learned Advocate General further submitted that Ministry of Environment and Forest vide notification dated 03.11.2009 had put to an end the regime of free supply of Dry Fly Ash and obliged the Thermal Power Plants to obtain the best possible price therefor through competitive bidding. Learned Advocate General further submitted that in the better interest of the public at large the respondents have taken a conscious decision to issue fresh NIT for maximization of the revenue. Learned Advocate General further submitted that the petitioner cannot press upon the respondents to accept a particular bid and it is for the respondents either to accept or reject the bid. Learned Advocate further submitted that once the (Downloaded on 07/03/2020 at 09:32:17 PM) (20 of 28) [CW-1713/2020] petitioner has participated in the process with open eyes reading the conditions of the tender document more particularly condition no.12 of the tender document which clearly provides that the respondents have every right to accept or reject the bid, therefore, the petitioner has waived its right to challenge the same. Learned Advocate General further submitted that the petitioner has not levelled any allegation of malafide or arbitrariness in the process of e-tendering and not only for Jhalawar unit but for four other units the tender has been cancelled. Learned Advocate General further submitted that they have also initiated the process of fresh tender on 06.02.2020 including KaTPP (Jhalawar) Unit 1 & 2 for which the petitioner has also submitted its bids, therefore, the petitioner is now estopped from challenging the process of bidding. In support of his contentions, the learned Advocate General relied upon the judgments passed in the respective matters which are as under :-
15. In the matter of State of Uttar Pradesh and Ors. vs. AL Faheem Meetex Private Ltd. and Ors., reported in (2016) 4 SCC 716, in paras-11 to 14 it has been held as under :-
"11. It is argued by the learned Counsel for the Appellant that the High Court is not justified in quashing the decision of the BEC dated November 22, 2010 without considering the terms as contained in Clause 2.7.1 of the RFP and the Guidelines laid down vide G.O. dated June 29, 2007 for selection of Developers for PPP Projects wherein discretion is conferred on the authority to accept or reject any or all bid proposals. The steps for selection of consultant as laid down in Part-I of the Guidelines are applicable for the selection of Developer as well. Chapter II of Part I of the Guidelines specifically provides that the employer will have the right to reject all proposals. The relevant portion of the Guidelines are as under:(Downloaded on 07/03/2020 at 09:32:17 PM)
(21 of 28) [CW-1713/2020] "Rejection of All Proposals, and re-invitation The Employer will have the right to reject all proposals. However, such rejections should be well considered and normally be in cases where all the bids are either substantially in deviation to the TOR or considered unreasonably high in cost. If it is decided to re-invite the bids, the terms of reference should be critically reviewed/modified so as to address the reasons of not getting any acceptable bid in the earlier invitation for Bids."
12. The learned Counsel also pointed out that Clause 2.7 of RFP is also to the same effect which empowers the Authority to accept or reject any bid proposal and annul the whole bidding process.
13. The Learned Counsel for Respondent 1, on the other hand, impressed upon the reasons given by the High Court and submitted that the appeal be dismissed.
14. We find force in the aforesaid argument of the learned Counsel for the Appellants. In the first instance, it is to be noted that BEC is only a recommendatory authority. It is the Competent Authority which is to ultimately decide as to whether the recommendation of BEC is to be accepted or not. We are not entering into the discussion as to whether this Competent Authority is the State Government or the Municipal Corporation. The fact remains that there is no approval by either of them. Matter has not even reached the Competent Authority and no final decision was taken to accept the bid of Respondent 1 herein. Much before that, when the BEC was informed that there were only two valid bids before it when it made its recommendation on September 08, 2010 and as per the Financial Rules there must be three or more bids to ensure that bidding process becomes competitive, the BEC realised its mistake and recalled its recommendation dated September 08, 2010. It cannot be said that such a decision was unfair, mala fide or based on irrelevant considerations. This, coupled with the fact that the authority has right to accept or reject any bid and even to annul the whole bidding process, the High Court was not justified in interfering with such a decision of the BEC."
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16. In the matter of State of Jharkhand and Ors. vs. Cwe-Soma Consortium, reported in (2016) 14 SCC 172, in para-23 it has been held as under :-
"23. The right to refuse the lowest or any other tender is always available to the government. In the case in hand, the Respondent has neither pleaded nor established mala fide exercise of power by the Appellant. While so, the decision of the tender committee ought not to have been interfered with by the High Court. In our considered view, the High Court erred in sitting in appeal over the decision of the Appellant to cancel the tender and float a fresh tender. Equally, the High Court was not right in going into the financial implication of a fresh tender."
17. In the matter of Central Coalfields Limited and Another. vs. SLL-SML (Joint Venture Consortium) and Ors., reported in (2016)8 SCC 622, in para-47 it has been held as under :-
"47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty the terms of the NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision "that no responsible authority acting reasonably and in accordance with relevant law could have reached" as held in Jagdish Mandal followed in Michigan Rubber.(Downloaded on 07/03/2020 at 09:32:17 PM)
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18. In the matter of Himachal Pradesh Housing and Urban Development Authority vs. Universal Estate and Another., reported in (2010) 14 SCC 253, in para-23 it has been held as under :-
"23. In Air India Ltd. v. Cochin International Airport Ltd., the Court while dealing with a matter involving award of contract, made it clear that the public authority is free not to accept the highest or the lowest offer and the scope of judicial review is confined to the scrutiny of decision making process, which can be annulled if the same is found to be vitiated by malafides, arbitrariness or total unreasonableness. Some of the observations made in the judgment are extracted below: (SCC p.623-24, para 7) "7. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article (Downloaded on 07/03/2020 at 09:32:17 PM) (24 of 28) [CW-1713/2020] 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene. (Emphasis supplied)"
19. In the matter of South Delhi Municipal Corporation vs. Ravinder Kumar and another., reported in (2015) 15 SCC 545, in para-18.3 & 21 it has been held as under :-
"18.3. Further, the High Court has conveniently ignored the very relevant aspect of the case namely, that the Appellant-
Corporation, before issuance of a particular tender notice, is required to satisfy itself about the reasonableness of the rates quoted by the bidders keeping in view the prevalent market rates in the Corporation Area. The internal system for financial check by the department concerned of the Appellant- Corporation justifies the reasonableness of the rates offered by the bidders by comparing them with the rates at which other similar works were awarded by the Appellant-
Corporation in the recent past in favour of successful bidders. For the aforesaid valid reason, the Appellant-Corporation being the custodian of public money, with bonafide intention to get the best price, has cancelled its earlier tender notice referred to supra and invited fresh bids by issuing another tender notice dated 13.12.2012.
21. The decision of the High Court in quashing the Appellant-Corporation's decision of cancelling the earlier tender vide corrigendum dated 30.11.2012 and also the subsequent e-tender process carried out by it pursuant to notice No. 24 dated 13.12.2012 is vitiated in law and therefore, the same is liable to be set aside."(Downloaded on 07/03/2020 at 09:32:17 PM)
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20. In the matter of Haryana Urban Dev. Authority and Ors. vs. Orchid Infrastructure Developers P. Ltd., reported in (2017) 4 SCC 243, in para-13 it has been held as under :-
13. It is a settled law that the highest bidder has no vested right to have the auction concluded in his favour. The Government or its authority could validly retain power to accept or reject the highest bid in the interest of public revenue. We are of the considered opinion that there was no right acquired and no vested right accrued in favour of the Plaintiff merely because his bid amount was highest and had deposited 10% of the bid amount. As per Regulation 6(2) of the 1978 Regulations, allotment letter has to be issued on acceptance of the bid by the Chief Administrator and within 30 days thereof, the successful bidder has to deposit another 15% of the bid amount. In the instant case allotment letter has never been issued to the Petitioner as per Regulation 6(2) in view of non-acceptance of the bid. Thus, there was no concluded contract. Regulation 6 of the 1978 Regulations is extracted hereunder:
6. Sale of lease of land or building by auction.-(1) In the case of sale or lease by auction, the price/premium to be charged shall be such reserve price/premium as may be determined taking into consideration the various factors as indicated in Sub-Regulation (1) of Regulation 4 or any higher amount determined as a result of bidding in open auction.(Downloaded on 07/03/2020 at 09:32:17 PM)
(26 of 28) [CW-1713/2020] (2) 10 per cent of the highest bid shall be paid on the spot by the highest bidder in cash or by means of a demand draft in the manner specified in Sub-Regulation (2) of Regulation 5. The successful bidder shall be issued allotment letter in Form 'CC' or 'C-II' by registered post and another 15 per cent of the bid accepted shall be payable by the successful bidder, in the manner indicated, within thirty days of the date of allotment letter conveying acceptance of the bid by the Chief Administrator; failing which the 10 per cent amount already deposited shall stand forfeited to the Authority and the successful bidder shall have no claim to the land or building auctioned.
(3) The payment of balance of the price/premium, rate of interest chargeable and the recovery of interest shall be in the same manner as provided in Sub-
Regulations (6) and (7) of Regulation 5.
(4) The general terms and conditions of the auction shall be such as may be framed by the Chief Administrator from time to time and announced to the public before auction on the spot."
21. Heard counsel for the parties and perused the record.
22. The first argument raised by learned senior counsel appearing for the petitioner regarding violation of Section 26 of the Act of 2012 of non-communication of the reason is not acceptable as the petitioner had participated in the process of negotiations and thereafter the final decision was taken by the respondents RRVUNL on 03.01.2020 and that decision has been submitted by the petitioner on record along with the writ petition as Annexure-15 of the writ petition, therefore the petitioner was very much in the knowledge of the decision taken by the (Downloaded on 07/03/2020 at 09:32:17 PM) (27 of 28) [CW-1713/2020] respondents RRVUNL and mere non-mentioning of the reason in the letter of cancellation dated 06.01.2020 will not make any difference as the decision taken was in the knowledge of the petitioner.
23. So far as the argument raised of violation of Rule 69 of the Rules,2013 is concerned, the same is not acceptable for the reason that the respondents RRVUNL have given opportunity to the petitioner to participate in the discussion/negotiations to submit their best offer price and in reply thereto the petitioner informed the respondents that they have already offered their best price.
24. The next argument regarding non-application of mind as well as arbitrariness of the respondents in cancelling the tender is also not acceptable as the respondents after holding due deliberations have taken a conscious decision in the interest of public at large to get maximization of the revenue and issued fresh NIT for better participation and apart from it no person as party has been impleaded by the petitioner in the writ petition, in absence thereof the argument of malafide and arbitrariness in cancelling the process of tendering does not hold any merit as besides the present one the tender for four other units has also been cancelled and the petitioner was very much in the knowledge of the decision taken by the respondents with regard to cancellation of the tender as the petitioner itself has submitted the decision taken by the Whole time Directors dated 03.01.2020 in the writ petition as Annexure-15.
25. In view of the above discussions, it is reflected from the record that while cancelling the NIT the respondents RRVUNL have recorded reason in their board meeting and in my considered view (Downloaded on 07/03/2020 at 09:32:17 PM) (28 of 28) [CW-1713/2020] the respondents RRVUNL have not committed any illegality in cancelling the NIT and issuing fresh NIT with modified PQR specifications for better participation and the reason assigned by the respondents RRVUNL seems to be reasonable as prior to cancelling the NIT the petitioner was given opportunity to offer their best price; secondly in my considered view in the matters of award of contract the respondents are free not to accept the highest or lowest offer and the scope of judicial review is confined to the scrutiny of the decision making process which can be interfered if the same is found to be arbitrary or malafide or unreasonable. While taking the aforesaid view in the matter, I have gone through the judgments passed by the Hon'ble Supreme Court from time to time. Lastly, since the respondents RRVUNL have initiated fresh process of inviting tenders and as informed by the parties the petitioner has participated in the fresh tender process, therefore in my considered view no case is made out to interfere in the present matter.
26. In that view of the matter, the writ petition stands dismissed.
(INDERJEET SINGH),J VIJAY SINGH SHEKHAWAT /40 (Downloaded on 07/03/2020 at 09:32:17 PM) Powered by TCPDF (www.tcpdf.org)