Jharkhand High Court
Unity Infraprojects Ltd Thr Its ... vs Building Construction on 19 November, 2015
Author: Rongon Mukhopadhyay
Bench: Rongon Mukhopadhyay
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 2629 of 2015
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Unity Infraprojects Ltd., A company registered under the Indian
Companies Act, 1956, having its registered office at 1252,
Pushpanjali, Old Prabha Devi Road, Prabha Devi, P.O. and P.S. Prabha
Devi, Mumbai, Maharashtra-400025, through its Authorised Signatory-
cum-Deputy General Manager ( Business Development),
Tapash Kumar Ghosh, Son of Sri J.C. Ghosh, Resident of 224, Acharya
Prafullo Chandra Road, Shyam Bazar, P.O. and P.S. Shyam Bazar,
Kolkatta, West Bengal-700007.
......Petitioner
Versus
1. The State of Jharkhand through Secretary, Building Construction
Department, Government of Jharkhand, having its office at
Jharkhand Mantralaya, Project Building, P.O. and P.S. Dhurwa,
District-Ranchi.
2. Deputy Secretary cum Internal Finance Advisor, Building
Construction Department, Government of Jharkhand, having its
office at Jharkhand Mantralaya, Project Building, P.O. and P.S.
Dhurwa, District-Ranchi.
3. Engineer in Chief, Building Construction Department,
Government of Jharkhand, having its office at Jharkhand
Mantralaya, Project Building, P.O. and P.S. Dhurwa, District-
Ranchi.
4. Chief Engineer, Building Construction Department, Government
of Jharkhand, having its office at Jharkhand Mantralaya, Project
Building, P.O. and P.S. Dhurwa, District-Ranchi.
5. Executive Engineer (Civil Works Division), Building Construction
Department, Government of Jharkhand, having its office at
Jharkhand Mantralaya, Project Building, P.O. and P.S. Dhurwa,
District-Ranchi.
6. M/s Ram Kripal Singh Construction Pvt. Ltd., through its
Managing Director, having its office at 702, Panchwati Plaza,
Kutchery Road, P.O. G.P.O. P.S. Kotwali, District-Ranchi-834001.
7. KPC Projects Ltd, through its Managing Director, having its
office at 1-2-339/1, Street No. 6, Gagan Mahal, Domalguda,
Domalguda, Hyderabad, Telangana-500029.
8. DEC Infrastructure and Projects India Pvt. Ltd. through its
Managing Director, having its office at 2-1-434, Door No. 1/1,
Shivam Road, Nallakunta, Hyderabad-500039.
.........Respondents
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Coram: HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY
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For the Petitioner : Mr. Sumeet Gadodia, Advocate
: Mr. Anurag Kashyap, Advocate
For Respondent Nos: 1 to 5 : Mr. Ajit Kumar, AAG.
For Respondent No. 6 : Mr. Rajiv Ranjan, Sr. Advocate
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C.A.V. On 28.09.2015 Pronounced On 19/11/2015
In the instant writ application, the petitioner had prayed for the
following reliefs:-
(a) For issuance of an appropriate writ or a writ in the nature of
Certiorari for quashing the decision of the Tender
Committee dated 28th May, 2015 held under the
Chairmanship of the Engineer-in-Chief, Building
Construction Department, Government of Jharkhand
(Respondent no. 3) to the extent the petitioner's Technical
Bid has been declared ineligible.
(b) For issuance of an appropriate writ or a writ in the nature of
mandamus directing the respondents to consider the
Technical Bid of the petitioner strictly in accordance with
the terms and conditions as laid down pursuant to the e-
procurement notice dated 13.03.2015 invited for the works
of "construction of new Jharkhand High Court Building
Complex at Dhurwa, Ranchi in Jharkhand for the year
2014-15" and, thereafter, to consequently declare the
petitioner's technical bid as eligible.
(c) For issuance of an appropriate writ or a writ in the nature of
mandamus directing the respondents to consider the Price
Bid of the petitioner and if the Bid submitted by the
petitioner is found most competitive, then to consequently
proceed to allot work in question to the petitioner.
(d) For issuance of an appropriate writ or a writ in the nature of
certiorari for quashing the decision of the Tender
Committee dated 28th May, 2015 headed by the Engineer-
in-Chief whereby and whereunder the Technical Bid of the
Respondent No. 6-M/s Ram Kripal Singh Construction has
been declared eligible in spite of the fact that the said
Bidder was not having requisite experience for carrying out
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the similar works and was not fulfilling the qualification for
Award of the contract, particularly Clause 4.5-A(b) and 4.5-
A(c) and the said bidder had no experience for carrying out
similar works of any RCC Framed Government Building
Structure.
(e) For issuance of an appropriate writ or a writ in the nature of
certiorari for quashing the decision of the Tender
Committee dated 28th May, 2015, headed by the Engineer-
in-Chief whereby and whereunder the Technical Bid of the
Respondent No.7-KPC-Projects Ltd., Hyderabad has been
declared as eligible in spite of the fact that the verification
report of the Bank Guarantee submitted by the said
Company was not received till date of opening of the
Technical Bid.
(f) For issuance of an appropriate writ or a writ in the nature of
certiorari for quashing the decision of the Tender
Committee dated 28th May, 2015, headed by the Engineer-
in-Chief whereby and whereunder the Technical Bid of the
Respondent No. 8-DEC Infrastructure & Project India Pvt.
Ltd., Hyderabad has been declared as eligible in spite of the
fact that the Tender Committee had noted in its meeting
that a similar construction work undertaken by the said
Company was damaged and news in respect thereof was
published in popular news papers.
And/or
(g) For issuance of any other appropriate order(s) as Your
Lordships may deem fit and proper for doing conscionable
justice to the petitioner.
2. During the pendency of the writ application, an interlocutory
application being I.A. No. 4200 of 2015 was filed seeking for
amendment in the writ application in view of the development
which has taken place subsequent to the filing of the writ
application and which came to the knowledge of the petitioner
on account of the counter affidavit being filed by the
respondents-State of Jharkhand.
3. The amendment application bearing I.A. No. 4200 of 2015 was
heard and the same was allowed vide order dated 5.8.2015.
The prayer in the amended writ application was as follows:-
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(a) For issuance of an appropriate writ or a writ in the nature of
Certiorari for quashing the decision of the Tender Committee
dated 28th May, 2015 held under the Chairmanship of the
Engineer-in-Chief, Building Construction Department,
Government of Jharkhand (Respondent no. 3) to the extent
the petitioner's Technical Bid has been declared ineligible.
(b) For issuance of an appropriate writ or a writ in the nature of
mandamus directing the respondents to consider the
Technical Bid of the petitioner strictly in accordance with the
terms and conditions as laid down pursuant to the e-
procurement notice dated 13.03.2015 invited for the works
of "construction of new Jharkhand High Court Building
Complex at Dhurwa, Ranchi in Jharkhand for the year
2014-15" and, thereafter, to consequently declare the
petitioner's technical bid as eligible.
(c) For issuance of an appropriate writ or a writ in the nature of
mandamus directing the respondents to consider the Price
Bid of the petitioner and if the Bid submitted by the
petitioner is found most competitive, then to consequently
proceed to allot work in question to the petitioner.
(d) For issuance of an appropriate writ or a writ in the nature of
certiorari for quashing the decision of the Tender Committee
dated 28th May, 2015 headed by the Engineer-in-Chief
whereby and whereunder the Technical Bid of the
Respondent No. 6-M/s Ram Kripal Singh Construction has
been declared eligible in spite of the fact that the said Bidder
was not having requisite experience for carrying out the
similar works and was not fulfilling the qualification for
Award of the contract, particularly Clause 4.5-A(b) and 4.5-
A(c) and the said bidder had no experience for carrying out
similar works of any RCC Framed Government Building
Structure.
(e) For issuance of an appropriate writ or a writ in the nature of
certiorari for quashing the decision of the Tender Committee
dated 28th May, 2015, headed by the Engineer-in-Chief
whereby and whereunder the Technical Bid of the
Respondent No.7-KPC-Projects Ltd., Hyderabad has been
declared as eligible in spite of the fact that the verification
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report of the Bank Guarantee submitted by the said
Company was not received till date of opening of the
Technical Bid.
(f) For issuance of an appropriate writ or a writ in the nature of
certiorari for quashing the decision of the Tender Committee
dated 28th May, 2015, headed by the Engineer-in-Chief
whereby and whereunder the Technical Bid of the
Respondent No. 8-DEC Infrastructure & Project India Pvt.
Ltd., Hyderabad has been declared as eligible in spite of the
fact that the Tender Committee had noted in its meeting
that a similar construction work undertaken by the said
Company was damaged and news in respect thereof was
published in popular news papers.
And/or
(g) For issuance of any other appropriate order(s) as Your
Lordships may deem fit and proper for doing conscionable
justice to the petitioner.
(h) For issuance of a further direction including the writ of
certiorari for quashing the Letter of Acceptance bearing
letter no. 295 dated 06.08.2015 (Annexure-13) whereby and
whereunder the bid of the respondent no. 6 for execution of
the work of "Construction of New Jharkhand High Court
Building (Complex) at Dhurwa, Ranchi in Jharkhand, for the
year 2014-15 has been accepted.
(i) For issuance of appropriate direction including the writ of
certiorari to consequently declare the agreement dated 18th
June 2015(Annexure-14) executed by and between the
respondents-State of Jharkhand through the Executive
Engineer, Special Works Division, Building Construction
Department, Ranchi with respondent no. 6 as void ab initio.
4. The factual narration of the events made in the writ application
are to the effect that the petitioner is a reputed contractor
having its business expanded through out India and is engaged
in the execution of various civil construction works including
construction of RCC Framed Government Building Structure.
The turnover of the petitioner company with respect to civil
construction work during the financial year 2012-13 and
2012-13 was Rs.2039.82 crores and Rs.1851.91 crores. An e-
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procurement notice dated 13.03.2015 was floated by the
respondents-State of Jharkhand through the Building
Construction Department including bids for the work of
"Construction of new Jharkhand High Court Building Complex at
Dhurwa, Ranchi in Jharkhand for the year 2014-15". Along with
e-procurement notice dated 13.03.2015, a copy of the National
Competitive Bidding Document dated 13.03.2015 was also
enclosed containing therein the terms and conditions for
participating in the tender and the aforesaid documents were
defined as "Standard Bidding Document for procurement of
Civil Works". In terms of what has been provided in the tender
documents, a pre-bid meeting was held under the
Chairmanship of the Engineer-in-Chief (Respondent No. 3) and
several intending bidders including the petitioner had
participated in the aforesaid pre-bid-meeting. During the course
of pre-bid-meeting, a clarification was sought for by one of the
intending bidders namely Ramky Infrastructure Ltd. as to
whether the work in any RCC Framed Building Structure can be
treated as valid experience in terms of clause 4.5-A(b) of the
tender document or not and the same was replied by the
Building Construction Department by stating that the same be
read as Any RCC Government Building Structure. Other queries
were made by various bidders and which were duly answered
by the Building Construction Department. The petitioner in
terms of e-procurement notice had submitted bank guarantee
as bid security as also the demand draft towards cost of bidding
document before the competent authority within the time
stipulated. However, in the meeting of the Tender Committee
held under the Chairmanship of respondent no. 3 on
28.05.2015, the technical bid of the petitioner was declared ineligible on the ground that the bank guarantee of the petitioner was forwarded for verification to the concerned bank, which had refused to take any responsibility towards the financial soundness of the petitioner. The Tender Committee accepted the technical bid of M/s Ram Kripal Singh Construction Ltd. (Respondent no. 6) and declared respondent no. 6 as eligible, which according to the petitioner was in variance to the terms and conditions of the bid as well as answer of the queries -7- as well as to the actual requirement, which had been clarified in the pre-bid-meeting. The petitioner in spite of its claim of fulfilling all eligibility criteria but its technical bid was declared ineligible whereas according to the petitioner although the respondent no. 6 did not match the requirement of the terms and conditions of the bid, was declared successful and therefore the petitioner has challenged both the aspects enumerated above by way of the present writ application.
5. Heard Mr. Sumit Gadodia, learned counsel for the petitioner, Mr. Ajit Kumar, learned AAG, appearing on behalf of respondent nos. 1 to 5 and Mr. Rajiv Ranjan, learned senior counsel appearing for respondent no. 6.
6. Mr. Sumit Gadodia, learned counsel for the petitioner, has firstly challenged the action of the respondent-State in declaring the respondent no. 6 as eligible in technical bid as per the decision in the meeting of the Tender Committee dated 28.05.2015. In this context, learned counsel for the petitioner has referred to e-procurement notice dated 13.03.2015, wherein the date and place of the pre-bid-meeting was mentioned and the same was to be held in order to clarify the issues and to answer questions on any matter that may be raised at that stage as stated in clause 9.2 of the "Instruction to Bidders" of the bidding document. "Instruction to Bidders"
document appended with e-procurement notice has been referred to copiously by the learned counsel for the petitioner more specifically clause 4.5(A) which spells out the conditions/qualifications, which are to be fulfilled by the bidder. Learned counsel while referring to clause 4.5(A) has submitted that respondent no. 6 was awarded the work in utter disregard and violation of the said clause as well as the other conditions, which have subsequently been referred to by him. Mr. Gadodia has referred to appendix-2-"Instruction to Bidders", which deals with the work of construction of Jharkhand High Court Building and the value of the work has been ascertained to be Rs. 133, 83,15,000/- and the quantity of work has also been enumerated therein. It has been submitted that during the pre-bid-meeting with respect to answering of queries, it was questioned by M/s Ramki Infrastructure Ltd. with respect to clause 4.5 (b) of the -8- ITB, wherein a query was put with respect to "some works" as any RCC Framed Building Structure to which a reply was given that the same has to be read as any RCC Framed Government Building Structure. It was also decided on the query made by Ramky Infrastructure Ltd. that the pre qualification criteria of building works executed under the private clients towards similar work experience will not be considered. It has been submitted that the answer to the queries made in the pre-bid- meeting had virtually shut out the respondent no. 6 in its bid to qualify for the work but as would be evident, the respondent no. 6 was favoured by the State ignoring the actual requirements/qualifications and giving a complete go-bye to the norms and procedures generally adopted and the entire exercise goes to show the ineligibility of respondent no. 6 in bidding for the work in question. Mr. Gadodia, learned counsel, has in the context of pre-bid-meeting referred to clause 9.2.4 of I.T.B and has submitted that the said clause is virtually divided into two parts. The first is circulation/transmission of the minutes of meetings including the text of questions raised and response given to all the purchasers of the bidding document. The second part of the same clause is concerned with any modification of the bidding documents which may occur as a result of pre-bid-meeting and which can be made through the issue of an addendum. In reference to the said clause, it has been submitted by the learned counsel for the petitioner that a corrigendum was issued, in which a mention had been made that the reply of pre-bid-query were uploaded and the other terms and conditions remain unchanged. Learned counsel submits that the pre-bid-meeting does not amend any terms and conditions of the ITB but it only clarifies certain issues and certain queries, about which there was some confusion but which was erased during the meeting. It has been submitted that the clarifications, which were made by the respondents- State in the pre-bid-meeting had considerable weight as the basic purpose of pre-bid-meeting was to clear the air about certain misconceptions arising out of the same ITB document. Learned counsel has also submitted that the respondent no. 6 does not qualify as it has not carried out at least one similar -9- work. Submission has been advanced that the term "at least one similar work" either can be construed in a very narrow term or be wide in its amplitude. It has been submitted that the respondents-State has been very careful in coining the said term to shower favoritism. Advancing his arguments, Mr. Gadodia has submitted that prior to making a bid for construction of Jharkhand High Court Building, the petitioner has claimed to have constructed the International Cricket Stadium at Dhurwa, Ranchi but the same was never a government structure as has been clarified as one of the prime requirements in the pre-bid-meeting. Even from the completion certificate of International Cricket Stadium, the name of the employer has been shown as Jharkhand State Cricket Association, which is dehors the terms and conditions of the bidding instruction but in spite of the apparent ineligibility of respondent no. 6, the work was still given to respondent no. 6. Attacking the counter affidavit filed by the respondent nos. 1 to 5, it has been submitted that paragraph 21 of the counter affidavit does not contain any reply with respect to contention of the petitioner on the minutes of the pre-bid-meeting and the other clarifications which had been made. Even para 22 of the counter affidavit does not contain any specific reply to the averments made by the petitioner in the writ application and merely an evasive reply has been given by the state authorities, which goes to show their inability to defend their illegal action in declaring the respondent no. 6 as a successful bidder. So far as the averments made in para 33 of the counter affidavit filed by the respondent nos. 1 to 5 is concerned, it has been submitted that it is wrong to say on the part of the respondents-State Authority that the clarifications, which had been given in pre-bid-meeting does not have any overriding effect. If that was the position, there was no necessity of holding any pre-bid-meeting as the sole purpose of the meeting was to clarify any misgiving any of the participants might have had in ITB or in the bidding process. Concluding his argument with respect to his limb of submission about non qualification of respondent no. 6, learned counsel sums up by stating that when the respondent no. 6 did not even fulfill the basic -10- eligibility criteria for participating in the technical bid, it's being successful in the backdrop of the instances referred do suggest that the respondent no. 6 was given the work in violation of the terms and conditions of ITB.
7. The second limb of argument of learned counsel for the petitioner is with respect to disqualification of the petitioner itself and it has been sought to be projected that the petitioner had duly qualified and had fulfilled all the requisite criteria but in order to favour respondent no. 6, the technical bid of the petitioner was declared ineligible.
8. Learned counsel for the petitioner has once again drawn attention of the Court to the ITB dated 13.03.2015, in which the bid security which was to be furnished was to the tune of Rs.2,67,67,000/-. Clause 16.1(d) of the ITB is with respect to the bank guarantee, which is to be furnished from any Scheduled Indian Bank from any of the branches of SBI/Nationalized/Scheduled Bank and pursuant to the said condition , the petitioner had submitted the bid security/bank guarantee. Referring to clause 23.3 of the ITB, which relates to opening of the technical bid, it has been submitted that the bids were not to be opened until and unless the conditions were fulfilled. Since the petitioner had duly furnished a bank guarantee in terms of the requirement of the ITB, it was incumbent upon the respondents-State to have considered the same and not reject the technical bid of the petitioner on some flimsy ground. Learned counsel while attacking that part of the meeting of the Tender Committee dated 28.05.2015 finding fault with the bank guarantee submitted by the petitioner has submitted that the respondents-State authorities have adopted different measures/criteria for different bidders. It has been submitted that for KPC Projects Ltd., Hyderabad, Andhra Pradesh in spite of not receiving the verification of the bank guarantee, the firm was kept in the competition on the ground that if the said firm becomes L-1, the tender has to be finalized after verification of the bank guarantee as received. This according to learned counsel for the petitioner discloses the dual policy adopted by the State Authorities. It has further been submitted that the tenor of the query made from the Union -11- Bank of India, B.S.C. Branch with respect to verification of the bank guarantee would clearly depict that in order to camouflage the main intention of the State Authorities to accord favour upon the respondent no. 6 and to throw out the petitioner from being successful in the tender process one of the questionnaire, which had been asked from the bank was whether the petitioner's firm was financially sound. The reply, which was submitted by the bank suggests that the bank has clearly denied in taking any responsibility or making any comments as regards the financial soundness of the petitioner's firm. Mr. Gadodia, learned counsel for the petitioner, continuing with his dissection of the alleged arbitrary action on the part of the State Authorities has further submitted that the main banker of the petitioner is State Bank of India, Mumbai and the bank certificate of SBI, Mumbai was also appended with the bidding document and if at all the State Authorities had any doubt or any misgiving or misconception about the financial soundness of the petitioner's firm they could have approached, SBI, Mumbai for any clarification about the financial soundness of the petitioner's firm but instead by submitting a twisted form of questionnaire, the petitioner's firm has been declared ineligible in the tender process. Learned counsel has put emphasis upon the turnover of the petitioner's firm and has relied upon the solvency certificate in order to drive home his point that the petitioner is financially as well as technically sound than the respondent no. 6 and therefore the petitioner deserved to be selected for the work of construction of new Jharkhand High Court Building at Dhurwa.
9. Summing up his argument, Mr. Gadodia, learned counsel for the petitioner, submits that the State-Respondent does not deny in an emphatic manner the assertions made by the petitioner and infact the entire act of the State Authorities smacks of arbitrariness and discrimination and the same is a malice in law. It has been submitted that the respondent no. 6 does not have any credibility to undertake such a huge project and in the public interest, the respondent no. 6 should not be allowed the privilege of carrying out the work as the circumstances which have been enumerated in course of hearing of the writ -12- application suggest. Learned counsel has thus submitted that since the entire process is vitiated and since the other bidders including the petitioner have been ousted in order to favour the respondent no. 6, it would be in the interest of all concerned as also for a better appraisal and conclusion of the project in hand, steps be taken for deciding the matter afresh after inviting all the bidders to participate.
10. Mr. Ajit Kumar, learned Additional Advocate General, appearing on behalf of respondent nos. 1 to 5, has countered the elaborate arguments advanced by Mr. Sumeet Gadodia, learned counsel for the petitioner, by submitting that so far as the qualification/disqualification of respondent no. 6 is concerned, with respect to the previous track record of works done there never was any misconception about "at least one similar work".
It has been submitted that clause 4.5.(b) provided for at least one similar work of value not less than the amount indicated in the appendix although, in the pre-bid-meeting the matter was clarified as similar work would mean any RCC Framed Government Building Structure. It has been submitted that much importance cannot be attached with reply to such query as it cannot be ruled out that the answers to the queries made in the pre-bid-meeting was stage managed only to the benefit of certain firms by disqualifying other competitors. Learned senior counsel has also referred to clause 9.1.4, which deals with the qualification of bidding documents and clause 9.2.4 is with respect to pre-bid-meeting and the immediate transmission of the questions raised and responses given to all the purchasers of the bidding document. It has further been submitted that the terms and conditions of the bid cannot be modified through the Minutes of the Meeting and the same can only be done by issuance of an addendum. The queries and responses given in the pre-bid-meeting cannot over shadow the terms and conditions of the bid in absence of an addendum to that effect and therefore the State Authorities were justified in not rejecting the claim of the respondent no. 6 only on the ground of past work of similar nature done by it. It has been submitted that the respondent no. 6 had constructed an RCC Framed Structure being the International Cricket Stadium, -13- which in itself after its construction has gained international repute and therefore the respondent no. 6 was qualified to become eligible in the technical bid.
11. Answering the second limb of argument of learned counsel for the petitioner, Mr. Ajit Kumar, learned AAG, has referred to clause 23, 23.1 and 22.4 (i) (ii) and has submitted that the aforesaid clause clearly specifies that subject to confirmation of the bid security by issuing bank, the bids accompanied with valid security will be taken up for evaluation and therefore it was totally wrong on the part of the petitioner to contend that only on having qualified in all aspects, the bid security was taken up for evaluation. It has also been submitted that the bank guarantee, which was furnished by the petitioner was to be verified by the issuing bank and it was the issuing bank who could have dealt with certainty as to whether the petitioner's firm was financially sound or not. Learned senior counsel further adds that a very specific question was put to the issuing bank and the bank had refused to comment on the financial soundness of the petitioner' firm. This according to learned senior counsel for the respondent nos. 1 to 5 was a primary reason for declaring the petitioner as ineligible in the technical bid. It has been submitted that the State Authorities were perfectly justified in rendering the petitioner ineligible as in order to undertake the work of such a huge stature, it was absolutely necessary to get a positive reply from the issuing bank of financial soundness of the firm. Inability of the bank to take any responsibility with respect to financial soundness of the firm had obviously put constraints upon the State Authorities to declare the petitioner eligible. It has, therefore, been submitted that both the prayers made by the petitioner in view of the facts and circumstances of the case are liable to be negated.
12. Mr. Rajiv Ranjan, learned senior counsel for the respondent no.
6, apart from adopting the arguments advanced by Mr. Ajit Kumar, learned Additional Advocate General, has firstly referred to the counter affidavit submitted by the respondent no. 6 and has stated that any pre-bid-meeting cannot change the terms and conditions of the notice inviting tender. Submissions has -14- been advanced that the tender process has to be strictly complied with in terms of the NIT and none of the terms and conditions can be allowed to be altered. Learned senior counsel submits that any clarification, which goes against the spirit of the notice inviting tender becomes a nullity in the eyes of law and cannot be made enforceable. Reference has been made to clause 9.2, 9.2.4 and 8.1 of the ITB, wherein provisions had been made of holding a pre-bid-meeting, the transmission of the queries and response of the queries to the bidders and any modification of the bidding document shall be made by the employer exclusively through issuance of addendum pursuant to clause 10 and not through the minutes of the pre-bid meeting. It has been submitted that no addendum was ever issued changing the criteria of eligibility and in such circumstances, the respondent no. 6 having qualified as the successful bidder on being eligible as per the terms and conditions of the ITB has rightly been selected as the successful bidder. Learned senior counsel with respect to the eligibility of the petitioner submits that clause 26.2 and 26.3 deal with a substantially responsive financial bid and if the same is not so, it will be rejected by the employer and may not subsequently be made responsive by correction or withdrawal of non conforming deviation or reservation. It has also been submitted that in the back drop of the terms and conditions mentioned at clause 26.2 and 26.3, the bank guarantee, which was furnished by the petitioner of Union Bank of India, Bokaro Steel City Branch was itself flawed, as the same was submitted by a joint venture i.e. in the name of Unity -KCPL Joint Venture, whereas it was the petitioner, which had solely bid for the project and not by way of a joint venture. Moreover, the petitioner was required to submit the bank certificate of his financial soundness in terms of the format appended to the bidding document but the certificate, which has been produced by the petitioner dated 16.04.2015, from the State Bank of India, Mumbai Branch does not match the format and it does not also specify the financial standing of the petitioner. Reiterating his above submission, learned senior counsel for respondent no. 6 has referred to para 15 of the counter affidavit filed on behalf of respondent nos. 1 -15- to 5, wherein it has been stated that the petitioner had given a bank guarantee of a joint venture and the concerned bank had denied any responsibility in respect of the petitioner and the Technical Evaluation Committee has rightly rejected the technical bid of the petitioner. It has thus been submitted that the bank guarantee so submitted by the petitioner was materially different and had deviated with the actual requirement in bidding for the work.
13. In response to the arguments advanced by the learned senior counsel for the respondents, it has been submitted by Mr. Sumeet Gadodia, learned counsel for the petitioner that careless and loose arguments have been advanced by the learned AAG that answers of the pre-bid-meeting were pre decided. If such arguments are accepted then on such score itself, the entire process gets vitiated. It has been submitted by the learned counsel for the petitioner that what the respondent- State did not answer was if the wrongful exclusion of the petitioner is prima facie correct, then wrongful inclusion of respondent no. 6 by selecting it as the successful bidder has also tobe considered. It has been submitted that the clarifications which had been given in the pre bid meeting were uploaded for perusal of the participants and the nature of clarifications, which had been made need not have culminated in an addendum, as has been strenuously put forward by the learned senior counsel for the respondents. It has been submitted that clause 9.2.4 of ITB states about the modification in bidding document but in case of clarification addendum is not necessary and therefore it is wrong to state that queries and responses made in the pre-bid meeting clarifying various issues could not have been taken into consideration in absence of an addendum. Learned counsel further submits that the entire process of selection of respondent no. 6 has violated public interest and since the construction of New Jharkhand High Court Building at Dhurwa is of immense public importance, the arbitrary action of respondent nos. 1 to 5 is deplorable. It has also been submitted that the State Authorities had orchestrated the entire affair in order to curb/curtail the participation of the High Powered Players in competing with the -16- respondent no. 6 and this shows the favoritism meted out to the respondent no. 6 to grant him the contract. On the question of bank guarantee, submission has been advanced that nowhere it has been submitted by either of the learned senior counsels for the respondents that there was ever an occasion to doubt the genuineness of the bank guarantee. If the State authorities were sincere enough and wanted a level playing field for all the participants, it could have sought clarification from the State Bank of India, Mumbai Branch, which is the lead banker of the petitioner.
14. Before adverting to the contentions advanced on behalf of rival parties, it would be necessary to refer to the Standard Bidding Document, which was issued for construction of New Jharkhand High Court Building at Dhurwa. E-procurement notice dated 13.03.2015 was for construction of New Jharkhand High Court Building at Dhurwa at an estimated cost of Rs.2,67,66,29,324/- only. The time of completion of the project was prescribed as 30 months. It was also mentioned therein that a pre-bid- meeting shall be held on 25.03.2015 at 3 P.M. in the Chamber of Engineer in Chief, in order to clarify various issues and answer question on any matter that may be raised at that stage as stated in clause 9.2 of the Instruction to Bidders of the bidding document. In order to appreciate the contentions raised by the learned counsel for the petitioner and controverted by the learned senior counsels for the respondents with respect to the eligibility/ineligibility of the respondent no. 6, it would be necessary to deal with the same at the first instance. Clause 4 of I.T.B. deals with the qualification of the bidder and since both sides have relied on clause 4.5(A)(a)(b), the same is for better appreciation quoted herein below:-
4.5A To qualify for award of the contract, each bidder in its name should have in the last five years as referred to in Appendix.
(a) achieved a minimum annual financial turnover (in all classes of civil engineering construction works only) amount indicated in Appendix in any one year (usually not less than one and a half times the estimated cost of the project);
(b) satisfactorily completed (not less than 90% of contract value), as a prime contractor (or as a nominated subcontractor, where the subcontract involved execution of all main items of work described in the bid document, provided further that all other qualification criteria are satisfied) at least one similar work of value not less than amount indicated in Appendix (usually not less than 50% of estimated value of contract of last five years);-17-
15. Sub clause (b) of clause 4.5(a) contains a condition that a bidder must have satisfactorily completed at least one similar work, which has been harped upon much by the learned counsel for the petitioner in the context of response made as to what would include "one similar work". Clause 9.2 refers to a pre-bid-meeting and clause 9.2.4 is reproduced herein under:-
9.2.4 Minutes of the meeting, including the text of the questions raised (without identifying the source of enquiry) and the responses given will be transmitted without delay to all purchasers of the bidding documents. Any modification of the bidding documents listed in sub-Clause 8.1 which may become necessary as a result of the pre-bid meeting shall be made by the Employer exclusively through the issue of an Addendum pursuant to clause 10 and not through the minutes of the pre-bid meeting.
16. Clause 10 deals with Amendment of Bidding Documents and it clarifies that before the deadline for submission of bids, the Employer may modify the bidding documents by issuing addenda. Whether the clarifications made in the pre-bid meeting could have culminated in issuance of an addenda so as to qualify/disqualify respondent no. 6 has been the bone of contention between both the sides. In the pre-bid meeting, which was held as per the schedule, a clarification was sought for by one of the contenders namely Ramky Infrastructure that similar work is of any RCC Framed Building Structure or not, which was responded to by stating that the same has to be read as R.C.C. Framed Government Building Structure. In response to another query as to whether the pre qualification criteria of building works executed under the private clients will also be included towards similar work experience and it was responded to by stating that the same will not be considered. Mr. Sumeet Gadodia, learned counsel for the petitioner by referring to clause 4.3(A)(b) and the clarification, which was given by the authorities in the pre-bid meeting has tried to juxtapose both the issues and had submitted that the respondent no. 6 did not have the requisite qualification in terms of the clarification/response given by the State authorities. Admittedly, the respondent no. 6 with respect to similar work experience had submitted the completion certificate of International Cricket Stadium, which was constructed at Dhurwa under the aegis of Jharkhand State Cricket Association. The International Cricket Stadium -18- constructed by the respondent no. 6 is not a Government Building Structure but is an RCC Framed Structure. An RCC (reinforced cement concrete) structure is a combination of concrete and steel to build a structure instead of using only concrete. The use of concrete as well as steel has its reasons as concrete is good in resisting compression but it is very weak in resisting tension whereas steel has a high tensile strength and the bond between steel and concrete is excellent.
17. It is not a case of the petitioner that the respondent no. 6 had never done any RCC constructed building and the only reason for stressing about ineligibility of respondent no. 6 is that respondent no. 6 had never constructed RCC Framed Government Building Structure, which according to learned counsel for the petitioner, was a basic condition to be fulfilled.
18. Dealing with the second aspect of the case, which is with respect to unreasonable action on the part of the State authorities in disqualifying the petitioner in technical bid, it is apt that reference be made once again to ITB, wherein at clause 16, conditions have been laid down with respect to bid security. Clause 16.1.d states about furnishing of bank guarantee from any Scheduled Indian Bank from any of the branches of SBI/Nationalised/Scheduled Bank situated in India in the format given in Section 8. Clause 26 deals with examination of bids and determination of responsiveness. Clause 26.2 and clause 26.3, which contains the financial specifications of the bidding document and consequences of being non responsive and the same are extracted hereinbelow:-
26.2 A substantially responsive "Financial Bid" is one which conforms to all the terms, conditions, and specifications of the Bidding documents, without material deviation or reservation. A material deviation or reservation is one (a) which affects in any substantial way the scope, quality, or performance of the Works; (b) which limits in any substantial way, inconsistent with the Bidding documents, the Employer's rights or the Bidder's obligations under the Contract; or (c) whose rectification would affect unfairly the competitive position of other Bidders presenting substantially responsive Bids.
26.3 If a "Financial Bid" is not substantially responsive, it will be rejected by the Employer, and may not subsequently be made responsive by correction or withdrawal of the non-conforming deviation or reservation.-19-
19. The petitioner had submitted the bank guarantee issued by the Union Bank of India, Bokaro Steel City Branch dated 17.04.2015 for an amount of Rs.2,67,67,000/-. The issuing bank on being put on query with the subject regarding verification of the bank guarantee and on the question whether the petitioner's firm is financially sound, a specific answer had been given by the issuing bank that the bank does not take any responsibility with respect to financial soundness of the firm. As has been quoted above, clause 26.2 deals with a substantial responsive financial bid, which has to conform to all the terms and conditions and specifications of the bidding documents without there being any material deviation. The bank certificate, which was to have been submitted, was to contain a certificate that the firm has a good financial standing. The bank certificate, which has been produced by the petitioner dated 16.04.2015 is of State Bank of India, Mumbai Branch, which according to the petitioner, is the lead bank of the Firm. However, the bank guarantee, which was furnished, was of Union Bank of India, Bokaro Steel City Branch, which had refused to make any undertaking vouching for the financial soundness of the petitioner's firm. This was the prime justification made by the State Authorities in the meeting of the Tender Committee dated 28.05.2015 where four Firms were short listed as the documents were found to be in conformity with the Standard Bidding Documents but the same excluded the petitioner's firm.
20. Learned counsel for the petitioner has stressed much on the arbitrariness and unreasonableness on the part of the State Authorities in the entire bidding process and has submitted that in the context of such illegality, a judicial review is permissible with respect to the decision making process. In support of his argument, learned counsel for the petitioner has referred to the case of Tata Cellular Vs. Union of India reported in (1994) 6 SCC 651 and the relevant paragraphs are as follows:-
"74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself.
Lord
75. In Chief Constable of the North Wales Police v. Evans Brightman said:-20-
"Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made.
* * * Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power."
In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms:
"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160)."
, Sir John In R. v. Panel on Take-overs and Mergers, ex p Datafin plc Donaldson, M.R. commented:
"An application for judicial review is not an appeal."
, Lord In Lonrho plc v. Secretary of State for Trade and Industry Keith said:
"Judicial review is a protection and not a weapon."
It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In , Lord Fraser observed that:
Amin, Re "Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made.... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer."
77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in , Lord R. v. Secretary of State for the Home Department, ex Brind -21- Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
79. To quote again, Michael Supperstone and James Goudie; in their work Judicial Review (1992 Edn.) it is observed at pp. 119 to 121 as under:
"The assertion of a claim to examine the reasonableness been done by a public authority inevitably led to differences of judicial opinion as to the circumstances in which the court should intervene. These differences of opinion were resolved in two landmark cases which confined the circumstances for intervention to narrow limits. In Kruse a specially constituted divisional court had to consider the v. Johnson validity of a bye-law made by a local authority. In the leading judgment of Lord Russell of Killowen, C.J., the approach to be adopted by the court was set out. Such bye-laws ought to be 'benevolently' interpreted, and credit ought to be given to those who have to administer them that they would be reasonably administered. They could be held invalid if unreasonable : Where for instance bye-laws were found to be partial and unequal in their operation as between different classes, if they were manifestly unjust, if they disclosed bad faith, or if they involved such oppressive or gratuitous interference with the rights of citizens as could find no justification in the minds of reasonable men. Lord Russell emphasised that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or convenient.
In 1947 the Court of Appeal confirmed a similar approach for the review of executive discretion generally in Associated Provincial Picture . This case was concerned with a Houses Ltd. v. Wednesbury Corpn complaint by the owners of a cinema in Wednesbury that it was unreasonable of the local authority to licence performances on Sunday only subject to a condition that 'no children under the age of 15 years shall be admitted to any entertainment whether accompanied by an adult or not'. In an extempore judgment, Lord Greene, M.R. drew attention to the fact that the word 'unreasonable' had often been used in a sense which comprehended different grounds of review. (At p. 229, where it was said that the dismissal of a teacher for having red hair (cited by Warrington, L.J. in Short v. Poole Corpn, as an example of a 'frivolous and foolish reason') was, in another sense, taking into consideration extraneous matters, and might be so unreasonable that it could almost be described as being done in bad faith; see also R. v.
Tower Hamlets London Borough Council, ex p Chetnik Developments Ltd (Chapter 4, p. 73, supra). He summarised the principles as follows:-22-
'The Court is entitled to investigate the action of the local authority with a view to seeing whether or not they have taken into account matters which they ought not to have taken into account, or, conversely, have refused to take into account or neglected to take into account matter which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority has contravened the law by acting in excess of the power which Parliament has confided in them.' This summary by Lord Greene has been applied in countless subsequent cases.
"The modern statement of the principle is found in a passage in the speech of Lord Diplock in Council of Civil Service Unions v. Minister for :
Civil Service 'By "irrationality" I mean what can now be succinctly referred to as "Wednesbury unreasonableness". (Associated Provincial Picture ) It applies to a decision which is so Houses Ltd. v. Wednesbury Corpn outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at.' "
80. At this stage, The Supreme Court Practice, 1993, Vol. 1, pp. 849-850, may be quoted:
"4. Wednesbury principle.-- A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Provincial , per Lord Greene, M.R.)"
Picture Houses Ltd. v. Wednesbury Corpn
81. Two other facets of irrationality may be mentioned.
(1) It is open to the court to review the decision-maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v.
, the Secretary of State referred to a Secretary of State for Environmen number of factors which led him to the conclusion that a non-resident's bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. The Divisional Court analysed the factors which led the Secretary of State to that conclusion and, having done so, set it aside. Donaldson, L.J. said that he could not see on what basis the Secretary of State had reached his conclusion.
(2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On this basis in the condition R. v. Barnet London Borough Council, ex p Johnson imposed by a local authority prohibiting participation by -23- those affiliated with political parties at events to be held in the authority's parks was struck down."
21. Reference has also been made to the case of Raunaq International Ltd. Vs. I.V.R. Construction Ltd. & Ors reported in (1999) 1 SCC 492 and the relevant paragraphs are extracted herein below:-
"15. Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene.
18. The same considerations must weigh with the court when interim orders are passed in such petitions. The party at whose instance interim orders are obtained has to be made accountable for the consequences of the interim order. The interim order could delay the project, jettison finely worked financial arrangements and escalate costs. Hence the petitioner asking for interim orders in appropriate cases should be asked to provide security for any increase in cost as a result of such delay or any damages suffered by the opposite party in consequence of an interim order. Otherwise public detriment may outweigh public benefit in granting such interim orders. Stay order or injunction order, if issued, must be moulded to provide for restitution.
19. A somewhat different approach may be required in the cases of award of a contract by the Government for the purchase of items for its use. Judicial review would be permissible only on the established grounds for such review including mala fides, arbitrariness or unreasonableness of the Wednesbury variety. Balance of convenience would play a major role in moulding interim relief."
22. In the case of Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation & Ors. reported in (2000)5 SCC 287, the Hon'ble Supreme Court was considering with the extent of interference in the matters of administrative action and it was held thus:-
"11. Broadly stated, the courts would not interfere with the matter of administrative action or changes made therein, unless the Government's action is arbitrary or discriminatory or the policy adopted has no nexus with the object it seeks to achieve or is mala fide.
14. Now we will turn to the last question formulated by us. The High Court had directed the commencement of a new tender process subject to such terms and conditions, which will be prescribed by the Municipal Corporation. New terms and conditions have been prescribed apparently bearing in mind the nature of contract, which is only collection of octroi as an agent and depositing the same with the Corporation. In addition, earnest money and the performance of bank guarantee are insisted upon; collection of octroi has to be made on day-to-day basis and payment must be made on a weekly basis entailing, in case of default, cancellation of the contract. We cannot say whether these conditions are better than what were prescribed earlier for in such matters the authority calling for tenders is the best judge. We do not think that we should intercede to restore status quo ante the conditions arising in clauses 6(a) and 6(b) of the Tender Booklet and the bid offered much earlier by -24- Konark Infrastructure (P) Ltd. should be accepted, for it filed a writ petition, which was allowed with a direction for calling for fresh tenders. Public interest in the present case would be definitely served by reason of allowing the tender process to be completed by accepting the highest offer made by Monarch Infrastructure (P) Ltd. subject to raising its bid to Rs 42 crores matching with that of Ramchand Mahadeo Rao, though invalid, for Rs 41,51,00,000 for the period of 11 months which he is willing to raise to Rs 42 crores. We are not allowing Konark Infrastructure (P) Ltd. or M/s Jai Krishna Infrastructure such an opportunity as they had made lower bids."
23. In the case of W.B. State Electricity Board Vs. Patel Engineering Company Ltd. & Ors, reported in (2001)2 SCC 451, it was held as follows:-
"27. Exceptions to the above general principle of seeking relief in equity on the ground of mistake, as can be culled out from the same para, are:
(1) Where the mistake might have been avoided by the exercise of ordinary care and diligence on the part of the bidder; but where the offeree of the bid has or is deemed to have knowledge of the mistake, he cannot be permitted to take advantage of such a mistake.
(2) Where the bidder on discovery of the mistake fails to act promptly in informing to the authority concerned and request for rectification, withdrawal or cancellation of bid on the ground of clerical mistake is not made before opening of all the bids. (3) Where the bidder fails to follow the rules and regulations set forth in the advertisement for bids as to the time when bidders may withdraw their offer; however where the mistake is discovered after opening of bids, the bidder may be permitted to withdraw the bid.
31. The submission that remains to be considered is that as the price bid of Respondents 1 to 4 is lesser by 40 crores and 80 crores than that of Respondents 11 and 10 respectively, public interest demands that the bid of Respondents 1 to 4 should be considered. The Project undertaken by the appellant is undoubtedly for the benefit of the public. The mode of execution of the work of the Project should also ensure that the public interest is best served. Tenders are invited on the basis of competitive bidding for execution of the work of the Project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in competing for the contract relating to execution of the work and, on the other hand it affords the appellant a choice to select the best of the competitors on a competitive price without prejudice to the quality of the work. Above all, it eliminates favouritism and discrimination in awarding public works to contractors. The contract is, therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. It is obvious that the bid of Respondents 1 to 4 is the lowest of bids offered. As the bid documents of Respondents 1 to 4 stand without correction there will be inherent inconsistency between the particulars given in the annexure and the total bid amount, it (sic they) cannot be directed to be considered along with the other bids on the sole ground of being the lowest.
34. For the reasons abovementioned, though the impugned order of the High Court insofar as it relates to quashing of letter of the appellant dated 18-12-1999 falls within the purview of judicial review, yet the direction to the appellant to permit correction of errors by Respondents 1 to 4 in their bid documents and consider -25- their bid along with the other bid, goes far beyond the scope of . In the judicial review, as elucidated by this Court in Tata Cellular result, we uphold the impugned order of the Division Bench insofar as it relates to quashing of communication and letter dated 18-12-1999 and set aside that part of the impugned order giving direction to the appellant to permit Respondents 1 to 4 to correct bid documents and to consider their bid after correction along with other bids. The appeal is thus allowed in part. On the facts and in the circumstances of this case we leave the parties to bear their own costs."
24. Mr. Ajit Kumar, learned Additional Advocate General, seeking justification of the action by the State has referred to the following judgments.
25. In the case of Raunaq International Ltd. Vs. I.V.R. Construction Ltd. & Ors reported in (1999) 1 SCC 492, which has also been relied upon by the learned counsel for the petitioner, the relevant paragraphs, which have been cited by the learned AAG, are quoted herein under:-
"11. When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers.
13. Hence before entertaining a writ petition and passing any interim orders in such petitions, the court must carefully weigh conflicting public interests. Only when it comes to a conclusion that there is an overwhelming public interest in entertaining the petition, the court should intervene.
14. Where there is an allegation of mala fides or an allegation that the contract has been entered into for collateral purposes and the court is satisfied on the material before it that the allegation needs further examination, the court would be entitled to entertain the petition. But even here, the court must weigh the consequences in balance before granting interim orders.
15. Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene.
16. It is also necessary to remember that price may not always be the sole criterion for awarding a contract. Often when an evaluation committee of experts is appointed to evaluate offers, the expert -26- committee's special knowledge plays a decisive role in deciding which is the best offer. Price offered is only one of the criteria. The past record of the tenderers, the quality of the goods or services which are offered, assessing such quality on the basis of the past performance of the tenderer, its market reputation and so on, all play an important role in deciding to whom the contract should be awarded. At times, a higher price for a much better quality of work can be legitimately paid in order to secure proper performance of the contract and good quality of work -- which is as much in public interest as a low price. The court should not substitute its own decision for the decision of an expert evaluation committee.
17. Normally before such a project is undertaken, a detailed consideration of the need, viability, financing and cost- effectiveness of the proposed project and offers received takes place at various levels in the Government. If there is a good reason why the project should not be undertaken, then the time to object is at the time when the same is under consideration and before a final decision is taken to undertake the project. If breach of law in the execution of the project is apprehended, then it is at the stage when the viability of the project is being considered that the objection before the appropriate authorities including the court must be raised. We would expect that if such objection or material is placed before the Government, the same would be considered before a final decision is taken. It is common experience that considerable time is spent by the authorities concerned before a final decision is taken regarding the execution of a public project. This is the appropriate time when all aspects and all objections should be considered. It is only when valid objections are not taken into account or ignored that the court may intervene. Even so, the court should be moved at the earliest possible opportunity. Belated petitions should not be entertained.
26. In the case of Air India Limited Vs. Cochin International Airport Ltd. & Ors. reported in (2000) 2 SCC 617, it was held as follows:-
"7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana , Fertilizer Dayaram Shetty v. International Airport Authority of India Corpn. Kamgar Union (Regd.) v. Union of India, CCE v. Dunlop India Ltd., Tata Cellular v. Union of India, Ramniklal N. Bhutta v. State of Maharashtra and Raunaq International Ltd. v. I.V.R. Construction Ltd.
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 -27- 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 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.
27. In the case of National Highways Authority of India Vs. Ganga Enterprises, reported in (2003) 7 SCC 410, it was held as follows:-
"6. The respondent then filed a writ petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz.: (a) whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to Section 5 of the Contract Act; and (b) whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered Question (a) and then chose not to answer Question (b). In our view, the answer to Question (b) is clear. It is settled law that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It has been so held in the cases of Kerala SEB v.
, State of U.P. v. Bridge & Roof Co. (India)Ltd and Kurien E. Kalathil Bareilly Development Authority v. Ajai Pal Singh . This is settled law. The dispute in this case was regarding the terms of offer. They were thus contractual disputes in respect of which a writ court was not the proper forum. Mr Dave, however, relied upon the cases of Verigamto Naveen v. Govt. of A.P and Harminder Singh Arora v. Union of India. These, however, are cases where the writ court was enforcing a statutory right or duty. These cases do not lay down that a writ court can interfere in a matter of contract only. Thus on the ground of maintainability the petition should have been dismissed.
9. In our view, the High Court fell in error in so holding. By invoking the bank guarantee and/or enforcing the bid security, there is no statutory right, exercise of which was being fettered. There is no term in the contract which is contrary to the provisions of the Indian Contract Act. The Indian Contract Act merely provides that a person can withdraw his offer before its acceptance. But withdrawal -28- of an offer, before it is accepted, is a completely different aspect from forfeiture of earnest/security money which has been given for a particular purpose. A person may have a right to withdraw his offer but if he has made his offer on a condition that some earnest money will be forfeited for not entering into contract or if some act is not performed, then even though he may have a right to withdraw his offer, he has no right to claim that the earnest/security be returned to him. Forfeiture of such earnest/security, in no way, affects any statutory right under the Indian Contract Act. Such earnest/security is given and taken to ensure that a contract comes into existence. It would be an anomalous situation that a person who, by his own conduct, precludes the coming into existence of the contract is then given advantage or benefit of his own wrong by not allowing forfeiture. It must be remembered that, particularly in government contracts, such a term is always included in order to ensure that only a genuine party makes a bid. If such a term was not there even a person who does not have the capacity or a person who has no intention of entering into the contract will make a bid. The whole purpose of such a clause i.e. to see that only genuine bids are received would be lost if forfeiture was not permitted."
28. Reference has also been made to the case of Subhash Projects & Marketing Limited Vs. W.B. Power Development Corporation Ltd. & Ors. reported in (2005) 8 SCC 438 and the relevant paragraphs are quoted hereunder:-
"5. It was argued by the learned Senior Counsel for the appellant Subhash Projects that the Division Bench of the High Court was in error in finding that the award of the contract to Subhash Projects was illegal and that the due award of the contract to L & T was unduly interfered with by the Minister of State for Power in the Union Government and that such interference by him was unwarranted and uncalled for. Learned counsel submitted that the Minister's Secretariat and the notings of the Minister had only directed the following of the guidelines and norms and issuance of such a direction could not be considered to be undue or improper interference in the matter of the award of the contract. As a representative of the public, nothing stood in the way of the Minister receiving a representation made to him personally on behalf of Subhash Projects and there was nothing sinister in the Minister receiving it or directing it to be forwarded to the Power Corporation for action. There was also nothing improper in the Minister taking up the matter with the State Government and seeking its intervention to have the directions issued by him obeyed by the Power Corporation. That apart, the offer of L & T as originally made, was higher than that of Subhash Projects and if the rebate offered by L & T of Rs 64.40 crores was kept out, no fault could be found with the award of the contract to Subhash Projects. Learned counsel submitted that the guidelines were mandatory and clause 5.03 thereof justified the rejection of the reduced offer of L & T and in that situation, the High Court was not justified in inferring that the award of the contract to Subhash Projects was not justified in this case. There was also nothing illegal or improper in permitting Subhash Projects to reduce its offer to below that of L & T once it was found that Subhash Projects was the lowest tenderer and there was a decision to award the contract to it. Learned counsel submitted that in the matter of award of contracts, the jurisdiction of the High Court was limited and it was not as if the High Court was sitting in appeal over the evaluation and award of the contract. There was, therefore, no justification in the High Court directing Subhash Projects to pay compensation to L & T on the basis that the contract ought to have been awarded to L & T. To a question put to him specifically, he has submitted that in case, at the end of it, this Court came to the conclusion that the -29- submissions on behalf of Subhash Projects are not sustainable, he would prefer the judgment of the Division Bench of the High Court to be left as it is, rather than accepting the appeal filed by L & T and setting aside the award of the contract to Subhash Projects since the adoption of such a course may lead to other consequences which would be more serious as far as Subhash Projects is concerned.
12. Thus, on a reappraisal of the relevant materials in the light of the submissions before us, we are not satisfied that any interference is called for with the judgment of the Division Bench in these appeals. Since we are inclined to agree with the conclusion of the Division Bench that the award of the contract to Subhash Projects was not legal, we see no reason to interfere with the course adopted by the Division Bench in the matter of awarding compensation to L & T payable by Subhash Projects. We also find the sum fixed reasonable and to the advantage of Subhash Projects. We are not inclined to entertain the plea of L & T in its appeal that the award of the contract to Subhash Projects itself must be set aside and the contract directed to be awarded to L & T or to order a fresh tender to be invited for the work. The adopting of such a course would be counterproductive in the circumstances, considering the nature of the project and the steps that had already been taken and the completion of the project itself during the pendency of these appeals."
29. In the case of Jagdish Mandal Vs. State of Orissa & Ors.
reported in (2007) 14 SCC 517, the Hon'ble Supreme Court while considering catena of judgments on the issue of judicial review with respect to award of contracts has held thus:-
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound".
When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
-30-If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
30. In the case of Sorath Builders Vs. Shreejikrupa Buildcon Ltd., reported in (2009)11 SCC 9, wherein after considering the various principles laid down with respect to the principles of judicial review and the scope of interference in decision making process, it was held as follows:-
"27. Following the aforesaid legal principles laid down by this Court, we are of the considered opinion that Respondent 1 was negligent and was not sincere in submitting his pre-qualification documents within the time schedule laid down despite the fact that he had information that there is a time schedule attached to the notice inviting tenders. Despite being aware of the said stipulation he did not submit the required documents within the stipulated date. Pre-qualification documents were received by Respondent 2 University only after the time schedule was over. The terms and conditions of the tender as held by the Supreme Court are required to be adhered to strictly, and therefore, Respondent 2 University was justified in not opening the tender submitted by Respondent 1 on 1-12-2008, which was late by three days. According to us no grievance could also be made by Respondent 1 as lapse was due to his own fault.
28. The High Court proceeded to interfere with the entire process as if acting as an appellate authority over the decision of the University which was beyond the jurisdiction of the Court. The High Court was not justified in accepting the contentions of Respondent 1 and thereby upsetting the entire process of inviting tenders by interfering with the terms and conditions of inviting the tenders and by rescheduling and directing the process of retendering, which would only cause further delay and would increase the burden on the exchequer of the University."
31. In the case of Ratnagiri Gas and Power (P) Ltd. Vs. RDS Projects Ltd, reported in (2013) 1 SCC 524, wherein the question of allegations of mala fide and malice in fact on the part of the State Authorities were under consideration, it was held as follows:-
this Court summed up the "26.1. In State of Bihar v. P.P. Sharma law on the subject in the following words: (SCC p. 260, paras 50-51) "50. 'Mala fides' means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose. The administrative action must be said to be done in good faith, if it is in fact done honestly, whether it is done negligently or not. An act done honestly is deemed to have been done in good faith. An administrative authority must, therefore, act in a bona fide manner and should never act for an improper motive or ulterior purposes or contrary to the requirements of the statute, or the basis of the circumstances contemplated by law, or improperly exercised discretion to achieve some ulterior purpose. The determination of a plea of mala fide involves two questions, namely, (i) whether there is a personal bias or an oblique motive, and (ii) whether the administrative action is contrary to the objects, requirements and conditions of a valid exercise of administrative power.-31-
51. The action taken must, therefore, be proved to have been made mala fide for such considerations. Mere assertion or a vague or bald statement is not sufficient. It must be demonstrated either by admitted or proved facts and circumstances obtainable in a given case. If it is established that the action has been taken mala fide for any such considerations or by fraud on power or colourable exercise of power, it cannot be allowed to stand."
(emphasis supplied) 26.2. We may also refer to the decision of this Court in Ajit Kumar Nag where the Court declared that allegations of v. Indian Oil Corpn. Ltd mala fides need proof of high degree and that an administrative action is presumed to be bona fide unless the contrary is satisfactorily established. The Court observed: (SCC p. 790, para 56) "56. ... It is well settled that the burden of proving mala fide is on the person making the allegations and the burden is 'very heavy'. (Vide ) There is every presumption in favour of E.P. Royappa v. State of T.N. the administration that the power has been exercised bona fide and in good faith. It is to be remembered that the allegations of mala fide are often more easily made than made out and the very seriousness of such allegations demands proof of a high degree of credibility. As Krishna Iyer, J. stated in Gulam Mustafa v. State of Maharashtra (SCC p.
802, para 2): 'It (mala fide) is the last refuge of a losing litigant.'"
27. There is yet another aspect which cannot be ignored. As and when allegations of mala fides are made, the persons against whom the same are levelled need to be impleaded as parties to the proceedings to enable them to answer the charge. In the absence of the person concerned as a party in his/her individual capacity it will neither be fair nor proper to record a finding that malice in fact had vitiated the action taken by the authority concerned. It is important to remember that a judicial pronouncement declaring an action to be mala fide is a serious indictment of the person concerned that can lead to adverse civil consequences against him. Courts have, therefore, to be slow in drawing conclusions when it comes to holding allegations of mala fides to be proved and only in cases where based on the material placed before the Court or facts that are admitted leading to inevitable inferences supporting the charge of mala fides that the Court should record a finding in the process ensuring that while it does so, it also hears the person who was likely to be affected by such a finding.
38. We need hardly point out that in cases where the decision-making process is multi-layered, officers associated with the process are free and indeed expected to take views on various issues according to their individual perceptions. They may in doing so at times strike discordant notes, but that is but natural and indeed welcome for it is only by independent deliberation, that all possible facets of an issue are unfolded and addressed and a decision that is most app ropriate under the circumstances shaped. If every step in the decision-making process is viewed with suspicion the integrity of the entire process shall be jeopardised. Officers taking views in the decision-making process will feel handicapped in expressing their opinions freely and frankly for fear of being seen to be doing so for mala fide reasons which would in turn affect public interest. Nothing in the instant case was done without a reasonable or probable cause which is the very essence of the doctrine of malice in law vitiating administrative actions. We have, therefore, no hesitation in holding that the findings recorded by the High Court to the effect that the process of annulment of the tender process or the rejection of the tender submitted by RDS was vitiated by mala fides is unsustainable and is hereby set aside. Question 2 is accordingly answered in the negative."-32-
32. Coming back to the facts of the case and adverting to the issuance of clarification in the pre-bid meeting, it is not in dispute that the clarifications of the queries did not culminate in issuance of an addendum in terms of clause 10 of the ITB. Clause 9.2.4 very specifically has made a mention that any modification of the bidding documents which may become necessary as a result of the pre bid meeting shall be made by the employer exclusively through issue of an addendum and not through the minutes of the pre bid meeting. The clarifications/responses to the queries made in the pre bid meeting cannot be made to form a part of the main bidding documents and the same cannot be construed to be an amendment of the terms and conditions of the bid. When there is a specific clause being clause no. 10 inserted in ITB and the employer having not modified the bidding documents, the petitioner cannot be permitted to take recourse to the responses made in the pre bid meeting and thus arbitrariness and favoritism on the part of the State Authorities in awarding the contract to the respondent no. 6 as alleged by the petitioner is baseless and unjustified.
33. As has been stated in the earlier part of this judgment, it is not in dispute that the International Cricket Stadium at Dhurwa, wherein the employer was the Jharkhand State Cricket Association was a RCC Framed Multistoried Structure and the same conforms to the conditions precedent for submitting the bid and any response to any query made in the pre bid meeting cannot disown or destabilize such condition in absence of an addendum and the said condition with respect to any other similar work continue to remain and therefore the State authorities were fully justified in awarding the contract to the respondent no. 6 and the said action on the part of the State Authorities cannot be said to be tainted with arbitrariness and unreasonableness or actuated with malice.
34. The claim of the petitioner of having been illegally disqualified does not also cut much ice. As would be evident, the petitioner was declared ineligible in the Tender Committee Meeting dated -33- 28.05.2015 as the issuing bank did not take any responsibility with respect to financial soundness of the petitioner's firm. The petitioner had furnished the bank guarantee issued by the Union Bank of India, Bokaro Steel City Branch and it was Bokaro Steel City Branch, who were asked in very specific terms with respect to the financial soundness of the petitioner's firm. The financial bid, which was to be submitted by the participants in the Tender was to have been substantially responsive and which was to be in conformity with all the terms and conditions and specifications of the bidding document without any material deviation or reservation. A firm which intends to take on the responsibility of the construction of such a prestigious project, which is also of great public importance, cannot be permitted to deviate from the requirements with respect to the financial bid and the State Authorities were perfectly justified in not considering the claim of the petitioner as the bank which had issued the bank guarantee seemed to be in a dilemma over the financial soundness of the company. The petitioner has tried to raise a ruckus as to why the State Authorities did not contact the lead banker of the petitioner but the same can simply be stated to be of no consequence in view of the fact that it was the petitioner which had submitted the bank guarantee issued by the Union Bank of India, Bokaro Steel City Branch, and that too by a joint venture when the petitioner had solely bid for the work in question. This fact coupled with the response of the issuing bank has made the action of the State Authority in disqualifying the petitioner perfectly justified and there is no legal infirmity in coming to such decision.
35. In the case of Tata Cellular (supra), it was held that judicial review is concerned with review of not the merits of the decision in support of which the application for judicial review is made but the decision making process itself. The Hon'ble Supreme Court in the said case had considered in great details the principles to be applied in judicial review of administrative decision specially those relating to acceptance of tender and award of contract. The question which the Court would ask itself while confining itself to the legality of the decision making -34- process have been appropriately framed in paragraph 77 of the judgment.
36. As has been aptly stated in the case of Master Marine Services (P) Ltd. Vs. Metcalfe & Hodgkinson (P) Ltd. & Anr reported in (2005) 6 SCC 138, that there are inherent limitation in exercise of the power of judicial review. The Government is the guardian of the finance of the State and it is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government but the principles laid down in Article 14 of the Constitution of India have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. It went on to hold that the right to choose cannot be considered to be an arbitrary power.
37. In the case of Raunaq International Ltd (supra), certain guidelines were laid down in arriving at a commercial decision. It also considered the elements of public interest e.g. The goods or services which are being commissioned could be for a public purpose, the public would be directly interested in timely fulfillment of the contract so that services become available to the public expeditiously etc.
38. The catena of judgments, which have been referred to by both the side, ultimately conclude as has been held in the case of Tata Cellular (supra) that judicial review is concerned with decision making process itself and not the merits of the decision, in support of which the application for judicial review is made.
39. Taking recourse once again to the questions enunciated in paragraph 77 in the case of Tata Cellular (supra) and on consideration of the same in the backdrop of the factual aspects, it can be concluded that the decision making authority neither did exceed its power nor committed an error of law or a breach of the rules of the natural justice. The exercise of powers by the State Authorities in this particular case cannot be termed as unreasonable. Petitioner has not been able to make out a case so as to interfere in the decision making process itself -35- while declaring the petitioner ineligible nor has it been able to make a dent on the decision of the State Authorities in awarding the contract of construction of New Jharkhand High Court Building at Dhurwa to the respondent no. 6.
40. In view of what has been discussed above, I do not find any merit in this writ application, which is, accordingly, dismissed.
(Rongon Mukhopadhyay,J) Rakesh/