Rajasthan High Court - Jaipur
M/S Shri Siddhi Industries Through ... vs Rajasthan State Ganganagar Sugar Mills ... on 28 September, 2018
Author: Ashok Kumar Gaur
Bench: Ashok Kumar Gaur
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writs No. 21807/2018
1. M/s Shri Siddhi Industries Through Proprietor Vijay
Khandelwal, Village Kesarpur, Near Aps School, Burja
Road, Alwar (Raj.)-301001
2. Vijay Khandelwal S/o Shri Radhey Shyam Khandelwal,
Aged About 32 Years, Proprietor, M/s Shri Siddhi
Industries, Village Kesarpur, Near Aps School, Burja Road,
Alwar (Raj.)-301001
----Petitioners
Versus
1. Rajasthan State Ganganagar Sugar Mills Ltd. Through
Director Incharge, 4Th Floor, Sahkar Bhawan, Bhawani
Singh Road, Jaipur (Raj.)
2. General Manager, Rajasthan State Ganganagar Sugar
Mills Ltd., 4Th Floor, Sahkar Bhawan, Bhawani Singh
Road, Jaipur (Raj.)
----Respondents
For Petitioner(s) : Mr.Samit Bishnoi, Advocate. For Respondent(s) : Mr.Shailesh Prakash Sharma & Ms.Sheetal Mirdha, Advocates.
HON'BLE MR. JUSTICE ASHOK KUMAR GAUR Order 28/09/2018 REPORTABLE
1. The instant petition has been filed challenging the issuance of Notice Inviting Bid (hereinafter shall be referred to as 'the NIB') No.RSGSM/Ropp Seals/OCB/2018-19/Pur/21 dated 05.09.2018 by the Rajasthan State Ganganagar Sugar Mills Ltd.
2. The facts pleaded in the writ petition are that the petitioner- firm is engaged in production of ROPP seals (Aluminum Bottle (2 of 15) [CW-21807/2018] Caps) since 2012 and is registered as a MSME (Micro Small Medium Enterprises). The petitioner-firm is said to have been participating in various tenders issued by the Rajasthan State Ganganagar Sugar Mills Ltd. for procurement of ROPP seals.
3. The petitioner has pleaded that the Rajasthan State Ganganagar Sugar Mills (hereinafter shall be referred to as 'the RSGSM') had issued a NIB dated 18.05.2018 for procurement of 5700 Lakhs 25 mm and 24 Lakhs 28 mm ROPP seals. It is stated that in the NIB, it was mentioned that procurement was to be made only from Micro, Small and Medium Enterprises situated in Rajasthan, as defined in clause 1(a) of the Notification dated 19.11.2015. The petitioner has pleaded that since their unit was MSME unit, they participated in the said Bid, in which five other bidders also participated.
4. The petitioner has pleaded in the writ petition that one bidder in the NIB dated 18.05.2018 M/s.K.N.Enterprises challenged certain conditions of the bid document claiming those to be contrary to the provisions of the Rajasthan Transparency in Public Procurement Act, 2012 (hereinafter shall be referred to as 'the RTPP Act, 2012') by filing S.B.Civil Writ Petition No.16044/2018 and this court passed an interim order dated 27.07.2018 restraining the RSGSM from opening the financial bid of NIB dated 18.05.2018.
5. The petitioner has pleaded that the interim order dated 27.07.2018 was still in operation and in order to circumvent the interim order and deny the petitioner and other bidders of their legitimate right to participate, the fresh NIB dated 05.09.2018 has (3 of 15) [CW-21807/2018] been issued inasmuch as without cancelling the earlier NIB dated 18.05.2018. The petitioner has pleaded in the writ petition that the respondents in arbitrary manner and with malafide intentions, have taken action against the petitioner-firm in the past also and some financial loss is also said to be caused to them as their security money, is not said, to be refunded.
6. The petitioner has pleaded in the writ petition that action of the respondents in issuing fresh NIB should be declared arbitrary and in fact the entire endeavour of the respondents seems to be circumvent the order passed by this court in S.B.Civil Writ Petition No.16044/2018. The petitioner has also raised grievance that there exists a syndicate of suppliers of ROPP seals and certain officers of the RSGSM, on frivolous and fictitious pretext, always keep out the genuine bidders, from the tender process.
7. The petitioner has further pleaded that there was no cogent reason for cancelling the earlier NIB - tender process and the fresh tender process cannot be initiated until the earlier NIB - tender is cancelled. The petitioner has further pleaded that action of the respondents is in violation of Article 14 of the Constitution of India as the respondents have acted in most arbitrary manner.
8. The respondents have filed reply to the writ petition. The respondents have pleaded in reply to the petition that there has been no malafide intention to cancel the earlier NIB dated 05.09.2008. The respondents have pleaded that the writ petition was filed by M/s.K.N.Enterprises challenging the condition set out in the NIB dated 18.05.2018. The respondents have pleaded that they have not tried to circumvent the interim order of this court (4 of 15) [CW-21807/2018] and in fact there were genuine reasons for issuing fresh NIB dated 05.09.2018. The respondents in para No.5 of reply to the writ petition have specifically pleaded that there were total six bidders in response to the NIB dated 18.05.2018 and after scrutiny, five bidders were found technically disqualified and the petitioner was the only bidder who was the technically successful bidder. The respondents have pleaded that in view of six participating bidders, five bidders were disqualified and the petitioner being the single bidder, the tender process could not be finalized and it was cancelled. The respondents have further pleaded that in order to have a fair competition and to select the best technically and financially qualified person, their endeavour is to award new contract.
9. Learned counsel for the petitioner Mr.Samit Bishnoi has made following submissions in support of his case:-
(i) The entire process adopted by the respondents in cancelling the earlier bid is a farce, as no final order was issued of cancelling the earlier NIB dated 18.05.2018. There is no order except the note-sheet which is said to be prepared in the office file of the respondents. Counsel submitted that in absence of final order, cancelling the earlier NIB dated 18.05.2018, the fresh NIB could not have been issued. Counsel submitted that issuance of proper and final order is a sine-qua-non for initiating the process of inviting fresh NIB.
(ii) There has been a violation of Section 17, 25 and 26 of the Act, 2012. Counsel submitted that as per Section 17 of (5 of 15) [CW-21807/2018] the Act, 2012 there has to be a State Public Procurement Portal, accessible to the public for posting matters relating to public procurement and information is required to be published as per the Act, 2012. Counsel submitted that the authorities never published or furnished information on the said public procurement portal relating to cancellation of earlier NIB dated 18.05.2018 and further issuance of fresh NIB dated 05.09.2018 is also not known to the parties participating in the earlier NIB. Counsel submitted that the Act of 2012 has been enacted to have transparency in the matters of procurement by the procuring entity and if such clandestine method is adopted, the same is in violation of the provisions of the Act of 2012.
(iii) Counsel submitted that the Finance Department has issued a circular/letter dated 27.09.2016 wherein it has been emphasized that informations are required to be supplied on the portal, as per Section 17 of the Act of 2012, the procuring entities are required to follow in strict sense and if they do not furnish the information, even the erring officials, can be tried by way of disciplinary proceedings.
10. Counsel for the petitioner has further placed reliance on the judgment of the Apex Court in Shanti Sports Club and Another Vs. UOI and Others reported in (2009) 15 SCC 705 to buttress his submissions to say that noting in a departmental file does not have the sanction of law to be an effective order, noting by an officer is an expression of his view point, on the subject but not an order.
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11. Counsel for the respondent Mr.Shailesh Prakash Sharma and Ms.Sheetal Mirdha have submitted that there has been no irregularity and illegality while issuing fresh NIB dated 05.09.2018. Counsel have submitted that after inviting bids in pursuance of the earlier NIB dated 18.05.2018, there were six bidders who had participated and on 26.07.2018 five bidders except the petitioner were found to be non-responsive. Counsel submitted that the interim order was passed by this court on 27.07.2018 but the eligibility was already adjudged by them on 26.07.2018 where five participants were found non-responsive.
12. Counsel submitted that bids of all the participants were also evaluated before passing of the interim order by this court and as such the allegation of the petitioner that the respondents in order of circumvent the order of this court have issued fresh NIB dated 05.09.2018, is absolutely incorrect.
13. Counsel have submitted that decision to cancel the earlier bid was taken by the General Manager of RSGSM and the said decision was further approved by the Director-InCharge of the Corporation i.e. the highest authority in the Company. Counsel submitted that there were valid reasons to cancel the earlier NIB dated 18.05.2018 as the petitioner was the only bidder who qualified technically and as such in order to have a fair competition, the respondents had taken the decision to issue a fresh NIB.
14. Counsel submitted that as far as the allegation of not putting the information on the portal is concerned, it has been informed to this court and document is also shown that a corrigendum was (7 of 15) [CW-21807/2018] issued on 31.08.2018 where re-tender of ROPP seals was published on the portal on 31.08.2018. Counsel submitted that due compliance was made of Section 17 of the Act of 2012 and information was furnished about re-tender of ROPP seals.
15. Counsel submitted that requirement of Section 17 of the Act of 2012 of providing information on portal, having access to the public has been complied with and as such it cannot be said that decision which was taken, was confined only to the office files and public was not made aware about the said decision.
16. Counsel submitted that Section 26 of the Act of 2012 gives power to the procuring entity that after recording in writing the reasons, the process of procurement can be cancelled. Counsel submitted that prior to acceptance of bid, the procuring entity has discretion and if there are valid reasons which are recorded in writing, no infirmity can be said to be found with the said decision while cancelling the earlier bid.
17. In support of their submission counsel placed reliance on the judgment of the Apex Court in State of Jharkhand & Ors. Vs. M/s.CWE-Soma Consortium [Civil Appeal No.6125 of 2016] decided on 12.07.2016. On the basis of the said judgment, counsel submitted that the State has power to enter into a contract and has a right to decide whether to enter into a contract with a person or not, subject to only requirement of reasonableness under Article 14 of the Constitution of India. Counsel submitted that the Apex Court has also reiterated the principle that if there is a lack of competition, the State Government can always proceed with the fresh tender and in (8 of 15) [CW-21807/2018] particular when one responsive bidder is available before it.
18. It would be relevant to quote the relevant provisions of the Act of 2012, which read as follows:-
"4. Fundamental principles of public procurement.- (1)In relation to a public procurement, the procuring entity shall have the responsibility and accountability to -
(a) ensure efficiency, economy and transparency;
(b) provide fair and equitable treatment to bidders;
(c) promote competition; and
(d) put in place mechanisms to prevent corrupt practices.
(2) Subject to the provision of sub-section (3) of section 3, every procuring entity shall carry out its procurement in accordance with the provisions of this Act and the rules and guidelines made thereunder.
7. Qualifications of bidders.- (1) A procuring entity may determine and apply one or more of the requirements specified in sub-section (2) for a bidder to be qualified for participating in a procurement process.
(2) Any bidder participating in the procurement process shall -
(a) possess the necessary professional, technical, financial and managerial resources and competence required by the bidding documents, pre-qualification documents or bidder registration documents, as the case may be, issued by the procuring entity;
(b) have fulfilled his obligation to pay such of the taxes payable to the Central Government or the State Government or any local authority as maybe specified in the bidding documents, pre-
qualification documents or bidder registration documents;
(c) not be insolvent, in receivership, bankrupt or being wound up, not have its affairs administered by a court or a judicial officer, not have its business activities suspended and must not be the subject of legal proceedings for any of the foregoing reasons;
(d) not have, and their directors and officers not have, been convicted of any criminal offence related to their professional conduct or the (9 of 15) [CW-21807/2018] making of false statements or misrepresentations as to their qualifications to enter into a procurement contract within a period of three years preceding the commencement of the procurement process, or not have been otherwise disqualified pursuant to debarment proceedings;
(e) not have a conflict of interest as may be prescribed and specified in the pre-qualification documents, bidder registration documents or bidding documents, which materially affects fair competition;
(f) fulfill any other qualifications as may be prescribed.
(3) Subject to the right ofbidders to protect their intellectual property or trade secrets the procuring entity may require a bidder to provide any such information or declaration as it considers necessary to make an evaluation in accordance with sub-section (1). (4) Any requirement established pursuant to this section shall be set out in the pre-qualification documents or bidder registration documents, if any, and in the bidding documents and shall apply equally to all bidders.
(5) The procuring entity shall evaluate the qualifications of bidders only in accordance with the requirement specified in this section.
25. Exclusion of bids.- (1) A procuring entity shall exclude a bid if-
(a) the bidder is not qualified in terms of section 7;
(b) the bid materially departs from the requirements specified in the bidding documents or it contains false information;
(c) the bidder submitting the bid, his agent or any one acting on his behalf, gave or agreed to give, to any officer or employee of the procuring entity or other governmental authority a gratification in any form, or any other thing of value, so as to unduly influence the procurement process;
(d) a bidder, in the opinion of the procuring entity, has a conflict of interest materially affecting fair competition.
(2) A bid shall be excluded as soon as the cause for its exclusion is discovered.
(3) Every decision of a procuring entity to exclude a bid shall be for reasons to be recorded in writing. (4) Every decision of the procuring entity under sub- section (3) shall be -
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(a) communicated to the concerned bidder in writing;
(b) published on the State Public Procurement Portal.
26. Cancellation of the procurement process.- (1) A procuring entity may, for reasons to be recorded in writing, cancel the process of procurement initiated by it -
(a) at any time prior to the acceptance of the successful bid; or
(b) after the successful bid is accepted in accordance with sub-sections (4) and (5). (2) The procuring entity shall not open any bids or proposals after taking a decision to cancel the procurement and shall return such unopened bids or proposals.
(3) The decision of the procuring entity to cancel the procurement and reasons for such decision shall be immediately communicated to all bidders that participated in the procurement process. (4) If the bidder whose bid has been accepted as successful fails to sign any written procurement contract as required, or fails to provide any required security for the performance of the contract, the procuring entity may cancel the procurement process. (5) If a bidder is convicted of any offence under this Act, the procuring entity may-
(a) cancel the relevant procurement process if the bid of the convicted bidder has been declared as successful but no procurement contract has been entered into;
(b) rescind the relevant contract or forfeit the payment of all or a part of the contract value if the procurement contract has been entered into between the procuring entity and the convicted bidder."
19. I have heard counsel for the parties and perused the material with their assistance.
20. The submission of learned counsel for the petitioner that the respondents have not issued final order and only a decision was taken in the departmental file in the form of note-sheet, this court finds that the decision has been taken on 08.08.2018 by the (11 of 15) [CW-21807/2018] General Manager of RSGSM after considering the fact that there were total six bidders who had participated and five were declared technically disqualified. The extract of the note-sheet dated 08.08.2018, relevant for the present purpose, reads as follows:-
"jktLFkku LVsV xaxkuxj "kqxj feYl fy-
dk;kZy; fVIi.kh RO PP seals vkiwfrZ gsrq fufonk;sa vkeaf=r dh xbZ FkhA dqy N% fufonk;sa izkIr gqbZ Fkh ftlesa ls ikap QeZ rduhdh :i ls vik= ? kksf'kr dj nh xbZA blh chp MS KN Enterprises us ekuuh; mPp U;k;ky; ls ,d i{kh; vkns"k ikfjr djok fy;k fd "In the meanwhile the respondent is restrained from opening the Financial bids as per NIT dated 18.05.2018 for suplly of RO PP seals." vf/koDrk dh jk; ds vuqlkj uohu fufonk vkeaf=r djuk mfpr gksxkA pwafd ikap QeZ vik= ?kksf'kr gksus ij ek= ,d QeZ cprh gS tks asm dh vko";drkuqlkj ROPP Seals vkiwfrZ ugha dj ldrhA vr% iSjk 78/N ds vuqlkj dk;Zokgh djrs gq, orZeku fufonk dks fujLr djrs gq, uohu fufonk vkeaf=r djuk izLRkkfor gS rkfd RSGSM dh vko";drkuqlkj RDPP Seals dh vkiwfrZ gks ldsA Sd/-
08.08.2018"
21. It has been recorded in the said notesheet that only one bidder is left and as such it is not possible to have proper procurement from such firm and accordingly the decision was taken to cancel the bid and to issue fresh NIB.
22. This court finds that though the interim order of this Court dated 27.07.2018 has been quoted therein in the notesheet, however, it cannot be held that the said decision has been taken to circumvent the order passed by this court. The fact remains that out of six bidders, if five were found technically disqualified and the procuring entity was left with only one bidder, the decision taken by them in the office file, cannot be termed to be arbitrary.
23. This court finds that the reasons for taking such decision to (12 of 15) [CW-21807/2018] cancel the earlier NIB, are based on the facts which are in the interest of the procuring entity and further to keep in mind the purpose, for which the Act of 2012 has been enacted.
24. This court finds that basic principle of public procurement is provided in Section 4 of the Act of 2012 where it has been provided that in relation to a public procurement, the procuring entity shall have the responsibility and accountability to ensure efficiency, economy and transparency and provide fair and equitable treatment to the bidders and promote competition.
25. The authorities if found that there will be no fair and equitable treatment to the bidders and there will be no competition and transparency, the said decision cannot be termed as arbitrary. This court finds that the notesheet dated 08.08.2018 is approved not only by the General Manager, but it has the approval of DIC as well.
26. The submission of learned counsel for the petitioner that no final order was passed and until final order is passed, the decision taken on the official file by the respondents cannot be treated as an order which can cancel the NIB, this court finds that as per the requirement of Section 26 of the Act of 2012, the procuring entity is required to record reasons in writing for cancelling the process of procurement initiated by it. The recording of reason is a sine- qua-non and the same has been done in the instant case. As regards issuance of final order, as prayed by the learned counsel for the petitioner, this court finds that the procuring entity has published the requirement of re-tender on the web portal, as has been shown to this court.
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27. The submission of learned counsel for the petitioner that in such situation where there has been no order, the action of the respondents of issuing fresh NIB dated 05.09.2018, should be termed as arbitrary, this court finds that fresh issuance of NIB by the procuring entity - the respondents, makes it clear that the earlier NIB dated 18.05.2018 has not to be acted upon and there were valid reasons to do so.
28. The submission of learned counsel for the petitioner that there is violation of Sections 17 and 25 of the Act of 2012, this court finds from the reading of Section 17 of the Act of 2012 that the State Government has to maintain a Public Procurement Portal accessible to the public for posting matters relating to public procurement and the procuring entity is also supposed to ensure publication of procurement related document on the said portal. The arguments of the learned counsel for the petitioner that there has been a violation as no information relating to procurement was published, this court finds that if the respondents have issued and published the information of re-tender on 31.08.2018, the non-compliance of Section 17 of the Act of 2012, cannot be alleged.
29. The submission of learned counsel for the petitioner that there has been a violation of circular dated 27.09.2016 and further the authorities, if have not acted in pursuance of the provisions of law, need to be dealt with severely and even disciplinary proceedings should be initiated against those erring official under the CCA Rules, this court finds that the requirement provided under the law has been complied with by the (14 of 15) [CW-21807/2018] respondents by issuing information on the web portal for re-tender and as such it cannot be said that there has been a violation of any of the provisions of law. This court would further like to add that the circular dated 27.09.2016 which has been issued by the Finance Department is only for the purpose of making the authorities aware about their duties and if they are not following their duties as per the Act of 2012, the appropriate action can also be taken against them. In the facts & circumstances of the instant case, the respondents have not committed any violation of requirement of publishing the information on web portal, as has been alleged by the petitioner.
30. The submission of the learned counsel for the petitioner that the Apex Court in the case of Shanti Sports Club (supra) has clearly held by laying down the law that until the final order is issued, the noting in file is of no relevance and cannot be treated as an effective order, this court finds that the Apex Court was dealing with a case in respect of land acquisition matter and there the issue raised was with respect to non-communication of rejection of representation of certain persons who were aggrieved by the scheme.
31. The Apex Court in the background of such facts recorded and reiterated the principles that notings in a departmental file do not have the sanction of law to be an effective order. This court finds that the judgment relied upon by the learned counsel for the petitioner in the case of Shanti Sports Club (supra) will be of little assistance to him and in particular the provisions of the Act of 2012 make it clear that information is ultimately required to be (15 of 15) [CW-21807/2018] furnished to public by putting the said information on web portal.
32. The judgment relied upon by the learned counsel for the respondents in the case of State of Jharkhand (supra), the Apex Court has reiterated the principle that there has to be a requirement of reasonableness under Article 14 of the Constitution of India before any decision is taken by the procuring entity of entering into a contract. The Apex Court has observed in the said case that in the lack of real competition, the State found it advisable not to proceed with the tender with only one responsive bid available before it.
33. This court finds that the situation obtaining in the present case is also identical as only one bidder i.e. the petitioner is left out to participate in the tender process initiated afresh. The procuring entity in order to ensure efficiency, economy, transparency and to provide fair & equitable treatment and promote competition, has taken a decision to issue fresh NIB dated 05.09.2018 and no right of the petitioner can be said to be violated. This court does not find any illegality being committed by the respondents in issuance of fresh NIB dated 05.09.2018.
34. Consequently, the instant writ petition, being devoid of merit, stands dismissed.
(ASHOK KUMAR GAUR),J Solanki DS, PS/109 Powered by TCPDF (www.tcpdf.org)