Gauhati High Court - Itanagar
WP(C)/354/2025 on 26 November, 2025
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GAHC040013042025 2025:GAU-AP:1342
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
WP(C)354(AP)/2025
M/s Nyabom Jilen,
A registered Class-III contractor, represented by its proprietor
Smti Nyabom Jilen, aged about 51 years, a permanent resident of
Village Ese-Abe, P.O. & P.S. Liromoba, West Siang District,
Arunachal Pradesh
...... Petitioner.
- VERSUS -
1. The State of Arunachal Pradesh, represented by the Secretary,
Department of Rural Development, Govt. of Arunachal Pradesh,
Itanagar.
2. The Director (RD), Department of Rural Development, Govt. of
Arunachal Pradesh, Itanagar.
3. The Project Director (RD), Department of Rural Development,
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Govt. of Arunachal Pradesh, Aalo, West Siang District, Arunachal
Pradesh.
4. The Deputy Commissioner, West Siang District, Aalo, Arunachal
Pradesh.
5. M/s D.K. Enterprises, a registered contractor represented
through its proprietor Shri Damli Niri, a permanent resident of
Kamba, P.O. & P.S. Kamba, West Siang District, Arunachal
Pradesh.
.......... Respondents.
Advocates for the Petitioner : Mr. K. Lollen, Advocate Advocates for the Respondents : Mr. N. Ratan, Addl. A.G. Mr. K. Loya, Advocate :::BEFORE:::
HON'BLE MR. JUSTICE SOUMITRA SAIKIA Date of Hearing : 26.08.2025 Date of Judgment : 26.11.2025 Page No.# 3/18 JUDGMENT & ORDER(CAV) Heard Mr. K. Lollen, learned counsel for the petitioner. Also heard Mr. N. Ratan, learned Additional Advocate General for the State respondents and Mr. K. Loya, learned counsel for the private respondent No.5.
2. This writ petition is filed by the petitioner, challenging the recommendation of the financial bid dated 06.06.2025, by the Financial Bid Evaluation Board in favor of the private respondent No.5. The writ petitioner is a sole proprietorship firm/contractor, having its place of business at Liromoba, West Siang District, Arunachal Pradesh. The petitioner is a registered Class-III contractor, bearing registration No. CEAP(CSQ)/W-48/2018-19/III/306, which was re-validated for a further period of 5 (five) years w.e.f. 28.12.2023, issued by the Chief Engineer (CSQ), Public Works Department, Govt. of Arunachal Pradesh, Itanagar.
3. In response to the NIT, being NIT No.WS/RD/NW/2025-26/5, dated 08.05.2025, for supply of item rate tender from eligible and registered Class II and Class III contractors for the work, " supply of material under MGNREGA 2025-26 CD Block Darak", at an estimated cost of Rs.2,08,40,000/- (Rupees two crore eight lakhs forty thousand) only, the petitioner, being an eligible contractor Page No.# 4/18 submitted his bids. A total of 6 (six) bidders including the writ petitioner and the private respondent participated in the tender process. During the technical bid evaluation, certain defects and anomalies were found in the technical bid documents of the private respondent No.5, but the said technical bid of private respondent was not rejected despite these defects. Aggrieved by the recommendation of the private respondent No. 5 in the technical bid evaluation, the petitioner submitted a representation before the respondent authorities, seeking proper examination of the irregularities and necessary action in accordance with the norms and guidelines of the Department. However, the same has not been considered by the respondent authorities.
4. Thereafter, the financial bid was opened on 06.06.2025 and the same was evaluated by the Financial Bids Evaluation Members and thereafter, a comparative statement was also prepared. As per the financial bids comparative statement, the petitioner had quoted Rs.1,85,68,128.33/- (Rupees One Crore Eighty Five Lakh Sixty Eight Thousand One Hundred Twenty Eighth and Thirty Three Paisa) only, which is (-) 10.90% below the justified rates. Whereas, the respondent No.5 had quoted Rs.1,88,66,252.65/- (Rupees One Crore Eighty Eight Lakh Sixty Six Thousand Two Hundred Fifty Two and Sixty Five Paisa) only, Page No.# 5/18 which is (-) 9.47% below the justified rates. Accordingly, the Financial Bids Evaluation Committee in their minutes accepted the financial bid of the private respondent No.5 as L-1 and recommended the respondent No.5 to the tender committee for award of the contract. The Board Members rejected the financial bids of other bidders including that of the petitioner, purportedly, under the rules laid down in the CPWD Works Manual, 2014.
5. The learned counsel for the petitioner submits that the recommendation of the respondent No.5 by the Financial Bids Evaluation Committee is contrary to the special conditions contained in the bid documents. It is submitted that under Clause 14(i) of the Special terms and conditions to bidders, the tender shall be evaluated by the Tender Evaluation Committee and it shall recommend at least 3 (three) firms i.e., L-1, L-2 and L-3 to the competent authority for acceptance along with the relevant documents. But in the present case, although the Tender Evaluation Committee evaluated the financial bids of all 6 (six) participating bidders, it recommended only a single financial bid of the private respondent No.5 as L-1 for approval, which is in violation of the tender clause itself. The learned counsel for the petitioner further submits that when there is only one valid or responsive bidder evaluated during the financial evaluation Page No.# 6/18 process, then the respondent authorities ought to have cancelled the tender and initiated steps for invitation of a fresh tender. This recommendation of only the private respondent as the L-1 bidder, besides being totally contrary to the terms and conditions of the NIT itself, is also opposed to public policy, as only one financially responsive bidder has been recommended instead of 3 (three) bidders.
6. The learned counsel for the petitioner further submits that no special or extraordinary circumstances have been cited by the Bid Evaluation Committee while recommending only the private respondent as the L-1 bidder. Such action is totally contrary to the terms and conditions of the NIT. It is, therefore, submitted that the recommendation made in favour of the private respondent No.5 is liable to be set aside, and the respondent authorities be directed to call for a fresh tender.
7. In support of his contentions, the learned counsel for the petitioner referred to and relies upon the following judgments of the Hon'ble Apex Court:
(i) Harminder Singh Arora Vs. Union of India & Ors., reported in (1986) 3 SCC
247), para-19; (ii) P.S.C. Engineer Pvt. Ltd. Vs. Union of India & Anr., reported in Page No.# 7/18 (2000) 2 GLT 590, Para-7 & 8; and (iii) Dipak Babaria Vs. State of Gujarat & Ors., reported in (2014) 3 SCC 502, Para-61 to 72.
8. Per contra, Mr. N. Ratan, learned Additional Advocate General for the State strongly disputes the contentions of the learned counsel for the petitioner. The learned Addl. A.G. submits that pursuant to the NIT for procurement of supply of materials under MGNREGA for Darak, and after evaluation of the tender papers, only the private respondent was found to be eligible. Accordingly, the Bid Evaluation Committee recommended the case of the private respondent as L-1 bidder. Mr. Ratan, referring to the bid evaluation minutes dated 06.07.2025, submits that none of the other bidders were found to be eligible and therefore, there is no occasion to refer or recommend the bids of any other bidders. Consequently, referring to the minutes of the financial bid evaluation, the learned Addl. A.G. submits that it is the financial bid quoted by the private respondent No.5 @ Rs.1,88,66,252.65/- (Rupees One Crore Eighty Eight Lakh Sixty Six Thousand Two Hundred Fifty Two and Sixty Five Paisa) only, which is found to be(-) 9.47% below the tender amount of Rs. 2,08,40,000/-. It is submitted that none of the other bidders including the writ petitioner, were found to be anywhere close to, or lesser than the amount submitted by the private respondent No.5.
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9. It is further submitted that as per CPWD Manual, at para 20.4.3.2, deviation in bid rates ranging from 5% to 10% may be allowed. Rates exceeding 10% should not be accepted. These CPWD manual is to be followed in all NITs invited by the State and where the prescription of the manual is applicable. In respect of the present NIT also, these Clauses of the CPWD Manual are applicable. The learned Additional A.G., therefore, submits that since the respondent No.5 had quoted the rate below 10%, it was found to be the L-1 bidder and was, accordingly, recommended. Insofar as the non-recommendation of L-2 and L-3 as per the terms of the contract is concerned, it is submitted that the MGNREGA Scheme is designed to provide at least 100 days of wage employment per financial year to every eligible rural household. Any delay in implementation of the scheme may result in failure to achieve the mandated employment target, thereby adversely affecting the rightful entitlements of the beneficiaries, namely the job card holders.
10. It is submitted on behalf of the State that the Letter of Intent (LOI) in favour of the respondent No.5 was issued on 24.06.2024 and the agreement between the respondent No.5 and the Department was executed on 27.06.2025.
Page No.# 9/18 The supply order for materials was issued on 27.06.2025. The execution of work under the said NIT has already commenced, and certain materials have already been delivered to the BDO's office. Therefore, it is submitted that the writ petition has no merit and the same therefore be dismissed and the award of contract in favour of the private respondent deserved to be sustained. It is also submitted that when the Letter of Intent was issued on 24.06.2025 and the work had already commenced but the writ petitioner was signed only on 28.07.2025.
11. In support of his contentions, he refers to the judgment rendered by the Hon'ble Apex Court in the case of Tata Motors Limited Vs. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) & Ors ., reported in 2023 19 SCC
1.
12. The learned counsel representing the private respondent adopts the arguments advanced by the learned Additional Advocate General for the State of Arunachal Pradesh. It is further submitted that the work order was issued and the agreement was also executed on 27.06.2025 and the supply order was also issued on 27.06.2025.
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13. Having heard the learned counsel for the parties and upon perusal the pleadings available on record, it is seen that although the petitioner had raised certain objections with regard to the documents being defective at the time of technical bid evaluation in respect of the private respondent No.5, however, the petitioner did not raise any objections when the parties were called for financial bid evaluation. The bids of all the bidders, including that of the petitioner and the private respondent were evaluated during the financial bid evaluation process. From the Financial Bid evaluation minutes, it is seen that the quoted amount of the private respondent was found to be (-)9.6% below the tender amount and, therefore, it was shortlisted as the L-1 bidder. None of the other bidders, including the writ petitioner's quoted bids were found to be below 10% as is evident from the comparative statement, which is shown in the financial bid evaluation. There is no dispute that the CPWD manual is required to be followed while considering the award of contracts under NITs such as the one in the present proceedings.
14. Clause 20.4.3 of the CPWD Manual makes it very clear that bids with a variation of 5 to 10% may be considered. It is also specifically provided in the CPWD manual that bids with variation above 10% are not to be considered.
Page No.# 11/18 Under such circumstances, it is seen that apart from the private respondent No.5, none of the bids quoted by the other bidders are within the variation of 10% as prescribed under the CPWD manual. Under such circumstances, it is evident from the minutes of the financial bid evaluation that bidders who quoted rates where the variation is beyond 10%, are not to be considered as suitable bidders or responsive bidders in terms of the CPWD manual. Therefore, the respondent No.5 was found to be the only suitable bidder and accordingly, he was recommended by the Bid Evaluation Committee.
15. The arguments advanced by the learned counsel for the petitioner is that the award of contract to the respondent No.5 is in violation of Cause 14 of the Special conditions to the NIT, inasmuch as the Bid Evaluation Board is required to recommend at least 3 (three) firms as L-1, L-2 and L-3 for acceptance along with relevant documents, and thereafter, the Joint Director (RD) upon further scrutiny, is to make recommendation by the Project Director. The Project Director, if satisfied with the tender documents, may then recommend the case to the acceptance authority, whereupon the LOI will be issued to the L-1 firm.
16. Although, in the facts of the present case, as has been discussed above, in Page No.# 12/18 the absence of any bidder quoting their rates within the variation of 10%, the private respondent No.5 having quoted a rate within 10% was recommended as the L-1 bidder. Consequently, there was no scope for the Bid Evaluation Committee to recommend L-2 and L-2 bidders, as the other bidders were found to be not financially responsive. In the absence of L-1, L-2 and L-3 bidders being recommended, whether the NIT ought to have been cancelled and fresh NIT ought to have been issued would have been a question ordinarily required to have been decided by the respondent authorities. However, considering the fact that these NIT has been floated inviting bidders for supply of materials under the MGNREGA Scheme and it is not in dispute that under this scheme, there is a guarantee of 100 days employment to the beneficiaries, cancellation of the tender and calling for a fresh tender besides imposing a financial and administrative burden on the respondent authorities, there is a strong possibility that the ultimate object sought to be achieved by floating the instant NIT may ultimately be lost or not achieved. Therefore, the action of the respondents cannot be faulted with for proceeding to award the tender to respondent No. 5 in the facts and circumstances of this case.
17. What is seen from the pleadings and noted from the arguments made Page No.# 13/18 before the Court on behalf of the petitioner is that there is no bias alleged against any of the official respondents. Under such circumstances, in the peculiar facts and circumstances of the case and considering the remote areas where these materials are required to be supplied for ensuring the benefits are conferred on the beneficiaries who are generally people living below poverty line in remote interior places in the State of Arunachal Pradesh, this Court is not inclined to accept the contentions of the learned counsel for the petitioner that non-recommendation of L-2 and L-3 bidders as prescribed under the terms and conditions of the NIT would be a sufficient ground to allow the writ petition interfering with the Letter of Intent issued to the private respondent and directing the State respondents to call for a fresh tender. There is one more reason why this Court is not persuaded to accept the contentions on behalf of the writ petitioner. It is that there is no quarrel on facts that as per CPWD Manual, bids quoting an amount over and above 10% of the bid price are not to be accepted. It is also not in dispute that these conditions prescribed under the CPWD Manual are required to be followed at the time of evaluation of the instant tender process.
18. In P.S.C. Engineer Pvt. Ltd. (Supra), it was held that the decision to award the contract to the respondent firm was taken merely because the proprietor of the respondent firm had sufficient experience without undergoing the process of Page No.# 14/18 enquiry as to its overall competence. No comparative evaluation to technical competence of the firms were made. There was no discussion made as to how the petitioners firms offered was techno commercially acceptable. The Court therefore found the element of bias and malafide apparent all through and the decision to award the contract was held to be arbitrary, capricious and devoid of any sense of fair play and the Letter of Intent was set aside.
In Harminder Singh Arora (Supra), it was held by the Apex Court that once Government decides to award contract on the basis of a bid by tender, it must abide by the terms of the tender and in absence of any policy or award of contract to a Government undertaking by granting price preference and rejecting the most suitable offer is incontravention of terms of the tender and therefore was held to be arbitrary, capricious and violative of Article 14 In Dipak Babaria(Supra), the Apex Court held that the law requires that if a particular thing to be done in a particular manner then it must be done in that way and no other manner. Government cannot ignore the policy intent and procedure contemplated by the statute.
In so far as the facts of the present proceedings are concerned, it is clear that from the avernments made there was proper evaluation of the bid offered by the petitioner and all the firm quoted prices which were below the bid price.
Page No.# 15/18 All these priced except the price of the private respondents were quoted below 10% of the bid price. Only the rate quoted by the private respondent was within 10% below the bid price.
Under such circumstances, the authorities proceed to shortlist the private respondent as the L-1 bidder and recommended it for approval. Therefore, the action of the respondent authorities in the facts and circumstances of the case, it cannot be held to be capricious, arbitrary and contrary to the terms of the contract and/or suffering from any biasness. Therefore, the Judgments pressed into service by the writ petitioner do not come to the aid of the writ petitioner in the present proceedings.
19. A writ Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, the Apex Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. A Court should normally not interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. The Apex Court has held that the courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In commercial involving technical issues the courts should be Page No.# 16/18 even more reluctant because the Courts do not have the necessary expertise to adjudicate upon technical issues beyond our domain of the Court. In fact the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract and it should not interfere where such interference will cause unnecessary loss to the public exchequer, This view of the Apex Court has time and again been reiterated in several Judgments. Reference in this case must be made to the Judgment of the apex Court rendered in Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking, (2023) 19 SCC 1. The Apex Court while examining judicial review of award of contracts by the Government was examined in detailed and upon considering the earlier precedents in this respect, the Apex Court interfered with the Judgment of the High Court which had set aside the decision of the State entity to award the contract. The relevant paragraphs of the said Judgment are extracted below:
55. Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out. The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to Page No.# 17/18 meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Assn. of Registration Plates v. Union of India [Assn. of Registration Plates v. Union of India, (2005) 1 SCC 679]
56. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd. [Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617] and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that 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 powers 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 interfere.
57. As observed by this Court in Jagdish Mandal v. State of Orissa [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] , that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.
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58. In such circumstances referred to above, we set aside that part of the judgment and order [Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking, 2022 SCC OnLine Bom 11618] passed by the High Court by which the decision of BEST to accept the tender of EVEY was set aside and it was left to the discretion of BEST to undertake a fresh tender process.
20. In the present proceedings, perusal of the comparative statement available in the bid evaluation minutes dated 06.07.2025, clearly reveals that all the other bidders excluding the writ petitioner had quoted bids with 10% variance of the bid price. Under such circumstances, the Clause in the CPWD Manual provides that it shall be not more than 10%,is to be construed as operating both on the higher and the lower side. Under such circumstances, the contentions advanced on behalf of the writ petitioner is not liable to be accepted and the same is, therefore, rejected. Accordingly, the writ petition stands dismissed being devoid of merit.
21. No order as to cost(s).
22. Interim order, if any, stands vacated. Pending interlocutory applications are also stands dismissed.
JUDGE Comparing Assistant