Mahadev Stone Crusher vs State Of Rajasthan (2024:Rj-Jd:49906) on 5 December, 2024

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Rajasthan High Court - Jodhpur

Mahadev Stone Crusher vs State Of Rajasthan (2024:Rj-Jd:49906) on 5 December, 2024

1. The instant writ petition has been filed by the petitioner under Article 226 of the Constitution of India, 1950 challenging the Letter dated 09.10.2024 (Annex.4) and impugned order dated 14.10.2024 (Annex.7) issued by Respondent no.3/Superintending Engineer.

2. The instant writ petition has been filed by the petitioner with the following prayer:

"It is therefore, humbly prayed that the instant writ petition filed by the Petitioner may kindly be allowed and by an appropriate writ, order or direction in the nature of mandamus, or any other writ-

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[2024:RJ-JD:49906] (2 of 15) [CW-17666/2024] (A) The letter dated 09.10.2024 (Annex-4) issued by the respondent no.3 be declared illegal arbitrary and be quashed and set aside;

(B) The actions/decisions on the part of the Respondent-

PWD while issuing fresh NIT No. 04/2024-25 (Annex-8) be declared illegal, arbitrary and be quashed and set aside; (C) Consequently, the Impugned order dated 14.10.2024 (Annex-7) may kindly be declared illegal and may be quashed and set aside;

(D) The Respondents may kindly be directed to decide the representation preferred by the petitioner by passing a speaking and reasoned order.

(E) The respondent may be directed to issue work order in favour of the petitioner in furtherance of the NIT No. 01/2024-25 (Annex-2);

(F) Any other appropriate order or direction which this Hon'ble Court deems just and proper in the facts and circumstances of this case may be passed in favour of the petitioner."

3. Briefly stated the facts of the case are that the respondent- Public Works Department, Dungarpur issued the NIT No. 01/2024- 25 dated 30.08.2024 (Annex.2) for the Construction of various BT roads at 8 different sites (under budget announcement 2024- 2025) including the Package No. RJ-14-04 in PWD Division, Simalwara, District Dungarpur. The Petitioner participated in the tender process and when the technical and financial bids were opened on 28.09.2024, the Petitioner emerged as the lowest bidder in 5 out of 8 sites while quoting the lowest bid at 12.02 % below the actual estimated price in the NIT dated 30.08.2024 (Annex.2). Thus, the petitioner was identified as the lowest bidder and the petitioner was placed at L-1. Thereafter, the respondent no.3/Superintending Engineer, PWD, Zone Dungarpur, issued a letter dated 09.10.2024 (Annex.4) wherein, it was stated that the petitioner quoted its bid at 12.02% below the estimated price for construction of various BT Road in Package No. RJ-14-04 in PWD (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (3 of 15) [CW-17666/2024] Division, Simalwara, District Dungarpur, whereas the other contractors has quoted their bid at around 25% below the estimated price in other works of similar nature and the bid submitted by the petitioner seems higher to the market rates. Therefore, the petitioner was directed to submit its negotiated bid within 3 days. The petitioner in pursuance to the letter dated 09.10.2024 (Annex.4), issued by the respondent no.3, submitted its reply dated 11.10.2024 (Annex.5), wherein it was stated by the petitioner that the original bid that was quoted by the petitioner was at 12.02% below the estimated price, however, it was ready to accept the work at the rate of 12.5% below the estimated price. Thereafter, as no further action was taken pursuant to the reply dated 11.10.2024 (Annex.5), the petitioner personally visited the office of the respondent no.3 and requested him to address the grievances of the petitioner. However, as no heed was paid to the grievances of the petitioner by the respondent no.3, the petitioner preferred a representation to the respondent No. 2 to 4 through email on 15.10.2024 wherein, the petitioner raised its grievances and prayed that representation filed by the petitioner be accepted and the petitioner may kindly be awarded the work order. In the meanwhile the Respondent no.3 vide order dated 13.10.2024 (Annex.R/2) rejected the bids received in pursuance of NIT dated 30.08.2024 (Annex.2) for construction of road in Package No. RJ-14-01, RJ-14-02, RJ-14- 03, RJ-14-04, RJ-14-05 and RJ-14-06 in PWD Division, Simalwara, District Dungarpur and ordered for initiation of fresh tender for the aforesaid sites. Subsequently, a fresh NIT No. 04/2024-25 dated 14.10.2024 (Annex.8) was issued and fresh bids were invited for (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (4 of 15) [CW-17666/2024] the construction of road at six sites, which were already mentioned in the NIT dated 30.08.2024 (Annex.2), without passing any order on the representation filed by the petitioner and without affording any proper opportunity of hearing to the petitioner. Aggrieved by the same, the instant writ petition has been preferred by the petitioner.

4. Learned counsel for the petitioner submits that according to Section 15 of the Rajasthan Transparency in Public Procurement Act, 2012 (hereinafter referred to as 'the RTPP Act') no price negotiation can be held by a procuring entity with respect to a bid negotiation except as provided in Section 31 or Section 35 of the RTPP Act. He further submits that in the present case the bidding process was a two stage bidding process as provided under Section 32 of the RTPP Act, thus, the case of petitioner does not fall either under Section 31 or Section 35 of the RTPP Act, and therefore, the action of the respondents in calling for negotiation vide letter dated 09.10.2024 (Annex.4), after the financial bid of the petitioner was already accepted, was itself contrary to Section 15 of the RTPP Act.

5. Learned Counsel for the petitioner further submits that according to Rule 69 of the Rajasthan Transparency in Public Procurement Rules, 2013 (hereinafter referred to as 'the RTPP Rules') no negotiation shall be conducted after the pre-bid stage except in case of procurement by method of single source procurement or procurement by competitive negotiations. He, while relying upon Rule 69 of the RTPP Rules read with Section 15 of the RTPP Act, further submits that no negotiation can be conducted in the post-bid stage except in case of procurement by (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (5 of 15) [CW-17666/2024] method of single source procurement or procurement by competitive negotiations and since the present case does not involve procurement by method of single source procurement or procurement by competitive negotiations, therefore, no negotiation was permissible. He also submits that the case of petitioner does not even fall in the circumstances mentioned under Rule 69 (2) (b) of the RTPP Rules as the rates quoted by the petitioner were not higher than the prevailing market rates. He further submits, while pointing out to the work order dated 13.06.2024 (Annex.9) issued by the respondent no.3, that for the same area and the same nature of work the respondents have issued a work order at 12.39% which is much higher than the rate quoted by the petitioner in the present case i.e., 12.50% and thus, the reason given by the respondent no.3, while rejecting the bids received prusuant to NIT dated 30.08.2024 (Annex.2), in order dated 13.10.2024 (Annex.R/2) that the bids quoted in the Package No. RJ-14-01, RJ-14-02, RJ-14-03, RJ-14-04, RJ-14-05 and RJ-14-06 in PWD Division, Simalwara, District Dungarpur were higher than the other packages is without merit. 5.1. Learned Counsel for petitioner further submits, while relying upon Rule 69 (4) of the RTPP Rules, that a minimum time of seven days is required to be given for calling negotiations and only in case of urgency the said period can be reduced after recording reasons, however, in the present case only 3 days time were given and no reason was communicated for the urgency for which the statutory time of seven days was reduced to only three days. 5.2. He further submits, while relying upon Rule 69 (5) of the RTPP Rules, that as the petitioner was willing to revise the rate to (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (6 of 15) [CW-17666/2024] 12.50% vide reply dated 11.10.2024 (Annex.5), it was incumbent upon the respondent no.3 to evaluate and consider it and not to make the original offer made by the bidder inoperative.

6. Learned Counsel for petitioner further submits that vide order dated 22.11.2024 passed by this court in the instant writ petition, the learned AAG was given time to place on record the relevant documents in order to show that the bidders, who have participated in the NIT dated 30.08.2024 (Annex.2) had quoted rates @ 25% in the same package as that of Simalwara however, the respondents in their additional affidavit have submitted documents which pertains to a location other than Simalwara whereas the respondents in their reply, at paragraph 3, to the writ petition as well as at paragraph 4 in the additional affidavit filed by the respondents they have stated that the reason for rejecting the bid was that in the similar tenders the quoted rates were as low as 25.01% below the estimated price.

7. Per contra, the learned counsel for the respondents, while relying upon Section 38 of the RTPP Act, raises a preliminary objection as to the maintainability of the instant writ petition as alternative remedy of appeal is available to the petitioner.

8. Learned counsel for the respondents further submits, with respect to requirement of seven days time as stipulated under Rule 69 (4) that it is not the case that the petitioner has disputed the 3 days time provided vide letter dated 09.10.2024 (Annex.4) which was provided for negotiations, on the contrary a new offer was given by the petitioner vide letter dated 11.10.2024 (Annex.5).

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9. Learned counsel for the respondents further submits that the argument of the petitioner that the documents, which have been placed on record by way of additional affidavit in pursuance to the order dated 22.11.2024 passed by this court, pertains to a location other than Simalwara is devoid of merit as the Building Schedule Rates ('BSR') are prescribed for the whole district and not for a particular division and in the present case BSR of the year 2022 were approved for the whole Dungarpur District and the same is applicable to the Simalwara Division as well since the same falls in the Dugarpur District. He further submits that in pursuance to the NIT dated 30.08.2024 (Annex.2) bids for 8 tenders were invited and in some of the tenders, bids were recieved as low as @25.01% below the estimated rates for other works of similar nature, therefore, the respondents are justified in rejecting the bid of petitioner and also in issuing fresh NIT in respect of the same in anticipation of a rate which is favourable to the respondents.

10. The learned counsel for the respondents, while placing reliance upon the judgment passed by this court in Kuldeep Lodhawat v. Rajasthan State Industrial Development and Investment Corporation Ltd. [S.B. Civil Writ Petition no.1423/2021], submits that the respondents are well within their right to reject the bid of the petitioner and in issuance of fresh NIT for the same in the interest of public revenue as in a tender arising out of the same NIT dated 30.08.2024 (Annex.2) for a similar nature of work, the bids were received @25.01%. He also submits, while pointing out to Annex.5 (Page no.105), that the respondents has also rejected the bid submitted by Gayatri (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (8 of 15) [CW-17666/2024] Infra Projects for one of the tenders which were invited vide NIT dated 30.08.2024 (Annex.2), thus, it is not a case that the respondents are discriminating against the petitioner.

10. In rejoinder, learned counsel for petitioner submits that the order of cancellation of tender dated 13.10.2024 (Annex.R/2) was not served upon the petitioner and the petitioner became aware of the said order of cancellation when it was placed on record by the respondents in their reply to the instant writ petition, therefore, there was no occasion for the petitioner to challenge the same in appeal under Section 38 of the RTPP Act. He further submits that action of the respondents are in clear violation of Section 15 of the RTPP Act as well as Rule 69 of the RTPP Rules and therefore, the petitioner has come up before this court under Article 226 of the Constitution of India, 1950 for the protection of its legal rights. He further submits, while relying upon Section 40(c) and 40 (d) of the RTPP Act that no appeal lies against the decision of procuring entity with respect to whether or not to enter into negotiations in terms of Section 15 of the RTPP Act and cancellation of a procurement process in terms of Section 26 of the RTPP Act. 10.1. He further submits, while relying upon the Circular dated 03.03.2007 (Annex.10) issued by Central Vigilance Commission ('CVC'), that there should not be any post-bid negotiations with L1 except in certain exceptional situations as the same could often be a source of corruption. He further submitted that no BSR have been placed on record by the respondents.

11. Heard and perused the material available on record.

12. This court at the outset finds it appropriate to adjudicate the preliminary objection raised by the learned counsel for the (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (9 of 15) [CW-17666/2024] respondents regarding the maintainability of the instant writ petition. This court finds that Section 38 (1) provides for the remedy of Appeal to any bidder or prospective bidder in case he is aggrieved by any decision, action or omission of the procuring entity. Section 38 is reproduces as under:

"38. Appeals.- (1) Subject to section 40, if any bidder or prospective bidder is aggrieved that any decision, action or omission of the procuring entity is in contravention to the provisions of this Act or the rules or guidelines issued thereunder, he may file an appeal to such officer of the procuring entity, as may be designated by it for the purpose, within a period of ten days or such other period as may be specified in the pre-qualification documents, bidder registration documents or bidding documents, as the case may be, from the date of such decision or action, omission, as the case may be, clearly giving the specific ground or grounds on which he feels aggrieved:

Provided that after the declaration of a bidder as successful in terms of section 27, the appeal may be filed only by a bidder who has participated in procurement proceedings: Provided further that in case a procuring entity evaluates the technical bid before the opening of the financial bid, an appeal related to the matter of financial bid may be filed only by a bidder whose technical bid is found to be acceptable.

(2)...

(3)...

(4)...

(5)...

(6)...

(7)...

(8)...

(9) ...

(10)..."

However, it is clear from the perusal of the opening phrase "Subject to Section 40" as used in Section 38 (1) of the RTPP Act that the provisions of Section 38 are subject to Section 40 of the RTPP Act. Section 40 of the RTPP Act is reproduced as under: (Downloaded on 11/12/2024 at 09:31:44 PM)

[2024:RJ-JD:49906] (10 of 15) [CW-17666/2024] "40. Appeal not to lie in certain cases.- No appeal under section 38 shall lie against any decision of the procuring entity relating to the following matters, namely:-

(a) determination of need of procurement in terms of section 5;

(b) provisions limiting participation of bidders in the bid process in terms of the provisions of section 6;

(c) the decision of whether or not to enter into negotiations in terms of section 15;

(d) cancellation of a procurement process in terms of section 26;

(e) applicability of the provisions of confidentiality under section 49."

Thus, Section 40 of the RTPP Act provides for the cases in which the remedy of appeal under Section 38 of the RTPP Act is not available. In the present case the respondents vide order dated 13.10.2024 (Annex.R/2) have rejected the tender with respect to six sites for which the tender was invited vide NIT dated 30.08.2024 (Annex.2) and issued fresh NIT dated 14.10.2024 (Annex.8). And the petitioner has challenged the action of the respondents in rejecting the bid of the petitioner and in issuing a fresh NIT without affording the petitioner opportunity of hearing. This court finds that Section 26 (1) (a) provides that the procuring entity may cancel the process of procurement at any time prior to the acceptance of successful bid and in the present case the tenders with respect to the six sites were rejected including the bid of the petitioner prior to its acceptance. Thus, the provisions of Section 40 (d) of the RTPP Act are attracted as the same talks about the cancellation of procurement process in terms of Section

26. Therefore, by virtue of the same no appeal could lie under Section 38 of the RTPP Act. Thus, the preliminary objection as (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (11 of 15) [CW-17666/2024] raised by the learned counsel for the respondents is not sustainable.

13. Now, proceeding to adjudicate the instant writ petition on merits, this court finds that the submissions of the petitioner majorly rests on two contentions; Firstly, that the action of the Respondents in conducting negotiation at the post-bid stage is illegal in terms of Section 15 of the RTPP Act read with Rule 69 of the RTPP Rules; Secondly, The Respondents could not have rejected the bid of the petitioner as the petitioner was the lowest bidder and also could not have issued a fresh NIT (Annex.8) without affording the petitioner the opportunity of hearing.

14. Now coming to the first contention of the petitioner with respect to the illegality in conducting the negotiation, this court finds that the petitioner was intimated vide letter dated 09.10.2024 (Annex.4) and was called for negotiation within a period of 3 days wherein it was stated by the respondents that for similar nature of work another bidder has quoted the rate as low as 25%; and subsequent to the letter dated 09.10.2024 (Annex.4) the petitioner instead of objecting to the same revised its earlier offer of 12.02% to 12.5% vide letter dated 11.10.2024 (Annex.5). Further, the petitioner, aggrieved by the rejection of its bid, submitted the representation (Annex.6) to the respondents wherein it was stated that in response to the letter dated 11.10.2024 (Annex.4) the petitioner had already given revised rate i.e., 12.5% and further requested the respondent to accept the tender on such revised rate. It is pertinent to note here that in the representation (Annex.6) as well in the letter dated (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (12 of 15) [CW-17666/2024] 11.10.2024 (Annex.5) the petitioner has not objected to action of the respondents in conducting negotiations. Therefore, it appears to be an afterthought that petitioner has challenged the action of the respondents in conducting negotiations. This court is of the considered view that if the petitioner was aggrieved by the action of the respondents in conducting negotiations then it should have objected to the same at that point of time, however, the petitioner, instead of doing so, has participated in the negotiations. Thus, by the application of the doctrine of estoppel, the petitioner cannot change its stand at this stage and challenge the action of the respondents in conducting the negotiations and therefore, the contention of the petitioner in this respect does not have force that the resondents have conducted negotiations in an arbitrary manner.

15. Learned counsel for the petitioner has also contented that the respondents could not have rejected the bid of the petitioner as the petitioner was the lowest bidder and also because the respondents have issued the work order dated 13.06.2024 (Annex.9) for the same area and the same nature of work at @12.39% which is much higher than the rate quoted by the petitioner in the present case i.e., 12.50%. This court, before dealing with this contention, finds it apposite to refer to the relevant provisions of law in this respect.

15.1. Rule 72 of the RTPP Rules provides for a procuring entity's right to accept or reject any or all bids and the same is reproduced as under:

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[2024:RJ-JD:49906] (13 of 15) [CW-17666/2024] "72. Procuring entity's right to accept or reject any or all bids.- The Procuring entity reserves the right to accept or reject any bid, and to annul the bidding process and reject all bids at any time prior to award of contract, without thereby incurring any liability to the bidders. Reasons for doing so shall be recorded in writing."

It is evident from the bare perusal of Rule 72 of the RTPP Rules that the procuring entity reserves the right to reject any bid and to annul the bidding process at any time prior to the award of the contract and in exercise of such right, the procuring entity does not incur any liability to the bidder, however, the procuring entity is required to record reasons for such rejection in writing. 15.2. In the present case the respondents by way of Condition no.5 in NIT dated 30.08.2024 (Annex.2) reserved its right to reject any tender. Condition no.5 of NIT dated 30.08.2024 (Annex.2) is reproduced as under:

"5. fdlh Hkh fufonk dks Lohdkj djus ,oa fcuk dkj.k crk;s fujLr djus ds leLr vf/kdkj l{ke vf/kdkjh ds ikl lqjf{kr gSA vkj- ih- MCY;w- ,&100 dh leLr 'krsZa ekU; gksaxhA"

15.3. Thus, the respondents vide order dated 13.10.2024 (Annex.R/2) rejected the bids received for construction of road in six out of eight sites for which NIT dated 30.08.2024 (Annex.2) was issued namely - Package No. RJ-14-01, RJ-14-02, RJ-14-03, RJ-14-04, RJ-14-05 and RJ-14-06 in PWD Division, Simalwara, and the reason recorded therein for the rejection of the bids in respect to the above-mentioned six sites was that the rates quoted by the bidders in respect to the above mentioned packages were much higher than the ones quoted in other two packages arising out of the same NIT (Annex.2). Thus, according to Rule 72 (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (14 of 15) [CW-17666/2024] of the RTPP Rules the respondents were well within the statutory realm to reject the bid of the petitioner as the contract was not awarded to the petitioner and the requirement for recording of reason for rejection as stipulated under Rule 72 of the RTPP Rules was complied with. Morover, this court in Kuldeep Lodhawat v. Rajasthan State Industrial Development and Investment Corporation Ltd. [S.B. Civil Writ Petition no.1423/2021], has observed that the highest bidder does not have a vested right and no right crystallizes in his favour merely upon being declared as the highest bidder and the decision of the authority to accept or reject a bid is a mere performance of executive function and the correctness of its conclusion is not open to judicial review unless the decision making process is unfair or action of the State is violative of Article 14 or such decision falls foul of the mandatory provisions of law. The relevant paragraphs of the aforesaid judgment is as under:

"18. This Court observes that it is always for the authority to decide whether the price offered in an auction is adequate or not, and acceptance or rejection of a bid, is mere performance of an executive function. The correctness of its conclusion is not open to judicial review unless the decision making process is unfair or the action of the State or its instrumentality is violative of Article 14 or has failed to adhere to the mandatory provisions of law which the petitioner has not been able to demonstrate before this court from the material placed on record in the instant case.

19. This Court further observes that the bidder if has been declared as a highest bidder does not have a vested right and no right crystallizes in his favour merely upon being declared as the highest bidder. The petitioner company was not alloted the land in question and much prior to such allotment the bid was cancelled by the respondent. There can be no iota of doubt that the respondent reserve right to (Downloaded on 11/12/2024 at 09:31:44 PM) [2024:RJ-JD:49906] (15 of 15) [CW-17666/2024] cancel the bid if there is any cogent reason for the same. The petitioner has failed to point out the particular right which was created in his favour prior to the cancellation of bid."

Similarly, in the present case, it was upon the respondents to decide whether to accept or reject the bid of the petitioner and merely being declared as the lowest bidder did not vest any right in the petitioner so as to award the work order to it. Therefore, the contention of the petitioner that being the lowest bidder it was entitled to be awarded the work order is devoid of any merit. 15.4. Further, the contention of the petitioner that the respondents have issued the work order dated 13.06.2024 (Annex.9) for the same area and the same nature of work at @12.39% which is much higher than the rate quoted by the petitioner in the present case i.e., 12.50% is also devoid of any merit as the work order dated 13.06.2024 (Annex.9) relates to a different NIT.

16. Therefore, in view of the above discussion, the instant petition being devoid of merit does not call for interference of this court under Article 226 of the Constitution of India, 1950. Accordingly, the instant writ petition is dismissed. Any application

(s), if pending shall also stand dismissed. No order as to the cost.

(DR. NUPUR BHATI),J S-364-DJ/-

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Rajasthan High Court - Jodhpur