Gauhati High Court
WA/328/2021 on 29 June, 2022
Bench: N. Kotiswar Singh, Soumitra Saikia
GAHC010192012021
IN THE GAUHATI HIGH COURT
(The High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)
PRINCIPAL SEAT AT GUWAHATI
WA Nos.328/2021 & 329/2021
1. WA No. 328/2021
M/s Trident Enterprise,
A sole proprietorship concern bearing Regd. No.NPW/Class-I/158,
represented by its Proprietor Shri Imty Ao @ P. Imty Ao,
S/O Late L. Panger Ao, resident of Lower Agri Colony,
Kohima, Nagaland-797001.
......Appellant.
-Versus-
1. The Union of India,
represented by the Secretary to the Ministry of Rural
Development, Govt. of India,
Krishi Bhavan, New Delhi-110001.
2. The State of Nagaland,
represented by the Chief Secretary to the Govt. of Nagaland,
Kohima.
3. The Commissioner & Secretary to the Govt. of Nagaland,
Works & Housing Department, Kohima, Nagaland.
4. The Commissioner & Secretary to the Govt. of Nagaland,
Rural Development Department, Kohima, Nagaland.
5. The Engineer-In-Chief, NPWD & Empowered Officers,
NGRRDA, Nagaland, Kohima.
6. The Chief Engineer,
PWD(R&B), Nagaland, Kohima.
7. The Superintending Engineer (Design),
WA 328/2021 & 329/2021 Page - 1 of 50
O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
8. The Executive Engineer (Design),
O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
9. M/s ND & Co.
Regd. No.NPW/Class-1/457,
Kohima, Nagaland.
......Respondents.
For the Appellant: Mr. D. Das (Sr. Adv.),
Mr. N.N.B. Choudhury,
Mr. M. Dewan,
Mr. A. Atreya. ......Advocates.
For the Respondents: Mr. S.S. Roy, CGC,
Ms. M. Kechii, GA, Nagaland. ......Advocates.
2. WA No. 329/2021
M/s Trident Enterprise,
A sole proprietorship concern bearing Regd. No.NPW/Class-I/158, represented by its Proprietor Shri Imty Ao @ P. Imty Ao, S/O Late L. Panger Ao, resident of Lower Agri Colony, Kohima, Nagaland-797001.
......Appellant.
-Versus-
1. The Union of India, represented by the Secretary to the Ministry of Rural Development, Govt. of India, Krishi Bhavan, New Delhi-110001.
2. The State of Nagaland, represented by the Chief Secretary to the Govt. of Nagaland, Kohima.
3. The Commissioner & Secretary to the Govt. of Nagaland, WA 328/2021 & 329/2021 Page - 2 of 50 Works & Housing Department, Kohima, Nagaland.
4. The Commissioner & Secretary to the Govt. of Nagaland, Rural Development Department, Kohima, Nagaland.
5. The Engineer-In-Chief, NPWD & Empowered Officers, NGRRDA, Nagaland, Kohima.
6. The Chief Engineer, PWD(R&B), Nagaland, Kohima.
7. The Superintending Engineer (Design), O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
8. The Executive Engineer (Design), O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
9. M/s ND & Co.
Regd. No.NPW/Class-1/457, Kohima, Nagaland.
......Respondents.
For the Appellant: Mr. D. Das (Sr. Adv.),
Mr. N.N.B. Choudhury,
Mr. M. Dewan,
Mr. A. Atreya. ......Advocates.
For the Respondents: Mr. S.S. Roy, CGC,
Ms. M. Kechii, GA, Nagaland. ......Advocates.
BEFORE
HON'BLE MR. JUSTICE N. KOTISWAR SINGH
HON'BLE MR. JUSTICE SOUMITRA SAIKIA
Dates of Hearing : 16.06.2022 & 17.06.2022
Date of Judgment : 29th June, 2022
WA 328/2021 & 329/2021 Page - 3 of 50
JUDGMENT AND ORDER
[N. Kotiswar Singh, J.]
Heard Mr. D. Das, learned Senior counsel assisted by Mr. M. Dewan, learned counsel for the appellant in both the appeals. Also heard Ms. M. Kechii, learned Additional Senior Government Advocate, Nagaland, appearing for respondent Nos.2--8 and Mr. S.S. Roy, learned CGC, appearing for respondent No.1.
2. These two appeals arise out of the common judgment and order rendered on 04.08.2021 by the learned Single Judge in WP(C) No.71/2020, WP(C) No.72/2020 & WP(C) No.94/2020, but confined to only two writ petitions. The WA No.328/2021 is preferred against the decision rendered in WP(C) No.94/2020 and the WA No.329/2021 is preferred against the decision rendered in WP(C) No.72/2020.
As far as the WP(C) No.71/2020 is concerned the appellant has not preferred any appeal and as such, though the said common judgment and order was rendered in respect of three writ petitions i.e. WP(C) Nos.71/2020, 72/2020 & 94/2020, we are concerned only with the issues raised in WP(C) Nos.72/2020 and 94/2020.
3. Before we deal with the grounds raised in these appeals, certain background facts may be relevant to be mentioned.
3.1 A Notice Inviting Tender (NIT) was floated on 23.10.2019 for WA 328/2021 & 329/2021 Page - 4 of 50
construction of number of roads under different packages in different districts of Nagaland including the work, namely, T-01(Botsa) to Sendenyu via Tsiemekhuma under Package No.NG0207A002 in Kohima district which is the subject matter in WA No.329/2021 [WP(C) No.72/2020] and another work, namely, T-01 to Lilen via Vonkitem under Package No.NG0901A012 in Peren district which is the subject matter in WA No.328/2021 [WP(C) No.94/2020].
As per the NIT, the bid process involves two stages, namely, Part-I - Technical Qualification Part of Bid, which consists of furnishing information relating to relevant parameters including qualification information, supporting documents, scanned copy of original affidavit and undertaking, which includes information relating to experience in works of similar nature and size for each of the last five years, and details of works in progress or contractually committed with certificates from the concerned officer not below the rank of Executive Engineer or equivalent [Clause 4.2(c)].
Part-II consists of Technical-Financial Part of Bid, which also consists of
(i) Form of Bid of Part-II of the bid as specified in Section 6 and (ii) Priced bill of quantities for items specified in Section 7. Section 6 refers to Technical Qualification Part-I of Bid and Section 7 refers to Bill of Quantities. 3.2 As provided under Clause 22 of the NIT, it has been mentioned that the file containing Part-I of the bid will be opened first. Clause 22.5 further provides that evaluation of Part-I of bids with respect to Bid Security, qualification WA 328/2021 & 329/2021 Page - 5 of 50 information and other information furnished in Part-I of the bid pursuant to Clause 12.1 of ITB shall be taken and completed within five working days of the date of bid opening, and a list will be drawn up of the qualified bidders whose Part-II of bids are eligible for opening.
3.3 Clause 22.6 further provides that the result of evaluation of Part-I of the bids shall be made public on e-procurement systems following which there will be period of five working days during which any bidder may submit complaint which shall be considered for resolution before opening Part-II of the bid. 3.4 It may be noted that as regards submission of bids and evaluation of Part-I of bids, it appears that there was no issues raised, in fact, all the bidders including the appellant and the private respondent No.9 (respondent No.8 in the writ petition) were considered to be technically qualified. It may be also mentioned that it is specifically provided under Clause 25.1 of the ITB that during the detailed evaluation of Part-I of bids, the employer will determine whether each bid
(a) meets the eligibility criteria defined in Clauses 3 and 4;
(b) has been properly signed;
(c) is accompanied by the required securities; and
(d) is substantially responsive to the requirements of the bidding
documents.
Clause 25.2 futher provides that a substantially responsive financial bid is WA 328/2021 & 329/2021 Page - 6 of 50 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 contract; or
(c) whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids. 3.5 It appears that there was no issue regarding technical qualification of the writ appellant as well as respondent No.9 (respondent No.8 in the writ petition) and other bidders. As all the bidders were declared qualified in the Part-I of the bid, the technical-financial bid which consist of the Part-II of the bid was undertaken by opening the bids. In that, it was found that all the bidders had quoted same rate. As far as the factual aspects upto this stage is concerned, there is no issue.
3.6 However, according to the appellant, what happened subsequently led to filing of the aforesaid writ petitions.
In respect of the work, namely, T-01 to Lilen via Vonkitem relating to Peren district under Package No.NG0901A012 [subject matter in WP(C) No.94/2020 and WA No.328/2021], it has been submitted that the writ WA 328/2021 & 329/2021 Page - 7 of 50 appellant was informed on 12.06.2020 that his bid for the aforesaid tender has been accepted during financial evaluation by the duly constituted committee. However, after the writ appellant was informed of the acceptance of his financial bid by email, after sometime the appellant was informed on the same day on 12.06.2020 of the rejection of his bid for the aforesaid work relating to Peren district. The appellant claims that while rejecting the said bid of the appellant, no reason was assigned. The appellant, however, came to know subsequently that though the appellant was informed on 12.06.2020 that his bid has been rejected, the bid of the respondent No.9 was accepted by the authorities and the letter of acceptance was issued on 11.06.2020. Thus, the contract was awarded to the respondent No.9 one day before the appellant was communicated the acceptance of his financial bid as well as rejection of his bid. This has given raise to the cause of action for the appellant to approach the learned Single Judge challenging the aforesaid procedure and actions taken by the State respondents to award the contract in favour of the respondent No.9. 3.7 Coming to the other tender for the work, namely, T-01(Botsa) to Sendenyu via Tsiemekhuma relating to Kohima district under Package No.NG0207A002 [subject matter in WP(C) No.72/2020 and WA No.329/2021], the appellant received an email on 04.03.2020 from the respondent authorities stating that his bid has not been selected for award of contract by the duly constituted committee. The appellant came to know that on the same day i.e. WA 328/2021 & 329/2021 Page - 8 of 50 04.03.2020 when his bid was rejected the contract was awarded in favour of the respondent No.9.
3.8 Being aggrieved by the aforesaid actions of the authorities in awarding the contract in favour of the respondent No.9, the writ appellant filed an application on 15.06.2020 under Right to Information Act, 2005 and he received the necessary information on 29.06.2020, whereby the appellant came to know that the appellant scored the highest amongst the bidders with 85.00 marks out of 100, whereas the respondent No.9 who was awarded the tender had obtained 52.6 marks, which is the 4 th highest. It has been submitted that the appellant also preferred an RTI application in respect of the other works in Kohima also and was furnished with the same information. 3.9 Thus, in both the cases, it is on record that the appellant had scored the highest marks in the technical bid and since, all the bidders had bidded same amount in the financial bid, under normal circumstances the appellant being the highest bidder in both the bids in respect of Peren as well as Kohima districts, he ought to have been awarded. Accordingly, being aggrieved by the rejection of the tenders of the appellant though had scored the highest in the technical bid, and awarding the work to the respondent No.9 who had obtained much lesser marks, the appellant preferred these two writ petitions being WP(C) No.72/2020 and WP(C) No.94/2020.
4. Before the learned Single Judge, a specific plea was taken by the WA 328/2021 & 329/2021 Page - 9 of 50 appellant as follows.
5. It was submitted that the aforesaid marks awarded to the appellant and other bidders were based on certain parameters which are to be found in Clauses 4.2 and 4.6. The aforesaid parameters includes the work experience in similar nature of work for the last five years, the progress of works, etc. and the maximum value of civil engineering works executed in any one year during the last five years, number of years prescribed for completion of works, etc. as mentioned specifically under Clause 4.6 while calculating the assessed available bid capacity of the bidders.
In other words, while making the assessment and evaluating the assessed available bid capacity, the past performance of the bidders is already taken into account and the appellant had furnished all the relevant information about his past performance, progress of work, etc. as required under Section 3 qualification and information provided under the NIT. The appellant admits to the position that at the time of submitting the aforesaid two bids, he was executing 3 works, namely, (i) T-01 to Thetsumi, (ii) Yangkhao to Shingnyu and
(iii) T-026 to Kendong and at the relevant time the average progress of the works was 21.22% as also calculated by the authorities.
6. The appellant sought for a direction from this Court for award of contract in his favour in respect of the aforesaid two works and also for cancellation of the work allotted to respondent No.9. The said claim of the appellant was WA 328/2021 & 329/2021 Page - 10 of 50 contested by the State as well as by the private respondent No.9. The State Government had taken the specific stand before the learned Single Judge that the tender of the appellant was rejected because of his poor work performance. In that regard reference was made to Clause 4.7(ii), which provides that even if the bidders meet the qualifying criteria, they would be subject to disqualification if they have (i) made misleading or false representations in the forms, statements, affidavits and attachments submitted in proof of the qualification requirements; and/or (ii) record of poor performance such as abandoning the works, not properly completing the contract, inordinate delays in completion, litigation history, or financial failures etc .
7. The plea of the State authorities was that the work had been allotted to respondent No.9 as there was no unfinished work when he took part in the tender process and as such, considering his work performance of completing all the works and to ensure that the construction of these roads does not suffer from any delay and in the interest of the public it was decided to award the work to respondent No.9 and rejected the bid of the appellant.
8. The learned Single Judge after hearing the parties and on consideration of the materials on record dismissed both the writ petitions filed by the appellant vide impugned common judgment and order dated 04.08.2021, but also at the same time set aside the award of contract in favour of the respondent No.9 on the ground that the respondent No.9 had engaged in WA 328/2021 & 329/2021 Page - 11 of 50 fradulent practice while submitting his bid documents, and directed the State respondents to take immediate steps for issuing fresh NIT for the projects in the two writ petitions i.e. WP(C) Nos.72/2020 and 94/2020.
9. Being aggrieved by the aforesaid common judgment and order by dismissing the relief claimed, the writ petitioner has filed the present two writ appeals.
In the meantime, however, as per direction of the learned Single Judge, the respondent authorities proceeded to float the 2 nd tender on 03.11.2021 and also recompensated the respondent No.9 for the portion of works already executed. The appellant while preferring these appeals brought to the notice of this Court to the aforesaid re-tender process and a Division Bench of this Court vide order dated 30.11.2021 directed that as an interim measure till the next date, the work order in respect of Re-Tender Notice No.CE/R&B/PMGSY- 11/TENDER/2019-20/104-106 dated 02.11.2021 shall not be issued.
The said interim order has continued till date. Thus, though the re-tender was issued, no work order has been issued in favour of any person till now.
CONTENTION OF THE APPELLANT:
10. Learned Senior counsel appearing for the appellant has raised the following grounds in assailing the findings and conclusion of the learned Single Judge.
WA 328/2021 & 329/2021 Page - 12 of 50 10.1 It has been submitted that the respondent authorities could not have invoked the aforesaid Clause of 4.7(ii) to reject the bid of the appellant on the ground of poor performance in as much as the authorities while assessing the technical bid of the bidders including the present appellant, had already taken into account the past performance of the appellant. The information regarding past performance of the appellant was duly furnished to the authorities and the same was very much in the knowledge of the Selection Committee. The past performance of other bidders was also in the knowledge of the Selection Committee. After considering the past performance and other parameters of the bidders as required to be considered under the NIT, the authorities declared the technical bids of the appellant and others to be successful. Accordingly, after their technical bids were found to be successful, the authorities proceeded with the 2nd stage of the tender process by opening the technical bid and financial bid, which is named as Part-II of the bid. On opening of the Part-II of the bid i.e. technical and the financial bid, the appellant was informed on 12.06.2020 that he has been successful in the financial bid in respect of the work, namely, T-01 to Lilen via Vonkitem relating to Peren district under Package No.NG0901A012.
10.2 As far as the work, namely, T-01(Botsa) to Sendenyu via Tsiemekhuma relating to Kohima district under Package No.NG0207A002 is concerned, the appellant was not informed of the rejection of his technical bid or financial bid, WA 328/2021 & 329/2021 Page - 13 of 50 but it was awarded the contract in favour of the respondent No.9 which was informed on 04.03.2020 and on the same day the appellant was also informed of the rejection of his bid without specifying as to the ground for his rejection. 10.3 With specific reference to the work in respect of Peren district, learned Senior counsel for the appellant submits that the authorities could have invoked Clause 4.7(ii) which is specifically relating to the poor performance, which they were already aware of, while making assessment in technical bid. Yet the authorities themselves did not deem it necessary to disqualify the bid of the appellant at that stage. It has been contended that if the authorities were not really satisfied with the past work performance of the appellant, they could have rejected the bid of the appellant at that stage of Part-I while assessing the technical bid. Nothing prevented the authorities from doing so. Had the tender of the writ appellant been rejected at that stage i.e. Part-I of the bid process, perhaps the matter would have been otherwise.
10.4 According to the learned Senior counsel for the appellant, if the authorities did not deem it necessary to reject the bid of the appellant at that stage and having declared the appellant to be successful, it would not be in the fitness of things that the authorities could again invoke the same parameter to reject the tender at a subsequent stage.
According to the learned Senior counsel for the appellant, this course of action adopted by the authorities in rejecting the bid of the appellant on the WA 328/2021 & 329/2021 Page - 14 of 50 ground of poor performance is merely to favour the respondent No.9, who otherwise, is much less meritorious and this is an afterthought. In fact, as subsequently noticed by the appellant also the respondent No.9 did rely on certain documents i.e. relating to possession of vehicles, which actually belong to the appellant. Yet, the authorities ignored the said malpractice adopted by the respondent No.9 to award the contract in favour of the respondent No.9. 10.5 Thus, according to the learned Senior counsel for the appellant, the said action of the State authorities in rejecting the bid of the appellant and awarding the same to a less meritorious bidder (respondent No.9) is not only illegal but also malafide. According to the learned Senior counsel for the appellant, there is no reason why the bid of the appellant as far as Peren district is concerned should not have been accepted and awarded to him.
10.6 Coming to the plea of the State that the work was not awarded to the appellant because of his poor performance, learned Senior counsel submits that, that is the plea taken only later on by way of affidavit to justify their illegal action, which is impermisible as held by the Hon'ble Supreme Court in the case of Mahinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors1. This explanation is a mere afterthought to justify the illegal action by way of subsequent affidavit. Further, learned Senior counsel has led great emphasis on contending that this is not the simple rejection of a bid on 1 (1978)1 SCC 405 WA 328/2021 & 329/2021 Page - 15 of 50 poor performance. It is nothing but the blacklisting. The fact remains that at the relevant time, the appellant could not complete all the works which is nothing very unusual in this part of the country and in fact, most of the other bidders also could not complete earlier works in time. But the effect of such rejection of the appellant would be that this ground can be taken against the appellant in any subsequent bids also to reject other tenders of the appellant. If that is so, it really amounts to blacklisting. Thus, the effect of rejection of the bid of the appellant on the ground of poor performance is nothing but blacklisting of the appellant on the ground of alleged poor performance. If it amounts to blacklisting, the learned Senior counsel submits that, in that case, notice ought to have been given as otherwise, it would violate the principles of natural justice as has been reiterated by the Hon'ble Supreme Court in a number of cases i.e. (i) M/s. Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal & Anr2. (ii) Raghunath Thakur Vs. State of Bihar & Ors3. and (iii) UMC Technologies Private Limited Vs. Food Corporation of India & Anr4.
10.7 It has been submitted that in the present case, no such notice was given by the authorities before rejecting the bid of the appellant on the ground of poor performance. It was highlighted only at the time when the appellant took the matter to the Court where the authorities tried to justify their action by 2 (1975)1 SCC 70 3 (1989)1 SCC 229 4 (2021)2 SCC 551 WA 328/2021 & 329/2021 Page - 16 of 50 filing an affidavit. It has also been submitted that if the authorities had informed the appellant of this so called poor performance, he could have convinced the authorities with proper reasons for doing so. In any event, it is the contention of the appellant that this poor performance is not of such a nature that he would be totally unable to execute the work in view of his advantageous position in other parameters as reflected in the technical bid. 10.8 Learned Senior counsel accordingly submits that since the appellant was found to be the most meritorious in the technical assessment and since all other bidders were of the same rank as far as the financial bid is concerned, in the overall assessment, the writ appellant would be most meritorious. The technical aspect of the bid which relates to the ability of the appellant to execute the work could not have been ignored. Under the circumstances, the authorities ought to have awarded the contract to the appellant. In this regard, learned Senior counsel for the appellant has referred to the decision of the Kohima Bench of this Court rendered in East West Construction Vs. State of Nagaland & Ors.5, in which the learned Single Judge in a similar situation had directed award of the contract to the highest bidder being the most meritorious amongst the bidders and as such, in the present case, since the appellant was found to be the most meritorious, may be given this award. It has been also submitted that even though the re-tender was floated, no work order has been issued to any one in terms of the interim order passed by this 5 2017 SCC Online Gau 196 WA 328/2021 & 329/2021 Page - 17 of 50 Court on 30.11.2021 and as such, no third party right has arisen and as such, awarding of tender in favour of the appellant at this stage will not cause any prejudice to anybody and the appellant would be able to execute the work within the time stipulated under the contract.
10.9 Learned Senior counsel for the appellant submits that once the award of the tender to respondent No.9 has been cancelled, rightly so by the learned Single Judge on the ground that he had indulged in malpractice of playing fraud by using the documents belonging to the appellant, the learned Single Judge ought to have remanded the matter to the authorities to reconsider the matter on the basis of the available materials and award the contract to the appellant who is the most meritorious.
CONTENTIONS OF THE STATE:
11. Ms. M. Kechii, learned Additional Senior Government Advocate, Nagaland in response, has submitted that after all the bids were technically examined and were found to be responsive, the financial bids were open, whereupon, it was found that all the bidders had quoted the same rate. Under the circumstances, the Selection Committee had to re-examine on which basis the bid had to be awarded for which as provided under Clause 25.1 which enables the authorities to further determine the responsiveness of the bid with respect to the remaining bid conditions i.e. price bid of quantities, technical specifications and drawings by resorting to the Clause 4.2(c) of the SDB which deals with WA 328/2021 & 329/2021 Page - 18 of 50 experience in work of similar nature and size for each of the last five years and details of works in progress or contractually committed with certificate from the concerned Officer not below the rank of Executive Engineer or equivalent. While undertaking the aforesaid exercise and re-assessment as provided under Clause 25.1 mentioned above, the competent authority found that the performance of the petitioner was not satisfactory inasmuch as the work progress only about 21.22% whereas the respondent No.9 was found to have completed all his works.
11.1 Under the circumstances by invoking the clause under 4.7(ii), the Committee decided to reject the bid of the petitioner and award contract to the respondent No.9 and as such, it has been submitted that there was no arbitrariness or malafide and the selection process was done as per the terms and conditions of the SDB of which the petitioner was also fully aware of. Since the bid was rejected because of his poor performance which is also a fact, not denied by the petitioner, it cannot be said to be arbitrary and as such, the finding of the learned Single Judge does not warrant any interference from this Court. More so, when the tender has already been re-floated in terms of the directions of the learned Single Judge and same has been finalized and the work order can be issued to the successful bidder so that the construction of road, which have been upheld for a long time, can be completed as the shortest possible time. However, awarding of the contract has been withheld because of WA 328/2021 & 329/2021 Page - 19 of 50 the interim order passed by this Court.
11.2 Ms. Kechii, learned Additional Senior Government Advocate, Nagaland relying on the decision of the Hon'ble Supreme Court in M/s. N.G. Projects Limited Vs. M/s. Vinod Kumar Jain [Civil Appeal No.1846/2022, decided on 21.03.2022] submits that the Court as far as possible ought not to interfere in the matter relating to tender so that overwhelming public does not suffer. Ms. Kechii submits that when the technical bid was opened, Clause 4.7(ii) was not invoked as the bidders were all justified technically. It was invoked only when the financial bid was open and when it was found that all the bidders had quoted same rate, thus resulting in a stalemate. Under the circumstances, the Selection Committee considering the poor performance of the appellant rejected his tender and awarded to the respondent No.9 as there was no work pending with him.
REPLY OF THE APPELLANT:
12. In response, Mr. M. Dewan, learned counsel assisting Mr. D. Das, learned Senior counsel for the appellant has submitted that perusal of the Clause 12 of the Standard Bid Document (SBD) would indicate that the bids submitted by the bidders are in two parts. Part I consists technical qualification part of bid which comprises inter alia, qualification, information, supporting documents, scanned copy of original affidavit, undertakings as specified under Clause 4 of the ITB.
Clause-4.2 of the ITB covers the past performance. Thus, it cannot be said that WA 328/2021 & 329/2021 Page - 20 of 50 the authority did not consider the past performance in the Part I. As far as the 2nd Part, which is named as Technical Financial Part of Bid, it comprises only of the following aspects: (i) Form of bid for Part-II of the bid as specified in Section 6 and (ii) Priced bill of quantities for items specified in Section 7. 12.1 It has been further submitted that neither Section 6 nor Section 7 talks about the past performance and as such, it would not be permissible to invoke the past performance clause under Part-II. It has been also submitted that the works pertain to implementation of the Schemes under the Pradhan Mantri Gram Sadak Yojana in connection with which the Government of India had issued a Circular on 07.05.2013 laying down the guidelines for award of contract under the Pradhan Mantri Gram Sadak Yojana and as such, according to him, this Circular also has to be kept in mind while considering the clauses under the Standard Bidding Documents of the tender floated in the present case.
12.2 It has been submitted by the learned counsel that it has been provided under Clause 4.7 of the aforesaid circular that upon opening the financial bid, a comparative statement would be generated by the GePNIC both in the cases of percentage, rate, tenders as also in the case of item rates tenders and the bidding documents. The bidding documents provide for award of work to the lowest evaluated bidder, if the bid is found reasonable, subject to availability of the bid capacity and accordingly, the bid will be evaluated financially by the WA 328/2021 & 329/2021 Page - 21 of 50 Committee as mentioned in the circular. It has been submitted that the appellant was informed on 12.06.2022 by an email by the authority that his bid has been accepted during the financial evaluation by the duly constituted Committee, thereby indicating that all credentials of the appellant has been looked into and was found qualified for the said tender. Therefore, it would be impermissible to go back and refer to the clause which was supposed to have been taken into consideration while declaring the appellant justified technically and later financially also.
12.3 Mr. Dewan submits that the judgments of the Hon'ble Supreme Court rendered in M/s. N.G. Projects Limited (supra) may not be strictly applicable in the present case inasmuch as there is no dispute relating to any wrong application or interpretation of the clauses of the tender. Further, viewed from the sequence of events which have taken place in the present case there appears to be a clear cut case of arbitrariness and discrimination which would warrant interference from this Court on the basis of the principle laid down by the Hon'ble Supreme Court in Jagdish Mandal Vs. State of Orissa & Ors. 6 In fact, the ratio of Jagdish Mandal (supra) has been also reiterated of the paragraph 16 of the M/s. N.G. Projects Limited (supra).
CONSIDERATION BY THE COURT:
13. Before we deal with the rival contentions of the parties and the reasons 6 (2007)14 SCC 517 WA 328/2021 & 329/2021 Page - 22 of 50 and conclusion arrived by the learned Single Judge, we would like to examine ourselves the manner in which the tender was processed by the authorities in the light of the records which are made available before us by the learned counsel for the State.
13.1 From the records and pleadings, what we have noticed is that the Selection Committee made a technical evaluation of all the bids of the bidders and as per the said bids in respect of the work, namely, T-01 to Lilen via Vonkitem relating to Peren district under Package No.NG0901A012. The bidders have been awarded marks in respect of various parameters i.e. (i) information of bidders, (ii) experience in similar works, (iii) assessed available bid capacity,
(iv) major items of construction equipment, (v) laboratory equipments, (vi) qualification & experience (general/proposed position) of key personnel available for the work, (vi) evidence of access to lines of credit and availability of financial resources (10% of contract value), as follows:-
Summary of Technical Evaluation NAME OF WORK: T-01 to Lilen via Vonkitem Package No.:NG0901A012 Date of Sanction:24th September 2019 Completion period: 18 Months Amount put to tender: Rs.1660.52 lakhs Sl. Requirement Max K.C. Pongshi Trident Northeast ND & No. Points Angami Phom Enterprise Enterprise Co.
1 2 3 4 5 6 7 8 1 Information of Bidders 5 5.00 5.00 5.00 0.00 0.00 2 Experience in similar works- Details of works 25 21.74 10.08 25.00 5.22 8.21 of similar nature executed during last 5 yrs.
WA 328/2021 & 329/2021 Page - 23 of 50
Sl. Requirement Max K.C. Pongshi Trident Northeast ND &
No. Points Angami Phom Enterprise Enterprise Co.
3 Assessed Available Bid Capacity 25 25.00 25.00 25.00 25.00 25.00
4 Major items of construction equipment 15 0.73 10.47 15.00 0.63 4.35
5 Laboratory Equipments 5 5.00 5.00 5.00 5.00 5.00
6 Qualification & Experience 5 5.00 5.00 5.00 5.00 5.00
(General/Proposed position) of key personnel
available for this work
7 Evidence of access to lines of credit and 5 5.00 5.00 5.00 5.00 5.00
availability of financial resources (10% of
contract value) in Crores
TOTAL 85 67.46 65.55 85.00 45.85 52.56
Whether Technically Pre-qualified
13.2 From the above, what can be noted is that the appellant was awarded 85
marks and thus got the maximum marks in the technical bid, and the respondent No.9 was awarded the 4th highest marks of 52.6. What is significant is that in respect of the 2 nd parameter i.e. experience in similar works which relatable to Clause 4.2(c) of the SBD, the appellant was awarded maximum mark of 25 out of 25 marks and the other remaining bidders were given lesser marks as can be seen from the table above. In other parameters also most of the bidders were given similar or less marks as the appellant. What is significant and notable is that in this particular parameter relating to experience of similar works of the work being already executed or past works, the appellant has been given the highest marks of 25 that too, the maximum possible marks which could be awarded out of 25 marks. This assessment would clearly lead to the inference that his past performance was fully satisfactory as otherwise, he would not have been given 25 out of 25 marks. In WA 328/2021 & 329/2021 Page - 24 of 50 our opinion, the aforesaid factum is critical and significant for the reason that the entire case of the parties revolved around this parameter as it on this parameter itself the authorities later on decided to reject the bid of the appellant and award the same to the respondent No.9 (which though was ultimately set aside by the learned Single Judge on some other grounds, whiich we will discuss at a later stage).
13.3 From the above, it is quite apparent that there cannot be any issue regarding the past performance as far as the appellant is concerned as his bid was declared to be technically qualified and was awarded the maximum marks in matters relating to his past performance. It appears that the Committee also did not find any other bidders also not to be technically qualified. Thus, we will proceed with this position that the Committee did not find any of the bidders including the appellant technically not responsive. If any of the bidders had been found not to be technically responsive, the question of taking part in the 2nd stage relating mainly to financial bid would not have arisen. Accordingly, as the Committee found all the bids including that of the appellant to be technically responsive, all the bids were opened for the second stage of financial bid. However, while opening the bid it was found that all had quoted the same rate. Thus, there appearred to have been certain stalemate for proceeding forward in as much as all the bidders were found to be quoting the same rates, as also reflected in the memo of appeal. The bidders had quoted WA 328/2021 & 329/2021 Page - 25 of 50 the same rate as given below:-
eTendering System for Pradhan Mantri Gram Sadak Yojana (PMGSY) Tender Inviting Authority : Empowered Officers, NGRRDA Name of the Work : T-01 to Lilen via Vonkitem Package No : NG0901A012 COMPARATIVE STATEMENT Sl. Bidders Name Estimated Rate Quoted Rate Remarks No. (in Percentage) 1 M/s K.C. Angami and Sons 1660.52 Lakhs As per SOR 2017 Qualified Consortium 2 A PONGSHI PHOM 1660.52 Lakhs As per SOR 2017 Qualified 3 Triden Enterprises 1660.52 Lakhs As per SOR 2017 Qualified 4 M/s Northeast Enterprise 1660.52 Lakhs As per SOR 2017 Qualified 5 ND and Co 1660.52 Lakhs As per SOR 2017 Qualified Work awarded to M/s ND and Co 13.4 It was mentioned that all were qualified as can be seen from the above chart. Thus, the situation remains that all the bidders were technically as well as financially qualified. Under such circumstances, what should have been the next course of action taken by the Selection Committee, if all the bidders have been technically and financially qualified. That is the question which we have to answer in the light of the action taken by the State which was questioned in the writ petitions, and which we are called upon to examine in these appeals. 13.5 According to the appellant, if he was found to be the most meritorious in the technical bid and if the financial bid remains the same, he should have been WA 328/2021 & 329/2021 Page - 26 of 50 given preference by fact of he being the most meritorious in technical bid, for the reason that while financial aspect of the tender is important, yet the technical aspect in a tender is also equally important for the reason that unless a bidder is technically qualified and sound to undertake the contract, he cannot execute the work properly and since the bid of the appellant was not rejected at the stage of assessment of the technical bid, he being the most meritorious amongst the bidders, ought to have been given preference and the contract should have been awarded to him. However, instead of doing so, they picked up the respondent No.9 on the plea that the past performance of the appellant was not satisfactory, which according to the appellant is not permissible for which the appellant has made his submissions at length, as narrated above. As such, it may not be necessary to repeat the submissions again at this stage. 13.6 On the other hand, the specific stand of the State Government both before the learned Single Judge and also before us is that though the appellant was technically qualified as others and since at the stage of financial bid it was found that all had quoted same rate, the State had to decide on which basis the bid was to be awarded, for which purpose they again went back to the past performance of the bidders. The State's contention is that it was necessary to go back to the past performance for the reason that there should not be any undue delay in execution of the contract and since the appellant was found to have performed only about 21.22% of the work already allotted to him in WA 328/2021 & 329/2021 Page - 27 of 50 respect of other projects which the appellant was executing, and since there was no work pending in respect of respondent No.9, it was felt in the interest of speedy execution of work that the award should be offered to somebody who had no pendency of work. Since there were works pending as far as the appellant is concerned, the Committee rejected his bid and awarded the same to the respondent No.9.
13.7 In fact, it is this particular decision of the Committee which was questioned before the learned Single Judge. It may be mentioned that the learned Single Judge accepted the said plea of the State, can be seen from paragraph 21 of the judgment. This finding of the learned Single Judge recorded in paragraph 21 is based on the affidavit-in-opposition filed by the State respondents as mentioned in paragraph 8 of the judgment. We shall be adverting to the finding/conclusion of the learned Single Judge as recorded in paragraph 21 at a later stage. What is important to be noted from the judgment of the learned Single Judge is that the learned Single Judge accepted the plea of the State respondents that the bid was not awarded to the appellant/petitioner on the ground of his delay in executing other pending works and consequently it was awarded to the respondent No.9. 13.8 It is the specific plea of the appellant that the criteria of past performance could not be invoked again to disqualify his bid. According to the learned Senior counsel for the appellant, in fact, that particular parameter of WA 328/2021 & 329/2021 Page - 28 of 50 work performance in the last 5 years had been already taken into account at the time of technical evaluation of the bids and having found the technical bid of the appellant responsive, the authorities could not have invoked the same criteria to disqualify him.
13.9 On the other hand, it is the plea of the State that the State had invoked this in the interest of work after finding all the bidders who have quoted same amount in their financial bids just causing a dilema for the authorities as to the method on which the best bidder has to be chosen for executing work and the State considered that past performance would be the most appropriate criteria to be adopted to award the contract. It is also the case of the State that Clause 4.7(ii) was not invoked in the earlier part of the bid process but was invoked only at the later stage in the interest of speedy execution of work.
14. Before we examine the merits and demerits of the respective submissions advanced on the part of the parties, it may be apposite to briefly refer to the reasons for the conclusion arrived at by the learned Single Judge. 14.1 Learned Single Judge after hearing the parties and keeping in mind the past performance of the appellant observed that his performance in the 3 (three) projects had been dismally poor and there had been inordinate delay in completion of the projects and as such, keeping in view the terms and conditions given at paragraphs 15 and 16 of the NIT and Clause 4.7 of the ITB and the settled principles of law, the learned Single Judge held that the WA 328/2021 & 329/2021 Page - 29 of 50 employer/the State respondents were very much within their domain when they rejected the bids of the appellants in respect of the 3(three) works in question in the three writ petitions.
14.2 Learned Single Judge observed that the State respondents are responsible to make sure that the works are executed and completed within time and as such, they have to choose someone whom they believe can do the same and one of the ways to ascertain is to see the track record of the contractor/contractors. While doing so, the State respondents found that the performance of the appellant was wanting, thus, leading to rejection of his bids. Accordingly, the learned Single Judge did not find any mala-fide, arbitrariness or unreasonableness in such an action taken by the State.
14.3 Learned Single Judge also held that the explanation for delays in execution of three works given by the petitioners are not supported by documents except the No Objection Certificate under Exclusive Rules 2008 issued by the Deputy Commissioner, Dimapur dated 28.09.2020 and concerning one of the projects i.e. L-026 to Kendong.
14.4 Learned Single Judge held that this certificate does not help the case of the appellant as it was a duty of the appellant to apply for the same earlier so that the work progress is not disturbed by non-issuance or late issuance of such a certificate. Learned Single Judge held that he cannot blame others for his inaction as submitted by the learned counsel for the State that the contractors WA 328/2021 & 329/2021 Page - 30 of 50 are supposed to know what is expected to be done during the execution of works and they had been given opportunity to inspect the work site voluntarily even before the submission of their bid.
14.5 Further, it was also observed that the appellant's explanation that one of the works was delayed because of massive landslide on the only road connecting work site with outside world which has delayed in the transportation of machineries, materials and equipments is not acceptable as there is nothing to show that landslide had actually happened there.
14.6 Further, as regards the explanation of the appellant in the case of the project T-01 to Thetsumi that due to dispute of ownership between the villagers and the Government and unforeseen circumstances, the work was delayed, it cannot be also accepted as the same is not substantiated.
Thus, the learned Single did not find the explanation offered by the appellant to explain the delay in execution to be satisfactory. Accordingly, the learned Single Judge declined to interfere in the rejection of the petitioner's bid.
15. Thereafter, the learned Single Judge proceeded to examine as to what is to be done in respect of work order already issued which was a subject matter in the aforesaid 3(three) writ petitions.
15.1 As regards WP(C) No.71/2020, the learned Single Judge held that the contention of the appellant that since he is the lowest bidder, awarding the WA 328/2021 & 329/2021 Page - 31 of 50 contract in favour of the respondent No.9 therein, was unfair and unreasonable and was not acceptable. Learned Single Judge proceeded to hold that the past performance of the respondent No.9 was much better than that of the appellant and as such, there was nothing wrong in awarding the tender in favour of the respondent No.8 therein (respondent No.9 herein) because of better performance of the work.
Accordingly, leanred Single Judge held that there is no arbitrariness, unfairness or discrimination in the decision making process of the authority and does not in any way affect public interest rather it would subserve the same as awarding contract to non performing contractor may only lead to loss of public money and accordingly, declined to interfere with the award of tender in favour of the respondent No.9.
15.2 It is to be noted that the appellant has not challenged the said finding of the learned Single Judge in upholding the order of the Selection Committee/State respondents in not awarding the tender to the appellant but to M/s Multi Builders (respondent No.8 therein), which order was the subject matter of challenge in WP(C) No.71/2020.
The learned Single Judge also came to the same conclusion as regards the other remaining two writ petitions, WP(C) No.72/2020 and WP(C) No.94/2020 by holding that the rejection of the tender of the appellant did not amount to arbitrariness and a discriminatory act which would warrant WA 328/2021 & 329/2021 Page - 32 of 50 interference.
However, as regards awarding the tender in favour of the respondent No.9, the learned Single Judge held that since it was found that the respondent No.9 had relied on certain documents relating to vehicles which actually belonged to appellant, he had submitted false documents while submitting his bid, and thus, committed forgery or fraud and since fraud vitiates the entire transaction, the award of contract in favour of the respondent No.9 was held illegal and accordingly, the work order issued in favour of the respondent No.9 in both the writ petitions, WP(C) No.72/2020 and WP(C) No.94/2020 were set aside and all consequential actions were also quashed and set aside.
Thus, the learned Single Judge while dismissing the writ petition, WP(C) No.71/2020, in its entirety, had partly allowed the remaining two writ petitions, WP(C) No.72/2020 and WP(C) No.94/2020 by setting aside the award of tender in favour of respondent No.9 and directed the State respondents to take immediate steps for issuing fresh tender for the projects in the two writ petitions, WP(C) No.72/2020 and WP(C) No.94/2020 with the further direction to pay respondent No.9 for the works already undertaken.
16. We will now critically examine the explanation offered by the State and the submissions advanced on the part of the appellant.
16.1 It is on record and not disputed by any of the contesting parties that the WA 328/2021 & 329/2021 Page - 33 of 50 petitioner was awarded the highest marks i.e. 25 out of 25 in respect of experience in similar works which is relatable to Clause-4.2(c) of the standard bidding documents i.e. experience in work of similar nature and size for each of the last five years and details of works in progress or contractually committed with certificate from the concerned officer not below the rank of Executive Engineer or equivalent. Having given full 25 marks out of total 25 marks in that parameter to the appellant and thus, the maximum marks and highest scorer in that parameter amongst the bidders because of which, the appellant obtained the highest marks in the technical evaluation, we are of the view that the same parameter could not have been invoked to disqualify him. According to the State, the bid of the petitioner was rejected by invoking Caluse-4.7(ii) of the standard bidding document. We are of the view that it could not have been done for the reason hereafter discussed.
16.2 It has been submitted before us by the State that the said Clause 4.7(ii) is based on the past performance of the records of the petitioner which is part of the documents submitted as Part-I bid i.e technical evaluation. The record of poor past performance of the petitioner is based on the record submitted by him at the time of submission of his bid. We are of the view that though there is a specific clause under 4.7(ii) to disqualify any bid, such a finding has to be based on certain factual positions of the poor performance which in the present case, is traceable only to those bid documents already submitted by the present WA 328/2021 & 329/2021 Page - 34 of 50 petitioner. It is not the case of the State that the Committee undertook a fresh exercise for ascertaining the past performance beyond what is already on record. In fact, perusal of the records indicates that while the Committee made the assessment of the past performance of the bidders, it was on the basis of the information already furnished which were thus already available before the Committee. As mentioned above, in the technical assessment, the appellant was given 25 marks out of 25. However, in the subsequent exercise undertaken, the observation of the Committee was that the petitioner was able to complete only 21.22%. Thus, what we see is that there is variance in the assessment of the work performance of the petitioner at two stages, one at the time technical assessment and another at the time of final award of the contract but the assessment was based on the same set of materials which were available with the Committee at the time of technical assessment and subsequently, at the time of rejection of the bid of the petitioner.
What we are trying to emphasis is that if the Selection Committee had made another assessment of the past performance of the bidders after the opening of the financial bid, it was on the basis of the same set of materials which was looked into by the same Committee at the time of technical evaluation. While in the first exercise undertaken by the Committee at the stage of technical evaluation, the petitioner was given the highest marks yet the same Committee found fault with the petitioner in the second evaluation on the same WA 328/2021 & 329/2021 Page - 35 of 50 set of documents. Therefore, we find that the aforesaid assessment and exercise undertaken by the authority to be arbitrary, being not consistent. 16.3 We have been made to understand at the time of hearing that the respondent No.9 was awarded this contract as there was no work pending against him but when we perused the records it is seen that though there was no work pending against him, 2 works were earlier allotted to him. The first work was allotted on 07.06.2012 which was completed by him on 09.06.2018 which took 6 years and the second work order was issued on 23.06.2009 and it was completed on 12.03.2018 which took about 9 years to complete though these works were supposed to be completed within 12 months (1 year). Even if the respondent No.9 completed the works and there was no pending works, the performance of the respondent No.9 cannot be said to be satisfactory also as he took near about 8 to 9 years to complete these works. If the respondent No.9 had taken 6 to 9 years to complete the earlier two works which were to be completed in 1(one) year, on what basis the Committee came to the conclusion that the respondent No.9 can complete the work within time and will not take 6 to 9 years in this case also? However, the Committee did not consider this aspect and proceeded to award the contract in favour of the respondent No.9 mainly on the ground that there was no pending work. Thus, we are of the view that the award of the contract to the respondent No.9 mainly on the ground that there was no work pending perhaps cannot be considered to be a WA 328/2021 & 329/2021 Page - 36 of 50 correct decision based on germane materials. It is on record that the respondent No.9 took around 8 to 9 years to complete the earlier projects. To that extent, it can be said that the decision of the State to award the contract to the respondent No.9 cannot be said to be based on relevant materials. 16.4 Be that as it may, since the contract awarded to the respondent No.9 has already been set aside by the Single Judge of this Court and the same has not been challenged by the respondent No.9, we do not wish to make any further observation as regards the award and cancellation of contract to the respondent No.9.
16.5 What is significant to be noted is that the respondent authority invoked clause under 4.7(ii) to disqualify the appellant on the ground of poor performance. The fact remains that the authorities invoked this Clause 4.7(ii) to reject the bid of the petitioner. The question before us to be decided, as also pleaded by the appellant is, whether it was appropriate for the authorities to invoke the said clause to reject the bid of the appellant. According to the appellant, as stated above, it could not be invoked as it amounts to applying the same criteria for the purpose of qualification and as well as disqualification. 16.6 Therefore, the natural question which arises for consideration is whether invoking of this Clause 4.7(ii) by the Selection Committee amounts to arbitrariness, thus violating Article 14 of the Constitution of India as submitted by the learned Senior Counsel for the appellant.
WA 328/2021 & 329/2021 Page - 37 of 50 16.7 Learned Senior Counsel for the appellant has very forcefully submitted before this Court that while the authority had every right and liberty to invoke this clause to disqualify the bid, this right to disqualify the bid was to be invoked at the stage of technical assessment itself when the past performance was to be considered at that stage and not thereafter.
16.8 As regards this submission, we are of the view that this clause is part of the contract SBD which could be invoked by the State at any stage of the bid and not necessary only at the technical bid stage. At the same time, we are of the opinion that if the State had already taken into account the very basis or foundation of this clause i.e., the past performance of the bidder, and yet opted not to invoke at the relevant time and did not find any fault with the appellant at an earlier stage, it could not have been invoked at a later stage. Yet, if it is sought to be invoked again at any stage it must be only with justifiable reasons and on the basis of any other additional input or consideration.
The State cannot be allowed to approbate and reprobate. Once, the bid of the appellant was found to be technically responsive and was accepted on the basis of the same material, the State cannot be allowed to take a contrary view on the basis of the same material, as otherwise, the scope for arbitrary action will be always there.
Therefore, if the Selection Committee was not satisfied with the past performance of the bidder, they ought to have invoked this clause to disqualify WA 328/2021 & 329/2021 Page - 38 of 50 the bid of the petitioner at the stage when the matter was considered which included considering that aspect of past performance, the parameters of the technical bid assessment includes past performance as mentioned in clause 4.2(c). Therefore, ordinarily unless there are some pressing circumstances, which ought to be brought on record, this clause 4.7(ii) to reject the bid on the basis of past performance could not have been invoked once the Committee found that the past performance of a bidder was responsive both during the technical and financial evaluation and not worth rejecting. Rather, if found that past performance of the appellant more satisfactory.
16.9 In our view, Clause 4.7(ii) could still be invoked at any stage if there are additional materials to show the poor performance of the bidder in which event, in our view that aspect ought to have been pointed out to the bidder. However, in absence of any additional materials or documents or subsequent developments to show the poor performance, this clause in our view cannot be invoked to reject the bid of a candidate when there was no change in the materials which had already been considered and the Committee did not find the bid not worthy of rejection or disqualification. In fact, we are surprised to see that in this parameter of past performance, the appellant was given the highest mark i.e. 25 out of 25. If the appellant was given the highest marks in that parameter of past performance, we fail to understand how his bid could be rejected on the same parameter without any change in the circumstances.
WA 328/2021 & 329/2021 Page - 39 of 50 16.10 In the exercise undertaken by the Selection Committee which led to rejection of the bid of the petitioner and others except for the respondent No.9, we see that the exercise was undertaken on the same set of documents on which the appellant was given the highest marks. There could be a variety of reasons for the delay in executing the work. We will not enter into the merit of the issue for the reason that it is an factual aspect, though the learned Single Judge has decided the issue on the basis of the affidavits filed by the parties in course of the writ proceedings. The appellant had taken a certain plea before the learned Single Judge trying to explain the delay, with which the learned Single Judge was not impressed. What we have noted is that such a finding was based on the affidavits filed. There is nothing to indicate that in connection with the said issue of delay, the records were placed before the learned Single Judge for arriving at his own conclusion. We are of the view that it would have been more appropriate, if the appellant was given the opportunity to explain the reasons for the delay in execution of work and the State examined the same, rather than the Court taking upon itself to examine this issue as it involved factual aspects. We would have liked the Selection Committee/the competent authority to arrive at its own conclusion about the said issue of poor past performance based on record and after considering any explanation that may be offered by the petitioner. In our opinion, the authorities would be in a better position to appreciate the practical difficulties, if any, expressed by the appellant, more so, when the appellant was awarded the highest mark in that WA 328/2021 & 329/2021 Page - 40 of 50 parameter.
16.11 There is another aspect which has troubled us also. As far as the aforesaid package relating to Peren District is concerned, on 12.06.2020 the authorities specifically communicated to the appellant that his bid is financially responsive. Thus, if the bid of the petitioner was responsive, both technically and financially, the question of rejection of the bid did not arise. While it is for the Committee to still go ahead and not to select the appellant and award the contract to another person for a good reason, the question of disqualifying does not arise. Therefore, we fail to understand why the bid of the petitioner was disqualified though the authorities had every right not to award the contract to him but to any other bidders, for justifiable and good reasons in terms of Clause 28 of the SBD, which reads as follows:
"28. Employer's Right to Accept any Bid and to Reject any or all Bids 28.1 Notwithstanding Clause 27 above, the Employer reserves the right to accept or reject any Bid, and to cancel the bidding process and reject all bids, at any time prior to the award of Contract, without thereby incurring any liability to the affected Bidder or bidders or any obligation to inform the affected Bidder or bidders of the grounds for the Employer's action."
16.12 In the present case, the award of contract to the respondent No.9 does not appear to be on justifiable grounds, though it has been already set aside by the learned Single Judge of this Court on a different ground of playing fraud. Since the award of contract in favour of the respondent No.9 was set aside by WA 328/2021 & 329/2021 Page - 41 of 50 the learned Single Judge, in our opinion, the matter ought to have been remanded to the authority concerned to reconsider the award of the contract to the most suitable bidder.
Thus, we are of the view that though the right of the Selection Committee to award the contract to any other bidder remains and cannot be questioned, yet if the bid of any person is rejected after it was found to be qualified technically as well as financially, there must be sound reasons for rejecting the same on the same grounds. Disqualification of a bid is one thing and non awarding of a contract to the bidder is another thing. 16.13 In the present case, what has happened is that the Selection Committee awarded the bid to the respondent No.9 by disqualifying the appellant. The power to disqualify is to found in Clause 4.7(ii) and we have already discussed that the said disqualification does not appear to be correct. 16.14 What we have also noted is that the respondent No.9 was awarded the contract in respect of two works as mentioned above, on the ground that there was no pending work by the respondent No.9. If the said logic is accepted and applied in all cases, we fail to understand why the respondent No.9 was not awarded the contract in respect of other works also which was given to another bidder, namely, M/s Multi Builders which was the subject matter of consideration in WP(C) No.71/2020. Since the award of the tender to M/s Multi Builders (respondent No.8 in the said writ petition WP(C) No.71/2020) for the WA 328/2021 & 329/2021 Page - 42 of 50 work between Kuthur to Chassir in Tuensang district has not been challenged, we will not make any comment on it except for making a reference to it for the purpose of examining the consistency of the actions of the State. As discussed above, in fact, the respondent No.9 also could have been given the work order which was awarded to M/s Multi Builders as M/s Multi Builders also did not complete three works allotted to it. Thus, the rejection of the bid of the appellant on the alleged ground of past poor performance, does not appear to be convincing to us.
16.15 The State has taken a specific plea that the bid of the petitioner was not accepted by invoking the Clause 4.2 and the Single Judge in his finding in Para- 21 specifically refers to 4.7(ii) of the ITB which was relied upon by the State not to award the contract. We are of the view that while the authority had all the liberty not to award the contract to the appellant but they could not have invoked the Clause 4.7(ii) for the reason that this is a clause which can be invoked only to disqualify a bid and this clause cannot be invoked after the bid of the appellant had been found to be responsive both technically and financially was acceptable at all the stages of the bid process as can be seen from the records. Disqualification in our view also would mean that the bid suffers from certain material defects of substantive nature which would render such a bid unresponsive.
16.16 Therefore, if the authority has invoked Clause 4.7 as also approved by WA 328/2021 & 329/2021 Page - 43 of 50 the Single Judge, it certainly amounts to apparent existence of certain fundamental defect in the bid of the appellant which we do not find to exist. Since the bid of the appellant was found to be responsive both technically and financially, it cannot be said that there was any fundamental defect. On the other hand, if that fundamental defect is poor performance as submitted by the State, in that event, the apprehension of the appellant that it amounts to black listing cannot be said to be without substance as the appellant was awarded the highest mark in that regard. In fact, if the bid is disqualified on that ground of poor performance as has been done by the State, that same ground can be taken against him in any other bid submitted by the appellant in respect of any other work, thus literally disqualify in other bid also which has the same effect as blacklisting. In such circumstances, this disqualification of the appellant on the aforesaid ground of poor performance can be said to be stigmatic which can be used, as apprehended by the appellant, against him in any other subsequent bids.
16.17 It may be also noted that minute examination of the provisions of Clause 4.7(ii) which has been invoked in the present case by the State shows that disqualification of the petitioner by taking recourse to Clause 4.7 will have a stigmatic effect which may be used against him in other contracts. Therefore, in our opinion, as the appellant was found qualified technical as well as financial in the bid process, if the State wanted to invoke Clause 4.7(ii) to disqualify him, WA 328/2021 & 329/2021 Page - 44 of 50 the appellant ought to have given a prior notice or at least the appellant could have been confronted with this proposed action so that he could have explained the position before the Committee, which does not appear to have been done in the present case.
16.18 In fact, what has caused concern to us also is that while the appellant was informed that his financial bid was accepted on 12.06.2020 by email, the respondent No.9 was awarded the contract on a previous date on 11.06.2020 though the State has tried to explain the said anomaly by stating that because of certain technical glitch the email could not be sent to the petitioner in time and the same was sent one day after the contract was awarded to the petitioner. We, however, find the said explanation unsatisfactory.
17. It is also seen from the records that, vide an interim order dated 30.11.2021 passed by this Court, the State was permitted to proceed with the new tender process but not to finalise the same. We have been informed by the learned counsel for the State that although the new tenders were invited and the bids received have been processed, in terms of the Judgment and Order dated 04.08.2021 passed by the learned Single Judge, however, the work order has not been issued in view of the subsequent interim order dated 30.11.2021 passed by a Division Bench of this Court. We are also informed by the learned counsel for the appellants that the appellants have not participated in the said new tender process initiated pursuant to the direction of the learned Single WA 328/2021 & 329/2021 Page - 45 of 50 Judge in the impugned judgment and order.
18. In view of our findings as discussed above, we are firmly of the view that the disqualification on the appellants by resorting to Clause 4.7(ii) by the State/employer on the same parameters on which the appellants was earlier held to be qualified and was found most meritorious, without there being any further good reasons is ex-facie arbitrary. We would also like to mention that past poor performance of works can certainly be taken into consideration for not awarding any work. But in the instant case, what we have noted is that, as revealed by the records, the appellant was indeed given the highest mark in that regard, that is, 25 out of 25. Thus, having awarded the highest mark in that parameter, rejecting and disqualifying his tender on the basis of the same parameter appears to us quite arbitrary. It appears to us that the authorities wanted to avoid awarding the tender to the appellant. As discussed above, if pendency of works was the reason not to award the tender, we have also noted that M/s Multi Builders was awarded the work from Kuthur to Chassir in Tuensang district even though, it had also pending works. The said work could have been awarded to the respondent No.9 also. Further, we have also noted that the work performance of the respondent No.9 in the past could be said to be satisfactory also, as he had taken 6 to 8 years in completing the two projects in the past, which were required to be completed in 1(one) year. What is the reason for believing that the respondent No.9 will not take similar long years in WA 328/2021 & 329/2021 Page - 46 of 50 executing the present works awarded to him? It is a different matter that the learned Single Judge subsequently quashed the work order issued in favour of the respondent No.9 for a totally different reason for practicing fraud by the respondent No.9. In other words, we are satisfied that the action and reasons assigned by the State in not awarding the contract to the appellant appears to be discreminatory, arbitrary and unreasonable. The reason assigned, that is, poor past performance of the appellant in our view could not have been used, for reasons herein above discussed.
19. Once the State decides to call for a bid then the terms and conditions and the clauses of such a tender published as NIT are not only binding on the intending bidders but also to the State and the State is also expected to follow the terms and conditions scrupulously.
20. Accordingly, for the reasons discussed above, we set aside the findings of the learned Single Judge to the extent it upheld the disqualification of the appellant on the ground of delay in respect of past performances as well as the rejection of the bid of the respondent No.9.
21. The respondent State has relied upon the Judgment of Apex Court in M/s. N.G. Projects Limited (supra) to contend that if when the Court finds that there is total arbitrariness or that the tender has been granted in the malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful WA 328/2021 & 329/2021 Page - 47 of 50 exclusion rather than to injunct the execution of the contract. We are in respectful agreement with ratio laid down by the Apex Court.
22. However, in the facts of the present case, in view of the interim order dated 30.11.2021 passed by a Division Bench of this Court, no work order has been issued to any short listed party in the fresh tender process initiated by the State pursuant to the directions contained in the impugned judgment and order dated 04.08.2021 present writ appeal and as such, there is no subsisting work. The works, which were continuing by the respondent No.9 also ceased because of the cancellation of the bid of the respondent No.9 by the learned Single Judge, which has not been challenged by the respondent No.9. Thus, there is no work going on which has been stayed by the Court. Under such circumstances having held the action of the State to be arbitrary in disqualifying the appellants, we deem it appropriate to hold that order disqualifying the appellant is illegal and accordingly, set aside and the State Government would be required to re-examine the matter.
23. The matter is accordingly, remanded to the Tender Evaluation Committee to reconsider the award of contract from amongst the respective successful tenderers including the appellant and thereupon take a fresh decision in the matter. The fresh evaluation which is to be conducted by the Tender Evaluation Committee in terms of the direction above, should be conducted as expeditiously as possible preferably within a period of 15(fifteen) days, so that WA 328/2021 & 329/2021 Page - 48 of 50 there is no undue delay in the execution of work.
24. In the meantime, fresh tender already called for by the employer in terms of the directions contained in the impugned judgment and order dated 04.08.2021 of the learned Single Judge shall not be acted upon, till a fresh decision is taken by the Tender Evaluation Committee on the basis of the materials already available on record in respect of the qualified tenderers including the appellants as directed by us as above.
25. If after fresh evaluation, the employer/State is unable to award the contract for reasons which are germane and relevant and not arbitrary or discriminatory, which are to be recorded in the file, then the State will be at liberty to proceed with and finalise the fresh tender process which the State had already initiated pursuant to the directions of the learned Single Judge in the impugned Judgment and Order dated 04.08.2021. We, thus, make it clear that if the State does not award the contract to any bidder in terms of the earlier NIT, the reasons must be recorded in the file.
26. Needless to say, the findings of the learned Single Judge in respect of respondent No.9 M/S ND & Co quashing this award of work to him, is not interfered with as the same is not under the challenge before this Court.
27. The writ appeals are allowed by interfering with the judgment and order dated 04.08.2021 passed by the learned Single Judge in WP(C) No.94/2020 and WA 328/2021 & 329/2021 Page - 49 of 50 WP(C) No.72/2020, to the extent indicated above. Records produced before this Court are returned to the learned Government Advocate, Nagaland.
Sd/- Soumitra Saikia Sd/- N. Kotiswar Singh
JUDGE JUDGE
Comparing Assistant
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