Kerala High Court
Simplex Infrastructures Ltd vs State Of Kerala Represented By on 2 October, 2015
Author: Alexander Thomas
Bench: Alexander Thomas
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS
FRIDAY, THE 2ND DAY OF DECEMBER 2016/11TH AGRAHAYANA, 1938
WP(C).No. 13058 of 2016 (F)
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PETITIONER(S) :
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SIMPLEX INFRASTRUCTURES LTD.,
REP. BY ITS SENIOR VICE PRESIDENT,
MR.J.S.RAGHAVAN, NEW NO.48 (OLD NO.21),
CASA MAJOR ROAD, EGMORE,
CHENNAI - 600 008.
BY ADVS. SRI.JACOB P.ALEX
SRI.JOSEPH P.ALEX
RESPONDENT(S) :
----------------------------
1. STATE OF KERALA REPRESENTED BY
THE PRINCIPAL SECRETARY GOVERNMENT,
INDUSTRIES & I T DEPARTMENT,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM - 695 001.
2. KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD
REP. BY ITS MANAGING DIRECTOR,
KESTON ROAD, KOWDIAR,
THIRUVANANTHAPURAM - 695 003.
3. EXECUTIVE DIRECTOR,
KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD,
KESTON ROAD, KOWDIAR,
THIRUVANANTHAPURAM - 695 003.
4. ASSISTANT GENERAL MANAGER (PROJECTS),
KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD,
KESTON ROAD, KOWDIAR,
THIRUVANANTHAPURAM - 695 003.
R1 BY SR. GOVERNMENT PLEADER SRI. SAIGI JACOB PALATTY
R2 TO R4 BY ADVS. SRI.SAJI VARGHESE
SMT.MARIAM MATHAI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 25-10-2016, THE COURT ON 02-12-2016 DELIVERED THE FOLLOWING:
Msd.
WP(C).No. 13058 of 2016 (F)
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APPENDIX
PETITIONER(S)' EXHIBITS :
P1 TRUE COPY OF TENDER DOCUMENT PUBLISHED BY
THE RESPONDENT DATED 02.10.2015.
P2 TRUE COPY OF E-TENDER FLOATED BY THE RESPONDENT
DATED 06.10.2015.
P3 TRUE COPY OF LETTER DATED 12.10.2015 FROM
THE 4TH RESPONDENT INFORMING THE PRE-BID MEETING
ON 16.10.2015.
P4 TRUE COPY OF E-MAIL DATED 14.10.2015 FROM THE PETITIONER
TO THE 4TH RESPONDENT ATTACHING THE PRE-BID QUERIES.
P5 TRUE COPY OF MINUTES OF THE PRE-BID MEETING
DATED 16.10.2015.
P6 TRUE COPY OF INTIMATION FROM THE 4TH RESPONDENT
REGARDING SUBMISSION OF THE TENDER DATED 21.11.2015.
P7 TRUE COPY OF CORRIGENDUM TO THE TENDER ISSUED BY
THE 4TH RESPONDENT DATED 09.11.2015.
P8 TRUE COPY OF LETTER DATED 20.11.2015 FROM THE PETITIONER
TO THE 3RD RESPONDENT SUBMITTING THE TENDER
DOCUMENTS ETC.
P9 TRUE COPY OF LETTER DATED 20.11.2015 FROM
THE PETITIONER TO THE 3RD RESPONDENT ENCLOSING
THE ORIGINAL COPY OF THE REMITTANCE LETTER OF PAYMENT.
P10 TRUE COPY OF E-MAIL DATED 20.11.2015, CONFIRMATION FROM
THE 3RD RESPONDENT TO THE PETITIONER ON BID SUBMISSION.
P11 TRUE COPY OF THE LETTER DATED 21.11.2015 FROM
THE PETITIONER TO THE 3RD RESPONDENT ENCLOSING HARD
COPY OF THE BID.
P12 TRUE COPY OF TECHNICAL BID OPENING SUMMARY
DATED 26.11.2015.
P13 TRUE COPY OF E-MAIL DATED 02.12.2015 FROM
THE 3RD RESPONDENT INFORMING ABOUT ACCEPTING
THE TENDER & ENCLOSING THE TECHNICAL EVALUATION.
P14 TRUE COPY OF E-MAIL DATED 04.12.205 FROM
THE 3RD RESPONDENT INFORMING THAT THE BID HAS BEEN
ADMITTED.
WP(C).No. 13058 of 2016 (F)
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P15 TRUE COPY OF COMMUNICATION FROM THE RESPONDENT
INTIMATING THE PETITIONER AS THE SUCCESSFUL BIDDER
DATED 04.12.2015.
P16 TRUE COPY OF E-MAIL DATED 29.12.2015 FROM THE PETITIONER
TO THE 2ND RESPONDENT.
P17 TRUE COPY OF LETTER DATED 02.03.2016 FROM THE PETITIONER
TO THE 3RD RESPONDENT AGREEING TO EXTEND THE VALIDITY
OF TENDER.
P18 TRUE COPY OF E-MAL DATED 02.03.2016 FROM
THE 3RD RESPONDENT INTIMATING THE CANCELLATION OF
THE TENDER.
P19 TRUE COPY OF LETTER DATED 03.03.2016 FROM THE PETITIONER
TO THE 2ND & 3RD RESPONDENT OBJECTING
THE CANCELLATION OF THE TENDER.
P20 TRUE COPY OF LETTER DATED 04.03.2016 FROM
THE 2ND RESPONDENT TO THE PETITIONER INVITING TO
PARTICIPATE IN THE REVISED TENDER.
P21 TRUE COPY OF REVISED E-TENDER DATED 03.03.2016.
P22 TRUE COPY OF COMPARATIVE STATEMENT OF THE ORIGINAL
TENDER AND THE REVISED TENDER DATED 28.03.2016.
P23 TRUE COPY OF E-MAIL DATED 14.03.2016 FROM THE PETITIONER
ATTACHING THE PRE-BID QUERIES.
P24 TRUE COPY OF E-MAIL DATED 15.03.2016 FROM THE PETITIONER
ATTACHING THE ADDITIONAL PRE-BID QUERIES.
P25 TRUE COPY MINUTES OF THE PRE-BID MEETING
DATED 15.03.2016.
P26 TRUE COPY OF CORRIGENDUM DATED 17.03.2016 PUBLISHED BY
THE RESPONDENT REGARD TO BID SUBMISSION.
P27 TRUE COPY OF THE PILING QUANTITY COMPARISON STATEMENT.
P28 TRUE COPY OF THE COMMUNICATION DATED 23.05.2016
RECEIVED BY PETITIONER FROM RESPONDENTS.
P29 TRUE COPY OF THE TENDER SUMMARY REPORT
DATED 23.05.2016.
WP(C).No. 13058 of 2016 (F)
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RESPONDENT(S)' EXHIBITS :
EXHIBIT R4(A): TRUE COPY OF THE MINUTES OF THE PROJECT
IMPLEMENTATION COMMITTEE.
EXHIBIT R4(B): TRUE COPY OF THE REPORT OF KITCO.\
EXHIBIT R4(C): TRUE COPY OF THE NOTICE INVITING TENDER PUBLISHED
IN MALAYALA MANORAMA DAILY DATED 03.03.2016.
EXHIBIT R4(D): TRUE COPY OF THE NOTICE INVITING TENDER PUBLISHED
IN MATHRUBHUMI DAILY DATED 03.03.2016.
EXHIBIT R4(E): TRUE COPY OF THE NOTICE INVITING TENDER PUBLISHED
IN ECONOMIC TIMES DAILY DATED 03.03.2016.
EXHIBIT R4(F): TRUE COPY OF THE NOTICE INVITING TENDER PUBLISHED
IN HINDU DATED 03.03.2016.
EXHIBIT R4(G): TRUE COPY OF THE NOTICE INVITING TENDER PUBLISHED
IN MALAYALA MANORAMA DAILY DATED 02.10.2015.
EXHIBIT R4(H): TRUE COPY OF THE NOTICE INVITING TENDER PUBLISHED
IN ECONOMIC TIMES DAILY DATED 02.10.2015.
EXHIBIT R4(I): TRUE COPY OF THE GUIDELINES ISSUED BY
THE GOVERNMENT OF KERALA
NO. G.O(P) NO. 324/2015/FIN DATED 30.07.2015.
EXHIBIT R4(J): TRUE COPY OF THE REQUEST MADE BY THE PETITIONER
ALONG WITH THEIR PRE-BID QUIRES SENT BY E-MAIL.
EXHIBIT R4(K): TRUE COPY OF THE CORRIGENDUM DETAILS UPLOADED
BY THE RESPONDENT.
EXHIBIT R4(L): TRUE COPY OF THE E-MAILS DATED 14.06.2015.
EXHIBIT R4(M): TRUE COPY OF THE LETTER DATED 17.06.2015 SENT TO
DR. DEVDAS MENON, IIT MADRAS.
EXHIBIT R4(N): TRUE COPY OF THE E-MAIL DATED 28.09.2015 SENT BY
IIT MADRAS WITH STRUCTURAL DESIGNS AND
PARTICULARS.
EXHIBIT R4(O): TRUE COPY OF THE COMMENTS OF STRUCTURAL
DRAWINGS AND DIMENSIONS OF THE TECHNICAL BLOCK.
EXHIBIT R4(P): TRUE COPY OF THE E-MAIL DATED 26.11.2015 SENT TO
KITCO.
EXHIBIT R4(Q): TRUE COPY OF THE LETTER DATED 31.12.2015 SENT BY
KITCO ENCLOSING THE POINTS NOTED IN THE ESTIMATE.
WP(C).No. 13058 of 2016 (F)
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EXHIBIT R4(R): TRUE COPY OF THE LETTER DATED 17.02.2016 SENT BY
KITCO.
//TRUE COPY//
P.S.TOJUDGE.
Msd.
ALEXANDER THOMAS, J.
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W.P.(C).No. 13058 of 2016
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Dated this the 2nd day of December, 2016
J U D G M E N T
The petitioner is a company incorporated in the year 1924 under the provisions of the Companies Act, 1913, and has its registered office at Calcutta and a branch office at Chennai. The petitioner is an engineering company, said to be engaged in the execution of piling, civil and structural works and has claimed to have executed numerous projects in India and abroad. The grievance of the petitioner is with regard to the impugned action taken by the 1st respondent in cancelling the petitioner's bid on administrative reasons as per the impugned Ext.P-18 proceedings, after having admitted its bid, as the lowest tender (L1), in the matter of award of the construction contract, as per Ext.P-15. The petitioner would also raise a consequential grievance against the impugned Ext.P-21 revised tender notification.
2. The brief facts of the case are that the 1st respondent Kerala State Industrial Development Corporation (KSIDC), which is a W.P.(C).13058/16 -: 2 :- Government company owned fully by the 1st respondent Government of Kerala, had earlier published Ext.P-1 e-tender notification on 2.10.2015 inviting tenders from interested persons for the "construction of Innovation cum Incubation Tower and allied works for the Life Science Park, Thonnakkal, Thiruvananthapuram" The estimated value of the contract is mentioned as Rs.129,67,13,495 (Rupees one hundred and twenty nine crores, sixty seven lakhs, thirteen thousand four hundred and ninety five only). The last date of the submission of the said tender was extended twice. The petitioner, as discernible from Ext.P-8, had submitted the e-tender on 20.11.2015. That out of the total 7 bidders, the petitioner and 5 other (thus totalling to 6) were declared as pre-qualified on the opening of the technical bids. Thereafter, the financial bids were opened on 4.12.2015 and the petitioner's bid, which was 6.5% below the estimated value, was found to be the lowest bid and as per Exts.P-14 dated 4.12.2015 and P-15 dated 4.12.2015, the petitioner's bid was admitted as the lowest tender (L1) among the 6 pre-qualified bids. Since nothing was heard for quite some time from the issuance of Ext.P-15 dated 4.12.2015, the petitioner had submitted Ext.P-16 dated 26.12.2015, requesting for a meeting on 4th or 5th of January, 2016. Much thereafter, the 2nd respondent had issued the impugned W.P.(C).13058/16 -: 3 :- Ext.P-18 proceedings dated 2.3.2016 informing the petitioner that the tender has been cancelled due to administrative reasons, etc. The petitioner thereafter had immediately submitted Ext.P-19 representation dated 3.3.2016 to the 1st respondent Corporation, inter alia, pointing out therein that the bidders were required only to quote above or below the price indicated in the tender and as informed earlier by the 2nd respondent, even if there is any difference or error, in arriving estimated quantities in the tender, there may not be any requirement for revision of the estimated value, since the payments were to be made only for the executed quantity of work and that the petitioner is willing to execute the work at the rate quoted by them even for the reduced estimated value and that they object the cancellation of the tender without assigning any tangible reason and to reconsider the decision taken in Ext.P-18 to cancel the tender and to issue work order to the petitioner, etc. That pursuant to the issuance of the impugned Ext.P-18 proceedings dated 2.3.2013, the 2nd respondent had issued the impugned Ext.P-21 revised tender notification dated 3.3.2016. The petitioner would contend that the revised tender as per Ext.P-21 is practically similar to the earlier tender as per Ext.P-1 dated 2.10.2015, except for the modification in the quantities/value W.P.(C).13058/16 -: 4 :- and addition and deletion of certain items and that this is all the more evident from Ext.P-22 comparative statement of original tender and the revised tender. That a provision has already been made in Ext.P-1 tender notification as per clause 35 thereof for variation and deviation. That price of all additional items/non- tendered items will be worked out on the basis of the rates quoted for similar items in the contract whenever existing or on engineering rate analysis based on the prevalent fair price of labour, materials and other components as required and further crucially that "the tender rates shall hold good for any increase or decrease in the tendered quantities upto a variation of 25%" and that the rate for the respective items may be reviewed on mutually agreed terms, etc. That this aspect was clearly and cogently reiterated by the 1st respondent while responding to the petitioner's pre-bid queries as per Ext.P-4, to which Ext.P-5 reply was given by the 1st respondent, more particularly item Nos.34 and 35 thereof, that "All the quantities in the BOQ are tentative which may vary plus or minus for which the payment is made on actual measurements" and that "the rates are based on DSR (Delhi Schedule of Rates) 2014 with cost index 46.67% for Trivandrum" and further in item 42 of Ext.P-5 it was again reiterated by the 1st respondent that the whole scope of the work is envisaged to the successful tenderer and the successful contractor is bound to execute up to a W.P.(C).13058/16 -: 5 :- variation of 25% and the tender rates shall hold good for any increase or decrease in the tendered quantities upto variation of 25% and the rate for the respective items will be DSR rates with the quoted tender below or above, and if any market rate items come up for execution there will not be any tender excess, etc. It is contended by the petitioner that there is no valid justification for cancellation of Ext.P-1 tender and invitation of Ext.P-21 fresh tender in its place for the very same work, except on minor cosmetic changes, on the same terms and conditions and that there was no legal justification for the 2nd respondent for re-tender the work, when the subsequent changes they wanted could have been provided in the scope of the work of the successful bidder, in terms of the aforequoted provisions contained in Ext.P-1 and as assured in Ext.P-5 reply to pre-bid queries. The petitioner would also contend that the impugned cancellation of the tender is vitiated by arbitrariness and unreasonableness and by taking into account irrelevant and extraneous consideration and by not reckoning into account vital and crucial relevant aspects. In the light of these aspects, the petitioner has the filed the instant Writ Petition (Civil) with the following prayers:
'i. Issue a writ in the nature of certiorari or any other writ, order W.P.(C).13058/16 -: 6 :- or direction calling for the records leading to the issuance of Exhibit P18 (E-mail dated 02.03.2016 from the 3rd Respondent intimating the cancellation of the 1st E tender) and Exhibit P21 (Revised E-tender dated 03.03.2016) and quash the same.
ii. Issue a writ in the nature of mandamus or any other writ, order or direction mandating the respondents to issue necessary work order to the petitioner in furtherance of Exhibit P15 (communication dated 04.12.2015 whereby petitioner was intimated that it is the successful bidder) forthwith;
iii. Issue a writ in the nature of mandamus or any other writ, order or direction commanding the respondents to issue all necessary documents/orders/permission etc. so as to enable the petitioner to proceed with the work i.e., 'Construction of Innovation Cum Incubation Tower and allied works for the Life Sciences Park, Thonnakkal, Thiruvananthapuram' forthwith."
3. The 1st respondent KSIDC has resisted the pleas of the petitioner by filing a counter affidavit dated 20.5.2016. Therein it is contended that by merely submitting tenders, only offers are made by the bidders and until and unless tender bid/offer is accepted by the competent authority by issuing letter of acceptance/letter of intent, the bidders do not acquire any right at all in respect of the work and that the 2nd respondent has not accepted any tender and that the petitioner cannot seek to compel the 2nd respondent to enter into a contract for construction of the building and allied works with the petitioner. That the petition is not maintainable under Art.226 of the Constitution of India. Further it is stated that pursuant to Ext.P-1 e-tender, 7 bids were submitted, out of which 6 had pre-qualified after the technical evaluation of the bids and the W.P.(C).13058/16 -: 7 :- financial bids of the pre-qualified bidders were also opened and were published in the e-tender website. Further it is averred in para 6 thereof that bill of quantities (BOQ) mentioned in the tender form was based on the design and drawing of the architects and of the soil investigation survey conducted by a technical institution, viz., M/s.LBS Centre for Science & Technology and that according to M/s.LBS centre, pile foundation was to be fixed at 50 metres on hard rock and the quantities for rates for piling was estimated on the basis of pile length of 50 metres. The IIT Madras was also consulted regarding the piling and structural design of the building and according to them, the depth of the pile required for the building was to be only 35 metres and substantial difference in the depth of the piles between 50 and 35 metres and the estimate of the buildings was referred to M/s.KITCO, which is an institute with technical expertise in building construction. That M/s.KITCO after detailed examination of the whole aspects, advised that the required depth of the piles for the building to be 35 metres instead of 50 metres and thereafter meetings were convened with M/s.KITCO and the architects and it was decided to revise the estimate according to the advice of M/s.KITCO. That it was decided to rework the estimate based on the comments pointed out by M/s.KITCO and substantial W.P.(C).13058/16 -: 8 :- alternations were made in the design of the piles and reduction in the bill of quantities as well as in the rates and due to changes in quantities and rates, the cost estimate had to be reduced to Rs.1,21,49,20,821/-from the original estimate of Rs.1,29,67,13,495/- and out of the differential amount of Rs.8,17,92,674/-, the amount due to change of BOQ is Rs.7,05,24,170/- and the amount attributable to change in rates is Rs.1,12,68,504/-. It is further stated in para 7 thereof that the 2nd respondent being a Government company, any capital expenditure exceeding Rs.35 crores must be reserved for the decision of the Governor and, only according to the decision of the Governor, the expenditure for any works as in this case can be made and the said requirement is made as per the Articles of Association of the 2nd respondent company, which provide the said mandatory requirement. That, in accordance with the said mandatory norm, a Project Implementation Committee (PIC) has been constituted by the Government with the Principal Secretary (Industries) as Chairman, the Managing Director of the 2nd respondent Corporation and other officers and the proceedings relating to the tender of the above work and all records were placed before the PIC for approval and the PIC at its meeting held on 1.3.2016 had considered the W.P.(C).13058/16 -: 9 :- entire matter and found that the structural design of Innovation cum Incubation Centre, was submitted to IIT, Madras at the time when the tender proceedings were initiated. It was noted by the PIC that the cost estimate of the building excluding mechanical, electrical and plumbing as estimated by the architect would work out to Rs.129.67 crores and the work was tendered through e-tender portal on 2.10.2015 and the financial bids of the 6 pre-qualified bidders, were opened on 4.12.2015. That in the meanwhile IIT, Madras, had submitted vetted structural design containing substantial difference in the measurements and quantity estimate as against the BOQ published vide the tender documents. It was noted that the BOQ and cost estimate were reviewed by M/s.KITCO and it was found that the cost estimate was on the higher side as stated previously and required to be revised, whereby the cost estimate was reworked at Rs.121.49 crores in the place of the original estimate of Rs.129.67 crores and the total reduction in estimate is Rs.8.18 crores and based on the deliberations and considering all relevant aspects, the PIC observed that in the given situation the right step to be taken is to cancel Ext.P-1 tender and initiate tendering procedure afresh on reasons of procedural compliance and transparency and it was therefore decided to cancel the earlier W.P.(C).13058/16 -: 10 :- tender and re-tender the work with a probable amount of contract (PAC) for Rs.121.49 crores by providing ample publicity through national level dailies and local vernacular dailies, etc. The true copy of the minutes of the proceedings of the PIC held on 1.3.2016 has been produced as Ext.R-4(a) along with the said counter affidavit. It is thus pointed out that the impugned Ext.P-18 proceedings dated 2.3.2016 were issued on the basis of the decision taken by the PIC as reflected in Ext.R-4(a) and that consequently, the impugned Ext.P-21 re-tender notification dated 4.3.2016 was issued. It is further stated in para 13 thereof that since there was large reductions in quantities in several items and increase in quantities of other items and changes in rates of several items of work, fresh tender was to be made, whereby equal opportunity will be offered to all the eligible bidders including the petitioner, subject to their eligibility conditions and that it is improper and unfair to award the work to the petitioner without inviting fresh tenders, etc. Further it is contended in para 17 that the petitioner, after having downloaded the revised tender and made pre-bid queries by Exts.P-23 and P-24, is estopped from challenging the impugned Ext.P-21 re-tender proceedings. Further that the stand of the petitioner to direct the 2nd respondent to consider the offer of the petitioner to W.P.(C).13058/16 -: 11 :- execute the work with proposed variations and reduced value at the same bid percentage offered by them and to issue the necessary work order in their favour will be most unfair and impermissible, etc. Various other submissions and contentions are raised in the counter affidavit in respect of the various other averments and contentions raised in the Writ Petition.
4. The petitioner has filed a reply affidavit dated 20.6.2016, to meet the case put forward in the abovesaid counter affidavit dated 20.5.2016. As against the specific case put forth by the 2nd respondent in paras 6 & 7 of their counter affidavit regarding the revision of depth of piles from the original 50 metres to 35 metres and other related aspects, the petitioner has given specific averments and contentions in paras 9 to 11 of their reply affidavit dated 20.6.2016. Therein it is specifically contended by the petitioner that the BOQ originally provided to the bidders along with the tender documents contained various discrepancies with regard to the piling work, which were brought to the notice of the 2nd respondent by the petitioner in Ext.P-4 pre-bid queries submitted by the petitioner to the respondents in 14.10.2015, more particularly to query Nos.5, 9, 11 and 16, for which the 2nd respondent had given Ext.P-5 reply, more particularly in items 34 to W.P.(C).13058/16 -: 12 :- 38 thereof, which has been quoted earlier herein above and also stating therein that the drawings uploaded are tentative drawings for the purpose of quoting rates and that goods for construction drawings will be supplied at the site during the course of the construction and all the works and the measurements for billing will be based on the good for construction drawings, etc. and that all the quantities in the BOQ are tentative, which may vary plus or minus, for which the payment is made on actual measurements and that the rate quoted is for the whole work, etc. Further it is specifically contended therein that the justification now made by the 2nd respondent to recall the earlier tender and issue revised tender on the pretext that substantial alterations are made in the design in the piles, is totally wrong and, to demonstrate this, the petitioner has submitted Ext.P-27 comparison chart and has pointed out that the piling quantity comparison arrived at on the basis of the number and length of piles indicated in the drawing would clearly establish that the number of piles, length of piles and piling quantity as per the drawing remain the same in the original tender as well as in the revised tender and that it is only the piling quantity as per the BOQ, which has been corrected in the revised tender so as to match the piling quantity arrived at as per the number and length of piles. W.P.(C).13058/16 -: 13 :- That despite the discrepancies in the BOQ pointed out by none other than the petitioner in the pre-bid queries, the 2nd respondent has clearly taken the stand the said BOQ quantities were tentative and that payment shall be made on actual measurements based good for construction drawing and that the rate quoted (percentage rate) is for the whole work.
5. In tune with the contention based on the aforementioned clause 35 of Ext.P-1 tender notice regarding the permissibility of variations upto 25%, it has been further contended in para 12 of the reply affidavit that as the original tender makes it obligatory on the part of successful bidder to execute the work for any increase or decrease in the tendered quantities up to variation of 25% and also contemplated a mechanism of review of rates on mutually agreed terms for variation in the tendered quantities beyond 25% , it was wrong on the part of the 2nd respondent in cancelling the tender bid and go in for a fresh tender, which has the effect of burdening the Corporation with additional expenditure as well as delaying the completion, etc. As regards the decision in Ext.R-4(a), it is pointed out in para 14 of the reply affidavit that the said stand is arbitrary to the earlier consistent stand taken by the 2nd respondent in going ahead with the issue of original tender in spite of the reference W.P.(C).13058/16 -: 14 :- regarding structural design, BOQ and cost remittance for the vetting of the IIT Madras, etc. It is also pointed out in paras 14 and 15 of the reply affidavit that the comparative statement as per Ext.P-27 clearly shows that there was neither any change in the number and length of the piles as per the drawing nor there was any change in the piling quantity as per the drawing between the original tender and the revised tender and the only discrepancy was in the piling quantity as per the BOQ of the original tender, which was already pointed out by the petitioner in the pre-bid queries, to which the aforementioned clear response and clarifications were given by the 2nd respondent as per Ext.P-5. It is also contended in para 20 thereof that the difference in the cost estimate as between the original estimate and the revised estimate is reduction to the tune of Rs.8.18 crores, which is hardly -6.31% of the original estimated contract value and that when the original tender as per as Clause 35 itself mandates that a +/- 25% variation in the tendered quantities along with mechanism of review of the rates, etc. it was improper and unreasonable to have cancelled the original bid, etc.
6. Respondents 2 to 4 had filed an additional counter affidavit dated 11.7.2016 producing therewith the copy of M/s.KITCO's letter dated 31.12.2015, addressed to the 2nd W.P.(C).13058/16 -: 15 :- respondent, as Ext.R-4(b), in order to contend that there has been substantial changes in the quantities due to change in pile design, addition and deletion of several items and change in rates, etc. Thereafter, the 2nd respondent has filed an additional affidavit dated 27.7.2016 producing therewith Exts.R-4(c) to R-4(j), which are mainly the copies of the revised tender notice and the original tender notice as advertised in the various newspapers. The petitioner thereafter, filed an additional reply affidavit dated 20.9.2016, pointing out certain aspects regarding the various extensions granted to the revised tender bid and also producing therewith a copy of the the revised tender summary report dated 23.5.2016 as Ext.P-29. The 2nd respondent has thereafter filed a supplementary counter affidavit dated 4.10.2016 giving certain details regarding the submissions made by the petitioner in respect of the revised tender bid and also producing therewith a copy of the corrigendum dated 25.4.2016 in respect of the revised tender as Ext.R-4(k). The 2nd respondent has also filed an additional affidavit dated 19.10.2016 producing therewith Exts.R-4(l) to R-4(r), which are copies of the communications between the 2nd respondent with the IIT Madras, M/s.KITCO, etc. The petitioner has also filed supplementary affidavit dated 24.10.2016.
W.P.(C).13058/16 -: 16 :-
7. Heard Smt.Malini Ganesh, learned Senior Counsel instructed by Sri.Jacob P.Alex, learned counsel appearing for the writ petitioner, Sri.M.Pathros Matthai, learned Senior Counsel instructed by Sri.Saji Varghese, learned Standing Counsel for the KSIDC, appearing for respondents 2 to 4, and Sri.Saigi Jacob Palatty, learned Senior Govt. Pleader appearing for the 1st respondent State.
8. The respective parties have made various submissions and contentions in tune with their respective pleadings and materials on record produced by them in this matter.
9. At the outset, it will be pertinent to make a brief overview of the various decisions of the Apex Court regarding the permissible parameters for judicial review in contractual matters. In the celebrated Constitution Bench (5-Judges) judgment in the case K.N.Guruswamy v. State of Mysore reported in AIR 1954 SC 592, the Apex Court had dealt with a case of liquor contract, which was knocked down in an auction by the Department in favour of a person who was highest bidder and another person who was present at the auction, but had not participated in the bid, had approached the Departmental authority and had offered Rs. 5000/- in excess of the highest bidder's bid and the latter person's offer was accepted and the former's bid was cancelled. The Constitution W.P.(C).13058/16 -: 17 :- Bench had inter alia held in para 19 of the said ruling that the action of the Excise authority in giving contract to the latter person was wrong as it ran counter to the policy of the legislature, which is that matters of such consequence to the State revenue cannot be dealt with arbitrarily and in the secrecy of an office. However, in view of the peculiar facts in that case, it was held therein that in ordinary course the petitioner therein would have been granted the relief sought for, but due to the expiry of the contract year, it was found that issuing a writ is a futile exercise. Following the said Constitution Bench judgment in K.N.Guruswamy's case reported in AIR 1954 SC 592, the Apex Court in the case D.F.O. v. Ram Sanehi Singh reported in (1971) 3 SCC 864, had held in para 4 thereof that it is difficult to hold that merely because the source of the right which a litigant claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority, must resort to a suit and not to a writ petition. On that basis, it was held by the Apex Court in para 4 as follows:
"4...... By that order he has deprived the respondent of a valuable right. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N. Guruswamy case [AIR 1954 SC 592] there can be no doubt that the petition was maintainable, even if the right to W.P.(C).13058/16 -: 18 :- relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power."
10. In Kumari Shrilekha Vidyarthi & Ors. v. State of U.P. & ors. reported in (1991) 1 SCC 212 the Apex Court has clearly held in paras 20 to 29 etc. that as the applicability of Art.14 to all executive actions of the State is well settled and so its applicability at the threshold to the making of a contract in exercise of the executive power is beyond dispute and also held that the State even can thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Art.14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract, etc. It was also held therein that the State cannot be attributed the split personality of Dr.Jekyll & Mr.Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfill the obligation of Art.14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the contract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It was categorically held W.P.(C).13058/16 -: 19 :- in para 24 thereof that the requirement of Art.14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. It would be relevant to refer to paras 20, 22, 23, 24, 27, 28 and 29 of the said judgment, which read as follows:
"20. Even apart from the premise that the `office' or `post' of DGCs has a public element which alone is sufficient to attract the power of judicial review for testing validity of the impugned circular on the anvil of Article 14, we are also clearly of the view that this power is available even without that element on the premise that after the initial appointment, the matter is purely contractual. Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, can it be said that the State can thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more? We have no hesitation in saying that the personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts, which cannot co-exist.
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22. There is an obvious difference in the contracts between private parties and contracts to which the State is a party. Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for W.P.(C).13058/16 -: 20 :- adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions.
23. Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved persons.
24. The State cannot be attributed the split personality of Dr Jekyll and Mr Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the contract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in pubic interest and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regulating the conduct of the State activity.
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27. Unlike a private party whose acts uninformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest. Every holder of a W.P.(C).13058/16 -: 21 :- public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. This is equally true of all actions even in the field of contract. Thus, every holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good. With the diversification of State activity in a Welfare State requiring the State to discharge its wide ranging functions even through its several instrumentalities, which requires entering into contracts also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions required to be non-arbitrary and justified on the touchstone of Article 14.
28. Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters. We, therefore, find it difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14.
29. It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. (See Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489] and Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir [(1980) 4 SCC 1]. In Col. A.S. Sangwan v. Union of India [1980 Supp.SCC 559] while the discretion to change the policy in exercise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone, irrespective of the field of activity of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose."
11. In Kisan Sahkari Chini Mills Ltd. & Ors. v. Vardan Linkers & Ors. reported in (2008) 12 SCC 500, the Apex Court has W.P.(C).13058/16 -: 22 :- dealt with the difference in perspective of public law remedy of judicial review in contractual matters, in contra distinction to the private law remedies in relation to contractual matters. In the facts of that case, in the State of Uttaranchal, there were 6 State controlled sugar mills, which produce molasses and the sale of molasses was regulated by Molasses Sale Committee constituted by the State Government. On the basis of the tender received, the committee permitted the respondent therein to lift 85000 quintals of molasses from the mills at a particular price and the Government received a report that the price was much higher and so the Secretary, Cane Department & Sugar Industries, had stayed the said order of the committee. In the Writ Petition, the High Court had taken the view that there was a concluded contract and having regard to doctrines of part performance, legitimate expectation, estoppel and acquiescence, the impugned cancellation of the allotment was held to be unsustainable and illegal.
12. The Apex Court has held in paras 23 and 24 thereof that when a Writ Petition was filed with regard to the said contractual issues, the issue to be considered was as to whether the Government had acted arbitrarily or unreasonably in staying the operation of the allotment letter or in subsequently cancelling the W.P.(C).13058/16 -: 23 :- allotment, whereas in the private law remedy of civil suit, the whole emphasis is on contractual right. But in public law remedy of judicial review focus shifts with the exercise of power by the State authority, that whether the impugned cancellation order passed by the Government was arbitrary or unreasonable and in such context of public law remedy, the issue whether there was a concluded contract and breach thereof, becomes secondary, etc. But while dealing with that situation the Apex Court had held in (2008) 12 SCC 500, p.p.512-513, paras 23 & 24 as follows:
"23. If the dispute was considered as purely one relating to existence of an agreement, that is, whether there was a concluded contract and whether the cancellation and consequential non-supply amounted to breach of such contract, the first respondent ought to have approached the civil court for damages. On the other hand, when a writ petition was filed in regard to the said contractual dispute, the issue was whether the Secretary (Sugar), had acted arbitrarily or unreasonably in staying the operation of the allotment letter dated 26-3-2004 or subsequently cancelling the allotment letter. In a civil suit, the emphasis is on the contractual right. In a writ petition, the focus shifts to the exercise of power by the authority, that is, whether the order of cancellation dated 24-4-2004 passed by the Secretary (Sugar), was arbitrary or unreasonable. The issue whether there was a concluded contract and breach thereof becomes secondary. In exercising writ jurisdiction, if the High Court found that the exercise of power in passing an order of cancellation was not arbitrary and unreasonable, it should normally desist from giving any finding on disputed or complicated questions of fact as to whether there was a contract, and relegate the petitioner to the remedy of a civil suit. Even in cases where the High Court finds that there is a valid contract, if the impugned administrative action by which the contract is cancelled, is not unreasonable or arbitrary, it should still refuse to interfere with the same, leaving the aggrieved party to work out his remedies in a civil court. In other words, when there is a contractual dispute with a public law element, and a party chooses the public law remedy by way of a writ petition instead of a private law remedy of a suit, he will not get a full-fledged adjudication of his contractual rights, but only a judicial review of the administrative W.P.(C).13058/16 -: 24 :- action. The question whether there was a contract and whether there was a breach may, however, be examined incidentally while considering the reasonableness of the administrative action. But where the question whether there was a contract, is seriously disputed, the High Court cannot assume that there was a valid contract and on that basis, examine the validity of the administrative action.
24. In this case, the question that arose for consideration in the writ petition was whether the order dated 24-4-2004 passed by the Secretary (Sugar), cancelling the allotment letter dated 26-3- 2004 was arbitrary and irrational or violative of any administrative law principles. The question whether there was a concluded contract or not, was only incidental to the question as to whether cancellation order dated 24-4-2004 by the Secretary (Sugar), was justified. As the case involved several disputed questions in regard to the existence of the contract itself, the High Court ought to have referred the first respondent to a civil court. But the High Court in exercise of its writ jurisdiction, proceeded as if it was dealing with a pure and simple civil suit relating to breach of contract."
(emphasis supplied)
13. In Michigan Rubber (India) Ltd. v. Sate of Karnataka & Ors. reported in (2012) 8 SCC 216, while considering the issue as to whether the State and their undertakings have discretion to set tender conditions and whether the court may interfere on the grounds that some other terms could have been fairer, wiser or more logical, etc. the Apex Court took the view that the Government and their undertakings must have a free hand in setting terms of the tender and only if they are arbitrary, discriminatory, mala fide or actuated by bias, the court could interfere.
14. In Tejas Constructions & Infrastructure (P) Ltd. v. Municipal Council, Sendhwa & Anr. reported in (2012) 6 SCC 464 W.P.(C).13058/16 -: 25 :- the Apex Court held in para 17 thereof that in Raunaq International Ltd. v. I.V.R. Construction Ltd. reported in (1999) 1 SCC 492), that writ court would not be justified in interfering with commercial transaction in which the State is one of the parties to the same except where there is substantial public interest involved and in cases where the transaction is mala fide, etc.
15. In Meerut Development Authority v. Association of Management Studies & Anr. reported in (2009) 6 SCC 171, the Apex Court clearly held in para 27 thereof that bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by the interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. It will be pertinent to refer to paras 26 to 29 of the Meerut Development Authority's case supra, reported in (2009) 6 SCC 171, pp.181-182, paras 26 to 29, which read as follows:
"26. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.W.P.(C).13058/16 -: 26 :-
27. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the abovestated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.
28. It is so well settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process.
29. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favouritism."
16. In the well known and celebrated case in Tata Cellular v. Union of India reported in (1994) 6 SCC 651, the Apex Court has clearly delineated various fine tuned principles regarding the scope and ambit of public law remedy in judicial review in relation to the contractual aspects and it may be pertinent to refer paragraphs 70, 74, 77, 81, 91, which read as follows:
'70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting W.P.(C).13058/16 -: 27 :- or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
xxx xxx xxx
74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself.
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77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock [(1991) 1 AC 694] refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, W.P.(C).13058/16 -: 28 :- "consider whether something has gone wrong of a nature and degree which requires its intervention".
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81. Two other facets of irrationality may be mentioned.
(1) It is open to the court to review the decision-maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v. Secretary of State for Environment [(1980) 41 P&CR 255], the Secretary of State referred to a number of factors which led him to the conclusion that a non-
resident's bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. The Divisional Court analysed the factors which led the Secretary of State to that conclusion and, having done so, set it aside. Donaldson, L.J. said that he could not see on what basis the Secretary of State had reached his conclusion.
(2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On this basis in R. v. Barnet London Borough Council, ex p Johnson [35 (1989) 88 LGR 73] the condition imposed by a local authority prohibiting participation by those affiliated with political parties at events to be held in the authority's parks was struck down.
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91. In Food Corpn. of India v. Kamdhenu Cattle Feed Industries [(1993) 1 SCC 71] it was observed thus : (SCC p. 76, para
7) "In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law : A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is `fairplay in action'."'
17. In para 77 of the Tata Cellular's case supra their Lordships of the Supreme Court, while dealing with the well known 3 grounds of illegality, irrationality and procedural impropriety, had W.P.(C).13058/16 -: 29 :- clearly held therein that those are only broad grounds and that it does not rule out addition of further grounds in the course of time and that as a matter of fact in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock reported in (1991) All.ER. 720 (HL) = (1991) 1 AC 696 = (1991) 2 WLR 588), Lord Diplock had specifically referred to one development namely, the possible recognition of the principle of proportionality and opinion in this regard of Lord Diplock was rendered in the celebrated case in the Council of Civil Service Unions (CCSU) v. Minister for Civil Service reported in 1985 AC 374 p.410 HL, and which was also referred in R. v. Secretary of State for the Home Department, ex Brind, reported in 1991 AC 696. p.p. 741-42. Further their Lordships of the Supreme Court clearly held in para 77 as follows:
"77....... In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
Further the Apex Court has also categorically held in 91 thereof based on various rulings as in FCI v. Kamadhenu Cattle Feed Industries, reported in (1993) 1 SCC 71, that the State and all its instrumentalities have to conform to Art.14 of the Constitution of which non-arbitrariness is a significant facet, even in contractual sphere as in all other State actions and there is no unfettered W.P.(C).13058/16 -: 30 :- discretion in public law and the public authority possesses powers only to use them for public good and that this imposes a duty to act fairly and to adopt a procedure which is 'fairplay in action'.
18. The Apex Court in the recent ruling in Rashmi Metaliks Ltd. & Anr. v. Kolkata Metropolitan Development Authority & Ors. reported in (2013) 10 SCC 95, in para 9 thereof, had reiterated the principles laid down in the aforequoted para 77 of Tata Cellular's case supra, and after making a brief survey of the various subsequent case laws on the point, had clearly held in paras 7 and 8 thereof that the Tata Cellular's case supra has been so ubiquitously followed over two decades, in almost every case concerning Government tenders and contracts that it has attained heights, which dissuade digression by even a larger Bench and it garners legal predictability, and that correct approach is to predicate arguments on the decision, which holds the field, which in the present case, is Tata Cellular's case supra, which was rendered by a 3-Judge Bench, etc. In ABL International Ltd. & Anr. v. ECGCI & Ors, reported in (2004) 3 SCC 553, the Apex Court held that in appropriate cases, the writ court has jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition, even if the same arises W.P.(C).13058/16 -: 31 :- out of a contractual obligation and/or involves some disputed questions of fact. Further the Apex Court in paras 8 to 10 of the ABL International Ltd's case supra had held that the question regarding the maintainability of Art.226 of the Constitution of India to enforce a contractual obligation of the State or its instrumentality, by an aggrieved party, is no more res integra and is well settled by a large number of pronouncements as in the aforesaid K.N.Guruswamy's case reported in AIR 1954 SC 592 and held that the Constitution Bench judgment in K.N.Guruswamy's case supra is the authority for the proposition that on a given set of facts, if a State authority acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the court by way of writ under Art.226 of the Constitution and the court depending on facts of the said case is empowered to grant the relief, etc. It will be pertinent to refer to paras 27 and 28 of ABL International Ltd. & Anr. v. ECGCI & Ors, reported in (2004) 3 SCC 553, p.572, which read as follows:
"27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.
(b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ W.P.(C).13058/16 -: 32 :- petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary claim is also maintainable.
28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks[(1998 8 SCC 1] And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction."
In Zonal Manager, Central Bank of India v. M/s. Devi Ispart Ltd. & Ors. reported in (2010) 11 SCC 186, the Apex Court had again placed reliance on the earlier Constitution Bench ruling in K.N.Guruswamy's case supra and the 2-Judge Bench ruling in D.F.O. South Kheri & Ors. v. Ram Sanehi Singh reported in (1971) 3 SCC 864 and had held as follows in paras 24 & 25 of Central Bank of India's case reported in (2010) 11 SCC 186, pp. 196-197:
'24. After adverting to certain factual details, the Court framed the following question: (ABL International Ltd. case [(2004) 3 SCC 553], SCC p. 564, para 8) "8. As could be seen from the arguments addressed in this appeal and as also from the divergent views of the two courts below, one of the questions that falls for our consideration is whether a writ petition under Article 226 of the Constitution of India is maintainable to enforce a contractual obligation of the State or its instrumentality, by an aggrieved party."
25. The following discussion and conclusion are apt and relevant for our purpose. They are: (ABL International Ltd. case W.P.(C).13058/16 -: 33 :- [(2004) 3 SCC 553] SCC pp. 564-69, paras 9-19) "9. In our opinion this question is no more res integra and is settled by a large number of judicial pronouncements of this Court. In K.N. Guruswamy v. State of Mysore [AIR 1954 SC 592] this Court held: (AIR pp. 595-96, para 20) `20. The next question is whether the appellant can complain of this by way of a writ. In our opinion, he could have done so in an ordinary case. The appellant is interested in these contracts and has a right under the laws of the State to receive the same treatment and be given the same chance as anybody else. ...
We would therefore in the ordinary course have given the appellant the writ he seeks.
But, owing to the time which this matter has taken to reach us (a consequence for which the appellant is in no way to blame, for he has done all he could to have an early hearing), there is barely a fortnight of the contract left to go. ... A writ would therefore be ineffective and as it is not our practice to issue meaningless writs we must dismiss this appeal and leave the appellant content with an enunciation of the law.'
10. It is clear from the above observation of this Court in the said case, though a writ was not issued on the facts of that case this Court has held that on a given set of facts if a State acts in any arbitrary manner even in a matter of contract, an aggrieved party can approach the court by way of writ under Article 226 of the Constitution and the court depending on facts of the said case is empowered to grant the relief. This Judgment in K.N.Guruswamy v. State of Mysore [AIR 1954 SC 592] was followed subsequently by this Court in the case of D.F.O. v. Ram Sanehi Singh [1971] 3 SCC 864] wherein this Court held (SCC p.865, para 4:
"4. By that order he has deprived the respondent of a valuable right. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N.Guruswamy case [AIR 1954 SC 592] there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.' W.P.(C).13058/16 -: 34 :- xxx xxx xxx"
In Zonal Manger, Central Bank of India's case supra, their Lordships of the Supreme Court had also made extensive reliance to paras 22 to 26 on the principles laid down in ABL's case supra.
19. It is also by now well settled that while judicially reviewing an administrative action that involves the process of tender or contract, the writ courts are not very much concerned about the merits of the case, but are predominantly focused on the process of decision making, which led to the outcome. Development of law in this regard from the celebrated decision of the Apex Court in R.D.Shetty v. International Airport Authority reported in AIR 1976 SC 1628 is steady and clear and it has been reiterated by the Apex Court in various judgments as in Tata Cellular v. Union of India reported in (1994) 6 SCC 651, para 94; Air India Ltd. v. Cochin International Airport Ltd. reported in (2000) 2 SCC 617, para 7 and B.S.N Joshi & Sons Ltd v. Nair Coal Services Ltd & Others reported in (2006) 11 SCC 548, para 66; [See also Reliance Energy Ltd & Anr v. MSRDC Ltd reported in (2007) 8 SCC 1 and Reliance Airport Developers Pvt. Ltd v. Airport Authority of India reported in (2006) 10 SCC 1], that if the decision making process is vitiated, then W.P.(C).13058/16 -: 35 :- courts could interfere in judicial review.
20. It is relevant to note the opinion of the learned author H.W.R. Wade: Administrative Law (10th Edn.) page 297 as follows:
"... The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good.
There is nothing paradoxical in the imposition of such legal limits. It would indeed be paradoxical if they were not imposed. Nor is it a special restriction which fetters only local authorities: it applies no less to ministers of the Crown. Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example where a judge has a discretion to order jury trial. It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute. Plainly this can have no application in public law.
For the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion. The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal. It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere."
21. One of the main contentions urged by the learned Senior Counsel appearing for the writ petitioner is that the 2nd respondent had issued Ext.P-1 original tender only after due verification of the requirements of the quantities and value of the project and as such, their sudden decision to cancel the tender as per Ext.P-18 and issue a fresh tender as per Ext.P-21 for the same work on the same terms and conditions with only cosmetic and minor changes in the quantities and value, would fall very well within the scope and ambit W.P.(C).13058/16 -: 36 :- of the permitted variation as envisaged in clause 35 of the Ext.P-1 and that therefore the impugned cancellation of the tender is per se unreasonable, unfair and unjust and is in violation of Clause 35, which deals with the permissible variation upto plus or minus 25% and that the impugned proceedings are unreasonable, improper and illegal. That inasmuch as there is no substantial variation between Ext.P-21 revised tender and Ext.P-1 original tender, the 2nd respondent has egregiously erred in cancelling the earlier tender, which are not for relevant and lawful consideration permitted by the terms and conditions of the tender in Ext.P-1 and therefore are only for extraneous and irrelevant considerations which are not germane for the matter and that hence the impugned cancellation of the tender bid and the consequent revised tender proceedings are vitiated and are liable to be quashed by this Court. So also, the petitioner would place heavy reliance on the clear and categoric stand taken by the 2nd respondent in Ext.P-5 reply to the pre-bid queries. The petitioner would also point out that they had raised many pre-bid queries as per Ext.P-4 submitted as early as on 14.10.2015, more particularly as per items 9, 16, etc. thereof, regarding the discrepancy in the length of the piles, as given in schedule of the piles in the notes below the drawing and that, to W.P.(C).13058/16 -: 37 :- this, the 2nd respondent had taken the considered and clear stand in Ext.P-5, more particularly in items 34 to 38, 42, etc. thereof, clearly and categorically pointing out therein that all quantities in the BOQs are tentative and this may vary plus or minus for which payments have to be made only on the basis of actual measurements and that the rate is for the whole work and further that the successful contractor is bound to execute upto a variation of 25% and the tender rates shall hold good for any increase or decrease upto 25% variation, etc. and that therefore the competent officials of the 2nd respondent themselves were convinced about the applicability of Clause 35 of Ext.P-1, which permitted variation upto plus or minus 25% and that the volte-face shown in the impugned Ext.P-18 which is issued long after admitting the petitioner's bid as lowest tender (L1) as per Exts.P-14 and Ext.P-15, is nothing but highly arbitrary, unreasonable, improper and legally wrong. Variation in value of the revised tender bid and the original bid, which comes to -Rs.8.18 crores, which is hardly -6.31% and that it is within the permissible limit of variation etc. Various contentions have been urged by both sides based on the pleadings and materials on record. In order to have a proper determination of the matter posed in this matter, it is necessary to make an appreciation of the various relevant factual W.P.(C).13058/16 -: 38 :- aspects in its sequence. As directed by this Court, the 2nd respondent has also made available the entire files relating to the original bid as well as the files relating to the revised tender bid.
22. That the file in relation to the original tender bid and its cancellation, will be referred hereinafter as "the main file" and the files in relation to the re-tender will be referred for convenience as "the re-tender file". It can be seen from the extract of the minutes of the 293rd meeting of the Board of Directors of the 2nd respondent KSIDC held on 2.3.2015 that decision was taken for the KSIDC to proceed with the preparation of the detailed structural design, BOQ etc. of the buildings through the architects based on the floor plan finalised so as to avoid delays (which can be seen from pages 18 and 19 of the main file). Thereafter, it appears that technical consultant/ architects had submitted the design and the details for the tender bid, as can be seen from pages 20 to 37 of the main file. By Ext.R-4(l) dated 13.6.2015, the 2nd respondent had requested the Indian Institute of Technology (IIT) Madras, to take up the vetting of the structural design for the proposed construction and to this, the technical expert at IIT, had responded on 14.6.2015 the readiness of the IIT to take up the work of proof checking of the structural design and had requested for the architectural drawings. This is also W.P.(C).13058/16 -: 39 :- referred to in Ext.R-4(l). Later by Ext.R-4(m) dated 17.6.2015 the 2nd respondent had forwarded the formal letter to the IIT authorities to take up the abovesaid work of proof checking and the architectural drawings are also enclosed therewith. By Ext.R-4(n) dated 28.9.2015, the IIT authorities had forwarded the capacity calculations to the 2nd respondent and their consultant. Ext.R-(n) dated 28.9.2015 piling capacity calculations submitted by the IIT, and received by the 2nd respondent KSIDC on 28.9.2015, are enclosed in pages 69 to 81 of the main file. Thereafter, on 29.9.2015, the competent authority of the 2nd respondent [viz. Technical Adviser (Civil)] had observed in his remarks dated 29.9.2015 that he has generally verified the detailed estimate of the abovesaid work prepared by the consultant, which is prepared on the basis of the tentative design which is to be finalised shortly by the IIT and further that the quantities provided for each item are likely to be increased or decreased when the structural design is finalised. That however the estimate prepared based on the tentative design can be considered for going ahead with the tender call, if approved, that according to him, the provisions/items are adequate for satisfactory completion of the building intended for special purpose. The said remarks of the Technical Adviser (Civil) W.P.(C).13058/16 -: 40 :- are enclosed in page 38 of the main file, which read as follows:
"Remarks by Technical Adviser (Civil) Sub:-CONSTRUCTION OF INNOVATION CUM INCUBATION TOWER AND ALLIED WORKS IN LIFE SCIENCES PARK, THONNAKKAL, THIRUVANANTHAPURAM.
I have generally verified the detailed estimate of the above work prepared by Mr.S.B.Asokan, Consultant. This estimate is prepared based on a tentative design which will be finalised shortly by the IIT Chennai. Hence I wish to point out that the quantities provided for each item of work are likely to be increased or decreased when the structural design is finalized. However the estimate prepared based on the tentative design which can be considered for going ahead with the tender call, if approved. According to me, the provisions/ items given are adequate for satisfactory completion of the building intended for a special purpose.
For favour of your kind perusal and further action as reported above.
Sd/-
Technical Adviser (Civil)"
Thereafter, the abstract estimate was given by the consultant/ architect on 1.10.2015, as can be seen from pages 69 to 68 of the main file. The consultant/architect had also submitted letter dated 1.10.2015 appending therewith the estimate for the above construction amounting to Rs.1.30 crores stating therein that the estimate prepared is based on the DSR (Delhi Schedule of Rate), 2014, by incorporating cost index of 46.67% for Trivandrum and the detailed estimate, observed data for market rate items and the abstract of the estimate are appended therewith and that soft copies for uploading e-tender have already been forwarded through mail and the same has been uploaded to the e-portal tender on W.P.(C).13058/16 -: 41 :- 1.10.2015 itself, etc. The said letter dated 1.10.2015 (at page 82 of the main file) submitted by the consultant/architect to the KSIDC on 1.10.2015 along with the detailed estimate BOQ, etc. reads as follows:
"Sub:- Regarding Construction of Innovation Cum Incubation Tower and Allied Works of KSIDC's proposed Life Science Park at Thonnakkal, Trivandrum - Submission of Estimate, BOQ and Tender document.
Ref:-1, Architectural agreement dated 03.12.2014.
Dear Sir, Iamounting am herewith submitting the estimate for the above building to Rs.130 Crores. In connection with this I may inform that the estimate is prepared based on DSR 2014 incorporating Cost Index of 46.67% for Trivandrum. The detailed estimate, observed data for the market rate items and the abstract of estimate are appended herewith. The softcopies for uploading E-Tender has already been forwarded through mail and the same has been uploaded to the E-tender portal on 01/10/2015 itself."
It is based on the above proceedings that Ext.P-1 e-tender was duly issued by the 2nd respondent on 2.10.2015 in the website, as can be seen from pages 83 to 85 of the main file. Thus it can be seen from a perusal of the letter of the Technical Adviser (Civil) of the 2nd respondent dated 29.9.2015, (page 38 of the main file) as well as the architectural floor plans and drawings submitted by the consultant given on pages 22 to 34 of the file and the abstract estimate and letter of the consultant given on 1.10.2015 (see pages 39 to 68 & 82 of the main file) that the 2nd respondent had W.P.(C).13058/16 -: 42 :- consciously decided to proceed with the tender bid from 29.9.2015, even though Ext.R-4(n) e-mail communication was received from the IIT authorities on 28.9.2015 at 10.19 a.m. along with the pile capacity calculations of IIT (See pages 69 to 81 of the main file) and this led to publication of Ext.P-1 e-tender on 2.10.2015. It is thereafter that the petitioner had submitted Ext.P-4 detailed pre- bid queries on 14.10.2015 raising several queries and clarifications especially regarding the discrepancies and mismatch between the BOQ shown in the tender documents vis-a-vis the actual drawings furnished by the respondents, etc. Thereafter, after pre-bid meeting, Ext.P-5 dated 16.10.2015 was issued to the petitioner giving the requisite clarifications and also assuring about the matters, which are specifically referred to therein that all quantities are tentative and the payments will be made on actual measurements and goods for construction drawings will be supplied during the course of the construction and that the whole scope of the work is envisaged to the successful tenderer, who is bound to execute upto variation of 25% and that the tender rates shall hold good for any increase and decrease in the tendered quantities up to variation of 25%, etc. It is thereafter, that on 26.10.2015 (the first extension of the last date of submission of the tender was given - W.P.(C).13058/16 -: 43 :- see page 125 of the main file) whereby the initial last date 29.10.2015 was extended upto 7.11.2015. It is also pointed out by the petitioner that on 27.10.2105, the 2nd respondent had uploaded the second set of drawings for the bidders to follow, replacing the one earlier issued, presumably due to the pre-bid queries. Thereafter, Ext.P-6 is issued on 8.11.2015 finally extending the last date of submission of the tender bids upto 21.11.2015 and Ext.P-5 corrigendum was issued on 9.11.2015 issuing certain additions for some quantities like vitrified tiles and certain other items mentioned therein. Later on 10.11.2015, as per Ext.R-4(o) the IIT had forwarded its comments to the 2nd respondent. It is relevant to note that as stated earlier, the 2nd respondent had obtained the piling calculations from the IIT well before Ext.P-1 tender was published on 2.10.2015. It is thereafter, that the petitioner had submitted Ext.P-8 tender bid on 20.11.2015, which is within the second extended time limit of 21.11.2025. The 2nd respondent had opened the technical bids on 26.11.2015 as per Exts.P-8 to P-10. The hard copy of the pre-qualification/technical bid was also submitted by the petitioner as per Ext.P-11 on 21.11.2015. Thereafter the 2nd respondent had opened the technical bids as per Ext.P-12 on 26.11.2015 and found 6 out of the 7 bidders as qualified. On W.P.(C).13058/16 -: 44 :- 26.11.2025, as can be seen from Ext.R-4(p), the 2nd respondent had forwarded the cost estimate, architectural drawings and other relevant drawings to M/s.KITCO seeking their inputs. To this, M/s.KITCO had forwarded their inputs as per Ext.R-4(p). On 4.12.2015, the 2nd had opened the financial bid as per Ext.P-14 and the petitioner was admitted as the lower tenderer on 4.12.2015 itself, as can be seen from Ext.P-15. Thus it is to be borne in mind that even pending receipt of the detailed comments from the IIT, the 2nd respondent had consciously decided to give 2 extensions for submission of the tender bids, of which the initial extension was upto 7.11.2015 and thereafter it was finally extended upto 20.11.2015. Even after receipt of the detailed comments from the IIT as per Ext.R-4(o) dated 10.11.2015 the 2nd respondent had further proceeded with opening of the technical bids on 26.11.2015 and M/s.KITCO had acknowledged the receipt of the details as can be seen from Ext.R-4(p) dated 30.11.2015. Even after the pendency of the matter with M/s.KITCO as per Ext.R-4(p), the 2nd respondent had also consciously decided to proceed to open the financial bids on 4.12.2015 as can be seen from Exts.P-14 and P- 15, by which the petitioner was admitted as the L1. As per Ext.R- 4(b)/R-4(q) dated 31.12.2015, M/s.KITCO had given their detailed W.P.(C).13058/16 -: 45 :- comments. In response to Ext.R-4(b)/R-4(q) the 2nd respondent KSIDC had given their detailed responses along with their letter dated 27.10.2016 sent to M/s.KITCO as can be seen from pages 177 to 185 of the main file. In response to the comments made by M/s.KITCO, as per item no.15 of Ext.R-4(q) that the rate of market rate items for external finishes are on the higher side, etc. it was pointed out by R-2 in their letter dated 27.1.2016 that the KSIDC had directly collected quotations from suppliers and that the amount quoted is Rs.19.85 crores as against Rs. 17.83 crores shown in the tender and the comparative statement giving all those details were appended with that letter sent by the KSIDC and copies of the quotations received from the suppliers were also sent by courier to M/s.KITCO. Page 184 of the main file would show that the rates shown in the tender was much less than various reliable quotations collected by KSIDC and these aspects were pointed out by R-2 in order to respond to some of the apprehensions raised by M/s.KITCO. All the other details in that regard regarding financial implications based on comments of M/s.KITCO are given on pages 177 to 184 of the main file.
23. It is thereafter that M/s.KITCO has sent Ext.R-4(r) dated 17.2.2016 to R-2. As per item 4 of Ext.R-4(r), it is stated by W.P.(C).13058/16 -: 46 :- M/s.KITCO that it was answered by the architect that many of the items mentioned in M/s.KITCO's letter would be incorporated while executing the agreement and that the possibility of doing the same and possible future implications may be confirmed by a legal/contract expert by KSIDC in view of the provisions of the Indian Contract Act and CVC guidelines and this is being post tender changes. A reading of item No.4 of Ext.R-4(r) would disclose that some of the comments or queries raised by M/s.KITCO was answered by the architect as stated therein. Since the answering of the queries is said to be rendered by the architect, the said architect can only be the consultant appointed by the KSIDC as per Ext.P-1, as a reading of page 18 of Ext.P-1 [definitions, terms & interpretations given under General Conditions of Contract - see page 33 of the paper book of W.P.(C)] will reveal that as per Clause 1(3) thereof, "consultant" means the named architect consortium, who is mentioned therein or in the event of his/their ceasing to be consultant for the purpose of that contract, such other person/s as KSIDC shall nominate for the purpose. Therefore, architect mentioned as per item No.4 of Ext.R-4(r) can only be the technical consultant, as envisaged in the contract (architect appointed by the KSIDC) as the reference in item No.4 of Ext.R-4(r) is that the W.P.(C).13058/16 -: 47 :- architect had answered the queries of M/s.KITCO and therefore such answers or responses given to M/s.KITCO could have been only by the architect for and on behalf of the KSIDC. Therefore, even immediately prior to Ext.R-4(r) dated 17.2.2016, the stand of R-2 KSIDC was that the changes that are reflected based on the inputs given by M/s.KITCO and the clarifications given by IIT, should all be incorporated while executing the agreement with the successful bidder. It is to this aspect, that M/s.KITCO appears to make a comment as per item No.4 of Ext.R-4(r) that the possibility of taking such a course of action and its possible future implications may be confirmed by a legal/contract expert by the KSIDC in view of the contract provisions and the CVC guidelines and that this is so suggested by M/s.KITCO, as it is post tender changes, etc. It is not clear from the pleadings, materials on record as well as the files, as to whether the responsibility of M/s.KITCO was not only to give technical expert advice to KSIDC but also enter into the realm of making comments and remarks on administrative matters including contractual aspects to be rendered by the KSIDC. At first blush it may appear as if the role of M/s.KITCO should have been confined only in the matter of tendering technical opinion and advice from the engineering point of view and if that be so, it is not known as to W.P.(C).13058/16 -: 48 :- the reasons which promoted M/s.KITCO to make comments on the administrative matters and contractual aspects, which are within the realm of KSIDC. Be that as it may, it appears that this comment as per Ext.R-4(r) may also have weighed predominantly, while the matter was thereafter placed for the consideration of Project Implementation Committee (PIC) of the KSIDC. Therefore, it appears that, in spite of the receipt of the details from IIT as per Ext.R-4(n) dated 28.9.2015, Ext.R-4(o) dated 10.11.2015 and letter from M/s.KITCO as per Ext.R-4(p) on 30.11.2015, Ext.R-4(b)/R-4(q) dated 31.12.2015, etc. the competent authorities of R-2 KSIDC were of the well considered view that they could proceed with the issuance of the tender and the further steps to be taken for its finalisation including 2 sets of extensions, opening of technical bid, opening of financial bids and admitting the petitioner as L1, etc. and this can only be on the basis of their considered opinion that variations, if any, that is disclosed in this process, could well be taken care of within the scope and ambit of Clause 35 (dealing with variation) as stipulated in Ext.P-1. Clause 35 of Ext.P-1 reads as follows:
"Clause 35. VARIATION/DEVIATION:
The price of all such additional items/non-tendered items will W.P.(C).13058/16 -: 49 :- be worked out on the basis of rates quoted for similar items in the contract wherever existing or on engineering rate analysis based on prevalent fair price of labour, material and other components as required. The tender rates shall hold good for any increase or decrease in the tendered quantities up to variation of 25%. The rate for the respective item may be reviewed on mutually agreed terms."
24. It was thereafter that the matter was placed before the Project Implementation Committee (PIC), which is chaired by the Principal Secretary to Government in the Industries Department and it also consists of Managing Director of the KSIDC and others. In view of the consistent stand taken by the 2nd respondent for proceeding at various stages of the tender starting from its commencement upto the time immediately prior to the issuance of Ext.R-4(p) dated 26.11.2015, the least that was expected from the respondents was at least to get a complete technical and expert opinion as to whether the variation, which emerged in the instant case would come within the scope and ambit of Clause 35 of Ext.P-1 dealing with variation limits and if not, then the reasons therefor and all other relevant aspects of the matter especially those pertaining to the stand taken by the 2nd respondent in Ext.P-5 pre- bid query replies so that the PIC could take a final decision in that regard. This is all the more warranted as upto the time even immediately prior to Ext.R-4(r) dated 17.2.2016, the authorities of R-2 KSIDC were of the considered view that the issues regarding the W.P.(C).13058/16 -: 50 :- variations as referred to in Ext.R-4(b)/R-4(q) letter dated 31.12.2015 of M/s.KITCO and other aspects could be incorporated while executing the agreement with the successful tenderer, as can be seen from a mere reading of item No.4 of Ext.R-4(r). In that regard even M/s.KITCO had specifically suggested the possibility of such course of action and its possible future implications are to be confirmed with the expert opinion in terms of the provisions of the contract and CVC guidelines. However, the files made available for the perusal of this Court clearly disclose that no such expert opinion has ever been obtained by R-2 either before taking the decision as per Ext.R-4(a) dated 1.3.2016 by the PIC or even thereafter, but before the issuance of the impugned proceedings. Page 188 of the main file shows that the PIC consisted of 5 members; (1) Principal Secretary to Government in the Industries Department, (2) Managing Director, KSIDC (3) Director, District Industries Centre (4) Managing Director, KINFRA and (5) Addl. Secretary (Finance) presumably attached to the Government of Kerala. A reading of Ext.R-4(a) dated 1.3.2016 as produced in the counter affidavit as well as pages 189 to 191 of the main file would disclose that only 3 out of the said PIC members have attended the PIC meeting that was held on 1.3.2016, viz., (1) Principal Secretary to Government (Industries), W.P.(C).13058/16 -: 51 :- who is the chairman of the PIC, (2) Managing Director, KSIDC [member] and (3) (4) Managing Director, KINFRA. It appears that the Director, District Industries Centre and the Addl. Secretary to Government of Kerala (Finance) were not present in the said meeting. Ext.R-4(a) also shows that apart from the 3 available members of the PIC, the executive director of the KSIDC and the Assistant General Manager of the KSIDC were also present as officers of the KSIDC. The relevant contents of Ext.R-4(a) read as follows:
"To execute the work relating to the Construction of Innovation cum Incubation Centre at Life Science Park, Trivandrum.
building,PICnoted that Structural design and the BOQ and cost estimates of the namely Innovation cum Incubation Centre at the Life Sciences Park had been completed and were submitted to IIT, Madras for vetting, at the time when tender proceedings were initiated. The building, with a total built up area of 3.3 lakh sq.ft. was designed by the Architect (M/s.Architects Consortium) based on the technical inputs received from Sathguru Management Private Ltd, the technical consultants positioned by KSIDC. PIC further noted that cost estimate for the building excluding MEP (Mechanical, Electrical & Plumbing) as estimated by the architect worked out to Rs.129.67 Crores and the work was tendered through e-tender portal on 02.10.2015.
PIC was informed that the technical bids were opened on 26.11.15 and out of seven bids received in response to the tender, six bidders were qualified in technical evaluation. The financial bids of qualifying bidders were opened on 04.12.2015 and the financial quotes were as follows:
Sl No. Name of Bidder % quoted Status
1 M/s. Silpa Projects and Infrastructure 5.47% below estimate L2
India Pvt. Ltd.
2. M/s. Marymatha Construction Company 2.10% Below estimate L3
3. M/s. NCC Limited 23.9% above estimate L6
4. M/s. Simplex Infrastructures Ltd. 6.75% Below estimate L1
5. M/s. Cherian Varkey Construction Co. 2.71% Above estimate L4
Pvt. Ltd.
6 M/s. P&C Projects (P) L td. 9.74%Above estimate L5
W.P.(C).13058/16 -: 52 :-
Meanwhile IIT had submitted the vetted structural designs as per which there had been notable differences in the quantity estimate as against the BOQ published vide the tender documents. The PIC noted that tender procedure was initiated based on preliminary discussions with the IIT as regards the structural design submitted to them for review; based on the discussion with IIT was concluded that chances that major differences in quantity were unlikely. In view of the urgency in completing the project a conscious decision was taken to proceed with tendering of the work.
It was brought to the notice of the PIC that the BoQ and cost estimates were reviewed by M/s. KITCO following the submission of the vetted drawings given by IIT. Thereafter, meetings were convened between the Architect and M/s.KITCO in the presence of the representative of KSIDC and it was decided to revise the cost estimates taking the comments given by M/s.KITCO also into account. PIC noted that the estimate has been re-worked at Rs. 121.49 Cr. in place of the original estimate of Rs. 129.67 Cr. The reduction in the estimate was mainly due to decrease in quantity on account of the revisions suggested by M/s.KITCO. The total reduction in estimate is Rs. 8.18 Cr.
Based on detailed deliberations and considering all relevant aspects, the PIC observed that in the given situation as detailed above, the right steps to be taken is to cancel the present tender and initiate tendering procedure afresh on reasons of procedural compliance and transparency.
It was therefore decided to cancel the tender and re-tender the work with a Probable Amount of Contract (PAC) of Rs. 121.49 Cr, by providing ample publicity through both national level dailies as well as local vernacular.
Sd/-
P.H.Kurian, Chairman."
25. As noted hereinabove, no technical or expert opinion was made available for the consideration of the PIC as to whether the noted variations would come within the protection of Clause 35 of Ext.P-1 dealing with permitted variation or whether it is totally beyond the scope of that Clause and as to whether the execution of the agreement with the successful tenderer as suggested by R-2 in item 4 of Ext.R-4(r) would be in any manner inconsistent with the provisions of the tender notice and the CVC guidelines, etc. Further the respondents did not have a case that the 3 members of the PIC, W.P.(C).13058/16 -: 53 :- who attended the meeting, were in any manner professionally competent to assess any technical or expert aspects of engineering contracts regarding the applicability or otherwise of Clause 30. Though 2 officers of the KSIDC were present, it is not discernible either from the files or from Ext.R-4(a), whether such officers or any other expert officers had given their well focused and well considered opinion regarding those aspects to the members of the PIC. As earlier noted, no attempt was made whatsoever to secure any such expert technical opinion, which could have been placed before the PIC. The statement in Ext.R-4(a) to the effect that "Meanwhile the IIT had submitted the vetted structural designs ....." suggests as if the IIT had submitted the structural designs only after the opening of the financial bids on 4.12.2015, about which reference is made in the previous paragraphs. But the indisputable fact of the matter based on the documents produced by none other than R-2 in the additional affidavit as well as in the main file is that the IIT as per Ext.R-4(n) on 28.9.2015 had forwarded the requisite calculations. It is thereafter that on 29.9.2015 the Technical Adviser (Civil) of the KSIDC has observed that though the quantities provided for each items of work are likely to be increased or decreased when the structural design is finalised, the estimate W.P.(C).13058/16 -: 54 :- prepared on the tentative design can be proceeded with by going ahead with the tender invitation, if approved and that according to him, the provisions/ items given are satisfactory completion of the building intended for a special purpose, etc. The said observation of the Technical Adviser (Civil) has been approved by the competent authority of R-2 KSIDC and it is only thereafter that the steps were taken to proceed with the tender notification which resulted in the publication of Ext.P-1 e-tender on 2.10.2015. Still further on the receipt of the detailed comments from the IIT on 10.11.2015 as per Ext.R-4(o), the 2nd respondent had chosen to proceed with the opening of the technical bid on 26.11.2015 and with the opening of the financial bid on 4.12.2015. So the aspects regarding the variation was very much within the knowledge and cognizance of the 2nd respondent while proceeding with each of the steps for the tender process as mentioned above. What is mainly stated in Ext.R-4(a) is that based on the inputs given by the IIT and M/s.KITCO, the cost estimates were reviewed, which resulted in the reduction of the estimate mainly due to the decrease in the quantity of revision suggested by M/s.KITCO and that the reduction in the estimate from Rs. 129.67 crores to Rs. 121.49 crores comes to Rs.8.18 crores. The said variation by way of reduction comes to about W.P.(C).13058/16 -: 55 :-
-6.31% of the original estimate. The actual details of the variation were known to the 2nd respondent at least when Ext.R-4(b)/R-4(q) was submitted by M/s.KITCO on 31.12.2015, to which R-2 had submitted their detailed comments and findings on 27.1.2016, as evident from pages 177 to 185 of the main file. Even immediately prior to Ext.R-4(r) dated 17.12.2015, the considered view of R-2 as reflected in item No.4 was that those variations could be accommodated in the agreement to be executed with the successful bidder. Based on this factual premise that there is a reduction in estimate to the tune of Rs. 8.18 crores, the PIC goes to conclude in the penultimate paragraph of Ext.R-4(a) that "Based on the detailed deliberations and considering all relevant aspects, the PIC observed that in the given situation as detailed above, the right step to be taken is to cancel the present tender and initiate tendering procedure afresh on reasons of procedural compliance and transparency". Other than reaching this conclusion, no proper reasons or grounds are cited by the PIC at least as to the basic issue as to whether the said variations would come within the scope and ambit of the protection envisaged in Clause 35 of Ext.P-1 or whether it is beyond that Clause or whether it is in any way inconsistent with the CVC guidelines, etc., which were the aspects to be examined even going by the comments of M/s.KITCO in item No.4 of Ext.R-4(r). When the W.P.(C).13058/16 -: 56 :- consistent and repeated stand of R-2 was that those variations could be validly accommodated in the agreement to be executed with the successful tenderer and as reflected in their various findings and assurances given in Ext.P-5 pre-bid query replies as referred to herein above, the minimal requirements of fairness and reasonableness demanded that the PIC had secured a proper technical and expert advice on those aspects from the point of view of such engineering contract and then take a decision on those aspects and to give their reasons thereof. True that as per the provisions contained in Ext.P-1, a cancellation order as in Ext.P-18 communicated to the tenderer, need not necessarily show or disclose reasons therein, but it is trite law that such a clause does not mean that a public authority like the 2nd respondent can act even in the absence of reasons for such reasons must be in existence even if it is not communicated in the cancellation order as in Ext.P-18. Therefore, those reasonings consequent on the deliberations of the PIC should have been shown in Ext.R-4(a) or at least in the files. Such reasons are totally and conspicuously absent either in the files or in Ext.R-4(a) and no technical and expert advice or opinion are also seen placed for the consideration of the PIC. It is only pursuant to the decision taken by the PIC as per Ext.R-4(a) W.P.(C).13058/16 -: 57 :- dated 1.3.2016 that the impugned Ext.P-18 cancellation order dated 2.3.2016 has been issued in this case, consequent to which later, the impugned Ext.P-21 re-tender proceedings were issued. In view of the abovesaid aspects, this Court, after due advertence to the abovesaid case law on the subject, is of the considered view that the impugned decision making, which led to the decision of the PIC, as reflected in Ext.R-4(a) and Ext.P-18 is, to say the least, grossly unfair, unreasonable and improper. Though as a matter of right a tenderer like the present petitioner may not have any vested right of hearing at that stage, the development in respect of the law of natural justice has taken huge strides and it would have been only fair on the part of the 2nd respondent to have afforded a modicum of opportunity to the petitioner to present their case as to the applicability or otherwise of Clause 35 to the facts of this case and other relevant aspects. In this regard it is to be noted that it was the petitioner who pointed out various variations and mismatches in the design and piling quantities as can be seen from a reading of the detailed pre-bid queries submitted by the petitioner as per Ext.P-4 which resulted in Ext.P-5 responses and the assurances from the 2nd respondent. Such a fair approach in calling upon the petitioner to present their version, would only have been in public interest, W.P.(C).13058/16 -: 58 :- keeping in view the fact that it was the petitioner's pre-bid queries, which mainly resulted in Ext.P-5 and which later gave rise to the inputs from the IIT and M/s.KITCO, etc. Even if a reasonable opportunity was not afforded to the petitioner, still this Court is of the considered view that the impugned decision making process is palpably unfair, unreasonable and improper (see in this regard the well considered treatment of law in this regard rendered by the Division Bench of this Court in paragraphs 84 to 94 of the judgment dated 4.12.2008 of the Division Bench of this Court in W.A.No. 1460/2008, which has been affirmed by the Apex Court in order dated 10.2.2009 in S.L.P.(Civil) No.30305/2008 reported in (2009) 4 SCC 563. In the above judgment the Division Bench of this Court has extensively surveyed the case law on the subject and has dealt with the expanded horizons of natural justice even in such contractual matters placing reliance on various judgments of the Apex Court as in UOI v. E.G.Nambudiri reported in (1991) 3 SCC 38, Sarat Kumar Dash & Ors. v. Biswajit Patnaik & Ors. reported in 1995 (Supp) 1 SCC 434, Nagarjuna Constructions Company Ltd. v. Govt. of A.P. reported in (2008) 16 SCC 276, Dev Dutt v. UOI reported in (2008) 8 SCC 725, Rajesh Kumar v. Dy.C.I.T. & Ors. reported in (2007) 2 SCC 181, State of West Bengal v. Alpana Roy, reported in (2005) 8 SCC 296, etc. W.P.(C).13058/16 -: 59 :-
26. This Court is fully fortified in arriving at the abovesaid view, more so particularly in the light of the legal principles delineated by the Apex Court in Tata Cellular's case supra reported in (1994) 6 SCC 651, paras 70, 74, 77, 81, 91, etc. It has been categorically held therein that, for applying the well known ground of judicial review based on illegality, irrationality, procedural impropriety, etc. the Apex Court has clearly held that, in all these cases the test to be adopted is that 'the court should consider "whether something has gone wrong of a nature and degree which requires its intervention ?"' (see para 77 of the SCC report of Tata Cellular's case) and it has been reiterated by the Apex Court recently in Rashmi Metaliks' case reported in (2013) 10 SCC 95, that the legal principles laid down in Tata Cellular's case supra still govern the matters relating to judicial review of contractual matters and that the proper approach to predicate the arguments on the decision based on the ratio of Tata Cellular's case supra and their Lordships of the Supreme Court in Rashmi Metaliks' case has reiterated the same view in para 9 thereof that 'In all these cases the test to be adopted is that the court should "consider whether something has gone wrong of a nature and degree which requires its intervention"'. Further as held by the Apex Court in para 91 of the Tata Cellular's case supra and in FCI's case reported in (1993) 1 W.P.(C).13058/16 -: 60 :- SCC 71, there is no unfettered discretion in public law and the public authority is conferred powers only to use them for public good and this imposes a duty to act fairly and to adopt a procedure, which is "fairplay in action". Evaluating the facts of this case, in the light of this principle this Court is constrained to hold that the PIC of the 2nd respondent while taking the decision as per Ext.R-4(a) has given a total go by to the "fairplay in its action" and in view of the various aspects mentioned herein above, this Court is constrained to hold that "something has gone wrong of a nature and degree, which requires the intervention" of this Court by invoking the powers of judicial review in the facts of this case.
27. Though no proper reasons or grounds are disclosed either in the files or in Ext.R-4(a) as to how and why clause 35 of Ext.P-1 will not apply to the facts of this case, and as to how and why the earlier view of the 2nd respondent, as reflected in item 4 of Ext.R-4(r), is not in consistence with the CVC guidelines, an attempt has been made to plead in the affidavits filed by the 2nd respondent. For instance, certain averments have been made in paras 6 and 7 of the counter affidavit regarding the piling depth and the cost reduction and about the inputs received from IIT and M/s.KITCO, etc. To that, the petitioner has filed reply affidavit, in which paras 9 W.P.(C).13058/16 -: 61 :- to 13 thereof deal with the said contentions raised by the 2nd respondent. The petitioner has also placed reliance on Exts.P-22 and P-27 to contend that variations, which resulted in the re- tender are minor and cosmetic changes compared to the original tender notification and that no substantial or significant changes are brought about in the re-tender, etc. However, the said counter affidavit is silent as to the applicability of Clause 35 of Ext.P-1, in the facts of this case. Later the 2nd respondent has filed an additional counter affidavit dated 11.7.2016 stating in para 13 thereof that there has been substantial changes in quantities due to change in pile design, addition, deletion of several items and change in rates and change in BOQ and that variation in quantity and variation was more than 25%. However, the reasons as to how and why clause 35 of Ext.P-1 is not applicable to the facts of this case is not properly and cogently explained therein. This is all the more so, in view of the consistent stand taken by the 2nd respondent, even from the time prior to the publication of Ext.P-1 e-tender and thereafter at various stages, that they could go ahead with the original tender in spite of the variations as disclosed from the inputs from IIT and M/s.KITCO at various points of time. The petitioner would mainly place reliance on clause 35 of Ext.P-1 as well as the W.P.(C).13058/16 -: 62 :- definite stand taken by the 2nd respondent in Ext.P-5 pre-bid queries which have been referred to herein above as well as in the pre-bid queries, as well as the consistent stand taken by the 2nd respondent at various stages in the tender process. Apart from stating the aspects regarding the variation as referred to particularly in penultimate paragraph of Ext.R-4(a), the reason as to the non- applicability of clause 35 is not adverted or referred to therein. Therefore, the respondents cannot supplant further reasons or grounds in the pleadings submitted by them in the defence of the impugned action. This is all the more so, in view of the definite stand and green signal given by the Technical Adviser (Civil) of the 2nd respondent on 29.9.2015 pointing out that there could be variations on many counts, but that the interest of the speedy completion of the work demands that the tender be proceeded with and this was fully accepted by the the competent authorities of the 2nd respondent which resulted in the issuance of Ext.P-1. In response to Ext.P-4 pre-bid queries submitted by the petitioner on various aspects including the piling work, BOQ variance, etc. the 2nd respondent has taken the clear and categoric stand in items 34 to 38 of Ext.P-5 that "all the quantities in BOQ are tentative, which may vary plus or minus for which the payment is made on actual measurements. The rates are based on Delhi Schedule W.P.(C).13058/16 -: 63 :- of Rate (DSR) 46.67% for Trivandrum. The rate quoted is for the whole work... .... .. The drawings uploaded are tentative drawings for the purpose of quoting rates. Good for construction drawings will be supplied at site during the course of construction. All the works and the measurements for billing will be based on the Good for construction drawings." and further in clause 42 thereof that "the whole scope of the work is envisaged to the successful tenderer. The successful contractor is bound to execute upto a variation of 25%. The tender rates shall hold good for any increase or decease in the tendered quantities up to variation of 25%. The rate for the respective items will be rates with the quoted tender below or above, and if any market rate items comes up for execution there will not be any tender excess", etc. Sri.M.Pathros Matthai, learned Senior Counsel appearing for respondents 2 to 4 had also contended that Clause 35 is not applicable as structural design changes are involved in this case. In this regard it is to be noted that such a ground is not adverted to either in the files or in Ext.R-4(a) or in any other materials made available to this Court, which led to the decision making process prior the impugned Ext.P-18. The respondents do not have any specific case that their earlier consistent stand from 29.9.2015 upto the time immediately prior to Ext.R-4(r) was wrong.
28. In this regard, it is to be noted that in the case in Commr. of Police v. Gordhandas Bhanji, reported in AIR 1952 SC 16, the Apex Court has held as follows in para 9 thereof as follows:
`9. ... public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations W.P.(C).13058/16 -: 64 :- subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.' The said view was reiterated in para 8, by the Apex Court in the celebrated case in Mohinder Singh Gill v. Chief Election Commr, reported in (1978) 1 SCC 405, as follows:
"8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji [AIR 1952 SC 16] (AIR p. 18, para 9) `9. ... public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.' Orders are not like old wine becoming better as they grow older."
Though the said position was laid down by the Apex Court in the context of statutory orders, the same has been made applicable even to administrative decision making process in contractual matters, as can be seen from para 14 of the Apex Court judgment in Rashmi Metaliks Ltd. & Anr. v. Kolkata Metropolitan Development Authority & Ors. reported in (2013) 10 SCC 95, which reads as follows:
"14. So far as the first point is concerned, it needs to be dealt with short shrift for the reason that the courts below have not W.P.(C).13058/16 -: 65 :- thought it relevant for discussion, having, in their wisdom, considered it sufficient to non-suit the appellant Company for its failure on the second count. It has, however, been explained by Mr Vishwanathan, learned Senior Counsel for the appellant Company that at the material time there was no blacklisting or delisting of the appellant Company and that in those circumstances it was not relevant to make any disclosure in this regard. The very fact that the Tendering Authority, in terms of its communication dated 22-7-2013 had not adverted to this ground at all, lends credence to the contention that a valid argument had been proffered had this ground been raised. Regardless of the weight, pithiness or sufficiency of the explanation given by the appellant Company in this regard, this issue in its entirety has become irrelevant for our cogitation for the reason that it does not feature as a reason for the impugned rejection. This ground should have been articulated at the very inception itself, and now it is not forensically fair or permissible for the authority or any of the respondents to adopt this ground for the first time in this second salvo of litigation by way of a side wind."
In para 16 of Rashmi Metaliks' case supra, the Apex Court has specifically referred and placed reliance on the previous rulings in Gordhandas Bhanji's case reported in AIR 1952 SC 16, Mohinder Singh Gill's case supra, etc. Therefore, the reasons which are not cogently disclosed in Ext.R-4(a) or in the files, cannot be supplanted by way of pleadings in affidavits filed before this Court. The position would have been different at least if those reasons were discernible from the notings and remarks made in the files and such a perusal of the files in this case discloses that such aspects are conspicuously and totally absent.
29. There is yet another important aspect of the matter as there should be level playing field and legal certainty in commercial transactions. In Reliance Energy Ltd v. MSRDC Ltd. reported in W.P.(C).13058/16 -: 66 :- (2007) 8 SCC 1, the Apex Court has held in para 36 thereof as follows:
"36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of 'non discrimiantion'. However it is not a free standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to 'right to life'. It includes 'opportunity'. In our view, as held in latest judgment of the Constitution Bench of nine Judges in I.R Coelho v. State of T.N (2007) 2 SCC 1, Articles 21 / 14 are the heart of the chapter on fundamental rights. They cover various aspects of life. 'Level playing field' is an important concept while construing Article 19 (1)(g) of the Constitution. It is entitled to invoke the said doctrine of 'level playing field'. We may clarify that this doctrine is, however subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of 'level playing field' is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. this is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. 'Globalisation', in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of 'globalisation'. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of 'level playing field' embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to principle of 'equality' should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforesaid doctrine of 'level playing field'. According to Lord Goldsmith, commitment to the 'rule of law' is the heart of parliamentary democracy. One of the important elements of the 'rule of law' is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of 'reasonableness', then such an act or decision would be unconstitutional."
30. The learned authors, Sri.M.P.Jain and S.N.Jain, in their scholarly treatise, "Principles of Administrative Law", 4th Edn have held in page 855 as follows:
W.P.(C).13058/16 -: 67 :-
"...Although the petitioner had no right to claim that his tender be accepted, yet he did have a right to have his tender 'fairly and properly' considered by the concerned authority ...equal opportunities must be given to citizens and they must not be discriminated against in the matter of making their offer for such contracts and of having the same considered ... there cannot be any discrimination at the threshold or at the time of entry in the field of consideration on merits..."
Going by the facts of this case, the sudden deviance and volte-face shown by the 2nd respondent at the last stage while rendering the decision as per Ext.R-4(a), without adequate materials and without adverting to proper and relevant aspects of the matter regarding the the applicability or otherwise of clause 35 would amount to gross deviance from the requirements of level playing field and legal certainty, which is an inalienable component of rule of law. This is especially in view of the past consistent stand taken by the 2nd respondent to proceed with the tender at various stages, in spite of inputs from IIT and M/s.KITCO. The last minute total turn around in the stand of the 2nd respondent, as reflected in Ext.R-4(a) would amount to violation of the petitioner's right to have his tender fairly and properly considered by the competent authority, even though he cannot claim any right that his tender be accepted. Such a volte-face in the stand of the 2nd respondent, which resulted in Ext.P-2 is also vitiated by arbitrariness. In view of the consistent and definite stand earlier taken by the 2nd respondent at various W.P.(C).13058/16 -: 68 :- stages of the tender process, the 2nd respondent was obliged to address the crucial and relevant issue as to whether the variations as the result of the inputs of the IIT and M/s.KITCO, would come within the scope and ambit of protection afforded by clause 35 or whether it is totally outside the purview of clause 35 and whether the execution of the contract with the successful tender based on the variations would be in any manner inconsistent with the provisions of Ext.P-1 tender notice and CVC guidelines, etc. This should have been done after securing technical and expert opinion in that regard from those who have specialized exposure and experience in working out engineering contracts. Even if it is assumed that M/s.KITCO was within its competence to make suggestions as in item 4 of Ext.R-4(r), it was all the more incumbent on the respondents to have obtained such expert and technical opinion, as otherwise a sudden turn around from their earlier consistent stand, will amount to rank arbitrariness unreasonableness and impropriety, etc. In para 2 on page 2 of the additional affidavit dated 27.7.2016 filed by the 2nd respondent, it has been clearly admitted that they have been following the norms of the PWD with regard to the invitation and processing of the tenders and that they are bound by the guildelines of the State W.P.(C).13058/16 -: 69 :- Government as in Ext.R-4(i) G.O(P).No.324/2015/Fin dated 30.7.2015. So the 2nd respondent could have very well secured technical and expert opinion on the matters mentioned above from the Governmental experts like, Chief Engineer (Buildings), Public Works Department (PWD) of the State Government so that all the relevant and crucial aspects mentioned above could have been examined by their experts with due care and caution, which would have enabled the PIC to take a wholesome look at the matter after taking into account all these relevant and crucial aspects. Non- advertence to these crucial and relevant aspects as pointed above, would certainly vitiate the decision making process as per Ext.R-4(a) and Ext.P-18, in a grave and substantial manner. This Court has no hesitation to hold that the cumulative effect of all these aspects touching the impugned decision making process, is giving rise to a situation, wherein this Court is constrained to hold that "something has gone wrong of a nature and degree, which requires the intervention in judicial review" and it also amounts violation of rudimentary principles of "fairplay in action"
and thus the impugned proceedings are vitiated by gross arbitrariness.
31. The Constitution Bench of the Apex Court in para 85 of the celebrated judgment in E.P.Royappa v. State of Tamilnadu, [AIR W.P.(C).13058/16 -: 70 :- 1976 SC 555] rendered as early in the year 1973, has categorically held that equality is a dynamic concept with many aspect and dimensions and it cannot be "cribbed, cabined and confined" within traditional and doctrinaire limits and from a positivistic point of view, equality is antithetic to arbitrariness and in fact equality and arbitrariness are sworn enemies, one belongs to the rule of law in a republic, while the other to the whim and caprice of an absolute monarch and that where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Art.14, which detrimentally affect fairness and equality in treatment and that State action must be based on valid, relevant principles applicable alike to all similarly situated persons and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Long prior to the rendering of the verdict in E.P.Royappa's case supra, yet another Constitution Bench in the judgment in S.G.Jaisinghani v. UOI reported in AIR 1967 SC 1427, has clearly held in para 14 thereof that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based and that in a system governed by rule of law, discretion, when conferred upon executive authorities must W.P.(C).13058/16 -: 71 :- be confined within clearly defined limits and that the rule of law from this point of view means that decisions should be made by the application of known principles and in general such decision should be predictable and the citizen should know where he is and if a decision is taken without any principle or without any rule, it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. It will be profitable to make a brief reference of para 14 in S.G.Jaisinghani's case supra, which reads a follows:
"(14). In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey, Law of the Constitution, 10th edn., Introduction, cx). `Law has reached its finest moments', stated Douglas, J. in United States v. Wunderlich [342 US 98] , `when it has freed man from the unlimited discretion of some ruler.... Where discretion is absolute, man has always suffered'. It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it is classic terms in the Case of John Wilkes [(1770) 4 Burr 2528] `means sound discretion guided by law. It must be governed by rule, not humour: it must not be arbitrary, vague and fanciful'."
32. As regards the efficacy of norms as in clause 35 of Ext.P-1, it is to be noted that it is now well settled rule in administrative law by a catena of decisions of the Apex Court and various High Courts that an W.P.(C).13058/16 -: 72 :- executive authority must be rigorously held to the standards laid down by the norms governing the field and that it must scrupulously adhere to the standards laid down in the governing norms, as otherwise, the action of the executive authority in violation of the such binding norms would result in their invalidation. Mr.Justice Frankfurter in Viteralli v. Seaton [359 U.S.535 : Law Ed. (Second series) 1012] has held as follows:
which it"An executive agency must be rigorously held to the standards by professes its action to be judged .... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed... This judicially evolved rule of administrative law is now firmly established and if I may add, rightly so. He that takes the procedural sword shall perish with the sword."
(emphasis supplied) Justice K.K.Mathew, in the Apex Court decision rendered in Sukhdev v. Bhagatram reported in (1975) 1 SCC 421, has quoted the above said observation of Mr.Justice Frankfurter with approval.
Later in a landmark decision in the case Ramana Dayaram Shetty v.
International Airport Authority of India and others reported in (1979) 3 SCC 489, P.N.Bhagwati. J, speaking on behalf of three Judge Bench of the Apex Court held as follows, (p.p.503, 504):
'10 .... ..It is a well-settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr Justice Frankfurter in Viteralli v. Saton [359 U.S.535: Law Ed. (Second series)] where the learned Judge said:
"An executive agency must be rigorously held to the standards by which it professes its action to be judged .... Accordingly, if W.P.(C).13058/16 -: 73 :- dismissal from employment is based on a defined procedure, even though generous beyond themust requirements that bind such agency, that procedure be scrupulously observed .... This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword."
This Court accepted the rule as valid and applicable in India in A.S. Ahluwalia v. Punjab [(1975) 3 SCC 503] and in subsequent decision given in Sukhdev v. Bhagatram [(1975) 1 SCC 421], Mathew, J., quoted the above-referred observations of Mr Justice Frankfurter with approval. It may be noted that this rule, though supportable also as an emanation from Article 14, does not rest merely on that article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. If we turn to the judgment of Mr Justice Frankfurter and examine it, we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution, but evolved it purely as a rule of administrative law. Even in England, the recent trend in administrative law is in that direction as is evident from what is stated at pp. 540-41 in Prof Wade's "Administrative Law", 4th Edn. There is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law. Today with tremendous expansion of welfare and social service functions, increasing control of material and economic resources and large scale assumption of industrial and commercial activities by the State, the power of the executive Government to affect the lives of the people is steadily growing. The attainment of socio-economic justice being a conscious end of State policy, there is a vast and inevitable increase in the frequency with which ordinary citizens come into relationship of direct encounter with State power-holders. This renders it necessary to structure and restrict the power of the executive Government so as to prevent its arbitrary application or exercise. Whatever be the concept of the Rule of Law, whether it be the meaning given by Dicey in his "The Law of the Constitution" or the definition given by Hayek in his "Road to Serfdom" and "Constitution of Liberty" or the exposition set forth by Harry Jones in his "The Rule of Law and the Welfare State", there is as pointed out by Mathew, J., in his article on "The Welfare State, Rule of Law and Natural Justice" in "Democracy, Equality and Freedom" "substantial agreement in juristic thought that the great purpose of the rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found". It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes W.P.(C).13058/16 -: 74 :- no difference whether the exercise of the power involves affectation of some right or denial of some privilege."
The rationale for evolving this administrative law is to ensure that the actions of the Government should be free from arbitrariness by insisting for adherence to the governing norms concerned. The Apex Court held that this is very essence of rule of law and its bare minimal requirement.
33. Sri.M.Pathros Matthai, learned Senior Counsel appearing for respondents 2 to 4 has placed reliance on the judgment of the Apex Court in State of U.P. v. Al Faheem Meetex Pvt. Ltd. & Anr reported in (2016) 4 SCC 716, and has contended that where the decision making process has not reached any finality and was still in the embryo and there was no acceptance of the bid, then no right, much less enforceable right, can be said to have been accrued to such a tenderer and that there is no question of giving any notice or hearing to the respondent and that therefore the impugned Ext.P-18 cancellation proceedings are immunized from challenge by way of judicial review. Smt.Malini Ganesh, learned Senior Counsel appearing for the writ petitioner took this Court to the facts of that case and has argued that the said judgment has no application to the facts of this case. In Al Faheem Meetex's case supra, the Apex W.P.(C).13058/16 -: 75 :- Court has dealt with a case where the mandatory Financial Code Rules of the Government stipulated that tender bids could be considered only if there were at least 3 or more valid bids. Among the three bids submitted in that case, one was found to be invalid and the Bid Evaluation Committee (BEC) had selected the tenderer from amongst the two valid bids, in violation of the requirement of the Rule. That Rule insisted the minimum Zone of Consideration of valid bids, in order to ensure competitiveness in bids and it was presumed that if the valid bids are below the prescribed minimum, then it could be due to lack of sufficient publicity. When the BEC was appraised of their mistake, they had cancelled their recommendation. In these circumstances, the Apex Court held that the impugned cancellation order cannot be said to be illegal. Further it was held therein that as the decision making process had not reached any finality and was still in embryo, there was enforceable right for the bidder to get the right of hearing before such cancellation. It was clearly found therein that the earlier recommendation of the BEC to select the contractor was in violation of the mandatory Financial Code Rule. In the instant case, R-2 has no case that the petitioner's bid was ineligible at the technical bid or financial bid stage or that there was no effective competitiveness at W.P.(C).13058/16 -: 76 :- these stages or that the further consideration of the tender process or the petitioner's bid became ineligible at any stage. On the other hand, the consistent conduct and stand of R-2 at all the various stages was that the bids could be accommodated within the terms of the original tender notice. This Court is not holding that there was a legal obligation to hear the petitioner before the issue of Ext.R-4(a) or Ext.P-18, but only that it would have much more fairer and proper to have afforded an opportunity to the petitioner at that stage. This Court is only holding that the impugned decision making process is tainted due to the aspects mentioned hereinabove. For all these reasons, the ratio of the aforesaid Apex Court ruling cannot be pressed into service against the petitioner.
34. The case laws of the Apex Court and various High Courts are in legion and it is also supported by scholarly authorities referred to herein above that "although the tenderer had no right to claim that his tender be accepted, yet he did have a right to have his tender fairly and properly considered by the authority concerned ..... ..." Even in celebrated Shrilekha Vidyarathi's case [see (1991) 1 SC 212, paras 20, 24 etc.) the Apex Court held that applicability of Art.14 to all executive actions of the State being well settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power is W.P.(C).13058/16 -: 77 :- beyond dispute and further that even if the post contractual stage, the State has no power to cast off its personality and exercise unbridled power unfettered by the requirements of Art. 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more, etc. Therefore, the applicability of Art.14 at the threshold of making of a contractor in exercise of the executive power is beyond dispute. Therefore, in the light of all these aspects, the irresistible conclusion that is to be drawn is that the impugned action is vitiated by gross and flagrant violation of Art.14 of the Constitution of India.
35. Sri.M.Pathros Matthai, learned Senior Counsel appearing for the respondents has also raised a contention that after the issuance of the impugned Ext.P-21 re-tender notice, the petitioner had downloaded the tender forms and had raised pre-bid queries and that therefore the petitioner is barred by estoppel and acquiescence in challenging the impugned Ext.P-18 cancellation order. Smt.Malini Ganesh, learned Senior Counsel appearing for the writ petitioner submitted various details and contended that there is no question of applicability of principles of estoppel in the facts of W.P.(C).13058/16 -: 78 :- this case. On an examination of the facts of this case, it seen that the deadline for submission of the tender in pursuance of the impugned Ext.P-21 revised tender notice dated 3.3.2016 was upto 31.3.2016. The petitioner had submitted Ext.P-23 pre-bid queries dated 14.3.2016, the deadline for bid submission was initially extended upto 11.4.2016 and was subsequently extended upto 24.4.2016 and was thereafter extended upto 12.5.2016. The petitioner had submitted bid for revised tender on 23.4.2016. But it is to be crucially noted that immediately after the receipt of the impugned Ext.P-18 cancellation order dated 2.3.2016, the petitioner has submitted Ext.P-19 representation dated 3.3.2016 raising serious objections before the 2nd respondent against the cancellation of the tender bid, the details of which have already been pointed out herein above. The present Writ Petition (Civil) was filed before this Court on 1.4.2016. Therefore, the outcome of Ext.P-18 proceedings and the consequential proceedings like Ext.P-21, etc. are subject to and dependent upon the outcome of the writ proceedings initiated by the writ petitioner. Thereafter this Court had passed an order dated 4.4.2016 in this W.P.(C). directing that the finalisation of the tender bid based on Ext.P-21 is stayed for a period of 2 months and the said order was later extended until W.P.(C).13058/16 -: 79 :- further orders as per order dated 30.5.2016. Therefore, the impugned Ext.P-18 proceedings and all other consequential proceedings in pursuance thereof including Ext.P-21 are subject to and dependent upon the further orders to be passed in this Writ Petition as well as the final outcome of this W.P.(C). As noted above the petitioner has submitted the tender bid on 23.4.2016. Merely because the petitioner had raised certain pre-bid queries and had sought extension of time will not by itself amount to estoppel and acquiescence on his part to challenge the impugned Ext.P-15 cancellation order, more so particularly, in the light of the fact that he had placed serious objections against the said impugned Ext.P-18 order by submitting Ext.P-20 representation as early as on 4.3.2016 itself, and has also subsequently initiated the present writ proceedings. No person can predict with exactitude as to whether he will fully succeed or not in the litigative proceedings and therefore in the context of said facts and circumstances in this case, the petitioner cannot be blamed for having submitted his tender bid, as the entire impugned proceedings and also the consequential proceedings thereto, are subject to the further orders and final outcome of the present Writ Petition. Hence this Court is of the view that the contention of the 2nd respondent that the petitioner is W.P.(C).13058/16 -: 80 :- estopped from challenging the impugned Ext.P-18 proceedings and consequential proceedings like Ext.P-21, is not tenable and the same is overruled.
36. It has also been urged by R-2 that as the petitioner has sought a writ of mandamus to direct the respondents to issue the work allotment to the petitioner, third parties especially those who had taken part in the tender proceedings could have challenged if the work had been alloted to the petitioner with the modification and variations, etc. and that therefore non-impleadment of such parties, who are necessary parties, will be fatal. Smt.Malini Ganesh, learned Senior Counsel appearing for the writ petitioner submits that as the main prayer of the petitioner is only a challenge against the impugned Ext.P-18 cancellation proceedings and as the other prayers are fully consequential thereto, such other bidders cannot be said to be necessary parties and even if they are viewed as proper parties, non-impleadment is not fatal and further that the re-tender bidders are fully aware about the stay order passed by this Court in this W.P.(C). and such persons have not chosen to come forward so as to oppose the prayers in this Writ Petition. On a consideration of the rival pleas in this regard, as this Court is not proposing to issue writ of mandamus for allotment of work to the W.P.(C).13058/16 -: 81 :- petitioner in this proceedings, the stage for entertaining any legally justiciable grievances, if any, by such parties has not yet arisen and therefore the impleadment of such parties is not now necessary, even if such parties are treated as necessary parties for considering the prayer for such a writ of mandamus. The rival bidders in the original tender had participated in the tender process at all stages and none of them has ever raised any objection at any time that the original bids cannot be accommodated within the terms and conditions of that tender and that it is liable to be cancelled for issue of re-tender, etc. R-2 would even contend that not even the lowest tenderer has any right to be heard before a decision is taken on the question whether L-1 should be allotted the work. In these circumstances, at any rate, the rival bidders in the original tender cannot be said to have any rights to be affected before a decision is taken by the competent authority at the post Ext.P-15 stage on the question whether allotment of work to L-1 will come within the scope of Clause 35 and the applicable Governmental norms. Ext.P- 21 re-tener proceedings is purely a consequential proceedings as a result of Ext.P-18 and its fate is fully dependent upon the fate of Ext.P-18. Therefore, bidders of Ext.P-21 cannot be said to have any rights to be heard for deciding on the validity of Ext.P-18. Of W.P.(C).13058/16 -: 82 :- course, if any such bidders, had voluntarily approached this Court at the appropriate time, their request for impleadment could have been considered. But none of them has chosen to come forward with any such pleas. For all these reasons, the contentions regarding non-impleadment will stand overruled.
37. The petitioner has raised certain allegations of malafides, favouritism, etc. In the view proposed to be taken by this Court in this case, it is not in any way necessary to examine and resolve the rival pleas in this regard. The petitioner has also raised certain contentions regarding the manner in which some tender bids were entertained in the re-tender. It is not necessary for this Court to enter into those areas and all such contentions are left open. Smt.Malini Ganesh, learned Senior Counsel for the petitioner, had placed reliance on certain orders and guidelines of the Central Vigilance Commission. As the matter is proposed to be remitted, it is for both sides to highlight all such aspects, at the time of remit.
38. The upshot of the above discussion is that the impugned Ext.P-18 proceedings is liable to be interdicted in judicial review. However, it is to be noted that this Court has endeavoured only for examining the impugned decision making process, which led to the outcome in question and this Court has not examined the merits of W.P.(C).13058/16 -: 83 :- the matter, in order to hold that the impugned Ext.P-18 proceedings is illegal, etc. This Court has only taken the view that the impugned decision making process, which led to Ext.P-18 is vitiated by arbitrariness, unreasonableness, impropriety and non consideration of relevant aspects, and therefore, the same is in violation of Art.14, etc. This Court is also of the view that at this stage it is not proper and fit for this Court to enter into the realm of adjudication of the merits of the matter as to whether the variations in question would come within the scope and ambit of protection afforded by Clause 35 and such other contentions urged by the petitioner. That is to be fully and properly examined by persons with expertise, who have sufficient experience in handling and managing engineering contracts in building construction. As pointed out herein above, the 2nd respondent has clearly admitted in para 2 on page 2 of their additional affidavit dated 27.2.2016 that they are following the norms of the Public Works Department with regard to invitation and processing of tenders and that the guidelines issued by the State Government as per Ext.R- 4(i) G.O(P). No.324/2015/Fin. dated 30.7.2015 regarding the execution of public works in the State, are being followed by the 2nd respondent, etc. This Court is inclined to hold that Ext.R-4(a) and Ext.P-18 W.P.(C).13058/16 -: 84 :- proceedings are ultra vires and unreasonable for the aforestated reasons and to remit the matter to the competent authority for consideration of the entire matter afresh from the stage immediately prior to the issuance of Ext.R-4(a). As already noted herein above, for that purpose, the competent authority (PIC) should be equipped with expert technical opinion in the matter on the points noted herein above. The Chief Engineer (Buildings) of the Public Works Dept. of the Government of Kerala and the various experts under him may have wealth of experience in dealing with tenders in engineering contracts in building constructions, etc. and this Court is of the view that in order to ensure that the further decision making process is based on objective and transparent basis guided by expert and technical opinion in the matter, it is ordered that the Chief Engineer, PWD (Buildings) will render necessary assistance and give requisite technical and expert opinion on the matters mentioned above. For this purpose, the Chief Engineer (Buildings) will immediately constitute an expert committee consisting of himself and 2 other senior and high ranking engineers belonging to his Department, chosen by him. If the Chief Engineer (Buildings) is of the view that the assistance of an expert engineer having sufficient experience in Design/Structural Design is W.P.(C).13058/16 -: 85 :- necessary, then he will be at liberty to additionally co-opt such an expert by requisitioning him from amongst the engineering personnel alloted under the Chief Engineer (Design), PWD, after consultation with that authority. The said committee will examine the entire matter with reference to the materials on record, which are to be made available by the 2nd respondent and give an expert and technical opinion as to whether the variations that has emerged in this case will come within the scope and ambit of the protection afforded by Clause 35 of terms and conditions of Ext.P-1 tender bid or whether it is outside the scope of that clause. So also it should be examined whether the execution of the agreement with the lowest tenderer pursuant to Ext.P-1 with the abovesaid variations would be in any manner inconsistent with the Governmental norms, if any, that are applicable to the tender bids of the KSIDC and the applicable CVC (Central Vigilance Commission) guidelines. In this regard, the said committee headed by the Chief Engineer (Buildings) PWD should also examine the earlier consistent stand taken by the 2nd respondent right from 29.9.2015 upto the time prior to the issuance of Ext.R-4(r) dated 17.2.2016 and also the clear and definite stand taken by the 2nd respondent in Ext.P-5 pre-bid query reply as mentioned herein W.P.(C).13058/16 -: 86 :- above and examine whether their said earlier stand was proper and correct in terms of the terms and conditions contained in Ext.P-1, more particularly Clause 35 thereof, and also whether the changes and variations in the re-tender proceedings are only minor and cosmetic changes as contended by the petitioner or whether they are substantial or significant changes, which cannot be accommodated within the terms and conditions of Ext.P-1 tender terms and conditions as well as other applicable Governmental norms, if any, as stated above and also whether the original tender could be proceeded with as contended by the petitioner or whether re-tender is inevitable going by the terms and conditions and the norms governing the field. For enabling the said expert committee headed by the Chief Engineer (Buildings), PWD, to render their technical and expert opinion, the 2nd respondent will submit their written submissions in the matter along with the entire files and records and should also produce a copy of this judgment before the Chief Engineer (Buildings) PWD, within a period of ten days from the date of receipt of a certified copy of this judgment. So also the petitioner will be at liberty to give their detailed written submissions along with requisite materials and documents, that he may wish to produce, before the Chief Engineer (Buildings) PWD, and it will also W.P.(C).13058/16 -: 87 :- be open to them to produce details like Exts.P-22, P-27, etc. in aid of their submissions and contentions. The petitioner will make available their written submissions and other materials before the Chief Engineer (Buildings), PWD, along with a copy of this judgment within a period of 10 days from the date of receipt of a certified copy of this judgment. The Chairman of the PIC as well as the Managing Director of the 2nd respondent KSIDC will also take necessary steps so as to facilitate proper and co-ordinated action with the Chief Engineer (Buildings) PWD, Government of Kerala. Upon receipt of all the necessary papers as indicated above, the Chief Engineer (Buildings) PWD will ensure that the abovesaid expert committee headed by him examines all the relevant aspects of the matter and render their technical and expert opinion on the points as mentioned above, by submitting a report in this regard to the 2nd respondent, within a period of 3 weeks from the date of receipt of the abovesaid papers from the petitioner and the 2nd respondent. A copy of the said report should also be made available by the Chief Engineer (Buildings), PWD, as well as by the Managing Director of the 2nd respondent to the petitioner or their authorised representative immediately. After receipt of the said report of the expert committee, the Project Implementation Committee (PIC) of W.P.(C).13058/16 -: 88 :- the 2nd respondent KSIDC will consider the entire matter afresh on the points noted herein above. This Court is of the view that it is only appropriate and fit that a reasonable opportunity is given by the PIC to the petitioner through their authorised representative to present their versions in the matter based on their contentions and submissions as well as the matters that will emerge from the report of the expert committee. After permitting the petitioner through their authorised representative to present their versions as stated above, the PIC will take a final decision on the points noted herein above, and decide whether further steps could be taken for proceeding with the tender notice in the stage of Exts.P-14 and P-15 or whether the re-tender is to be proceeded with.
39. As the impugned Ext.P-21 revised tender proceedings is consequential to the impugned Ext.P-18 proceedings, ordinarily with the quashing Ext.P-18, Ext.P-21 would also have been interfered with by this Court. However, taking into account the public interest involved in this matter, this Court is not now quashing the impugned Ext.P-21 and it is ordered that the fate of Ext.P-21 will be dependent on the decision to be taken by the PIC consequent to the remit, as directed above. It is thus made clear that if the decision of the PIC consequent to the remit is to proceed W.P.(C).13058/16 -: 89 :- further with the original tender from the stage from Ext.P-14 and P-15, then the impugned Ext.P-21 revised tender notice will stand automatically rescinded. If on the other hand, the decision of the PIC is to cancel the original tender bids and going for fresh tender, then R-2 could take steps to go ahead with the further proceedings pursuant to Ext.P-21 and for that purpose, there is no necessity to issue any fresh retender as it would be waste of time and money and will not be conducive to public interest. It is made clear that all the observations and findings in this judgment are only from the limited perspective to decide as to whether the impugned decision making process has been vitiated or not, and none of the observations and findings in this judgment can be construed as an expression on the merits of the matter, for those are matters to be decided by the PIC consequent to the remit of the matter after securing the expert committee's guidance as directed above. It is also made clear that contentions on both sides as to the merits of the matter on the points noted herein above are left open. In the result, following directions are issued:
(i) It is declared that the impugned decision making process, which led to Ext.R-4(a) and Ext.P-18 tender cancellation order are vitiated by arbitrariness, unreasonableness, impropriety, and non-consideration of crucial and relevant aspects and hence is in violation of Art.14 of the Constitution of India. Consequently, the said impugned proceedings are quashed and the matter is remitted to the Project Implementation W.P.(C).13058/16 -: 90 :- Committee (PIC) of R-2 KSIDC for consideration of the matter afresh from the stage immediately prior to Ext.R-4(r) and to take a decision thereon after obtaining technical and expert opinion on the matters pointed out hereinabove from the committee of experts headed by the Chief Engineer (Buildings) PWD, Government of Kerala.
(ii) To effectuateitthe compliance of the directions contained in direction No.
(i) above, is ordered that the Chief Engineer (Buildings), PWD, Government of Kerala will forthwith constitute a committee of experts consisting of himself and two other senior and high ranking engineers belonging to PWD, chosen by him. If the Chief Engineer (Buildings), PWD, is of the view that the assistance of an expert engineer having sufficient experience in Design/Structural Design is necessary, then he will be at liberty to additionally co-opt such an expert by requisitioning him from amongst engineering personnel alloted under the Chief Engineer (Design) PWD, after due consultation with that authority.
(iii) The 2nd respondent will submit their written submissions in the matter along with the entire files and records and should also produce an attested copy of this judgment before the Chief Engineer (Buildings), PWD, Government of Kerala, Thiruvananthapuram, within a period of 10 days from the date of receipt of a certified copy of this judgment.
(iv) The petitioner will also give their detailed written submissions along with the requisite documents and materials that they wish to produce before the said Chief Engineer and it will also beinopen to them to produce details like Exts.P-4, P-5, P-22, P-27, etc. aid of their submissions and contentions. This shall be done by the petitioner along with a copy of the judgment within a period of 10 days from the date of receipt of a certified copy of this judgment.
(v) The Chairman of the PIC as well as the Managing Director of the the 2nd respondent KSIDC will also take necessary steps so as to facilitate proper and co-ordinated action with the Chief Engineer (Buildings), PWD, Government of Kerala, so as to ensure timely and expeditious compliance of the abovesaid directions.
(vi) In order to ensure clarity in the presentation of the versions of the petitioner and R-2 before the expert committee, it is ordered that the authorised representatives of the petitioner and R-2 may be given an opportunity by the committee about their versions and submissions so that the committee will be equipped to get any clarifications from these parties. However, in order to avoid unnecessary delay in issuing intimation of such opportunity, it is made clear that the Chief Engineer need not issue any such intimation by post, but both parties should inform the Chief Engineer (Buildings) forthwith about the cellphone numbers, e-mail IDs of their respective authorised representatives immediately, so that the Chief Engineer's office need to intimate the date, time and venue of such opportunity for presentation by cell phone, W.P.(C).13058/16 -: 91 :- e-mail, SMS, etc. at any short notice, which could be availed by these parties.
(vii) Upon receipt of all the necessary papers, as indicated above, the abovesaid expert committee headed by the Chief Engineer (Buildings), PWD, will examine the entire matters with reference to the materials on record, which are to be made available to him by the 2nd respondent and shall give an expert and technical opinion as to whether the variations that have emerged in the works, will come within the scope and ambit of the protection afforded by Clause 35 of the terms and conditions of Ext.P-1 tender bid or whether it is outside scope of that clause. It should also be examined by the committee whether the execution of the agreement with the lowest tenderer pursuant to Ext.P-1 for the abovesaid variations could be in any manner inconsistent with the Governmental guidelines, if any, that are applicable to the tender bids of the KSIDC and the applicable CVC guidelines.
(viii) The committee should also examine the earlier consistent stand taken by the 2nd respondent right from 29.9.2015 upto the time prior to the issuance of Ext.R-4(r) dated 17.2.2016 and also the clear and definite stand taken by the 2nd respondent in Ext.P-5 pre-bid query reply as mentioned herein above and examine whether the said earlier stand was correct and proper in terms of the terms and conditions containedthe in Ext.P-1, more particularly, Clause 35 changes and variations in re-tender proceedings are onlywhether and thereof and also minor cosmetic changes as contended by the petitioner or whether any substantial or significant changes have occurred, which cannot be accommodated within the terms and conditions of Ext.P-1 tender terms and conditions as well as the other applicable Governmental norms, if any, as stated above and also whether the original tender could be proceeded with as contended by the petitioner or whether the retender is inevitable going by the terms and conditions and norms governing the field.
(ix) After completing the due process as indicated above, the Chief Engineer (Buildings), PWD,examines will ensure that the abovesaid expert committee headed by him all the relevant aspects of the matter and should render technical and expert opinion on the points hereinabove by submitting a report in this regard to the 2nd respondent within a period of 3 weeks from the date of receipt of the abovesaid papers from the petitioner and the 2nd respondent.
(x) A copy of the said report of the committee should also be made available by the Chief Engineer (Buildings) as well as the Managing Director of the 2nd respondent directly to the petitioner or their authorised representative, immediately.
(xi) After receipt of the said report of the expert committee, the PIC will consider the entire matter afresh on the points noted herein above and in this process, they will also afford a reasonable opportunity of hearing W.P.(C).13058/16 -: 92 :- to the petitioner through their authorised representative, to present their versions in the matter based on their written submissions and contentions as well as their remarks on the matters in the expert committee report. The intimation/notice of such opportunity need not be sent by post and the petitioner will inform R-2 about the cellphone and e-mail ID of their representative and such intimation of date, time and venue of such opportunity need be informed by R-2 by cellphone, e-mail, SMS, etc. to the petitioner's representative, who will have to avail the same within any short notice.
(xii) The PIC, after taking into account all the relevant aspects of the matter, including the report of the expert committee as well as the written submissions of the petitioner, will take a final decision on the points noted herein above, more particularly on the matters covered by directions (vii), (viii), etc. and decide whether further steps could be taken for proceeding with the Ext.P-1 tender notice from the stage of Exts.P14 andurgent or whether retender is to be proceeded with.abovethe P-15 As matter is for all concerned, the PIC will take all reasonable endeavours to ensure that the final decision rendered, as expeditiously as possible, preferablyaswithin 2 weeks from directed is the date of receipt of the report of the expert committee as well as the written submissions of the writ petitioner, so that a lawful, just and fair decision is taken in the matter.
(xiii) The fate of Ext.P-21 re-tender proceedings will be dependent on the decision to be taken by the PIC consequent to the remit as directed above.
Thus it is ordered that if the decision of the PIC consequent to the remit, is to proceed further with the original tender from the stage of Exts.P-14 and P-15, then Ext.P-21 revised tender notice will stand automatically rescinded and cancelled. If, on the other hand, the decision of the PIC is to cancel the original tender bids and to go in for fresh tender, then they could go ahead with the further proceedings pursuant to Ext.P-21 and for that purpose, there is no necessity to issue any fresh re-tender as it is waste of time and money and will not conducive to public interest.
(xiv) It is made clear that none of the observations and findings in this judgment should be construed as an expression on the merits of the matter, which are to be independently decided by the PIC consequent to the remit, after securing the expert committee's guidance as directed above and after considering the submissions of the petitioner.
(xv) It is further made clear that contentions on both sides on the abovesaid aspects of the merits of the matter on the points noted herein above, are left open.
The learned Senior Govt. Pleader is requested to ensure that the office of the Advocate General and the Liaison Officer of the W.P.(C).13058/16 -: 93 :- PWD attached to the office of the Advocate General, forward copies of this judgment to the Chief Engineer (Buildings) & Chief Engineer (Designs), PWD, Government of Kerala, Thiruvananthapuram, forthwith.
With these observations and directions, the aforecaptioned Writ Petition (Civil) stands finally disposed of.
sdk+ ALEXANDERSd/-
THOMAS, JUDGE
///True Copy///
P.S. to Judge