Jharkhand High Court
M/S Sandhya Constructions Through Its ... vs M/S Steel Authority Of India Limited ... on 29 June, 2020
Author: Rajesh Shankar
Bench: Rajesh Shankar
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 1199 of 2020
M/s Sandhya Constructions through its proprietor Satyendra Kumar,
Bokaro Steel City, Bokaro ... ... Petitioner
Versus
1. M/s Steel Authority of India Limited (SAIL), New Delhi through its
General Manager
2. Bokaro Steel Plant, a unit of M/s Steel Authority of India Limited, Ispat
Bhavan, Bokaro Steel City, Bokaro through its C.E.O.
3. The Chief General Manager (Town Administrative Department), Bokaro
Steel Plant, Nagar Sewa Bhavan, Bokaro Steel City, Bokaro
... ... Respondents
CORAM: HON'BLE MR. JUSTICE RAJESH SHANKAR
-----
For the Petitioner : Mr. Deepak Kumar, Advocate For the Respondents : Mr. Vijay Kant Dubey, Advocate
-----
Order No. 04 Dated: 29.06.2020 The present writ petition is taken up today through Video conferencing.
The present writ petition has been filed for issuance of direction upon the respondents to cancel the entire process of allotment of work for "Rate Contract for Comprehensive Civil Maintenance Work of Township, BGH & CSR activities" pursuant to NIT No. CCNW/19-20/LTE- 624/TE-Civil-4010022569 (hereinafter referred to as "the said tender") dated 25.11.2019 as the same has been conducted without following the tender norms as contained in the CVC guidelines.
2. The learned counsel for the petitioner submits that the petitioner was one of the bidders in the said tender. The bidding through reverse auction process for the said tender was held on 03.03.2020 and approximately 147 bids were placed including the bid of the petitioner. It is further submitted that so far as the reverse auction process is concerned, the same is generally done for purchase and selling of goods and not for rendering services. However, the present tender which was in relation to providing services was processed by the respondents through reverse auction. It is also submitted that each and every bidder in the said tender quoted the lowest price i.e., (-) 25% of the estimated value of Rs. 14 crores and, therefore, all were L-1, as such the respondents should have awarded the work equally or in accordance with the CVC guidelines. The learned counsel for the petitioner further 2 submits that in "compliance of procedure 2000", memo no. ED(P)/01/9/174 dated 05.04.2000 has been issued under the signature of the Executive Director (Projects), Steel Authority of India Limited, Bokaro Steel Plant, which clearly manifests that in case of tie, if only one party amongst them has to be selected, the said selection should be done through draw of lots in presence of the bidders' representatives. However, the respondents opted the method of 'fastest finger first/Yankee process' for allotment of work which was neither mentioned in the terms and conditions of the notice inviting tender nor in conformity with the CVC guidelines and thus, it can be said that the same has been done in an arbitrary manner with a view to favour some of the contractors who participated in the said tender. It is also submitted that the petitioner-firm along with various other aggrieved tenderers represented the respondent no. 3 - the Chief General Manager (Town Administrative Department), Bokaro Steel City on 05.03.2020 highlighting the discrepancies occurred in the auction process and requested for looking into the matter, however, the same was not responded. On acknowledging the fact that the respondents were proceeding further with the tender process, the petitioner again represented the respondents on 14.03.2020 for staying the award of work with a further request to cancel the entire process of tender, but no heed was paid towards the said representation also. The learned counsel for the petitioner thus submits that the respondents have conducted the reverse auction process in relation to the work in question violating the terms and conditions of the NIT and the norms of the CVC guidelines and, therefore, the entire tender process in relation to the said work is liable to be cancelled.
3. On the contrary, the learned counsel for the respondents submits that the respondents by way of auction notice dated 28.02.2020 had informed all the participating bidders about the Standard Instruction and the General Terms and Conditions of the auction process. Altogether 145 eligible bidders including the petitioner had conveyed their acceptance to online declaration with respect to the auction notice dated 28.02.2020 before participating in the auction process. Since the petitioner participated in the reverse auction process with open eyes, it cannot be allowed to turn around by contending that the reverse 3 auction conducted by the respondents through an agency i.e., M- junction Services Limited was illegal. It is further submitted that it has been clearly mentioned in Clause-6 of the Special Instructions of NIT that the timing of bid at a particular price will be the decisive factor of ranking on the concept of 'first come first serve' basis, if more than one bidder quotes the same price. It is, therefore, submitted by the learned counsel for the respondents that the reverse bidding process was conducted in a fair and transparent manner and the same requires no interference of this Court.
4. Heard the learned counsel for the parties and perused the materials available on record. The learned counsel for the petitioner has submitted that the petitioner had quoted the same price as quoted by other eligible bidders and thus, the selection of L-1 should have been done by way of draw of lots and not by the 'fastest finger first/Yankee process'. It has been contended by the learned counsel for the petitioner that the respondents have failed to follow the procedure prescribed under the CVC guidelines to deal with the situation where there is tie between two or more bidders. The learned counsel for the petitioner, however, has failed to show any such provision to the Court as to whether the said guidelines is with regard to conducting the reverse auction process. On the other hand, the learned counsel for the respondents has submitted that all the applicable guidelines including the CVC guidelines have duly been followed while conducting the reverse auction process.
5. I have gone through the Office Order No. 46/9/03 issued by the Central Vigilance Commission on the subject of e-procurement/reverse auction, whereby all the Vigilance Officers of public enterprises were informed as under:
"The Commission has been receiving a number of references from different departments/organisations asking for a uniform policy in this matter. The departments/organisations may themselves decide on e- procurement/reverse auction for purchases or sales and work out the detailed procedure in this regard. It has, however, to be ensured that the entire process is conducted in a transparent and fair manner."
6. Sub-clause (c) of Clause 9.10 of the Vigilance Guidelines, 2017 reads as under:
4"Reverse Auction is a process of online, real-time purchase, adopted by procuring entities to select the successful bid; the process involves presentation of successively more favourable bids by the bidders, over a pre-defined time schedule; the process also allows compilation and evaluation of bids.
At present, not much instructions / guidelines on the subject of reverse auction are available. However, it has to be carried out within the broad framework of GFR and CVC guidelines on public procurement ensuring transparency, fairness and efficiency, so as to achieve best value for the money spent."
7. It would thus be evident that so far as the reverse auction process is concerned, no specific guideline has been framed, however, the public enterprises have been advised to carry out the said process within the broad framework of GFR and CVC guidelines for making public procurement ensuring transparency, fairness and efficiency to make prudent expenditure of public money.
8. Reverting back to the present case, it would be evident that details regarding the online reverse auction were uploaded on the website and the petitioner had submitted the self-certified copy of the RA terms and conditions as well as Annexure-III-cum-Format A confirming its acceptance. The relevant part of Auction Notice No. 51104 under the heading of 'Standard Instruction and General Terms and Conditions' is quoted as under:
"6. If more than one bidders have same price then timing will be the deciding factor of their ranking as first come first serve basis."
9. In the case of "Meerut Development Authority Vs. Associations of Management Studies & Anr." reported in (2009) 6 SCC 171, the Hon'ble Supreme Court has held as under:
"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."
10. Since the process of reverse auction was duly intimated to 5 all the bidders including the petitioner, I find substance in the argument of the learned counsel for the respondents that the petitioner cannot be permitted to challenge the reverse auction process after finding itself unsuccessful in the said tender as he had participated in the same having agreed to the terms of the auction.
11. The Hon'ble Supreme Court in the case of "Tata Cellular Vs. Union of India" reported in (1994) 6 SCC 651, has held as under:
"94. The principles deducible from the above are:
--------
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
--------"
12. Further, in the case of "Air India Limited Vs. Cochin International Airport Limited & Ors." reported in (2000) 2 SCC 617, the Hon'ble Supreme Court has held as under:
"7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489], Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India [(1981) 1 SCC 568], CCE v. Dunlop India Ltd. [(1985) 1 SCC 260, Tata Cellular v. Union of India [(1994) 6 SCC 651] , Ramniklal N. Bhutta v. State of Maharashtra [(1997) 1 SCC 134] and Raunaq International Ltd. v. I.V.R. Construction Ltd. [(1999) 1 SCC 492] The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to 6 judicial review, the court can examine the decision- making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene."
13. It may accordingly be observed that the invitation to tender cannot be open to judicial scrutiny as the same is in the realm of contract. The government/its agencies must have the freedom of contract. Any tendering authority is the best judge of its interest and needs and thus, it is always open to it to put the terms and conditions in the NIT so as to best serve its purposes, if otherwise the same conforms the requirement of transparency and fairness.
14. In my considered view, the petitioner has failed to make out any case of discrimination, malafide and arbitrariness on the part of the respondents in conducting the reverse auction process and as such, I see no reason to interfere with the work in question under the writ jurisdiction of this Court which otherwise is plenary in nature.
15. The writ petition being devoid of merit is accordingly dismissed.
(Rajesh Shankar, J.) Manish/A.F.R.