Himachal Pradesh High Court
Between vs North East Frontier Railways on 15 September, 2021
Bench: Tarlok Singh Chauhan, Satyen Vaidya
REPORTABLE/NON-REPORTABLE
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
ON THE 15th DAY OF SEPTEMBER 2021
BEFORE
.
HON'BLE MR. JUSTICE TARLOK SINGH CHAUHAN
&
HON'BLE MR. JUSTICE SATYEN VAIDYA
CIVIL WRIT PETITION No. 4355 OF 2021
Between:-
M/s THE SHIVAM ENTERPRISES,
A SOLE PROPRIETORSHIP FIRM,
HAVING ITS REGISTERED OFFICE
AT SCO 3, BAJWA MAKET,
NEAR OLD CIVIL COURT, RAJPURA,
PATIALA, PUNJAB 140401,
THROUGH ITS PROPRIETOR SH. PANKAJ
S/O SH. ANAND KISHOR,
R/O HOUSE No.1/1883,
NEAR WATER TANK, OLD RAJPURA,
PATIALA, PUNJAB ......PETITIONER
(BY SH. GAURAV CHOPRA, SR. ADVOCATE
WITH SH. PRANAY PRATAP SINGH,
MS. SHRISHTI SINGH AND
MR. RISHABH, ADVOCATES)
AND
1. THE STATE OF HIMACHAL PRADESH
THROUGH ITS PRINCIPAL SECRETARY
(PW), HIMACHAL PRADESH SECRETARIAT,
CIRCULAR ROAD, CHHOTA SHIMLA, SHIMLA.
2. THE PUBLIC WORKS DEPARTMENT,
OFFICE OF THE CHIEF ENGINEER,
NATIONAL HIGHWAYS, BLOCK-D,
NIRMAN BHAWAN, NIGAM VIHAR,
SHIMLA-171002 THROUGH ITS CHIEF ENGINEER.
.RESPONDENTS
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(SH. ASHOK SHARMA, ADVOCATE GENERAL,
WITH SH. RAJENDER DOGRA, SENIOR ADDITIONAL
ADVOCATE GENERAL, SH. VINOD THAKUR,
SH. HEMANSHU MISRA, SH. SHIV PAL MANHANS
ADDITIONAL ADVOCATE GENERALS AND
.
SH. BHUPINDER THAKUR, DEPUTY ADVOCATE
GENERAL)
RESERVED ON : 08.09.2021
DECIDED ON : 15 .09.2021
This petition coming on for admission this day,
Hon'ble Mr.
r Justice Satyen Vaidya, passed the
following:
ORDER
Petitioner has preferred the instant petition with a prayer to quash the report of Technical Evaluation Committee dated 15.07.2021 and order dated 24.07.2021 whereby, the e-tender dated 03.03.2021 has been cancelled and recalled by the respondents. Subsequent notice inviting tender dated 29.07.2021 issued by respondent No.2 is also sought to be quashed. Further prayer has been made to direct respondent No.2 to open the financial bid of petitioner in pursuance to notice inviting tender dated 03.03.2021.
::: Downloaded on - 31/01/2022 23:04:42 :::CIS -3-2. On 03.12.2020, Chief Engineer National Highways, Public Works Department, Himachal Pradesh ( for short, the Employer") issued Notice Inviting Tender .
(for short, "NIT") for work of improvement of road safety from km 200/00 to 219/350 of NH22 (New NH-05) Kalka-Shimla-Wangtoo Road in selected stretches in the State of Himachal Pradesh on EPC mode.
3. In pursuance to issuance of NIT, total six tenderers submitted their bids but none of the bids were found technically responsive. The Technical Evaluation Committee decided to cancel and recall the tender.
4. On 03.03.2021, second NIT was issued by the employer for the above noted work. The estimated cost of the work was Rs.8.04 crores. Total five bids were received by the employer including that of petitioner.
5. Except for the bid of petitioner, all other bids were found technically non-responsive. The Technical Evaluation Committee, however, on 15.07.2021 decided that since a single bid was successful in technical evaluation, it was necessary to recall and cancel the NIT ::: Downloaded on - 31/01/2022 23:04:42 :::CIS -4- in order to promote healthy competition in the similar nature of works
6. Aggrieved against the cancellation of NIT, .
petitioner preferred representations to the employer on 18.07.2021 and 24.07.2021 but without any result.
7. Petitioner having failed to get redressal of his grievance from respondents has approached this Court by filing instant petition. The action of respondents is alleged to be reflective of discriminatory and pick and choose policy. It has been averred that in identical circumstances respondent No.2 has awarded the work in the case of Thalout- Thachi-Somgad Road. Further case of the petitioner is that when the tender process is initiated second time, the respondents were under a mandate to consider the opening of financial bid even of a single successful bidder in terms of the instructions dated 27.04.2008 issued by Ministry of Road Transport and Highways, Government of India (for short, "MoRTH") to the Secretaries of State PWDs dealing with National Highways, Engineer-in-Chief/Chief Engineer of State ::: Downloaded on - 31/01/2022 23:04:42 :::CIS -5- PWDs dealing with National Highways besides others. As per the case of petitioner, the bid in question could not be termed to be a single bid only because out of five .
bidders only one had been found technically responsive.
The action of the respondent has been accused of being against public interest.
8. Per contra, respondents in their reply have defended their action on the ground that there was only single bid and their being no competition, the recalling of tender was necessitated to ensure the healthy competition amongst bidders.
9. We have heard learned counsel for the petitioner as also learned Advocate General for the respondents.
10. The work involved in the NIT pertains to improvement of Road Safety by provision of crash barriers on certain portions of NH-22 Kalka-Shimla-
Wangtoo Road under EPC Mode. The NIT was issued by the office of Chief Engineer National Highways HPPWD for MoRTH.
::: Downloaded on - 31/01/2022 23:04:42 :::CIS -6-11. The relevant extract of decision dated 15.07.2021 of the Technical Evaluation Committee (for short, TEC"), whereby the NIT was cancelled and recalled .
reads as under:-
"4. From the above summary it is evident that total five no bidders participated in this tender, out of which four bidders were found technically non- responsive and only one bidder was found technically responsive in this 2nd call for opening of financial bid. The above detail clearly imply that after the four bidders have been found technically non responsive, the tender has become single tender for opening of financial bid after technical evaluation. Hence keeping in view the above position and to promote healthy competition in the similar nature of works the committee decided to cancel and recall the instant tender".
12. Admittedly, the work offered through NIT is of MoRTH, which had called the bids through Chief Engineer NH HPPWD. The Ministry of Road Transport and Highways Government of India vide communication dated 27.04.2008 had issued instructions through the secretaries of State and Engineers-in-Chief/Chief Engineers of State PWDs dealing with National Highways, ::: Downloaded on - 31/01/2022 23:04:42 :::CIS -7- the relevant extract of which reads as under:-
"I am directed to say that as per the existing CVC guidelines, single tenders can be accepted only .
with detailed justification in support of the acceptance with the approval of Competent Authority including Associated Finance. In general, single tenders are not acceptable in first instance. However, it has been observed that the State PWDs are accepting rates on the basis of single tenders without observing the prescribed procedure, which is a violation of CVC Guidelines (copy enclosed).
2. It is, therefore, decided that the State PWD may cancel the single tender received in the first call without opening the bid and re-invited the tender. If single tender is received, even after re-tendering, the State PWD may give the detailed justification in support of the single tender indicating the importance of the work and award the work after obtaining approval of the competent authority and consulting the internal finance within the delegated power to the State Governments (when the estimated cost based on tendered value is within 5% above the original sanction cost). However, in no case the negotiation with the tender should be resorted to.
3. In case where the estimate cost based on ::: Downloaded on - 31/01/2022 23:04:42 :::CIS -8- tendered value is beyond 5% the original sanctioned cost and where revised estimate is required to be submitted, the State PWD may follow the above procedure and obtain Ministry's .
approval, for the Revised Cost Estimate before awarding the work.
4. This may be brought to the notice of all concerned for strict compliance".
13. Perusal of above noticed communication clearly reveal that in case of receipt of single tender even on second call after retendering, the State PWD has discretion to support the single tender on justifications and subject to the condition that estimated cost based on tendered value is within 5% above the original sanction cost.
14. The decision taken by the TEC, reproduced above, does not reflect any consideration of the discretion provided vide above noted instructions. There is also no reflection in the decision of TEC on the aspect as to why the instructions issued by MoRTH was not considered in this case.
15. Respondents have contended that this Court ::: Downloaded on - 31/01/2022 23:04:42 :::CIS -9- lacks jurisdiction to peep into matters which are in the realm of Government contracts. Reliance has been placed on judgments passed by Hon'ble Apex Court in MAA .
Binda Express Courier Vs North East Frontier Railways and others (2014) 3 SCC 760, STATE OF UTTAR PRADESH & ANR V/S AL FAHEEM MEETEX PRIVATE LTD & ANR, 2016 4 SCC 716 and STATE OF JHARKHAND & ORS V/S CWE-SOMA CONSORTIUM, 2016 14 SCC 172.
16. This Court is not oblivious to its power and jurisdiction while dealing with the Government contracts and the authority of the Government or Public Sector undertaking to recall and cancel the tenders. The power of judicial review of this Court, though restrictive in the matters of Government contracts, nevertheless exists in exercise of jurisdiction under Article 226 of the Constitution of India.
17. This Court can always evaluate the decision making, even in the matters of Government Tenders, to protect the aggrieved person against unreasonableness, ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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arbitrariness, bias and mala fides. In case any action of the authorities dealing with the Government contracts is found to be suffering from any or all of above noted vices, .
this Court will be failing in its lawful duties by not interdicting against such violations.
18. In Silppi Constructions Contractor vs. Union of India and another, (2020) 16 SCC 489, after taking into consideration catena of judicial precedents on the issue, Hon'ble Supreme Court, has held as under:-
"19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias.
However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of 12 2019 (6) SCALE 70 restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clearcut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of .
restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the .
contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, malafides or perversity. With this approach in mind, we shall deal with the present case."
19. The Hon'ble Apex Court has thus, reiterated the settled legal position that the bodies which are State within meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restrained and caution.
20. Their Lordships, after discussing law on the issue in detail, proceeded to scrutinize the facts involved in that case and then found that the ground for interference were not made out in the facts and circumstances of the case.
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21. Assessing the facts of the present case at the touch-stone of the settled legal position, we are of the considered view that the action of respondents in .
cancelling and recalling the tender NIT suffers from arbitrariness. The action that does not qualifying the test of reasonableness is arbitrary. When the respondents were under instructions to consider even single bids on certain justifications as detailed in instructions issued by MoRTH, noticed hereinabove, failure to do so that to without any justification is clearly unreasonable and hence arbitrary.
22. The reason, assigned by TEC, to promote healthy competition in the similar nature of works also appears to be unreasonable in the facts and circumstances of the case. TEC could have assessed the financial viability of petitioner's bid vis a vis MoRTH instructions, once the financial bid was opened. The work could only be awarded in case the bid submitted by the bidder was within limits prescribed by instructions supra. At the time of hearing of the matter, learned ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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counsel for the petitioner had argued with vehemence that had his financial bid been opened he would have qualified the test of justification required by the .
instructions aforesaid.
23. It has not been mentioned in its decision by TEC that how the evaluation of financial bid of petitioner would have affected healthy competition in the similar nature of works. Though, the TEC's order on this aspect is silent however, the respondents by way of instructions placed on record of the case have submitted details of three different works in which the petitioner was one of the bidders and his bids were much higher than the estimated cost of the works in all the cases. We fail to comprehend as to how this can serve the cause of respondents. All the works referred to by respondents, as above, were evaluated on 11.08.2021 and 24.08.2021 respectively whereas, the TEC had taken its decision on 15.07.2021 when it could not have assumed about the future happenings.
24. Petitioner has also alleged that the ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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respondents have adopted discriminatory and pick and chose policy. By way of example, the petitioner has referred to another instance of Thalout-Thachi-Somgad .
Road whereby respondent No.2 has awarded the work to a single tenderer in a case where bid was opened on second call after retendering. The allegations of petitioner are borne from the documents placed on record. Only two bidders submitted the bids for the work in that case and out of two one was found technically responsive and the Evaluation Committee had recommended the opening of financial bid of the only responsive bidder
25. Changeability in action, while dealing with identical situations echoes discrimination, which cannot be countenanced in a system governed by the rule of law.
26. Fairness is the hallmark of all public dealings.
The Public Authorities are under legal obligation to act in reasonable, fair and non-discriminatory manner. There action should be transparent so as to instill confidence in the public and the courts.
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27. Respondents have taken strong exception to the maintainability of the petition. It is contended with vehemence that this Court in exercise of jurisdiction .
under Article 226 of the Constitution of India would not interfere with pure administrative decisions of respondents which are without any bias and malafide.
28. Respondents have placed reliance on (2015) 13 SCC 233, Rishi Kiran Logistics Pvt. Ltd Versus Board of Trustees of Kandla Port wherein it has been held as under:
"29. It thus stands crystalized that by way of writ petition under Article 226 of the Constitution, only public law remedy can be invoked. As far as contractual dispute is concerned that is outside the power of judicial review under Article 226 with the sole exception in those cases where such a contractual dispute has a public law element."
29. In our considered view public law element is definitely present in the case under consideration. On one hand urgency in the execution of work has been repeatedly emphasised in successive NITs issued by respondents, on the other consequent delay in execution ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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thereof has been conveniently ignored. The work in question is of utmost importance for public safety. In addition, the delay in its execution will only add to .
escalation of project cost again putting public money to peril.
30. In the given facts of the instant case, we have no hesitation to hold that the action of respondent in denying the petitioner an opportunity to open his financial bid was not reasonable and hence arbitrary.
31. The petition is accordingly allowed. Decision dated 15.07.2021 of Technical Evaluation Committee, and decision dated 24.07.2021 of respondents to recall and cancel the NIT dated 03.03.2021 are quashed and as a consequence thereof subsequent NIT dated 29.07.2021 issued by respondents for the same work is also quashed. The respondents are directed to open the financial bid of the petitioner and to take final decision in accordance with the applicable laws, rules and instructions particularly instructions dated 27.04.2008 issued by Ministry of Road Transport and Highways, ::: Downloaded on - 31/01/2022 23:04:42 :::CIS
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Government of India to the Secretaries of State PWDs and Engineer-in-Chief/Chief Engineer of State PWDs dealing with National Highways. The petition is .
accordingly disposed of, so also, pending applications, if any.
(Tarlok Singh Chauhan) Judge (Satyen Vaidya) Judge 15th September, 2021 (tarun) ::: Downloaded on - 31/01/2022 23:04:42 :::CIS