Orissa High Court
Prafulla Kumar Pradhan vs State Of Odisha And Others on 3 November, 2016
Equivalent citations: AIR 2017 ORISSA 19, (2017) 1 ORISSA LR 108
Author: Vineet Saran
Bench: Vineet Saran
HIGH COURT OF ORISSA : CUTTACK
W.P.(C) No.4349 of 2016
In the matter of an application under Article 226 of the
Constitution of India.
AFR
-----------
Prafulla Kumar Pradhan ..... Petitioner
-Versus-
State of Odisha and others ... Opp. Parties
For Petitioner : M/s. S.K. Dash, A.K. Otta,
(Mrs.) A. Dhalsamanta, B.P. Dhal
and (Miss) S. Das, Advocates
For Opp. Parties : Mr. P.K. Muduli,
Addl. Govt. Advocate
[O.Ps. 1 to 3]
M/s. Barada Prasad Pattanaik,
Bhakti Prasad Pattanaik, B.S.
Raiguru and A.Mohanty Advocates
[O.P. 4]
M/s. S. Pani, S.S. Deo, K.C. Sethi
and I.J. Begum, Advocates
[O.P. 5]
---------------
P R E S E N T:
THE HONOURABLE THE CHIEF JUSTICE MR. VINEET SARAN
AND
THE HONOURABLE DR. JUSTICE B.R. SARANGI
Date of hearing: 26.10.2016 | Date of Judgment: 03.11.2016
2
DR. B.R. SARANGI, J. The Chief Engineer, Public Health (Urban),
Odisha, Bhubaneswar-opposite party no.2 floated a tender,
having distinct identification no. SEPHBBSR-04(2)/2015-16
dated 17.10.2015, inviting applications from the intending
bidders to participate in the national competitive bidding
through e-procurement for distribution system in connection
with water supply of Balugaon-Banapur N.A.C. through Salia
reservoir in conformity with the terms and conditions of the
tender call notice.
2. The petitioner, who was initially an 'A' Class
contractor and with valid licence, successfully executed similar
nature of work under the State and subsequently became a
special class contractor, having satisfied all the eligibility criteria,
submitted his application through e-procurement pursuant to
such advertisement. Along with the petitioner, opposite party
no.4 had also participated, but, he, having failed to satisfy the
eligibility criteria in terms of Sub-clause (i) of Clause (6) of the
brochure under Annexure-1, incurred disqualification.
Subsequently, on the representation of opposite party no.4, his
tender of was considered and he was selected for execution of the
work in question. Being aggrieved by such conduct of the
3
authorities, the petitioner has approached this Court by filing the
present writ petition.
3. Mr. S.K. Dash, learned counsel for the petitioner
specifically urged before this Court that opposite party no.4
submitted his tender paper without satisfying the eligibility
criteria, as required under Sub-clause (i) of Clause (6) of the
brochure. Though the intending bidders were required to have
commissioned similar nature of work valuing not less than
Rs.90.33 lakhs in any one year within the last five years, on
erroneous furnishing of information by opposite party no.4, even
if he was initially qualified in the technical bid, subsequently, by
virtue of the representation filed by opposite party no.4, his case
was taken into consideration and was selected for the work in
question by relaxing the terms and conditions of the tender call
notice, which amounts to mala fide exercise of power by the
authority. As such, the selection of opposite party no.4 is liable to
be set aside. It is further contended that the eligibility criteria
must satisfy the requirement of terms and conditions of the
contract and that the rule of game cannot be modified or altered
once it is started, in order to favour a certain person. Therefore,
he seeks for quashing of the selection of opposite party no.4.
4
4. Mr. P.K. Muduli, learned Addl. Government Advocate
appearing for the State, while refuting the contention of the
learned counsel for the petitioner, justified the action of the
authority in selecting opposite party no.4 for the work in
question. He further stated that no illegality or irregularity has
been committed by the authority in selecting opposite party no.4
to execute the work and, for that matter he has relied upon the
judgment of the apex Court in Sanjay Kumar Sukla v. M/s.
Bharat Petroleum Corporation Ltd. & Ors., AIR 2014 SC 3778
and stated that once the matter has been settled, the Court
should not interfere subsequently.
5. Learned counsel for opposite party no.4 supported the
contention raised by learned Additional Government Advocate
and stated that opposite party no.4 being the beneficiary of the
order passed by the State authority, and since in selecting
opposite party no.4 no illegality or irregularity has been
committed, this Court should not interfere with the decision
making process of the committee at this stage.
6. Mr. S. Pani, learned counsel for opposite party no.5
stated that opposite party no.5 was one of the participants in the
process of selection, who has not been selected by the opposite
5
parties no. 1 to 3, and being a participant he has been impleaded
as opposite party no.5.
7. Having heard learned counsel for the parties and
pleadings having been exchanged amongst them, with their
consent the matter has been heard and disposed of at the stage
of admission.
8. The undisputed facts are that opposite party no.2
issued a tender call notice inviting applications from the eligible
persons for the work "distribution system of Banpur NAC in
connection with water supply to Balugaon and Banpur NAC
from Salia reservoir". The bid was of two parts, namely, technical
bid as well as financial bid. As per the terms and conditions
mentioned in the tender call notice, minimum eligibility criteria
has been provided under Clause-6, which reads as follows:
"6. Minimum eligibility criteria:-
i) The Firms/Companies/Registered Contractors should
have successfully completed & Commissioned Works of
similar type valuing not less than Rs.90.33 Lakhs (30%
of the estimated cost) in any one year during the last 5
(five) years. However such similar type of works must
cover execution of lying of pipe line for water supply
purpose. The firm shall have to submit the performance
certificate of the works constructed by them for satisfactory
performance from appropriate authority means the Authority
not below the rank of Executive Engineer or equivalent of
Govt. of Odisha/any other State Govt./M.E.S./Central
govt./Railways/any other State and Central Govt.
6
Undertakings. Weightage @ 10% per year shall be given on
the value of the completed work in the p receding years.
ii) The Firms/Companies/Registered Contractors should
have annual financial turnover of not less than Rs.120.44
Lakhs (40% of the estimated cost) in any one year in
construction works during last 5(five) years and the turn over
need to be certified by Chartered Accountant. Weightage @
10% per year shall be given on the annual turnover of the
preceding years."
9. It is also undisputed that the petitioner, vis-à-vis
opposite parties no.4 and 5, participated in the said bid.
Opposite party no.4, having not satisfied the requirement under
sub-clause (i) of Clause-6 of the tender call notice, i.e.,
experience of commissioning the similar nature of work valuing
not less than Rs.90.33 lakhs (30% of the estimated cost) in any
one year during the last 5 (five) years, was totally disqualified by
the Technical Committee from participating in the technical bid.
10. Accordingly, the petitioner and opposite party no.5
were requested to attend the office of opposite party no.3 on
04.02.2016for opening of the financial bid. Even though the petitioner and opposite party no.5 appeared before opposite party no.3 on the date fixed, i.e., 04.02.2016, the financial bids were not opened. But, at about 6.50 P.M. of the same day, opposite party no.3 through e-procurement system informed the petitioner and opposite party no.5 that due to administrative 7 reason, the tender was revoked from Technical Evaluation to Technical Bid Opening, with the caption 'Intimation of, revocation of the tender'. When the petitioner came to participate in the financial bid, he made verification with regard to eligibility of opposite party no.4 and came to learn that the Technical Evaluation Committee had initially rejected the technical bid submitted by opposite party no.4, but on the basis of his representation made on 19.02.2016 his case was reconsidered.
11. On 23.02.2016, opposite parties no.4 and 5 along with the petitioner were called upon to participate in the financial bid at 11.30 P.M. on 24.02.2016. Therefore, the rejection of the technical bid of opposite party no.4 having been accepted by the authority, all the three persons, namely the petitioner, as well as opposite parties no.4 and 5 were called upon for opening of financial bid. Such step has been taken in order to accommodate opposite party no.4, who was found ineligible initially.
12. The petitioner made a grievance before the authority with regard to ineligibility of opposite party no.4. In response to the same, opposite party no.3, vide letter dated 16.12.2015, sought for an intimation from the Executive Engineer, RWS & S 8 Division, Puri regarding the authenticity of the experience certificate issued from his office vide letter dated 06.09.2014. On receipt of the same, opposite party no.3 stated that opposite party no.4 has completed the work for an amount of Rs.49,48,571/- in the financial year 2013-14. Thereby, opposite party no.4 was not eligible to participate in the bid, as he had not commissioned the work of similar type valuing not less than Rs.90.33 lakhs (30% of the estimated cost) in any one year during the last 5 (five ) years. On perusal of information provided by the Executive Engineer, R.W.S. & S Division, Puri vide Annexure-3 series containing the breakup of work done by opposite party no.4, it can be clearly seen that the opposite party no.4 has not satisfied the requirement as stipulated in Sub- Clause (i) of Clause-6 of the tender call notice.
13. In view of Clause 14.2 of the Notice Inviting Tender (NIT), the authority can amend the tender document only at the stage of submission of tenders. As such, there was no provision to revoke the process of tender from technical evaluation with a view to further scrutiny by the Technical Evaluation Committee and even include the bid which was once rejected. Once the bid submitted by opposite party no.4 was rejected, having not 9 submitted in conformity of sub-Clause (i) of Clause-6 of the tender document, subsequently, on submission of representation dated 19.02.2016, the Tender Committee considered the same in its 3rd sitting held on 22.02.2016 wherein it was unanimously decided that since there was an anomaly on the concept of "one year" in Clause-6(i) of the Detailed Tender Call Notice, the stipulation of "complete one year" would be considered as any of the following:
"(i) One Calendar year (1st January to 31st December).
(ii) One financial year (iii ) One year (365 days)"
Therefore, in order to broaden the scope of competition, opposite parties no.4 and 5 along with the petitioner were declared qualified, for opening of their respective financial bids on the next day i.e. 24.02.2016.
14. The clarification, which has been given in paragraph- 5 of the counter affidavit filed by opposite parties no.1 to 3, is not available in any of the terms and conditions of the tender document. The parties are bound to follow the terms and conditions mentioned in the tender call document, and subsequent clarification by way of an affidavit filed before this Court in shape of counter affidavit cannot sustain. This principle 10 has no more remained res integra in view of the law laid down by the apex Court in Mohinder Singh Gill and Another v. The Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851 placing reliance upon the earlier judgment of the apex Court in Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR (39) 1952 SC 16.
15. The factum that opposite party no.4 has incurred disqualification is based on materials available on record to the extent that the petitioner filed an application under the RTI Act, 2005 on 30.11.2015 and he lodged a complaint before the Committee on 01.12.2015 on the basis of information received under the RTI Act. It appeared that opposite party no.4 had stated to have completed the earlier work amounting to Rs.49,48,571/- on 12.03.2014, but the said work was completed on 12.07.2014. Further, on the basis of information provided by opposite party no.3 vide letter dated 16.12.2015, it appears that opposite party no.4 was not eligible in view of Clause 6(i) of the tender call notice and thereby initially Tender Evaluation Committee had rightly rejected the application submitted by opposite party no.4, while considering the technical bid, and subsequent inclusion of opposite party no.4 is in gross violation 11 of Clause-6(i) of tender call notice and, more so, the plea of broadening of scope of competition, as has been explained in paragraph-5 of the counter affidavit filed by opposite parties no.1 to 3, cannot be taken into consideration to make opposite party no.4 eligible to participate in the bid.
16. In Raman Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, the apex Court held that the words used in a document are not superfluous or redundant but must be given some meaning and weightage:
"It is a well-settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the Court should not be prompt to ascribe superfluity to the language of a document "and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use". To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. The court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable."
Xx xx xx "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 no difference whether the exercise of the power involves affectation of some right or denial of some privilege."12
The principle laid down above has also been reaffirmed by the apex Court in G.J. Fernandez v. State of Karnataka, (1990) 2 SCC 488.
17. In Tata Cellular v. Union of India, AIR 1996 SC 11:
(1994) 6 SCC 651, the apex Court gave importance to the lawfulness of a decision and not its soundness. If an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the Courts will not judicially review the decision taken.
Referring to Tata Cellular (supra), the apex Court in Jagish Mandal v. State of Odisha, (2007) 14 SCC 517 stated as follows:
"Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, 13 to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold."
Therefore, a Court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR
(ii) Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; (ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226."
These principles have been considered by the apex Court in detail in Central Coalfields Limited and Ors. v. SLL- SML (Joint Venture Consortium) and Ors. 2016(8) SCALE 99.
18. Applying the above noted principles to the present context, it is to be examined, whether the clarification given by opposite parties no. 1 to 3 in paragraph-5 of the counter affidavit to the meaning of "one year" as contemplated in Sub-clause (i) of Clause (6) of the DTCN, is justified, especially when the condition 14 stipulated in DTCN has not stated whether it is a calendar year or a financial year or 365 days. In absence of any specific clarification thereof, the provisions contained in sub-section-66 of Section-3 of General Clauses Act, 1897 would be taken into consideration, which reads as follows;
""Year" shall mean a year reckoned according to the British calendar"
19. Considering the definition of the 'year' as mentioned above, one year preceding five years under Sub-clause (i) of Clause (6) has to be construed that a year reckoned according to the British calendar, meaning thereby it should be from first January of a year ended with 31st December of the same year. Any subsequent clarification to this one year as 365 days or the financial year has no meaning at all, rather the same cannot be clubbed together to determine the eligibility of opposite party no.4 to participate in the technical bid.
20. The "one year" has to be construed as a calendar year, regardless whether it be a leap year or otherwise. The word 'year' has been considered in different context on the basis of the provisions contained under respective Acts. Meaning thereby a 'year' can be calendar year or a 'year' can be a financial year, but no where it has been stated that it should be 365 days. In 15 absence of any specific clarification given in detailed tender call notice, issued by opposite party no.2, the year can be construed as a financial year in view of definition of sub-Section 66 of Section 3 of the General Clauses Act, 1897.
21. The interpretation of 'year' had come up for consideration by the apex Court as contemplated under rule 26(1) of Orissa Services Engineers Rules, 1941 in Jagdish Ch. Patnaik v. State of Orissa (1998) 4 SCC 456 held the word 'year' occurring in Rule 26 of the Rules means calendar year. If the calendar year to be taken into consideration, the opposite party no.4 incurs a disqualification under Sub-clause (i) of Clause (6) of DTCN, otherwise, he is not eligible to be participated in the technical bid. In that view of the matter, this Court is of the considered view that consideration of the bid of opposite party no.4 by the Technical Evaluation Committee on his representation to make him qualify in the said bid, amounts to unreasonable and arbitrary exercise of power and as such, mala fide. In that view of the matter, the selection of opposite party no.4 to carry on the work also cannot sustain.
22. Much reliance has been placed on the judgments of Sanjay Kumar Sukla (supra) by Mr. P.K. Muduli, learned Addl. 16 Standing Counsel, the award of a contract, whether it is by essential commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations. The State can choose its own method of arriving at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. Even when some defect is found in the decision-making process, the Court must exercise its discretionary power with great caution and should exercise it only in furtherance of public interest and not merely on the making out of 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. There is no dispute at all with this proposition laid down by the apex Court.
23. In the present case, the bid of opposite party no.4 having been initially rejected for having not satisfied the eligibility criteria, as provided in Sub-clause (i) of Clause (6), his subsequent selection, by virtue of his representation to participate in the technical bid, and qualifying in the financial bid and consequential issuance of work order in his favour cannot be said to be in public interest, rather it is mala fide exercise of power by the authority and, more so, on the basis of 17 the tender call notice governing the field, when the authorities have acted upon same, subsequently they cannot change their stand, as it would be hit by the principle "once the game started its rule cannot be changed subsequently".
24. By giving relaxation to Sub-clause (i) of Clause (6) at the midst of the tender process, many other similarly situated persons have been debarred from participating in the tender process, as they found themselves ineligible to offer their bid when it was invited. If such subsequent relaxation is allowed to stand and benefit of such relaxation is extended to opposite party no.4 only, it would amount to unequal treatment in favour of opposite party no.4, which is unconstitutional and impermissible in law.
25. In view of aforesaid reasons, this Court is of the considered view that letter dated 04.02.2016 in Annexure-5 and consequential order dated 25.02.2016 cannot sustain in the eye of law. The same are hereby quashed. Consequentially, the selection of opposite party no.4 to execute the work pursuant to the tender call notice under Annexure-1 cannot be sustained and is also hereby quashed. It is open to the authorities to take 18 immediate steps for awarding the work and execution thereof in accordance with law.
26. The writ petition stands allowed. No order as to cost.
Sd/-
( VINEET SARAN ) CHIEF JUSTICE Sd/-
( DR. B.R. SARANGI ) JUDGE The High Court of Orissa, Cuttack Dated the 3rd November, 2016/Ajaya/Alok True Copy Sr. Steno