Bombay High Court
Shri Rajesh S/O Purushottam Mundhada vs The Collector, Amravati And Another on 17 September, 2019
Author: Sunil B. Shukre
Bench: Sunil B. Shukre, Milind N. Jadhav
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
WRIT PETITION NO.7138 OF 2018
Shri Rajesh s/o Purushottam Mundhada,
Aged abut 51 years, Occu.
Govt. Contractor, R/o Plot no.136,
Shriram Nagar, Behind Rathi Nagar,
Amravati, Tahsil and District Amravati. .. PETITIONER
Versus
1. The Collector, Amravati.
Tahsil & District Amravati.
2. The Municipal Council,
Chandur Railway, through
its Chief Officer,
Tahsil- Chandur Railway,
District Amravati.
3. Atul S/o Ganesh Shirbhate,
aged Major,
Occ. Business,
R/o Behind Hotel Nagasaki,
Chandur Railway, Tah.
Chandur Railway,
Dist. Amravati.
4. Bharat Nachankar,
Aged Major, Occu. Business,
R/o Gadgebababa Market Area,
Chandur Railway, Tah. Chandur
Railway, Dist. Amravati.
5. Bidoliwala Constructions, through its
Proprietor Manik Jallan, Aged - Major,
Occu. Business, R/o Near Ujambawadi,
Ambapeth, Amravati.
6. Rajabhau Dindekar,
Aged Majors,
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Occ. Business,
R/o Village Amla Vishweshwar,
Tq. Chandur Railway,
Dist. Amravati.
7. Naveen Tikhe,
Aged Major,
Occ. Business,
R/o Sabtabai Yadav Nagar,
Chandur Railway, Tq. Chadur
Railway, Dist. Amravati.
8. Srushti Constructions,
through its Proprietor Shailesh
Nannaware, Aged Major,
Occu. Business, R/o Sabtabai
Yadav Nagar, Chandur Railay,
Tq. Chandur Railway,
Dist. Amravati. ... RESPONDENTS
Mr. S.D.Chopde, Advocate for the petitioner.
Ms. K.R.Deshpande, AGP for respondent no.1.
Mr. M.I.Dhatrak, Advocate for respondent no.2.
Mr. L.H. Kothari, Advocate for respondent nos.3 to 8.
.....
CORAM : SUNIL B. SHUKRE AND
MILIND N. JADHAV, JJ.
DATE : 17.09.2019.
ORAL JUDGMENT : (PER SUNIL B. SHUKRE, J.)
1. Heard. Rule. Rule made returnable forthwith. Heard finally by consent.
2. This petition has been filed challenging the decision taken by the Municipal Council, Chandur Railway - respondent no.2 ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:24 ::: (J) wp7138.18 3 on 23.10.2018, which is reflected in multiple note-sheets of respondent no.2 - Municipal Council, having effect of rejection of bid of the petitioner. It so happened that by two tender notices issued on the same date of 12.07.2018, online applications were invited for carrying out the works detailed in these tender notices from the eligible Contractors. The total works mentioned in two tender notices pertained to different works of the Municipal Council and they were numbering 32 in total. They related to construction of cement concrete roads, washrooms, carrying out various civil repairs, tiling of existing drainage, construction of new drainage, repairs to the existing roads, tarring of some roads and beautification of some places mentioned in the notices. The online application forms were to be submitted from 16.7.2018 and the last date for submission of the online forms was of 6.8.2018. The online forms were to be submitted with two envelops; one for technical bid and the other for financial bid. In the tender notices published online certain conditions were mentioned. Condition no.18 stated that the bidders, whose bids were below the minimum price fixed in the tender notices, would have to comply with condition of Clause no. 4.6.3 of the Government Resolution dated 12.4.2017. Condition no.4.6.3 of this G.R., stipulated that if the price bid was below the minimum price, performance security through a bank guarantee or ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:24 ::: (J) wp7138.18 4 demand draft or FDR of amount calculated at the rate prescribed therein would have to be submitted. This condition, as seen from the G.R., is of mandatory in nature.
3. It is the contention of the petitioner that online tender applications did not have any column or facility for submitting online the performance security, as prescribed in the G.R., and, therefore, the online tender form was submitted by the petitioner without any such performance security on 3.8.2018, well before the deadline set for submission of the tender forms. Respondent nos.3 to 8 also submitted similarly their respective tender forms.
4. The petitioner and also respondent nos.3 to 8 having submitted their respective tender forms online before the expiry of the last date of the submission, were set for the next stage, which arrived on 13.8.2018 and 14.8.2018. On these dates, their technical bids were opened and they were found to be qualified for the next round, which was of opening of the financial bids. The financial bids were opened on 28.8.2018. It was noticed that none of these bidders had submitted the performance security although, they were required to comply with Clause 4.6.3 of the G.R. dated 12.4.2017, their bids being within the range prescribed in Clause 4.6.3.
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5. It is the contention of the learned counsel for the petitioner that the petitioner was the lowest of all bidders at least in 28 tendered works out of 32 works and yet, he has been treated with discrimination and other successful bidders have been given advantage over and above him by departing from the procedure. He submits that while the other successful bidders have been given an opportunity to fill up the lacuna, same opportunity has been denied to the petitioner and thus, the petitioner has been treated unequally and arbitrarily, thereby violating the mandate of Articles 14 and 21 of the Constitution of India. The learned counsel for the petitioner relies upon admissions given by officers of respondent no.2, which have appeared in their internal note-sheets.
6. The learned AGP appearing for respondent no.1 submits that upon receipt of the representation of the petitioner, the Collector, Amravati, has already directed respondent no.2 to inquire into the matter and take appropriate steps, however, respondent no.1 has not so far received any response from respondent no.2.
7. The learned counsel for respondent no.2 submits that although, it is true that none of the successful bidders had submitted along with the online form the performance security, an ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:24 ::: (J) wp7138.18 6 opportunity was given to all of them including the petitioner to fill up the lacuna later on, which was removed by all other successful bidders but, for the petitioner. He submits that the petitioner as well as other successful bidders were orally communicated about the need for their submitting performance security in compliance with the requirement of Clause 4.6.3 of the G.R., dated 12.4.2017 and except for the petitioner, the compliance did come forth from all the remaining successful bidders. The learned counsel for respondent no.2 also invites our attention to one letter written by the petitioner to respondent no.2 and submits that this letter only displays the attitude of the petitioner and it is of complete non-cooperation in the matter. Based on this letter, his argument is that the petitioner had stipulated some conditions for his submitting performance security and, therefore, such a bidder should not be granted any assistance by this Court.
8. The learned counsel for respondent nos.3 to 8 submits that the problem faced by the petitioner, is his own creation. Just like respondent nos.3 to 8, the petitioner was also informed of the requirement of submission of performance security, but, the petitioner did not respond in any manner. He submits that reason for the same was perhaps the huge amount that was required for submission of performance security, which the petitioner was not ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 7 willing to bear. He also submits that so far as respondent nos.3 to 8 are concerned, almost all of them promptly complied with the requirements of security and now, the work orders have been issued to them in pursuance of which all of them have also commenced respective works incurring huge liabilities. Thus, the learned counsel for the respondents submits that now, no interference should be made in the tender process, as it would amount to making interference with the works.
9. The challenge raised in this petition primarily revolves around the arbitrariness of the procedure adopted in this case by respondent no.2 in processing the bids and taking a decision for allotting the contractual works. Although, there can be no dispute about the condition of Clause 4.6.3 prescribed in the Government Resolution dated 12.4.2017 and its applicability to the present tender works, the fact remains, an admitted one that no facility whatsoever was created and provided for in the online application form designed by respondent no.2 and with the result that neither the petitioner nor respondent nos.3 to 8 nor any other bidder could comply with this clause before expiry of the deadline of 6 th August 2018. To top it all, the condition so prescribed as per the G.R. dated 12.4.2017, and it is stated in clear words in Clause 4.6.3, is mandatory in nature. We have already noted in the earlier ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 8 paragraphs, the gist of the condition. But, for the sake of convenience, we would reproduce this condition prescribed in the G.R. issued in Marathi language now and it reads thus:
ß4-6-3 izkIr fuEure fufonspk nsdkj fufonk/khu dkekP;k fderhis{kk 10 % is{kk tkLr njkus deh vlsy rj nsdkj 10 % is{kk tso<;k tkLr njkus vkgs rso<;k jdespk o ojhy ckc&2 izek.ks cWadsph izfriwrhZ geh fufonslkscr fyQkQk dzekad 2 e/;s lknj djkoh ¼mnk-
14% deh nj&10% Ik;Zar djhrk&1% o¼14%&10%½& 4% vls ,dw.k 5%½- gh jDde #i;s 1000@& is{kk deh vlY;kl fdeku #i;s 1000@& ¼,d gtkj½ ph cWadsph izfriwrhZ geh lknj dj.ks vfuok;Z jkghy-Þ
10. It is clear from even a cursory reading of the condition that, if the bids submitted by the bidders were below the minimum fixed price, the bidders would be mandatorily required to also submit performance security of the amount to be calculated at the rates prescribed in the condition. The condition being mandatory and all the bids submitted in this case being within the stipulated range, the bidders could not escape from this condition. Importance of this condition was also known to respondent no.2 which is now very much banking upon this condition to put up all its resistance to the challenge raised in this petition. Yet, respondent no.2 became oblivious of this condition, when it prepared or got prepared the format of online tender application form and put it to use. The ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 9 online tender application form did not contain any provision and facility for complying with this condition and so all the bids were submitted, and they were below minimum fixed price, sans any performance security document in the nature of bank guarantee or demand draft or FDR. These facts are not in dispute.
11. In these circumstances, it was necessary for respondent no.2 to have cancelled the whole tender process and initiated new tender process. But, respondent no.2 chose to go ahead with it and it appears to us that it selectively informed some of the bidders about the requirement of the compliance with the said condition and it also appears to us that it chose not to inform the petitioner of the same requirement. Respondent no.2 also gave more time to all other bidders to comply with the requirement and as the petitioner was never informed, there was no question of granting extension of time to him. Of course, learned counsel for respondent no.2, submits that respondent no.2 through its some Officer, whose name has not been informed to us in-spite of our demand, orally communicated about the opportunity and time given by respondent no.2 to all the bidders including the petitioner for furnishing of bank guarantee or demand draft or FDR towards performance security. This has been already seriously disputed by the petitioner though, the learned counsel for respondent nos.3 to 8 supports the ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 10 stand taken by learned counsel for respondent no.2. We do not understand, in tender matters and especially when the tender process is undertaken online and digitally, as to how any Officer of Municipal Council like respondent no.2 could orally communicate the need for making mandatory compliances to the qualified bidders. In such tender process, there is no scope left for any oral communications and oral orders and whatever has to be done, it must be done through communications made in writing or made digitally, so that no scope is left for nurturing any doubt about the transparency, of the tender process. If this is not done, there would be unnecessary suspicion, there would be tongues rolling spitting muck against the officers and attributing ill to the concerned Officers. We feel that under no circumstances method of oral communications of matters which are fundamental to the process or which go to the root of the process be resorted, in the interest of transparency, good governance and public interest. In any case, respondent no.2 or for that matter, respondent nos.3 to 8 have not produced on record any reasonable proof of the petitioner having received the alleged oral communication. So, the argument made about oral communication is rejected and it would lead to the conclusion that the petitioner has been unfairly and discriminatingly treated by respondent no.2. In other words, the petitioner has been ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 11 singled out from amongst all the successful bidders, in order to keep him out of tender process in an arbitrary manner, for reasons best known to respondent no.2, which has resulted in violation of the principles of equality and rule of law running like a thread through the Articles 14 and 21 of the Constitution of India.
12. Learned counsel for the petitioner has invited our attention to the internal note-sheets of the various officials of respondent no.2, who were involved in the current tender process.
Copies of the internal note-sheets are available in the paper book at pages 32 to 43. Learned counsel for the petitioner, relying upon these note-sheets, submits that copies of these note-sheets have been obtained by the petitioner, under the provisions of the Right to Information Act and thus, it could be said that these documents having been supplied by respondent no.2 itself would bind it for whatever has been written therein by its officials. In fact, these note-sheets have not been disputed by respondent no.2 and, in any case, copies of these note-sheets having been supplied by respondent no.2 itself, could not have been denied by it. So, the contents of the note-sheets could be used by us for making our determination of the issue involved here.
13. A reading of these note-sheets gives us sufficient ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 12 insight into what has gone into the tender process. They contain various admissions, which go to show that the officials involved in the tender process have committed a mistake in processing the tender process. They have candidly admitted that online application form prepared by the Municipal Council did not contain any provision for online submission of the performance security. They also admit that none of the successful bidders at the time of online submission of the application forms, had submitted the performance security and none of them had furnished it on or before 6.8.2018, the deadline prescribed for submission of the application forms along with all mandatory required documents. At this juncture, it may be noted that application forms were to be submitted only online and there was no provision made for submitting hard copies of application forms. It is also admitted that later on, except for the petitioner, the other successful bidders submitted performance security by furnishing demand drafts of the requisite amounts and, therefore, their applications were processed. These admissions clearly show that mandatory procedural requirements have been flouted in this case by respondent no.2 and the requirements were allowed to be complied with selectively by some of the successful bidders but not the petitioner. No explanation making sense has been given as to why the petitioner was deprived of the opportunity, ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 13 at par with the other successful bidders, to comply with the mandatory requirement of the G.R., dated 12.4.2017. One explanation that was given related to the non-cooperative attitude of the petitioner in this regard but we find no substance in it. We have found that basically no communication to the petitioner regarding giving of further opportunity to him to make compliance has been made by respondent no.2 and as such no issue of non- cooperation of the petitioner would arise. If any issue is there, it is of giving of step motherly treatment to the petitioner.
14. There is one more reason, which would bolster up our aforestated conclusion. There is a copy of the letter dated 4.8.2018 sent by the petitioner to respondent no.2, which was received by respondent no.2 on 8.8.2018. By this letter, the petitioner had informed respondent no.2 that as there was no provision made by way of creation of an appropriate option regarding submission of performance security, it was not submitted by him and so, the petitioner further informed that, if required by respondent no.2, he would furnish the performance security. This letter has been sought to be interpreted by learned counsel for respondent no.2, as amounting to adamant attitude of the petitioner. We respectfully disagree with him. This letter when read in its entirety would show that it discloses the reason that led the petitioner to not furnishing ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 14 the performance security at the time of submission of this online form and giving willingness of the petitioner to furnish the same, if it required. The words, "if so required" have been taken by respondent no.2 as the non-cooperation of the petitioner in the matter. We find that these words were necessary to be mentioned in the letter, in view of the fact that the online application forms did not have any option for submission of the performance security thereby giving rise to a reasonable impression that this requirement must have been done away with by respondent no.2. But, to be on the safer side, the petitioner has written this letter to respondent no.2 wherein he has only said that, if found necessary, by respondent no.2 that he would submit the performance security. But, the good faith shown by the petitioner has been taken otherwise by respondent no.2, perhaps for some reason of personal nature, which has not come to the fore. No person of prudence and ordinary common sense would read this letter the way respondent no.2 has chosen to read it here. This only shows some deep prejudice of respondent no.2 against the petitioner.
15. Be that as it may, we find that the letter dated 4.8.2018 clearly shows the willingness of the petitioner to comply with the requirement of Clause 4.6.3 prescribed in the G.R. dated 12.4.2017 ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 15 and it also shows that such willingness of the petitioner was very well known to respondent no.2. But, respondent no.2 did not think it fit to give any response to this letter. In fact, this letter had been sent by the petitioner on 4.8.2018, at least two days before the expiry of the deadline of 6.8.2018 and this fact necessitated respondent no.2 to have responded one way or the other, in written form, to the petitioner. That was not done by respondent no.2 and no explanation in this regard has been furnished by respondent no.2.
16. Thus, we find that the entire tender process carried out by respondent no.2 is hit by arbitrariness and also discriminatory treatment unreasonably handed out to the petitioner by singling him out from amongst all these successful bidders. In this way, the petitioner, in an arbitrary and irrational manner has been driven out of competition amongst the successful bidders making the competition unhealthy to the larger public interest. So, this is not a mere case of some procedural aberration or minor deviation from the requisite procedure but, a case wherein public interest has also been largely affected. After all, the petitioner was the lowest bidder for at least of 28 out of 32 contractual works and this fact is not in dispute. In such a case, it was all the more necessary for respondent no.2 to have given opportunity to the petitioner in the same manner ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 16 as respondent no.2 selectively gave it to other successful bidders like respondent nos.3 to 8 for making compliance with the requirements of Clause 4.6.3 of the Government Resolution dated 12.4.2017. But, the equal opportunity for the petitioner was put at bay by respondent no.2.
17. Afore-stated findings have been recorded by us being fully conscious of the settled principles of law that govern contractual matters like award of contracts through the tender process. These principles of law, settled long back, have been reiterated by the Hon'ble Apex Court in various cases, some of which are the cases like Tata Cellular Vs. Union of India (1994) (6) SCC 651 and Jagdish Mandal Vs. State of Orissa and others : (2007) 14 SCC 517. The principles of law stated in the case of Tata Cellular (supra) have been reiterated in the case Jagdish Mandal (supra), in paragraph 21.2. It is reproduced thus:
"In Tata Cellular v. Union of India this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus :
"(1) The modern trend points to judicial restraint in administrative action. (2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 17
(3) The Court does not have the expertise to correct the administrative action. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (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.
More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facets pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
This Court also noted that there are inherent limitations in the exercise of power of judicial review of contractual powers. This Court also observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14".
18. We find that the arbitrariness and irrationality seen in the decision taken in the present case attracts the aforestated principles of law and, therefore, we further find that this is a fit case ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 18 for making interference with the impugned decision.
19. The learned counsel for respondent nos.3 to 8 submits that after vacating of the interim stay by this Court on 6.8.2019, Work Orders came to be issued and the tendered works have also been started by respondent nos.3 to 8 and, therefore, if any, interference, this stage, is to be made, respondent nos.3 to 8 would suffer considerable loss. We have been informed by learned counsel for the petitioner that "Bhumipujan" or inaugural ceremony has been performed very recently on 14.9.2019 and that too in respect of only 22 works out of 32 tendered works and so, the loss would not be considerable. Then, we have already found a patent illegality as well as arbitrariness and irrationality in taking the impugned decision and, therefore, if no interference is made, it would amount to continuation of the illegality, arbitrariness and irrationality and public interest would suffer irreparably. On the other hand, if any, loss is incurred by the contractors to whom some of the works have been allotted, they would have remedy before the appropriate forum to seek compensation against the officials of respondent no.2, who have done such illegalities and arbitrariness. We further find that, if any, loss is caused to the Municipal Council, by virtue of cancellation of the present tender process and initiation of fresh tender process for allotment of the subject works, the loss ::: Uploaded on - 23/09/2019 ::: Downloaded on - 19/04/2020 08:21:25 ::: (J) wp7138.18 19 occurred and the costs to be incurred could also be recovered by fixing responsibility on the erring officers through conduct of appropriate enquiry which could be done by a district level representative of the State Government like the Collector, Amravati- respondent no.1.
20. In the result, we find that this petition deserves to be allowed and it is allowed accordingly. The impugned decision rejecting the bid of the petitioner is hereby quashed and set aside. The tender process initiated for carrying out of the works involved in this petition is also hereby quashed and set aside. Respondent no.2 is directed to initiate fresh tender process for carrying out the works involved in the petition, if it so desires, in accordance with law. If a decision for initiation of fresh tender process is taken and the tender process is to be undertaken digitally or online, respondent no.2 shall publish on its website or on the concerned website of the State Government all the conditions of the tender notice and also all the applicable G.Rs.
21. Rule is made absolute in these terms with no order as to costs.
JUDGE JUDGE
ambulkar
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