Jharkhand High Court
M/S. Vinod Kumar Jain vs The State Of Jharkhand Through The ... on 14 January, 2020
Author: Rajesh Shankar
Bench: Rajesh Shankar
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No.5408 of 2019
With
W.P.(C) No.5416 of 2019
With
W.P.(C) No.5689 of 2019
With
W.P.(C) No.5894 of 2019
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M/s. Vinod Kumar Jain. .......... Petitioner(s).
[In W.P.(C) Nos.5408, 5416 & 5894/2019]
RAMIYA-HS (JV). .......... Petitioner.
[In W.P.(C) No.5689/2019]
-Versus-
1. The State of Jharkhand through the Principal Secretary, Road Construction Department, Government of Jharkhand, Ranchi.
2. The Engineer-in-Chief, Road Construction Department, Government of Jharkhand, Ranchi.
3. The Chief Engineer (Commercial), Road Construction Department, Government of Jharkhand, Ranchi.
4. The Executive Engineer, Road Construction Department, Road Division, Garhwa.
5. M/s. Agrawal Global Infratech Private Limited, through its Managing Director, having its office at C/2, 101, Aishwarya Chambers, G.E. Road, Telibandha, Raipur-492001 (Chhattisgarh).
.......... Respondents.
[In W.P.(C) No.5408/2019]
1. The State of Jharkhand through the Principal Secretary, Road Construction Department, Government of Jharkhand, Ranchi.
2. The Engineer-in-Chief, Road Construction Department, Government of Jharkhand, Ranchi.
3. The Chief Engineer (Commercial), Road Construction Department, Government of Jharkhand, Ranchi.
4. The Executive Engineer, Road Construction Department, Road Division, Garhwa.
5. M/s. N.G. Projects Limited, through its Managing Director, having its office at N.G. Circle, Mehtapura Himatnagar, P.O. & P.S. Himatnagar, District Sabarkantha-383001 (Gujarat).
.......... Respondents.
[In W.P.(C) No.5416/2019]
1. The State of Jharkhand.
2. The Principal Secretary, Road Construction Department, Government of Jharkhand, Ranchi.
3. The Engineer-in-Chief, Road Construction Department, Government of Jharkhand, Ranchi.
4. The Chief Engineer, Road Construction Department, Government of Jharkhand, Ranchi.
5. The Superintending Engineer, Road Construction Department, Road Construction Division, Garhwa.
6. The Executive Engineer, Road Construction Department, Road Division, Garhwa.
27. M/s. Agrawal Global Infratech Private Limited, c/o Principal Secretary, Road Construction Department, Government of Jharkhand, Ranchi.
.......... Respondents.
[In W.P.(C) No.5689/2019]
1. The State of Jharkhand through the Principal Secretary, Road Construction Department, Government of Jharkhand, Ranchi.
2. The Engineer-in-Chief, Road Construction Department, Government of Jharkhand, Ranchi.
3. The Chief Engineer (Commercial), Road Construction Department, Government of Jharkhand, Ranchi.
4. The Executive Engineer, Road Construction Department, Road Division, Garhwa.
.......... Respondents.
[In W.P.(C) No.5894/2019]
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CORAM : HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioner(s) : M/s Sumeet Gadodia, Advocate [In W.P.(C) Nos.5408, 5416 & 5894/2019] For the Petitioner : Mr. Krishna Murari, Advocate [In W.P.(C) No.5689/2019] For the State : Mr. Ajit Kumar, A.G. For Respondent no.5: Mrs. Ritu Kumar, Advocate [In W.P.(C) No.5408 & 5416/2019]
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Order No.08 Date: 14.01.2020
W.P.(C) No.5408 of 2019:
1. The present writ petition has been filed by the petitioner Vinod Kumar Jain (hereinafter to be referred as P-1) for quashing of the decision of the Tender Committee dated 03.10.2019 as uploaded in Form No.5B by respondent no.4 to the extent the technical bid of the P-1 has been declared as non-responsive to Clause 16.3 of the Instructions to Bidders (ITB) to Standard Bidding Document (SBD) in respect of the work pertaining to "Reconstruction of Meral-Bana-Ambakhoriya Road (MDR-140) (hereinafter to be referred as W-1). Further prayer has been made for issuance of direction upon the respondent-State of Jharkhand to declare the technical bid of the P-1 as responsive and consequently to open the price bid of the P-1 and award the work in question to it by issuing of Letter of Intent/Work Order if the petitioner's financial bid is found to be the lowest.
2. The factual background of the case as stated in the writ petition is that the respondent-State of Jharkhand vide e-Tender Notice dated 07.06.2019 invited tenders for Reconstruction of Meral-Bana- Ambakhoriya Road. The P-1 participated in the said tender namely W-
31 and as per Clause 16 of the ITB to Standard Bidding Document (in short to be referred as SBD) of the said tender, submitted requisite bid security of Rs.133.58 lakhs by way of bank guarantee in the format as prescribed in the SBD. However, the said e-Tender was cancelled by the State respondents vide notice dated 20.08.2019 issued by the respondent no.4 and the original bank guarantee submitted by the P- 1 was returned back to it. Thereafter, a fresh e-Tender notice dated 20.08.2019 was issued for the same work with a similar condition contained in Clause 16 of the ITB to SBD to furnish a bid security of Rs.133.58 Lakhs. Pursuant to the 2nd Call tender dated 20.08.2019, the P-1 again participated in the said tender process and submitted the same bank guarantee after getting it amended by its banker. However, the technical bid of the P-1 was declared non-responsive by the Tender Evaluation Committee of the respondent authorities on the ground that its bid was non-responsive to Clause 16.3 of the ITB to SBD. The P-1, having come to know about the said fact, filed representation before the respondent no.3 on 04.10.2019 requesting therein to revise the decision taken by the Tender Evaluation Committee, however the respondents did not pay any heed of the same.
W.P.C No. 5689 of 2019:
3. The present writ petition has been filed by RAMIYA-HS(JV) (hereinafter referred as P-2) for quashing the Government e-Procurement System Tender Summary Report in connection with NIT No.RCD/Garhwa/726/19-20(2nd Call) dt.20.08.2019 for award of contract for construction of Meral-Bana-Ambakhoriya Road (MDR-140) (W-1) (Length-0.00 to 36.629 Km) dated 07.10.2019 along with appendix thereof at serial no.7 qua the petitioner RAMIYA-HS(JV) (70:30), Gaya whereby it has been declared non-responsive in technical bid due to alleged non satisfaction of clause 2.7.1(ii) of the Addendum/Amendments to the Instruction to Bidders (ITB) to SBD.
Further prayer has been made for issuance of direction upon the State respondents to declare the technical bid of P-2 as responsive as it satisfied all the criteria of the SBD and consequently to open the Financial Bid of the P-2 as well as to declare it L1 in as much as it has quoted the bid price of Rs.107,55,36,040.91/- as against the minimum 4 bid price quoted by one M/s Agrawal Global Infratech Private Limited @ Rs.111,78,68,989/-.
4. The factual background of the case as stated in the writ petition is that the P-2 has been formed by way of Joint Bidding Agreement dated 02.09.2019 to participate in the 2nd Call tender dated 20.08.2019 for the work W-1. As per the joint venture agreement and the power of attorney executed by and between the parties of joint venture M/s RAMIYA Construction Pvt. Ltd. has been designated as lead partner with power of attorney to conduct, participate and transact in the entire tender process through its one of the Directors namely Mr. Vineet Yadav. The P-2 thereafter participated in the said tender but its technical bid was rejected being non-responsive to Clause 2.7.1(ii) of the amended ITB to SBD.
W.P.(C) No. 5416 of 2019:
5. The present writ petition has been filed for quashing/setting aside the decision of the Tender Committee dated 03.10.2019 as uploaded in the Form No.5B by respondent no.4 to the extent the technical bid of the P-1 has been declared as non-responsive to Clause 16.3 of the ITB to SBD in respect of the work pertaining to "Reconstruction of Nagaruntari-Dhurki-Ambakhoriya Road (MDR-139)" (hereinafter referred as W-2). Further prayer has been made for issuance of direction upon the respondent-State of Jharkhand to declare the technical bid of the P-1 as responsive and consequently to open its price bid and award the work in question in its favour by issuance of Letter of Intent/Work Order if the petitioner's financial bid is found to be the lowest.
6. The factual background of the case as stated in the writ petition is that respondent-State of Jharkhand vide e-Tender Notice dated 07.06.2019 invited tender for the said work i.e. W-2 and as per Clause 16 of the ITB to SBD of the said tender, the petitioner submitted the requisite bid security of Rs.105.72 lakhs by way of bank guarantee in the requisite format as prescribed in the SBD. However, the said e-Tender Notice was cancelled by the respondents vide notice issued by respondent no.4 dated 20.08.2019 and the bid security of the P-1 was returned. Thereafter, it issued a fresh e-Tender notice for the same work with similar conditions for furnishing the bid security of Rs.105.72 Lakhs as prescribed under Clause 16 of the ITB to SBD. The P-1 again 5 participated in the said tender and submitted the amended bank guarantee. However, the Tender Evaluation Committee of the respondents declared the bid of the petitioner as non-responsive to Clause 16.3 of the ITB to SBD and the summary of the decision of the Tender Evaluation Committee was uploaded in the website of the respondent-authorities under the signature of the respondent no.4 in Form No.5B. The P-1, after having come to know about the decision of the Tender Evaluation Committee, filed a representation before the respondent no.3 on 04.10.2019 requesting the respondent no.3 to revise the decision taken by the Tender Evaluation Committee and declare the bid of the P-1 as technically responsive, however the respondents did not pay any heed to the representation of the P-1. W.P.C No. 5894 of 2019:
7. The present writ petition has been filed for quashing the e-Tender notice dated 26.10.2019 being 3rd Call tender issued by the respondent-State of Jharkhand pertaining to "Reconstruction of Dandai Bazar to Panghatwa P.W.D Road via Lawahikala Road (total length 10.05 km) (hereinafter referred as W-3) as the same has been issued after cancelling 2nd Call tender dated 26.08.2019 is a most arbitrary and unreasonable manner vitiated by mala fide and malice in law against the P-1. Further prayer has been made for issuance of direction upon the State respondents to issue letter of acceptance (LoA) and enter into consequential agreement with the P-1 pursuant to e-tender notice dated 26.08.2019 being 2nd call tender for the said work especially because the P-1 was declared both technically and financially qualified in respect of the said tender and the P-1 was even declared as the lowest bidder in respect of said tender.
8. The factual background of the present case as stated in the writ petition is that the respondent-State of Jharkhand through the Executive Engineer initially issued e-Tender Notice dated 07.06.2019 inviting eligible bidders for undertaking the work W-3 wherein the P-1 participated and submitted the bid security in terms of Clause 16 of the tender document, however the said tender notice was cancelled.
Thereafter, 2nd call tender notice dated 26.08.2019 was issued wherein the P-1 again participated and submitted the amended Bank Guarantee. The technical bid of the P-1 was accepted by the State respondents and thereafter its financial bid was opened and the State 6 respondents declared the bid of the P-1 as the lowest, the details thereof was uploaded in the official website of the State respondents in the form of BOQ summary details. The respondent no.4 vide letter no.972 dated 16.10.2019 invited the P-1 for finalization of tender and it is in that background that rate justification was sought for from the P-1 for execution of the said tender in question. The P-1 also submitted its rate justification with the respondent no.4 vide letter dated 20.10.2019 and kept waiting for issuance of LoA. However suddenly the State of Jharkhand floated another e-tender notice dated 26.10.2019 being 3rd call tender for the said work i.e. W-3. No order/decision has been uploaded by the respondents in its official website cancelling the 2nd Call tender dated 26.08.2019 but in view of the fact that 3rd Call Tender for the said work has been issued, it reveals that 2nd Call tender has been cancelled by the State of Jharkhand.
9. The learned counsel appearing on behalf of the P-1 submits that the P-1 submitted the requisite bank guarantee of the bid security amount as prescribed in the SBD and the same was in the requisite format as prescribed in the SBD. However the respondents in a most arbitrary manner rejected the technical bid of the petitioner allegedly being non- responsive to Clause 16.3 of the ITB to SBD. It is further submitted that the decision of the Tender Evaluation Committee was not furnished to the P-1 and no further reason was explained to it as to how its bank guarantee was not in the requisite format as prescribed under the SBD. It is also submitted that for the work W-3 also, the P- 1 after cancellation of the first e-tender, furnished the amended bank guarantee to the respondent authorities in the second call tender and in the evaluation by the tender committee, its bid was held responsive and further decision was taken to open the financial bid and later on its financial bid was declared as the lowest. Thus it would be evident that the State respondents, in the matter of evaluation of the tenders invited by them, have adopted completely contrary stand disqualifying one or the other bidder dehors the terms and conditions of the SBD. So far as W-1 and W-2 are concerned, the P-1 followed the same practice as was followed in the tender W-3 but the State respondents adopted completely different stand in the tender W-1 and W-2 which is not permissible in the eye of law. It is further submitted that the 7 technical bid of the P-1 has been declared as non-responsive by the State respondents in a most arbitrary and whimsical manner de hors the terms and conditions of the Tender Document with a view to favour one or the other bidder who participated in the tender process. It is further submitted that the financial bid of the P-1 is lower than the successful bidder i.e. respondent no.5 thus the petitioner is entitled for allotment of work in its favour being the lowest bidder. It is further submitted that due to the action of the State respondents in rejecting the technical bid of the P-1 in a most arbitrary manner, even larger public interest is being affected putting extra burden on the State exchequer. The petitioner is ready and willing to execute the work W- 1 at a much lesser price than that quoted by the lowest bidder i.e. the respondent no.5.
10. The learned counsel for the P-1 further submits that the P-1 has downloaded the copies of the Bank Guarantee of the other four bidders whose technical bids were declared responsive. It would be evident from the technical bid of the respondent no.5 who was also declared the lowest bidder that its Bank Guarantee incorrectly spells the name of the employer's representative and instead of the name of the Executive Engineer, Road Construction Department, Road Division, Garhwa, the Bank Guarantee has been issued in the name of Executive Engineer, Road Division, Garhwa. Further, the Bank Guarantee of M/s N.G Projects Ltd. was also not in proper format and in the bid document, an additional condition has been incorporated wherein the employer has reserved its right to get the Bank Guarantee extended and notice for such extension to the Bank has been waived. The substantive condition has also been changed in the Bank Guarantee of M/s N.G Projects Ltd. and it has been mentioned that the Bank Guarantee can be extended only at the "Banker's sole discretion." It is further submitted that the Bank Guarantee submitted by M/s M.G Contractors Private Limited as well as M/s RKC Infra-built Private Limited would show that the same were exactly in the same format to that of the petitioner but those bank guarantees were accepted. It is further submitted that though there was error in the amount mentioned in word in the covering letter of the Bank, but in the amended Bank Guarantee there is no such error. There was no condition in the SBD that Bank Guarantee cannot be of an anterior 8 date. The only condition was that the Bank Guarantee submitted by way of a Bid Security shall be valid for 45 days beyond the validity of the Bid. The Bid Validity was prescribed in the tender document as 120 days from the end date of bid submission which was 04.07.2019 and thus the Bid was valid for a period of 120 days beyond 04.09.2019. Admittedly the Bank Guarantee of the petitioner was valid beyond such period and thus the objection of the respondent authorities is not valid. It is further submitted that one of the stands of the State-respondents is that the affidavit filed by the petitioner was not in true format however it would appear from the affidavits of two other Bidders namely M/s N.G Projects Limited and M/s Agarwal Global Infratech Pvt. Ltd. (the respondent no.5) that those were also same as the affidavit of the petitioner. Thus, the hyper-technical objection taken by the State respondents is not proper cannot be accepted for justifying their action of rejection of the technical bid of the P-1. The affidavit of M/s M.G Contractors Pvt. Ltd. whose technical bid was also declared responsive, was in the same format to that of the P-1. It is further submitted that the State-respondents have not filed any copy of letter or email to suggest that they had made communication with the Bank for verification of the Bank Guarantee and as such said statement cannot be accepted without any cogent materials on record. It is further contended that in W.P.(C) No. 5408 of 2019 which relates to the work - W-1, this Court after observing the fact that the P-1 has been disqualified in respect of W-1 and W-2 whereas it has been declared qualified for the work - W-3 and all the three works were substantially the same, vide order dated 24.10.2019 directed the State of Jharkhand to file counter affidavit. Thereafter, the State- respondents hurriedly to somehow justify their action also cancelled the tender for the work - W-3 without assigning any reason and floated the 3rd Call Tender vide e-Tender notice dated 26.10.2019. The cancellation of 2nd call e-Tender for the work W-3 is an exercise undertaken with malafide and malice in law. On bare perusal of the bank guarantee submitted by said two successful bidders in respect of the works - W-1 and W-2, would clearly demonstrate that those were not in the requisite format as required in view of the SBD, yet the said Bank Guarantee were accepted by the State respondents.
911. The learned counsel for the P-2 submits that the action of the State-
respondents is nepotic and malafide in law in as much as the technical bid of the P-2 was rejected contrary to the principles of fairness as well as the relevant provisions of SBD without affording any opportunity to clarify a formal error, if any, by disclosing the same. The grounds upon which the bid of the P-2 has been declared non-responsive is whimsical and in violation of the principles of natural justice and fair play. It is further submitted that Clause 2.7.1(ii) of the Addendum/Amendments to the Instruction to Bidders (ITB) to SBD is an exhaustive clause which provides that a joint venture must collectively satisfy the criteria of Clause 2.6.4 and 2.6.5 for which purpose relevant figures for each of the partners shall be added together to arrive at the Joint Venture's total capacity. Individual member must satisfy the requirement of Clause 2.6.7 and 2.6.8. So far Clause 2.6.4 is concerned, the same relates to personal capacities, whereas Clause 2.6.5 relates to equipment capabilities and Clause 2.6.7 relates to Audited Balance Sheet for last five years. So far as Clause 2.6.8 is concerned, the same relates to litigation history of the Bidders either jointly or severally in case of JV. However, the State respondents did not mention in the rejection order as to which clause of the SBD has been violated by the P-2 and thus the order suffers from the violation of principles of natural justice. It is further submitted that it would be evident from the Financial Bid Opening Summary Report that one Agrawal Global Infratech Private Limited which has been declared as L1 has quoted the Bid amount of Rs.111,78,68,989/- whereas the P-2 has quoted amount of Rs.107,55,36,040.91 as the financial bid price. If the genuine bidders are eliminated on illegal, arbitrary and unreasonable grounds much less vague ground, which is otherwise not mandatory as would be evident from the very language of Clause -2.7.1 to be read with Clauses 2.6.4, 2.6.5, 2.6.7 and 2.6.8, the same causes not only serious prejudice to such bidder but also put extra burden on the public exchequer as the open tenders are floated in order to secure best suited bidders on competitive bidding for cost effective and proper execution of the work.
12. The learned counsel for the P-2 puts reliance on the judgment of the Hon'ble Supreme Court rendered in the case of Kanhaiya Lal Agrawal Vs. Union of India & Ors., reported in (2002) 6 SCC 10 315, wherein it has been held that the issue as to whether a condition is essential or collateral can be ascertained by reference to the consequence of non-compliance thereof. If non-fulfilment of the requirement results in rejection of the tender, then it would be treated as an essential part of the tender otherwise it would be only a collateral term. It is further submitted that since the alleged deviation on the part of P-2 is a collateral term, the State-respondents ought to have relaxed the same.
13. Per contra, The learned Advocate General appearing on behalf of the respondent-State of Jharkhand while justifying the action taken by the State-respondents submits that the Amended Bank Guarantee could not have been accepted by the respondents as the same was not in the prescribed format. In fact it was an amended one and containing various other conditions/stipulations beyond what was prescribed in the SBD. There is no provision in the SBD for accepting amended Bank Guarantee. It is further contended that so far the work-W-1 is concerned the letter issued by the bank contains a clause stating "This letter forms an integral part of the original guarantee referred above"
and thus the same changes the format of the Bank guarantee submitted by the bidder (the P-1) which in no way can be said to be in terms of the format as prescribed in the SBD. The State-respondents had made communication with the Bank vide letter and E-mail to verify about the Bank Guarantee submitted by the P-1 but it did not reply the said communication till date. The bank guarantee of the respondent no. 5 was strictly in adherence to the format prescribed in the SBD and as such it was awarded the work being L1 as well. The case of the P- 1 cannot be equated with the case of the respondent no.5. The P-1 cannot seek direction of this court to accept the bank guarantee which was not in the proper format. It is further submitted that there was discrepancy in the letter of the Bank with regard to the amount of the bank guarantee. In the figure, the amount was written as Rs.1,34,00,000/- however in word, the amount was written as "One Crore Six Lacs Only". As per Clause 27.1 of the ITB to SBD, where there is discrepancy between the quantum mentioned in figures and words, the amount written in words will prevail and it is followed in the financial matters. Moreover, the Bank Guarantee presented by the P- 1 was of anterior date and as such the same was not in adherence to 11 the financial rules. It is further submitted that one of the requirements in the tender was that the bids of the respective bidders were to be duly notarized, however, the P-1 had submitted attested affidavit which could not have been accepted. In the present case there was two way envelop system. Unless the technical bid of any bidder is found responsive, the quoted price in the financial bid has no relevance. There is no arbitrariness in declaring the technical bid of the P-1 as non-responsive. There were several infirmities in the same including that the P-1 did not submit a proper Bank Guarantee being a mandatory condition as per Clause 16.3 of the ITB to SBD which clearly stipulates that any bid not accompanied by an Acceptable Bid Security and not secured as indicated in clause 16.1 and 16.2 shall be rejected by the employer as non-responsive. It is further submitted that the tender-W-3 has been cancelled by the Department and has issued fresh tender and thus the P-1 cannot take reference of the said tender for making out its case.
14. Learned counsel for the private respondent no.5 (namely M/s. Agrawal Global Infratech Private Limited) in W.P.(C) No.5408 of 2019 submits that the private respondent no.5 has been selected as L-1 and the agreement to execute the work W-1 has already been entered with the State respondents. The work order has also been issued to it on 18th October, 2019 and has been instructed to proceed in terms with the agreement. In view of the aforesaid work order, the work has already been started on 20th October, 2019 and a substantial part of which has been carried out by the Company. The respondent no.5 has mobilized its entire team and machineries. The numbers of machines, vehicles, men power etc. have been transferred to the work place i.e. at Garhwa and the earth work has been done for about 6-7 kms. Moreover clearing of road by uprooting rank vegetation, grass, bushes etc. as well as excavation of soil with the help of hydraulic excavator and other related works have also been completed by the company. The periodic bill in relation to the said work has been submitted before the Executive Engineer, Road Construction Department, Road, Division, Garhwa as per the agreement. It is further submitted that the measurement of the work has also been done by the competent authorities of the department. For the last two months, the work is going on in full swing as per satisfaction of the authority concerned.
12The respondent no.5 has invested huge amount in execution of the said work. In reply to the contentions made by the learned counsel for the P-1, it is submitted by the learned counsel for the respondent no.5 that it was known to all the tenderers participating in the tender that each and every term of the SBD is required to be fulfilled by them and any deviation from the same would be detrimental to the cause of the employer, who has right to reject the tender on any such deviation. Moreover, the respondent no.5 is a bona fide allottee of the work, who has participated in the tender process and on being declared successful, has been awarded the said work. The bank guarantee, additional performance guarantee etc. have duly been submitted by the respondent no.5. There is no question of opening the financial bid of those participants who did not succeed in the technical bid and as such any statement of the P-1 to the effect that its financial bid was lower than the respondent no.5 is imaginary and cannot be considered.
15. Learned counsel for the private respondent- M/s. N. G. projects Limited [the respondent no.5 in W.P.(C) No.5416 of 2019] submits that the Tender Evaluation Committee has not accepted the technical bid of the P-1, as it did not submit the bank guarantee in the prescribed format as per the SBD. The amended bank guarantee presented by the P-1 could not have been accepted by the Tender Evaluation Committee. Even in the bank guarantee dated 30th August, 2019 there was difference in the amount mentioned in figure and words. The present respondent submitted the bank guarantee strictly in accordance with the format prescribed in the SBD. The date of re-tender was 20th August, 2019, whereas the bank guarantee of the P-1 was issued prior to the date of tender i.e. 9th July, 2019. As per the SBD, an affidavit was required to be duly notarized, however, the P-1 instead of getting the said affidavit notarized, merely submitted an attested affidavit. Moreover, as per the SBD, the bank guarantee was required to furnished in the prescribed format by the bidders. After the evaluation of the technical bid, the financial bid was opened and the private respondent was found L-1. Accordingly, letter of acceptance was issued to it vide letter dated 16th October, 2019. The agreement for execution of the work has also been executed with the State respondents on 21st October, 2019 and, thereafter, the work has already been started. The present respondent has also submitted a bill 13 of Rs.75.00 lacs for execution of the work and as such the writ petition preferred by the P-1 is not worth consideration.
16. In course of argument, learned Advocate General puts reliance on a judgment of the Hon'ble Supreme Court rendered in the case of South Delhi Municipal Corporation Vs. Ravinder Kumar & Anr., reported in (2015)15 SCC 545, and submits that the Government being the guardian of the public finance has the right to refuse the tender bid submitted by the bidder provided the said decision should not be arbitrary or unreasonable. The learned Advocate General further puts reliance on the judgment of the Hon'ble Supreme Court rendered in the case of Jagdish Mandal Vs. State of Orissa & Ors., reported in (2007)14 SCC 517, and submits that the writ Court should not interfere in a contractual matter unless the decision making process of the State authority is found mala fide or to favour any undeserving person. The interference of the writ Court is warranted only in those cases in which the decision of the State authority is found so arbitrary and irrational, which no responsible authority can reasonably take as well as on the ground that the decision of the State authority is against the public interest.
17. Heard learned counsel for the parties and perused the materials available on record. In the present batch of writ petitions, the case of the P-1 is related to the works W-1, W-2 and W-3, whereas the case of the P-2 is related to the work W-1. The financial bid of the P-1 was declared non-responsive to Clause 16.3 of the ITB to SBD for the work, namely, W-1 and W-2. So far as the work W-3 is concerned, though the technical bid of the P-1 was declared responsive and its financial bid was found to be the lowest, the tender itself was cancelled at the stage of issuing letter of acceptance and third call tender was issued for the said work.
18. The main submission of the learned Advocate General and the learned counsel for the private respondents is that the P-1 submitted amended bank guarantee in all the three works which were found non- responsive to Clause 16.3 of the ITB to SBD. On the contrary, the stand of the learned counsel for the P-1 is that the bid was required to be accompanied by an acceptable bid security, which should have been secured as indicated in sub-clauses 16.1 and 16.2 failing which the bid was to be held non-responsive and since the bid security of the P-1 14 was satisfying all the said conditions, the State respondents have arbitrarily rejected its technical bid.
19. Before analysing respective contentions of the parties, it would be appropriate to go through the judgment rendered by this court in the case of ARETPL-AT(JV) Vs. M/s. Central Coalfields Limited. & Ors., reported in 2018(3) JLJR 208, wherein several judgments of the Hon'ble Supreme Court on the issue of entertaining a writ petition in contractual matter have been incorporated as under:-
"20. In the case of "Verigamto Naveen Vs. Govt. of A.P. and others", reported in (2001) 8 SCC 344, the Hon'ble Supreme Court held as under:-
21. On the question that the relief as sought for and granted by the High Court arises purely in the contractual field and, therefore, the High Court ought not to have exercised its power under Article 226 of the Constitution placed very heavy reliance on the decision of the Andhra Pradesh High Court in Y.S. Raja Reddy v. A.P. Mining Corpn. Ltd. and the decisions of this Court in Har Shankar v. Dy. Excise & Taxation Commr., Radha Krishna Agarwal v. State of Bihar, Ramlal & Sons v. State of Rajasthan, Shiv Shankar Dal Mills v. State of Haryana, Ramana Dayaram Shetty v. International Airport Authority of India and Basheshar Nath v. CIT. Though there is one set of cases rendered by this Court of the type arising in Radha Krishna Agarwal case much water has flown in the stream of judicial review in contractual field. In cases where the decision-making authority exceeded its statutory power or committed breach of rules or principles of natural justice in exercise of such power or its decision is perverse or passed an irrational order, this Court has interceded even after the contract was entered into between the parties and the Government and its agencies. We may advert to three decisions of this Court in Dwarka Das Marfatia & Sons v. Board of Trustees of the Port of Bombay, Mahabir Auto Stores v. Indian Oil Corpn. And Shrilekha Vidyarthi (Kumari) v. State of U.P. Where the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, brings it within the sphere of public law because the power exercised is apart from contract. The freedom of the Government to enter into business with anybody it likes is subject to the condition of reasonableness and fair play as well as public interest. After entering into a contract, in cancelling the contract which is subject to terms of the statutory provisions, as in the present case, it cannot be said that the matter falls purely in a contractual field. Therefore, we do not think it would be appropriate to suggest that the case on hand is a matter arising purely out of a contract and, therefore, interference under Article 226 of the Constitution is not called for. This contention also stands rejected.
1521. In the case of "Noble Resources Ltd. Vs. State of Orissa", reported in (2006) 10 SCC 236, the Hon'ble Supreme Court held as under:-
18. It may, however, be true that where serious disputed questions of fact are raised requiring appreciation of evidence, and, thus, for determination thereof, examination of witnesses would be necessary; it may not be convenient to decide the dispute in a proceeding under Article 226 of the Constitution of India.
19. On a conspectus of several decisions, a Division Bench of this Court in ABL International Ltd. opined that such a writ petition would be maintainable even if it involves some disputed questions of fact. It was stated that no decision lays down an absolute rule that in all cases involving disputed questions of fact, the party should be relegated to a civil court.
20. In Mahabir Auto Stores v. Indian Oil Corpn. this Court observed: (SCC p. 761, para 12) "It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case."
21. In State of U.P. v. Vijay Bahadur Singh a Division Bench of this Court held that the Government cannot be denied to exercise its discretionary power provided the same is not arbitrary.
22. Interplay between writ jurisdiction and contractual disputes has given rise to a plethora of decisions by this Court. See, for example, Dwarkadas Marfatia & Sons v.
Board of Trustees, Port of Bombay and Mahabir Auto Stores.
23. In Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai this Court stated: (SCC p. 235, paras 16-
17) "16. The position of law is settled that the State and its authorities including instrumentalities of States have to be just, fair and reasonable in all their activities including those in the field of contracts. Even while playing the role of a landlord or a tenant, the State and its authorities remain so and cannot be heard or seen causing displeasure or discomfort to Article 14 of the Constitution of India.
17. It is common knowledge that several rent control legislations exist spread around the country, the emergence whereof was witnessed by the post-World 16 War scarcity of accommodation. Often these legislations exempt from their applicability the properties owned by the Government, semi-government or public bodies, government-owned corporations, trusts and other instrumentalities of State."
24. Non-statutory contracts have, however, been treated differently. (See Bareilly Development Authority v. Ajai Pal Singh.)
25. A distinction is also made between performance of a statutory duty and/or dealing of a public matter by a State and its commercial activities. (See Indian Oil Corpn. Ltd. v. Amritsar Gas Service and LIC of India v. Escorts Ltd.)
26. In ABL International Ltd. this Court opined that on a given set of facts, if a State acts in an arbitrary manner even in a matter of contract, a writ petition would be maintainable. It was opined: (SCC p. 570, para 23) "23. It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party to the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of the State has acted in contravention of the abovesaid requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent."
27. Contractual matters are, thus, not beyond the realm of judicial review. Its application may, however, be limited
22. In the case of "Joshi Technologies International Inc. Vs. Union of India and others", reported in (2015) 7 SCC 728, it is held as under:-
69. The position thus summarised in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. It also follows that under the following circumstances, "normally", the Court would not exercise such a discretion:
69.1. The Court may not examine the issue unless the action has some public law character attached to it.
69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of 17 settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration.
69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination.
69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances.
70. Further, the legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under:
70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness.
70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discrimination.
70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred.
70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business.
70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages.18
70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice.
70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction.
70.9. The distinction between public law and private law element in the contract with the State is getting blurred.
However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary.
70.10. Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness.
70.11. 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 adjudication of purely contractual disputes.
71. Keeping in mind the aforesaid principles and after considering the arguments of the respective parties, we are of the view that on the facts of the present case, it is 19 not a fit case where the High Court should have exercised discretionary jurisdiction under Article 226 of the Constitution. First, the matter is in the realm of pure contract. It is not a case where any statutory contract is awarded.
23. Having gone through the aforesaid judgments of the Hon'ble Supreme Court, it may be construed that there is no absolute bar in entertaining a writ petition in a contractual matter where some disputed question of facts are involved. However, if the dispute involved in a matter is so complex which can only be determined after thorough long drawn adjudicatory process by leading evidences, the writ petition should not be entertained. Each and every case is to be dealt with on its own facts. If the materials on record are clearly evincible, the writ court may exercise the power of judicial review.
24. The power under Article 226 of the Constitution of India is plenary in nature and is not subjected to any of the other provisions of the Constitution. The High Court has discretion to exercise or not to exercise such discretion having regard to the facts of each case. However, the High Courts have imposed self- restraints in such exercise of extraordinary jurisdiction 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."
20. Undoubtedly, the High Court while making the judicial review is not expected to act as a court of appeal in examining the administrative decision and to find out as to whether any different decision could have been taken by the State authorities in the facts and circumstances of the case. It is also trite that the writ court should ordinarily refrain from examining the details of the terms and conditions of the contract, which are entered by the State/its functionaries. The writ court has inherent limitation on the scope of any detailed enquiry in contractual matters. However, the writ court can certainly examine whether the decision making process by the State authorities is unreasonable, irrational, arbitrary and violative of Article 14 of the Constitution of India. Once the procedure adopted by any authority of the State in the matter of public contract is held to be against the mandate of Article 14 of the Constitution of India, the writ Court cannot ignore such action of the State authorities on the pretext that there should be some latitude or liberty in contractual matters and any interference by the writ court would amount to encroachment over the exclusive right of the State authorities to take such decision.
2021. In the case of Jagish Mandal (Supra.), as has been relied upon by the learned Advocate General, the Hon'ble Supreme Court after referring to various earlier judgments, has held as under:
"22. 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, 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 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. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
Further in the case of Monte Carlo Ltd. Vs. National Thermal Power Corporation Ltd., reported in (2016)15 SCC 272, the Hon'ble Supreme Court has held as under:
21"19. In Sterling Computers Ltd. v. M&N Publications Ltd., (1993) 1 SCC 445, the Court has held that under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. It has also been observed that by way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry.
20. In Tata Cellular v. Union of India, (1994) 6 SCC 651 a three-Judge Bench after referring to earlier decisions culled out certain principles, namely, (a) the modern trend points to judicial restraint in administrative action, (b) the Court does not sit as a court of appeal but merely reviews the manner in which the decision was made, (c) the Court does not have the expertise to correct the administrative decision. 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, and (d) the Government must have freedom of contract and that permits a fair play in the joints as a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-
administrative sphere. Hence, the Court has laid down that the decision must not only be tested by the application of the Wednesbury principle [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides."
22. Both the parties have heavily relied upon the judgment of the Hon'ble Supreme Court rendered in the case of Central Coalfields Limited & Anr. Vs. SLL-SML (Joint Venture Consortium) & Ors., reported in (2016)8 SCC 622. In the said case, the technical bid of one of the bidders, namely, SLL-SML was rejected on the ground that the bank guarantee submitted by it was not in the format prescribed in the NIT read with GTC. The said rejection was challenged by the said bidder before this Court by way of filing a writ petition, contending, inter alia, that the said condition was not mandatory to be complied and as such its bid could have been accepted. The learned Single Judge, however, dismissed the said writ petition. Aggrieved thereby, the bidder preferred letters patent appeal before the learned Division Bench of this Court, which allowed the same by reversing the judgment of the learned Single Judge and held that the submission of the bank guarantee in the prescribed format was a non-essential term of NIT and since the bidder had substantially complied the requirement 22 of the bank guarantee being in the format prescribed by the Central Coalfields Limited, the rejection of the bid was unjustified. The said matter travelled up to the Hon'ble Supreme Court and the Hon'ble Supreme Court examined the decision taken by the Central Coalfields Limited so as to find out as to whether it acted perversely while rejecting the bid so as to warrant any judicial interference. It was noticed by the Hon'ble Supreme Court that the Central Coalfields Limited had not relaxed or deviated from the requirement of furnishing a bank guarantee in the prescribed format and, thus, every bidder was required to adhere to the prescribed format of the bank guarantee and thus did not find any arbitrariness, unreasonableness or perversity in the decision of the Central Coalfields Limited so as to make any interference with the same.
The relevant paragraphs of the judgment of the Hon'ble Supreme rendered in the case of SLL-SML (Joint Venture Consortium) (Supra.) are quoted herein below:-
"32. The core issue in these appeals is not of judicial review of the administrative action of CCL in adhering to the terms of NIT and the GTC prescribed by it while dealing with bids furnished by participants in the bidding process. The core issue is whether CCL acted perversely enough in rejecting the bank guarantee of JVC on the ground that it was not in the prescribed format, thereby calling for judicial review by a constitutional court and interfering with CCL's decision.
37. For JVC to say that its bank guarantee was in terms stricter than the prescribed format is neither here nor there. It is not for the employer or this Court to scrutinise every bank guarantee to determine whether it is stricter than the prescribed format or less rigorous. The fact is that a format was prescribed and there was no reason not to adhere to it. The goalposts cannot be rearranged or asked to be rearranged during the bidding process to affect the right of some or deny a privilege to some.
47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489 the terms of NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular [Tata Cellular v. Union of India, (1994) 6 SCC 651] there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be 23 questioned if it is irrational or mala fide or intended to favour someone or a decision "that no responsible authority acting reasonably and in accordance with relevant law could have reached" as held in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 followed in Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216]."
23. It is, thus, clear that a term of NIT is essential or otherwise is a decision to be taken by the employer and even if any term of the NIT is found to be essential, the same can be deviated by the employer provided that such deviation is made applicable to all bidders and potential bidders. The goalposts cannot be rearranged during the bidding process to affect the right of some or deny a privilege to other. The power of judicial review is to be exercised to look into the lawfulness of the decision and not the soundness of the same. The judicial review is intended to prevent arbitrariness, irrationality, unreasonableness, mala fide or bias. In case of SLL-SML (Joint Venture) (Supra.), the Hon'ble supreme Court confined itself to find out as to whether the action of the Central Coalfields Limited was perverse while rejecting the bank guarantee of the bidder on the ground that it was not in the prescribed format.
24. The issue before this Court in the present case is as to whether there is any arbitrariness, unreasonableness, mala fide, biasness in the decision making processing of the State respondents so as to make any interference with the present tender(s). If so, what appropriate order can be passed in the facts and circumstances of the present case.
25. The State respondents initially while filing counter affidavit took stand that there was infirmity in the bid document of the P-1, whereas the bids of the private respondents were strictly in accordance with the terms and conditions prescribed in the SBD. However, the P-1 filed rejoinder affidavit to controvert the said averment made by the State respondents in their counter affidavit and stated that there were infirmities in the bid documents of the private respondents as well as other bidders, whose technical bids were held responsive. In support of the said contention, the P-1 has annexed the relevant part of the bid document of other bidders. The argument advanced by the learned counsel for the P-1 on the said issue has not specifically been controverted by the learned Advocate General while making his 24 argument, however, has taken a stand that some of the mistakes committed by the bidders while submitting their respective bank guarantees were waived by the Tender Evaluation Committee and were made effective for all bidders, including the P-1. Apart from the common mistakes, the petitioner had committed other major mistakes, which could not have been waived and, thus, the Tender Evaluation Committee held the technical bid of the petitioner to be non- responsive. In support of the said argument advanced by the learned Advocate General, no such minutes of Tender Evaluation Committee has been brought on record so as to satisfy this court that the common mistakes were waived, but major/fatal mistakes found in the bank guarantee presented by the P-1 could not have been waived and, thus, its technical bid was declared non-responsive.
26. In the case of P-1, its technical bid in the work W-3 was held to be responsive despite the fact that the amended bank guarantee was furnished by it. Its financial bid was also opened, which was found to be the lowest. However, the State respondents for the other works W- 1 and W-2 held the technical bid of the P-1 as non-responsive to Clause 16.3 of the SBD merely on the ground that the P-1 had filed amended bank guarantee, which was violative of one of the tender conditions. The contention made on behalf of the P-1 is that the SBD of all the works in question is almost the same and the said contention has not been denied by the respondents. Thus, the State respondents appear to have taken different approach in similar works particularly in relation to the same defect. When the P-1 challenged the rejection of its technical bid for the work W-1 and the court took note of such fact vide order dated 24th October, 2019, the State respondents hurriedly cancelled the tender relating to the work W-3 and issued third call tender. In the above context, the contention of the learned counsel for the P-1 is that the decision of the respondent authorities suffers from arbitrariness and unreasonableness has some substance.
27. In the case of SLL-SML (Joint Venture) (Supra.), the Hon'ble Supreme Court has held that the discretion is with the authorities to decide as to whether a term of NIT is essential condition or not and also to deviate from such term provided that the said decision is made applicable to all the bidders and potential bidders. Thus, the conduct of State authorities is one of the relevant factors to gather their 25 intention as to whether they have treated filing of the bank guarantee in the prescribed format as a mandatory condition and have applied the said decision against all the bidders uniformly. So far as the works W-1 and W-2 are concerned, it appears from the record that almost all the bidders have deviated from the prescribed format of the bank guarantee and had thus violated one or the other condition of the SBD. If the State respondents had any intention to strictly follow the format of the bank guarantee, there was no reason as to why they would have deviated from it by relaxing some of the defects in the bank guarantee of other bidders including the private respondent irrespective of the fact whether those were condonable or otherwise. It is well settled law that even if an action is in the realm of contract, the writ Court is empowered to make judicial review of the action of the State authorities and to determine as to whether there has been any illegality, perversity, unreasonableness, unfairness or irrationality thereby vitiating the said action.
28. In the case of Poddar Steel Corporation Vs. Ganesh Engineering works & Ors., reported in (1991)3 SCC 273, followed in the case of Rashmi Metaliks Limited & Anr. Vs. Kolkata Metropolitan Development Authority & Ors., reported in (2013)10 SCC 95, a distinction has been drawn by the Hon'ble Supreme Court between essential, ancillary and subsidiary condition of a bid document and has held that the essential term of a tender document cannot be deviated from, however, an ancillary or subsidiary or non-essential term can be deviated which could be without any reference to the potential bidders. Further, in the case of SLL-SML (Joint Venture) (Supra.), the Hon'ble Supreme Court has held that whether a term of the NIT is essential or not is a decision to be taken by the employer. If the essential terms is to be deviated, the same is to be made applicable to all the bidders. In the said case, the Hon'ble Supreme Court has put reliance on the principle laid down by the privy council in the case of Nazir Ahmad Vs. King Emperor, reported in 1936 SCC Online PC 41, and has held that if the employer prescribes a particular format of the bank guarantee to be furnished, the bidders are required to submit bank guarantee in that format only. However, any flexibility in this regard is to be applied to all the bidders. The Hon'ble Supreme Court has put emphasis on the principle that the decision of the 26 authority should be applied to all similarly situated bidders uniformly. If the authority treats the format prescribed in the bank guarantee as an essential term, the same cannot be relaxed by adopting a pick and choose method on the pretext of making it condonable or otherwise, which certainly makes the said decision to be arbitrary and unreasonable requiring interference of the writ court under its power of judicial review.
29. Since the main argument of learned Advocate General in support of rejection of the bid of the P-1 in all three works is that the bid security of the P-1 was not in accordance with the prescribed format provided in the SBD, whereas the bid of the successful bidders was strictly in accordance with the conditions prescribed in the SBD, it would be relevant to go through the format of the bank guarantee security, which is quoted as under for the purpose of reference:
"Bid Security (Bank Guarantee) Whereas, ------ (name of Bidder) (hereinafter called "the Bidder") has submitted his Bid dated ---- (date) for the construction of ---- (name of Contract hereinafter called "the Bid") Know all people by these presents that We ---- (name of Bank) ----- (name of country) having our registered office at
----(hereinafter called "the Bank") are bound unto ----- (name of Employer) (hereinafter called "the Employer) in the sum of
----- for which payment well and truly to be made to the said Employer the Bank itself, his successors and assigns by these presents.
Sealed with the Common Seal of the said Bank this --- day of
--, 20---.
The Conditions of this obligation are:
(1) If after Bid opening the Bidder withdraws his bid during the period of Bid validity specified in the Form of Bid;
(2) If the Bidder having been notified to the acceptance of his bid by the Employer during the period of Bid validity:
(a) fails or refuses to execute the Form of Agreement in accordance with the Instructions of Bidders, if required; or
(b) fails or refuses to furnish the Performance Security, in accordance with the Instructions to Bidders; or
(c) does not accept the correction of the Bid Price pursuant to Clause 27.
We undertake to pay to the Employer up to the above amount upon receipt of his fist written demand, without the Employer having to substantiate his damned, provided that 27 in his demand the Employer will note that the amount claimed by him is due to him owing to the occurrence of one or nay of three conditions, specifying the occurred condition or conditions.
This Guarantee will remain in force up to and including the date ----- ** days after deadline for submission of Bids as such deadline is stated in the Instructions of Bidders or as it may be extended by the Employer, notice of which extension(s) to the Bank is hereby waived. Any demand in respect of this guarantee should reach the Bank not later than the above date.
Date ------ Signature ----------
Witness ---- Seal -------
Signature, name and address
* The Bidder should insert the amount of the guarantee in words and figures denominated in Indian Rupees. This figure should be the same as shown in Clause 16.1 of the Instructions to Bidders.
** 45 days after the end of the validity period of the Bid. Date should be inserted by the Employer before the Bidding documents are issued."
30. So far as the work W-1 is concerned, it appears that M/s. Agrawal Global Infratech Pvt. Ltd. (respondent no.5 in W.P.(C) No.5408/2019) presented the bank guarantee in the name of the Executive Engineer, Road Division, Garhwa, whereas other bidders submitted the bank guarantee in the name of the Executive Engineer, Road Division, Garhwa. The State respondents have contended that it was provided by an addendum that the bank guarantee is required to be issued in the name of the Executive Engineer, Road Construction Department, Road Division, Garhwa. Even if the said contention of the State respondents is accepted, they have deviated from the terms of SBD by accepting the technical bid of other bidders, who had presented the bank guarantee in the name of the Executive Engineer, Road Construction Department, Road Division, Garhwa. Apart from it, the respondent no.5 had put a "notwithstanding clause" in the bank guarantee, which was certainly a deviation from the format of the bank guarantee. M/s. N.G. Projects Limited [respondent no.5 in W.P.(C) No.5416/2019], whose technical bid was also found responsive, also deviated from the format of the bank guarantee by changing the condition of the bank guarantee by providing that the bank guarantee can be extended only at the "banker's sole discretion". It further 28 appears that in the bank guarantee of M.G. Contractors Private Limited and RKC Infrabuilt Private Limited, whose technical bids were also found responsive, there were deviations from the prescribed format, which were relaxed by the State respondents.
31. The learned Advocate General as well as learned counsel for the private respondent, while justifying the impugned orders, further highlighted some other infirmities in the tender document of the P-1, which has been replied by the learned counsel for the P-1 and by referring to the rejoinder affidavit, has submitted that the bid documents of other tenderers also suffer from similar infirmities, which have been ignored by the State respondents and as such they should not have rejected the bid of the P-1. In fact, the State respondents have given different treatment to the different bidders in the tender process, which is not permissible in the eye of law.
32. So far as the work W-2 is concerned, it appears from the bank guarantee submitted by the M/s. N. G. Projects Limited that it deviated from the format of the bank guarantee by changing the condition of the bank guarantee mentioning "banker's sole discretion" and the said deviation has been ignored by the State respondents.
33. The Hon'ble Supreme Court in the case of Ramana Dayaram Shetty Vs. International Airport Authority of India & Ors., reported in (1979)3 SCC 489, has held as under:
"21. ------ It must, therefore follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground."
34. So far as the work W-3 is concerned, the State respondents have cancelled the second call tender after accepting the technical and financial bid of the P-1 and declaring it the lowest tenderer to somehow justify their action taken for the works W-1 and W-2, which certainly suffers from mala fide and arbitrariness.
35. I am of the considered view that the decision making process of the State respondents, while rejecting the technical bid of P-1 and by 29 accepting the technical bids of the private respondents as well as other bidders, suffers from arbitrariness and unreasonableness more so when there were infirmities in the bid documents of all the bidders. The State respondents appear to have adopted pick and choose method, which is not permissible in the eye of law so as to satisfy the requirement of Article 14 of the Constitution of India.
36. The learned Advocate General has also argued that the prayer made in the writ petitions being W.P.(C) No.5408 of 2019 and W.P.(C) No.5416 of 2019 is only confined to opening of the technical bid of the P-1 and since the works have already been awarded to the private respondents, no other relief can be granted to the petitioners and the writ petitions are liable to be dismissed.
37. To appreciate the said argument, the law laid down by the Hon'ble Supreme Court in this regard is required to be discussed. In the case of Satya Narain Singh Vs. District Engineer, PWD & Ors., reported in 1962 Supp.(3) SCR 105, a Constitution Bench of the Hon'ble Supreme Court has held as under:
"10. In the result we allow the appeal and set aside the judgment of the Division Bench as well as of the Single Judge of the High Court of Allahabad and direct that a writ in the nature of mandamus shall issue to the respondents directing them to pay to the appellant full tolls with respect to every crossing of the Roadways buses over the ferry between 16- 3-1954 and the date on which the licence in favour of the appellant expired."
38. In the case of B.C. Chaturvedi Vs. Union of India & Ors., reported in (1995)6 SCC 749, the Hon'ble Supreme Court of India has held that merely because there is no parallel provision of Article 142 of the Constitution of India available to the High Courts, it cannot be a ground to think that they cannot do complete justice and if moulding of relief would do complete justice between the parties, the same cannot be ordered.
39. In the case of Shangrila Food Products Ltd. & Anr. Vs. Life Insurance Corporation of India & Anr., reported in (1996)5 SCC 54, the Hon'ble Supreme Court has held that the High Court in exercise of its jurisdiction under Article 226 of the Constitution of India can take cognizance of the entire facts and circumstances of the case and pass appropriate orders to give complete and substantial justice to the parties.
3040. Thus, in view of the aforesaid ratio laid down by the Hon'ble Supreme Court in this regard, I do not find any substance in the said argument of the learned Advocate General. The power of the High Court under Article 226 of the Constitution of India being discretionary in nature, the writ Court cannot be confined to the prayer made in the writ petition, if the situation so warrants. For rendering complete justice, the High Court may pass appropriate order as it may deem fit in the facts and circumstances of the case. Moreover, the petitioners in their respective writ petitions have made prayer for "any other relief", which would certainly have an exhaustive meaning.
41. So far as the merit of the case of the P-2 [petitioner of W.P.(C) No.5689 of 2019] is concerned, I have gone through the relevant provisions of the Addendum/Amendments to the Instruction to Bidders (ITB) to SBD and the same are quoted hereunder:
"2.6.7 The audited balance sheets for the last five years should be submitted, which demonstrates the soundness of the Applicant's financial position, showing long-term profitability including an estimated financial projection for the next two years. If necessary, the Employer will make inquiries with the applicant's bankers.
2.6.8 Litigation History The Applicant should provide accurate information on any litigation or arbitration resulting from contracts completed or under execution by him over the last five years. A consistent history of awards against the Applicant or any partner of a joint venture any result in failure of the applicant.
2.7.1 Joint Venture must comply with the following requirements;
(a) Following are the minimum qualification requirements;
----
(ii) The joint venture must satisfy collectively the criteria of para 2.6.4 and 2.6.5 above for which purpose the relevant figures for each of the partners shall be added together to arrive to arrive at the joint venture's total capacity. Individual members must each satisfy the requirements of para 2.6.7 & 2.6.8 above,
------------"
42. It would, thus, be evident that in view of Clause 2.7.1 of the Addendum/Amendments to the Instruction to Bidders (ITB) to SBD, if the bidder is a joint venture, the individual members are to satisfy the requirement of Clause 2.6.7 and 2.6.8. So far as the case of P-2 is 31 concerned, Clause 2.6.8 would be relevant which specifically provides that the applicant has to satisfy the litigation history of last five years. Though the contention of the State respondents is that P-2 submitted the litigation history of joint venture instead of individual litigation history of both the members of the joint venture, the said contention has been controverted by the learned counsel for the P-2 and by inviting the notice of this Court to Annexure-A to the counter affidavit, has contended that the litigation history submitted by the P-2 has wrongly been interpreted by the State respondents.
43. To appreciate the contention of the learned counsel for the parties, I have perused the litigation history submitted by the P-2 from which it appears that though the litigation history was submitted in the letterhead of the joint venture, namely, Ramiya-HS (JV), it was specifically stated therein "No Litigation History of Either J.V. Member". Thus, I do find substance in the argument of learned counsel for the P-2 that the State respondents arbitrarily rejected the technical bid of the P-2. I am of the considered view that since the litigation history was required to be filed by the "Applicant" and here the applicant was the joint venture, namely, Ramiya-HS (JV), the said litigation history was furnished in the letterhead of the Ramiya-HS(JV), disclosing the litigation history of both the partners.
44. Now, the question before this Court is as to what nature of order can be passed in the present facts and circumstances of the case.
45. In the case of TRF Limited Vs. Energo Engg. Projects Ltd., reported in (2017)8 SCC 377, the Hon'ble Supreme Court has held that once the infrastructure collapses, the superstructure is bound to collapse. One cannot have a building without the plinth. Or to put it differently, once the identity of the Managing Director as the sole arbitrator is lost, the power to nominate someone else as an arbitrator is obliterated. Therefore, the view expressed by the High Court is not sustainable and we say so.
Further in the case of Chairman-cum-Managing Director, Coal India Limited & Ors. Vs. Ananta Saha & Ors., reported in (2011)5 SCC 142, the Hon'ble Supreme Court has held as under:
"32. It is a settled legal proposition that if initial action is not in consonance with law, subsequent proceedings would not sanctify the same. In such a fact situation, the legal maxim sublato fundamento cadit opus is applicable, meaning 32 thereby, in case a foundation is removed, the superstructure falls."
46. Since it has already been discussed hereinabove that the decision making process adopted by the State respondents suffers from several infirmities and by applying the principle laid down by the Hon'ble Supreme Court in the aforesaid cases, I am of the considered view that it would not be appropriate to allow the State as well as private respondents to continue with the allotted work, namely, W-1 and W-2 and the same are liable to be quashed and set aside. Moreover, it appears from the counter affidavit of the private respondents that they have already started the work and the part work has already been completed and, therefore, it is not feasible to direct the State respondents to proceed with the same tender by opening the financial bids of the petitioners.
47. Since non-adherence of the prescribed format of the bank guarantee, the technical bids of five tenderers for the work W-1 and three tenderers for the work W-2 have been rejected, in view of the principle of privilege of participation laid down by the Hon'ble Supreme Court in the case of Ramana Dayaram Shetty (Supra.), they have also been discriminated as against the private respondents on the issue of deviation from the prescribed format of bank guarantee.
48. Under the aforesaid facts and circumstances, all the writ petitions are disposed of by passing following orders:-
(i) The decision of the Tender Committee dated 3rd October, 2019 for the work, namely, "Reconstruction of Meral-Bana-
Ambakhoriya Road (MDR-140)" in relation to W.P.(C) No.5408 of 2019 and W.P.(C) No.5689 of 2019 is hereby quashed. All the consequential action of the State respondents taken in relation to the said tender including the award of the tender in favour of the private respondent- M/s. Agrawal Global Infratech Private Limited is also quashed. The State respondents are directed to issue fresh tender for the said work and to proceed accordingly.
(ii) The decision of the Tender Committee dated 3rd October, 2019, for the work, namely, "Reconstruction of Nagaruntari- Dhurki-Ambakhoriya Road (MDR-139)" in relation to W.P.(C) No.5416 of 2019 is hereby quashed. All the consequential 33 action of the State respondents taken in relation to the said tender including the award of the tender in favour of the private respondent- M/s. N.G. Projects Limited is also quashed. The State respondents are directed to issue fresh tender for the said work and to proceed accordingly.
(iii) The writ petition being W.P.(C) No.5894 of 2019 filed by the petitioner- M/s. Vinod Kumar Jain challenging the third call tender for the work, namely, "Reconstruction of Dandai Bazar to Panghatwa P.W.D. Road via Lawahikala Road (total length 10.05 kms.)" is allowed and third call tender issued by the State respondents is hereby quashed and set aside. The State respondents are directed to proceed further with the petitioner as per the terms and conditions of the said tender.
(Rajesh Shankar, J.) Sanjay/AFR