Himachal Pradesh High Court
Shyam Lal vs Himuda And Anr on 2 December, 2015
Bench: Mansoor Ahmad Mir, Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 3921 of 2015 .
Judgment reserved on: 16.11.2015
Decided on: 2.12.2015
Shyam Lal ...Petitioner
Vs
HIMUDA and anr ...Respondents.
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Coram
The Hon'ble Mr. Justice Mansoor Ahmad Mir, Chief Justice. The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
For the Petitioner rt Whether approved for reporting?1Yes.
: Mr. Suneet Goel, Advocate.
For the Respondents : Mr. C.N. Singh, Advocate.
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Tarlok Singh Chauhan J, The petitioner has sought a writ of mandamus directing the respondents to consider his bid for the work in question, i.e. Name of work: Govt. Degree College at Haripur, District Kullu, HP (SH:- C/o Boundary Wall and Main gate around the complex) E/Cost: Rs.15,75,414/- E/Money 31, 135. Time Six months and Cost of Form: Rs.1,000/-, as detailed in at serial No.3 of the notice inviting tender (Annexure P-2) on merits after allowing him to submit the same.
2. Respondent No.2 invited sealed item rate tenders from the approved contractors enlisted with HIMUDA/HPPWD in appropriate class for various works detailed in the said notice and the last date of issuance of Whether the reporters of the local papers may be allowed to see the Judgment? Yes.
::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 2tender document was 10.9.2015, whereas last date for submission of a bid was 14.9.2015. Petitioner intended to .
submit his tender for the works detailed above, but was denied the same without assigning any reasons for which he lodged protest in writing on 10.9.2015 itself. On further of inquiry, petitioner came to know that he had been denied the tender documents in view of work already allotted in his rt favour having not been completed within the stipulated period by invoking condition No. 1 (c) of the tender form which reads thus:
"The tender forms will not be issued to those contractors/firms who have delayed the already awarded works more than 50% time of the contractual obligation."
3. The petitioner claims that such action on the part of the respondents was totally illegal and uncalled for as the earlier works allotted to him pertaining to construction of Panchayat Bhawan at Manali and thereafter construction work of Ayurvedic Hospital at Katrian, District Kullu could not be completed within the stipulated time solely on account of acts attributable to the respondents and for reasons beyond his control as there was heavy snowfall.
4. Respondents have filed reply wherein it has been stated that the petitioner had miserably failed to complete the work of construction of Panchayat Bhawan at Manali ::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 3 within one year from 10.7.2009 as was stipulated in the contract agreement and the said building came to be .
completed on 26.12.2013 in a time gap of four years five months. The petitioner was even levied compensation @ 10% of the tendered amount which was subsequently of reduced to 1% by taking lenient view under clause 2 of the agreement for which recovery of `40,048/- was made from rt the petitioner in the 10th running bill of the said work.
5. It is further stated that another construction work of Ayurvedic Hospital building at Katrian, District Kullu was also awarded to the petitioner vide letter dated 24.9.2012 and the time allowed for completion as one year to be reckoned from the 15th day of issue of award letter, which meant that the work was required to be completed on or before 7.10.2013, but the petitioner had failed to complete the work within the stipulated period, rather he stopped the execution abruptly. It is further averred that as against the award work of `44,78,680.00 the petitioner had executed the work of `22,96,606.00 in a time span of more than two years. Despite issuance of repeated letters/notices, petitioner did not start and complete the work.
Consequently, by invoking clause 2 of the contract agreement an opportunity was given to the petitioner to complete work within one month from the receipt of the ::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 4 notice dated 5.9.2014, but again petitioner did not re-start and complete the work within the stipulated time resulting in .
imposition of compensation @ 10% of the tendered cost vide letter dated 7.4.2015. But despite this, petitioner did not re start and complete the work in question, resultantly the work of stands rescinded on 3.6.2015 under clause 3 (a) of the contract agreement along with forfeiture of security deposit rt of `1,24,271.00.
6. The grievance of the petitioner is twofold. Firstly, that the condition No. 1 ( c ) (supra) is illegal, arbitrary and unconstitutional and secondly even if such condition is held to be valid, the same is not applicable to his case.
We have heard the learned counsel for the parties and have gone through the records of the case.
7. It is more than settled that the government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, malafide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of tender prescribed only because it feels that some other terms in the tender would have been fairer, wiser or logical (refer Michigan Rubber (India) Ltd Vs. State of Karnataka & ors (2012) 8 SCC 216, CWP No. 4897 of 2014, titled Mahalakshmi Oxyplants Pvt Ltd Vs.State of HP & anr, CWP No. 4112 of 2014, titled Minil ::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 5 Laboratories Ltd Vs. State of HP & anr, CWP No.1756 of 2014 titled M/s Andritz Hydro Pvt Ltd Vs Himachal Pradesh Power .
Corporation Ltd, CWP No. 765 of 2014 titled Namit Gupta Vs. State of HP & ors and CWP No. 1007 of 2015 titled Sandeep Bhardwaj Vs.State of HP & ors, reported in AIR 2015 HP 117).
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8. What would be the scope of judicial review in such like matters, has been succinctly laid down by the Hon'ble rt Supreme Court in Michigan Rubber (supra) in the following terms:
"23 From the above decisions, the following principles emerge:
(a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play.
These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 6(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the .
State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
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(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to rtsuccessfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.
24 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"; and
(ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article
226."
9. The only argument advanced by the petitioner to assail condition No.1 (c) of the tender is that the same has ::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 7 no legal basis as it seeks to give unfettered powers to the respondents to reject anybody's claim and indirectly .
amounts to blacklisting the petitioner as he would be debarred from participating in any of the tenders floated by the respondents henceforth only on the basis of impugned of condition.
10. We are not impressed by such arguments, merely because rt the petitioner has been debarred from participating in the tender notice by invoking clause 1 (c ), it does not mean that the petitioner has been blacklisted.
There has to be a specific order of blacklisting which has to be preceded by a show cause notice as blacklisting is described as 'civil death' of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts. Admittedly, there is no such order whatsoever passed by the respondents. Rather, as per the petitioner himself, he was denied participation in the tender only on the basis of an oral instructions and there is no written order whatsoever to this effect. Once there is no written order, the petitioner is free to participate in all other tenders, save and except, wherein clause similar to clause 1 ::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 8
(c) is contained in the terms and conditions of the tender document.
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11. Now, in so far as the clause 1 (c ) being illegal, arbitrary or in any manner discriminatory is concerned, the objects sought to be achieved by the clause is clearly of discernible from the language in which it is couched. As against the time limits of one year, if the contractor like rt petitioner herein delays the work and completes the same in four years or leaves the work halfway by partly executing the same, it clearly indicates that such contractor does not have either the capability or the capacity or the will to execute the work. Moreover, the petitioner was well aware of the vagaries of the weather and the same cannot, therefore, be taken as an excuse for not executing the works within the stipulated period.
12. In view of the aforesaid discussion, there is no merit in the petition and the same is accordingly dismissed leaving the parties to bear the costs.
(Mansoor Ahmad Mir) Chief Justice.
(Tarlok Singh Chauhan), Judge.
December 2, 2015 (sl) ::: Downloaded on - 15/04/2017 19:25:37 :::HCHP 9 .
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