Patna High Court
M/S Czar Construction Private Limited vs The State Of Bihar & Ors on 6 August, 2012
Equivalent citations: AIR 2013 PATNA 35
Author: Jayanandan Singh
Bench: Jayanandan Singh
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.13957 of 2011
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1. M/S CZAR Construction Private Limited Registered Office - Kalisthan, Dirapur,
Begumpur, P.O.- Begumpur, P.S.- Chawk Patna City, Distt.- Patna, Through its
Director Sri Ved Prakash, S/O Sri Mishri Lal Yadav, R/O Kalisthan, Dirapur
Begumpur, P.O.- Begumpur, P.S.- Chawk Patna City, Distt.- Patna
.... .... Petitioner/s
Versus
1. The State Of Bihar through Its Chief Secretary Govt. Of Bihar, New Secretariat,
Patna
2. The Principal Secretary, Water Resource Department, Govt. Of Bihar, New
Secretariat, Patna
3. The State Of Jharkhand through Its Chief Secretary, Govt. Of Jharkhand
4. The Principal Secretary, Water Resource Department, Govt. Of Jharkhand
5. Damodar Valley Corporation Through The Chief Engineer (Civil) D.V.C.,
Maithon, Distt.- Dhanbad (State Of Jharkhand)
6. The Senior Divisional Engineer (C) Dam Division, Damodar Valley Corporation,
Maithon, Distt.- Dhanbad (State Of Jharkhand)
7. The Additional Finance Officer Damodar Valley Corporation, Maithon, Distt.-
Dhanbad (State Of Jharkhand)
.... .... Respondent/s
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Appearance :
For the Petitioner/s : Mr. Amit Shrivastava, Adv., Mr.Anis Akhtar, Adv. and
Mr.Arif Daulla Siddiqui, Adv.
For the Respondent/s : Mr. J.S. Arora, Adv.
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CORAM: HONOURABLE MR. JUSTICE JAYANANDAN SINGH
CAV JUDGMENT
Date: 06 -08-2012
Petitioner, a private limited company, has filed this
writ application, through its Director, for a direction to the
respondents to produce the original order of the cancellation
of its tender for the work namely " Protection work of right
bank of Tail water Channel of Maithon Hydel Station,
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Maithon ( in short „the said work‟) and to quash the same. It
has further prayed for quashing of the letter, contained in
memo no.257 dated 03.06.2011 (Annexure-10) (so far as it
relates to the petitioner), whereby petitioner and others have
been informed to collect the earnest money, deposited
pursuant to notice inviting tender, on account of they being
declared unsuccessful bidders. It has further prayed for a
direction to the respondents to execute the agreement,
pursuant to the tender dated 08.04.2010, for completion of
the said work, as, after opening of financial bid, petitioner
was marked L-1 and found most suitable contractor for
execution of the work, and thereafter allow the petitioner to
complete the work. It has further prayed to restrain the
respondents from inviting fresh tender for the said work and
for finalizing the same with any other contractor.
Petitioner is a registered contractor with the
Government of Bihar having its registered office in the
district of Patna, as described in the cause title of the writ
application. On 08.04.2010 notice inviting tender was
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3 / 22
published by the respondents for "Protection work of right
bank of Tail water Channel of Maithon Hydel Station,
Maithon" with an estimated cost of Rs.5,04,15,296/-, for
which earnest money of Rs. 10 lacs was fixed with other
terms and conditions for submission of tender. A
corrigendum was issued to the notice on 29.04.2010 which
also formed part of the main tender notice. As petitioner
fulfilled requisite qualification as per the notice, it submitted
its tender with all particulars and earnest money, which was
accepted by the respondents. Besides petitioner, many other
parties submitted their tender in response to the notice.
However, after scrutiny, tender papers of only four bidders,
including that of the petitioner, were found valid by the
respondents. Since the tender could not be finalized within
180 days, the respondents, through memo no.1647 dated
22.11.2010(Annexure-2), requested the petitioner and other bidders to extend the time of validity of their tender for further period of 180 days, to which petitioner complied through memo no.355 dated 06.12.2010 (Annexure-3). 4 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 4 / 22 Thereafter Technical Committee of the respondents examined the technical bids of the qualified tenderers and found the bid of the petitioner, as well as one M/S P.K. Thakur and Company Private Limited, technically fit. Hence, as per minutes dated 04.01.2011 (Annexure-4), the Committee recommended for opening of price bid (financial bid) of the two Companies. Later on the W&ST Committee- II, in its meeting also examined the tender papers of two companies and, by resolution dated 02.03.2011 (Annexure-
5), decided to approve the opening of price bid of the said two Companies. Accordingly it was informed by letter dated 05.03.2011 (Annexure-6) that price bid was to be opened on 18.03.2011 at 3.30 PM in the office of Senior Divisional Engineer (Civil) Dam Division, DVC, Maithon and request was made to petitioner or its authorized representative to be present during opening of the price bid. Accordingly, on the date and time fixed price bid of the petitioner and the other company was opened in the presence of their representatives. The price bid quoted by the petitioner was found as 5 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 5 / 22 Rs.5,49,02,257.00, whereas price bid quoted by the other company was found as Rs.6,10,02,508.00. Hence, in comparison to the department estimate (DE) amount disclosed in the notice, petitioner‟s quoted rate was found 8.9% above and that of the other company was found 21% above. Accordingly comparative statement was prepared (Annexure-7) in which petitioner was put at L-1, whereas the other company was put at L-II. However, thereafter Tender Committee met on 06.05.2011 and resolved for cancellation of all tenders (Annexure-8). Thereafter meeting of W&ST Committee-II was held in the chamber of Chief Engineer (Civil), DVC, Maithon on 28.05.2011, in his presence, and recommendation was made to reject all the tenders and for checking up the scope of work afresh by the Department/Section, before issuing a fresh NIT, in view of the changed situation that had cropped up during the last three monsoons (Annexure-9). Petitioner thereafter came to know that, in the light of the said recommendation, final orders of cancellation of entire tender process was issued 6 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 6 / 22 which, however, was not communicated to it. Subsequently a letter dated 03.06.2011 (Annexure-10) was issued by the Senior Divisional Engineer (C), Dam Division, DVC, Maithon for release of the EMD (earnest money deposit ) of the all four tenderers, copies of which were sent to them. Hence, this writ.
Learned counsel for the petitioner submitted that it is correct that rate quoted by the petitioner was found higher by the Tender Committee, vide its resolution dated 06.05.2011 (Annexure-8), in comparison to the DE, basing it on 2002 rates. However, he submitted that, the rate quoted for the same work by the successful tenderer in 2002, for the same work, may have been 11.2% below the DE, but labour charges and cost of materials had escalated considerably since 2002. As such, taking that into account, the rate quoted by the petitioner was reasonable and correct. He submitted that, in respect of change of scope, the Committee had only made speculation and, only on that basis, had recommended for revision, upon re-survey of the site of the project after 7 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 7 / 22 monsoon. Hence, he submitted that, so far as objection of the Committee with regard to the rate of the petitioner is concerned, it is unreasonable and arbitrary, as the Committee had not taken into account the price escalation and inflation since 2002 and, so far as change of scope of work is concerned, opinion of the Committee was only speculative. He submitted that the petitioner is still ready to go for negotiation and agree to execute the work on the basis of negotiated price.
On merits, learned counsel for the respondent Corporation submitted that, so far as facts placed by learned counsel for the petitioner are concerned, they are not in dispute. However, he submitted that tender notice was issued on 08.04.2010 taking into account erosion in the banks of the water channel in the last monsoon. But, by the time price bids were opened, it was almost one year and another monsoon had passed. Hence, when the matter was taken up by the Tender Committee on 06.05.2011, it came to a conclusion that, since it was already month of May, work 8 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 8 / 22 was not likely to start before the November/December. Since one monsoon had already passed after the tender notice was issued and another monsoon may also pass, in which also there may be erosion in the banks of the water channel, it may be appropriate that fresh survey be made after the monsoon and scope of the work may be changed accordingly. Hence, the Tender Committee recommended for rejection of all tenders and for checking up of scope of work by the concerned Department/Section. He submitted that this was considered in the meeting of W&ST Committee-II in the presence of Chief Engineer (Civil) DVC Maithon on 08.05.2011, vide Annexure-9, and it approved the rejection of all tenders and for checking up of the scope of the work and for inviting fresh tender in view of changed situation that had cropped up during last three monsoons.
Learned counsel for the petitioner submitted that once petitioner had been placed L-I in the merit panel, it should have been allowed to execute the work with whatever revision of rate the respondents would have considered 9 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 9 / 22 necessary.
Matters of award of contract of work on the basis of tender notice and the process adopted for it fall within the domain of commercial activities of the parties. This Court, in exercise of writ jurisdiction, cannot issue any mandamus to the respondents to adopt a particular procedure or to take a particular decision in the matter. If the respondents have decided to cancel all the tenders and review the scope of work and then issue fresh tender notice with revised estimate and revised scope of work, this Court cannot issue directions to the respondents to refrain from the same and invite the petitioner for negotiation and settlement and award the work to it on revised rates. The scope of judicial review in the matters of contract is only confined to examine whether the decision taken by the respondents and the course of action adopted by them are arbitrary, unreasonable, malafide or not. In the present case, from bare reading of Annexre-8 and 9, the two resolutions of the Committee, this Court finds that, from the time the process for award of contract for the said 10 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 10 / 22 work had started, much time had elapsed. It is obvious that the Committee felt that there was possibility of more erosion in the banks of the water channel in the successive monsoon which may require extended work to be done for strengthening of the banks to ensure its protection. Hence Tender Committee and thereafter the W& ST Committee-II decided that the scope of work may be checked afresh as next monsoon was also knocking on the doors and the work in any case could not start prior to November/December, 2011. This reasoning of the two committees for cancellation of all the tenders and for decision to review the scope of work and for issue of fresh NIT cannot in any way be held as unreasonable, irrational or mala fide.
Learned counsel for the petitioner has also not submitted that this reasoning of the two Committees are non- est and arbitrary. His only submission in respect of this reasoning was that it was speculative. The reasoning had to be speculative in the facts and circumstances of the case, till the survey was made and scope of the work was rechecked 11 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 11 / 22 by the concerned Department/Section of the respondents. Though in the writ application pleading has been made that this was done by the respondents to grant undue favour to the other successful bidder namely, M/S P.K. Thakur and Company, but learned counsel for the petitioner did not at all advance any submission on those lines nor did he make any attempt to substantiate said pleading by any material whatsoever. Hence, in the background of facts and circumstances of the case as stated above, reliance placed by learned counsel for the petitioner on the celebrated case of Tata Cellular Vs. Union of India (AIR 1996 SC 11) and particularly on paragraphs 93, 94 and 113 (5) thereof is misconceived.
In the circumstances, this Court finds that no interference is called for in the matter by this Court on merits.
Though, as noticed above, this Court has not found that, on merits, this matter calls for any interference by this Court, but learned counsel for the respondents insisted 12 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 12 / 22 that the question of maintainability of the writ application in this Court may also be considered. Accordingly, matter was heard on the question of maintainability also. While opening his arguments on the issue, learned counsel for the respondent Corporation and its officials submitted that the Corporation situates in the district of Dhanbad of the State of Jharkhand and within the territorial jurisdiction of the Jharkhand High Court. He submitted that all the activities of the Corporation in the matter were confined within the State of Jharkhand and the work in question is also to be performed in the State of Jharkhand. He submitted that the notice inviting tender was issued by the Senior Divisional Engineer of the Corporation at Maithon; petitioner submitted his tender in his office there; letter was issued to the tenderers for expansion of validity of their tender from that very office; the letter of the petitioner extending validity of his tender was received in the same office; technical bids of the tenderers were opened in the same office; the subsequent meetings of the Tender Committee was also held there only; 13 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 13 / 22 the meeting of the W&ST Committee-II was also held there; the petitioner or its authorized representative was called to attend the opening of the price bid on the date and time fixed in the said office itself; the meeting of the Tender Committee recommending for cancellation of the bid was also held in Maithon and finally the meeting of the W&ST Committee-II, in the presence of the Chief Engineer (Civil), was also held there itself in which it was decided to reject all tenders and for checking up of scope of work and issue of fresh NIT. Hence, he submitted that no cause of action arose to the petitioner within the State of Bihar to invoke the jurisdiction of this High Court in the matter for any relief against the respondent Corporation. In support of this submission, learned counsel for the respondent Corporation placed reliance on the judgment of the Apex Court in the case of Alchemist Limited & Anr. Vs. State Bank of Sikkim & Ors. [AIR 2007 SC 1812]; Sri M.M.Thapar & Anr. Vs. Ramesh Kumar Singh & Ors. [2006 (3) PLJR23] and Groheven Tradex Private Limited Vs. Union of India and Ors.[AIR 14 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 14 / 22 2001 Delhi 37].
Learned counsel for the petitioner, in reply, submitted that the petitioner‟s registered office is in Patna within the territorial jurisdiction of this Court and it ultimately received in its Patna office the communication dated 03.06.2011, as contained in Anneuxre-10, requesting it to contact the said Senior Divisional Engineer for refund of the EMD. He submitted that this last communication, which was made to the petitioner at Patna and within the territorial jurisdiction of this High Court, gave cause of action to it to move this Court. In support of this submission, learned counsel for the petitioner placed reliance on a judgment of the Apex Court in the case of Navinchandra N.Majithia Vs. State of Maharashtra [AIR 2000 SC 2966]. He submitted that, after the judgment of the Constitution Bench of the Apex Court in the case of Election Commission, India Vs. Saka Venkata Rao [AIR 1953 SC 210] a new clause namely clause 2 was inserted in Article 226 of the Constitution of India by the 15th amendment (being reproduced below for 15 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 15 / 22 easy reference):-
(2) "The power conferred by clause (1) to issue directions, orders or writs to any Government authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories."
He submitted that by this amendment the jurisdiction of the High Courts was expanded to entertain such matters also in which the cause of action, wholly or in part, had arisen within its territorial jurisdiction, notwithstanding that the seat of such government or authority or the residence of such person was not within those territories. Hence, he submitted that, since the petitioner had received the communication, as contained in Annexure-10, at Patna and within the territorial jurisdiction of this High Court, the cause of action had arisen to the petitioner to move this Court.
Since the parties have called upon this Court to 16 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 16 / 22 consider this question also, this Court has examined the issue in the light of the judgments relied upon by them. The judgment relied upon by learned counsel for the petitioner in the case of Navin Chandra (supra) was delivered by the Apex Court in a case arising from a judgment of the Division Bench of the Bomaby High Court, which dismissed the writ application of the appellant for quashing of the FIR registered by the Shilong police in the State of Meghalaya, on the ground of lack of jurisdiction. The facts of the case, as noticed by the Apex Court, showed that almost all events had happened within the State of Maharashtra. Having failed to come to a settlement in commercial transactions between the parties, the complainant company, M/S JB Holdings Limited, set-up at Shilong by the majority shareholders of M/S Export Limited (which had entered into transactions with appellant in Maharastra), had lodged an FIR at Shilong. The Apex Court also found that the appellant, in the writ petition preferred before the Bombay High Court, had also made an alternative prayer for transfer of the case from Shilong to 17 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 17 / 22 Bombay. The two learned judges of the Bench, in their separate but concurrenting judgment, found that the key words in clause 2 of Article 226, expanding jurisdiction of the High Courts, were „cause of action, wholly or in part‟. Learned Judges noticed previous judgments of the Court on the issue and also definition of expression „cause of action‟ appearing in the Stroud‟s Judicial Dictionary. The finding of the Bench was crystallized by Thomas, J. in paragraph 13 of the judgment. Finally the Court found that the entire incidence had happened in Bombay and as such the Court directed the investigation relating to the complaint of the Company filed at Shilong to be held by the Mumbai Police. This judgment relied upon by leaned counsel for the petitioner is in fact against the case of the petitioner. The ratio of the judgment shows that it is the collective facts or „bundle of facts‟ which is relevant to constitute cause of action and not the residence of a particular party. Facts of the present case show that all the events, from the issue of NIT till cancellation of tender of all the four tenderers, had 18 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 18 / 22 happened at Maithon. It was only a consequential communication, calling the petitioner to collect his EMD, which was received by the petitioner at Patna. In the present case, the cause of action of the petitioner was cancellation of his tender, which was done at Maithon, and not the communication for collection of EMD.
On the other hand, on this issue, learned counsel for the respondent has placed reliance on a judgment of the Apex Court in the case of Alchemist Limited (supra). The facts of the case shows that the dispute pertaining to commercial transactions between the appellant Company, having its registered office within the territorial jurisdiction of the High Court of Punjab and Haryana and the State Bank of Sikkim, was under consideration. Although, during the negotiations some incident had happened at corporate office of the appellant Company at Chandigrah also, the Court held that the actual cause of action had arisen within the territorial jurisdiction of High Court of Sikkim. Hence it upheld the judgment of the High Court of Punjab and Haryana, 19 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 19 / 22 dismissing the writ application of the appellant Company on the ground of lack of jurisdiction. After examining clause 2 of Article 226 and various earlier judgments of the Court, it held that, it was not only the existence of bundle of essential facts which was necessary to constitute cause of action for a party to maintain a writ application in a High Court, it was also essential that the bundle of facts must be „material‟, „integral‟ or „essential‟ part of the lis between the parties. In this context the Apex Court in paragraph 36 of the judgment noticed the views of the Court in the case of Union of India Vs. Adani Exports [AIR 2002 SC 126] in the following words :-
"Allowing the appeal and setting aside the order of the High Court, the Supreme Court held that none of the facts pleaded by A constituted a cause of action. "Facts which have no bearing with the lis or dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned."
Finally the Apex Court concluded the issue with the following observations made in paragraph 41 thereof :- 20 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 20 / 22 "From the aforesaid discussion and keeping in view the ratio laid down in catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the petitioner-appellant, would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential, or integral part of the cause of action. It is no doubt true that even if a small fraction of the cause of action arises within the jurisdiction of the Court, the Court would have territorial jurisdiction to entertain the suit/petition. Nevertheless it must be a „part of cause of action‟, nothing less than that."
Thus, considering the two judgments of the Apex Court, relied upon by the respective parties, it is clear that, to maintain a writ application in a High Court, a party must not only establish that the „bundle of facts‟ of the case, for constituting the cause of action, arose within the territorial jurisdiction of that High Court, it must also established that the said „bundle of facts‟ was „material, essential or integral part‟ of the lis between the parties.
In the present case, except for receiving a communication from the respondent Corporation at Patna for 21 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 21 / 22 collecting the EMD as a consequence of cancellation of tender, not one event of the entire transaction had happened within the jurisdiction of this Court. As such in the opinion of this Court no cause of action arose to the petitioner in the matter to confer jurisdiction on this Court to entertain this writ application on merits.
In the circumstances, this Court finds that on both counts i.e. on the ground of jurisdiction as well as on the ground of merits, petitioner is not entitled to have any relief from this Court.
Before parting with the case, it is appropriate to notice that present writ application was filed on 23.08.2011 and was taken up on 19.10.2011, when the notices were issued to the respondents and interim order was passed restraining the respondents from issuing fresh notice inviting tender for the work. The matter has remained pending since then and now, on the date when it is being disposed of, yet another monsoon has set in. The work by its nature is an urgent work, and requires utmost expedition in award of 22 Patna High Court CWJC No.13957 of 2011 dt.06-08-2012 22 / 22 contract and its execution. Facts of the case, as noticed above, show that the respondents themselves have also been responsible for much delay in the matter. The work of protection/strengthening of the banks of the water channel can now be taken up only from November/December i.e. after the monsoon is over. Hence, it is expected that, at least this time, the Corporation will proceed with the matter expeditiously and award the contract and execute agreement without any delay so that the party assigned with the work may commence with it with the end of this monsoon season itself and complete it before the monsoon of the next year sets in.
The writ application is dismissed.
(Jayanandan Singh, J) Arvind/-