Supreme Court - Daily Orders
Ijm Corporation Berhad vs National Highways Authority Of India on 5 July, 2022
Bench: Indira Banerjee, J.K. Maheshwari
ITEM NO.2 COURT NO.2 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 10811/2022
(Arising out of impugned final judgment and order dated 12-05-2022
in WPC No. 7329/2022 passed by the High Court of Delhi at New
Delhi)
IJM CORPORATION BERHAD Petitioner(s)
VERSUS
NATIONAL HIGHWAYS AUTHORITY OF INDIA & ANR. Respondent(s)
(IA No.85984/2022-EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT and IA No.86072/2022-EX-PARTE STAY )
Date : 05-07-2022 This petition was called on for hearing today.
CORAM : HON'BLE MS. JUSTICE INDIRA BANERJEE
HON'BLE MR. JUSTICE J.K. MAHESHWARI
(VACATION BENCH)
For Petitioner(s) Mr. Ranjit Kumar, Sr. Adv.
Mr. Adhip Kumar, Adv.
Ms. Ankita Sinha, Adv.
Mr. Abhishek Singh, AOR
For Respondent(s) Mr. Parag P. Tripahti, Adv.
Mr. Ankur Mittal, Adv.
Mr. Abhay Gupta, Adv.
Mr. Anirudh Dusaj, Adv.
UPON hearing the counsel the Court made the following
O R D E R
This special leave petition is against a judgment and final order dated 12.05.2022 passed by the High Court of Delhi dismissing Writ Petition (Civil) No.7329 of 2022 filed by the petitioner.
Signature Not VerifiedDigitally signed by GULSHAN KUMAR ARORA Date: 2022.08.01 16:27:17 IST Reason: Pursuant to a notice dated 07.10.2021 issued by the National Highways Authority of India, hereinafter referred to as NHAI, inviting bids for the six laning of the Kagal – Satara Section of 2 the National Highway(NH)-48 earlier numbered as NH-4 (Package-I from KM 592.240 to KM 658.000) in the State of Maharashtra under the Bharatmala Pariyojana Scheme, the petitioner submitted its tender.
It is the case of the petitioner that in spite of the fact that the petitioner had fulfilled the eligibility criteria of the RFP (Required for Proposal) and quoted high premium, all of a sudden, the NHAI annulled the tender process on 30.03.2022 without assigning any reason and against the extant policy guidelines. On the following day, the website of the respondent authorities indicated that the tender process had been annulled for administrative reasons.
Mr. Ranjit Kumar, learned senior counsel appearing on behalf of the petitioner emphatically argued that the action of the NHAI in annulling the tender process was totally arbitrary and unreasonable.
The petitioner filed a writ petition (C) No. 6027 of 2022 in the High Court of Delhi. The High Court passed an order dated 12.04.2022 recording the submission of the respondent that the respondent would provide reasons for cancellation of the tender process within a week. In case the petitioner wished to inspect the original records in relation thereto, the same might be provided by the respondents. If the petitioner was still aggrieved by the reasons disclosed, it would be open to the petitioner to take appropriate measures in that regard.
3
By a communication dated 02.05.2022, the NHAI informed the petitioner that the NHAI had been expecting premium at the rate of 10.77 per cent. NHAI’s Board did not agree to the proposal of award of the project to the petitioner and directed restructuring of the project and rebidding.
In the Special Leave Petition, it is contended that the expectation of the NHAI was not even disclosed in the tender documents. The notice inviting tender dated 07.10.2021 or even the revised RFP issued in January, 2022 did not indicate that the expected premium was 10.77 per cent, as later claimed. It was contended that NHAI was purporting to change “the rule of the game” when the game had already started. In case the NHAI had expectations, the same should have been communicated to the prospective bidders. It was argued that in case of Public Private Partnership (PPP) projects in the road sector under the Build Operate and Transfer (BOT) System (Toll Model), the Concessionaire incurs the entire cost of construction of the road. Thereafter the Concessionaire at its own costs operates and maintains the road and thereafter at the end of the concession period, transfers the entire asset to the NHAI. The concessionaire recovers the entire cost of construction, operation, maintenance etc. along with reasonable profits by collecting toll. It is contended that the NHAI without investing any money gets a duly constructed and maintained road at the end of the concession period which can further be used for commercial exploitation.
4The petitioner, once again, approached the High Court by filing Writ Petition (C) No. 7329 of 2022 which has been dismissed by the judgment and final order impugned in this Special Leave Petition. The High court was of the view that there was no merit in the contention of the petitioner that the respondent authorities have changed the rules of the game by estimating premium at 10.77 per cent which had not been communicated to the prospective bidders in advance. The Court was of the view that the petitioner had no right to be privy to the commercial estimation and decision that the respondent might arrive at, as that was a matter over which the respondents were entitled to maintain confidentiality to safeguard their financial interest. Non-supply of minutes of the meeting (153rd) of the Board of the NHAI could not be raised as a grievance by the petitioner. The High Court observed :-
“We have no reason to doubt the stand taken by the respondents in the aforesaid communication dated 02.05.2022. Even before opening the petitioner’s financial bid, the respondents had estimated the premium that would be acceptable to them in its 153rd meeting on 22.12.2021. The respondents, to give a fair chance to the petitioner, despite being the sole bidder, proceed to open the financial bid of the petitioner and found that the financial bid of the petitioner did not meet the expectations of the respondent no.1. In that background, the respondents have proceeded to cancel the tender in process. The conduct of the respondents, therefore, appears to be reasonable and bona fide.
8. The tender process takes several months to get concluded. In this case itself, the tender was floated on 07.10.2021. The respondents administratively decided on the estimated premium on 22.12.2021, while the Bid of the petitioner was received only on 24.01.2022. It was not at all necessary for them to communicate the premium that the respondent no.1 reasonably expected from the 5 bidders participating in the tender process, as that could have impacted the bids that the respondent may receive. If the estimated premium of 10.77% had been communicated, a bidder, who may be intending to offer higher premium, may have offered the premium in the same range, thereby causing loss to the public exchequer. We, therefore, do not consider it to be a case of change of rules of the game, midway. It is always open to the entity floating the tender to determine for itself, what it considers to be a reasonable bid expected in such tender. This exercise can be undertaken by it anytime during the tender process, as no vested right to award of tender is created in favour of any party only because it is found to be L1 or H1 in the tender, as the case may be. The entity floating the tender can at any time decide to withdraw the tender, provided the same is for valid and germane reason and, not actuated by any malice. In the present case, we do not find any such case of arbitrariness or malafide made out by the petitioner.” Apart from the reasons recorded by the High Court, this Court finds that a tenderer has no right to question the cancellation of the tender process or the action of the employer not to accept a single tender. Moreover, our attention has been drawn to the tender documents and, in particular, Volume I of the revised RFP, that is, bid documents for International Competitive Bidding under a Single Stage Bidding Process will be precisely for six laning of Kagal – Satara Section of NH-48 under the Bharatmala Pariyojana.
Clause 2.16 provides that notwithstanding anything contained in the RFP, the Authority reserves the right to reject any bid and to annul the bidding process and reject all bids at any time without any liability or any obligation for such acceptance, rejection or annulment, and without assigning any reasons thereof. In the event the NHAI rejects or annuls all the bids, it may, in 6 its discretion, invite all eligible bidders to submit fresh bids hereunder. Clause 3.8.2 of the Bid document clearly provides that in the event highest bidder withdraws or is not selected for any reason, the authority shall annul the bidding process and invite fresh bids. In the event the authority rejects or annuls all the bids, it may, in its discretion invite all eligible bidders to submit fresh bids.
The NHAI had clearly reserved to itself the right to annul the bidding process. Clause 6.2 provided that the NHAI might have sole discretion and without incurring any obligation or liability, suspend and/or cancel the bidding process and/or amend and/or supplement the bidding process or modify the dates or other terms and conditions relating thereto.
The petitioner submitted its tender in terms of the RFP and obviously after going through the terms and conditions of the RFP. It is not open to the petitioner to question the annulment of the tender process.
This Court is also unable to accept the emphatic submission of Mr. Ranjit Kumar, learned senior counsel that the rejection is totally arbitrary and unreasonable. The decision has apparently been taken having regard to the financial interest of the NHAI. However, it is not necessary for this Court to go into the calculations presented by Mr. Parag P. Tripathi, learned senior counsel appearing on behalf of the NHAI since this Court does not sit in appeal over the merits of an administrative decision to 7 annul the tender process, in a Special Leave Petition arising out of an application under Article 226 of the Constitution. The special leave petition is, accordingly, dismissed. Pending applications, if any, also stand disposed of.
(GULSHAN KUMAR ARORA) (MATHEW ABRAHAM)
AR-CUM-PS COURT MASTER (NSH)