Calcutta High Court (Appellete Side)
Bkb Transport (P) Limited vs Damodar Valley Corporation & Ors on 5 August, 2011
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose, Soumen Sen
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IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
AST 607 of 2010
ASTA 232 of 2010
M.A.T.No. of 2010
C.A.N. No. 9601 of 2010
W.P.No.18884(W) of 2010.
IN THE MATTER OF:
BKB TRANSPORT (P) LIMITED
Vs
DAMODAR VALLEY CORPORATION & ORS.
BEFORE
The Hon'ble Justice PINAKI CHANDRA GHOSE
AND
The Hon'ble Justice SOUMEN SEN
For the Appellant : Mr. Saptangshu Basu, Adv.
Mr. Kishore Dutta, Adv.
For the DVC : Mr. Pradip Tarafdar, Adv.
For the Addition of Party: Mr. Arunava Ghosh, Adv.
Mr. P.B. Choudhury, Adv.
Mr. Anant Kr. Shaw, Adv.
Mr. Ravi Kr. Dubey, Adv.
Ms. Suparna Sinha, Adv.
Mr. Mainak Ganguly, Adv.
Heard On : 06.01.2011, 19.01.2011, 02.03.2011
& 19.05.2011
Judgment On : 05.08.2011
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PINAKI CHANDRA GHOSE, J.: The instant appeal is arising out of an order
dated 9th September, 2010 of refusal to pass an ad interim order of injunction
restraining the respondent authorities not to give effect and/or further effect to
their letter dated August 30, 2010 as also to restrain them from inviting any fresh tender covering the subject-matter of tender notice No. BT/B (O&M)/PH(C)/TR/1051 dated 21st January, 2010 issued by the respondent No.4.
The learned Single Judge although admitted the writ petition but had refused to pass any ad interim order in favour of the writ petitioner and hence the instant appeal.
By consent of the parties we have taken up for hearing the writ petition itself. The writ petitioner is engaged in the business of transportation of various articles including fly ash generated at the Thermal Power Stations.
In or about 21st January, 2010, the Bokaro Thermal Power Station of Damodar Valley Corporation issued a tender notice inviting bids for evacuation of ash from the ash ponds of Bokaro Thermal Power Station, Damodar Valley Corporation including nuisance free transportation and disposal of ash in abandoned mines of Central Coalfields Limited.
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One of the qualifying criteria for participating in such tender is that the tenderer should have an experience of having executed similar work during last seven years ending December, 2009.
The expression "similar work" has been defined in the manner following:
"'similar work' means executed/completed work of evacuation of ash generated from Thermal Power Plants only by using machinery and its annoyance free transportation/disposal".
In response to the said tender, the writ petitioner submitted its bid in two parts, namely, techno commercial bids and price bids. The petitioner qualified in the techno commercial bids. Subsequently on 7th May, 2010, the petitioner was informed by the respondent authorities that the price bids of the petitioner would be opened on 11th May, 2010. The price bid of the petitioner was found to be the lowest. Thereafter, the petitioner was asked to furnish analysis of rates quoted against each item by the respondent on 12th May, 2010 which on following 17th May, 2010 the petitioner provided such analysis of item wise quoted rate. Thereafter, on 18th May, 2010 the petitioner was requested to attend "rate negotiation meeting". The purpose of the said meeting is to have a negotiation in respect of the "offered rate" against "referred NIT" which according to the notice was to be held in the chamber of Chief Engineer and Project Head, DVC, BTPS. The petitioner duly attended the said meeting. The petitioner claims that upon such negotiation, a negotiated price was arrived at and the same was accordingly accepted by the tender committee and such negotiated price was accordingly finalized. After the said meeting while the petitioner was eagerly waiting for the 4 Work Order to be issued in respect of the said tender, the petitioner was shocked and surprised to receive a very cryptic communication dated 30th August, 2010 intimating that the DVC had cancelled the said tender. The said cryptic communication reads as under:
Sub:- Cancellation of the tender Ref: - NIT No. BT/B(O&M)/PH(C)/TR/1051 dated 21/01/2010 "All the offers/tenders received against above referred NIT for the work Evacuation of ash from Ash Ponds of BTPS, DVC, Bokaro including nuisance free transportation and disposal of ash in abandoned mines of CCL is hereby cancelled."
Being aggrieved by the said cancellation, the petitioner filed the writ petition being W.P.No.18884 (W) of 2010 challenging the letter no. BT/B(O&M)/PH(C)/TR/314 dated 30th August, 2010, the letter no. EM&PC Ash Eva/CT/BT/181 dated 30th August, 2010, the approval of the Works and Supply Tender Committee-II of Bokaro Thermal Power Station dated 30th August, 2010 and the refusal to issue the Work Order in favour of the petitioner pursuant to the notice inviting Tender bearing No. BT/B(O&M)/PH(C)/TR/1051 dated 21st January, 2010.
In the said writ petition, by an order dated 9.9.2010, the Hon'ble Justice Jayanta Kumar Biswas was, inter alia, pleased to direct the respondents to file 5 their affidavit in opposition within 5 weeks and directed the petitioner to file affidavit in reply 1 week thereafter.
The said respondent authorities after passing of the order dated 9.9.2010 issued another notice inviting Tender bearing No.BT/B(O&M)/PH(C)/TR/347 dated 13.9.2010 for the same work by changing the Qualifying Requirement in respect of similar work, which now reads as "('Similar work' means 'Experience in ash/Earthwork in embankment/filling')".
The respondents filed an affidavit in connection with the stay petition. In the affidavit it is admitted that the writ petitioner was one of the tenderers along with two other tenderers, namely, Hindusthan Steel Works Construction Limited and Calcutta Industrial Supply Corporation.
The said two bidders according to the respondents had also duly qualified in the techno commercial bid. The respondent authorities, however, contended that upon scrutiny of relevant bid documents, the office of the Chief Vigilance Officer formed an opinion that only a few contractors have so conducted themselves that there was a cartel formation which in effect was controlling the award of contract for - "ash evacuation" etc. DVC also came to the conclusion that the amount DVC paid for such work is exorbitantly high and this would be a clear drainage of public exchequer if the formation of such cartel is not stopped. DVC thereafter started collecting data and subsequently realised that the work to 6 be executed under the said tender does not require any technical skill and expertise and the operations that are involved for evacuation and handling of ash could be handled by any organization and/or entity who are competent and/or experienced in handling ash or earth in bulk.
It is being further contended that there has been a policy decision for promoting integrity, transparency, equity and competitiveness in the various tendering processes undertaken by DVC in terms of certain guidelines issued by Chief Vigilance Commission (CVC). The respondents were required to formulate and finalize qualifying requirements after considering all aspects including practices being followed in other similar organization like NTPC in order to generate maximum participation in the tender by formulating qualifying requirements in respect of transportation and evacuation of ash in such a manner that cartel formation is discouraged and more bidders could participate . In the meeting in which such policy decision purported to have been taken it was discussed and decided that the restrictive qualifying requirements has to be changed and the NIT is required to be withdrawn and to make interim arrangements. Such meeting purported to have been held on 31st July, 2010. The respondent authorities relied upon a document which is marked as R1 claiming that it is a photocopy of the minutes of the relevant meeting dated 31st July, 2010.7
The respondent authorities in this regard had relied upon the xerox copy of a communication issued by Devendar Singh, Chairman. Although it is claimed that it is a photocopy of the minutes of the relevant meeting dated 31st July, 2010, the said document only records the instructions given by the said Chairman to DVC.
It appears from the said Annexure R1 that following a complaint from one S.K. Singh, MP forwarded by PMO to DVC, the CVO. DVC sent a report dated July 14th 2010 to Ministry of Power making certain recommendations. The said recommendations have already been summarized in the preceding paragraph.
It appears that in a meeting held on 11th May, 2010, a decision was taken regarding restrictive nature of QRs in the NITs relevant portions whereof are set out hereinbelow:
"In the case of award of work of evacuation of ash from different ash ponds at MTPS, DVC, the CVC has already observed that QRs prescribed in NIT were restrictive in nature. As instructed the QRs have to be changed in view of the CVC's observation and also the recommendation of QR Committee as contained in its report dated 07.01.2008."
"In order to discourage cartel formation, the QRs in respect of evacuation & transportation of ash should be formulated in such a way that the entry of new bidders is facilitated and the 'cartel 8 formation' is discouraged and stopped. Restrictive QRs be changed and NIT issued be withdrawn and interim arrangement be made, but this process as decided in the meeting on 31.7.2010 should not take rest more than 3 months."
The respondent authorities further elaborating on formulation and finalization of the qualifying requirements and the competitive nature of the writ had referred to three entities, namely, M/s. BKB Transport, M/s. R.K. Transport and MS Naween Transport having secured contract in their favour for BTPS and CTPS over the years with prices rising every time and it is being contended that it would appear from the pattern of such offer and continuous rice in prices that all of them had indulged in cartel formation amongst themselves. The respondents in Paragraph VIII had furnished a table in support of their contention that the said three entities were indulging in cartel formations.
The respondents in order to bring transparency, integrity and discourage cartel formations have decided to cancel the said tender. The same was done with a view to achieve competitiveness and generate maximum participation in such public tender. The respondent would refer to similar kind of problem being faced by Brakeshwar Thermal Project of West Bengal Power Development Corporation and would contend that such Corporation also had cancelled its tender and changed the prequalification clause with a view to bring transparency, more credibility and competitiveness and as a result of such change of the prequalification clause more entrepreneurs became eligible and the 9 accepted bid was reduced by 53 percent lower than the previous rate. The respondent authorities have further relied upon a communication received from the Ministry of Power, Government of India dated August 18, 2010 addressed to the Chief Vigilance Officer, DVC in which DVC was specifically directed not to finalise any new tender with restrictive qualifying requirements and in case in such issues the same should be withdrawn. Thereafter, the Deputy Chief Vigilance Officer, DVC with the approval of the Chief Vigilance Officer issued a confidential note to the Secretary, DVC on August 24, 2010, requesting him to take further necessary action towards implementation of the aforesaid advice of the Ministry of Power. It was only thereafter that on August 30, 2010the Superintendent Engineer(DVC) communicated the said decision to cancel the said NIT dated January 21, 2010.
"It was only thereafter on September 13, 2010, the respondent No.4 issued a NIT bearing No.BT/B(O&M)/PH(C)/TR/347 for the said work namely evacuation of ash from Ponds of BTPS, DVC, Bokaro etc. In the said NIT dated 13.9.2010 the respondent No.4 had published a qualifying requirement containing inter alia that the intending bidders should have executed similar nature of work with Govt./semi Govt./PSUs/reputed organizations of having completing similar works during last 7 years ending 31.8.2010 wherein similar works means experience in ash/earth work in embankment/fillling. In this connection Clause 1.1 i.e. Qualifying requirement of the NIT dated 13.9.10 may be reproduced hereunder:
"Similar Work" means "Experience in ash/earth work in embankment/filling".10
"The NIT dated 13.9.2010 contains inter alia the following terms & conditions under the heading 'special conditions of contract' namely Clause 5 which specifically states that. "The contractor shall have to ensure nuisance-free and pollution-free transportation and dumping of evacuated ash. To effect this he will have to cover the ash in dumper with tarpaulins/strong polythene sheets or by other approved means during transportation to ensure no leakage/no spillage of ash. He will also employ watering arrangement at excavation site as well as dumpting site to prevent air pollution and resultant nuisance. In addition he will have arrangement to sprinkle water and keep the haulage root clear. No separate payment will be made on this account."
The respondents contend that it would be clear from the aforesaid clause that the experience or expertise used in ash handling and earth handling are not substantially and characteristically different. In both the cases it is contended, covering of the loaded dumper as well as sprinkling of water and making provisions for adequate water arrangement are required inasmuch as, in both types of job, that is, fly ash in case of ash and dust of dry earth are required to be contained and prevented from being released in the atmosphere by way of covering the loaded vehicles as well as by sprinkling of water. On this basis, it is contended that the relaxation that was introduced in the tender issued on 13.9.2010 are not arbitrary or unreasonable. The said tender is clearly intended to destroy the unholly nexus between the parties who are forming cartel and reaping undue benefits of monopoly and/or oligopoly. The respondents have 11 also question that maintainability of the writ petition on the ground that the terms of the invitation to tender are not open to judicial scrutiny and the Court cannot whittle down the terms of a tender as they are in the realm of contract unless they are arbitrary, discriminatory or actuated by malice.
In support of the aforesaid contention, the respondents have relied upon the following judgments.
(i) Global Energy Ltd. & Anr. -versus- M/s Adani Exports Ltd. & Ors. reported in JT 2005(5) SC 121;
(ii) Tata Cellular -versus- Union of India reported in (1994) (6) SCC 651 (Para. 94);
(iii) Air India Ltd. -versus- Cochin Internation Airport Ltd. reported in (2000) 2 SCC 617 (Para. 7).
(iv) Directorate of Education -versus- Educomp Datamatics Ltd. reported in (2004) 4 SCC 19 (Para.12)
(v) S.S. & Company - versus- Orissa Mining Corporation Ltd. reported in (2008) 5 SCC 772 (Paras.8,22,23 to 27) The respondent further contended that the Corporation is the best judge of its interest and it is always open to the Corporation to modify or change the eligibility criteria so as to achieve the best result. Whenever a change is introduced in the eligibility criteria either by introducing some new conditions 12 and/or restricting or altogether doing away with certain previous concessions it might hurt the interests of some one or the other but for that reason the change(s) made in the eligibility criteria can not be termed as mala fide. The respondent in this regard relied upon the judgment reported in 2008 5 SCC 772 (Paras. 8,22,23 to 27)(S.S. & Company -versus - Orissa Mining Corporation Ltd.).
The learned Counsel on behalf of the respondents further argued that DVC arrived at a clear finding that the tender job did not require any technical expertise or skill of any grade and the operation that is involved for evacuation and transportation of ash was relatively simple and can be handled by any organization/entity having experience in handling ash or earth in bulk. In fact, the condition of tender specifically provides that the tenderer has to cover the ash in dumper with tarpaulins/strong polythene sheets or by other approved means during transportation to ensure non-leakage/non-spillage of ash and to employ watering arrangement at excavation site as well as dumping site to prevent air pollution and resultant nuisance and in addition he will have arrangement to sprinkle water and keep the haulage route clear. These can be done by any party having sufficient financial strength and no technical expertise is required. It is the finding of DVC that the other power generating organizations have introduced these identical qualifying requirements by incorporating earth and thereby reduced cost by 53% and thereby saved huge public money. It is worth- mentioning here that the appellant had participated in tender process of Bakreswar Thermal Power Project of the West Bengal Power Development 13 Corporation Ltd. In which earth was incorporated in the qualifying requirements as in the present case but the appellant never raised any objection regarding the said tender of the West Bengal Power Development Corporation Ltd. In fact, the appellant had never challenged the Clause 5 of the NIT and as such, incorporation 'earth' in the qualifying requirement cannot be challenged by them. Moreover when the appellant has not been discriminated against but only put to fair and healthy competition with larger participation, which is entirely for public benefit and public interest and aimed at prevention of formation of cartel in government jobs. The writ petitioner cannot make any complaint of discrimination and arbitrariness. The respondents this regard is placed reliance on the judgment of the Hon'ble Supreme Court reported in the case of SHIMNIT UTSCH INDIA PVT LTD. -Versus- W.B. TRANSPORT INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. (2010) 6 SCC 303 (Paras.49,50,51,52,64). It is worthwhile to mention that for the tender of Rihand Super Thermal Power Project for the work of area development by using pond ash vide NIT dated 25.01.2006, the qualifying requirement was that the bidder should have experience of having successfully executed work of ash filling/earth work. In that view of the matter, it is clear that DVC has not acted in any arbitrary or unreasonable manner in changing the qualifying requirements during the progress of the tender and such change has been incorporated for public benefit and public interest.
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In substance the respondents contend that such relaxation has been introduced in larger public interest which would only save the Government exchequer but also making the said public tender competitive by eliminating the evils of cartel in such public tender.
The appellants in reply contended that there are essential difference between the qualification required under the first tender, namely, the NIT dated January 21, 2010 and the subsequent NIT dated September 13, 2010. It is being contended that for the same work the respondent authorities have deliberately changed the qualifying requirement so as to accommodate favoured few and although ostensibly it is for discouraging cartel and saving public exchequer but the real purpose is something else and to accommodate them favoured few at the dictation of MP and MLA.
It is being contended that Fly ash is a highly polluting substance and it requires nuisance free transportation. Nuisance free transportation is a highly specialized job and requires technical skill and expertise.
Section 8 of the Environment (Protection) Act, 1986 inter alia provides that persons handling any hazardous substance shall do so after complying with such safeguards as may be prescribed. Under Section 2(d) of the said Act, 'handling' includes transportation. The Ministry of Forests and Environment, Government 15 of India has prescribed such safeguards. Those have to be complied for nuisance free and pollution free transportation.
The work being "nuisance free and pollution free transportation and dumping evacuated ash, the same can not be compared with earth handling. Earth handling does not require nuisance free and pollution free transportation. Such parameters are not applicable in case of ash handling or earth handling. The are substantially different and can not be compared for fixing and/or formulating the tender condition.
Fly ash transportation is a specialized job requiring special skill whereas transportation of earth, sand and coal is made in ordinary trucks and dumpers and therefore contractors having experience in excavation of earth, sand and coal can not be treated to have the requisite experience for excavation and transportation of fly ash from ash pond to abandoned mines.
The appellants further contended that there is concluded contract in respect of the NIT dated 21/1/2010 and the same could not have been unilaterally terminated unless some statute steps in. The appellants in this regard relied upon a decision reported in (2006) 1 SCC 715.
The petitioner said that the qualifying requirement in the Notice inviting Tender dated 21.1.2010 has already been upheld by this Hon'ble Court in 16 W.P.No.410 (W) of 2008 (A.S.T.No. 15 of 2008) in connection with a previous Tender Notice No. MT/PH(C )-14(Tender)/1417 dated 29th November, 2007 wherein, by an order dated 8th January, 2008, the Hon'ble Justice Dipankar Datta was pleased to observe that the Court did not find any reason to interfere with such eligibility criteria and that such eligibility criteria was not found to be unreasonable. The respondents having accepted the order of His Lordship the Hon'ble Justice Dipankar Datta and having not challenged the same can not take a contradictory stand in the present case.
The appellants further contend that the order of cancellation under challenge has to stand or fall on the basis of what is recorded therein and the said reasons could not be supplemented by furnishing documents which are not even referred to in the order under challenge. Public orders made for public purpose are meant to have public effect and must be construed objectively with reference to the language used in the order itself. The petitioner relied upon the decision of the Hon'ble Supreme Court repored in (1978) 1 SCC 405 - Mohinder Singh Gill Vs Election Commissioner is relied in this regard.
The learned Counsel for the appellant by making reference to the undated office note submitted that such alleged note was prepared in the month of August, 2010 by the Chairman. After the tender process was finalized on 20.5.2010 upon negotiation and acceptance of the offer of Petitioner. Such office note can not nullify a tendering process which stood concluded on 20.5.2010. 17 Even if applicable, the said office note being prospective in operation, it does not and should not apply in a case where the tender process stood concluded otherwise it would resulted in arbitrariness and a successful tenderer would have to face the whims and caprice of the respondent authorities.
The undisclosed instructions of CVC on Such CVC Guidelines or CVC directions does not apply in cases of tender involving specialized jobs. The CVC Guidelines which can not be implemented by the respondents blindfolded without considering the special nature of the job and that the fly ash is a pollutant.
The allegation that the petitioner, M/s. R.K. Transport and M/s. Naween Transport are securing the contracts from BTPS and CPTS by forming cartel are baseless. The respondents were under no compulsion to accept the offers and had the liberty to reject the offers. After accepting the offers in the respect tenders the respondents are estopped from making such wild and reckless allegations.
It is agreed that reliance upon a letter dated 18.8.2010 of the Under Secretary of the Government of India to justify its action is thoroughly misconceived and baseless. Such letter relates to new tender with restrictive qualifying requirement and does not apply in cases where the tender process has 18 been finalized and had proceeded to its completion before 18.8.2010. Such letter can not be applied in respect tenders for a specialized job.
The appellants would contend that the reliance on Clause 3.9 of the general conditions of contract are thoroughly misconceived and do not apply to the facts and circumstances of the case. The letter dated September 9, 2010 was issued without considering the situation which compelled to the respondents to frame the qualifying requirement contained in the notice inviting tender dated January 21, 2010. The said criteria was followed by the respondent authorities since 1999 and they are fully aware of the specialized nature of the job. In fact, prior to 1999 when there was a generalized qualifying requirement to handle such ash pollutant there had been resentment amongst the local people residing on the road side due to pollution created by transportation of such fly ash.
It is being argued that undue emphasizes have been laid in the maximization of participation to be a ground for changing a qualifying requirement in detail disregard to the fact that fly ash is a highly polluting substance and nuisance free transportation is a highly specialized job which requires technical, skill and expertise. Maximization of participation per se could not be a ground for changing and/or altering qualifying requirement ignoring the aforesaid facts and other extenuating circumstances.
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The appellants in substance would submit that the act of the respondent authorities are clearly arbitrary, whimsical, discriminatory and actuated by mala fide with the sole object of favouring a few.
In the appeal two applications have been filed one by M/s. BLA Projects Private Limited and M/s. Ramlal Agarwal.
In the said applications, the applicants have elaborated on the part of the DVC to relax the restrictive qualifying requirements in such tender process. The applicants have relied upon in addition have been contended by DVC that the Vigilance Commission headed by Sri Tapan Adhikari, Manager/Vigilance, gave his report. Concluding portion whereof bids as read in Clause 6.
"In view of the facts, it is finally observed that in spite of clear recommendation of the reconstituted Qualifying Requirement Committee with regards to widening of the scope of "similar work from Ash to Earth and subsequent admission of W&STC in its meeting dated January 7, 2008 and February 22, 2008, the decision was suddenly changed by the W&STC-I in its meeting dated March 11, 2008. However, record reveals that there was no substantial change in the facts."
The applicants further contended that Sri Subrata Biswas, Secretary and subsequently became Chairman of DVC was actively involved in procuring the said contract for the appellants and/or it is grouped by keeping the qualifying requirements restrictive.
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It is being argued on behalf of the applicants that the present appellants have suppressed the entire fact of vigilance report against erstwhile Secretary Sri Subrata Biswas and subsequently Chairman where the said Biswas had ignored the fact that such restrictive clause should be relaxed to avoid such cartel formation and drainage of public money. The applicants have drawn our attention to page 67 of the application for attention of parties in which one of the applicants, namely, BLA Projects Private Limited had initiated a proceeding under the provisions of the Right to Information Act, 2005 with regard to various irregularities committed by Sri Subrata Biswas taking advantage of his position as Secretary and subsequently Chairman. It is being contended that in response to the said information in the report furnished by Sri K.C.Kedia, Under Secretary to Government of India and CPIO(V&S), it was stated that "The information sought is denied for the present under Section 8(1)(h) of the Act; the process of proceedings against the officer being under way. It may, however, be mentioned that the charges relate to irregularities in the tendering process of evacuation of ash from ash ponds of MTPS, DTPS and BTPS of DVC using restrictive practices, and the action has been initiated on the advice of CVC".
The applicants have further contended the necessary parties since had contested the NIT dated January 21, 2010 which was subsequently cancelled on August 30, 2010. The said applicants have also contested the notice inviting tender dated September 13, 2010 and it is being contended that if the notice of 21 cancellation dated August 30, 2010 is set aside and/or quashed the applicants would suffer badly.
The applicant urged that the Court should not interfere with the decision to cancel the said tender. The Court should also not extend its arm in judicial review in such contractual matters since such order of cancellation was made to prevent arbitrariness and favouritism in this regard the said applicants have relied upon the following decisions:
(i) Terms and conditions of the tender - judicial review not permissible (2005 Vol.4 SCC Page 435 at Para 10 at Page 441).
(ii) Principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness and favouritism (2005 Vol.6 SCC Page 138 at Paras 11, 12, 13, 15 at Pages 147 and 148).
(iii) Court can only interfere where the decision making process would reveal arbitrariness (2000 Vol.2 SCC Page 617 at Para 7 at Pages 623 and
624).
(iv) High Court was not justified with interfering with the order of cancellation of tender (2007 Vol.1 SCC Page 477 Para 10 at Pages 483 and 485).
(v) Court to exercise judicial restraint when authority decides to cancel a tender (2007 Vol.2 SCC Page 588 at Paras 37, 40, 41, 47, 53, 55, 56, 58, 61, 63 and 64 from Page 603 onwards).22
Sri Saktinath Mukherjee, learned Senior Counsel appearing along with Sri Saptamanshu Basu and Kishore Dutta submitted before us that the respondent corporation was induced to alter the said qualifying requirements on the basis of the letter issued by the MLA. He has drawn our attention to the letter issued by the leader of the Congress Legislative Party on 7th July, 2010 and submitted before us that if the said letter is compared with the letter dated 3rd August, 2010, which is being issued by one of the unsuccessful tenderers, it would be clear that they are instrumental in cancellation of the tender under challenge.
The fourth paragraph in the letter dated 7th June, 2010 issued by Sri Manas Ranjan Bhunia is reproduced hereinbelow:
"Hence, the Management has tampered with the meaning of similar nature of work and restricted the work for ash only, thus, monopolizing and extending undue advantage of the above contractors."
The same paragraph has been repeated in the complaint dated 3rd August, 2010, by one of the unsuccessful tenderers, namely, BLA Projects Private Limited at Page 154 of the said petition which is reproduced hereinbelow:
"Hence the Management has tampered with the meaning of similar nature of work and restricted the work for ash only, thus, monopolizing and extending undue advantage of the above contractors."23
Mr. Mukherjee further submits that two page instruction issued by the Chairman which is R1 to the affidavit in opposition is a personal opinion of the said Chairman and does not reflect the view of the committee that was constituted for the purpose to finalize the terms of the said tender. In this regard, he has relied upon the letter dated 28th June, 2010 that was issued by the Additional Secretary of the concerned Ministry Sri S.S.Prasad where he has reiterated that upon review of the earlier Qualifying Requirement, the committee recommended that there should be a change in the definition of similar work, relevant portions of the said communication are set out hereinbelow:
"The earlier Qualifying Requirement (Q.R.) of tender for evacuation of ash and transportation of the same from Power Plant to different places for disposal of ash was fixed by DVC considering the need at that time. After awarding the contract and during transportation of ash from Power Plant to different places for disposal, a huge resentment was expressed by the local people residing by the road-side due to mixing of fly ash with the air causing air pollution. On different occasions, transportation of ash was stopped by the road-side dwellers and created severe law and order problems in the form of launching mass agitation and blockade of roads approaching to the power Plant.
Considering the gravity of the situation, a decision was taken to review the Q.R. by a Committee, so that pollution can be controlled at the time of 24 evacuation of ash from the ash ponds and transportation of ash from Power Plant. Accordingly, the earlier Q.R. was reviewed by the Committee and the Committee recommended that earlier criteria should be changed with new criteria, which are as follows:
"Similar work means work of evacuation of ash generated from Thermal Power Plant only by using machineries and its nuisance free transportation and disposal in abandoned open cast mines in eco-friendly manner as per scope of work in the tender."
Such type of protection is being taken by other Power Plants also only with a view to control pollution at each and every step of its operational activities. The work of ash evacuation and transportation not only comprises of simple evacuation like that of earth from as ponds and its transportation, but it also comprises of nuisance-free loading, covering of ash loaded dumpers with tarpaulins, sprinkling of water of ash to prevent air pollution and also pollution- free unloading of the same. It is not taken care of, it will create unrest among the road-side dwellers nearer to the transportation point and will create serious law and order problem.
Under the above circumstances, transportation of ash cannot be compared with transportation of coal or other minerals & earth, where the degree of pollution is lesser than the above. In this connection, it may kindly be 25 appreciated that DVC invites open tender for the above work through press publication followed by hoisting NIT at its own website and as such, any contractor, having requisite Q.R., may participate in the tendering process without any hindrance."
Mr.Mukherjee further submitted that Damodar Valley Corporation is a statutory corporation constituted under the Damodar Valley Corporation Act. He has specifically referred to Section 4 which is an incorporation clause and other provisions of the said Act. It is being argued that the proposed change in the qualification criteria cannot be termed as a policy decision and the power of intervention in matters relating to such tender of DVC are entirely within the domain of DVC and the Central Government has no role to play. He further submitted that it is only in case of a change of policy decision that the Central Government may intervene and could be consulted in terms of Section 48 of the said Act.
It is being further argued that the said two page note relied upon by the DVC as R1 is not the minutes of the meeting, although it has been referred in the body of the affidavit as "a photocopy of the minutes of the relevant meeting dated 31st July, 2010". The Chairman does not have any authority to alter the terms of qualification and/or relax in such term when the Committee consisting of experts had specifically recommended the criteria for participating in such a specialized tender. He further submitted that the letter of Sri Prasad being the Additional 26 Secretary of the Ministry dated 28th June, 2010 clearly shows that a conscious decision has been taken not to alter the existing criteria. He has also drawn our attention to the fact that the order of cancellation dated 30th August, 2010 does not give any reason whatsoever. There is no denial of the negotiation meeting or that such meeting had ended without finalization of the rates. In fact, it has been specifically stated that in such meeting the rates of the petitioner were accepted. He submitted that although the negotiation meeting was held on 18th May, 2010, the successful tenderer was kept in the dark and no work order was issued by a cryptic communication dated 30th August, 2010, such tender was cancelled.
It is, thus, clear that such cancellation is completely arbitrary, mala fide and without any justification.
The Additional Solicitor General appearing on behalf of the respondent authorities accepted the position that R1 cannot be construed as the minutes of the meeting and it only refers to certain discussions held at some point of time. He tried to justify the new tender by referring to Clause 5 of the special conditions of contract in relation to the earlier tender of the stay petition at Page 120 to demonstrate that the same clause is also there in respect of the subsequent tender dated 3rd September, 2010. He submitted that since the same clauses are present in both the tenders and public exchequer would be saved considerably by relaxing such bid the Court should not interfere. 27
We have considered the rival contentions.
We find merit in this submission of Sri Mukherjee, learned Senior Counsel appearing on behalf of the petitioner. While we are aware of the limitations of the Court to interfere with the terms of the tender but at the same time we cannot shut our eyes in the manner in which the present tender was cancelled and a fresh tender was issued with modified terms. It is significant to note that the same qualification criteria came up for consideration before a learned Single Judge in W.P.No.410 (W) of 2008 (A.S.T.No.15 of 2008) in connection with a previous Tender Notice No. MT/PH (C) - 14(Tender/1417 dated 29th November, 2007). In which the learned Single Judge by an order dated 8th January, 2008 prima facie held that there is no reason to interfere since it is for the Corporation to decide the eligibility of bidders and the eligibility condition specified therein. It does not appear to this Court to be unreasonable. There is no challenge to the said interim order passed by the learned Single Judge. It is also relevant fact that although some hue and cry was raised with regard to the restrictive clause of the tender terms much after the writ petitioner was invited for rate negotiation, but the unsuccessful bidders have not challenged such restrictive bid clause. In fact, there is a detailed letter from the Additional Secretary of the concerned Ministry giving justification for not accepting the complaints made by the said MLA. The said Additional Secretary referred to a decision of the committee which is an expert body who had the occasion to apply their mind, inter alia, in respect of the qualification clause in respect of the said tender and the said 28 recommendation has been extensively quoted in the said communication dated 28th June, 2010. The said communication is in reply to a complain alleging irregularities by the said MLA on 7th June, 2010.
It is also significant to note that when DVC had fallen short of castigating his previous Managing Director, the proposed applicant seems to have taken up a battering against the said Managing Director and complained of loss of Government revenue, in the event the present tender is given to the writ petitioner. The proposed applicants were hopelessly ineligible and the acts complained regarding the restrictive clause were available to the said proposed applicants for the last several years. They did not complain at any earlier point of time and only after they became unsuccessful in the tender. They on the strength of the letter of the MLA tried to create an illusion of a cause of action for them which is completely unmeritorious and lacks bone fide. The subsequent decision of the DVC to cancel the contract must stand or fall on the basis of the cryptic communication dated 30th August, 2010 and no additional reasons could be supplied at this stage to deny the claim of the writ petition. The decision to cancel the contract cannot be termed to be a policy decision which calls for a exercise of power by the Central Government under Section 48 of the Damodar Valley Corporation Act. In an world where the environment is polluted by permitting indiscriminate emission of pollutants to the atmosphere and complete non-response attitude of the statutory authorities. It was the duty of the DVC authority to ensure that a successful tender should ensure nuisance free and pollution free transportation and dumping of evacuated ash in a proper manner. 29
The Committee constituted prior to the said tender also recommended the same for several reasons which would appear from the Additional Secretary dated 28th June, 2010. The sheet anchor of defence of DVC was the undated note of the Chairman sometimes in August, 2010, which in the face of it, did not address on the core issue of environmental hazard and solely devoted to the issue of cartel formation. It refers to recommendation of Q.R. Committee in a report dated 7th January, 2008 but significantly in a later communication of the Additional Secretary dated 28th June, 2010. It is clearly mentioned that upon review of the earlier Q.R. the Committee recommended the "similar work" as:-
"Similar work means work of evacuation of ash generated from Thermal Power Plant only by using machineries and its nuisance free transportation and disposal in abandoned open cast mines in eco- friendly manner as per scope of work in the tender."
Since there was already a recommendation by an expert committee with regard to the Qualifying Requirement and the Committee had defined the "similar work" in the manner as indicated hereinabove we feel that there was no justification for canceling the said contract. It seems that the letter of the Additional Secretary was completely ignored and the gravity of the situation has not been given due attention while issuing the cryptic communication dated 30th August, 2010. The DVC must have incurred a huge expense towards press release, advertisements, etc., in relation to the said tender and ought not to have 30 allowed to make the said process infructuous on some extraneous considerations.
The respondents have referred to various decisions. However, we like to consider the last decision which is a fairly latest decision on the aspect of judicial review of tender conditions reported in 2010 (6) SCC 303 (Shimit Utsch India Pvt. Ltd. Vs. W.B. Transport Infrastructure Corporation Ltd).
In the said decision, the Hon'ble Supreme Court was considering what could be the implication of change of policy in relation to a tender condition. In the said judgement, a three-Judge Bench of the Hon'ble Supreme Court was considering the effect of its earlier judgment in Association of Registration Plates Vs. Union of India, reported in 2005 (1) SCC 679 in which the tender conditions relating to experience in the field of Registration Plates [in foreign countries, percentage of turn over from such business and term of 15 years as the eligibility criteria came up for considerations. It was held to be not arbitrary, discriminatory or mala fide rather such conditions were held to be in public interest. Thereafter it seems that after the said decision Government of West Bengal Transport Department cancelled its earlier NIT on 27th April, 2005 by a notification, relevant portion whereof is reproduced hereinbelow:
"And whereas the Hon'ble Supreme Court of India by an order dated 30th November, 2004 disposed of the said Writ Petition (Civil) No.41 of 2003 and other 31 connected cases with certain observations, holding, inter alia, that the State Governments concerned are legally competent to determine the terms and conditions for implementation of the scheme for high security registration plates for motor vehicles in conformity with the provisions of the Motor Vehicles Act, 1989 and the Rules framed thereunder;
And whereas the technical bids submitted by those bidders could not yet be processed, evaluated and finalized and whereas due to such non-evaluation of the technical bids the financial bids are submitted by those bidders could not also be opened.
And whereas it has come to the notice of the State Government that subsequent to issue of the said NIT a considerable number of manufacturers of such high security registration plates have obtained the requisite type approval certificates from the Institution approved by the Central Government as the provisions of the Motor Vehicles Act, 1988 and the Rules framed thereunder;
And whereas due passage of time and consequent change in the relevant field due to coming up of a very good number of duly approved manufacturers as aforesaid and keeping in view the observations of the Hon'ble Supreme Court of India in Writ Petition (Civil) No.41 of 2003 and other connected cases as stated hereinabove, the Governor deems it fit that in greater public interest and also in the interest of public safety and security the terms and conditions of the said 32 notice inviting tenders (NIT) for supply and fitment of high security registration plates for motor vehicles be reviewed and determined afresh.
Now, therefore, the Governor is pleased to direct that the entire tender process so far followed pursuant to the aforesaid notice inviting tenders (NIT) for supply and fitment of high security registration plates for motor vehicles as issued by the West Bengal Transport Infrastructure Development Corporation Ltd. on behalf of the State Government be cancelled and fresh process for inviting such bids be commenced after due determination of the terms and conditions thereof in the light of what has been stated hereinabove."
It appears that such notification was issued at a stage where technical bids of the existing bidders were not yet processed, evaluated or finalized and accordingly the stage for opening of the financial bids did not arise. Thereafter, the State Government noticed that a considerable number of manufacturers became eligible by the said time by reason of obtaining required certificate from Institutions approved by the Central Government. It was in that facts and circumstances and "in greater public interest and also in the interest of public safety and security the terms and conditions of the said notice inviting tenders (NIT) for supply and fitment of high security registration plates for motor vehicles be reviewed and determined afresh."
33
The Hon'ble Supreme Court while accepting the said contention on behalf of the said respondents sounded a note of caution of Paragraph 64 which is reproduced hereinbelow:
"64. It is true that the State or its tendering authority is bound to give effect to essential conditions of eligibility stated in a tender document and is not entitled to waive such conditions but that does not take away its administrative discretion to cancel the entire tender process in public interest provided such action is not actuated with ulterior motive or is otherwise not vitiated by any vice of arbitrariness or irrationality or in violation of some statutory provisions. It is always open to the State to give effect to new policy which it wished to pursue keeping in view "overriding public interest" and subject to principles of Wednesbury reasonableness."
In the instant case, it is not a case of change of policy. In fact, while recommending the qualification criteria and credentials of a bidder, the definition of "similar work" was introduced keeping in mind the fact that the work of ash evacuation and transportation not only comprises of simple evacuation like that of earth from ash ponds and its transportation, but it also comprises of nuisance-free loading, covering of ash loaded dumpers with tarpaulins, sprinkling of water on ash to prevent air pollution and also pollution-free unloading of the same. If it is not taken care of, it will create unrest among the road-side dwellers nearer to the transportation point and will create serious law 34 and order problem. Under the above circumstances, transportation of ash cannot be compared with transportation of coal and other minerals & earth, where the degree of pollution is lesser than the above.
We feel that such cancellation on the part of the respondent authority is clearly arbitrary and is in violation of principles of Wednesbury reasonableness. We feel that the respondents have acted unfairly and the order of cancellation is expressly illegal, arbitrary and the same is required to be passed.
The appeal is disposed of on the above terms.
Photostat certified copy of this judgment, if applied for, be supplied to the parties.
(PINAKI CHANDRA GHOSE, J.) I agree.
(SOUMEN SEN, J.) 5th August, 2011.
LATER:
Stay as prayed for on behalf of the DVC in this matter is granted for a period of four weeks from date.35
The application being CAN No.9601 of 2010 filed by Mr. Ghosh for addition of party is allowed.
The application, being CAN No.9601 of 2010, is disposed of.
(PINAKI CHANDRA GHOSE, J.) I agree.
(SOUMEN SEN, J.)