Gauhati High Court - Itanagar
M/S Win Power Infra Private Limited vs M/S D And G Construction And 9 Ors on 13 November, 2025
Page No.# 1/60
GAHC040009132025 2025:GAU-AP:1267-DB
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WA/23/2025
M/s Win Power Infra Private Limited
1st Floor, Basanta Enclave, Dr B Boruah College Road, Ulubari, Guwahati 781007,
Assam, through its General Manager, Armendra Kr Tiwari.
VERSUS
M/s D and G Construction and 9 Ors
a proprietor firm having its office at D Sector, Naharlagun, Papum Pare District,
Arunachal Pradesh 791110 and duly represented by its authorized representative Shri
Taba Rama, resident of EMCHI-1, Doimukh, Papum Pare District, Arunachal Pradesh
791102
2:The State of Arunachal Pradesh
Age: 0
Occupation :
represented by the Secretary
Department of Power
Govt of Arunachal Pradesh.
3:The Chief Engineer (Power)
Age: 0
Occupation :
Central Electrical Zone
Department of Power
Govt of Arunachal Pradesh
Vidyut Bhawan
Itanagar.
4:The State Nodal Officer
Age: 0
Occupation :
RDSS
Page No.# 2/60
Department of Power
Govt of Arunachal Pradesh
Vidyut Bhawan
0-Point
Itanagar.
5:The Superintending Engineer (Eectrical)
Age: 0
Occupation :
Arunachal Pradesh Electrical Circle - II
Department of Power
Pasighat.
6:E Tender Opening Board
Age: 0
Occupation :
represented by its Chairman cum the Superintending Engineer (Electrical)
Arunachal Pradesh Electrical Circle - II
Department of Power
Pasighat.
7:The Sub Committee
Age: 0
Occupation :
for re examination of justification provided by Bidders Regarding Low Prices in the
E Tender
Concerning the Evaluation and Awarding of Contract for the RDSS Packages
represented by its Chairman cum the Chief Engineer (Power)
Central Electrical Zone
Power Secretariat
Govt of Arunachal Pradesh.
8:The Joint Secretary (Finance)
Age: 0
Occupation :
Govt of Arunachal Pradesh
and Member Sub Committee.
9:The Joint Secretary (Law)
Age: 0
Occupation :
Govt of Arunachal Pradesh
and Member Sub Committee.
10:Ginko Lingi
Age: 0
Occupation :
The Chief Engineer (Power) cum State Nodal Officer
Page No.# 3/60
RDSS
Central Electrical Zone
Department of Power
Govt of Arunachal Pradesh
Vidyut Bhawan
Itanagar
Advocate for the Petitioner : Dicky Panging, Tokge Darin,Doge Lona,Marge Doji,Daina Tamuk
Advocate for the Respondent : GA (AP), A Sharma,Lentsothe Sangtam,SC(Power),Lissing Perme
Linked Case : IA(C)/150/2025
M/s Win Power Infra Private Limited
Age: 0
Occupation :
Address:1st Floor
Basanta Enclave
Dr B Boruah College Road
Ulubari
Guwahati 781007
Assam
through its General Manager
Armednra Kr Tiwari
VERSUS
M/s D and G Construction and 9 Ors
Age: 0
Occupation :
Address:a proprietor firm having its office at D Sector
Naharlagun
Papum Pare District
Arunachal Pradesh 791110 and duly represented by its authorized representative Shri
Taba Rama
resident of EMCHI-1
Doimukh
Papum Pare District
Arunachal Pradesh 791102
2:The State of Arunachal Pradesh
Age: 0
Occupation :
Address:represented by the Secretary
Page No.# 4/60
Department of Power
Govt of Arunachal Pradesh.
3:The Chief Engineer (Power)
Age: 0
Occupation :
Address:Central Electrical Zone
Department of Power
Govt of Arunachal Pradesh
Vidyut Bhawan
Itanagar.
4:The State Nodal Officer
Age: 0
Occupation :
Address:RDSS
Department of Power
Govt of Arunachal Pradesh
Vidyut Bhawan
0-Point
Itanagar.
5:The Superintending Engineer (Eectrical)
Age: 0
Occupation :
Address:Arunachal Pradesh Electrical Circle - II
Department of Power
Pasighat.
6:E Tender Opening Board
Age: 0
Occupation :
Address:represented by its Chairman cum the Superintending Engineer (Electrical)
Arunachal Pradesh Electrical Circle - II
Department of Power
Pasighat.
7:The Sub Committee
Age: 0
Occupation :
Address:for re examination of justification provided by Bidders Regarding Low Prices
in the E Tender
Concerning the Evaluation and Awarding of Contract for the RDSS Packages
represented by its Chairman cum the Chief Engineer (Power)
Central Electrical Zone
Power Secretariat
Govt of Arunachal Pradesh.
Page No.# 5/60
8:The Joint Secretary (Finance)
Age: 0
Occupation :
Address:Govt of Arunachal Pradesh
and Member Sub Committee.
9:The Joint Secretary (Law)
Age: 0
Occupation :
Address:Govt of Arunachal Pradesh
and Member Sub Committee.
10:Ginko Lingi
Age: 0
Occupation :
Address:The Chief Engineer (Power) cum State Nodal Officer
RDSS
Central Electrical Zone
Department of Power
Govt of Arunachal Pradesh
Vidyut Bhawan
Itanagar.
------------
Advocate for : Dicky Panging Advocate for : GA (AP) appearing for M/s D and G Construction and 9 Ors: Advocate , , , , , , , , , appearing for 2, 3, 4, 5, Page No.# 6/60 6, 7, 8, 9, 10, respectively.
BEFORE HONOURABLE MR. JUSTICE KARDAK ETE HONOURABLE MR. JUSTICE ANJAN MONI KALITA JUDGMENT & ORDER (CAV) Date of hearing : 21.08.2025 Date of Judgment: 13.11.2025 (A.M. Kalita, J) Heard Mr. D. Das, learned Senior Counsel assisted by Mr. R. B. Phukan and Mr. D. Panging, learned counsels for the appellant. Also heard Mr. P. K. Tiwari, learned Senior Counsel assisted by Mr. A. Sharma, learned counsel for Respondent No. 1 as well as Mr. L. Perme, learned Standing counsel for the Power Department representing respondent Nos. 2 to 9.
2. The instant intra-Court writ appeal has been filed by the appellant being aggrieved and dissatisfied with the judgment and order dated 23.05.2025 passed by the learned Single Judge in WP (C) No. 48(AP)/2025.
3. The facts of the case as projected in the instant writ appeal are that a Notice Inviting Tender (for short, 'NIT') was issued on 17.01.2024 by the Superintending Engineer, Electrical, Arunachal Page No.# 7/60 Pradesh Electrical Division No. 2, Department of Power, Pasighat for development of distribution infrastructure at East Siang District of Arunachal Pradesh under Revamped Reforms-based and Results-linked, Distribution Sector Scheme on turnkey basis at the total estimated cost of the project at Rs. 65,46,10,958.44/- (Rupees Sixty Five Crore Forty Six Lakh Ten Thousand Nine Hundred Fifty Eight Forty Four Paisa).
4. Once the interested bidders procured the Standard Bidding Documents (SBD), a pre-bid meeting was held on 25.01.2024 in the office chamber of the aforesaid Superintending Engineer, wherein, all the prospective bidders were present. In the aforesaid meeting, it was decided that justified bid price range shall be as per the Memorandum dated 18.09.2023, issued by the Secretary to the Government of Arunachal Pradesh, Power Department. On a query made by the bidders, it was intimated that while evaluating the price bids, Clause No. 36 under Section 3: Instructions to Bidders and Bid Data Sheet of SBD shall also be considered.
5. The last date of submission of the bid was on 01.02.2024, wherein, 7 (seven) bidders including the appellant as well as Respondent No. 1 submitted their respective bids. The techno- commercial bid was opened on 01.02.2024, wherein, 3 (three) bidders were found to be techno-commercially qualified. The appellant, Respondent No. 1 and one M/s Techno-Power Enterprises Pvt. Ltd. (for short, 'Techno Power') were qualified in the techno-commercial bid. Subsequently, the price bid of the techno-commercially qualified three bidders were opened on 21.02.2024, wherein, the appellant's price was found to be abnormally low and the price bid of M/s Techno Power was Page No.# 8/60 declared as L1. Consequently, vide a letter dated 12.03.2024, the appellant was intimated by the office of the Superintending Engineer that it's bid had been rejected due to the ground that it was abnormally low. Thereafter, the price bid of M/s Techno Power was recommended for acceptance and approval in terms of the aforesaid Government Memorandum dated 18.09.2023.
6. Immediately after receipt of the rejection, on the very same day, the appellant submitted a letter dated 12.03.2024, thereby requested the Superintending Engineer (E) to provide an opportunity to the appellant for submission of price justification as per the SBD. Thereafter, on 14.03.2024, a letter was issued by the Chief Engineer (Power), Central Electrical Zone, DoP, Itanagar to the Superintending Engineer (E), DoP, Pasighat stating that it had come to his attention that the firm quoting abnormally low amount had not been given any opportunity to justify their low quoted rate under Clause 36.2 of the SBD. It mentioned that it appeared that the tender opening committee rejected the bid under Clause 36.3 of SBD without conducting a detailed price analysis of the bidder. After receipt of the aforesaid letter of the Chief Engineer, the Superintending Engineer (E) issued a letter to the appellant requesting the appellant to furnish it's justification for quoting abnormally low price bid.
7. Thereafter, the Superintending Engineer (E) by his letter dated 22.03.2024 intimated the appellant that it's price bid had been rejected due to abnormally low price, which was (-10.025%) below the minimum justified rate as per the aforesaid Memorandum dated 18.09.2023. Subsequently, the Superintending Engineer (E) vide it's Page No.# 9/60 letter dated 26.04.2024 intimated the Chief Engineer about the reasons for rejection of the price bid of the appellant, wherein, it was stated that the appellant's ex-work prices of major line materials from various vendors in Kolkata were much lower than the ex-work prices quoted by 3 (three) approved vendors from Kolkata for the same kind of materials submitted to its office in response to their request. It was stated that in view of the aforesaid findings from it's approved vendors, the unrealistically low bid of the appellant, if awarded the project, might compromise with the overall quality of the products which may lead to failure of the project.
8. As nothing was intimated to Respondent No. 1 about the finalisation of the bid, the Respondent No. 1 wrote a letter dated 21.11.2024 to the Secretary, Power, Government of Arunachal Pradesh, whereby it requested for re-evaluation of it's financial bid to confirm compliance with the established criteria and justified rates. On receipt of the said representation dated 21.11.2024 from the Respondent No. 1, the Chief Engineer (P) issued a letter mentioning that the Respondent No. 1 had alleged discrepancy in the evaluation of the financial bid for the Pasighat-RDSS package. It was also mentioned that the aforesaid representation of the Respondent No. 1 alleged that the tender opening and evaluation committee under the Chairmanship of Superintending Engineer had erroneously recommended a bidder whose rates fall outside the justified range prescribed by the Government. Therefore, a detail justification for the recommendation made by the tender opening and evaluation committee was sought for. Thereafter, vide letter dated 03.01.2025, the Superintending Engineer Page No.# 10/60 (E) to the Chief Engineer (P) submitted a detailed deviations made by the three concerned bidders and a recommendation was made in favour of the Respondent No. 1 as the bid of the Respondent No. 1 found to be least deviated one as per the aforesaid memorandum dated 18.09.2023 of the Government of Arunachal Pradesh.
9. However, the Government of Arunachal Pradesh, Department of Power vide, it's memorandum dated 29.05.2024, taking into account the interest of transparency and adherence to procurement procedures under Revamped Distribution Sector Scheme (RDSS) constituted a committee (referred to as Sub-committee) for the project titled 'Development of Distribution Infrastructure under Revamped Reforms- Based and Result-linked Distribution Sector Scheme' of Rupa Package in West Kameng District. It was also mentioned that the committee may also be entrusted with similar examination related to other packages under RDSS from time to time, as the case may be. A detailed terms of reference of the Sub-committee were also provided. It was specifically mentioned in the reference that the Sub-committee shall examine whether the prices quoted in the bids identified as abnormally low required justifications to be sought from the relevant bidders. It was also mentioned that the provisions contained in the manual for procurement of goods and other instructions issued by the Department of Expenditure, Ministry of Finance, Govt. of India from time to time on the subject shall also be adhered to. It was provided that the Sub-committee shall, after examination, pass speaking orders recommending the acceptance or rejection of bids in question within a time frame of 15 days.
Page No.# 11/60
10. Subsequently on 13.06.2024, the package of Pasighat was also included for re-examination of the justification provided by the bidder regarding abnormally low price in addition to previously allocated 5 packages of Rupa, Itanagar, Naharlagun, Namsai and Deomali. The Sub-committee submitted it's report on 15.07.2024 detailing the background, terms of reference of the Sub-committee, Sub-committee proceedings, discussions on compiled justifications, identification of list of items, identification of vendors, assessment of transportation cost, assignment of responsibility, methodology adopted for bid justification, market rates, market survey, comparative analysis, summary of findings and thereafter, conclusions and recommendations. The findings indicated that the bidders, in fact quoted higher rates than the approximate landing rates determined by the Sub-committee. As for Pasighat package, it mentioned that the rates discovered through the market survey, amounted to Rs.47.02 Crores only while the price quoted by the lowest bidder was Rs.54.99 Crores, which was 16.96% above the market survey rates.
11. Taking into account the report of the Sub-committee, the Superintending Engineer (E) issued a Letter of Intent (for short, 'LoI') dated 15.01.2025 to the appellant stating that it's offer in the concerned bid had been accepted at the quoted rate amounting to Rs.54,98,73,157/- and further requested the appellant to submit an unconditional and irrevocable bank guarantee amounting to Rs.1,49,69,521/- for supply of plants contract and Rs.15,26,674/- for installation services. In view of the aforesaid LoI issued to the Appellants, the Respondent No. 1, thereafter, submitted Page No.# 12/60 representations dated 22.01.2025 to the secretary of Power and the Chief Minister of Arunachal Pradesh respectively. However, getting no positive response, the Respondent No. 1 filed the writ petition, being WP (C) No.48/2025 challenging the aforesaid LoI dated 15.01.2025 issued to the appellant with prayers, among others, to set aside the recommendation made by the Sub-committee limited to the NIT dated 17.01.2024 as well as for setting aside and quashing the LoI dated 15.01.2025 issued by the respondent authorities to the appellant and in alternative, to cancel the NIT dated 17.01.2024.
12. The learned Single Judge after hearing the parties concerned, disposed of the writ petition in the following terms:-
"38. In the conspectus of the aforesaid discussions and the facts and circumstances narrated above, this Court is of the opinion that a case for interference is made out. Accordingly, the impugned Letter of Intent (LoI), dated 15.01.2025 which was preceded by the decision to allot the work to the respondent No. 9 by the Department on the basis of the sub-committee Report, is set aside and quashed.
39. The matter, is accordingly, remanded back to the Department to allot the work to the eligible bidder, strictly in accordance with law. Since, the NIT concerns works of public importance, such allotment is to be done expeditiously and, preferably, within a period of 45 (forty five) days from the date of the receipt of the certified copy of this order".
13. Being aggrieved by the aforesaid judgment and order dated 23.05.2025, the appellant has filed this instant writ appeal.
14. Mr. D. Das, learned Senior counsel appearing for the appellant Page No.# 13/60 submitted that the learned Single Judge has committed a grave error by setting aside the LoI dated 15.01.2025 due to the fact that after proper re-evaluation done by the Sub-committee, the LoI was issued to the appellant. He submitted that though the justification provided by the appellant-company was initially rejected by the e-tender opening Board, the Chief Engineer had written to the Superintending Engineer to re-evaluate the bid after seeking detailed justification from the appellant-company as the justification was mechanically rejected by the e-tender opening Board. He submitted that the decision for formation of the Sub-committee was taken by the Government of Arunachal Pradesh, Department of Power due to various complaints received by the Department of power regarding evaluation of the bids submitted in different packages, i.e. 5 packages of Rupa, Itanagar, Naharlagun, Namsai and Deomali in addition to the package of Pasighat. He submitted that there is nothing wrong or illegal to set up specialized Sub-committee to re-evaluate the bids when there are allegations of non transparency and other violations of the tender conditions by the Tender opening and evaluation committee (for short, 'Tender Committee').
15. The learned Senior Counsel further submitted that the Memorandum dated 18.09.2023 is only a guideline without having any statutory force in the eyes of law and the aforesaid Memorandum was never a part of the NIT though the same was introduced for the first time in the pre-bid meeting wherein the bidders agreed to adhere to the Memorandum. He further submitted that the Memorandum was only for the tenders floated and processed for award during the Page No.# 14/60 financial year, 2023-2024 whereas the bid was re-evaluated much after the expiry of the term of the aforesaid Memorandum.
16. The learned Senior Counsel submitted that the Sub-committee was formed for all the 6 (six) districts, namely, 5 packages of Rupa, Itanagar, Naharlagun, Namsai and Deomali and Pasighat and not only for the package of Pasighat. Therefore, he submitted that there was no wrong in such re-evaluation as the bid of the Respondent No. 1 too was re-evaluated by the Sub-committee and hence, he submitted that there is no violation of Article 14 in the instant case.
17. The learned Senior Counsel submitted that a proper mechanism was adopted by a Sub-committee for re-evaluation of the bids with detailed terms of reference and analysis. He submitted that as per the terms of reference, a responsible officer was deputed to do the market survey in Kolkata and after receipt of all the details regarding market prices, transportation charges and landed prices, the re-evaluation was done in a very transparent manner by the Sub-committee composing of the Chief Engineer (Power), the Joint Secretary (Finance) and the Joint Secretary (Law). In view of the aforesaid, he submitted that the creation of a Sub-committee and it's findings cannot be flawed with. He submits that the creation of a Sub-committee is an administrative decision on the part of the State Government to bring in transparency, fairness and uniformity.
18. The learned Senior Counsel submitted that though the justifications provided by the appellant-company were mechanically rejected by the Tender Committee, the same did not reach finality as Page No.# 15/60 the recommendation of awarding the tender to the Respondent No. 1 was yet to be approved by the appropriate authority of the Government. He submitted that the appellant-company did not challenge those rejections rather preferred to wait for the final approval.
19. The learned Senior Counsel in support of his submission that the Sub-committee being a body of experts, this Court may not enter into the domain of expert committee which took the decision based on their expertise to accept the low bid of the appellant-company, relied upon the judgment of the Gauhati High Court in the case of B.B. Enterprises-vs-State of Arunachal Pradesh and Others ; reported in (2020) 3 GLR 660, wherein, this Court held that the matters which are within the domain of expert committees having specialized knowledge, the Courts are not to interfere.
20. Whereas, Mr. P. K. Tiwari, learned Senior Counsel submitted that the tender in question was to be wholly governed by the Memorandum dated 18.09.2023 which laid down the guidelines to be followed while evaluating the bids including the aspects of justified bid. He submitted that the parties participated in the concerned tender, had unilaterally agreed for application of the aforesaid Memorandum in the instant NIT. He submitted that as per the aforesaid Memorandum, the instant tender was evaluated during the term of the Memorandum. He submitted that the bid of the appellant-company was found to be abnormally low and accordingly, the same was rejected on 21.02.2024 and the same order of rejection was not a subject matter of any challenge by the appellant-company. He submitted that though a Page No.# 16/60 justification was sought from the appellant-company and the same was provided by the appellant-company, the justification was rejected by the e-tender opening Board and as the rejection was never challenged by the appellant-company, the rejection attained finality, and therefore, the Department had no occasion to reopen the rejection order.
21. The learned Senior Counsel submitted that there was an absolute silence of the Department regarding the tender from 22.03.2024 to 15.01.2025. In view of that, the Respondent No. 1 submitted a representation to the respondent-Department to re-evaluate it's financial bid, vide letter dated 21.11.2024. The Chief Engineer took up the matter and vide, it's letter dated 26.11.2024 directed the Superintending Engineer (P) to make a comprehensive re-evaluation of the price bid of Respondent No. 1. He submitted that on 03.01.2025, the re-evaluation of the price of the bid of the Respondent No. 1 was carried out and it was found that the bid of the Respondent No. 1 was least deviated from the standard bid in terms of the Memorandum dated 18.09.2023. Accordingly, a recommendation was made in favour of the Respondent No. 1 by the e-tender opening Board. He submitted that at a later stage, the Respondent No. 1 came to know that a thorough recommendation was made in favour of the Respondent No. 1, the respondent -Department constituted a Sub-committee on it's own to re-evaluate the abnormally low bid of the appellant-company and based on such re-evaluation, the Sub-committee had accepted the bid of the appellant-company which was followed by the issuance of the LoI in favour of the appellant-company. He submitted that this exercise was carried out by the Respondent Department keeping the Page No.# 17/60 Respondent No. 1 in dark.
22. The learned Senior Counsel for the Respondent No. 1 submitted that the Sub-committee appeared to have been constituted not for the Pasighat package but for the other packages of similar work under the Power Department, however, the Pasighat package apparently to have been included at a much later stage to favour the Appellant. He further submitted that in other packages though abnormally low rates of the bidders were accepted, the LoIs were not issued to them, rather the LoIs were issued to other qualified bidders. He submitted that the aforesaid facts make the whole issue apparent that the Sub-committee was, in fact, constituted only to favour the appellant-company.
23. The learned Senior Counsel for the Respondent No. 1 submitted that the Memorandum dated 18.09.2023 clearly laid down the range of justified rates and the same was applicable to all tenders floated and processed during the financial year, 2023-2024. Therefore, the instant NIT dated 17.01.2024 and all consequential actions arising out of the same are to be governed by the Memorandum. He submitted that the respondent-Department has violated the provisions of the Memorandum by not adhering to the same.
24. The learned Senior counsel for the Respondent No. 1 submitted that the constitution of the Sub-committee by way of a Memorandum dated 29.05.2024 is without any sanction of law and is beyond the scope of tender conditions. He submitted that the constitution of such Sub-committee is in violation of the decision taken by the parties in the pre-bidding meeting dated 25.01.2024 as the same decided that Page No.# 18/60 the justified ranges of bid prices to be followed as per the Memorandum dated 18.09.2023.
25. The learned Senior Counsel for the Respondent No. 1 submitted that a constitution of the Sub-committee amounted to changing the rule of the game when the game was practically over. He submitted that e-tender opening Board had carried out the evaluation in conformity with the Memorandum dated 18.09.2023 and had rejected the bid of the appellant-company being abnormally low. After such rejection, the reopening of the issue by way of re-evaluation by the Sub-committee which was never as per the tender conditions, amounted to changing of the rule set down in the NIT.
26. The learned Senior Counsel submitted that it was decided in the pre-bid meeting dated 25.01.2024 that the Memorandum dated 18.09.2023 would be followed in processing of the bids and therefore, there was no occasion for the respondent-Department to act otherwise. He submitted that the departure of the respondent- Department from following a course of action, it committed itself to follow, contravenes the well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes it's actions to be judged and it must scrupulously observe those tenders on pain of invalidation of an act in violation of them.
27. The learned Senior Counsel submitted that the judgment and order of the learned Single Judge is in conformity with all the well settled principles of law. He submitted that in the facts and circumstances of the instant case, no two views are possible and also Page No.# 19/60 the principle of law is settled that if at all, two views are possible, the view which is reasonable and logical has been adopted by the learned Single Judge over the other view. Therefore, he submitted that howsoever appealing may be to the Division Bench, it is the view adopted by the learned Single Judge should be allowed to prevail.
28. In support of his submissions, the learned Senior Counsel for the Respondent No. 1 has relied upon the following judicial pronouncements of the Hon'ble Apex Court:-
(i) Ramana Dayaram Shetty-vs-International Airport Authority of India; reported in (1979) 3 SCC 489;
(ii) Kirloskar Ferrous Industries Limited and Anr-vs-Union of Indi and Ors; reported in (2025) 1 SCC 695;
(iii) Jagdish Mandal-vs-State of Orissa & Ors; with Laxman Sharma-vs-State of Orissa and Ors; reported in (2007) 14 SCC 517;
(iv) Tej Prakash Pathak & Ors-vs-Rajasthan High Court & Ors;
reported in (2025) 2 SCC 1; and
(v) Tractor & Farm Equipment Ltd-vs- Secretary to the Govt. of Assam, Department of Agriculture & Ors.
29. In view of the aforesaid submissions, the learned Senior counsel for the Respondent No. 1 submitted that this is a fit case wherein this Court may not interfere with the judgment and order passed by the learned Single Judge and thereby, may dismiss the instant writ appeal.
30. The learned Standing Counsel for the Power Department, Mr. L. Perme submitted that the Respondent No. 1 was at Serial No.3 and the Page No.# 20/60 bid of one M/s Techno Power Enterprises Pvt. Ltd was found to be L1. The bid of the appellant-company was initially rejected as an abnormally low bid. He submitted that the constitution of the Sub- committee was required in the interest of public as the matter involved huge public ex-chequer. He submitted that a Sub-committee was formed to re-evaluate the bids submitted in different packages due to several complaints in the bid evaluation process. He submitted that the Government of Arunachal Pradesh, vide Memorandum dated 29.05.2024, constituted the re-evaluation committee (Sub-committee) to examine the concerns raised regarding RDSS Packages across multiple electrical divisions. He submitted that though initially five packages, namely, Rupa, Itanagar, Naharlagun, Namsai and Deomali were included, later on, the Pasighat package was also included due to issues regarding justification of abnormally low bid cropped up. In fact, in all the bids, justification of abnormally low bids was an issue and therefore, it was decided to include the Pasighat package also. He submitted that multiple complaints received by the respondent- Department regarding the aforesaid issue and in fact, one M/s Jayanta Khound, the lowest bidder in the Rupa package filed a writ petition in the Gauhati High Court. Therefore, faced with aforesaid situation, the Government of Arunachal Pradesh decided to constitute the Sub- committee consisting of experts from technical, finance and law Departments. He submitted that the Pasighat package was included for re-evaluation as the justification provided by the appellant-company was not evaluated by adopting a proper mechanism. He submitted that though recommendation was made in favour of the Respondent No. 1 Page No.# 21/60 by the e-tender opening Board, the same was yet to be approved by the competent authority. Therefore, he submitted that as the conclusion did not attain finality, there was no bar in re-evaluation of the bids by a Sub-committee including the aspect of justification submitted by the appellant company. He submitted that though the Sub-committee has accepted justifications provided by bidders for their abnormally low bids in some other packages, in some packages the LoIs could not be issued to them due to the various factors, like EMD already refunded as well as non persuasion by the concerned bidders. He submitted that the entire exercise was carried out by the Department to serve the public interest and there was no mala fide purpose involved in the entire process.
31. This Court has heard the learned counsels appearing for the respective parties and has also gone through the materials brought before this Court.
32. Before going into the other aspects involved in the instant case, it may be worthwhile to examine the concerned Memorandum dated 18.09.2023 in it's proper perspective. It is seen that the Memorandum was issued by the Government of Arunachal Pradesh, Department of Power providing guidelines to be adopted by the Department of Power in the course of tender/bid processes, bid evaluation and award of the contract works of projects and schemes mentioned in Category I, Category II and Category III respectively. It is seen that Pasighat Electrical Division has been included in Category I. At serial No. 4 of the Memorandum, justified bid price ranges were provided category wise. It may be relevant to reproduce the serial No. 4 hereunder:-
Page No.# 22/60 "Justified Bid Price Ranges Category-wise: To weed out unrealistically very low and excessively high and obstructive biddings, the justified ranges of bid prices of materials and works as determined for respective category wise shall have to be adopted and adhered to in bid evaluation processes of tenders, and the contract award thereof for execution in the Department of Power as contained in the following respective annexures.....".
At Serial No. 5 of the Memorandum provided that the validity of justified bid price ranges shall be valid for the bids of the tenders floated and processed for award during the current year i.e. 2023- 2024.
33. A careful reading of the aforesaid provisions of the Memorandum reveals that justified ranges of bid prices of materials and works were provided material wise for different categories. Therefore, there is no doubt that the Memorandum vide it's guidelines provided the justified bid prices with upper and lower prices. It is discernable that while evaluating the bids, the evaluation committee/board is required to consider the bids which are within the range provided in the Memorandum. The bids which are not within the range are liable to be rejected. It is also seen that the Memorandum shall be applicable to all the tenders floated and processed for award during the current financial year i.e. 2023-2024, meaning thereby any tender floated and processed for award within the period of 01.04.2023 to 31.03.2024 shall be governed by the Memorandums. Therefore, undoubtedly the instant NIT which was floated on 17.01.2024 is within the framework of the Memorandum. It is also seen from the minutes of the pre-bid Page No.# 23/60 meeting dated 25.01.2024 that the bidders participated in the pre-bid meeting were made aware of the applicability of the aforesaid Memorandum. However, it is also seen that it was specifically mentioned that the Memorandum will be taken into consideration while evaluation of the price bids in consonant with ITB Clause 36 of the Standard Bidding Document (SBD). Therefore, it is discernable from the aforesaid minutes of the pre-bid meeting that the applicability of the Memorandum has to be in consonance with Clause 36 of the SBD.
34. At this juncture, it will be appropriate to refer to Clause 36 of the SBD, which is quoted herein below:-
"36. Abnormally Low Bids:
36.1 Abnormally Low bids is one where the bid price, in combination with other elements of the bid, appears so low that it raises material concerns with the employer as to the capability of the bidder to perform the contract for the offered bid price.
36.2 in the event of identification of a potentially abnormally low bid, the employer, unless otherwise specified in BDS, may seek return clarification from the bidder, including a detail price analysis of its bid price in relation to the subject matter of the contract, scope, delivery schedule, allocation of list and responsibilities and any other requirement of the bidding documents.
36.3 After evaluation of the price analysis, in the event that the Employer determines that the Bidder has failed to demonstrate its capability to perform the contract for the offered bid price, the Employer shall reject the Bid".
35. The above mentioned clause 36 is part and parcel of the NIT in issue. This clause mandates that in case of any Abnormally Low Bid, the Employer has to seek a written clarification from the Bidder and after a detail evaluation of the price analysis if the Employer Page No.# 24/60 determines that the Bidder has failed to justify his price, then only, the Employer shall reject the Bid and not otherwise. Therefore, a conjunctive reading of the Memorandum dated 18.09.2023 and the Clause 36 of the SBD, it is very clear that though the bid price of a Bidder is below the justified range provided in the Memorandum, the Employer has to mandatorily give an opportunity to such Bidder to justify his Abnormally Low Bid. Therefore, the initial rejection of the bid of the appellant-company was not correct as no opportunity was given to it for justification of it's Abnormally Low Bid. In view of that, there was nothing wrong in requesting the Superintending Engineer (P) by the Chief Engineer (P), CEZ, DoP for affording an opportunity to the appellant-company to justify it's Abnormally Low Bid, in terms of Clause No. 36.2 to the SBD.
36. It is seen that the Respondent No. 1 (writ petitioner) did not raise any objection at the time of constitution of the aforesaid Sub- committee as it is seen from the records that the Respondent No. 1 was also one of the bidders in another package, namely, the Naharlagun Package and the bid of the Respondent No. 1 was also examined (re-evaluated) by the Sub-committee for it's abnormally low bid. It is also seen that after re-evaluation of the bid of the Respondent No. 1, the Respondent No. 1 was found to be justifiable by the Sub- committee. It is also seen that the Respondent No. 1 did not challenge the constitution of the Sub-committee in the writ petition filed by it. The Respondent No. 1 has only assailed the decision and recommendation made by the Sub-committee in favour of the appellant-company. It has also challenged the subsequent LoI dated Page No.# 25/60 15.01.2025 issued to the appellant-company. Therefore, it is discernable from the aforesaid that the Respondent No. 1 is rather aggrieved by the action of the respondent-Department in issuing the LoI in favour of the appellant-company rather than constitution of Sub- committee by the respondent-Department.
37. At this stage, it would be appropriate to examine the issue relating to the constitution of the Sub-committee. The respondent- Department has filed a detailed affidavit-in-opposition in the writ petition. A perusal of the aforesaid affidavit, it is seen that the respondent -Department had clearly mentioned in it's affidavit that multiple complaints have been received from various bidders across several packages including different electrical divisions, namely, Rupa, Itanagar, Naharlagun, Namsai, Deomali and Pasighat. It was also mentioned that one of the bidders, M/s Jayanta Khound whose bid was rejected as abnormally low bid had filed a writ petition challenging the same. It is mentioned that facing with such complaints and filing of a writ petition in the Gauhati High Court, the Government of Arunachal Pradesh had decided to constitute a Sub-committee vide, its Memorandum dated 29.05.2024.
38. The Memorandum dated 29.05.2024, issued by the Government of Arunachal Pradesh, Department of Power, constituted a committee, initially for Rupa Package in East Kameng District, however, the Memorandum also mentioned that the committee may also be entrusted with similar examinations relating to other package under RDSS from time to time as the case may be. Therefore, the committee Page No.# 26/60 so constituted has been given the power to examine other packages also including the Pasighat package. The Memorandum provided the terms of reference of the committee. Re-examination process under the terms of reference being important is reproduced herein below:-
"Re-examination Process:
The committee shall examine whether the prices quoted in the bids identified as "Abnormally Low" required a justification to be sought from the relevant bidders.
The committee shall examine the justification provided by the bidders for their bids. This review shall include and analysis of the bid with respect to the subject matter, scope, delivery schedule, allocation of risk and responsibilities and any other relevant parameters outlying in Clause 36.2 and 36.3 of the Standard Bidding Document of RDSS. The provisions contained in manual for procurement of goods and other instructions issued by the Department of Expenditure, Ministry of Finance, Govt. of India from time to time on the subject shall also be adhered to".
39. The committee (Sub-committee) so constituted had submitted it's report to the Under Secretary (Power & NCE), Govt. of Arunachal Pradesh on 15.07.2024. This Court is of the considered opinion that though the whole report is available on records, however, taking into the aspect of the importance of the Report in adjudication of the matter, some relevant parts of the same are reproduced herein below for ready reference:-
"Introduction This report presents the findings of the Sub-committee constituted to re-examine the justifications provided by bidder regarding low prices in the e-tender for the Revamped Distribution Sector Scheme (RDSS) packages. The Sub-committee, composed of officials from the Power, Finance and Law Departments, was task with evaluating the feasibility and reasonableness of Page No.# 27/60 the rates of the bids received for 6 (six) packages: Rupa, Itanagar, Naharlagun, Namsai, Deomali and Pasighat. This report details the methodology, findings, and recommendations based on a comprehensive analysis of the justification provided by the bidders.
The aforesaid committee had it's first sitting on 06.06.2024 with the following agenda: -
"(1) Introduction of committee members;
(2) Over view of the agenda and objectives of the meeting; (3) Review of the project background;
(4) Recap of the initial tendering process and identification of abnormally low bids;
(5) Summary of bidders' justifications;
(6) Presentation of justification provided by each bidder for their low prices;
(7) Action plan and time line for submission of findings to the Government."
In the minutes section of 06.06.2024, amongst others, the following important points were minuted: -
"(5) Summary of Bidders' Justifications:
The committee reviewed a summary of the justification submitted by the bidders. Key points from justification were presented and discussed.
(6) Presentation of Justification Provided by Each Bidder:
The committee examined the justification for low prices submitted by each bidder in detail. Soft copy of the justifications are to be prepared and presented to each member.
(7) Action Plan and Time Line for Submission of Findings to the Government:
The committee outlined an action plan for further analysis and verification of the justifications. A timeline for the submission of the committee's findings to the Government was established. Immediate steps include further data collection and cross-referencing with Page No.# 28/60 market rates. For this purpose, it was decided to depute Shri Sapde Yomcha, Assistant Engineer (E), Kamba Electrical Sub-Division for the collection of ex-works prices of major items of the tendered projects to arrive at analysed landing rates and drawing conclusions for recommending the acceptance or rejection of the bids in question (copy of movement order of Shri Sapde Yomcha annexed as Annexure-III)."
40. It is seen from the above that the Sub-committee consisted of high officials from 3(three) departments namely, the Power, Finance and the Law and the terms of reference for the Sub-committee has been clearly laid down. From the minutes of the first meeting, it is seen that the Sub-committee reviewed a summary of justifications, submitted by the bidders, wherein the Sub-committee took presentation of justifications from each bidders. The Sub-committee also decided to depute one of the officers from the Power Department to collect ex-works prices of the major items of the tendered projects to analyse lending rates to arrive at conclusions for recommending acceptance or rejection of the bids.
41. The Sub-committee had it's second sitting on 12.06.2024, wherein the followings were minuted: -
"(1) Discussion on Compiled Justifications:
As decided in the first sitting, compiled justifications of each package were presented to each member in soft copy. The Committee observed that justifications provided by the bidders in Itanagar, Naharlagun and Namsai packages included item-wise price analysis, while in Rupa and Deomali packages, bidders claim to be manufacturers and did not provide item-wise price breakdown in their justifications. Copies of the bid justifications, organized by packages, are annexed as Annexure Va to Vg indicated as followings: -
Page No.# 29/60
(i) Rupa Package
(a) M/s DEE Control & Electric (P), Kanpur (Annexure-Va)
(b) M/s Jayanta Khaund, Guwahati (Annexure Vb)
(ii) Itanagar Package
(a) M/s S. R. V. Techno Engg Pvt. Ltd., New Delhi (Annexure Vc).
(iii) Naharlagun Package
(a) M/s S. R. V. Techno Engg Pvt. Ltd., New Delhi (Annexure Vd).
(iv) Namsai Package
(a) M/s D & G Constructions, Naharlagun (Annexure-Ve).
(b) M/s Aquarian Enterprises, New Delhi (Annexure-Vf).
(v) Deomali Package
(a) M/s Agarwal Traders, Bhiwani (Annexure-Vg).
2) Identification of List of Items:
The major items constituting almost 90% of the overall estimated cost put to tender were considered for analysis. Common items across all packages were selected for analysis based on descending order of estimated cost until at least 90% of the total estimated tender cost is covered. Identified list of items annexed as Annexure-Via.
3) Identification of Vendors It was decided to collect Ex-works prices for the identified list of items exclusively from the approved Vendor list of REC Limited for the DDUGJY scheme. Approved vendor list annexed as Annexure-VIb.
4) Assessment of Transportation Cost The approximate transportation cost of the identified items from Ex- works to the on-road freight destination will be collected.
5) Assignment of Responsibility Shri Sapde Yomcha, Assistant Engineer (E), Kamba Electrical Sub-
Division, was deputed to Kolkata immediately to carry out the tasks specified above. The order copy annexed as Annexure-VII."
42. It is seen from the above minutes that the Sub-committee decided to collect ex-works prices for identified list of items, exclusively, from the approved vendor of REC Limited for the DDUGJY scheme, a list of approved vendors was also provided. The Sub- committee had also decided to collect the approximate transportation costs of the identified items from ex-works to the on-road freight Page No.# 30/60 destinations. At this stage, the Sub-committee was also directed to examine the Pasighat package as well, regarding the low price in the tender. The Sub-committee has also clearly laid down the methodology to be adopted in analyzing the low rates, which is reproduced herein below: -
"Methodology Collection of Necessary Documentation Bid Justification In compliance with the Terms of Reference, the committee opted to take the justifications submitted by each bidder to the Superintending Engineers instead of seeking separate justifications from the concerned bidders. These justifications were submitted to the concerned Superintending Engineers in response to the notice under Clause 36.2 of the SBD for their low bid prices, which were rejected by the Tender Opening Committee under Clause 36.3 of the SBD (Annexure-VIIIa). Copies of the bid justifications, organised by packages, are annexed as Annexure-Va to Vg and for additional allocated Pasighat package copy of bid justification as Annexure-IX. Bid Documents The committee considered original bid documents uploaded by the bidder in the tender portal at the time of bid submission from the concerned Superintending Engineers of the circle. Additionally, the committee considered other documents uploaded by the bidders during the course of justifying the low prices against queries raised by the Tender Opening and Evaluation Committee.
Data Collection To assess the reasonableness of the bid prices quoted by the bidders with respect to the subject matter, scope, delivery schedule, allocation of risks, and responsibilities outlined in Clause 36.2 of the Standard Bidding Document of RDSS, a detailed breakdown of the prices quoted by each bidder was analysed using the following data collection methods:
Market Rates As most of the vendors on the approved vendor list of REC Ltd for the DDUGJY scheme are based in Kolkata, which is the nearest manufacturing hub for electrical goods, Shri Sapde Yomcha, Assistant Engineer (E) at the Kamba Electrical Sub Division, was deputed to Kolkata to collect firsthand Page No.# 31/60 information on ex-works prices of materials identified as decided by the committee during the second meeting. The criteria for collecting ex-works price materials were based on SOP-No. 5/3: Justification of Tenders (Refer to Para 5.1.6), sub-clause 3 of the CPWD Works Manual 2022 (Annexure- VIIIb). Major items accounting for almost 90% of the overall estimated cost put to tender were considered for rate analysis. The items selected were those with the highest estimated amounts followed by the next lower amounts in descending order until at almost 90% of the estimated cost put to tender was reached to work out the approximate justified landing rates for on-road freight destination.
The committee collected and considered ex-works prices of the identified items as per the approved vendor list of REC Limited for the DDUGJY scheme, as noted in minute point No. 3 of the Second Meeting (copy annexed as Annexure-VIb).
Market Survey Shri Sapde Yomeha, Assistant Engineer (E) of the Kamba Electrical Sub Division, conducted a market survey in Kolkata. He gathered the lowest ex- works price quotations for the identified items from the vendors (Annexure- Xa) and obtained quotations from several transport vendors for the transportation cost of these items from ex-works to the on-road freight destination. Copies of the ex-works rates and transport vendors' quotations from Kolkata are annexed as Annexure-Xb, and the report/comparative statement is annexed as Annexure-X. Other Documents Considered Departmental Estimates The departmental estimated cost was taken into account for analysis purposes for those items which are outside the list of identified items specified (Annexure-Via) and whose market rate could not be availed. Procurement Manual
a) Standard Bidding Document Part-I of RDSS, Clause 36.2, available at Annexure-VIIIA.
b) Standard Operating Procedure (SOP) No. 5/3 of the CPWD Work Manual 2022, available at Annexure-VIIIb.
c) Manual for Procurement of Goods 2017, available at Annexure-VIIIc.
Comparative Analysis Breakdown of Costs The breakdown of costs includes the following:
Page No.# 32/60
1. Ex-Works Prices of Materials: Prices of identified items listed under Annexure-Vla required for the project were obtained from approved vendors of Kolkata market for comparative analysis. Shri Sapde Yomcha, Assistant Engineer (E), collected the prices from the approved vendor listed under Annexure-VIb. The Ex-Works prices available at Annexure-Xa
2. Overhead: Since some of the bidders have not indicated overhead expenses separately in their justification, overhead at 7.5% as per the provision of SOP No. 5/3 Sub Clause of CPWD Work Manual 2022, available at Annexure-VIIIb has been considered. This includes indirect costs such as administrative expenses, equipment rental, and transportation from the factory to the transport company including packing, loading & unloading.
3. Profit Margins: Contractor's profit at 7.5% of the contract price has been considered as some of the bidders did not indicate it in their pricing separately.
4. GST: GST at 18% of the ex-works price of items as per prevailing rates has been taken into account for rate analysis.
5. Insurance: Insurance at 1% of the ex-works price of items as per prevailing rates has been taken into account for rate analysis.
6. Transportation Cost: The approximate transportation charges from Kolkata to the on-road freight destination (Itanagar) has been taken at Rs. 6.39 per Kg based on the lowest quotation offered by a vendor, Jain Movers Pvt. Ltd. Kolkata. The transportation cost at Rs. 6.39 has been arrived at by considering the 10-wheels truck whose full loading capacity is 18MT and it is offered at Rs. 115000.00 per trip from Kolkata to Itanagar. Analysis of rate for transportation available at Annexure-Xc.
7. Income Tax: IT is considered at the rate of 2% on the gross amount of the analyzed project cost of the package."
43. It is seen from the above that bid justifications for 5(five) packages namely, Rupa, Itanagar, Naharlagun, Namsai and Deomali, were initially compiled for examination. It is worthwhile to mention that in the Namsai package, the bid of M/s D & G Construction, Naharlagun (Respondent No. 1) was also included for analysis.
44. It is seen that on 30.06.2024, the Pasighat package was also Page No.# 33/60 included for examination by the Sub-committee.
45. As far as identification of the list of items for analysis is concerned, all the major items constituting to almost 90% of overall estimated cost were considered for analysis. Common items across all packages were selected for analysis. The Sub-committee decided to collect the ex-works prices for the identified items, exclusively, from approved vendor list of REC Limited. It is worthwhile to mention herein that REC Limited is a Non-banking Finance Company under the administrative control of Ministry of Power, Government of India and is a "Maharatna Company".
46. It is seen from the above minutes that the methodology of analysis was also clearly defined. As regards bid justifications, the committee decided to take justifications already submitted by each bidder to the Superintending Engineer instead of seeking separate justification from bidders again. The justifications were submitted to the concerned Superintending Engineers in response to the notice under Clause 32.6 of SBD for their low bid prices, which were rejected by the e-Tender Opening Committee.
47. As for market rates, the aforesaid Shri Sapde Yomcha, AE, collected the lowest ex-works price quotations from the approved list of vendors of REC Limited. Transportation costs were also collected from several transport vendors.
While carrying out the analysis, the Sub-committee considered the Page No.# 34/60 Standard Operative Procedure (SOP) of the CPWD Work Manual, 2022, as well as Manual for Procurement of Goods, 2017.
48. While doing the comparative analysis, the Sub-committee has taken the breakdown of costs, calculating the following aspects, namely, ex-works prices of materials, overhead, profit margins, GST, insurance, transportation costs and income tax.
After such detailed evaluation, the Sub-committee set out the summary of findings as follows: -
"Summary of Findings
1. Discrepancies:
Upon detailed scrutiny of the justifications provided by the bidders to the Superintending Engineer cum Chairman of the Tender Opening and Evaluation Committee in response to the inquiry under Clause 36.2 of the Standard Bidding Document (copies of justifications available at Annexure- Va to Vg and Annexure-IX), significant deviations were identified between the item-wise market rates derived by the committee and the item-wise breakdown costs justified by the bidders, except for the Rupa and Deomali packages, where the bidders have not provided item-wise cost breakdowns, claiming to be the manufacturers. A detailed analysis comparing the item- wise justified rates provided by the bidders and the rates derived by the committee through a market survey is available in the excel sheet Item wise rate analysis (market) Annexure-Xd for perusal. In this regard, it is pertinent to mention that even the bidders who have provided item-wise justified rates have not indicated the overhead expenses, contractor's profit, transportation charges, freight, and insurance separately. Hence, the committee considered the cumulative price quoted in the bids by the bidders for determining the capabilities of bidders rather than on the basis of item- wise justified rates submitted.
a) A summary of the comparative analysis highlighting significant discrepancies between the market rates discovered through market survey and the bidders' quoted prices is documented below, package-wise:
Page No.# 35/60
(i) Rupa: The rates discovered through the market survey amount to Rs.
22.18 Crore, while the price quoted by the lowest bidder is Rs. 25.76 Crore, which is 16.13% above market survey rates.
ii) Itanagar: The rates discovered through the market survey amount to Rs. 38.43 Crore, while the price quoted by the lowest bidder is Rs. 47.91 Crore, which is 24.67% above market survey rates.
ii) Naharlagun: The rates discovered through the market survey amount to Rs. 37.08 Crore, while the price quoted by the lowest bidder is Rs. 43.90 Crore, which is 18.38% above market survey rates.
iv) Namsai: The rates discovered through the market survey amount to Rs. 32.24 Crore, while the price quoted by the lowest bidder (LI) is Rs. 31.00 Crore, which is -3.84% below the market rates, raising concerns about their ability to fulfill the contract requirements. The second lowest bidder (L2) quoted Rs. 36.97 Crore, which is 14.67% above the market survey rates.
v) Deomali: The rates discovered through the market survey amount to Rs. 29.22 Crore, while the price quoted by the lowest bidder is Rs. 33.81 Crove, which is 15.74% above market survey rates.
vi) Pasighat: The rates discovered through the market survey amount to Rs. 47.02 Crore, while the price quoted by the lowest bidder is Rs. 54.99 Crore, which is 16.96% above market survey rates.
b) Analysis Summary: A comparative statement highlighting significant discrepancies between the market rates discovered through the market survey and the bidder's quoted prices is summarized package-wise as below:
(Annexure-XIII)."
49. From the above, it is seen that the justification for low bids for the aforesaid packages were analyzed in a scientific manner by adopting a clear methodology, leaving out any ambiguities. The summary of comparative analysis revealed that in most of the packages, the rates discovered through market survey are well above the price quoted by the lowest bidders. In the instant case also, Pasighat package, the rates discovered from market survey rates amounted to Rs. 47.02 crores, while the price quoted by the lowest bidder was Rs. 54.99 crores, which was 16.96% above the market Page No.# 36/60 survey rates.
50. After the above analysis, the Sub-committee has concluded and recommended as follows: -
"Conclusion and Recommendations:
After a thorough re-examination of the justifications provided by the bidders and a detailed market analysis, the Sub-Committee found significant differences between the market rates discovered through the market survey and the prices quoted by the bidders. The findings indicate that the bidders quoted higher rates than the approximate landing rates determined by the Sub-Committee. Therefore, regardless of their ranking as L1, L2, L3 or L4 in the Auto-Generated Price Schedules, the bidders appear to have the capability to perform the contract at the prices quoted by them, in relation to the subject matter of the contract, scope, delivery schedule, and allocation of risks. However, it should be noted that in the Namsai package, M/S Aquarian Enterprises has quoted (-3.84%) below the approximate landing rates determined by the Sub-Committee, raising concerns about their ability to fulfil the contract requirements."
51. In view of the aforesaid analysis and evaluation of the lowest bids reflected in the report of the Sub-committee, it is seen that the lowest bidders were, in fact, justified their low bids, except for M/s Aquarian Enterprises in the Namsai package. It is worthwhile to mention that the second lowest bidder i.e., M/s D & G Constructions (Respondent No. 1) in the Namsai package was found to be suitable, however, the aforesaid M/s D & G Constructions withdrew it's bid vide, it's letter dated 30.12.2024, citing the reason that it had quoted a rate of 11.25% below the estimated cost and due to escalated price, the bid price would not be viable for it to perform the contract. The learned Standing Counsel for the Power Department has submitted a Page No.# 37/60 comparative chart of the bidders and the status of their bids during the course of the argument. The same is reproduced herein below: -
BIDDERS COMPARISON Sl.No Name of Name of Bid Awarded Reason . Package Bidders Ranking To Withdrawal of bid by bidder Jayanta L1 and release of Khaund Earnest Money Deposit Withdrawal of 1 bid by bidder Rupa Dee Control L2 and release of Earnest Money Deposit T&T T & T Projects L3 Projects A.R. L4 Quoted highest Enterprises Withdrawal of bid by bidder SRV Techno L1 and release of 2 Itanagar Earnest Money Deposit T&T T & T Projects L2 Projects Withdrawal of bid by bidder SRV Techno L1 and release of 3 Naharlagun Earnest Money Deposit T&T T & T Projects L2 Projects Quoted below approximate landing rates as determined by Aquarian sub-committee;
L1 Enterprises raised concerns about their ability to fulfil 4 Namsai contract requirements.
D&G Withdrawal of
L2
Construction bid
T&T
T & T Projects L3
Projects
Nirvana
L4 Quoted highest
Enterprises
Agarwal Withdrawal of
5 Deomali L1
Traders bid by bidder
Page No.# 38/60
and release of
Earnest Money
Deposit
T&T
T & T Projects L2
Projects
M/s Win Infra
6 Pasighat Power L1 Issued LoI
Limited
52. From the above, it is seen that L-1 and L-2 bidders in the Rupa package had withdrawn their bids by taking the Earnest Money Deposited by them. The SRV Techno, L-1 in the Itanagar package had also withdrawn the bid and took back the Earnest Money Deposit. The SRV Techno, who was L-1 in the Naharlagun package had also withdrawn it's bid and took back the Earnest Money Deposit. M/s Aquarian Enterprises, which was L-1 in Namsai package was not offered the contract as it's bid price was lower than the approximate landing rate determined by the Sub-committee. As mentioned above, the L-2 bidder, M/s D & G Constructions had also withdrawn it's bid. Agarwal Traders, which was L-1 in Deomali package, had also withdrawn it's bid by taking back the Earnest Money Deposit. In the Pasighat package, the appellant was found to be L-1 as it's bid price was found to be justified by the Sub-committee. Therefore, the LoI was issued to them on it's recommendation by the Sub-committee.
53. In view of the aforesaid, the contention raised by the Senior Counsel for the Respondent No. 1 that the lowest bidders in other packages were not offered the contract, is not correct and falls flat.
54. Since the issue involved in the instant case is about the decision making process in the NIT dated 17.01.2024, it may be necessary to Page No.# 39/60 examine the Memorandum dated 18.09.2023 and it's binding effect on the aforesaid NIT. As discussed above, the Memorandum dated 18.09.2023 was issued by way of guidelines to be followed in the Power Department in the matters of tenders/bid process, it's evaluation and award of contract. It is seen from the aforesaid Memorandum that the Memorandum has provided a range for justified bids. So, the bids within the aforesaid justified range are to be considered for award of the contract. It is also seen that parties participating in all the packages had agreed to be bound by the aforesaid Memorandum in the pre-bid meeting held on 25.01.2024. However, during the course of the hearing of the matter, the learned counsel appearing for the appellant has submitted a document i.e., one Memorandum dated 12.01.2024, submitted to the Secretary, Department of Power, Government of Arunachal Pradesh, which was signed by the representatives of various bidders in respect to various packages mentioned above. The Memorandum reveals that the bidders had submitted their bids in different circles in different dates till 11:00 AM of 28.09.2023. But the Memorandum dated 18.09.2023 came to public domain at about 12.30 PM on 28.09.2023 i.e., one & half hours after all the bidding processes of the RDSS Scheme of Arunachal Pradesh were closed. It also reveals, amongst others, that the bidders had serious objection to the Clause No. 4 (justified bid price ranges category wise) of the Memorandum. It also reveals that the bidders were not agreeable to the aforesaid Clause No. 4 as the same violated all the fundamental laws of preparing and inviting tenders. It is also reveals that the aforesaid Memorandum dated 18.09.2023, as per the Page No.# 40/60 bidders, was in violation of Clause No. 34, Clause No. 35, Clause No. 36 and Clause No. 37 of the SBD available at Page No. 44 & 45. In view of the above, the bidders, in fact, had requested for withdrawal of the same.
It is important to point out that though this document has been placed before this Court during the appellate stage, the same was not placed before the learned Single Judge.
However, what is discernible from the aforesaid Memorandum submitted by the bidders on 12.01.2024 is that bidders including the appellant as well as Respondent No. 1 were in doubt about the applicability of the aforesaid Memorandum and therefore, they had requested for the withdrawal of the same. In fact, though the Respondent No. 1 had fought tooth and nail before the learned Single Judge as well as before this Court about the adherence to the guidelines mentioned in the aforesaid Memorandum dated 18.09.2023, they objected strongly to the same in the earlier occasion as could be seen from the Memorandum dated 12.01.2024.
55. The stand of the Respondent No. 1 is that the Respondent No. 1 was not aware of formation of any Sub-committee and the Respondent No. 1 had submitted a representation on 21.11.2024 for re-evaluation of the financial bid as no action was taken for allotment of the work in spite of elapse of sufficient time. It was also contended that the representation of the Respondent No. 1 was duly considered and after such re-evaluation, the Tender Opening Committee, vide communication dated 03.01.2025, had indeed made it's Page No.# 41/60 recommendation in favour of the Respondent No. 1 by coming to a conclusion that the bid of the Respondent No. 1 was found to be the least deviated from the standard rate. It was also the stand of the Respondent No. 1 that the report of the Sub-committee was in public domain on 12.01.2025 only. It was also the stand of the Respondent no. 1 that the recommendation of the Sub-committee was discriminatory in nature as the subcommittee had though accepted abnormally low bids, the LoIs were not issued to other bidders bidding low prices, exception being the Appellant.
56. In view of the aforesaid stands taken by the Respondent No. 1, it becomes necessary for this Court to examine whether the decision making process adopted by the Sub-committee in recommending the appellant in the Pasighat package is as per law or not.
57. As noted in the preceding paragraphs that the Sub-committee was constituted by the respondent Government especially, to examine the abnormally low bids, as Clause No. 36 of the SBD mandates for seeking justifications from the bidders who had submitted the abnormally low bids.
58. A careful reading of Clause 36.1, 36.2 & 36.3 makes it clear that the SBD clearly mandates for providing an opportunity for justification to the bidder who submitted abnormally low bid. Therefore, this Court is of the considered opinion that seeking of justification is in proper compliance of the SBD. The only aspect that is required to be examined as to whether the constitution of the Sub-committee is allowed by the tender document or not and if, the tender document Page No.# 42/60 does not provide any provisions for such constitution, the same can be termed as illegal being beyond the SBD. It may be worthwhile to mention herein that the Respondent No. 1 did not challenge the constitution of the Sub-committee by the respondent Government, rather it has challenged the decision of the Sub-committee in issuance of the LoI dated 15.01.2025 to the appellant. However, while deciding the writ petition, the learned Single Judge has arrived at a conclusion that there was no legal backing for constitution of a subcommittee to seek justification coupled with the operation of the Memorandum dated 18.09.2023. The learned Single Judge has also come to the finding that as far as the Pasighat package was concerned, the justification was already sought from the appellant and the same was already rejected by the Tender Opening Committee and hence, there was no occasion for reopening such rejection by the Sub-committee. In this regard, we have already discussed that the Sub-committee was constituted by the respondent Government in view of the various complaints received by the State Government for not providing the opportunities to bidders who submitted abnormally low bids for justifications as per Clause 36 of SBD. It is not in dispute that the Sub-committee initially did not include the bid of Pasighat package, however, the same was included in a later stage and the same was also evaluated along with the bids of other packages as per the terms of reference of the Sub-committee. It is also seen that the justification provided by the appellant on earlier occasions, was rejected by the Tender Opening Committee without carrying out proper evaluation rather there was no mechanism set for evaluation of the justification by the Tender Opening Committee.
Page No.# 43/60 However, as seen from the report of the Sub-committee, the Sub- committee had evaluated the abnormally low bids in a very detailed manner taking into account various aspects necessary for such evaluation. It is also seen that though there was a recommendation in favour of the Respondent No. 1 by the Tender Opening Committee, the same was neither concluded by approval of the concerned Authorities nor resulted in issuance of an LoI. Therefore, since the contract was not concluded, this Court finds no infirmity in referring the bid of the Pasighat package also to the Sub-committee.
59. It is seen that the Respondent No. 1 has assertively argued that the Memorandum dated 18.09.2023, needed to be rigorously adhered to while evaluating the bids under NIT dated 17.01.2024 and any bid which is out of the justified range, cannot be considered. However, while reading the scope of Clause No. 36 of the SBD along with the Memorandum dated 18.09.2023, this Court finds that there is no conflict between the said Memorandum and Clause No. 36 of the SBD. Though the Memorandum provides for the range of justified bids, the Clause No. 36 mandates that the abnormally low bid needs to be evaluated after seeking proper justification from the concerned bidder. Therefore, this Court does not find any wrong in seeking justification from the bidder who's bid is abnormally low, otherwise, such non- providing of opportunity would have violated the mandates under Clause No. 36 of the SBD.
60. Mr. Das, learned Senior Counsel for the appellant, in support of his argument that this Court must not act as an appellate authority Page No.# 44/60 over the decision of the State relied on the case of Tata Cellular vs. Union of India, reported in (1994) 6 SCC 651, wherein the Hon'ble Apex Court has held that while the principles of judicial review would apply to the exercise of contractual powers by Government Bodies in order to prevent arbitrariness or favouritism, it has also been held by the Hon'ble Apex Court that there are inherent limitations in exercise of the power of judicial review. He submitted that the Government is the guardian of finances of the State and is expected to protect the financial interest of the State. He submitted that there can be no question of infringement of Article 14, if the Government tries to get the best person or the best the bid suitable for the performance of the contract. Therefore, he submitted that the right to choose the best one cannot be considered to be an arbitrary power. He submitted that Government must have freedom of contract and the fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere.
61. Mr. Das, learned Senior Counsel for the appellant has also relied upon the judgment of this Court in the case of B. B. Enterprises vs. The State of Arunachal Pradesh & Ors., reported in (2020) 3 GLR 660, wherein this Court held that matters which are within the domain of Expert Committees having specialised knowledge, the Court must restrain itself from any interference.
62. In support of his various contentions and submissions, Mr. P. K. Tiwari, learned Senior Counsel for the Respondent No. 1 has relied upon the following case laws: -
Page No.# 45/60
1. Tractor & Farm Equipment Ltd., reported in (2004) 1 GLT 117 (Para 12 & 26).
2. Tej Prakash Pathak vs. State of Rajasthan, reported in (2005) 2 SCC 1 (Para 65.2).
3. Jagdish Mandal vs. State of Orissa, reported in (2007) 14 SCC 517 (Para
22).
4. Kriloskar Ferrous Industries Ltd. vs. Union of India, reported in (2025) 1 SCC 695 (Para 80).
5. Ramana Dayaram Shetty vs. International Airport Authorities, reported in (1979) 3 SCC 489 (Para 10).
63. While relying upon the case of Tractor & Farm Equipment Ltd., (supra), the learned Senior Counsel for the Respondent No. 1 submitted that since a writ appeal is not statutory appeal, if two views are possible and the view which is reasonable and possible has been adopted by a Single Judge, the other view howsoever appealing to the Division Bench, it is the view adopted by the Single Judge, normally, be allowed to prevail.
64. The learned Senior Counsel for the Respondent No. 1 relied on the case of R. D. Shetty (supra) to argue that an Executive Authority must be rigorously held to the standards by which it professes its action to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. The learned Senior Counsel for the Respondent No. 1 has also relied on the case of Kriloskar Ferrous Industries Ltd. (supra), wherein also the same proposition as in R. D. Shetty's (supra) case, has been laid down by the Hon'ble Apex Court.
Page No.# 46/60
65. The learned Senior Counsel for the Respondent No. 1 relied on the case of Jagdish Mandal (supra), which relates to the aspect of judicial review in contractual matters. He submitted that a judicial review is must when there is apparent arbitrariness, irrationality, unreasonableness, bias and malafides in an administrative action.
66. The learned Senior Counsel for the Respondent No. 1 has cited the case of Tej Prakash Pathak (supra), wherein, a Constitutional Bench of the Hon'ble Supreme Court has resolved an issue regarding changing the rules of the game after the game has begun.
67. This Court, while agreeing with the principle laid down in the case of Tractor & Farm Equipment Ltd., (supra), is also duty bound to examine the correctness and legal sustainability of the judgment and order passed by the Single Judge. The Appellate Court is not debarred from disagreeing with the view of the Single Judge, if the Appellate Court finds that there is a material error of fact or law in the judgment in question. Therefore, this Court is of the considered opinion that a case of Tractor & Farm Equipment Ltd., (supra) is not applicable to the instant case due to the findings that have been arrived at by this Court.
68. As far as the case of R. D. Shetty (supra) is concerned, the ratio laid down by the Hon'ble Apex Court is settled legal position. However, in the instant case, as has been found, that there was no new conditions which have been taken into account by the Sub-committee rather the Sub-committee had rigorously complied with the provisions laid down in the NIT dated 17.01.2024. The Sub-committee, in Page No.# 47/60 compliance to Clause No. 36 of the SBD, examined and evaluated the abnormally low bids submitted by the bidders, following a well defined and transparent mechanism. It is seen that the Sub-committee has neither taken into consideration any irrelevant material nor it has left out any relevant material in coming to the conclusion after the evaluation process. Therefore, the contention raised by the learned Senior Counsel for the Respondent No. 1 cannot be accepted. The same opinion also goes to the case of Kriloskar Ferrous Industries Ltd. (supra).
69. In the case of Jagdish Mandal (supra), the Hon'ble Apex Court has discussed the scope of judicial review of award of contracts in great details. In this regard, the following paragraphs being relevant are reproduced herein below: -
"21. We may refer to some of the decisions of this Court, which have dealt with the scope of judicial review of award of contracts.
21.1. In Sterling Computers Ltd. v. M & N Publications Ltd.¹ this Court observed: (SCC p. 458, para 18) "18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision- making process'... the courts can certainly examine whether 'decision-making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution."
21.2. In Tata Cellular v. Union of India this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus: (SCC pp. 687-88, para 94) "(1) The modern trend points to judicial restraint in administrative action.
Page No.# 48/60 (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative action. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, c a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
(emphasis in original) This Court also noted that there are inherent limitations in the exercise of power of judicial review of contractual powers. This Court also observed that the duty to act fairly will vary in extent, depending upon the nature of cases, e to which the said principle is sought to be applied. This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14.
21.3. In Raunaq International Ltd. v. I.V.R. Construction Ltd, this Court dealt with the matter in some detail. This Court held:
(SCC pp. 500-01, paras 9-11) Page No.# 49/60 "9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations. These would be:
(1) the price at which the other side is willing to do the work;
(2) whether the goods or services offered are of the requisite specifications;
(3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important;
(4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality;
(5) past experience of the tenderer, and whether he has successfully completed similar work earlier;
(6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow-up action, rectify defects or to give post-contract services.
Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.
10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract. (2) The goods or services which are being commissioned could be Page No.# 50/60 for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work-thus involving larger outlays of public money and delaying the availability of services, facilities or goods, e.g. a delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation.
11. When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene a under Article 226 in disputes between two rival tenderers."
21.4. In Air India Ltd. v. Cochin International Airport Ltd, this Court summarised the scope of interference as enunciated in several earlier decisions thus: (SCC pp. 623-24, para 7) Page No.# 51/60 "7.... The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene."
21.5. In Assn. of Registration Plates v. Union of India this Court held:
(SCC p. 700, pага 43) (emphasis supplied) "43.... Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on Page No.# 52/60 business with 9 the Government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest."
21.6. In B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., this Court observed: (SCC p. 568, para 56) "56. It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefore; the same ordinarily being within its domain, court's interference in such matter should be minimal.
The High Court's jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record."
70. From the aforesaid paragraphs, it is clear that while exercising the power of judicial review in respect of contracts entered into on behalf of the State, the Court is primarily concerned as to whether there has been any infirmity in the decision making process to examine whether the decision making process was reasonable and rational, not arbitrary and violative of Article 14 of the Constitution. It is also apparent that the judicial review of such actions of the State has certain limitations and the duty to act fairly will vary in extent, depending upon the nature of cases to which the judicial review is sought to be applied. It is also seen that the Government must have freedom of contract, and a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere of quasi-administrative sphere. It has been also held the by the Hon'ble Apex Court that quashing the decisions of a Government in such contracts, impose heavy administrative burden on the administration which leads to increased and unbudgeted expenditure. It is also seen that the Hon'ble Apex Court Page No.# 53/60 has held that by Court's intervention, a project may be considerably delayed, thus escalating the cost far more than any saving which would ultimately effect the public money. Therefore, unless the Court is satisfied that there is a substantial amount of public interest, or the transaction is entered into malafide manner, the Court should not intervene under Article 226 in disputes between two rival tenderers. The Hon'ble Apex Court has also held that even when some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 of the Constitution with great caution and should exercise it only in furtherance of public interest and not merely for making of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overall well being of public interest requires interference, the Court should intervene. It is also been held by the Hon'ble Apex Court that the employer is the best judge, therefore, the same ordinarily being within it's domain, Court's interference in such matter should be minimal.
71. As far as the case of Tej Prakash Pathak (supra) is concerned, this Court is of the opinion that no such rule of the game has been changed in the instant case after the game has begun. In the instant case, the Sub-committee was constituted only to examine the justifications of abnormally low bids submitted by the bidders and such examination is permissible under Clause No. 36 of the SBD. Therefore, it cannot be said that any introduction of new rule has been done by the State respondents.
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72. Having examined the cases cited by the learned counsel for the parties, this Court is of the opinion that the following case laws are also relevant to be considered in the context of the case in hand.
73. While exercising the power of judicial review to find out whether the decision of the State respondents was arbitrary or unjust, could be examined by considering the ratio laid down by the Hon'ble Apex Court in the case of Tata Cellular (supra). The Hon'ble Apex Court in Tata Cellular (supra) held as under: -
"70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
XX XX XX
77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or, Page No.# 55/60
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696], Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
XX XX XX
94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
Page No.# 56/60 Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
Based on these principles we will examine the facts of this case since they commend to us as the correct principles."
74. In the case of Silppi Constructions Contractors vs. Union of India & Ors., reported in 2019 SCC OnLine SC 1133, the Hon'ble Apex Court has held that the Courts must realise their limitations and the effect which needless interference in commercial matters would cause. It was held that Court should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. It was held that Courts must give "fair play in the joints" to the Government and Public Sector Undertakings in matters of contract and Courts must not also interfere where such interference would cause unnecessary loss to the public exchequer.
75. In the issue of fairness in action by the State in a tender process and violation of Article 14, the Hon'ble Apex Court in the case of Michigan Rubber (India) Ltd. -Vs.- State of Karnataka and Ors., reported in (2012 ) 8 SCC 216 has laid down as follows -
Page No.# 57/60 "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 discernable 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)........
(c)..........
(d)..........
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restricted since no person can claim a fundamental right to carry on business with the Government. "
76. In the case of Galaxy Transport Agency vs. New JK Roadways, reported in 2020 SCC OnLine SC 1035, the Hon'ble Apex Court again reiterated that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second guessed by a Court in judicial review proceeding.
77. A similar view regarding the employer's freedom to evaluate and examine the best bid has been discussed by the Hon'ble Apex Court in the case of Montecarlo Limited -Vs- National Thermal Power Corporation Limited, reported in (2016) 15 SCC 272, wherein the Hon'ble Apex Court has observed as follows -
"26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is Page No.# 58/60 common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third-party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or sub serves the purpose for which the tender is floated, the Court should follow the principle of restraint. Technical evaluation or comparison by the Court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints."
78. In view of the aforesaid propositions of law laid down by the Hon'ble Apex Court, it is apparent that the authority issuing the tender is the best person to protect its interest by evaluating the tender in the best manner in terms of the conditions laid down in the tender document. It is also discernible that while evaluating the bids, it should have the fair play of joints by constituting the right and proper body equipped of expert knowledge to evaluate the bids. If there is no apparent arbitrariness, illegality, favouritism and biasness, the Courts Page No.# 59/60 need not unnecessarily interfere acting in a hyper technical manner.
79. Coming to the facts of the case, it is noticed that the Sub- committee was constituted by the State respondent due to the compelling reason that several complaints were made by participating bidders in different packages, regarding non-providing of opportunities to them for justifying their abnormally low bids in terms of Clause No. 36 of the SBD. In fact, one of such bidders had already approached this Court being aggrieved by the non-action of the respondent authorities in giving it opportunities for such justification. It is seen that the Sub- committee was manned by experts from different domains such as Power, Finance and Judicial Department. We have already discussed in details that the Sub-committee has acted in a very transparent manner by providing opportunities to the bidders to justify their abnormally low bids. It is also seen that the Sub-committee gathered all the necessary information and data regarding market price from non other than the approved vendors of the REC Limited, which is a Government of India Undertaking, dealing with power finance. It is also seen that while calculating the landed price for the bids, the Sub-committee has also taken into account the miscellaneous and statutory expenses, such as Transportation costs, Profit margins, GST, Insurance and Income-tax. After such detailed evaluation, as already discussed in details above, the Sub-committee has recommended the lowest bidders, including the present appellant.
80. This Court has also seen that several bidders, who were found to be justified with their low bids in their respective packages, could not be issued the LoIs due to various reasons, including their Bids withdrawal Page No.# 60/60 by withdrawing their EMDs. Therefore, it cannot be said that the appellant is an exception, who has been favoured by the respondent Department by issuing the LoI dated 15.01.2025. Thus, we are of the considered opinion that there is no illegality committed by the respondent Department by constituting the Sub-committee for evaluating the justifications of the bidders for their abnormally low bids, which is very well within the power and jurisdiction of the State Government. Since, the evaluation process is found to be detailed and transparent, applicable to all the bidders, there is no infirmity in the process of evaluation of the justifications of abnormally low bids in terms of Clause No. 36 of the SBD. Hence, any judicial interference in the instant tender with regard to the Pasighat package is unwarranted in the background of the facts involved.
81. In view of the discussion made hereinabove, the impugned Judgment and Order dated 23.05.2025, passed by the learned Single Judge in WP(C) No. 48/2025 is interfered with and accordingly, the same is hereby set aside and quashed.
82. Consequently, the respondent Department is at liberty to allot the concerned work to the most eligible bidder as per law.
83. The instant writ appeal is allowed and disposed of accordingly.
JUDGE JUDGE Comparing Assistant