Allahabad High Court
M/S Kkspun India Ltd. Thru. ... vs U.P. Jal Nigam Thru. ... on 18 June, 2021
Bench: Rajan Roy, Saurabh Lavania
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
A.F.R.
Court No. - 2
Case :- MISC. BENCH No. - 12227 of 2021
Petitioner :- M/S Kkspun India Ltd. Thru. Director Himanshu Gupta
Respondent :- U.P. Jal Nigam Thru. Chairman,Lko.& Anr.
Counsel for Petitioner :- Desh Deepak Singh,Abhishek Dwivedi,Anilesh Tewari,Devashish Chauhan,Divyanshu Bhatt,Shashwat Singh
Hon'ble Rajan Roy,J.
Hon'ble Saurabh Lavania,J.
(Per - Rajan Roy, J.)
Heard.
By means of this writ petition, the petitioner has prayed for issuance of a writ of Mandamus to direct the respondents to amend Clause 2.2.4 of the tender document in relation to Notice for Invitation of E-Tenders dated 05.04.2021, contained as Annexure No. 2 to this writ petition to the limited extent of withdrawing the provision with respect to non-consideration of "Any Agency/ Firm or its known Partners/ Directors against which/ whom any investigating authority has instituted any vigilance enquiry or there are criminal proceedings in any Court of law" for awarding of the tender.
The contention of learned Counsel for the petitioner is that insertion of such a condition in the tender document is arbitrary, unreasonable and illegal as it amounts to treating the petitioner guilty whereas there is no judgment of conviction in the criminal proceedings which are pending against the petitioner and as of now as per principles of criminal jurisprudence, the petitioner is to be deemed to be innocent till proved guilty. However, by inserting the aforesaid condition the petitioner has been ousted from the zone of consideration. He says that this condition has been deliberately put for the first time so as to oust the petitioner and it is therefore tailormade to suit certain favoured persons.
In support of his contentions Sri Divyanshu Bhatt, learned Counsel for the petitioner relied upon the decision of Hon'ble Supreme Court reported in 2014 (9) SCC 1 (Manoj Narula Vs. Union of India); the judgment of Gujrat High Court in Special Civil Application No. 23050 of 2019 dated 10.02.2020 and a decision of the Allahabad High Court dated 03.04.2012 rendered in Writ Petition No. 7447(MB) of 2011.
It is the admitted factual position that FIR No. RC0062017A0026 was lodged by the Central Bureau of Investigation, under Section 120B read with Section 420, 467, 468, 471 IPC and Section 13(2) & 13(1)(d) Prevention of Corruption Act, 1988, wherein a charge-sheet has been filed against the petitioner's officers/ agents on 15.02.2021 before Court of criminal jurisdiction, although cognizance has not been taken as yet by the said court. It is also an admitted position that the tender document in respect to which a writ of mandamus has been sought for amending Clause 2.2.4 thereof was issued on 05.04.2021 i.e. after the filing of charge-sheet against the petitioner in the Court of Special Judge, Central Bureau of Investigation West Lucknow by the CBI.
It is worthwhile to quote the relevant tender conditions of which Clause 2.2.4 is a part. The same reads as under:-
"2.2. Prohibition from Bidding:
2.2.1. Bidders shall not be under a declaration of ineligibility for corrupt and fraudulent practices by the Central or State Government Department, U.P. Jal Nigam or any public undertaking, autonomous body, authority by whatever name called under the Central or the State Government.
2.2.2. Any bidder having criminal record is not allowed to participate in the bidding process. Any person who is having criminal cases against him or involved in the organised crime or gangster activities or Mafia or Goonda or Anti-social activity are strictly prohibited to participate in the bidding process. If it is established that any bidder has criminal record, his bid shall be automatically cancelled.
2.2.3. Any bidder who is an Advocate and/or Registered with any State Bar Council/ Bar Council of India shall not be allowed to participate in the bidding. If it is established that the contractor is registered with the state bar council, his bid shall be treated as automatically cancelled.
2.2.4. Any agency / firm or its known Partners/ Directors against which/ whom any investigating authority has instituted any vigilance enquiry or there are criminal proceedings in any Court of Law or has been debarred or blacklisted by any Govt./ Semi Govt./Board/ Corporation shall not be considered for award, unless such debarment/ blacklisting period has ended. An affidavit to this effect shall be submitted by the participating agencies / firms.
2.2.5. The bidder shall have to enter into Integrity Pact with U.P. Jal Nigam, he should therefore acquaint himself with the contents of the Integrity Agreement."
Petitioner has chosen to challenge only Clause 2.2.4 whereas Clause 2.2.2 also prohibits any bidder having criminal record from participation in the bidding process. It also says that any person who is having criminal cases against him or involved in organized crime or gangster activities or Mafia or Goonda or Anti-social Activities are strictly prohibited to participate in the bidding process and any bidder having criminal record, his bid shall automatically be cancelled.
Clause 2.2.4 has already been referred in the context of relief claimed in the writ petition. The said clause says that any Agency/ Firm or its known Partners or Directors against which/ whom any investigating authority has instituted any vigilance enquiry or there are criminal proceedings in any Court of law or has been debarred or blacklisted by any Government/ Semi Government/ Board/ Corporation shall not be considered for award of tender unless such proceedings have ended. Now it is an admitted position that a charge-sheet has been filed in the Court of Special Judge, CBI West Lucknow against petitioner's officers under Sections of relevant Statutes as already referred hereinabove, therefore, by means of this Clause, petitioner is prohibited from submitting his tender bid. The only question to be considered by this Court is as to whether this condition is arbitrary and unreasonable or not? The ruling cited by counsel for petitioner as rendered by the Hon'ble Supreme Court in the case of Manoj Narula vs. Union of India; (2014) 9 SCC 1; does not relate to a tender document/ contract matter. It in fact relates to a matter pertaining to an election to a public Office. Matters of contract and tender fall in a different realm. The tendering authority who is inviting tenders is entitled to prescribe reasonable conditions keeping in mind the kind of person from which he would like to have the bids so as to ensure smooth operation of the contract and its completion without any glitches. If a condition such as Clause 2.2.4 is included in the tender document then the intention of the tendering authority inviting the tender is to avoid participation of any person against whom there may be criminal proceedings or vigilance enquiry, that is a person regarding whom there may be a cloud as to its functioning etc. The fact that such a person may not have been convicted in the criminal proceedings is not very material as such a tendering authority who is inviting the tender is entitled to have such a condition in the tender document so as to ensure that the work is performed by bidder who has impeccable and unimpeachable record. It can not be said that such a condition is arbitrary or unreasonable. In fact, we would like to refer to a decision, which has been cited by counsel for the petitioner itself in paragraph 16 of the writ petition i.e. Michigan Rubber (India) Ltd. vs. State of Karnataka & Ors. (2012) 8 SCC 216; wherein it has been inter-alia held in paragraph 19(c)- "In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted; (e) If the State or is instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government."
In paragraph 20 Hon'ble the Supreme Court has mentioned the questions which a Court should pose to itself in exercise of power of judicial review, before interfering in tender or contractual matters and they are :- (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: " the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; and (ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article 226."
Apart from the fact that petitioner has sought a writ of mandamus instead of a writ of certiorari (which would have been the appropriate relief) directing the opposite party to amend Clause 2.2.4, that too, without challenging other similar Clauses such as Clause 2.2.2 but, even if, we ignore this aspect of the matter for a moment, we are of the opinion that merely because of insertion of such a condition, it can not be said that the petitioner has been treated guilty of the criminal offence alleged that too during pendency of the criminal proceedings. As already stated all that such a condition does is to keep out such persons against whom vigilance enquiry or criminal proceedings are pending, which can not be said to be irrational. The tendering authority is entitled not to have business dealings with persons who are undergoing vigilance enquiry or criminal proceedings. It is a choice which is available to the tendering authority in a matter of award of tender/ contract. This High Court under Article 226 of the Constitution of India or, for that matter, the petitioner can not compel the opposite parties to allow a person against whom vigilance enquiry or criminal proceedings are pending to participate in the tender especially as the petitioner does not have an indefeasible right much less a fundamental right to carry on business with the opposite party as held by the Supreme Court in the case of Michigan Rubber (supra).
The contention that the condition has been tailormade to favour certain persons it does not have the requisite factual foundation in the writ petition. As already stated, the condition is neither arbitrary nor irrational. It can also not be said that it is against public interest. As observed by the Hon'ble Supreme Court, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, which we do not find in this case i.e. we do not find any malice or arbitrariness nor that the condition has been deliberately inserted to favour any person. The decisions cited by counsel for petitioner do not help its cause.
For all these reasons, we are not inclined to interfere in this matter. We accordingly dismiss this writ petition.
Order Date :-18.06.2021
Jyoti/Vinay/-
