Bombay High Court
J.M. Mhatre Infra Private Limited vs Union Of India,Ministry Of ... on 8 December, 2014
Bench: V.M. Kanade
W.P.1914-2014
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.1914 OF 2014
M/S. J. M. Mhatre Infra Private Limited
(Through its Director Mr. Vijay Mhatre)
Add.: Market Yard, Plot No.492,
Sahakar Nagar, Panvel- 410206.
Raigad, M.S. ...Petitioner
vs.
1. Union of India, Ministry of Defence
(Through its Secretary, New Delhi)
2. The Chief Engineer, Navy
Add.: 26, Assaye Building,
Colaba, Mumbai- 400 005. ...Respondents
Mr. C.G. Gawanekar with Mr. G.S. Hiranandani,
for the Petitioner.
Mr. S.R. Rajguru with Mrs. S.V. Bharucha, for
the Respondents.
CORAM : V.M. KANADE &
P.D. KODE JJ.
Judgment reserved on : 24th September,2014
Judgment pronounced on: 8th December, 2014
JUDGMENT (Per P.D.Kode, J.)
. By this petition, filed under Article 226
of the Constitution of India, the petitioner has
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prayed for-
(aa) issuing a Writ of Mandamus or a Writ or direction in the
nature of Mandamus calling for records and proceedings from
Respondent No.2 regarding decision arrived for re-inviting the
Tender in Second Call for the subject work and quash and set
aside the same.
(bb) directing the Respondents not to take further steps
including issuing the fresh tender as decided and conveyed by
the Communication dated 27th February, 2014, pending the
hearing and final disposal of the Petition.
2. Mr. C.G. Gawanekar, learned counsel for
the petitioners urged that paragraph 7-B of tender
notice originally issued on the website of
respondent No. 2 for the "work the provision of
extension and up-gradation of runway with allied
operation infrastructure at CGAS, Ratnagiri at the
estimated cost of Rs. 73 Crores" required
experience of having successfully completed
similar work. The said paragraph further recorded
that "the similar work" means construction of
runway work and pavement quality control concrete
flexible and rigid pavement for highway using PQC
flexural strength 44 kg/cm2 DBM Glass Grid bitumen
PMB-40 DLC WMM, Gsb of similar magnitude. It also
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contained clause 18 of usual nature to the effect
that "accepting officer does not bind to accept
lowest or any tender to give any reasons for not
doing so".
3. It was urged that on 20th January, 2014
petitioner submitted the tender along with Earnest
Money Deposit of Rs. 11,04,000/-. After opening
the bids on 21st January, 2014, the petitioner's
bid of Rs.63,60,08,015.30/- was found to be lowest
and as such he was listed as L/1.
4. It was further urged that the respondent
No. 2 vide letter dated 28th January, 2014 pointed
out that rates quoted for certain items mentioned
in the list appended with said letter were freak
high and requested to reconcile and offer revised
rates and accordingly the petitioner vide letter
dated 3rd February, 2014 submitted the revised
reduced rates for approval and necessary action.
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It was urged that inspite of it, as the
petitioners did not receive letter of acceptance
from respondents No. 2, expected by them due to
occurring of such events, wrote letter dated 17 th
February, 2014 requesting respondent No.2 for
issuing the letter of acceptance in their favour.
5. It was urged that from the delay occurred
the petitioner apprehended that the respondent No.
2 may not issue letter of acceptance and hence
filed the present petition amongst other mainly
for the relief of "(a) That this Hon'ble Court be
pleased to issue a Writ of mandamus or a Writ or
direction in the nature of Mandamus calling for
records and proceedings from Respondent No.2
regarding work of Extension and Up-gradation
Runway along with Allied Operational
Infrastructure at CGAS, Ratnagiri; (b) Pending the
hearing and final disposal of the present Writ
Petition, this Hon'ble Court be pleased to direct
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the Respondents not to allot the said Tender Work
to Third Party;". After filing of the writ
petition as petitioner was informed by the
respondents that tender for the said work was
re-invited, they amended the petition for
challenging said intimation.
6. It is urged that, on 12th June, 2014
respondents filed an affidavit in reply relying
upon Clause No.18 in the tender notice and further
claimed that engineer in Chief MES Head Quarter,
New Delhi had decided to reissue a notice inviting
tenders from the contractors who have executed
runway work earlier and claimed that accordingly
fresh notice was issued inclusive of the note
therein that similar work means "resurfacing
construction/ construction of Runway works only".
7. The learned counsel urged that issuance of
such notice deprived the petitioner in
participating in response to said second call as
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they were lacking experience in constructing
runway.
8. It was urged that the respondent No. 2 in
their affidavit in reply did not ascribe any
reason for re-inviting the tender by issuing the
second notice. It is urged that according to the
petitioner said modification made in second notice
was malafide as pointed by the petitioner in the
affidavit in re-joinder dated 23rd June, 2014, as
while issuing tender notice dated 18th February,
2014 such clause was not introduced by Airport
Authority of India, Mangalore International
Airport for construction of runway at said
airport.
9. It was urged that further affidavit dated
19th July, 2014 filed by the petitioner pointed
that their work experience in constructing various
express ways, highways was identical to the nature
of the work mentioned in the tender notice issued
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by the respondent No.2 for constructing runway at
Ratnagiri. It was urged that the comparative
chart annexed to said affidavit denotes that
nature of work executed by the petitioner were
identical with work proposed to be carried out at
Ratnagiri highway.
10. It was urged that since the respondent
No.2 after finding out that the bid of the
petitioner was lowest had invited the petitioner
for further negotiation for reducing the rates
submitted as per the tender of the petitioner, the
respondents ought to have given valid reasons for
rejecting the original tender submitted by the
petitioner. It was urged that no such reasons were
spelt out from the letter dated 27th February, 2014
sent by respondent No.2 and hence while taking
such decision the authority (respondent No.2)
exceeded powers and committed an error of law. It
was urged that as no reasonable tribunal could
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have arrived at such a decision and as such the
decision taken by the respondent No.2 was illegal.
11. The learned counsel in support of his
submission placed reliance upon the decision of
the Apex Court delivered in the case of "
Tata
Cellular vs. Union of India reported in 1994 (6)
SCC page-651" and particularly upon paragraphs No.
77, 80, 81 and 93 to 95 therein and invited
attention to the principles summarized therein
after considering earlier decisions given by the
Apex Court.
12. It was further contended that the decision
arrived by the respondents to re-invite the tender
is thus arbitrary and in breach of above referred
decision of the Apex Court. It was urged that such
decision taken by amending "work experience" and
particularly the note of similar works, was only
for the purpose of excluding the petitioner from
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participating in the further tender invited and as
such malafide. It is urged that the reliance
placed by the respondent No. 2 upon clause 18 of
tender notice pertaining to right of rejection and
further reliance upon the purported decision of
engineer in Chief, Delhi purported to be based on
the CVC guidelines for construction of runways is
misplaced in as much as no such guidelines were
attached with the affidavit in reply nor the same
were placed before the Court for the perusal.
13. It was urged that petitioner along with
their affidavit of rejoinder, produced at page No.
50 to 53 the tender notice dated 18th February,
2014 issued by Airport Authority of India,
Mangalore, International Airport which had invited
the tenders for construction of runway retaining
definition of similar work in said notice. It is
urged that the same was contrary to the amended
tender notice issued by the respondents for
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re-inviting the tender for the work at Ratnagiri.
It was urged that runway work to be carried out by
said Airport Authority were bound to be in
consonance with CVC guidelines, if at all there
existed any such guidelines, as contended by the
respondents. It is urged in such eventuality
Airport Authority of India, Mangalore could not
have issued the tender notice dated 18 th February,
2014 i.e. a notice without seeking the experience
of similar work as sought by respondent in the
notice issued for re-inviting the tenders for the
work at Ratnagiri. The learned counsel reiterated
that the letter dated 27th February, 2014 addressed
to the petitioner does not give any reason as to
why such a decision to re-invite tender was taken
and hence in absence of any such reason in said
letter now substitution cannot be made by
incorporating such reason in the affidavit in
reply or in correspondence annexed with the
affidavit in reply. In the said context, the
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reliance was placed upon the decision dated 6 th
December, 2013 of this Court in "Writ Petition No.
5245 of 2011 in the case of Shishir Realty Private
Limited and Another vs. The Vice Chairman and
Managing Director, City and Industrial Development
Corporation of Maharashtra and 3 Others" and
particularly upon paragraph No. 15 therein.
14. Learned counsel thus prayed for allowing
the petition and quashing and setting aside the
decision of the respondent No. 2 to re-invite the
tenders on the count of it being arbitrary and
malafide and issued with a view to exclude the
petitioner for participating in spite of
petitioner being found suitable and qualified for
bidding and being listed as L/1 as per the
original notice.
15. Mr. S.R. Rajguru, the learned counsel for
the respondents submitted that after the opening
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of the bids on 21st January, 2014 for 6 tenders
submitted inclusive of that of the petitioner and
preparing comparative statements of the tenders,
the same were put before accepting officer on 6 th
February, 2014. It is urged that on the same day
the said officer recorded a note to that effect
that petitioner has no previous work experience of
the work mentioned in the tender to be carried out
in respect of runways as required as per the
Central Vigilance Commission guidelines (CVC
guidelines). It was urged that said report along
with the signed papers were forwarded to the
engineer in Chief at New Delhi for further
direction. The said directions were received vide
letter No. 13600/SC/PQC/77/E8 dated 18th February,
2014 (Annexure Exhibit-II). It was urged that
therein it was recorded that Director General
(work) has decided that the tender shall be
reissued with revised notice inviting tender only
to those contractors who had executed runway work
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earlier and hence directed to issue fresh notice
inviting the tender in newspaper and also on MES
website regarding the said requirement.
16. The learned counsel for the respondent
urged that in said premises respondents vide
letter dated 27th February, 2014 annexure Exhibit-C
informed the petitioner that the tender for the
relevant work at Ratnagiri was re-invited.
17. It was urged that as per the CVC
guidelines (Annexure Exhibit-IV) any runway work
costing more than Rs. 30 crores selection of the
tenders should be as per pre qualification
criteria "PQC" in respect of the work mentioned in
NIT should be entrusted to the contractor who has
got the experience of doing similar work.
18. It was urged that fresh notice for
inviting tender was issued on 15th March, 2014
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(Annexure Exhibit-V) in which it was specifically
mentioned that experience of having successfully
completed similar work during last 7 years i.e.
completion of 3 similar work in respect of
contract costing not less than Rs. 2920 lakhs or
completing two similar works costing not less than
50 % of the estimated cost i.e. each work costing
not less than Rs. 3650 lakhs or completing one
similar work costing not less than 80 % of the
estimated cost i.e. work costing not less than Rs.
5840 lakhs. It was urged that the note provided
that similar work means, re-surfacing/
construction/extension of runway works only.
19. It was urged the petitioner filed the
petition on 21st February, 2014 for setting aside
the tender issued by the respondent regarding the
work of extension and upgradation of runway at
CGAS Ratnagiri and introduced amendment on 10th
March, 2014 amending the prayer for setting aside
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of the decision for re-inviting the tender (as pr
Respondent's letter dated 27th February, 2014)
alleging in paragraph 18A to 18D of the petitioner
that reasons for said decision were not
communicated that experience of the work in the
re-invited tender was substantially changed, and
hence it was malafide, arbitrary and illegal
decision suffering from error of law and breach of
principles of natural justice and results in bias
so as to exclude the petitioner who was listed as
L/1 in course of opening of tender on 21st January,
2014.
20. The learned counsel thereafter by pointing
the affidavit in reply dated 12th June, 2014 urged
that as per the tender provisions the decision was
to be taken by either parties to accept or reject
the tender within 60 days from the date of the
receipt and opening of tender i.e. valid uptil 21st
March, 2014 and as such was not valid for
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acceptance after 22nd March, 2014. It was urged
that the tender work costing Rs. 73 crores was
based on pre qualification criteria mentioned in
CVC guidelines and hence by letter dated 18th
February, 2014 directions were issued for re-
inviting the tenders and accordingly fresh NIT was
published by letter dated 15th March, 2014. It was
submitted that although there is no specific
rejection of the tender, the tender of the
petitioner stood rejected so far earlier inquiry
is concerned and accordingly the petitioners were
informed about it by letter dated 27 th February,
2014.
21. It was urged that the allegations
regarding the malafide due to abandonment of
earlier tender are not valid because the said
tender was not floated as per CVC guidelines. It
was urged that the chief engineer (Navy), Mumbai
had put an endorsement that L/1 tenderer i.e. the
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petitioner has no previous experience of doing
runway work which was necessary because runway
work is not similar to the work which is done for
highways and other roads. It is urged, hence the
petitioner's contention of his having similar
experience is wholly incorrect.
22. It was urged that Court can take notice of
the fact that if the runway work is not carried
out properly then there is every possibility of it
resulting into occurring of an accident.
23. By placing reliance upon the decision in
the case of "Air India Ltd. vs. Cochin
International Airport Ltd. and Others"1, it was
urged that said decision reveals that financial
rating cannot be said to be sole criteria inviting
the tenders from experienced companies for ground
handling facilities at New Airport and accepting
the limited global bidding norms and recommending
1. AIR 2000 SUPREME COURT 801.
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another contractor on the last date of inviting
final offer on the ground that it would be in a
position to bring more traffic is not arbitrary or
illegal.
24. By placing reliance upon the decision in
case of "Cama hotels Ltd. vs. Airports Authority
of India"2, it was urged that said decision reveals
that abandonment of tender notice was not proved
to be malafide and hence mere apprehension of the
petitioner that the authorities were acting in
favour of business rival is no ground to interfere
with bonafide and genuine action taken by the
authorities in public interest.
25. Lastly, it was contended that since CVC
has laid down guidelines in public interest in
order to avoid accidents in runways at which
aircraft were going to land and take off,
abandonment of an previous tender and decision to
2. AIR 2004 GUJRAT 349.
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invite the second tender being in public interest,
the petition deserves to be dismissed.
26. Anxious considerations were given to the
submissions advanced by rival parties and the
record and so also the decisions relied by them
were carefully considered to ascertain merits
therein. As a result thereof, for reasons recorded
hereinafter, we are unable to find any merit in
the petition preferred.
27. The reference to the original tender
notice supports the submission canvassed by the
learned counsel for the respondents of it
containing condition No.6 to the effect that
decision was to be taken to accept or to reject
the tender by either of the parties within sixty
days from the date of receipt and the opening of
tender and condition No.18 to the effect that the
accepting officer does not bind himself to accept
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the lowest or any tender to give any reason for
not doing so.
28. Now considering said condition No.18 and
the act of petitioner of submitting tender, we
find it extremely difficult to accept the
submission canvassed that it was a general
condition or that any right had crystalized in
favour of the petitioner without respondent No.2
issuing a letter of acceptance of offer of
petitioner. On the contrary, within the period
stipulated by condition No.6 respondent No.2
having intimated to the petitioner vide letter
dated 27-2-2014 of the decision taken of re-
inviting tenders no right can be said to have
crystalized in favour of the petitioner. We are of
such a view as the condition No.6 referred herein
above makes it amply clear that it was open for
either of the parties to accept or reject the
tender within sixty days from the date of receipt.
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Needless to add, it is undisputed that bids
submitted by the petitioner and other five bidders
were opened on 21-1-2014. Thus, it was open for
either of the parties to accept or reject, as the
case would be, the tender within sixty days from
the said date, i.e. 21-3-2014. Having regard to
the same, and admittedly, no letter of acceptance
being issued by respondent No.2 makes it difficult
to accept that any concluded contract had arrived
at, in between the parties merely due to the fact
of the petitioner being found and listed as the
lowest bidder or that thereafter, as contended by
the petitioner, respondent No.2 having invited him
and negotiations had taken place for submission of
reduced revised rates for certain items.
29. With regard to the latter aspect, it can
be further added that even accepting that such an
event has taken place, still same having taken
place before expiry of sixty days, as stipulated
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in the tender notice and prior to respondent No.2
intimating about the letter of re-inviting the
tender within the span of sixty days, no right can
be said to have accrued in favour of the
petitioner, as canvassed.
30. In the same context, we further add that
we find it extremely difficult to accept that
merely because the petitioner was found to be the
lowest bidder and marked as L-1 or such an event
having taken place, a conclusion can be reached of
concluded contract having arrived at in between
the parties in spite of notice of tender
containing the express stipulation of right of
either parties to accept or reject the tender
within sixty days. At the cost of repetition, it
is added that respondent No.2 had not issued any
letter of acceptance and on the contrary had
issued the letter or re-inviting tenders within
the stipulated period i.e., before expiry of the
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period of sixty days from the date of opening the
bids. In the light of the said position, we find
it difficult to accept the submission canvassed
that due to being marked as L-1 tenderer and/or
being called for negotiations for such reduction
of rates, the petitioner could have expected
issuance of letter of acceptance on the part of
respondent No.2, as canvassed on behalf of the
petitioner. As a matter of fact, having due regard
to the said express stipulation, and no letter of
acceptance being issued and hence no right of
whatsoever nature being crystalized in favour of
the petitioner, makes it difficult to accept that
the said conduct on the part of respondent No.2
can be said to be amounting to promissory
estoppel, as tried to be canvassed on behalf of
the petitioner. The same is obvious because of the
above referred express stipulation in the tender
notice and the further act of respondent No.2 of
communicating the decision of re-inviting tenders.
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31. Now with regard to the further grievance
of the petitioner of the letter dated 27-2-2014,
issued by respondent No.2, not informing him of
the rejection of his bid/offer, we are afraid that
such a submission can be entertained after
considering said letter as a whole. It is obvious
as by the said letter respondent No.2 had
expressly communicated of the arrived at decision
of re-inviting tenders. It needs no saying that
said communication itself denotes rejection of the
bid of the petitioner due to the decision taken of
re-inviting the tender, i.e. abandonment of
earlier notice.
32. Similarly, having due regard to condition
No.18, recited hereinabove from the tender notice,
we also do not find any substance in the
submission canvassed that respondent No.1 failed
to assign the reason in said letter intimating
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about re-inviting tenders and thus for rejection
of tender of the petitioner. Respondent No.2 while
inviting the tenders having expressly stipulated
regarding their right of rejecting the bids and/or
for not accepting the bid of the lowest bidder,
without assigning any reason, makes it difficult
to accept that respondent No.2, in the letter
dated 27-2-2014, were bound to communicate reasons
for rejection of the bid of the petitioner.
33. In the context of the aforesaid reasoning
and about the rights of L-1 tenderer we find it
appropriate to make reference to the decision
delivered by the Division Bench of Delhi High
Court, in the case of "ERA Infra Engineering Ltd.
vs. Delhi Development Authority and Anr.3" wherein
some sort of similar issues akin to the issues in
the present case were involved.
34. The perusal of the said decisions reveals
3. 166(2010) DELHI LAW TIMES 402 (DB).
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that in said case the petitioner, also marked as
lowest L-1 for concerned project, has prayed for
quashing the letter dated 3-2-2009 and 5-2-2009
whereby Delhi Development Authority had informed
the said petitioner that his tender was rejected
and they have decided to recall the tender.
35. The perusal of the said decision further
reveals that after considering the landmark
judgment delivered by the Apex Court in the case
of "Tata Cellular vs. Union of India"4 (also relied
by the petitioner in support of his case)
regarding law pertaining to the tender and few
more decisions about the same aspect, regarding
the rights of lowest bidder and highest bidder and
about the aspect of communicating the reasons to
reject the bid and calling the fresh bids, Apex
Court has observed in paragraph No.38 as under:
"Para 38 - Applying the above principles, it is obvious that the
petitioner cannot claim any enforceable right to be awarded
the contract merely because it happens to be the lowest
4. AIR 1996 SUPREME COURT 11.
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bidder. Normally, the lowest bidder or the highest bidder, as the
case may be, ought to be awarded the contract. But this is not an
absolute rule and the governmental authority can deviate from
this and award the contract to someone other than the lowest or
highest bidder, as the case may be. But, there must be good and
valid reasons for this departure. The government body or
authority may decide not to award the contract to the lowest
bidder/ highest bidder or to anyone else and may decide to
scrap the tender and/or call for fresh tenders. However, once
again, there must be good reasons for doing so. In the present
case, the petitioner's lowest bid has been rejected and the tender
has been recalled. The DDA has acted well within its power
having done provided there exist reasons, which are clearly
discernible from the record, justifying the DDA's decision to reject
the petitioner's bid and to call for fresh bids. It is not necessary
that the reasons must be communicated to the petitioner at
the outset, but it is sufficient, if the reasons exist. It is also
clear that if the reasons are palpable and are not so
outrageous in the Wednesbury' sense, there would be no
scope for judicial interference."
(emphasis supplied)
36. The said decision further reveals that
ultimately in paragraph Nos.45, 46 and 47 it was
observed that,
"Para 45- The final aspect of the matter which remains
to be considered pertains to the contention of the petitioner
that the financial bids as per clause 3(d) of PWD-6 of the NIT
were to be opened only if the persons were found to be
technically qualified and since the financial bid of the
petitioner was opened this clearly implies that the petitioner
was technically qualified. We are unable to accept this
contention for the simple reason that the financial bids
were opened in the circumstances which were totally
different to what were contemplated under the original
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bid documents. In the meeting of the technical evaluation
committee held on 05.08.2008, all the tenders had arrived at
a general consensus that a detailed scrutiny of the technical
bids be dispensed with in order to save time. Thus, having
agreed on the dispensing with of a detailed scrutiny, the
petitioner cannot rely on the fact that because its
financial bid was opened, it was technically qualified."
Para-46 - "In any event, this argument on behalf of the
petitioner is a well recognized propositional fallacy known as
affirming the consequent' and occurs when the antecedent in
an indicative conditional is claimed to be true because the
consequent is true; if A, then B; B, therefore A. An example of
such a fallacy is:
1. If it's raining then the streets are wet.
2. The streets are wet.
3. Therefore, it's raining.
The streets maybe wet because they may have been watered by
tankers or a sewage manhole may have overflowed. There may
be many reasons for the streets to be wet, one of them being
rain. So, while the streets do get wet when it rains and the
streets, as a fact, may be wet, it does not necessarily follow
that it is raining. The argument of the learned counsel is also
in similar vein. It runs as follows:-
1. If the technical bid is compliant then the price bid is opened.
2. The price bid is opened.
3. Therefore, the technical bid is compliant.
As in the previous example, the conclusion is fallacious. The
price bid may have been opened for other reasons, as in
this case it was decided to skip the detailed technical
scrutiny and change the datum and to consider revised
price bids without going in for any fresh technical
evaluation. Consequently, the fact that the price bid of the
petitioner was opened does not necessarily mean that his
technical bid was compliant".
Para- 47 - "The result of the foregoing discussion is that the
writ petition is liable to be dismissed. It is dismissed. But, we
leave the parties to bear their respective costs."
(emphasis supplied)
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37. We also feel that it would be an
advantageous to make a reference to another recent
decision delivered by the Apex Court in the case of
"Rishi Kiran Logistics P. Ltd. vs. Board of
Trustees of Kandla Port Trust"5 for appreciating
the fallacy of further submission canvassed on
behalf of the petitioner as we find useful
observations are made therein by the Apex Court
regarding scope of a judicial review of the
decisions taken by a public body that it need not
go further ahead with tender process.
38. In the said decision the Apex Court
considering the question of competing claim in
between private interest and public interest
observed in paragraph No.18 to the effect.
Para-18 - "When competing claims are private interest v.
public interest, then in the case of disposal of public property
the question would be whether the right of the person, who
has earned the right to the public property in a public auction,
is to be preferred over the right of the public in ensuring that
5. 2014(6) SCALE 4
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valuable public assets were not disposed of except for a fair
price and in a fair and transparent manner. Whether this
court should, in judicial review, sit in judgment over the
decision of a public body which is of the view that it need
not go further ahead with the tender process. It is true if
such a decision is taken without any reasons to support it or
mere ipsi dixit it would be arbitrary. In this case there are
reasons. The High Court analysed the reasons and has
taken the view that those reasons are valid. In our view
in matters particularly to the disposal of valuable assets
by the State when the State seeks to explore the
possibility of getting higher price."
(emphasis supplied)
39.
Similarly with regard to the aspect of
malafide the Apex Court in the same decision
observed in paragraph No.22 to the effect:
Para-22 - "In so far as argument of malafides is concerned,
apart from bald averment, there are no pleadings and there is
not even a suggestion as to how the aforesaid decision was
actuated with malafides and on whose part. Even at the time
of arguments Mr. Vikas Singh did not even advert to this
aspect. In fact, the entire emphasis of Mr. Vikas Singh was that
since there was a concluded contract between the parties,
cancellation of such a contract amounted to arbitrariness. As
already pointed out above that can hardly be a ground to
test the validity of a decision in administrative law. For
the sake of argument, even if you presume that there a
concluded contract, mere termination thereof cannot be
dubbed as arbitrary. A concluded contract if terminated in a
bonafide manner, that may amount to breach of contract and
certain consequences may follow thereupon under the law of
contract. However, on the touch stone of parameters laid
down in the administrative law to adjudge a decision as
are arbitrary or not, when such a decision is found to be
bonafide and not actuated with arbitrariness, such a
Vishal 30/52
W.P.1914-2014
contention in administrative law is not admissible namely
how and why a concluded contract is terminated".
(emphasis supplied)
40. Similarly, with regard to the question of
arrival of concluded contract or otherwise, the
Apex Court observed in paragraph No.24 to the
effect.
Para- 24 - "Again, we clarify at the outset that even the
principle of PROMISSORY estoppel is in the field of
administrative law and while entertaining the arguments and
discussion on this issue, the question Has to whether there was
a concluded contract or not to be kept aside. Precisely this was
done in Kisan Sehkari Chini Mills Case (Supra) {(2008) 12
SCC 500}. The Court dealt with the issue of legitimate
expectation etc. separating it from the issue pertaining to
conclude contract and made following pertinent observation in
the process"
41. Similarly, with regard to the question of
the decision of Port Trust respondent in the said
case being arbitrary, unreasonable or malafide and
applicability of promissory estoppel the Apex Court
observed in paragraph No. 29 and 30 to the effect:
Para-29 - "It thus stands crystalised that by way of writ petition
under Article 226 of the Constitution, only public law remedy
can be invoked. As far as contractual dispute is concerned that is
outside the power of judicial review under Article 226 with the
sole exception in those cases where such a contractual dispute has
Vishal 31/52
W.P.1914-2014
a public law element".
Para-30 - "We have already held that the impugned decision of
the Port Trust was not arbitrary, unreasonable or malafide and
further that the doctrine of promissory estoppel has no
application in the present fact situation".
42. All the said observations/propositions set
out in the above referred decision are so eloquent
that the same needs no further dilation. Needless
to add that in light of the said observations, none
of the submissions canvassed on behalf of the
petitioner in support of the case of petitioner and
recited hereinabove in detail and running contrary
to the said observations will not survive and as
such the petitioner cannot be said to be entitled
for the relief claimed.
43. Now in the wake of the aforesaid decisions
and the observations made therein, reverting to the
further submissions canvassed, we are unable to
find any substance in the submissions canvassed
that there was delay on part of respondent No.2 in
Vishal 32/52
W.P.1914-2014
issuing the letter of acceptance, affording a
reason for the petitioner to rush to the Court to
file present writ petition for the reliefs as
claimed by them initially i.e. prior to the
amendment made later on. At the cost of repetition,
it can be added that the respondent No.2 were well
within their rights to take decision about
acceptance/rejection of the tender up till the
expiry of sixty days from the date of opening of
tender on 21-1-2014, i.e. up till 21-3-2014. Hence,
it makes difficult to accept that merely because
the petitioner was marked as L-1 and/or thereafter
respondents had negotiations with him, any right
can be said to have accrued to them to have the
decision of respondents about the said aspect prior
to 21-3-2014. As a matter of fact, respondent No.2
vide their letter dated 27-2-2014 having
communicated the decision of re-inviting tenders-
indicating abandonment of earlier notice, clearly
reveals the petitioner then having unnecessarily
Vishal 33/52
W.P.1914-2014
rushed to the Court. Needless to add that only in
the event of respondent No.2 having not
communicated anything to the petitioner about the
acceptance or non-acceptance of tender up till 21-
3-2014, it might have afforded some reason for the
petitioner to rush to the Court and not otherwise.
Such a conclusion is obvious in light of the
observations recited hereinabove from the
paragraph No.38 of decision in a case of ERA Infra
Engineering Limited (Supra)
44. Now considering the condition No.18 of the
tender notice and the dilation made about it
earlier, squarely revealing that respondent No.2
was not bound to give reasons for rejection/re-
inviting tenders, we do not find any substance in
the submission canvassed that the act of respondent
No.2 of not ascribing any reason in the letter
dated 27-1-2014 or in the affidavit in reply dated
12-6-2014 leads to the conclusion that there was no
Vishal 34/52
W.P.1914-2014
such reason for rejecting the tender of the
petitioner or for re-inviting the tender. For the
same reason, we do not find any substance in the
submission canvassed that the reason advanced by
respondent No.2 later on along with written
submissions dated 13-10-2014 or in the
correspondence annexed with it that such a decision
was arrived in view of the pre-qualification of the
work experience stipulated in original tender
notice being not as per CVC guidelines is got-up
reason advanced with malafide purpose for defeating
the claim of the petitioner. We also do not find
any substance in the submission canvassed that
merely because even with the affidavit in reply
dated 12-6-2014 such a CVC guidelines being not
annexed, leads to the conclusion of there existing
no such guidelines and an afterthought, fictitious
reason being later on articulated for defeating the
claim of the petitioner. Even support to such a
reasoning given by us is found in the observations
Vishal 35/52
W.P.1914-2014
made in paragraph No.38 of the decision in a case
of ERA Infra Engineering Limited (Supra).
45. We are of such a view as the reference to
the initial affidavit dated 12-6-2014, filed by the
respondents (prior to the amendment) makes it clear
of it being for the limited purpose for opposing
grant of ad-interim relief and admission and
respondent No.2 therein having specifically
reserved the right to file further affidavit. We
further add that under condition No.18 the
respondents being not required to assign the reason
for the decision taken and also the decision being
taken within the time period given under condition
No.6 makes it difficult to accept that the
conclusion as canvassed on behalf of the petitioner
can be drawn from the said act of respondent No.2
either of not disclosing the said reason in the
affidavit dated 12-6-2014. The same would be
equally applicable for the further submission
Vishal 36/52
W.P.1914-2014
canvassed that CVC guidelines were non-existent or
did not contain any such stipulation. Hence we do
not find substance in the submission canvassed that
such reasons are advanced later on by respondent
No.2 for malafide purpose for defeating the claim
of the petitioner. For similar reasons, we also do
not find any substance in the grievance made that
the CVC guidelines were not annexed with affidavit
in reply dated 12-6-2014 or now even with the
written submissions, submitted on 13-10-2014
fortifies such a stand of the petitioner or further
stand of the work experience, as claimed in the
submissions being not the stipulation as per the
CVC guidelines. In the said context at the cost of
the repetition, we add that the earlier referred
observation in paragraph No.38 in the decision of
ERA Infra Engineering Limited (Supra) are self
eloquent regarding the aspect of non-communication
of the reason for re-inviting tender or for
scraping the tender to L-1 tender. We further add
Vishal 37/52
W.P.1914-2014
that the said decision in terms reveals only the
necessity of existence of valid reason and in the
event of the reasons being palpable and not
outrageous in Wednesbury sense, then there existing
no scope for judicial interference in decision
arrived by public body due to it.
46. We also do not find substance in the
submission canvassed on behalf of the petitioner
regarding there being no stipulation in CVC
guidelines regarding the works for which the tender
notice was issued. We are of such a view as the
petitioner has not placed any concrete material in
support of his submission of either there being no
CVC guidelines or CVC guidelines do not stipulate
the work experience for runways work costing Rs.30
crores as stated in the second notice of re-
inviting tenders, issued by respondent No.2 on
15.03.2014. Needless to add that as observed by us
and having due regard to the stipulation of
Vishal 38/52
W.P.1914-2014
condition No.18 not requiring to assign the reason,
as canvassed by the petitioner, the conclusion of
nature as canvassed by the petitioner cannot be
drawn from the act of respondent No.2 not
disclosing the reason either in the affidavit in
reply dated 12-6-2014 or from not annexing CVC
guidelines even with it or even not annexing it in
entirety with the written submissions, canvassed
without petitioner placing any material before us
either about non existence of CVC guidelines or
said guidelines not stipulating the work experience
as stipulated in the second notice of inviting
tenders issued by respondent No.2. As a matter of
fact, we find that respondent No.2 with the written
submissions had annexed relevant part of the CVC
guidelines at annexure Exhibit-IV. The perusal of
the same clearly supports the submission canvassed
by the learned counsel for the respondent of the
work of runway costing more than Rs.30 crores
selection of the tenders as per pre qualification
Vishal 39/52
W.P.1914-2014
crieteria "PQC" in respect of work mentioned in NIT
should be entrusted to the contractor who has got
the experience of doing similar work (runway work
and not that of highways). Needless to add that
glance at the said document annexed by the
respondent No.2 repels the submission canvassed on
behalf of the petitioner about non-existence of CVC
guidelines and so also the same not containing the
work experience as contained in the second notice
of inviting tenders issued by respondent No.2 on
15.03.2014.
47. In the context of CVC guidelines not
containing the work experience, as stipulated in
the second notice for the work of runways, the
reference made by learned counsel for the petitioner
to notice dated 18-2-2014, issued by Airport
Authority of India, Mangalore International Airport
for construction of runway at the said airport
clearly appears to be misplaced. At the first blush
Vishal 40/52
W.P.1914-2014
it can be said that no conclusion can be drawn of
either about non-existence of CVC guidelines or the
said CVC guidelines not prescribing such work
experience because the same being not stipulated in
the said tender notice issued by the said Airport
Authority. The same is obvious as the said notice
was issued on 18-2-2014, i.e. prior to taking of
decision of re-inviting tenders in the instant
case. Hence, we find it extremely difficult to
accept the said submission on the said count.
48. In the context of existence of the
rational reason for re-inviting the tender and
question of malafide on the part of respondent No.2
for taking such a decision, reference to the
documentary evidence produced by respondent No.2
along with the written submissions clearly reveal
that after opening the tender on 21-1-2014 and
preparing the comparative statement of the tender,
it was put before the accepting officer on 6-2-
Vishal 41/52
W.P.1914-2014
2014. It further reveals that on the same day the
said officer had recorded a note to the effect that
petitioner had no previous work experience of the
work mentioned in the tender to be carried out in
respect of runways as per CVC guidelines. It
reveals that the said report along with the signed
papers were forwarded to the Engineer-in-Chief at
New Delhi for further direction and the said
directions were received vide letter
No.13600/SC/PQC/77/E8, dated 18-2-2014. It reveals
that by the said direction the Director General had
decided that tenders shall be re-issued with
revised notice inviting tenders only to those
contractors who had executed runway works earlier
and hence directed to issue fresh notice inviting
tenders in newspapers and also on MES website.
Reference to the said written submission reveals
that the noting sheet containing such a remark
along with a chart to such an effect has been
produced by the respondent No.2 in support of the
Vishal 42/52
W.P.1914-2014
said submission at Exhibit-I. Similarly, the letter
dated 18-2-2014 received to such effect is produced
at Exhibit-II. The relevant part of CVC guidelines
for the work costing more than Rs.30 crores for
runway has been produced at Exhibit-IV.
49. The perusal of all said documents in terms
support the stand of the respondent No.2 regarding
the circumstances which have led of taking a
decision of re-inviting tender and in turn repels
the contrary submission canvassed on behalf of the
petitioner to the effect of non-existence of CVC
guidelines, or CVC guidelines not requiring
experience for the work of runways costing more
than Rs.50 crores or not containing the stipulation
of work experience as contained in second notice of
tender issued on 15.03.2014.
50. In the same context the submission
canvassed that in the second notice the act of the
Vishal 43/52
W.P.1914-2014
respondents modifying the definition "work
experience" and restricting it for the experience
of construction of runways being malafide on the
count of it being only for the sole purpose of
excluding the petitioner due to himself not having
an experience of runway work or the further
submission of bias of respondents towards
petitioner canvassed, we do not find any substance
in light of the matters narrated hereinabove and
established by the respondents regarding the
circumstances which have led to the conclusion of
re-inviting the tender. We are of such an opinion
as said circumstances reveal that after opening the
bids and preparing comparative chart and the note ,
the officer had clearly pointed that the petitioner
was not having experience for runway work of such a
costs as per the CVC guidelines. It further reveals
thereafter directions were sought from the
authority at Delhi and as per the directions
received the original tender notice was abandoned
Vishal 44/52
W.P.1914-2014
and notice of re-inviting tenders specifying the
work experience in consonance with CVC guidelines
and as directed by the said authority were issued.
It also reveals that prior to issuing the notice,
the petitioner was duly intimated about the
decision taken of re-inviting the tender. Thus,
considering all the said events occurred, it is
difficult to accept that said decision was taken
for malafide purpose, or due to bias, as canvassed
on behalf of the petitioner. Needless to add that
the observations pointed earlier clearly reveals
that if the existence of valid reasons are well-
spelt in the Wednesbury's sense, then there would
be hardly any scope for reviewing the
administrative decision in the petition under
Section 226 of the Constitution of India.
51. In the same context an attempt was made by
learned counsel for the petitioner by drawing
attention to the chart of his work experience
Vishal 45/52
W.P.1914-2014
annexed with the affidavit dated 19-7-2014 and
canvassing that the same being of identical work
for which the tender notice was issued for the work
at Ratnagiri. We are afraid to entertain the said
submission as it is well-settled law that
prescribing of the conditions, including that of
work experience being within the sole domain of the
authority inviting the tender, the same cannot be
permitted to be substituted by entertaining such a
submission. Needless to add, the question would be
whether the tenderer falls/satisfies the criteria
stipulated in the tender notice or otherwise. Thus,
on the said count also we are unable to accept the
submission that the decision was taken either
malafide or arbitrarily, as tried to be canvassed.
52. We do not find any substance in the
submissions canvassed that as the bids were opened,
it implies that the petitioner was technically
qualified and as such in spite of themselves being
Vishal 46/52
W.P.1914-2014
marked as L-1 tenderer, to deprive the benefit to
which they were entitled, the exercise was
performed of amending, work experience. The
decisions cited earlier in terms reveal that merely
because of the bids are opened, the same does not
imply of the concern being technically qualified.
Apart from it, in the instant case original tender
notice being required to be abandoned due to same
being not issued as per the guidelines prescribed
by CVC for the work for which tender notice was
issued and fresh notice being issued as per the
said guidelines, the said aspect clearly appears to
be redundant in facts and circumstances of the
present case. We further add that considering such
reason which warranted of re-inviting tender,
neither the said aspect is of a significant value
in the instant case nor it justifies submission
canvassed that fresh notice being issued for
depriving the petitioner, the benefit accrued due
to themselves being marked as L-1 tenderer. As a
Vishal 47/52
W.P.1914-2014
matter of fact, the petitioner being not qualified
for the relevant work as per the CVC guidelines,
the aspect of themselves being marked as L-1 or
being pre-qualified as per the earlier notice,
clearly appears to be inconsequential.
53. Lastly, with regard to the decision relied
by the learned counsel for the petitioner in the
case of Tata Cellular (supra) and observations made
in paragraph Nos.77, 80, 81 and 93 to 95 therein,
we only add that though no quarrel can be
entertained about the proposition laid therein by
the Apex Court, particularly in paragraph No.94,
still question being whether the case of the
petitioner would be covered within them and as we
have found that there was a valid reason for taking
decision of re-inviting tenders, and the same being
taken and communicated within time, as stipulated
in Clause 6 of the tender notice and the petitioner
having failed to establish malafide or bias behind
Vishal 48/52
W.P.1914-2014
taking such a decision, the decision relied cannot
be said to be of any assistance to the petitioner.
54. Similarly, even the reliance placed by the
petitioner upon the decision of this Court in Writ
Petition No.5245 of 2011 (supra) and particularly,
the observations made therein in paragraph No.15
also clearly appears to be misplaced. We are of
such a view as the facts and circumstances involved
in said case are altogether different than the one
involved in the present case. Needless to add that
the decision relied reveal that in said case lease
already granted in favour of the petitioners was
sought to be cancelled by giving notice, and that
too, after a considerable lapse of time and in the
meanwhile, petitioners therein having taken further
steps, and also on the count of the petitioners
having violated statutory conditions and the action
of CIDCO in granting the permission being ultra
vires of the Act. Needless to add that grant of
Vishal 49/52
W.P.1914-2014
lease by CIDCO was not question in dispute in the
said case. It also involves the question whether
the conduct of the respondents therein amounted to
promissory estoppel. No such question being
involved in the present case and the tender being
abandoned within the period provided under the
notice, the observations made in the said case in
different fact situation would be also of no
assistance to the petitioner in the present case
for supporting or advancing their case.
55. Lastly, in the context of the decisions
relied by the learned counsel for the respondents
in the case of Air India Limited v. Cochin
International (supra) and of Cama Hotel Limited v.
Airport Authority of India (supra), we find that
the same fully supports the submission canvassed by
him on basis of it. However, upon same principles
about the relevant aspect ourselves having
considered the present matter, we find it
Vishal 50/52
W.P.1914-2014
unnecessary to make threadbare discussion about
principle proposition set out in the said
decisions.
56. As a net result of the aforesaid
discussion, we reiterate that as we find that no
right of whatsoever nature having crystalized in
the favour of the petitioner merely due to being
marked as L-1 tenderer, or being called for the
negotiations, no concluded contract being arrived
at in between the parties, the respondents, in the
large public interest for which the CVC had issued
guidelines having abandoned earlier tender notice
not issued in conformity with said CVC guidelines
and thus for rational reasons having taken the
decision of re-inviting tenders, and the petitioner
having failed to establish such a decision being
taken arbitrarily or with malafide, and even the
said decision being taken within the stipulated
time within which it was permissible for the
Vishal 51/52
W.P.1914-2014
respondents to accept or reject the offer given in
response to the tender notice, we do not find any
merit in the challenge to the decision taken.
57. In our view, there being no case made out
warranting our interference with the administrative
decision taken by the respondents for valid reason
in larger public interest, we dismiss the petition.
(P.D. KODE, J.) (V.M. KANADE, J.)
Vishal 52/52
