Swayambhu Transport, A ... vs Chandrapur City Municipal ...
2021 Latest Caselaw 14891 Bom

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                        NAGPUR BENCH : NAGPUR.

                               WRIT PETITION NO.2291/2021

 1.       Swayambhu Transport,
          A Proprietorship Firm, through its
          Proprietor Shri Namdeo S/o Tukaram
          Bhapkar, aged about 48 Yrs.,
          Occ. Business, R/o 7, Fair Road,
          Khadki, Pune.

 2.       Shri Namdeo S/o Tukaram Bhapkar,
          aged about 48 Yrs., Occ. Business,
          R/o 7, Fair Road, Khadki, Pune.                                       ..Petitioners.

          ..Vs..

          Chandrapur City Municipal Corporation,
          through its Commissioner, Chandrapur.                               ..Respondent.
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          Mr. M.P. Khajanchi, Advocate for the petitioners.
          Mr. M.I. Dhatrak, Advocate for the respondent.
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                           CORAM :- SUNIL B. SHUKRE AND
                                            ANIL S. KILOR, JJ.

DATED :- 12.10.2021.

ORAL JUDGMENT (Per Sunil B. Shukre, J.)

Heard. Rule. Rule made returnable forthwith. Heard finally by

consent.

2. A tender, that was floated by the Chandrapur Corporation

inviting bids for the award of work which comprised door-to-door

collection and transportation of segregated solid waste, construction

and demolition of waste and silt from drain and nallah cleaning etc.

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has run into rough weather owing to what appears to be lending of a

different perspective to understand the terms and conditions of the

tender notice, called the Request for Proposal ("RFP" for short), which

has led to passing of an order dated 25.6.2021, by the respondent

which is impugned here.

3. By the impugned order dated 25.6.2021, the respondent has

taken a decision to invite the petitioner for the second round of

negotiation and this is against the mind expressed by the petitioner

that he is not interested in any negotiations, as is evident from his

communication dated 7.12.2020. By this communication, the

petitioner has given reply to the respondent, after respondent had

invited him for first round of negotiation. It is pertinent to note here

that the petitioner has been declared to be the first ranked bidder

(H-1) and, therefore, the terms and conditions of the RFP, in particular

the conditions stated in clause 16.7 that the first ranked bidder like

the petitioner be invited first for negotiation and in case the first

ranked bidder withdraws himself or fails to comply with the

requirements specified in RFP, the second ranked bidder may be

invited for negotiation, was also required to be scrupulously followed.

The reply given by the petitioner was that since rate quoted by him in

his bid was reasonable and consistent with the market rate, the

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petitioner would take up the responsibility to carry out the contract if

awarded at the same rate quoted by the petitioner. So, unwillingness

of the petitioner to take part in any negotiation was loud and clear

already.

4. There is another relevant fact, which needs to be noted here.

The Standing Committee of the respondent in its meeting held on

11.12.2020 had approved the award of work to the petitioner and had

also granted administrative approval. However, it appears that

somebody made a complaint to the State Government and as a result

thereof, the State Government granted stay to the said decision of the

Standing Committee. This order was passed on 2 nd February, 2021.

By this order, clarification from the Corporation was also called. The

Corporation indeed sent its clarification stating that if the proposed

work was awarded to the petitioner, it would result in saving of cost of

Rs.3.62 Crores approximately and would also simultaneously lead to

improvement in service level. Thereafter, considering such clarification

of the Corporation, the State Government by the order passed on

18.5.2021 withdrew the stay order and directed its Commissioner to

take appropriate decision in the matter by taking into consideration

the interest of the Corporation, quality of the service to be rendered by

the Contractor and issue of maintenance of transparency in the matter

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of processing of the tender.

5. The impugned order has been passed by the respondent in

pursuance of the directions issued by the State Government on

18.5.2021.

6. According to Shri Dhatrak, learned counsel for the respondent,

the order is legal and correct as it follows the mandate of

government's order dated 18.5.2021 and that it protects the interest of

the Corporation in the sense that an attempt is being made by the

respondent to consider the possibility of saving further cost and

expenses of the Corporation. However, learned counsel for the

petitioner has a different opinion. He states that firstly, it is not

permissible under the RFP to call a bidder for second round of

negotiation and secondly, the Corporation has already made clear its

stand that if the contract is awarded to the petitioner, it would lead to

saving of cost of Rs.3.62 Crores approximately and also result in

improvement in service level. He submits that the impugned order

ignores these relevant facts and considers something which is not part

of the RFP. Therefore, he terms the impugned order as arbitrary,

perverse and illegal.

7. No doubt, in the interest of Corporation, a duty conscious

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Commissioner may decide to make further efforts for exploring the

possibility of reduction of the rate quoted by first ranked bidder (H-1)

and, therefore, in his zeal to perform his duty scrupulously, he may

choose to decide to invite H-1 bidder for second round of negotiation

and it appears that this is what has been done by the

respondent - Commissioner when he passed the impugned order. But,

it is also required to be seen, whether in his desire to act in the

interest of the Corporation, the Commissioner has acted arbitrarily, in

violation of express conditions of RFP and thus failed to maintain

transparency or not. This would necessarily give rise to a question as

to whether or not there is any provision made in the RFP which

permits the Commissioner to invite H-1 bidder for second round of

negotiation and on going through the RFP the answer that comes forth

is in the negative.

8. Clause 16.7 of the RFP is relevant in this regard. It is extracted

thus:-

"16.7 .............The first ranked bidder having the combined technical (ST) and financial (SF) scores shall be selected for negotiation (the "Selected Applicant") while the second ranked Applicant will be kept in reserve.

The selected bidder shall be the first Ranked Applicant (H-1, having the highest combined score). The second ranked bidder (H-2) shall be kept in reserve and may (sic: many) be invited for negotiation in case the first ranked bidder withdraws, or fails to comply the

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requirements specified in this RFP document."

9. It would be clear from the above referred clause that

Corporation can invite the selected bidder, which is the first ranked

bidder, for negotiation only once and not twice or any more time than

one. It would also be clear that there is a limitation for the

Corporation to invite the second ranked bidder. It can do so and the

Corporation would be within its power to invite the second ranked

bidder only if the first ranked bidder withdraws itself from the tender

process or fails to comply with the requirements stated in the RFP, and

if none of these happens, second ranked bidder cannot be invited for

negotiation. It would mean that if the first ranked bidder is not

willing to take part in the negotiation at all, first or subsequent, and

also does not withdraw himself from the tender process, and is not

seen as non-compliant with RFP requirements, it is end of the matter.

The bid submitted by the first ranked bidder then would have to be

processed further as per the RFP and there would be no way for the

Corporation to make another attempt at inviting the first ranked

bidder for the second round of negotiation. In other words, in the

present case, the respondent was required to take his decision from

the stage which arrived after negotiation round as per the terms and

conditions of the RFP and this is what is also impliedly suggested by

the State Government in its order dated 18.5.2021 when it directed

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the Commissioner of Chandrapur Municipal Corporation to decide the

issue by considering the interest of the Corporation, the issue of

quality service and also the issue regarding transparency in processing

the tender.

10. Here, it would be necessary for us to comprehend the import of

state government's order dated 18.5.2021. A decision would be in the

interest of Corporation and also for improvement in quality of service,

when it results in saving of cost and encourages the Contractor to

render quality service, while maintaining the transparency all the

while. As regards saving of costs and improvement in service level,

the Standing Committee had already spoken in favour of the

petitioner in it's resolution taken in it's meeting held on 11.12.2020.

Transparency part required the employer or the Corporation to

scrupulously follow the procedure prescribed in the RFP, without

which no transparency in this tender matter could have been

maintained and no interest of the Corporation could have been

secured nor any quality service could have been ensured. We must say

it here that a transparent decision making process is sacred to any

tender matter or otherwise the decision would be arbitrary and even

sacrilegious. (See Ram and Shyam Company V/s. State of Haryana

and others (1985) 3 SCC 267 and, The Silppi Constructions

Contractors V/s. Union of India and Anr. 2019 (11) SCALE 592). The

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law requires that when certain rules are prescribed in the tender

notice or RFP, parties must adhere to the rules and if they do not, it

would be a good ground for the writ court to make interference in the

matter. (See Ramana Dayaram Shetty V/s. The International Airport

Authority of India and others, AIR 1979 SC 1628 and Tata Cellular

V/s. Union of India (1994) 6 SCC 651).

11. We find that while taking the impugned decision, the

respondent has not complied with the procedure prescribed in the RFP

regarding the steps to be taken after the first ranked bidder did not

respond to second round of negotiation as per clause 16.7 and other

relevant clauses, about which we have already elaborated upon and

thus failed to maintain the transparency in taking the impugned

decision and, therefore, the impugned decision is arbitrary and cannot

be sustained in the eye of law.

12. The petition is, therefore, partly allowed. The impugned order

is hereby quashed and set aside. The respondent is directed to proceed

in the present tender matter, in accordance with the terms and

conditions of the RFP. Rest of the prayers are rejected. Rule

accordingly. No costs.

                               JUDGE                                  JUDGE
 Tambaskar.