Yash Construction Company ... vs The Secretary Ministry Of Road ...
2022 Latest Caselaw 13119 Bom

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                            BENCH AT AURANGABAD

                            WRIT PETITION NO. 9620 OF 2022

Yash Construction Company
A partnership firm "Padmini
Niwas", H.No.9/529, Opp. Municipal
Council, Prashant Nagar, Ambajogai,
Tq. Ambajogai, Dist. Beed - 413 512
through its partner

Pradeep s/o Madhukarrao Thombre
Age : 42 years, Occ : Business,
R/o : "Padmini Niwas", H.No.9/529,
Opp. Municipal Council, Prashant
Nagar, Ambajogai, Tq. Ambajogai,
Dist. Beed - 413 512                                  ...     PETITIONER

             VERSUS

1.       The Secretary
         Ministry of Road Transport and
         Highways (MoRT & H), Room
         No.509, Ministry of Road Transport
         and Highways Transport Bhavan, 1,
         Parliament Street, New Delhi - 110 001.

2.       The Chief Engineer and Regional
         Office, (Maharashtra and Goa) Room
         No.508 & 509, Konkan Bhavan, 5th
         Floor, Sector-6, C.B.D., Belapur,
         Navi Mumbai - 400 614.

3.       The Chief Engineer,
         Public Works Department,
         National Highways, Government
         of Maharashtra Room No.526,
         5th Floor, Kokan Bhavan, Sector-10,
         CBD, Belapur, Navi Mumbai - 400 614

4.       The Superintendent Engineer,
         National Highway (P.W.) Circle,
         "Bandhakam Bhawan, Sneh Nagar,
         Adalat Road, Aurangabad - 431 005.


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5.       The Executive Engineer,
         National Highways Division,
         Barure Complex, Opp. S.T. Workshop,
         Ambajogai Road, Latur - 413 512.                       ... RESPONDENTS

                                      ...
Mr. R.N. Dhorde, Senior advocate i/b.
Mr. V.R. Dhorde, advocate for petitioner
Mr. A.G. Talhar, DSGI for respondents No.1
Mr. D.R. Kale - Government Pleader for the respondent Nos. 2 to 5
                                      ...

                            WRIT PETITION NO.11026 OF 2022

1.       M/s. Saket - RPS JV
         A joint venture between one Saket
         Infraprojects Private Limited and RPS
         Infraprojects Private Limited having its
         office at L-3, 308, the Summit Business
         Bay, near Service Road, Off Western Express
         Highway, Vile Parle (E), Mumbai - 400 057

2.       Saket Infraprojects Private Limited
         [CIN: U45201MH2006PTC163441]
         A private limited company, governed
         by the provisions of the Companies Act, 2013
         having its registered address at L-3, 308,
         the Summit Business Bay, near Service Road,
         Off Western Express Highway, Vile Parle (E),
         Mumbai - 400 057.

3.       RPS Infra Project Private Limited
         [CIN: U45201MH2006PTC163522]
         A private limited company, governed
         by the provisions of the Companies Act, 2013
         having its registered address at C-113, 1st Floor,
         Shyam Kamal, Agarwal Market, Vile Parle (E),
         Mumbai - 400 057.

4.       Vishal Wadhawan
         Age : 42 years, adult, Indian Inhabitant,
         Director and Shareholder/Member of
         the petitioner No.2 Company, having his office
         address at L-3, 308, the Summit Business Bay,
         near Service Road, Off Western Express Highway,
         Vile Parle (E), Mumbai - 400 057.               ... PETITIONERS

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           VERSUS
1.     Union of India,
       through the Ministry of Road
       Transport and Highways Transport
       Bhawan, 1, Parliament Street,
       New Delhi - 110001.
       also at : Regional Office, Maharashtra
       and Goa, Room No.508 and 509, Konkan
       Bhavan, 5th Floor, Sector-6, C.B.D., Belapur,
       Navi Mumbai - 400 614.
2.     State of Maharashtra
       through the Chief Engineer (NH),
       Public Works Department, Room No.526,
       5th Floor, Konkan Bhavan, Sector-10,
       CBD Belapur, Navi Mumbai - 400 614.
3.     The Superintending Engineer,
       National Highway (P.W.) Circle,
       "Bandhakam Bhawan, Sneh Nagar,
       Adalat Road, Aurangabad - 431005.
4.     The Executive Engineer,
       National Highways Division,
        Latur Barure Complex, Opp.
       S.T. Workshop, Ambajogai Road,
       Latur, Maharashtra - 413512.                   ... RESPONDENTS
                                       ...
Mr. R.N. Dhorde, Senior advocate i/b.
Mr. V.R. Dhorde, advocate for petitioner
Mr. A.G. Talhar, DSGI for respondents No.1
Mr. D.R. Kale - Government Pleader for the respondent Nos. 2 to 4
                                       ...

                                  CORAM           : MANGESH S. PATIL &
                                                    Y.G. KHOBRAGADE, JJ.
                                  Reserved on     : 07.12.2022
                                  Pronounced on   : 16.12.2022

JUDGMENT (MANGESH S. PATIL, J.) :

In these two separate writ petitions, the respective petitioners

are challenging the action of the respondents impliedly not accepting their

respective bids for rehabilitation and upgradation of two different stretches

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of the same NH361F by deciding to and going ahead with the fresh tender

processes. Though the petitioners are different the respondents are the

same, the facts also being exactly the same and even the learned advocates

representing the parties being same we are disposing of these two writ

petitions by this common judgment in order to avoid rigmarole.

2. Heard. Rule in both the writ petitions. Rule is made returnable

forthwith. The learned DSGI waives service for respondent No.1 in both the

writ petitions and the learned Government Pleader waives service for

respondents Nos.2 to 5 in writ petition No.9620/2022 and for respondents

Nos.2 to 4 in writ petition No.11026/2022. At the request of the parties the

matters are being disposed of finally at the stage of admission.

3. The sum and substance of the relevant facts leading to the filing of

these writ petitions can be summarized as under :-

a) Rehabilitation and upgradation of NH361F, a project of the

Ministry of Road, Transport and Highways of the Central

Government (R1) and (R2), is being executed by the Public

Works Department of the State headed by the Chief Engineer

(R3), Superintendent Engineer (R4) and Executive Engineer

(R5). The Chief Engineer (R3) published the tenders on the

instructions of respondent Nos.1 and 2 for two stretchs of

widening and upgradation of 16.2 and 18.5 Kms into two lanes

with paved shoulder carriageway and also 5.5. Kms and 6 Kms

stretches of four lane carriageway.

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b) The work was to be completed within 24 months. Pre-bid

meetings were held on 14.01.2022. Apart from the petitioners

several entities submitted their bids. The estimated cost of the

stretch of road for which the petitioner in Writ Petition

No.9620/2022 had applied was 229 crores whereas in the other

matter it was 212.7 crores. The respective petitioners' bids were

29.99% and 24.83% less than the estimated cost. After financial

bids, technical bides were opened the petitioners were declared

as L1. They furnished requisite bank guarantees. The

respondent Nos.3 and 4 recommended the petitioners' offers to

the respondent Nos.1 and 2 in August 2022.

c) The respondent No.5 in Writ Petition No.9620/2022 called upon

the petitioners therein to furnish justification for completing the

work at less than 29.99% of the estimated cost. The petitioner

furnished the details of his ability to perform the work at that

cost. The explanation was accepted, the report was submitted to

the Superintendent Engineer (R4) who also accorded approval

and it was forwarded to the Chief Engineer (R3) who also

approved it and submitted it to the respondent No.2.

d) By two separate communications dated 29.08.2022 in Writ

Petition No.9620/2022 and dated 30.08.2022 in Writ Petition

No.11026/2022 respondent No.2 informed the respondent No.3

that the stipulation in the tender advertisement regarding

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completion of work in 24 months was incorrect and it ought to

have been 18 months and directed to invite fresh bids for the

same works.

e) Both the petitioners conveyed their readiness and willingness to

complete the work even within 18 months with the same cost.

However, in September 2022 the process was cancelled and

fresh tender notices were published on 07.09.2022 for the same

work.

4. The learned senior advocate Mr. Dhorde for the petitioners at the

outset submitted that in spite of the petitioners having found to be the

lowest bidders, the respondents have aborted the process for an

unsustainable reason. In fact no specific order was communicated to the

petitioners quoting the reasons for cancellation. The respondents being

public authorities it was imperative for them to have communicated the

precise reason for not going ahead with the process to conclude the

contracts. He would refer to the decisions in the following matters :

i. Poddar Steel Corporation Vs. Ganesh Engineering Works and Ors.;

(1991) 3 SCC 273

ii. Jailaxmi Constructions Vs. State of Maharashtra;

2012 SCC OnLine Bom 1127

iii. Rashmi Metaliks Limited Vs. Kolkata Metropolitan Development Authority and Ors.; (2013) 10 SCC 95

iv. Royal Power Turnkey Implements Pvt. Ltd. Vs. Maharashtra Industrial Development Corporation; 2014 SCC OnLine Bom 2884

v. Pankaj Kesara Vs. Andaman and Nicobar Administration ;

2014 SCC OnLine Cal 22708

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vi. Shree Ganesh Construction Vs. State of Orissa;

2016 SCC OnLine Ori 288

vii. Gangadhar Jena Vs. State of Odisha;

2017 SCC OnLine Ori 611

viii. United Contractors Association Vs. State of Orissa ;

2018 SCC OnLine Ori 44

ix. Maharashtra Chess Association Vs. Union of India and Ors.;

(2020) 13 SCC 285

x. Insituform Pipeline Rehabilitation Private Limited V/s New Delhi Municipal Council ; 2021 SCC OnLine Del 3210

xi. BOC India Limited and Ors. Vs. Kolkata Metropolitan Development Authority and Ors.; (WP No.5292/2010 dated 07.05.2010 Calcutta High Court)

5. Mr. Dhorde would submit that contrary to the well settled principles

laid down in the matter of Mohinder Singh Gill and Anr. Vs. The Chief

Election Commissioner New Delhi and Ors.; (1978) 1 SCC 405 the reasons

are now being quoted by the respondents in their affidavit-in-reply which is

impermissible. He would then submit that even according to the guidelines

applicable to the Central P.W.D. projects and the general terms of bidding,

there is no precise clarity as to the period of completion of the work

particularly when the projects involve rehabilitation and upgradation of

mixed stretch of roads where some portion is two lane road where the work

is to be completed within 18 months and a four lane road for which the

period is 24 months. Admittedly, in both the matters, the projects involved

mixed work (16.2 Kms of two lane + 5.5 Kms of four lane in Writ Petition

No.9620/2022 and 18.5 Kms of two lane and 6 Kms of four lane in Writ

Petition No.11026/2022). Mr. Dhorde would, therefore submit that in view

973.wp.9620.22.odt

of such peculiar state of facts, the ground being furnished for cancelling the

tender process on this sole count is too technical.

6. Mr. Dhorde would submit that even both the petitioners even

before cancellation, had communicated their readiness to complete the

project even within 18 months without any escalation in the cost. He would

submit that though it is trite that no post bid negotiations are permissible,

since these are the projects for constructions of roads and when petitioners

are admittedly the lowest bidders, that analogy would not be applicable,

even if they have after initial offer expressed their willingness to complete

the project within 18 months. In the peculiar facts and circumstances when

the work was a mixed work where admittedly a portion of the work even

according to the respondents could be completed within 24 months, this

difference of interpretation would make the condition not a material

condition or essential terms. In support of his submission he would refer to

the judgment in the matter of Rashmi Metaliks Ltd.(supra). Mr. Dhorde

would also refer to the CVC circular which enables negotiations in

exceptional circumstances with L1 lowest tenderer in the work/supply

orders where the Government has to make the payment. He would also

emphasize on the fact that the bid capacity of the petitioners to complete the

work even within 18 months is much more.

7. As an appendage to these submissions Mr. Dhorde would also

emphasize the fact that when the petitioners bids would cut even the

estimated cost by around 25% to 30%, it would be in the public interest

973.wp.9620.22.odt

inasmuch as the Government would spend much less than the estimated

cost. As against this, he would submit, when this process had begun almost

10 to 11 months back, any fresh invitation to offer in all probability would

escalate the cost of construction, increasing the burden on the public

exchequer. Besides the petitioners would lose edge inasmuch as the process

has been aborted at the fag end making everybody aware about their offer

to complete the projects at such a lesser cost which would cause a serious

prejudice to the petitioners. He would, therefore, submit that the

respondents have not acted in fair manner and have decided to go ahead

with the fresh tender process undermining the public interest that too on an

untenable ground.

8. Learned DSGI Mr. Talhar would at the outset begun with the

argument that there is no concluded contract. It was merely an invitation to

offer and it would be the prerogative of the respondents to accept or refuse

the offer. The petitioners would have a right only in the case there was a

concluded contract. That being not the state of affairs. The respondents are

not under any contractual obligation. Mr. Talhar would then raise the issue

regarding clause 6.1 of the tender document restricting the jurisdiction to

decide any dispute to the Delhi High Court. He would submit that the

petitions in this Court are not maintainable in view of such a stipulation. He

would submit that it is the prerogative of the respondents expressly

stipulated in clause 2.16.1 to annul the bidding process. He would further

submit that contrary to the guidelines issued by the Ministry the period for

973.wp.9620.22.odt

construction of the project was stipulated as 24 months instead of 18

months. Realizing the mistake a fresh tender has been floated. A change

post negotiation altering the condition to complete the project would

constitute a material alteration. There is no discrimination. It was always

open for the petitioners to participate even in the fresh tender process. No

mala fides have been attributed. The decision is based on technical reasons.

The stipulation as to the period is strictly based on the technical note of the

Ministry and this Court cannot embark upon and decide the correctness or

reasonableness of the stipulation. Since it is a matter touching completion

of a public work involving some special knowledge, this Court cannot sit in

appeal to scrutinize the decision of the technical expert committee. He

would rely upon the following decisions to buttress his arguments :

i. Rajasthan Co-Operative Dairy Federation Vs. Maha Laxmi Mingrate Marketing Service Private Limited ; 1966 DGLS (SC) 1429

ii. Laxmikant and Ors. Vs. Satyawan and Ors.; (1996) 4 SCC 208

iii. South Delhi Municipal Corporation Vs. Ravinder Kumar and Anr.;

2015 DGLS (SC) 961

iv. State of Jharkhand and Ors. Vs. CWE Soma Consortium ;

2016 DGLS (SC) 706

v. Bharat Coking Coal Limited and Ors. Vs. AMR Dev Prabha and Ors.;

2020 DGLS (SC) 318

vi. Agmatel India Private Limited Vs. Resoursys Telecom and Ors.;

(2022) 5 Supreme 362

vii. N.G. Projects Limited Vs. Vinod Kumar Jain and Ors.;

2022 DGLS (SC) 324.

viii. Omassery Labour Contract Co-operative Society Omassery P.O. Vs. Mukkam Municipality Mukkam ; (WP (C) No.3228/2022)

973.wp.9620.22.odt

9. The learned Government Pleader would submit that the respondents

Nos.3 to 5 are merely implementing the project of the respondents Nos.1

and 2. The ultimate decision to accept the offers or to go for a fresh tender

fully rests with them. The scope for judicial review in such matter is very

limited. The circumstances do not warrant any interference in the on going

process.

10. The rival submissions now fall for our consideration.

11. At the cost of repetition we begin with the observation that so

far as the facts are concerned there is not much of a dispute. In the

invitation to offer the period for completion of work was stipulated as 24

months pursuant to which the offers were received. The petitioners were

the lowest bidders and had quoted almost 30% and 25% less than the

estimated cost, respectively. No dispute has been raised either in their

capacity to complete the work at this less cost and the sole reason being

relied upon by the respondents for going for a fresh tender is the stipulation

as to the period of completion of work. For that matter even there is no

dispute that the respondents are implementing a project where as per the

technical note of the Ministry dated 05.03.2019 there is stipulation as to the

period for completion of work for construction of highways depending upon

the width and the length of the road. Admittedly, it was a project of the

Central P.W.D. and the work was to be completed in accordance with the

permission granted by the respondent No.2 with the approval of the

competent authority. The State PWD was supposed to implement the project

973.wp.9620.22.odt

strictly in accordance with the communication vide letter No.1275 dated

31.01.2022 and the bids were supposed to be invited based on standard RFP

and EPC documents of the Ministry dated 05.03.2019.

12. Normally this Court cannot interfere with the view taken by the

tender inviting authority or indulge in the process of interpretation of the

terms which essentially has to be left for the author of the tender document

as has been laid down in the matter of Agmatel India Pvt. Ltd. (supra)

wherein with respect the principles have been succinctly laid down while

considering the scope of judicial review in tender matters.

13. This Court has its inherent limitations in going into the

technical aspect and it would not be proper to scientifically scrutinize

justification for the period for implementation of the work, whether it

should be 18 months or 24 months. However, going by the guidelines, for a

road up to the length of 50 Kms stretch for laying two lanes with paved

shoulder carriageway the period stipulated for completion of work is 18

months whereas for the roads comprising of four lanes the period is 24

months. However in the peculiar matters in hand, admittedly, each work

comprises of two different stretches a part of the portion may be major of

around 60% to 65% is a two lane road and the rest is a four lane road. It is

perhaps because of this peculiar state of affairs, even there seems to be a

difference of opinion in the respondent Nos.1 and 2 on the one hand and the

respondent Nos.3 to 5 on the other.

14. It can be seen from the papers that the respondent Nos.1 to 3

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had scrutinized the aspect and even attempted to justify their interpretation

and the stand of stipulating 24 months in the bid document as the period for

completion of work. For that matter, irrespective of the stand being taken in

the affidavits-in-reply filed on behalf of respondents, even during pendency

of the petitions Mr. Dhorde tendered across the bar a communication inter

se between the respondents demonstrating that even now some of the

respondents are of the view that the projects can be completed within 24

months even by following the guidelines of the Ministry. It is not that such

an attempt has been made belatedly. Even before filing of the petitions

there has been a communication inter se between the respondents, wherein,

some of them tried to justify the period for completion of project as 24

months. It is in view of such a peculiar state of affairs, we have been called

upon to consider the petitions questioning the decision of the respondents to

go for a fresh tender.

15. As has been observed earlier we have inherent limitations in

entering into this debate. The fact remains that as per the guidelines of the

Ministry there is a stipulation as to the period of completion of work but

conspicuously, we are concerned that the guidelines do not contemplate a

situation where it is a mixed work, where a portion of the road is to be

constructed within 24 months whereas the remainder of it is expected to be

completed in 18 months. Be that as it may, there is every room to believe

that it is a subjective satisfaction of the authorities to go ahead and decide

the issue more so involving construction of a public project and it can be

973.wp.9620.22.odt

said that the reason for abortion of the project is too technical for this Court

to step in and scrutinize the action of the respondents.

16. Admittedly, the petitioners were never expressly communicated

with the reasons cancelling the tender process. It appears that they only

learnt about the aforementioned being the ground for the respondents to go

for a fresh bidding process. However, irrespective of this aspect, admittedly,

both the petitioners had expressly stated and informed the respondents their

willingness to go ahead and complete the project as per their interpretation

within 18 months without escalation of the cost. This certainly cannot be

said to be a post tender negotiation inasmuch as, the government was to

spend for the project and was not to earn something. The petitioners are

the lowest bidders who though had initially offered to complete the work

within the period of 24 months stipulated in the tender document but in

view of the supervening events have expressed their willingness to complete

the same work within 18 months, and more importantly the respondents

have not formed any opinion by resorting to any inquiry regarding

petitioners inability to complete the work within 18 months. The decision of

the respondents to refuse to concede to the petitioners' fresh offer to

complete the work even in 18 months is clearly an arbitrary decision which

potentially would have the tendency to burden the public exchequer.

Already 8 to 10 months have lapsed. Factoring the inflation, in all

probability, going for a fresh tender merely because of this technical defect

which can be easily cured by accepting the petitioners' fresh offer to

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complete the project even in 18 months at the same cost offered by them is

nothing but an arbitrary and capricious decision and would lead to a loss to

the public exchequer. Besides, as mentioned herein above, as it is the offer

of the petitioners is less than the estimated costs by 30% to 25% which

would save another 70 to 80 crores for each project.

17. The submission of the learned DSGI and the decision cited by

him regarding the rule being to desist from any post-bid negotiation would

not came into play when the Government is to pay the money for the work

to be performed when the negotiation is with the lowest bidder. Such

negotiations are not justifiable when the Government is to receive the

money. It is in this sense that the decisions quoted herein above by the

learned DSGI will have to be appreciated. The negotiation in the facts and

circumstances is only for performing the work in a lesser period and not for

increasing the period of performance which would have been impermissible.

18. In the peculiar facts and circumstances of the matters in hand

we are merely pointing out that even the respondents inter se have a

different opinion as to what should have been the period for completion of

the work. We have pointed out that the guidelines do not take into

consideration a peculiar circumstance where a part of the project is to be

completed in 18 months and the remainder to be completed in 24 months.

The situation is certainly susceptible to a difference of opinion amongst the

authorities themselves. Since it is a matter of rehabilitation and

improvement of roads, when the petitioners have also now expressed their

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willingness even before filing of the petitions to complete the work within

18 months, in our considered view we are not embarking into any decision

touching the technical aspect. So the fetters on the powers of this Court in

view of catena of judgments in the matter of Tata Cellular Vs. Union of

India; (1994) 6 SCC 651, Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail

Corporation Ltd.; (2016) 16 SCC 818 and M/s. N.G. Projects Limited Vs

M/s. Vinod Kumar Jain & Ors.; (Civil Appeal No.1846 of 2022 arising out of

SLP (c) No.2103/2022 dated 21.03.2022) would not be applicable to the

peculiar facts and circumstances of the matters in hand.

19. True it is that the petitioners have not been able to expressly

attribute any mala fides for the respondents in aborting the process.

However, in our considered view the facts and circumstances discussed

herein above are peculiar enough and we have demonstrated that the

petitioners being ready to complete the work even in 18 months, avoiding a

possible loss to the public exchequer could be the decisive circumstances

even in the absence of any specific allegations regarding mala fides of the

respondents.

20. It is not a matter of any deviation from the explicit terms of the

invitation to offer to work within period of 18 months as against 24 months.

The decision in the matter of Bharat Coking Coal Limited (supra) a minor

deviation from explicit terms of the notice inviting tender was held to be not

sufficient in itself in the absence of mala fides to set aside the tender at the

behest of unsuccessful bidders. We do not intend to and are not sitting in

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appeal to judge the propriety of the decision of the respondents to go for a

fresh bid but at the same time we cannot turn a blind eye when the facts

and circumstances discussed herein above are so peculiar and the decision of

the respondents has the potential of burdening the public exchequer.

21. The submission of the learned DSGI that there is no concluded

contract and the petitioners' offer having not been accepted there being no

privity of contract is a submission too naive to accept. When these are the

matters involving public authorities, any decision of theirs can be examined

to ascertain if the decision being taken is arbitrary or otherwise more so

when it has the tendency of burdening the public exchequer. We therefore

discard the submission of Mr. Talhar that in the absence of any concluded

contract the petitioners cannot be heard.

22. As far as the submission of Mr. Talhar regarding stipulation in

the notice inviting tender and the other annexures restricting the jurisdiction

to the Delhi High Court is equally untenable in law. This being a High Court

exercising powers under Article 226 of the Constitution of India, the parties

could not have by agreement excluded its jurisdiction and power as has

been laid down in the matter of Maharashtra Chess Association (supra).

23. To sum up, the decision of the respondents to abort the process

of tender wherein the petitioners were the successful L1 bidders on the sole

ground that the notice inviting tender stipulated 24 months as the period for

completion of the work instead of 18 months and even when the petitioners

expressed their readiness and willingness to complete the work at the same

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cost offered by them which does not suffer from the sin of post tender

negotiations, the decision of the respondents is clearly arbitrary and would

lead to a loss of public money. The cases are fit to be interfered with.

24. Both the petitions are allowed. The fresh tenders issued by the

respondents are quashed and set aside. The respondents are directed to

resume and complete the tender process wherein the petitioners are

participating but with a rider that the petitioners shall be bound to complete

the works within 18 months irrespective of the stipulation in the notice

inviting the offers.

25. Rule is made absolute in both the petitions in above terms.

  (Y.G. KHOBRAGADE, J.)                                   (MANGESH S. PATIL, J.)




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