Bombay High Court
M/S. Vijay Construction, Thr. Partner, ... vs State Of Maharashtra, Thr. Collector, ... on 22 December, 2023
Author: A.S. Chandurkar
Bench: A.S. Chandurkar
2023:BHC-NAG:17611-DB
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
CIVIL WRIT PETITION NO.4042 OF 2023
Vijay Construction, ]
Through it's Partner - Mr. Hardik Patel ]
Aged about 36 years, Occ.: Business, ]
"Jay Khodiyar", 26 New Sneha Nagar, ]
Wardha Road, Nagpur - 440015. ] ... Petitioner
Versus
1. State of Maharashtra, ]
Through the Collector, ]
Civil Lines, Nagpur. ]
2. Nagpur Metropolitan Region Department Authority ]
Through Metropolitan Commissioner, ]
NMRDA, Nagpur. ]
3. Superintending Engineer, ]
Metropolitan Region Development Authority, ]
Nagpur. ]
4. The Executive Engineer (Technical Section), ]
Metropolitan Region Development Authority, ]
Nagpur. ]
1 WP-4042-2023-Judgment.doc
5. D.V. Patel and Company, ]
Through it's Partner - Mr. Bhavesh D. Patel, ]
Aged about ___ years, Occ.: Business, ]
Office address at : 2nd Floor, 65A, Flat No.5, ]
Mahalaxmi Apartment, WHC Road, ]
Shankar Nagar, Nagpur ]
6. Indu Constructions, ]
Through it's Proprietor - Mr. Nitin N. Gabhane ]
Aged about ___ years, Occ.: Business ]
Office address at Opposite Telephone Office, ]
Camp, Amravati - 444602. ]
7. Shubham EPC Pvt. Ltd., ]
Amit Crystal, 401/402, Above Bank of Baroda, ]
Opposite to Chatushringi Temple, ]
Senapati Bapat Road, Pune - 411016. ] ... Respondents
Mr. Hrishikesh S. Chitaley for the Petitioner.
Mr. H.D. Marathe, AGP for Respondent No.1.
Mr. Girish Kunte for Respondent Nos.2 to 4.
Mr. N.C. Phadnis for Respondent No.5.
CORAM : A.S. CHANDURKAR & ABHAY J. MANTRI, JJ.
Date on which arguments were heard : 8 th November, 2023
Date on which judgment is pronounced : 22nd December, 2023
2 WP-4042-2023-Judgment.doc
[ PRONOUNCEMENT THROUGH VIDEO CONFERENCE ]
JUDGMENT :
{ Per A.S. Chandurkar, J. }
1. RULE. Rule made returnable forthwith and heard, by consent, learned
counsel for the parties.
2. The challenge raised in this Writ Petition is to the Technical Summary
Report dated 30th May 2023, as a result of which Technical Bids of the 5 th and
6th respondents have been held to be qualified, enabling them to participate in
the Financial Bids. By amending Writ Petition, the challenge is also raised to
the Work Order dated 14th August 2023 issued by the 2 nd respondent in favour
of the 5th respondent.
3. The Nagpur Metropolitan Region Development Authority - NMRDA, the
2nd respondent, issued a Tender Notice for the construction and upgradation of
the Radiotherapy Department of the Government Medical College and
Hospital, Nagpur. In response to the said Tender Notice, five bids were received
by the Tendering Authority. As per the Tender Summary Report, the Technical
Bids were updated on 30th May 2023 at 02:43 pm. The Technical Bid of one
bidder came to be rejected while the Technical Bids of the petitioner along
with the 5th to 7th respondents came to be admitted so as to enable them to
participate in the Financial Bids. The Financial Bids were opened at 02:45 pm
on 30th May 2023 itself. On the same day, the petitioner made a complaint to
the Metropolitan Commissioner - NMRDA, stating therein that in accordance
3 WP-4042-2023-Judgment.doc
with Clause 23.9 of the Tender Notice, it was necessary to grant time of two
working days after the result of the Technical Bids was made public to enable
the bidders to submit a complaint, if warranted. According to the petitioner,
Clause 23.9 was not complied with and the Financial Bids were opened on the
same day. NMRDA thereafter, on due evaluation of the Financial Bids,
proceeded to accept the Financial Bid of the 5 th respondent and on 14th August
2023, a Work Order was issued to it. Being aggrieved by the aforesaid, this
Writ Petition has been filed.
4. Mr. Hrishikesh S. Chitaley, learned counsel for the petitioner submitted
that the manner in which the Work Order was issued to the 5 th respondent
was not in accordance with the terms mentioned in the Tender Notice.
Referring to Clause 23.9 of the Tender Notice, it was submitted that the result
of evaluation of the Technical Bids was required to be made public on the
eProcurement system, after which a period of two working days was available
for a bidder to submit a complaint for resolution before opening of the
Financial Bids. As per the Tender Evaluation Report, the Technical Bids and the
Financial Bids were opened on the same day within a span of few hours. Period
of two working days was not made available for raising objection to the
eligibility of other bidders. The petitioner desired to raise an objection to the
technical eligibility of the 5th and 6th respondents but was precluded from
doing so. It was the specific case of the petitioner that as the said respondents
were not technically qualified, they were not eligible to participate in the
4 WP-4042-2023-Judgment.doc
subsequent bidding process. It was further submitted that from the documents
on record, it was clear that the said bidders were not technically qualified. The
requisite documents that were required to be submitted were not available
with them. In the absence of such required documents, relaxation was granted
to the said bidders and they were held eligible for further participation. In the
Tender Notice, there was no reference made to Government Resolution dated
27th September 2018 and that it would be relied upon while considering the
bids. Without giving any indication in that regard, the 2 nd respondent sought
to rely upon the aforesaid Government Resolution for holding the 5 th and 6th
respondents eligible for participation. This would indicate that the tender
process, as a whole, was conducted in an arbitrary manner. On the financial
rates quoted by the 5th respondent, it was submitted that given an opportunity,
the petitioner would have matched the rates quoted by the said respondent.
There was no opportunity granted in that regard. It was submitted that even
today, the petitioner is willing to match the bid of the 5 th respondent. All this
would indicate that the petitioner was singled out with a view to deprive him
of the grant of the Work Order. It was thus submitted that a case was made out
for this Court to interfere in the conduct of the tender process and the issuance
of Work Order to the 5th respondent.
5. Mr. Girish Kunte, learned counsel for respondent nos.2 to 4 opposed the
aforesaid submissions. According to him, the entire tender process had been
conducted in a fair manner by granting full opportunity to all bidders to
5 WP-4042-2023-Judgment.doc
participate therein. He denied that the tender process was conducted in a
manner so as to deprive the petitioner from participating in the same. The
Technical Bid of the petitioner was held to be qualified, after which his
Financial Bids were opened. Since the rates quoted by the 5 th respondent were
more competitive than the rates quoted by the petitioner, the Work Order was
issued to the 5th respondent. On the applicability of Clause 23.9 of the Tender
Notice, it was submitted that a similar clause of this nature was also a part of
the earlier tender process, in which the petitioner had participated and had
been successful in getting the Work Order. In e-Tender Notice No.25/2018-19
(NMRDA) as well as e-Tender Notice No.7/2021-22, though such a clause was
present, the Financial Bids had been opened immediately after the technical
evaluation. In the previous Tender Notice, the petitioner was successful and
was thus aware of this practice of the 2nd respondent. Moreover, the
opportunity to make a complaint was to be exercised by a disqualified bidder
and not by a bidder whose Technical Bid was accepted. Since the petitioner's
bid had been held to be technically eligible, no grievance in that regard could
be raised by the petitioner. As regards the shortfall of documents and absence
of a provision for relaxation, it was submitted that the Tendering Authority
relied upon the provisions of Government Resolution dated 27 th September
2018, as revised on 17th September 2019. There was no arbitrariness in this
regard. All documents available were considered along with the earlier work
experience of the said bidders. Reference in this regard was made to the letters
dated 12th May 2023 issued by the 5th and 6th respondents, requesting for
6 WP-4042-2023-Judgment.doc
consideration of their work experience. In accordance with Clause 4.5.2 of the
Government Resolution dated 27th September 2018, the eligibility and
suitability of each bidder was considered and the Work Order was issued by
accepting the most competitive rates that had been quoted by the 5 th
respondent. There was no arbitrariness whatsoever and considering the nature
of the work proposed, which was in larger public interest, there was no reason
to interfere in exercise of writ jurisdiction. In support of these contentions, the
learned counsel for respondent nos.2 to 4 has relied upon the decision of this
Court in Universal Cables Ltd. and Anr. Vs. State of Maharashtra, Through it's
Principal Secretary, Ministry of Power and Energy and Ors., 2023 SCC OnLine
Bom 588 and decisions of the Hon'ble Supreme Court in (i) Om Gurusai
Construction Company Vs. V.N. Reddy and Ors., 2023 Live Law (SC) 694; (ii)
Agmatel India Pvt. Ltd. Vs. Resoursys Telecom and Ors., 2022 Live Law (SC)
105; (iii) Balaji Ventures Pvt. Ltd. Vs. Maharashtra State Power Generation
Company Ltd. and Anr., 2022 Live Law (SC) 295; (iv) N.G. Projects Ltd. Vs.
Vinod Kumar Jain and Ors., Civil Appeal No.1846 of 2022, decided on 21 st
March 2022; (v) Airport Authority of India Vs. Centre for Aviation Policy,
Safety & Research (CAPSR) and Ors., Civil Appeal Nos.6615-6616 of 2022,
decided on 30th September 2022 and; (vi) Tata Motors Ltd. Vs. The Brihan
Mumbai Electric Supply & Transport Undertaking (BEST) and Ors., 2023 Live
Law (SC) 467. It was prayed that no interference was called for in the writ
petition.
7 WP-4042-2023-Judgment.doc
6. Mr. N.C. Phadnis, learned counsel for the 5 th respondent, who had been
issued the Work Order, also opposed the Writ Petition. According to him, after
being found technically qualified, the bids of all successful bidders, who were
technically qualified were evaluated. Since the offer given by the 5 th
respondent was most competitive, it was awarded the Work Order. According
to the learned counsel, it was not open for the petitioner to make a grievance
with regard to Clause 23.9 of the Tender Notice for the reason that the
petitioner's Technical Bid had been accepted and the provision for making a
grievance under the said clause was with a bidder whose Technical Bid was
not accepted. It was urged that though the Technical Bids had been updated on
24th April 2023, the petitioner sought to raise an objection only on 30 th May
2023. Despite the fact that about 36 days were available, the petitioner failed
to raise any objection. It was denied that there was any shortfall of documents
at the instance of the 5th respondent. The said respondent had given a detailed
clarification and had submitted all requisite documents, that was clear from
the communication dated 12th May 2023. There was no relaxation of any
nature granted in favour of the 5th respondent. It's bid was accepted in
accordance with the requisite tender conditions. The learned counsel also
sought to place reliance on the decision in Universal Cables Limited and Anr.
(Supra). It was thus submitted that there was no case made out to interfere in
writ jurisdiction.
8 WP-4042-2023-Judgment.doc
7. We have heard the learned counsel for the parties at length and with
their assistance, we have perused the documents on record. We have
thereafter given due consideration to their respective submissions. Before
considering the same, it would be necessary to bear in mind the law laid down
by the Hon'ble Supreme Court in some of its decisions.
8. In Air India Ltd. Vs. Cochin International Airport Ltd. and Ors., along
with connected matter, (2000) 2 SCC 617 , it has been observed, in paragraph
7, as under :-
"7. The award of a contract, whether it is by a private party
or by a public body or the State, is essentially a
commercial transaction. In arriving at a commercial
decision considerations which are paramount are
commercial considerations. The State can choose its
own method to arrive at a decision. It can fix its own
terms of invitation to tender and that is not open to
judicial scrutiny. It can enter into negotiations before
finally deciding to accept one of the offers made to it.
Price need not always be the sole criterion for awarding
a contract. It is free to grant any relaxation, for bona
fide reasons, if the tender conditions permit such a
relaxation. It may not accept the offer even though it
happens to be the highest or the lowest. But the State, its
corporations, instrumentalities and agencies are bound
to adhere to the norms, standards and procedures laid
down by them and cannot depart from them arbitrarily.
Though that decision is not amenable to judicial review,
9 WP-4042-2023-Judgment.doc
the Court can examine the decision-making process
and interfere if it is found vitiated by mala fides,
unreasonableness and arbitrariness. The State, its
corporations, instrumentalities and agencies have the
public duty to be fair to all concerned. Even when some
defect is found in the decision-making process, the
Court must exercise its discretionary power under
Article 226 with great caution and should exercise it
only in furtherance of public interest and not merely on
the making out of a legal point. The Court should
always keep the larger public interest in mind in order
to decide whether its intervention is called for or not.
Only when it comes to a conclusion that overwhelming
public interest requires interference, the Court should
intervene."
9. In Jagdish Mandal Vs. State of Orissa and Ors., along with connected
matter, (2007) 14 SCC 517, it has been held, in paragraph 22, as under :-
"22. Judicial review of administrative action is intended to
prevent arbitrariness, irrationality, unreasonableness,
bias and mala fides. Its purpose is to check whether
choice or decision is made "lawfully" and not to check
whether choice or decision is "sound". When the power
of judicial review is invoked in matters relating to
tenders or award of contracts, certain special features
should be borne in mind. A contract is a commercial
transaction. Evaluating tenders and awarding contracts
are essentially commercial functions. Principles of
equity and natural justice stay at a distance. If the
10 WP-4042-2023-Judgment.doc
decision relating to award of contract is bona fide and
is in public interest, Courts will not, in exercise of
power of judicial review, interfere even if a procedural
aberration or error in assessment or prejudice to a
tenderer, is made out. The power of judicial review will
not be permitted to be invoked to protect private
interest at the cost of public interest, or to decide
contractual disputes. The tenderer or contractor with a
grievance can always seeks damages in a civil court.
Attempts by unsuccessful tenderers with imaginary
grievances, wounded pride and business rivalry, to
make mountains out of molehills of some technical /
procedural violation or some prejudice to self, and
persuade Courts to interfere by exercising power of
judicial review, should be resisted. Such interferences,
either interim or final, may hold up public works for
years, or delay relief and succour to thousands and
millions and may increase the project cost manifold.
Therefore, a Court before interfering in tender or
contractual matters in exercise of power of judicial
review, should pose to itself the following questions :
(i) Whether the process adopted or decision made by
the authority is mala fide or intended to favour
someone;
OR
Whether the process adopted or decision made is
so arbitrary and irrational that the Court can say:
"the decision is such that no responsible authority
11 WP-4042-2023-Judgment.doc
acting reasonably and in accordance with relevant
law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no
interference under Article 226."
10. Recently, in Tata Motors Ltd. Vs. Brihan Mumbai Electric Supply and
Transport Undertaking (BEST), AIR 2023 SC 2717 , the Hon'ble Supreme Court,
in paragraph 48, has observed as under :-
"48. This Court being the guardian of fundamental rights is
duty-bound to interfere when there is arbitrariness,
irrationality, malafides and bias. However, this Court has
cautioned time and again that courts should exercise a lot
of restraint while exercising their powers of judicial
review in contractual or commercial matters. This Court is
normally loathe to interfere in contractual matters unless
a clear-cut case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that today
many public sector undertakings compete with the private
industry. The contracts entered into between private
parties are not subject to scrutiny under writ jurisdiction.
No doubt, the bodies, which are State within the meaning
of Article 12 of the Constitution are bound to act fairly
and are amenable to the writ jurisdiction of superior
courts but this discretionary power must be exercised with
a great deal of restraint and caution. The Courts must
realise their limitations and the havoc which needless
12 WP-4042-2023-Judgment.doc
interference in commercial matters can cause. In contracts
involving technical issues, the Courts should be even more
reluctant because most of us in Judges' robes do not have
the necessary expertise to adjudicate upon technical issues
beyond our domain. The Courts should not use a
magnifying glass while scanning the tenders and make
every small mistake appear like a big blunder. In fact, the
Courts must give "fair play in the joints" to the
government and public sector undertakings in matters of
contract. Courts must also not interfere where such
interference will cause unnecessary loss to the public
exchequer."
11. Keeping in mind the aforesaid law, the rival contentions now fall for
consideration. According to the learned counsel for the petitioner, under
Clause 23.9(i) of the Tender Notice, the result of evaluation of Part-I of the Bid
was required to be made public on the eProcurement system and period of two
working days was to be given, during which any bidder could submit his
complaint, which was to be considered before opening of Part-II of the Bid. At
the outset, it may be stated that a plain reading of this clause does not give it a
restrictive meaning that it is only such bidder whose Technical Bid has been
held to be disqualified can submit a complaint against the same. The said
clause permits "any" bidder to submit a complaint during the period of two
working days after results of the evaluation of the Technical Bids is made
public. It is thus clear that it was permissible for any bidder, including the one
whose Technical Bid had been held qualified, to submit a complaint for
13 WP-4042-2023-Judgment.doc
consideration as regards acceptance of any other bid. The stand taken
otherwise by the Tendering Authority as well as the 5 th respondent cannot be
accepted.
12. Having found so, we do not find that in the facts of the present case,
absence of an opportunity to the petitioner to raise a complaint against the
decision of the Tendering Authority of holding the bids of the 5 th to 7th
respondents successful has resulted in any serious prejudice that would vitiate
the entire tender process. For considering this aspect, if the objection sought to
be raised by the petitioner is considered, it is seen that the 5 th and 6th
respondents are stated to have failed to produce any document with regard to
ownership of machinery required for the tender work. On this aspect, it has
been stated by the 2nd respondent in its affidavit-in-reply that the requirement
specified in the tender document was with regard to construction of basement
+ ground floor + 3 upper floors. The said bidders, however, had indicated
experience of constructing multi-storeyed buildings. For that reason, 5 th and
6th respondents had shown possession of concrete static / stationary pumps
while 7th respondent had shown possession of concrete boom pumps. It is
further seen that on 12th May 2023, the 5th as well as 6th respondent had issued
communications to the Tendering Authority along with requisite documents in
that regard. This was in response to the shortfall in documents indicated by the
Tendering Authority to the bidders. According to the Tendering Authority, it
took aid of the Government Resolution dated 27 th September 2018 and
14 WP-4042-2023-Judgment.doc
especially Clause 4.5.2 thereof. Under this clause, it was permissible for the
Tendering Authority to take into consideration experience of a bidder of
earlier work undertaken and to consider the same under the present bid. We
do not find that there is any irregularity or illegality on the part of the
Tendering Authority in doing so. Since the Tendering Authority is the one that
seeks execution of the proposed work, it is deemed to be in a better position to
determine its needs and requirements. If it was satisfied with the documents
submitted by the 5th to 7th respondents after taking aid of the Government
Resolution dated 27th September 2018 that has been issued by the Public
Works Department, we do not find that on this basis, the decision of the
Tendering Authority deserves to be interfered with. It is also to be noted that
the petitioner's bid was held to be technically qualified and it had also
participated in the Financial Bid. In absence of any specific allegations of mala
fides or favouritism as regards other bidders, we do not find this reason to be
so overwhelming to warrant interference on this basis.
13. It is to be further noted that, according to the Tendering Authority, by
accepting the bid of the 5th respondent, it would be saving an amount of
Rs.4,03,84,535.28 of Government funds. This aspect has not been disputed on
record. It is, therefore, clear that it is rather in public interest for this Court not
to interfere with the grant of Work Order to the 5 th respondent, as held by the
Hon'ble Supreme Court in the decisions referred to hereinabove. Interference
under Article 226 of the Constitution of India would be justified if such
15 WP-4042-2023-Judgment.doc
interference furthers public interest and not otherwise. The observations of the
Division Bench in Universal Cables Ltd. and Anr. (Supra) support this
conclusion. We may also note that in M/s. Om Gurusai Construction Company
(Supra), it has been held that the owner of the project, having authored the
tender documents, is the best person to understand and appreciate its
requirements and interpret its documents. The Constitutional Courts must
defer to this understanding and appreciation of the tender documents by the
employer unless there is mala fide or perversity in the understanding or
appreciation of the same. Similar view has been taken in Agmatel India Pvt.
Ltd. (Supra). As observed in Silppi Constructions Contractors Vs. Union of
India, (2020) 16 SCC 489, the Courts should not use a magnifying glass while
scanning the tenders and make every small mistake appear like a big blunder.
The Courts must give "fair play in the joints" to the Government and Public
Sector Undertakings in the matters of contract. It is only if unnecessary loss is
likely to be caused to the public exchequer, that interference is warranted. We
may also note that in the earlier Tender Notice issued by the 2 nd respondent,
the bid of the petitioner had been accepted and during the said bid process, the
Financial Bids had been opened immediately after evaluation of the Technical
Bids was made known. At that point of time, the petitioner was a beneficiary of
the said process since he had been granted the said work. The petitioner was
thus aware of the practice being followed by the 2 nd respondent during the
bidding process.
16 WP-4042-2023-Judgment.doc
14. For the aforesaid reasons, we do not find that there is any exceptional
case made out for this Court to exercise jurisdiction under Article 226 of the
Constitution of India. The challenge thus fails. The Writ Petition stands
dismissed. Rule stands discharged with no order as to costs.
(ABHAY J. MANTRI, J.) (A.S. CHANDURKAR, J.)
Dixit
Signed by: Prashant D. Lanjewar
Designation: Senior Pvt. Secretary
17 WP-4042-2023-Judgment.doc
Date: 23/12/2023 13:13:25
