Bombay High Court
Amjad Mastan Pathan And Another vs The State Of Maharashtra Through ... on 26 September, 2023
Bench: Mangesh S. Patil, Shailesh P. Brahme
2023:BHC-AUG:20977-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH
AT AURANGABAD
WRIT PETITION NO. 9363 OF 2022
1. Amjad s/o Mastan Pathan,
Aged 46 years, Occu. : Contractorship &
Proprietor of Ajinkyatara Construction
Ltd. R/o Khori Galli, Latur,
Tq. and Dist. Latur.
2. Dhanraj s/o Ganpat Kale,
Age 45 years, Occu. : Contractorship &
Proprietor of Bhoomi Constructions,
Latur, Tq. and Dist. Latur,
R/o Anand Nagar, Latur,
Tq. and Dist. Latur. .. Petitioners
Versus
1. The State of Maharashtra,
Through its Secretary,
in the Department of Urban
Development Mantralaya,
Mumbai - 32.
2. The Latur City Municipal Corporation,
Latur, Tq. and Dist. Latur.
Through its Commissioner/Administrator,
3. The City Engineer,
The Latur City Municipal Corporation,
Latur, Tq. and Dist. Latur.
4. Girjai Infrastructure,
Sharda Bhavan, Rajeev Gandhi
Chowk, Ausa Road, Latur,
Tq. and Dist. Latur,
Through its Director,
Akash S/o Shankar Morge.
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5. Annappa s/o Maharudrappa Guddodagi,
Aged : 46 years, Occu. : Business,
R/o Sharda Bhavan, Rajeev Gandhi
Chowk, Ausa Road, Latur,
Tq. and Dist. Latur. .. Respondents
Shri A. N. Irpatgire, Advocate for the Petitioners.
Shri S. G. Sangale, A.G.P. for the Respondent No. 1.
Shri A. V. Hon, Advocate for the Respondent No. 2.
Shri H. V. Patil, Advocate for the Respondent No. 3.
Shri P. P. More, Advocate for the Respondent Nos. 4 and 5.
WITH
WRIT PETITION NO. 12798 OF 2022
1. National Traders
Through its Proprietor,
Gafur S/o Isaksab Shaikh,
Aged : 43 years, Occu. : Business,
R/o Opp. S. T. Workshop,
Ambajogai Road, Latur.
2. Rashed S/o Sartaj Sayyed,
Age : 27 years, Occu. : Contractor
R/o Shop No. 3, Near Patel Medical,
Khaja Nagar, Osmanabad,
Tq. & Dist. Osmanabad. .. Petitioners
Versus
1. The State of Maharashtra,
Through the Secretary,
Urban Development Department,
Mantralaya, Mumbai - 32.
2. The Commissioner,
Municipal Corporation, Latur,
Tq. and Dist. Latur.
3. Shri Navnath Kendre,
The City Engineer,
Municipal Corporation, Latur,
Tq. and Dist. Latur. .. Respondents
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Shri V. C. Valse, Advocate h/f Shri T. M. Venjane, Advocate for
the Petitioners.
Shri S. G. Sangale, A.G.P. for the Respondent No. 1.
Shri H. V. Patil, Advocate for the Respondent Nos. 2 and 3.
CORAM : MANGESH S. PATIL AND
SHAILESH P. BRAHME, JJ.
CLOSED FOR JUDGMENT ON : 07.09.2023
JUDGMENT PRONOUNCED ON : 26.09.2023
JUDGMENT (Per Shailesh P. Brahme, J.) :-
. Rule. Rule is made returnable forthwith. Heard learned
counsel for the respective sides for final disposal at the admission
stage.
2. The petitioners claim to be successful bidders in the tender
process. They have filed present petitions initially for direction to
issue work order being successful bidders and for quashment of
the tender notice dated 26.08.2022. Due to the subsequent
developments, additional reliefs challenging the work order dated
22.09.2022 issued in favour of the respondent No. 5 direction to
initiate disciplinary action against the respondent Nos. 2 and 3
and to recover amount paid by the respondent Nos. 4 and 5 in
pursuance of work order dated 22.09.2022 are sought.
3. The respondent No. 2 has been governed and looked after by
the administrator as the term of elected body has expired. To
carry out various developmental works in Latur city resolution
was passed and the administrative sanction was secured. On
20.07.2022 E-tender notice was issued by the respondent No. 2 for
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forty developmental works. The petitioners and others submitted
their bids.
4. The petitioners qualified technical and financial bid. By
letter dated 05.08.2022 they were called upon by the respondent
No. 3 to deposit security amount. The same was complied with.
They were waiting for issuance of the work order. They were
shocked to know that the respondent No. 2 issued a fresh tender
notice on 26.08.2022 for the same works without informing them
and instead of completing the earlier tender process. This was the
cause for the petitioners to approach this Court.
5. Writ Petition No. 9363 of 2022 was filed on 12.09.2022. Writ
Petition No. 12798 of 2022 was filed on 12.12.2022. As per the
contentions of the petitioners, when first writ petition was
pending and awaiting the admission hearing few developments
took place with jet-speed. The subsequent tender process
commenced on 26.08.2022 and was concluded on 22.09.2022 by
opening the bids, accepting the bids and issuing the work orders.
The petitioners were not issued the relevant documents.
According to them the tender process was wound up to frustrate
the claim of the petitioners in clandestine manner.
6. In the wake of above subsequent developments, petitioners
were given liberty to amend the petition by order dated
26.09.2022. Additional pleadings were incorporated with prayers
challenging the work order dated 22.09.2022 issued to the
respondent Nos. 4 and 5 and direction to conduct disciplinary
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action.
7. The respondent No. 2/Municipal Corporation has filed
affidavit in reply in both the matters. It is the case of the
corporation that initially process was by invitation of quotations.
Last date for acceptance of the quotations was 27.07.2022. It is
stated to have received various complaints pointing out
irregularities. The corporation was required to cancel the tender
process with a decision to initiate fresh tender process as per
condition No. 7. There was no vested right in the petitioners.
8. It is averred that the fresh tender notice was floated by
amalgamating the work under three schemes. A E-tender notice
was issued on 26.08.2022. The last date for submission of tender
was 19.09.2022. Online tenders were received, evaluated and
work orders were issued on 22.09.2022. The successful bidders
are stated to have almost completed the work. The petitioners
did not participate in the subsequent E-tender process. The
petitioners have no vested right and the petitions are prayed to be
dismissed.
9. The respondent No. 3 would support the respondent No. 2.
The respondent Nos. 4 and 5 have filed affidavit in reply stating
that they were selected after following due procedure of law. They
were eligible. The substantial work has been completed as there
was no impediment or prohibitory orders from the Court. It is
stated that no case is made out to point out any lacuna in the
tender process. The constrains on the judicial review have been
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pressed into service. There has been satisfactory execution of the
work by them. They also pray to dismiss the petitions.
10. The learned counsel for the petitioners Mr. A. N. Irpatgire
would submit that the petitioners were the lowest successful
bidders in the earlier tender process which was aborted in a
clandestine manner. They are entitled to receive the work orders.
However, without any intimation the respondent Nos. 2 and 3
acted in collusion with other contesting respondents and deprived
them. The impugned action is arbitrary and non transparent.
11. He would submit that the subsequent tender process
initiated by tender notice dated 26.08.2022 is against the
Government Resolutions dated 25.10.2019 and 27.09.2018. The
respondent Nos. 4 and 5 are not eligible. They quoted more rates
than the petitioners and are still selected and allotted the work.
This has caused loss to the public exchequer also. It is submitted
that there was a concluded contract with the petitioners and
adverting to the subsequent tender process was impermissible.
12. The learned counsel would submit that before completing
the requisite period of 85 days, fresh tender process was adverted
to, which is patent illegality. This has been done with mala fide
intention by the respondent Nos. 2 and 3 to favour unsuccessful
bidders. It is submitted that the respondent Nos. 2 and 3 are
liable for disciplinary action. The petitioners have assailed the
manner in which the process is conducted with astonishing speed
reflecting total high handedness. It is prayed that indulgence
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under Article 226 of the Constitution of India is necessary.
13. To repel the above submissions, the learned counsel for the
respondents states that the compelling circumstances to abandon
earlier process of tender was because it was in the form of inviting
quotations. The corporation stated to have invoked its power
under Clause 8 of the tender condition stated in the tender notice
dated 20.08.2022 at Exhibit - C. Due to the complaints and the
irregularities the earlier process was required to be abandoned.
The learned counsel would submit that the petitioners failed to
participate in the subsequent tender process though they were
aware of it. It is pointed out that the Writ Petition No. 12798 of
2022 was filed after conclusion of subsequent tender process.
14. It is submitted that substantial work has been completed.
The duration for completion of the work was three months. Both
the petitions have become infructuous. There was no concluded
contract with the petitioner. Hence it is submitted that no case is
made out to warrant interference.
15. The learned counsel for the respondents would submit that
the petitioners have failed to prove mala fides, arbitrariness or
unreasonableness.
16. The respondent No. 3 has placed reliance on the following
judgments of the Supreme Court and this Court.
A. N. G. Projects Limited Vs. Vinod Kumar Jain and others
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reported in (2022) 6 SCC 127.
B. Jagdish Mandal Vs. State of Orissa and others reported in
(2007) 14 SCC 517.
C. M/s Aditya Enterprises Vs. City Industrial and
Development Corporation of Maharashtra Ltd. Writ
Petition No. 15601 of 2022 dated 20.04.2023.
17. We have considered the rival submissions canvassed by the
parties. The petitioners are invoking the tender jurisdiction of the
High Court under Article 226 of the Constitution of India. There
are inherent restrictions while exercising jurisdiction and
especially directing to substitute the decision taken by the
employer. We need to appreciate the facts and the submissions of
the parties keeping in mind the guidelines issued by the Supreme
Court from time to time. We propose to deal with those principles
a little later.
18. It reveals from the papers that earlier tender process was in
the form of invitation of quotations. The period of the work was of
three months excluding the rainy days. The tender notice which
is produced at Annexure - C indicates terms and conditions of
project No. 43. A condition No. 8 provides for discretion to the
Corporation for continuing with the tender process. It is the case
of the respondent No. 2/Corporation that after inviting quotations,
complaints were received pointing out irregularities. A decision
was required to be taken to abort the process and to advert to
fresh E-tender process. This defence of the corporation has not
been controverted by the petitioners. There is nothing on record to
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disbelieve the stand taken by the corporation for aborting the
process.
19. The respondent No. 2/Corporation has invoked its power
under condition No. 8 of the tender notice. To have transparency
and for avoiding the difficulties if the new process was initiated
then there is nothing illegal or arbitrary in it. It is not that the
Corporation is not empowered to give up earlier process. We find
that nothing substantial had progressed in earlier process and
without causing any hardship or prejudice either to the
petitioners or the stake holders, the respondent/Corporation
adverted to fresh process. We do not find any illegality or mala
fides in the said decision of the corporation.
20. The learned counsel for the petitioners was insisting for
issuance of a work order for them being lowest bidders. We find
that no agreement was ever executed by the Corporation in favour
of the petitioners or any successful bidder. There is no concluded
contract between the petitioners and the corporation. No right
has been created in favour of the petitioners. The payment of
security deposit does not invest any contractual right in
petitioners. Therefore, the submission of the learned counsel for
the petitioners is devoid of any substance.
21. It is next submitted by the learned counsel for the
petitioners that they were lowest bidders. It is settled legal
position that an employer is not obliged to accept the tender and
award the work to the contractor just because it/they are
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lowest/highest bidders. No right can be said to have been created
in favour of the petitioners. Normally also, the employer has
discretion not to go for lowest/highest bidder and for the reasons
or special circumstances there is choice to deviate. We are not
prepared to accept the contention that the respondent Nos. 4 and
5 have quoted more rates than the petitioners and, therefore,
petitioners be given an opportunity which would save public
money. The petitioners did not participate in the subsequent
tender process and have no right to replace the respondent Nos. 4
and 5.
22. It is a matter of record that the duration of the work is of
three months excluding the rainy days. The respondent Nos. 4
and 5 were issued with work orders on 22.09.2022. Though the
period stipulated has been expired, the execution of work is in
progress. It is stated to have been on the verge of completion. The
respondent Nos. 4 and 5 have sought reliance upon the
compliance certificate produced on record. The petitioners have
not participated in the subsequent tender process and they are
challenging the same.
23. Considering time gone and the subsequent developments,
we do not deem it appropriate to grant indulgence and to divest
the work from the respondent Nos.4 and 5. It appears that
substantial amount has been spent. It is too late in the day to
quash the subsequent tender process considering the nature of
work. We cannot be oblivious of the fact that it is a
developmental work of amalgamated schemes. The work has
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been carried out in the city of Latur. The convenience of the
residents and their hardship will have to be considered before
passing any drastic order. We are of the view that the
infrstructural work cannot be halted at any rate. We are not
inclined to grant any relief to the petitioners.
24. The judgments cited by the learned counsel for the
respondent No. 3 are worth relying. We find that paragraph No.
22 of the judgment in the matter of M/s Aditya Enterprises Vs.
City Industrial and Development Corporation (cited supra) refers
to the law laid down by the Supreme Court in the matter of
Haryana Urban Development Authority (HUDA) and others Vs.
Orchid Infrastructure Developers Pvt. Ltd. (2017) 4 SCC 243.
We have already held that there is no concluded contract as well
as there can be no vested right in the petitioners being lowest
bidders. We are fortified in our view for refusing any relief to the
petitioners in the matter in hand.
25. The guidelines issued by the Supreme Court in the matter
of N. G. Projects Limited Vs. Vinod Kumar Jain and others cited
supra in para No. 23 are reproduced as below.
"23. In view of the above judgments of this Court, the Writ
Court should refrain itself from imposing its decision over the
decision of the employer as to whether or not to accept the bid
of a tenderer. The Court does not have the expertise to
examine the terms and conditions of the present- day
economic activities of the State and this limitation should be
kept in view. Courts should be even more reluctant in
interfering with contracts involving technical issues as there is
a requirement of the necessary expertise to adjudicate upon
such issues. The approach of the Court should be not to find
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fault with magnifying glass in its hands, rather the Court
should examine as to whether the decision-making process is
after com- plying with the procedure contemplated by the
tender conditions. If the Court finds that there is total
arbitrariness or that the tender has been granted in a mala fide
manner, still the Court should refrain from interfering in the
grant of tender but instead relegate the parties to seek
damages for the wrongful exclusion rather than to injunct the
execution of the contract. The injunction or interference in the
tender leads to additional costs on the State and is also against
public interest. Therefore, the State and its citizens suffer
twice, firstly by paying escalation costs and secondly, by being
deprived of the infrastructure for which the
present-day Governments are expected to work."
26. We are reluctant to interfere considering the economic
activity of the respondent Nos. 1 to 3. As per guidelines laid down
by the Supreme Court, we are refraining ourselves from
substituting the decision of the corporation. We have already held
that any indulgence by us would lead to additional cost and would
be against the public interest.
27. The principles laid down by the Supreme Court in the
matter of Jagdish Mandal Vs. State of Orissa and others (cited
supra) in respect of judicial review are well established. We refer
to paragraph No. 22, which reads 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 decision
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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 seek 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 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. Cases involving black-listing
or imposition of penal consequences on a tenderer/contractor
or distribution of state largesse (allotment of sites/shops,
grant of licences, dealerships and franchises) stand on a
different footing as they may require a higher degree of
fairness in action."
28. As laid down by the Supreme Court in the matter of Jagdish
Mandal Vs. State of Orissa and others (cited supra), the
petitioners are at liberty to approach appropriate forum claiming
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damages. For the reasons stated above, we do not find any
arbitrariness or procedural impropriety in the process undertaken
by respondent Nos. 2 and 3.
29. Before parting with the judgment, we have noticed startling
features of the subsequent process in question. The petitioners
have participated in the earlier tender process. They were called
upon to pay the security deposit. They were identified being
successful bidders. Under these circumstances, when the
respondent/corporation decided to abandon the earlier tender
process, it was under obligation to intimate the petitioners
regarding the decision. The petitioners should not have been kept
waiting for the work orders. We disapprove incalcitrant attitude
of the respondent No. 2.
30. In subsequent tender process, the tenders were to be
submitted lastly by 19.09.2022. They were opened and evaluated
on 22.09.2022. Some resolution was passed on the same day. The
work orders were issued on the self same date. This unusual
method adopted by the respondent No. 2 reflects highhandedness
and grave irregularity. It is informed that the administrator was
looking after the tender process on behalf of the corporation. A
high rank public officer is not expected to adopt the procedure in
selecting bidders involving high stakes. This unnecessary haste
creates doubt. There is no explanation for the supersonic speed
shown by the administrator.
31. For the reasons stated above and in view of the law laid
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down by the Supreme Court, we find that the petitioners have
failed to make out any case to cause our indulgence while
exercising writ jurisdiction. The writ petitions are devoid of
merits. Same are dismissed. Rule is discharged. There shall be
no order as to costs.
[ SHAILESH P. BRAHME, J.] [ MANGESH S. PATIL, J.]
bsb/Sept. 23
