Shyam Sunder vs Union Of India And Others
2022 Latest Caselaw 5934 Cal

S/L. 26.
August 26, 2022.
MNS.


                                   WPA No. 19327 of 2022

                                       Shyam Sunder
                                              Vs.
                                   Union of India and others

                          Mr. Utpal Bose,
                          Mr. Pradyumna Sinha,
                          Mr. Sannidhya Datta

                                        ... for the petitioner.

                          Ms. Runu Mukherjee

                                        ...for the Union of India.

                          Mr. Shounak Mitra,
                          Ms. Vaibhavi Pandey,
                          Ms. Prerona Banerjee

                                 ...for the respondent nos. 2, 4 to 7.

The learned Senior Advocate appearing

for the petitioner contends that the petitioner, who

has been carrying on similar work in respect of

warehouses of the Steel Authority of India Limited

(SAIL) since the year 2018, was the successful L-

1 tenderer in a tender floated by the SAIL for

similar purpose. However, taking resort to

Clause - 11 of the tender documents, the Tender

Issuing Authority gave out that the L-1 tenderer,

that is, the present petitioner, had quoted an

abnormally low rate at the auction such that it

raises material concerns as to the capability of

the petitioner as a bidder to perform the contract

at the offered rate, for which a justification was

sought from the petitioner on the quoted rate.

It is submitted that a proper justification in

writing was given on behalf of the petitioner.

However subsequently, without intimating the

rejection of the petitioner and/or giving any

opportunity to the petitioner to explain the

petitioner's stand, a fresh tender was floated by

the SAIL authorities, the date of opening of bid in

connection with which is August 31, 2022.

It is submitted that propriety demands that

the petitioner, who has been discharging similar

function for the SAIL in the concerned warehouse

and since the petitioner was the successful L-1

tenderer at the techno-commercial stage as well

as quoted the lowest bid, at least an opportunity

ought to have been given to the petitioner to

refute the contentions, if any, of the SAIL

authorities against the petitioner inasmuch as the

evaluation of the justification for the alleged

abnormally low rate is concerned. In the least, it

is contended that a rejection, if any, of the

petitioner ought to have been intimated first to the

petitioner prior to floating a fresh tender.

The learned Senior Advocate appearing

for the petitioner places reliance on an unreported

judgement of a Division Bench of this Court dated

October 9, 2020 passed in M/s. Kultali Food

Marketing Private Limited & Anr. Vs. State of

West Bengal & Ors. (FMA 913 of 2020) in support

of the proposition that when a tender or like

process is cancelled without adequate grounds

being cited, the decision must be seen to be

arbitrary, capricious and unreasonable. It was

observed by the Division Bench in the said

judgment that it is possible that the State (the

Tender Issuing Authority in the said case) or the

relevant authorities may not like the candidates

who have applied pursuant to the advertisement

that has been published. Unlike a private body,

which has the full latitude to choose the person

with whom the private body would contract, the

State has to act rationally, reasonably and without

arbitrariness. Unless the State indicates cogent

grounds for annulling the process, the

applications made by all the candidates merit

consideration in accordance with law, it was held.

Learned counsel appearing for the SAIL

authorities submits that he is equipped with an

internal written evaluation of the SAIL authorities

in writing, of the justification furnished by the

petitioner for the abnormally low rates of the

petitioner's bid.

It is submitted that several factors were

considered by the SAIL authorities while so

evaluating and it was also discussed as regards

the cogent and reasonable rates, which could

have been quoted under the six different heads

involved. Upon such a detailed consideration and

taking into account a show cause having been

issued against the petitioner in respect of a

warehouse of the SAIL in Faridabad, the

proceeding from which is still pending, the

evaluating authorities came to the conclusion that

the petitioner's bid cannot be accepted.

It is submitted that no case of mala fides

and/or arbitrariness has been made out by the

petitioner. Moreover, if an opportunity is given to

the SAIL authorities, the said respondents shall

bring on record the said justification in writing, as

a premise for the recommendation of the Tender

Committee of the SAIL dated July 25, 2022 for

rejection of the petitioner's bid.

Upon a consideration of the arguments of

the parties, it transpires that there is reasonable

scope of doubt as to whether there is scope of

any opportunity of hearing being given to the

petitioner on the question of evaluation. In the

present case, since the quoted rate was, in the

perception of the Tender Issuing Authority,

abnormally low, the respondent authorities were

justified in seeking a justification.

Upon such justification having been

provided by the petitioner, an evaluation was

apparently done behind the back of the petitioner,

without affording the petitioner any opportunity of

explaining the alleged discrepancy in such bid.

Since the fresh tender has been floated

behind the back of the petitioner, the learned

Senior Advocate appearing for the petitioner is

justified in arguing that the petitioner, in propriety,

if not in law, was entitled to intimation in respect

of such rejection before floating the fresh tender.

It has been submitted by the petitioner that

Clause - 11 of the tender document also included

the provision that if the bidder is considered for

placement of order despite having quoted

abnormally lowest rates, the bidder may be asked

to give Performance Guarantee Bond (PGB) in

the form of bank guarantee, for which the

petitioner is also ready and willing. However, no

opportunity was given to the petitioner to furnish

the same.

Despite such prima facie case having been

made out by the petitioner in respect of the

propriety to give a prior notice to the petitioner

before floating a new tender upon the rejection of

the petitioner's bid, the logic advanced by the

petitioner is not sufficiently strong to formulate a

prima facie case necessary to grant an interim

order in respect of a tender process.

First, inasmuch as Clause-11 of the tender

document is concerned, the rate was, in the

perception of the Tender Issuing Authorities,

abnormally low, which fully entitled the said

authorities to seek justification from the bidder.

Although the petitioner, as bidder, has given such

justification, there is nothing in Clause-11, prima

facie, to show that the evaluation process is to be

undertaken upon giving an opportunity of hearing

to the petitioner.

The justification of the petitioner having

allegedly been considered by the respondents,

for placement before the court of which the

respondents have not got any opportunity as yet

by way of affidavits, it cannot be construed

automatically that the evaluation was mala fide or

arbitrary.

Although the Division Bench, in the

judgment cited by the petitioner, came to the

conclusion that reasons for rejection had to be

given, in the present case, the initial stage of

giving a reason as regards the quoted rate being

abnormally low, has been crossed.

The tender document, in Clause- 11

thereof, contemplates an evaluation of any

justification of such abnormally low rates given by

the bidder by the Tender Issuing Authorities

unilaterally. Since the SAIL authorities were

prima facie of the opinion that the petitioner's bid

cannot be accepted, no further intimation of such

rejection was legally required to be given as per

Clause-11 of the tender documents, although the

same might have been proper. The legality of the

said rejection is not vitiated merely by non-

communication of the same to the petitioner.

Moreover, the subsequent stage of the bidder

being asked to give Performance Guarantee

Bond, would only arise if the bidder was

considered by the SAIL authorities for placement

of order despite having quoted abnormally low

rates. However since, in the notion of the Tender

Issuing Authorities, the bidder was not considered

for placement upon an evaluation of the

justification, there was no further necessity, prima

facie, for the Tender Issuing Authorities to seek a

Performance Guarantee Bond from the petitioner.

However, since the petitioner has made

out a case sufficient for the writ petition to be

heard on merits, although, in my opinion, not for

grant of interim order at this stage, the

respondents are directed to file affidavits-in-

opposition within a fortnight from date. Reply, if

any, shall be filed within a week thereafter.

The matter shall be enlisted next before

the regular Bench having determination for

hearing after the expiry of the time-frame fixed for

filing of affidavits.

Liberty to the parties to mention the matter

for such enlistment before the appropriate Bench

after such time period is over.

It is, however, made clear that it will be

open to the present petitioner to participate in the

fresh tender process floated by the SAIL

authorities without prejudice to their rights and

contentions in the present writ petition.

However, the said fresh tender and its

consequential action shall be subject to the

ultimate outcome of the writ petition.

(Sabyasachi Bhattacharyya, J.)