Inderjit Mehta Const Pvt Ltd vs Union Of India And Anr
2017 Latest Caselaw 1152 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Judgment Reserved on: 07.02.2017
                                    Judgment delivered on: 02.03.2017

+       W.P.(C) 683/2017

INDERJIT MEHTA CONST PVT LTD                                ..... Petitioner

                           versus

UNION OF INDIA AND ANR                                ..... Respondents

Advocates who appeared in this case:
For the Petitioner   : Mr Sandeep Sethi, Sr. Adv. with Mr Praveen
                       Chauhan, Mr Abhishek Gupta, Ms Janhavi
                       Mahana & Ms Arpita.
For the Respondents   : Mr Sanjeev Narula, CGSC with Mr Abhishek
                        Ghai.

CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE ASHUTOSH KUMAR

                              JUDGMENT

ASHUTOSH KUMAR, J

CM 3137/2017 (Exemption) Allowed, subject to all just exceptions.

W.P.(C) 683/2017

1. The petitioner, which is a construction company, is aggrieved by

the issuance of a fresh tender for construction of family quarters at group

centre, CRPF, Siliguri by respondent No.2 (CPWD through Executive

Engineer, Gangtok Central Division, Gangtok, Sikkim) on behalf of

respondent No.1 (Union of India through Ministry of Urban

Development, Nirman Bhawan, Delhi), when in an earlier tender for the

same work the petitioner had participated and was adjudged as the lowest

bidder.

2. The petitioner, therefore, has prayed for the following reliefs:-

"a) Pass a writ of mandamus or any other writ quashing the notice 28/17/EE/CE/GCD/GTK/SCSD-IV/2P16-17 for retender issued by respondent no.2.

b) pass a writ of mandamus or any other writ directing the respondent no.2 to award the tender to the petitioner being L-1 and rates being very reasonable.

c) to grant any other relief which this Hon'ble Court may deem fit and proper in respect of the facts and circumstances of the present case."

3. A notice inviting tender dated 12.08.2016 was issued by

respondent No.2 for construction of family quarters at CRPF Group

Centre at Siliguri with an estimated cost of Rs.79,90,77,039/-.

4. The petitioner, finding itself eligible on going through the terms of

the tender, participated by depositing earnest money in the form of FDR

in the office of Executive Engineer, Safdarjung Enclave, New Delhi.

5. On 15.09.2016, the technical bids were opened and 11 out of 12

bidders, including the petitioner were found to be qualified to participate

in the financial bid. The bids were to remain valid till 14.12.2016. Out of

the 11 successful participants, one M/s J.K. Engineering Pvt. Ltd was

later found to be ineligible for non-fulfilling the criterion of NIT.

6. It has been submitted on behalf of the petitioner that on the asking

of respondent No.2, the petitioner extended the validity of the bid till

30.01.2017. The petitioner was thereafter intimated that the financial bid

would be opened on 21.12.2016.

7. The petitioner was adjudged the lowest tenderer and his price was

12.6% lower than the estimated cost of the tender.

8. All of a sudden, thereafter, without any reason the petitioner

received a communication through email dated 13.01.2017 that the tender

in question had been recalled.

9. The learned counsel appearing for respondent No.2 on the other

hand submitted that though the financial bids were opened but a doubt

arose as to whether all the participants were communicated about the

requirement of getting their tender validity extended. It was also pointed

out by the learned counsel for the respondent No.2 that the financial bid

of one of the participants namely M/s C.K. Construction was not opened

as its consent for extension of the validity of the tender beyond

14.12.2016 was not received by the respondent No.2.

10. In order to ascertain as to what had actually happened, we called

for the relevant files and perused the same. We found that on 29.12.2016,

the Chief Engineer sought an explanation from the executive engineer as

to whether one of the participants namely M/s C.K. Constructions was

intimated in writing for extending the validity of its tender to which the

executive engineer had replied that there was only telephonic

communication for extension of validity with the office of M/s C.K.

Constructions.

11. The learned counsel for the respondent No.2 further pointed out

that on 09.01.2017, there was a meeting of the Regional Works Board,

Eastern region at Calcutta and the Board was of the opinion that despite

the validity of the tender being 90 days as against the Director General's

instruction for 60 days, decision on technical bid could not be taken; thus

necessitating further extension of the validity of the tender and that there

were no definite proof of the formal and authentic communication to the

tenderers regarding the requirement of extending the validity of tender.

The board, in its meeting, took note of the fact that even though the

technical bid of one of the participants namely M/s C.K. Constructions

was approved but its financial bid could not be opened because its

validity was not extended and that is why on 14.12.2016, M/s C.K.

Construction requested for the release of its EMD as the validity had

expired on 13.12.2016.

12. The Board, therefore, felt that equal opportunities and level playing

field were not provided to all the participants especially with respect to

obtaining extension of validity of the tender. As such, it vitiated the

tender process. The Board then took a decision of rejecting the tenders

without going into the merits of the tenders received. Pursuant to the

Board's decision, the tender in question was recalled on 11.01.2017.

13. The learned counsel for the respondent has, therefore, submitted

that only for affording a level playing field to all the participants, the

Board has taken a decision to recall the tender which cannot be called

unfair, irrational or designed to favouring any particular tenderer.

14. The learned counsel for the respondent No.2 also raised the issue

of lack of territorial jurisdiction of this Court to entertain the present

petition primarily on the ground that the office of respondent No.2 is

located in Gangtok (Sikkim); the impugned decision has been taken in

Gangtok and the work under the tender also had to be performed at

Gangtok. The aforesaid argument of lack of territorial jurisdiction was

countered by the petitioner by demonstrating that part of cause of action

arose in Delhi. It has been submitted on behalf of the petitioner that the

notice inviting tender was loaded on the online portal of M/s Tender

Wizard which has its office in Delhi. The petitioner accessed the website

of respondent No.2 and as per the tender condition, deposited earnest

money in the form of FDR in the office of Executive Engineer,

Safdarjung Enclave, New Delhi. The deposit receipt was uploaded on the

website of the tender portal of respondent No.2. The technical and

financial bids were also submitted online on the website of respondent

No.2 through the tender portal M/s Tender Wizard.

15. For the present and without going into the aforesaid question and

especially as to whether any integral or substantial part of the transaction

took place in Delhi, we feel that the action of the respondent No.2 in

recalling the tender is not unfair but is plausible and is based on the

rationale of providing equal opportunity to all the participants.

16. There is no vested right of a participant in a tender to have an

agreement of award concluded in its favour. There cannot be any

insistence for carrying on with the tender on the ground that a particular

participant was adjudged as the lowest tenderer. All that can be demanded

and be ensured to a tenderer is that he is given a fair, equal and non

discriminatory treatment in the matter of evaluation of his tender.

17. A decision to cancel the tender process can in no way be said to be

discriminatory or malafide if reasonable grounds are provided for

recalling the same. In matters of award of contracts, an employer or an

agency inviting the tender is required to act reasonably and fairly at all

points of time. To that extent, a tenderer can question the decision of the

employer in a Court of law but cannot be permitted to question the merits

of the decision.

18. The State derives its power to enter into a contract under Article

298 of the Constitution of India and has the right to decide whether to

enter into a contract with a particular person or not and whether to carry

on with the tender floated but such right is subject to the requirement of

reasonableness. The State or the Government agency inviting a tender

may find it inexpedient to carry on with the tender or may take a decision

of recalling the tender for one or more reasons. The only thing which is

required to be seen is whether the reason accorded for either of the

decisions is based on logic and the decision is not unfair.

19. A recall of a tender or a decision to re-tender cannot be called

arbitrary or discriminatory if good reasons are assigned for either.

20. In Maa Bindra Express Carrier and Anr v. North East Frontier

Railway and Ors: (2014) 3 SCC 760, the Supreme Court has reiterated

the principles enunciated in Tata Cellular v. Union of India: (1994) 6

SCC 651; Raunaq International Ltd v. I.V.R.Construction Ltd: (1999) 1

SCC 492; Jagdish Mandal v. State of Orissa: (2007) 14 SCC 517;

Michigan Rubber (India) Ltd v. State of Karnataka: (2012) 8 SCC 216;

Meerut Development Authority v. Association of Management Studies:

(2009) 6 SCC 171; Air India Ltd v. Cochin International Airport Ltd:

(2000) 2 SCC 617 and has held as hereunder:

"8. The scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by

a long line of decisions of this Court. While these decisions clearly recognise that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. So also, the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process.

9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the court which is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest."

21. Thus we find that there is a justification for recalling of the tender.

No force, now, remains in the petition. Consequently, it is dismissed.

CM 3136/2017

1. In view of the petition having been disposed of, the application has

become infructuous.

2. The application is disposed of accordingly.

ASHUTOSH KUMAR, J

BADAR DURREZ AHMED, J MARCH 02, 2017 k