Gunj Associates vs The State Of Assam And 5 Ors
2021 Latest Caselaw 2834 Gua

                                                                   Page No.# 1/12

GAHC010261232018




                       THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                        Case No. : WP(C)/8166/2018

         GUNJ ASSOCIATES
         REP. BY VIKASH BAID, S/O- LATE HEMRAJ BAID, R/O- WARD NO. 10,
         MAROWARI PATTI, NAGAON, ASSAM, PIN- 782001



         VERSUS

         THE STATE OF ASSAM AND 5 ORS
         REP. BY THE COMMISSIONER AND SECRETARY TO THE GOVT OF ASSAM,
         DEPTT OF FISHERIES, DISPUR, GUWAHATI- 781006

         2:THE JOINT SECRETARY
          FISHERY DEPTT
         ASSAM
          DISPUR
          GUWAHATI- 06

         3:THE DIRECTORATE OF FISHERIES
         ASSAM HAVING ITS OFFICE AT GUWAHATI- 16
         ASSAM

         4:THE EXECUTIVE ENGINEER
          DEPTT OF FISHERIES
         ASSAM
          GHY- 16

         5:THE DEPUTY COMMISSIONER
          MORIGAON
          DIST- MORIGAON
         ASSAM
          PIN- 782105

         6:M/S UCN CONSTRUCTION CO PVT LTD
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             R K PATH
             ITACHALI
             NAGAON
             PIN- 78200

Advocate for the Petitioner   : MR. B RAHMAN

Advocate for the Respondent : GA, ASSAM




                                     BEFORE
                    HONOURABLE MR. JUSTICE MANISH CHOUDHURY

                                             JUDGMENT

Date : 12-11-2021

This writ petition under Article 226 of the Constitution of India has been preferred by the writ petitioner seeking inter alia setting aside of the impugned work order dated 15.10.2018 issued by the respondent no. 3 i.e. the Director of Fisheries, Assam in favour of the respondent no. 6. A further direction has been sought for to award of the contract work published by a Detail Notice for Re-Invitation for Bids dated 10.05.2018 in favour of the petitioner contending that the bid of the petitioner was responsive on all aspects.

2. In order to appreciate the contentions raised by the writ petitioner, it would be apposite to narrate the background facts, in brief, leading to the institution of the writ petition.

2.1 The respondent no. 3 i.e. the Director of Fisheries, Assam published a Press Notice dated 10.05.2018. Simultaneous to the Press Notice, a Detail Notice for Re-Invitation for Bids ['the NIT', for short] was also published on 10.05.2018 inviting e-tenders from eligible contractors of appropriate category, prescribed therein, for the work of "Renovation of Padum Pukhuri Fish Seed Farm, Morigaon under RIDF-XXI for 2016-2017" ['the contract-work', for short]. When the Press Notice/NIT was initially published, the estimated cost of the work was mentioned as Rs. 1,11,33,365.00. Later on, by a Corrigendum dated 28.05.2018, the estimated cost of the work was modified and enhanced to Rs. 1,15,57,298.93. The bidders were asked to submit their bids on-line in the e-procurement portal website, www.assamtenders.gov.in. As per the NIT, on-line mode of submission of technical bid and Page No.# 3/12

financial bid was mandatory. Apart from on-line submission of the bids, the bidders were also asked to submit hardcopies of their technical bids to the tendering authority. As per the bid document, a pre-bid meeting was scheduled before the last date of submission of the bids. It was stipulated in Clause 5 of the NIT that the tendering authority would not accept rate/amount quoted by any bidder which is lower than 10% below the estimated cost to avoid poor quality of work/abandoning of work by the contractor.

2.2 In so far as the NIT dated 10.05.2018 is concerned, the petitioner considered himself to be eligible and qualified to participate in the competitive bidding process as per the modalities prescribed in the bid document which he had procured. In the competitive bidding process so initiated by the said NIT, a total of 10 [ten] nos. of bidders participated. After expiry of the last date of submission of the bids, the technical bids of the participating bidders were opened on 06.06.2018. After opening of the technical bids, the technical bids were scrutinized and a statement about the technical bids was prepared and presented before the tender committee constituted for the purpose of evaluation of the technical bids. The tender committee held its meeting on 30.07.2018 in the office of the respondent no. 3 and after discussion, the tender committee had formulated a number of criteria for detailed evaluation of the technical bids. After formulating the criteria, the tender committee evaluated the technical bids of the participating bidders and declared 4 [four] nos. bids out of the 10 [ten] bids as technically qualified. The bids of the petitioner, the respondent no. 6 and two other bidders were declared technically qualified. Thereafter, the tender committee decided to open the financial bids of the 4 [four] technically qualified bidders on 04.08.2018. After having been technically qualified, the petitioner was expecting that at the stage of financial bid evaluation, he would emerge successful as he had quoted a competitive price for the contract-work.

2.3 On 15.10.2018, the tendering authority issued a formal work order for the contract- work in favour of the respondent no. 6 at its bid value of Rs. 1,04,01,569.04 which was declared to be 9.99% below the estimated cost. With the issuance of the formal work order, the respondent no. 6 was asked to sign the contract agreement by furnishing performance security deposit and additional performance security deposit.

3. Aggrieved by the rejection of its financial bid and award of the contract-work in favour Page No.# 4/12

of the respondent no. 6, the petitioner has preferred this writ petition with the prayers, mentioned above.

4. Heard Mr. P.K. Roy Choudhury, learned counsel for the petitioner; Mr. D. Nath, learned Senior Government Advocate for the respondent nos. 1 - 5; and Mr. N. Narzary, learned counsel for the respondent no. 6.

5. Mr. Roy Choudhury, learned counsel for the petitioner has made three-fold submissions. Firstly, out of the 4 [four] technically qualified bidders, the bid value offered by the petitioner was the lowest. Thus, the petitioner emerged as L-1 bidder in the competitive bidding process initiated by the NIT and in such situation, the contract-work ought to have been awarded to the petitioner. Secondly, the bid of the respondent no. 6 was deficient in terms of Clause 16 of the additional special conditions of contract, annexed to the bid document. By referring to a part of the tender papers submitted by the respondent no. 6, annexed at page nos. 129 - 138 of the case papers, he has submitted that those pages which were the part of the bid of the respondent no. 6 were not signed/self-attested by the authorized representative of the respondent no. 6. It is his submission that in view of such non-signing/attestation, the bid of the respondent no. 6 entailed rejection summarily. Thirdly, during the financial bid evaluation stage, the bid of the petitioner was not considered though he was declared as technically qualified. In the BOQ summary details uploaded in the website, the bid values of only 3 [three] bidders sans the petitioner, were shown. He has, thus, submitted that the petitioner had been treated in an arbitrary, discriminatory and unfair manner.

6. Mr. Nath, learned Senior Government Advocate for the respondent nos. 1 - 5 opposing the above contentions made on behalf of the petitioner, has submitted that though the bid value offered by the petitioner was the lowest [L-1] out of the 4 [four] technically qualified bidders but his bid was not responsive to the terms and conditions laid down in the bid document. He has submitted that the bid of the petitioner was not the lowest valid bid. In so far as the second contention advanced on behalf of the petitioner is concerned, Mr. Nath has submitted that the tender committee, in its meeting held on 30.07.2018, had formulated certain criteria which were mentioned in the minutes of the meeting itself. The tender committee had decided that if most of the pages of the bid submitted by a bidder were Page No.# 5/12

signed by the bidder himself, then the same would be considered for evaluation. It is his submission that the said criterion was specified in the minutes of the meeting. The petitioner was aware of the said criterion which had been decided in the minutes of the meeting of the tender committee held on 30.07.2018 and despite knowing the same, he had chosen not to raise any objection but to accept the same. In view of his not raising any objection to the said criterion for evaluation until the issuance of the impugned work order, the petitioner is precluded from challenging the work order issued in respect of the respondent no. 6 at a subsequent stage on such grounds. With regard to the documents at page nos. 129 - 138 of the case papers, Mr. Nath has submitted that those documents were part of the bid of the respondent no. 6. All those documents were attested by the Assistant Executive Engineer, Bakalia Sub-Division [Irrigation], Bakalia, Karbi Anglong, who is a Gazetted Officer, under his seal and signature. Though these documents did not bear the signature of the bidder the fact of such attestation under the seal and signature of the Gazetted Officer of the Irrigation Department was a relevant fact towards responsiveness of the bid as such attestation had affirmed the documents to be genuine, thus, making the bid substantially responsive. Mr. Nath has also submitted that during the financial bid evaluation stage, bid values of only three bidders were found responsive to the criteria laid down in the NIT and the bid document. The petitioner's bid value was not found responsive to the NIT and the bid document and his financial bid was considered but it was found lower than 10% below the estimated cost. In the BOQ summary details, the petitioner's details were not uploaded due to inadvertence. That cannot, by any means, amount to arbitrary, discriminatory and unfair treatment, Mr. Nath has submitted..

7. Mr. Narzary, learned counsel for the respondent no. 6 has adopted the submissions of Mr. Nath, learned Senior Government Advocate. Additionally, he has submitted that after issuance of the work order, the respondent no. 6 proceeded to execute the work forthwith. As per the physical progress report as on 30.11.2018, the respondent no. 6 had already executed 41.47% of the work against 4 [four] items. As the respondent no. 6 had proceeded with the contract-work and executed a substantial part of it, no interference is called for at this stage in respect of the work-order issued in favour of the respondent no. 6, he submits.

8. I have considered the submissions of the learned counsel for the parties and also Page No.# 6/12

considered the materials brought on record by the parties through its pleadings. Mr. Nath, learned Senior Government Advocate has also placed the record of the tender process for perusal.

9. In so far as the first submission of the petitioner is concerned, it is found that in Clause 5 of the NIT, it was specifically laid down that the tendering authority would not accept rate/amount quoted by any bidder which was lower than 10% below the estimated cost to avoid poor quality of work and abandoning of work by the contractor. It is not the case of the petitioner that he was not aware of the said condition at the time of submission of his bid. The petitioner had quoted the bid value at Rs. 99,01,847.17. The bid value offered by the other three technically qualified bidders were :- (i) M/s G.B. Construction - Rs. 1,01,27,467; (ii) Sri Ramendra Kr. Bhuyan - Rs. 1,04,01,569.04; and (iii) M/s UCN Construction Company Pvt. Ltd. [respondent no. 6] - Rs. 1,04,01,569.04. It is noticed that both Ramendra Kr. Bhuyan and the respondent no. 6 had quoted the same bid value. The petitioner had quoted his bid value at Rs. 99,01,847.17 which was 14.324% below the estimated cost. On the other hand, the bids offered by the Ramendra Kr. Bhuyan and the respondent no. 6 were 9.999% below the estimated cost. The bid value quoted by M/s G.B. Construction at Rs. 1,01,27,467.92 was 12.372% below the estimated cost. Thus, as per Clause 5 of the NIT, the bid values of the petitioner and M/s G.B. Construction were lower than 10% below the estimated cost. The tendering authority had mentioned the reason for fixing such a range in Clause 5 of the NIT itself. The reason for fixing such a range, according to the tendering authority, was to avoid poor quality of work and abandonment of work by the contractor. As the bid value of the petitioner was more than 10% below the estimated cost, his bid was rejected at the financial bid evaluation stage. As the decision making process adopted by the tendering authority in rejecting the bid of the petitioner is found in adherence to the terms and conditions laid down in the NIT and the bid document, the decision arrived at by the tendering authority not to accept the financial bid of the petitioner cannot be said to be arbitrary, discriminatory and unjustified as the financial bid of the petitioner is evidently non-compliant to Clause 5 of the NIT. As such, the first contention advanced on behalf of the petitioner is not merited.

10. In the minutes of the meeting of the tender committee held on 30.07.2018, also Page No.# 7/12

uploaded in the website, the tender committee made the following decisions :-

"After threadbare discussion the Tender Committee has decided to consider the following criteria as adequate namely (i) submission of bid documents and technical documents where most of the pages are signed by bidder, (ii) submission of profit & loss statement as per audited balance sheets for three years or more, (iii) submission paper of acceptance of dispute review expert without the name of the expert etc. for settlement of the tender process as the instant tender is for the third time and considering the paucity of working time due to rainy season. The committee henceforth decided to open their financial bids on 4 th August, 2018 to be notified through the e-portal "assamtenders.gov.in"."

11. There is no whisper in the writ petition that the petitioner was not aware of the criterion set forth by the tender committee for evaluation of the bids of the bidders submitted in response to the NIT dated 10.05.2018. As the petitioner had emerged as a technically qualified bidder along with 3 [three] other bidders, it transpires that the petitioner had chosen not to make any challenge to the criterion decided by the tender committee with regard to acceptance of a bid where most of the pages were signed by the bidder. The petitioner appeared to have waited for the outcome of the financial bid evaluation being confident of its bid value, which itself was no-compliant to the tender and conditions of the NIT/bid document, and it was only after the financial bid evaluation stage, he decided to make assailment on the grounds that declaration of the petitioner's bid as non-responsive as its bid value was lower than 10% below the estimated cost is untenable and the technical bid of the respondent no. 6 was deficient. In view of the same, the petitioner is precluded from challenging the award of work granted in favour of the respondent no. 6 at a belated stage, that too, after the criterion framed prior to evaluation of the technical bids of the bidders and after the award of work to the successful bidder with the evaluation of the financial bids of the technically qualified bidders.

12. The financial bid evaluation committee held its meeting at the office of the tendering authority i.e. the respondent no. 3 on 05.10.2018 and the minutes of the said meeting reads as under :-

"After minute observation and threadbare discussion & considering the condition set in the bid document regarding non acceptance of rate/amount quoted by any bidder Page No.# 8/12

which is lower than 10% below the estimated cost to avoid poor quality of work/abandoning of work by the contractor, the committee has decided to reject two bidders viz. M/s Gunj Associates and M/s G.B. Construction in Package-D and accordingly the committee has decided to award the work to the responsive bidder Mr. Biju Dutta who has quoted 9.99% below the estimated cost in case of Package-B. In case of Package-D there are two responsive bidders viz. UCN Construction Company Pvt. Ltd. and Sri Romendra Kr. Bhuyan who have quoted same rate i.e. @ 9.999% below the estimated cost and hence the committee has decided to award work the bidder who has more Financial Turnover. It is found that the total Financial Turnover of UCN Construction Company Pvt. Ltd. is Rs. 22154.76 lacs and that of Sri Romendra Kr. Bhuyan is Rs. 777.35 lacs. Accordingly, the Tender Committee has selected UCN Construction Company Pvt. Ltd. to award with the contract who has more turnover than his counterpart."

13. The minutes of the meeting of the financial bid evaluation committee was also uploaded in the official website immediately thereafter. From the minutes of the meeting of the financial bid evaluation committee, it is noticed that the financial bid of the petitioner was considered by the Financial Bid Evaluation Committee. The tendering authority, in its affidavit- in-opposition, has averred that non-reflection of the name of the petitioner in the BOQ summary details might be due to some clerical or typographical error. From the minutes of the Financial Bid Evaluation Committee, it is noticed that the bid of the petitioner was not excluded from consideration and it was only after consideration, the financial bid of the petitioner was rejected for the reason already indicated above. As such, the contention of the petitioner advanced as regards non-reflection of his name in the BOQ summary details does not have any basis for consideration since for that reason no prejudice has been caused to the petitioner.

14. The Hon'ble Supreme Court of India in Raunaq International Ltd. vs. I.V.R. Construction Ltd. and others, reported in [1999] 1 SCC 492 has observed as under :-

"9. 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 of paramount importance are commercial considerations. These would be:

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(1) the price at which the other side is willing to do the work; (2) whether the goods or services offered are of the requisite specifications; (3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality;

(5) past experience of the tenderer, and whether he has successfully completed similar work earlier;

(6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow-up action, rectify defects or to give post-contract services.

Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.

10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work

- thus involving larger outlays or public money and delaying the availability of services, facilities or goods, e.g. a delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation.

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11. When a writ petition is filed in the High court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers."

15. The Hon'ble Supreme Court of India has considered the aspect of judicial review of administrative action in Jagdish Mandal vs. State of Orissa and others, reported in [2007] 14 SCC 517 and has observed 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 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 Page No.# 11/12

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."

16. It is settled proposition of law that the Constitutional court can examine the decision- making process and interfere with the process if it is found to be vitiated by mala fide , unreasonableness and arbitrariness. An administrative decision itself is not amenable to judicial review. It is settled even when some defect is found in the decision-making process, the Constitutional court must exercise its discretionary jurisdiction under Article 226 of the Constitution of India with great caution and utmost restraint and should exercise it only in furtherance of public interest. The court has to keep the larger public interest in mind in order to decide whether any interference under its discretionary jurisdiction is necessitated or not. It is only when the court finds that the public interest likely to be suffered is substantial then only it should interfere. In the case in hand, the decision not to award the contract-work to any bidder who quoted a bid value lower than 10% below the estimated cost was taken by the tendering authority by specifying a reason and a range which were notified in the NIT itself. The petitioner was well aware about the said condition and despite knowing existence of such a condition, the petitioner had preferred to quote his bid value lower than 10% below of the estimated cost without mounting any challenge to the said criterion and at his risk and peril.

17. In respect of the case in hand, the answers to the twin questions, as mentioned in Page No.# 12/12

Jagdish Mandal [supra], are not found in the affirmative so as to call for any interference. Moreover, the respondent no. 6 is found to have proceeded with the contract-work forthwith and completed a part of the contract-work. Any interference at this stage will be against public interest and will entail higher financial outlay. In view of the above discussion and in the light of the position emanating from the decisions mentioned above, I find no merit in this writ petition and accordingly, the same is dismissed. The interim order dated 28.11.2018 stands recalled. There shall, however, be no order as to cost.

JUDGE

Comparing Assistant