M/S Plexus Constructions And ... vs The State Of Assam And 4 Ors
2022 Latest Caselaw 4966 Gua

                                                                Page No.# 1/9

GAHC010151062020




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

                         Case No. : WP(C)/4510/2020

         M/S PLEXUS CONSTRUCTIONS AND ENGINEERING PVT LTD
         REPRESENTED BY SRI RATUL GOSWAMI, AGED ABOUT 44 YEARS SON OF
         SRI BRINDABAN GOSWAMI RESIDENT OF 601B SHREE ENCLAVE,
         BELTOLA BAZAR ROAD, POLICE STATION BASISTHA GUWAHATI 781028,
         DIST KAMRUP M ASSAM


         VERSUS

         THE STATE OF ASSAM AND 4 ORS
         REP. BY THE COMMISSIONER AND SECY. TO THE GOVT. OF ASSAM, SKILL
         EMPLOYMENT AND ENTERPRENEURSHIP DEPTT., DISPUR, GUWAHATI-
         781006.

         2:THE DIRECTOR
          EMPLOYMENT AND CRAFTSMEN TRAINING
         ASSAM
          REHABARI
          GUWAHATI-781008.

         3:THE TENDER COMMITTEE
          IN CONNECTION WITH AGREEMENT NO.TENDER NO.DET/ESDI/TENDER-
         28/2020/367 DATED 12.08.2020 REP. BY THE DIRECTOR
          EMPLOYMENT AND CRAFTSMEN TRAINING
         ASSAM
          REHABARI
          GUWAHATI-781008.

         4:THE EXECUTIVE ENGINEER (I/C)
          CONSTRUCTION CELL
          EMPLOYMENT AND CRAFTSMEN TRAINING
         ASSAM
          REHABARI
          GUWAHATI-781008.
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           5:MUKIBUL BORBORA
            S/O. LT. NAZMAL BORBORA
            CARE OF PLANET DIGITAL
            JORHAT STADIUM MARKET
            P.O AND P.S -JORHAT
            JB COLLEGE ROAD
            DIST.- JORHAT
           ASSAM
            PIN- 78500

                                     BEFORE
                    Hon'ble MR. JUSTICE SANJAY KUMAR MEDHI

                               JUDGMENT & ORDER


Advocate for the petitioner     : Shri S. Banik, Advocate,
Advocates for the respondents : Shri S. P. Das, SC, S. E. & E

Department.

Date of hearing                 : 15.12.2022

Date of judgment                 : 15.12.2022

The issue involved in this case is rejection of the bid of the petitioner in respect of a tender process in spite of the fact that its bid was found to be the lowest (L1). The decision to reject contains certain reasons, the validity of which has been questioned and further the petitioner by terming those to be irrelevant and unjustified and further contending that there has been gross violation of the principles of natural justice.

2. Before going to the issue, the brief facts of the case can be narrated as follows.

3. The Directorate of Employment and Craftsmen Training, Assam had floated a tender dated 12.08.2020 for construction of class room building, approach road, Page No.# 3/9

electrification, water supply, sanitary installation etc. at ITI Jorhat under ESDI Scheme. The approximate value of the work was stated to be Rs.56,34,090.00 (Rupees Fifty Six Lakh Thirty Four Thousand Ninty) and the time of completion was stipulated at 8 months. The tender was at two bids system, namely, technical and financial.

4. It is the case of the petitioner that the bid submitted by the petitioner was found to be technically responsive alongwith another and therefore the financial bids were taken into consideration. In the financial bid, the bid of the petitioner was found to be Rs.50,70,680.64/-(Rupees Fifty Lakh Seventy Thousand Six Hundred Eighty and Sixty Four paisa) whereas that of the other bidder was found to be Rs.50,70,681.37/- (Rupees Fifty Lakh Seventy Thousand Six Hundred Eighty One and Thirty Seven Paisa) and therefore the was a difference of Rs. 0.73 (Seventy Three paisa). The contention of the petitioner is that whatever may be the difference, there is no manner of doubt that the bid offered by the petitioner was found to be the lowest (L1). However, the impugned minutes of meeting dated 06.10.2020 would disclose that the work was sought to be allotted to another bidder namely, the respondent No. 5 on the ground that the petitioner was allotted two other works earlier which the same could not be completed within the time stipulated and citing those reasons, a decision was taken to allot any work to the respondent No. 5. It is this decision of the respondents which is the subject matter of challenge in this writ petition whereby a further prayer has been made that the work be allotted to the petitioner on the strength of its bid being declared as L1.

5. I have heard Shri S. Banik, the learned counsel for the petitioner whereas the official respondents are represented by Shri S. P. Das. Though the private respondent No. 5 has been served, the said respondent No. 5 has chosen not to contest this writ petition.

6. This Court has further noticed that while the matter was moved on Page No.# 4/9

28.10.2020, this Court, while issuing notice had further directed that the work should not be proceeded and no Letter of Intent be issued. It is seen that the interim order has been extended from time to time and there is no dispute between the parties that the work has not been proceeded. At this stage, Shri Das, the learned Standing Counsel however submits that as a matter of fact, the Letter of Intent was issued on 14.10.2020 which was prior to the date of the interim order. However, in compliance with the said order, the work was not proceeded at all.

7. Shri S. Banik, the learned counsel for the petitioner has submitted that the reasons cited for depriving the petitioner from the work in spite of being adjudged as the lowest bidder are absolutely irrelevant and extraneous in the facts and circumstances of the case. The learned counsel submits that in the absence of any such stipulation in the tender conditions and having allowed to participate in the bid wherein the bid of the petitioner was also adjudged to be technically responsive, such reasons are absolutely arbitrary only to cause wrongful loss to the petitioner. The learned counsel for the petitioner has also referred to the affidavit of the respondents from which another aspect comes out. It appears that the respondents had taken the recourse of rounding off the bid amount and after such exercise they had come to a conclusion that there are two bids of the same value and on the consideration that the petitioner have failed to complete two earlier works, the work has been sought to be allotted to the respondent No. 5. The learned counsel submits that the initial exercise of rounding off being impermissible in law, the consequential action of bringing in the aspect of two earlier works is absolutely arbitrary and has caused legal prejudice to the petitioner. The learned counsel apprehends that the concept of rounding off bids would be available only after bid is adjudged as the L1 and such rounding off bid only to make it ranking compliance.

8. In support of his submission, Shri S. Banik, learned counsel relied upon a decision of the Hon'ble High Court of Odisha in the case of D. K. Engineering & Page No.# 5/9

Construction Vs State of Odisha & Ors. which was decided on 22.07.2016. In paragraph 16 of the aforesaid judgment, the following has been stated:-

"16. Applying the above principles to the present context, it appears that the authority having found, after opening of both technical and financial bids, the petitioner being the lowest bidder, subsequently could not have called for a report without giving notice and, as such, on the basis of the report furnished by the Executive Engineer (R&B), Kalahandi, the tender committee could not have taken a decision to disqualify the petitioner as per the ITB Clause 3.4(b) as well as Clause-108(b) and (d) of DTCN for past poor performance and inordinate delay in completion of previous works entrusted to it. Such action of the authority amounts to arbitrary and unreasonable exercise of power and violates Article 14 of the Constitution of India."

9. The aforesaid judgment has been cited to bring home the argument that without issuing notice on the so-called reasons for not granting the work to the petitioner on the ground of non-completion of earlier works, the same could not have been taken into account for taking the impugned decision.

10. Reliance has also been placed on a Division Bench decision of the Hon'ble High Court of Punjab and Haryana dated 19.02.2016 in the case of M/s High Tech. Security Services Vs State of Haryana & Ors. reported in 2016 SCC Online P & H 934 wherein it has been stated that the concept of rounding off could not be done to cause prejudice to a bidder. The relevant portion of the judgment is extracted herein below:-

"5. The decision of the respondents suffers from no infirmity. Rounding off a fraction may be resorted to where it is not clear the rounded figure on which side of the fraction must be taken to ascertain whether the minimum qualifying mark has been obtained or not. We will presume that where the criteria stipulates a mark without indicating that it is the minimum mark rounding off may or even ought to be resorted to. Thus, for instance if the eligibility criterion Page No.# 6/9

requires 50% in the written test and a candidate secures 49.50%, he would be considered as having met the criterion by rounding off to the higher number viz. 50%. If on the other hand, the fraction is less than 0.50 it would be rounded off to the lower number of 49%. However, where it is possible with arithmetic precision to ascertain whether or not the stipulated criterion is met the question of rounding off does not arise. The percentage was in respect of the service charge. The service charges are qua the entire charges. The same can easily be computed with mathematical precision. Accordingly, there was no reason for having considered the bid of 2.002% to be only 2%. This is not a case where a rounding off would be justified or even necessary. The monetary value of service charge at 2.002% is as easily computed as the monetary value of service charge at 2% or any other percentage. There is nothing in clause 12 that suggests that even a marginal amount over 2% towards the service charge cannot be considered to be a valid bid."

11. On the other hand, supporting the decision of the Department containing the minutes of meeting dated 06.10.2020, Shri Das, the learned Standing Counsel submits that the petitioner had in fact agreed for a rounding off and it is only after exercise that the bid of the petitioner was found to be at par that of the respondent No. 5. He further submits that the reasons assigned in the minutes are relevant and germane to the context as the petitioner had failed to complete two works under the same Department on earlier occasions and those factors cannot be termed as extraneous. He further submits that there is no mala fide as alleged by the petitioner, and action taken are absolutely bona fide and in the interest of public as the only objective of the Department is to get the work done in the best possible manner and as it involves immense public interest. Shri Das has further submitted that as per Clause 256 of the Assam Financial Rules, discretion is left to the authority regarding acceptance of the L1 bid and therefore there is justification in not accepting the bid of the petitioner.

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12. The rival submissions of the learned counsel for the parties have been duly considered and the materials placed before this Court have been carefully examined.

13. The NIT dated 12.08.2020 stipulates that the same would be a two bids systems, namely, technical and financial bids. In the technical bid, the authorities are empowered either to accept or reject the bid after examining whether the bidder is technically qualified to submit the bid and while doing so, the authorities can look into past performance. However, in the instant case, the bid of the petitioner was found to be technically responsive which gives an idea that it is only on the aspect of the financial competitiveness that the work would be given to the L1 bidder. On the opening of the financial bids, the bid of the petitioner was found to be L1 which is not in dispute. What transpires is that the Department had taken recourse to the exercise of rounding off the bids. The attention of this Court has also been drawn to the averments made in the affidavit of the Department wherein it has been stated that the petitioner had consented to such rounding off.

14. However, this Court finds force in the contention of Shri Banik, the learned counsel for the petitioner that the entire exercise of rounding off, even assuming that the consent was given, would come only after a bid is adjudged as the L1 and not before that. In the instant case, it however appears that rounding off of the bids have been done even before the stage of adjudging a bid as L1. This Court has also accepted the submission made on behalf of the petitioner that such rounding off cannot be to the prejudice of the bid of any party as it is the financial competitiveness which is to be decided, as the entire object of having a financial bid evaluation is to find out which is the lowest bid and that objective is only in consonance with the public interest wherein transparency and fairness are the hallmarks in matters of distribution of State largesse.

15. With regard to the submission of the learned Standing Counsel on the Page No.# 8/9

applicability of Clause 256 of the Assam Financial Rules, there is no dispute that discretion is vested upon the authorities not to grant a work to a lowest bidder. However, such discretion is required to be exercised in a judicious manner wherein only relevant factors are to be taken into consideration and not on extraneous or irrelevant one.

16. In the instant case, it appears that the rounding off the bids of the petitioner and the respondent No. 5 has caused immense legal prejudice to the petitioner as his bid though was lower than that of the respondent No. 5 with a difference of Rs.0.73 (Seventy Three paisa), the bid of the petitioner was made at par with the only other bidder and therefore there was no L1 as such as both the bids were made at par. The said exercise, in the considered opinion of this Court is alien to the process of distribution of State largesse and accordingly cannot be held to be legal. Though the difference between the bids may not be of a substantial amount but it is not the amount of difference but the concept of being the lowest bidder which is material in a tender process.

17. With regard to the reasons cited of non-completion of earlier works given to the petitioner, generally reasons of those nature may not be held to be absolutely irrelevant and extraneous but what would necessarily follow is as to whether the petitioner was afforded a notice or opportunity before such reasons were cited and in the instant case such notice or opportunity are apparently absent. This Court, in approval of the ratio cited by the Hon'ble High Court of Orissa, is of the opinion that unless such notice is given to the aggrieved party affording an opportunity, such reasons cannot be cited to cause prejudice at the stage of grant of the contract.

18. As observed above, the work has not proceeded and admittedly, the same is of immense public interest.

19. In view of the same, while allowing this writ petition by setting aside the Page No.# 9/9

impugned action of holding the bid of the petitioner to be non-responsive, this Court directs that the work to be allotted to the petitioner whose bid is L1 strictly in accordance with law. Since the NIT is of the year 2020, it is expected that the work to be allotted without any further delay and in any event within an outer limit of 45 days from today.

20. Accordingly, the writ petition stands allowed.

JUDGE

Comparing Assistant