Page No.# 1/12 vs The State Of Assam And 5 Ors
2022 Latest Caselaw 2535 Gua

                                                                   Page No.# 1/12

GAHC010065982022




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

                        Case No. : WP(C)/2404/2022

         CANARA LIGHTING INDUSTRIES PVT LTD AND ANR
         HEAD OFFICE AT MULKY-KINNIGOLI, AIRPORT ROAD, MANGALORE,
         574150, INDIA, REP. BY SHRI SARATHI BIKASH GHOSH, AGE- 29 YEARS,
         ENGINEER MARKETING (NORTH EAST REGION).

         2: INTEGRATED DIGITAL SOLUTION PVT. LTD.
          OFFICE AT 3RD FLOOR
          3C
          GREEN VIEW APARTMENTS
          1151/3
         WARD NO. 8
          MEHRAULI
          SOUTH DELHI
          PIN-1103

         VERSUS

         THE STATE OF ASSAM AND 5 ORS
         REP. BY THE CHIEF SECRETARY CUM CHAIRMAN OF GUWAHATI SMART
         CITY LIMITED, DISPUR, GUWAHATI-6, ASSAM

         2:THE MANAGING DIRECTOR

          GUWAHATI SMART CITY LIMITED

         4TH FLOOR
         ADITYA TOWER
          OPP DOWN TOWN HOSPITAL
          G.S. ROAD
          GUWAHATI-6
         ASSAM

         3:PRINCIPAL SECRETARY
                                                                          Page No.# 2/12

             DEPARTMENT OF HOUSING AND URBAN AFFAIRS
             DISPUR
             GUWAHATI-6.

            4:THE CHIEF ENGINEER (T)

             DEPARTMENT OF HOUSING AND URBAN AFFAIRS
             ASSAM
             55 RAJGARH ROAD
             GUWAHATI-3.

            5:INNOVATIVIEW
             REP. BY TANKIT AGARWAL
             OFFICE AT SECOND FLOOR
             37
             SHANTI VIHAR
             KARKARDOOMA
             EASTDELHI
             DELHI- 110092

            6:RIPPLES ENGINEERING PVT. LTD.
             C-119
             PHASE- 2
             NOIDA
             UTTAR PRADESH-20130

Advocate for the Petitioner   : MR. D DAS SR. ADV

Advocate for the Respondent : SC, GUWAHATI SMART CITY LTD.

BEFORE HONOURABLE MR. JUSTICE SUMAN SHYAM

Date of hearing : 27.07.2022.

Date of judgment :            28.07.2022.


                                JUDGMENT & ORDER (Oral)

Heard Mr. D. Das, learned senior counsel assisted by Mr. K. Talukdar, learned

counsel appearing for the writ petitioners. Also heard Mr. D. Saikia, learned Advocate Page No.# 3/12

General, Assam assisted by Mr. S. Bora, learned counsel for the respondent Nos.1 to 4

and Mr. Raj Kamal along with Mr. Anurag Chandra and Ms. P. Baruah, learned

counsel appearing for the respondent Nos.5 and 6.

2. The petitioner Nos.1 and 2 have approached this Court assailing the LoI dated

23.03.2022 issued by the respondent authority viz., Guwahati Smart City Limited

(GSCL) in favour of the Joint Venture (JV) of respondent Nos.5 and 6 awarding the

contract in question. The facts and circumstances of the case giving rise to the filing

of this writ petition may be briefly noticed as follows.

3. The GSCL had floated an NIT dated 31.12.2021 inviting bids for awarding the

contract viz., "Concept, Design, Supply, Installation, Testing and Commissioning of

Permanent Decorative Lighting, Musical Sprays, Multifaceted Spectacle on Turnkey

Basis with Operation & Maintenance for 3 years period at Srimanta Sankardev

Kalakshetra, Guwahati (Assam)". The estimated cost of the project was shown as 12

crores and the date of submission of tender was fixed on 21.01.2022, which was later

extended upto 27.01.2022. In response to the NIT dated 31.12.2021 the petitioner

Nos.1 and 2 herein, as a Joint Venture, had submitted their bid. Likewise, the

respondent Nos.5 and 6 had also formed a Joint Venture and submitted their bid in

response to the NIT dated 31.12.2021. The tender was to be considered in two parts

viz., technical and financial bid. Upon opening the bids submitted by the parties both

the bidders were found to be technically qualified. The financial bid of the JV of the

writ petitioners was also found to be the lowest. As such, Letter of Intent (LoI) dated

02.03.2022 was issued in favour of the writ petitioners awarding the contract to them.

Page No.# 4/12

However, on the very next day i.e. on 03.03.2022 the respondent No.2 had issued an

order keeping the said LoI in abeyance. Subsequently, on 07.03.2022, the NIT was

cancelled and thereafter, a re-tender notice for the same work was issued on

08.03.2022. In response to the NIT (re-tender) dated 08.03.2022 the JV of the

petitioners as well as the respondent Nos.5 and 6, besides another bidder viz., Modern

State Services had submitted their tenders. Upon opening the technical bids, the bid

submitted by the writ petitioners JV as well as the JV of the respondent Nos.5 and 6

were both found to be technically valid whereas the technical bid of the 3 rd bidder

viz. Modern State Services was rejected on technical ground. Thereafter, the financial

bids were opened and it was found that the JV of the writ petitioners had quoted an

amount of Rs.8,60,01,164/- whereas the JV of the respondent Nos.5 and 6 had quoted

an amount of Rs.8,28,21.470/-. Consequently, the price bid of the JV of the

respondent Nos.5 and 6 was assessed to be the L 1 bidder and the LoI dated

23.03.2022 was issued in their favour awarding the contract.

4. The decision of the respondent No.2 in issuing the LoI dated 23.03.2022 in

favour of the JV of respondent Nos.5 and 6 has been assailed in this writ petition

primarily on the ground that in respect of Item No.1.75 of the Bill of Quantities (BoQ) in

the Request For Proposal (RFP) pertaining to the financial bid the respondent Nos.5

and 6 had not quoted any rate and had left the same blank. According to the writ

petitioners, by failing to quote any price against Item No.1.75 of the BoQ and by

leaving the space blank, the JV of respondent Nos.5 and 6 have deviated from the

standard instructions for submitting financial bid as laid down in RFP. It is the case of Page No.# 5/12

the writ petitioners that due to their failure to quote any figure against Item No.1.75 of

BoQ, the financial bid submitted by the JV of respondent Nos.5 and 6 was defective

and hence, ought to have been rejected by the respondents. The petitioners have,

therefore, approached this Court with a prayer to set aside the LoI dated 23.03.2022

issued in favour of the JV of the respondent Nos.5 and 6 and to issue a writ of

mandamus directing the respondent No.2 to issue the LoI in favour of the JV of the

writ petitioners.

5. By referring to the materials available on record, more particularly Clause 2.26

read with format of financial bid contained in Annexure-VIII of the RFP, Mr. Das,

learned senior counsel for the writ petitioners has strenuously argued that in view of

the specific conditions laid down in the RFP it was not permissible for the respondent

Nos.5 and 6 to leave the entry against Item No.1.75 of the BoQ blank. According to

Mr. Das, by quoting 0.00 against Item No.1.75 the JV of respondent Nos.5 and 6 have

failed to indicate any price against the aforesaid Item. In that view of the matter, the

financial bid submitted by the JV of respondent Nos.5 and 6 was evidently defective

and hence, liable to be rejected. However, instead of doing so, the respondents

have arbitrarily and illegally accepted the price bid of the successful bidder which

has resulted into serious prejudice to the interest of his client. Mr. Das has further

argued that even the representation submitted by his client on 23.03.2022 has not

been considered by the respondent No.2 till date.

6. By contending that once the terms and conditions of the NIT is published the

same is equally binding upon the employer, Mr. Das has placed reliance on two Page No.# 6/12

decisions of the Supreme Court viz., an unreported decision rendered in the case of

Union of India & Ors. Vs. Mahendra Singh in Civil Appeal No.4807/2022 as well as the

decision in the case of Central Coalfields Limited and another vs. SLL-SML (Joint

Venture Consortium) and others reported in (2016) 8 SCC 622 to submit that the

respondent authorities ought to have scrupulously adhered to the terms and

conditions of the RFP while assessing the financial bid.

7. Mr. D. Saikia, learned Advocate General, Assam appearing for the official

respondents, on the other hand, submits that the JV of the writ petitioners as well as

the respondent Nos.5 and 6 having been found to be technically valid and the price

quoted by the successful bidder being Rs.31,79,694/- lesser than the price quoted by

the JV of the writ petitioners, the bid of the JV of respondent Nos.5 and 6 was

accepted as the L1 bidder. Since the L1 bidder had the requisite qualification to

execute the work and considering the lower price quoted by them a decision was

taken by the respondent No.2 in public interest to issue the LoI in favour of the JV of

respondent Nos.5 and 6. Mr. Saikia has also pointed out that in the affidavit-in-

opposition filed by the official respondents it has been clearly mentioned that the

figure mentioned against Item 1.75 of the price bid was not blank but it did contain a

numerical figure i.e. 0.00 and therefore, the allegation made in the writ petition is

totally baseless. Mr. Saikia further submits that the decision making process leading to

the issuance of the LoI in favour of the successful bidder is transparent and based on

rationale criteria. As such, there is no scope for this Court to interfere with the said

decision in exercise of power of judicial review under Article 226 of the Constitution of Page No.# 7/12

India.

8. Mr. Raj Kamal, learned counsel for the respondent Nos.5 and 6, has supported

the arguments advanced by Mr. Saikia and has further argued that the writ

petitioners do not have any locus standi to challenge the LoI dated 23.03.2022 issued

in favour of his clients as the JV of respondent Nos.5 and 6 were evidently the lowest

bidder. By referring to the decision of the Supreme Court rendered in the case of

Bharat Coking Coal Ltd. and others Vs. AMR Dev Prabha and others reported in 2020

SCC OnLine SC 335 as well as in the case of Jagdish Mandal vs. State of Orissa

reported in (2007) 14 SCC 517 Mr. Kamal has argued that the in a matter of

commercial contracts the Court has to examine the decision making process and not

the soundness of the decision itself. Since the decision to issue the LoI in favour of the

respondent Nos.5 and 6 is based on reasonable criteria, there is no justifiable ground

for this Court to interfere in the matter.

9. I have considered the arguments advanced by the learned counsel for both

the sides and have also gone through the materials available on record.

10. In so far as the cancellation of earlier NIT, revocation of LoI dated 02.03.2022 as

well as issuance of re-tender notice dated 08.03.2022 is concerned, the same are not

under challenge in this proceeding. Therefore, it would not be necessary for this Court

to go into said aspects of the matter.

11. Coming to the basic challenge made in the writ petition, a plain reading of

the RFP makes it very clear that it was a composite contract which was required to

be executed by the successful bidder on turnkey basis and even the operational Page No.# 8/12

maintenance for a period of three years was to be taken care of under the same

contract agreement. The NIT evidently did not envisage quoting of item-wise rate of

each component of work. Under the scheme of the tender, the price quoted by the

bidders was to be considered on the total amount quoted and not on the basis of

each item. There is no dispute in this case that the price quoted by the JV of

respondent Nos.5 and 6 was lower than that quoted by the JV of petitioner Nos.1 and

2. Therefore, the JV of respondent Nos.5 and 6 was the L 1 bidder. Since both these

bidders have been adjudged to be technically qualified, hence, this Court is of the

opinion that the authorities were fully justified in issuing the LoI in favour of the L 1

bidder i.e. the JV of respondent Nos.5 and 6 in this case.

12. Coming to the arguments advanced by Mr. Das, it is to be noted herein that

the JV of respondent Nos.5 and 6 has mentioned 0.00 against Item 1.75 of the BoQ.

According to the successful bidder, Item 1.75 was the heading whereas Item 1.76 to

1.92 are the individual items in respect of which separate rates had been quoted.

Since the learned counsel for the petitioners has placed heavy reliance on Clause

2.26 of the RFP to argue that the financial bid of the JV of respondent Nos.5 and 6

was defective, I deem it appropriate to extract the said clause herein below for

ready reference :-

"2.26 All rates shall be quoted in tender form and shall include all material, labor, transportation; all taxes, duties, testing, commissioning, supervision, tools, plants, wastage, sundries, scaffoldings, as required mobilization, demobilization, transportation etc. and nothing extra shall be payable on any account."

Page No.# 9/12

13. Further, Section 14 contained in Part-III (Financial Bid) in Clause (f) lays down

that the bidders have to indicate the price of individual component as listed in the

Annexure VIII of financial bid for evaluation of post project cost in case of any

deviation during the execution of the contract. Annexure-VIII of the document further

indicates that all bidders should indicate the total cost "inclusive of all taxes" etc. A

conjoint reading of the aforementioned stipulations contained in the RFP clearly

indicates that unless the price is quoted by the bidder in the financial bid, which

should be inclusive of all taxes, it cannot claim such amount after execution of the

contract. There is nothing in the RFQ which mandates that the bidder must quote the

rates in a particular form.

14. It is to be borne in mind that the bidders in a contract of this nature are

accomplished business people and are well versed with the criteria for quoting a

price in the financial bids. Therefore, rival party cannot dictate as to how a particular

bid document is to be filled up by a bidder. Once a tender document lays down the

criteria to be followed while submission of bid, the same would have to be strictly

adhered to by the employer. However, it would be upto the employer to decide and

arrive at a satisfaction if all the requisite information has been furnished by the bidder

as called for by the tender document and it is not for the Court to decide on such

matters. Assuming that the JV of respondent Nos.5 and 6 have failed to quote any

rate as against Item 1.75 by mentioning 0.00 against the said entry, even then, the

worst consequence that may ensue upon them as per the relevant clause of RFP

would be that the contractor cannot claim any amount against the said item after

the execution of the work and no further. However, the same cannot, in the opinion Page No.# 10/12

of this Court, lead to the conclusion that the financial bid submitted by the JV of

respondent Nos.5 and 6 was defective warranting rejection of the same.

15. In the case of Jagdish Mandal (supra) the Hon'ble Supreme Court has

elaborately dealt with the scope of judicial review of administrative action of the

State in matter of awarding a contract. The observations made in paragraph 22 of

the said decision would be relevant in this case and therefore, is reproduced herein

below for ready reference :-

"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. 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 is 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 interference, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase Page No.# 11/12

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."

16. By following the decision in the case of Jagdish Mandal (supra) the Supreme

Court in the case of Central Coalfields Limited and another (supra) has laid down the

principles which would be applicable in case of deviation from the essential terms of

NIT. That was a case where one of bidders had failed to furnish a bank guarantee as

per the prescribed format which was one of the essential condition for submission of

bid. In the said decision the Supreme Court has observed that the essential conditions

of the NIT must be adhered to and it is for the employer to decide as to whether a

term of the NIT is essential or not. By placing heavy reliance on the aforesaid decision

Mr. Das has prayed for interference by this Court in the present case. It must be noted

herein that the above was a case where there was a deviation from the essential Page No.# 12/12

conditions of the contract which relates to the eligibility criteria. It was in such fact

situation the observations were made by the Apex Court. In the present case, this

Court does not find any deviation from the essential conditions of the NIT.

17. Applying the law laid down in the case of Jagdish Mandal (supra) and Central

Coalfields Limited and another (supra) I do not find any deviation in the tender

conditions laid down in the RFP which can be treated to be sufficient so as to hold

that the financial bid of respondent Nos.5 and 6 was defective.

18. For the reasons stated above, I am of the view that there is no merit in this writ

petition. The same is accordingly dismissed.

The interim order passed earlier shall stand vacated.

The parties to bear their own costs.

JUDGE

T U Choudhury

Comparing Assistant