Gauhati High Court
WA/328/2021 on 29 June, 2022
GAHC010192012021
IN THE GAUHATI HIGH COURT
(The High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)
PRINCIPAL SEAT AT GUWAHATI
WA Nos.328/2021 & 329/2021
1. WA No. 328/2021
M/s Trident Enterprise,
A sole proprietorship concern bearing Regd. No.NPW/Class-I/158,
represented by its Proprietor Shri Imty Ao @ P. Imty Ao,
S/O Late L. Panger Ao, resident of Lower Agri Colony,
Kohima, Nagaland-797001.
......Appellant.
-Versus-
1. The Union of India,
represented by the Secretary to the Ministry of Rural
Development, Govt. of India,
Krishi Bhavan, New Delhi-110001.
2. The State of Nagaland,
represented by the Chief Secretary to the Govt. of Nagaland,
Kohima.
3. The Commissioner & Secretary to the Govt. of Nagaland,
Works & Housing Department, Kohima, Nagaland.
4. The Commissioner & Secretary to the Govt. of Nagaland,
Rural Development Department, Kohima, Nagaland.
5. The Engineer-In-Chief, NPWD & Empowered Officers,
NGRRDA, Nagaland, Kohima.
6. The Chief Engineer,
PWD(R&B), Nagaland, Kohima.
7. The Superintending Engineer (Design),
WA 328/2021 & 329/2021 Page - 1 of 50
O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
8. The Executive Engineer (Design),
O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
9. M/s ND & Co.
Regd. No.NPW/Class-1/457,
Kohima, Nagaland.
......Respondents.
For the Appellant: Mr. D. Das (Sr. Adv.),
Mr. N.N.B. Choudhury,
Mr. M. Dewan,
Mr. A. Atreya. ......Advocates.
For the Respondents: Mr. S.S. Roy, CGC,
Ms. M. Kechii, GA, Nagaland. ......Advocates.
2. WA No. 329/2021
M/s Trident Enterprise,
A sole proprietorship concern bearing Regd. No.NPW/Class-I/158,
represented by its Proprietor Shri Imty Ao @ P. Imty Ao,
S/O Late L. Panger Ao, resident of Lower Agri Colony,
Kohima, Nagaland-797001.
......Appellant.
-Versus-
1. The Union of India,
represented by the Secretary to the Ministry of Rural
Development, Govt. of India,
Krishi Bhavan, New Delhi-110001.
2. The State of Nagaland,
represented by the Chief Secretary to the Govt. of Nagaland,
Kohima.
3. The Commissioner & Secretary to the Govt. of Nagaland,
WA 328/2021 & 329/2021 Page - 2 of 50
Works & Housing Department, Kohima, Nagaland.
4. The Commissioner & Secretary to the Govt. of Nagaland,
Rural Development Department, Kohima, Nagaland.
5. The Engineer-In-Chief, NPWD & Empowered Officers,
NGRRDA, Nagaland, Kohima.
6. The Chief Engineer,
PWD(R&B), Nagaland, Kohima.
7. The Superintending Engineer (Design),
O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
8. The Executive Engineer (Design),
O/o Chief Engineer, PWD (R&B), Kohima, Nagaland.
9. M/s ND & Co.
Regd. No.NPW/Class-1/457,
Kohima, Nagaland.
......Respondents.
For the Appellant: Mr. D. Das (Sr. Adv.),
Mr. N.N.B. Choudhury,
Mr. M. Dewan,
Mr. A. Atreya. ......Advocates.
For the Respondents: Mr. S.S. Roy, CGC,
Ms. M. Kechii, GA, Nagaland. ......Advocates.
BEFORE
HON'BLE MR. JUSTICE N. KOTISWAR SINGH
HON'BLE MR. JUSTICE SOUMITRA SAIKIA
Dates of Hearing : 16.06.2022 & 17.06.2022
Date of Judgment : 29th June, 2022
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JUDGMENT AND ORDER
[N. Kotiswar Singh, J.]
Heard Mr. D. Das, learned Senior counsel assisted by Mr. M. Dewan,
learned counsel for the appellant in both the appeals. Also heard Ms. M. Kechii,
learned Additional Senior Government Advocate, Nagaland, appearing for
respondent Nos.2--8 and Mr. S.S. Roy, learned CGC, appearing for respondent
No.1.
2. These two appeals arise out of the common judgment and order
rendered on 04.08.2021 by the learned Single Judge in WP(C) No.71/2020,
WP(C) No.72/2020 & WP(C) No.94/2020, but confined to only two writ
petitions. The WA No.328/2021 is preferred against the decision rendered in
WP(C) No.94/2020 and the WA No.329/2021 is preferred against the decision
rendered in WP(C) No.72/2020.
As far as the WP(C) No.71/2020 is concerned the appellant has not
preferred any appeal and as such, though the said common judgment and
order was rendered in respect of three writ petitions i.e. WP(C) Nos.71/2020,
72/2020 & 94/2020, we are concerned only with the issues raised in WP(C)
Nos.72/2020 and 94/2020.
3. Before we deal with the grounds raised in these appeals, certain
background facts may be relevant to be mentioned.
3.1 A Notice Inviting Tender (NIT) was floated on 23.10.2019 for
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construction of number of roads under different packages in different districts
of Nagaland including the work, namely, T-01(Botsa) to Sendenyu via
Tsiemekhuma under Package No.NG0207A002 in Kohima district which is the
subject matter in WA No.329/2021 [WP(C) No.72/2020] and another work,
namely, T-01 to Lilen via Vonkitem under Package No.NG0901A012 in Peren
district which is the subject matter in WA No.328/2021 [WP(C) No.94/2020].
As per the NIT, the bid process involves two stages, namely, Part-I -
Technical Qualification Part of Bid, which consists of furnishing information
relating to relevant parameters including qualification information, supporting
documents, scanned copy of original affidavit and undertaking, which includes
information relating to experience in works of similar nature and size for each of
the last five years, and details of works in progress or contractually committed
with certificates from the concerned officer not below the rank of Executive
Engineer or equivalent [Clause 4.2(c)].
Part-II consists of Technical-Financial Part of Bid, which also consists of
(i) Form of Bid of Part-II of the bid as specified in Section 6 and (ii) Priced bill of
quantities for items specified in Section 7. Section 6 refers to Technical
Qualification Part-I of Bid and Section 7 refers to Bill of Quantities.
3.2 As provided under Clause 22 of the NIT, it has been mentioned that the
file containing Part-I of the bid will be opened first. Clause 22.5 further provides
that evaluation of Part-I of bids with respect to Bid Security, qualification
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information and other information furnished in Part-I of the bid pursuant to
Clause 12.1 of ITB shall be taken and completed within five working days of the
date of bid opening, and a list will be drawn up of the qualified bidders whose
Part-II of bids are eligible for opening.
3.3 Clause 22.6 further provides that the result of evaluation of Part-I of the
bids shall be made public on e-procurement systems following which there will
be period of five working days during which any bidder may submit complaint
which shall be considered for resolution before opening Part-II of the bid.
3.4 It may be noted that as regards submission of bids and evaluation of
Part-I of bids, it appears that there was no issues raised, in fact, all the bidders
including the appellant and the private respondent No.9 (respondent No.8 in
the writ petition) were considered to be technically qualified. It may be also
mentioned that it is specifically provided under Clause 25.1 of the ITB that
during the detailed evaluation of Part-I of bids, the employer will determine
whether each bid
(a) meets the eligibility criteria defined in Clauses 3 and 4;
(b) has been properly signed;
(c) is accompanied by the required securities; and
(d) is substantially responsive to the requirements of the bidding
documents.
Clause 25.2 futher provides that a substantially responsive financial bid is
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one which conforms to all the terms, conditions and specifications of the
bidding documents, without material deviation or reservation. A material
deviation or reservation is one
(a) which affects in any substantial way the scope, quality, or
performance of the Works;
(b) which limits in any substantial way, inconsistent with the bidding
documents, the Employer's rights or the bidder's obligations under
contract; or
(c) whose rectification would affect unfairly the competitive position
of other bidders presenting substantially responsive bids.
3.5 It appears that there was no issue regarding technical qualification of the
writ appellant as well as respondent No.9 (respondent No.8 in the writ petition)
and other bidders. As all the bidders were declared qualified in the Part-I of the
bid, the technical-financial bid which consist of the Part-II of the bid was
undertaken by opening the bids. In that, it was found that all the bidders had
quoted same rate. As far as the factual aspects upto this stage is concerned,
there is no issue.
3.6 However, according to the appellant, what happened subsequently led to
filing of the aforesaid writ petitions.
In respect of the work, namely, T-01 to Lilen via Vonkitem relating to
Peren district under Package No.NG0901A012 [subject matter in WP(C)
No.94/2020 and WA No.328/2021], it has been submitted that the writ
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appellant was informed on 12.06.2020 that his bid for the aforesaid tender has
been accepted during financial evaluation by the duly constituted committee.
However, after the writ appellant was informed of the acceptance of his
financial bid by email, after sometime the appellant was informed on the same
day on 12.06.2020 of the rejection of his bid for the aforesaid work relating to
Peren district. The appellant claims that while rejecting the said bid of the
appellant, no reason was assigned. The appellant, however, came to know
subsequently that though the appellant was informed on 12.06.2020 that his
bid has been rejected, the bid of the respondent No.9 was accepted by the
authorities and the letter of acceptance was issued on 11.06.2020. Thus, the
contract was awarded to the respondent No.9 one day before the appellant was
communicated the acceptance of his financial bid as well as rejection of his bid.
This has given raise to the cause of action for the appellant to approach the
learned Single Judge challenging the aforesaid procedure and actions taken by
the State respondents to award the contract in favour of the respondent No.9.
3.7 Coming to the other tender for the work, namely, T-01(Botsa) to
Sendenyu via Tsiemekhuma relating to Kohima district under Package
No.NG0207A002 [subject matter in WP(C) No.72/2020 and WA No.329/2021],
the appellant received an email on 04.03.2020 from the respondent authorities
stating that his bid has not been selected for award of contract by the duly
constituted committee. The appellant came to know that on the same day i.e.
WA 328/2021 & 329/2021 Page - 8 of 50
04.03.2020 when his bid was rejected the contract was awarded in favour of
the respondent No.9.
3.8 Being aggrieved by the aforesaid actions of the authorities in awarding
the contract in favour of the respondent No.9, the writ appellant filed an
application on 15.06.2020 under Right to Information Act, 2005 and he received
the necessary information on 29.06.2020, whereby the appellant came to know
that the appellant scored the highest amongst the bidders with 85.00 marks out
of 100, whereas the respondent No.9 who was awarded the tender had
obtained 52.6 marks, which is the 4 th highest. It has been submitted that the
appellant also preferred an RTI application in respect of the other works in
Kohima also and was furnished with the same information.
3.9 Thus, in both the cases, it is on record that the appellant had scored the
highest marks in the technical bid and since, all the bidders had bidded same
amount in the financial bid, under normal circumstances the appellant being the
highest bidder in both the bids in respect of Peren as well as Kohima districts,
he ought to have been awarded. Accordingly, being aggrieved by the rejection
of the tenders of the appellant though had scored the highest in the technical
bid, and awarding the work to the respondent No.9 who had obtained much
lesser marks, the appellant preferred these two writ petitions being WP(C)
No.72/2020 and WP(C) No.94/2020.
4. Before the learned Single Judge, a specific plea was taken by the
WA 328/2021 & 329/2021 Page - 9 of 50
appellant as follows.
5. It was submitted that the aforesaid marks awarded to the appellant and
other bidders were based on certain parameters which are to be found in
Clauses 4.2 and 4.6. The aforesaid parameters includes the work experience in
similar nature of work for the last five years, the progress of works, etc. and the
maximum value of civil engineering works executed in any one year during the
last five years, number of years prescribed for completion of works, etc. as
mentioned specifically under Clause 4.6 while calculating the assessed available
bid capacity of the bidders.
In other words, while making the assessment and evaluating the
assessed available bid capacity, the past performance of the bidders is already
taken into account and the appellant had furnished all the relevant information
about his past performance, progress of work, etc. as required under Section 3
qualification and information provided under the NIT. The appellant admits to
the position that at the time of submitting the aforesaid two bids, he was
executing 3 works, namely, (i) T-01 to Thetsumi, (ii) Yangkhao to Shingnyu and
(iii) T-026 to Kendong and at the relevant time the average progress of the
works was 21.22% as also calculated by the authorities.
6. The appellant sought for a direction from this Court for award of contract
in his favour in respect of the aforesaid two works and also for cancellation of
the work allotted to respondent No.9. The said claim of the appellant was
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contested by the State as well as by the private respondent No.9. The State
Government had taken the specific stand before the learned Single Judge that
the tender of the appellant was rejected because of his poor work performance.
In that regard reference was made to Clause 4.7(ii), which provides that even if
the bidders meet the qualifying criteria, they would be subject to
disqualification if they have (i) made misleading or false representations in the
forms, statements, affidavits and attachments submitted in proof of the
qualification requirements; and/or (ii) record of poor performance such as
abandoning the works, not properly completing the contract, inordinate delays
in completion, litigation history, or financial failures etc .
7. The plea of the State authorities was that the work had been allotted to
respondent No.9 as there was no unfinished work when he took part in the
tender process and as such, considering his work performance of completing all
the works and to ensure that the construction of these roads does not suffer
from any delay and in the interest of the public it was decided to award the
work to respondent No.9 and rejected the bid of the appellant.
8. The learned Single Judge after hearing the parties and on consideration
of the materials on record dismissed both the writ petitions filed by the
appellant vide impugned common judgment and order dated 04.08.2021, but
also at the same time set aside the award of contract in favour of the
respondent No.9 on the ground that the respondent No.9 had engaged in
WA 328/2021 & 329/2021 Page - 11 of 50
fradulent practice while submitting his bid documents, and directed the State
respondents to take immediate steps for issuing fresh NIT for the projects in
the two writ petitions i.e. WP(C) Nos.72/2020 and 94/2020.
9. Being aggrieved by the aforesaid common judgment and order by
dismissing the relief claimed, the writ petitioner has filed the present two writ
appeals.
In the meantime, however, as per direction of the learned Single Judge,
the respondent authorities proceeded to float the 2 nd tender on 03.11.2021 and
also recompensated the respondent No.9 for the portion of works already
executed. The appellant while preferring these appeals brought to the notice of
this Court to the aforesaid re-tender process and a Division Bench of this Court
vide order dated 30.11.2021 directed that as an interim measure till the next
date, the work order in respect of Re-Tender Notice No.CE/R&B/PMGSY-
11/TENDER/2019-20/104-106 dated 02.11.2021 shall not be issued.
The said interim order has continued till date. Thus, though the re-tender
was issued, no work order has been issued in favour of any person till now.
CONTENTION OF THE APPELLANT:
10. Learned Senior counsel appearing for the appellant has raised the
following grounds in assailing the findings and conclusion of the learned Single
Judge.
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10.1 It has been submitted that the respondent authorities could not have
invoked the aforesaid Clause of 4.7(ii) to reject the bid of the appellant on the
ground of poor performance in as much as the authorities while assessing the
technical bid of the bidders including the present appellant, had already taken
into account the past performance of the appellant. The information regarding
past performance of the appellant was duly furnished to the authorities and the
same was very much in the knowledge of the Selection Committee. The past
performance of other bidders was also in the knowledge of the Selection
Committee. After considering the past performance and other parameters of the
bidders as required to be considered under the NIT, the authorities declared the
technical bids of the appellant and others to be successful. Accordingly, after
their technical bids were found to be successful, the authorities proceeded with
the 2nd stage of the tender process by opening the technical bid and financial
bid, which is named as Part-II of the bid. On opening of the Part-II of the bid
i.e. technical and the financial bid, the appellant was informed on 12.06.2020
that he has been successful in the financial bid in respect of the work, namely,
T-01 to Lilen via Vonkitem relating to Peren district under Package
No.NG0901A012.
10.2 As far as the work, namely, T-01(Botsa) to Sendenyu via Tsiemekhuma
relating to Kohima district under Package No.NG0207A002 is concerned, the
appellant was not informed of the rejection of his technical bid or financial bid,
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but it was awarded the contract in favour of the respondent No.9 which was
informed on 04.03.2020 and on the same day the appellant was also informed
of the rejection of his bid without specifying as to the ground for his rejection.
10.3 With specific reference to the work in respect of Peren district, learned
Senior counsel for the appellant submits that the authorities could have invoked
Clause 4.7(ii) which is specifically relating to the poor performance, which they
were already aware of, while making assessment in technical bid. Yet the
authorities themselves did not deem it necessary to disqualify the bid of the
appellant at that stage. It has been contended that if the authorities were not
really satisfied with the past work performance of the appellant, they could
have rejected the bid of the appellant at that stage of Part-I while assessing the
technical bid. Nothing prevented the authorities from doing so. Had the tender
of the writ appellant been rejected at that stage i.e. Part-I of the bid process,
perhaps the matter would have been otherwise.
10.4 According to the learned Senior counsel for the appellant, if the
authorities did not deem it necessary to reject the bid of the appellant at that
stage and having declared the appellant to be successful, it would not be in the
fitness of things that the authorities could again invoke the same parameter to
reject the tender at a subsequent stage.
According to the learned Senior counsel for the appellant, this course of
action adopted by the authorities in rejecting the bid of the appellant on the
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ground of poor performance is merely to favour the respondent No.9, who
otherwise, is much less meritorious and this is an afterthought. In fact, as
subsequently noticed by the appellant also the respondent No.9 did rely on
certain documents i.e. relating to possession of vehicles, which actually belong
to the appellant. Yet, the authorities ignored the said malpractice adopted by
the respondent No.9 to award the contract in favour of the respondent No.9.
10.5 Thus, according to the learned Senior counsel for the appellant, the said
action of the State authorities in rejecting the bid of the appellant and awarding
the same to a less meritorious bidder (respondent No.9) is not only illegal but
also malafide. According to the learned Senior counsel for the appellant, there
is no reason why the bid of the appellant as far as Peren district is concerned
should not have been accepted and awarded to him.
10.6 Coming to the plea of the State that the work was not awarded to the
appellant because of his poor performance, learned Senior counsel submits
that, that is the plea taken only later on by way of affidavit to justify their illegal
action, which is impermisible as held by the Hon'ble Supreme Court in the case
of Mahinder Singh Gill & Anr. Vs. The Chief Election Commissioner,
New Delhi & Ors1. This explanation is a mere afterthought to justify the illegal
action by way of subsequent affidavit. Further, learned Senior counsel has led
great emphasis on contending that this is not the simple rejection of a bid on
1 (1978)1 SCC 405
WA 328/2021 & 329/2021 Page - 15 of 50
poor performance. It is nothing but the blacklisting. The fact remains that at
the relevant time, the appellant could not complete all the works which is
nothing very unusual in this part of the country and in fact, most of the other
bidders also could not complete earlier works in time. But the effect of such
rejection of the appellant would be that this ground can be taken against the
appellant in any subsequent bids also to reject other tenders of the appellant. If
that is so, it really amounts to blacklisting. Thus, the effect of rejection of the
bid of the appellant on the ground of poor performance is nothing but
blacklisting of the appellant on the ground of alleged poor performance. If it
amounts to blacklisting, the learned Senior counsel submits that, in that case,
notice ought to have been given as otherwise, it would violate the principles of
natural justice as has been reiterated by the Hon'ble Supreme Court in a
number of cases i.e. (i) M/s. Erusian Equipment & Chemicals Ltd. Vs.
State of West Bengal & Anr2. (ii) Raghunath Thakur Vs. State of Bihar
& Ors3. and (iii) UMC Technologies Private Limited Vs. Food
Corporation of India & Anr4.
10.7 It has been submitted that in the present case, no such notice was given
by the authorities before rejecting the bid of the appellant on the ground of
poor performance. It was highlighted only at the time when the appellant took
the matter to the Court where the authorities tried to justify their action by
2 (1975)1 SCC 70
3 (1989)1 SCC 229
4 (2021)2 SCC 551
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filing an affidavit. It has also been submitted that if the authorities had
informed the appellant of this so called poor performance, he could have
convinced the authorities with proper reasons for doing so. In any event, it is
the contention of the appellant that this poor performance is not of such a
nature that he would be totally unable to execute the work in view of his
advantageous position in other parameters as reflected in the technical bid.
10.8 Learned Senior counsel accordingly submits that since the appellant was
found to be the most meritorious in the technical assessment and since all
other bidders were of the same rank as far as the financial bid is concerned, in
the overall assessment, the writ appellant would be most meritorious. The
technical aspect of the bid which relates to the ability of the appellant to
execute the work could not have been ignored. Under the circumstances, the
authorities ought to have awarded the contract to the appellant. In this regard,
learned Senior counsel for the appellant has referred to the decision of the
Kohima Bench of this Court rendered in East West Construction Vs. State
of Nagaland & Ors.5, in which the learned Single Judge in a similar situation
had directed award of the contract to the highest bidder being the most
meritorious amongst the bidders and as such, in the present case, since the
appellant was found to be the most meritorious, may be given this award. It
has been also submitted that even though the re-tender was floated, no work
order has been issued to any one in terms of the interim order passed by this
5 2017 SCC Online Gau 196
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Court on 30.11.2021 and as such, no third party right has arisen and as such,
awarding of tender in favour of the appellant at this stage will not cause any
prejudice to anybody and the appellant would be able to execute the work
within the time stipulated under the contract.
10.9 Learned Senior counsel for the appellant submits that once the award of
the tender to respondent No.9 has been cancelled, rightly so by the learned
Single Judge on the ground that he had indulged in malpractice of playing fraud
by using the documents belonging to the appellant, the learned Single Judge
ought to have remanded the matter to the authorities to reconsider the matter
on the basis of the available materials and award the contract to the appellant
who is the most meritorious.
CONTENTIONS OF THE STATE:
11. Ms. M. Kechii, learned Additional Senior Government Advocate, Nagaland
in response, has submitted that after all the bids were technically examined and
were found to be responsive, the financial bids were open, whereupon, it was
found that all the bidders had quoted the same rate. Under the circumstances,
the Selection Committee had to re-examine on which basis the bid had to be
awarded for which as provided under Clause 25.1 which enables the authorities
to further determine the responsiveness of the bid with respect to the
remaining bid conditions i.e. price bid of quantities, technical specifications and
drawings by resorting to the Clause 4.2(c) of the SDB which deals with
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experience in work of similar nature and size for each of the last five years and
details of works in progress or contractually committed with certificate from the
concerned Officer not below the rank of Executive Engineer or equivalent. While
undertaking the aforesaid exercise and re-assessment as provided under Clause
25.1 mentioned above, the competent authority found that the performance of
the petitioner was not satisfactory inasmuch as the work progress only about
21.22% whereas the respondent No.9 was found to have completed all his
works.
11.1 Under the circumstances by invoking the clause under 4.7(ii), the
Committee decided to reject the bid of the petitioner and award contract to the
respondent No.9 and as such, it has been submitted that there was no
arbitrariness or malafide and the selection process was done as per the terms
and conditions of the SDB of which the petitioner was also fully aware of. Since
the bid was rejected because of his poor performance which is also a fact, not
denied by the petitioner, it cannot be said to be arbitrary and as such, the
finding of the learned Single Judge does not warrant any interference from this
Court. More so, when the tender has already been re-floated in terms of the
directions of the learned Single Judge and same has been finalized and the
work order can be issued to the successful bidder so that the construction of
road, which have been upheld for a long time, can be completed as the shortest
possible time. However, awarding of the contract has been withheld because of
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the interim order passed by this Court.
11.2 Ms. Kechii, learned Additional Senior Government Advocate, Nagaland
relying on the decision of the Hon'ble Supreme Court in M/s. N.G. Projects
Limited Vs. M/s. Vinod Kumar Jain [Civil Appeal No.1846/2022, decided on
21.03.2022] submits that the Court as far as possible ought not to interfere in
the matter relating to tender so that overwhelming public does not suffer. Ms.
Kechii submits that when the technical bid was opened, Clause 4.7(ii) was not
invoked as the bidders were all justified technically. It was invoked only when
the financial bid was open and when it was found that all the bidders had
quoted same rate, thus resulting in a stalemate. Under the circumstances, the
Selection Committee considering the poor performance of the appellant rejected
his tender and awarded to the respondent No.9 as there was no work pending
with him.
REPLY OF THE APPELLANT:
12. In response, Mr. M. Dewan, learned counsel assisting Mr. D. Das, learned
Senior counsel for the appellant has submitted that perusal of the Clause 12 of
the Standard Bid Document (SBD) would indicate that the bids submitted by the
bidders are in two parts. Part I consists technical qualification part of bid which
comprises inter alia, qualification, information, supporting documents, scanned
copy of original affidavit, undertakings as specified under Clause 4 of the ITB.
Clause-4.2 of the ITB covers the past performance. Thus, it cannot be said that
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the authority did not consider the past performance in the Part I. As far as the
2nd Part, which is named as Technical Financial Part of Bid, it comprises only of
the following aspects: (i) Form of bid for Part-II of the bid as specified in
Section 6 and (ii) Priced bill of quantities for items specified in Section 7.
12.1 It has been further submitted that neither Section 6 nor Section 7 talks
about the past performance and as such, it would not be permissible to invoke
the past performance clause under Part-II. It has been also submitted that the
works pertain to implementation of the Schemes under the Pradhan Mantri
Gram Sadak Yojana in connection with which the Government of India had
issued a Circular on 07.05.2013 laying down the guidelines for award of
contract under the Pradhan Mantri Gram Sadak Yojana and as such, according
to him, this Circular also has to be kept in mind while considering the clauses
under the Standard Bidding Documents of the tender floated in the present
case.
12.2 It has been submitted by the learned counsel that it has been provided
under Clause 4.7 of the aforesaid circular that upon opening the financial bid, a
comparative statement would be generated by the GePNIC both in the cases of
percentage, rate, tenders as also in the case of item rates tenders and the
bidding documents. The bidding documents provide for award of work to the
lowest evaluated bidder, if the bid is found reasonable, subject to availability of
the bid capacity and accordingly, the bid will be evaluated financially by the
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Committee as mentioned in the circular. It has been submitted that the
appellant was informed on 12.06.2022 by an email by the authority that his bid
has been accepted during the financial evaluation by the duly constituted
Committee, thereby indicating that all credentials of the appellant has been
looked into and was found qualified for the said tender. Therefore, it would be
impermissible to go back and refer to the clause which was supposed to have
been taken into consideration while declaring the appellant justified technically
and later financially also.
12.3 Mr. Dewan submits that the judgments of the Hon'ble Supreme Court
rendered in M/s. N.G. Projects Limited (supra) may not be strictly applicable
in the present case inasmuch as there is no dispute relating to any wrong
application or interpretation of the clauses of the tender. Further, viewed from
the sequence of events which have taken place in the present case there
appears to be a clear cut case of arbitrariness and discrimination which would
warrant interference from this Court on the basis of the principle laid down by
the Hon'ble Supreme Court in Jagdish Mandal Vs. State of Orissa & Ors. 6
In fact, the ratio of Jagdish Mandal (supra) has been also reiterated of the
paragraph 16 of the M/s. N.G. Projects Limited (supra).
CONSIDERATION BY THE COURT:
13. Before we deal with the rival contentions of the parties and the reasons
6 (2007)14 SCC 517
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and conclusion arrived by the learned Single Judge, we would like to examine
ourselves the manner in which the tender was processed by the authorities in
the light of the records which are made available before us by the learned
counsel for the State.
13.1 From the records and pleadings, what we have noticed is that the
Selection Committee made a technical evaluation of all the bids of the bidders
and as per the said bids in respect of the work, namely, T-01 to Lilen via
Vonkitem relating to Peren district under Package No.NG0901A012. The bidders
have been awarded marks in respect of various parameters i.e. (i) information
of bidders, (ii) experience in similar works, (iii) assessed available bid capacity,
(iv) major items of construction equipment, (v) laboratory equipments, (vi)
qualification & experience (general/proposed position) of key personnel
available for the work, (vi) evidence of access to lines of credit and availability
of financial resources (10% of contract value), as follows:-
Summary of Technical Evaluation
NAME OF WORK: T-01 to Lilen via Vonkitem
Package No.:NG0901A012 Date of Sanction:24th September 2019
Completion period: 18 Months Amount put to tender: Rs.1660.52 lakhs
Sl. Requirement Max K.C. Pongshi Trident Northeast ND &
No. Points Angami Phom Enterprise Enterprise Co.
1 2 3 4 5 6 7 8
1 Information of Bidders 5 5.00 5.00 5.00 0.00 0.00
2 Experience in similar works- Details of works 25 21.74 10.08 25.00 5.22 8.21
of similar nature executed during last 5 yrs.
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Sl. Requirement Max K.C. Pongshi Trident Northeast ND &
No. Points Angami Phom Enterprise Enterprise Co.
3 Assessed Available Bid Capacity 25 25.00 25.00 25.00 25.00 25.00
4 Major items of construction equipment 15 0.73 10.47 15.00 0.63 4.35
5 Laboratory Equipments 5 5.00 5.00 5.00 5.00 5.00
6 Qualification & Experience 5 5.00 5.00 5.00 5.00 5.00
(General/Proposed position) of key personnel
available for this work
7 Evidence of access to lines of credit and 5 5.00 5.00 5.00 5.00 5.00
availability of financial resources (10% of
contract value) in Crores
TOTAL 85 67.46 65.55 85.00 45.85 52.56
Whether Technically Pre-qualified
13.2 From the above, what can be noted is that the appellant was awarded 85
marks and thus got the maximum marks in the technical bid, and the
respondent No.9 was awarded the 4th highest marks of 52.6. What is significant
is that in respect of the 2 nd parameter i.e. experience in similar works which
relatable to Clause 4.2(c) of the SBD, the appellant was awarded maximum
mark of 25 out of 25 marks and the other remaining bidders were given lesser
marks as can be seen from the table above. In other parameters also most of
the bidders were given similar or less marks as the appellant. What is
significant and notable is that in this particular parameter relating to experience
of similar works of the work being already executed or past works, the
appellant has been given the highest marks of 25 that too, the maximum
possible marks which could be awarded out of 25 marks. This assessment
would clearly lead to the inference that his past performance was fully
satisfactory as otherwise, he would not have been given 25 out of 25 marks. In
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our opinion, the aforesaid factum is critical and significant for the reason that
the entire case of the parties revolved around this parameter as it on this
parameter itself the authorities later on decided to reject the bid of the
appellant and award the same to the respondent No.9 (which though was
ultimately set aside by the learned Single Judge on some other grounds, whiich
we will discuss at a later stage).
13.3 From the above, it is quite apparent that there cannot be any issue
regarding the past performance as far as the appellant is concerned as his bid
was declared to be technically qualified and was awarded the maximum marks
in matters relating to his past performance. It appears that the Committee also
did not find any other bidders also not to be technically qualified. Thus, we will
proceed with this position that the Committee did not find any of the bidders
including the appellant technically not responsive. If any of the bidders had
been found not to be technically responsive, the question of taking part in the
2nd stage relating mainly to financial bid would not have arisen. Accordingly, as
the Committee found all the bids including that of the appellant to be
technically responsive, all the bids were opened for the second stage of
financial bid. However, while opening the bid it was found that all had quoted
the same rate. Thus, there appearred to have been certain stalemate for
proceeding forward in as much as all the bidders were found to be quoting the
same rates, as also reflected in the memo of appeal. The bidders had quoted
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the same rate as given below:-
eTendering System for Pradhan Mantri Gram Sadak Yojana (PMGSY)
Tender Inviting Authority : Empowered Officers, NGRRDA
Name of the Work : T-01 to Lilen via Vonkitem
Package No : NG0901A012
COMPARATIVE STATEMENT
Sl. Bidders Name Estimated Rate Quoted Rate Remarks
No. (in Percentage)
1 M/s K.C. Angami and Sons 1660.52 Lakhs As per SOR 2017 Qualified
Consortium
2 A PONGSHI PHOM 1660.52 Lakhs As per SOR 2017 Qualified
3 Triden Enterprises 1660.52 Lakhs As per SOR 2017 Qualified
4 M/s Northeast Enterprise 1660.52 Lakhs As per SOR 2017 Qualified
5 ND and Co 1660.52 Lakhs As per SOR 2017 Qualified
Work awarded to M/s ND and Co
13.4 It was mentioned that all were qualified as can be seen from the above
chart. Thus, the situation remains that all the bidders were technically as well
as financially qualified. Under such circumstances, what should have been the
next course of action taken by the Selection Committee, if all the bidders have
been technically and financially qualified. That is the question which we have to
answer in the light of the action taken by the State which was questioned in the
writ petitions, and which we are called upon to examine in these appeals.
13.5 According to the appellant, if he was found to be the most meritorious in
the technical bid and if the financial bid remains the same, he should have been
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given preference by fact of he being the most meritorious in technical bid, for
the reason that while financial aspect of the tender is important, yet the
technical aspect in a tender is also equally important for the reason that unless
a bidder is technically qualified and sound to undertake the contract, he cannot
execute the work properly and since the bid of the appellant was not rejected
at the stage of assessment of the technical bid, he being the most meritorious
amongst the bidders, ought to have been given preference and the contract
should have been awarded to him. However, instead of doing so, they picked up
the respondent No.9 on the plea that the past performance of the appellant
was not satisfactory, which according to the appellant is not permissible for
which the appellant has made his submissions at length, as narrated above. As
such, it may not be necessary to repeat the submissions again at this stage.
13.6 On the other hand, the specific stand of the State Government both
before the learned Single Judge and also before us is that though the appellant
was technically qualified as others and since at the stage of financial bid it was
found that all had quoted same rate, the State had to decide on which basis the
bid was to be awarded, for which purpose they again went back to the past
performance of the bidders. The State's contention is that it was necessary to
go back to the past performance for the reason that there should not be any
undue delay in execution of the contract and since the appellant was found to
have performed only about 21.22% of the work already allotted to him in
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respect of other projects which the appellant was executing, and since there
was no work pending in respect of respondent No.9, it was felt in the interest of
speedy execution of work that the award should be offered to somebody who
had no pendency of work. Since there were works pending as far as the
appellant is concerned, the Committee rejected his bid and awarded the same
to the respondent No.9.
13.7 In fact, it is this particular decision of the Committee which was
questioned before the learned Single Judge. It may be mentioned that the
learned Single Judge accepted the said plea of the State, can be seen from
paragraph 21 of the judgment. This finding of the learned Single Judge
recorded in paragraph 21 is based on the affidavit-in-opposition filed by the
State respondents as mentioned in paragraph 8 of the judgment. We shall be
adverting to the finding/conclusion of the learned Single Judge as recorded in
paragraph 21 at a later stage. What is important to be noted from the judgment
of the learned Single Judge is that the learned Single Judge accepted the plea
of the State respondents that the bid was not awarded to the
appellant/petitioner on the ground of his delay in executing other pending
works and consequently it was awarded to the respondent No.9.
13.8 It is the specific plea of the appellant that the criteria of past
performance could not be invoked again to disqualify his bid. According to the
learned Senior counsel for the appellant, in fact, that particular parameter of
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work performance in the last 5 years had been already taken into account at
the time of technical evaluation of the bids and having found the technical bid
of the appellant responsive, the authorities could not have invoked the same
criteria to disqualify him.
13.9 On the other hand, it is the plea of the State that the State had invoked
this in the interest of work after finding all the bidders who have quoted same
amount in their financial bids just causing a dilema for the authorities as to the
method on which the best bidder has to be chosen for executing work and the
State considered that past performance would be the most appropriate criteria
to be adopted to award the contract. It is also the case of the State that Clause
4.7(ii) was not invoked in the earlier part of the bid process but was invoked
only at the later stage in the interest of speedy execution of work.
14. Before we examine the merits and demerits of the respective
submissions advanced on the part of the parties, it may be apposite to briefly
refer to the reasons for the conclusion arrived at by the learned Single Judge.
14.1 Learned Single Judge after hearing the parties and keeping in mind the
past performance of the appellant observed that his performance in the 3
(three) projects had been dismally poor and there had been inordinate delay in
completion of the projects and as such, keeping in view the terms and
conditions given at paragraphs 15 and 16 of the NIT and Clause 4.7 of the ITB
and the settled principles of law, the learned Single Judge held that the
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employer/the State respondents were very much within their domain when they
rejected the bids of the appellants in respect of the 3(three) works in question
in the three writ petitions.
14.2 Learned Single Judge observed that the State respondents are
responsible to make sure that the works are executed and completed within
time and as such, they have to choose someone whom they believe can do the
same and one of the ways to ascertain is to see the track record of the
contractor/contractors. While doing so, the State respondents found that the
performance of the appellant was wanting, thus, leading to rejection of his bids.
Accordingly, the learned Single Judge did not find any mala-fide, arbitrariness or
unreasonableness in such an action taken by the State.
14.3 Learned Single Judge also held that the explanation for delays in
execution of three works given by the petitioners are not supported by
documents except the No Objection Certificate under Exclusive Rules 2008
issued by the Deputy Commissioner, Dimapur dated 28.09.2020 and concerning
one of the projects i.e. L-026 to Kendong.
14.4 Learned Single Judge held that this certificate does not help the case of
the appellant as it was a duty of the appellant to apply for the same earlier so
that the work progress is not disturbed by non-issuance or late issuance of such
a certificate. Learned Single Judge held that he cannot blame others for his
inaction as submitted by the learned counsel for the State that the contractors
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are supposed to know what is expected to be done during the execution of
works and they had been given opportunity to inspect the work site voluntarily
even before the submission of their bid.
14.5 Further, it was also observed that the appellant's explanation that one of
the works was delayed because of massive landslide on the only road
connecting work site with outside world which has delayed in the transportation
of machineries, materials and equipments is not acceptable as there is nothing
to show that landslide had actually happened there.
14.6 Further, as regards the explanation of the appellant in the case of the
project T-01 to Thetsumi that due to dispute of ownership between the villagers
and the Government and unforeseen circumstances, the work was delayed, it
cannot be also accepted as the same is not substantiated.
Thus, the learned Single did not find the explanation offered by the
appellant to explain the delay in execution to be satisfactory. Accordingly, the
learned Single Judge declined to interfere in the rejection of the petitioner's bid.
15. Thereafter, the learned Single Judge proceeded to examine as to what is
to be done in respect of work order already issued which was a subject matter
in the aforesaid 3(three) writ petitions.
15.1 As regards WP(C) No.71/2020, the learned Single Judge held that the
contention of the appellant that since he is the lowest bidder, awarding the
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contract in favour of the respondent No.9 therein, was unfair and unreasonable
and was not acceptable. Learned Single Judge proceeded to hold that the past
performance of the respondent No.9 was much better than that of the appellant
and as such, there was nothing wrong in awarding the tender in favour of the
respondent No.8 therein (respondent No.9 herein) because of better
performance of the work.
Accordingly, leanred Single Judge held that there is no arbitrariness,
unfairness or discrimination in the decision making process of the authority and
does not in any way affect public interest rather it would subserve the same as
awarding contract to non performing contractor may only lead to loss of public
money and accordingly, declined to interfere with the award of tender in favour
of the respondent No.9.
15.2 It is to be noted that the appellant has not challenged the said finding of
the learned Single Judge in upholding the order of the Selection
Committee/State respondents in not awarding the tender to the appellant but
to M/s Multi Builders (respondent No.8 therein), which order was the subject
matter of challenge in WP(C) No.71/2020.
The learned Single Judge also came to the same conclusion as regards
the other remaining two writ petitions, WP(C) No.72/2020 and WP(C)
No.94/2020 by holding that the rejection of the tender of the appellant did not
amount to arbitrariness and a discriminatory act which would warrant
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interference.
However, as regards awarding the tender in favour of the respondent
No.9, the learned Single Judge held that since it was found that the respondent
No.9 had relied on certain documents relating to vehicles which actually
belonged to appellant, he had submitted false documents while submitting his
bid, and thus, committed forgery or fraud and since fraud vitiates the entire
transaction, the award of contract in favour of the respondent No.9 was held
illegal and accordingly, the work order issued in favour of the respondent No.9
in both the writ petitions, WP(C) No.72/2020 and WP(C) No.94/2020 were set
aside and all consequential actions were also quashed and set aside.
Thus, the learned Single Judge while dismissing the writ petition, WP(C)
No.71/2020, in its entirety, had partly allowed the remaining two writ petitions,
WP(C) No.72/2020 and WP(C) No.94/2020 by setting aside the award of tender
in favour of respondent No.9 and directed the State respondents to take
immediate steps for issuing fresh tender for the projects in the two writ
petitions, WP(C) No.72/2020 and WP(C) No.94/2020 with the further direction
to pay respondent No.9 for the works already undertaken.
16. We will now critically examine the explanation offered by the State and
the submissions advanced on the part of the appellant.
16.1 It is on record and not disputed by any of the contesting parties that the
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petitioner was awarded the highest marks i.e. 25 out of 25 in respect of
experience in similar works which is relatable to Clause-4.2(c) of the standard
bidding documents i.e. experience in work of similar nature and size for each of
the last five years and details of works in progress or contractually committed
with certificate from the concerned officer not below the rank of Executive
Engineer or equivalent. Having given full 25 marks out of total 25 marks in that
parameter to the appellant and thus, the maximum marks and highest scorer in
that parameter amongst the bidders because of which, the appellant obtained
the highest marks in the technical evaluation, we are of the view that the same
parameter could not have been invoked to disqualify him. According to the
State, the bid of the petitioner was rejected by invoking Caluse-4.7(ii) of the
standard bidding document. We are of the view that it could not have been
done for the reason hereafter discussed.
16.2 It has been submitted before us by the State that the said Clause 4.7(ii)
is based on the past performance of the records of the petitioner which is part
of the documents submitted as Part-I bid i.e technical evaluation. The record of
poor past performance of the petitioner is based on the record submitted by
him at the time of submission of his bid. We are of the view that though there
is a specific clause under 4.7(ii) to disqualify any bid, such a finding has to be
based on certain factual positions of the poor performance which in the present
case, is traceable only to those bid documents already submitted by the present
WA 328/2021 & 329/2021 Page - 34 of 50
petitioner. It is not the case of the State that the Committee undertook a fresh
exercise for ascertaining the past performance beyond what is already on
record. In fact, perusal of the records indicates that while the Committee made
the assessment of the past performance of the bidders, it was on the basis of
the information already furnished which were thus already available before the
Committee. As mentioned above, in the technical assessment, the appellant
was given 25 marks out of 25. However, in the subsequent exercise undertaken,
the observation of the Committee was that the petitioner was able to complete
only 21.22%. Thus, what we see is that there is variance in the assessment of
the work performance of the petitioner at two stages, one at the time technical
assessment and another at the time of final award of the contract but the
assessment was based on the same set of materials which were available with
the Committee at the time of technical assessment and subsequently, at the
time of rejection of the bid of the petitioner.
What we are trying to emphasis is that if the Selection Committee had
made another assessment of the past performance of the bidders after the
opening of the financial bid, it was on the basis of the same set of materials
which was looked into by the same Committee at the time of technical
evaluation. While in the first exercise undertaken by the Committee at the stage
of technical evaluation, the petitioner was given the highest marks yet the same
Committee found fault with the petitioner in the second evaluation on the same
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set of documents. Therefore, we find that the aforesaid assessment and
exercise undertaken by the authority to be arbitrary, being not consistent.
16.3 We have been made to understand at the time of hearing that the
respondent No.9 was awarded this contract as there was no work pending
against him but when we perused the records it is seen that though there was
no work pending against him, 2 works were earlier allotted to him. The first
work was allotted on 07.06.2012 which was completed by him on 09.06.2018
which took 6 years and the second work order was issued on 23.06.2009 and it
was completed on 12.03.2018 which took about 9 years to complete though
these works were supposed to be completed within 12 months (1 year). Even if
the respondent No.9 completed the works and there was no pending works, the
performance of the respondent No.9 cannot be said to be satisfactory also as
he took near about 8 to 9 years to complete these works. If the respondent
No.9 had taken 6 to 9 years to complete the earlier two works which were to be
completed in 1(one) year, on what basis the Committee came to the conclusion
that the respondent No.9 can complete the work within time and will not take 6
to 9 years in this case also? However, the Committee did not consider this
aspect and proceeded to award the contract in favour of the respondent No.9
mainly on the ground that there was no pending work. Thus, we are of the
view that the award of the contract to the respondent No.9 mainly on the
ground that there was no work pending perhaps cannot be considered to be a
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correct decision based on germane materials. It is on record that the
respondent No.9 took around 8 to 9 years to complete the earlier projects. To
that extent, it can be said that the decision of the State to award the contract
to the respondent No.9 cannot be said to be based on relevant materials.
16.4 Be that as it may, since the contract awarded to the respondent No.9 has
already been set aside by the Single Judge of this Court and the same has not
been challenged by the respondent No.9, we do not wish to make any further
observation as regards the award and cancellation of contract to the respondent
No.9.
16.5 What is significant to be noted is that the respondent authority invoked
clause under 4.7(ii) to disqualify the appellant on the ground of poor
performance. The fact remains that the authorities invoked this Clause 4.7(ii) to
reject the bid of the petitioner. The question before us to be decided, as also
pleaded by the appellant is, whether it was appropriate for the authorities to
invoke the said clause to reject the bid of the appellant. According to the
appellant, as stated above, it could not be invoked as it amounts to applying
the same criteria for the purpose of qualification and as well as disqualification.
16.6 Therefore, the natural question which arises for consideration is whether
invoking of this Clause 4.7(ii) by the Selection Committee amounts to
arbitrariness, thus violating Article 14 of the Constitution of India as submitted
by the learned Senior Counsel for the appellant.
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16.7 Learned Senior Counsel for the appellant has very forcefully submitted
before this Court that while the authority had every right and liberty to invoke
this clause to disqualify the bid, this right to disqualify the bid was to be
invoked at the stage of technical assessment itself when the past performance
was to be considered at that stage and not thereafter.
16.8 As regards this submission, we are of the view that this clause is part of
the contract SBD which could be invoked by the State at any stage of the bid
and not necessary only at the technical bid stage. At the same time, we are of
the opinion that if the State had already taken into account the very basis or
foundation of this clause i.e., the past performance of the bidder, and yet opted
not to invoke at the relevant time and did not find any fault with the appellant
at an earlier stage, it could not have been invoked at a later stage. Yet, if it is
sought to be invoked again at any stage it must be only with justifiable reasons
and on the basis of any other additional input or consideration.
The State cannot be allowed to approbate and reprobate. Once, the bid
of the appellant was found to be technically responsive and was accepted on
the basis of the same material, the State cannot be allowed to take a contrary
view on the basis of the same material, as otherwise, the scope for arbitrary
action will be always there.
Therefore, if the Selection Committee was not satisfied with the past
performance of the bidder, they ought to have invoked this clause to disqualify
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the bid of the petitioner at the stage when the matter was considered which
included considering that aspect of past performance, the parameters of the
technical bid assessment includes past performance as mentioned in clause
4.2(c). Therefore, ordinarily unless there are some pressing circumstances,
which ought to be brought on record, this clause 4.7(ii) to reject the bid on the
basis of past performance could not have been invoked once the Committee
found that the past performance of a bidder was responsive both during the
technical and financial evaluation and not worth rejecting. Rather, if found that
past performance of the appellant more satisfactory.
16.9 In our view, Clause 4.7(ii) could still be invoked at any stage if there are
additional materials to show the poor performance of the bidder in which event,
in our view that aspect ought to have been pointed out to the bidder. However,
in absence of any additional materials or documents or subsequent
developments to show the poor performance, this clause in our view cannot be
invoked to reject the bid of a candidate when there was no change in the
materials which had already been considered and the Committee did not find
the bid not worthy of rejection or disqualification. In fact, we are surprised to
see that in this parameter of past performance, the appellant was given the
highest mark i.e. 25 out of 25. If the appellant was given the highest marks in
that parameter of past performance, we fail to understand how his bid could be
rejected on the same parameter without any change in the circumstances.
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16.10 In the exercise undertaken by the Selection Committee which led to
rejection of the bid of the petitioner and others except for the respondent No.9,
we see that the exercise was undertaken on the same set of documents on
which the appellant was given the highest marks. There could be a variety of
reasons for the delay in executing the work. We will not enter into the merit of
the issue for the reason that it is an factual aspect, though the learned Single
Judge has decided the issue on the basis of the affidavits filed by the parties in
course of the writ proceedings. The appellant had taken a certain plea before
the learned Single Judge trying to explain the delay, with which the learned
Single Judge was not impressed. What we have noted is that such a finding was
based on the affidavits filed. There is nothing to indicate that in connection with
the said issue of delay, the records were placed before the learned Single Judge
for arriving at his own conclusion. We are of the view that it would have been
more appropriate, if the appellant was given the opportunity to explain the
reasons for the delay in execution of work and the State examined the same,
rather than the Court taking upon itself to examine this issue as it involved
factual aspects. We would have liked the Selection Committee/the competent
authority to arrive at its own conclusion about the said issue of poor past
performance based on record and after considering any explanation that may
be offered by the petitioner. In our opinion, the authorities would be in a better
position to appreciate the practical difficulties, if any, expressed by the
appellant, more so, when the appellant was awarded the highest mark in that
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parameter.
16.11 There is another aspect which has troubled us also. As far as the
aforesaid package relating to Peren District is concerned, on 12.06.2020 the
authorities specifically communicated to the appellant that his bid is financially
responsive. Thus, if the bid of the petitioner was responsive, both technically
and financially, the question of rejection of the bid did not arise. While it is for
the Committee to still go ahead and not to select the appellant and award the
contract to another person for a good reason, the question of disqualifying does
not arise. Therefore, we fail to understand why the bid of the petitioner was
disqualified though the authorities had every right not to award the contract to
him but to any other bidders, for justifiable and good reasons in terms of
Clause 28 of the SBD, which reads as follows:
"28. Employer's Right to Accept any Bid and to Reject any or all Bids
28.1 Notwithstanding Clause 27 above, the Employer reserves the right to
accept or reject any Bid, and to cancel the bidding process and reject all bids, at
any time prior to the award of Contract, without thereby incurring any liability to
the affected Bidder or bidders or any obligation to inform the affected Bidder or
bidders of the grounds for the Employer's action."
16.12 In the present case, the award of contract to the respondent No.9 does
not appear to be on justifiable grounds, though it has been already set aside by
the learned Single Judge of this Court on a different ground of playing fraud.
Since the award of contract in favour of the respondent No.9 was set aside by
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the learned Single Judge, in our opinion, the matter ought to have been
remanded to the authority concerned to reconsider the award of the contract to
the most suitable bidder.
Thus, we are of the view that though the right of the Selection
Committee to award the contract to any other bidder remains and cannot be
questioned, yet if the bid of any person is rejected after it was found to be
qualified technically as well as financially, there must be sound reasons for
rejecting the same on the same grounds. Disqualification of a bid is one thing
and non awarding of a contract to the bidder is another thing.
16.13 In the present case, what has happened is that the Selection Committee
awarded the bid to the respondent No.9 by disqualifying the appellant. The
power to disqualify is to found in Clause 4.7(ii) and we have already discussed
that the said disqualification does not appear to be correct.
16.14 What we have also noted is that the respondent No.9 was awarded the
contract in respect of two works as mentioned above, on the ground that there
was no pending work by the respondent No.9. If the said logic is accepted and
applied in all cases, we fail to understand why the respondent No.9 was not
awarded the contract in respect of other works also which was given to another
bidder, namely, M/s Multi Builders which was the subject matter of
consideration in WP(C) No.71/2020. Since the award of the tender to M/s Multi
Builders (respondent No.8 in the said writ petition WP(C) No.71/2020) for the
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work between Kuthur to Chassir in Tuensang district has not been challenged,
we will not make any comment on it except for making a reference to it for the
purpose of examining the consistency of the actions of the State. As discussed
above, in fact, the respondent No.9 also could have been given the work order
which was awarded to M/s Multi Builders as M/s Multi Builders also did not
complete three works allotted to it. Thus, the rejection of the bid of the
appellant on the alleged ground of past poor performance, does not appear to
be convincing to us.
16.15 The State has taken a specific plea that the bid of the petitioner was not
accepted by invoking the Clause 4.2 and the Single Judge in his finding in Para-
21 specifically refers to 4.7(ii) of the ITB which was relied upon by the State not
to award the contract. We are of the view that while the authority had all the
liberty not to award the contract to the appellant but they could not have
invoked the Clause 4.7(ii) for the reason that this is a clause which can be
invoked only to disqualify a bid and this clause cannot be invoked after the bid
of the appellant had been found to be responsive both technically and
financially was acceptable at all the stages of the bid process as can be seen
from the records. Disqualification in our view also would mean that the bid
suffers from certain material defects of substantive nature which would render
such a bid unresponsive.
16.16 Therefore, if the authority has invoked Clause 4.7 as also approved by
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the Single Judge, it certainly amounts to apparent existence of certain
fundamental defect in the bid of the appellant which we do not find to exist.
Since the bid of the appellant was found to be responsive both technically and
financially, it cannot be said that there was any fundamental defect. On the
other hand, if that fundamental defect is poor performance as submitted by the
State, in that event, the apprehension of the appellant that it amounts to black
listing cannot be said to be without substance as the appellant was awarded the
highest mark in that regard. In fact, if the bid is disqualified on that ground of
poor performance as has been done by the State, that same ground can be
taken against him in any other bid submitted by the appellant in respect of any
other work, thus literally disqualify in other bid also which has the same effect
as blacklisting. In such circumstances, this disqualification of the appellant on
the aforesaid ground of poor performance can be said to be stigmatic which can
be used, as apprehended by the appellant, against him in any other subsequent
bids.
16.17 It may be also noted that minute examination of the provisions of Clause
4.7(ii) which has been invoked in the present case by the State shows that
disqualification of the petitioner by taking recourse to Clause 4.7 will have a
stigmatic effect which may be used against him in other contracts. Therefore,
in our opinion, as the appellant was found qualified technical as well as financial
in the bid process, if the State wanted to invoke Clause 4.7(ii) to disqualify him,
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the appellant ought to have given a prior notice or at least the appellant could
have been confronted with this proposed action so that he could have explained
the position before the Committee, which does not appear to have been done in
the present case.
16.18 In fact, what has caused concern to us also is that while the appellant
was informed that his financial bid was accepted on 12.06.2020 by email, the
respondent No.9 was awarded the contract on a previous date on 11.06.2020
though the State has tried to explain the said anomaly by stating that because
of certain technical glitch the email could not be sent to the petitioner in time
and the same was sent one day after the contract was awarded to the
petitioner. We, however, find the said explanation unsatisfactory.
17. It is also seen from the records that, vide an interim order dated
30.11.2021 passed by this Court, the State was permitted to proceed with the
new tender process but not to finalise the same. We have been informed by the
learned counsel for the State that although the new tenders were invited and
the bids received have been processed, in terms of the Judgment and Order
dated 04.08.2021 passed by the learned Single Judge, however, the work order
has not been issued in view of the subsequent interim order dated 30.11.2021
passed by a Division Bench of this Court. We are also informed by the learned
counsel for the appellants that the appellants have not participated in the said
new tender process initiated pursuant to the direction of the learned Single
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Judge in the impugned judgment and order.
18. In view of our findings as discussed above, we are firmly of the view that
the disqualification on the appellants by resorting to Clause 4.7(ii) by the
State/employer on the same parameters on which the appellants was earlier
held to be qualified and was found most meritorious, without there being any
further good reasons is ex-facie arbitrary. We would also like to mention that
past poor performance of works can certainly be taken into consideration for
not awarding any work. But in the instant case, what we have noted is that, as
revealed by the records, the appellant was indeed given the highest mark in
that regard, that is, 25 out of 25. Thus, having awarded the highest mark in
that parameter, rejecting and disqualifying his tender on the basis of the same
parameter appears to us quite arbitrary. It appears to us that the authorities
wanted to avoid awarding the tender to the appellant. As discussed above, if
pendency of works was the reason not to award the tender, we have also noted
that M/s Multi Builders was awarded the work from Kuthur to Chassir in
Tuensang district even though, it had also pending works. The said work could
have been awarded to the respondent No.9 also. Further, we have also noted
that the work performance of the respondent No.9 in the past could be said to
be satisfactory also, as he had taken 6 to 8 years in completing the two projects
in the past, which were required to be completed in 1(one) year. What is the
reason for believing that the respondent No.9 will not take similar long years in
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executing the present works awarded to him? It is a different matter that the
learned Single Judge subsequently quashed the work order issued in favour of
the respondent No.9 for a totally different reason for practicing fraud by the
respondent No.9. In other words, we are satisfied that the action and reasons
assigned by the State in not awarding the contract to the appellant appears to
be discreminatory, arbitrary and unreasonable. The reason assigned, that is,
poor past performance of the appellant in our view could not have been used,
for reasons herein above discussed.
19. Once the State decides to call for a bid then the terms and conditions
and the clauses of such a tender published as NIT are not only binding on the
intending bidders but also to the State and the State is also expected to follow
the terms and conditions scrupulously.
20. Accordingly, for the reasons discussed above, we set aside the findings
of the learned Single Judge to the extent it upheld the disqualification of the
appellant on the ground of delay in respect of past performances as well as the
rejection of the bid of the respondent No.9.
21. The respondent State has relied upon the Judgment of Apex Court in
M/s. N.G. Projects Limited (supra) to contend that if when the Court finds
that there is total arbitrariness or that the tender has been granted in the
malafide manner, still the Court should refrain from interfering in the grant of
tender but instead relegate the parties to seek damages for the wrongful
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exclusion rather than to injunct the execution of the contract. We are in
respectful agreement with ratio laid down by the Apex Court.
22. However, in the facts of the present case, in view of the interim order
dated 30.11.2021 passed by a Division Bench of this Court, no work order has
been issued to any short listed party in the fresh tender process initiated by the
State pursuant to the directions contained in the impugned judgment and order
dated 04.08.2021 present writ appeal and as such, there is no subsisting work.
The works, which were continuing by the respondent No.9 also ceased because
of the cancellation of the bid of the respondent No.9 by the learned Single
Judge, which has not been challenged by the respondent No.9. Thus, there is
no work going on which has been stayed by the Court. Under such
circumstances having held the action of the State to be arbitrary in disqualifying
the appellants, we deem it appropriate to hold that order disqualifying the
appellant is illegal and accordingly, set aside and the State Government would
be required to re-examine the matter.
23. The matter is accordingly, remanded to the Tender Evaluation Committee
to reconsider the award of contract from amongst the respective successful
tenderers including the appellant and thereupon take a fresh decision in the
matter. The fresh evaluation which is to be conducted by the Tender Evaluation
Committee in terms of the direction above, should be conducted as
expeditiously as possible preferably within a period of 15(fifteen) days, so that
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there is no undue delay in the execution of work.
24. In the meantime, fresh tender already called for by the employer in
terms of the directions contained in the impugned judgment and order dated
04.08.2021 of the learned Single Judge shall not be acted upon, till a fresh
decision is taken by the Tender Evaluation Committee on the basis of the
materials already available on record in respect of the qualified tenderers
including the appellants as directed by us as above.
25. If after fresh evaluation, the employer/State is unable to award the
contract for reasons which are germane and relevant and not arbitrary or
discriminatory, which are to be recorded in the file, then the State will be at
liberty to proceed with and finalise the fresh tender process which the State
had already initiated pursuant to the directions of the learned Single Judge in
the impugned Judgment and Order dated 04.08.2021. We, thus, make it clear
that if the State does not award the contract to any bidder in terms of the
earlier NIT, the reasons must be recorded in the file.
26. Needless to say, the findings of the learned Single Judge in respect of
respondent No.9 M/S ND & Co quashing this award of work to him, is not
interfered with as the same is not under the challenge before this Court.
27. The writ appeals are allowed by interfering with the judgment and order
dated 04.08.2021 passed by the learned Single Judge in WP(C) No.94/2020 and
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WP(C) No.72/2020, to the extent indicated above. Records produced before this
Court are returned to the learned Government Advocate, Nagaland.
Sd/- Soumitra Saikia Sd/- N. Kotiswar Singh
JUDGE JUDGE
Comparing Assistant
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