Khagen Konch vs The State Of Assam And 3 Ors
2022 Latest Caselaw 1122 Gua

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GAHC010009152022




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

                              Case No. : WP(C)/290/2022

           KHAGEN KONCH
           SON OF LATE SONA RAM KONCH, REGISTERED CLASS-I (A)
           CONTRACTOR VIDE REGISTRATION NO. CEWRI (A) 2021-22R/419-OBC.
           PRESENTLY RESIDING AT RAM NAGAR, WARD NO. 03, P.O. AN DP.S.
           DHEMAJI, DIST. DHEMAJI, PIN CODE NO. 787057, ASSAM

           VERSUS

           THE STATE OF ASSAM AND 3 ORS.
           REP. BY COMMISSIONER AND SECRETARY TO THE GOVT. OF ASSAM,
           WATER RESOURCE DEPARTMENT, DISPUR, GUWAHATI-781006, KAMRUP
           (M), ASSAM

           2:THE ADDITIONAL CHIEF SECRETARY
           WATER RESOURCE DEPARTMENT
            DISPUR GUWAHATI-781006
            KAMRUP (M)
           ASSAM

           3:THE CHIEF ENGINEER
           WATER RESOURCE DEPARTMENT CHANDMARI
            GUWAHATI-781003
            DIST. KAMRUP (M)
           ASSAM

           4:THE ADDITIONAL CHIEF ENGINEER
           WATER RESOURCE DEPARTMENT
            UPPER ASSAM ZONE
            DIBRUGARH-786005
            DIBRUGARH
           ASSA

Advocate for the Petitioner : MR. B D DEKA
Advocate for the Respondent : SC, WATER RESOURCE
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                                           BEFORE
                 HON'BLE MR. JUSTICE MANASH RANJAN PATHAK

                                         ORDER

30-03-2022

Heard Mr. B. D. Deka, learned counsel for the petitioner and Mr. B. Goswami, learned Additional Advocate General, Assam, for the official respondent Nos. 1 to 4 in the Water Resources Department, Assam.

2) Petitioner has challenged the Notice Inviting Tender (re-tender e-notice in two bid system of Technical and Finance) under reference No. DHM/SOPD/ GAINADI/2021-22/1 dated 07.01.2022 issued by the Additional Chief Engineer (ACE), Upper Assam Zone (UAZ), Water Resources Department (WRD), Dibrugarh, respondent No.2, for the civil work of "Raising and Strengthening along with extension of Gainadi both bank embankment on Down-Stream of National Highway-15" (hereinafter referred to as the said work) under Dhemaji Water Resources Division at Tender Value of Rs. 18,11,18,349/-, fixing Bid Publishing time and Date as 06:00 PM of 07.01.2022, Bid Submission Start Time and Date as 10:00 AM of 10.01.2022, Bid Submission End Time and Date as 02:00 PM of 17.01.2022, and Bid Opening Time and Date as 03:00 PM of 17.01.2022, with Bid Opening Place at Dibrugarh.

3) It is contended by the petitioner that for the same work, the ACE, UAZ, WRD, Dibrugarh, respondent No.2, vide No. ACE/WR/G-197/2021/47 dated 25.11.2021 issued e-'Press Notice for Bid' along with other works under Dhemaji Water Resources Division, Dhakuakhana Water Resources Division and North Lakhimpur Water Resources Division. It is stated that for the said work in terms of said e-bid dated 25.11.2021, the petitioner along with others submitted their bids, and on 04.01.2022, the concerned Bid Evaluation Committee evaluated the Technical Bids of the bidders. Finding the Technical Bids of three bidders for the said work, including the petitioner, out of four such bidders, the Bid Evaluation Committee admitted those three Bids with the recommendation that Financial Bid of the successful bidders may be opened.

4) On 04.01.2022 itself, the three Financial Bids of those three successful bidders were opened and the concerned Bid Evaluation Committee on evaluating those Financial Bids, Page No.# 3/12

rejected Financial Bids of other two bidders as the quoted value offered by them were found to be less than the Allowable Lowest Quoted Value (ALQV) whereas the value quoted by the petitioner in his financial bid for the said work was admitted by the said Committee.

5) Petitioner also stated that as the respondents in the WRD without issuing any formal order and/or corrigendum cancelling or recalling the earlier tender process issued on 25.11.2021 for the said work and issued re-e-tender for the said work on 07.01.2022 fixing 17.01.2022 as the date of bid opening, the petitioner on 10.01.2022 submitted a representation before the Chief Engineer, WRD, Chandmari, Guwahati stating his grievances against the said act.

6) Since the authorities in the WRD did not consider his said representation dated 10.01.2012, the petitioner on 17.01.2022 filed this writ petition.

7) Petitioner submitted that action of the respondents in the Water Resources Department in issuing the fresh e-tender for the same work on 07.01.2022, more particularly without issuing any formal order for cancellation of the earlier tender process for the said work and without citing any reason, being arbitrary in nature, the said re-tender dated 07.01.2022 should be set aside and quashed.

8) Petitioner also submitted that pursuant to the earlier e-tender dated 25.11.2021 for the said work, sufficient participation were there, where the authorities had the opportunity to compare the financial bids of three technically qualified bidders, out of which petitioner's bid was admitted and therefore, there is no apparent reason for issuance of a fresh tender in respect of the said work. Since the action of the respondents in the Water Resources Department keeping him on lurch, without offering any satisfactory explanation, therefore petitioner urged that the said action in issuing the fresh e-tender for the said work on 07.01.2022 by the respondents being not transparent and discriminatory, the said re-tender dated 07.01.2022 should be set aside and quashed.

9) The petitioner further submitted that though the respondents admitted petitioner's financial bid for the said work on 04.01.2022, but did not award him the said work and rather issued the impugned re-e-tender on 07.01.2022 for the same work and therefore, entire action of the respondents in the Water Resources Department being in violation of the principle of natural justice and in violation of the provisions of Article 14, 16 and 19 of the Constitution of Page No.# 4/12

India, petitioner has prayed for setting aside the impugned re-e-tender dated 07.01.2022 and to direct the respondents to award him the said work in terms of the earlier e-tender dated 25.11.2021, since the respondents had admitted his financial bid for the said work on 04.01.2022.

10) While issuing notice to the respondents in the Water Resources Department, the Court by order dated 17.01.2022 in the interim directed the respondents not to proceed further with regard to the said re-tender dated 07.01.2022 with regard to the said work.

11) In support of the claim of the petitioner, Mr. Deka, placed the Judgments of the Hon'ble Supreme Court in the cases of Mohinder Singh Gill and Another -Vs- The Chief Election Commissioner, New Delhi and others, reported in (1978) 1 SCC 405; Union of India and Others

-Vs- Dinesh Engineering Corporation and Another reported in (2001) 8 SCC 491; a judgement of this Court reported in Deben Das -Vs- State of Assam and Others reported in 2018 (5) GLT 1 and also Central Vigilance Commission Circular relating to transparency in works, purchase, consultancy in the matters of public procurement.

12) Chief Engineer in the Water Resources Department of the State, respondent No.1 has filed its affidavit in the matter on to which the petitioner did not file any reply.

13) Mr. Goswami, learned Additional Advocate General for the respondents stated that the river Gainadi in Dhemaji is one of the most turbulent and fast flowing river, originated from Arunachal Pradesh, enters Assam through Dhemaji District near Likabali and after flowing a distance of about 21 Kms, it outfalls at Moridhol river and that the said work relates to construction of dyke to protect life and properties of people from the flood water of said river.

14) It is submitted that as in the tender process for the said work initiated on 25.11.2021, the petitioner was found to be single responsive bidder, the authority having no alternative had issued the impugned re-e-tender for the said work on 07.01.2022 inviting competitive bid. It is also stated by the respondents that when re-tender has been notified, it automatically implies about cancellation of earlier tender process and that the authority, in similar circumstances, except issuing re-tender, never issued any separate cancellation order, as in the present case. Respondent stated that for the said work pursuant to the Tender process initiated on 25.11.2021, since the authority of the Division concerned found bid of single bidder as responsive, i.e. the bid submitted by petitioner, therefore, it recommended to the Chief Page No.# 5/12

Engineer of Water Resources Department for re-tender, who in turn, after considering the matter, allowed for re-tender for the said work pursuant to which the impugned NIT for the said work was reissued on 07.01.2022.

15) Mr. Goswami for the respondent Water Resources Department also stated that the petitioner was not found to be the only valid bidder and that the authorities did not consider him as the acceptable contractor for the purpose of awarding him the contract for the said work, being the sole responsive bidder, without there being any competitive bid for the said work.

16) Mr. Goswami further stated that considering the larger public interest, the impugned re-tender process for the said work should be allowed to be proceeded with as after April, once rainy season sets in, it will not be possible to complete the said work of raising and strengthening the embankment on both the bank of such a turbulent river like Gainadi in its down-stream of NH-15 along with the extension of the said dyke.

17) Mr. Goswami placed before the Court that respondent authorities rather acted very fairly and in transparent manner, not favouring any bidder and issued re-e-tender for the said work on 07.01.2022 since petitioner was found to be the single responsive bidder for which at the first instance itself he cannot be considered and accepted as the valid bidder for awarding the contract of the said work.

18) Mr. Goswami placed before the Court that in the year 2018 for implementation of the Flood Damage Repairing Scheme, the petitioner with another as a Joint Venture was entrusted with the work of "Immediate measures for closing of M/E along with L/B of river Kumatia from NH-15 to Gurathali Chapori under SDRF for 2017-18 (Breach closing near Adarshagaon" under Dhemaji Water Resource Division and since the petitioner failed to start with the said work, for which the authority concerned in the Water Resources Department were compelled to re-allot the said work to another contractor. Mr. Goswami pointed out that relating to the said work allotted to him in the year 2018, the petitioner submitted consent before the authorities in the Dhemaji Water Resource Division regarding abandoning and rescinding the said work and that these facts have not been placed by the petitioner before the Court though it is one of the required criteria under the conditions of bid and as such the petitioner has not approached the Court with clean hands so as to invoke extra ordinary and equitable jurisdiction under Article Page No.# 6/12

226 of the Constitution.

19) As such, Mr. Goswami submitted that this petition should be dismissed and the respondent authorities should be allowed to complete the process of impugned re-e-tender dated 07.01.2022.

20) In support of his argument Mr. Goswami placed the Judgment of the Hon'ble Supreme Court in the case of State of Jharkhand and Others -Vs- CWE-SOMA Consortium reported in (2016) 14 SCC 172; a judgement of this Court passed in WP(C) No. 1002/2017, Central Vigilance Commission Manual 2017, Water Resources Department records relating to e-tender dated 25.11.2021 for the said work and impugned re-e-tender dated 07.01.2022 in respect of the same work and record relating to cancellation of work issued to the petitioner in the year 2018, allotting the said work to another contractor.

21) Petitioner has annexed the entire Bid Document relating to "Tender- Press Notice for Bid" dated 25.11.2021 of the respondent Water Resources Department with this writ petition pertaining to the said work (Annexure-II).

22) Considered the judgments cited by the learned counsel for the parties, both on behalf of the petitioner as well as the respondents in the Water Resources Department.

23) Section-1 of said Tender Document dated 25.11.2021 relates to Instruction to Bidder (ITB). Clause 4 of Part A, General of said ITB relates to Qualification of the Bidder, where Clause 4(d) reads that - Contractors/Bidders need to submit a self-certified up-to-date progress report of all works awarded to him for the past five years in Water Resources Department, Assam till one month prior to the date of bid publication (need to be self-attested). Non submission of the same will lead to disqualification of the bid (As per Annexure VIII). The bidder shall be responsible for the correctness of the self-certified statement. Any omission and submission of incorrect information may lead to rejection of the bid and cancellation of award of contract.

24) Again Annexure-VIII as provided in Section-4 of said Tender Document relates to 'Form' to be filled by Bidder where the Annexure-VIII, noted above relates to 'Up to date progress report of all the works allotted to the Bidder in past five years in the Water Resources Department, Assam till one month prior to the date of Bid Publication', where the certificate must be self-certified by the bidder.

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25) Part-E of said ITB relates to 'Bid Opening and Evaluation' and Clause 30 of said Part-E relates to 'Evaluation and Comparison of Financial Bids' where 30(I) stipulates that - The Employer/Authorised official will evaluate and compare only the Bids determined to be substantially responsive.

26) Part-F of said ITB relates to Award of Contract and Clause 31 under it relates to Award Criteria, where amongst others, 31(I) reads that - Award of contract is subject to approval from concerned Department/Authority and 31(II) reads that - The department/Tender Committee/Employer/Authorised Official will award the contract to the bidder whose Bid has been determined as substantially responsive after technical and financial evaluation subject to fulfillment of other clauses relating to award of work.

27) Clause-32 of said Part-F relates to 'Employer's Right to accept any Bid and to reject or all Bids and amongst others Clause-32(I) reads as - The Employer/Tender Committee reserves the right to accept or to reject any Bid, and to cancel the Bidding process and reject all Bids, at any time prior to the award of Contract. Clause-32(II) reads as - The acceptance and rejection of tenders/bids is left entirely to the discretion of the Employer/Authorised Official/Tender Committee as applicable and 32(III) reads as - Even though a bidder meets all qualifying criteria and successfully comes out in technical bid evaluation and also appears to be the lowest (L1) bidder while framing the comparative statement, he or they (in case of Firm) are subject to be disqualified if the bidder or any of its partners (of a Firm), (a) Makes misleading or false representations in the forms, statements/declaration and attachments submitted with the bid and (b) Has a record of poor performance during last five years, as on the date of bid such as abandoning the works, rescinding the contract for reasons attributable to the contractor/bidder, inordinate delay in completion, or financial failure due to bankruptcy etc. and (c) Showing very poor performance in implementation of allotted works.

28) Clause-33 of said Part-F relates to Notification of Award and Signing of Agreement, where 33(I) reads as - The Bidder whose Bid has been accepted for award will be intimated through email/Whatsapp/SMS or letter by the Employer/Authorised official.

29) Section 3 of said Tender Document relates to Conditions of Contract and Part-A1 under it relates to definition where 'the Contract' is defined as - The Contract is the contract between the Employer and the Contractor to execute, complete and maintain the Works where it consists of the documents and 'the Employer' is defined as The Employer is the party who will Page No.# 8/12

employ the Contractor to carry out the Works.

30) In the case of Food Corporation of India -Vs- Kamdhenu Cattle Feed Industries, reported in (1993) 1 SCC 71, the Hon'ble Supreme Court have held that -

"In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law: A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.

Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant's perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. Court should interfere where discretionary power is not exercised reasonably and in good faith. Even though the highest tenderer can claim no right to have his tender accepted, there being a power while inviting tenders to reject all the tenders, yet the power to reject all the tenders cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action."

31) In Air India Ltd. -Vs- Cochin International Airport Ltd. reported in (2000) 2 SCC 217 the Hon'ble Apex Court while dealing with a matter involving award of contract, made it clear that - the public authority is free not to accept the highest or the lowest offer and the scope of judicial review is confined to the scrutiny of decision-making process, which can be annulled if the same is found to be vitiated by mala fides, arbitrariness or total unreasonableness.

32) The Hon'ble Supreme Court in the case of Meerut Development Authority reported in (2009) 6 SCC 171 have laid down the legal principle that The bidder who has participated in tender process has no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to the notice inviting tenders in a transparent manner and free from hidden agenda. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if Page No.# 9/12

there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favouritism.

33) It is well settled that in the absence of acceptance of bid and issuance of allotment letter there is no concluded contract and in the absence of such concluded contract, no claim/suit is maintainable for the declaratory relief for a declaration that rejection of the bid was illegal. It is also settled that so long as an order regarding final acceptance of the bid had not been passed by the authority concerned, the highest bidder does not acquire any vested right to have the tender concluded in his favour and in that circumstances the tender proceedings could always be cancelled.

34) In the case of U.P. Avas Evam Vikas Parishad -Vs- Om Prakash Sharma, reported in (2013) 5 SCC 182 Hon'ble Supreme Court have held that - in the absence of completed contract when the public auction had not culminated to its logical end before confirmation of the bid, no right accrued to the highest bidder.

35) The Hon'ble Supreme Court in the case of Laxmikant -Vs- Satyawan, reported in (1996) 4 SCC 208 have laid down that - the "State" or the authority, which can be held to be "State" within the meaning of Article 12 of the Constitution, is not bound to accept the highest tender/offer or bid and the Government could validly retain its power to accept or reject the highest bid in the interest of public revenue.

36) In the case of HUDA -Vs- Orchid Infrastructure Developers (P) Ltd., reported in (2017) 4 SCC 243, the Hon'ble Apex Court have held that - the Government had the right, for good and sufficient reason, not to accept the highest bid but even to prefer a tenderer other than the highest bidder.

37) It is a settled law that judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. In the case of Jagdish Mandal -Vs- State of Orissa, reported in (2007) 14 SCC 517 the Hon'ble Apex Court have held that -

"Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain Page No.# 10/12

special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached';

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interference under Article 226. It is thus imperative that in addition to arbitrariness, illegality or discrimination under Article 14 or encroachment of freedom under Article 19(1)(g), public interest too is demonstrated before remedy is sought. Although the threshold for the latter need not be high, but it is nevertheless essential to prevent bypassing of civil courts and use of constitutional avenues for enforcement of contractual obligations."

38) In the case of State of Jharkhand -Vs- CWE-SOMA Consortium, reported in (2016) 14 SCC 172, the Hon'ble Supreme Court have held that -

"In case of a tender, there is no obligation on the part of the person issuing tender notice to accept any of the tenders or even the lowest tender. After a tender is called for and on seeing the rates or the status of the contractors who have given tenders that there is no competition, the person issuing tender may decide not to enter into any contract and thereby cancel the tender. It is well settled that so long as the bid has not been accepted, the highest bidder acquires no vested right to have the auction concluded in his favour. The State derives its power to enter into a contract under Article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under Article 14 of the Constitution of India. In the case in hand, in view of lack of real competition, the State found it advisable not to proceed with the tender with only one responsive bid available before it. When there Page No.# 11/12

was only one tenderer, in order to make the tender more competitive, the Tender Committee decided to cancel the tender and invited a fresh tender and the decision of the appellant did not suffer from any arbitrariness or unreasonableness."

39) In the case in hand, the petitioner has not been intimated through any of the modes of e-mail/Whatsapp/SMS/letter by the Employer/Authorised official of respondent WRD that his Bid has been accepted for award. It is not the case of the petitioner that the department/Tender Committee/Employer/ Authorised Official of respondent WRD award him either the Letter of Intent and/or the contract to him informing that his Bid has been determined as substantially responsive after technical and financial evaluation and that after accepting his tender and/or awarding him the contract, same has been cancelled and re-tender for the same work has been issued by the respondent WRD. As such in the absence of completed contract when the public auction had not culminated to its logical end before confirmation of the bid and as there is no final acceptance of the Bid of the petitioner being passed by the authority concerned in the WRD, so the petitioner has not acquired any vested right to have the tender concluded in his favour and therefore, respondent in the WRD has the power to issue re-tender for the said work.

40) Since the Tender Condition involved in the case contains that the Employer/Tender Committee reserves the right to accept or to reject any Bid, and to cancel the Bidding process and reject all Bids, at any time prior to the award of Contract and since there was no award of contract to the petitioner, therefore, respondent WRD has such power to issue re-tender for the same work, more particularly in view of lack of real competition, as the petitioner was the sole responsive bidder available before the respondent WRD. It is seen from the record that since the petitioner was the only responsive tenderer, in order to make the tender more competitive, the authority concerned in the WRD issued impugned re-tender for the same work.

41) Insofar as argument of mala fide is concerned, apart from making an averment, there are no specific pleadings in that regard and also there is no suggestion as to how the aforesaid decision of re-tender was actuated with mala fides and on whose part.

42) It is also not denied by the petitioner that within the last five years period from the date of issuance of Tender for the said work on 25.11.2021 he did not abandon the works, rescinding the contract allotted to him by the respondent WRD for reasons attributable to him.

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43) Considering the entire aspect of the matter, the Court is of the opinion that the decision of the respondent in the Water Resources Department in issuing the impugned Notice Inviting Tender under reference No. DHM/SOPD/ GAINADI/2021-22/1 dated 07.01.2022 issued by the Additional Chief Engineer (ACE), Upper Assam Zone (UAZ), Water Resources Department (WRD), Dibrugarh, for the civil work of "Raising and Strengthening along with extension of Gainadi both bank embankment on Down-Stream of National Highway-15" does not suffer from any arbitrariness or unreasonableness or malafide or favoritism.

44) Accordingly, this writ petition being devoid of merit stands dismissed.

45) The interim order passed earlier on 17.01.2022 accordingly stands vacated.

46) Records submitted by the respondents in the Water Resources Department be returned forthwith to Mr. P. Kakati, Standing counsel of the said department.

JUDGE

Comparing Assistant