M/S M & Co. Engineers vs J&K Power Transmission
2023 Latest Caselaw 1285 j&K/2

      IN THE HIGH COURT OF JAMMU & KASHMIR AND
                  LADAKHAT SRINAGAR
                                                  Reserved on: 25.09.2023
                                                  Pronounced on:07.10.2023

                          WP(C) No.1560/2023
                                 c/w
                          WP(C) No.1705/2023

M/S M & CO. ENGINEERS
& CONTRACTORS PVT. LTD. & ORS. ...PETITIONER(S)
      Through: - Mr. Z. A. Shah, Sr. Advocate with
                    Mr. Anurag Kumar Jain, Advocate.
Vs.

J&K POWER TRANSMISSION
CORPORATION LTD. & ORS.                       ...RESPONDENT(S)
      Through: -    Mr. Alla-ud-din Ganai, AAG.

CORAM:HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE


                                 JUDGMENT

WP(C) No.1560/2023

1) Vide e-NIT/TLMD-VIII/TS/19 of 2022 dated 18.11.2022, the

respondent No.1 invited tender for the following works:

"Design, Manufacturing, Supply, Erection, Testing & Commissioning of 2 x10 MVA, 132/33 KV Gas insulated sub-station (GIS) at Sumbal, District Ganderbal, including Design, Manufacturing, Supply, laying, Jointing/Termination, Testing & Commissioning of 33 KV 300 sqmm XLPE Power Cable from GIS Sumbal to Gagengeer (Z-Morh Tunnel)."

2) The petitioner-Joint Venture was one of the six respondents to the

tender notice. It is stated that during scrutiny of the tenders, certain

curable deficiencies were found in all the tenders submitted by six

participants. Accordingly, the respective communications were sent to

WP(C) No.1560/2023

each of the six participants. The petitioner vide communication dated

23.02.2023 was informed by the respondent No.3 that specific

construction experience of bidder in respect of GIS and cable package

was not submitted by the petitioner and was accordingly instructed to

furnish the requisite short fall documents by 01.03.2023 up to 3.00 pm,

so as to enable the respondents to proceed further with the evaluation.

The petitioner in response to the aforesaid communication, addressed a

communication dated 28.02.2023 to the respondent No.3, stating therein

that M/S Garima Enterprises, Ghaziabad, was the partner of the Joint

Venture and their representatives were present in the pre-bid meeting

held on 26.12.2022 in the office of Chief Engineer at Srinagar. It was

also stated that the petitioner has also submitted an authorization and

performance certificate from OEMs for GIS (M/S Hitachi Energy India

Limited) and 33 KV Cable (M/S Universal Cables Limited) for the

related works executed by the petitioner and also the undertaking that the

OEM's will make their technical and engineering staff fully available for

supervision /erection and commissioning of the project. The petitioner-

Joint Venture also enclosed specific and general experience of 'M/S

Garima Enterprises, Ghaziabad' along with work done certificate and a

copy of the Joint Venture Agreement. Thereafter, vide communication

dated 20.03.2023 (e-mail), the petitioner-Joint Venture was intimated

that it was found to be responsive during technical evaluation. Thereafter

vide communication dated 23.03.2023, the petitioner-Joint Venture was

WP(C) No.1560/2023

informed that its bid has been admitted by the Committee and petitioner

was asked to remain in touch with the Tender Inviting Authority. The

Contract Committee in its meeting held on 12.05.2023, recommended

that the matter be placed before the Board of Directors for approval. It is

further averred that the petitioner-Joint Venture is unaware as to what

transpired thereafter till 09.06.2023 and all of a sudden the Contract

Committee, which had previously recommended the case of the

petitioner for being placed before the Board of Directors for approval,

reversed its decision and recommended that e-NIT dated 18.11.2022 be

cancelled.

3) The petitioner has impugned the decision of the Contract

Committee-1 bearing No.TLMD-VIII/TS/957-61 dated 09.06.2023, on

the grounds that the Contract Committee had no authority to cancel the

e-NIT dated 18.11.2022 when the Committee had decided to place the

matter before the Board of Directors. It is also submitted that the

decision to allot or not to allot the contract or to cancel the tender notice

vests exclusively in the Board of Directors, which is the competent

authority and no reason has been assigned or disclosed after the first

meeting of the Contract Committee as to why the contract was directed

to be cancelled by the said Committee, as such, the action of the

Contract Committee is arbitrary, unreasonable and discriminatory. It is

also urged that if the tender has been cancelled at the instance of some

external agency, then in compliance to the principles of natural justice,

WP(C) No.1560/2023

the petitioner was entitled to be informed about any such interference by

a stranger in the tendering process.

4) The response has been filed by the respondents stating therein

that the respondents are performing their duties for the benefit of the

general public and none of the constitutional as well as fundamental

rights of the petitioner have been violated or infringed at the hands of

respondents. It is stated that the JKPTCL had issued e-Tender

No.TLMD-VIII/TS/19 of 2022 dated 18.11.2022 with an estimated cost

of Rs.7730.00 lacs which was later reduced to Rs.6803.00 lacs due to

reduction in the underground 33 KV cable Circuits. It is further stated

that Techno-Commercial Bids of six bidders were opened online on

11.02.2023 and during preliminary evaluation of the Techno-

Commercial Bids, some shortfalls were noticed by the Tender Opening

& Evaluation Committee in almost all the bids and the requisite

documents in respect of those shortfalls were obtained from the

respective bidders. Thereafter, technical bids were opened online

wherein the petitioner emerged as first bidder. It is further submitted

that the Committee besides discussing other points, agreed that being

L-1, the qualification documents, Joint Venture agreement and bid

validity of successful bidder (petitioner) may be re-verified before

recommending the case to the Board of Directors. The Chief Engineer

(Transmission), JKPTCL, Kashmir Srinagar (Member Secretary)

apprised the members of the Contract Committee about the urgency of

WP(C) No.1560/2023

work and as such, the case was recommended for submission to the

Board of Directors for approval. After recommendation of the case by

the Contract Committee for approval of Board of Directors, certain

queries in respect of qualification criteria of the petitioner were raised.

The respondent No.3 requested all the members of the Contract

Committee-1 to revisit the case by going through the detailed note

prepared by JKPTCL in a meeting held on 12.05.2023, the points raised

by other bidders in their correspondences and the reply filed by the

JKPTCL, Kashmir and take final call as directed by Secretary

Technical, JKPDD (Chairman), vide communication dated 02.06.2023.

It is also stated that the petitioner had not submitted JV agreement or

any agreement or any qualification document of M/S Garima

Enterprises Ghaziabad in their initial bid upto the last date of online

submission of bids i.e. 10.02.2023 and nor there had been any mention

of M/S Garima Enterprises Ghaziabad in the case history, therefore, in

the light of Rule 5.4.5, the JV agreement and other qualification

documents accepted by the Tender Opening & Evaluation Committee

after the opening of the technical bids in hush-hush manner was found

in contradiction to the standing norms of tendering/Standard Bid

Documents. Moreso, the agreement submitted by the petitioner was a

notarized one, not on non-judicial stamp paper of Rs.100/ as stipulated

in the Standard Bid Documents. It is further stated that in order to avoid

further conflicts which may result in delay in execution of this vital

WP(C) No.1560/2023

project of NHIDCL, it was unanimously decided by all the members of

the Contract Committee-I that the recommendation made by the

Committee on 12.05.2023 be treated as null and void and the e-NIT

No.TLMD-VIII/TS/19 of 2022 dated 18.11.2022 be cancelled. It is also

pleaded by the respondents that in the e-NIT as well as SBD, it is also

categorically mentioned that the department reserves the right to cancel

any or all the e-Bids/the e-Bid process without assigning any reason

thereof and further that the decision of the issuing authority will be

final and binding.

5) Mr. Z. A. Shah, learned senior counsel, appearing for the

petitioner, submitted that no reason has been assigned by the

respondents while issuing the communication dated 09.06.2023

whereby the e-NIT dated 18.11.2022 was cancelled, in respect of which

the petitioner had emerged as successful bidder. He further submitted

that once the petitioner had emerged as successful bidder, the petitioner

was required to be heard before cancelling the NIT and that too at the

instance of a stranger.

6) Per contra, Mr. Alla-ud-din Ganai, AAG, submitted that it is the

prerogative of the Tender Inviting Authority to accept or reject bid of a

bidder and the petitioner has no vested right for allotment of the

contract. He laid much stress on the point that the writ petition filed by

the petitioner has been rendered in-fructuous, as the e-NIT stands

cancelled.

WP(C) No.1560/2023

 7)    Heard and perused the record.


8)    The perusal of the record reveals that the petitioner submitted its

technical bid and projected itself as a Joint-Venture between M/S M &

Co and M/S Magpie Hydel Construction Operation Industries Pvt. At

serial No.13, it was stated by the petitioner that JV agreement has been

submitted and at serial No.14 under the column 'incorporation', the

particulars of M/S M & Co and M/S Magpie Hydel Construction

Operation Industries Pvt Ltd. have been mentioned. The record further

depicts that vide communication dated 23.02.2023, the following

shortfall was found and intimated to the petitioner-Joint Venture by the

respondents and they were directed to furnish the requisite shortfall

documents by 01.03.2023 upto 3.00 PM:

Specific supply experience of proposed manufacturer MAF for supply of 33Kv cables obtained from M/s KEC international Ltd. Mumbai but their experience of having executed any supply contract not submitted.

9) In reply to the aforesaid communication, the petitioner vide

communication dated 28.02.2023 forwarded the specific & general

experience of M/s Garima Enterprises, Ghaziabad along with work

done certificates and copy of JV agreement to the respondents.

10) From the record it appears that one complaint was filed in

respect of the tendering process undertaken by the respondents,

pursuant to which the decision arrived at by the Contract Committee on

12.05.2023 was revisited and it was found that the petitioner at the time

WP(C) No.1560/2023

of submitting its bid had nowhere mentioned in respect of its Joint

Venture with M/S Garima Enterprises, Ghaziabad. The Contract

Committee in its meeting held on 09.06.2023 took note of Rule 5.4.5

(Clarification of Bids/Shortfall documents) of Manual for Procurement

of Works, 2019, Ministry of Finance, Department of Expenditure, and

came to the conclusion that no JV agreement or any qualification

document of M/S Garima Enterprises, Ghaziabad was

submitted/uploaded by the bidder in their initial bid till last date of

online submission of bids i.e. 10.02.2023 and also there was no

mention of M/S Garima Enterprises, Ghaziabad, in the case history,

therefore, the JV agreement and other qualification documents ought

not to have been accepted by the Tender Opening & Evaluation

Committee after opening of technical bids. The petitioner has not

disputed about the relevant Rule as relied upon by the respondents. The

Rule 5.4.5 of Manual for Procurement of Works, 2019 besides other

limitations in respect of clarification of bids/shortfall documents

provides that the shortfall information/documents should be sought

only in case of historical documents which pre-existed at the time of

tender opening and which have not undergone change since then. It

further prescribes that so far as submission of documents is concerned

with regard to the qualification criteria, after submission of tender, only

shortfall documents should be asked for and considered.

11) In this context, it would also be appropriate to take note of the

WP(C) No.1560/2023

relevant clause of the e-NIT under reference which is reproduced as

under:

"The Department reserves the right to cancel any or all the e-Bids/the e-Bid process without assigning any reason thereof. The decision of department will be final and binding."

12) The action of the respondents in rejecting the bid of the

petitioner and cancelling the e-NIT cannot be faulted, particularly when

the respondents have demonstrated a sufficient reason for the same as

the petitioner had not mentioned in its technical bid about its Joint

Venture with M/S Garima Enterprises, Ghaziabad and also did not

submit any such Joint Venture agreement with M/S Garima

Enterprises, Ghaziabad till 10.02.2023 i.e. the last of online submission

of bids. The contract committee in its meeting held on 12.05.2023

erroneously for reasons best known to the committee did not avert to

the issue of acceptance of M/S Garima Enterprises Ghaziabad as one of

the partners of Joint venture, when M/S Garima Enterprises figured

nowhere in the documents submitted by the petitioner and even the

joint venture agreement was not submitted till the last date of online

submission of bids. The petitioner under the garb of submitting

shortfall documents could have never submitted an altogether new JV

agreement with new partner which was not submitted by the petitioner

till the last date of submission of online bids. The acceptance of a new

J-V agreement with M/S Garima Enterprises after the last date of

submission of online bids was a serious lapse on the part of the contract

WP(C) No.1560/2023

committee, as it amounted to acceptance of a bid submitted by an

entirely new entity. By revisiting the decision arrived at in the meeting

held on 12.05.2023, in its subsequent meeting on 09.06.2023, the

wrong committed earlier has been undone by the contract committee. It

hardly matters as to who brought to the notice of the respondents, the

violation of the Rules by the contract committee.

13) In "Tata Motors Ltd. v. Brihan Mumbai Electric Supply &

Transport Undertaking (BEST), 2023 SCC OnLine SC 671", the

Hon'ble Supreme Court has held as under:

48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also

WP(C) No.1560/2023

not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489)

54. As observed by this Court in Jagdish Mandal v. State of Orissa, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.

(emphasis added)

14) In view of the above, the present petition is found to be

misconceived and the same is dismissed accordingly. Interim direction,

if any, shall stand vacated.

WP(C) No.1705/2023

1) In view of the cancellation of e-NIT dated 10.06.2023 vide letter

dated 25.07.2023, this writ petition has been rendered infructuous and is

accordingly dismissed.

2) The record be returned to learned counsel for the respondents.

(Rajnesh Oswal) Judge SRINAGAR 07.10.2023 "Bhat Altaf, PS"

                   Whether the order is speaking:           Yes/No
                   Whether the order is reportable:         Yes/No



WP(C) No.1560/2023