Jharkhand High Court
M/S Dev Prabha Construction Pvt. ... vs The Bharat Coking Coal Limited on 9 June, 2021
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IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No.94 of 2021
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M/s Dev Prabha Construction Pvt. Ltd. having its registered
office at 2nd Floor Dev Villa, behind Radha Swami Arcade,
Saraidhela, P.O. & P.S. - Saraidhela, District - Dhanbad,
through its authorized signatory Vikash Kumar Singh, aged
about 33 years, S/o Ram Prasad Singh, R/o Adarsh Nagar,
Simla Behal, Jharia, Dhanbad, P.O. & P.S. - Jharia, District -
Dhanbad.
... ... Appellant
Versus
1. The Bharat Coking Coal Limited, having its registered
office at Koyla Bhawan, P.O. Koyala Bhawan, P.S. -
Saraidhela, District - Dhanbad, through its Chairman-
cum-Managing Director, Bharat Coking Coal Limited,
having its registered office at Koyla Bhawan, P.O. - Koyla
Bhawan, P.S. - Saraidhela, District - Dhanbad.
2. The Chairman-cum-Managing Director, Bharat Coking
Coal Limited, having its registered office at Koyla
Bhawan, P.O. - Koyla Bhawan, P.S. - Saraidhela, District
- Dhanbad.
3. The Director Technical (Operation), Bharat Coking Coal
Limited, having its registered office at Koyla Bhawan,
P.O. - Koyla Bhawan, P.S. - Saraidhela, District -
Dhanbad.
4. The General Manager (C.M.C), Bharat Coking Coal
Limited, having its registered office at Koyla Bhawan,
P.O. - Koyla Bhawan, P.S. - Saraidhela, District -
Dhanbad.
5. The National Informatics Centre (NIC), through its
Authorized officer, Bharat Coking Coal Limited, having its
registered office at Koyla Bhawan, P.O. - Koyla Bhawan,
P.S. - Saraidhela, District - Dhanbad.
... ... Respondents
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CORAM : HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
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For the Appellant : Mr. Ajit Kumar, Senior Advocate
Ms. Aparajita Bhardwaj, Advocate
For the Respondent BCCL : Mr. Amit Kumar Das, Advocate
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ORAL JUDGMENT
Order No. 02 : Dated 9th June, 2021
With the consent of the parties, hearing of the matter
has been done through video conferencing and there is no
complaint whatsoever regarding audio and visual quality.
2. The instant intra-Court appeal is under Clause 10 of the
Letters Patent directed against the order/judgment dated
18.02.2021 passed by learned Single Judge of this Court in
W.P.(C) No. 1757 of 2020 whereby and whereunder the writ
court has declined to interfere with the tender cancellation
order as contained under Reference No. BCCL/CMC/F-e-NIT
/Coal/Tptn38/Bastacolla/2020 dated 17.06.2020 whereby
the Notice Inviting Tender under Reference No.BCCL/CMC/F-
e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020
has been cancelled.
3. The brief facts of the case which need to be enumerated
herein, read as under :-
The writ petitioner is engaged in the business of
executing various kinds of contractual works including
mining and transportation. The respondent BCCL has come
out with an online open tender vide NIT no. BCCL/ CMC/F-e-
NIT/Coal/Tptn38/ Bastacolla/2020/59 dated 28.01.2020 for
transportation of Coal from different sources of Bastacolla
area, BCCL to different destinations in BCCL including allied
jobs for 1186 days. The estimated cost as declared in the e-
Notice Inviting Tender was Rs.153,36,29,906/- at diesel base
price @ Rs.67.60 per litre.
Altogether, five bidders including the writ petitioner
participated in the said tender process and the bid of one of
the bidders, namely, Dhansar Engineering Co. Pvt. Ltd. was
declared as rejected in the technical evaluation in view of the
conditions laid down in clause 9 of General Terms and
Conditions of the NIT having quoted the highest value.
The tender summary report containing the technical bid
opening summary and technical evaluation summary details
were uploaded by the respondents on 21.02.2020 at e-
procurement system of Coal India Limited (CIL). The writ
petitioner as well as three other bidders qualified in the
technical evaluation of the bids which was informed through
e-mail communication dated 21.02.2020 and called for
e-auction to be started from 01:00 PM on 21.02.2020. The
price bid of all the bidders were more than 10% of the
estimated value of the work (Rs.153,36,29,906.00) and thus
as per the terms and conditions of the NIT, the respondents
fixed the auction starting price at Rs.168,69,92,897/- and
the Reverse Auction Process (in short RAP) was started.
During the Reverse Auction Process, only two bidders,
namely, AKA Logistics Pvt. Ltd. and the writ petitioner
participated and quoted their respective prices at
Rs.167,89,92,897.00 and Rs.167,09,92,897.00, respectively,
and thus the writ petitioner was declared as L-1.
The writ petitioner, after being declared L-1, invoked the
provisions of clause 20.2 of the ITB as mentioned in the NIT
and vide its letter dated 22.02.2020 offered suo moto rebate
worth about 6.75% and again vide another letter dated
25.02.2020 offered suo moto rebate of further 6.22% and
thereby the price quoted by the writ petitioner stood at
Rs.162,90,34,128/- only against the original declared L-1
price of the writ petitioner, which was Rs.167,09,92,897/.
The award of the contract could not be issued due to
imposition of nationwide lockdown with effect from
25.03.2020 and suddenly, the writ petitioner could know
about the cancellation order intimating it vide reference
no.BCCL/CMC/F-e-NIT/Coal/Tptn38/Bastacolla/2020 dated
17.06.2020 uploaded through the office of the respondent
no.4, whereby the said authority decided to cancel the tender
in question, which was notified under Ref. No.BCCL/CMC/F-
e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020
on account of technical reasons, being aggrieved with the
same, the writ petitioner approached before the writ court.
The plea was taken before the writ court on behalf of the
writ petitioner that the writ petitioner having been declared
as L-1, after a transparent bidding process/reverse auction
process, is entitled to be awarded the contract in question
taking into consideration that one of the bidders, namely,
M/s Om Sharda Logistics Pvt. Ltd. had decided to remain out
of the fray.
The further plea of the writ petitioner was that the
tender has been cancelled on the ground of mere mistake or
technical error in the reverse bidding process as such they
were required to resort to the provision of revocation of tender
process from appropriate stage i.e. technical bid opening
stage or the price opening stage as mentioned in Clause 34 of
the ITB of the NIT hence the cancellation of tender could not
have been resorted to by the respondents as per the terms
and conditions of NIT itself.
It has further been contended that the bid of M/s Om
Sharda Logistics Pvt. Ltd. was thoroughly defective and non-
acceptable because it had quoted the rate of GST @ 5% for
item nos.1, 2, 3 and 6 of the BOQ which should have been
12% as applicable and it had never approached the
respondents for modification or correction of its price bid and
the said error remained uncorrected in the offer of the said
party and thereby its price bid was fit to be rejected, however,
the respondents committed illegality in including M/S Om
Sharda Logistics Pvt. Ltd. for participating in the reverse
auction process.
It was further argued on behalf of the writ petitioner
before the writ court that when the entire tender process
stands the test of fairness and reasonability, the same cannot
be aborted or cancelled arbitrarily even without resorting to
the process and conditions of Clause 34 of ITB of the NIT.
The respondent BCCL has taken the plea before the writ
court that the Notice Inviting Tender since is an invitation to
offer and merely because the writ petitioner has participated
in the tender, does not create any right in its favour nor the
respondents are denuded of their option to cancel the tender.
It has further been argued that the comparative chart
generated before Reverse Auction Process showed the lowest
amount quoted as Rs.174,96,63,042/- i.e. 14.086% above
estimated cost. Accordingly, „start bid‟ price was set for
triggering Reverse Auction Process at Rs.168,69,92,897/- i.e.
estimated cost +10% as per sub-clause no.4 of 9 B of NIT/TD,
which describes the procedure of RAP. Decremental price was
set at Rs.80,00,000/-. Out of four bidders, only two
participated in RAP which was triggered by one of the
bidders, namely, A.K.A. Logistics Pvt. Ltd. reducing the value
of „Start Bid‟ by one decremental price of Rs.80,00,000/-.
Subsequently, the petitioner also reduced the value by one
decremental price of Rs.80,00,000/-. Resultantly, overall
value of start bid price was reduced by Rs.1,60,00,000/-
during Reverse Auction Process and the figure of start bid
price came to Rs.1,67,09,92,897/-.
After completion of Reverse Auction Process, BOQ
summary details and BOQ of all bidders were downloaded
from the system and then it was observed that the lowest
quoted amount shown in comparative chart before Reverse
Auction Process was in tune with BOQ summary details
generated by system after Reverse Auction Process, whereas
the amount shown in BOQ Summary details before Reverse
Auction Process mismatched with the amount shown in the
BOQ submitted by the bidders during Reverse Auction
Process, as generated by portal after completion of Reverse
Auction Process.
The matter was reported to NIC over e-mail with a
request to clarify the matter and to take necessary measures
for rectification of error, if any. In this regard, NIC replied
over e-mail that while designing a BOQ, the system used to
follows certain logic for generating comparative chart. While
preparing the BOQ by the department user, the GST row had
been added as a line item which should have been put as a
column which was the cause of the error. It was advised that
while designing new BOQ, it should be tested in the demo site
and then only it should be put on live site.
So far as this case is concerned, it has been advised by
the NIC that the system had included the GST amount as a
line item and generated the comparative chart and hence an
erroneous value occurred in the comparative chart.
The Tender Committee after elaborate discussion
observed that the value of the bid quoted by Om Sharda
Logistics Pvt. Limited was Rs. 164,50,51,160/- which was
only known to it before Reverse Auction Process, however, it
neither complained when a higher value (estimated cost +
10%) was set as start bid price nor agitated even after
conclusion of Reverse Auction Process declaring the
petitioner as L-1 bidder by the system, rather the said bidder
i.e. Om Sharda Logistics Pvt. Limited submitted an
application for refund of EMD on 03.03.2020.
The tender committee found that the writ petitioner was
declared as L-1 bidder due to the technical error in the
system though initial lower bid of Om Sharda Logistics Pvt.
Ltd. was available in the system and having found such
anomaly and after elaborate discussion made on the issue
decision has been taken by the competent authority for
cancellation of the tender process.
Learned Single Judge, after taking into consideration
the rival submissions advanced on behalf of the parties, has
dismissed the writ petition against which the present intra-
court appeal has been filed.
4. Mr. Ajit Kumar, learned senior counsel appearing for the
appellant/writ petitioner has submitted before this Court by
taking aid of the provision of Clause 34 of ITB of NIT which
provides that in case of error in the online evaluation of
tender due to technical error in the system the process for
revocation of tender ought to have been initiated instead of
cancellation of tender as provided under Clause 34 of ITB of
NIT.
It has further been submitted that the order passed
pertaining to cancellation of tender process since is of one
line, the same cannot be said to be a reasoned order,
however, the reason has been explained in the counter
affidavit which is not permissible in view of law laid down by
Hon'ble Apex Court in Mohinder Singh Gill & Another Vs.
Chief Election Commissioner, New Delhi & Others,
[(1978) 1 SCC 405].
The further argument has been advanced of mala fide
committed on behalf of the respondents in cancelling the
tender process in order to help the third party.
5. Per contra, Mr. Amit Kumar Das, learned counsel
appearing for the respondent BCCL, has submitted that there
is no error in the decision taken by the competent authority
for cancellation of tender process as because it has been
found that the revocation is possible till technical evaluation
stage in Non-ATP tenders but in this case, the financial
opening and the auction also got completed and the overall
comparative chart is also generated and as such, the
revocation, at this stage, is not possible in view of the
provision as contained under Clause 34 of ITB of NIT and
therefore, it cannot be said that the decision of the authority
is based upon any extraneous reason and to support any
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third party.
It has further been argued that so far as the argument
advanced on behalf of the learned counsel for the appellant
that due to want of reason in the impugned order of
cancellation process, the said decision is not sustainable in
the eyes of law is concerned, the reason has been explained
to the effect that due to technical error the tender process
has been found to suffer from infirmity and as such, it cannot
be said that there is no reason assigned in the impugned
decision.
Further, so far as the allegation of mala fide is
concerned, it has been submitted by Mr. Das that making
allegation of mala fide is very easy but proving it is very
difficult. No specific allegation of mala fide against any officer
has been made and further, mala fide against whom and for
whose benefits, has not been disclosed, however, orally it has
been argued by learned senior counsel appearing for the
appellant/writ petitioner that the entire tender process has
been cancelled in order to aid M/s Om Sharda Logistics Pvt.
Ltd. but very surprisingly M/s Om Sharda Logistics Pvt. Ltd.
has not been impleaded as party along with the authorities
against whom the allegation of mala fide has been made,
therefore, the argument alleging mala fide against the
respondents does not stand legally and the learned Single
Judge, after taking into consideration the fact that merely
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becoming L-1 in tender process does not create any right,
therefore, the decision taken for cancellation of tender has
been declined to be interfered with which suffers from no
infirmity.
6. We have heard the learned counsel for the parties, gone
across the materials available on record including the
annexures appended thereto.
7. Before going into the legality and propriety of the
impugned order, this Court deems it fit and proper to refer
certain admitted facts of this case as has been pleaded by the
parties.
The respondent BCCL has come out with an online open
tender vide NIT no. BCCL/ CMC/F-e-NIT/Coal/Tptn38/
Bastacolla/2020/59 dated 28.01.2020 for transportation of
Coal from different sources of Bastacolla area, BCCL to
different destinations in BCCL including allied jobs for 1186
days. The estimated cost as declared in the e-Notice Inviting
Tender was Rs.153,36,29,906/- at diesel base price @
Rs.67.60 per litre.
Altogether, five bidders including the writ petitioner
participated in the said tender process and the bid of one of
the bidders, namely, Dhansar Engineering Co. Pvt. Ltd. was
declared as rejected in the technical evaluation having quoted
the highest value. The writ petitioner as well as three other
bidders qualified in the technical evaluation of the bids which
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was informed through e-mail communication dated
21.02.2020 and called for e-auction to be started from 01:00
PM on 21.02.2020. The price bid of all the bidders were more
than 10% of the estimated value of the work
(Rs.153,36,29,906.00) and thus as per the terms and
conditions of the NIT, the respondents fixed the auction
starting price at Rs.168,69,92,897/- and the Reverse Auction
Process was started. During the Reverse Auction Process,
only two bidders, namely, AKA Logistics Pvt. Ltd. and the writ
petitioner participated and quoted their respective prices at
Rs.167,89,92,897.00 and Rs.167,09,92,897.00, respectively,
and thus, the writ petitioner was declared as L-1. The writ
petitioner, after being declared L-1, invoked the provisions of
clause 20.2 of the ITB as mentioned in the NIT and vide its
letter dated 22.02.2020 offered suo moto rebate worth about
6.75% and again vide another letter dated 25.02.2020 offered
suo moto rebate of further 6.22% and thereby the price
quoted by the writ petitioner stood at Rs.162,90,34,128/-
only against the original declared L-1 price of the writ
petitioner, which was Rs.167,09,92,897/.
The award of contract could not be issued due to
imposition of nationwide lockdown with effect from
25.03.2020 and suddenly, the writ petitioner could know
about the cancellation order intimating it vide reference
no.BCCL/CMC/F-e-NIT/Coal/Tptn38/Bastacolla/2020 dated
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17.06.2020 uploaded through the office of the respondent
no.4, whereby the said authority decided to cancel the tender
in question, which was notified under Ref. No.BCCL/CMC/F-
e-NIT/Coal/Tptn38/Bastacolla/2020/59 dated 28.01.2020
on account of technical reasons and being aggrieved with the
same, the writ petitioner approached before the writ court by
invoking the jurisdiction conferred to this Court under Article
226 of the Constitution of India questioning the decision of
the authority but the said writ petition has been dismissed.
8. In the context of cancellation of tender process, Mr. Ajit
Kumar, learned senior counsel appearing for the
appellant/writ petitioner, has mainly relied upon the
applicability of Clause 34 of ITB of NIT which speaks about
revocation of tender process. In addition to the said
argument, it has been argued that when there is a provision
of revocation of the tender process to be started from the
opening of the bid stage, the decision of the authority for
cancellation of the tender process in view of the provision of
Clause 35 of ITB of NIT cannot be said to be justified.
On the other hand, Mr. Amit Kumar Das, learned
counsel appearing for the respondent BCCL while referring to
the opinion of the NIC, which is part of Annexure-12 of this
memo of appeal wherein it has been stipulated that the
revocation is possible till technical evaluation stage in Non-
ATP tenders but in this case, the financial opening and the
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auction also got completed and the overall comparative chart
is also generated and as such, at this stage revocation is not
possible and, therefore, the authorities have not resorted to
the provision of Clause 34 of ITB of NIT, rather they have
resorted to the provision of Clause 35 by cancelling the
tender process.
9. Before going further, this Court deems it fit and proper
to deal with the scope of judicial review in tender matters
under Article 226 of the Constitution of India.
In Tata Cellular v. Union of India [(1994) 6 SCC 651]
the Hon'ble Apex Court has examined the scope of judicial
review in the case of a tender awarded by a public authority
for carrying out certain work. This Court acknowledged that
the principles of judicial review can apply to the exercise of
contractual powers by government bodies in order to prevent
arbitrariness or favouritism. The Hon'ble Apex Court also
observed in the said judgment that the right to choose cannot
be considered as an arbitrary power.
The Hon„ble Apex Court in the case of Tata Cellular
(Supra) has been pleased to hold 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. It is thus different
from an appeal. When hearing an appeal, the court is
concerned with the merits of the decision under appeal. Since
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the power of judicial review is not an appeal from the
decision, the Court cannot substitute its own decision.
The Hon„ble Apex Court therefore, has held the following
principles at paragraph 94 which read as hereunder :-
"94.
(1) The modern trend points to judicial restraint in administrative
action.
(2) The court does not sit as a court of appeal but merely reviews
the manner in which the decision was made.
(3) The court does not have the expertise to correct the
administrative decision. If a review of the administrative
decision is permitted it will be substituting its own decision,
without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of
contract. Normally speaking, the decision to accept the tender
or award the contract is reached by process of negotiations
through several tiers. More often than not, such decisions are
made qualitatively by experts.
(5) The Government must have freedom of contract. In other
words, a fair play in the joints is a necessary concomitant for
an administrative body functioning in an administrative
sphere or quasi-administrative sphere. However, the decision
must not only be tested by the application of Wednesbury
principle of reasonableness (including its other facts pointed
out above) but must be free from arbitrariness not affected by
bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden
on the administration and lead to increased and unbudgeted
expenditure."
The same principle has been reiterated by the Hon'ble
Apex Court in Raunaq International Ltd. v. I.V.R.
Construction Ltd. & ors., [(1999) 1 SCC 492].
In Fertilizer Corpn. Kamgar Union v. Union of India,
[(1981) 1 SCC 568], the Hon'ble Apex Court at paragraph 35
has been pleased to hold that the function is limited to be
tested whether the administrative action has been fair and
free from the taint of unreasonableness and has substantially
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complied with the norms of procedure set for it by rules of
public administration.
The same view has been reiterated in Asia Foundation
& Construction Ltd. v. Trafalgar House Construction (I)
Ltd. & ors. [(1997) 1 SCC 738], observing therein that
judicial review of contractual transactions by government
bodies is permissible to prevent arbitrariness, favouritism or
use of power for collateral purposes. The Hon'ble Apex Court
has added a further dimension to the undesirability of
intervention by pointing out that where the project is a high-
cost project for which loans from the World Bank or other
international bodies have been obtained after following the
specifications and procedure of such a body, it would be
detrimental to public interest to interfere.
The same principles have also been reaffirmed in New
Horizons Ltd. & anr. v. Union of India & ors.[(1995) 1
SCC 478]. The Hon'ble Apex Court again emphasising the
need to allow for certain flexibility in administrative decision-
making, observing that the decision can be challenged only
on the Wednesbury principle of unreasonableness, i.e.,
unless the decision is so unreasonable that no sensible
person would have arrived at such a decision, it should not
be upset.
In Delhi Science Forum & Ors. v. Union of India &
anr. [(1996) 2 SCC 405] the Hon'ble Apex Court again
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observed that if a reasonable procedure has been followed,
the decision should not be challenged except on the
Wednesbury principle of unreasonableness.
It is settled position of law that the writ court while
interfering with the tender process can only go into the
situation where there is any error in the decision making
process by resorting to the provision of Article 226 of the
Constitution of India and not to the decision taken by the
authority.
10. We, in order to appreciate the arguments, deem it fit
and proper to go through the provision of Clause 34 and
Clause 35 of ITB of NIT which read as hereunder :-
"34 REVOCATION OF TENDER PROCESS:
There may be situation when the decision of Tender
Committee may have to be changed subsequently on account
of a Court's verdict. Also, there may be circumstances when
online evaluation of tender is not done correctly due to
mistake by the Evaluator or due to technical error in the
system, which may lead to cancellation of tender.
In order to avoid the cancellation of tender in such cases, the
tender process needs be reverted back to appropriate stage
(i.e. bid opening stage etc.) to comply with the Court's verdict
or to rectify the error committed by the Evaluator. This
provision in the e-Procurement to system has been
introduced with an objective to abide by the court‟s verdict or
to ensure that the tender process should not suffer due any
mistake committed by an individual or due to any technical
error in the system.
Revocation of Tender process back to Technical-bid opening
stage or Price-bid opening stage from an advanced stage
shall be done under the following circumstances:
a. To comply with the directives of Hon'ble Court of
Law.
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b. If the Evaluator makes a mistake in online
evaluation of tender, which is not in line with the
Tender Committee decision.
c. If there is a error in the online evaluation of tender
due to technical error in the system.
Revocation of Tender process will be done with the specific
approval of the concerned Director.
In all such cases the Tender Revocation Notice must contain
the details of the circumstances leading to revocation of
tender process.
The Revocation of Tender on the e-Procurement portal can be
done by way of creation and publication of corrigendum.
However, since Revocation of Tender, in true sense, is not a
Corrigendum to NIT, the Tender Revocation Notice will be
uploaded only on the e-Procurement portal
https://coalindiatenders.nic.in.
In case of revocation of Tender at any stage the auto-refund
of EMD may not work properly and in such case it may be
required that Tender Inviting Authority to arrange refund of
EMD through conventional system of refund of EMD."
"35 CANCELLATION OF TENDER:
Any tender published on e-Procurement portal must be
concluded to its logical end i.e. either "Award of Contract" or
"Cancellation of Tender" or "Retender".
The Tender Cancellation Notice must contain the details of
the circumstances leading to cancellation of tender.
The Cancellation of Tender on the e-Procurement portal can
be done by way of creation and publication of corrigendum.
However, since Cancellation of Tender, in true sense, is not a
Corrigendum to NIT, the Tender Cancellation Notice will be
uploaded only on the e-Procurement portal
https://coalindiatenders.nic.in.
All the details of technical bid and price bid will be kept
preserved in the archives for auditing purposes and the same
can be accessed with special authorization. The IP address of
all the bidders who has participated in the bid along with
timing and date will also be kept preserved in the system."
It is evident from the provision of Clause 34 of ITB of NIT
which speaks about revocation of tender process. The said
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process can be resorted in a situation when the decision of
Tender Committee may have to be changed subsequently on
account of a Court's verdict. Also, there may be
circumstances when online evaluation of tender is not done
correctly due to mistake by the Evaluator or due to technical
error in the system, which may lead to cancellation of tender.
In order to avoid the cancellation of tender in such cases, the
tender process needs be reverted back to appropriate stage
(i.e. bid opening stage etc.) to comply with the Court's verdict
or to rectify the error committed by the Evaluator. This
provision in the e-Procurement to system has been
introduced with an objective to abide by the court‟s verdict or
to ensure that the tender process should not suffer due any
mistake committed by an individual or due to any technical
error in the system. Revocation of Tender process back to
Technical-bid opening stage or Price-bid opening stage from
an advanced stage shall be done under the following
circumstances:
a. To comply with the directives of Hon'ble Court of Law.
b. If the Evaluator makes a mistake in online evaluation
of tender, which is not in line with the Tender
Committee decision.
c. If there is a error in the online evaluation of tender
due to technical error in the system.
In all such cases the Tender Revocation Notice must
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contain the details of the circumstances leading to revocation
of tender process. Further, in case of revocation of Tender at
any stage the auto-refund of EMD may not work properly and
in such case it may be required that Tender Inviting
Authority to arrange refund of EMD through conventional
system of refund of EMD.
Thus, it is evident from the provision of Clause 34 of ITB
of NIT that the revocation of tender process can be resorted to
in a case which may lead to cancellation of tender i.e., in case
of a decision of the court of law or when online evaluation of
tender is not done correctly by mistake of evaluator or if there
is a error in the online evaluation of tender due to technical
error in the system and in order to avoid the cancellation of
tender in such cases, the tender process needs be reverted
back to appropriate stage.
Thus, it is evident that if the entire provision of Clause
34 of ITB of NIT will be read in entirety, the same does not
mandate about mandatory provision even in a case of
mistake by evaluator in assessing the evaluation of tender as
because if the words "which may lead to cancellation of
tender and in order to avoid the cancellation of tender in
such cases, the tender process needs be reverted back to
appropriate stage" are read together, the same is depending
upon the situation.
So far as Clause 35 of ITB of NIT is concerned, it speaks
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that any tender published on e-Procurement portal must be
concluded to its logical end i.e. either "Award of Contract" or
"Cancellation of Tender" or "Retender". The Tender
Cancellation Notice must contain the details of the
circumstances leading to cancellation of tender. The
Cancellation of Tender on the e-Procurement portal can be
done by way of creation and publication of corrigendum.
However, since Cancellation of Tender, in true sense, is not a
Corrigendum to NIT, the Tender Cancellation Notice will be
uploaded only on the e-Procurement portal.
Thus, it is evident that Clause 34 which speaks about
revocation of tender process and Clause 35 speaks about
cancellation of tender are two different conditions stipulated
in the NIT having no bearing with each other and since
revocation of tender process is discretionary one, therefore, in
that circumstances the authority can resort to cancellation of
tender if the situation so warrants.
11. In the given facts of this case it would be evident that in
pursuance to the Notice Inviting Tender (NIT) which was
opened on 21.02.2020 and comparative chart was generated
before Reverse Auction Process showed the lowest amount
quoted as Rs.174,96,63,042/- i.e. 14.086% above estimated
cost. Accordingly, „start bid‟ price was set for triggering RAP
at Rs.168,69,92,897/- i.e. estimated cost +10% as per sub-
clause no. 9 B 4 of NIT which states :-
- 22 -
"9 B. REVERSE AUCTION PROCESS
4. System displays L1 cost to company price
automatically in auction creation form and allows TIA to edit
the value as „start bid‟ price. For the time being L1 price or
approved estimated/justified price (only estimated price in
case of mining tenders)+ 10%+ applicable GST including GST
compensation cess, if any, taking into consideration Input
tax credit, if applicable whichever is lower will be the start
bid price for tenders for works and services. The estimated
price should be based on SOR (Schedule of Rates) and
market analysed rates in case of items/services for which
SOR is not available. Wherever SOR is not available,
preparation of SOR should be made ina scientific manner
based on proper justification on priority. If the L-1 price is
higher than the Start Bid Price (Estimated/justified price +
10% + applicable GST taking into consideration Input tax
credit, if applicable) and the RAP is not triggered within the
scheduled time, the cases will be retendered."
The decremental price was set at Rs.80,00,000/-.
Auction was scheduled on 21.02.2020 from 01.00 PM to
03.00 PM where all eligible bidders were free to participate.
Out of four bidders only two participated in Reverse Auction
Process (RAP). RAP was triggered by AKA Logistics Private
Limited at 02.38 PM reducing the value by Rs.80,00,000/-
and subsequently the petitioner participated in RAP at 02.46
PM further reducing the value by Rs.80,00,000/- (one
decremental price) thus bringing the overall value down by
Rs.1,60,00,000/- during RAP from Rs. 168,69,92,897/- to
Rs.167,09,92,897/-.
After completion of Reverse Auction Process, BOQ of all
bidders were downloaded from the system then it was
observed that the lowest quoted amount shown in
- 23 -
Comparative chart before RAP is in tune with BOQ summary
details generated by system after RAP whereas the amount
shown in BOQ Summary details before RAP as generated by
portal after completion of RAP mismatches with the amount
shown in the BOQ submitted by the bidders during bid
submission and downloaded from the system. The matter was
reported to NIC over e-mail with a request to clarify the
matter and arrange to take necessary measures for
rectification of error, if any and NIC replied over e-mail the
details of which are as follows :-
"Communication from "eProcurement Support Team,
Support eProcurement Division, Chennai, NIC"
Dt:27.02.2020:
With reference to the trailing mail, while designing a
BoQ, the system follows certain logic for generating in
comparative chart. In this case, the GST row has been taken
as a line item and generated comparative chart by adding the
GST amount also. The system do not understand the GST
amount has to be skipped hence the erroneous value in the
comparative chart."
Communication from Sr. Technical Director, NIC Chennai
With reference to the trailing mail, while designing a
BoQ, the system follows certain logic for generating in
comparative chart. In this case, while preparing the BOQ by
the department user, the GST row has been added as a line
item as a row. This is the cause of the error. It should have
been put as a column. It is advised that when a new BOQ is
designed it should be tested in the demo site and then only it
should be put on live site. In this case, the system has
included the GST amount as a line item and generated the
comparative chart and hence the erroneous value in the
comparative chart."
After detailed deliberation, the Tender Committee
created a comparative statement indicating ideal versus
- 24 -
actual. The comparative chart states that lowest amount
quoted is by the writ petitioner for Rs.167,09,92,897/- and
on later dates the writ petitioner has offered two suo moto
rebates, reducing the value to Rs.162,90,34,128/-.
Learned counsel appearing on behalf of the respondent-
BCCL has invited the attention of this court to the
deliberations of the tender committee available on record. The
said deliberation is reproduced herein below:-
Sl. NIT provisions Tender process as it Remarks of
No. happened Tender
Committee
1. Clause no.9B4 of The comparative chart As per NIT the
NIT/TD(P/C/106) (P/C/144) generated impact of GST is
System displays L1 cost to before RAP showed considered as zero,
company price automatically in the lowest amount owing to Input Tax
auction creation form and quoted as Credit. The Lowest
allows TIA to edit the value as Rs.174,96,63,042/- amount quoted was
„start bid‟ price. For the time (Rupees One Seventy displayed as
being L1 price or approved Four Crore Ninety Six Rs.174,96,63,042/
estimated/justified price (only Lakh Sixty Three - (Rupees One
estimated price in case of thousand and forty Seventy Four Crore
mining tenders)+ 10%+ two only) i.e 14.086% Ninety Six Lakh
applicable GST including GST above estimated cost. Sixty Three
compensation cess, if any, Accordingly, start bid Thousand and
taking into consideration Input price was set for RAP Forty Two Only) as
tax credit, if applicable at Rs.168,69,92,897/- per comparative
whichever is lower will be the i.e estimate +10% as chart at P /C/144
start bid price for tenders for per clause no.9B4 of is inclusive of GST.
works and services NIT/TD. This error was not
known to Tender
Clause no.20.1 of Committee while
NIT/TD(P/C/92) fixing Start Bid
Price. As such the
Evaluation and comparison of start bid price was
Bids will be done by system set at
online. The bidder shall also Rs.168,69,92,897/
comply with system - (Rupees One Sixty
requirement as explained Eight Crore Sixty
wherever in e-tender Nine lakh Ninety
notice/tender document. Bid Two Thousand
evaluation shall be done after Eight Hundred and
taking into consideration Ninety Seven Only)
overall quoted price by the i.e. Estimate +10%.
bidder and effect of Goods and TC later learned
Services Tax (GST), GST that, the L1, as
compensation cess etc. as stipulated in
applicable. L1 will be decided Clause no. 9B4 and
on the basis of cost to 20.1 was Om
company. Sharda Logistics
Pvt. Ltd. with a
quoted price of Rs.
164,50,51,160
(Rupees One Sixty
Four Crore Fifty
- 25 -
Lakh Fifty One
Thousand One
Hundred and Sixty
Only) P/C/256-
2. Clause no. 9 B 12 of NIT/TD: The lowest amount As per the referred
(P/C/105) quoted as per the clause since OM
If a bidder does not submit his comparative chart (e- SHARDA
bid Auction) placed at LOGISTICS PVT
in the Reverse Auction, the P/C/163 is Rs. LTD didn't
price quoted by him in the 167,09,92,897/ participate in RAP
price bid shall be considered as (Rupees One Sixty however as per
the valid price of that bidder. Seven Crore Nine lakh User Login Details
The status of the bidder (L1, L2 Ninety Two Thousand at P/C/334 the
etc) shall be evaluated Eight Hundred and bidder was online
considering either the bid price Ninety Seven Only) and logged in
submitted in Reverse auction quoted by Devparabha throughout the
or the price quoted in the price Construction Pvt. Ltd. RAP, their original
bid, whichever is lower. after participation in quoted price bid
RAP. Om Sharda Rs. 164,50,51,160
Logistics Pvt. Ltd. has (Rupees One Sixty
submitted a bid price Four Crore Fifty
of Rs. 164,50,51,160 lakh Fifty One
(Rupees One Sixty Thousand One
Four Crore Fifty Lakh Hundred and Sixty
fifty one thousand one Only) will remain
hundred and sixty valid even after
Only) during bid RAP and TC is
submission (i.e before empowered to
RAP) and didn‟t decide the status of
participate in RAP L1, L2 etc of the
however as per user Tender-cum-
login details at auction process.
P/C/334 the bidder
was online and logged
in throughout the
RAP.
3 Clause no, 9 B 14 of NIT/TD: The chronologically The bid price
(P/C/105) last bid electronically quoted by Om
Only the chronologically last submitted by bidders Sharda Logistics
bid submitted by the bidder till participated in Pvt. Ltd. during bid
the end of the auction shall be Tender-cum-Auction submission is the
considered as the valid price process is as below: lowest price among
bid of that bidder. Any bid 1. Om Sharda the bids submitted
submitted earlier by the bidder Logistics Pvt. LTd. by bidders
prior to Rs.164,50,51,160/- electronically.
submission of his last bid will (Rupees One Sixty
not be considered as the valid Four Crore Fifty Lakh
price bid. Fifty One Thousand
Clause no.9B17 of NIT/TD: One hundred and
(P/C/105) Sixty Only)
All the electronic bids 2. Devprabha
submitted during the reverse Construction Pvt Ltd
auction process shall be legally Rs. 167,09,92,897
binding on the bidder. The (Rupees One Sixty
chronologically last bid Seven Crore Nine lakh
submitted by the bidder till the Ninety Two Thousand
end of the auction will be Eight Hundred and
considered as the valid price Ninety Seven Only)
bid offered by that bidder and 3. AKA LOGISTICS
acceptance of the same by PRIVATE LIMITED Rs.
BCCL will form a binding 167,89,92,897/
contract between BCCL and the (Rupees One Sixty
bidder for entering into Seven Crore Eighty
contract. Nine lakh Ninety Two
Thousand Eight
Hundred and Ninety
Seven Only)
- 26 -
4. BLA PROJECTS
PVT. LTD. - Rs.
175,65,38,360/
(Rupees One Seventy
Five Crore Sixty Five
lakh Thirty Eight
Thousand Three
Hundred and Sixty
Only)
4 Clause no. 9 B 18 of NIT/TD: Devprabha The suo-moto
(P/C/105) Construction Pvt. Ltd. rebate can be
Conditional discounts shall not has offered two suo accepted only from
be considered. If a bidder offers moto rebates after the L1 bidder and
a discount unilaterally after conclusion of the the unilaterally
submission of bid, the discount Reverse Auction offered discounts
shall not be considered for Process through the cannot be
evaluation of offers but shall be following considered for
availed if order is placed on communication Letter evaluation of offers.
such tenderer. No.DCPL/CMC/2019- As deliberated
clause no. 20.2 of NIT/TD: ---- 20/01 Dt: 22.02.2020 above; the bid price
if the L-1 bidder offers suo (P/C/261-264) which quoted by Om
moto rebate on his quoted was received in the Sharda Logistics
rates after Reverse Auction, it office of GM (CMC) PVt. Ltd. is the
will be acceptable... vide diary no. 592 lowest price
dt:24.02.2020. electronically
• Letter no. quoted during
DCPL/CMC/2019- Tender
20/02 Dt: 25.02.2020 Cum Reverse
(P/C/265-268) which Auction Process.
was received in the Therefore the suo-
office of GM (CMC) moto rebates
vide diary no 616 Dt: offered by
25.02.2020. Devprabha
The bidder has Construction
mentioned in the Private limited is
letter that, "in order to not acceptable. As
obtain the contract such suo-moto
and in view with good rebate cannot be
relations prevailing used for evaluation
with BCCL" they are of tender. In view of
offering suo-moto above, Om Sharda
rebate . Logitics Pvt. Ltd.
remains the lowest
quoted bidder even
after RAP.
5 Clause no. 34 of NIT/TD: E-mail was sent to There‟s no
REVOCATION OF TENDER NIC to enquire the possibility of
PROCESS: (P/C/87) possibility of Revocation of
There may be situation when Revocation till the tender as per
the decision of Tender stage of before RAP on clause no.34 of
Committee may have to be Dt: 12.03.2020 NIT/TD, confirmed
changed subsequently on NIC replied on by Service Provider-
account of a Court's verdict. Dt.20.03.2020 stating NIC.
Also, there may Circumstances the following
when online evaluation of (P/C/284):
tender is not done correctly due Quote--
to mistake by the Evaluator or As per our system,
due to technical error in the the revocation is
system, which may lead to possible till
cancellation of tender. In order technical evaluation
to avoid the cancellation of stage in Non-ATP
tender in such cases, the tenders.
tender process needs be In this case, the
reverted back to appropriate financial opening
stage (i.e. bid Opening stage and the auction also
etc.) to comply with the court‟s got completed and
verdict or to rectify the error the overall
committed by the Evaluator. comparative chart is
- 27 -
This provision in the e- also generated. Now
procurement system has been at this stage
introduced with an objective to revocation is not
abide by the Court‟s verdict or possible.
to ensure that the tender Unquote---.
process should not suffer due
to any mistake committed by
an individual or due to any
technical error in the system.
Revocation of tender process
back to Technical-bid opening
stage or Price-bid opening stage
from an advanced stage shall
be done under the following
circumstances: a. To comply
with the directives of Hon'ble
Court of Law.
b. If the evaluator makes a
mistake in online evaluation of
tender, which is not in line
with the Tender Committee
decision.
c. If there is a error in the
online evaluation of tender due
to technical error in the
system. Revocation of Tender
process will be done with the
specific approval of the
concerned Director.
In all such cases the Tender
Revocation Notice must contain
the details of the
circumstances leading to
revocation of tender process.
The Revocation of Tender on
the e-Procurement portal can
be done by way of creation and
publication of corrigendum.
However, since Revocation of
tender, in true sense, is not a
Corrigendum to NIT, the
Tender Revocation Notice will
be uploaded only on the e
Procurement portal
https://coalindiatenders.nic.in.
In case of revocation of Tender
at any stage the auto-refund of
EMD may not work properly
and in such case it may be
required that tender Inviting
Authority to arrange refund of
EMD through conventional
system of refund of EMD.
As would appear from column 2 of Sl. No.5 of the
aforesaid chart that an E-mail was sent to NIC to enquire the
possibility of Revocation till the stage of before RAP on
12.03.2020. NIC replied on 20.03.2020 stating that "as per
our system, the revocation is possible till technical evaluation
- 28 -
stage in Non-ATP tenders. In this case, the financial opening
and the auction also got completed and the overall comparative
chart is also generated. Now at this stage revocation is not
possible".
Thus, it is evident from the opinion expressed by NIC as
would be evident from the e-mail quoted and referred
hereinabove that as per the system the revocation is possible
till technical evaluation stage in Non-ATP tenders and in this
case, since the financial opening and the auction also got
completed and the overall comparative chart is also
generated, revocation is not possible at this stage.
Thus, on the basis of such technical lapses since error
has cropped up in the entire process of tender, therefore, the
authorities have not resorted to the provision as contained
under Clause 34 of ITB of NIT for revocation of tender
process, rather gone for fresh tender by cancelling the earlier
one and in our considered view, the authorities have not
taken any unjustified decision and, therefore, the said
decision making process of the respondent authorities cannot
be said to suffer from any infirmity.
12. We have examined the rival submissions advanced on
behalf of the parties on the touchstone of the ratio laid down
by the Hon'ble Apex Court as referred hereinabove.
Now we are proceeding to examine the issue since the
Hon'ble Apex Court has laid down the ratio to deal with the
- 29 -
scope of judicial review only on the ground of Wednesbury
principle of unreasonableness but from the discussion made
hereinabove, more particularly, by taking into consideration
the entire process wherein due to error in the technical
system as has been opined by NIC as quoted and referred
hereinabove assigning the reason for not resorting to the
revocation of tender process and in that view of the matter if
the authorities have resorted to the provision of Clause 35 by
cancelling the tender process, the same cannot be said to
suffer from any unreasonableness or arbitrariness on the
part of the respondent authorities and, therefore, the
argument advanced on behalf of the appellant to the effect
that by not resorting to the provision of Clause 34 the
authorities have committed gross illegality, we are not
satisfied with the said argument for the reasons assigned
hereinabove and also taking into consideration the fact that
the reason has well been assigned as quoted and referred
hereinabove based upon that when the tender process has
been cancelled, the same cannot be said to suffer from any
infirmity. Accordingly, the argument is rejected.
Otherwise also, since merely because the appellant/writ
petitioner has been declared to be L-1 it does not confer any
right upon the appellant and further, the decision for
cancellation of tender process does not create any stigma and
whenever fresh tender will be issued, the appellant can
- 30 -
participate in the same and as such, the appellant has got no
vested right to question the process of cancellation of tender
process also on the ground we have already held hereinabove
that there is no error in decision making process.
13. So far as the other argument advanced on behalf of
learned counsel for the appellant which pertains to non-
assigning of reason in the impugned decision of cancellation
of tender process, Mr. Das, learned counsel appearing for the
respondents, refuting the aforesaid submission, has
submitted that the reason has well been assigned by referring
therein about technical error which prompted the respondent
authorities to cancel the tender process and whatever has
been submitted by learned counsel appearing for the
appellant/writ petitioner by taking aid of the judgment
rendered in Mohinder Singh Gill (Supra), the same is not
applicable in the facts of the case as because the reason is
mentioned in the impugned decision and whatever has been
stated in the counter affidavit as has been quoted by learned
Single Judge in the impugned order, the same is only opinion
of NIC based upon which the decision of cancellation of
tender process has been taken as because due to technical
error the entire process has been found to suffer from
infirmity and, therefore, in the facts of the case the judgment
rendered by the Hon'ble Apex Court in Mohinder Singh Gill
(Supra) is not applicable.
- 31 -
14. So far as the argument advanced on behalf of learned
counsel appearing for the appellant/writ petitioner that the
action of the respondent authorities suffers from mala fide
which has seriously been refuted by the learned counsel
appearing for the respondents by making submission that
mere allegation of mala fide has been made but the same
cannot be established. Moreover, mala fide cannot be alleged
against the establishment, rather mala fide is always against
a particular Government officer/official but very surprisingly
no officer/official has been impleaded as party by name and
further, it has been argued that the entire tender process has
been cancelled in order to help the third party but who is the
third party that has also not been mentioned in the writ
petition.
On the issue of mala fide the Hon„ble Apex Court in the
case of State of Bihar and Anr. vs. P.P. Sharma, IAS and
Anr. [1992 Supp (1) SCC 222] has laid down that the person
against whom mala fides or bias was imputed should be
impleaded eo nomine as a party respondent to the
proceedings and given an opportunity to meet those
allegations. In his/her absence no enquiry into those
allegations would be made. Otherwise it itself is violative of
the principles of natural justice as it amounts to condemning
a person without an opportunity.
- 32 -
This Court after hearing learned counsel for the parties
on the issue is in agreement with the submission made on
behalf of the learned counsel for the respondent on the
ground that mala fide can only be alleged against the person
and in order to prove the mala fide against the person
requirement of law is to implead such person as party to the
proceeding so that the allegation of mala fide can be proved
by providing an opportunity to the concerned against whom
allegation of mala fide has been leveled as has been held by
Hon„ble Apex Court in the case of State of Bihar and Anr.
vs. P. P. Sharma, IAS and Anr. (supra).
We have deliberated upon the said issue on the basis of
the settled position of law that making allegation of mala fide
is not only sufficient to come to the conclusion that mala fide
has been committed, rather in order to prove the mala fide
specific pleading is required to be made in the plaint coupled
with impleadment of particular person against whom
allegation of mala fide has been made and here in the given
case the argument has been advanced on behalf of the writ
petitioner that in order to help third party mala fide has been
committed but very surprisingly who is third party that has
not been disclosed. Moreover, the said third party has not
been made party respondent.
15. We have considered the position of law that the scope of
judicial review under Article 226 of the Constitution of India
- 33 -
in a State largess only restricted to the decision making
process and if in case of any error in the decision making
process the writ court can interfere in exercise of power of
judicial review under Article 226 of the Constitution of India,
reference in this regard be made to judgment rendered by
Hon'ble Apex Court in Syed TA Naqsnbandi and Ors. vs.
State of J&K and Ors., [(2003) 9 SCC 592], wherein the
Hon„ble Apex Court has observed:
"Judicial review is permissible only to the extent of
finding whether the process in reaching the decision
has been observed correctly and not the decision
itself, as such. Critical or independent analysis or
appraisal of the materials by the Courts exercising
powers of judicial review unlike the case of an
appellate court, would neither be permissible nor
conducive to the interests of either the officers
concerned or the system and institutions......"
We have examined this aspect of the matter as to
whether there is any error in the decision making process by
the respondent authority but, as discussed hereinabove, we
have not found any error in the decision making process as
because we have already come to conclusion that provision as
contained in Clause 34 of NIT being discretionary and when
the NIC being the expert body, clarified about the error in
technical system which led the writ petitioner to be declared
as L-1 and, as such, in such circumstances, decision has
been taken to go for cancellation of the tender process as per
the condition stipulated under Clause 35 of NIT, it cannot be
- 34 -
said to be error in the decision making process as also there
is no mala fide on the part of the respondent authority as has
been considered by this Court and, therefore, on these
grounds this Court is of the view that no interference is
required in the impugned decision of the respondent
authority.
16. We, after discussing the facts in entirety, has gone
across the judgment rendered by the learned Single Judge
and have found therefrom that the learned Single Judge has
considered each and every aspect of the matter as also
discussed the argument advanced by the writ petitioner
about applicability of Clause 34 of ITB of NIT and after
discussing the facts in detail, based upon the decision of
Hon'ble Apex Court in several cases, has refused to interfere
with the decision of cancellation of tender process by
resorting to the provision of Clause 35 of ITB of NIT, the same
cannot be held to be illegal.
Further, learned Single Judge has also come to the
conclusion about applicability of the judgment rendered in
Mohinder Singh Gill (Supra) and the judgment rendered in
State of Punjab Vs. Bandeep Singh & ors., [(2016) 1 SCC
724], wherein the ratio laid down in the case of Mohinder
Singh Gill (Supra.) has been followed and by taking into
consideration the factual aspect narrated in detail as also
considering the opinion of the NIC, the learned Single Judge
- 35 -
has rightly come to the conclusion about non-applicability of
Clause 34 of ITB of NIT.
17. We, at the outset, have already come to the conclusion
that power vested under Clause 34 of ITB of NIT since is a
discretionary power and when the authorities have taken
decision on the basis of the expert opinion expressed by the
NIC regarding technical error, as has been referred and
quoted hereinabove, which led to resort to the provision of
Clause 35, rather to go for Clause 34, we do not find any
reason to interfere with the order passed by the learned
Single Judge.
18. Accordingly, the instant appeal is dismissed.
19. In view of the disposal of the appeal, stay petition (I.A.
No. 1482 of 2021) also stands disposed of.
(Dr. Ravi Ranjan, C.J.)
(Sujit Narayan Prasad, J.)
Birendra/ A.F.R.
