Madhya Pradesh High Court
Alkhnanda Stone Crusher Through ... vs The State Of Madhya Pradesh on 11 October, 2023
Author: Subodh Abhyankar
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUBODH ABHYANKAR
WRIT PETITION No. 23858 of 2023
BETWEEN:-
ALKHNANDA STONE CRUSHER THROUGH
PROPRIETOR ALKESH BAKALIYA S/O SHRI
CHATRA SINGH BAKALIAY, AGED ABOUT 41
YEARS, OCCUPATION: BUSINESS 1137/1,1137/2,
ALKHNANDA STONE CRUSHER, NAVAPADA,
TEHSIL MEGHNAGAR, DISTRICT JHABUA
(MADHYA PRADESH)
.....PETITIONER
(BY SHRI AMIT BHATIA - ADVOCATE)
AND
1. THE STATE OF MADHYA PRADESH
PRINCIPAL SECRETARY DEPARTMENT OF
MINERAL RESOURCES VALLABH
BHAWAN, BHOPAL (MADHYA PRADESH)
2. DIRECTOR ADMINISTRATION AND
MINING DIRECTORATE OF GEOLOGY AND
MINING 29-A, ARERA HILLS BHOPAL
(MADHYA PRADESH)
3. CHAIRMAN AND DIRECTOR GENERAL
MSTC LIMITED FIRST FLOOR, TILHAN
SANGH BHAWAN 1 ARERA HILLS
MPOILFED BHAWAN BHOPAL (MADHYA
PRADESH)
4. BRANCH MANAGER MSTC LIMITED
FIRST FLOOR, TILHAN SANGH BHAWAN 1
ARERA HILLS MPOILFED BHAWAN
Signature Not Verified
Signed by: PANKAJ
PANDEY
Signing time: 11-10-2023
17:46:01
2
BHOPAL (MADHYA PRADESH)
5. M/S SHREE VINAYAK MINERALS NEAR
ABHINAV HOTEL A-512 SAGAR EDEN
GARDEN HOSHANGABAD ROAD BHOPAL
(MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI VAIBHAV BHAGWAT - G.A. FOR RESPONDENT NOS.1 TO
4/STATE AND SHRI AMAR SINGH RATHORE - ADVOCATE FOR
RESPONDENT NO.5)
...................................................................................................
Reserved on : 29.09.2023
Pronounced on : 11.10.2023
................................................................................................................
This petition coming on for admission this day, the court passed
the following:
ORDER
1] Heard finally.
2] This petition has been filed by the petitioner under Article
226 of the Constitution of India seeking the following reliefs:-
"(i) That, Hon'ble Court may kindly be pleased to issue a writ
in the nature of Mandamus or any other appropriate Writ, order
or direction directing the Respondent Nos. 1 to 4 to continue the
bidding process from the point where the technical glitch arose
and to ensure that the maximum price through this auction is
realized.
(ii That, Hon‟ble Court may kindly be pleased to issue a
writ in the nature of Mandamus or any other appropriate Writ,
order or direction quashing the NIT impugned issued by
respondent no. 1 on dated 14/07/2023. (Annexure - P/1 herein)
pursuant to item number 32 of the NIT and any and all
consequent steps/actions. In alternate, the bidding be
restarted/restored from the point of 391.30 as it was disconnected
and discontinued then.
(iii) The Hon‟ble Court may be pleased to issue the writ of
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mandamus directing the respondents to consider the
application/representation submitted by the petitioner on dated
11/09/2023 expeditiously and pass the speaking order.
(iv) Pass such other order(s) or directions(s) as this Hon'ble
Court may deem fit and proper in the facts and circumstances of
the case and in favour of the petitioner.
(v) That, this petition be allowed with cost
Any other Relief which this Hon'ble Court may deem fit
may also be granted in favour of the petitioner."
3] In brief, the facts of the case are that the petitioner is a
proprietary concern, engaged in the business of mining and stone
crushing. Admittedly, petitioner participated in the auction for
"Doter-Guvali Manganese Ore Block" pursuing to an NIT issued
on 14.07.2023, by the respondent (Department of Mineral and
Resources). According to the petitioner, the parties were required to
participate in the e-auction which started on 09.09.2023 at 11:00
AM, and initially it was continued for two hours only, but thereafter,
further slots were to be extended for further 8 minutes after a new
bid is submitted. Thus, the bidding continued for around 33 hours,
till 10.09.2023 at around 8:03 PM when the last bid was submitted
by the respondent No.5, and the petitioner was required to submit
his bid within further 8 minutes time i.e. upto 8:11 PM, however, on
account of some technical glitch, the petitioner was prevented from
submitting his bid,, he contacted the respondent No.4 immediately,
but was informed that since it is a Sunday, he would not be able to
help him. Thereafter, the petitioner sent an email at 8:18 PM i.e. 7
minutes after his time closed, to which no reply was sent by the
respondent Nos.1 to 4. Thereafter, another email was also sent on
11.09.2023 at 11:36 AM. The second email was replied to by the
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respondent Nos.1 to 4/State, stating that their system was working
perfectly, and if there was any glitch in the system, it was at the end
of the petitioner only. Subsequently, the bid was concluded, and the
respondent No.5 Shree Vinayak Minerals has been declared as the
preferred bidder as per the NIT.
4] Counsel for the petitioner has submitted that the petitioner
had participated in the aforesaid bid continuously for 33 hours, and
thus, his bona fide cannot be doubted. It is also submitted that the
petitioner had sent an email to the respondent Nos.1 to 4 within 7
minutes when the slot allotted to him came to an end. Counsel for
the petitioner has also drawn the attention of this Court to the notice
dated 13.09.2023, which is in respect of declaration of preferred
bidder for Phase XI Auction of Major Mineral blocks in which the
respondent No.5 Shree Vinayak Minerals has obtained a block
named „Bhilapar Manganese Ore and Dolomite Block‟ and his final
bid is 22790.00%, whereas the present block i.e. „Doter-Guvali
Manganese Ore Block‟ at Serial No.5, he was able to obtained the
same at 391.30%. Thus, it is submitted that since the bidding
process was already going on, the aforesaid percentage could have
gone up substantially.
5] A reply to the aforesaid petition has also been filed by the
respondent Nos.1 to 4/State. Counsel for the respondent Nos.1 to
4/State has opposed the prayer, and it is submitted that the
respondent No.5‟s name has already been finalized and as such no
case for interference is made out at this stage. It is also submitted
that the technical glitch was on the part of the petitioner only, whose
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system might not have worked properly as according to respondent
Nos.1 to 4, a report was obtained from the concerned department, in
which it has been mentioned as under:-
"The subject matter of query with respect to grievance
raised by the petitioner has been mentioned in the email.
However, HOD, Systems has replied the said email with
instructions to raise ticket in PTS (Project Tracking
System) which is an internal stagewise grievance
redressal platform within the department. Thereafter a
ticket was raised on PTS. In such PTS, Systems
Department on 13.09.2023 at 12:31 pm, has informed that
"As per System records, during the mentioned time frame
there were a total of 254 bids received against 21 lots
from 89 bidders in 2 auctions."
and thus, it is submitted that at the relevant time, two auctions
were going on simultaneously, and there was no other complaint
received by the respondents in this regard and thus, the petitioner
cannot be allowed to raise this grievance after the bid is over.
6] Counsel has also drawn the attention of this Court to para 1.12
of the Tender Document for grant of Composite Licence for Doter-
Guvali Manganese Ore Block (Annexure P/2), which provides that
"Each Bidder shall be responsible for any problem at the Bidder‟s end
like failure of electricity, loss of Internet connection, any trouble with
Bidder's computer etc. which may cause inconvenience or prevent the
Bidder from bidding in e-auction".
7] Counsel for the respondent No.5 has also opposed the prayer
and it is submitted that the respondent No.5 has already deposited 1.5
crores towards security and thus, no case for interference is made out.
Respondent No.5 has also adopted the reply filed by the State by filing
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a separate application in this behalf.
8] In rebuttal, counsel for the petitioner has submitted that the
State Government is not bound by the bid submitted by the respondent
No.5, and substantial public interest is involved in the matter, and para
1.8 of the Tender Document also arms the State Government with such
discretion to reject any or all the bidders or bids without assigning any
reason whatsoever. Thus, it is submitted that since the bid was already
going on, and the petitioner‟s system abruptly stopped working, a
fresh opportunity may be given to the respondent Nos.1 to 4 to allow
the respondent No.5, and the petitioner to bid again from the time the
petitioner was signed out of the system. In support of his submissions,
counsel for the petitioner has relied upon various decisions in the
cases of JSW Cement Limited Vs. State of Rajasthan & Ors.
reported as [2019 (1) RLW 612 (Raj.)] paras 4, 16, 21, 25, 32 and 35;
Manoj I Naik and Associates Vs. Official Liquidator reported as
(2015) 3 SCC 112 paras 12 and 14; M/s. Rajshila Vs. State of U.P.
and others reported as 1993 Supp (1) SCC 477; Ram and Shyam
Company Vs. State of Haryana and others reported as (1985) 3
SCC 267 paras 6, 10 and 12; M/s. Kasturi Lal Lakshmi Reddy,
Represented by Its Partner Shri Kasturi Lal, Ward No.4, Palace
Bar, Poonch, Jammu and Others Vs. State of Jammu and
Kashmir and Another reported as (1980) 4 SCC 1 paras 11 to 14;
Cineom Broadcast India Ltd. Vs. Municipal Corporation of Gr.
Mumbai reported as 2022 SCC Online Bom 11778 paras 4 and 13;
Birla Ericsson Optical Ltd. and another Vs. Bharat Broadband
Network Ltd. reported as 2013 SCC OnLine Del 2541 para 21.
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9] Counsel for the respondent Nos.1 to 4/State has also relied upon
a decision rendered by the Delhi High Court in the case of Jindal
Steel and Power Limited and Ors. Vs. Union of India and Ors.
passed in W.P.(C) 2708/2023 dated 25.07.2023 paras 84, 85 and 95.
10] Heard counsel for the parties and perused the record.
11] So far as the decision of the Rajasthan High Court in the case of
J.S.W Cement Limited (supra) is concerned, in which the learned
Judge of the Rajasthan High Court has also referred to the various
decisions of the Supreme Court quite extensively, paras 4, 16, 21, 25,
32 and 35 of the same read as under :-
"4. The grievance of the petitioner-company is twofold:
(a) For no fault of the petitioner company and solely on
account of the failure of the loop connectivity, the
petitioner company was wrongfully deprived from
placing a higher bid in comparison to the bid placed by
the respondent No.7. For meeting exigencies, a contact
person was nominated in the website of the MSTC. The
petitioner contacted the concerned person i.e.
respondent No.8 before the expiry of 8 minutes, but he
miserably failed to take remedial measures and further
did not halt the bid process until 4 [CW-12873/2017]
loop was reconnected.
(b) The E-auction process and subsequent declaration
of respondent No.7 as 'preferred H1 bidder' has caused
irreparable loss and injury not only to the petitioner, but
also to the respondent No.1 Government of Rajasthan,
in as much as, there is huge loss of almost Rs.2000
crores in revenue by way of price premium as the
petitioner on date is ready to start the bid from 50
onwards which has presently been accepted at 41.60.
16. I may refer to some of the judicial pronouncements on
the subject as cited before this Court.
In M/s. Kasturi Lal Lakshmi Reddy & Ors. Vs.
State of Jammu and Kashmir & Anr. (1980) 4 SCC 1, the
validity of order was assailed on behalf of the petitioner in the
said case on the ground of public interest besides other
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grounds. In the said case, huge benefit had been conferred on
the respondents at the cost of the State. The action of the
Government in the said case was held as unreasonable and
lacking in public interest as the Government gave out the
contract for a consideration less than the highest that could
have been obtained for it. The petitioners in the said case
were aggrieved by the handing over the contract to an outside
party that offered to take all the untapped forests in the State
by offering more price than offered by others. The State did
not accept this offer made by the petitioners and decided to go
ahead with giving tapping contract in respect of these blazes
to the respondents therein. The Apex Court in this case
upheld the stand of the State on the conclusion that the
contract to the respondent was in public interest as the
respondent had agreed to provide resources and other
facilities for the purpose of setting up an industry which
would have long 14 [CW-12873/2017] way in the State like
Jammu and Kashmir.
In the case of Rajasthan Housing Board & Ors. Vs.
G.S. Investment & Ors. (2007) 1 SCC 477, the State
Government had disapproved the auction and ordered fresh
auction as there was sufficient material before the State
Government to show that the past plots in the area past plots
in the area had fetched a price of Rs.10,000/- per square meter
whereas the respondents had offered only Rs.5750/- per
square meter. The Apex Court while upholding the action of
the State in public interest observed in para 11 as under:-
"The sale of plots by the Rajasthan Housing Board by means
of an auction is essentially a commercial transaction. Even if
some defect was found in the ultimate decision resulting in
cancellation of the auction, the court should exercise its
discretionary power under Article 226 of the Constitution with
great care and caution and should exercise it only in furtherance
of public interest. The court should always keep the larger public
interest in mind in order to decide whether it should interfere
with the decision of the authority. In the present case there was
enough material before the State Government to show that in the
past plots in the area had fetched a price of Rs.10,000/- per
square meter and the highest bid made by the respondent in the
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present case was nearly half, i.e., Rs.5750/- per square meter,
which clearly indicated that the auction had not been conducted
in a fair manner. If in such a case the State Government took a
decision to disapprove the auction held and issued a direction for
holding of a fresh auction, obviously the said decision was taken
in 15 [CW-12873/2017] larger public interest. In these
circumstances there was absolutely no occasion for the High
Court to entertain the writ petition and issue any direction in
favour of the contesting respondent. The orders passed by the
learned single Judge on 4.8.2004 and the order passed by the
Division Bench of the High Court on 23.9.2004 are clearly
erroneous in law and are liable to be set aside."
In Tata Cellular Vs. Union of India :: (1994) 6 SCC
651, the Court observed that the State has the right to refuse
the lowest or any other tender as long as it applies the
principle of Article 14 of the Constitution. There was no
question of infringement of Article 14 of the Constitution if
the Government tries to accept and offering the best person or
the best quotation. Para 70 and 71 of the said judgment
clarifies that principles of judicial review would apply to the
exercise of contractual powers by Government bodies in order
to prevent arbitrariness and favoritism. Para 70 and 71 reads
thus :
"70. It cannot be denied that the principles of judicial review
would apply to the exercise of contractual powers by
Government bodies in order to prevent arbitrariness or
favoritism. However, it must be clearly stated that there are
inherent limitations in exercise of that power of judicial review.
Government is the guardian of the finances of the State. It is
expected to protect the financial interest of the State. The right to
refuse the lowest or any other tender is always available to the
Government. But, the principles laid down in Article 14 of the
Constitution have to be kept in view while accepting or refusing
a tender. There can be no question of infringement of 16 [CW-
12873/2017] Article 14 if the Government tries to get the best
person or the best quotation. The right to choose cannot be
considered to be an arbitrary power. Of course, if the said power
is exercised for any collateral purpose the exercise of that power
will be struck down.
71. Judicial quest in administrative matters has been to
find the right balance between the administrative discretion to
decide matters whether contractual or political in nature or issues
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of social policy; thus they are not essentially justifiable and the
need to remedy any unfairness. Such an unfairness is set right by
judicial review."
The Apex Court in case of Meerut Development Authority
Vs. Association of Management Studies and Anr. (2009) 6
SCC 171, allowed the appeal of the Meerut Development
Authority upholding the decision to reject the tender of the
respondent on the ground that offer made was lower than the
reserved price and allowed it to re-auction with following
observations:-
"49. The letter dated 4.3.2002 from AMS to MDA indicating
the acceptance of Rs. 690/- per sq. meter only after one
Harpal Singh Chowdhary on behalf of the Officer's Class
Housing Society had mentioned a higher price of Rs. 775/-
per sq. meter in his representation. There is nothing on record
to suggest that impugned decision has been taken only for
making higher financial gain and profit. But what is wrong
even if any such effort was made by MDA to augment its
financial resources.
50. We are, however, of the opinion that the effort, if 17
[CW-12873/2017] any, made by MDA to augment its
financial resources and revenue itself cannot be said to be
unreasonable decision. It is well said that the struggle to get
for the State the full value of its resources is particularly
pronounced in the sale of State owned natural assets to the
private sector. Whenever the Government or the authorities
get less than the full value of the asset, the country is being
cheated; there is a simple transfer of wealth from the citizens
as a whole to whoever gets the assets `at a discount'. Most of
the times the wealth of a State goes to the individuals within
the country rather than to multi- national corporations; still,
wealth slips away that ought to belong to the nation as a
whole.
51. Society's repeated representations are of no consequence
and the MDA was not under any legal obligation to reopen
the tender process which otherwise stood terminated. The
MDA, in its meeting dated 15.3.2002 considered the request
of the Society as well as the alternative offer but neither of
them was accepted. MDA after careful deliberation decided to
dispose of the land through fresh tender-cum- auction for
residential use after giving wide publicity."
21. In the case of Jagdish Mandal v. State of Orissa reported
in (2007)14 SCC 517 as relied on by both the parties, it was
held that before invoking the power of judicial review in matters
relating to tenders or award of contracts, certain special features
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should be borne in mind. A contract is a commercial transaction.
Evaluating tenders and awarding contracts are essentially
commercial functions where equity and natural justice has no
place. It will not be invoked to protect private interest.
Interference in tender is called for only in case the process is
mala fide, arbitrary and public interest is affected. Para 22 of the
said judgment which is a consistent view in all judicial
pronouncements reads thus:--
"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 deci-
sion is „sound‟. When the power of judicial review is invoked
in matters relating to tenders or award of contracts, certain
special features should be borne in mind. A contract is a
commercial transaction. Evaluating tenders and awarding
contracts are essentially commercial functions. Principles of
equity and natural justice stay at a distance. If the decision re-
lating to award of contract is bona fide and is in public inter-
est, courts will not, in exercise of power of judicial review, in-
terfere 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 al-
ways 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.
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ii) Whether public interest is affected.
If the answers are in the negative, there should be no in-
terference under Article 226. Cases involving blacklisting or
imposition of penal consequences on a tenderer/contractor or
distribution of state largesse (allotment of sites/shops, grant of
licences, dealerships and franchises) stand on a different foot-
ing as they may require a higher degree of fairness in action."
25. To say that the petitioner was logging in under the wrong
name too is difficult to accept, inasmuch as, the petitioner
company is not novice in the field. In the case of Maharashtra
Housing Development Authority v. Shapoorji Pallonji and
Company Private Limited; (2018) 3 SCC 13 as relied upon by the
learned counsel for the respondents the Court refused to interfere
as they found that there was no problem in the server during the
relevant time period because as many as 427 bid documents were
uploaded between the relevant time on the said date. In the
present case, there was only two bidders and the petitioner was
not able to log in the last 08 minutes but surprisingly after the 08
minutes were over, the login went through which does look
suspicious. Although it may not be possible to fix the
responsibility on the respondents in the absence of any enquiry,
we cannot shut our eyes to the fact that there was a technical
glitch. There is also no reason to doubt the expertise of the
petitioners who are admittedly no novice in the field and had
participated in the bids of the same block and have been regularly
participating which is also evident from the table reproduced in
the earlier part of the judgment showing that they managed to
succeed in the subsequent bid of the same adjoining block held on
5.2.2018. The fact that there is every possibility that the
petitioners would have gone much much higher than the bid 41.6
is evident from the subsequent bids made by them of the
adjoining block to the extent of as high as 60.10. They were
runner up in the previous bid in September, 2016 wherein they
had given the bid of 59.79. No wonder, they made the offer at the
time of issuance of notice to the tune of 50 onwards.
32. Therefore, there is no vested right of the respondent No. 7
just because he has been declared as a „preferred bidder‟. The
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declaration of preferred bidder is open to challenge and recall. In
the present case, it is already discussed above that the petitioner
company was quick to file their complaint within 08 minutes (The
limited time schedule). They managed to call Mr. Dinesh Meel,
Sr. Manager - respondent No. 8 on his mobile as the authorised
person for any such snag. The complaint too was lodged within
two hours. It was followed by another complaint on the very next
day. Throughout the bidding, the petitioner company appears to
be aggressive bidders. They were neither lethargic nor waited for
the conclusion of the tender process and decided to complain
about irregularity and arbitrariness and the timely inaction on the
side of respondent No. 8. The fact that their bid went into the
General Auction shows that the petitioner company continued to
make effort. The respondent No. 8 could have always paused the
e-auction process when he came to know that the petitioner
company was not able to log in and 50 seconds were still left prior
to closing. It was well within the State to make an enquiry in the
prevailing situation specially if the petitioner company was able
to show the heavy loss the State exchequer was about 1900-2000
crores due to the technical glitch faced by the petitioner. The State
knew that adjoining blocks had gone for 67 and above whereas
the present had been closed at 41.60 only. In such like cases, the
State could have been more careful while making the decision
which besides being irrational also smacks of absolute
arbitrariness. There was no reason to be in haste keeping in view
the public interest involved.
35. In the circumstances, this Court cannot shut its eyes and
ignore the public interest which stands to suffer in case the State
is not stopped from finalising the contract with respondent No. 7.
The Mineral (Auction) Rules, 2015 duly permit cancellation and
recall specially when no vested right is created till as such time
the bid is finalised and approved. In any case, individual interest
cannot be watched in face of such a huge loss to public exchequer.
Hence, keeping the public interest involved as upper most in the
present case, the order dated 29.09.2017 of declaration is set aside.
The respondent authorities are directed to re-auction with the
minimum start at 50.00 subject to an undertaking given by the
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petitioner to the effect that 50.00 will be the accepted offer of the
petitioner and Petitioner Company will not be allowed to back out
in case the authority does not go beyond 50.00."
(emphasis supplied)
12] So far as the decision relied upon by the counsel for the
respondent/State rendered by the Delhi High Court, in the case of
Jindal Steel and Power Limited and Ors. (supra) is concerned, the
relevant paras 84, 85 and 95 of the same read as under:-
"84. A similar issue arose before the High Court of
Orissa in Writ Petition (Civil) No. 26548 of 2021, titled
as Mythri Infrastructure and Mining India Pvt. Ltd.. v. State
of Odisha, and the Division Bench of the High Court of
Orissa by its judgment dated 10.12.2021 repealed a
contention which was similar to the one raised by the
Petitioner herein by observing as under:
"24. While the Petitioners might contend that their
inability to upload the IPO was for reasons entirely outside
their control, the fact remains that there was no technical
glitch on the side of Opposite Party No. 3. The log enclosed
with its counter affidavit makes it abundantly clear that none
of the other bidders encountered any difficulty in uploading
the technical bid as well as the IPOs. While the log does
show that the Petitioners' three attempts at uploading the
IPO prior to 3 PM on 24th August, 2021 were unsuccessful,
this is not conclusive proof of the technical glitches at the
end of the Petitioners being for reasons entirely outside
their control. Even assuming in this regard in favour of the
Petitioners, the fact remains that they need not have waited
till the last minute to upload the IPO. The tender documents
made it clear that Opposite Party No. 3 would not be
responsible for any problem at the bidder's end. In fact, this
is the reason why MSTC Limited had offered help to
bidders......
25. In similar circumstances, in Shapoorji
Pallonji (supra), the Supreme Court disapproved of the High
Court having interfered and allowed the Respondent therein
to participate in the tender process. In that case, the deadline
for submission of online bids was 13 : 00 hours. Respondent
No. 1 had submitted its proposal at 12 : 16 hours. It was
claimed that it pressed the „freeze button‟ but could not get
any acknowledgement. Its bid was therefore rejected. The
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system had generated an acknowledgement for other bidders
and therefore it was held that there was no glitch in the
system as far as the host of web portal i.e. the National
Informatics Centre (NIC) was concerned. The Supreme Court
came to the following conclusions:
"9. If NIC, which had developed the e-
portal in which bids were to be submitted and
maintenance and upkeep of which was its
responsibility, had stated in its affidavit what
has been indicated above, we do not see how
the repeated statements made on behalf of the
first respondent that the bid documents can
still be retrieved, if required by travelling
beyond the Government of India Guidelines,
should commend to us for acceptance. The
opinion rendered in this regard by the
consultant of the first respondent Mr. Arun
Omkarlal Gupta on which much stress and
reliance has been placed by the first
respondent could hardly be determinative of
the question in a situation where NIC which
had developed the portal had stated before the
Court on affidavit that retrieval of the
documents even jointly with Maharashtra
Housing Development Authority is not feasible
or possible. That apart, lack of any timely
response of the first respondent when the
system had failed to generate an
acknowledgement of the bid documents in a
situation where the first respondent claims to
have pressed the "freeze button"; the
generation of acknowledgements in respect of
other bidders and the absence of any glitch in
the technology would strongly indicate that
the bid submitted by the first respondent was
not a valid bid and the directions issued by the
High Court in favour of the first respondent
virtually confer on the said respondent a
second opportunity, which cannot be
countenanced.
10. In the above view of the matter, we are
inclined to take the view that the High Court
was not correct in issuing the directions
extracted above as contained in paragraph 29
of the impugned judgment/order dated 28-9-
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2017. The same are, therefore, interfered with.
The appeal is allowed accordingly."
26. The present case is more or less
similar on facts. The Court is therefore
inclined not to accept the plea of Petitioner
No. 1 that it should be allowed to participate
in the second round of bidding by requiring
the Opposite Parties to accept its IPO, which
would be submitted physically."
(emphasis supplied)
85. A Petition for Special Leave to Appeal, being Appeal
(C) No(s). 20851/2021, was filed against the Order of the
Division Bench of the Orissa High Court. The said Appeal
was rejected by the Apex Court vide Order dated 19.01.2023
by observing as under:
"It is pointed out to us that about 122 bids
were received and uploaded in the server in
question on 24.07.2021 upto 3 : 00 p.m. On the
basis of preponderance of probability, the High
Court has rightly arrived at the conclusion that
the technical glitch was at the end of the
petitioners.
During the course of hearing, the learned
Senior Advocate appearing on behalf of the
petitioners has stated that the tender qua the
11th block has been cancelled/annulled. This is
disputed by the learned Senior Advocate
appearing on behalf of the State of Odisha. We
make no comments in this regard.
Recording the aforesaid, we do not find any
good ground and reason to interfere with the
impugned judgment and hence the special leave
petition is dismissed.
Application for impleadment stand disposed
of. Pending application(s), if any, shall stand
disposed of."
(emphasis supplied)
95. The Apex Court in a number of judgments has
crystallized the test to be taken into account by the Courts
before interfering in tender matters and the same reads as
under:--
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"A court before interfering in tender or
contractual matters in exercise of power of
judicial review, should pose to itself the
following questions:
(i) Whether the process adopted or decision made
by the authority is mala fide or intended to
favour someone;
OR
Whether the process adopted or decision made
is so arbitrary and irrational that the court can
say:"the decision is such that no responsible
authority acting reasonably and in accordance
with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should
be no interference under Article 226. Cases
involving blacklisting or imposition of penal
consequences on a tenderer/contractor or
distribution of State largesse (allotment of
sites/shops, grant of licences,
dealerships and franchises) stand on a different
footing as they may require a higher degree of
fairness in action."
[Refer : Jagdish Mandal v. State of Orissa, (2007) 14 SCC
517; Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8
SCC 216; Ranaq International Ltd. v. I.V.R.
Construction Ltd., (1999) 1 SCC 492 etc.]"
(emphasis supplied)
13] So far as the decisions in the case of J.S.W Cement Limited
(supra) as also Jindal Steel and Power Limited (supra) are
concerned, it is found that in JSW Cement (supra), the sole guiding
principle of the Rajasthan High Court was public interest only
whereas, in the case of Jindal Steel and Power Limited (supra),
although the reference of public interest is surely there, but it is only a
passing reference, and does not appear to be involved in the case, and
the case is decided on technical grounds only, and even in para 95 of
the aforesaid decision, the Delhi High Court has referred to the
various judgements of the Supreme Court and has tried to crystallize
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the test to be taken into account by the Courts before interfering in
tender matters, and one of the situations is whether Public interest is
affected.
14] In the aforesaid decision, the Delhi High Court has held that the
technical glitch was at the petitioner‟s end and thus, has dislodged his
claim.
15] Now, considering the facts of the case on hand, vis-à-vis to the
aforesaid cases, it is found that so far as the occurrence of the
technical glitch in the system of the bidder is concerned, para 1.12 of
the NIT deals with the same in the following manner:-
"1.12 Each Bidder shall be responsible for any problem
at the Bidder‟s end like failure of electricity, loss of
Internet connection, any trouble with Bidder's computer
etc. which may cause inconvenience or prevent the
Bidder from bidding in e-auction".
16] In the considered opinion of this court, by putting the aforesaid
condition 1.12 in the Tender, the State has only promoted unfair
practice amongst the bidders at the expense of the public exchequer. It
is surprising that while imposing the said condition, the State has
clearly lost sight of the public interest involved, and the likely loss
which the State is about to suffer in the process. Suppose, if this glitch
had occurred within one, five or ten hours of the bidding, then this
mining Block would have been given to the respondent no.5 at some
throw away price only which was quoted by them at that time, which,
in all certainty must be far less than the price quoted 33 hours later,
which would have led to substantial losses to the State exchequer, and
undue and unwarranted gains to one particular bidder, and why ?, only
because there was no internet, or electricity, or due to some other
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technical glitch not in the control of the another bidder. Similarly,
hacking into the system of a bidder to create a deliberate
interreference in the bidding process of a prospective bidder can also
not be ruled out. Thus, the procedure adopted by the respondent State
appears to be gross and totally flawed.
17] This Court is of the considered opinion that the State has the
discretion to impose such Tender conditions as it pleases, but this
pleasure cannot override the public interest, which is paramount in
every public auction, and cannot be sidelined in any manner in the
name of unfettered discretion.
18] In the case at hand, it is nobody‟s case that the petitioner was a
novice or lack technical expertise to participate in the Tender process,
it is apparent that the petitioner had continued to revise his bids for 33
long hours, apparently, it was a closely contested auction, and soon
after the petitioner was kicked out of the system, i.e. at 8:03 hrs,
within eight minutes therefrom i.e., at 8:11 PM, he had already raised
his grievance to the respondent no.4, which was not attended to, and
which led the tender to fall in the lap of the respondent no.5, who has
happily deposited a sum of Rs.1.5 Crore as per the Tener condition,
despite the fact that there was a stay order in operation passed by this
court on 14.09.2023.
19] In the considered opinion of this Court, the respondent Nos.1 to
4, who have now gained vast experience in e-tendering, could have
done better than simply imposing condition no.1.12 (supra), to shrug
off their responsibility which they owe to the public, and to oust a
bidder from the bidding process. Admittedly, as per the documents
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(Annexure A/1) dated 13.09.2023, in respect block „Bhilapar
Manganese Ore and Dolomite Block‟ which is at Serial No.2, the
bid of the respondent no.5 has been accepted at 22790.00%,
whereas, in the present block i.e., „Doter-Guvali Manganese Ore
Block‟ which is at Serial No.5, the respondent no.5 was able to
obtained the same at 391.30% only. This court is of the considered
opinion that if the public interest is not involved in a case like this
where there is so much room for escalation of bids is present, then
where it is. The Supreme Court in its recent decision dated
05.10.2023 in the case of Karnataka State Electronics
Development Corporation Ltd. Vs. Kumaon Entertainment and
Hospitalities Pvt. Ltd. Passed in Civil Appeal No.8073/2022 has
also held that any loss caused to the State Corporation is a loss to
public exchequer.
"21. There is no denying the fact that the appellant is a fully
owned Undertaking/ Corporation of the State of Karnataka.
Any loss suffered by it would be a loss to the Public
Exchequer. The respondent, on the other hand, has shifted
its purpose of setting up an IT related industry to a
Hospitality sector to set up a hotel. If the amount for such
conversion of usage is not legally recovered from the
respondent, as a result, loss being suffered by the appellant,
would not be in public interest. It is also not disputed that
all other similarly situate allottees have paid at the rate
determined in the 141st Board Meeting of the appellant.
."
(emphasis supplied)
20] In such facts and circumstances of the case, this court is of the
considered opinion that this is a fit case where its powers of judicial
review under Art. 226 of the Constitution can be exercised, to undo
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the concluded Tender process, the continuance of which shall be
prejudicial to the public interest, and direct the respondent no.1 to 4 to
resume the Tender process from the time when the petitioner was
prevented from offering his bid.
21] Accordingly, it is directed that the order passed by the
Respondent in declaring the respondent no.5 Shree Vinayak Minerals
is hereby set aside, and the respondents no.1 to 4 are directed to
return the amount which they have obtained from the respondent
No.5, and resume the Tender process from the time i.e. from 8.03 pm,
when the petitioner was prevented from offering his bid, and proceed
further with the NIT.
22] Petition is thus allowed, with the aforesaid directions.
(Subodh Abhyankar)
Judge
Pankaj
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