Madras High Court

Rayar vs The Secretary To Government on 29 November, 2022

                                                                         W.P(MD)No.26796 of 2022


                          BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                           DATED: 29.11.2022

                                                    CORAM

                       THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN

                                       W.P(MD)No.26796 of 2022
                                                and
                                  W.M.P(MD)No.20969 & 20970 of 2022

                Rayar                                                ..Petitioner

                                                     Vs

                1.The Secretary to Government,
                  Highways and Minor Ports (HF2) Department,
                  St. George Fort,
                  Chennai-6.

                2.The Superintendent Engineer (H),
                  C and M Circle,
                  Trichy,
                  Trichy District.                                    ..Respondents


                Prayer: Writ Petition filed under Article 226 of the Constitution of India,
                praying this Court to issue a Writ of Certiorarified Mandamus, to call for
                the records on the file of the second respondent pertaining to its
                proceeding in Tender Notice No.21/2022-2013/HDO dated 21.10.2022
                and to quash the same with regard to Serial No.9, 10, 11, 12, 13, 14 and
                15 and consequently direct the respondents to float fresh tender for works
                independently as notified by the second respondent in G.O(Ms) No.191
                Highways and Minor Ports (HF2) Department, dated 29.09.2022.


                                   For Petitioner     :Mr.S.C.Herod Singh
                                   For R1 & R2        :Mr.D.Gandhiraj
                                                       Special Government Pleader


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                                                                             W.P(MD)No.26796 of 2022




                                                      ORDER

The Petitioner has filed this Writ Petition seeking issuance of a Writ

of Certiorarified Mandamus, to call for the records on the file of the

second respondent pertaining to its proceeding in Tender Notice No.

21/2022-2013/HDO dated 21.10.2022 and to quash the same with regard

to Serial No.9, 10, 11, 12, 13, 14 and 15 and consequently direct the

respondents to float fresh tender for works independently as notified by

the second respondent in G.O(Ms) No.191 Highways and Minor Ports

(HF2) Department, dated 29.09.2022.

2.Heard the learned counsel appearing on either side and perused

the materials placed before this Court.

3.The learned counsel appearing for the petitioner would submit

that the petitioner is a registered Class I contractor registered during

2007. His registration was renewed from time to time and the last

renewal was made up to 2022-2023. He is having a valid license to

participate in the tender to the value over and above Rs.75,00,000/-. He

has also invested a huge amount so as to develop and improve the works

to the convenience of the respondent. As a contractor, he has been

carrying out various contract works for various departments. Considering

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W.P(MD)No.26796 of 2022

the machineries and equipment as well as the work force available with

him, he was granted various works. He has completed a work of

construction of bridge across Vellaiyar river on 17.09.2021 for a value of

Rs.187.52 lakhs. Another bridge was constructed by him at the value of

79.19 lakhs across Kondiyar. He has also constructed another bridge

across Samantham Cavery channel for a value of Rs.89.74 lakhs and the

same was completed on 17.09.2021 and 29.01.2021 respectively.

Recently, he participated in the tender for construction and maintenance

floated by the District Collector/Chairman DRDS Sivagangai. The prize of

the contract was Rs.31,76,303/-. He has to keep his workers engaged in

the contract work only then, he can pay the salary. While so, the first

respondent by proceeding in G.O(Ms) No.191 Highways and Minor Ports

(HF2) Department, dated 29.09.2022 called for various works including

widening and strengthening the roads, construction of bye-pass and

bridges etc., for the year 2022-2023. The total cost of the same was Rs.

5,58,180/- crore and administrative sanctions were also accorded.

Several works were floated individually and independently division wise in

the said order. The Pudukkottai dvision was subdivided into 5 sub

divisions that is 1) Alankudi, 2) Aranthanki and Avudaiyarkovil 3) Karur 4)

Pudukottai and 5) Thirumayam. As per G.O(Ms) No.191, Highways and

Minor Ports (HF2) Department dated 29.09.2022, 11 works are sanctioned

with regard to Alankulam, 8 works were sanctioned with regard to

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W.P(MD)No.26796 of 2022

Aranthanki and Avudaiyarkovil, 7 works were allotted to Keeranoor, 20

works were allotted to Pudukottai sub division and 9 works were allotted

to Thirumayam sub division. Therefore, he was awaiting for the

respondents to call for the tender independently. However, by the

impugned order, the respondents grouped the works into packages

according to their whims and fancies and the works were sought to be

allotted for limited contracts. Such activities of the respondents would

eliminate the contractors like him and thereby they will not be in a

position to participate in the works.

5. He would further submit that the said impugned order is

taking away the rights of the various small contractors. If a contractor

fails to get tender works, he will be loosing the experience to participate

in future tenders. By implementing the package system, the respondents

are trying to eliminate various contractors by violating Article 14 of the

Constitution of India. The principles of equality before law and equal

protection of law is being violated due to the activities of the respondents.

Splitting up of works would grant opportunity to various persons.

However, by the package system, such right to participate is being taken

away. Considering the same, the Government issued G.O.ms.No.139,

Public Works Department, dated 27.09.2021 abolished the package

system. Unmindful of the same, the respondents are floating tender

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W.P(MD)No.26796 of 2022

under package system. He would be disqualified in as much as he is not

eligible to participate in the tender and therefore, prayed for stay the

operation of all further proceedings. The learned counsel appearing for

the petitioner relied on various judgments of this Court.

6. According to the petitioner, separate works would be

allotted and they cannot allot package system. If package system is

followed, small contractors fail to get tender works and they will be

loosing the experience to participate in tenders. By implementing the

package system, the respondents are trying to eliminate various

contractors. Therefore, the same is in violation of Article 14 of the

constitution of India.

7. The learned Special Government Pleader appearing for the

respondents would submit that it is a policy decision taken by the

Government in the interest of the public to see that the works are

completed at the earliest so that public is not put to inconvenience. He

would further submit that ineligible tenderers are eliminated at the initial

stage itself so that the tender process could be completed very smoothly

and effectively in the interest of the public. He would further submit that

there is no violation of Articles 14.

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W.P(MD)No.26796 of 2022

8. Heard the learned counsel appearing on either side and

perused the materials available on record.

9. The Superintending Engineer (H) C & M Circle,

Tiruchirappalli invites percentage bids under Two Cover System through

Online for various works in Tender Notice No.21/2022-2023/HDO, dated

21.10.2022 and the same can be downloaded at free of cost upto

01.12.2022, 14.00 hours. The bidder should be a registered eligible

contractor of Tamil Nadu Highways Department with upto date renewal for

the year 2022-23 with valid Digital Signature Certificate and the bids must

be uploaded with scanned copy of EMD pertaining to the works as per the

above table in the prescribed form drawn in favour of the Divisional

Engineer (H), C & M, Pudukkottai Division and other conditions are

stipulated.

10. G.O(Ms) No.162, Highways & Minor Ports Department,

dated 01.10.2012, came to be issued on the recommendations of Director

General of Highways Department. In paragraph 4 of the Government

Order itself, the recommendations of the Director General, Highways

Department have been extracted, which read as follows:-

“ In the letters fourth and fifth read above, the Director General, Highways Department has proposed to Re-introduce package system, in which number of works may be grouped to

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W.P(MD)No.26796 of 2022

a value of Rs.5,00/- Crores to Rs.15.00 Crores as a major work for easy execution. he has putforth the advantages/justifications of the system which are envisaged as follows:-

i) Only Major contractors having sufficient knowledge in Road Management System with sound financial capacity can participate in the tender under package system.

ii)Major contractors will be having sufficient Tools and Plants including CMP site. hence, the quality of work at site and CMP can be ensured property.

iii)If the works are to be executed at remote areas and in difficult terrains, the contractors would not come forward to participate in the tenders. But if these works are grouped together under package system, the major contractors will take part in the tenders without hesitation, which in turn speed up the examination and early completion.

iv) Price adjustment clause is applicable for the value of works more than Rs.1.00 Crore. Hence, sudden variation in cost of material will not affect the contractors, which invite more number of contractors to participate in tenders with competition.

In paragraph 6 of the order, it is stated as follows:-

6. The Director General, Highways Department has stated that, if the package system is re-introduced, the works are proposed to be grouped to form packages, to a total value of Rs.5 Crores to Rs.15 Crores, then the number of packages coating Rs.5 Crores, under plan works will be around 400 works and under non plan works will be 100. The tender proposals for all these packages have to be placed before Commissionerate of Tenders for approval, which will https://www.mhc.tn.gov.in/judis

W.P(MD)No.26796 of 2022

accumulate pressure to Commissionerate of Tenders in many fold. In order to reduce the accumulate pressure to work pressure to the Commissionerate of Tenders and to avoid cost over run and time over run of the project, the tender approving powers of the Chief Engineers Highways may be enhanced from Rs.2.00 Crores to Rs.10.00 Crores at Estimate Rate (or) below Estimate Rate for easy finalization of tender and speedy entrustment of works and thereby completion of project in time without any additional expenditure.”

11. In Union of India and another v. International Trading Co.,

and another 11, this Court held that non-renewal of permit by the

Government to a private party on ground of change in its policy cannot be

faulted if such change is founded on Wednesbury reasonableness and is

otherwise not arbitrary, irrational and perverse. It was held:-

                                  “22.   If   the   State   acts    within      the     bounds       of
                          reasonableness,      it   would   be     legitimate     to      take    into

consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed.

23. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates

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harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil (2003) 5 SCC 437 sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country.”

12. In the case of Directorate of Education and Ors. v.

Educomp Datamatics Ltd. and ors. 12, this court, inter alia, applied the

principles enunciated in Tata Cellular and Monarch infrastructre (P) Ltd

and held as follows:

“12. It has clearly been held in these decisions that the terms of the invitation to tneder are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. it is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the https://www.mhc.tn.gov.in/judis

W.P(MD)No.26796 of 2022

terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.”

13. After taking into consideration of the hardships and

difficulties in single tender system, the Government took a policy decision

by giving the reasons for reintroduction of package system. When the

Government has applied its mind taking into consideration of the

hardships, difficulties and delay in concluding the works in a time bound

manner, the package system has been introduced and the same cannot be

found fault with.