Giridharilal Agrawal vs State Of Odisha & Others
2021 Latest Caselaw 637 Ori

   IN THE HIGH COURT OF ORISSA AT CUTTACK

          WRIT PETITION (CIVIL) No. 7548 OF 2019

(An application under Articles 226 and 227 of the Constitution of
India.)


Giridharilal Agrawal                            ......        Petitioner

                                  Versus

State of Odisha & Others                        ....... Opposite Parties

Advocate(s) who appeared in this case by video conferencing mode:-

For Petitioner              :      Mr. P.C. Nayak, Advocate

For Opposite Parties        :      Mr. P.K. Muduli,
                                   Additional Government Advocate


             CORAM : THE CHIEF JUSTICE
                     MR. JUSTICE S.K. MISHRA

                                JUDGMENT

20th January, 2021

Dr. S. Muralidhar, CJ.

1. Claiming to be the lowest bidder for the tender for the work "Construction of Road under Pradhan Mantri Gramya Sadak Yojana vide Package No.OR-24-203-A Hatibandha to Dhungiamunda via Charpali", the Petitioner, who is a registered 'A' Class contractor has filed this writ petition for a mandamus to be issued to the Opposite Parties comprising the State of Odisha (Opposite Party No.1), the Engineer-in-Chief, Rural Works (Opposite Party No.2), the Chief Engineer (PMGSY) (Opposite Party No.3), the Superintending

Engineer, Rural Works Circle, Bhawanipatana (Opposite Party No.4) and Executive Engineer, Rural Works Division, Khariar, Nuapada (Opposite Party No.5) to execute the agreement in his favour for the said contract. Further prayer of the Petitioner is for quashing the proceeding dated 12th March, 2019, communicated to the tender authority on 15th March, 2019, disqualifying his bid.

2. Among the tender conditions, Clause 4.4 reads as under:

"Clause - 4.4 (A). To qualify for award of the contract, each bidder should have in the last five years:-

a) Achieved in any one year, a minimum financial turnover as certified by Chartered Accountant, and at least 50% of which is from Civil Engineering Construction works) equivalent to amount given below.

(i) 60% of amount put to bid, in case the amount put to bid is Rs.200 lakhs and less.

(ii) 75% of amount put to bid, in case the amount put to bid is more than Rs.200 lakhs.

The amount put to bid above would not include maintenance cost for 5 years and the turnover will be indexed at the rate of 8% per year.

If the bidder has executed road works under Pradhan Mantri Gram Sadak Yojana in originally stipulated completion period, the financial turnover achieved on account of execution of road works under PMGSY shall be counted as 120% for the purpose of this sub- clause.

In Naxal/Left Wing Extremist Affected Districts, the figures of 60% and 75% in (i) and (ii) above would be replaced by 50%.

(b) Satisfactorily completed, as prime contractor or sub-contractor, at least one similar road work/long span bridge work equal in value to one third (one fourth in case of Naxal/LWE affected Gajapati,

Malkangiri, Rayagada, Deogarh and Sambalpur districts) of the estimated cost of work (excluding maintenance cost for five years) for which the bid is invited, or such higher amount as may be specified in the Appendix to ITB. The value of road work/bridge work completed by the bidder under Pradhan Mantri Gram Sadak Yojana in originally stipulated period of completion shall be counted as 120% for the purpose of this sub clause."

The other relevant clause is Clause 27, which reads thus:

"Clause 27 : - Award Criteria 27.1 Subject to clause 30 of ITB, the Employer will award the contact to the Bidder whose Bid has been determined.

(i) to be substantially responsive to the bidding documents and who has offered the lowest evaluated Bid price, provided that such bidder has been determined to be (a) eligible in accordance with the provisions of clause 4 of ITB; and

(ii) to be within the available bid capacity adjusted to account for his bid price which is evaluated the lowest in any of the packages opened earlier than the one under consideration."

3. It appears that four bidders including the present Petitioner had participated pursuant to the tender call notice. According to the Petitioner, the technical bids of all four of them were found to be in order. It is further stated that on 4th March, 2019, the price bid was opened and the Petitioner was found to have quoted the lowest amount and was declared L-1. The Petitioner states that he learnt of a complaint against him by unknown persons that the tender authority had counted one fourth of the value of the similar nature of past work of the Petitioner instead of executed one third of similar nature of

work. The Petitioner states that he met the Opposite Party Nos.2 and 3 and submitted a representation dated 28th February, 2019 stating that the work was to be executed under Nuapada district and that as per the guidelines of the Ministry of Home Affairs (MHA), Government of India as well as the guidelines of the Reserve Bank of India (RBI) and the Ministry of Rural Development (MRD), Nuapada district is a left wing extremism (LWE)s affected (Naxal Affected District) and that as such it counted towards one fourth of similar nature of work in terms of the tender notice.

4. In support of the above plea, the Petitioner relies on the list of LWE Districts published by the MRD on 31st December, 2013, where Nuapada figures at Sl.No.24 of the 106 LWE affected districts. He also relies on the subsequent circular dated 24th February, 2016 of the MHA and circular dated 14th June, 2018 of the RBI.

5. The Petitioner further refers to the proceeding of the Committee constituted to scrutinize the documents in relation to his bids for three works under experience of similar nature of work i.e. Rs.40.77 lakhs (SL.No.a), Rs.27.77 lakhs (SL.No.b) and Rs.16.82 lakhs (Sl.No.c). The Committee decided that all the Petitioner's bids should be rejected. It is decided that Package No.OR-24-202 (B) and Package No.OR-24-203(A) the L2 bidder may be considered for award of the contract. As far as Package No.OR-24-202(A) since only two bidders had participated and after rejection of the Petitioner's bid, the remaining bid would become the first and single bid and therefore, it was decided to cancel the tender and re-invite the bid.

6. In the above circumstances that the present petition has been filed seeking reliefs as noted hereinbefore.

7. When the petition was listed on 9th April, 2019, notice was directed to be issued to the Opposite Parties. On 16th December, 2019 an application seeking amendment of the writ petition was allowed.

8. A preliminary counter affidavit was filed by the Opposite Party No.5 where inter alia it is pointed out that the Orissa State Rural Road Agency (OSRRA) was competent to take a decision regarding award of the particular tender. It is further stated that in the Detailed Tender Call Notice (DTCN) itself, the names of the LWE districts were clearly mentioned; Nuapada district was not included therein. It is stated that indeed a complaint was made against the Petitioner's bid, which was placed before the Tender Grievance Redressal Committee. After scrutinizing of the records, the complaint was found to be genuine. The Committee on 12th March 2019 declared the Petitioner disqualified due to inadequate experience in similar nature of work. The OSRRA accepted this and issued a similar declaration on 13th March, 2019.

9. In the rejoinder affidavit, the Petitioner has not been able to dispute the fact that Nuapada was not among the LWE districts. All that is stated that the disqualification has taken place behind the back of the Petitioner.

10. An additional affidavit has been filed by Opposite Party No.5 on 11th December, 2020. After reiterating that only Gajapati,

Malkangiri, Rayagada, Deogarh and Sambalpur have been considered as LWE affected districts and that Nuapada district is not an LWE affected district, it is pointed out as under:

"In support of Clause - 4.4A (b) of the DTCN, the Petitioner was required to submit documents like satisfactorily completion of at least one similar nature of work. The civil construction work excluding maintenance work in question is to be satisfactorily completion of at least one similar nature of work for package No.OR-24-203(A) is Rs.158.98/3 = Rs.52.99 lakhs as the work to be executed in the district of Nuapada which is not a Left Wing Extremist affected district as per Clause - F.4A(b) of the DTCN. Whereas the Petitioner submitted the similar nature of work experience certificate of Rs.40.77 lakhs, Rs.27.77 lakhs and Rs.16.82 lakhs out of which none of the experience certificate fulfills the required amount i.e. Rs.52.99 lakhs."

11. It is pointed out that the reasons for rejection of all the three bids of the Petitioner in respect of Packages No.OR-24-202(A), OR-24- 202 (B) and OR-24-203(A) is the same. It is further contended that the Petitioner having accepted the rejection of two of his three bids is estopped the question and rejection of the third bid i.e. Package No.OR-24-203(A). It may also be mentioned that the Opposite Parties have also filed I.A. No.10980 of 2020 seeking modification of the interim order dated 9th April, 2019 in which the Court stated that any decision with regard to tender in question shall be subject to result of the writ petition.

12. This Court is heard the submissions of Mr. P.C. Nayak, learned counsel for the Petitioner and Mr. P.K. Muduli, learned Additional Government Advocate for the State-Opposite Parties.

13. Mr. Nayak places considerable reliance on the decision in M/s. D.K. Engineering and Construction v. State of Odisha 2016 (II) OLR 558; Union of India v. Hanil Era Textiles Limited (2018) 13 SCC 219; Central Coalfields Limited v. SLL-SML (Joint Venture Consortium) (2016) 8 SCC 622 and Food Corporation of India v. M/s. Kamdhenu Cattle Feed Industries (1993) 1 SCC 71. It is contended that there was no occasion to call for a report after the financial bid was opened and the Petitioner was declared to be the lowest i.e. L1. The calling for a report behind the back of the Petitioner was arbitrary, illegal and violative of Article 14 of the Constitution. It is further contended that the Opposite Party No.3 has erred in rejecting the bid on the ground of non-fulfillment of the conditions regarding the work of similar experience by excluding Nuapada district from the list of LWE districts.

14. On the other hand, Mr. P.K. Muduli, learned Additional Government Advocate for the State, places reliance on a series of judgments including State of U.P. v. Sudhir Kumar Singh 2020 SCC Online SC 847; Caretel Infotech Limited v. Hindustan Petroleum Corporation Limited (2019) 14 SCC 81; Municipal Corporation, Ujjain v. BVG India Limited (2018) 5 SCC 462; State of Uttar Pradesh v. Al Faheem Meetex Private Limited (2016) 4 SCC 716; Rishi Kiran Logistics Private Limited v. Board of Trustees of Kandla Port Trust (2015) 13 SCC 233; and Pramod Kumar Sahu v. State of Orissa 2016 (II) OLR 819.

15. In the present case, the tender conditions made it absolutely clear what the eligibility criteria was. It is made clear that to qualify for the award of contract, each bidder would have to show that in the past

five years he had achieved in any one year, a minimum financial turnover as certified by the Chartered Accountant, and at least 50% of which is from Civil Engineering construction works equivalent to the following:

(i) 60% of amount put to bid, in case the amount put to bid is Rs.200 lakhs and less; and

(ii) 75% of amount put to bid, in case the amount put to bid is more than Rs.200 lakhs.

16. In Naxal/LWE affected districts, the figures of 60% and 75% would be replaced by 50%. The fact of the matter is that DTCN clearly mentioned which districts were LWE affected districts. Five districts were mentioned and it did not include Nuapada. The fact that certain MHA circulars issued in 2016 may have included Nuapada in the list of LWE affected districts is to no avail. As far as the present tender was concerned one had to go by what was included in the list of LWE affected districts as mentioned therein. Having participated in the tender by offering the bid knowing clearly that the DTCN itself did not mention Nuapada district as LWE affected, the Petitioner could have been under no mistaken notion in that regard. It is too late in the day, having participated in the bid and not succeeding in getting the contract awarded in his favour, for the Petitioner to turn around and now contend that Nuapada district should be considered as LWE affected district. This is crucial because the Petitioner is unable to dispute the fact that he has not satisfied the essential conditions of Clause 4.4(A) read with (B). In other words, the experience certificate submitted by the Petitioner regarding similar nature of work did not fulfill the minimum required

amount of Rs.52.99 lakh as far as Package No. OR-24-203(A) is concerned.

17. In Deva Metal Powders v. Commissioner of Trade Tax, (2008) 2 SCC 439, the Supreme Court recognized the principle that if the authority which approved the tender initially, discovered a mistake, it was within its rights to correct that error. It cannot also be said that the decision taken was behind the back of the Petitioner. As mentioned by the Petitioner himself, the Petitioner was aware of the complaint having been made against him and he made a representation to the Opposite Parties in that regard on 28th February, 2019. He was fully aware that the issue was regarding the Petitioner considering Nuapada district to be LWE affected district whereas in fact it was not. In the circumstances, the question of decision being taken behind the back of the Petitioner or being violation of the principles of natural justice, does not arise.

18. The legal position explained in the decisions relied upon by both the Petitioner as well as the Opposite Parties is fairly well settled. While it is true that in the area of contracts, all State action has to conform to Article 14 of the Constitution, whether in fact the action is arbitrary or not would have to depend, obviously, on the facts and circumstances of every case. The reasons that weighed with the Opposite Parties to disqualify the Petitioner in the present case appear to be fully justified. Indeed, the Opposite Parties had at the initial stage overlooked the fact that the work experience certificate produced by the Petitioner including the works for the Nuapada district, which is not a LWE affected district. In the circumstances,

disqualifying the Petitioner for the award of tender cannot be held to be arbitrary and illegal requiring any interference.

19. For the aforementioned reasons, the Court finds no merit in the writ petition and it is accordingly dismissed. The interim order stands vacated.

20. As the restrictions due to the COVID-19 situation are continuing, learned counsel for the parties may utilize a soft copy of this order/judgment available in the High Court's website or print out thereof at par with certified copy in the manner prescribed, vide Court's Notice No.4587 dated 25th March, 2020.

............................

S. Muralidhar Chief Justice

......................

S.K. Mishra Judge

20th January, 2021 //S.K. Jena, P.A.//