Nilamadhab Joshi vs State Of Odisha And Others
2021 Latest Caselaw 639 Ori

   IN THE HIGH COURT OF ORISSA AT CUTTACK

        WRIT PETITION (CIVIL) No. 6604 OF 2020, and
         WRIT PETITION (CIVIL) No. 12854 OF 2020


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


Nilamadhab Joshi                              ......          Petitioner

                                Versus

State of Odisha and Others                    ....... Opposite Parties

Advocate(s) who appeared in these cases by video conferencing mode:-

For Petitioner                   :       Mr. A.K. Biswal, Advocate


For Opposite Party Nos.2 and 5 :         Mr. S.K. Mishra, Advocate

For Opposite Party Nos.1, 3      :       Mrs. Suman Pattanayak,
and 4                                    Additional Government Advocate


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

                             JUDGMENT

20th January, 2021

Dr. S. Muralidhar, CJ.

1. The Petitioner, who is a transport contractor has filed this writ petition challenging the validity of the tender call notice (TCN) dated 12th May, 2020 for selection and appointment of Level-II Transport Contractors in the district of Sundargarh.

2. Initially against a TCN dated 7th February, 2020 which again was floated for selection and appointment of Level-II Transport Contractors, the Petitioner had filed Writ Petition (Civil) No.6604 of 2020 in this Court, in which an interim order was passed on 20th February, 2020 to the effect that the tender process may continue but no final decision will be taken without leave of the Court.

3. When the second writ petition i.e. W.P.(C) No.12854 of 2020 was first listed before the Court on 9th June, 2020, the following order was passed:

"Heard Mr. A.K. Biswal, learned counsel for the petitioner and learned Additional Government Advocate appearing for opposite party nos.1 & 4 through Video Conferencing.

By means of this writ application, the petitioner has prayed for quashing of tender call notice dated 12.5.2020 under Annexure-6 for appointment of Level-II Transport Contractor in respect of Sundargarh District. According to Mr. Biswal, earlier, the present petitioner had challenged the tender call notice dated 7.2.2020 in the district of Sundargarh in W.P.(C) No.6604 of 2020 covering the same work. This Court vide its order dated 20.2.2020 while issuing notice to the opposite parties, directed that the tender might continue but no final decision shall be taken without leave of the Court till the next date. The said matter has not yet been listed before this Court and accordingly, the interim order passed therein continues as on date. The opposite party nos.2 to 5 by over-reaching the process of Court and in order to frustrate the mandate of the above interim order withdrew the earlier tender call notice and thereafter a fresh tender call notice in respect of same work has been floated on 12.5.2020. In order to verify as to whether the interim order passed by this Court in the earlier writ application pertains to the self same work and is still continuing, we called for the original file

from the office and found that the scope of the work is same as in the present case and the interim order granted therein also continues subsists as on date. In such background, let notice be issued.

Learned Additional Government Advocate accepts notice on behalf of opposite party nos.1 & 4. Let two extra copies of the brief be served on her in order to enable him to file counter affidavit by the next date.

Issue notice to opposite party nos.2,3 & 5 by Registered Post with A.D. fixing a short returnable date within three weeks. Requisites shall be filed within a week.

List this matter on 1.7.2020 along with W.P.(C) No.6604 of 2020.

In the interim, it is directed that status quo as on today with regard to award of the work shall be maintained till the next date.

As lock-down period is continuing for COVID-19, learned counsel for the petitioner may utilize the soft copy of this order available in the High Court's Website or print out thereof at par with certified copies in the manner prescribed, vide Court's Notice No.4587, dated 25.3.2020."

4. The said interim order has continued till date. When the pleadings having been completed in both the matters, they are taken up for final hearing together.

5. Vis-à-vis both the TCNs i.e. the one dated 7th February, 2020 and the subsequent one dated 12th May 2020, the grievances of the Petitioner is that by means of Clause 4.1 read with Clause 5.1 and the definition of the 'family', the Opposite Parties have gone beyond the standard definition and included relatives such as brothers, sisters

and married sons for being debarred from participating in the tender. The submission in short is that the definition of 'family' as contained in the impugned TCNs is bad in the eye of law.

6. To further understand the issue, a reference can be made to the relevant clauses of the TCN i.e. Clauses 4.5 and 5.1, which read as under:

"4.5 The tenderer shall furnish an affidavit in the prescribed format (enclosed at Annexure-5) declaring non-involvement in commercial interest of his/her family members or Partners along with their family members or Directors along with their family members, as the case may be, for consideration of her/his appointment under this tender.

xx xx xx 5.1 No person shall be appointed as Level-II Transport Contractor under this tender process, if s/he or the Director or proprietor or partner or any of her/his family members has a commercial interest in a business relating to Handling Contractor/State Level Transport Contractor/Level-I Transport Contractor/ Level-II Transport Contractor/PEG Go-down Lessor and/or custom milling of rice for OSCSC Ltd. for the district and all the neighbouring districts with common boundary for which s/he intends to apply under this tender.)

The term 'Family' & 'Commercial Interest" have been defined in detail at Clause-I of the PART-I Technical Bid]"

7. The above clauses have to be read along with definition of 'family' in Part-I pertaining to "Technical Bid", which reads as under:

"i. The term 'Family' shall mean a. parent b. husband/wife

c. sons/daughters (including adopted children) and their spouse d. full blood siblings (brothers & sisters from common parents) and their spouse."

8. The terms 'Commercial Interest' has been defined in clause (w), which reads thus:

"w. The term 'Commercial Interest' shall mean a business, partnership or company for the operation as Handling Contractor/State Level Contractor/Level-I Transport Contractor/Level-II Transport Contractor/ PEG Go-down lessor and/or Custom Miller for OSCSC Ltd. for the district for which one intends to apply under this tender and all neighbouring districts with common boundary."

9. The case of the Petitioner is that the above definition has been introduced for the first time only to somehow qualify the Petitioner from being empanelled as a Level-II Transport Contractor. A grievance is also made about the stipulation of making the Earnest Money Deposit (EMD). It is stated that in the impugned tender call notice, the workable rate is 10 to 15% less than the TCN dated 27th February, 2019 for the year 2019-20. It is contended that the said stipulation is without any basis though the labour and the transport rate has been hiked in the meantime.

10. In W.P.(C) No.6604 of 2020, a counter affidavit has been filed by the Manager (Law), Orissa State Civil Supplies Corporation Limited (OSCSL) on behalf of the Opposite Party No.2 and 5. It is explained that the price bid pursuant to the TCN dated 27th February, 2019 was opened, the Petitioner was selected for engagement as Level-II Transport Contractor in respect of Rajgangpur, Kutra Block/Unit. The Petitioner was asked by letters dated 19th September, 2019 to

submit the required documents and execute the agreement by 27th September, 2019. However, the Petitioner failed to do so.

11. In the meanwhile, by letter dated 27th September 2019, the Managing Director (MD), OSCSCL instructed that the tender process for appointment of Level-I and II Transport Contractors for the year biennial 2019-21 should be cancelled if no agreement is executed. Accordingly, the tender process by the aforementioned TCN dated 27th February, 2019 was cancelled.

12. Thereafter, another TCN dated 7th February, 2020 was issued inviting tenders for engagement of Level-II Transport Contractors for 21 Units. There was single bidder for two units i.e. Lahunipara Block and Lathikata block. There were no bids for the other units. This necessitated issuing fresh tender call notice dated 12th May, 2020. It is however stated that because of the interim order passed by this Court, no final decision was taken on the said notice.

13. The affidavit also explains the logic behind the change definition 'family'. It is stated that the intention behind cancellation of the tender was to prevent the formation of 'cartel' by the handing Contractors i.e. Level-I and Level-II Contractors or PEG Godown owner among themselves and attempt to control the entire Public Distribution System (PDS). Accordingly, the District Managers annulled the tender process and have gone for de novo tendering with stringent conditions. This order was further modified on 15th October, 2019 by expanding the definition of 'family' to include parents, husband/wife, sons/daughters and their spouses (including adopted children), full blood siblings and their spouse. It is further

decided to debar such bidder to be appointed as Handling Contractor i.e. Level-I and Level-II Transport Contractors under this tender process, if he/she or any of her/his family members has a commercial interest in a business relating to handling contractor/Level-I Transport Contractor/Level-II Transport Contractor, PEG Go-down lessor, Custom Miller and/or custom milling of rice for OSCSC Ltd. under DCP scheme of Government of India for the district and its neighbouring district with common boundary. A reference is made to Clause 15.2 of the tender documents which authorizes the District Tender Committee to reject any or all tender without assigning any reason. According to the said clause, the District Tender Committee reserves the right to reject any or all tenders without assigning any reason thereof and does not bind himself to accept the lowest or any tender. Accordingly, it is submitted by the Opposite Parties that there is no illegality attaching to cancellation of the tender process.

14. A separate counter affidavit has been filed by the OSCSCL on the same lines.

15. Mr. A.K. Biswal, learned counsel appearing for the Petitioner in both the writ petitions contends that the stipulation in Clauses 4.5 and 5.1 read with the definition of 'family' was discriminatory, illegal and arbitrary. It is further submitted that it is also irrational that on the one hand the authority was asking for experienced contractors and on the other hand inserting stipulation that inevitably inviting experienced persons from participating in the tender.

16. As regards floating of fresh tender, he explains the reasons why the earlier tender could not be proceeded with when a fresh tender had to be floated. As regards the EMD fixation, it is stated that as per

the OGFR Rules, the tender floated can fix EMD upto 2 to 5% of the estimated tender value. Clause 6.1 of the tender documents dated 5th February, 2020 fixed the EMD at 5% and therefore, this was not excessive. It is further pointed out that for determining the workable rate all factors have to be taken into consideration as per the rates provided with the tender documents by the District Tender Committee for each unit. It is further explained that it is necessary to exclude some of the persons already engaged in the activities and having commercial interest as there was a chance of manipulation of the district supply of good grains for PDS.

17. Having considered the submission of learned counsel for the parties, the Court is not satisfied that sufficient grounds exist for interference by the Court. The Court is unable to agree that the definition of 'family' is too broad and wide and was inserted to somehow deliberately disqualify the persons like the Petitioner. There is a need to ensure a level playing field and a fair and equal opportunity where competitive bidding is to take place. By debarring the family members, which could well include the siblings of the person bidding, nothing arbitrary or illegal has been sought to be introduced into the process done by the Opposite Parties. The measure has a reasonable nexus to the object of ensuring a fair and level playing field for bidders. It eliminates one possible source of bias that might vitiate the process. Indeed it was important to break the 'cartel' and domination of certain family groups to form a network and capture all the available contracts. The expansion of the definition of 'family', therefore, appears reasonable to the Court and cannot be said to be hit by Article 14 of the Constitution. Even the

stipulation regarding EMD does not appear to be unreasonable or contrary to any settled law.

18. The Court accordingly finds no ground to interfere in both the writ petitions, which are accordingly dismissed. The interim orders stand vacated. However, there shall be no order as to costs.

19. 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.//