Citation : 2023 Latest Caselaw 8472 Ori
Judgement Date : 3 August, 2023
ORISSA HIGH COURT: CUTTACK
AFR W.P(C) NO. 13667 OF 2023
In the matter of an application under Articles 226 and
227 of the Constitution of India.
---------------
Aparna Sahoo ..... Petitioner
-Versus-
State of Odisha & Ors. ..... Opp. Parties
For petitioner : M/s. S.K. Dash, P.Dash, A.K.
Biswal and P. Harichandan,
Advocates
For opp. parties : Mr. P.P. Mohanty,
Addl. Govt. Advocate
[O.Ps.1 to 3 & 5]
M/s. R.N. Behera, L.K. Padhi
and S. Dora, Advocates
[O.P.4]
P R E S E N T:
THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR JUSTICE MURAHARI SRI RAMAN
Date of Hearing : 31.07.2023 :: Date of Judgment: 03.08.2023
DR. B.R. SARANGI,J. The petitioner, by means of this writ
petition, seeks to quash the decision taken by the // 2 //
opposite parties no.2, 3 & 5 vide Annexure-2 dated
11.04.2023 and Annexure-4 series dated 13.04.2023
and 11.04.2023 in allowing the technical bid of opposite
party no.4 and declaring him as the successful bidder
in respect of appointment of handling and transport
contractor (transport agent) under Mid-Day Meal
programme of Balasore district for the year 2023-24, in
pursuance of the tender call notice dated 15.03.2023.
2. The factual matrix of the case, in brief, is
that opposite party no.2-Collector & District Magistrate,
Balasore-cum-Chairman (MDM), Balasore vide
Annexure-1 invited a tender call notice on 15.03.2023
for appointment of transport agent under Mid-Day Meal
programme in respect of Balasore district for the year
2023-24 from the eligible contractors. As per the said
tender call notice, the tender was to be submitted
through registered post and the last date for
submission of tender was 10.04.2023 at 4.00 PM. The
date and time of opening of tender papers was
11.04.2023 at 11.00 AM. Clause-2 of the tender call
notice contained the general instructions and guidelines // 3 //
for the tenderer. Under Clause-2.3 thereof, it was
stipulated that 'in case the cost of tender paper, EMD
and any other document as per Annexure-II is not
enclosed with the technical bid, the tender paper shall
be rejected'.
2.1 Pursuant to the tender call notice dated
15.03.2023, the petitioner, being an experienced
transport and handling contractor having valid license,
submitted her bid on 06.04.2023 enclosing all the
relevant documents. The tender was opened on
11.04.2023 by the tender committee and the said
committee prepared a comparative statement in
presence of the representatives of the tenderers and/or
tenderers. In the said check list/comparative statement,
the tender committee as against opposite party no.4
recorded, in respect of the documents required under
column nos.6, 7, 10, 11, 12, 13, 14 and 15, that "Not
submitted in Technical Bid but submitted in Main
envelope". Even though opposite party no.4, along with
the technical bid, had not submitted the documents
required under the columns noted above, his technical // 4 //
bid was allowed by the tender committee contravening
the conditions stipulated in the tender call notice.
2.2 The authorized representative of the
petitioner immediately submitted an objection on
11.04.2023, which was received on 12.04.2023 by the
District Education Officer, Balasore, whom the tender
was submitted. But, without considering the objection,
the tender committee opened the price bid on
13.04.2023 in absence of two members of the tender
committee, namely, DSWO, Balasore and R.T.O,
Balasore. On the said date, the tender committee drawn
a proceeding and declared opposite party no.4 as L-1
and selected him as H & T Contractor (MDM) for the
year 2023-24 (up to 30.04.2024). Hence, this writ
petition.
3. Mr. S.K. Dash, learned counsel appearing for
the petitioner vehemently contended that the selection
of opposite party no.4 as successful bidder is in gross
violation of the conditions stipulated in the tender call
notice. Thereby, his selection is arbitrary, unreasonable // 5 //
and contrary to the provisions of law. Apart from the
same, there was gross defect in the decision making
process of selecting opposite party no.4 as successful
bidder. Nevertheless, the objection raised by the
petitioner with regard to disqualification incurred by
opposite party no.4 was not considered. Therefore, the
decision making process adopted by the opposite
parties cannot be sustained in the eye of law and
consequentially, the same should be quashed.
4. Mr. P.P. Mohanty, learned Addl. Government
Advocate appearing for the State-opposite parties
contended that on the date of opening of the tender, as
per guidelines, the EMD, technical bid and price bid
should be kept in the main envelope and at the time of
opening of the envelops, it was found that all envelopes
were found in order, but some papers of technical bid
(check list of Annexure-II) of opposite party no.4 were
not kept in the technical bid envelop, but those
documents were kept in the main envelop. It is further
contended that opposite party no.4 had quoted the
lowest amount of Rs.127/- per quintal, whereas the // 6 //
petitioner had quoted Rs.148.70 per quintal and
another bidder, namely, Sri Surenjan Barik had quoted
Rs.149.09 per quintal. Therefore, opposite party no.4
was selected and appointed as transport contractor.
Thereby, no illegality or irregularity has been committed
by the tender committee in selecting opposite party no.4
as successful bidder.
5. Mr. R.N. Behera, learned counsel appearing
for opposite party no.4 vehemently contended that
pursuant to bid invitation notice of re-tender for
transportation of MDM food grain in Balasore district
issued on 15.03.2023, opposite party no.4, being
eligible, submitted his technical and financial bid along
with tender papers, cost of Rs.20,000/- (non-
refundable) within time to the office of the District
Education Officer, Balasore. The tender paper was
opened on the given date and time in the bid invitation
notice (Annexure-I), where opposite party no.4 came out
successful and other two tenderers became
unsuccessful. Therefore, the work was allotted in favour
of opposite party no.4. It is further contended that // 7 //
opposite party no.4 submitted all the relevant
documents, as stipulated under Claue-7 (tenderer
process) of the tender call notice, i.e., Annexure-1
(Technical Bid), Annexure-II (Check list), Annexure-III
(Declaration), Annexure-IV (price bid) and Annexure-V.
On consideration of the same, opposite party no.4 was
declared successful bidder. Therefore, the writ petition
at the instance of the petitioner should be quashed.
6. This Court heard Mr. S.K. Dash, learned
counsel appearing for the petitioner; Mr. P.P. Mohanty,
learned Addl. Government Advocate appearing for the
State-opposite parties and Mr. R.N. Behera, learned
counsel appearing for opposite party no.4 in hybrid
mode. Pleadings have been exchanged between the
parties and with the consent of learned counsel for the
parties, the writ petition is being disposed of finally at
the stage of admission.
7. Before delving into the issue involved in this
case, the relevant provisions contained in the bid
invitation notice of re-tender for transportation of MDM // 8 //
food grain in Balasore district under Annexure-1 dated
15.03.2023 are quoted below:-
"2. General Instruction and Guidelines for the Tenderer:-
2.3. In case the cost of Tender Paper, EMD and any document as per ANNEXURE-II is not enclosed with the Technical Bid, the Tender Paper shall be rejected.
2.4. The District Tender Committee reserves the right to negotiate with the Tenderer for a workable rate.
xxx xxx xxx
7. Tenderer Process:-
7.1 Tenderer participating in the tender process shall submit a technical bid & price bid in response to the Tender call notice.
7.2 Earnest Money Deposit (EMD), Technical Bid and Price Bid shall be contained in separate sealed envelopes clearly marked "EMD", "Technical Bid" & "Price Bid" as per norms specified below.
7.2.1 First sealed envelope will contain only the EMD. This envelope shall be marked "PART-I- EMD".
7.2.2. Second sealed envelope will contain the Technical Bid (Annexure-1), check list (Annexure-II) & Declaration (Annexure-III) & solvency certificate. This envelope shall be marked: "PART-II-TECHNICAL BID".
7.2.3 Third sealed envelope will contain the Price Bid (Annexure-IV), of this envelope shall be marked PART-III-PRICE BID.
7.2.4. FOURTH sealed envelope will contain all the THREE envelopes sealed separately i.e. EMD, TECHNICAL BID & PRICE BID with superscription "TENDER FOR APPOINTMENT // 9 //
OF TRANSPORTING AGENT UNDER M.D.M PROGRAMME IN BALASORE DISTRICT."
xxx xxx xxx
8.4. Information about Tenderers. The Tenderers must furnish full, precise, correct and accurate details of information asked for in the Tender documents. Technical Bid & Price Bid.
xxx xxx xxx
30. Instruction to fill up the Technical Bid:-
"30.1 The Tenderer shall go through the Tender Documents thoroughly before filing the Technical Bid (Annexure-I) and submitting the same at Office of the DEO Balasore.
30.2. The number of pages in the Tender Paper and Tender Document to be checked to ascertain that all the pages are intact.
30.3 The Technical Bid has to be filled neatly and there shall be no overwriting.
30.4 All the columns of the Technical Bid have to be filled Column which is not required to be filled by a Tendered, a cross mark (X) has to be given against that Column.
30.5 The Tenderer shall affix a self attested pass port size photograph on the Technical Bid at the specified space.
30.6 The Tenderer shall enclose the cost of Tender Paper.
30.7 The tenderer shall enclose the cost of EMD of requisite amount.
30.8 All the documents as per the Check List (Annexure-II) have to be .
30.9 Conditional Bid shall not be accepted.
30.10 In case any Forged Documents noticed during verification of documents or period of Agreement, the EMD & Security Deposit as the case may be shall be forfeited.
// 10 //
30.11 The Tenderer shall submit an declaration stating the fact that he has agreed to the conditions, terms and other details of the Tender Paper and Documents (Annexure-III).
30.12 The Tender Paper, Tender Document, Technical Bid and copy of the documents (Annexure-II) & declaration (Annexure-III) have to be signed by the Tenderer.
30.13 Documents to be enclosed as per Annexure have to be attested by the Notary Public.
30.14 All the pages of the Tender paper should be duly signed by the Tenderer."
Annexure-II states about Check List which categorically speaks about the document to be attached with the technical bid.
8. If aforementioned provisions of the bid
invitation notice are carefully perused, it would be seen
that Clause-2.3 clearly provides that in case the cost of
tender paper, EMD and any document as per Annexure-
II is not enclosed with the technical bid, the tender
paper shall be rejected. Clause-7 deals with Tenderer
Process. Under Clause-7.2.2 it is clarified that second
sealed envelope will contain the Technical Bid
(Annexure-1), check list (Annexure-II) & Declaration
(Annexure-III) & solvency certificate. The said envelope
shall be marked "PART-II-TECHNICAL BID". Clause-
7.2.3 envisages that Third Sealed Envelope will contain // 11 //
price bid and Clause-7.2.4 states that Fourth Sealed
Envelope will contain all the three envelopes sealed
separately, i.e., EMD, technical bid and price bid with
superscription "TENDER FOR APPOINTMENT OF
TRANSPORTING AGENT UNDER M.D.M. PROGRAMME
IN BALASORE DISTRICT". Clause-7.3 provides that
envelope containing technical bid will be opened first
and Clause-7.4 states that price bid of the tenderer,
who qualifies in the technical bid shall be opened and
considered. In Clause-8.4, it has been stated that the
tenderer must furnish full, precise, correct and
accurate details of information asked for in the tender
documents, technical bid and price bid. Similarly,
Clause-30 deals with the instruction to fill up the
technical bid. Annexure-1 of the tender documents
relates to technical bid, which specifies filing of different
documents. Annexure-II of the tender documents
relates to check list, which speaks about the documents
to be attached with the technical bid. Therefore, these
are the requirements to be fulfilled by the tenderers
pursuant to bid invitation notice.
// 12 //
9. Pursuant to such notice inviting tender, the
petitioner, opposite party no.4 and one Surenjan Barik
submitted their bids within the specified date and time
and their tender papers were also opened on the date
and time fixed by the tender committee, i.e.,
11.04.2023. The tender committee also prepared a
check list/comparative statement in presence of the
representatives of the tenderers. In the said check
list/comparative statement, the tender committee
stated as against opposite party no.4, in respect of the
documents required under column nos.6, 7, 10, 11, 12,
13, 14 and 15, that "Not submitted in Technical Bid but
submitted in Main envelope". Since the documents filed
in the main envelope were taken into consideration,
opposite party no.4 was selected as successful bidder.
10. Therefore, the question arises if the tender
conditions stipulate in Clauses-7.2.1, 7.2.2 and 7.2.3 a
specific mode of submission of documents, whether any
deviation thereof can be legally permissible and if any
relaxation has been made by the tender committee for
determination of the bid in favour of opposite party // 13 //
no.4, in that case whether the tender committee has
acted in consonance with the tender conditions or not.
11. As per Clause-7.2.1 of the tender documents,
first sealed envelope will contain only the EMD and the
said envelope shall be marked "PART-I-EMD". Clause-
7.2.2 states that second sealed envelope will contain the
Technical Bid (Annexure-1), Check List (Annexure-II) &
Declaration (Annexure-III) & solvency certificate. The
said envelope shall be marked as "PART-II-TECHNICAL
BID". Similarly, Clause-7.2.3 indicates that "Third
sealed envelope will contain the Price Bid (Annexure-
IV), of this envelope shall be marked PART-III-PRICE
BID. Clause-7.2.4 indicates that fourth sealed envelope
will contain all the three envelopes sealed separately i.e.
EMD, technical bid & price bid with superscription
"TENDER FOR APPOINTMENT OF TRANSPORTING
AGENT UNDER M.D.M. PROGRAMME IN BALASORE
DISTRICT". Therefore, each envelope contains relevant
documents for each category. If any of the tender
conditions is not satisfied, then, as per Clause-2.3 of
the bid inviting notice, the tender paper shall be // 14 //
rejected. As such, there is no relaxation clause available
in the bid documents. Therefore, a tenderer should
adhere to Clauses-7.2.1 to 7.2.4 scrupulously. Clause-
30 of the bid invitation notice states about instruction
to fill up the technical bid. As per Clause-30.1, the
tenderer shall go through the tender documents
thoroughly before filling the technical bid (Annexure-1)
and submitting the same at Office of the DEO Balasore.
Similarly, Clause-30.8 states that all the documents, as
per the check list (Annexure-II), have to be submitted.
Since a mode has been prescribed how to submit bid
and if it is not adhered to, there is defect in submission
of technical bid.
12. In Shiv Sagar Tiwari v. Union of India
and Ors., AIR 1997 SC 1483. The apex Court held that
whatever procedure the Government proposes to follow
in accordance with the tender must be clearly stated in
the tender notice. The consideration of the tender
received and procedure followed in the matter of
acceptance of tender should be transparent, fair and
open.
// 15 //
Similar view has also been taken in Common
Cause v. Union of India, 1996 (6) SCC 593.
13. After opening of the technical bid, a
comparative statement was prepared. The tender
committee also recorded, so far as columns no.6, 7, 10,
11, 12, 13, 14 & 15 are concerned "not submitted in
technical bid but submitted in the main envelope"
which is apparent from the document annexed as
Annexure-2 to the writ petition. Thereby, opposite party
no.4 has violated the condition stipulated under
Clause-7.2.2 of the bid invitation notice. As a
consequence thereof, he, having not adhered to the
tender conditions, has incurred disqualification and any
relaxation given by the tender committee is in gross
violation of the said clause.
14. It may be contended that it is too technical to
take such a plea. But Clauses-7.2.1 to 7.2.4 of the bid
invitation notice prescribe the specific mode that cannot
be ignored on mere understanding of technical defect.
There is some meaning attached to each of the clause to // 16 //
be adhered to for the purpose of consideration of
selection of tenderer. If in violation thereof the tender
committee selects, the decision has to be considered
illegal, arbitrary and contrary to the provisions of law.
This fact has been admitted in paragraph-6 of the
counter affidavit filed by opposite party no.3, which is
quoted below:-
"6. ....... It is humbly submitted that on the date of opening of the tender, as per guidelines, the EMD, technical bid and the price bid should be kept in the main envelope and at the time of opening of the envelopes, it was found that all envelopes were found in order, but some papers of technical bid (Check list of Annexure-II) of the Opp. Party No.4 were not kept in the Technical Bid envelop, but those documents were kept in the main envelope."
From the above, it can be safely inferred that what has
been stated by the tender committee in their
comparative statement in respect of the technical bid,
the same has been duly acknowledged in the counter
affidavit filed by opposite party no.3. As such, opposite
party no.4 has taken a contrary stand in paragraph-6 of
his counter affidavit. But the comparative statement of
technical bid under Annexure-2, to which the
representative of opposite party no.4 is also a signatory, // 17 //
clearly states what the technical committee has noted.
Thereby, opposite party no.4, having acknowledged the
defect in his own tender document, cannot take a
different stand than that has been recorded in the
document placed on record as Annexure-2. Once
opposite party no.4 has acknowledged the recording of
the tender committee made in Annexure-2 by putting
his signature therein, which has been duly endorsed in
the counter affidavit filed by opposite party no.3, viz.,
the tendering authority, who is also a party to the
tender committee, any action taken or any stand taken
by opposite party no.4 bereft of any document available
cannot be sustained in the eye of law.
15. It may be noted that in exercise of power of
judicial review in respect of contracts entered into on
behalf of the State or instrumentality of the State, such
as Corporation, the Court prima facie concerns whether
there has been any infirmity in the decision making
process. In that case, the Court can examine whether
the decision making process was reasonable, rationale // 18 //
not arbitrary and not violative of Article-14 of the
Constitution of India.
16. In Sterling Computers Ltd. v. M & N
Publications Ltd. (1993) 1 SCC 445, the apex Court
observed as under:-
"18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the 'decision-making process'. ... the courts can certainly examine whether 'decision- making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution."
17. In Tata Cellular v. Union of India, (1994) 6
SCC 651 : AIR 1996 SC 11, the apex Court, referring to
the limitations relating to the scope of judicial review of
administrative decisions and exercise of powers in
awarding contracts, held to the following effect:-
"(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 action. 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.
// 19 //
(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. ... 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 apex Court also noted that there are inherent
limitations in the exercise of power of judicial review in
contractual matter. As such, it was observed that the
duty to act fairly will vary in extent, depending upon the
nature of cases, to which the said principle is sought to
be applied. It was further held that the State has the
right to refuse the lowest or any other tender, provided
it tries to get the best person or the best quotation, and
the power to choose is not exercised for any collateral
purpose or in infringement of Article 14.
// 20 //
18. In Air India Ltd. v. Cochin International
Airport Ltd. (2000) 2 SCC 617, the apex Court, while
summarizing the scope of interference as enunciated in
several earlier decisions, held as follows:-
"7. ... The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene."
// 21 //
19. The scope of judicial review has also been
taken into consideration elaborately in Jagdish Mandal
v. State of Odisha, (2007) 14 SCC 517. In paragraph-
22 of the said judgment, the apex Court held as
follows:-
"..............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";
(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."
Similar view has also been reiterated in
Michigan Rubber (India) Limited v. State of
Karnatak, (2012) 8 SCC 216 and Maa Binda Express
Carrier v. North East Frontier Railway, (2014) 3 SCC
760. // 22 //
20. In Vidarbha Irrigation Development
Corporation v. M/s Anoj Kumar Agarwalla), (2020) 17
SCC 577, the apex Court, in paragraph-16 of the
judgment, held as under:-
"16. It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court."
Since in the instant case opposite party no.4 has not
complied with the conditions, as stipulated in the tender
notice, and the committee has decided to make a
verification and confirmation from the concerned
authorities, instead of doing so, the same could not
have been settled in favour of opposite party no.4.
21. In Afcons Infrastructure Limited v. Nagpur
Metro Rail Corporation Limited, (2016) 16 SCC 818, // 23 //
the apex Court held that the constitutional courts are
concerned with the decision making process. A decision
if challenged (the decision having been arrived at
through a valid process), the constitutional Courts can
interfere if the decision is perverse. However, the
constitutional Courts are expected to exercise restraint
in interfering with the administrative decision and ought
not substitute its view for that of the administrative
authority.
22. Considering the facts and law, as discussed
above, since the selection of opposite party no.4 as a
transport agent has been made in gross violation of the
tender conditions contained in Annexure-1, this Court,
in exercise of power under judicial review, as the
decision making process for selection of opposite party
no.4 is arbitrary, unreasonable and contrary to the
provisions of law and violates the terms and conditions
of the tender, holds that the same cannot be sustained
in the eye of law. Accordingly, the decision of the tender
committee taken, vide Annexure-2 dated 11.04.2023
and Annexure-4 series dated 13.04.2023 and // 24 //
11.04.2023, in selecting opposite party no.4 as
transport agent, pursuant to bid invitation notice under
Annexure-1 dated 15.03.2023, is liable to be quashed
and is hereby quashed. As a consequence thereof, this
Court directs opposite party-authorities to go for a fresh
tender in conformity with the provisions of law for
appointment of transport agent under M.D.M.
programme in respect of Balasore district for the year
2023-24.
23. In the result, the writ petition stands allowed,
but, however, under the circumstances of the case there
shall be no order as to costs.
(DR. B.R. SARANGI)
JUDGE
M.S. RAMAN, J. I agree.
(M.S. RAMAN)
JUDGE
Signature Not Verified
Digitally Signed Orissa High Court, Cuttack
Signed by: ALOK RANJAN SETHYThe 3rd August, 2023, Alok Designation: Secretary Reason: Authentication Location: Orissa High Court Date: 03-Aug-2023 16:39:09
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