Orissa High Court
M/S P.K. Minerals Private Ltd vs State Of Odisha And Others on 18 May, 2023
ORISSA HIGH COURT: CUTTACK
W.P.(C) No. 32063 OF 2022
In the matter of an application under Articles 226 and
227 of the Constitution of India.
--------------
AFR
M/s P.K. Minerals Private Ltd. ..... Petitioner
-Versus-
State of Odisha and others ..... Opp. Parties
For Petitioner : M/s S.K. Dash, A.K. Otta,
S. Das, A. Sahoo and P. Das,
Advocates
For Opp. Parties : Mr. P.P. Mohanty,
Addl. Govt. Advocate
[O.P.Nos.1 to 3]
Mr. U.C. Beura, Advocate
[O.P.No.4]
P R E S E N T:
THE HONOURABLE DR. JUSTICE B.R.SARANGI
AND
HONOURABLE MR. JUSTICE M.S. RAMAN
Date of hearing: 10.05.2023 : Date of judgment: 18.05.2023
DR. B.R. SARANGI, J. M/s P.K. Minerals Private Ltd., a
company registered under the Companies Act, 1956, has
// 2 //
filed this writ petition seeking to set aside the order dated
20.10.2022 passed in OMMC Appeal No.33 of 2022 by the
Appellate Authority-cum-Sub-Collector, Keonjhar, as well
as the order dated 05.08.2022 passed by the Competent
Authority-cum-Tahasildar, Banspal in Sand Stone Quarry
Case No. 4/2020-21, and to issue direction to the
opposite parties to settle the Karangadihi Stone Quarry in
its favour in accordance with law.
2. The factual matrix of the case, in a nutshell, is
that the Tahasildar, Banspal, on 18.07.2022, floated an
auction notice for long term lease of Karangadihi Stone
Quarry for a period of five years, i.e., from the financial
year 202-23 to 2026-27. The last date of submission of
bid was fixed to 04.08.2022 and the date of opening of bid
was fixed to 05.08.2022. The auction notice also specified
the list of documents to be enclosed by the bidders along
with the bid application. Duly complying with the
conditions of the auction notice, the petitioner submitted
its bid incorporating the documents as required. The
tender drop box was opened, on 05.08.2022 at 11.30
// 3 //
A.M., by the selection committee, comprising of
Tahasildar, Banspal, Addl. Tahasildar, Banspal and
Revenue Inspector. Five sealed envelopes were found to be
submitted by Dileswar Behera, Anil Khirwal, Soumyajit
Mohanty, M/s P.K. Minerals (P) Ltd. (petitioner herein)
and M/s Sri Venkateswar Construction. On scrutiny of
the documents, it was found that bids of Dileswar Behera,
Anil Khirwal, Soumyajit Mohanty were not accompanied
with required documents.
2.1 The tender notice contained a mandate that the
incomplete applications will not be taken into
consideration and those will be rejected, and that the bid
applications will be scrutinized in presence of the bidders
or their representatives, and only the bid applications
complying with all the terms will be taken into
consideration, and the bidder quoting highest rate of
additional charges will be selected. The purpose behind it
is only transparency in the matter of selection of the
bidder. Since bid applications of Dileswar Behera, Anil
Khirwal and Soumyajit Mohanty were incomplete, those
// 4 //
bid applications were rejected on the ground of
"insufficient documents".
2.2 The petitioner had enclosed all the required
documents along with the bid application. As per Rule
27(4)(iv) of the Odisha Minor Minerals Concession
(Amendment) Rules, 2022, which required the bidder to
submit the income tax return of previous financial year
for an amount not less than the amount of additional
charge offered and other dues or bank guarantee valid for
a period of 18 months for the amount of additional
charges etc. offered, the petitioner, in compliance thereto,
had also offered bank guarantee issued by the Banker,
i.e., Axis Bank Ltd. to the tune of Rs.75, 00,000/- and
Rs.5,00,000/- in favour of the Tahasildar, Banspal for a
period of 18 months to comply with the requirements of
the Rules and Clause-5 of the tender call notice. The
petitioner had no dues of Goods and Service Tax (GST)
and, on 28.07.2022, he applied before the Superintendent
of Central Excise, CGST, Keonjhar-1 Range for issuance
of a "No Dues Certificate" to comply with Clause-7 of the
// 5 //
auction notice. But, the CGST authorities advised the
petitioner to download the information from their website
and, accordingly, the petitioner had downloaded the
information from their website, which contained the
information that the petitioner had no outstanding GST
dues.
2.3 The opposite party no.4 had enclosed a check
list along with its bid application and vide sl.no.5 though
it had enlisted "income tax return of FY 2021-22", but in
effect it had enclosed the income tax return for the
assessment year 2021-22 for the financial year 2020-21.
The tender notification was issued on 18.07.2022 and,
therefore, the bidder was required to submit the income
tax return for the financial year 2021-22 ending
31.03.2022. Therefore, the bid submitted by opposite
party no.4 was without the income tax return of the
financial year 2021-22. Apart from the same, opposite
party no.4 at sl.no.8 of the check list had described as
"GST no dues certificate". But it was not a statutory
certificate and the same was issued before his submission
// 6 //
of income tax return of financial year 2021-2022 and, as
such, the same was issued on the request made by the
assessee, as a conditional and not absolute. As such, the
GST authorities had made it clear that the certificate is
not valid in case of any liability arises for the said period
and at the time of scrutiny of the details. Meaning
thereby, the authority reserved the right to cancel and
declare the certificate to be invalid.
2.4 The petitioner raised objection to the effect that
the bid application of opposite party no.4 is incomplete
and, therefore, the same is liable to be rejected. But the
selection committee, instead of rejecting the bid of
opposite party no.4, deferred the selection of the bid and
decided to seek clarification from the concerned
Department of the Government as to the validity of the
income tax return submitted by opposite party no.4 for
the assessment year 2021-22. As such, the bid submitted
by opposite party no.4 should have been rejected as per
sl.no.5 of the check list, which was not complied with, as
the GST no dues certificate submitted by opposite party
// 7 //
no.4 was not in order and the same was conditional one.
Though the selection committee had deferred the selection
of the bid process and was waiting for clarification, but
the competent authority, on the very same day, proceeded
with the selection by declaring opposite party no.4 as
successful bidder. Hence, this writ petition.
3. Mr. S.K. Dash, learned counsel appearing for
the petitioner vehemently contended that though the bid
submitted by opposite party no.4 had suffered from
deficiency and the same was objected to by the petitioner,
but such objection was not taken into consideration. On
information being received under the Right to Information
Act, 2005, since it was found that vide order dated
05.08.2022 the competent authority has declared
opposite party no.4 as successful bidder, the petitioner
preferred appeal under Rule 46 of the OMMC Rules, 2016
and also presented application for stay of impugned order
in terms of Sub-rule (3) of Rule 46 of the Rules, 2016. The
same having not been acceded to, the petitioner has
approached this Court by filing the present writ petition.
// 8 //
It is contended that opposite party no.4 having not
complied with all the requirements of the auction notice,
its bid should have been rejected, as because non-
compliance of the requirements of the tender call notice
vitiates the entire proceeding of selection of successful
bidder. Therefore, the order of selection passed by the
competent authority cannot be sustained in the eye of
law.
3.1 It is further contended that opposite party no.4
got selected merely because it had quoted highest price,
even if it was an unsuccessful bidder, but even though
the petitioner wanted to match with that price, it was not
called upon by the opposite parties, although the bid of
the petitioner was in order. It is further contended that
the competent authority had shown undue haste in
settling the source in favour of opposite party no.4,
inasmuch as, though decision was taken on 05.08.2022
by the selection committee to take confirmation from the
respective department, but on the same day the source
was settled in favour of opposite party no.4, which shows
// 9 //
that the action of the competent authority is arbitrary and
unreasonable. As such, the decision making process by
settling the source in favour of opposite party no.4 cannot
be sustained in the eye of law. Thus, it is contended that
in exercise of power under judicial review, this Court can
interfere with the same and pass appropriate order in
accordance with law.
3.2 To substantiate his contention, learned counsel
appearing for the petitioner has relied upon the
judgments of the apex Court as well this Court in the
cases of Vidarbha Irrigation Development Corporation
and others v. Anoj Kumar Agarwala, (2020) 17 SCC
577; Sachin Kumar Agrawal v. State of Odisha
[W.P.(C) No. 31112 of 2022 disposed of on 03.04.2023];
and Rahul Mishra v. Collector, Bolangir, 114 (2012)
CLT 97.
4. Mr. P.P. Mohanty, learned Addl. Government
Advocate appearing for the State-opposite parties
contended that pursuant to the auction notice dated
// 10 //
18.07.2022, the tender box was opened on 05.08.2022,
wherein five bidders, including the petitioner, were found
to have participated in the bid. After scrutiny, it was
found that the bids of Dileswar Behera, Anil Khirwal and
Soumyajit Mohanty were rejected due to insufficient
documents, whereas the petitioner had quoted a sum of
Rs.271/- as additional charge and opposite party no.4
had quoted a sum of Rs.589/-. As opposite party no.4 had
quoted highest bid of Rs.589/- as additional charge, it
was selected as highest bidder. It is further contended
that as per Clause-7 of the auction notice dated
18.07.2022 the bidder should have furnished a
certificate/letter from the concerned GST jurisdictional
officer that no GST dues are pending against such bidder
and, as such, such condition has been inserted in the bid
documents pursuant to letter dated 13.05.2022 of the
Govt. of Odisha, Revenue and Disaster Management
Department, wherein the State Government had
specifically directed to furnish such certificate by the
bidder with regard to no GST dues pending against such
// 11 //
bidder. It is contended that the petitioner had not
furnished a certificate/letter from the concerned GST
jurisdictional officer that no GST dues are pending
against it and, as such, the petitioner had submitted a
document downloading from the GST site/portal, which
was not accepted by the competent authority, as it was
not in consonance with the letter dated 13.05.2022 of the
State Government and Cluase-7 of the auction notice. It is
contended that opposite party no.4 had submitted income
tax return dated 31.10.2021 along with its bid, which
discloses that its current business was of
Rs.1,81,06,830/- and, thereby, opposite party no.4 has
been selected. Consequentially, he sought for dismissal of
the writ petition.
5. Mr. U.C. Beura, learned counsel for opposite
party no.4 contended that opposite party no.4, having
quoted highest price, was got selected by the authority. It
is contended that as per Sub-section (1) of Section 139 of
the Income Tax Act, 1961 for the financial year 2021-22
the income tax returns was due on 31st October, of the
// 12 //
assessment year 2022-23. Opposite party no.4 is legally
liable to submit its audit report up to 7th October 2022
and income tax returns attaching the said order on or
before 31st October, 2022, for which the previous year
return of the opposite party no.4 is financial year 2020-21
relating to assessment year 2021-22, which was filed by
opposite party no.4 along with the bid documents.
Thereby, no illegality or irregularity has been committed
by opposite party no.4 in submitting its bid and the same
cannot be rejected. It is contended that opposite party
no.4, having quoted highest price of additional charges,
has been granted with the lease to operate the stone
quarry for a period of five years. Thereby, granting the
said lease in favour of the petitioner with a low price does
not arise, and that the same would be improper on the
part of the authority. As a consequence thereof, dismissal
of the writ petition is sought for.
6. This Court heard Mr. S.K. Dash, learned
counsel for the petitioner; Mr. P.P. Mohanty, learned
Addl. Government Advocate appearing for the State
// 13 //
opposite parties no.1 to 3; and Mr. U.C. Beura, learned
counsel appearing for opposite party no.4 in hybrid mode
and perused the record. Pleadings having been exchanged
between the parties, with the consent of learned counsel
for the parties this writ petition is being disposed of
finally at the stage of admission.
7. On the basis of the factual matrix, as
delineated above, before delving into the merits of the case
itself, Clause-(iv) of Rule-27(4) of the Odisha Minor
Minerals Concession (Amendment) Rules, 2022, which is
relevant for the just and proper adjudication of the case,
is taken note of:-
"R-27(4)(iv). Income tax return of previous
financial year showing annual income for an
amount not less than the amount of
additional charge offered and the royalty
payable for the minimum guaranteed
quantity for one whole year or bank
guarantee valid for a period of eighteen
months for the amount not less than the
amount as above."
8. As per the provision mentioned above, the
bidder has to submit the income tax return of previous
// 14 //
financial year for an amount not less than the amount of
additional charge offered and the royalty payable for the
minimum guaranteed quantity for one whole year or bank
guarantee for a period of 18 months for the amount of
additional charges offered. As required under Clause-5 of
the auction notice, though opposite party no.4 had
enclosed a check list along with bid application and vide
sl.no.5 had enlisted "income tax return of FY 2021-22",
but had enclosed the income tax return for the
assessment year 2021-22 for the financial year 2020-21.
As the tender notification was issued on 18.07.2022, the
bidder was required to submit the income tax return for
the FY ending 31.03.2022. If the same would be taken
into consideration, the bid application submitted by
opposite party no.4 was without any income tax return of
the financial year 2021-22, therefore, the same should
have been rejected. Apart from the same, against sl.no.8
of the check list, opposite party no.4 had mentioned "GST
no dues certificate", but the certificate enclosed was not a
statutory certificate and, as such, the same was issued
// 15 //
before the submission of income tax return of FY 2021-
22. Furthermore, the said certificate was issued on the
request made by the assessee and, as such, the same was
a conditional one. The GST Authorities had made it clear
that the certificate is not valid in case of any liability
arises for the said period and at the time of scrutiny of
details. Meaning thereby, the authority had reserved the
right to cancel and declare the certificate to be invalid.
9. So far as the petitioner is concerned, it had no
dues of Goods and Service Tax (GST). On 28.07.2022, the
petitioner had applied to the Superintendent, Central
Excise (CGST, Keonjhar-I Range for issue of a "No Dues
Certificate" to comply with Clause-7 of the auction notice.
But the CGST Authorities advised the petitioner to
download the information from their website. Accordingly,
the petitioner had downloaded the information from their
website, which contained the information that the
petitioner had no outstanding GST dues. Thereby, the
same is in compliance of Clause-7 of the auction notice.
As a consequence thereof, the petitioner objected to the
// 16 //
bid submitted by opposite party no.4, but, without
considering the same, the authorities proceeded with the
decision making process of selection and allotment of the
quarry. On the basis of the materials, which have been
placed by the petitioner at page 182-183 of the writ
petition as Annexure-5, on receipt of the same under the
Right to Information Act, 2005, it would be evident that in
the comparative statement prepared on opening of the
bids on 05.08.2022, which were received pursuant to the
auction notice issued vide Advertisement No. 1895 dated
18.07.2022 with regard to Karangadihi Stone Quarry, the
competent authority has made endorsement to the
following effect:-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Sl. Name & Form Treasu Affida EM IT GST Certific Land PA Documen Agree Charge Date (Accep
No. Address 'M' ry vit D return Registra ate of Plan N ts on d to Quote & ted
of the (triplic Challa of tion No dues and Car available lift d by Cont /Reject
Participan ate) n @ Previo Certifica from Land d & machiner materi Applic act ed)
t with Rs.100 us te GST Sched Oth y and als (in ant No.
Mobile 0/- financi Jurisdict ule er transporta Cum) (per
No. al year ion ID tion Cum.)
or Officer Car
Bank d
Guaran
tee
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16)
05 M/s YES YES YES YE YES YES YES YES YE YES - 589=0
war 0032
Constructi 4/8/22
on, M
partner-
Garta
Naga,
Subraham
anyeswar
Rao.
At/Po-
Rutisila,P.
S-
Pandapad
a Dist-
Keonjhar
// 17 //
1) M/s Sri. Venkateswara Construction,M.P-G.N .S.Rao of Ruti sila has quoted Additional Charge @589
However the IT return submitted for the assessment year 2021-22. Which is to be clarified by the undersigned in consultation with the
concerned department /Authority and the No dues certificate obtained from C.T GST,Jajpur also needs to be confirmed from concerned authority ,if
necessary.
2) M/s P.K.Minerals P.Ltd, Md.Soumyaranjan Pahi, kenonjhar has quoted Additional Charge @ 22%
However the No dues obtained from GST portal needs to be confirmed from concerned department /Authority, if necessary .
Hence, after receiving the above mentioned clarification and confirmation, the tender will be finalized.
10. On perusal of the endorsement of the
committee, it is made clear that opposite party no.4 had
quoted additional charge at the rate of Rs.589/-, but, so
far as its income tax return for the assessment year 2021-
22 is concerned, a clarification was to be given by the
competent authority in consultation with the concerned
department/authority, and, as regards no dues certificate
obtained from the CGST department, confirmation was to
be made by the concerned authority. Similarly, it was
observed that the petitioner had quoted additional charge
of Rs.221/-, but, however, the no dues certificate
obtained from GST portal was needed to be confirmed
from the concerned department/authority, if necessary,
and, thereafter, the tender would be finalized. If such
requirement has to be complied with, pursuant to the
observation made on 05.08.2022, without getting such
// 18 //
clearance from the respective departments and getting
confirmation from the respective authority, as was
observed, the authority could not have proceeded with the
matter and finalize the tender in favour of opposite party
no.4 on the very same day, i.e., 05.08.2022. Thereby, the
entire decision making process of the tendering authority
is arbitrary, unreasonable and contrary to the provisions
of law. Under these circumstances, this Court, in exercise
of the powers conferred under the judicial review, has got
jurisdiction to interfere with the decision making process
of the tendering authority.
11. 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."
// 19 //
12. 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.
(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."
// 20 //
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.
13. In Raunaq International Ltd. v. I.V.R.
Construction Ltd. (1999) 1 SCC 492, the apex Court held
as under:-
"9. 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 of
paramount importance are commercial considerations.
These would be:
(1) the price at which the other side is willing to
do the work;
(2) whether the goods or services offered are of
the requisite specifications;
(3) whether the person tendering has the ability
to deliver the goods or services as per
specifications. When large works contracts involving
engagement of substantial manpower or requiring
// 21 //
specific skills are to be offered, the financial ability
of the tenderer to fulfil the requirements of the job is
also important;
(4) the ability of the tenderer to deliver goods or
services or to do the work of the requisite standard
and quality;
(5) past experience of the tenderer, and whether
he has successfully completed similar work earlier;
(6) time which will be taken to deliver the goods
or services; and often
(7) the ability of the tenderer to take follow-up
action, rectify defects or to give post-contract
services.
Even when the State or a public body enters into a
commercial transaction, considerations which would
prevail in its decision to award the contract to a given
party would be the same. However, because the State
or a public body or an agency of the State enters into
such a contract, there could be, in a given case, an
element of public law or public interest involved even in
such a commercial transaction.
10. What are these elements of public interest? (1)
Public money would be expended for the purposes of
the contract. (2) The goods or services which are being
commissioned could be for a public purpose, such as,
construction of roads, public buildings, power plants or
other public utilities. (3) The public would be directly
interested in the timely fulfilment of the contract so that
the services become available to the public
expeditiously. (4) The public would also be interested
in the quality of the work undertaken or goods
supplied by the tenderer. Poor quality of work or goods
can lead to tremendous public hardship and
substantial financial outlay either in correcting
mistakes or in rectifying defects or even at times in
redoing the entire work--thus involving larger outlays
of public money and delaying the availability of
services, facilities or goods, e.g. a delay in
commissioning a power project, as in the present case,
could lead to power shortages, retardation of industrial
development, hardship to the general public and
substantial cost escalation.
11. When a writ petition is filed in the High Court
challenging the award of a contract by a public
// 22 //
authority or the State, the court must be satisfied that
there is some element of public interest involved in
entertaining such a petition. If, for example, the dispute
is purely between two tenderers, the court must be
very careful to see if there is any element of public
interest involved in the litigation. A mere difference in
the prices offered by the two tenderers may or may not
be decisive in deciding whether any public interest is
involved in intervening in such a commercial
transaction. It is important to bear in mind that by
court intervention, the proposed project may be
considerably delayed thus escalating the cost far more
than any saving which the court would ultimately
effect in public money by deciding the dispute in favour
of one tenderer or the other tenderer. Therefore, unless
the court is satisfied that there is a substantial amount
of public interest, or the transaction is entered into
mala fide, the court should not intervene under Article
226 in disputes between two rival tenderers."
14. 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,
// 23 //
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."
15. In B.S.N. Joshi & Sons Ltd. v. Nair Coal
Services Ltd. (2006) 11 SCC 548 : (2006) 11 Scale 526,
the apex Court observed as follows:
"56. It may be true that a contract need not be
given to the lowest tenderer but it is equally true
that the employer is the best judge therefor; the
same ordinarily being within its domain, court's
interference in such matter should be minimal. The
High Court's jurisdiction in such matters being
limited in a case of this nature, the Court should
normally exercise judicial restraint unless illegality
or arbitrariness on the part of the employer is
apparent on the face of the record."
16. The scope of judicial review has also been taken
into consideration elaborately in Jagdish Mandal
// 24 //
(supra). 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.
// 25 //
17. In Vidarbha Irrigation Development
Corporation and others (supra), 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 auction
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.
18. In Sachin Kumar Agrawal (supra), this Court
already held that once the bid submitted by the petitioner
// 26 //
was not incorporated by the bank guarantee or the
previous year's income tax return, it was defective one
and cannot be entertained as per the tender notice. It was
also clarified in the tender notice that in absence of any
documents, as enumerated in clauses-1 to 14, the
application submitted by the bidder would not be taken
into consideration. Therefore, fully knowing the conditions
stipulated in the tender notice, the petitioner should not
have filed the writ petition for consideration of the bid on
the ground that he had quoted higher price than opposite
party no.5. If the bid submitted by the petitioner was
absolutely void ab initio, in view of non-compliance of the
tender conditions stipulated in the tender notice, he is
estopped from claiming the benefit, as has been claimed
in the writ petition.
19. In Rahul Mishra (supra), this Court in
paragraph-24 of the said judgment held as under:-
"24. Therefore, the application of the
Petitioner, who is already a lessee, may be
considered by putting the sairat source to
auction. It is open for any category of applicant
// 27 //
referred to in Rule 27 including the Petitioner to
participate in public auction of minor mineral &
in case the Petitioner is not found to be the
highest bidder, but agrees to match with the
price at which the bid is knocked, preference
shall be given to him even though he is not the
highest bidder. We make this observation
keeping in view the provision of Rule 27, 35&
36 of the Rules, 2004 vis-à-vis interest of the
State which really means the larger interest of
the people of the State. If the Sairat is settled in
favour of the Petitioner then the same may be
renewed at least for a period of five years in
terms of the observation made by the Hon'ble
Supreme Court in its order in the case of
Deepak Kumar etc (supra) subject to payment of
consideration money each succeeding year
which shall be fixed by increasing 15% of the
consideration money of the immediate
preceding year pending framing of Rules."
20. A contention was raised that opposite party
no.4 had quoted highest price of Rs.589/- as additional
charge and the petitioner had quoted Rs.221/-, therefore,
opportunity should have been given to the petitioner to
match with the bid price of opposite party no.4. But that
question does not arise, in view of the fact that the
document, which had been submitted by the petitioner
with regard to no dues certificate from GST authority, is
also required to be verified by the concerned department/
// 28 //
authority, if necessary. Thereby, this Court is of the
considered view that even if the petitioner is called upon
to match the highest price, but its bid will suffer from
deficiency like that of opposite party no.4. Therefore, the
question of calling upon the petitioner to match the
highest price offered by opposite party no.4 may not arise.
21. In view of the aforesaid facts and law, as
discussed above, it is made clear that the decision making
process in selecting opposite party no.4, being arbitrary,
unreasonable and contrary to the provision of law, cannot
be sustained in the eye of law. Consequentially, the order
dated 05.08.2022 so passed by the Tahasildar, Banspal
settling the source in favour of opposite party no.4 and
confirmation thereof made by the Sub-Collector, Keonjhar
by order dated 20.10.2022 passed in O.M.C.C. Appeal
No.33 of 2022 are liable to be quashed and are hereby
quashed. The opposite party-authorities are directed to go
for fresh tender in respect of Karangadihi Sand Quarry as
expeditiously as possible in the interest of justice, equity
and fair play.
// 29 //
22. In the result, the writ petition is allowed.
However, there shall be no order as to costs.
..............................
DR. B.R. SARANGI,
JUDGE
M.S. RAMAN, J. I agree.
..............................
M.S. RAMAN,
JUDGE
Orissa High Court, Cuttack
The 18th May, 2023, Ashok
Signature Not Verified
Digitally Signed
Signed by: ASHOK KUMAR JAGADEB MOHAPATRA
Designation: Personal Assistant
Reason: Authentication
Location: HIGH COURT OF ORISSA
Date: 18-May-2023 17:55:52
