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W.P. (C) No. 34 of 2022
Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Extra Ordinary Jurisdiction)
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SINGLE BENCH: THE HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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W.P. (C) No. 34 of 2022
1. Mr. Sonam Tsewang Bhutia,
S/o Mr. Lobsang Wangchuk Bhutia,
R/o Gnathang GPU,
J.N. Road, East Sikkim
Pin No. 737101.
2. Mr. Jigmee Dorjee Bhutia,
S/o Late Tashi Bhutia,
R/o Yakla Village, Gnathang GPU,
J.N. Road, East Sikkim,
Pin No. 737101.
3. Mr. Tenzing P. Bhutia,
S/o Late Singhi Bhutia,
R/o Gnathang GPU,
J.N. Road, East Sikkim,
Pin No. 737101.
4. Mr. Pempa Tshering Bhutia,
S/o Mr. Tshering Sangpo Bhutia,
R/o Bhojoghari, East Sikkim
Pin No. 737101.
..... Petitioners
Versus
1. State of Sikkim through,
The Chief Secretary,
Government of Sikkim
Tashiling Secretariat,
Gangtok, East Sikkim,
Pin No. 737101
Email: [email protected]
2. The Commissioner-cum-Secretary,
Rural Management Development Department
Government of Sikkim,
Gram Vikash Bhawan,
Gangtok, East Sikkim
Pin No.737101
Email: [email protected]
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W.P. (C) No. 34 of 2022
Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
3. The Divisional Engineer,
East District Zilla Panchayat,
Rural Development Department,
DAC-Sichey, East Sikkim,
Pin No. 737101
Email: [email protected]
4. Block Development Officer,
Block Administrative Center,
Nandok, East Sikkim,
Pin No. 737102.
5. Mr. Lobsang Penzor Bhutia,
S/o Late Tenzing Ongda Bhutia,
Panchayat President, 15-Gnathang,
Gram Panchayat Unit, Panchayat
Office Near Jubilant School,
Old SNT Complex Chandmari, Gangtok,
Pin No. 737103.
6. Mr. Tenzing Thinlay Bhutia,
S/o Sonam Gyatso Bhutia,
R/o Kupup, J. N. Road, Gangtok
East Sikkim,
Pin No. 737102.
7. Mrs. Yangden Bhutia,
Wife of Kesang Bhutia,
R/o Chandmari Gangtok,
East Sikkim Pin No. 737102.
8. Mr. Sherap Sangpo Bhutia,
S/o Tsultrim Bhutia,
R/o Zaluk, R.N. Road,
East Sikkim, Pin No. 737102.
.....Respondents
Application under Article 226 of the Constitution of
India.
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Appearance:
Mr. Karma Thinlay Namgyal, Senior Advocate with Mr.
K.T. Gyatso and Mr. Yashir N. Tamang, Advocates for
the Petitioners.
Dr. Doma T. Bhutia, Additional Advocate General for
the Respondent Nos. 1 to 4.
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W.P. (C) No. 34 of 2022
Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Dr. Doma T. Bhutia, Senior Advocate with Mr. S.K.
Chettri, Advocate for respondent no.5.
Mr. Zangpo Sherpa and Ms. Anjali Shah, Advocates
for the respondent no.6.
Mr. Bhusan Nepal, Legal Aid Counsel for respondent
nos. 7 & 8.
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Date of hearing : 09.11.2022
Date of Judgment : 02.12.2022
JUDGMENT
Bhaskar Raj Pradhan, J.
1. The petitioners challenge the tender process and seek
quashing of the bid opening summary dated 14.03.2022
and eight work orders bearing Memo Nos. 1 to
8/WO/JJM/BAC/NDK/2021-22 all dated 29.03.2022
(work orders) awarded in favour of respondent nos. 6, 7
and 8 by the State-respondents after the decision of the
Gram Sabha of Gnathang Gram Panchayat Unit headed by
the respondent no.5 (the Panchayat Sabhapati) in its
meeting held on 14.03.2022 on the ground that he
favoured them as they were his relatives. The petitioners
also seek re-tender of all the works.
2. These work orders relate to Rural Water Supply
Schemes at Changu, Chipsu, Thegu, Yakla, Sherathang,
Kupup and Gnathang.
3. According to the petitioners, the petitioner nos. 1, 2
and 3 are eligible Grade-IV contractors residing in 4
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Gnathang GPU and the petitioner no.4 is a Grade-II
contractor and a former Panchayat of Gnathang GPU. The
petitioners alleged that the Panchayat Sabhapati was
related to respondent nos. 6, 7 and 8 who ultimately were
awarded the tenders by an arbitrary, illegal and malafide
process.
4. It is the specific allegation of the petitioners that the
Panchayat Sabhapati conducted a closed tender process,
failed to give wide publicity to the Notice Inviting Tender
(NIT), ensured that very little time was available to
prospective bidders to participate, conducted the
Panchayat Gram Sabha as its Sabhapati although he was
fully aware that the bidders who participated in the tenders
were all his close relatives and granted the tenders to them
i.e. the respondent nos. 6, 7 and 8 in complete disregard to
all settled principles of law governing tenders. It is the
further case of the petitioners that the respondent nos. 6,
7 and 8 bid in the tender process for the 8 tenders in such
a manner that ensured that the three of them would get
one tender or the other and no other. Further, it is also
their case that the respondent nos. 6, 7 and 8 participated
in tenders pertaining to wards they did not belong to with
the active involvement of the Panchayat Sabhapati in 5
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
violation of the Sikkim Public Works Manual, 2009 as
amended in the year 2018.
5. The State-respondents as well as respondent nos. 6, 7
and 8 vehemently object to the examination of the merits of
the case on the ground that the petitioners did not have the
locus standi to challenge the tender process as they did not
participate. They also submit that there was considerable
delay in the petitioners approaching this Court due to
which work orders have been issued in favour of
respondent nos. 6, 7 and 8 creating third party rights.
While the State-respondents plead that the cement oriented
works have since been completed except for laying of High
Density Polyethylene Pipes (HDPE Pipes) it is the stand of
the respondent no. 6 that he has completed 85% of the
works; respondent no. 7 that she has completed 60% of the
works; and respondent no.8 that he has completed 50% of
the work. It is the specific stand of the State-respondents
that there is no law which requires the Panchayat
Sabhapati to recues himself from participating in the
tender process merely because the respondent nos. 6, 7
and 8-the successful bidders were his relatives. It is their
stand that since the Rural Water Supply Scheme is Jal
Jiwan Mission, the Sikkim Public Works Manual, 2009 is
not strictly applicable and they are governed by the 6
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Implementation Manual for Gram Panchayat Development
Plan issued by the Rural Management and Development
Department (the Implementation Manual). It is urged that
the Jal Jiwan Mission is a laudable mission to provide
every household in villages to have functional household
taps by the year 2024 and to supply them with potable
water in adequate quantity and therefore, interference by
the writ court would hamper the process. It is also urged
that as it was a time bound mission to be completed within
six months, public interest must prevail and the writ
petition ought to be dismissed.
6. Mr. Karma Thinlay Namgyal, learned Senior Advocate
for the petitioners while placing the facts as narrated
above, submitted that the entire tender process was a
sham and ought to be quashed. He relied upon the
judgment of the Andhra Pradesh High Court in M/s Tata
Power Renewable Energy vs. Union of India1 to submit that
physical or personal or economic injury may give rise to
civil or criminal action but violation of law either by
ignoring or affronting individual or action of the executive
in disregard of provision of law raises substantial issue of
accountability of those entrusted with responsibility of the
administration. It furnishes enough cause of action either 1 judgment of dated 17.06.2021 in W.P. No.674 of 2021 7
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
for individual or community in general to approach by a
way of writ petition and the authorities cannot be permitted
to seek shelter under cover of technicalities of locus standi.
The judgment of the Supreme Court in Gadde
Venkateshware Rao vs. Government of Andhra Pradesh2 and Dr.
Sathya Narayan Sinha vs. S. Lal and Company3 was cited to
clarify that persons other than those claiming fundamental
rights can also approach the writ court seeking relief under
Article 226. He relied upon the Supreme Court judgment
in Calcutta Gas Company vs. State of West Bengal4 to submit
that the rule of standing can be relaxed in certain writs. He
also relied upon the judgment of the Supreme Court in
State of Orissa vs. Ram Chandra Dev5 and submitted that
under Article 227 of the Constitution the jurisdiction of the
High Court is undoubtedly very wide and appropriate writs
can be issued even for purposes other than enforcement of
fundamental rights.
7. Dr. Doma T. Bhutia, appearing as the learned
Additional Advocate General for the State-respondents and
as a Senior Counsel for the Panchayat Sabhapati relied
upon the judgment of the Supreme Court in N.G. Projects
2 (AIR) 1966 SC 828 3 (1973) 3 SCC 693 4 (AIR) 1962 SC 1044 5 (AIR) 1964 SC 685 8
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Limited vs. Vinod Kumar Jain6 and submitted that even if the
Court finds there is total arbitrariness or that the tender
has been granted in a malafide manner, still the Court
should refrain from interfering in the grant of tender but
instead relegate the parties to seek damages.
8. Dr. Doma T. Bhutia also relied upon the judgment of
the Supreme Court in Bharat Coking Coal Ltd. vs. Amr Dev
Prabha7 and submitted that the Constitutional Courts are
concerned only with lawlessness of a decision, and not its
soundness. The Courts ought not to sit in appeal over
decisions of executive authorities or instrumentalities and
plausible decisions need not be overturned, and latitude
ought to be granted to the State in exercise of executive
power so that constitutional separation of powers is not
encroached upon. The power of judicial review will not be
permitted to be invoked to protect private interest at the
cost of public interest, or to decide contractual disputes.
9. Citing another judgment of the Supreme Court in
State of M.P. vs. Nandlal Jaiswal8 Dr. Doma T. Bhutia
submitted that due to inordinate and unexplained delay in
filing writ petition resulting in creation of third party rights
6 (2022) 6 SCC 127 7 (2020) 16 SCC 759 8 (1986) 4 SCC 566 9
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
in favour of respondent nos. 6, 7 and 8 the writ petition
should be dismissed.
10. Mr. Zangpo Sherpa, learned counsel for the
respondent no. 6 while supplementing the arguments made
by the State-respondents cited the Supreme Court
judgment in National Highway Authority of India vs. Gwalior-
Jhansi Expressway Ltd.9 and of the Calcutta High Court in
Subir Ghosh vs. State of West Bengal10 and Praxair India Pvt.
Ltd. vs. Central Vigilance Commissioner11 to impress upon
this Court that as the petitioners had failed to participate
in the tender process they cannot be permitted to challenge
the award of tender in favour of the respondent nos. 6, 7
and 8.
11. As the respondents have vehemently argued that the
petitioners had no locus standi and therefore, this Court
ought not to consider their case on merits, the issue is
taken up first.
12. The petitioners have approached this Court seeking to
have the tender process quashed pleading that the State-
respondents in connivance with respondent nos. 6, 7 and 8
have conducted the tender process in ex-facie illegal,
arbitrary and unconstitutional manner ultimately awarding
9 (2018) 8 SCC 243 10 2020 SCC OnLine Cal. 2213 11 2022 SCC OnLine Cal. 466 10
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
the tenders in favour of the chosen bidders. It is asserted
that the entire procedure followed by the State-respondents
from the time of calling the NIT till the passing of the work
order is nothing but a farce, stage managed by the
Panchayat Sabhapati whose real intent was not to have
competitive bids or the best offers but to exclude the
genuine bidders and grant the tenders in favour of his
relatives. It is also specifically pleaded by the petitioners
that by such a tender process their fundamental rights
have been violated. It is pleaded that the petitioner nos. 1,
2 and 3 are eligible Grade-IV contractors residing within
Gnathang Gram Panchayat Unit (GPU) and that the
petitioner no.4 is a Grade-II contractor and a former
Panchayat of the Gnathang GPU. The petitioners
specifically alleged the close relationship between the
Panchayat Sabhapati and the respondent nos. 6, 7 and 8
which is not contested by them. It is not only specifically
pleaded but it is also borne from the records that: (i) the
NIT did not specify that only Grade-IV contractors of the
ward could participate in the tender although that was the
mandate of the Sikkim Public Works Manual, 2009 as well
as the direction of the concerned Assistant Engineer in his
memo dated 25.02.2022; (ii) the NIT was published only on
08.03.2022 although the Assistant Engineer directed the 11
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Panchayat Sabhapati to do so on 25.02.2022; the NIT
published on 08.03.2022 provided only two days thereafter,
to purchase the tender forms and three days thereafter to
submit the tender; (iii) the memo dated 02.03.2022 of the
Panchayat Sabhapati to the Sikkim Herald was physically
taken by one Gyatso Bhutia, the Panchayat Sabhapati's
brother and father of respondent no.6-one of the successful
bidders. He is also the same person seen in the photograph
filed by the Panchayat Sabhapati to show the tender
process.
13. The facts in National Highway Authority of India (supra)
were different than the one before this Court. The Supreme
Court had held that only the persons who participated in
the tender process pursuant to a tender notice can be
allowed to make a grievance about the non-fulfilment or
breach of any of the terms and conditions of the tender
documents. In the case before this court the petitioners
specifically plead that due to the illegal tender process
eligible bidders were kept out from participating in it.
Further, the petitioners do not seek to challenge the terms
and conditions of the tender documents but it is their case
that the Panchayat Sabhapati did not follow the mandate of
the Sikkim Public Works Manual, 2009 as well as the
instructions of the Assistant Engineer in his memos. In the 12
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
present case there is specific allegations of connivance
between the Panchayat Sabhapati and his relative who
were awarded the tenders i.e. respondent nos. 6,7 and 8;
favouritism by the Panchayat Sabhapati; his malafide acts;
and the tender process being stage managed to ultimately
grant the tenders to respondent nos. 6, 7 and 8 without
allowing anybody else to participate in the eight tenders.
Nevertheless it must be noted that the Supreme Court
clearly held that the objective of the tender is not only to
adhere to a transparent mechanism but to encourage
competition and give equal opportunity to all tenderers
which is apparently not done in the tenders in issue.
Similarly, the facts in Subhir Ghosh (supra) and Praxair
India Private Limited (supra) are also distinguishable from
the facts of the present case.
14. In Airport Authority of India vs. Central for Aviation
Policy, Safety & Research (CAPSR)12 relied upon by Mr.
Zangpo Sherpa the Supreme Court noted that none of the
GHA's who participated at the tender process and/or could
have participated in the tender process have challenged the
tender condition. In the present case the petitioner alleged
that the illegal tender process adopted by the State-
respondents as well as the Panchayat Sabhapati ensured 12 2022 SCC OnLine SC 1334 13
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
that eligible bidders had been kept out. Therefore, it could
very well be that had the petitioners not been kept out in
the manner alleged, they could have participated in the
tender process. It is averred that the petitioner no.1 and 3
belong to the Gnathang ward and the petitioner no.2 to the
Yakla Sherathang ward and all of them were Grade-IV
contractors. According to the Petitioner No.4 he is a Grade-
II contractor so he may not have been eligible. It is
however, evident that the petitioner nos. 1, 2 and 3 at least
did have the locus standi to bring the present action before
this Court.
15. At this juncture it would be relevant to state certain
facts borne from the records placed before this Court. The
Sikkim Public Works Manual, 2009 was brought into force
from 11.09.2009 and made applicable to all works
departments where the Government has approved
establishment of Civil Engineering Cells/Wings. The
Government Departments/Agencies as well as private
sector undertakings are expected to adhere to the
provisions thereof as per the preface. The memos were
issued by the concerned Assistant Engineer of the Block
Administrative Centre (BAC), Nandok on 25.02.2022 to the
Panchayat President informing him that the Rural Water
Supply Scheme Works for Changu, Chipsu, Thegu, Yakla, 14
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Sherathang, Kupup, Gnathang and Dzaluk wards under
the Gnathang GPU had been sanctioned and approved by
the Government. The memos required the Panchayat
Sabhapati to call for the tender and award the work to
appropriate class of contractors. The memos drew the
attention of the Panchayat Sabhapati to Notification dated
08.10.2018 (2018 notification) amending the Sikkim Public
Works Manual, 2009 to the effect that only Class-IV
contractors enlisted with the Sikkim Public Works
Department (SPWD) could compete within the territorial
jurisdiction of the concerned ward of the GPU/Urban Local
Bodies (ULB) where the work is to be executed for all
contracts up to Rs.1 crore. The memos further required
that the Panchayat Sabhapati should publish the NIT in
three local dailies. The Panchayat Sabhapati on receipt of
the memos dated 25.02.2022 issued memo dated
02.03.2022 to the Sikkim Herald for publication of the NIT.
This memo dated 02.03.2022 was hand delivered by one
Gyatso Bhutia, brother of the Panchayat Sabhapati and the
father of respondent no.6 one of the successful bidders.
The signature and the phone number of Gyatso Bhutia
endorsed in the memo dated 02.03.2022 also reflects what
the petitioners allege is true. Besides these facts are also
admitted by the State-respondents. The NIT was however, 15
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
published on 08.03.2022 in Sikkim Herald only and it
provided just two days time thereafter, to the prospective
bidders to purchase the tender forms and three days
thereafter, to submit the tender forms. Although the State
Government plead that they had put up the NIT in the BAC
and Gram Parishad Kendra (GPK) on 28.02.2022 there is
no averment that they did so in the wards as required even
by the Implementation Manual. The learned Senior Counsel
for the petitioners submits that the BAC and GPK offices
are away from the concerned wards. The State-respondents
plea that 15 days time was given till the opening of the
tender to perspective bidders from the date they put up the
NIT in the notice board of the GPK office and at the Village
Administrative Centre would be of little relevance as the
NIT was published in the Sikkim Herald only on
08.03.2022. The undated comparative statements in the
letter head of the Village Administrative Centre of the
Gnathang Gram Panchayat Unit signed by the Panchayat
Sabhapati, the Block Development Officer i.e. the
respondent no.4, the Assistant Engineer and the Panchayat
Sachiva of all the eight tenders reflect that only respondent
nos. 6, 7 and 8 participated in all the tenders which were
opened on 14.03.2022. Further it is also seen that the
respondent no.6 who belonged to Kupup ward secured 16
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
three tenders of Changu ward, two tenders for Yakla ward
and one tender for Gnathang ward. Similarly, respondent
nos.7 and 8 who belonged to the Kupup and Dzuluk wards
respectively participated in all other tenders for wards they
did not belong to. It is also seen that the comparative
statements of RWSS at Tsangu / Changu, Chipsu, Yakla,
Sherathang, Gnathang recommended the award of work
in favour of respondent no.6 at par. It is noted that the
respondent nos. 7 and 8 in these tenders had bid certain
percentages above. Similarly, the comparative statement
of RWSS at Dzaluk recommends the award of work to
respondent no.8 at par while the respondent nos. 6 and 7
had bid certain pe above. In the comparative statement of
RWSS at Kupup it is seen that the respondent no.7 who bid
at par was recommended for award of work and the
respondent nos. 6 and 8 had similarly bid certain
percentages above. Thereafter, work orders were issued
by the Assistant Engineer in favour of respondent nos. 6,
7 and 8. The petitioner no. 4 made an application before
the State Public Information Officer (SPIO) on 10.05.2022
seeking certain information regarding the tender process
obtained the same and thereafter, issued legal notice
dated 21.06.2022 to the State - respondents as 17
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
well as the Panchayat Sabhapati. The writ petition was filed
on 05.07.2022.
16. On these facts the respondents pleads that writ
petition should not be allowed as the petitioners
approached the Court belatedly and third party rights have
already been created in favour of respondent nos. 6, 7 and
8.
17. It is settled that the power of the High Court to issue
an appropriate writ under Article 226 of the Constitution is
discretionary and the High Court in the exercise of its
discretion does not ordinarily assist the tardy and the
indolent or the acquiescent and the lethargic. If there is
inordinate delay which is not satisfactorily explained the
High Court may decline to intervene [see Nandalal Jaiswal
(supra)]. In Ramana Dayaram Shetty vs. International Airport
Authority of India13 even though the State action was held to
be unconstitutional as being violating of Article 14 of the
Constitution, the Supreme Court refused to grant relief to
the petitioner on the ground that the writ petition was filed
more than five months after the acceptance of the tender by
which time the successful tender had already incurred
considerable expenditure. The Supreme Court however,
also held that rule of latches of delay is not a rigid rule 13 (1979) 3 SCC 489 18
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
which can be cast in a straight jacket formula, for there
may be cases where despite delay and creation of third
party rights the High Court may still in the exercise of its
discretion interfere and grant relief to the petitioner.
18. In N.G. Projects Limited (supra) the Supreme Court
examined an appeal against an order of the Division Bench
of the High Court whereby the appeal filed by the State
against the order of the Single Bench allowing the writ
petition was dismissed. The issue pertained to the format of
the bank guarantee as prescribed and certain other defects.
The technical evaluation let to the rejection of the bid of 13
out of 15 bidders including the respondent no.1 who filed
the writ petition. The Supreme Court found that the
interference in contract awarded to the appellant was
unwarranted and caused loss to public interest on the
given facts. The Supreme Court noted that the learned
Single Bench and the Division Bench of the High Court
were exercising power of judicial review to find out whether
the decision of the State was manifestly arbitrarily or
unjust as laid down by the Supreme Court in Tata Cellular
vs. Union of India14. The Supreme Court held that since the
construction of road is an infrastructures project the intent
of the legislature under section 41(ha) of the Specific Relief
14 (1994) 6 SCC 651 19
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Act, 1963 should be kept in mind and the project not
stayed. It was on these facts that the Supreme Court held
as above.
19. In Jai Bholenath Construction vs. The Chief Executive
Officer, Zilla Parishad, Nanded15 the Supreme Court
examined an appeal against an order dated 30.03.2022
passed by the High Court of Judicature at Bombay, Bench
at Aurangabad dismissing the writ petition relying upon the
judgment in N. G. Project (supra). A tender had been
published inviting offers for construction of staff quarters of
the primary health centre. Four bidders participated in it
including the appellant and the respondent no.4 therein.
The appellant was found to be the lowest bidder but the
letter of intent was not issued to the appellant. The bid of
the respondent no.4 was subsequently accepted which was
challenged in a writ petition by the appellant. The High
Court dismissed the writ petition relying upon the
judgment in N.G. Project (supra) as stated above. The
Supreme Court held that the High Court had totally
misread the judgment in N. G. Project (supra). The Supreme
Court noted that the respondent no.4 was declared eligible
in flagrant violation of the principles of natural justice and
all fairness in the process of determining the eligibility of
15 Order dated 18.05.2022 Civil Appeal No.4140 of 2022 20
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
the tenderers. The bid of the respondent no.4 was accepted
when at the time of opening of technical bids, the said
respondent was disqualified. It was held that therefore, the
manner in which the bid had been accepted, showed
arbitrary exercise of power. Consequently, the order
dismissing the writ petition passed by the High Court was
set aside and the Zilla Parishad was directed to process the
matter further from the stage prior to issuance of
corrigendum dated 24.11.2021. The facts of the present
case before this Court are even grosser.
20. In Tata Cellular (supra) the Supreme Court held that
the principles laid down in Article 14 of the Constitution
have to be kept in view while accepting or refusing a tender.
Right to choose cannot be considered to be an arbitrary
power. If the said power is exercised for collateral purpose
the exercise of that power will be struck down. The duty of
the Court is to confine itself to the question of legality. Its
concern should be whether a decision making authority
exceeded its power; committed an error of law, committed a
breach of the rules of natural justice, reached a decision
which no tribunal would have reached or, abused its
powers.
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W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
21. In Jagdish Mandal vs. State of Orissa16 the Supreme
Court held that judicial review of administrative action is
intended to prevent arbitrariness, irrationality,
unreasonableness, bias and malafides. Its purpose is to
check whether the choice or decision is made lawfully and
not to check whether choice or decision is sound. When the
power of judicial review is invoked in matters relating to
tenders or award of contracts, certain special features
should be borne in mind. A contract is a commercial
transaction. Evaluating tenders and awarding contracts are
essentially commercial functions. Principles of equity and
natural justice stay at a distance. If the decision relating to
award of contract is bonafide and is in public interest,
courts will not, in exercise of power of judicial review,
interfere even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out. The
power of judicial review will not be permitted to be invoked
to protect private interest at the cost of the public interest,
or to decide contractual disputes. The tenderer or
contractor with a grievance can always seek damages in a
civil court. Attempts by unsuccessful tenderers with
imaginary grievances, wounded pride and business rivalry,
to make mountain out of molehills of some technical, 16 (2007) 14 SCC 517 22
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
procedural violation or some prejudice to self, and
persuade courts to interfere by exercising power of judicial
review should be resisted. Such interferences, either
interim or final, may hold up public works for years, or
delay relief and succour to thousands and millions and
may increase the project cost manifold. 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 malafide or intended to favour someone;
or
(ii) 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';
(iii) whether public interest in affected.
If the answers are in the negative, there should be no interference under Article 226.
22. From the conspectus of the decision of the Supreme
Court it is quite clear that in contractual matters which
involves public interest, like the tenders in issue, writ
courts should normally not interfere unless it is intended to
prevent arbitrariness, irrationality, unreasonableness, bias,
malafides, favouritism and if the decision of the authority 23
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
in question is such that no responsible authority acting
reasonably and in accordance with relevant law could have
reached.
23. Except for a bald assertion in the counter affidavit,
the State-respondents has not placed anything to even
remotely suggest that the Sikkim Public Works Manual,
2009 was not applicable for the tenders in issue. In fact
contemporaneous document i.e. the memos issued by the
concerned Assistant Engineer reflects that the Sikkim
Public Works Manual, 2009 was applicable and he desired
that the Panchayat Sabhapati to follow it. The Sikkim
Public Works Manual, 2009 also makes it applicable to the
eight tenders. The 2018 notification which mandated that
only eligible contractors of the respective wards of the
Gram Panchayat Unit could participate in the tender was
violated and respondent nos. 6, 7 and 8 participated in the
tenders floated for wards they did not belong to as well. The
State-respondents assertion that there is no bar for Class
IV contractors of the same GPU to participate is in the teeth
of the 2018 notification and the directions of the concerned
Assistant Engineer in his memos. The State-respondents
argument that the Panchayat Sabhapati allowed the
tenderers from outside the ward but still from the same
GPU in the interest of the villagers and to expedite the work 24
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
is in ignorance of the mandate of the 2018 notification
which could not have been watered down by the Gram
Sabha. The NIT was neither given wide publicity nor the
process done in an open and transparent manner as
required by clause 11.1 of the Sikkim Public Works
Manual, 2009. According to the State-respondents as well
as the Panchayat Sabhapati the NIT was published only in
Sikkim Herald and displayed in the BAC and GPK. There is
no pleading that the NIT was sent to the Information and
Public Relation Department for its publicity through the
Press and Media as required by clause 11.2 thereof. Clause
11.1 and 11.2 reads as follows:
"11.1 Wide publicity should be given to the Notice Inviting Tenders. Tenders must be invited in the most open and transparent manner possible by advertisement in Sikkim Herald and other National and Local papers, and by notice pasted in public places and duly hosting in the Departmental Website. A copy of the notice should also be sent to the District Collector, Sub-Divisional Magistrate, Block Development Officer and PRIs/Municipality located at the station of the work for wide publicity E-tendering also be resorted to for inviting wider and transparent competitions amongst tenderers.
11.2 Advertisement for Notice Inviting Tenders should be sent to the Information and Public Relations Department for dissemination through the press media. Request for release of advertisement should be sent well in advance and a watch should be kept on publication of the advertisement. Copies of publication of the advertisement should be collected and kept on record as a proof of publicity actually. Full details of the date on which the advertisement actually appeared in the news papers should be indicated while sending cases to the higher officers."
25
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
24. The Implementation Manual also required that the
NIT be given wide publicity. The technical reports for
augmentation of RWSS for the various wards under the
Gnathang GPU filed by the State-respondents reflects that
they could have executed the work either by a process of
tender or by executing it departmentally. As is apparent the
State-respondents chose to follow the tender mode. Having
done so it was incumbent upon the State-respondents as
well as the Panchayat Sabhapati to have followed the
settled principles governing the tender process. Publishing
the NIT only in Sikkim Herald having limited circulation
and that too in such a clandestine manner would definitely
not suffice. The plea of the State-respondents that they
merely followed the note appended to the memos of the
Assistant Engineer which said that it is mandatory to
publish the NIT in Sikkim Herald or any other three daily
newspapers is clearly an escape route as the memo had
directed the Panchayat Sabhapati to publish the NIT in at
least three local dailies which was in line with the Sikkim
Public Works Manual, 2009.
25. The records also reveal that the tender process was
conducted by the Panchayat Sabhapati in a clandestine
manner. The Panchayat Sabhapati quite evidently ensured
that very few learnt about the NIT. The publication of the 26
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
NIT only on 08.03.2022 when he was informed about it on
25.02.2022 itself and giving just two days time to purchase
the tender forms and three days thereafter, to submit the
tenders that too without giving it wide publicity was
definitely a malafide act of the Panchayat Sabhapati to
ensure that only respondent nos. 6, 7 and 8 - the chosen
relatives could bid in all the tenders that were floated. The
comparative statements prepared under the signature of
the Panchayat Sabhapati and others reflect this sordid
truth. The eight comparative statements reflect the
participation of only the respondent nos. 6, 7 and 8. The
eight comparative statements also reflect the concerted
bidding pattern ensuring that each one of them would be
awarded some tender or the other. The relationship
between the Panchayat Sabhapati and the respondent nos.
6, 7 and 8 has been clearly spelt out by the petitioners in
their pleadings. The respondent nos. 6, 7 and 8 have not
denied the relationship. The State-respondents however,
support the participation of respondent nos. 6, 7 and 8 in
the tenders and question why should they not be allowed to
participate in the tender process for their livelihood and
further why should the Panchayat Sabhpati recuse merely
because respondent nos. 6, 7 and 8-his relatives
participated in the tenders. The decision to award the 27
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
tenders to the respondent nos. 6, 7 and 8, as pleaded by
the State-respondents, was taken in the meeting of the
Gnathang Gram Panchayat on 14.03.2022 in which out of
the five signatories, the Panchayat Sabhapati participated
as its President. Section 20 of the Sikkim Panchayat Act,
1993 which came into force on 10.08.1995 and applicable
to the proceedings of the Gram Panchayat would be
relevant.
26. Section 20 (6) and (7) provides:
"6. No member shall vote on, and take part in the discussion on any question coming up for consideration at a meeting of a Gram Panchayat if the question is one in which he has any direct or indirect pecuniary interest other than an interest as a member of public.
7. If it appears to any member present at a meeting that the person presiding at the meeting has any such pecuniary interest in any matter before the meeting for discussion or any question coming up for consideration as referred to in sub-section (6) and a motion brought by him to that effect is carried, such a person shall not preside at such meeting and shall not take part therein, and for the purpose of sub-section (4) such person shall be deemed to be absent during the discussion or consideration of the particular matter."
27. A perusal of section 20 (6) and (7) makes it clear that
the Panchayat Sabhapati could not have participated in the
meeting of the Gram Panchayat since he had either a direct
or definitely an indirect pecuniary interest in the discussion
whether to award the tenders to respondent nos. 6, 7 and 8
or not was to come up. According to the petitioners the
relationship between the Panchayat Sabhapati and 28
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
respondent nos. 6, 7 and 8 was as follows. Respondent no.
6 was the Panchayat Sabhapati's nephew, respondent no.7
was the Panchayat Sabhapati's sister-in-law and
respondent no.8 was his cousin. Gyatso Bhutia who carried
the Panchayat Sabhapati memo dated 02.03.2022 to the
Sikkim Herald for the publication of the NIT was the
Panchayat Sabhapati's brother and the father of
respondent no.6. Gyatso Bhutia was also the person who is
seen in the photograph submitting the tender form filed by
the Panchayat Sabhapati along with the minutes of the
meeting of Gnathang GPU dated 14.03.2022 to show the
tender process. These allegations specifically made by the
petitioners have not been denied by the respondents
making the sordid story absolutely clear. The tender
process conducted in the Gnathang GPU for the eight
tenders was a charade and a sham. In such a gross and
perverse fact situation it would not be correct to hold that
third party rights have been created in favour of respondent
nos. 6, 7 and 8 who procured the tenders illegally and this
Court is powerless to interfere and correct the illegality.
28. Although the State-respondents submit that the
tenders were to be completed within six months it is
noticed that in fact the works are incomplete. 29
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
29. The submissions by the learned counsel for the
respondents that the court is precluded from examining
various legal issues as the petitioners did not plead them
specifically in the writ petition is not correct. Specific facts
required to permit this Court to examine the issues arising
therefrom, both factual and legal, are available in the writ
petition, the documents annexed thereto as well as from
the pleadings and documents filed by the respondents.
30. According to the Panchayat Sabhapati the petitioners
have filed a false and frivolous case to extract money from
the contractors which is a routine practice. It is further
alleged that when the Panchayat Sabhapati was the Vice
President, the work of beautification of Changu and Hangu
Lakes were taken up. At that time the petitioners did not
participate in the tender process but filed a false case and
blackmailed the Panchayat. It is further alleged that the
petitioners had extracted an amount of Rs.15 lakhs from
one contractor Sonam Gyatso Bhutia. The Panchayat
Sabhapati however, has not provided any evidence or
material to support the contentions which have been
specifically denied by the petitioners in their rejoinder. It is
stated by the petitioners that the allegations are fabricated
and false and they reserve their right to take appropriate
action. It is further stated that in the period when the 30
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Panchayat Sabhapati alleges that the petitioners had
extracted the money from Sonam Gyatso Bhutia, the
petitioner no.1 had not even completed his college
education and did not have his contractor enlistment and
therefore, the allegation made is devoid of merit. The
respondent nos. 7 and 8 do not plead that they were
blackmailed by the petitioners. The allegation made by the
Panchayat Sabhapati therefore, is without any material
evidence for this Court to conclude either way. Under the
circumstances the allegation cannot be taken against the
petitioners.
31. The explanation given by the State-respondents as
well as the Panchayat Sabhapati that the contractors of the
concerned ward did not participate in the bidding process
and due to urgency the Gram Panchayat Unit in
consultation among themselves unanimously agreed to
issue the work order in the name of the successful bidders
i.e. respondent nos. 6, 7 and 8 is also patently incorrect.
According to the NIT the last date of submission of tender
was 14.03.2022. However, the submission of the tenders
ought to have been before the preparation of the
comparative statement and thereafter its consideration by
the Gram Sabha. The comparative statements however
reflect the participation of respondent nos. 6, 7 and 8 in all 31
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
the tenders including those for the wards they did not
belong to. The minutes of the meeting held on 14.03.2022
by the Gnathang Gram Panchayat does not also reflect that
the respondent nos. 6, 7 and 8 were allowed to participate
in the tenders of the wards they did not belong to as no one
from those wards participated as alleged. The purported no
objection certificate of the Gnathang GPU produced by the
State-respondents in their counter affidavit state that no
contractors from Changu, Yakla-Sherathang and Gnathang
ward were present till the closing time and therefore, the
Gnathang GPU have no objection in the tender process.
The no objection certificate therefore, also do not contain
any statement which reflects that: firstly, the respondent
nos. 6, 7 and 8 sought to participate in the tenders for the
wards they did not belong to; and secondly, the Gram
Sabha considered their plea and took the decision to allow
them to do so. Quite obviously the no objection certificate is
also an afterthought. Fundamentally the decision of such a
nature ought to be taken by the Government by amending
the Sikkim Public Works Manual, 2009 as amended by
2018 notification and not the Panchayat Sabhapati or for
that matter even the Gram Sabha. The question that begs
the answer is: how did the respondent nos. 6, 7 and 8
know beforehand that no one else would participate and 32
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
that they would be permitted to do so before preparing the
tender documents for submission? Further, when the NIT
did not specify the requirement of the 2018 notification
mandating that only eligible tenderers of the respective
wards could participate what was the need for the
Panchayat Gram Sabha to issue the no objection?
Obviously, the process was predetermined.
32. The learned Counsel for the respondents also resisted
the writ petition on the ground of delay and latches. The
petitioners plead that the entire tender process was
conducted in secrecy to exclude the genuine bidders in
participating in the tenders. The records also reveal the
fact. Although the petitioners do not state as to when
exactly they learnt about the tender process it is quite clear
that the petitioner no.4 learnt about the same when he filed
the application under the Right to Information Act, 2005
before the SPIO, Rural Management and Development
Department on 10.05.2022. The issuance of legal notice
dated 21.06.2022 on behalf of the petitioners also makes it
clear that at least prior to 21.06.2022 the petitioner nos. 2,
3 and 4 were also aware. The writ petition was filed on
05.07.2022. Therefore, if this Court was to take the date of
publication of the NIT on 08.03.2022 as the date of
knowledge of the petitioner also then there would be a 33
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
delay of around four months. The specific assertion that
Sikkim Herald is a weekly edition published only on
Tuesday has not been specifically denied by the State-
respondents. If therefore, this Court considers the date of
knowledge of the petitioners as the date of the RTI
application then it would be only two months. As held by
the Supreme Court in Ramana Dayaram Shetty (supra) this
is a case where despite delay this Court must necessarily
exercise its discretion and interfere. It is a case which
shocks the judicial conscience of this Court. The State is a
welfare State and governed by the rule of law. As held by
the Supreme Court it cannot arrogate itself to a status
beyond what is provided by the Constitution. When the
State seeks to suppress the flagrant violation of all
constitutional norms by the Panchayat Sabhapati by
shielding it on the ground of delay and latches it is the duty
of the writ court to ensure that justice is done in spite of
the delay.
33. In Humanity & Anr. vs. State of West Bengal & Ors.17 the
Supreme Court while examining a case of allotment of land
by the State of West Bengal in favour of an individual
opined that it had been repeatedly held by the Supreme
Court that in the matter of granting largesse, the
17 (2011) 6 SCC 125 34
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
Government has to act fairly and without any semblance of
discrimination. While reiterating the law laid down by the
Supreme Court in Ramana Dayaram Shetty (supra) it held
that the Government, a welfare State, is in a position of
distributing largesse in a large measure and in doing so the
Government cannot act as its pleasure. It held that the
dictum that the Government cannot be permitted to say
that it will give jobs or enter into contracts or issue quotas
or licenses only in favour of those having grey hair or
belonging to a particular political party or professing a
particular religious faith still holds good.
34. Malafide, favouritism, bias, arbitrariness and blatant
disregard to the law of the land is writ large in the actions
of the Panchayat Sabhapati. The effort of the State-
respondents to support such patently illegal acts of the
Panchayat Sabhapati does not behove of a responsible
welfare State. It is unequivocally clear that something has
gone terribly wrong which is of such a nature and degree
that non-interference would result in injustice. This Court
is of the view that therefore, this is a fit case to mould the
relief in the interest of justice.
35. The work orders are dated 29.03.2022. It is quite
evident that certain progress has been made. However, the
respondent no. 6 who was awarded five tenders merely 35
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
state that he has completed 75% to 85% of the work
without specifying which works or giving any further
details. The statement of account relied upon by him
reflects various payments made on the same date to him
totalling to Rs.20,83,171.50/-. This statement of account
also does not clear the position. The respondent no. 7 who
was awarded the tender for Kupup ward states that she
has completed 60% of the work. Similarly, respondent no.8
who was awarded the tender for Dzaluk ward state that he
has completed only 50% of the work. The affidavits filed by
the State-respondents as well as respondent nos. 6, 7 and
8 are wanting. It is felt that certain vital facts have been
purposely kept out from consideration. However, the
respondents claim that civil works are over and what
remains is the laying of the HDPE Pipes. Keeping these
facts in mind it is directed as follows:
(i) The work orders as well as the contracts entered between the State-respondents and the respondent nos. 6, 7 and 8 are quashed.
(ii) The State-respondents shall forthwith take up the remaining work departmentally without any further delay and for that purpose mobilize men, machinery and materials for the remaining work of the eight tenders.
(iii) The works shall be completed as soon as possible since the timeline envisaged is since over and the beneficiary of these 36
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
tenders must get the fruit of the works at the earliest.
(iv) The State-Government shall forthwith constitute a committee of senior officers and experts to oversee the completion of the works and to ensure that the works have been done properly.
(v) The State Government shall investigate the tender process for the eight tenders by a high level committee consisting of Senior Officers of the Government headed by a Vigilance Officer at the level of Director General of Police which shall submit a report to the Chief Secretary within a period of six months from the date of this judgment fixing the responsibility on persons responsible for the illegal acts.
(vi) After doing so the State-Government shall realise the monies expended from those responsible after due process of law.
(vii) The petitioner nos. 1, 2 and 3 shall be at liberty to seek damages for their wrongful exclusion from the tender process before an appropriate forum.
36. This is a fit case in which costs should also be
imposed. The cost is quantified at Rs. 1 lakh jointly payable
by the respondents. The writ petition is allowed and
disposed of with the above directions. The pending
application stands disposed of.
37
W.P. (C) No. 34 of 2022 Mr. Sonam Tsewang Bhutia & Ors. vs. State of Sikkim & Ors.
37. A copy of this judgment shall be forwarded to the
Chief Secretary, Government of Sikkim for compliance and
necessary remedial measures.
( Bhaskar Raj Pradhan )
Judge
Approved for reporting : Yes
Internet : Yes
to/
