Ravi Press Photo vs Archaeological Survey Of India
2022 Latest Caselaw 5045 Tel

     THE HONOURABLE SRI JUSTICE K.LAKSHMAN
               WRIT PETITION No.31427 OF 2022

ORDER:

The writ petition is filed:-

"...........to declare the impugned work order of contract dated 05.07.2022 awarded by 1st respondent in favour of 4th respondent as illegal and consequential direction to the 5th respondent/the Commissioner, Central Vigilance Commission, New Delhi, to launch an inquiry in accordance to its Circular No.04/04/21, dated 06.04.2021 and to take appropriate action....."

2. Heard Sri Prem Kumar Pothina, learned counsel for the

petitioner and Sri T. Suryakaran Reddy, learned Additional Solicitor

General of India, representing Ms. Pallavi, learned counsel

appearing for the respondent Nos.1 to 3 and Sri K.Seetharam,

learned counsel appearing for 4th respondent. Perused the record.

3. 3rd respondent had issued a tender dated 31.05.2021 inviting

customized bids for digitization of official documents/archival

material (Manual copies of inscription taken on paper called

Estampages) preserved in the office of the Director (Epigraphy),

Archaeological Survey of India, Mysore vide Notification F.No.

97/2 (A)/21-22. The petitioner did not participate in the said tender.

Total five (5) bidders were participated in the tender which was

opened on 19.07.2021. On opening of the aforesaid bids, according

to the respondent Nos.1 to 3, it was found that none of the bidders

were qualified on the eligibility criteria leading to a scrapping of the

tender. The Second tender notice was issued on 26.10.2021, wherein

the petitioner herein had also submitted its tender. On the request of

the respondent Nos.1 to 3, the petitioner herein had traveled to

Mysore and delivered a physical demo of the work as required to be

executed under the pre-qualification criteria. The said bid was

opened on 16.11.2021. According to the respondent Nos.1 to 3, the

Tender Evaluation Committee (for short, TEC') observed that only

one of the bidder (and not M/s Ravi Press Photo, Hyderabad,

petitioner herein) had come closest to the expectation, but still was

not technically qualified, and also the solution proposed by it was

not technically ideal, as it would require both handling of the

estampages in a manner that was less than ideal, and would also

require stitching. Therefore, the second tender was also cancelled

on 15.06.2022. Thereafter, the respondents have allotted the said

work to 4th respondent on nomination basis vide work order dated

05.07.2022. Challenging the said work order, the petitioner herein

filed the present writ petition.

4. Learned counsel for the petitioner would submit that it is

mandatory on the part of 1st respondent to evaluate the process of

procurement of goods and services by the Central Government

Ministries through GeM Website (Government e-Market Place)

only. It is an online platform hosted by Directorate General of

Supplies and Disposals under Ministry of Commerce and Industry

(for short, 'DGS&DMCI). The main object of GeM is for

centralized procurement of both produce and services for all the

departments and agencies of the Central Government Ministries. It

eliminates the barriers to bona fide suppliers who wish to do

business with the Government at competitive prices. The petitioner

is also registered on GeM Website and he is an accomplished

Photographer. He holds Diploma in Photography with decades of

experience. Though the petitioner has qualified and he is having

required eligibility criteria, respondent Nos.1 to 3 have cancelled the

second tender notice dated 26.10.2021 after lapse of almost eight

months only to favour 4th respondent. The act of respondents is

unfair and non-transparent contrary to guidelines issued by Central

Vigilance Committee vide the Circular No.04/04/2021 dated

06.04.2021.

5. As per the said circular issued by the Central Vigilance

Commission, award of contract through open competitive bid should

remain the most preferred mode of tendering. Therefore, work order

dated 05.07.2022 is in violation of Clause-5 of said circular. He has

also relied on the principle laid down by the Hon'ble Apex Court in

Ramana Dayaram Shetty Vs.International Airports Authority of

India1, and Tata Cellular Vs. Union of India2 .

6. Whereas, respondent Nos.1 to 3 have filed counter

contending that in both two tenders dated 31.05.2021 and

26.10.2021 the TEC observed that all the tenders submitted by the

tenderers are technically not qualified. Therefore, they have

cancelled the tenders. The Petitioner herein did not participate in the

first tender dated 31.05.2021. Therefore, under the said

circumstances, where a technologically superior solution was being

offered, which secured the safety of the estampages, it was decided

to engage PIQL on a nomination basis in accordance with Rule

194(iv) of the General Financial Rules, 2017 (for short, 'the GF

Rules'). The reasons for adoption of this single nomination process

was explained by the respondents in a tabular form in paragraph

No.17 of counter affidavit of the respondents and the same is

extracted below:-

AWA Technical solution Photography solution

Non-Invasive (through 3D Non-Invasive (using long-shot Scanning combined with Photography) Photogrammetry)

As it is Cloud Point data, the Quality hovering around 300-

quality would be higher than 400 dpi 500 dpi

No stitching needed Stitching would be needed

(1979) 3 SCC 489

(1994) 6 SCC 651

Various formats like PDF, TIFF, JPG, JPEG JPG, JPEG possible; even a 3D

500-600 estampages per day 80- Each estampage has to be 90 in one scan cycle of 30 min);photographed singly, and post-processing will involve camera to be set up according only segregating variousto the size of estampages. Not estampages, and no stitching more than 100 estampages skills needed. each day, plus stitching time in each.

Fragile estampages can be Light issues to set the camera, scanned using handheld scanner, and the estampages may be being just spread on the floor needed to be put up on a canvas.

7. Based on the above considerations where 4th respondent was

offering a technologically superior solution, and given that none of

the bidders, including the petitioner, fulfilled the prescribed

qualifications, a work order was issued to 4th respondent on

05.07.2022. Therefore, according to them, there is no irregularity or

illegality committed by them in awarding work to 4th respondent, on

nomination basis.

8. It is relevant to note that despite granting ample opportunity,

4th respondent has not filed counter. However, Sri K.Seetharam,

learned counsel appearing for 4th respondent made his submissions.

9. The above stated facts would reveal that the respondent

Nos.1 to 3 have issued two tender Notifications i.e. on 31.05.2021

and 26.10.2021. According to them on evaluation of the said tenders

by the TEC, none of the tenderers were technically qualified and

therefore, the same were cancelled. They have allotted work to 4th

respondent by invoking its power under Rule 194(iv) of the GF

Rules, 2017,by way of nomination.

10. Circular No.4/4/2021, dated 06.04.2021 issued by the

Central Vigilance Commission deals with transparency in works/

purchase/consultancy contracts awarded on nomination basis and in

the said circular, Central Vigilance Commission has given certain

guidelines, reiterated earlier guidelines and the same are mentioned

below:-

i) All works/purchase/consultancy contracts awarded on nomination basis should be brought to the notice of following authorities for information:

                 a.   the Secretary,       in   case   of   the   ministries/
                      departments;

b. The Board of Directors or equivalent managing body, in case of Public Sector Undertakings, Public Sector Banks, Insurance Companies, etc;

c. The Chief Executive of the organization where such a managing body is not in existence

ii) The report relating to such awards on nomination basis shall be submitted to the Secretary/Board/Chief Executive/equivalent managing body, every quarter,

iii) The audit committee or similar unit in the organization may be required to check at least 10% of such cases.

11. The details of all tenders, awarded on nomination basis,

shall be posted on website of the organization concerned, in public

domain, along with brief reasons for doing so. The Central Vigilance

Commission has categorically stated in the aforesaid circular that the

above guidelines may be noted for strict compliance. The

Commission has issued aforesaid guidelines as part of its drive to

ensure transparency, to promote healthy competition and to provide

fair and equitable treatment to all interested parties in matters of

public procurement and has issued guidelines from time to time

emphasizing on the need to adopt tendering process as a basic

requirement, before award of contract to any party.

12. It is also relevant to discuss Clause-194 (iv) of the GF

Rules, 2017 which is extracted below:-

Rule 194- Single Source Selection/Consultancy by nomination. The selection by direct negotiation/nomination, on the lines of Single Tender mode of procurement of goods, is considered appropriate only under exceptional circumstance such as:

(i) tasks that represent a natural continuation of previous work carried out by the firm;

(ii) in case of an emergency situation, situations arising after natural disasters, situations where timely completion of the assignment is of utmost importance; and

(iii) situations where execution of the assignment may involve use of proprietary techniques or only one consultant has requisite expertise.

(iv) Under some special circumstances, it may become necessary to select a particular consultant where adequate justification is available for such single-source selection in the context of the overall interest of the Ministry or Department. Full justification for single source selection should be recorded in the file and approval of the competent authority obtained before resorting to such single-source selection.

(v) It shall ensure fairness and equity, and shall have a procedure in place to ensure that the prices are reasonable and consistent with market rates for tasks of a similar nature; and the required consultancy services are not split into smaller sized procurement.

13. According to respondent Nos.1 to 3, they have awarded the

subject work to 4th respondent by invoking its power under Rule 194

(iv) of the GF Rules, 2017. Thus, as per the said Rule, there should

be some special circumstances and full justification for Single

Source Selection and the same should be recorded in the file and

approval of the competent authority obtained before resorting to

such single source selection. They shall ensure fairness and equity

and shall have a procedure contemplating to ensure that the prices

are reasonable consisting with market rates etc.

14. It is the specific case of the petitioner herein that the name

of 4th respondent was struck off by the Ministry of Corporate Affairs

for violation of the provisions of the Companies Act.

15. According to the company master data available in the

website, contribution of 4th respondent was one lakh and thus, paid

up capital of 4th respondent is only one lakh. Learned counsel for the

petitioner had also filed a copy of the said Company master-data

and field search report of GMR Associates, Company Secretaries, in

proof of the same. He has also filed Directors' report of 4th

respondent Company which shows that 4th respondent company is

having unsecured loans of 4644225 and total indebtedness is

4644225. Referring to Extract to Annual Return as on financial year

ended on 31.03.2020, learned counsel for the petitioner would

submit that the data preservation, microfilming services and

percentage of turnover of 4th respondent company is 100%. Its

annual turn over for last four financial years is nil. Referring to the

same, learned counsel for the petitioner would submit 4th

respondent is a strike off company and even then, without

considering the said facts, respondent Nos.1 to 3 have awarded said

work to 4th respondent vide impugned work order dated 05.07.2022

on nomination contrary to the guidelines issued by Central

Vigilance Commission, vide Circular dated 06.04.2021.

16. As stated supra, though the petitioner herein filed the

aforesaid documents along with the memo vide USR No.77812 of

2022, dated 02.09.2022, neither respondent Nos.1 to 3 nor 4th

respondent filed any reply/rejoinder of denying the same.

17. Respondent Nos.1 to 3 have filed entire Note File related to

work order being issued to 4th respondent along with counter.

Perusal of the said Note File would reveal that the respondent Nos.1

to 3 have not mentioned any special circumstances that necessitated

them to select 4th respondent, a single source of selection. There is

no mention about full justification reasons for single source of

selection. There is no approval of the competent authority obtained

before resorting to single source of selection. Even, the counter filed

by the respondent Nos.1 to 3 is silent with regard to the same.

However, in the counter, they have stated that the award of work on

the nomination basis is well within the Rules, and there is no

unlawful exercise of power. As per GF Rules, 2017 and TEC

guidelines and measure of transparency, decision taken to award

work on single nomination basis is available on website in public

domain. The respondents are also trying to justify their action by

citing the judgment in W.P.(MD) No.17399 of 2020 dated

19.08.2021 of Madras High Court, Madurai Bench,

18. According to respondent Nos.1 to 3, the petitioner was

found to be not qualified to be awarded the work of digital

preservation of national heritage i.e. the estampages of epigraphs,

cannot be something that should be given to unqualified persons,

and is a fit case for exercise of grant of work on nomination basis.

The qualifications of 4th respondent were exempted and as a matter

of fact, their work was seen. The technological capacity of the 4th

respondent was found too far superior to anything that the two

tenders had thrown up, and the pilot project by 4th respondent,

clearly demonstrated that the estampages would not be endangered

in any manner by the processes adopted by 4th respondent. The sole

motive of placing work order on 4th respondent was the proper

preservation of estampages which are national heritage.

19. As discussed supra, as per the aforesaid circular

No.04/04/21, dated 06.04.2021, respondent Nos.1 to 3 have to

follow the guidelines issued by the Central Vigilance Commission.

As per Rule 194(iv) of GF Rules, 2017, the respondent Nos.1 to 3

have to award work on single source selection under special

circumstances by giving reasons for full justification for that and the

same has to be recorded in full and obtaining approval approval of

competent authority before resorting to such single source selection,

is must.

20. As discussed supra, the respondent Nos.1 to 3, though

issued two tenders viz: tender notification dated 31.05.2021 and

26.10.2021, they have cancelled both the tenders.

21. In the first tender, minimum average annual turnover for

the last three financial years i.e. pre-qualification criteria to be

fulfilled by the interested bidders was shown as Rs.1.00 Crore with

estimated value of work Rs.3.75 Crores. In the second tender

estimates for revised and the value of work was shown as Rs.1.5

Crores with pre-qualification criteria at Rs.4.5 Lakhs.

22. A perusal of work order dated 05.07.2022 would reveal that

the same has been awarded at a cost of Rs.5.6 Crores, whereas, the

estimated cost was Rs.3.75 Crores in first tender which was further

revised to Rs.1.5 Crores in second tender. Thus, there was cost

escalation of 200 - 250%.

23. 4th respondent is a strike off company. Its annual turnover

for last four financial years was nil. The said company is not eligible

to award the said work. Thus, there is lack of transparency and

fairness in awarding work in favour of 4th respondent on nomination

basis. There are no special and justifiable circumstances in awarding

the work in favour of 4th respondent. Therefore, awarding of the

subject contract in favour of 4th respondent vide work order dated

05.07.2022 on nomination basis is arbitrary, illegal, unfair, non-

transparent and in violation of guidelines issued by the Central

Vigilance Commission, vide Circular No.04/04/2021, dated

06.04.2021.

24. It is trite to note that second tender was issued on

26.10.2021 and last date for submission of tenders was 08.11.2021.

On the request of the respondent Nos.1 to 3, the petitioner has also

traveled to Mysore to give demonstration which is a pre-requisite as

per the tender notification dated 26.10.2021. The said tenders were

opened on 16.11.2021. According to the respondent Nos.1 to 3, the

TEC on evaluating the tenders submitted by the above bidders,

found that none of them were qualified technologically. Therefore,

they have cancelled the said tenders on 15.06.2022. Thus,

respondent Nos.1 to 3 have taken seven months to cancel the second

tender i.e. 16.11.2022, the date on which second tender was opened

and on 15.06.2022, the date on which the tender was cancelled.

Thus, there is lack of transparency in awarding the said work to 4th

respondent by the respondent Nos.1 to 3 vide impugned work order

of contract dated 05.07.2022.

25. In this regard, it is trite to note that the Hon'ble Apex

Court in Ramana Dayaram Shetty (supra), held that a nominee

who has no real interest in the subject matter could not be given any

relief.

26. It is trite to discuss the relevant principles dealing with the

exercise of jurisdiction in tender matters under Article 226 of the

Constitution of India.

27. The Hon'ble Apex Court In Tata Cellular v. Union of

India3 held as follows:-

69. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated, the following are the requisites of a valid tender :

1. It must be unconditional.

2. Must be made at the proper place.

3. Must conform to the terms of obligation.

4. Must be made at the proper time.

5. Must be made in the proper form.

6. The person by whom the tender is made must be able and willing to perform his obligations.

7. There must be reasonable opportunity for inspection.

8. Tender must be made to the proper person.

(1994) 6 SCC 651.

9. It must be of full amount.

77. The duty of the court is to confine itself to the question of legality. Its concern should be :

1. Whether a decision-making authority exceeded its powers?

2. Committed an error of law,

3. committed a breach of the rules of natural justice,

4. reached a decision which no reasonable tribunal would have reached or,

5. abused its powers.

Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:

(i) Illegality: This means the decision- maker must understand correctly the law that regulates his decision-making power and must give effect to it.

(ii) Irrationality, namely, Wednesday unreasonableness.

(iii) Procedural impropriety.

The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind28, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".

Similar view was taken by the Hon'ble Apex Court in Uflex Ltd. v.

Govt. of T.N.4.

28. The Apex Court in National High Speed Rail

Corporation Vs. Montecarlo Limited5 held that the High Court

while exercising judicial review under Article 226 of the

Constitution of India has to consider:-

2021 SCC OnLine SC 738.

2022 6 SCC 401

i) whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or

ii) whether the process adopted or decision made is arbitrary and irrational that the court can say that the decision is such that no responsible authority acting reasonably and in accordance with relevant law would have reached; and

iii) whether the public interest is affected,

If answer is yes, the Court can interfere, if the answer is no, the Court

cannot interfere.

29. As discussed supra, the respondents though issued two

tenders, cancelled the same on the ground that none of the tenderers

have qualified technologically. At the cost of repetition, as

discussed surpa, second tender opened on 16.11.2021 was cancelled

on 15.06.2022 i.e. after lapse of almost seven months. Therefore,

there is no transparency and fairness at all in awarding work to 4th

respondent. Therefore, awarding work to 4th respondent vide work

order of contract dated 05.07.2022 is in violation of circular No.

04/04/21, dated 06.04.2021 and also Rule 194(iv) of the GF Rules,

2017. The same is also contrary to the principle laid down by the

Hon'ble Apex Court in the aforesaid three judgments.

30. Viewed from any angle, the impugned work order of

contract dated 05.07.2022 awarded by 1st respondent in favour of 4th

respondent is illegal and in violation of the Circular No.04/04/21,

dated 06.04.2021 issued by the Commissioner, Central Vigilance

Commission, New Delhi and Rule 194(iv) of the GF Rules, 2017

and in violation of the principles laid down by the Hon'ble Apex

Court in the aforesaid judgments and the same is liable to be

dismissed.

31. In view of the above discussion, the writ petition is

allowed. The impugned work order of contract dated 05.07.2022

awarded by 1st respondent in favour of 4th respondent is set aside.

However, liberty is granted to the respondents to issue fresh tender

and award work to the successful tenderers.

Consequently, miscellaneous Petitions, if any, pending, shall also stand closed.

_________________ K. LAKSHMAN, J Date: 12 .10.2022

Note:

Registry is directed to mark a copy of this order to respondent No.5 i.e. The Commissioner, Central Vigilance Commission, Satark Bhawan, G.P.O. Complex, Block-A, INA, New Delhi 110023, for perusal and taking necessary action in the matter.

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