Amit Kumar Seth vs State Of Himachal Pradesh And Others

Satyen Vaidya, J

By way of instant petition, the petitioner has prayed for following substantive reliefs:-

"i) That the rejection of Financial Bid of the petitioner, Annexure P-8, may kindly be quashed and set aside and Financial bid of the respondent No.4 be ordered to be rejected and further Respondents No. 1 to 3 be directed to declare the financial bid of the petitioner as responsive and complete the tender process and award the work to the petitioner."

The case of the petitioner is that respondent No.3 had issued notice inviting tender (for short 'NIT') on 31st July, 2021 for the work namely, "Construction of link road to village Jasrath Km 0/0 to 2/0 including 85.00 mtr. span steel truss bridge over Chandra Bhaga river including approaches at RD 1/740 (SH:-Retaining Wall, Breast Wall, Cross Drainage, M/T and Const. of Sub Structure, Super Structure including both side approaches) under NABARD RIDF-XXVI)" with estimated cost of Rs.10,63,19,913/-. As per petitioner, after completion of tendering evaluation process, the summary of evaluation of financial bid was uploaded by the official respondents on 18.08.2021. The tendering process was cancelled vide corrigendum dated 29.07.2021 citing technical/administrative reasons. It has been alleged that the corrigendum cancelling the tender process was issued in back date due to malafide reasons.

Further case of the petitioner is that the official respondents re-invited bids for the same work vide publication dated 26.08.2021. The financial evaluation of the bid was done on 15.09.2021. The petitioner remained L-2 and respondent No.4 was declared L-1. Challenge has been made to declaration of respondent No.4 as L-1 on the ground that the bid submitted by private respondent was beyond the limit of (+) 5% to (-) 10% which was the requirement of the CPWD Works Manual made applicable to the official respondents vide correspondence dated 22.07.2020 (Annexure P-5).

The official respondents in their reply have specifically controverted the allegation of having acted with malafide. It has been stated that the tender of the above noticed work was floated for the first time on 13.07.2021 and the last date for submission of bids was 26.07.2021. Technical bids were opened on 27.07.2021. Total four contractors including petitioner and respondent No.4 had participated in the bid. During the technical evaluation it was noticed that though all the four contractors were found responsive/qualified, but none of them had submitted their financial turnover and for this reason, financial bid was not opened and tender was cancelled vide corrigendum dated 29.07.2021. The tender was re-invited on 31.07.2021. Technical and financial bids were opened on 13.08.2021 and 18.08.2021 respectively. Petitioner was found to be L-1 with rates 13.71% below the estimated cost.

The tender was again cancelled on the ground being in violation of the Government letter No. PBW(B)A(3)1/2020 dated 22.07.2020. It is asserted that the CPWD Works Manual, 2019 has been adopted by the HP PWD vide Notification dated 22.07.2020. The bid price quotation of L-1 was not within the prescribed limit of (+) 5% to (-) 10%, as per instruction No. 12 of CPPWD works manual, warranting the cancellation of the tender process. This necessitated the floating of tender for the 3rd time.

Respondents No. 1 to 3 have further contended that all the bidders were aware about the applicability of Clause No. 12 of the CPWD Works Manual, 2019 as one of the conditions of the NIT, therefore, the tender process on 2nd call was rightly cancelled. While meeting challenge of the petitioner to acceptance of respondent No.4 as L-1, it has been stated on behalf of respondents No. 1 to 3 that the condition No. 12 of the CPWD Works Manual of strict adherence of (+) 5% to (-) 10% of the estimated cost would apply only in case of 1st call and thereafter procedure of negotiation was applicable.

Respondent No.4 has separately contested the claim of petitioner by alleging that petitioner has intentionally mis-stated the facts and thus is not entitled to any relief. It is averred that the petitioner did not assail or challenge the earlier two processes after having participated therein. The 3rd time tender process was initiated on 26.08.2021 with last date of submission of bids as 7. 09.2021. Technical bids were opened on 10.09.2021. Out of total three bidders, only two bidders, i.e. the petitioner and respondent No.4, were found responsive. Financial bid was opened on 15.09.2021 and respondent No.4 was found to be L-1. The petitioner is stated to be estopped from filing the present petition as he, after participating in all the three processes, had condoned 1st and 2nd and had challenged the 3rd one. It has also been asserted by respondent No.4 that since the petitioner had failed to challenge earlier cancellation of the tender process, he could not challenge the declaration of respondent No.4 as L- 1 on the ground of being in violation of Clause 12 of the CPWD Works Manual.

We have heard learned counsel for the parties and have also gone through the record of the case.

The entire controversy involved in the instant petition revolves around the issue as to applicability of Clause No.12 of CPWD Works Manual, 2019 to the facts and circumstances of the case. Whereas, the petitioner has asserted applicability of said clause with all force, on the other the respondents have taken a stand that the said clause will have no applicability as firstly it applies only in the first call and where the tender process enters the 2nd or any subsequent call It does not apply and secondly, as per respondents, the claim of the petitioner was liable to be rejected in view of the judgment passed by this Court in CWP No. 4954 of 2021 along-with connected matters, titled as Nakul Chauhan vs. State of H.P and others, decided on 15.09.2021.

The Principal Secretary (PW) to the Government of Himachal Pradesh vide communication dated 22.07.2020 addressed to the Engineer-in-Chief, HP PWD, Nigam Vihar, Shimla-2 conveyed the approval of the Cabinet regarding adoption of CPWD Works Manual to the Public Works Department. The salient features of such adoption were detailed at Annexure 'A' to the above noticed correspondence. Clause 12 as detailed therein read as under:-

"12. Tenders will also be invited on the basis of working estimates approved on market rates and shall be awarded without negotiation if the tendered amount is within limit of (+) 5% to (-) 10%(MORTH letter No.RW/NH-15017/12/2015-P&M dated 9th July, 2018), otherwise the tenders will be recalled and negotiation shall be governed as per CPWD Manual or CVC guidelines. The negotiations procedure shall be as per Para 5.1.8(2) and SOP No.5/4 which are limited only in specific situation as mentioned in paras."

Coming to the facts of the present case, it is noticeable that respondents No. 1 to 3 invited bids for the first time on 13.07.2021. The technical bids were opened on 27.07.2021. All the bids were found technically responsive, but vide corrigendum dated 29. 07.2021, the entire process was cancelled citing technical/administrative reasons. Respondents No. 1 to 3 in their reply have stated that none of the bidders had submitted their financial turnover and hence the tender was cancelled without opening the financial bids. The bids were invited 2nd time on 31. 07.2021. Technical bids were opened on 18.08.2021. Total three bidders including petitioner and respondent No.4 were found technically responsive. Financial bids were opened on 18.08.2021 and the bid of petitioner was found to be L-1. The tender process even on the 2nd call was also cancelled on 25.08.2021 on the ground "financial bid opened on 18.08.2021 is hereby cancelled due to the administrative reasons and as per letter No. PBW(B)A(3)1/2020 dated 22.07.2020". Respondents No. 1 to 3 in their reply have further clarified that the tender process on 2nd call was cancelled as the amount of bid quoted by the petitioner as L-1 was beyond (+) 5% to (-) 10% of the estimated cost as envisaged by Clause 12 of the CPWD Works Manual, 2019. The tender process was thereafter initiated for the 3rd time as noticed hereinabove, wherein respondent No.4 was declared L-1. Though, amount of his bid was also beyond (- ) 10% of the estimated cost. We have been informed during the course of hearing that finally the bid of respondent No.4 has been accepted and the work has been awarded to him on the rates quoted by him.

It is not in dispute that the Himachal Pradesh Public Works Department has adopted CPWD Works Manual, 2019 vide communication dated 22.07.2020. There is no challenge also to the legality of the above-said adoption or any provision of CPWD Works Manual, 2019 much less Clause 12 thereof. This being so, it becomes imperative for this Court to rule as to whether Clause 12 of the CPWD Works Manual, 2019 will be applicable to the facts of the instant case?

In CWP No. 4954 of 2021 and connected matters, this Court had held that in absence of bidders having been put to prior notice regarding applicability of CPWD Works Manual, 2019, the bids subsequently could not be evaluated by applying the said manual. In that case, there was nothing on record to suggest that bidders at any stage were made aware about the applicability of the CPWD Works Manual to the relevant tendering process. Nevertheless, the tendering process was recalled and cancelled on the ground that the bids were not confirming to the requirement of Clause 12 of the CPWD Works Manual.

In the instant case, however, the facts as emerged from the records are distinguishable. While canceling the tender process on 2nd call, the official respondents had specifically mentioned the reason for such cancellation as administrative and as per letter No. PBW(B)A(3)1/2020 dated 22.07.2020. Meaning thereby, the bid of the tenderer which was evaluated as L-1 was beyond (-) 10% of the estimated cost. Incidentally, at that juncture, the petitioner was L-1. Respondent No.4 was also a participant and as such became aware at least before initiation of tender process 3rd time, regarding applicability of Clause 12 of the CPWD Works Manual, 2019 in the tender process under way. Once the tender process on 2nd call was cancelled being in violation of Clause 12 of the CPWD Works Manual, the recalling of the bids for the 3rd time in continuation could not, by any stretch of imagination, be construed to have waived such condition.

Once, it is the case of the official respondents that Clause 12 of the CPWD Works Manual was applicable in the instant case and all the bidders were aware of such applicability, they cannot turn around and award the work in favour of respondent No.4 whose bid admittedly was in violation of said Clause No.12. The action of respondent's No. 1 to 3 is clearly arbitrary and irrational which smears of bias. In case petitioner being L-1 was not awarded work on 2nd call, on the ground of violation of Clause 12 noticed above, the work could not be awarded to respondent No.4 during the 3rd call as the bid submitted by him also suffered from same vice.

The contention of the respondents that condition of bid being within (+) 5% to (-) 10% of the estimated cost would apply only when the tender was on 1st call, deserves to be out rightly rejected for the reasons that the official respondents had not applied this so called principle when petitioner was L-1 during the 2nd call and also the proposition being put forward by respondents is absurd and unacceptable being illogical. The purposive interpretation of Clause 12 would be that mode of prescribed negotiation would be applicable where all the bids are beyond (+) 5% to (-) 10% of the estimated cost even during 2nd or subsequent calls. In case some of the bid(s), which are technically responsive, are within the prescribed limit of (+) 5% to (-) 10% of the estimated cost, there cannot be any question of negotiation with the bidders who have submitted his bid beyond the prescribed limit of (+) 5% to (-) 10% of the estimated cost, because that will definitely amount to granting a premium to a violator over the bidder who has restricted himself strictly within the prescribed limit. In any case, in the present case, no negotiation has been done with respondent No.4, who has been awarded work on the bid price quoted by him even though it was beyond the limit of (+) 5% to (-) 10% of the estimated cost.

The objection of the respondents that the petitioner had not challenged the cancellation in the 1st and 2nd instance, hence was estopped from challenging the same 3 rd time especially when he had participated in all the three processes, also deserves rejection. The petitioner was denied the benefit of award of work during the 2nd call on the ground that it was in violation of Clause 12 of the CPWD Works Manual. The conduct of the petitioner in not challenging such action of the official respondents proves that he was aware and had also accepted the applicability of the said Clause 12 to the tender process in question. Thus, he has every right to challenge the award of work in favour of respondent No.4 being in violation of the applicable terms of the tender process. In fact, the estoppel, if any, is applicable against the respondents from changing their stand from time to time.

It is trite that Constitutional Courts can always exercise jurisdiction on all the matters including the matters arising from the Government contracts in case the transactions suffer from arbitrariness, irrationality, malafides or bias, though, they have to be conscious of the fact that in such cases, they have to exercise a lot of restraints while exercising their powers of judicial review. We are of considered view that the impugned action of official respondents in instant case clearly is arbitrary and unreasonable and hence cannot be sustained.

In view of the above discussion, the petition is allowed. declaration of respondent No. 4 as L-1 vide tender summary report (Annexure P-8) is held to be illegal, null and void being in violation of Clause 12 of the CPWD Works Manual, 2019. Consequently, the award of work of "Construction of link road to village Jasrath Km 0/0 to 2/0 including 85.00 mtr span steel truss bridge over Chandra Bahaga river including approaches at RD 1/740 (SH:-Retaining Wall, Breast Wall, Cross Drainage, M/T and Const. of Sub Structure, Super Structure including both side approaches) under NABARD RIDF-XXVI)" in favour of respondent No.4 ordered during the pendency of the writ petition is also quashed and set aside. Respondents No. 1 to 3 are directed to re-assess the financial bid of petitioner and to take a decision strictly in terms of applicable Rules. Pending application(s), if any, also stand disposed of.