Deepani Construction vs State Of Chhattisgarh

Heard Mr. Aman Tamboli, learned counsel for the petitioner. Also heard Mr. Gagan Tiwari, learned Deputy Government Advocate, appearing for respondents No. 1 & 2/State and Mr. Shikhar Shukla, learned counsel, appearing for respondent No. 3.

The present writ petition has been filed by the petitioner with the following prayers:

“10.1 Call for the entire records pertaining to the case of the petitioner from the possession of respondents for its kind perusal of this Hon’ble Court.

10.2 That this Hon’ble Court be pleased to issue writs(s)/order(s)/direction(s) in the nature of certiorari and quash the illegal disqualification of petitioner’s bid communicated to him vide Annexure P-1 and quash the impugned work order Annexure P-2 with all consequences thereof. Any further action taken pursuant to the impugned work order be also quashed in the interest of justice.

10.3 That this Hon’ble Court be graciously pleased to direct the respondents to grant work order to the petitioner or in the alternative this Hon’ble Court be pleased to direct the respondents to reintiate the tender process afresh in accordance with law.

10.4 That the respondents be directed to compensate the petitioner for the mental agony and loss suffered. Cost of litigation be also awarded to the petitioner.

10.5 This Hon’ble Court be further pleased to pass such other order(s) or direction(s), as this Hon’ble Court may deem fit and proper in favour of the petitioner against the respondents including the costs of the petition under the facts and in the circumstance of the case and in the interest of justice.”

Learned counsel for the petitioner submits that the petitioner firm is a proprietary firm involved in the business of construction, Civil and Electrical Contractors and General order supplies. Respondent No. 1 is State and Respondents No. 2 and 3 are instrumentalities of State. Respondent No. 4 is the service integrator of e-procurement system which provides e-marketplace platforms for online tenders, etc. He further submits that the respondent No. 5 is the person to whom the tender has wrongly been given contrary to the procedure established by law. Respondent No. 3 has acted having hand in gloves with the respondent No. 5 and provided illegal support to the respondent No. 5 by ensuring that he gets successful in the tender process which is the subject matter of dispute of the present case.

It is further submitted by the learned counsel for the petitioner that on 11.05.2023, respondent No. 3 issued an E-procurement tender notice inviting online bids for construction work of widening of C.C. Road from B.T.I. Chowk Canal to Kachehri Chowk, Janjgir, District Janjgir-Champa for an estimate amount of Rs. 131.61 lakh. The last time and date of bid preparation as per the e-tender notice was 05.06.2023 at 17.30. He also submits that as per the e-tender notice, bid start date was fixed for 12.05.2023, bid due date was fixed for 05.06.2023, physical submission date was fixed for 07.06.2023 and bid open date was scheduled for 08.06.2023. The 13th term and condition as prescribed in the notice reads as under:

“13. All the contractors are required to Offline submit Envelop – A (by speed post) containing the following-

a. The Earnest Money Deposit EMD by Speed Post Demand Draft/Bankers Cheque OR FDR, TDR on Nationalized Bank as specified in the Tender-documents.

b. ORIGINAL COPY OF Affidavit (SAPATH PTRA) (Non Judicial Stamp in Rs. 100).

B. Tender Form Fees.

C. Self Attested copy of Registration certificates scan copy (Unified Registration System e-Registration PWD Chhattisgarh).

D. Self Attested copy of GST Registration Certificate scan copy.

E. Self Attested copy of PAN Card scan copy.

F. The Earnest Money Deposit (EMD) and Tender Form Fees by Speed Post Demand Draft/Bankers Cheque or FDR, TDR) on Nationalized Bank as specified in the Tender-documents for scan copy.

G. ORIGINAL COPY OF AFFIDAVIT (Shapath Ptra) (Non Judicial Stamp in Rs. 100) Scan Copy.

H. Self Attested copy of Income Tax Return Clearance (Saral Copy) certificate (Last two year)

I. Self Attested copy of Financial Capacity (Minimum 15% of Probable Amount of Contract) in the form of Bank solvency.

J. Self Attested Copy of Engineer Engaged by Contractor.

K. Annexure-13 Affidavit. (Hard and Soft copy).” The 14th term and condition reads as under:

“14. All contractors are required to submit Envelope- A and B Online submission containing the following-

A. Self Attested copy of Registration certificates scan copy. (Unified Registration System e-Registration’ PWD Chhattisgarh)

B. Self Attested copy of GST Registration Certificate scan copy.

C. Self Attested copy of PAN Card scan copy.

D. The Earnest Money Deposit (EMD) and Tender Form Fees by Speed Post Demand Draft/Bankers Cheque OR FDR, TDR) on Nationalized Bank as specified in the Tender-documents for scan copy.

E. ORIGINAL COPY OF Affidavit (SAPATH PTRA) (Non Judicial Stamp in Rs. 100) Scan copy.

F. Self Attested copy of Income Tax Return Clearance (Saral copy) Certificate (Last Two year)

G. Self Attested copy of Financial Capacity (Minimum 15% Probable Amount of Contract) in the form of Bank solvency.

H. Self Attested Copy of Engineer Engaged by Contractor.

I. Annexure-13 Affidavit. (Hard and Soft copy)”

It is further submitted by the learned counsel for the petitioner that the 16th term and condition as specified in the tender notice reads as under:

“16. Envelop containing Earnest money, other required documents of qualified tenderer shall be opened online on the prescribed date and time as per notice inviting tender. After verification of proper and valid earnest money, and other required documents financial offers of such qualified bidders shall be opened online by the Chief Municipal Officer, Municipal Council, Janjgir-Naila, in the presence of the tenderer(s)/representative who choose to attend at that time.”

Learned counsel for the petitioner submits that the petitioner being duly eligible participated in the tender process and submitted his bid online and also sent his documents by offline mode as prescribed in the tender notice. He had submitted all the requisite documents in both online and offline mode. He further submits that acting contrary to its own advertisement and just in order to provide illegal advantage to the respondent No. 5, the respondent No. 3 managed to open the offline envelop on the date other than the date prescribed in the tender notice. The date fixed for opening the bid was scheduled on 08.06.2023, but it was not opened on that day and notice of opening of bid on 09.06.2023 was given to the petitioner on 09.06.2023 at around 11.30 itself on account of which petitioner could not reach the venue.

Learned counsel for the petitioner submits that vide letter dated 13.06.2023 i.e. Annexure P/1 annexed in the writ petition, petitioner was informed that the envelop submitted by him through offline mode was opened on 09.06.2023 and the affidavit as prescribed in the tender notice which has to be in form Annexure-13 as specified in the notice was not found in the envelop, and therefore, the technical and financial bid of the petitioner cannot be opened. He also submits that the petitioner had submitted the affidavit in original in the envelop and just in order to provide illegal gain to the person of its own choice, respondent No. 3 has issued the said letter and debarred the petitioner from the tender process. Upon receiving the said letter, petitioner immediately on 14.06.2023 submitted his complaint to the respondent No. 2 categorically stating that his affidavit has been misappropriated from the envelop as it was opened in his absence and thus, he prayed for enquiry into the matter. Thereafter, the petitioner also submitted a letter on 15.06.2023 to the respondent No. 3 categorically stating for issuing fresh tender. It is also pertinent to mention here that three out of five bidders were disqualified and only two bidders were taken to the financial round which is also in violation to the statutory provisions of the Chhattisgarh Store Purchase Rules, 2002.

It is also submitted by the learned counsel for the petitioner that the petitioner’s candidature and his disqualification from the tender process is illegal, arbitrary and violative of the principles of equality. The Rule 4.3.3 of the Chhattisgarh Store Purchase Rules, 2022 clearly provides that there have to be minimum three eligible bidders at the time of opening of the financial bid and this provision has been violated by the respondents. Even otherwise, the nature of document which is alleged to be missing in envelop of the petitioner is such that respondents ought to have given a chance to the petitioner to rectify the error, if any, in submission of the said document. Once the petitioner had submitted the Earnest money and other documents such as PAN card, Income Tax Returns, etc. mere non submission of an affidavit cannot be considered to fatal. However, in the present case, the petitioner had submitted the affidavit and the ground taken by the respondents for disqualifying the petitioner is false and frivolous. He also contended that petitioner had submitted the affidavit in envelop, but the respondents have deliberately disqualified the petitioner from the tender process just to ensure that the respondent No. 5 is awarded the work order.

On the other hand, learned Deputy Government Advocate submits that the respondent No. 3 has floated the tender on 01.09.2023 for construction of C.C. Road from B.T.I. Chowk Canal to Kachehri Chowk, Janjgir, District Janjgir-Champa, as per prescribed condition, the same has to be completed within two months from the issuance of work order. The envelope-A of the petitioner was opened in which Annexure-13 which is a mandatory condition was not found, therefore, vide order dated 13.06.2023, the petitioner was disqualified. Thereafter, the work order has been issued in favour of the respondent No. 5 on 01.09.2023. He further submits that the petitioner would have challenge the same at the earliest, however, there is a delay on the part of the petitioner challenging the disqualification dated 13.06.2023 as well as 01.09.2023 and there is no explanation of the same in the writ petition, hence, the present petition deserved to dismissed on the ground of delay. Moreover, the contention of the petitioner that prior to opening of the envelope-A no proper notice was given to the petitioner to appear on 09.06.2023 is without any substance as there is no specific condition prescribed in the tender otherwise the same also has been communicated to the petitioner which can be substantiated from Annexure P/12 letter dated 20.07.2023 submitted by the respondent No. 3 to respondent No. 4.

We have heard learned counsel for the parties and perused the materials available on record.

The law as has been well settled by the Apex Court regarding the interference of the High Court in exercise of power under Article 226 of the Constitution of India has been recently reiterated in the case of Tata Motors Limited v The Brihan Mumbai Electric Supply & Transport Undertaking (Best) and Others passed in Civil Appeal No. 3897 of 2023 vide judgment dated 19.05.2023 held as follows :

“48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489).

Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out. The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Association of Registration Plates v. Union of India and Others, reported in (2005) 1 SCC 679.

The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that 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 powers 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 interfere.

As observed by this Court in Jagdish Mandal v. State of Orissa and Others, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.”

Considering the submission made by the learned counsel for the parties, we are of the opinion that the envelope-A of the petitioner was opened in which Annexure-13 which is a mandatory condition was not found, therefore, vide order dated 13.06.2023, the petitioner was disqualified and the work order was issued in favour of the respondent No. 5. However, the petitioner would have challenge the same at the earliest, but there is a delay on the part of the petitioner challenging the disqualification dated 13.06.2023 as well as issuance of work order dated 01.09.2023 and there is no explanation given by the petitioner on the said delay. Moreover, the contention of the petitioner that prior to opening of the envelope-A no proper notice was given to the petitioner to appear on 09.06.2023 is without any substance as there is no specific condition prescribed in the tender notice. Hence, in view of the same and considering the judgment passed by the Apex Court in Tata Motors Ltd. (supra), wherein it has been held that a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out, the Court ordinarily should not interfere in matters relating to tender or contract, we do not find any good ground for interference in the present writ petition.

In view of the above, no interference is called for by this Court in exercise of its extraordinary power under Article 226 of the Constitution of India for the relief claimed by the petitioner.

Accordingly, the present writ petition is dismissed.