M/S Achal Associates vs State Of Madhya Pradesh & Others

The petitioner before this Court has filed this present petition being aggrieved by the order dated 17.09.2019 passed by the Chief Municipal Officer,

Municipal Council, Shajapur, by which, a decision has been taken to cancel the NIT issued by respondent No.3 / Municipal Council.

The petitioner has stated before this Court that a Notice Inviting Tender (NIT) was issued on 18.07.2019 and the petitioner along with four other

bidders participated in the tender process. The technical evaluation of the tender was done on 20.08.2019, however, before opening of the financial

bid, a decision has been taken to cancel the NIT. The petitioner contention is that the whole tender process has been recalled after opening the

technical bid as one Company i.e. Karada Construction Company was found ineligible in the technical evaluation and in order to favour Karada

Construction Company, the impugned order has been passed.

The petitioner has further stated that no cogent reasons have been assigned for cancelling the entire tender process and the reasons assigned are

vague and frivolous reasons. It has been stated that Tender Evaluation Committee is under an obligation to open the financial bids, and therefore, the

impugned order dated 17.09.2019 deserves to be quashed.

A reply has been filed on behalf of respondent No.3 and it has been stated that the NIT was issued on 18.07.2019, four bidders responded to the NIT

and technical evaluation was done and after carrying out the technical evaluation vide letter dated 24.08.2019, the Executive Engineer, Urban

Administration & Development was informed.

The respondent No.2 has brought out certain discrepancies and error in the tender document relating to Employee State Insurance Corporation,

Employee Provident Fund Certificate Requirement, payment of GST, etc. etc. and keeping in view the discrepancies in the tender by invoking Clause

â€" 19.1, the tender process has been scrapped. A fresh NIT has also been issued in the matter by the respondents.

This Court has heard learned counsel parties at length and perused the record.

Undisputedly, the NIT was issued on 18.07.2019 and the petitioner as well as other persons have participated in the tender process. The petitioner's

grievance is that one Karada Construction Company is being favoured because it was found technically ineligible to participate in the tender process

and in order to favour Karada Construction Company, the entire NIT has been scrapped. The petitioner has not impleaded Karada Construction

Company as one of the respondents. It is not a case, where a tender has been cancelled after the financial bids have been opened. Reasons have

been recorded for cancelling the NIT.

Clause â€" 19.5 of the NIT reads as under:-

“The Employer reserves the right to accept or reject any bid, and to annul the bidding process and reject all the bids at any time prior to contract award, without

incurring any liability, in all such cases reasons shall be recorded.â€​

In the considered opinion of this Court, as there were large number of discrepancies in the NIT, the respondents were justified in invoking Clause â€

19.5.

The Hon'ble Apex Court in the case of Caretel Infotech Limited v/s Hindustan Petroleum Corporation Limited & Others reported in AIR 2019 SC

3327 in paragraph â€" 36 has held as under:-

We consider it appropriate to make certain observations in the context of the nature of dispute which is before us. Normally parties would be governed by their

contracts and the tender terms, and really no writ would be maintainable under Article 226 of the Constitution of India. In view of Government and Public Sector

Enterprises venturing into economic activities, this Court found it appropriate to build in certain checks and balances of fairness in procedure. It is this approach

which has given rise to scrutiny of tenders in writ proceedings under Article 226 of the Constitution of India. It, however, appears that the window has been opened

too wide as almost every small or big tender is now sought to be challenged in writ proceedings almost as a matter of routine. This in turn, affects the efficacy of

commercial activities of the public sectors,which may be in competition with the private sector. This could hardly have been the objective in mind. An unnecessary,

close scrutiny of minute details, contrary to the view of the tendering authority, makes awarding of contracts by Government and Public Sectors a cumbersome

exercise, with long drawn out litigation at the threshold. The private sector is competing often in the same field. Promptness and efficiency levels in private contracts,

thus, often tend to make the tenders of the public sector a non-competitive exercise. This works to a great disadvantage to the Government and the Public Sector.

In light of the aforesaid case, the Hon'ble Supreme Court has dealt with the issue of interference in tender matters The Division Bench of this Court in

the case of M/s Kalyan Toll Infrastructure Limited v/s U.P. State Construction & Others (W.P.21872/2019) decided on 18.10.2019 has held as

under:-

“Though it is contended on behalf of the petitioner that the cancellation of the bid is deliberate, illegal, arbitrary, unreasonable, perverse, cryptic, non-speaking,

unfair, contrary to petitioner’s legitimate expectation, belated and suspicious, the action is fraught with fraud against public interest, contrary to principle of

natural justice. However, taking into consideration the nature of discrepancy in the NIT as being noticed by the employer which may in future be the cause of

dispute, we do not perceive any illegality in the action of respondent who as per Clause P of the Pre-qualification and Instructions to Bidders was within his right in

cancelling the bid. The petitioner while participating in the bid proceedings being aware of the said condition, now cannot turn around and question the same.

Reliance placed on the decision in Naveen Kumar Jain vs State of M.P. 2016(2) M.P.L.J. 569, in these facts situation, is of no assistance to the petitioner, as the

decision turns on its own facts.

Further contention that some of the bidders under similar fact situation have been favoured is taken note of and rejected at the outset, as there are no cogent material

to substantiate the contention. It being the prudent policy to eradicate even a remote chance of any controversy which may arise in future during subsistence of

contract having financial implications. Thus, when the action of the respondent-employer is adjudged on these principles, it cannot be faulted with.

Consequently, petition fails and is dismissed. No costs.

In light of the aforesaid judgment, this Court is of the considered opinion that no illegality / irregularity has taken place in cancelling the NIT. A fresh

NIT has already been issued and the petitioner as well as all other persons are certainly free to participate in the tender process. It is not a case,

where the financial bids were opened, and thereafter, the NIT has been cancelled. This Court does not find any reason to interfere with the order

passed by the respondents.

Resultantly, the admission is declined.

Certified copy, as per rules.

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