Ms Ranjit Construction vs State of Odisha and others

DR.B.R.SARANGI, J.

M/s Ranjit Construction, registered as a partnership firm, is a special class contractor having valid license, according to prescribed revised

classification, and has obtained a certificate in Form “B†of Certificate of Registration under Rule-6 of the PWD Contractors Registration Rules,

1967. The Superintending Engineer, Rural Works Circle, Bhawanipatna-opposite party no.4 invited public tender on 09.09.2016 in respect of 66

packages for construction of road under Pradhan Mantri Gramya Sadak Yojana (PMGSY). In respect of the work, vide Package No. OR-24-140,

i.e., “LO28 Bharuamunda to Gambhariguda†the approximate estimate cost was fixed to Rs.240.21 lakhs and the period of completion was within

9 months. In respect of the said package, the petitioner participated, by submitting all required documents, along with 5 other bidders. On evaluation of

the technical bid, its result was published on 26.12.2016, in which the petitioner, along with 3 other bidders, was found to be qualified. Thereafter, the

price bid was opened, in which it was found that the petitioner and one Sanjay Kumar Agrawal had quoted equal rate. Therefore, a lottery was

conducted in which the petitioner was declared successful. The tender inviting authority recommended the name of the petitioner, for approval of the

tender, to the Chief Engineer, PMGSY. As the bid of the petitioner was not approved, no work order has been issued in favour of the petitioner, hence

this application.

Mr. P.C. Nayak, learned counsel for the petitioner strenuously urged that in respect of the work in question in the tender process 6 bidders,

including the petitioner, had participated and 4 bidders (including the petitioner) were qualified in the technical bid. When price bid was opened, the

rate quoted by the petitioner and one Sanjay Kumar Agrawal was found to be equal, for which a lottery was conducted. In the lottery, as the petitioner

was found successful, the tender inviting authority recommended its name for approval. But, so far as other packages are concerned, though the

tender bids have been approved by the appropriate authority and work orders have been issued, the petitioner having stood in the same footing and

being equal to them, is entitled to be treated fairly and reasonably and allowed to work by issuing work order in its favour by approving the

recommendation made by the competent authority. Due to such unequal treatment, the petitioner has approached this Court ventilating its grievance.

Even though the petitioner made a representation on 06.06.2017, the same was not replied to. Against such arbitrary and unreasonable action of the

authority concerned, finding no other way out, the petitioner has approached this Court by invoking extraordinary jurisdiction of this Court.

Mr. P.K. Muduli, learned Addl. Govt. Advocate, with reference to the counter affidavit filed by the opposite parties, contended that the bid

evaluation committee apprehended lack of transparency and fair play in the bidding process and therefore decided to cancel the tender in respect of

the package. Therefore, pursuant to letter dated 01.05.2017, the tender process has been rejected.

We have heard Mr. P.C. Nayak, learned counsel for the petitioner, as well as Mr. P.K. Muduli, learned Addl. Govt. Advocate and perused the

record. Pleadings between the parties having been exchanged, with the consent of learned counsel for the parties, the writ petition is finally disposed

of at the stage of admission.

The facts narrated above are undisputed. Pradhan Mantri Gramya Sadak Yojana (PMGSY) scheme was launched by the Government of India,

Ministry of Rural Development, and operated through National Rural Road Development Agency (NRRDA). In order to make the tender fair and

competitive, the NRRDA prescribed guidelines for approval of the project and also for the tender process. Pursuant to the tender invited by the

Superintending Engineer in respect of package no.OR-24-140, six agencies had participated in the bidding process. The bid of the Haresh Agarwal

and Arjun Agarwal was declared disqualified, as sufficient EMD in original were not submitted along with the respective tender documents.

Therefore, out of four qualified bidders, when the financial bid was opened, it was found that the lowest quoted bidder, namely, Sri Laxmi Chand Mital

who had quoted 4.50% less than the estimated cost put to tender, had not furnished the APS in original and, therefore, his bid was also rejected. The

petitioner along with Sri Sanjay Kumar Agarwal, both quoted equal price of 2% excess than the estimated cost. Consequentially, opposite party no.4,

as per the procedure prescribed, followed the lottery procedure in which the petitioner’s name came out to be successful. Accordingly, opposite

party no.4, vide its letter dated 30.01.2007, recommended the name of the petitioner to opposite party no.3 for consideration and approval. When the

matter was thus stood, the recommendation was placed in the bid evaluation committee meeting of Odisha State Rural Road Agency (OSSRA) held

on 01.05.2017 under the Chairmanship of opposite party no.2. Then, comparison of bid of package no.OR-24-140 was made with that of other bids in

respect of other packages, where it was found that Sri Laxmi Chand Mital became L-1 bidder by quoting 2% excess in respect of the package

no.OR-24-148/B-II whereas for the selfsame package Sri Sanjay Kumar Agarwal, who had quoted 4.10% less, had not furnished the original APS

deposit, but in respect of package no. OR-24-140B-II Sri Laxmi Chand Mital quoted 4.50% less and had not furnished the APS deposit in original

whereas Sri Sanjay Kumar Agarwal quoted his bid 2% excess. Therefore, the bid evaluation committee apprehended lack of transparency and fair

play in the bidding process and decided to cancel the tender in respect of both the packages and further recommended to block the Digital Signature

Certificate (DSC) of both the bidders, i.e., Laxmi Chand Mital and Sanjay Kumar Agarwal. Thereafter, opposite party no.3, vide letter dated

19.05.2017, intimated opposite party no.4 that as per the recommendation dated 01.05.2017 of the Chief Executive Officer, OSSRA, the tender

process has been rejected. The bid evaluation committee, OSSRA in the meeting held on 01.05.2017 found that in respect of packages no. OR-24-140

and OR-24-148, there is internal coalition between some agencies, who have quoted less amount than the estimated cost put to tender but intentionally

did not submit their original APS. Therefore, the bid evaluation committee, which is the apex authority in the State, with regard to taking decision on

awarding PMGSY works basing on the bidding documents, decided to cancel the tender process in respect of both the packages. Accordingly, the

opposite parties have tried to justify their action by assigning reasons in the counter affidavit, which is not available in any of the documents prior to

filing of the writ petition.

Needless to say that this Court passed an interim order on 15.07.2017 that status quo as on date, with regard to tender package no. OR-24-140, out

of 66 packages for which tenders were invited on 09.09.2016, would be maintained by the parties. Before passing of such interim order, vide orders

dated 03.07.2017 and 13.07.2017, opportunity was given to the opposite parties to obtain instructions or file counter affidavit. Even though instruction

was received on 15.07.2017, no counter affidavit had been filed. Therefore, this Court passed the interim order as mentioned above.

As a matter of fact, the reasons which have been assigned are based on apprehension with regard to conspiracy leading to tender fixing and it is

stated that on scrutiny of the records, it was apprehend that some of the bidders, who had not submitted original documents, had conspired for tender

fixing and thus the tender process was rejected at the Chief Engineer level. In the absence of there being any material on record itself, the authority

could not have apprehended anything and on that basis rejection of the tender could not have been done, which is the settled position of law.

Furthermore, the tendering authority, finding the petitioner as lowest tenderer and was successful in the lottery, having recommended its name for

approval, instead of approving the same, on the basis of apprehension of tender fixing the rejection of recommendation should not have been made.

More so, the reasons which have been assigned in the counter affidavit can be construed as an afterthought and as such the same cannot be

accepted.

In Re: Racal Communications Ltd.(1980)2 All ER 634 (HL), it has been held that the giving of reasons facilitates the detection of errors of law by

the court. In Padfield v. Minister of Agriculture, Fisheries and Food (1968) 1 All E.R. 694, it has been held that a failure to give reasons may permit

the Court to infer that the decision was reached by the reasons of an error in law.

In Union of India v. Mohan Lal Capoor, AIR 1974 SC 87 it has been held that reasons are the links between the materials on which certain

conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely

administrative or quasi-judicial and reveal a rational nexus between the facts considered and conclusions reached. The reasons assure an inbuilt

support to the conclusion and decision reached. Recording of reasons is also an assurance that the authority concerned applied its mind to the facts on

record. It is vital for the purpose of showing a person that he is receiving justice. Similar view has also been taken in Uma Charan v. State of Madhya

Pradesh, AIR 1981 SC 1915.

The order dated 01.05.2017 rejecting the tender, having been passed without any reason and the reasons which have been attempted to be justified

by way of filing counter affidavit having never been communicated to the petitioner, cannot be tenable in the eye of law.

The apex Court in Gordhandas Bhanji, AIR 1952 SC 16 held as follows:

“Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer

making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have

public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference

to the language used in the order itself.â€​

The Constitution Bench of the apex Court in Mohinder Singh Gill v. The Chief Election Commissioner, New Delhi, AIR 1978 SC 851, the apex

Court held :

“ …… when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot

be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court

on account of a challenge, get validated by additional grounds later brought out. Orders are not like old wine becoming better as they grow old.â€​

In view of the law laid down by the apex Court, as discussed above, and applying the same to the present context, it is made clear that the reasons

for rejecting the tender of the petitioner, which have been mentioned in the counter affidavit for the first time, were never communicated to the

petitioner, and as such the same cannot be accepted. Therefore, the order dated 01.05.2017 rejecting the tender process, which has been

communicated to the petitioner vide letter dated 19.05.2017 in Annexure-A to the counter affidavit, cannot sustain in the eye of law. Consequentially,

the same is hereby quashed. Opposite party no.3 is directed to approve the work in respect of package no.OR-24-140, pursuant to the

recommendation made by the tender inviting committee vide Annexure-3, as expeditiously as possible and take necessary follow up action in

accordance with law.

The writ petition is accordingly allowed. No order as to costs.