AI Structured Summary
Not yet generated for this judgment
Judgment
An e-NIT bearing No. 23 of 2017 dated 21.06.2017 came to be issued by the office of the Director General of Police, J&K Srinagar, inviting tenders inter alia for the supply of Hosiery items and All weather Jackets. All the bids were required to be submitted in the office of respondent No. 2, both at Jammu and Srinagar in two separate covers which included the technical bid and the financial bid. The petitioner submitted his bid. Not only was the technical bid accepted, but even in the financial bid, the petitioner was declared as L-1. However, by virtue of the order impugned dated 02.06.2018, the aforesaid tender was cancelled.
For facility of reference the order impugned is reproduced hereunder:
"In view of closure of financial year 2017-18, e-NIT No. 21 of 2017 dated 21.06.2017 and e-NIT No. 23 of 2017 dated 21.06.2017 floated by this Hqrs for purchase of Hosiery items and All weather Jacket respectively during the year 2017-18 is hereby cancelled as per Clause (V) of General Terms & Conditions of e-NIT's."
Clause V of the General Terms and Conditions of the e-NIT referred to in the order impugned envisages as under:
"Purchaser reserves the right to cancel/reject or scrap tender offer of any or all the tenderers without assigning any reason with no consequential liability."
The petitioner assails the order impugned on the ground that the decision of cancellation was illegal and arbitrary inasmuch as the closure of the financial year 2017-18 could not have been a ground at all for cancelling the e-NIT. It was stated that when the bid was invited vide e-NIT dated 21.06.2017, tenders were to be opened online on 31.07.2017 and the tender offer was to remain valid up to 30.06.2018. It was, thus urged that the basis for cancellation was untenable. It was also urged that the NIT was cancelled with a view to confer undue benefit on those who had failed to assume the position of L-1 in the said tendering process.
In response to the petition, the stand taken by the respondents is that after the receipt of tenders, the technical evaluation of tenders was carried out by the duly constituted Technical Evaluation Committee. According to the Committee's report, out of seven firms that had participated in e-tender No. 23 of 2017, only two firms had been recommended for conditional qualification. It is further stated that based upon the recommendations of the Committee, financial bids of the qualified firms were opened and further that as per the financial bid, the bid offered by the petitioner herein was the lowest one as Rs. 1826 per Jacket.
The stand further taken is that after the opening of the financial bid, complaints were received from various firms that the Technical Evaluation Committee had not scrutinized the documents properly and despite short fall in documents of some of the firms, they had approved the technical bid. It is stated that the complaints were forwarded to the Chairman of the Technical Evaluation Committee, who, in turn, opined that the complaints had no merit and were required to be rejected.
It is further stated that as per Clauses of the e-NIT, the firms were supposed to furnish the documents viz SSI Unit, registration certificate, installed capacity per month and functionality certificate of SSI Unit, which were not uploaded and further that the Unit had mislead the department by furnishing in writing that the petitioner, namely, M/s. Muskan Industries had a capacity of 9000 Units in 25 working days.
It was thus stated that the petitioner had furnished the false information and thus deceived the department. It was in those circumstances urged that the Police Headquarters had no other option but to cancel e-NIT No. 23 of 2017 in terms of Clause V of the General Terms and Conditions and further that the decision in question was taken in the interest of the State and welfare of the Jawans of the department.
Interestingly, the reason for cancellation of the e-NIT is different from the stand taken in the response filed by the State. There is total dichotomy in the two stands. Infact the State was supposed to support and buttress the decision taken vide order dated 02.06.2018, which is impugned in the present petition, but instead of doing that, a completely new stand has been taken in the response.
In Mohinder Singh Gill and another v The Chief Election Commissioner, New Delhi and others, (1978) 1 SCC 405, it was held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supported or supplement by reasons in the shape of affidavit or otherwise. Reliance was placed on what Bose, J has said in Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16 when his Lordships observed thus:
"public orders, publically made, in excercise 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 actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself."
In the present case, however, the situation is even worse. Instead of supporting or supplementing by reasons, the action taken by virtue of the order impugned, in the reply affidavit, a totally different and divergent stand has been taken. Whereas the affidavit seeks to set up a case based upon the premise that false information was provided to the department. The order impugned narrates a different story. The affidavit filed thus cannot at all be relied upon for justifying the order impugned.
Testing the order impugned on its own merits it can be seen that no reasons, whatsoever, have been given as to why it became necessary for the department to cancel the e-NIT only because the financial year had come to a close. Infact there was no such prohibition ever imposed by the tender document that the tender not finalized before the financial year would be abandoned. On the contrary, it appears that the reasons for cancellation of the tender were different. Clearly the respondents cannot be permitted to take a different stand by way of an explanation in the reply affidavit and were under an obligation to justify the action taken on the basis of the order impugned. It appears that the department, in regard to the same items has either proceeded or is contemplating to invite fresh tenders. It is not a case that the hosiery items and the jackets which were otherwise sought to be procured through e-NIT No. 23 are no longer required. The action of the respondents thus smacks of arbitrariness. Not only that, on the basis of the facts which have emerged hereinabove, the allegation of the petitioner that the effort of the respondents was to allot the contract to somebody else who had not been declared L-1, cannot be brushed away lightly.
While the State must be conceded free play in the joints in the matter of entering into contracts with private parties, yet the action of the Government must be free from arbitrariness.
In M/s Master Marine Services Pvt. Ltd vs. Metcalfe & Hodgkinson Pvt. Ltd and ors, (2005) 6 SCC 138 and Jagdish Mandal vs. State of Orissa and ors, (2007) 14 SCC 517, the Apex Court crystallized the following tests for judicial review in administrative action.
"Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR
Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.'
ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
Testing the facts of the present case on the touch stone of the aforementioned judgments, it is difficult to hold that the process of cancellation of the e-NIT in which the petitioner was found as the lowest tenderer was not mala fide or unreasonable. Infact there was no correlation between the financial year coming to an end and the rates submitted by the petitioner in the tendering process, which rates were to hold good till June, 2018.
Having considered the entire matter, in my opinion, the decision impugned dated 02.06.2018 is bad and arbitrary and accordingly, quashed. The respondents shall take the tendering process initiated vide e-NIT No. 23 of 2017 to its logical conclusion.