Rajkumar vs Chief Engineer And Head Of The Department, Public Works Department And Others

Ramesh Ranganathan, CJ

This Special Appeal is preferred against the order passed by the learned Single Judge in Writ Petition (M/S) No. 1435 of 2019 dated 29.08.2019.

The appellant herein is the petitioner in Writ Petition (M/S) No. 1435 of 2019. He invoked the jurisdiction of this Court seeking a writ of certiorari to quash the tender allotment order dated 05.03.2019; a writ of certiorari to declare the un-acceptance noting dated 25.01.2019, on the e-tender submitted by the second respondent, as illegal; and a writ of mandamus directing respondents 2 and 3 to allot the work to him.

Facts, to the limited extent necessary, are that, pursuant to an e-tender floated by the first respondent on 12.09.2018 for civil construction works prescribing the validation period as 120 days, the appellant-writ petitioner submitted his bid. The bids were opened, the appellant-writ petitioner was found to be the lowest tenderer, and the fourth respondent was found to be the second lowest tenderer. The contract was awarded to the appellant-writ petitioner on 17.10.2018 for a sum of Rs. 75,48,139.50/- + 12% GST. While an agreement was required to be executed between the parties, during the validity period of offer of 120 days, the respondents failed to execute the agreement within the said period. On expiry of the validation period, of 120 days expiring on 14.02.2019, the appellant-writ petitioner, by his letter dated 18.02.2019, informed the respondents that, since the validity period had expired, the earnest money deposit of 3% be returned to him. While the respondent-authorities claim that they had addressed a letter on 18.02.2019 calling upon the appellant-writ petitioner to execute the contract, the appellant-writ petitioner claims not to have received such a letter. While matters stood thus, the respondents negotiated with the fourth respondent i.e. L-2 and awarded the contract to him on 05.03.2019 at Rs. 75,46,333.49/- + 12% GST. Questioning the award of contract to the fourth respondent (L-2), the appellant-writ petitioner invoked the jurisdiction of this Court under Article 226 of the Constitution of India.

In the order under appeal, the learned Single Judge observed that the Public Works Department had not given any reasonable explanation why they had caused a delay in the matter, and could not execute the contract in favour of the appellant-writ petitioner, who was admittedly L-1, within the validity period of the contract; in law, the contract ought to have been executed on or before 14.02.2019; the offer for execution of the contract came only on 18.02.2019, which was refused by the appellant-writ petitioner, as he was not prepared to work at the same rates; and the appellant-writ petitioner had justifiable reasons for doing so as, admittedly, the contract was not executed within the validity period.

The learned Single Judge, thereafter, observed that the only option available to the respondent-authorities was either to negotiate with the appellant-writ petitioner who was L-1, or to issue a fresh tender by cancelling the earlier tender process; the respondent-authorities had chosen to negotiate with the fourth respondent who was L-2, and had later executed the contract in his favour on 05.03.2019; since the contract ought to have been executed within the validity period, the appellant-writ petitioner was justified in withdrawing from the contract, as the contract was not executed within time; negotiations by the Public Works Department, with the fourth respondent who was L-2, was also in violation of the law; the only explanation given by the Public Works Department for the delay was that it was only of four days, and that negotiation with L-2 was done in public interest; this explanation did not cure the defects in the procedure which was laid down in law to prevent minimum chances of abuse or misuse in awarding Government contracts; and, though this procedure had been violated, no reasons had been given why the delay had been caused, except for a stereotype bureaucratic explanation.

The learned Single Judge, thereafter, examined the question as to what could to be done, as the contract had already been executed in favour of the private respondent, and some part of the work had already been completed. Holding that interference at that stage would ultimately harm the public interest, the learned Single Judge disposed of the Writ Petition directing the respondents to pay the appellant-writ petitioner Rs. 75,481/- within one week. The Principal Secretary, Public Works Department was directed to initiate an inquiry into the matter to ascertain why delay had been caused in not executing the contract within the validity period of 120 days.

The appellant-writ petitioner has preferred this Special Appeal questioning non-cancellation of the contract, awarded to the fourth respondent on 05.03.2019, as arbitrary and illegal. Mr. Parikshit Saini, learned counsel appearing on his behalf, would also contend that the learned Single Judge had erred in granting merely 1% of the project cost of Rs. 75,48,139.50/- as damages, though 10% is the profit margin permitted by the department itself; and a far higher amount should have been awarded to him as damages.

Mr. B.S. Parihar, learned Standing Counsel for the State Government, would submit that the Government has also preferred an appeal against the order of the learned Single Judge to the extent the learned Single Judge had directed payment of compensation to the appellant-writ petitioner in securing a bank guarantee of Rs. 40,000/- for the total cost of the project of Rs. 75,48,139.50/-; and in awarding 1% interest thereon for an additional amount of Rs. 75,481/-. We make it clear that we are not examining the order under appeal to this extent, since the appellant-writ petitioner is not aggrieved thereby and is, in fact, claiming a far higher amount as damages.

While the learned Single Judge does appear to be justified in faulting the respondent-authorities for the delay in executing the contract with the appellant-writ petitioner, within the validity period of 120 days, the question, which we are now required to examine, is whether the appellant-writ petitioner is justified in contending that the respondents ought not to have awarded the contract to the fourth respondent (L-2); and they should either have cancelled the tender and invited bids afresh, or should have negotiated with the lowest tenderer, as stipulated in the Procurement Rules which has the force of law.

While the Principal Secretary, Public Works Department has been directed, by the learned Single Judge, to cause an inquiry into the delay caused in execution of the contract with the appellant-writ petitioner, within the validity period of 120 days, what is required to be examined by us, in this Special Appeal, is the appellant-writ petitioner's claim that the entire tender process should have been cancelled and fresh tenders invited, or the respondents should have negotiated with the appellant-writ petitioner in terms of the Procurement Rules.

As noted hereinabove, the appellant-writ petitioner had forwarded his letter dated 18.02.2019 informing the respondents that the rates quoted by him were valid only for a period of 120 days and, since the said period of 120 days had expired, his earnest money deposit be refunded to him. The respondent-authorities, thereafter, negotiated with the fourth respondent (L-2) and awarded the work to him at Rs. 75,46,333.49 + 12% GST, which is around Rs. 1800/- lower than what the appellant-writ petitioner had offered of Rs. 75,48,139.50 + 12% GST. The appellant-writ petitioner was not willing to execute the work at those prices, on completion of the validity period of 120 days on 14.02.2019, and had sought refund of the earnest money deposit. His claim was that the rates, which he had quoted earlier and which were accepted by the department, were no longer economical because of efflux of time of 120 days. The fourth respondent (L-2) was ready and willing to execute the work at a price lower than what the appellant-writ petitioner had quoted on 17.10.2018 before commencement of the validation period of 120 days.

The contention, urged on behalf of the appellant-writ petitioner, that the respondents ought to have negotiated with the appellant-writ petitioner, in terms of the Procurement Rules, does not merit acceptance for the simple reason that the appellant-writ petitioner had expressed his unwillingness to execute the work at the rates quoted by him earlier, whereas the fourth respondent, with whom the Public Works Department had negotiated later, had agreed to execute the work at a price lower than what the appellant-writ petitioner had quoted on 17.10.2018.

While the Procurement Rules, no doubt, require negotiations to be conducted with the lowest tenderer, the said Rules would apply where the price quoted by the lowest tenderer is found unacceptable by the Public Works Department, and they intend negotiating with him for a further reduction in price. In the present case, the appellant-writ petitioner has made it clear that he was not willing to execute the work at the prices quoted by him on 17.10.2018. Having made his stand clear, and having sought refund of the earnest money deposit, the appellant-writ petitioner cannot now be heard to contend that the respondents ought to have negotiated with him. No useful purpose would have been served by any such negotiations, when the appellant-writ petitioner had made their stand clear that they were unwilling to execute the work at the prices quoted by them earlier on 17.10.2018.

The contention, that in terms of the Procurement Rules the tender process should have been cancelled and fresh tenders invited, does not also merit acceptance, for any further delay, caused as a result of inviting tenders afresh and thereafter in awarding the contract, would only lead to a further escalation of costs, besides adversely affecting larger public interest in not executing the work early. Since the work was awarded to the fourth respondent on 05.03.2019, nearly six months before the order under appeal came to be passed, the learned Single Judge was, in our view, justified in refusing to interdict award of the work to the fourth respondent.

The appellant-writ petitioner's claim, in effect, is that, while he was not willing to execute work at the prices quoted by him on 17.10.2018, nobody else should be permitted to execute the work at the said price either; and, instead, the respondent-authorities should have re-tendered the work and invited bids afresh. Such a contention necessitates rejection as it is devoid of merit.

A writ of mandamus and a writ of certiorari are discretionary, unlike a writ of habeas corpus which can be sought as a matter of right. One of the principles inherent is that the exercise of discretionary power should be for the sake of justice and, if interference would result in greater harm to society, then this Court may refrain from exercising the power. (State of Maharashtra v. Prabhu reported in (1994) 2 SCC 481). As the jurisdiction, which this Court exercises under Article 226 of the Constitution of India, is discretionary, interference is justified only in furtherance of the interest of justice. The interest of justice and the public interest coalesce. They are very often one and the same. The Court has to weigh public interest vis-à-vis private interest while exercising its discretionary powers. (Ramniklal N. Bhutta v. State of Maharashtra reported in AIR 1997 SC 1236; Manohar Lal v. Ugrasen & others reported in (2010) 11 SCC 557; Master Marine Services Pvt. Ltd v. Metcalfe and Hodgkison Pvt. Ltd reported in (2005) 6 SCC 138; Air India Ltd. v. Cochin International Airport Ltd. reported in (2000) 2 SCC 617). This Court would refrain from interference save larger public interest.

Even if a legal flaw might be electronically detected, this Court would not interfere save manifest injustice or unless a substantial question of public importance is involved. (Rashpal Malhotra v. Mrs. Saya Rajput reported in AIR 1987 SC 2235 and Council of Scientific and Industrial Research v. K.G.S. Bhatt reported in AIR 1989 SC 1972). Even when some defect is found in the decision-making process, this Court would exercise its discretion with great caution and only in furtherance of public interest, and not merely on the making out of a legal point. Only when it comes to the conclusion that overwhelming public interest requires interference, should it intervene. (Air India Ltd. v. Cochin International Airport Ltd. reported in (2000) 2 SCC 617). One of the limitations imposed by this Court, on itself, is that it would not exercise jurisdiction unless substantial injustice has ensued or is likely to ensue. It would not allow itself to be turned into a Court of appeal to set right supposed errors of law which do not occasion injustice. (Sangram Singh v. Election Tribunal, Kotah reported in AIR 1955 SC 425).

Viewed from any angle, we see no reason to interfere with the order under appeal to the extent the appellant-writ petitioner had questioned award of the contract to the fourth respondent (L-2).

Mr. Parikshit Saini, learned counsel for the appellant-writ petitioner, would submit that, for the loss which the appellant-writ petitioner had suffered for no fault of his and for the failure on the part of the respondent-authorities in awarding him the work within the validation period of 120 days, the appellant-writ petitioner should be compensated for the damages he suffered, and the sum directed to be paid by the learned Single Judge is woefully inadequate.

The question whether the appellant-writ petitioner has suffered any loss, and if so the quantum of loss suffered by him, are all disputed questions of fact which must be established on the basis of evidence. The proper forum for adjudicating such a claim for damages is the competent Civil Court.

Suffice it therefore, while dismissing the Special Appeal, to make it clear that the order now passed by us shall not disable the appellant-writ petitioner from availing his common law remedy of filing a suit before the competent Civil Court seeking damages for the loss, if any, caused to him. On such a suit being filed, we have no doubt that the competent Civil Court shall adjudicate the appellant-writ petitioner's claim, for damages, on its merits uninfluenced by any observations made either in the order under appeal or in the order now passed by us.

Subject to the aforesaid observations, the Special Appeal fails and is, accordingly, dismissed. No costs.