R.K. Construction @APPELLANT@Hash Union Of India & Ors.

The matter is today listed for orders on an application preferred by learned counsel representing the respondents under Article 226(3) of the

Constitution of India for vacating the ad interim stay order dated 30.07.2018 passed by this Court in favour of the petitioner firm.

With the consent of the learned counsel for the parties, final arguments have been heard and the writ petition is being decided today itself. Thus, the

application under Article 226(3) of the Constitution of India is dismissed as infructuous.

The petitioner firm has approached this Court through this writ petition filed under Article 226 of the Constitution of India for assailing the

communication (Annexure-9) dated 18.07.2018 issued by the respondent No.2 being the All India Institute of Medical Sciences, Jodhpur whereby, the

tender contract for Comprehensive Maintenance of Civil and Electrical part of all buildings of hospital complex, medical college complex, Nursing

College, hospitals and residential complex buildings at AIIMS was awarded to the respondent No.3 M/s. Devarsh Construction Company by making

material corrections in the original tender application form submitted by the said firm.

Facts in brief are that the tender submitted by the petitioner and three others including the respondent No.3 in furtherance of the NIT No.AIIMS-

JDH/EE/Civil/2017-18/Mtc./02 dt.16.02.2018 were found technically responsive. After initial round of evaluation of price bids of the four successful

bidders, M/s. Sterling & Wilson Pvt. Ltd. Company’ bid was found to be the lowest at a sum of rupees 3.82 crores odd whereas, the

petitioner’s bid at a sum of Rs.4.20 crores odd was ranked second. The petitioner has raised a grievance in this writ petition that, after having

evaluated the financial bids and having prepared the comparative financial statement, the procuring entity could not have indulged in an exercise of

making rectifications in the original bid forms but, it acted in a totally high-handed, arbitrary and illegal manner, and permitted corrections in the

tender document of the respondent No.3 thereby, bringing the value of its financial bid to Rs.3,94,000/- thereby causing a reduction of more than 5.6%

and on the contrary, the petitioner’s financial bid was arbitrarily and unilaterally increased to Rs.4,24,00,000/- and thereafter, the respondent No.3

was declared to be the lowest bidder.

Shri Ravi Bhansali, Sr. Advocate assisted by Shri Hemant Dutt, learned counsel representing the petitioner relied upon the Supreme Court decision in

the case of West Bengal State Electricity Board vs. Patel Engineering Co. Ltd. & Ors., reported in AIR 2001 SC 682 and urged that once, the

financial bids have been opened, allowing corrections on the aspect of price quoted by a bidder is impermissible on any aspect whatsoever. He urged

that on opening the financial bid, the petitioner’s offer was found to be significantly lower than that of respondent No.3 and thus, the procuring

entity was not entitled to grant the contract to the respondent No.3 by allowing wholesome corrections in the price bid form. He thus implored the

Court to exercise its extraordinary writ jurisdiction and quash the impugned action as being arbitrary, perverse and illegal.

Per contra, Shri Sanjeet Purohit, Advocate representing the Union of India and Shri Vikas Balia, Advocate representing the respondent No.3

(successful bidder) vehemently and fervently opposed the submissions advanced by Shri Bhansali. They drew the Court’s attention to the exercise

of checking discrepancies/ arithmetical errors undertaken by the respondents after opening the financial bids and contended that when the bid of the

respondent No.3 was opened, it was found that the total price of material component viz. common burnt clay bricks quoted in the bid form was

erroneously quoted as Rs.55,00,000/- whereas the actual amount should have been Rs.5500/- only. They pointed out that the rate was to be quoted as

unit with thousand pieces constituting one unit. The required quantity of burnt clay bricks was 2000. The bidder quoted the rate at Rs.2750/- per

thousand but while mentioning the total value of 2000 bricks, the unit price of Rs.2750/- was multiplied by 2000 instead of 2 thereby resulting of an

erroneous quotation of Rs.55,00,000/- When this purely arithmetical error was realised by the procuring entity during the lawful process of checking

the arithmatical errors in the bids of all responsive bidder, the rectifications were made at its end and the respondent No.3 whose price bid was

drastically reduced to Rs.3.94 crores as against its original quotation of Rs.4,48,40,706.08, was asked to give its consent for the lowered price. The

respondent No.3 agreed to accept the contract for the corrected and lowered rate whereafter, the contract was awarded and executed in its favour.

Attention of the Court was drawn to the CPWD Works Manual, 2014 and the Manual for Procurement of Goods, 2017 which govern the evaluation

of the contracts in question and more particularly, the condition No.20.2.1 which reads as below:

“20.2.1 (1)(ii).- Care should be taken in preparing and scrutinizing the comparative statement of tenders to guard against arithmetical and other

mistakes. Failure to do this may result in the work being awarded to the contractor who is not the lowest acceptable tenderer, a contingency which

must be guarded against.

20.2.1 (2)(iv)(c).- When the rate quoted by the contractor in figures and in words tallies, but the amount is not worked out correctly, the rates quoted

by the contractor in units shall be taken as correct and not the amount.â€​

Shri Purohit and Shri Balia urged that correction of arithmetical and other mistakes are mandated rather than prohibited by the CPWD Manual which

also prescribes that when the rate quoted by the contractor in figures and words tallies but the amount is not worked out correctly, the rate quoted by

the contractor in units shall be taken as correct and not the amount. They urged that as the rate quoted by the respondent No.3 for the burnt clay

bricks was Rs.2750/- for a unit of thousand bricks, manifestly, the cost of 2000 bricks which was required under the tender could not have been

Rs.55,00,000/- and the figure mentioned to this effect in the financial bid of the respondent No.3 was sheerly out of an arithmetical error. They urged

that as many as 11 arithmetical mistakes found in the form of petitioner whereas 17 were noticed in the bid form of the respondent No.3 and all were

rectified. They further urged that had the exercise of rectification of arithmetical error not been undertaken then, the bidder named M/s. Devarsh

Construction Company would have outrightly been granted the contract because its financial bid was found to be lowest at rupees 3.94 crores. They

also relied upon the following observations made by Hon’ble the Supreme Court in the case of West Bengal State Electricity Board

(supra):“Mr.Chidambram, however, submitted that in equity respondent Nos.1 to 4 would be entitled to relief of correction of mistakes. He invited

our attention to para 84 of the American Jurisprudence (Second Edition, Volume 64, Page No.944). It will be useful to quote the relevant part of that

para here:

“As a general rule, equitable relief will be granted to a bidder for a public contract where he has made a material mistake of fact in the bid which

he submitted, and where, upon the discovery of that mistake, he acts promptly in informing the public authorities and requesting withdrawal of his bid

or opportunity to rectify his mistake particularly where he does so before any formal contract is entered into.â€​

and urged that errors in the bid regarding the unit price can be ignored and the bid can be considered on the basis of the total price bid which is lowest.

They thus urged that the case is not one wherein, the petitioner has been able to prick conscience of the Court thereby warranting exercise of the

extraordinary writ jurisdiction calling for judicial review in a purely contractual manner. On these grounds, they craved dismissal of the writ petition.

I have given my thoughtful consideration to the arguments advanced at bar and have gone through the material available on record.

It is the firm opinion of this Court that the controversy raised by the petitioner in this writ petition is frivolous and untenable. Indisputably, evaluation of

the bids submitted for the contract in question had to be undertaken with reference to the CPWD Manual and Manual for Procurement of Goods,

2017. The petitioner’s counsel has also relied upon the same Manual while addressing the Court and for assailing the communication (Annexure-

9) dated 18.07.2018. As per condition No.20.2.1 of the CPWD Manual, rather than prohibiting correction of arithmetical errors, the Manual mandates

the procuring entity to indulge in such exercise and ensure that no arithmetical error exists in the bid forms. Precisely by referring to this provision, the

procuring entity, proceeded to indulge in an exercise of checking and correction of arithmetical errors in the bid forms of all the bidders. Had this

exercise not been conducted, manifestly, the firm named M/s Devarsh Construction Company would have been awarded the contract outright

because in the initial chart prepared after opening of the financial bids, the price bid of the said contractor was found to be the lowest whereas that of

the petitioner was the second lowest. However, scrutiny of the arithmetical errors in the price bids was undertaken in keeping with the CPWD

Manual and it came to light that price bid submitted by all the successful bidders were riddled with large number of arithmetical mistakes which were

duly verified and corrected by the Price Bid Evaluation Authority which, drew up the fresh corrected chart wherein, the bid of the respondent No.3

was found to be the lowest. It is not that having gone through this exercise, the respondents mechanically issued the work contract to the respondent

No.3. A communication was sent to inquiry whether it was ready to accept the contract on the significantly reduced rate than the one quoted by it

originally. This endeavour by the respondents puts it beyond pale of doubt that the procuring entity was acting in a transparent and fair manner while

evaluating the bids of the successful bidders. The exercise of correction in arithmetical errors was undertaken without involving any bidder and thus,

the action cannot be branded as unfair or arbitrary. As the bid of respondent No.3 was found to be lowest after correcting the arithmetical errors, the

price bid forms of all the successful bidders by the price bid evaluation committee independently as per the Manual by way of a perfectly lawful

exercise as warranted by the CPWD Manual, the respondents have decided to award the contract to it. The action undertaken by the respondents is

totally compliant with the ratio of the Supreme Court decision in the case of West Bengal State Electricity Board (supra).

Hence, I find no reason for interference in the impugned communication (Annexure-9) dated 18.07.2018 and the subsequent award of contract in

favour of respondent No.3 M/s Devarsh Construction Company for the work in question while exercising the powers of judicial review conferred

upon this Court by Article 226 of the Constitution of India in a contractual matter which does not suffer from any illegality, perversity or arbitrariness

whatsoever.

Hence, the writ petition as well as stay application are rejected as being devoid of merit.

No order as to costs.