Sk. Aftab Ahammad vs State of Odisha

Dr. B.R. Sarangi, J.—The Petitioner claiming to be the lowest tenderer has filed this application challenging the decision taken by Opp. Party No. 2 rejecting his offer qualifying the tender bid of Opp. Party No. 3 under Annexure 5 for the work "improvement to road from Paikamala to Nrusinghnath Road under ACA for 2014-15, vide Bid identification on Online-03-0F-2014-15". The summary of essence of fact in delineated herein below:

Opp. Party No. 2, on behalf of Governor of Orissa, invited public tenders for the work mentioned above, with estimated cost of Rs. 83.32 lakhs pursuant to which the Petitioner & Opp. Party Nos. 3 & 4 submitted their tenders. In respect of tender of the Petitioner, he uploaded the required documents as per the ITB (Instruction to Bidder) of the tender call notice but could not be upload his financial turnover certificate as required under Clause-2.8 of the tender call notice since it had not been reflected in the ITB & he submitted the same later. The Petitioner had earlier approached this Court by filing W.P.(C) No. 13688 of 2014 to accept such turnover certificate & this Court vide Order Dated 30.07.2014 had directed the State Counsel to take instruction in the matter. But opposite, party No. 2 rejected the tender bid of the Petitioner as he had not satisfied the requirement of instructions to bidder (ITB) under Clauses-2.1.8, 2.1.4, 2.1.9 of the Detailed Tender Call Notice (DTCN).The Petitioner had also admitted candidly that he could not upload the financial turnover certificate as per Clause-2.1.8 & in respect of compliance with Clause 2.1.4, he had furnished the affidavit & as per Clause-2.1.9, he had furnished a list of machineries which was reflected as bid confirmation report. So far as the bid of Rupesh Aggarwal was concerned, the same had been rejected due to noncompliance with Clauses 2.1.4 & 2.1.7 of the DTCN. Consequently, the bid of Opp. Party No. 3 had been accepted vide Annexure-5.

Mr. P.C. Nayak, Learned Counsel for the Petitioner, assails the bid submitted by Opp. Party No. 3 stating that in the list of machineries the mention of Truck (TATA Tipper) bearing Registration No. OR-15E-2582 in Clause-2.1.9 of which claimed to be the owner, actually stood recorded in the name of Mr. Agarwal Grafite Industries. Opp. Party No. 4 never signed on the lease agreement in favour of Opp. Party No. 3 & rather the said truck was in broken down & damaged condition since long & his scrap was sold to scrap dealer & the said vehicle was non-existence. It is further urged that the rate quoted by Opp. Party No. 3 as 4.23% was less than the estimated amount whereas rate quoted by the Petitioner as 9.9% was less than the estimated amount. The Petitioner being the lowest bidder & there was a difference of figure of around Rs. 5.0 lakhs, Opp. Party No. 2 had shown favour to Opp. Party No. 3 by awarding the contract in his favour.

Mr. J.P. Pattnaik, Learned Additional Government Advocate, refuted such contentions raised by the Learned Counsel for the Petitioner & supported the stand of State Official Opp. Party No. 2, who had settled the tender in favour of Opp. Party No. 3.

Considering the above mentioned facts & circumstances & after going through the records & upon hearing the Learned Counsel for the parties, it appears that the tender call notice for the work improvement to road from Paikamala to Nrusinghnath Road under ACA for 2014-15, vide Bid identification on-Online-03-0F-2014-15 had been floated by Opp. Party No. 2 inviting tenders vide Annexure-1, pursuant to which three intending bidders had submitted their bids as per the conditions stipulated in DTCN which were duly considered & scrutinized by the competent authority. It appears that the Petitioner''s tender could not be accepted due to non-compliance with Clauses 2.1.8, 2.1.4 & 2.1.9 of the DTCN which fact is not controverted. Rather the Petitioner has candidly admitted the said fact in para 5 of the Writ Petition. In view of such candid admission, it is made clear that the Petitioner has submitted tender papers which were incomplete. Therefore, due to non-compliance with the conditions stipulated in DTCN, Opp. Party No. 2 was justified in rejecting his tender & in awarding the same in favour of Opp. Party No. 3, who otherwise satisfied the requirements stipulated in DTCN.

Admittedly it was a Government contract & the nature & scope of judicial review should be as per the Judgment of the Apex Court in Raunaq International Limited Vs. I.V.R. Construction Ltd. and Others, in which it is held that the award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations, the same has been dealt with in detail in paras-9 & 10 of the said Judgment. In Air India Ltd. Vs. Cochin Int., Airport Ltd. and Others, thereof, the Apex Court held as follows:-

"7. The law relating to award of a contract by the State, its corporations & bodies acting as instrumentalities & agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India, Fertilizer Corpn. Kamgar Union v. Union of India, CCE v. Dunlop India Ltd., Tata Cellular v. Union of India, Ramniklal N. Bhutta v. State of Maharashtra & Raunaq International Ltd., v. I.V.R. Construction Ltd. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender & that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities & agencies are bound to adhere to the norms, standards & procedures laid down by them & cannot depart, from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision-making process & interfere if it is found vitiated by mala fides, unreasonableness & arbitrariness. The State, its corporations, instrumentalities & agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the Court must exercise its discretionary power under Article 226 with great caution & should exercise it only in furtherance of public interest & not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene."

The said view was also reiterated in Master Marine Services Pvt. Ltd. Vs. Metcalfe and Hodgkinson Pvt. Ltd. and Another, , Tejas Constructions and Infrastructure Pvt. Ltd. Vs. Municipal Council, Sendhwa and Another, & Sanjay Kumar Shukla Vs. Bharat Petroleum Corporation Ltd. and Others, . Therefore, in view of the settled principles as laid down by the Apex Court (supra), which is the law of land, the grievance of the Petitioner merits no consideration by this Court. The Writ Petition fails & is dismissed.

Amitava Roy, J.

I agree.