Tama Fabrication And Ors vs State Of Arunachal Pradesh

A.K. Goswami, J

These 2(two) intra-Court appeals are preferred against the judgment & order dated 12.06.2019 passed by the learned Single Judge in a writ

petition instituted by M/s N.T. Agency as petitioner No.1 and its Power of Attorney Holder as petitioner No.2, who are arrayed as respondent

Nos.6 & 7 in Writ Appeal No.174/2019 and respondent Nos.1 & 2 in Writ Appeal No.191/2019. For the sake of convenience, they will be

referred to as petitioner during the course of this judgment. The appellant in Writ Appeal No.174/2019, M/s Tama Fabrication, was arrayed as

respondent No.6 and will be referred to as the appellant in the course of this judgment in both the appeals, while the appellants in Writ Appeal

No.191/2019 shall be referred to as the State respondents.

Notice Inviting e-tender (for short, “NITâ€), on National Competitive Bidding was issued on 12.09.2018 in respect of the work of road

from Yoglu to Yapap Geko (Phase-II), Pistana Circle, Lower Subansiri District. The estimated cost as indicated in the Notice Inviting e-tender

was projected as ` 28,43,32,448/-. Though the technical bid was supposed to be opened on 26.09.2018, due to problem of internet connectivity,

by Corrigendum dated 28.09.2018, date of opening of tender was postponed to 03.10.2018 and the venue was also shifted to the Office of the

Superintending Engineer, Yachuli Circle. By the order dated 01.11.2018, the technical bid of the appellant and the petitioner was found to be

responsive and it was indicated that the financial bids will be opened on 05.11.2018. The financial bid was finally opened on 08.11.2018 after a

postponement on 05.11.2018. The bid of the appellant having been found to be financially responsive, letter dated 21.11.2018 conveying

approval for acceptance of the work in question was issued.

By the impugned judgment, the learned Single Judge had set aside the order dated 01.11.2018 issued by the Executive Engineer, Yajali, PWD

Division as well as the order dated 21.11.2018 issued by the Chief Engineer (CZ-A), PWD, Government of Arunachal Pradesh.

The pleaded case of the petitioner in the writ petition is that the petitioner had submitted a representation on 20.11.2018 for rejection of the bid

of the appellant on the ground that the appellant had more than 3(three) works at the time of submission of the tender, which is in violation of the

Arunachal Pradesh District Based Entrepreneurs and Professionals (Incentives, Development & Promotional) Act, 2015 (for short, ""Act"") and

Rule 2(e) of the Arunachal Pradesh District Based Entrepreneurs and Professionals (Incentives, Development & Promotional) Rules, 2015 (for

short, ""Rules""). The petitioner had also listed 4(four) numbers of works which it claimed that the appellant was executing. On the aforesaid

foundation, prayer was made to set aside and quash the letter dated 01.11.2018 and the letter dated 21.11.2018 and the challenge was accepted

by the learned Single Judge, as noticed hereinabove.

The respondent Nos.4 & 5, through the Executive Engineer, Yajali Division, had filed an affidavit. In the said affidavit, it is pleaded that the

petitioner had quoted an amount of ` 23,97,77,553.50, which is 15.67% below the estimated cost and, therefore, the same was beyond the

allowable limit of 5% in terms of Clause 20.4.3.2 of the CPWD Manual, 2014 and hence, the petitioner was disqualified. It is pleaded that the bid

was considered to be offered by a non-serious bidder, who, if allotted the work, could never have been able to achieve quality work. It is further

pleaded that the Act and the Rules are not relevant since the project is worth more than ` 10 Crores and besides, applicability of the Act was also

not laid down in the terms and conditions of Standard Bidding Document (SBD). It is stated that the 4(four) works being executed by the appellant

are of less than ` 10 Crores.

The learned Single Judge in its order dated 19.03.2019 had observed that the learned Additional Senior Government Advocate had submitted

that the affidavit filed by the respondent Nos.4 & 5 is in their personal capacity and the same is not the stand of the Government. In view of the

above submission, notwithstanding the order dated 18.03.2019 that the matter would be proceeded with on the basis of the affidavit of respondent

Nos.4 & 5, while fixing the matter on 08.04.2019, liberty was granted to the State to file affidavit within 2(two) weeks as a last chance.

Accordingly, an affidavit-in-opposition was filed by the respondent Nos.1 & 2 through the Under Secretary, PWD and in the said affidavit,

allegation of violation of the Act and the Rules was denied. It is pleaded that Rule 2(ii), Rule 4(i)(6), Rule 4(ii)(e) and the amended Rule 2(e) of

having not more than 3(three) works in hand were satisfied by the appellant and that the statement submitted/ uploaded by the appellant in Form-D

complying with the requirement of the NIT were factored in during evaluation of the bid. None of the projects in hand of the appellant falls within

the jurisdiction of Lower Subansiri District and the project being outside the said district had not been factored in during the bid evaluation. It is

stated that the contract agreement had already been executed with the appellant on 14.12.2018. It will be appropriate to extract Paragraphs 8, 10

& 11 of the said affidavit hereunder:-

“8. That with regards to the statement made in Paragraph-6 of writ petition, your deponent begs to deny the same and state that no

violation of any provision laid under Arunachal Pradesh District Based Entrepreneurs & professionals (incentives, development and

professional) Rules, 2015 been resorted to during bid evaluation. The credentials of M/s Tama Fabrication been established being the

most eligible bidder for this package wrt specific provision of Rule as under - Rule 2(ii) â€" Satisfied. Rule 4(i)(6) â€" Satisfied. Rule 4(ii)

(e) & amended under Rule 2(e) published in ‘The Arunachal Pradesh Gazette against 14, 2018’ of having not more than 3(three)

works in hand â€" satisfied. The statement submitted/uploaded by the firm in form D complying with required of NIT factored during

evaluation of bid. This issue of relying only on uploaded documents, also been sought by petitioner in para3.

That with regards to statement made in Paragraph-8 of writ petition, your deponent begs to state that the None of the 4(four)

projects highlighted by the Petitioner falls within the jurisdiction of Lower Subansiri District. Being governed under District based

entrepreneur Act, the projects outside the district, has not been factored in during bid evaluation.

That with regards to the statement made in Paragraph-9, 11, 12 & 15 of writ petition, your deponent begs to state that on the claim

of the petitioner that the respondent no.6 is liable to be rejected, inter alia, in terms of Arunachal Pradesh district-based entrepreneurs &

professionals (incentives, development and professional) rule 2018, it is to apprise that in the instant case the said act/rule is not relevant

since the corresponding amount of the project is more than 10.00 crores (act enclosed at Annex-II), (Rule 4(i)(6) which in terms invites

global tenders and bidders from national and international firms of Class-1 registration having innumerable works in hand in any time

of the year, can participate in the bidding process if they are having proof of financial soundness. And also it is to be mentioned here that

the clause for applicability of said act has not been laid down in the terms and condition of the SBD for the said project since its

irrelevant for the instant case.

It is also imperative to mention that all the alleged four works already in hand of respondent no.6 are below Rs.10.00 Cr. in amount as

placed by the complainant firm wherein it might be relevant for the said act. But for projects above Rs.10.00 Cr the said act is

irrelevant.â€​

The appellant, in its affidavit, amongst others, had raised a preliminary objection regarding maintainability of the writ petition. It is pleaded that

the petitioner No.2 was appointed as Attorney of the petitioner No.1 on 05.12.2018, much after the approval letter was issued to the appellant,

and as such, he had no connection with the tender process. It is also pleaded that the writ petition is not maintainable on the ground of availability

of alternative remedy. It is further pleaded that the Act and the Rules are not applicable as the project in question is valued more than ` 10 Crores

and also because applicability of the Act was not laid down in the terms and conditions of the SBD. Contention is also put forth that in absence of

any challenge to the letter dated 13.12.2018 by which the appellant was asked to proceed with the work, which is a new cause of action, the writ

petition has become infructuous.

In the reply affidavit filed against the affidavit of respondent Nos.1 & 2, the averments made in the writ petition that the appellant has 4(four)

works in hand is reiterated and it is stated that ‘Form-D’, submitted by the appellant showing 1(one) work, is not correct and rather, it goes

to show that the appellant has 5(five) works in hand. The plea taken in the affidavit that the representation dated 20.11.2018 was rejected is

denied and it is contended that no such communication has been made. It is also stated that the plea taken that 4(four) works in hand with the

appellant is not within Lower Subansiri District and, therefore, they were not taken into consideration, goes against the mandate of the Act and the

Rules.

In the reply affidavit filed against the affidavit-in-opposition filed by the respondent Nos.4 & 5, while reiterating the applicability of the Act and

the Rules, it is stated that ground of rejection of the bid of the petitioner No.1 is illegal and arbitrary, besides being opposed to public interest. It is

contended that the CPWD Manual is merely for the purpose of guidance and not mandatory and in that context Clause 11 of the General Rules

and Directions is relied upon. It is asserted that the rate quoted by the petitioner is not only executable but also profitable and there is no

justification for presuming that if the work was allotted to the petitioner, it will not be able to achieve quality work, more so, when tender conditions

provide for proper quality control measures.

The learned Single Judge observed that the primary question which has to be decided in the writ petition is the applicability of the Act and the

Rules when the estimated project cost is above ` 10 Crores. The learned Single Judge relied on Sections 2(b), 3(1) & 5 along with the Schedule of

the Act as well as Rules 3 & 4 of the Rules and having taken note of the case projected by the petitioner that the appellant has 4(four) works in

hand, which had not been denied either by the appellant or by the State respondents, held that approval of the bid of the appellant is in clear

infraction of the mandate of Rule 4(ii)(e) of the Rules. The learned Single Judge rejected the contention advanced on behalf of the appellant that

applicability of the Act and the Rules having not been specified in the NIT or the SBD, the Act and the Rules cannot be applied in view of the fact

that the Court has no power to amend the terms of the contract or to add words to tender documents, by holding that it was not a case of

adding/altering/reading any restrictions and conditions but it is a case of infraction of the mandate of law and as such, non-mentioning of the same in

the NIT or SBD would be of no consequence.

Mr. Laxminarayan, learned senior counsel for the appellant has submitted that the writ petition was not maintainable as the financial bid of the

petitioner being 15.67% below the estimated price could not have been considered in terms of Clause 20.4.3.2 of the CPWD Manual and was, in

fact, not considered and, therefore, such an invalid bidder could not have questioned the allotment of work awarded to the appellant and this

aspect of the matter was not considered by the learned Single Judge. He further contends that as the petitioner had also not assailed rejection of its

bid and had not prayed for any consequential direction, the learned Single Judge ought not to have gone into the question as to whether the Act

and the Rules apply to a project, which is above `10 Crores. By placing reliance on an additional affidavit filed at the appellate stage, Mr.

Laxminarayan submits that even the petitioner had more than the permitted number of works, as contended by it, under the Act at the time of

institution of the writ petition and, therefore, it could not have, even otherwise, raised the plea that the tender of the appellant ought to have been

rejected as it had more than the permissible number of contracts at hand. It is submitted that preferences under Section 3(1) of the Act is available

pertaining to and in respect of any project works up to ` 10 Crores and not above ` 10 Crores. Thus, not only the preference is restricted up to `

10 Crores but also restrictions under the Rule 4(i)(e) is limited to project amount up to ` 10 Crores as mentioned in the Schedule and the Rules.

The preferences provided under the statute and the restrictions under Rule 4(ii)(e) are applicable to the indigenous Arunachal Contractors

domiciled and who are registered under Arunachal Pradesh Contractors Enlistment Rules, 2008, as amended, and it will be significant to note that

the Schedule of Works under the Arunachal Pradesh Contractors Enlistment Rules of 2008, as on the date of NIT, i.e. 12.09.2018, did not

exceed ` 10 Crores in respect of any work, he submits. It is submitted that the tendering authority had understood that the Act and the Rules are

not applicable in the instant NIT and, therefore, its view has to be respected as the employer or the authority is the best judge of the terms and

conditions of the NIT. In absence of any reference to the applicability of the Act and the Rules in the NIT and the SBD, evaluation of the tender

document had to be made on the basis of the terms and conditions as incorporated in the NIT and the SBD. He has submitted that under serial

No.6 of the Schedule, all registered contractors in Class-I and contractors eligible for national and international competitive bidding has been

included and if preference is also read into in serial No.6, the same will result in two classes of bidders, namely, Arunachal Pradesh District Based

Indigenous Contractors with more than 3(three) contracts, who would stand disqualified while at the same time, no such disqualification would be

incurred by any contractor who is from outside the territory of Arunachal Pradesh, which is not permissible in law. He has further submitted that

even if this Court holds that the Act and the Rules are applicable to the instant NIT, having regard to the fact that more than 10(ten) months have

already elapsed from the date of approving the contract in favour of the appellant, award of work in favour of the appellant may not be interfered

with as it will adversely affect public interest. He places reliance on the following judgments: (i) Central Bank of India Vs. Ravindra & Ors.,

reported in (2002) 1 SCC 367, (ii) Raunaq International Limited Vs. IVR Construction Limited & Ors., reported in (1999) 1 SCC 49, 2(iii) A

decision of the learned Single Judge dated 09.05.2017 in M/s Jumke Store Vs. Government of Arunachal Pradesh & Ors., (iv) Judgment dated

09.04.2019 in Caretel Infotech Limited Vs. Hindustan Petroleum Corporation Limited & Ors., (v)S terling Computers Limited Vs. M/s M & N

Publications Limited & Ors., reported in (1993) 1 SCC 445, (vi) Calcutta Gas Company Limited Vs. State of West Bengal & Ors., reported in

AIR 1962 SC 1044, (vii) Dr. Rai Shivendra Bahadur Vs. Governing Body of the Nalanda College, reported in AIR 1962 SC 121,0 (viii) Tejas

Constructions & Infrastructure Private Limited Vs. Municipal Council, Sendhwa, reported in (2012) 6 SCC 46,4 (ix) Monarch Infrastructure

Private Limited Vs. Commissioner, Ulhasnagar Municipal Corporation & Ors., reported in (2000) 5 SCC 28,7 (x) Silppi Constructions

Contractors Vs. Union of India & Ors., decided on 21.06.2019 in SLP(C) No.13802-13805/2019 and (xiM) unicipal Corporation, Ujjain &

Anr. Vs. BVG India Limited & Ors., reported in (2018) 5 SCC 462.

Mr. I. Choudhury, learned Senior counsel appearing for the petitioner has supported the reasoning assigned by the learned Single Judge while

allowing the writ petition. He has submitted that a bare perusal of the Act and the Rules make it abundantly clear that no registered contractor

domiciled in Arunachal Pradesh could have been granted award of construction work if he has more than 3(three) contracts at hand at the time of

submission of the bid. That the appellant has 4(four) contracts had not been denied but it had indicated only 1(one) work in Form-D, which is a

suppression of material fact. He had submitted that neither in the affidavit filed by the State respondents nor in the affidavit of the appellant a

categorical stand had been taken that the Act and the Rules are not applicable in the instant case. He has contended that it is not necessary to

indicate applicability of the Act enacted by a Legislature and the Rules framed thereunder in the NIT or SBD and, therefore, the argument

advanced that in absence of any disclosure made in the NIT or the SBD regarding applicability of the Act and the Rules, the Act and the Rules

cannot be made applicable, is totally misconceived. He has articulated that the petitioner had approached the Court questioning the very

acceptance of technical bid of the appellant as well as the approval of the work in favour of the appellant and, therefore, not challenging the order

allowing the appellant to proceed with the work will not be of any consequence as it is a subsequent event which occurred after filing of the writ

petition. He has submitted that the non-acceptance of the bid of the petitioner despite it being the L1 bidder was called into question in the

affidavit-in-reply filed to the affidavit-in-opposition of respondent Nos.4 & 5. By placing reliance on the reply affidavit filed to the additional

affidavit filed by the appellant during the pendency of the appeal, it is submitted that it is absolutely incorrect that the petitioner had also more than

3(three) contracts in hand. The serial No.1 of the work alleged to be with the petitioner was completed way back on 30.10.2011 while serial

No.3 was awarded to one M/s T.K. & Sons Enterprise. The petitioner, according to Mr. Choudhury, had only 1(one) work, i.e. serial No.2, as

indicated by the appellant and the work at serial No.4 was awarded to the petitioner during the pendency of the writ petition and thus, presently it

has only 2(two) works in hand. He also relies on the judgment of Raunaq International Limited (supra).

Mr. S. Saikia, learned Additional Advocate General, Arunachal Pradesh adopts the argument of Mr. Laxminarayan.

In reply, it is submitted by Mr. Laxminarayan that Form-D was submitted to demonstrate that it had the eligibility to participate in the NIT and

the contention advanced to the contrary by Mr. I. Choudhury is misconceived.

We have considered the submissions advanced by the learned counsel for the parties and have perused the materials on record.

Before proceeding any further, it would be appropriate to take note of the judgments cited at the bar so as to enable us to appreciate the

contentions advanced in the light of the observations made therein.

In Raunaq International Limited (supra), the Hon’ble Supreme Court had laid down that any judicial relief at the instance of a party, which

itself does not fulfil the requisite criteria, is misplaced. In Sterling Computers Limited (supra), the Hon’ble Supreme Court while examining the

scope of judicial review, had observed that while the Court cannot examine the details of the terms of the contract which have been entered into by

the public bodies or the State, it can examine whether decision making process was reasonable, rational, not arbitrary and violative of Article 14 of

the Constitution of India. It was also observed that by way of judicial review, however, the Court is not expected to act as a Court of appeal. The

Hon’ble Supreme Court also impressed upon the need for the Courts to be conscious of the urgency of disposal of cases relating to award of

contracts where interim orders had been passed as costs of project keep on escalating with passage of time and public in general are deprived of

the benefit of the project. Monarch Infrastructure Private Limited (supra) also dealt with scope of judicial review and in that context, it was

observed that while public interests is paramount in respect of award of contract, there should be no arbitrariness in the matter of award of

contract and that all participants in the tender process should be treated alike. Tejas Constructions & Infrastructure Private Limited (supra) is also

a case where scope and approach to be adopted in the process of any judicial review in respect of a challenge to the award of a project work was

considered. In Calcutta Gas Company Limited (supra), the Hon’ble Supreme Court had noted that existence of a right is the foundation of

exercise of the jurisdiction of the Court under Article 226 of the Constitution of India. In Dr. Rai Shivendra Bahadur (supra), it was laid down that

where a petitioner has not shown that he has any right in the subject matter of dispute, he cannot come to Court and ask for a writ to issue. In

Silppi Constructions Contractors (supra), the Hon’ble Supreme Court, after considering a number of decisions on the subject of judicial

review including Municipal Corporation, Ujjain (supra) and Caretel Infotech Limited (supra), has observed that essence of the law laid down is

exercise of restrain and caution. In matters in the realm of contract, a tendering authority is not required to give reasons as to why a tender is

rejected as the decision to that effect is neither a judicial nor quasi-judicial and that if reasons are to be given at every stage, then the commercial

activities of the State would come to a grinding hall. It is also observed that the authority which floats the contract or tender, and has authored the

tender documents is the best judge as to how the documents have to be interpreted. In M/s Jumke Store (supra), which is also a case relating to

grant of contract in the State of Arunachal Pradesh, a learned Single Judge of this Court, relying upon Clause 20.4.3.2 of CPWD Manual, 2014,

did not find any infirmity in rejection of the bid of the petitioner on the ground that his bid was 16% below the estimated cost. At Clause 18 of the

NIT, that was subject matter of the aforesaid case, clear intent was given regarding applicability of the Act. In Central Bank of India (supra), the

Hon’ble Supreme Court had observed that the use of the word “such†as an adjective prefixed to a noun is indicative of the

draftsman’s intention that he is assigning same meaning or characteristic to the noun as has been previously indicated or that he is referring to

something which has been said before.

Copy of the comparative statement is annexed to the affidavit of respondent Nos.4 & 5 as Annexure-2. The remarks column reads as under:-

“After scrutiny, it is found that the rates quoted by M/s N.T. Enterprises, L1 is 15.67% below and rates quoted by M/s Tama

Fabrication Works, L2 is below 2.61% of the estimated cost put to tender. The rates quoted by L2 is well within the permissible variation

of 5% as per clause 20.4.3.2 of CPWD Manual, 2014. Hence, L2 is recommended for approval please.â€​

The information and instruction for bidders for e-tendering forming part of the bid document set down the requirements. The intending bidders

were asked to read the terms and conditions of the CPWD-6 carefully and were advised to submit tender only if one considers himself eligible and

is in possession of all the documents required. Clause 20.1.2 of the CPWD Manual makes it clear that bid document will include, amongst others,

Standard General Conditions of Contract for CPWD 2014 as amended/modified up to December, 2017.

Para 20.4.3 of CPWD Manual reads as under:

“20.4.3Reasonability and competiveness of rates:

The tender accepting authority shall satisfy himself about the reasonability of rates before acceptance of the tenders. Reasonability of

rates shall primarily be assessed on the basis of justified rates. The mode of preparation of justified rates is detailed in the following para

20.4.3.1. Permissible variation over the justified rates are given in para 20.4.3.2.â€​

Para 20.4.3.2 reads as follows:

“20.4.3.2 Acceptance of tenders at justified rates with allowable variations:

Apropos provisions under para 20.4.3 variation upto 5% over the justified rates may be ignored. Variation upto 10% may be allowed for

peculiar situations and in special circumstances. Reasons for doing so shall be placed on record. Tenders above this limit should not be

accepted.â€​

Though contention is urged on behalf of the appellants in both the cases that the writ petition was not maintainable, having regard to the stage

of the decision making process pertaining to the NIT in question in which the writ petition was filed, it could not have been held at the threshold

that the writ petition was not maintainable as the petitioner was also a tenderer. At that stage, the bid of the petitioner had not come on record of

the case. We are, however, alive to the decision rendered in M/s Jumke Store (supra), where a learned Single Judge of this Court did not interfere

with the rejection of a tender where the bid value was quoted 16% below the estimated price. In view of the above judgment, the State

respondents could certainly reject a tender where bid value quoted is less than 15.67%.

The writ petition was filed on 07.12.2018. There is no averment in the writ petition that the petitioner was not aware of the comparative

statement, which disclosed that despite the petitioner being L1 bidder, recommendation was made for approval of the work in favour of the

appellant as the rate quoted by the appellant was within the permissible variation of 5% as per Clause 20.4.3.2 of CPWD Manual, 2014 while the

rate quoted by the petitioner was 15.67% below. Even if it is assumed that the petitioner was not aware of the fact that the petitioner had emerged

as L1 bidder at the time of filing of the writ petition, there is no escape from the conclusion that after the comparative statement was annexed in the

affidavit of the respondent Nos.4 & 5, the petitioner had become aware of that fact. In a matter of the present nature relating to award of contract

in respect of a public road, it is necessary for a petitioner invoking writ jurisdiction to set out specifically the reliefs claimed. The petitioner did not

amend the writ petition to incorporate any challenge for rejecting the bid of the petitioner. Even though submissions have been made during the

course of the argument by Mr. I. Choudhury that rejection of the bid of the petitioner was illegal and arbitrary as CPWD Manual, 2014 applies

only to a situation where a bid is above 5% or 10%, at the most, over the estimated price and not when the bid is lower than 5% or 10% of the

estimated price, there is no pleading to that effect. Even in the affidavit-in-reply to the affidavit of the respondent Nos.4 & 5, no specific ground is

taken as to why the rejection was illegal and arbitrary, save and except stating that the CPWD Manual, 2014, is only a guideline. If a challenge

was mounted in accordance with law regarding rejection of the bid and a finding was recorded against the petitioner, it may have been open to the

petitioner to assail the rejection as well as to question the decision rendered in M/s Jumke Store (supra). In the above background, we do not

consider it necessary to make any further discussion on Clause 20.4.3.2 of the CPWD Manual. It appears that the decision in M/s Jumke Store

(supra) was not brought to the notice of the learned Single Judge. Though submission was articulated on behalf of the appellant that petitioner

having been disqualified in the financial bid, the writ petition was not maintainable and no relief can be granted to such a petitioner, this aspect of

the matter was not at all considered by the learned Single Judge. On the principle that existence of a right is the foundation of exercise of the

jurisdiction of the Court under Article 226 of the Constitution of India and when a petitioner has not shown that he has any right in the subject

matter of dispute, he cannot come to Court and ask for a writ to issue, the petitioner having not assailed the rejection of his bid, further probe on

the contentions raised by such a petitioner would not have been really called for [Calcutta Gas Company Limited (supra) and Dr. Rai Shivendra

Bahadur (supra)].

For the record, we have to mention that we do not find force in the contention of Mr. Laxminarayan that the petitioner had more than 3(three)

contracts in hand at the time of submission of tender.

However, since the learned Single Judge has dealt with the question of applicability of the Act and the Rules to the NIT in question, we deem it

appropriate to consider the issue notwithstanding the fact that at the instance of the petitioner, such issue need not have been gone into.

It appears that only 2(two) tenderers, i.e. the appellant and the petitioner, according to the State respondents, had qualified in the technical bid.

In other words, there are no other tenderers in fray who were found eligible for consideration of their financial bid.

Unlike in M/s Jumke Store (supra), in the instant NIT, applicability of the Act and the Rules are not mentioned. Though Mr. Laxminarayan has

submitted that in absence of any indication regarding applicability of the Act and the Rules in the NIT, the provisions of the Act and the Rules could

not have been implied, we do not find merit in such contention. If a law applies, it need not be reiterated in an NIT. However, it goes without

saying that terms and conditions have to be specifically and precisely spelt out in the NIT and no hidden criteria can be adopted at the time of

evaluation of tender.

The Act was enacted to provide an incentive to ensure greater participation by District Based Entrepreneurs and Professionals as a part of

Government Policy, thereby facilitating decentralization of developmental activities with greater participation of people from nook and corner of the

State of Arunachal Pradesh to build a society of people with uniform social and economical status in the State and matter connected therewith and

incidental thereto.

Section 2(b) defines “District Based Entrepreneurs and Professionals†to mean and include any person, who is involved in activity of

execution of development and welfare project of the Government and includes Architects, Engineers, Contractors, Doctors, etc., but does not

include any Government Official. The person must be a local person having Arunachal Pradesh domiciled certificate and must be a permanent

resident of the district concerned. Heading of Section 3 is “Preference to District Based Entrepreneurs and Professional†and Section 3(1)

states that the State Government shall, in its development and welfare oriented projects in a district give preference to the District Based

Entrepreneurs and Professionals to secure equitable distribution of State developmental work among different categories of entrepreneurs in

project works up to or involving such amount as prescribed in the Schedule thereto. Section 3(2) enables the State Government to lay down such

other norms as may be prescribed in this behalf for effective implementation of promotional schemes. Section 5 provides for power to make Rules

and it states that the State Government may, by a notification, make Rules for all or any of the provisions of the Act for carrying out the provisions

of the Act. Schedule referred to in Section 3(1) is reproduced herein below:-

 SCHEDULE

Sl. No Cost of Works Eligibility of Contractors

1 2 3

Upto ` 50.00 lakh All registered contractors in Class V

and IV categories domiciled within the

territorial jurisdiction of Community

Block.

Above ` 50.00 lakh and upto ` All registered contractors in Class IV

1.00 crore and III categories domiciled within the

territorial jurisdiction of Assembly

Constituency.

Above ` 1.00 crore and upto ` categories domiciled within the

3.00 crore territorial jurisdiction of Assembly

Constituency.

Above ` 3.00 crore and upto ` All registered contractors in Class II

5.00 crore categories domiciled within the

territorial jurisdiction of Assembly

Constituency

Above ` 5.00 crore and upto ` All registered contractors in Class I

10.00 crore categories domiciled within the

territorial jurisdiction of the District

Above ` 10.00 crore All registered contractors in Class I and

contractors eligible for National and

International Competitive Bidding.

The Schedule extracted in the judgment in Paragraphs 31 and 32 are not the correct reproduction of the Schedule.

Section 3(1) of the Act itself makes it very clear that preference will be given to District Based Entrepreneurs and Professionals in project

works up to or involving such amount as prescribed in the Schedule thereto. In other words, preference will not be given in respect of all project

works to be undertaken by the Government of Arunachal Pradesh. What is important is to notice that in respect of serial Nos.1 to 5, all registered

contractors, whether in Class V, Class IV, Class III, Class II or Class I are qualified by the expression “domiciledâ€, either within the territorial

jurisdiction of the Community Block, Assembly Constituency or the District, as the case may be. So far as serial No.6 is concerned, which is in

respect of cost of works above ` 10 Crores, the word “domiciled†is conspicuously absent. In respect of serial No.6, all registered

contractors in Class I and contractors eligible for National and International Competitive Bidding are eligible. A perusal of the Schedule, as

referred to in Section 3(1) and, which is reproduced hereinabove, thus, goes to show that preferences are to be given only to serial Nos.1 to 5 in

the manner as indicated therein. Thus, preference is to be given in project works up to ` 10 Crores to contractors in different Classes based on

cost of works as indicated therein and in respect of serial No.6, which is cost of works above ` 10 Crores, no preference is envisaged to any

Class of registered contractors domiciled in Arunachal Pradesh.

A question may be posed then why serial No.6 is at all given in the Schedule. The answer to that question lies in the fact that the preferences

that are sought to be given under the Act have been indicated under the heading

“Eligibility of Contractorâ€. It is in that sense that Clause 6 finds place in the Schedule to make it clear that so far as cost of works above ` 10

Crores is concerned, all registered contractors in Class I and contractors eligible for National and International Competitive Bidding, are eligible.

The Rules were notified on 13.08.2015. Subsequently, by a Notification dated 01.08.2015 published in the August, 14, 2018 Arunachal

Pradesh Gazette (Extraordinary), Rule 4(ii)(e) was amended. We will deal with the aforesaid aspect of the matter a little later.

Rule 3 prescribes that the Rules shall be mandatorily applied to all works undertaken by various agencies, Departments under the Government

of Arunachal Pradesh including, amongst others, the Public Works Department. Rule

4 incorporates the Schedule under Section 3 of the Act. Rule 4(ii) provides that the contractors/entrepreneurs before participating in tenders must

satisfy the conditions enumerated under Clauses (a) to (g). In the context of the present proceedings, it will be appropriate to extract herein-below

Rule 4(ii)(e), (f) & (g) of the Rules. They read as under:-

“(e) In the larger interest of the public and for equitable distribution of developmental works amongst eligible contractors and also to

ensure effective management and quality of works, a contractor shall be allowed to have only 2(two) works in hand in any of

departments under Government of Arunachal Pradesh at a time and for which he shall make a declaration to be executed in an Affidavit

that he is not engaged in more than two any tenders works under the State Government. He shall also, for participation in any tender be

required to submit completion certificate issued by the Engineer-in-Charge, duly counter signed by the concerned Superintending

Engineer and Chief Engineer.

(f) In the event of inadequate response to a tender invited at block level/Assembly Constituency level, the eligible contractor of adjacent

block/Assembly Constituency within the district shall be eligible to participate in the subsequent call of that tender.

(g) In the event of inadequate response to a tender invited at District level tender for an amount of ` 5 crore to ` 10 crore, all eligible

indigenous of Arunachali contractor domiciled and registered under Arunachal Pradesh Contractors Enlistment Rules, 2008 shall be

eligible to participate in the subsequent call of that tender and if the cost of works is above 10 crore, all the registered contractors in

Class I and contractors shall be eligible to participate.â€​

The amended Rule (e) is also reproduced herein below:-

“(e) In the larger interest of the public and for equitable distribution of developmental works amongst eligible contractors and also to

ensure effective management and quality of works, a contractor shall be allowed to have only 3(three) works in hand in any of

departments under Government of Arunachal Pradesh at a time instead of existing 2(two) Nos. of any tender work under the State

Government and for which he shall make a declaration to be executed in an Affidavit that he is not engaged in more than two tender

works under the State Government. He shall also eligible for participation in any tender be required to submit completion certificate

issued by the Engineer-in-Charge duly counter signed by the concerned Superintending Engineer and Chief Engineers.â€​

Rule 4(ii)(e), as it originally stood, provided that a contractor shall be allowed to have only 2(two) works in hand in any of the departments

under Government of Arunachal Pradesh at a time. By the amendment of Rule 4(ii)(e), it is provided that a contractor shall be allowed to have only

3(three) works in hand in any of Departments under the Government of Arunachal Pradesh at a time instead of existing 2(two) numbers of any

tender work under the State Government. Clause 4(ii)(f) provides that in the event of inadequate response to a tender invited at Block

level/Assembly Constituency level, the eligible contractor of adjacent Block/Assembly Constituency within the district shall be eligible to participate

in the subsequent tender. Clause 4(ii)(g) lays down that in the event of inadequate response to a tender invited at District level for an amount of ` 5

Crores to ` 10 Crores, all eligible indigenous Arunachali contractors domiciled and registered under the Arunachal Pradesh Contractor Enlistment

Rules, 2008 shall be eligible to participate in the subsequent call of the tender.

There appears to be some mistake in the sentence “if the cost of works is above 10 Crores, all the registered contractors in Class I and

contractors shall be eligible to participateâ€, as appearing in Rule 4(ii)(g) as it does not convey any meaning. A perusal of the above provisions

would go to show that in the event of inadequate response at Block/Assembly/District level, the preference otherwise available to a registered

contractor in Block/Assembly/District is extended to adjacent Block/adjacent Assembly Constituency/all eligible indigenous contractor domiciled

and registered under the Arunachal Pradesh Contractor Enlistment Rules, 2008.

A perusal of the averments made in the affidavit of the State goes to show that a stand has been taken that the Act and the Rule are not

relevant since the amount of the project is more than ` 10 Crores. Though Mr. I. Choudhury has laid emphasis that the State has not in clear terms

denounced applicability of the Act and the Rules, we are of the considered opinion that by using the expression “not relevantâ€, it is sought to

be conveyed that the Act/Rule will not apply as the project is more than ` 10 Crores. We have already held that the Act itself does not envisage

grant of any preference in respect of contracts value of which is ` 10 Crores and above.

The Act does not provide for any limitation or restriction in respect of number of works in hand of a contractor for the purpose of getting

allotment of work. As noticed earlier, avowed objective of the Act is to give preference to the District Based Entrepreneurs and Professionals

among different categories of entrepreneurs in project works of different amounts up to or involving ` 10 Crores. Section 5 of the Act provides that

State Government may make Rules for carrying out provisions of the Act. It is well known that Rules framed under an Act cannot travel beyond

the provisions of the Act. Bearing in mind the objective of the Act, the import and purport of Rule 4(ii)(e) has to be understood. When the Act

itself does not apply to cost of works above ` 10 Crores, the Rules cannot be made applicable to cost of works above ` 10 Crores. The Rules

have to be confined in its application to works in respect of which preference is contemplated under the Act. Therefore, the stipulation that a

contractor shall be allowed to have only 3(three) works in hand at a time in Rule 4(ii)(e) would be in respect of serial Nos.1 to 5 of the Schedule

to the Act and not to serial No.6 of the Act.

In view of the above discussion, we are of the considered opinion that the judgment & order of the learned Single Judge cannot be sustained in

law. Accordingly, the impugned judgment & order dated 12.06.2019 is set aside and quashed. The appeals are allowed. Consequently, the writ

petition is dismissed. No cost.