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SUPREME COURT OF INDIA
BELA M. TRIVEDI, PANKAJ MITHAL, JJ.
Level 9 BIZ Pvt. Ltd.. – Appellants
VERSUS
Himachal Pradesh Housing And Urban Development Authority & Another – Respondents
Civil Appeal No. 4626 of 2024 (@ Special Leave Petition (C) No.23319 of 2022)
Decided On : 02-04-2024
Government Contract – Tender – Letter of Intent is merely an expression of intention to enter into a contract – It does not create any right in favour of party to whom it is issued – There is no binding legal relationship between party issuing LOI and party to whom such LOI is issued – Detailed agreement/contract is required to be drawn up between parties after LOI is received by other party more particularly in case of contract of such a mega scale – In present case, respondent no. 1 in collusion with respondent no. 2, had taken High Court for a ride and misused process of law for covering up irregularities and illegalities committed in tender process by officers of respondent no. 1, and for anyhow awarding contract to respondent no. 2 under guise of court’s order – Impugned order has been passed without proper application of mind and without assigning any cogent reason for brushing aside findings recorded by Independent Committee – Impugned order passed by High Court set aside – Appeal allowed with cost of Rs. 5,00,000/- to be deposited by respondent no. 1 HIMUDA with Supreme Court Advocates-on-Record Association, within two weeks – However, respondent no.1 given liberty to initiate fresh tender process in accordance with law and after following due process of law. (Paras 10, 12, 13 and 14)
Facts of the case:
Question that has been posed in the instant appeal is, whether High Court could have disposed of the CWP filed by respondent no. 2 by simply accepting the statements made on behalf of Advocates for respondent no. 1 and respondent no. 2, virtually permitting the respondent no.1 HIMUDA to withdraw cancellation of initial tendering process order dated 05.02.2021 and permitting the respondent no. 2 M/s Vasu Constructions to execute project on the same terms and conditions and at the rates as per initial tender dated 15.11.2018, though the said tender was already withdrawn by Respondent No.1 HIMUDA.
Findings of Court:
Respondent no.1 HIMUDA, though ‘State’ within the meaning of Article 12 of the Constitution of India, had acted malafide and in collusion with respondent no.2, and had taken the High Court for a ride, present appeal deserves to be allowed with heavy cost.
Result : Appeal allowed with costs.
JUDGMENT
BELA M. TRIVEDI, J.
1. Leave granted.
2. The Appellant – Level 9 BIZ Pvt. Ltd., who was not a party to the proceedings, being Civil Writ Petition No. 1481 of 2021, filed by the Respondent No.2 – M/s. Vasu Constructions in the High Court of Himachal Pradesh at Shimla, has challenged the impugned order dated 18.10.2022 passed by the High Court in the said proceedings. The High Court passed the impugned order disposing of the said CWP by merely accepting the statement made on behalf of the Respondent No.1 – Himachal Pradesh Housing and Urban Development Authority (HIMUDA) that it wanted to withdraw the cancellation of initial tendering process order dated 05.02.2021, and the statement made on behalf of the Respondent No. 2 that it was ready to execute the project on the same terms and conditions and the rates as per the initial tender dated 15.11.2018, though the said tender was already withdrawn by the Respondent no. 1 HIMUDA in view of the irregularities and illegalities committed by it, as recorded by an independent committee appointed by the High Court in earlier writ petitions filed by the present appellant and one Dalip S. Rathore.
3. The broad facts giving rise to the present appeal may be stated as under: -
| DATES | EVENTS |
| 15/16.11.2018 | Notice Inviting Tender (NIT) was issued by HIMUDA (R-1) for the construction of proposed commercial complex of Vikas Nagar, Shimla, at estimated cost of Rs.45,05,62,074/- |
| 15.12.2018 | Technical Bids were opened and on the same day Financial Bids were also opened. (Appellant & R-2 were the only found to be qualified – But the Appellant was L2) |
| 17.12.2018 | LOI was issued by the R-1 in favour of R-2. |
| 24.12.2018 | One Unsuccessful bidder Dalip S Rathore filed Writ Petition being CWP 3021 of 2018 challenging the technical specifications & ineligibility of Respondent No.2, also seeking cancellation of the Tender. The High Court issued notice. |
| 02.01.2019 | R-1 HIMUDA withdrew the LOI dated 17.12.2018 of R-2 M/S Vasu Constructions stating that the case is pending in the High Court and the work will be awarded only as per the decision of the High Court. |
| 05.01.2019 | R-1 HIMUDA constituted a committee, which reviewed the tender process and concluded that there were many lapses which warranted actions against the erring officials. |
| 07.01.2019 | Another Committee constituted by R-1 submitted a report that Shri Dalip Singh was not qualified and M/s. Vasu Constructions was qualified. |
| 23.02.2019 | Appellant – Level 9 BIZ Pvt. Ltd. filed a writ petition CWP 363 of 2019, praying for rejection of Technical Bid and Financial Bid of the R-2 M/s. Vasu Constructions |
| 25.11.2020 | High Court passed a detailed order on 25.11.2020 in CWP No. 3021/2018 and 363/2019. In Para 29 High Court observed- “[..] this Court is prima facie of the view that some of the officers manning high positions in HIMUDA have not acted responsibly and in the interest of organization, rather have attempted, directly or indirectly, to give undue benefit to some of the contractors. Having seen the record, this Court is compelled to draw a conclusion that the officers responsible for evaluation of the tender in question, did not scrutinize the documents submitted by the tenderers along with their bids properly and, with a view to ensure ouster of some eligible contractors and awarding the same to their favourites, have made an attempt to justify their action by giving totally implausible reasoning.” In para 31, High Court observed- “But, for the reasons, best known to the authority, it still proceeded to award the tender in favour of M/s. Vasu Construction Company.” The High Court therefore to instill confidence in the general public and to ensure transparency in the system, constituted an independent committee to enquir |
Government Contract – Tender – Letter of Intent is merely an expression of intention to enter into a contract – It does not create any right in favour of party to whom it is issued – There is no bind....
Point of Law : when a bidder who has not been issued the final acceptance of the bid by the competent authority being the highest bidder acquires no vested right ,but the bidder has right to equality....
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