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2014 Supreme(AP) 540

High Court of Andhra Pradesh
RAMESH RANGANATHAN, J
C.S.R. Infratech India Private Limited
Versus
The Government of Andhra Pradesh rep., by its Secretariat, TR & B, Secretariat, Hyderabad & Others
Writ Petition No. 204 of 2014
Decided on: 02-06-2014

Advocates:
Advocate Appeared
For the Petitioner:C. Vani Reddy, Advocate.
For the Respondents:GP for Roads & Buildings, A. Sanjeev Kumar, Advocate.

Tender conditions must be coherent, clear and precise.

Headnote:(A) Government Contract—Judicial Review—Award of 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. Commercial transactions, of a complex nature, involve balancing and weighing of all relevant factors and a final decision is taken on an overall view of the transaction---State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though their decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness—State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned.

       (B) Government Contract—Judicial Review—When power of judicial review is invoked, in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. The limited scope of judicial review by the High Court envisages examination of the question whether there is any material irregularity in the decision making process or whether the decision to reject the tender is irrational, unreasonable or arbitrary. If the decision relating to the award of contract is bonafide and in public interest, Courts will not interfere even if a procedural aberration or error in assessment or prejudice to a tenderer is made out. The power of judicial review will not be invoked to protect private interest at the cost of public interest or to decide contractual disputes---Tenderer or a contractor with a grievance can always seek damages in a civil court.

JUDGMENT

The relief sought for in this Writ Petition is to declare the action of the respondents, in disqualifying the petitioner by letter dated 27.12.2013 from being awarded the work of “improvement of Kandukuru – Pamuru Road from KM 19/8 to 34/0 in Prakasam District” as per tender notification No.NIT No.11940(1)/E-in-C (R&B) R/EE [R]/DEE.5/AEE.2/2013 dated 07.02.2013, as illegal, arbitrary and against the tender conditions. A consequential direction is sought to set aside the proceedings dated 27.12.2013, and to direct the official respondents to open the petitioner’s price bid.

Facts, in brief, are that the 2nd respondent issued an e-procurement notice dated 07.02.2013 inviting bids, for improvements to the Kandukuru – Pamuru Road from KM 19/8 to 34/0 in Prakasam District, at an estimated contract value of Rs.9,87,93,893/-. Amongst the eligibility criteria stipulated thereunder was that the applicants should be registered as a Special Class and Class-I contactor with the Government of Andhra Pradesh; and each bidder should have in its name, as a prime contractor, satisfactorily completed, in any one of the last five financial year ending 31.03.2012, works of a value not less than Rs.4,93,96,947/-. The petitioner was informed on 28.04.2013 that they had been dis-qualified in the prequalification/technical evaluation stage. On enquiry with the 4th respondent, they learnt that they were disqualified for the reason that they had not completed a “similar nature of work” for a value not less than Rs.4,93,96,947/-. The petitioner filed W.P.No.14181 of 2013 before this Court contending that, though they had completed a similar nature of road work as per the value mentioned in the NIT, they were disqualified and the work was awarded in favour of the 5th respondent. This Court, while ordering notice before admission, directed status quo as on that date i.e., 08.05.2013 to be maintained with regards allotment of the work. W.P. No.14181 of 2013 was disposed of, by order dated 19.11.2013, permitting the petitioner to make a representation afresh. The 3rd respondent was directed to consider the said representation, and pass a reasoned order thereupon. The petitioner submitted its representation and the 3rd respondent, by proceedings dated 27.12.2013, informed them that, as they had not produced a completed road work certificate covering all the five components of the subject tendered work, they were not technically qualified for award of the work.

It is the petitioner’s case that as they had executed a similar road work, in one of the five financial year ending 31.03.2012 of a value not less than Rs.4,93,96,947/-, they satisfy the eligibility criteria as per the notification inviting the expression “similar nature of work” can only mean “road works” for the value of Rs.4,93,96,947/-; and, in the absence of any specific stipulation that the road work should contain all the five parameters, the respondents were not entitled to reject their bid at the technical evaluation stage. The petitioner refers to another tender notification dated 12.02.2013 whereby bids were invited for “improvement of Ollapalem - Vemulapadu Road from KM 49/0 to 69/2 in Prakasam District” wherein a similar condition was stipulated that the applicants should have completed works under the road category, in any one financial year ending 31.03.2012, of a value not less than Rs.3,62,93,020/-with minimum quantities of three specifications. The petitioner claims to have submitted their tender with the same experience certificates of 2007-2008, their tender was accepted though all the components were not found in the works, and they were awarded the contract. The petitioner submits that the tender conditions do not stipulate that all the principal components should form part of one work; disqualifying the petitioner on such a ground is illegal and arbitrary; in the present case the official respondents had manipulated the tender conditions, and had interpreted it in an un







































































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