IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.A. Sayed, Abhay Ahuja, JJ.
M/s Kohli Advertising (OPC) Private Limited Through Director Ekamsingh Kohli – Appellant
Versus
The Pimpri Chinchwad Municipal Corporation – Respondent
Writ Petition No. 9714 of 2021 With Writ Petition No. 956 of 2022
Decided On : 13-04-2022
Tender Cancellation - Public Interest - Maharashtra Municipal Corporation Act Section 244, 245 - The court discussed the cancellation of tenders by the Respondent Corporation citing reasons such as the corporation being a smart city, new advertisement schemes for road safety and beautification of the city, and delay in finalizing the tenders. The court found that the decision to cancel the tenders was not arbitrary or unreasonable and was based on valid considerations. The court also emphasized that the public law remedy by way of a Writ Petition under Article 226 of the Constitution is not available to seek specific performance or damages.
Fact of the Case:
The petitioners challenged the cancellation of two E-Tender notices by the Commissioner, Pimpri-Chinchwad Municipal Corporation. The Respondent Corporation cited reasons such as delay in finalizing the tenders, new advertisement schemes for road safety and beautification of the city, and being a smart city for the cancellation.
Finding of the Court:
The court found that the decision to cancel the tenders was not arbitrary or unreasonable and was based on valid considerations. The court emphasized that the public law remedy by way of a Writ Petition under Article 226 of the Constitution is not available to seek specific performance or damages.
Issues: The issues involved the challenge to the cancellation of tenders by the Respondent Corporation, citing reasons such as delay in finalizing the tenders, new advertisement schemes for road safety and beautification of the city, and being a smart city.
Ratio Decidendi: The court held that the decision to cancel the tenders was not arbitrary or unreasonable and was based on valid considerations. The court also emphasized that the public law remedy by way of a Writ Petition under Article 226 of the Constitution is not available to seek specific performance or damages.
Final Decision: The Writ Petitions were dismissed with no order as to cost. The court made it clear that the dismissal of the Writ Petitions shall in no manner influence the investigation of corruption charges or outcome of criminal proceedings, if any. The petitioners were also left at liberty to agitate their claim for damages before an appropriate civil court.
JUDGMENT
Abhay Ahuja, J. - The petitioners in these two petitions are challenging the order dated 8th January 2022 by which the Commissioner, Pimpri-Chinchwad Municipal Corporation has cancelled two E Tender notices viz. E-Tender notice no. 1/1 to 138/2019-20 and E-Tender notice no. 4/1 to 185/201819 allowing the bidders refund of EMD and FDR.
2. The Respondent Corporation had issued the two E-tender notices and invited bids with respect to publication of advertisement by way of sky signs at various sites within its limit. The two petitioners had put in 14 bids respectively and were also selected as the highest bidders in respect each of the 14 bids. Thereafter, they were required to submit security deposits in the form of FDRs as well as submit affidavits and agreements.
3. Mr Kothari, learned counsel for petitioners would submit that Petitioners had submitted the documents including the affidavits as well as the security deposits by way of FDRs in time and had also kept the agreements ready for sealing and that there has been no delay on their part, which is disputed by the Respondent Corporation. He further submits that it is in view of the Anti-Corruption Bureau action leading to the lodging of the FIR by the Petitioners with the National Crime Bureau under various provisions of the Prevention of Corruption Act, 1988 and the Indian Penal Code against the Chairperson of the Standing Committee of the Respondent Corporation also involving certain employees of the Respondent Corporation in connection with the sealing of the agreements from the standing committee with respect to the subject tenders where Petitioners were held to be the highest bidders, that the Respondent Corporation had firstly delayed in the execution of the agreements and secondly failed to issue work orders and has now finally cancelled the tenders during the pendency of the petitions only to frustrate the case of Petitioners. Learned counsel would submit that in this view of the matter, Petitioners have been isolated and their tenders cancelled even without hearing them which is completely in breach of the principles of natural justice.
4. It is submitted that even otherwise the reasons given in the order cancelling the tenders are totally incorrect as there is been neither any delay in the process for more than 3 years nor Petitioners have delayed in submission of agreements or affidavits or in depositing FDRs.
5. It is further submitted that the new outdoor media policy is not even approved by the general body. It is further submitted that the reasons for cancellation of the tender that the same is due to the smart city notification of the Centre and the State is also fallacious as Pune was made a smart city much earlier.
6. Learned counsel for Petitioners would also submit that in both the tender cancellation orders shelter of the tender conditions no. 23/21 and 24 has been taken, which is not permissible in view of the Central vigilance commission guidelines which requires proper reasons to be given for cancelling a tender. He would submit that the said orders are passed only with an intention to frustrate these petitions.
7. Petitioners are therefore seeking a relief that the orders cancelling the tenders be withdrawn and the Respondent Corporation be directed to execute the agreements with respect to the tenders where the petitioners were selected as highest bidders and for issuance of work orders in respect thereof.
8. The Respondent-Corporation has filed its replies dated 13th January 2022 wherein it has opposed the Petitions on following grounds
(i) Non Joinder of Chairperson of the Standing Committee of the Respondent-Corporation, though necessary party to the Petitions.
(ii)The Petitioners' delay in submitting requisite documents requisite documents such as agreement, security deposit (FDRs) along-with Affidavit to the Corporation.
(iii) Petitioners having erected illegal sky signs boards hoardings at 11 sites.
9. With respect to the anti corruption complai
(1) Cancellation of Tender – Sanctity of contracts is a fundamental principle that underpins stability and predictability of legal and commercial relationships – When public authorities enter into co....
A public authority's decision to cancel a tender must be reasoned and not arbitrary; failure to provide justifications exposes such decisions to judicial scrutiny.
The validity of administrative decisions must be judged on the basis of reasons existing on record, and the authority cannot provide new/additional reasons when the Court calls for them as they must ....
Lowest bidder has no vested right to contract; authority may cancel tender for valid reasons like cartel without malice; tender conditions not judicially reviewable unless arbitrary.
Court exercising powers under Article 226 of Constitution of India has jurisdiction to examine decision making process without even going into merits of such decision.
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