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2024 Supreme(Bom) 1090

IN THE HIGH COURT OF BOMBAY, AURANGABAD BENCH
Vibha Kankanwadi, S. G. Chapalgaonkar, JJ.
Yash Engineers - Petitioner
Versus
The State of Maharashtra and ors - Respondents
Writ Petition No.9834 of 2022
Decided On : 15-04-2024

Advocates:
Advocate Appeared:
For the Petitioner: Mr. V. D. Sapkal, Senior Counsel i/b Mr. J. J. Patil
For the Respondent:Mr. V. M. Jaware, AGP, Mr. A. G. Vasmatkar, Advocate, Mr. M. M. Patill (Beedkar), Advocate, Mr. S. S. Deshmukh, Advocate

Judicial review in administrative actions, particularly in tender matters, is limited to preventing arbitrariness and ensuring compliance with law, not to adjudicate contractual disputes.

Headnote:(A) Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - Section 308 - Writ petition for quashing order of Collector and resolutions of Nagar Panchayat regarding Detailed Project Report (DPR) - Petitioner sought extension for DPR approval and payment for work done - Court held that the petitioner failed to demonstrate violation of law or principles of natural justice - The General Body meeting's decision to cancel the contract was upheld. (Paras 3, 11, 15)

(B) Judicial Review - Scope of judicial review in administrative actions - Courts should refrain from interfering in tender matters unless there is clear evidence of mala fides or arbitrariness affecting public interest. (Paras 13, 14)

Facts of the case:
The petitioner challenged the cancellation of a contract for preparation of a DPR for a water supply scheme, alleging non-cooperation from the Nagar Panchayat and seeking payment for work done. The Nagar Panchayat contended that the petitioner failed to complete the work within the stipulated time and that the decision to cancel the contract was justified.

Findings of Court:
The court found that the petitioner did not establish any legal grounds for interference with the resolutions passed by the Nagar Panchayat and upheld the decision to cancel the contract.

Issues: The main issues included whether the petitioner was denied natural justice and whether the resolutions passed by the Nagar Panchayat were lawful.

Ratio Decidendi: The court ruled that the petitioner did not provide sufficient evidence of legal violations or procedural improprieties, and emphasized that judicial review in tender matters is limited to preventing arbitrariness and ensuring public interest.

Result: Writ petition dismissed.

JUDGMENT :

Vibha Kankanwadi, J.

Rule. Rule made returnable forthwith. Heard learned Advocates for the appearing parties finally by consent.

2. The present petition has been filed for quashing and setting aside the order dated 29.06.2022 passed by respondent No.2 Collector, Jalgaon and to set aside the Resolution No.4, 5 and 14 dated 01.10.2020 passed in the General Body Meeting of respondent No.4 Nagar Panchayat and consequential intimation letter dated 13.10.2020, so also to set aside the work order and agreement dated 22.07.2021 issued to respondent No.5 by respondent No.4 and to direct the respondent authorities to grant extension of time of six months for getting the DPR plan sanctioned from the competent authority and for direction to respondent No.4 to release the amount of Rs. 59,53,000/- together with interest @18% per annum, as per the tender submitted by the petitioner to respondent No.4.

3. The petitioner has come with the case that respondent No.4 Nagar Panchayat had issued E-tender for preparation of the Detailed Project Report (DPR), Project Management Consultant (PMC) and for the appointment of the consultant for the various projects. The E-tender was specifically for the appointment of the consultant for preparation of DPR, technical sanction and administrative approval from the appropriate authority for the project of water supply scheme and PMC/associate for Augmentation Water Supply Scheme under Maharashtra Suvarn Jayanti Nagarotthan Mahabhiyan (MSJNM). Respondent No.4 by its letter dated 16.02.2018 communicated the petitioner to appear before it on 22.02.2018 for fixation of rates of the tender work. Accordingly, the petitioner gave the rates and submitted its offer price to the tune of 5% of the cost of project for preparation of DPR and PMC. After the negotiations, rate of the tender work was fixed to the tune of 3.5% of the total project cost and the breakup of the said amount was to the tune of 1.85% for preparation of DPR and for PMC work to the tune of 1.40%. The petitioner by letter dated 22.02.2018 communicated its consent for carrying out the work at the said rate. Accordingly, by Resolution dated 07.03.2018 passed by respondent No.4, work was allotted to the petitioner and communication to that effect was given to the petitioner on 27.04.2018. The petitioner was also directed to furnish the bank guarantee to the tune of 2% of the amount i.e. Rs. 2,00,000/-. Accordingly, the bank guarantee was given. As per the terms of the contract, the petitioner was required to complete the said work of DPR between 24.05.2018 to 24.11.2018. Work order came to be issued in favour of the petitioner on 24.05.2018. The petitioner by letter dated 31.05.2018 requested respondent No.4 to provide necessary information to carry out the work, however, respondent No.4 by communication dated 31.07.2018 informed that though the resolution was saying that the work has been sanctioned to the tune of 3.25%, it cannot be granted in view of the Government policy and then the petitioner was asked to execute a fresh contract, whereby he would be entitled for consideration for the preparation of DPR and PMC to the tune of 3% of the project cost. The petitioner had almost done the survey by engaging man power and team of the technical expert as well as huge amount in carrying out that exercise has been invested and, therefore, was left with no option but to accept the communication dated 31.07.2018. Thereafter, petitioner by letter dated 23.08.2018 requested respondent No.4 that the resolution on water reservation should be approved, the water storage tank location information and resolution to that effect should also be approved. The petitioner had also requested respondent No.4 to supply the data in respect of population density of the city. Respondent No.4 passed the resolution on 11.09.2018 in respect of reservation of water for water supply scheme. The petitioner has prepared the detailed plan of reservation for the water supply sch

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