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2010 Supreme(Cal) 499
High Court of Judicature at Calcutta
DIPANKAR DATTA
BOC India Limited & Another
Versus
Kolkata Metropolitan Development Authority & Others
W.P. 5292 (W) of 2010
Decided On : 07-05-2010
For the Petitioners:Ranjan Deb, Senior Advocate, Anil Kumar Gupta, Advocate, Bidyut Dutta, Advocate, Bijon Dutta, Advocate.
For the Respondents:Partha Sarathi Basu, Advocate, Satyajit Talukdar, Advocates.
The Court held that the process of canceling the second tender notice is likely to severely affect public interest and obviously, for reasons discussed above, is infected with vices attracting judicial review.
Headnote:
TENDER - Cancellation - Arbitrariness - Malice - Public Interest - Writ Jurisdiction - Interference - Scope - The Court held that the process of canceling the second tender notice is likely to severely affect public interest and obviously, for reasons discussed above, is infected with vices attracting judicial review.
Fact of the Case:
The petitioner expressed interest and responded to the first tender notice for the supply and installation of a centralized medical gas pipeline distribution system at Jawaharlal Memorial Hospital, Kalyani. The first tender was canceled, and a second tender notice was floated with different eligibility criteria. The petitioner again expressed interest and submitted its bid. The bid was found to be eligible, and the financial bid was opened. The petitioner's bid was the lowest. However, the second tender notice was canceled, and a third tender notice was issued with different eligibility criteria. The petitioner challenged the cancellation of the second tender notice and the issuance of the third tender notice.
Finding of the Court:
The Court found that the cancellation of the second tender notice was based on extraneous factors and that the factual incidents referred to therein forming the grounds of cancellation did not exist on the material date. The Court also found that the third tender notice was issued with the sole intention of making the tender process much wider and competitive.
Issues: 1. Whether the cancellation of the second tender notice was arbitrary and unreasonable? 2. Whether the issuance of the third tender notice was justified?
Ratio Decidendi: 1. The Court held that the cancellation of the second tender notice was arbitrary and unreasonable as it was based on extraneous factors and that the factual incidents referred to therein forming the grounds of cancellation did not exist on the material date. 2. The Court held that the issuance of the third tender notice was not justified as it was issued with the sole intention of making the tender process much wider and competitive.
Final Decision: The Court quashed the third tender notice and all proceedings in connection therewith. The Court also directed the Chief Executive Officer, KMDA to issue necessary direction to the Chief Engineer of KMDA to consider the bid of the petitioner in pursuance of the second tender notice and to decide whether the same merits acceptance or not.
Kolkata Metropolitan Development Authority, the first respondent (hereafter KMDA), had floated notice inviting tender no.9 of 2009-2010 dated 6.11.2009 (hereafter the first tender) for supply and installation of ‘Centralised Medical Gas Pipeline Distribution System’ at Jawaharlal Memorial Hospital, Kalyani (hereafter the hospital).
The first petitioner expressed interest and responded to the tender notice. Apart from it, two others expressed interest. However, upon consideration of the technical bids of the three interested parties, the bid of one was found to be informal as it did not follow the clauses of the first tender notice. The other two including the first petitioner were found eligible. By an order dated 20.11.2009 passed by the Superintending Engineer (Works) of KMDA, the second respondent, the process was, however, cancelled.
Upon cancellation of the first tender notice, notice inviting tender no.12 of 2009-10 dated 31.12.2009 (hereafter the second tender notice) for the same work was floated. Unlike the first tender notice, the second tender notice contained a different eligibility criterion. The relevant criterion reads as follows :
“Tenders must have credentials in manufacturing, supply installation testing of centralised Medical Gas pipeline distribution system at least one under any Govt. Hospital or two nos. Semi Govt./Govt. undertaking organisation in a single contract within the last 5 (five) years as a prime contractor/and tenderer should be capable to supply medical gases and liquid medical oxygen as per the demand of the Hospital. This is a mandatory criteria.”
(words in bold font were not there in the first tender notice) The first petitioner applied for purchase of tender documents upon payment of Rs.4,000/-. In due time, it had submitted its tender with KMDA. Apart from the first petitioner, five other parties had expressed interest to participate in the process initiated by the second tender notice and purchased tender documents. Ultimately, however, only three parties including the first petitioner submitted their bids.
In terms of the terms and conditions mentioned in the second tender notice, the bids were to be adjudged on a two-tier process. A party qualifying in the technical bid would be entitled to have its financial bid opened.
It is not in dispute that technical bids of the three interested parties were opened on 22.2.2010. Apart from the first petitioner, the other two parties did not succeed in the technical bid and, consequently, their bids were declared informal. Significantly, only the first petitioner satisfied the criterion of ‘prime contractor’ referred to above.
It was conveyed to the petitioners by the second respondent by his notice dated 24.2.2010 that its financial bid would be opened on 25.2.2010 at 4.30 p.m. “with the approval of the higher authority”.
On 25.2.2010, the financial bid of the first petitioner having been opened, it was found that it had quoted Rs.1,02,80,583.58p for executing the work for which the second tender notice had been floated. It has been claimed in the petition that the representative of the first petitioner, after opening of the financial bid, was informed that its rate being lower than the estimated rate of the respondents, the same would be accepted by the tender committee and that work order would be issued in its favour within a few days. A further request was made to depute a competent engineer of the first petitioner at the project site on the next day in order to finalise the work schedule in consultation with the executive engineer of KMDA and the Principal of the college. It has further been pleaded that the first petitioner deputed its engineer at the project site on 26.2.2010 and the work schedule was finalised. As per telephonic conversation, the representative of the first petitioner had been to the office of KMDA on 26.2.2010 to collect the work order. The work order was not issued on the said date due to some unavoidab
