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2017 Supreme(Cal) 711
IN THE HIGH COURT OF CALCUTTA
Arijit Banerjee, J.
Berhampore Construction Syndicate Private Limited and Ors. - Appellants
Vs.
The State of West Bengal and Ors. - Respondents
WP 878 (W) of 2015
Decided On : 30-06-2017
Advocate Appeared:
For the Appellants : Saptangshu Bose, Subhabrata Das
For the Respondents: Abhratosh Majumdar, Md. Siddiqui
Headnote:
The High Court held that the cancellation of the second tender notice and issuance of the third tender notice was arbitrary, mala fide, and without jurisdiction as there was no cogent reason for doing the same. The Court found that the eligibility criteria in the third tender notice were 'tailor-made' to suit the added respondent No. 6, and that the cancellation order was a non-speaking order. The Court also held that the State authorities had not departed from the earlier conditions and had not materially changed such conditions, and that the financial condition imposed by the State Authorities in Clause 3(i) of the eligibility criteria could not be subjected to judicial review since it was wholly within the discretion of the employer to stipulate the financial condition for arriving at a conclusion as to whether or not a contractor was capable of executing the works.
Fact of the Case:
A tender was floated for widening and strengthening of a road. There were no bidders in response to the first tender notice. The authorities reviewed the tender process and issued a second tender notice. Two parties put in their offers in response to the second tender notice. The petitioner company was held to be qualified by the office of the Executive Engineer. The Executive Engineer issued a notice to the petitioner company to offer a Fair Rate by lowering the rate quoted earlier. The petitioner company lowered its rate and the revised rate was accepted by the Superintending Engineer and re-commended to the Chief Engineer. Subsequently, the tender was cancelled due to 'administrative reasons'. Within two days a fresh tender notice was issued by the office of the Superintending Engineer for the same work.
Finding of the Court:
The Court held that the cancellation of the second tender notice and issuance of the third tender notice was arbitrary, mala fide, and without jurisdiction as there was no cogent reason for doing the same. The Court found that the eligibility criteria in the third tender notice were 'tailor-made' to suit the added respondent No. 6, and that the cancellation order was a non-speaking order. The Court also held that the State authorities had not departed from the earlier conditions and had not materially changed such conditions, and that the financial condition imposed by the State Authorities in Clause 3(i) of the eligibility criteria could not be subjected to judicial review since it was wholly within the discretion of the employer to stipulate the financial condition for arriving at a conclusion as to whether or not a contractor was capable of executing the works.
Issues: 1. Whether the cancellation of the second tender notice and issuance of the third tender notice was arbitrary, mala fide, and without jurisdiction? 2. Whether the eligibility criteria in the third tender notice were 'tailor-made' to suit the added respondent No. 6? 3. Whether the cancellation order was a non-speaking order? 4. Whether the State authorities had departed from the earlier conditions and had materially changed such conditions? 5. Whether the financial condition imposed by the State Authorities in Clause 3(i) of the eligibility criteria could be subjected to judicial review?
Ratio Decidendi: 1. The Court held that the cancellation of the second tender notice and issuance of the third tender notice was arbitrary, mala fide, and without jurisdiction as there was no cogent reason for doing the same. The Court found that the eligibility criteria in the third tender notice were 'tailor-made' to suit the added respondent No. 6, and that the cancellation order was a non-speaking order. 2. The Court held that the State authorities had not departed from the earlier conditions and had not materially changed such conditions, and that the financial condition imposed by the State Authorities in Clause 3(i) of the eligibility criteria could not be subjected to judicial review since it was wholly within the discretion of the employer to stipulate the financial condition for arriving at a conclusion as to whether or not a contractor was capable of executing the works.
Final Decision: The Court allowed the writ petition and quashed the third tender notice.
Arijit Banerjee, J.
1. In this writ application the petitioners have challenged the Notice Inviting Electronics Tender No. 20 of 2014-15 dated 31 December, 2014 issued by the Superintending Engineer, Central Circle, PWD, Murshidabad for widening and strengthening of Motijhil to Panditbagh More Road, i.e. a stretch of 8.75 kms in the district of Murshidabad. The contention of the petitioners is that the petitioner company was the successful bidder pursuant to Notice Inviting Electronic Tender No. 8 of 2014-15 issued for the same work and as such issuance of the subsequent tender No. 20 was illegal. The petitioners submitted that the work order should be issued in favour of the petitioner company.
Facts of the case:-
2. A tender was floated and Notice Inviting Electronic Tender No. 8 of 2014-15 dated 4 September, 2014 was issued by the Executive Engineer-II, Berhampore Division No. I, PWD Directorate for widening and strengthening of 8.75 Kms stretch of the road from Motijhil to Panditbagh More Road in the District of Murshidabad. The estimated value of the tender work was Rs. 6,18,26,809/- and the estimated completion period was 180 days. Sub-clauses (i) and (ix) under Clause 3 (Eligibility criteria for participation in tender) read as follows:-
"3(1) The prospective bidders shall have satisfactorily completed as a prime agency during the last 5(five) years prior to the date of issue of this Notice at least one work of similar nature under the authority of State/Central Govt., State/Central Govt. undertaking/Statutory Bodies constituted under the statute of the Central/State Government and having a magnitude of 40 (forty) percent of the Estimated amount put to tender. (Non Statutory Documents) N.B. Estimated amount, Date of completion of project & detail communicational address of Client must be indicated in the Credential Certificate. Similar nature of work in Road Works.
(ix) The prospective bidders should own (Details as mentioned in Sl. No. 2) the required plant and machineries of prescribed specifications as shown in format. Conclusive proof of ownership (Tax invoice, Way Bill, Delivery Challan, incorporation in the Balance Sheet as fixed asset) for each plant and machineries in working condition shall have to be submitted. Present location of installation of main Plant and machinery as mentioned in specified format has also to be disclosed. Present status/location of all the Plant and Machineries are needed to be provided. If the same is already engaged in the other works, then name of client along with his contact number should be furnished in the declaration by the intended tenderer countersigned by the client with tentative date of release of such Plant and Machineries where the same are presently engaged. If necessary, authority/evaluation committee may inspect Plant and Machineries physically or call for the original documents as proof of Ownership in favour of owner Plant & Machineries should be owned by the applicant. (Non Statutory Documents)."
3. There were no bidders in response to the said NIET. The authorities reviewed the tender process and while doing so took into consideration the Government Notification No. 229-CRC/2M-02/2013 dated 11 July, 2013 whereby sub-Rule (3) of Rule 216 of the PWD Code was amended. Rule 216(3) as amended reads as follows:-
"(3) If upon calling for competitive tenders, the number of tenders received is less than three, the tenders shall be invited afresh. Such Re-Tender notice shall be published in widely circulated dailies for conventional 'Notice Inviting Tender' (NIT) and also through e-Tender portal in case of e-Tender. Prior to invitation of Re-Tender or fresh Tender the eligibility criteria and other terms and conditions as contained in the first 'Notice Inviting Tender' shall have to be reviewed by the Tender Inviting Authority to ascertain whether (i) it was too much restrictive, say, specifications and qualifications were fixed at higher standard than required, (ii) adve
