IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
Devashis Baruah, J.
M/s Risha Infrastructure - Petitioner
Versus
The State of Assam, Represented By the Commissioner and Secretary and Ors. – Respondents
WP(C)/3258 of 2021
Decided On : 09-11-2023
Certiorari - Contract Work - National Highway Act, 1956, Section 23 - Forest Conservation Act, 1980, Section 2 - Notification dated 12.07.2018, Communication dated 27.07.2020, Corrigendum dated 23.01.2021 - The court set aside and quashed the award of contract in respect of Package No.2 of Roadside Plantation (Avenue & Median) of National Highway at NH-31(C)(New 27) stretch – from Km 993 to 1003 of AS08 in favour of the Respondent No.7. Consequently, the Letter of Acceptance dated 02.07.2021; the agreement dated 07.07.2021 as well as the notice to proceed with the work dated 12.07.2021 are also set aside and quashed. Liberty, however is granted to the Respondent Authorities to take such further decision in respect to the contract work in question in the public interest.
Fact of the Case:
The Petitioner filed a writ petition seeking to set aside and quash the award of contract in favor of the Respondent No.7 for Roadside Plantation of National Highway. The Petitioner also sought a direction to offer the contract work to them in accordance with the tender. The Respondent No.7 had emerged as the lowest bidder, offering a rate 10% below the estimated cost. The Petitioner challenged the decision, alleging violation of tender conditions and unfairness to other tenderers.
Finding of the Court:
The court found that the award of contract to the Respondent No.7 was contrary to the communication dated 27.07.2020 and the corrigendum dated 23.01.2021, as it lacked recording of reasons for peculiar situations and special circumstances. The court set aside and quashed the award of contract in favor of the Respondent No.7, along with the Letter of Acceptance, agreement, and notice to proceed with the work. The court granted liberty to the Respondent Authorities to take further decisions in the public interest.
Issues: The issues involved included the validity of the award of contract to the Respondent No.7, compliance with tender conditions, and fairness to other tenderers. The court also considered the interpretation and application of the notification dated 12.07.2018, communication dated 27.07.2020, and the corrigendum dated 23.01.2021.
Ratio Decidendi: The court held that the award of contract to the Respondent No.7 was unfair to other tenderers and violated the communication dated 27.07.2020 and the corrigendum dated 23.01.2021, as it lacked recording of reasons for peculiar situations and special circumstances. The court emphasized the importance of fairness and compliance with tender conditions in awarding contracts.
Final Decision: The court set aside and quashed the award of contract in favor of the Respondent No.7, along with the Letter of Acceptance, agreement, and notice to proceed with the work. The court granted liberty to the Respondent Authorities to take further decisions in the public interest. The court declined to direct the award of the contract to the Petitioner, considering the absence of other qualified tenderers as parties to the petition.
JUDGMENT :
1. The instant writ petition has been filed by the Petitioner seeking a writ in the nature of Certiorari for setting aside and quashing the impugned communications dated 07.06.2021, 17.06.2021 and 18.06.2021 as well as also for a writ in the nature of Mandamus not to give effect to the said communications and for a direction to offer Contract Work in question being the Roadside Plantation (Avenue & Median) of the National Highway at NH- 31(C)(New 27) stretch – from Km 993 to 1003 of AS08, against package No.2 in favour of the Petitioner in terms with the Tender, as well as also restraining the Respondents from allowing the Respondent No.7 to execute the Contract Work against the package No.2 of Roadside Plantation (Avenue & Median) of National Highway at NH-31(C)(New 27) stretch – from Km 993 to 1003 of AS08.
2. The facts involved in the instant writ petition as could be seen from the pleadings on record are that the Respondent No.6 had issued a tender notice dated 11.01.2021 inviting online bids from eligible bidders for settlement of different packages including Package No.2 of Roadside Plantation (Avenue & Median) of National Highway at NH-31(C)(New 27) stretch – from Km 993 to 1003 of AS08. The total value of the work including all taxes was Rs.2,56,64,070/-. The said tender notice was published in various newspapers on 13.01.2021.
3. It is relevant to take note of that as per the said tender notice, the last date for downloading the tender was 01.02.2021 but it was extended upto 05.02.2021 by corrigendum dated 23.01.2021 in respect to all the packages i.e. package Nos.1, 2, 3 and 4. Further to that in the said corrigendum, some of the conditions were modified including the experience of the bidder in Plantation and Nursery Works. It is notable for the purpose of the instant writ petition that in the corrigendum dated 23.01.2021, at Clause-6 an additional term was inserted as a tender condition. The said Clause-6 being relevant is quoted hereinbelow:
4. From the above quoted Clause-6, it reveals that the variation of the quoted price up to 5 % (positive or negative) over the approved estimate cost may be allowed. Further to that, variation of the quoted price/rate up to 10% (positive or negative) over the approved estimate cost may also be allowed for peculiar situations and in special circumstances. However, tenders beyond 10% (positive or negative) over the approved estimate cost shall not be accepted.
5. The Petitioner thereupon submitted its tender along with various other bidders. The Technical bid was opened on 06.02.2021 and the Financial bid was opened on 17.02.2021. Accordingly, on the basis of the said Technical bid and the Financial bid, the Tender Committee prepared a comparative statement of all the participating bidders. Subsequent thereto, the Respondent No.6, vide a communication dated 25.02.2021 forwarded the comparative statements of both Technical and the Financial bids against package No.2 to the Respondent No.5 for necessary steps in the matter. It is pertinent to mention that in the forwarding letter dated 25.02.2021 of the Respondent No.6, it was stated that all the 8 tenders were found valid in technical capabilities and the bidders under Serial Nos. 1, 2, 3, 5, 7 and 8 have offered the rate below 5% from the estimated cost. The tenderer at Serial No.4 i.e. the Respondent No.7 had offered the rate as 10% below from the estimated cost and the tenderer at Serial No.6 had offered rate as 9.99% below. It was also mentioned in the said communication that
The main legal point established in the judgment is the requirement for recording reasons for peculiar situations and special circumstances in awarding contracts, as mandated by the communication dat....
The court upheld the public authority's right to split contracts and emphasized that acceptance of work by tenderers at offered rates indicates agreement with procurement terms.
The court ruled that bids below the justified rate are non-responsive, emphasizing judicial respect for expert evaluations in tendering processes.
Tender cancellations must comply with established guidelines to prevent arbitrary actions violating fair procurement principles.
The court emphasized the need for fairness and transparency in the tender process and held that the principles of judicial review apply to prevent arbitrariness or favoritism in the exercise of contr....
Public interest and fairness must govern the tendering process, prohibiting judicial intervention in absence of mala fides or arbitrariness.
Tender evaluation must adhere strictly to the established criteria, and rejection based on erroneous interpretations undermines fairness and legality in public procurement processes.
The rejection of bids must be based on valid reasons and must not be arbitrary or mala fide. Court orders must be adhered to, and decisions must be in accordance with the law.
The rejection of bids by public authorities must adhere to the principles of fairness, reasonableness, and non-arbitrariness as mandated by Article 14 of the Constitution of India.
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