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IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH, (ITANAGAR BENCH)
KALYAN RAI SURANA, J.
Bamang Pacho, proprietor of M/s. Pacho Enterprises, S/o. Shri Bamang Tabang – Petitioner
Versus
The State of A.P., represented by the Chief Secretary, Govt of A.P. and Ors. – Respondents
WP(C) No.51 of 2024
Decided On : 24-05-2024
Negative Bidding - Procurement of Materials under MGNREGA - CPWD Works Manual, 2014 - Clause 8 (xxiii) - Section 20.4.3 - Justifiable Rates - Tender Evaluation - Director's Authority
Fact of the Case:
The petitioner and respondent no. 8 participated in a tender for MGNREGA works. The petitioner was L1 bidder with a bid 10.00443% less than NIT amount, while respondent no. 8 was L4 bidder with a bid 12.00003% less than NIT amount. The Director, Rural Development Department adjudged respondent no. 8 for issuance of Letter of Intent (LOI), leading to the writ petition under Article 226 of the Constitution of India.
Finding of the Court:
The Court found that the Director, Rural Development Department had usurped the power of the tendering authority and selected a tenderer whose bid was prohibited by the tender conditions. The Court set aside the impugned order and remanded the matter back to the Director, Rural Development Department for re-evaluation.
Issues: The main issue was the legality of the selection of the respondent no. 8 as the L1 bidder by the Director, Rural Development Department, despite the bid being in violation of the tender conditions.
Ratio Decidendi: The Court held that the Director, Rural Development Department had acted illegally by substituting his view upon the discussion available to the Project Director, without disclosing any justifiable reasons. The selection of a tenderer whose bid was prohibited amounted to illegality.
Final Decision: The Court set aside the impugned order and remanded the matter back to the Director, Rural Development Department for re-evaluation within a period of 2 weeks.
JUDGMENT :
Heard Mr. T. Taba, learned counsel for the petitioner. Also heard Ms. P. Pangu, learned Government Advocate for the respondent no. 1 and Mr. B. Picha, learned Standing counsel for the Rural Works Department, representing the respondent nos. 2 to 7 as well as Ms. N. Danggen, learned counsel for the respondent no. 8.
2. The petitioner and the respondent no. 8 had both participated in the NIT/IOB, published on 21.08.2023 for supply and procurement of materials pertaining to MGNREGA works-2023-24 for CD Block, Polosang under Kurung Kumey District being, Package No. VIII. The said tender was issued by the Office of the Project Director, District Rural Development Agency, Koloriang, Kurung Kumey District. As per the comparative statements of the tabulation, the firm of the petitioner, namely, M/s. Pacho Enterprise had submitted a bid amount of Rs. 1,45,11,061.00/-, and was adjudged as L1 bidder. The NIT amount was Rs. 1,61,24,194/-. Accordingly, the bid quoted by the petitioner was (-) 10.00443 % less than the NIT amount. The respondent no. 8 i.e. M/s. N. K. Enterprise had quoted the bid amount of Rs. 1,41,89,286/- which was (-) 12.00003% less than the NIT amount and accordingly, the respondent no. 8 was adjudged as bidder no. L4.
3. On a query of the Court, the learned counsel for the petitioner has submitted that there is nothing in the NIT which refers to negative bidding being permissible. However, it is only from reading of Clause 8 (xxiii) of the terms and conditions of the tender, where it is provided that variation up to 10% may be allowed for peculiar situations and in special circumstances and therefore, it appears to the Court that on reading of clause 8 (xxiii) of the terms and conditions of the tender, there can either be a positive bidding or a negative bidding with acceptable variance of upto 10%.
4. The Tender Evaluation Board, in a memorandum drawn on 30.11.2023, reiterated the firm of the petitioner to be L1 and against the respondent no. 8 firm, there was a remark of the observation that “Section 6 form of bid not submitted” and therefore, the respondent no. 8 does not find place in the list of successful bidder in the Board Proceeding Minutes drawn-up on 30.11.2023. However, the Director, Rural Development Department (respondent no. 2) by a communication dated 08.01.2024, which is impugned in this writ petition has adjudged the respondent no. 8 for issuance of Letter of Intent (LOI). Accordingly, the present writ petition has been filed under Article 226 of the Constitution of India.
5. The stand of the respondent nos. 2 to 7 is contained in the affidavit-in- opposition filed on 19.02.2024 as well as additional-affidavit filed on 14.03.2024.
6. The learned Standing counsel for the State respondents has submitted that the Tender Evaluation Board-cum-Tender Evaluation Authority (respondent no. 6) and the Project Director (PD), District Rural Development Agency (DRDA), Kurung Kumey District, Koloriang (respondent no. 5) had flouted the conditions contained in the CPWD Works Manual, 2014, specifically Clause 20.2 of Section 20 of the said Manual, which is mentioned in Clause-8 (xxiii) of the terms and conditions of the tender and in this regard, it is submitted that as per Clause 20.4.3 of the CPWD manual, 2014, the description was regarding reasonability of the rates.
7. Clause 20.04.3 of the CPWD Works Manual, 2014 is quoted hereinbelow:
20.4.3.1 Justification of tenders Justification statement shall be prepared for checking the reasonability of rates. (Modif
The main legal point established in the judgment is that the authority approving tenders must act within the scope of their authority and provide justifiable reasons for their decisions, especially i....
The court emphasized that the award of contracts should be in public interest and not interfered with unless there is evidence of malafide or irrationality.
An unsuccessful bidder lacks standing to challenge the issuance of a Letter of Intent when disqualified for failing to meet mandatory requirements.
The court ruled that bids below the justified rate are non-responsive, emphasizing judicial respect for expert evaluations in tendering processes.
An unsuccessful bidder cannot challenge the award of a tender if disqualified in the technical evaluation, as they lack standing to do so.
Tender evaluation must adhere strictly to the established criteria, and rejection based on erroneous interpretations undermines fairness and legality in public procurement processes.
Judicial intervention in tender processes is limited to cases of clear procedural violations or arbitrariness, emphasizing the importance of transparency and adherence to established norms.
The importance of full and fair disclosure of all material facts when invoking the court's jurisdiction, and the consequences of suppressing material facts in a writ petition.
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