2013 Supreme(Raj) 702
RAJASTHAN HIGH COURT
Mohammad Rafiq, J.
M/s R.N. Metals and Another - Appellant
Versus
Rajasthan Vidhyut Utpadan Nigam Limited and others - Respondent
S.B. Civil Writ Petition No. 15997/2012 With Stay Application No. 13531/2012 and Second Stay Application No. 314/2013.
Decided On : 28-01-2013
For the Petitioner:S.S. Hora, Advocate.
For the Respondent:R.K. Agrawal, Senior Counsel with Ms. Sunita Pareek and Shri Nitin Jain, Advocates.
A public authority can split a tender contract between multiple bidders if the tender document allows it to do so and if the decision is based on relevant and valid considerations.
Headnote:
TENDER - SPLITTING OF WORK - VALIDITY - CIRCUMSTANCES - PUBLIC INTEREST - C.V.C. GUIDELINES - INTERPRETATION - FACTUAL MATRIX - RELEVANCE.
Fact of the Case:
Petitioner, a manufacturer of Hi-chrome GM balls, challenged the award of a tender for the supply of Hi-chrome GM balls to respondent no. 3 by respondent no. 1, Rajasthan Vidhyut Utpadan Nigam Limited (RVUNL). Petitioner contended that it was the lowest bidder and should have been awarded the entire contract, but RVUNL split the contract between petitioner and respondent no. 3 without any justification.
Finding of the Court:
The court found that the tender document allowed RVUNL to split the order between multiple bidders and that petitioner had agreed to this condition. The court also found that RVUNL's decision to split the contract was based on petitioner's poor performance in meeting the time schedule of supply in the past. The court held that RVUNL's action was not arbitrary or unjust, and that it was in the public interest to split the contract to ensure timely supply of Hi-chrome GM balls.
Issues: 1. Whether RVUNL was justified in splitting the contract between petitioner and respondent no. 3? 2. Whether RVUNL's decision was based on relevant and valid considerations? 3. Whether the C.V.C. guidelines on post-tender negotiations were violated?
Ratio Decidendi: 1. The court held that RVUNL was justified in splitting the contract because the tender document allowed it to do so and because petitioner had agreed to this condition. 2. The court held that RVUNL's decision was based on relevant and valid considerations, namely petitioner's poor performance in meeting the time schedule of supply in the past. 3. The court held that the C.V.C. guidelines on post-tender negotiations were not violated because RVUNL had duly recorded its justification for splitting the contract.
Final Decision: The court dismissed the petition, holding that RVUNL's decision to split the contract was valid and that there was no violation of the C.V.C. guidelines.
JUDGMENT
1. - This writ petition seeks to challenge the award of the work for supply of Hi-Chrome Grinding Media Balls to respondent no. 3 pursuant to Notice Inviting Tender No.TN-104/2012. AIA Engineering Limited by respondent no. 1 - the Rajasthan Vidhyut Utpadan Nigam Limited.
2. Petitioner as well as respondent no. 3 both are manufacturer of Hi-chrome GM balls. According to petitioner, it is supplying said item to respondent no. 1 Rajasthan Vidhyut Utpadan Nigam Limited (for short, 'the RVUNL') for last five years satisfactorily because in each of those years, it was the lowest tenderer having quoted lowest rates in his tender. In respect of the year 2011-12 it was awarded work of supply of 2705 MT of Hi-chrome GM balls but till date it has supplied 2944 MT of Hi-chrome GM balls in terms of clause of contract, which provides that the respondent RVUNL can call upon the supplier to supply upto 20% more material according to its requirement.
3. Petitioner contends that respondent-RVUNL vide NIT No. TN-104/2012 invited tenders for supply of 2000 MT Hi-chrome GM balls in different sizes. The petitioner applied for supply of tender document and vide letter dated 09.04.2012 tendered documents were issued to the petitioner. The tender was in two parts. Technical bid formed Part 'A' and price bid formed Part 'B'. Tenders were to be opened on 02.05.2012. Petitioner submitted bid on 25.04.2012 for supply of full quantity of 2000 MT Hi-chrome GM balls. Petitioner qualified the technical bid and was informed vide letter dated 28.05.2012 that price bid Part 'B' shall be opened at 11.00 am on 30.05.2012. When the price bid was opened on that date, petitioner appeared as the lowest bider (L1) having quoted Rs. 57000/- per MT, while respondent no.3 emerged as second lowest bidder (L2) having quoted Rs. 62000/- per MT. One Balaji appeared as lowest third bidder having quoted Rs. 67,000/- per MT. Even though the bid was opened on 30.05.2012 respondents surprisingly did not issue letter of intent or purchase order to the petitioner. Petitioner was called to extend the validity upto 30.09.2012, which the petitioner duly did vide letter dated 16.07.2012.
4. Shri S.S. Hora, learned counsel for petitioner, argued that the respondents during the period from June, 2012 to September, 2012 tried their best, for some reason or the other, to scuttle the entire bidding process with the obvious intention to grant undue favour to respondent no. 3, who was the second lowest bidder. The petitioner on 27.09.2012 wrote a letter to the respondent that since it quoted the lowest price, the contract should be awarded to him and it should be given purchase order for supply of entire demanded quantity. It is also contended that the petitioner alone was capable of supplying the required quantity. Copy of tender submitted by the petitioner at Annexure-4 in its clause 5.5 indicated that the petitioner produced letter of its capacity of 2000 MT, which is otherwise evident from the fact that previously it had supplied 2900 MT of Hi-chrome GM balls. Learned counsel referred to letter Annexure-7 addressed to the Deputy Chief Engineer (TD), RVUNL and submitted that the petitioner was surprised to see the letter of intent of supply only 1200 MT Hi-chrome GM balls whereas balance order of 800 MT Hi-chrome GM balls was given to the respondent no.3 without any plausible justification. Petitioner immediately on 29.09.2012 protested that it was entitled to be awarded entire work order. Learned counsel submitted that action of the respondent is shrouded in complete mystery as to in what manner they decided to award part of supply contract to respondent no.3. There was total lack of transparency because how and in what manner they negotiated the rates with respondent no.3 never became clear.
5. Shri S.S. Hora, learned counsel referred to Central Vigilance Commission (for short, 'the C.V.C.') guidelines on negotiation (Annexure-11) and argued that Circular No. 01/.01/10, was issued by
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