HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Mahendra Kumar Goyal, J.
Devendra Construction Co. – Appellant
Versus
State Of Rajasthan & Ors. – Respondents
S.B. Civil Writ Petition No. 14015/2021
Decided On : 19-05-2022
Additional Performance Security - Validity of Orders - Rajasthan Transparency in Public Procurement Act, 2012 - [Section 38(1), Section 38(4)]
Fact of the Case:
The petitioner, a 'AA' class contractor, challenged the validity and legality of the order dated 1.11.2021 passed by the second appellate authority and the order dated 23.9.2021 passed by the first appellate authority under Rajasthan Transparency in Public Procurement Act, 2012 (RTPP Act), for quashing and setting aside the order dated 7.12.2021 passed by the respondent no. 2 as well as the demand of additional performance security. The petitioner submitted its bid for a water supply project and a demand of additional performance security was raised, which the petitioner contested through appeals and a writ petition.
Finding of the Court:
The court dismissed the writ petition on the grounds of 'suppressio veri' and 'suggestio falsi', as the petitioner failed to disclose the NIT condition providing for additional performance security and the declaration and undertaking submitted with the bid document. The court found that the petitioner's non-disclosure had material bearing on the issue and dismissed the petition accordingly.
Issues: The issues revolved around the validity of the demand for additional performance security and the petitioner's failure to disclose material facts related to the bid document and the NIT condition.
Ratio Decidendi: The court held that the petitioner's failure to disclose material facts related to the bid document and the NIT condition amounted to 'suppressio veri' and 'suggestio falsi', leading to the dismissal of the writ petition.
Final Decision: The writ petition was dismissed on the grounds of 'suppressio veri' and 'suggestio falsi' due to the petitioner's failure to disclose material facts related to the bid document and the NIT condition.
Key Points: - The writ petition was dismissed on grounds of suppressio veri and suggestio falsi due to non-disclosure of NIT condition for additional performance security (!) (!) (!) . - The petitioner contested the validity of orders under RTPP Act, specifically regarding the demand of additional performance security and related bid documents (!) (!) . - Discussion includes statutory provisions (RTPP Act 2012, Rules 2013, Rule 75A) and the legality of imposing additional performance security post-NIT, including pre- and post- Rule 75A contexts (!) (!) (!) (!) . - The court references precedent on clean hands and disclosure obligations in writ petitions (Ramjas Foundation; Bhaskar Laxman Jadhav) to sustain dismissal for concealment and misrepresentation (!) (!) (!) . - The order 7.12.2021 canceling tender process and debarment from re-tender is reviewed in light of the challenged NIT conditions (!) (!) . - The court notes that the petitioner was not only silent about NIT clause 30 and Circular 27.2.2019 but also failed to disclose related undertakings/declarations in the bid, affecting merits of the petition (!) (!) . - The AG argued that additional performance security is now mandatory post-Rule 75A (2020) and that the writ petition is not maintainable due to concealment and estoppel; the court ultimately dismisses the petition (!) (!) (!) . - The judgment emphasizes that tender conditions within bidding documents can be supplemented by procuring entities if within statutory framework, but misrepresentation/disclosure issues bar relief (!) (!) (!) .
JUDGMENT
Mahendra Kumar Goyal, J. - The petitioner, a 'AA' class contractor, has filed this writ petition assailing the validity and legality of the order dated 1.11.2021 passed by the second appellate authority as well as the order dated 23.9.2021 passed by the first appellate authority under Rajasthan Transparency in Public Procurement Act, 2012 (for brevity-'the RTPP Act'), for quashing and setting aside the order dated 7.12.2021 passed by the respondent no. 2 as also the demand of additional performance security.
2. The facts in brief are that the petitioner submitted its bid in pursuance of the NIT no. 1/2020-21 issued by the respondent no. 2 for the work of "Retrofitting Works including Construction of Local Sources for conjunctive use, new CWR & OHSRs, connecting these OHSRs with existing Rising Mains, Pipeline from OHSRs to VTCs, Pipeline network inside the village, providing Functional Household Tap Connections (FHTC) including Geo tagging and O & M work (upto VTC) to be carried out under Jal Jeevan Mission (JJM) for Bisalpur-Tonk-Niwai Water Supply Project (Package-I)". On standing lowest bidder, work order dated 4.8.2021 was issued in its favour wherein, a demand of additional performance security to the tune of Rs. 6,27,08,766 was raised. Allegation that demand so raised was without any basis and was in violation of principles of natural justice, the petitioner preferred a first appeal under Section 38(1) of the Act of 2012 which came to be dismissed vide order dated 23.9.2021. This order was unsuccessfully challenged by the petitioner by way of a second appeal under Section 38(4) which came to be dismissed by the second appellate authority vide order dated 1.11.2021. Thereafter, the respondent no. 2 issued a notice dated 10.11.2021 calling upon the petitioner to execute and sign the contract agreement in pursuance of work order dated 4.8.2021. Initially, the petitioner has assailed both these orders passed in appeals along-with demand of additional performance security; but, during pendency of the writ petition, the respondent no. 2 passed an order dated 7.12.2021 whereby, the tender process of abovestated NIT was cancelled, the petitioner was required to deposit a sum of Rs. 2.302 crores being 2% of the estimated cost of the work with debarment from participation in the re-invitation of the bids for the subject tender. By way of an amendment in the writ petition, the validity of this order has also been assailed.
3. The respondents in their reply have raised preliminary objection as to maintainability of the writ petition alleging that it suffers from the vice of concealment of material facts. It is averred that while submitting the bid, the petitioner has furnished an undertaking as also a declaration that it has read, understood all the terms and conditions of the bid documents including those in addenda issued by the department and the same were accepted by it without any deviation. It is averred that demand of additional performance security is pursuant to Circular dated 27.2.2019 incorporated in the terms and conditions of the bid documents which was accepted by the petitioner with open eyes without any demur against such condition. It is stated that in pursuance of the NIT, a pre-bid meeting was held on 18.3.2021, which was neither attended by the petitioner nor, he raised any objection to the aforesaid condition. It is pleaded that once the petitioner has participated in the NIT having accepted and resorted to its terms including the applicability of the Circular dated 27.2.2019, it is estopped from assailing the same.
4. On merits of the case, it was submitted that the respondents were well within their competence to provide for additional performance security in case of abnormally low bid. It was stated that similar conditions providing for the additional performance security were also incorporated in the various NITs issued by the answering respondent such as work of augmentation-cum-reorganisation of Sonwa
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The main legal point established in the judgment is the illegality of requiring additional performance security for unbalanced bids in public procurement prior to the amendment, emphasizing the need ....
Material deficiencies in a bid cannot be cured under the Rajasthan Transparency in Public Procurement Act, 2012, affecting the bid's responsiveness.
The court upheld the decision of the official respondents to declare the petitioner non-responsive, emphasizing the importance of transparency in the tendering process and the application of natural ....
The discretion of the accepting authority in tender matters and the importance of truthful declarations in tender submissions.
Conditions for additional performance security prior to the enactment of Rule 75A are illegal unless supported by statutory provisions.
The impugned actions of issuing the show cause notice and blacklisting the petitioner were arbitrary, unconstitutional, and violated principles of natural justice. The court emphasized the requiremen....
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