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2013 Supreme(Raj) 193
RAJASTHAN HIGH COURT (JAIPUR BENCH)
AMITAVA ROY & VEERENDR SINGH SIRADHANA, JJ.
R.N. Metals & another
Versus
Rajasthan Vidhyut Utpadan Nigam Limited & others
D.B. Civil Spl. Appeal (Writ) No. 290 of 2013
Decided On: 28/05/2013
The decision of a public authority to split a contract between two or more bidders is valid if it is based on relevant considerations and is in the interest of public interest.
Headnote:
TENDER - SPLITTING OF WORK - VALIDITY - CVC GUIDELINES - INTERPRETATION - PUBLIC INTEREST - JUDICIAL REVIEW - SCOPE.
Fact of the Case:
The appellant, a manufacturer of Hi-chrome GM Balls, challenged the decision of the respondent-Nigam to split the contract for the supply of Balls between the appellant and the respondent No.3. The appellant contended that the decision was illegal, arbitrary, and in violation of the CVC Guidelines.
Finding of the Court:
The Court held that the respondent-Nigam had the right to split the order between two or more bidders as per the tender norms. The Court also found that the decision was based on the assessment of the appellant's performance, which had been below par in the previous year, resulting in delayed supply and frequent interruption in power generation. The Court further held that the CVC Guidelines were not violated and that the decision was taken in the interest of public interest.
Issues: 1. Whether the respondent-Nigam had the right to split the order between two or more bidders? 2. Whether the decision was based on relevant considerations? 3. Whether the CVC Guidelines were violated?
Ratio Decidendi: 1. The Court held that the respondent-Nigam had the right to split the order between two or more bidders as per the tender norms. Clause (5.0) of Part-B, Special Notes Instructions to this effect, is quoted herein-below: 5.0 RVUN reserves the right to split the order between two or more bidders. The bidder may quote for part or full quantity based on his manufacturing capacity. In case of offer for lesser qty., the monthly delivery schedule shall stand proportionally reduced. 2. The Court found that the decision was based on the assessment of the appellant's performance, which had been below par in the previous year, resulting in delayed supply and frequent interruption in power generation. The Court relied on the performance reports appended to the reply of the respondent-Nigam as Annexure/R-1 collectively obtained from the respective generation units, which endorsed the assessment of the respondent-Nigam qua the performance of the appellant No.1 and delayed supplies of Balls as referred to therein. 3. The Court held that the CVC Guidelines were not violated. The Court noted that the respondent-Nigam had complied with the requirements of the CVC circular by recording justification for splitting of the work.
Final Decision: The Court dismissed the appeal, holding that the impugned judgment and order was valid and unassailable.
AMITAVA ROY, J.
1. The appellants seek interference with the judgment and order dated 28-1-2013 passed in S.B. Civil Writ Petition No. 15997/2012 whereby, his challenge to the decision of the respondent-Nigam in awarding a part of the work for supply of Hi-chrome GM Balls (for short, hereinafter also referred to as Balls) to the respondent No.3 in a process initiated vide NIT No. TN-104/2012 has been rejected.
2. We have heard Mr. S.S. Hora, learned counsel for the appellants and Mr. R.K. Agarwal, Senior Advocate assisted by Ms. Sunita Pareek for the respondent-Nigam.
3. For the order proposed to be passed, we do not consider it necessary to issue formal notice to the respondent No.3.
4. The foundational facts indispensable for the present adjudication need be outlined at the outset. The appellant No.1 has introduced itself to be a manufacturer of Balls involved and claims to have been supplying the same to the respondent-Nigam for the last five years, having been selected therefore in a public participatory process. The respondent-Nigam, by the aforementioned NIT, initiated a process for supply of 2000 MT Hi-chrome Balls of different sizes, and in response thereto, the appellant No.1 submitted its tender along with the essential documents appended thereto. The tender process contemplated that the offer be made in two parts containing technical bid (Part-A) and price bid (Part-B). The respondent No. 3 also, did participate in the process and on the culmination of the exercise of opening the bids and evaluating the same, the appellant No.1 was adjudged to be the lowest bidder (L1) and the respondent No.3 as the second lowest bidder (L2).
5. The price bid was opened on 30-5-2012, and according to the appellants, though the LOI ought to have been issued to the appellant No.1, the matter was delayed in order to give undue benefit to the respondent No.3. On the being asked to extend the validity period of its offer by the respondent, Nigam, the appellant No.1 did so upto 30-9-2012. While the matter rested at that and the stalemate continued, the appellant No.1 on 27-9-2012 wrote a letter to the respondent-Nigam stating that as it had been adjudged to be the lowest bidder and was capable of executing the order for supplying the whole bulk of the Balls as envisaged, it ought to be issued the purchase order. Close on the heels of this communication, on 29-9-2012, the appellant No.1 was issued the LOI for supply of only 1,200 MT of Hi-chrome GM Balls and the balance 800 MT was awarded to the L2 (the respondent No.3). The appellants protested against this action on the very same date pleading inter alia that the arrangement sought to be introduced by the respondent- Nigam was contrary to the Central Vigilance Commission (CVC) Guidelines. They reiterated that having regard to the manufacturing capacity of the appellant No.1, it was entitled in law, being the lowest bidder, to be awarded the whole bulk of work. On being asked and following some procrastination the respondent-Nigam supplied a photo state copy of the LOI issued to the respondent No.3 on 5-10-2012. Having unsuccessfully pleaded with the respondent-Nigam, the appellant turned to this Court questioning the validity of its decision to split the contract and awarding a part of the work to the respondent No.3. Violation of the CVC Guidelines and private negotiation with the respondent No.3 to their exclusion, were asseverated by the appellants.
6. The respondent-Nigam, in its reply, while admitting that the appellant No.1 had been supplying Hi-chrome GM Balls to it for the last five years, did assert that during the year 2011-12 against the supply order for 2707 MT of such commodity, it failed to make the same within the stipulated period. While contending that the Hi-Chrome GM Balls are required to grind coal in the coal mills of power generating stations, and that, timely supply of the Balls is essential to maintain flawless generation of power, it averred that reports from
