2004 (I) OLR — 651
THE CHIEF JUSTICE AND B. P. DAS, J.
Debendranath Balabant Ray... Petitioner
Versus
State of Orissa and others... Opp. Parties
W.P. (C) No. 11104 of 2003 and No. 737 of 2004
Decided on 7th May, 2004.
(Paras - 9 to 11)
2. CONTRACT - In normal course the Court should be reluctant to interfere with the action of the Govt. in awarding contract work but if the same is found to be unreasonable, arbitrary, mala fide or is in disregard of the mandatory procedures, it will not hesitate to nullify or rectify such action. (Para - 9)
3. CONSTITUTION OF INDIA, 1950 - Art. 14 - Once the State or instrumentality of the State is a party to the contract, it has an obligation in law to act fairly, justly and reasonably.
(Para - 9)
JUDGMENT
B. P. DAS, J. — In these two writ petitions, the petitioner and the opposite parties being the same and the facts involved being almost similar, both the writ petitions were heard together and are being disposed of by this common judgment.
2. In W.P. (C) No. 11104/2003 the petitioner seeks quas¬hing of Annexure-6, the office order issued by O.P. No. 5-the Executive Engineer, Rengali Right Canal Division No. II, Dhenkanal, forfeiting the earnest money deposited by him along with the tender submitted in respect of the work “Excavation of Gondia Branch Canal from RD 5.070 to 5.580 Km. of RBC of Rengali Irr. Project”, as also Annexure-10, the communication of O.P. No. 1-the Commissioner-cum-Secretary to the Govt. of Orissa in the Department of Water Resources, rejecting the petitioner’s repre¬sentation dated 15.10.2003 to allow him to furnish performance security at the reduced rate as has been allowed to another contractor, namely, Shri S.C. Panda, as per Annexure-8. The petitioner has also prayed for issue of a command by this Court to the opposite parties to allow the petitioner to furnish per¬formance security at the reduced rate and also to execute the agreement to start with the work.
In the other writ petition, i.e., W.P. (C) No. 737/2004, in respect of another item of work, namely, “Excavation of Gondia Branch Canal from RD 5.790 to 6.30 Km. of RBC of Rengali Irr. Projects”, the petitioner has made identical prayer to quash the respective annexures with regard to forfeiture of the earnest money deposit and the communication of O.P. No. 1 refusing to allow the petitioner to furnish reduced performance security besides seeking issue of command to the O.Ps. as prayed for in the other writ petition.
3. The brief facts as delineated in the writ petitions tend to reveal that O.P. No. 5-the Executive Engineer invited sealed tenders from intending eligible contractors for execution of eight items of work of excavation of Gondia Branch Canal as per Tender Call Notice No. 1/ 2002-03 published in the Oriya daily ‘The Samaj’ on 4.11.2002 (Annexure-2). Thereafter O.P. No. 5 issued a corrigendum to the aforesaid Tender Call Notice, which was published in the Oriya daily ‘Dharitri’ on 14.12.2002 (Annexure-3), wherein the estimated costs of the works indicated in Annexure-2 were reduced. The petitioner purchased two sets of tender papers and submitted the same in respect of the works indicated at serial Nos. 6 and 7 of Annexure-3, namely, “Excava¬tion of Gondia Branch Canal from RD 5.070 to 5.580 Km. of RBC of Rengali Irr. Project” and “Excavation of Gondia Branch Canal from RD 5.790 to 6.30 Km. of RBC of Rengali Irr. Project” quoting the rates at Rs. 1,81,16,939/- and Rs. 1,83,31,182/- as against the tender schedule amounts of Rs. 2,56,98,690/- and Rs. 2,59,96,505/-, respectively. Thereafter O.P. No. 5 by letter dated 16.1.2003 (Annexure-4) asked the petitioner to submit de¬tailed analysis of the rates for each item of work. The petition¬er in response to Annexure-4 by letter dated 30.1.2003 submitted detailed analysis of the rates and indicated therein that as the work-sites of both the works were quite adjacent, the petitioner would be able to manage execution of both the works with one establishment for which there would be 50% reduction in the establishment cost and proportionate reduction in over-head expenditure. O.P. No. 5 by letter dated 15.3.2003 (Annexure-5) intimated the petitioner about acceptance of the tenders submit¬ted by him for both the works and requested the petitioner to attend his office on or before 26.3.2003 along with the documents mentioned therein to sign the necessary agreements for execution of the works. On 26.3.2003 the petitioner attended the office of O.P. No. 5 and submitted all the required documents except the performance security. Petitioner’s request to allow him to sign the agreements without furnishing the performance security was, however, turned down. Consequently O.P. No. 5 by office o
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