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IN THE HIGH COURT OF ORISSA, CUTTACK
VINEET SARAN, B.R. SARANGI, JJ.
M/s. Sical Logistics Ltd. - Petitioner
Versus
Mahanadi Coalfields Limited and others - Opp. Parties
W.P.(C) No. 5272 of 2017
Decided On : 08-09-2017
No specific statutes were referenced or discussed in the judgment.
Fact of the Case:
M/s. Sical Logistics Limited filed an application challenging the cancellation of an e-tender notice and the subsequent re-tender notice. The petitioner was the lowest bidder in the original tender process and was waiting for the letter of acceptance. However, the tender was cancelled without assigning any reason. The petitioner argued that the cancellation was arbitrary and unreasonable. The respondents contended that the cancellation was based on a decision taken by the Board of Directors due to administrative reasons. The court found that the cancellation without assigning any reason was not valid and quashed the cancellation order and the re-tender notice.
Finding of the Court:
The court relied on the principle that reasoned orders are necessary and that subsequent explanations cannot be accepted to sustain a decision. The court also referred to the guidelines of the Central Vigilance Commission, which state that the tender accepting authority must record clear and logical reasons for any action of rejection or recall of tenders. The court found that the communication cancelling the tender without assigning any reason cannot sustain in the eye of law. The court distinguished a previous case where the reasons for cancellation were made available on the website. The court also considered the arguments of the respondents but found that the cancellation was not justified. The court held that the cancellation order and the re-tender notice cannot sustain in the eye of law and quashed them.
Ratio Decidendi: The cancellation of a tender without assigning any reason is not valid. The tender accepting authority must record clear and logical reasons for any action of rejection or recall of tenders. Subsequent explanations cannot be accepted to sustain a decision.
Result: The court quashed the cancellation order and the re-tender notice.
JUDGMENT :
B.R. SARANGI, J.
M/s. Sical Logistics Limited, a company registered under the Companies Act, 1913, has filed this application challenging the order dated 17.03.2017 cancelling e-tender notice dated 13.10.2016, as well as consequential re-tender notice issued on 20.03.2017 on the ground that the same is arbitrary, discriminatory and mala fide.
2. The factual matrix of the case is that the petitioner is one of the India’s leading integrated logistics solutions providers. It has over five decades of experience in providing end to end logistic solutions. As such, the petitioner has made significant investments in logistics elated infrastructure and operates mechanized port terminals (container and bulk), container freight stations, container rakes, rail and road terminals and also undertakes surface mining of coal and transportation, removal of overburden and transportation, and mining development operations. An e-tender notice was floated on 13.10.2016 by opposite party no.1 inviting offers from eligible bidders for “Extraction of coal/coal measure strata by deploying Surface Miners on hiring basis, mechanical transfer of the same by Pay loaders into tipping trucks and transportation from Surface Miner face to different destinations of Hingula OCP, Hingula area for a total quantity of 161,96,655 Cum (267,24,480 Te).” The said notice inviting tender was widely published in private and public portals all over the country. In compliance of the conditions stipulated in the notice inviting tender, the petitioner submitted its bid on 03.11.2016. The bid of the petitioner, along with other participants to the tender, was opened on 04.11.2016, and four participants were qualified to participate in the reverse auction process, including the petitioner.
3. In the reverse auction process, which took place on 04.11.2016, the petitioner emerged as L1 (lowest bidder) having quoted the lowest price and was declared as L1. As a result, the price quoted by the petitioner in its price bid was made public and published. After being declared L1, the petitioner requested on several occasions to opposite party no.1 to issue letter of acceptance (LOA) in accordance with the terms and conditions of the notice inviting tender. Though assurance was given, but the letter of acceptance was not issued. Since it is a time bound project, the petitioner proceeded to make arrangements recruiting manpower and procuring equipment. The validity of the tender, being for a period of 120 days as per clause-25 of the e-tender notice dated 13.10.2016, opposite party no.2 vide its letter dated 25.02.2017 requested the petitioner to extend the bid validity period up to 30.04.2017, to which the petitioner agreed vide its letter dated 28.02.2017. Even though four months expired from the date of declaration of petitioner as L1, no letter of acceptance was issued. Consequentially, the petitioner vide its letter dated 09.03.2017 requested opposite party no.1 to issue such letter of acceptance at the earliest. But the petitioner received an e-mail on 17.03.2017, wherein it was informed that the tender has been cancelled and the petitioner may visit the portal for further details, if any. Accordingly, the petitioner visited the portal and found that the tender has been cancelled “due to administrative reason”. Followed by the same, with identical parameters, quantity and base price as of the original tender dated 13.10.2016, opposite party no.1 issued re-tender notice on 20.03.2017 in its website. Being aggrieved by such cancellation of tender, as well as issuance of re-tender notice, this application has been filed.
4. Mr. S.K. Setty, learned Senior Counsel and Mr. J. Das, learned Senior Counsel appearing along with Mr. A.N. Das, learned counsel for the petitioner contended that the communication dated 17.03.2017 in Annexure-5 intimating the cancellation of tender does not contain any reason, save and except to visit the official portal for further details. On visiting th
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