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IN THE HIGH COURT OF ORISSA AT CUTTACK
B.R. Sarangi, G. Satapathy, JJ.
Sarat Kumar Samal – Appellant
Versus
State of Odisha & Ors. – Respondents
W.P(C) NO. 15395 of 2022 (In the matter of an application under Articles 226 and 227 of the Constitution of India.)
Decided On : 28-09-2022
Tender Rejection - Public Works - P.W.D. Contractors Registration Rules, 1967 - SOR 2014 - SOR 2022 - Article 14 of the Constitution of India - Adani Gas Limited v. Petroleum and Natural Gas Regulatory Board, (2020) 4 SCC 529, Mihan India Ltd. v. GMR Airports Ltd., etc. AIR 2022 SC 2745, Sampad Samal v. State of Odisha, AIR 2017 Ori 33, D.K. Engineering & Construction v. State of Odisha, 2016 SCC OnLine Ori 405 - Clause-28.1 of SBD for PMGSY - Clause-5.6.3 and 5.6.6 of the Manual for Procurement of Works, 2019
Fact of the Case:
The petitioner, a Special Class Contractor, participated in a tender process and was found to be the lowest bidder. However, the bid was rejected by the authorities, citing 'high tender premium' and a direction for immediate rebidding was issued without providing any valid reason or opportunity for hearing to the petitioner.
Finding of the Court:
The Court found the rejection of the petitioner's bid to be arbitrary, unreasonable, and violative of Article 14 of the Constitution of India. The Court quashed the rejection and directed the authorities to approve the petitioner's bid or negotiate with the petitioner as the L-1 bidder.
Issues: The main issue was the arbitrary rejection of the petitioner's bid without valid reasons and the violation of Article 14 of the Constitution of India.
Ratio Decidendi: The Court held that the rejection of the bid was arbitrary and unreasonable, violating Article 14 of the Constitution of India. The Court also emphasized the need for fairplay in action and the application of judicial review to prevent arbitrariness or favouritism in contractual matters.
Final Decision: The writ petition was allowed, and the Court directed the authorities to take steps for the approval of the petitioner's bid or negotiation with the petitioner as the L-1 bidder within a specified period.
JUDGMENT
1. Dr. B.R. Sarangi,J. The Petitioner, who is a Special Class Contractor registered under the P.W.D. Contractors Registration Rules, 1967, has filed this writ petition seeking to quash the letter dated 13.06.2022 under Annexure-4, whereby a communication has been made by opposite party no.4 to opposite party no.5 that the bid of the petitioner submitted for the work 'Improvement to Road and C.D. works under PMGSY' for the Package No.OR-02-488/PMGSY-III (B-III) in the district of Balasore has been rejected by opposite party no.3, as per recommendation made in Bid Evaluation Committee Meeting held on 10.06.2022, and direction has been issued to go for rebidding of the said package, and to issue direction to the opposite parties to accept the petitioner's bid for the aforesaid work in terms of recommendation of opposite party no.5, vide letter dated 03.06.2022 under Annexure-3, within a stipulated period.
2. The epitome of facts leading to filing of this writ petition are that opposite party no.4-Chief Engineer, PMGSY in the office of the Engineer-in-Chief, Rural Works, Odisha, Bhubaneswar, invited public tender notice no.1056 dated 11.04.2022 for various packages of works, including the package no.OR-02-488-PMGSY- III(B-III), in the district of Balasore for the work 'Improvement to Road and CD works under Pradhan Mantri Gram Sadak Yojana', in respect of which the petitioner, having requisite eligibility criteria, submitted his bid along with other bidders. The technical bids were opened on 25.05.2022 and the tender evaluation committee, out of four bidders, qualified the petitioner and one Prafulla Kumar Mohapatra-opposite party no.6. Thereafter, the price bids of technically qualified bidders were opened on 03.06.2022, whereafter the petitioner, having quoted 7.50% excess over the estimated value of the work, was declared as 1st lowest bidder. As the petitioner, for having complied with all criteria, was found L-1, opposite party no.5, vide letter dated 03.06.2022, recommended his name to opposite party no.4 for approval. Instead of according approval, opposite party no.4, vide letter dated 13.06.2022, intimated opposite party no.5 that the bid of the petitioner has been rejected by opposite party no.3-CEO, Orissa State Rural Road Agency (OSRRA), as per recommendation of Bid Evaluation Committee in the meeting held on 10.06.2022, and accordingly requested to go for immediate rebidding for the package no. OR-02- 488-PMGSY-III(B-III) observing all formalities. Hence, this writ petition.
3. Mr. P.C. Nayak, learned counsel appearing for the petitioner contended that since the tender of the petitioner was found responsive both in technical and price evaluation and recommended for approval, the same should not have been rejected arbitrarily without any valid reason and without giving any opportunity of hearing to the petitioner. Thereby, it is contended that such action of the authorities is violative of Article 14 of the Constitution of India. It is also contended that the bid submitted by the petitioner, having been qualified in the technical evaluation and declared as the first lowest bidder after opening of the price bid, and recommended for approval without any adverse remarks against him, the direction for rebidding of the very same package of work cannot be sustained in the eye of law. It is further contended that in the same batch of tender even after tendering process is over, the authority has granted deviation of 4.69% over the estimated cost of the tender. Since the petitioner has quoted 7.50% excess over the estimated cost of the tender, the authorities should have approved the bid of the petitioner by giving equal and fair treatment to all the bidders. It is further contended that the present tender estimate was based on SOR 2014 and the petitioner quoted 7.50% excess basing on the market rate as there is abnormal increase in materials in addition to labour charges. If the authorities retendered the package no.OR-
The rejection of bids by public authorities must adhere to the principles of fairness, reasonableness, and non-arbitrariness as mandated by Article 14 of the Constitution of India.
The court upheld the cancellation of a tender based on abnormal pricing, emphasizing the need for administrative fairness and the authority's discretion in tender processes.
Tender evaluation must adhere strictly to the established criteria, and rejection based on erroneous interpretations undermines fairness and legality in public procurement processes.
Point of Law : Where the parties had executed lease deeds incorporating therein the rights, liabilities and obligations of the parties inter se, in the case in hand, the parties had not entered into ....
Judicial review in tender matters is narrowly circumscribed. A court should only interfere if the procuring authority's action is arbitrary, irrational, or malafide. Mandatory tender conditions must ....
Section 14 of Act reads as general rejection of tenders.
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