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1998 Supreme(Sikk) 3

HIGH COURT OF SIKKIM
ANUP DEB
MISS. TSHERING DIKI BHUTIA - Appellant
Versus
STATE OF SIKKIM - Respondents
W. P. 36 Of 1997
Decided On : September 4, 1998

Advocates Appeared:
L.Sherpa, N.B.Kharga, S.P.WANGDI

Government contracts must be awarded in a fair and transparent manner, and the award of a contract must be based on objective criteria and not on irrelevant or irrational considerations.

Headnote:

TENDER AWARD - PUBLIC WORKS - TRANSPARENCY - GUIDELINES - SIKKIM FINANCIAL RULES, 1979 - RULE 27(7) - PUBLIC WORKS CODE, GOVERNMENT OF SIKKIM - RULE 199 - ARTICLE 14 OF THE CONSTITUTION OF INDIA - JUDICIAL REVIEW OF GOVERNMENT CONTRACTS - FAIRNESS AND REASONABLENESS - GEOGRAPHICAL CLASSIFICATION - REASONABLE RELATION TO OBJECT SOUGHT TO BE ACHIEVED - ARTICLE 14 OF THE CONSTITUTION OF INDIA.

Fact of the Case:

Petitioner, a Class-IV contractor, challenged the award of a Jhora Training Works contract to Respondent No. 2, alleging that the tender process was not conducted in a fair and transparent manner and that the work was awarded to Respondent No. 2 in a collusive manner. The petitioner sought to quash the work order and direct the Secretary, Irrigation Department, to issue a fresh tender notice.

Finding of the Court:

The court found that the tender process was not conducted in accordance with the Sikkim Financial Rules, 1979, and the Public Works Code, Government of Sikkim, which required open and public tendering. The court held that the award of the contract to Respondent No. 2 was arbitrary and unreasonable and violated the petitioner's right to equality under Article 14 of the Constitution of India.

Issues: 1. Whether the tender process was conducted in a fair and transparent manner? 2. Whether the award of the contract to Respondent No. 2 was arbitrary and unreasonable? 3. Whether the petitioner's right to equality under Article 14 of the Constitution of India was violated?

Ratio Decidendi: 1. The court held that the tender process was not conducted in a fair and transparent manner because the notice inviting tender was not published in the Sikkim Herald or any other local newspaper as required by the Sikkim Financial Rules and the Public Works Code. 2. The court held that the award of the contract to Respondent No. 2 was arbitrary and unreasonable because there was no evidence that Respondent No. 2 was the lowest bidder or that the work was awarded on the basis of any objective criteria. 3. The court held that the petitioner's right to equality under Article 14 of the Constitution of India was violated because the award of the contract to Respondent No. 2 was based on irrelevant and irrational considerations.

Final Decision: The court quashed the work order awarded to Respondent No. 2 and directed the Secretary, Irrigation Department, to issue a fresh tender notice in accordance with the Sikkim Financial Rules and the Public Works Code.

ANUP DEB, J.

( 1 ) BY filing this writ petition, the petitioner inter alia made prayers for quashing or cancelling the work order awarded to one Palden Sherpa, respondent No. 2 relating to "jhora Training Works near the Bojoghari Junior High School" and for a direction to the Secretary, Irrigation Department, Government of Sikkim, respondent No. 1 to issue notice inviting tenders in the Sikkim Herald at least in two consecutive issues giving a minimum one month's time so that all the eligible contractors could participate in the tenders.

( 2 ) THE case of the petitioner is as follows :-

( 3 ) MISS Tshering Diki Bhutia, the petitioner, is an enlisted contractor with the Sikkim Public Works Department under the category-IV. The Irrigation Department surveyed the land near Bojoghari Junior High School which is adjacent to the land of the petitioner through its engineers and the Irrigation Department assured the father of the petitioner that the work would be awarded on the basis of tender. The father of the petitioner who is a registered contractor visited the office of the Irrigation Department from time to time but the notice inviting tender was not displayed in the office notice board nor in any other conspicuous place and, therefore, notice inviting tender was not published openly. Consequently, it was learnt that the work was awarded to one Palden Sherpa, respondent No. 2. The notice inviting tender was neither published in the Sikkim Herald nor in any other local paper as provided under the Sikkim Financial Rules. The respondent No. 2, Shri Palden Sherpa and his relatives were the tenderers. It is alleged that the father of the respondent No. 2 was working in the Irrigation Department and, therefore, the tender was a collusive tender between the officials of the Irrigation Department and father of the respondent No. 2. The tender was not a genuine tender as the tenderers were respondent No. 2 and his near relatives. The father of the petitioner lodged a protest when the mother of the respondent No. 2 told him that she had obtained the works. It is stated that the work adjacent to the land of the petitioner has not yet started and the work adjacent to the land of Palden Sherpa, the respondent No. 2 had started. If the petitioner or her father knew about the tender they would have participated in the same.

( 4 ) MR. Kharga, learned counsel appearing for the petitioner submitted that the Jhora Training Works at Bojoghari Junior High School in East Sikkim has not yet been completed and the work was awarded on 27-5-1997 and it had to be completed within a period of six months that is 27-11-1997.

( 5 ) A direction was issued to the respondent No. 1 to inform the Court as to whether the aforesaid work of Jhora Training Work at Bhojoghari Junior High School had been completed or not and as to whether the payment in respect of the aforesaid work was made to the contractor.

( 6 ) IN pursuance of the aforesaid order, the Divisional Engineer, North and East, Irrigation Department, Government of Sikkim submitted a reply on 28-5-1998. It was stated that the Jhora Training Work of 30 metres was completed on 9-12-1997 and the final payment was made on 27-1-1998.

( 7 ) THE Superintending Engineer, Irrigation Department has contested the case by filing a counter-affidavit and he made the following preliminary submissions :- (a) The total cost of Jhora Training at Bhojoghari Primary School, East Sikkim contract work is Rs. 2,22,000/ -. (b) The tender notice inviting offer for the aforesaid contract work was made on 5-5-1997. (c) The tender documents was on sale from 7-5-1997 to 9-5-1997 and last date for submission of the duly filled up tender form was fixed on 12-5-1997 at 12. 00 noon. The tender documents was put open at 14. 00 hrs. on 12-5-1997. After the tender process was over, a comparative statement was prepared and forwarded to the Superintending Engineer,irrigation Department on 13-5-1997 and as per the comparative statement, the resp


























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