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2022 Supreme(Sikk) 48

HIGH COURT OF SIKKIM
Bhaskar Raj Pradhan, J.
Sonam Tsewang Bhutia & Ors. - Appellants
Versus
State of Sikkim Through, The Chief Secretary & Ors. - Respondents
W.P. (C) No. 34 of 2022
Decided On : 02-12-2022

Advocates appeared:
Mr. Karma Thinlay Namgyal, Senior Advocate with Mr. K.T. Gyatso and Mr. Yashir N. Tamang, Advocates., for the Petitioners; Dr. Doma T. Bhutia, Additional Advocate General., for the Respondent Nos. 1 to 4; Dr. Doma T. Bhutia, Senior Advocate with Mr. S.K. Chettri, Advocate., for the Respondent No.5; Mr. Zangpo Sherpa and Ms. Anjali Shah, Advocates., for the Respondent No.6; Mr. Bhusan Nepal, Legal Aid Counsel., for the Respondent Nos. 7 & 8

Judicial intervention is required to address malafide conduct in public tender processes, emphasizing fairness, transparency, and adherence to legal guidelines.

Headnote:(A) Sikkim Public Works Manual, 2009 - Violation of tender process requirements - Quashing of bid opening summary and work orders challenged; the petitioners alleged favoritism by Panchayat Sabhapati towards relatives in the awarding of tenders. (Para 1-5)

(B) Article 14 of the Constitution - Need for transparency in government contracts; the court emphasized that the tender process was conducted illegally and arbitrarily. (Para 22)

(C) Article 226 of the Constitution - The court's power to issue writs is discretionary; notwithstanding delays, judicial intervention is warranted in cases of serious illegality. (Para 34)

Facts of the case:
The petitioners, local contractors, challenged the awarding of tenders under a rural water project, citing a secretive bidding process favoring relatives of the Panchayat Sabhapati. The work orders were issued without proper public notification or competition, contrary to mandated public works guidelines. (Paras 1-5, 11-12)

Findings of Court:
The court held that the tendering process was a sham, dismissing claims of proper procedure and public interest, ultimately quashing the work orders and ordering completion through departmental means. (Paras 35-36)

Issues: Whether the petitioners had standing to challenge the tender process and if the actions of the Panchayat Sabhapati constituted favoritism violating public contract norms. (Paras 11, 12, 34)

Ratio Decidendi: The court found the tender process was conducted in malafide manner, creating an illusion of competition while effectively excluding eligible bidders, mandating judicial intervention to uphold the rule of law. (Paras 22, 34)

Result: Writ petition allowed, work orders quashed, and the State directed to complete the projects departmentally.

Table of Content
1. challenge to the tender process (Para 1 , 2 , 3 , 4)
2. arguments regarding locus standi and tender process legality (Para 5 , 6 , 10 , 14)
3. observations on the tender process and party standing (Para 11 , 12 , 19 , 22)
4. judicial discretion in upholding fundamental rights (Para 18 , 30 , 34)
5. final orders on quashing work orders and remedial measures (Para 35 , 36)

JUDGMENT

Bhaskar Raj Pradhan, J. - The petitioners challenge the tender process and seek quashing of the bid opening summary dated 14.03.2022 and eight work orders bearing Memo Nos. 1 to 8/WO/JJM/BAC/NDK/2021-22 all dated 29.03.2022 (work orders) awarded in favour of respondent nos. 6, 7 and 8 by the State-respondents after the decision of the Gram Sabha of Gnathang Gram Panchayat Unit headed by the respondent no.5 (the Panchayat Sabhapati) in its meeting held on 14.03.2022 on the ground that he favoured them as they were his relatives. The petitioners also seek re-tender of all the works.

2. These work orders relate to Rural Water Supply Schemes at Changu, Chipsu, Thegu, Yakla, Sherathang, Kupup and Gnathang.

3. According to the petitioners, the petitioner nos. 1, 2 and 3 are eligible Grade-IV contractors residing in Gnathang GPU and the petitioner no.4 is a Grade-II contractor and a former Panchayat of Gnathang GPU. The petitioners alleged that the Panchayat Sabhapati was related to respondent nos. 6, 7 and 8 who ultimately were awarded the tenders by an arbitrary, illegal and malafide process.

4. It is the specific allegation of the petitioners that the Panchayat Sabhapati conducted a closed tender process, failed to give wide publicity to the Notice Inviting Tender (NIT), ensured that very little time was available to prospective bidders to participate, conducted the Panchayat Gram Sabha as its Sabhapati although he was fully aware that the bidders who participated in the tenders were all his close relatives and granted the tenders to them i.e. the respondent nos. 6, 7 and 8 in complete disregard to all settled principles of law governing tenders. It is the further case of the petitioners that the respondent nos. 6, 7 and 8 bid in the tender process for the 8 tenders in such a manner that ensured that the three of them would get one tender or the other and no other. Further, it is also their case that the respondent nos. 6, 7 and 8 participated in tenders pertaining to wards they did not belong to with the active involvement of the Panchayat Sabhapati in violation of the Sikkim Public Works Manual, 2009 as amended in the year 2018.

5. The State-respondents as well as respondent nos. 6, 7 and 8 vehemently object to the examination of the merits of the case on the ground that the petitioners did not have the locus standi to challenge the tender process as they did not participate. They also submit that there was considerable delay in the petitioners approaching this Court due to which work orders have been issued in favour of respondent nos. 6, 7 and 8 creating third party rights. While the State-respondents plead that the cement oriented works have since been completed except for laying of High Density Polyethylene Pipes (HDPE Pipes) it is the stand of the respondent no. 6 that he has completed 85% of the works; respondent no. 7 that she has completed 60% of the works; and respondent no.8 that he has completed 50% of the work. It is the specific stand of the State-respondents that there is no law which requires the Panchayat Sabhapati to recues himself from participating in the tender process merely because the respondent nos. 6, 7 and 8-the successful bidders were his relatives. It is their stand that since the Rural Water Supply Scheme is Jal Jiwan Mission, the Sikkim Public Works Manual, 2009 is not strictly applicable and they are governed by the Implementation Manual for Gram Panchayat Development Plan issued by the Rural Management and Development Department (the Implementation Manual). It is urged that the Jal Jiwan Mission is a laudable mis

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