Back
IN THE HIGH COURT OF MADHYA PRADESH
(DIVISION BENCH)
Sujoy Paul and Shailendra Shukla, JJ.
Krsnaa Diagnostics Pvt. Ltd. v. State of M.P. & Others
Writ Petition No. 16878 of 2020 (Indore); Decided on 22.2.2021
(1) Constitution of India -- Art. 226 -- scope of judicial review -- contractual matter -- notice inviting tender -- existence of power and exercise of power are two different things -- mere existence of power does not insulate ultimate order passed in exercise of such power -- whether power is exercised in justifiable manner is always subject to judicial review -- despite existence of power in NIT, it is duty of Court to examine whether decision-making authority (i) exceeded its power, (ii) committed error of law,(iii) breached rules of natural justice, (iv) arrived to decision which no reasonable authority would have reached (Wednesbury principle of reasonableness), (v) abused its power -- enabling provision does not make ultimate order passed in exercise of such power as sacred or sacrosanct. [Paras 18 & 19]
(2) Constitution of India -- Art. 226 -- scope of judicial review -- notice inviting tender -- tender scrapped on basis of clause permitting Department to cancel NIT without assigning reason -- judicial review of impugned order permissible -- enabling provision does not insulate process and impugned order from judicial review despite the fact that NIT contained phrasethat no reasons are required to be given for invoking said clause -- this does not mean that without any reasonsor justifiable reasons, power under said clause can be invoked. (1994) 6 SCC 651, (2015) 15 SCC 137, (1979) 3 SCC 489, (1997) 1 SCC 53, (2012) 5 SCC 443, (2013) 5 SCC 252, (1993) 1 SCC 445, (2005) 6 SCC 138, (2012) 8 SCC 216, (2016) 14 SCC 172, (1999) 1 SCC 492, (2000) 2 SCC 617, (2007) 14 SCC 517, (2007) 8 SCC 1, (2014) 3 SCC 493 and (2014) 11 SCC 288 followed. [Para 20]
(3) Contract -- alteration of conditions -- NIT issued by department/respondent No.3 -- its conditions could have been altered by respondent No.3/competent authority only -- consultancy agency/respondent No.2 neither justified nor competent in revising tender clauses. [Para 26]
(4) Contract -- cancellation -- decision plausible -- not hit by Wednesbury principles -- nor against public interest -- no infirmity or illegality in decisionto scrap contract. [Para 26]
(5) Contract -- judicial review -- scope -- judicial review permissible on aspect of arbitrariness, unreasonableness and on touchstone of Wednesbury principle -- public interest also essential element. [Para 28]
(6) Tender -- cancellation of notice inviting tender -- introduction of revised tender clauses are invariance with existing tender clauses -- made entire process vulnerable, therefore,decision to scrap tender cannot be said to be arbitrary,unreasonable or against public interest -- no interference. (2001) 2 SCC 451, (1993) 1 SCC 71, (2011) 5 SCC 103 2011 (2) JLJ 167 (SC) and (2014) 3SCC 760 referred to. [Para 28]
¼1½ Òkjr dk lafoèkku & vuqPNsn 226 & U;kf;d iqufoZy¨du dh O;kfIr & lafonkRed ekeyk & fufonk vkea=.k lwpuk & 'kfDr dh fo|ekurk v©j & 'kfDr dk ç;¨x] n¨u¨a fÒUu ckrsa gSa & 'kfDr dh fo|ekurk ek= ls ml 'kfDr d¨ ç;qDr dj ikfjr vafre vkns'k vÒs| ugha g¨ tkrk & 'kfDr dk ç;¨x U;k;¨fpr jhfr ls fd;k x;k gS ;k ugÈ] bldk loSn U;kf;d iqufoZy¨du fd;k tk ldrk gS & fufonk vkea=.k lwpuk esa 'kfDr dh fo|ekurk d¢ ckotwn] ;g ij[kuk U;k;ky; dk drZO; gS fd D;k fofu'p; çkfèkdkjh us ¼1½ viuh 'kfDr d¢ ijs dk;Z fd;k] ¼2½ fofèk dh xyrh dh] ¼3½ uSlfxZd U;k; d¢ fu;e¨a dk Òax fd;k] ¼4½ ,slk fofu'p; fd;k t¨ d¨Ã Òh ;qfDr;qDr çkfèkdkjh ugÈ djrk ¼;qfDr;qDrk dk osUlcjh fl)kar½] ¼5½ viuh 'kfDr dk nq#i;¨x fd;k & lkeF;Zdkjh micaèk ml 'kfDr d¨ ç;qDr dj ikfjr vafre vkns'k d¨ ifo= ;k ije ikou ugha cukrkA ¼iSjk 18 ,oa 19½
¼2½ Òkjr dk lafoèkku & vuqPNsn 226 & U;kf;d iqufoZy¨du dh O;kfIr & fufonk vkea=.k lwpuk & d¨Ã dkj.k fn, fcuk fufonk vkea=.k lwpuk jn~n djus dh vuqKk foÒkx d¨ nsus okys [kaM d¢ vkèkkj ij fufonk jn~n & vkf{kIr vkns'k dk U;kf;d iqufoZy¨du vuqKs; & bl rF; d¢ ckotwn fd fufonk vkea=.k lwpuk esa ;g okD;ka'k varfoZ"V Fkk fd mDr [kaM dk vkJ; ysus d¢ fy, d¨Ã dkj.k fn;k tkuk vko';d ugha] lkeF;Zdkjh micaèk çfØ;k v©j vkf{kIr vkns'k d¨ U;kf;d iqufoZy¨du d¢ laca/k esa vÒs| ugha cukrk & mldk vFkZ ;g ugha fd mDr [kaM d¢ vèkhu 'kfDr dk vkJ; fcuk fdlh dkj.k ;k U;k;¨fpr dkj.k d¢ fy;k tk ldrk gSA ¼1994½ 6 ,l lh lh 651] ¼2015½ 15 ,l lh lh 137] ¼1979½ 3 ,l lh lh 489] ¼1997½ 1 ,l lh lh 53] ¼2012½ 5 ,l lh lh 443] ¼2013½ 5 ,l lh lh 252] ¼1993½ 1 ,l lh lh 445] ¼2005½ 6 ,l lh lh 138] ¼2012½ 8 ,l lh lh 216] ¼2016½ 14 ,l lh lh 172] ¼1999½ 1 ,l lh lh 492] ¼2000½ 2 ,l lh lh 617] ¼2007½ 14 ,l lh lh 517] ¼2007½ 8 ,l lh lh 1] ¼2014½ 3 ,l lh lh 493 rFkk ¼2014½ 11 ,l lh lh 288 vuqlfjrA ¼iSjk 20½
¼3½ lafonk & 'krksZ dk mikarj.k & fufonk vkea=.k lwpuk foÒkx@çR;FkÊ Øekad 3 }kjk tkjh & mldh 'krsZ çR;FkÊ Øekad 3@l{ke çkfèkdkjh }kjk gh mikarfjr dh tk ldrÈ FkhA ijke'kZ vfÒdj.k@çR;FkÊ Øekad 2 }kjk fufonk [kaM¨a dk iqujh{k.k u U;k;¨fpr v©j u og bld¢ fy, l{ke ghA ¼iSjk 26½
¼4½ lafonk & jn~n dh tkuk & fofu'p; laÒkO; & osUlcjh fl)kar¨a ls Vdjko ugha & y¨d fgr d¢ fo#) Òh ugha & lafonk jn~n djus d¢ fofu'p; esa d¨Ã 'kSfFkY; ;k voSèkrk ughaA ¼iSjk 26½
¼5½ lafonk & U;kf;d iqufoZy¨du & O;fIr & euekuh d¢ igyw ij] vk;qfDr;qDrk ij rFkk osUlcjh fl)kar dh dl©Vh ij U;kf;d iqufoZy¨du vuqKs; & y¨dfgr Òh vfuok;Z rRoA ¼iSjk 28½
¼6½ fufonk & fufonk vkea=.k lwpuk jn~n dh tkuk & iqujhf{kr fufonk [kaM¨a dh çfof"V fo|eku fufonk daM¨a ls folaoknh & laiw.kZ çfØ;k d¨ vky¨puh; cuk fn;k] blfy,] fufonk jn~n djus dk fofu'p; euekuk] v;qfDr;qDr vFkok y¨dfgr d¢ foijhr ugha dgk tk ldrk & gLr{ksi ughaA ¼2001½ 2 ,l lh lh 451] ¼1993½ 1 ,l lhlh 71] 2011 ¼2½ ts ,y ts 167 ¼mPpre U;k;ky;½ rFkk ¼2014½ 3 ,l lh lh 760 fofufnZ"VA ¼iSjk 28½
ORDER
Paul, J. -- 1. The petitioner, a private limited company registered under the Companies Act, 1956 has filed this petition under Article 226 of the Constitution to assail the letter dated 7.10.2020 (Annexure P/9) whereby it was intimated that the tender is scrapped and the bank guarantees furnished by him were returned. It is further prayed that respondents be directed to proceed further in the NIT and execute the agreement with the petitioner by issuing letter of acceptance for Cluster (II), (III) and (IV). By amending the petition, new NIT is also called in question.
2. Draped in brevity, the admitted facts between the parties are that respondent No.3 floated an NIT dated 10.12.2019 for setting up, operating, managing and maintenance of computerized tomography – CT and MRI diagonostic facility at six government medical colleges namely Datia, Khandwa, Ratlam, Vidisha, Shahdol and Shivpuri with four more colleges namely Rewa, Sagar, Indore and Jabalpur. The aforesaid 10 colleges were divided in four different clusters. The NIT issued by the respondent No.3 (Director, Medical Education) is Annexure P/3.
3. Respondent No.2 issued amendment dated 7.1.2020 in the aforesaid NIT and amended last date of submission of bid closing date, time etc. Thereafter another amendment was issued by respondent No.2 on 20.1.2020 (Annexure P/4) whereby last date of submission of online bid was changed and it was made clear that “the bidder who quotes minimum percentage on prevailing CGHS list of Bhopal Circle will be awarded the project”.
4. The petitioner submitted the bid on 3.2.2020. The Committee appointed by the department opened the technical bid of all the bidders and found petitioner’s bid as responsive and accordingly approved the same, through the e-portal. The consequential message was conveyed to petitioner through an e-mail dated 10.5.2020 by stating that financial bid will be opened on 11th May, 2020. The Committee later-on opened financial bids of petitioner and other bidders and after due evaluation of technical and financial bid for all clusters, the petitioner came out as offering minimum percentage (highest discount) on prevailing Bhopal CGHS rates as per Clause 16 as amended, for Cluster II, III and IV of the NIT. The tender summary report for all clusters was prepared. The petitioner came out as L-1 in Cluster II, III and IV. The petitioner placed reliance on tender summary report (Annexure P/6) (collectively) of all clusters in support of his submission that petitioner offered minimum discount to the respondents in accordance with provisions of amended NIT.
5. The stand of petitioner is that he did not receive any letter of acceptance and, therefore, after waiting for some time preferred representations dated 22.5.2020, 17.6.2020, 8.7.2020 for issuance of letter of acceptance which are collectively marked as Annexure P/7. These letters were followed by yet another representation dated 12.10.2020 (Annexure P/8).
6. Shri Piyush Mathur, learned Sr.Counsel assisted by Shri Manu Maheshwari, learned counsel submits that impugned order dated 7.10.2020 (Annexure P/9) issued by respondent No.2 came as a bolt from blue to the petitioner whereby it was informed that tender has been scrapped and accordingly BGs are returned herewith. Learned Sr.Counsel submits that the decision to scrap the NIT is wholly arbitrary, unjust, unreasonable and unconstitutional. The decision runs contrary to settled legal position. The principles of legitimate expectation were grossly violated. The cancellation process of NIT is pregnant with serious procedural improprieties. The decision to cancel the tender is against public interest which should be paramount consideration in a matter of this nature. The reason of cancellation spelled out in order dated 27.6.2020 (Annexure R-2/3) are bad in law.
7. To elaborate, learned Sr.Counsel for petitioner
Judicial review in public procurement is limited; courts refrain from interference unless clear evidence of arbitrariness or bad faith is established.
The main legal point established in the judgment is that the acceptance of a cross-offer in a tender process does not necessarily result in a concluded and binding contract. The court emphasized the ....
Important Point – Government Contract – Tender – Public authorities have to ensure that no bias, favouritism or arbitrariness are shown during bidding process and that entire bidding process is carri....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
