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2022 Supreme(Manipur) 72

IN THE HIGH COURT OF MANIPUR AT IMPHAL
Sanjay Kumar, M.V. Muralidaran, JJ.
Devendra Construction Company - Appellant
Versus
State Of Manipur & Ors. - Respondents
Writ Appeal No. 66 of 2021 with MC (WA) No. 119 of 2021
Decided On : 10-03-2022

Advocates appeared:
Mr.Om Prakash Mehta, Advocate, with Mr.R.K.Kulajit, Mr.Prateek Gattali & Mr.Phalgun Buch, Advocates, for the Appellant; Mr.N.Kumarjit, Advocate General, Manipur, for the Respondent Nos.1 & 2; Mr.H.S.Paonam, Sr.Advocate & Mr.S.Gunabanta, Advocate, for the Respondent No.3

Headnote:(A) Constitutional Law - Article 14 - Judicial Review - The State's actions in public procurement must conform to principles of fairness and reasonableness, avoiding any arbitrary exclusion of bidders based on hyper-technical grounds. (Paras 27 to 32)

(B) Procurement - The failure to provide bidders a chance to rectify minor deficiencies in technical bids, resulting in the exclusion of competent bidders, undermines the aim of obtaining competitive tenders. (Paras 24 to 31)

Facts of the case:
The appellant's bid for a water supply project was rejected on technical grounds related to financial documentation. The rejection led to a successful bidder being awarded the contract. The appellant sought judicial intervention, claiming unfair treatment.

Findings of Court:
The court found that the rejection was based on non-material discrepancies and noted that the authorities acted in an overly stringent manner.

Issues: Whether the exclusion of the appellant's bid was justified and whether the state acted fairly in its procurement process.

Ratio Decidendi: The court emphasized that strict adherence to bid formats should not prevent fair competition and that the state must allow remedies for minor deficiencies to fulfill its obligation of fair play.

Result: The appellant's rejection was set aside, and the matter was remitted for reconsideration of all bids.

Table of Content
1. background of the jal jeevan mission and tender details. (Para 1 , 2)
2. technical evaluation criteria and its implications. (Para 4 , 11 , 14 , 16)
3. appellant's contention on the rejection of the tender. (Para 5 , 6)
4. issues in compliance with tender submissions. (Para 13 , 15 , 17 , 18)
5. judicial review principles on administrative discretion. (Para 22 , 24 , 29)
6. court's order regarding the reconsideration of bids. (Para 30 , 31 , 32)

JUDGMENT

Sanjay Kumar, CJ. - The Department of Drinking Water and Sanitation, Ministry of Jal Shakti, Government of India, launched the 'Jal Jeevan Mission' to provide functional water-tap connections to every household in the country by the year 2024. In turn, the State of Manipur undertook the Manipur Water Supply Project at a projected cost of Rs.3064.58 Crore with the aid and assistance of the New Development Bank (NDB), a bank established by the BRICS nations at Shanghai, China. The State of Manipur aims at establishing an Integrated Water Supply Project for Imphal Planning Area Phase-3 and supply of drinking water to 25 towns and to 1731 habitations in the rural areas of Manipur.

As recommended by the NDB and in order to attract international competitive bidding, the project was divided into 14 procurement packages. One such procurement package is the Manipur Water Supply Project [SH: Providing Drinking Water Supply to other Towns (13 nos.) - Works Package: OTP P-VI (W)]. Invitation for bids for this package was issued by the Public Health Engineering Department (PHED), Government of Manipur, under NIT No.CE/PHE/3-94/NDB(W)/P-VI/2020/4013 dated 27.02.2021. The NIT discloses that the approximate value of the work was Rs.168.36 Crore and the period for completion was projected as two and a half years after the date of issue of the work order. The NIT also provided that the bids for the work were to be submitted in a two-bid system, viz., a technical bid and a financial bid, on a turn-key basis by reputed firms/contractors incorporated in any of the member countries of the NDB.

2. M/s. Devendra Construction Company, Jodhpur, the appellant partnership firm, and M/s. Keystone Infra Private Ltd., Hyderabad, the third respondent company, along with four other concerns, participated in the tender process in relation to this package. However, the appellant firm's tender was rejected at the threshold vide e-mail dated 24.09.2021. It was stated therein that its technical bid had been rejected during the technical evaluation by the duly constituted Committee for the reason - 'technically not qualified'. Aggrieved thereby, the appellant firm approached this Court by way of W.P(C) No.672 of 2021. Its prayer therein was to direct the authorities of the PHED, Government of Manipur, to provide reasons for rejection of its technical bid vide e-mail dated 24.09.2021; to provide it reasonable time to file a reply; to direct the said authorities to pass a speaking order after considering the reply and the representation filed by it, in case the decision to reject its bid still continued to hold the field; to direct the said authorities to open its financial bid in case they withdrew the e-mail dated 24.09.2021 and to allot the work to it in case its bid was the lowest amongst all the bidders; to grant liberty to it to challenge the speaking order passed by the authorities within ten working days from its communication, in case the decision to reject its bid continued and to direct the authorities not to finalize the bid till then; and to award costs. The appellant firm also sought interim relief by staying the finalization of the bid till disposal of the writ petition. An interim order to that effect was granted on 05.10.2021.

3. However, by Judgment and Order dated 29.10.2021, a learned Judge of this Court dismissed the writ petition and vacated the interim order. On the very same day, viz., 29.10.2021, the authorities of the PHED issued a work order in favour of the third respondent compan

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