Partly allowed

M/s Ngarsee Torio Enterprise v. M/s M.K. Enterprise and 4 Ors.

Gauhati HC11 May 2022IA(C)/67/2022

Case brief

AI extract

What is this about?

The Gauhati High Court modified an interim order staying a road construction tender. Relying on Supreme Court precedents against staying infrastructure projects, the court recalled the stay after finding the contract was already awarded to the applicant and the successful bid was not challenged.

What did the court decide?

The interim order dated 06.04.2022 was modified to recall the direction prohibiting further action under the NIT.

M/s Ngarsee Torio Enterprise Vs M/s M.K… — Public Procurement and Tenders | Gauhati HC (2022)

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GAHC040004762022

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) (ITANAGAR BENCH)

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Case No. : IA(C) 67/2022

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1:M/s Ngarsee Torio Enterprise

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Represented by its Proprietor Sri Toge Rina, S/o Sri Kento Rina, R/o Saw Mill Area, Pasighat, East Siang District, Arunachal Pradesh.

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VERSUS

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1:M/s M.K. Enterprise and 4 Ors.

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Represented by its Proprietor Sri Nyamin Kakki, S/o Sri Tanya Kakki, Village Kakki, PO Koyu, PS Nari, District Lower Siang, Arunachal Pradesh.

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2:THE STATE OF AP Represented by its Secretary Rural Works Department Govt. of Arunachal Pradesh Itanagar

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3:The Chief Engineer Rural Works Department Pasighat East Siang District Arunachal Pradesh.

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4:The Superintending Engineer Rural Works Department Pasighat East Siang District Arunachal Pradesh.

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5:The Executive Engineer Rural Works Department Likabali Division Lower Siang District

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Page No.# 2/13

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Arunachal Pradesh

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Advocate for the Petitioner : Taja Garam

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Advocate for the Respondent : A. Tatak, Gimi Tarak

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Linked Case : WP(C) 136/2022

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1:M/s M.K Enterprise Represented by the Proprietor Shri Nyamin Kakki S/o Shri Tanya Kakki Village Kakki PO Koyu PS Nari District Lower Siang Arunachal Pradesh. Ph 8730997738

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VERSUS

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1:THE STATE OF AP and 4 Ors. Represented by the Secretary Rural Works Department Govt. of Arunachal Pradesh Itanagar 2:The Chief Engineer Rural Works Department (Western Zone) Govt. of Arunachal Pradesh Itanagar.

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3:The Superintending Engineer Rural Works Department Pasighat DIstrict East Siang Arunachal Pradesh. 4:The Executive Engineer Rural Works Department Likabali Division District Lower Siang Arunachal Pradesh.

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5:M/s Ngarsee Torio Enterprise

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Represented by its Proprietor Shri Toge Rina S/o Shri Kento Rina R/o Saw Mill Area Pasighat East Siang District Aruanchal Pradesh.

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Advocate for the Petitioner : T T Tara, A. Tatak Advocate for the Respondent : Gimi Tarak, T. Garam

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BEFORE

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HONBLE MR. JUSTICE KALYAN RAI SURANA

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JUDGMENT

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Date : 11-05-2022

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Heard Mr. T. Garam, learned counsel for the applicant as well as Mr. A. Tatak, learned counsel for the opposite party no. 1. There is no representation from the opposite party nos. 2 to 5.

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The applicant herein is the respondent no. 5 in the connected writ petition.

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This Court, while issuing a notice of motion by order dated 06.04.2022, took note of the deviation of the RWD authorities from the required procedure, and as an interim measure provided that no further action was to be taken pursuant to the NIT dated 04.03.2022. The instant application has been filed under Article 226 (3) of the Constitution of India for vacation/modification/alteration of the said interim order dated 06.04.2022, passed in WP(C) No. 136 (AP) of 2022.

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The learned counsel for the applicant has submitted that as per the NIT issued on 04.03.2022, the last date of submission of online bid was 11.03.2022 at 1600 Hours and the time of opening of the technical bid was mentioned as 14.03.2022 at 1100 Hours. However, by a Corrigendum

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dated 10.03.2022, the last date of submitting online bid document was extended from 11.03.2022 to 14.03.2022 up to 1200 Hours and the time of opening of the Technical Bids was re-scheduled at 1100 hours on 15.03.2022. Thereafter, on 14.03.2022, the Corrigendum which has been impugned in the connected writ petition was issued, wherein it was mentioned that due to some technical (server) problem, the time for uploading Technical Bids in connection with the concerned NIT dated 04.03.2022 was extended till 15.03.2022 up to 1200 hours and the date of opening of the Technical Bids was postponed to 16.03.2022 at 1100 Hours.

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It is submitted that on 16.03.2022, the bids were opened in the presence of the parties who had submitted the bids which included the opposite party no. 1 and on 19.03.2022, the Technical Bids were evaluated and Minutes were prepared wherein the bid of opposite party no. 1, i.e. M/s. M. K. Enterprise was found to be non-responsive. Thereafter, the Minutes of Financial Bid opening was made on 21.03.2022 at 1110 Hours onwards and the bid of the applicant was recorded as L1 bidder with the bid price of Rs. 2,24,64,418.680/-. It is submitted that it was followed by issuance of formal letter for acceptance dated 22.03.2022 by the concerned Executive Engineer, followed by an agreement dated 26.03.2022 and thereafter, on 26.03.2022, the applicant was issued a notice to proceed with the work. It is projected that at the stage when the applicant was mobilising men and materials to proceed with the work, the connected writ petition was filed and interim order dated 06.04.2022 was passed.

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In support of his submission that the Court ought not to interfere with the tender process, reliance was placed on the order dated

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21.03.2022 passed by the Supreme Court in the case of M/s. N.G. Projects Limited vs. M/s. Vinod Kumar Jain & Ors. in Civil Appeal No. 1864 of 2022.

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Per-contra, the learned counsel for the opposite party no. 1 has submitted that in the NIT dated 04.03.2022, at Clause-3 it was specifically mentioned that the Department does not take any responsibility for delay caused due to non-availability or slow internet connection or network, etc. for online bids. Accordingly, it is submitted that there was no cogent reasons for the RWD authorities to issue the Corrigendum dated 14.03.2022, wherein on the ground that due to some technical (sever) problem, the time for uploading Technical Bids was made only to favour some contractors, which was not warranted and accordingly, it is submitted that the decision to extend the time for uploading tender bids was in aberration of the tender clause and conditions and therefore, the entire tender process was vitiated. It is further submitted that the decision to extend time to upload Technical Bids is arbitrary and irrational and also mala fide and intended to favour someone. Accordingly, it is submitted that public interest is affected.

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In support of his submission, heavy reliance was placed on the case of Jagdish Mandal vs. State of Orissa & Ors., (2007) 14 SCC 517. It is submitted that the Court can examine the decision-making process and interfere if the process is found vitiated by mala fide, unreasonableness and arbitrariness.

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In this case, it is seen that by Corrigendum dated 10.03.2022, the last date of submitting online bid was extended from 11.03.2022 to 14.03.2022 up to 1200 Hours and the opening of Technical Bids was rescheduled at 1100 Hours on 15.03.2022. On the rescheduled date of submitting of online bids, i.e. on 14.03.2022, the Executive Engineer,

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RWD, Likabali Division, further extended the time for uploading Technical Bids till 15.03.2022 up to 1200 Hours and the opening of Technical Bid was postponed to 1100 Hours of 16.03.2022. In the writ petition, it is not the case of the opposite party no. 1 that the Corrigendum dated 14.03.2022 was not uploaded in the website. It is further seen from the document appended to the interlocutory application that when the Technical Bid was opened on 16.03.2022, the opposite party no. 1 was duly represented. In the writ petition, it is not the pleaded case of the opposite party no. 1 that he was unaware of the Technical Bid opening on 16.03.2022 and that he was not present or represented. As per the Minutes of Technical Bid evaluation which was digitally signed on 19.03.2022 at 18.22.09 Hours, the bid of the opposite party no. 1 was found to be non-responsive and the reasons assigned were (a) Section-4 Serial No. 17 of Special Terms & Conditions of Contract, (b) Clause-4.4 B (a) (ii) of Section-2 (ITB) and thereafter, as per the Minutes of Financial Bid Opening, which was digitally signed on 21.03.2022 at 12.53.57 Hours, the applicant was found to be the L1 bidder. In the connected writ petition, it is not the pleaded case of the opposite party no. 1 that the decision taken in the Minutes of Technical Bid opening and Financial Bid opening was not uploaded in the website. Although the learned counsel for the Opposite party no. 1 has verbally submitted that these documents were not uploaded in website, but it is not the pleaded case of the opposite party no. 1 in the writ petition.

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The connected writ petition was filed on 04.04.2022 and before the said date, i.e. on 26.03.2022, not only the applicant had signed an agreement with the competent authority of the RWD in respect of the contract work, but on the same date, the applicant was also given a notice

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to proceed with the work. In this regard the Court is inclined to observe that while moving the writ petition on 06.04.2022, this Court had obviously relied on the statement made on the paragraph 14 of the writ petition wherein it was mentioned that the works was yet to be awarded to any firm. In the considered opinion of the Court, had the Court been made aware of the subsequent development of the opposite party no. 1 having been declared Technically not responsive and of the award of the work to the applicant, followed by the notice to proceed with the work, the consideration of the court would have definitely been different.

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The Court is not inclined to touch on the merit of the matter, however the learned counsel for the opposite party no. 1 has vehemently argued regarding the propriety of the RWD authorities in extending time for uploading of the bids to project that there was arbitrariness on the part of the RWD authorities and that the extension of time was vitiated by mala fide and it was further submitted that if no opportunity would have been granted to the applicant and others to upload their tender up to the time provided in the NIT, it would have resulted in the cancellation of the bid and accordingly, it was submitted that if the tender process is cancelled, the applicant would get an opportunity to once again submit his bid in the process. Therefore, the Court has been compelled to make an observation in this regard.

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Notwithstanding that for the purpose of interim order, this Court had issued a direction to the RWD authorities to provide instructions as to whether there was any complaint or the authorities had suo moto extended the last date of submission of Technical Bid, in the opinion of the Court, the said prayer may have relevance for the purpose of final decision in the matter, but the fact remains that the opposite party no. 1 was

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present and represented when the bid was opened on the appointed time as per the Corrigendum, i.e. 16.03.2022 at 11 am. However, in the representation of the opposite party no. 1 which is appended to the writ petition as Annexure-6, it is alleged that the opposite party no. 1 with other participating firms were not called to participate in the opening of the Technical Bids and it was represented that by depriving them of the basic right to be present in the opening of the bid, illegal means was adopted by the concerned Executive Engineer to award the tender work to a particular bidder. In this regard, the Court finds that in this interlocutory application, the Minutes of the Technical Bid opening dated 16.03.2022 has been annexed, it has been clearly mentioned therein that the bids have been opened and downloaded in the presence of the bidders/representatives. Nonetheless, the opposite party No. 1 has not come forward to amend the writ petition and to challenge the correctness of the Minutes of the Technical Bid opening. In the absence to any challenge, a mere statement in the representation that the opposite party no. 1 was not called during bid opening would not be sufficient to extend the interim order. Moreover, in this interlocutory application, documents have been appended to show that as per the Minutes of Technical Bid opening, the opposite party no. 1 was found technically non-responsive and that as per Minutes of the Financial Bid opening, the applicant was declared L-1 bidder and that pursuant to letter of acceptance of agreement dated 26.03.2022, the applicant was provided a formal notice to proceed with the work. None of these documents are under challenge in the present writ petition. Therefore, as the contract has already been awarded to the applicant, the Court finds no reason to extend the interim order dated 06.04.2022.

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The petitioner is seeking intervention of this Court for exercising power of judicial review over the Corrigendum dated 14.03.2022. Assuming that the petitioner may have merit in the said claim, yet the work has already been awarded to the lowest bidder, which is not under challenge. Hence, no ground has been made out to follow the principles laid down by the Hon’ble Supreme Court in the case of Jagdish Mandal (supra) and to extend the interim order dated 06.04.2022 in the absence of challenge to the award of contract.

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It is pertinent to mention herein that the Court is inclined to follow the ratio laid down in the case of M/s. N.G. Projects Limited (supra), wherein not only the case of Jagdish Mandal (supra) has been discussed, but the Court has also followed its previous decision in the case of Uflex Limited Vs. Government of T.N., (2022) 1 SCC 165, where the Supreme Court of India took notice of the ground reality that almost no tender has remained unchallenged. Paragraph 15 of the said judgment is quoted hereinbelow:

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“...15. In Uflex Ltd. v. Government of T.N. 8 , this Court stated that the enlarged role of the Government in economic activity and its corresponding ability to give economic “largesse” was the bedrock of creating what is commonly called the “tender jurisdiction”. The objective was to have greater transparency and the consequent right of an aggrieved party to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India beyond the issue of strict enforcement of contractual rights under the civil jurisdiction. However, the ground reality today is that almost no tender remains unchallenged. Unsuccessful parties or parties not even participating in the tender seek to invoke the jurisdiction of the High Court under Article 226 of the Constitution. The Court held as under:-

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“2. The judicial review of such contractual matters has its own limitations. It is in this context of judicial review

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of administrative actions that this Court has opined that it is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. The purpose is to check whether the choice of decision is made lawfully and not to check whether the choice of decision is sound. In evaluating tenders and awarding contracts, the parties are to be governed by principles of commercial prudence. To that extent, principles of equity and natural justice have to stay at a distance. [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517].

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We cannot lose sight of the fact that a tenderer or contractor with a grievance can always seek damages in a civil court and thus, “attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted”. [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517]

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We must begin by noticing that we are examining the case, as already stated above, on the parameters discussed at the inception. In commercial tender matters there is obviously an aspect of commercial competitiveness. For every succeeding party who gets a tender there may be a couple or more parties who are not awarded the tender as there can be only one L-1. The question is should the judicial process be resorted to for downplaying the freedom which a tendering party has, merely because it is a State or a public authority, making the said process even more cumbersome. We have already noted that element of transparency is always required in such tenders because of the nature of economic activity carried on by the State, but the contours under which they are to be examined are restricted as set out in Tata Cellular [Tata Cellular v. Union of India, (1994) 6 SCC 651] and other cases. The objective is not to make the Court an appellate authority for scrutinising as to whom the tender should be awarded. Economics must be permitted to play its role

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Page No.# 11/13 for which the tendering authority knows best as to what is suited in terms of technology and price for them.”

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Moreover, the Supreme Court of India has also referred to the provisions of Section 41 of the Specific Relief Act and thereafter, observed in paragraphs no. 21, 22, 23 as well as 26 thereof, as follows:

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“...21. Since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project. Such provision should be kept in view even by the Writ Court while exercising its jurisdiction under Article 226 of the Constitution of India.

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The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e., not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was malafide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder.

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In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the presentday economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine

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as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfer20 ing in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work.”

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“...26. A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.”

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In view of the herein before referred directions contained in the case of M/s. N.G. Projects Limited (supra) and taking into account the fact that the tender work has already been awarded to the applicant, the Court is inclined to allow this interlocutory application and to modify the interim order dated 06.04.2022 by recalling the directions contained therein to effect that “no further action to be taken pursuant to the NIT dated 04.03.2022” in view of the fact that the said NIT has already been converted into a contract agreement between the applicant and the RWD.

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Accordingly, there would be no impediment for the applicants and the RWD to proceed with the work.

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The observation made in this order is only for the purpose of decision in the interlocutory application and therefore, the parties shall not

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be prejudiced when the writ petition is heard on merit.

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JUDGE

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Comparing Assistant

M/s Ngarsee Torio Enterprise v. M/s M.K. Enterprise and 4 Ors.

Case brief

What is this about?

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M/s Ngarsee Torio Enterprise v. M/s M.K. Enterprise and 4 Ors.

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