Allowed

M/s Broad Son Commodities Pvt. Ltd. v. The State Of Bihar and Ors.

Patna HC6 Mar 2014L.P.A/311/2014

Case brief

AI extract

What is this about?

Sand-mining bidders omitted earnest-money bank drafts from their technical-bid envelopes. The court held that placement there was an essential tender condition and that financial bids could not be opened to cure the defect. It allowed the appeals, set aside the impugned judgment and orders, and dismissed the writ petitions.

What did the court decide?

Impugned judgment and orders set aside; the three writ petitions dismissed.

M/s Broad Son Commodities Pvt. Ltd. Vs The State… — Mining and Natural Resources | Patna HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT PATNA

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LETTERS PATENT APPEAL NO.316 OF 2014

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CIVIL WRIT JURISDICTION CASE NO. 1273 OF 2014

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M/S Petroleum through its Proprietor Sri Talat Siddique, Village and P.O. Khiribandh, P.S. Jagdishpur, District Bhagalpur.

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Dhurub Narayan Prasad, Son of Late Madhu Lal Mandal, Resident of Village Jamgaon, P.O. Baluachak, P.S. Jagdishpur, District Bhagalpur.

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.... .... Appellants

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Versus

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The State of Bihar through the Principal Secretary-cumCommissioner, Department of Mines and Geology, Patna.

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The Divisional Commissioner, Bhagalpur.

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The District Magistrate-cum-Collector, Banka.

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The Mining Officer, Banka.

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.... .... Respondents….Respondents 1^st Set

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M/s Mahadev Enclave Pvt. Ltd. Having its registered office at B-37, Ayodhya Marg, Hanuman Nagar, Jaipur through its authorized representative Sri Rajendra Kumar, Son of Mangtu Ram Sharma, Village Khoda, Tahsil Rawatsar, Disrict Hanumangarh.

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.... .... Writ petitioner….Respondents 2^nd Set

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WITH

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LETTERS PATENT APPEAL NO.252 OF 2014

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CIVIL WRIT JURISDICTION CASE NO. 1274 OF 2014

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M/S Banshidhar Construction Pvt. Ltd. Through its Director, Ram Prasad Rai, Son of Late Kishun Dayal Rai, R/o at and P.O. Patila, P.S. Maner, District Patna.

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.... .... Appellant

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Versus

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The State of Bihar through the Principal Secretary-cumCommissioner, Department of Mines and Geology, Patna.

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The Divisional Commissioner, Magadh Division, Gaya.

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The District Magistrate-cum-Collector, Arwal.

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The District Mining Officer, Arwal.

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.... .... Respondents….Respondents 1^st Set

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M/s Mahadeo Enclave Pvt. Ltd. Having its registered office at B-37, Ayodhya Marg, Hanuman Nagar, Jaipur through its authorized representative Rajendra Kumar, Son of Mangtu Ram Sharma, Resident of Village Khoda, Tahsil Rawatsar, Disrict Hanumangarh.

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.... .... Writ petitioner….Respondents 2^nd Set

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WITH

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LETTERS PATENT APPEAL NO.311 OF 2014

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Patna High Court LPA No.316 of 2014 (4) dt.06-03-2014

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CIVIL WRIT JURISDICTION CASE NO. 1275 OF 2014

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====================================================== M/s. Broad Son Commodities Pvt. Ltd. Through its Director, Krishna Mohan Singh, Son of Late Parmeshwar Singh, R/o P.O. Bagmajhuan, P.S. Koilwar, District Bhojpur.

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.... .... Appellant

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Versus

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The State of Bihar through the Principal Secretary-cumCommissioner, Department of Mines and Geology, Patna.

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The Divisional Commissioner, Patna.

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The District Magistrate-cum-Collector, Patna.

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The Assistant Director Mines, District Mining Office, Bhojpur.

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The Mines Inspector, District Mining Office, Saran at Chapra.

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The Mines Development Officer, Patna.

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.... .... Respondents….Respondents 1^st Set

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M/s Mahadeo Enclave Pvt. Ltd. Having its registered office at B-37, Ayodhya Marg, Hanuman Nagar, Jaipur through its authorized representative Rajendra Kumar, Son of Mangtu Ram Sharma, Resident of Village Khoda, Tahsil Rawatsar, Disrict Hanumangarh.

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.... .... Petitioners….Respondents 2^nd

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============== Appearance :	======	==================================
(In LPA No.316 of	2014)
For the Appellants	:	Mr. Ashish Giri, Advocate
For the State	:	Mr. Abhinay Raj, AC to AAG-2
For Mines Deptt.	:	Mr. D. K. Sinha, Sr. Advocate Mr. Rajendra Prasad, Spl. P.P., Mines
For Respondent No.	5 :	Mr. S. A. Narayan, Sr. Advocate Mr. Gautam Kejriwal, Advocate Mr. Akash Chaturvedi, Advocate
(In LPA No.252 of	2014)
For the Appellant	:	Mr. Shivendra Kishore, Sr. Advocate
For the State	:	Mr. Abhinay Raj, AC to AAG-2
For Mines Deptt.	:	Mr. D. K. Sinha, Sr. Advocate Mr. Rajendra Prasad, Spl. P.P., Mines
For Respondent No.	5 :	Mr. S. A. Narayan, Sr. Advocate Mr. Gautam Kejriwal, Advocate Mr. Akash Chaturvedi, Advocate
(In LPA No.311 of	2014)
For the Appellant	:	Mr. Shivendra Kishore, Sr. Advocate
For the State	:	Mr. Alok Kumar Rahi, AC to AAG-2
For Intervenor	: :	Mr. Ashok Kumar Singh, Sr. Advocate Mr. Prabhat Kumar Singh, Advocate Mr. Prem Ranjan Raj, Advocate Ms. Manishs Singh, Advocate
For the Respondent	:	Mr. S.A. Narayan, Sr. Advocate Mr. Gautam Kejriwal, Advocate Mr. Akash Chaturvedi, Advocate
For Mines Deptt.	:	Mr. D. K. Sinha, Sr. Advocate Mr. Rajendra Prasad, Spl. P.P., Mines

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Patna High Court LPA No.316 of 2014 (4) dt.06-03-2014

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CORAM: HONOURABLE MR. JUSTICE I. A. ANSARI AND

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HONOURABLE MR. JUSTICE SAMARENDRA PRATAP SINGH CAV ORDER

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(Per: HONOURABLE MR. JUSTICE I. A. ANSARI)

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5 06-03-2014

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For settlement of mining rights of sand from river beds, in the State of Bihar, its Department of Mines and Geology, issued, on 05.12.2013, Notice Inviting Tender, which is hereinafter referred to as “NIT”.

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2. The tenders, so invited, were to be submitted in two parts. While Part-A consisted of technical bid , Part-B involved financial bid . While the papers/documents, which formed part of the technical bid , were required to be put inside an envelope to be marked „ A’ , the papers/documents, which formed part of the financial bid , were required to be put inside an envelope to be marked „ B’ . Both these envelopes were required to be put inside a third envelope, which was to be marked „ C’ .

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3. Thus, both the bids , namely, technical and financial, were required to be kept separately in two different envelopes marked A and B respectively and while envelope, marked A, was required to contain all the papers/documents relating to the technical bid , envelope, bearing the mark B , was to contain all the papers/documents relating to financial bid and, then, both

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the envelopes, namely, A and B , were to be put in a third envelope to be marked „ C’.

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4. In terms of the NIT, envelope „ A’ was required to contain, apart from other documents relating to technical bid , a bank draft of 10 per cent of the value of the bid amount as earnest money along with a certificate to be issued by the bank concerned stating therein that the bank draft had been prepared from the amount available in the account held by the tenderer concerned.

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5. Coupled with the above, while Clause 5(4) of the NIT, dated 05.12.2013, required that on all the envelopes, name and address of the bidder shall be mentioned, Clause 5(5) of the NIT stated, in clear terms, that no documents would be accepted except the envelopes aforementioned, namely, „ A’ , „ B’ and „ C’ .

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6. Clause 7 of the NIT, dated 05.12.2013, aforementioned embodied the conditions of selection of successful bidder and Clause 7 (1) thereof stated, “ The financial bid, only of the persons/Society/Company, who qualify in the technical qualifications bid and whose bid is not less than reserved price will be opened for taking part in the auction and will be given opportunity to participate in the auction ”, making it clear, thus, that financial bid of a tender would be opened only and only if the tenderer is

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one, who qualifies in the technical bid and whose bid is not less than the reserved price .

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7. In other words, for taking part in the auction , a tenderer was required to qualify in both the bids , namely, technical bid as well as financial bid and one, who was disqualified in technical bid and whose bid was found less than reserved price , could not have been permitted to participate in the auction .

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8. In short, the financial bid of a tenderer, who did not qualify in the technical bid , was not to be opened at all.

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9. Bearing in mind the condition of the NIT, dated 05.12.2013, aforementioned that no tenderer, who failed to qualify in the technical bid , would be allowed to participate in the financial bid , let us proceed with further details of the tender process.

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10. The date of submission of tender documents was 18.12.2013. While the date of opening of the technical bid was 19.12.2013, the date of opening of the financial bid was 20.12.2013 and it was on the day of the opening of the financial bid , i.e. 20.12.2013, that public auction of the sand ghats were scheduled to take place.

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11. In this set of three appeals, we are concerned with the tenders of the private respondents

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herein, who had submitted tenders seeking settlement of sand ghats at three distinct places, namely, Patna, Banka and Arwal.

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12. On opening of the technical bids of the private respondents herein on the scheduled date , i.e. 18.12.2013, it was discovered that the requisite bank draft , containing 10 per cent of the bid amount as earnest money , had not been enclosed in the envelope marked „ A’ , though a bank draft , containing 10 per cent of the bid amount, as earnest money , was required to be enclosed in the envelope marked „ A’ , which was to contain papers/documents of technical bid .

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13. On the failure of the private respondents herein to submit, in terms of the NIT, dated 05.12.2013, aforementioned, the bank draft , containing 10 per cent of the bid amount as earnest money in their envelope, marked ‘A’ , the private respondents herein were treated as disqualified in the technical bid and were, therefore, dealt with as tenderers, who were not eligible to participate in the financial bid . The minutes of the proceeding, prepared, in this regard, in the presence of the parties concerned, on

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20.12.2013, read, inter alia, as under: “xxx …… xxx ……….xxx. It is worth mentioning that a condition has been laid down to enclose a bank draft of the 10 per cent of the

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reserved deposit amount as earnest money with the technical bid in the conditions of tender, which has not been complied with by M/s Mahadeo Enclave Private Limited. Since the bank draft of the earnest money was not enclosed with the technical bid of the tenderer, appearing at Serial No.3, M/s Mahadeo Enclave Pvt. Ltd., the Committee unanimously decided to reject its technical bid”.

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14. In the circumstances mentioned above, the tender papers of the private respondents herein, thus, stood rejected. Following the fact that the private respondents had been treated as disqualified in the technical bid , they applied for withdrawal of their respective bank draft s.

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15. Having applied for withdrawal of their respective bank draft s, the respondents herein came to this Court by filing three writ petitions, under Article 226 of the Constitution of India, which gave rise to CWJC Nos. 1273, 1274 and 1275 of 2014, their case, as presented in the writ petitions, being, briefly put, as under:-

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(i) Though the private respondents herein had not enclosed, inside the envelope, marked „ A’ (which was meant to contain the papers/documents relating to technical bid), requisite bank draft s, in respect of the said three sand ghats , namely, Patna, Banka and Arwal, had

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been put, inside the envelope marked „ B’, which was, otherwise, required to contain papers/documents relating to financial bid and not relating to technical bid . However, requisite certificates from the bank issued to the effect that the bank draft s had been prepared from the money available in the account of the tenderer concerned had been put inside envelope „ A ‟.

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(ii) Explaining the omission to put the requisite bank draft s in envelope-„ A’ , it was the contention of the private respondents that while sealing the envelopes, a clerical mistake had occurred inasmuch as the bank draft s, in question, were put in cnvelope-„ B’ under the impression that so far as the financial part of the tender process was concerned, the earnest money and the document, relating thereto, were required to be put, along with other documents of the financial bid, inside the envelope marked „ B’ .

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(iii) Thus, while envelope „ A’ disclosed, according to the private respondents, an omission to submit bank draft inside envelope-„ A’ , the certificate of the bank and particulars of the bank draft were available in envelope „ A’ and that it was due to human error that the bank draft was put inside envelope „ B’ and not envelope ‘A’ .

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(iv) When, therefore, the technical bids were

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opened on 19.12.2013, the bank drafts , offering earnest money , were, according to the writ petitioners, naturally not found in envelope- A , though the requisite bank certificates with all particulars of the bank draft s, in question, could be found contained in envelope-„ B’ .

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(v) In the writ petitions, filed by the private respondents herein, it was contended by the writ petitioners (i.e. private respondents herein) that theirs was not a case, wherein the tenderer concerned had not submitted necessary bank draft along with the bid documents; rather, there was an inadvertent clerical error, the error being that the bank draft was put inside envelope„B‟, which was to contain the papers/ documents of the financial bid, and was, thus, by mistake, not put inside envelope-„ A’ and, hence, because of such human error, the writ petitioners, who are private respondents herein, ought not to have been held disqualified in the technical bid .

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16. The writ petitioners, therefore, prayed, in CWJC Nos. 1273, 1274 and 1275 of 2014, that directions be issued commanding the State respondents to open the financial bids of the writ petitioners (i.e., the private respondents herein) and if the requisite bank draft s were found contained in envelope „ B’ , the writ petitioners shall be treated as persons eligible to participate in the financial

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bid and their omission to put the bank draft , inside envelope „ A’ , shall be ignored.

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17. By order, dated 20.01.2014, a learned single Judge of this Court has allowed the writ petitions by directing the State respondents to proceed with the act of opening of the financial bid including the financial bids, offered by the writ petitioners, subject to the condition that the relevant document, namely, bank draft , if found inside envelope „ B’ , of any of the writ petitioners, the writ petitioner concerned shall be treated as eligible to participate in the financial bid; or else, the bid documents of the tenderer concerned shall be rejected.

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18. While issuing the above direction, the learned single Judge did observe that the stand of the State was correct that because of the fact that none of the writ petitioners had submitted the bank draft s, in question, in envelope „ A’ , they were all ineligible to participate in the financial bid . Having so observed, the learned single Judge nevertheless took the view that such an approach would be hyper-technical inasmuch as the bank draft , if found inside envelope „ B’ , would indicate a mere clerical error and would not, in such a case, render the writ petitioner concerned ineligible to participate in the financial bid .

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19. With regard to the above, the learned single

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Judge has also pointed out that Clause 5 (5) of the NIT, dated 05.12.2013, aforementioned ▬ which had put the condition, namely, that no document would be accepted except the envelopes aforementioned ▬ did debar the State from accepting any document other than the envelopes aforementioned. Having so observed, the learned single Judge held that the course of action, which was being directed by the learned single Judge, would not lead to non-compliance of the condition imposed by Clause 5(5) of the NIT aforementioned inasmuch as no new document would, in such a case, be submitted by any of the writ petitioners, but merely their documents, relating to technical bid , would be either found or not found in envelopes „ B’ , which were, otherwise, required to contain the papers/documents relating to only financial bid and not technical bid.

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20. Treating the mistake of the writ petitioners (private respondents herein) as a bona fide mistake, the learned single Judge took the view that the writ petitioners (i.e. private respondents herein) ought not to have been disqualified. Reference, in this regard, has been made by the learned single Judge to the case of Mangalore Chemicals and Fertilisers Ltd. Vs. Deputy Commissioner of Commercial Taxes and Others, (AIR

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1992 SC 152) , wherein the Supreme Court, referred to Lord Denning‟s observations, which read, “ Now I know that a public authority cannot be estopped from doing its public duty, but I do think it can be estopped from relying on a technicality and this is a technicality ” (See, Wells V. Minister of Housing and Local Government, (1967) 1 WLR 1000 at p. 1007).

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21. The learned single Judge, therefore, directed that if the earnest money , as requested by the writ petitioners, had not been returned to the tenderers and if the re1quisite documents were found, as indicated above, enclosed inside envelope „ B’ , then, the writ petitioners (i.e. private respondents in these three appeals) shall not be treated as disqualified from participating in the financial bid .

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22. Before proceeding further, it may be noted that on 20.12.2013, (i.e. the date fixed for opening of the financial bid ), a writ petition, which gave rise to CWJC No. 25245 of 2013 ( Hemant Kumar Choudhary vs. The

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State of Bihar and Others ) was filed by one of the tenderers and the progress of the entire NIT was stayed. The order, dated 20.01.2014, aforementioned was slightly modified, on 21.01.2014, by the learned single Judge by observing that the order of the Court would be

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implemented as and when State decides to proceed with the settlement of the sand ghats if it is so permitted by the Apex Court. This modification took place, because it had been pointed out to the learned single Judge, on behalf of the Department of Mines, Government of Bihar, that the Apex Court had granted ad interim stay on the settlement of sand ghats on an appeal filed by Hemant Kumar Choudhary aforementioned. It is, now, submitted, at the bar, that the said appeal has been finally dismissed by the Apex Court. In other words, the order of stay has been vacated and, therefore, impediment, to the opening of financial bid and holding of auction , stands removed.

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23. Aggrieved by the orders, dated 20.01.2014 and 21.01.2014, aforementioned (whereby three writ petitions, which had given rise to CWJC Nos. 1273, 1274 and 1275 of 2014, were disposed of, in the manner and with the directions as mentioned hereinabove), this batch of three appeals have been preferred by the tenderers, who were successful in the technical bid and whose applications, seeking leave to challenge, in appeal, the impugned orders, have been allowed by this Court by order, dated 21.02.2014.

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24 . We have heard Mr. Shivendra Kishore, learned Senior Counsel, and Mr. Ashish Giri, Advocate,

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appearing on behalf of the appellants, Mr. Abhinay Raj, Advocate, and Mr. Alok Kumar Rahi, Advocate, appearing on behalf of the respondent-State, Mr. D. K. Sinha, learned Additional Advocate General, and Mr. Rajendra Prasad, learned Special Public Prosecutor (Mines), appearing on behalf of the respondent-Mines Department, Mr. Shashi Anugrah Narayan, learned Senior Counsel, Mr. Gautam Kejriwal, Advocate, and Mr. Akash Chaturvedi, Advocate, appearing for the respondent no.5, and Mr. Ashok Kumar Singh, learned Senior Counsel, Mr. Prabhat Kumar Singh, Advocate, Mr. Prem Ranjan Raj, Advocate, and Mrs. Manisha Singh, Advocate, appearing on behalf of the intervenor.

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25. In all these appeals, since the grounds taken to challenge the order, dated 20.01.2014 (whereby the writ petitions have been disposed of) are common, we are not required to deal with these three appeals separately or case-wise.

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26. The appellants‟ contentions are, in a nutshell, as under:

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(i) The writ petitioners were legally and validly disqualified, because they had not satisfied one of the conditions of the technical bid , the condition being mandatory in nature inasmuch as Clause 5 (5) of the NIT,

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dated 05.12.2013, made it clear that no document will be accepted except the above envelopes aforementioned .

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(ii) Coupled with the above, Clause 7 of the NIT, dated 05.12.2013, aforementioned embodied the conditions of selection of successful bidder and Clause 7 (1) thereof stated, “ The financial bid, only of the persons/Society/Company, who qualify in the technical qualifications bid and whose bid is not less than reserved price will be opened for taking part in the auction and will be given opportunity to participate in the auction ”, making it clear, thus, that financial bid of a tender would be opened only and only if the tenderer is one, who qualifies in the technical bid and whose bid is not less than the reserved price .

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(iii) As regards the act of allowing of the writ petitions by the learned single Judge, objection has also been taken by the present appellants by pointing out that since the writ petitioners were disqualified from participating in the financial bid and the appellants were, on the other hand, qualified to participate in the financial bid , the writ petitions ought not to have been entertained and no order, far less, the kind of directions, which have been passed by the learned single Judge, ought to have been passed, without impleading the appellants as parties to the

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writ petitions, wherein the relief(s) sought for were to adversely affect the rights of the appellants.

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(iv) The terms of NIT are in the realm of State‟s discretion and the Court should not interfere with the same. The technical bid , according to the appellants, required putting of bank draft, along with other documents, detailed in the NIT, inside envelope „ A’, which was meant to contain all papers/documents/materials relating to technical bid of the tenderer concerned and that only when a tenderer was successful in the technical bid that he could have been allowed to participate in the financial bid . Thus, if a tenderer was found unsuccessful at the stage of screening of technical bid , such a tenderer‟s documents, contained in envelope „ B’ , which were to contain papers/documents/materials relating to financial bid , could not have been opened.

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(v) In other words, the appellants contend that if the technical bid of a tenderer suffers from omission to comply with, or does not fulfill, the requirements of technical bid , the tenderer was not to be allowed to participate in the financial bid , especially, when Clause 5 (5) of the NIT, dated 05.12.2013, mandated that n o document would be accepted except the documents, which have been enlisted in the NIT and Clause 7(i) of the NIT,

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dated 05.12.2013, made it clear that financial bid of a tender would be opened only and only if the tenderer was one, who qualified in the technical bid and whose bid was not less than the reserved price .

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(vi) It is the further grievance of the appellants that it was within the realm of the State to fix the terms and conditions of the NIT and the learned single Judge ought not to have treated the omission to put bank draft inside envelope ‘A’ as a mere mistake or error. The requirement to put bank drafts inside envelope ‘A’ was an essential condition of the NIT and the learned single Judge ought not to have interfered with the rejection of the tender papers of the writ petitioners, when the rejection was consistent with the mandatory requirements of the terms and conditions of the NIT.

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27. The appellants, therefore, contend, in these appeals, that by allowing the writ petitions, learned single Judge has, in fact, altered the terms and conditions of the NIT, which is impermissible inasmuch as judicial review cannot extend to the altering of the terms and conditions of the NIT; more so, when a given term or condition of the NIT is essential and is not found to be unreasonable, arbitrary and/or mala fide.

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28. In support of their above submissions,

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appellants have placed reliance on Hukam Chand Shyam Lal v. Union of India & Others, (AIR 1976 SC 789), W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Others , [(2001) 2 SCC 451 ], Jagdish Mandal and Another v. State of Orissa & Others, [(2001) 2 SCC 451], Sai Chalchitra v. Commissioner, Meerut Mandal and Others, [(2005) 3 SCC 683], Deepak Kumar and Others v. State of Haryana and Others, [(2012) 4 SCC 629}, Glodyne Technoserve Limited v. State of Madhya Pradesh and Others, [(2011) 5 SCC 103], Tata Cellular v. Union of India, [(1994) 6 SCC 651], Sorath Builders v. Shreejikrupa Buildcon Limited and Another, [(2009) 11 SCC 9], Directorate of Education and Others v. Educomp Datamatics Ltd. And Others, [(2004) 4 SCC 19] and Meerut Development Authority v. Association of Management Studies and Another, [(2009) 6 SCC 171].

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29. Yet another submission, made on behalf of the appellants, is that the omission to include, in envelope „ A’ , requisite bank draft , even if inadvertent, cannot be permitted to be corrected unless the condition, requiring every tenderer to put his bank draft in envelope „ A’ , is treated as a condition, which was not an essential condition of the NIT, because the case, which the writ petitioners had

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set out, would allow the writ petitioners to participate in the financial bid , though they, otherwise, stood disqualified from participating in the financial bid . Reliance, in this regard, is placed on W.B. State Electricity Board (supra).

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30. Resisting the appeals, private respondents, in these appeals, contend, in brief, thus:

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(i). The terms of NIT can be moulded by a Court to avoid injustice to a party. Placing reliance on Kumari Shrilekha Vidyarthi v. State of U.P. and Others, [(1991) 1 SCC 212], Poddar Steel Corporation v. Ganesh Engineering Works and Others, [(1991) 3 SCC 273], Tata Cellular v. Union of India, [(1994) 6 SCC 651], Nav Singh Pal v. Union of India and Others, [(2000) 3 SCC 588], A.B.L. international Limited and Another v. Export Credit Guarantee Corporation of India Limited and Others, [(2004) 3 SCC 553], Managing Director, Haryana State Industrial Development Corporation and Others v. Hari Om Enterprises and Another, [(2009) 16 SCC 208] and Centre for Public Interest Litigation and Others v. Union of India and Others, [(2012) 3 SCC 1], it is contended, on behalf of the private respondents herein, that the writ petitioners had not been seeking to add any additional document, which had not been submitted with

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the tender papers, but only sought to rectify a clerical mistake by pointing out that though the bank drafts ought to have been kept inside envelope „ A’ , (which was to contain the papers/documents relating to technical bid) , the bank drafts , in question, had been put by the writ petitioners inside envelope „ B’ , which was to contain papers/documents/ materials relating the financial bid .

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31. Let us, now, examine the merit of the rival submissions made before us and determine the reliefs, if any, which any of the parties to these appeals is entitled to.

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32. It is pertinent to note that so far as the appellants are concerned, they had been successful in, and had passed the stage of, technical bid ; whereas the private respondents herein stood disqualified at the stage of processing of technical bid .

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33. From the kind of reliefs, which the private respondents had sought for, in their writ petitions, it was clear that allowing the reliefs or any part thereof would have, as rightly expressed on behalf of the appellants, adverse impact on those, who had succeeded in the evaluation of technical bid, such as, the appellants herein.

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34. Having been successful, at the stage of examination of the technical bid, when the appellants had

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already become entitled to opening and evaluation of their respective financial bids, a writ Court could not have passed any order, in favour of rejected bidders, such as, the private respondents, without giving any notice to and according opportunity of hearing to those bidders, such as, the present appellants, especially, when the bidders, similarly situated as the present appellants are, had acquired the right of their respective financial bids being considered de hors the financial bids of the private respondents herein.

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35. It is trite that judicial review by High Court under Article 226 of the Constitution of India cannot be exercised as an appellate authority over the administrator‟s decision, which may be a wrong decision. A mere erroneous decision is not amenable to High Court‟s extraordinary jurisdiction under Article 226 of the Constitution, unless the decision is unreasonable, arbitrary, mala fide or reached on consideration of factors, which ought to have been kept excluded or by ignoring such factors, which ought to have been taken into consideration before arriving at the decision.

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36. Considering the fact that the appellants herein, in the light of the facts pointed out above, ought to have been provided with the opportunity of hearing before

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the impugned decision was rendered in the writ petitions, but were not, admittedly, heard, we would have, ordinarily, set aside the impugned orders, dated 20.01.2014 and 21.01.2014, and remanded the matter for hearing afresh.

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37. However, considering the public interest that delay in holding of auctions , in the present cases, would result in loss of revenue to the State, we, as agreed to by the learned Counsel for all the parties concerned, have heard the appeals, on merit, for the purpose of final disposal.

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38. While considering the present writ petitions, what needs to be noted, at the very outset, is that a governmental contract , even if commercial in nature, involves, broadly speaking, four stages . The first stage relates to the floating of tenders by publishing notice inviting tenders. At this stage, the authority concerned is required to formulate the terms and conditions subject to which the tenders would be invited and also the terms and conditions of the contract, which, if entered into, govern the parties. These terms and conditions will obviously include all the eligibility criteria for a person to participate in the tender process.

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39. After the notice inviting tender is published and the tenders are received, the second stage of

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such a contract commences. This stage involves the process of taking of the decision to allot the contract or not to allot the contract at all and cancel the entire process. This stage would include selection of the person or the party to whom the contract shall be allotted. The process of selection may, in turn, consist of several stages of selection, such as, technical bid , financial bid , etc. The second stage , thus, ends with the allotment of the contract or with the decision not to allot the contract at all and cancel the entire tender process.

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40. The third stage of the contract essentially covers the stage of performance of the contract. This stage would include commencement of the performance of the allotted contract and would, normally, end with the completion of the allotted contract. During the third stage , there may arise the question of breach of the contract, because of non-fulfillment of the terms and conditions of the contract by either party to the contract.

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41. The fourth stage of such a contract arises, when, on completion of his part of the contract, a contractor or supplier raises his demand for making payment of his bills. This fourth stage can, however, be divided into two categories. There may be a case, where the amount demanded is not disputed and yet the dues of

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the contractor are not paid compelling thereby the contractor to seek avenues for obtaining payment of his dues. In this fourth stage , there may, however, be a case, where the correctness of the demand for payment raised by the contractor is disputed, denied or challenged by the authority, who had allotted the contract. In such a case, too, the contractor may be driven to take recourse to such avenues as may be open to him, in law, for the purpose of enabling him to obtain his dues in terms of the demand that he may have made.

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42. It may, now, be pointed out that at the first stage of a contract, which requires the authorities concerned to formulate the terms and conditions subject to which the tenders would be invited or the contract would be allotted, many factors are taken into account. The decision as to what terms shall be included in the tender is really a policy decision, for, it is the authority, issuing the NIT, which is the best judge to determine as to what terms and conditions would be required for successful completion of the work or the project concerned. Thus, it is, primarily, for the authority, issuing the NIT, to decide what particular terms and conditions should be incorporated in the NIT.

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43. To put it differently, while settling the terms to be incorporated in the invitation to tender, the

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authorities concerned must have complete freedom, for, the terms of the tender are in the realm of the freedom to contract and it is for the authorities concerned to decide as to what would be the terms of the contract. But when the authorities concerned award the contract, the decisionmaking process, leading to the decision to allot the contract, gets open to judicial review provided that there is an element of public interest involved in the case.

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44. The question, however, which, now, arises for consideration is this: If any of the terms and conditions embodied in an NIT is arbitrary, discriminatory, mala fide , irrational, whimsical, capricious or actuated by bias , whether the hands of the High Court would be tied and the High Court would, in exercise of its power of judicial review, refuse to interfere with the terms and conditions of the NIT howsoever arbitrary, discriminatory, mala fide, whimsical, capricious or biased the terms and conditions may be ?

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45. While considering the above aspect of the case, it may be pointed out that in TATA Cellular (supra), the Supreme Court observed that the terms of the invitation to tender are not open to judicial review, for, the invitation to tender is in the realm of the freedom to contract. However, what needs to be pointed out is that in

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TATA Cellular (supra), no issue was raised, directly or indirectly, as to whether the power of judicial review would be attracted if the terms of an invitation to tender are in themselves arbitrary, irrational, whimsical, mala fide , capricious or actuated by bias . In its subsequent decision, in Directorate of Education (supra), the Supreme Court, while taking note of the observations made, in TATA Cellular (supra), that 'the terms of the invitation to tender can not be open to judicial review', has, however, clarified that the terms, incorporated in a tender, can, indeed, be interfered with by the Court if the terms are in themselves arbitrary, discriminatory, mala fide or actuated by bias . (See also Sumeet Enterprises (M/s) v. Union of India and Others, [2005 (4) GLT 227 )].

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46. In short, the merits of a particular term or condition, incorporated in the NIT, is not open to judicial review; but constitutionality or very legality of such a term is not entirely beyond the scope of judicial review. Similarly, the decision to award a contract to a person is not subject to judicial review, though the decision-making process is subject to judicial review.

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47. However, when the invitation to tender is floated, the second stage , which consists of the process of selection of the person for awarding the contract,

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commences and this process comes to an end, when a decision either awarding the contract or cancelling the entire tender process is taken. The decision to award the contract is not open to judicial review; but the decision making process, which leads to the ultimate decision, is, according to the law laid down in TATA Cellular (supra), open to judicial review.

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48. In fact, in Raunaq International Ltd. Vs. IVR Construction Ltd. and Ors., [(1999) 1 SCC 492] , the Supreme Court has made it abundantly clear that though the decision to award a contract is not open to judicial review, the decision-making process, which leads to the ultimate decision, is, indeed, open to judicial review provided that there is an element of public interest involved in the case requiring a review of the administrative decision by the Court.

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49. Sounding a note of caution and clarifying the scope of judicial review of administrative action, the Supreme Court, in Jagdish Mandal (supra), observed :

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“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and

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not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance . If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.”

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( Emphasis is supplied )

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50. Before proceeding to examine the rival contentions of the parties, we need to further point out that judicial review means court's power to review action of other branches or levels of the Government. In the judicial review of a contractual matter, the writ Court will not sit as

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an appellate Court or as an appellate forum over the decision of the administrative authority concerned to award the contract in favour of any tenderer unless the decisionmaking process is unfair, non-transparent, arbitrary, motivated, biased , or contrary to the provisions of law and/or public interest . Judicial review, in such a case, is not against the decision, but the decision-making process. So long as it is found that an administrative decision has been reached by taking into consideration all such factors, which were relevant, and by keeping excluded from the purview of consideration all such factors, which were irrelevant, the decision cannot, ordinarily, be interfered with by taking recourse to Article 226 of the Constitution of India unless the decision suffers from infraction of law. Judicial review is aimed at preventing arbitrariness and favouritism and is required to be exercised in larger public interest , or, when a decision, brought to the notice of the Court, reveals that the power has been exercised for a collateral purpose.

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51. It is also well settled that essential conditions of the NIT must be adhered to by all the tenderers and if there is no power of general relaxation, no relaxation shall be granted. It can also not be disputed that the principle of strict compliance would be insisted, where it is possible for all the parties to a tender process to comply,

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fully and completely, with a given condition, particularly, when the condition is mandatory in nature. Whether any condition, or part thereof, embodied in the NIT, is an essential condition or not, shall have to be examined bearing in mind the object, which is sought to be achieved by the condition so imposed, and the consequences flowing from non-compliance of such a condition of the NIT.

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52. There can be no doubt that an authority would, ordinarily, be fully justified in rejecting a tender if the tenderer does not fulfill the conditions required for submission of a valid tender. Insistence upon fulfillment of the conditions, embodied in a tender notice, ensures quality in the tenderers and the deletion of any condition(s) or relaxation of any condition(s), in favour of any tenderer, would, ordinarily, result in discrimination not merely amongst the tenderers, but also amongst the persons, who would have applied and/or participated in the tender process, had they known that such a relaxation would be permitted [See TATA Cellular (supra) and Asia Foundation & Construction Limited v. Trafalgar House Construction (I) Ltd., [MANU/SC/1028/1997: (1997) 1 SCC 738] .

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53. Bearing in mind the principles of law indicated above, let us, now, revert to the facts of the case

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at hand.

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54. From a reading of Clause 5, what becomes clear is that no paper could have been taken into consideration except the papers contained in the envelopes, which were to be marked „ A ´, „ B ‟ and „ C ‟. To the extent, therefore, observations, made by the learned single Judge, while directing opening of the financial bid , that no paper other than the papers, already enclosed, would be required to be accepted, is correct.

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55. What, however, appears to have escaped the attention of the learned single Judge is that in the light of the terms and conditions of the NIT, the process of selection of a successful bidder was required to pass through several stages. Broadly speaking, these stages consisted of becoming successful at the stage of examination of the technical bid to be followed by examination of financial bid and one, who was successful at the stage of technical bid, could only acquire the right of consideration of his financial bid and one, who passed through both the stages, namely, the stage of technical bid as well as the stage of financial bid , would have acquired the right to participate in the auction. These three stages of the selection process were distinct and separate from each other.

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56. It was, thus, imperative that the examination of the technical bid be done by keeping the stage of technical bid completely separated from the financial bid . These two stages were, thus, required to be kept separated in watertight compartments. One, who passed the stage of technical bid, could have entered the stage of financial bid, and one, who failed at the stage of technical bid , would have been out of the race inasmuch as his financial bid could not have been opened.

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57. In order to, therefore, examine if a tenderer had passed the requirements of technical bid , no material could have been looked into other than what the tenderer concerned had furnished in envelope „ A ‟. The question, therefore, of opening of a tenderer‟s envelope „ B ‟, which was to contain all materials relating to financial bid, did not arise unless the tenderer, on the basis of the materials available in envelope „ A ‟, successfully competed in the technical bid and became thereby eligible to the consideration of his financial bid, contained in envelope „ B ‟, along with similarly situated other tenderers.

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58. The above impression gets strengthened from a bare reading of Clause 7 of the NIT, embodied in the notification, dated 05.12.2013, aforementioned, which we reproduce hereinbelow:-

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“7. Selection of successful bidder

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(i) The financial bid of only those tenderers shall be opened who (Person/Committee/Company) succeed in the Technical bid and whose Financial bid is not less than reserved price and only they shall be given opportunity to participate in auction. The highest bidder in the auction shall be considered as the successful tenderer.

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(ii) Financial bid below the reserved price shall be invalid and they shall not be allowed to participate in auction.

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(iii) On refusal of the settlement by the highest Tenderer/Bidder or not completing other formalities within the prescribed period, their earnest money shall be forfeited.

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(iv) For bidding more than 1 ½ times, 2 times, 2 ½ times of the reserved price, the bidder shall have to deposit 5 per cent of the reserved price separately at every stage as additional earnest money, through Bank Draft/Cash, at the time of bidding itself.

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(v) In case of receipt of single tender, short tender notice shall be invited without opening the said tender and keeping it pending if no

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tenderer comes forward for the second time also, then the Divisional Commissioner/Collector shall open the single tender and ensure that the amount mentioned is more than the reserved price. Thereafter, he shall send it to the department with his recommendation and after obtaining prior approval of the department, the settlement of sand ghat, shall be made in favour of the single tenderer.”

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59. A reading of the contents of sub-clause (i) of Clause 7 shows that the financial bid of a tender could be opened only and only if the tenderer was one, who had qualified in the technical bid and whose bid was not less than the reserved price , meaning thereby that if a tenderer did not qualify in the technical bid and whose bid was not less than the reserved price , he was not to be treated as entitled to examination of his documents relating to financial bid. The word „ and‟ appearing between the expression, “ The financial bid, only of the persons/Society/Company, who qualify in the technical qualifications bid” and the expression, “whose bid is not less than reserved price will be opened for taking part in the auction”, has to be read disjunctively inasmuch as a tenderer, who did not qualify in the technical bid, would

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have been disqualified even if his bid was higher than the reserved price .

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60. Similarly, a tenderer, who might have qualified in the technical bid , would not have been entitled to consideration of his financial bid if his price bid was found to be less than the reserved price .

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61. Clause 7(i) of the NIT clearly shows that the technical bid contained some financial aspects, such as, the bid amount, which was required to be indicated in the materials to be furnished in envelope „ A ‟.

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62. Let us, now, turn to the tender documents. The relevant part of the tender documents read as under: -

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“(A)/(ka) In the First part, in envelope „ A ‟, following documents are required to be given in the technical bid:

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(i) xxx xxx xxx (ii) xxx xxx xxx (iii) Earnest Money (Bank draft prepared through the Bank Account of the tenderer). In proof thereof, certificate issued by the concerned Bank is compulsory.

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(iv) xxx xxx xxx
(v) xxx xxx xxx
(vi) xxx xxx xxx
(vii) xxx xxx xxx
(viii) xxx xxx xxx
(ix) xxx xxx xxx
(x) xxx xxx xxx
(xi) xxx xxx xxx
(xii) xxx xxx xxx

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(B)/(Kha) xxx xxx xxx (C)/(Ga) xxx xxx xxx

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(D)/(Gha) First envelope „ A ‟ will be opened on the date fixed . The Persons/Society/ Company, who will be successful in the technical bid, only their financial bid will be opened on the fixed date in presence of their representatives . (E)/(Angha) The Person/Committee/ Firm/ Company not succeeding in technical tender shall be informed accordingly and their earnest money deposit shall be refunded .

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(F)/(Cha) xxx xxx xxx
2. xxx xxx xxx
3. xxx xxx xxx
4. xxx xxx xxx
5. xxx xxx xxx
6. No document shall be received after the

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due date nor any chance will be given to rectify any error after opening of technical tender.

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( Emphasis is added )

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63. It can be easily noticed from the above contents of the tender documents that sub-Clause (Gha) of Clause (1) of the tender documents embodies what Clause 7(1) of the NIT had conveyed, namely, that a bidder‟s financial bid would be opened only if he qualifies in the technical bid.

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64. Thus, the technical bid was wholly

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separate from financial bid . No paper/document/material, enclosed in envelope „ B ‟, could have been looked into for the purpose of determining if a tenderer could be held to have qualified in technical bid or not.

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65. In other words, a tenderer was to pass or fail on the basis of the examination of the papers/documents/materials contained in envelope „ A ‟. Consequently, no papers/documents/ materials, enclosed inside envelope „ B’ , could have been considered, or could have been directed to be considered, for the purpose of determining if a tenderer, such as, the writ petitionersprivate respondents, had or had not qualified in the technical bid.

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66. The above conclusion gets reinforced, when one takes into account sub-clause (Angah) of Clause (1) of the tender documents, which reads, “The Persons/Society/Company, who will not be successful in the technical bid „ A ‟, their earnest money will be returned with intimation, ” meaning thereby that one, whose papers/ documents/materials, enclosed in envelope „ A ‟, failed to satisfy the preconditions of the technical bid, would not have been entitled to consideration of his financial bid and his earnest money would have to be, in such a case, returned.

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67. The conclusion, which is irresistible to arrive at and we do arrive at, is that the condition, to enclose the bank draft by a tenderer in envelope „ A ‟, was an essential condition , which could not have been relaxed/ignored, more so, when the omission, to put bank draft in envelope „ A ‟, had the penal consequence of putting the tenderer concerned out of race at the stage of evaluation of the technical bid itself.

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68. No wonder, therefore, that having realized that they had not succeeded in technical bid and were, therefore, entitled to the return of their earnest money, the writ petitioners had, indeed, applied for returning to them their respective earnest money. Having made the applications and having, thus, acquiesced to the State respondents‟ decision that the writ petitioners-private respondents herein stood disqualified in the technical bid , the writ petitioners-private respondents turned around and challenged the rejection of their technical bids by way of their writ petitions, which gave rise to, and laid the foundation of, the present appeals. Having acquiesced to the decision, which was consistent with law, writ petitioners could not have been allowed to put to challenge the decision of the State-respondents, whereby the Staterespondents treated the writ petitioners as tenderers, who

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stood disqualified at the stage of evaluation of technical bid itself.

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69. Fortifying further the conclusion, which we have reached above, we find that Clause 6 of the tender documents read, as under:

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“No document shall be received after the due

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date nor any chance will be given to rectify any error after opening of technical tender ”

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( Emphasis is supplied ).

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70. To put it a little differently, Clause 6 of the tender documents, thus, fortifies the conclusion that once the technical bid is opened, a bidder would not be allowed to rectify or cure any defect; more so, when the process of rectifying or curing the defect would lead to opening of envelope „ B ‟, which was to contain papers/documents/ materials relating to financial bid only.

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71. In the present case too, when the writ petitioners stood disqualified at the stage of technical bid , they could not have been allowed to cure their defect by directing the State respondents to open envelope „ B ‟ and examine if the writ petitioners-private respondents herein had kept their bank drafts inside envelope „ B ‟ and if any of the writ petitioners-private respondents were found to have kept its bank drafts in envelope „ B ‟, then, the writ

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petitioner-private respondent concerned shall be allowed to participate in the financial bid.

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72. What may, now, be noted, is that Annexure-3 of the tender documents provided a check list . This check list also shows that a tenderer was required to check if he has enclosed the documents, which were relevant and material, before submitting his tender. This shows that if one were careful, he would have been aware as to what papers/documents/materials were required to be

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furnished in envelope ‘A’ and what

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papers/documents/materials which were required to be enclosed in envelope ‘B’ .

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73. Poddar Steel Corporation ( supra ) ,

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which the private respondents have relied upon, was a case, wherein, in terms of Clause 6 of the tender notice, a tenderer was required to submit, along with his tender, earnest money, by cash or by demand draft, drawn at the State Bank of India, whereas the appellant, Poddar Steel Corporation, had, as earnest money , sent a cheque of the Union Bank of India, drawn on its own branch and not on the State Bank of India. This was treated as noncompliance of the requirement of the tender notice. The question, raised in Poddar Steel Corporation (supra), was to whether the said non-compliance of the

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requirements of the tender notice deprived the authority concerned from accepting the appellant‟s bid. The Supreme Court pointed out, “ As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories — those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases”.

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74. What transpires from the above observations, made in Poddar Steel Corporation (supra), is that there is no rule of universal application that an authority, inviting tenders, is bound to give effect, in meticulous detail, to every term mentioned in the notice and is not entitled to waive even a technical irregularity of little or no significance; rather, the requirements, in a tender notice, can be classified into two categories — those,

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which lay down the essential conditions of eligibility, and the others, which may be merely ancillary or subsidiary to the main object sought to be achieved by the condition. While the former case, the authority, issuing the tender, may be required to enforce the condition rigidly, it shall remain open, in the case of the latter, to the authority concerned to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases.

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75. In the above factual background, the decision of the authority, accepting the tender of the appellant, was upheld in Poddar Steel Corporation (supra). The relevant observations, appearing, in paragraph 8 of Poddar Steel Corporation (supra), read as follows:

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“The certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank. In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6, specially when it was in its interest not to reject the said bid which was the highest.”

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76. In Poddar Steel Corporation (supra),

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the condition to submit earnest money , by cash or by demand draft, drawn at the State Bank of India, was treated not essential. For coming to this conclusion, one was not required to enter into the stage of consideration of financial bid and hence stages of the process of selection would have remain unaltered, even if the earnest money was deposited not by cash or by demand draft drawn at the State Bank of India.

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77. In W. B. State Electricity Board (supra), the error was not a mere human error; rather, the error was nothing, but absolute carelessness and negligence. The Supreme Court pointed out, in W. B. State Electricity Board (supra), that the sanctity and integrity of the process of tender/bid as well as the award of contract shall be maintained.

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78. When the NIT, in the present case, had, undisputedly, mentioned that the bank draft ought to be kept in envelope „ A ‟, there was no reason as to why the bank draft could not have been put inside envelope „ A ‟. Had the writ petitioners-private respondents, as tenderers, not been too casual and wholly negligent, the mistake/error, as the writ petitioners have coined for their act of omission to put the bank draft s in envelope „ B ‟, would not have been

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cured. But omission to put the bank drafts in envelope ‘A’ is clearly a result of complete carelessness and negligence.

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79. In a competitive bidding, such as, the present one, it was not unfair, unjust, unreasonable, irrational or arbitrary, on the part of the State respondents, when they held the writ petitioners-private respondents disqualified in the technical bid. This decision cannot be said to be wholly unreasonable, irrational or arbitrary; rather, sanctity and integrity of tender process compelled the State respondents to hold the writ petitioners-private respondents as having disqualified in the technical bid .

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80. When the decision, in present cases, had been taken in terms of the requirements of a condition, embodied in the NIT, which was essential in nature, the question of relaxing the requirement and allowing the writ petitioners-respondents‟ envelope „ B ‟ to be opened did not arise at all.

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81. To sum up, one can say that there can be no doubt that an authority, issuing tender, shall, ordinarily, treated bound to give effect to every term mentioned in the NIT and is not entitled to waive or deviate. Nonetheless the terms and conditions incorporated in NIT can be divided into two categories, namely, (i) essential or mandatory and (ii) directory or ancillary. So

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far as the essential term or condition is concerned, the same shall be enforced with all rigidity. The authorities, in a case of compliance of essential condition , cannot deviate from the condition or cannot refuse to insist upon strict compliance. However, when a condition is not essential, but is to subserve a given purpose, such a condition cannot be treated as mandatory, but must be treated as directory. Non-compliance of such a term/condition cannot bar a tenderer to seek correction nor would it divest the authority concerned from allowing correction to be made or defect to be removed. In the cases of non-essential term/condition of NIT, the authority concerned may relax the compliance of such a condition and may not debar or exclude a tenderer from the purview of its consideration.

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82. To the extent indicated above, there can be no two opinions with the proposition of law. However, in the cases at hand, one of the requirements of the NIT was that the earnest money , in the form of bank drafts , which formed part of the technical bid , shall be put, along with other documents relating to technical bid, in envelope ‘A’ . This apart, the NIT, dated 05.12.2013, made it clear that no documents would be accepted except the envelopes aforementioned, namely, „ A’ , „ B’ and „ C’ .

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83. In the circumstance indicated above, if

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any of the documents of the technical bid was not found in envelope ‘A’ on opening of the technical bid , a tenderer would stand, in the light of the terms and conditions of the NIT, dated 05.12.2013, read with the conditions embodied in the tender documents, wholly disqualified and could not have been allowed to insist that his financial bid be opened, even if the insistence of opening of his financial bid is for the purpose of making him qualify in the technical bid . When there is a punitive clause in the terms and conditions incorporated in the NIT, dated 05.12.2013, it stands to reason that the State insists, as it has done in the present case, that the eligibility of a tenderer would be determined on the basis of the materials available in envelope ‘A’.

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84. The learned single Judge has pointed out to the effect that Clause 5 (5) of the NIT, dated 05.12.2013, would not be violated if the financial bid of the private respondents was opened and in the financial bid , if the bank draft is found, he shall be treated as qualified to participate in the financial bid . It appears to have escaped the notice of the learned single Judge that Clause 5 (5) of the NIT, dated 05.12.2013, debarred the authority concerned from accepting anything other than the ones, which are included in envelope „ A’, when the technical bid is considered, and in envelope „ B’ , when the financial bid is

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considered.

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85. One, who fail to qualify at the stage of technical bid, cannot be allowed to enter into the zone of opening of financial bid even for the purpose of making him qualify in the technical bid ; or else, it will intermingle the stage or zone of technical bid with the stage or zone of financial bid , which is not the intendment of the NIT in the present case. One, who stood disqualified for omission to place, inside envelope ‘A’ , any paper/document/material relating to his technical bid , could not have been allowed to go to the stage of financial bid and he could not have been treated as an eligible tenderer on the basis of a document, which ought to have been put inside envelope ‘A’ , but had been mistakenly put inside envelope ‘B’ . There is absolutely no averment, in the writ petitions, that due diligence and caution were applied by the writ petitioners to ensure that the papers/documents of technical bid were placed in envelope ‘A’ . When the care and caution are not applied, as were required, such a lapse cannot be treated as a mere mistake. Had the mistake appeared despite due diligence and care applied by the writ petitioners, the situation may have been, perhaps, a little different.

¶310

86. Coming to the second reason, which the learned single Judge has assigned, namely, that allowing

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Patna High Court LPA No.316 of 2014 (4) dt.06-03-2014

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the writ petitioners to participate in the financial bid will widen the scope of selection to the Government, suffice it to point out that the State, which issues NIT, cannot be allowed to twist and turn the terms of the NIT in order to widen the scope of selection of bidders unless the State can show that such relaxation is provided within the terms of the NIT itself or is permissible within the given set of terms and conditions incorporated in the NIT. Merely, therefore, on the ground of widening the scope of selection, the term and/or condition embodied in the NIT, which was otherwise essential , cannot, in the absence of any such authority being available within the NIT, be allowed to be relaxed.

¶314

87. In the case at hand, submission of the earnest money was an essential condition . Since submission of the earnest money, in the form of a bank draft, was a part of the technical bid and was required to be placed inside envelope „ A’ , the question of giving freedom to a tenderer to put bank draft inside envelope „ B’ , which relates to financial bid , could not have been permitted.

¶315

88. In the circumstances mentioned above, it was incumbent, on the part of the writ petitioners, i.e. the private respondents herein, to ensure that all the papers/documents, in tune with the terms and conditions of the NIT, including the bank draft , be placed inside envelope

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Patna High Court LPA No.316 of 2014 (4) dt.06-03-2014

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„ A’ . This has not been done and there is no pleading that the act of placing of the bank draft inside envelope „ B’ was despite due diligence and care, which had been taken by the writ petitioners as tenderers.

¶319

89. It is also worth noticing that before the technical bid was opened, the writ petitioners had not even communicated to the authorities concerned that due to any inadvertent error or mistake, the bank drafts, which ought to have been, otherwise, placed inside envelope „ A’ , had been placed inside envelope „ B’ .

¶320

90. In the face of what have been pointed out above, it was not open to the State respondents concerned to open envelope ‘B’ at the stage of opening of the technical bid and thereby make the tenderer concerned eligible to participate in the financial bid , though he was not.

¶321

91. What crystallizes from the above discussion is that the State respondents acted within the ambit of the power vested in them in holding the writ petitioners-private respondents as persons not qualified to participate in the financial bid . This decision, being entirely fair, just and proper, could not have been interfered with in exercise of extra-ordinary jurisdiction under Article 226 of the Constitution of India.

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92. In the result and for the foregoing reasons discussed above, these appeals succeed. The impugned judgment and orders are hereby set aside and in consequence thereof, the writ petitions shall stand

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dismissed.

¶326

93. No order as to costs.

¶327

(I. A. Ansari, J.)

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S. P. Singh, J. : I agree

¶329

(Samarendra Pratap Singh, J.)

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Prabhakar Anand/ Pawan/ NAFR

M/s Broad Son Commodities Pvt. Ltd. v. The State Of Bihar and Ors.

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M/s Broad Son Commodities Pvt. Ltd. v. The State Of Bihar and Ors.

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