Allowed

M/s Surendra Prasad and Co. v. The State of Bihar and Ors.

Patna HC1 Aug 2019CWJC/4196/2019

Case brief

AI extract

What is this about?

Petitioner challenged the cancellation of a government road maintenance tender. The Court found it arbitrary for authorities to cancel a re-tender after inviting bids, falsely claiming an earlier tender was still alive to favour a suspended contractor, thus violating Articles 14 and 226.

What did the court decide?

The impugned order cancelling the re-tender is set aside. The petitioner's prayers for quashing the decision and directing re-tendering are allowed. The department is directed to proceed afresh.

M/s Surendra Prasad and Co. Vs The State of… — Public Procurement and Tenders | Patna HC (2019)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.4196 of 2019

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======================================================

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M/s Surendra Prasad and Co. through its partner Anup Kumar, aged about 53 years, male, S/o Late Surendra Prasad, resident of Village/mohallaAnandpura, P.O.- Kadirgaj, P.S.- Nawada, Distt.- Nawada

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... ... Petitioner/s

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Versus

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The State of Bihar through, Principal Secretary, Road Construction Department, Vishweshwaraiya Bhawan, Bailey Road, Govt. of Bihar, Patna

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The Principal Secretary, Road Construction Department, Vishweshwaraiya Bhawan, Bailey Road, Govt. of Bihar, Patna

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The Engineer-in-Chief-cum-Additional Secretary-cum-Special Secrtary Road Construction Department, Govt. of Bihar, Patna

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The Chief Engineer South Road Construction Department, Govt. of Bihar, Patna

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The Executive Engineer Road Division, Dehri-on-sone.

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D.B.S. Constructions Pvt. Ltd. through its Director, Sunil Kumar Singh, aged about 58 years, Male, Son of Sri Daroga Singh, resident of mohalla Sambika Nagar, P.S.-Dehri, District-Rohtas, Bihar.

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==============	... ... Respondent/s ========================================
Appearance : For the Petitioner/s	: Mr. P. K. Shahi, Sr.Adv. Mr.Alok Ranjan, Adv.
For the State	: Mr.Sushil Kumar, (GP22) Mr. Uday Prasad, AC to GP-22
For Intervenor ==============	: Mr. Prabhat Ranjan, Adv. =======================================
CORAM : HONOUR	ABLE MR. JUSTICE RAJEEV RANJAN PRASAD ORAL ORDER

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5 01-08-2019 I.A. No.1 of 2019 has been filed on behalf of the

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petitioner for adding certain reliefs.

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Learned counsel for the State has no objection to the same being treated as part and parcel of the writ application.

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I.A. No.1 of 2019 is allowed. Let the statements

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and the prayers made in the I.A. be treated as part and parcel of the writ application.

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 2/17

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I.A. No.2 of 2019 has been filed on behalf of one D.B.S. Constructions Pvt. Ltd. who wants its impleadment as party respondent no.6 in the present proceeding. The facts stated therein show that the D.B.S. Constructions Pvt. Ltd. has been awarded the work in question and, therefore, it has been pleaded that any order passed in this case is likely to affect their interest.

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In the aforesaid view of the matter, let I.A. No.2 of 2019 be allowed. The D.B.S. Constructions Pvt. Ltd. is made respondent no.6 in the writ application.

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Parties have made submissions on merit. No prayer

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for adjournment has been made on behalf of either parties.

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Petitioner in this case has prayed for the following

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reliefs:-

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“I. For issuance of a writ or writs in nature of Certiorari for quashing and setting aside the decision as contained in Letter no.212 dated 21.02.2019, issued under the signature of Executive Engineer, Road Division, Dehri-onsone, whereby and where under the respondent authority has cancelled the NIT of OPRMC-II Package no.-37 (B), Retender no. NIT No.03/RCD/DEHRI/2018-19, for the work namely (Long Term Output & Performance Based Road Assets Maintenance work for roads under Package No.-37(B)/.

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II. For direction to the concerned respondent to consider the tender of the petitioner relating to Long Term Output & Performance Based Road Assets Maintenance work for roads under Package No.-37(B) and award the same in

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 3/17

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accordance with law.

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III. For declaring that the action of the respondent authorities are illegal, arbitrary, colorable exercise of power and waste of public money and abuse of process of law. IV. For any other relief or reliefs for which the petitioner is entitled under law in the facts and circumstances of the present case.”

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By filing I.A. No.1 of 2019 petitioner has added the

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following prayers:-

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1 (v). For quashing the decision of the Departmental tender committee as contained in memo no.1731(E) dated 27.02.2019 by which the respondent authorities have decided to open the tender of OPRMC under package no.37B/OPRMC-II/Dehri-on-Sone (Technical bid) after cancelling the NIT of OPRMC-II Package no.-37(B), Retender no. NIT No.03/RCD/DEHRI/2018-19, for the work namely (Long Term Output & Performance Based Road Assets Maintenance work for roads under Package No.-37(B)/ which was cancelled in a very arbitrary and illegal manner.

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(vi) For quashing the decision of Departmental tender committee as contained in memo no.1800(E) dated 01.023.2019 by which the respondent authorities have decided to open the tender of OPRMC under package no.37B/OPRMC-II/Dehri-on-Sone (Financial bid) and decided to allot the work to the other contractor inspite of the fact the present writ application was and was pending before this Hon’ble court for consideation.”

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It is the case of the petitioner that having floated the

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re-tender on 15.01.2019 in which petitioner has already submitted his tender, the action of the State respondents to

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 4/17

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cancel the same and proceeding with the first tender which was declared a single tender and then award of tender to D.B.S. Constructions Private Limited (respondent no.6) is highly arbitrary, unjust and improper with intention to favour respondent no.6. In order to appreciate as to how the decision making process has gone through this Court vide its order dated 25.03.2019 directed the State respondents to produce the official records in which the first tender and re-tender have been dealt with.

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Pursuant to the order dated 25.03.2019 Mr. Sushil Kumar, learned GP-22 has produced before this Court the official records. In course of perusal of the records, the Court has been shown from the minutes of the meeting dated 11.02.2019 of the Technical Bid Evaluation Committee that on the said date after taking note of the facts that the D.B.S. Constructions Pvt. Ltd. was suspended for a period of two years vide departmental letter no.227 dated 09.01.2019 and for that reason the earlier tender had become a single tender, the Executive Engineer vide his letter no.19 dated 10.01.2019 addressed to the Superintending Engineer called for the guidelines and the Superintending Engineer vide his letter no.35 dated 15.01.2019 wrote to the Chief Engineer for re-tendering

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 5/17

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of the work and appropriate guidelines. Further vide memo no.35 dated 15.01.2019 the Superintending Engineer directed the Executive Engineer to go for re-tendering in anticipation of approval considering the importance of the work and then the Executive Engineer published the re-tender.

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The validity period for submission of the tender was extended up to 14.02.2019 till 3.30 PM, but in the meantime vide order dated 24.01.2019 this Court set aside the order of suspension of the registration of D.B.S. Constructions Pvt. Ltd. and the authority under the Bihar Contractors Registration Rules, 2007 was given liberty if so willing to proceed afresh by passing a fresh order, the minutes of the meeting further shows that the members of the committee were of the view that because at the time of participation in the first tender the D.B.S. Constructions Pvt. Ltd. was not under suspension and in view of the judgment of the Court the company is free from suspension with effect from 24.01.2019 and because the first tender has not been cancelled as yet and retender has also been done, any one of the tenders may be cancelled and the another one may be considered.

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The Committee therefore recommended for cancellation of one of the tenders.

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 6/17

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It has been further shown from the minutes of the

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meeting held on 27.02.2019 that on the said date the Departmental Tender Committee looked into the recommendations of the Technical Bid Evaluation Committee and took a decision after taking note of the recommendation of

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the High Level Technical Committee in its meeting held on 20.02.2019 which reads as under:-

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^^fo’k;kafdr ekeys ds laca/k esa fnukad 20-02-2019 dks lEiUu cSBd esa mPp Lrjh; rduhdh lfefr dh vuq”kalk fuEuorgS &

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lE;d fopkjksijkUr ;g ik;k x;k fd izFke fufonk ij eq[; vfHk;ark ds dk;kZy; esa leqfpr fu.kZ; gksus ds iwoZ gh v/kh{k.k vfHk;ark }kjk izR;k”kk esa iqu% fufonk izdkf”kr djus dk funs”k fn;k x;k Fkk ,oa dk;Zikyd vfHk;ark }kjk Hkh blij dkjZokbZ dh xbZA izFke fufonk ds fu’iknu ds pendency ds period esa mPp U;k;ky; ds fu.kZ; ls ;g ,dy fufonk dk ekeyk ugha jgkA blds fuLrkj dh vxzrj dkjZokbZ gksuh pkfg,A vU; fcUnqvksa ij eq[; vfHk;ark Lo;a ds Lrj ls ;Fkksfpr fu.kZ; ysaxsA

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5 foHkkxh; fufonk lfefr dk fu.k;%Z

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5-1 eq[; vfHk;ark] nf{k.k fcgkj ¼;k0½ miHkkx] iFk fuekZ.k foHkkx] iVuk ds i=kad&502¼vuq0½ fnukad 11-02-2019 ,oa i=kad&642¼vuq0½ fnukad 26-02-2019 ls izkIr rduhdh chM ewY;kadu lfefr dh lEiUu cSBd dh dk;Zokgh ,oa vuq”kalk rFkk blds lkFk layXu tk¡p&i= esa vafdr dh xbZ lwpukvksa rFkk mPpLrjh; rduhdh lfefr dh vuq”kalk dafMdk&4 ds vk/kkj ij foHkkxh; fufonk lfefr dk vuqeksnu fuEuor~ gS %&

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5-2 fo’k;kafdr dk;Z ds fy, izkIr fufonk ds rduhdh chM ij rduhdh chM ewY;kadu lfefr ds mDr vuq”kalk ds vkyksd esa foHkkxh; fufonk lfefr }kjk vuqeksnu iznku djrs gq, nksuksa fufonkdkj ;Fkk (1) M/s Raja Construction ,oa (ii) D.B.S. Construction Pvt. Ltd. dks iFk izeaMy] fMgjh&vkWu&lksu ds vUrxZr Long Term Output & Performance based Road Assets Maintenance Work for the Roads Under Package No. 37B/OPPMC-II/Dehri-on-Sone ds fufonk ds rduhdh chM esa lQy ?kksf’kr djus dk fu.kZ;

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 7/17

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fy;k x;kA lkFk gh lfefr }kjk ;g fu.kZ; fy;k x;k fd bl dk;Zokgh dks foHkkxh; csolkbZV ij j[kk tk; ,oa ;fn fnukad 01-03-2019 ds vijkg~u 10-00 cts rd fufonk ls lacaf/kr fdlh izdkj dh vkifRr izkIr gksrh gS] rks eq[; vfHk;ark] nf{k.k miHkkx] rduhdh chM ewY;kadu lfefr dh cSBd vkgwr djsaxs ,oa iqu% fopkj@vafre fu.kZ; gsrq vxyh foHkkxh; fufonk lfefr ds le{k vuq”kalk ds lkFk izLrqr djsaxsA mDr frfFk rd fdlh izdkj dh vkifRr izkIr ugha gksus dh fLFkfr esa eq[; vfHk;ark] nf{k.k miHkkx foÙkh; chM [kksydj foHkkxh; fufonk lfefr ds le{k vuq”kalk ds lkFk izLrqr djsaxsA nkok@vkifÙk gsrq de le; vklUu vko”;drk gsrq fn;k x;k gSA vki ek- mPp U;k;ky; ds vkns”k ds vuqikyu esa dh xbZ dkjZokbZ dks Hkh izLrqr djsaxsA foHkkxh; fufonk lfefr dh bl dk;Zokgh dks e-proc website ij fu.kZ; iznf”kZr djus ds vykos foHkkxh; osclkbZV ij Hkh Mkyh tk;A**

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Mr. P. K. Shahi, learned senior counsel

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representing the petitioner submits that it is evident from the minutes of the meeting dated 27.02.2019 of the Departmental Tender Committee that at least on 21.02.2019 which was the last final extended date for submission of the bid there was no decision to cancel the retender because in its meeting held on 20.02.2019 the High Level Technical Committee had made a recommendation giving its opinion that after the decision of the Court during pendency of the first tender the said tender did not remain a single tender case. The said recommendation had not attained finality because a decision was yet to be taken by the Departmental Tender Committee on the recommendation of the High Level Technical Committee. It is further submitted that even the High Level Technical Committee was not correct in

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 8/17

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saying that during the pendency of the first tender the High Court decision had come and because of that the first tender had not remained a single tender. It is submitted that the decision of the High Court came on 24.01.2019 whereas the second tender had been floated on 15.01.2019 i.e. much before the decision of the Court had come. Learned senior counsel submits that the High Court while setting aside the order of suspension of the D.B.S. Constructions Pvt. Ltd. had not granted any consequential relief.

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In fact, Mr. Prabhat Ranjan, learned counsel representing the respondent no.6 has also submitted before this Court that the writ petitioner in the said case had not prayed for any consequential relief directing the respondents to consider the bid submitted by the petitioner in the first tender. It is his submission that one interlocutory application was filed by him with a prayer that impugned order should not be allowed to be applied retrospectively but then when the order was passed, this Court had not given any such direction.

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Mr. P.K. Shahi, learned senior counsel has further argued that once the retendering had already been done on 15.02.2019, the High Level Technical Committee was not correct in saying that the during the pendency of the firs tender

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 9/17

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the High Court had given a decision.

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Further it is his contention that the D.B.S. Constructions Pvt. Ltd. had never challenged the issuance of the retender. It is his further submission that the Technical Bid Evaluation Committee had in its meeting held on 11.02.2019 clearly stated that one of the bids should be cancelled but the fact remains that the first tender had already been impliedly cancelled as soon as the retender was issued and even the date of submission of the bids in the second tender/re-tender were being extended from time to time and it was lastly extended up to 21.02.2019. On 21.02.2019 which was the last date for submission of the bids the second tender had came to be cancelled. Submission is that to take a decision to cancel the retender is wholly arbitrary and it has been purposely done to accommodate the said D.B.S. Constructions Pvt. Ltd. whose financial bid had already been opened and among the two tenderers M/s Raja Construction and D.B.S. Constructions Pvt. Ltd. the respondent State authorities were fully aware of the financial bid of the D.B.S. Constructions Pvt. Ltd.

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It is submitted that, in the given facts and circumstance, there was no reason for the respondents to take a view that the first tender is still alive particularly when the date

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 10/17

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for submission of bid in re-tender was being extended and it was lastly extended up to 21.02.2019 when the second tender had cancelled. In fact it is his submission that D.B.S. Constructions Pvt. Ltd. could have very well participated in the re-tender for which he had sufficient time to fill up the tender documents after 24.01.2019 till last extended date up to 21.02.2019. It is thus submitted that the cancellation of re-tender cannot be said to be a fair play in action and hence the impugned order cancelling the re-tender is liable to be set aside.

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It has been pointed out that on 25.03.2019 this Court while directing the State to produce original records in which the matter relating to first and second tender have been dealt with had passed an interim order saying that “Any action taken during the pendency of the writ application shall be subject to the result of the writ application.”

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Learned counsel for the State has though produced the official records but is unable to show from the records that prior to issuance of the cancellation order on 21.02.2019 there was any decision of the Departmental Tender Committee to cancel the re-tender. It is evident from the records, thus that on 21.02.2019 which was the last extended date of re-tender there was no decision of the competent authority to cancel the re-

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 11/17

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tender.

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Mr. Prabhat Ranjan, learned counsel representing the D.B.S. Constructions Pvt. Ltd. (respondent no.6) submits that the respondent authorities are fully justified in taking a view that the first tender was still alive and further that by cancelling the retender no illegality or arbitrariness in the decision making process have been reflected on the part of the respondent authorities. It is his further contention that in fact retender was done by the Executive Engineer without approval of the competent authority and therefore the Executive Engineer had in fact acted on his own. Learned counsel submits that the decision of the departmental tender committee taken on 27.02.2019 was put on the website and an objection was invited to the same, but the petitioner had not raised any objection.

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Learned senior counsel for the petitioner however submits that even before the decision was uploaded on the website, on 28.02.2019 copies of writ application was served in the office of learned Advocate General and writ petition was registered on 01.03.2019.

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In the said view of the matter alone it is argued that the submissions of respondent no.6 does not seem to be significant.

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 12/17

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Having heard learned senior counsel for the petitioner, learned counsel for the State as well as learned counsel representing respondent no. 6 and after going through the records placed before this Court, this Court is of the considered opinion that after taking a view that by virtue of the order of suspension of respondent no. 6 and the communication dated 09.01.2019 the first tender had become a single tender and therefore re-tendering was required, the Executive Engineer had sought guidelines from the Superintending Engineer and then the Superintending Engineer had sent the same for approval to the Chief Engineer. The minutes of the meeting of the Technical Evaluation Committee held on 11.02.2019 shows that the Superintending Engineer had in anticipation of the approval of the Chief Engineer directed for re-tendering of the work considering the importance of the work. It is not the case of the State-respondents in their counter affidavit that the second tender/re-tender was cancelled on 21.02.2019 because it was not approved by the Chief Engineer. The approval of re-tender is thus not an issue. The submission of Mr. Prabhat Ranjan, learned counsel representing the respondent no. ‘6’ that the retender had no sanctity is required to be noted only for the purpose of rejection. The only ground stated in counter affidavit

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 13/17

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of R-1 to R-5 is that tender may cancelled at any stage without giving reasons.

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It is throughout the case of the State-respondents that they decided to consider the first tender after taking a view that the first tender was alive during the pendency of the writ application of the D.B.S. Constructions Pvt. Ltd. in which the order dated 24.01.2019 was passed. In the opinion of this Court, this view of the State-respondents is not correct inasmuch as it is not in dispute that the department had already proceeded through Executive Engineer to publish the retender on 15.01.2019 itself. Thus, during the pendency of the writ application itself the department had proceeded with the retender and once re-tender had been issued it cannot be allowed to be pleaded by the respondents that the first tender was still alive. This Court finds that even the High Level Technical Committee has while giving its recommendation on 20.02.2019 thought that the first tender be considered by taking a view that during the pendency of the writ application the first tender was alive. This Court finds that the reasoning of the High Level Technical Committee was also based on an incorrect understanding of the status of the first tender.

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This Court, therefore, finds that D.B.S.

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 14/17

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Constructions Pvt. Ltd. had challenged its order of suspension which was set aside on 24.01.2019 but while setting aside the said order, the matter was left open for the competent authority under the Registration Rules, 2007 to proceed afresh and pass a reasoned order. This Court did not grant any consequential relief to the petitioner and no direction was issued to the Staterespondents to consider the first tender or the case of the petitioner treating the first tender alive. Thus, in the opinion of this Court the order dated 21.04.2019 passed by this Court was limited to the setting aside of the order of suspension and leaving it open for the respondent authorities to pass a fresh reasoned order if so advised. The same cannot be made a basis to say that it would amount to reopening of the first tender.

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The fact that the private respondent no.6 had not challenged the second tender/re-tender has not been denied. It is not in dispute that after 24.01.2019 till 20.02.2019 i.e. before cancellation of the re-tender on 21.02.2019 the respondent no.6 could have participated in the re-tender and their bid could have been considered along with any other bid. That could have also been in public interest to allow the willing tenderer to participate in the re-tender and to compete among the each other in the matter of financial bid. It would have also given a level

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 15/17

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playing field and a fair play in the conjoint. The fact that the financial bid of the respondent no.6 had already been opened and that had made the State officials aware of the ultimate result if the first tender is reconsidered by cancelling re-tender is also not in dispute. In the opinion of this Court a fair and transparent mode was required to be adopted and that could have been done by only allowing the re-tender to go on to its logical end but that was not allowed to be done. The competition was curtailed at the threshold by taking a totally arbitrary view that the first tender was still alive.

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The Court is conscious of the legal position that in tender matters the Court should not exercise its jurisdiction under Article 226 of the Constitution of India unless it is a case of arbitrariness in the decision making process on the part of the respondent-State but at the same time Court will also keep in mind that the applicability of the principles of Article 14 of the Constitution of India is now a well acceped legal position. In this case the Court finds that the Technical Evaluation Committee had clearly opined on 11.02.2019 that one of the bids should be cancelled. Under these conditions the respondents in order to justify their decision to cancel the retender arbitrarily recorded in the decision of the High Level

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 16/17

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Technical Committee as well as the tender committee that the first tender had remained alive during the pendency of the writ application. In any view of the matter there was no decision of the Departmental Tender Committee on 21.02.2019 to cancel the re-tender.

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This Court is of the considered opinion that there is no basis to say that the first tender was alive because it was the respondents who had proceeded with the re-tender, invited bidders to participate and thereby they had made it clear that the first tender is no longer in existence. It is reiterated that in the official records and the counter affidavit of R-1 to R-5 there is neither any decision nor any statement that the re-tender was not approved by the competent authority. This Court therefore finds that there are enough reasons to take a view that being fully aware of the financial bid of R-6, the Departmental Tender Committee took an erroneous view that the first tender is alive only to favour respondent no.6. The financial bid of R-6 was already opened and available with the Departmental Tender Committee and they were aware that the moment the first tender is taken as alive the respondent no.6 shall be declared successful and that is how the things have proceeded in this matter.

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This Court is constrained to take this view when it

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Patna High Court CWJC No.4196 of 2019(5) dt.01-08-2019 17/17

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is found that there was no bar for the respondent no.6 in participating in the re-tender but that process was avoided by cancelling the re-tender and taking a view that first tender was still alive. The arbitrariness in the decision making writs large. The impugned order would not, thus, survive. The decision as contained in Annexure- ‘4’ by which re-tender was cancelled is hereby set aside. The prayer made in the writ application in terms of prayer no.1(I) and (III) as also the prayer made in the I.A. No.01 of 2019 are hereby allowed.

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As a result of this decision, the department shall proceed afresh with the re-tender.

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This writ application stands allowed to the extent indicated hereinabove.

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arvind/-

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(Rajeev Ranjan Prasad, J)

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M/s Surendra Prasad and Co. v. The State of Bihar and Ors.

Case brief

What is this about?

What did the court decide?

M/s Surendra Prasad and Co. v. The State of Bihar and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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