(2023) taxcode.in 09 HC
IN THE HIGH COURT OF CHHATTISGARH
Surajbhan Engineering
v.
State of Chhattisgarh and Ors.
WPC No. 3199 of 2023
Decided on 19-Jul-23
Shri Ramesh Sinha, Chief Justice and Smt. Rajani Dubey
Add. Info:
For Appellant(s): Mr. Ankit Singhal, Advocate
For Respondent(s): Mr. Gagan Tiwari, Dy. Govt. Advocate
Judgment/Order:
Order on Board
Per Ramesh Sinha, C.J.
19.07.2023
1. Heard Mr. Ankit Singh, learned counsel for the petitioner and Mr. Gagan Tiwari, learned Deputy Government Advocate, appearing for the State/respondent No.1.
2. Undisputed facts of the case are that on 16.06.2023, the Respondent No. 2 – the Municipal Council of Sakti, floated a tender bearing NIT No. 365/2023-24 for the Construction of B.T. Road, widening, and development of the road from Budhwaribazar to Gurunanak Complex at Sakti, District – Sakti, Chhattisgarh. The subject tender was a second call tender in nature and the value of the tender work was for Rs. 303.11 Lakh only. In total, nine individuals/entities submitted bids for the tender procurement, including the Petitioner. Through the impugned communication dated 06.07.2023 the Petitioner was informed by the tendering authorities that the bid of the Petitioner has been rejected solely on the ground that GST returns have been filed for only last 5 months and return of March and April 2023 has not been filed and the bid of Respondent No. 3, M/s. Govind Kumar Agarwal has been accepted. Hence, the petitioner had filed this writ petition with the following prayers :
“10.1 That this Hon’ble Court may kindly be pleased to call for the entire records from the office of Respondent No.2 with regard to cancellation of technical bid of the Petitioner in tender bearing NIT No. 365/2023-24, in the interest of justice;
10.2 That this Hon’ble Court may kindly be pleased to declare that the disqualification of the Petitioner during technical evaluation of technical bids in tender bearing NIT No. 365/2023-24 as arbitrary, illegal and bad in law and consequently quash and set aside the communication dated 6.7.2023 (Annexure P-1), in the interest of justice;
10.3 That, this Hon’ble Court may kindly be pleased to pass any appropriated writ, order or direction to declare that the Petitioner is eligible to qualify for the technical bid and consequently, direct the Respondent No. 2 to open the financial bid of the Petitioner in tender bearing NIT No. 365/2023-24;
10.4 That this Hon’ble Court may kindly be pleased to declare bid selection of Respondent No. 3 as wrong and in non- compliance with the Tender Terms and Conditions. Further, kindly direct that Respondent No. 3 be disqualified from the tendering process due to their failure to fulfill the specified criteria in tender bearing NIT No. 365/2023-24;
10.5 Any other relief or relief(s) which this Hon’ble Court may deem fit and proper in view of the facts and of the case, may also kindly be granted.”
3. Mr. Ankit Singhal, learned counsel for the petitioner submits that the disqualification of the petitioner for the technical bid is without any application of mind, discriminatory, arbitrary, perverse and against the terms and conditions of the tender document and the tender has been awarded to Respondent No.3, M/s. Govind Kumar Agarwal, despite its clear non-compliance with the criteria laid down in the NIT terms and conditions. He further submits that while the petitioner’s bid was rejected for not filing of the return for the month of May 2023, respondent No.3 has also failed to file the return for the same month. Thus, he prays to declare bid selection of respondent No.3 as wrong. He placed reliance in the matter of Union of India v. Dinesh Engg. Corpn., (2001) 8 SCC 4911, wherein the Hon’ble Apex Court while analysing the scope of judicial review in contractual sphere has held that:
“12. There is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to the policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the material on record…… Any decision be it a simple administrative decision or policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution.”
4. We have heard learned counsel for the petitioner and perused the documents appended with the writ petition.
5. The Hon’ble Supreme Court in the case of Tata Motors Limited v The Brihan Mumbai Electric Supply & Transport Undertaking (Best) and Others passed in Civil Appeal No. 3897 of 2023 vide judgment dated 19.05.2023 held as follows :
“48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courThe Hon’ble Supreme Court in the case of Tata Motors Limited v The Brihan Mumbai Electric Supply & Transport Undertaking (Best) and Others passed in Civil Appeal No. 3897 of 2023 vide judgment dated 19.05.2023 held as follows :
“48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges’ robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489)
52. Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out. The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Association of Registration Plates v. Union of India and Others, reported in (2005) 1 SCC 679.
53. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v. State of Orissa and Others, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.”
6. Considering the submissions advanced by the learned counsel for the petitioner as well as the considering the judgment of Hon’ble the Apex Court in Tata Motors Ltd (supra) and particularly the fact that the respondent No.3, M/s. Govind Kumar Agarwal has already been selected as successful bidder L-1, we do not find any good ground to entertain this writ petition.
7. Accordingly, the writ petition lacks merit deserves to be and is hereby dismissed.
(Ramesh Sinha)
Chief Justice
(Rajani Dubey)
Judge
Original judgment copy is available here.