Judgment · High Court · 2012

The case projected in the writ petition is that when the petitioners had been waiting for rate negotiation in acceptance of the decision taken by the co mpetent authority, the respondent No. 2 i.e. the Sr. Manager (EMCC) of the respo ndent Mill issued the impugned notice canceling the NIT dated 13.6.2011 with the decision to go for fresh NIT. It is this decision to cancel the NIT, which is u nder challenge in this writ petition.

In the additional affidavit coupled with the consolidated additional aff idavit bringing certain subsequent development on record, the petitioners have c ontended that the respondent corporation has acted in the matter illegally and t hat there has been violation of the norms fixed for processing tenders. It has a lso been contended that the decision making process is not valid one being not f ounded on transparency and fairplay.

Referring to the guidelines relating to negotiated settlement and also t he practice being followed by the respondent corporation in such matters, the pe titioners have pleaded that there has been discretion in abandoning the negotiat ed settlement with the decision to go for fresh NIT.

The respondents have filed their counter affidavit denying the contentio ns raised in the writ petition. It has been contended that the impugned cancella tion of the earlier tender process is founded on valid ground and that the petit ioners cannot claim as a matter of right that the tender should have been finali zed on the basis of the negotiated settlement irrespective of viability of the r ates quoted by them.

I have heard Mr. S.K. Kejriwal, learned counsel for the petitioners as w ell as Mr. J. Roy, learned Standing Counsel, HPCL. I have also considered the en tire materials on record including the records produced by Mr. J. Roy, learned S tanding Counsel, HPCL.

In support of his argument, Mr. S.K. Kejriwal, learned counsel for the p etitioners has placed reliance on the three decisions, which are reported in 201 2 (1) GLT 271 (Dhirendra Chandra Bhattacharjee Vs. State of Tripura & Ors.); 201 1 (3) GLT 695 (Ackruti Plates Private Ltd Vs. State of Tripura & Ors.) and (2007 ) 8 SCC 1 (Reliance Energy Ltd. Vs. Maharastra State Road Development Corpn & Or s.). Referring to the said decisions and also the file containing the impugned d ecision produced by Mr. J. Roy, learned Standing Counsel, HPCL, Mr. S.K. Kejriwa l, learned counsel for the petitioner has submitted that the particular decision to cancel the earlier NIT was taken through the competent authority without pla cing the relevant materials before the said competent authority. Referring to An nexure-4 note dated 1.9.2011 furnished by Sr. Manager (Mech.)/EMCC, he submits t hat since a decision was taken for negotiated settlement, the said decision coul d not have been set at naught by withholding the relevant materials/notings from the competent authority. According to him a conscious decision having been take n to go for negotiated settlement as per the relevant guideline in this regard, the said decision ought not to have been altered without any valid reason.

Countering the above, Mr. J. Roy, learned Standing Counsel, HPCL submits that the petitioners cannot claim negotiated settlement as a matter of course. He submits that the impugned decision being founded on bonafide exercise of powe r and jurisdiction, the same cannot be interfered with exercising the power of j udicial review under Article 226 of the Constitution of India. He further submit s that the decision for negotiated settlement, on which the petitioners have har ped upon having not been acted upon and that the same being subject to approval of the competent authority, without such approval of the said internal notings, the same did not have any validity and that it is the final decision that was ta ken by the competent authority which will have to be taken into consideration wh ile deciding the issue raised in the writ petition. I have very carefully considered the submissions made by the learned cou 11. nsel for the parties and have also applied my mind to the relevant materials inc luding the notings in the concerned file. It is true that while opening the tech nical bids, the tender committee decided to go for the financial bids. However, it was found that the rates quoted by L-1 bidder i.e. the petitioner No. 4 was 2 7% higher than the estimated value of the contract. It is also true that by Anne uxre-4 noting dated 1.9.2011 furnished by the Sr. Manager (Mech.)/EMCC, a propos al was made to call L-1 bidder i.e. the petitioner No. 4 with detailed price bre ak up for negotiation in the tender committee meeting for reduction in the rate offered by them. By the said proposal it was also conveyed that since the job wa s to be split among 6 qualified bidders i.e. L-1, L-2 and L-3 as per the NIT, th e bidder L-2 and L-3 rankings should also be asked to accept final negotiation L -1 rate.

The aforesaid noting dated 1.9.2011 will have to understood in the conte xt of further process made in respect of the proposal. As the note suggests, the proposal was to be put up for scrutiny of the finance department. On perusal of the relevant file what is found is that the said noting was followed by further notings at different levels. In all the notings, it was pointed out that the ra te quoted by L-1 bidder i.e. the petitioner No. 4 was 27% higher than the estima ted value of Rs. 49,70,000/-, which comes to Rs. 63,11,900/-. In the said noting s the proposal was further processed for negotiated settlement for price reducti on subject, however, to the approval of the competent authority. As per the rele vant notings, the matter was finally to be placed before the EMCC and the EMCC v ide its noting dated 6.9.2011 opined as follows: (cid:28)SUB: PROPOSAL FOR CANCELLATION OF TENDER NO: NPM/EMCC/MECH/11-12/28 DT. 13.6.20 11 FOR ’ANNUAL MECHANICAL MAINTENANCE RATE CONTRACT FOR GENERAL/COMMON ITEMS’. Price bid of the techno-commercially qualified bidders against subject percenta ge rate tender was opened on 30.8.2011 and L-1 bidders quoted rate was found 27% higher than the estimate. However, before opening of the price bids, representation from following bidders were received.

M/s. Kalita Engineering, 2. M/s. K.S. Enterprise and 3. M/s. HBN Enterprise. Above mentioned bidders in their letter dated 30.8.2011 (Ref: page 1088 to 1090) have mentioned that rejection of their technical bids is unjustified and reques ted for reviewing the same and to open their price bids, other wise they may ini tiate legal action. Grievances is disqualified bidders have also been published in local press; a copy of the same is enclosed at page 1087. To cancel the subject tender and go for retendering without any change i Considering much higher quoted rate by L-1 bidder compared to our estimate as we ll as in order to avoid litigation, it is proposed:- a) n the tender document. b) EMD afresh against instant retender. c) not to deposit same afresh against instant retender. Put up for approval please. Bidders submitted EMD against above cancelled tender need not to submit Bidders deposited cost of tender document against cancelled tender need Sd/- Illegible Sr. Manager (Mech)/EMCC (cid:29)

After the aforesaid noting dated 6.9.2012 furnished by the EMCC, the mat ter was directed to be placed before the tender committee. Eventually the matter was placed before the competent authority which accepted the proposal made by t he EMCC for cancellation of the tender and to go for re-tendering without any ch ange to the tender document. As per the said proposal, the bidders need not subm it EMD afresh and that the bidders who deposited cost of tender documents agains t the cancelled tender need not also to deposit the same afresh.

It is the aforesaid decision making process which has been challenged in this writ petition. Needless to say that this Court exercising its power of jud icial review under Article 226 of the Constitution of India is only concerned wi th the decision making process and not the decision as such. Upon reading of the file produced by Mr. J. Roy, learned Standing Counsel, HPCL and as discussed ab ove, I do not find any error in the decision making process towards assailing th e final decision to cancel the tender and to go for re-tendering.

Mr. S.K. Kejriwal, learned counsel for the petitioner has submitted that the approval of the competent authority was obtained without placing the earlie r decision in various notings to go for negotiated settlement. As per the said n otings, approval of the competent authority was to be obtained for the negotiate d settlement. The noting on which Mr. Kejriwal, learned counsel for the petition er has emphasizes has been discussed above. After the said noting with the propo sal to place the matter before the competent authority, the same was finally dir ected to be placed before the EMCC. As to what was the recommendation of the EMC C has been quoted above.

In view of the above, it cannot be said that the decision and/or noting to place the matter before the competent authority to consider the proposal for negotiated settlement was never placed before the said authority. In fact the ma tter was to be placed before the competent authority through the EMCC. When the matter was placed before the EMCC, he had furnished the aforesaid note and there after the said proposal was agreed upon by the Finance and finally the matter wa s placed before the tender committee and eventually before the competent authori ty and the authority including the competent authority accepted the said proposa l. This is how the matter attained finality. It will be inappropriate to say tha t the competent authority was kept in dark. In fact the entire file was placed b efore him with the notings including the above quoted note of the EMCC. When the notings themselves suggested to place the matter before the EMCC towards apprai sal of the competent authority and the EMCC furnished the above quoted note deal ing with the earlier notings, it cannot be said that there was lack of transpare ncy and fairplay.

The decisions on which Mr. Kejriwal, learned counsel for the petitioner has placed reliance has no application to the facts and circumstances of the pre sent case. In Dhirendra Chandra Bhattacharjee (supra), the issue involved was as to whether the earnest money deposited in the shape of Call/Bank Draft/Fixed De posit under the specified Bank would be sufficient or not. When it was found tha t the petitioner involved in the said case had submitted the photocopy of Short Term/Call Deposit of Tripura Gramin Bank, it was held that photocopy of the same , ought have been taken care of by asking the tenderer to submit the original re ceipt.

In Ackruti Plates Privbate Ltd. (supra) interfering with the cancellatio n of tender process, it was held that although the State has inherent power to c ancel NIT, but such power is to be exercised only on valid ground. In the said c ase, it was found that the matter was never placed before the Advisory Board, wh ich was required to be placed. Thus, this case is also no help to the case of th e petitioners.

In Reliance Energy Ltd. (supra), the Apex Court was concerned with the n orms for valid State action and necessity to provide (cid:28)level playing field (cid:29) to al l bidders. In the said case, the Apex Court was concerned with necessity to indi cate the norms and benchmarks with clarity so as to ensure legal certainty. It w as found that there was vagueness or subjectivity in the norms specified. Accord ingly, it was held that there was unequal and discriminatory treatment violating the doctrine of (cid:28)level playing field (cid:29). This case is also no help to the case of the petitioner.

Above apart the claim relating to negotiated settlement cannot be claime d by the petitioner as a matter of right. Clause 12 of the Procurement Manual, o n which the learned counsel for the petitioners has placed reliance itself provi des that negotiation should be held only with L-1 bidder, if considered necessar y and that the tool of negotiation should be used selectively. It has also been provided that injudicious and unimaginative application of their tool might send a wrong signal with the possibility of cartel formation etc. by bidders defeati ng the very purpose of negotiation.