High Court
Case Details
WP(C) 3588/2013 BEFORE HON’BLE MR. JUSTICE B.K. SHARMA All the writ petitions, although pertain to different NITs for civil works issue d by the respondents ONGC Ltd., but having regard to the grievance raised center ing around the same issue, have been heard together and are being disposed of by this common order.
Facts
I have heard Mr. P.D. Nair, learned counsel for the petitioners. Also heard Mr. G.N. Sahewalla, learned Sr. Counsel, assisted by Mr. N. Anix Singh, learned coun sel representing the ONGC Ltd. Learned counsel for the parties have extensively argued in reference to the writ petition being WP(C) No. 2918/2013. When the writ petition was filed, the prayer made in the writ petition was not t o finalise the tender process in question and/or issue any work order by way of draw of lots. According to the petitioner he having quoted the lowest bid offer a rate of 11.10% below the estimated cost as per the condition of the NIT, he is entitled to get the work order to the exclusion of others. In this connection, the petitioner has referred to the Condition No. 3 of the EQR (Essential Qualifi cation Requirement). Clause 3 reads as follows: (cid:28)(3) In case of identical lowest offer rate by more than 1 (one) qualified bidde r, the selection will be made by draw of lot between the parties offering the sa me lowest price (cid:29) Referring to the aforesaid clause, it is the case of each one of the petitioners involved in this batch of writ petitions that they having quoted the lowest off er rate and there being no other identical lowest offer rate offered by other te nderers, the Tender Committee ought to have made the selection confining the cas e of the petitioner alone. In the counter affidavit filed by the respondents ONGC referring to the clauses of the NIT, it has been stated thus. (cid:28)From a conjoint reading of the aforesaid clauses, it can be observed that:- That valid offers, which fulfils the terms and conditions of contract li (i) ke EQR / BEC, EMD etc. and are within the accuracy range i.e. (+/-) 10% of estim ated cost put to tender, may be accepted without much deliberation. (ii) If the quoted rates are more than 10% of estimated cost put to tender, t he bidders may be called for negotiation as deemed fit by tender committee as pe r guidelines of the department. (iii) If the quoted rates are less than 10% of estimated cost put to tender, t he tender committee has to ascertain workability of rates w.r.t estimated cost p ut to tender as per provisions of clause no. 56.6 of Works manual 2007. To asses s the workability, Tender committee takes in to account regarding the technical requirement and the nature of the work, place/location of execution of the work, local environmental conditions and topography of the area, operational urgency of the work for the department etc. The capability of execution of the work by t he bidders is rated at par for all the bidders who have participated in the tend er. The answering deponent states that the aforesaid procedure is uniformly adop ted by the Respondent Corporation for each and every tender on case to case basi s whenever the quoted rate by the bidders are less than (-) 10% w.r.t estimated cost put to tender. (iv) After taking in to consideration of all guidelines by the department and terms & conditions put to tender, tender committee submits its recommendations After acceptance of recommendations of tender committee and the bid, wor to competent authority for his acceptance. (v) k is awarded to respective bidder. The answering deponent begs to state that the evaluation of the tenders received in pursuance to the Tender No RC 2PC13032 would be in strict adherence to the g uidelines contained in the ONGC Works Manual-2007. In the instant case, as state d herein above, the evaluation process of the Tender No RC 2PC13032 by the Tende r Committee is not yet completed as on date and pending such conclusion of the e valuation process of the Tender No RC 2PC13032, the apprehension of the petition er, is wholly misconceived and incorrect. (cid:29) While entertaining the writ petition, an interim order was passed directing the respondents not to issue any work order till the next returnable date. However, the said order was modified by order dated 7.6.2013, entitling the ONGC authorit y to take a decision in the matter. It was however, provided that pursuant to th e final decision, no work order should be issued in favour of the parties select ed for the work order. Pursuant to the aforesaid modified interim order dated 7.6.2013, the Tender Comm ittee has decided the matter in its meeting held on 12.6.2013. As per the said d ecision, there will be a draw of lots to decide L1 and L2 bidder among 12 bidder s mentioned in the minutes of the discussion. While Mr. Nair, learned counsel for the petitioners has submitted that the petit ioners having offered the rate below the estimated cost as per the aforesaid cla use of the NIT/EQR, the ONGC authority ought to have considered the case of the petitioners instead of going for drawing of lots. Referring to the some earlier work orders, he also submits that when on those occasions, the ONGC authority ha d accepted the rates even 16% to 45.33% below the estimated cost, there is no ea rthly reason as to why the case of the petitioners should be treated differently . He also submits that the decision contained in the minutes of the meeting of t he Tender Committee having depicted a hidden agenda and/or viable rates, the sam e is opposed to fairness and transparency in the tender process. Countering the above argument, Mr. Sahewalla, learned Sr. Counsel for the respon dents submits that when the writ petition was filed, in absence of any decision by the Tender Committee, they were premature. Referring to the aforesaid minutes of the meeting of the Tender Committee he submits that the Tender Committee con sisting of Members with experts having taken the particular decision in referenc e to the relevant materials, it cannot be said to be a case of lack of transpare ncy and fairplay in the matter of consideration of the tenders submitted by vari ous tendereres. He also submits that merely because the petitioners have offered lowest offer rate than the estimated cost, same cannot cloth them with the righ t to get the work order allotted irrespective of the other valid considerations. Referring to the decision in (2007) 11 SCC 704 (State of Assam Vs. Abhinandan T rading (P) Ltd.), he submits that the question being raised by the petitioners t hat the respondent authority has taken the decision without disclosing the parti cular methodology in the NIT being bad of law is not tenable. I have given my anxious consideration to the submissions made by the learned cou nsel for the parties and have also gone through the entire materials on record. Before proceeding further with the matter, it will have to be borne in mind that the parties which are going to be affected by any adverse order, if passed in t hese writ petitions against the action of the ONGC Ltd. being not before this Co urt, no such course of action can be adopted without affording a reasonable oppo rtunity of being heard. The Tender Committee has taken the final decision in its meeting held on 12.6.20 13 pursuant to the liberty granted by this Court. Although in the aforesaid Clau se No. 3 of the EQR, it is provided that in case of identical lowest offer rate by more than one qualified bidder, selection will be made by draw of lots betwee n the parties offering same lowest price, that by itself cannot mean that the Te nder Committee is bound to accept the lowest price. The said provision relates t o the particular position in which there is identical lowest offer rate by more than one qualified bidder, which does not mean that there will have to be draw o f lots between the parties offering the same lowest price irrespective of their viability or otherwise. Mr. Nair, learned counsel for the petitioners has fairly submitted that merely because the petitioners have offered lowest price, they c annot claim that the work order should be allotted to them irrespective of all o ther factors required to be considered by the Tender Committee. However, he subm its that since the petitioners have offered the lowest price, going by the said provision and there being no impediment towards considering his case, it was inc umbent on the part of the ONGC authority to consider his case instead of adoptin
Legal Reasoning
31. Considering the submissions made and the ground realities regarding supply o f potable spirit to Assam, we are inclined to accept Dr. Singhvi’s submission an d to reject those made by Mr Altaf Ahmed and Mr M.N. Rao. Although, doubts were expressed by this Court in Dutta Associates regarding the concept of (cid:28)viability range (cid:29), its necessity or its real purpose, the decision of the Government of Ass am to resort to such a procedure has to be left to the Government of Assam itsel f. Unless it can be shown that the said procedure had been misused to favour any particular individual, which is not so in the instant case, it would not be pro per for us to express any opinion as to the procedure the Government should adop t except to say that whatever procedure is adopted should be open, fair and tran sparent. (cid:29) In the minutes of the Tender Committee proceeding referred to above, it has been observed thus: (cid:28)7.11. Technical member of tender committee informed that (i) The estimates are prepared on the basis of CPWD rates -2007+51% Cost Indexov er SOR items plus approved market rates for Non-SOR items, whereas the Cost inde x has been revised by CPWD as 80% in place of 51%. (ii)The quoted rate as (-)10% w.r.t the estimated cost put to tender (CPWD rates -2007+51% Cost Index), stands as (-) 25% approx. w.r.t the estimated cost put t o tender (CPWD rates-2007+80% Cost Index). (iii) The quoted rates as (-)10% w.r.t the estimated cost also does not appear t o be workable. In absence of any higher quoted rates, there is no option left wi th deptt. than to consider this rates i.e (-)10% for finalisation & award of wor k, since the majority of the bidders are quoting as (-)10% w.r.t the estimated c ost put to tender (CPWD rates -2007+51% Cost Index) and operational requirement. The status of quoted rates is same with almost every tender of similar type/nat ure. (iv) In addition to this, the bidders have to pay Service tax @ 12.36% over 40% of the contract value/executed value. 7.12. In view of the feed back given by the technical member, tender committee i s of the opinion that any rate lower than (-)10% w.r.t the estimated cost put to tender cannot be considered as workable rates. Moreover, the quoted rates as (+ /-) 10% are acceptable as per clause no.56.1 and 5.4 of Works Manual-2007. In ad dition to this, the bidders have to pay Service tax @12.36% over 40% of the cont ract value/executed value. Hence, the bid having their quoted rates lower than ( -)10% w.r.t the estimated cost put to tender is considered as not workable and s uch bids are rejected. In the present case, the bidder namely (3/15) M/S J.R. Construction & En gineering has quoted rate as (-)11.05% below the estimated cost put to tender, h ence, the bid of (3/15) M/S J.R.Construction & Engineering is not considered as workable and is rejected. 7.13. The bids of the other 12(Twelve) bidders who have quoted their rates as (- )10% below the estimated cost put to tender, namely (2/15) Diganta Gogoi, (4/15) Jibon Bharali, (5/15) Saurav Jyoti Baruah, (6/15) Binud Kr. Saikia, (7/15) Hira nya Gogoi, (8/15) M/s. Sontosh Sahewalla, (10/15) M/S. Jadav Chandra Chutia, (11 /15) Lohit Ch. Gogoi, (12/15) Pulin Gayan, (13/15) M/S. Surabhi Society, (14/15) Protul Duarah and (15/15) Sri Sanjib Das are acceptable for further evaluation. Each one of these 12 (Twelve) qualified bidders has L-1 ranking. (cid:29) After citing the status of the bidders against the estimated cost of Rs. 97,01,3 49.38, it has further been observed thus with the following recommendation: 7.14. In view of the fact that more than one bidder has emerged as L-1 bidder, T C is of the opinion that the bidder whom the work is to be awarded may be decide d by draw of lots among all the qualified L-1 bidders. Draw of lots may be condu cted in the presence of qualified bidders who choose to be present in line with the undertaking submitted to the Hon’ble Gauhati High Court. 8.0 Recommendations: In view of above deliberations, TC recommends To reject the bids of (1/15) Aditya Dowarah, (3/15) M/S J.R. Constructio 1. n & Engineering and (9/15) Shri Hitesh Dutta as deliberated at point no. 7.6, 7. 7, 7.9, 7.10, 7.11,& 7.12. 2. To qualify the bids of (2/15) Diganta Gogoi, (4/15) Jibon Bharali, (5/15 ) Saurav Jyoti Baruah, (6/15) Binud Kr. Saikia, (7/15) Hiranya Gogoi, (8/15) M/s . Sontosh Sahewalla, (10/15) M/S. Jadav Chandra Chutia, (11/15) Lohit Ch. Gogoi, (12/15) Pulin Gayan, (13/15) M/S. Surabhi Society, (14/15) Protul Duarah and (1 5/15) Sri Sanjib Das as deliberated at point no. 7.8, 7.9, 7.10, 7.11, 7.12 & 7. 13. 3. To conduct draw of lots to decide L-I and L-II bidders among all the 12 (Twelve) bidders mentioned in Para 8.0(2) above in the presence of bidders who c hoose to be present. 9.0 Undertaking of no personal interest by T.C members is placed at sl. No. 710 to 712. (cid:29) From the above, what is seen is that the Tender Committee has considered the vie w of the technical member of the Tender Committee. It depicts that the estimates were prepared on the basis of the CPWD rates -2007 + 51% Cost Index over SOR it ems plus approved market rates for Non-SOR items, whereas the Cost index has bee n revised by CPWD as 80% in place of 51%. It has been opined that the quoted rat es as (-) 10% with regard to the estimated cost is not workable in absence of an y higher quoted rates. The committee felt that there is no option left with the Department than to consider the rate i.e. (-) 10% for finalization and award of work, since the majority of the bidders are quoted as (-) 10% with regard to the estimated cost and operational requirement. In addition to the same, the bidder s will also have to be pay Service Tax @ 12.36% over 40% of the contract value/e xecuted value. On the basis of the above, the Tender Committee, formed the opinion that any rat e lower than (-) 10% with regard to the estimated cost put to tender cannot be c onsidered as workable rates. The aforesaid exercise carried out by the Tender Committee, in absence of any al legation of malafide exercise of power and/or arbitrariness cannot be said to be devoid of the principles of transparency and fairplay in the matter of consider
Arguments
g a different methodology not depicted in the tender notice. During the course of hearing, Mr. G.N. Sahewalla, learned Sr. Counsel for the ON GC has produced a chart to claim that the petitioners involved in this batch of writ petitions have created a curtael with the particular design so that in case of accepting the plea of the petitioners, the work order is issued only to them without considering the cases of other tenderers. The decision in Abhinandan Traders (supra) has a reference to the earlier decisi on in Dutta Associates reported in (1997) 1 SCC 53. In Dutta Associates, the ten der notice having not specified (cid:28)viability range (cid:29) nor having indicated that only the tenders coming within the (cid:28)viability range (cid:29) would be considered, it was hel d that fairness demanded that the parties should have been notified in the tende r notice itself the particular procedure which the authority proposed to adopt w hile accepting the tender. Pursuant to the said judgment, the Government of Assa m included Clause 28 in the NIT where the said omission was sought to be remedie d. Referring to the said clause, the Apex Court in Abhinandan Traders (supra) ha s made the following observations: (cid:28)28. The doubts expressed by this Court in the aforesaid decision were taken not e of by the Government of Assam and it led to the inclusion of Clause 28 in the notice inviting tender where the aforesaid omission was sought to be remedied. C lause 28 of NIT which have been extracted hereinbefore, specifies that the contr act would be given to the tendered found suitable from the (cid:28)viable range (cid:29) which was to be determine on the basis of analysis of the cost price, export duty, tra nsport cost, etc. by the Commissioner of Excise, Assam. What had been left unspe cified in the notice inviting tender was, therefore, introduced subsequent to th e decision in Dutta Associates and the applicants for grant of the contract can have no further grievance on such score. 29. However, apart from expressing doubts over the decision of the Government of Assam of taking recourse to the concept of (cid:28)viability range (cid:29), the discussions t hereupon was not taken any further and the decision was rendered on a different set of facts, namely, that for granting the contract negotiations were entered i nto with one of the applicants only. 30. It is no doubt true that there is no scope of the concept of (cid:28)viability rang e (cid:29) being misused to favour a particular applicant, but there is no such allegati on in the instant case, nor has any mala fides been attributed to the action tak en by the authorities in awarding the contract to M/s Rangpur Trading Co.(P) Ltd . whose offer was much lower than the fixed rate. One of the arguments advanced was that the offer was made by M/s Abhinandan Trading (P) Ltd. was, in fact, clo ser to the fixed rate than that of M/s Abhinandan Trading Co.(P) Ltd.
Decision
ation of tenders. As regards the plea of the petitioners that the particular methodology adopted b y the Tender Committee having not been disclosed in the NIT, the course of actio n adopted by the Tender Committee is not sustainable in law, apart from the fact that there is no allegation of the (cid:28)viability range (cid:29) being misused to favour th e particular parties, the Tender Committee also took note of the Cost Index over SOR items plus approved market rates for Non-SOR items and in consideration of the opinion of the technical member of the Tender Committee having taken the par ticular decision, this Court exercising its power of judicial review under Artic le 226 of the Constitution of India cannot sit on appeal over the said decision. As regards the plea of the petitioners that the same very authority having award ed contract to parties earlier much below the estimated cost ranging from 16% to 45.33%, suffice is to say that each tender proceeding will have to be considere d on its own merit and there cannot be any universal application of the tender p rocedure and criteria adopted by the Tender Committee in reference to the attend ing facts and circumstances of each case. For all the aforesaid reasons, I do not find any merit in the writ petitions and accordingly, all the writ petitions are dismissed. Interim orders operating in the proceedings stand vacated.