High Court
Facts
IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.11687 OF 2023Rishu Kichu Industries Pvt. Ltd.Through it’s DirectorSanjay Manikrao Thorat,Age 53 yrs., Occ. Director,R/o Sai Shankar, Parvati Nagar,Parali (V), Tq. Parali (V), Dist. Beed.… Petitioner… Versus …1The State of MaharashtraThrough Secretary,Maharashtra State Power GenerationDepartment, Mantralaya, Mumbai – 32. 2The Director Operation,Maharashtra State Power GenerationCompany Ltd., Prakash Gad, Mumbai. 3The Chief Engineer,Maharashtra State Power GenerationCompany Ltd., Parali (V),Tq. Parali (V), Dist. Beed. 4Superintending Engineer Operation Unit-VIII,Thermal Power Station, Parali (V),Tq. Parali (V), Dist. Beed. 5Superchem Techniques OfficeThrough it’s ProprietorTPS Road, Shivaji Nagar,Parali (V), Tq. Parali (V), Dist. Beed. … Respondents
Legal Reasoning
11WP_11687_2023_Jdrejection should be communicated to the person who has right to know thesame. Respondent Nos.2 to 4 are the authorities of the “State” under theconstitutional provisions and, therefore, it is expected that there should betransparency in the entire affairs of the working of respondent No.3 andespecially when it floats a tender. We, therefore, hold that respondent No.3 isduty bound to inform the reasons for rejection in cases of tender which arefloated through it. The reasons for rejection to be informed to the bidders,who participate in those tenders floated by it. This should be then followedin the subsequent tenders. We agree to the submissions on behalf ofrespondent Nos.2 to 5 that not informing the reason for rejection to thepetitioner per se will not give any advantage to the petitioner unless the malafides are clearly demonstrated. In other words, non informing those reasonsfor rejecting of the tender documents of the petitioner will not vitiate theentire tender process. 12Now, turning towards consideration of the disqualification of thepetitioner the reason which has now emerged is that petitioner has notcompleted three similar works during the last nine years ending last day ofmonth previous to the one in which applications were invited. It is especiallyin respect of tender work of Chandrapur tender. The petitioner says that theperformance certificate dated 08.06.2023 issued by the Chief Engineer, 12WP_11687_2023_JdC.S.T.P.S., Chandrapur was produced. The said document is produced beforethis Court also. However, it is to be noted that the said certificate says thatthe work order was placed to the petitioner of which details have been givenand then it is said that the work order executed as above and the overallperformance of the contractor is generally found to be satisfactory. There isno remark that the work is completed. The details would also show that thesaid work is not complete as there is difference between the amount of thework order (with and/or without taxes) with the actual value of work donewith and without taxes. Therefore, the petitioner, who has tried to fit in thequalifying condition of “three similar completed works each costing not lessthan the amount equal to the 40% of the estimated cost of the one year”failed to establish that he has completed the three similar works during thelast nine years as aforesaid. Therefore, we find that the disqualification ofthe technical bid of the petitioner was justified. 13When we have arrived at the conclusion that the disqualificationof petitioner was justified, it is not necessary for us to consider the otherchallenge by the petitioner. Unsuccessful bidder cannot be allowed tochallenge the qualification of other bidders. Under the said circumstance, thepetition fails. No case is made out for the exercise of constitutional powersby this Court and, therefore, the writ petition deserves to be dismissed. 13WP_11687_2023_Jd14At the time of issuing notice by order dated 20.09.2023 thisCourt has observed that work order pursuant to the impugned tender shall besubject to the final outcome of the petition. Now, we are deciding thepetition on its merits. Under the said circumstances, no necessity to interferewith the work order issued in favour of respondent No.5. 15The Writ Petition stands dismissed. 16Rule stands discharged. (S.G. CHAPALGAONKAR, J.)( SMT. VIBHA KANKANWADI, J. )agd
Arguments
2WP_11687_2023_Jd...Mr. P.R. Katneshwarkar, Advocate for petitionerMr. S.K. Shirse, AGP for respondent No.1Mr. R.A. Tambe, Advocate for respondent Nos.2 to 4Mr. S.C. Sardeshpande and Mr. V.V. Raje, Advocates for respondent No.5...CORAM :SMT. VIBHA KANKANWADI &S.G. CHAPALGAONKAR, JJ.RESERVED ON :11th MARCH, 2024PRONOUNCED ON :03rd APRIL, 2024JUDGMENT :(PER : SMT. VIBHA KANKANWADI, J.)1Rule. Rule made returnable forthwith. Heard learned Advocatesfor the parties finally, by consent. 2The petitioner company, which has participated in tenderNo.3000036444 two-year annual work of contract for Operational Assistancein Plant Operation of Pre-Treatment Plant, D.M. Plant and ChemicalTransportation, Handling and Charging of Chemical and Miscellaneous WorkW.T. Plant Unit Hash tag 08, 250 M.W., TPS, Parali-V along with day-todayactivities of Colony/Domestic Water Supply for TPS Colony from PTP 210M.W. Parali-V, challenges its disqualification by respondent No.3 and prays for 3WP_11687_2023_Jddirection to consider it as successful and opening of its financial bid. 3Heard learned Advocate Mr. P.R. Katneshwarkar for thepetitioner, learned AGP Mr. S.K. Shirse for respondent No.1, learned AdvocateMr. R.A. Tambe for respondent Nos.2 to 4 and learned Advocates Mr. S.C.Sardeshpande and Mr. V.P. Raje for respondent No.5. 4Learned Advocate Mr. P.R. Katneshwarkar appearing for thepetitioner has taken us through the tender document i.e. the terms andconditions, the papers which have been produced by the petitioner and thensubmits that the petitioner has supplied all the necessary documents asrequired under the tender. He also submits that since respondent No.3 wasnot opening the technical bid, it had approached this Court by filing WritPetition No.9685 of 2023, wherein by order dated 09.08.2023 respondentNo.3 was directed to consider the representation dated 06.07.2023 by thepetitioner in accordance with the policies applicable. Thereafter bycommunication dated 31.08.2023 it was informed through E-mail to thepetitioner that the scrutiny is undergoing. Thereafter by further E-mail dated12.09.2023 it was informed that the technical bid of the petitioner has beenrejected, however, no reason was assigned. Petitioner could not come toknow as to on what count his technical bid has been rejected. By 4WP_11687_2023_Jdcommunication of the same date 12.09.2023 the petitioner had askedrespondent No.3 to inform the petitioner the reasons for disqualification,however, there is no response. Hence, the writ petition has been filed. 5The learned Advocate Mr. P.R. Katneshwarkar further submitsthat in view of the reply that has been filed on behalf of respondent Nos.2 to4 the petitioner has come to know that the reason for rejection is conditionNo.1.2 i.e. “Experience of having successfully completed similar works duringlast nine years ending last day of month previous to the one, in whichapplications are invited”. According to respondent Nos.2 to 4, the petitionerhas not completed the work of Chandrapur bearing No.4500119440 withinthe period of cut-off date as per qualifying conditions. However, by way ofrejoinder the petitioner has explained the said situation. The performancecertificate in respect of the said Chandrapur tender is issued on 08.06.2023.Respondent Nos.2 to 4 had extended the date for short fall of documents upto 15.06.2023 and, therefore, the petitioner ought to have been consideredon the basis of certificate dated 08.06.2023. When the deviation submissiondate is extended, then the benefits ought to have been given. In tenderNo.72617 issued by the Department earlier the same situation had arisen andat that time when the time was extended and thereafter the performancecertificate was submitted by the petitioner, he was held to be qualified. 5WP_11687_2023_JdTherefore, the ground of rejection appears to be with mala fide intention. Healso submits that it appears that present tender is now given to respondentNo.5. The petitioner has been wrongly disqualified and the benefit of theextended period has not been given. Further, there is no transparency in theexecution of the entire tender work. The petition deserves to be allowed as itrequires judicial interference. 6Per contra, the learned Advocate Mr. R.A. Tambe appearing forrespondent Nos.2 to 4 relied on the affidavit-in-reply of Dinesh GovindraoKadam, Additional Executive Chemist, M.S.P.G.C.L., Parali T.P.S. and hisfurther additional affidavit and submits that the tender notice was publishedon 27.03.2023 and the documents were to be submitted before 16.04.2023.The petitioner applied for the tender on the basis that he fits in qualifyingcondition of “three similar completed works each costing not less than theamount equal to 40% of the estimated cost of the one year”. However, uponthe scrutiny of condition of 1.2 i.e. “Experience of having successfullycompleted similar works during last nine years ending last day of monthprevious to the one of the applications were invited” the petitioner failed toqualify it. In fact, after the tender documents are submitted by the bidders,the office of respondent No.3 collects necessary information and verifies allthe facts and documents, that is, those documents are cross checked. It was 6WP_11687_2023_Jdthen realized that the petitioner has not completed the work of Chandrapurtender within the period of cut-off date as per qualifying conditions. Thepetitioner has not completed three similar works during the last nine yearsending last day of month previous to the application. Though the work is notcompleted at Chandrapur; yet, the petitioner claimed that it is completed. Asper the condition clause No.24.1, the office of respondent No.3 does not binditself to assign any reasons for the rejection of any tender or part of tenderand it is also not bound to disclose any analysis on the report to tender. Thepetitioner cannot blame respondent No.3. It is further submitted that in factthree extensions which were given to the tender were on the request ofprobable bidder like petitioner and four other bidders. When lastly noextension was sought the tender was opened on 26.05.2023 and thenscrutiny was undertaken. After the scrutiny deviation period was given bythe office of respondent No.3 of fulfilling short fall of documents from31.05.2023 to 04.06.2023, even for that also there was an extension from08.06.2023 to 15.06.2023 in view of the request made by the bidders andother two bidders. On 15.06.2023 deviation bids were open and kept forscrutiny and then the petitioner was found to be ineligible. The petitionerunnecessarily making communication one after the another, when it is statedin the tender condition itself that no unnecessary communication be made.Even the performance certificate dated 08.06.2023 produced by the 7WP_11687_2023_Jdpetitioner from Chandrapur tender would show that the work is stillincomplete. Therefore, the equity does not lie in favour of the petitioner toask for declaring him as successful in technical bid and allowing him toparticipate in the financial bid. After the financial bid was open the work hasbeen assigned to respondent No.5. 7Learned Advocate for respondent No.5 relies on the affidavit-in-reply of respondent No.5. It is submitted that respondent No.5 has placed onrecord all the necessary documents within the stipulated and extendedperiod. It is denied that respondent No.5 is in collusion with respondentNos.2 to 4 and with mala fide intention the technical bid of the petition hasbeen rejected. Rejection E-mail dated 12.09.2023 given by respondent No.3without giving reasons, is no ground for the petitioner to invoke writjurisdiction of this Court. Learned Advocate for the petitioner relies on thedecision in M/s. N.G. Projects Limited vs. M/s. Vinod Kumar Jain and others[2022 LiveLaw (SC) 302] and prays for dismissal of the writ petition. 8As aforesaid, the petition is on two counts, firstly to challengethe petitioner’s own disqualification and secondly, to challenge thequalification of respondent No.5. We would like to rely on the observationsfrom the recent decision by the Hon’ble Supreme Court in M/s. N.G. ProjectsLimited (Supra), in which the earlier decisions have been taken note of and it 8WP_11687_2023_Jdhas been observed that - “23.In view of the above judgments of this Court, the Writ Courtshould refrain itself from imposing its decision over the decision ofthe employer as to whether or not to accept the bid of a tenderer. TheCourt does not have the expertise to examine the terms andconditions of the present-day economic activities of the State and thislimitation should be kept in view. Courts should be even morereluctant in interfering with contracts involving technical issues asthere is a requirement of the necessary expertise to adjudicate uponsuch issues. The approach of the Court should be not to find faultwith magnifying glass in its hands, rather the Court should examineas to whether the decision-making process is after complying with theprocedure contemplated by the tender conditions. If the Court findsthat there is total arbitrariness or that the tender has been granted ina mala fide manner, still the Court should refrain from interfering inthe grant of tender but instead relegate the parties to seek damagesfor the wrongful exclusion rather than to injunct the execution of thecontract. The injunction or interference in the tender leads toadditional costs on the State and is also against public interest.Therefore, the State and its citizens suffer twice, firstly by payingescalation costs and secondly, by being deprived of the infrastructurefor which the present-day Governments are expected to work.”9We are aware of the decision in Jagdish Mandal Vs. State ofOrissa, [(2007) 14 SCC 517], wherein Hon’ble Supreme Court has held that -“22.Judicial review of administrative action is intended to prevent 9WP_11687_2023_Jdarbitrariness, irrationality; unreasonableness, bias and mala fides. Itspurpose is to check whether choice or decision is made “lawfully” andnot to check whether choice or decision is “sound”. When the powerof judicial review is invoked in matters relating to tenders or award ofcontracts, certain special features should be borne in mind. Acontract is a commercial transaction. Evaluating tenders andawarding contracts are essentially commercial functions. Principles ofequity and natural justice stay at a distance. If the decision relating toaward of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a proceduralaberration or error in assessment or prejudice to a tenderer, is madeout. The power of judicial review will not be permitted to be invokedto protect private interest at the cost of public interest, or to decidecontractual disputes. The tenderer or contractor with a grievance canalways seek damages in a civil Court. Attempts by unsuccessfultenderers with imaginary grievances, wounded pride and businessrivalry, to make mountains out of molehills of sometechnical/procedural violation or some prejudice to self, and persuadecourts to interfere by exercising power of judicial review, should beresisted. Such interferences, either interim or final, may hold uppublic works for years, or delay relief and succour to thousands andmillions and may increase the project cost manifold. Therefore, aCourt before interfering in tender or contractual matters in exercise ofpower of judicial review, should pose to itself the followingquestions :(i)Whether the process adopted or decision made by the authorityis mala fide or intended to favour someone;orWhether the process adopted or decision made is so arbitrary and 10WP_11687_2023_Jdirrational that the court can say: “the decision is such that noresponsible authority acting reasonably and in accordance withrelevant law could have reached”;(ii)Whether public interest is affected. If the answers are in the negative, there should be no interferenceunder Article 226. Cases involving blacklisting or imposition of penalconsequences on a tenderer/contractor or distribution of Statelargesse (allotment of sites/shops, grant of licences, dealerships andfranchises) stand on a different footing as they may require a higherdegree of fairness in action.” 10Thus, taking into consideration the well settled law on this point,we have limited scope. We are to see whether the petitioner hasdemonstrated firstly that the petitioner was eligible, as it had complied withall the tender requirements, then only we can go to the second aspect i.e.challenge by the petitioner to the decision of respondent No.3 to qualifyrespondent No.5 in the financial bid, otherwise the course is open to thepetitioner as aforesaid in M/s. N.G. Projects Limited (Supra) and JagdishMandal (Supra). 11At the outset, we do not agree with the statements andsubmissions on the part of respondent Nos.2 to 4 that reasons are notrequired to be communicated. The clause No.24.1 of the tender document isagainst the principles of natural justice, wherein at least the reason for