The High Court
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 7288 of 2023 --------- M/s Sanjay Kumar Upadhyay, a proprietorship firm, Office at T2, 3rd Floor, Orchid Building, Opposite RIMS Main Gate, Bariatu Road, P.O. & P.S. Bariatu, Ranchi, Jharkhand through its constituted agent and attorney Sri Sudhir Kumar Sharma, S/o Late Ramashish Sharma, R/o Village Pupri Gaon, P.O. & P.S. Ratanlaxmi, District Sitamarhi, Bihar ... … Petitioner 1. Versus Indian Port Rail & Ropeway Corporation Limited, through its Managing Director, having its Office at Flat No. 404, 4th Floor, Shree Ram Krishna Enclave, Adalhatu Road, Morabadi, P.O. Ranchi University, P.S. Bariatu, District- Ranchi, Jharkhand and also at 4th Floor, Nariman Bhawan, Mumbai Port Trust Building, M.P. Road, Mazgaon (E), P.O. & P.S. Mazgaon, District Mumbai, Maharashtra 2. Uday Kumar Singh, Tender Inviting Authority working for gain at Indian Port Rail & Ropeway Corporation Limited, Office at Flat no. 404, 4th Floor, Shree Ram Krishna Enclave, Adalhatu Road, Morabadi, P.O. Ranchi University, P.S. Bariatu, District- Ranchi, Jharkhand ... … Respondents CORAM : HON’BLE MR. JUSTICE RONGON MUKHOPADHYAY --------- HON’BLE MR. JUSTICE DEEPAK ROSHAN --------- For the Petitioner For the Respondents : Mr. Amit Kr. Das, Advocate : Mr. Rudraman Bhattacharya, Advocate Mr. Sankalp Goswami, Advocate --------- Order No.08/Dated, the 3rd April, 2024 Per Rongon Mukhopadhyay, J. Heard Mr. Rudraman Bhattacharya, learned counsel for the petitioner and Mr. Amit Kr. Das, learned counsel appearing for the respondents. 2. In this writ application, the petitioner has prayed for quashing the order of rejection of the bid of the petitioner dated 16.12.2023 and/or any other order, circular, Office Memo blacklisting the petitioner from participating in bids and entering into contracts with the concerned respondents. The petitioner has further prayed for a writ of or in the nature of prohibition prohibiting the respondents, their -1- men, agents, servants and each of them from giving effect to the decision contained in the impugned order of rejection dated 16.12.2023. 3. Briefly stated the facts reveal that the petitioner is a MSME Industry involved in construction activities and is associated with several government as well as private construction contracts. The respondents had invited bids under single stage two packet system for the work of “Execution of Earthwork in Formation Bridges, P. Way Linking work including supply of Track Ballast, P. Way Fittings, Points and Crossings, Service Building etc. in connection with construction of a Railway siding for Silo Loading System for Konar Railway Siding of CCL” by floating tender being Bid Notice-IFB No. IPRCL/Ranchi/CCL-KONAR/69/01 dated 08.09.2023. The petitioner pursuant to the said tender had submitted its bid through online mode on the Government E- procurement System on 05.10.2023 at 06:22 P.M. which was much prior to the dead line set for submitting bids. Thereafter the bids were opened and reviewed on 16.10.2023 by the members of the Tender Inviting Authority and the bids of various bidders were admitted for consideration by the Tender Inviting Authority. The bid of the petitioner was marked as “admitted” with various other bidders. However, on 16.12.2023 the petitioner received an e-mail from the Government E- procurement System whereby the petitioner was informed that its bid has been rejected during technical evaluation by the duly constituted committee for the reason “Bidder is terminated earlier, hence according to Form PS-3 rejected”. Subsequent thereto, vide Office Circular No. IPRCL/ Ranchi/ CCL-Konar/69/Phusro-015 dated 16.12.2023 it was notified that the competent authority has accepted the recommendation of the Bid Evaluation Committee as per which out of seven bidders participating in the tender three -2- bidders had technically qualified and the price bid of the three eligible bidders will be opened on 18.12.2023 at 03:00 P.M. 4.
Legal Reasoning
It has been submitted by Mr. Rudraman Bhattacharya, learned counsel appearing for the petitioner that the reason enumerated for rejection of the technical bid of the petitioner was without any appropriate reasons or justifications. It has been submitted that in respect to an earlier contract awarded to the petitioner due to several bottlenecks which cannot be attributed to the petitioner the execution of the said work got delayed and though requests were made to clear the admitted dues in respect of RA Bills and the request for variation and/or being provided new item rate as per the contract were not taken heed of by the respondents the petitioner itself had terminated the contract through letter dated 20.02.2023. It has been submitted that post termination of the contract by the petitioner the respondent had terminated the already terminated contract through letter dated 18.03.2023. The disputes and differences between the parties in respect to the said contract have already been referred to an Arbitral Tribunal where it is pending for adjudication. Mr. Bhattacharya, therefore, in such background facts has submitted that Clause 2 of Form PS-3 provides for declaration of antecedents and since it was the petitioner which had terminated the contract awarded to it earlier with respect to a different work, the act of the respondents in taking recourse to such incident and rejecting Form PS-3 would tantamount to blacklisting the petitioner without giving the petitioner any show cause or any opportunity of hearing. The decision making process has itself been vitiated which speaks of arbitrariness and unreasonableness and the Court in such circumstances being bestowed with the power of judicial review can interfere in the entire tender process itself. 5. Mr. Amit Kr. Das, learned counsel appearing for the respondents has submitted that the tender has been -3- finalized and the work has been awarded to M/s. Allied Infrastructure and Projects Private Limited and a Letter of Acceptance has been issued in its favour on 22.12.2023. Subsequent to the issuance of Letter of Acceptance, the said company has deposited its performance security and pursuant thereto the execution of work has already commenced. In drawing the attention of the Court to Clause 4.3 (b) of the NIT (Instructions to Bidders), it has been submitted that the previous work allotted to the petitioner was already terminated which automatically disqualifies the bid of the petitioner and such termination was deliberately suppressed by the petitioner in its affidavit in Form PS-3. The petitioner further more had participated in the tender process by accepting the terms and conditions enumerated in the Notice Inviting Tender and is, therefore, bound by the same. 6. The learned counsel for the petitioner has stressed upon blacklisting of the petitioner-firm without fulfilling the principles of natural justice and that such blacklisting was without any basis or foundation. 7. The reason given for rejection of the bid of the petitioner during technical evaluation was “Bidder is terminated earlier, hence according to Form PS-3 rejected”. Form PS-3 is a format for affidavit to be submitted by bidders along with the bid and Clause 2 of Form PS-3 reads as follows: FORMAT FOR AFFIDAVIT TO BE SUBMITTED BY BIDDER ALONGWITH THE BID (To be executed in presence of Public Notary on non- in judicial stamp paper of accordance with relevant stamp Act. The stamp paper has to be in the name of the bidder)** the appropriate value I ............... (Name and designation)**………appointed as the attorney/authorised signatory of the bidder (including its constituents), M/s. ______________ (hereafter called the bidder) for the purpose of the Bid for the work of ______________ as per the bid No. ______________ of IPRCL, do hererby solemnly affirm and state on the behalf of the bidder including its constituents as under: *1. That the bidder or any of its constituents has not been Blacklisted/banned for business dealings for all Government Departments or by Ministry of -4- *2. *3. 4. *5. Railways or by any Railway PSU at any time and/or no such blacklisting is in force as on the deadline for submission of bids. That none of the previous contracts of the bidder or any of its constituents had been terminated / rescinded for Contractor’s failure by Railway or any Railway PSU during the period of last 2 years before the deadline for submission of bids. (Add Proviso of Clause 4.4(b) (ITB suitably, if any Contract was so terminated). The bidder or any of its constituents has not been imposed liquidated damages of 5% or more of contract value by Railway or any Railway PSU due to delay in the implementation of any previous contract (either in the capacity of a single entity or as constituent of any other JV) within the period of last 2 years before the deadline for submission of bid [2 years shall be reckoned from the date on which imposed L.D. has exceeded 5% of the contract price] and there are no such accrued delay damages which has not been fully recovered before the deadline for submission of bids on account of contractor’s request for deferring recovery to maintain cash flow and the concerned authority has acceded to the same in the interest of the project and the work under the previous contract in question has been completed before the deadline for submission of bid, unless imposition of such the delay damages has been set aside by Competent Authority. That the Bidder or any of its constituents is neither in the process of Bankrupt/Insolvent nor winding-up nor such a case is pending before any Court on the deadline of submission of the bid. That the name of the Bidder or any of its constituents is not on the list of “Poor Performer” of Railway or any Railway PSU/Major Ports as on the deadline for submission of bid. that its constituents have not either, changed their name or created a new business entity as covered by the definition of “Allied firm” under para 1102 (iii) of chapter XI of Vigilance manual of Indian Railways with latest amendments and corrections (available on website of Indian Railways), consequent to having been banned business dealings for specified period which is not over or suspended business dealings or having been declared as poor performer. the bidder or any of is 6. We declare 7.# We declare and certify that balance sheets for last three financial years including that for the latest concluded financial year are being submitted. OR -5- We declare and certify that balance sheet for the latest concluded financial year has not been finalized till date and accordingly financial data for last three latest ignoring the financial years concluded financial year is being furnished. (# - Delete whichever is not applicable)** 8. We declare and certify that we have not made any misleading or false representation in the forms, in proof of the statements and attachments qualification requirements. 9. We declare that the information and documents submitted along with the tender by us are correct and we are fully responsible for the correctness of the information and documents, submitted by us. 10. We understand that in case we cease to fulfil the requirements of qualifying and eligibility criteria at any time after opening of bids and till finalization of bids, it will be our bounden duty to inform the Employer of our changed status immediately and in case of our failure to do so, our bid shall be rejected and bid security shall be forfeited. We shall also be liable for Banning of Business dealings upto a period of five years. 11. We understand that if the contents of the affidavit are found to be false at any stage during bid evaluation, it will lead to rejection of our bid and forfeiture of the bid security. Further, we [insert name of the bidder]** _______ and all our constituents understand that we shall be liable for banning of business dealings upto a period of five years. 12. We also understand that if the contents of the affidavit are found to be false at any time after the award of the contract it will lead to termination of the contract, forfeiture of Bid or Performance Security and Banning of Business dealings for a period of upto five years. SEAL AND SIGNATURE OF THE BIDDER Verification: Verified on ________ day of ________ at __________ that the contents of the above mentioned affidavit are true and correct and nothing material has been concealed there from. SEAL AND SIGNATURE OF THE BIDDER *Modify the contents wherever necessary, in terms of sub- clause 4.4ITB. ** The contents in italics are only for guidance purpose and details as appropriate, are to be filled in suitably by bidder. Attestation before Magistrate/Public Notary Signature of the Bidders JGM/Projects IPRCL, Ranchi -6- for Chief General Manager 8. The Form PS-3 affidavit was submitted by the petitioner along with bid and submission of such affidavit would indicate that none of the previous contracts awarded to it had been terminated / rescinded which is contrary to the records. The petitioner was awarded a work “Partial Up- gradation of Railway tracks by replacement of existing outlived and obsolete points and crossing, Track Sleepers and Rails with new materials of updated technology at different locations of HDC’s Railway yards at Haldia, Haldia Dock Complex (PH- III)” but vide letter dated 18.03.2023 the work was terminated in terms of Clause 15.2 (a) and Section 6 of the Tender Document. Though it has been stated by the learned counsel for the petitioner that it was the petitioner which had terminated the contract on account of several inadequacies being not taken cognizance of by the concerned respondents but at the same time it appears that the termination of the contract is a subject matter of arbitration which is pending and there has been no stay of the order of termination dated 18.03.2023 from any Competent Court of Law. Moreover, the petitioner was aware about Clause 4.3 (b) of the NIT which contains the disqualification Clause and in spite of the same the affidavit in Form PS-3 was submitted along with the bid document. This Clause which has degenerated the claim of the petitioner is also not under challenge in the instant writ application. The disqualification of the petitioner during technical evaluation cannot be termed to be a blacklisting and consequently there was no necessity for the respondents to have issued notice to show cause prior to rejecting the bid of the petitioner. The petitioner did not fulfil the mandatory norms as spelt out in the Notice Inviting Tender and its bid was, therefore, rightly rejected. There was no necessity at all for the respondents, in the circumstances noted above to have given an opportunity of hearing to the petitioner. It was infact -7- the petitioner which had suppressed the necessary facts and taking recourse to termination of the earlier contract by the petitioner and, therefore, Clause 2 of Form PS-3 would not be applicable to its case is a guise to get over such mandatory Clause. The action of the respondents in the decision making process does not reverberate arbitrariness, unfairness and unreasonableness and thus in view of what has been discussed above, there is no cause for interference in such decision making process and, consequently, this writ application is dismissed. 9. Pending I.A(s), if any, stands closed. (Rongon Mukhopadhyay, J.) (Deepak Roshan, J.) Alok/- -8-