The High Court
Case Details
AFR IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.5790 of 2024 & W.P.(C) No. 5535 of 2024 In Both Writ Applications M/s. Nanda Infra Construction Pvt. Ltd., represented by its Managing Director, Dilip Kumar Nanda, S/o- Anukul Nanda, aged about 56 years, At/College Road, P.O. South Balanda, Dist- Anugul -versus- State of Orissa, represented by the 1. Secretary, Works Department, Secretariat, AT- Bhubaneswar, Dist- Khurda 2. Engineer-in-Chief (Civil), Odisha, Nirman Soudha, Kesharinagar, Unit-V, At/PO- Bhubaneswar-751001, Dist- Khurda 3. Chief Engineer (DPI & ROADS), Odisha, Nirman Soudha, Kesharinagar, Unit- V, AT/PO- Bhubaneswar- 751001, Dist- Khurda Executive Engineer (Civil), Office of 4. the Engineer-in-Chief (Civil), Odisha, Nirman Soudha, Kesharinagar, Unit-V, AT/PO- Bhubaneswar- 751001, Dist- Khurda 5. Financial Advisor-cum-Special Secretary to Govt., Works Department, Odisha, Nirman Soudha, Kesharinagar, Unit- V, AT/PO- Bhubaneswar- 751001, Dist- Khurda. …. Petitioner …. Opposite Parties Page 1 of 41 For the Petitioner : Mr. K.B. Panda, Advocate and Mr Shounak Kumar Panda For Opposite Parties : Mr. Pitambar Acharya, Advocate General with Ms. A. Dash Additional Standing Counsel CORAM: HON’BLE THE CHIEF JUSTICE HON’ BLE MS JUSTICE SAVITRI RATHO HON’BLE MR JUSTICE SIBO SANKAR MISHRA JUDGMENT 15.01.2025 Savitri Ratho, J. For an authoritative pronouncement, the following questions had been referred to larger Bench on 18.11.2024 by a Division Bench of this Court in these two writ applications: “i.) Whether the observations made by the Supreme Court in paragraph-8 of the decision in Mohinder Singh Gill vs The Chief Election Officer: AIR 1978 SC 851 has application to test the correctness of a purely administrative order by an authority, which is State within the meaning of Article-12 of the Constitution of India, cancelling a tender process before acceptance of the bid of a tenderer? W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 2 of 41 ii.) Whether there is any requirement of giving an opportunity of hearing or prior notice to the highest / lowest bidder, before cancellation of tender notice keeping in mind the settled legal position that such bidder does not acquire any vested right to have the auction confirmed in his favour on that basis alone? iii.) Whether the Supreme Court decision in case of Sudhir Kumar Singh (supra) on the point of compliance of principles of natural justice is applicable when a tender process is cancelled prior to confirmation of tender / auction in favour of a bidder? iv.) Whether the Division Bench in case of M/s. Bansal Infraprojects Pvt. Ltd (supra) has correctly applied the Supreme Court’s decision in case of Sudhir Kumar Singh (supra)? v.) Whether it is permissible for the High Court exercising power of judicial review under Article 226 of the Constitution of India to direct the State or its instrumentalities to accept the bid of the lowest/highest bidder, upon interfering with the order of cancellation of tender on the ground of violation of principles of natural justice or such order not being a reasoned one?” W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 3 of 41 2. The petitioner in both these writ applications challenged the notice dated 01.03.2024 issued by the opposite party No 2 - Engineer in Chief (Civil) Odisha, cancelling the Invitation for Bids ( in short “IFB”) dated in respect of two works, issued by the opposite party No. 2 on 17.08.2023 for execution of various works and has prayed for a direction that the two works in which the petitioner has been declared as L1 ( lowest ) bidder, be awarded in its favour.
Facts
BRIEF FACTS 3. For execution of various works including “improvement such as widening and strengthening of double lane to four lane standard of Bhawanipatna / Khariar road from 3/550 KM to 19/000 KM (except 3/930KM to 4/970KM) in the district of Kalahandi under State Plan”, the petitioner had participated in the Bids and had qualified along with other bidders in the technical qualification. When the financial bids were opened on 09.11.2023 , the petitioner was declared L1 bidder in respect of two works. A recommendation was made by the Office of the Engineer-in-Chief (Civil), Odisha on 23.11.2023 to the Financial Advisor-cum-Special Secretary to Government, Works Department, Odisha for consideration of W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 4 of 41 approval by the Government in the Works Department as per the requirement in Note-I of paragraph 6.3.15 of the Odisha Public Works Department Code (in short the ‘OPWD Code’) (Vol-I). But by notice dated 01.03.2024, the IFB in respect of both the works were cancelled. 4. The petitioner challenged the cancellation notices dated 01.03.2024, in these two writ applications , primarily on two grounds: i) Opportunity of hearing was not afforded to it before cancelling the IFB for the two works; and ii) The grounds of cancellation were not reflected in the order of cancellation the IFB for the two works. 5. While hearing these cases on 17.11.2024, a Division Bench of this Court after perusing the decisions of the Supreme Court relied on by the parties and a few other decisions , had recorded its disagreement with the
Legal Reasoning
decisions of this Court in Shree Ganesh Construction , Gangadhar Jena, Sampad Samal , Sical Logistics Ltd , Mackintosh Burn Ltd., Kolkata and Bansal Infraprojects Pvt. Ltd., Bolangir , relied on by the learned counsel for the petitioner , for which it referred the questions mentioned in paragraph 1 of this judgment to a larger Bench , after observing as follows:- W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 5 of 41 “ i.) The observations made by the Supreme Court in paragraph 8 of the Mohinder Singh Gill (supra) do not apply to a purely administrative decision cancelling a notice inviting tender by an authority taken before the decision making process for award of tender is over, with the acceptance of the bid of a successful bidder by a competent authority leading to inter-parte mutual contractual obligations, unless such decision takes away any vested right of a party. ii.) There is no necessity of giving an opportunity of hearing or a prior notice before cancellation of tender notice to the highest/lowest bidder or any other successful bidder as such bidder does not acquire any vested right to have the auction confirmed in his favour on that basis alone; iii.) The decision rendered by the Supreme Court in the case of Sudhir Kumar Singh (supra) on the point of compliance of principles of natural justice is not applicable W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 6 of 41 when a tender notice is cancelled prior to confirmation of the tender/auction in favour of a bidder; iv.) In any case, even if the Court interferes with the decision of the competent authority to cancel the tender notice, exercising power of judicial review, ordinarily it should not direct the authority to approve the tender submitted by a successful bidder, in view of the law laid down by the Supreme Court;” SUBMISSIONS 6. We have heard Mr. K.B. Panda learned counsel for the petitioner and Mr. Pitambar Acharya learned Advocate General along with Ms. Aishwariya Dash learned Additional Counsel . PETITIONER 7. Mr.K.B. Panda learned counsel for the petitioner has fairly admitted that no direction could have been issued by this Court in exercising power / discretion under Article – 226 of the Constitution of India to award the tender /accept the bid of any particular bidder but has urged that the W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 7 of 41 petitioner being the L1 bidder and its cases having been recommended , it should have been heard before the IFB was cancelled. On account of violation of the principles of natural justice, the orders of cancellation are liable for interference. He has also submitted that the order of cancellation is liable for interference as no reasons have been mentioned in the order. The explanation offered in the counter affidavit subsequently cannot be accepted as valid reasons in view of the authoritative pronouncement of the Supreme Court in the case of Mohinder Sngh Gill (supra) which has been relied upon in a number of decisions of this Court starting with Ganesh Construction (supra). 7.1. In support of his submission that opportunity of hearing was not given before cancelling the IFB for the two works in which the petitioner had been declared as L1 bidder , Mr. K.B. Panda, learned counsel for the petitioner has relied on the following decisions: i) M/s. Shree Ganesh Construction v. State of Odisha: 2016 (II) OLR 237; (ii) Gangadhar Jena v. State of Odisha: 2017 (II) ILR-CUT 763; W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 8 of 41 (iii) Sampad Samal v. State of Odisha; AIR 2017 ORISSA 33; (iv) M/s. Sical Logistics Ltd. v. Mahanadi Coalfields Limited: 2017 (II) ILR- CUT 1035; (v) Order dated 01.05.2024 passed in W.P.(C) No.1309 of 2024 (M/s. Mackintosh Burn Ltd., Kolkata v. State of Odisha and others); (vi) Order dated 24.06.2024 passed in W.P.(C) No.334 of 2024 (M/s. Bansal Infraprojects Pvt. Ltd., Bolangir v. State of Odisha and others).;and (vii) The State Of Uttar Pradesh vs Sudhir Kumar Singh : (2021) 19 SCC 706 . 7.2. In support of his submission that the order of cancellation is liable for interference as being bereft of reasons and reasons furnished subsequently cannot be considered , Mr K.B. Panda , learned counsel had relied on the following decisions of the Supreme Court : - W.P.(C) Nos. 5790 of 2024 and 5535 of 2024 Page 9 of 41 i) Mohinder Singh Gill vrs. The Chief Election Commissioner: