Orissa High Court
Case Details
ORISSA HIGH COURT: CUTTACK W.P(C) NO. 15395 OF 2022 In the matter of an application under Articles 226 and 227 of the Constitution of India. --------------- AFR Sarat Kumar Samal ..… Petitioner -Versus- State of Odisha & Ors. ….. Opp. Parties For Petitioner : M/s. P.C. Nayak and S. Padhi, Advocates For Opp. Parties : Mr. P.P. Mohanty, Addl. Govt. Advocate [O.Ps.No.1-5] P R E S E N T: THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR JUSTICE G. SATAPATHY Date of Hearing: 23.09.2022 :: Date of Judgment : 28.09.2022 DR. B.R. SARANGI,J. The Petitioner, who is a Special Class Contractor registered under the P.W.D. Contractors Registration Rules, 1967, has filed this writ petition seeking to quash the letter dated 13.06.2022 under // 2 // Annexure-4, whereby a communication has been made by opposite party no.4 to opposite party no.5 that the bid of the petitioner submitted for the work “Improvement to Road and C.D. works under PMGSY” for the Package No.OR-02-488/PMGSY-III (B-III) in the district of Balasore has been rejected by opposite party no.3, as per recommendation made in Bid Evaluation Committee Meeting held on 10.06.2022, and direction has been issued to go for rebidding of the said package, and to issue direction to the opposite parties to accept the petitioner’s bid for the aforesaid work in terms of recommendation of opposite party no.5, vide letter dated 03.06.2022 under Annexure-3, within a stipulated period. 2. The epitome of facts leading to filing of this writ petition are that opposite party no.4-Chief Engineer, PMGSY in the office of the Engineer-in-Chief, Rural Works, Odisha, Bhubaneswar, invited public tender notice no.1056 dated 11.04.2022 for various packages of works, including the package no.OR-02-488-PMGSY- III(B-III), in the district of Balasore for the work // 3 // “Improvement to Road and CD works under Pradhan Mantri Gram Sadak Yojana”, in respect of which the petitioner, having requisite eligibility criteria, submitted his bid along with other bidders. The technical bids were opened on 25.05.2022 and the tender evaluation committee, out of four bidders, qualified the petitioner and one Prafulla Kumar Mohapatra-opposite party no.6. Thereafter, the price bids of technically qualified bidders were opened on 03.06.2022, whereafter the petitioner, having quoted 7.50% excess over the estimated value of the work, was declared as 1st lowest bidder. As the petitioner, for having complied with all criteria, was found L-1, opposite party no.5, vide letter dated 03.06.2022, recommended his name to opposite party no.4 for approval. Instead of according approval, opposite party no.4, vide letter dated 13.06.2022, intimated opposite party no.5 that the bid of the petitioner has been rejected by opposite party no.3-CEO, Orissa State Rural Road Agency (OSRRA), as per recommendation of Bid Evaluation Committee in the meeting held on 10.06.2022, and accordingly requested // 4 // to go for immediate rebidding for the package no. OR-02- 488-PMGSY-III(B-III) observing all formalities. Hence, this writ petition. 3.
Legal Reasoning
Mr. P.C. Nayak, learned counsel appearing for the petitioner contended that since the tender of the petitioner was found responsive both in technical and price evaluation and recommended for approval, the same should not have been rejected arbitrarily without any valid reason and without giving any opportunity of hearing to the petitioner. Thereby, it is contended that such action of the authorities is violative of Article 14 of the Constitution of India. It is also contended that the bid submitted by the petitioner, having been qualified in the technical evaluation and declared as the first lowest bidder after opening of the price bid, and recommended for approval without any adverse remarks against him, the direction for rebidding of the very same package of work cannot be sustained in the eye of law. It is further contended that in the same batch of tender even after tendering process is over, the authority has granted deviation of 4.69% over the estimated cost of the tender. // 5 // Since the petitioner has quoted 7.50% excess over the estimated cost of the tender, the authorities should have approved the bid of the petitioner by giving equal and fair treatment to all the bidders. It is further contended that the present tender estimate was based on SOR 2014 and the petitioner quoted 7.50% excess basing on the market rate as there is abnormal increase in materials in addition to labour charges. If the authorities retendered the package no.OR-02-488-PMGSY-III(B-III), it would be estimated on the basis of SOR 2022 and the present cost of the work would be minimum 20% excess. Therefore, without assigning any reason and without affording any opportunity of hearing to the petitioner and also without specifying violation of any tender clause rejecting his bid, issuance of direction for rebidding of the aforesaid work cannot be sustained in the eye of law and the same should be quashed. In support of his contentions, learned counsel for the petitioner has relied upon the judgments of the apex Court in Adani Gas Limited v. Petroleum and Natural Gas Regulatory Board, (2020) 4 SCC 529, // 6 // Mihan India Ltd. v. GMR Airports Ltd., etc. AIR 2022 SC 2745, Sampad Samal v. State of Odisha, AIR 2017 Ori 33 and of this Court in D.K. Engineering & Construction v. State of Odisha, 2016 SCC OnLine Ori 405. 4. Mr. P.P. Mohanty, learned Additional Government Advocate appearing for the State-opposite parties, while admitting the notice inviting tender and participation of the petitioner in the said tender process and found to be L-1 and recommended for approval after becoming successful bidder for having quoted 7.5% excess of the estimated cost, contended that the bid evaluation committee meeting of OSRRA, which was held on 10.06.2022 under the chairmanship of opposite party no.3 for finalization of PMGSY-III tenders including the present tender, after due deliberation and discussion, unanimously decided to cancel the tender for the package no. OR-02-488-PMGSY-III(B-III) due to high tender premium and directed opposite party no.5 to proceed with the fresh tender. It is contended that such decision has been taken, in view of Clause-28.1 of SBD // 7 // for PMGSY, which states that the authority reserves the right to accept or reject any bid and to cancel the bidding process and reject all bids, at any time prior to award of contract, without thereby incurring any liability to the affected bidder or bidders or any obligation to inform the affected bidders of the grounds for the employers’ action. It is further contended that Clause-5.6.3 of “Manual for Procurement of Work 2019, Ministry of Finance Department of Expenditure” prescribes that “in every recommendation of TC, award of contract, it must be declared that the rates recommended are reasonable and the comparison may be made with similar contracts awarded elsewhere. Since the petitioner quoted 7.50% excess of the estimated cost, the tender evaluation committee did not accept the same and rejected the bid of the petitioner and issued direction for rebidding. Therefore, the authorities have not committed any illegality or irregularity in passing the said order. It is further contended that the authorities, while deciding the tender, have considered the modality not to approve the bid with high tender premium, which is uniform for // 8 // all bidders. Thereby, the contentions raised by learned counsel for the petitioner cannot be sustained in the eye of law and accordingly, prays for dismissal of the writ petition. 5. This Court heard Mr. P.C. Nayak, learned counsel appearing for the petitioner and Mr. P.P. Mohanty, learned Additional Government Advocate appearing for the State-opposite parties in hybrid mode. Pleadings have been exchanged between the parties and with the consent of learned counsel for the parties, the writ petition is being disposed of at the stage of admission. 6. On the basis of the factual matrix, as discussed above, the admitted fact is that the petitioner participated in the tender process and was qualified both in the technical and financial evaluation. After he was found L-1 bidder, having quoted 7.50% excess of the estimated cost, opposite party no.5-Chief Construction Engineer, Rural Works Circle, Balasore, vide letter dated 03.06.2022, recommended to opposite party no.4-Chief // 9 // Engineer, PMGSY for approval of the bid of the petitioner. But just after seven days of such recommendation, opposite party no.4 intimated to opposite party no.5, vide letter dated 13.06.2022, that the tender of the petitioner has been rejected by C.E.O, OSRRA, as per recommendation of Bid Evaluation Committee in the meeting held on 10.06.2022, and requested opposite party no.5 to go for immediate rebidding for the package observing all formalities, and returned the tender documents and papers for acknowledgement without assigning any reason as to violation of which clause of the tender document the bid of the petitioner has been cancelled. 7. For just and proper adjudication of the case, relevant clauses of Section-2-Instructions to Bidders (ITB)-A. General of Odisha State Rural Roads Agency Standard Bidding Document for PMGSY for Construction and Maintenance, are extracted below: “Clause-13. Bid Prices 13.1. The Contract shall be for the whole Works, as described in Clause 1.1. of ITB, // 10 // the priced Bill of Quantities based on submitted by the Bidder online. 13.2. The Bidder shall make online entries to fill the Percentage Rate or Item Rates in Bill of Quantities as specified in the Appendix to ITB; only the same option is allowed to all the Bidders. The Bidder is not required to quote his rate for Routine Maintenance. The rates to be paid for routine maintenance by the Employer are indicated in the Bill of Quantities. Percentage Rate Method requires the bidder to quote a percentage above/below/at par of the schedule of rates specified in the Appendix to ITB. Item Rate Method requires the bidder to quote rates and prices for all items of the Works described in the Bill of Quantities. The items for which no rate or price is entered by the Bidder will not be paid for by the Employer when executed and shall be deemed covered by the other rates and prices in the Bill of Quantities. Clause-22. Bid Opening xxx xxx xxx 22.7. The Employer shall inform the bidders, who have qualified during evaluation of Part I of bids, of the date, time of online opening of Part II of the bid, if the specified date of opening of financial bid is changed. In the event of the specified date being declared a holiday for the Employers, the bids will be opened at the appointed time and location on the next working day. 22.8. Part II of bids of only those bidders will be opened online, who have qualified in Part I of the bid. The bidders’ names, the Bid prices, the total amount of each bid, and such other details as the Employer may consider appropriate will be noticed online by the Employer at the time of bid opening. // 11 // Clause-25. Examination of Bids and Determination of Responsiveness. required 25.1. During the detailed evaluation of “Part-I the Employer will determine of Bids”, whether each Bid(a) meets the eligibility criteria defined in Clauses 3 and 4; (b) has been properly signed; (c) is accompanied by the is substantially responsive to the requirements the the bidding documents. During of detailed evaluation of the “Part-II of Bids”, the responsiveness of the bids will be further determined with respect to the remaining bid conditions, i.e., priced bill of quantities, technical specifications and drawings. securities; and (d) 25.2. A substantially responsive “Financial Bid” is one which conforms to all the terms, conditions and specifications of the bidding documents, without material deviation or reservation. A material deviation or reservations is one (a) which affects in any the scope, quality, or substantial way performance of the Works; (b) which limits in any substantial way, inconsistent with the bidding documents, the Employer’s rights or the Bidder’s obligations under the Contract; or rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids. (c) whose Clause-26. Evaluation and Comparison of Bids. Xxx xxx xxx 26.3. If the Bid of the successful Bidder is seriously unbalanced the Engineer’s estimate of the cost of work to be performed under the contract, the Employer may require the Bidder to produce detailed price analysis for any or all items of the Bill in relation to // 12 // of Quantities, to demonstrate the internal consistency of those prices. After evaluation of the price analysis, the Employer may require that amount of the Performance Security set forth in Clause 30 of ITB be increased at the expense of the successful Bidder to a level sufficient to protect the Employer against financial loss in the event of default of the successful Bidder under the Contract. The amount of increased Performance Security shall be decided at the sole discretion of the Employer, which shall be final, binding and conclusive on the bidder. the Clause-27. Award Criteria 27.1. Subject to Clause 30 of ITB, the Employer will award the Contract to the Bidder whose Bid has been determined: (i) to be substantially responsive to the bidding documents and who has offered the lowest evaluated Bid price, provided that such Bidder has been determined to be (a) eligible in accordance with the provisions of Clause 3 of in accordance with the provisions of Clause 4 of ITB; and (b) qualified ITB, and (ii) to be within the available bid capacity adjusted to account for his bid price which is evaluated the lowest in any of the packages opened one under than consideration. earlier the Clause-28. Employer’s Right to Accept any Bid and to Reject any or all Bids. 28.1. Notwithstanding Clause 27 above, the Employer reserves the right to accept or reject any Bid, and to cancel the bidding process and reject all bids, at any time prior to the award of Contract, without thereby incurring any liability to the affected Bidder // 13 // or bidders or any obligation to inform the affected Bidder or bidders of the grounds for the Employer’s action. Clause-32. Corrupt Practices” or Fraudulent On perusal of the aforementioned Clauses, which contained in Chapter-A to Chapter-F of Section-2, Instructions o Bidders (ITB) of Standard Bidding Document for PMGSY, it appears that it classifies the entire terms and conditions. 8. It transpires from the bid documents that there is no description with regard to “high tender premium” nor has it been clarified nor provided in any of the documents required to be followed for such tender. Rather, the tender conditions stipulated under sub- clause-26.3 of Clause-26 and Clause-32 restrict for less bidding and sub-clause 13.2 provides for quoting excess/less of tender value and the petitioner bid was substantially responsive as per clause-25.2 of the tender notice. As such, the petitioner is coming under Clause- 27(1)-Award Criteria, as his bid was substantially responsive and, as such, there is no restriction or // 14 // condition to quote reasonable tender price, nevertheless the authorities have accepted the excess price of same tender notice of another project by approving bid on 4.69% excess than the estimated cost, vide Annexure-5 dated 13.06.2022 in respect of Nilagiri Engineering Co- operative Society, Contractor being L-1 for the work “Improvement to Road and C.D. works under PMGSY for the Package No.OR-02-502 in the district of Balasore”. If on one hand the authorities have approved 4.69% excess price of the estimated cost and accepted the same, there is no valid justifiable reason not to accept the bid of the petitioner, who has quoted 7.50% excess of the estimated cost. Thereby, even though ‘high tender premium’ has been accepted in one case, non- acceptance of the same in the case of the petitioner violates Article-14 of the Constitution of India. As regards the reason for rejection, it has been indicated in Annexure-4 dated 13.06.2022 that the tender of the petitioner has been rejected by CEO, OSRRA, as per recommendation of Bid Evaluation Committee in its meeting held on 10.06.2022. But in the counter affidavit // 15 // filed by the opposite parties no.1 to 5, reliance has been placed on the proceedings of the Bid Evaluation Committee Meeting, OSRRA held on 10.06.2022 under the Chairmanship of C.E.O., OSRRA-opposite party no.3, so far as petitioner’s Package No.OR-02- 488/PMGSY-III is concerned, the following decision has been taken: “8. OR-02-488/PMGSY-III In package No. OR-02-488/PMGSY-III, the L1 bidder is Sri Sarat Kumar Samal at the quoted rate 7.50% excess over the construction cost put to tender. The Committee after due deliberation and discussion unanimously decided to cancel the package No. OR-02-488 due to high tender premium and directed C.C.E., R.W. Circle, Balasore to proceed with retender”. The only reason has been assigned in the proceeding, as mentioned above, that after due deliberation and discussion unanimously a decision was taken to cancel the package No. OR-02-488/PMGSY-III due to ‘high tender premium’ and direction was issued to C.C.E., R.W. Circle, Balasore to proceed with retender. But what constitute the meaning of ‘high tender premium’ has not been explained either in the tender documents or anywhere in the records of the case, but by using such // 16 // nomenclature, the bid submitted by the petitioner has been rejected. 9. Further, on perusal of the tender documents, it is seen that Clause-28 deals with only employer’s right to accept any bid or to reject any or all bids and the said clause starts with a non-obstante clause by using the words ‘notwithstanding Clause-27’, the employer reserves right to accept or reject any bid and to cancel the bidding process and reject all bids, at any time prior to the award of contract, without thereby incurring any liability to the affected bidder or bidders or any obligation to inform the affected bidder or bidders of the grounds for the employer’s action. 10. In Union of India v. G.M. Kokil, 1984(Supp) SCC 196 : AIR 1984 SC 1022, the apex Court held that a clause beginning with ‘notwithstanding anything contained in this Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force’, is sometimes appended to a section in the beginning, with a view to give the enacting part of // 17 // the section in case of conflict an overriding effect over the provision or Act mentioned in the non obstante clause. 11. In T.R. Thandur v. Union of India, AIR 1996 SC 1643, the apex court held that non obstante clause may be used as a legislative device to modify the ambit of the provision or law mentioned in the non obstante clause or to override it in specified circumstances. 12. In Central Bank of India v. State of Kerala, (2009) 4 SCC 94, the apex Court held that while interpreting a non obstante clause, the Court is required to find out the extent to which the Legislature intended to give it an overriding effect. 13. In P. Virudhachalam v. Management of Lotus Mills, AIR 1998 SC 554 : 1998 (I) SCC 650, the apex Court held that the expression ‘notwithstanding anything in any other law’ occurring in a section of an Act cannot be construed to take away the effect of any provision of the Act in which that section appears. // 18 // 14. In Satyanarayan Sharma v. State of