The High Court
Case Details
A.F.R. IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 16964 of 2024 An application under Article 226 and 227 of the Constitution of India. -------------- Prahallad Chandra Swain ..…. Petitioner -versus- 1. State of Odisha 2. Chief Engineer (Building and Bridges), Rural Works, Bhubaneswar 3. Chief Construction Engineer, Rural Works Circle, Cuttack …… Opp. Parties --------------------------------------------------------------------------- For Petitioner : Mr. Gurudutta Senapati, Advocate For Opp. Parties : Ms. Suman Pattanaik, A.G.A. ---------------------------------------------------------------------------- CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MISS JUSTICE SAVITRI RATHO JUDGMENT 31. 07.2024 Savitri Ratho, J The writ petition has been filed with the following prayers: “It is therefore prayed that, this Hon’ble Court be graciously pleased to issue Rule NISI, in the nature of any appropriate writ/writs and/or any other writ/writs and/or order/orders and/or W.P.(C) No. 16964 of 2024 Page 1 of 12 direction/directions calling upon the opp. Parties to show cause as to why:- (i) The decision making process adopted by the opp. party No.2 for cancellation of tender vide order 15.12.2023 (Annexure-4) shall not be declared illegal, arbitrary and same shall not be quashed being contrary to OPWD Code Para 3.5.18 Note (iii). (ii) The order dtd. 01.07.2024 passed by OP No. 2 shall not be quashed. (iii) And direction be given to open and approved the bid of the petitioner for work Construction of Canteen cum Bar Association for judicial Dept. at Kujanga in the District of Jagatsinghpur for the year 2023-24 within a reasonable period.” 2.
Legal Reasoning
The brief facts of the case is that the opposite party no.3 invited public tender vide NIT No. Tender Online- RWC-19/23 for the work Construction of Canteen -cum- Bar Association for judicial Dept. at Kujanga in the District of Jagatsinghpur for the year 2023-24 dated 29.08.2023, but the tender being non- responsive, the tender authority cancelled the tender vide order no. 3383 dated 22.09.2023 and the same authority again invited second tender vide NIT No. Tender Online-RWC-24/23 on 26.09.2023 for two works and the petitioner having the eligibility criteria W.P.(C) No. 16964 of 2024 Page 2 of 12 participated in the tender for the work construction of Canteen - cum- Bar Association for judicial department at Kujanga in the district of Jagatsinghpur for the year 2023-24. and uploaded all the valid documents. After more than a month the opposite party no.2 vide letter no. 39801 dated 15.12.2023 instructed tender inviting authority to cancel the 2nd time tender as a single tender and to invite a fresh tender immediately. The petitioner had filed a representation stating that as the petitioner having all eligibility criteria had submitted his technical bid and price bid in response to the 2nd tender notice, his bit should have been opened complying Para-3.5.18 Note (iii) Volume-1 of the OPWD code and the petitioner called for negotiation and the second tender dated 26.09.2023 should not be cancelled. As his representation was not considered he had filed W.P.(C) No.136 of 2024 before this Court.
Decision
On 08.01.2024, the writ application was disposed of directing the opposite party no.2 Chief Engineer (Building and Bridges) Rural Works to take a decision on the representation of the petitioner within a specified time. Pursuant to the order of this Court, the representation of the petitioner was considered, but it was rejected on 01.07.2024 by opposite party No 2. W.P.(C) No. 16964 of 2024 Page 3 of 12 3. Mr. Gurudutta Senapati, learned counsel for the petitioner submits that the decision of the opposite party no.2, cancelling of the second tender is arbitrary and unreasonable as it has been done without following the OPWD code para-3.5.18 Note (iii) Volume-1 , which provides that “ a single tender received in the first call shall be cancelled without opening of the bid. The acceptance of a single tender received, even after retendering should have prior approval of the next higher authority”. He submits that the first tender for the work had been cancelled being non-responsive. The same authority again invited 2nd tender for the same work. The bid of the petitioner should have been accepted after complying the conditions of Para-3.5.18 Note (iii) Volume-1 of the OPWD code. He submits that there is no power vested in the authority to cancel the single tender after retendering , for which the letter dated 15.12.2023 of the opposite party no.2 directing for cancelling the second tender dated 26.09.2023 , is illegal, arbitrary, unreasonable and same should be quashed. He submits that the second tender dated 26.09.2023 should not have been cancelled and the petitioner should have been called for negotiation. For the same reasons, the order dated 01.07.2024 of the opposite party No2, the Chief Engineer (Building and Bridge) W.P.(C) No. 16964 of 2024 Page 4 of 12 stating that the tender committee decided that as no response to the first notice inviting tender, it was technically a no tender and the second tender notice where a single bid was received was the first tender for which it was cancelled is arbitrary, allegal and violative of Article 14 of the Constitution of India. So the order of rejection should be set aside and petitioner’s tender accepted. 4. Ms. Suman Pattanaik, learned Additional Government Advocate for the State submits that on 01.07.2024, the Chief Engineer (Building and Bridge) rejected the claim of the petitioner made in his representation with a reasoned order and as there is no illegality in the order, the writ application should be dismissed. She submits that as the first tender was non-responsive, the second tender has been treated as the first tender and rightly so. As a single bid had been received it was decided to cancel that tender and go for fresh tender. She further submits that no right accrued to the petitioner merely because he was the sole bidder in the second tender , for which cancellation of the tender was neither illegal nor arbitrary. She further submits that even if the bid of the petitioner is taken to be the single tender after retendering, the same cannot be automatically accepted without approval of the higher authority. In this case the higher authority has not given its approval but W.P.(C) No. 16964 of 2024 Page 5 of 12 directed for cancellation of the second tender which is in accordance with the provisions of Note (III) of Para- 3.5.18 of OPWD Code,Vol-I. 5. The provisions of Note (III) of Para- 3.5.18 of OPWD Code Vol-I and Rule 29 of Appendix-IX of OPWD Code Vol-II issued vide Works Department Office Memorandum No. 16/W dated 01.01.2015, are provide as under : “Note (III) of Para- 3.5.18 – The single Tender received in first call shall be cancelled without opening the bid. The acceptance of the single tender received, even after retendering should have prior approval of the next higher authority. “ “Rule-20 of Appendix-IX – When in response to a notice calling for tenders, only a single tender is received in the first time, the tender shall be cancelled without opening of the bid and fresh tender be invited publicly. If single tender is received, even after retendering then the approval of next higher authority should be obtained, if the tender is otherwise be in order and acceptable.” 6. The relevant portion of the order dated 01.07.2024 is extracted below : “…..Whereas, in the instant case no tender was received against the Tender Call Notice invited vide notice No.RWC.-19/23 dtd. 29.08.2023 and even in W.P.(C) No. 16964 of 2024 Page 6 of 12 response to the re-tender by Tender Call Notice No. RWC.-24/23 dtd. 26.09.2023 only one bid received. As such it can be construed that the requirement in Para-29 of Appendix-IX of the OPWD Code, Vol-II is not fulfilled. So the single bid of Sri Prahallad Swain received in the re-tender called on 26.09.2023 is liable to rejected. Accordingly, the Committee opined to direct the Chief Construction Engineer, Rural Works Circle, Cuttack to re-invite the tender following due process of law. Whereas, the submission of bid documents by the petitioner in response to 2nd time tender though technically can be called as 2nd time tender but when in response to 1st tender non-submitted bid and/or participated in the tender process; such invitation of tender in reality is no tender as because none has participated in the tender. Further, in response to the 2nd time tender notice, petitioner alone submitted his bid documents. So, the Tender Committee Member unanimously decided to treat such 2nd tender as a 1st time tender in view of single response. Whereas, the petitioner in his representation dtd. 18.12.2023 requested to revoke the cancellation order issued vide order dtd. 15.12.2023 for calling for fresh tender and prayed to open the price-bid of the petitioner to approve his tender. W.P.(C) No. 16964 of 2024 Page 7 of 12 Whereas, in view of the principles discussed above the claim of petitioner not being justified in the eye of law, the tender cannot be accepted. Hence, the representation of the petitioner dtd.18.12.2023 at Annexure-5 to the W.P.(C) No.136 of 2024 being devoid of merit is rejected.” 7. The Supreme Court and this Court in a number of cases have held the court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The impugned decision must be tested by the application of Wednesbury principles of reasonableness and should be free from arbitrariness and not affected by bias or actuated by mala fides . But the court does not have the expertise to correct the administrative decision and substitute it with its own decision, as it lacks the necessary expertise, for which its decision may be fallible. It has also been held that the government must have freedom of contract and fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. 7.1. In the case of State Of Jharkhand & Ors vs M/S Cwe- Soma Consortium , the Supreme Court has interalia held as follows: W.P.(C) No. 16964 of 2024 Page 8 of 12 “ 18. Admittedly, in the pre-bid meeting held on 24.03.2014, ten tenderers have participated. After conclusion of the pre-bid meeting on 24.03.2014, as a result of stringent conditions prescribed in clause 4.5(A)(a) and 4.5(A)(c), only three tenderers could participate in the bidding process and submit their bids. As noticed earlier, upon scrutiny two were found non- responsive. In our considered view, High Court erred in presuming that there was adequate competition. In order to make the tender more competitive, tender committee in its collective wisdom has taken the decision to cancel and re-invite tenders in the light of SBD norms. As noticed earlier, the same was reiterated in a subsequent meeting held on 09.07.2014. While so, the High Court was not justified to sit in judgment over the decision of tender Committee and substitute its opinion on the cancellation of tender. Decision of the state issuing tender notice to cancel the tender and invite fresh tenders could not have been interfered with by the High Court unless found to be mala fide or arbitrary. When the authority took a decision to cancel the tender due to lack of adequate competition and in order to make it more competitive, it decided to invite fresh tenders, it cannot be said that there is any mala fide or want of bona fide in such decision. While exercising judicial review in the matter of government contracts, the primary concern of the court is to see whether there is any infirmity in the decision-making process or whether W.P.(C) No. 16964 of 2024 Page 9 of 12 it is vitiated by mala fide, unreasonableness or arbitrariness.” 7.2. In the case of Tata Cellular v. Union of India (1994) 6 SCC 651,, the Supreme Court has held : “70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism, However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.” 7.3 In the case of Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. and Anr. : (2005) 6 SCC 138, the Supreme Court has held as under :- W.P.(C) No. 16964 of 2024 Page 10 of 12 “12. After an exhaustive consideration of a large number of decisions and standard books on administrative law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” 8. After considering the submissions of the learned counsel, the provision of Note-III of Para 3.5.18 of OPWD Code Vol-I and Rule-20 of Appendix-IX in light of the decisions of the Supreme Court , we are satisfied there is no reason to interfere with the W.P.(C) No. 16964 of 2024 Page 11 of 12 decision / order dated 15.12.2023 or order dated 01.07.2024 in exercise of power under Article – 226 of the Constitution of India . 9. As we find no merit in the writ application , we dismiss the same . Chief Justice (Chakradhari Sharan Singh) (Savitri Ratho) Judge Orissa High Court, Cuttack. The 31st July, 2024. S.K. Behera, Senior Stenographer. Signature Not Verified Digitally Signed Signed by: SUKANTA KUMAR BEHERA Designation: Senior Stenographer Reason: Authentication Location: Orissa High Court Date: 16-Jan-2025 17:31:36 W.P.(C) No. 16964 of 2024 Page 12 of 12