K. D. George v. Greater Cochin Development Authority and The Superintending Engineer, Greater Cochin Development Authority

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **TUESDAY, THE 14TH DAY OF MARCH 2017/23RD PHALGUNA, 1938** **WP(C).No. 7811 of 2017 (B)** **----------------------------------------** **PETITIONER(S) :** **-------------------------** **K.D.GEORGE, S/O. DANIEL, AGED 52 YEARS, PAVANA, VYTTILA P.O., ERNAKULAM, COCHIN - 19.** **BY SRI.RAJU JOSEPH (SENIOR ADVOCATE) ADVS. SRI.GEORGE KURUVILLA(ALAPPUZHA) SRI.VINOD VALLIKAPPAN SRI.C.JOSEPH ANTONY** **RESPONDENT(S) :** **----------------------------** **1. GREATER COCHIN DEVELOPMENT AUTHORITY, KADAVANTHRA POST OFFICE, COCHIN - 682 020, REPRESENTED BY ITS CHAIRMAN.** **2. THE SUPERINTENDING ENGINEER GREATER COCHIN DEVELOPMENT AUTHORITY, KADAVANTHRA POST OFFICE, COCHIN - 682 020.** **BY ADV. SRI.ROSHIN IPE JOSEPH, S.C** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Msd. ## **WP(C).No. 7811 of 2017 (B)** ## **----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** ## **P1 TRUE COPY OF THE CERTIFICATE OF REGISTRATION AS A CLASS GOVT. CONTRACTOR.** - **P2 TRUE COPY OF THE SERVICE TAX REGISTRATION CERTIFICATE.** - **P3 TRUE COPY OF THE E-TENDER NOTICE DATED 09.01.2017.** - **P4 TRUE EXTRACT OF PWD MANUAL REVISED EDITION 2012.** - **P5 TRUE COPY CORRIGENDUM DATED 23.01.2017.** - **P6 TRUE COPY OF THE TENDER SUBMITTED BY THE PETITIONER.** - **P7 TRUE COPY OF THE BID SUBMISSION CONFIRMATION DATED 25.01.2017.** - **P8 THE TRUE COPY OF THE LETTER DATED 04.02.2017 INVITING THE PETITIONER FOR NEGOTIATION.** - **P9 TRUE COPY OF REDUCED OFFER GIVEN BY THE PETITIONER DATED 07.02.2017.** - **P10 TRUE COPY OF THE RETENDER NOTICE DATED 27.02.2017. RESPONDENT(S)' EXHIBITS :** ## **NIL** **//TRUE COPY//** **P.S.TO JUDGE.** Msd. ## **SHAJI P. CHALY, J.** -------------------------------------------------- ## **W.P.(C) No.7811 of 2017 ----------------------------------------------Dated this the 14[th] day of March, 2017** ## **JUDGMENT** This writ petition is filed by the petitioner seeking to quash Ext.P10 whereby the 1[st] respondent invited competitive e-tenders from registered A-class civil contractors who possess required qualifications for the works related to Jawaharlal Nehru International Stadium (JNIS) in connection with FIFA Under-17 World Cup Foot Ball, and for other related reliefs. Material facts for the disposal of the writ petition are as follows: 2. Petitioner is a registered A Class Civil Government contractor having registration No.9A/SECCA/2008, evident from Ext.P1. Petitioner has got Service Tax Registration also evident from Ext.P2. The 2[nd] respondent invited online bids for the work of fixing Chairs at JNIS, in connection with FIFA Under-17 World Cup Foot Ball Tournament, evident from Ext.P3 tender dated 09.01.2017. In Ext.P3, it is stipulated that all conditions prevailing in PWD regarding tendering are applicable to the said tender. A true copy of the P.W.D **W.P.(C) No.7811 of 2017** 2 Manual is produced as Ext.P4. As per the tender notice, bids are invited from A Class Civil Contractors registered with PWD/Central/State/Public Sector Undertakings, who have satisfactorily completed single similar work costing not less than Rs.75 lakhs during the last five years, and having service tax registration. As per Ext.P3, the probable amount of contract for the said work is Rs.3,84,72,768/-. The last date for submission of the tender was 17.01.2017. The said date was later extended by the 2[nd] respondent by issuing a corrigendum, till 25.01.2017, evident from Ext.P5. As per Ext.P5, the tender was expected to be opened on 31.01.2017 at 11 a.m. 3. Since the petitioner is having all the necessary qualifications and work experience, petitioner submitted tender on 25.01.2017 in response to Exts.P3 and P5, producing all necessary documents and Work Experience Certificate required as per the tender notification along with requisite EMD of Rs. One lakh, evident from Ext.P6. The bid submitted by the petitioner was confirmed as per Ext.P7 dated 25.01.2017. 4. It is submitted, to the knowledge of the petitioner, only two bids were received within the specified period and the **W.P.(C) No.7811 of 2017** 3 bids were opened on 31.01.2017. Petitioner has quoted the rate of Rs.4,18,57,280/-, which is 8.8% above the estimate amount, whereas the 2[nd] tenderer quoted Rs.4,36,03,200/-, which is 13.34% above the estimate. Petitioner was thereafter invited by the 2[nd] respondent for negotiation and directed to submit his reduced offer, if any, in closed sealed cover on or before 08.02.2017, evident from Ext.P8. According to the petitioner, though the Tender Rules clearly prohibit any negotiation after opening of tender, still in response to Ext.P8, petitioner offered a reduced rate of Rs.4,02,04,043/-, which is 4.5% above the estimate, evident from Ext.P9. 5. In pursuance to the negotiation, and Ext.P9 reduced offer, petitioner understands that the 2[nd] respondent has recommended the case of the petitioner to the 1[st] respondent with the remark that the final rate quoted by him was quite reasonable, and the petitioner can be awarded with the work. Other contentions are also raised to the effect that petitioner was given an impression that he is likely to get the contract. However, all on a sudden, without providing any notice or communication to the petitioner, Ext.P10 re-tender was invited by the respondents and the period fixed for submission of the 4 **W.P.(C) No.7811 of 2017** tender is from 06.03.2017 to 13.03.2017, and the date of opening of the tender is on 17.03.2017. 6. On coming to know about Ext.P10 tender, petitioner made enquiries with the office of the 2[nd] respondent and was made to understand that since the petitioner's tender was the only legal tender received and since they cannot proceed with only single tender, it was decided to go for re-tender. According to the petitioner, the said stand is not correct and the action is tainted with _malafides_ , arbitrariness and illegality. These are the background facts projected by the petitioner to sustain the reliefs sought for in the writ petition. 7. Heard learned Senior Counsel for the petitioner, Sri. Raju Joseph and the learned Standing Counsel appearing for the respondents. Perused the documents on record and the pleadings put forth by the petitioner. 8. The paramount contention advanced by learned Senior Counsel Sri. Raju Joseph is that the original period fixed for the submission of the bid was extended to 25.01.2017, since there was only one tenderer responded to the invitation. The same was done as per the stipulations contained in the notification issued by the Government dated 30.07.2015. **W.P.(C) No.7811 of 2017** 5 Since the petitioner having participated in the tender, if there was any infirmity in the tender submitted and the negotiations made, respondents ought to have heard the petitioner and a decision taken accordingly. Therefore, according to the learned Senior Counsel, the entire action of the respondents is illegal, arbitrary and with _malafide_ intention to eliminate the petitioner from the tender process. 9. Learned Senior Counsel has also invited my attention to the judgment of the apex court in ' _**Ramana Dayaram Shetty v. International Airport Authority of India'**_ [(1979) 3 SCC 489], to canvass the proposition that statutory public authority is bound to act with fairness and without any arbitrariness. Learned counsel has also invited my attention to the proposition of law laid down therein, wherein a condition was there enabling the authority to reject all the tenders and negotiate with any party. According to the learned Senior Counsel, having invited the petitioner for a negotiation and the petitioner having reduced the rate, there was a clear duty cast upon the respondents to have heard the petitioner before rejecting the tender and re-tendering the very same work. That apart, learned counsel also invited my **W.P.(C) No.7811 of 2017** 6 attention to the judgment of the apex court in ' _**Joshi Technologies International Inc. v. Union of India and others**_ ' [(2015) 7 SCC 728], to canvass the proposition that a writ is maintainable against rejection of a tender itself even without any acceptance of the offer made by the petitioner. 10. On the other hand, learned Standing Counsel appearing for the respondents, Sri. Roshin Iype Joseph contended that the tender inviting authority, as per the tender notification, is vested with ample powers to reject any tender. It is also contended that when there was a specific stipulation contained in the tender inviting notice, that the respondents are entitled to reject a tender without assigning any reason, there is no duty cast upon the respondents to inform the petitioner before rejection of the tender. Learned Standing Counsel has also invited my attention to the judgment of the apex court in ' _**Meerut Development Authority v. Association of Management Studies and another**_ ' [AIR 2009 SC 2894] and specifically to paragraphs 17 and 18, which read thus: _“17. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must_ **W.P.(C) No.7811 of 2017** 7 _be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above-stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations._ _18. It is so well-settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favoritism.”_ 11. So also, learned counsel has pressed into service the judgment of the apex court in _**'Maa Binda Express Carrier v. Northeast Frontier Railway and others**_ ' [AIR 8 **W.P.(C) No.7811 of 2017** 2014 SC 390], wherein, in paragraphs 8 and 9 the very same issue was considered, which read thus: _“_ _**8** . The scope of judicial review in matters relating to award of contract by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well-settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor made to benefit any particular tenderer or class of tenderers. So also the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process._ _**9** . Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the Court who is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest.”_ 9 **W.P.(C) No.7811 of 2017** 12. Further, learned Standing Counsel has invited my attention to the judgment of the apex court in ' _**Sanjay Kumar**_ ## _**Shukla v. Bharat Petroleum Corporation Ltd. and others'**_ [AIR 2014 SC 3778] and invited my attention to paragraph 12, which read thus: _“_ _**12** . In Air India Ltd. v. Cochin International Airport Ltd. and Ors.2, there was a further reiteration of the said principle in the following terms:-_ _"7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India3, Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India4, CCE v. Dunlop India Ltd.5, Tata Cellular v. Union of India6, Ramniklal N. Bhutta v. State of Maharashtra7and Raunaq International Ltd. v. I.V.R. Construction Ltd.8The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides,_ 10 **W.P.(C) No.7811 of 2017** _unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene."_ 13. So also, learned Standing Counsel has pressed into service the judgment of the apex court in ' _**State of Jharkhand and others v. M/s. CWE-SOMA Consortium'**_ [AIR 2016 SC 3366] and invited my attention to paragraphs 18 and 21, which read thus: _“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 Clauses 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 nonresponsive. 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 malafide or arbitrary._ 11 **W.P.(C) No.7811 of 2017** _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 malafide or want of bonafide 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 it is vitiated by malafide, unreasonableness or arbitrariness._ _21. The right to refuse the lowest or any other tender is always available to the Government. In the case in hand, the respondent has neither pleaded nor established malafide exercise of power by the appellant. While so, the decision of tender committee ought not to have been interfered with by the High Court. In our considered view, the High Court erred in sitting in appeal over the decision of the appellant to cancel the tender and float a fresh tender. Equally, the High Court was not right in going into the financial implication of a fresh tender.”_ 14. Therefore, it is the contention of the learned Standing Counsel that the respondents are left with ample authority to reject a tender. That apart, the petitioner was invited for a negotiation and petitioner reduced the amount. However, the same was not acceptable to the respondents. According to the learned counsel, the action of the respondents in re-tendering the work is for the purpose of securing more competitive bids so as to save the interest of the Authority financially and qualitatively. 15. Taking note of the respective submissions made across the Bar, the short question to be considered is whether 12 **W.P.(C) No.7811 of 2017** any manner of interference is warranted in Ext.P10 tender invited by the respondents. The discussion made above shows that the tender submitted by the petitioner was considered by the respondents. Petitioner was invited for a negotiation and the petitioner had reduced the rate, as discussed above. However, the respondents were not satisfied still, and it was thereupon decided to issue a re-tender. Even though it is stated in the writ petition that Ext.P10 is nothing but a _malafide_ action, petitioner has not made out any case of _malafides_ on the part of the respondents in inviting re-tender as per Ext.P10. Moreover, there is no prohibition for the petitioner to participate in the tender. 16. Culling out the principles of law laid down by the apex court and this Court in various judgments, the realm of interference in a contractual matter by a writ court is purely based on any illegality, arbitrariness, unfairness and _malafides_ . Here is a case where consequent to the submission of the bid by the petitioner, the same was opened and considered, and the petitioner was given a fair opportunity, to deliberate on the issue. In my considered opinion, the respondents are the masters of the tender invited by them, and therefore, it is for 13 **W.P.(C) No.7811 of 2017** the said authority to decide the feasibility and viability of the contract in accordance with the financial capacity and the quality required for the purpose. The 1[st] respondent is a body created for the purpose of infrastructural development in the Greater Cochin area. The International Stadium is constructed and is maintained by the respondents, and in the 2017 FIFA Under 17 World Cup Foot Ball Tournament, some of the matches are hosted at Cochin in the International Stadium. It is for the purpose of complying with the stipulations of FIFA authorities, the arrangements are made and the tender was invited for the very same purpose. So also, merely because a tender was submitted and a security is furnished as per the stipulation, that by itself will not create any right to the petitioner to have his tender accepted. 17. That apart, petitioner participated in the tender fully knowing the power vested in the respondents to reject the tender without assigning any reason. Therefore, petitioner has no legal right to insist that he should have been heard before cancellation of the tender. Again, it is not a case where the tender was assigned in favour of any other participant. Moreover, mere offer will not by itself transform into 14 **W.P.(C) No.7811 of 2017** acceptance. There is no case for the petitioner that the tender was accepted. Mere offering of tender and discussion will not improve the said legal situation. Therefore, in my considered opinion, there are no enabling circumstances pointed out by the petitioner warranting interference in the action of re-tender issued by the respondents as per Ext.P10. 18. During the course of the argument, it is submitted by learned Senior Counsel that since the re-tender invited closes on 13.03.2017, petitioner has also submitted a bid, but the same is subject to the result of the writ petition filed by the petitioner. 19. For the foregoing discussion, I do not find any reason to interfere with Ext.P10, there being no illegalities, other legal infirmities, _malafides_ or unfairness on the part of the respondents. The writ petition fails, accordingly it is dismissed. Sd/- **SHAJI P. CHALY JUDGE** //true copy// St/15.03.2017 P.S. to Judge