In WP (C) 28490 of 2022- ORI HC-  ‘L-1 class A contractor did not approach Court with clean hands’: Orissa High Court while dismissing petition challenging disqualification of lowest successful bidder for construction at District Court Building, Bhadrak
Justice M.S.Raman [18-05-2023]

Read Order: Rabindra Kumar Das v State of Odisha

Simran Singh

New Delhi, May 23, 2023- The Orissa High Court, while exercising its civil writ jurisdiction and dismissing the petition, stated that it did not find any illegality and irregularity committed in the decision-making process of selection of respondent 7 as a successful bidder in respect of work so as to cause interference of this Court. It was held that the decision taken for revocation on the assessment made by the tender committee on the basis of the materials available on record could not be said to be mala fide exercise of power by the authority concerned.

“If the DTCN specifies the mode of submission of tender document and that mode was found to have been not followed, the submission of tender document itself was a defective one. The tender document had to be in consonance with the DTCN and it must be unconditional one and in proper form,” said a Single-Judge Bench of Justice M.S.Raman.

The Bench viewed that merely because the petitioner was found, on consideration of an erroneous document, that by itself could not create a right in favour of the petitioner, unless the parties had entered into agreement and there was concluded contract to that extent. “Since no right has been accrued in favour of the petitioner and the authorities, having realized their mistake, rectified the same and that the same is well within their jurisdiction, this Court is not inclined to interfere with the decision so taken.”

In the matter at hand, the petitioner being an ‘A’ class contractor sought for direction to the respondent to finalize the tender and award the contract in his favour, being the successful (L- 1) bidder, in view of the proceedings dated 30-09-2022 and further to execute necessary agreement with him pertaining to the work of ‘Construction of Bar Association Hall with Amenity Centre of District Court Building at Bhadrak’  for the year 2022-23 by quashing the letter dated 29-09-2022 by which respondent 3 had constituted a fresh technical evaluation committee and proceeded with the tender process.

The petitioner had further sought to quash the letter dated 08-02-2023 by stating therein that as per the decision of the committee held on 06-02-2023, the petitioner had been disqualified as L-1 bidder, and consequential action thereof taken by the authority was without jurisdiction, invalid, inoperative amounting to overreaching the directions of this Court contained in order dated 28-10-2022 and order dated 17-01-2023.

The Bench stated that admittedly petitioner was declared as L-1 bidder by the technical evaluation committee for the aforesaid work but, subsequently, on complaint being received against them, the same was re-examined on the basis of which it was found that the petitioner had taken advantage by producing fraudulent documents. On instructions being received from the competent authorities with regard to issuance of such documents and when it came to the notice of the technical evaluation committee that the same were not issued by them, ultimately took the decision in favour of  respondent 7 as he was the 2nd highest bidder, as the petitioner incurred disqualification in terms of the provisions contained in the Detailed Tender Call Notice (‘DTCN’).

The Court stated that there was no bar to rectify an inadvertent error and mistake, which came to the notice of the tender inviting authority upon receipt of the complaint from one of the bidders, thus, decision was unanimously taken by the committee to revoke the bid for further evaluation. Therefore, it was held that no illegality had been committed in re-evaluating the bids after receipt of the complaint against the successful bidder and before issuance of Letter of Acceptance.

The Court stated that since the case of the respondent was that the allegation received against the petitioner was under scrutiny, this Court, vide order dated 17-01-2023, directed the respondents to proceed with the allotment of the work in favour of the selected person, since no interim order was operating. Pursuant to such direction and upon receipt of detailed clarification, the complaint received against the petitioner was finalised upon disqualification of the petitioner on 06-02-2023.

The Bench noted that the the L2 bidder was called upon thereafter vide letter dated 08-02-2023, for negotiation of the rate. Accordingly, the name of the L2 bidder was recommended vide letter dated 10-02-2023, for necessary approval, but the same was not received. Consequentially, because of pendency of the writ petitions, the work could not be progressed.

The Court stated that clauses 14 and 16 of the DTCN stipulated the eligibility criteria of satisfactory execution or completion of similar nature of works, and merely becoming L1 bidder did not automatically get entitled to be awarded with the work, irrespective of genuineness of the documents submitted and their satisfactory verification. Furthermore, it was noted that the tender document was not a statutory document and as and when, any inadvertent error was found in evaluation of bidding process, the same could be rectified by the tendering authority. The Committee opined that the tendering authority had every right to revoke the tender to pre-opening stage for further evaluation of the bid, as no right had been accrued in favour of the petitioner in any manner by the time the complaint was received on 30-09-2022 from respondent 7 and, as such, verification of original documents could not be held awaiting enquiry report on the allegations made against the petitioner.

The Bench stated that the disqualification of the petitioner had been made according to clauses 119(a) and 126(f) of the DTCN and the disqualification of the petitioner’s bid was within the competency of the authority and as such the same was in compliance of the provisions contained in the DTCN. Thereby, no error could be found with the authority in rejecting the bid of the petitioner. Once the petitioner was found ineligible, as he had produced false documents and committed fraud on the authority in violation of clauses-119 (a) and 126 (f) of the DTCN, the committee recommended for negotiation with the 2nd lowest bidder, i.e. respondent 7 . Accordingly a letter dated 08-02-2023 was issued to the L2 bidder namely respondent 7 to negotiate on a par with the rate quoted by the L1 bidder. The 2nd lowest bidder agreed to negotiate on a par with the rate quoted by L1 bidder (petitioner) and his original documents were verified with the uploaded documents. The tender of the 2nd lowest bidder being minus 10.30% less than the amount put to tender was recommended for approval. Thus, the Court did not find any error or illegality in selecting respondent 7 and the L1 bidder in the interest of justice, equity and fairplay.

The Bench was of the view that the petitioner had not approached the Court with clean hands and thus by giving distorted facts, it was held that the petitioner had misled the authority.

The Bench while relying on State of Punjab v. Jagdip Singh stated that it was no more res integra that the authority, who had committed a mistake could rectify the same if it was brought to its notice at a subsequent stage. Further while referring to Union of India v. Rakesh Kumar it was viewed that the principle of estoppel would not apply to the present context, inasmuch as if the mistake had been discovered, the same was to be rectified.

“As there is no concluded contract existed between the parties, the claim made by the petitioner to award the contract in his favour on the basis of the so called consideration made cannot be acceded to.” The bench navigated through Section 10 of the Contract Act, 1872 and stated that the right to make a contract included right not to make a contract. But said right was inherent in every person capable of entering into a contract. Therefore, once mistake was found out and the same had been rectified, it was within the domain of the authority to enter into a contract with a person, who was found eligible. Thereby, it was held that no illegality or irregularity had been committed by the authority.