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TMI Blog2016 (7) TMI 1626X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was sanctioned in the year 1978 with the objective of providing irrigation in Jharkhand, Orissa and West Bengal. It will also provide water for drinking and industrial purpose as also for production of hydel power. The Water Resources Department, Government of Jharkhand, through its Executive Engineer issued a Notice Inviting Tender (NIT) for the construction of the Dam as per the Standard Bidding Documents (SBD) dated 28.02.2014. On 24.03.2014, a pre-bid meeting was held where ten tenderers participated and during its course, it was observed that in the clauses of the NIT, there were certain departures from the SBD. After the pre-bid meeting, in total, only three bidders namely, M/s CWE-SOMA Consortium, Hyderabad (respondent herein), M/s. IL & FS Engineering and Construction Co. Ltd., Hyderabad and M/s. Navyuga Engineering Co. Ltd., Hyderabad participated in the tender process and submitted their bids. In meetings of the Departmental Tender Committee held on 02.06.2014 and 06.06.2014, it was found that among the three tenderers, only the respondent was found responsive and other two bidders were found unresponsive. Therefore the tender committee took a decision under clause 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Anr. (2007) 1 SCC 477 and Uttar Pradesh Avas Evam Vikas Parishad & Ors. v. Om Prakash Sharma (2013) 5 SCC 182, it was submitted that so long as the bid has not been accepted, the highest bidder acquired no vested right to have the auction confirmed in his favour. It was further submitted that clauses 4.5 (A) (a) and 4.5 (A) (c) which were restrictive have led to other two bidders becoming unresponsive. It was contended that these restrictions have not garnered the approval of the Cabinet which is mandatory and was consequential in reducing the number of participants from ten to three in which SOMA alone was found to be responsive and the tender committee rightly decided to cancel the tender which is in consonance with clause 4.18 (d) of CVC Guidelines. It was urged that the impugned judgment directing the appellant to open the technical as well as the price bid of the respondent is erroneous and against well settled principles laid down by this Court. 6. Per contra, Mr. P.P. Rao learned Senior Counsel for the respondent appearing along with Senior Counsel, Mr. Dushyant Dave submitted that cancellation of respondent's tender was arbitrary and against public interest. By referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticipants in the meeting on 24.03.2014 of pre-qualification bid, in view of stringent clauses in the tender document, only three bidders namely: (i) M/s. CWE-SOMA Consortium, Hyderabad; (ii) M/s. IL & FS Engineering and Construction Co. Ltd., Hyderabad and (iii) M/s. Navyuga Engineering Co. Ltd., Hyderabad submitted their bids. Upon scrutiny of the three bids, only respondent's company bid was found responsive; the other two bids were found non-responsive in the light of provisions of clauses 4.5(A)(b) and 4.5(A)(c). The tender committee therefore decided to cancel the tender in order to make the tender more competitive and decided to re-invite tenders in the light of SBD norms on the basis of which tenders are invited by the department. The minutes of the Departmental Tender Committee held on 02.06.2014 reads as under:- "In light of special conditions prescribed for the invited tender for the work, only one tenderer is found responsive in technically-cum-pre-qualification bid. In view of the above, in order to make the tender under subject more competitive, the departmental tender committee after due consideration while cancelling the tender has decided to re-invite tenders i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason thereof." Clause 32.1 of SBD: "...the Employer reserves the right to accept or reject any Bid 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 Bidder or Bidders of the grounds for the Employer's action." In terms of the above clause 24 of NIT and clause 32.1 of SBD, though Government has the right to cancel the tender without assigning any reason, appellant-state did assign a cogent and acceptable reason of lack of adequate competition to cancel the tender and invite a fresh tender. The High Court, in our view, did not keep in view the above clauses and right of the government to cancel the tender. 14. The State derives its power to enter into a contract under Article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under Article 14 of the Constitution of India. In the case in hand, in view of lack of real competition, the state found it advisable not to proceed with the tender with only one responsiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to in Appendix. (a) Achieved a minimum annual turnover (in all classes of civil engineering construction works only) amount indicated in Appendix in any one year, (usually not less than one & half times the estimated cost of the project may be kept. However, for Turn-key & other projects where completion period is two years or more, the annual turnover may be kept as per the requirement upto 1.50 x Estimated cost/years of completion of project). (b ...... (c) Executed in any one year, the minimum quantities of the following items of work as indicated Appendix. - cement concrete (including RCC and PSC)......cum -earthwork in both excavation and embankment(combined quantities) ..............cum - ..................... ..............cum - ..................... ..............cum (usually 50% of estimated quantity. However, for Turn-key & other projects where completion period is two years or more as per the requirement may be kept as estimated quantity/years of completion of project.)" 17. Clauses 4.5(A)(a) and 4.5(A)(c) have been found stringent resulting in request to the Chief Engineer for issuing corrigendum as the above clauses added an additional qualification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the manner in which the decision was made, in Tata Cellular v. Union of India (1994) 6 SCC 651, in para (70) it was held as under:- "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." 20. The government must have freedom of contract. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made without permission of this Court. The appellant-state has filed an additional document stating that about 20,421.43 acre of land is to be acquired under the "Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013" which came into force on 01.01.2014. Section 41 of the said Act states that no acquisition of land as far as possible could be made in the Scheduled Area. If it is necessary, it should be done only as per last resort. It also states that land in Scheduled Areas can only be acquired with the prior consent of Gram Sabha or Panchayats or the autonomous District Councils. The learned Attorney General submitted that the entire sub-mergence area of the proposed Icha Dam is in the scheduled area and the remaining land for Icha Dam can be acquired only with the prior consent of the Gram Sabha of the affected villages. It is further stated that the issue was discussed in the meeting of Tribal Advisory Council held on 27.09.2014 and that Tribal Advisory Council and the sub-committee opined that the construction of Icha-Kharkai Dam may be cancelled. Learned Attorney General therefore submitted that there are some issues whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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