Judgment:
S.N. Phukan, C.J.
1. The present writ petition under Article 226 of the Constitution of India has been filed by the Rashtriya Pari Yojana Nirman Nigam Limited, a company registered under the Indian Companies Act and wholly owned by the Government of India. The Member-Secretary of the Orissa Water Supply & Sewarage Board, opposite party No. 1, issued a notice dated 26-2-1996, vide Annexure-1, calling for detailed tenders from reputed firms/companies having experience in design, construction, testing and commissioning of Water Treatment Plants to be drawn up in lump sum contract form of Orissa Water Supply & Sewarage Board (hereinafter called 'the Board'). The work to beexecuted was 'Design, Construction, Testing & Commissioning of 55 MLD Water Treatment Plant at Rourkala in connection with Water Supply to Rourkala Civil Town'. The Petitioner-company after procuring tender paper on payment of necessary cost submitted its tender before the appropriate authority for the aforesaid work. It has been alleged that the petitioner-company satisfied the eligibility criteriaas well as different terms and conditions spelt out in the tender call notice. The offer of the petitioner was Rs. 4,01,79,158/- forexecution of the work in question and its offer was the lowest. As many as five firms submitted tenders. It has been alleged that the Member-Secretary of the Board by letter dated 18-4-1996 informed the petitioner-company that the conditions detailed in the tender notice as well as settled in the per-bid discussion would have to be accepted by the petitioner and the Additional General Manager on behalf of the petitioner-company vide Annexure-2 accepted the conditions. The Additional General Manager of the petitioner-company by letter dated 3-6-1996, vide Annexure-3, informed the Member-Secretary of the Board that the bid of the petitioner-company was the lowest. It has been stated on behalf of the petitioner-company that it is a leading public sector organisation engaged in huge construction works in India and abroad. According to the petitioner-company, it was having a huge establishment at Rourkala and the man-power and equipments were going to be rendered wastage on account of completion of the previous works undertaken by it, and, therefore, foreffective utilisation of the available recourses, it quoted a comparative low rate keeping a marginal profit. By letter dated 4-6-1996 (Annexure-4), the Additional General Manager of the petitioner-company requested the Member-Secretary of the Board to settle the contract in favour of the petitioner-company in view of its lowest offer and expertise in execution of works of similar nature. It was also stated that the company has been considered by the World Bank for execution of similar work in other countries. The grievance of the petitioner is that in spite of its lowest tender, the contract was awarded in favour of M/s. B. M. Consultants, Bhubaneswar, opposite party No. 3, though the rate quoted by the said firm was Rs. 58 lakhs more than the rate quoted by the petitioner-company. Work order was also issued in favour of opposite party No. 3, but it has been alleged that the work has not been started. Copy of the work order is at Annexure-5. It has been alleged that the action of opposite party No. 1 in settling the contract with opposite party No. 3 suffers from bias, extraneous consideration, mala (ides and arbitrariness and is violative of Article 14 of the Constitution of India. According to the petitioner, the contract was awarded in favour of opposite party No. 3 for collateral purposes. Therefore, it has been prayed that appropriate writ may be issued for quashing the work order, Annexure-5, and awarding the contract in favour of the petitioner-company.
2. The counter affidavits have been filed one on behalf of opposite parties 1 and 2, and the other on behalf of opposite party No. 3 in whose favour the contract has been awarded. The petitionerhas also filed a rejoinder and additional affidavit.
3. It is not disputed that the notice inviting tenders for the work was issued and that the contract was awarded in favour of opposite party No. 3. From the counter affidavit, we find that as many as five tenders were submitted and the price quoted fay the petitioner-company was the lowest, i.e., Rs. 401.792 lakhs, whereas the price quoted by opposite party No. 3 was Rs. 460.00 lakhs. According to the Board, as per the settled law, it has the right to choose the best tenderer and this power cannot be said to be arbitrary. It has also been alleged that the petitioner has not questioned the 'decision-making process'. It has been averred that after due consideration, the contract was awarded in favour of opposite party No. 3 to protect the financial interest of the Board. The action was neither irrational nor unreasonable. The tender committee found that though the price quoted by the petitioner was the lowest, but 89.58% of the offer was for construction of civil items and only 19.42% was for mechanical-cum-electrical items. Therefore, the technical exports were of the opinion that the break-up was most impracticable as normally in such type of contract for civil items, the break-up is within the range of 60% to 74% and for mechanical-cum-electrical items it is 40% to 26%, out of the total cost of construction of a water treatment plant. Reference has also been made to the Orissa P.W.D. Code. The tender committee and the other authorities of the opposite party-Board were of the considered view that the petitioner-company while taking away 81% of the offer for civil items would back out instead of completing the entire work and will put the Board to the hazards of escalation and non-execution of the machanical -cum -electrical items. It has also been stated that reasonable opportunities were afforded to all the tenderers and there was a pre-bid discussion which was held on 29-3-1996 in the chamber of the Member-Secretary of the Board. In spite of notice, the petitioner did not participate in the said pre-bid discussion. According to the Board, as the work in question is being financed by the HUDCO and is a time-bound programme, unless the same is implemented within the period stipulated by HUDCO, the State, and particularly the people of the town of Rourkala, would suffer for want of proper water treatment plant. The claim of the petitioner that being a Government of India undertaking, it has to be treated at a higher pedestal has been denied. According to the opposite party-Board, opposite party No. 3 is an experienced contractorand has already completed similar work of Water Treatment Plant at Paradip and similar projects are under execution at Hirakud and Kendrapara. It has been averred that Ihe performance of the petitioner in the-past was not satisfactory and as per the Rourkela Steel Plant authorities, the petitioner delayed some construction work, and warning letters have been annexed. It has also been alleged that the petitioner delayed the construction of Indravati Power House (C.W.) and the Superintending Engineer had to rescind the contract and many other civil works were withdrawn from the petitioner. The letter annexed as Annexure-5 to the writ petition, according to the opposite party-Board, is a fabricated one.
4. In the reply affidavit filed on behalf of opposite party No. 3, the averments made in the counter affidavit filed on behalf of opposite parties 1 and 2 have been supported. It has also been stated that opposite party No. 3 has deposited a sum of Rs. 6,17,000/- against the contract awarded and submitted two sets of lay-out and hydraulic/ process designs and drawings by spendinga huge amount of money. The agreement between the parties has been entered into on 17-8-1995 and work order has also been issued on 19-8-1996 vide Annexure-C/3. Opposite party No. 3 has also set up camps at Rourkela and has shifted the machinery from Hirakud for execution of the work. Skilled and unskilled labourers have been transferred from Hirakud to Rourkela to start the project. It has been admitted that on the insistence of the opposite party-Board, opposite party No. 3 has reduced the price from Rs, 4.60 crores to Rs. 4,58,50,000/- vide Annexure-D/3. According to opposite party No. 3, the Firm has successfully completed similar nature of work at different places.
5. We have heard learned counsel for the parties.
6. In the tender notice issued on 26-2-1996 vide Annexure-1, it has been clearly stated that the authority reserves the right to reject any or all the tenders or accept any tender without assigning any reason. Therefore, the claim of the present petitioner that its tender being the lowest was to be accepted has no force. In fact, law is well settled on this point that the authority concerned is not bound to accept the lowest tender.
7. Our attention has been drawn to a decision of the Apex Court in Patna Regional Development Authority v, M/s. Rashtriya Pariyojana Nirman Nigam, JT 1996 (6) SC 113 : (AIR 1996 SC 2074). The above case relates to the present petitioner and we find that the petitioner has been black-listed in the State of Bihar, Though the Patna High Court set aside the order of the appellant, i.e., Patna Regional Development Authority, on the ground that the order of blacklisting was not valid since it was communicated to the respondent, namely, the present petitioner, the Apex Court held that at the relevant time the tender committee took into account relevant factors and its decision could not be said to be arbitrary or unreasonable. The Apex Court further held that in considering whether the decision of the tender committee to award the tender to a person other than the present petitioner is arbitrary or unreasonable, one has to examine the existing circumstances at the time when the decision was taken and that the tender committee rightly took into account the fact that the Water Resources Department of the State of Bihar had black-listed the present petitioner for a period of five years.
8. In Dr. Pradeep Rao v. State of Orissa, 1997 (1) OLR 142, this Bench, speaking through one of us (Justice A. Pasayat), has elaborately dealt with the scope of judicial review in matters of administrative decisions and has taken note of all the decisions reported in All England Reports, the decisions of the Apex Court of our country as well as of this Court. It is not necessary to burden this judgment by referring to all those decisions. We may only summarise the scope of judicial review in matters of administrative decisions, which, inter alia, are as follows :--
(1) 'Judicial review', as the words imply, is not an appeal from a decision, but a review of the matter in which the decision was made.
(2) It is not for the Court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. The Court is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under :
(i) Illegality: This means the decision maker must understand correctly the law that regulates his decision making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety,
(3) The Court must, while adjudicating validity of an executive decision grant a certain measure of freedom of play in the hands of the executive. The problems of the Government are practical ones and may justify the action. Mere errors of the Government are not subject to judicial review.
(4) Courts stand between the executive and the subject alert to see that discretionary power is not exceeded or misused.
(5) If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous, and if apower (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated.
(6) The authority must genuinely address itself to the matter before it, and it must not act under the dictates of another body or disable itself from exercising a discretion in each individual cases. It must act in good faith, must have regard to all relevant considerations and must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the latter and must not act arbitrarily or capriciously. In other words, Court has in see whether there was a failure to exercise discretion and excess or abuse of discretionary power.
9. Viewed from the above position of law, let us examine the facts of the present case.
10. The first contention raised on behalf of the petitioner is that there was negotiation between opposite party No. 1 and opposite party No. 3 and such negotiation is bad in law inasmuch as the petitioner was not asked for such negotiation. On perusal of the materials on record, we find that there was no negotiation. The petitioner has heavily relied on the letter dated 19-6-1996 vide Annexure-5, which has been emphatically denied by opposite parties 1 and 2. In fact, it has been averred in paragraph 11 of the counter affidavit filed on behalf of opposite party No. 1 that the document (Annexure-5) is a fabricated one and such a letter was never issued. In that paragraph, it has been further stated that the work order in favour of opposite party No. 3 was issued on 19-8-1996 vide Annexure-H/1 and opposite party No. 3 was directed to deposit the balance amount of Rs. 6.17 lakhs vide Annexure-J/1. We are satisfied that the averment made by the petitioner regarding the above letter is not correct.
11. Though the tender of the petitioner was the lowest, the tender committee analysed the tenders submitted by all the five firms and was of the opinion that all the firms except the petitioner quoted 60% as cost of construction of civil items and 40% to 36% for electrical and mechanical works, whereas the petitioner-company quoted only 19.42% for electrical and mechanical works and rest for civil work. Therefore, the tender committee on taking into consideration the Orissa Public Works Department Code was of the opinion that the tender of the petitioner was not workable and it may leave the work after completion of the civil Work. This being purely a technical matter, it is for the experts to decide and this Court should not interfere in the matter as it is not an appellate authority in such matters. The decision of the tender committee cannot be said to be arbitrary.
12. In the counter affidavit filed on behalf of opposite party No. 1, it has been alleged that the performance of the petitioner-company was not good and it has delayed execution of works and also received many warning letters from the Rourkela Steel Plant. Therefore, considering the technical and financial aspects and the past performance, the tender of the petitioner was rejected and the second lowest tender was accepted. Though the petitioner-company has challenged this averment, but in view of the decision of the Apex Court in Patna Regional Development Authority (supra), where the present petitioner was the respondent and the said company was black-listed, we have no hesitation to hold that the decision taken in this regard was just and proper. We may state here that in the subsequent affidavit the petitioner-company has tried to justify that it has got both national and international repute. In our opinion, that cannot be a factor for deciding a particular project.
13. It has been argued on behalf of the petitioner-company that the company being a wholly owned Government of India undertaking is entitled to get some concession. We are unable to accept this contention in view of the new policy of the Government to encourage private enterpreneurs. May we add here that if the authorities are satisfied that the petitioner-company is not competent to execute the project, we are unable to interfere in this matter.
14. We may record here that opposite party No. 3 has actually executed similar projects to the best of the satisfaction. The petitioner did not take part in the technical bid as per the tender notice, which was also consideration as per the tender. On this ground also, the tender of the petitioner-company was rightly rejected.
15. According to the tender notice, the tenderers had to submit two sets of lay-out and hydraulic/process designs and drawings within thirty days of the acceptance of the tender, which opposite party No. 3 has done, and it has spent Rs. 12 lakhs for preparation of drawings and designs. Agreement has been executed between opposite party No. 1 Board and opposite party No. 3 on 17-8-1996, work order has been issued on 19-8-1996 vide Annexure-C/3, contour plan/land plan has been approved by the Board on 8-7-1996, and thereafter opposite party No. 3 has set up camps at Rourkela and has shifted the machineries from Hirakud to Rourkela. Therefore, in equity, it would not be proper at this stage to prevent opposite party No. 3 from continuing the work. We say so as we are of the opinion that there is no arbitrariness in awarding the contract in question in favour of opposite party No. 3.
16. We may state here that the petitioner-company did not take part in the pre-bid discussion, which would show that it did not take active interest in the present tender. As we have already stated, this Court cannot sit as an appellate Courtagainst the decision of the tender committee and cannot decide whether a particular policy or decision is fair or not. We have also to give certain amount of freedom and fair-play in the hands of executive. The Court will interfere only when there is non-consideration, non-application of mind, or arbitrariness.
In the case in hand, on perusal of the record, we do not find any arbitrariness, undue influences or non-application of mind. The tender of the petitioner-company, though lowest, was rejected on the ground of disproportion between mechanical and civil works, which cannot be interfered with by this Court.
17. For the reasons stated above, the writ petition is dismissed and the interim order stands vacated. There shall be no order as to costs.
A. Pasayat, J.
18. I agree.