APAAR INFRATECH PRIVATE LIMITED v. UNION OF INDIA & ORS.

1. The petitioner has preferred the present writ petition to assail the letter dated 10.06.2021 – whereby the respondents cancelled the earlier tender No.CE (P) RTNL/05/2020-21 dated 23.03.2021. The petitioner was a bidder in respect of the said tender. The petitioner was held to be technically qualified upon technical evaluation; and upon opening of the financial bids, the petitioner emerged as the lowest bidder (L[1]) on 31.05.2021. The petitioner had tendered for the work in question at Rs.17,64,99,800/-as opposed to next lowest (L[2]) tenderer, who has quoted at Rs.18,49,41,095/-. 2021:DHC:1861-DB W.P.(C.) No. 6035/2021 Page 2 of[8]

2. On 02.06.2021, respondent No. 2 sought a clarification from the petitioner with regard to blacklisting, if any, of the petitioner. The petitioner declared that it had not been blacklisted by any Government Department. Admittedly, the petitioner has been banned by the National Hydroelectric Power Corporation (NHPC) Ltd. vide letter dated 16.12.2019. The petitioner explained to the respondent that NHPC Ltd. is a corporation/ Public Sector Undertaking (PSU), and it does not fall under the definition of Government Department. Therefore,the ban imposed upon the petitioner by the NHPC Ltd. would not disqualify the petitioner qua the said tender. After receipt of the petitioner’s response, on 10.06.2021, respondent No. 2 cancelled the tendering process for “administrative reasons/ technical issues”, and called for a fresh tender on 11.06.2021. The petitioner is aggrieved not only by the cancellation of the aforesaid tender on 10.06.2021, but is also aggrieved by the incorporation of certain fresh terms and conditions in the fresh tender issued on 11.06.2021.

3. The submission of Mr. Singla, learned senior counsel for the petitioner is that since NHPC Ltd. is not a Government body, the ban imposed by the said corporation cannot be a reason to not award the contract to the petitioner despite the petitioner being otherwise technically qualified and the L[1] tenderer. He, therefore, assails the cancellation of the tender dated 23.03.2021 as being arbitrary, whimsical and malafide.

4. He places reliance on the decision of the Supreme Court in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, and in particular paragraph 22 thereof, which reads as follows:- W.P.(C.) No. 6035/2021 Page 3 of[8] “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decisionrelating to award of contract is bona fide and is in public interest,courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interestat the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers withimaginary grievances,wounded pride and business rivalry,to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR W.P.(C.) No. 6035/2021 Page 4 of[8] Whether the process adopted or decisionmade is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”;

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.”

5. When a tenderer/ bidder submits its bid in response to the tender, it only makes an offer. It is up to the tender floating authority whether, or not, to accept the said offer. There is no vested right created in a bidder merely because he may be found to be technically qualified, and he may also have been found to be the lowest, or the highest bidder, as the case may be. The authority issuing the tender reserves to itself the right to cancel the tendering process at any stage. No doubt, the said right cannot be exercised in an arbitrary, whimsical, or mala fide manner with a view to favour any particular party. However, in the facts of this case, it cannot be said that the decision taken by the respondents, and the consequent issuance of the fresh tender, incorporating the conditions by which the petitioner is aggrieved – and to which we shall refer to a little later, is arbitrary, whimsical or mala fide.

6. It appears that in the erstwhile tender floated by the respondents on 23.03.2021, though it incorporated a clause that the bidder should not have W.P.(C.) No. 6035/2021 Page 5 of[8] been blacklisted by the Government, it omitted to mention blacklisting by public corporations/ PSUs as a bar, and it was realized that the petitioner – which emerged as the L[1] bidder, was actually blacklisted by public corporation/ PSU, namely, NHPC Ltd. The reluctance of the respondents to proceed with the tendering process and to award the tender to the petitioner, in this background, cannot be said to be unjustified. In the light of the said blacklisting, the respondents may not have derived the comfort which they were entitled to – considering the strategic importance of the Atal tunnel and, consequently, they sought to retrace their steps by cancelling the said tendering process on 10.06.2021. Guided by their said experience, they issued a fresh NIT on 11.06.2021 incorporating the term that the bidder should not have been blacklisted either by the Government or by any corporation/ PSU. The clause 6.4(d) contained in the earlier tender, which was cancelled, reads “He/ They have not been blacklisted by any Govt. Deptt (If yes, he will submit details and reasons).” The fresh condition incorporated in the tender issued on 11.06.2021 reads “He/ They have not been blacklisted/ banned by any Govt. Dept, Public Sector Undertaking/ Government of India undertaking/ enterprise (If yes, he will submit details and reasons).”

7. The submission of Mr. Singla, firstly, is that the incorporation of the new condition, as aforesaid, ousts the petitioner from the competition. He further submits that the petitioner has challenged its blacklisting by NHPC Ltd., and he informed us that the said petition is listed tomorrow for hearing before the Court. The petitioner has sought stay of the said blacklisting order in those proceedings issued by the NHPC Ltd. W.P.(C.) No. 6035/2021 Page 6 of[8]

8. So far as the first submission of Mr. Singla with regard to petitioner being ousted from competition due to introduction of the fresh clause 6.4(d), as aforesaid, is concerned, if the petitioner stands ousted from the competition in the fresh bidding process, so be it. The right of the respondents to alter, amend or lay down fresh terms and conditions in the fresh tendering process cannot be questioned. It cannot be said that the fresh condition is arbitrary, unreasonable or whimsical. The petitioner cannot insist that its bid in respect of the fresh tender should be entertained despite it not meeting the laid down criterion in the fresh bidding process. The petitioner cannot thrust itself upon the respondents despite it being blacklisted by a Public Sector Undertaking, such as the NHPC Ltd.

9. Mr. Singla has also submitted that the respondents have altered the definition of “similar works” in the new tendering process contained in Clause A[2].20. The comparison of the earlier and the current tender condition contained in Clause A[2].20 is as follows: “Page No., Clause No. Earlier Tender Conditions Current Tender Conditions Page 4 Clause A[2].20 Similar works means:- Firms should have experience of similar works of arresting of water leakages, contact grouting in road/ rail tunnel, dams. Hydro Power tunnel and subways. Also, firm should have sufficient experience/expertise in injection grouting techniques by usage of Similar works means:- Firms should have experience of similar works of arresting of water leakages, contact grouting in road/ rail tunnel, hydro power tunnel and subways. Also, firm should have sufficient experience/ expertise in injection grouting techniques by usage W.P.(C.) No. 6035/2021 Page 7 of[8] electric equipment. of electric equipment.”

10. Mr. Singla submits that in the earlier tendering process, which now stands cancelled, the requirement of experience in Dams, Hydro Power tunnel was incorporated by way of an amendment. Now, the respondents have excluded experience in Dams as a necessary qualification. He submits that this has been done with a view to bring in other bidders, who would not have the requisite experience to deal with the seepage works in Dams.

11. Since Mr. Singla has informed us that the petitioner’s challenge to the blacklisting order issued by the NHPC Ltd. is listed tomorrow before the Court, and in case the petitioner is able to secure an order either setting aside the said blacklisting order, or staying its operation, it would have a bearing on the petitioner’s eligibility to participate in the tendering process in question, we can safeguard the petitioner’s interest by directing the respondents not to proceed with the tender opening under the current process for the next five days.

12. The submission of Mr. Singla with regard to alteration of work experience requirement, in our view, has no merit. It is for the respondents to lay down the terms and conditions in that regard and it is not for us, in judicial review, to delve into the said aspect. The comparison of clause A[2].20 in the earlier and the current tender shows that they are more or less the same, except that the word “dam” stands excluded in the current tender condition. The said exclusion cannot be said to be arbitrary or irrational, W.P.(C.) No. 6035/2021 Page 8 of[8] considering the fact that the work in question involves treatment of seepage/ leakages in a tunnel, and not in a dam.