Apam Shimray vs The State of Manipur

N. Kotiswar Singh, J.—Heard Mr. Kh. Tarunkumar, learned counsel for the petitioner and Mr. M. Hemchandra, learned counsel for the respondent No. 2 as well as Mr. H. Debendra, learned Government Advocate for the State respondents.

In the present writ petition, the petitioner is challenging the award of work in respect of Package No. MNO 925 relating to construction of road from Rachal Khunou to Chingjaroi vide order dated 3.3.2014 as being contrary to the direction of the Gauhati High Court given in judgment and order dated 12.4.2011 passed in W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010 (Annexure-A/1).

According to the petitioner, the tender was floated in respect of the work for package No. 925 for construction of road under PMGSY and the work was awarded in favour of the respondent No. 3 vide order No. E-TENDER/2010-MSRRDA/VII/UKL/P/925/329 dated 14.10.2014. However, the said award of work in favour of the respondent No. 3 was challenged in two writ petitions being W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010. The issue raised in the said two writ petitions was that the respondent No. 3, who was awarded the said work for Package No. MNO 925 did not fulfil the conditions as mentioned in the Standard Bidding Document under which it was provided that any tender which bidded less than -5 of the tender amount shall not be considered for award of the contract. That aspect was considered by the Hon''ble Gauhati High Court in the aforesaid judgment and order dated 12.04.2011 and the Hon''ble Court gave the finding that awarding of the contract in favour of the respondent No. 3 on 14.10.2010 cannot stand scrutiny of the Court as he had bidded below the permissible limit of -5 of the tender amount, and accordingly, the said award dated 14.10.2010 was quashed as mentioned in para No. 17 of the said judgment and order. After quashing of the said award, the Hon''ble Court gave the following directions for being complied for completion of the work in respect of the said Package No. MNO 925 as below:-

"[18] After quashing the impugned order/communication dated 14.10.2010 awarding the contract in favour of the respondent No. 3, the next question for consideration is who is to be awarded the contract for the remaining amount of work Package No. 925. Having considered the cases in its entirety and also the claim of the respondent No. 6 in W.P. (C) No. 678 of 2010, the respondents No. 1 and 2 are directed either to award the contract by floating a new tender for the remaining unexecuted works or to award the contract to any of the bidders, who is found to have scored more marks in technical bid than the petitioners before this Court and the decision, in this regard, to choose either of the directions made hereabove, is left to the wisdom of the official respondents. The two writ petitions, namely, W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010 are disposed of with the observations and directions made hereinabove. There shall be no order as to costs."

Pursuant to the said direction, the work has been again awarded to the respondent No. 3, which according to the petitioner, is contrary to the directions of the Hon''ble Gauhati High Court. According to the petitioner, the directions contained in the said judgment and order is very clear that in respect of the remaining unexecuted works, the authorities were either to float a new tender or to award the contract to any of the bidders who is found to have scored more marks in technical bid (than the petitioners in the said two writ petitions) and it was left to the wisdom of the State authorities to adopt any of the aforesaid methods. According to the petitioner, since the authorities did not opt for the process of floating new tender, they were under obligation to award the contract to any of the bidders who is found to have scored more marks in the technical bids than the petitioners in the said two writ petitions. According to the present petitioner, the first highest scorer in the technical bid was Shri Adai Phaomei, who, however, waived his right to be considered in favour of the respondent No. 3, which is also not disputed by the authorities. Though the second highest bidder in the technical bid was the respondent No. 3, his case could not have been considered as he has bidded less than the permissible limit of -5 because of which the High Court in W.P.(C) No. 210 and W.P.(C) No. 777 of 2010 had set aside the decision to award the contract in his favour, and as such, his case could not have been considered. Therefore, in the present situation where the first and second highest bidders in the technical bids could not be considered, naturally, the petitioner who had obtained the 3rd highest in the technical bid, ought to have been offered the work order which has not been done. On the contrary, the authorities had awarded the said work to the respondent No. 3 again who had been disqualified by the Court as mentioned above. Accordingly it has been submitted that the award of the contract to the respondent No. 3 is plainly illegal being violative of this Court''s order and contrary to the terms of the Standard Bidding Document.

The respondent No. 2 filed his affidavit-in-opposition. The stand of the respondent No. 2 is that no wrong had been committed by issuing the award in favour respondent No. 3 in as much as he was found to be eligible candidate after examining the direction of the High Court. It has been stated that the authorities did not opt for the first option of issuing a fresh tender in view of the fact that such option would entail delay in the execution of the work as these works are time bound and any delay would not only have resulted further delay in implementation of the work but also lead to escalation of costs. Therefore, the authorities had opted for the second option. However, while considering the second option, it was found that the none of the tenderers except the respondent No. 3 had deposited the Earnest Money Deposit (EMD) as he did not withdraw the EMD whereas all the remaining tenderers had withdrawn the EMD. It has been stated that as per the terms and conditions of the SBD, no tender could be awarded to any person who had not deposited EMD and since the petitioner did not deposit the EMD till the filing of the writ petition, the question of awarding the contract work to the petitioner did not arise. On the other hand, since the higher scorer, Sri Adai Phaomei had relinquished his right in favour of the respondent No. 3 and as the respondent No. 3 was only the tenderer who had deposited the Earnest Money Deposit (EMD), he was, accordingly, given the contract. Accordingly, it has been submitted that the authorities had duly complied with the directions of the Gauhati High Court and no fault could be found with the award of the work in favour of the respondent No. 3.

Thus, while the petitioner contends that awarding of work in favour of the respondent No. 3 is contrary to the direction of the Court issued in W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010 as the respondent No. 1 was declared to be disqualified for award of any contract, it is the case of the respondents that since the other bidders including the petitioner had withdrawn their Earnest Money Deposits which is a pre-condition for consideration of any award of contract, the question of awarding the contract in favour of the petitioner does not arise. It has been contended by the Respondents that since it was found that the respondent No. 3 was the only bidder, who did not withdraw the Earnest Money Deposit and since his rate in the technical bid was found to be higher than the petitioners in the aforesaid writ petitions, i.e. W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010 and as the authorities decided not to float new tender so as avoid any delay in the execution of the work and escalation of costs, the work was ultimately awarded to the respondent No. 3.

Heard the learned counsel for the parties and also perused the materials on records.

In order to appreciate the respective rival contentions of the parties, a proper understanding of the direction of the High Court issued in W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010 vide order dated 12.4.2011 would be necessary.

The said decision of the Court rendered on 12.4.2011 specifically considered the issue regarding the award of contract in respect of Package No. MNO 925 (Rachal Khunou to Chingjarol), which is also the package involved in the writ petition. In the said decision, the Hon''ble Court had given the finding that the present respondent No. 3, who was also the respondent No. 3 in the said two writ petitions and earlier awarded the contract, had quoted below the lower limit of-5 and as such, the Government could not have awarded the contract in absence of invoking the relevant provisions of the Standard Bidding Document by providing relaxation, more particularly, Clause 30.3 of the Standard Bidding Document. The Court also observed that there is nothing in the Government file to indicate that Clause 30.3 had been invoked by the official respondents and accordingly, in para No. 17 of the judgment and order, the Court held that since the financial bid of the respondent No. 3 was lower than the limit prescribed, the impugned award/communication dated 14.10.2010 issued in favour of the respondent No. 3, namely, Jesse Kamei and impermissible and accordingly quashed the said communication. Para 17 of the said judgment and order is reproduced hereinbelow for better appreciation:-

"[17] From the above narration of facts and discussions made hereinabove, it appears that the decision taking process leading to the award of contract to the respondent No. 3, namely, Jesse Kamei, suffers from arbitrariness, non-application of mind, mis-interpretation and non-consideration of the relevant clauses of SBD. Accordingly, the financial bid of the respondent No. 3, being lower than the lower limit prescribed in -5, cannot stand the scrutiny of this Court, the impugned award/communication dated 14.10.2010 is hereby quashed."

Further, the Court also held that whenever there was a tie among the bidders, the provisions of Clause 30.2 to the Standard Bidding Document are to be invoked for the purpose of finalisation of the contract. Accordingly, the Court observed in Para No. 16 of the judgment and order that in case there is a tie in the financial bid, the highest scorer in the technical bid has to be considered for award of the contract as held in para No. 16, which is reproduced hereinbelow:-

"[16] Applying the reasoning adopted by this Court as well as the Division Bench, as referred to above, which was followed in other subsequent cases, this Court is of the considered view that in case of disqualification of L-1 bidder, i.e., respondent No. 3, for being lower than the lower limit prescribed by the authority for -5, the next to be considered shall be from amongst the L-2 group. In case the bidders in L-2 group are tied in the financial bid, the highest scorer in technical bid has to be considered for award of the contract and the aforesaid view is also the contention of the Government in their affidavit filed before the Court.

Thereafter, the Hon''ble Court after quashing the order dated 14.10.2010 issued in favour of the respondent No. 3 for award of the contract in respect of the Package No. MNO 925, proceeded to dispose of the writ petitions with a directions to the respondents authorities either to award the contract by floating a new tender for the remaining unexecuted works or to award the contract to any of the bidders, who is found to have scored more marks in technical bid than the petitioners in the said writ petitions and it was left to the wisdom of the official respondents to choose either of the aforesaid directions as ordered in para No. 18 of the said judgment and order as quoted in para 2 of this judgment.

From the above discussion of the judgment and order dated 12.4.2011, the following aspects emerge:

(i) The Court found that as the bid of the respondent No. 3, Jesse Kamei was below the lower limit prescribed by the authority, he could not have been awarded the contract and as such, the Court quashed the work order dated 14.10.2010 issued in favour of the respondent No. 3 as mentioned in para No. 17 of the judgment and order;

(ii) Two options were available to the authorities to proceed with the award of contract in respect of the remaining unexecuted works, viz.,

a) either to award the contract by floating a new tender

or

b) by awarding the contract to any of the bidders, who is found to have scored more marks in the technical bid than the petitioners. The petitioners therein were one Shri Sheryo Hungyo and Shri Th. Shongvah.

Since the respondent No. 1 had stated that in order to avoid any further delay in the execution of the work and also to avoid escalation of costs, which may result due to floating of fresh tender, the authorities opted not to choose the first option and opted to go for the second option available i.e. to award the contract to any of the bidders who is found to have scored more marks in the technical bid than the petitioners in the said writ petitions. As we proceed, we may mention that the Hon''ble Court in para No. 12 of the said judgment and order dated 12.4.2011 had reproduced the relative rank/marks obtained in the technical bid of the bidders, which is again reproduced herein below:

Therefore, since the second option was adopted by the State authorities, the bidder who had scored more marks in the technical bid than the petitioners, namely, Sri Sheryo Hungyo and Th. Shongvah have to be identified; i.e., those bidders who had scored more than 96 marks as Sheryo Hungyo scored only 93 marks whereas Th. Shongvah scored 96 marks. In other words, the bidders, who obtained more marks in the technical bid than the said two petitioners were 1) Adai Phaomei, 2), Jesse Kamei, 3) Apam Shimray 4) T. Lala Vaiphei, 5) Aring Leisan 6) Pakasana Hijam and 7) Vareiyo V.S. The highest scorer amongst them is Sri Adai Phaomei, who scored 103 mark in the technical bid. However, it has been contended by the State respondents that though Adai Phaomei scored highest marks in the technical bid, he relinquished his right to be considered in favour of the present respondent No. 3 and as such, his case was not considered.

According to the State respondents, after the said Adai Phaomei had relinquished his right to be considered, the next higher scorer was the respondent No. 3, Jesse Kamei who scored 102 mark in the technical bid. Though the earlier decision to award the contract in favour of the Jesse Kamei was quashed by the Court, it was found that it could not be awarded to any of the remaining bidders including the present petitioner who scored more marks in the technical bid because all the bidders except Jesse Kamei had already withdrawn their Earnest Money Deposit. Since the deposit of Earnest Money Deposit was a prerequisite for award of contract, the authorities could not consider awarding the contract to any of the remaining bidders including the petitioner. On the other hand, since the respondent No. 3, Jesse Kamei was found to have kept his Earnest Money Deposit intact, in absence of any other qualified bidders for their lack of Earnest Money Deposit, the work was ultimately given in favour of the Jesse Kamei, who also scored the second highest marks in the technical bid.

Therefore, this Court has to decide whether award of contract in favour of the respondent No. 3 in the light of the decision of the Hon''ble Court passed in W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010 on 12.4.2011 can be sustained or not. This Court has to examine whether the procedure adopted by the authorities in awarding contract in favour of the respondent No. 3 by resorting to the second option is permissible or not. The second option, as quoted above, provides for award of contract to any of the bidders who was found to have scored more marks in the technical bid than the petitioners in the said two writ petitions. As discussed above, one Adai Phaomei was the highest scorer in the technical bid who had scored more than the petitioners therein. Therefore, in normal circumstances, he should have been the preferred bidder for award of contract. However, as claimed by the respondents authorities that since he relinquished his right to be considered in favour of the respondent No. 3, his case was not considered. Therefore, the second offer would go to the next highest scorer in the technical bid, which was respondent No. 3. However, the question arises as to whether the respondent No. 3 inspite of being the second highest bidder in the technical bid and having scored more marks than the aforesaid two writ petitioners, would be entitled to be awarded this contract in the teeth of the finding of the Court earlier that he having quoted below the lower limit of (-5) and the earlier award of contract in his favour being quashed by the Court, could have been awarded again? This Court is of the view that such a course of action in awarding of contract in favour of the respondent No. 3 could not have been adopted. This Court is of the view that if the Court had already found the financial bid of the respondent No. 3 be not acceptable, being lower than the prescribed limit and the work order issued in his favour quashed by this Court in the earlier writ petitions, he could not have been awarded work again. Once a decision to award contract in favour of a bidder had been found to be quashed as not acceptable being not in conformity with the rules, this Court does not understand how the same person could be awarded the same work without any change in the financial and technical bids, unlike in the case of floating of new tender where there would be obviously different financial and technical bids. Therefore, if the Court had found the financial bid of a bidder (Respondent No. 3) unacceptable and not in accordance with the Standard Bidding Document, because of which the award issued earlier in his favour was quashed, this Court is of the view that the same person could not have been awarded the same work under the unchanged financial and technical bids.

That apart, the stand of the respondents authorities that all the bidders except the respondent No. 3 had withdrawn their Earnest Money Deposit and as such, they stood disqualified of being considered for award of contract, does not seem to be sound for the following reasons:-

(a) The issue regarding withdrawal of Earnest Money Deposit had been already dealt with by the Court earlier in the said judgment and order dated 12.4.2011 passed in W.P. (C) No. 678 of 2010 and W.P. (C) No. 777 of 2010. While disposing of the said two writ petitions, the Court had already discussed that the present petitioner,(Apam Shimray), Shri Vareiyo VS, Shri Adai Phaomei, Shri Aring Leisan and Shri Pakasana Hijam had already withdrawn their Earnest Money Deposit but it was observed that withdrawal of Earnest Money Deposit of Shri Vareiyo VS and the petitioner on 19.11.2010 and 8.11.2010 after the contract was awarded on 14.10.2010 to the respondent No. 3 and as such, their cases could not have been ignored for consideration of award of contract on or before 14.10.2010. In this regard, para No. 15 of the said judgment and order dated 12.4.2011 may be referred to, which is reproduced hereinbelow:-

"[15] An attempt has been made to impress the Court by the petitioner in W.P. (C) No. 777 of 2010 that earnest money deposited by Shri Vareiyo Vs, Shri Apam Shimray, Shri Adai Phaomei, Shri Aring Leinsan and Shri Pakasana Hijam hade been withdrawn. It is seen from the record that withdrawal of the earnest money by Shri Vareiyo Vs and Shri Apam Shimray was on 19.11.2010 and 08.12.2010 respectively i.e., after the contract was already awarded on 14.10.2010 to respondent No. 3 and as such, their cases could not have been ignored for consideration of award of the contract on or before 14.10.2010. It is not in dispute at the Bar that similar question relating to determination of contract in case of a tie in financial bid came up for consideration in Misc. Case No. 329 of 2010 arising out of W.P. (C) No. 639 of 2010 wherein this Court held that whenever there was a tie among any of the categories either in L-1 or L-2 or L-3, etc., the provisions of Clause 30.2 to the SBD was to be invoked for the purpose of finalisation of the contract and there was no provision in the SBD or any other instructions to reject any bidder just because there was a tie. The aforesaid reasoning adopted by this Court was upheld by a Division Bench in W.A. No. 71 of 2010, which was disposed of on 21.01.2011. Though the aforesaid order was passed by this Court in the case of vacating an interim order and upheld by the Division Bench, I do not find any justification why the same analogy should not be applied in the instant case inasmuch as the judicial interpretation rendered in the aforesaid cases appears to be sound and reasonable."

The Court was thus mindful of the fact that though the petitioner and other bidders had withdrawn their Earnest Money Deposits, such withdrawal was prior to the award of contract in favour of the respondent No. 3 on 14.10.2010 and as such, non-consideration of the petitioner and other bidders, namely, Vareiyo V.S. was not found proper. It may be also noted that inspite of noticing this fact of withdrawal of Earnest Money Deposit, the Court issued the directions as mentioned in para No. 18 of the judgment and order which included the options to award the contract to any of the bidders who is found to have scored more marks in the technical bid than the petitioners therein. Therefore, the cases of the bidders could not have been ignored merely because of the fact that they had withdrawn their Earnest Money Deposits. Though the deposit of Earnest Money is an essential part of any tender or award of contract, in the peculiar facts and circumstances of the cases, the withdrawal of Earnest Money Deposit by any of the bidders could not be the reason for not considering their cases in as much as the bidders were not aware as to which of the two options the authorities would invoke for the purpose of awarding the contract for the remaining unexecuted works. The authorities could have given an opportunity to all the eligible bidders in terms of the second option before considering their cases as in the case of respondent No. 3. It has to be noted that the Earnest Money Deposit in respect of respondent No. 3 was by virtue of the award of contract in his favour vide order dated 14.10.2010 which was ultimately quashed by the Court and not for the purpose of reconsideration by the authorities by resorting to the second option. The deposit of Earnest Money by the respondent No. 3 is not by way of any conscious decision to deposit the Earnest Money Deposit for the purpose of reconsideration after adopting the second option by the authorities but by way of default. Therefore, the Earnest Money Deposit made by the respondent No. 3 for the purpose of award of contract at the first instance which was ultimately quashed by the Court, could not be a reason for stealing a march over other bidders who were not aware as to which of the two options the authorities would invoke for the purpose of considering of award of contract in respect of the remaining unexecuted work. Therefore, this Court is of the view that the authorities ought to have given an opportunity to all the bidders in terms of direction in para 18 of the judgment and order dated 12.4.2011 by way of directing them to submit the Earnest Money Deposit for the purpose of consideration of award in terms of the directions of the Court dated 12.4.2011.

There is also another aspect which this Court cannot ignore. It was the stand of the authorities that they did not consider offering to Adai Phaomei who scored highest marks in the technical bid only because of the reason that he had surrendered his right to be considered in favour of the Jesse Kamei. The question of surrendering the right by Adai Phaomei in favour of respondent No. 3, Jesse Kamei would arise only when Adai Phaomei had a vested right in him. If it is also the stand of the State authorities that by non-deposit of the security deposit, all the bidders except Jesse Kamei had forfeited their rights to be considered for award of contract, in that case, Adai Phaomei would also equally suffer from the same disqualification in as much as he also had already withdrawn the Earnest Money Deposit and therefore, the question of surrendering of right by an uneligible bidder does not arise. The state authorities seem to have taken a contradictory stand. While denying the rights of consideration of the bidders who had withdrawn their Earnest Money Deposit, the same standard was not applied in respect of Adai Phaomei who had withdrawn his Earnest Money Deposit. His surrendering in favour of the respondent No. 3 has been cited as a justification for awarding the contract in favour of the respondent No. 3.

Therefore, on consideration of materials on record and also for the reasons discussed above, this Court comes to the conclusion that since the bid of the respondent No. 3 was found to be unacceptable by the Court on earlier occasion in respect of the same work, because of which the award of contract vide order/communication dated 14.10.2010 had been set aside, he could not have been awarded the same work without any change in the bids.

This Court considers the disqualification of all bidders including the petitioner on the ground that they had withdrawn their Earnest Money Deposit and had not deposited the same, as arbitrary and unreasonable as the bidders ought to have been given an opportunity to re-submit Earnest Money Deposit for the purpose of reconsideration of award of contract. The deposits of Earnest Money by the respondent No. 3 was not a conscious decision of the respondent No. 3 but by way of default deposit as a continuation of the process of the earlier work order vide order dated 14.10.2010 which was quashed and hence, could not have been given an advantage over the other bidders. There is another reason why this Court finds the award of the work contract in favour of the Respondent No. 3 unacceptable. If the remainder bidders have been disqualified on the ground that they had not deposited their Earnest Money Deposit, which is a prerequisite for consideration of award of contract, how could a person (the respondent No. 3 here) who had been already disqualified for having granted less than permissible which is contrary to the SBD, become qualified? The disqualification of the Respondent No. 3 for having quoted less than the permissible limit of -5 of the tender amount remains. It cannot be improved by submission of Earnest Money Deposit by him or non submission of EMD by the other bidders. Even if the Respondent No. 3 is deemed to have deposited the EMD, he is already disqualified by virtue of quoting less than the permissible limit.

Accordingly, this Court is of the opinion that award of contract in favour of the respondent No. 3 again by order dated 3.3.2014 inspite of the same being not allowed by the Court on earlier occasion as being disqualified, is not permissible. The authorities were to select from amongst the bidders who were found to have scored more marks in the technical bid than the petitioners in the said two writ petitions in view of the stand taken by the authorities that Adai Phaomei had already relinquished his right to be considered in favour of the respondent No. 3, the State respondents are to offer the work to the next highest bidder in the technical bid calling upon them to deposit the Earnest Money for due execution of the work.

In the result, for the reasons discussed above, the writ petition is allowed. The impugned work order dated 03.03.2014 issued in favour of the respondent No. 3 for Package No. MNO 925 (Rachal Khunou to Chingjaroi) is set aside as the Respondent No. 3 had been already disqualified by an order dated 12.4.2011 of the High Court passed in W.P.(C) No. 678 of 2010 and W.P.(C) No. 777 of 2010. The respondents authorities are directed to issue a fresh work order in favour of the bidder who scored more marks in the technical bid than the petitioners in W.P.(C) No. 678 of 2010 and W.P.(C) No. 777 of 2010, other than the Respondent No. 3, on such deposit of Earnest Money Deposit by the bidder as required under the rules within a period of 2(two) weeks from today. The authorities are to take into consideration that Mr. Adai Phaomei had already relinquished his right in favour of the Respondent No. 3 at the time of reconsideration.