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Himachal Pradesh High Court · body

2025 DAILYLAW 3635 (HP)

Naresh Kumar Vij v. State of H. P

2025-11-21

G S Sandhawalia, Jiya Lal Bhardwaj

body2025
Judgment : Jiya Lal Bhardwaj, J. The challenge in the present Writ petition is to the office order dated 09.07.2025, passed by respondent No.4, who has communicated the decision taken by respondent No.2, whereby the tender process issued for up-gradation of Tikkar Jarol Gahan Nankhari Khamadi Road Km.0.000 to 52.000 has been returned unapproved, though the petitioner was the lowest bidder and L-1 in the financial bid. 2. Shorn of unnecessary details, the key facts for adjudication of the issue in the present petition are that the respondents-State had invited tenders for the aforementioned work vide tender No.PW/RMP/TA/2024-15561-62 dated 25.03.2025. Thereafter, respondent No.2 issued corrigendum(s) and dates were extended to submit the applications till 09.05.2025. 3. The eligible persons as per the conditions of tender document applied for award of the aforementioned work and since the petitioner was eligible, he too applied well before the last date fixed to receive the applications. 4. As many as nine bidders including the present petitioner participated in the bid process and out of them, only five bidders had qualified in the technical bid. Since the petitioner was qualified in the technical bid, he was held responsive. Thereafter, the respondents-State opened the financial bids on 10.06.2025 and the petitioner was found to be the lowest bidder (L-1) and the amount quoted by him was 3.91% above the amount put to the tender. 5. The total amount for execution of the work was Rs.52,40,32,232/- and the petitioner being the lowest bidder had quoted an amount of Rs.54,45,21,892/-, which is 3.91% above the amount put to tender. 6. However, when the petitioner despite being found lowest bidder was not awarded the contract, he made a representation before respondent No.2 on 23.06.2025 to expedite the process of awarding him the tender, which was duly received by the authority concerned, but instead of accepting his request, the entire tender process was cancelled and fresh tenders were ordered to be called vide office order dated 09.07.2025, which is under challenge in the present petition. 7. The grievance of the petitioner as highlighted by Mr.R.K Bawa, learned Senior Advocate, duly assisted by Mr.Nimish Gupta, Advocate, is to the effect that the respondent- State has adopted the CPWD Works Manual, 2019 and other publications of CPWD in Himachal Pradesh Public Works Department. 7. The grievance of the petitioner as highlighted by Mr.R.K Bawa, learned Senior Advocate, duly assisted by Mr.Nimish Gupta, Advocate, is to the effect that the respondent- State has adopted the CPWD Works Manual, 2019 and other publications of CPWD in Himachal Pradesh Public Works Department. As per revised point No.12 of the salient features of CPWD Works Manual alongwith other publications in HPPWD, adopted by the respondent-State, the tenders will be invited on the basis of working estimates approved on market rates and shall be awarded to the lowest bidder without any negotiation of his quoted rates, if the tendered amount is within 5% of the amount put to tender. 8. The learned Senior Counsel has laid emphasis on the letter dated 07.10.2021 addressed by the Principal Secretary (PW) to the Government of Himachal Pradesh to the Engineer-in-Chief, HPPWD, wherein point No.12 has been incorporated. He contended that since the rates quoted by the petitioner is within the permissible limits of 5% of the amount put to tender, the action of the respondents-State to not approve the tender of the petitioner and cancel the process is arbitrary and unreasonable inasmuch as no cogent reasons have been assigned to recall the fresh tender. 9. The learned Senior Counsel has also drawn attention of this Court on the various contracts having been awarded by the respondents-State in the past, where despite quoting more than the permissible limits of 5% of the amount put to tender by the lowest tenderer, the works have been awarded to the lowest tenderer after accepting the financial bids, being L-1. 10. During the course of arguments, the learned Senior Counsel has referred to office order dated 04.03.2020, whereby a contract has been awarded to one Sh. Ranjeet Singh, Contractor, who had quoted the amount, which was 35.33% above the amount put to tender being the lowest tenderer (L-1). The learned Senior Counsel also referred to another office order dated 14.10.2024, whereby the work has been awarded to M/S P.K. Construction, who had quoted an amount, which was 4.79% above the amount put to tender. 11. Ranjeet Singh, Contractor, who had quoted the amount, which was 35.33% above the amount put to tender being the lowest tenderer (L-1). The learned Senior Counsel also referred to another office order dated 14.10.2024, whereby the work has been awarded to M/S P.K. Construction, who had quoted an amount, which was 4.79% above the amount put to tender. 11. Since in the case of the petitioner, he being the lowest tenderer, had quoted the amount less than 5% of the amount put to tender, the action of the respondents-State not to approve his financial bid, being the lowest tenderer and further ordering issuance of fresh tender is arbitrary, unreasonable and violative of Article 14 of the Constitution of India. 12. On the other hand, the learned Advocate General representing the respondents-State has supported the decision taken by the authorities in not accepting the financial bid of the petitioner though he was the lowest tendered (L-1) and ordering issuance of fresh tender. 13. The learned Advocate General has taken the Court through the decision taken by the respondents in the meeting held on 08.07.2025 in the chamber of Chief Engineer (SZ) HPPWD, Shimla and contended that the decision not to accept the tender, which weighed with the committee was that out of nine bidders, four bidders did not submit the documents physically and out of five number of bidders, only four were found responsive and all four responsive bidders had quoted their rates above the amount put to tender and since the rates quoted were on higher side, it indicated that the bidders may have formed a cartel to avoid competition in the bids. Therefore, the possibility to cause financial loss to the State cannot be ruled out. 14. Further he has submitted that the committee has also observed that in the current financial year, most of the tenders received and awarded were below the amount put to tender, whereas in the instant case, the amount of tender quoted by the petitioner being the lowest tenderer is 3.91% above the amount put to tender. Therefore, keeping in view the above factors, the committee members have unanimously decided that the tender process be cancelled in the interest of the State and fresh tender may be invited by following the guidelines issued by the Government. 15. Therefore, keeping in view the above factors, the committee members have unanimously decided that the tender process be cancelled in the interest of the State and fresh tender may be invited by following the guidelines issued by the Government. 15. We have heard the learned Senior Counsel for the petitioner as well as the learned Advocate General for the respondents-State and also perused the material placed on record. 16. It is not in dispute that initially the tenders were opened on 10.02.2025 for the very same work in which eight bidders had participated and the said process was cancelled since as per the bid documents, the bid opening was wrongly mentioned at Superintending Engineering, HPPWD Bilaspur and the quantity/units of some items in uploading BOQ were wrong. In the second tender, which is the subject matter of the present petition, the total nine numbers of bidders had participated in the online bidding process and out of them, four numbers of bidders were found responsive as evident from Annexure P-2. It is also not in dispute that the work has been sanctioned by the Government of India for an amount of Rs.54.87 Crores. After sanctioning the amount by the Government of India, respondent No.2 has approved the work vide letter dated 29.11.2024 for an amount of Rs.52,40,32,232/-. The DNIT has been approved by respondent No.2 vide letter dated 16.12.2024 amounting to Rs.52,40,32,232/- only. It is also not in dispute that when the financial bid was opened on 10.06.2025, the petitioner being the lowest bidder (L-1) had quoted an amount of Rs.54,45,21,892.87/-, which is 3.91% above the amount put to tender. 17. As per the proceedings of the committee held on 08.07.2025, the present market rate of the work comes out to Rs.53,33,60,006/-, which is 1.78% above the DNIT amount put to tender. The quoted amount of lowest bidder is Rs.54,45,21,892.87/-. The A/A & E/S of the above is Rs.54.87 crores. All these facts have not been disputed by the respondents while filing reply to the petition. Not only this, the respondents have also not disputed the factum that in the past, the tenders were accepted of the lowest tenderer, whose amount was even more than 5% of the amount put to tender. 18. All these facts have not been disputed by the respondents while filing reply to the petition. Not only this, the respondents have also not disputed the factum that in the past, the tenders were accepted of the lowest tenderer, whose amount was even more than 5% of the amount put to tender. 18. When the matter was listed before this Court on 15.07.2025, this Court had passed an order that the respondents-State are at liberty to float the fresh tender, however, the same shall not be finalized without the leave of the Court. Thereafter a detailed order was passed on 05.09.2025, wherein it was noticed that the tender was firstly called on 01.01.2025, which was opened on 10.02.2025 and was cancelled as the documents given and the quantity/units of some items in the uploading BOQ were wrong. Thereafter on 25.03.2025, the tender was called for the same purpose and the petitioner had quoted an amount of Rs.54,45,21,892.87/-, which is 3.91% more of the amount put to tender and this Court had given a proposal to the respondents-State to call the petitioner for negotiations and clarifications. 19. In pursuance to the order dated 05.09.2025, the petitioner was called for negotiations and he submitted his revised offer of Rs.52,27,41,017/-, which is 4% (i.e.Rs.2,17,80,875/-) below the original quoted bid amount by him. The revised proposal is also Rs.12,91,215/- i.e. 0.25% below the amount put to tender and also below the sanctioned amount of Rs.54.87 crores. However, when the matter was listed before the Court on 25.09.2025, the counsel representing the respondents-State had sought time to seek necessary instructions regarding the authority, which has to pass the appropriate order, in view of the communication dated 18.09.2025 issued by respondent No.2 to the learned Advocate General. However, later on instead of taking a call in the matter, the counsel representing the respondents-State argued the matter and submitted that since it is the prerogative of the State to cancel the tender, the decision arrived at can neither said to be unreasonable nor arbitrary. 20. However, later on instead of taking a call in the matter, the counsel representing the respondents-State argued the matter and submitted that since it is the prerogative of the State to cancel the tender, the decision arrived at can neither said to be unreasonable nor arbitrary. 20. The learned Senior Counsel representing the petitioner has placed heavy reliance upon the judgment(s) passed by the Hon’ble Supreme Court in Sterling Computers Limited versus M/s M&N Publications Limited and others, (1993) 1 SCC 445 ; Raunaq International Ltd. vs. I.V.R. Construction Ltd. and others , (1999) 1 SCC 492 ; Tata Cellular vs. Union of India , (1994) 6 SCC 651 ; Air India Ltd. vs. Cochin International Airport Ltd. and others , (2000) 2 SCC 617 ; Association of Registration Plates vs. Union of India and others , (2005) 1 SCC 679 ; Jagdish Mandal vs. State of Orissa and others , (2007) 14 SCC 517 ; Michigan Rubber (India) Limited vs. State of Karnataka and others, (2012) 8 SCC 216 and contended that since the action on the part of the respondents-State not to approve the financial bid of the petitioner, being the lowest tenderer (L-1), is arbitrary and unreasonable. He further contended that the impugned order deserves to be quashed and set aside and the financial bid quoted by the petitioner being lowest tenderer i.e. L-1 may be accepted and the work may be awarded to him. 21. The learned Senior Counsel has laid much emphasis on the judgment rendered in Jagdish Mandal’s case (supra), wherein it has been held that the judicial review of administrative action is intended to prevent arbitrariness and unreasonableness and in the present case, despite the fact that the rates quoted by the petitioner were within the permissible limits; and further he has lowered down his rates to execute the work after negotiation, which is even less than the amount put to tender, the action of the respondents-State is arbitrary and unreasonable. He has referred to paragraph 22 of the aforesaid judgment, which reads as under:- “Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. He has referred to paragraph 22 of the aforesaid judgment, which reads as under:- “Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. 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 decision relating 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 interest at 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 with imaginary 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 Whether the process adopted or decision made 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. If the answers are in the negative, there should be no interference under Article 226. Cases involving black- listing 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.” 22. The learned Senior Counsel has further argued that since the respondent-State has cancelled the tender process arbitrarily, it will not only affect the petitioner, but the public interest will also be affected for the reasons that the road in question will not be completed in a time bound period and further there would be escalation in the prices in case fresh tender process is undertaken. 23. The learned Senior Counsel has also emphasized on the award of contracts in the case of other contractors, where even after the rates quoted were beyond the permissible limits, the respondents-State had accepted those tenders only for the reason that they were the lowest tenderer like the petitioner being L-1. However, in the case of the petitioner though the rates quoted by him are less than the permissible limits and further even after the directions given by this Court, the petitioner had agreed to execute the work by reducing the rates, which are 4% below the original quoted bid amount, as evident from communication dated 18.09.2025, there is no justification on the part of the respondents-state to not accept the financial bid of the petitioner and further order to initiate the fresh process by inviting the tender for the same work again. 24. On the other hand, the learned Advocate General has pressed into service the judgments passed by the Hon’ble Supreme Court in Jagdish Mandal’s case (supra); Uflex Limited vs. Government of Tamil Nadu and others , (2022) 1 SCC 165 ; N.G. Projects Limited vs. Vinod Kumar Jain and others , (2022) 6 SCC 127 and contended that since the committee has taken a conscious decision not to accept the financial bid and order for issuance of fresh tender, in which the petitioner can also participate, this Court may not like to interfere with the said decision. 25. 25. The learned Advocate General has also relied upon the judgment passed by the Hon’ble Supreme Court in Principal Chief Conservator of Forest and others vs. Suresh Mathew and others , 2025 SCC online SC 933 and submitted that the respondent-State has a right to cancel and call a fresh tender, if the same is in the nature of protecting the financial interest of the State. He has also stressed that the scope of interference is very limited in tender matters as held by the Hon’ble Supreme Court of India. The learned Advocate General has further contended that in the present case, the committee has observed in the proceedings dated 08.07.2025 that there may be cartelization and further in the current financial year, most of the tenders were received and awarded below the amount put to tender. He has further submitted that there was not a healthy competition amongst the bidders and thus, the State Government has rightly not approved the financial bid of the petitioner and ordered for calling a fresh tender. 26. In the present case, the documents placed on record by the petitioner clearly show that the petitioner after being successful in the technical bid, was found lowest bidder in the financial bid, wherein the rates quoted by him were less than 5% than in the past. The tender invited by the respondent- State was cancelled by the State Government on 10.02.2025 for the very same work for some other reasons. The petitioner after passing of the order by this Court on 05.09.2025, had participated in the negotiation process and quoted even the rate, which is 4% below the original quoted bid by him and less than the amount put to tender by 0.25% and also below the sanctioned amount of Rs.54.87 crores as quoted in the letter dated 18.09.2025, issued by respondent No.2. Therefore, there is no justification on the part of the respondents-State to not approve the financial bid of the petitioner especially when in the case of other contractors, who had even quoted more than 5% of the amount as per the amount of the tender document, the contracts have been awarded to them, as clear from the letter(s) of award of contract mentioned above. Thus, the action of the respondents-State is totally arbitrary and unreasonable and calls for interference. Thus, the action of the respondents-State is totally arbitrary and unreasonable and calls for interference. Even for the work awarded for special repairs on Theog-Kotkhai Road on NH-705, the amount quoted by the lowest bidder was 3.83% above the estimated civil project cost and the respondents-State has awarded the contract to M/s BLN INFRA Pvt. Ltd., as clear from award of letter dated 26.04.2025, issued by the Chief Engineer (NH), HPPWD, Shimla-2 at page 157 of the paper book. 27. No doubt, this Court while exercising the powers under Article 226 of Constitution of India has a limited role of judicial review and cannot sit as a Court of appeal. However, at the same time, this Court cannot ignore the fact that the petitioner, who has quoted the lowest amount in the tender and found as lowest tenderer (L-1), as per the respondents-State in the financial bid and further his rates are less than the 5% amount put to tender, the reasons assigned by the committee are not sound inasmuch as it is the case of arbitrariness on the part of the authorities. Once in other cases, the State functionaries have awarded the contracts to the tenderers, who had quoted the amount more than the permissible limits, it does not lie in their mouth to contend that there may be cartelization, when no material was before them. Even as per their own documents and the averments made in the reply, initially eight numbers of bids were received. Later on, nine numbers of bidders had participated in the online bidding process, out of which, five numbers of bidders were qualified for technical evaluation and one bidder was declared as non- responsive and remaining four bidders were technically responsive, whose financial bids were opened on 10.06.2025. Since nine persons had participated in the tender process, out of which, four were technically qualified and thereafter when the financial bids were opened, the petitioner was found the lowest tenderer i.e. L-1 thus, it can not be said that there may have been cartelization. 28. The Superintending Engineer, who has been arrayed as respondent No.3 had sent the matter to respondent No.2 for according approval in favour of the petitioner, as evident from perusal of noting dated 12.06.2025, which is based on the financial bids opened on 10.06.2025. 28. The Superintending Engineer, who has been arrayed as respondent No.3 had sent the matter to respondent No.2 for according approval in favour of the petitioner, as evident from perusal of noting dated 12.06.2025, which is based on the financial bids opened on 10.06.2025. The Superintending Engineer has not stated that there may be cartelization when he referred the matter for approval. Therefore, there is no reason to observe that there may be cartelization and further financial loss to the State. There is no plausible justification on the part of the respondents-State not to approve the financial bid of the petitioner. At this juncture, it is also to be noticed that respondent No.2, vide Annexure P-14 dated 02.06.2025 had informed respondent No.3 that the technical bid for the said work, which is pertaining to the present case has been scrutinized in his Office on 02.06.2025 and the same was found in order. Thereafter, the committee had decided to authorize the Executing Engineer i.e. respondent No.4 to open the financial bids as per the contract provision and further upload the result of technical evaluation online. Once respondent No.2 after scrutinizing the technical bids has given the nod to open the financial bids, in which the petitioner has been found to be the lowest tenderer i.e. L-1, there is no justification not to approve his financial bid and further award work to him. 29. Since the petitioner after the directions given by this Court and after having negotiations with the competent authority has reduced the amount to Rs.52,27,41,017/- which is 4% below the original quoted bid amount and 0.25% below the amount put to tender, there is no justification not to award the work to him. The judgments cited by the learned Advocate General have only culled out the scope of interference under judicial review. This Court will not be loath to exercise its powers under Article 226 of the Constitution of India, in case, it is borne out from the record that the decision making process is arbitrary and is unreasonable. In the present case, the action is arbitrary since there is no material placed on record that there is cartelization and will cause financial loss to the state exchequer. In the present case, the action is arbitrary since there is no material placed on record that there is cartelization and will cause financial loss to the state exchequer. As noticed above, the respondents, even during the current financial year has accepted the tender of the lowest bidder who had quoted the amount more than the amount put to tender and thus the decision not to approve the financial bid of the petitioner is bad. 30. Therefore, we are of the considered opinion that action of the respondents-State not to award the contract to the petitioner being the lowest tenderer i.e. L-1 is arbitrary, unjust and unreasonable. Hence, the decision of the respondents-State to cancel the tender process, as conveyed to the petitioner vide office order dated 09.07.2025 (Annexure P-6) is quashed and set aside with a further direction to the respondents-State to accept the financial bid of the petitioner being lowest tenderer (L-1) and get the work executed as per negotiated amount of Rs.52,27,41,017/- quoted by the petitioner, as found mention in the communication dated 18.09.2025, issued by respondent No.2 which is 0.25% below the amount put to tender. In view of the above, the present petition is allowed in the aforementioned terms, however, no orders to costs is directed. All pending applications also stand disposed of accordingly.