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T.T. Sunny Vs. The State of Kerala and Ors. - (High Court of Kerala) (11 Dec 2020)

Minor deviation from explicit terms of NIT would not by itself be sufficient to set aside tender in absence of malafides



Petitioner, who is an A Class Contractor, has challenged Exhibit P8 order alleging that, the 2nd lowest bidder on 8th September, 2020 was awarded the work without cancelling the selection notice issued to him and the same is in violation of Clause 2009.6 of PWD Manual.

According to the Petitioner, the action of Respondents 1 to 3 in issuing selection notice to the 4th Respondent before cancelling the selection notice issued to the Petitioner is illegal and contrary to the provisions contained in Clause 2009.6 and 2009.7 of the PWD Manual.

It is relevant to note that, in the present case, the tendering authority has already informed the Petitioner about the consequences of failure to execute the agreement within the first 14 days, after the further 10 days on fine as well as after expiry of 24 days of the registration of the selection notice. At the same time, such a provision is not seen in Clause 2009.6. The bidder comes to know about that only when he receives the cancellation. It is in such circumstances that it was provided, that the negotiation and selection of L2 shall be after cancellation of selection notice.

On the other hand, in the present case, it is seen that right from the issuance of selection notice, Petitioner was being warned of the consequences on failure to execute agreement within 24 days out of which the last 10 days was to be given only on penalty. He was also given the ultimatum in Exhibit P5 notice warning cancellation without further notice. Exhibit R3(b) cancellation as well as negotiation, issuance of selection notice to 4th Respondent and execution of agreement with 4th respondent are all done after the period prescribed in those notices in which Petitioner was informed of cancellation without further notice.

Even assuming that the allegation of the Petitioner that Exhibit R3(b) cancellation was not issued before Exhibit P8 or that the Petitioner has not received the same so far, present Court is of view that, there was substantial compliance of the provisions before inviting the 4th Respondent for negotiation. Apex Court in the Bharat Coking Coal Ltd. & others V. AMR. Dev Prabha & Ors., held that, minor deviation from explicit terms of NIT would not by itself be sufficient to set aside the tender in the absence of any allegation of malafides.

The only ground raised in the Writ Petition is as against Exhibit P8 order and that is with respect to violation of Clause 2009.6 and the speed within which the negotiation was conducted with 4th Respondent and the agreement executed with the 4th Respondent. The tender was with regard to a work relating to a road. In view of the nature of work and urgency involved in it for executing the same, it cannot be said that the Respondents have shown any undue haste. Moreover, Petitioner has not alleged any malafides on the part of any of the respondents. Exhibit P8 is seen issued in accordance with the conditions stipulated in the selection notice.

In the judgment in U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma, the Apex Court held that, there is no vested right upon the plaintiff/bidder until the bid is accepted by the competent authority and that being the highest bidder and having deposited a certain percentage of bid amount without there being approval of the same by the competent authority, it would not amount to a concluded contract.

From the pleadings available, it is seen that, the Petitioner was L1 and 4th Respondent was L2. It is also seen that, the Petitioners did not appear before the Superintending Engineer though sufficient time was granted for the same. Selection notice is cancelled only after the Petitioner was informed of the proposed cancellation in the event of failure to execute the agreement. It is seen that, the 3rd Respondent has only protected public interest by awarding the work to the 4th Respondent at the same rate quoted by the Petitioner who was L1. The mere fact that, the Petitioner did not get a separate communication before the selection notice was issued to the 4th Respondent cannot itself be a ground for cancelling the work awarded to the 4th Respondent, especially when the work has progressed to about 30% to 40%, that too, within a period of less than two months. There is no allegation of malafide, extraneous consideration etc. against the selection of the 4th Respondent.

As argued by the learned Government Pleader, the scope of judicial review in matters of contracts as well as finalisation of tenders is very limited. In the present case, there was not even a concluded contract between the Petitioner and the Department. In the circumstances of the case, the Petitioner does not deserve any relief. Petition dismissed.

Relevant : U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma: MANU/SC/0393/2013


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