WA 261/2009 BEFORE HON’BLE MR.JUSTICE AMITAVA ROY HON’BLE MR JUSTICE C.R.SARMA The judgment and order dated 13.8.09 passed in WP(C) No. 116(AP) of 2009 is in c hallenge in this writ appeal. 2. The Deputy Director, Urban Development Housing, Pasighat Divisio n, Pasighat issued notice inviting item rate bid (for short ’ NIB’) dated 11.9.0 8 for the execution of the work, namely, Improvement of road Network at Pasig hat at an estimated value of Rs. 495.63 lakhs. Following the said issuance of NI B, a corrigendum dated 14.9.08 was issued extending the last date of submission of tender upto 4.10.08. In response to the said NIB, the appellant, the responde nt No.1 and others participated by submitting their tenders. The tender process involved two bid systems i.e Technical Bid and Financial Bid . Those who qua ified in the technical bid, were entitled to participate in the Financial Bid . The appellant, the respondent No.1 and one M/S Renija Enterprise were evaluated as technically responsive. Therefore, as per terms of the NIB, the said tendere rs were allowed to participate in the financial bid. A Screening Committee (inte rnal committee) was constituted, vide order dated 10.9.08 for evaluation of the comparative merit of the bids. Accordingly, the committee aforesaid scrutinized the bids. The bid of the M/S Renija Enterprise was rejected on the ground that the bid value of Rs.368.91 lakh quoted by the said firm was abnormally low and unworkable. The bid value quoted by the appellant was Rs. 450.72 lakhs while th e bid value quoted by respondent No.1 was Rs. 473.60 lakhs. Though the bid value quoted by the appellant was lowest, the Screening Committee, after making calcu lations/correction with regard to certain items, quoted by the appellant, found some discrepancies in respect of the total amount and as such, the bid value, qu oted by the appellant, on being corrected got enhanced to Rs763.91 lakh In view of such correction/calculation, the respondent No.1 became the lowest bidder. Ac cordingly, the Screening Committee observed that the amount quoted by M/s. Tama Fabrication Works i.e the writ petitioner in WP(C) No. 116(AP) of 2009 (respond ent No.1 in this appeal) was found to be 4.40% below the estimated cost, while t he total bid value of the appellant i.e M/s. T.K.Engineerig Enterprises stood at Rs. 54.10% above the estimated cost. Therefore, the Screening Committee recomme nded the rate quoted by M/s. Tama Fabrication Works, the Chief Engineer i.e resp ondent No.4 refused to accept the said recommendation of the Screening Committee and by his note dated 27-2-09 made recommendation in favour of the appellant an d sought approval of the competent authority for accepting the tender of the app ellants on the grounds (i) that the committee constituted on 10-9-08 was cancell ed w.e.f 2-2-09 and the committee being an internal committee, its purpose was t o evaluate the tender and to place the merit and demerit before the competent au thority for further decision and not to compel the authority to accept the recom mendations; (ii) that M/s T. K. Enterprise, though quoted the bid value at Rs.45 0.72 lakh, the said amount got enhanced to Rs.763.90 lakh due to correction made by the committee; (iii) that M/S T. K. Enterprise agreed to execute the work wi thin the quoted rate for which, a chance should be given to the said firm ; (iv) that the allotment of the work to M/S T. K. Enterprise would result in saving of Rs. 22.88 lakhs, whereas allotment of the work to M/s. Tama Fabrication Works (respondent No.1) would cost the exchequer Rs. 22.88 lakhs more. With the abov e observations, the respondent No.4 placed the matter before the Secretary (UD) and accordingly, the proposal being approved, the contract work was awarded to t he appellant. 3. Being aggrieved by the said allotment on the basis of the above recommendation, , alleging illegality, biasness, nepotism and partiality against the respondent No.4, the respondent No.1 as writ petitioner approached this cou rt by filing a writ petition seeking interference of the court by invoking its j urisdiction under Article 226 of the Constitution. The appellant as respondent N o.6 contested the claim, by filing an affidavit in opposition, wherein it was averred that the committee members had illegally tampered certain figures in the final bid of the respondent No.6 and that the bid value was raised to Rs. 763.9 1 lakhs against the quoted bid value of Rs. 450.72 lakhs. 4. The learned Single Judge, having heard the parties and perusing the materials available on record, placed before him, came to the finding that t here was no reference with regard to the cancellation of the committee on 2.2.09 and that no file in support of the said cancellation could be produced. The fa ilure of the official respondents to produce the relevant file, if any, led the learned Single Judge to disbelieve the existence of any such cancellation order. It was observed that the committee constituted on 10-9-2008 was in existence an d therefore, the evaluation and recommendation made by the said committee had fo rce. It was also found by the learned Single Judge that the respondent No.4, whi le making consultation/negotiation with regard to the rate with the appellant di d not take the respondent No.1 into confidence and as such the decision of the r espondent No.4 was arbitrary, irrational and without sanction of the accepted pr ocedure and norms. . Considering the entire matter and the rival submissions mad e by both the parties, the learned Single Judge while setting aside the impugned Government order dated 16-3-2007 by which the work was allotted to the appellan t, inter alia, passed the following orders: Considering the facts and circumstances of the case and the dictum of the Apex court that the writ court should not sit as an Appellate court while exercisin g power of judicial review. I would not deem it fit and proper to pass any direc tion/order to settle the contract work with the petitioner firm, for it is beyon d the scope of judicial review and the same should be left with the authorities concerned to get the bids of the responsive tenderers on record re-assessed/re-e valuated and recommended, in favour of a deserving party, through the existing t ender committee forthwith, preferably within a period of 15(fifteen) days from t he date of passing of this judgment and order to re-assess/re-evaluate/re-scruti nize the tender papers and make recommendation for settlement of works, to the r espondent Secretary, who shall after due consideration, pass necessary order kee ping in mind the greater pubic interest involved. Be it made clear that, in case the Respondent-authorities desire to settle the tender by negotiation, it shoul d be done by associating both the petitioner and the Respondent No.6 as per the law and procedure indicated above . With the aforesaid directions, this petition stands partly allowed and disposed of. No order as to costs . 5. Being aggrieved by the said judgment and order on various ground s and contentions the details of which will be noticed later, the respondent No. 6 in the writ petition as appellant, has come up with this appeal. 6. We have heard Mr. K.N. Choudhury, learned Senior counsel for the appellant, Mr. S.N.Sarma, learned sr.counsel appearing for the respondent No.1 and Mr. B. Banerjee, learned counsel appearing for the State respondents. 7. Mr. K.N. Choudhury, learned Senior counsel taking us through the various clauses of the NIB, the impugned judgment and order, the recommendation of the committee and the note given by the respondent No.4 submitted that the c ommittee, constituted on 10.9.08, having been dissolved on 2.2.09, the said comm ittee had no authority to evaluate /scrutinize the bids and to make recommendati on in favour of the respondent No.1. It is also contended that the respondent No .4, being the employer, was the authorized officer to make his own assessment an d recommendation. The learned Senior counsel further contended that the correcti ons made by the committee, which was a non est one on the date of recommendation was unwarranted and as such the respondent No.4 was not liable to accept the sa id recommendation. It is also submitted that negotiation being made by the respo ndent No.4 with the appellant the latter had agreed to execute the work at the o riginal rate quoted by him, which was lower than the rate quoted by the responde nt No.1 and as such the respondent No.4 correctly made the recommendation in fav our of the appellant. Therefore, according to the learned sr. counsel the allotm ent of work in favour of the appellant, whose bid value was lower than that of the rate quoted by the respondent No.1 was lawful and as such there was no scope for the learned Single Judge in exercise of the powers under Article 226 of th e Constitution to interfere with the decision regarding allotment of the work. 8. Refuting the said arguments, advanced by the learned Senior coun sel appearing for the appellant, Mr. S.N.Sarma, learned senior counsel appearing for the respondent No.1 taking us through the various provisions of the NIB, mo re particularly the clauses 25 and 27 has submitted that there being no record of deliberations with the appellant as contemplated therein for obtaining its c larification or its consent regarding execution of the works, at the original ra te quoted by him, the observation made by the respondent No.4 that the appellant had agreed to execute the work at the originally quoted rate was not inconformi ty with the provisions of the NIB. The learned sr.counsel further submitted that in view of the absence of any official order/record regarding cancellation of t he committee w.e.f 2.2.09, the observation made by the respondent No.4 that the committee stood cancelled prior to the recommendation made by the committee and the negotiation, if any, made in private by the respondent No.4 was arbitrary an d violative of the established procedure for which the allotment in favour of t he appellant was liable to be set aside. The learned Senior counsel further cont ended that the committee which was constituted on 10.9.08 and as correctly obser ved by the learned Single judge, being in existence, the committee rightly evalu ated and calculated the bid value submitted by the appellant and found that the total bid value of the appellant was much higher than the bid value of the respo ndent No.1. It is submitted that in any case, while negotiating the matter with the appellant, the respondent No.4 should have invited the respondent No.1 also for negotiation and as such the said negotiation, if any, made with the appellan t to the exclusion of the respondent No.1 was arbitrary, bias and violative of p rinciples of equal opportunity. 9. Mr. B. Banerjee, learned Govt Advocate, Arunachal pradesh while producing the relevant files could not place the order dated 2-2-09. . To our po inted question regarding the order dated 2.2.09 i.e order of cancellation of the committee and existence of any record regarding inviting the tender for negoti ation, the learned Govt Advocate submitted that the record was silent regarding cancellation of the order dated 2.2.09 and negotiation with the tenderers. 10. Having heard the learned counsels for the parties, we have caref ully perused the materials on record. 11. Admittedly, the Screening Committee was constituted on 10.9.08. As stated by the learned Government Advocate, there is nothing on record to fin d that the said committee was dissolved on 2.2.09 as mentioned by the respondent No.4 in his note dated 27.2.09. It is also an admitted position that the commit tee, on scrutiny made certain corrections regarding rates quoted by the appellan t in respect of certain items, as a result of which the total bid value quoted b y the appellant came to Rs.763.90 lakh and it was found to be 54.10% above the e stimated cost of the work while the total bid value quoted by the respondent No. 1 was found to be 4.40% below the estimated value. 12. In view of above position, the committee finding the respondent No.1 the first lowest bidder recommended the rate quoted by the respondent No.1 for appropriate decision by the competent authority. On receipt of the said reco mmendation, the respondent No.4 re-evaluated the matter and passed the following order:- (NSP-26) 90. The Deputy Director, UD & Housing, Pasighat has forwarded the tender documen ts along with technical and financial evaluation reports separately and financia l bids in original. As per the report, it is stated that 11 sets of tender paper were sold out of which 4(four) firms submitted their bids. One firm could not t echnically qualify. The financial bad of the three firms were opened and after s crutiny the financial bid of M/s Reniya Enterprise quoted RS. 368.31 lakhs which was rejected at Divisional level being abnormally low over the estimated cost p ut to tender (i.e 25.69% down). The financial bid of two firms was received in t his office for scrutiny and acceptance. As per the report, the Ist lower tendere r is M/s T.K. Engineering Enterprises who quoted Rs. 450.72 lakhs (9.07% down) a nd 2nd lowest tendered is M/s Tama Fabrication Works quoted RS. 473.72 (4.40% do wn) as compared with the estimated cost put to tender. The reference may be seen as at Flag-X/page 6 of Annexure B). 91. As per the justification of the quoted amounts of both the tende rs as submitted by the Deputy Director, UD & . Pasighat (may refer comparative s tatement (abstract) at Annexure-D) the percentage quoted by M/s T.K. Engineering Enterprises and M/s Tama Fabrication works are 1.84% below and 3.145% above the justified amount i.e Rs. 459.19 lacs respectively. 92. The above mentioned documents were scrutinized by an internal co mmittee and their findings as stated at Para 81 (Table 6) on NSP-23 & 24 shows t hat the percentage quoted by M/s T.K.Engineering Enterprises and M/s Tama Fabric ation Works are 54.10% above and 4.40% below the total estimated cost put to ten der i.e Rs. 495.63 lakhs. The change of percentage in case of M/s. T.K. Engineer ing Enterprises has been effected by the committee by correcting the original qu oted rates computation of carriage items in respect of 3(a), 3(b), 4(a) & 4(b) o f General Abstract and individually at pages 85/c, 88/c, 90/c and 92/c . 93. The Deputy Director, UD & H, Pasighat has recommended M/s Engine ering Enterprises which according to the divisional justification is 9.70% belo w and 1.84% below the estimated cost put to tender i.e Rs. 495.63 lakhs and Rs. 459.19 lakhs respectively. Whereas, as per the findings of the committee’s justi fication, the percentage quoted by M/s T.K. Engineering Enterprises and M/s Tama Fabrication Works are 54.10% above and 4.40% below the total estimated cost put to tender i.e Rs. 495.63 lakhs and the internal committee has recommended the c ase of M/s. Tama Fabrication Works. 94. On perusal of the original financial bids of the two firms as sh own at there respective general abstracts Flagged ’A & B’(envelop enclosed) the firms i.e M/s T.K. Engineering Enterprises and M/s Tama Fabrication Works have o ffered to execute the works put to tender at a cost of Rs. 450.72 lakhs and Rs. 473.60 lakhs respectively with a clear difference of Rs. 22.88 lakhs in between them but the amount of M/s T.K. Engineering Enterprises has been increased to RS . 763.90 lakhs as per the committee’s finding and correction of carriage items a s mentioned above by the committee itself. 95. It is pertinent to mention here that the committee’s recommendat ion of M/s Tama Fabrication Works will incur an additional expenditure of Rs. 22 .88 lakhs on same quantity of work above that of amount quoted by M/s T.K. Engin eering Enterprises in its original financial bid notwithstanding the minor discr epancies in its individual entries in item rates. As such the committee’s recomm endation seems to overlook the financial benefits/savings to the State Govt exch equer. 96. It may also be mentioned here that the committee constituted vid e order No. DUD/Plg-313/2007-08/3897-99 dated 10th September 2008 for smooth and timely scrutiny of the Tender Papers was cancelled vide No. DUD/Plg- 313/2007=0 8/7619-20 dated 2nd February 2009 (copy enclosed at page 110/c) earlier keeping in view of the problems experienced in the case of the Tender for C/o. Houses fo r Urban Poor/Safai Karmachaires at Papu Nallah, Naharlagun under BSUP which itse lf is yet to be finalized and lots of pressure is coming from tenderer to unders igned. The committee constituted took ample time and instead of decision making it creates problems in decision making process. 97. Further, in the instant case the internal committee has committe d procedural violation as they have tried to compel the authority to accept the committee’s recommendation not keeping provision/option for taking decision th e higher authority, such practice is not appreciable. The committee’s purpose wa s to evaluate the tender and to pace the merit and de-merit before the competent authority for further decision, as the committee is simply and internal arrange ment and not suppose to compel the authority to accept the committee’s recommend ation. Moreover, in this particular case, the committee constituted was cancelle d on 2nd February 2009 as stated at Para 96 above. 98. Keeping in view the facts as stated above, it is recommended tha t as M/s T.K.Engineering Enterprises has originally quoted Rs. 450.72 lakhs whic h was escalated due to correction did I n the original quoted rate and agreed to execute within the quoted rate, hence a chance may be given to the firms which will result in saving of Rs. 22.88 lakhs whereas on the other hand awarding of w orks to M/s Tama Fabruication Works will incur an extra amount of Rs. 22.88 lakh s from the Govt exchequer. In view of above, the matter is submitted to Secretary (UD) for obtaining approval of competent authority for acceptance of the tender of M/s T. K. Engineering Enterprises please. Sd/ Secretary (UD) Chief Engineer-cum-Director (UD & H) . 13. In the said note, it was recorded, that M/s. T.K.Engineering Ent erprises quoted 450.72 lakshs (9.07% down), that the second lowest tender was submitted by M/s. Tama Fabrication Works quoting Rs. 473.60 (4.40% down), that the documents were scrutinized by internal committee and that the finding at Par a 81 (Table 6) on NSP -23 and 24 showed that the percentage quoted by M/s. T.K. Engineering Enterprises was Rs. 54.10% above, while percentage quoted by M/s. Ta ma Fabrication Works was Rs. 4.40% below. As mentioned in the said note, the rat es quoted by M/s T.K. Engineering Enterprises, were calculated and corrected by computing the carriage items in respect of 3(a), 3(b), 4(a), and 4(b) of Genera l Abstract and individually at pages 85/c, 88/c, 90/c and 92/c. It was also noti ced that the amount of T.K.Engineering Enterprises got increased due to the corr ections made by the committee and that there were some minor discrepancies in th e individual entries in item rates in respect of the tender of M/s T.K. Engineer ing Enterprises. As discussed earlier, the grounds for recommending M/S T.K.Engi neering Enterprises were that the said firm had agreed to execute the work at th e quoted rate, that the allotment of the work to M/S Tama Fabrication Works woul d cost the exchequer RS. 22.88 lakhs more while the allotment of the work to MS. T. K. Enterprise would result in saving of Rs.22.88 lakh and that the committe e constituted on 10th of September, 2008 for smooth and timely scrutiny was canc elled on 2.2.09 i.e prior to the recommendation by the committee. In making the said observation, the Chief Engineer no where stated that the corrections made b y the committee in respect of the quoted rate of M/s T.K.Engineering Enterprise s were wrong or arbitrary. He, however, negated the said recommendation of the c ommittee on the grounds that the committee was already dissolved vide order date d 2.2.09 for which the committee being a non est one, the recommendation made by it was not valid and also that M/s T.K. Engineering Enterprises had agreed to e xecute the work at the original rate. There is nothing on record to find that M/ s. T.K.Engineering Enterprises was either consulted or that it had given any wri tten consent to execute the work on the basis of the original rate quoted by it notwithstanding the corrections aforesaid. Fact remains that the bid value of th e work, in respect of M/S T.K. Engineering got enhanced and thus became higher than the rate quoted by the appellant on being calculated/corrected by the commi ttee disclosing certain inherent mistake in the bid value quoted by the appellan t. The respondent No.4 also in his note aforesaid stated that there was some min or discrepancies in the individual rates quoted by the appellant. It is an admit ted position that the bid value quoted by the appellant, after correction made b y the committee stood at Rs.763.90 lakhs. There is nothing on record to find tha t the said calculation or correction made by the committee was without any basis or that the same was erroneous. In view of the above, undisputedly some correct ions (arithmetical) were required in the bid value of the appellant and the comm ittee had made the corrections. In the event of such correction, certain procedure as provided b y the NIB, is required to be followed before allotting the work to the tenderer whose bid value is corrected and found to be higher than the other tenderer on s uch correction. Clause 27 of the NIB, which reads as follows prescribes the following procedure for correction of error. 27.1- Financial bid determine to substantially responsive, it will be checked by the Employer for any arithmetic error. Error will be corrected by the Employ er as follows: (a) where there is a discrepancy, between the rates in figure and in words, the rates in words will govern, and (b) where there is a discrepancy between the unit rate and the line item tot al resulting from multiplying the unit rate by the quantity, the unit rate is qu oted will govern. 27.2- The amount stated in the Financial Bid will be corrected by the Employ er in accordance with the above procedure and the bid amount adjusted with the c oncurrence of the Bidder in the following manner. a). If the bid price increases as a result of these corrections, the amount as s tated in the bid will be treated as the bid ’price’. b). If the bid price decreases as a result of these corrections, the decreased a mount will be treated as the bid ’price’. Such adjustment bid price the bid price shall be considered as binding upon the bidder. If the bidder does not accept the corrected amount the bid will be rejec ted, and the bid security may be forfeited in accordance with sub-clause 16 6(b) . As indicated by the committee, the bid value quoted by the appellant on being co rrectly calculated the price increased. In such a situation, as prescribed by th e clause 27.2, the bid amount is required to be adjusted with the concurrence of the bidder and upon such concurrence, the bid price originally quoted by the bi dder could be treated as the bid price. But, before proceeding to allot the work on such bid price, which is lower than the corrected price, the concurrence of the bidder is to be obtained and this is a mandatory requirement of the prescrib ed procedure. Clause 25 of the NIB, which is extracted as below,