HIGH COURT OF ORISSA: CUTTACK W.P.(C) No.22045 of 2011 In the matter of an application under Article 226 of the Constitution of India. -------- Akhila Kumar Mohapatra, S/o. Late Bichitrananda Mohapatra, Pravat Lane, Dutta Tota, P.S. Kumbharapada, Town & Dist : Puri … Petitioner -Versus- State of Orissa and others … Opp.Parties For Petitioner : Mr. R.K. Rath, Sr. Advocate M/s. Suryakanta Dash & H.K. Moharana For Opp.Parties : Mr. R.K. Mohapatra, Government Advocate ---------- P R E S E N T: THE HONOURABLE THE CHIEF JUSTICE SHRI.V.GOPALA GOWDA AND THE HONOURABLE SHRI JUSTICE B.N.MAHAPATRA Heard and Disposed of on 17.11.2011 B.N. Mahapatra, J. This writ petition has been filed with a prayer to quash the decision taken by opposite party No.3-Superintending Engineer, Central Circle (R & B), Bhubaneswar, District : Khurda under Annexure-10 by which he rejected the bid and cancelled the tender in respect of the work “construction of 33 seated Women’s Hostel for Government Women’s College at Puri for the year 2010-11” invited vide Tender Call Notice No.9 dated 10.01.2011. Further prayer of the petitioner is to direct opposite party Nos.1 to 3 to issue work order in his favour in respect of the said work. 2. The petitioner’s case in a nut-shell is that he is a ‘B’ Class Contractor. A tender call notice bearing No.9 dated 10.01.2011 (Annexure-1) was issued by opposite party No.3 inviting online tenders from the eligible registered contractors for execution of the work in question. Pursuant to such tender call notice, petitioner along with others submitted their bids through e-tender process on 27.01.2011. The technical bid of the petitioner was treated as non-responsive on the sole ground that he had furnished wrong registration number of one of the four trucks which were supposed to be hired for execution of the work in question. The petitioner was intimated about such rejection through SMS on 10.02.2011. The petitioner challenged the said action of the opposite party No.3 in W.P.(C) No.3230 of 2011 and this Hon’ble Court after hearing the parties and also taking note of the instructions supplied by opposite party No.3 to the learned Additional Government Advocate allowed the writ application by setting aside the decision of opposite party No.3 in declaring the technical bid of the petitioner as non-responsive and consequently rejecting the same. This Court further directed that the technical bid of the petitioner shall be evaluated vis-à-vis opposite party No.4 so also the financial bid and thereafter appropriate decision thereon shall be taken. After getting the said order of this Court, opposite party No.3 vide letter dated 23.03.2011 informed the petitioner that his technical bid was responsive and accordingly called upon him to attend his office for opening of the price-bid for the work on 25.03.2011. The petitioner attended the office of opp. party no.3 for opening of the price bid at the scheduled place and time and upon opening of the price bid, the petitioner was found to be the lowest bidder i.e. L-I. The financial bid opening summary was also uploaded to the e-tendering System of Government of Orissa. Since after a lapse of 2 considerable time, the opposite party authorities did not communicate their decision on the bid and the petitioner received information from a reliable source that opposite party No.4 was likely to be allotted with the work in question, he once again approached this Court by filing a writ petition bearing W.P.(C) No.12329 of 2011. In the counter affidavit filed in the said writ petition, it was categorically stated that opposite party No.4 had initially quoted 9.1% excess over the corresponding estimated cost of the work and even the negotiated price quoted by him was still 5% excess, but the price quoted by the petitioner was 1.7% less. It further revealed from the said counter affidavit that in the affidavit submitted by opposite party No.4 before opening of the price bids, he expressed his willingness to execute the work at 2.8% less. The matter was referred to the Office of the Advocate General, Orissa for legal advice and the learned Advocate General vide letter dated 03.05.2011 advised them to finalise the tender ignoring the offer made by opposite party No.4. The said writ petition was disposed of on 19.07.2011 by this Court with a direction to complete the tender process within fifteen days from the date of the order. Thereafter, opposite party No.3 by a letter dated 11.08.2011 published in the official website of the Government of Orissa, informed all the concerned regarding the rejection of the bids and cancellation of the tender under Clause 32 of the Detail Tender Call Notice. Hence, the present writ petition. 3. Mr. R.K. Rath, learned Senior Advocate appearing on behalf of the petitioner submits that the rejection of the bids and cancellation of the tender by a non-speaking order by taking recourse to Clause 32 of the Detail Tender Call Notice shows the vindictive attitude of the decision making authorities, who are bent upon to stand by their earlier decision to reject the bid of the petitioner and allot the work 3 in favour of opposite party No.4 by any means. Thus, the tender has been cancelled without any rhyme or reason notwithstanding the fact that earlier rejection of the technical bid of the petitioner was set aside by this Court and the petitioner being the lowest bidder was entitled to get the work order. Opposite party Nos.1 to 3, who as responsible public servants are supposed to act in a fair manner, have joined their hands with opposite party No.4 and have resorted to Clause 32 of the Detail Tender Call Notice mechanically in an arbitrary manner in order to fulfil their dishonest intention. The impugned decision to reject the bids and cancel the tender at the final stage of the tender process is apparently unreasonable and the same also smacks of mala fide. Such a decision clearly shows the intention of opposite party Nos.1 to 3 to over reach the process of law and cause hindrance in the smooth administration of justice. The bidding authority was very much interested for opposite party No.4 and illegally cancelled the bid in question the moment he felt that in the present bidding process he may not be able to achieve his goal. The said action of the bidding authority cannot stand to the judicial scrutiny in any manner whatsoever particularly in view of the legal opinion obtained from the highest legal consultant of the State and the impugned cancellation of the tender also violates the constitutional rights of the petitioner to pursue his profession as a contractor guaranteed under Article 301 of the Constitution. The authorities are required to act in a non-partisan and fair manner which has been violated here. Hence, it is desirable in the interest of justice, equity and fair play to lift the veil in order to find out the mala fide intention of the executive behind the impugned administrative action and quash the same in exercise of the extraordinary jurisdiction conferred upon this Court under Article 226 of the Constitution. 4 4. Mr. R.K. Mohapatra, learned Government Advocate appearing on behalf of the State submits that opposite party No.3-Superintending Engineer, the tender inviting authority is justified to reject the bid and cancel the tender for the work in question as the petitioner in his writ petition bearing W.P.(C) No.3230 of 2011 had disclosed his quoted rate as 1.5% less which lost the sanctity of the sealed tender process. The evaluation committee meeting was held on 23.03.2011 in which the petitioner was found responsive and the price bid was opened on 25.03.2011 in which the petitioner had quoted 1.7% less than the corresponding estimated cost. Opposite party No.4-Biswajit Chhotray filed an affidavit dated 24.02.2011 stating therein that he is willing to execute the said work at 2.08% less. The rate quoted by opposite party No.4 is less than the rate of the petitioner. The affidavit being genuine, the same was received on 24.02.2011, though he was not asked for further negotiation. In the above situation, as the essence and sanctity of tender was destroyed, legal instruction from the learned Advocate General, Orissa was sought for. After careful consideration and discussion with the competent/appropriate authorities it was decided to reject the bids of both the bidders and cancel the tender for the aforesaid work as per Clause 32 of the Detail Terms and Conditions of the Notice to avoid future litigation. The tender inviting authority by cancelling the tender has not debarred any bidder from participating in the re-tender process for the said work. In the latter tender, all the bidders will have equal opportunity to take part in the bidding process. The bidding authority felt that the affidavit submitted by opposite party No.4 to execute the work at 2.8% less, may cause an audit objection as he has quoted less than the petitioner. Therefore, the authority has acted in a fair manner and has rightly cancelled the 5 tender. Concluding argument, Mr. Mohapatra prayed for dismissal of the writ petition. 5. On the rival contentions advanced by the parties, the following questions fall for consideration by this Court -- (i) Whether due to disclosure of the rate quoted in the tender paper by the petitioner in the writ petition, the sanctity of the sealed tender process is lost? (ii) Whether in the facts and circumstances of the case, opposite party No.3-tender inviting authority is justified to reject the bid of the petitioner and cancel the tender for the work “construction of 33 seated Women’s Hostel for Government Women’s College at Puri for the year 2010-2011” and for re- tender of the said work ? 6. Since question Nos.(i) and (ii) are interlinked, they are dealt with together. 7. In the present writ petition, the decision making process of the tender inviting authority resulting in rejection of bid and cancellation of the tender for the work in question is under challenge. One of the grounds of attack of the petitioner is that the order of rejection of the bid and cancellation of the tender passed under Annexure-10 does not disclose any reason for taking such action. For better appreciation, it is felt necessary to quote the said order: “OFFICE OF THE SUPERINTENDING ENGINEER, CENTRAL CIRCLE (R & B) ORISSA, BHUBANESWAR NO.2772/11.08.2011 Cancellation of Tender for the work : - Construction of 33 seated Women’s Hostel for Government Women’s College 6 at Puri for the year 2010-11 invited vide Tender Call Notice No.9 Dt. 10.01.2011] After careful consideration, the undersigned i.e. the tender inviting authority do hereby reject the bids and cancel the tender for the work “Construction of 33 seated Women’s Hostel for Government Women’s College at Puri for the year 2010-11” invited vide Tender Call Notice No.9 Dt.10.1.2011, under Clause No.32 of Detail Tender Call Notice. Sd/- M. Samantaray Superintending Engineer Central Circle (R & B) Bhubaneswar” 8. Admittedly, the aforesaid order does not contain any reason for rejection of the bid and cancellation of the tender. Law is no more res integra that an authority must pass a reasoned order indicating the material on which its conclusions are based. Every administrative decision must be hedged by reasons. (See Life Insurance Corporation of India & Anr. Vs. Consumer Education and Research Centre & Ors [1995] 5 SCC 482). 09. The apex Court in S.N.Mukherjee-v-Union of India, AIR 1990 SC 1984, held that the recording of reasons by an administrative authority serves a salutary purpose namely; it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. The need for recording of reasons is greater in a case where the order is passed at the original stage. 7 10. Reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same it becomes lifeless. [See Raj Kishore Jha V. State of Bihar (2003) 11 SCC 519]. 11. Even in respect of administrative orders Lord Denning, M.R. in Breen V. Amalgamated Engg. Union (1971) 1 All ER 1148, observed: “The giving of reasons is one of the fundamentals of good administration.” 12. In Alexander Machinery (Dudley) Ltd. V. Crabtree (1974) ICR 120 (NIRC) it was observed: “Failure to give reasons amounts to denial of justice”. 13. In Vasant D. Bhavsar V. Bar Council of India (1999) 1 SCC 45, the apex Court held that an authority must pass a speaking and reasoned order indicating the material on which its conclusions are based. 14. The apex Court in Union of India & Ors. v. E.G. Nambudiri, AIR 1991 SC 1216, held that there is no dispute that there is no rule or administrative order for recording reasons in rejecting a representation. In the absence of any statutory rule or statutory instructions requiring the competent authority to record reasons in rejecting a representation made by a Government servant against the adverse entries the competent authority is not under any obligation to record reasons. But the competent authority has no licence to act arbitrarily, he must act in a fair and just manner. He is required to consider the questions raised by the Government servant and examine the same in the light of the comments made by the officer awarding the adverse entries and the officer countersigning the same. If the representation is rejected after its consideration in a fair and just manner, the order of rejection would not be rendered illegal merely on the ground of absence of reasons. In the absence of any statutory or 8 administrative provision requiring the competent authority to record reasons or to communicate reasons, no exception can be taken to the order rejecting representation merely on the ground of absence of reasons. No order of an administrative authority communicating its decision is rendered illegal on the ground of absence of reasons ex facie and it is not open to the court to interfere with such orders merely on the ground of absence of any reasons. However, it does not mean that the administrative authority is at liberty to pass orders without there being any reason for the same. In governmental functioning before any order is issued the matter is generally considered at various levels and the reasons and opinions are contained in the notes on the file. The reasons contained in the file enable the competent authority to formulate its opinion. If the order as communicated to the government servant rejecting the representation does not contain any reason, the order cannot be held to be bad in law. If such an order is challenged in a court of law it is always open to the competent authority to place the reasons before the court which may have led to the rejection of the representation. It is always open to an administrative authority to produce evidence aliunde before the court to justify its action. 15. In the counter affidavit it is stated that due to disclosure of the rate by the petitioner in W.P.(C) No.3230 of 2011, the sanctity of the sealed tender process is lost. 16. Undisputedly, pursuant to the Tender Call Notice No.9 dated 10.01.2011 both the petitioner and opposite party No.4 submitted their bids disclosing their rates in their sealed tender paper. Since, the petitioner’s technical bid was rejected he approached this Court in W.P.(C) No.3230 of 2011 wherein he 9 had disclosed the quoted rate at 1.5% less. Therefore, by the time when W.P.(C) No.3230 of 2011 was filed since the petitioner and opposite party No.4 both have already quoted their rates in their respective tenders, the disclosure of the rates by the petitioner in W.P.(C) No.3230 of 2011 by no stretch of imagination amounts to loss of sanctity of the sealed tender process. The tender inviting authority ought to have proceeded with the rates quoted by the petitioner as well as opposite party No.4 in their respective sealed tenders. It was further categorically stated in the counter affidavit filed by opposite party Nos.1 to 3 in W.P.(C) No.12329 of 2011 that opposite party No.4 before opening of the price bids expressed the willingness to execute the work at 2.8 % less though he was not asked for any further negotiation for which the matter was referred to the office of the Advocate General, Orissa for legal advice and the learned Advocate General by letter dated 03.05.2011 advised them to finalize the tender ignoring the offer made by opposite party No.4. However pursuant to such advice, no final decision could be taken as the writ petition bearing W.P.(C) No.12329 of 2011 was pending before this Court. Taking into consideration the facts stated in the counter affidavit and submission made on behalf of the State, the writ petition was disposed of by order dated 19.07.2011 with a direction to complete the tender process within fifteen days from the date of the order. It is also difficult to accept the contention of learned Government Advocate that communication between opposite party-tender inviting authority and learned Advocate General is a privileged communication which cannot be taken into consideration for deciding the issue involved in the present case simply because the opposite parties have disclosed the communication between them and learned Advocate General in their counter affidavit. Therefore, that communication is no 10 more protected under the privileged communication and section 29 of the Advocate’s Act has no application to the fact situation of the present case. 17. While the matter stood thus, one of the glaring irregularities which is noticed is that basing on the affidavit of opposite party No.4 expressing his willingness to execute the work at 2.8% less, opposite party No.3-tender inviting authority has rejected the bid and cancelled the tender process in question. Undisputedly, such an affidavit was filed by opposite party No.4 without being asked by the tender deciding authority for negotiation. Once the parties participate in the tender call notice and disclose their rates in the sealed tender, no right accrues in favour of any of the participants to revise its rate. The tender should be decided on the basis of the rate quoted by the participants in bid document. There is a purpose for submitting the bid documents in sealed tender. The purpose is that a competitor should not know the amount quoted by another tenderer. After quoting the rate/amount in the bid document, if it is subsequently allowed to be revised by an affidavit, the very purpose of maintaining secrecy in submitting the bid documents in sealed cover is lost. Therefore, none of the participants has any right to change its bid subsequent to submission of the sealed tender after the last date of submission of the tender paper. 18. Admittedly on opening of the price bid, it was found that the rate quoted by the petitioner in the tender paper was much less than the rate quoted by opposite party No.4 in the tender paper. Therefore, there is no occasion for opposite parties to take into consideration the revised rate filed by way of an affidavit dated 24.02.2011 by opposite party No.4, otherwise no sanctity can be maintained in the tender process and any bidder may come at any time with a 11 revised offer to create uncertainty, which would be against the concept of finality. Therefore, a particular date is fixed for receiving and also opening of the tender papers. Sanctity of tender is not tampered by disclosing the rate in the writ petition after the last date of submission of the tender. 19. It is certainly unfortunate that the tender inviting authority on the basis of the revised rate quoted by opposite party No.4 in the affidavit dated 24.02.2011 stating therein that he was willing to execute the work at 2.08% less rejected the bid and cancelled the tender of the work in question. This action of the said opposite party No.3 is not just and fair. There is no valid reason to take such action in the circumstances of the case. 20. Law is well settled that every action of the State and its instrumentality should be fair, legitimate and above board and without any affection or aversion. (See Haji T.M. Hassan Rawther Vs. Kerala Financial Corporation, AIR 1988 SC 157; E.P. Royappa Vs. State of Tamil Nadu & Anr., AIR 1974 SC 555 and State of Andhra Pradesh & Anr., -vs- Nalla Raja Reddy, AIR 1967 SC 1458). 21. Law is also well settled that in contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law: A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is ‘fair play in action’. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its 12 instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non- arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review. (See Food Corporation of India Vs. M/s Kamdhenu Cattle Feed Industries (1993) 1 SCC 71). 22. In the result, the writ petition is allowed. Annexure-10 is hereby quashed and opposite parties are directed to proceed with the tender paper submitted by the petitioner, who is a successful bidder in the instant case. ……………………………. B.N. Mahapatra,J. ……………………………… V. Gopal Gowda, C.J. Orissa High Court, Cuttack The 17th November, 2011/ssd/skj 13