IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA LPA No. 29 of 2011 Judgment reserved on: 15.06.2011 Date of decision: June 18, 2011 Mohinder Stan Appellant Versus State of H.P. and others Respondents Coram The Hon’ble Mr.Justice Kurian Joseph, Chief Justice The Hon’ble Mr. Justice V.K. Sharma, Judge For the Appellant: Mr. Sanjeev Bhushan, Advocate For the Respondents : Mr. R.K. Bawa, Advocate General, with Mr. Ankush Dass Sood, Additional Advocate General for respondents No. 1 to 4. Mr. Ajay Mohan Goel, counsel for respondent No. 5. Mr. Neeraj Gupta, counsel for respondent No. 6. ___________________________________________________________ Justice Kurian Joseph, C.J. (Oral) Appellant is the writ petitioner. The writ petition was filed with the following prayers:- (i) That a writ in the nature of certiorari may kindly be issued quashing the impugned decision reflected in letters dated 31.12.2008, Annexure P-3 and 09.01.2009, Annexure P-5, whereby the lowest bid of 2 the petitioner for the work “C/o Lihat to Sarain road km 8/700 to 21/525 in District Shimla (SH:F/C, CD, Kacha drain under NABARD RID-XIII”, has not been approved and tendering process for the said work has been recalled. (ii) That the fresh process started for awarding the contract of “C/o Lihat to Sarain road km 8/700 to 21/525 in District Shimla (SH:F/C, CD, Kacha drain under NABARD RID-XIII”, for which date for opening tenders ahs been fixed on 24.02.2009, may also be quashed. (iii) That a writ in the nature of mandamus may kindly be issued directing the respondents to award the contract of work “C/o Lihat to Sarain road km 8/700 to 21/525 in District Shimla (SH:F/C, CD, Kacha drain under NABARD RID-XIII” to the petitioners, with all consequential benefits. Learned Single Judge dismissed the writ petition and hence this appeal. 2. Annexure P-2 tender conditions contained a clause to the effect that the tenderer should not have more than two works in hand at the relevant time. Tender submitted by the petitioner was basically rejected on the ground that he had more than two works in hand at the relevant time. According to the petitioner, the said condition had not been strictly followed and in several cases, the same had been relaxed. During the pendency of the writ petition, by order, dated 9th August, 2010 Engineer-in-Chief had been directed to file a supplementary affidavit as to whether other contractors had been awarded works when they had more than two works in hand. In the affidavit filed by the Engineer-in-Chief, which is extracted in 3 the judgment of the learned Single Judge, it has come out that many contractors had been awarded works in such circumstances, pursuant to the clarification issued by the Government in the instruction, dated 01.02.2008. It was also further stated in the affidavit that the Government had thereafter relaxed the said condition. However, the learned Single Judge declined to grant relief to the petitioner on the ground that in the reply it had been stated that “as per cost justification of this work prepared by the department on the prevalent market rates, it was found that the bid of the petitioner was higher to the justification…….” Therefore, the writ petition was dismissed holding that “……It is apparent that bid of the petitioner has not been rejected only on the ground that he is the successful contractor in two other works, but one of the man grounds for rejecting his bid is that the amount he has tendered is still approximately Rs. 21 lacs, above the justification of the work…..”. 3. It is seen that on dismissal of the writ petition, fresh tenders were invited, however, the work has not been awarded so far. In the meanwhile, the appeal was filed. One Man Singh, whose bid is the lowest, got himself impleaded as additional sixth respondent. During the pendency of the writ petition, on the submission of the petitioner-appellant that the justification estimation is not correct, on 27th May, 2011 this Court directed the Superintending Engineer to file an affidavit 4 as to whether the calculation of justification in the case of the petitioner was correct or not. On 3rd June, 2011 the Superintending Engineer, who was present before the Court, submitted that the assessment of justification in the case of the appellant while processing the tender submitted in 2008 was not correct. It was also submitted on verification of records, that the tender of the appellant-petitioner could not have been rejected on the ground of justification. The above submissions were recorded in the order, dated 3.06.2011, which reads as follows:- “Sh. Shiv Lal Sharma, Superintending Engineer, PWD Rohroo, is present. It is submitted that the assessment on justification in the case of the appellant while processing the tender submitted in 2008 is not correct. It is further submitted on verification of records that the tender of the appellant-petitioner could not have been rejected on the ground of justification. The above submissions are recorded.” 4. Thus, the two grounds on which the learned Single Judge declined relief to the petitioner are not available. The condition in the tender that contractor should not have more than two works in hand was not strictly enforced and that several contractors had been granted exemption and that as per the Government instruction, the condition was not to be strictly followed. The second ground on justification also is not available since on proper assessment of the records, it has now come out that the tender of the appellant-petitioner could not have been rejected on that count. Therefore, the judgment 5 is liable to be set aside and the writ petition is liable to be allowed as well. 5. However, we may also refer to a few intervening developments in the matter. When the appeal was presented before the Court by 8th February, 2011, this Court had directed the department not to award the work for the time being, since the department, in the meanwhile, had gone for the fresh tender. It was noticed that the period of execution of the work was 18 months and the rates were of 2010 rates. The lowest tenderer was the sixth respondent for around Rs. 3.79 crores with the payment of recovery of stones whereas the quoted offer of the appellant contractor in 2008 was for around rupees three crores twenty eight lacs twenty thousand and two forty six ( to be exact rupees 3,28, 20,246/-). In view of the marked difference of about fifty one lacs and still with the provision for arbitration, in the presence of the officers in the Court, the petitioner-appellant was asked as to whether the appellant was still interested and willing to execute the work at 2008 rates. On 14th March, 2011, it was submitted that he was prepared to execute the work at 2008 rates and that he would complete the work within eighteen months and hence this Court directed the department to submit its response within a week. The affidavit, dated 19th March, 2011 of the Superintending Engineer was filed which to the extent relevant reads as follows:- 6 “It is respectfully submitted that the department is willing to award this work on his net quoted amount of Rs. 2,89,00,461/- subject to the following conditions:- (i) The gross quoted offer of the appellant contractor is Rs. 3,28,20,246/-. The cost of useful stones which are to be recovered from this work is Rs.39,19,785/-. The department would not take over any stones from the contractor, rather it would effect total recovery of Rs. 39,19,785/- on account of cost of stone, from each running bill of the contractor, on prorate basis. Thus the net amount of awarded work would be Rs. 3,28,20,246/- - Rs. 39,19,785/- i.e. Rs. 2,89,00, 461/-. (ii) The contractor would execute the total work as per scope in the contract within a period of 18 months and all the provisions of the contract would be regulated accordingly. (iii) He would execute the total work on 2008 rates i.e. for a net payable amount of Rs. 2,89,00,461/- to be paid on item rate basis on actual execution. Thus he would not be entitled to any relief on account of escalation from year 2008 till completion of work.” 6. When the matter was taken up on 19.5.2011, additional sixth respondent, who was otherwise liable to be awarded the work at a higher rate to the tune of around fifty one lac, was asked whether he was willing to execute the work at 2008 rates. It was submitted that it would not be possible for him to execute the work at 2008 rates. The submissions were recorded in the order dated 19th May, 2011. We may extract the order as such. 7 “The appellant and respondent No. 6, Man Singh are present. Though several contentions are taken by the parties, in view of the affidavit of the Superintending Engineer dated 19th March, 2011 filed pursuant to order dated 14th March, 2011 that the Department has no objection in awarding the work to the appellant at 2008 rates, a specific question was asked to the additional 6th respondent Man Singh as to whether he is prepared to execute the work at 2008 rates. Categorically Shri Man Singh submits that it will not be possible for him and he is not prepared to execute the work at 2008 rates in view of the escalation of the price of the materials and in view of his commitment to maintain the quality of the work. Challenging the submission, the appellant submitted that he is also an experienced contractor and he is aware of the escalation and that he has genuine commitment to the quality of work and he will complete the work at 2008 rates without asking for either extension or for escalation. It is also submitted that he is waiving his right under the Contract even for arbitration in respect of the rates. The submissions are recorded. Post for orders on 20th May, 2011.” Though the sixth respondent made an attempt to shift his stand thereafter, nothing has come out so far on record. 7. Though the learned counsel appearing for the sixth respondent inviting reference to the decisions of the Supreme Court in G.J.Fernandez Vs. State of Karnataka and others (1990) 2 SCC 488; Tafcon Projects (1) (P) Ltd. Vs. Union of India and others (2004) 13 SCC 788; Globan Energy Ltd. and another Vs. Adani Exports Ltd. and others (2005) 4 SCC 435; Laxmi Sales Corporation Vs. Bolangir Trading Company and others (2005) 3 SCC 157 and Sorath 8 Builders Vs. Shreejikrupa Buildcon Limited and another (2009) 11 SCC 9 made a persuasive attempt that he being the successful tenderer should be awarded the work, we are afraid the contentions cannot be appreciated. For one thing it is to be noted that in case the writ petition filed by the appellant-petitioner is allowed, there arises no question of re- tender. It has also to be noted that merely because a tender has been invited, no vested and enforceable right has accrued on the sixth respondent, though he is the successful tenderer. Still further, on facts, it has to be noted that there is a marked difference of rupees fifty one lacs between the appellant and the sixth respondent. 8. In the above circumstances, though for different reasons as well, the judgment of the learned Single Judge is set aside. The rejection of the tender of the petitioner is held illegal. In view of the intervening developments the appeal is disposed of with a direction to respondents No. 1 to 4 to award the work to the appellant-petitioner in terms of the willingness of the department, as expressed in the affidavit, dated 19th March, 2011, as extracted hereinabove. In order to avoid any future litigation, it is made clear that there shall not be any opportunity for the appellant for arbitration in connection with the execution of this work, as specifically agreed to by the appellant-petitioner. The necessary agreement shall be got executed within a month from today and the work shall be 9 started immediately thereafter. In case there is no satisfactory progress in execution of the work by the appellant-petitioner, we make it clear that it will be open to the department to take appropriate action in accordance with law. However, it is made clear that any such action shall only be taken with notice to the petitioner and after affording an opportunity for hearing to the petitioner. 9. The appeal is disposed of, so also the pending applications, if any. No costs. ( Justice Kurian Joseph ), Chief Justice June 18, 2011 (K) ( Justice V.K. Sharma), Judge