State Of Jharkhand & Ors vs M/S Cwe-Soma Consortium

3. The matter in dispute relates to construction of a dam in the State of Jharkhand. The facts leading to filing of this appeal are as follows: The proposed project, Kharkai Dam at Icha is a part of Subernarekha Multipurpose Project, a Central Government Aided Scheme funded through the Accelerated Irrigation Benefits Programme (AIBP). Subernarekha Multipurpose Project is an Inter State project that was sanctioned in the year 1978 with the objective of providing irrigation in Jharkhand, Orissa and West Bengal. It will also provide water for drinking and industrial purpose as also for production of hydel power. The Water Resources Department, Government of Jharkhand, through its Executive Engineer issued a Notice Inviting Tender (NIT) for the construction of the Dam as per the Standard Bidding Documents (SBD) dated 28.02.2014. On 24.03.2014, a pre- bid meeting was held where ten tenderers participated and during its course, it was observed that in the clauses of the NIT, there were certain departures from the SBD. After the pre-bid meeting, in total, only three bidders namely, M/s CWE-SOMA Consortium, Hyderabad (respondent herein), M/s. IL & FS Engineering and Construction Co. Ltd., Hyderabad and M/s. Navyuga Engineering Co. Ltd., Hyderabad participated in the tender process and submitted their bids. In meetings of the Departmental Tender Committee held on 02.06.2014 and 06.06.2014, it was found that among the three tenderers, only the respondent was found responsive and other two bidders were found unresponsive. Therefore the tender committee took a decision under clause 4.18(d) of the Central Vigilance Commission Guidelines (‘CVC Guidelines’) to cancel the tender and go for retender to make the tender process more competitive. The tender committee re-affirmed this decision in a meeting held on 09.07.2014 after the Chief Minister referred an application of the respondent to them. Aggrieved thereof, respondent filed a writ petition before the High Court.

4. The learned Single Judge after examining clauses 4.17 and 4.18 of the CVC Guidelines which provide for procedure in case of a single quote/single valid acceptable quote and in case of lack of competition due to restrictive specifications respectively, came to the conclusion that in the absence of the decision of the tender committee that the specifications were stringent, clause 4.18 could not have been resorted to and tender committee should have resorted to clause 4.17. The Single Judge allowed the writ petition, holding the action of the appellants as arbitrary and against public interest. The matter was then carried in appeal filed by the appellants before the Division Bench by way of Letters Patent Appeal. The Division Bench upon perusal of the rationale for the decision of the tender committee, was of the view that there indeed existed competition as three companies, including the respondent had participated and respondent turned out to be the single bidder. Thus, the Division Bench concurred with the conclusion of the Single Judge that only clause 4.17 should have been invoked. The Division Bench also noted that the initial tender value was estimated as Rs.698 crores for the tender floated in February 2014, and when second tender was floated in July 2014 within the short span of few months, the estimated value of the project had increased to Rs.738 crores. Thus, Division Bench dismissed the appeal holding that re-tendering at later stage would further enhance the estimated value, causing excessive loss to the state exchequer which may not be in the public interest. Being aggrieved, the State of Jharkhand has preferred the present appeal.

10. Even though there were ten participants in the meeting on 24.03.2014 of pre-qualification bid, in view of stringent clauses in the tender document, only three bidders namely: (i) M/s. CWE-SOMA Consortium, Hyderabad; (ii) M/s. IL & FS Engineering and Construction Co. Ltd., Hyderabad and (iii) M/s. Navyuga Engineering Co. Ltd., Hyderabad submitted their bids. Upon scrutiny of the three bids, only respondent’s company bid was found responsive; the other two bids were found non-responsive in the light of provisions of clauses 4.5(A)(b) and 4.5(A)(c). The tender committee therefore decided to cancel the tender in order to make the tender more competitive and decided to re-invite tenders in the light of SBD norms on the basis of which tenders are invited by the department. The minutes of the Departmental Tender Committee held on 02.06.2014 reads as under:-

23. In the result, the impugned judgment of the High Court of Jharkhand is set aside and this appeal is allowed. No costs.

…………………….CJI.

(T.S. THAKUR) ……………………….J. (R. BANUMATHI) New Delhi;

July 12, 2016