Chattisgarh High Court
Daya Charan And Company vs State Of Chhattisgarh on 25 April, 2025
Author: Ramesh Sinha
Bench: Ramesh Sinha
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2025:CGHC:18821-DB
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 6436 of 2024
Daya Charan And Company A Proprietorship Firm Through Its
Authorized Signatory / Power Of Attorney Holder Namely Shyam
Sundar Bajaj S/o Shir Gopikishan Bajaj Aged About 59, Apartment City
Light Surat (Gujarat)
... Petitioner(s)
versus
1 - State Of Chhattisgarh Through Secretary Urban Administration And
Development Department Mantralalya Mahanadi Bhawan Capital
Complex Atal Nagar Nawa Raipur District - Raipur (C.G.)
2 - Municipal Corporation Bhilai Supela (Health Department) Through Its
Commissioner Municipal Corporation Bhilai District - Durg (C.G.)
3 - Commissioner Municipal Corporation Bhilai District - Durg (C.G.)
... Respondent(s)
For Petitioner(s) : Mr. Manoj Paranjape, Advocate
For Respondent No.1/State : Mr. S.S.Bhaghel, Dy. Govt. Advocate
For Respondents 2 & 3 : Mr. Amrito Das, Advocate
Hon’ble Shri Ramesh Sinha, Chief Justice
Hon’ble Shri Arvind Kumar Verma, Judge
Order on Board
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Per Ramesh Sinha, Chief Justice
25/04/2025
Heard Mr. Manoj Paranjape, learned counsel for the petitioner
Mr. S.S.Bahel, learned Deputy Government Advocate and Mr. Amrito
Das, learned counsel for respondents No. 2 & 3.
2. The instant writ petition has been preferred with the following
prayer:
“10.1 that this Hon’ble Court may kindly be pleased to
issue a writ/writs, order/orders, direction/directions
quashing the decision of respondent authorities
(Annexure P/1) whereby the Notice Inviting Tender
bearing No. 159751 has been cancelled due to
committee decision and the respondent authorities
may kindly be directed to consider the case of the
petitioner for award of contract being the lower one
and they may further be directed to proceed further in
the matter for award of the contract.
10.2.That this Hon’ble Court may kindly be pleased to
issue a issue a writ/writs, order/orders,
direction/directions and the Notice Inviting Tender
dated 12.12.2024 bearing No. 162812 issued by the
Municipal Corporation Bhilai may also kindly be
quashed and authorities may kindly be directed not to
proceed further in the matter in pursuance of the third
Notice Inviting Tender dated 12.12.2024.
10.3 That this Hon’ble Court may kindly be pleased top
grant any other relief(s) which is deemed fit and proper
in the aforesaid facts and circumstances of the case.”
3. The petitioner firm along with M/s. Shreeji Enterprises had
executed the consortium/Joint Venture agreement on 19.10.2024 and
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under the agreement, the petitioner has been authorized to act as a
lead partner.
4. The first notice inviting Tender was issued on 29.08.2024 for
Remediation and Management of Unprocessed Water at Bhogda Puliya,
Jamul and Bhilai Landfill and 5 participants have participated in the said
tender process, but only the petitioner firm was found eligible/qualified
and as there was only one participant, the entire tender process was
cancelled on 10.12.2024 due to single tender of technical qualification.
5. The second Notice inviting tender was issued on 10.10.2024 and
in the said notice inviting tender process the petitioner firm along with
one other participant has participated and has been declared as Lowest
one. The financial bid was opened on 21.11.2024. The petitioner firm
has quoted the price 26% below the price of the contract. After opening
of the financial bid till 13.12.2024 the petitioner firm was given an
assurance that, the department will soon proceed further in the matter
but all of a sudden on 13.12.2024 the Email was sent by E-proc on the
registered email of the petitioner firm wherein the petitioner has been
informed that the entire tender process has been cancelled due to
committee decisions. It is very unfortunate that after opening of the
financial bid of the petitioner firm, the entire tender process has been
cancelled. No doubt the government or authority inviting the tender may
cancel the tender process but only on sufficient and reasonable ground
and at appropriate stage. In the case at hand, respondent authority
failed to point out any satisfactory ground or reason for cancellation of
the entire tender process after declaring the petitioner to be lowest
bidder.
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6. In the case in hand, the first tender process was cancelled
because out of 5 participants only the petitioner was found eligible and
in the second round two participants/tenderers have participated and
the petitioner firm has quoted 26% below the tender price whereas the
other participants have quoted higher price. On 13.12.2024 the
petitioner firm was informed in respect of the cancellations of the entire
tender process wheres the new Notice Inviting Tender was published on
12.12.2024 bearing No.162812. Despite this, the petitioner has been
declared as Lower one after opening of the price bid and the entire
tender process has been cancelled that too, without there being any
cogent, sufficient and reasonable grounds. There was no reason
assigned for cancellation of the entire tender process but when the
authorized signatory of the petitioner firm approached the higher
authorities, it was informed that the Notice Inviting Tender was not
published in the widely circulated national newspaper. When the entire
tender process has been initiated through E-tender process through
online by e-procurement platform publishing the Notice Inviting Tender
in the newspaper is not required as the complete tender information is
readily accessible on the online portal.
7. Since the financial bid of the petitioner has already been opened
therefore, now it will cause great prejudice to the petitioner firm in the
third round of tender process. It appears that the entire tender process
has been cancelled with some oblique motive and with malafide
intention. The third Notice Inviting Tender has been issued on
12.12.2024 and the last date of submission of online bid was
23.12.2024 and technical bid was opened on 27.12.2024. Since the rate
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quoted by the petitioner has already been opened therefore in the said
tender process prejudice will be caused to the petitioner. The petitioner
is challenging the said Notice Inviting Tender. Since the petitioner has
been declared as lower one the petitioner has also placed the purchase
orders for certain machineries which itself shows that the petitioner was
interested to execute the said work.
8. Contention of the learned counsel for the petitioner is that at first
the Notice Inviting Tender was cancelled due to single tender of
technical qualification as there were 5 participants but only the petitioner
was found eligible and the documents were physically submitted on
29.10.2024 after pre-bidding meeting and thereafter the documents
were submitted and financial bid was opened by the committee and now
after about 21 days from opening of the financial bid the entire tender
process has been cancelled. It is contended by the learned counsel for
the petitioner that the decision making process of the respondent
authorities is illegal, arbitrary and unreasonable. The petitioner fulfilled
all the terms and conditions of the tender document but with arbitrary
and malafide reasons after opening of the financial bid the entire tender
process has been cancelled. He submits that in the first round the
tender process was cancelled due to single tender of the petitioner firm
and in the second NIT the petitioner was found eligible and his financial
bid was opened on 21.11.2024 and thereafter on 13.12.2024 the
petitioner has been informed that the entire tender process has been
cancelled. He submit that no reason has been assigned or
communicated to the petitioner for cancellation of tender process except
the reason “cancelled due to committee decision” and the petitioner firm
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was not afforded opportunity before cancellation of the tender process.
It is further submitted that the reason for cancellation of the second
tender process has been orally informed by the authorities that since the
Notice Inviting Tender was not published in the daily circulated national
newspaper, the Committee has taken a decision to cancel the entire
process.
9. Contention of the learned counsel for the petitioner is that the
before taking decision of cancellation, the Committee ought to have
appreciated that when the entire tender process has been initiated
through e-tender process through online and an e-procurement platform
publishing the Notice Inviting Tender in the newspaper is not required as
the said information is readily accessible on the online portal. He
submits that in absence of cogent and reasonable reasons the entire
tender process cannot be cancelled that too, after opening of the
financial bid of the petitioner. He has placed his reliance in the matter of
M/s. Tirupathi Enterprises (WPC No. 659/2019) dated 25.07.2019
wherein it has been held that after opening of the financial bid unless
the authorities point out satisfactory grounds or reasons, the entire
process cannot be cancelled.
10. He contended that even if the petitioner participates in the third
round of Notice Inviting Tender, the opening of the price bid would
materially prejudicial to the petitioner firm. He has further placed his
reliance in the matter of State of Punjab Vs. Bandeep Singh and
Others reported in (2016) 1 SCC 724 wherein it has been held as
under:
“7. The same principle was upheld more recently in
7Ram Kishun Vs. State of UP (2012) 11 SCC 511.
However, we must hasten to clarify that the
Government does not have a carte blanche to take
any decision it chooses to; it cannot take a
capricious, arbitrary or prejudiced decision. Its
decision must be informed and impregnated with
reasons. This has already been discussed
threadbare in several decisions of this Court,
including in Sterling Computers Ltd. Vs. M & N
Publications Ltd. (1993) 1 SCC 445, Tata Cellular
Vs. Union of India (1994) 6 SCC 651, Air India Ltd.
Vs. Cochin International Aiprort Ltd. (2000) 2 SCC
617, BSB Joshi & sons Ltd. Vs. Nair Coal Services
Ltd. (2006) 11 SCC 548, Jagdish Mandal v. State
of Orissa (2007) 14 SCC 517.”
11. In the recent judgment of the Apex Court in the matter of
Banshidhar Constructions Pvt. Ltd. reported in 2024 (10) SCC 273,
the Apex Court has examined the scope of judicial intervention in
government contracts and has held as under :
“28. There cannot be any disagreement to the legal
proposition propounded in catena of decisions of
this Court relied upon by the learned counsels for
the Respondents to the effect that the Court does
not sit as a Court of Appeal in the matter of award
of contracts and it merely reviews the manner in
which the decision was made; and that the
Government and its instrumentalities must have a
freedom of entering into the contracts. However, it
is equally well settled that the decision of the
government/ its instrumentalities must be free from
arbitrariness and must not be affected by any bias
or actuated by malafides.
29. Government bodies being public authorities are
expected to uphold fairness, equality and public
interest even while dealing with contractual
matters. Right to equality under Article 14 abhors
arbitrariness. Public authorities have to ensure that
8no bias, favouritism or arbitrariness are shown
during the bidding process and that the entire
bidding process is carried out in absolutely
transparent manner.”
12. He has stated that the Apex Court in catena of decisions has held
that recording of reasons are the heartbeats of any decision and the
communication spells out that no reason has been assigned. He
submits that under the solid Waste Management Rule 2016 and the
various orders passed by the National Green Tribunal, the tender was
issued for Remediation and Management of Unprocessed Waste at
Bhogda Puliya, Jamil and Bhilai Landfill and delay in the process of
execution of the said work will cause serious environmental and health
problems. It is submitted that the Notice Inviting Tender was published
in the newspaper on 15.10.2024,16.10.2024 and it was also published
on E-portal of the eproc.cgstate.gov.in and after opening of the financial
bid the entire process has been cancelled after 20 days from the date of
opening of the financial bid ie. on 21.11.2024 for which the petitioner
was made to suffer. The complainant who made a complaint dated
21.11.2024 has made complaint after about 41 days from the issuance
of the Notice Inviting Tender ie. 10.10.2024 and the said complaint
ought not have been entertain only on the ground that it was made after
opening of the financial bid. It is theretofore submitted by the learned
counsel for the petitioner that for the fault of the respondent authorities,
if any, the petitioner firm whose financial bid has already been opened
cannot be made to suffer on account of the rates being disclosed to
everyone and will suffer financial loss also.
13. Per contra, learned counsel for respondent No.2 & 3 submits that
the petition is based upon self serving averments and it is for the reason
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that it has become incumbent upon the answering respondents to
submit a detailed reply to the allegations made in the writ petitioner. The
petitioner has not placed on record the complete facts and have simply
made allegations which are absolutely misconceived and baseless. He
submits that the respondent/corporation issued a notice inviting tender
for award of contract for bioremediation and management of
unprocessed waste at Bhogda Pulia, Jamul and for Bhilai landfill for an
estimated cost of Rs. 14,84,52,0000/- on 29.08.2024. As against the
said notice, 6 bidders participated int eh aid bidding process of which
only one bidder was found to be eligible and accordingly, the said tender
process was cancelled on 10.10.2024 and on the same day a second
notice inviting tender was issued inviting the bidders to participate for
the said work and two bidders participated as against the said notice.
After evaluation, the price bid of the bidder were opened on 21.11.2024
and the petitioner firm was found to be lowest as compared to other
bidders. Before any further steps could have been taken, except for
opening of the bids, a complaint was made by one Ayushi Hygiene and
Care Private Limited before the respondent authorities on 21.11.2024
that the NIT dated 10.10.2024 was not given wide publicity and the
same was not published in the national newspaper as a result of which,
the complainant could not submit his bid and accordingly the tender
process was cancelled. Thereafter the said complaint was placed for
consideration before the tender committee and after due consideration
of the said complaint on 2.12.2024 the matter was placed before the
municipal corporation for examination and decision. The concerned
department then considered the relevant circular as has been issued by
the State government for publication of notice inviting tender concerning
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the project based upon the estimated cost. According to the circular
dated 17.05.2013 the department of Urban Administration and
Development, State of Chhattisgarh has directed that for all the works
comprising of an estimated cost of Rs. 1,00,00,000/- and above, the NIT
should be published in one national newspaper and in one State
newspaper having wide circulation. Based on the said circular, decided
that the NIT dated 10.10.2024 comprising of estimated cost of Rs.
14,84,52,000/- and therefore the same requires that the NIT ought to
have been published in a national newspaper having wide circulation.
However, the NIT dated 10.10.2024 was not published in any national
newspaper having wide circulation and it was published only in the local
newspapers ie. Haribhoomi and Nai Duniya. Hence it was proposed by
the department the said tender process pursuant to the NIT dated
10.10.2024 be cancelled and a third tender process was issued. It was
also proposed that for the procedural mistake committed while issuing
the NIT dated 10.10.2024, the Executive Engineer namely Shri
K.K.Gupta should be issued a show cause notice seeking explanation
for the said non-compliance. The decision was placed for consideration
before the Commissioner and was approved on 12.12.2024 and a new
NIT was published on 13.12.2024 in the national newspaper having its
wide circulation.
14. It is submitted by the learned counsel for the respondents that
there is no illegality in cancellation of the tender process pursuant to the
NIT dated 10.10.2024, if once the same having been committed, came
to the knowledge of the respondent authorities. On account of
procedural lapse, the said NIT was not published in any of the national
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newspaper having wide circulation which rendered the entire tender
process vitiated. As far as the rights of the petitioner is concerned, the
NIT was a notice inviting bids ie. offers were invited from the prospective
bidders. There is no prejudice caused to the petitioner on account of the
cancellation of the tender process as there was neither any contract
entered with the petitioner nor was there any award of work having been
issued in favour of the petitioner firm. It is trite law that there is no
vested right with the lowest bidder that the work shall be awarded to
him. It is the decision to be taken by the State agency as to whom the
work is to be awarded after due consideration of the entire fact. Merely
because the petitioner was declared as lowest one, there is no accrued
or vested right having crystallized in favour fo the petitioner for award of
work by the answering respondent. It is in the larger public interest that
the rules of procedure as has been prescribed in award of public
contracts are followed in strict sense without there being any deviation.
The petitioner has failed to demonstrate that the decision dated
12.12.2024 to cancel the tender process dated 10.10.2024 was issued
on account of any malafide or bias against the petitioner. He has placed
his reliance in the matter of the Apex Court in the matter of Maa Bina
Express Carrier and another V. East Frontier Railway and Others,
(2014) 3 SCC 760, wherein it has been held as under:
“8.The scope of judicial review in matters relating
to award of contract by the State and its
instrumentalities is settled by a long line of
decisions of this Court. While these decisions
clearly recognize that power exercised by the
Government and its instrumentalities in regard to
allotment of contract is subject to judicial review at
the instance of an aggrieved party, submission of
a tender in response to a notice inviting such
tenders is no more than making an offer which the
12State or its agencies are under no obligation to
accept. The bidders participating in the tender
process cannot, therefore, insist that their tenders
should be accepted simply because a given
tender is the highest or lowest depending upon
whether the contract is for sale of public property
or for execution of works on behalf of the
Government. All that participating bidders are
entitled to is a fair, equal and non-discriminatory
treatment in the matter of evaluation of their
tenders.”
15. In yet another decision of the Apex Court in the matter of Kisan
Sahakari Chini Mills Ltd. V. Vardan Linker and Others, (2008) 12
SCC 500, held as under:
“12……In exercising writ jurisdiction, if the High
Court found that the exercise of power in passing
an order of cancellation was not arbitrary and
unreasonable, it should normally desist from
giving any finding on disputed or complicated
questions of fact as to whether there was a
contract, and relegate the petitioner to the remedy
of a civil suit. Even in cases where the High Court
finds that there is a valid contract, if the impugned
administrative action by which the contract is
cancelled, is not unreasonable or arbitrary, it
should still refuse to interfere with the same,
leaving the aggrieved party to work out his
remedies in a Civil Court…..
16. It is submitted that the order dated 12.12.2024 cancelling the
tender process was issued by the respondent authorities in order to
ensure fairness, transparency and impartiality in the conduct of the
tender process for award of public work so that the credibility of the
answering respondent stand restored in conducting the tender process.
The fresh tender process after wide circulation and publication of the
NIT in the national newspaper is necessary in order to ensure that there
is no future blame or public mischief in conducting the tender process.
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In this regard, it shall be necessary to refer to the observations made by
the Apex Court in the matter of M.P.Mathur Vs. DTC and Others,
(2006) 13 SCC 706, it has been held as under:
“12……..In equity the court has to strike a
balance between individual rights on one hand
and the larger public interest on the other hand.
Freedom to contract is a common law civil
liberty enjoyed by all persons. But when the
Government is contracting with private parties
this common law freedom is circumscribed by
the principles of administrative law which
requires larger public interest to be taken into
account…..
14. …..The discretion which the Court has to
exercise is a judicial discretion. That discretion
has to be exercised on well-settled principles.
Therefore, the Court has to consider – the
nature of obligation in respect of which
performance is sought, circumstances under
which the decision came to be made, the
conduct of the parties and the effect of the of
the Court granting the decree…..
15…….It was further observed that public
interest must override any consideration of
private loss or gain…….
17. He contended that in the light of the above submission and
denying the allegations contained in the petition, he submits that there is
no illegality and arbitrariness in cancellation of tender process.
18. After having heard the learned counsel for the parties, the prayer
of learned counsel for the petitioner firm is that now the financial bid was
opened on 21.11.2024 and that he participated in first bid, found eligible
and in the second bid also, the petitioner firm was found eligible and
therefore, the petitioner firm which was one of the contesting participant
and the financial bid has been opened. In the present case, bid price of
petitioner was opened by the Committee in presence of tenderers and
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petitioner was found to be lowest one. There was no known reasons for
cancellation of the entire tender process. The action of the respondents
is prejudicial to the interest of petitioner as his price quotation became
known to all interested tenderers and thus, action of respondents in
cancelling the entire tender process by Annexure P-1 is illegal and
arbitrary.
19. Accordingly, the writ petition is disposed of with costs to be
paid/compensated by the respondent No. 2 & 3 quantified at Rs.2 lakhs
to the petitioner firm within a period of one month from today.
20. It is needless to state that the petitioner is at liberty to participate
in fresh NIT floated by the respondents 2 & 3, if any.
Sd/- Sd/-
(Arvind Kumar Verma) (Ramesh Sinha)
Judge Chief Justice
Digitally signed
by SUGUNA
SUGUNA DUBEY
DUBEY Date:
2025.04.30
11:20:12 +0530
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