Gauhati High Court
Page No.# 1/22 vs The Guwahati Municipal Corporation And … on 9 January, 2025
Author: Michael Zothankhuma
Bench: Michael Zothankhuma
Page No.# 1/22
GAHC010204832024
2025:GAU-AS:309
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/5118/2024
UTTARAN SOCIAL WELFARE SOCIETY
A NON GOVERNMENTAL ORGANIZATION, HAVING ITS REGISTERED
OFFICE AT HENGRABARI FOREST GATE, NEAR DC OFFICE, GUWAHATI-
781036, REPRESENTED BY SRI MUNINDRA NARAYAN MEDHI, SON OF
LATE PRAFULLA CHANDRA KALITA.
VERSUS
THE GUWAHATI MUNICIPAL CORPORATION AND 2 ORS
GANESH MANDIR, GUWAHATI, PIN- 781006 AND IS REPRESENTED BY ITS
COMMISSIONER.
2:THE COMMISSIONER
THE GUWAHATI MUNICIPAL CORPORATION
GANESH MANDIR
GUWAHATI
ASSAM
3:ORION SOCIETY
A NON-GOVERNMENTAL ORGANIZATION HAVING ITS REGISTERED
OFFICE AT HOUSE NO. 142
WARD NO. 60
HATIGAON
PIN- 781018
DIST. KAMRUP(M)
ASSA
Page No.# 2/22
BEFORE
HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA
Advocate for the petitioner : Mr. D. Deka
Advocate for the respondent 1 & 2 : Mr. P. Nayak
Advocate for the respondent 3 : Mr. K. Bhattacharjee
Date of hearing : 18.12.2024
Date of Judgment : 09.01.2025
JUDGMENT AND ORDER (CAV)
1. Heard Mr. D. Deka, learned counsel for the petitioner. Also heard Mr. P.
Nayak, learned counsel for the Guwahati Municipal Corporation (‘GMC’ in short)
and Mr. K. Bhattacharjee, learned counsel for the respondent No.3.
2. The petitioner and the respondent No.3 amongst others had participated
in a Notice Inviting Tender dated 12.07.2024 (hereinafter referred to as the
‘NIT’) in respect to Package No.13, for carrying out the work of “Door to Door
Collection and Transportation of Municipal Waste in Various Wards of Guwahati
Municipal Corporation).” The petitioner and the respondent No.3 amongst
others had submitted their bids against Package No.13 pursuant to the NIT. In
terms of Clause 4.2.1(b) of the NIT, the bidder was to be a legal entity in
existence for more than 3 years and should have liquid assets and/or credit
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facilities of not less than Rs.50 lakhs. The petitioner’s grievance is that despite
the bid of the respondent No.3 being Rs.9.10/- per household, which is 81%
below the base/estimated price of the contract work, the respondent Nos.1 & 2
have not taken the Additional Performance Security from the respondent No.3,
in terms of the Notification No.530624/1 dated 30.07.2024 issued by the
Commissioner & Secretary to the Govt. of Assam, Finance Department.
3. The petitioner’s counsel submits that in terms of the above Notification
dated 30.07.2024, the Additional Performance Security to be furnished by the
respondent No.3, over and above the Performance Security that is to be
normally furnished, would amount to approximately Rs.1.5 crores. The
petitioner’s further grievance and the more important issue is the fact that the
respondent No.3 had been in existence as a legal entity for less than 3 years, at
the time of submission of it’s bid in terms of the NIT and as such, was ineligible
to participate in the NIT.
4. The petitioner’s counsel submits that the respondent No. 3 was registered
as a society under the Registration of Societies Act, 1860, as “Orion Society”
only on 06.10.2021. The NIT was issued on 12.07.2024 and the last date of
submission of bids was 30.08.2024. As such, on the last date of submission of
the bids in terms of the NIT, the respondent No.3 had been in existence as a
legal entity for only 2 years 10 months. The petitioner’s counsel submits that
when the essential condition of a tender has been violated, the bid of the
respondent No.3 should have been declared as non-responsive. However, the
bid has been declared to be responsive and the respondent No. 3 has been
awarded the contract.
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5. The petitioner’s counsel submits that in terms of the Societies Registration
(Assam Amendment) Act, 2019, which came into force on 04.09.2019, the
renewal of a registration of a society should be made within the validity period
of the registration period of the Society or within 1 month after the expiration of
the validity period of registration. Section 3D provides that when a society which
fails to get it’s certificate of registration renewed in accordance with Section 3C,
it’s registration lapses. The registered society will then cease to be a registered
society w.e.f. the actual date of expiration of it’s original registration or renewal
thereof and it’s name and other particulars shall be struck off from the register
in which it was earlier registered or renewed. It also provides that no
registration shall be struck off before the expiry of 12 months from the date of
expiry of the validity of the previous registration, whether original or renewed.
6. The petitioner’s counsel submits that even if “Orion Society” had been
registered earlier under the Societies Registration Act, the validity period of the
same having expired on 30.12.2017 and as Orion Society had been
subsequently registered afresh as a Society, by way of a new registration
number on 06-10-2021, the existence of the respondent No.3 as a legal entity
would have to be counted from the date it started to exist under the new
registration, the earlier “Orion Society” having the same name as the present
respondent No. 3, was a difficult/separate legal entity. The learned counsel for
the petitioner submits that once the registration of a society lapses and a new
registration is made, the society has to be considered to be a new Society.
However, in the present case, the name of Orion Society has remained the
same, despite having a new registration number, by flouting the norms of the
requirements in law requiring change of name of the lapsed Society. The
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petitioner’s counsel submits that in view of the fact that the respondent No.3 did
not have the required number of years as a registered legal entity, the Letter of
Acceptance issued to the respondent No.3 should be set aside and the State
respondents should be directed to reconsider the allotment of the contract to
the remaining tenderers.
7. Mr. P. Nayak, the learned counsel for the GMC submits that the Orion
Society, i.e., the respondent No. 3 had been in existence since 2011, as it was
registered under the Registration of Societies Act, 1860 vide Registration
No.RS/KAM(M)/240/A-29/599 of 2011-2012. He submits that just because the
Orion Society (respondent No. 3) had subsequently registered itself afresh with
a different number, i.e., RS/KAM(M)/263/X/233 of 2021-2022, the same did not
mean that the Orion Society (respondent No.3) had not been in existence since
the year 2011. As the conditions of the tender did not require the continuous
existence of Orion Society, the existence of Orion Society having two different
registration numbers would satisfy the requirement of the Clause, requiring a
bidder to be in continuous existence as a legal entity for 3 years.
8. Mr. P. Nayak, learned counsel for the GMC submits that the bid was
opened for any legal entity and it was not limited to an NGO/Society only. The
same was clearly spelt out in the bidding document and was reiterated in the
pre-bid meeting. He submits that as per the internal official records and
certificates attached with the bid of the respondent No. 3, it was confirmed that
the respondent No. 3 was operational and providing services to the Government
since in the year 2014. In this regard, the bidder had submitted more than
adequate documents such as – Work Orders, Letter of Acceptance, Employers
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(Government Departments) Certificate issued in the year 2013, 2014, 2017,
2019, 2020 and also 2024. The certificates were genuine and proved that the
respondent No. 3 was a legal entity that had been in existence for more than
three years. He also submits that the Pan Card submitted in the name of the
respondent No. 3 dates back to 1977, which substantiates the fact that the
respondent No. 3 was in existence from the year 1977. As such, the writ petition
being devoid of any merit should be dismissed. He further submits that as the
writ petitioner’s bid was found to be non-responsive and as such, the writ
petition should be dismissed. He also submits that as there is also alternative
remedy available, the petitioner should avail of the alternative remedy in making
a challenge to the selection of the respondent No. 3 as the successful bidder.
9. Mr. P. Nayak, learned counsel for the GMC submits that the respondent
No.3 had declared it’s liquid assets to be Rs.43,50,000/-, while the requirement
of the NIT required the bidder to have liquid assets of Rs.50 lakhs. He submits
that the same is a deviation which falls under Rule 23 sub-Rule 15 of the Assam
Public Procurement Rules, 2020 and also as per the bidding terms under Section
II of ITB 29, i.e., “immaterial non conformities in bid.”
10. Mr. P. Nayak submits that he does not wish to press his submission with
regard to the Societies Registration (Assam Amendment) Bill, 2022 being
applicable to the case in hand. He also submits that even if the writ petition
succeeds, no relief can be granted to the petitioner, in view of the fact that the
petitioner has also not challenged the bid of the other tenderers, whose bids
were L2 and L3.
11. The counsel for the GMC submits that as the GMC has been working with
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the respondent No.3 as a legal entity since the year 2014, there is no infirmity
with the Letter of Acceptance being issued to the respondent No.3 for the
contract work in question.
In support of his submissions, Mr. P. Nayak, the learned counsel for the GMC
has relied upon the judgments of the Supreme Court in (i) Tata Motors Ltd.
Vs. Brihan Mumbai Electric Supply & Transport Undertaking (BEST)
and Ors., reported in 2023 SCC OnLine SC 671, Para 52, 53 & 54 and (ii)
N.G. Projects Limited Vs. Vinod Kumar Jain, reported in (2022) 6 SCC
127 (Para 22).
12. Mr. K. Bhattacharjee, learned counsel for the respondent No.3 submits that
the Orion Society (respondent No. 3) had initially been registered under the
Registration of Societies Act, 1860 in the year 2011 and the registration had
been renewed up to 30.12.2017. However, due to the Covid-19 pandemic, the
renewal of the petitioner’s registration under the Registration of Societies Act,
1860 could not be done and as such, a fresh registration of the respondent No.
3 was done in the same name, i.e., “Orion Society” on 07.10.2021, with a
different registration number under the Registration of Societies Act, 1860. He
submits that the Orion Society’s registration has been renewed up to
14.10.2027. He also submits that he reiterates the submission made by Mr. P.
Nayak, learned counsel for the GMC.
13. I have heard the learned counsels for the parties.
14. To qualify for award of the contract, the NIT requires the Bidders to meet
the following minimum qualifying criteria:
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“a) The Bidder should have experience of Projects pertaining to Waste
Management or Door to Door Solid Waste collection continuously for the
last three years for any Municipal Corporation;
b) The Bidder must be a legal entity in existence for more than 3 years;
c) The bidder should have an average annual turnover of INR 25 Lakhs in
last three financial years ending March 2024 or March 2023 (incase
audited statement of Last financial year is not ready);
d) The bidder should have liquid assets and/or credit facilities, net of
other contractual commitments and exclusive of any advance payments
which may be made under the Contract, of no less than the amount of Rs.
50,00,000/-.”
15. As can be seen from the eligibility criteria required of bidders to participate
in the NIT, the bidder must be a legal entity in existence for more than three
years. It is an admitted fact that the said condition is an essential condition of
the NIT and as such, this Court would have to see whether the respondent No.
3 was a legal entity in existence for more than three years on the last date of
submission of the bid i.e. 30.08.2020.
16. The facts show that one Orion Society had been registered as “Orion
Society” under the registration of Societies Act, 1860 having Registration No.
RS/KAM(M)/240/A-29/599 of 2011-2012, which was valid upto 30.12.2014. The
registration had been made with the Registrar of Societies, Assam, Guwahati.
The said registration was extended upto 30.12.2017. The registration of the
earlier Orion Society, as a legal entity with the Registrar of Societies, Assam,
Guwahati, having Registration No. RS/KAM(M)/240/A-29/599 of 2011-2012, was
not extended beyond 30.12.2017. As such, the existence of the earlier Orion
Society as a legal entity expired on 30.12.2017. The respondent No. 3 herein
registered itself as a legal entity with the Registrar of Societies, Assam,
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Guwahati under the Registration of Societies Act, 1860, only on 06.10.2021,
having a different Registration No.RS/KAM(M)/263/X/233 of 2021-2022. The
fact that respondent No. 3 was registered as a legal entity with a different
Registration number then the earlier “Orion Society” clearly shows that the
respondent No. 3 was a new legal entity having a new avatar, inasmuch as, the
registration number of the respondent No. 3 was different than the earlier
registration number of the earlier Orion Society which existed as a legal entity
only till 30.12.2017.
17. The respondent No. 3, which is a new legal entity, cannot be said to be
the earlier Orion Society which whose existence was valid only up till
30.12.2017. The same is clear from the provisions of the Societies Registration
(Assam Amendment) Act, 2019, which came into force on 04.09.2019,
hereinafter referred to as the Amendment Act, 2019.
Section 3B, 3C and 3D of the Amendment Act, 2019 states as follows:-
“3B. Validity of Registration. Subject to compliance with the provisions
of section 4, a certificate of registration issued under section 3 shall remain
valid for a period of three years from the date of issue, but shall be subject
to renewal for further periods of three years at a time in accordance with
the provisions of section 3C:
Provided that no such registration shall be renewed if the provisions
of section 4 has not been complied with in full.
3C. Renewal of registration.- (1) A society registered under section 3
shall, on application made to the Registrar within the validity period of
registration or within one month of the expiration of the validity period of
registration referred to in section 3B and on payment of the fee as fixed
under section 3, and on filing the required documents as specified in the
website https://rfsfinance.assam.gov.in be entitled to have its certificate of
Page No.# 10/22registration renewed for three years at a time, subject to compliance of
section 4.
(2) The Register may refuse to renew the registration of a society,-
(i) if such society files the application for renewal of registration
beyond one month of the expiration of the validity period of
registration as referred to in section 3B:
Provided that the Registrar may condone the delay in filing
application for renewal by a society upto one year of the expiration of
validity period of registration, if he is satisfied on an application for
condonation of delay filed by the society and on payment by the
Society an additional fee equal to the amount of fee fixed for renewal
of registration as under sub-section (1) of this section that the society
was prevented by sufficient cause in filing the application within the
validity period of the registration:
Provided further that in case of rejection of the application for
condonation of delay, the Registrar shall give the society concerned a
reasonable opportunity of being heard and pass a speaking order;
(ii) if after giving an opportunity of being heard, he is satisfied that any
of the grounds as mentioned in sections 3A and 4 exists for refusal of
renewal of registration.
(3) There shall be paid to the Registrar with every application for
renewal of the certificate of registration.
(a) a fee equal to the registration fee payable under section 3 if such
application is filed within the period specified in section 3C(1), which
shall be accounted for to the State Government of Assam;
(b) an additional fee for delayed filing of application for renewal under
the first proviso to clause (1) of sub-section (2) of this section, which
Page No.# 11/22shall be accounted for to the State Government of Assam.
(4) Every application for renewal of the certificate shall be accompanied by
a list of the names, addresses and occupations of the Governors, councils,
directors, committees and other governing body then entrusted with the
management of the affairs of the society, elected after the registration of
the society or after the renewal of certificate sought to be renewed, unless
dispensed with by the Registrar for sufficient cause to be recorded in
writing.
(5) In the event of refusal of renewal of registration of a society, by the
Registrar under sub-section (2), the aggrieved society may prefer an appeal
before the Government of Assam, in the Finance (Establishment- B)
Department whose decision thereon shall be final.
3D. Effect of failure to Renew Registration. A Society which fails to
get its certificate of Registration renewed in accordance with section 3C, its
Registration lapses, and it shall cease to be a registered society with effect
from the actual date of expiration of its original registration or renewal
thereof and its name and other particulars shall be struck off from the
Register in which it was earlier registered or renewed:
Provided that no such registration shall be struck off before the expiry
of twelve months from the date of expiry of the validity of the previous
registration whether original or renewed.
Explanation :- For the purpose of calculating the twelve months period, the
month in which the previous registration whether original or renewal, had
expired shall be taken as one full month irrespective of the day of the
month of such expiration of the registration or renewal.”
18. A perusal of the above Sections 3B, 3C and 3D of the Amendment Act,
2019 clearly shows that a certificate of registration under the Societies
Registration Act, 1860 shall remain valid for a period of three years from the
date of issue, but shall be subject to renewal for further periods of three years
Page No.# 12/22at a time. A Society registered under Section 3 with the Registrar can have its
license renewed on an application made to the Registrar, within the validity
period of a registration or within one month of the expiration of the validity
period. The Registrar may also condone the delay in filing the application for
renewal by a society upto one year of the expiration of the validity period of
registration. Section 3D of the Amendment Act, 2019 clearly provides that a
Registration shall lapse if the Society fails to get its certificate of Registration
renewed in accordance with Section 3C. It further states that the said Society
shall cease to be a registered society with effect from the actual date of
expiration of its original registration or renewal thereof and its name and other
particulars shall be struck off from the Register in which it was earlier registered
or renewed.
19. The above provisions of the Amendment Act, 2019 clearly shows that the
respondent No. 3 cannot be said to be the same legal entity that is “Orion
Society” having the Registration No.RS/KAM(M)/240/A-29/599 of 2011-2012,
whose validity had expired on 30.12.2017.
20. The present “Orion Society” i.e. respondent No.3 is a new legal entity only
w.e.f. 06.10.2021, having a different registration number. The present
respondent no.3 is a legal entity only from the date of it’s registration with the
Registrar of Societies under the Societies Registration Act, 1860 on 06.10.2021.
Thus it became a juristic person only on 06.10.2021 having the capacity to enter
into agreement of contract, assume obligations, incur pay and debts, sue and be
sued in it’s own right and to be accountable for it’s activities. In the absence of
registration of “Orion Society” w.e.f. 06.10.2021, the said Society cannot be said
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to have been a legal entity/juristic person. The present respondent No. 3 not
having completed three years as a legal entity at the time of the last date of
submission of the bid in terms of the NIT in respect of Package No. 13, the
State respondents could not have considered the bid of the respondent No. 3.
21. In the case of Tata Motors Limited Vs. Brihan Mumbai Electric
Supply & Transport Undertaking (Best) and Ors.,(Supra), the Supreme
Court, after referring to it’s other decisions, held that ordinarily, a writ court
should refrain from imposing its decision over the decision of the employer, as to
whether or not to accept the bid of a tenderer unless something very gross or
palpable is pointed out. The Court should ordinarily not interfere in matters
relating to tender or contract. It further held that the award of a contract,
whether by a private party or by a State, is essentially a commercial transaction.
It can choose its own method to arrive at a decision and it is free to grant any
relaxation for bona fide reasons, if the tender conditions permit such a
relaxation. It further held that the State and its instrumentalities have the public
duty to be fair to all concerned. Even when some defect is found in the decision
making process, the Court must exercise its discretionary powers under Article
226 with great caution and should exercise it only in furtherance of public
interest and not merely on the making out of a legal point. It further held that
the Court should bear in mind that evaluation of tenders and award of contracts
are essentially commercial functions and principles of equity and natural justice
stay at a distance in such matters.
22. In the case of N.G. Projects Limited Vs. Vinod Kumar Jain (Supra) ,
the Supreme Court has held that the position of law with regard to the
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interpretation of the terms of the contract is that, the question as to whether a
term of the contract is essential or not is to be viewed from the perspective of
the employer and by the employer. It further held that the satisfaction whether
a bidder satisfies the tender condition is primarily upon the authority inviting the
bids. Such authority is aware of the expectations from the tenderers, while
evaluating the consequences of non-performance.
23. In the present case, the eligibility criteria of a bidder to be able to
participate in the NIT, is that it should be a legal entity for a period of atleast
three years at the time of submission of its bid. However, in the present case,
the respondent No. 3 has not fulfilled the essential terms of the tender, as it was
not a legal entity for three years at the time of the last date of submission of
the bid in terms of the tender. The respondent No. 3 with its Registration No.
RS/KAM(M)/263/X/233 of 2021-2022 is a separate legal entity from the earlier
Orion Society which had a different Registration Number, whose validity expired
on 2017. There is nothing to show that the essential condition of the NIT could
be relaxed or had been relaxed. It is also not the stand of the State respondents
that the essential condition had been relaxed. The stand of the State
respondents is that the respondent No. 3 fulfilled the said tender condition.
However, the facts show otherwise. Thus, the consideration of the bid of the
respondent No. 3 by the State respondents was not only arbitrary, but it was
also unreasonable.
24. The above being said, the Supreme Court in the case of Ramana
Dayaram Shetty Vs. International Airport Authority of India and Ors.,
reported in (1979) 3 SCC 489 has held that it is a well settled rule of
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administrative law that an executive authority must be rigorously held to the
standards by which it professes its actions to be judged and it must scrupulously
observe those standards on pain of invalidation of an act in violation of them.
25. In the case of Vidarbha Irrigation Development Corporation & Ors.
Vs. Anoj Kumar Agarwala and Ors., reported in (2020) 17 SCC 577, the
Supreme Court has held that the words used in the tender document cannot be
ignored or treated as redundant or superfluous – they must be given meaning
and their necessary significance. If further held that if an essential tender
condition which had to be strictly complied with was not so complied with, the
State respondents would have no power to condone the lack of such strict
compliance.
26. In the case of Air India Limited Vs. Cochin International Airport
Ltd., reported in (2000) 2 SCC 617, the Supreme Court has held that the
award of a contract, whether it is by a private party or by a public body or the
State, is essentially a commercial transaction. In arriving at a commercial
decision, considerations which are of paramount are commercial considerations.
The State can choose its own method to arrive at a decision. It can fix its own
terms of invitation to tender and that is not open to judicial scrutiny. It can
enter into negotiations before finally deciding to accept one of the offers made
to it. Price need not always be the sole criterion for awarding a contract. It is
free to grant any relaxation, for bona fide reasons, if the tender conditions
permit such a relaxation. It may not accept the offer even though it happens to
be the highest or the lowest. But the State, its corporations, instrumentalities
and agencies are bound to adhere to the norms, standards and procedures laid
Page No.# 16/22
down by them and cannot depart from them arbitrarily. Though that decision is
not amenable to judicial review, the Court can examine the decision making
process and interfere if it is found vitiated by malafides, unreasonableness and
arbitrariness. The State, its corporations, instrumentalities and agencies have
the public duty to be fair to all concerned.
27. In the case of Central Coalfields Limited & Another Vs. SLL-SML
(Joint Venture Consortium) & Others, reported in (2016) 8 SCC 622
(47), the Supreme Court has held that the issue of the acceptance or rejection
of a bid or a bidder should be looked at, not only from the point of view of the
unsuccessful party, but also from the point of view of the employer. It further
held that there must be judicial restraint in interfering with administrative
action. Ordinarily, the soundness of the decision taken by the employer ought
not to be questioned, but the decision making process can certainly be subject
to judicial review.
28. In the case of M/S Sorath Builders Vs. Shreejikrupa Buildcon
Limited & Another, reported in (2009) 11 SCC 9 (26 & 27), the Supreme
Court referred to another of it’s decision in W.B. State Electricity Board Vs.
Patel Engineering Co. Ltd. And Others, reported in (2001) 2 SCC 451,
wherein it had held that adherence to the instructions cannot be given a go-by,
otherwise it will encourage and provide scope for discrimination, arbitrariness
and favouritism, which are totally opposed to the rule of law and constitutional
values. It further held that the very purpose of issuing rules/instructions is to
ensure their enforcement, lest the rule of law should be a casualty.
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29. In view of the fact that the State respondents have not adhered to the
essential conditions of the NIT and have acted arbitrarily and unreasonably in
considering the bid of the respondent No. 3, this Court finds that the petitioner
had made out a case for interference in the present writ petition.
30. Though the State respondents have taken a stand that the present
respondent No. 3 is the same Orion Society, which was registered in the year
2011 with the Registrar of Societies due to the use of a PAN Card which was
issued in the year 1977, this Court is of the view that the said submission does
not cut any ice, in view of the fact that the PAN Card which has been issued in
the year 1977 would have to be made relatable to the Orion Society which was
in existence in the year 1977. The respondent No. 3, on the other hand, has a
different registration number and was registered as a new legal entity only in
the year 2021. As such, it was only from 07.10.2021 that the respondent No. 3
can be said to have legal rights and obligations, who could enter into contracts
and be sued and could sue. It could be held accountable for its actions only
from 07.10.2021.
31. It is surprising to note that the GMC have made an averment in their
affidavit that the bid of the petitioner was found non-responsive. No document
to that effect has been reproduced by the State respondents and neither has
any reason been given in their affidavit by the State respondents, as to why the
petitioner’s bid was non-responsive. It is the view of this Court that if the State
respondents have not given any reason or shown any document which has been
issued by them to the petitioner or to this Court, with regard to the above
averment, the said averment is arbitrary and is violative of Article 14 of the
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Constitution.
32. In the case of NHAI Vs. Madhukar Kumar, reported in (2022) 14 SCC
661, the Supreme Court has held that every State action must be fair, failing
which, it will fall foul of the mandate of Article 14. It also held that the
advantages of introducing reasons has advantages, inasmuch as, persons who
may have a right or interest, would know what are the reasons which impelled
the State respondents to take a particular decision. Judicial review, would
receive immeasurable assistance, if reasons for particular decisions, are
articulated to the extent possible. Conversely, the absence of reasons may
unerringly point to non-application of mind. The Supreme Court further held
that there cannot be any doubt that, for every decision, there would be and
there must be, a reason.
Para 70 to 73 of the judgment of the Supreme Court in NHAI Vs.
Madhukar Kumar (Supra), is reproduced herein below as follows:-
“70. It is apposite, at this juncture, to notice that administrative
decisions are made in a wide spectrum of situations and contexts. The
executive power of the Union and States are provided in Articles
73 and 162 of the Constitution of India, respectively. Undoubtedly, in
India, every state action must be fair, failing which, it will fall foul of the
mandate of Article 14. It is, at this juncture, we may also notice that the
duty to give reasons, would arise even in the case of administrative
action, where legal rights are at stake and the administrative action
adversely affects legal rights. There may be something in the nature or
the context, under which, the administrative action is taken, which may
necessitate the authority being forthcoming with rational reasons. There
are other decisions, which essentially belong more to the realm of
executive policy-making, which ordinarily may not require the furnishing
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71. The advantages, undoubtedly, of introducing a reasons driven
regime, are as follows. Persons, who may have a right or an interest,
would know, what are the reasons which impelled the Administrator to
take a particular decision. Judicial review, in India, which encompasses
the wide contours of public interest litigation as well, would receive
immeasurable assistance, if the reasons for particular decisions, are
articulated to the extent possible. The giving of reasons also has a
disciplining effect on the Administrator. This is for the reason that the
reasons would capture the thought process, which culminated in the
decision and it would help the Administrator steer clear of the vices of
illegality, irrationality and also disproportionality. Reasons could help
establish application of mind. Conversely, the absence of reasons may
unerringly point to non-application of mind. The duty to act fairly, may
require reasons to be recorded but the said duty, though there is a
general duty on all state players to act fairly, may have its underpinnings,
ultimately in legal rights.
72. It is one thing to say that there should be reasons, which persuaded
the Administrator to take a particular decision and a different thing to find
that the reasons must be incorporated in a decision. The question,
relating to duty to communicate such a decision, would arise to be
considered in different situations, having regard to the impact, which it, in
law, produces. In fact, the second proviso to Rule 17 of the Rules,
provides not only for there being reasons, but the reasons for refusal to
permit barricades, must be communicated. If the law provides for a duty
to record reasons in writing, undoubtedly, it must be followed and it would
amount to the violation of the Statute, if it were not followed. Even if,
there is no duty to record reasons or support an order with reasons, there
cannot be any doubt that, for every decision, there would be and there
must be, a reason.
73. The Constitution does not contemplate any Public Authority,
exercising power with caprice or without any rationale. But here again, in
the absence of the duty to record reasons, the court is not to be clothed
Page No.# 20/22with power to strike down administrative action for the mere reason that
no reasons are to be found recorded. In certain situations, the reason for
a particular decision, may be gleaned from the pleadings of the Authority,
when the matter is tested in a court. From the materials, including the file
notings, which are made available, the court may conclude that there
were reasons and the action was not illegal or arbitrary. From admitted
facts, the court may conclude that there was sufficient justification, and
the mere absence of reasons, would not be sufficient to invalidate the
action of the Public Authority. Thus, reasons may, in certain situations,
have to be recorded in the order. In other contexts, it would suffice that
the reasons are to be found in the files. The court may, when there is no
duty to record reasons, support an administrative decision, with reference
to the pleadings aided by materials.”
33. In the present case no reason has been furnished by the State respondents
nor any communication made to the petitioner by the State respondents that
the petitioner’s bid was non-responsive. The only thing stated in the affidavit-in-
opposition filed by the State respondents is provided in a part of para 3, which
is as follows:-
“In this regard it is further submitted that the allegations made in the
writ petition are baseless, as the same are raised by a bidder who himself
was found non-responsive.”
34. In view of the fact that no reasons had been provided by the State
respondents as to why the petitioner’s bid was declared to be non-responsive,
this matter was again listed on 07.01.2025, giving an opportunity to the State
respondents to give reasons as to why the petitioner’s bid was declared non-
responsive. Mr. P. Nayak, learned counsel for the respondent nos.1 & 2 has
submitted a document dated 07.01.2025, which gives reasons for declaring the
petitioner’s bid as non-responsive. The document shows that the petitioner’s
Page No.# 21/22
declared liquid assets was only Rs.40,00,000/-, while the tender conditions
required a bidder to have liquid assets not less than Rs.50,00,000/-. Thus, on
this ground the petitioner’s bid was declared to be non-responsive, as it was in
violation of the tender condition.
35. On considering the reason given by the State respondents for declaring
the petitioner’s bid to be non-responsive, this Court finds the said decision to be
arbitrary and discriminatory, inasmuch as, the State respondents have also
admitted the fact that the respondent no.3 had declared liquid assets of
Rs.43,50,000/-. However, as the respondent no.3 had submitted a separate
Undertaking for Cash Investment of 100%, such deviation was held by the State
respondents to fall within Rule 23 Sub-Rule (15) of the Assam Public
Procurement Rules, 2020 and also as per bidding terms under Section II of ITB
29, wherein it was provided that rejecting a lowest bidder for immaterial
deviations was not justified as per applicable Regulations. This Court is of the
view that if the bid of the respondent no.3, who had liquid assets below
Rs.50,00,000/- could be held to be a deviation which was justified, even though
the same was in conflict with the eligibility requirements of a bidder, there was
no justification in giving a discriminatory treatment to the bid of the petitioner,
whose bid amount was also below Rs.50,00,000/-. In that view of the matter,
this Court is of the view that the declaration of the petitioner’s bid as non-
responsive on the ground that his liquid assets was below Rs.50,00,000/- was
not sustainable, as the State respondents cannot be allowed to blow hot & cold
and discriminate between different bidders on the same issue. The declaration
of the petitioner’s bid as non-responsive on this score is accordingly set aside,
as sauce for the goose is also sauce of the gander.
Page No.# 22/22
36. In view of the reasons stated above, this Court is of the view that the
selection of the respondent No. 3 as the successful tenderer and the issuance
of the Letter of Acceptance to the respondent No. 3 should be set aside. The
same are accordingly set aside.
37. The selection of the successful tenderer should be made on the basis of
the remaining valid tenders, which includes the petitioner’s tender, in pursuant
to the NIT dated 12.07.2024 in respect of Package No. 13.
38. In view of the reasons stated above, this Court has not gone into the other
issue raised by the petitioner, i.e. why Additional Performance Security has not
been taken from the respondent no.3, in terms of the Notification No. 530624/1
dated 30.07.2024.
39. The writ petition is accordingly allowed.
JUDGE
Comparing Assistant
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