M/S Naga Builders And Suppliers vs. The State Of Nagaland And 5 Ors

Held

The Court held that while the process of limited tender enquiry followed in awarding the Contract-Work was not in conformity with the professed norms and standards laid down by the State respondents themselves, interference at the present stage would not be in public interest. The Court noted that the Contract-Work is a public project with significant public interest, and the State Government had accorded administrative approval for a limited tender process due to the nature and quantum of the work, the limited qualification of registered contractors, and the urgency to complete the project before the lapse of Central Government funds. The Court also observed that the petitioner had not alleged that the awarded contractor lacked eligibility or qualification, nor that the work was awarded at a higher price or that the estimated cost violated norms. Respondent no. 6 was the lowest bidder (L-1). Considering the substantial progress of the work (financial progress of 41% across all projects and milestone progress ranging from 45% to 65%), the Court concluded that rescinding the contract and initiating a fresh tender process would cause significant delay, escalate costs, and adversely impact public interest. Therefore, the Court decided not to interfere with the ongoing Contract-Work. The writ petition was rejected.

Facts

The petitioner, M/s Naga Builders and Suppliers, filed a writ petition challenging a work order dated March 25, 2022, awarded to respondent no. 6 for the construction of pre-fabricated indoor stadiums and multipurpose halls at six locations in Nagaland. The petitioner contended that the Notice Inviting Tender (NIT) was not published in newspapers, thus vitiating the award process. The contract value was Rs. 20,38,85,600/-. The petitioner learned about the award belatedly and filed the petition on June 6, 2022. An interim order restraining further construction was initially granted but later vacated, leading to an intra-court appeal which was dismissed, with directions for parties to file pleadings. The State and respondent no. 6 raised preliminary objections regarding locus and delay.

Key Issues

1. Whether the award of the Contract-Work vide Work Order dated 25.03.2022 is vitiated due to non-publication of the Notice Inviting Tender (NIT) in newspapers, thereby being arbitrary and contrary to the principles of distribution of State largesses, as argued by the petitioner? 2. Whether the writ petition is maintainable due to alleged inordinate delay and lack of locus on the part of the petitioner, as contended by the State and respondent no. 6? Petitioner's arguments: The petitioner argued that the absence of newspaper publication for the NIT renders the entire tender process illegal and arbitrary, necessitating its quashing and a fresh tender process. They relied on decisions in Yikhyao Lotha vs. State of Nagaland, Nagar Nigam, Meerut vs. Al Faheem Meat Exports [P] Ltd., and Jagdish Mandal vs. State of Orissa. The petitioner also explained the delay as being due to belated discovery of the tender irregularities. Revenue/State's arguments: The State and respondent no. 6 raised preliminary objections regarding the petitioner's locus standi to file the writ petition and argued that there was an inordinate delay in approaching the Court.