Mohinder Kalta And Another vs. State Of Hp And Others

Held

The Court allowed the petition, quashing the award of work to respondent No. 5 for the upgradation of Matiana, Mahori to Chhaila Road. The Court found clear traces of repugnance to the required fairness and reasonableness in the conduct of respondents 1 to 3 in the decision-making process, culminating in the award to respondent No. 5. It was held that respondent No. 5 did not fulfill the requirements of SBD Clause 4.4 A(b) because it was not established that he was an authorized sub-contractor for the Shongtong Karchham HEP work, he could not use his purported dual persona to defeat NIT requirements, and respondents 1 to 3 had not shown unequivocal satisfaction regarding the similarity of works executed by M/S Kinner Kailash Company and the required work. The Court found the justifications provided by the respondents insufficient to certify the absence of arbitrariness, unreasonableness, and bias. The Court also noted that the respondents had botched and abused their jurisdiction in dealing with the complaint of PK Construction. The argument that work had commenced was rejected, as more than 97% of the work remained. The Court directed respondents 1 to 3 to re-tender the remaining work within one month.

Facts

This Public Interest Litigation (PIL) was filed by Mohinder Kalta and another (petitioners) against the State of Himachal Pradesh and others (respondents). The petitioners, elected representatives, challenged the award of work for the upgradation of Matiana, Mahori to Chhaila road under PMGSY package No. HP-09-694, awarded to respondent No. 5 (Om Parkash Mehta) on March 15, 2024. The estimated cost of the work was Rs. 2335.88 lacs. The petitioners alleged arbitrariness, unreasonableness, and bias in the award process, questioning the credentials of respondent No. 5 based on his performance on a previous, incomplete, and sub-standard project (Guthan Road). They also raised concerns about the handling of a complaint filed by a competing bidder, M/s P.K. Construction Pvt. Ltd., regarding respondent No. 5's qualifications.

Key Issues

1. Whether the award of work to respondent No. 5 for the upgradation of Matiana, Mahori to Chhaila road was arbitrary, unreasonable, and biased, violating the principles of fairness and transparency in public contracting, particularly in light of the alleged non-compliance with Clause 4.4 A (b) of the Standard Bidding Document (SBD) and the handling of the complaint by M/s P.K. Construction Pvt. Ltd.? (Question of law and mixed fact and law, concerning principles of administrative law and contract award procedures). Petitioner's arguments: The petitioners contended that respondent No. 5 lacked the necessary credentials and work capacity, citing his poor performance on the Guthan Road project. They argued that a complaint filed by M/s P.K. Construction Pvt. Ltd. detailing respondent No. 5's disqualifications was suppressed by the official respondents, who initially stated no complaint was received. They highlighted contradictory stands taken by the official respondents regarding the complaint and argued that Clause 4.4 A (b) of the SBD, a foundational requirement for bidder eligibility, was violated. They also sought inquiry into the delay and poor execution of the Guthan Road project awarded to respondent No. 5 in 2019. Respondents' arguments: The respondents argued that the decision-making process was sound and that the employer had the authority to deviate from tender terms if applicable to all bidders. They justified the award to respondent No. 5 by stating his work was supported by income tax returns and that he had executed other PMGSY works satisfactorily. They also claimed the complaint from M/s P.K. Construction was scrutinized and found to have no base, or alternatively, was withdrawn. They further argued that since the work had commenced and a significant amount had been executed, the court should not interfere.