State Officers Expected To Be More Vigilant & Cautious In Tender Cases As Wider Public Interest Is Involved: Madhya Pradesh High Court

The Madhya Pradesh High Court observed that the State Officers are expected to be more vigilant and cautious in tender cases, because wider public interest and public exchequer is involved.

The Gwalior Bench observed thus in a Writ Petition filed by a company against the Madhya Pradesh Housing and Infrastructure Development Board.

A Division Bench comprising Justice Anand Pathak and Justice Hirdesh remarked, “Perusal of said Corrigendum-3 indicates that respondent no.2 again resorted to original NIT and therefore conditions No.1 and 2 mentioned earlier in NIT (as Special Conditions) were kept intact and two conditions of fire fighting and lift/elevator were removed. Such intermittent stand taken by the respondent No.2 creates suspicion and reflects over the working of respondent No.2. In sensitive matter like tender worth Rs.65.73 crores officers are expected to be more vigilant and cautious because wider public interest and public exchequer is involved. Public Interest and Public Exchequer can not lie at the mercy of whims of some officers.”

The Bench emphasised that the authorities have to be fair and honest in their approach when going for bidding.

Senior Advocate Harish Dixit appeared for the Petitioner, while Senior Advocate Vivek Khedkar appeared for the Respondents.

Case Background

The Petitioner company was engaged in construction works and was a registered contractor executing various government works. The Respondent-Board was a statutory body established under Section 3 of M.P. Grah Nirman Mandal Adhiniyam, 1972, having power to contract. It was incorporated to perform public duty of providing housing accommodation to the public at large. In exercise of powers conferred under Sections 103 and 17 of the Adhiniyam, the Board framed Conduct of Business and Delegation of Powers Regulations 2015. Dy. Housing Commissioner (DHC) published a notice inviting percentage rate tender in the newspapers from registered contractors for construction work in Gwalior. DHC issued tender Corrigendum vide letter regarding rescheduled date and time of opening of the tender.

Bid of the Petitioner was found lowest and therefore; it was informed through email that its bid had been opened and admitted. An email was received about the acceptance of bid and the Respondents sought certain information from the Petitioner, which was provided. However, matter was kept pending for about one month and thereafter, an order was passed by the Additional Commissioner of Housing Board, Bhopal whereby it was held that by of Corrigendum-3 special conditions of original NIT (Notice Inviting Tender) were deleted and hence, another company was also eligible but its bid was not considered, therefore, process is vitiated. Resultantly, direction for fresh bid was given. Being aggrieved, the Petitioner approached the High Court.

Reasoning

The High Court in view of the facts and circumstances of the case, said, “If the Corrigendum-3 relegates the conditions to original NIT and with this conditions if petitioner and another bidder (M/s Shrivardhnam) stood qualified in all criteria, then disqualified bidder (M/s Paliya Construction herein) had no occasion to make complaint. It never asserted that it fulfilled criteria. Respective assessment of bidders finds place with the chart appended with Annexure P/15. The petitioner and one M/s Shrivardhnam stood qualified in technical bid. Complaint of M/s Paliya Construction does not reveal any substantial ground except the change of conditions. On its objection respondent No.2 halted the procedure and enquired.”

The Court asked that when Additional Commissioner himself dissatisfied the objection raised by the disqualified bidder and thereafter directed to proceed for opening of financial bid vide letter, then how he can change his stand within 45 days and pass impugned order.

“This smakes mischief on the part of respondent No.2. On his instructions, conditions changed intermittently. His conduct throughout the process of NIT was unprofessional and doubtful. He took the whole process very lightly. Respondents have to harbor the thought that by inviting tender they become repository of public faith and their conduct should be such fair and transparent that every bidder should feel that process of bidding proceeded with utmost fairness and transparency. Process is not only to be fair but it has to appear to be fair. Here process of bidding was not fairly conducted”, it added.

The Court was of the view that when original conditions were already restored vide Corrigendum-3, then it was the duty of all the officers to take the bids to its logical end.

“They had to place the matter before the Board as per Section 23 of the Adhiniyam and Regulation 11 of the Regulations. Therefore, such intermittent and ad hock approach and decision taken, that too, when bid was finalized and intimation was given to the petitioner suffer from arbitrariness, irrationality and procedural impropriety”, it noted.

The Court further observed that many a times, it is observed that after completion of tender process, all process is aborted and denovo process is started and this shakes the credibility of process.

“At times, it prejudices the development of entrepreneurship and it proliferates corruption, nepotism and crony-capitalism. Best bidder should prevail for wider public interest”, it added.

The Court held that not only on the ground of illegality, but also on the grounds of irrationality and procedural impropriety, case of the Petitioner succeeds.

Conclusion

The Court also said, “Therefore, Clause 19.5 is not so sacred or sacrosanct that in any eventuality it insulates the whole process of bid. No, it is not. Respondents have to be fair, transparent and honest in their approach when go for bidding. These are the only insulators rather than any clause inserted in the bid. In the garb of such cloak respondents cannot be permitted to carry out mischief.”

The Court, therefore, directed that the Board shall consider the discussion made in the order, submissions raised by the Petitioner, reports of the officers and Judgments referred in the order and thereafter pass a reasoned order in accordance with law.

“Any query if is is required to be raised, then Board can certainly raise with the petitioner and respondents for its satisfaction. Whole exercise shall be completed within two months as an outer limit. Looking to the conduct of respondent No.2 (Additional Commissioner), Board is directed, not to involve respondent No.2 in the whole process of bid discussion in any manner, to bring fairness and transparency in decision making process”, it ordered and concluded.

Accordingly, the High Court allowed the Writ Petition, set aside the impugned order, and relegated the case to the Business Committee to consider the proposal of the Petitioner and place the case before the Board.

Cause Title- Pragmatic Infrastructure Pvt. Ltd. v. Madhya Pradesh Housing and Infrastructure Development Board and Others (Case Number: WRIT PETITION No. 11842 of 2025)

Appearance:

Petitioner: Senior Advocate Harish Dixit and Advocate Nimish Hardeniya.

Respondents: Senior Advocate Vivek Khedkar and Advocate Nakul Khedkar.

Click here to read/download the Order