Karnataka High Court
M.K. Hegde Constructions Private ... vs The Karnatak University, Dharwad And ... on 21 September, 2001
Equivalent citations: AIR2002KANT41, 2002(2)KARLJ581, AIR 2002 KARNATAKA 41, 2001 AIR - KANT. H. C. R. 2905, (2002) 2 BANKCAS 384, (2002) 2 KANT LJ 581
Author: R. Gururajan
Bench: R. Gururajan
ORDER R. Gururajan, J.
1. The petitioner-M/s. M.K. Hegde Constructions Private Limited, is before this Court seeking for a mandamus to respondents 1 to 3 to consider the tender submitted by the petitioner and to evaluate the same along with other tenders.
2. The facts are as under:
The 3rd respondent, by a notification dated 24-11-2000 invited pre-qualification tender from first class contractors registered with Public Works Department (for short "PWD"). The said tender was invited for construction of a Golden Jubilee Complex. The last date for submitting the filled up Tender was 26-2-2001. The petitioner applied for tender form from 3rd respondent. The said form was given to the petitioner. As per the tender form, every tenderer is required to submit EMD of Rs. 2,09,520/- in the form of DD of any Scheduled Bank or Bank Guarantee/National Savings Certificates.
3. Clause 14 provides for acceptance of EMD only, in any of the form stated above. The petitioner submitted the filled up tender along with all the necessary documents and EMD for Rs. 2,10,0007- in the form of Bank Guarantee on 26-2-2001, at about 2.00 p.m. Only ten tenderers were pre-qualified on the basis of the earlier ones. Out of 10 tenderers, only 7 tenderers submitted their tenders. Out of 7 tenderers, the tenders of 5 contractors were opened on 26-2-2000 at about 6.00 p.m. The following 5 tenderers have given the tenders as follows:
Sl.
No. Name of the Contractor Assured Amount (1) D.B. Masur Rs.
2,46,00,784.91 (2) S.N. Bounsle Rs.
2,65,14,527.00 (3) M/s. Suprada Constructions Rs.
2,73,40,408.00 (4) J.G. Nippani Rs.
3,27,61,825.00 (5) Shivaprakash Hiremath Rs.
2,69,83,275.00 The petitioner was asked to be present at the time of opening of the tenders. The petitioner was intimated that his tender will not be opened along with the other tenders only for the reason that he has not submitted his tender in two separate envelopes. According to the petitioner, the tender forms and notification does not specify that the tenderer should submit their tenders in 2 separate envelopes. The tender submitted by the petitioner is not considered along with the other tenderers. The petitioner had submitted all the required documents and also EMD in the form of Bank Guarantee along with its tender. The petitioner's tender is the lowest tender. Respondent 3 has accepted the tender of the 4th respondent, whose tender amount is more than 29 lakhs compared to that of the petitioner. The petitioner has stated that all other tenderers have pre-planned and joined together to eliminate the petitioner. The 3rd respondent has not followed proper procedure while opening the tenders. A letter dated 12-2-2001 was issued to all the pre-qualified tenderers including the petitioner. The letter states that EMD of Rs. 2,09,520/- is to be paid in the form of Demand Draft. In the said letter it is stated that the tender is to be submitted in two envelopes, one containing EMD and the other envelope containing the tender form and other documents in duplicate. But the said conditions are not part of the tender form or notification. The petitioner is before this Court complaining about the non-consideration of his tender on the ground of not providing two envelopes in the case on hand.
4. Notice was issued pursuant to which the respondents have entered appearance.
5. The contesting respondents have filed a detailed counter. In the counter, it is admitted that 10 contractors were qualified. It is also stated in the counter that the communication in terms of Annexure-D provides for two covers. According to the respondents, 5 applicants submitted the tenders in two separate covers in terms of Annexure-D, whereas two applicants submitted their tender only in one cover. It was noticed that the petitioner and one Sri K Shivakumar submitted the tender in one cover whereas the 5 other applicants have submitted the tender in two covers as stated in the communication at Annexure-D. The representatives of five applicants who had submitted application in two separate covers objected to the tenders submitted in one cover. According to the respondents, the petitioner is not entitled for any relief. With these averments, the contesting respondents want the writ petition to be dismissed. The contesting respondent has also filed a counter-statement. He almost takes the same stand. Even according to this respondent, the petitioner is not entitled for any relief.
6. Heard the Counsels for the parties.
7. The only question that requires for consideration is that as to whether the facts of the case provide a condition of two covers or not for consideration of a tender. To find out this aspect of the matter, it is necessary to refer to the material documents, which would provide an answer to the questions raised in this petition. Annexure-A is a tender notification. Annexure-B is a tender notice (for item rate tender). It contains several clauses with regard to the submission of the tender. Clauses 13 and 14 are to be noticed to resolve this issue. The said two clauses read as under:
"13. Tender in respect of works costing more than Rupees one crore should be submitted in two sections. The first section should indicate the item-wise basic rates offered by the contractors, on the basis of the contract specification, Schedule 'A' and Schedule 'B' to the contract form. The contractors should neither make any alterations in the conditions of contract nor stipulate any conditions of their own the first section of the tender.
The second section of tender should contain the condition and stipulations, if any, proposed by the contractors.
14 (a) Each tenderer must pay an earnest of Rs. 2,09,520/-(Rupees....) in challan from SBI, K.U. Campus, Dharwad or DD of any Scheduled Bank/Bank Guarantee/National Savings Certificate, Deposit at call receipt and attach to his tender the Challan/DD/Bank Guarantee, etc., in default of which his tender will be rejected".
8. Clause 29 is a clause providing for rejection of the tender of contractor who does not accept the condition contained in the tender documents. It is no doubt true that certain special condition for tendering is provided in terms of a notification. The special condition for tendering provides for enclosure of EMD. It is also true that a letter dated 12-2-2001 was issued to various contractors. That letter provides for submission of EMD. It states that EMD is to be by way of Demand Draft from any Scheduled Bank. It further provides for furnishing of duplicate copies of tender documents in a sealed cover. Admittedly, in the case on hand, the petitioner has provided EMD. The same is admitted. The defence of the respondents for non-consideration of the tender of the petitioner is that the petitioner has failed to provide two covers in terms of a letter addressed to the petitioner. Let me see as to whether this would result in rejection of a tender. Admittedly, Annexure-D is only a letter. It provides for EMD. It further provides for non-opening of the tender in the event of non-compliance of these conditions. This is not a part of tender conditions. On the other hand, the tender conditions in terms of Clause 14(a) provides for earnest money by way of DD of any Scheduled Bank/Bank Guarantee/National Savings Certificate. It only provides for attachment of the same to the tender form, in default of which, his tender will be rejected.
It is the case of the respondents that the tender is rejected only for failure to submit two covers in terms of the letter. As I mentioned earlier, Annexure-D cannot be given the status of a tender condition. It is at the most, a communication to the party concerned in the matter of EMD. The relevant condition is only Clause 14(a). So long the petitioner is not violating the said tender condition his case cannot be rejected on the ground of his failure to submit EMD/Tender in two separate covers in terms of a letter as contended by the respondents. There is no specific clause providing for two covers in the tender documents and there is no further clause providing for rejection in the event of the failure to provide in two covers in tender conditions. In these circumstances, the non-consideration of the petitioner is contrary to the tender conditions and I have to accept the arguments of Mr. Hegde, learned Counsel in this regard. The arguments of respondents, that the rejection is proper and legal in the light of this violation of a letter cannot be accepted.
9. The Supreme Court has considered arbitrariness in the case of Kumari Shrilekha Vidyarthi and Ors. v. State of Uttar Pradesh and Ors., and rules that arbitrary action of public authority is amenable to judicial review.
10. In the case of Sterling Computers Limited v. M and N Publications Limited and Ors., , the Supreme Court has again ruled that State action in commercial transactions must be in consonance with Article 14. Any decision taken in violation of Article 14 can be judicially reviewed by a Court of law.
11. The Supreme Court, again in the case of L.I.C. of India and Anr. v. Consumer Education and Research Centre and Ors., , has ruled that any action by a public authority has to be in public interest and should not be arbitrary or unjust or unfair.
12. The Supreme Court again in the case of Dutta Associates (Private) Limited v. Indo Merchantiles (Private) Limited and Ors., , has ruled that whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in the tender notice.
13. The Supreme Court in the case of Rajesekhar Gogoi v. State of Assam , , has considered the scope of a condition in the matter of rejection. The Apex Court in para 11 has ruled as under;
"We are, therefore, of the opinion that as the tender itself of respondent 4 was liable to be rejected because of lack of particulars as stated hereinabove, no further question arises. We do not agree with the observation of the High Court that Rule 206 is not mandatory. The language of the said rule is clear and unambiguous. It not only says that the tenders must be in their required form but also stipulates the consequence of non-compliance thereto, the consequence being that the tenders not containing all the particulars shall be liable to be rejected".
This Court in Syed Yusuff v. The Corporation of the City of Bangalore and Ors., 1987(2) Kar. L.J. 119, has ruled as under:
"Contention in this Court is that Demand Draft and Banker's cheque which he submitted are one and the same as certified by the Bank filed at Annexure-C to the petition, That certificate is dated 21-5-1987 whereas the tender was much earlier. Even the scrutiny and rejection also was earlier than the certificate. Technically it may be true that the Demand Draft payable to the Executive Engineer or a Banker's cheque payable to the Executive Engineer of the Corporation, may ensure the payment of the money. But if the conditions stipulated a particular mode of payment (in this case two modes) it is not open to the tenderer to adopt a third mode of his choice and then contend that the authorities are wrong in rejecting his tender, though there is no evidence prima facie that his tender has been rejected for that reason only".
14. After noticing these two cases, I have ruled that unless a tender stipulation provides for rejection of non-compliance, there is no breach of tender condition in the judgment in W.P. No. 8166 of 2001, DD: 21-7-2001. Taking into consideration, the factual aspects of the matter, the law on the subject, I deem it proper to allow this writ petition.
15. In these circumstances, this petition is allowed and the respondents are directed to consider the case of the petitioner in accordance with law. Parties to bear their respective costs.