Calcutta High Court
Aroma Enterprise And Anr. vs Murshidabad Zilla Parishad And Ors. on 5 February, 2003
Equivalent citations: AIR2003CAL251, AIR 2003 CALCUTTA 251, (2003) 2 ICC 745
Author: Amitava Lala
Bench: Amitava Lala
ORDER Amitava Lala, J.
1. The dispute, raised by the petitioners, is arising out of fairness in dealing with the tender issued by Murshidabad Zilla Parishad.
2. Under normal circumstances, writ Court is very much slow in interfering in respect of tender or contract matters which are in the nature of commercial dispute by holding a view that Civil Court or Forum made for it, is the appropriate Forum for adjudication. However, judicial view changed its mind very much after the principles laid down in the case of Mahabir Auto v. Indian Oil Corporation . The ratio of the judgment is, in entering or not entering into the contract with the governmental authorities fair play, indiscrimination, arbitrariness might have been the governing factor for entertaining the writ petition. Since Mr. Malay Kumar Bose, learned Senior Counsel appearing in support of the petitioners, said that the dispute is in the nature of fairness of the authority by holding a prima facie view, the Court entertained this matter and directed the parties to file their respective affidavits for the purpose of due consideration. The interim order was passed only to the extent that if any fund is allotted in favour of the Zilla Parishad by Pradhan Mantri Gram Sadak Yojona the same will not be refunded back by the Zilla Parishad without the leave of the Court.
3. Factually the petitioners contended before this Court that the concerned Zilla Parishad issued a notice inviting tender in respect of construction of various roads. There are altogether nine items under the notice. Tenderers deposited their tenders giving lower side of the price fixed by the authority in the tender document. The petitioners are participants of tender in respect of item Nos. 1, 2, 5, 6 and 9. In respect of item Nos. 3 and 4 work orders have already been issued. In respect of item Nos. 7 and 8, 12.98% below than the estimated rates have been accepted. There, the dispute lies. The petitioners contended that nature of acceptance of the tender of the tenderers in respect of item Nos. 7 and 8 is totally unfair and discriminatory.
4. From the affidavit-in-opposition of the authorities by the pen of one employee of the Zilla Parishad it appears that one Co-operative & Construction Society Limited offered a rate of 56.92% below than the estimated rate on 20th September, 2002 but subsequently they informed that the actual quoted rate is 12.98% below than the estimated rate. Some letter pads with signature of authorised signatory were lost for which they lodged FIR in Berhampore Police Station. Someone used their lost letter pads and quoted rate. They requested not to accept the rate of 56,92% below than the estimated rate. The authority concerned found one Banwarilal Agarwal and M/s. S. R. Construction are second highest bidder in respect of item Nos. 7 and 8 respectively whereunder they offered 25.1% and 22.24% respectively below than the estimated rate. According to the authorities, they have accepted the rates. It has further stated that one M/s. Durgapur Unemployed Engineers Industrial Co-operative Limited by their letter dated 25th September, 2002 informed the respondent authority that someone submitted bid rate through their letter heads falsely without their knowledge and they requested to ignore the false bid. Accordingly, the bid rate of such concern was cancelled in respect of serial No. 1. As the lowest Bidders in respect of the serial Nos. 1, 2, 5, 6 and 9 are 6.2%, 5.3%, 2.75%, 2.5% and 1.3% respectively below than the estimated rate the tender matters were placed before the Tender and Purchase Committee of the Zilla Parishad on 27th September, 2002. Such Committee in a meeting on such date decided to issue fresh sealed tender in respect of serial Nos. 1, 2, 5 and 9 as the highest bid which according to them, are not reasonable comparison with serial Nos. 3, 4, 7 and 8. In the subsequent paragraph, it has further stated that if the work is given to the tenderer accepting the aforesaid price in respect of serial Nos. 1, 2, 5, 6 and 9 the concerned Zilla Parishad could not save governmental money more than 30 to 40 lakhs for each project in comparison to serial Nos. 3, 4, 7 and 8.
5. Therefore, the basis of consideration is a comparable figure in between the item Nos. 7 and 8 in one hand and item Nos. 1, 2, 5, 6 and 9 on the other hand. As because the accepted rate in respect of item Nos. 7 and 8 is 12.98% below than the estimated rate and in respect of others are 6.2%, 5.3%, 2.75%, 2.5% and 1.3% below than the estimated rate the second category tenders of the tenderers were not accepted.
6. Mr. Bikash Ranjan Bhattacharjee, learned counsel appearing for the concerned Zilla Parishad, relied upon a Supreme Court judgment (TVL Sundaram Granites v. Imperial Granites Ltd.) and contended that acceptance of tender by a State authority is its discretion. The only question is that the action should be open, fair, honest and completely above-board. However, in such judgment, accepting the viewpoint of the earlier judgment of the Supreme Court, State Government was directed to consider the matter afresh after inviting fresh applications. Supreme Court held such order cannot cause any serious prejudice to the appellant. Therefore, when the Tender and Purchase Committee of the concerned Zilla Parishad decided to issue fresh sealed tender for the serial/projects in respect of item Nos. 1, 2, 5, 6 and 9 no fault has been committed by them.
7. Mr. Bose, on the other hand, cited a three Judges' Bench Judgment (Star Enterprises v. City and Industrial Development Corporation of Maharashtra Ltd.) to apprise that the State authority in its dealings with the citizens of India would be required to act within the ambit of rule of law and would not be permitted to conduct its activities arbitrarily. State or its instrumentality entering into the commercial field must act in consonance with the rule of law. While dealing with tenders, State is entitled to look for the best deal and for that it can refuse to accept even the lowest bid. But while rejecting the lowest offer in the tender it must record reasons for such action and communicate the same to the concerned party. The natural justice speaking for the same. Looking for reasons in support of such action provides an opportunity for an objective review in appropriate cases both by the administrative superior and for the judicial process. Mr. Bose, further contended before this Court that there should have been at least a negotiation in between the petitioners and the Zilla Parishad or the appropriate authority before rejection as it was held in connection with others. But the authority discriminated the petitioners from others in adapting different modes of acceptance and rejection of tender.
8. According to me, the submission of Mr. Bose is not at all an ignorable argument in the facts and circumstances of this case. Each case has its own factual basis. The case (supra) is based on a factual matrix available therein so as to the case (supra). However, the earlier case has a stronger face value that the latter in view of the strength of the Bench. But the ratio of both the cases is that in case of commercial transactions the governmental action should be open, fair, honest and completely above board which is well-settled by now. Therefore, the only factual question is open for consideration as to whether a fresh tender can be called upon or the situation can be reviewed. The Supreme Court observed in (supra) that whether the appellant therein faced any prejudice by the order of the High Court or not in inviting fresh application. Therefore, it is necessary to consider the operative part of the Judgment on the viewpoint of the Supreme Court as well as of the High Court. Learned counsel appearing therein contended that several interim orders were passed by the High Court and they have invested substantial amounts, set up machineries and engaged man power in carrying on the operations etc. By considering such submissions the Supreme Court observed that the fact situation of the case calls for an order. The ultimate order was passed by saying that they declined to interfere with the judgment of the High Court with a direction upon the State Government to complete the entire exercise within a period from the date of receiving of Intimation following the procedure laid down by the High Court but without being influenced by the other observations made therein and till then the appellants shall be permitted to carry on quarry operations on the same terms and conditions as then available. Accordingly, the appeal was disposed of. Therefore, the observations of the High Court, if any, directed the petitioner to carry on the business till the decision and the State was directed to complete the entire exercise within a particular period. Therefore, although the invitation for fresh application was made but in true sence a priority was given to such candidate in view of certain factual aspects available therein. So far as the second judgment (supra) is concerned, the order is not made on con-cession but on two positive principles have been set up that acceptance of highest, or lowest bid cannot be the criteria of best deal by any State machinery and rejection of any, should be supported by reasons. I am strongly rely upon the ratio of such judgment because some of the factual aspects of the matter are leading this Court to that extent. Various materials of discrimination in accepting the tender Nos. 7 and 8 and rejecting the item Nos. 1, 2, 5, 6 and 9 are available. It is to be remembered that if tenders are opened it should be opened in front of everybody and in such case subsequent chance should not be given to the parties to avail further opportunity because the same can affect the right of other tenderers, Offer of 56.92% below the estimated rate in respect of item Nos. 7 and 8 are absolutely absurd offer. The story of stilling documents etc. appears to be concocted for such fictitious rate. Price subsequently quoted being 12.98% below the estimated rate should not be allowed in such circumstances. But when the similar case has been made out by one of the parties in respect of item No. 1 the same was ignored. It is also surprising that the lower offered rates being 25.1% and 22.24% below than the estimated rates were accepted with a plea that governmental money can be saved by such process and since the petitioners have offered only less than 6.2%, 5.3%, 2.75%, 2.5% and 1.3% respectively below the estimated rate, therefore, such bids cannot be accepted. One should be open minded in respect of accepting or rejecting the offer. An explanation in affidavit giving a comparison in between different items cannot be the appropriate explanation as alleged or at all. The process, which has been challenged here can be given a room for consideration but all items are different from each other so far the prices are concerned, lengths and breadths of the roads, use of materials and various other factors are to be considered in accepting or rejecting such tender. As because one has given such lesser offer than the estimated rate in one item the same cannot be the guidelines for the purpose of rejection of tender in respect of other item in the garb of saving the governmental money. There is a serious question as to whether the governmental money will be saved for once or perpetually. Saving of governmental money cannot be the sole consideration. Saving of money vis-a-vis the quality of work is the matter of consideration. For this reason this Court as well as the Supreme Court repeatedly held that acceptance of lowest or highest bid can be refused. The explanation in the affidavit is a legal expert's opinion in the name of the deponent but not, fact-oriented. In case of saving more than 30 to 40 lakhs one has to explain the cost of each project. But no project cost has not been given there-under. Therefore, such explanation is vague. Moreover, explanation by way of affidavit cannot be an appropriate explanation unless and until it is backed by reasons. It is to be remembered that the Court is considering the decision making process. The affidavit has been filed by an upper division assistant of the concerned Zilla Parishad. Therefore, how far it is to be believed is also a big question before the Court of law. Why the authorities have not come forward in filing an appropriate affidavit is best known to them. There are so many questions in respect of the best deal on the part of the authority. The rejection is neither backed by reasons nor communicated.
9. Therefore, taking into the totality of the matter I am of the view that the decision of the Tender and Purchase Committee of the Zilla Parishad in respect of item Nos. 1, 2, 5, 6 and 9 cannot be sustained.
10. Therefore, the same is set aside with a direction upon such Committee to reconsider this issue upon giving fullest opportunities of hearing to the parties and by passing a reasoned order afresh within a period of one month from the date of communication of this order. For the purpose of effective adjudication a copy of the writ petition with annexures as well as the copy of the affidavits with all annexures can also be treated as part and parcel of documents for consideration. Till one week after taking the decision and communication of the same to the petitioners, no effect or further effect in respect of the tenders, if any, will be given by the authority concerned. During the period of consideration if the authority concerned find that the petitioners' offer is justifiable, the same can be accepted by such authority irrespective of passing any reasoned orders.
11. Thus, the writ petition stands disposed of. No order is passed as to costs.
12. Let an urgent xeroxed certified copy of this judgment, if applied for, be given to the learned Advocates for the parties within one week from the date of putting the requisites.