Andhra HC (Pre-Telangana)
Vijayashanti Instruments Corporation vs Directorate Of Womens Development And ... on 29 August, 1997
Equivalent citations: 1998(1)ALD515
JUDGMENT
1. Respondent No. 1 is the Directorate of Womens Development and Child Welfare, Government of Andhra Pradesh, represented by its Director. For the purpose of procurement of preschool material, a tender notice was issued by Respondent No. 1 with even date 6-5-1997 in the proceedings No.IFB.No.66/WB.ICDS/PS/97-98 and also issued the bidding document stipulating the conditions, the terms and the schedule for such purpose, and it appeared, in Eenadu Telugu Daily dated 16-5-1997. The petitioner, Respondent No.2 and one M/s. Mahaveer Industries which was impleaded as Respondent No.3 subsequently by virtue of the orders in WPMP.No.32129 of 1997, from among others submitted the tenders. As per the bidding document and the notification, the following was the programme for submitting (he tender application, consideration opening etc. "National competitive Bidding for the supply of pre-school material Bid reference: Tender No.66/WB ICDS/PS/97-98.
Date of commencement of
sale of bidding document: 19-05-1997
Last date for sale of bidding
document: 16-6-1997 12.00 Noon
Last dale and time for receipt
of bids: 16-6-1997 2.00 pm
Time and date of opening
of bids: 16-6-1997 3.00 pm
Place of opening of bids: O/O Directorate of
Women's Development
and Child Welfare,
8-8-222, Vengal Rao Nagar,
Hyderabad-500038.
Address for communication : As above.
2. The petitioner and other tenderers except Respondent No.2 submitted their tenders within the time stipulated namely before 2.00 p.m. on 16-6-1997. But the 2nd respondent did not submit the tender within the lime stipulation on the said date and instead it was submitted late by seven minutes i.e. at 14.07 p.m which was objected to by the tenderers including the petitioner. Therefore, on 16-6-1997, the bid was not opened. The concerned officer of 1st respondent who was dealing with the matter recorded the time of submission of the bid of Respondent No.2 on the bid cover but did not open the tenders in view of the objections of other tenderers and in view of the late submission of the tender by 2nd respondent. However, having been persuaded and convinced for the delay in submitting the tender by the 2nd respondent by seven minutes on the relevant date, the 2nd respondent opened the tenders on 18-6-1997 through its Accounts Officer, thereby the tender of 2nd respondent was found to be in order and accepted. Aggrieved by that, the petitioner has filed this Writ Petition and further aggrieved by that the impleading party -Respondent No.3 has challenged the proceedings of the 1st respondent dated 18-6-1997 accepting the tender of 2nd respondent on certain grounds.
3. Mr. C. V. Mohan Reddy, the learned Counsel for the petitioner in addition to the grounds raised in the writ petition by the petitioner has raised the following contentions:
4. The acceptance of the tender of 2nd respondent by Respondent No. 1 is violative of the categorical stipulation of the tender document. In the first place, the declared programme of the stipulation of the dates and the timings for compliance by the bidders, Clause 7.3 leaving discretion to the purchaser to extend the dead-line for the submission of bids is applicable in general to all prospective bidders and not to any particular individual Clause 19.1 mandatorily prescribes that the bids must be received as per clause 18.2 at the address mentioned not later than the time and date specified in the invitation for bids and in the event of the specified date for the submission of bids being declared a Holiday for the purchaser, bids will be received upto the appointed time on the next working day. Clause 20.1 makes it mandatory for Respondent No. 1 to reject the bids received by the purchaser after the dead-line for submission of bids prescribed by the purchaser pursuant to ITB Clause 19 and further more by virtue of Clause 21.3 no modification of the bid subsequent to the deadline for submission of bids is permitted. Clauses 22.1 and 22.3 stipulate the procedure to be adopted for opening of the tenders and rejection in the presence of the tenderers and further more the opportunity for other tenderers to know the implementation of the clauses of the bid has been robbed by adopting a procedure by the Respondent No. 1 contrary to the stipulation of the bid document, thereby leaving scope for mismanagement of the whole procedure and the purpose of calling for tenders. Mr. C. V. Mohan Reddy, the learned advocate has also contended that the whole proceedings of Respondent No. 1 would be vitiated having been violative of the definite stipulations of the bid document or at least violating the provisions of Article 14 of the Constitution of India whereby a preferential treatment is given to Respondent No.2 as against the petitioner and other bidders or tenderers and as a whole the petitioner is put to injustice due to the conduct of Respondent No. 1 in dealing with the matter. The learned advocate has relied upon a pronouncement of the Supreme Court in Ramana v. LA. Authority of India, and also the decision in Harminder Singh Arora v. Union of India, in support of his contentions.
5. Mr. T.V.S. Prabhakara Rao, the learned advocate for Respondent No.3 has adopted the same argument, however, contending that it the bid programme had been properly adhered to, ignoring the claim of the 2nd respondent, being the late bidder, the Respondent No.3 being the lowest tenderer should be declared to have been succeeded for the purpose of acceptance of tender by Respondent No.1.
6. The learned Government Pleader for Women and Child Welfare, Mrs. M. Vidyavathi, while repelling all the above contentions, has made best efforts to support the action of the 1st respondent, both on facts and in law. It has been the endeavour of the learned Government Pleader also to demonstrate that ultimately there has been fair play on the part of the 1st Respondent and in the interest of the public and by virtue of the Clause 24.3 leaving the right of waiver on the part of Respondent No. 1, in the circumstances, where the bid does not constitute material deviation provided the said waiver does not prejudice or affect the relative ranking of any bidder, which, according to her contention, has been totally complied with by the 1st respondent. She has also relied upon two pronouncements of the Supreme Court in G.J. Fernandez v. State of Karnataka, and Tata Cellular v. Union of India, and also the decision in F.C.I, v. Kamdhenu Cattle Feed Industries, .
7. The clear controversies supra are mostly based upon the facts of this case as the law in relation to the tenders has been settled by Courts and in particular by the precedents relied upon by both sides. There cannot be any second opinion about such principles in relation to the question of tenders to accept or reject, but the facts of this case are to be tested in the light of such principles which will be noted at the appropriate stage.
8. There is no gainsaying that by virtue of the schedule under the bid document supra, the time factor was the essence of proposed contract of tenders. Not only for submitting the document but also for the receipt and for opening the time has been stipulated in clear terms. It is nobody's case such a time factor was not known or understood by any of the tenderers including the Respondent No.2. Admittedly, the 2nd respondent did not submit the tender or the bid document within the stipulated time and on the other hand submitted atleast seven minutes later than the stipulated time. The justification of such late submission of the tender by the 2nd respondent was said to be due to the bidder reaching the campus well in time but going late to the actual place meant for submission of the tenders which was stated to be at a distance of 200 meters from the office of the Directorate. Such explainable reason has been accepted by the 1st respondent. In the circumstances, two questions arise, viz., whether in fact the 2nd respondent did arrive within the premises at a particular rime and could not reach the actual spot before the stipulated time of 2 p.m. and secondly whether there was justification for the 1 st respondent to condone the delay.
9. Regarding the first question, barring the explanation of 2nd respondent and the acceptance thereof by the 1st respondent, there is no material on record. As it is there is no material on record to show that any such representation was made by the 2nd respondent, considered by 1st respondent, and a decision was taken after applying the mind by making record in the papers of the 1st respondent. However, while the judgment is being dictated in the Court, learned Government Pleader submits that there is such a record and if called for it will be produced. It is not for this Court to call for any record. Even assuming that there is such a record, there is nothing to indicate in any of materials that the place of receipt of the bid documents and the office of the 1st respondent are at a particular distance and bidders cannot travel such a distance unless being late. This reminds of an episode that there is no defence for anybody for being late even where the watch has stopped. It is for the interested persons to submit the bid and to make all possible attempts to reach the spot of tender receipt place before the stipulated time, if not well in advance. The punctuality is the back-bone of the policies in business and contractual obligations. A person having no responsibility for punctuality cannot seek the aid of justice. The reason is not that a person goes to a spot and cannot find out the place of spot and to traverse after a particular time, is no explanation and one should blame for himself for such a situation. In the considered opinion of this Court, such an explanation is not only beyond the known standards of punctuality but also beyond the scope for acceptance. When other tenderers could reach the spot within the time stipulated, if the Respondent No.2 is given such a benefit, there will be open discrimination and denial of opportunity for others to have the same benefit. If this is permitted, one tenderer like Respondent No.2 will stand in a different position to have more opportunities to think or deliberate or to make use of any information it may either look or seep, under the peculiar circumstances. More over, a careful examination of all the stipulations of the bid document leaves no discretion for 1 st respondent to condone any such delay. The learned Government Pleader with all her efforts is unable to convince this Court that there is any such discretion left with the 1st respondent to alter the programme particularly in regard to the relaxation of the time schedule for receipt of the tender documents. On the other hand the clauses in the bid document are so mandatory that there is no discretion left to the 1st respondent to alter the bid timing and as rightly pointed out by Mr. Mohan Reddy, Clause 20.1 is a defiance clause not only to the bidders or tenderers to submit their tender documents not later to the time stipulation but also to the 1st respondent not to accept any tender submitted after the dead-line and actually to result in the rejection and to return the tender document unopened to the bidder. Clause 20.1 may be repeated for convenience sake:
"Any bid received by the purchaser after the deadline for submission of bids prescribed by the purchaser, pursuant to ITB Clause 19, will be rejected and/or relumed unopened to the bidder''.
Clause 19.1 is a prelude to Clause 20.1 and this Clause which reads as under is a mandatory clause to strengthen the time as the essence of the whole programme.
"Bids must be received by the purchaser at the address specified under ITB Clause 18.2 not later than the time and date specified in the invitation for bids (Section I). In the event of the specified date for the submission of bids being declared a holiday for the purchaser, the bids will be received upto the appointed time on the next working day."
Such a clause not only prohibits the 1st, respondent from entertaining such bids but also leaves no scope for discretion. If any such discretion is exercised, it will be totally violalive of Clause 19.1 and 20.1 of the bid document. If an act was done by the 1st respondent officially in the discharge of such a function. It is a total violation of the official act as part of the stipulation of the bid document. In regard to the modification of the stipulations of the bid document regarding the deadline for submission of bids, Clause 21.3 of the bid document is another defiance clause and prohibition, which, none the less, in unmistakable terms, say that, no bid may be modified subsequent to the deadline for submission of bids. Although the modification concerns the bid, the deadlines is the time stipulation including the date stipulation. Any discretion exercised beyond such stipulation is repugnant to the Clause of the bid document. Clause 22.2 is another mandatory clause which also contains the above inference and to read it, "No bid shall be rejected at bid opening, except for late bids, which shall be returned unopened to the bidder pursuant to ITB Clause 20. The Respondent No.1 having knowledge of such late submission of the bid and inspite of such stipulations, has patently violated such clauses and particularly by accepting the tender of the 2nd respondent, has acted in violation of the clear stipulations of the bid document itself.
10. Now, coming to the waiver clause, namely, 24.3 it is better to read the very clause itself, which says that the purchaser may waive any minor informality or non-conformity or irregularity in a bid which does not constitute a material deviation, provided such a waiver does not prejudice or affect the relative ranking of any bidder. The clause in itself provides the circumstances under which the purchaser may waive any minor informality. The time stipulation cannot be a minor informality. Although this may be a case of submission of bid late by seven minutes there may be existence of seven hours or even days. The question would be whether the law can allow such waiver in regard to such a stipulation if such a discretion is left to the purchaser and, as rightly submitted by Mr. Mohan Reddy, there is always the possibility of misuse, abuse, mis-management and what not to lead to any dishonest consequences which may not be envisaged or entertained ultimately. Whether it is a minor informality or non-conformity or irregularity and whether such a thing constitute a material deviation or not or does not prejudice or affect the relative ranking of any bidder depends upon the facts and circumstances of each case. In the present case, it is difficult to think that violation of the time factor is either minor or no material deviation. Secondly, it is difficult to accept the contention of the learned Government Pleader that such a violation can be waived and does not prejudice or affect the relative ranking of any bidder. At any rate and clearly such a violation has given undue favour to the 2nd respondent because his bid has been accepted whereas the petitioner and Respondent No.3 are deprived of such an opportunity of getting their bids accepted on the failure of 2nd respondent to submit the tender within the stipulated time to think that there would be travesty of realities and justice.
11. The precedents relied upon by the learned advocate for the petitioner are themselves the answer to such contention that any contravention of the stipulations of a bid document has legal consequence. Strictly speaking that goes to the fundamental rule of violation of a contract becoming not only breached but also repugnant to the very existence of the document to vitiate itself unless there are grounds of mistake of fact or any other reasonable exception. The learned Government Pleader is no doubt right in postulating the principles in dealing with the question of tenders supported by the three pronouncements stated above. In Food Corporation of India case (supra) no doubt, the Supreme Court held that fairness in action and due weightage to the reasonable or legitimate expectations of the persons likely to be affected are the essential requisites to test the rule of non-arbitrariness in a State action and a bow fide decision in a given case if satisfies the requirement of non-arbitrariness in the State action, then the Court will not interfere. If we apply such principle, the facts of this case cannot satisfy the test laid down in the above case. The unfairness in exercising the discretion by the 1st respondent is not only unjust but also totally arbitrary. It was beyond the scope of the stipulations of the very bid document. Having left no discretion to exercise a discretion is not only arbitrary but also capricious. In Fernandez v. State of Karnataka (supra) relied upon by the learned Government Pleader itself has pointed out that the deviation or relaxation of the prescribed standards although is not always a bar for the authority inviting tenders, but any deviation if made should not result in arbitrariness or discrimination. The rule is also borrowed from the decision of the Supreme Court in Air Port Authority India case (supra) relied upon by the learned advocate for the petitioner. The very ruling and the principle laid down therein deprives the 1st respondent to have such benefit of discretion or any authority to relax any condition of bid. In fact, such a discretion has been imbeded in the relaxation Clause 24.3 itself, but such a discretion has to be exercised within the implication of the clause in that the waiver does not prejudice others and should not be arbitrary and in the present case the 1st respondent having acted beyond Clause 24.3 has made its discretion not only arbitrary exercise of power but also repugnant to the stipulations of the contract. Now, coming to Tata Cellular case (supra) the supreme Court pointed out the several conditions to test whether the requisites of a valid tender are confirmed or not. The requisites are detailed as under:
" 1. It must be unconditional;
2. Must be made at the proper place;
3. Must conform to the terms of obligation;
4. Must be made at the proper time;
5. Must, be made in the proper form;
6. The person by whom the tender is made must be able and willing to perform his obligation;
7. There must be reasonable opportunity for inspection;
8. Tender must be, made to the proper person; and
9. It must be of full amount.''
12. In the very expression of the Supreme Court in the ruling supra, the time factor is made as an important ingredient or requisite for a tender to be a valid one. However, the prejudice clause is also one of the added factor which is already examined to find that it has prejudiced not only the petitioner but also the other tenderers. The judicial control in the administration of justice in such a situation, has been dealt with by the Supreme Court in Paras 86, 89 and 90 which reads as follows:
"86. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy, thus they are not essentially justificiable and the need to remedy and unfairness. Such an unfairness is set right by judicial review.
89. Observance of judicial restrain is currently the mood in England. The judicial power of review is exercise to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the Court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action.
90. Judicial review is concerned with reviewing not the merits of the decision on support of which the application of judicial review is made, but the decision making process itself.''
13. Within these expressions" having examined the facts and circumstances of this case, this Court in totally convinced that the unbridled discretion assumed by the 1st respondent within the waiver powers or even a bona fide discretion exercised therein has warranted interference by this Court by means of judicial control not only as a judicial review but also to stall the arbitrary action leaving no scope, for any further or future repetition of such an action wherein the consequences must be even more drastic or disastrous.
14. Now coming to the oilier ground of the petitioner which is postulated by the learned Counsel for the petitioner about the opening of the tender not in the presence of the bidders particularly the petitioner is well established. The implication of Clauses 22.2 and 22.3 is so apparent that bids that are not opened or read out at bid opening shall not be considered further for evaluation irrespective of the circumstances. For instance, if the bids submitted by the petitioner and other bidders could not have been opened either on the date of submission or on the prescribed date, it could not have been opened on any other date. That has been patently flouted by the 1st respondent in opening the bids on 18-6-1997 in the absence of the bidders particularly the petitioner and the 2nd respondent and there has been arbitrary exercise of power in dealing with the matter in opening of such bids. It is not only violative of the very clause but also the principles of natural justice, as it is rightly pleaded that none of the other bidders had any access for such opening nor any notice was given to them by the 1st respondent before opening or accepting the bid of the 2nd respondent. On the other hand, it is clear that several bidders were not present. That is also another strong ground not to support the action of the 1st respondent in dealing with the matter.
15. Judging the matter in any angle, the action of the 1st respondent in accepting the bid of 2nd respondent in such situations cannot be supported. On such a considered principle of law, in such a situation, the whole proceedings of 1st respondent in accepting the bid of the 2nd respondent becomes vitiated. But, the question is, whether the whole process right from the calling of tenders would be vitiated ? Answer to the above is, it may not. However, it is for the 1st respondent to decide whether to proceed from a stage of completion of submission of tenders or to call for the fresh tenders, which this Court will not decide.
16. In the results, the Writ Petition is allowed. The impugned proceedings of 1st respondent accepting the tender or bid of 2nd respondent is quashed. The Respondent No.l shall be at liberty to take any action in the matter in accordance, with law and in the light of the observations made above. No costs.