Calcutta High Court (Appellete Side)
Aks Software Limited & Anr vs Orissa Minerals Development on 14 June, 2012
Author: Jayanta Kumar Biswas
Bench: Jayanta Kumar Biswas
In The High Court At Calcutta
Constitutional Writ Jurisdiction
Appellate Side
Present : The Hon'ble Mr Justice Jayanta Kumar Biswas
W.P. No. 9282 (W) of 2011
AKS Software Limited & Anr.
v.
Orissa Minerals Development
Company Limited.
Mr. Dipankar Chakraborty
Mr. K. A. Bhaduri ...for the petitioners.
Mr. K. K. Chattopadhyay ...for the respondents.
Heard on : June 14, 2012.
Judgment on : June 14, 2012.
The Court : The petitioners in this WP under art.226 dated June 10, 2011 are questioning a decision of the Orissa Minerals Development Company Limited (in short OMDC) dated May 3, 2011 (WP p.59).
The decision was sent to the first petitioner's Manager(Sales) and it was given regarding the following:-
"Tender Notice No.OMD/20/2010-11 Dt.30.08.2010 for installation of 14 nos. of Pitless Electronics Weigh-Bridge at OMDC Mines."
The relevant part of the decision is quoted below:-
"We regret to inform you that due to some unavoidable reasons the said tender has been cancelled. You are requested to kindly collect the Earnest Money Deposit (EMD) furnished by your company."
In the process initiated by the tender notice the first petitioner participated. It emerged as the L1, and participated in the price negotiation process at the instance of OMDC. Instead of giving it the work, OMDC ultimately cancelled the tender process.
OMDC has filed an Affidavit-in-Opposition (in short AO) dated June 24, 2011. It has raised the question of jurisdiction and has said that the petitioners' remedy, if any, was before the arbitrator; and that the tender process was cancelled, because the rate of the L1 was not commercially viable.
Mr. Chakraborty appearing for the petitioners has submitted as follows. It was impossible to execute the work at a lower rate. Commercial viability was not the ground stated in the decision. It is an AO improvement. OMDC has acted unfairly, unreasonably and arbitrarily. It should be directed to hear the L1 and decide the matter afresh.
Admittedly, the impugned decision was given from OMDC's registered office at Salt Lake in Kolkata. I am, therefore, of the opinion that this Court had jurisdiction to entertain the WP; for the cause of action ( it was in the impugned decision) had arisen in Kolkata, a place within the territories in relation to which this Court exercises jurisdiction under art. 226.
There was no arbitration agreement between the parties. In the tender process the first petitioner emerged as the L1. The offer was not accepted. Citing commercial viability OMDC cancelled the process. I am, therefore, unable to see how the petitioners could initiate arbitration proceedings. They were not entitled to arbitration remedy. The WP is maintainable.
It is true that in the impugned decision commercial viability was not cited as a ground for cancellation of the tender process. But that, in my opinion, will not make any difference. In the AO it has been stated and reiterated that the rate quoted by the L1 was high and not commercially viable, and that the process was cancelled precisely for this reason. The AO case is based on records; not a first time improvement.
At what rate OMDC should give the work is not to be decided by the Writ Court. It is not the case that at the L1 rate or thereabouts OMDC has given the work to some other tenderer. Admittedly, the L1 was not inclined to reduce the rate. It did not have an indefeasible right to get the work at the rate quoting which it had emerged as the L1.
On the facts, I do not think it can be said that OMDC acted unfairly, unreasonably or arbitrarily. Opportunity of hearing before cancellation of the process was not a requirement. It will be inappropriate to ask OMDC to hear the petitioners and decide the matter afresh. The impugned decision does not call for any interference.
For these reasons, the WP is dismissed. No costs. Certified xerox.
Kamal(c);ab(f) (Jayanta Kumar Biswas,J.)