Rajasthan High Court - Jodhpur
Balotra Water Pollution C.And R.F. ... vs State Of Rajasthan And Ors on 13 July, 2018
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ No. 15874/2017
Balotra Water Pollution Control Treatment And Research
Foundation Trust, Balotra Through Subash Chand S/o Shri Sultan
Mal Ji Mehta, aged about 48 years, R/o Balotra, working as
Chairman Of The Trust.
----Petitioner
Versus
1. The State Of Rajasthan Through The Director And Joint
Secretary , Local Self Department, Jaipur.
2. The Municipal Council , Balotra Through Its Commissioner.
3. The Chairman , Municipal Council, Balotra.
4. M/s. Ridhhi Sidhhi Associates , Mateshwari Bhojnalaya,
Jal Chakki, Rajsamand Through Jai Singh Chouhan
Wrorking As Partner.
5. Suresh Kumar Mehta S/o Uttam Chand Mehta, By Caste
Jain, R/o Balotra, Tehsil Pachpadra, Barmer.
----Respondents
Connected With
S.B. Civil Writ No. 1016/2018
1. M/s Ridhi Sidhi Associates Mateshwari Bhojnalaya, Jal
Chaki, Rajsamand through its Authorized Signatory
Surendra Mewara S/o Shri Bhikam Chand Mewara, By
Caste Mewara, aged 43 years, R/o 23/294 Chopasani
Housing Board, Near Ashok Udhyan, Jodhpur
----Petitioner
Versus
1. The State Of Rajasthan Through The Secretary , Local
Self Department, Government Of Rajasthan, Jaipur
2. Director , Local Bodies, Secretariat, Jaipur.
3. Municipal Council , Balotra Through Its Commissioner.
----Respondents
(2 of 13) [CW-15874/2017]
For Petitioner(s) : Mr.Ravi Bhansali, Sr. Advocate
assisted by Mr.Vinay Kothari, for the
petitioner in CWP 15874/2017.
For Respondent(s) : Mr.Manoj Bhandari, Adv. for the
respondent no.4 M in CWP
15874/2017 and for the petitioner in
CWP 1016/2018
Mr.Ayush Gehlot & Mr.Sunil Joshi on
behalf of Mr.Rajesh Panwar, AAG
Dr.Pratishtha Dave, Dy. Govt. Counsel
Mr.Sandeep Shah & Mr. M.S.Purohit,
Adv.
HON'BLE MS. JUSTICE NIRMALJIT KAUR
Reportable Order
13th July, 2018
Both the above-mentioned writ petition shall stand decided by this common order as they arise out of the same tender process.
The petitioner-Balotra Water Pollution Control Treatment & Research Foundation Trust in SBCWP No.15874/2017 have preferred the writ petition for cancellation of the bid confirmed in favour of respondent No.4-M/s Riddhi Siddhi Associates, whereas, SBCWP No.1016/2018 has been filed by M/s Riddhi Siddhi Associates seeking re-consideration of the period of contract and setting aside of all the proceedings limiting the period of contract to 31.03.2018 instead of 31.03.2019.
The grievance of the petitioner- Balotra Water Pollution Control Treatment & Research Foundation Trust is twofold:
1. The tender was confirmed in favour of respondent no.4 on a price much less than the reserve price. The reserve price was Rs.2,81,00,000/- (Rupees two crore eighty one lac), (3 of 13) [CW-15874/2017] whereas respondent no.4 was awarded the tender on Rs.2,15,71,000/- (Rupees two crore fifteen lac seventy one thousand), which is both against the settled proposition of law and public interest causing loss to public exchequer.
2. The tender in any case was uptil 31.03.2018 but in spite of the same, the respondents are being allowed to continue with the contract.
The Municipal Council floated 1st e-tender for appointment of a Contractor for collection of cess on 06.02.2017. The reserve price of the same was Rs.3,10,00,000/- per month. The said NIT was called off as no bidder participated. The Municipal Council floated 2nd e-tender document at the minimum rate of Rs.2,81,00,000/- per month. Pursuant to the invitation to participate in the tender process, three contractors participated in the same and submitted their bids. The highest bid that was submitted by M/s Riddhi Siddhi Associates was Rs.2,01,00,000/- per month which was substantively less than the base price that is Rs.2,81,00,000/-. The Municipal Council, Balotra vide its communication dated 13.04.2017 wrote to the Contractor, thereby stating that the bid amount of Rs.2,01,00,000/- submitted by him appeared to be fairly less and, therefore, he was invited to participate in a dialogue and negotiate with the amount. The Contractor himself revised its bid to Rs.2,15,00,000/-. However, the Local Self Department refused to confirm the tender still being less than the minimum fixed price and accordingly, did not issue the work order in favour of the Contractor in pursuance to the 2 nd tender floated on 10.03.2017. The Municipal Council, Balotra, therefore, floated an e-tender for the 3 rd time on 20.06.2017 for appointment of a Contractor for collection of cess for the period (4 of 13) [CW-15874/2017] 2017-2018. Once again, the reserve price was kept at Rs.2,81,00,000/- per month. Two Contractors applied against the tender process and the respondent no.4-M/s Riddhi Siddhi Associates participated once again and this time, the Municipal Council, Balotra vide its communication dated 04.09.2017 confirmed the bid in favour of the petitioner at Rs.2,15,71,000/-.
Reply has been filed on behalf of the respondent No.4 M/s Riddhi Siddhi Associates. The Municipal Council has filed its written statement in S.B.Civil Writ Petition No.1016/2018 and prayed before this Court that the said written statement be also read in S.B.Civil Writ Petition No.15874/2017. No reply has been filed by the State in S.B.Civil Writ Petition No.15874/2017 as no relief is stated to have been claimed against them. However, written statement has been filed by them in S.B.Civil Writ Petition No.1016/2018.
Mr.Manoj Bhandari, learned counsel for the respondent No.4 M/s Riddhi Siddhi Associates while vehemently opposing the writ petition filed by Balotra Water Pollution Control Treatment & Research Foundation Trust raised the preliminary objection that the petitioner had no locus standi to file the writ petition. The agreement is between the Municipal Council and respondent No.4. The Municipal Council has floated the tender. They are the appropriate Authority to grant the tender. Thus, the writ petition is not maintainable at the hands of the petitioner-Balotra Water Pollution Control Treatment & Research Foundation Trust.
The preliminary objection raised by the respondent no.4 cannot be sustained. The petitioner-Trust undertakes the work of operation and maintenance of Common Effluent Treatment Plants (CETP) catering to huge number of textile units in Balotra and (5 of 13) [CW-15874/2017] Bithuja to treat their trade effluent in order to avoid negative impact on the environment. The CETP installed at Balotra and Bithuja are operated and maintained by the Trust, which involves huge amount of expenditure. The Department of Local Self Government issued notification dated 27.06.2003 under the Municipalities Act, 1959 and made it mandatory that the gray cloth which comes within the municipal limits of Balotra should be taken for processing only after the cess was paid on the said gray cloth. In pursuance to the said notification and for the purpose of sharing the revenue, Trust and Municipal Council entered into an agreement on the appointment of a Contractor for collection of cess on the gray cloth, which comes within the municipal limits of Balotra according to which the Trust receives 90% of the deposit and the remaining 10% goes to the Municipal Council. The fund is used for operation and maintenance of CETP. In fact, as per the said agreement, the contract cannot be given without the consent of the petitioner-Trust. It shows that the participation of the Chairman/President of the Trust in the entire tender process was required. In fact, the Contractor, Chairman/President of the Trust and the Commissioner and the Chairman of the Municipal Council, Balotra are supposed to be party to the said agreement. Thus, there is no doubt that the petitioner-Trust has the locus standi to challenge the confirmation of the bid being a beneficiary of the same.
While raising another objection, learned counsel for the respondent no.4-M/s Riddhi Siddhi Associates submitted that the bid offered by respondent No.4 was accepted as no one came forward to offer the bid in pursuance to the Notice Inviting Tender (NIT) dated 06.02.2017 when the reserve price was kept at (6 of 13) [CW-15874/2017] Rs.3,10,00,000/- per month. Thereafter, the second NIT was issued on 10.03.2017. In this NIT, the reserve price was kept as Rs.2,81,00,000/-. This time, three parties namely, M/s Riddhi Siddhi Associates, M.B.Infrastrcure, Kedson Earth Infra submitted its bids. The bid amount which was submitted by M/s Riddhi Siddhi Associates, M.B.Infrastructure and Kedson Earth Infra was Rs.2,01,11,111/-, Rs.1,91,51,000/- and Rs.1,97,00,000/- respectively. The tender opening Committee of Municipal Council, Balotra had asked the respondent no.4 to undergo negotiation. The respondent no.4 in pursuance of negotiation raised its offer to Rs.2,15,50,067/-. The Municipal Council sent the matter to the State Government while giving detail explanation and reasoning as to how Rs.2,15,00,000/- is just and proper. In the notesheet, the Committee of the Municipal Council took into consideration each and every aspect of the matter and the bid of Rs.2,15,50,067/- was held to be just. The Commissioner, Municipal Council, Balotra while taking into consideration the report of the Committee sent the matter to the Director, Local Bodies. The petitioner-Trust had also accepted the rate of Rs.2,15,00,000/- initially as the request to accept the tender of respondent no.4 of Rs.2,15,50,067/- was found just and reasonable by the Trust but the Director, Local Self Department vide its order dated 14.06.2017 ordered re-tendering. Accordingly, the respondent-Municipal Council issued tender for the third time on 20.06.2017. This time, the bid of the respondent no.4 of Rs.2,15,71,000/- was accepted by taking a conscious decision that although the price quoted was less than the reserve price but keeping in mind that there was no higher bid than they had received on two occasions, the offer of the bid was held to be reasonable. Hence, the petitioner-Trust was party to the decision.
(7 of 13) [CW-15874/2017] There was no objection from any side and therefore, the petitioner cannot raise this dispute at this stage which is at the behest of the respondent No.5-Suresh Kumar Mehta, who has given his affidavit that he is ready to pay Rs.2,37,00,000/- per month, which is an afterthought.
In order to ascertain the argument of the respondents whether the petitioner was a party to the impugned decision, we need to look at Clauses 12, 16, 17, 18, 27 and 36 of the Notice Inviting Tender dated 20.06.2017 as pointed out by the learned counsel for the petitioner. A perusal of the Clauses show that the petitioner-Trust had the right to finally accept or reject the bid. The relevant Clause 12, 18 and 36 of the NIT read as under:-
"12- vafre bZ&Vs.Mj izfØ;k Lohdkj@vLohdkj djus dk vf/kdkj v/;{k ckyksrjk okVj iksY;q"ku dUVªksy ,oa fjlpZ Qkm.Ms"ku VªLV ckyksrjk] lHkkifr ,oe vk;qDr] uxjifj"kn] ckyksrjk dks gksxkA 18- lQy laosnd iznw'k.k tU; O;olk; dj laxzg.k dk Bsdk izkjEHk djus ls iwoZ uxjifj'kn] ckyksrjk ds lkFk ,d djkj 5000-00 ds uksu T;wMhf"k;u LVkEi ij dj vf/kdkj i= uxjifj'kn] ckyksrjk ls izkIr djus ds i"pkr~ gh iznw'k.k tU; O;olk; dj dk laxzg.k dj ldsxkA mDr djkj ij Bsdsnkj ds o v/;{k ckyksrjk okVj iksY;q"ku dUVªksy ,oa fjlpZ Qkm.Ms"ku VªLV ckyksrjk] uxjifj'kn vk;qDr ,oa v/;{k uxjifj'kn ds gLrk{kj gksxsA 36- fdlh Hkh "krZ esa la"kks/ku djus dk vf/kdkj lHkkifr uxjifj"kn ckyksrjk o v/;{k okVj iksY;q"ku daVªksy ,oa fjlpZ Qkm.Ms"ku VªLV] ckyksrjk ds ikl lqjf{kr jgsxkA"
However, the Municipal Council, Balotra went ahead and entered into the agreement without obtaining the signatures on it in complete violation of the terms of the NIT, which shows that the Trust in no way agreed to the allotment of the bid in favour of the respondent no.4. The agreement was signed only between the respondent no.4-M/s Riddhi Siddhi Associates and the Municipal Council, Balotra. The petitioner was not a signatory as required. In (8 of 13) [CW-15874/2017] these circumstances, the petitioner cannot be said to be a party to the decision. Further, to say that the petitioners did not raise any objection is also incorrect. In fact, the petitioner-Trust immediately sent a notice for Demand of Justice to the Director & Joint Secretary of the Local Self Department through their counsel on 12.09.2017 but the respondent-Department did not choose to file any response, forcing the petitioner to finally approach this Court by way of present writ petition.
The respondents have laid great stress on the letter dated 19.06.2017 placed on record as Annexure-R.4/8, which was written by the petitioner requesting the Municipal Council to lower down the reserve price to Rs.2,20,00,000/- to argue that the petitioner-Trust was in any case always ready to accept the bid for less than the reserve price. In fact, this is the precise argument of the petitioner-Trust themselves. As per the petitioner-Trust, it suggested the reserve price to be fixed at Rs.2,22,00,000/- to enable more people to participate in the said bid but keeping the reserve price at Rs.2,80,00,000/- dissuaded many other competitors to participate in the field. If the reserve price had been kept at Rs.2,20,00,000/-, there was always a chance for it to rise almost close to Rs.2,80,00,000/-, if not above Rs.2,80,00,000/-. Hence, the confirmation of the bid subsequently at the rate which was much less than the reserve price cannot be sustained in the eyes of law. Once the Municipal Council had fixed the reserve price at Rs.2,80,00,000/-, it could not allot the same at the price less than Rs.2,80,00,000/-. Thus, the argument of the respondent that the Trust themselves agreed to accept the bid at lessor price does not help.
(9 of 13) [CW-15874/2017] Mr.Manoj Bhandari, learned counsel for the respondent no.4 has relied on various judgments of Apex Court rendered in the case of Tata Cellular Vs. Union of India, reported in (1994) 6 Supreme Court Cases 651 and Association of Registration Plates Vs. Union of India & Ors., reported in (2005) 1 Supreme Court Cases 679 to contend that the Court cannot interfere with the governments freedom of contract, invitation of tender and refusal of any tender which pertains to policy matter and that the judicial power of review in such like matters was limited.
On the other hand, learned counsel for the petitioner has supported their contention that the bid could not have been confirmed on a price much less than the reserve price by referring to the judgment of Apex Court rendered in the case of Rakesh Kumar Goel & Ors. Vs. Uttar Pradesh State Industrial Development Corporation Ltd. & Ors., reported in (2010) 8 Supreme Court Cases 263 wherein the highest bid which was much lower than the reserve price was accepted but the Apex Court while setting aside the said auction sale being less than the reserve price restrained itself from handing over the matter to the CBI to investigate but nevertheless imposed cost of Rs.2 lacs to be given to each of the two appellants in the said case. The relevant para of the said judgment read as under:-
"19. In the overall facts of the case (which have only partly unfolded so far) the version given by Harbeer Singh appears to be highly probable. But even if we discount that and take the documents concerning the auction sale of the two plots in the government record at their face value, the auction proceedings of the two plots appear to be full of anomalies some of which may be enumerated as follows:
xxx xxx xxx
(10 of 13) [CW-15874/2017]
(vi) Even though no reserve price was mentioned in the Sale proclamations and the Auction Memos, from the other materials on record it appears that reserve prices were actually fixed for the two plots in question. The reserve price for plot no.2/1 was fixed at Rs.25 lakhs and for plot no.2/2 Rs.20 lakhs.
Now, this gives rise to two questions. First, how could the reserve prices be so low? In the Additional Affidavit filed by the State in compliance with the order dated July 7, 2009 it was admitted that "the valuation of the properties were not computed in accordance with the procedure as prescribed under the aforesaid Chapter-XV of the Revenue Manual and were fixed without any basis". In this connection it is worthy to note that plot no.2/1 has an area of 27,800 Sq. yards and plot no.2/2, 35,700 Sq. yards; both the plots are situate in the industrial area, Sahibabad adjoining Delhi.
According to the private respondents, the market value of those plots in 1992 would be in crores. We are inclined to think that the value of the two plots would be nearer the figure quoted by the respondents than the paltry amounts of Rs.25 lakhs and Rs.20 lakhs. The second and the far more important question is how the bids of Rs.6,30,000/- and Rs.6, 20,000/- could be accepted for plot nos.2/1 and 2/2 when their reserve prices were Rs.25 lakhs and Rs.20 lakhs respectively? If the highest bid was much lower than the reserve price, the normal procedure is to reject all bids and to hold a re-auction on a later date."
"47. At one stage we considered asking the CBI to investigate the present case as also other cases of auction sale and alienation of land by the Revenue Department of the State Government in the District of Ghaziabad. We, however, refrain from doing so for two reasons. One, the CBI is already overburdened and secondly, the matter is about 20 years old. The officers posted at Ghaziabad would no longer be there, some of them might even have retired.
48. But this case certainly calls for exemplary costs to the appellants. We wish to make it absolutely clear that this Court is not for manipulators, speculators and land grabbers. The litigation in this Court is not like buying a lottery ticket that, if luck favours, might bring a windfall (even though illegitimate) but would cost no more than the expenses of litigation. That is not the way of this Court. We, accordingly, impose cost of Rs.2 lakhs on each of the two appellants. The amount of cost must be paid to the Supreme Court Legal Aid Committee within 12 weeks from today. In case receipts showing payment of the cost is not filed within the time as directed, the (11 of 13) [CW-15874/2017] amounts of cost shall be realised from the appellants as fine under the provisions of the Code of Criminal Procedure."
The Apex Court in the case of Ram Kishuun & Ors. Vs. State of U.P. & Ors., decided on 24.05.2012, reported in (2012) 11 SCC 511 while relying on the judgment rendered in the case of State of U.P. Vs. Shiv Charan Sharma & Ors. [AIR 1981 SC 1722 as well as Anil Kumar Srivastava Vs. State of U.P. & Anr., [AIR 2000 SC 355] held that while fixing the reserve price, application of mind is required and that reserve price means the price from where the bid or auction begins. The relevant para of the said judgment reads as under:-
"14. In State of U.P v. Shiv Charan Sharma & Ors.: AIR 1981 SC 1722, this Court explained the meaning of "reserve price" explaining that it is the price with which the public auction starts and the auction bidders are not permitted to give bids below the said price i.e the minimum bid at auction.
15. In Anil Kumar Srivastava v. State of U.P. & Anr.: AIR 2004 SC 4299, this Court considered the scope of fixing the reserve price and placing reliance on its earlier judgment in Duncans Industries Ltd. v. State of U.P. & Ors.: AIR 2000 SCC 355, explained that reserve price limits the authority of the auctioneer. The concept of the reserve price is not synonymous with valuation of the property. These two terms operate in different spheres. An invitation to tender is not an offer. It is an attempt to ascertain whether an offer can be obtained with a margin. The valuation is a question of fact, it should be fixed on relevant material. The difference between the "valuation" and "reserve price" is that, fixation of an upset price may be an indication of the probable price which the property may fetch from the point of view of intending bidders. Fixation of the reserve price does not preclude the claimant from adducing proof that the land had been sold for a low price."
From the above facts and discussion, the only conclusion that one can draw is that the reserve price should have been fixed after taking into consideration all the factors but once the same (12 of 13) [CW-15874/2017] was fixed, the bid could not have been given at a price lessor than the same which has vitiated the entire proceedings. Allowing the Municipal Council, Balotra to allot the bid at a lessor rate than reserved price would not only set a bad precedent but give ample opportunity to unscrupulous elements, both outside and inside the government to misuse their authority, act arbitrarily and malafidely besides opening the scope of corruption.
Besides the above conclusion drawn by the Court, certain interim directions were passed by this Court. The interim orders were challenged uptil the Apex Court. The Apex Court vide its order dated 14.06.2018 disposed of SLP No.15384/2018 arising out of impugned final order dated 07.06.2018 in DBSAW No.988/2018 by observing as under:-
"Without going into the rival contentions and merits of the matter and specially when the matter is directed to be listed on 3rd July, 2018, we request the High Court that the matter be heard on 3rd July, 2018 itself. The financial implications may also be considered by the High Court while passing appropriate orders."
Admittedly, in pursuance to the order passed by this Court to start the process of inviting fresh tender for the year 2018-2019 subject to the outcome of both the writ petitions, the highest bid closed on 2,80,17,000/-. One fourth of the amount of the Cess Tax of Rs.2,80,17,000/- was deposited by the said bidder on 31.05.2018, which shows that there are heavy financial implications too, resulting in huge loss both to the Trust and Municipal Council, in case, the respondent no.4 is allowed to continue In view of the above, S.B. Civil Writ Petition No.15874/2017 filed by the Balotra Water Pollution Control Treatment & Research (13 of 13) [CW-15874/2017] Foundation Trust is allowed and the bid confirmed in favour of the respondent no.4 is accordingly set aside.
Once this Court has allowed the writ petition filed by Balotra Water Pollution Control Treatment & Research Foundation Trust and set aside the tender earlier granted to the respondent no.4 on the ground that bid was awarded at lessor than the reserved price, the second question as to whether the said contract was granted uptil 31.03.2018 or was required to be extended uptil 31.03.2019 need not be gone into. Accordingly, S.B.Civil Writ Petition No.1016/2018 filed by M/s Ridhi Sidhi Associates seeking extension of the period of contract upto 31.03.2019 is dismissed as rendered infructuous in view of the order & judgment passed in SBCWP No.15874/2017, as above.
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