Gauhati High Court
Jewti N G O vs The State Of Assam And 4 Ors on 2 August, 2017
Author: Suman Shyam
Bench: Suman Shyam
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
PRINCIPAL SEAT AT GUWAHATI
(EXTRAORDINARY WRIT JURISDICTION)
WP(C) Nos.5734/ 2014 & 6308/2014
Jewti N.G.O. ... .... ... Petitioner
-Versus-
The State of Assam & others. ... ... Respondents
BEFORE HON'BLE MR. JUSTICE SUMAN SHYAM For the petitioner : Mr. A. Sarma, Advocate.
For the respondents : Mr. D. Nath,
Addl. Sr. Govt. Advocate, Assam.
Mr. B. Gogoi, Advocate.
Date of hearing : 25.07.2017.
Date of Judgment : 02.08.2017.
JUDGMENT AND ORDER (CAV)
1. Heard Mr. A. Sarma, learned counsel appearing on behalf of the writ petitioner in both the cases. Also heard Mr. D. Nath, learned Additional Senior Government Advocate, Assam, representing the respondent Nos.1 to 4 as well as Mr. B. Gogoi, learned counsel appearing on behalf of respondent No.5.
WP(C) Nos.5734/2014 & 6308/2014 Page 1 of 17
2. The brief facts, giving rise to the filing of these writ petitions, may be noticed as follows :-
I. The respondent No.4 i.e. the Deputy Commissioner, Sivasagar District had issued a Notice Inviting Tenders (NIT) dated 03.07.2014 for settlement of the Brahmaputra Part-II Fishery located in the Sivasagar district for a period of seven years. The Government value of annual revenue for the fishery for the first year was shown as Rs.4,67,500/- in the NIT. The NIT dated 03.07.2014 had inter-alia mentioned that it was a 60% fishery to be settled with societies consisting of 100% Scheduled Caste/Maimal Community of actual fishermen who fulfill the conditions laid down in the NIT.
II. In response to the said NIT, as many as 8(eight) bidders including the writ petitioner society herein had submitted their bids. Upon opening the bids, the respondent No.4 had prepared a comparative statement (CS) which was forwarded to the Government for necessary action. As per the comparative statement, one Bipul Hazarika, Secretary of Natun Gatenga Pankajyoti Self Help (SH) Group had offered the highest price of Rs.50,00,599/- whereas the offer made by the writ petitioner for an amount of Rs.33,23,501/- was the second highest. The respondent No.5 had quoted Rs.12,05,000/- and had emerged as the fifth highest bidder. Despite the fact that the rate quoted WP(C) Nos.5734/2014 & 6308/2014 Page 2 of 17 by the petitioner was nearly three times the offer made by the respondent No.5, yet, by the impugned order dated 05.11.2014, the respondent authority had settled the aforesaid fishery in favour of respondent No.5 for a yearly revenue of Rs.12,05,000/-. Aggrieved, the petitioner society had approached this Court by filing WP(C) No.5734/2014 assailing the order of settlement dated 05.11.2014.
III. While issuing notice, this court had passed an interim order dated 10.11.2014 in WP(C) No.5734/2014 directing status quo to be maintained as regards the process of settlement of the Brahmaputra Part-II Fishery. In view of the interim order dated 10.11.2014, the settlement awarded in favour of the respondent No.5 could not be given effect to as a result of which, the Circle Officer, Sivasagar, had issued an order dated 01.03.2014 permitting the respondent No.5 to temporarily operate the fishery on payment of Rs.1165/- as daily revenue.
IV. The aforesaid action on the part of the Circle Officer had prompted the writ petitioner to once again approach this Court by filing WP(C) No.6308/2014 assailing the order of temporary settlement dated 01.03.2014. Taking note of the grievance of the writ petitioner, this Court had passed an order dated 09.12.2015 suspending the operation of the order dated 01.03.2014 issued by the Circle Officer, Sivasagar and liberty WP(C) Nos.5734/2014 & 6308/2014 Page 3 of 17 was given to the settling authority to allow the writ petitioner to operate the fishery on payment of a daily collection of Rs.8000/- which amount was found to be commensurate with the annual price offer of Rs.33,23,501/- made by writ petitioner in the tender process. Accordingly, the writ petitioner was allowed to temporarily operate the fishery on a daily basis, against collection of a toll of Rs.8000/- per day until 18.10.2016 i.e. the date on which the aforesaid settlement was cancelled on the ground of non-payment of the outstanding dues.
3. Referring to the documents available on record Mr. Sarma, learned counsel for the petitioner, submits that as per the CS prepared on 06.09.2014, the bid submitted by the writ petitioner was initially found to be technically deficient on three counts, viz., (1) neighbourhood certificate was not given by the Circle Officer; (2) revenue offered is highly exorbitant; and (3) the father of the secretary of the petitioner society has been held to be a defaulter while he was functioning as a member of another society. However, submits Mr. Sarma, a perusal of the impugned order dated 05.11.2014 would go to show that the Government has rejected the bid of the writ petitioner on altogether different grounds. Inviting the attention of the court to the order dated 05.11.2014, Mr Sarma submits that the grounds stated therein mentions that the writ petitioner did not submit fishing experience certificate, balance-sheet and neighbourhood certificate WP(C) Nos.5734/2014 & 6308/2014 Page 4 of 17 but in reality, two neighbourhood certificates issued by the concerned Gaonburah and the President of the Gaon Panchayat had been submitted by the petitioner along with the tender. That apart, submits Mr. Sarma, a certificate issued by the District Fishery Development Officer (DFDO) Sivasagar, regarding the fishing experience of the members of the petitioner society was also enclosed with the tender document. The learned counsel submits that as per the NIT conditions there was no need for submission of balance- sheet and the fact that Ananda Hazarika, i.e. the father of the secretary of the petitioner society, was adjudged as a defaulter, while he was a member of another society, cannot have any bearing in the present tender process. As such, the bid of the writ petitioner, according to Mr. Sarma, could not have been held to be technically defective.
5. Coming to the issue of the high price quoted by the petitioner, Mr. Sarma submits that the purpose of floating a tender was to secure the highest revenue against the settlement of the fishery. The petitioner had quoted high price so as to increase its chances of success in the tender process. As such, the respondents were not justified in rejecting the bid of the petitioner on the ground that the offer made was exorbitantly high, more so, when there is no provision in the NIT or the Rules permitting the respondents to reject any bid on such ground.
WP(C) Nos.5734/2014 & 6308/2014 Page 5 of 17
6. By placing reliance on the decision of the Hon'ble Supreme Court in the case of Dutta Associates Pvt. Ltd. vs. Indo Merchantiles Pvt. Ltd. and others reported in (1997)1 SCC 53, Mr. Sarma submits that the concept of viability range in matters of Government contract has been rejected by the Apex Court in the said decision and law is now well settled that the tendering authorities cannot apply such criteria of viability range after opening the bids so as to eliminate higher price offers made by the eligible tenderers. In the present case, submits Mr. Sarma, the records would establish beyond doubt that the bid submitted by the petitioner society was in accordance with the tender conditions and hence, the same could not have been rejected by the authorities in such an arbitrary fashion so as to award the settlement in favour of the 5th highest bidder i.e. the respondent No.5 at a much lower price.
7. The learned Government Advocate, Assam has produced the records and has made submissions to defend the impugned order dated 05.11.2014 by stating that the tendering authorities are the best judge to ascertain whether a particular price offered is viable or not. In the present case, the offer made by the first three bidders including the writ petitioner was several times higher than the revenue generated in the previous settlement years and hence, taking note of the ground realities, the Government took the decision not to settle WP(C) Nos.5734/2014 & 6308/2014 Page 6 of 17 the fishery with such bidders so as to avoid legal proceedings in future pertaining to recovery of Government dues. By referring to a decision of this Court rendered in the case of M/S Utkal Galvanizers Ltd. vs. The State of Assam and others reported in (2012) 5 GLT 775, Mr. Nath, submits that a decision as to the feasibility of the price offer made by the bidders was taken by the departmental authorities on assessment of the ground realities and this Court, in exercise of power of judicial review, would not interfere with the said decision and substitute its own opinion in the matter.
8. Mr. B. Gogoi, learned counsel appearing for the respondent No.5, has supported the arguments advanced by the learned Government Advocate and has further submitted that the departmental authorities had taken a conscious decision not to settle the fishery with the bidders quoting abnormally high price only to obtain the order of settlement despite knowing fully well that they will not be able to meet the Government revenue demand once the settlement is given. The assessment of the departmental authorities, in so far as the writ petitioner is concerned, according to Mr. Gogoi, turned out to be correct in view of the default committed by the petitioner society in paying the revenue in respect of the daily settlement granted in its favour at the same offered rate which works out to Rs.8000/- per day. Mr. Gogoi submits that the writ petitioner society is a defaulter and there are Bakijai proceedings pending WP(C) Nos.5734/2014 & 6308/2014 Page 7 of 17 against it for recovery of substantial amount of Government dues. Under the circumstances, the decision of the departmental authorities cannot be found fault with. In support of his aforesaid argument the learned counsel has relied upon the decision in the case of Jagadish Mandal vs. State of Orissa and others, reported in (2007) 14 SCC 517 to argue that the power of judicial review may not be exercised to protect private interest at the cost of public interest or to decide contractual disputes. He submits that the impugned decision has been taken by the Government bonafide and in public interest and hence, the same does not call for any interference from this Court.
9. I have considered the submissions made by the learned counsel for the parties and have also gone through the materials available on record.
10. As noted above, the NIT dated 03.07.2014 clearly lays down the conditions that the bidders would have to fulfill so as to be eligible to participate in the tender process. Clause 19 of the NIT dated 03.07.2014 inter alia, mentions that the tenderer shall have to submit actual fishermen certificate and caste certificate. From the record I find that the writ petitioner society had submitted certificate issued by the DFDO in support of its claim that the members of the petitioner society belong to the scheduled caste fishermen community. WP(C) Nos.5734/2014 & 6308/2014 Page 8 of 17
11. Rule 12 of the Assam Fishery Rules, 1953 mandate that a 60% category fishery shall be settled with cooperative societies, non- Governmental organizations and self-help groups consisting of 100% actual fishermen in the neighbourhood of the fishery concerned by the tender system. The Fishery Rules, however, does not indicate as to who would be the competent authority to issue such neighbourhood certificate. A scrutiny of the NIT dated 03.07.2014 also goes to show that nothing has been mentioned therein as to who would be the competent authority to issue a neighbourhood certificate.
12. Record reveals that the writ petitioner society has submitted neighbourhood certificates issued by the concerned "Gaonburah" and also the President of the Gaon Panchayat. The authenticity of those certificates are not in dispute nor is it the case of the respondents that the petitioner society does not belong to the neighbourhood of the fishery. Under the circumstances, the stand of the respondent authorities to the effect that the petitioner society did not submit a valid fishing experience certificate and neighbourhood certificate merely because the same is not issued by the Circle Officer, does not appear to be correct on the face of the record.
13. As regards the objection pertaining to non-submission of balance-sheet, it is seen from the record that the NIT does not stipulate any such requirement. In the case of Raja Das vs. Assam Fisheries WP(C) Nos.5734/2014 & 6308/2014 Page 9 of 17 Devp. Corpn. And others reported in 2005(3) GLT 544 this court has held that a tender can be declared as invalid only if it violates the tender conditions. Applying the ratio of the said decision, it is held that since there was no requirement to furnish balance sheet under the NIT, the same cannot be a ground for declaring the bid as invalid.
14. Although there is an observation made in the comparative statement regarding the default status of the father of Rubul Hazarika i.e. the secretary of the petitioner society, yet, it appears from the order dated 05.11.2014 that the same is not a ground on which the petitioner's bid had been rejected. The learned Government Advocate has also fairly submitted that no such ground was available for rejection of the petitioner's bid. In view of the above, this Court need not go into the said aspect of the matter.
15. The findings and observations made herein before would go to show that the tender submitted by the petitioner was compliant with the terms of the NIT as well as the provision of Rule 12 of the Assam Fishery Rules, 1953 and as such the bid of the petitioner society could not have been rejected on the ground of any technical defect.
16. Coming to the issue of exorbitant price quoted by the bidders, a perusal of the impugned order dated 05.11.2014 indicates that the bids of as many as three bidders i.e. the H1, H2 and H3 were rejected on the ground that the price quoted by those tenderers were exorbitantly WP(C) Nos.5734/2014 & 6308/2014 Page 10 of 17 high. The writ petitioner, being the second highest (H2) bidder, has assailed the impugned order dated 05.11.2014 contending that such conclusion of the authorities was without any basis and therefore, was wholly arbitrary and illegal.
17. From the materials available on record, I find that the NIT dated 03.07.2014 did not contain any condition to indicate that bids quoting high price shall be rejected. A scrutiny of the records produced by the learned Government counsel also goes to show that there was no decision taken by the tendering authority before opening of the bids to reject any offer found to be abnormally high nor was there any conscious decision on as to what amount would be regarded as "abnormally high price". A reading of the impugned order goes to show that the price offered by the three bidders i.e. H1, H2 and H3 had been rejected on an assessment made by the respondent authorities that the offers made by them were not viable and would inevitably lead to default.
18. The Assam Fishery Rules, 1953 requires that a 60% category fishery should be settled through a tender process. The very idea behind floating a tender is to select the most eligible bidder making the highest offer. Ensuring highest revenue against the settlement of the fishery is, therefore, undoubtedly the primary objective of the tender process. In the case of Jespar I. Slong vs. State of Meghalaya and WP(C) Nos.5734/2014 & 6308/2014 Page 11 of 17 others, reported in (2004) 11 SCC 485 the Hon'ble Supreme Court has observed that obtaining higher revenue by accepting the highest bid would only be in the public interest because the State would gain more revenue from it.
19. While it may be true that there may be bidders offering exorbitant price so as to grab the settlement only to subsequently end up as defaulter and to that extent, it cannot be denied that the tendering authorities must have the liberty to eliminate such superficial bidders. But such process of elimination must be fair and transparent whereby, the bidders are notified before the submission of the bids as to the criteria that would be followed for evaluation of the price bids. If the authorities are of the view that the predatory price offers should be discouraged and such bids should be eliminated at the threshold, there is nothing preventing them from incorporating suitable clauses in the NIT providing for the same. The authorities may even impose stringent default conditions in the NIT so as to act as a deterrent for such bidders quoting un-realistic prices. That apart, the option of insisting on additional security from the successful bidder if the price is found to be abnormally high, is also available to the authorities by making suitable provision in the NIT.
20. Under the existing system, possibility of default cannot be ruled out in case of any bidder, regardless of the price offered. There are WP(C) Nos.5734/2014 & 6308/2014 Page 12 of 17 adequate legal remedies, including the option of bakijai cases, available to the State to recover the dues from such defaulters. But to reject a bid for reasons not disclosed in the NIT would be totally impermissible. Once a tender is floated for settlement of the fishery, the government would also be equally bound by the NIT conditions and therefore, once the bids are opened, it would be wholly impermissible for the authorities to arbitrarily reject the higher offers on a mere speculation that such price offers would not be viable. It must be borne in mind that in fishery settlement tenders the bidders are all experienced fishermen who have a fairly good assessment as regards the financial implications of the price offered. Despite the same, if a bidder ends up quoting an abnormally high price, he does so at his own peril and the respondents cannot reject such an offer merely on an assumption, howsoever strong it may be, that the bidder will end up being a defaulter. Permitting such a recourse would, in the opinion of this court, not only afford potential ground for favoritism leading to pre-settlement litigation amongst the bidders but would also stand to frustrate the very purpose of inviting the tenders.
21. In a recent decision of this court in the case of Gangadhar Fishery Co. Op. Society Ltd. vs. the State of Assam & others [WP(C) No.904/2016], while interpreting Rule 12 of the Assam Fishery Rules, 1953 this court had made the following observations :- WP(C) Nos.5734/2014 & 6308/2014 Page 13 of 17
"33. A perusal of the aforementioned Rules would go to show that the same has a benevolent object which is to promote the interest of the group of people mentioned therein. Proviso to Rule 12, therefore, clearly enjoins a duty upon the Government to take proper care that the 60% category Fishery is settled with the special category of co- operative societies mentioned there-in. Unlike in the case of an open commercial tender, in case of settlement of a fishery under the Rules, there is a statutory duty cast upon the Government to ensure that the objective of the Fishery Rules is realized in its letter and spirit. In doing so, it would not only be open but also incumbent upon the Government to make such relevant enquiries so as to reach a satisfaction that not only the most deserving group is conferred with the settlement but also to ensure that the interest of government revenue is adequately protected. Therefore, subject to fulfillment of the NIT conditions, the price offered by the highest bidder must receive utmost priority and should normally be accepted, unless there are very good and compelling reasons to deviate therefrom. As long as the authorities provide a level playing field to all the bidders, mere technical defects not affecting the substance of the tender should not be permitted to defeat the underlying objective of the Fishery Rules."
22. From the above, it would be apparent that once it is found that the bidder has fulfilled all the requirements of the NIT the departmental authorities would be under a legal obligation to accept the highest offer since such a decision would be in the interest of the State and WP(C) Nos.5734/2014 & 6308/2014 Page 14 of 17 therefore, in public interest. Although heavy reliance has been placed by Mr. Gogoi on the decision of the Supreme Court rendered in the case of Jagadish Mandal (supra), yet, I find that that was a case where the Hon'ble Supreme Court had taken a view in the matter by relying upon the opinion expressed by the expert committee which was specifically constituted for the purpose. But in this case there is no such expert opinion available to support the impugned decision and therefore, the ratio of the said decision would not be applicable in the facts of the present case.
23. The plea of the respondents that the writ petitioner is a defaulter and therefore, cannot be granted settlement of the fishery can also not be accepted by this court on account of the fact that those are developments that took place on subsequent dates and record reveals that those issues are subjudice in W.P. (c) No 7481 / 2016 and W.P.(c) No. 2720 of 2016 pending before this court.
24. It is settled law that In the matter of government contract, the court would examine the decision making process but not the merit of the decision. For the reasons stated above, this court is of the considered opinion that the impugned decision to reject the higher price offered by the bidders suffers from the vice of total non- transparency and therefore, is vitiated by complete arbitrariness. The same is accordingly declared as illegal and un-sustainable in law. WP(C) Nos.5734/2014 & 6308/2014 Page 15 of 17
25. There is another aspect of the matter which deserves mention herein. The bid of the fourth highest bidder quoting a price of Rs.15,25,999/- was also refused by the order dated 05.11.2014 on grounds which are not tenable on the face of the record. In the order dated 05.11.2014, although it has been mentioned that the fourth highest bidder had not submitted fishing experience certificate, yet, from the record, I find that a fishing experience certificate dated 15.07.2014 issued by the DFDO produced by the said bidder is available on record. If the bid of the fourth respondent was otherwise, technically valid, the settlement order could not have been issued in favour of the respondent No.5 by ignoring the higher price offered by the H4, which offer was admittedly found to be acceptable by the authorities.
26. Coming to the question of relief that can be granted in this case, this court has noticed that the highest bidder quoting the price of Rs 50,00,599/- is not a party to this proceedings. In the absence of the highest bidder, no writ of mandamus can be issued in favour of the petitioner. That apart, the NIT was also issued on 03.07.2014 i.e. more than two years back and considerable amount of time has elapsed since then. Such being the position, while setting aside the settlement made in favour of respondent No.5, the matter is remanded back to the authorities to take a fresh decision on the WP(C) Nos.5734/2014 & 6308/2014 Page 16 of 17 question of granting permanent settlement of the fishery, in the light of the observations made herein above.
WP(C) No.5734/2014 stands allowed to the extent indicated above. In view of the observations made herein above, WP(C) No.6308/2014 stands disposed of.
Having regard to the facts and circumstances of the case, there would be no order as to cost.
Records be returned back.
JUDGE T U Choudhury WP(C) Nos.5734/2014 & 6308/2014 Page 17 of 17