Gauhati High Court
Sri Dip Gogoi And Ors. vs Numoligarh Refinery Ltd. And Anr. on 14 March, 2003
Equivalent citations: III(2003)BC301, 2004(1)CTLJ393(GAU)
Author: A.H. Saikia
Bench: A.H. Saikia
JUDGMENT A.H. Saikia, J.
1. The central issue put under the judicial scrutiny through this writ petition is whether the selection of agencies for different categories of vehicles of requisite numbers by lottery is arbitrary, discriminatory and violative of Article 14 of the Constitution of India.
2. The factual matrix of the case, in a nutshell, is that the respondent-Numoligarh Refinery Ltd. (for short' the NRL') floated the notice inviting tender, for short 'NIT', on 3.6.2002 (Annexure A to the writ petition) inviting tender in single bid system from the intending agencies for the work 'Hiring of Vehicles for NRL'. As per the NIT, the tender documents would be issued to the intending agencies on payment of Rs. 500/- which after having been duly completed as per the requirement of the tender documents, shall have to be submitted to the Commercial Department, NRL during the period from 14.06.2002 up to 13.00 hours on 21.6.2002 and those tenders shall be opened on 21.6.2002 after 13.30 hours. The petitioners, being the educated unemployed youth who have already been in such business with the NRL by giving their vehicles on hire by Banking loan from the financial institution, having come to know about the said NIT, have purchased the tender documents by paying Rs. 500/- per tender paper, each of which contains Letter Inviting Tender (for short the LIT) dated 17.5.2002 (Annexures B series to the writ petition) accompanying the special terms and conditions including the procedure for selection of the contractors. The relevant terms and conditions under the special terms and conditions may be reproduced as under:
SPECIAL TERMS AND CONDITIONS "...
3.0 Scope of Work 3.1 The work involves providing, maintaining and operating of Brand New Motor Vehicles in perfect running conditions, having good quality caushion with caushion back. The vehicle provided shall be clean, well maintained at all times with uniformed and well mannered driver.
3.2 Whenever it is mentioned in this tender that the contractor shall perform certain, work or provide certain facilities/equipment, it is understood that the contractor shall do at his own cost.
4.0 Period of Contract:
4.1 Period covered by this contract shall be for duration of 2 (two) years to be reckoned from the date vehicle is ready for services in Numoligarh Refinery Ltd. However, the date of placement of Vehicle should not be later than 30 days from the date of acceptance of Letter of Intent. 8.0 Inspection of Vehicle The vehicle(s) intended to be used shall be made available by the contractor to the Officer-in-Charge within 30 days from, the date of acknowledgement of letter of intent. No vehicle shall be acceptable for operation unless they are inspected and approved by the Officer-in-Charge. The vehicle to be placed should meet the following criteria:
* There shall not be any change in ownership of vehicle. * The vehicle should not be purchased six months prior to from the date of issue of order. The vehicle should not run more than 10,000 K.Ms. prior to placement. * The vehicle should not have any prior record of accident and all details of previous Insurance claims to be submitted
If the vehicle is not placed within 30 days from the date of receipt letter of intent for inspection, the Letter of Intent automatically lapses without any further necessary action and EMD stands forfeited. 28.0 Procedure for Selection of Contractors:
Following steps shall be followed for award of contract:
* Tender documents shall be issued on submission of cost of tender document Separate tender documents needs to be purchased for separate vehicles.
* Rates of Fixed Charge, Running Charge, Overtime, Outstation Stay shall be provided in the tender document.
* Tender document duly signed on each page by the bidder as token of acceptance of rates, terms and conditions, requisite EMDs. Income/Sales Tax Clearance Certificate all enclosed in a sealed envelope as stated in para 7 of letter inviting tender shall form the offer.
* Offers shall be received till 1.00 P.M. of last date of submission of offer.
* Offers shall be opened on the due date of submission in presence of bidders.
* All offers without any deviation from rates, terms and conditions as directed by NRL and accompanied by requisite amount of EMD shall be considered for further evaluation.
* Offers qualifying (he above criteria be given one serial number. * Agencies for different categories of vehicles of requisite numbers shall be selected by lottery of the serial numbers in presence of bidders. * Waiting list for each category of vehicles consisting of ten numbers of agencies shall be created by lottery to meet any future requirement. However, EMDs of these agencies shall be released after award of the tendered requirement of vehicles. Prior to award gf future required vehicles, these agencies have to deposit the requisite security deposits as stated in Clause 5.0 of special conditions of contract of this tender document. * Work order shall be issued to qualified agencies only after obtaining their Police Verification."
More so, the schedule of rates for hiring the vehicles of NRL has also been displayed by appending a Table to such effect for acceptance by the bidders as Annexure 'A' at page 15 of the LIT.
The relevant portion of the schedule of rates as appended in the LIT may be quoted below:--
Name of Work Schedule of Rates Hiring of vehicles for NRL (Tender No. NRL/P and A/01-02/937 SI. No. Type of Vehicle D.D.H. Monthly fixed charge Running charge KM Overtime Hour Outstation/ Stay/night
1. 52 seat capacity Bus (Diesel, Tata 1510)/TC) Body : Semi Deluxe 24 35,435.00 4.73 NIL 150.00
2. 35 Seat capacity Bus (Diesel. Tata 609), Body : Semi Deluxe.24
32,602.00 3.15 NIL 150.00
3.
Esteem VX (Petrol) 16 15,714.00 3.09 20.00 75.00
4. Ambassador ISZ (Petrol AC) 16 13,472.00 3.09 20.00 50.00
5. Mahindra Utility (Diesel) 24 15,851.00 2.10 NIL 50.00
6. Tata Spacio (Diesel) 24 16,044.00 1.45 NIL 50.00
7. Mahindra (Commandar) Diesel) 24 14,910.00 2.10 NIL 50.00
8. Maruti Gypsy (Petrol) 24 16,547.00 2.57 NIL 50.00
9. Tata Sumo Ambulance 24 17,666,00 1.89 NIL 50.00 We confirm that our bid complies to the total commercial requirements of this tender document regarding terms and conditions, Monthly Fixed Charge, Running Charge, Overtime Charge, Outstation Stay, etc. without any deviation for the vehicle.
................ At SI. No.................
Seal and Signature of the Bidder.
3. Dissatisfied with the Clause Agencies for different categories of vehicles of requisite Nos. shall be selected by the lottery of the serial Nos. in presence of bidders in the said special terms and conditions, instead of submitting the tenders after the purchase of tender documents, the petitioners approached this Court challenging precisely the selection process of NRL in awarding such work by a lottery. Their contention is that such selection by the lottery would be only by chance and there would also be few who may be lucky to receive the work and as such by adopting the impugned procedure of selection, the NRL has been engaging in lottery transaction which is gambling in nature and contrary to the public policy.
4. Assailing the impugned selection process, Mr. C. Baruah, learned Sr. Counsel has contended that such procedure of allotment of works by lottery cannot be treated as 'trade or commerce' because in case of 'commerce or trade' there is no element or ingredient of chance. According to him, the element of chance makes lottery a gambling. On the other hand, an absence of chance inherently attached to any contract coupled with some skill makes it to be a 'trade'. Therefore, trade is always associated with some skill. In case of lottery, there is absence of any skill predominantly occupied only with the ingredient of chance. His submission is that the gambling would not fall within the meaning of the word 'trade' under Article 301 of the Constitution. It is stated that the impugned procedure adopted by the NRL cannot be construed to be a 'trade' or 'commerce' within the said provision or Constitutional mandates.
5. It is also contended on behalf of the petitioners that the exercise of discretion by the NRL in the tender process should be objective and as such the test of reasonableness must be strictly adhered to. The action of the NRL is to be treated on the touch stone of fairness and justice. In the instant case, the impugned action of the respondent authority, not being at all reasonable and the same being totally arbitrary and is liable to be declared illegal and ultra vires of the Constitutional dictum.
6. Endorsing the impugned procedure of selection of hiring vehicles by lottery on the basis of fixed schedule rates for the various vehicles, Mr. P.C. Deka, learned Sr. Counsel appearing for the respondents-NRL, has vehemently argued that there is no illegality or arbitrariness in making the impugned selection by lottery when the tenders are invited for hiring of the vehicles giving a fixed rate as evident from the schedule of rates above noted. Denying the allegations that in floating the NIT, the NRL has been indulging itself in lottery transaction which is being gambling in nature and opposed to public policy, Mr. Deka has submitted that the procedure stated to be adopted by the NRL is absolutely correct and justifiable and based on reasonable grounds. According to him 2 (two) tenders were floated earlier for hiring the vehicles of different categories i.e., in the year 1999 and 2001. However, in the first occasion, rates quoted by the lowest bidders for different categories of vehicles were found to be in lower side and unworkable. Though the jobs were awarded to lowest quoted agencies, except one agency, other failed to provide vehicles to NRL. In the second occasion, in order to avoid unworkable rates, it was decided to indicate the estimated rate in the tender and to allow the bidders to offer percentage rebate over the NRL estimated rates. The tender was later concelled as per the direction of the High Court on an application by few individuals alleging untowardly incidents during submission of tenders. In that tender also, various agencies quoted very high rebate leading to abnormally low and unworkable rates. In the event of award of contracts to those bidders, they would have either incurred heavy losses or failed to provide vehicles leading to forfeiture of earnest money. It is also contended that when the lowest bidders quote one unworkable rate, the NRL cannot even talk to any other bidder for finalising the tender as per Central Vigilance Commission's (for short, CVC) guideline due to which a change in procedure was necessitated. According to Mr. Deka, most of these aspirants, being unemployed youths and having no past experience of such business, quoted very unrealistic and abnormally low rates at which they could not perform the business profitably.
7. Therefore, according to Mr. Deka, by the impugned selection as mentioned in the NIT, the prime intention of NRL is to help the tenderers for doing a business with profit margin so that the NRL also gets proper service from the contractors in return. As such, in order to eliminate the possibility of quoting abnormally low rates by the agencies and to obtain uniform and reasonable rates from all selected bidders, it has been decided to mention the reasonable and workable fixed rates in the tender and the bidders have been asked to confirm their acceptance of their rates as schedule rates mentioned in the LIT itself. In this selection procedure, all the bids having requisite Income-tax Clearance Certificate, Sales Tax Clearance Certificate and Earnest Money Deposit are qualified and are at par in respect of standing. Hence to select the required number of vehicles out of qualified bidders, fair and transparent procedure of selection by draw of lot in presence of the bidders has been proposed to be adopted. His contention is that such practice of selection of agencies for vehicles by draw of lot is also being followed in some other Public Sector units in North East Region and such selection by lottery cannot be termedas 'gambling' and it is accepted procedure for selection when all are found at par. It is categorically denied that there is any element of gambling involved in the impugned procedure and impugned procedure does not construe 'trade' and 'commerce' within the meaning of Article 301 of the Constitution. In support of his submission, Mr. Deka, has relied on the affidavit-in-opposition particularly the contentions made in paragraphs 109 and 11 thereto filed on behalf of the NRL.
8. Before consideration of the rival contentions of the parties, it would be apposite to understand the meaning of the word 'Lottery'. As per Oxford Learner's Dictionary 'Lottery' means--'a way of raising money for a Government, charity, etc. by selling tickets that have different numbers on them that people have choosen Numbers are then chosen by chance and the people who have those numbers on their tickets win prizes.' In Chamber's Twentieth Century Dictionary, 'Lottery' signifies as 'an arrangement for distribution of price by lot, a matter of chance, a card game of chance.' As per Black's Law Dictionary 'Lottery' means: : "A chance for a prize for a price. A scheme for distribution of prise or prizes by lot or chance, the number and value of which is determined by the operator of lottery. U.S. v. Baker, C.A. Pa, 364 F 2d. 107, 111. Essential elements of a lottery are consideration, prize and chance and any scheme or device by which person for a consideration is permitted to receive a prize or nothing as may be determined predominantly by chance. State v. Wassick. W. Va, 191 S.E. ed, 283.288."
9. After going through the meaning of 'Lottery' as indicated above, it transpires that in case 'Lottery' there are three general ingredients needed to be fulfilled. Those are--consideration, prize and chance. It is manifestly a matter of chance wherein there is an arrangement for distribution of prizes for a price. The ultimate element involved in the 'Lottery' is gaining a prize by chance by investing consideration. Bearing the significance of the terms 'Lottery' in mind, it is felt that the basic elements to constitute 'Lottery' are seemingly absent in the impugned selection. By lottery, it is primarily intended to raise money for a charity or authority organised by an individual or group of individuals or by Government by selling tickets having different numbers on them to be chosen by the public who in turn win the prizes on drawal of those numbers by chance. In the instant case, it is seen that there are no elements of consideration and prize. Nor has the NRL been proposing to raise, money to gain profit. It is only a process of chance to get the works allotted/settled by drawing of lot from the bidders whose qualifications in all respect in terms of NIT are found to be at par. What is transpired in the present case is that for hiring of vehicles, the schedule rates has already been fixed for various types of vehicles as specified in Annexure A to the NIT requiring the bidders to accept the same and the bid being identical in nature, it is only for the purpose of fairness and transparency that the impugned procedure has been adopted so as to select the bid of those bidders by a lottery in their presence without giving any special treatment to any bidder.
10. In that view of the matter, on consideration of the rival contentions of the parties at length, this Court is of the view that the impugned procedure for selection by lottery is not a gambling and has not offended the meaning of 'Trade' or 'Commerce' under Article 301 of the Constitution in any matter as argued by the learned Sr. Counsel for the petitioner. Accordingly, this Court does propose not to concur with the submissions advanced on behalf of the petitioner. On the other hand, having regard to the contentions and submissions put forward on behalf of the NRL, this Court considers the stand taken by the NRL to be correct and justified and there is no hesitation to approve the impugned selection. Since the rates has already been fixed and specified for various types of vehicles by NRL in Annexure A to the LIT, contractors are required to submit their tenders accepting the said schedule rate and as such there is no scope to cause prejudice to the interest of the bidders in whose presence the selection is intended to be made by drawing a lot. Agreeing with argument made by Mr. Deka, the learned Sr. Counsel, as regards the transparency in the impugned selection system, this Court has every reason to observe that the authority has already demarcated the scope of works and the procedure for inspection of vehicles in Clauses 3.0 and 18.0 in the special terms and conditions as referred above wherein it is clearly stated inter alia that Brand New Motor Vehicles are required to be provided in its perfect running conditions clubbed with a caution that no vehicle shall be acceptable for operation unless they are inspected by the Officer-in-Charge. It may also be said that the impugned procedure is reasonable, fair and acceptable.
11. That being so, this Court has opined that the impugned selection is not an arbitrary or discriminatory one and is very much within the permissible limit under Article 14 of the Constitution.
12. Accordingly, this Court does not find any merit in this writ petition. Interim order passed on 28.6.2002 shall stand vacated.
In the result, the writ petition stands dismissed. However, in the facts and circumstances of the case, there shall no order as to costs.