Bombay High Court
Shri Vinayak Desai vs State Of Goa And Ors. on 24 October, 1994
Equivalent citations: 1995(4)BOMCR322
JUDGMENT
M.S. Vaidya
1. Heard Mr. Kantak for the petitioner, Mr. Lawande for respondents Nos. 1 and 2 and Mr. Lotlikar for respondent No. 3.
2. This petition is filed to challenge the acceptance of tenders submitted by respondent No. 3 for a certain project, advertised by respondents Nos. 1 and 2 in preference to the tender submitted by the present petitioner.
3. The respondent No. 1 the Government of Goa wanted to hold a Food and Cultural Festival of Goa, 1994 at Miramar beach in the period between 16th November, 1994 to 20th November, 1994. A notice inviting tenders for the construction of stalls, stage and the gate for the campus was published in local newspaper on 4-6-1994. Among many others, the petitioner had filed his tender along with two designs, one costing Rs. 3,24,000/- and the other costing Rs. 3,10,000/-. Respondent No. 3 had filed his tender making it clear that the tender was being filed on behalf of three persons, namely, he himself, one Ravi Fernandes and one Jose Issaias Fernandes. One of the designs was costing Rs. 3,10,000/- while the other was costing Rs. 3,00,000/-. As per the terms and conditions notified by the Government the tenders were invited from "reputed artists/designers/decorators with previous experience". It was clarified that the last date for receiving tenders was 1st July, 1994 and the tenders were to be opened on the same date in the presence of the tenderers or their representatives at 3.30p.m. The terms and conditions also indicated that the tenders should be accompanied by a deposit at call drawn in favour of Director of Tourism, Panaji, equivalent to 21/2% of the tendered value. It was explicitly made clear that "tenders without the prescribed E.M.D. would be rejected". The next condition indicated was that the successful tenderers would be required to keep a security deposit equivalent to 10% of the tendered value and the tenderer should ensure that the work was completed on time and that everything was in order during the period of the festival and further, that all systems worked uninterrupted even during unexpected power failures, if any. It was clarified that the rates quoted should be all inclusive, such as, expenses for transport, erection/fixing, loading and unloading, etc. The liability to maintain the structures erected, in the course of the festival, was also saddled on the tenderer. It was clarified that the Director of Tourism reserved his right to accept or reject any or all the tenders without assigning any reason.
4. As per the undisputed facts, though the respondent No. 3 should have deposited as EMD an amount of Rs. 7,500/- he deposited only Rs. 6,250/- along with the tender. According to the petitioner the respondent No. 3 did not possess any experience certificate in as much as they were absolutely new in the field. It was also contended that though the petitioner had submitted his tender in time, he was not informed anything about the acceptance or rejection of his tender despite his letter dated 15-9-1994 addressed to respondent No. 2. The petitioner contended that he waited reasonably upto 7-10-1994 and then filed this writ petition after having come to know in the meanwhile that the work was assigned wrongfully to respondent No. 3.
5. It was denied that the respondent No. 3 did not have any experience or that he had not produced any certificate. In the affidavit-in-reply filed on behalf of respondents No. 1 and 2 it was stated that the respondent No. 3 had presented the theme which was not only approved by the Government officials of P.W.D. but also the Government Architect and a decision to accept his tender was made collectively by the aforesaid authorities in view of the excellence of the theme taken by him for presentation on the site in question. It was contended that as against that, the petitioner did not specify any theme though it was not in dispute that he had submitted along with his tender certain designs. In short, the contention of the Government was that in view of the less cost and the brilliant theme the tender of respondent No. 3 was accepted in preference to that of the present petitioner. It was also submitted that it was realised that the deposit of Rs. 6,250/- was made short because of some error in calculation. Therefore, it was contended that the respondent No. 3 was given an opportunity by the Government authorities to make good that amount while furnishing the security for 10% of the cost of the value of the project as submitted by him. It was contended that there were no mala fides, no wrongful preference and nothing suspicious about the acceptance of the tender in question.
6. Respondent No. 3 also filed an affidavit enclosing therewith the certificates showing the experience which were tendered before the authorities and also stating how he had so far executed almost 70% of the work for which he was liable in pursuance of the tender.
7. After hearing, we wanted to satisfy ourselves with reference to the files possessed by respondents Nos. 1 and 2, as to whether or not, the tender forms submitted by the petitioner and respondent No. 3 were accompanied with any write-up containing the concept, the material regarding the capacity to design the concept and further, the capacity to execute the work was per the designs and in consonance with the concept that was presented to the authorities.
8. We found on inspection of those files that the respondent No. 3 had submitted along with the tenders, two separate and distinct write-ups regarding different concepts. Along with that, he had presented designs thereof. The petitioner had given, as it appears from the record, a write-up in respect of one of his themes regarding the stage but he had not given a write-up regarding the concept to be designed for the entrance gate.
9. It is not for us to say which of the concepts is better designed and what could be the reasons for preferring one concept to the other. Suffice it to state that the concept presented by the respondent No. 3 purported to be presentation of the stage in the form of "The Old Cidade de Goa" and the theme of "Arc of Triumph" for the Gateway. The write-up given by the petitioner for the stage presented the concept pertaining to the Nataraj form of Shiva coupled with the instruments of music designed on the stage. For the entrance, though the write-up is not given, the top of the entrance gate is decorated with a huge figure of fish, that being the prominent symbol of the food habits of the Goans.
10. We have described these themes only because the respondents Nos. 1 and 2 have stated in their affidavit that they had found the theme presented by respondent No. 3 more acceptable and representative of the Goan culture. It is also said that it was appropriate on account of the international event of exposition of the body of St. Francis Xavier, which is planned at the end of this year, and for which a number of international tourists are expected.
11. The main attack of Mr. Kantak regarding acceptance of the tender of respondent No. 3 was that when the text of the tender notice indicated that the tenders, which were not accompanied with the adequate amount of EMD, would not be considered and when it was not in dispute that the respondent No. 3 had deposited an amount which was less than the prescribed amount of EMD, respondents Nos. 1 and 2 were wrong in accepting his tender and then, after taking the decision in his favour for approving the designs given by him, in giving him a further opportunity of remedying the imperfectness that he had left while submitting the tender form. it was submitted that this was arbitrary, unconstitutional and therefore, the acceptance of his tender was liable to be rejected.
12. It was submitted that, in the given circumstances, the condition regarding deposit of requisite amount of EMD was an essential condition relating to the eligibility of the tenderer to be a good tenderer worthy of consideration and therefore, when the same was not adhered to by respondents Nos. 1 and 2, the facts disclosed a wrongful preference in respondent No. 3's favour. He distinguished the facts in the decision of this Division Bench in W.P. No. 91 of 1994 decided on 16th March, 1994 and relied upon the decisions in M/s. B.D. Yadav and M.R. Meshram v. Administrator of the City of Nagpur, A.I.R. 1984 Bombay 351 and in Sri N.O. Shetty v. Karnataka State Road Transport Corporation by its Managing Director, Bangalore and others, where the Bombay decision was distinguished on facts but after approving the principles stated therein. Mr. Kantak also pointed out that in M/s. Poddar Steel Corporation v. M/s. Ganesh Engineering works and others, the aforesaid Bombay decision was approved.
13. The sum and substance of the law as is finally settled down in consequence of these rulings is that if the condition of the tender notice is essential part of the work, non-observance thereof would vitiate the acceptance of the tender and consequent action, but not otherwise.
14. The question therefore is whether or not, in the present case this term regarding acceptance of 21/2% EMD was an essential condition.
15. We may state, at the outset, that the work for which tenders were invited was not a work of routine construction of any building or any other construction of the usual type. The tenders were invited for a complex which had its own importance as it was being coupled along with an international event of the exposition of the body of St. Francis Xavier. The Department was, therefore, anxious to have the project executed in such a way that it should present some theme which was characteristic of the culture of Goa as well as the food habits of the people of Goa. Therefore what was to be more significant for the execution of the work was a brilliant concept and the designing thereof. The capacity to execute the work in accordance with the concept so presented to the Department was also one of the major things to be considered. From that point of view the tender notice itself had indicated that an adequate security for the performance of the work as per the theme design presented was necessary. It is not in dispute in the present case that such a security of 10% of the value of the project was obtained from respondent No. 3 after the approval was given to his tender.
16. When considered from this point of view, the requirement in the tender notice that the tender should be accompanied with an amount equal to 21/2% of the value of the project had no direct nexus with the presentation of the theme, the design thereof and the execution of the work. Indeed, the respondents No. 1 and 2 have come out with a contention that the tender of respondent No. 3 was accepted because of the thematic brilliance as also the designs presented for incorporating the theme. It is also stated that this was not left only to one official or the other, but the decision taken was a collective decision. This was really a special character of the work to be executed as also of the tenders that were invited for execution of the work.
17. In this context, we may refer to the observations in para 14 of the judgment in M/s. Varsha Book Stall v. State of Goa, W.P. No. 91 of 1994 decided on 16-3-1994 where this bench had emphasised upon the facts which were relevant in that case to ascertain whether or not, the work, which was subject matter of the tender, was a work of special character. On the facts which were presented in that case this Court had taken a view that the work was of a special character and that, therefore, in view of the fact that the thrust of the tender in that case was the maximum discount that was beneficial to the Government and other similar factors, which were listed therein, were required to be considered as circumstances that gave a special character to the whole work.
18. In our view, in the present case also the work was of a special character in view of the facts already discussed. In addition to the aforesaid consideration, we may point out that the imposition of the condition of deposit of 21/2% of the amount of the value of the work along with the tender was not a condition which had become necessary on account of any statutory provision or in pursuance of any statutory rule or in pursuance of any standing order as such. True it is that in matter of tenders invited by public authorities some uniformity of the procedure is necessary. But, even then, it is not the rule of law that every condition notified by the authorities for ensuring the genuineness of the person filing the tender or the genuineness of the offer made becomes a mandatory condition. There are conditions and conditions, and certainly, there are conditions which can be waived by the concerned authorities in appropriate circumstances. The Supreme Court observed on this aspect in M/s. Poddar Steel Corporation v. M/s. Ganesh Engineering Works , as follows :-
"As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance."
The Supreme Court pointed out that the terms which lay down essential conditions of eligibility the authority may be required to enforce them rigidly. But, the Supreme Court said, in other cases, it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. Respondents No. 1 and 2 have acted in the present case, virtually taking recourse to the legal position as propounded by the Supreme Court in the above mentioned case.
19. In this very context, we may also refer to the plea taken by respondent No. 3 in that behalf. According to him, it was a mathematical error on his part while filing the tender that he worked out the total amount of EMD at Rs. 6250/- instead of working it at Rs. 7500/-. There is no reason to suppose that there could not be any such mathematical error in computing the figure of the amount that was required to be deposited. Indeed, it is nobody's case that when the tenders were opened, it was immediately detected that the amount deposited by respondent No. 3 was less than the amount that was expected of him by way of EMD. It appears that the Department took some time to scrutinise the tenders and it is, indeed, not known at what point of time they realised that the EMD so tendered was not strictly in accordance with the requirement to that effect. It appears that all the tenders were placed for collective decision before several authorities and then the approval of those authorities was received. It is not the case that respondent No. 2, or for that matter any other authority, was guilty of any mala fides in handling the matter in the aforesaid manner. May it, therefore, be that just as respondent No. 3 was under a mistake of fact on account of miscalculation, the authorities in the Department also proceeded on the same mistake. In any event, there is no reason to dispute that there was unilateral mistake at least on the part of respondent No. 3 in the matter of depositing the required EMD amount.
20. The question, therefore, that arises is what is the legal effect of the mistake so committed either unilaterally by respondent No. 3 or bilaterally by him as well as the officers in the Department. Sections 20 to 22 of the Indian Contract Act deal with this aspect. Section 20 lays down that where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. But then immediately it is clarified that an erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matter of fact. Section 21 lays down, further, that a contract is not voidable because it was caused by a mistake as to any law in force in India; but a mistake as to a law not in force in India has the same effect as a mistake to fact. We are not concerned in this case with the provisions contained in section 21. What is important for us to know is the text of section 22 of the Indian Contract Act. It says that a contract is not voidable merely because it was caused by one of the parties to it being a mistake as to a matter of fact. All this is said in the context of completed contracts. There is no reason why similar principles of law relating to mistake cannot be applied to the offers made in reply to an invitation to make offers. If the parties are placed in a situation on account of some mistake off act which can be rectified by mutual agreement or by mutual consent, the whole contract need not be discarded as ineffective or void contract. The law requires that a reasonable view should be taken in such matters so as to ensure that the object of the contract is properly served. In the present case, this is exactly what has been done by the authorities in question. Since it was realised that the EMD amount was less, the more essential term, which was in connection with obtaining security for performance was got complied with and a security equivalent to 10% of the value of the contract was accepted from respondent No. 3. Thus, whatever little wrong was done initially on account of the mistake committed by respondent No. 3 was got rectified.
21. There should be one other view point from which the facts could be looked at. It is not always that time is the essence of a contract of a proposed contract. In cases where time is not such an essence, and in the present case we are of the view that time prescribed for depositing the EMD was not the essence of the contract to be arrived at, no substantial wrong was done when the authorities got the term fulfilled at a date subsequent to the date that was prescribed. In the present case, it is to be noted, it was not that the respondent No. 3 had not made a deposit at all. He made a deposit of an amount which probably came to a little above 2% of the total value of the contract, instead of making the deposit of 21/2%. Therefore, genuineness of the tender presented of respondent No. 3 need not have been doubted merely because he had deposited a little short amount.
22. Coming then, to the rulings which were relied upon before us in Sri N.O. Shetty v. Karnataka State Road Transport Corporation, , it was found that the non-compliance was with a General standing order dated 19-12-1989, which required that the tender offered should comply with certain conditions. This point was under consideration and it was held that that was a material contravention. Such was not the case in M/s. Varsha Book Stall v. State of Goa in W.P. No. 91 of 1994 decided by this Court on 16-3-1994. In M/s. B. D. Yadav v. Administrator of the City of Nagpur the application of Bye-law was waived on the ground that the deficiency was not relating to essential part of the work. It was, indeed, this consideration on which the Karnataka ruling has distinguished B.D. Yadavs's case from the case which the Karnataka High Court decided. We have already referred to the decision of the Supreme Court in Poddar Steel's case.
23. Thus considering the case from all perspectives, we do not think that in the present case, our interference with the acceptance of tender of respondent No. 3 respondents No. 1 and 2 is called for
24. The writ petition must therefore be dismissed and is accordingly dismissed.