Madhya Pradesh High Court
Mukesh And Co. Tobacco Products (P.) ... vs Madhya Pradesh Rajya Laghu Vanopaj ... on 17 October, 1989
Equivalent citations: 1990(0)MPLJ694
ORDER B.C. Varma, J.
1. This State of Madhya Pradesh is the principal grower of tendu leaves in the country. Sixty percent of the total produce of tendu leaves in the country is from this State. By enacting the Tendu Paita (Vyapar Evam Viniyaman) Adhiniyam, 1964, the State acquired monopoly in respect of sale of tendu leaves. Sections 5 and 12 of the Adhiniyam empower the State Government to dispose of tendu leaves in such manner as may be deemed fit. That Adhiniyam contains provision for appointment of purchasers of tendu leaves. In the year 1984, a Government controlled co-operative society, named as M. P. Rajya Laghu Vanopaj (Vyapar Evam Vikas) Sahakari Sangh, was appointed as the agent for disposal of tendu leaves grown in the State. The remaining tendu leaves were to be disposed of by the State Government. Tendu leaves were being disposed of by inviting tenders. The Government claims that with a view to bring about better working conditions for the labourers engaged in collection of tendu leaves and to eliminate middlemen in the trade as also to improve the economic conditions of persons belonging to weaker section of the society engaged in the trade, it was decided to collect the tendu leaves through co-operative societies. These co-operative societies were to have as members persons belonging to the above categories, i.e. labourers, members of scheduled castes and scheduled tribes and weaker section of the society engaged in collection and trade of tendu leaves. Accordingly, for the season 1989 number of such co-operative societies were formed. Tendu leaves collected by one of such societies were allotted one lot number and it is alleged that in all 44 lacs of standard bags of tendu leaves were collected by such societies comprised in 1937 lots. For sale of these tendu leaves stored in different godowns, tender notice was issued on 27-6-1989. According to clause 6 of Tender Notice (notice inviting tender), one person was to submit only one tender for one or several lots. He was to disclose his purchasing capacity, besides mentioning separately for each lot and in order of priority, the amount of his offer per standard bag excluding all taxes, cess or any other expenses. The tender was to be submitted in the form annexed with the tender notice. Tenders could be accepted only from the persons or parties who got registered themselves as manufacturers of bidis or exporters of Tendu leaves for the year 1989, as required under M. P. Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964 and M. P. Tendu Patta (Vyapar Viniyaman) Niyamavali, 1966. At the same time, tender submitted by a person or party, who owes dues to the Forest Department/Federation or who is a minor or who is an insolvent or who has been blacklisted, were to be treated as invalid. According to clause. 14 of the tender notice, every tender shall be accompanied by Earnest Money deposit which shall be a sum equal to or more than an amount but in no case less than 20 percent of the purchasing capacity as mentioned by the tenderer in the tender-form. Out of this, the tenderer should produce with the tender a minimum of 5 percent of the purchasing capacity in form vi demand draft/Bank draft on any scheduled bank, payable at Bhopal in favour of the Managing Director of Federation, and the balance 15 percent in the form of Bank guarantee, valid upto 30th April, 1990 in favour of Conservator of Forests and Ex-officio General Manager of Federation, where tender has to be submitted. Clauses 20, 21 and 22 of the Tender Notice, which are relevant for the purpose of the question raised in this petition, read as follows:
"20. The Managing Director of Federation may accept or reject the offer of all or any lot from the lots mentioned in the tender, without assigning any reason. Earnest Money deposit shall, in case of an unsuccessful tenderer, shall be refunded to him subject to condition of this tender notice and in case of a successful tenderer, it shall be adjusted towards payment of security deposit and advance sale price as required by the condition 25(i).
21. The offer of any lot/lots mentioned in the tender by tenderer shall be considered for acceptance or otherwise upto the amount of purchasing capacity of the tenderer. Decision in this regard taken by the Managing Director of the federation shall be final and binding on the tenderer.
22. If for a particular lot, same amount is offered by more than one tenderer, the decision for that lot shall be taken on the basis of priority of the offers of tenderer at higher order. If the amount of offer as well as the order of priority of two or more tenderers are the same, the consideration for allotment of lot shall be done, by drawing lots, on the place, date and time fixed by Managing Director of Federation in presence of the concerned tenderers, who wish to be present."
2. Pursuant to the notice inviting tender, number of persons registered themselves as manufacturers or exporters of Bidi leaves including the petitioner submitted tenders. All these tenders were opened on 22-7-1989. All the tenders so submitted were scrutinized. Tenders found invalid were rejected and thus eliminated at that stage only. The tenders found valid alone were taken into consideration for sale of the lots to such tenderers.
3. The' averments made in the return disclose the manner of consideration of those valid tenders. To each of the valid tenderers a Code number was assigned after arranging then) in a serial order. Then with the help of the computer, a list was prepared showing lot number, name of the society, quantity in standard bags, price offered per standard bag, price of the entire lot, name of tenderer with his priority and code number. Such a list is annexed as Annexure R-2. It will appear from this Annexure R-2 that with this process, in respect of each lot number, the price offered by a particular tenderer along with his priority was ascertained. Then further exercise was done with the help of the computer to prepare a list in respect of each tenderer, his purchasing capacity, the number of lots for which he made the offer/tender, his priority in respect of each lot and the rate offered per standard bag and the total value of the lot at that rate. The result so obtained giving the aforesaid informations are collected as Annexure R-3. Thus the respondents were able to find out highest offerer for each lot taken into account of the tenders submitted, Each lot was then allocated for sale to the tenderer whose offer was found to be highest subject to his purchasing capacity keeping in view the order of the priority given in his tender. The offers continued to be so considered in order of priority unless his purchasing capacity exhausted. After the purchasing capacity stood exhausted, further offers made by that particular tenderer were then excluded from consideration. After lots were allotted to the higher offerers but the purchasing capacity still survived to some extent, then the case of each such tenderer was considered for second highest offer in case the purchasing capacity of those offering highest bid had not exhausted. The process thus went on. The respondents claim that by this process, the highest offer for a given lot was the prime consideration and the purchasing capacity and the priority shown by the tenderer played their own parts at different stages.
4. Petitioner's contention, however, is that in this process, priorities have not been given the due weightage. The result is that despite their being a higher offer for a given lot, lower offers have been accepted and the tenderers, like the petitioner, have been deprived of a given lot for which they offered higher rate and a higher priority. According to them, the result first obtained was revised under the influence of some big Bidi magnates in Karnataka and Manikpur and also from some parts of this State thereby causing a loss of about Rs. 20 crores to the State. The petitioner illustrates this submission with respect to lot No. 1763 of Bahmni. His allegation is that when offers for this lot were considered, the petitioner's offer could not be accepted and his purchasing capacity remained intact. Petitioner's offer for this lot was for Rs. 2071,715.80 paise. This has been allotted to respondent Rajendra Kumar Puranchand Jain for Rs. 19,37,315.46 paise i.e. at a lower price. Petitioner thus, submits that the respondents have acted arbitrarily in choosing a purchaser for a given lot ignoring completely the principles and the guidelines exhibited in the notice inviting tenders.
5. We have with as M. Ps. Nos. 4108, 4109, 4110, 4171, 4185 and 4186 all of 1989. In these petitions also, the different petitioners who are traders in Bidi leaves and also made offers for purchasing different lots with their own priorities, make similar complaints and levy a like criticism in respect of lots allotted to various respondents in those cases, although according to them, prices offered by them for those lots and the priorities given were higher.
6. From the notice of tender and respective contentions of the parties, it appears that while considering office for a given lot, two important factors to be taken into account are: (i) purchasing capacity of a tenderer, and (ii) the priorities of the offers of tenderer at higher offer. This has also been emphasised by a Division Bench of this Court in Haji Abdul Sattar v. M.P. State Minor Forest Produce (Trading and Development Co-operative Marketing Federation) Ltd., Bhopal, 1988 MPIJ 810, AIR 1989 MP 7. With a view to justify that these two considerations had their full play in the matter of accepting offers, the respondents have fixed Annexures R-2 and R-3. As an illustration, they have cited a case of tender by one Prabhudas Kishoredas who was assigned Code No. 16023. This tenderer has shown his purchasing capacity Rs. 13.75 crores and had offered to purchase 90 lots. His offer was found highest in respect of 440 lots (Annexure R-3) but he could be allotted only 131 lots keeping in view his priorities. In the first offer in which he is the highest, his first priority was 005 in respect of lot No. 862. The last lot of his highest offer was at priority 606 and was allotted 131 lots although his last higher offer was upto 975. Thus, priorities beyond 606 could not be taken into account and though his offers were higher in respect of other priorities, i.e., priorities between 606 and 905, he could not be allotted lots beyond 606 because by the time his priority 606 was honoured, his purchasing capacity had reduced. Thus, it will be seen from this illustration that although in respect of about more than 50 lots the offers made by Prabhudas Kishoredas were higher, but because his purchasing capacity by that time had reduced, he could not be allotted those lots. Necessarily, therefore, those lots had to be allotted to other tenderers who had quoted lower price than Prabhudas Kishoredas in respect of those lots but then they had the necessary purchasing capacity to purchase those lots. It, therefore, cannot be said that while denying to Prabhudas Kishoredas certain lots in respect of which his offers were higher than those to whom they were allotted, any illegality has been committed. This is so because the lots had to be allotted because while considering any offer in respect of a lot, the purchasing capacity and the priority both had to be given due weight. It, therefore, cannot be inferred that merely because a lower offer has been accepted in respect of a given lot, the respondent has committed any illegality because it may as well be that by the time the tenderer's priority in respect of a given lot comes for consideration, his purchasing capacity may either be exhausted or reduced so as to disentitle him to purchase that particular lot. In this process, no fault could be pointed out by the learned counsel for the petitioners. True it is that while working out the aforesaid method in selecting purchasers in respect of different lots, mistakes may be committed and it was not denied by the respondents that some mistakes were committed in process of selecting purchasers and in accepting their offers. It was, however, submitted that those mistakes have been corrected. No better method of ascertaining the best purchaser for a given lot was suggested by either of the petitioners. That being so, the respondents did well to apply the process mentioned above in accepting the offers of the various tenderers in respect of different lots. The criticism levelled by the learned counsel for the petitioners that due weight has not been given to the prorities in selecting purchasers in respect of different lots of Bidi leaves is not sound and must be rejected.
7. Shri V. S. Dabir, learned counsel for the petitioners, also submitted that by acceptance of lower offers, the State has suffered loss of revenue of about Rs. 20 crores. This loss, according to the learned counsel, is the result of favouring certain Bidi magnates whose offers at a lower rates have been accepted and priorities have not been given due consideration. He also submitted that the authorities concerned have not acted fairly in the entire action in selecting the purchasers and their action gives an impression of bias, favouritism or nepotism. It is true as laid down in Haji T.M. Hassan v. Kerala Financial Corporation, AIR 1988 SC 157, that the State and the Public Authorities should undoubtedly act fairly. Their action should be legitimate and their dealings should be above board. Their transactions should be without aversion or affection and nothing should be suggestive of discrimination. The action should be free from bias, favouritism or nepotism. It was emphasised that ordinarily these factors would be absent if the matter is brought to public auction or sale by tenders. At the same time, it is also true that any action of the State or the Public Authorities should not adversely affect the revenue. We have, however, demonstrated above that in applying the method in selecting the purchasers the respondents have given due consideration to the norms set in and to the relevant clauses in the notice of tenders. We have also demonstrated that the efforts have been made to select the best purchasers. The method applied is quite reasonable and just- It is free from bias, favouritism or nepotism. There appears to be no discrimination either. To err is human and, therefore, there may be mistakes in the application of the above method in any given case. Such mistakes can well be corrected and have actually been corrected, as stated in the petition itself. But merely for this the entire action in selecting the purchasers for various lots cannot be annulled. We also find that the method has secured the best price for a given lot. We are, therefore, not satisfied that the respondents have acted unfairly or unreasonably in selecting the purchasers out of the number of tenderers vis-a-vis a given lot. The petition must, therefore, be dismissed.
8. Before parting, we, however, may make it clear that this decision would not bar or prevent any tenderer from questioning the non-acceptance of his tender in respect of any given lot. If any one so does, his case shall be considered on its own merits.
9. The petitions are dismissed but without any order as to costs.