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Gauhati High Court · body

1961 DIGILAW 51 (GAU)

Nameirakpam Pishak Singh v. Forest Officer, Manipur Forest, Department

1961-08-11

T.N.R.TIRUMALPAD

body1961
ORDER The petitioner applies for a writ of mandamus or other appropriate writ against respondents 1 to 3. 2. On 16-1-1960, the Forest Officer of the Manipur Administration called for tenders from contractors, by his notice Annexure-I, for extraction and for supply of timber from Block MXVI of the Government forest to be submitted to the Chief Forest Officer on or before 23-1-1960. The selected contractor had to cut the trees marked by the Forest Department and then reduce them into round and square logs and to supply them to the Forest Department at certain fixed points between 9th and 19th milestones on the I.T. Road. The tenderers had to mention in the tender the number of buffaloes they had in their possession, their working experience, financial background etc. Clause 5 of the notice stated that the Administration reserved the right to accept any tender without assigning any reasons therefor. Clause 11 provided that the Administration may make insertion of fresh clauses in the tender notice from time to time which may not however be to the disadvantage to the contractor. We are not concerned with the other clauses in the notice. On 22-1-1960 an amendment was made to the notice mentioning the species of timbers to be supplied, vide - Annexure-A/2. Various persons including the petitioner submitted tenders. The petitioners tender for both round logs and square logs was the lowest, as will be seen from Annexure-A/3. 3. It is stated now by the second respondent the Chief Forest Officer, who has filed the counter statement on behalf of respondents 1 to 3 in paragraph 2 that it was ascertained that most of the tenderers did not quote the names of species of timbers correctly and that the items for which the tenderers quoted rates varied from one to another and were not comparable and so the Manipur Administration considered it necessary to issue a fresh tender notice. A comparison of Annexure-A/2 which mentions 5 kinds of timber with the list of tenders submitted as seen from Annexure-A/3 would show that this is statement of the first respondent is a fact. It will be seen from Annexure-A/3 that the petitioner himself quoted rates for Uningthou, 2nd logs Ucham and 3rd logs Ucham, but not for 4 other different kinds of timber - Leihao, Tolhao, Tal and Sham Kuhi. It will be seen from Annexure-A/3 that the petitioner himself quoted rates for Uningthou, 2nd logs Ucham and 3rd logs Ucham, but not for 4 other different kinds of timber - Leihao, Tolhao, Tal and Sham Kuhi. The second respondent has further stated in the counter statement that the public Works Department required seven species of timber of which two species - Pareng and Tairen had been omitted to be included in the first tender and further that the P.W.D. wanted that a clause should be inserted in the tender notice to exclude firms, companies, and Co-operative Societies and persons in joint names making tenders. Hence, without accepting the tenders in respect of the first notice, the Administration directed the Chief Forest Officer to issue a fresh tender notice. Annexure-A/4 is the said letter of the Administration which however does not mention the reasons mentioned in the counter statement of the second respondent for issuing the fresh notice. 4. Any way, a fresh tender notice Annexure-A/5 was issued on 29-1-1960, incorporating the changes mentioned by the second respondent and calling for quotations for 7 species of timber in round logs and square logs. In the re-tender the petitioner as well as the 4th respondent and some others submitted tenders. It was seen that the average rate quoted by the 4th respondent was Rupee 1.46 nP. for round logs and Rupee 1.96 nP. for square logs, while the petitioners quotation was Rupee 1.50 nP. for round logs and Rupee 1.62 nP. for square logs. The tenders of the other tenderers quoted higher rates. The Manipur Administration directed the Chief Forest Officer to accept the lowest rates quoted by the 4th respondent for round logs on the ground that the Principal Engineering Officer, P.W.D. required only round logs and the remaining tenders were not accepted, vide Annexures-A/6 and A/7. 5. Now the petitioners contentions in this writ petition are as follows: He would say that his was the lowest tender for both round and square logs to the first tender notice and that the Manipur Administration was bound to accept the said lowest tender. He would further say that Clause V of the tender notice stating that the Administration reserved the right to accept any tender without assigning any reason therefor was ultra vires and offended against Articles 14 and 19 of the Constitution of India and should be annulled. He would further say that Clause V of the tender notice stating that the Administration reserved the right to accept any tender without assigning any reason therefor was ultra vires and offended against Articles 14 and 19 of the Constitution of India and should be annulled. He pointed out that according to the standard of usage and practice in the analogous P.W.D. Codes and Rules, the lowest tender had to be accepted and there was no reason why his lowest tender in answer to the first tender notice should not have been accepted. He would even say that the conduct of Respondents 1 to 3 showed a malicious motive to reject the tender of the petitioner and that the rejection was mala fide. He contended that the cancellation of a tender notice can be made only in exceptional circumstances and that none of the exceptional circumstances existed in the present case. He pointed out that the addition of names of species of logs in the second tender notice was really unnecessary, in as much as the charges for supply of various species of logs would be the same as the timber belonged to the Administration and for this purpose it was not necessary to issue a second tender notice. His next contention was that the addition of the new clause in the second tender notice that only an individual person and not persons jointly nor firms, Companies, or Co-operative Societies should offer tender was ultra vires the Constitution in as much as it prohibited the legal exercise of fundamental rights guaranteed under Article 19(g) of the Constitution and amounted to discrimination against such persons, firms, Companies and Co-operative Societies. Accordingly, the addition of this new clause was done with a malicious and mala fide motive in order to give the contract to respondent 4 and to discriminate against the petitioner. 6. The petitioner has further stated that in anticipation of his lowest tender being accepted, he had incurred expenditure and started construction of dragging paths in the forest reserve area at a cost of about rupees one thousand. 7. The petitioner would further say that in respect of the second tender notice, if the average rate for round and square logs was taken together, his was the, lowest tender even in the second tender notice. 7. The petitioner would further say that in respect of the second tender notice, if the average rate for round and square logs was taken together, his was the, lowest tender even in the second tender notice. According to him, the rates for round and square logs, as given in the tender notice, were so interlinked and interdependent upon one another, that the two rates should not be separately accepted, as the contractors give rates in the aggregate expecting to make a profit in one even if there was a loss in the other and that therefore the acceptance of the offered rates for round logs alone caused prejudice and disadvantage. He further stated that in any case, his was the lowest tender for square logs and should have been accepted by the Administration. He next pointed out that when the tender was for square and round logs together and the acceptance was for round logs only, the change in the acceptance by the Government differing from the original tender amounted to a new invitation for offer and must be treated as a fresh tender notice for round logs alone and that opportunity should have been given to all the contractors to give their rates for supply of round logs alone and the acceptance of the offer from the 4th respondent amounted to a private contract with the 4th respondent without calling for tenders, which was not in accordance with the principle laid down in the Compilation of General Financial Rules of the Central Government for contracts. Thus, he would say that the acceptance of tender of the 4th respondent for supply of round logs alone was an arbitrary exercise of official discretion without having regard to the standard of usage and practice and amounted to discrimination against the petitioner and offended against Article 14 of the Constitution. 8. For all these reasons, the petitioner prays that this Court should issue a writ of mandamus directing respondents 1 to 3 to accept the tender of the petitioner in respect of the first tender dated 16th January, 1960 and declaring the cancellation of the said tender notice by the second tender notice dated 29th January, 1960, as ultra vires the Constitution and not binding on the petitioner. In case the cancellation of the firs tender notice and re-issue of the second tender was held legal, the petitioner prays that his tender in respect of the second tender notice being the lowest on the average rate of tender should be accepted in toto. If that also cannot be done, he prays that a re-tender notice in respect of the supply of round logs alone for the full amount of supply should be made. Lastly, he prays that clause 5 of the tender notice reserving the right in the Administration for accepting any tender must be declared ultra vires the Constitution. 9. Respondents 1 to 3 resist the application. I have already referred to para 2 of their counter statement in which they point out why it became necessary to issue a fresh tender notice cancelling the first tender notice. They say that clause 5 of the tender notice reserving the right in the Administration to accept any tender without assigning any reason therefor was quite valid and there was no rule or liability which compelled the Administration to accept the lowest tender. They said that the petitioner and no justification or right for spending money before his tender was accepted. They denied that their act was mala fide or without jurisdiction. They stated that different species of timber had different texture hardness and had different market prices and there was difference in charges for felling, loading, converting and dragging of logs and the prices varied from species to species and the charges for all the species cannot be the same. They also said that the charges for converting into round logs and square logs varied. They denied that there was any discrimination against the petitioner. The petitioner, by submitting to the second tender notice had waived the right to question the validity or otherwise of the issue of the second tender notice and is estoppted form challenging the same. They say that they accepted the lowest quotation for round togs alone as the Public Works Department required only round logs for their construction work in order to avoid the waste in squaring. They questioned the locus standi of the petitioner to challenge the constitutionality or illegality of clause 13 of the second tender dated 29-1-1960. They denied the mala fides end malicious motive attributed to them. They questioned the locus standi of the petitioner to challenge the constitutionality or illegality of clause 13 of the second tender dated 29-1-1960. They denied the mala fides end malicious motive attributed to them. Lastly, they denied the right of the petitioner to get any remedy in such a writ application. 10. Before I start to discuss the various contentions we have to be clear as to what a tender notice and the submission of rates in response to such a notice would amount to, in the eye of law. Do the calling for tenders and the quotation of rates by contractors in response to such calling for tenders vest any rights in the contractors or any of them who have quoted rates? Unless the petitioner can show that by his quotation of rates a legal right got vested in him, he cannot raise the various objections set out in the present writ. Nor can he be given any relief in the writ. 11. The Manipur Administration had timber in its forest. It wanted that this timber should be extracted by contractors and supplied in round and square logs at certain places near the road. In order to select the contractor or contractor do that work it called for quotations for both round and square logs. The selection of a contractor or contractors will depend on various factors like the rates quoted, financial stability, working experience, and the availability of trucks to carry or the animals to drag the timber from the forest to the road side. The tender notices in this case, required the tenderers to mention all these details in the tenders. On receipt of the tenders, all the above factors have to be taken into account before selecting the contractor or contractors. 12. Thus, a tender notice meant only calling for quotations and for other details from the contractors to help in the selection of the contractor or contractors to do the work. In other words, it meant an invitation expended to the contractors for making offers. Thus, a tender notice, does not amount to an offer or a proposal. It follows that the quotations of rates by the contractors will not amount to an acceptance of the offer or proposal thereby creating any promise or agreement. Actually, the quotations made by the contractors in response to the tender notice amounts to offers or proposals. Thus, a tender notice, does not amount to an offer or a proposal. It follows that the quotations of rates by the contractors will not amount to an acceptance of the offer or proposal thereby creating any promise or agreement. Actually, the quotations made by the contractors in response to the tender notice amounts to offers or proposals. It is by the acceptance of any of those offers or proposals by the person calling for tenders that it becomes a promise or an agreement. Thus, the mere fact that the petitioner made a certain quotation in response to the tender notice, even granting that it was the lowest quotation, will not, in any manner, create an obligation on the Manipur Administration which issued the tender notice. Even, after receipt of the quotations, there is no duty cast on the Manipur Administration to accept any of the tenders or quotations made in response to the tender notice. 13. In our present case, tenders were called for supply of round logs and square logs. That did not mean that the Manipur Administration would be forced to accept any of the tenders for either or for both of them. A tender notice merely meant that the Manipur Administration wanted to know the terms at which the tenderers would be able to supply and the status and capacity of each tenderer. If it is not satisfied with the terms or the status or capacity, or for other reasons as mentioned in para 2 of the respondents counter, nothing can prevent it from cancelling the tender notice without accepting any of the tenders submitted and from calling for fresh tenders. I cannot accept the contention in para 8(e) of the petition that the cancellation of a tender notice can be done only in exceptional circumstances without causing any prejudice to the parties concerned. The petitioner has himself accepted in para 8(e) that when the rates quoted are unreasonable or when there is any material defect in the tender notice or when any specification, which may effect a change in the work, has to be added or taken out or when all the tenders submitted become disqualified because of defect in quoting the rates, the tender, notice can be cancelled. In our present case, the petitioner did not himself give the quotations for the 5 species of timber for which quotations had been called for and other tenderers had also committed similar mistakes in making the quotations. There was nothing wrong therefore on the part of the Manipur Administration in having cancelled the first tender notice Annexure-A/1 and in having issued the second tender notice Annexure-A/5. 14. Further, I fail to see how the petitioner could question the cancellation of the first tender notice. He has himself accepted the cancellation and when the second tender notice was issued, he submitted fresh quotations without making any protest, thereby acquiescing in what the Administration did. He cannot therefore be heard to say, when his second quotation was not accepted, that the cancellation of the first tender notice and the non-acceptance of his first quotation were wrong and done with a mala fide motive. 15. So, I shall now deal with the second tender notice in the present petition, as I have held that the first tender notice was validly cancelled and that the petitioner has himself acquiesced in the said cancellation. In the second tender notice Annexure-A/5, quotations were called for the supply of round and square logs of 7 species. A new clause was added that only individual person and not persons jointly or firms or companies or Co-operative Societies need offer tenders. This new clause was attacked by the petitioner as, amounting to discrimination and thus offending against the principle of the Central Government to encourage Co-operative Societies. It is however unnecessary to go into this question at all, as the petitioner has not in any way been shut out from making a tender, as his tender was that of an individual and no discrimination has been made as far as he was concerned. 16. The petitioners main contention regarding Annexure-A/5 is that his quotation for the supply of square logs of the 7 species was the lowest and further that if the average rate was taken for square and round logs together his quotation was again the lowest and that therefore the Manipur Administration was bound to accept his tender and it was wrong on the part of the Administration to have accepted the lowest tender of the 4th respondent for round logs alone. I have already pointed out that in the case of a tender notice, there is no obligation on the part of the person issuing the tender notice to accept any of the tenders or even the lowest tender, it may be that after the tenders were called for and seeing the rates and the status of the contractors who have given tenders, he decides not to enter into any contract and thereby withdraws the tender notice. Unless therefore the petitioner can show that by merely calling for tenders, a person is saddled with a certain obligation and the persons who submitted quotations became vested with any right, he cannot seek to enforce any obligation or right by means of a writ application. The contention of the petitioner however was that a public body like the Government is different in this respect from other persons who call for tenders. I do not think that the obligations or rights arising out of the calling foe tenders are different in the case of a public body like the Government from those of private parties. After all, the question is whether an agreement has been created within the meaning of the Indian Contract Act. Such an agreement can be created, whether it is the Government or a private party, only by the acceptance of the quotations made by a tenderer. Until such acceptance there is no concluded contract and there is no obligation or right in favour of the tenderer. 17. It was however pointed out for the petitioner that in the case of a Government, it was bound by rules in such matters and that it is for the Court to see whether these rules have been observed by the Government and if it is found that such rules had been infringed to the detriment of any party, the Court can certainly interfere. It was admitted by both parties, that no rules had been framed by the Manipur Administration under Section 75 of the Indian Forest Act, regarding the contracts to be entered, into in respect of the supply of timber and other matters. The petitioner would, however, say that in the absence of any such rules, the Manipur Administration being in a Union Territory were bound by the rules regarding contracts in the Compilation of the General Financial Rules - Volume I of the Central Government. The petitioner would, however, say that in the absence of any such rules, the Manipur Administration being in a Union Territory were bound by the rules regarding contracts in the Compilation of the General Financial Rules - Volume I of the Central Government. My attention was drawn to Rules 18 and 19 Chapter II of the General Financial Rules of the Central Government. In particular, my attention was drawn to R.19(iv) that whenever practicable and advantageous, contracts should be placed only after tenders have been openly invited and in cases where the lowest tender is not accepted, reasons should be recorded. From this rule it was pointed out that Clause 5 of Annexure-A/5 by which the Administration reserved the right to accept any tender without assigning any reason therefor was in conflict with Rule 19(vi) and it was stated that the said clause 5 was invalid. 18. We need not go into this aspect of the matter in detail in the present case as the Manipur Administration has, in fact, accepted the lowest tender for the round logs given by the 4th respondent. There is also nothing in Rule 19 of the Central Government Financial Rules which would warrant the interpretation of the petitioner. I have already pointed out that a tender notice did not mean any contract to accept any of the tenders and that it is only an invitation to make quotations. No person is forced to make any quotation. If quotations are made by any persons, the discretion is vested in the Government Department concerned to accept or not to accept any of them. Rule 19(vii) of the Financial Rules provides that in selecting the tender to be accepted, the financial status of the individuals tendering must be taken into account in addition to all other relevant factors. This has been provided in Cl.4 of Annexure-A/5 by stating that the contractor should mention in the tender the number of buffaloes which he has in his possession, his working experience, financial background, etc. It was admitted by the petitioner that the Manipur Administration made enquiries through a S.D.C., regarding the financial status of the various tenderers. Thus, it is clear that there can be no such rule that the lowest quotation should invariably be accepted. Other things will also have to be taken into account. It was admitted by the petitioner that the Manipur Administration made enquiries through a S.D.C., regarding the financial status of the various tenderers. Thus, it is clear that there can be no such rule that the lowest quotation should invariably be accepted. Other things will also have to be taken into account. That is the reason why Rule 19(vi) has provided that where the lowest tender is not accepted, the reasons should be recorded. The Manipur Administration would certainly have to record its reasons in the light of Rule 19(vi) in cases where they do not accept the lowest tender. If without giving valid reasons, they fail to accept the lowest tender, and accept some other tender, it will be liable to scrutiny by the Court in a petition like the present. But that question does not arise in the present case as the Manipur Administration, as I said, has accepted the lowest tender for round logs made by the 4th respondent. I may mention here that Rule 19(vi) does not say that the reason for not accepting the lowest tender should be communicated to the lowest tenderer. It only provides for the reasons to be recorded. Such recording of the reasons is intended to prevent arbitrary acceptance of a tender and to make it available for the purpose of scrutiny by the Controlling Authority and by Courts when the matter comes before Court either in a Writ application in a suit. I take it that by Clause 5 of Annexure-A/5, the Administration in reserving the right to accept any tender without assigning any reason therefor meant only that, no reasons need be assigned as far as the tenderer is concerned, but that reasons will certainly be recorded for scrutiny, in case the lowest tender is not accepted. Clause 5 cannot be used for arbitrary action, in violation of Rule 19(vi) of, the Financial Rules. 19. But, the objection of the petitioner is not that the lowest tender has not been accepted in the case of round logs, but that the lowest tender has been accepted only in respect of round logs but not of square logs. The petitioners tender was the lowest for square logs. As I have pointed out, there is no rule that any tender should be accepted at all, even if it is the lowest tender. The petitioners tender was the lowest for square logs. As I have pointed out, there is no rule that any tender should be accepted at all, even if it is the lowest tender. The Department concerned who called for tenders may decide after seeing the quotations not to accept any tender. In the counter statement of the respondent it has been stated that the Public Works Department, for whose building work the tenders were called for, decided that there would be unnecessary wastage if square logs were supplied and so it was decided that the quotation for round logs alone would be accepted. It will be seen that the quotations for supply of square logs were invariably more than the quotations for round logs. Thus, in the face of the wastage involved in the case of square logs, one cannot say that the Administration was wrong in not accepting the quotations for square logs. 20. I am not very much impressed with the contention of the petitioner that when tenders were called for the supply of round logs and square logs, the acceptance can be only of the quotations for both kinds of logs and not for one kind alone. There is nothing in the tender notice Annexure-A/5 which restricted the discretion of the Forest Department to accept the quotations for one kind atone. Clause 1(c) states that separate rates will have to be quoted for round and square logs. This will not in any way, prevent the Administration after seeing the quotations from deciding whether they will accept the quotations for round logs or square logs or for round logs and square logs. I cannot accept the petitioners contention that here is anything in the tender notice which would show that the quotations for round logs and square logs are so interdependent that, the rates given for both alone could be accepted or rejected. Nor am I impressed with his argument that the average for both the quotations should be taken together and that the petitioners average quotations being the lowest should have been accepted. 21. Nor am I impressed with his argument that the average for both the quotations should be taken together and that the petitioners average quotations being the lowest should have been accepted. 21. Nor am I impressed with the petitioners argument that the acceptance of the quotation of the 4th respondent for round logs would amount to a counter offer by the Administration and that this offer should have been made to all the contractors again and fresh quotations should have been called for round logs alone before accepting the 4th respondents lowest quotation and that in accepting the said quotation the Administration was departing from the method of calling for tenders and entering into a private contract with the 4th respondent. In support of this contention, two decisions were cited-Nihal Chand v. Amar Nath, AIR 1926 Lah 645, and Moolji Jaitha and Co. v. Seth Kirodimal, AIR 1961 Ker 21 . I have perused the said decisions and I find that they do not apply to the present case. Both those decisions deal with cases where an offer was made and the offeree, without unreservedly assenting to the exact terms of the offer to bring about a concluded contract made a counter offer and the question to be decided was the effect of such a counter offer. Both those decisions held that in the case of such a counter offer unless this was accepted by the original offerer no concluded contract would result. But in our present case, the tender notice being only an invitation for offers, offers or proposals will arise only when quotations were made in response to the tender notice. Any of such offers could be accepted by the person who issued the tender notice. In our present case, the Manipur Administration accepted the 4th respondents offer in respect of round logs. They did not thereby make any counter offer. The quotations for round logs and the quotations for square logs were quite distinct and separate. The quotations for either of them could be accepted without accepting the other. In fact, nothing prevented the Manipur Administration, if they so chose from accepting the quotations for round logs from one contractor and accepting the quotations for square logs from another contractor. The main grievance of the petitioner is that his lowest quotations for square logs was not accepted. In fact, nothing prevented the Manipur Administration, if they so chose from accepting the quotations for round logs from one contractor and accepting the quotations for square logs from another contractor. The main grievance of the petitioner is that his lowest quotations for square logs was not accepted. That very complaint amounted to saying that the quotations for round and square logs were distinct and separate and could be separately accepted. There is no question of any counter offer in accepting the quotations of 4th respondent for round logs. Nor can it be said that the said acceptance will amount to entering into a private contract with the 4th respondent. I fail to see any malicious or mala fide motive in accepting the lowest offer of the 4th respondent. Nor does any question of discrimination against the petitioner arise. 22. For the above reasons, I am not prepared to issue any writ of mandamus against the cancellation of the first tender notice Annexure-A/1 or for the acceptance of the second tender made by the petitioner to the second tender notice Annexure-A/5 or to direct that a re-tender notice for the supply of round togs alone should be made. Nor am I prepared to hold that Cl.5 of Annexure-A/5 is ultra vires the constitution. The writ application fails and it is accordingly dismissed, but under the circumstances without costs. Petition dismissed.