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1995 DIGILAW 291 (MAD)

Ms. Doss Associates v. Chairman, Tamil Nadu Electricity Board, Madras and Another

1995-03-10

S.M.ALI MOHAMED

body1995
Judgment :- By consent of both parties, the writ petition itself, is taken up for final disposal. The petitioner is a partnership firm. The partner of the firm in his affidavit, in support of the writ petition has stated that the firm is a registered contractor of Class-I with the respondent and the firm is eligible to take up all works from the respondents. The petitioner has been granted contracts for various works in the last ten years and the firm has performed the jobs to the entire satisfaction of respondents. He has further stated that the second respondent issued a tender notification is Tender No. SE/ TKEDC/ 16/ 94-95 inviting sealed tender from the registered contractors under Class-I and Class-II category with the respondents for the manufacture of PSC REC Poles, measuring 8 metres, numbering 4500 at Vaniankulam, Ambasamudram Taluk, Nellai Kattabomman District. The said tender notification was duly published in the Tamil daily newspaper 'Dins Thanthi' dated 26-12-1994. As per the said tender notification, tender document may be obtained from the second respondent from 5-1-95 up to 3.00 p.m. on 11-1-1995 on payment of Rs. 30/- directly to the second respondent. Duly filled in tender documents along with the tender deposit of Rs.6, 200/- should be submitted to the 2nd respondent up to 2.00 p.m. on 12-1-1995. The petitioner further states that the firm is eligible to participate in the above tender and. had approached the second respondent on 5-1-1995 itself for obtaining the tender document in respect of the work called for in the above tender notification. It is alleged that the second respondent stated that he would issue the tender document only on 10-1-1995 and on 10-1-1995 the petitioner requested second respondent to issue a tender document so as to enable the petitioner to submit his tender for the work called for in the above tender notification. But the second respondent refused to give tender document to the petitioner by categorically stating that he would issue the tender document only to those recommended by the higher authorities. Immediately on the same day, i.e., on 10-1-1995, the petitioner sent a registered letter and a telegram to the second respondent informing him about the refusal of tender documents to the petitioner and requesting him not to conduct tenders without giving tender document to the petitioner. Immediately on the same day, i.e., on 10-1-1995, the petitioner sent a registered letter and a telegram to the second respondent informing him about the refusal of tender documents to the petitioner and requesting him not to conduct tenders without giving tender document to the petitioner. But the second respondent has not responded to the request of the petitioner for the reason best known to him. The petitioner has further submitted, that the action of the second respondent is arbitrary and illegal and the petitioner, had been deprived of the opportunity of participating in the above tender. The petitioner further submits that the refusal to issue tender documents to the petitioner by the second respondent on the ground that the tender documents would be issued only to those recommended by the higher authorities, is illegal and unsustainable in law. Aggrieved by the same, the petitioner has filed the writ petition for issue of a writ of mandamus directing the respondents not to proceed with the Tender No. SE/TKEDC/ 16/94-95 published in Tamil daily newspaper 'Thinathanthi' dated 26-12-1994 for a manufacture of 4500 PSC REC poles measuring 8 metres at Vaniankulam, Ambasamuthiram Taluk, Nellai Kattabomman District without giving opportunity to the petitioner to take part in the auction by giving tender document to the petitioner and receiving sealed tender from the petitioner. 2. A counter-affidavit has been filed by the second respondent. It is stated in the counter-affidavit that the petitioner was awarded contract for the past five years and he is well aware of the procedure in obtaining the tender forms. Further, two persons, viz., M/s. Kishen Constructions, Thillainagar, Trichy and one Elango Packiyaraj, Madurai participated in the tender. Out of jealousy, he came with a false case. Apart from this, the second respondent submits that 5-1-1995 was a holiday on account of World Tamil Conference held at Thanjavur and that the second respondent was not at all in the headquarter on 10-1-1995 and was on camp at Tenkasi and Kadayanallur. So the averment of the petitioner that he had met the second respondent on 5-1-1995 and on 10-1-1995 is deliberate falsehood and made only for the purpose of this case. It is further stated that the 2nd respondent issued tender notification in the press, in Tender Specification No. SE/T in Kattabomman Eleeyy Distn. Circle/ 16/94-95, inviting sealed tender for the manufacture of 8 Mt. It is further stated that the 2nd respondent issued tender notification in the press, in Tender Specification No. SE/T in Kattabomman Eleeyy Distn. Circle/ 16/94-95, inviting sealed tender for the manufacture of 8 Mt. PSC poles numbering 4500 at Vaniyankulam, Ambasamudram Taluk, Tirunelveli Kattabomman District. As per tender notification tender schedule forms may be obtained from the 2nd respondent from 5-1-1995 to 11-1-1995 up to 3.00 p.m. on payment of Rs.30/- directly to the second respondent. It was also notified that to send the tender set by post, an additional amount of Rs. 15/- per form is to be paid. The tender notification was duly published in newspaper, 'Daily Thanthi' dated 26-12-1994. Duly filled in tender documents along with tender deposit of Rs.6, 200/- should be submitted to second respondent up to 2.00 p.m. on 12-1-1995. The tender documents would be opened at 2.00 p.m. on 12-1-1995. It was further submitted denying the allegation contained in para 4 of the affidavit as follows : "The petitioner had not approached the second respondent on 5-1-1995 a holiday for obtaining the tender document for the above tender notification as stated in the affidavit. As such, the second respondent had not stated that he would issuer tender document only on 10-1-1995. The petitioner had not approached the second respondent on 10-1-1995 for issue of tender set and second respondent had not refused to issue the tender set. Instead, the petitioner sent Rs. 30/- by telegraphic money order on 11-1-1995 to .the second respondent being the cost of tender set. As per tender notification, to send the tender set by post an additional amount of Rs. 15/- has to be paid. But the, petitioner had not paid the additional amount by money order. As such, the money order was refused to be accepted. The last date for issue of tender set is 3.00 p.m. on 11-1-1995. The petitioner had not turned up for purchase of tender set till 3.00 p.m. on 11-1-1995. It is further stated that as the due date of issue of tender form and opening of tender are over, the petitioner cannot participate in the tender at present. Two registered contractors namely (1) M/s. Kishen Constructions, Thillainagar, Trichy and (2) Elango Packiyaraj, Madurai purchased the tender form within the prescribed date and submitted the tender on the due date and time (i.e. 2.00 p.m. on 12-1-1995). Two registered contractors namely (1) M/s. Kishen Constructions, Thillainagar, Trichy and (2) Elango Packiyaraj, Madurai purchased the tender form within the prescribed date and submitted the tender on the due date and time (i.e. 2.00 p.m. on 12-1-1995). The above tenders were opened on 12-1-1995 at 2.00 p.m. and is under process. It is further stated that in fact, the petitioner sent a sum of Rs. 30/- on 11-1-1995 through Telegram Money Order, which could not be accepted in view of the insufficient remittance of the amount. The petitioner should have sent a sum of Rs. 45/- as per tender notification and there is no violation in rules and principles. In fact the petitioner has not followed the instructions. The petitioner cannot accuse the board for his lapses". 3. A reply affidavit has been filed by the petitioner reiterating the averments contained in the affidavit of the petitioner. In paragraph 6 of the reply, the petitioner states that one Shanmugam, who is the assistant of the petitioner company's partner, sent Rs. 30/- to the second respondent by Telegraphic Money Order on 11-1-1995 and further he went to the office of the 2nd respondent personally and demanded tender document. The 2nd respondent, though admitted that Telegraphic Money Order was received within the time on 11-1-1995 itself, refused to issue tender document to the said Shanmugam. The stand taken by the 2nd respondent is that he did not issue the tender document because Rs. 45/- is payable if the tender schedule is to be sent by post and that only Rs. 30/- was sent through money order. The above stand taken by the second respondent is only an afterthought in view of the fact that the Assistant though sent the tender fee by T. M.O. he went to the second respondent's office on 11-1-1995 itself and demanded issue of tender schedule. At no time, request was made to send the tender forms through post. Even in his letter dated 10-1-1995, the petitioner had only requested the 2nd respondent to permit the petitioner to pay the tender fee of Rs. 30/-. The tender fee was sent by money order only because the 2nd respondent also his officials refused to receive the tender fee in person. 4. It is contended by Mr. Even in his letter dated 10-1-1995, the petitioner had only requested the 2nd respondent to permit the petitioner to pay the tender fee of Rs. 30/-. The tender fee was sent by money order only because the 2nd respondent also his officials refused to receive the tender fee in person. 4. It is contended by Mr. K. Alagiriswami, learned senior counsel that the refusal of the second respondent to issue tender documents to the petitioner to participate in the tender as notified in the Tamil daily, 'Thina Thanthi' dated 26-12-1994 for the manufacture of PSC REC poles, measuring 8 metres, numbering 4, 500 is arbitrary and violative of Art. 14 of the Constitution. The learned senior counsel further submitted that the first respondent, Tamil Nadu Electricity Board is an instrumentality of the State and in its dealing, it should act fairly. Once the Electricity Board has called for tenders in 'Thina Thanthi' for the supply of PEC REC poles, it should give equal opportunity to the petitioner, and others who are similarly placed and who are all qualified to participate in the tender by submitting their offer. Denial to issue tender documents to the petitioner and restricting the issue of tender documents to a few persons on the recommendation of higher authorities is arbitrary, illegal and unsustainable. Further, he submitted that the petitioner was made to run from pillar to post to obtain the tender documents, but the second respondent refused to issue the tender documents for one excuse or the other. In support of the above contentions the learned senior counsel, Mr. K. Alagiriswami, referred to the following rulings of the Supreme Court. 5.(i) In Ramana Dayaram Shetty v. International Airport Authority of India, 1979 AIR(SC) 1628, 1979 (2) LLJ 217 , 1981 (1) LLN 270, 1979 (3) SCC 489 , 1979 (3) SCR 1014 , 1042 SCC(p) 511), the Supreme Court observed as follows: "It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them". " Every action of the executive Government must be informed with reason and should be free from arbitrariness. That the very essence of the rule of law and its bare minimal requirement". ". . . . . " Every action of the executive Government must be informed with reason and should be free from arbitrariness. That the very essence of the rule of law and its bare minimal requirement". ". . . . . the Government is not like a private individual who can pick and choose the person with whom it will deal, but the Government is still a Government when it enters into contract or when it is administering largesse and it cannot, without adequate reason, exclude any person from dealing with it or take away largesse arbitrarily". " It must, therefore, be taken to be the law where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largesse including award of jobs, contracts, quotas, licences, etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down..." (ii) In Kasturi Lal Lakshmi Reddy v. State of J. and K., 1980 AIR(SC) 1992, 1980 (4) SCC 1 , 1980 (3) SCR 1338 : (AIR 1980 $C 1992), the Supreme Court held as follows (paras 14 and 22 of AIR) :- "The Government, therefore, cannot for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so". ............. " If the terms and conditions of the contract or the surrounding circumstances show that the State has acted mala fide or out of improper or corrupt motive or in order to promote the private interest of someone at the cost of the State, the Court will undoubtedly interfere and strike down State action as arbitrary, unreasonable or contrary to public interest" ............... (iii) In Fertilizer Corporation Kamgar Union v. Union of India, 1981 AIR(SC) 344, 1981 (42) FLR 192, 1981 (59) FJR 237, 1980 LIC 1367, 1981 (1) LLJ 193 , 1981 (1) LLN 288, 1981 (1) SCC 568 , 1981 (2) SCR 52 , 1981 (3) Scale 1137, the Supreme Court observed as follows (paras 22 and 23 of AIR):- "If and when a sale of public property is found to be vitiated by arbitrariness or mala fides, it would be necessary to consider the larger question as to who has the right to complain of it". " If public property is dissipated, it would require a strong argument to convince the Court that representative segments of the public or at least a section of the public which is directly interested and affected would have no right to complain of the infraction of public duties and obligation. Public enterprises are owned by the people and those who run them are accountable to the people" (iv) In Ram and Shyam Co. v. State of Haryana, 1985 AIR(SC) 1147, 1985 (1) Scale 1237 , 1985 (3) SCC 267 , 1985 (S1) SCR 541, 1986 (1) UJ 539 , 1981 Supp(SCC) 85, the Supreme Court held as follows (at pp. 1152 and 1153, para 12 of AIR) :- ". . . . . public property has to be dealt with for public purpose and in public interest". ................ ". . . . . disposal of public property partakes the character of a trust in that in its disposal there should be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purpose, viz., the welfare State may be able to expand its beneficent activities by the availability of larger funds". " A welfare State as the owner of the public property has no such freedom while disposing of the public property. A welfare State exists for the largest good of the largest number more so when it proclaims to be a socialist State dedicated to eradication of poverty. All its attempt must be to obtain the best available price while disposing of its property because greater the revenue, the welfare activities will get a fillip and shot in the arm". ". . . . . All its attempt must be to obtain the best available price while disposing of its property because greater the revenue, the welfare activities will get a fillip and shot in the arm". ". . . . . the Government must act in public interest, it cannot act arbitrarily or without reason and if it does so, its action would be liable to be invalidated. It was further observed that the object of holding the auction is generally to raise the highest revenue" (v) In Mahabir Auto Stores v. Indian Oil Corporation, 1990 AIR(SC) 1031, 1990 (69) CC 746, 1990 (1) JT 363, 1990 (2) SLR 69, 1990 (1) Scale 410 , 1990 (3) SCC 752 , 1990 (1) SCR 818 , 1990 (2) UJ 62 , the Supreme Court observed as follows (at p. 1037, para 12 of AIR): "Where there is arbitrariness in State action of this type of entering or not entering into contracts, Art. 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason". " If a governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable". Every action of the State executive authority must be subject to rule of law and must be informed by reason". " If a governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable". " Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touch-stone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case" (vi) In Sterling Computers Ltd. v. M. and N. Publications Ltd., 1993 (1) CCC 86, 1993 (3) JT 187, 1993 (1) Scale 36 , 1993 (1) SCC 445 , 1993 (1) SCR 81 , 1993 (1) UJ 456 , 1996 AIR(SC) 51, 1993 AIR(SCW) 683, 1993 (2) PLJR 12, 1993 (1) JT(SC) 187, 1993 (2) SCJ 455, the Supreme Court observed as follows (paras 14, 26 and 29 of AIR) : "The action or the procedure adopted by the authorities which can be held to be State within the meaning of Art. 12 of the Constitution, while awarding contracts in respect of properties belonging to the State can be judged and tested in the light of Art. 14 of the Constitution, is settled, by the judgments of this Court". ............ " The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so". ". . . . . Once the State decides to grant any right or privilege to others, then there is no escape from, the rigour of Article 14, the executive does not have an absolute discretion, certain precepts and principles have to be followed, the public interest being the paramount consideration. It has also been pointed out that for securing the public interest one of the methods recognized is to invite tenders affording opportunity to submit officers for consideration in an objective manner". ............. It has also been pointed out that for securing the public interest one of the methods recognized is to invite tenders affording opportunity to submit officers for consideration in an objective manner". ............. " Even while taking decision in respect of commercial transactions, a public authority must be guided by relevant considerations and not by irrelevant ones. If such decision is influenced by extraneous considerations which it ought not to have taken into account the ultimate decision is bound to be vitiated, even if it is established that such decision had been taken without bias" 6. On the authority of the above rulings, the learned senior counsel, Mr. Alagiriswami submitted that the entire procedure followed by the second respondent, is arbitrary, illegal and unsustainable in law and as such, in the interest of fair play and justice, the entire proceedings of the respondents should be quashed and necessary directions to be issued to the respondents to call for fresh tenders relating to manufacture of 4500 PSC REC poles and necessary direction to be issued to the respondents to issue tender documents to the petitioner and all other persons qualified to submit the tender to participate in the tender proceedings. 7. On the other hand, Mr. C. S. Krishnamoorthy, learned counsel for the respondents vehemently submitted that the petitioner has not approached this Court with clean hands and therefore, the writ petition is liable to be dismissed on the said ground alone. The learned counsel submitted that the petitioner has stated in his affidavit that on 5-1-1995, he approached the second respondent for obtaining tender documents and it was alleged that the second respondent asked him to come the next day. Mr. C. S. Krishnamoorthy, learned counsel for the respondents pointed out that 5-1-1995 was a holiday due to Eighth World Tamil Conference and on 10-1-1995, the petitioner was on tour. Further, it was submitted that the petitioner has not complied with the terms of the tender advertisement and in particular, he sent only Rs. 30/- by Telegraphic Money Order, but the petitioner ought to have sent Rs.45/- for forwarding the tender form by post. The learned counsel further submitted that there was no delay on the part of the respondents and the entire fault was on the part of the petitioner as he has not strictly complied with the terms of the tender for obtaining the tender form and documents. The learned counsel further submitted that there was no delay on the part of the respondents and the entire fault was on the part of the petitioner as he has not strictly complied with the terms of the tender for obtaining the tender form and documents. In support of the said contention, the learned counsel submitted the rulings reported in the following cases :- (i) In V. Tamil Selvan v. State of Tamil Nadu, 1992 Writ LR 716, this Court held that the remedy under Art 226 of the Constitution is an extraordinary remedy. The Court would be fully justified in refusing to exercise its discretion in favour of a person who has abused the process of Court and suppressed material and relevant factors and obtained orders from this Court. (ii) In K. V. Sivaprakasairi v. Dy. Commr., H.R. and C.E., 1993 Writ LR 52 at p. 53, this Court held as follows:- "On the date of opening of the tender in this case, since the 2nd respondent alone had applied for tender, his tender has been accepted, and therefore, the petitioner cannot have any valid grievance over the same. The petitioner has not even applied and the 2nd respondent alone has applied for the tender. In such circumstances, there is no other option for the 1st respondent except to accept the offer of the 2nd respondent" 8. He further submitted that the writ petition has become infructuous as the petitioner did not submit the tender before the closing date and only two persons have submitted their tender form and the tender had to be opened by the respondents, but no decision has been taken in view of the order of status quo passed by this Court. The learned counsel submitted that the writ petition is liable to be dismissed on the abovesaid grounds. 9. I have carefully considered the respective submissions made by the learned counsel for the petitioner and the respondents. In the instant case, it is admitted that the petitioner is a registered contractor of Class-I with the respondents and he had taken up several contract works from the first respondent and carried out the contracts to the satisfaction of the respondents. I have carefully considered the respective submissions made by the learned counsel for the petitioner and the respondents. In the instant case, it is admitted that the petitioner is a registered contractor of Class-I with the respondents and he had taken up several contract works from the first respondent and carried out the contracts to the satisfaction of the respondents. In the present case, the grievance of the petitioner is that in spite of several attempts made by the petitioner to obtain the tender documents, the respondents failed to issue tender documents for reasons unsustainable in law. The petitioner in the affidavit stated that he approached the second respondent on 5-1-1995 for obtaining the tender documents and the second respondent informed him that he would issue the documents only on 10-1-1995 whereas this has been stoutly denied by the second respondent in his counter affidavit stating that on 5-1-1995, the State Government has declared holiday, due to English World Tamil Conference and on 10-1-1995, the second respondent was on tour. Further, a reply affidavit has been filed by the petitioner reiterating the stand taken in the main affidavit. Mr. K. Alagiriswami, learned senior counsel submitted that the disputed question of fact cannot be gone into in a writ petition and if opportunity is given to summon the second respondent as the witness and subject to cross-examination, he will prove that the statement of the second respondent is not correct. In view of the above, there is dispute with regard to what took place on 5-1-1995 and 10-1-1995 and as such for the purpose of this case, it has to be presumed that the petitioner did not meet the respondent in person. However, one fact is clear that the petitioner has sent Rs.30/- by telegraphic money order on 11-1-1995 and he has also stated that he has sent the representative in person to collect the tender documents. But in the reply, the second respondent has merely stated that as the petitioner has not complied with the terms, the tender document was not sent. Mr. K. Alagiriswami, pointed, out that in the reply, there is no denial with regard to the presence of the petitioner's representative on 11-1-1995. But in the reply, the second respondent has merely stated that as the petitioner has not complied with the terms, the tender document was not sent. Mr. K. Alagiriswami, pointed, out that in the reply, there is no denial with regard to the presence of the petitioner's representative on 11-1-1995. Therefore, he submitted that the second respondent deliberately failed to issue the tender documents on the grounds best known to the higher authorities and the conduct of the respondents is arbitrary and as, such the entire tender proceedings are vitiated. 10. I have considered the contentions of the learned counsel for the petitioner and the respondents. I am unable to accept the contentions of the learned counsel for the respondents. The rulings cited by the learned counsel for the respondents are not applicable to the peculiar facts and circumstances of the case. On the other hand, there is force in the contention of Mr. K. Alagiriswami, learned senior counsel for the petitioner. One fact stares on the face of the record, viz., the second respondent has not stated in his counter affidavit or further affidavit that the second respondent has made sufficient arrangements in his office for issue of tender documents. The advertisement issued in the Tamil daily, 'Dina Thanthi' on 26-12-1994, itself says that the forms will be available in the office of the second respondent. It is clear from the counter affidavit filed by the second respondent that he was on tour on 10-1-1995 and as such, the second respondent should have made adequate arrangements for issue of tender documents in his office in his absence. It is well-settled by above rulings of the Supreme Court that the public authorities being the instrumentalities of the State, should act fairly in such matters. In International Airport Authority of India's case reported in 1979 AIR(SC) 1628, 1979 (2) LLJ 217 , 1981 (1) LLN 270, 1979 (3) SCC 489 , 1979 (3) SCR 1014 , 1042 SCC(p) 511), the Supreme Court has observed that the Government is not like a private individual who can pick and choose the person with whom it will deal, but the Government is still a Government when it is administering largesse and it cannot, without adequate reason, exclude any person from dealing with it or take away largesse arbitrarily. The same principles apply with equal force to the instrumentality of the State like the Tamil Nadu Electricity Board, the respondents in the writ petition. In the instant case, there is no material placed before this Court to show that the second respondent made adequate arrangements for the supply of tender documents to the persons who wanted to take part in the tender and in view of the above, the entire proceedings are not fair and vitiated and are liable to be quashed. In view of the above, the writ petition is allowed. The respondents are directed to issue fresh tender notification with regard to the above work and after making adequate arrangements for issue of tender documents to all persons qualified to apply for the abovesaid work, allot the work to successful bidder, in accordance with law. With the above observations, the writ petition is allowed. No order as to costs. In view of the disposal of the W.P. no orders are necessary in W.M.P. Order accordingly.