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2002 DIGILAW 1394 (AP)

M. v. Krishna Reddy VS Government Of A. P.

2002-12-03

L.NARASIMHA REDDY

body2002
L. NARASIMHA REDDY, J. ( 1 ) THE respondent Nos. 1 and 2 issued tender notification dated 4-5-2002 inviting tenders for sale of leasehold rights to collect toll fee at road-cum-rail bridge, Rajahmundry, for the period from 1-5-2002 to 31-3-2004, fixing 16-5-2002 as the last date for receiving the tenders as well as date of auction. Only one sealed tender was received; whereas the petitioner, the 3rd respondent and several persons have offered their bids. On the ground that the tenders and bids were not up to the expectation, the further proceedings were given up. Thereafter, respondents 1 and 2 have undertaken negotiations with certain participants and have decided to sell the leasehold rights for the period from 1-10-2002 to 31-3-2004 (18 months) in favour of the 3rd respondent for an amount of Rs. 2,89,18,116/-, and orders to that effect were passed in G. O. Rt. No. 1095, Transport, Roads and Buildings Department, dated 27-9-2002. The petitioner challenges the same. ( 2 ) IT is the case of the petitioner that in response to the tender notification one Mr. M. Venkataramana offered Rs. 336. 60 lakhs and he offered 334. 10 lakhs. According to him, these are the 1st and 2nd highest bids, and the bid of the 3rd respondent is far below than that. He complains that if negotiations were to take place, being the 2nd highest bidder, he ought to have been called for, particularly when the 3rd respondent, whose offer was less, was invited. He complains that neither he nor any tenderer were put on notice and the leasehold rights were sold at a relatively lesser amount to the 3rd respondent in contravention of the relevant procedure and norms of fairplay. Accordingly, he seeks a Writ of Mandamus to declare G. O. Rt. No. 1095, dated 27-9-2002 as illegal, arbitrary and to set aside the same. He also seeks consequential direction to the respondents 1 and 2, to conduct public auction of the sale of leasehold rights. ( 3 ) THE 2nd respondent filed counter-affidavit. It is stated that in response to the tender notification one Mr. M. Sreenivas offered highest bid of Rs. 3,51,06,516/- for 22 months, and the bid of the petitioner herein was 3rd and not the 2nd highest. It is stated that since the offers were not acceptable, it has been decided to take steps in accordance with G. O. Ms. It is stated that in response to the tender notification one Mr. M. Sreenivas offered highest bid of Rs. 3,51,06,516/- for 22 months, and the bid of the petitioner herein was 3rd and not the 2nd highest. It is stated that since the offers were not acceptable, it has been decided to take steps in accordance with G. O. Ms. No. 132, dated 11-8-1998. The 1st respondent had constituted the State Level Committee through G. O. Rt. No. 714, dated 2-7-2002. At its meeting held on 17-9-2001, the Committee has decided that where it is proposed to sell the leasehold rights at tolls on nomination basis, the concerned Chief Engineer shall prepare a list of 5 contractors, which may include the previous successful bidder, the highest bidder in the 1st and 2nd calls and two other contractors of good track record. ( 4 ) IT is the case of the respondents 1 and 2 that in accordance with the norms stipulated by the State Level Committee, in addition to the 5 contractors, they have also invited 4 more. Since they found that at the meeting of the persons so invited, the offer made by the 3rd respondent at Rs. 2,89,18,116/- (for 18 months) was the highest, it has been decided to sell the leasehold rights to him. The respondents contend that though according to norms prescribed by the State Level Committee, only 5 contractors were to be invited; with a view to enlarge the scope of negotiations and to enable the fairness, 4 more contractors with "good tract record" were invited and no exception can be taken to the impugned order. ( 5 ) SRI C. V. Nagarjuna Reddy, learned counsel for the petitioner submits that the bid of the 3rd respondent, in response to the tender notification, was far less than that of the petitioner and once the 3rd respondent was invited for negotiations on consideration, there does not exist any justification to deny the same facility to the petitioner. The learned counsel states that wherever the authority inviting tenders does not find it feasible to accept the offer and decides to hold negotiations, it is incumbent upon it to invite all the tenderers and it is not permissible in law to pick and chose persons of their choice. He states that even the procedure prescribed under G. O. Ms. No. 132, dated 11-8-1998 has not been followed. He states that even the procedure prescribed under G. O. Ms. No. 132, dated 11-8-1998 has not been followed. ( 6 ) THE learned Government Pleader for transport submits that the Government issued notification twice inviting tenders for the leasehold rights in question, and since the bids received therein were not acceptable and not up to expectation, it has been decided to undertake the process of negotiations in accordance with the procedure prescribed under G. O. Ms. No. 132. It is his contention that according to the norms prescribed by the State Level Committee, the highest bidders in the 1st and 2nd calls, the previous successful bidder and 2 contractors of good tract record were to be invited for negotiations and the 3rd respondent was invited under the category of 2 contractors "with good track record. " It is his contention that since the petitioner did not fall into any of these categories, he was not invited. So far as the bid amount is concerned, it is his case that though the amount offered by the 3rd respondent may appear to be less, but, if the period for which it is taken into account, it is a better other. ( 7 ) SRI P. Gangaiah Naidu, learned senior counsel appearing for the 3rd respondent submits that since the petitioner did not fall into the categories of persons, who are entitled to be invited for negotiations, he cannot have a genuine grievance. It is also his contention that the respondents 1 and 2 have taken the relevant factors into account and having been satisfied about the offer made by the petitioner have accepted it and no exception can be taken to the same. ( 8 ) IN view of the fact that two attempts to sell the leasehold rights by issuing notifications have failed, the respondents 1 and 2 have resorted to the process of negotiations as contemplated under G. O. Ms. No. 132, dated 11-8-1998. The procedure prescribed under this G. O. for allotting or awarding the works on nomination basis is provided for under para 4. The relevant portion of the G. O. reads as under :"for giving works on selection, lists of contractors with good tract record will be prepared. No. 132, dated 11-8-1998. The procedure prescribed under this G. O. for allotting or awarding the works on nomination basis is provided for under para 4. The relevant portion of the G. O. reads as under :"for giving works on selection, lists of contractors with good tract record will be prepared. In preparing these lists the volume of works done by them, the quality of works done by them, the infrastructure possessed by them and also works on hand and their capability will also be considered. The list of contractors should be prepared and published in advance regularly i. e. once in 6 months. From these lists contractors will be called for negotiations in groups of 5 in rotation. The contractor offering to do the work at the lowest rate will be given the work. Time allowed for selection by the Committee will be 5 days. " ( 9 ) IT is not the case of the respondents 1 and 2 that the list of contractors as contemplated under the above paragraph has been prepared. On the other hand, it is stated in the counter-affidavit that the State Level Committee constituted under G. O. Rt. No. 714, dated 2-7-2002, has resolved that in respect of tolls, the Chief Engineer shall prepare a list of 5 contractors, which shall include the previous successful bidder, highest bidders in the 1st and 2nd calls and 2 other contractors of good track record. The basis for such a course of action is not forthcoming. While there cannot be any objection for inviting the previous highest successful bidder and the highest bidders in the 1st and 2nd calls, there does not exist any basis to invite "2 contractors of good track record. " ( 10 ) IT is settled practice that whenever the bids in response to a tender notification are not acceptable, the competent authority undertakes negotiations with the persons who responded to the tender notification. While there is no obligation on the part of the authority to undertake negotiations, whenever such negotiations take place, all the participants are to be given an opportunity. Any selective negotiation would not fit into the very scheme of inviting competitive bids and ensuring transparency in the matter of awarding contracts by the State. While there is no obligation on the part of the authority to undertake negotiations, whenever such negotiations take place, all the participants are to be given an opportunity. Any selective negotiation would not fit into the very scheme of inviting competitive bids and ensuring transparency in the matter of awarding contracts by the State. Even according to the respondents 1 and 2, apart from the 5 invitees, as suggested by the State Level Committee, 4 others were also invited. The parameters adopted for inviting these 4 persons are also not indicated. While such was the lack of competence or coherence in the matter of inviting the participants in the negotiations, there did not exist any basis for excluding the petitioner. The petitioner claims to be the 2nd highest bidder, whereas according to the respondents 1 and 2, he is the 3rd highest bidder. Either way, it is not in dispute that the bid of the petitioner on 16-5-2002 was higher than that of the 3rd respondent. Such being the case, there did not exist any basis to exclude the petitioner from the purview of negotiations. The attempt by the respondents 1 and 2 that the offer of the 3rd respondent was proportionately better than that of the petitioner, does not at all convince this Court. The possibility of the petitioner or other bidders, who responded to the tender notification, to offer a higher amount, cannot at all be ruled out. In fact, the learned counsel for the petitioner has stated that the petitioner is prepared to offer a higher amount for the same period. Therefore, the action of the respondents 1 and 2, in being selective in inviting contractors for negotiations, cannot be said to be objective and in accordance with the settled principles or norms. The impugned order is accordingly set aside. Consequentially, the writ petition is allowed with the following directions :a) The impugned G. O. shall stand set aside. b) The respondents 1 and 2 shall invite the tenderers or bidders, who responded to two tender notifications, for negotiations on a stipulated date, which shall not be later than 10 days from the date of despatch of the notice to the addresses furnished in their respective tenders or bids, through registered post with acknowledgment due. b) The respondents 1 and 2 shall invite the tenderers or bidders, who responded to two tender notifications, for negotiations on a stipulated date, which shall not be later than 10 days from the date of despatch of the notice to the addresses furnished in their respective tenders or bids, through registered post with acknowledgment due. Such letters/notices shall be addressed to the contractors, who responded to the two notifications, within one week from the date of receipt of a copy of this order. c) The amount of Rs. 2,89,18,116/- shall be treated as minimum, if there is any bid or offer for a higher amount for the same period, the same shall be considered. On the other hand, if there is no higher offer or bid, it shall be open to the respondents 1 and 2 to confirm the sale of the leasehold rights for the said period in favour of the 3rd respondent. Petition allowed.