Kromex International (P) LTD v. Rajasthan State Mines and Minerals LTD
2002-08-16
K.S.RATHORE
body2002
DigiLaw.ai
JUDGMENT 1. - Petitioner filed this present writ petition seeking writ order or direction to quash and set aside the award of the contract awarded Rn favour of respondent No. 2 in pursuance to the tender document dated 19.4.2002 for supply of the OTR tyres and further seek direction to restrain respondent No. 1 from taking any action, in the matter of, in the process of and in terms of awarding the contract in favour of respondent No. 2 or, in alternate to restrain respondent No. 2 to take any action i.e. supply order of the OTR tyres in terms of the said Tender, alternatively prayed for cancellation of the award of contract in favour of respondent No. 2 and issue direction to award the contract in favour of the petitioner or in the alternative to re-invite the tender for supply of OTR tyres with other prayers. 2. The petitioner is a company incorporated under the Companies Act, 1956 at Delhi and having its registered office at Kashmere Gate, New Delhi and carrying on the business, trading, importing, handling, distributing, exporting or otherwise dealing in all kinds of automobiles parts, components and accessories therein including, in particular, tyre, tube, sole, retreading of tyre and rubber and all other spare parts. 3. Respondent No. 1 issued a tender notice which was published in the daily newspaper Rajasthan Patrika dated 25.4.2002 and in response to this short term tender notice dated 19.4.2002 the petitioner also participated in the tender. The contract was awarded in favour of respondent as the offer of respondent No. 2 is less than the petitioner's offer. 4. Petitioner purchased the tender documents, complied with the various terms and conditions, duly filled in the same and submitted the same to the respondent No. 1 through Its General Manager (MM) at their Udaipur Office vide letter dated 14.5.2002 in two parts as stipulated in the notice for inviting tender and he also deposited the requisite amount through Demand Draft in favour of respondent No. 1 towards earnest money against the tender as per the stipulated terms and conditions. 5. In view of the clause A of the short term tender notice condition the petitioner also submitted the authorisation letter dated 2.5.2002 of the foreign manufacturing company/principle of the General Brand OTR Tyres to be supplied under the tender namely M/s. Continental General Tire Inc.
5. In view of the clause A of the short term tender notice condition the petitioner also submitted the authorisation letter dated 2.5.2002 of the foreign manufacturing company/principle of the General Brand OTR Tyres to be supplied under the tender namely M/s. Continental General Tire Inc. Charlatte, USA through its Continental Business Unit International, A Department of Continental A.G. of Hanover, Federal republic of Germany and this authorisation was addressed to the General Manager of the respondent No. 1. 6. Apart from the above the petitioner furnished requisite documents for example copy of income tax clearance certificate, copy of sales tax certificate, copy of sales tax clearance certificate, copy of Importer-exporter and copy of listed catalogue. 7. Petitioner submits that total four suppliers participated and technical bid was opened on 17.5.2002 and Price Bid was opened on 18.6.2002. 8. At the time of opening of the Technical Bid, the petitioner came to know that the Respondent No. 2 has also submitted its tender by stating that their company Is authorised by the said foreign manufacturing company M/s. Continental General Tire Inc. and the petitioner immediately approached the said foreign manufacturing company to seek clarification about the so called authorisation given by them to the respondent No. 2. 9. The company through its fax message on 27.5.2002 sent to the respondent No. 2 informed that in respect of the above mentioned tender their authorised representative for the supply of general brand of OTR tyres is the petitioner company namely Kromax International Pvt. Ltd. and the respondent No. 2 namely M/s Satelite Products (P) Ltd. have no official authorisation. Not only by this but vide Annex. 7 dated 31.5.2001 issued by the Sales Director South Asia and Middle East Continental Business Unit International again reiterated this fact that the petitioner company is only the authorised company for the purpose of the present tender. And this fact was reaffirmed by the Annex. 9 dated 27.5.2002 through fax message issued by L.G. Jones, Sales Director, South Asia and vide Annex. 11 dated 21.6.2002 again letter was issued by Paul E Gonzalez Manager International Sales Continental Tire North America, Inc. But the respondent No. 1 has totally Ignored these correspondences and bent upon to award the contract in favour of the respondent No. 2 who is not authorised dealer of the said international company. 10.
11 dated 21.6.2002 again letter was issued by Paul E Gonzalez Manager International Sales Continental Tire North America, Inc. But the respondent No. 1 has totally Ignored these correspondences and bent upon to award the contract in favour of the respondent No. 2 who is not authorised dealer of the said international company. 10. Having apprehension that respondent No. 1 is ignoring all the communications sent to them by the petitioner as well as the foreign manufacturing company, the petitioner sent a detailed communication vide its letter dated 21.6.2002 to Mr. Manoj Swaroop, General Manager (MM) of the respondent No. 1 informing the facts in detail and giving the complete particulars of the said authorisation of foreign manufacturing company/principal along with the name of the concerned person. 11. Not only this petitioner again impress upon the respondent No. 1 about the facts stated in its earlier communication and made further communication vide its letter dated 22.6.2002 and 8.7.2002 reiterating the same facts as to the valid authorisation by the foreign company/principal to the petitioner and non-authorisation of the respondent No. 2 whose contract awarded and was not qualified and also not holding a valid authorisation by foreign manufacturing company/principal of goods to supply in terms of the tender. 12. The respondent No. 1 have arbitrarily, improperly and in violation of the terms of tender awarded the contract in favour of respondent No. 2. 13. On behalf of respondent No. 1 Mr. R.K. Agarwal and on behalf of respondent No. 2 Mr. R.C. Joshi put in appearance. Both the learned counsel have challenged the maintainability of this writ petition and raised preliminary objections regarding territorial jurisdiction and in support of their contentions they placed reliance on the judgment reported in 2001 (2) SCC 294 titled Rajasthan High Court Advocates Association v. Union of India & ors., Head Note B. 14. During the course of argument both the learned counsel has given up their preliminary objections and argued the matter on merit. 15. Since pleadings are complete and the learned counsel for both the parties agreed that the matter may be heard finally at this stage, the matter is heard finally at this stage. 16. But so far as the other preliminary issues with regard to the maintainability on the basis that in the contractual matter this Court has limited power to enter into such controversy.
16. But so far as the other preliminary issues with regard to the maintainability on the basis that in the contractual matter this Court has limited power to enter into such controversy. It is also submitted that territorial jurisdiction has been given up and for such preliminary objections regarding contractual matter is raised by both the learned counsel and it is submitted that this petition Is not maintainable. This Court should not interfere in the' matters of contract which attains finality. As the technical bid as well as financial bid was opened and petitioner has participated and finally the contract is awarded in favour of respondent No. 2 as the officer of the respondent No. 2 was found 14 lacs less than the petitioner's proposal. 17. In support of their contention Mr. Agarwal submitted the judgment reported in 1997 (1) SCC 738 titled, Asia Foundation & Construction Ltd. v. Trafalgarr House Construction (I) Ltd. & Ors. wherein the Hon'ble Supreme Court has held that it is not within the permissible limits of interference for a court of law, particularly when there has been no allegation of malice or ulterior motive and particularly when the court has not found any malafides or favouritism in the grant of contract in favour of the successful bidder. 18. Mr. Agarwal submits that in this case the petitioner has not alleged any allegations regarding malafides and favouritism. Thus the ratio decided by the Hon'ble Supreme Court is fully applicable to the instant case. 19. The case reported in AIR 1996 SC 11 , Tata Cellular v. Union of India has also been relied by the respondent's counsel wherein the Hon'ble Supreme Court has held that the modern trend points to judicial restraint in administrative action. This is not the domain of this Court to review the administrative action. 20. The case of Air India Ltd. v. Cochin International Airport Ltd. & Ors., reported in 2000 (2) SCC 617 has also been referred by Mr, Agarwal wherein in Para 7 the Hon'ble Supreme Court has held that even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order.
The court should always keep the larger public interest in mind in order. to decide whether its intervention is called for or not. 21. Mr. Joshi in this regard has placed reliance in the judgment reported in 1993 (1) SCC 446, United India Periodicals Pvt. Ltd. v. M/s. M & N Publications Ltd. & Ors. wherein the Hon'ble Supreme Court has held that Public authorities must have the same liberty as they have in framing the policies, even while entering into contracts because many contracts amount to implementation or projection of policies of the Government. In contracts having commercial element, some more discretion has to be conceded to the authorities giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms, so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. 22. Mr. Agarwal also placed a document is on the record as R-1/1 a letter dated 7.5.2002 issued by the Director of Dealer Sales of Continental Tire wherein they have confirmed that I & E Tire Corp., 611 Smith Street Brooklyn, NY 1123 is an authorised distributor of General OTR Tires. 23. He also placed the Annex. R-⅓ dated 13.6.2002 issued by the Continental General Tire. Mr. Agarwal pointed out the signature made on R-⅓ is differ from the signature made on Annex. 11 dated 21.6.2002. 24. Mr. Agarwal further submits that since the respondent No. 2 has duly authorised by the company situated at America whereas the petitioner is authorised by the office of the Sales Director South Asia and Middle East. 25. In para 21 of its reply Mr. Agarwal submitted that the respondent No. 1 has taken abandon caution while awarding the contract in favour of the respondent No. 2 by way of incorporating the condition in supply order that the respondent No. 2 would be required to furnish: (i) Proof of custom clearance/bill of lading/bill of entry. (ii) Certificate of guarantee from the manufacturer (General Tyre USA) along with serial number of the tyres. 26.
(ii) Certificate of guarantee from the manufacturer (General Tyre USA) along with serial number of the tyres. 26. In such circumstances since the contract is already awarded in favour of respondent No. 2 and work order has also been issued in favour of respondent No. 2, at this stage this petition is not maintainable in view of the judgments referred hereinabove by the learned counsel for the respondents. 27. Learned counsel for the petitioner referred Annexs. 7, 8, 9, 10, 11, 12 and 14 whereby the petitioner tried to show that he is the only authorised agent in India by the company and this fact is continuously verified by, the Saies Director South Asia and Middle East Continental Business Unit International. It is also given out by learned counsel for the petitioner that it is for the respondents to verify this' fact whether the petitioner is authorised agent or not ? 28. Learned counsel for the petitioner Mr. Kuhad drawn my attention towards the reply submitted by respondent No. 1 to this effect in para 11 that the petitioner had no business to advise answering respondent to seek clarification regarding authorisation status of the respondent No. 2 from the persons of their choice. Therefore, respondents not only illegally awarded the contract in favour of respondent No. 2 but also wrongly issued the work order which requires interference by this Court as has been held by the Supreme Court in the case of Air India Ltd. v. Cochin International Airport Ltd. & Ors., reported in 2000 (2) SCC 617 which is already relied upon by the respondents. The relevant page which is referred by Mr. Kuhad is 619 wherein in para 7 of the judgment the Hon'ble Supreme Court has expressed that it may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from the arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. 29.
But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from the arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. 29. Having heard rival submissions of the learned counsel for the parties and after careful examination of the material available on the record and after careful consideration of the judgments referred before me by both the parties, since only controversy raised by way of this writ petition that respondent No. 2 is not eligible to participate in the short term tender notice issued on 19.4.2002. As per the terms of clause A which stipulates that only established manufacturers of proven past record are eligible to quote. In case of overseas manufacturer, their authorised/accredited sales agency in India can also quote on behalf of manufacturer.As per the submissions of the learned counsel for the petitioner, petitioner is only the authorised agent and respondent No. 2 is not authorised. 30. To resolve this controversy I give my thoughtful consideration to the letters Annex. 7 dated 31.5.2001 issued from Hanover, Federal Republic of Germany. In the beginning of this letter dated 31.5.2001 it has been stated that this is to certify that Continental Business Unit International, a department of Continental AG of Hanover, federal Republic of Germany, have authorised Kromex International (P) Ltd. This letter is signed by L.G. Jones, Sales Director South Asia and Middle East, Continental Business Unit International. 31. Annex. 9 dated 27.5.2002 is also another letter issued by L.G. Jones, Sales Director, South Asia wherein in para 3 of this letter the Sales Director has stated that the sale of Continental Group tyre products in lndial including general branded tyres is the responsibility of Continental International based in Hanover,. Germany. "I am the person in that organisation responsible for the selection of authorised representation in respect of our tyre business in India."Annex. 11 dated 21.6.2002 which is also issued by Paul E Gonzalez, Manager International Sales, Continental Tire North America, Inc. has reiterated this fact that Continental Tire North America, Inc. ratifies herewith that Kromex International is the only authorised distributor for tender for General OTR Tires. 32.
11 dated 21.6.2002 which is also issued by Paul E Gonzalez, Manager International Sales, Continental Tire North America, Inc. has reiterated this fact that Continental Tire North America, Inc. ratifies herewith that Kromex International is the only authorised distributor for tender for General OTR Tires. 32. By bare reading of these letters issued by the Manager International Sales Continental Tire North America, Inc. and from the office of Germany reveal that the original Continental Tire Company is situated at America which is the Manufacturing company and office at South Asia & Middle East are dealing with the business of tires manufactured by the Continental Tire at the Germany and they are responsible to look after the business of sales of tires for the company Continental Tire in the North America and the Sales Director South Asia and Middle East designation has been referred in the letter dated 31.5.2001 (Annex. 7) and they authorised the petitioner as having an authorised agent to deal with the business in India admitting this fact that the petitioner may be authorised dealer appointed by the office of Sales Director South Asia and Middle East Continental Business Unit International. It does not mean that he is the authorised dealer by the manufacturer directly. This reveals that they are not manufacturer but they are having the business units at different places and this unit is responsible to deal with the business in South Asia and Middle East. 33. Whereas as per the letter dated Annex. R-1/1 issued by the office of the Director Dealer Sales situated at America, it was stated that respondent No. 2 company is an authorised distributor of General OTR Tires. 34. Be that as it may. Since the contract has been awarded in favour of respondent No. 2 and work order has also been issued and as per the submissions made by the respondent no. 1 that they have taken the caution and this contract is only effective if the respondent No. 2 make the supply by giving the Proof of custom clearance/bill of lading/bill of entry, Certificate of guarantee from the manufacturer (General Tyre USA) along with serial number of the tyres. 35. After Incorporation of such condition in the tender document regarding supply of the OTR tyres. The apprehension of the petitioner also not survive that they may supply the fake tyre which may not manufactured by general tire USA. 36.
35. After Incorporation of such condition in the tender document regarding supply of the OTR tyres. The apprehension of the petitioner also not survive that they may supply the fake tyre which may not manufactured by general tire USA. 36. I have given my thoughtful consideration to the judgment referred by the respondents. At this stage when the contract is already concluded, the work order has been awarded, the judgment referred by the respondent No. 1 and 2 are fully applicable to the instant case. 37. In view of these judgments no interference is required by this Court in contractual matter and no indulgence can be granted by this Court in the facts and circumstances of the case. 38. Thus, writ petition does not survive and same is herewith dismissed with no order as to costs.Writ Petition Dismissed. *******