JAYAPRAKASH NANDA v. GENERAL MANAGER, ORISSA STATE WAREHOUSING CORPORATION
2002-07-10
A.S.NAIDU, P.K.BALASUBRAMANYAN
body2002
DigiLaw.ai
A. S. NAIDU, J. ( 1 ) BOTH these writ applications have been filed under Articles 226 and 227 of the Constitution of India inter alia praying to issue a writ in the nature of certiorari/mandamus commanding the opposite parties to accept the petitioners' tenders and issue consequential orders to them in respect of construction of 5000 MT Godowns at Malmunda, Phase-I and Phase-II respectively in the district of Balangir pursuant to acceptance letters, vide Annexure-3 (in both the writ applications ). As the facts and points of law involved in the cases are similar, both the matters are being disposed of by this common judgment. ( 2 ) BEREFT of unnecessary details, the short facts leading to filing of the writ applications are that the State Warehousing Corporation, opposite party No. 1, issued a Tender Call Notice on 19-1-2002 inviting sealed tenders from registered contractors for construction of 5000 MT Godowns at different places of the State. The present dispute relates to construction of such Godowns at Malmunda, Phase-I and Phase-II in the district of Bolangir. A copy of the Tender Call Notice has been filed as Annexure-1 in which the time of completion of the construction was fixed as one year. Sri Jayprakash Nanda, the petitioner in OJC No. 3903 of 2002, submitted his tender in respect of construction of 5000 MT Godown at Malmunda, Phase-I and similarly Sri Bajranglal Agrawal, the petitioner in OJC No. 4029 of 2002, submitted his tender for construction of 5000 MT Godown at Malmunda, Phase-II. It is needless to say, that many other intending contractors also submitted their tenders. After scrutiny of the tender papers by a Committee, the tenders submitted by the petitioners were found to be the lowest in respect of Phase-I and Phase-II works respectively. The Chairman-cum-Managing Director of opposite party No. 1 Corporation, vide his letter dated 18-3-02 (Annexure-3) intimated the petitioners that their offers being the lowest in respect of the works in question, had been accepted, subject to the condition that the construction work was to be completed within five months from the date of agreement, failing which penalty at the rate of 25. 80 per MT will be charged.
80 per MT will be charged. The petitioners, after receipt of the conditional acceptance letter, separately replied vide Annexure-4, which is identical in both the cases, that the rates were quoted by them keeping an eye on the time factor of completion of the work which was one year (twelve months) as per the Tender Call Notice and that the condition imposed in the acceptance letter Annexure-3 drastically reduced the period of completion of the work to five months and added to it a 'penalty clause' was imposed for non-completion of the work within the stipulated period of five months. The said clauses being absolutely new and unrealistic to the Tender Call Notice, both the petitioners requested to delete the said clauses and allow them to start with the work immediately. They also promised to execute the work diligently and complete the same as early as possible. The petitioners allege that in spite of such reply, opposite party No. 1 authority did not give them an opportunity, but negotiated and awarded the work to opposite party No. 3, for which the petitioners have no other alternative, but to approach this Court for redressal of their grievances. ( 3 ) AFTER receiving the Rule, a counter-affidavit has been filed on behalf of opposite parties 1 and 2 taking the stand that shortage of storing space was creating great hindrance for the State Warehousing corporation. The Corporation was unable to provide adequate storage space to the Food Corporation of India, thereby causing obstruction in paddy procurement. The approaching rainy season was also a threat to the Corporation. Taking into consideration all these factors, the Corporation accepted the tenders submitted by the petitioners in respect of construction of the Godowns at Phase-I, and Phase-II, subject to the condition that they would complete the construction within five months instead of one year as stipulated in the Tender Call Notice. It is further submitted that both the petitioners were called for negotiation and Shri Nanda, the petitioner in OJC no. 2903 of 2002, attended the office of opposite party No. 1 for negotiation, expressed his inability to complete the work if entrusted to him within five months. Similarly, Shri Agrawal, the petitioner in OJC No. 4029 of 2002 also did not agree to complete the work within five months.
2903 of 2002, attended the office of opposite party No. 1 for negotiation, expressed his inability to complete the work if entrusted to him within five months. Similarly, Shri Agrawal, the petitioner in OJC No. 4029 of 2002 also did not agree to complete the work within five months. At the other hand, opposite party No. 3 who was the lowest bidder in respect of Malmunda, Phase-III Godown construction work, agreed to complete the Phase-I and Phase-II construction work within the changed stipulated period of five months. In view of the fact that time was the essence of the contract and the Corporation badly required the storage space in the interest of the State, the offer made by opposite party No. 3 was accepted and he was entrusted with the construction work of Phase-I and Phase-II Godowns. ( 4 ) THE petitioners have filed rejoinder-affidavits stating that the authority never negotiated with them and the facts stated in the counter-affidavits are not correct. ( 5 ) IN order to appreciate the facts in true perspective, we called upon Shri Nayak, learned Counsel for opposite party No. 2, to produce the original file relating to construction of 5000 MT Godowns at Malmunda. The said file was produced before us for perusal. The minutes of the proceedings of the Tender Negotiation Committee held on 23-3-2002 in the chamber of the Chairman-cum-Managing Director, Orissa State Warehousing Corporation find place at page 34/notes of the file. Paragraph 3 (vii) of the minutes deals with construction of the 5000 MT Malmunda, Phase-I, Phase-II and Phase-III Godowns. The minutes recorded read as follows :-"vii. 500 MT Malmunda, Ph-I, II and III.- The representation of the L-1 tenderer Sri J. P. Nanda for PH-I, Sri Bajranglal Agrawal, PH-II was taken up for consideration regarding completion of godown within a period of 05 months. Sri J. P. Nanda discussed the matter with Chairman-cum-Managing Director and General Manager (Fin.) on 23-3-2002 and did not agree to complete the work within 5 months time because of approaching summer and rainy seasons. The C. M. D. in principle agreed to allow further two months' time in view of the difficulties narrated by Sri Nanda, in case the tenderer requested for extension of time. But Sri Nanda did not agree to the suggestion made by C. M. D. and insisted to allow him time for 12 months.
The C. M. D. in principle agreed to allow further two months' time in view of the difficulties narrated by Sri Nanda, in case the tenderer requested for extension of time. But Sri Nanda did not agree to the suggestion made by C. M. D. and insisted to allow him time for 12 months. C. M. D. further informed that in view of the stipulation made by F. C. I. to complete the godown within 6 months it would not be possible to allow time of 12 months for completion of the godown. Mr. Agrawal also refused CMD's proposal. After detailed discussion the Committee called Sri N. K. Patnaik. L-1 tenderer for Ph-III work to ascertain whether he is in a position to complete the Ph-I, II work within a period of 5 months. Sri Patnaik agreed to complete the work within a period of 5 months and in the estimated amount in case the three project works are entrusted to him. The S. E. explained that since at particular place the three projects are going to be undertaken there will not be any legal problem in entrusting the Ph-I and II works to the L-1 tenderer of Ph-III at Malmunda. Accordingly the committee agreed to entrust the Ph-I and II works in favour of Sri N. K. Patnaik in view of the reasons that the Corporation is going to save Rs. 7. 00 lakhs in the project and will be completed within 5 months period. " ( 6 ) A scrutiny of the file also reveals that the petitioners took part in the negotiation, but expressed their inability to complete the constructions within five months or within further extended period by two months, i. e. seven months. A perusal of the file leaves no ambiguity in our mind that the petitioners were also given adequate opportunity to take part in the negotiation and, in fact, in course of negotiation they expressed their inability to complete the construction work. ( 7 ) LEARNED counsel for the petitioners appearing in both the cases strenuously and forcefully argued that after stipulating the time in the Tender Call Notice, the authorities were legally restrained from changing any of the conditions and that insertion of a subsequent requirement in the acceptance letter was illegal and unlawful.
( 7 ) LEARNED counsel for the petitioners appearing in both the cases strenuously and forcefully argued that after stipulating the time in the Tender Call Notice, the authorities were legally restrained from changing any of the conditions and that insertion of a subsequent requirement in the acceptance letter was illegal and unlawful. He further submitted that the authorities acted arbitrarily in awarding the work in favour of opposite party No. 3. It is also submitted that the grounds on which the time stipulated in the Tender Call Notice was sought to be reduced were not only unjustified, but also not tenable in the facts and circumstances of the case and the entire attempt was a camouflage one to award the work to opposite party No. 3. ( 8 ) 'acceptance' in legal parlance signifies a final and unqualified assent to the terms of an offer. If the acceptance is qualified, the new term introduced would form a counter-offer. A counter-offer is deemed to be rejection of the original offer stipulating further conditions in changed circumstances. In the present case, though the original Tender Call Notice stipulated that the work should be completed within one year, due to certain intervening circumstances, the authorities decided that the construction work should be completed within five months. The Corporation was the sole authority to adjudge its requirement. In the present case, offers made by the petitioners to complete the work within one year has not been accepted in toto. Rather, a counter-offer was made clearly stipulating that the work should be completed within five months by Annexure-3, the letter of acceptance. The petitioners cannot be permitted to traverse beyond the letter of acceptance. The prudence of introducing such a changed condition was dependent upon several factors and we are not called upon to decide the same. The fact remains, the petitioners along with other tenderers were called for negotiation as would be evident from the original file. The petitioners though took part in the negotiation expressed their inability to complete the works within five months and/or within the further extended period by two months, i. e. seven months; whereas opposite party No. 3, another contractor, agreed to complete the work within five months, i. e. as per the term embodied in the acceptance letter issued to the petitioners.
Thus, the authorities committed no irregularity or illegality in accepting the offer of opposite party No. 3 and no exception can be taken to the decision nor awarding the work in favour of opposite party No. 3. ( 9 ) WHILE dealing with a contract awarded by a public authority, or the State, the Court must be satisfied that the transaction was not tainted with any mala fide. The Court does not act as a Court of Appeal, but merely reviews the manner in which the decision was taken. The Government must have the freedom to enter into a contract. The question which is to be looked into by the Court, if the decision is challenged, whether the authority adopted fairplay and whether the decision taken suffers from the vices of unreasonableness, arbitrariness or bias. Admittedly the petitioners had been given opportunity to complete the work within a period of five months along with others. They expressed their inability; whereas opposite party No. 3 agreed. Thus the petitioners cannot now turn round and allege any prejudice to have been caused to them. ( 10 ) AFTER examining the facts and circumstances and hearing the learned Counsel for all the sides, we are satisfied that the decision of the authorities neither suffers from any infirmity, nor based on extraneous consideration calling for our interference under extraordinary jurisdiction. The writ applications are accordingly dismissed. P. K. BALASUBRAMANYAN, C. J. I agree. Applications dismissed.