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2003 DIGILAW 151 (GAU)

Parasmoni Das v. Food Corporation of India

2003-04-03

B.BISWAS

body2003
JUDGMENT D. Biswas, J. 1. The Food Corporation of India issued a tender notice on 14.12.2001 (Annexure-C) inviting sealed tenders from the experienced and financially sound parties for appointment as transport contractors for a period of two years from Haibargaon Railway Siding/Station to FCI godowns at Nagaon. The Petitioner submitted his tender documents along with other tenderers in pursuance of the aforesaid tender notice. M/s. Deep Enterprise quoted the lowest rate while the writ Petitioner quoted the second lowest rate. The former quoted 268% above the scheduled rate while the writ Petitioner quoted 534% above the scheduled rate. Another participant Sri Amarjit Singh quoted 876% above the scheduled rate. 2. Petitioner's case is that the tender documents submitted by M/s. Deep Enterprise were incomplete and defective and, as such, the writ Petitioner being the second lowest valid tenderer should have been considered by the Respondent authority for appointment as transport contractor, if necessary by initiating negotiation. Instead of doing that, the Respondent authority issued a fresh tender notice dated 11.3.2002 wherein two other transportation centres have been included. Petitioner's grievance is that he being the lowest valid tenderer ought to have been taken into confidence and the authorities should have negotiated with him for settlement of rate so as to make it viable and executable. Instead, the Respondent authority without cancelling the earlier tender process and without any discernable reason issued the impugned tender notice in complete negation of the principles of law. Hence, this petition for cancellation of the tender notice dated 11.3.2002 (Annexure-H) and for further direction for award of the contract works to the Petitioner after negotiation. 3. The writ petition was filed on 2.4.2002. The matter was taken up by the Court on 4.4.2002 as unlisted motion as it was not listed in usual course. The Court while issuing notice by the order dated 4.4.2002 observed as follows: in the interim, it is directed that the Respondent authority may proceed with the tender process, but final order of allotment shall not be passed without leave of this Court. 4. The Respondent authority in their affidavit-in-opposition, in para 11, with reference to the NIT dated 14.12.2001, admitted that no eligibility criteria was stipulated in the tender notice except the terms and conditions specified therein. The affidavit appears to be in the form of denial of the averments made by the writ Petitioner. 4. The Respondent authority in their affidavit-in-opposition, in para 11, with reference to the NIT dated 14.12.2001, admitted that no eligibility criteria was stipulated in the tender notice except the terms and conditions specified therein. The affidavit appears to be in the form of denial of the averments made by the writ Petitioner. In para 8 of the Misc. application (MC 1094/2002), it is stated that the NIT dated 14.12.2001 has been scrapped/withdrawn as the negotiation held with the lowest tenderer i.e. M/s. Deep Enterprise failed. In para 7 of the additional affidavit filed, the Corporation denied to have any negotiation with M/s. Deep Enterprise at any stage either before or after cancellation of the tender. The stand taken by the Corporation in the Misc. Case No. 1094 of 2000 and in the affidavit appears to be contradictory. 5. I have heard Mr. A.K. Purkayastha, learned Counsel for the Petitioner and Mrs. A. Hazarika, learned Counsel for the Corporation. From the pleadings on record and the arguments advanced by the learned Counsel for the parties, the dispute can be narrowed down in the following questions: 1. Whether any negotiation was made with M/s. Deep Enterprise? 2. Whether the tender documents submitted by M/s. Deep Enterprise were valid and in accordance with the terms and conditions specified in the tender notice? 3. Whether fresh notice of tender issued by the Corporation without considering the tender submitted by the next lowest valid bidder i.e., the writ Petitioner is permissible? 6. It would appear that the Senior Regional Manager of the Corporation vide letter dated 6.3.2002 informed M/s. Deep Enterprise that since they failed to submit the required documents/certificates as per earlier communication, the security money deposited by them is forfeited as per provisions of the NIT and Clause 4 of the tender notice. This letter is relevant to the issue at hand and is, therefore, quoted below: Dated 06.03 2002 To, M/s. Deep Enterprise, Stadium Market, Lovely, Nagaon. Sub: Tender No. SAC/1011/Assam/2001 dated 14.12.2001 for appointment of transport contractor for transportation of food grains etc. by road from Haibargaon Rly. siding/station to FCI Godown at Nagaon complex on regular basis opened on 9.1.02 forfeiture of earnest money-regarding. Dear Sir, With reference to the subject cited above it is to inform that you have submitted tender for the above mentioned transport contract opened on 09.01.2002. by road from Haibargaon Rly. siding/station to FCI Godown at Nagaon complex on regular basis opened on 9.1.02 forfeiture of earnest money-regarding. Dear Sir, With reference to the subject cited above it is to inform that you have submitted tender for the above mentioned transport contract opened on 09.01.2002. In the tender you have quoted rate of 263% (two hundred Sixty three percent) above schedule of rates. Since you have not submitted all requisite documents/certificates with the tender, you were requested to furnish the required documents in time vide this office letter of even number dated 23.01.02 and telegram dated 11.02.2002. But you have not submitted any documents/certificates in response to the above. As you have failed to submit the required documents/certificates, your earnest money amounting to Rs. 68,260/- (Rupees Sixty Eight Thousand Two Hundred Sixty) only furnished by you vide call deposit receipt No. DL-740572 dated 09.01.2002 on State Bank of India, Haibargaon, Nagaon is hereby forfeited as per provisions of NIT as well as clause-4 of the tender. You shall have no claim on that amount and the amount has been taken into the account of FCI. Yours faithfully, Sd/-Illegible for Sr. Regional Manager 7. It would appear from the aforesaid letter that the Respondent Corporation wanted to settle the contract with the lowest tenderer M/s. Deep Enterprise and for that purpose directed them to submit documents/certificates etc. as per NIT. M/s. Deep Enterprise quoted the lowest rate and, as such, endeavour was made to negotiate with them. Since they did not come forward, the Corporation decided to go for fresh tender. It was in pursuance of this decision that the impugned tender notice dated 11.3.2002 was issued. 8. There cannot be any dispute that settlement of contract works has to be done by floating tenders and, once the tender process is initiated, it has to be concluded logically. In the instant case, the Corporation endeavoured to negotiate with M/s. Deep Enterprise, the lowest bidder and having failed, published the impugned tender notice. Question naturally arises as to whether it was appropriate on the part of the Corporation to go for fresh tender when the tender documents of the lowest tenderer were defective and the negotiation with them became abortive without considering the case of the Writ Petitioner. Question naturally arises as to whether it was appropriate on the part of the Corporation to go for fresh tender when the tender documents of the lowest tenderer were defective and the negotiation with them became abortive without considering the case of the Writ Petitioner. Law as on today is that the authority floating tender will have to consider only those bids which are valid and in accordance with the requirement of the NIT. Negotiation is permissible only with the valid tenderers. In the instant case, the Corporation considered the case of M/s. Deep Enterprise and, thereafter, closed the matter. M/s. Deep Enterprise submitted invalid tender documents. Therefore, the Corporation was not authorised by law to have any negotiation with M/s. Deep Enterprise. It was open to them to initiate negotiation only with the lowest valid tenderer. The Corporation was, therefore, under an obligation to initiate negotiation with the Writ Petitioner as he was the lowest valid bidder. 9. Mrs. A. Hazarika, learned Counsel for the Corporation submitted that the Corporation considered the case of the lowest tenderer even though invalid because of the circular dated 18.11.98 issued by the Chief Vigilance Commissioner. Mr. Purkayastha, learned Counsel, however, disputed the contention of Mrs. Hazarika and submitted that the circular did not contemplate negotiation with any invalid tenderer. According to Mr. Purkayastha, negotiation as per circular of the Chief Vigilance Commissioner was meant to be only with the lowest valid tenderer. It would be appropriate at this stage to refer to the circular issued by the Chief Vigilance Commissioner. The relevant portion of the circular reads as follows: Tenders are generally a major source of corruption. In order to avoid corruption, a more transparent and effective system must be introduced. As post tender negotiations are the main source of corruption, post tender negotiations are banned with immediate effect except in the case of negotiations with LT (i.e., Lowest Tenderer). 10. It would appear from above that the Chief Vigilance Commissioner issued the aforesaid circular to prevent misuse of administrative powers in the matter of award of contract and, with a view to ensure a more transparent and effective system, banned negotiations after the tender documents were received except negotiation with the lowest tenderer. 10. It would appear from above that the Chief Vigilance Commissioner issued the aforesaid circular to prevent misuse of administrative powers in the matter of award of contract and, with a view to ensure a more transparent and effective system, banned negotiations after the tender documents were received except negotiation with the lowest tenderer. The word "lowest tenderer" occurring in the circular cannot be interpreted as the lowest invalid tenderer as this will frustrate the very purpose for which the circular was issued. Experience suggests that unbridled powers of the administrative authority in awarding contracts are misused for initiating negotiations on pick and choose method. 11. It appears that the Corporation misinterpreted the circular issued by the Chief Vigilance Commissioner. Their decision to go for fresh tender was a mistake committed due to improper interpretation of the circular. The right of the Petitioner who was the lowest valid tenderer for consideration of his bid for award of the contract has, thus, stood infringed. In the given situation, it was obligatory on the part of the Corporation to consider the rate quoted by the Writ Petitioner. 12. The Writ Petitioner submitted a representation on 8.4.2002 (Annexure 3 to the Addl Affidavit) requesting for consideration of his tender offer. The Writ Petitioner also reduced his rate to 340% above the scheduled rate. This representation has not been considered by the Corporation of reasons not discernable. 13. Mrs. Hazarika, learned Counsel for the Corporation argued that the Writ Petitioner submitted his tender documents in pursuance of the tender notice dated 11.3.2002 and having participated in the tender process, he is not entitled to challenge the legality of the second tender. Petitioner's right, according to Mrs. Hazarika, if any, stood waived by his subsequent conduct. According to the learned Counsel, the principle of waiver and estoppel would operate as a bar in Petitioner's claim for consideration of his tender documents at this stage. Mrs. Hazarika further argued that the Writ Petitioner did not disclose in the petition that he had submitted tender documents in response to the second tender notice and, as such, he is not entitled to any relief. On 2.4.2002, the Petitioner approached this Court and filed the writ petition challenging the decision of the authority to go for fresh tender. Mrs. Hazarika further argued that the Writ Petitioner did not disclose in the petition that he had submitted tender documents in response to the second tender notice and, as such, he is not entitled to any relief. On 2.4.2002, the Petitioner approached this Court and filed the writ petition challenging the decision of the authority to go for fresh tender. The Petitioner was taken up only on 4.4.2002 and the Court by the order passed on the same date restrained the Respondent Corporation from passing final order of allotment without leave of this Court. This order was passed on the last day fixed for submission and opening of the tenders. The Writ Petitioner, hanging in uncertainty submitted tender papers in pursuance of the second tender notice. Mr. Purkayastha, learned Counsel clarified that the order passed by this Court on 4.4.2002 was communicated to the Writ Petitioner over phone and the Writ Petitioner immediately informed the Respondent Nos. 2 and 3 about the order passed by the Court. Despite that, the Corporation proceeded with the tender process. The situation became compelling to the Petitioner to file his papers. 14. It would appear from above that the Writ Petitioner approached the Court before he had submitted his tender documents in pursuance of the second tender notice. The uncertainty in listing of the case and attitude of the authority prompted him to submit tender documents at the last moment as an abundant precaution. Therefore, this act on his part in submitting tender documents cannot be said to be voluntary. It cannot be judged in isolation. His participation under the circumstances indicated above is an exception since time was running out for him. True ignorance of law is not an excuse, but knowledge of law can not always be fatal. Each case has to be judged on its own merits. 15. In United Assam Co. v. State of Assam and Ors. 1999 (3) GLT 288:(2000) 1 GLR 17 relying upon the decision of the Apex Court in Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd. and Ors. , reported in 1997 (2) GLT 1, this Court held that private negotiations must be made with all eligible persons and for that purpose one cannot be picked up to the exclusion of Ors. . This Court again in Purbottar Trade and Marketing Co-operative Society Ltd. v. State of Assam and Ors. , reported in 1997 (2) GLT 1, this Court held that private negotiations must be made with all eligible persons and for that purpose one cannot be picked up to the exclusion of Ors. . This Court again in Purbottar Trade and Marketing Co-operative Society Ltd. v. State of Assam and Ors. (2002) 1 GLR 434held that the administrative authority while awarding contract must have the right to choose the best tenderer and at the best rate and the authority may also take into account the capacity of the tenderer as to whether the tenderer would be able to complete the job or not. Holding thus, the Court observed that in a situation where tenders of Ors. were rejected, the authority can have a negotiation with the person whose tender was accepted in a fair and transparent manner. 16. The decision referred to above clearly indicate that private negotiation is permissible with the valid tenderers and once the authority decide to go for negotiation, they will have to do it with all the valid tenderers. The decisions in the above two cases have been based on the ratio from the decision of the Hon'ble Supreme Court. It is, therefore, clear that the Respondent Corporation erred in law in falling to initiate negotiation with the Writ Petitioner. 17. The question whether the instant petition is barred by the principles of waiver and estoppel has to be answered in the back drop of this case. It is stated hereinbefore that the Writ Petitioner approached the Court before submission of the tender documents and the uncertainty that prevailed in the matter of listing his case compelled him to file the tender documents as an abundant precaution. It is not that he was not aware of the law that submission of tender documents in pursuance of the second tender notice may disentitle him from enforcing his right arising out of the first tender notice. The situation was pressing, and he had acted just as a man of ordinary prudence would have. In my opinion, this act on the part of the Writ Petitioner cannot be a ground for rejecting his prayer for consideration of his tender papers submitted in pursuance of the earlier tender notice. 18. Mr. A.K. Purkayastha, learned Counsel submitted that the principles of waiver and estoppel are not available against fundamental rights. In my opinion, this act on the part of the Writ Petitioner cannot be a ground for rejecting his prayer for consideration of his tender papers submitted in pursuance of the earlier tender notice. 18. Mr. A.K. Purkayastha, learned Counsel submitted that the principles of waiver and estoppel are not available against fundamental rights. In support of his submission, he has relied upon the decision of the Apex Court in Olga Tellis and Ors. v. Bombay Municipal Corporation and Ors. AIR 1986 SC 180 ; Provash Chandra Dalui and Anr. v. Biswanath Banerjee and Anr. AIR 1989 SC 1834 , M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and Ors. (1979) 2 SCC 409 and P.R. Deshpande v. Maruti Balaram Haibatti (1998) 6 SCC 507 . 19. In the case of Olga Tellis(supra) the Hon'ble Supreme Court emphatically held that there cannot be an estoppel against the constitution. In para 29 of the said judgment, the Supreme Court held as follows: The plea of estoppel is closely connected with the plea of waiver, the object of both being to ensure bonafides in day-to-day transactions. In Basheshwar Nath v. Commissioner of Income Tax, Delhi ((1959) Supp. (1) SCR 528 : AIR 1959 SC 149 ), a Constitution Bench of this Court considered the question whether the fundamental rights conferred by the Constitution can be waived. Two members of the Bench (Das. C.J. and Kapoor. J.) held that there can be no waiver of the fundamental rights founded on Article 14 of the constitution. Two Ors. (N.H. Bhagwati and Subba Rao, JJ.) held that not only could there be no waiver of the right conferred by Article 14, but there could be no waiver of any other fundamental right guaranteed by Part III of the Constitution. The Constitution makes no distinction, according to the learned Judges, between fundamental rights enacted for the benefit of an individual and those enacted in public interest or on grounds of public policy. 20. In Provash Chandra Dalui (supra), the Supreme Court dealt with the question relatable to waiver of legal rights. In that context the Supreme Court held that the essential element of waiver is that there must be a voluntary and intentional relinquishment of a known right or such conduct which lead to the inference of the relinquishment of such right. 20. In Provash Chandra Dalui (supra), the Supreme Court dealt with the question relatable to waiver of legal rights. In that context the Supreme Court held that the essential element of waiver is that there must be a voluntary and intentional relinquishment of a known right or such conduct which lead to the inference of the relinquishment of such right. The ratio available in Olga Tellis (supra) and in Provash Chandra Dalui (supra) considered together against the backdrop of the instant case lead to the irresistible conclusion that the Petitioner did not relinquish his right to vindicate his grievances arising out of non-consideration of his case by the authority by filing tender paper in the second tender process. 21. In M/s. Motilal Padampat Sugar Mills Col Ltd. (supra) the Hon'ble Supreme Court held that the waiver is a question of fact and it must be properly pleaded and proved. Again in P.R. Deshpande (supra) the Supreme Court held that the doctrine of approbate and reprobate cannot operate where statutory rights or liabilities are involved. 22. The decisions of the Apex Court referred to above clearly show that principle of estoppel is a matter of fact and it will not operate against any legal or constitutional right. The factual background of the case at hand clearly show that the circumstances in which the Petitioner took part in the second tender process was extraordinary and, therefore, cannot be dubbed as voluntary relinquishment of his right that accrued under the first tender process. Hence, the principles of estoppel, waiver etc. will not apply in this case. 23. In the result, the Writ Petition is allowed. The Respondent authority is directed to consider the tender offered by the Petitioner in pursuance of the first tender notice dated 14.12.2001 and to take appropriate decision in accordance with the provisions of law. In the event the negotiation fails, the authority may proceed with the tender process initiated subsequently. 24. No cots. Petition allowed.