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Orissa High Court · body

2003 DIGILAW 157 (ORI)

P. D. Agarwall v. General Manager, N. T. P. C.

2003-02-21

A.K.PATNAIK, P.K.MISRA

body2003
ORDER 21.2.2003 — Heard Mr. D. Nayak, learned counsel for the petitioner and Mr. B.S. Tripathy, learned counsel for opp.parties 1 and 2. Although notice was directed to be served on opp.party No.3 by special messenger, and as per the S.R., notice on the said opp.party has been returned after valid service by the special messenger and has been treated as sufficient, no one has appeared for opp.party No.3. 2. The National Thermal Power Corporation (for short, the N.T.P.C.), Talcher Super Thermal Power Station, invited tenders for construction of 144 units of ‘B’ type quarters in permanent township in Package No.II. In the said notice inviting tenders, the estimated cost of the aforesaid item of work was Rs.357.68 lakhs. In response to the notice inviting tenders, the petitioner and opp.party No.3 (National Project Construction Corporation) amongst others, submitted their tenders. The tender of the peti¬tioner was the lowest at Rs. 5,06,41,486.48 whereas the tender of opp. party No. 3 was at Rs. 5,34,31,583. 28. The Tender Committee of the N.T.P.C. has, however, recommended to award the work to opp.party No.3. Aggrieved, the petitioner has filed this writ petition. 3. In the preliminary counter affidavit filed on behalf opp.parties 1 and 2, the stand taken is that although the tender of the petitioner was the lowest, opp.party No.3, which is a Central Government Public Sector Undertaking, was entitled to a purchase preference of 10%, as per the decision of the Government of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises. 4. The Officer Memorandum dated 14.04.2002 of the Govern¬ment of India, Ministry of Heavy Industries and Public Enter¬prises, Department of Public Enterprises, which contains the said decision of the Government of India for giving purchase prefer¬ence for products and services of Central Public Sector Enter¬prises, is extracted herein below :- “Government have decided to extend the existing purchase preference policy for products and services of central public Sector enterprises (CPSEs) for two more years from 1.4.2002 to 31.3.2004. Under the policy, if the price quoted by the public Sector enterprise is within 10 % of the lowest price in a tender, other things being equal, purchase preference may be granted to the CPSE concerned at the lowest valid price bid. The policy has the following provisions : The 10 % purchase preference would be extended to tenders/NIT of rupees five crores and above. The policy has the following provisions : The 10 % purchase preference would be extended to tenders/NIT of rupees five crores and above. CPSEs registered under the Companies Act, 1956 and statutory CPSEs will be eligi¬ble for purchase preference as before. Joint venture companies where holding of Government and/or CPSEs is 51 % or more and joint ventures which are subsidiaries of CPSEs with CPSEs holding 51 % equity or more will be eligible for purchase preference. A minimum value addition of 20 % by the CPSEs/Joint Venture Units by way of manufacture and/or services would be a prerequi¬site for availing purchase preference. Ministries/Departments/CPSEs and autonomous bodies under Central Government will continue to grant purchase preference to CPES. Purchase preference will also be available to only those privatized CPSEs where specific Government approval has been accorded for the specific periods from the date of disinvestment. Respective Ministries/Departments autonomous bodies/CPSEs will be responsible for implementing the Purchase Preferences Policy. As per the existing policy the provisions relating to pur¬chase preference should be specified in the Notice Inviting Tender (NIT) for rupees five crores and above. For any deviation including exclusion of the purchase preference clause from the NIT, it will be obligatory for the concerned Ministry/Department/CPSEs/autonomous bodies to obtain prior exemption from the Cabinet in consultation with the Department of Public Enterprises. Other provisions of the purchase preference policy remain unaltered.” It would be clear from the aforesaid Officer Memorandum of the Government of India, Ministry of Heavy Industries and Public Enterprises that 10 % purchase preference is to be extended to the tender/NIT of Rs.5 crores and above. 5. According to the petitioner, since the estimated cost of the item of work was indicated in the NIT at Rs.357.68 lakhs, the value of the tender was less than Rs.5 crores and the 10 % purchase preference for Public Sector Enterprises was not avail¬able in the present case. On the other hand, according to oppo¬site parties 1 and 2, since the tender of the petitioner, the lowest tender was more than Rs.5 crores, the 10 % purchase preference was applicable to the present case and if such 10 % purchase preference was given to opp.party No.3, the offer of opp.party No.3 would be lower than that of the petitioner. Thus, while the case of the petitioner is that the NIT or the tender papers should have indicated the tender value to be more than Rs.5 crores in order to make the purchase preference policy for products and services of central public sector enterprises ap¬plicable, the case opp.parties 1 and 2 is that so long as the lowest offer made pursuant to the NIT was Rs.5 crores or more, the 10 % purchase preference for products and services of public Sector enterprises could be applied as per the Office Memorandum dated 14.06.2002. 6. In the detailed NIT, the following clause is inserted :- “IN THE EVALUATION AND COMPARISON OF BIDS, NTPC RESERVES THE RIGHT TO ALLOW PURCHASE PREFERENCE TO CENTRAL PUBLIC SECTOR ENTERPRISES (CPSES) AND JOINT VENTURES WITH CPSES AS ADMISSIBLE UNDER THE EXISTING POLICY OF THE GOVERNMENT OF INDIA.” A reading of the aforesaid clause indicate that the intend¬ing tenderer had been put to notice by the aforesaid clause that for valuation and comparison of bids, the NTPC has the right to allow purchase preference to central public sector enterprises and joint ventures as admissible under the existing policy of the Government of India. But the provisions of existing policy of the Government of India for such purchase preference to central public sector enterprises was not indicated in detail in the notice inviting tenders. This, in our opinion, was not in accord¬ance with the Office Memorandum dated 14.06.2002 of the Govern¬ment of India, Ministry of Heavy Industries and Public Enter¬prises, which clearly stipulated that the provisions relating to purchase preference should be specified in the notice inviting tenders for Rs.5 crores and above. The purport of the aforesaid requirement in the Office Memorandum dated 14.06.2002 is that all intending tenders should be put to notice about the exact provi¬sions relating to purchase preference for Rs.5 crores and above so that they could submit their offers/bids accordingly. This would ensure fairness in procedure in the matter relating to submission of the tenders and acceptance of tenders. As has been held by the Supreme Court in Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd.; (1997) 1 Supreme Court Cases 53 :- “..... whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in the tender notice. As has been held by the Supreme Court in Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd.; (1997) 1 Supreme Court Cases 53 :- “..... whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in the tender notice. The consideration of the tenders received and the proce¬dure to be followed in the matter of acceptance of a tender should be transparent, fair and open.” 7. In the present case, the provisions relating to pur¬chase preference were not specified in the notice inviting ten¬ders. The notice inviting tenders put the estimated cost of the construction at Rs.357.68 lakhs. Had the notice inviting tenders clearly indicated that in case the bid amount of the lowest bidder was Rs.5 crores or more, the purchase preference for products and services of central public sector enterprises, as per the policy of the Government of India, would apply, the tenderer would have submitted their tenders accordingly, and the competition between the tenderers and the central public sector enterprises would have been open, fair and transparent. Since the policy regarding purchase preference for central public sector undertaking has not been specified in the datailed NIT, the entire tender process is unfair and although the petitioner has quoted the lowest bid, now the Tender Committee has recommended for award of the tender to opp.party No.3, a central public sector undertaking, by applying the policy of purchase preference as per the Office Memorandum dated 14.06.2002. 8. We, therefore, quash the recommendation of the Tender Committee and leave it open to opp.parties 1 and 2 either to decide on the tenders without applying the policy of purchase preference as per the Office Memorandum dated 14.06.2002 or to retender the item of work keeping in mind the requirements of the aforesaid Office Memorandum and the law as discussed above. The writ petition is disposed of accordingly. Urgent certified copy of this order be supplied on proper application. Petition disposed of.