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2003 DIGILAW 191 (GAU)

Saurabh Das v. Gauhati Municipal Corporation

2003-05-06

RANJAN GOGOI

body2003
ORDER Ranjan Gogoi, J. 1. All the three writ petitions having raised common questions of law on more or less identical facts were heard together and are being disposed of by this common judgment and order. 2. I have heard Mr. S. Kataki and Mr. A. M. Buzarbaruah, learned counsel for the petitioners in WP (C) 2194/2003 and 2398/03 respectively. None has appeared on behalf of the petitioner in WP (C) 2350/03. Mr. G. K. Bhattacharyya, learned Sr. Counsel appearing for the private Respondents in all the cases as well as Mr. B. M. Sarma, learned counsel appearing on behalf of the Gauhati Municipal Corporation has also been heard. 3. The facts, in brief, may be noted at the outset. By a notice dated 8-2-03 the Commissioner, Gauhati Municipal Corporation invited tenders for settlement of as many as 10 different markets under the jurisdiction of the Gauhati Municipal Corporation (hereinafter referred to as the Corporation) for the year 2003-2004. In the present set of cases, the relevant market in question is the Beltola Bi-Weekly Market. Pursuant to the notice inviting tenders issued, as many as 15 tenderers submitted their respective bids. The petitioner in WPC 2194/03 Shri Saurabh Das having quoted an amount of Rs. 30,99,999.00 was the 4th highest tenderer. The petitioner in WPC 2350/03 Shri Dipak Kumar Saikia having quoted an amount of Rs. 27,99,999.00 was the 7th highest tenderer whereas the petitioner in the third writ petition, i.e. WPC 2398/03 Shri Pawan Chandra Boro was the third highest tenderer, he having quoted an amount of Rs. 32,50,555.00. The market in question was settled by the authority in favour of the private Respondent Shri Bhubanjyoti Rabha by an order dated 13-3-2003. As the aforesaid settle, Shri Bhubanjyoti Rabha, had quoted an amount of Rs. 26,21,876.00, these writ petitions have been filed assailing the order dated 13-3-2003 on the short ground that the authority of the Corporation had gone wrong in rejecting the higher offer made by the writ petitioners and in preferring the private respondent for settlement of the market bypassing the claims of the writ petitioners. 4. The case projected on behalf of the writ petitioners, as noticed above, has been sought to be countered by the official respondents by filing a counter affidavit. 4. The case projected on behalf of the writ petitioners, as noticed above, has been sought to be countered by the official respondents by filing a counter affidavit. The case put forward by the respondents in the affidavit filed appears to be that the authority of the Corporation had received several complaints, with regard to extortion, from the users of the market during the previous lease which was co-incidentally granted to the writ petitioner in WPC 2350/03. According to the authorities, the principal reason behind such extortion by the previous lessee and/or his nominees was on account of the high rate at which the market was settled and, therefore, to avoid repetition of such acts of extortion for the present term of the market, it was decided that a proportionate/reasonable offer would be at a rate double the estimated value of the market as mentioned in the notice inviting tender. As the estimated value was fixed at Rs. 15,00,000/-, an amount of Rs. 30,00,000/- was considered to be an appropriate bid and on the said basis an order was passed for grant of settlement/contract in favour of one Sauravi Das, the sixth highest tenderer, who had offered an amount of Rs. 28,99,999/-. An order granting the contract in favour of aforesaid Sauravi Das is stated to have been issued by the Respondents, but as the requisite pre-deposits were not forthcoming, the authority proceeded to consider the case of the next person in the line, i.e. Shri Dipak Kumar Saikia, the petitioner in WPC 2350/03. As in the tender of aforesaid Dipak Saikia, the name of his father was mentioned differently from the name given by the said person in the tender submitted for the previous term of the market, the authority bypassed the claims of Shri Dipak Saikia and instead granted the contract in favour of the 8th highest tenderer Shri Bhubanjyoti Rabha, i.e. the private Respondent in all the cases. The rejection of the higher offers made by the concerned tenderers including the writ petitioners were contended, in the aforesaid facts, to be for good and sufficient reasons and the power to so act has been sought to be traced to Clause 7 of the terms and conditions appended to the notice inviting tenders. The rejection of the higher offers made by the concerned tenderers including the writ petitioners were contended, in the aforesaid facts, to be for good and sufficient reasons and the power to so act has been sought to be traced to Clause 7 of the terms and conditions appended to the notice inviting tenders. It is further contended, in the affidavit filed that the process of settlement/grant of the contract was a fair, transparent and reasonable process dictated by public interest and no extraneous or collateral reasons are discernible in the decision making process to warrant interference of this Court with the impugned order dated 13-3-2003. This has also been in the broad basis on which the arguments have been advanced orally by Mr. B. M. Sarma, learned counsel for the Corporation, who has also placed before the Court the relevant records showing the manner in which the decision Has been arrived at. 5. The oral arguments advanced on behalf of the writ petitioners is a common one. Tenders were invited for as many as 10 different markets and in granting settlement of all the other markets, the highest bidders have been chosen. The grounds on which the higher bids made in the instant case were sought to be brushed aside were not applied in the settlement of the other markets. Learned counsel for the petitioners have further argued that if double the estimated value as mentioned in the notice inviting tenders, was considered to be the appropriate, reasonable and proportionate amount for settlement of the market, the said fact ought to have been mentioned in the Notice Inviting tenders. As the notice inviting tenders is silent on the said aspect of the matter, the petitioners have been taken by surprise and settlement has been made on fortuitous facts. The essence of a tender process is competitive bidding, it is argued, and the wholesome principles of competitive bidding have been thwarted by the subsequent and unilateral adoption of what was considered to be a reasonable/proportionate rate. The essence of a tender process is competitive bidding, it is argued, and the wholesome principles of competitive bidding have been thwarted by the subsequent and unilateral adoption of what was considered to be a reasonable/proportionate rate. Reliance has been placed on a decision of the Apex Court in the case of Dutta Associate Pvt. Limited v. Indo Mercantile Pvt. Ltd. reported in decision of this Court in the case of Imtiaz All v. State of Assam, reported in : (2000) 1 GLT 573 in support of the proposition that any proportionate or reasonable rate ought to have been pre-set by the authority by due publication in the notice inviting tenders. 6. The power of the authority to refuse to accept the highest or a higher offer in a tender process must always be recognized. Time and again. It has been held by the Apex Court that price is only one of the factors and the choice of the successful tenderer must be made on an overall consideration of very many other relevant facts and circumstances. However, rejection of a higher offer cannot be arbitrary and good and valid grounds must be shown for preferring a lower bid/offer, in the event, the decision is challenged before a Court of law. 7. In the Instant case, the reasons for the refusal of the authority to accept the higher offer of the petitioners, as stated in the affidavit filed, has already been noted. The records in original placed before the Court including the order of the Administrator passed in this regard would go to show that the learned Administrator, on 7-3-03, took the decision that in view of the allegations of extortion during the previous term of the lease, the market ought not to be settled at any amount more than double the estimated value as mentioned in the notice inviting tenders. It is on the said basis that all the offers exceeding Rs. 30,00,000/- Including an offer of Rs. 30,07,403.00 by one Ritu Raj Hazarika were Ignored and settlement of the market that was made with the 6th highest tenderer Smt. Suravi Das. It is on the said basis that all the offers exceeding Rs. 30,00,000/- Including an offer of Rs. 30,07,403.00 by one Ritu Raj Hazarika were Ignored and settlement of the market that was made with the 6th highest tenderer Smt. Suravi Das. As the said 6th highest tenderer has failed to make the necessary pre-deposits within the time fixed and as the 7th highest tenderer, i.e. the writ petitioner in WPC 2350/03 was found to be unsuitable on account of certain discrepancies in his tender papers as already noticed, settlement of the market was made with the 8th highest tenderer, i.e., the Private Respondent. 8. The contours of the writ power in a matter of grant of State largesse is fairly settled and would hardly require a re-narration. The question really is one of correct application of the settled principles of law. Interference must be made only for strong and compelling reasons and maximum leverage and autonomy must be conceded to the authority to act as it thinks fit. Only if the decision taken is logically outrageous or if the decision making process is vitiated by lack of fairness and transparency or if undue favour has been conferred, interference with the decision would be justified; otherwise, the judgment of the decision maker must be allowed to hold the field. 9. In the instant case, surely, if an exercise was necessary to combat the menace of extortion, the authority was not powerless to ensure what it desired without sacrificing the sacrosanct principle of competitive bidding. Cancellation of the lease granted, a power available, under the term's and conditions of the lease and effective policing would have been more logical steps to ensure that no extortion takes place. Even assuming that the writ Court would not substitute its judgment in place of that of the authority in such matters, the next question that would arise is whether double the estimated value, i.e. Rs. 30,00,000/- was a dividing line, that in no case, could be crossed so as to enable the authority to ignore the bid of Rs. 30,07,403.00 and opt to prefer a bid of Rs. 28,29,221.00 made by Smt. Suravi Das. That the person who had offered the bid of Rs. 30,00,000/- was a dividing line, that in no case, could be crossed so as to enable the authority to ignore the bid of Rs. 30,07,403.00 and opt to prefer a bid of Rs. 28,29,221.00 made by Smt. Suravi Das. That the person who had offered the bid of Rs. 30,07,403.00 is not before this Court, an argument offered on behalf of the Respondents, cannot be a sufficient reason to deter the Court for satisfying itself regarding fairness of the process leading to the decision. The decision of the authority noted above being in apparent defiance of acceptable logic cannot have the approval of this Court. 10. Notwithstanding the conclusions recorded in the preceding paragraphs, this Court in order to finally resolve the dispute raised would like to examine the correctness of the actions of the authority in working out what it considered to be a proportionate or reasonable rate, in the facts already noticed. In the case of Dutta Associate (supra), tenders were invited for supply of rectified spirit to the Government warehouse at Tinsukia, 17 tenderers participated quoting different rates per L.P.L. Thereafter, the settling authority worked out a viability range of the offers and proceeded to make settlement on the said basis. Though there are certain noticeable differences as to how the matter was proceeded with after working out the viability rate, it would be sufficient for this Court to notice that the Apex Court had disapproved of the fixation of a viability rate or range without publishing the same in the notice inviting tenders. Such unilateral action, after tenders were received, was held by the Apex Court not to be in consonance with the fair and transparent process by which State largesse has to be granted. Following the decision of the Apex Court, in the case of Dutta Associates (supra), this Court in the case of Imtiaz Ali (supra) also disapproved of the action of the authority of the Anchalik Panchayat in settling a market in favour of a lower bidder by subsequently working out a range within which the bids received were considered to be reasonable. 11. The facts of the present case are not substantially different. 11. The facts of the present case are not substantially different. If the authority of the Corporation felt that any bid exceeding double the estimated value of the contract would be unreasonable, the tenderers should have been put to notice of the said fact by due publication in the notice inviting tenders. Instead what has been done is that after the tenders were received, such a decision was taken and the higher offers made by the petitioners were excluded. The decision making process was not only subversive of the principles of open and competitive bidding which is the essence of the tender process but there was an inherent probability of abuse of the process which, naturally, would effect its reasonableness and fairness. The procedure adopted must, therefore, held to be in derogation of the rights of the petitioners to fair treatment. 12. For the aforesaid reasons, this Court is left with no option but to conclude that the settlement made with the private Respondent by the impugned order dated 13-3-2003 stands vitiated. Consequently, for the aforesaid reasons, the Impugned order dated 13-3-2003 stands set aside and quashed and the writ petitions stand allowed. 13. Before parting, this Court would like to put on record that the present order does not disclose any consideration of the validity of the grounds for by-passing the claims of the Writ Petitioner in W.P. (C) 2350/2003, Shri Dipak Kumar Saikia while granting the contract in favour of the private Respondent, inasmuch as, the said Writ Petitioner not being represented before this Court at the time of arguments, this Court reasonably understands the petitioner in W.P.(C) 2350/2003 not to be aggrieved by the said actions. Petition allowed