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2003 DIGILAW 197 (CAL)

Electro India v. State of West Bengal

2003-04-22

MAHEMMAD HABEEB SHAMS ANSARI

body2003
Judgment When the matter was moved before Court Jayanta Kumar Biswas, J. passed an interim order dated February 26, 2003 and also direction for affidavits. 2. For the sake of convenience, a relevant portion of the said order dated February 26, 2003 is extracted hereunder to avoid re-petition of facts leading to the filing of the instant application:- "The Superintending Engineer, Electrical Circle No. II of the Public Works Department of the Government of West Bengal had invited tenders for installation of compound lighting in the Judicial Complex at Kalyani, in the District of Nadia. The tenders had been invited under Notice No.7/T of 2000-2001 issued by his Memo No. 181/1 (16) dated 13th February, 2001. The writ petitioner duly submitted tender in response to the said notice; on opening the tenders the writ petitioner was found suitable and it was selected for the work. By his letter dated 22nd March, 2002 (Annexure P-2) the Superintending Engineer informed the writ petitioner that after complying with the formalities indicated therein it should take up the work and complete the same within the stipulated period of three weeks from the date of layout. The petitioner's case is that in spite of complying with all the formalities as directed by the authority, he was not allowed to start the work for undisclosed reasons. It is the further case of the petitioner that in spite of several representations including the ones dated 18th July, 2002 and 6th August, 2002 (Annexures P-4 and P-5 respectively), the respondents did not allow the petitioner to start the work, or disclose the reasons for not allowing the writ petitioner to start the work. While the things were laying at the abovementioned stage, the Superintending Engineer issued a fresh notice on 18th February, 2003 inviting tenders for the self same work. Such notice has been published in the newspaper (Annexure P-6). Challenging such fresh notice inviting tenders for the self same work the present petition has been filed by the writ petitioner. The petitioner contends that without cancellation of its lawful selection, the respondent authorities cannot invite fresh tenders for the self same work. The petitioner has further contended that both the inactions and actions of the respondents are arbitrary and unfair. The petitioner contends that without cancellation of its lawful selection, the respondent authorities cannot invite fresh tenders for the self same work. The petitioner has further contended that both the inactions and actions of the respondents are arbitrary and unfair. The learned Advocate for the petitioner prays for admission of the writ petition and interim order for restraining the respondents from proceeding any further with the notice inviting fresh tenders for the same work. Mr. Mukherjee appearing for the Superintending Engineer, the respondent No. 2 has disputed the correctness of the contentions raised by the petitioner in the writ petition. He submits that the petitioners selection for the work had stood automatically cancelled and lapsed, because the petitioner had failed to comply with the directions given by the Superintending Engineer by said letter dated 22nd March, 2002. Mr. Mukherjee submits that the petitioner did not file the copy of the agreement in spite of direction given for the same. Mr. Mukherjee submits that he, however, is not in a position to produce any document to show that the petitioner had been informed about the cancellation and/or lapse of the petitioner's selection. He is also not in a position to produce any record to show that the petitioner's representations annexed to the petition were in any manner replied to by the respondents. It is further submitted by Mr. Mukherjee that the notice dated 18th February, 2003 inviting fresh tenders does not relate to the same work for which the petitioner had been selected earlier. Mr. Mukherjee's last contention at this stage is that the work order in terms of the fresh notice inviting tenders has already been issued in favour of the selected tendered. He is, however, not in a position to produce any document to show that the work order has already been issued in terms of the impugned notice inviting tenders." 3. In the affidavit-in-opposition filed on behalf of the respondent No.2, it is admitted that open tender was invited on February 13, 2001 being tender notice No.7/T of 2000-01. It is also admitted that the petitioner was the lowest tenderer. It is stated that letter of provisional acceptance/order was issued in favour of the writ petitioner with a request to make contract agreement by submitting form WBF No. 2911 (ii). It is also admitted that the petitioner was the lowest tenderer. It is stated that letter of provisional acceptance/order was issued in favour of the writ petitioner with a request to make contract agreement by submitting form WBF No. 2911 (ii). As the petitioner did not comply with the terms of the aforesaid letter Annexure P-2, action was taken by respondents as per Rule 230 (5) of the P.W.D. Code. It is, therefore, the contention of the respondents and as strenuously urged by Mr. Mukherjee, their learned Counsel that in terms of the said rule, the provisional letter of acceptance stood automatically cancelled by efflux of time. 4. It is further stated in the affidavit-in-opposition that a fresh tender was invited with changed technical specification as per changed design made by the planning wing of P.W.D. which in no way match with the previous specification of earlier NIT No.7/T of 2000-01. The fresh tender notice is restricted to enlisted of Class I/II electrical contractors of P.W.D. as the financial limit in participation of tender has been increased upto Rs.4 lakhs and Rs.2.5 lakhs for Class I/II electrical contractors. 5. There is thus no dispute that the petitioner was selected being the lowest tenderer in respect of the tender notice No.7/T of 2000-01. The reasons for calling for fresh tender, it was contended on behalf on the respondent authority by Mr. Mukherjee is that as in terms of Rule 230 (5) of the P.W.D. Code, petitioner did not comply with the terms contained in Annexure P-2, the letter of acceptance stood automatically cancelled by efflux of time. 6. Therefore, the only question for consideration in the instant writ application is as to whether the aforesaid action of the respondent authority is in accordance with law or whether the same is arbitrary. It is dependent upon the answer to the aforesaid question that the question as to whether the respondent authorities are entitled to call for fresh tender can be decided. 7. From the pleadings as also from the-submissions made at the Bar, it is apparent that the respondent authority has taken the impugned action in terms of Rule 230 (5) of the Code and not in terms of any of the conditions specified in the notice inviting tender. This is evident from the fact that Mr. 7. From the pleadings as also from the-submissions made at the Bar, it is apparent that the respondent authority has taken the impugned action in terms of Rule 230 (5) of the Code and not in terms of any of the conditions specified in the notice inviting tender. This is evident from the fact that Mr. Mukherjee is not able to point out any of the clauses in the NIT 7/T of 2000-01 pursuant to which the impugned action of respondent authority can be sustained. Apposite in this connection are the following observations of the Supreme Court in B.S. Minhas v. India Statistical Institution, 1983 (4) SCC 582 wherein after noticing its earlier judgment in R.D. Shetty v. International Air Port Authority, 1979 (3) SCC 489 , it was held :- "It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be Judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurter in Vitarelli v. Seaton, 359 US 535: 3 Led 2d 1012 (1959) where the learned Judge said: An executive agency must be rigorously held to the standards by which it professes its action to be Judged ............. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed .................... This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword. The aforesaid principle laid down by Mr. Justice Frankfurter in Vitarelli v. Seaton {359 US 535 : Led 2d 1012 (1959)} has been accepted as applicable in India by this Court in Amarjit Singh Ahluwalia v. State of Punjab, 1975 (3) SCR 82 and in subsequent decision given in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvansh, 1975 (3) SCR 619 . Mathew, J. quoted the above-referred observation of Mr. Justice Frankfurter with approval" 8. Judged in the light of the above, the impugned action cannot be sustained. Mathew, J. quoted the above-referred observation of Mr. Justice Frankfurter with approval" 8. Judged in the light of the above, the impugned action cannot be sustained. However, as the impugned action is sought to be sustained on the ground of Rule 230(5) of the P.W.O. Code, it is assumed for the purpose of this proceeding that as contended by Mr. Mukherjee relying upon the judgment of the Supreme Court in B.S. Minhas v. Indian Statistical Institute & Ors., 1983(4) SCC 582 , the rules contained in the P.W.D. Code are administrative instructions for guidance of the officers of State and are thus binding upon them. 9. As much reliance has been placed upon Rule 230 (5) of the P.W.D. Code, the same is extracted hereunder:- "230 (5) : The successful tenderer in the open tenders, who has deposited an earnest money at 2 percent as in sub-rule (4), shall. within 7 days of the receipt of an intimation sent to him by registered post, to the effect that his tender has been accepted, deposit an additional sum which together with the 2 per cent of the earnest money, will amount to 5 per cent of the cost as per tendered rates of the works for which the tender has been accepted. Failing to deposit this additional sum within the period specified above, the earnest money shall forthwith stand forfeited to Government and the letter of acceptance of the tender will be considered• as automatically cancelled." 10. The NIT in question prescribed earnest deposit of Rs.3,205/- and the period stipulated being three weeks, petitioner complied with the same. There is no condition in the NIT that the successful tenderer should deposit additional sum to make up the earnest money amount to 5 per cent of the cost of tender rates. It was for the respondent authority to have incorporated the said conditions in the NIT before justifying the action for automatic cancellation. The respondent authority not having incorporated such conditions in the NIT nor even demanding such payment from the petitioner at any time cannot sustain their stand of automatic cancellation on Rule 230 (5). Even in Annexure P-2 letter of provisional acceptance no such demand for additional earnest money deposit has been raised. 11. Mr. The respondent authority not having incorporated such conditions in the NIT nor even demanding such payment from the petitioner at any time cannot sustain their stand of automatic cancellation on Rule 230 (5). Even in Annexure P-2 letter of provisional acceptance no such demand for additional earnest money deposit has been raised. 11. Mr. Jiban Ratan Chatterjee, learned Counsel for the petitioner relying upon PW accounts and rules and procedures referred to Chapter 'K' thereof and Clause 1 which to the extent relevant is extracted hereunder:- "Clause 1: Clause 1 deals with the Earnest Money/Security Deposit. The portion relating to Earnest Money with all amendments should find place in NIT. The name of instruments which are acceptable as earnest money, have already been stated in the foregoing chapter. The quantum of earnest money has been specified as 2.5% for estimated cost of work upto Rupees One Lakh and 2% for tenders above Rupees One Lakh subject to maximum of Rs.20,000/-. Every tender should accompany the requisite amount of Earnest Money as stated hereinabove otherwise tenders will be deemed as informal. Fixed Security Depositors, labour Co-operative Societies, Un-employed Engineers' Co-op. Societies are exempted from submitting Earnest Money as per Govt. order issued from time to time. Only Fixed Security Depositors of Rs.1,00,000/- is exempted from submitting Earnest Money in open tenders in P.W.D. When the tender is accepted, the Earnest Money of 2.5% or 2% as the case may be, is converted into Security Deposit. In addition to 2.5% or 2%, 7.5% or 8%, as the case may be, requires to be deducted from Progressive Bill so as to make it 10% of the value of work billed for. 10% of the bill value is required to be deducted from the bills of contractors of exempted categories who were exempted from submitting Earnest Money at the lime of submission of tenders. Earlier provision of not effecting any recovery of Security Deposit if the accumulation of Security Deposit reaches a certain point say Rs.2,00,000/- has since been withdrawn." 12. It was thereupon contended by Mr. Chatterjee that the petitioner has not violated any condition with respect to the Earnest Money and has complied with notified conditions as stipulated. Enhanced EMD, if any, has not been incorporated in the NIT. It was thereupon contended by Mr. Chatterjee that the petitioner has not violated any condition with respect to the Earnest Money and has complied with notified conditions as stipulated. Enhanced EMD, if any, has not been incorporated in the NIT. It was further submitted that the earnest money deposit is to be converted into security deposit, balance amount is to be deducted from progressive bill so as to make it 10% of the value of work. Mr. Chatterjee, learned Counsel for the petitioner has drawn a distinction between EMD and security deposit and in my view rightly. 13. Mr. Mukherjee thereupon contended that in the tender application petitioner has agreed to abide by "such conditions so far as applicable" and also referred to the below mentioned clause in the tender application of the petitioner with a view to buttress his submission that the provisions of P.W.D. Code are in the knowledge of the petitioner and that he has agreed to abide by the same:- "Certificates :- I/We hereby declare that I/We have gone through the General Rules and directions for the guidance of contractors, Conditions of contractors special terms and conditions with upto date corrigendum and agenda of West Bengal Form No. 2911/2911 (i)/2911 (ii) and abide by all the clause therein." 14. It is apparent from the above contends of the tender application that petitioner has agreed to abide by the conditions as applicable and general rules and directions for guidance of contractors. There is reference to the conditions in Form No. 2911. A specimen form whereof has been filed by the petitioner in the supplementary affidavit being Annexure X. The said form carries the heading "general rules and directions for the guidance of contractors." Thus, it is evident that the petitioner is bound by the said conditions contained therein. It is not the case of Mr. Mukherjee, learned Counsel for the respondent authority that any of the said conditions as stipulated in Form No. 2911 have been violated by the petitioner. 15. The matter would have concluded here in favour of the petitioner and against the respondents. It is not the case of Mr. Mukherjee, learned Counsel for the respondent authority that any of the said conditions as stipulated in Form No. 2911 have been violated by the petitioner. 15. The matter would have concluded here in favour of the petitioner and against the respondents. However, as it is a matter pertaining to a tender, State is entitled to a play in the joints, under special circumstances a discretion has to be conceded to the authorities to assess over all situations for the purpose of taking a decision as to whom the contract is to be awarded. (See:- Sterling Computers, 1993 (1) SCC 445 ). 16. Also, administration has the right to revise its decision and to cancel the entire tender proceedings before final acceptance. Ultimately what prevails with the Courts in the matter of tenders and award of contracts is the public interest, which is paramount. 17. Judged in the light of the above, it will be seen that petitioner was provisionally selected and by Annexure P-2 was requested to submit six copies of Form WBF 2911 (ii) together with copies of schedule of works within three weeks from the date of receipt of the said letter. Though, it is the case of the petitioner that he purchased the form WBF-2911 (ii) on March 23, 2002 (Annexure P-3) and duly submitted the same on the same day, petitioner has not been able to produce any evidence of submitting the same in the office of the respondent authority. In the affidavit-in-opposition, it is specifically stated that the petitioner has not submitted the agreement form in WBF 2911 (ii). Petitioner has thus not been able to substantiate the factum of submitting the signed contract in form WBF 2911 (ii), within the time period stipulated. In the absence thereof no contract can be said to have come into being. Therefore, it cannot be said that the action of the respondents canceling the provisional selection and calling for fresh tenders is arbitrary. Even in the representations Annexure P-4 and P-5 which are after the time period stipulated, no date of submitting the said form WBF 2911 (ii) has been stated nor any proof in support thereof is forthcoming. On this ground alone, petitioner has disentitled himself to the grant of any of the reliefs as prayed for. Even in the representations Annexure P-4 and P-5 which are after the time period stipulated, no date of submitting the said form WBF 2911 (ii) has been stated nor any proof in support thereof is forthcoming. On this ground alone, petitioner has disentitled himself to the grant of any of the reliefs as prayed for. The writ application is liable to be and is accordingly dismissed, however, without any order as to costs. Interim order, if any, shall stand vacated forthwith.