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2003 DIGILAW 897 (JHR)

Spartan Carriers Private Ltd. v. Central Coalfields Ltd.

2003-07-25

M.Y.EQBAL

body2003
ORDER M.Y. Eqbal, J. 1. In this writ petition petitioner has prayed for issuance of appropriate writ for quashing the Tender Notice dated 1.7.2003 published [in the newspaper "Hindustan" dated 5.7-2003 by which tenders have been invited by the respondents for transportation of coal from various project/mines unit of Kuju Area, Hazaribagh area of Central Coalfields Limited to any point of unloading as per direction of the Area Management for a period of one year and also inviting tender for transportation of clean coal/power coal from Kedla Washery to Chainpur siding and loading the same into Railway wagons. 2. Petitioners company is engaged in coal transportation and said to have vast experience in executing several tender for contract works which were awarded to it time to time. Petitioners case is that on 14.2.2002 respondents invited a similar tender for transportation of coal and washery products from various project for a period of 2 years. Respondents also fixed certain terms and conditions in the notice inviting tender and one of the clause was that tenderer must have minimum experience of transportation satisfactorily for a quantity of 1.5 lakhs tones and fora value of Rs. 8 lacs for a period of 12 consecutive months during the last three years. Petitioner alleged that in order to fulfill the conditions of the tender notice it hired required equipments such as 22 Tipping trucks from the market for two years and also fulfilled other terms and conditions. Petitioner having fulfilled air the requirements, its tender was accepted and was called to participate in the negotiation. After several negotiations, the work order/letter of intent was issued and the contract was awarded for a period of 2 years as per the tender notice and the work was commenced from 1.8.2002. Petitioners further case is that an agreement was executed between the petitioner and the concerned respondent in pursuance to tender notice. In the said agreement it was mentioned that the agreement was for 12 and 6 months respectively and subject to extension after assessing satisfactory performance of the petitioner. Petitioners further case is that an agreement was executed between the petitioner and the concerned respondent in pursuance to tender notice. In the said agreement it was mentioned that the agreement was for 12 and 6 months respectively and subject to extension after assessing satisfactory performance of the petitioner. It is alleged by the petitioner that although performance of the company was satisfactory, respondents during the subsistence of the work and before the contract period of 2 years advertised and published another tender notice dated 1.7.2003 by which tenders have been invited for transportation of coal from various projects/mines of Kuju area/Hazaribagh area of C.C. Ltd. It is therefore contended by the petitioner that by the said tender notice respondents purported to give contract of the same work which has already been awarded to the petitioner. Petitioner therefore contended that subsequent tender notice is absolutely illegal, arbitrary and mala fide and against the provisions of Article 14 of the Constitution of India and the respondents have no right to issue fresh tender notice and to award the same contract which has already been awarded to the petitioner for a period of 2 years. 3. Respondents have filed their counter-affidavit wherein it is stated that petitioner was fully aware that period of contract was for one year which was intimated to the petitioner by letter dated 8.10.2002 giving reference of the sanction letter dated 31.7.2002 in which it was expressly mentioned that period of contract was from 1.8.2002 to 31.7.2003, i.e., one year. Respondents further case is that petitioner by letter dated 14.1.2003 had requested the respondents for extension of period and in the said letter petitioner had subsequently prayed that period of contract should be extended up to 31.7.2003 as per the sanction letter dated 31.7.2002. According to the respondents although in the notice inviting tender the contract was shown to be for a period of 2 years but sanction for only one year was accorded and agreement to that effect was executed by and between the petitioner and the respondents. Respondents have therefore every right to issue fresh tender notice after the expiry of the period of one year inasmuch as petitioner was allotted work by an agreement for a period of one year. 4. Mr. Respondents have therefore every right to issue fresh tender notice after the expiry of the period of one year inasmuch as petitioner was allotted work by an agreement for a period of one year. 4. Mr. Ram Balak Mahto, learned senior counsel appearing for the petitioner assailed the impugned tender notice dated 1.7.2003 as being illegal, arbitrary, mala fide and violative of principles of natural justice. Learned counsel submitted that respondents have no right or jurisdiction to issue fresh tender notice inviting tender even without cancelling the earlier tender notice and the agreement and without following the settled principles of law. Learned counsel firstly drawn my attention to Annexure I which is tender notice dated 14.2.2002 by which tenders were invited for transportation of coal and washery products for a period of 2 years: Petitioners tender was accepted and the petitioner was called upon for negotiation by letter-dated 12.4.2002 which is evident from Annexure 3 to the writ application. Learned counsel submitted that letter of intent was issued by the respondents and on the basis of which petitioner commenced work from 1.8.2002. It is only thereafter an agreement was executed by and between the petitioner and the respondents on 27.11.2002. Learned counsel therefore submitted that as a matter of fact contract was awarded to the petitioner for transportation of coal for a period of 2 years in terms of the tender notice and therefore action of the respondents in inviting fresh tender for the same work amount to taking away valuable right of the petitioner who is entitled to continue to his contract in pursuance of Annexure 1 to tender notice. 5. On the other hand Mr. M.M. Banerjee learned counsel for the respondents submitted that although in the tender notice the period of contract, was specified for 2 years it was the discretion of the respondents to extend or reduce the said period. Learned counsel drawn my attention to Annexure H to the counter affidavit which is letter bearing memo No. 624 dated 31.7.2002. By this letter the Tender Committee finally approved the proposal of transportation of coal for a period of one year commencing from 1.8.2002. The said approval was communicated to the petitioner and it was thereafter letter of intent - was issued awarding work to the petitioner for a period of one year. By this letter the Tender Committee finally approved the proposal of transportation of coal for a period of one year commencing from 1.8.2002. The said approval was communicated to the petitioner and it was thereafter letter of intent - was issued awarding work to the petitioner for a period of one year. Learned counsel therefore submitted that after expiry of the said period respondents have every right and authority to issue fresh tender notice inviting tender for transportation of coal and washery products from the colliery area. Learned counsel submitted that the claim of the petitioner is wholly illegal and misconceived. 6. After having heard learned counsel appearing for the parties and after perusal of the affidavits the only question that falls for consideration is as to whether the contract awarded to the petitioner was for a period of one year or for a period of 2 years as per the tender notice. 7. Before deciding this question, I would like to discuss the law with regard to finalization of tender arriving at a concluded contract. 8. It is well settled that tender notice is but an invitation to contractors to make offers. It does not amount to an offer or proposal. The rate offered by the contractors by submitting tender do not amount to acceptance of an offer. It is by the acceptance of any of those offer or proposal by the person calling tenders that it becomes a promise or agreement. To create a contract there must be common intention of the parties to enter into legal obligations, mutually communicated expressly or impliedly. Such an intention ordinarily will be inferred when the parties enter into an agreement which in other respects conforms to the rules of law as to the formation of contract. 9. Coming back to the instant case, as noticed above, in the tender notice dated 14.2.2002 although it was mentioned that contract will be for a period of 2 years but under Clause 6 of the tender notice it was categorically mentioned that the period mentioned in the tender notice can be extended/reduced, at the discretion of the company. After the petitioner and other tenderers submitted their tender it was finally placed before the Committee and the Committee finally approved the contract for a period of one year from 1.8.2002 in terms of letter as contained in memo No. 624 dated 31.7.2002. After the petitioner and other tenderers submitted their tender it was finally placed before the Committee and the Committee finally approved the contract for a period of one year from 1.8.2002 in terms of letter as contained in memo No. 624 dated 31.7.2002. After the said approval letter of intent and the work order was issued to the petitioner intimating it that period of contract will for a period of 6 months and it may be extended for a further period of 6 months. It further appears from the letter dated 8.8.2002 which is Annexure A to the counter-affidavit respondents while demanding some certificates from the petitioner reminded it about approval given by the Committee vide memo No. 624 dated 31.7.2002. Thereafter, the petitioner and the respondents entered into an agreement on 27.11.2002. Copy of the said agreement has been annexed as Annexure 5 to the writ application. For better appreciation Clause 6 of the writ application is reproduced herein below : "Period of Contract.--At present the award of work is initially for a period of six (6) months. During this period the performance of the contractor will be reviewed by Kedla (W) management, alter every three months. On satisfactory performance the period and qty. of the contract will be extended. Six months period is from 1.8.2002 to 31,1.2003." 10. Taking into consideration all those documents it is crystal clear that final concluded contract for transportation of coal as per the tender notice was for a period of 6 months and on satisfactory performance liable to be extended for a further period of 6 months i.e. up to 31.7.2003. In my opinion therefore the impugned tender notice issued by the respondents for awarding contract for a period of after 1.8.2003 is neither illegal nor violative of principles of natural justice. 11. Mr. Ram Balak Mahto, learned senior counsel for the petitioner put heavy reliance on the tender notice dated 1.7.2003 which expressly provided period of 2 years and on that promise of the respondents petitioner hired required equipments from the market for 2 years and submitted its tender. Respondents therefore, can not back out from the promise made in the tender notice. The submissions of the learned counsel can not be accepted. As discussed above, tender notice means only an invitation extended to the contractors for making offers. Respondents therefore, can not back out from the promise made in the tender notice. The submissions of the learned counsel can not be accepted. As discussed above, tender notice means only an invitation extended to the contractors for making offers. It does not mean to an offer or proposal and quotation of rates submitted by the contractors does not mean to an acceptance of offer or proposal thereby creating any promise or agreement. It is by the acceptance of any of those offers or proposals by the person calling for tender that it becomes a promise or an agreement. Thus mere fact that a person made certain quotations in response to the tender notice, even granting that it was the lowest tender will not in any manner create an obligation on the person who issued tender notice. 12. In the case of Thawardas v. Union of India, AIR 1955 SC 468 , the Supreme Court while considering similar question held that in any case a person cannot be bound by one sided offer which is never accepted, particularly when parties intended that the contract should be reduced to writing. It was observed : "In any case, a person cannot be bound by a one sided offer which is never accepted, particularly when the parties intend that the contract should be reduced to writing. That is the whole point of insisting on a document. It excludes speculation as to what was and what was not agreed to however much the matter might have been raised by one of the parties during the stage of negotiation." 13. Haying regard to the facts of the case and the submissions made by the learned counsel and the law discussed hereinabove, I am of the definite opinion that the contract with the petitioner pursuant to the tender notice dated 14.2.2002 was for a period of one year only and therefore, the impugned tender notice issued by the respondents is neither illegal, arbitrary or violative of principles of natural justice. No case has been made out by the petitioner which warrants interference by this Court. This writ application has therefore no merit, which is accordingly dismissed.