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2004 DIGILAW 1138 (ALL)

Manju Agrawal v. Indian Railway Catering and Tourism Corporation Ltd. , New Delhi

2004-05-25

S.P.SRIVASTAVA, UMESHWAR PANDEY

body2004
JUDGMENT Umeshwar Pandey, J.—The petitioners, who happen to be partners of a firm known as M/s. Brijwasi Keshav Milk Product, had submitted their tenders for the year 2003 after completing all the formalities for undertaking the contract for sale of ‘petha’, ‘pera’ and ‘dalmot’ at Mathura Junction Railway Station. The tender was floated by respondent No. 1 Indian Railway Catering and Tourism Corporation Ltd. (for short I.R.C.T.C.) through publication in newspaper. The respondent No. 4, proprietor of M/s. Kwality Petha House, had also submitted his tender for the said contract. The licence fee was fixed at Rs. 22.50 lacs per annum and as pleaded in para 15 of the petition, Clause 5.1 of the tender form the licence was awardable to the party quoting the highest concession fee which would be over and above the licence fee. The petitioners offered a sum of Rs. 11,50,000 by way of concession fee in their tender whereas the respondent No. 4, as admitted in para 20 of the writ petition, offered Rs. 38,50,000 for the said purpose. The tenders were opened on 6.1.2004 and vide para 24 of the writ petition, it was awarded in favour of the respondent No. 4 though he did not possess the requisite experience of 10 years for manufacture and sale of ‘pera’ and vide para 26 of the writ petition, the petitioners contended that respondent No. 4 failed to deposit the licence fee or concession fee within a period of 7 days. On account of lack of experience, as required in the advertisement of tender date 10.10.2003, and also on account of failure of respondent No. 4 to deposit the first instalment of licence fee and concession fee within a period of 7 days from the date of issue of letter of award of licence, he forfeited his right to obtain the contract. In spite of all these illegalities, as contended by the petitioners, the I.R.C.T.C. granted the contract in favour of the respondent No. 4. The petitioners have, thus, prayed for issue of writ in the nature of mandamus restraining the respondent No. 4 from working as such licensee at Mathura Junction Railway Station and also for issue of writ in the nature of mandamus commanding the respondent Nos. 1 and 2 to award this licence in their favour. The petitioners have, thus, prayed for issue of writ in the nature of mandamus restraining the respondent No. 4 from working as such licensee at Mathura Junction Railway Station and also for issue of writ in the nature of mandamus commanding the respondent Nos. 1 and 2 to award this licence in their favour. They have further prayed that since they were continuing for the work of sale of ‘petha’ and ‘pera’ at Mathura Junction Railway Station by virtue of their licence for the year 2002, they should not be asked to discontinue and remove their total establishment from the Railway Station premises. 2. In response to the advance notice of the writ petition to the respondents, they have put in appearance and in opposition to the writ petition respondent No. 1 has filed the counter-affidavit and respondent No. 4 represented through his advocate Sri Ranjeet Saxena, has also filed his counter-affidavit. The respondent No. 1 contends in para 10 of the counter-affidavit that the tender of respondent No. 4 was accepted on account of having quoted the highest concession fee of Rs. 38,00,000 and offer of award of licence was made to him vide letter dated 6.1.2004. He was asked to convey the acceptance of offer and deposit the required amount within the stipulated period (12.1.2004) and start operation of sale from 17.1.2004. On 9.1.2004, the respondent No. 4 through his letter of the date represented that he was ready to complete the tender conditions and also made a request for one week’s extension for payment of concession fee/licence fee. The competent authority granted one week’s time to the respondent No. 4 vide letter dated 9.1.2004 itself and the required amount was deposited by the respondent No. 4 vide two demand drafts dated 14.1.2004. Accordingly, he was awarded licence and necessary permission was given to him to start the business. As the licence of the petitioner was expiring on 16.1.2004, they were advised to take away their entire establishment and vacate the Railway Station premises. It is further contended in para 13 of the counter-affidavit that the respondent No. 4 possesses all requisite qualification, as mentioned in the documents. The tenders were opened in presence of the parties and the licence was awarded on the basis of offers received in the tenders. It is further contended in para 13 of the counter-affidavit that the respondent No. 4 possesses all requisite qualification, as mentioned in the documents. The tenders were opened in presence of the parties and the licence was awarded on the basis of offers received in the tenders. Vide para 17 of the counter-affidavit, it is contended that the competent authority has jurisdiction to extend time of payment to successful bidder and in the present case the time was granted to the respondent No. 4 on the merits of his case which was fully justified legally as well as factually. At the time of opening of the tenders in the presence of the parties, no objection was raised by the petitioners or any of the parties bidding in the tender for challenging the award of contract offered to respondent No. 4. The respondent No. 1 further contends that it was after the perusal of the entire documents submitted by the parties along with their expressions of interest for the contract, that the offerers were short listed for participation in the financial bid. The respondent No. 4 was found as an eligible applicant and there is no illegality or arbitrariness in accepting the offer of respondent No. 4 for the grant of disputed licence in his favour. The respondent No. 4 possesses all experience as required of the parties giving their offer in response to the tender advertisement. The respondent No. 1 has further contended in para 27 of the counter-affidavit that the respondent No. 4 had made his request for extension of time to deposit the first instalment of the licence fee and concession fee well within 7 days from the date of offer made to him and the competent authority while acting within its jurisdiction granted 7 days time and thereafter the instalment was deposited well within the extended period, i.e., on 14.1.2004. 3. The respondent No. 1 has filed a supplementary counter-affidavit and vide para 3 of the same it has been clarified that the experience of the officers for the sale of the items, as mentioned in the tender documents, was not to the effect that he should have experience of 10 years for the manufacture and sale of all the items. The experience of one item is enough to fulfil the eligibility conditions. 4. The experience of one item is enough to fulfil the eligibility conditions. 4. The respondent No. 4 in his counter-affidavit has also reiterated all those facts, which have been stated in the counter-affidavit of respondent No. 1 and has contended that all the conditions of the tender have been fulfilled by him. Thereafter, offer of contract was made to him on the basis of his being the highest bidder in respect of the concession fee from amongst the tenders. He has further contended that he has long experience for the sale of ‘petha’ and is running his reputed Kwality Petha House at Agra for the last several decades. 5. The petitioners in reply to the aforesaid counter-affidavits of respondent No. 1 and respondent No. 4, have also filed their rejoinder-affidavits. 6. We have heard Shri Ravi Kant, senior advocate, assisted by Sri Manoj Kumar Pandey appearing for the petitioners and we have also heard Sri U. N. Sharma representing respondent Nos. 1, 2 and 3 and Shri Ranjeet Saxena appearing for respondent No. 4. 7. The learned counsel for the petitioners has strenuously urged that the licence in question could not have been legally granted by respondent No. 1 in favour of the respondent No. 4 on two counts ; (1) that respondent No. 4 did not comply to the conditions of the tender as stipulated in clause 7.1 of the tender form and (2) that he did not possess the requisite experience of minimum 10 years in manufacture and sale of ‘pera’. The decision making process of respondent No. 1 is tainted with arbitrariness and was violative of Article 14 of the Constitution of India. The learned counsel in support of his submissions has placed reliance upon the case law of Sterling Computers Ltd. v. M/s. M. and N. Publications Ltd. and others, AIR 1996 SC 51 ; Delhi Science Forum and others v. Union of India and another, (1996) 2 SCC 405 ; Ramana Dayaram Shetty v. International Airport Authority of India and others, AIR 1979 SC 1628 and B. S. Minhas v. Indian Statistical Institute and others, AIR 1984 SC 363 . 8. 8. The ratio of aforesaid decision of the Apex Court in its essence is that the authorities which come within the definition of the State as envisaged under Article 21 of the Constitution of India are expected to take their decisions even in the matters of finalisation of their contracts with the parties with reasonable rationale and it must conform to the spirit of Article 14 of the Constitution of India. It has not to be tainted with arbitrariness. Any action of theirs ignoring the procedure which can be said to be basic in nature and without objective consideration of different options available to them for taking into account the interest of the State and the public will come within the ambit of arbitrariness and violative of Article 14 of the Constitution of India. If authority is found to have not applied its discretion keeping in view its fiduciary duty and is not in conformity with the conditions or guidelines announced by it to safeguard the interest of public an interference by way of judicial review would become imperative for violation of Article 14 of the Constitution of India. 9. In the case of Ramana Dayaram Shetty (supra), the Supreme Court has propounded 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 the plane of invalidation of an act, which is in violation of those standards. 10. In the case of B. S. Minhas (supra), a Bench of two Hon’ble Judges of the Apex Court has found that for the sake of fair play the parties must regulate their actions in compliance with their bye-laws, which has been formulated by them only. 11. The aforesaid principles of law no doubt require the authorities to adopt reasonable rationale in their decision making process which is not arbitrary. But while testing the case at hand for such compliance whether made or not by the respondents, on facts we find that the respondent No. 4 was selected for final award of licence by respondent No. 1 after adopting all the procedures prescribed under the tender documents. The applicants were short listed and vide para 13 of the counter-affidavit of respondent No. 1, he was one amongst the three short listed parties. The applicants were short listed and vide para 13 of the counter-affidavit of respondent No. 1, he was one amongst the three short listed parties. On due consideration of the eligibility requirements within the given parameters contained in the advertisement inviting tenders, respondent No. 4 was found eligible by the authority and his tender was considered for final acceptance along with two others, i.e., (1) the petitioners’ firm M/s. Brijwasi Keshav Milk Product and (2) M/s. Panchchi Food Pvt. Ltd. As disclosed in para 11 in the counter-affidavit of respondent No. 1, the petitioners had offered concession fee of Rs. 11,50,000 only whereas vide para 10 of the said counter-affidavit, the respondent No. 4 had offered the highest concession fee of Rs. 38,00,000. Obviously, the offer of respondent No. 4 being the highest in his tender, it was accepted for the award of licence. As contended in para 29 of the said counter-affidavit, the tender was opened on 6.1.2004 and offer was given to respondent No. 4 on the same date. He accepted the offer of award on 9.1.2004 requesting for grant of one weeks’ time to deposit the amount. His request was allowed and he was to deposit the amount by 15.1.2004. But he deposited it a day earlier, i.e., on 14.1.2004 itself. 12. Learned counsel for the respondent No. 1, has stressed that such grant of extension of time to deposit the first instalment of licence fee as well as the concession fee was well within the jurisdiction of authority concerned and it cannot be said to be violative of Article 14 of the Constitution of India. In fact, if the rigours of Clause 7.1 of the tender form are taken into account, the respondent No. 4 had 7 days’ time to deposit the first instalment of the licence fee and concession fee, i.e., upto 12.1.2004. The learned counsel has emphasised that much before the said date (12.1.2004), the application of respondent No. 1 was received on 9.1.2004 requesting for a further one weeks’ time to deposit the instalments, which was granted by the authorities and he deposited the amount much before the expiry of the extended period. In such a situation the action of respondent No. 1 in granting the extension, cannot be said to be unreasonable or arbitrary while giving final award of licence in favour of the respondent No. 4. 13. In such a situation the action of respondent No. 1 in granting the extension, cannot be said to be unreasonable or arbitrary while giving final award of licence in favour of the respondent No. 4. 13. It is true that the authorities, which formulate rules and regulations even in matters of contracts etc., are supposed to follow those rules and procedures for the purpose of entering into contract and they cannot give it a go-bye. While examining the aforesaid facts and comparing it with the facts of the cases of Sterling Computers Ltd. (supra), Delhi Science Forum (supra), Ramana Dayaram Shetty (supra) and B. S. Minhas (supra), we find that the facts at hand are not such which should be subjected to the rigours of those principles laid down by the Apex Court in the said case. The respondent No. 4 was to deposit first instalment of licence fee and concession fee by 12.1.2004 and before the expiry of that date he made an application to the authorities for grant of a very short period of one week for such deposit. If the extension was granted, it cannot be termed as violative of Article 14 of the Constitution of India and cannot be held to be discriminatory against the petitioner who had offered only a sum of Rs. 11,50,000 as concession fee which cannot be matched to an offer of Rs. 38,00,000 made by respondent No. 4. Had the period of 7 days, as stipulated in Clause 7.1 aforesaid, expired before the grant of extension of time by the authority, some semblance of arbitrariness could have been there in such action of respondent No. 1. But the respondent No. 4, well within the stipulated period of 7 days, had made a prayer to the authorities for the extension in question and that was granted, as consequence of which the first instalment of licence fee and concession fee was deposited by 14.1.2004. Originally, these instalments were to be deposited by 12.1.2004 but there is a delay of two days on account of such extension of time for such deposit by the authorities and it cannot be said to be an action not based on reasonable rationale or arbitrary being violative of Article 14 of the Constitution of India. 14. Originally, these instalments were to be deposited by 12.1.2004 but there is a delay of two days on account of such extension of time for such deposit by the authorities and it cannot be said to be an action not based on reasonable rationale or arbitrary being violative of Article 14 of the Constitution of India. 14. What has been propounded by the Apex Court in the case of Delhi Science Forum (supra) is that the decision of the authority should not be taken or its discretion should not be exercised in a manner, as no reasonable man could have ever exercised. Any decision taken by such authority can be questioned primarily on the grounds : (1) decision has been taken in bad faith ; (2) decision is based on irrational or irrelevant considerations ; (3) decision has been taken without following the prescribed procedure which is imperative in nature. While testing the aforesaid decision of the authority (respondent No. 1) in the present context, we find that it was neither taken in bad faith nor was based on irrational or irrelevant consideration nor it was taken without following the procedure imperative in nature. The respondent No. 4 was the highest offerer of concession fee (Rs. 38,00,000) and the petitioners have no way to match him with their offer of only Rs. 11,50,000. The respondent No. 4 under clause 7.1 above, was to deposit the amount by a date which is only two days earlier to the actual extended date of deposit of the first instalment. We find that the action of the authority for giving an extension of time in such circumstance, is not actually violative of the procedure or the conditions of Clause 7.1, especially when the respondent No. 4 had submitted his request to such authority for the extension of time much before the expiry of the prescribed period contemplated in the tender form. The onus for proving the grounds and for questioning the legality of decision making process is always on the petitioners who question it. This principle of law has been propounded by the Apex Court in Delhi Science Forum (supra). 15. The onus for proving the grounds and for questioning the legality of decision making process is always on the petitioners who question it. This principle of law has been propounded by the Apex Court in Delhi Science Forum (supra). 15. We do not find that the petitioners in the case at hand have been able to demonstrate it successfully that the decision of the authority in the aforesaid context has been vitiated because of adopting the procedure not sanctioned by law or by taking into consideration the factors which are irrelevant or because of it being in bad faith. On the contrary, we find that the extension of time granted by the respondent No. 1 to the highest offerer in the tender is wholly keeping in view the interest of the Railways, as a result of which the first instalment of concession fee and licence fee had been deposited only two days behind the scheduled date. This concession of extension of time granted to respondent No. 4 before the expiry of schedule of deposit of first instalment cannot be termed as arbitrary or a decision not based on reasonable rationale. We, thus, find that it is not discriminatory and violative of Article 14 of the Constitution of India. 16. As regards the other contention raised by the learned senior counsel appearing for the petitioners that the respondent No. 4 lacked experience of manufacture and sale of ‘pera’ for the period of 10 years, we find that para 3 of the supplementary counter-affidavit filed by respondent No. 1 is enough to meet such objections of the petitioners. It is not disputed that the respondent No. 4 has a long experience of decades for manufacture and sale of ‘petha’ but at the same time he does not possess the minimum 10 years experience of manufacture and sale of ‘pera’. In para 3 of the supplementary counter-affidavit, it has been clarified by respondent No. 1 that the eligibility parameters, as given in the press advertisement, inviting tender for the aforesaid contract was there requiring 10 years experience at least in one item to qualify a tenderer. It was not the necessary requirement for the offerer that the experience of 10 years for manufacture and sale in each item of ‘petha’, ‘pera’ and ‘dalmot’ should be possessed by him. It was not the necessary requirement for the offerer that the experience of 10 years for manufacture and sale in each item of ‘petha’, ‘pera’ and ‘dalmot’ should be possessed by him. After this clarification given by the respondent No. 1, we do not find that it was imperative for a tenderer, as per the advertisement, to have the aforesaid experience of 10 years for each item. The respondent No. 4 having experience of more than 10 years in manufacture of ‘petha’ and ‘dalmot’, was enough to qualify him to participate in the advertised tender. The case law cited by the learned counsel for the petitioners in this context are : Parmeshwar Prasad v. Union of India and others, 2002 (1) AWC 63 (SC) : (2002) 1 SCC 145 ; Pabitra Mohan Dash and others v. State of Orissa and others, (2001) 2 SCC 480 ; Indian Airlines Ltd. and others v. S. Gopalakrishnan, (2001) 2 SCC 362 ; Jatinder Singh v. Gurmeet Singh Sidhu and others, (2001) 6 SCC 508 and Dr. Bhanu Prasad Panda v. Chancellor, Sambalpur University and others, (2001) 8 SCC 532 . The ratio provided in the aforesaid case, as we find, are not squarely applicable to the facts of the present case, more especially when the clarification referred to in para 3 of the supplementary counter-affidavit of respondent No. 1, has come stating that the requirement of 10 years experience as eligibility conditions as stipulated in advertisement are only in respect of one item of the three. Obviously, the respondent No. 4 having experience of manufacture of petha and dalmot for decades if had not been eliminated in short listing, in our view this cannot be said to be arbitrary action of the authorities in their decision making process. 17. On the facts and circumstances as discussed in the preceding paragraphs, we are of the view that the respondent No. 1 while making offer of licence cannot be held to have taken a decision vitiated under law for violation of any procedure or for taking into consideration such factors which are irrelevant. The authorities had given offer of licence to respondent No. 4 who in addition to having quoted the highest concession fee in his tender had also been conforming to all the qualifications required for the purpose. The authorities had given offer of licence to respondent No. 4 who in addition to having quoted the highest concession fee in his tender had also been conforming to all the qualifications required for the purpose. Thus, in our view, we do not find any illegality or such infirmity in the said offer which might warrant a judicial review of the same and the petitioners have absolutely no ground to challenge it. On the consideration of facts and circumstances, we are not inclined to exercise our extra-ordinary jurisdiction as envisaged under Article 226 of the Constitution of India for the purposes to interfere in the aforesaid decision of respondent No. 1 for offer of licence in favour of respondent No. 4. 18. Before finally parting with the case, we notice that by virtue of an interlocutory stay order dated 23.1.2004, the petitioners had been permitted to continue their earlier contract of sale of ‘petha’ etc. at Mathura Junction Railway Station subject to their depositing amount of Rs. 20,00,000 with the respondent No. 1. It was directed in the said order itself that the amount also deposited would be kept in a separate account and its disposal would remain there subject to further orders passed by this Court. In that context, we direct that the petitioners when continued the aforesaid contract from January to May, 2004, the amount under deposit shall be refunded to them only after making proportionate deductions therefrom for running the contract for all these months. The respondent No. 1 shall make deductions of proportionate amount from out of the deposit at the same rate at which they propose to grant licence in favour of the respondent No. 4 who has quoted the maximum concession fee. 19. We further direct that since the respondent No. 4 was not able to reap the benefit of contract from January to May, 2004, on account of stay order dated 23.1.2004, he should be compensated by the respondent No. 1 by making proportionate deductions from licence fee as well as concession fee which has to be realised from him in pursuance to the award of licence. This deduction should commensurate to the deductions which respondent No. 1 is making from out of the deposits made by the petitioners. 20. The writ petition having no force is hereby dismissed with no order as to cost subject however to the direction indicated herein above.