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2005 DIGILAW 51 (GAU)

Achyut Baruah v. State of Assam

2005-01-20

BIPLAB KUMAR SHARMA

body2005
JUDGMENT B.K. Sharma, J. 1. Both the writ petitions based on same set of facts involving the same issue and the question of law, were heard analogously and are being disposed of by this common judgment and order. The facts material for the purpose of disposal of the cases are indicated below: W.R. (C) No. 3775 of 2005 2. The petitioner in response to the tender notice No. 186 dated 25.1.2005 (Annexure-A) issued by the Superintendent of Central Jail, Guwahati (respondent No. 13), submitted his tender in respect of the contract for supply of dietary and other articles under Group-C of the tender Notice. Supply of the articles to the Central Jail, Guwahati was for the year 2005-06. He quoted his bid amount at Rs. 8,72,300. As scheduled, the tenders were opened on 14.2.2005. According to the petitioner the tender submitted by him was found valid. The comparative statement in respect of the tenders was prepared and in the same the petitioner was included at serial No. 11, while the respondent No. 4 at serial No. 5. In the remark column there was no remark against the name of the petitioner, but against the name of the respondent No. 4, Smt. Kalpana Das the remark Invalids E/M by name of Nabajit Das, was inserted. According to the petitioner such remark had to be made in view of the fact that the respondent No. 4 submitted earnest money in the name one Shri Nabajit Das and not in her name which is against Clause No. 5 of the NIT. Thus, according to the petitioner the respondent No. 4 was not entitled to get the work order, her tender being defective, it is the further case of the petitioner that there was another valid tender at serial No. 10 above him. 3. In spite of defective tender submitted by the respondent No. 4 by furnishing earnest money in the name of another person, the respondents issued the impugned order dated. 28.4.2005 pursuant to the recommendation made by the Inspector General of Prisons, Assam (respondent No. 2) by his letter dated 28.4.2005, for settling the contract in favour of the 5th lowest tender, i.e. the respondent No. 4. W.P. (C) No. 3776 of 2005 4. 28.4.2005 pursuant to the recommendation made by the Inspector General of Prisons, Assam (respondent No. 2) by his letter dated 28.4.2005, for settling the contract in favour of the 5th lowest tender, i.e. the respondent No. 4. W.P. (C) No. 3776 of 2005 4. As in the first writ petition, in this writ petition also the grievance made is in respect of the settlement made in favour of the respondent No. 4 (Shri Nabajit Das) pursuant to the NIT in question. In response to the NIT dated 25.1.2005 (Annexure-A) issued by the Superintendent, District Jail, Mongoldoi (respondent No. 3), the petitioner submitted his tender in respect of the contract for supply of dietary and other articles under Group-D of the tender notice to the District Jail, Mongoldoi for the year 2005-06 offering a bid value of Rs. 4,77,500 only. As scheduled, the tenders were opened on 14.2.2005 and according to the petitioner his tender was found to be valid having conformed to the requirement of the tender notice. Comparative statement etc. were prepared and the respondent No. 3 by his letter dated 12.3.2005 while forwarding the tender papers to the respondent No. 2 indicated that the tender submitted by the respondent No. 4 was not found correct as he had furnished National Savings Certificate (NSC) for Rs. 1,000 standing in the name of one Smt. Jurismeeta Deka. According to the petitioner, in the comparative statement his name was included at serial No. 9 and that of the respondent No. 4 at serial No. 7 with the remark invalid-E/M furnished by the name of the Jurismeeta Deka. It is the case of the petitioner that such furnishing of earnest money by the respondent No. 4 was against the mandate of Clause No. 5 of the NIT. According to the petitioner there was only one valid tender, above him placed at serial No. 8 of the comparative statement. Thus, in this case also it is the grievance of the petitioner that acceptance off the tender submitted by the respondent No. 4 and issuance of work order dated 29.4.2005 in his favour pursuant to the recommendation of the Inspect of Prisons, Assam by his letter dated 28.4.2005 is illegal and arbitrary. 5. Inspite of service of notice on the respondent No. 4 in both the cases, there is no appearance on their behalf. 5. Inspite of service of notice on the respondent No. 4 in both the cases, there is no appearance on their behalf. The State respondents have filed their counter affidavit justifying the impugned action and issuance of work orders, in favour of the respondent No. 4 in both the cases. While admitting the fact that the earnest money in the first case has been deposited by the respondent No. 4 in the form of Kishan Vikash Patra CKVP) stands in the name of one Shri Navajit Das instead of her own name, it is the plea of the respondents that the KVP against the earnest money having been assigned in favour of the Superintendent, Central Jail, Guwahati, same fulfills the requirement of Clause No. 5 (A) of the tender notice. It is the stand of the respondents that after due consideration it was decided to accept the KVPs furnished by the respondent No. 4 as the earnest money and the tender Committee rightly accepted her tender as valid tender and accordingly the contract was awarded in her favour. 6. In the second case also the respondent have taken the same very plea. In this case also the respondent No. 4 submitted requisite earnest money by furnishing KVP worth of Rs. 500 standing in her name and NSC worth of Rs. 1,000 standing in the name of one Jurismeeta Deka. Since both the KVPs and NSCs were duly assigned in favour of the Superintendent, District Jail, Mongoldoi, according to the respondents same fulfills the requirement of Clause 5(A) of the tender notice. Be it stated here that as per the Clause 5(A) of the NIT a tender must furnish alongwith the tenders, the amount indicated in the NIT as earnest money either in Govt. Treasury receipt or deposited receipt of NSC and KVP Postal Saving Account assigned in favour of the Superintendent, District Jail and on failure to do so, tender will be rejected. In case of tenderers belonging to ST/SC or other backward classes, the earnest money worth Rs. 5,000 in Group-A and Rs. 3,000 each for other groups vice a, c, and would be half of the amounts. Clause 5C provides that no cheque or cash will be accepted as earnest money. For a ready reference Clauses 5 (a), (b), (c) and (d) are quoted below: 5. 5,000 in Group-A and Rs. 3,000 each for other groups vice a, c, and would be half of the amounts. Clause 5C provides that no cheque or cash will be accepted as earnest money. For a ready reference Clauses 5 (a), (b), (c) and (d) are quoted below: 5. (a) Tenderer must furnish along with their tender an amount shown below as earnest money either in Government treasury receipt or deposited receipt of N.S.C. or K.V.P. Postal Savings Account assigned in favour, of the undersigned failing which the tenders will be rejected. Group-A 5,000.00 (Rupees Five Thousand) only Other Group 3,000.00 (Rupees Three Thousand) only for each group In the case of tenderers belonging to Schedule Cases, Schedule Tribes or O.B.C. the earnest money will be half of the above amount. (b) No cheque or cash will be accepted as earnest money/security deposit furnished in connection with previous contract will not be accepted as earnest money. (c) Earnest money will have to be furnished separately for each tender, and not connective for a group of tender. Government draft, Challan, etc. in respect of a particular tender must accompany that tender. (d) The earnest money of the successful tenderer will be returned as soon as the security deposit has been furnished and that of the unsuccessful tenderer will be refunded when order for final selection of the contractors is passed by the Inspector General of Prisons, Assam. 7. Mr. S. Kataky, learned Counsel appearing for the petitioners in both the cases submitted that on the face of it the awarding of contract to the respondent No. 4 in each of the cases is illegal and arbitrary. He submitted that there being violation of the Clause 5(a) of the tender notice, the tender submitted by the respondent No. 4 in each of the cases could not have been accepted by the respondents. Placing reliance on the decision of the Apex Court as reported in Global Energy Ltd. v. Adani Exports Ltd. AIR 2005 SC 2653 he submitted that the acceptance of the earnest money by the respondents as furnished by the respondent No. 4 was against the object of furnishing the earnest money. Placing reliance on the decision of the Apex Court as reported in Global Energy Ltd. v. Adani Exports Ltd. AIR 2005 SC 2653 he submitted that the acceptance of the earnest money by the respondents as furnished by the respondent No. 4 was against the object of furnishing the earnest money. He submitted that admittedly the earnest money submitted by the respondent No. 4, in both the cases in the form of KVP and NSC being in the name of some other persons, such KVP and NSC could not have been accepted by the respondents as valid earnest money. Consequently, in absence of earnest money, the tenders submitted by the respondent No. 4 in both the cases, ought to have been rejected. Thus, according to him, awarding of the contract to them is illegal and highly arbitrary. 8. Mr. K.N. Choudhury, learned Addl. Advocate General assisted by a Ms. R. Chokraborty, learned State counsel on the other hand submitted that since tie earnest money was a megre amount of Rs. 1,500 and in consideration of the fact that KVP and NSC although stood in the name of some other persons were dully assigned in favour of the Superintendent of the respect Central Jails, there was fulfillment of the basic requirement of Clause 5(a) of the tender notice. According to him the things would have been different had the earnest money involved bigger amount. According to him, having regard to the fact situation involved in the cases deviation from the normal practice of submission of earnest money in the form of KVP/NSC standing in the name of the tenderer himself may be made, more so when the earnest money is a megre amount of Rs. 1,500 only. He placed reliance on the decision of the Apex Court as reported in Poddar Still Corporation v. Ganesh Engineering Works (1991) 2 SCR 696. 9. On the basis of the aforesaid submissions made by the learned Counsel for the parties and the terms and conditions of the NIT it is to be decided as to whether the earnest money furnished by the respondent No. 4 in both the cases in the form of KVP/NSC standing in the name of some other persons was a valid offer of earnest money. Clause 5 of the NIT has been quoted above. Clause 5 of the NIT has been quoted above. As per the requirement of Clause 5(a), the tender must be furnished along with earnest money either in Govt. treasury receipt or deposited receipt of NSC or KVP Postal Savings Account assigned in favour of the Superintendent of Central Jail. On a plain reading of the same and in the common parlance what is understood is that earnest money in the form of KVP/NSC must stand in the name of the tenderer himself. Such NSC/KVR must be assigned in favour of the Superintendent of the respective Jails. It is immaterial as to whether the amount of earnest money is big or small. It is optional for a tenderer to furnish earnest money either in the form of Govt. treasury receipt or in the form of NSC/KVP. 10. Furnishing of earnest money in the form of Govt. treasury receipt necessarily involves depositing the amount to the Govt. of treasury. Thus, the requirement of furnishing the earnest money in the form of NSC/KVP must also stand in the name of the tenderer. Such NSC/KVP must be assigned in favour of the Superintendent of the respect Central Jail. It is another thing as to whether such NSC/KVP standing in the name of another person is assigned in favour of the authority concerned and the persons concerned do not have any objection to the same. The object is that only such parties who are financially sound and are serious in getting the work or contract, should make a bid. 11. As has been observed by the Apex Court in the case of Global Energy Ltd. (supra), otherwise any member or person who have no capacity, financial or otherwise, would like to take the chance by making a bid. In this connection observation made by the Apex Court in paragraphs 8 and 10 of the aforesaid judgment are quoted below: 8. Clause 5.1 of the NIT clearly provided that every quotation muse accompany earnest money amounting to Rupees thirty lakh in the form of demand draft or pay order drawn on any scheduled Bank of India in favour of West Bengal State Electricity Board payable at Kolkata. However, the learned Single Judge in his order dated 15.3.2004 also gave an option to the appellants to furnish a bank guarantee, of the said amount. Deposit of some amount of earnest money is a normal condition of tender. However, the learned Single Judge in his order dated 15.3.2004 also gave an option to the appellants to furnish a bank guarantee, of the said amount. Deposit of some amount of earnest money is a normal condition of tender. The object is that only such parties who are financially sound and are serious in getting the work or contract, should make a bid. Normally, State/Central Government Organizations or Central or State Public Sector Undertakings would not make a bid unless they are serious in getting the work the shareholding of the Government (State or Central) in any Public Sector Undertakings is always more than 50 per cent. They cannot be equated with a company whose net worth may be very small or may have a small shareholding. Therefore, the exception granted in favour of State Government Organizations and Public Sector Undertakings from making deposit of earnest money of Rs. 30 lakh was based upon a rational criteria and could not be faulted on any ground whatsoever. Order XXVII, Rule 8A CPC provides that no such security as is mentioned in Rules 5 and 6 of Order XLI shall be required from the Government or, where the Government has undertaken any defence of the suit, from any public officer sued in respect of an act alleged to be done by him in his official capacity. This provision shows that Government is always treated as a Separate class. Even assuming for the sake of argument that the exemption from depositing earnest money made in favour of Central/State Government Organizations and Public Sector Undertakings was illegal, it could only result in such exemption being struck down. This could not lead to a result where the condition in the NIT requiring deposit of earnest money itself being set aside. 10. The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. 10. The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned single Judge passed an interim direction on the very first day of admission bearing of the writ petition and allowed the appellants to deposit the earnest money by furnishing a Bank guarantee or a bankers cheque till three days after the actual date of opening of the tender. The order of the learned single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench. 12. The decision oh which the; learned Addl. Advocate General placed reliance, i.e., Poddar Still Corporation (supra), is of no help to the case of the respondents. That was a case relating to the auction sale. As per the requirement of the direction for auction sale, the earnest money was to be deposited either by cash or by demand draft drawn on SBI. The highest tenderer deposited the earnest money by certified cheque of the Union Bank of India drawn on its own Branch. Same was held to be a technical irregularity. Avoiding literal compliance of the term, the valid tender was accepted. In the said case the Apex Court noticed two categories of requirements in a tender notice those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first category, the authority issuing the tender may be required to enforce them rigidly and in the other category it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. From the facts involved in that case it will be seen that the successful bidder had deposited the earnest money of Rs. 50,000 in the form of certified cheque of the Union Bank of India instead of State Bank of India. It was in that context, the argument relating to such technical flaw did not find favour with the Apex Court. 13. 50,000 in the form of certified cheque of the Union Bank of India instead of State Bank of India. It was in that context, the argument relating to such technical flaw did not find favour with the Apex Court. 13. Unlike the aforesaid case, the question involved in the instant case is, as to whether the earnest money stood in the name of the respondent No. 4. Admittedly the earnest money stood in the name of other persons and not in the name of the respondent No. 4 in both the cases. Deposits of some amount of earnest money is a normal condition of tender process, for the obvious object that the parties which are financially sound and are serious in getting the work or contract, should only make a bid. There could be different parameters and yardsticks in respect of depositing earnest money. In whatever form it is prescribed, such earnest money must be deposited by the tenderer himself and not through any other person. The amount involved is immaterial. In the instant case, the condition has been laid down for depositing the earnest money either in the form of Government Treasury Receipt or in the form of NSC/KVP. 14. Applying the principles involved towards depositing the earnest money, I am of the considered opinion that it cannot be said that since the amount involved is a megre one, a tenderer could deviate from such settled principle relating to furnishing of earnest money. On a plain reading of Clause 5(a) of the NIT it leads to irresistible conclusion that the amount deposited as earnest money either in the form of NSC/KVP must stand in the name of the tenderer. This is the understanding in the common parlance and also on the basis of the well settled principle of furnishing Bank guarantee. Thus, can it be said that a tenderer is at liberty to furnish such earnest money standing in the name of another person. I am of the considered opinion that the answer will be, in the negative. The matter can be viewed from another angle. Had it been made known in the NIT that submission of earnest money in the form of NSC/KVP standing in the name of other person would be sufficient possibly there would have been much more contenders in the fray. 15. The matter can be viewed from another angle. Had it been made known in the NIT that submission of earnest money in the form of NSC/KVP standing in the name of other person would be sufficient possibly there would have been much more contenders in the fray. 15. The reasons assigned by the respondents towards acceptance of the tender submitted by the respondent No. 4 in both the cases are not at all acceptable. At the first instance it was rightly indicated in the remark column that the tender submitted by the respondent No. 4 in both the cases were invalid on account of furnishing of earnest money in defective form. Needless to say that the earnest money is an essential and most important ingredient for submission of tender and forms the basic requirement of a tender. The reason assigned in the counter affidavit that since the KVP/NSC although stood in the name of other persons, but the same having been assigned in favour of the competent authority, there was nothing wrong in accepting the earnest money in that form, is not tenable. The condition of furnishing earnest money in the manner and method prescribed in the NIT cannot be said to be in the category of merely ancillary or subsidiary with the main object to be achieved and consequently can be waived. Rather, furnishing the earnest money in a particular form is the essential condition of eligibility and if the respondent No. 4 in both the cases failed to comply with the same, their tenders could not have been accepted to be valid tenders. Consequently any action taken on the basis of such acceptance of defective tenders is liable to be interfered with. 16. In view of the above, both the writ petitions stand allowed by way of setting aside and quashing the work orders issued in favour of the respondent No. 4 in both the cases. The matters shall now go back to the competent authority of the respondents for a fresh consideration for allotment of works, selecting the suitable valid tenderer from amongst the valid tenderers. Needless to say that the respondent No. 4 in both the cases shall not be included in the process of such consideration. The matters shall now go back to the competent authority of the respondents for a fresh consideration for allotment of works, selecting the suitable valid tenderer from amongst the valid tenderers. Needless to say that the respondent No. 4 in both the cases shall not be included in the process of such consideration. Till such consideration is made and work orders are issued within three weeks from today, the present position relating to supply of dietary and other articles to the respective jails shall be maintained so that the inmates of the jails do not suffer any adverse consequence consequent upon setting aside and quashing of the work orders; made in favour of the respondent No. 4 in both the cases. 17. The writ petitions are allowed leaving the parties to bear their own a costs. Petition allowed.