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2005 DIGILAW 558 (GAU)

Kumud Barman v. State of Assam

2005-08-05

BROJENDRA PRASAD KATAKEY

body2005
JUDGMENT B.P. Katakey, J. 1. This writ petition is directed against the order dated 24.6.2005 issued by the Director, Health Services, Assam approving the rates quoted by the respondents No. 5 for supply of dietary articles to Mangaldai Civil Hospital during the year 2005-06, i.e., from 1.7.2005 to 30.6.2005, in groups I to VI and consequently issuing work orders for supply of the said articles. 2. The facts in brief is that a notice inviting tender was issued by the Joint Director, Health Services, Darrang, Mangaldai on 28.3.2005 inviting tender for supply of dietary articles to the Superintendent, Mangaldai Civil Hospital, Mangaldai for the period commencing from 1.4.2005 to 31.3.2006 in VI groups, namely, group I, II, III, IV, V, and VI fixing 22.3.2005 is the last date for submission of tender, stipulating that the rate will be accepted group-wise and sample will be required for item No. 1 to 9 of the items of Group -1 and reserving right by the authority to accept any tender or not to accept lowest or any other tender without showing any reason thereof. Accordingly 11 tenderers including the petitioner and respondent No. 5 submitted their tenders in respect of the items mentioned in various groups. The tenders were opened on the date fixed for the purpose, by the tender committee constituted vide office order dated 18.3.2005 issued by the Joint Director, Health Services, Darrang, Mangaldai and prepared the comparative statement. Out of the 11 tenderers 8(eight) tenderers including the petitioners and the respondents No. 5 submitted their tenders in respect of all the groups. The tender committee found that the rates quoted by the petitioner in respect of Groups I and II, to be lowest, that of Umesh Kalita and one Mainuddin to be lowest in respect of Groups III and IV and one Subhas Barman to be lowest in respect of Groups V and VI. The Joint Director, thereafter, vide communication dated 13.4.2003 send all the tenders paper to the Director, Health Services for approval. The Director, Health Services vide communication dated 24.6.2005 approved the rate offered by the respondent No. 5 in respect of all the VI groups for supply of dietary articles and accordingly work orders were issued to him. Hence the present writ petition. 3. I have heard Ms. Usha Baruah, learned Counsel for the petitioner. Mr. A.K. Thakur, learned State counsel for the respondent Nos. Hence the present writ petition. 3. I have heard Ms. Usha Baruah, learned Counsel for the petitioner. Mr. A.K. Thakur, learned State counsel for the respondent Nos. 1 to 4 and also Mr. A.S. Chowdhury, learned senior counsel appearing on behalf of the respondent No. 5. 4. Ms. Usha Baruah, learned Counsel for the petitioner has submitted that though the respondent No. 5 was not the lowest bidder in respect of any of groups, Director, Health Services by the impugned order dated 24.6.2005 approved the rates quoted by him on the ground that the rates quoted by him are the lowest rate and, therefore, the decision of the Director, Health Services suffers from total non-application of mind. The further submission of the learned Counsel for the petitioner is that he was admittedly found to be the lowest bidder in respect of two groups namely, Groups I and II, and in respect of the other groups his bid was lower than the bids of the respondent No. 5 and, therefore, the decision of the Director, Health Services in approving the rate of the respondent No. 5 on the ground of being the lowest is arbitrary, consequently the work orders issued are also illegal. Ms. Baruah, learned Counsel referring to the note given by the Joint Director, Health Services in the comparative statement to the effect that the lowest rate is not reasonable with present market price', has submitted that the petitioner was the lowest bidder in respect of the Group Nos. I and II only and in respect of other groups the other bidders other than the petitioner and respondent No. 5 were the lowest and, therefore, the action on the part of the respondent in approving the rate quoted by the respondent No. 5 by ignoring rate quoted by the petitioner, which is lower than the rate of the respondent No. 5, is arbitrary in as much as no reason has been cited as to why the rate quoted by the respondent No. 5 has been preferred over the rate of the petitioner though admittedly in respect of the other groups the petitioner's rate was lower than the rate of the respondent No. 5. According to the learned Counsel, the respondent with a view to favour the respondent No. 5 has settled the contract in his favour without any reason and also without giving the reason as to why the rates of the other tenderers cannot be accepted. It has further been submitted by the learned Counsel for the petitioner that the remark of the Joint Director that the rates quoted by the petitioner against the Group Nos. I and II is not reasonable with the present market price has also no basis and such remark has been given without there being any supporting materials on record. Hence according to the learned Counsel this Court in exercise of the power under Article 226 of the Constitution of India may interfere with the approval of the rates of the respondents No. 5 given by the Director, Health Services and also consequent work orders issued in his favour. The learned Counsel in support of her contention has placed reliance on a Single Bench decisions of this Court in Sangita Advertising Agency v. Union of India and Ors. reported in 1997(1) GLT 521and in Jay Bee Energy Services (P.) Ltd v. Oil India Ltd. and Ors. reported in 2002 (1) GLT 329 and also on a decision of the Apex Court in Tata Cellular v. Union of India reported in 1994 (6) SCC 651 . 5. Mr. A.K. Thakur, learned State counsel appearing on behalf of respondent Nos. 1 to 4, relying on affidavit-in-opposition filed on behalf of respondent No. 2, has submitted that as the rates quoted by lowest bidders were not found to be reasonable in comparison to the present market price, the rates quoted by the lowest bidders were not accepted. The authority having found that the rate quoted by the respondent No. 5, keeping in view the quality of the materials to be supplied, being viable, it was decided to accept the rates quoted by the respondent No. 5. Moreover, all the intending tenderers were informed by the NIT that the authority may accept or reject any of the tenders without assigning any reason and therefore, the petitioner cannot challenge the action of the respondent in deciding to allot the work in favour of the respondent No. 5. 6. Mr. Moreover, all the intending tenderers were informed by the NIT that the authority may accept or reject any of the tenders without assigning any reason and therefore, the petitioner cannot challenge the action of the respondent in deciding to allot the work in favour of the respondent No. 5. 6. Mr. A.S. Chowdhury, learned senior counsel, appearing on behalf of the respondent No. 5, has also submitted that it is not that no reason has been cited by the authority in rejecting the bids of the tenderers who quoted the lowest rate than the petitioner, which were rejected on the ground that the said rates are unreasonable and, therefore, the action on the part of the respondents cannot be termed as arbitrary. It has further been submitted by the learned Counsel that the rates offered by the tenderer cannot always bid a criteria for issuing the order of settlement and in the instant case the tender being for supply of dietary articles to the hospital for the patients, the authority has to take into consideration the quality of the goods and not rate alone. According to the learned Counsel the authority having taken into consideration the quality of the goods to be supplied by the respondent No. 5 has taken a decision to accept the rate offered by the respondent No. 5 though his rate was not the lowest in respect of any of the groups. Therefore, according, to the learned Counsel, the said action on the part of the respondent cannot be termed as arbitrary. Mr. Chowdhury, learned Counsel for the respondent No. 5 has also submitted that as the work has already been allotted in favour of the respondent No. 5, who commenced the supply of dietary items in terms of the work order issued by the authority and as it concerns of supply of dietary articles to the patients of the hospital, this Court keeping in view the period of settlement, may not interfere with the order approving the rates quoted by the respondent No. 5 and also the work orders issued consequently. Mr. Chowdhury, learned senior counsel in support of his contention has placed reliance on the decision of the Apex Court in W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Ors. reported in 2001 (2) SCC 451 . 7. Mr. Chowdhury, learned senior counsel in support of his contention has placed reliance on the decision of the Apex Court in W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Ors. reported in 2001 (2) SCC 451 . 7. I have considered the submissions of the learned Counsel for the parties and also perused the statement made in the writ petition, affidavits filed as well as the materials available on record produce by the learned State counsel. 8. A notice inviting tender was issued by the Joint Director Health Services, Darrang, Mangaldai on 28.3.2005 calling for bids from the intending bidders in seal cover for supply of dietary articles in six groups, i.e., Groups I to VI to the Superintendent, Mangaldai Civil Hospital, Mangaldai for the period commencing from 1.4.2005 to 31.3.2006, stipulating therein that the rate should be quoted for each item and the rates will be accepted group-wise. The last date for submission of tender was fixed 22.3.2005. It was further stipulated in the said notice inviting tender that samples are required to be submitted in respect of item Nos. 1 to 9 of the items of Group I as mentioned in the annexure - 2 to the said tender notice. There was a stipulation in the said notice inviting tender reserving the right of the authority to accept any tender or not to accept lowest or any other tender without showing any reason thereof. The petitioner and the respondent No. 5 along with nine others submitted their tenders pursuant to the said tender notice issued by the Joint Director, Health Services. 9. The tender committee was constituted for the purpose of scrutinizing the tenders submitted by different tenderers, pursuant to the aforesaid tender notice by the Joint Director of Health Services, Darrang, Mangaldai vide office order dated 18.3.2005 for recommendation of the rates by the Contractors. The tender papers were opened by the tender committee and the comparative statement was prepared. It appears from the said comparative statement prepared by the tender committee on 13.4.2005 that out of eleven tenderers three tenderers, namely, Umesh Kalita, Munindra Dutta and Prasanna Baruah did not submit their tenders in respect of Group I, Group IV and Group V for dietary items. Other eight tenderers submitted their tenders in respect of all the six groups. It appears from the said comparative statement prepared by the tender committee on 13.4.2005 that out of eleven tenderers three tenderers, namely, Umesh Kalita, Munindra Dutta and Prasanna Baruah did not submit their tenders in respect of Group I, Group IV and Group V for dietary items. Other eight tenderers submitted their tenders in respect of all the six groups. The group-wise rate offered by each of the tenders in each group is quoted below : - Name of Tenderers Group I Group II Group III Group IV Group V Group VI Ramesh Barman Rs.278 Rs.65 Rs.150 Rs.13550 Rs.370 Rs.4 Deven Das Rs.195 Rs.57 Rs.160 Rs.101.05 Rs.255 Rs.10 Golam Mahamad Rs.210 Rs. 3 Rs.100 Rs.6250 Rs.420 Rs.8 Kubbat Ali Rs.231 Rs.58 Rs.165 Rs.83.00 Rs.435 Rs.10 Umesh Kalita No Bid Rs.79 Rs.110 No Bid No Bid Rs.4.75 Munindra Dutta No Bid Rs.65 Rs.175 No Bid No Bid Rs.8 Kumad Barman Rs.105 Rs.20 Rs.135 Rs.61.05 Rs.350 Rs.4.80 Kabita Barman Rs.229 Rs. 0 Rs.145 Rs.70.00 Rs.505 Rs.61 Subhas Barman Rs.0.09 Rs.10 Rs.120 Rs.19.52 Rs.290 Rs.3.50 Prasanna Barua No Bid Rs.72 Rs.120 No Bid No Bid Rs.5 Mainuddin Rs.189 Rs.50 Rs.150 Rs.52.0 Rs.390 Rs.11 10. It also appears from the records that though the Joint Director, vide office order dated 18.3.2005 constituted the tender committee consisting of himself as Chairman, Chief Medical and Health Officer (C/D) Mangaldai, Superintendent Mangaldai Civil Hospital, Sub-Division Medical and Health Officer (H/Q)( Dr. R. K. Bara) and Sub-Division Medical and Health Officer (H/Q)( Dr. M. Hussain) as Members, the comparative statement prepared was sighed by four members including the Joint-Director of Health Services as Chairman on 13.4.2005. It appears from the said comparative statement that the bid submitted by the petitioner in respect of Group I and Group II was found to be lowest and that of Umesh Kalita in Group III, Mainuddin in Group IV, Subhash Barman in Groups V and VI. The comparative statement also reflects a note by the Joint Director, Health Services to the following effect : - Forwarded to DHS, Assam, Hangrabari, Guwahati-36. Lowest rates are encircled With red ink. But some commodities although shows lowest rate it is not reasonable with present market price. 11. The comparative statement also reflects a note by the Joint Director, Health Services to the following effect : - Forwarded to DHS, Assam, Hangrabari, Guwahati-36. Lowest rates are encircled With red ink. But some commodities although shows lowest rate it is not reasonable with present market price. 11. Thus, it is evident from the said note of the Joint Director, Health Services that although against some commodities lowest rates were quoted, it was not found reasonable with the present market price, without specifying which of the commodities for which lowest rates have been quoted are found to be unreasonable. It also appears from the comparative statement that though Subhash Barman submitted the bid of Rs. 0.09 in respect of Group I items, his bid was not considered, may be on the ground of being most unreasonable. It is also evident from the said report of the Joint Director that in respect of the other rates quoted by the parties including the petitioner and the respondent No. 5 there is no remark regarding the reasonableness or otherwise. 12. The Joint Director, Health Services on 13.4.2005 forwarded all the tender papers to the Director, Health Services for approval of rates of dietary articles submitted by the tenderers. The record produced by the learned State counsel reveals that a note was submitted on 5.5.2005 by the officer, to the Director, Health Services through Senior Finance and Accounts Officer, and Superintendent H & D seeking approval of the rates submitted by the different tenderers for supply of the dietary items pursuant to the said tender notice. It appears from the said note that the Joint Director, Health Services recommended for settlement of Group I, II, V, and VI items in favour of Kumud Barman, the writ petitioner, Group III items in favour of Umesh Kalita, Group IV items in favour of another tenderer, namely, Mainuddin. The Superintendent in turn put up a note to the Senior Finance and Accounts Officer to the effect that the recommendation of the Joint Director, Health Services may be approved. The Senior Finance and Accounts Officer on 6.5.2005 put up the file with a note to the Director, Health Services to the effect that as a matter of principle the lowest quoted rates should ordinarily be approved. The Director, Health Services signed the said note on 6.5.2005 and remarked as 'discuss'. The Senior Finance and Accounts Officer on 6.5.2005 put up the file with a note to the Director, Health Services to the effect that as a matter of principle the lowest quoted rates should ordinarily be approved. The Director, Health Services signed the said note on 6.5.2005 and remarked as 'discuss'. There is another note of the Director, Health Services dated 17.6.2005 to the Senior Finance and Accounts Officer asking him to discuss on 18.6.2005 for review. All these notes are contained in page 1 and 2 of the file No. HSHD/Diet/39/05-06 produced by the learned State counsel Mr. Thakur. Surprisingly the page number three of the note sheet has not been made available to the court. It appears from page four of the note sheet that the Director, Health Services given a note to the Senior Finance and Accounts Officer to the following effect: - After discussion Sr. FAO, it is found that the system of offering the contract falls under the following conditions - (1) Fixation of the rates of the items as per the lowest quoted rates. (2) Selection of the valid firms. 11 (eleven) firms participated in the tender. There is no firm amongst the above who quoted lowest in respect of all the groups. Shri Deven Das who participated in the tender is presently supplying dietary articles to Nalbari Civil Hospital without any complaints from the authorities. He may be selected to supply the dietary items to Mangaldai Civil Hospital at the lowest rates fixed in the C/S. Accordingly, the communication dated 24.6.2005 was issued by the Director of Health Services giving the approval for settlement for supply of dietary items in favour of the respondent No. 5 at lowest quoted rates, in respect of all the 6 groups. 13. It appears from the note sheet of the aforesaid file that all along it was recommended that it should be settled with the lowest bidder. The NIT dated 28.3.2005 stipulates that the rates will be accepted group-wise and, therefore, there can be group-wise settlement, i.e., settlement in respect of a group may be given in favour of one tenderer and it is not required that the settlement in respect of all the groups should be issued in favour of a particular tenderer. The NIT dated 28.3.2005 stipulates that the rates will be accepted group-wise and, therefore, there can be group-wise settlement, i.e., settlement in respect of a group may be given in favour of one tenderer and it is not required that the settlement in respect of all the groups should be issued in favour of a particular tenderer. In spite of the recommendation of the officers up to the level of Senior Financial and Accounts Officer recommending settlement in favour of the lowest bidder, the Director, Health Services, for the reasons not reflected by the records, has decided to award the contract in favour of the respondent No. 5 on the ground that he was supplying dietary items to another civil hospital, namely, Nalbari Civil Hospital. The Director, Health services in fact set the entire object of the tender system at naught by awarding the contract on the ground that the respondent No. 5 is supplying such articles to another civil hospital and not on the ground that the rates quoted by him is the viable rate. The manner in which the settlement is made in favour of the respondent No. 5 is, therefore, wholly arbitrary and as such action was taken by the authority without taking into account the relevant factors and by taking into account the factors which are not relevant for the purpose. The contention of the learned State counsel as well as learned senior counsel for the respondent No. 5 to the effect that the respondent No. 5's bid was accepted by the authority on the ground that the rate submitted by him is the best rate keeping in view the quality of the materials to be supplied, cannot be accepted and hence rejected, in view of the fact that the record does not reflect that the authority has decided to award the contract in favour of the respondent No. 5 on that ground. 14. The Apex Court in Tata Cellular (supra) has held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism, though exercise of such power of judicial review have inherent limitation. It has further been held that right to refuse lowest or any other tender is always available to the Government, but, the principles laid down in. It has further been held that right to refuse lowest or any other tender is always available to the Government, but, the principles laid down in. Articles 14 of the Constitution of India have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation and right to choose cannot be considered to be arbitrary power, but if said power is exercised for any collateral purpose, the exercise of that power can be struck down by the court. 15. In the instant case as held above, the authority has not decided to award the contract in favour of the respondent No. 5 on the ground that the rate quoted by him is the lowest or is the best price keeping in view the quality of the materials to be supplied. But the Director, Health Services decided to award the contract in his favour on the ground that he is supplying such materials to another civil hospital, though the Officers up to the level of the Senior Finance and Accounts Officer have recommended settlement in favour of the lowest bidder. The entire action on the part of the Director, Health services, is therefore, arbitrary and violation of Article 14 of the Constitution of India. 16. A Single Bench of this Court in Jay Bee Energy Services (P.) Ltd. (supra) has held that though the lowest bidder may not have an enforceable right to get the contract, but ordinarily the authorities concerned should accept the lowest bid and where the lowest bid is not accepted, they must give good reason for not doing so and in case of challenge before the court, they must satisfy the court that the rejection of the bid of the lowest bidder was in the public interest. In the present case the authorities have not been able to show any ground for not making settlement in favour of the lowest bidder and also any ground as to why the respondent No. 5 was preferred in terms of the rate though the writ petitioner as well as the other bidders offered almost the same rate in respect of some of the groups and in any case bids of all the tenderers are lower than that of the respondent No. 5. The grounds recorded by the Director, Health Services, in awarding the contract in favour of the respondent No. 5 cannot be accepted as it amounts to giving a go by to the tender process, which was initiated. The action on the part of the respondent is, therefore, wholly arbitrary and illegal. 17. In M/s. Sangita Advertising Agency (supra) another Single Bench of this Court has held that the decision of the authority in awarding the contract has to be just fair and within the limit of reasonableness and if the methodology adopted by the authority in susceptible to favouritism and partiality, such methodology can be termed as arbitrary and illegal. In this case also the manner in which the work was decided to be allotted in favour of the respondent No. 5, is highly arbitrary and it appears from the records that as if the same has been done to favour the respondent No. 5 with the contract. Therefore, the contention of the learned senior counsel for the respondent No. 5 that as there are some grounds in awarding the contract in favour of the respondent No. 5, the action on the part of the respondents cannot be termed as arbitrary, cannot be accepted. The further submission of the learned senior counsel for the respondent No. 5 is that since contract relates to supply of dietary items to the hospital and as the respondent No. 5 has started the work of supply of dietary items pursuant to the approval accorded by the Director of Health Services vide communication dated 24.6.2005, this Court may not interfere with the order of settlement. The said contention also cannot be accepted, as the manner in which the approval has been accorded by the Director, Health Services, in spite of recommendation of the officers up to the level of the Senior Finance and Accounts Officer to settle the contract in favour of the lowest bidder, is highly arbitrary and illegal and such action cannot be allowed to remain in force on the ground that the supply is to be given to the hospital. In the present case it appears from the pleadings of the parties that though the period of settlement was to commence from 1.3.2005, because of delay in issuance of tender notice and finalizing the contract, the supply was made by the writ petitioner till the end of June 2005. In the present case it appears from the pleadings of the parties that though the period of settlement was to commence from 1.3.2005, because of delay in issuance of tender notice and finalizing the contract, the supply was made by the writ petitioner till the end of June 2005. Therefore, even if the order of approval and also the order of settlement in favour of the respondent No. 5 is set aside, the authority can make alternative arrangement for getting supply to the dietary items to the hospital and, therefore, the patients will not suffer. 18. Referring to the decision of the Apex Court in W.B. State Electricity Board (supra), the learned senior counsel for the respondent No. 5 has submitted that there is no obligation on the part of the authority to settle the contract with the lowest bidder. It has further been submitted by the learned Counsel that since there is a clause in the notice inviting tender to the effect that the authority can accept or reject any tender without assigning any reason, the writ petitioner cannot challenge the order issued in favour of the respondent No. 5. The writ court in exercise of the power of judicial review can definitely look into the manner in which final order has been passed and if there is illegality in the procedure or arbitrariness or favouritism in action, the same can definitely be interfered with by the writ court, irrespective of the fact that such a condition exits in the notice inviting tender. The power of rejecting or accepting any bid without reason cannot give the power on the authority to act arbitrarily and whimsically as has been done in the instant case. The Apex Court in W.B. State Electricity Board (supra) has also held that there cannot be any favouritism or discrimination in awarding public works to the contractor and the contract is normally awarded to the lowest tenderer, which is in public interest. The principle of awarding contract to the lowest tenderer applies when all the things are equal. It has further been held that merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. 19. The principle of awarding contract to the lowest tenderer applies when all the things are equal. It has further been held that merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. 19. As discussed above, in the instant case the authority has not decided to award the contract in favour of the respondent No. 5 on the ground that the petitioner's bid is the lowest or his bid is most suitable bid keeping in view the quality of goods to be supplied, but he has been favoured with the contract at the lowest bid offered by other tenderers, as reflected from the note of Director, Health Services dated 23.6.2005, which has already been quoted above. It is, therefore, apparent that the lowest bid offered by the other tenderers have not been rejected on the ground that those rates are not viable, but the work has been allotted to the respondent No. 5 as because he is supplying such articles to another civil hospital, namely, Nalbari Civil Hospital and at the lowest rate offered by other tenderers. The authority while passing that order has also failed to take into consideration the fact that the petitioner is also supplying such materials to Mangaldai Civil Hospital till the end of June 2005, who was the settlement holder for the period of 2004-05. The entire action on the part of the respondents authority is, therefore, highly arbitrary having smack of favouritism and hence illegal. 20. In view of the above, the approval accorded by the Director, Health Services, which has been communicated vide communication dated 24.6.2005 is set aside. Consequently the work orders issued pursuant to such approval in favour of the respondent No. 5 are also set aside. However, the respondent No. 5 shall be entitled to receive payment for the materials supplied by him till date. The authorities are directed to reconsider the tenders submitted by various tenderers and take a final decision on such tenders within a period of thirty days from today. For the aforesaid period of thirty days, keeping in view the interest of the patient of the hospital, the respondent No. 5 shall be allowed to supply the dietary articles in all the six groups at the lowest rate quoted by the tenderers in respect of each group, pursuant to the NIT dated 28.3.2005. 21. For the aforesaid period of thirty days, keeping in view the interest of the patient of the hospital, the respondent No. 5 shall be allowed to supply the dietary articles in all the six groups at the lowest rate quoted by the tenderers in respect of each group, pursuant to the NIT dated 28.3.2005. 21. The writ petition is accordingly allowed. No cost. Writ petition allowed