Radha Exports (India) Pvt. Ltd. v. Government of Tamil Nadu, rep. by its Secretary, Industries Department, Chennai & Others
2006-08-30
A.P.SHAH, K.CHANDRU
body2006
DigiLaw.ai
Judgment :- K. Chandru, J. The appellant, being aggrieved against the order of the learned single Judge dated 21.8.2006, has filed the present writ petition. 2. The appellant, pursuant to the Notice Inviting Tender (for short, 'NIT') issued by the second respondent, submitted his tender proposals. In paragraph 13 of the NIT issued by the second respondent, the following conditions were provided apart from other conditions: "13.A) Quotation - Two Cover System: The tender should be submitted in 2 cover system viz:. i. Cover -1: Technical bid: It shall contain (a) EMD of Rs. 1,00,000/- (Rupees one lakh only) per quarry; (b) Audited Accounts for the year 2002-2003, 2003-2004 & 2004-2005; (c) Status proof SSI Certificate, EOU Certificate, proof of having factory etc., as stated in 1(a)(iv); (d) Undertaking to the effect that the firm/buyer do not fit into any of the categories mentioned in para 1(b); (e) Consent letter to furnish Performance Guarantee by way of Bank Guarantee as mentioned in 12(iv); (f) Proof of established clientele, financial soundness, ownership/lease of factories, warehouses, stockyard, etc. Cover-I should be superscribed "Cover-1-Technical bid" on the face of the cover and sealed. This will be opened first. The tenderer should specifically mention the quarry's name for which EMD remitted. Otherwise, TAMIN may decide quarry wise as per offer of the party and TAMIN's decision will he final. ii. Cover-II: Price Bid - The second sealed cover containing the price/rate quotation as perAnnexure-3 for each quarry in a separate sealed envelope with the name of the quarry and put into a common Cover superscribed as "Cover-II - Price/Rate Quotation" on the face of the cover. This Cover-II will be opened only if the tenderer it’s qualified to execute the Tender as per Cover-I (Technical Bid). The individual envelope of each quarry will be opened only if the tenderer is found qualified for the respective quarry. iii. Covers I and II both scaled separately should be put in a common cover sealed and dropped in the tender box. iv. If the tenderer fails to comply with the above conditions, their offers will be totally rejected. B) Earnest Money Deposit: Each tender must be accompanied by a deposit of Rs. 1,00,000/- (Rupees one lakh only) to be specified as Earnest Money De-posit FOR EACH QUARRY by Demand Draft on any Nationalised Bank payable in favour of Tamil Nadu Minerals Limited, CHENNAI - 600 005.
B) Earnest Money Deposit: Each tender must be accompanied by a deposit of Rs. 1,00,000/- (Rupees one lakh only) to be specified as Earnest Money De-posit FOR EACH QUARRY by Demand Draft on any Nationalised Bank payable in favour of Tamil Nadu Minerals Limited, CHENNAI - 600 005. The EMD will he forfeited if the tenderers subsequent to the Sale Award fails to open the Letter of Credit, or furnish Performance Guarantee in the form of Bank Guarantee and remit the Security Deposit within the stipulated period. This is without prejudice to other rights that are available. EMD will be refunded to the unsuccessful tenderers within a reasonable time and it will not bear any interest. Tenders received without EMD will be sumarily rejected. The EMD amount of successful tenderer will be adjusted against the Security Deposit if they satisfy all other above conditions. The EMD will be forfeited if the party does not respond to the call for negotiation of rates, etc." (Emphasis added) 3. Pursuant to the NIT, in order to participate in the 23rd Global Tender, the appellant downloaded the application and submitted his application for 33 quarries out of 66 quarries. It was also stated by the appellant in the affidavit filed in support of W.P. No. 24252 of 2006, that he obtained 33 Demand Drafts each for Rs. 2000/- towards application fee and another 33 Demand Drafts each for Rs. 1000/- towards the Earnest Money Deposit (for short, 'EMD’) through the Standard Chartered Bank. It is submitted that the said Bank is a Scheduled Bank and not a Nationalised Bank as specified in the NIT. According to the petitioner, all rates were quoted by them in the tender in terms of USS and all the transactions were with the Standard Chartered Bank, Amex Bank and ING Vysya Bank, which, according to the petitioner, are all recognised by the Reserve Bank of India. In essence, what he is attempting to put forth before this Court is that, they are Scheduled Banks coming under the Banking Companies Act. It is further stated by the appellant that on 26.7.2006 when the price hid was to be opened, only a few persons were permitted to participate in the price bid and they were not selected as an eligible person.
It is further stated by the appellant that on 26.7.2006 when the price hid was to be opened, only a few persons were permitted to participate in the price bid and they were not selected as an eligible person. The appellant was orally informed that since their payments of EMD and fees and application fees were not paid through Nationalised Bank and it was paid only through other Banks, his bids were not accepted by the third respondent. Aggrieved by the same, the appellant filed W.P.No.24252 of 2006, seeking for a direction to the third respondent to reconsider the application of the petitioner in so far as the selection of eligible application in respect of the 23rd Global Tender is concerned. They also took out applications for interim order. 4. The second respondent filed a detailed counter affidavit and in paragraph 2, it was stated as follows: "The second respondent, TAMIN floated the 23rd Global Tender on 21.6.2006 for the sale of Dimensional Granite Block of its various quarries situated all over the State. The Tender was floated under two cover system. The Cover-I (containing ENID and other details with reference to the eligibility to participate in the Tender) was opened on 24.7.2006 at 11.30 a.m., and the Cover-II (containing the price bid of eligible tenderers) was opened on 26.7.2006. In response to the Tender, totally 68 Tender offers welt received, out of which Cover-I of the 13 para ties including the petitioner who have not furnished the Demand Draft from the Nationalised Bank as per the Tender condition were rejected." It was further stated in paragraph 5 of the counter affidavit as follows: "It is submitted that it is normal practice in any Tender to announce the list of eligible/qualified tenderers just before taking up the price bid opening and open the pee bids of only the qualified tenderers. Accordingly, the list of qualified tenderers were read out on 26.7.2006 for information of all the tenderers present as per the initial examination report of the 68 offers received on 24.7.2006. All the tenderers who were not qualified to participate in the tender were informed of the reasons for the same on 26.7.2006. The petitioner was also in-formed that the Demand Drafts for the EMD furnished by them were not obtained front the Nationalised Banks as per the Tender Condition No. 13(B).
All the tenderers who were not qualified to participate in the tender were informed of the reasons for the same on 26.7.2006. The petitioner was also in-formed that the Demand Drafts for the EMD furnished by them were not obtained front the Nationalised Banks as per the Tender Condition No. 13(B). Radha Exports (India) Pvt. Ltd., Chennai, the petitioner herein, have strongly objected to his rejection on this ground and insisted that the Tender process should be immediately stopped. However, several other tender participants present for the Tender opening vehemently objected the demand for stopping of Tender price bid opening stating that the Tender of Radha Exports (India) Pvt. Ltd., should not be accepted, as the same is not as per the Tender condition on EMD." 5. The learned Judge, who heard the arguments of both sides, finally passed an order dated 21.8.2006, dismissing the writ petition filed by the appellant. At paragraph 19 of the order, the learned Judge held as follows: "The very fact the above said default clause is introduced or incorporated in the 'Instructions to the tenderers' would suggest, empathetically, the condition that the Demand Drafts should be drawn on any Nationalised Bank, will not come within the meaning of 'ancillary' or `subsidiary' condition and in this view, that condition also should he strictly followed, irrespective of the consequences. The petitioner, knowing fully well, that the 'Instructions' contemplated Demand Drafts to be drawn on any Nationalised Bank, should have drawn the Demand Drafts only from the Nationalised Bank, not from any other Bank. Despite the fact, the petitioner knew Condition No. 13-A(iv), he himself has violated the conditions and this being the position, he cannot blame the Authorities concerned and seek the aid of the Court, under Article 226 of the Constitution of India, as if his right is affected by the illegality or arbitrariness, said to have been committed by the respondents." Aggrieved by the said order, the present appeal has been filed. 6. Notice was taken by the respondents/caveators. We have heard the arguments of Mr. T.R. Rajagopalan, learned Senior Counsel appearing for Mr. Haja Mohideen Gisthi, learned counsel for the appellant, and also Mr. R. Viduthalai, learned Advocate-General, appearing for Ms. A.V. Bharathi, learned counsel for the second respondent and have perused the records. We find no substance in the writ appeal and the same deserves to be dismissed. 7.
T.R. Rajagopalan, learned Senior Counsel appearing for Mr. Haja Mohideen Gisthi, learned counsel for the appellant, and also Mr. R. Viduthalai, learned Advocate-General, appearing for Ms. A.V. Bharathi, learned counsel for the second respondent and have perused the records. We find no substance in the writ appeal and the same deserves to be dismissed. 7. The learned Senior Counsel Mr. T.R. Rajagopalan appearing for the appellant con-tended that while the condition, viz., a person should pay EMD by way of Demand Draft is an essential condition and it is mandatory, however, the condition that it should be obtained from a Nationalised Bank and not from any other Bank, cannot be said to be mandatory. If at all, it could be an ancillary or incidental condition and the authorities can always waive that condition. The petitioner also has given Demand Draft from a Scheduled Bank, which would amount to a substantial compliance by the appellant. It is submitted by the learned Senior Counsel that by the rejection of the bid, the appellant will really be edged out from the competitive participation and it will narrow down the total number of participants, which is not in the interest of the second respondent organisation. Learned Senior Counsel further stated that in view of the fact that his bid has been rejected on a very trivial issue, this Court, in its exercise of power under Article 226 of the Constitution of India, should come to the rescue of the appellant and direct the respondents to consider the same. 8. However, in making the submission, the appellant did not dispute that it was not only in the case of the appellant, bids were rejected on the ground that the Demand Drafts were not obtained from a Nationalised Bank, but as found already, that out o 168 tender offers, 13 parties including the appellant have not furnished the Demand Draft from the Nationalised Bank and all of them were rejected. None of the other 12 participants have chosen to challenge the same and only the appellant has come before us. 9.
None of the other 12 participants have chosen to challenge the same and only the appellant has come before us. 9. When the learned Senior Counsel appearing for the appellant was asked as to what is the legal right of his client in seeking for a direction to the second respondent to consider the bid submitted by the appellant even though the conditions provided in the NIT were violated by them and the authorities having rightly rejected the bid submitted by the appellant, he drew our attention to the decision of the Supreme Court in G.J. Fernandez v. Stale of Karnataka AIR 1990 SC 958 : (1990) 2 SCC 488 . The learned Senior Counsel, after pointing out paragraph Nos. 15 and 16 of the judgment, stated that the Court can always interfere if the conditions are not mandatory but are only incidental or ancillary to the main condition. The paragraphs cited by the learned Senior Counsel actually go against the contentions put forth by him. In paragraph 15, the Supreme Court held as follows: "15. Right or wrong, this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along. The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract, but, on the contrary, decided to adhere to it even in regard to this contract. They only decided, in view of the contentions raised by the appellant that para V should also be treated as part of the pre-qualifying conditions, that they would make it specific and clear in their future NITs that only the fulfilment of prequalifying conditions would be mandatory. If a party has been consistently and bona fide interpreting the standards prescribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe the conditions differently." (Emphasis supplied) In paragraph 16, it was held as follows: “16. The conditions and stipulations in a tender notice like this have two types of con-sequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them.
The conditions and stipulations in a tender notice like this have two types of con-sequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them. Thus, if a party does not strictly comply with the requirements of pants III, V or VI of the NIT it is open to the KPC to decline to consider the party for the contract and if a party comes to Court saying that the KPC should be stopped from doing so, the Court will decline relief The second consequence, indicated by this Court in earlier decisions, is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination." (Emphasis supplied) 10. As seen from the above, that was not a case where the Court came to the rescue of a person whose hid was rejected. But on the contrary, the Court refused to go into the question of the merits and demerits of the decision made by authorities and finally, the petitions were dismissed on the ground that it was not for the Court to determine such an issue. 11. The learned Senior Counsel also drew our attention to the decision of the Supreme Court in Poddar Steel Corporation v. Ganesh Engineering Works AIR 1991 SC 1579 : (1991) 3 SCC 273 in which the Supreme Court, after referring to the earlier decision, in paragraph 6 has held as follows: "6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank, Clause No. 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition, it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can he classified into two categories - 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.
The requirements in a tender notice can he classified into two categories - 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 case, the Authority issuing the tender may he required to enforce them rigidly. In the other cases, 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. This aspect was examined by this Court in G.J. Fernandez v. State of Karnataka AIR 1990 SC 958 : (1990) 2 SCC 488, a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramona Dayaram Shetty v. International India AIR SC 1628 : (1979) 3 SCC 489 , but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the short-coming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However, it remains to he seen as to which of the two clauses the present case belongs." After laying down the legal proposition, the Supreme Court in paragraph 8 of the very same judgment observed as follows: "In the present case, the certified cheque of the Union Bank of India drawn on its own Branch must be treated as sufficient for the purpose of achieving the object of the conditions and the Tender Committee took the abundant caution by a further verification from the Bank. In this situation, it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of Clause 6, specially when it was in its interest not to reject the said hid which was the highest.
In this situation, it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of Clause 6, specially when it was in its interest not to reject the said hid which was the highest. We, therefore, set aside the impugned judgment and dismiss the writ petition of the respondent No. 1 filed before the High Court." (Emphasis supplied) 12. In both the decisions, the Supreme Court had upheld only the right of the authorities to go into the question as the essential and inessential conditions. It was only where the decision-making authorities waived conditions in the NIT, which are not essential, then that action of the authorities alone were upheld by the Court. But that does not mean that this Court, exercising its power under Article 226 of the Constitution of India, can interfere with every tender process thereby nullifying the decision of the authorities as in the long run it will result in chaos and many projects would be stultified without there being any benefit to the society. 13. In order to convince this Bench that this Court can interfere directly in the issue of acceptance of tender by the authorities, the learned Senior Counsel relied upon the judgment of the Kerala High Court in T. V. Subhadra Amnia v. Kerala Board of Revenue AIR 1982 Ker. 81 and the judgment of the Bombay High Court in B.D. Yadav and M.R. Meshram, Engineers and Contractors v. Administrator of the City of Nagpur AIR 1984 Bom. 351 . The learned Senior Counsel submitted that these two decisions found approval in the decision of the Supreme Court second cited above. 14. We are afraid that we are unable to draw any such conclusion from going through those decisions and certainly, it is not within our domain to interfere with the decision of the respondents as they had not deliberately violated the conditions imposed in NIT. Since 12 other bids were also rejected on the similar ground, any direction issued at this juncture to consider the case of the appellant alone, will be grossly unjust and it will further hamper the process initiated by the respondents in respect of their Global Tender. 15.
Since 12 other bids were also rejected on the similar ground, any direction issued at this juncture to consider the case of the appellant alone, will be grossly unjust and it will further hamper the process initiated by the respondents in respect of their Global Tender. 15. In the light of the above, there is no case made out by the appellant and there are no grounds to interfere with the decision rendered by the learned single Judge. Hence, the writ appeal shall stand dismissed. Consequently, M.P.Nos.1 of 2006 and 2 of 2006 shall also stand dismissed. However, there will be no order as to cost. Writ appeal dismissed.