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2006 DIGILAW 796 (PAT)

H. M. Settes Limited v. State Of Bihar

2006-09-04

NAVANITI PRASAD SINGH

body2006
Judgment 1. Heard. 2. This writ application has been filed by the petitioner challenging, in effect, the rejection of his tender. The challenge is primarily on the ground that the petitioner had been wrongfully and mala fidely rejected the very contract. 3. Heard Mr. S.D. Sanjay, learned senior counsel for the petitioner. 4. State has filed a counter affidavit and is represented by learned Advocate General. 5. During the pendency of the writ application tenders were finalised and the intervenor has entered appearance through Mr. Vikash Jain, who represents successful tenderer. 6. The main contention on behalf of the petitioner is that pursuant to a notice inviting tender for various sizes of pipes, tenders were filed. First, for some reason the tenders were not finalised. Further notice inviting tender was issued in June, 2006. The last day for selling tender paper was fixed as 22.6.2006. The petitioner, who is the manufacturer of pipes in the State of Himachal Pradesh, purchased these fresh tender papers on 19.6.2006. The tenders were to be filed in two separate volume marked technical bid and financial bid. It is not disputed that in terms of the notice inviting tender one of the conditions was that all tenderers had to submit earnest money Earnest money could be submitted in the three counts as specified in the notice. It could be by way of fixed deposit received endorsement in favour of the State or by way of demand draft in favour of the State or by way of a bank guarantee issued by a scheduled bank for the period specified in the notice. The petitioner submits that he filed four sets of tender papers for four tender types. In the technical bid, as required, he had furnished four bank guarantee issued by Punjab National Bank, Nahan Branch (Himachal Pradesh). On 23.6.06 the tenders were to be opened and were opened. At the time of opening of tenders a statement was drawn up, which is Annexure E to the supplementary counter affidavit of the State that shows that the petitioners technical bid, which contained bank guarantee was duly opened. On 24.6.06 a decision was taken by the Tender Committee, which is appended as Annexure D to the supplementary counter affidavit stating that the petitioners bid was being rejected because the bank guarantee was not found in order in respect of earnest money in all tenders. On 24.6.06 a decision was taken by the Tender Committee, which is appended as Annexure D to the supplementary counter affidavit stating that the petitioners bid was being rejected because the bank guarantee was not found in order in respect of earnest money in all tenders. On 26.6.06 the financial bid was opened but the petitioner was excluded. 7. On behalf of the petitioner it is submitted that bank guarantee as offered by the petitioner and annexed to his tender bid was legal and valid and the authorities acted mala fide in rejecting the same. The question is whether the action of the respondents is mala fide and is liable to be set aside or not because this court is of the opinion that if the actions of the respondents are reasonable and bona fide the decision may be wrong but that will not call for any interference. Further there may be a better way of deciding thing but that will not lead to vitiating an order of this nature. What can only vitiate is absence of material justifying the action or mala fide action. Here the State has filed the copy of the alleged bank guarantee, as Annexure A to their counter affidavit. A reference to the said bank guarantee shows that it is not a bank guarantee in original but an amendment alongwith extension letter purported to have been issued by Punjab National Bank, Nahan Branch (Himachal Pradesh). The said bank guarantee on the face of it does not inspire confidence rather to the contrary raises suspicion to its validity. This is so because, important and material part of the letters are amended by insertion of new line and sentences in different inks. Such letters are normally not seen. The bank guarantee is altered. The tender number is altered, all in different inks with no rubber stamp. I have no reason of doubt that suspicion raised by the authority with regard to genuineness of the guarantee was bonafide which cannot be termed as mala fide. 8. Next the State in order to substantiate its action has brought on record the letter written by the Chief Engineer in reference to the said tender to the Local Zonal Office of the Punjab National Bank, Patna, enquiring whether a bank guarantee could be amended/extended on a letter pad of the bank. 8. Next the State in order to substantiate its action has brought on record the letter written by the Chief Engineer in reference to the said tender to the Local Zonal Office of the Punjab National Bank, Patna, enquiring whether a bank guarantee could be amended/extended on a letter pad of the bank. The same day the Chief Manager of the Zonal Office of Punjab National Bank replied that such extension could not be granted on a letter pad and it had to be on stamp paper. This reply is dated 24.6.06. Acting on basis thereon, the technical bid of the petitioner was rejected. It is this action which is assailed by the petitioner on the ground that in several tenders State has accepted such amendment letter. Amendment of bank guarantee on letter pad is valid in law and therefore rejection of petitioners tender was mala fide. 9. Having considered the facts aforesaid, I would only like to add that for the same tender other tenderers had also filed amendment/extension of bank guarantee already issued. The State found that they were on all stamp papers. The State found that bank guarantee extension/amendment as given by the petitioner was not only on the pad of the bank but it was written in different inks. This is coupled by the reply of the Chief Manager of Patna Zonal Office of Punjab National Bank, Patna, they took a decision. In my view, it cannot be said that the said decision was mala fide in any manner. The very look of bank guarantee, as furnished, does not inspire any confidence. However, State acted bona fide in making enquiry and, that too, at a senior level locally it has called and acted on basis of the reply received. A subsequent clarification given by the same officer is of no avail to judge the action which was taken earlier. The question is could action be taken on the materials available on record? The answer here is yes, for the simple reason, that the court sitting in writ jurisdiction cannot go into sufficiency of materials so long as material is available on record. It is well settled that if an authority is acting on basis of material, his action cannot be questioned unless it is shown that those materials are either irrelevant or there was absence of any material. It is well settled that if an authority is acting on basis of material, his action cannot be questioned unless it is shown that those materials are either irrelevant or there was absence of any material. The descretion is exercised, though could have been exercised in a different manner, will not be enquired in a judicial review. 10. The Apex Court in the case of Food Corporation of India vs. M/s Kamdhenu Cattle Feed Industries since reported in AIR 1993 S.C. 1601 in para 8 has held thus: "Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimants perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny." 11. In that view of the matter, I find no merit in this application and it is accordingly dismissed.