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Madhya Pradesh High Court · body

2010 DIGILAW 556 (MP)

Gajendra v. State of M. P.

2010-05-14

ARUN MISHRA, SUSHMA SHRIVASTAVA

body2010
JUDGMENT : Asper Arun Mishra , J.:- Petitionersubmitted the tender form obtaining liquor shops. He has prayed that hisfinancial bid be opened and it be ordered to be accepted in case it is highest,and, to provide reasonable lime to the petitioner to comply with the requiredformalities. 2.Petitioner has averred that petitioner submitted tender for obtaining licence of the shops in question. Due to work pressure andbona fide mistake, he submitted the tender Form I in theenvelop meant for financial bid. On the ground that petitioner did notsubmit Tender Form Part I, his financial bid has not been opened and hasresulted into rejection of his tender which was highest. Petitioner submittedthe representation, same was without any avail. Under the Policy (P-2) for theyear 2010-11, the tenders were invited in Form (P-3). Petitioner submits thathe submitted draft of security amount, consent agreement, self-attesteddocuments relating to photo identity proof and resident proof, PAN Card,attested copy of bank account number, notarized affidavit, but wrongly placedthe tender form Part I in the financial bid envelope No. 2, both the envelopswere put in a bigger envelop and the forms were deposited vide receipts (P-4and P-5). On coming to know of the mistake, petitioner moved an applicationthat tender form Part I has been placed in tender form Part II. The CollectorExcise has passed an order (P-6) rejecting the prayer of the petitioner to openthe financial bid. As against Order (P-6) passed by the Collector, Excise,petitioner filed representation before Excise Commissioner. Representation hasbeen rejected vide Order (P-1), dated 22-3-2010 by the Excise Commissioner. It has been held that envelop of financial bidcould not have been opened as tender form Part I was not contained in envelopof eligibility, i.e., envelop No. 1. Hence, instant petition has beenpreferred. 3.In the return filed by respondent Nos. 1 to 3, it is contended that Part I ofthe tender is an important document to ascertain the eligibility, eligibilitypart was not available on opening envelop No. 1, consequently, District ExciseCommittee has decided not to consider the financial bid. Orders passed by theCollector and Commissioner, Excise are proper. Clause 13.5 provides that tendershall be received only on tender form printed and supplied by the ExciseDepartment. Clause 13.6 provides that tenderer has tosubmit his identification and proof of residence. Clause 13.8 which is relevantfor the controversy in the instant case provides thattender form issued shall be in two parts. Orders passed by theCollector and Commissioner, Excise are proper. Clause 13.5 provides that tendershall be received only on tender form printed and supplied by the ExciseDepartment. Clause 13.6 provides that tenderer has tosubmit his identification and proof of residence. Clause 13.8 which is relevantfor the controversy in the instant case provides thattender form issued shall be in two parts. In Part I tenderer has to give details of the required security deposits, acceptance deed, proofof identification and residence along with the relevant documents, PAN Card,details of the bank account and other documents along with notarized affidavit. Tenderer is required to clearly specify the name andnumber of his shop and his offer in numeral and words in Part II of the tender.There is clear direction that the financial bid (Part II) of the tender is tobe kept in separate envelope and sealed. The financial bid could be opened onlywhen a person qualifies in the eligibility criteria while evaluating Part I ofthe tender document. The procedure was duly informed to all and was required tobe followed by the tenderers . Clause 13.11 providesthat tender shall be opened in descending order of the reserved price. Firstly,Part I of the tender shall be opened and eligibility of the tenderer would be determined. It is only after satisfaction of the Committee about thesecurity deposit and all documents being in order, the District Committee wouldopen Part II of the tender, i.e., financial bid. Clause 13.13 stipulates thatfinancial bid shall not be rejected on account of clerical or general error. TheDistrict Excise Committee is empowered to get necessary correction done on thespot. In the instant case, mandatory requirement was not fulfilled as suchenvelop containing financial bid could not have been opened. Thus, action takenis in accordance with law. 4.In the return filed by respondent No. 5 it is contended that as the requisitedetails which were necessary for qualification round were not found in envelopNo. 1, and as per stipulation in the tender document, envelop No. 2 could not havebeen opened, thus, rejection of tender of the petitioner was.proper ,agreement has been entered into with the answering respondent. 5. Shri Narendra Singh Kirar , learned Counsel appearing for petitioner hassubmitted that it was a case of clerical mistake due to which the tenderdocument Part I was placed into envelop No. 2, instead of envelop No. 1. 5. Shri Narendra Singh Kirar , learned Counsel appearing for petitioner hassubmitted that it was a case of clerical mistake due to which the tenderdocument Part I was placed into envelop No. 2, instead of envelop No. 1. Oncoming to know of the mistake, prayer was made to open theenvelop 2nd containing the financial bid. Rejection of the prayer couldnot have been said to be legal. By opening the financial bid, State would havebeen benefited in case contract was granted to the petitioner as his bid wasthe highest for both the shops. The condition of placing the tender documentand other documents in Part I could not be said to be mandatory. Thus, therespondents have acted illegally while rejecting the prayer made by thepetitioner and granting the contract of the shops in question to respondentNos. 4 and 5. Petitioner is a common man, he could notbe saddled with the responsibility of knowing the technical aspects of law. Thepurpose of Tender Form I is clerical so as to obtaininformation at a glance, envelop No. 2 contained unsplited tender document. Submission of both parts of the tender documents was material which were filed. Disqualification of thepetitioner could not be said to be a decision taken in accordance with law.Tender of the petitioner could not have been rejected in the circumstances ofthe case. He has relied upon decisions to be referred later. 6. Shri N aman Nagrath , learned Addl. AG and Ms. Gurleen Chhabra , learned Counsel appearing for respondentshave submitted that financial bid could not have been opened. As per conditionof the tender, it was necessary to qualify for opening of the 2nd envelop.Thus, rejection of the tender of the petitioner was proper. It was notpossible, in the absence of document forming Part I of the tender, to ascertain lor which of the shops the petitioner has submittedthe tenders the other requisite documents necessary for the purpose ofqualification were not found in envelop No. 1. Thus, petitioner was rightlydisqualified. 7.In order to appreciate whether the financial bid envelop 2nd could have beenopened in order to ascertain eligibility is required to be examined in view ofClause 13 of the tender document. The Clause 13.8 provides that in Part I ofthe tender document, the tenderer has to furnish thedetails of security deposit, consent agreement, documents as to his identify,PAN Card, bank account No., notarized affidavit and other necessary documents. The Clause 13.8 provides that in Part I ofthe tender document, the tenderer has to furnish thedetails of security deposit, consent agreement, documents as to his identify,PAN Card, bank account No., notarized affidavit and other necessary documents. Tenderer has to mention the names of shops and of the groupconcerned for which the tender has been submitted. Financial offer was requiredto be submitted in Part II of the tender. It was clearly mentioned in Clause13.8 that financial bid Part II has to be kept in a separate envelop and in the3rd envelop post dated cheque of 1/12th amount of theoffer made had to be submitted. The tender Parts I and II were required to bekept in separate envelops and then in one common big envelop. It was clearlymentioned in Condition No. 13.11 that firstly Part I of the tender will beopened and eligibility shall be considered. Once satisfaction is reached withrespect to the eligibility and submitting the security equal to the basic licence fee only thereafter Part II containing thefinancial bid will be opened. In case post dated cheque of 1/12th amount is not found, the offer made, i.e., financial bid will not beconsidered. Clause 13.13 provides that in case of clerical error or generalerror, financial bid will not be disallowed and such error could be correctedby the District Committee on the spot under the guidance of theCollector/Commissioner, Excise. Condition Nos. 13.8, 13.11 and 13.13 are quotedbelow:- Inour opinion, taking into consideration Clauses 13.8 and 13.11, the envelopcontaining financial bid could not be opened in the absence of petitionerhaving qualified on the basis of Part I of tender document to be placed inenvelop No. 1. There is purpose behind keeping secret the financial bid.Question of opening the envelop 2nd containing thefinancial bid arises only after qualification round. There is secrecy as tofinancial bid. The envelop containing it could not have been opened at thestage of qualification round. It was a fatal error committed by the petitionerwhich was beyond periphery of being corrected. There was no scope to entertainany doubt that financial bid was not to be opened in case an incumbent fails inqualifying round in which necessary documents including the names of shops orgroup were required to be mentioned along with other necessary documentsmentioned above. Admittedly, in envelop No. 1 necessary documents were notsubmitted. There was no scope to entertainany doubt that financial bid was not to be opened in case an incumbent fails inqualifying round in which necessary documents including the names of shops orgroup were required to be mentioned along with other necessary documentsmentioned above. Admittedly, in envelop No. 1 necessary documents were notsubmitted. As per condition No. 13.11 envelop 2nd could not have been openedunless a person fulfills the eligibility round. Thus, prayer made later on bythe petitioner, as apparent from representation filed to the Collector, Excisethat his financial bid envelop be opened, could not have been accepted. By thattime qualification round was already over and the tender document Part I itselfwas not found in envelop No. 1. The submission raised that it is a case of clerical error cannot be accepted. Such an error could nothave been corrected within the purview of Clause 13.13 of tender document.Thus, rejection of petitioner's tender and his disqualification while openingenvelop No. 1 was proper. 8.In W.B. State Electricity Board Vs. Patel Engineering Co. Ltd. and others, (2001) 2 SCC 451 , relied on by State Counsel, the Apex Court has laid down thatnegligent mistakes in bid documents cannot be permitted to be corrected onbasis of equity. Where facts indicate that ( i ) it wasnot beyond the control of bidder to correct the error before submission of bid;(ii) that he was not vigilant, and (iii) that he did not seek to makecorrections at the earliest opportunity, such bidder cannot be permitted tocorrect his bid documents afterwards. The Apex Court held in such circumstances strict adherence to instructions to bidders isessential and cannot be branded a pedantic approach. The Apex Court laid down that the High Court was not rightin allowing the corrections to be made. The Apex Court laid down that relief on the ground of mistake cannot be granted. The ApexCourt further laid down such corrections are not permissible under the Rulesgoverning the process of tender, it was not within the scope of judicial reviewof the Court to interfere under Article 226 of the Constitution. The Rules andinstructions must be complied with scrupulously in order to avoiddiscrimination, arbitrariness and favoritism, which are contrary to rule of lawand constitutional values. Relaxation by State or its agencies of a rule orcondition in favour of a particular bidder is notpermissible unless expressly provided for in the rules. The Rules andinstructions must be complied with scrupulously in order to avoiddiscrimination, arbitrariness and favoritism, which are contrary to rule of lawand constitutional values. Relaxation by State or its agencies of a rule orcondition in favour of a particular bidder is notpermissible unless expressly provided for in the rules. The Apex Court has referred to the decision in Tata Cellular Vs . Union of India, AIR 1996 SC 11 = (1994) 6 SCC 651 , laying down the parameters of the judicialinterference in such contractual matters. The Apex Court in Para 14 hasreferred to the ratio of Tata Cellular Vs. Union ofIndia (supra), thus : - "14.Before proceeding to ascertain answers to the above questions, it will beuseful to bear in mind the principles governing the exercise of power ofjudicial review by the High Courts. We consider it unnecessary to refer tocases on the scope of the power of judicial review of administrative action bythe High Court as a three Judge Bench of this Court has, after exhaustive considerationof long line of authorities, succinctly summarized the position and laid downthe following principles in Tata Cellular Vs. Unionof India, (1994) 6 SCC 651 (SCC pp. 687-88, Para 94): (1)The modern trend points to judicial restraint in administrative action. (2)The Court does not sit as a Court of appeal but merely reviews the manner inwhich the decision was made. (3)The Court does not have the expertise to correct the administrative decision.If a review of the administrative decision is permitted it will be substitutingits own decision, without the necessary expertise which itself may be fallible. (4)The terms of the invitation to tender cannot be open to judicial scrutinybecause the invitation to tender is in the realm of contract. Normallyspeaking, the decision to accept the tender or award the contract is reached byprocess of negotiations through several tiers. More often than not, suchdecisions are made qualitatively by experts. (5)The Government must have freedom of contract. In other words, a fair play inthe joints is a necessary concomitant for an administrative body functioning inan administrative sphere or quasi-administrative sphere. However, the decisionmust not only be tested by the application of Wednesbury Principle of reasonableness (including its other facts pointed out above) butmust be free from arbitrariness not affected by bias or actuated by malafides . In other words, a fair play inthe joints is a necessary concomitant for an administrative body functioning inan administrative sphere or quasi-administrative sphere. However, the decisionmust not only be tested by the application of Wednesbury Principle of reasonableness (including its other facts pointed out above) butmust be free from arbitrariness not affected by bias or actuated by malafides . (6)Quashing decisions may impose heavy administrative burden on the administrationand lead to increased and unbudgeted expenditure." TheApex Court has considered the exception to the general principle of seekingrelief in equity on the ground of mistake in W.B. State Electricity Board Vs.Patel Engineering Co. Ltd. and others (supra), thus:- "27.Exceptions to the above general principle of seeking relief in equity on theground of mistake, as can be culled out from the same para ,are:- (1)where the mistake might have been avoided by the exercise of ordinary care anddiligence on the part of the bidder; but where the offeree of the bid has or is deemed to have knowledge of the mistake, he cannot bepermitted to take advantage of such a mistake. (2) where the bidder on discovery of the mistake fails toact promptly in informing to the Concerned Authority and request forrectification, withdrawal or cancellation of bid on the ground of clericalmistake is not made before opening of all the bids. (3) where the bidder fails to follow the rules andregulations set forth in the advertisement for bids as to the time when biddersmay withdraw their offer; however where the mistake is discovered after openingof bids, the bidder may be permitted to withdraw the bid." Therewas error committed by Computer, the Apex Court observed that it could have been discovered and notified by the saidrespondents with exercise of ordinary care and diligence. The mistakes were notpointed out till 23-12-1999 .Nature of error is also material to be considered. Merely the fact that pricebid was lesser could not be a ground to accept the tender in violation of theconditions. In Sorath Builders Vs. Shreejikrupa Buildcon Ltd. andanother, (2009) 11 SCC 9 , the Apex Court has laid down that pre-qualification document is required to be submittedwithin the stipulated time. Respondent No. 1 was negligent and insincere in notsubmitting his pre-qualification documents within the stipulated time though hehad information that there was a time schedule attached to the Notice InvitingTenders. In Sorath Builders Vs. Shreejikrupa Buildcon Ltd. andanother, (2009) 11 SCC 9 , the Apex Court has laid down that pre-qualification document is required to be submittedwithin the stipulated time. Respondent No. 1 was negligent and insincere in notsubmitting his pre-qualification documents within the stipulated time though hehad information that there was a time schedule attached to the Notice InvitingTenders. The terms and conditions of the tender are required to be adhered tostrictly and, therefore, respondent No. 2 was justified in not opening thetender submitted by respondent No. 1 which was late by three days. No grievancecould be made by respondent No. 1 as the lapse was due to hisown fault. Decision in W.B. State Electricity Board Vs. PatelEngineering Co. Ltd. and others (supra), has been relied upon. 9.Petitioner's Counsel has referred to the decision of Apex Court in Poddar SteelCorporation Vs . Ganesh Engineering Works and others, (1991) 3 SCC 273 , in which there was deviation inthe tender condition from non-essential or ancillary/subsidiary requirement.The Apex Court held thatminor technical irregularity can be waived. Instead of draft drawn on StateBank of India ,the cheque marked and certified by Union Bank of India was sent by the tenderer . It was held by the Apex Court that the Government justified in waivingtechnical compliance with the tender condition. In the instant case, it couldnot be said that there was deviation from non-essential or ancillary/subsidiaryrequirement. It was essential condition here that before opening the 2ndenvelope, a person must qualify in which the petitioner failed, thus, theenvelop 2nd containing financial bid could not have been opened at eligibilitystage and there is purpose for not opening it before the qualification roundwhich being mandatory stipulation could not have been waived. The financial bidcould not have been opened at the stage of qualification round. That would be violative of the very essential condition of tenderdocument. Learned Counsel has also relied upon decision of Apex Court in G.J.Fernandez Vs. State of Karnataka and others, (1990) 2 SCC 488 , in which theApex Court has laid down that minimum qualifying requirements for intending tenderers and in formations anddocuments in support thereof to be furnished along with the application forissue of blank tender book prescribed in two separate paragraphs ofNotification Inviting Tenders. Both the paragraphs of NIT should be readharmoniously. State of Karnataka and others, (1990) 2 SCC 488 , in which theApex Court has laid down that minimum qualifying requirements for intending tenderers and in formations anddocuments in support thereof to be furnished along with the application forissue of blank tender book prescribed in two separate paragraphs ofNotification Inviting Tenders. Both the paragraphs of NIT should be readharmoniously. Minimum qualifying requirements for intending tenderers and information and documents to be furnished by them prescribed byNotification Inviting Tenders should be strictly observed the instrumentalityof the State equally in cases of all the intending tenderers .Where the instrumentality of State consistently and bonafide interpreting the standards so prescribed in a particular manner and actingaccordingly, the Court would not interfere and substitute an interpretationwhich it considers to be correct. Applying the aforesaid ratio in the instantcase, the respondents have acted properly in rejecting the tender consideringClause 13.8 along with Clause 13.11, rejection is found to be proper as theinterpretation made by the Collector and Commissioner, Excise is in accordancewith the terms of the agreement, and it is not open to the Court to interferein the terms of the invitation subject to which the tenders are invited as heldby the Apex Court in Tata Cellular Vs. Union of India(supra). Petitioner's Counsel relied upon the observations made by the Apex Court in Para 203 of theaforesaid decision in which the Apex Court has laid down that where the mistake is in relation to a non-essential matterthat is in relation to peripheral or collateral matter. There has been everyintention to comply with the terms of the bid, for an accidental omission itcannot be punished. The Apex Court has laid down in Para 113 that terms of invitation totender cannot be open to judicial scrutiny because the invitation to tender isin the realm of contract. Thus, in the instant case, it being essentialcondition that the envelop 2nd will not be opened inthe absence of qualification of the tenderer byopening Part I of the envelop, it was not open to the petitioner to insist foropening of financial bid envelop for ascertaining his qualification. 10.Learned Counsel has also relied upon decision of High Court of Orissa in Akbar Mohammed Vs . 10.Learned Counsel has also relied upon decision of High Court of Orissa in Akbar Mohammed Vs . State of Orissa and others,AIR 2006 Orissa 156, in which petitioner who was thelowest tenderer was asked to submit Sales TaxClearance Certificate, the condition was held to be merely ancillary condition.It was held that the decision of the State Government stating that petitioner'sbid cannot be accepted without Sales Tax Clearance Certificate was improper,and no other tender was rejected on that ground. The decision is totally different, here it was essential condition which has beenviolated. Mistake as to essential condition could not have been permitted to becorrected, the opening of the financial bid was not permissible beforequalification round and petitioner was very well aware of the condition. Thedecision of Apex Court in Kanhaiya Lal Agrawal Vs. Union of Indiaand others, 2002(4) M.P.H.T. 433 (SC) = 2002 (4) MPLJ 311, has also been reliedupon by the petitioner's Counsel in which the Apex Court has laid down thatwhen essential condition of tender is not complied with, it is open to theperson inviting tender to reject the same. Whether a condition is essential orcollateral could be ascertained by reference to the consequence ofnon-compliance thereto. If non-fulfillment of the requirement results inrejection of the tender, then it would be an essential part of the tenderotherwise it is only a collateral term. In the instant case, Clause 13.8 readwith Clause 13.11 of the tender document makes it clear that essentialcondition of tender has not been complied with. It is apparent from theaforesaid clauses that non-fulfillment of the requirements of qualificationround results in rejection of the tender, it was essential condition thatenvelop No. 2 would not be opened in the absence of qualification of incumbenton opening 1 st envelop. Thus, the decision countersthe submission raised by petitioner's Counsel. The decision in Gorakhnath Upadhyaya Vs . State of U.P. and others, AIR 1994 Allahabad 283, has also beenpressed into service by the petitioner laying down that authority invitingtender should insist on strict compliance of essential conditions. Theconditions that tenderer should produce certificateof experience for 3 years whereas certificate produced by petitioner statingthat petitioner has full experience. The Court held that "fullexperience" must be taken to mean required experience of three years. Inconnection with the requirement of filing "no dues certificate", noexception could be taken to Certificate filed on ground that it was onlyExecutive Engg . P.W.D. who couldissue correct Certificate. The Court held that "fullexperience" must be taken to mean required experience of three years. Inconnection with the requirement of filing "no dues certificate", noexception could be taken to Certificate filed on ground that it was onlyExecutive Engg . P.W.D. who couldissue correct Certificate. Similar condition of submitting non-judicialstamp and revenue stamp with tender was held to be not an essential conditionof eligibility. Stamps were required for executing contract after tender wasaccepted. The facts of the instant case are totally different and the ratio,thus, cannot be applied. 11.Considering the aforesaid dictums of the Apex Court in W.B. State Electricity Board Vs . Patel EngineeringCo. Lid. and others (supra) and in Sorath BuildersVs. Shreejikrupa Buildcon Ltd. and another (supra), the decision taken by the respondent Nos. 1 to 3cannot be faulted as there was violation of essential condition of tendersubject to which they were invited. 12.Resultantly, we find no force in the submissions raised by petitioner'sCounsel. Petition being devoid of merits deserve dismissal and is herebydismissed. No costs.