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Allahabad High Court · body

2010 DIGILAW 872 (ALL)

Prabal Constructions v. State of U. P.

2010-03-16

PRADEEP KANT, SHABIHUL HASNAIN

body2010
JUDGMENT 1. Heard Sri Manish Kumar, for the petitioner and Sri I.P. Singh learned counsel for the U.P. Jal Nigam. 2. The petitioner submitted his tender for the supply of certain items in pursuance of the tender notice issued by the U.P. Jal Nigam. The petitioner succeeded in the pre-qualification bid and besides him one M/s Jyoti Bind-tech Pvt. Ltd., Lucknow also succeeded in pre-qualification bid. The aforesaid two tenderers were the only eligible tenderers in the entire tender process, therefore, their financial bids were opened on 18.12.2009. After opening of the financial bids, the U.P. Jal Nigam came to the conclusion that the rates quoted by both the tenderers were very high and therefore, decided to cancel the tenders and to re-advertise the same. 3. Sri Manish Kumar does not dispute the aforesaid fact but he says that on previous occasions and even in this year also, whenever tenders were invited and the rates were quoted by the tenderers whether excessive or high, the tenderers were invited for negotiation to lower down the rates quoted and this was being done in terms of the Government order dated 4.11.2004 but for the present tender, the department has chosen not to invite the petitioner as well as other tenderer namely; M/s Jyoti Bind-tech Pvt. Ltd., and has taken a decision for cancelling the tender, which according to the counsel for the petitioner is malafide and illegal action besides it being arbitrary. 4. The argument of the learned counsel for the petitioner is that the petitioner is entitled for being called for negotiation to lower down the rates and that a direction need be issued in this regard to the respondents. 5. Sri I.P. Singh learned counsel appearing for U.P. Jal Nigam submitted that the rates quoted by the two tenderers were highly excessive and that if they are calculated as per the prevalent rates they are about 2o% high and as per the schedule 'G' they are more than 45% high. In these circumstances, the concerned authority has found that there will be no use for calling the tenderers for negotiation and therefore, fresh tenders have been invited. In these circumstances, the concerned authority has found that there will be no use for calling the tenderers for negotiation and therefore, fresh tenders have been invited. His further submission is that Government order dated 4.11.2004 does not necessarily say that it would be incumbent upon the department to call all the tenders for negotiation, on every occasion, if the rates are high but if it is found necessary to take such a decision, the concerned authority may call the tenderer who has given lowest rates in the tender, for negotiation. His further submission is that the aforesaid Government order gives only limited discretion to the tendering authority to enter into negotiation with the tenderers, if he so desires and if circumstances so exists, for negotiating the rates. Corollary to the aforesaid argument is that no mandamus can be issued by the Court asking the respondents to enter into negotiation with any tenderer. 6. We have considered the arguments of the parties counsel and we find that the petitioner as well as M/s Jyoti Bind-tech Pvt. Ltd., succeeded in pre-qualification bid on 14.12.2009 but on opening of the financial bid on 18.12.2009, since it was found that their bids were highly excessive as observed above, decision for cancelling the tenders has been taken and fresh tenders are to be invited. 7. The tendering authority in terms of notice, was competent to have a decision in a situation given as above, consequently it was open for him either to call the tenderers for negotiation, if he so desires or to cancel the tender. 8. The process of inviting tenders is to have competitive rates so that in a matter of supply to the department, the same may be made on appropriate lower rates without compromising with the quality and other terms of supply. In case, a situation arises where tenderers have quoted certain rates, which the department finds are excessive and need be lowered down, then in that circumstance the tendering authority would be within its power to invite all such tenderers for negotiation but the said negotiation cannot be done only with the selected tenderers nor it can be done selectively. In case, a situation arises where tenderers have quoted certain rates, which the department finds are excessive and need be lowered down, then in that circumstance the tendering authority would be within its power to invite all such tenderers for negotiation but the said negotiation cannot be done only with the selected tenderers nor it can be done selectively. It is always to be kept in mind that if tenders are invited normally, the award of tender has to be made on the basis of the rates quoted by the tenders subject to negotiation being conducted, if necessary, as observed above. 9. The Government order dated 4.11.2004 itself says that in general no negotiation shall be held in the matter of contract for supply of various articles but a discretion has been given to the limited extent that in case the tendering committee or the tendering authority, looking to the present market rate of the article, can enter into negotiation with the tenderer whose bid is lower that too if it is found necessary for giving the contract, it can be done without making any relaxation in the terms and conditions of the tender notice. 10. A perusal of the government order aforesaid leaves no doubt that the emphasis has been supplied on the fact that the award of contract for supply of articles is done on the basis of tenders furnished but in a given circumstance the tendering authority or accepting authority has the discretion to enter into negotiation in terms of the Government order dated 4.11.2004. This discretion lies with the tendering or the accepting authority and if he finds that negotiation would be necessary or would be relevant, he can do so. If in a case where the authority does not find it a fit case to call the tenderers for negotiation keeping in mind the aforesaid Government order and cancels the tender, the court will hardly interfere in such a discretionary order, unless it is established that the action was per-se arbitrary. We do not find any illegality in the matter and no mandamus can be issued for calling the tenders for negotiation. 11. We, thus, do not find any merit in the matter. The writ petition is dismissed. However, this order would not debar the petitioner to participate in fresh tender if he is otherwise eligible and apply in pursuance of the tender notice.