Dhirendra Chandra Bhattacharjee v. State of Tripura
2011-11-08
I.A.ANSARI
body2011
DigiLaw.ai
JUDGMENT I.A. Ansari, J. 1. For procuring two different categories of bricks, Executive Engineer, Rural Development Department Western Division No. 1, Agartala, issued a Notice Inviting Tender (in short, 'NIT'), dated 4.4.2011. With the NIT, a Detailed Notice Inviting Tender (in short, 'DNIT'), dated 4.4.2011, was also issued to the bidders. The petitioner herein submitted his tender and, on 25.4.2011, the tenders, including the one submitted by the petitioner, were opened. On opening of the tenders, it was found that the petitioner had quoted the lowest rate. After making necessary assessment, the tender issuing authority, namely, Executive Engineer, Rural Development Department Western Division No. 1, Agartala, called the petitioner, on 02.05.2011, for negotiation of the rate. The petitioner accordingly appeared on the date fixed, i.e., on 02.05.2011, and held negotiation with Executive Engineer, Rural Development Department, Western Division No. 1, Agartala, and, in furtherance thereof, a note was prepared. The petitioner declined to reduce rates further. After the negotiation with the petitioner stood closed, as mentioned above, the Executive Engineer aforementioned issued a notice, dated 11.5.2011, to all the bidders including the present petitioner informing them that due to 'unavoidable circumstances', the rates, quoted by the bidders, including the lowest one, against Mohanpur and Hezamura Block, were rejected. Aggrieved by the cancellation of the tender, the petitioner served a demand notice, dated 16.5.2011, upon the respondents urging them to issue supply order in favour of the petitioner. Thereafter, the Executive Engineer aforementioned issued a fresh NIT, dated 20.5.2011, for procurement of the said category of bricks. 2. The cancellation of the tender by the notice, dated 11.05.2011, and the NIT, dated 20.5.2011, whereby tenders have been invited afresh, stand challenged in the present writ petition made under Article 226 of the Constitution of India, the grounds of challenge being, broadly speaking, that cancellation of the tender and publication of the impugned tender are bad in law, the same being arbitrary, irrational and legally not sustainable. 3. I have heard Mr. Somik Deb, learned counsel, for the petitioner, and Mr. J. Majumder, learned Govt. Advocate, for the respondents. 4.
3. I have heard Mr. Somik Deb, learned counsel, for the petitioner, and Mr. J. Majumder, learned Govt. Advocate, for the respondents. 4. Resisting the writ petition, respondents have filed their counter-affidavit, wherein they have contended that 'after opening of the tender of the petitioner', it was revealed that the petitioner had not submitted the earnest money deposit in terms of the DNIT, dated 4.4.2011, which required that a tenderer shall deposit earnest money, in the 'shape' of deposit at call/bank draft/fixed deposit, in favour of the Executive Engineer aforementioned, at any 'nationalised bank' of India; rather, the petitioner had furnished a Xerox copy of short term call deposit receipt No. 295609, dated 14.09.2010, of Tripura Gramin Bank Account No. 70. As the short term/call deposit was not from a nationalised bank of India, the petitioner's tender ought to have been summarily rejected at the stage of opening of the tender, but the tender opening authority mistakenly considered the photocopy of the short term/call deposit receipt, dated 14.09.2010, as the earnest money. On discovery of the fact that the petitioner's tender was defective and there was a mistake in identifying the lowest bidder, the lender process, initiated by the NIT, dated 04.04.2011, has been cancelled and NIT, dated 11.05.2011, has been issued. 5. Appearing on behalf of the petitioner, Mr. Somik Deb, learned counsel for the petitioner, points out that as per Clause (2) of the DNIT, which is alleged to have been violated by the petitioner, what may be said to be mandatory was the 'shape' of the deposit made inasmuch as earnest money was to be deposited in one of the 'shapes', namely, by way of deposit at call/bank draft/fixed deposit and if the earnest money was not deposited in any of these 'shapes', then, the tender was liable to be rejected. 6. Mr.
6. Mr. Deb also points out that though earnest money was required, under Clause (2), to be deposited in the 'shape' of deposit at call/bank draft/fixed deposit and the deposit of the earnest money, in the prescribed 'shape', could be called mandatory, because the failure to deposit earnest money, in the prescribed' 'shape', could lead to summary rejection of tender, the fact remains that no such fatal consequence could have ensued if the 'shape' of the earnest money was in terms of what was prescribed by Clause (2), namely, by way of deposit at call/bank draft/fixed deposit, but the deposit, in the prescribed 'shape' (i.e., deposit at call/bank draft/fixed deposit) was not from a 'nationalised bank', because failure to deposit earnest money from a 'nationalised bank' only could not have led to summary rejection of tender; whereas, the failure to deposit earnest money, in the prescribed 'shape', could have led to summary rejection of tender. 7. In effect, what Mr. Deb contends is that since the deposit, in the present case, had been made in the 'shape' as had been warranted, the fact that such deposit was made from Tripura Gramin Bank, instead of 'nationalised bank', could not have been considered fatal. 8. In support of his above submission, that while the 'shape' of the deposit, in terms of Clause (2) of the General Terms and Conditions, may be treated as mandatory, the making of deposit from 'nationalised bank' was not mandatory, Mr. Somik Deb has relied on Poddar Steel Corporation v. Ganesh Engineering Works and Others reported in (1991) 3 SCC 273 . In support of his submission that making of earnest money deposit from 'nationalised bank' is not essential or mandatory, Mr. Somik Deb also places reliance on Kanhaiya Lal Agarwal v. Union of India and Others reported in (2002) 6 SCC 315 . The relevant observations, made in Kanhaiya Lal Agarwal (supra), reads as under: 6. It is settled law that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by, reference to the consequence of non-compliance thereto. If a non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only an collateral term.
Whether a condition is essential or collateral could be ascertained by, reference to the consequence of non-compliance thereto. If a non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only an collateral term. This legal position has been well explained in G.J. Fernandez v. State of Karnataka (1990) 2 SCC 488 . 9. It is further submitted by Mr. Deb that while canceling the tender, the respondents/authorities concerned did not state that the petitioner's tender was rejected due to the fact that he had deposited only the Xerox copy of the deposit at all, rather, what was conveyed, as a reason for cancellation, was that the cancellation was for unavoidable circumstances' without disclosing as to what these 'unavoidable circumstances' were. 10. Thus, contends Mr. Somik Deb, the reason for cancellation was vague and such reasons could not have become the basis for cancellation of the tender. Cancellation of the tender was, therefore, according to Mr. Deb, arbitrary and untenable in law. Reliance, in support of his submission, is placed by Mr. Deb on M/s. Star Enterprises and others v. City and Industrial Development Corporation of Maharashtra Ltd. and Others reported in (1990) 3 SCC 280 . 11. Countering the submissions made on behalf of the petitioner, Mr. Majumdar, learned Govt. Advocate, submits that the fact that the petitioner had submitted photocopy of the deposit at call is not in dispute and, in such circumstances, the respondents acted with jurisdiction, when they decided to cancel their tender and invite fresh tender. The writ petition is, therefore, according to the learned Government counsel, wholly without merit and deserves to be dismissed. 12. While considering the present writ petition, let us, first, consider Clause (2) of the General Terms and Conditions of the tender contained in the DNIT, which is relevant for our purpose, and the same is, therefore, reproduced hereinbelow: (2) Bidder must deposit required Earnest Money as stated in 1st page of DNIT in the 'shape' of deposit at call/bank draft/fixed deposit in favour of the undersigned on any 'nationalised bank' of India. Without EMD in appropriate 'shape', the tender will summarily be rejected. 13.
Without EMD in appropriate 'shape', the tender will summarily be rejected. 13. A careful reading of Clause (2) shows that Clause (2) has two parts, namely, (i) it gives 'shape' of the earnest money to be deposited, namely, by way of deposit at call/bank draft/fixed deposit, and (ii) bank from where deposit at call/bank draft/fixed deposit has to be offered as earnest money. Clause (2) also contains the consequence of not complying with the condition so given as regards the earnest money; the consequence is that without earnest money deposit in proper 'shape', namely, by way of deposit at call/bank draft/fixed deposit, tender would be summarily rejected. 14. It is clear from the above that in terms of Clause (2), a tender was to be summarily rejected if the earnest money deposit had not been made in proper 'shape', namely, by way of deposit at call/bank draft/fixed deposit. Because of the consequence, which had been clearly embodied in Clause (2) as regards the 'shape' in which the earnest money had to be deposited, it becomes clear that what was, at best, mandatory, in terms of Clause (2), was the 'shape' of the earnest money deposit and not the bank' from where the deposit was to be made. Consequently, if a person had failed to deposit earnest money in the 'shape' of deposit at call/bank draft/fixed deposit, his tender could have, perhaps, been summarily rejected; but if the deposit at call/bank draft/fixed deposit, offered by a tenderer, was not from a 'nationalised bank', no fatal consequence, in the light of the language used in the NIT, would have followed. The mere fact, therefore, that it was the Tripura Gramin Bank, and not any 'nationalised bank', from which the call deposit had been made, in the present case, by the petitioner, there was no violation of a condition, which was essential or mandatory. 15. While considering the case of M/s. Poddar Steel Corporation v. M/s. Ganesh Engineering Works and Others AIR 1991 SC 1579 , which Mr.
15. While considering the case of M/s. Poddar Steel Corporation v. M/s. Ganesh Engineering Works and Others AIR 1991 SC 1579 , which Mr. Somik Deb, learned counsel, relies upon, it may be noted that, in M/s. Poddar Steel Corporation (supra), it has been pointed by the Supreme Court that the requirements, in a tender notice, can be classified into two categories those, which lay down the essential conditions of eligibility, and the others, which are merely ancillary or subsidiary to the main object to be achieved by the condition. In the first case, the authority, issuing the tender, may be required to enforce them rigidly. In the other appropriate cases, it must be open to the authority to deviate from, and not to insist upon, the strict literal compliance of the condition. 16. Thus, what the decision, in M/s. Poddar Steel Corporation (supra), points out is that a condition of eligibility, which is essential, cannot be deviated from and cannot be relaxed; whereas a condition of eligibility, which is ancillary of subsidiary to the main object, which the tender seeks to achieve, such a condition may be relaxed. The main object or including every condition, in a tender notice, has to be examined and ascertained and not merely the fact as to whether the tender notice has specifically mentioned or not as to what consequence, an omission to comply with such a condition, would follow. What is, however, extremely important to note is that relaxation cannot be in every case but only in 'appropriated cases' as indicated in M/s. Poddar Steel Corporation (supra). In effect, thus, while it is not possible for an authority, which floats tender notice, to relax an essential condition of eligibility, a condition, which is not essential, may be relaxed provided the fads of the case so warrant. The observations made, in this regard, in M/s. Poddar Steel Corporation (supra), read as under: (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 be 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 be required to enforce them rigidly. However, it remains to be seen as to which of the two clauses the present case belongs. (7) The nature of payment by a certified cheque was considered by this Court in Sita Ram Jhunjhunwala v. Bombay Bullion Association Ltd. (1965) 35 Com Case 526 : AIR 1965 SC 1628 . Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision (vide Spargo's case (1873) L. R. 8 Ch. App. 407) that it is a general rule of law that in every case where a transaction resolves itself into paying money by A to B and then handing it back again by B to A, if the parties meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards. This Court applied the observations to a transaction requiring payment by one to another. The High Court's decisions in B.D. Yadav's case AIR 1984 Bom 351 and T V. Subhadra Amma's case AIR 1982 Ker 81 are also illustrations where literal compliance of every term of the tender notice was not insisted upon. (8) 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 condition and the Tender Committee took the abundant caution by a further verification from the bank.
(8) 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 condition 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 bid 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. The appeal is accordingly allowed with costs throughout. Appeal allowed. 17. In the case of M/s. Poddar Steel Corporation (supra), the requisite condition was that the earnest money was to be paid by cash or by demand draft on the State Bank of India. What the tenderer, in M/s Poddar Steel Corporation (supra), had done was that it had given a certified cheque of the Union Bank of India in respect of the said earnest money. In this context, the Supreme Court was required to decide if the said certified cheque was sufficient compliance of the conditions of eligibility. It is in the context of this fact situation that the Supreme Court pointed out that since the purpose of depositing earnest money, by cash or by demand draft, was to ensure realization of the earnest money, should there be a default, this interest was equally protected even when a person gave a certified cheque of a nationalized bank. 18. Thus, the objective of the requirement of depositing the earnest money, by way of cash or by demand draft drawn on the State Bank of India, was equally served with the certified cheque of the United Bank of India. It is in the context of the facts of such a case that it was decided by the Supreme Court, in M/s. Poddar Steel Corporation (supra), that though the tenderer did not strictly adhere to the conditions of eligibility, prescribed in the tender notice, his action nevertheless satisfied the condition of eligibility and, hence, it was legally permissible to treat the tender as valid relaxing the requirement of deposit of earnest money by cash or by demand draft drawn on the State Bank of India only. 19.
19. In the case at hand, the obvious purpose of requiring a tenderer to deposit earnest money by way of deposit at call/bank draft/fixed deposit was to secure the earnest money. Neither the shape of the deposit of the earnest money was mandatory nor was the bank so long as the purpose of making of the earnest money was served. In the present case, the fact that instead of a nationalized bank, the bank was Tripura Gramin Bank, the same could not have been made a reason for rejecting the petitioner's tender unless the respondents could show that Tripura Gremlin Bank is not a secured bank. Such is definitely not the case at hand, because it is not even faintly contended, on behalf of the $respondents, that Tripura Gramin Bank is not a safe and secured bank and deposit at call, made from this bank, cannot be relied upon. Considered in this light, even the shape of the deposit could not have been regarded, as indicated hereinbefore, mandatory. 20. In fact, rejection of the petitioner's tender, in the present case, was not, as already noted above, on the ground of either the 'shape' or the 'bank'; it was rather, according to the letter issued to the tenderers, under unavoidable circumstances and, in terms of the counter-affidavit, rejection of the petitioner's tender was on the ground that he had submitted a Xerox copy of the deposit at call, which he had made with the Tripura Gramin Bank. 21. Though, as indicated above, it is submitted, on behalf of the respondents, that the submission of photocopy/Xerox copy of the 'deposit at call' was the cause for rejecting the petitioner's tender, the fact remains that, to a pointed query made by this Court as to what reason was assigned in the record, which was contemporaneously made at the time of canceling the tender, Mr. Majumdar submitted that the reason assigned was not that the petitioner had submitted photocopy of the 'deposit at call'. The learned Govt. Advocate candidly submitted that this was not specifically stated in the corresponding note, while canceling the tender, that the petitioner had deposited a photocopy of the 'deposit at call'. 22.
Majumdar submitted that the reason assigned was not that the petitioner had submitted photocopy of the 'deposit at call'. The learned Govt. Advocate candidly submitted that this was not specifically stated in the corresponding note, while canceling the tender, that the petitioner had deposited a photocopy of the 'deposit at call'. 22. On the direction of the Court, relevant record has been produced by the respondents and what is found to have been written, in the contemporaneous record, at the time of cancellation of the tender, was that there was a mistake in identification of the lowest bidder. 23. It is, thus, clear that the reason, which has, now, been assigned, in this writ petition, by the respondents as a reason for cancellation of the tender is, for the first time, offered as a reason for cancellation of the tender. What is, however, curious to note is that even while recording the reason that there was a mistake in the identification of the lowest bidder, the contemporaneous note is silent as to why it was being regarded that there was a mistake in the identification of the lowest bidder. This apart, even while canceling the tender, what the tenderers were informed was that the tender was being cancelled due to 'unavoidable circumstances', At this stage too, the respondents, nowhere, contended that the petitioner's tender was bad in law and/or that the petitioner could not have been treated as the lowest bidder, because he had furnished only a photocopy of the 'deposit at call'. In a case of this nature, the decision, in Mohinder Singh Gill v. Chief Election Commissioner reported in (1978) 1 SCC 405 , too, is aptly applicable, wherein the Constitution Bench of the Supreme Court has clearly laid down, at para 8, as under: 8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity just be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. We may here drawn attention to the observations of Bose, in Commr.
Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. We may here drawn attention to the observations of Bose, in Commr. Of Police, Bombay v. Gordhandas Bhanji AIR 1952 SC 16 : Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what he was in his mind, or what intended and are intended to affect the actions and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. 24. From a close reading of what have been observed, in Mohinder Singh Gill (supra), what can be safely gathered is that when an order is made in public domain, its validity has to be judged by reasons mentioned in the order and cannot be supplemented by 'fresh reasons' in the 'shape' of affidavit or otherwise. Or else, an order, which might have been bad in the beginning, may, by the time it comes to Court, due to a challenge, posed to the validity of the order, get validated by additional grounds later thought of. 25. In the case at hand, there are three different reasons assigned by the respondents for rejecting the petitioner's tender. At the first instance, the communication, conveying cancellation of the petitioner's tender, was given to the petitioner and other tenderers by mentioning that the NIT had been cancelled, because of 'unavoidable circumstances'. What those 'unavoidable circumstances' were, the respondents remained completely silent. When the petitioner challenged the validity of the cancellation of the NIT, the challenge was sought to be responded by contending, in the counter-affidavit, that 'after opening of the tender of the petitioner', it was found that the petitioner had not submitted the earnest money deposit in terms of the DNIT, dated 04.04.2011, inasmuch as he had submitted a Xerox copy of the short term/call deposit receipt No. 295609, dated 14.09.2009. If it was so, why the petitioner was called, at all, for negotiation? The respondents have given no reply whatsoever.
If it was so, why the petitioner was called, at all, for negotiation? The respondents have given no reply whatsoever. However, when the record was called, the record revealed that the reason assigned was that there was a mistake in identifying the lowest bidder without, however, giving any indication as to what had been construed as the mistake in identifying the lowest bidder. There was, thus, no consistency in assigning of reasons for cancellation of the tender. 26. In view of the fact that the reason, which has, now, been assigned, in the writ petition, for canceling the tender, was not the reason assigned at the time, when the decision to cancel the tender was taken or when the reason for cancellation was conveyed to the tenderers, the subsequently assigned reason cannot satisfy the requirement of law. This apart, when the petitioner had been, admittedly, called for negotiation, it logically follows that his tender was found to be valid and the petitioner could have, at the time of negotiation, asked to produce the original of the 'deposit at call' and, in the event of failure of the petitioner to produce the 'deposit at call', in original, it would have remained open for the respondents to cancel the tender. The object bank obtaining earnest money, in the prescribed 'shape' from a nationalised bank, was obviously to secure the earnest money, should realisation thereof becomes necessary. This purpose could have been served if the petitioner could have been asked to produce the short-term/call deposit receipt No. 2959609, dated 14.09.2010, and had, on such a demand made by the respondents, the petitioner failed to furnish to the respondents/authorities concerned the short-tenant/call deposit receipt, his tender could have been cancelled. 27. Because of what have been discussed and pointed out above, this Court is of the view that the reason, now assigned by the respondents, is nothing but an afterthought and the same cannot, therefore, be validly sustained. 28. In the result, and for the reasons, discussed above, this writ petition partly succeeds.
27. Because of what have been discussed and pointed out above, this Court is of the view that the reason, now assigned by the respondents, is nothing but an afterthought and the same cannot, therefore, be validly sustained. 28. In the result, and for the reasons, discussed above, this writ petition partly succeeds. The respondents are hereby directed to issue notice calling upon the petitioner to deposit, with the Executive Engineer, Rural Development Department, Western Division No. 1, Agartala, in original, the short term/call deposit receipt No. 2959609, dated 14.09.2010, within a week from the date of receipt of the notice, which is so directed to be issued, and, if the petitioner deposits, in original, the short term/call deposit receipt No. 2959609, dated 14.09.2010, the subsequent NIT, dated 20.05.2011, shall be cancelled and the tender, submitted by the petitioner, pursuant to the earlier NIT, dated 04.04.2011, shall be considered afresh, in the light of the discussions held above, and appropriate order(s) shall be passed thereon. 29. With the above observations and directions, this writ petition shall stand disposed of. 30. No order as to costs. Return the records.