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2012 DIGILAW 3572 (MAD)

C. Ranganathan v. District Collector

2012-08-14

V.DHANAPALAN

body2012
Judgment :- 1. A Resolution passed bythe third respondent-Maraimalai Nagar Municipality has been called in question in this Writ Petition in Resolution No.131, dated 11.5.2012, seeking to quash the same and for consequential direction to allot the work to the petitioner. 2. The case of the petitioner is as follows: (i) The petitioner is having an experience of doing contract work and renewed his contract as a Registered Contractor with the fourth respondent's Municipality in and by proceedings, dated 1.4.2012. The fourth respondent issued a Notification dated 9.2.2012 calling for sealed tender from the Registered Contractors in respect of laying 53 concrete road works. The petitioner submitted tender for 13 works out of 53 works. In respect of all 13 works in which the petitioner submitted the tender forms, the petitioner is the one who offered the lower rate among the tenderers. (ii) While office note was prepared for placing the tenders for approval of the Council, all 13 works in which the petitioner is the lowest rate offeror, the petitioner's contract work was recommended for approval. But in toto, all the Councillors demanded 10% of the value of the work, as a Commission to them, to allot the work. When the petitioner along with the other Contractors, refused to accede to the demand of the Councillors, the Municipal Council passed a Resolution dated 11.5.2012 to cancel the tender in respect of the quotation of rates less than 5% of the value of the work fixed by the Council and further decided to re-tender the cancelled work. (iii) Inspite of the petitioner's efforts to get the copy of the Resolution, the authorities failed to furnish the same and the petitioner took the copy of the Resolution through the Website of the Municipality. When the petitioner is anticipating the work order, since he is the lowest tenderer in respect of 13 works and having experience in laying the concrete roads, the impugned Resolution is a shocking surprise to the petitioner and after knowing the same, the petitioner made a representation on 11.7.2012 seeking cancellation of the impugned Resolution to the first and second respondents. But the third and fourth respondents are taking steps to implement the Resolution to call for the fresh tenders. Hence, the petitioner has approached this Court by way of the present Writ Petition. 3. But the third and fourth respondents are taking steps to implement the Resolution to call for the fresh tenders. Hence, the petitioner has approached this Court by way of the present Writ Petition. 3. The petitioner challenges the impugned Resolution on the following grounds: (a) The third and fourth respondents are having no authority and power to accept and fix 5% of lesser value of the value fixed by the Municipality. (b) If the third and fourth respondents allotted the work to the petitioner and others as quoted by the tenderers, they can save nearly Rs.50 lakhs, but for the unlawful gain of the Councillors at the cost of the Municipality, they indulged in passing the impugned Resolution. (c) The Municipal Council was on the wrong assumption that the quality of the work may not be up to the mark and the public fund may be drained wastefully, and these are all not supported by well found reasonings and even after allotment of work, there are various procedures to be followed while execution of the work and for making final payment to the tenderer. The quality of the work will be tested by the Municipal Engineers at various levels. (d) The petitioner is an experienced contractor and so far, no complaint is made against him for the inferior quality of the work done by him earlier. (e) The respondents are not acting in the interest of the Municipality, but trying to spend over and above the actual cost for the reasons best known to them. (f) The first respondent is duty bound under Section 36(2) of the Tamil Nadu District Municipalities Act to act on the petitioner's representation dated 11.7.2012, since the impugned Resolution was passed without authority. (g) The third and fourth respondents are taking steps to bring the Notification for re-tender, and if they are allowed to do so, not only the petitioner's interest will be affected, but also the Municipality's interest will be affected. Hence, it is necessary to restrain the third and fourth respondents to call for re-tender as decided in the impugned Resolution dated 11.5.2012. 4. The fourth respondent has filed a counter affidavit averring as follows: (i) The Writ Petition is misconceived and is not maintainable either in law or on facts. (ii) The Municipal Council has power to cancel any auction without assigning any reason. 4. The fourth respondent has filed a counter affidavit averring as follows: (i) The Writ Petition is misconceived and is not maintainable either in law or on facts. (ii) The Municipal Council has power to cancel any auction without assigning any reason. In the present case, the auction held on 28.2.2012 was cancelled by the Council for valid reasons. Hence, the Writ Petition is devoid of merits and is liable to be dismissed. (iii) The Notification and submission of tenders are matters of record. In respect of 13 tenders submitted by the petitioner, two tenders were accepted and after the petitioner complied with the conditions, work order has been issued. In respect of the other tenders submitted by the petitioner and others, the same were rejected by the Council, as the amounts quoted in the tender were less by more than 5%. In some cases, the amount quoted in the tender was less by 47.11%. All these tenders were not accepted, since in the opinion of the Council, the amount quoted will not be sufficient for doing the work with the quality required by the Council. Because of the poor quality of the work, the entire amount spent will be lost and the general public will suffer. The allegation that all the Councillors demanded 10% of the contract amount and since the petitioner and others refused to pay the amount, the tenders were rejected, is denied. No such incident happened and these allegations are made with ulterior motive with mala-fide intention and are frivolous and baseless. (iv) The authority has power to accept the tender and he can fix the percentage which may be over the schedule of rates or prevailing market price. This percentage may be more than or less than the schedule of rates or prevailing market rate. The reason for fixing the percentage is not to pay more than the required amount or pay less compromising the quality of work. In the present case, the authority has fixed 5% more or less than the scheduled rate. The tenders which were lower within 5% of the schedule of rates were accepted. Even two tenders of the petitioner were accepted. Only when the tenders are very much lower than the schedule of rates and prevailing market rate, i.e more than 5%, the same had been rejected. The tenders which were lower within 5% of the schedule of rates were accepted. Even two tenders of the petitioner were accepted. Only when the tenders are very much lower than the schedule of rates and prevailing market rate, i.e more than 5%, the same had been rejected. The Council has ample powers to either accept or reject any tender and order re-auction. In the present case, the Council did not want to compromise with the quality of work and hence, the tender rates which were less by more than 5% prescribed rates, were rejected. (v) The Municipality called tenders for 53 works at a cost of Rs.4.15 crores on 28.2.2012. 147 persons participated when the tenders were scrutinised and one contractor by name, Tmt.R.Kaliyammal came forward to construct the cement concrete road by offering 47% lower than the estimated cost. The Council, in its Resolution, decided to award work order for the tenderers who quoted not lower than 5% of the estimated cost. For the tenders quoted less than 5% of the estimated cost, the Council decided to call re-tender as per Paragraph 50 of the Engineering Manual Volume II (Page 9). The Municipal Council has been empowered to reject all or any of the tenders without assigning any reasons for doing so. The petitioner C.Ranganathan participated in the tender dated 25.2.2012 and he offered only 0.08% less than the estimated cost for providing foot pathway to Ninnakkarai Eri Park. In the instant case, the Contractor quoted more than 5% lower rate for the cement concrete work. It is not possible to execute the cement concrete work 5% lower than the estimated cost. The Municipal Council approved the tender for the same petitioner for the tenders (2 works) in which he quoted within 5% lower than the estimated cost. Since the Municipal Council is the elected body and discussed the tenders in depth as per Paragraph 50 of the Engineering Manual Volume II (page 9), the Council has decided without any ulterior motive. (vi) The grounds of the Writ Petition are untenable, unsustainable and contrary to law as per well settled judicial pronouncements. The Municipal Council is the ultimate authority to accept or reject the highest amount quoted for a person for any contract. (vi) The grounds of the Writ Petition are untenable, unsustainable and contrary to law as per well settled judicial pronouncements. The Municipal Council is the ultimate authority to accept or reject the highest amount quoted for a person for any contract. In the present case, the amounts quoted very much less than the scheduled rates are rejected, as the Council did not want to compromise on the quality of work, as the general public will suffer by bad road, etc. It is not correct to state that the Municipality is trying to spend more money than required. The Municipality is very particular that the quality work must be done and the people does not suffer. (vii) If a person is aggrieved by any Resolution passed by a Municipal Council, his remedy in the first instance is as per Section 36 of the Tamil Nadu District Municipalities Act, 1920. The petitioner cannot directly approach this Court invoking Writ jurisdiction for quashing the Resolution and direct the Council to grant contract to him. (viii) The balance of convenience is in favour of the respondents. The Writ Petition may be dismissed. 5. Mr.S.Gopinathan, learned counsel for the petitioner assailed the impugned Resolution and contended that the authority having power to accept and fix 5% of the lesser value of the value fixed by the Municipality, allowed to pass the impugned Resolution and the petitioner quoted lowest offer and the petitioner is an experienced contractor in the Municipality, and the respondents are now acting against the interest of the Municipality, and trying to spend over and above the actual cost for the reasons best known to them. 6. Per contra, Ms.V.M.Velumani, learned Spl.G.P. appearing for the respondents contended that under Section 12 of the Tamil Nadu Transparency in Tenders Act, 1998 (for short, the Tender Act) , the respondents have powers to reject the tender, if the tender accepting authority decides that the price quoted by such tenderers is highest by the percentage as may be prescribed by the schedule of rates or prevailing market price. She further contended that the petitioner participated in the tenders and offered only 0.08% less than the estimated cost for providing foot pathway to Ninnakkarai Eri Park and the contractor quoted more than 5% lower rate for the cement concrete work and therefore, the Municipal Council being an elected body, discussed in depth as per Paragraph 50 of the Engineering Manual Volume II (page 9) and decided without any ulterior motive and therefore, the Resolution cannot be found fault with. 7. I have heard the learned counsel appearing for the parties and perused the records. 8. It is seen that the petitioner is a contractor having done certain works in the respondent-Municipality and in respect of 13 works, he has quoted lowest rates and he is having experience in laying concrete roads. Now, the respondents are attempting to deny him the work and he has assailed the same in the impugned Resolution. Out of 53 works, for 13 works, the petitioner has offered quotation and he claims that he is the lowest tenderer. The Municipal Council passed a Resolution on 11.5.2012 cancelling the tenders in respect of the quotation of rates less than 5% value of the works fixed and decided to re-tender the cancelled works. In this regard, the petitioner has also represented to the respondents 1 and 2 on 11.7.2012 seeking cancellation of the impugned Resolution on the ground that it was passed without any authority. 9. In this connection, it is worthwhile to quote Sections 10 and 12 of the Tender Act, as follows: "Section 10: Evaluation and acceptance of tender.--(1) The Tender Accepting Authority shall cause an objective evaluation of the tenders taking into consideration the schedule of rates as mentioned in the tender document and the prevailing market rate for procurement and comparison of the tenders in accordance with the procedure and criteria specified in the tender document. (2) After evaluation and comparison of tenders as specified in sub-section (1), the Tender Accepting Authority shall accept the lowest tender ascertained on the basis of objective and quantifiable factors specified in the tender document and giving relative weights among them. (3) Notwithstanding anything contained in sub-section (2), if the Tender Accepting Authority decides that the price of the lowest tender is higher with reference to the prevailing market rate or the schedule of rates, he may negotiate for a reduction of price with that tenderer. (3) Notwithstanding anything contained in sub-section (2), if the Tender Accepting Authority decides that the price of the lowest tender is higher with reference to the prevailing market rate or the schedule of rates, he may negotiate for a reduction of price with that tenderer. (4) If at any time before the acceptance of tender, the Tender Accepting Authority receives information that a tenderer who has submitted tender has been banned by any procuring entity, he shall not accept the tender of that tenderer even if it may be the lowest tender. (5) In case where two or more tenderers quoted the same price, the Tender Accepting Authority shall split the procurement among such tenderers taking into consideration the experience and credentials of such tenderers. Where such splitting is not possible or could not be done equally, he shall record reasons for the same. (6) If the Tender Accepting Authority proposes to accept the tender as per the provisions of this section, he shall pass orders accepting the tender together with reasons for such acceptance. (7) The Tender Accepting Authority shall intimate the information regarding the name and address of the tenderer whose tender has been accepted along with the reasons for rejection of other tenders to the appropriate Tender Bulletin Officers. Section 12: Right to reject tender.--(1) After negotiation with the tenderer and before passing the order accepting a tender as under sub-section (6) of section 10, if the Tender Accepting Authority decides that the price quoted by such tenderer is higher by the percentage as may be prescribed over the schedule of rates or prevailing market price, he shall reject the tender. (2) The Tender Accepting Authority, before passing the order accepting a tender, may also reject all the tenders for reasons such as changes in the scope of procurement, new technologies or substantial design changes, lack of anticipated financial resources, Court orders, accidents or calamities and other unforeseen circumstances." 10. The petitioner has assailed the Resolution that it will affect his interest. As far as the Resolution of the Municipality is concerned, it is the Municipal Council of the Municipality having power to decide what should be the best method to be adopted for giving tenders and what should be the Revenue to be fetched from it for augmenting the resources of the Municipal Council. As far as the Resolution of the Municipality is concerned, it is the Municipal Council of the Municipality having power to decide what should be the best method to be adopted for giving tenders and what should be the Revenue to be fetched from it for augmenting the resources of the Municipal Council. When such a power is given to them and when there is no arbitrary exercise of such power, and in the absence of any mala-fide intention, it is not for the petitioner to question the Resolution of the Municipality, because, as an elected body, the Municipal Council decides about the method/mode/procedure contemplated for tender process in accordance with law and also the procedures in existence and it is not proper for the petitioner to question such things unless it is shown to this Court that there is arbitrary exercise of such power tainted with mala-fides. 11. A circumspection of facts would reveal that the Municipality called for tenders for 53 works at a cost of Rs.4.15 crores on 28.2.2012. Totally, 147 persons participated when the tenders were scrutinised, and one contractor by name, Tmt.R.Kaliyammal came forward to construct the cement concrete road by offering 47% lower than the estimated cost. The Municipal Council in its Resolution decided to award work order for the tenderers who quoted not lower than 5% of the estimated cost. The petitioner has participated in the tender process held on 25.2.2012 and out of 53 works, he has applied for 13 works and he offered 0.08% less than the estimated cost for providing foot pathway to Ninnakkarai Eri Park and the contractor quoted more than 5% lower rate for the cement concrete work and it was not possible to execute the cement concrete work 5% lower than the estimated cost. The respondent-Municipality also informed that the Municipal Council approves the tender of the petitioner for two works for which he quoted within 5% lower than the estimated cost and therefore, when the petitioner having been chosen for the work which he quoted for the correct quotation, there cannot be any allegation of mala-fide on the part of the respondent-Municipality when the eligible contract has been given to the petitioner. 12. 12. The Municipal Council is the ultimate authority to accept or reject the highest amount quoted by a person for any contract and fetching Revenue for the Municipality is a matter to be taken into account by the Municipal Council in the interest of the Municipality. Augmentation of Revenue is one of the foremost factors of the Municipality while awarding the contract to the appropriate person and also taking into account the quality of the work to be executed, coupled with the interest of the general public as to how the standard of work of any public road is to be maintained. Accordingly, the Municipality has decided the contract and passed the Resolution to that effect rejecting some of the tenders. If a person is aggrieved by the Resolution of the Municipal Council, the remedy in the first instance is to approach the authority as per Section 36 of the Tamil Nadu District Municipalities Act, 1920. It is stated that under Section 36, the petitioner has filed a representation, dated 11.7.2012 and without taking steps for disposal of the said representation and without exhausting that remedy, the petitioner has rushed to this Court challenging the Resolution of the Council and also for a direction to award the contract work to him. 13. Such an approach of the petitioner cannot be appreciated. The decision taken by the competent authority in cancelling the tender and re-tendering the cancelled work and also the Resolution passed in this regard, could not be found fault with, as the tender inviting authority has acted upon such procedure, which is in no way contrary to the Rules and the procedures involved. Therefore, the petitioner has not made out any case to interfere with such Resolution passed by the Municipal Council of the respondent-Municipality. It is open for the petitioner to pursue his representation, dated 11.7.2012 filed before the respondents 1 and 2, in which event, the respondents 1 and 2 shall dispose of the same, on merits and in accordance with law, after hearing the parties concerned, as expeditiously as possible. 14. With the above observations and directions, the Writ Petition is dismissed. No costs. The Miscellaneous Petitions are closed.