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2012 DIGILAW 4016 (MAD)

A. Jayapaul v. Commissioner, Tambaram Municipality, Tambaram

2012-09-27

V.DHANAPALAN

body2012
JUDGMENT Heard Mr.M.Rajendiran, learned counsel for the petitioner and Ms.V.M.Velumani, learned Special Government Pleader appearing for the respondent. 2. The petitioner has challenged the impugned order dated 29.02.2012 passed by the respondent in Na.Ka.No.7779/2011/A1, seeking to quash the same and for a consequential direction to the respondent to issue the confirmation order in his favour at Rs.10,20,000/-for a consecutive period of three years block from 2012-2013 to 2014-2015 as notified by the respondent in its tender notice dated 13.01.2012 or to issue the confirmation order at Rs.4,00,000/-for one year, i.e. 2012 to 2013 for the reason that he is the successful bidder compared with other bidders. 3. It is the case of the petitioner that the respondent issued a tender notice for the years 2012-2013 to 2014-2015 for three years towards the toll collection right for 11 items, viz. Bus Stand Entry Toll Fee for buses, Commercial Vehicle Toll Fee, which is coming for loading and unloading, Road Side Market and Fishing Market, etc. In the tender notice issued by the respondent on 13.01.2012, it is stated that the tender will be opened on 08.02.2012 at 11.00 am and that whoever wants to make a bid, they have to pay the EMD on or before 07.02.2012 till 4.00pm. The petitioner quoted a sealed tender for a sum of Rs.10,20,000/- and dropped in the tender box. Subsequently, the respondent conducted an open tender on 08.02.2012 for the above said market tender. 4. When the petitioner was eagerly waiting for the opening of the tender to know about the status of the tender, the respondent conducted an open tender on 08.02.2012 at 12.00 noon and called for the open tender for 2012-2013. When the petitioner asked the respondent as to why the open tender was conducted for one year i.e. 2012-2013, when the sealed tender called for three years i.e. 2012-2013 to 2014-2015, the respondent did not give proper explanation to him and continued his stand to conduct the open tender for one year as against the tender notice period of three years. Since the petitioner really intended to succeed in the bid, he participated in the open tender on payment of EMD and quoted a sum of Rs.4,00,000/-for one year. The petitioner alone participated in the open tender and succeeded at the above said amount. 5. The tender box contained three sealed covers and three persons had quoted their tender. Since the petitioner really intended to succeed in the bid, he participated in the open tender on payment of EMD and quoted a sum of Rs.4,00,000/-for one year. The petitioner alone participated in the open tender and succeeded at the above said amount. 5. The tender box contained three sealed covers and three persons had quoted their tender. The petitioner quoted Rs.10,20,000/- which is the highest bid amount among others. The petitioner quoted the above said price for three years and the same was also mentioned in the sealed cover, which was supplied by the respondent. The respondent passed an agenda dated 28.02.2012 at 4.00 pm in the ordinary meeting in order to pass various subjects and Resolutions. In subject No.77, the respondent has declared the petitioner as the successful bidder in the open tender for Rs.4,00,000/-and Rs.10,20,000/- in the sealed tender. The petitioner is the only person to have quoted the highest price in open as well as in the sealed tender. In the respondent's agenda in Subject No.77, the tender period for the above tender is mentioned as one year i.e. 2012-2013 as against the original period of three years i.e. 2012-2013 to 2014-2015, which was mentioned in the tender notice dated 13.01.2012. 6. On 08.02.2012, the petitioner made a representation to the respondent stating that he quoted the sealed tender for three years as per the tender notice issued by the respondent with respect to fishing market, whereas, in the open tender, the respondent conducted auction for one year. However, the petitioner had quoted Rs.4,00,000/-in the open tender and requested the respondent to confirm the tender at Rs.4,00,000/-and further requested to issue confirmation order in his favour, as the respondent do not have any loss in the above said amount and as such, he is the successful bidder in both categories. 7. While so, to the shock and surprise of the petitioner, the respondent has issued the impugned order dated 29.02.2012 stating that the petitioner has to pay the quoted lease amount of Rs.10,20,000/-within seven days from the date of receipt of the order, but appropriated the period as 2012-2013 only, i.e. for a period of one year only instead of stipulating the correct period mentioned in the tender form viz., 2012-2013 to 2014-2015 for a period of three years in consecutive as a block. According to the petitioner, the respondent wantonly and deliberately communicated the above said order to the petitioner in an arbitrary manner, that too to a wrong address. The petitioner claims that he was the successful tenderer for a period of over 35 years and therefore, he assailed the impugned order on the ground that the respondent ought to have considered the tender period of three years i.e. 2012-2013 to 2014-2015 and followed the tender notice while conducting the tender. 8. The respondent has filed counter affidavit and inter alia stated as follows : (a) The Tender-cum-Auction Notification dated 13.01.2012 was issued as per G.O.Ms.No.181/MA & WS Department, dated 19.09.2008. As per the said Government Order, Tender-cum-Auction will be conducted for one year and will be extended for two more years on enhanced lease amount and the Block period is three years. As per the Notification dated 13.01.2012, tender was called for various items till 08.02.2012 upto 11.00am and auction would be held on the very same day. As per the Notification dated 13.01.2012, auction was held on 08.02.2012 for the year 2012-2013. The petitioner sought for clarification as to why auction is being conducted for only one year instead of three years. It was explained to him that Tender-cum-Auction was for the block period of three years and that tender and bid in the auction has to be made for one year and for the successful bidder, the Lease would be extended for two years with enhanced amount. His attention was drawn to G.O.Ms.No.181 and Condition No.13 of the Tender Conditions. Being satisfied with the explanation, the petitioner participated in the auction and quoted a sum of Rs.4,00,000/- for 2012-2013. No other person participated in the auction even though two other persons submitted their tender. In the Notification, G.O.Ms.No.181 was mentioned and as per Clause No.13 of the Tender conditions, Tender-cum-Auction is for one year. The successful person must deposit the lease amount for the year 2012-2013 to get the order confirming the lease. (b) It is not correct to state that the petitioner quoted a sum of Rs.10,20,000/- for all the three years. The petitioner and others have quoted the amount for only one year and the present claim of the petitioner is an afterthought to escape from the liability. The tender quoted amount of Rs.10,20,000/-and open auction amount of Rs.4,00,000/-were placed before the Council. The petitioner and others have quoted the amount for only one year and the present claim of the petitioner is an afterthought to escape from the liability. The tender quoted amount of Rs.10,20,000/-and open auction amount of Rs.4,00,000/-were placed before the Council. The Council has accepted the highest offer of Rs.10,20,000/- and awarded the lease for the year 2012-2013 to the petitioner. The auction Notification and conditions for auction makes it very clear that the Block period of lease is three years and tender and auction will be for one year, which will be extended for two years on enhanced lease amount. As the petitioner did not deposit a sum of Rs.10,20,000/-, EMD of Rs.3,00,000/- was forfeited. The highest lease amount of Rs.4,52,000/- was received in re-tender-cum-auction, whereas, the petitioner offered Rs.10,20,000/-. After adjusting EMD of Rs.3,00,000/- and lease amount of Rs.4,52,000/-, the petitioner is liable to pay a further sum of Rs.2,68,000/- being the loss caused to the Municipality. The said forfeiture is valid and legal and is as per the terms and conditions of Auction. (c) The respondent contended that as the petitioner did not turn up to pay the amount, they decided to go for Re-tender-cum-Re-auction and it was conducted on 29.03.2012 and one K.Venkatesan, a friend of the petitioner was the highest bidder and is collecting fees from vendors. It is not correct to state that the respondent with a view to favour two others is not accepting the bid of the petitioner for three years. Therefore, they prayed for dismissal of the writ petition. 9. It is the foremost contention of the learned counsel for the petitioner that as per the Tender Notification, the bid period was three years from 2012-2013 to 2014-2015 and the amount quoted was as per the terms and conditions. Instead of that, the respondent has proceeded to demand the entire amount for one year period viz., 2012-2013 and therefore, it is arbitrary and against the Tender Notification. 10. On the other hand, learned Special Government Pleader would contend that as per the Government Order in G.O.Ms.No.181, the Tender-cum-Auction will be for one year and will be extended for two more years on enhanced lease amount and the Block period is three years. 10. On the other hand, learned Special Government Pleader would contend that as per the Government Order in G.O.Ms.No.181, the Tender-cum-Auction will be for one year and will be extended for two more years on enhanced lease amount and the Block period is three years. As per the Notification also, tender was called for various items for a block period of three years and for the first block period, the auction was conducted and the same was clarified to the petitioner. Since the petitioner did not turn up to deposit the bid amount, the respondent has called for Re-tender-cum-Re-auction as per the Resolution of the respondent Municipality and therefore, there is no arbitrariness on the part of the respondent as far as the tender process is concerned. 11. A circumspection of the facts of the case would reveal that there was a Tender Notification on 13.01.2012 and the petitioner has participated in the tender and submitted his application before the prescribed date and quoted the tender amount. As it was a sealed tender for a sum of Rs.10,20,000/-, he submitted the same in the tender box. The respondent conducted an open tender on 08.02.2012 for the above said market tender. It is claimed by the petitioner that he quoted the amount for the block period of three years. On the contrary, the respondent has proceeded to demand the amount for a period of one year i.e. 2012-2013. In this regard, it has to be seen that Clause 13 of the Tender Conditions makes it clear that after the auction is over, the successful bidder has to pay the bid amount for the period, 2012-2013 and thereafter only, the Work Order has to be given to the bidder. This condition has been accepted by the petitioner and having participated in the tender process, he has now questioned the same on the ground that it was for a period of three years block period and he quoted the amount for that period and therefore, he could not pay the said amount as demanded in the impugned Notification. The respondent took a stringent view that the petitioner has sought for a clarification as to what auction is being conducted in respect of three years. It was explained to the petitioner that the tender-cum-auction will be for one year and will be extended for a period of two years on enhanced lease amount. The respondent took a stringent view that the petitioner has sought for a clarification as to what auction is being conducted in respect of three years. It was explained to the petitioner that the tender-cum-auction will be for one year and will be extended for a period of two years on enhanced lease amount. His attention was drawn to G.O.Ms.No.181 and Clause No.13 of the Tender Conditions. Thereafter, being satisfied with the explanation, the petitioner participated in the auction and quoted a sum of Rs.4,00,000/- for the block year 2012-2013 and no other person participated in the auction, even though two other persons submitted their tender. And, itis also the stand of the respondent that it is not correct to state that the respondent did not mention that Tender-cum-Auction was only for one year and not for three years. In the Notification, it is also mentioned that as per Clause No.13 of the Tender Conditions, Tender-cum-Auction is for one year and that the successful person must deposit the lease amount for the year 2012-2013 to get the order confirming the lease. 12. The impugned communication would reveal that the respondent has informed the petitioner that he is the successful bidder and he has to deposit the amount of Rs.10,20,000/- within a period of seven days from the date of receipt of a copy of the order with an Agreement to be entered upon Twenty Rupees Stamp Paper, in default, the petitioner has to forfeit the EMD amount and also go for re-tender and after cancellation of the tender, they have to go for re-tender. 13. Analysing the above position, it could be seen that the petitioner has not deposited the amount as he offered in the bid and the petitioner's understanding that the tender-cum-auction was for a block period of three years and that he quoted the amount for the said period of three years could not be the reason for not depositing the amount. If there is any kind of difficulty, it has to be clarified and accordingly, the petitioner has questioned the respondent and thereafter, participated in the tender process. If that is so, in the absence of any deposit of the bid amount, there is no other option available to the respondent except to go for re-tender. If there is any kind of difficulty, it has to be clarified and accordingly, the petitioner has questioned the respondent and thereafter, participated in the tender process. If that is so, in the absence of any deposit of the bid amount, there is no other option available to the respondent except to go for re-tender. In that process, the petitioner has participated and quoted Rs.4,00,000/- and finding that some other person is the highest bidder, the petitioner has now challenged the impugned communication on the ground that the respondent has not followed the procedure as per the Tender Notification. 14. In matters of tenders, the duty of the court is to confine itself to the question of legality. Its concern should be : Whether the Tender Inviting Authority – 1. exceeded its powers, 2. committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abusedits powers ? Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review are : (i) Illegality; (ii) Irrationality; and (iii) Procedural impropriety. This is the law laid down by the Supreme Court in Tata Cellular v. Union of India, (1994) 6 SCC 651 . In the very same judgment, the power of Judicial Review has been examined by the Supreme Court, wherein it has been held that if the decision relating to award of contract is bona fide and is in public interest, Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration of error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest or to decide contractual disputes. Restraint under judicial review is always limited to this Court and it has to be invoked rarely and hesitantly under Article 226 of the Constitution of India. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest or to decide contractual disputes. Restraint under judicial review is always limited to this Court and it has to be invoked rarely and hesitantly under Article 226 of the Constitution of India. The Courts are always hesitant to interfere with the administrative policy decision and in rarest of rare occasions, if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts can interfere. 15. In the instant case, the issuance of Notification and other procedures followed by the respondent and the impugned communication sent to the petitioner are all found in order and they are in no way an infringement of any of the Rules of the Tender. Therefore, in the absence of any arbitrariness, discrimination or mala fides so also Illegality, irrationality and procedural impropriety, the action of the respondent cannot be interfered or faulted with under Article 226 of the Constitution. 16. At this stage, learned counsel for the petitioner would consistently plead that EMD has been paid by the petitioner and therefore, forfeiture may be looked into by the respondent and he may also be directed to consider the request of the petitioner. 17. In the light of the above, the petitioner is at liberty to make a representation to the respondent in respect of his request to return the EMD and if such a representation is made by the petitioner, the respondent may consider the same sympathetically, taking into account the condition of the petitioner and pass appropriate orders on the representation. The Writ Petition stands dismissed with the above observation. No costs. Consequently, connected M.P.Nos.1 and 2 are closed.