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2012 DIGILAW 610 (JK)

Ladakh Road Lines v. State & Ors.

2012-09-28

MANSOOR AHMAD MIR

body2012
1. By the medium of this writ petition, the petitioner, M/s. Ladakh Road Lines, is seeking to quash the decision taken by Chairman, J&K State Road Transport Corporation, respondent no.2 herein, whereby he directed re-tendering of the contract for supply of trucks to J&K State Road Transport Corporation (for short, ‘Corporation’) in terms of the communication made by respondent no.3 to respondent no.1 bearing No.JKSRTC/GML/CHT/499 dated 16.07.2012, with a direction to the respondents to allot the contract for supply of trucks to the petitioner-firm for the contract period, i.e., up to 31st March 2014, on the grounds taken in the writ petition. 2. It is averred in the petition that respondent no.4 issued a tender notice bearing No.JKSRTC/GML/CHT-2012-14/472 dated 08.06.2012, whereby tender offers were invited from reputed and registered Transport Groups/Firms/Companies/Associations dealing in transportation of goods, for supply of trucks to JKSRTC (for catering left over demand of the JKSRTC) from time to time for the contract period up to 31.03.2014. The requisite tender documents were to be submitted on or before 30.06.2012 up to 11 AM in two separate sealed envelopes subscribed as Technical Bid and Financial Bid. Petitioner-firm obtained the tender documents and submitted the same. Technical Bids were opened and petitioner-firm and one Vikas Transport Company were found to be eligible, whereas M/s M. R. Motor Transport Corporation and M/s New JK Roadways failed to make the grade; so their Technical Bids were rejected. Accordingly, petitioner-firm and one Vikas Transport Company qualified for opening of the Financial Bid. Financial Bids were opened in presence of respondents 3 & 5. Petitioner-firm was found to be the highest bidder and, therefore, was called for negotiation by respondent no.5. After negotiation, the negotiated commission was agreed upon by the parties as is given in annexure “D”. Thereafter, respondent no.5 submitted a report to respondent no.3, Managing Director of the Corporation, with the observation that there is increase of 52-100% rate of commission for different stations. Respondent no.3, in turn, sought report from the Financial Advisor and Chief Accounts Officer, who, too, confirmed the recommendations of respondent no.5. Accordingly, respondent no. 3 made recommendations to respondent no. 2, Chairman of the Corporation, for approval of allotment of the contract in favour of petitioner-firm. However, respondent no.2, instead of according approval to the contract, issued communication dated 16.07.2012 directing re-tendering of the contract. The said communication is impugned in the writ petition. Accordingly, respondent no. 3 made recommendations to respondent no. 2, Chairman of the Corporation, for approval of allotment of the contract in favour of petitioner-firm. However, respondent no.2, instead of according approval to the contract, issued communication dated 16.07.2012 directing re-tendering of the contract. The said communication is impugned in the writ petition. 3. The petitioner has questioned the decision of re-tendering of the contract on the grounds taken in paragraphs 7(a) to 7(g) of the writ petition. 4. Respondents have filed their objections, resisting the petition on the grounds taken in it. It is contended that the contract for supply of trucks to the respondent-Corporation was allotted to the petitioner-firm for a period two years with effect from 01.04.2010 to 31.03.2012. Before the said contract period would expire, the respondent-Corporation issued a tender notice in the month of February 2012 inviting all eligible private transporters to offer their bids for supply of trucks in the nature of Technical Bids and Financial Bids with security deposit of Rs.40 lacs for CHT contract (Class-1 Government Departments/CA&PD) and Rs.02.00 lacs for CHT contract (Class-11 Govt. owned Corporation). The petitioner-firm and others participated in the tendering process and quoted the commission at Rs.37.10%. On comparative analysis, the petitioner-firm was found to be the highest bidder. All the necessary formalities for allotting the contract were completed, but the Corporation could not make the formal allotment order in favour of petitioner, because of the order dated 14.03.2012 passed by this Court in OWP No.282/2012, instituted by the writ petitioner. The Corporation made all efforts to complete the pleadings, but, due to delay, the writ petition was not taken to its logical end. In order to ensure continuous supply of essential commodities to various remote places to serve the public interest, the writ respondents, i.e., the Corporation was left with no option but to grant extension to the petitioner-firm vide order dated 31.03.2012 for continuing supply of trucks on the existing terms and conditions as contained in the contract for the period 2010-12. However, the petitioner-firm unilaterally withdrew its offer vide communication dated 30.03.2012, which constrained the writ respondents, the Corporation, to make an order for forfeiture of earnest money deposited by the petitioner-firm, rendering infructuous the tender notice and stalling the conclusion of the tender process. The Corporation was, thus, constrained to issue a fresh tender notice dated 08.06.2012. However, the petitioner-firm unilaterally withdrew its offer vide communication dated 30.03.2012, which constrained the writ respondents, the Corporation, to make an order for forfeiture of earnest money deposited by the petitioner-firm, rendering infructuous the tender notice and stalling the conclusion of the tender process. The Corporation was, thus, constrained to issue a fresh tender notice dated 08.06.2012. The eligible transporters obtained the tender documents, but only four transporters deposited their offers within the time frame and two others made a request for depositing the tender notice after time frame. After examining the Technical Bids, M/s Ladakh Road Lines, petitioner herein, and M/S Vikas Transport Company again qualified the Technical Bid. After examining the Financial Bids, writ petitioner was again found to be highest bidder, but this time the rate of commission was far below than the rate of 37.10% as offered by it in response to the first tender notice. 5. It is contended that writ petitioner was called for negotiation and Corporation tried to persuade it to raise the amount of commission to enable the respondent-Corporation to protect its financial interests, but in vain. It is further contended that the Corporation, being the guardian of finances, is within its right to accept or refuse the tenders and take a decision in the interest of the Corporation with regard to the quotations made available by the participating tenderers. It is further averred that complaints were received by the Corporation regarding transparency of tender process and improper fixation of criteria for allotment of contract, which necessitated the Corporation to withdraw the tender notice so that fresh tenders could be floated in order to provide sufficient opportunity to all eligible persons to participate in the process and to allot the contract at the best rate of commission. 6. The moot question for consideration is: whether the respondent-Corporation was within its jurisdiction to cancel the tender process and make an order for re-tendering? The answer in the face of the facts and circumstances narrated above and for the reasons following hereunder has to be yes. 7. It appears, the writ petitioner is supplying trucks to the Corporation right from the year 2010 till today, first on the basis of concluded contract of 2010 and, thereafter, on the basis of interim directions passed by this Court from time to time. 7. It appears, the writ petitioner is supplying trucks to the Corporation right from the year 2010 till today, first on the basis of concluded contract of 2010 and, thereafter, on the basis of interim directions passed by this Court from time to time. Admittedly, as per the Financial Bids, petitioner-firm was found to be the highest bidder and the rate of commission as offered by the petitioner-firm was 37.10%. All the necessary formalities for allotting the contract were concluded, but before an allotment order could be issued in favour of petitioner-firm, petitioner filed OWP No.282/2012. This Court vide order dated 14.03.2012 directed the respondent-Corporation not to make any final allotment till next date and that was the handicap in issuing the final orders. 8. It is surprising to note that after getting the interim order from this Court in OWP No.282/2012, the petitioner-firm unilaterally withdrew its offer vide communication dated 30.03.2012, thus, rendering the allotment process infructuous. The Corporation, on the other hand, vide order dated 31.03.2012 itself granted extension to the petitioner-firm for continuing supply of trucks on the existing terms and conditions as contained in the contract for the period 2010-12, i.e., at the rate of 11%, on the ground of running the affairs of the Corporation and to ensure continuous supply of essential commodities to various remote places to serve public interest. It is reiterated here that the Corporation allowed the petitioner-firm to supply the trucks at the commission rate of 11%, which, admittedly, is far below than the rate of 37.10%, offered by the petitioner-firm in response to the first tender notice published in February 2012. 9. In terms of the tender process, which commenced in February, 2012, the writ petitioner was declared to be the highest bidder and had to be allotted the contract. But, before the allotment order could be issued in favour of the petitioner, he filed OWP No.282/2012 wherein an interim direction was issued directing the respondents not to make final allotment. This constrained the writ-respondents to withdraw the tender notice. Thereupon, the petitioner withdrew the writ petition. It would be appropriate to reproduce hereunder the prayer clause of the said writ petition. “i. A writ in the nature of certiorari be issued in favour of the petitioner and against the respondents for quashing the impugned Tender Notice for 2012-2014 (Annexure-K- ii. This constrained the writ-respondents to withdraw the tender notice. Thereupon, the petitioner withdrew the writ petition. It would be appropriate to reproduce hereunder the prayer clause of the said writ petition. “i. A writ in the nature of certiorari be issued in favour of the petitioner and against the respondents for quashing the impugned Tender Notice for 2012-2014 (Annexure-K- ii. A writ in the nature of mandamus be issued in favour of the petitioner and against the respondents to allow the petitioner firm to supply the trucks to SRTC and carry the material to different stations in view of the agreement entered with the SRTC. iii. A writ in the nature of mandamus be issued in favour of the petitioner and against the respondents to release the with held amount of 2.73 crore of the petitioner firm and till the investigation in the fraud committed is not completed the contract for supply of trucks may be continued with the petitioner firm. iv. Any other writ order or direction as this Hon’ble Court deems just and proper may be issued in favour of the petitioner and against the respondents.” 10. It would also be appropriate to reproduce hereunder the order passed by this Court on 04.06.2012: “Learned counsel for respondents stated at bar that he is under instructions to report that impugned tender notice subject matter of the writ petition stands withdrawn. His statement is taken on record. In view of the statement (supra), the prayer clause-I of the writ petition has become infructuous. At this stage Mr. Shah stated that he may be permitted to withdraw the writ petition with liberty to seek appropriate remedy. His statement is taken on record. Accordingly, this writ petit on is dismissed as withdrawn alongwith all connected CMPs with liberty to the writ petitioner to seek appropriate remedy. However, it is made clear that withdrawal of the writ petition shall not cause any prejudice to the rights of the petitioner.” 11. It is, thus, clearly established that it was the petitioner who, for its own interests, created hindrance/obstruction for the Corporation to conclude the tender process. However, it is made clear that withdrawal of the writ petition shall not cause any prejudice to the rights of the petitioner.” 11. It is, thus, clearly established that it was the petitioner who, for its own interests, created hindrance/obstruction for the Corporation to conclude the tender process. It is shocking to note that the respondents still extended the life of the contract, allotted in favour of the petitioner for the years 2010-2012, beyond its fixed period, in favour of the petitioner-firm and allowed it to supply the trucks, despite the fact that its earnest money/security deposit was forfeited, and that too, when the commission at the rate of 11% is far below the rate of 37.10%, offered by the petitioner-firm in response to first tender notice for the year 2012-2014. It smacks of something fishy, as it is the petitioner, who all along has stalled the conclusion of the tender process for the years 2012-2014. 12. Petitioner, M/s Ladakh Road Lines, by the medium of OWP No.933/2012, challenged Order No.JKSRTC/GML/CHT/496 dated 10.07.2012, issued by respondent no.3 herein, whereby the earnest money/security deposit of petitioner-firm was forfeited. In that writ petition following order was passed by this Court on 24.07.2012. “Issue notice returnable within four weeks. Steps for service within one week. List after service. Notice as above in CMP also. In the meantime, operation of the impugned order No. JKSRTC/GML/CHT/496 dated 10th July, 2012 to stay. It is further provided that amount be kept in fixed deposit for a period of six months.” The said writ petition is still on the dockets of this Court. 13. M/s New JK Roadways also filed a writ petition, OWP No.872/2012, seeking a direction to the respondents to allow it to participate in the second tendering process initiated by them vide tender notice dated 09.06.2012, in which the writ petitioner M/s Ladakh Road Lines, was shown to be the highest bidder. The writ petition was considered, notice was issued and parties were directed to maintain status quo vide order dated 16.07.2012. The Corporation/writ respondents filed reply stating therein that the writ petition had been rendered infructuous as they have withdrawn the tender notice. Accordingly, the writ petition came to be dismissed as withdrawn vide order dated 19.07.2012. 14. The writ petition was considered, notice was issued and parties were directed to maintain status quo vide order dated 16.07.2012. The Corporation/writ respondents filed reply stating therein that the writ petition had been rendered infructuous as they have withdrawn the tender notice. Accordingly, the writ petition came to be dismissed as withdrawn vide order dated 19.07.2012. 14. The writ petitioner, i.e., M/s Ladakh Road Lines, did not question the said order, but has questioned the re-tendering process ordered by respondent no.2, in the present writ petition. Petitioner-firm filed the present writ petition on 26.07.2012, but it has not made any mention in the writ petition regarding the tender process having been called in question by any aggrieved party. It further appears that the petitioner-firm had also filed OWP Nos.477/2011, 541/2011 and 743/2011. 15. In OWP No.477/2011, the writ petitioner had called in question the tender notice dated 13.04.2011 (annexure “G” to the said writ petition), issued for the year 2011-12. This Court vide order dated 28.04.2011 directed keeping in abeyance the tender notice dated 13.04.2011, which was impugned in the said writ petition. 16. Thereafter, petitioner filed yet another writ petition, OWP No.541/2011, seeking to quash tender notice dated 29.04.2011, and this Court, vide order dated 16.05.2011, stayed the operation of that tender notice. 17. Thus, everything was kept on hold till 05.08.2011, when the writ petitioner withdrew OWP No.477/2011 along with OWP No.541/2011. Now what appears is that the respondents have allowed to supply trucks in terms of the previous concluded contract. 18. Petitioner-firm also filed OWP No.743/2011 questioning the allotment of contract which was made vide order No.KC/PW-SE/carriage/2010/1015-20 dated 13.05.2010 in favour of M/s East West Road Lines, Shivpora, Srinagar. The order impugned therein was stayed vide Court order dated 24.06.2011. However, vide order dated 06.07.2011, the writ petitioner withdrew the said writ petition unconditionally. The said order is reproduced herein below. “Mr. Shah seeks withdrawal of the petition on the instruction of his client. Order accordingly. Petition is dismissed as withdrawn. Interim direction, if any, shall stand vacated.” 19. In the given circumstances, it appears that the writ petitioner utilized all the means to keep hold on the supply of trucks to the Corporation for year 2011 and 2012, though without any contract, and only on the basis of the orders passed by the Corporation. One wonders why the Corporation has remained a mute-spectator. In the given circumstances, it appears that the writ petitioner utilized all the means to keep hold on the supply of trucks to the Corporation for year 2011 and 2012, though without any contract, and only on the basis of the orders passed by the Corporation. One wonders why the Corporation has remained a mute-spectator. Despite noticing all the circumstances, how and why did the respondents allow the petitioner-firm to supply trucks on the basis of the concluded contract of 2010-11, is a question that requires to be gone through. 20. The petitioner, though a successful bidder for the financial year 2012-14, prevented the writ respondents from issuing the formal orders by filing OWP No.282/2012 and getting the stay order on 14.03.2012. He then made an application for withdrawal of the contract, which led to forfeiture of his deposit, as mentioned hereinabove. Thereafter, the petitioner withdrew the said writ petition on 04.06.2012. Given these facts and the conduct of the petitioner-firm, his sole object has been to compel the respondent-Corporation to continue the arrangement that had been entered into between the parties for the previous contract period. Thus, the petitioner wanted an unholy contractual alliance with the Corporation. If the petitioner was within its right to withdraw from the contract, though finally concluded, then, correspondingly, the Corporation, too, was within its rights to withdraw the tender notice and order for re-tendering the same. It becomes axiomatic that the petitioner-firm withdrew the writ petition to secure its own interests in order to participate in the re-tendering process, wherein he made an offer of commission far below the earlier rate of 37.10% which had been offered by it in response to the first tender for the same tender period. The petitioner-firm was using all these tactics in its own interest. The Corporation ought to have been diligent enough to smell the intention of the petitioner-firm and ought to have taken steps to secure its own interests, which, of course, would also have been in public interest. The fresh tenders offered by the petitioner are not in tune with the offer made by the petitioner-firm itself in the first instance and for the same period. 21. Learned counsel for petitioner-firm argued that the impugned action on the part of respondents is malafide. The petition is bereft of the particulars of malafide. The fresh tenders offered by the petitioner are not in tune with the offer made by the petitioner-firm itself in the first instance and for the same period. 21. Learned counsel for petitioner-firm argued that the impugned action on the part of respondents is malafide. The petition is bereft of the particulars of malafide. It is also not disclosed in the petition as to which officer had acted in the matter in a malafide manner. The submission is recorded only to be rejected. 22. Learned counsel for petitioner-firm also argued that the orders made by the Corporation are without jurisdiction. No such ground is taken in the writ petition. 23. The Apex Court in the case M/s. BECIL v Arraycom India Limited, 2009 AIR SCW 6532, has held that the Courts should not interfere with the Government decision provided it is reasonable. Same view was taken by the Supreme Court in Tata Cellular v Union of India, AIR 1996 SC 11 . A Division Bench of this Court in LPAOW No.3/2010 decided on 03.02.2010 and a Single Bench of this Court in OWP No.607/2006 decided on 02.10.2006 held on the same lines. 24. In the given circumstances, I find no merit in the writ petition which is dismissed along with all connected CMPs with costs. The cost is quantified at rupees one lac, to be utilized for welfare of the orphans or to meet out the expenses of cancer patients, who have no money to get the treatment. Chief Secretary of the State is directed to see how the affairs of the Corporation are being run and manned and take effective measures. With these observations the writ petition is dismissed. 25. Registry to send a copy of the order to the Chief Secretary, J&K State.