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Tripura High Court · body

2014 DIGILAW 253 (TRI)

Santosh Majumder v. State of Tripura

2014-07-02

DEEPAK GUPTA, S.C.DAS

body2014
JUDGMENT Deepak Gupta, CJ. 1. Briefly stated, the facts of the case are that the Food, Civil Supplies and Consumer Affairs Department of the State of Tripura floated Notice Inviting Tender (NIT) inviting online bids for carriage of PDS commodities to different godowns for distribution under the Public Distribution System. 2. The main grievance of the petitioners who were also tenderers is that in respect of certain routes, the bids of the private respondents which have been accepted were informal and did not comply with the conditions of the tender and, therefore, should have been rejected. 3. Shri D.K. Biswas, learned counsel for the petitioners, has drawn our attention to the initial instruction given which provided that copies of the audited balance sheets for preceding three financial years were to be uploaded in the 'My Space' folder of the bid. He has also drawn our attention to condition No. 7 which gives a right to the department to reject any submitted Bid, not in conformity with the NIT. He has also drawn our attention to Clause (iii) of the General Information which reads as follows:- (iii) Documents as sought in the NIT must be submitted on-line only. Tender(s) without submitting required documents/partial submission of required documents would be summarily rejected without assigning any reason thereof. 4. Sri Biswas also relies upon condition No. 7(ii) of the General Terms & Conditions which provides that financial Bids of only those tenderers will be opened whose technical bid is found to be satisfactory and conforming. 5. It is not disputed that a bid clarification was issued on February 14, 2014 and the portion which is relevant for this case is that only Audited Balance Sheets along with profit and loss account were to be uploaded and uploading of entire Audit Report was not required. The case of the petitioners is that the private respondents had not submitted the profit and loss account statements and, therefore, their technical bids were not in accordance with the bid documents and hence deserved to be rejected. 6. On the other hand, the learned Advocate General has drawn our attention to condition No. 5 of the General Terms & Conditions (page-21) which reads as follows:- 5. 6. On the other hand, the learned Advocate General has drawn our attention to condition No. 5 of the General Terms & Conditions (page-21) which reads as follows:- 5. If any of the required documents are not uploaded in the My Space Folder and thereafter the Bid, Tendering Authority reserves the right to declare the incomplete tender as informal or may ask the Bidder to furnish wanted documents after opening of technical bid of the tender. Besides this, the department reserves the right to seek any additional information/document in any stage from the Bidder after opening of the tender. 7. The respondents rely upon Clause 5 and submit that even after opening of the technical bids the tendering authority has reserved the right to declare the incomplete tender as informal or to ask the bidder to furnish the requisite documents. As far as respondent No. 5 is concerned, it is stated that respondent No. 5 was not required to upload the audited balance sheets or the profit and loss accounts since his annual turnover did not exceed Rs. 60 lakhs or one crore in the previous year. Therefore, there was no requirement for him to have audited balance sheet or accounts. The said respondent had, however, submitted details of the accounts in unaudited form. 8. As far as respondent Nos. 3 and 4 are concerned, they had uploaded the audited balance sheets, but had not uploaded the profit and loss accounts but copies of such profit and loss accounts had actually been submitted along with the bid documents. Respondent Nos. 3 and 4 have filed reply to the petition and have stated that though they did not upload the entire profit and loss statement but the balance sheets were duly uploaded and when the bids were filed, the said respondents had submitted copies of the complete profit and loss statement along with their offers. Therefore, according to the said respondents, nothing was hidden and these documents, i.e. the profit and loss account statements were available with the authorities. 9. Sri Biswas has placed reliance on the judgment of the Apex Court in B.S. Minhas v. Indian Statistical Institute and others, AIR 1984 SC 363 ]. This judgment is not at all applicable to the facts and circumstances of the present case. 9. Sri Biswas has placed reliance on the judgment of the Apex Court in B.S. Minhas v. Indian Statistical Institute and others, AIR 1984 SC 363 ]. This judgment is not at all applicable to the facts and circumstances of the present case. In that case, challenge was made to the appointment of the private respondent as Director of the Indian Statistical Institute. The Court held that by laws framed must be followed. This is a judgment given in the realm of service law and does not apply to commercial transaction. As far as commercial transactions are concerned, the Apex Court has time and again held that the Government in commercial transaction must be given some leeway and play in the joints. In this behalf, reference may be made to the judgment of the Apex Court in Tata Cellular vs. Union of India, (1994) 6 SCC 651 ]. 10. In B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others, (2006) 11 SCC 548 ], the Apex Court carved out a difference between the essential condition of contract and those which are not fundamental to the contract and which could be waived or relaxed. The Apex Court laid down the law in the following terms:- 66. 10. In B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others, (2006) 11 SCC 548 ], the Apex Court carved out a difference between the essential condition of contract and those which are not fundamental to the contract and which could be waived or relaxed. The Apex Court laid down the law in the following terms:- 66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under: (i) if there are essential conditions, the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with; (vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority; (vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint. 11. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority; (vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint. 11. In Rashmi Metaliks Limited and another vs. Kolkata Metropolitan Development Authority and others, (2013) 10 SCC 95 ], the Apex Court held as follows:- 8. It is a capital exhaustion of court time, lack of which has become critical. We shall, therefore, confine ourselves to Tata Cellular [Tata Cellular v. Union of India, (1994) 6 SCC 651 ]. We are mindful of the fact that it is a legitimate exercise, perfectly permissible for the Benches to advance the law provided this exercise does not lead to a conclusion which is irreconcilable with a binding precedent. We also would clarify that the manner in which a Bench appreciates the factual matrix before it can obviously be of value only if a subsequent case presents identical facts, which remains a rarity. 9. Tata Cellular states thus: "77. The duty of the court is to confine itself to the question of legality. Its concern should be: (1) Whether a decision-making authority 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) abused its 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 can be classified as under: (i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. (ii) Irrationality, namely, Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex parte Brind, (1991) 1 AC 696, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, 'consider whether something has gone wrong of a nature and degree which requires its intervention'." xxx xxx xxx 18. We think that the income tax return would have assumed the character of an essential term if one of the qualifications was either the gross income or the net income on which tax was attracted. In many cases this is a salutary stipulation, since it is indicative of the commercial standing and reliability of the tendering entity. This feature being absent, we think that the filing of the latest income tax return was a collateral term, and accordingly the Tendering Authority ought to have brought this discrepancy to the notice of the appellant Company and if even thereafter no rectification had been carried out, the position may have been appreciably different. It has been asserted on behalf of the appellant Company, and not denied by the learned counsel for the respondent Authority, that the financial bid of the appellant Company is substantially lower than that of the others, and, therefore, peculiarly preferable." 12. In the present case, there was a condition of relaxation contained in Clause 5. That relaxation has been granted to all concerned. The documents were actually available and filed with the hard copy though not uploaded along with the e-bid. It cannot, therefore, be said that the violation is of such a fundamental nature that it cannot be relaxed. The amounts tendered by the private respondents are much lower than the amounts bid by the petitioners and, therefore, the interest of the State also lies in accepting their bids. 13. In this view of the matter, we find no merit in the petition and the same is accordingly dismissed.