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2015 DIGILAW 995 (CAL)

Orient Blackswan Pvt. Ltd. v. Sandip Nayak

2015-12-23

JOYMALYA BAGCHI, MANJULA CHELLUR

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JUDGMENT : Joymalya Bagchi, J. Appeal being MAT No. 111 of 2015 is directed against the judgement and order dated 13th January, 2015 passed by the learned Single Judge whereby the learned Single Judge quashed the work order issued in favour of respondent no. 14 for publishing and distribution of text books for the West Bengal Council of Higher Education (hereinafter referred to as the Council) for the year 2015-2016 and directed the Council to take decision in respect of tender for the aforesaid year within a stipulated time. Cross appeal being MAT No. 133 of 2015 has also been preferred against the said order by the writ petitioner/respondent No. 1. 2. Facts giving rise to the aforesaid appeals are as follows : 3. On 29th April, 2013 the Council published a notice inviting tender from reputed and bona fide publishers for printing, binding, publishing and distribution of 8 text books against annual royalty on sale proceeds for the years 2013-2014, 2014-2015 and 2015-2016. 4. The salient terms of the said tender are as follows :- (a) The publisher must be a member of any recognised publishers' association of West Bengal as well as of Federation of Indian Publishers (FIP) and the Federation of Publishers' and Booksellers' Associations in India (FPBA) for the last three consecutive years; (b) The publisher must have a proven record of publishing Test Books on different subjects for other Boards like CBSE, ICSE and ISCE for the last three consecutive years; (c) The publisher must have a long history of credibility in the market and transparency both in financial and business dealings." 5. Subsequently by a corrigendum issued on 02.05.2014 clause (a) was modified to the extent that membership of any of the aforesaid associations for last three years would be sufficient. 6. Both the appellant and the writ petitioner/respondent along with others participated in the tender. On 15th May, 2013 the offers of the participants were opened. It was found that the appellant had proposed a rate of royalty at 25% of the total sale proceeds while writ petitioner/respondent no. 1 proposed a royalty to the tune of 35% and another bidder Book Syndicate Pvt. Ltd. proposed a royalty of 26% of the sale proceeds. The offers of other bidders were cancelled for not meeting the eligibility criteria. No decision, however, was taken with regard to allotment of work order on that day. 1 proposed a royalty to the tune of 35% and another bidder Book Syndicate Pvt. Ltd. proposed a royalty of 26% of the sale proceeds. The offers of other bidders were cancelled for not meeting the eligibility criteria. No decision, however, was taken with regard to allotment of work order on that day. On the next day, that is, 16th May, 2013 pursuant to deliberations between the members of tender sub-committee it was claimed that points of consideration were drawn up wherein it was, inter alia, recorded as follows :- "Though there were fourteen points mentioned in the Tender Notice the subcommittee shall put emphasis on the following points :- (a) Tenderer must be a bona fide publisher not bookseller and must be a member of any recognised association of publisher. (b) Tenderer must have long experience of publishing text books with proper in house editorial efficiency, own warehouse and state wide supply network. (c) Tenderer must have long experience of publishing text books for Boards/Councils like WBBSE, WBCHSE, CBSE, ISC and ICSE. (d) Percentage of Royalty offered by the Tenderers is not at all the chief criteria. The Council is not a profit-making organisation. It is solely concerned with quality Text Books with proper editorial inputs and to make them available to millions of students at a reasonable rate. Considering the trends of the College Street Book Market of selling pirated copies of Council's Text Books, selling computerised print-outs of text materials with Guide-Books, Note-Books at the high price. Enhanced rate of royalty will have every possibility of enhancing the price of the book as well as selling pirated copies at a low price. Earlier, the Council has experienced such things-Visva Bharati, the erstwhile Publisher of the Council's Text Books, has till date more than nine lakh's copies of books unsold despite increasing number of students every year. Moreover, till March, 2013 the Council has been receiving royalty at the rate of 20% and maximum 25% against Text Books. Therefore, the Council will be happy to receive royalty either at previous rate or a marginal enhanced rate as the Council has no financial involvement in printing, binding and distributing the books." 7. In the selfsame document writ petitioner/respondent no. 1, though he had offered the maximum rate of royalty, was held to be disqualified on the following grounds :- "Tenderer No. 14. In the selfsame document writ petitioner/respondent no. 1, though he had offered the maximum rate of royalty, was held to be disqualified on the following grounds :- "Tenderer No. 14. Punascha-No previous experience of publishing text books except some minor books for WBBME. In 2012 Mr. Shankari Bhusan Nayak, (father of Mr. Sandip Nayak, Proprietor of Punascha), the owner of Grantha-Tirtha, a College Street Book Shop with its godown at 11B Nabin Kundu Lane, Kolkata-700 009, P.S. Amherst Street was caught red handed for publishing and selling guide-books. On Gulliver's Travels with passages taken from the original book published by Orient Blackswan on behalf of WBCHSE without taking any permission from the publisher. FIR and Charge Sheet were framed u/s IPC 120B/420 and 63/65 Copyright Act. Later Mr. S.D. Nayak, was released on bail on 26.06.2012. In the FIR, the name of Mr. Sandip Nayak has been mentioned who could not be found at the time of inspection. The news came in The Telegraph on 28.06.2012. Offers 35% Royalty Cannot be considered for the unscrupulous activities." 8. Thereafter, pursuant to negotiations appellant was called upon to match the rate of royalty with the other bidder, namely, Book Syndicate and the appellant was awarded seven out of eight titles. The other title was awarded to Book Syndicate. 9. In response, the appellant increased his royalty to 26% but expressed its interest only in respect of 5 titles out of 7 titles offered to it. The writ petitioner/respondent, though his rate of royalty was the highest, was not communicated the reasons of his disqualification. He came to know of such allotment to appellant and Book Syndicate only through newspaper reports. Thereupon, the writ petitioner by letters dated 24th and 27th May, 2013 addressed to the Secretary of the Council protested about discrimination and favouritism by the President of the Council towards the appellant in the tendering. 10. On 28th May, 2013 Secretary of the Council also complained about gross discrepancies in the decision making process of the tender sub-committee and placed on record the fact that though he was absent on 16.05.2013, the points of consideration were drawn up and the consequential decision was taken thereon on that day and he had erroneously signed the said documents without verifying them. 11. 11. On the basis of representations, the Government intervened in the matter and sent observers for the purpose of supervising the tender process in exercise of its statutory powers under section 35 of West Bengal Higher Secondary Act. On 19.06.2013 the tender sub-committee decided to distribute the work order equally between the appellant and Book Syndicate. 12. On the basis of the recommendation of the Government observers the tender committee thereafter on its meeting dated 21.06.2013 decided to renegotiate with all the eligible tenderers including the appellant and the writ petitioner herein. 13. On 24th June, 2013 a meeting was held between the representatives of the writ petitioner and other tenderers in the chamber of the President of the Council and the minutes of the meeting was drawn up. It appears from the minutes of the meeting that major/bulk portion of the work order was proposed to be allotted to the appellant while minor portion of the work order was proposed to be allotted to the writ petitioner, Books Syndicate and others. Titles which were not part of the Notice inviting Tender were also allotted to various parties. Rate of royalty was fixed at 26% uniformly. 14. Work orders were accordingly issued to the appellant, writ petitioner and Book Syndicate. 15. The writ petitioner did not accept such work order and approached this Court in W.P. No. 20068 (W) of 2013, inter alia, praying for quashing of the entire process of allotment and for allotment of the tender exclusively to him as he had offered the highest bid. 16. Initially, an order of stay was passed but the said stay order was vacated upon production of original records which contained the aforesaid points of consideration, inter alia, indicating that the petitioner was ineligible due to lack of experience and his alleged involvement in plagiarising books of the Council. Copies of the documents were handed over to the petitioner and the petitioner instituted the instant writ petition after withdrawing the earlier writ petition. 17. After hearing the parties, learned Single Judge partly allowed the writ petition by quashing the work order for 2015-2016 and directed the Council to take a fresh decision in the matter. Prayer for compensation of the loss of the petitioner in matter of award of work order in favour of the appellant for 2013- 2014, 2014-2015 was, however, turned down. 18. Mr. Prayer for compensation of the loss of the petitioner in matter of award of work order in favour of the appellant for 2013- 2014, 2014-2015 was, however, turned down. 18. Mr. Mitra, learned senior counsel appearing for the appellant argued that the petitioner was ineligible to maintain the writ petition. He had unlawfully sought intervention by the Government in the tendering process and had thereafter illegally participated in the said process and was awarded a part of the work order. Having done so, the petitioner was estopped from challenging the same. It was further argued that the conduct of the petitioner was not beyond reproach as he had not come to the Court with clear hands. His father is an accused in a criminal case involving plagiarising books of the Council. The name of the petitioner transpired in the FIR of the criminal case. The business of the father and that of the petitioner are carried on from the same premises and the decision of the Council to disqualify the petitioner in the light of such suspicious circumstances in terms of clause (c) of NIT cannot be said to be unreasonable. It was emphasised that the Court should not substitute its opinion in place of the Council. On the other hand, such decision was overridden by an unlawful intervention by the State at the bidding of the petitioner who elbowed himself back into the negotiations for allotment. Such intervention in the tendering process by outsiders is untenable in law in view of law declared in 63 CWN 1. The writ petitioner cannot take advantage of his own wrong. Hence, the writ petition ought to have been dismissed with costs. 19. On the other hand, Mr. Mukherjee learned senior counsel appearing for the writ petitioner/respondent argued that the tendering process was a farce which was enacted for the benefit of the appellant at the behest of the President of the Council. Way back in 2009 the President sought to favour the appellant by altering curriculum in English B paper by incorporating a book named and styled "Gullivers Travel" published by the appellant in place and stead of another book. Such effort was successfully resisted. Way back in 2009 the President sought to favour the appellant by altering curriculum in English B paper by incorporating a book named and styled "Gullivers Travel" published by the appellant in place and stead of another book. Such effort was successfully resisted. However, in the next academic session 2010-2011 the said book was introduced in the curriculum and the appellant through its sister concern published a guide Book whose foreword was penned by none other than the President of the Council. Even prior to the initiation of the tendering process, the President had executed written agreements with the appellant for printing, publishing and distribution of three books of the Council for the years 2013, 2014 and 2015. Due to public outcry, such agreements were not given effect to and tender process was initiated. In the initial NIT, unamended clause (a) was incorporated to exclude all competitors apart from the appellant. The said tender condition was however watered down pursuant to another bout of public outcry. 20. On 16.05.2013 the writ petitioner was illegally disqualified although he had sufficient experience of successfully publishing books on behalf of the West Bengal Board of Madrasha Education and had not criminal case registered against him. The father of the petitioner carried on separate business and his implication in a criminal case cannot by any stretch of imagination be a ground to disqualify the petitioner. The tender conditions were illegally varied after the tendering process had commenced and in a blatant show of favouritism appellant was given seven out of eight titles although he was the 3rd highest bidder. Incidentally the aforesaid titles were similar to the titles in respect of which the President of the Council had sought to enter into agreements with the appellant even prior to the tendering process. The aforesaid chronology of events clearly expose the unholy nexus and blatant favouritism exhibited by the President of the Council in favour of the appellant which vitiated the entire tendering process. Even Secretary of the Council admitted that he had not present on 16.05.2013 when the points of consideration were drawn up and the aforesaid decision was taken. 21. Under such circumstances, in exercise of statutory powers the Government intervened in the matter and at the behest of observers the President was constrained to permit the petitioner to participate in the negotiations. 21. Under such circumstances, in exercise of statutory powers the Government intervened in the matter and at the behest of observers the President was constrained to permit the petitioner to participate in the negotiations. Notwithstanding such supervision, the President by the impugned work order dated 28.06.2013 awarded most of the titles in favour of the appellant and only a minor part of the work to the petitioner. Writ petitioner did not accept the said offer and instituted the first writ petition and when the grounds of disqualification were disclosed to the writ petitioner, the latter instituted the instant writ petition after withdrawing the first petition. The entire process of tender was illegal and the work order being a product of such vitiated and biased procedure was liable to be quashed. He even suggested that his client was willing to accept lower royalty and pass on the benefits to the students. Hence, the writ petitioner was entitled to the reliefs as prayed for and ought to have been compensated for loss of business by the illegal awarding of work order in favour of the appellant. 22. Mr. Gupta, learned senior counsel appearing for the respondent/Council denied and disputed any act of favouritism on its part. It was submitted that the Council had always followed procedure contemplated in law and presently decision has been taken not to award tender for the year 2015-2016 as there was sufficient books at the disposal of the Council to meet the existing demands and, if necessary, to print the said books on its own. 23. This has however been rebutted by Mr. Mukherjee on the ground that the decision of the Council was not in consonance with the provisions of the Act and had been motivatedly taken to circumvent the order of the Court and to favour the appellant who is presently the holder of copy right of the said books. 24. Ordinarily, the Court would not entertain a writ petition at the behest of an unsuccessful party who had knowingly participated in the tendering process but was dissatisfied with the quantum of allotment in its favour. 24. Ordinarily, the Court would not entertain a writ petition at the behest of an unsuccessful party who had knowingly participated in the tendering process but was dissatisfied with the quantum of allotment in its favour. However, the course of events in the instant case smack of an unusual procedure of dealing with state largess namely, bartering away the work between the participating bidders through open tender and negotiations instead of following the well establishment norms of fairness and transparency by resorting to fresh tender for allotment of work after alteration of tender conditions by the Council. 25. In the aforesaid factual backdrop, in order to test the locus standi of the writ petitioner to assail the tendering process, it is incumbent to examine the justifiability of the reasons for his initial disqualification from the said process. 26. If such initial disqualification was not in terms of the NIT, the reconsideration of such decision at the behest of Government cannot be faulted and would give the writ petitioner sufficient locus to assail the subsequent steps in the tendering process and the consequential work order. 27. On the other hand, if it appears that the Council was justified in disqualifying the writ petitioner and the Government at his behest reversed the decision and brought the latter back into the fray, then the writ petitioner may not be permitted in equity to assail the subsequent action of the Council. 28. The writ petitioner had been disqualified, inter alia, on the ground that he had no previous experience of publishing text books except some minor books for Madrasha Board. Clause (b) of the tender document is important in this respect. The said clause, inter alia, provides that the publisher must have a proven record of publishing text books on different subjects for other Boards like CBSE, ICSE and ISCE for the last three consecutive years. It has been strenuously argued that Madrasha Board for which the petitioner had admittedly printed and published books does not fall in the aforesaid category. 29. We are unable to accept such contention. It is undisputed that the syllabi and the course prescribed in the Madrasha Board are similar to that of the Council for whom the books were proposed to be printed and published. Admittedly, the petitioner has been successfully printing and publishing a large quantity of books for the Madrasha Board for more than eight years. It is undisputed that the syllabi and the course prescribed in the Madrasha Board are similar to that of the Council for whom the books were proposed to be printed and published. Admittedly, the petitioner has been successfully printing and publishing a large quantity of books for the Madrasha Board for more than eight years. One cannot also lose sight of the fact that the Boards cited in the said clause are merely illustrative and not exhaustive. Hence, the decision to exclude the petitioner on the premise that he had no previous experience of publishing text books except some minor books of Madrasha is perverse inasmuch as the Madrasha Board cannot by any stretch of imagination be construed to be a Board which did not fall within the illustrative sweep of clause (b) of the tender document. That apart, the writ petitioner had also printed and published a book named "Starlight" which is a part of the syllabus for ISC (Class XI & XII) for the year 2011. 30. The other ground for disqualification was the issue of credibility of the writ petitioner in financial and business dealings as it was alleged that he was mentioned in the FIR registered against his father for plagiarising books of the Council. It is however admitted that the writ petitioner was never cited as an accused in any criminal case. It is true that the father of the petitioner is an accused in a criminal case which is presently pending. In the said case, writ petitioner was not named as an accused in the FIR. There was a reference to him in the statement of a co-accused. However, in conclusion of investigation his name did not feature in the charge sheet submitted before the Court. Merely, because of the father of the petitioner is an accused in a pending criminal case, the credibility of the petitioner cannot be said to be tarnished and he cannot be visited with civil consequences on that score. No reasonable man of ordinary prudence would read clause (c) of NIT so as to impute bad character to the writ petitioner under such circumstances. 31. It is therefore evident that the initial disqualification of the writ petitioner, who was highest bidder, from the tendering process was unjustified and not in consonance with the terms of the NIT. 32. No reasonable man of ordinary prudence would read clause (c) of NIT so as to impute bad character to the writ petitioner under such circumstances. 31. It is therefore evident that the initial disqualification of the writ petitioner, who was highest bidder, from the tendering process was unjustified and not in consonance with the terms of the NIT. 32. It is also strange as to how the tendering committee could have changed the terms of the tender after offers had been received and stipulate that the rate of royalty would not be a determining criteria. Such rate is ordinarily of vital importance in any tendering process and if rate of royalty was not to be given priority it ought to have been reflected in the notice inviting tender itself. 33. It is trite law that rules of the game cannot be changed in the midst of the tendering process and in the instant case such charge of terms of tender as reflected in the points of consideration and the consequential decision taken thereon is liable to be quashed on this ground alone. In the event terms of tender were altered by the authority, it was incumbent on its part to proceed with a fresh tender and not award work order to existing bidders under such altered terms. At this juncture, it may be profitable to note the observations of the Apex Court in Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation & Ors., (2000) 5 SCC 287 . ".......The High Court had taken the view that if a term of the tender having been deleted after the players entered into the arena it is like changing the rules of the game after it had begun and, therefore, if the Government or the Municipal Corporation was free to alter the conditions fresh process of tender was the only alternative permissible. Therefore, we find that the course adopted by the High Court in the circumstances is justified because by reason of deletion of a particular condition a wider net will be permissible and a larger participation or more attractive bids could be offered." 34. The aforesaid principle applied with full force to the facts of the case and the only course possible for the Council was to go for fresh tender after altering the terms of the tender in its meeting on 16.05.2013. 35. The aforesaid principle applied with full force to the facts of the case and the only course possible for the Council was to go for fresh tender after altering the terms of the tender in its meeting on 16.05.2013. 35. It has also been argued vehemently that the purported points of consideration noted on 16.05.2013 is a manufactured document. Reliance has been placed on the note dated 28.05.2013 of the Secretary of the Council wherein he claimed he was not present at the meeting and had signed the document without enough scrutiny. It has also been argued that other contemporaneous documents do not reflect the points of consideration. 36. Examination the said documents drawn up on 16.05.2013 show the signature of the Secretary. He has, however, retracted from the same on 28.05.2013 claiming that he erroneously signed the said document without enough scrutiny. 37. On the basis of such rival versions it is difficult to come to a conclusive opinion as to the authenticity of the said minutes. However, even if the said minutes are construed to be genuine, the decision taken on 16.05.2013 by the tendering sub-committee to alter the terms of tender and hold the quantum of royalty offered by the bidder is irrelevant and to award seven out of eight titles of the bid to the appellant who was the 3rd highest tenderer is contrary to all conceivable parameters of fair procedure contemplated in the matter of tender of state largess. Further the grounds of disqualification of the writ petitioner as recorded in the said meeting were also not in consonance to the tender conditions. It is accordingly held that the decision of the tender sub-committee on 16.05.2013 was contrary to law in the facts of the case and was rightly reversed by the Government observers. 38. It has been argued on behalf of the appellant that tendering process ought not to have been interfered with by the State Government. Reliance has also been placed on 63 CWN 1. The State Government under section 35 of the Act is entitled to supervise the activities of the Council and even suspend the resolutions and/or decisions taken by it. It has been argued on behalf of the appellant that tendering process ought not to have been interfered with by the State Government. Reliance has also been placed on 63 CWN 1. The State Government under section 35 of the Act is entitled to supervise the activities of the Council and even suspend the resolutions and/or decisions taken by it. As it appears that the tendering process was carried on by the Council in the instant case in an unfair and illegal manner, as aforesaid, interference by the supervisory body, namely, the Government in the matter in exercise of statutory powers cannot be said to be arbitrary, whimsical or contrary to law. The cited case is distinguishable inasmuch as in the said case outsiders were present at the meeting of the RTA whereas in the instant case a decision of the tender sub-committee was rectified by its supervisory authority in exercise of statutory powers. 39. However, the recommendation of the Government observers to the extent it directed the tender sub-committee to proceed with the tender through negotiations with existing bidders was not in consonance with law. If terms of tender had been altered and royalty had been fixed at 26% of the sale proceeds, fresh tender under such altered terms ought to have been resorted to. 40. No doubt the writ petitioner also participated in the said process. However, in view of the perverse manner in which the entire process had been conducted and the repeated abortive attempts to award the selfsame titles in favour of the appellant even prior to the tendering process, persuades one to hold that the impugned work order issued in favour of the appellant by the President is a product of arbitrariness and favouritism and is liable to be quashed. Public law remedies are to ensure a fair, just and transparent procedure in the realm of awarding contracts in public law and the Courts ought not to shy away from quashing decisions which are patently vitiated with fraud, illegality or arbitrariness even at the behest of a participating bidder if the usufruct of such illegality or arbitrariness has not ensured to his benefit nor he has taken undue advantage of the same. 41. In view of the aforesaid discussion, decision of the learned Single Judge to quash the work order for the year 2015-2016 cannot be faulted. 41. In view of the aforesaid discussion, decision of the learned Single Judge to quash the work order for the year 2015-2016 cannot be faulted. However, in the light of the fact that the Council ought to have resorted to fresh tender after alteration of tender conditions instead of resorting to illegal negotiations it cannot be concluded with certainty that the writ petitioner was entitled to the allotment of the work as a matter of right in the instant case and accordingly he is not entitled to compensation in the public law domain in exercise of discretionary jurisdiction of this Court. Subhash Projects & Marketing Ltd. v. W.B. Power Development Corporation Ltd., (2005) 8 SCC 438 relied on by the petitioner is clearly distinguishable in view of the aforesaid facts and circumstances of the case. 42. With regard to the decision of the Council not to hold fresh tender for 2015-2016 records have been placed before the Court on behalf of the Council. It appears from the said records that in its meeting held on 18.02.2015 the Council initially not taken any decision regarding allotment of work due to pendency of the instant appeal before this Court. However, in a subsequent letter written by the President of the Council to its advocate it is recorded that in view of a large stock of unused books there is no need to go for fresh tender and if such need arose in future the Council proposed to get the books printed by a Government Press with due approval of the Court. 43. It has been argued that the aforesaid decisions are not of the Council inasmuch as the aforesaid decisions were not taken in a meeting of the Council having requisite quorum. 44. No one has disputed the authenticity of the records of the proceedings of the Council or the letter written by its President communicating the view of the academic committee of the Council in the matter. No dissenting opinion of any member of the Council to such view has been placed before the Court. Accordingly, it can safely be concluded that the aforesaid decision is in effect of the Council itself and no further interference is called for in the matter. No dissenting opinion of any member of the Council to such view has been placed before the Court. Accordingly, it can safely be concluded that the aforesaid decision is in effect of the Council itself and no further interference is called for in the matter. It is however directed if the Council desires to print and/or publish any of the books which are subject matter of the tender for the year 2015-2016 through an outside agency it must do so by holding a fresh tender. 45. With the aforesaid observations, the order passed by the learned Single Judge is affirmed and both the appeals are dismissed. There shall be no order as to costs. Appeals dismissed. Manjula Chellur, CJ.- I agree.