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2017 DIGILAW 833 (GAU)

Buddhadev Muchahary v. Commissioner and Secretary, BTC

2017-06-22

SUMAN SHYAM

body2017
JUDGMENT AND ORDER : Suman Shyam, J. 1. Heard Mr. S.B. Rehman, learned counsel for the petitioner. Also heard Mr. N. Dutta, learned Sr. counsel appearing on behalf of respondent Nos. 6. Mr. A.K. Bhuyan, learned standing counsel, BTC appears on behalf of respondent Nos. 1 to 5. 2. The settlement made in favour of respondent No. 6 granting the mining contract of "Champa Sand-Gravel River Mahal No. 4" for a period of 07 years is under challenge in the present writ petition. 3. The facts of the case, briefly stated, are that on 07-01-2015, the respondent No. 5 had issued a sale notice inviting bids, inter-alia, for granting mining contract in respect of Champa Sand-Gravel River Mahal No. 4 under Basugaon range for a period of 07 years. As per the said NIT, the last date of submission of tender was upto 03:00 p.m. on 27-01-2015. The total reserve price for the "Mahal" had been fixed as Rs. 74,95,000/- for 07 (seven) years. 4. In response to the NIT dated 07-01-2015, as many as three bidders including the writ petitioner and the respondent No. 6, had submitted their tenders for the Champa Sand-Gravel River Mahal No. 4. On opening the bids, it was found that the tenders submitted by all the three bidders were technically responsive. The offer made by the petitioner at Rs. 1,71,00,000/- (Rupees One Crore Seventy one lakhs) had emerged as highest bid whereas the offer of Sri Pajit Kumar Brahma at Rs. 1,16,97,551/- (Rupees One Crore Sixteen Lakhs Ninty Seven Lakhs Five Hundrerd and Fity One) had emerged as the second highest bid. The respondent No 6 had quoted a price of Rs. 79,99,901/- (Rupees Seventy Nine Lakhs Ninty Nine Thousand Nine Hundred and One) which was the lowest offer. 5. A comparative statement in respect of the three bidding was prepared and thereafter, by letter dated 20-05-2015, the respondent No. 5 had made a recommendation in favour of respondent No. 6 for awarding the mining contract in respect of Champa Sand-Gravel River Mahal No. 4. Eventually, by the order dated 26-06-2015 issued by the Addl. PCCF-cum-CHD, Forests, BTC, Kokrajhar, the decision to award the mining contract in favour of the respondent No. 6 at his quoted price of Rs. 79,99,901/- was communicated. 6. Eventually, by the order dated 26-06-2015 issued by the Addl. PCCF-cum-CHD, Forests, BTC, Kokrajhar, the decision to award the mining contract in favour of the respondent No. 6 at his quoted price of Rs. 79,99,901/- was communicated. 6. The official respondents have filed counter affidavit sworn by the Secretary, BTC, inter alia, stating that the rate quoted by the petitioner was found to be abnormally high and therefore, his tender was rejected. 7. The respondent No. 6 has also filed counter affidavit stating that the offer made by the petitioner was exorbitant. On the contrary, the price quoted by the respondent no 6 being close to the reserve price, the same was found to be reasonable and accordingly, it was accepted by the authorities. A prayer has, therefore, been made for dismissal of the writ petition. 8. Mr. Rehman, learned counsel for the petitioner submits that the law is well settled that in a Govt. tender when the bids are found to be technically valid, highest price should be accepted since such a decision would not only be in public interest but would also serve the best interest of the government revenue. Mr. Rehman further submits that the ground for rejection of the petitioner's tender, as mentioned in the counter affidavit, is not at all tenable in the eye of law. 9. By referring to a decision of this Court in the case of Intaz Ali v. State of Assam and Ors. reported in 2000 (1) GLT 573, Mr. Rehman submits that since the purpose of inviting the bids was to secure the highest price, the decision to reject the bid of the petitioner merely on the ground that the rate was abnormally high was arbitrary, unfair, unreasonable and hence, liable to be set aside by this Court. 10. Referring to another decision of this Court rendered in the case of Sri Manik Konwar v. State of Assam and Ors. reported in 2012 (1) GLD 203, Mr. Rehman submits that although the Govt. has the right not to accept the highest bid but there should be good and sufficient reason for invoking the aforesaid discretionary power. In the present case, the ground cited for rejection of the petitioner's tender is only imaginary and therefore, does not merit acceptance by this Court. 11. Rehman submits that although the Govt. has the right not to accept the highest bid but there should be good and sufficient reason for invoking the aforesaid discretionary power. In the present case, the ground cited for rejection of the petitioner's tender is only imaginary and therefore, does not merit acceptance by this Court. 11. By referring to another decision of the Division Bench of this Court rendered in the case of Educomp Solutions Ltd. and Ors. v. State of Assam and Ors. reported in 2006 (2) GLT 775, Mr. Rehman submits that a bid evaluation criteria not notified before opening the bids cannot be used for rejection of a technically valid tender. According to Mr Rehman, the respondents did not mention that bids quoting abnormally high price would be rejected but they have applied such a criteria to reject the petitioner's bid. As such submits Mr. Rehman, the petitioner's case is squarely covered be the law laid down in the case of Educomp Solutions Ltd. (supra). 12. By inviting the attention of this Court to Rule 33(2) of the Assam Minor Mineral Concession Rule of 2013 (in short the Rules of 2013), the learned counsel for the petitioner has further submitted that the State is required to bear in mind the revenue that will be involved while fixing the reserve price and therefore, the State respondents could not have ignored the higher price quoted by the petitioner, acceptance of which was in best interest of the government revenue. 13. Mr. N. Dutta, learned Sr. counsel appearing on behalf of respondent No. 6 has questioned the maintainability of the writ petition on the ground of availability of alternative remedy by contending that the order of the authorities under challenge is appealable under the statute. In support of his aforesaid argument Mr. Dutta has referred to a decision of the Supreme Court in the case of Commissioner of Income Tax and Ors. v. Chhabil Dass Agarwal, reported in (2014) 1 SCC 603 . 14. On the merit of the writ petition, Mr. Dutta submits that the quantity that can be extracted by the contractor is specified in the NIT and therefore, if a tenderer is allowed to obtain the settlement at an exorbitantly high price, the same would lead to increase in the price of the extracted materials in the market, thereby adversely affecting the interest of the general public. Dutta submits that the quantity that can be extracted by the contractor is specified in the NIT and therefore, if a tenderer is allowed to obtain the settlement at an exorbitantly high price, the same would lead to increase in the price of the extracted materials in the market, thereby adversely affecting the interest of the general public. In support of his aforesaid argument Mr. Dutta has also referred to Rule 33(2) of the Rules of 2013 to contend that while entering into a mining contract, the priority of the State should be to ensure availability of construction materials at economic rates while ensuring sustainable development and intergenerational equities. 15. Mr. A.K. Bhuyan, learned standing counsel, BTC has reiterated the stand taken in the affidavit filed by the official respondents and has also produced the record to justify the decision of the authorities. 16. I have considered the submission made by the learned counsel for the parties and have also perused the materials available on record. 17. At the very outset, let me deal with the objection raised by the respondent no 6 regarding the maintainability of the writ petition. It is not in dispute that there is a provision for preferring an appeal before the departmental authorities against the order of settlement. But in this case, the departmental authorities have already taken a conscious decision to award the mining contract in favour of the respondent no 6. In their affidavit also, the department has taken a firm stand in the matter justifying the decision to award the contract in favour of the respondent no 6. Under the circumstances, I am of the view that the appellate remedy, though available in the statute book, would not be an efficacious alternative remedy for the petitioner in the facts and circumstances of the present case. The alternative remedy available to petitioner must be efficacious in order operate as a ground touching upon the maintainability of the writ petition. For the reasons mentioned above and in the absence of any pleaded impeachment of the writ petition on the ground of maintainability, I am not inclined to non-suit the petitioner merely on the ground of availability of alternative remedy. 18. As noted above, the learned counsel for both the parties have referred to and relied upon the Rule 33 (2) of the Rules of 2013 to drive home their respective points. 18. As noted above, the learned counsel for both the parties have referred to and relied upon the Rule 33 (2) of the Rules of 2013 to drive home their respective points. Therefore, a reference to rule 33 is deemed necessary. For the purpose of ready reference, Rule 33 of the Rules of 2013 is quoted herein below:- "33. Determination of reserve price for inviting bids/auction : (1) The competent authority shall upfront determine the reserve price in each case where the mineral concessions are granted through competitive bidding/open auction, as the case may be. (2) State's priorities with regard to the observance of principles of sustainable development, inter-generational equities and conservation of minerals, scientific mining, availability of construction material at economic rates for developmental works and the State Revenues shall remain the over-arching principles in fixing the reserve prices. (3) The reserve price may be fixed keeping in view the past trends, availability of mineral reserves in the area, the potential, access and proximity to the markets. However, any aberrations in the auctions held earlier and the bids received of exceptionally lower or higher amount, due to whatsoever reasons, may be ignored. (4) In case of no bid/offer is received against a reserved price fixed for an area on two successive occasions, the competent authority may revise the reserve price downwards at appropriate level." 19. A reading of Rule 33 with all the sub-rules goes to show that the authorities are required to determine the reserve price of the bid for achieving certain purposes mentioned there-in. Rule 33(2) inter-alia provides that while fixing the reserve price, the respondent authorities are required to bear in mind the effect of the reserve price on the cost of the construction materials. Rule 33(3) of the Rules confers a discretionary power upon the tendering authority to ignore bids which are found to have offered exceptionally high or low amount. 20. From the record produced by the departmental counsel, it is seen that after preparation of a comparative statement, the respondent No. 5 has issued a communication dated 28-04-2015 addressed to the Joint Secretary, Forest Department, BTC, Kokrajhar submitting a feasibility report. The contents of the said letter would have a relevant bearing in the outcome of this writ petition and is, therefore, extracted herein below:- "Govt. Of Assam Office Of The Addl. The contents of the said letter would have a relevant bearing in the outcome of this writ petition and is, therefore, extracted herein below:- "Govt. Of Assam Office Of The Addl. Principal Chief Conservator Of Forests Cum Chd, Forests Bodoland Territorial Council, Kokrajhar No. FGW.24/Genl./Chirang/MMC/2015-22 Dated Kokrajhar, the 28/04/2015 To The Joint Secretary Forest Department Bodoland Territorial Council Kokrajhar Sub: Feasibility Report. Ref: Your letter No. BTC/Forest-47/2010/Pt-/V/6 Dated the Korajhar, the 27th April, 2015 Sir, With reference to the subject cited above, I have the honour to state that the rates quoted in tender papers by three bidders found no uniformity. Sri Buddhadev Muchahary has quoted hid bid value at Rs. 171.00 Lakhs, Sri Pajit Kr. Brahma has quoted at Rs. 116.97551 Lakh and Sri Anil Kr. Basumatary has quoted at Rs. 79.99901 Lakh over the Govt. estimated value of Rs. 74.95 Lakh. Hence, the value quoted by them are respectively 128%, 56% and 6.7% more of the estimated value of Rs. 74.95/- Lakh. The total amount of materials which includes sand and gravel stipulated at the site is 56,000 m3. Out of the aforesaid materials, about 35,000 m3 is stipulated for sand and 21,000 m3 is for gravel. The estimated value of the available materials at the site for which the tender is called for is Rs. 74,95,000.00/- for a period of 7 (seven) years. Hence, the estimated value for per cubic meter comes to Rs. 133.84./- The market value per cubic meter would be about approximately Rs. 160.00./- The total market value of the available materials of which tender is called for is Rs. 84,60,000.00/- and as such the rate offered by the first highest bidder is absurd and abnormal and the second bidder is too high which, if are considered, will give rise to malpractice and would be against public interest. This may lead to public complaints as the site is located at a place bounded by villages. (A Swargowari, IFS) Addl. Principal Chief Conservator and CHD, Forest Bodoland Territorial Council, Kokrajhar" 21. The feasibility report submitted by the respondent no 5 had been accepted by the departmental authorities which has ultimately led to the decision to award the contract in favour of the respondent no 6. (A Swargowari, IFS) Addl. Principal Chief Conservator and CHD, Forest Bodoland Territorial Council, Kokrajhar" 21. The feasibility report submitted by the respondent no 5 had been accepted by the departmental authorities which has ultimately led to the decision to award the contract in favour of the respondent no 6. From the materials available on record, I find that the settling authority had serious reservation on the high price quoted by the petitioner on the ground that same would have a cascading affect on the cost of the materials. The price quoted by the petitioner has been found to be " abnormally high", the same being 128% above the reserve price fixed by the Government. 22. The ground on which the bid of the petitioner had been rejected was clearly spelt out by the authorities. The respondents have taken a categorical stand to the effect that the acceptance of the petitioner's bid would be adverse to public interest since there would be an artificial increase of the price of the materials if the contract is settled at such high price. It was, therefore, incumbent upon the petitioner to show before this court that the assessment made by the respondent no 5 was totally arbitrary and baseless. But from the pleadings available on record I find that the petitioner has failed to refute the said allegation by bringing proper materials on record. 23. Mining activities carried out at the different "Mahals" are the primary source of obtaining construction materials which is absolutely essential for many developmental activities. Therefore, even while settling the "Mahals" through a tender process, some control of the government over such mining activities is necessary so as to ensure the availability of the construction material in sufficient quantity and at a reasonable price. As such, fixation of a proper and correct reserve price would be an essential component of the tender process. From the scheme of Rule 33 it is apparent that reserve price fixed by the department would have a bearing in determining the validity of the offers that are either exceptionally high or low. A simple reading of Rule 33 of the Rules of 2013 leaves no manner of doubt that the departmental authorities have been entrusted with a larger social responsibility not only to ensure that the construction materials are available at an economic cost but also to protect the bio-diversity as well inter-generational equities. A simple reading of Rule 33 of the Rules of 2013 leaves no manner of doubt that the departmental authorities have been entrusted with a larger social responsibility not only to ensure that the construction materials are available at an economic cost but also to protect the bio-diversity as well inter-generational equities. It is evident from Rule 33 that the reserve price fixed by the department would have a relevant bearing in determining the acceptable price offer made by the bidders. It cannot therefore, be said that like every other commercial tender, the government would, as a matter of rule, be bound by the highest bid since such an interpretation would frustrate the very purpose of Rule 33. What would be an "abnormally high price" or "abnormally low price" in a given case would depend on the facts and circumstances of each case. But the decision to reject the highest bid must be an exception rather than the rule and can be resorted to only when such decision is found to be guided by supervening public interest. 24. In the case in hand, clauses 9 and 10 of the NIT dated 07-01-2015 makes it amply clear that the successful bidder would be allowed to extract only the quantity mentioned in the tender document and beyond that, no extraction would be permissible. As per Schedule-A appended to the NIT, the total quantity of the sand in Champa Sand-Gravel River Mahal No. 4 is 35000 m3 whereas the quantity of gravel is 21000 m3. It is, therefore, apparent that regardless of the price offered by the bidder, the quantity that can be extracted under the mining contract will remain fixed. As such, it is obvious that the contractor would have to recoup his investments by extracting the notified quantity of mining materials alone. 25. The stand of the department, reduced to its essence, is that if the total quantity available under the contract is divided by the amount of Rs. 1,71,00,000/-i.e. the price quoted by the petitioner, then the same would lead to artificial hike in the price of construction material which in turn would hamper public interest. By applying simple arithmetic it appears that the price quoted by the petitioner would lead to hike in the price of the construction material. 1,71,00,000/-i.e. the price quoted by the petitioner, then the same would lead to artificial hike in the price of construction material which in turn would hamper public interest. By applying simple arithmetic it appears that the price quoted by the petitioner would lead to hike in the price of the construction material. Having regard to the mandate of Rule 33 of the Rules of 2013, the question raised by the respondent authorities as regards the high price quoted by him appears to be valid. But the petitioner has not been able to provide any satisfactory explanation to the objection raised by the department. From the materials available on record, I also do not find any good ground to reject the above stand of the departmental authority. It rather appears to this court that the price quoted by the writ petitioner is wholly un-realistic in the facts and circumstances of the case and the same can be termed as predatory price offer made by the petitioner with the sole objective of bagging the contract at any cost. 26. In the above context, it is also to be noted here-in that as per Rule 18(2) of the Rules of 2013, in case of a mining contract, the annual contract money determined at the time of initial grant is required to be increased at the rate of twenty five percent on completion of each block of three years. If the formula envisaged under Rule 18 (2) is applied to the price offered by the writ petitioner, then his price would become even more unrealistic in the facts and circumstances of the case. The present market price of the sand and gravel are known quantities. But as noted above, the petitioner has not been able to convince this court as to how he could recoup his investment without triggering artificial price hike of the construction materials. Such being the position, I am of the unhesitant opinion that there was good and compelling reason for the respondents to reject the highest bid offered by the petitioner in as much as the said decision appears to have been taken in the interest of the general public . 27. Although Mr. Such being the position, I am of the unhesitant opinion that there was good and compelling reason for the respondents to reject the highest bid offered by the petitioner in as much as the said decision appears to have been taken in the interest of the general public . 27. Although Mr. Rehman has vehemently argued that in the present case, the authorities did not mention in the NIT about the fact that abnormally high price could be rejected, I am unable to agree with the said submission of the learned counsel for the following reasons. Clause-13(g) of the NIT had clearly mentioned that the provision of Assam Minor Mineral Concession Rules, 2013 will be strictly followed. That apart, under Clause- 14 of the NIT the settling authority would have the right to accept or reject any tender. Rule 33(3) of the Rules specifically empowers the tendering authority to reject price bids which are exceptionally high or low. Therefore, the petitioner cannot be permitted to take a stand that he was not aware of such pricing policy of the department. In such view of the matter, the decisions in the case of Educomp Solutions Ltd. (Supra) relied upon by the learned counsel for the petitioner would not be of any assistance to the petitioner. Likewise the decision of this court in the case of Manik Konwar (Supra) would also not be of any help to the petitioner. Rather, in the facts of this case, the said decision would go against the petitioner. 28. Since the second highest bidder has not assailed the decision of the departmental authorities, it would not be necessary for this court to adjudicate as to whether the same parameters would apply in the case of the second highest bidder as well. For the reasons stated hereinabove, I am of the view that this writ petition is devoid of any merit and the same is accordingly dismissed. Records be returned back forthwith. Parties to bear their own cost.