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2021 DIGILAW 1629 (PNJ)

Hardial Singh v. Food Corporation of India

2021-08-24

AJAY TEWARI, ALKA SARIN

body2021
Judgment Mrs. Alka Sarin, J. Heard through video conferencing. 2. The present Civil Writ Petition under Articles 226/227 of the Constitution of India was originally filed by the petitioner for issuance of a writ in the nature of certiorari or any other appropriate writ, direction or order for quashing and setting aside the impugned letter/order dated 18.03.2019; impugned technical bid opening summary; impugned technical evaluation for tender dated 18.04.2019; and communication, whereby the technical bid of the petitioner was rejected on the ground of cartelization. 3. The brief facts relevant to the present lis are that in 2019 the respondent-FCI issued a notice inviting tender for appointment of loading/unloading/handling and transport contractor at the Food Corporation Depot/Godowns/Rail Heads etc., for a period of two years. The tender bid was to be submitted in two parts: Part-A being technical bid and Part-B being price bid. The petitioner, in his individual capacity, participated in the tender process and on 12.01.2019 submitted his bids for Fatehabad to R.H. Bhattu and Dhand to R.H. Bhattu. One M/s Choudhary & Company also participated in the tender process. The petitioner herein is stated to be a partner in the said firm M/s Choudhary & Company. The respondent-FCI vide letter dated 18.03.2019 (Annexure P-5) informed the petitioner that “On perusal of the technical documents it is found that one of partner in M/s Chaudhary & Co. i.e. Sh. Hardial Singh as in individual capacity and M/s Choudhary & Co. both participated. This is the case of cartelization. As per the MTF clause 12 i.e. in case of any clear indication of cartelization, the Corporation shall rejected the tender(s) and forfeit the EMD”. It was further stated in the said letter Annexure P-5 that the Competent Authority i.e. General Manager (R) would give the petitioner a personal hearing on 22.03.2019 as to why action should not be taken as per the Model Tender Form (MTF). The letter (Annexure P-5) was also addressed to M/s Chaudhary & Co. The petitioner vide his reply of 22.03.2019 denied that there was any cartelization. 4. The letter (Annexure P-5) was also addressed to M/s Chaudhary & Co. The petitioner vide his reply of 22.03.2019 denied that there was any cartelization. 4. The petitioner received the ‘Technical Bid Opening Summary’ (Annexure P-6) for the tender title HTC Fatehabad wherein it was stated that his bid for the above-mentioned tender was technically rejected in view of Clause 12 of the MTF it being a case of cartelization since the petitioner participated in his individual capacity but he is also a partner of M/s Chaudhary & Co. in the same tender. As per the petitioner a communication from the respondent-FCI revealed that the bid of one Mr. Natish Bhatia had been accepted for the tender title HTC Fatehabad. 5. On 24.04.2019 the petitioner filed the present writ petition making the following prayer : “Issue a writ in the nature of Certiorari or any other appropriate writ, order or direction for quashing and setting aside of the impugned letter/order dated 18.03.2019 (Annexure P-5); impugned technical bid opening summary (Annexure P-6); the impugned technical evaluation for tender dated 18.04.2019 (Annexure P-7) and communication (Annexure P-8) wherein the technical bid of the petitioner was rejected on the wrong and erroneous pretext of cartelization.” 6. On 30.04.2019, while issuing notice of motion, this Court directed that the settlement of the tender, if any, made shall be subject to the result of the writ petition. 7. In June 2020 the petitioner filed an application being CM No.5034-CWP of 2020 in the present writ petition seeking a direction to allow him to participate in the tender enquiry issued/published by the Haryana State Warehousing Corporation, Fatehabad on 30.05.2020 wherein the last date for bid preparation and submission was 07.06.2020. Vide order dated 05.06.2020 the petitioner was permitted to participate in the tender enquiry issued/published by the Haryana State Warehousing Corporation, Fatehabad dated 30.05.2020 only for the time being. However, it was made clear that the permission granted by this Court was provisional and would be subject to the final decision of the writ petition. 8. Thereafter the petitioner filed another application being CM No.3230-CWP of 2020 under Order 6 Rule 17 of the Code of Civil Procedure, 1908 for amendment of the writ petition. However, it was made clear that the permission granted by this Court was provisional and would be subject to the final decision of the writ petition. 8. Thereafter the petitioner filed another application being CM No.3230-CWP of 2020 under Order 6 Rule 17 of the Code of Civil Procedure, 1908 for amendment of the writ petition. It was averred in the said application that vide order/communication dated 02.04.2019 the petitioner was debarred from participating in any tender enquiry with the respondent-FCI for a period of five years and the earnest money deposited by him was forfeited. This order/communication dated 02.04.2019 is stated to have been received by the petitioner after the filing of the present writ petition. As per the petitioner, vide an email dated 18.04.2019 (Annexure P-8) the petitioner learnt that his bid for the tender had been rejected during technical evaluation for the reason ‘Technically Rejected’. Vide order dated 07.10.2020 the amendment was allowed and the amended writ petition was taken on record. The prayer in the amended writ petition reads inter-alia as under : “Issue a writ in the nature of Certiorari or any other writ, order or direction for quashing and setting aside of the impugned letter/order dated 18.03.2019 (Annexure P-5); impugned technical bid opening summary (Annexure P-6); the impugned order/communication of debarment dated 02.04.2019 (Annexure P-7); the impugned technical evaluation for tender dated 18.04.2019 (Annexure P-8) and communication (Annexure P-9) wherein the technical bid of the petitioner was rejected on the wrong and erroneous pretext of cartelization and the petitioner was debarred from participating in any tender enquiry with the respondent for a period of 5 years”. 9. Learned counsel for the petitioner has contended that the rejection of his bid by the respondent-FCI on the alleged ground of cartelization was illegal and erroneous. According to learned counsel there was no question of cartelization in the present case inasmuch as the petitioner was a dormant partner in the firm M/s Choudhary & Company and played no role in the day-to-day affairs of the firm. According to learned counsel there was no question of cartelization in the present case inasmuch as the petitioner was a dormant partner in the firm M/s Choudhary & Company and played no role in the day-to-day affairs of the firm. He further contended that as per Section 2(c) of the Competition Act, 2002 a cartel is defined as an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services and that in the present case the respondent-FCI could not have held that it was a case of cartelization as the ingredients of cartelization were not made out. To buttress his arguments, learned counsel for the petitioner has relied upon the judgment delivered by a Division Bench of this Court in “M/s Subash Chander V/s Food Corporation of India and others” [CWP No.6617 of 2013 decided on 31.07.2013]. 10. The respondent-FCI filed a written statement dated 23.05.2019 to the original writ petition. However, no written statement has been filed to the amended writ petition though opportunity was granted. Mr. Sumeet Goel, learned senior counsel assisted by Mr. Manav Bajaj, Advocate appearing on behalf of the respondent-FCI has contended that the present case is a clear case of cartelization inasmuch as the petitioner is a partner of M/s Choudhary & Company and both the petitioner and M/s Choudhary & Company had given separate bids for the same tender which amounted to cartelization under Section 2(c) of the Competition Act, 2002. He further submitted that the same amounted to abuse of the dominant position by getting together to control the price bids. It was further argued that the arrangement between the petitioner and M/s Chaudhary & Co. was to weed out competition and ensure that there wasn’t a level playing field for all the bidders. 11. We have heard learned counsel for the parties. 12. The issue in hand is whether the bids given by the petitioner and by M/s Choudhary & Company, in which the petitioner is a partner, for the same tender process, would amount to cartelization. In Subhash Chander’s case (supra) there were three bidders of which two firms had the same partner. The bid of one of the firms having the common partner was accepted. In Subhash Chander’s case (supra) there were three bidders of which two firms had the same partner. The bid of one of the firms having the common partner was accepted. The unsuccessful bidder challenged the award of the said contract contending inter-alia that the submission of two bids by two firms having a common partner amounted to cartelization and was prohibited by Clause 12 of the terms of the tender. The respondent-FCI, who was also the respondent in Subhash Chander’s case (supra), defended the award of contract. The Division Bench rejected the plea of cartelization by holding as under : “16. Insofar as the first allegation of cartelization is concerned, we really find no merit in it. The petitioner, in the petition, has gone into an elaborate discussion on the ills of cartelization as discussed in judicial pronouncements without reference to the facts in issue. The whole principle behind cartelization is an endeavour to form collusive association, to monopolise production, distribution, prices, etc. It is no doubt true that in the present case two bids have been given by two separate partnership firms having one common partner, but that itself would not ipso facto amount to cartelization or killing competition. Nothing prevented other participant contractors from making the bid and, in fact, the petitioner made his bid. Further, qua the induction of respondent No.7 as a partner, that was done in one firm on account of demise of the partner. Both the firms are registered with the Registrar of Firms. Proper material has to be placed on record to establish cartelization and not merely such an allegation. Thus, we out-rightly reject the submission of the petitioner based on cartelization.” 13. The reasoning given by this Court in Subash Chander’s case  (supra) would apply on all fours in the present case. It has been held in the said decision that the mere fact that two bids were given by two separate partnership firms having one common partner would not ipso facto amount to cartelization or killing competition. Further, there is no material on record which has been brought forth by the respondent-FCI to show as to how the present case was a case of cartelization. Further, there is no material on record which has been brought forth by the respondent-FCI to show as to how the present case was a case of cartelization. Though the learned senior counsel for the respondent-FCI has vehemently contended that the present was a case of cartelization but he is not in a position to distinguish the judgment delivered in Subhash Chander’s case (supra) wherein this very respondent-FCI was a party. No decision taking a contrary view has been referred to by learned senior counsel appearing for the respondent-FCI. 14. It is well settled that the authority that authors the tender document is the best person to understand and appreciate its requirements and, thus, its interpretation should not be second-guessed by a court in judicial review proceedings. However, in the present case there is perversity in the understanding or appreciation and in the application of the terms of the tender conditions especially Clause 12 of the MTF. The same Clause 12 regarding cartelization has been subject matter of an earlier case in the matter of Subhash Chander (supra) wherein the respondent-FCI was also a party. This Court has already held that merely because two bids were given by two partnership firms having a common partner would not amount to cartelization. That decision has attained finality and the interpretation given by this Court has been accepted by the respondent-FCI. 15. In view of the above, we have no hesitation to hold that the submission of two separate bids - by the petitioner and M/s Chaudhary & Co. - did not amount to cartelization even though the petitioner was a partner in M/s Chaudhary & Co. The rejection of the petitioner’s bid on the ground of cartelization by the respondent-FCI was bad in law and contrary to the decision in Subhash Chander’s case (supra). The impugned order/communication dated 02.04.2019 (Annexure P-7) debarring the petitioner from participating in any tender enquiry with the respondent-FCI for a period of five years and forfeiting his earnest money is also, as a necessary corollary, unsustainable. 16. This Court cannot be oblivious to the fact that the initial tender in 2019 was for a period of two years which would have by now expired. As such, we do not deem it appropriate to interfere with the award of contract under the said tender. 16. This Court cannot be oblivious to the fact that the initial tender in 2019 was for a period of two years which would have by now expired. As such, we do not deem it appropriate to interfere with the award of contract under the said tender. Moreover, the successful bidder is not a party in this writ petition and the award of the contract in his favour is not subject to challenge. 17. Hence, the present writ petition is partly allowed and the impugned order/communication dated 02.04.2019 (Annexure P-7) debarring the petitioner from participating in any tender enquiry with the respondent- FCI for a period of five years and forfeiting his earnest money is quashed qua the petitioner alone. All pending applications also stand disposed off.