BIODIGITAL P LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) Appeal is filed against judgment of the learned Single Judge declining to interfere with the award of contract for supply of machinery by the Government of Kerala to third Respondent which is a Central Government undertaking in preference to the Appellant. We have heard Counsel appearing for the Appellant and Standing Counsel appearing for the third Respondent.

(2.) The second Respondent herein which is the Director of the Animal Husbandry Department of the State Government, invited tenders for purchase and installation of Freeze Dryer for the financial year 2009-2010. Three tenders were received and out of which, one tender was rejected. The remaining two were submitted by the Appellant as well as the third Respondent. When tenders were opened, Appellant's was the lower of the two bids. However, the second Respondent decided to negotiate with the Appellant for reduction of price and Appellant vide Ext. P-7 still lowered the price to Rs. 2,32,00,000. The third Respondent which is a Central Government Company reduced the price by a further sum of Rs. 5.6 lakhs. Second Respondent referred the matter for decision by the Government and the Government vide Ext. P-9 accepted the tender of the third Respondent which was lower from Appellant's by Rs. 5.6 lakhs. It is against the award of this contract to third Respondent the Appellant filed Writ Petition contending that the Appellant was unaware of the negotiation that was going on between the second Respondent and the third Respondent and if one more opportunity was given, Appellant would have reduced the price further. So much so, the award of contract is arbitrary and in violation of Article 14 of the Constitution of India, is the case of the Appellant. The learned Single Judge after considering the Appellant's claim and various decisions relied on by him held that the award of contract to third Respondent by the Government is neither arbitrary nor in violation of Article 14 of the Constitution or in other words, it is a fair deal warranting no interference by the court. It is against this judgment appeal is filed by the Appellant raising the very same contentions and by relying on the very same decisions that were raised before the learned Single Judge.

(3.) Counsel for the Appellant submitted that when the tenders were opened, the lowest of the bids was that of the Appellant's and in the normal course Appellant should have been awarded the contract. He submitted that when further opportunity was granted to reduce the price, it should have been granted in such a way that both Appellant and third Respondent got an opportunity to go on reducing the price to the lowest possible. The further contention raised by the Appellant is that there is nothing in the tender condition to indicate that the third Respondent being a Central Government Company is entitled to any preference or priority or weightage. In principle we agree with the contention of the Appellant's Counsel that if price is to be negotiated from the quoted price, equal opportunity should have been given to both the parties and probably a bargaining would have been better achieved by calling both Appellant and the third Respondent together and asking them to go on reducing the price on competitive basis so that the lower of the two could have been accepted. However, in this case what is clear is that second Respondent requested both Appellant as well as the third Respondent to reduce the price and without any contest both of them gave the minimum amount for which they could execute the work. The Appellant's happened to be Rs. 5.6 lakhs above the offer made by the third Respondent and consequently contract was awarded to third Respondent. Counsel for the third Respondent submitted that Appellant's allegation of denial of equal opportunity is incorrect inas much as Appellant vide Ext.P-7 gave revised quotation, with reference to which the revised quotation given by the third Respondent was considered and the price bid by third Respondent was admittedly lower than the Appellant by Rs. 5.6 lakhs, which led the Government to award the contract in favour of third Respondent.