ASIAN TECHS LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) APPELLANT is the petitioner in the Original Petition. Being unsuccessful in getting the contract work of "tourism Department Construction of new block to the Guest House, Ernakulam", the Writ Petition was filed. According to the petitioner, the lowest tender was one quoted by it. However, without considering that, the work was awarded to the 4th respondent.

(2.) AFTER elaborately dealing with the factual as well as the legal position, the learned Single Judge found that the technical offer in the second cover submitted by the petitioner contained a stipulation that the lump sum quoted for the work was subject to the terms and conditions stipulated by the petitioner. One such condition reads as follows: " Our rate is inclusive of test loading of one working pile of 1 mtr. dia only for a load of 1 1/2 times the design as specified in the tender. In case any initial test is to be done (testing to destruction) we have to be paid extra rate of Rs. 7 lakhs for one number of one metre dia pile". The learned Single Judge further found that with regard to the rates quoted by the petitioner also there was a condition that in case of any increase in tax or duty imposed by the Central or State Government, the same should be reimbursed. There was also a further condition demanding monthly payment for all the works executed on pro rata basis. Thus it has found that the financial offer contained in the third cover was subject to conditions, some of which are mentioned above, as contained in the second cover. True, the petitioner's was the lowest financial offer. However, since the same was a conditional offer, the Department was fully justified, according to the learned Single Judge, in rejecting the offer. There was another contention raised by the petitioner that since the Department decided to open their cover, i. e. , the cover containing the financial offer, it should be taken that the Department was satisfied with the offer made in the second cover. It was also submitted that having given an undertaking, if at all there was any defect or shortcoming in the offer made by the petitioner, it should be treated to have been cured. However, the learned Single Judge was not prepared to accept any of the contentions of the petitioner and was clearly of the view that the undertaking obtained from the tenderers was only regarding formal defects/shortcomings etc. as far as the design is concerned and not with reference to the conditions. The offer of the petitioner in the second cover remained subject to the conditions stated therein. For the only reason that the financial offer made by the petitioner happened to be the lowest, it cannot be said that the work should have been awarded to the petitioner. Apparently, the said lowest offer was subject to conditions and ultimately after the execution of the work the picture would be different. Naturally the Department was not inclined to accept the said conditional offers reserving a right for future litigations.

(3.) IN Air INdia Ltd. v. Cochin INternational Airport Ltd. (2000) 2 SCC 617), the Apex Court observed as follows: " The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. IN arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though the decision is not amenable to judicial review, the court can examine the decision making process and interfere if it is found vitiated by malafides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the court must exercise its discretionary power under Art. 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene. "