K M THOMAS Vs. COCHIN REFINERIES LTD

JUDGEMENT

(1.) Aggrieved by the rejection of the lowest tender submitted by the petitioner and acceptance of the next higher tender submitted by the third respondent for the construction work of a building complex for the first respondent Cochin Refineries Ltd., petitioner has filed this Original Petition under Art.226 of the Constitution of India seeking a writ of certiorari quashing the decision of first respondent awarding the work to third respondent and a writ of mandamus directing first respondent to consider Ext. P4 representation and to award the contract to petitioner. Third respondent and the Secretary of first respondent have sworn to counter affidavits.

(2.) The facts emerging from the pleadings and documents produced in the case can be summarised as follows As per Ext. R6 tender notification dated 1-3-1982, first respondent Cochin Refineries Limited, a Government Company incorporated under the Companies Act, 1956, sealed item-rate tenders were invited from experienced and financially sound contractors for constructing a new service building at the Company's premises to house a Canteen, changing room, Cooperative Society etc. Tenders were to be accompanied with Earnest money deposit of Rs. 20,000/- and submitted on or before 4-1972. Ext. R6 stated that tenders will be opened immediately after 3.00 p. m. First respondent reserved the right to reject any or all tenders without assigning any reason. Petitioner, the Managing Partner of a construction firm, the third respondent and two others submitted tenders, satisfying the conditions in Ext. R6. The total amount shown in petitioners' tender was slightly over rupees twenty lakhs. Third respondent's tender showed about rupees three and a half lakhs above the petitioner's tender. The two other tenders were for still higher amounts. Not being satisfied with the tenders (according to the counter affidavit of Company Secretary, all the tenders showed exorbitantly high rates for some items and certain rates were unworkably low) the Chief Design Engineer of the Company called all the tenderers for discussion on 26-4-1982. Ext. P3 is the letter received by petitioner in that connection. Petitioner and another were not prepared to revise the rates quoted by them. Third respondent and another agreed to submit revised offers. The revised offer of third respondent was Rs 22,36,440.00, which was about Rs. 2.35 lakhs above the offer of petitioner, but less than the offers of the other two contractors. Even after revision by third respondent, petitioner's offer was the lowest. All the tenders were accompanied by lists of other works undertaken by the (our tenderers. Petitioner and third respondent had not undertaken any work for the company and were strangers to the Company, while the two other tenderers had undertaken work earlier for the Company and were therefore known to the Company Officers. Petitioner and third respondent had bandied Building Work for Cochin Shipyard Limited and petitioner had also handled contract work for F. A. C. T., Rare Earths Ltd , and P. W. Department of Kerala Government. The concerned Officer of the Company wrote to F. A. C. T. for confidential report regarding work done by petitioner and to Cochin Shipyard Ltd. regarding work done by petitioner and third respondent. Reports were duly received. Reports regarding petitioner were unfavourable, while report regarding third respondent was favourable. On 5-5-1982, the Chief Design Engineer who had been deputed to study, analyse and assess the tenders, made Ext. R3 recommendation to the tender committee. He recommended rejection of petitioner's tender and acceptance of third respondent's tender. His recommendation was approved by the tender committee. Coming to know of this, petitioner gave Ext. P4 representation dated 5-5-1982 and Ext. R7 representation dated 6-5-1982 requesting for acceptance of his lowest tender. Along with Ext. R7, he submitted two certificates Exts. P1 and P2. The tender committee again met on 7-5-1982, considered the representations, but decided to stick to it's original decision as per Ext. R4 minutes. The order for the work was given to third respondent as per Ext. R5. He has commenced and is proceeding with the work.

(3.) Petitioner contends that the Company, as an Authority under Art.12 of the Constitution of India could not reject the lowest tender without reason and at it's sweet will, that the Company violated the norms and standard fixed by it in the tender notification, that it's action was arbitrary and violated the equality clause in Art.14 of the Constitution, that procedure of securing confidential information and acting on the same without putting it to the petitioner and without giving him an opportunity to give an explanation or to challenge the confidential information offends the doctrine of fairplay in administrative action and violates rules of natural justice. He also contends that rejection of his tender on the ground of his alleged unsuitability and alleged unsatisfactory past performance adversely affected his civil rights. It is further contended that acceptance of the substantially higher tender of third respondent was a purely arbitrary act violative of the equality clause.