INDU ENGINEERING SERVICE Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners seek to challenge orders dated 7th May 1993 as arbitrary and violative of article 14 of the Constitution of India as also contrary to the terms under clause 48.2 of the agreement dated 7th May 1991 which was entered into between the parties by which contract was awarded to the petitioner no. 1 for a period of two years from the date of commencement of work extendable for a period of one year at the discretion of the Commission.

(2.) The petitioner no. 1 a partnership firm was carrying on business of operating the loading terminal at Hazira and loading LPG and NGL into tankers and rail wagons. A contract for management of operation running maintenance and quality control of LPG and NGL transfer and loading by tankers and rail wagons at the Hazira Gas Processing Complex of respondent no. 2 was awarded to petitioner no. 1 earlier on 4.6.1988 and was valid upto 2nd March 1990 being extendable at the option of the Commission upto a period of one year or part thereof as provided in clause 7.2 of the agreement. The duration of the contract was extended for one year as per clause 7.2 of that agreement with effect from 2.3.1990. Thereafter respondent no. 2 floated another tender for the period commencing from 1991 in respect of the same work. Under the previous contract the petitioner has done work at the rate of Rs. 5.35 paise per M.T. In the fresh bid petitioner no. 1 quoted Rs. 7.00 per M.T. There were however negotiations between the respondent no. 2 and the petitioner no. 1 and the petitioner no. 1 agreed to take the contract at the old rate of Rs. 5.35 per M.T. for the contract period of two years extendable for one more year at the discretion of the Commission. The tender of petitioner no. 1 as revised came to be accepted and a fresh agreement was executed on 7.5.1991. The duration of the contract was two years from the date of the commencement of work as per clause 48.1 of the agreement. Under clause 48.2 the contract could be extended for a period of another one year at the discretion of the Commission under the same revised terms and conditions. The period of two years was to expire on 2nd April 1993 It appears that before the completion of the two year period respondent no. 2 on 26th January 1993 invited fresh tenders. It appears that in response to this invitation even the petitioner no. 1 had given its bid. It however appears that the respondent no. 2 decided to invite fresh tenders for the works and the tenders already received were not acted upon. It appears that petitioner no. 1 also gave his bid in response to the fresh tenders being invited. It appears that the fresh bid of the petitioner no. 1 was @ Rs. 6.40 per M.T. while the lowest bid was @ Rs. 4.25 per M.T. The matter was carried at the interim stage before the Appellate forum in Letters Patent Appeal No. 268 of 1993. It appears from the order made therein on 30th June 1993 that an offer was given to petitioner no. 1 to have the works contract extended at the lowest tender rate of Rs. 4.25 per M.T. The petitioners however were not prepared to accept the offer as recorded in the said order of the Appellate Bench. It appears that in the meantime by a communication dated 31st March 1993 an extension of the contract was given to the petitioner no. 1 for a period not exceeding three months with effect from 3 April 1993 after the expiry of two year term on 2nd April 1993. The Commission reserved its right to terminate the contract of the extended period by giving 15 days notice at any point of time.

(3.) When the petitioners asked for an extension for one year by communication dated 7th May 1993 they were informed that the respondent no. 2 could extend the contract for a period of one year or for a duration of less than one year. The above orders dated 31st March 1993 and 7th May 1993 have been challenged in this petition. The fresh contract has admittedly been given to another party after expiry of the three-month extended period and that party has not been impleaded in this petition.