NLC CONTRACTORS Vs. CHAIRMAN CUM MANAGING DIRECTOR NEYVELI LIGNITE CORPORATION CORPORATE OFFICE NEYVELI

JUDGEMENT

(1.) THE writ petitioner challenges the validity of condition No. 16 found incorporated in the tender floated by the first respondent calling for bids in respect of Annual maintenance Contract (AMC) as violative of Article 14 of the Constitution of India and being opposed to principles of public tender laid down by the Hon'ble Supreme Court of India. THE Neyveli lignite Corp[oration, hereinafter referred to as the Corporation annually invites persons to submit tenders for awarding Annual Maintenance contracts (AMC) and non-Maintenance Contracts (NMC ). NMC contracts are described as A Schedule contracts and AMC contracts are described as B Schedule contracts. THEre is an annexure to the tender form issued for awarding AMC contracts, Condition no. 16 with the note meant only for B Schedule contracts is under attack in the writ petition, condition No. 16 in the tender is extracted hereunder: 16. Cases of Equal Binding: In case of equal bidding, the successful bidder will be selected on the following priority: (i) Priority-1 : Other things being equal, preference will be given to contractors who have surrendered their land/house for NLC projects. In case of more than one such qualified persons, decision will be taken based on LO T system among land/house evictees only. (ii) Priority-2: If no land displaced person as above is available, preference will be given to SC/st contractors. In case of more than one such persons, decision will be taken based on LO T system among SC/st candidates only. (iii) Priority-3: If no displaced/sc/st bidders are available, preference will be given to NLC Registered contractor. In case of more than one such persons, decision will be taken based on LO T system among the NLC Registered contractors only. (iv) Priority-4: If no bidder is available in the above categories lot will be conducted among the available bidders. (v) Any person can avail such concession only once in a financial year in a particular unit. (vi) Firms/companies are not eligible for such concession. THE relevant clause in the note to B Schedule contract is clause 1. (v ). It is extracted hereunder: (v)Any offer less that (+) 1. 0% (plus one percentage) over the estimate value will be summarily rejected.

(2.) THE grounds of attack on the condition referred to above is on the following lines: In case of awarding work on public tender, utmost public interest should be in the mind condition 1. (v) in the note annexed to AMC contract prohibits a person from quoting less than the estimated value plus 1% in other words, if a person is inclined to quote less than the estimated value plus 1% his tender would be summarily rejected by doing so and by consequently giving room to every person to quote a minimum of 1% above the estimated value the company is likely to spend more than what must be spent actually for having the work done by the above device, the Corporation wanted to bring a number of people on equal platform to eliminate persons, with high caliber, who had quoted higher than the minimum referred to above by invoking condition No. 16 of the tender schedule in other words, such a condition namely 1. (v) in the note to the AMC contract is solely with a view to shield vested interested persons such condition namely, condition No. 1. (v) is arbitrary and capricious and therefore cannot be sustained likewise the classification of persons under the priority columns in condition No. 16 of the tender is not reasonable and there is no rationale to the object sought to be achieved, which violates Article 14 of the Constitution of India.

(3.) COMING now to tender condition No. 16, it comes into operation when cases of equal bidding arise. I am not prepared to read equal bidding in tender condition No. 16 to mean would be there only when there are equal bids at the rate mentioned in paragraph 1. (v) of the note to B schedule contract. There is a possibility of many people quoting at the same rate namely, X (+) 1%. There may also be a possibility of persons quoting in excess of X (+) 1% namely, X (+) 2% or X (+) 3%. Many may be X (+) 2% or X (+) 3% and therefore each group would be equal bidders. Therefore tender condition No. 16 is not meant by itself to operate only in respect of tenderers, who quote the price indicated in Paragraph 1. (v) of the note to B schedule contract and it is available to be operated in all contingencies where there is equal bid. Once there us equal bidding, then the Corporation wants to give priority to the people brought under each of the priorities. There are three priorities and the persons grouped under each priority is a separate class by themselves. Each classifications has a intelligible differentia and has a nexus with the object sought to be achieved. The stand of the company is, priority No. 1 is only to alleviate sufferings of people, who have been affected by their displacement. They are called as Project Affected Families. This means, in the course of acquiring large extent of lands for the mining operation, several families have come to be totally uprooted from their holdings and they w ere displaced. Most of them were not qualified to get employment any where. Providing rehabilitation measures to persons put to such sufferings is not an unrecognized one. The Hon,ble supreme Court of India in the judgment reported in AIR 1992 SC 920 was dealing with a case of persons losing possession of lands use to the same being taken over by National Thermal Power Corporation for setting up a super thermal power plant. In that case, the Hon'ble supreme Court of India indicated certain measures to be taken to rehabilitate the persons dispossessed. Right from that date, each State Government, in whose jurisdiction persons are forced to suffer on account of industry expansion, is providing some rehabilitory measures. In the case on hand Rehabilitation measures for the project Affected Persons. This is an approved rehabilitation Scheme with the concurrence of the State of Tamil Nadu. Paragraph 3. 6. 2 (d) of this Scheme provides as follows: Certain contract works will be identified and awarded to PAFs with certain concessions, provided they form a society and all the members of the society are also of PAPs Therefore giving priority to displaced persons coming under category priority-1 cannot be said to be opposed to any provision of law. On the other hand, it is definitely a measure in rehabilitating people, who had suffered for the ultimate development of NLC. Therefore I find that there is reasonableness and rationale in grouping people as referred to above. Priorities 2 and 3 deal with preference to be given to SC & ST contractors and NLC registered contractors. Even in respect of these two prioritie s, I find that there are no materials to even indicate that the two classifications were made with any mala fide motive and it is bad on account of absence of reasonableness or fairness. As already stated, each classification stand by itself and each classification can be differentiated on intelligible differentia. NLC is under a legal obligation to provide rehabilitation measures to displaced persons. Giving priority to SC & ST contractors is also not shown to be against any provision of law. The Counter affidavit of NLC shows that in the allotment of contract for the year 2001-2002, as many as 547 contracts out of 608 (both AMC and NMC) were awarded to persons outside the priority class. Condition No. 16 for B Schedule contract was always there. Paragraph 1. (v) in the note alone appears to have been added recently. It is not possible to sustain the argument of the learned senior counsel for the petitioner that by combined use of tender condition No. 16 and paragraph 1. (v) of the note to B schedule contract, there is a total denial of opportunity to all persons and it confines the opening only to a class of persons. Under these circumstances, I do not find any ground in law or on facts made out to interfere with tender condition No. 16 and paragraph 1. (v) of the opening note attached to B Schedule contract.