SARGOUS TOURS AND TRAVELS Vs. UNION OF INDIA

JUDGEMENT

(1.) In a State, which is governed by rule of law, every tender process set in motion by the State or its instrumentalities should undoubtedly, be transparent, fair and open. Can a tender process, which does not notify the procedure, which will be followed for acceptance or rejection of tenders, be described or treated as transparent, fair and open and if such a grievance is brought before the writ Court, should the writ Court interfere, are the questions, which have been raised in the present writ application.

(2.) In a nut-shell, the case of the petitioners may be described as follows : The petitioner No. 1 is a company dealing with supply of vehicles, such as, trucks, buses and taxis and is registered as a transporter under the Head Quarters Eastern Command, Fortwilliam, Kolkata. The petitioner No. 2 is the sole proprietor of petitioner No. 1. A notice inviting tender (NIT), dated 28-12-2002, was issued by the Brigadier DDST Head Quarters Area, 101 Area, Shillong, for supply of various taxies and buses for the period commencing from 1-4-03 to 31-3-04 to various destinations. In accordance with the requirements of the NIT, the petitioner No. 2 submitted his tender in the name of petitioner No. 1 along with all requisite documents and earnest money. In pursuance of the NIT, the petitioner No. 2 was invited to participate in the open tender process to be held on 3-3-03. In all the items in which the petitioners participated, the petitioners had quoted lowest rates, but the respondent-authorities did not issue Acceptance of Tender in favour of the petitioners for the works mentioned at S1. Nos. 26 (ABSD, Ghy to SP Hatigarh CHT), 43 (Ghy. to Narangi-local duty) and 44, (Ghy. to Shillong Jorhat Tezpur Michamari Dimapur Rangia Tenga Silchar CHT) the petitioners having,, however, been allotted the work as mentioned at SI. Nos. 23 (FCI Ghy. to CHT ABSD) and 42 (ABSD, Ghy, Narangi Basistha Rly. Staion and back CHT). Since the petitioners were the lowest bidder in respect of item Nos. 26, 43 and 44, the petitioners ought to have been, in terms of the requirement of para 8 of the NIT, invited for negotiation, but instead thereof, the works were allotted in favour of private respondent Nos. 5 and 6 violating, thus, the procedural norms set by the respondent-authorities themselves. The respondent-authorities issued Acceptance of Tender Note, dated 12-3-2003, in favour of private respondent Nos. 5 and 6 in respect of items aforementioned, though their rates were higher than those of the petitioners in all respects. Such action on the part of the respondent-authorities is illegal, arbitrary, unfair, unreasonable, capricious and against the principles of natural justice. The petitioners have been carrying on the work of supply of vehicles as mentioned hereinbefore to the fullest satisfaction of the authorities concerned. Thus, the exercise of the power by the respondent-authorities is on extraneous considerations and contrary to the factors governing the public interest and public welfare. The exercise of power is, thus, colourable in nature. The petitioners have, therefore, approached this Court seeking issuance of appropriate writ or writs setting aside and quashing the impugned Acceptance of Tender Note, dated 12-3-2003, aforementioned and commanding the official-respondents to issue allotment of work, in question, in favour of the petitioners.

(3.) The respondent-authorities, namely, respondents Nos. 1 to 4, have resisted the reliefs as sought for by the petitioners, the case of these respondents being, briefly stated, thus: The Army-authorities conclude contracts for supply of civil hired transport mainly taxies, buses and load carriers on annual basis from amongst contractors, whose names appear in the list of approved contractors maintained by the Head Quarters Eastern Command (Supply & Transport Branch), Kolkata. These contracts are concluded by open tendering by the Deputy Director of Supply & Transport (i.e., DDST) on behalf of the General Officer Commanding (GOC), 101 Area, Shillong, who constitutes a Board of Officers for processing the tenders and a panel of two senior Army Officers of the rank of Brigadier and Colonel and a representative of Controller of Defence Accounts, who is a senior officer of Indian Defence Accounts Services Cadre. The Deputy Director of Supply & Transport, who is an officer of the rank of a Brigadier, is a part of this panel and he is known as the Executive Officer. The decision of the GOC, who, as per the Government Rules and Regulations, is the competent Financial Authority to finally settle all matters relating to tenders is final. In pursuance of the NIT, dated 28-12-2002, the petitioner No. 2 submitted his tender documents as per the procedure set by the respondent-authorities on 3-3-2003. The tenders were opened by the Board of Officers consisting of a Commissioned officer along with a Junior Commissioned Officer in presence of all the tenderers or their authorized representatives. The tenders were, thereafter, processed by the panel of Officers constituted as stated hereinbefore. The panel of Officers made their-recommendations taking into consideration all parameters as has been compiled in the booklet under the heading "Procedure for Conclusion of ASC Contracts", and the said recommendations had been put up before the competent Financial Authority. It is the further case of the respondent-authorities that there are several sets of parameters, which are to be taken into consideration by the competent Financial Authority as per terms and conditions of the contract amongst other things and the Financial Authority is empowered either to accept or reject any tender in whole or in part without assigning any reason or cause whatsoever. Extract of Para 13 of IAFZ-2137, relating to Invitation to Tender and Instruction to Tenders, reads as under : The approval or rejection of tenders rests with GOC 101 Area who reserves to himself the right to reject any tender in whose or part and item in whole or part in respect of any or all the delivery points shown in Schedule (i.e. IAFZ-2121) without cause assigned. The lowest tender will not necessarily be accepted". Further, Para 8 of the NIT has been enlarged by Para 74 of the letter, dated 22nd Nov. 2000, of the Government of India, Ministry of Defence, which lays down that the tenders below 20% of reasonable rates would be rejected as fictitious. This condition has been incorporated to ensure that the services offered by the tenderer are maintained at the desired level. The petitioners cannot claim negotiation on account of the fact that their tenders were the lowest. Relevant paragraphs relating to sanction of contracts, which find place in the Government of India letter referred to above, have been relied upon by the respondent-authorities in support of their case. In the present case, upon opening of the tenders submitted by the writ petitioners, it was found that the rates offered by the petitioners in respect of item Nos. 26, 43 and 44 were far lower than the Reasonable Rates (RR) fixed by the authorities concerned in terms of Para 74 aforementioned and the same having, thus, been found to have been unfit for consideration was rejected and the work orders in the form of Acceptance of Tender Notes (AT Notes) were issued in favour of respondents Nos. 5 and 6. This was done in conformity with the requirements of law inasmuch as their rates were found to be the lowest in the light of the RR fixed by the authorities concerned. The fact that the petitioners were carrying on the contract works mentioned at serial Nos. 26, 43 and 44, when the NIT, in question, was issued is immaterial inasmuch as the contracts are allotted afresh annually. The guidelines contained in para 74 are/were universally applied in respect of all items mentioned in the NIT and in every case, where the rates quoted by a tenderer are found to be below 20% of the RR, the panel of the Officers call the tenderer for discussion/negotiation giving, thus, the tenderer concerned an opportunity to justify the rates quoted and, then, only the tenders are either accepted or rejected. Sincthe petitioners have been working as supplier of transports with the respondent-authorities, they knew about the requirements of a valid tender and they also knew, because of their experience working with the respondent-authorities, about the concept and requirements of RR. The fact that para 74 would be applied to the present tender process too and the fact that if any rate submitted by any tenderer is below the RR, then, such tender would not be accepted were known to the petitioners. In terms of para 74, the petitioners too were given an opportunity to justify their rates. Even in respect of item No. 42, the petitioners rate was found to be lower than the RR, but on being called to justify the rates offered, since the petitioners justified their rates, the same were accepted by the respondent-authorities, but as regard other items, the petitioners failed to justify that the rates offered by them were workable and, hence, their tenders were rejected. Thus, the decision-making process suffered from no illegality, procedural or otherwise, and no case for issuance of writ or writs under Article 226 of the Constitution could be made out by the petitioners. The respondent-authorities have acted in accordance with law and in the interest of State. There is no infirmity in awarding the contract works in favour of respondents Nos. 5 and 6. There is, therefore, no merit in the present writ petition and the same may be dismissed.