VERY IMPORTANT POINT
Whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in the tender notice, it should be transparent, fair and open and any abuse of power for extraneous reasons would expose the authorities concerned, whether it is the Minister for Excise or the Commissioner of Excise, to appropriate penalties at the hands of the courts.

Headnote:TENDERS-Tenders for wholesale supply of rectified spirit to Excise Warehouse-Whatever procedure the Government proposes to follow in accepting the tender must be clearly stated in tender notice-Consideration of tenders received and procedure to be followed in matter of acceptance of a tender should be transparent, fair and open-Any abuse of power for extraneous reasons would expose authorities concerned, whether it is the Minister for Excise or Commissioner of Excise, to appropriate penalties at the hands of Courts-Satish Sharma s case, 1996(8) Supreme 97; Shive Sagar Tiwari s case, 1996(7) Supreme 747 : Relied on.
       Held that the entire procedure followed by the Commissioner and the Government of Assam in accepting the tender of Dutta Associates (appelant herein) is unfair and opposed to the norms which the Government should follow in such matters, viz., openness, transparency and fair dealing. (Para 5)
       Further held that the entire process leading to the acceptance of the appellant s tender is vitiated by more than one illegality. Firstly, the tender notice did not specify the viability range nor did it say that only the tenders coming within the viability range will be considered. More significantly, the tender notice did not even say that after receiving the tenders, the Commissioner/Government would first determine the viability range and would then call upon the lowest eligible tenderer to make a counter-offer. The exercise of determining the viability range and calling upon Dutta Associates to make a counter-offer on the alleged ground that he was the lowest tender among the eligible tenderers is outside the tender notice. Fairness demanded that the authority should have notified in the tender notice itself the procedure which they proposed to adopt while accepting the tender. They did nothing of that sort. Secondly, we have not been able to understand the very concept of viability range . Thirdly, the Division Bench states repeatedly in its judgment that having determined the viability range , the Government called upon only the appellant-Dutta Associates (third respondent in the writ petition/writ appeal) to make a counter-offer to come within the viability range and that his revised offer at the higher limit of the viability range (Rs.15.71) was accepted. The Division Bench has stressed that no such opportunity to make a counter-offer was given to any other tenderer including the first respondent. As the Division Bench has rightly pointed out, this is equally a vitiating factor. (Para 4)

JUDGMENT

B.P. Jeevan Reddy, J.-Leave granted.

2. Inexplicable indeed are the ways of the rules on some occasions-and this is one such instance. The Commissioner of Excise, Assam called for tenders for wholesale supply of rectified spirit (Grade-1) to the Excise Warehouse at Tinsukia for the period May 16, 1994 to May 15, 1996. The tender was floated on May 28, 1993. As many as seventeen tenders mentioned below were received quoting the rate mentioned against each person s name :

1. M/s. Himangsu Enterprises RK Bardoloi Road, Dibrugarh Rs. 9.20

2. Shri Jitendra Nath Saikia Chowkidinghee, Dibrugarh Rs. 10.48

3. M/s. Dutta Associates Pvt. Ltd., Chowkidinghee, Dibrugarh Rs. 11.14

4. Shri Pradip Kumar Dutta Chowkidinghee, Dibrugarh Rs. 11.75

5. M/s. Civiliyar Enterprises Rajgarh, Guwahati Rs. 12.57

6. M/s. Onash Enterprises G.S. Road, Guwahati Rs. 13.20

7. Shri Umesh Chandra Bora, Laukuli, Tinsukia Rs. 13.69

8. M/s. North East Trade Agency, Athgaon, Guwahati Rs. 13.99

9. M/s. Aco Traders Rajgarh Road, Guwahati Rs. 14.28

10. M/s. Noble Sales Agency G.S. Road, Dispur, Guwahati Rs. 14.55

11. Shri Pranab Kumar Rajkhowa Coal Road, Tinsukia Rs. 15.05

12. M/s. United Assam Company, Rupali Path, Jorhat Rs. 15.55

13. M/s. Indo Mercentiles Pvt. Ltd., Bishnu Market, Guwahati Rs. 15.55

14. Shri Vijay Kumar Jasrasaria Guwahati Rs. 16.05

15. Shri Dilip Rajkhowa, Tinsukia Rs. 16.13

16. M/s. Pradip Kumar Khaitan AT Road, Jorhat Rs. 16.39

17. M/s. New Ashish Enterprise TR Phukan Road, Guwahati Rs. 16.55

3. It is stated that out of seventeen tenders received, tenders of persons mentioned at Sr. Nos.1 and 2 were found ineligible and were, therefore, excluded from consideration. If that were so, one would have expected the Commissioner to accept the offer of the person at Sr. No. 3 (Dutta Associates Private Limited, the appellant herein), his being the lowest tender. He did not do so. He did not say that the offer of Dutta Associates was not a genuine offer or that he is not in a position to fulfil the terms of the contract, if entered into with him. On the other hand, the Commissioner and the Government entered upon an exercise of determining, what they call, viability range . They determined the viability range between Rs. 14.72 to Rs. 15.71 per LPL. It is said that this viability range was arrived at keeping in view the prevailing prices outside the State inasmuch as most of the rectified spirit to be supplied under the contract had to be procured outside the State of Assam. If viability range was the relevant basis, then one would have expected the Commissioner and the Government of Assam to have accepted the tender at Sr. No. 11 (Sri Pranab Kumar Rajkhowa), whose bid was the lowest within the viability range. They did not do this either. They called upon Dutta Associates (appellant herein) to revise his offer which he did by quoting Rs.15.71 per LPL [which happens to be the maximum of the viability range]. His bid was accepted. Whereupon Indo Merchantiles Private Limited (first respondent herein) who is at Sr. No. 13 in the aforsaid list of tenders, filed a writ petition in the Gauhati High Court questioning the acceptance of appellant s tender. Indo Merchantiles submitted that not accepting his tender at Rs. 15.55 and accepting the tender of the appellant by making him revise h

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1996 Supreme(SC) 1921

Cases Referred (1)