Judgement

WANCHOO, CJI. : This is an appeal on a certificate granted by the Mysore High Court and arises in the following circumstances. Tenders were called for construction of the right bank masonry dam called "Hidkal Dam" by the Public Works Department, Irrigation Projects, of the State of Mysore. The tenders were to be submitted to the Chief Engineer of the department. Among the tenderers was the appellant. Another tenderers was respondent No. 3 before us. Eventually the contract was granted by the Major irrigation Projects Control Board (hereinafter referred to as the Board) on November 5, 1966 to respondent No. 3. The appellant challenged the grant of contract to respondent No. 3 and prayed for quashing the resolution of the Board mainly on two grounds, namely, (i) that the rules in the Mysore Public Works Department Code (hereinafter referred to as the Code) were not followed, and (ii) that there was unequal treatment between the various tenderers which was in violation of Article 14 of the Constitution.

2. Most of the facts are not in dispute and we shall narrate them in some detail as they are necessary for the purpose of determining whether there was any breach of Article 14 of the Constitution. A notification was issued on April 4, 1966 for the contract in question calling for sealed tender the estimated cost of the contract being 230.44 lakhs. The estimated quantities of several items of work were stated in the tender documents and tenderers were required to quote their rates for various items of work and the amount for each item on the basis of the said estimated quantities. The notification also said that conditional tenders were liable to he rejected at the discretion of the competent authority without assigning any reason therefor. The notification further said that the competent authority reserved the power to reject all or any of the tenders without assigning any reason therefor.

3. Nine sealed tenders were received in response to this notification and they were opened on July 30, 1968 in the presence of the tenderers or their representatives. The appellant s tender was unconditional and was for a total sum of Rs. 222.72 lakhs, this being 3.64 per cent below the estimated cost. Respondent No. 3 made a tender for Rupees 214.58 lakhs i.e. 7.16 per cent below the estimated cost, but he had stipulated certain conditions and his rates for excavating soft and hard rock were rather strange. Another tenderers was the National Projects Construction Corporation Limited (hereinafter referred to as the Corporation) and it submitted the tender for Rs. 229.34 lakes i. e. O. 7773 per cent below the estimated cost. The Corporation however did not furnish the earnest money demanded and prayed for exemption from such deposit, presumably on the ground that it was a public corporation entirely owned by the Central Government and State Governments. The Corporation also made certain conditions to which it is unnecessary to refer. We also do not think it necessary to refer to other six tenderers in detail. It is enough to say that five of them had made unconditional tenders while the sixth had made a conditional tender, but the amounts tendered by them were much above the amounts tendered by these three tenderers.

4. Soon thereafter on August 6, 1966, the appellant addressed a letter to the Chief Engineer saying that his was the lowest unconditional tender and therefore the contract should be granted to him. The appellant also pointed out in this letter that the tender of respondent No. 3 was conditional and the rates quoted for excavation of soft rock and hard rock were speculative, and therefore that tender, though it was the lowest in amount, should be rejected. None of these tenders was however accepted. On August 10, 1966, the Chief Engineer addressed letters to all the nine tenderers inquiring, from all of them (except respondent No. 3) if they would be agreeable to undertake the work for the lowest amount tendered, namely, Rs. 21