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SUPREME COURT OF INDIA
T.S. THAKUR, VIKRAMAJIT SEN, JJ.
Rashmi Metaliks Ltd. & Anr. - Appellants
Versus
Kolkata Metropolitan Development Authority & Ors. - Respondents
CIVIL APPEAL NO. 6772 OF 2013
Decided On : 11-09-2013
i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
ii) Irrationality, namely, Wednesbury unreasonableness.
iii) Procedural impropriety. (Para 8)
While reasonableness in the Wednesbury mould is an integral part of administrative law it has no relevance in contractual law. (Para 9)
Precedence - The rule of precedence, which is an integral part of our jurisprudence, mandates that this exposition of law must be followed and applied even by co-ordinate or co-equal Benches and certainly by all smaller Benches and subordinate Courts. We hasten to clarify that if a co-ordinate Bench considers the ratio decidendi of the previous Bench to be of doubtful efficacy, it must comply with the discipline of requesting Hon’ble the Chief Justice to constitute a larger Bench. Furthermore there are some instances of decisions even of a Single Judge, which having withstood the onslaughts of time have metamorphosed into high authority demanding reverence and adherence because of its vintage and following in contradistinction of the strength of the Bench. This is a significant characteristic of the doctrine of stare decisis. (Para 6)
Tender - `Invitation to Tender’ - Essential to correspond to the essential term - Factors to decide- Having failed to file its latest Income Tax Return along with its bid- The clause (j) (providing for Copy of acknowledgement of latest Income Tax Return and Professional Tax Return,). is not an essential element or ingredient or concomitant of the subject NIT. In the course of hearing, the Income Tax Return has been filed by the Appellant-company and scrutinized by us. For the Assessment Year 2011-2012, the gross income of the Appellant- company was Rs.15,34,05,627, although, for the succeeding Assessment Year 2012-2013, the income tax was NIL, but substantial tax had been deposited. We think that the Income Tax Return would have assumed the character of an essential term if one of the qualifications was either the gross income or the net income on which tax was attracted. In many cases this is a salutary stipulation, since it is indicative of the commercial standing and reliability of the tendering entity. This feature being absent, we think that the filing of the latest Income Tax Return was a collateral term, and accordingly the Tendering Authority ought to have brought this discrepancy to the notice of the Appellant- company and if even thereafter no rectification had been carried out, the position may have been appreciably different. (Para 13)
Facts of the Case :
Appellant-company had not filed its latest Income Tax Return along with its bid as was required by the invitation to tender. The findings of the lower court was that the Appellant-company’s tender did not correspond to the essential term of the ’Invitation to Tender’ as the company not having submitted its latest income tax return along with its Bid.
Findings of the Court :
The clause is not an essential element or ingredient or concomitant of the subject NIT. The Income Tax Return would have assumed the character of an essential term if one of the qualifications was either the gross income or the net income on which tax was attracted. In many cases this is a salutary stipulation, since it is indicative of the commercial standing and reliability of the tendering entity. This feature being absent, we think that the filing of the latest Income Tax Return was a collateral term, and accordingly the Tendering Authority ought to have brought this discrepancy to the notice of the Appellant- company and if even thereafter no rectification had been carried out, the position may have been appreciably different. It has been asserted on behalf of the Appellant-company, and not denied by the learned counsel for the Respondent-Authority, that the financial bid of the Appellant-company is substantially lower than that of the others, and, therefore, pecuniarily preferable.
Result : Appeal allowed.
JUDGMENT
VIKRAMAJIT SEN, J.
1. We are called upon to decide the correctness of the impugned decision of the Division Bench of the High Court of Calcutta which in turn has upheld the appreciation of the law as also the facts of the case by a learned Single Judge of that Court. Thus, these courts have concurrently concluded that the Appellant-company had failed to comprehensively correspond to the essential terms of the tender and, therefore, its offer contained in the said tender was ineligible for consideration.
2. The two terms of the subject 'Invitation to Tender' which are germane to the case in hand are clauses (i) and (j) thereof, which read thus –
“(i) A declaration in the form of Affidavit in a non judicial stamp paper should be submitted stating clearly that the applicant is not barred/delisted/blacklisted by any Government Department/ Government Undertaking/ Statutory Body/ Municipality and of the like Government Bodies in DI Pipe-supply tender during last five years and if any such incident is found at any point of time, the tender will be cancelled summarily without assigning any reason whatsoever.
(j) Valid PAN No., VAT No., Copy of acknowledgement of latest Income Tax Return and Professional Tax Return.”
3. It must immediately be clarified that so far as clause (i) is concerned, the learned Single Judge had thought it unnecessary to analyse its applicability and relevance, having come to the conclusion that a violation of clause (j) had been committed by the Appellant-company inasmuch as it had failed to file its latest Income Tax Return along with its bid. This position has continued to obtain even before the Division Bench as will be palpably clear from a perusal of the impugned judgment. The Division Bench, despite noting clause (j), has concerned itself only with the legal implications flowing from the alleged non-compliance of clause (i). The Division Bench has predicated its decision on W.B. State Electricity Board v. Patel Engineering Co. Ltd. (2001) 2 SCC 451 and has extracted, as we shall also do, the following paragraphs therefrom –
“23. The mistakes/errors in question, it is stated, are unintentional and occurred due to the fault of computer termed as a “repetitive systematic computer typographical transmission failure”. It is difficult to accept this contention. A mistake may be unilateral or mutual but it is always unintentional. If it is intentional it ceases to be a mistake. Here the mistakes may be unintentional but it was not beyond the control of Respondents 1 to 4 to correct the same before submission of the bid. Had they been vigilant in checking the bid documents before their submission, the mistakes would have been avoided.
Further, correction of such mistakes after one-and-a-half months of opening of the bids will also be violative of clauses 24.1, 24.3 and 29.1 of the ITB.
24. The controversy in this case has arisen at the threshold. It cannot be disputed that this is an international competitive bidding which postulates keen competition and high efficiency. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfil prequalification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so pr
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