Back
Andhra Pradesh High Court
Soper Constructions, Engineers and Contractors - Appellant
Versus
Municipal Corporation of Hyderabad - Respondent
Decided On : 09-18-90
HYDERABAD MUNICIPAL CORPORATION ACT, 1956 - SECTION 124(C) - TENDER RULES, 1970 - RULE 5, 6, 7, 8 - WRIT PETITION - TENDERS - CANCELLATION - ARBITRARINESS - VIOLATION OF RULES - STANDING COMMITTEE - GENERAL BODY - POWERS - CONTRACT - ACCEPTANCE OF LOWEST TENDER - FINANCIAL STATUS - CAPACITY - SECURITY - PREVIOUS EXPERIENCE - REJECTION OF LOWEST TENDER - REASONS TO BE RECORDED - NEXT LOWEST TENDER - ACCEPTANCE - ADEQUATE GROUNDS FOR REJECTION - POLICY DECISION OF GENERAL BODY - BINDING ON STANDING COMMITTEE - GOVERNMENT DIRECTIVES - BINDING ON CORPORATION - BYE-LAWS - SANCTION BY GOVERNMENT - MODIFICATION OR REPEAL BY GOVERNMENT - STANDING COMMITTEE - APPROVAL OF COMMISSIONER - EARNEST MONEY DEPOSIT - ADDITIONAL DEPOSIT.
Fact of the Case:
The petitioner, a contractor registered with the Municipal Corporation of Hyderabad (MCH), submitted its tender in response to a tender notice issued by the MCH for the work of strengthening a road. The petitioner's tender was the lowest, but the Standing Committee of the MCH, relying on a resolution passed by the General Body of the MCH, cancelled all the tenders and decided to call for fresh tenders. The petitioner challenged the cancellation of tenders by way of a writ petition.
Finding of the Court:
The court held that the cancellation of tenders by the Standing Committee was arbitrary and in violation of the Tender Rules, 1970. The court observed that the Standing Committee is bound by the Tender Rules, which require that the lowest tender shall ordinarily be accepted. The court further held that the General Body of the MCH is not competent to take policy decisions in respect of approvals by the Standing Committee under Section 124(c) of the Hyderabad Municipal Corporation Act, 1956. The court also held that the government directives are binding on the corporation and that the bye-laws made by the corporation are subject to sanction by the government and even after that, subject to modification or repeal by the government.
Issues: 1. Whether the cancellation of tenders by the Standing Committee was arbitrary and in violation of the Tender Rules, 1970? 2. Whether the General Body of the MCH is competent to take policy decisions in respect of approvals by the Standing Committee under Section 124(c) of the Hyderabad Municipal Corporation Act, 1956? 3. Whether the government directives are binding on the corporation? 4. Whether the bye-laws made by the corporation are subject to sanction by the government and even after that, subject to modification or repeal by the government?
Ratio Decidendi: 1. The Standing Committee is bound by the Tender Rules, which require that the lowest tender shall ordinarily be accepted. 2. The General Body of the MCH is not competent to take policy decisions in respect of approvals by the Standing Committee under Section 124(c) of the Hyderabad Municipal Corporation Act, 1956. 3. The government directives are binding on the corporation. 4. The bye-laws made by the corporation are subject to sanction by the government and even after that, subject to modification or repeal by the government.
Final Decision: The court allowed the writ petition, set aside the decision of the Standing Committee to cancel the tenders, and directed the Standing Committee to give its approval for the acceptance of the petitioner's tender.
( 2 ) IT is the case of the petitioner that it is a contractor registered with the 1st respondent and that for the past more than 15 years it has been doing the business of contracts without any complaint. The said tender notice dated -9-1989 had invited sealed tenders from the M. C. H. registered contractors which would be received by the 2nd respondent at his office upto 28-10-89 for the work of "strengthening the road with 75 mm thick built up spray grouting and B. T. with 20 mm A. C. from Telugu Talli statute to ROB Khairtabad (by hot mix)" and the tenders were to be opened on the same day by 3-30 P. M. Later an amendment was issued changing the dates of issue of tender schedules and the receipt of tenders to 5-3-1990 and 7-3-1990 respectively and the tenders were to be opened on 7-3-1990. The petitioner submitted its tender and its tender was duly recommended by the 2nd respondent, the Chief Engineer of the 1st respondent, and also the Commissioner of the 1st respondent, being the lowest. However, the standing Committee of the 1st respondent as per its resolution No. 31 dated 20-3-1990 cancelled all the tenders and decided to call for fresh tenders relying on resolution No. 129 of the General Body of the 1st respondent dated 31-1-1990 wherein it was decided that the limit for accepting less percentage of tenders be fixed at minus 15%.
( 3 ) IT is the contention of the petitioner that the said resolution of the standing Committee dated 20-3-1990 rejecting the tenders submitted pursuant to the said tender notice dated 2-9-1989 and calling for fresh tenders, is bad because it is in violation of the Rules framed by the government of Andhra Pradesh in exercise of its powers under Section 585 of the Hyderabad Municipal Corporations Act, 1956 (hereinafter referred to as the "act") and because the general body and the Standing Committee of the 1st respondent do not have the power to vary the procedure contemplated under the said Rules as regards the acceptance of tenders. The petitioner also relies on G. O. Ms. No. 597 dated 3-11-1988 of the Government of Andhra Pradesh wherein the practice of accepting the lowest tender was directed to be followed by the respondents. The petitioner contends that the Standing Committee of the 1st respondent cannot rely on the said resolution No. 129 dated 31-1-1990 of the general body of the 1st respondent and reject the tenders instead of accepting the lowest tender as required by the said Rules. Even otherwise, according to the petitioner, inasmuch as the tender notice in respect of the present work was issued on 2-9-1989 itself, tenders submitted pursuant to the said notice cannot be rejected relying on subsequent decision of the general body dated 31-1-1990.
( 4 ) WHEN this Writ Petition came up for admission on 12-4-1990, the standing Counsel for the 1st respondent took notice before admission and the matter was directed to be posted after two weeks for admission and no orders were passed onw. P. M. P. No. 6661 of 1990 preferred by the petitioner for staying the action of the respondents calling for fresh tenders pursuant to the said resolution No. 31 dated 20-3-1990 pending the Writ Petition. The Standing Counsel for the 1st respondent took time for filing counter on 4-6-1990 when the Writ Petition came up again for admission and further time on 15-64990, 25-6-1990, 2-7-1990 and 6-7-1990. When the matter came up on 9-7-1990, an additional affidavit was filed on behalf of the petiti
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
