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PATNA HIGH COURT
S.B.Sinha, J.
Jai Bharat Transport Company And Another
Versus
Central Coalfields Limited
Civil Writ Jurisdiction Case No. 1271 of 1987 ;
Decided On : FEBRUARY 12, 1988
TENDER - TRANSPORTATION OF COAL - ELIGIBILITY CRITERIA - OWNERSHIP OF TRUCKS - MANDATORY REQUIREMENT - DISCRIMINATION - LOCUS STANDI - PUBLIC INTEREST - EXERCISE OF DISCRETIONARY POWER - WRIT JURISDICTION.
Fact of the Case:
The petitioners, who are transporters, challenged the tender process for the transportation of coal, alleging that the successful tenderers did not meet the eligibility criteria of owning at least one-third of the number of trucks required for the job. The petitioners contended that this requirement was mandatory and that the respondents had acted arbitrarily and in violation of Article 14 of the Constitution by awarding the contract to unqualified tenderers.
Finding of the Court:
The court held that the requirement of owning at least one-third of the number of trucks was mandatory and that the respondents had failed to follow the tender process properly. However, the court also found that the petitioners had not submitted a tender for the entire job and that they could have submitted a tender for one or more items of work. The court further found that the respondents had acted in the public interest by awarding the contract to the lowest tenderers, resulting in a significant cost savings to the public exchequer.
Issues: 1. Whether the requirement of owning at least one-third of the number of trucks was mandatory? 2. Whether the respondents had acted arbitrarily and in violation of Article 14 of the Constitution by awarding the contract to unqualified tenderers? 3. Whether the petitioners had locus standi to challenge the tender process? 4. Whether the court should exercise its discretionary power to quash the tender process in the public interest?
Ratio Decidendi: 1. The court held that the requirement of owning at least one-third of the number of trucks was mandatory based on the following reasoning: - The tender notice clearly stated that the successful tenderers must own at least one-third of the number of trucks required for the job. - This requirement was necessary to ensure that the successful tenderers had the capacity to perform the job. - The respondents had failed to provide any justification for deviating from this requirement. 2. The court held that the respondents had acted arbitrarily and in violation of Article 14 of the Constitution by awarding the contract to unqualified tenderers based on the following reasoning: - The respondents had failed to follow the tender process properly by not verifying the eligibility of the successful tenderers. - The respondents had awarded the contract to tenderers who did not meet the mandatory requirement of owning at least one-third of the number of trucks. - This had resulted in discrimination against the petitioners, who were qualified tenderers. 3. The court held that the petitioners had locus standi to challenge the tender process because they had been directly affected by the respondents' actions. The petitioners had been denied the opportunity to compete for the contract on equal terms with the successful tenderers.
Final Decision: The court dismissed the writ petition. However, the court directed the respondents to consider the petitioners' tenders for any future transportation jobs that may arise.
1. In this writ application, the petitioners have prayed for the following reliefs :
(a) Issuance of an appropriate writ, order or direction declaring that all action taken by Respondents 1 to 3 pursuant to Annexures-1, 2 and 3 are invalid, illegal, and not in accordance with law;
(b) Issuance of a writ, order or direction quashing the works order issued in favour of respondents 4 to 9 allotting works pursuant to tender notice/tender document (Annexures-1, 2 and 3);
(c) Issuance of a writ, order or direction commanding respondents 1 to 3 to call for a fresh tender in respect of the aforesaid works and to consider the tenders of those persons only who are eligible in accordance with the tender notice.
2. The petitioner allegedly primarily carry on transportation business. It is admitted that respondent 2 invited a tender for transportation of coal wherefor a notice was issued on the 13th May, 1987. The said tender notice is contained in Annexure-1 to the writ application. By a corrigendum dt. 10/11-8-87 certain corrections were made in the aforementioned tender notice.
3. By reason of the said notice sealed tenders were invited from the experienced and reputed transporters for transportation of coal, picking-breaking and wagon loading by contractors pay loader at KD Project in North Karanpura Area for a period of two years.
4. In terms of the said tender notice, prospective tenderers were asked to submit their tenders items wise except in relation to items 7, 8 and 9 thereof which were to be treated as a composite item.
5. In terms of the aforementioned tender, transportation of coal was to be made from one point to another as mentioned in items 1 to 6 thereof. The said notice contains general terms and conditions. The said terms and conditions are in two parts. Part I comprises of Cls.1 to 22, whereas Part II comprises of Cls.23 to the rest.
6. In terms of Cl.7 of the said terms and conditions, the tenderer was expected to inspect the site and make himself fully conversant with the work before submitting the tender and it shall be deemed that he has done so before submitting the tender.
7. The other relevant clauses which are important for the purpose of disposal of this writ application are as follows :
"12. The tender shall be submitted in two parts : (a) The following documents/details should be submitted in an invalope marked "PART I",
(i) Money receipt towards purchase of tender document.
(ii) Demand draft/cash receipt towards deposit of earnest money.
(iii) Certificate/s of experience of the tender.
(iv) Income-tax clearance certificate for the last three years.
(v) Photostat copy of the registered partnership deed in the case of partnership firm, Memorandum and Articles of Association in the case of private/public limited company and in the case of proprietary firm, a certificate to that effect from the proprietor.
(vi) Certificate/proof of registration of the firm/company with the registrar of firms/ companies.
xxx xxx xxx
(ix) List of trucks/requirements owned by the tenderer and proposed to be deployed for the work, indicating their present place of deployment, registration No./machine No./year of manufacture, reference of fitness certificate/permit/Insurance cover etc.
(x) In case of trucks/equipments proposed to be taken on hire by the tenderer for the purpose of this work, a certificate to that effect from the owner from whom these trucks/equipments are proposed to be taken on hire, with the above details.
xxx xxx xxx
(e) "Part-II" envelope containing quotations shall be opened only if the Tender Committee is satisfied, on first opening "Part-I" envelope referred to above, that the earnest money has been deposited, required documents, informations have been furnished the terms and conditions have been accepted unconditionally and tenderer has the requisite competence/ experience/resources, to execute the work satisfactorily."
"22. The Company is not bound to accept the lowest tender and reserves the right
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