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1999 Supreme(Pat) 626
PATNA HIGH COURT
M.Y.Eqbal, J.
Cairo Impex Pvt.Ltd.And Another
Versus
Bharat Coking Coal Limited
Criminal Writ Jurisdiction No. 1601 of 1999 ; 1602 of 1999 ;
Decided On : JULY 22, 1999
The State or its instrumentalities must protect the financial interest of the State first while accepting the tender and entering into a contract. However, the action of the State in doing so must not be unfair, unreasonable, or motivated or in order to accommodate and benefit the others instead of the State.
Headnote:
TENDER CANCELLATION - PUBLIC INTEREST - CLAUSES 20 AND 26 OF GENERAL TERMS AND CONDITIONS - REASONABLE AND IN PUBLIC INTEREST - PRESUMPTION OF VALIDITY - BURDEN OF PROOF - JUDICIAL REVIEW - ARTICLE 14 - FINANCIAL INTEREST OF STATE - UNFAIR, UNREASONABLE OR MOTIVATED ACTION - FRESH TENDER NOTICE - OPPORTUNITY TO SUBMIT FRESH TENDER - DISMISSAL OF WRIT PETITIONS.
Fact of the Case:
Petitioners challenged the cancellation of a tender for the sale of coal, alleging illegality, arbitrariness, and motivation to accommodate other parties. The tender was opened, and the petitioners were found to be the highest bidders. However, the respondents received a complaint alleging irregularities, including threats to participants and submission of multiple tenders by a Mafia group to manipulate the process. The respondents conducted an inquiry and decided to cancel the tender and issue a fresh one with additional safeguards to ensure fair participation.
Finding of the Court:
The court held that the petitioners did not have a legal right amenable to writ jurisdiction because the tender was not finalized, and the respondents reserved the right to cancel or modify the tender without assigning any reason. The court also found that the respondents' actions were reasonable and in the public interest, as they were taken to protect the financial interest of the State and to ensure fair participation in the tender process.
Issues: 1. Whether the petitioners had a legal right to the tender that was amenable to writ jurisdiction. 2. Whether the respondents' cancellation of the tender was illegal, arbitrary, or motivated. 3. Whether the respondents' actions were reasonable and in the public interest.
Ratio Decidendi: 1. The court held that the petitioners did not have a legal right to the tender because it was not finalized and the respondents reserved the right to cancel or modify the tender without assigning any reason. 2. The court found that the respondents' cancellation of the tender was not illegal, arbitrary, or motivated, as it was based on a reasonable inquiry into allegations of irregularities and was taken to protect the financial interest of the State and to ensure fair participation in the tender process. 3. The court held that the respondents' actions were reasonable and in the public interest, as they were taken to protect the financial interest of the State and to ensure fair participation in the tender process.
Final Decision: The court dismissed the writ petitions, holding that the petitioners did not have a legal right to the tender and that the respondents' actions were reasonable and in the public interest.
M.Y.Eqbal, J.
1. In these two writ applications, the petitioners have prayed for quashing the office order dated 16-8-1999 issued by the respondent No. 3, the General Manager (M&QC), Bharat Coking Coal Ltd., Sales and Marketing Division, Koyla Bhawan, Koyla Nagar, Dhanbad, whereby the tender, which was opened on 31-5-1999, has been cancelled and further for a declaration that the tender dated 19-6-1999 invited by the respondents for sale of same commodity is illegal, arbitrary and without jurisdiction. Since the petitioners are aggrieved by this common order, these two writ petitions have been heard and disposed of at the admission stage with the consent of the learned Counsel appearing for the parties.
2. The petitioners case is that the respondents had issued a tender on 17-5-1999 for sale of various qualities of coal including 50.000 MT of Jhama Dust of Damagoria colliery and from NLOCP. The petitioner of CWJC No. 1602/99(R), was interested in purchase of 50,000 MT of Jhama Dust from NLOCP while petitioner of CWJC No. 1601/99 (R), was interested to purchase 50,000 MT of Jhama Dust from Damagoria colliery. The petitioners further case is that they deposited the earnest money required as per the general terms and conditions of the tender. It. is stated that the petitioners were found to be highest bidder and the other tenderers, who have submitted their rates, were lower than the petitioners. It is stated that the petitioners were shocked and surprised to know that an office order was issued on 18-6-1999, cancelling the tender held on 31st May 1999. The petitioners contended that they had fulfilled all the terms and conditions of the tender and there was no irregularity and illegality in holding auction but the respondents, in order to accommodate the other party, have illegally and arbitrary cancelled the tender. Subsequently, respondents have published, a notice in newspaper on 26-6-1999 for auction of the same commodities.
3. Counter-affidavits have been filed by the respondents raising objection with regard to the maintainability of the writ applications in the matter of issuance of tender. It is stated that there were serious illegalities and irregularities in the earlier tender held by the respondents. The tender was opened on 31-5-1999 in presence of the participants and it was found that the H-1 rate in respect of Jhama Dust was Rs. 361.00 per MT. The. respondents received a complaint to the effect that they were threatened with dire consequences if they submitted their tenders. It was also stated that the armed men were posted by the Mafia group at the place of tender box and around the General Manager (Sales) Office, who did not allow other parties to submit their Tender Forms and as a result of which they had returned without submitting tender forms due to threat of life. It was also stated by them that the normal market price of Breeze coke is about Rs. 1,500.00 per MT whereas the H-1 price offered by the petitioner was only Rs. 361.00 per MT. The complainants, therefore, requested the respondent No. 2 to inquire into the matter and to cancel the tender so that genuine parties could book the items of tender at appropriate price. It is further stated in the counter-affidavit that on receipt of complaint an inquiry was made and a decision was taken by the authorities of the respondents to cancel the tender and to refund the earnest, money deposited by the participants. It is further stated that pursuant to the decision taken on 18-6-1999 a re-tender of the articles were made on 19-6-1999 and fresh N.I.T. was issued. The respondents, in this tender, took sufficient protection to safeguard the interest of the respondents so that the genuine and fair price is fetched for the commodities as also to ensure the free participation of all intending Purchasers. This action was necessitated to curve the Mafia interference in the participation of traders at large.
4. I have heard Mr. M.M. Banerjee, learned Counsel appe
