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High Court Of Calcutta
BIMAL CHANDRA BASAK, SATYABRATA MITRA
AMCO TRADERS - Appellant
Versus
W.B.STATE ELECTRICITY BOARD - Respondent
A. F. O. O. 618 Of 1987
Decided On : 03/11/1988
TENDER - Sale of Off-cuts - Highest Bidder - Improper Selection - Mala Fide - Arbitrary Action - Public Interest - Legality of Sale.
Fact of the Case:
The West Bengal State Electricity Board (Board) invited tenders for the sale of assorted sizes of off-cuts of structural steel lying at Kolaghat Thermal Power Project Site and Agarpara Works of M/s. Texmaco Limited (Texmaco). The petitioner submitted a tender and deposited security money. The Board opened the tenders and directed the Chief Cashier to refund the Earnest Money to the parties mentioned therein as the tender had been finalized and order placed with a different party, without disclosing the name of the party.
Finding of the Court:
1. The Board's selection of National Steel Corporation as the highest bidder by adding one percent to the highest offer of another bidder was improper, illegal, and arbitrary. 2. The Board's decision to sell the off-cuts to Texmaco, who had not submitted any tender, was illegal, improper, without jurisdiction, mala fide, and arbitrary. 3. The Board's action was influenced by the personal interest of the Finance Manager, K. T. P. P., who superimposed himself in the transaction and exploited his position to impose his decision. 4. The documents produced by Texmaco did not support their contention that the goods had been sold.
Issues: 1. Whether the Board's selection of National Steel Corporation as the highest bidder was valid. 2. Whether the Board's decision to sell the off-cuts to Texmaco was legal and proper. 3. Whether the Board's action was influenced by the personal interest of the Finance Manager, K. T. P. P. 4. Whether the goods in question had been sold by Texmaco.
Ratio Decidendi: 1. The Board's selection of National Steel Corporation as the highest bidder was invalid because it was based on an improper and mala fide procedure. The Board should have treated the petitioner as the highest bidder. 2. The Board's decision to sell the off-cuts to Texmaco was illegal and improper because it was made without following the tender procedure and was not in the public interest. 3. The Board's action was influenced by the personal interest of the Finance Manager, K. T. P. P., who acted arbitrarily and without authority. 4. The documents produced by Texmaco did not support their contention that the goods had been sold.
Final Decision: The Court held that the Board's decision to sell the off-cuts to Texmaco was illegal, improper, without jurisdiction, mala fide, and arbitrary. The Court appointed a Receiver and Special Officer to inquire into the matter and submit a report before passing a final order on the question of relief to be granted to the petitioner.
( 1 ) THIS appeal is directed against a judgment and order dt. 15th Jan. , 1986 whereby the learned trial Judge dismissed the writ petition filed by the appellant herein and discharged the Rule. The case of the petitioner is as follows. Petitioner is a dealer in steel scrap materials. There was an advertisement that the West Bengal State Electricity Board the respondent 1 to the writ petition (hereinafter referred to as the Board) proposed to sell assorted sizes of off-cuts of structural steel and invited tenders from the intending purchasers. The said materials were lying at Kolaghat Thermal Power Project Site, P. O. Mecheda, District Midnapore and Agarpara Works of M/s. Texmaco Limited which has been made respondent 4 in the writ petition. Petitioner obtained tender documents and submitted such tenders and the petitioner deposited security money and complied with all the requirements. According to the petitioner on or about 6th July, 1984 the sealed tenders (offers) from the various parties, whose names, addresses and rates quoted were specified in the petition, were opened in the presence of the representative of the petitioner in respect of 500 M/t of the said materials lying at Agarpara Works of M/s. Texmaco Limited (hereinafter referred to as the said materials ). Thereafter by a letter dt. 3rd Jan. , 1985 the respondent 2 directed the Chief Cashier, K. T. P. P. Mechada to refund the Earnest Money in respect of the parties mentioned therein as the said tender had been finalised and order placed with a different party. The name of the party in whose favour such order was placed was not disclosed. Accordingly the petitioner prayed for cancelling and/or withdrawing and/or revoking the impugned Memo No. K. T. P. P. RM dt. 3rd Jan. , 1985 and to cancel and/or rescind the impugned placing of order upon the respondent 4 or anybody else in respect of the materials mentioned in Annexure "a" to the petition, to accept tire offer of the petitioner being Annexure "b" to the petition and to deliver the said materials mentioned in Annexure "a" to the petition.
( 2 ) AN affidavit-in-opposition has been affirmed by one Babulal Pandia on behalf of the respondent 4 in the writ petition, that is, Texmaco. He has described himself as General Manager (Finance) of Texmaco Limited. The case sought to be made out by the Texmaco is as follows : a) On or about 27th April, 1977 the respondent 1 placed an order upon the respondent 4 for fabrication and erection of structural steel for the Kolaghat Thermal Power Project of the respondent 1 on the terms and conditions of the said order I craved leave to refer to a copy of the said order at the time of hearing of this application if necessary. By and under the terms and conditions of the said order it was, inter alia, stipulated as follows: (9) DEPARTMENTAL SUPPLY OF MATERIALS : cement and Steel may be issued from our stores at KIPP at the following issue rates: (A) Ordinary portland cement to required specification in non-returnable bags. (A) on bag basis, 290 per 20 bags. (B) on weight basis Rs. 300 per M/t including weight of bags. (B) Steel (tested to relevant specification) (i)5 mm to 7 mm dia in coil @ Rs. 3052 per M. T. (ii) M. S. Round/ets Rounds above 7 mm dia up to 60 mm dia. (excluding 60 mm dia) Rs. 2821/- per M/t. (iii) M. S. Plates @ Rs. 2, 570/- per M/t. (iv) joints, channels, Angles, Plates etc. Rs. 2, 666/- per M. T. For departmental materials issued to you by us you shall exercise resonable care for safety and any materials left surplus after execution of work including cut pieces (only which may be acceptable to site store) shall be taken back from you at the issue prices. For materials for fabrication and erection Cl. 11 supply of steel shall be applicable. 11. SUPPLY OF STEEL the supply or raw steel from our store will be guided as per available stock at site stores and as made available to you from other sources. You shall open fabrication shop at projec
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