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2005 Supreme(Cal) 469
High Court Of Calcutta
V. S. Sirpurkar, Joytosh Banerjee
BASANT KUMAR BUCHARIA - Appellant
Versus
CALCUTTA INDUSTRIAL SUPPLY CORPN. - Respondent
M. A. T. 2211 Of 2005
Decided On : 07/26/2005
A.BANERJEE, A.Gupta, A.K.SHAH, A.MITRA, Anindya Kumar Mitra, D.AGARWAL, KALYAN BANDOPADHYAY, M.Gupta, Mirak Mitra, P.Basu, P.CHATTERJEE, P.SINHA, R.N.JHUNJHUNWALA, Samaraditya Pal
Headnote:
TENDER - Rejection of Techno-Commercial Bid - Opening of Price Bid - Legality - Court's Interference in Commercial Contracts. FACTS: - DVC invited tenders for transportation of coal by road through a tender notice dated 7.5.2004. - CISC and Amrit Coal Carriers submitted their bids along with Bank Guarantees of Rs. 10 lacs each. - Bank Guarantees of all bidders were found to be not in order, and the time to furnish Bank Guarantees was extended to 30.9.2004. - CISC failed to furnish Bank Guarantee on 30.9.2004 but did so on the next day. - Techno-Commercial Bid of CISC was rejected by the Tender Committee on the opinion of the Law Officer that due to their misconduct in other contracts, their bid should not be accepted. - Price bids of three other bidders were opened on 1.11.2004, and Amrit Coal Carriers' bid was found to be the lowest. - CISC filed a writ petition challenging the non-opening of their price bid, and the Court directed the DVC to consider their price bid and defer the final decision till such consideration. - Amrit Coal Carriers filed a writ petition challenging the Court's order, and the Court dismissed the petition. - CISC appealed against the order rejecting their writ petition, and Amrit Coal Carriers appealed against the order allowing CISC's writ petition. ISSUE: - Whether the Court was justified in interfering with the commercial decision of the DVC to reject the Techno-Commercial Bid of CISC and not open their price bid. RATIO DECIDENDI: - The Court held that the order dated 9.11.2004 allowing CISC's writ petition was not sustainable and had to be set aside. - The Court found that the Techno-Commercial Bid of CISC was rejected by the Tender Committee on the opinion of the Law Officer, and this decision was not challenged by CISC in their writ petition. - The Court held that the learned Judge erred in relying upon the order dated 9.11.2004 as a binding order against Amrit Coal Carriers, who were not parties to the earlier writ petition. - The Court observed that the price bid of CISC could not have been opened since their Techno-Commercial bid was, in fact, not accepted. - The Court noted that the tender process was not complete and the contract had not been finalized with any of the parties, and it was for the DVC to find out its own ways to save public money. - The Court relied on the Supreme Court's decision in Air India Ltd. v. Cochin International Airport Ltd. and Ors., which held that the State and its agencies are bound to adhere to the norms, standards, and procedures laid down by them and cannot depart from them arbitrarily. FINAL DECISION: - The Court allowed both the appeals and set aside the order dated 9.11.2004, dismissing CISC's writ petition. - The Court directed that the writ petition filed by CISC be dismissed. - The Court allowed the writ petition filed by Amrit Coal Carriers to the extent indicated in the judgment. - The Court granted a stay of one week on the operation of the judgment to enable the respondents to approach the Supreme Court. MAIN LEGAL POINT: - The Court cannot interfere with a commercial decision of the State or its agencies unless it is arbitrary or in violation of the norms, standards, and procedures laid down by them. CATEGORY: Contract SUB-CATEGORY: Tender
( 1 ) THIS Judgment shall dispose of two Appeals, they being MAT No. 2143 of 2005 and MAT No 2211 of 2005. Appeal No. 2211 of 2005 is against the Judgment of the learned single Judge dated 9. 11. 2004 in W. P. No. 20449 (W) of 2004. The learned single Judge by that Judgment had allowed the writ petition filed by the two petitioner, namely, Calcutta Industrial Supply Corporation ('cisc' for short) and its partner Shri Narayan Prasad Agarwal. By that it was directed that the second part of the petitioners' tender should be considered and till such time, the final decision regarding the issue of tender order should be deferred till such time. The writ appeal No. MAT 2143 of 2005 is against the Judgment of the learned single Judge dismissing the Writ petition No. 5953 (W) of 2005 filed by the applicant Basant Kumar bucharia in his capacity as a Proprietor of M/s. Amrit Coal Carriers, a proprietory concern. Both the appeals invoke a common subject of a tender floated by the Damodar Valley Corporation (hereinafter called 'dvc' for short ). The said DVC invited offers by floating notice dated 7. 5. 2004 by way of the Tender whereby bids were invited from the prospective bidders for transportation of coal from various coal colleries to DTPS which is a unit of the DVC at Durgapur. by road. It, inter alia. provided by way of Clause 3. 2 that the sealed tender Part I-Technical commercial and Earnest Money and Part II-Price Bid would be received by the Superintendent Engineer (Technical) DVC, DTPS upto 11. 30 A. M on 16. 7. 2004. The Part I. namely. Technical and Commercial Bid along with Earnest Money was to be opened on the same day at 12-00 noon. The price bid was to be opened only for the bidders whose Technical and Commercial Bid was accepted and the subsequent date to be intimated later on. This datewas later on extended upto 22. 7. 2004 and 23. 7. 2004. It was further extended upto 4. 8. 2004 and 5. 8. 2004. Accordingly on 4. 8. 2004, the prospective bidders including the Amrit coal Carriers and CISC submitted their respective bids. Each bidder had to furnish a Bank Guarantee of Rs. 10 lacs on account of earnest money as per the notice of tender. On 5. 8. 2004 Part I of the tender comprising of Techno Commercial Bid and the Earnest Money was opened in presence of six bidders by the DVC. This included the bids by the Amrit Coal Carriers and the CISC also. However, it was found that the Bank Guarantee of all the bidders were not in order and consequently the respondent DVC extended the time to furnish Bank guarantee to 30. 9. 2004. On 30. 9. 2004 all the bidders except the CISC resubmitted the Bank Guarantee of Rs. 10 lacs in favour of the respondent DVC. The CISC admittedly did not furnish the Bank guarantee on that date. Some bidders including the Amrit Coal Carriers were informed by letters by the DVC that the Techno Commercial Bid was accepted by them and the Amrit Coal Carriers was further intimated that the price bid would be opened on 1. 11. 2004 at 10. 30 A. M. Such a letter went to two other bidders, but not to CISC. On 1. 11. 2004, the price bids of the three bidders were opened, they being the Amrit coal Carriers, M/s. B. K. B. Transport (P) Ltd. and M/s. Balaji Mining and minerals in presence of all the three bidders and it was found that the rate quoted by the Amrit Coal Carriers was the lowest.
( 2 ) THE CISC moved a writ petition before the learned single Judge of this Court being Writ Petition No. 20449 (W) of 2004. In that writ petition, in all the three respondents were joined as the parties, they being the DVC, the Chief Engineer, DTPS and the Superintending engineer (Technical), DTPS, DVC, Durgapur. In that writ petition, it was complained by the CISC that they were not allowed to take part in the tender process meaning thereby that their price bids were not opened perhaps on the ground that they had offered their Bank guarantee late by one day. The other bidders whose Techno commercial Bi
