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2015 Supreme(Del) 470

HIGH COURT OF DELHI
G. ROHINI AND RAJIV SAHAI ENDLAW, JJ.
Delite Hi-Tech Furniture Industries Pvt. Ltd. & Others – Appellants
Versus
Union of India & Others – Respondents
W.P.(C) Nos. 7498, 7506, 7510 of 2014 & CM Nos. 17749, 17760, 17766 of 2014
Decided On : 24-03-2015

Advocate Appeared:
For the Petitioner:S.K. Sharma, Rahul Sharma, Archit Vasudev, Prayas Aneja, Puneet Relan, Advocates
For the Respondents:Sanjay Jain, ASG with Amit Mahajan, CGSC for UOI, R3, Arvind P. Datar, Sr. Adv. with Surekha Raman, Anuj Sharma, Advocates

Headnote:

General Financial Rules, 2005 - Rule 141, 144, 154 - Tender Enquiry - Rate contract - Tender Enquiry violation of procedure - Tender enquiry quashed - Tender Enquiry were reserved for Micro, Small & Medium Enterprises / Small Scale Industries sector - Furniture items however continue to remain reserved for Small Scale Industries - Godrej has been favoured and given an undue advantage by entering into a Rate Contract with it for items manufactured and supplied by a number of other suppliers and without any justification for preferring the Godrej brand - Once, open tendering has been emphasized, anything done to come in the way of said open tendering will necessarily invite suspicion - Held, procedure prescribed for entering into Rate Contract has not been followed - Impugned Tender Enquiry and the Rate Contract are not in accordance with the Purchase Policy to procure stores on a competitive basis at the lowest reasonable price and as per the Guidelines of the General Financial Rules. - Rate Contract was concluded with Godrej - No opportunity was given to any supplier other than Godrej for entering into the Rate Contract - Subject Rate Contract is in force and purchases thereunder, to the prejudice of the petitioners, are possible day by day and it cannot be said that the grievance of the petitioners with respect thereto is stale - Impugned Tender Enquiry and the Rate Contract to be violative of DGS&D's own Manual and illegal and void - Same is removed from the website and this decision be communicated to all concerned to ensure that no purchases in pursuance to the said Rate Contract are made by any user department - Secretary, Ministry of Finance, Department of Expenditure is directed to conduct an enquiry into the placing of the subject Tender Enquiry and entering into the subject Rate Contract.

JUDGMENT:-

Rajiv Sahai Endlaw, J.

1. The challenge in these petitions is to the Tender Enquiry No. GIOF/HW-3/RC-H7010000/1214/43 dated 27th December, 2013 issued by the respondent no.2 Directorate General of Supplies & Disposals (DGS&D) and also to the consequent Rate Contract dated 1st January, 2014/28th January, 2014 entered into by the DGS&D with respondent no.3 Godrej and Boyce Manufacturing Co. Ltd. (Godrej) for supply of Godrej Interio Office Furniture. The said Tender Enquiry was as under:-

S. No.

TENDER ENQUIRY NO.

DESCRIPTION OF STORES

DTE

DUE TO OPEN & TIME

PRICE OF TENDER SET

2

GIOF/HW-3/RC-H 7010000/ 1214/43

1. Jefferson Presidential Suite. 2. Viva 3. Elan Veneer Desk 4.Elan Veneer ERU 5. Elan Veneer Credenza 6. Elan Laminate Main Desk 7. Elan Laminate ERU 8. Elan Laminate Credenza 9. WT Series 10. Unitised Tables 11. Encarta Conference Table 12. Greenguard Certified Scholar 13. Regency Series 14. Kubix series 15. Economy Executive Chairs 16. 7031/7032 17. Classic Range 18. Storage Range 19. Optimizer with 381 depth 20. Optimizer with 457 depth 21. Smart Opos Modules 22. Halo Series

HW

27.12.2013 03:00 PM

Rs.5000

2. It is the contention of the petitioners:- (i) that majority of the items mentioned in the said Tender Enquiry were reserved for Micro, Small & Medium Enterprises/Small Scale Industries sector and were vide Note dated 16th December, 2013 i.e. shortly before the aforesaid Tender Enquiry, taken out of the reserved category leaving only six items in the reserved category; furniture items however continue to remain reserved for Small Scale Industries (SSI) and the aforesaid Tender Enquiry in so far as qua furniture items is in violation of the DGS&D Manual; (ii) that the Note dated 16th December, 2013 was circulated to different departments of DGS&D only on 15th January, 2014 i.e. after the Tender Enquiry and after entering into the Rate Contract dated 1st January, 2014 with Godrej; (iii) that DGS&D, by including “GIOF” in the Tender Enquiry and which stands for “Godrej Interio Office Furniture” restricted the tender to only items of Godrej brand; (iv) the aforesaid was thus a single party tender and was floated on 27th December, 2013 with date and time of opening thereof at 1500 hours on the same day; (v) shortly thereafter, on 1st January, 2014, in pursuance thereto Rate Contract valid for 24 months with the provision for revision of price after 12 months was entered into with the respondent No.3 (and which was amended on 28th January, 2014); (vi) that the practice of calling such single brand quotations has repeatedly been deprecated by the various Government departments themselves; (vii) that most of the items mentioned in the Tender Enquiry aforesaid are furniture items manufactured by several well known companies and the Tender Enquiry specifying the brand was floated to favour Godrej; and, (viii) award of single party Rate Contract is monopolistic, against public policy and against the basic principles of transparency.

The petitions were accompanied with an application for interim relief for restraining the respondents from making any purchase/supply under the Rate Contract aforesaid.

3. Notice of the petitions as well as applications for interim relief was issued. Counter affidavits have been filed on behalf of Union of India (UOI)/DGS&D as well as by Godrej. Rejoinders thereto have been filed by the petitioners. We heard the counsel for the petitioners, learned ASG for UOI/DGS&D and the senior counsel for the respondent no.3 and reserved judgment.

4. It is the defence of the UOI/DGS&D, (i) Rate Contract is an agreement to supply stores at specified price during the period thereof; no quantities are mentioned in the Rate Contract and there is no obligation to purchase any minimum quantity; it is in the nature of standing offer f



































































































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