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2007 Supreme(Gau) 468
IN THE HIGH COURT OF GAUHATI
Biplab Kumar Sharma, J.
P. Kumar and Associates - Appellants
Vs.
Steel Authority of India Ltd. and Ors. - Respondent
Decided on : 18.07.2007
The court emphasized the importance of clarity in the petitioner's identity and upheld the validity of the tender processes in accordance with the Central Vigilance Commission guidelines.
Headnote:
TENDER PROCESS - CHALLENGE - INDIAN PARTNERSHIP ACT, 1932 - 6.7.1, 6.7.2, 6.7.3 - The court discussed the challenge to the tender process initiated by the authority, the eligibility of the tenderers, and the cancellation of the tender process. The key legal provisions discussed were clauses 6.7.1, 6.7.2, and 6.7.3 of the instruction to the tender, which outlined the basis for placing orders, justifying quoted prices, and consequences of failure to perform as per the contract on unworkable rates.
Fact of the Case:
The petitioner challenged the cancellation of the tender process and initiation of a fresh tender process by the authority. The petitioner claimed to be the lone valid contender with workable rates and sought a direction to initiate and complete the re-tendering process within a specific time frame.
Finding of the Court:
The court found that the petitioner's identity was unclear and inconsistent between the two writ petitions. The court dismissed the writ petitions, emphasizing that the first tender process was canceled on valid grounds as per the Central Vigilance Commission guidelines, and the petitioner did not participate in the fresh tender process.
Issues: Identity of the petitioner, challenge to cancellation of tender process, initiation of fresh tender process, eligibility of tenderers, and maintainability of the writ petitions.
Ratio Decidendi: The court held that the petitioner's inconsistent identity and failure to participate in the fresh tender process precluded the challenge to the validity of the same. The cancellation of the first tender process was found to be in accordance with the Central Vigilance Commission guidelines.
Final Decision: The writ petitions were dismissed without any order as to costs.
B.K. Sharma, J.
1. While in the first writ petition, the petitioner has challenged the particular tender notice initiated and processed, in the second writ petition, the challenge made is the fresh tender process initiated by the authority, upon cancellation of the earlier one. The petitioner in both the writ petitions is one and the same. Both the writ petitions have been heard together and are being disposed of by this common judgment and order.
2. In the first writ petition, the petitioner has described itself as a partnership firm registered under the Indian Partnership Act, 1932, but in the second writ petition it has described itself as a proprietorship concern.
3. The petitioner, in response to the notice inviting tender (NIT), from resourceful persons, firms and companies, for operating a consignment agency yard at Guwahati submitted its tender. The scope of the work involved transportation, handling and storage of iron and steel materials and the tenure of the contract was for a period of 4½ years. The tender comprised of two parts, the first part being Techno-Commercial Bid and the second part being Price Bid. The tender was to be submitted in two separate sealed covers in respect of the said two parts. The relevant clauses of the instruction to the NTT on which the petitioner has put emphasis are quoted below:
6.7.1 Order in the contract will be placed on the basis of L-1 quotation, if required, negotiations will be held with L-1 tenderer only, however, the L-1 tenderer may be required to explain/justify the basis of their quoted price as and when asked for. In case the tenderer fails to justify his quoted price or refuses to cooperate in this regard, they will not be considered for participating in the re-tendering if contract is not finalized from the present tender.
6.7.2 If a tenderer quotes unworkable rates i.e. if the quoted price is less then the Lower Limit of the estimated price (Determined internally by the Company) and is considered for placement of order, the party will be asked to justify the rate quoted.
6.7.3. Incase, any tenderer fails to perform as per the contract on the lower then workable rates, the tender will be liable to be closed with due notice. Further, they will not be considered for participating in the re-tendering if the contract does not run for the tenure for which the same is awarded to the present tenderer.
4. Apart from the petitioner, there were 6 other tenders including that of the respondents No. 2 and 3. After opening of the technical bids and evaluation of the same, the tender committee found the said two respondents alongwith the petitioner eligible for the price bid. Accordingly, by letter dated 14.8.2006, the petitioner was informed of the time and venue of the opening of the second part of the tender i.e. price bid and requested the petitioner to be present. Upon opening of the bids, the following position emerged:
CA GUWAHATI RATES OPENED
ON 18.08.06AT 11A.M.AT
JEEVANSUDHA KOLKATA
Party Name By Rail
73.000 MT By Road
18,000 MT Net Amount Remark
P. Kumar Rs. 227/-
per MT Rs. 63/-
per MT
INDO
ISPAT Rs. 74/-
Per MT Rs. 38/-
per MT
EURO
STRIPS Rs. 92/-
per MT Rs. 47/-
per MT
5. The price bid of the respondent No. 2 M/s. Indo Ispat Private Limited, was the lowest and the respondent authority by its letter dated 19.8.2006 requested it to justify the rates quoted and also to extend the validity of the offer till 25.9.2006. However, the respondent No. 2 having not done so, the respondent authority by its letter dated 24.8.2006 communicated its decision to cancel the tender with further intimation that the respondent No. 2 upon its deliberate failure to submit justification of rates quoted by it would not be allowed to participate in re-tendering process to be initiated. In this connection Clause 6.7.1 of the instruction to the tender was referred to.
6. According to the petitioner, the rates quoted by both the respondents No. 2 and 3 were unworkable and the respondent authority rightly a
