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2003 Supreme(Gau) 367
GAUHATI HIGH COURT
I. A. ANSARI, J.
Sargous Tours and Travels and another -Appellant
Versus
Union of India and others -Resopndent
W.P. (C) No. 2065 of 2003
Decided On : 14-08-2003
N. Dutta, Sr. Advocate, Ms. B. Bhuyan, S. Bhattacharyya, Addl. Central Govt. Standing Counsel; K. N. Choudhury, Sr. Advocate
The main legal point established in the judgment is that the tender process must be transparent, fair, and open. The NIT must disclose the procedure for accepting tenders, and negotiation with the lowest tenderer is mandatory if the rates quoted are lower than the Reasonable Rates (RR). The judgment emphasized the importance of following the law laid down in the Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd. case.
Headnote:
Tender Process - Transparency and Fairness - IAFZ-2137, Para 74, CVC Letters - The court held that the tender process must be transparent, fair, and open. The NIT must disclose the procedure for accepting tenders. The court referred to IAFZ-2137, Para 74, and CVC letters, emphasizing the requirement for negotiation with the lowest tenderer if the rates quoted are lower than the Reasonable Rates (RR). The court also highlighted the importance of transparency and fairness in the tender process, citing the Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd. case. The judgment set aside the impugned Acceptance of Tender Notes and directed the authorities to float fresh tenders, bearing in mind the observations made in the judgment.
Fact of the Case:
The petitioners, a company dealing with supply of vehicles, participated in a tender process for supply of taxies and buses. Despite quoting the lowest rates, the authorities did not issue Acceptance of Tender in their favor for certain works, instead allotting the works to other parties with higher rates. The petitioners approached the court seeking to set aside the impugned Acceptance of Tender Note and quash the allotment of work in favor of the other parties.
Finding of the Court:
The court found that the tender process lacked transparency and fairness as the NIT did not disclose the procedure for accepting tenders. The court held that the rejection of the petitioners' tenders based on rates lower than the Reasonable Rates (RR) without negotiation was against the law. The court set aside the impugned Acceptance of Tender Notes and directed the authorities to float fresh tenders, emphasizing the need for transparency and fairness in the tender process.
Issues: The issues involved in the case included the lack of transparency and fairness in the tender process, the rejection of the petitioners' tenders without negotiation, and the violation of the procedure for accepting tenders as per the NIT.
Ratio Decidendi: The key legal principle established in the judgment is that the tender process must be transparent, fair, and open. The NIT must disclose the procedure for accepting tenders, and negotiation with the lowest tenderer is mandatory if the rates quoted are lower than the Reasonable Rates (RR). The court emphasized the importance of following the law laid down in the Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd. case, which requires the procedure for accepting tenders to be clearly stated in the tender notice.
Final Decision: The petition was allowed, and the impugned Acceptance of Tender Notes and work orders were set aside and quashed. The authorities were directed to float fresh tenders, bearing in mind the observations made in the judgment. The interim arrangements made by the authorities in respect of certain items were allowed to continue until the fresh tenders were finalized.
In a State, which is governed by rule of law, every tender process set in motion by the State or its instrumentalities should undoubtedly, be transparent, fairand open. Can a tender process, which does not notify the procedure, which will be followed for acceptance or rejection of tenders, be described or treated as transparent, fair and open and if such a grievance is brought before the writ Court, should the writ Court interfere, are the questions, which have been raised in the present writ application.
2. In a nut-shell, the case of the petitioners may be described as follows :
The petitioner No. 1 is a company dealing with supply of vehicles, such as, trucks, buses and taxis and is registered as a transporter under the Head Quarters Eastern Command, Fortwilliam, Kolkata. The petitioner No. 2 is the sole proprietor of petitioner No. 1. A notice inviting tender (NIT), dated 28-12-2002, was issued by the Brigadier DDST Head Quarters Area, 101 Area, Shillong, for supply of various taxies and buses for the period commencing from 1-4-03 to 31-3-04 to various destinations. In accordance with the requirements of the NIT, the petitioner No. 2 submitted his tender in the name of petitioner No. 1 along with all requisite documents and earnest money. In pursuance of the NIT, the petitioner No. 2 was invited to participate in the open tender process to be held on 3-3-03. In all the items in which the petitioners participated, the petitioners had quoted lowest rates, but the respondent-authorities did not issue Acceptance of Tender in favour of the petitioners for the works mentioned at Sl. Nos. 26 (ABSD, Ghy to SP Hatigarh CHT), 43 (Ghy. to Narangi-local duty) and 44, (Ghy. to Shillong - Jorhat - Tezpur Michamari - Dimapur - Rangia - Tenga - Silchar CHT) the petitioners having, however, been allotted the work as mentioned at Sl. Nos. 23 (FCI Ghy. to CHT ABSD) and 42 (ABSD, Ghy, Narangi - Basistha - Rly. Staion and back CHT). Since the petitioners were the lowest bidder in respect of item Nos. 26, 43 and 44, the petitioners ought to have been, in terms of the requirement of para 8 of the NIT, invited for negotiation, but instead thereof, the works were allotted in favour of private respondent Nos. 5 and 6 violating, thus, the procedural norms set by the respondent-authorities themselves. The respondent-authorities issued Acceptance of Tender Note, dated 12-3-2003, in favour of private respondent Nos. 5 and 6 in respect of items aforementioned, though their rates were higher than those of the petitioners in all respects. Such action on the part of the respondent-authorities is illegal, arbitrary, unfair, unreasonable, capricious and against the principles of natural justice. The petitioners have been carrying on the work of supply of vehicles as mentioned hereinbefore to the fullest satisfaction of the authorities concerned. Thus, the exercise of the power by the respondent-authorities is on extraneous considerations and contrary to the factors governing the public interest and public welfare. The exercise of power is, thus, colourable in nature. The petitioners have, therefore, approached this Court seeking issuance of appropriate writ or writs setting aside and quashing the impugned Acceptance of Tender Note, dated 12-3-2003, aforementioned and commanding the official-respondents to issue allotment of work, in question, in favour of the petitioners.
3. The respondent-authorities, namely, respondents Nos. 1 to 4, have resisted the reliefs as sought for by the petitioners, the case of these respondents being, briefly stated, thus : The Army-authorities conclude contracts for supply of civil hired transport mainly taxies, buses and load carriers on annual basis from amongst contractors, whose names appear in the list of approved contractors maintained by the Head Quarters Eastern Command (Supply and Transport Branch), Kolkata. These contracts are concluded by open tendering by the Deputy Director of Supply and Transport (i.e., DDST
