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1999 Supreme(J&K) 259
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
G.D. Sharma, J.
State Of J&K - Appellant
Versus
Qazi Nazi Ahmad - Respondent
Civil Revision Petition No. 76/1999
Decided On : 06 October, 1999
Advocate For Appellant: Muzaffar Hussain Attar
Advocate For Respondent: Altaf Haqani
The Government has the authority to reject a tender, even the highest bid, if there are cogent reasons to do so. The power to reject tenders cannot be exercised arbitrarily.
Headnote:
TENDER - REJECTION - POWER OF GOVERNMENT - JUDICIAL REVIEW - ARBITRARINESS - CAUSE OF ACTION - INJUNCTION - JURISDICTION - REVISION - INHERENT POWERS - MISCONDUCT OF PUBLIC SERVANT - ADMINISTRATIVE ACTION.
Fact of the Case:
Petitioner No. 2 (predecessor) invited tenders for the supply of empty gunny bags. The tenders were opened before the prescribed time and in the absence of one of the members of the Committee. The Government re-tendered the sale with added quantity of empty bags. The respondent, who was the highest bidder in the first tender, filed a suit seeking a declaration that the petitioners were under legal obligation to issue a formal order of allotment for the sale of the bags and an injunction restraining the petitioners from re-tendering the sale. The trial court granted an injunction, which was upheld by the appellate court.
Finding of the Court:
The Government has the authority to reject a tender, even the highest bid, if there are cogent reasons to do so. The power to reject tenders cannot be exercised arbitrarily. The respondent had no vested right to have his tender accepted. The Government's decision to re-tender the sale was not arbitrary but judicious and directed to increase the financial interests of the State. The trial court and the appellate court erred in exercising jurisdiction which was not vested in them by law.
Issues: 1. Whether the Government has the authority to reject a tender, even the highest bid? 2. Whether the Government's decision to re-tender the sale was arbitrary? 3. Whether the trial court and the appellate court erred in exercising jurisdiction which was not vested in them by law?
Ratio Decidendi: 1. The Government has the authority to reject a tender, even the highest bid, if there are cogent reasons to do so. The power to reject tenders cannot be exercised arbitrarily. 2. The Government's decision to re-tender the sale was not arbitrary but judicious and directed to increase the financial interests of the State. 3. The trial court and the appellate court erred in exercising jurisdiction which was not vested in them by law.
Final Decision: The revision petition is accepted. The impugned order dated 8-4-1998 passed by the appellate Court as well as the order dated 9-10-1998 passed by the trial Court are set aside. The plaint is found not disclosing any cause of action, therefore under Order 7, Rule 11, CPC, it stands rejected. Petitioners are directed to proceed ahead with re-tendering of the empty gunny bags in terms of Annexure P-7 with utmost despatch and promptitude. Respondent to bear the costs quantified at rupees three thousand to be paid in the Advocate Welfare Fund.
2. The factual matrix of the case is that on25-5-1998, petitioner No. 2 (predecessor) invited the tenders for the supply of empty gunny bags of the year 1998-99. In terms of the notice of tender, only the registered firms/ contractors could take part of in the sale of empty bags which numbered 43,43,001. They were of different categories and lying in various godowns of the Food and Supplies Department. An approved tenders had to lift the bags from respective places. Earnest money of Rs. 10.00.000/- (rupees ten lakhs) in the shape of FDR. CDR drawn on any scheduled bank pledged to petitioner No. 2 had to accompany the tender documents. Every tender was required to reach the office of petitioner No. 2 on or before 9-7-1998 upto 2 pm. either by registered post or by personal delivery accompanied by above stated earnest money. Vide order No. DESK/ Adm./GS/50/98-99 dated 8-7-1998. petitioner No. 2 extended the time for the acceptance of the tender notice upto July 20,1999 at 3 pm. It Is alleged that the tenders were opened on July 20, 1998 at 2.10pm. instead of stipulated time of 3 pm. when all the members of the Purchase Committee were not present. Tender documents of M/s Friends Traders, Shuthrashi, Srinagar and M/s. Jammu Cantonment, whole sale and General Store Ltd., Jammu were rejected being incomplete. Only four tenders were found eligible. The particulars whereof along with quoted rates by them are given below:
1. Qazi Nazir Ahmad Rs. 1064/- per 100 bags.
2. M/s. Punjab Land Rs, 1057/- per 100 Private Ltd. Chabal bags. Road, Tarantaran, Amritsar, Punjab.
3. M/s. G. S. Traders, Rs. 1046/- per 100 Mandir Road, Kapoor- bags. thala, Punjab.
4. M/s. Lariba Enter- Rs. 1046/- per 100 prises Goal Market, bags. Karan nagar, Srinagar
On 20-7-1998, one of the tenderers firm namely, Punjab Rice Land Private Limited made a complaint (vide Annexure P4) to the Secretary-cum-Commissioner to the Government of J. and K. Food Supplies and Transport Deptt. making allegation of fraud as tenders had been opened before schedule time. Similar complaint was made on 21-7-1998 (vide Annexure P4) by tenderer G.S. Traders to the Chief Secretary, J. and K. Govt. in both these complaints it was alleged that by this fraudulent conduct, loss to the tune of crores of rupees was caused to the state exchequer. Both of them had made the offers to increase the rates of quotations. Specific allegation was made that respondent was the beneficiary of such fraudulent conduct as tender was accepted in his favour by filing the quotations clandestinely at the back of other tenders.
3. The Government took a fresh decision to sell increased number of bags numbering 56,14,329 of different categories. The Financial Advisor and CAO, Food, Supplies and Transport Department wrote to petitioner No. 2 vide No. FS/Accounts/ E-Bags/ 96-97 dated 25-8-1998. In response to above communication petitioner No. 2 issued an abbreviated tender notice (Annexure P71 wherein the sale of empty gunny bags numbering 56,14,329 of different categories was shown and they were to be lifted by the approved tenderer from the places where they were lying. The tenders complete in all respects were required to reach the office of petitioner No. 2 on or before 15-10-1998 upto 2 pm. by registered post or to be delivered personally and every tender was required to accompany earnest money of rupees fourteen lakhs in the shape of CDR, FDR drawn on any schedule bank pledged to Director, Food and Supplies, Kashmir. The" tender notice was issued on 29-8-1998.
4. Aggrieved by the issuance of this abbreviated tender notice (Annnexure P-7) on 25-8-1998, the responden
