Government contracts are to be awarded by public auction/public tender.

(Writ petition filed under Article 226 of the Constitution of India praying for a writ of certiorarified mandamus as stated therein.)

By consent of both sides, the writ petition itself is taken up for final disposal.

2. The prayer in the writ petition is for issuance of a writ of certiorarified mandamus calling for the records of the first respondent relating to the short term Re-tender Notice in Na.Ka.No.8802/2005/A3 dated 31.03.2006 and quash the same and consequently direct the first respondent to award the tender to the petitioner pursuant to the tender notice in Na.Ka.No.8802/2005/A3 dated 27.03.2006 in respect of collecting charges in the "Mettur Camp Daily Market".

3. The case of the petitioner, in brief, is as follows:

a. The first respondent (Municipality) issued a tender notice dated 02.01.2006 in respect of various rights, including collection of fees in Mettur Camp Daily Market for the period from 01.04.2006 to 31.03.2007 as per the resolution no.443 dated 28.12.2005. As there was no participant in the tender, fresh tender notices were issued on 07.02.2006 and 23.02.2006 and since the third tender notice also did not evoke any response from the bidders, the fourth tender notice was issued on 20.03.2006 for which, the bids were very low and thereafter, the Municipality finally issued a short term final re-tender notice dated 27.03.2006 in proceedings in Na.Ka.No.8802/2005/A3. The petitioner participated in the tender process and was successful in the bid and she remitted a sum of Rs.3 lakhs being the Earnest Money Deposit and Rs.5,60,501/- being the half of the bid amount of Rs.11,21,001/- which have been duly acknowledged by the Municipality. The only stage which remained was the allotment of tender rights by the first respondent to the petitioner. That being the position, the petitioner was shocked to see a fresh re-tender notice dated 31.03.2006 and that too on the same day on which she made the payment of the EMD and also half of the bid amount.

4. Aggrieved by this action of the Municipality, the petitioner has filed the present writ petition and her main grounds of challenge are that:

a. the fresh re-tender notice is ex-facie illegal as the first respondent, having accepted the Earnest Money Deposit and half of the bid amount, the Municipality cannot issue tender notices one after another.

b. the Municipality had not offered any explanation for cancellation of the tender in which the petitioner was a successful bidder

c. the action of the Municipality in issuing tender notices one after another is marked by non-application of mind particularly when no reason has been given for such action.

5. This Court, by order dated 05.04.2006, on consideration of the case of the petitioner, granted interim stay of auction in respect of Item No.2 of the impugned tender notice dated 31.03.2006 for a period of two weeks and ordered notice to the respondents and the same was extended on 28.04.2006 till 12.06.2006 and on 30.06.2006, the order of stay was once again extended upto 05.07.2006.

6. On the other hand, the Municipality has filed its counter along with Vacate Stay Petition and its case is as follows:

a. the Municipal Council of Mettur Municipality, vide its Resolution No.443 dated 28.12.2005, decided to grant licence for 2006-2007 for the properties belonging to the Municipality based on which, publications were issued for grant of licence through tender-cum-public auction to collect fee at Mettur Camp Daily Market and 13 other items on 02.01.2006 wherein it was clearly mentioned that sealed tenders would be accepted till 11 a.m. on 07.02.2006 and public auction would be held in respect of all items at 11.30 a.m. Since nobody participated in the auction and no tender form was received, a notification was issued on 07.02.2006 for re-auction to be conducted on 23.02.2006 and one Eswari alone submitted the tender form quoting Rs.7,21,009/- in respect of Mettur Camp Daily Market which was lower than that of the previous