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2007 Supreme(Mad) 1433
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE A. KULASEKARAN
S. Santhakumar
Versus
The Director Municipal Administration Chennai & Others
W.P. No.6669 of 2007 and M.P. Nos.1 and 2 of 2007
Decided On : 24-04-2007
For the Petitioner:G. Thilakavathi, Advocate. For the Respondents:R1, I. Paranthamen Government Advocate, R2 & 3, Raja Kalifullah Government Pleader, R6 to 9, Jermiah, Advocate.
The authority has the discretion to reject tenders and choose a tenderer based on past performance, as long as it does not violate constitutional rights or act unfairly.
Headnote:
Tender Rejection - Municipal Contract - [State of U.P vs. Vijay Bahadur Singh and others, Ram and Shyam Company vs. State of Haryana and others, Trilochan Mishra vs. State of Orissa and others] - The court discussed the authority's right to reject tenders, the violation of Article 14 of the Constitution, and the authority's discretion to choose a tenderer based on past performance.
Fact of the Case:
The petitioner participated in a tender for electrical works, but the municipality rejected the tender and decided to re-tender based on the petitioner's past failure to complete a construction project.
Finding of the Court:
The court found that the municipality had the right to reject the petitioner's tender based on past performance and upheld the decision to re-tender the contract.
Issues: The issues revolved around the rejection of the petitioner's tender, the municipality's discretion in choosing a tenderer, and the validity of the decision to re-tender.
Ratio Decidendi: The court held that the authority has the right to reject tenders and choose a tenderer based on past performance, as long as it does not violate Article 14 of the Constitution or act arbitrarily or unreasonably.
Final Decision: The writ petition was dismissed, and no costs were awarded. Connected miscellaneous petitions were closed.
This writ petition is listed today for admission and I heard the counsel for both sides.
2. The prayer in this Writ Petition is for a Writ of Certiorarified Mandamus calling for the records pertaining to the resolution of the third respondents meeting notice dated 16.02.2007 with reference to item No.(8) relating to Sl.Nos. (3) and (4) work of the re-tender notification dated 02.02.2007 and quash the same and consequently confirm the tender contract to the petitioner with reference to Sl.Nos. (3) and (4) work and issue work order.
3. The case of the petitioner is that the second respondent/municipality invited sealed tenders for erection of electrical panel board for 120 H.P. strength as part of the Part-II scheme for 2006-2007 relating to electrification of the rural area and also for supply and delivery of 15 H.P. Centrifugal Mono Block Motor Pumpset, which are mentioned as serial Nos. 3 and 4 respectively in the sealed tenders. In so far as serial No.3 is concerned, along with the petitioner, four other persons have submitted their tenders and in serial No.4, along with the petitioner, two other persons have submitted their tenders. According to the petitioner, the respondents, in total deviation of the procedures contemplated, at the instance of the third respondent, opened the petitioners tender with ulterior motive and thereafter permitted the other participants to withdraw their offer so as to non-suit the petitioner, as he quoted 5% lesser than the estimated cost of the municipality for the said works. When the above said illegalities were brought to the notice of the second respondent, he ignored it and proceed to pass a resolution on the scheduled date of meeting namely 19.02.2007 and resolution No.8 was passed on that day.
4. The case of the respondents 2 and 3 is that on earlier occasion, for construction of public toilet under Vambay Scheme, work was entrusted to the petitioner, but he failed to even commence the work, hence, the municipality was forced to carry out the said work; that the municipality issued notification for four works on 212. 2006 calling for tenders on 31.01.2007 but nobody purchased the tender schedule, hence, re-tender was called for on 02.02.2007; that the petitioner purchased tender schedules for works in respect of item Nos. 3 and 4 of the said re-tender notification dated 02.02.2007 along with other persons. The other persons participated in the tender withdrew their tenders within the allowed time before opening the tenders. The petitioner alone stood, hence, the matter was placed before the Municipal Council to decide in the ordinary council meeting to be held on 19.02.2007 as to whether the offer made by a single person could be accepted. The said subject matter was included in the agenda for the said meeting and circulated to the councilors on 16.02.2007. The averment that only after opening of the petitioners tender, the other tenderers were allowed to withdrew their offers is incorrect. The municipal council, in their meeting held on 19.02.2007 decided not to accept the sole tender of the petitioner, besides that it considered the past incident that the petitioner has not completed the work assigned to him under Vambay Scheme. The re-tender for the scheme was called for fixing the date for purchase of the tender schedules as 08.03.2007 and opened on 09.03.2007 as per the Rules, work was entrusted to the successful tenderer who has almost completed the work.
5. Mrs. Thilagavathi, learned counsel appearing for the petitioner submitted that to nonsuit the petitioner, the other tenderers were allowed to withdrew their offer after opening of the petitioners tender; that when other participants withdrew their offer, the second respondent is duty bound to accept the offer made by the petitioner, hence, the resolution passed by the municipal council, rejecting the petitioners tender and deciding to go for re-tender is unsustainable in law; that the second and third responden
