ORDER
1. The order of the Court was delivered by C.P. Sen. J. -- By this Order Misc. Petition Nos. 516. 517, 518, 522, 523. 561, 570, 575, 592, 593. 727, 728, 741. 745, 781, 783, 801, 837 and 878, all of 1988, are also disposed of as similar questions are involved and all these petitions were heard together. The petitioners are aggrieved by rejection of their tenders and want to challenge the same as being arbitrary and discriminatory.
2. The M. P. Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964, was enacted to make provision for regulating in the public interest the trade of Tendu leaves by creation of State monopoly in such trade. Tendu trees are in abundance in the State and Tendu leaves are natural growth. There is a fresh flush of Tendu leaves in each year from April and new and better crop can be obtained by process of pruning to be completed by 15th March. Under Section 4(1) of the Adhiniyam, the State Government has been empowered to appoint agents for the purpose of purchase of, and trade in, tendu leaves on its behalf in respect of different units as per terms and conditions that may be prescribed. Under Section 12, tendu leaves purchased by the State Government or by its officer or agent shall be sold or otherwise disposed of in such manner as the State Government may direct. To carry out the provisions of the Act, the State Government has framed M. P. Tendu Patta (Vyapar Viniyaman) Niyamavali, 1966. Rule 3 prescribes the procedure for appointment of agents by inviting applications. The M. P. State Minor Forest ProduceTrading and Development Corporation (M.P. Rajya Laghu Vanopaj (Vyapar Evam Vikas)Sahakari Sangh Maryadit) (hereinafterreferred to as the Sangh) is a co-operativesociety and is wholly controlled and managedby the State Government through its Boardnominated by the State Government andmanned by its officers sent on deputationand financed by public institutions. The policyto be followed by the Sangh for conductingbusiness has been laid down by the StateGovernment and it is an agency orinstrumentality of the State. The State hasappointed the Sangh as its agent under Section4 (1) for several districts for collection oftendu leaves and it has also been appointedas agent for selling tendu leaves. For theservices rendered by the Sangh, it gets 2 percent commission on the net proceeds of sale;the balance amount is remitted to the StateGovernment. For the season of the year 1988,the State has constituted 1389 units out ofwhich 980 units spread over 21 districts havebeen entrusted to the Sangh for its entiremanagement while the remaining 409 unitsare being managed by the StateGovernment.
3. Agents used to be appointed for collection and purchase of tendu leaves on lump sum basis with option of annual renewal of the contract. Thereafter tenders were invited and till the season of 1983, upset price in respect of each unit used to be mentioned while inviting tenders by the State Government and the Sangh. But in the season of 1984, the State Government kept the upset price secret but the Sangh. mentioned the upset price of its units. This was challenged in M. P. No. 753/84 and on 28-4-1984 this Court upheld the policy of the State in not disclosing the upset price and to refer to upset price only after tenders were received. In the season of 1985, disclosure of upset price in the tender notices resulted in manipulations by traders by giving offers below the upset price. Only offers at or above the upset price were accepted and fresh tenders were invited on 15-3-1985. Traders further lowered down their offers. As such, it was decided to accept offers much below the upset price. This was challenged in M.P. No. 1036 of 1984. By interim order dated 8-4-1985. this Courtdirected that only tenders at or above the upset price be accepted and for the rest of the units fresh tenders be called. There were further lowering down of the offers when the tenders were opened on 15-4-1985. Since the State Government and the Sangh expressed their inability to departmentally work beyond 40% of the units, this Court on 22-4-1985 directed the State Government and the Sangh to dispose of the rest of the units as best as it can, keeping in view the public revenue. As a result, there was fall in revenue to the extent of several crores. For the season of 1986, the upset price was kept secret and refixed by taking average of last 5 years' yield of the units multiplied by the current price so as to avoid manipulations by the traders. This worked well and there was increase in the revenue by 7 crores. Since the season of 1987 the policy has been again changed and instead a single tender is to be given by each tenderer though offer may be of any number of units. Tenderers are required to mention their purchasing capacity and their order of priority of the units to be purchased. The offer of each tenderer so given was fed to the computer and result declared on the basis of the highest bid, the order of priority and the purchasing capacity. In the year 1987 there was increase of revenue by 9 crores over the previous years' sales. This year the revenue has further increased by 12 crores.
4. The tenders were required to be submitted in the office of the Conservator of Forest of the circle in question by 14/15-12-1987 14/15-12-1987 . Tenders were opened simultaneously at Bhopal, Jabalpur, Bilaspur and Raipur in respect of all the conservator circles of the State. The offers of each tenderer in each circle was read out and the tenders were then taken back to the respective Conservator office for tabulation and preparation offender results. Each and every tender was checked in order to ensure that the tenderer has fulfilled all the formalities as per terms and conditions of the tender notice. A eomputer data sheet was then prepared for each tender mentioning the details of the offers. A photo copy of the tender along with the computer data sheet was forwarded to the Bhopal office for computerisation. The computerised results were announced on 5-2-1988 and the partieswere intimated accordingly. A number of petitions were filed by different tenderers challenging rejection of their tenders which were admitted and the State and the Sangh were directed not to issue any work orders to the successful tenderers until further orders. Since there were certain mistakes in computerisation, some of the results were cancelled and fresh orders of acceptance to other tenderers were issued on 10-2-1988. Therefore, some of the tenderers, whose tenders were earlier accepted but later on rejected and given to others, filed some petitions. Further orders on stay in those petitions were fixed for 7-3-1988 but due to lawyers' strike nobody appeared and on 8-3-1988 on the representation being made by the officers of the Sangh and the State Government that pruning season will be over by 15-3-1988 and unless pruning is done, better crop will not be obtained resulting in loss to the revenue, and as the petitioners or their counsel were not present, this Court had no option but to vacate the ad interim stay, with the result the agreements were executed and work order issued to the sucessful tenderers and they have started their work by pruning tendu trees in their respective units. New crops are to be plucked from the last week of April onwards.
5. The tender notice issued by the State Government and also by the Sangh contained similar terms and conditions for submitting tenders. Under Clause 4, a tenderer is required to disclose his purchasing capacity but could give offers for more than one unit. If for the same unit, more than one offer is given, the lower offer would be rejected and 1/4th of the amount forfeited from the earnest money deposited and he could also be blacklisted for 3 years. Under Clause 5(1), only bidi manufacturers or tendu leaves exporters could submit their tenders. Under Clause 5(2) (2), if any tenderer or his partner is in arrears of any Government dues, his tender will be invalid and the earnest money would be forfeited. Under Clause 6(1), each tenderer was required to deposit 25 per cent of the purchasing capacity as earnest money by demand draft/call deposit. However, it was open to the tenderer to deposit only 5% by way of bank draft or call deposit and the rest20% he could furnish as bank guarantee. Under Sub-clause (5) if the bank guarantee is not. found to be in the prescribed form, then the tender would not be considered and 10% of the earnest money would be iorfcited. Under Clause 7(1), tenderer should give his offer without including the taxes payable and the taxes would be recovered at the timeiof collection. Under Clause 7(2) (1). every tenderer was required to execute a pro forma agreement. Under Clause 7(2) (2) on failure to execute the pro forma agreement the tender would not be considered and the earnest money would be forfeiled, besides he can be blacklisted. Under Clause 7(3) (1) if any offer is not clear as to in respect of which unit or for how much amount it is made, such offers would not be considered and 10% of the earnest money would be forfeited but his remaining offers can be considered in respect of the balance amount of the earnest money. Under Clause 7(3) (2), for any mistake in giving offer, 'the same would not be Considered and 10% of the earnest money would be forfeited. Under Clause 12, it was not incumbent to accept any offer without disclosing any reason and the decision of the State Government or the Sangh will be final and binding on the parlies.
6. Broadly the petitioners in M.P. Nos. 514, 517, 523, 561, 570, 592, 593, 727, 781, 783, 801 and 837, all of 1988. contend that although their tenders were highest yet the same have been arbitrarily rejected and there has been discrimination by accepting lower tenders, ignoring the interest of public revenue. Since then in M.P. No. 517/88. one more unit has been granted to the petitioner and the originally declared bidder has challenged the cancellation of his offer in M.P. No. 741/88. Similarly in M.P. No. 523/88, the petitioners have been subsequently granted more units and the originally declared bidders have challenged their cancellation in M.P. No. 878/88. In M.P. No. 516/88 the offers of the petitioner and the respondent No. 5 were identical but it is claimed that the tender of the respondent No. 5 was defective inasmuch as he did not mention the unit numbers yet he has been favoured according to the petitioner. In M. P. No. 518/88 the petitioner contends that he had given offer for 21 units but his offer for 18 units alone has been considered, the offer for 3 units was on a separate piece of paper which is permissible. In M.P. No. 522/88, the petitioner contends that his tender has not at all been considered by wrongly holding it to be in arrears of last season's dues when that contract was still valid up to 31-1-1988, if not up to 31-3-1988 and non-payment of instalments on due dates entailed payment of interest only, and even if the contract could be terminated for default in payment of instalments, the contract could be revived by clearing the instalments with interest and surcharge and in fact the petitioner has already cleared all the dues of the last year's contract. In M.P. No. 575/88, the petitioner contends that due to inadvertence two sets of offers were given in respect of 2 units and one set of offers was highest in respect of two units, yet the same was not accepted but lower tenders accepted. In M.P. No. 728/88 the petitioner contends that his bid for unit No, 935 Sumaria was initially accepted but in the revised list of 10-2-1988 the unit has now been given to the respondent No. 4 for no valid reason, more so when there is no power of review. The petitioner further submits that while submitting the tender, the tenderer has to incur not only financial but also penal liabilities and having done so, the State or the Sangh cannot back out on lame excuses.
7. The State of M.P. and the Sangh in their returns have submitted that while opening the tenders in four places i.e. Bhopal, Jabalpur, Raipur and Bilaspur. the tenders were read out, mentioning the offers given. Then the tenders were taken back to the office of the respective Conservator of Forest for scrutiny so as to ascertain whether the tenderer has fulfilled all the required formalities as per the terms and conditions of the tender notice. Chart was prepared giving out the deviations, violations and defects, if any, in the tender form. Then computer input data sheet was prepared giving the details of the offer in respect of each unit, the name of the tenderer, his priorities and purchasing capacity. Each set of tender was photographed, one set was sent to Bhopal for computerisation. All these required time and handling by a number of persons in the officeof the Conservator of Forest. Large number of complaints were received that tender forms in few cases were tampered with by unscrupulous tenderers with the help of the official staff. The complaints were examined and it was discovered that there were overwritings, interpolations and erasers in some tender forms and there were over writings over the amounts both in words and figures. In some cases the overwritings were not initialled by the Conservator of Forest, while in other cases they were so initialled but complaint was also received that a Conservator of Forest after receiving large sums initialled the overwritings. So it was difficult to find out at what stage the over writings, interpolations and erasers were made. The State Government examined the complaints, the tender forms and enclosures and was satisfied that in few cases mischief has been done. The State Government in order to defeat the evil design played by unscrupulous tenderers and also to keep the sanctity of the tender system, took a policy decision that all such offers having either overwritings or interpolations both in words and figures of the amount be rejected outright in the interest of just and fair play. So all such offers showing tampering are not to be accepted and the computer input data forms were accordingly corrected and the offers having overwritings or interpolations were not fed to the computer.
8. In view of the policy decision, the offers with overwritings or interpolations both in the words and figures in the offers in the tender forms of the petitioners in M.R Nos. 514, 517, 523, 561, 570, 592, 593, 727, 781, 783, 801 and 837, all of 1988, were outright rejected, the initial amounts having been inflated. So these petitioners have no case nor they are entitled to any relief under the extraordinary jurisdiction of this Court. In M.P. No. 516/88 it is admitted that offers of the petitioner and the respondent No. 5 were identical but the priority of the respondent No. 5 being higher, it was accepted and there was no infirmity in the offer inasmuch as the unit in question could be identified by its name though unit number was not given. In M.P. No. 518/88 the offer was for 18 units only and a slip of paper containing offer for 3 more units was interpolated later on. In M.P.No. 522/38 the petitioner's tender was not accepted as he was in arrears of the dues of the. contract of 1987. It became a defaulter alright as soon as the instalments were not paid when due. It is a different question that interest was payable for non-payment of instalments in time. In few cases, there were mistakes in the computer results when they were manually rechecked. So the corrections were rectified and results renotified on 10-2-1988. In M.P. No. 561/88 as the petitioner did not execute the pro forma agreement, his tender was rejected under Clause 7(2)(2). In M.P. No. 575/88, as two sets of offers were given by the petitioner in respect of two units, under Clause 4, the 1/4th of the lower offers were confiscated from the earnest money, leaving no balance of earnest money for consideration of the higher offers. In M.P. No. 728/88 there was such a mistake in respect of the unit Simaria which should have been allotted to the respondent No. 4 whose offer was higher, there had to be reallotment of the units granted to it keeping in view his priorities.
9. The Supreme Court in Ramana v. I. A. Authority of India, AIR 1979 SC 1628, has held that 'the principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Article 14 and it must characterise every State action, whenever it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory.' The Supreme Court in M/s. Kasturilal v. State of J & K, AIR 1980 SC 1992, has also held 'every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by public interest. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.' The Supreme Court in Om Prakash v. State of J& K, AIR 1981 SC 1001, has further held 'in the instant case, allotment ofresin, a forest product, by the State to the various industrial units was to be made in conformity with the industrial policy of the State Government which inter alia required that the unit should be formally registered. However, in actual practice quota was granted to some unregistered units, while denied to some units which were registered.' The Supreme Court in Ram and Shyam Co. v. State of Haryana. AIR 1985 SC 1147, held that 'when sale to highest bidder not confirmed by Government -- Lease granted to a person who wrote letter to Chief Minister by making allegations against highest bidder at auction -- No opportunity given to highest bidder -- action is arbitrary -- grant is invalid'. The Supreme Court in Chaitanya Kumar v. State of Karnataka, AIR 1985 SC 825, has held that when High Court found grant of contract established arbitrary, it could not refuse to set aside the contract. The Supreme Court in Harminder Singh v. Union of India, AIR 1986 SC 1527 found that tender of Government Milk Scheme was accepted though the appellant's tender was lowest for supply of milk, the acceptance was illegal. Regarding promissory estoppel, the Supreme Court in M.P. Sugar Mills v. State of U.P., AIR 1979 SC 621, has held that if the promise is made and it is acted upon by the other party to whom the promise is made, the promise would be binding on the party making it and he would not be entitled to go back upon it.
10. It may be seen that in majority of these petitions the allegation is that though the offers of the petitioners were higher, lower tenders have been accepted arbitrarily and with ulterior motives. According to the returns filed by the State Government and also by the Sangh, the offers of these petitioners in respect of those units for which there were interpolations in their offers both in words and figures of the amounts offered, those offers were rejected outright as per policy decision taken by the State Government on 6-1-88 which was also attended by the Managing Director of the Sangh since it was acting as an agent of the State Government in respect of tendu leaves, as it was suspected that those interpolations and overwritings were done after the offers were read over at four centres Bhopal, Jabalpur, Raipur andBilaspur and during the period the tenders were being processed in the respective offices of the Conservator for preparing computer data sheet and for their onward submission to Bhopal for computerisation. We have to see whether the action in rejecting higher tenders was justified or not. It is not disputed that tenders were opened at four centres, namely, Bhopal, Jabalpur, Raipur and Bilaspur. The offers of each individual tenderer were read over and. therefore, it became known to the tenderers as to what are the offers given by different tenderers in respect of a particular unit. After the tenders were opened and read over, they were taken to the respective offices of the Conservator of Forest for purposes of tabulation and preparation of tender result. Each and every tender was checked to ensure that the tenderer has fulfilled all the requisite formalities as per terms and conditions of the tender notice. The Sangh was allotted 980 units and it received 835 tenders containing approximately 20,000/- offers, maximum number of offers in one single tender was for 209 units. Computer data sheet was then prepared for each tender mentioning the details of the offer. A photo copy of the tender was submitted along with the computer data sheet with preliminary result to the Bhopal office for computerisation. During this process of checking and tabulation, the tender forms submitted passed through several hands including the clerical staff. On receipt of the copy of the tender with computer data sheet preliminary result, they were rechecked in the Bhopal office code numbers were given and omissions and deviations from the provisions of the tender conditions were also scrutinised. During this period, a large number of complaints were received that there has been manipulations in the offices of the various Conservators of Forest and in some cases the offers initially given have been manipulated by overwritings and interpolations by inflating the offers earlier given. There were even complaints against a Conservator of Forest also that he has been a party to the manipulation by lending his initials to the overwritings after receiving large amounts. All these complaints were examined and it was found that there were overwritings, interpolations and erasers in some tender forms, both in words and figures of the amounts offered. In some cases, overwritings did not bear the initials of the Conservator ofForests and in some cases even did not bear the initials of the tenderer. The State Government was satisfied that in a few cases mischief was done and it was difficult to find out at what stage overwritings, interpolations and erasers were made. The State Government in order to defeat the evil design played by unscrupulous tenderers and also to keep the sanctity of the tender system, took a policy decision that all such offers having either overwritings or interpolations both in words and figures of the amounts offered be rejected outright. The decision was taken in a high-power committee meeting of Secretary of Forest, Conservator-in-chief, the Chief Conservator of Forest, Production, and the Managing Director of the Sangh who is also a Chief Conservator of Forest, on 6-1-88. It was decided that all such offers with overwritings and interpolations both in words and figures be ignored, The decision is being challenged on the ground that the meeting was unauthorised under the rules of business of the State Government inasmuch as the Managing Director of the Sangh could not have participated in the deliberations and could not be a signatory to the decision taken. There is no merit in this contention. The Sangh was admittedly an agent of the Slate Govt. and it has to follow the policy laid down by the State Government. Moreover, the Managing Director was a Chief Conservator of Forest sent on deputation to the Sangh. So his participation in the meeting was necessary in view of the fact that majority of the units were given to the Sangh for management. It has not been shown why the high power committee presided over by the Secretary of Forest Department could not have taken such a policy decision. So in the light of the policy decision taken, the petitions are to be examined. We have no doubt that the State Government and the Sangh were justified in rejecting the offers of these petitioners in which there were interpolations and overwritings in words and figures. It is human to commit mistakes but it is difficult to understand how there will be mistakes both in words and figures while giving offers. May be there was mistake in writing the figures and in some cases in writing the amount in words but coincidence of mistakes in words and figures both do create suspicion in the light of the complaints received. The computer was operated according to basic logical programme for allotment of units i.e. (i) highest available offer, (ii) highest priority and (iii) within the purchasing capacity. Once the purchasing capacity of a tenderer was exhausted at a particular priority, all the offers below it were not considered although they may be highest for that unit. After the results were declared, there was manual checking and some mistakes were discovered which were rectified by issuing fresh orders.
11-A. M.P. No. 514/88 :-- The petitioner claims that his offer of Rs. 5,47,786/- was the highest in respect of unit No. 1378 Naharkola of Harda division but the Sangh has accepted the lower offer of Rs. 5,43,300/- of the respondent No. 6 for no valid reason. On going through the tender form of the petitioner, it is clear that there is overwriting at serial No. 7 in tender in respect of this unit by changing the original offer of Rs. 5,27,786/-to Rs. 5,47,786/- both in words and figures. Ten affidavits were filed by different tenderers and it is also the stand of the Sangh that the time of reading out of the tender of the petitioner, it was announced that the petitioner gave tender for Rs. 5,27,786/- in respect of this unit. The petitioner who was present at that time did not raise any objection. The petitioner further contends by way of amendment that the tender of the respondent No. 6 should have also been rejected since there were corrections in the call deposit certificate of the bank submitted by it. It was in the name of Conservator of Forest, Hoshangabad, which has been corrected to Conservator of Forest, Bhopal. This is true but under Clause 7(3)(2) of the lender notice an offer is liable to be not considered if there is any mistake or omission in the offer. Here there is no mistake or omission in the offer nor there is any over-writing or interpolations in the amounts offered by the respondent No. 6. Only call deposit has been corrected from Conservator of Forest. Hoshangabad, to Conservator of Forest, Bhopal, by the bank itself. There is nothing to doubt the genuineness of the call deposit certificate because the bank has confirmed that the call deposit was, in fact, issued in the name of Conservator of Forest, Bhopal but by mistake Hoshangabad was written earlier. Therefore, the petition deserves to be dismissed.
(B) M.P. No. 517/88 has to be considered along with M.P. No. 741/88. The petitionerin M.P. No. 517/88 gave an offer of Rs. 3,35,786 but the Sangh has accepted the lower offer of the respondent No. 5 for Rs. 3,31,000/- in respect of unit No. 1381 Pipalgota in Hoshangabad Forest Division. Similarly, in respect of unit No. 240 Bamhni in West Chhindwara Division against the offer of Rs. 3,26,786/- of the petitioner, the lower offer of Rs. 3,24,444,44 p/- of the respondent No. 6 has been accepted. Besides, unit No. 158 Pati in Badwani Forest Division, the petitioner's offer has not been accepted and the unit has been set apart for departmental, working. It appears that there was a mistake in computerisation which was detected after manual checking and it was found that the offer of the petitioner for unit No. 240 was at priority No. 34 of his tender and the same should have been accepted and thereby his purchasing capacity of 10 lacs was exhausted It was found that there were mistakes in respect of 26 units which were corrected. The initial acceptance of offer of the respondent No. 6 was not communicated to him and, therefore, he got no right. As such the order of acceptance has been issued to the petitioner. The petitioner in M.P. No. 517/88 is not entitled to any relief and it has to be dismissed as he already got unit No. 240 Bamhani and he is not entitled to the other unit No. 1381 Pipalgota as he has exhausted his purchasing capacity. It was open to the Sangh to work unit No. 158 Pati departmentally and the petitioner can have no grievance for the same. Merely because in the year 1985 it was found in M.P. No. 1036/84 by order dated 22-4-1985 that the State Government and the Sangh were not in a position to manage all the units departmentally beyond 40%, it would not mean that they cannot manage some stray units and there is nothing wrong in managing certain units departmentally in order to ascertain whether the offers given by the tenderers were proper or not. The offer of the petitioner in M.P. No. 741/88 being lower, the same could not have been accepted in preference to the offer of the petitioner in M.P. No. 517/88. The petitioner's contention that instead of giving Bamhani to the petitioner in M.P. No. 517/88 he should have been given unit No. 1381 Pipalgota and the loss would have been minimised since next offer of Pipalgota was quite low. But this contention cannot be accepted since the offershave to be considered in the order of priority. After accepting offer of Bamhani which was on the higher priority, the purchasing capacity of the petitioner in M.P. No. 517/88 was exhausted and, therefore, he could not be allotted Pipalgota unit. Consequently, M.P. No. 741/88 has to be dismissed.
(C) Regarding M.P. No. 523/88, the petitioners have been subsequently granted 4 more units and the bidders whose offers were accepted earlier for those four units have challenged their cancellation in M.P. No. 878/88, so both the petitions have to be disposed of together. In M.P. No. 523/88, the petitioner No. 1 had made an offer of Rs. 3,77,013/- in respect of unit No. 1044 Kilora, while the offer of respondent No. 5 for Rs. 3,30,000 was initially accepted for this unit. The petitioner No. 2 gave an offer of Rs. 4,13,013/- in respect of unit No. 1047 Majhgaoh but the lower offer of Rs. 3,53,500/-of the respondent No. 4 was initially accepted. Similarly, the petitioner gave an offer of Rs. 3,87,000/- for unit No. 1008 Kakredi, while the lower offer of respondent No. 6 for Rs. 3,76,666.66/- was initially accepted. The petitioner No. 3 also offered Rs. 2,67,000/-for unit No. 991 Sohawal but the lesser of respondent No. 7 for Rs. 2,63,000/- was initially accepted. Again, for unit No. 1023 Ladbad, the petitioner No. 3 offered Rs. 2,11,000/- while the lower offer of respondent No. 8 for Rs. 1,63,000/- has been accepted. It is admitted by the State Government that the offers tendered by the petitioners 1 to 3 in respect of unit No. 1044 Kilora, 1017 Mazgava, 1008 Kakredi and 991 Sohawal were higher than that of the respondents 4 to 6 and lower offers were erroneously accepted The Stale Government in the interest of fairness and public revenue took a decision to accept the higher offers of these petitioners in respect of the aforesaid four units. In view of the stay granted in this petition on 12-2-88 to the petitioners, no work orders were issued to the respondents 4 to 6 nor any agreement was executed with them and. as such, the respondents 4 to 6 did not gel any right and their bids being lower they can have no grievance. Accordingly, thepetitioners in M.P. No. 523/88 have already been allotted four more units after filing of the petition by correcting the errors committed, two of which have gone to petitioner No. 3, though he claimed two more units but they could not be allotted to him as he had exhausted his purchasing capacity. Therefore, no further relief can be granted. Consequently, M. P. No. 878/88 must fail and they have no case since their offers were lower.
(D) In M.P. No. 570/88 the petitioner gave an offer of Rs. 5,11,000/- in respect of unit No. 562 Dohdro in Korba Forest Division but the lower tender of the respondent No. 4 for Rs. 4,93,000/- has been accepted. This offer was given by the petitioner as item No. 1 in his tender. It is clear that originally the offer was for Rs. 5,01,000/- but it has been changed to 5,11,000,- and the change of 'I' into 11 is clear in figures and the word 'one' has been changed into 'eleven'. It is, however, contended by the petitioned that when his offer was already higher than that of respondet No. 4 in respect of this unit, why he would inflate the figures further. That is true, but on a bare look of his tender submitted, it is clear that in his offer in respect of 5 units, there have been overwritings and interpolations in inflating the figures. May lie the petitioner was under a mistaken impression that the offer of respondent No. 4 in respect of this unit was higher and, therefore, he increased the amount by ten thousand. His tender has rightly not been considered due to overwritings in words and figures of the amounts and the petition has to be dismissed.
(E) In M. P. No. 592/88 the petitioner gave an offer of Rs. 8,77,777,77 p/- in respect of unit No. 272 Nesalnar in West Bastar Forest Division, while the lower tender of respondent No. 4 for Rs. 8,28,000/- for this unit has been accepted. In the tender of the petitioner the amount offered was Rs. 8,27,777,77/- which has been changed to 8,77,777,77 p/- both in words and figures lRrkbZl has been changed to lrgRrj. The offer of the petitioner in respect of this unit has rightly not been considered and the petition has to be dismissed.
(F) In M.P. No. 593/88 the petitioner gave an offer of Rs. 3,53,130/- in respect of unit No. 553, Sutarra, North Bilaspur Forest Division, but the lower offer of respondent No. 4 for Rs. 3,51,000/- has been accepted. At item No. 25 of his tender, in the offer regarding unit No. 553 it is clear that the amount offered has been changed from 3,13,130/- firstly to 3,43,130/- and then to 3,53,130/-. The interpolations and corrections are clear to the naked eye. His tender has been rightly not considered and the petition has to be dismissed.
(G) In M.P. No. 727/88 the petitioner gave offer of Rs. 3,71,000/- in respect of unit No. 76, South Makadi in Kondagon Forest Division but the lower offer of respondent No. 4 for Rs, 3,27, 786/- has been accepted. The offer is at item No. 36 of his tender. It is clear that originally the figure was Rs. 3,41,000/- which has been changed to Rs. 71,000/- both in words and figures. There are several such corrections and overwritings both in words and figures in respect of other units also. Though his initial offer was higher than that of the respondent No. 4 but it again appears that the petitioner was under impression that his offer was lower than that of the respondent No. 4 and so he inflated the figures. Therefore, the petition has to be dismissed.
(H) In M.P. No. 745/88 the petitioner gave an offer of Rs. 4,27,013/- for unit No. 945 Katholi and offer of Rs. 3,57,000/- for unit No. 956 Kanjwar, while the offer of respondent No. 4 for Rs. 4,13,000/- for unit No. 945 Kathali, and for unit No. 956 Kanjwar the offer of respondent No. 5 for Rs. 2,89,226.26/- has been accepted. The petitioner's offer for unit No. 945 is at serial No. 1 and for unit No. 956 is at serial No. 3 of his tender. Though there are no overwritings and interpolations but his offers have been rejected as he failed to sign the pro forma agreement as required under Clause 7(2)(1) of the tender notice and as per Sub-clause 7(2)(2) the tender was invalid. Non-signing of the pro forma agreement has been treated to be fatal, not other mistakes or omissions. This being a mandatory provision, the tender has been rightly rejected and the petition has to be dismissed
(I) In M.P. No. 781/88 the petitioner gave tender for Rs, 2,01,000/- for unit No. 291 Bilahari and for Rs. 71,000/- for unit No. 299 Sansarpur and the petitioner himself admits that these figures were inflated to Rs. 2,41,000/- and 1,11,000/- both in words and figures. This is also evident from the tender submitted at item Nos. 2 & 3. In view of the change in the amounts both in words and figures, these offers were not considered. These two units are now being worked departmentally for which the petitioner can have no grievance. The petition has to be dismissed.
(J) M.P. No. 783/88 : The petitioner admits that initially it gave offer of Rs. 2,01,000/- for unit No. 289 Gopalpur and unit No. 290 Bijori but subsequently the figures were inflated to Rs. 3,01,000/-. This is also evident from the tender submitted at item Nos. 1 & 2. Because of the change of the amounts both in words and figures, the tender has been rightly rejected and it is being worked departmentally. Accordingly, the petition has to be dismissed.
(K) M.P. No. 801788 : The petitioner gave an offer of Rs. 5,11,111/- in respect of unit No. 914 Subbua in North Panna forest division. The petitioner admits that initially he had given offer of Rs. 4,11,111/- which was inflated to Rs. 5,11,111/- subsequently. In view of change of the amount both in words and figures, the offer has been rightly rejected and the unit is being worked departmentally for which the petitioner can have no grievance, The petition has to be dismissed.
(L) M.P. No. 837/88. The petitioner gave offer of Rs. 2,71,777 - for unit No. 1232 Maharajpur but there were discrepancies inasmuch in figures the amount was Rs. 2,71,777/- while in words it was Rs. 2,71,707/-. Therefore, there was discrepancy between the words and the figures of the amount offered in respect of unit No. 1232 and it was open to the State Government to reject the offer under Clause 7(3)(2) as it was not clear as to which offer has to be accepted. The petition has to be dismissed.
(M) In M.P. No. 561/88 the petitioner gave offer of Rs. 5,61,787/21 p/- for unit No. 1091, Bankipur, and offer of Rs. 4,73,787.21/- for unit No. 1110, Kapsara, both in South Surguja but tender of the respondent No. 4 for Rs. 5,57,725/- for unit No. 1091, Bankipur, and that of respondent No. 5 for Rs. 4,31,241/- for unit No. 1110, Kapsara, though lower were accepted. There are interpolations and overwritings in the amounts offered both in words and figures in respect of these two units in the tender of the petitioner. The figures have been changed thrice regarding unit No. 1091 and twice in respect of unit No. 1110. These are at serial Nos- 1 & 2 of the tender. Initial figure was Rs. 5,41,787, changed to Rs. 5,86,787, which was scored out and then Rs. 5,61,787/-interpolated in respect of unit No. 1091. In unit No. 1110, the initial figure of Rs. 5,13,787/- was altered to Rs. 4,73,787. In view of the interpolations in the words and figures in respect of these two units, the same were rightly not considered and the petition has to be dismissed.
12. In M.P. No. 518/88 the petitioner claimed that in his tender he gave offer of 21 units, 18 on the printed form and 3 on a separate piece of paper, which was permissible. In the computer data sheet also offer in respect of 21 units were mentioned. But while tabulating the petitioner's offer of 18 units only were taken into consideration. The petitioner, therefore, filed M.P. No. 324/88 in this Court and it was dismissed saying that the apprehensions of non-consideration of 3 units are not well-founded. It appears from the return that the petitioner had only offered 18 units and this is evident from the endorsement of the Conservator that the tender is in respect of 18 units only and there is signature of the petitioner also at the end of the page of the tender form. The Conservator has also sworn one affidavit to this effect and a separate sheet containing offer of 3 more units was interpolated later on. This separate piece of paper was not taken into consideration. According to the Conservator, after opening the tender, it was handed over to the Asst. Conservator of Forest. The Asst. Conservator of Forest got the computer data sheet prepared and took his signature at Bhopal and he signed it ingood faith. Therefore, the petitioner's offer in respect of 3 units given on a separate paper was rightly ignored and the petition has to. be dismissed. True the affidavit of Asst. Conservator of Forest has not been filed, obviously he will not admit his involvement and there is no reason to. doubt the Conservator.
13. In M.P. No. 516/88 the petitioner gave offer of Rs. 4,55,000/- for unit No. 1111, Satyanagar, in South Surguja forest division and the respondent No. 5 also gave the same offer for this unit. According to the petitioner, as the respondent No. 3 failed to mention the unit number in the offer, the same was liable to be rejected under Clause 7(3)(i) yet his tender has been accepted and the petitioner's offer rejected though it suffered from no infirmity. That sub-clause provided for rejection of the offer if it could not be ascertained in respect of which unit offer has been made, then it has to be rejected. It is asserted by the Sangh that there is no other unit by name Satyanagar in the entire State and the offer could be further pinpointed as it was mentioned to be in South Surguja forest division. The respondent No. 5 was preferred as his priority for this unit was at No. 2, while the petitioners priority was no. 4. Therefore, there was justification for accepting the equal offer of the respondent No. 5, being of higher priority and the petition has to fail.
14. In M.P. No. 522/88 the contention is that the petitioner's offer has been rejected on wrong premises. The petitioner gave offer of Rs. 12,25,000/- for unit No. 986, Jiyawan in East Sidhi, but lower tender of the respondent No. 4 of Rs. 9,17,751/- for this, unit has been accepted As per the return filed, the petitioner's entire tender was rejected under Clause 5(2)(ii) as the firm was in arrears of Government dues amounting to Rupees 65 lacs on 16-12-1987, when tenders were opened, towards the purchase of tendu leaves of the 1987 season and the petitioner, made a wrong declaration in the tender that it was not in arrears of any Government dues. However, this is being challenged by the petitioner that even if the instalments of the last year's purchase money were not paid when due, the amount did not fall into arrears as the same carried interest. The firm couldhave been in arrears on that count only if the contract was terminated which was not done. Since the contract was valid up to 31-1-1988, the firm did not fall into arrears on 16-12-1987. Even if the contract was terminated, still the same could be revived by clearing all the arrears with interest and surcharge. Reliance has also been placed on the decision of the Supreme Court in Hind Construction Contractors v. State of Maharashtra, AIR 1979 SC 720 that if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week and the work undertaken remains unfinished on the expiry of the time provided in the contract, such clauses would be construed as rendering ineffective the express provision relating to the time being of essence of contract. That was a case of recession of the contract and if in the present case the petitioner's contract of 1987 season was rescinded for non-payment of the instalments on the due dates, perhaps the petitioner could have pleaded that time was not being essence of contract and so recession was bad. Here we are concerned with Clause 5(2)(ii) where the expression used is that the tenderer should not be in arrears of Government dues, the expression defaulter has not been used. So if the petitioner did not pay the instalments on the due dates, it fell into arrears and as such the petitioner was in arrears when the tender was opened on 16-12-87. Subsequent clearing of the dues will not wipe out the fact that the firm was in arrears of Government dues on 16-12-1987. The recession of the contract was not necessary to hold the petitioner to be in arrears. The Sangh was, therefore, justified in rejecting the offer of the petitioner and the petition must fail to this extent.
15. In M.P. No. 575/88 the petitioner gave an offer of Rs. 4,13,000/- for unit No. 1366, Bijouri, but lower offer of Rs. 2,40,000/- of the respondent No. 7 has been accepted. As per return of the Sangh, the petitioner gave two sets of offers in respect of two unit numbers and as under Clause 4 of the tender notice, the higher offers alone could be considered after forfeiting 1/4 of the amount of the lower offer. The petitioner bad offered Rs. 6,78,000/- for unit No. 1349, Ghunghuti, at serial No. 6 of the tender and again offeredRs. 7,14,000/- for the same unit at serial No. 17. Similarly, the petitioner gave offer of Rs. 4,32,000/- for unit No. 1348 Chauri at serial No. 7 and another offer of Rs. 3,88,000/-for the same unit at serial No. 16. The petitioner had declared his purchasing capacity of ten lacs and furnished earnest money of Rs. 2,50,000/-. The sum total of the lower offers of units Nos. 1348 & 1349 comes to Rs. 10,66,000/- and 1/4th of this amount is Rs. 2,66,500/-. According to the Sangh, after forfeiting l/4th amount, no balance of earnest money was left and so the two higher offers could not be considered. It appears that the non-consederation of the petitioner's offer was as per Clause 4 and so the petition has to fail to this extent.
16. In M.P. No. 728/88 the petitioner's offer of Rs. 3,31,000/- for unit No. 935 Simaria, was accepted but the acceptance has been revoked on 10-2-1988 and now it has been given to the respondent No. 4 with an offer of Rs. 3,51,000/- for this unit. The petitioner's offer being lower, it could not have been accepted ignoring the higher offer of the respondent No. 4. However, the petitioner contended that reallotment of units has resulted in loss to the public revenue and could have been avoided. The offer of the respondent No. 4 for Rs. 10,50,111/- for unit No. 989, Dhonga, was earlier accepted but now lower offer of Rs. 9,11,786.92 p/- for this unit has been accepted i.e. loss of Rs. 41,724/-while in allowing the petitioner to retain unit No. 935, the loss would have been only Rs. 20,000/-. As per the return filed, the following offers of the respondent No. 4 were accepted initially : unit No. 988 Karthua for Rs. 8,71,111 at priority No. 3, unit No. 976 Chatoli for Rs. 6,51,111/- at priority No. 5, unit No. 966 Silphai for Rs. 5,55,000/- at priority No. 7 and unit No. 977 Mada for Rs. 3,21,111/- at priority No. 10. On manual checking it was found that the offer of the respondent No. 4 for unit No. 965 Dudhamania was for Rs. 6,21,000/- at priority No. 6 while the offer of Rs. 4,11,786.92 p/- of M/s. Mohammad Ali for the same unit was accepted. According to the laid down principles of acceptance of highest offer, the offer of respondent No. 4 at priority No. 6 should have been accepted before his offer at lower priority i.e. at priority No. 7 or 10could be accepted. By accepting the offer at priority Nos. 3, 5 & 6 amounting to Rs. 23,56,667/- out of the purchasing capacity of 25 lacs, therefore, he could not be offered any other unit. His offer for unit No. 989 Dhonga for Rs. 10,50,111/- was not considered because of the over-writings of the amounts in words and figures. The petition, therefore, has to fail.
17. Now remains the question whether the Sangh was justified in forfeiting the earnest money of the petitioner in M.P. No. 522/88 under Clause 5(2)(ii) and that of the petitioner in MR No. 575/88 under Clause 4 of the tender notice. Clause 4 provides that in case more than one offer is given in respect of the same unit, the higher offer has to be accepted and 1/4 of the lower offer has to be forfeited from the earnest money. Under Clause 5{2)(ii) if the tenderer is found to be in arrears of Govt. dues his tender will be rejected and his earnest money forfeited. In M.P. No. 522/88 the petitioner has furnished earnest money of Rupees 3.75 lacs while in M.P. No. 575/88 the earnest money furnished was 2.50 lacs. In view of these clauses, the entire earnest money of Rupees 3.75 lacs in M. P. No. 522/88 and the entire earnest money of Rupees 2.50 lacs in M. P. No. 575/88 have been forfeited. In the first case because the petitioner submitted tender although he was in arrears of Govt. dues and in the second case because the petitioner had given two sets of offers in respect of 2 units. The Supreme Court in Fateh Chand v. Balkirshna Das, AIR 1963 SC 1405, held that 'the measure of damages in the case of breach of a stipulation by way of penalty is by 5.74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the court duty to award compensation according to settled principles.' Relying on this decision, the Supreme Court in Maula Bux v. Union of India, AIR 1970 SC 1955,held that 'where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid to the party complaining of a breach of contract, the undertaking is of the nature of a penalty.' Again in Union of India v. R. D. & C. Co., AIR 1973 SC 1098, the Supreme Court held that the party to a contract taxing security deposit from the other party to ensure due performance of the contract is not entitled to forfeit the deposit on ground of default when no loss is caused to him in consequence of such default. Therefore, in view of Section 74 of the Contract Act and the principles laid down by the Supreme Court, the party to a contract. taking security deposit from the other party to ensure due performance is not entitled to forfeit the deposit on ground of default when no loss is caused to him on consequence of such default Here, in these two cases, it has not been shown that because of the'breach of conditions of the tender notice by the petitioners in M.P. Nos. 522 and 575 of 88, the Sangh suffered actual loss to the extent of 3.75 lacs and 2.50 lacs respectively. Therefore, the Sangh is not justified in forfeiting the entire earnest money in these two cases. The Sangh is only entitled to reasonable compensation for the loss caused due to the breach committed by the petitioners.
18. With the result, M.P. Nos. 514, 516, 517, 518, 523, 561, 570, 592, 593, 727, 728, 741, 745, 781, 783, 801, 837 and 878, all of 1988 fail they are dismissed. M.P. Nos. 522 and 575 of 1988 are partly allowed by setting adide the order of forfeiture of earnest money. Parties to bear therin own costs of the petitions. The outstanding security amount be refunded to the petitioners.