J.S. Construction Vs. Post Graduate Institute of Medical Education and Research Chandigarh and ors. - Court Judgment

Excerpt:
commercial - tender - rejection of - respondents invited bidders for tender through notification - petitioner applied for same - petitioner earlier instituted case of corruption against respondents which is pending with cbi - further petitioner being lowest bidder, contract was issued in favour of petitioner after negotiating with prices - thereafter respondents issued order rejecting tender of petitioner - hence, present petition - held, cancellation of contract issued in favour of petitioner by respondents was unfair as petitioner was lowest bidder and was ready to work at rate fixed by respondents - moreover respondents wanted a favourable statement in pending cbi case which was instituted earlier by petitioner against respondents - thus, order of rejection set aside as being unreasonable - petition allowed - hindu law -- custom: [vijender jain, c.j., m.m. kumar, jasbir singh, rajive bhalla & rajesh bindal, jj] alienation of ancestral property - punjab and haryana - held, in respect of state of punjab by virtue of punjab amendment act, 1973 there is a complete bar to contest any alienation of ancestral or non-ancestral immovable property or appointment of an heir to such property on ground that such alienation or appointment was contrary to custom. in punjab the property in hands of a successor has to be treated as coparcenary property and its alienation has to be governed by hindu law except to the extent it is regulated by sections 6 and 30 of the hindu succession act. in haryana, property in hands of successor has to be treated as coparcenary property as well as ancestral property. parties can fall back upon hindu law in case they fail to establish that rule of decision is custom. therefore, in haryana both under hindu law and the customary law, the alienation would be open to challenge. custom was given precedent over uncodified hindu law presumably for reason that custom has been consistently replacing the hindu law. however, it was soon realized that ancestral immovable property, which ordinarily held to be inalienable amongst jats of punjab by virtue of custom except for necessity, no limitation was placed on degrees of collateral, eligible to contest such alienation. it was, therefore, felt necessary to engraft certain restriction on degrees of collateral, eligible to contest an alienation, which under the custom itself was not limited. accordingly, the punjab custom (power to contest) act, 1920 (act no.2 of 1920) was enacted. the hindu succession act was extended to the state of punjab. act 2 of punjab act defined expression alienation to include any testamentary disposition of property and appointment of an heir was to include any adoption made or purporting to be made according to custom. a further provision was made by section 3 that hindu succession act was to apply only in respect of alienation of immovable property or appointment of heirs made by persons who in regard to such alienation or appointment were governed by custom. whereas section 4 declared that hindu succession act was not to affect any right to contest any alienation or appointment of an heir made before the date on which the succession act was to come into force. in other words, act, no.2 of 1920 was not to affect alienation or appointments of heir made before date on which it came into force. it also preserved the rights of any alienation or appointment of an heir made by a family. after section 7 was inserted in act of 1920 by the punjab amendment act of 1973 right of contest being contrary to custom had been totally effaced and taken away. therefore, no person has any right to contest any alienation of immovable property whether ancestral or non-ancestral on ground of being contrary to custom after january 23, 1973. in haryana, the situation as enunciated by act no.2 of 1920 continued to prevail in respect of alienation because no reforms parallel to punjab as brought by amendment act of 1973, had been enacted although right to pre-emption has been substantially abolished in haryana also. no steps even have been taken in that regard. therefore, situation in haryana have to be regarded as it existed under act no. 2 of 1920. hindu succession act,1956[c.a.no.30/1956] -- sections 6 & 30: [vijender jain, c.j., m.m.kumar, jasbir singh, rajive bhalla & rajesh bindal, jj] alienation of coparcenary property - law laid down by full bench in joginder singh kundha singh v kehar singh dasaundha singh [air 1965 punjab 407] and pritam singh v assistant controller of estate duty, patiala [1976 punj lr 342] -whether there is any conflict? - held, the basic controversy in the full bench decision of joginder singhs case was regarding constitutional validity of section 14 of hindu succession act and as to whether it infringes article 14 of constitution. it was held that the estate held by male and limitation on his power of alienation were in no way removed and the reversioners were not debarred from challenging such alienations. the full bench held that section 14 of hindu succession act postulates that estate held by a hindu female before enforcement of succession act either by inheritance or otherwise, was enlarged and on date of enforcement of succession act, she became a full owner. likewise, if she has inherited any estate after the commencement of the act, she was to be regarded as absolute owner rather than a limited owner. consequently, the limitations on power of alienation automatically vanished. this was the necessary result of the provisions made in section 14 of the act. the full bench further held that in respect of male proprietors, no corresponding provision was made either enlarging their estate in ancestral property or enlarging their power of alienation over property inherited by them. however, it noticed section 30 and observed that it only deals with power of his share in coparcenary property by will, which prior to enforcement of the act, he had no right to do. the only provision made in respect of male proprietor regarding alienation of property was his power of alienation by will. in so far as persons governed by custom are concerned, they continued to be governed by the restriction on the power of alienation of a male holder as existed before enforcement of the act. likewise, other restriction on alienation other than disposal by will also continued. the full bench, thus, recognized the superior right of hindu females by virtue of section 14 and upheld the provision as intra vires. the argument that reversioners have ceased to exist after enactment of provisions of section 14 of succession act, was rejected as there was no provision pointed out to that effect. the proposition laid down by the full bench in pritam singhs case was that the hindu succession act has not abolished joint hindu family with respect to rights of those who were members of mitakshara coparcenary, except in the manner and to the extent mentioned in sections 6 and 30 of the act, this statement should also imply, though it does not say so expressly, the succession act to this extent does not affect the rights of the members governed by dayabhaga coparcenary. the full bench in pritam singh;s case expressly noticed the judgment of earlier full bench in joginder singhs case but construed the same as irrelevant by observing that it dealt with the power of alienation of a person governed by customary law and constitutional validity of section 14 of hindu succession act. thus there is no real conflict between the two full bench judgments. both the full bench judgments have been delivered on the assumption that joginder singhs case dealt with question of alienation whereas pritam singhs case had decided the question concerning succession. even on fact in joginder singhs case the issue was validity of alienation by consent decree by a father to his two sons, which was challenged by third son, whereas in pritam singhs case the question of nature of property in hands of sons on death of their father had arisen for purposes of assessment of estate duty. in pritam singhs case the property in the hands of the sons was held to be coparcenary property and only 1/3rd of property belonging to deceased father was considered eligible for estate duty. therefore, there was no question of alienation in pritam singhs case. - however, as a shock and surprise, vide the letter dated 21.1.2009, the tender of petitioner-company was rejected without giving any reason, despite knowing well that the company is already engaged in other civil works allotted by the hospital engineer, and that there was no complaint whatsoever pending or decided against the company. in the said judgment, this has been clearly held that the contract of the government or its instrumentality with private persons would be open to judicial review if unreasonable, unfair or irrational. ), to argue that the government is not always bound to accept the bid, and can also cancel the entire auction for good and sufficient reason. we also notice that a contract or an auction can be cancelled only for a good and sufficient reason. well after the rejection of the contract issued in favour of the petitioner on 12.1.2009. it is this plea at the hands of the respondents which lead us to conclude that the action at the hands of the respondents to cancel the contract issued in favour of the petitioner, was unreasonable, unfair and after thought.uma nath singh, j.1. writ petitioner m/s j.s. construction has prayed for the issuance of (i) writ of certiorari for quashment of the order dated 21.1.2009 (annexure p-3), rejecting his tender though it was the lowest of four bids, and (ii) writ of mandamus directing the respondents not to allot the tender to any other firm during the pendency of this writ petition, with further direction to allow the petitioner to work irt terms of his tender.2. as per the averments in the writ petition, the petitioner company is enlisted as a class-ii contractor for civil works upto rs. one crore. vide the tender notice published in hindustan times on 17.9.2008 (annexure p-2), the office of hospital engineer (civil-ii) of post graduate institute of medical education and research, chandigarh (for short 'pgimer'), invited tenders, and the petitioner-company submitted its tender on 26.9.2008 for the allotment of work of 'painting of internal walls in the circular area of advance paediatrics centre (for short the 'apc')'.. the estimated cost of work was rs. 6,14,844/-, and the time frame to complete it was within 4 months. besides the petitioner-company, five other companies also submitted their tenders. thus, in total, there were six tenderers, as follows:i) m/s j.s.construction;ii) m/s ganpathi enterprises;iii) m/s d.p.enterprises;iv) m/s vishwanath rai;v) m/s j.p.cdnstruction;vi) m/s durga enterprises.3. however, out of them only four companies participated in the tender process, and on the opening of tenders, the petitioner company was found to be the lowest bidder. thus, the superintending hospital engineer (respondent no. 3), called mr.jaspal singh, the proprietor of petitioner company, for negotiation of rates on 23.12.2008. during the negotiation, the tender rate was further brought down to the extent of coming below the justification rate, as the petitioner-company wanted to work at the rates to be fixed by the respondents. however, as a shock and surprise, vide the letter dated 21.1.2009, the tender of petitioner-company was rejected without giving any reason, despite knowing well that the company is already engaged in other civil works allotted by the hospital engineer, and that there was no complaint whatsoever pending or decided against the company. one mr. r.k. verma, who was working as hospital engineer (civil-ii) on deputation was repatriated to his parent department on 20.1.2009, and in his place, one mr. prem chandra was given the current duty charge on 21.1.2009, who while showing undue haste, rejected the tender of petitioner-company the same day i.e., 21.1.2009. this is also averred in the writ petition that on some earlier occasions, mr. jaspal singh, the proprietor of petitioner-company, had exposed the incidents of corruption in the working of engineering wing of pgimer. while the company was engaged on contractual job at the advance cardiac centre, pgi, chandigarh, one mr. sandeep kumar, xen (civil-ii), who was the incharge, demanded a bribe of rs. 30,000/-. mr. jaspal singh showed his reluctance and inability to pay the amount, however, while being threatened to be stopped from working further if the said amount was not paid, and the contract would be cancelled by black-listing the company, mr. jaspal singh approached the superintendent of police, c.b.i.,and submitted an application dated 9.5.2008 (annexure p-4), which led to the trapping and apprehension of mr. sandeep kumar, xen, while accepting the bribe. accordingly, the fir dated 9.5.2008 (annexure p-5) was registered under section 7 of the prevention of corruption act, 1988. the other occasion when mr. jaspal singh had to approach the c.b.i., related to the allotment of tender for renovation of remaining toilets of various hostel blocks in pgi campus, chandigarh. the tender was operied on 23.5.2008 and the rate quoted by the company was found to be the lowest, but the work was not allotted to it. hence, mr. jaspal singh visited the office of the superintending hospital engineer and contacted mr.santosh kataria, circle head draftsman, to enquire about the work. mr. kataria demanded rs. 25,000/- to get the allotment cleared from she. he also told that he has to give rs. 15,000/- to she and keep the remaining amount of rs. 10,000/- for himself. it appears that payment of bribe amount was made a condition precedent for allotment of work, however, when mr. jaspal singh requested mr.kataria to get his allotment letter cleared, on 26.11.2008, the later got the allotment letter for work issued. but, mr. kataria still persisted with the demand of rs. 25,000/- and asked mr. jaspal singh to deliver the amount the next day evening, i.e. 27.11.2008 in his office. hence. mr. jaspal singh again approached the superintendent of police, cbi, and submitted an application dated 27.11.2008 (annexure p-6), leading to the trapping of circle head draftsman while accepting the bribe. thus, another fir dated 27.11.2008 (annexure p-7), was registered under section 7 of the prevention of corruption act, 1988, on the complaint of mr. jaspal singh.4. in the above background, the petitioner-company has alleged that its tender was arbitrarily rejected by mr. prem chandra, hospital engineer, on 21.1.2009, the day he had assumed the charge. this is also alleged on behalf of the petitioner-company that the respondents (no.2 to 4), namely deputy director (administration); superintending hospital engineer, and hospital engineer, having connived with each other, have rejected the tender of the petitioner-company. according to the petitioner-company, there were similar other complaints of corruption in the pgimer, in as much as vide annexure p-8, the employees union had also highlighted the complaint of corruption in the institute. this is also an averment on behalf of the petitioner-company that the company is ready to work even at a further lower rate than the one already fixed by the department. according to the petitioner-company, it was the lowest bidder and in rejecting its tender vide letter dated 21.1.2009, the authorities have acted arbitrarily and in an unfair manner which would only demonstrate a mala fide exercise of powers. thus, the petitioner company has prayed that the order dated 21.1.2009 (annexure p-3) be set-aside.5. on the other hand, the respondents in their reply to the writ petition have averred that there was no binding relationship in law between the petitioner-company and the respondents in the form of a concluded contract, as defined in the indian contract act, 1872. it is also submitted that the petitioner-company had just made the offers, one by submitting the tender documents, and the other by way of its letter dated 23.12.2008 while reducing its rate below the earlier offer, and since the respondents did not accept the offers so made, there is no concluded and existing contract between the petitioner-company and the respondents. while controverting the averments made in the writ petition, this is mentioned that the director, pgimer, chandigarh had visited the apc on 28.7.2007, and having observed that the walls and main hall at the entrance of the apc building give a very dull look, had directed the same to be got painted to give a bright and pleasant look. the department of hospital engineering and planning took up the job and calculated the estimated cost at rs. 6,14,844/- on the basis of collective analysis of dsr-2007 (delhi schedule of rates-2007). this is also submitted in the reply that pursuant to the aforesaid exercise, tenders were invited through advertisement vide annexure p-2 and in response thereto, in total six companies, including the petitioner had submitted their tender documents, and out of them, only four had participated and offered their rates. on the opening of tenders, and preparation of comparative statement, the rate quoted by the petitioner company at rs. 27,46,042/- was found to be the lowest amongst all the bids made by the participating tenderers. thereafter, vide the letter dated 23.12.2008, after negotiation, the petitioner-company reduced its rate to rs. 26,73,257/-as the justified cost. however, the justified cost was also found to be 346.62% higher than the estimated cost. as the final tender amount after negotiation was found to be beyond 10% of the sanctioned amount, it was sent to the competent authority for a revised administrative approval/expenditure sanction, and a committee of the institute constituted to carry out the task of prioritization of various scheme works, desired that the whole scheme should be discussed with the principal of college of arts and work should be planned after taking their view so that modern concepts can be applied for the apc building. in this background, it was decided that the present tender be scrapped by the hospital engineer (civil-ii). the recommendation of the committee was approved by the competent authority and the decision was conveyed to the petitioner-company vide the letter dated 21.1.2009 (annexure p-3).6. with regard to allegations that two criminal cases were registered on the applications of mr. jaspal singh, the proprietor of petitioner-company, the respondents have averred in their reply that the petitioner-company always has been pressurizing the official respondents to accept its tender, and the allegations levelled by the petitioner-company are totally false and frivolous, which have been levelled just in order to harass the official respondents and to cause injury and harm to their reputation.7. thus, the respondents have prayed for the dismissal of this writ petition while maintaining that it is totally misconceived. the petitioner-company has also filed a replication to the reply, and reiterated the stand taken in the writ petition. we have heard learned counsel for the parties and perused the rival submissions.8. learned counsel for the petitioner-company has reiterated the averments made in the writ petition by contending that since mr.jaspal singh, the proprietor of petitioner company, had exposed two incidents of demand of bribe by the engineering wing of the institute, therefore, the tender of petitioner-company was rejected, even though it was the lowest bidder. this is also a submission that the act of the respondents in rejecting the lowest bid of the petitioner-company, was arbitrary and just designed to show undue favours to some other company. this is a further submission of learned counsel that the respondents want to keep the petitioner-company out of business even without following the rules of natural justice. on 21.1.2009, the day mr. prem chandra joined as hospital engineer after repatriation of mr. r.k. verma to his parent department on 20.1.2009, in an undue haste, he rejected the tender of the petitioner-company. this has created a doubt about the bonafide of the officer. learned counsel referred to the notice inviting tender (annexure p-2), to show the rate quoted for the painting of internal walls in the circular area of advance paediatric centre (apc) at pgi, as:sr. description approx. cost of earnest timeno. cost tender money limitform1. xx xx xx xx xx2. xx xx xx xx xx3. painting of internal walls 6,14,844.00 500.00 12,297.00 04in circular area of apc monthsat pgi, chandigarh.xx xx xx xx xx9. learned counsel emphatically argued that despite the fact that the tender of the petitioner-company was below the justified rate, and the company was ready to work at any reasonable rate to be fixed by the respondents, its tender was not approved and the earnest money was refunded without giving any reason. this is also a submission of learned counsel that there is no complaint whatsoever against the company, and it has been doing the civil works allotted by the hospital administration from time to time.10. learned counsel for the petitioner, to fortify his submission, placed reliance on a judgment of the apex court reported in 1995(4) r.s.j. 700 (lic of india and anr. v. consumer education & research centre and ors.), to argue that the state action in contractual field must be just, fair, and reasonable in consonance with constitutional conscience and socio economic justice. in the said judgment, this has been clearly held that the contract of the government or its instrumentality with private persons would be open to judicial review if unreasonable, unfair or irrational.11. learned counsel also cited a division bench judgment of this court, 1994(2) rev.l.r. 174, 1994(3) r.r.r. 727 (the new kotkapura truck operators' union v. food corporation of india), to submit that the tender of the petitioner-company could have been accepted after further negotiation. in the case under reference, as per tender notice, sealed tenders were invited for transport of food grains. out of three tenderers, two withdrew their tenders and only one tenderer was left in field. the corporation called for negotiation and after negotiation, the tender of sole tenderer, who remained in the fray, was approved. acceptance of such a tender was held to be valid, and the high court refused to interfere in the writ petition.12. learned counsel for the respondents also reiterated the averments made in the reply, in his contentions to counter the submissions of learned counsel for the petitioner. learned counsel in his arguments highlighted that the petitioner-company wants to pressurise the institute by dragging it in to unnecessary litigation, as that is also obvious from the fact that the petitioner-company has filed a criminal misc. no. crm-m-5063 of 2009 (jaspal singh v. ut administration and ors.) seeking directions to the superintendent of police, cbi, to investigate the complaint dated 23.1.2009 made by him. giving the background as to how the tender in question was floated, learned counsel referred to the request made by the joint medical superintendent, advance paediatric centre (apc), vide his letter dated 31.7.2007, to the superintending hospital engineer of the institute as under:it is to inform you that hon'ble director, pgimer, chandigarh, visited advanced paediatric centre, on 28.07.07 at 5.30 pm. it was observed that the main hall after entrance into apc and the walls of the floors give a very dull look. it has been desired by hon'ble dpgi that the walls be painted on the pattern of advanced eye centre.it is, therefore, requested that the walls on all the floors of advanced paediatric centre be pleased painted to give a bright and pleasant look of apc.13. according to learned counsel, the entire exercise of inviting tenders was done in pursuance of the aforesaid communication. initially, the estimated cost was calculated to be rs. 6,14,844/-, which was worked out on the basis of collective analysis of 'dsr-2007' (delhi schedule of rates-2007) for the scheduled items and the prevailing market rates for the nonscheduled items. thereafter, it was finally worked out to rs. 8,20,000/-by adding the cost index on scheduled items to the amount of estimated cost.14. in the present case, the cost index on the cost of the scheduled items was 46.99% which was included in the total estimated cost of rs. 6,14,844/- and, thus, the final figure was arrived at rs. 8,20,000/- by adding rs. 2,03,262/- (46.99% cost index upon the cost of scheduled items), to the estimated cost of rs. 6,14,844/-. hence, the sanction of the competent authority was obtained only for rs. 8,20,000/-. thus, vide the letter of hospital engineer (c-ii) no. 2933-45 dated 16.9.2008, tenders were invited through leading newspapers. the date for receiving applications was fixed on 22.9.2008, and for issuing the tenders on 24.9.2008. tenders were to be submitted till 3.00 pm, on 26.9.2008, and were to be opened at 3.30 pm, the same day. in response to the said advertisement dated 17.9.2008 (annexure p-2), in total 8 agencies applied for the issuance of tender on 22.9.2008, and after the scrutiny of applications, the tender documents were issued only to 6 agencies including the petitioner-company, on 24.9.2008. out of 6 agencies, only 4 agencies offered their rates/tender documents on 26.9.2008 at 3.00 pm, and the tenders were opened on the same day at 3.30 pm by the tender opening committee. after the opening of tenders, a comparative statement was prepared and the rate of petitioner-company quoted at rs. 27,46,042/-, was found to be the lowest amongst the 4 tenderers. however, this rate was found to be 346.62% higher than the estimated cost of rs. 6,14,844/-. as per the procedure followed by the pgimer, chandigarh, after the tenders were opened, justified cost was calculated purely on the basis of prevailing market rates, which came out to be rs. 26,73,541/- as against the sanctioned amount of rs. 8,20,000/-. thus, the rate quoted by the petitioner company was much higher as compared to the estimated cost, and the sanctioned amount. hence, the petitioner company was called for negotiations. finally, the petitioner company vide the letter dated 23.12.2008 reduced the rate to rs. 26,73,257/-, which was only 0.01% below the justified cost of rs. 26,73,541/-. as per clause 19.4.1-1 (iv) of the central public works department manual (cpwd manual), if the tender liability is more than 10% of the sanctioned cost, a revised expenditure sanction of the competent authority would be required. the said clause on reproduction reads as:19.4.1 conditions to be fulfilled before inviting/accepting tenders(1) the officers of cpwd shall invite/accept tenders only after the following conditions are fulfilled:(i) xx xx(ii) xx xx(iii) xx xx(iv) when the tender involves liability exceeding the expenditure sanction for the work by an amount greater than 10%, such excess will require a revised expenditure sanction.13. this should be applied for as soon as such an expense is foreseen. in the case of road works under administrative control of mot, department of surface transport (roads wing), an excess upto 15% of the sanctioned amount or rs. l crore, whichever is less, is permissible.xxx15. thus, as the final tender amount of petitioner company was in excess beyond 10% of the sanctioned amount of rs. 8,20,000/-, it was sent to the competent authority (director, pgi), for a revised administrative approval/expenditure sanction. it would be pertinent to mention that the quotation submitted by the petitioner on measurements taken in feet, was according to the learned counsel for the respondents in consequential because conversion of the rate from feet to meters would not have rendered the contract invalid.16. learned counsel for the respondents during the course of hearing, has placed reliance on various judgments of the apex court and the high courts in support of his contentions. he referred to a judgment of the apex court : (1982) 2 supreme court cases 365 (state of uttar pradesh and ors. v. vijay bahadur singh and ors.), to argue that the government is not always bound to accept the bid, and can also cancel the entire auction for good and sufficient reason. learned counsel also referred to another judgment of the apex court, : (2006)1 supreme court cases 751 (dresser rand s.a. v. bindal agro chem ltd., and anr.), to contend that by the act of reaching an agreement as to terms subject to which a purchase will be made, is not entering into an agreement to purchase or a contract. 'invitations of bid' by themselves are neither agreements nor contracts. process of bidding or submission of tenders would result in a contract only when a bid or offer is made by a prospective party, and such bid or offer is accepted by the first party which had invited the bid or offer. mere acceptance by the first party of modifications to its standard form offer i.e., its 'general conditions of purchase', as suggested by the other party, does not lead to the conclusion of a contract or purchase order. such acceptance of modifications to its general conditions of purchase would merely finalize the general conditions which would be applicable if and when the first party decided to place a purchase order with the supplier. by citing yet another judgment of the apex court, : (2007)1 supreme court cases 477 (rajasthan housing board and anr. v. g.s.investments and anr.), learned counsel argued that even if some defect is found in the ultimate decision resulting in cancellation of the auction, the court should exercise its discretionary power under article 226 with great care and caution and should exercise it only in furtherance of public interest. learned counsel while placing reliance on a judgment of orissa high court : a.i.r. 1990 orissa 26 (executive engineer, sundargarh r & b division and ors. v. mohan prasad sahu), argued that an advertisement calling for tenders is not a proposal, and rather, the submission of tender is only in the nature of offer, which unless accepted, would not amount to a concluded contract. learned counsel also cited a division bench judgment of gujarat high court, a.i.r. 1981 guj 117 (prabhudasbhai bhikhabhai patel v. state of gujarat and ors.), to contend that the high court is not to sit in appeal against the administrative decision to award or not to award a contract and substitute its own decision for the decision taken by the state government. the decision to award contract can be quashed and set-aside provided it is established that the decision is arbitrary and discriminatory, so as to attract article 14 of the constitution. merely because the lowest bid is not accepted, it cannot be said that the decision is rendered arbitrary. learned counsel also cited a judgment of manipur high court, a.i.r. 1962 manipur 47 (nameirakpam pishak singh v. forest officer, manipur forest department and ors.), to urge that a tender notice means only an invitation extended to the contractors for making offers and it does not amount to an offer or proposal and the quotation of rates offered by the contractor does not amount to an acceptance of offer or proposal, thereby creating any promise or agreement.17. it is by the acceptance of any of those offers or proposals by the person calling for tenders that it becomes promise or an agreement. mere fact that a person made certain quotations in response to the tender notice even granting that it was the lowest quotation, will not in any manner, create an obligation on the person who issued the tender notice. there is no duty cast on such a person to accept any of the tenders or quotations or even the lowest bid made in response to the tender notice.18. learned counsel for the respondents also referred to a judgment of this high court in : (1995-2)110 p.l.r. 467 (haryana financial corporation and anr. v. m/s bhagat foods private limited and anr.), to argue that merely by giving a bid, the bidder does not acquire a vested right, and there is no completed contract until the bid is accepted.19. on a careful consideration of rival submissions, we notice that this is now settled by the judgment of apex court (supra), cited by learned counsel for the petitioner, that a contract between the government or its instrumentality with private persons would be open to judicial review if found to be unreasonable, unfair or irrational. we also notice that a contract or an auction can be cancelled only for a good and sufficient reason. besides, this is also evident that a tender can be accepted after further negotiation between the parties. in these premises, if we examine the case in our hand, we find a considerable force in the submission made on behalf of the petitioner-company, as noticed herein above. indisputably, the petitioner-company was the lowest bidder; the rate given by the company was initially more than the justified rate, which was successfully brought down after negotiation, and the petitioner-company is ready to work at a rate to be fixed by the respondents. we also notice that the petitioner-company has been given other contracts of civil works by the institute, and there is no complaint whatsoever to cause any dissatisfaction to the respondents. this is evident from the facts narration that the consultation with the principal of arts college was done only in the month march, 2009, after the rejection of tender on 21.1.2009 and filing of this writ petition. it would have been appropriate on the part of the respondents to have consulted the principal of arts college before taking a decision to reject the tender of the petitioner which was admittedly the lowest bid. we also notice that mr. jaspal singh, the sole proprietor of petitioner-company had lodged two complaints against the demand of bribe by officers of the engineering wing of the institute and pursuant thereto, two firs had been registered under section 7 of the prevention of corruption act. this also appears that the respondents wanted a favourable statement from mr. jaspal singh in those cbi cases before granting the acceptance of his tender. besides, the rate quoted by the petitioner-company was per square meter, whereas, the justified cost was calculated by the respondents on the basis of per square feet. thus, the justified rate if calculated on the basis of per square feet by the respondents would have gone 11 times higher than the rate quoted by the petitioner company.in its replication, the petitioner-company has averred as:.that the averments made in sub-paras (d & e) of para 4, it is stated that the amount of rs. 27,46,042/-, as quoted by the petitioner, was 346.62% was not higher than estimated cost. rather, respondents have miscalculated the amount. the amount given by the petitioner was as per square meters. when the justified cost was assessed by the department, they found mistake qua the measurement i.e., rather than in square meters, it was to be shown/published as square feet. this affected 11 times, the rate quoted by the respondents. keeping in view the above facts, the petitioner quoted the rate in square meter, which is not at higher side. for further clarification, one square meter is equal to 10.76 square feet. the rate given for the construction is rs. 3100/-per square meter. the justified case made by the department for the same item is rs. 3204 square meter which comes to rs. 26,73,541/-., i.e. total cost. the rates quoted by the petitioner come to rs. 27,46,042/-. the negotiation were held on 23.12.2008 and petitioner was asked to reduce the rate. thus, it was agreed by the petitioner to reduce the rate by .01% below the justified cost of rs. 26,73,541/-. thus, final amount of petitioner comes to rs. 27,73,257/-. so, rs. 7250/- was reduced by the petitioner. therefore, the rate of construction given by the petitioner was not at higher side, i.e. 346.62%. rather, the same was miscalculated by the respondents....20. there is no dispute that the impugned order of rejection of bid by the pgimer, an instrumentality of the state, is subject to judicial review as it suffers from unreasonableness and arbitrariness. the tender of petitioner-company was rejected in a background of complaints made by mr.jaspal singh, the proprietor of the company, with the cbi against the demand of bribe by the engineering wing of pgimer by one prem chandra, who joined the post of hospital engineer on 21.1.2009 and the same day, without proper application of mind and knowing the background, rejected the tender of the petitioner-company. this is unreasonable also for the reason that the petitioner's bid was the lowest and there was no complaint whatsoever against the working of the company which has already been given some other contracts of civil works by the pgimer. even vide annexure r-l, on 1.4.2009, some more work was allotted to the petitioner-firm by the respondents after the rejection of tender in question. besides, the petitioner-company is also ready to work at a rate to be fixed by the respondents. the plea of the institute that a committee headed by the director, had decided to consult the principal, arts college, also does not find favour with us. in fact, it seems to us to be an after thought at the hands of the respondents so as to defeat the claim of the petitioner. in order to substantiate the instant plea, learned counsel for the respondents has placed reliance on annexure r-l appended to the written statement, which is a communication dated 31.7.2007, addressed by the joint medical superintendent, advance paediatric centre of the pgi, to the superintendent hospital engineer, which is being extracted hereunder:fromjoint medical superintendent,advance paediatric centre,pgimer, chandigarh.tosuperintendent hospital engineer,pgimer, chandigarh.subject: regarding painting of internal walls of apc on the pattern of advanced eye centre.it is to inform you that hon'ble director, pgimer, chandigarh visited advanced paediatric centre, on 28.7.2007 at 5.30 p.m. it was observed that the main hall after entrance into apc and the walls of the floors give a very dull look. it has been desired by hon'ble dpgi that the walls be painted on the pattern of advanced eye centre.it is, therefore, requested that the walls on all the floors of advanced paediatric centre be please painted to give a bright and pleasant look of apc. an early action is requested please.thanking you,sd/-31.7.2007joint medical superintendent,advance paediatric centre,pgimer, chandigarh.21. the tender in question was floated on 17.9.2008, whereas, the communication relied upon is dated 31.7.2007. all the deliberations which ought to have been conducted on the basis of the aforesaid communication must have essentially culminated before issuance of the aforesaid tender notice. additionally, it would be pertinent to mention that the principal of arts college was consulted in march, 2009 i.e. well after the rejection of the contract issued in favour of the petitioner on 12.1.2009. it is this plea at the hands of the respondents which lead us to conclude that the action at the hands of the respondents to cancel the contract issued in favour of the petitioner, was unreasonable, unfair and after thought.22. in view of all the aforesaid, we quash the rejection order dated 21.1.2009 (annexure p-3), and allow this writ petition without costs, with a direction to the respondents to fix the justified rate after making proper calculation and further negotiation, if any, although admittedly the tender of the petitioner-company is the lowest of four bids submitted by the participating tenderers.