Shri Mateshwari Indrani Construction Company Private Limited Vs. the State of Rajasthan and ors. - Court Judgment

Excerpt:
- - 3 recommended the case of the petitioner for award of contract to the dy. 18.9.2006 for the same revenue villages for same nature of contract with the same terms and conditions without either cancelling th bid of the petitioner given earlier and recommended for award of contract or forfeiting his security deposit and new tenders were slated to be opened on 25.9.2006. upon coming to know of this, the petitioner immediately submitted an application on 18.9.2006 itself to the respondent no. 130 lacs and thus being the lowest, its case was recommended by the respondent no. 5.90 lacs, they ought not have to opened the financial bid and disclosed bid of the petitioner at 5% of the expected revenue to other parties and thereafter cancelling the entire nit process and issuing fresh nit in which one of the earlier participants admittedly gave higher bid after knowing the bid of the petitioner and this showed that the respondents clearly wanted to give a helping hand to such bidders and without any cogent reason and without rejecting the bid of the petitioner, the whole process was cancelled. 3 and the petitioner had duly complied with the deposit of 1/12th of the expected revenue and his case was duly recommended for award of contract by the respondent no. it might be more beneficial to the revenue department to collect more assured revenue with less of leakages as the private parties who are required to pay minimum guarantee amount to the revenue department, but at the same time, such practice has generated lot of difficulties also, like excess collections, non-payment of revenue to the department, ensuing litigations etc. such practice also results in the case like one in hand before this court, where the nits are issued by 2nd and 3rd rank officers in the department wherein some mistakes or mischiefs keep on creeping resulting in litigation, loss of revenue etc. 9. the tenders in the present case given by the petitioner undisputably satisfied the condition of tender as published by the resondent no. on the other hand, he admittedly recommended the case of the petitioner for award of contract to the head office vide letter dtd. commissioner (administration), commercial taxes department, bhilwra and the same is not even addressed to the petitioner nor a copy of the same is endorsed to him. this prima facie makes mockery of the tender process itself and still this bidder's case was recommended by the respondent no. 26.9.2006. if the wisdom would not have prevailed and even the said bid was accepted as well as entire tender process dtd.vineet kothari, j.1. the petitioner by way of present writ petition under article 226 of the constitution of india has challenged cancellation of notice inviting tender issued by the dy. commissioner (administration), commercial taxes department, bhilwara for awarding contract on behalf of the state government for collection of tax on minerals (chheja patthar) for revenue tehsil bhilwara, shahpura, baneda, mandal, jahajpur, asind, mandalgarh, kotdi, sahada, raipur, and hurda in bhilwara district vide notice inviting tender dtd. 22.8.2006 for annual expected revenue of rs. 130 lacs. the tenders were to be opened on 31.8.2006 at 4.30 p.m. the award of contract were to be given for tax collection charges on percentage basis on aforesaid expected revenue of rs. 130 lacs and the petitioner gave the said bid on 30.8.2006 along with the demand draft no. 1183736 dtd. 30.8.2006 for a sum of rs. 5,10,000/- towards earnest money as vide column no. 5 of the nit annex.1 dtd. 22.8.2006, the said security money was stipulated to be rs. 5.09 lacs. on 31.8.2006, when the tenders of different bidders were opened, the tender of the petitioner was found to be lowest at 5% collection charges and accordingly as per the terms of the nit, the petitioner was required to deposit balance sum of rs. 5,73,333/- vide letter annex.2 dtd. 31.8.2006 of the dy. commissioner (administration) commercial taxes department, respondent no. 3 to make the deposit of 1/12th of the expected revenue of rs. 130 lakhs, which came to rs. 10,83,333/-. the petitioner accordingly deposited the said balance sum of rs. 5,73,333/- through dd no. 10094 dtd. 1.9.2006 for a sum of rs. 5,74,000/- with the respondent no. 3. in the communication annex. 2 dtd. 31.8.2006, the respondent no. 3 also stated that the bid of the petitioner for tax collection charges was fond to be lowest than other six bidders, therefore, he may deposit the said balance amount. 2. according to the petitioner, the respondent no. 3 recommended the case of the petitioner for award of contract to the dy. commissioner (anti evasion), commercial taxes, jaipur vide annex.4 dtd. 2.9.2006 in which it was also pointed that in the nit issued by the respondent no. 2 on 22.8.2006, the earnest money was wrongly shown as rs. 5.09 lacs as against rs. 5.90 lacs and the correction was duly published in 'rajasthan patrika' and 'dainik bhaskar' on 29.8.2006. however, the said amendment could not be published on the website of the commercial taxes department. however, since the petitioner's tender was lowest, and he had deposited complete amount of 1/12th of the expected amount of rs. 130 lacs, he may be awarded the contract in question. the respondent no. 3 also conveyed the representation of one mr. makkhan lal khoiwal, tilak nagar against the said tender process dtd. 31.8.2006 who had also participated in the said tender process and his bid was found to be 7.77% against the bid of the petitioner at 5% of the expected revenue. it is further the case of the petitioner that while he was awaiting for final award of the contract by the commissioner, commercial taxes department under section 77 of the act, to the utter surprise of the petitioner, the petitioner found another nit published in the newspaper dtd. 18.9.2006 for the same revenue villages for same nature of contract with the same terms and conditions without either cancelling th bid of the petitioner given earlier and recommended for award of contract or forfeiting his security deposit and new tenders were slated to be opened on 25.9.2006. upon coming to know of this, the petitioner immediately submitted an application on 18.9.2006 itself to the respondent no. 3 for supply of copy of letter recommending his case for award of contract to the commissioner and the copy of the order of rejectionof his bid or offer, if any. in pursuance of this, the respondent no. 3 informed the petitioner vide annex.7 letter dtd. 4.10.2006 of the dy. commissioner(administration), anti evasion, jaipur that the respondent no. 3 dy. commissioner (administration), bhilwara had not sanctioned the contract on 31.8.2006 in favour of the petitioner. thereafter the petitioner approached this court by way of present writ petition. 3. the respondents have contested this writ petition by filing reply to the writ petition and also additional affidavit of the commissioner, commercial taxes as directed by this court on 7.5.2008. the respondents have produced with their reply copy of order of the commissioner, commercial taxes dtd. 14.9.2006 addressed to the respondent no. 3 dy. commissioner (administration), bhlwara that that in nit issued by the respondent no. 3, amount of security deposit was wrongly mentioned at rs. 5.09 lacs as against 5.90 lacs and the amended notification was not published in all the editions of daily news-paper dainik bhaskar/rajasthan patrika and also on the website of the department, therefore, the nit dtd. 22.8.2006 was cancelled and the process of award of contract was unnecessarily delayed and therefore, he was warned to be careful in future. the respondents have also produced on record a copy of letter of the respondent no. 3 dtd. 26.9.2006 annex.r/5 by which the said respondent no. 3 in pursuance of fresh nit issued on 18.9.2006 inviting tender on 25.9.2006, forwarding to the head-office the bid of 5 of the bidders in which one of the bidder m/s kanchan india tax feb. pvt. ltd., bhilwara gave bid of 0.01% of the expected revenue of rs. 130 lacs and thus being the lowest, its case was recommended by the respondent no. 3 for award of the contract. the other bidders who had participated in earlier nit process also, namely, shaukat khan, gulabpura as against his earlier bid of 8% gave bid of 3.77% and sh. makkhan khoiwal, tilak nagar, bhilwara as against the earlier bid of 7.77%, gave bid of 14.77%. the commissioner in his additional affidavit filed in this regard on 20.5.2008 in the court has stated that even the second nit issued on 18.9.2006, in which lowest bid of 0.01% was given by one of the bidder has also been cancelled on 17.10.2006 vide annex.e filed with the said affidavit as the said bid though found lowest, was not found to be feasible by the said authority. the respondents have however, justified cancellation of the earlier nit dtd. 22.8.2006 in which the bid of the petitioner was found to be lowest at 5% of expected revenue. 4. mr. vikas balia, learned counsel appearing for the petitioner vehemently submitted that the whole process of cancellation of earlier nit dtd. 22.8.2006 was illegal and arbitrary and the same was done with oblique motive of helping other bidders. he submitted that the petitioner had complied with the conditions of nit and the bonafide error in giving out the security amount of 5.09 lacs as against 5.90 lacs could not be a reason for cancelling the entire tender process once the financial bids were opened on 31.8.2006 and the petitioner was asked to deposit the balance amount to make total deposit of rs. 1/12th of expected revenue vide letter annex.2 dtd. 31.8.2006. the petitioner immediately deposited the same and in fact, the petitioner's bid was never rejected by the respondents and they arbitrarily issued fresh nit on 18.9.2006 without either cancelling the tender of the petitioner or rejecting his bid and informing the petitioner about the same. he further contended that once the department had corrected the mistake and issued amended notification on 29.8.2006 correcting the amount of security deposit of rs. 5.90 lacs, they ought not have to opened the financial bid and disclosed bid of the petitioner at 5% of the expected revenue to other parties and thereafter cancelling the entire nit process and issuing fresh nit in which one of the earlier participants admittedly gave higher bid after knowing the bid of the petitioner and this showed that the respondents clearly wanted to give a helping hand to such bidders and without any cogent reason and without rejecting the bid of the petitioner, the whole process was cancelled. he submitted that under clause 46 of the conditions of nit, the respondent - commissioner had power to reject any tender with or without assigning any reason, but he had no power to cancel the whole tender process without giving valid reasons. he further submitted that it was not shown by the respondents that any prejudice to any person was caused on account of aforesaid mistake of the respondent no. 3 and the petitioner had duly complied with the deposit of 1/12th of the expected revenue and his case was duly recommended for award of contract by the respondent no. 3. without any intimation and information to the petitioner much less an opportunity of hearing to the petitioner, cancellation of the nit was illegal and arbitrary. he further submitted that notwithstanding the cancellation of said entire subsequent nit process, there is no reason why the petitioner could not even be now awarded contract in pursuance of earlier nit dtd. 22.8.2006. he, therefore, prayed that appropriate directions be issued to the respondents in this regard. 5. on the side opposite, mr. vineet mathur, the learned counsel appearing for the respondents submitted that it is within the discretion of the respondents to cancel the nit or reject any tender of any party with or without assigning any reason and the petitioner cannot take exception to the same. he further contended that on account of aforesaid mistake in the amount of earnest money in the earlier nit of rs. 5.09 lacs instead of rs. 5.90 lacs and the amendment therein being not duly published on the website of the department and all editions of news-papers, the earlier tender process was rightly cancelled and fresh notice inviting tender was issued. he also submitted that since in the fresh tender process also, one of the bidder has given bid at 0.01% of the expected revenue of rs. 130 lacs, which comes to rs. 1300/- merely for one year, the said bid was not found to be feasible and even the second nit process was cancelled. he also submitted that 1/12th of the excepted revenue deposited by the petitioner could be refunded back to the petitioner and he may approach the respondents for the same. he thus, prayed for rejection of the writ petition. 6. i have heard the learned counsel for the parties at length and perused the record.7. while it is trite law that in contractual mattes, the court's interference in writ jurisdiction can be on very limited grounds and usually the court does not interfere in such matters, but at the same time, it is equally true that the decision making process of the authorities of the commercial taxes department is not beyond the realm of judicial review under article 226 of the constitution of india even in sphere of contractual matters. 8. recently found mantra by the commercial taxes department of assigning even sovereign function of collection of tax revenue to the contractors is a doubtful process through which private parties are assigned such sovereign functions. it might be more beneficial to the revenue department to collect more assured revenue with less of leakages as the private parties who are required to pay minimum guarantee amount to the revenue department, but at the same time, such practice has generated lot of difficulties also, like excess collections, non-payment of revenue to the department, ensuing litigations etc. the trend of the department of assigning and delegating its main and primary function of collection of tax revenue to the private persons while their staff members sit in their offices and 'earn' their salary from the state is not a wholesome and constitutionally approved practice, though statutorily it may be permissible to do so. this court has its own doubt whether such a practice deserves to be appreciated. such practice also results in the case like one in hand before this court, where the nits are issued by 2nd and 3rd rank officers in the department wherein some mistakes or mischiefs keep on creeping resulting in litigation, loss of revenue etc. while it is for the state government and the concerned revenue department to have introspection in this regard, this court would concern itself with the merits of the case in hand. 9. the tenders in the present case given by the petitioner undisputably satisfied the condition of tender as published by the resondent no. 3 vide annex.1 nit dtd. 22.8.2006. when his bid was found to be lowest on opening of the tenders on 31.8.2008, the petitioner deposited balance amount also to make complete deposit of security at 1/12th of the expected revenue of rs. 130 lacs. by that date, the mistake of amount of earnest money at rs. 5.09 lacs as against rs. 5.90 lacs was also detected and amended by the respondent - department with its due publication in the news-paper, though not in all editions of such newspapers and on the website of the department. however, it has not been shown by the department in any manner that any prejudice was caused to anybody including the department itself on account of aforesaid mistake. therefore, the fresh nit issued by the commissioner is not found to be justified in the present csae. the said initial deposit of earnest money was to form part of total 1/12th of expected revenue of rs. 130 lacs. the financial bid was admittedly lowest in the case of the petitioner at 5% of expected revenue and the petitioner also complied with the conditions of the nit. nothing against the petitioner was even otherwise found or alleged by the respondents in the present case. as a mater of fact, the bid of the petitioner was never rejected by the respondents. the only communication to the petitioner before filing of the writ petition in this regard vide annex. 7 dtd. 4.10.2006 makes no sense. the communication dtd. 4.10.2006 annex. 7 of dy. commissioner (administration) anti evasion, jaipur that dy. commissioner (administration), bhilwara did not sanction the said contract on 31.8.2006 is neither here nor there. the dy. commissioner (administration), bhilwara was not even competent authority to accept the bid and award contract. on the other hand, he admittedly recommended the case of the petitioner for award of contract to the head office vide letter dtd. 2.9.2006. the impugned communication annex.r/4 dtd. 14.9.2006 is an internal communication by the department of the commissioner, commercial taxes department, jaipur to the dy. commissioner (administration), commercial taxes department, bhilwra and the same is not even addressed to the petitioner nor a copy of the same is endorsed to him. therefore, it is liable to be inferred that the petitioner was not in know of it and it is only when fresh nit was issued and published on 18.9.2006 that the petitioner came to know about the same. 10. this court is also rather surprised of the subsequent nit issued by the respondent no. 3 on 18.9.2006, in response to which five bidders gave bind and one of them m/s kanchan india tax feb pvt. ltd, bhilwara gave bid of 0.01% of expected revenue collection which comes to rs. 1300/- only. this prima facie makes mockery of the tender process itself and still this bidder's case was recommended by the respondent no. 3 dy. commissioner (administration) commercial taxes department, bhilwara vide annex.r/5 dtd. 26.9.2006. if the wisdom would not have prevailed and even the said bid was accepted as well as entire tender process dtd. 25.9.2006 would not have been cancelled by the department vide annex.e dtd. 17.10.2006, one can only guess what would have happened to such a contract. this court also takes note of the fact that two of the tenderers who earlier participated, one reduced his bid from 8% to 3.77% (shaukat khan, gulabpura) and another increased his bid from 7.7% to 14.77%. the petitioner did not obviously participate in the second nit. the said person sh. makkhan lal khoiwal had made a complaint against the earlier tender which was also forwarded by the respondent no. 3 while recommending the case of the petitioner to the head office vide annex.4 dtd. 2.9.2006. therefore, it is clear that the said person after knowing the bid of the petitioner at 5% ventured to increase the bid from 7.77% to 14.77%. this court need not comment more on that. 11. now a brief reference to the judgments cited at the bar would also be opportune. 12. in a recent decision in the case of reliance energy ltd. and anr. v. maharashtra state road development corporation ltd. and ors. reported in : (2007)8scc1 evolving the concept of 'legal certainty' and 'level playing field', the hon'ble apex court held that if there is vagueness or subjectivity in the norms specified it may result in unequal and discriminatory treatment and violate the doctrine of 'level playing field'. expression of difference of opinion, if any, in exercise of contractual powers by the state must be based on specified norms and these norms may be legal or accounting norms. as long as the norms are clear and properly understood by the decision maker and the bidders and other stakeholders, uncertainty and thereby breach of rule of law will not arise. in order to provide certainly, the norms/standards specified should be clear. the court thereafter proceeded to hold that the petitioner reliance energy ltd. be permitted to reparticipate in the bidding process and the decision of bombay high court was set aside. 13. this court in the case of kesu lal mehta v. rajasthan tribal areas development cooperative federation ltd. and ors. reported in differentiating between condition subsequent and condition precedent in the matter of government contracts held that if there is condition in the tender notice requiring to submit documents alongwith the tender, such type of conditions cannot be termed as condition precedent, but it can be termed as condition subsequent. since it is a condition subsequent, that can be relaxed by the concerned authority and tenderer can be asked to submit documents later on otherwise his offer would stand cancelled. 14. in the present case also, it is found that furnishing of security deposit to the extent of 1/12th of the expected revenue including the earnest money was though a condition for the award of contract in favour of the bidders, yet since the said 'condition subsequent' stood complied by the petitioner, there is no breach of condition precedent found in the present case so as to disentitle the petitioner from getting the said contract. even the condition of payment of earnest money was complied with by the petitioner as per nit, which stood amended by making deposit of balance amount in pursuance of communication by the respondents. as against this, the reliance placed by the learned counsel for the department in th case of rajasthan housing board and anr. v. g.s. investments and anr. reported in : (2007)1scc477 in which it was held that in the case of sale of plots by the rajasthan housing board by means of auction is essentially a commercial transaction and even if some defect was found in the ultimate decision resulting in cancellation of the auction, the court should exercise its discretionary power under article 226 of the constitution of india with great care and caution and should exercise it only in furtherance of public interest. this judgment with great respects is of no help to the respondents in the present case because the petitioner before this court is not against the ultimate decision of the respondents, but is rather against the nondecision or inaction on his offer or bid which was not rejected by respondents and inviting of new tenders by fresh nit has been challenged by the petitioner in the present case. 15. on the basis of aforesaid facts and law cited, this court is of the clear opinion that the respondents were not justified in inviting fresh tenders on 18.9.2006 without intimating their decision on the tender and bid of the petitioner which was forwarded by the respondent no. 3 to the head-office for acceptance and award of contract on 2.9.2006. admittedly, the bid of the petitioner was lowest and was not found to be unfeasible by the respondents. nothing adverse against the petitioner has been pointed out by the respondents. no prejudice on account of an inadvertent mistake in mentioning of amount of earnest money in the nit dtd. 22.8.2006 at rs. 5.09 lacs against rs. 5.90 lacs is shown to have been caused to anybody and same having been amended prior to opening of tender on 31.8.2006, the reason assigned by the respondents for cancellation of nit dtd. 22.8.2006, namely, insufficient publication in all the editions of of rajathan patrika and dainik bhaskar of rajasthan and on the website of the department is not found to be justified. the subsequent nit dtd. 18.9.2006 has admittedly been cancelled by the respondents and is, therefore, of no consequence in the present case. 16. accordingly this writ petition is allowed. the impugned order dtd. 4.10.2006 (annex.7) and annex.r/4 dtd. 14.9.2006 are quashed and the respondents are directed to undertake necessary formalities within two months for award of contract in pursuance of nit annex.1 dtd. 22.8.2006 for a period of one year from the date of award of contract to the petitioner. no order as to costs.