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Wednesday, June 10, 2015

whether on account of submission of an invalid certificate, the tender of the petitioner can be liable to be rejected automatically without notice to it or whether the relief prayed for by the petitioner can be granted to it having regard to the facts and circumstances of the present case. Condition No.23(4) relating to procedure for bid submission enables the tenderer to submit hard copies of the documents. Therefore, apart from submitting the bid electronically, the petitioner is also permitted to submit hard copies of the documents. From this, it can be understood clearly that the 2nd respondent-Corporation intends to verify the documents thoroughly and a tender will be liable for rejection only after proper verification of all the documents. Therefore, it cannot be said that the tender conditions do not permit the petitioner to explain the ambiguity in any document or to furnish a correct document in case if a wrong document was submitted by mistake. . After passing of the interim order by this Court in W.P.M.P.No.8478 of 2015, dated 12-3-2015, the petitioner submitted a Permit Certificate in respect of the vehicle bearing registration No.AP13X 3012 and the 2nd respondent-Corporation on verification found it to be valid up to 23-10-2019. In Government contracts, interference of this Court in exercise of jurisdiction under Article 226 of the Constitution of India would be justified when not only it is arbitrary and mala fide but also when the procedure is unfair, unreasonable and irrational. Since obviously the petitioner is the lowest tenderer disqualifying it on purely technical ground without affording an opportunity to produce the genuine certificate and awarding the contract to the 4th respondent cannot be said to be the result of a fair decision making process nor is it in the interest of the 2nd respondent-Corporation. For the foregoing reasons, the 2nd respondent- Corporation is directed to award contract to the petitioner pursuant to the Re-Tender Notice dated 28-02-2015 for the year 2015-16 of Ranga Reddy district in the State of Telangana. This writ petition succeeds and the same is allowed. The miscellaneous petitions, if any, pending in this writ petition shall stand closed. No costs.

 whether on account of submission
of an invalid certificate, the tender of the petitioner can
be liable to be rejected automatically without notice to it
or whether the relief prayed for by the petitioner can be
granted to it having regard to the facts and
circumstances of the present case.
 Condition No.23(4) relating to procedure for bid
submission enables the tenderer to submit hard copies of
the documents.  Therefore, apart from submitting the bid
electronically, the petitioner is also permitted to submit
hard copies of the documents.  From this, it can be
understood clearly that the 2nd respondent-Corporation
intends to verify the documents thoroughly and a tender
will be liable for rejection only after proper verification of
all the documents.  Therefore, it cannot be said that the
tender conditions do not permit the petitioner to explain
the ambiguity in any document or to furnish a correct
document in case if a wrong document was submitted by
mistake.
    . After passing of the interim order by this Court
in W.P.M.P.No.8478 of 2015, dated 12-3-2015, the
petitioner submitted a Permit Certificate in respect of the
vehicle bearing registration No.AP13X 3012 and the
2nd respondent-Corporation on verification found it to be
valid up to 23-10-2019.  In Government contracts,
interference of this Court in exercise of jurisdiction under
Article 226 of the Constitution of India would be justified
when not only it is arbitrary and mala fide but also when
the procedure is unfair, unreasonable and irrational.
 Since obviously the
petitioner is the lowest tenderer disqualifying it on purely
technical ground without affording an opportunity to
produce the genuine certificate and awarding the
contract to the 4th respondent cannot be said to be the
result of a fair decision making process nor is it in the
interest of the 2nd respondent-Corporation.

   For the foregoing reasons, the 2nd respondent-
Corporation is directed to award contract to the petitioner
pursuant to the Re-Tender Notice dated 28-02-2015 for
the year 2015-16 of Ranga Reddy district in the State of
Telangana.  This writ petition succeeds and the same is
allowed.  The miscellaneous petitions, if any, pending in
this writ petition shall stand closed.  No costs.


HONBLE SRI JUSTICE R.KANTHA RAO      

Writ Petition No.6375 of 2015

01-6-2015

M/s. New Hyderabad Medak Transport, Hyderabad, Rep. by its Managing Partner  
Mohd. Jaweed Ahmed Petitioner  

The State of Telangana, Rep. by its Prl. Secretary to the Consumer Affairs,
Food and Civil Supplies,  Secretariat Building, Hyderabad; and 3 others
Respondents

Counsel for Petitioner: Sri Mummaneni Srinivasa Rao

Counsel for Respondent No.1: Government Pleader
                                for Civil Supplies    
Counsel for Respondents 2&3: Sri A.Ravinder Reddy,
                             Standing Counsel.
Counsel for Respondent No.4: Sri T.Srikanth Reddy

<Gist:

>Head Note:

? Cases referred:
1. (1993) 1 SCC 71
2.      (1995) 1 SCC 478
3.      2012 (1) ALT 482
HONBLE SRI JUSTICE R.KANTHA RAO      

Writ Petition No.6375 of 2015

Date: 01-6-2015


HONBLE SRI JUSTICE R.KANTHA RAO      

Writ Petition No.6375 of 2015

Order:

     The 2nd respondent-Corporation has called for
tenders for transportation of food grains, pulses or any
other commodities from various places within and
outside the district to various places within and outside
the district under Stage-1 excluding the transportation to
fair price shop points for the year 2015-16 vide
Re-Tender Notice dated 28-02-2015.  The petitioner
participated in the tenders and submitted all necessary
documents.  The tenders were opened on 10-3-2015.
It is submitted by the petitioner that the tender of the
petitioner was rejected on flimsy ground that it has not
produced the Permit Certificate for lorry bearing
registration No.AP13X 3012.  As per the Tender
Conditions, the tenderer shall have 18 vehicles with
Permit Certificates.  The petitioner has 12 own vehicles
and 6 hired vehicles and all the vehicles have valid
Permit Certificates.  The petitioner submitted Earnest
Money Deposit of Rs.15 lakhs by means of a Demand  
Draft.  On evaluation, the petitioner was found to be the
lowest tenderer having quoted -5.03% on the existing
rates.
     2. According to the petitioner, the 2nd respondent-
Corporation with an intention to help another Contractor
deliberately rejected the tender of the petitioner without
informing it about the fact that one of the Permit
Certificates relating to a particular vehicle was expired.
It is the version of the petitioner that it was a long time
contractor of the Corporation and on several occasions,
the Corporation after verifying the documents gave
opportunity to the tenderers to produce the originals
if there is any discrepancy but at no point of time, the
tender was rejected except when the Tender Conditions
are not fulfilled.  It is submitted that in respect of the
vehicle the Permit Certificate of which was found to be
expired, it is said that the Permit Certificate is valid up to
23-10-2019 and according to the petitioner, the rejection
of its tender on the ground that the petitioner does not
possess valid Permit Certificate is untenable and illegal.
It is under these circumstances, the petitioner filed the
present writ petition for a Writ of mandamus declaring
the action of the respondents-Corporation in rejecting the
tender filed by it for Ranga Reddy district for Stage-I
Contract as per the Re-Tender Notice dated 28-02-2015
as illegal, arbitrary and violative of Articles 14 and 19 of
the Constitution of India and to award the contract in its
favour in case the petitioner is found to be the lowest
bidder and pass appropriate orders.

     3. In miscellaneous petition W.P.M.P.No.8478 of
2015 filed by the petitioner, on 12-3-2015, this Court
passed an interim order directing the petitioner to
produce the Permit Certificate before the 2nd respondent
and on production of such Certificate, the 2nd respondent
was directed to consider the tender application of the
petitioner subject to its fulfilling the requisite Tender
Conditions.
     4. Subsequently, on hearing both sides,
on 12-3-2015, this Court passed an interim order to the
effect there shall be status quo in regard to the tender
process.
     5. Sri Venkatarama Lorry Transport, Nalgonda,
represented by its Proprietor K.Balaraju filed an implead
petition i.e. W.P.M.P.No.10464 of 2015 contending that
the Tender Committee declaring it as L1 Tenderer closed
the tender process and that the respondent authorities
cannot once again reopen the e-procurement tender.
Accordingly, the implead petition was allowed and
Sri Venkatarama Lorry Transport was brought on record
as respondent No.4.  According to the implead petitioner,
the technical bids were opened on 10-3-2015 and the
technical bid of the writ petitioner was rejected for
non-submission of relevant documents i.e. Permit
Certificate for the vehicles intended to be used in
transportation contract and after finalization of technical
bids on the same day, the price bids were opened and the
implead petitioner was declared as L1 Tenderer and
therefore, the petitioner is not entitled to claim any relief
in the writ petition.
     6. The respondents 2 and 3-Corporation filed
a counter affidavit contending, inter alia, as follows:
     (a) The tender of the petitioner was rejected on the
ground that the Permit Certificate for the vehicle bearing
registration No.AP13X 3012 was not valid due to its
expiry.  The petitioner was therefore disqualified for
submitting the expired Permit Certificate for one lorry
and the remaining 4 tenders were declared technically
qualified and financial bids were opened.  The Tender
Committee evaluated that Sri Venkatarama Lorry
Transport is the L1 Tenderer.  While so, pursuant to the
direction of this Court, the petitioner submitted the
original Permit Certificate along with the orders passed in
W.P.M.P.No.8478 of 2015 to the respondent-Corporation.
On receipt of the interim orders along with the
representation of the petitioner, the Corporation has
written a letter to the IT Secretary to provide necessary
technical help to open the financial tender and evaluate
the tender of the petitioner as directed by this Court.
It is submitted that the IT Secretary has directed the
Service Provider to restage the tender of the petitioner in
the technical stage for further evaluation process by the
Corporation.  It is further submitted that the Permit
Certificate produced by the petitioner for the vehicle is
valid up to 23-10-2019.
     (b) Contending as above, the 2nd respondent-
Corporation stated that it may be permitted to evaluate
and award the contract at the earliest so as not to
hamper the distribution of essential commodities under
Public Distribution System as the tender called for is for
the purpose of transportation of food grains.

     7. I have heard Sri Mummaneni Srinivasa Rao,
learned counsel appearing for the petitioner, the learned
Government Pleader for Civil Supplies for the State of
Telangana appearing for the 1st respondent,
Sri A.Ravinder Reddy, learned Standing Counsel for the
respondents 2 and 3-Corporation and Sri T.Srikanth
Reddy, learned counsel appearing for the impleaded
party-respondents No.4.
     8. But for the decision of the Tender Committee,
disqualifying the petitioner on the ground that photocopy
of the Permit Certificate produced in respect of the
vehicle bearing registration No.AP13X 3012 was not valid
due to its expiry, the petitioner is the lowest tenderer
(L1).  The contention of the petitioner is that in fact, the
aforesaid vehicle has a valid permit till 23-10-2019 and
out of mistake, the copy of the certificate which was
expired was submitted and the 2nd respondent-
Corporation ought to have informed about the invalidity
of the certificate before disqualifying it.

     9. On the other hand, it is the contention of the
respondents 2 and 3-Corporation that as the certificate in
respect of the aforesaid vehicle was found to be expired,
the Tender Committee rejected the technical bid of the
petitioner and therefore, the petitioner cannot agitate in
the present writ petition that the 2nd respondent-
Corporation ought to have afforded an opportunity to it to
produce a valid certificate.

     10. The version of the petitioner is that it was
a long time contractor of the Corporation and on several
occasions, on verifying the documents, the Corporation
gave chance to the tenderers to produce the originals
if there is any discrepancy in the documents submitted,
but, at no point of time, the tender was rejected except
where the terms and conditions are not fulfilled.
Admittedly, the petitioner fulfilled all the terms and
conditions of the tender and it is the L1 Tenderer.
On the ground that the Permit Certificate produced by
the petitioner in respect of a vehicle was expired, the
petitioner was disqualified without conveying any
information to it.  According to the petitioner, it has
a valid Permit Certificate in respect of the said vehicle but
by mistake, it submitted a certificate which was expired.

     11. The issue requires to be addressed in the
present writ petition is whether on account of submission
of an invalid certificate, the tender of the petitioner can
be liable to be rejected automatically without notice to it
or whether the relief prayed for by the petitioner can be
granted to it having regard to the facts and
circumstances of the present case.

    12. In F.C.I v. KAMDHENU CATTLE FEED  
INDUSTRIES , the Supreme Court took the view that
a public authority possesses powers only to use them for
public good, which imposes a duty to act fairly and to
adopt a procedure which is fairplay in action.

    13. In NEW HORIZONS LTD. V. UNION OF INDIA ,  
the Supreme Court took the view that the State action
should be in consonance with standards or norms which
should not be arbitrary, irrational or irrelevant.  Terms
and conditions of the tender should be construed from
the standpoint of a prudent businessman.

    14. In the instant case, the petitioner has not
questioned the evaluation of tenders by the
2nd respondent-Corporation.  It only questioned the
procedure adopted by the 2nd respondent-Corporation in
disqualifying it.  The grievance of the petitioner is that
before disqualifying it, the 2nd respondent-Corporation
ought to have afforded an opportunity to explain about
the production of Permit Certificate which is said to be
invalid.  According to the petitioner, he possessed
a Permit Certificate which is valid up to 23-10-2019 but
by mistake, he produced the certificate which was
expired.  The crucial question, therefore, would be as to
whether the award of tender could be viewed so
technically or a tenderer can be afforded opportunity to
remove the ambiguity in any of the documents submitted
by him.
     15. In KAMDHENU CATTLE FEED INDUSTRIES      
(1 supra), the Supreme Court pointed out that every
legitimate expectation is a relevant factor requiring due
consideration in a fair decision making process.
Therefore, this Court if it arrives at a conclusion that the
decision making process is not fair, it can certainly
interfere with the decision of the 2nd respondent-
Corporation in disqualifying the petitioner and can grant
the relief to the petitioner.  The petitioner produced
Permit Certificates to all the vehicles but in respect of one
vehicle, the certificate was found to be expired.
This Court is in acceptance with the submission made by
the petitioner that the 2nd respondent-Corporation before
disqualifying the petitioner ought to have afforded
an opportunity to it to explain the circumstances relating
to filing of the Permit Certificate which was expired.

     16. Condition No.23(4) relating to procedure for bid
submission enables the tenderer to submit hard copies of
the documents.  Therefore, apart from submitting the bid
electronically, the petitioner is also permitted to submit
hard copies of the documents.  From this, it can be
understood clearly that the 2nd respondent-Corporation
intends to verify the documents thoroughly and a tender
will be liable for rejection only after proper verification of
all the documents.  Therefore, it cannot be said that the
tender conditions do not permit the petitioner to explain
the ambiguity in any document or to furnish a correct
document in case if a wrong document was submitted by
mistake.
     17. After passing of the interim order by this Court
in W.P.M.P.No.8478 of 2015, dated 12-3-2015, the
petitioner submitted a Permit Certificate in respect of the
vehicle bearing registration No.AP13X 3012 and the
2nd respondent-Corporation on verification found it to be
valid up to 23-10-2019.  In Government contracts,
interference of this Court in exercise of jurisdiction under
Article 226 of the Constitution of India would be justified
when not only it is arbitrary and mala fide but also when
the procedure is unfair, unreasonable and irrational.

     18. In the instant case, if the petitioner which by
mistake submitted an invalid document is not permitted
to correct the mistake by producing the genuine
document which it possesses, it would in the considered
opinion of this Court, be totally unfair and unreasonable.
The judgment relied upon by the implead petitioner-
4th respondent in M/s. Sri Laxmi Engineering Company
v. Government of Andhra Pradesh , which laid down
the general principles and rendered with reference to the
different set of facts and circumstances is not applicable
to the facts of the present case.  Since obviously the
petitioner is the lowest tenderer disqualifying it on purely
technical ground without affording an opportunity to
produce the genuine certificate and awarding the
contract to the 4th respondent cannot be said to be the
result of a fair decision making process nor is it in the
interest of the 2nd respondent-Corporation.

     19. For the foregoing reasons, the 2nd respondent-
Corporation is directed to award contract to the petitioner
pursuant to the Re-Tender Notice dated 28-02-2015 for
the year 2015-16 of Ranga Reddy district in the State of
Telangana.  This writ petition succeeds and the same is
allowed.  The miscellaneous petitions, if any, pending in
this writ petition shall stand closed.  No costs.

___________________  
R.KANTHA RAO, J.  
01st June, 2015.

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