Brushlin M. Sangma vs Garo Hills Autonomous District Council & Ors

1) The brief facts of the case is that the respondent No. 2 vide Sealed Tender Notice dated 11th September, 2018 had invited tenders from interested persons or parties, for collection of tolls by way of settlement of haats and ferry ghats for the period from 1st April, 2019 to 31st March, 2020. The petitioner participated in the tender process and also deposited 30% of the Sorkari Dak (Reserved amount) as security deposit by way of Bank draft in favour of the respondent No. 2 on 16th October, 2018. Thereafter, a list of successful tenderers of all the Haats of West Garo Hills District for the year 2019-2020 was declared, wherein the petitioner, was shown as having the highest bid amount for Rongram market. Subsequently, the respondent No. 2, vide office order No. 154 dated 3rd December, 2018 after scrutinizing the result of all the Haats of Garo Hills for the year 2019-2020 as per Section 11 of the Garo Hills Autonomous District (Market Tax) Regulation 1970 validated the result declared on 30th November, 2018, and allowed the successful tenderers to deposit their bid/tender amount. The Executive Committee, Garo Hills Autonomous District Council then held a meeting on the 12th February, 2019 to discuss the matter regarding settlement of 14 Haats, which had been kept pending due to public complaints, and re-scrutinized the tender papers. Though after verification, it was found that the papers were valid and genuine, the Executive Committee however, found that the amounts offered were very high and unreasonable, in the context of the present market value of these Haats.

2) The Executive Committee of the Garo Hills Autonomous District Council, then decided to settle the Haats by disregarding the result of the tender process and also the highest bids that was offered for settlement of the Haats. The reason for such a decision it seems, was on the ground that settlement of the Haats at unreasonably high amounts, would lead to un-healthy bidding in future and small local businessmen/traders would be adversely affected, as big players will step in, which would result in the monopolization of the business by these entities. In this backdrop, the respondents settled the Rongram Haat in favour of the bidder who had bid lower than the petitioner. The writ petitioner has assailed this decision, of the respondents No. 1 & 2 as he had quoted Rs. 20,10,200/- which was the highest bid but the Haat was settled with the private respondent who had bid Rs. 20,00,000/- which is lower by only a marginal difference. Being aggrieved thereby, the petitioner has filed the instant writ petition.

3) Mr. K. Ch. Gautam, learned counsel for the petitioner submits that after the writ petitioner had participated in the tender process, he had emerged as the highest bidder for Rongram Haat and this fact is reflected in the list of the successful tenderers (Annexure-IV) for all the Haats in West Garo Hills for the year 2019-2020, published by the respondents themselves. Thereafter, he submits, by order No. 154 dated 3rd December, 2018 (Annexure-V) the respondents had directed the successful tenderers to deposit the bid amounts w.e.f. 4th December, 2018 to 13th December, 2018. The learned counsel for the petitioner then submits that after the tender process was over, and results had been declared, the respondent Executive Committee held a meeting on 12th February, 2019 to discuss the settlement, and in the meeting, the Executive Committee re-scrutinized the tender papers and though they found the same to be valid in all respects, applied condition No. 7 of the Tender Notice for the year 2019-2020, dated 11th September, which permitted the respondents to not accept the highest bid, if the same was deemed to be too high or unreasonable.

4) The learned counsel for the petitioner submits that taking recourse to this provision, the Executive Committee settled the Rongram haat in favour of the bidder who bid lower than the petitioner but near to the Sorkari Dak (reserved price). The learned counsel further submits that the actions of the respondent in re-appreciating the tender and settlement was wholly unreasonable and unwarranted, more so, as the successful bid of the petitioner differed from the second highest bidder only by an amount of Rs. 10,200/-. He submits that by no stretch of imagination can the bid amount be seen to be unreasonably high or predatory to warrant application of Condition 7 of the Tender conditions, as the difference is negligible. He lastly submits that the impugned settlement by the respondents in favour of the private respondent is not only arbitrary and illegal but violative of set procedure in such matters, inasmuch as, there was no irregularity in the tender process. To buttress his submissions, learned counsel has placed reliance on the case of Jespar I. Slong v State of Meghalaya, reported in (2004) 11 SCC 485. He, therefore, prayed that the order No. 186 dated 27th February, 2019 as far as it related to Rongram haat be set aside and quashed and he be settled with the lease for the same.

5) Mr. S. Dey, learned counsel for the respondents No. 1 & 2, in reply to the submissions of the learned counsel for the petitioner, submits that the Garo Hills Autonomous District Council had enacted the Garo Hills Autonomous District (Market Tax) Regulation, 1970 to levy and collect taxes on the entry of goods into a market for sale. He drew this Courts' attention to Para 11 (1) of the said Regulation which provides that the respondents are not bound to accept the highest bid or may refuse to record the bid of any bidder for the reasons which were to be recorded in writing and also 11 (2) which provides that the Executive Committee or the Officer authorized in this behalf may refuse to accept the highest tender for reason to be recorded in writing. The learned counsel for the respondents further submits that the Tender Notice at clause 7 also stipulated that in case a tenderer offered a very high and unreasonable bid for a particular haat (market), the Chief Executive Member could decide to settle the haat at an appropriate rate by not considering or by disregarding the highest bid amount. He submits that the Regulation of 1970, and the stipulations in the Tender Notice, justified the actions of the respondents in not settling Rongram haat with the highest bidder, but with the next highest bidder (Respondent No. 3) whose rate was closer to the Sorkari Dak (reserved price) fixed by the respondents. He further submits that non-consideration of the highest bids was necessary, so as to allow the local villagers and unemployed youths, to participate in the process to enable them to generate income and employment which would not happen if high and unreasonable amounts offered by bidders would be accepted.

6) The learned counsel further submits that non-acceptance of the highest bid is based on bona fide reasoning, and is not based on any extraneous reasons, or made with a view to cause undue favour to the private respondent. He further strongly contends that the writ petition is not maintainable, in view of the fact that the Regulation of 1970, at Section 26, provides for an appeal, and submits that on this ground alone, the writ petition is liable to be dismissed, due to availability of alternative remedy. The learned counsel also brought on record the fact that the petitioner had also bid for another market namely Jadigittim daily Haat and the same had been settled with the writ petitioner at an amount of Rs. 9,36,000/- With regard to unreasonable pricing and that the power to choose cannot be termed arbitrary, the learned counsel for the respondents has placed reliance in the decisions rendered in the case of Tata Cellular vrs. Union of India reported in (1994) 6 SCC 651, and Michigan Rubber (India) Limited vrs. State of Karnataka & Ors. reported in (2012) 8 SCC 216. The learned counsel for the respondent while closing his arguments, reiterated the points raised by him, firstly that the decision taken was bona fide, and secondly, that alternative remedy being available, the writ petition was not maintainable. As such, he prayed that the writ petition be dismissed.

7) The learned counsel for the petitioner in reply to the submissions made by the learned counsel for the respondents No. 1 & 2, invoked the principle of reasonableness, to rebut the contentions of the respondents that the bid made by the petitioner is unreasonably high, when in fact the difference is only of Rs. 10,200/-. He submits that it would be understandable, if the difference was substantial but in this case, the records would speak otherwise as to whether his bid was unreasonable in any manner, to cause the respondents to take recourse to Condition No. 7 of the tender conditions. In reply to the other contention as to the availability of alternative remedy, he submits that the power of the High Court under Article-226 of the Constitution cannot be circumscribed in any manner, and no statute or agreement can come in its way when there is gross violation of fundamental rights and the principles of natural justice. He further submits that an appeal under Section 26 of the Regulation 1970, would be an empty formality, inasmuch as, the Chief Executive Member who was a party to the impugned decision is the appellate authority as per Section 26 (2) and also that the impugned order was based on a collective decision of the entire Executive Committee. He then reiterates his submissions that the impugned order is bad in law and in fact and should be set aside.

8) No appearance has been made on behalf of the private respondent who is arrayed as respondent No. 3. By an affidavit filed by the petitioner dated 26th March, 2019, to indicate the status of service, averments have been made in paragraphs 3 & 4, which were accepted by this Court as to the deemed service of notice upon respondent No. 3. Moreover, the absence of the respondent No. 3 in this proceeding will not have any effect on its outcome, inasmuch as, the entire impugned action is ascribed to the respondents No. 1 & 2 and the respondent No. 3, is but a beneficiary.

9) I have heard the learned counsel for the parties, considered their submissions, and examined the materials on record.

10) The Garo Hills Autonomous District Council had enacted the regulation known as Garo Hills Autonomous District (Market Tax) Regulation, 1970, which provides for levy and collection of taxes on entry of goods into the market for sale therein within the Autonomous District of Garo Hills. The said Regulation has laid down provisions to govern the manner and method of settlement and lease of haats, and other revenue sources. As per the Regulation of 1970, the Notice Inviting Tender Notice, dated 11th September 2018, was published by the respondents along with certain conditions stipulated therein. The respondents also published the list of all the markets which were up for auction wherein the names, settlement amounts for the last financial year, and Sorkari Dak (reserved price) for the year 2019-2020 were mentioned. For the market in question, i.e. Rongram market, the settlement for the year 2018-2019, was Rs. 15,09,200/-and Sorkari Dak for the year 2019-2020 was fixed at Rs. 15,84,576/-. However by a corrigendum dated 21st September 2018, Sorkari Dak for various markets were re-fixed and for Rongram market the same was re fixed at Rs. 13,71,825/-.

11) It is undisputed that the petitioner was the highest bidder for the market at Rs. 20,10,200/- ( Rupees twenty lakhs, ten thousand and two hundred), and the private respondent who was the second highest bidder, had quoted Rs. 20,00,000/-( Rupees twenty lakhs). This is as reflected in the published list at Annexure-IV to the writ petition.

12) From the records it is seen that the Executive Committee vide office order No. 154 dated 3rd December, 2018 after scrutinizing the result of all the Haats of Garo Hills for the year 2019-2020 as per Section 11 of the Garo Hills Autonomous District (Market Tax) Regulation 1970, validated the result declared on 30th November, 2018, and declared the result of the bids. The same was arrived at after the respondents Nos. 1 and 2, had re-appraised the tender process and even re-examined the tender documents which were found to be in order. However, by resorting to condition No. 7 of the Tender Notice dated 11th September, 2018, the respondents decided to settle the haat at an appropriate rate by disregarding the highest offered amount, as in their opinion the settlement of the haat at an unreasonably high amount would in future lead to un-healthy bidding, and small local businessmen would be adversely affected. For easy reference, Condition No. 7 of the Tender Notice is quoted herein below:-

"7. Normally, the highest offered amount is preferred for settlement of haat but in case of a tenderer who offers a very high amount/unreasonable amount for a particular haat (Market) the Chief Executive Member, G.H.A.D.C. will decide and settle the haat with an appropriate rate not considering the highest offered amount of that haat. The 30% security money shall be released to the tenderer in such cases."

13) On examination of condition No. 7, it can easily discerned and interpreted, that it speaks of a situation where a very high bid is made for a particular haat or market which is on the face of it unreasonable or unrealistic. In such a situation, the Chief Executive Member by resorting to Condition No. 7 is permitted to disregard the said bid and to settle the same at an 'appropriate rate'. What would be an appropriate rate is not in question herein, but the Sorkari Dak (reserved price) to my mind, which indicates the minimum rate at which the haat could be auctioned, would serve as the benchmark. In the present case, the bid amount of the petitioner is as per record, only Rs. 10,200/- more than that of the respondent No. 3 who had placed a bid of of Rs. 20,00,000/- (Rupees twenty lakhs). The recourse to condition No. 7 of the Tender Notice in the instant case, by the respondents Nos. 1 and 2, in my opinion is to be examined in the light of common prudence and reasonableness as opposed to cases where the difference would be such, that at a glance would raise doubts about the genuineness of the bid and could even be termed as predatory pricing.

14) The learned counsel for the petitioner in his arguments had stressed on the unreasonableness of the decision of the respondents, in issuing the impugned order settling the market in favour of the private respondent. As propounded by the Wednesbury principles of reasonableness, as oft quoted in many judgments, the standard of unreasonableness, used in assessing an application for judicial review of a decision of a public authority, would be where the decision is so unreasonable, that no reasonable person acting reasonably could have made it. In the application of the test of reasonableness to the present case, the decision of the respondents on adjudging the bids of the petitioner as to be too high or unreasonable is to be examined. As discussed earlier, the difference between the bids of the petitioner and that of the respondent No. 3 is only of Rs. 10,200 or .5%, and as such to put it in short, this difference in the bids, from a reasonable and prudent view, can in no manner be termed or seen to be unreasonably high. The contention that the settlement was made in favour of the respondent No. 3 as his bid was closer to the Sorkari Dak also cannot justify the impugned action, inasmuch as, the difference is too negligible to warrant the imposition of Condition No. 7 of the tender conditions. It follows therefore, that the impugned decision by the authority cannot pass the test of reasonableness and in fact, by disregarding the tender process which was not vitiated in any manner, the decision is bad for being unreasonable and arbitrary.

15) The other aspect of the matter at hand which also deserves consideration is that the entire tender process was completed with the declaration of the successful tenderers and the deposit of the security amount by the petitioner. Re-examination, therefore, on the basis of the condition No. 7 of the Tender Notice apart from not being in consonance with the general accepted practice of settlement of contracts by the tender method, is also violative of the principles of Natural Justice as the petitioner after being the successful bidder had a legitimate expectation of being awarded the work.

16) With regard to the point of maintainability it would be relevant to refer to the decision as reported in the case of Harbanslal Sahnia & Anr. vrs. Indian Oil Corpn. Ltd. & Anr. reported in (2003) 2 SCC 107, where it has been held that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. The relevant portion of the judgment at Para-7 is quoted herein below:-

"7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged (See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors., (1998) 8 SCC 1). The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings."

17) In this case, apart from the presence of the contingencies as noted in the judgment quoted above, the fact that an appeal would necessarily have to be filed under Section 26 before the Chief Executive Member will not be fatal to the case as the same would not be an efficacious alternative remedy, for the reason that the Chief Executive Member, was also part of the Executive Committee of the GHADC, which had reviewed the matter leading to the impugned decision. As such, the question of maintainability of this writ petition fails for the reasons afore stated.

18) The contention of the respondents that the petitioner has already been settled with another market namely Jadigittim daily Haat at an amount of Rs. 9,36,000/- is not material, and has no relevance in the adjudication of the instant case and as such the same is disregarded. The ratio of the two decisions as cited by the learned counsel for the respondents on examination also are not helpful to the cause of the respondents as this case stands apart on its own facts and circumstances especially in the context of violation of Article 14 of the Constitution of India.

19) In view of the facts as set forth, and taking into account the entire circumstances of the case, the impugned order No. 186 dated 27th February, 2019 (Annexure-VII) as far as it concerns Rongram market is liable to be interfered with. Accordingly, the impugned order, insofar, as it concerns Rongram market is set aside and quashed. The respondents are directed to take necessary action in terms of the declaration by which the petitioner has been declared as a successful bidder with the bid of Rs. 20,10,200/- for consideration of settlement of Rongram market for the remaining period.

20) With the above directions, the writ petition is allowed and disposed of.

21) No order as to costs.