AI Structured Summary
Not yet generated for this judgment
Judgment
The petitioner is a Class I Contractor. He filed this writ petition seeking a declaration that the action of Municipal Commissioner- lst Respondent in allotting the civil works covered by tender notification dated 30-4-1998 on nomination basis without finalising the tenders as illegal and arbitrary.
The petitioner is mainly concerned with Items 1,3, 4, 6 to 11, 15 to 19,23,24, 28, 29 and 31 to 35 of the tender notification. The case of the petitioner is that the 1st respondent issued tender notification in his proceedings No.DB/1293/4/98-1999 dated 30-4-1998. There are altogether 45 items of works. These works include laying of new roads or improving the existing roads. The last date for submitting tenders is 3.00 p.m. of 18-5-1998. The petitioner submitted his tender for the items mentioned above. According to him, he is the lowest tenderer for the items mentioned above. According to the petitioner, the Municipal Council was to meet on 20-6-1998 to finalise the tenders and allot the works to the contractor who has tendered the lowest rate. However, the said meeting did not take place, but the 1st respondent has allotted the works mentioned in items, 1, 2 and 3 to a 3rd person without finalising the tenders. Therefore, the petitioner has approached this Court after making a complaint to the 1st respondent on 17-6-1998. In the said complaint, it is alleged, that the petitioner has questioned the legality of the action of the 1st Respondent in allotting the works to 3rd person on nomination basis. The petitioner contends that the allotment of works on nomination basis is impermissible and the entire action is vitiated by illegality and arbitrariness. This Court ordered Notice before admission on 25-6-1998. On the same day the Court has also ordered that any finalisation of tenders in the meantime will be subject to further orders. After receiving notice the 1st respondent filed counter affidavit.
In the Counter Affidavit, while denying the allegations made in the petitioner''s affidavit, it is stated that by tender notification dated 30-4-1998 tenders were called for 46 works and the petitioner had applied for works No.1, 3, 10, 24, 29, 32, 33, 34 and 35 out of the 23 works. The meeting of the Municipal Council proposed to be held on 20-6-1999 could not be held due to unavoidable circumstances and the same was postponed. It is also admitted that the petitioner along with other contractors filed tenders for nine works. The petitioner quoted the lowest rates. The works could not be allotted to him as he was not executing the works properly. Therefore tenders were rejected. It is also highlighted in the counter affidavit that in the Municipal Council meeting held on 8-7-1996, by resolution No.45, the petitioner was blacklisted. Later accepting the petitioner''s apology, the Council by resolution No.57, dated 31-10-1996 revoked the order of blacklisting the petitioner. Justifying the action of giving three works on nomination basis, the 1st respondent submitted that in view of the urgency three works were got executed by the next lowest tenderer as per the orders dated 21-6-1996 of Chairperson and ratified by the Municipal Council meeting held on 18-7-1998. Giving these reasons the 1st respondent prayed for dismissing the writ petition.
I have heard learned Counsel for the petitioner Sri J. Kanakaiah and learned Standing Counsel for respondents 1 to 3, Sri G. Chandraiah.
Learned Counsel for the petitioner brought to my notice the rules framed by the Governor of Andhra Pradesh in G.O. Ms. No.620, Municipal Administration, dated 7th October, 1967 as amended by G.O. Ms. No.214, dated 29-5-1974. These Rules were issued in exercise of the powers conferred by Clause (a) of sub-section (2) of Section 326, read with Section 44 of the Andhra Pradesh Municipalities Act, 1965. These rules are called the Andhra Pradesh Municipalities Tender Rules, 1967. They deal with invitation and disposal of tenders for municipal works. These rules govern all the works taken up by the Municipality. There is no other method or manner for executing the works in the Municipality. Rules 2 to 5 deals with procedure for calling for tenders. Rule 6 is relevant and the same is as follows:
"6. The lowest tender should ordinarily be accepted. When it is considered undesirable to accept the lowest tender, the next lower tender should be accepted unless adequate grounds can be recorded for rejecting that tender also. The reasons recorded for the rejection of these tenders or for the acceptance of any other tender shall be recorded in writing and shall be marked and kept confidential, and made available for audit if so desired."
A reading of this rule i.e., Rule 6 makes it very clear that after opening tenders the Municipality shall (a) accept the lowest tender; (b) if lowest tender is considered undesirable to accept, the next lowest tender should be accepted; and (c) even if the next lowest tender is also not accepted, the reasons for the rejection of these tenders or for the acceptance of any other tender shall be recorded in writing and shall be marked and kept confidential, and made available for the audit.
Keeping this in mind I passed the order on 30-6-1999 directing the 1st respondent appearing through the Standing Counsel to produce the file containing the minutes of the Standing Committee/Council Meeting alleged to have been held on 20-6-1998 or on any other date. When the case is called today, no file is produced. Learned Standing Counsel submits that the said file is not available in the Municipal Office. Therefore, it is to be held that reasons are not recorded for rejecting the tender of the petitioner.
In the case of Shri Sachidanand Pandey v. The State of West Bengal, AIR 1987 SC 1109, the Supreme Court has considered the legal position regarding the disposal of public owned property including contracts by public auction. Reviewing the relevant case law on the point starting from Rashbihari Panda etc. Vs. State of Orissa, , to Chenchu Rami Reddy and Another Vs. Government of Andhra Pradesh and Others, . His Lordship Justice Chinnappa Reddy in Paragraph No.39 has held as follows:
"39. On a consideration of the relevant cases cited at the bar the following propositions may be taken as well established: State owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism."
The ordinary rule of disposing of a property or executing works shall be by tenders or by public auction. This rule is not applicable only in two circumstances. First, when the method offender is likely to result in subversion of public interest. Secondly, if any of the objectives enshrined in the Directive Principles of the Constitution of India are to be achieved, the method of tender or auction can be given a go by. Except in these circumstances, the method of tenders by pubic auction has to be followed by statutory or public authority.
In the present case, admittedly, in respect of nine works the petitioner tendered with the lowest rates. The reasons are not forthcoming as to why the tender of the petitioner was rejected. Except an untenable statement that in July, 1996 the petitioner was blacklisted which was subsequently revoked nothing is forthcoming. As on the date of consideration of the tenders, the order of blacklisting the petitioner was not in force, therefore it is common sense that it cannot be a ground for rejection of petitioner''s tender. The entire action of the respondents therefore has to be held illegal.
Coming to relief to be granted in this case, Sri Kanakaiah submits that the works under items 1 and 3 are already completed and 90% of the payment is already made. The person to whom the work under items 1 and 3 is awarded is not before this Court and therefore no adverse order can be passed against such a person. Even otherwise if a 3rd person has executed the work which is given to him, as a result of illegality, the said person cannot be made to suffer. Therefore, the prayer of the learned Counsel for the petitioner that the amount for the works executed should be withheld cannot be countenanced. Be that as it may, coming to the other 22 works in respect of which notice inviting tenders is issued, taking into consideration the totality of the situation, I direct the Municipal Authorities that a fresh tender notification be issued calling for the tenders. The petitioner is at liberty to file fresh tenders and the same shall be considered in accordance with the rules and the law laid down by the Supreme Court of India. The petitioner is also at liberty to tender for all the works.
In the result, the writ petition is allowed. No costs.