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Judgment
B. Sudershan Reddy, J.—The petitioner in the instant writ petition prays for issuance of an appropriate writ particularly one in the nature of Writ of Mandamus declaring the action of the respondents in rejecting the petitioner''s tender application as illegal, arbitrary and contrary to the terms and conditions of G.O.Ms. No. 85 dated 20-3-1993, besides violative of fundamental rights guaranteed under Articles 14 and 19 of the Constitution of India. The petitioner also prays for issuance of consequential direction to the respondents to accept the tender of the petitioner by declaring as lowest tender.
The petitioner is a Class-I and Special Class contractor and registered as such with the Irrigation Department of Government of Andhra Pradesh. Third respondent herein had invited tenders for lift irrigation, drinking, water scheme, earthwork excavation, canal cutting and banking, including unlined and lined work canal at Chinnamarur Village of Veepanagandla Mandal, Mahaboobnagar District. A notification to this effect was published in the newspapers. The petitioner is stated to have submitted his tender by complying with all the conditions, such as payment of E.M.D. of Rs. 55,400/- schedule cost of Rs. 1,100/- and by enclosing necessary enclosures as required under the tender notification. In all six tenders were received and they were opened on 14-3-1997 in the office of the third respondent. The petitioner''s tender has been rejected by the third respondent on the ground that the petitioner had written the rates with regard to Item 18(b) in words only and failed to mention the same in figures. Admittedly, out of all the offers received, the petitioner''s offer is the lowest one and of the fourth respondent herein is the third lowest. The tender application of the Laxmi Engineering Company, which is the second lowest is also rejected.
It is the case of the petitioner that the third respondent ought not to have rejected his tender on such frivolous objection regarding non-mentioning of the amounts in figures and particularly in view of the fact that the petitioner''s offer is the lowest one and in between the lowest tender and the tender of the fourth respondent, which is now accepted is to the tune of Rs. 2.00 lakh, which is very substantial. By the impugned action the State exchequer is put to substantial loss of Rs. 2.00 lakh. The error or mistake, if any, found in his tender is so trivial in nature and such a trivial error cannot form basis for rejection of the tender. It is the case of the petitioner that the rejection of his tender is unreasonable and arbitrary. It is also stated that the terms and conditions stipulated in the tender notice are contrary to G.O.Ms. No. 85 and the rejection, therefore, is not only arbitrary, but contrary to the said G.O., issued by the Government, which is binding on the respondents. The mistake if any in not mentioning the rate in figures, while mentioning in words is due to inadvertence and is not deliberate or wanton.
In the counter-affidavit filed by the respondents, it is admitted that the petitioner has submitted his tender schedule on 13-3-1997 duly signed on all the pages of the tender schedule. The tenders were opened on 14-3-1997 in the presence of the tenderers. After opening of the tender of the petitioner, it is noticed that the petitioner has quoted the rate for Schedule ''A'' in item No. 18(b) in words, but he has not quoted the rate in figures. Consequently the tender has been rejected by the Superintending Engineer, Irrigation Circle, Hyderabad, in terms of Clause (10) of the tender notice. It is the case of the respondents that the petitioner is bound by the terms and conditions of the tender schedule and in fact, he has accepted to the effect that he would bound by all the terms and conditions mentioned. Non-mentioning of rates in figures is contrary to one of the terms and conditions of the tender schedule. Therefore, there is no option, except to reject the tender of the petitioner. It is submitted that the tender submitted by Sri Laxmi Engineering, which has committed a similar mistake of not mentioning the rates in figures was also rejected. The decision is fair, reasonable and not discriminary. The counter-affidavit submitted by the contesting respondents is also more or less on the same grounds.
It is true that this Court does not sit as a Court of appeal as against the decisions of the Competent authorities concerned either in a accepting or rejecting tenders. But the court would definitely in appropriate case review the decision making process and interfere with such decision where the decision making process is vitiated. Parameters of judicial review in the matter of contractual powers of Government bodies and the principles applicable is not res integra. The courts concerned should decide as to whether the decision making authority has exceeded its powers ? And whether such authority had committed any error of law and breach of principles of natural justice, and also whether such an authority has abused its powers ?
It is true the extent of duty to act fairly will vary from case to case and may depend upon variety of factors. There is no straight jacket formula to find out as to whether the authorities concerned have acted fairly and reasonably. Each case depends on its own facts and circumstances. It is settled law that no lowest tenderer can insist that his tender should be accepted by the authority concerned and for good reasons to be recorded in writing the authorities are always entitled to reject even the lowest tender. It is equally well settled that it is for the authority concerned to stipulate terms and conditions and notify the same for the information of the general public and interested persons and such stipulations may depend upon policy consideration. Normally the Court in exercise of its judicial review jurisdiction does not interfere with the stipulations of such terms and conditions, unless it is established that such terms and conditions are stipulated in such a manner and so tailor-made to exclude any particular individual or to suit the convenience of a particular individual. Except this limited review, the court does not substitute its own view and express as to what should be the terms and conditions in a given case. The court, of course, in a given case is entitled to decide as to whether the decision of the authority concerned either in accepting or rejecting the tender is ultra vires.
The question that arises for consideration in the instant writ petition is required to be appreciated in the background of the said principle. It is an admitted case, that the petitioner herein quoted the rate for Schedule (A) of item 18(b) in words, but he has not quoted the rate in figures. Clause 10 of the tender notice comes into play and it would be appropriate to read the same.
"In case of any discrepancy between the rates quoted in words and figures, the rates quoted in words shall prevail. In case, the contractor quotes rates only in words and does not quote in figures or vice-versa for any one or more items of works such tender shall be treated as incomplete and rejected."
If the clause is to be mechanically applied there is no other go except to treat the tender submitted by the petitioner as incomplete one. But, here is a case where the petitioner has quoted the rates in words, but not in figures. The object that is sought to be achieved by incorporating Clause 10 appears to see that there is scope for manipulations as to the rates quoted in the tender schedule. There could not have been any possibility of manipulating the rates in the instant case, inasmuch as the petitioner had admittedly quoted the rates in words and such possibility would always be there, where the rates are quoted in figures. Its true requirement is that the tenderer is expected to quote rates both in figures, as well as in words.
The Government of Andhra Pradesh with a view to improve the tendering procedures in the issue of tender notices and schedules, receipt of tenders, opening of tenders, scrutiny and acceptance of tenders had issued certain directions to all the concerned through G.O.Ms. No. 85, Irrigation and CAD (PW-COD) Department dated 20-3-1993. The instructions inter alia read :
3(ii) The Contractors must quote their rates in the tenders both in words and figures. In case of any discrepancy between the rates quoted in words and figures, the rates quoted in words shall prevail. If the Contractor fails to quote his rates in both words and figures, the tender will be treated as incomplete and his tender shall be rejected.
The purpose of stipulating such condition is so clear that there should be no room for any manipulation and precisely for that reason, the instructions would show that in case of discrepancy between the rates quoted in words and figures, the rates quoted in words shall prevail, because it is not possible to alter the rates quoted in words. Clause 10 of Tender Schedule has to be read in the context of Clause 3(ii) of the instructions contained in G.O.Ms. No. 85 dated 20-3-1993. If so read, I am of the considered opinion, the tender of the petitioner cannot be rejected, where the rates are mentioned in words and not in figures. May be a tender is liable to be rejected, where the rates are mentioned only in figures, but not in words, as there is always possibility of altering the figures in the tender schedule. The condition that rates should be mentioned both in words and figures cannot be held to be a mandatory one.
It is settled a tender can always contain essential and non-essential conditions. The requirements is a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the other which are merely ancillary or subsidiary with the main object to be achieved by the conditions. Failure to comply with any of the essential conditions would automatically result in rejection of the tender schedule and even the authority concerned may not have any discretion whatsoever in the matter except to reject the tender schedule. The authority concerned shall always have the discretion to take an appropriate decision in case where the tenderer failed to comply with any of the non-essential or ancillary or subsidiary conditions. The authority concerned is bound to exercise the discretion fairly and reasonably with an object to find out the effect and impact of such non-compliance of such ancillary and subsidiary conditions. Public interest should be the paramount consideration in taking such a decision in exercise of the discretion. Non-compliance with such ancillary and subsidiary conditions which are non-essential in their very nature should not result in automatic rejection of tenders. Such automatic rejection by the authority concerned would amount to arbitrary exercise of power.
The Apex Court in M/s. Poddar Steel Corporation Vs. M/s. Ganesh Engineering Works and others, , observed that :
"As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail and is not entitled to waive even a technical irregularity of little or no significance. The requirement in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from any not to insist upon the strict literal compliance of the condition in appropriate cases".
It was further held :
"In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the Bank. In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of Clause 6, specially when it was in its interest not to reject the said bid which was the highest".
In M/s. G. J. Fernandez Vs. State of Karnataka and others, , the Apex Court dealing with the converse situation, where certain conditions were relaxed by the authority concerned observed that :
"The second consequence, indicated by this court in earlier decisions, is not that K.P.C. cannot Deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrarinerss or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. For example, in this very case, the K.P.C. made some changes in the time frame originally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to be party which can show that it had refrained from applying for the tender documents only because it though it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed. But neither of these situations is present here. Sri Vaidhynathan says that in this case one of the applicants was excluded at the preliminary stage. But, it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance. The question, then, is whether the course adopted by the K.P.C. has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all ? It is true that the relaxation of time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less. But, we are inclined to agree with the respondent''s contention that while the rule an Raman''s case (supra) will be readily applied by Courts to a case where a person complains that a departure from the qualifications has kept him out of the race, injustice is less apparent where the attempt of the applicant before the Court is only to gain immunity from competition. Assuming for purposes of argument that there has been a slight deviation from the terms of the N.I.T., it has not deprived the applicant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration. If, save for the delay in filing one of the relevant documents, M.C.C. is also found to be qualified to tender for the contract, no justice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the K.C.P. going in for a choice of the better on the merits".
The principle laid down by the Apex Court in G. J. Fernandez case, (2 supra) is the complete answer to the submissions made by the learned Counsel for the fourth respondent. It is not as if the authority concerned has no power whatsoever to relax or deviate from the conditions. It is, thus, clear that in appropriate cases the authority concerned in the public interest can always exercise discretion and condone the deviation, if any, of non-compliance with non-essential and trivial conditions of tender notice. But, such exercise must always must be done in the public interest.
However, the learned Counsel for the fourth respondent placed reliance upon the decision rendered in M.V. Krishna Reddy rep. by his son and General Power of Attorney Holder M. Satyanarayana Reddy Vs. The Commissioner, Commissionerate of Tenders, Govt. of A.P. and Others, in support of his submission that non-compliance of conditions imposed under tender notice cannot be waived under whatever circumstances. I express my inability to agree with the submissions made by the learned Counsel for the fourth respondent. This Court in M. V. Krishna Reddy''s case (3 supra) does not lay down any such proposition, because it was not dealing with the aspects relating to essential and non-essential conditions and the result of non-compliance thereof. The decision is not an authority for the proposition advanced by the learned Counsel for the fourth respondent that under no circumstances there can be any deviation from the conditions.
Obviously no such discretion was exercised by the respondents herein. The respondents have rejected the tender of the petitioner on the simple ground of non-compliance with Clause 10 of the Tender Schedule. The decision is erroneous as it is the result of improper exercise of discretion. The Respondents have applied Clause 10 in a very mechanical manner. The decision is vitiated by non-application of mind. The tender submitted by the petitioner herein should be treated as one in order as, admittedly, there are no other defects in the tender submitted by the petitioner, except the one, for which the tender is rejected.
However, no direction can be issued by this court compelling the respondents to automatically accept the tender of the petitioner as the petitioner has no such right in law to insist that his tender should be automatically accepted, since it is the lowest one. The respondents may in their discretion proceed with the negotiations and decide as to whom the contract should be awarded from amongst the tenderers. The additional counter-affidavit filed by the fourth respondent in this behalf acquires significance inasmuch as he is also willing to undertake the work and complete the same at the rates quoted by the petitioner. In such view of the matter, it is for the respondents to decide the matter as to whom the contract is required to be entrusted, in accordance with law.
The writ petition is accordingly allowed to the extent indicated above. No costs.
Writ petition allowed.