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Judgment
The petitioner was initially granted licence for running pearls stall in Hyderabad Airport from 15-8-1990 to 14-8-1993 and thereafterwards ad hoc extension from 15-8-1993 to 31-3-1997 was granted. When the term of the licence came to an end by 31-3-1997, the authority called for tenders for disposing of the stall. In response to the tender notification, the petitioner submitted its offer in the tender schedule obtained by one M/s. Krishna Pearls. At this juncture itself I may point out that the tender schedule was obtained by M/s. Krishna Pearls, but along with the tender schedule, the petitioner produced a letter given by M/s. Krishna Pearls stating that the tender schedule was obtained by them on behalf of the petitioner and they have no objection to treat the tender submitted by the petitioner as that of the petitioner. Along with the petitioner, three more persons submitted their tenders, including the 3rd respondent herein. Tenders were opened and finalised on 3-10-1997. It was found that M/s. Maruthi Pearls and Jewellers had offered highest bid. The next highest bid was offered by Sri Sai Krupa Jewellers. The third highest bid was offered by the 3rd respondent herein and the petitioner had offered annual rent of Rs.26,000/- and, therefore, it was placed in the list at Serial No.4. The 1st and 2nd highest bidders refused to obtain the licence and, in that view of the matter, licence was offered to the 3rd highest bidder, viz., Sri Sai Jewellers, 3rd respondent herein, and the 3rd respondent readily accepted the offer and in that regard a letter was given to the 3rd respondent on 23-10-1997 and it started business with effect from 2-12-1997.
This Writ Petition is filed by the unsuccessful bidder viz., the petitioner. Mr. C.P. Sarathy, learned senior Counsel appearing for the petitioner, would attack the action of the official respondents in knocking down the licence in favour of the 3rd respondent mainly on the ground that the 3rd respondent did not fulfil the terms and conditions stipulated in the tender notification. The learned Counsel would draw the attention of the Court to condition No.8 incorporated in the tender notification and would point out that the petitioner did not fulfil the said condition, which reads thus:
"8. The tender is likely to be rejected if:
(i) It is not accompanied with Income Tax Clearance Certificate for the current, for the last three financial years duly completed and signed by the Income Tax officer concerned;
(ii) It is not accompanied with an Affidavit indicating all his liabilities and assets, both movable and immovable owned, acquired or inherited by him or held by him on lease or mortgaged either in his own name or in the name of his wife or any other person dependant on him, duly attested by a Magistrate/Notary Public; and
(iii) It is not accompanied with Earnest Money deposit for Rs. 30,000/-''''.
He would also contend that the 3rd respondent did not file any affidavit. In the affidavit filed in support of the Writ Petition at page-5 the petitioner has set out the deficiencies found by the official respondents in respect of each of the applicants when tenders were opened.
In the counter-affidavit filed on behalf of respondents 1 and 2 these allegations of the petitioner are not denied. However, at page-8 of the counter-affidavit respondents 1 and 2 state thus:
"The clause does not say it would be summarily rejected. The mere sense of using the work ''likely to be rejected'' instead of ''summarily rejected'' denotes that the rejection is to be done after analysing the situations and circumstances for non-production of these documents especially the Income Tax Clearance Certificate which involves another Govt. Department also (Income Tax Department). So, the term ''likely to be rejected'' is used in the NIT to give a liverage for tenderers who suffer delay in getting the Income Tax Clearance Certificate for genuine reasons which can be obtained before the grant of licence in case if their bid is acceptable and the tender documents are otherwise in order. So, it is the power vested with the competent authority to declare a tender as valid or invalid by exercising his rationale and reasonability".
But, nowhere in the counter-affidavit it is stated that Income Tax Clearance Certificate and the affidavit indicating all his assets and liabilities were produced by the 3rd respondent before grant of licence, though in the above extracted portion of the counter-affidavit respondents 1 and 2 have taken the stand that those documents can be obtained by them before grant of the licence.
The only question which falls for consideration in this case is whether the refusal to grant licence to the petitioner and grant of licence in favour of the 3rd respondent is valid.
The contention of the learned senior Counsel appearing for the petitioner is that the petitioner being the only applicant who had fulfilled all the terms and conditions incorporated in the tender notification, and the 1st and 2nd highest bidders declined to accept the licence and since the 3rd respondent did not fulfil the terms and conditions of licence pointed out supra, the official respondents ought to have granted licence in favour of the petitioner and their action in granting licence in favour of the 3rd respondent is totally arbitrary, unreasonable and violative of the conditions incorporated in the tender notification. As pointed out supra, respondents 1 and 2 have not denied the feet that the 3rd respondent did not produce Income Tax Clearance Certificate and sworn affidavit, and they have only stated that failure to produce those documents would not come in the way of the authorities considering the offer made by an applicant and those documents could be obtained before grant of licence. Even accepting the stand of the official respondents is correct, mere is absolutely no evidence placed before the Court to show that those two documents are subsequently obtained before grant of licence in favour of the 3rd respondent. It is needless to state that the public authorities in awarding licence or parting with their largesse cannot act arbitrarily and their action should be in consonance with the fair play in action and in the public interest. Respondents 1 and 2 having prescribed the requirement of production of Income Tax Clearance Certificate and sworn affidavit relating to assets and liabilities of the applicant should adhere to those norms. Otherwise, there is every danger of unscrupulous persons participating in the auction and obtaining the licence, which may ultimately result in public prejudice. To obviate such a situation, the official respondents themselves have prescribed those qualifications. Therefore, it should be held that granting licence in favour of the 3rd respondent without obtaining Income Tax Clearance Certificate and without obtaining the sworn affidavit relating to the assets and liabilities of the 3rd respondent is not only in violation of the terms and conditions of the tender notification, but also should be held to be arbitrary violating Article 14 of the Constitution of India. No doubt, the offer made by the 3rd respondent is higher than the offer made by the petitioner. But that circumstance itself cannot be the sole ground either to sustain or interfere with the action of the official respondents. The Court can very well see whether in parting with the largesse of the Airport authority, the prescribed procedure and the prescribed terms and conditions are fulfilled by the person in whose favour licence is knocked down. For the reasons stated above, the Court found that the conditions of the tender notification are violated.
Despite service of notice on the 3rd respondent, it did not appear before this Court. Therefore, by order of this Court dated 18-12-1997 the 3rd respondent was set ex parte.
In the counter-affidavit filed by respondents 1 and 2 it is pointed out that the 3rd respondent has been conducting his pearl business in the shop with effect from 2-12-1997. However, Mr. C.P. Sarathy, learned senior Counsel appearing for the petitioner, would strongly deny this assertion of respondents 1 and 2 and, on the other hand, he would contend that the shop is being run by some third party. There is no necessity to go into this controversy at this stage.
In the result, the Writ Petition is allowed and the action of respondents 1 and 2 in granting licence in favour of the 3rd respondents for running pearl stall in the Hyderabad Airport premises is declared to be invalid. Respondents 1 and 2 are directed to take fresh steps to grant licence for running pearl stall in the Hyderabad Airport premises strictly in accordance with law, and terms and conditions after issuing fresh tender notification. However, it is made clear that if, in fact, the 3rd respondent is presently running the pearl stall, it may be permitted to continue to be in the stall subject to its paying the agreed rate of rentals and fulfilling other conditions of licence till the tenders are finalised and licence is granted to an eligible person in pursuance of this order. This exercise shall be completed within a period of two months from today. The parties to bear their own costs.