P. Manoharan vs State of Tamil Nadu and Others

B. Rajendran, J.—This Writ Petition has been filed challenging the impugned proceedings dated 27.02.2015 bearing File No. 21003/2014/A14 and consequential direction to the respondents to confirm the tender in the name of the petitioner with regard to the collection of entry fee at the Kanagamoola Market, Vadasery, Kanyakumari District within the stipulated time.

The learned counsel for the petitioner would submit that the petitioner submitted a tender for the auction scheduled to be held on 05.02.2015. According to the petitioner, the notification stipulates certain conditions being the qualification for participating in the sealed tender and as per the same, the tender has to be submitted by paying EMD of Rs. 12,00,000/-, Bank Guarantee or Demand Draft of Rs. 30,00,000/-, Rs. 2,00,000/- towards Registration Fee, Rs. 1,00,000/- towards EB deposit. The last date specified was as 05.02.2015 at 11.00 a.m. and the date of opening was also scheduled on 05.02.2015 at 11.30 a.m. The petitioner had offered a sum of Rs. 1,02,51,500/- The sixth respondent also submitted a tender but according to the petitioner, it is a defective tender viz., first of all, he has not mentioned the name and address and for which item he offered and the tender application was itself placed in a cover of HDFC bank without indicating anything. Further, as contemplated under the tender notification, the identification proof of the sixth respondent was not enclosed. As per the rules, he has to tender Rs. 45,00,000/- totally but along with his application, only Rs. 44,00,000/- was enclosed. Therefore, there is a deficit of Rs. 1,00,000/- at the time of filing the tender itself, though he has quoted a huge amount of Rs. 1,39,99,999/-. His tender suffers from one another disqualification viz., he is a tenant of another building of the municipality and he is in arrears of the lease amount to the tune of Rs. 14,77,980/- upto March, 2015. There is a specific clause in the present tender that when there is any arrears of amount, then such a person would be disqualified even from seeking for the tender. Therefore, on this sole ground also he cannot even participate in the tender. Even at the time of opening the tender, the petitioner had objected to open the very cover as it was only a HDFC bank cover. But the sixth respondent being an influential person made the authorities to open the cover which was not even given the name and address but only a signature was there. Since the amount offered by him is more, the matter was placed before the council. In the council report also it has been very clearly pointed out that he is disqualified from even participating the tender but the council members have agreed to grant it and the impugned order was passed just taking into consideration the extra amount offered by the sixth respondent. Therefore, challenging the same, the petitioner has come forward with this Writ Petition.

The petitioner has also given an undertaking even at the time of admission itself that he is willing and prepared to pay the equal amount as agreed and made in the tender by the sixth respondent, even though he had made a lesser amount at the time of offering the tender. Therefore, when there was only two people who had applied for the tender and one has become ineligible, according to the rules, automatically, the authorities ought to have given to the second highest bidder and now that he is offered to pay equal to the offer made by the sixth respondent, the tender has to be given only to him. Therefore, he challenges the very impugned order.

Though the municipality has not filed any counter, they would only contend that they are definitely interested in getting the best amount viz., the higher amount. No doubt, in the council meeting some councillors have objected to the grant of the contract to the sixth respondent but taking into consideration the vast difference of Rs. 37,00,000/-, they have waived the disqualification clause and allotted to the sixth respondent. But at the same time, now they would state that if the petitioner offers equal to the amount offered by the sixth respondent and if the petitioner is prepared to deposit all the amount along with the income tax amount and other amounts, they will abide by the Court order.

The sixth respondent has filed a counter mainly disputing the disqualification ground raised as against him on the ground that the amount claimed as default to the municipality is not correct. Further, there is an arrear of payment of rent but it is well within the security deposit of Rs. 16,00,000/-. Further, the rent is in respect of a separate building. Therefore, it cannot be called as he is in arrears of payment of licence fee. Secondly, they would contend that the non-mentioning of the address is only an inadvertent mistake but however when they ensured the Demand Draft which has been taken from his account and there is no other person who has claimed as Maheen and he is already an existing contractor, licencee or lessee in respect of municipality. Therefore, there is no question of not enclosing his identification. Therefore, he would contend that there is a mistake that he had given the Demand Draft for Rs. 44,00,000/- but actually one Demand Draft was left out in the car and after opening the tender, immediately it was resubmitted. But even though his name and address does not find a place in the cover, he has signed in the tender form and sent it in a cover of HDFC bank from where he got the Demand Drafts. Therefore, these are all only small discrepancies which can be cured and therefore, he cannot be called as a person who has been disqualified. Further, he would contend that even as per the clause, if a person wants to challenge the tender, within 24 hours he has to pay the extra amount and thereafter, to challenge the same, which has not been done in this case. Therefore, rightly the authorities have confirmed the tender in his favour. He has also paid the amount. Hence, the impugned order is sustainable. Lastly, the counsel would contend that in the tender process the Court would not ordinarily interfere with. He would rely upon a decision in Sorath Builders Vs. Shreejikrupa Buildcon Limited and Another, (2009) 2 JT 673 : (2009) 4 SCALE 1 : (2009) 11 SCC 9 : (2009) 2 SCR 893 : (2009) 3 UJ 1426 for the proposition that when the tender bid is not arbitrary the Court would not immediately interfere with the same. He would also rely upon a decision in Jagdish Mandal Vs. State of Orissa and Others, (2008) 2 CTLJ 538 : (2007) 14 SCC 517 : (2006) 10 SCR 606 Supp . for the proposition that evaluation of contract is essentially commercial functions and principles of equity and natural justice stay at a distance. He would further rely upon another decision in M.Vasudevan v. C.E.O., Chennai Metropolitan Development Authority [AIR 2006 MADRAS 45] for the proposition that under the Tender Transparency Act, when the contract is not of highly specialized work, in the absence of any rules prescribing eligibility requirement, relaxation of eligibility requirement cannot be questioned. Therefore, he would contend that the writ petition should be dismissed.

The petitioner has filed an additional affidavit stating that in order to avoid the loss to the municipality, the petitioner is ready and willing to pay the amount of Rs. 1,39,99,999/- which has been offered by the sixth respondent.

Heard all the parties.

The only point which has been raised and argued by all the parties is that the sixth respondent was disqualified. Therefore, the authorities should not have confirmed the contract in favour of the sixth respondent, even though he had offered higher amount. Let us analyse the various disqualifications which have been pointed out by the petitioner as against the sixth respondent. The first and foremost disqualification pointed out is that in the application itself the name and address is not given. The application was signed by the party and the application was not sent in proper cover and it is not mentioned for which item it has been given as a tender and it was in HDFC bank cover without denoting anything in respect of contract or tender. Above all those things, the application had Demand Drafts only for Rs. 44,00,000/- instead of Rs. 45,00,000/- and Rs. 1,00,000/- towards EB deposit was not there at the time of opening of the tender. No doubt, all these are accepted, there is no dispute in this. Further, another admitted fact is that at the time of opening the cover, the petitioner had objected to the very opening of the cover as it is not in the cover meant for tender and it is in the HDFC bank cover. Nevertheless, at the instance of the sixth respondent, the cover has been opened whereas the tender according to the petitioner is a defective tender. No doubt, when the tender was opened, the tender application definitely not in the form it has been required. Above all, the name and address of the person along with proof of identity was not available. Though the argument is made by the learned counsel for the sixth respondent that after all he is an existing lessee in respect of the municipality, his whereabouts and name was very well known and nobody else who claims under his name and the Demand Draft also drawn from his account in the HDFC bank and even Rs. 1,00,000/- Demand Draft was immediately submitted as it was left in the car and failed to be accompanied in the cover, one thing is clear that the very presentation is not proper and correct. When the authority even could not identify the name and address, can that tender be called as valid tender merely because there was only a signature in it without any further details including the name? Let us assume in the reverse case, suppose he has mentioned everything viz., name and address but it was not signed, would the contract be accepted? No. Similarly, this would also apply to the tender also. The tender could not have been accepted at that point of time as it was not validly presented. Even when the demand draft for Rs. 1,00,000/- was not there, as contemplated in the tender notification, definitely it has to be taken note of. Of course, in this case, though it was not available at the time of opening the tender, immediately he has gone to car and thereafter, brought it. But the fact remains, the authorities should have definitely taken into consideration that it is a defective presentation. Even the cover does not contain any details and nothing was specified in the cover as contemplated under the tender notification.

The second limb of the argument is that the sixth respondent is not a defaulter. The only argument placed before this Court is that the amount due and payable to the municipality is less than the security deposit viz., Rs. 16,00,000/- and it can be adjusted from the same. Therefore, he cannot be called as a defaulter. Unfortunately, this argument cannot be accepted. When the caution deposit is asked only for the due performance of the contract, that does not mean that it should be kept as an advance for the payment due and payable by him. When an arrear of Rs. 14,77,980/- is due and payable, the authorities should not have taken into consideration merely because he has offered a higher amount. Therefore, this also would indicate that there is a disqualification. Further, the sixth respondent would state that since he has offered a huge amount and the difference is more than Rs. 37,00,000/- the municipality has taken into consideration even though there were some objections by the council members and the larger interest of the municipality for collection of money has accepted. Therefore, they have taken the correct decision. But, the municipality should have thought of a person who is a defaulter and merely because he has offered for more amount and when the very tender itself is a defective one, it should not have taken into consideration.

In any view of the matter, now that the petitioner who is the only other participant has given an undertaking before this Court and filed an affidavit to the effect that he would match the requirement as given by the sixth respondent and as the application of the sixth respondent would have rejected on that day itself and the municipality should have accepted the lesser rate which was offered by the petitioner. Now the petitioner has voluntarily agreed to pay the entire amount as offered by the sixth respondent. Alternatively the petitioner should have at least given an opportunity at that point of time that whether he was willing to pay more or not. In fact, he had made an objection even on 05.02.2015 viz., when the date of opening the tender itself pointing out the irregularities and illegalities in granting the contract, no reply was given by the municipality and no opportunity of hearing was given to him to enhance the bid amount. The petitioner should have at least been called for further negotiation. Therefore, now the argument of the sixth respondent that as per the tender notification within 24 hours, he should have paid the highest amount does not arise. Here is the case, the petitioner brings to the notice of this court that a tender which was offered by a person who is not at all eligible was considered. Therefore, the question of invoking the clause to pay more amount within 24 hours is not correct.

In regard to the ruling stated by the petitioner, no doubt the Hon''ble Supreme Court has time and again stated that the consideration paramount in the nature is the price at which the other side is willing to do the work; whether the goods or services offered are of the requisite specification; whether the person tendering has has the ability to deliver the goods or services as per specifications. The one of the very vital questions which has been decided by the Hon''ble Supreme Court in Sorath Builders case (cited supra) is whether the tenderer is willing to deliver the goods and services in the requisite quantity. When he is not able to pay the rent for his building, in the tender how can be expected to do the contract payment in the future because after all, it is only a collection and payment of money. Therefore, the sixth respondent''s argument that normally in the contract matters the Court would not interfere, but, where it is proved that the authorities have flouted the rules that too on two occasions viz., when at the time of opening of the tender itself the disqualification pointed out by the petitioner they should have taken note of and at least they should have called the petitioner whether he is acceptable for discussion/negotiation. Even that has not been done and his objection has been overruled without even giving an opportunity. His objection has not at all been taken note of in the manner known to law. The authorities have straight away passed the impugned order. Therefore, it is a patent violation. Hence, the impugned order is liable to be set aside.

Now the question is how to give the contract when there were only two participants. One participant as per the tender notification has become ineligible, normally if the other participant is the only person, it is for the council to take a decision whether he has offered a good amount or not. But even as per the report of the Municipality in the council meeting it has been held as follows:

A reading of the agenda, it has been very clearly pointed out that the authorities themselves pointed that this is a clear violation of the tender rules When this is considered in the council meeting, they have simply agreed for the higher amount. But, at that point of time they should have called the petitioner so as to whether he is prepared to pay more or not, as already there is an objection, that has not been done. Therefore, The authorities have not really taken into consideration the above defects. Therefore, the order has to go. Now, the authorities should consider that when there is no other person and especially the period of contract commences from 01.04.2015 and even as per the report of the council itself this amount is the highest amount, even taking into consideration the average of the previous three years, naturally the contract could be granted only to the petitioner at the highest amount as offered by the sixth respondent viz., Rs. 1,39,99,999/- though the petitioner has offered lesser amount in the tender. Now, he has filed an affidavit accepting to pay the higher amount as guaranteed by the sixth respondent. Therefore, the petitioner should deposit the entire amount viz., Total lease amount Rs. 1,39,99,999/- + service tax (12.36%) Rs. 17,30,400/- + Income tax (2%) Rs. 2,80,000/- + Profession tax Rs. 2,346/- totally Rs. 1,60,12,745/- (Rupees One Crore Sixty Lakhs Twelve Thousand Seven Hundred and forty five only) within a period of one week from today so that the authorities will have the entire collection at one go and in fact the petitioner has even brought to the Court a Demand Draft for Rs. 50,00,000/- to show his bona fides. Further, already he has deposited Rs. 45,00,000/- towards deposit at the time of opening of the tender. Therefore, he will have to pay the entire amount viz., Rs. 1,60,12,745/- within one week from today.

In the result, the Writ Petition is allowed. No costs. Consequently, the connected miscellaneous petitions are closed.