Prabhu Cabs vs Padavettammam Transport

Mrs. Prabha Sridevan, J.—The plaintiff is the petitioner. The plaintiff is carrying on the business of hiring Motor Vehicles, Vans and Cars on a rental basis. The respondents 2 and 3 called for tender in the month of April 2000 for hiring Vans and Cars for Chennai Telephones. Since the petitioner had already operated vehicles for the respondents during the years 1995-97, he applied for the tender. The tender conditions laid down certain criteria to be satisfied before the respondent accepted the tender. The important conditions for the purposes of deciding this Civil Revision Petition are Clauses 6,7 and 8, are extracted hereunder:

(6). Tenderers should indicate Registration No of Vehicles registered in their own personal name/firm and should produce Xerox copies of Registration Certificates of the Vehicles concerned. The tenderers should have minimum "FIVE VEHICLES" in their names or in the names of their firms. Further, the tenderers should furnish copies of Agreement entered into by them with other parties, if they intend to supply vehicles whose registration happen to be in the name of third parties, and in such cases, they should also enclose copies of Registration Certificates of the vehicles belonging to the third party with whom the tenderers have regular agreement. The tenderers should also have necessary PERMIT under Motor Vehicles Act and Insurance Cover for Transport. They should have necessary infrastructures like phone connection in the office address, vehicle shed etc. and have their office and operation function at ''Chennai''.

(7). The tenderer should ensure that vehicles having Registration in the year 1994 onwards only are deployed to users in Chennai Telephones that too in good condition in all respects.

(8). The tenderer should enclose a copy of his latest Income Tax Clearance Certificate while submitting the tender itself (i.e.,) with the Annexure II. The approved tenderer will be required to furnish the copy of the latest year''s Income Tax Certificate also within the time frame to be specified by the Chennai Telephones. Non-production of the same within such a time frame can lead to cancellation of the contract at any time, at the sole discretion of Deputy General Manager (A&PG), Chennai Telephones.

Clause 18 provides for technical and financial evaluation. According to the petitioner, the respondent had awarded the contract to undeserving persons without following the main tender conditions and therefore, the suit was filed for declaration that the finalisation of tender dated 29.2.2000 was null and void, for mandatory injunction to consider the tenderers, according to the tender condition and for a permanent injunction restraining the respondents from awarding the contract to any other person. Interim Injunction was asked for in I.A.No. 11900 of 2000 and it was granted. The petition filed by respondents 2 and 3 to vacate the injunction was dismissed. It must be mentioned at this juncture that the petitioner had originally filed the suit only against respondents 2 and 3. He had not chosen to implead the persons whose tender had been accepted by respondents 2 and 3, viz., the first respondent herein who is the successful tenderer in respect of supply of cars and the fourth respondent herein is the successful tenderer in respect of vans. With leave of the Court, the first respondent herein filed C.M.A.Nos.154 and 140 of 2000 challenging the order of the trial Judge. The learned IV Additional Judge allowed the appeals. Aggrieved by that the present C.R.P.Nos.255 and 256 of 20001 have been filed.

Mr. G. Ethirajulu, learned counsel for the petitioner submitted that when the tender conditions clearly lay down the parameters which have to be fulfilled, it was not open to the Committee to award the contract to persons who had not fulfilled the conditions. Therefore, according to him, the interim injunction must be granted and the balance of convenience was also in his favour.

Mr. R. Santhanam, learned Senior Counsel for Central Government submitted that the Chief General Manager, Chennai Telephones had nominated a Tender Evaluation Committee and they evaluated the 10 offers that were received. Based upon the rates quoted by the tenderers, the evaluation committee identified the first and fourth respondent as the persons to whom the tender must be awarded and recommended their names. The tender conditions stipulated that acceptance of the tender of the successful tenderer and communication to him will constitute a valid contract. The committee had intimated to the first respondent and fourth respondent the acceptance of their tenders and they had also in turn communicated their acceptance for operating their vans and cars on 14th and 17th July 2000 and the suit was filed only on 21.7.2000 and interim order was obtained only on 26.7.2000 by which time, the tender had been accepted and the injunction application virtually became infructuous. The learned counsel also submitted that it was not correct to state that the mandatory conditions were violated. There was nothing wrong in the evaluation made by the Committee and in any event, there was no allegation of male fides in the plaint or in the affidavit. So there was no justification to cancel the tender. The learned counsel also submitted that to grant, interim injunction would virtually paralyse the working of the respondents 2 and 3 and the public will suffer and the department itself would suffer a loss which would run into lakhs of rupees. The department is catering to the needs of nearly 10 lakh of subscribers and the services rendered by the Department is classified as essential services, therefore the balance of convenience was not in favour of injunction. He therefore, prayed that the civil revision petition be dismissed.

Mr. S. Krishnaswamy, learned counsel f6r the fourth respondent submitted that the petitioner can have no grievance against the award of tender to the fourth respondent, since the fourth respondent had fulfilled all the conditions. His tender was also lower than that offered by the petitioner. He also submitted that it was not open to the petitioner to file the suit without impleading the parties who would be directly affected by the injunction and on this ground alone, the petitioner did not deserve to have an order of injunction in his favour.

Mr. R.G. Annamalai, learned counsel for the first respondent submitted that the allegations that the tender was awarded to persons who did not deserve it was baseless and further he submitted that. the petitioner had not issued notice u/s 80, CPC to the respondents 2 and 3. There is absolutely no averment in the plaint or in the affidavit that notice had been issued or that notice ought to be dispensed with. Therefore, when the suit itself is not maintainable, the petitioner is not entitled to any interim order pending the suit. He also submitted that the failure to implead the respondents 1 and 4 also rendered the suit bad. According to him, when the petitioner knew full well that it was these two respondents who would be affected by the order of injunction and the petitioner ought to have impleaded them before obtaining interim orders. He referred to the judgments reported in Amirchand Nagindas & Co., v. Raoji Bhai Moti Bhai Patel and others (AIR 1930 Madras 714 (D.B.), in which this Court has held that when necessary parties are not impleaded the suit itself is bad.

He referred to the judgment reported in Naba Kumar Haxzra and another v. Rrdhashyam Mahishi and others (Vol. 34. L.W.444) in which the Privy Council held that while no suit is to be defeated by reason of non-joinder of parries, it would not have any application in the case that the defect was brought to the notice of the Court and he had ample opportunity to remedy the same.

Next he referred to (Pasumarthi) Subbaraya Sastri v. Mukkamula Seetha Ramaswami (AIR 1933 Madras 664) in

which again this Court held that a suit where necessary party was not impleaded should be dismissed.

He referred to T. Panchapakesan (died) and others v. Peria Thambi Naicker (Died) and others (AIR 1973 Madras 133) in which when the necessary party was not impleaded in the suit for declaration of title and injunction, held that the relief of partition cannot be granted to the plaintiff.

In the decision reported in M.Sambanda Mudaliar v. T. Thangavelu Mudaliyar (1973 TLNJ 175) again the Division Bench of this Court held that nonjoinder of a necessary party would entail the dismissal of the suit.

Rajbir Singh, HFS-II v. State of Harayana & anr, (1996 I SCJ 442) was a case which arose with reference to inter se seniority between the appellant and another. When the other person was not impleaded, the Supreme Court dismissed the writ petition, but gave liberty to the appellant to file a fresh writ petition.

He referred to Raunaq International Limited Vs. I.V.R. Construction Ltd. and Others, for the proposition that when the proceedings where the award of a tender by public authority is challenged, the Court must be satisfied that there is some element of public interest in initiating the proceedings. The Supreme Court also held that unless there is a substantial amount of public interest or the transaction entered into is mala fide, the Court should not intervene under Article 226in disputes between two rival tenderers.

He also referred to Food Corporation of Food Corporation of India Vs. M/s. Kamdhenu Cattle Feed Industries, the Supreme Court held that the question with regard to State action in contractual sphere should be determined not according to the claimants perception but in larger public interest wherein other more important considerations may outweigh what would otherwise be the legitimate expectation of the claimant.

For all these reasons, the learned counsel submitted that the Civil Revision Petition should be dismissed.

I have considered the submissions made by the respective counsel. Mr. Santhanam, learned counsel for the respondents 2 and 3 also made available to the Court, the report of the tender evaluation committee, A perusal of the same shows that they have rejected certain tenderers on the ground that they have not fulfilled the requirements.

As far as Clauses 6,7 and 8 are concerned, they have held that all the eligible tenderers have satisfied this condition. As regards Clause 7 which compels the tenderers to ensure that the vehicles are having the registration number of the year 1994, the Committee has found that all the tenderers have vehicles with registration after 1994 and the department should ensure only such vehicles are supplied for the department''s use and as regards Clause 8, which requires the tenderers to enclose a copy of the latest Income Tax Clearance Certificate, they have said that some of the tenderers have applied for Income Tax Clearance and have not enclosed and therefore this aspect may be verified while awarding the contract. They have then identified the respondents 1 and 4 and had recommended them for supply of vehicles on hire basis for two years as they have quoted the lowest rates. Then they have identified the next three lowest tenderers who have satisfied the condition and who may be considered by the department if they are agreeable to supply the vehicles at the rates offered by the respondents 1 and 4 for cars and vans respectively. In tins list, the petitioner''s name finds a place.

At my instance, Mr. Santhanam, provided a tabular column showing the position of the various tenderers with reference to Clauses 6,7,8 and 18, which are the crucial clauses. The fourth respondent appears to have satisfied the Clauses 6,7,8 and 18 and has been awarded the tender for supplying vans since their offer is the lowest. As regards the first respondent, there appears to be some difficulty. As regards Clause 7, they have given a list of vehicles of which atleast 4 are vehicles which bear registration numbers of years prior to 1994, and as regards Clause 8, the first respondent appears only to have applied for the Income Tax Clearance Certificates. Now, on the other hand, the petitioner has fully satisfied the Clauses. Not one of the cars offered by him is earlier to 1994 and he has also produced the Income Tax Certificate, therefore on the face of it, it might appear that though the tender of the first respondent is lower than that of the petitioner, the respondents 2 and 3 ought not to have waived these conditions in favour of the first respondent merely because they are the lowest tenderers.

In a case arising out of international tender reported in West Bengal State Electricity Board Vs. Patel Engineering Co. Ltd. and Others, the Supreme Court has held that lowest tender is the relevant criterion only when other conditions are satisfied.

Public Contract - Award to lowest tenderer - Rule applies only when all things are equal --Not when lowest bidder tails to satisfy die conditions subject to which bids are invited.

But, in this case, the report of the Evaluation Committee shows that as regards Clause 7, the Committee has directed the department to ensure that the cars supplied are cars of the year 1994 or later. Clause 6, only calls upon the tenderers to supply five vehicles. Now in the case of the first respondent, he has given a registration numbers of 12 cars of which only 4 are prior to 1993. So he may still be able to supply 5 vehicles which are of the year 1994 or later, and as regards the Income Tax Clearance Certificate, the Committee states that he has applied for it and the award would only be given subject to his production. As regards the granting of interim injunction in this case, the several factors must be kept in mind of which, the question of balance of convenience and public interest is crucial.

The department concerned is the Telephone Department, which caters to the needs of lakhs of subscribers, to nullify the grant of tender by issuing an order of injunction is definitely not in the interest of the public and the balance of convenience is also not in favour of granting an injunction. When we examine the conduct of the petitioner, the party who seeks injunction should do equity before he claims an order in equity. He was fully aware that the tender was awarded to other persons. Para 11 of the affidavit in support of the petition for interim injunction shows that the petitioner is aware that the respondent has decided to award the tender to other persons. In spite of this, he has chosen to implead only the department and not the persons who will be aggrieved by the order of interim injunction. Even after the counter had been filed, he has not chosen to implead as? party. Only after the interim injunction was granted by the trial Court, the respondent had filed an appeal as a third party. Another factor is that even before the suit had been filed the tender had been accepted and had been awarded to respondents 1 and 4 and valid contract had come into being. Clause 5 of the terms and conditions is as follows:

Acceptance of the tender of the successful tenderer and communication will constitute a valid contract for the enforcement of all the terms and conditions mentioned herein. In case of other chosen tenderers they will be treated as successful tenderers only if they communicate their acceptance of the approved rates to the Chennai Telephones.

Therefore, the interim injunction asked for restraining the respondents from awarding the contract had become infructuous.

The submission made by the learned counsel for the first respondent that the suit is bad for non-issuance of Section 80, C.P.C. is not dealt with here since I find in para 13 of the affidavit filed by the petitioner, there is a prayer for dispensing with notice u/s 80C.P.C. As regards the complaint of the petitioner that the conditions have been violated, at this prima facie stage, it is seen that the Clause 6 is complied with by the first respondent since he is able to supply more than 5 cars; compliance of Clause 7 can be ensured because out of the 12 cars offered by him 8 satisfied the condition regarding the year of registration and with regard to Clause 8, Income Tax Clearance has been applied for already. Therefore, I am unable to be persuaded that there is gross violation of the main condition. The big difference in the rate offered by the first respondent and the petitioner had really settled the issue. The learned Senior Counsel for the Central Government submitted that if the department had to accept the tender given by the petitioner the loss sustained would run into several lakhs. He also averred that the department is willing to include the petitioner also for supply of vehicles if he was willing to accept the rate given by the fist respondent.

The tender has already been accepted. The contract has been concluded even before the suit was filed. The question of balance of convenience and public interest are not in the petitioner''s favour. The conduct of the petitioner in not impleading the party, who might be affected by the injunction, is not free of blame. The petitioner has not alleged mala fide against the evaluation Committee or made any allegations against them. The above facts prevail upon me not to interfere with the order of the Court below. Therefore, these Civil Revision Petitions are dismissed. No costs. Consequently, the connected CMPs are closed.