Sharshad Khan vs Union of India

C.N. Ramachandran Nair, J.—Connected Writ Appeals are filed against the judgment of the learned Single Judge approving the authority of the Respondents to collect security deposit at the time of sale of tender forms.

We have heard learned Counsel for the Appellant and learned Standing Counsel for the Lakshadweep Administration.

The practice adopted by the Respondents is a unique one because while in all PWD/CPWD tenders security deposit is demanded only on submission of tender forms, the demand of the Respondents is payment of security deposit even for sale of tender forms for which Rs. 500/- is collected for each tender form. While the learned Counsel for the Appellant submitted that there is no justification or basis for the demand of security deposit at the time of purchase of tender forms and the Respondents'' demand is arbitrary, learned Standing Counsel appearing for the Respondents sought to sustain the practice by stating that tender forms purchased are resold and there is tendency of cartel formation in the submission of tenders. We are unable to accept this contention because collection of security deposit at the time of sale of tender forms cannot achieve any of these objectivesm. The authority tendering work should be able to identify genuine contractors tendering for the work, and from the terms offered itself, they would be able to realise whether there is cartel formation and if so contract should not be awarded and nothing prohibits the Respondents from rejecting tenders submitted by those forming cartel In any case we do not think there is any justification to collect security deposit at the time of sale of tender forms for which Rs. 500/- is collected on the sale of each tender form. We feel the Respondents can consider prescription of eligibility for tenderers and production of any proof thereof for the purpose of their eligibility to get tender forms. In other words, our above findings will not bar the Respondents from adopting any measures to identify genuine and qualified contractors to apply for and for obtaining tender forms. Leaving these open to the Respondents, we direct the Respondents not to continue the practice of collecting security deposit at the time of sale of tender forms. However, security deposit should be collected at the time of acceptance of tenders. The Respondents can also consider whether forfeiture of security deposit can be provided in the case of tenders submitted by those forming cartel.

Accordingly, these Writ Appeals are allowed vacating the judgment of the learned Single Judge and by disposing of the Writ Petitions as above. However this judgment will not affect the validity of sale of tender forms against collection of security or refusal to issue tender forms for non-payment of security deposit for the tenders already invited, for which, time for submission is over.

These Writ Appeals are allowed as above.