Shriram Creations vs State Of Chhattisgarh Through And Ors

Parth Prateem Sahu, J

The Petitioner has filed this petition seeking quashment of the order dated 07.03.2019 (Annexure P/2) issued by Respondent No.4.

The relevant facts for disposal of this writ petition are that, Petitioner is a proprietorship firm engaged in trading of toys, school kits, etc. and having its workplace at Raipur. Respondent No.4 issued a tender notification on 31.08.2018 calling interested tenderer/supplier/seller for supply of "pre-school kits" to 1748 Aganbadi/Mini-Aganbadi Centers of District Mahasamund. The last date for purchase of tender document was fixed as 29.09.2018 and to be submitted by 01.10.2018. The date and time for opening of bids was fixed as 01.10.2018 at 4.00 pm. The Petitioner has been identified to be eligible for award of work and vide order dated 07.03.2019 supply order was issued in his favour for supply of pre-school kit in 1748 numbers. The order of supply was received by the Petitioner on his mobile through Whats App. He immediately made written objection to Collector on 19.03.2019 primarily for extending time to 60 days as mentioned in tender document for supply instead of 10 days and to delete certain conditions mentioned in supply order, which are neither part of original terms and conditions mentioned in tender document nor part of Store Purchase Rules. When his objection was decided against him, he filed writ petition with following prayers :

"10.1 That, this Hon'ble Court may kindly be pleased to issue a writ in nature of certiorari and quash/set-aside the order no.3907/MABAVI/LEKHA/BHANDAAR/2018-19 dated 07.03.2019 and initiate afresh tender proceedings.

10.2 Any other relief which this Hon'ble Court may deem fit and proper in favour of the petitioners may kindly be passed."

Learned counsel for the Petitioner submitted that terms and conditions of the tender document have been altered; Chhattisgarh Store Purchase Rules, 2002 ('Rules of 2002' for short) have not been followed. Imposition of 100% penalty, recovery as per market rate was not part of tender condition in the tender document but it is mentioned in order dated 07.03.2019, Petitioner has been given only 10 days time for storing the goods in godown by tenderer instead of 15 days and for supply of goods to respective centers time frame of 60 days. He further submitted that in the Rules of 2002, in para 4.13, it is provided that the tenderer who is identified for supply of goods has to enter into an agreement with the Department and it also provides for penalty clause in violation of any of the terms and conditions of the agreement. No such agreement was signed between the parties. But the Respondents in a very arbitrary manner mentioned new stringent terms and conditions while issuing the supply order in his favour, which is detrimental and prejudicial to interest of the Petitioner. He also submitted that mentioning of such a new harsh clause in supply order issued in his favour is arbitrary exercise of power that too, when such condition does not form part of tender conditions mentioned in tender document. He submits that the Respondents could have amended the terms and conditions in advance by issuing corrigendum notification.

Per contra, learned counsel for the Respondents/State submitted that clause 24 of the tender condition in very specific terms authorizes Purchase Committee to amend the tender condition 'accept' or 'cancel'. He further submitted that clause 8 in the supply order has been mentioned in view of powers as provided under clause 24 of tender condition and mentioned in tender document. He further submitted that representation submitted by the Petitioner has been taken into consideration and placed before the District Level Purchase Committee, who looking to the contents of representation, extended time of supply/delivery and rejected prayer with regard to removal of the penalty clause. He also submitted that Petitioner has already worked earlier with the Department as Sukma District Dantewada wherein penalty has been inflicted upon the Petitioner for supply of goods of inferior quality, therefore, the Petitioner was already aware about the mentioning of new conditions in the supply order and Petitioner cannot be permitted to raise this ground that action on the part of Purchase Committee is arbitrary and illegal in mentioning additional terms and conditions in supply order.

Learned counsel for the Petitioner, in reply, submitted that action of imposing penalty with respect to supply of goods at Sukma District was under challenge before this Court.

We have heard learned counsel appearing for the respective parties and perused record carefully.

Clause 10 of tender condition forming part of the tender document specifically provides that as soon as tender submitted by tenderer is accepted, he is required to execute consent letter/agreement on a stamp-paper of denomination of Rs.50/- and thereafter, purchase order will be issued. Clause 10 also provides other conditions for supply of goods, which is extracted for ready reference :

"10. निविदादाता का निविदा स्वीकृत होने की स्थिति में तत्काल 50/- के स्टाम्प पर सामग्री आपूर्ति करने बाबत् सहमति पत्र/अनुबंध संपादित करना होगा तथा सामग्री की आपूर्ति क्रयादेश जारी किया जायेगा। क्रयादेश जारी होने के दिनांक से 15 दिवस के अंदर प्री स्कूल किट का भंड़ारण प्रस्तावक द्वारा अपने गोडाउन में क्रय किए जाने वाले जिले के मुख्यालय में किया जायेगा एवं सामग्री परिवहन से पूर्व इसका भौतिक सत्यापन जिला स्तरीय क्रय समिति से करवाया जायेगा। सामग्री सही पाये जाने पर इसे परियोजना स्तर पर स्वीकृत प्रदाता द्वारा परिवहन कर उपलब्ध कराया जायेगा। उक्त सामग्री स्वयं के व्यय पर भेजना होगा। जिन निविदादाता का निविदा स्वीकृत होगा उनका सेम्पल सामग्री के भुगतान तिथि से आगामी छः माह तक कार्यालय में रखा जावेगा। निर्धारित अवधि तक सामग्री प्रदाय नहीं करने पर नियमानुसार कटौती की जावेगी अथवा क्रयादेश निरस्त किया जा कर अमानत राशि छत्तीसगढ़ शासन के पक्ष में राजसात किया जावेगा। निविदादाता आपूर्ति हुए सामग्री का सक्षम प्राधिकारी से प्राप्ति अभिस्वीकृति सहित तीन प्रतियों में जीएसटी नंबर युक्त प्रिंटेड व कोडेड बिल प्रस्तुत करेगा।"

Clauses 11 and 12 provide that the tenderer will supply sample kit, which will be signed by the tenderer as well as District Programme Officer. It is further provided that if on comparison with the sample kit, goods supplied is to be found to be of inferior quality on physical verification, then said goods may be rejected and will be directed for taking back the said goods and the expenses will be borne by supplier/tenderer himself. If the goods were not taken back within 15 days, then the rent as fixed will be recovered from the tenderer. Clause 10 of tender condition provides for a detailed mechanism after acceptance of tender submitted by the tenderer till its supply and also provides for physical verification of the goods at godown in District place and it is to be supplied only after approval of the Purchase Committee.

The conditions enclosed with the tender document nowhere provide for imposition of 100% penalty or recovery at market rate, nor the penalty of double the rate after finding of difference rate with the market rate and the rate, on which, goods were supplied by the tenderer.

The employer or the party issuing the tender document can impose any of the terms and conditions subject it not being arbitrary or contrary to the public policy. The power given in Clause 24 to the employer for amending the terms and conditions can be understood to supplement the conditions already forming part of the tender document. Power to make amendment in terms and conditions of tender document cannot be taken as the authority to add in the terms and conditions more stringent then what is already mentioned in tender document and are available on the date of submission of tender document. But by mentioning that Committee is authorized to amend the terms and conditions bringing stringent condition prejudicially to the interest of Petitioner is contrary to the public policy because this clause of tender document will lead to unfair exercise of power by said Committee and may differ from person to person and will also oppose to transparency in the working of State instrumentalities. The public authorities cannot be given unbridled discretionary power so as to amend terms and conditions of the tender document of their choice that too, in supply order for the first time by adding the condition to be more stringent in nature than what already forms part of tender document.

Clause 8 of work order is reproduced below :-

''8. प्रस्तुत सैंपल से कम गुणवत्ता/मात्रा में सामग्री की आपूर्ति किये जाने पर बाजार दर से वसूली, 100 प्रतिशत की सीमा तक पेनाल्टी, आपराधिक प्रकरण दर्ज करने एवं फर्म को ब्लेकलिस्ट करने की कार्यवाही की जावेगी। बाजार दर एवं 100 प्रतिशत पेनाल्टी अर्थात- सामग्री का खुले बाजार में विक्रय करने वाले फर्म/व्यापारी से सैंपल सामग्री एवं प्रदाय सामग्री के मूल्य में अतरं की राशि समिति द्वारा ज्ञात कराई जावेगी एवं जो अंतर की राशि पाई जावेगी उसके दोगुनी राशि की कटौती की जावेगी।''

When Clause 10 of the tender notification provides that the goods stored to be physically verified in the District Level Purchase Committee and on finding it to be just, then only it will be transported and made available at project level. When the goods are to be certified before delivery to the project level, then how come the putting such Clause i.e. '8' in work order.

The perusal of terms and conditions of the tender document would show that in the document, Clauses are already there to meet the contingency, if any. Even if the employer finds it necessary to amend the terms and conditions from their past experience, if any, then the Respondents could have amended the terms and conditions in the tender notification itself before issuing the tender notification. If any exigency arises after issuance of notification, then the employer could have issued corrigendum notification or cancelled the notification at appropriate time and after amending the terms of tender notification would have issued fresh tender notification.

There is no dispute that the employer can put any term and condition in tender document according to their need subject to that it may not be against public policy or arbitrary but, the said term and condition should form part of the tender notification. This gives the bidder prior knowledge about it and its consequences in breach of such conditions prior to its participation and will be applicable to all.

In reply, the Respondents have not denied the pleading made in the petition by denying the facts of petition by filing para-wise reply. They have only stated that the Clause 24 of the terms and conditions of tender document provides for amending terms and conditions of the tender document. The Respondents have not controverted that the work order issued is contrary to purchase order Rules, 2002 and also contrary to Clause 10 of condition mentioned in tender document, where it mentions prior execution of agreement/consent letter on Rs.50/- stamp paper on acceptance of the offer.

The Hon'ble Supreme Court in the matter of Ramana Dayaram Shetty v. International Airport Authority of India and Others (1979) 3 SCC 489, has held thus :

"12............It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory."

Though Clause 24 of the tender condition prescribes power to amend, but at what time, is not mentioned. Discretion of amending tender condition does not mean that the terms or conditions be amended in the work order issued to the successful bidder. If this be permitted, it may lead to unfair and arbitrary practice because of power, and it will oppose to the transparency in action of the Government. This is also a way to bring in the practice of favoritism and nepotism. It will give scope to the authority to act according to their own whims, they may impose some condition for some person and may relax or to make some formal conditions against some, which may not be such stringent as in case of first one. This practice is not accepted by the Hon'ble Apex Court.

Further, the Hon'ble Supreme Court in the matter of W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Others (2001) 2 SCC 451 has held thus :-

"24. ...................The very purpose of issuing Rules/instructions is to ensure their enforcement lest the Rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. "

The bidders cannot be taken to surprise by mentioning any further stringent condition that too, directly in the work order issued as it has been done in the instant case in the garb of the power to amend conditions as mentioned in tender notification. The unbridled power given to impose any further condition or amend the conditions encourages and provide for discrimination, arbitrariness or favoritism which are totally opposed to rule of law or Constitutional value. The action of Respondents in putting conditions in supply order of bringing 100% penalty clause and recovery of double the rate of market rate prima facie raises doubt in the mind with regard to the transparency and fairness in action of Respondents. The State or its instrumentalities have to act in accordance with the rule of law, reasonableness and not to act which suits their whims. When power to amend forms part of the tender notification then its exercise should not be arbitrary or unreasonable.

From the aforementioned discussion, in the opinion of this Court, Respondent No.4 has acted arbitrarily and unreasonably in issuing order dated 07.03.2019 by mentioning the conditions of supply which are not framing part of the tender documents and also committed illegality in issuing the order Annexure P/2 without entering into agreement as prescribed in Clause 10 of the tender document. For the foregoing reasons, we set aside the order dated 07.03.2019 (Annexure P/2).

Respondent No.4 may be at liberty to issue fresh supply order in accordance with law or to cancel the proceeding of tender notification dated 31.08.2018 and to issue fresh NIT by mentioning all the important terms and conditions which they feel are necessary for subject work.

The writ petition is allowed in aforementioned terms.