Sukuma Export Ltd vs State Of Uttarakhand & Others

Sudhanshu Dhulia, J

There are four sugar factories in the State of Uttarakhand. Two are the cooperative sugar factories and the other two are corporation sugar factories which are all under the supervision and control of the Uttarakhand Sugars, which is the apex body of the State Government.

Under the Scheme of the State Government, a part of the sugar manufactured by each of these factories has to be exported to other countries under the Central Government Scheme. The sugar factories in the State also get a subsidy from the Government for their export.

A part of the sugar manufactured by each of the sugar factories was to be taken away for export by the export companies which are engaged in the business of export of sugar, and therefore, an advertisement was issued by the Uttarakhand Sugars calling applications from eligible bidders to make their bid for the said purpose. The last date of submitting the bid was 03.07.2019 at the office of Uttarakhand Sugars, Near-Railway Crossing, Badripur Road, Jogiwala, District Dehradun.

The present petitioner as well as the private respondent nos.3 to 8 who had participated in the bid had qualified the technical bid. Another step was the opening up of the financial bid of those who were technically qualified. According to the petitioner, instead of opening the financial bid, what was done by the Uttarakhand Sugars was that it resorted to an open auction by "outcry", in which the present petitioner refused to participate. The highest bidder in the open auction was admittedly the private respondent no. 3 who has been given the contract by now and he is in the process of lifting the sugar from the premises of the different sugar factories. Meanwhile, the process has been challenged by the petitioner before this Court.

This matter was first taken up by this Court on 12.07.2019 on an urgent mention made by the learned counsel for the petitioner in the morning. The file was called and the learned Senior Counsel for the petitioner Sri M.S. Pal made an argument that since there was no such provision for an open auction, therefore, the entire process has been vitiated.

On 12.07.2019, following order was passed by this Court:-

"Mr. M.S. Pal, Senior Advocate assisted by Mr. Ashit S Amist, Advocate for the petitioner.

Mr. S.R. Joshi, Standing Counsel, for the State/respondent no.1.

Mr. T.A. Khan, Senior Advocate assisted by Mr. Vinay Bhatt, Advocate, for respondent no.2.

The petitioner has challenged the open outcry bid/auction which was held on 03.07.2019 and the tender awarded to respondent no.3 in the said auction.

According to the petitioner, the respondents have apparently deviated from the process given in the advertisement inasmuch as between opening of the technical bid and the financial bid, they have resorted to open an auction/outcry in which the petitioner did not participate and lodged his protest for the reasons that this was not a part of the procedure prescribed in the advertisement.

The contract evidently being given to the person who made the highest bid in the outcry, which according to the petitioner is higher than what the petitioner has bidded, but in the initial tender process, according to the petitioner, he still remains H1.

Under these facts of the case, an interference is being made.

Till the next date of listing, status quo as on today shall be maintained.

List this matter on 15.07.2019 in the daily cause list as the first case.

Meanwhile, learned Senior Counsel for the respondent no.2 shall get instructions in the matter.

Let a certified copy of this order be supplied today itself on payment of usual charges."

The said order was passed by this Court in the presence of the learned Senior Counsel for respondent no. 2 Sri T.A. Khan and the matter was directed to be listed on 15.07.2019. On 15.07.2019, this matter was listed before this Court, but on the request of the learned counsel for the petitioner, the matter was adjourned and now the matter has come up before this Court today.

Learned Senior Counsel for respondent no. 2 Sri T.A. Khan and learned Senior Counsel for respondent no. 3 Sri U.K. Uniyal submit that correct facts were not placed before this Court at the time when the interim order was granted. They have drawn the attention of this Court to Condition No. 15.1 of the tender notice, which reads as under:-

"15.1 Tenders are invited with two bid system. The submitted tenders will be technically evaluated and the financial bids of technically qualified firms will be kept reserve for subsequent opening later on. Secondly on the prefix date, the auctions process will be initiated by fixing minimum reserve price as per enclosed format. After auction process is over, the rate of highest bidder will be kept for further comparison. Thereafter the financial bid of technically qualified firm will be opened and compared with highest rates received during auction. Highest rate of the above two procedures will be accepted subject to match with departmental prefixed price, otherwise negotiation may be done with highest quoted bidder."

(emphasis provided)

A bare perusal of the aforesaid condition makes it very clear that what has been followed by the Uttarakhand Sugars is in accordance with law and purely in terms of the condition as laid down in tender notice itself. The aforesaid condition clearly stipulates that it is a two bid system and financial bids of only such bidders will be opened who have qualified in the technical bid. The petitioner and the private respondent nos. 3 to 8 are the ones who have both qualified the technical bid. The aforesaid condition thereafter clearly says that the financial bids of those bidders who have technically qualified will be "kept reserve for subsequent opening later on". Thereafter before the opening of the financial bid, the auction process has to start where a minimum reserve price has to be given and after the auction process is over, the rate of highest bidder will be kept for further comparison. Meaning thereby that the financial bid of technically qualified bidders will be opened and compared with highest rates received during auction and the "highest rate of the above two procedures will be accepted".

This leaves absolutely no room for any kind of doubt that the procedure as required in law was followed by the Uttarakhand Sugars. In fact, they had no other option but to follow this procedure, which requires them to have an open auction as well so that the rates be compared. Had they not followed the condition, they themselves would have violated the conditions of the process.

It is again an admitted fact that in the auction respondent no. 3 has given the highest bid. In fact, this Court has been informed that the difference in the price of petitioner and respondent no. 3 is of Rs.100/- per quintal and the total quantity of sugar which has to be lifted is more than two lakh quintals, so the aggregate amount would make a difference which would run into more than a crore.

Learned Senior Counsel for the petitioner lastly submits that as per Condition No. 5.5 of the tender notice, the financial bid of the bidder who qualify in the technical bid has to be opened in the office of the Uttarakhand Sugars, Near-Railway Crossing, Badripur Road, Jogiwala, Dehradun, but in the present case, it has been opened at the Secretariat and this is the violation of the condition of the tender notice.

All the same, this condition does not go to the root of the matter. In any case, the objection which was raised by the petitioner in his letter dated 04.07.2019 does not even speak of the aforesaid alleged change of place.

Ultimately what has to be seen by this Court is whether the procedure followed is a fair procedure or not and whether it is in the best interest of the State and it ensures best returns.

This Court finds no anomaly in the process. The writ petition fails and it is hereby dismissed. Interim order dated 12.07.2019 is hereby vacated.