In a writ petition against an administrative order, the Division bench of the Orissa High Court held that any order or letter of direction which is in contravention of the conditions stipulated in the tender documents cannot be sustained in the eye of the law.
Brief Facts:
The petitioner which is M/s. VS Agency Ltd., a proprietorship concern has filed the current writ petition to quash the letter dated 04.02.2022 of the opposite party which is the General Manager of Odisha State Office, Indian Oil Corporation Ltd (IOCL). Through the impugned letter, the appointment of the petitioner has been canceled and the security deposit has been forfeited. The letter also has put the petitioner on Holiday List and has debarred it from entering into any contracts with IOCL for a period of 3 years.
A tender was floated by the opposite party for hiring services of vehicles for official activities at Paradeep Refinery Coordination Office, Odisha for a period of 3 years. The Petitioner participated in the process of tender and he was selected and accordingly a letter of acceptance was issued in its favor. Later on, the petitioner submitted proposals before the opposite parties for reconsideration of working estimates as the estimated value was less than the actual expenses, while this was under consideration, the opposite party was served a show-cause notice. And later on, the impugned letter dated 04.02.2022 was issued to the petitioner.
Contentions of the Petitioner:
It is contended by the Learned Counsel for the petitioner that the order of debarment in the impugned letter is arbitrary, unreasonable, and contrary to the provisions of law and the order has been passed without following due procedure. Then the counsel also pointed out that the debarment from participating in the future tenders of IOCL is a punitive action and it goes against the conditions stipulated in the tender document.
Contentions of the Respondent:
The Learned Counsel for the Respondent reiterated the facts from their side and contended that a show-cause notice was issued to the petitioner for abandoning the contractor for hiring services of vehicles for the official activities to which the petitioner submitted the reply saying that it would be difficult on its part to adhere to the rates which were quoted during the bidding process. Therefore, since there was no other alternative, the authority passed the impugned order which may not be interfered with by this court. Therefore, the writ petition should be dismissed.
Observations of the Court:
The Hon’ble Court noted the important clauses of the tender and concluded that since the tender mentions that suspension of the bidder from being eligible for bidding in future contracts of IOCL is mentioned as a period of 1 year, the action taken by the authority to debar the petitioner for a period of 3 years cannot be sustained in the eye of law. It was further concluded that the impugned letter is de hors the terms and conditions of the tender call notice and thus is in violation of the doctrine of proportionality of administrative action. The court then noted that a bid document stipulates various conditions that regulate the relationship between the parties, therefore any order passed in contravention of the stipulated conditions cannot be sustained in the eye of the law.
The Decision of the Court:
The impugned letter was held to be in contravention of the tender documents and hence it could not be sustained in the eye of the law and the court held that the petitioner could have been debarred for one year as per the tender document, but now that one year has passed, the petitioner is now free to participate in any upcoming tenders of IOCL.
Case Title: M/s. VS Agency Ltd., Guwahati v. Indian Oil Corporation Ltd., Kolkata & Ors.
Coram: Justice B.R. Sarangi; Justice M.S. Raman
Case No.: W.P(C) NO. 15404 OF 2022
Advocates for the Petitioners: M/s. S.R. Mohanty and D. Acharya, Advocates
Advocate for the Respondents: M/s. (Miss) S. Mishra and N.K. Rout, Advocates, [O.P.No.2]
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