Atlas Transport Company vs State Of Maharashtra And Ors.
2004 Latest Caselaw 305 Bom

JUDGMENT

B.R. Gavai, J.

1. Rule. Rule made returnable forthwith. Heard finally by consent of parties.

2. The decision of the respondent No. 1 State Government rejecting the tender of the petitioner for the transportation of foodgrains and other goods, within the district of Akola, communicated by respondent No. 3 Additional Collector, Akola, vide communication dated 18-12-2003 and the subsequent award of the contract in favour of respondent No. 5 are the subject matter of challenge in the present petition.

3. The facts in brief out of which the present petition arises are as under :--The respondent No. 3, Additional Collector, Akola vide tender notice dated 26-8-2003, invited tenders for awarding contract for inter district and intra-district transportation of foodgrains, in Akola district, under the Public Distribution System, implemented by the respondent No. 1, for the period from 1-9-2003 to 31-5-2006. In response to the aforesaid tender notice, bids of four duly qualified bidders were opened. The rates quoted by these four bidders are as under :--

i) Atlas Transport Company (Petitioner) : 14% below the base rate.

ii) Krishna Kumar Gokulchand             :   250% above the base rate.
iii) Shamshuddhin Yusuf Ali              :   277% above the base rate.
iv) N. L. Paldewar                       :   288% above the base rate. 
 

From the above rates, it can be seen that the difference between the rates quoted
by the petitioner and the second lowest bidder is 264%.
 

4. The Additional Collector, Akola addressed a communication dated 20-9-2003, to the petitioner, thereby requiring the petitioner to submit the details regarding the expenditure, which was likely to be incurred by the petitioner on every trip for carrying the goods under the tender. The said information was directed to be submitted on or before 23-9-2003. Vide communication dated 23-9-2003, the petitioner sent his reply to the Additional Collector and informed him that since the rates quoted by him are competitive and since it is the business secret, the details cannot be supplied. However, vide the said communication, the petitioner informed the Additional Collector, that the said rates are quoted after taking into consideration all the commercial aspects and assured that the work under the tender would be carried on with utmost competence.

5. In the meantime, the petitioner also addressed a communication dated 7-10-2003, to the Principal Secretary, Food and Civil Supplies Department, Mantralaya, Mumbai. It was stated in the said communication, that though the rates quoted by the petitioner were the lowest, he was not yet awarded the contract. It was also pointed out that the rates quoted by the petitioner were lower than the ones, at which the contractor, who was previously awarded contract, was working and as such, there was substantial loss to the revenue. The petitioner had, therefore, requested to immediately call the petitioner for signing the contract.

6. It appears, that, though the petitioner had earlier refused to give the rate analysis, vide communication dated 14-10-2003, he submitted the breakup of the rates and explained the feasibility of the rates quoted by him. It is further pointed out in the said communication, that the rates quoted by the petitioner were comparable with the rates at which the contract was awarded for the period of three years, i.e. 2003-06 in Washim, Thane, Gondia and Parbhani districts.

7. It appears, that, there was certain correspondence, between the State of Maharashtra and the Additional Collector on the subject matter. Vide communication dated 31-10-2003, the State Government directed the Additional Collector, Akola, to give his explanation on certain points raised in the said communication. However, by Fax communication dated 18-12-2003, the respondent State Government, informed the Additional Collector, Akola that since the rates of the petitioner were not workable and since there were 5 criminal cases pending against the petitioner, an information was sought from the petitioner. It is further stated in the said communication, that since the petitioner was refusing to give the information, so also the petitioner had given an incorrect information vide communication dated 14-10-2003, it was not suitable to accept the tender of the petitioner and that the second lowest bidder, i.e. the respondent No. 5 should be invited for negotiations. It was further directed by the said communication, that after negotiations regarding rates, report should be sent to the State Government, for further action.

8. Subsequent to the aforesaid communication of the State Government dated 18-12-2003, the Additional Collector, Akola issued a show-cause notice to the petitioner, as to why he should not be blacklisted. Aggrieved by the aforesaid fax communication, dated 18-12-2003, addressed by the State Government to the Additional Collector and the show-cause notice of blacklisting addressed by the Additional Collector, Akola dated 24-12-2003, the petitioner approached this Court by way of present petition. The said petition came up for hearing before the learned Vacation Judge on 2-1-2004. On the said date, the learned. Assistant Government Pleader, appearing on behalf of the State Government, made a statement, that the work order was already issued in favour of M/s Krishna Kumar Gokulchand on 31-12-2003, for the period from 1-1-2004 onwards. Since the tender was awarded in favour of the said M/s Krishna Kumar Gokulchand, the petitioner filed an application for amendment, seeking thereby to implead the said M/s Krishna Kumar Gokulchand as respondent No. 5 and to amend the prayer clause, praying for quashing and setting aside the award of contract in favour of respondent No. 5 and for consequential interim orders. This Court vide order dated 7-1-2004, allowed the application for amendment and issued notice to newly added party.

9. Looking into the controversy involved, we had directed the State Government, to produce all the original record concerning the subject matter of the petition, vide our-order dated 19-1-2004. Pursuant to the said order, the record was placed before the Court. On perusal of the record, it was prima facie found that, the State Government, had not taken into consideration the report of the Financial Advisor-cum-Deputy Secretary in the Food & Civil Supplies Department. Shri Shekhar Nafde, the learned Senior Counsel, appearing for the respondent State, after seeking instructions in the matter, made a statement before us on 11-2-2004, that the State was willing to reconsider the grant of contract, which was subject matter of the petition, after taking into consideration, the various reports which were placed before the Hon'ble Minister, subsequent to the passing of the order, granting contract in favour of respondent No. 5.

10. When the matter was listed before us on 25-2-2004, Shri Nafde, the learned Senior Counsel, representing State of Maharashtra, made a statement that the Hon'ble Minister after considering all the relevant reports, had reaffirmed the decision of rejecting the tender of the petitioner and awarding the contract to respondent No. 5.

11. On the said date, we, therefore, heard Shri M.G. Bhangde, the learned Counsel for the petitioner, Shri Shekhar Nafde, the learned Senior Counsel for respondent State and Shri S. V. Manohar, the learned Counsel for the respondent No. 5, at length on the merits of the matter and closed the matter for orders.

12. Since it was brought to our notice on 4-3-2004 that an additional affidavit, was filed on behalf of respondent No. 5; vide our order dated 5-3-2004, we granted ex-post-facto leave for filing the said affidavit and also granted liberty to the petitioner, to file his counter-affidavit to the said affidavit.

13. Shri M.G. Bhangde, the learned Counsel appearing on behalf of the petitioner, submits that the rejection of the petitioner's tender is wholly arbitrary and against public interest. Shri Bhangde submits that the tender of the petitioner has been rejected only on two grounds; firstly, that the rates quoted by the petitioner are not workable and secondly, that there are five criminal cases pending against the petitioner.

14. Insofar as the first ground is concerned, Shri Bhangde submits, that the respondent State Government itself had in three districts, awarded the contract for a period of three years, at the rates which were lesser than that of the petitioner and, therefore, it does not lie in the mouth of the State Government, to say that the rates quoted by the petitioner are not workable. He further submits, that the petitioner had given the complete analysis of the rates quoted by him and pointed out to the respondent Authorities, as to how these rates were workable. Shri Bhangde further submitted that, the reason that the rates are not workable, is based on assumption that the truck will only make one trip, in a day. He submitted that, the said assumption is based on an erroneous premise. He pointed out from the record, that the trucks engaged by the old contractor, had made multiple trips in a day and, therefore, the reason given by the respondents was totally incorrect reason. Insofar as the second ground is concerned, Shri Bhangde submitted that the ground regarding the petitioner, being involved in criminal cases, was totally extraneous, inasmuch as the said complaints were lodged at the behest of business rivals of the petitioner. He further submitted that all these cases are related to the midnight of 15-8-2002. He submitted that, in any case, till the petitioner was found guilty of the offences, petitioner cannot be deprived of award of contract.

15. Shri Nafde, in reply, submitted that the State Government had taken into consideration, all the relevant material and had rejected the tender of the petitioner on following 5 grounds :--

(i)      Past record of the petitioner,
 

(ii)    Current refusal at Washim and the consequent disputes,
 

(iii)   Criminal cases under Essential Commodities Act pending against the petitioner,
 

(iv)    Rates not workable and
 

(v)     non-co-operative attitude of the petitioner. 
 

16. To elaborate each of the aforesaid five points Shri Nafde made his submissions in detail. In respect of the first and second grounds, Shri Nafde, submitted that the petitioner was lowest bidder, insofar as Washim district is concerned. However, he refused to accept the tender, though he was lowest, on the ground that he should get both intra-district and inter-district contracts. On failure to get both the contracts, he filed a suit along with an application for injunction. Shri Nafde, submits that, his application for injunction has been rejected on 22-9-2003. Shri Nafde, therefore, submits that the past record of the petitioner and his current refusal not to accept the tender, at Washim and drag the State Government into litigation, was a relevant ground, so as not to award contract though he was lowest.

17. Insofar as third ground is concerned, he submitted that there are five cases under the Essential Commodities Act, registered against the petitioner. He submitted that, these five cases are related to the petitioner using kerosene in his trucks. He submitted that, if the State Government had decided to reject a tender of firm like the petitioner, who had a criminal background, no fault could be found with the decision.

18. Shri Nafde, further submitted that the State Government on thorough application of mind had found that the rates offered by the petitioner, are not workable. He submitted that, a truck can make only one trip in a day and as such, the rate analysis given by the petitioner was not proper. He submitted that, the work involved distribution of foodgrains and as such the State Government had rightly considered that, if the petitioner is awarded the contract, there is possibility of he giving away the contract, leading to disruption of the public distribution system. Insofar as, the last ground is concerned, Shri Nafde submitted that the petitioner was of a non-cooperative attitude. Though the Additional Collector had asked for a rate analysis from him, he had refused to give the same.

19. Shri Nafde, to sum up his arguments, submitted that the administrative action can be set aside by this Court, while exercising the jurisdiction under Article 226, only if the action was found to be unconscionable or that it was patently unreasonable. He submitted, that the paramount consideration, before the State Government, was whether timely supply can be assured. He submitted, that, if, on the material before it, the State Government came to a conclusion, that if contract was awarded in favour of the petitioner, the paramount object of timely supply cannot be ensured, the decision of the State Government in rejecting the tender of the petitioner was liable to be upheld. Shri Nafde lastly submitted that, the lowest bidder has no absolute right, for award of a contract and the State can reject it for valid reasons.

20. Shri S.V. Manohar, the learned Counsel on behalf of respondent No. 5, adopted the submissions advanced by Shri Nafde. Shri Manohar further submitted that, it can be seen from the chart submitted by the petitioner himself, that the rates were not workable. He relied on the judgment of the Supreme Court in the case of State of U.P. and Ors. v. Vijay Bahadur Singh and Ors. , the judgment of the Division Bench of this Court in the case of Kanchi Fleet Movers v. Collector of Solapur and Ors. reported in 1998 (3) Mh.L.J. 307 and the judgment of the Single Judge of the Calcutta High Court in the case of Omprakash Patwarika v. Onion of India and Ors. in support of his submission, that it is permissible for the authorities to reject the tender of the lowest bidder, if the said decision is based on the consideration of the irrelevant material.

21. In rejoinder, Shri Bhangde refuted the arguments advanced by Shri Nafde. He submitted that, insofar as the past record and current refusal at Washim is concerned, the petitioner was willing to take contract, if both intra and inter-district contract was awarded. Since the same was not granted to him, he had taken recourse to the legal remedy, available to him by filing a suit. In any case, since the earnest money deposit was returned to the petitioner, no grievance can be made on that count. Insofar as criminal cases are concerned, he submitted that, they were filed with a mala fide intention, by the business adversaries and that the pendency of the criminal case cannot be a ground to uproot a lowest bidder. Insofar as the ground of rates being not workable is concerned, he reiterated that since in the three districts, the contracts were already awarded at the rates lower than the ones quoted by the petitioner, the same ground was totally unavailable to the respondents. He also submitted that, the ground that the petitioner was non-cooperative was also imaginary, inasmuch as the petitioner had given the complete information as sought by the respondent Authorities.

22. We have given anxious consideration to the submissions made at the Bar and have also perused original record of the State Government.

23. There cannot be any dispute, regarding the proposition, canvassed by Shri Nafde, the learned Senior Counsel on behalf of respondents Nos. 1 to 4 and Shri S. V. Manohar, the learned Counsel on behalf of respondent No. 5, that the lowest bidder has no right to award of contract and the State Government is entitled to reject the lowest bid if the decision is based on consideration of relevant material.

24. There can also be no dispute regarding the proposition, that while exercising its jurisdiction of judicial review of an administrative action, this Court does not sit as an appellate Court; but would only examine as to whether the action is vitiated by arbitrariness, unfairness, illegality, irrationality or unreasonableness.

25. The Apex Court in the case of Tata Cellular v. Union of India has laid down the parameters in which the judicial review, of an administrative action, in contractual matters, is permissible. The Apex Court in the aforesaid judgment has observed thus :--

"70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.

71. Judicial quest, in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review."

It will also be useful to refer to some of the readily available recent judgments of the Apex Court on the scope of judicial review of an Administrative Action- The Apex Court in the case of Haryana Financial Corporation and Anr. v. Jagdamba Oil Mills and Anr. has observed thus :--

"10. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the rule of law and to prevent failure of justice......."

The Apex Court further in the case of Onkarlal Bajaj and Ors. v. Union of India and Anr. has observed thus :--

"35. The expression "public interest" or "probity in governance" cannot be put in a straitjacket. "Public interest" takes into its fold several factors. There cannot be any hard-and-fast rule to determine what is public interest. The circumstances in each case would determine whether government action was taken in public interest or was taken to uphold probity in governance.

36. The role model for governance and decision taken thereof should manifest equity, fair play and justice. The cardinal principle of governance in a civilized society based on rule of law not only has to base on transparency but must create an impression that the decision-making was motivated on the consideration of probity. The Government has to rise above the nexus of vested interests and nepotism and eschew window-dressing. The act of governance has to withstand the test of judiciousness and impartiality and avoid arbitrary or capricious actions. Therefore, the principle of governance has to be tested on the touchstone of justice, equity and fair play and if the decision is not based on justice, equity and fair play and has taken into consideration other matters, though on the face of it, the decision may look legitimate but as a matter of fact, the reasons are not based on values but to achieve popular accolade, that decision cannot be allowed to operate."

26. The action of the State Government, therefore, must be guided by reasonableness, judiciousness, fairness, equity and above all it should be in the public interest. Since the Government is the guardian of finances of the State, the action must also be such, that it protects the financial interests of the State. In the touchstone of these parameters, we will have to examine, as to whether the decision making process, in the present case has been guided by reasonableness, judiciousness, fairness and as to whether the decision maker has taken into account the public interest and as to whether the decision protects the financial interests of the State. We will also have to examine, as to whether, the decision has been guided, by relevant considerations, or extraneous considerations.

27. As already discussed hereinabove, since it was noticed that the ultimate decision of the Hon'ble Minister of rejection of the petitioner's tender and calling respondent No. 5, for negotiations was taken, without considering the report of the Financial Advisor-cum-Deputy Secretary, the learned Counsel for the respondent State, had made a statement, that the State was willing to reconsider the matter, of grant of contract after considering all the relevant reports. However, on the next date, i.e. 25-2-2004, Shri Nafde submitted that, the State Government had reconsidered the matter, after taking into consideration all the relevant material and had affirmed its earlier decision. We have also perused the subsequent notes, made on the file by the Hon'ble Minister. It appears from the file, that the Financial Advisor had raised certain points in the file, objecting to the recommendations of Additional Collector, Akola. It is needless to state that the Financial Advisor is an officer, appointed by the State Government, who is possessing the requisite expertise in the matter, having knowledge of the intricacies of the financial matters of the department. As against this, the Additional Collector, is an officer in the district looking after various departments, one of which is Food and Civil Supplies. It is, no doubt, true that, when an administrative authority, chooses one of several courses of action, the Court should not interfere, unless the course taken is unfair and unreasonable. From the perusal of the file, it appears that the Hon'ble Minister has chosen to accept the report of the Additional Collector as against that of the Financial Advisor-cum-Deputy Secretary. Initially the decision taken by the Hon'ble Minister, was in total ignorance of the report of the Financial Advisor. However, subsequently, the Hon'ble Minister, has considered the report of Financial Advisor-cum-Deputy Secretary in the Food & Civil Supplies Department.

28. The Financial Advisor-cum-Deputy Secretary has raised certain points in the file. The translated text of some of these points is reproduced as under :--

1)      The points are taken into consideration in respect of rate analysis. On what basis these points are taken or are there any guidelines in respect of those points ?
 

2)      It is observed that the calculations of the expenditure are shown unreasonably increased by about 200 to 300% more in the rate analysis in comparison to the Government based rates.
 

3)      The depreciation of the vehicles and the miscellaneous expenditure of the Transport contract are not shown in the rate analysis.
 

4)      The maintenance expenditure (average per day expenditure) appears to be unreasonable and excessive. The classification of the expenditure included in it should be given.
 

5)      In the statement the rate analysis of transport expenditure it is bound to be done by presuming only on trips per day for all. distance and, therefore, it is necessary to take the expenditure into consideration for various owners taking into consideration the trips done per day.
 

6)      The calculation of interest on the vehicle loan does not appear to be reasonable. The rates of interest on loan shall be taken into consideration as per the rates of interest of the Government Banks.
 

7)      It is not found appropriate to include transport deficit in rate analysis.
 

8)      In respect of rate analysis of the transport the said rate analysis shall be done by obtaining technical advice from Public Works Department and Irrigation Department.
 

9)      It is necessary to determine whether or not the rates mentioned in the tender are reasonable taking into consideration the facts that other goods are available for transportation in the return trip.
 

10)    In order to verify the reasonableness of the rates in the tenders it is necessary to verify the variation of rates as put forth in last 3-4 years.
 

11) In view of the report lodged with the police against Atlas Transport Company, it is found that the said trucks were not belonging to the said company but those were belonging to some other persons. Hence particulars be supplied, namely, whether or not the truck owners and the Atlas Transport Company had transaction with each other, whether or not the truck owners had made available the trucks on company work and whether or not the trucks were on the works of the company when those were caught (by the police).

12)    In the terms and conditions of the agreement, there used to be a provision of penalty to the contractor if he fails to perform the transportation work as per the conditions. In the circumstances, the doubts that their rates are not affordable to M/s Atlas Transport Company seems to be baseless.
 

13)    If any judicial proceedings were filed against the tenders, please furnish to the Government the particulars of the case and orders of the Court passed in it.
 

14)    In your letter dated 24-9-2003, it is mentioned that M/s Atlas Transport Company avoided to give the details of expenditure taking the base of business secrecy. However, if you seek the details it is necessary for it to furnish the same. Hence, it is necessary to obtain the details from the tenderer for taking decision in the matter..........." 
 

While considering the question of feasibility of the rates, the Hon'ble Minister has accepted the recommendations of the Additional Collector and negatived the remarks of the Financial Advisor on the ground that the rates quoted by the petitioner, if compared with the rates of one Zakir Hussain Yusuf AH for the last year, would show that they are unworkable. The further consideration of the Hon'ble Minister, is that, the said Shri Zakir Hussain Yusuf Ali, had refused to work on the old rates for the year 2003-06. However, the Hon'ble Minister has totally ignored the fact, that in the other districts the contracts were already awarded at the rates lower than that offered by the petitioner for a period of three years. The Hon'ble Minister has also not taken into consideration, the fact that the contractor, who was awarded contract for earlier period was also doing multiple trips.

29. The Financial Advisor-cum-Deputy Secretary, on the comparison of the rates, on which the Irrigation and Public Works Department was hiring trucks, had found that the rates given by the petitioner were workable. However, the Hon'ble Minister on the ground that the said rates are pertaining to the other department, rejects the remarks of the Financial Consultant and Deputy Secretary. The Hon'ble Minister, further finds that the remarks of the Financial Consultant, that it is possible to have more than one trips in the day, is not acceptable, on the ground that the same is not based on local geographical factors. However, the Hon'ble Minister has lost sight of the fact, that in the other districts having similar Geography, the contract has been granted on the rates lower than the one quoted by the petitioner.

30. Regarding the criminal cases, Hon'ble Minister find that, there is a prima facie evidence, against the petitioner, for the offences punishable under Essential Commodities Act and, therefore, it will not be advisable to award contract to the petitioner. From the perusal the notings of the Hon'ble Minister, it appears that the reconsideration by the Hon'ble Minister, is only an empty formality. The Hon'ble Minister while writing the second note, appears to have attempted to cure lacunae, that were in the first noting. It appears that the Hon'ble Minister was, pre-determined to reaffirm his earlier decision, without giving a fresh look to the matter.

31. We, therefore, find that the decision of the Hon'ble Minister was based upon various extraneous and irrelevant considerations. The consideration of refusal of the petitioner, to accept tender at Washim, was not a "relevant consideration, inasmuch as the petitioner wanted contract, for both the intra and inter-district supply and that since he could not get it, he had approached the Competent Court of law. In any case, since the respondent State Government, had itself refunded him the earnest money deposit, said ground could not have been taken into consideration. If the State Government was aggrieved by his refusal to accept the tender, the State Government could have very well forfeited the earnest money deposit.

32. Insofar as, the criminal cases under the Essential Commodities Act are concerned, as already discussed hereinabove, all of them are of the same midnight. It is the submission of the petitioner, that they have been falsely implicated in these cases, by their business rivals. We need not go into that question at this stage. In any case, these cases are still pending and just because the criminal cases are pending, the petitioner cannot be deprived of being considered for award of contract. In any case, these criminal cases have no nexus with the work of transportation of grains.

33. Insofar as the ground, regarding rates being not workable, is concerned, the same is wholly without substance. As already pointed out, in the three districts of Sholapur, Hingoli and Latur the State Government, itself has awarded contracts at the rate which are less than the one, which are offered by the petitioner. It is further pertinent to note that the base rates have been prepared by the State Government itself. There cannot be, therefore, any logic, in saying that the rates, which are near about same, as the basic rate are not workable. There cannot be any rationale, in saying that the rates are workable in three districts, but not workable in one district.

34. Insofar as the petitioner being not co-operative is concerned, the same is also devoid of substance. On the demand made by the respondent Additional Collector, for supply of the rate analysis, though initially the petitioner had not given the same, on the ground of business secrecy and competition, subsequently he has given all the details vide his communication dated 14-10-2003.

35. We have, therefore, no hesitation to hold that all the aforesaid considerations which have weighed with the Hon'ble Minister, were irrelevant and were extraneous for the purpose of award of contract of supply of foodgrains under the public distribution system at Akola.

36. On the contrary, the Hon'ble Minister has failed to take into consideration various relevant factors, as under :--

(i)     That, the rates quoted by the petitioner were only 14% below the base rates. The base rates were prepared by the State Government itself and, therefore, there was no logic, in saying that these base rates were unworkable.
 

(ii)    That, the rates which were offered by the petitioner, were higher than the ones, on which the contracts were already awarded, for the period of three years, i.e. 2003-06, in the districts of Sholapur, Hingoli and Latur.
 

(iii)   That the petitioner had successfully completed the work in question, during the period 1992-93, 1993-94 and 1995-96 and that there was nothing adverse against the petitioner, during that period.
 

(iv)   That the report of the Financial Advisor-cum-Deputy Secretary, Food and Civil Supplies was based on his expertise in the matter and that he had taken into consideration all the relevant material.
 

(v)     That there was sufficient security with the respondent State, by way of Earnest Money Deposit, Bank Guarantee and the Solvent Sureties, in order to safeguard the interest of the Government, in the event the petitioner does not complete the tender.
 

(vi)    However, in our opinion, the most paramount consideration, that ought to have weighed with the Hon'ble Minister and which has not even been referred to by the Hon'ble Minister, is the larger public interest, of protecting the financial interests of the State. The Hon'ble Minister has not even referred to the fact, that, by rejection of the petitioner's tender and by award of the same in favour of the respondent No. 5, the State Government was required to pay more amount of Rs. 5.89 crores. The Hon'ble Minister ought to have taken into consideration, that by awarding contract to the respondent No. 5, thereby rejecting the claim of the petitioner, huge loss would be caused to the public exchequer. However, the Hon'ble Minister, leave aside considering the same, has not even referred to it. In our view, non-consideration of these relevant factors has vitally affected the decision making process. 
 

37. In any manner, we are unable to understand the haste, in which the contract was awarded in favour of respondent No. 5. Though the tenders were opened on 18-9-2003 and a lengthy correspondence was going on, between the Additional Collector and the State Government till 18-12-2003, on which date the State Government, informed the Additional Collector regarding the rejection of the petitioner's tender within 12 days, the work order was already allotted in favour of respondent No. 5. It is difficult to understand as to how the petitioner's case was being examined for a period of three months and as to how the respondent No. 5 was given work order on 31-12-2003, i.e. within a period of 12 days from the communication dated 18-12-2003. It is difficult to understand, as to how, the entire process of negotiation by the Additional Collector, sending the report to the State Government, considering the same by the different wings of the Food & Civil Supplies Department, including the Financial Advisor-cum-Deputy Secretary, the Secretary and the Hon'ble Minister, the decision of the State Government and the communication of the same to the Additional Collector and award of contract to respondent No. 5, was completed within a period of 12 days.

38. Therefore, there is no doubt in our mind, that the decision to reject the petitioner's tender and to award the same to respondent No. 5 is based upon consideration of irrelevant and extraneous factors and by not taking into consideration the relevant factors. The said decisions are also contrary to the public interest, as it does not protect the financial interests of the State. It is needless to state that the role model of governance requires that the action of an administrator should not only be fair, impartial, rational, reasonable and in the larger public interest, but also appear to be same so as to avoid arbitrariness. Applying the said principles, we do not feel that the second noting of the Hon'ble Minister gives an impression that the decision making was motivated on the consideration of probity. On the contrary, it appears that it was only a window-dressing.

39. We, therefore, quash and set aside the decision of the State Government to reject the tender of the petitioner, which was communicated to the Additional Collector, Akola vide fax message dated 18-12-2003 and further quash and set aside the action of the respondent Nos. 1 to 4 in awarding the contract of transportation of foodgrains to respondent No. 5. We further hold that, that since the rejection of the petitioner's tender, who is the lowest bidder, was on extraneous and irrelevant grounds, the petitioner is entitled for a declaration that, the petitioner is entitled for award of the contract in question. The award of the contract in favour of the petitioner is also in the larger public interest, inasmuch as it would save a substantial amount of Rs. 5.89 crores from the public exchequer.

40. Vide our order dated 11-2-2004, we had made it clear that "the respondent No. 5, who was awarded the contract in pursuance of the impugned order, would be paid as per the rates, on which the work was being done under earlier contract. We, therefore, direct that the Respondent No. 5 shall be paid at the rates of the old contract, for the work of transportation undertaken by him in pursuance of the impugned award of contract in his favour, till the same is allotted to the petitioner.

41. The writ petition is, therefore, allowed. Rule is accordingly made absolute in terms of prayer Clause 2, 3 and 4A with costs.

C. C. expedited.

After the judgment is pronounced. Shri A.A. Naik, the learned Counsel appearing on behalf of respondent No. 5, makes a request that effect and operation of the judgment which we have pronounced be stayed for a period of four weeks.

Taking into consideration the facts of the case, we are not inclined to grant said request. Same is rejected.