Shalimar Transport And Carting ... vs The State Of Maharashtra And ...
2014 Latest Caselaw 116 Bom

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                                                                  wp837514.odt

           IN THE HIGH COURT OF JUDICATURE OF BOMBAY




                                                                    
                        BENCH AT AURANGABAD




                                            
                               WRIT PETITION NO.8375/2014




                                           
                    Shalimar Transport and Carting
                    Contractor, through its Proprietor,
                    Shaikh Hameed s/o Shaikh Rahim,
                    age 66 yrs., occu.business,




                                 
                    r/o Shalimar Function Hall,
                    Rameshwar Plot, Rahamatnagar,
                    Parbhani. Dist.Parbhani.
                      ig                   ...Petitioner..

                             Versus
                    
              1]    The State of Maharashtra,
                    through its Principal Secretary,
                    Food, Civil Supply and Consumer
      

                    Protection Department, Mantralaya,
                    Mumbai.
   



              2]    The Divisional Commissioner,
                    Office of the Divisional Commissioner,
                    Delhi Gate, Aurangabad.





              3]    The Collector, Collector Office,
                    Parbhani.

              4]    The District Supply Officer,
                    Collector Office, Parbhani.





                                           ...Respondents..

                                  .....

    Miss.Pradnya Talekar, Advocate h/f Shri S.B. Talekar, 
    Advocate for petitioner.
    Shri   K.M.   Suryawanshi,   AGP   for   the   Respondent   nos.1 
    to 4.

                        



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                            CORAM : B.P. DHARMADHIKARI




                                                                     
                                    & A.M. BADAR, JJ.

DATE OF RESERVING JUDGMENT: 03.12.2014

DATE OF PRONOUNCING JUDGMENT : 12.12.2014

JUDGMENT [ PER A.M. BADAR,J]

1] Rule. Rule made returnable forthwith. Heard

finally by consent of parties.

2]

By the instant petition, the petitioner firm

is praying for quashing and setting aside the show

cause notice dated 10.9.2014, issued by the

respondent no.3 - Collector, Parbhani, directing him

to execute the contract , with a threat that on

failure to do so, the earnest money amount of

Rs.16,30,288/- deposited by him will be forfeited and

that the petitioner firm will be black-listed. The

petitioner is further praying for directing

respondent Nos. 1,3 and 4 to grant tender rates as

per the Monthly Wholesale Price Index existing at the

time of execution of tender contract, as provided for

under Government Resolution dated 26.11.2012. It is

case of the petitioner firm that on 31.12.2012,

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respondent No.1 State, has issued an advertisement

inviting tender for allotting work of transportation

of food grains for public distribution at Parbhani

District for the period from 2013 to 2016, as per the

norms laid down in Govt. Resolution dated 26.11.2012.

The petitioner - firm submitted its bid alongwith

requisite documents by on-line application dated

25.1.2013 and deposited an amount of Rs.16,30,388/-

as earnest amount. The bids were to be opened on

29.1.2013 at 4.00 p.m. However, on that date,

respondent No.4 District Supply Officer, informed the

bidders that because of the Court order, tender would

not be opened until further orders. The petitioner

came to know that some of the transporters filed W.P.

No. 10541 of 2012, and due to the interim orders

passed therein, tenders were ordered not to be

opened. Ultimately, that writ petition alongwith

other connected matters came to be dismissed on

7.1.2014.

3] It is case of the petitioner that after

about a year from submitting tender, and precisely on

15.1.2014, respondent No.4 - District Supply Officer,

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Parbhani, intimated the petitioner firm that the

tenders will be opened at 5.00 p.m. of 16.1.2014 and

its representative should remain present at the

office of the Collector, Parbhani, for the said

purpose.

4] On 16.1.2014, the petitioner - firm

submitted a representation stating that the bid was

submitted by it on 25.1.2013 i.e. prior to one year.

The petitioner represented that due to hike in rates

of diesel and other charges as per the Wholesale

Price Index be considered and rates, as applicable as

per the Yearly Wholesale Price Index, be given.

According to the petitioner, the bids were opened on

16.1.2014 and bid of the petitioner was found to be

lowest. He had quoted only 49% more than the base

rate. As such, the bid of the petitioner was

forwarded to respondent No.1 - Principal Secretary.

The petitioner was pursuing his case that rate be

increased as per the existing Yearly Wholesale Price

Index and he was assured that once his bid is

accepted by the High Level Committee, his demand

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would be considered.

5] According to the petitioner, he has

objection to the rates sought to be approved by the

respondent State Government because there is increase

in Wholesale Price Index due to passage of 19 months.

He was asked to visit the office of respondent No.4 -

District Supply Officer, Parbhani, for executing the

agreement on 19.7.2014. Without paying any heed to

his objection, by the impugned communication dated

10.9.2014 (Exh.P), the petitioner was called upon by

respondent No.3 - Collector, Parbhani, to execute an

agreement within a period of one week from receipt of

the said communication, under a threat that else, his

security deposit would be forfeited and necessary

proceedings under the Essential Commodities Act, 1955

shall be initiated against him. The petitioner

replied to the said notice of respondent No.3 -

Collector, by mentioning that if question of

increased rates as per the Yearly Wholesale Price

Index as of July, 2014 is not addressed, then he will

have to work in loss and after a lapse of 120 days,

tender rates does not remain valid. According to the

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petitioner, Monthly Wholesale Price Index is

increased by 12.30% from January, 2013 to June, 2014

and, therefore, base rate of Rs. 55.13 needs to be

increased by adding Rs. 3.98, so as to award base

rate of Rs.59.11 for 2 kilometers. As such,

according to the petitioner, the impugned show cause

notice dated 10.9.2014 is totally illegal.

6]

The petition came to be opposed by

respondents, by filing affidavit in reply. According

to respondents, as the other transporters have

challenged the advertisement issuing tender by filing

W.P. No. 10541 of 2012, due to interim orders passed

therein, the process of opening tender was stopped.

Ultimately, that petition alongwith connected

matters, came to be dismissed on 7.1.2014.

Thereafter, as per the directions of the Government,

respondent No.4 - District Supply Officer, informed

the petitioner and other contractors that the tender

for Parbhani District would be opened on 16.1.2014.

Upon opening of bids, the rates quoted by the

petitioner as + 49, were found to be lowest and,

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therefore, the proposal was submitted to the

respondent No.1 Principal Secretary of the Department

for approval. After some correspondence and after

refusal of the petitioner to reduce the quoted rates,

ultimately, the High Level Committee, approved rates

quoted by the petitioner at + 49.

7] According to respondents, as the petitioner

was found to be the successful bidder, upon approval

by High Level committee, he was called upon to

execute the agreement vide letter dated 19.7.2014.

Then, as the petitioner, by his letter dated

22.7.2014, objected that the rates quoted were

existing in January, 2013 and same cannot be accepted

after a period of 19 months, a meeting was called on

25.7.2014, but, in that meeting, the petitioner

refused to negotiate the rates and to execute the

agreement. Therefore, according to respondents, a

show cause notice impugned in the petition came to be

issued on 10.9.2014, and by another letter dated

10.9.2014, State Government is requested to grant

permission for re-tendering. The State Government

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has directed to start the process of re-tendering in

the District. According to respondents, as the

petitioner initially refused to execute the

agreement, the impugned notice came to be issued for

forfeiture of security deposit and for black-listing

the petitioner. According to respondents, the

petitioner was aware of the terms and conditions of

the tender which was for the period from the year

2013-2016.

8] On behalf of the petitioner, Miss.Talekar,

learned counsel submitted that the petitioner is very

much willing to accept the work subject to increase

in the rates as per the Wholesale Price Index and the

petitioner cannot be asked to work on old rates

quoted by him prior to 19 months. Learned counsel

for the petitioner further submitted that with

passage of time, there is increase in price of fuel,

other commodities as well as labour. As such, the

petitioner cannot be forced to execute the agreement

to perform the work on old rates quoted by him.

According to learned counsel for the petitioner, as

per Clause 20 of the Government Resolution dated

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26.11.2012, the contract was required to be executed

within 120 days from the opening of the tender and

the rates quoted in the tender were valid for 120

days from the date of opening the tender. As such,

according to learned counsel, the petitioner is no

longer under obligation to accept the work at old

rates unless respondents agree to consider his claim

for increase in rates, as per clause 27 of the

Government Resolution dated 26.11.2012.

9] Per contra, learned AGP, submitted that the

tender was transportation of food grains for public

distribution for the period from the year 2013 to

2016 and, therefore, the petitioner was under

obligation to execute the agreement as per the bid

submitted by him. Learned AGP further argued that

the petitioner was called for negotiations time and

again after dismissal of the writ petitions, wherein

interim order was operating. However, he failed to

negotiate and has refused to execute the agreement.

As such, according to learned AGP, respondent No.4 -

District Supply Officer , has rightly issued show

cause notice for forfeiture of security deposit as

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well as for black-listing the petitioner. Learned AGP

further argued that the State Government has directed

the respondent No.3 - Collector, Parbhani, to

initiate the process of re-tendering as well as for

taking action against the concerned bidder as per the

terms and conditions of the Government Resolution

dated 26.11.2012. Therefore, according to learned

AGP, the petition deserves to be dismissed.

10] Undisputedly, Government resolution dated

26.11.2012 lays down the procedure to be followed for

inviting tenders for transport of food grains for

public distribution system from the contractors. In

terms of that Government resolution, respondent no.3

- Collector, Parbhani, on 31.12.2012 issued a notice

inviting tenders for allotting work of transportation

of food grains for public distribution for Parbhani

District for the period from 2013 to 2016. It is not

in dispute that the petitioner - firm submitted its

bid in pursuance to the notice inviting tenders.

Following chronology of events will demonstrate how

the matter proceeded :-

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Sr.No. Date Event

1 31.12.2012 Advertisement inviting tenders for allotting transportation of food grains for public distribution for Parbhani District was issued.

2 25.1.2013 The petitioner - firm submitted its bid.

3 29.1.2013 All bids received in pursuance

to the notice inviting tenders were to be opened.

24.1.2013 Interim order came to be passed in WP 10541/12 directing respondents that

bids shall not be opened and no work order be issued until further order.

5 7.1.2014 WP 10541/12 along with

connected matters came to be dismissed.

6 15.1.2014 Respondent no.4 - District Supply Officer issued letter (Exh.I) to all bidders directing them to attend the

office of respondent no.3 -

Collector, Parbhani, at 5 p.m. of 16.1.2014 for opening bids.

7 16.1.2014 The petitioner informed Collector, Parbhani (Exh.J)

that one year has lapsed after submitting bid by him and rates quoted in the said bid were as per prices of diesel and overheads prevailing at that time. The petitioner further informed that if the bids are to be opened now, then he be granted increase / decrease in rates quoted by

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him as per the prevailing

Wholesale Price Index.

8 3.6.2014 The petitioner informed

respondent no.3 - Collector, Parbhani (Exh.L) that he is unable to reduce the rates quoted by him.

9 19.7.2014 Respondent no.3 - Collector informed the petitioner (Exh.M) that the State Government has accepted rates quoted by him and, therefore,

he should attend the office on ig 19.7.2014 for executing agreement as per terms and conditions of tender notice.

10 22.7.2014 The petitioner informed

respondent no.3 - Collector, Parbhani (Exh.O) that 19 months have lapsed from submitting bid by him and,

therefore, rates of transportation be fixed as per

rates quoted by him and on granting increase / decrease as per prevalent Wholesale Price Index. The petitioner

informed that if this condition is accepted, then he is ready to execute agreement.

11 26.8.2014 The State Government informed respondent no.3 - Collector

(Annexure R-7) that as contractor has refused to execute an agreement, action as per provisions of Government resolution dated 26.11.2012 be taken against him and steps for re-tendering be commenced.

12 10.9.2014 Respondent no.3 - Collector, Parbhani, informed the

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petitioner - firm by impugned

letter dated 10.9.2014 (Exh.P) that it is unnecessarily refusing to execute an

agreement as per the bid submitted by him. The petitioner was further informed that he should

execute an agreement within one week, else the earnest money deposited by him shall be forfeited and the firm will

be blacklisted.

11] At this juncture, it is apposite to consider

the terms and conditions of tender which are in tune

with the provisions of Government resolution dated

26.11.2012 (Exh.D). As per condition No.20 of the

tender notice as well as Government resolution dated

26.11.2012, the rates quoted by the bidders shall be

held valid for 120 days from the date of opening of

bids. Any time spent on litigation is excluded from

this period. As per condition No.21, if the lowest

bidder refuses to execute an agreement, then the

earnest money deposited by him is liable to be

forfeited. As per condition No.27, the successful

bidder is entitled for revision of rates quoted by

him as per the Wholesale Price Index published by the

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Central Government. This condition provides that

after a period of one year during the contract

period, the contractor is entitled for proportionate

increase or decrease in rates quoted by him, as per

Wholesale Price Index. According to the petitioner,

the rates quoted by him on 25.1.2013 are no more

valid because as per tender condition No.20, the

rates so quoted are valid only upto 120 days from the

date of opening of bids. As against this, according

to respondents, because of pendency of writ petition

and interim order passed therein from 24.1.2013 to

7.1.2014, the bids could not be opened and,

therefore, this period is liable to be excluded.

12] On 25.1.2013, the petitioner - firm has

submitted its bid in pursuance to the tender notice

issued by respondents. All bids received in

pursuance to the tender notice were to be opened on

29.1.2013. As such, offers made by the bidders were

to be considered by respondents on 29.1.2013 as per

the provisions of the Government resolution dated

26.11.2012. However, this process was delayed for a

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period of about one year because of interim order and

pendency of Writ Petition No.10541/2012 and connected

matters. As such the proposal submitted by the

petitioner - firm was not even considered by

respondent - authorities upto 16.1.2014. By letter

dated 15.1.2014 (Exh.I), respondent no.4 - District

Supply Officer informed all bidders to attend the

office of Collector on 16.1.2014 at 5-00 p.m. for

opening the bids received in pursuance to the tender

notice. The petitioner - firm by its communication

dated 16.1.2014 (Exh.J) has informed respondent no.3

- Collector that period of one year is over since the

date of submission of its bid, rates quoted therein

were the then prevailing prices of diesel and

overheads. The petitioner - firm categorically

informed respondent no.3 - Collector that if the bids

are to be opened now, then the petitioner - firm be

granted suitable increase or decrease in the rates

quoted by it as per the Wholesale Price Index. This

demand of the petitioner - firm was certainly in tune

with condition No.27 of the Government resolution

dated 26.11.2012 as well as the terms and conditions

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of the tender. True it is that such proportionate

increase or decrease as per Wholesale Price Index is

to be granted after a period of one year from the

date of agreement but in the case in hand, bids could

not be opened for a period of about one year due to

pendency of writ petition. As per tender notice, the

contract is for transportation of food grains for the

period from 2013 to 2016. The communication of

acceptance of rate quoted by the petitioner on

25.1.2013 was on 19.7.2014 i.e. after one year of the

notified contract period. It is trite that order of

Court should not prejudice anybody. Right of the

petitioner flowing from the conditions set out in the

tender document cannot be allowed to be adversely

affected due to non-opening of bids because of

interim order passed in the writ petition. It is

crystal clear that even prior to opening of the bids,

by representation dated 16.1.2014 (Exh.J), the

petitioner - firm has protested and made its

intention clear that if the respondent - authorities

are willing to give him benefit of suitable increase

or decrease in Wholesale Price Index, then only the

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bid submitted by it should be opened. This happened

prior to acceptance of proposal submitted by the

petitioner - firm. It is clear that respondents,

without considering this objection of the petitioner,

opened the bids on 16.1.2014 and found the rates

quoted by the petitioner - firm to be lowest amongst

all tenderers.

13]

It is not in dispute that as the petitioner

refused to negotiate the rates quoted by him,

ultimately for the first time on 19.7.2014,

respondent no.3 - Collector has informed the

petitioner the decision of High Level Committee that

the State Government has accepted the rates quoted by

him and he should attend the office on 19.7.2014 for

executing agreement. It needs to mention here that

thus offer made by the petitioner - firm came to be

accepted by respondent - State authorities on

19.7.2014 and that too without considering the

objection of the petitioner - firm about grant of

hike in rates quoted by him in terms of condition

No.27 of Government resolution dated 26.11.2012 and

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the tender conditions. After passage of one year's

time due to pending litigation, the petitioner had

made his offer conditional one and that too in tune

with condition No.27 of Government resolution dated

26.11.2012 as well as terms and conditions of the

tender document. Letter dated 16.1.2014 (Exh.J) of

the petitioner to respondent no.3 - Collector makes

it clear that even much before the communication of

acceptance of the offer made by the petitioner -

firm, it was made clear to the respondent -

authorities that the petitioner - firm is not willing

to go further in the matter due to passage of time

and the petitioner - firm is ready and willing to

participate in the process only if benefit of

increase in rate as per Wholesale Price Index is

granted to it. This conditional offer made by the

petitioner - firm finds support in the terms and

conditions of tender and the Government resolution

holding the field. The petitioner was very much

entitled to revoke the proposal submitted by him at

any time before the communication of its acceptance

by respondent - authorities. Even the petitioner was

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competent to revoke its offer because of lapse of a

period of more than one year because of pendency of

Writ Petition No.10541/2012. A proposal can always be

revoked after lapse of a reasonable time without

communication of the acceptance in view of provision

of Section 6 of the Contract Act. After disposal of

writ petition on 7.1.2014, the matter was further

delayed because of insistence by the State

authorities to the petitioner to reduce the rates

quoted by him. Even if the time spent on pendency of

the petition is excluded from consideration as per

condition No.20, still communication of acceptance of

offer of the petitioner on 19.7.2014 (Exh.M) was not

within a period of 120 days from the date of opening

of bids. As such it cannot be said that the rates

quoted by the petitioner in the bid submitted by him

on 25.1.2013 were valid even after completion of more

than 120 days. Authorities of respondent no.1 -

State have not consented to grant of increase or

decrease in rates as per prevalent Wholesale Price

Index at the time of communication of acceptance of

bid of the petitioner after a lapse of about one and

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half year from submission of bid. Respondents were

obliged to respect the terms and conditions of tender

advertisement and particularly condition No.27 by

offering to perform their obligation to grant

suitable increase or decrease in Wholesale Price

Index as the rates quoted by the petitioner came to

be approved by the High Level Committee of respondent

- State after a lapse of about one and half year.

By not doing so, respondents have abused their powers

and acted high-handedly. The Government while

entering into contract is expected not to act like a

private individual but should act in conformity with

certain healthy standards and norms. Action of the

State should not be arbitrary, irrational or

irrelevant. It must be justifiable on the basis of

policy formed by it. However, in the case in hand,

impugned communication dated 10.9.2014 (Exh.P)

informing the petitioner that on his failure to

execute an agreement, earnest money deposited by him

will be forfeited and the firm will be blacklisted is

totally unjustified and unsustainable in view of

provisions of Government resolution dated 26.11.2012

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and conditions of tender notice as well as the

reasons given in foregoing paragraphs.

14] The petitioner has also prayed for directing

respondents to grant tender rates as per Wholesale

Price Index existing at the time of execution of the

tender contract. However, respondents have already

taken decision to start the process of re-tendering

the work covered by the earlier tender notice. This

decision communicated by letter dated 26.8.2014 by

respondent no.1 - State to respondent no.3 -

Collector, Parbhani, is placed on record as Annexure

R-7. The petitioner - firm is not willing to execute

the agreement because of passage of a period of about

one and half year from the date of submission of bid.

The petitioner has not challenged the decision of the

State to initiate the process of re-tendering. As

such no directions can be given to respondents as

prayed for by the petitioner in prayer clause (B).

Needless to mention that if the petitioner

participates in the process of re-tendering, then his

bid shall be considered along with bids of other

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tenderers on merits.

15] In the result, the petition is partly allowed.

The communication dated 10.9.2014 issued by

respondent no.3 - Collector, Parbhani (Annexure P) is

quashed and set aside. Rule is made absolute in

terms of prayer clause (A). No order as to costs.

                                  
                     
                    
    [A.M. BADAR]                          [B.P. DHARMADHIKARI]
       JUDGE                                      JUDGE        
      
   






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